Annual Report • Feb 4, 2021
Annual Report
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For the year ended 31 March 2019
Company Number: 10829500
Sure Ventures plc - Annual Report and Audited Financial Statements 2019
| 1 | Investment Objective, Policy and Performance Summary 1 |
|---|---|
| $\overline{2}$ | Chairman's Statement |
| 3 | Investment Manager's Report |
| 4 | Strategic Report Business Review Principal Risks and Uncertainties Key Performance Indicators |
| 5. | Directors' Report Board of Directors Statutory Information Corporate Governance Statement Report of the Audit Committee Statement of Directors' Responsibilities Directors' Remuneration Report |
| 6 | Independent Auditors' Report |
| 7 | Financial Statements Statement of Comprehensive Income Statement of Financial Position Statement of Changes in Equity Statement of Cash Flows Notes to the Financial Statements |
| 8 | Shareholders' Information Directors, Portfolio Manager and Advisers |
Sure Ventures plc - Annual Report and Audited Financial Statements 2019
The investment objective of the Company is to achieve capital growth for investors.
The Investment policy of the Company is to seek exposure to early stage technology companies, with a focus on softwarecentric businesses in four chosen target markets:
The Company may invest directly in investee companies or obtain exposure to such companies through investment in collective investment vehicles, including the Sulr Valley Ventures (a sub-fund of Suir Valley Funds ICAV) and any further funds, which have investment policies that are complementary to those of the Company.
| 31 March 2019 | 31 March 2018 | |
|---|---|---|
| Number of ordinary shares in issue | 4,564,748 | 3,310,000 |
| Market capitalisation - Ordinary shares (in sterling) |
4,818,763 | 3,541,700 |
| Net asset value ("NAV") attributable to ordinary shareholders |
||
| - Ordinary shares | £3,790,088 | £3,049,160 |
| NAV per share attributable to ordinary shareholders |
||
| - Ordinary shares (in sterling) | 83.03 D | 92.12p |
| Ordinary share price (bid price) In sterling |
105.56p | 107.00p |
| Ordinary share price premium to NAV in sterling |
26.02% | 16.15% |
| Investments held at fair value through profit and loss |
£1,700,900 | £739,258 |
| Cash and cash equivalents | £2,139,842 | £1,663,505 |
Dividend History
There were no dividends paid during the period.
The Company's shares are admitted to trading on the Specialist Fund Segment (SFS) of the London Stock Exchange.
The ISIN number for the GBP shares is GB00BYWYZ460, Ticker: SURE.
The Company's website address is http://www.sureventuresplc.com.
Dear Shareholders.
On behalf of my fellow directors, I am delighted to present the annual results for Sure Ventures plc (the "Company") for the first full year investment for the year ending 31 March 2019.
In the year to 31 March 2019 the Company's performance was broadly in line with expectations, returning a net asset value of -9.87%, which can be explained largely by the fail in share prices of the two listed portfolio investments, immotion plc and VR Education Holdings plc. Immotion plc is a directly held investment that has subsequently recovered since 31 March 2019 year end price (5.125p) and Is now trading close to its IPO issue price (currently 9.40p). VR Education is held through the Company's investment in the Suir Valley Ventures sub fund of Suir Valley Funds ICAV (the "Fund"), being the only listed investment held in the Fund's portfolio and it continues to trade around its year end closing price (currently 9.00p).
The investee companies within the Fund's portfolio, in which the Company maintains an interest of 22,17%, have grown throughout the year and now stand at ten across a diverse, balanced range of early stage software ventures in the augmented reality (AR), virtual reality (VR), internet of things (IoT), financial technology (FinTech) and artificial intelligence (AI) space.
The Company's share price continues trade at a premium in excess of 20% of the last published net asset value, which we believe supports the growth potential of the Company's investments and demonstrates an understanding among shareholders of the Company's investment rationale and investment horizon.
In the year to 31 March 2019 Sure Valley added investments in five early stage technology companies, to compliment the portfolio of investments in five companies held as at 31 March 2018. Of these ten companies, nine remain privately owned with each investment being held at the initial seed investment valuation, with the exception of WarDucks which successfully raised €3.3m in March 2019 in a Series A funding round led by EQT Ventures leading to a x4 uplift in valuation of the original investment.
In addition to the existing direct investment in Immotion plc, a second direct investment by the Company of £500,000 was announced in April 2019 in Vivid Q Limited, a Cambridge, UK-based deep technology software company ploneering the application of holography in AR/VR and consumer electronics display.
Further detail is provided in the Investment Manager's Report and the Business Review which follows this statement.
During the Period to 31 March 2019, the Company has not declared a dividend (31 March 2018 - £nii). Pursuant to the Company's dividend policy the directors intend to manage the Company's affairs to achieve shareholder returns through capital growth rather than income. The Company does not expect to receive a material amount of dividends or other Income from its direct or indirect investments. During the year ended 31 March 2019, it should not be expected that the Company will pay a significant annual dividend, if any.
The Company may deploy gearing of up to 20% of net asset value (calculated at the time of borrowing) to seek to enhance returns and for the purposes of capital flexibility and efficient portfolio management. The Company's gearing is expected to primarily comprise bank borrowings, but may include the use of derivative instruments and such other methods as the board may determine. During the period to 31 March 2019 the Company did not employ any borrowing (31 March 2018 - £nil).
The board will continue to review the Company's borrowing, in conjunction with the Company's investment Manager on a regular basis pursuant with the Company's overall cash management and investment strategy.
In the year to 31 March 2019 the Company raised additional gross proceeds of £1,278,480, bringing the total ordinary shares in issuance as at the year end to 4,564,748. On 7 June 2019 the Company announced a raising of further gross proceeds of £293,000 by way of a private placement and following this latest admission, the Company has 4,808,026 ordinary shares in issue.
The Investment Manager's Report and Business Review following this Statement give further detail on the affairs of the Company. The board is confident of the long-term prospects for the Company In pursuit of its Investment objective and believes that the robust deal pipeline will result in additional transactions that will compliment the Company's existing investments.
I am very pleased to have been appointed Chalrman and Non-Executive Director of the Company in December 2018 and in the short period of my engagement the Company has continued to identify new, exciting and innovative investment opportunities through its well developed network. Furthermore, we welcome St. John Agnew as a Non-Executive Director to the board who replaced Chris Boody in 14 June 2019 due to Mr Boody's ongoing commitments to a global technology business. Mr Agnew brings a wealth of experience in investment management, is a lawyer by training and has served in other Non-Executive and trustee roles. Gareth Burchell continues In his role as a Non-Executive Director of the Company, which he has held since the Company's inception.
Perry Wilson Chairman 24 July 2019
Sure Ventures pic has been established to enable investors to gain access to early stage technology companies in the four exciting and expansive market verticals of augmented reality and virtual reality (AR/VR), artificial intelligence (AI), the internet of things (IoT) and financial technology (FinTech).
The Company expects to gain access to deal flow ordinarily reserved for venture capital funds and ultra-high net worth angel Investors, establishing a diversified software-centric portfolio with a clear strategy. Listing the fund on the London Stock Exchange should offer Investors:
It is often too expensive, too risky and too labour intensive for investors to build a portfolio of this nature themselves. We are leveraging the diverse skillsets of an experienced management team who have the industry network to gain access to quality deal flow, the expertise to complete extensive due diligence in target markets and the entrepreneurlal skills to help these companies to mature successfully. Those investing in our fund will get exposure to Suir Valley Ventures which in turn makes direct investments in the above sectors in the UK & Ireland.
The AR/VR market is evolving at a rapid pace. The market is expected to grow into a US\$108 billion industry within the next five years11 Significant investment in hardware capability and headset development has been made by major industry players such as Facebook (through its Oculus division), Microsoft, Sony (through its PlayStation division), HTC, Samsung and others. This Investment has Ignited a new and exciting industry within the technology sector. Hardware manufacturers and AR/VR users are now searching for software capabilities/support and content, and we believe that exposure to this industry via the Company and direct investment into software companies in the space will offer significant upside potential for investors. Through our network of technology accelerators, angel investor partners and industry contacts in the AR/VR space, we expect to have a strong chance of discovering the industry leaders of tomorrow.
The internet of Things (IoT) as a segment of the market is a broad investment area, but is defined as the interconnection via the internet of computing devices embedded in everyday objects enabling them to send and receive data. The market was estimated to be worth US\$120 billion dollars in 2016 and is predicted to reach a size of US\$253 billion by 2021[2]. The global growth and advancement of Internet coverage, the Increased speed and capability of connectivity and the mass market penetration of smartphones/tablet sales has opened up significant opportunities for software companies. Businesses from many industries are embracing the efficiencies, cost savings and the "direct to consumer" penetration this technological advancement has offered. We see continued growth in this area and believe that investor returns will benefit from exposure to the space.
FinTech as an industry segment that has grown significantly and continues to do so at a rapid pace. It has a transaction value that's estimated to be US\$2.6 trillion US dollars. The market is predicted to expand to a size of US\$6.9 trillion in the next 5 years, which represents a transaction value at a compound annual growth rate of 20.5%[3]. The banking, finance and insurance industries are increasingly accepting and embracing the efficiencies and benefits of technology. Ever changing financial regulation, cyber security requirements and payment trends are driven by technological advancement. We continue to see new and exciting deal flow in this area and believe that this market segment will continue to develop at pace. We believe that Investors looking for exposure to the emerging software technology market should Indude a FinTech element in their Investment strategy.
According to the market research firm Tractica, the global artificial intelligence software market is expected to experience massive growth in the coming years, with revenues increasing from around US\$9.5 billion in 2018 to an expected US\$118.6 billion by 2025. The overall AI market includes a wide array of applications such as natural language processing, robotic process automation, and machine learning. McKinsey found that 82% of enterprises adopting machine learning and AI have gained a financial return from their investments. For companies across all industries, the median return on investment from cognitive technologies is 17%. McKinsey did an analysis comparing the value created by advanced analytics versus AI and machine learning across common enterprise use cases. AI and machine learning have the potential to create an additional \$2.6T in value by 2020 in Marketing and Sales, and up to \$2T in manufacturing and supply chain planning.
[1] eDigl-Capital, 2017 1.1 Senar September 2016 – Internet Of Things Technology Services
[3] Statistica, June 2017
[3] Statistica, June 2017
On 6 February 2018 Sure Ventures entered into a €4.5m commitment to Suir Valley Ventures, the sole sub-fund of Suir Valley Funds ICAV and its investment was equalised into the sub-fund at that date. The first drawdown of this commitment was made on 5 March 2018 and as at 31 March 2019, a total of €1.514.814 had been drawn down against this commitment. In addition to this investment, Sure Ventures plc made a second investment of £500,000 directly into Immotion Group PLC, which was announced on 24th April 2018. As detailed in the Statement of Financial Position included in the following financial statements, these two investments represent the entire portfollo of Sure Ventures pic as at 31 March 2019.
On 2 July 2018 Sure Ventures announced a placing of 200k ordinary shares and on 28 September 2018 a placing of a future 1.05m ordinary shares to add to the initial listing on 17 January 2018 of 3.31m ordinary shares, following an extensive fundraising programme. The ordinary shares were admitted to trading on the Specialist Fund Segment of the London Stock Exchange on 3 October 2018 under the existing ISIN; GB00BYWYZ460, taking the total shares in admission as at 31 March 2019 to 4.564.748.
Suir Valley Funds ICAV (the "ICAV") is a close-ended Irish collective asset-management vehicle with segregated liability between sub-funds incorporated in Ireland pursuant to the Irish Collective Asset-management Vehicles Act 2015 and was constituted as an umbrella fund insofar as the share capital of the ICAV is divided into different series with each series representing a portfolio of assets comprising a separate sub-fund.
The ICAV was registered on 18 October 2016 and authorised by the Central Bank of Ireland as a qualifying investor alternative investment fund ("QIAIF") on 10 January 2017. The Initial sub-fund of the ICAV Is Sulr Valley Ventures (the "Fund"), which had an initial closing date of 1 March 2017. The Fund intends to invest in a broad range of software companies but with a focus on companies in the ARVR, AI, FinTech and IoT sectors.
As at 31 March 2019 the Fund had commitments totalling €20.3m and had made ten direct investments into companies spanning the ARVR. Al and IoT sectors, On 12 March 2018. Immersive VR Education Limited, the Fund's first investment, completed a flotation on the London Stock Exchange (AIM) and the Dublin Stock Exchange (ESM). The public company is now called VR Education Holdings PLC - ticker VRE. VRE was the first software company to list on the ESM in 18 years.
In the year to 31 March 2019 the Company's performance was broadly in line with expectations, returning a net asset value of -9.87%, which can be explained largely by the fall in share prices of the two listed portfolio investments, immotion plc and VR Education Holdings plc, immotion plc is a directly held investment that has subsequently recovered since 31 March 2019 year end price (5.125p) and is now trading close to its IPO issue price (currently 9.40p). VR Education is held through the Company's investment in the Suir Valley Ventures sub fund of Suir Valley Funds ICAV (the "Fund"), being the only listed investment held in the Fund's portfolio and it continues to trade around its year end closing price (currently 9.00p).
In addition to investing in the Fund, Sure Ventures plc may, in pursuit of its investment objective, invest directly in investee companies. Further to the direct investment in Immotion Group pic, referenced above, on the 26th of April 2019 Sure
Ventures pic made a second direct investment in VividQ, a Cambridge based (UK) deep tech software company pioneering the application of holography in ARVR and consumer electronics display. The company now has two direct investments which complements the Company's investment in the Fund in pursuit of the Company's investment objective.
The Fund Sure Valley Ventures has achieved a number of unrealised gains across the portfolio and continues to have access to quality deals In the above four chosen high growth sectors.
We remain positive about the future outlook of the Company In the forthcoming financial year and In line with the prospectus reserve the right to make further direct Investments provided we have sufficient working capital to do so.
