We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for real-time alerts, custom portfolio, and market movers
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Sherborne Investors (guernsey) B Limited | LSE:SIGB | London | Ordinary Share | GG00B883XC99 | A ORD NPV |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.2525 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From May 2019 to May 2024
TIDMSIGB
RNS Number : 2510V
Sherborne Investors (Guernsey)B Ltd
14 April 2016
14 April 2016
Sherborne Investors (Guernsey) B Limited
Annual Report and Consolidated Financial Statements
For the year ended 31 December 2015
Company Summary
Hot Features
Premium
The Company The Company is a Guernsey domiciled
limited company and its shares are
admitted to trading on the London
Stock Exchange's Specialist Fund
Market ("SFM"). The Company was incorporated
on 8 November 2012. The Company commenced
dealings on SFM on 7 May 2013.
Investment Objective The Company's investment objective,
and Policy through its investment in the Investment
Partnership, is to realise capital
growth from investment in a target
company identified by the Investment
Manager with the aim of generating
a significant capital return for
Shareholders.
The Company's investment policy is
to invest in a company which is publicly
quoted, most likely on a UK stock
exchange, which it considers to be
undervalued as a result of operational
deficiencies and which it believes
can be rectified by the Investment
Manager's active involvement, thereby
increasing the value of the investment.
The Company will only invest in one
target company at a time.
Investment Manager The General Partner and the Investment
Partnership have appointed Sherborne
Investors Management (Guernsey) LLC
to provide investment management
services to the Investment Partnership.
Chairman's Statement
During the year the Company continued to pursue its investment strategy through its shareholding in Electra Private Equity plc ("Electra").
On 25 February 2015, it was approved by the Board to issue up to 111,091,871 new shares at the Issue Price of 93.5 pence per share. The Company successfully completed a Placing on 26 February 2015 which raised gross proceeds of GBP100 million for the purposes of repaying the outstanding borrowings of SIGB, LP and increasing SIGB, LP's investment in Electra. A related Further Allotment Option, which permitted all shareholders to participate on a pre-emptive basis, raised approximately GBP0.6 million following the placing. A further allotment of 595,388 new shares were issued on 19 March 2015, at a price of 93.5 pence per share.
Also, on 25 February 2015, the Investment Manager informed the Company that on 20 February it sent a letter to Electra's Chairman proposing a resumption of discussions about board representation and participation in an expanded review of options to increase Electra's shareholder value. The Board of Directors of the Company were further informed that the Investment Manager had renewed its proposal, originally made in July 2014, to appoint Ian Brindle, Edward Bramson and a new Independent Director to the board of Electra and that the Investment Manager had advised Electra that, if such discussions were not successful, it intended to requisition a general meeting of shareholders of Electra to propose these appointments.
On 20 May 2015, an affiliate of the General Partner to the Investment Partnership, Sherborne Strategic Fund D, LLC ("SSFD"), contributed GBP15 million and was admitted to the partnership of SIGB, LP, thereby acquiring a 4.43% capital interest. The interest was acquired at the net asset value of SIGB, LP on 20 May 2015. Management and incentive fees have been accrued based on the capital interest of the new limited partner since the date of its admission.
On 18 September 2015, Electra announced that it had received a requisition for a general meeting from the Investment Manager to propose the appointment of Ian Brindle and Edward Bramson to the board of Electra. Electra's general meeting was held on 5 November 2015. At the general meeting both resolutions were passed by shareholders and accordingly Messrs. Brindle and Bramson joined the board of Electra. The appointments to the board of Electra required a change in basis of calculation of the incentive fee, and accordingly the Company is now accruing the incentive fee on a turnaround basis.
On 23 October 2015, Electra announced its intention to exercise the mandatory conversion option in its 5 per cent. Subordinated Convertible Bonds due 2017. On 30 December 2015, Electra announced that all of the Subordinated Convertible Bonds outstanding on 29 December 2015 had been mandatorily converted into new ordinary shares of Electra. The conversion price in respect of each Subordinated Convertible Bond was 2,025 pence. The effect of this on the Company is discussed in note 5 of the Consolidated Financial Statements.
As at 31 December 2015 SIGB, LP held 28.21% of Electra through shares following the conversion of securities convertible into shares. As at the date of this letter, SIGB, LP holds approximately 28.25% of Electra through ordinary shares.
Pursuant to its existing authority, the Investment Manager may sell, short or otherwise dispose of all or a part of such shares held in Electra or purchase additional securities at any time.
The Company and its subsidiary (together, the "Group"), intends to continue to pursue its strategy as set out in its prospectus.
At 31 December 2015, the net asset value attributable to shareholders of the Company was GBP388.7 million or 123.57 pence per share (see note 12 of the Consolidated Financial Statements). The Company's net asset value was based on the closing price of 3,757 pence as at 31 December 2015 for the shares of Electra.