Shard Capital AIFM LLP
Investment Manager
27 June 2019
The strategic report on pages 10 to 16 has been prepared to help shareholders assess how the Company operates and how it has performed. The strategic report has been prepared in accordance with the regulrements of Section 414 A-D of the Companies Act 2006 (the "Act") and best practice. The business review section of the strategic report discloses the Company's risks and uncertainties as identified by the board, the key performance indicators used by the board to measure the Company's performance, the strategies used to implement the Company's objectives, the Company's environmental, social and ethical policy and the Company's future developments.
The Company carries on business as an investment trust and its principal activity is to invest in companies in accordance with the Company's investment policy with a view to achieving its investment objective.
The investment policy of the Company is to seek exposure to early stage technology companies, with a focus on softwarecentric businesses in four chosen target markets:
The Company may invest directly in investee companies or obtain exposure to such companies through investment in collective investment vehicles, including Suir Valley Ventures (the "Fund") and any further funds, which have investment policies that are complementary to that of the Company. Investments may be made using such instruments as the Company in conjunction with Shard Capital AIFM LLP may determine but are expected to predominantly comprise equities and equity-linked securities (including shares, preference shares, convertible debt instruments, payment-in-kind notes, debentures, warrants and other similar securities) and may include derivative instruments, contractual rights and other similar interests that grant the Company rights equivalent or similar to those conferred by equity and equity linked securities.
The Company may implement its investment policy by Investing in class A shares of the Fund and by Investing In any further funds and collective investment vehicles managed by third parties. The Company will have discretion as to how to make investments, although It is anticipated that investments in the Fund will represent between 10% and 100%, of the Company's portfolio at any given time, and that investments in any further funds and collective investment vehicles managed by third parties may similarly constitute a material proportion of the Company's net asset value subject to the Company's investment restrictions.
The Company will seek to hold a diversified portfolio of Investments and, once the assets of the Company, the Fund and any other collective investment vehicles through which the Company invests are each fully invested, expects to have a direct or indirect holding of between 20 and 30 investments. It is intended that the Company would ordinarily acquire a significant interest, consisting generally of between 20% and 50% of an investee company's equity capital. The Company does not envisage taking management control of a portfolio company other than in exceptional circumstances and on a temporary basis, and only if it is considered that such action would be necessary to secure the interests of the Company. The Company has the option to invest directly in quoted companies. Furthermore, a portfollo company may seek a flotation in which case: (i) the Company may continue to hold such investments without restriction; and (ii) the Company may make follow-on investments in such portfolio companies.
The Company's investments will not be constrained by geographical limits. However, it is expected that the Company's portfolio will predominantly be exposed to companies that have their principal operations in the UK, Republic of Ireland or elsewhere in the EEA. In addition, the Company will aim to satisfy the following guideline criteria for its portfollo:
no more than 60% of the Company's NAV invested in a further fund or collective Investment vehicle managed by a third party
Invest in a further fund or collective investment vehicle managed by a third party only if such further fund or collective investment vehicle has an investment policy that is consistent with the investment policy of the Company
The Company may borrow (through bank or other facilities) a maximum of 20% of net asset value in aggregate (calculated at the time of borrowing) to seek to enhance returns and for the purpose of capital flexibility and efficient portfolio management. The Company's gearing is expected to primarlly comprise bank borrowings but may include the use of derivative instruments and such other methods as the board may determine. The board will review the Company's borrowing policy, in conjunction with Shard Capital AIFM LLP, on a regular basis.
Fluctuations in interest rates are influenced by factors outside the Company's control, and can adversely affect the Company's results and profitability in a number of ways. The Company's investment in the Fund will be denominated in euros. The Company may use derivatives, including forward foreign exchange contracts and contracts for difference, to seek to hedge against any currency risk between the currency of the Company's investment in the Fund and sterling, the base currency of the Company. Shareholders should note that there is no quarantee that such hedging arrangements will be utilised or, if so, will be successful.
The Company may hold cash on deposit and may invest in cash equivalent investments, including short-term investments In money market type funds, tradeable debt securities and government bonds and securities ("Cash and Cash Equivalents"). There is no restriction on the amount of Cash and Cash Equivalents that the Company may hold and there may be times when it is appropriate for the Company to have a significant cash or cash equivalent position instead of being fully or near fully Invested. In order to efficiently allocate all of the Company's available funds, the Company may make short and medium term investments in relatively liquid assets that are in accordance with the Company's investment policy ("Liquid Investments"). Such Liquid Investments may include shares, bonds and other debt instruments issued by companies as well as shares, units or other interests in collective investment schemes, other investment funds, exchange traded funds and fixed income investments. Prior to the full drawdown of the Company's commitment to the Fund, the cash held by the Company will be utilised in accordance with the Company's stated investment policy and cash management policy. The directors, on advice from the Manager, consider that it is the interests of shareholders for the cash held by the Company in respect of its commitment to the Fund to potentially be available for investment in sultable Investment opportunities pending drawdown by the Fund.
As at 31 March 2019 the Company held £2,139,842 of its assets in cash. This level of cash was the net result of the initial share Issue on 17 January 2018, subsequent issues which completed on 2 July 2018 and 28 September 2018, investments both in the Fund and directly as well as expenses incurred to date.
While the future performance of the Company is dependent, to a large degree, on the performance of the Fund which, in turn, is subject to many external factors, the board's intention is that the Company will continue to pursue its stated investment objective as outlined on page 2. The Company's future developments and outlook are discussed in more detail in the Chairman's Statement on page 5 and the Investment Manager's Report on page 9.
The board closely monitors the premium or discount at which the Company's ordinary shares trade in relation to the Company's underlying net asset value and takes action accordingly. Throughout the period under review the Company's ordinary shares traded at a premium to its underlying net asset value. The board is of the view that an increase of the Company's ordinary shares in issue provides benefits to shareholders, including a reduction in the Company's administrative expenses on a per share basis and increased liquidity in the Company's shares.
The board believes that it is in shareholders' best interests to prevent the Company's shares trading at a discount to net asset value because shareholders will be unable to realise the full value of their investments.
As a means of controlling the discount at which the shares may, from time to time, trade, the Company has been authorised to buy back ordinary shares up to a maximum of 14.99% of the shares issued following the flotation, which equates to 684,256 shares. As the Company's shares traded at a premium to net asset value throughout the period under review, no repurchases were undertaken. At the forthcoming AGM the board Intends to propose that its authority to buy back ordinary shares is renewed.
The Company has outsourced its operations and portfolio management to various service providers as detailed below:
In accordance with the AIFMD, the Company has appointed Shard Capital AIFM LLP to act as the Company's AIFM for the purposes of the AIFMD. The AIFM ensures that the Company's assets are valued appropriately in accordance with the relevant regulations and guidance. In addition, the Company has appointed Indos Financial Limited as depositary, to provide custody services to the Company as required by the AIFMD.
The Company made no political or charitable donations during the period under review to organisations either within or outside the EU.
The Company is required by law to provide details of environmental matters (Including impact of the Company's business on the environment), employee, human rights, social and community issues (including information about any policies it has in relation to these matters and the effectiveness of those policies). The Company does not have any employees and the board comprises non-executive directors. As an investment trust, its activities do not have any direct impact on the environment. The Company aims to minimise any detrimental effect that its actions may have by adhering to applicable social legislation, and as a result does not maintain specific policies in relation to these matters.
The Company has no operations and therefore no greenhouse gas emissions to report nor does it have responsibility for any other emissions producing sources under the Companies Act 2006 (Strategic Report and directors' Reports) Regulations 2013, including those within its underlying investment portfolio. However, the Company believes that high standards of corporate social responsibility such as the recycling of paper waste will support its strategy and make good business sense.
In carrying out its investment activities and in relationships with suppliers, the Company aims to conduct itself responsibly, ethically and fairly.
The board consists of three non-executive directors, none of whom are female. The board seeks to appoint new directors on the basis of merit as a primary consideration, with the aim of bringing an appropriate range of skills and experience together.
The board has carried out a robust assessment of its risks and controls as detailed below. The day-to-day risk management functions of the Company have been delegated to Shard Capital AIFM LLP, which reports to the board.
The Company has no employees and the directors have all been appointed on a non-executive basis. Whilst the Company has taken all reasonable steps to establish and maintain adequate procedures, systems and controls to enable it to comply with its obligations, the Company is reliant upon the performance of third party service providers for its executive function. In particular, the manager, depositary, administrator and registrar amongst others, will be performing services which are integral to the day-to-day operation, including IT, of the Company.
The termination of service provision by any service provider, or fallure by any service provider to carry out its obligations to the Company, or to carry out its obligations to the Company in accordance with the terms of its appointment, could have a material adverse effect on the Company's operations and its ability to meet its investment objective.
Day-to-day oversight of third party service providers is exercised by the Manager and reported to the board on a quarterly basis. As appropriate to the function being undertaken, each of the service providers is subject to regular performance and compliance monitoring. The performance of Shard Capital AIFM LLP (the 'Manager') in its duties to the Company is subject to ongoing review by the board on a quarterly basis as well as formal annual review by the Company's management engagement committee.
The appointment of each service provider is governed by agreements which contain the ability to terminate each of these counterparties with limited notice should they continually or materially breach any of their obligations to the Company.
The Company will rely on key Individuals at the Manager to identify and select investment opportunities and to manage the day-to-day affairs of the Company. There can be no assurance as to the continued service of these key Individuals at the Manager. The departure of key individuals from the Manager without adequate replacement may have a material adverse effect on the Company's business prospects and results of operations. Accordingly, the ability of the Company to achieve its investment objective depends heavily on the experience of the Manager's team, and more generally on the ability of the Manager to attract and retain sultable staff.
The interests of the Manager are closely aligned with the performance of the Company through the management and performance fee structures in place and direct investment by certain key individuals of the Manager. Furthermore, investment decisions are made by a team of professionals, mitigating the impact loss of any single key professional within the Manager's organisation. The performance of the Manager in its duties to the Company is subject to ongoing review by the board as well as formal annual review by the management engagement committee.
The market price of the issued shares may fluctuate widely in response to different factors and there can be no assurance that the Issued shares will be repurchased by the Company even if they trade materially below their net asset value. Similarly, the shares may trade at a premium to net asset value whereby the shares can trade on the open market at a price that is higher than the value of the underlying assets. There can be no assurance, express or implied, that shareholders will receive back the amount of their investment in the issued shares.
The Manager and the board closely monitor the level of discount or premium at which the shares trade on the open market. The Company may purchase the shares in the market with the intention of enhanding the net asset value per ordinary share, however there can be no assurance that any purchases will take place or that any purchases will have the effect of narrowing any discount to net asset value at which the ordinary shares may trade. When the shares trade at a premium the Company may issue shares to reduce the premium at which shares trade. As at 31 March 2019 the shares were trading at a premium to net asset value.
There can be no assurance that the Manager will continue to be successful in implementing the Company's investment objective.
The Company's investment decisions are delegated to the Manager. Performance of the Company against its investment objectives is closely monitored on an ongoing basis by the Manager and the board and is reviewed in detail at each board meeting. Any action required to mitigate underperformance is taken as deemed appropriate by the Manager.
The Company may use borrowings in connection with its Investment activities Including, where the Manager believes that it is in the interests of shareholders to do so, for the purposes of seeking to enhance investment returns. Such borrowings may subject the Company to interest rate risk and additional losses if the value of its investments falls. Whilst the use of borrowings should enhance the net asset value of the Issued shares when the value of the Company's underlying assets is rising, it will have the opposite effect where the underlying asset value is falling. In addition, in the event that the Company's income falls for whatever reason, the use of borrowings will increase the impact of such a fall on the Company's return and accordingly will have an adverse effect on the Company's ability to pay dividends to shareholders.
The Manager and the board closely monitors the level of gearing of the Company. The Company has a maximum limitation on borrowings of 20% of net asset value (calculated at the time of borrowing) which the Manager may affect at its discretion. As at the date of this report, the Company had no current borrowings outstanding.
The Company expects to have a material level of exposure to unquoted companies that are aligned with the Company's strategy and that present opportunities to enhance the Company's return on its investments. Such investments, by their nature, involve a higher degree of valuation and performance uncertainties and liquidity risks than Investments in Ilsted and quoted securities and they may be more difficult to realise. The liliquidity of such Investments may make it difficult for the Company to sell them If the need arises and may result in the Company realising significantly less than the value at which it had previously recorded such investments. Investments in unlisted equity securities, by their nature, involve a higher degree of valuation and performance uncertainties and liquidity risks than investments in listed securities and therefore may be more difficult to realise.
The Company has established Investment restrictions on the extent to which it can invest up to 15% of net asset value In a single investment. Compliance with these restrictions is monitored by the Manager and by the board on an ongoing basis.
Any changes in the Company's tax status or in taxation legislation could affect the value of investments held by the Company, affect the Company's ability to provide returns to shareholders and affect the tax treatment for shareholders of their investments In the Company.
The Company intends at all times to conduct its affairs so as to enable it to qualify as an investment trust for the purposes of Chapter 4 of Part 24 of the Corporation Tax Act 2010. Both the board and the Manager are aware of the requirements which are to be fulfilled in any accounting period for the Company to maintain its investment trust status. The conditions required to satisfy the investment trust criteria shall be monitored by the compliance function of the Manager and performance of the same shall be reported to the board on a quarterly basis.
The Company and its third-party service providers are subject to various legislation and regulations, including, but not limited to the Data Protection Act 2018 and the General Data Protection Regulation. Any breach of applicable legislative obligations could have a negative impact on the Company and impact returns to shareholders.
The Company engages only with third party service providers which hold the appropriate regulatory approvals for the function they are to perform, and can demonstrate that they can adhere to the regulatory standards required of them. Each appointment is governed by agreements which contain the ability to terminate each of these counterparties with limited notice should they continually or materially breach any of their legislative obligations, or their obligations to the Company more broadly. Additionally, each of the counterparties is subject to regular performance and compliance monitoring by the Manager, as appropriate to their function, to ensure that they are acting in accordance with applicable regulations and are aware of any upcoming regulatory changes which may affect the Company. Performance of third party service providers is reported to the board on a quarterly basis, whilst the performance of the Manager in its duties to the Company is subject to ongoing review by the board on a quarterly basis as well as formal annual review by the management engagement committee.