On 25 January 2016, Electra announced it was undertaking a review of its investment strategy and policy and its structure. Electra announced that the review would look at all options for maximising long-term shareholder value.
Following the receipt of a distribution from Electra, on 14 April 2016, a dividend of 1.5 pence was declared by the Company and is payable on 13 May 2016 to shareholders on the register at 22 April 2016.
We are grateful for your continued support and will keep you informed of the status of our investment as it develops.
Board of Directors
Talmai Morgan (63) (Chairman)
Appointed to the Board 8 November 2012
Mr. Morgan has been a non-executive director of a number of publicly listed investment companies since 2005. He is currently chairman of NB Private Equity Partners Limited and Global Fixed Income Realisation Limited as well as Sherborne Investors (Guernsey) B Limited. He also sits on the board of BH Global Limited and John Laing Infrastructure Fund Limited. Previously, from July 2004 to May 2005, he was Chief Executive of Guernsey Finance, which is the official body for the promotion of the Guernsey finance industry. From January 1999 to June 2004, Mr. Morgan was Director of Fiduciary Services and Enforcement at the Guernsey Financial Services Commission where he was responsible for the design and implementation of Guernsey's law relating to the regulation of fiduciaries, administration businesses and company directors. He was also particularly involved in Working Groups of the Financial Action Task Force and the Offshore Group of Banking Supervisors. Prior to 1999, Mr. Morgan held positions at Barings and the Bank of Bermuda. Mr. Morgan holds an M.A. in economics and law from the University of Cambridge.
Trevor Ash (69) (Director)
Appointed to the Board 8 November 2012
Mr. Ash has been a non-executive director of a number of investment entities since 1999, and funds managed by Rothschild, Insight, Cazenove, Merrill Lynch and Thames River Capital. He is currently Chairman of JPEL Private Equity Limited. Prior to 1999, Mr. Ash spent 27 years with the Rothschild Group in various capacities, most recently as Managing Director of Rothschild Asset Management (CI) Limited and as a non-executive director of Rothschild Asset Management Limited in London.
Christopher Legge (60) (Audit Committee Chairman)
Appointed to the Board 10 May 2013
Mr. Legge is a Chartered Accountant having started his career at Pannell Kerr Forster (PKF), before moving to Ernst & Young in 1983, where he became a partner in 1986 and managing partner Guernsey in 1998. Since leaving Ernst & Young in 2003 he has taken on a number of non-executive directorships. He is currently Senior independent director of BH Macro Limited, non-executive director of Third Point Offshore Investors Limited, Ashmore Global Opportunities Limited, Multi-Manager Investment Programmes PCC Limited, Baring Vostok Investments PCC, TwentyFour Select Monthly Income Fund Limited, John Laing Environmental Assets Group Limited and Schroder Global Real Estate Securities Limited. Mr. Legge is an FCA and holds a BA (Hons) in Economics from the University of Manchester.
Directors' Strategic Report
The directors present their annual report on the affairs of the Company and its subsidiary (together, the "Group"), together with the financial statements and auditor's independent report, for the year ended 31 December 2015.
Principal activities and investing policy
Sherborne Investors (Guernsey) B Limited (the "Company") is a Guernsey domiciled company incorporated on 8 November 2012 with limited liability. The Company's shares were admitted to trading on the Specialist Fund Market ("SFM") on 7 May 2013.
(MORE TO FOLLOW) Dow Jones Newswires
April 14, 2016 09:25 ET (13:25 GMT)
The Company is a limited partner in SIGB, LP (the "Investment Partnership"), a limited partnership registered in Guernsey on 6 November 2012, holding a 99.98% capital interest at the start of the year which was then reduced to 95.55% on admission of SSFD on 20 May 2015. The Company aims to provide investors with capital growth through its investment in the Investment Partnership, to which it originally committed GBP200 million and subsequently increased its commitment by GBP100 million following the placing, representing substantially all of the Company's assets.
The Group's investment policy is to invest in one Selected Target Company ("STC") at a time. Therefore, the Group will not seek to reduce risk through diversification. If, after acquiring a shareholding, the share price of the STC rises to a level at which further investment and the effort of a Turnaround is, in the Investment Manager's opinion, no longer justified or otherwise no longer presents a viable Turnaround opportunity, the Investment Partnership intends to sell (and distribute the proceeds to the Company) or distribute in kind the holding to the limited partners, rather than seeking to join the Board of Directors or otherwise to engage with the STC. In these circumstances, the Company intends to distribute any realised net profits received from the Investment Partnership to the Shareholders. In such event, an amount equal to the Company's capital contribution for the initial STC (less any losses on the sale) may be recalled by the Investment Partnership and invested into a new STC. This process may be repeated until a Turnaround has been effected.