The board monitors success in implementing the Company's strategy against a range of key performance indicators ("KPIs"), which are viewed as significant measures of success over the longer term. Although performance relative to the KPIs is also monitored over shorter periods, it is success over the long term that is viewed as more important, given the inherent volatility of short-term investment returns. The principal KPIs are set out below:
The Company does not currently follow any benchmark. Similarly, Suir Valley Ventures does not follow any benchmark. Accordingly, the portfolio of investments held by the Company and Suir Valley Ventures will not mirror the stocks and weightings that constitute any particular index or indices, which may lead to the Company's shares failing to follow either the direction or extent of any moves in the financial markets generally (which may or may not be to the advantage of shareholders).
The Strategic Report was approved by the board of directors on 24 July 2019 and signed on its behalf by:
Perry Wilson Chairman
Chairman of the board and the management engagement committee and a member of the audit committee
Perry Wilson is a financial services professional with over 25 years' experience in investment banking and fund management, responsible for running portfolio risk positions in global markets. He started his career in accountancy before joining the asset trading group at Lazard in 1987, focusing on illiquid credit and structured products and going on to become a director of the bank.
In 2003 Mr Wilson Joined Argo Capital as executive director, an AIM listed alternative investment fund management firm and was part of a small team of portfolio managers that oversaw the group's fiftyfold AUM growth to US\$1.3bn at it's height. After leaving Argo in 2010 Mr Wilson Joined Integra Capital to implement a liquid credit strategy before setting up a fixed income sales and trading operation for a Central Asian investment bank, Visor Capital in 2013.
Since 2015 Mr Wilson has been on the board of a number of UK and offshore finandal services firms and investment funds, as independent non-executive director, and also acts as chair of trustees for a UK pension plan, providing corporate governance and oversight utilising his extensive financial markets background and experience.
Chairman of the audit committee and member of the management engagement committee
Chris Boody works in the Strategic Business Development team for Microsoft. Mr. Boody is focused on the Connected Vehicle market segment and Autonomous Driving technology programs. He works with major automobile makers world-wide to digitally transform their businesses. Prior to joining Microsoft, Mr. Boody was the Chief Technology Officer of SVG Partners in California, USA. He was responsible for managing SVG's Engineering Services, Innovation (LAB353) and Startup Accelerator programs (THRIVE). He worked directly with the CEO to help establish a Venture Capital fund and advise the CEO on investment options for promising startups. Mr. Boody has over 20 years' experience in Mobile and Software Services management. He started his Mobile career with McCaw Cellular communication, focused on the first Mobile Operator deployment of Wireless Data In 1995. During his career with AT&T, Mr. Boody managed Engineering and Architecture teams, partnered with Developers to enhance mobile ecosystems, and ran a multi-billion dollar Consumer Messaging business. Mr. Boody serves on management boards for technology start-ups and recently joined the Chancellor's Advisory board for the University of Washington. He was recognized for his strong leadership and mentoring of Irish technology company CEOs by receipt of the Meitheal Award from Irish Prime Minister Brian Cowan. Mr. Boody holds a Bachelor of Science degree in Business Administration from California State University, Fresno and a Master of Management from the University of Washington.
Gareth Burchell began his career in the insurance industry and spent three years at RBS Insurance prior to beginning his career in investment advice and management. Mr. Burchell is currently Head of Shard Capital Stockbrokers and chairs an investment committee that specialises in providing funding for both listed and unlisted small companies. Mr Burchell has had a focus on the small cap arena for 15 years and he and his team have provided £90 million of funding across 221 companies. He has an in-depth knowledge of the UK listing process of various small cap exchanges.
(1) Appointed 20 December 2018
(2) Appointed 8 September 2017 (Chris Boody realgned 14 June 2019, replaced by St. John Agnew on same day)
The names and biographical details of the board members who served on the board as at the year end can be found on page 18. Nick Horton and Alex Haynes were appointed the Company's Initial directors at the Company's incorporation on 21 June 2017.
During the year under review the Company purchased and maintained directors' and officers' liability insurance for its directors and officers as permitted by section 233 of the Companies Act 2006.
The Company is an Investment company within the meaning of section 833 of the Companies Act 2006.
The Company operates as an investment trust In accordance with Chapter 4 of Part 24 of the Corporation Tax Act 2010 and the investment Trust (Approved Company) (Tax) Regulations 2011. In the opinion of the directors, the Company has conducted its affairs so that It is able to maintain Its status as an investment trust. The Company has obtained this approval from HM Revenue & Customs.
The Company is an externally managed closed-ended investment company with an unlimited life and has no employees.
Details of the Company's principal risks and uncertainties can be found In the Strategic Report on pages 14 to 16 inclusive of details of the Company's internal controls. Details of the Company's hedging policies are set out in the Strategic Report on page 10.
As at 31 March 2019, the Company had 4,564,748 (2018: 3,310,000) ordinary shares in issue. There are no other classes of shares in issue and no shares are held in treasury.
On 17 November 2017, the board was granted authority to issue up to 50,000,000 ordinary shares and / or C shares, The directors are seeking to renew this authority which will otherwise expire at the forthcoming AGM.
On Incorporation, one ordinary share of 1p was issued.
During the year under review a total of 1,254,748 (2018: 3,310,000) ordinary shares were issued as detailed below:
| Shares issued | PINCE SBILL DEE ISDUED $\parallel$ mence $\rangle$ |
Philippin inet asker value in yill |
|
|---|---|---|---|
| 11 July 2018 | 200,000 | 100.0 | 3.84% |
| 31 October 2018 | 1,054,748 | 102.25 | 0.64% |
(1) Last published NAV at time of issue
The ordinary shares carry the right to receive dividends and have one voting right per ordinary share. There are no shares which carry specific rights with regard to the control of the Company. The shares are freely transferable. There are no restrictions or agreements between shareholders on the voting rights of any of the ordinary shares or the transfer of shares
The Company has been Incorporated with an unlimited life.
On a winding up or a return of capital by the Company, the ordinary shareholders are entitled to the capital of the Company.
No final dividend is being recommended. The Company's policy is to pay dividends on annual basis, as set out in the Company's prospectus dated 17 November 2017 and the supplementary prospectus dated 2 January 2018 (the "Prospectus"). There were no dividends paid in respect of the year ended 31 March 2019.
During the year to 31 March 2019, the Company received no notifications in accordance with the Disclosure and Transparency Rule 5.1.2R of Interests in 3% or more of the voting rights attaching to the Company's issued share capital.
The Company's independent auditor, PKF Littlejohn LLP ("PKF"), was appointed in the prior year and has expressed its willingness to continue to act as the Company's auditor for the forthcoming financial year. The audit committee has carefully considered the auditor's appointment, as required in accordance with its terms of reference, and, having regard to its effectiveness and the services it has provided the Company during the period under review, has recommended to the board that the independent auditor be appointed at the forthcoming AGM. At the AGM resolutions will be proposed for the appointment of the independent auditor and to authorise the directors to agree its remuneration for the forthcoming financial year. In reaching its decision, the audit committee considered the points detailed on pages 29 to 31 of the Audit Committee's report.
As required by section 418 of the Companies Act 2006, the directors who held office at the date of this report each confirm that, so far as they are aware, there is no relevant audit information of which the Company's auditor is unaware and each director has taken all the steps required of a director to make themselves aware of any relevant audit information and to establish that the Company's auditor is aware of that information.
Any amendments to the Company's articles of association must be made by special resolution.
The directors do not currently consider the UK's exit from the EU to pose a significant risk to the Company.
The directors have reviewed the financial projections of the Company from the date of this report, which shows that the Company will be able to generate sufficient cash flows in order to meet its liabilities as they fall due. Accordingly, the directors are satisfied that the going concern basis remains appropriate for the preparation of the financial statements. The Company also has detailed policies and processes for managing the risks, set out in the Strategic Report on pages 14 to 16.
In accordance with Principle 21 of the Association of Investment Companies Code of Corporate Governance published in July 2016 and provision C.2.2 of the UK Corporate Governance Code, published by the Financial Reporting Council in April 2016, the directors have assessed the prospects of the Company over a three-year period ending March 2022. The board believes this period to be appropriate taking into account the current trading position and the potential impact of the principal risks that could affect the viability of the Company. At 31 March 2019, the Company had cash balances of £2,089,188 (£1,620,189) in excess of all llabilities, there are therefore limited risks to the viability of the Company.
Analysis to assess viability has focused on the risks in delivery of the growth of the business and a series of projections have been considered changing funding levels and the performance of the assets acquired.
The analysis demonstrates that, the Company would be able to withstand the Impact of the risks identified. Based on the robust assessment of the principal risks, prospects and viability of the Company, the board confirms that they have reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the three-year period ending March 2022.
Apex Fund Services (Ireland) Ltd (the "Company Secretary") is the company secretary of the Company. Under the terms of the administration agreement, the fee for the provisions of the Company Secretary's services will be £25,000 per annum (exclusive of VAT).
Apex Fund Services (Ireland) Ltd (the 'Administrator'), is the administrator of the Company. The Administrator provides the day-to-day administration of the Company. The Administrator is also responsible for the Company's general administrative functions, such as the calculation of the net asset value and maintenance of the Company's accounting records, and ensures that the Company complies with its continuing obligations as an investment trust.
Under the terms of the administration agreement, the Administrator is entitled to an annual administration fee equal to the greater of: (i) €28,000 per annum; and (ii) an amount equal to 0.08% of the portion of NAV up to and including €100 million, 0.06% of the portion of NAV between €100 million and €200 million and 0.05% of the portion of NAV above €200 million (exclusive of VAT and out of pocket expenses). The Administrator is also entitled to reimbursement of all reasonable out of pocket expenses incurred by it in connection with the performance of its duties. The administration agreement can be terminated by either party by providing 90 days' written notice.
Shard Capital AIFM LLP (the 'Manager'), a UK-based company authorised and regulated by the Financial Conduct Authority, is the Company's manager and alternative investment fund manager ("AIFM") for the purposes of the Alternative Investment Fund Managers Directive ("AIFMD"). The Manager is responsible for the discretionary management of the Company's assets and ensures that these are valued appropriately in accordance with the relevant regulations and guidance.
Under the terms of the management agreement, the Manager is entitled to a management fee and a performance fee together with reimbursement of reasonable expenses incurred by it in the performance of its duties. From the period from first admission, the management fee payable was based on 1.25% of the net asset value. The Manager is also entitled to receive a performance fee equal to 15% of any excess returns over a high watermark, subject to achieving a hurdle rate of 8% In respect of each performance period. Further details on the management fee and the performance fee can be found in Note 5 to the financial statements. The management agreement can be terminated by either party providing twelve months' written notice.
The Company's depositary is Indos Financial Limited (the "Depositary"), a company authorised and regulated by the Financial Conduct Authority. Under the terms of the depositary services agreement the Depositary is entitled to a monthly depositary fee equal to the greater of: (i) £2,000 and £2,917 per month (depending on the activity of the Company); and (ii) an amount equal to 1/12 of 0.03% of NAV (exclusive of VAT and out of pocket expenses). The depositary services agreement can be terminated by either party by providing 90 days' written notice.
Shard Capital Partners LLP ("Shard Capital"), a company authorised and regulated in the United Kingdom by the Finandal Conduct Authority, is the Company's Placing Agent in respect of share issues under the placing programme set out in the prospectus dated 17 November 2017 and the supplementary prospectus dated 2 January 2018. Shard Capital was pald a commission of £63,621 and £50,922 by the Company in consideration for Its services in relation to the Issue of shares in 2019 and 2018 respectively.
There are no agreements which the Company is party to that might be affected by a change of control of the Company.
On 26 April 2019 Sure Ventures PLC announced a direct investment of £500,000 in VividQ Limited, a UK-based deep tech software company pioneering the application of holography in ARVR and consumer electronics display.
On 4 June 2019 Suir Valley Ventures, a sub-Fund of Suir Valley Funds ICAV, of which Sure Ventures PLC has committed EUR 4.5m, changed its name to Sure Valley Ventures.
On 7 June 2019 Sure Ventures PLC issued an additional 305,208 ordinary shares at a price of £0.96 per share, taking the total shares in issue to 4.869.956.
On 14 June 2019 Chris Boody resigned as a Non-Executive Director and St. John Agnew was appointed as a Non-Executive Director.
Indications of likely future developments in the business of the Company are set out in the Strategic Report on pages $10-16.$
The disclosures below are made in compliance with the requirements of Listing Rule 9.8.4.
| Listing Rule | |
|---|---|
| 9.8.4 (1) - capitalised interest | The Company has not capitalised any interest in the year under review. |
| 9.8.4(2) - unaudited financial Information |
The Company has not published any unaudited financial information in either a class 1 circular or a prospectus or in respect of any profit forecast or profit estimate in accordance with listing rule 9.2.18. |
| $9.8.4(3)$ - deleted | This provision has been deleted. |
| $9.8.4(4)$ - incentive schemes | The Company has no long-term incentive schemes in operation. |
| $9.8.4(5)$ and $(6)$ - walver | No director of the Company has waived or agreed to waive any current or future emoluments from the Company. |
| $9.8.4(7)$ , $(8)$ and $(9)$ | During the year under review, the Company issued a total of 1,254,728 (2018: 3,310,000) ordinary shares with a nominal value of £0.01 and an average price of 101.13 pence per share for a total consideration of £1,278,480 (2018: £3,310,000) excluding commission and issue costs. Further details can be found on page 44. |
| $9.8.4(8)$ and $9.8.4(9)$ - relate to companies that are part of a group of companies |
The Company is not part of a group of companies. These Listing Rules therefore, do not apply. |
| $9.8.4(10) -$ contract of significance |
During the year under review, there were no contracts of significance subsisting to which the Company is a party and in which a director of the Company is or was materially interested or between the Company and a controlling shareholder. |
| 9.8.4(11) | The Company is not party to any contracts for the provision of services to the Company by a controlling shareholder. |
| $9.8.4(12)$ and $(13) -$ walving dividends |
During the year under review, there were no arrangements under which a shareholder has waived or agreed to walve any dividends or future dividends. |
| 9.8.4(14) | As set out in the prospectus dated 17 November 2017, the Company has not voluntarily adopted Listing Rule 9.8.4(14). |
By order of the board
Company Secretary
Date: 24 July 2019
The corporate governance statement explains how the board has sought to protect shareholders' interests by protecting and enhancing shareholder value. Since the Company's listing, the Financial Reporting Council's UK Corporate Governance Code (the "UK Code") has been followed by the Company. The directors are ultimately responsible for the stewardship of the Company and this section explains how they have fulfilled their corporate governance responsibilities. This corporate governance statement forms part of the directors' report.
As set out in the Prospectus, the Company has adopted certain key provisions of the UK Listing Rules in accordance with the London Stock Exchange (LSE) listings. Pursuant to the Listing Rules as voluntarily adopted by the Company, the Company must "comply or explain" against each of the provisions of the UK Code. The board is committed to high standards of corporate governance. The Listing Rules and the Disclosure and Transparency Rules ("DTR") require the board to disclose how it has applied the principles of the updated UK Code, published by the Financial Reporting Council ("FRC") in July 2018. A copy of the UK Code is available from the website of the Financial Reporting Council at https://www.frc.org.uk/directors/corporate-governance-and-stewardship/uk-corporate-governance-code
The Association of Investment Companies ("AIC") has published its own Code on Corporate Governance (the "AIC Code"), by reference to the AIC Corporate Governance Guide for Investment Companies (the "AIC Guide"), revised in July 2016. The AIC Code provides a comprehensive guide to best practice in certain areas of governance where the specific characteristics of investment trusts suggest alternative approaches to those set out in the UK Code. The FRC has confirmed that AIC member companies who report against the AIC Code and who follow the AIC Guide will be meeting their obligations in relation to the UK Code and the associated disclosure requirements of the DTR. Both the AIC Code and AIC Guide are available from the AIC's website at theaic.co.uk.
The board has considered the principles and recommendations of the AIC Code by reference to the AIC Guide. The AIC Code, as explained by the AIC Gulde, addresses all the principles set out in the UK Code, as well as setting out additional principles and recommendations on issues that are of specific relevance to the Company.
The board considers that voluntarily reporting against the principles and recommendations of the AIC Code, and by reference to the AIC Guide (which incorporates the UK Code), will provide better information to shareholders.
The Company has complied with the recommendations of the AIC Code and the relevant provisions of the UK Code, except as set out below.
The UK Code includes provisions relating to:
For the reasons set out in the AIC Guide, and as explained in the UK Code, the board considers these provisions are not relevant to the Company, being an externally managed investment company. In particular, all of the Company's day-today management and administrative functions are outsourced to third parties. As a result, the Company has no executive directors, employees or Internal operations. The Company has therefore not reported further in respect of these provisions.
The board does not, at present, consider that separate nomination and remuneration committees would be appropriate given the board's size, being three members in total. Currently, decisions concerning the board's remuneration, nomination and board appraisals are undertaken by the board as a whole. However, the need for separate nomination and remuneration committees and an internal audit function will be kept under review.
The board consists of three directors, all of whom are non-executive directors. Biographies of the directors are shown on page 18 and demonstrate the wide range of skills and experience that they bring to the board. The directors possess business and financial expertise relevant to the direction of the Company and consider themselves to be committing sufficient time to the Company's affairs.
None of the directors has a service contract with the Company, nor are any such contracts proposed. Each director has been appointed pursuant to a letter of appointment entered into with the Company. The directors' appointment can be terminated in accordance with the articles of association and without compensation. There are no agreements between the Company and any director which provide for compensation for loss of office in the event that there is a change of control of the Company.
Copies of the letters of appointment will be available at the AGM.
The Chairman, Perry Wilson, Is Independent and considers himself to have sufficient time to commit to the Company's affairs. The Chairman's other commitments are detailed in his blography on page 18.
The directors have determined that the size of the Company's board does not warrant the appointment of a senior independent Director at this time. All of the directors are available to address shareholder queries or engage in consultation as regulred.
The board of directors meets at least four times a vear and more often if required.
The table below sets out the directors' attendance at board and audit committee meetings held in the financial period to the approval of Annual Report on 24 July 2019, against the number of meetings each board or audit committee member was eligible to attend.
| Diractor | 3081 | Audit Committee |
|---|---|---|
| Perry Wilson | 2/5 | N/A |
| Chris Boody | 4/5 | 1/1 |
| Gareth Burchell | 5/5 | N/A |
| Sean Nicolson | 4/5 | 1/1 |
| St John Agnew | N/A | N/A |
No Individuals other than the committee or board members are entitled to attend the relevant meetings unless they have been invited to attend by the board or relevant committee.
Directors are provided with a comprehensive set of papers for each board or committee meeting, which equips them with sufficient information to prepare for the meetings.
The board has a formal schedule of matters specifically reserved to it for decision to ensure effective control of strategic, financial, operational and compliance issues, which includes:
There is a procedure in place for the directors to take independent professional advice at the expense of the Company. No such professional advice has been taken by the directors during the period under review.
The Company has taken out directors' and officers' liability insurance, such cover to be maintained for the full term of each director's appointment.
Each of Perry Wilson, Sean Nicolson and Chris Boody was considered, on appointment, to be Independent of Shard Capital AIFM LLP and free from any business or other relationship that could materially interfere with the exercise of his independent judgement and remained so throughout the year.
Gareth Burchell is a member of the Shard Capital AIFM LLP investment committee. Mr. Burchell is also currently Head of Shard Capital Stockbrokers and chairs an investment committee that specialises in providing funding for both listed and unlisted small companies. There are no other relationships or circumstances relating to the Company that are likely to affect the judgement of any of the directors.
Care will be taken at all times to ensure that the board is composed of members who, as a whole, have the required knowledge, abilities and experience to properly fulfil their role and are sufficiently independent.
No director holds shares in the Company.
In consideration of the Company's launch during 2018 and the focus on investment, policies and procedures, the board has scheduled the first evaluation to take place during 2019 when it was felt the board and its Committees would be fully established and the most benefit would be derived from the process. Any training needs identified as part of the board evaluation process will be added to the agenda of the next board meeting following such evaluation.
The Company Secretary, the board or the Manager upon request of the board or any director individually, will offer induction training to new directors about the Company, its key service providers, the directors' duties and obligations and other matters as may be relevant from time to time.
The board members are encouraged to keep up to date and attend training courses on matters which are directly relevant to their involvement with the Company.
The rules concerning the appointment and replacement of directors are contained in the Company's articles of association and the Companies Act 2006.
None of the directors consider length of service as an impediment to independence or good judgement but, if they felt that this had become the case, the relevant director would stand down.
The Directors of the Company and their blographies are set out on page 18. At the forthcoming AGM, all members of the board will put themselves forward for re-election.
The board considers that all of the current directors contribute effectively to the operation of the board and the strategy of the Company. The board has considered each board member's independence of the Company and Manager. As such the board believes that it is in the best Interests of shareholders that each of the directors be re-elected.
Details of the Manager's agreement and fees are set out in note 5 to the financial statements.
The board keeps the performance of the Manager under continual review through the Company's management engagement committee.
The articles of association provide that the directors may authorise any actual or potential conflict of interest that a director may have, with or without Imposing any conditions that they consider appropriate on the director. Directors are not able to vote in respect of any contract, arrangement or transaction in which they have a material interest and in such circumstances, they are not counted in the quorum at the relevant board meeting. A process has been developed to Identify any of the directors' potential or actual conflicts of interest. This includes declaring any potential new conflicts before the start of each board meeting.
The board has delegated certain responsibilities to its audit committee. The committee comprises two or more Independent directors. The Chairman of the board may be a member of the committee but may not act as chairman of the committee. The board has established formal terms of reference for the audit committee which are available from the Company Secretary upon request. An outline of the remit of the audit committee and its activities during the year are set out below.
The audit committee is chaired by Perry Wilson and meets at least twice a year. It is responsible for ensuring that the financial performance of the Company is properly reported and monitored and provides a forum through which the Company's external auditor may report to the board. The audit committee reviews and recommends to the board the annual and half-yearly reports and financial statements, financial announcements, internal control systems, risk metrics, decisions requiring a significant element of judgement and procedures and accounting policies of the Company.
Further details on the work of the audit committee can be found in the report of the audit committee on page 29 - 31.
The Chairman of the Company acts as chairman of the management engagement committee. The management engagement committee meets once a year. Its principal duties are to formally review the actions and judgements of the Manager and the terms of its management agreement. The committee reports to the board on its proceedings after each meeting.
The terms of reference of the committee are available from the Company Secretary.
The board has direct access to the advice and services of the Company Secretary, which is responsible for ensuring that the board and Committee procedures are followed and that applicable rules and requiations are compiled with. The Company Secretary is also responsible for ensuring good information flows between all partles.
The board reviews reports provided by qualified Independent Industry consultants and Shard Capital Partners LLP on the Company's shareholder base and its underlying beneficial owners. The Manager and Shard Capital Partners LLP disclose any concerns raised by shareholders to the board.
The Financial Reporting Council (FRC) Introduced a Stewardship Code which sets out the responsibilities of Institutional shareholders in respect of Investee companies. Under the Stewardship Code, managers should:
Sure Ventures plc - Annual Report and Audited Financial Statements 2019 26
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The Company recognises that with respect to its equity assets one of the Important obligations that it has as a shareholder is the right to vote on issues submitted to shareholders. These issues may include the election of directors and other Important matters that affect the structure of the Investee company. The Manager acts on behalf of the Company in these matters and will exercise its voting rights, supported by independent providers, if considered appropriate, ahead of voting.
All shareholders have the opportunity to attend and vote, in person or by proxy, at the AGM.
The notice of the AGM, which is sent out at least 21 clear days in advance of the AGM, sets out the business of the meeting and any item not of an entirely routine nature is explained in the directors' report. Separate resolutions are proposed in respect of each substantive issue.
Shareholders are encouraged to attend the AGM and to participate in proceedings. The Chairman of the board and the directors, together with representatives of the Manager, will be available to answer shareholders' questions at the AGM. Proxy voting figures are available to shareholders at the AGM.
The Manager holds regular discussions with major shareholders, the feedback from which is provided to and greatly valued by the board. The directors are available to enter Into dialogue and correspondence with shareholders regarding the progress and performance of the Company. Further Information about the Company can be found on the Company's website http://www.sureventuresplc.com
The board has elected not to have an Internal audit function as the Company delegates its operations to third-party service providers and does not employ any staff. Instead It has been agreed that the Company will rely on the internal controls which exist within its third-party providers.
The administrator, depositary and manager have established internal control frameworks to provide reasonable assurance on the effectiveness of the internal controls operated on behalf of their clients. The manager, the administrator, the depositary and the Company Secretary will report on any breaches of law or regulation, if and when they arise, periodically in scheduled board reports. The audit committee considers annually whether there is any need for an internal audit function, and it has agreed that it is appropriate for the Company to rely on the internal audit controls which exist within its third-party providers.
The board keeps under review the effectiveness of the Administrator and the Manager's systems of internal control and risk management. During the period under review, the board has not identified any significant failings or weaknesses in the internal control systems of its service providers. Details of the Company's risks can be found on pages 14 to 16 of the Strategic Report, together with an explanation of the controls that have been established to manage each risk. The risk matrix provides a basis for the audit committee and the board to regularly monitor the effective operation of the controls and to update the matrix when new risks are identified.
The system of internal control and risk management is designed to meet the Company's particular needs and the risks to which it is exposed. The board recognises that these control systems can only be designed to manage, rather than ellminate, the risk of failure to achieve business objectives and to provide reasonable, but not absolute, assurance against material misstatement or loss.
In accordance with 3.3.5 (5) of the Financial Conduct Authority's Investment Funds Sourcebook ("FUND") and in accordance with the Financial Conduct Authority's Finalised guidance - General guidance on the AIFM Remuneration Code (SYSC 19B) ('the Guidelines'), dated January 2014, the total amount of remuneration paid by or paid to Shard Capital AIFM LLP, for the financial period to the 31 March 2019, in respect of the Company was £4,766. There was no carried interest paid in respect of the Company. Shard Capital AIFM LLP does not consider that any Individual member of staff or partner of Shard Capital AIFM LLP has the ability to materially impact the risk profile of the Company.
The AIFMD requires that Shard Capital AIFM LLP ensures that certain other matters are actioned and or reported to investors. Each of these is set out below.
There are no assets subject to special arrangements due to their illiquid nature and no new arrangements for the managing of the liquidity of the Company.
There is no change to the arrangements, as set out in the Prospectus, for managing the Company's liquidity.
The current risk profile of the Company is set out in the Strategic Report: Principal Risks and Uncertainties on pages 14 to 16 and in note 16 of the Financial Statements, 'Financial RIsk Management'.
The Company is permitted to be leveraged and the table below sets out the current maximum permitted and actual leverage.
| As a percentage of net asset value. | ross method | |
|---|---|---|
| Maximum level of leverage | 100% | 150% |
| Leverage as at 31 March 2019 | 45% | 101% |
There have been no breaches of the permitted leverage limits within the reporting period and no changes to maximum level of leverage employed by the Company.
Shard Capital AIFM LLP has confirmed that all required reporting to the Financial Conduct Authority has been undertaken in accordance with FUND 3.4.
This Report was approved by the board of directors on 24 July 2019.
On behalf of the board Perry Wilson Chairman
As chairman of the audit committee I am pleased to present the audit committee report for the year ended 31 March 2010
As the board is small with only three members, Chris Boody and Perry Wilson are both appointed members of the audit committee. As chairman of the audit committee, I can confirm that I have relevant financial experience to fulfil my obligations in this capacity.
The role of the audit committee is defined in its terms of reference, which can be obtained from the Company Secretary.
In summary, the role of the audit committee includes the following:
The audit committee has met twice during the year under review and considered the following Items:
The Audit Committee also reviewed the following items:
In relation to non-audit services, the audit committee has reviewed and implemented a policy on the engagement of the auditor to supply non-audit services and this will be reviewed on an annual basis. All requests or applications for other services to be provided by the auditor are submitted to the audit committee and will include a description of the services to be rendered and an anticipated cost. The Company's policy follows the requirements of the Financial Reporting Council's Ethical Standard for Auditors published in September 2015 and which implemented the European Union's revised Statutory Audit Directive (the revised Ethical Standard became effective for periods commencing on or after 17 June 2016). The policy specifies a number of prohibited services which it is not permitted for the auditor to provide under the revised Ethical Standard.