The investment in the STC may be in shares but can also be in warrants, convertibles, derivatives and any other equity, debt or other securities. The holding period for the investment in the STC is neither fixed nor predictable, but the Company expects that a typical holding period would be greater than one year.
The Company will effect its investment policy indirectly through the Investment Partnership, which seeks to invest in a STC which is publicly quoted, most likely on a UK stock exchange, which it considers to be undervalued as a result of operational deficiencies and which it believes can be rectified by the Investment Manager's active involvement, thereby increasing the value of the investment (a "Turnaround"). The investment will thus not be passive. The Company's investment may be made on-market or off-market.
In 2013, the Company's Board of Directors approved a stake building investment in Electra Private Equity PLC ("Electra") as proposed by SIGB, LP's investment manager, Sherborne Investors Management (Guernsey) LLC.
On 26 February 2015, the Company announced the successful capital raising of a further GBP100 million, allowing the total investment in the STC up to a cost of GBP300 million. The Investment Manager called a General Meeting of Electra and at the general meeting held on 5 November 2015, Ian Brindle and Edward Bramson were appointed to the board of Electra. The appointments to the board of Electra required a change in basis of calculation of the incentive fee, and accordingly the Company is now accruing the incentive fee on a turnaround basis.
The Investment Manager continues to believe that an operational and strategic review of Electra will identify opportunities to substantially enhance the value of portfolio companies which should result in significant capital appreciation of the Company's shares. Accordingly, the Company continues to maintain its investment strategy with respect to Electra.
The Group intends that the holding in the STC shall not reach such a level as to require the Group to make a bid for the entire STC and, therefore, the Group will not have control over the STC.
At 13 April 2016, SIGB, LP had acquired approximately 28.25% of Electra's outstanding shares.
Risk Management
The Directors are responsible for supervising the overall management of the Company, whilst the day-to-day management of the Company's assets has been delegated to the Investment Manager. Portfolio exposure has been limited by the guidelines which are detailed within the Principal Activities and Investment Policy section of the annual report.
The principal risks facing the Company relate to the Company's investment activities and these risks include the following:
-- performance risk -- market risk -- relationship risk
An explanation of these principal risks and how they are managed is set out below.
The Board can confirm that the principal risks of the Company, including those which would threaten its business model, future performance, solvency or liquidity have been robustly assessed for the year ended 31 December 2015.
-- Performance risk - The Board is responsible for approving the Investment Manager's recommended investment in a STC and monitoring the performance of the Investment Manager. An inappropriate strategy or poor execution of strategy may lead to underperformance. To manage that risk the Investment Manager will typically have several potential target companies under review at any one time in various stages of analysis. The Investment Manager's recommendation of a STC includes an assessment of the capital appreciation potential of the proposed investment, assuming certain operating improvements and capital realignment are successfully implemented. The Company intends that its holding in the STC will be less than 30% of the outstanding shares, so that it is not required to make a bid for the entire company. Accordingly, the Company will not control the STC. The Investment Manager's involvement in the turnaround of the STC requires the support of other independent shareholders. The Board receives and reviews regular reports of the Investment Partnership's ownership interest in the STC, progress made in obtaining STC board representation and other information that impacts its turnaround strategy.
-- Market risk - Market risk arises from uncertainty about the future operating performance and market response to the Company's investment in the STC. The Company's investment approach is to invest in only one company at a time. Such investment concentration may subject the Company to greater market fluctuation and loss than might result from a diversified investment portfolio. The market's valuation of the STC is also subject to fluctuations in overall market prices as well as fluctuations in the industry sectors in which the STC operates. The Investment Manager does not typically hedge against overall market or sector fluctuations. The Company also may use a limited amount of short-term leverage to acquire a portion of its ownership interest in the STC which will amplify the results of the STC. In addition to interest and dividend income received from the STC, the source of debt repayment could come from the proceeds realised from the sale of a portion of the STC. The Group's market risk is managed by the Investment Manager in accordance with policies and procedures in place as disclosed in the Group's prospectus. In addition, two board members joined the Board of the STC during 2015 which provides information about the future operating performance and market response of the STC.
-- Relationship risk - Neither the Company nor the Investment Partnership has a physical presence (employees and/or premises). The Company and Investment Partnership are heavily dependent on the Investment Manager for the selection of an appropriate STC and for the day-to-day management and operation of the STC's business and the execution of its Turnaround. The Investment Manager may seek to engage with or nominate appointees to serve on the Board of Directors of the STC in order to facilitate operating performance improvements. There is a risk that the STC will seek to reject any offer of nominated appointees. This may result in the Investment Manager not being able to achieve their objective of improving the STC's performance, which may only be realised by progressing from a Stake Building to a Turnaround Strategy. Operational risk is reviewed by the Board at each Board meeting. The Board also monitors the Group's investment performance and activities since the last Board meeting to ensure that the Investment Manager adheres to the agreed investment policy and approved investment guidelines. Further, at each Board meeting, the Board receives reports from the Company Secretary and Administrator in respect of compliance matters and duties performed by it on behalf of the Company.
Other risks faced by the Company are described in detail within the Company's Offering Document.
The Board have considered the Company's solvency and liquidity risk and full disclosure of this is made in Note 15 of the Consolidated Financial Statements and in the viability statement below.
Viability Statement
In accordance with provision C.2.2 of the UK Corporate Governance Code, the Directors have assessed the viability of the Company over the period ending 31 December 2018. The Directors have determined that the period to 31 December 2018 is the maximum period over which to provide its viability statement in order to keep in line with its investment strategy. The holding period for the investment in the STC is neither fixed nor predictable, but the Company expects that a typical holding period would be greater than one year.
The Directors have identified the following factors as potential contributors to ongoing viability:
-- The principal risks documented in the strategic report as set out above -- The liquidity of the Company's portfolio -- The ongoing relevance of the Company's investment objective in the current environment
(MORE TO FOLLOW) Dow Jones Newswires
April 14, 2016 09:25 ET (13:25 GMT)
The Company, through its investment in the Investment Partnership, is fully invested in listed equity securities of the STC or cash. The STC announced its intent to establish an annual recurring dividend equal to 3% of its Net Asset Value. Projected dividends to be received by the Investment Partnership would be more than adequate to cover all operating costs of the Company as well as financing costs for the three year period ended 31 December 2018. Were the STC to significantly reduce the annual dividend, the Company's pro rata share would still be sufficient to cover such costs. The Company has a GBP50 million short term debt facility, of which GBP20 million has been drawn to purchase a portion of its interest in the STC. The Company has been able to extend the maturity of the short term financing and plans to continue to do so until the investment in the STC is realized. If the Company is unable to extend its financing arrangements with its current lenders and not obtain replacement financing from alternative providers under satisfactory terms and conditions, the Company believes it would be able to liquidate a portion of its holdings in the STC and apply the sale proceeds to satisfy its obligations. Based on the foregoing, the Directors have a reasonable expectation that the Company will be able to continue in operation and meet its obligations as and when they fall due over the three year period to 31 December 2018.
Subsequent events
Details of events that have occurred after the date of the Consolidated Statement of Financial Position are provided in note 13 to the Consolidated Financial Statements.
Dividend policy
The Company's dividend policy, subject to the discretion of the Directors who reserve the right to retain amounts for working capital, is to pay dividends to Shareholders following receipt of any distributions from the Investment Partnership. This will be dependent on the frequency with which the STC pays dividends to its shareholders (of which the Investment Partnership is one) as well as the extent such dividends are first required to be used to repay outstanding indebtedness.
Dividend
There were no dividends declared during the year (2014: Nil).
Business review
A review of the Company's business during the period and an indication of likely future developments are contained in the Chairman's Statement.
Capital
Details of the Company's capital are provided in note 11 to the Consolidated Financial Statements. All shares carry equal voting rights.
Substantial interests
As of 31 March 2016, the Company had received notification of the following material shareholdings:
Number of
Ordinary % of issued
Shareholder Shares share capital
------------------------------- ----------- ---------------
Ameriprise Financial,
Inc 62,908,708 19.9%
Aviva plc 60,044,268 19.1%
Sherborne Investors GP,
LLC 59,882,984 19.0%
FIL Limited 31,395,187 10.0%
Ruffer LLP 20,165,582 6.4%
Invesco Limited 19,556,149 6.2%
Insight Investment Management 17,810,772 5.7%
------------------------------- ----------- ---------------
The Directors currently hold no shares in the Company.
Independent Auditor
The Shareholders resolved to re-appoint Deloitte LLP as auditors to the Company at the Annual General Meeting of the Company on 5 May 2015. Deloitte LLP have indicated their willingness to continue as auditors.
Directors' Remuneration Report
Remuneration Policy & Components
The Board endeavours to ensure the Remuneration Policy reflects and supports the Company's strategic aims and objectives throughout the period under review. It has been agreed that, due to the small size and structure of the Company, a separate Remuneration Committee would be inefficient; therefore the Board is responsible for discussions regarding remuneration. No external remuneration consultants were appointed during the period under review.
As per the Company's Articles of Association, all Directors are entitled to such remuneration as is stated in the Company's Prospectus or as the Company may by ordinary resolution determine; the aggregate overall limit is currently set at GBP120,000. Subject to this limit, it is the Company's policy to determine the level of Directors' fees, having regard for the level of fees payable to non-executive Directors in the industry generally, the role that individual Directors fulfil in respect of responsibilities related to the Board and Audit Committee and the time dedicated by each Director to the Company's affairs. Base fees are set out below. No increase in non-executive Director fees has been proposed for 2016.