Previously the auditor provided reporting accountant services on the prospectus published on 17 November 2017. These non-audit fees amounted to £14,400, and were payable by the Manager. No non-audit services were provided by the auditor In the year to 31 March 2019.
The audit committee reviewed the level of non-audit services and were satisfied that the auditors maintained their independence.
The audit committee met on 22 July 2019 to review the report and accounts for the year to 31 March 2019. The audit committee considered the following significant issues, including principal risks and uncertainties in light of the Company's activities and issues communicated by the auditors during their review, all of which were satisfactorily addressed:
| IKElling relingibilities | How the assue was addressed |
|---|---|
| Ratention of investment trust status |
The audit committee receives assurance from the Company's administrators and manager that the Company has remained compliant with the requirements to maintain its investment trust status. The directors regularly review the investments and their mix to ensure they remain diversified, its retained income levels to ensure sufficient distributions are made and the Company's shareholdings to determine if the Company has become a closed company. The Company has obtained this approval from HM Revenue & Customs. |
| Risk of misappropriation of assets and ownership of Investments |
The audit committee reviews reports from its service providers on key controls over the assets of the Company. Any significant issues are reported to the board by the manager and/ or the Company's depositary. The manager has put in place procedures to ensure that investments can only be made to the extent that the appropriate contractual and legal arrangements are in place to protect the Company's assets. The Company's depositary issues a quarterly report on the status of the assets to the directors for review. |
| The risk that income is overstated, Incomplete or Inaccurate through failure to recognise proper income entitlements or to apply the appropriate accounting treatment for recognition of Income. |
The board regularly reviews Income forecasts. The external audit includes checks on the completeness and accuracy of income and also checks that this has been recognised in accordance with stated accounting policies. |
| The risk that valuation of the Investments held may be not be correct. |
The audit committee receives assurance from the Company's administrators and manager that the Company's valuation policy is followed at all times. |
The Company's external auditor, PKF Littlejohn LLP ("PKF"), was appointed pursuant to the engagement letter dated 4th June 2019. The audit committee Intends to re-tender within the timeframe set by the Finandal Reporting Council
The individual at PKF who acts as the Company's appointed audit partner is Ian Cowan, whose appointment is reviewed annually. In accordance with UK legislation, the audit partner must rotate at least every five years. As this is lan Cowan's second year as audit partner, he will be due to rotate out of this role during 2023 at the latest.
The audit fees for the period under review can be found in note 6 to the financial statements on page 54.
The audit committee monitors the auditor's objectivity and independence on an ongoing basis. In determining PKF's Independence, the audit committee has assessed all relationships with PKF and received confirmation from PKF that it is independent and that no issues of conflicts arose during the period. The audit committee is therefore satisfied that PKF is independent.
The audit committee monitors and reviews the effectiveness of the external audit process on an annual basis and makes recommendations to the board on its re-appointment, remuneration and terms of engagement of the auditor. The audit committee has met with the audit partner and assessed PKF's performance to date and to discuss the Company's audit and other matters concerning the Company. I can confirm that Ian Cowan did not raise any Issues of concern during our meeting. The review has involved an examination of the auditor's remuneration, the quality of its work including the quality of the audit report, the quality of the audit partner and audit team, the expertise of the audit firm and the resources available to it, the identification of audit risk, the planning and execution of the audit and the terms of engagement.
The audit committee has direct access to the Company's auditor and provides a forum through which the auditor reports to the board. Representatives of PKF attend the audit committee meetings at least twice annually.
The audit committee believes that the Company does not require an internal audit function, principally because the Company delegates its day-to-day operations to third parties, which are monitored by the audit committee, and which provide control reports on their operations at least annually.
This report was approved by the audit committee on 22 July 2019
Perry Wilson Chairman of the Audit Committee
The directors are responsible for preparing the Annual Report, the directors' Remuneration Report and the financial statements in accordance with applicable law and regulations.
Applicable law requires the directors to prepare financial statements for each financial year. As such the directors have prepared the financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. The directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that year. In preparing these financial statements, the directors are required to:
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements and the directors' Remuneration Report comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
The directors consider that the Annual Report and financial statements, taken as a whole, is fair, balanced and understandable and provides the Information necessary for shareholders to assess a company's performance, business model and strategy.
Each of the directors, whose names and functions are listed in the directors' Report, confirms that, to the best of their knowledge:
I am pleased to present the directors' remuneration report for the year ended 31 March 2019, prepared in accordance with The Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013 and the Companies Act 2006. The Company's auditor Is required to verliy certain information within this report subject to statutory audit by the Companies Act 2006. Where information set out below has been audited it is indicated as such.
We are required to seek shareholder approval of the directors' remuneration policy at least every third year and the remuneration report annually. Any changes to the directors' remuneration policy will require shareholder approval. It is proposed that an ordinary resolution to approve the directors' remuneration policy will be proposed as set out below at the Company's forthcoming AGM. An ordinary resolution to approve the directors' remuneration policy will be put to shareholders at least once every three years. At the AGM, shareholders will also be asked to consider an advisory resolution on the contents of the directors' remuneration report.
As at 31 March 2019, the board comprised three non-executive directors, two of whom are independent of the manager.
Given the size of the board, and as the Company has no employees, it is not considered appropriate for the Company to establish separate remuneration and nomination committees. It is, therefore, the Company's practice for the board to consider and approve directors' remuneration. Prior to the Company's incorporation, directors' fees were set at the rate of £24,000 per director per annum for Perry Wilson, Sean Nicolson and Chris Boody. Gareth Burchell has agreed to waive his director's fee.
As the board's fees were considered prior to its listing as an investment company, the appointment of external remuneration consultants was not considered necessary. Furthermore, the board took the decision not to revise the board's fees because they did not feel it was appropriate, given the Company's short existence. Many parts of the Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013 do not apply to the Company as the board is comprised entirely of non-executive directors and the Company has no employees.
The fees for the board as a whole are limited to £48,000 (plus relevant employer's National Insurance contributions) per annum divided between the relevant directors as detailed above. Subject to this limit, the board's policy is that remuneration of non-executive directors should reflect the experience of the board member and the time commitment required by board members to carry out their duties, and is determined with reference to the appointment of directors of similar investment companies. The level of remuneration has been set with the aim of promoting the future success of the Company. With this in mind the board considers remuneration in order to attract individuals of a calibre appropriate to promote the long-term success of the Company and to reflect the specific circumstances of the Company and its field of Investment, the duties and responsibilities of the directors and the value and amount of time commitment required of directors to the Company's affairs.
Due regard is taken of the board's requirement to attract and retain individuals with suitable knowledge and experience and the role that individual directors fulfil. There are no specific performance-related conditions attached to the remuneration of the board and the board members are not eligible for bonuses, pension benefits, share options, longterm incentive schemes or other non-cash benefits or taxable expenses. No other payments are made to directors other than reasonable out-of-pocket expenses which have been incurred as a result of attending to the affairs of the Company.
In addition to the board's remuneration, board members are entitled to such fees as they may determine in respect of any extra or special services performed by them, having been called upon to do so. Such fees would only be incurred in exceptional circumstances. An example of such a circumstance would be if the Company was to undertake a corporate action, which would require the board to dedicate additional time to review associated documents and to attend additional meetings. Such fees would be determined at the board's absolute discretion and would be set at a similar rate to other comparable investment companies who have undertaken equivalent activities. The fees would be set with the Company's long-term success in mind and the Interests of the Company's members as a whole would be considered prior to the setting of such fees.
The directors are entitled to be paid all expenses properly incurred by them in attending meetings with shareholders or other directors or otherwise in connection with the discharge of their duties as directors.
Shareholders have the opportunity to express their views in respect of directors' remuneration at the Company's AGM. The Company has not sought shareholder views on its remuneration policy. Any comment volunteered by shareholders on the remuneration policy will be carefully considered and appropriate action taken. No communications have been received from shareholders on the Company's remuneration policy.
The Company's remuneration policy and its implementation are reviewed by the board as a whole on an annual basis. directors do not vote on their own fees. Reviews are based on third parties' information on the fees of other similar investment trusts
None of the directors has a service contract with the Company, nor are any such contracts proposed. Instead, directors are appointed pursuant to a letter of appointment entered into with the Company. There is no notice period specified in the letters of appointment or articles of association for the removal of directors. Directors are not appointed for a specific term. Copies of the directors' letters of appointment are available at each of the Company's AGMs.
The directors are not entitled to exit payments and are not provided with any compensation for loss of office,
As with most investment trusts there is no chief executive officer and no emplovees. The Company's remuneration policy will apply to new board members, who will be paid the equivalent amount of fees as current board members holding similar roles.
This policy has been followed since the Company's incorporation on 21 June 2017.
An ordinary resolution for the approval of the directors' remuneration policy will be put to a binding shareholder vote at the forthcoming AGM. A binding vote means that if it is not successful, the board will be obliged to revise the policy and seek further shareholder approval at a general meeting specially convened for that purpose.
The directors' remuneration report, including the implementation of the directors' remuneration policy, is subject to an annual advisory vote via an ordinary resolution. An advisory vote is a non-binding resolution. In the event that shareholders vote against this resolution, the board will be required to put its remuneration policy to shareholders for approval at the next AGM, regardless of whether the remuneration policy was approved by shareholders.
Chris Roody (1)
Single total aggregate directors' remuneration for the year under review was £67,324 (2018; £21,509). The directors who served during the year under review received the following emoluments:
| Director | Fees paid during the year under review (1 April 2018 to 31 March 2019) |
Titalille benefits |
Nort-taxeble. Junetils |
Total year to 31 March 2019 |
|---|---|---|---|---|
| Sean Nicolson (1) | £32,062 | £- | $E+$ | £32,062 |
| Gareth Burchell (1) | £- | £- | £- | £- |
| Chris Boody (1) | £26,150 | £- | £- | £ 26,150 |
| Perry Wilson (Chair) | £9,112 | £- | £- | £9,112 |
| Total | £67,324 | £- | £- | £67,324 |
| E rrector | Fees paid during the pened under review 121 June 2017 to:31 March 20181 |
Taxable Dematts |
Non-taxable bunefits |
Total percento 31 March 2018 |
| Sean Nicolson (Chair) (1) | £10,730 | £- | £- | £10,730 |
| Gareth Burchell (1) | £- | £- | £- | £- |
| ---------- a filter or confer or com- |
------- | -- | -- | ------- |
|---|---|---|---|---|
| Alex Haynes (2) | ||||
| Nick Horton (2) | ||||
| Total | £21,509 | £21,509 |
$\varepsilon$ .
$\mathbf{c}$ .
£10.779
£10.779
(1) Sean Nicolson, Gareth Burchell and Chris Boody were appointed to the board on 8 September 2017. (2) Parry Wilson was appointed on 20 December 2018 and Sean Nicolson resigned on 20 December 2018. No payments were made to past directors for loss of office. In the absence of further major increases in the workload and responsibility involved, the board does not expect fees to increase significantly over the next three years. The overall remuneration of each director will continue to be monitored by the board, taking into account those matters referred to in the annual statement above. The Company did not pay any other benefits including bonuses, pension benefits, share options, long-term incentive schemes or other non-cash benefits or taxable benefits.
The Company has not made any loans to the directors, nor has it ever provided any guarantees for the benefit of any director or the directors collectively nor does it intend to.
The board is responsible for the Company's investment strategy and performance, although day-to-day management of the Company's affairs, including the management of the Company's portfolio, has been delegated to third-party service providers. An explanation of the performance of the Company is given in the Chairman's statement and the Investment Manager's report on pages 4 and 8.
The following table is provided in accordance with The Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013 which sets out the relative importance of spend on pay in respect of the year ended 31 March 2019. The table shows the remuneration paid to directors for the period under review, compared to the distribution payments to shareholders.
| 1: April 2018 to 31 March 2019 | |
|---|---|
| Total remuneration paid to Directors | £67,324 |
| Shareholder distribution - dividends or share buybacks | £- |
| " Period since incorporation (21 June 2017) to 31 March 2018 |
|
|---|---|
| Total remuneration paid to Directors | £21,509 |
| Shareholder distribution - dividends or share buybacks | -64 |
The Company does not have any requirement for any director to own shares in the Company.
As at 31 March 2019, the directors do not hold shares in the Company.
There have been no changes to any holdings between 31 March 2019 and the date of this report.
The Annual Report on remuneration was approved by the board on 24 July 2019 and signed on its behalf by:
Perry Wilson
Chairman
We have audited the financial statements of Sure Ventures PLC (the 'Company') for the vear ended 31 March 2019 which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes In Equity, the Statement of Cash Flows and notes to the financial statements, including 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 (IFRSs) as adopted by the European Union.
In our opinion, the financial statements:
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard as applied to listed public interest 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.
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. For planning, we consider materiality to be the magnitude by which misstatements, including omissions, either individually or in aggregate, could reasonably be expected to influence the economic decisions of users that are taken on the basis of the financial statements. Importantly, misstatements below this level will not necessarily be evaluated as immaterial as we also take account of the nature of Identified misstatements, and the particular circumstance of their occurrence, when evaluating their effect on the financial statements. The application of these key considerations gives rise to two levels of materiality, the quantum and purpose of which are tabulated below.
| Materiality measure | Purpose | Amount | Key considerations and benchmarks |
|---|---|---|---|
| Overall financial statement materiality- Based on 1.5% of net assets |
Assessing whether the financial statements, as a whole present a true and fair view. |
£56,900 | The value of the Invested assets $\bullet$ The level of judgment inherent in the ۰ valuation The range of reasonable alternative ٠ valuations |
Note that we have applied 70% of materiality or £39,800 in our audit procedures. There were also no revisions in materiality in the course of the audit.