Base Fees and fees Received 2015 GBP 2014 GBP ----------------------------- --------- --------- Chairman (Mr Talmai Morgan) 45,000 45,000 ----------------------------- --------- --------- Audit Committee Chairman (Mr Christopher Legge) 35,000 35,000 ----------------------------- --------- --------- Non-executive Director (Mr Trevor Ash) 30,000 30,000 ----------------------------- --------- --------- Total 110,000 110,000 ----------------------------- --------- ---------
As outlined in the Articles of Association, the Directors may also be paid for all reasonable travelling, hotel and other out-of-pocket expenses properly incurred in the attendance of Board or Committee meetings, General meetings, or meetings with shareholders of the Company or otherwise in the discharge of their duties; and all reasonable expenses properly incurred by them seeking independent professional advice on any matter that concerns them in the furtherance of their duties as Directors of the Company.
No Director has any entitlement to pensions, paid bonuses or performance fees, nor been granted share options or been invited to participate in long-term incentive plans. No loans have been extended to a Director by the Company.
None of the Directors has a service contract with the Company. Each of the Directors has entered into a letter of appointment with the Company, subject to election at the first Annual General Meeting, or as determined in line with the Company's Articles, and re-election at subsequent Annual General Meetings in accordance with the Company's Articles and all due regulations and provisions. The Directors do not have any interests in contractual arrangements with the Company or its investment during the year under review, or subsequently. Each appointment can be terminated in accordance with the Company's Articles and without compensation. No notice period is stated in the Articles and is terminable at will of both parties.
Directors' and Officers' liability insurance cover is maintained by the Company but is not considered a benefit in kind nor does it constitute part of the Directors' Remuneration. The Company's Articles indemnify each Director, Secretary, agent and officer of the Company, former or present, out of assets of the Company in relation to charges, losses, liabilities, damages and expenses incurred during the course of their duties, in so far as the law allows and provided that such indemnity is not available in circumstances of fraud, wilful misconduct or negligence.
Corporate Governance
As an unregulated Guernsey incorporated company quoted on the SFM, the Company is not required to comply with the UK Corporate Governance Code or the GFSC Finance Sector Code of Corporate Governance. The Directors, however, place great importance on ensuring that high standards of corporate governance are maintained. Accordingly, the Directors take appropriate measures to ensure that the Company operates with due consideration to any codes of corporate governance which the Board deems appropriate, having regard to the Company's size and nature of business. The Board perceives that good corporate governance practice is necessary for delivering sustainable value, enhance business integrity and to maintain confidence in the Company. To further these aims, the Board has decided to voluntarily comply with the UK Corporate Governance Code dated September 2014 (the "Code"), which sets out guidance in the form of principles and provisions for companies to follow good corporate governance practice. Further information on the Code can be obtained from www.frc.org.uk.
The Board has considered the key issues affecting the Company's corporate governance responsibilities, how they are addressed and the main principles of the Code. The Board is of the view that it has complied with the provisions of the Code, except where not deemed appropriate. This has been disclosed in the report below.
Section A: Leadership
The Chairman is responsible for the leadership of the Board and ensuring its effectiveness on all aspects of its role.
Board Responsibilities
The Board ensures that the Company's contracts of engagement with the Investment Manager, Administrator and other service providers are operating satisfactorily so as to ensure the safe and accurate management and administration of the Company's affairs and business and that they are competitive and reasonable for Shareholders. Terms of Reference that contain a formal schedule of matters reserved for the Board of Directors and its duly authorised Committee for decision has been approved and can be reviewed at the Company's registered office and website.
(MORE TO FOLLOW) Dow Jones Newswires
April 14, 2016 09:25 ET (13:25 GMT)
Management of the Investment Partnership is the responsibility of Sherborne Investors (Guernsey) GP, LLC, the General Partner, which has delegated investment decisions and day-to-day management of the Investment Partnership to the Investment Manager under the terms of an investment management agreement. Through its majority interest in the Investment Partnership, the Company and therefore the Board, has the ability to approve proposed investments and to remove the General Partner. The performance of the Investment Manager is subject to regular review by the Board.
Other matters for the Board include review of the Company's overall strategy and business plans; approval of the Company's half-yearly and annual Financial Statements; review and approval of any alteration to the Group's accounting policies or practices and valuation of investments; approval of any alteration to the Company's capital structure; approval of dividend policy; appointments to the Board and constitution of Board Committees; and performance review of key service providers.
The Company holds appropriate Directors' and Officers' Liability Insurance cover in respect of any legal action taken against the Board.
Board Composition
The Board consists of three non-executive members.
Board Committees
The Board has established an Audit Committee composed of all members of the Board, all of which are independent. The Chairman of the Board is included as a Committee member to enable a full understanding of the issues facing the Company, but would not be appointed as its Chair. The Committee, its membership and its terms of reference are kept under regular review by the Board.