We have agreed with the audit committee that we would report to the committee as individual audit differences in excess of £2,800 as well as differences below these thresholds that, in our view, warranted reporting on qualitative grounds.
Our audit approach was developed by obtaining an understanding of the Company's activities, the key functions undertaken on behalf of the Board by specialist outsourced service providers and the overall control environment. Based on this understanding we assessed those aspects of the Company's transactions and balances which were most likely to give rise to a material misstatement and were most susceptible to irregularities including fraud or error. Specifically, we identified what we considered to be key audit matters and planned our audit approach accordingly.
Key audit matters are those matters that, In our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
| Key Audit Matter | How the scope of our audit responded to the key. audit matter |
|---|---|
| The valuation of investments held at fair value through profit or loss. |
We considered the design and implementation of controls in place over the valuation of investments and also reviewed the assumptions and underlying evidence supporting the year end valuations to ensure that they are in line with IFRS. |
| The Investments valued at fair value through profit or loss in the Company's Non-Current assets at the period end, are driven by the audited Net Asset Value ("NAV") of the Investee Fund's portfolio. |
We reviewed the valuation reports prepared by Management for all investments considering whether, In our professional judgement, the methodology is the most appropriate in the circumstances and, we: |
| The Investee Fund has holdings in private equity companies being Level 3 Investments that are valued according to a specific investment methodology. |
re-performed the calculation of the investment ٠ valuation: agreed the NAV to audited set of financial ٠ statements of the investee Fund: where appropriate, performed sensitivity ٠ analyses on the valuation calculations where there is sufficient evidence to suggest reasonable alternative inputs might exist; challenged Management regarding significant $\bullet$ Judgements made; considered the economic environment in $\bullet$ which the investment operates to Identify factors that could impact the Investment valuation: |
Tested of unrealised gains/losses recognised In the income statement, is derived from the period end value of the investments in the portfolio when compared to the Initial book cost value of those Investments: and
Reviewed the adequacy of the disclosures made in the financial statements.
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 our 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 condude that there is a material misstatement of this other information, we are required to report that fact.
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:
In our opinion, the part of the directors' remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit. we have not identified material misstatements in:
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
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.
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: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
We were appointed by the members on 16 April 2018 to audit the financial statements for the period ending 31 March 2018 and subsequent financial periods. Our total uninterrupted period of engagement is two years covering the periods ending 31 March 2018 to 31 March 2019.
The non-audit services prohibited by the FRC's Ethical Standard were not provided to the company and we remain Independent of the Company in conducting our audit.
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our sector experience and through discussion with the directors. We have identified the requirements of the Disclosure Guidance and Transparency Rules, the UK Corporate Governance Code and the Companies Act 2008 to be significant in the context of this entity. We considered the extent of compliance with those laws and requiations as part of our procedures on the related financial statements items.
We communicated laws and regulations throughout our audit team and remained alert to any indications of noncompliance throughout the audit.
As with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls.
Our audit opinion is consistent with the additional report to the audit committee.
Use of our report
This report is made solely to the Company's members, as a body, In accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone, other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.
lan Cowan (Senior Statutory Auditor) For and on behalf of PKF Littlejohn LLP Statutory Auditor
1 Westferry Circus Canary Wharf London E14 4HD
24 July 2019
Statement of Comprehensive Income
For the year ended 31 March 2019
| 2010 | 2978 | ||||||
|---|---|---|---|---|---|---|---|
| Notes | $\overline{\mathbf{u}}$ Revenue |
Capital | Total | يو Revenue |
Capital £ |
Total | |
| Income | |||||||
| Other net changes in fair value on financial assets at fair value through profit or loss |
4 | (188, 802) | (188, 802) | 44,980 | 44,980 | ||
| Interest income | 3,174 | I, | 3,174 | r | J. | I. | |
| Rebate management fee | 50,960 | 50,960 | ٠ | ı | |||
| Total net income | 54,134 | (188, 802) | (134, 668) | 44,980 | 44,980 | ||
| Expenses | |||||||
| Management fee | in) | (11, 197) | (34,996) | (46, 193) | (1, 155) | (3,611) | (4,766) |
| Custodian, secretarial and administration fees | (84, 603) | (84, 603) | (18, 850) | (19, 850) | |||
| Other expenses | ø | (208, 467) | (208, 467) | (230, 282) | (230, 282) | ||
| Total operating expenses | (304, 267) | (34,996) | (339,263) | (251,287) | (3,611) | (254, 898) | |
| Loss / profit before Taxation and after finance costs | (250, 133) | (223, 798) | (473, 931) | (251, 287) | 41,369 | (209, 918) | |
| Taxation | ħ | ||||||
| Loss / profit after taxation | (250, 133) | (223, 798) | (473, 931) | (251, 287) | 41,369 | (209, 918) | |
| Earnings per share | œ | $(5.48)$ p | $(4.90)$ p | $(10.38)$ p | $(7.59)$ p | 1.25p | $(6.34)$ p |
The total column of this statement represents the Statement of comprehensive income prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted
by the European Union. The supplementary reven items in the above statement derive from continuing operations.
The Company does not have any income or expense that is not included in net loss for the year. Accordingly, the net loss for the year is also the Total Comprehensive Income for the year, as defined in IAS1 (revised).
The notes on pages 47 to 63 form an integral part of the financial statements.
| Notes: | 31 March 2019 | 31 March 2018 | |
|---|---|---|---|
| Non-current assets | |||
| Investments held at fair value through profit or loss | 9 | 1,700,900 | 739,258 |
| 1,700,900 | 739,258 | ||
| Current assets | |||
| Receivables | 10 | $\alpha$ ) | 689,713 |
| Cash and cash equivalents | 2,139,842 | 1,663,505 | |
| 2,139,842 | 2,353,218 | ||
| Total assets | 3,840,742 | 3,092,476 | |
| Current liabilities | |||
| Other payables | 11 | (50, 654) | (43, 316) |
| (50, 654) | (43, 316) | ||
| Total assets less current liabilities | 3,790,088 | 3,049,160 | |
| Total net assets | 3,790,088 | 3,049,160 | |
| Shareholders' funds | |||
| Ordinary share capital | 12 | 45,647 | 33,100 |
| Share premium | 12 | 4,428,290 | 3,225,978 |
| Revenue reserves | (501, 420) | (251, 287) | |
| Capital reserves | (182, 429) | 41,369 | |
| Total shareholders' funds | 3,790,088 | 3,049,160 | |
| Net asset value per share | 13 | 83.03p | 92.12p |
The notes on pages 47 to 63 form an integral part of the financial statements.
The financial statements on pages 47 to 63 were approved by the board of directors and authorised for issue on 24 July 2019. They were signed on its behalf by:
Perry Wilson Chairman
| Crdin Ev Share Capital |
Share Premium е |
Revenue Reserves |
Gaulial Reserves |
Total Reserves £ |
Total Equity |
|
|---|---|---|---|---|---|---|
| Balance at 1 April 2018 | 33,100 | 3,225,978 | (251, 287) | 41,369 | (209, 918) | 3,049,160 |
| Ordinary shares issued | 12,547 | 1,265,933 | $\blacksquare$ | m. | 1,278,480 | |
| Ordinary shares issue costs |
F. | (63, 621) | $\blacksquare$ | ÷ | $\sigma$ | (63, 621) |
| Loss after taxation | m, | (250, 133) | (223, 798) | (473, 931) | (473, 931) | |
| Dividends paid in the year |
۰ | œ. | $\scriptscriptstyle\odot$ | × | ||
| Balance at 31 March 2019 |
45,647 | 4,428,290 | (501, 420) | (182, 429) | (683, 849) | 3,790,088 |
| Ord nary Sharp: Capital |
Share Premium |
Revenue Reserves G |
Capital Reserves H |
Tetal Resenves G |
Total Equity |
|
|---|---|---|---|---|---|---|
| Balance at 21 June 2017 | $+1$ | ٠ | ٠ | ÷ | ||
| Ordinary shares Issued | 33,100 | 3,276,900 | $\bullet$ | m. | $\blacksquare$ | 3,310,000 |
| Ordinary shares issue costs |
$\rightarrow$ | (50, 922) | ٠ | $\sim$ | Ξ | (50, 922) |
| (Loss) / Profit after taxation |
÷ | m. | (251, 287) | 41,369 | (209, 918) | (209, 918) |
| Dividends paid in the period |
$\sim$ | 1T | C. | |||
| Balance at 31 March 2018 |
33,100 | 3,225,978 | (251, 287) | 41,369 | (209, 918) | 3,049,160 |
As at 31 March 2019 the Company had distributable reserves of £nil (2018: £nil) for the payment of future dividends. The distributable reserves are the revenue reserves £nil (2018: £nil), realised capital reserves (£nil) (2018: (£nil)) and the special distributable reserves (£nil) (2018: (£nil)).
The notes on pages 47 to 63 form an integral part of the financial statements.
For the year ended 31 March 2019
| Notes | For the period | ||
|---|---|---|---|
| For the year ended |
from 21 June $2017$ (date of |
||
| 31 March 2019 | incorporation) to 31 March 2018 |
||
| Cash flows from operating activities: | |||
| (Loss) after taxation | (473, 931) | (209, 918) | |
| Adjustments for: | |||
| Decrease in receivables | 689,713 | ||
| Increase in payables | 11 | 7,338 | 43,316 |
| Unrealised (loss) on foreign exchange | 9 | 26.593 | 6,875 |
| Net changes in fair value on financial assets at fair value through profit or loss |
9 | 162,209 | (51, 855) |
| Net cash Inflow/(outflow) from operating activities | 411,922 | (211, 582) | |
| Cash flows from Investing activities: | |||
| Purchase of investments | 9 | (2,650,429) | (694, 278) |
| Sales of investments | 9 | 1,499,985 | |
| Net cash (outflow) from investing activities | (1, 150, 444) | (694, 278) | |
| Cash flows from financing activities*: | |||
| Proceeds from issue of ordinary shares | 1.278.480 | 2,620,287 | |
| Share issue costs | (63, 621) | (50, 922) | |
| Net cash inflow from financing activities | 1.214.859 | 2,569,365 | |
| Net change in cash and cash equivalents | 476,337 | 1.663,505 | |
| Cash and cash equivalents at the beginning of the year/period | 1.663,505 | ||
| Net cash and cash equivalents | 2.139.842 | 1.663.505 |
*The Company has no borrowings or liabilities from finandng activities.
The notes on pages 47 to 63 form an integral part of the financial statements.
The financial statements of Sure Ventures pic (the "Company") have been prepared in accordance with International Financial Reporting Standards (IFRS) and IFRIC interpretations (IFRS IC) as adopted by the European Union and the Companies Act 2006 applicable to companies reporting under IFRS.
The principal accounting policies adopted by the Company are set out below. Where presentational guidance set out in the Statement of Recommended Practice ('SORP') for investment trusts issued by the Assoclation of Investment Companies ('AIC') in January 2017 is consistent with the requirements of IFRS, the directors have sought to prepare the financial statements on a basis compliant with the recommendations of the SORP.
All values are rounded to the nearest pound unless otherwise indicated.
The presentation currency of the Company is pounds sterling, the financial statements are prepared in this currency in accordance with the Company's prospectus. The Company is required to nominate a functional currency, being the currency in which the Company predominantly operates. The board has determined that sterling is the Company's functional currency.
Foreign exchange gains and losses relating to the financial assets and liabilities carried at fair value through profit or loss are presented in the statement of comprehensive income within 'other net changes in fair value on financial assets and financial liabilities at fair value through profit or loss'.
In order to better to reflect the activities of an investment trust company and in accordance with guidance issued by the AIC, supplementary information which analyses the Statement of comprehensive income between items of a revenue and capital nature has been presented alongside the Statement of comprehensive income.
Dividend income from investments is recognised when the Company's right to receive payment has been established, normally the ex-dividend date.
Interest Income In profit or loss in the Statement of Comprehensive Income includes bank interest. Interest income Is recognised on an accruals basis.
Capital income, all changes in falr value are recognised In profit or loss In the Statement of Comprehensive Income as net gain on Investment at fair value through profit or loss.
All expenses are accounted for on the accruals basis. In respect of the analysis between revenue and capital items presented within the Statement of Comprehensive Income, all expenses have been presented as revenue items except as follows:
· Transaction costs which are incurred on the purchases or sales of investments designated as fair value through profit or loss are expensed to capital in the Statement of Comprehensive Income.
. Expenses are split and presented partly as capital Items where a connection with the maintenance or enhancement of the value of the investments held can be demonstrated and, accordingly, the management fee for the financial year has been allocated 24.24% (2018: 24.24%) to revenue and 75.76% (2018: 75.76%) to capital (investment held at fair value through profit or loss to the net asset value of the Company), In order to reflect the directors' long term view of the nature of the expected investment returns of the Company.
Increases and decreases in the valuation of investments and reallsed/unrealised foreign exchange gain/(loss) held at the year end are accounted for in the capital reserves.
In line with the recommendations of the SORP, the allocation method used to calculate tax relief on expenses presented against capital returns in the supplementary Information in the Statement of comprehensive Income is the 'marginal basis'. Under this basis, if taxable income is capable of being entirely offset by expenses in the revenue column of the statement of comprehensive income, then no tax relief is transferred to the capital return column.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the Statement of Financial Position liability method. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset Is realised. Deferred tax is charged or credited in the revenue return column of the Statement of comprehensive income. except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.
Investment trusts which have approval under Part 24, Chapter 4 of the Corporation Tax Act 2010 are not liable for taxation on capital gains.
In accordance with IFRS, the Company has designated its investments as financial assets at fair value through profit or loss.
The Company has designated all of its investments upon initial recognition as "financial assets at fair value through profit or loss". Their performance is evaluated on a fair value basis, in accordance with the risk management and investment strategies of the Fund, as set out in the Company's supplement to the Prospectus.
Financial assets that are classified as "financial assets at amortised cost" Include cash and cash equivalents and receivables
Financial liabilities that are not at fair value through profit or loss include other payables.
Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or where the group has transferred substantially all risks and rewards of ownership. If substantially all the risks and rewards have been neither retained nor transferred and the group has retained control, the assets continue to be recognised to the extent of the group's continuing involvement. Financial liabilities are derecognised when they are extinguished.