The Audit Committee meets at least twice a year and is responsible for ensuring that the financial performance of the Company is properly reported on and monitored, including reviews of the annual and interim accounts, results announcements, internal control systems and procedures and accounting policies.
The Audit Committee considers the scope and effectiveness of the Company's external audit. The Company's auditor, Deloitte LLP may also provide additional non-audit services to the Company, which in the Audit Committee's opinion, will not compromise the independence of Deloitte LLP's audit team. Further information is provided in the Report of the Audit Committee.
Board and Committee Meeting Attendance
The Board met four times during the year. Individual attendance at Board and Committee meetings is set out below.
Board Audit Committee
---------------- ------ ----------------
Talmai Morgan 4 3
Trevor Ash 4 3
Christopher
Legge 4 3
Total Meetings
for Period 4 3
---------------- ------ ----------------
Division of Responsibilities
There are no executive Directors appointed to the Board. The non-executive Directors responsibilities are clearly defined within the Schedule of Matters reserved to the Board. All day-to-day functions are outsourced to external Service Providers.
The Chairman
Appointed to the position of Chairman of the Board on 7 May 2013, Talmai Morgan is responsible for leading the Board in all areas, including determination of strategy, organising the Board's business and ensuring the effectiveness of the Board and individual Directors. He also endeavours to produce an open culture of debate within the Board.
Role of the non-executive Directors
The Board is composed entirely of non-executive Directors, who meet as required without the presence of the Investment Manager and service providers to scrutinise the achievement of agreed goals and objectives, and monitor performance. Through the Audit Committee, they are able to ascertain the integrity of financial information and confirm that all financial controls and risk management systems are robust. In addition, a non-executive Director may provide a written statement outlining any concerns to the Chairman upon resignation.
See the statements on Board and Committee responsibilities for further information.
Section B: Effectiveness
The Board believes that its balance of skills, experience and knowledge, provides for a sound base from which the interest of investors will be served to a high standard.
Board Composition & Independence
For the purposes of assessing compliance with the UK Corporate Governance Code, the Board considers the Directors are independent of the Investment Manager and free from any business or other relationship that could materially interfere with the exercise of their independent judgment.
Composition of the Board is explained in Section A of the Corporate Governance Report.
Board Appointments Process
Appointment Process
There is currently no Nominations Committee for the Company as it is deemed that the size, composition and structure of the Company would mean the process would be inefficient and counter-productive.
The Board has chosen not to adopt a definitive policy with quantitative targets for board diversity. However, the Board acknowledges the importance of diversity, including gender, for the effective functioning of the Board and commits to supporting diversity in the boardroom. It is the Board's on-going aspiration to have a well-diversified representation. The Board also values diversity of business skills and experience because Directors with diverse skills sets, capabilities and experience gained from different geographical backgrounds enhance the Board by bringing a wide range of perspectives to the Company. The Board believes that the current mix of skills, experience, knowledge and age of the Directors is appropriate to the requirements of the Company.
Commitment
Chairman's Commitment
Prior to the Chairman's appointment, discussions were undertaken to ensure the Chairman was sufficiently aware of the time needed for his role, and agreed to upon signature of his appointment letter. Other significant commitments of the Chairman were disclosed prior to appointment to the Board, and any changes declared as and when they arise. These commitments, and their subsequent impact, can be identified in his biography.
Non-executive Directors' Commitments
The terms and conditions of appointment for non-executive Directors are outlined in their letters of appointment, and are available for inspection by any person at the Company's registered office during normal business hours and at the AGM for fifteen minutes prior to and during the meeting. As with the Chairman, significant appointments are declared prior to appointment, any changes reported as and when appropriate.
Development
The Board believes that the Company's Directors should develop their skills and knowledge through participation at relevant courses. The Chairman is responsible for reviewing and discussing the training and development of each Director according to identified needs. Upon appointment, all Directors participate in discussions with the Chairman and other Directors to understand the responsibilities of the Directors, in addition to the Company's business and procedures. The Company also provides regular opportunities for the Directors to obtain a thorough understanding of the Company's business by regularly meeting members of the senior management team from the Investment Manager and other service providers, both in person and by phone.
Information and Support
Information Provided to the Board
Reports and papers, containing relevant, concise and clear information, are provided to the Board and Committees in a timely manner to enable review and consideration prior to both scheduled and ad-hoc specific meetings. This ensures that Directors are capable of contributing to, and validating, the development of Company strategy and management. The regular reports also provide information that enables scrutiny of the Company's, Investment Manager's and other service providers' performance.
When required, the Board has sought further clarification of matters with the Investment Manager and other service providers, both in terms of further reports and via in-depth discussions, in order to make a more informed decision for the Company.
Company Secretary
Under the direction of the Chairman, the Company Secretary facilitates the flow of information between the Board, Committees, Investment Manager and other service providers' through the development of comprehensive meeting packs, agendas and other media.
Full access to the advice and services of the Company Secretary is available to the Board; in turn, the Company Secretary is responsible for advising on all governance matters through the Chairman. The Articles and schedule of matters reserved for the Board indicate the appointment and resignation of the Company Secretary is an item reserved for the full Board. A review of the performance of the Company Secretary is undertaken by the Board on a regular basis.
Evaluation
Board and Director Evaluation
Using a pre-determined template based on the Code's provisions as a basis for review, the Board undertakes an evaluation of its performance and that of the Audit Committee. This was last completed in December 2015. Additionally, an evaluation focusing on individual commitment, performance and contribution of each Director is conducted. The Chairman meets with each Director to fully understand their views of the Company's strengths and to identify potential weaknesses. If appropriate, new members are proposed to resolve the perceived issues, or a resignation sought. Due to the size and structure of the Board the evaluation of the Chairman of the Board and Audit Committee is dealt with, within the Board and Audit evaluations.
Given the Company's size and the structure of the Board, no external facilitator or independent third party is used in the performance evaluation.
New Directors would receive an induction from the Investment Manager. All Directors receive other relevant training as necessary.
Re-election and Board Tenure
(MORE TO FOLLOW) Dow Jones Newswires
April 14, 2016 09:25 ET (13:25 GMT)
The Board has considered the need for a policy regarding tenure of office; however, the Board believes that any decisions regarding tenure should consider the Company's investment objective and the average length of seeking to achieve that, the need for continuity and maintenance of knowledge and experience and to balance this against the need to periodically refresh Board composition and have a balance of skills, experience, age and length of service.
Each Director is required to be elected by shareholders at the first Annual General Meeting following his initial appointment to the Board. The Board recommends the on-going re-election of each Director and supporting biographies, including length of service, are disclosed.
Section C: Accountability
The Directors' Responsibility Statement confirms that the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group as a whole, whilst the Chairman's Statement includes a fair view of the development and performance of the business and the position of the Group.
Financial and Business Reporting
Financial and Business Information
An explanation of the Directors' roles and responsibilities in preparing the Annual Report and Accounts for the year ending 31 December 2015 is provided in the Report of the Directors.
Further information enabling shareholders to assess the Company's performance, business model and strategy can be sourced in the Chairman's Statement, and the Directors' Strategic Report.
Going concern
The Consolidated Financial Statements have been prepared on the going concern basis. As a result of the repayment of the loan facility being within 12 months, the Company has a net current liability position. The revolving loan facility with HSBC Bank plc (the "Facility") was extended for an additional 12 months on 29 January 2016, with a new maturity date of 26 February 2017. The Facility commitment remains GBP50 million and borrowings under the facility are GBP20 million as at the date of this report. The Company has significant highly liquid assets in respect of its investment in Electra Private Equity Plc ("Electra"), which therefore can be realised in order to satisfy repayment if required. Therefore, after making enquiries and based on the sufficient cash reserves as at 31 December 2015, the Directors are of the opinion that the Group has adequate resources to continue its operational activities for the foreseeable future. The Board is therefore of the opinion that the going concern basis should be adopted in the preparation of the Consolidated Financial Statements.
Investment Manager
After careful consideration of Sherborne Investment Management (Guernsey) LLC ("SIMG") performance, primarily in terms of advice, managing the portfolio and communicating effectively with stakeholders, the Board agreed that it would be in the best interests of the Company that SIMG continue on the current agreed contractual terms.
The management agreement shall terminate upon the dissolution of the Partnership, unless earlier terminated, (i) automatically upon the removal of the General Partner as contemplated by Section 10.b of the Partnership Agreement, or (ii) voluntarily by the Manager, upon 180 days prior written notice to the General Partner and the Partnership.
Risk Management and Risk Control
The Board is required to annually review the effectiveness of the Company's key internal controls such as financial, operational and compliance controls and risk management. As this is the Company's third year of operations, the Board has documented these controls and reviews their effectiveness on an ongoing basis. The controls are designed to ensure that the risk of failure to achieve business objectives is managed rather than eliminated, and are intended to provide reasonable, rather than absolute, assurance against material misstatement or loss. Through regular meetings and meetings of the Audit Committee, the Board seeks to maintain full and effective control over all strategic, financial, regulatory and operational issues. The Board maintains an organisational and committee structure with clearly defined lines of responsibility and delegation of authorities.
The Company's system of internal control includes inter alia the overall control exercise, procedures for the identification and evaluation of business risk, the control procedures themselves and the review of these internal controls by the Audit Committee on behalf of the Board. Each of these elements that make up the Company's system of internal control is explained in further detail as follows:
(i) Control environment
The Company is ultimately dependent upon the quality and integrity of the staff and management of both its Investment Manager, Sherborne Investors Management (Guernsey) LLC, and Administration & Company Secretarial service provider, Ipes (Guernsey) Limited. In each case, qualified and able individuals have been selected at all levels. The staff of both the Investment Manager and Administrator, are aware of the internal controls relevant to their activities and are also collectively accountable for the operation of those controls. Appropriate segregation and delegation of duties is in place. The Audit Committee undertakes a review of the Company's financial controls on a regular basis.