All investments held by the Company have been designated at fair value through profit or loss ('FVPL') but are also described in these financial statements as investments held at fair value, and are valued in accordance with the International Private Equity and Venture Capital Valuation Guidelines ('IPEVCV') issued in December 2018 as endorsed by the British Private Equity and Venture Capital Association.
Purchases and sales of unlisted investments are recognised when the contract for acquisition or sale becomes unconditional.
Recelvables do not carry any interest and are short term in nature. They are initially stated at their nominal value and reduced by appropriate allowances for estimated irrecoverable amounts (if any).
Cash and cash equivalents (which are presented as a single class of asset on the Statement of Financial Position) comprise cash at bank and in hand and deposits with an original maturity of three months or less. The carrying value of these assets approximates their fair value.
Payables are non-interest bearing.
Interim dividends are recognised in the year in which they are paid. Final dividends are recognised when they have been approved by shareholders.
The following standards, amendments and interpretations, which became effective in January 2018, are relevant to the Company.
International Financial Reporting Standards 9 ("IFRS 9") effective for annual periods beginning on or after 1 January 2018, specifies how an entity should classify and measure financial assets and liabilities, including some hybrid contracts.
IFRS 9 was issued by the International Accounting Standards Board ("IASB") in July 2014 and replaced International Accounting Standards 39 Financial Instruments - Recognition and Measurement ("IAS 39").
IFRS 9 improves and simplifies the approach for classification and measurement of financial assets compared with the requirements of IAS 39. Most of the requirements in IAS 39 for classification and measurement of financial llabilities were carried forward unchanged. IFRS 9 applies a consistent approach to classifying financial assets and replaces the numerous categories of financial assets in IAS 39, each of which had Its own classification criteria.
The Company has applied IFRS 9, Financial instruments ("IFRS 9") retrospectively but the application of IFRS 9 has not resulted in a restatement of comparative information. The Company has taken an exemption not to restate comparative information. IFRS 9 has resulted in changes to the dassification of financial assets as disclosed in Note 9 (b); there has been no impact on the carrying values of financial instruments and the Company's accounting policies related to liabilities and derivatives financial instruments that are not used as hedging instruments.
IFRS 9 largely retains the existing requirements in IAS 39 for the classification and measurement of financial liabilities. However, it eliminates the previous IAS 39 categories for financial assets of held to maturity, loans and recelvables and available for sale.
Under IFRS 9, on Initial recognition, a financial asset is classified as measured at: Fair value through profit or loss (FVTPL), Fair Value through other comprehensive income (FVOCI) and amortised cost.
The classification of financial assets under IFRS 9 is generally based on the business model in which a financial asset is managed and its contractual cash flow characteristics.
The Company has classified its financial assets at FVTPL and amortised cost.
A financial asset and liabilities at FVTPL is initially measured at fair value. These assets and liabilities are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in profit or loss. On initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.
A financial asset (unless it is a trade receivable without a significant financing component that is initially measured at the transaction price) is initially measured at falr value plus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition.
The finandal assets and liabilities are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in profit or loss.
On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment's fair value in OCI. This election is made on an investment-by-investment basis.
A finandal asset is measured at amortised cost if it meets both of the following conditions and is not designated as at $FVTPI$
These assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.
The following table and the accompanying notes below explain the original measurement categories under IAS 39 and the new measurement categories under IFRS 9 for each class of the Company's financial assets as at 1 January 2018.
| Note | Original Classification under IAS 39 |
New Classification under IFRS 9 |
Original carrying amount under IAS 39 |
Carrying amount under IFRS 9 |
|
|---|---|---|---|---|---|
| Financial assets | £ | ||||
| Unquoted equity assets | $\langle$ ł) | Designated as at FVTPL |
Mandatorily at FVTPL |
739,258 | 739 258 |
| Cash and cash equivalents | (II) | Loans and receivables |
Amortised cost* | 1.663.505 | 1 663 505 |
| Receivables | (ii) | Loans and receivables |
Amortised cost* | 689 713 | 689 713 |
| Total financial assets | 3.092.476 | 3,092,476 |
* No impairment was recognised on the amortised cost classification on the original carrying amount value under IFRS 9 on transition.
The classification of financial liabilities has not changed under the transition from IAS 39 to IFRS 9.
IFRS 9 replaces the 'incurred loss' model in IAS 39 with an 'expected credit loss' (ECL) model. The new impairment model applies to financial assets the Company has measured at amortised cost. Under IFRS 9, credit losses are recognised earlier than under IAS 39.
The financial assets at amortised cost consist of cash and cash equivalents.
Under IFRS 9, loss allowances are measured on either of the following bases:
The Company measures loss allowances at an amount equal to lifetime ECLs, except for the following, which are measured as 12-month ECLs:
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative Information and analysis, based on the Company's historical experience and informed credit assessment and including forward-looking Information.
The maximum period considered when estimating ECLs is the maximum contractual period over which the Company is exposed to credit risk.
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Company expects to receive).
ECLs are discounted at the effective interest rate of the financial asset.
At each reporting date, the Company assesses whether financial assets carried at amortised cost are credit-impaired. A financial asset is 'credit-impaired' when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.
Impairment losses on other financial assets are presented under 'finance costs', similar to the presentation under IAS 39, and not presented separately in the statement of profit or loss and OCI due to materiality considerations.
Changes in accounting policies resulting from the adoption of IFRS 9 have been applied retrospectively, except as described below.
IFRS 15, 'Revenue from contracts with customers' deals with revenue recognition and establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity's contracts with customers, it is effective from 1 January 2018. Revenue is recognised when a customer obtains control of a good or service and thus has the ability to direct the use and obtain the benefits from the good or service. The standard replaces IAS 18, 'Revenue' and IAS 11, 'Construction contracts' and related interpretations Management have considered the impact of IFRS 15 on the provision of services and management income that fall under the scope of IFRS 15 and has had no impact on the Company in the financial period as there is no revenue to be recognised but may do so in the future.
There are no other standards, amendments to standards or interpretations that are effective for annual periods beginning on 1 January 2018 that have a material effect on the financial statements of the Company.
The International Accounting Standards Board has issued the following standards, which may be relevant to the Company's reporting but which have not yet been applied and have an effective date after the date of these financial statements:
Standards, amendments and interpretations to existing standards that become effective in future accounting periods and have not been adopted by the Company are as follows:
| IFRS | Effective for annual periods beginning on or after |
|---|---|
| IFRS 16 - Leases | 1 January 2019 |
The directors do not anticipate that the adoption of this standard and interpretations will have a material impact on the financial statements in the period of initial application.
Other future developments include the International Accounting Standards Board ('IASB') undertaking a comprehensive review of existing IFRSs. The Company will consider the financial impact of these new standards as they are finalised.
Ordinary shares are classed as equity. The ordinary shares in issue have a nominal value of one penny and carry one vote each.
This reserve represents the difference between the issue price of shares and the nominal value of shares at the date of issue, net of related issue costs.
Unrealised gains and losses on investments held at the year end arising from movements in fair value are taken to the capital reserve.
Net revenue profits and losses of the Company.
The preparation of financial statements in conformity with IFRS as adopted in the EU requires the Company to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting year. Although these estimates are based on the directors' best knowledge of the amount, actual results may differ ultimately from those estimates.
The areas requiring a higher degree of judgement or complexity and areas where assumptions and estimates are significant to the financial statements are in relation to investments at fair value through profit or loss described below.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.
The unquoted equity assets are valued on periodic basis using techniques including a market approach, costs approach and/or income approach. The valuation process is collaborative, involving the finance and investment functions within the manager with the final valuations being reviewed by the manager's valuation committee.
Shareholders should note that increases or decreases in any of the inputs in isolation may result in higher or lower fair value measurements. Changes in fair value of all investments held at fair value are recognised in the Statement of comprehensive income as a capital item. On disposal, realised gains and losses are also recognised in the Statement of comprehensive income. IFRS 9 was adopted but did not have a material impact on the Company.
The Company's board and the Investment Manager consider Investment activity in selected Equity Assets as the single operating segment of the Company, being the sole purpose for its existence. No other activities are performed.
The directors are of the opinion that the Company is engaged in a single segment of business and operations of the Company are wholly in the United Kingdom.
| Codult 31 March 2019 |
For the period from 21 dunn $017$ (distant) incorporation) to 31 March 2018 |
|
|---|---|---|
| Investment Income | ||
| Investments at fair value through profit or loss | (151, 451) | 51,855 |
| Total Investment Income | (151, 451) | 51,855 |
| Unrealised loss on translation of investments | (37, 351) | (6, 875) |
| Total(loss)/ Income | (188, 802) | 44,980 |
The management fee is payable quarterly in advance at a rate equal to 1/4 of 1.25% per month of net asset value (the "Management Fee"). The aggregate fee payable on this basis must not exceed 1.25% of the net assets of the Company in any year.
From the period from first admission, the management fee payable was based on 1.25% of the net asset value.
The Manager is entitied to a performance fee, which is calculated in respect of each twelve month period starting on 1 April and ending on 31 March in each calendar year ('Calculation Period'), and the final Calculation Period shall end on the day on which the management agreement is terminated or, if earlier, the business day immediately preceding the day on which the Company goes into liquidation.
The Manager is entitled to receive a performance fee equal to 15% of any excess returns over a high watermark, subject to achieving a hurdle rate of 8% in respect of each performance period. There was no performance fee payable during the period.
| For the year anded 31 March 2019 |
For the period from 21 Juine 2017 (cate of incorporation Vs. 31 March 2016 |
|
|---|---|---|
| Auditor's remuneration - audit fees | 20,000 | 20,000 |
| Directors' fees | 67,324 | 21,509 |
| Organisation expense | 150,801 | |
| VAT Expense | 22,283 | 27,821 |
| Legal and other professional | 48,362 | 8,984 |
| Listing fees | 39,719 | |
| Service Fee Expense | 6,846 | |
| Other expenses | 3,933 | 1,167 |
| Total Other expenses | 208,467 | 230,282 |
All expenses are inclusive of VAT where applicable. Further details on directors' fees can be found in the directors' remuneration report on page 33.
As an investment trust the Company is exempt from corporation tax on capital gains. The Company's revenue income is subject to tax, but offset by any Interest distribution paid, which has the effect of reducing that corporation tax to nil (2018: nil). This means the interest distribution may be taxable in the hands of the Company's shareholders.
Any change in the Company's tax status or in taxation legislation generally could affect the value of Investments held by the Company, affect the Company's ability to provide returns to shareholders, lead the Company to lose its exemption from UK Corporation tax on chargeable gains or alter the post-tax returns to shareholders. It is not possible to guarantee that the Company will remain a non-close company, which is a requirement to maintain status as an investment trust, as the ordinary shares are freely transferable. The Company, In the event that it becomes aware that it is a close company, or otherwise fails to meet the criteria for maintaining investment trust status, will as soon as reasonably practicable, notify shareholders of this fact.
The Company has obtained this approval from HM Revenue & Customs.
The taxation charge for the year is lower than the standard rate of UK corporation tax of 19.00% (2018: 19.00%). A reconclilation of the taxation charge based on the standard rate of UK corporation tax to the actual taxation charge is shown below.
| 31 March 2019 | Revenue: | Captul | Total |
|---|---|---|---|
| Return on ordinary activities before taxation | (250, 133) | (223, 798) | (473, 931) |
| Return on ordinary activities before taxation multiplied by the standard rate of UK corporation tax of 19% |
(47, 525) | (42, 522) | (90,047) |
| Effects of: | |||
| Excess management expenses not utilised | 47.525 | 42.522 | 90,047 |
| Interest distributions paid in respect of the year | |||
| Total tax charge in income statement |
| 31 March 2918 | :Revenue | Cabital | Total |
|---|---|---|---|
| Return on ordinary activities before taxation | (251, 287) | 41,369 | (209, 919) |
| Return on ordinary activities before taxation multiplied by the standard rate of UK corporation tax of 19% | (47, 745) | 7.860 | (39, 885) |
| Effects of: | |||
| Excess management expenses not utilised | 47.745 | (7, 860) | (39, 885) |
| Interest distributions paid in respect of the period | $\overline{\phantom{a}}$ | ||
| Total tax charge in Income statement |
The Company may be subject to taxation under the tax rules of the jurisdictions in which it invests, including by way of withholding of tax from interest and other income receipts. Although the Company will endeavour to minimise any such taxes this may affect the level of returns to shareholders.
| year ended 31 from March 2019 | Revealing DESTIGAT |
GETERINI 18000 |
110124301 |
|---|---|---|---|
| Earnings per ordinary share and address and the property of the local development of the contract of the contract of |
(5.48)p | $(4.90)$ p | (10.38)p |
The calculation of the above is based on revenue returns of (£250,133), capital returns of (£223,798) and total returns of (£473,931) and number of ordinary shares of 4,564,748 as at 31 March 2019.
| $\Box$ $\overline{H}$ a company of the first party of the company of the party of the company of |
|||
|---|---|---|---|
| Earnings per ordinary share | $(7.59)$ p | 1.25 D | (6.34)p |
The calculation of the above is based on revenue returns of (£251,287) capital returns of £41,369 and total returns of (£209,919) and number of ordinary shares of 3,310,000 as at 31 March 2018.
| As of 31 March 2019 |
As of 3.1 Macch | ||
|---|---|---|---|
| HELL | 2018 挂 |
||
| Opening cost | |||
| Opening fair value | 739,258 | 64 | |
| Purchases at cost | 2,740,917 | 694,278 | |
| Sale | (1,590,473) | ||
| Cost at fair value measurement | 51,855 | ||
| Realised gain | 3,400 | ||
| Unrealised (loss) | (165, 609) | ۰ | |
| Unrealised (loss) on foreign exchange | (26, 593) | (6, 875) | |
| Closing fair value at 31 March 2019 and 2018 | 1,700,900 | 739,258 |
| Ì ı |
|---|
| I |
IFRS 13 requires the Company to classify its financial instruments held at fair value using a hierarchy that reflects the significance of the inputs used in the valuation methodologies. These are as follows:
The following sets out the classifications used as at 31 March 2019 in valuing the Company's investments:
| Carrying amount | Fair value | |||||||
|---|---|---|---|---|---|---|---|---|
| assets at Financial |
Other | Total | ||||||
| 31 March 2019 | at FVTPL Mandatorily |
amortised cost |
financial liabilities |
amount carrying |
Level 1 | Level 2 | Level 3 | Total |
| یه | ω | ш | 41 | ω | W | W | ||
| Investments in quoted equity assets | 412,204 | 412,204 | 412,204 | 412,204 | ||||
| Investments in unquoted equity assets | 1,288,696 | O | I | 1,288,696 | 1,288,696 | 1,288,696 | ||
| 1,700,900 | 1,700,900 | 412,204 | 1,288,696 | 1,700,900 | ||||
| Finandal assets not measured at fair value | ||||||||
| Cash and cash equivalents | 2,139,842 | 2,139,842 | 2,139,842 | ï | 2,139,842 | |||
| 2,139,842 | п | 2,139,842 | 2,139,842 | 2,139,842 | ||||
| Financial liabilities not measured at fair value | ||||||||
| Other payables | 50,654 | 50,654 | 50,654 | 50,654 | ||||
| 50,654 | 50,654 | 50,654 | 50,654 | |||||
| Carrying amount | Fair value | |||||||
|---|---|---|---|---|---|---|---|---|
| 31 March 2018* | at fair value designated : ב |
receivables Loans and |
liabilities Define financial |
Total carrying amount |
Level 1 | Level 2 | Level 3 | Total |
| یت | W | |||||||
| Investments in unquoted equity assets | 739,258 | 739,258 | 739,258 | 739,258 | ||||
| 739,258 | 739,258 | 739,258 | 739,258 | |||||
| Financial assets not measured at fair value | ||||||||
| Cash and cash equivalents | 1,663,505 | 1,663,505 | 1,663,505 | 1,663,505 | ||||
| Receivables | I | 689,713 | 689,713 | 689,713 | 689,713 | |||
| 2,353,218 | 2,353,218 | 1,663,505 | 689,713 | 2,353,218 | ||||
| Financial liabilities not measured at fair value | ||||||||
| Management fee payable | 4,766 | 4,766 | 4,766 | 4,766 | ||||
| Other payables | 38,550 | 38,550 | 38,550 | 38,550 | ||||
| 43,316 | 43,316 | 43,316 | 43,316 | |||||
* The Company has initially applied IFRS 9 at 1 January 2018. Under the transition methods chosen, comparative information is not restated.
| 31 March 2019 | ||
|---|---|---|
| Prepayments | ||
| Other receivables | 689,713 | |
| Total receivables | $\blacksquare$ | 689,713 |
The above receivables do not carry any interest and are short term in nature. The directors consider that the carrying values of these receivables approximate their fair value.
| 31 March 2019 | STIMBER 207 | |
|---|---|---|
| Management fee payable | 4,766 | |
| Accruals and deferred income | 50.654 | 38,550 |
| Total other payables | 50.654 | 43,316 |
The above payables do not carry any interest and are short term in nature. The directors consider that the carrying values of these payables approximate their fair value.
The table below details the Issued share capital of the Company as at the date of the Financial Statements.
| isauexi and allotted | No of shares 31 March 2019 |
No. di stigges 31 March 2018 |
||
|---|---|---|---|---|
| Ordinary shares of 1 penny each | 4,564,748 | 45.647 | 3,310,000 | 33,100 |
On incorporation, the issued share capital of the Company was £0.01 represented by one ordinary share of £0.01. Redeemable preference shares of 50,000 were also issued with a nominal value of £1 each, of which 25% was paid. The redeemable shares were issued to enable the Company to obtain a certificate of entitlement to conduct business and to borrow under section 761 of the Companies Act 2006. The redeemable shares were redeemed on listing from the proceeds of the issue of the new ordinary shares upon admission on 19 January 2018.
The following table details the subscription activity for the year ended 31 March 2019.
| 31 March 2019 | ||
|---|---|---|
| Balance as at 1 April 2018 | 3,310,000 | |
| Ordinary shares issued | 1,254,748 | 3,310,000 |
| Balance as at 31 March 2019 | 4,564,748 | 3,310,000 |
During the year ended 31 March 2019, all proceeds from this issue was received (2018: £689,713 remained receivable).
| Year ended 31 March 2019 | Your enged 31 Match 2018 | |||||
|---|---|---|---|---|---|---|
| Year ended 31 March 2019 | Net asset value per ordinary share Pence |
Net assets attributable |
Net asset value per ordinary share Pence |
Net assets attributable |
||
| Ordinary shares of 1 penny each | 83.03p | 3,790,088 | 92.12p | 3,049,160 |
The net asset value per ordinary share is based on net assets at the year ended of £3,790,088 (2018: £3,049,160) and on 4,564,748 (2018: 3,310,000) ordinary shares in issue at the year end.
The Company may invest in Suir Valley Ventures or other collective investment vehicles, subscriptions to which are made on a commitment basis. The Company will be expected to make a commitment that may be drawn down, or called, from time to time at the discretion of the manager of the Fund or other collective investment vehicle. The Company will usually be contractually obliged to make such capital call payments and a failure to do so would usually result in the Company being treated as a defaulting investor by the Fund or other collective investment vehicle.
The Company's has to satisfy capital calls on its commitments and will do through a combination of reserves, and where applicable the realisation, of Cash and Cash Equivalents and Liquid Investments (as each expression is defined in the prospectus dated 17 November 2017), anticipated future cash flows to the Company, the use of borrowings and, potentially, further issues of Shares.
As of 31 March 2019, the Company had outstanding commitments in relation to the Fund in the amount of €2.9 million (2018: €3,8 million).
Directors - The remuneration of the directors is set out in the directors' Remuneration Report on page 34. There were no contracts subsisting during or at the end of the year in which a director of the Company Is or was interested and which are or were significant in relation to the Company's business. There were no other transactions during the year with the directors of the Company. The directors do not hold any ordinary shares of the Company.
At 31 March 2019, there was £1,192 (2018; £203) payable to the directors for fees and expenses.
Manager - Shard Capital AIFM LLP (the 'Manager'), a UK-based company authorised and regulated by the Financial Conduct Authority, has been appointed the Company's manager and authorised investment fund manager for the purposes of the Alternative Investment Fund Managers Directive. Details of the services provided by the manager and the fees paid are given in Note 5.
During the year the Company incurred £46,193 (2018: £4,767) of fees and at 31 March 2018, there was £nil (2018: £4,767) payable to the Manager.
During the year the Company paid £63,621 (2018: £50,922) of placement fees to Shard Capital Partners LLP.
During the year the Manager paid £nil (2018: £12,000) to the advisor In relation to the flotation.
The Company's investment objective is to achieve capital growth for investors pursuant to the investment policy outlined in the prospectus, this involves certain Inherent risks. The main financial risks arising from the Company's financial instruments are market risk, credit risk and liquidity risk. The board reviews and agrees policies for managing each of these risks as summarised below.
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate. Market risk comprises three types of risk, price risk, interest rate risk and currency risk.
The Company's exposure, sensitivity to and management of each of these risks is described below. Management of market risk is fundamental to the Company's investment objective. The investment portfolio is continually monitored to ensure an appropriate balance of risk and reward within the parameters of the investment restrictions outlined in the prospectus.
Price risk arises mainly from uncertainty about future prices of financial instruments used in the Company's business. It represents the potential loss the Company might suffer through holding market positions in the face of price movements (other than those arising from interest rate risk or currency risk) specifically in equity investments purchased in pursult of the Company's investment objective, held at fair value through the profit and loss.
As at 31 March 2019 and 2018 the Company held one direct private equity investment in the participating shares of Suir Valley Ventures, a sub-fund of Suir Valley Funds ICAV.
As at 31 March 2019 and 2018 the Investment in Suir Valley Ventures Is valued at the net asset value of the sub-fund, as calculated by its administrator.
At 31 March 2019, had the fair value of investments strengthened by 10% with all other variables held constant, net assets attributable to holders of participating shares would have increased by £170,090 (2018: £73,925). A 10% weakening of the market value of investments against the above would have resulted in an equal but opposite effect on the above financial statement amounts to the amounts shown above, on the basis that all other variables remain constant. Actual trading results may differ from this sensitivity analysis and the difference may be material.
Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows or the fair values of financial instruments.
The Company's currently employs no borrowings.
The Company finances its operations mainly through its share capital and reserves, including realised gains on Investments.
Exposure of the Company's financial assets and llabilities to floating interest rates (giving cash flow interest rate risk when rates are reset) and fixed interest rates (giving fair value risk) as at 31 March 2019 and 31 March 2018 is shown helow:
| 31 March 2019 | 31 March 2018 | |||||
|---|---|---|---|---|---|---|
| Financial instrument | Floating Rate £ |
Fixed or Administered Rate £ |
Total £ |
Floating Rate £ |
Fixed or Administered Rate £ |
Total £ |
| Cash and cash equivalents |
٠ | 2,139,842 | 2,139,842 | ×, | 1,663,505 | 1,663,505 |
| Total exposure | m | 2.139,842 | 2,139,842 | $\blacksquare$ | 1,663,505 | 1,663,505 |
An administered rate is not like a floating rate, movements in which are directly linked to LIBOR. The administered rate can be changed at the discretion of the lender.
As at 31st March 2019 the Company's largest investment is denominated in euros whereas its functional and presentation currency is pounds sterling. Consequently, the Company is exposed to risks that the exchange rate of its currency relative to euros may change in a manner that has an adverse effect on the fair value of the Company's assets.
At the reporting date the carrying value of the Company's financial assets and liabilities held in individual foreign currencies as a percentage of its net assets were as follows:
| KY exposure an a percenterate of Contract Contract Contract Contract The Second Contract of the Second Contract of the Second Contract of the Second Contract of the Second Contract of the Second Contract of the Second Contract of the Second Contract of the Second Contract of the Second Con -- |
_ | |
|---|---|---|
| Euros _________ |
7.400 _________ |
24% |
If the euro exchange rates increased/decreased by 10% against pounds sterling, with all other variables held constant, the increase/decrease in the net asset attributable to the Company arising from a change financial assets at fair value through profit or loss, which are denominated in euros, would have been +/- £128,870 (2018: £73,925).
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation.
The Company's credit risks arise principally through cash deposited with banks, which is subject to risk of bank default.
The Company ensures that it only makes deposits with Institutions with appropriate financial standing.
Due to the low credit risk of the financial assets at amortised cost, the ECL was determined to be immaterial and no impairment was recognised on the Fund in the period ended 31 March 2019.
Liquidity risk is the risk that the Company will have difficulty in meeting its obligations in respect of financial liabilities as they fall due.
The Company manages its liquid resources to ensure sufficient cash is available to meet its expected contractual commitments. It monitors the level of short-term funding and balances the need for access to short-term funding, with the long-term funding needs of the Company.
The Company's capital is represented by ordinary shares and reserves.
The Company's primary objectives in relation to the management of capital are:
The Company manages its capital structure and liquidity resources to meet it's obligations as described above.
Pursuant to the prospectus dated 17 November 2017 the Company can deploy gearing up to 20% of the net asset value of the Company (calculated at the time of borrowing) to seek to enhance returns and for the purpose of capital flexibility and efficient portfollo management. During the year ended 31st March 2019 and period ended 31st March 2018 the Company employed no gearing.
It is the opinion of the directors that there is no ultimate controlling party.
On 26 April 2019 Sure Ventures PLC announced a direct investment of £500,000 in VividQ Limited, a UK-based deep tech software company ploneering the application of holography in ARVR and consumer electronics display.
On 4 June 2019 Sulr Valley, a sub-Fund of Suir Valley Funds ICAV, of which Sure Ventures PLC has committed EUR 4.5m, changed its name to Sure Valley Ventures.
On 7 June 2019 Sure Ventures PLC issued an additional 305,208 ordinary shares at a price of £0.96 per share, taking the total shares in issue to 4,869,956.
On 14 June 2019 Chris Boody resigned as a Non-Executive Director and St. John Agnew was appointed as a Non-Executive Director.
Sean Nicolson (Resigned on 20 December 2018) Perry Wilson (appointed on 20 December 2018) Chris Boody Gareth Burchell
23rd Floor 20 Fenchurch Street London EC3M 3BY England
Shard Capital AIFM LLP 23rd Floor 20 Fenchurch Street London EC3M 3BY England
Shard Capital Partners LLP 23rd Floor 20 Fenchurch Street London EC3M 3BY England
http://www.sureventuresplc.com
Apex Fund Services (Ireland) Limited 2nd Floor, Block 5 Irish Life Centre Abbey Street Lower Dublin 1 DO1 P767 Ireland
Computershare Investor Services PLC The Pavillons, Bridgewater Road Bristol BS99 6ZZ England
INDOS Financial Limited 27-28 Clements Lane London EC4N 7AE United Kingdom
PKF Littlejohn LLP 1 Westferry Circus Canary Wharf London E14 4HD England
ISIN: GB00BYWYZ460 Sedol: BYWYZ46 Ticker: SURE
The Company's website can be found at http://www.sureventuresplc.com. The site provides visitors with Company information and literature downloads.
The Company's profile is also available on third-party sites such morningstar.co.uk.
Copies of the annual report may be obtained from the Company Secretary or by visiting www.sureventuresplc.com.
The Company's ordinary shares of 1p each are quoted on the London Stock Exchange:
The codes above may be required to access trading information relating to the Company on the Internet.
The Company's Annual Report and Accounts, [half-yearly reports] and other formal communications are available on the Company's website. [To reduce costs the Company's half-yearly accounts are not posted to shareholders but are instead made available on the Company's website.]
As the Company has no employees, the Company does not have a whistleblowing policy. The Audit Committee reviews the whistleblowing procedures of the manager and administrator to ensure that the concerns of their staff may be raised in a confidential manner.
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If you are approached by fraudsters, please tell the FCA using the share fraud reporting form at fca.org.uk /scams, where you can find out more about Investment scams.
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