In its role as a third-party fund administration services provider, the Ipes Group, of which Ipes (Guernsey) Limited is a part, produces an annual AAF 01/06 Assurance Report on the internal control procedures in place within the Group, which is subject to review by the Audit Committee and the Board.
(ii) Identification and evaluation of business risks
Another key business risk is the performance of the Company's investment. This is managed by the Investment Manager, who undertakes regular analysis and reporting of business risks in relation to the target company, who then propose appropriate courses of action to the Board for their review.
(iii) Key procedures
In addition to the above, the Board's key procedures involve a comprehensive system for reporting financial results to the Board regularly. A review of controls is conducted by the Audit Committee annually, and a twice-yearly review of investment valuations by the Board, including reports on the underlying investment performance.
Due to the size and nature of the Company and the outsourcing of key services to the Administrator and Investment Manager, the Company does not have an internal audit function. It is the view of the Board that the controls in relation to the operating, accounting, compliance and IT risks performed robustly throughout the year. In addition, all have been in full compliance with the various policies and external regulations, including:
-- Investment policy, as outlined in the IPO documentation
-- Personal Account Dealing, as outlined in the Model Code
-- Whistleblowing Policy
-- Anti-Bribery Policy
-- Applicable Financial Conduct Authority Regulations
-- Treatment and handling of confidential information
-- Conflicts of interest
-- Compliance policies
The Company has delegated the provision of all services to external service providers whose work is overseen by the Board. Each year a short questionnaire is circulated to all external service providers requesting thorough details in regards to controls, personnel and information technology, amongst others. This is in order to provide additional detail when reviewing the performance pursuant to their terms of engagement is undertaken.
There were no protected disclosures made pursuant to the whistleblowing policy of service providers in relation to the Company, during the year ended 31 December 2015.
In summary, the Board considers that the Company's existing internal controls, coupled with the analysis of risks inherent in the business models of the Company and its subsidiaries, continue to provide appropriate tools for the Company to monitor, evaluate and mitigate its risks.
Audit Committee and Auditors
Audit Committee Responsibilities
The Audit Committee is intended to assist the Board in discharging its responsibilities for the integrity of the Company's financial statements, as well as aid the assessment of the Company's internal control effectiveness and objectivity of external auditors. Further information on the Committee's responsibilities are given in the Report of the Audit Committee.
The Board has reviewed the need for an internal audit function and has decided that the systems and procedures employed by the Administrator and Investment Manager, including their own internal controls and procedures, provide sufficient assurance that a sound system of risk management and internal control, which safeguards shareholders' investment and the Group and Company's assets, is maintained. An internal audit function specific to the Group is therefore considered unnecessary.
Section D: Remuneration
Level and Components of Remuneration
Directors are paid in accordance with agreed principles covering various functions including focusing on long-term performance of the Company. Further information can be sourced in the Directors' Remuneration Report.
Procedures
The Company has a formal remuneration policy, outlined in the Directors' Remuneration Report.
Section E: Relations with Shareholders
Dialogue with Shareholders
The Directors place a great deal of importance on communication with shareholders. The Investment Manager and Broker aim to meet with large shareholders at least annually. The Board also receives reports from the Brokers on shareholder issues. The Annual Report and Financial Statements are widely distributed to other parties who have an interest in the Company's performance, and are available on the Company's website.
All Directors are available for discussions with the shareholders, in particular the Chairman and the Audit Committee Chairman, as and when required.
(MORE TO FOLLOW) Dow Jones Newswires
April 14, 2016 09:25 ET (13:25 GMT)
Alternative Investment Fund Management Directive ("AIFMD")
The AIFMD, which was introduced as from 22 July 2014, aims to harmonise the regulation of Alternative Investment Fund Managers ("AIFMs") and imposes obligations on managers who manage or distribute Alternative Investment Funds ("AIFs") in the EU or who market shares in such funds to EU investors.
After seeking professional regulatory and legal advice, the Company was established in Guernsey as a Non-EU AIF, appointing Sherborne Investors Management (Guernsey) LLC to act as the Non-EU AIFM.
The marketing of shares in AIFs that are established outside the EU (such as the Company) to investors in any EU member state is prohibited unless certain conditions are met. Certain of these conditions are outside the Company's control as they are dependent on the regulators of the relevant third country (in this case Guernsey) and the relevant EU member state entering into regulatory co-operation agreements with one another.
Currently, the National Private Placement Regime ("NPPR") provides a mechanism to market Non-EU AIFs that are not allowed to be marketed under the AIFMD domestic marketing regimes. The Board is utilising NPPR in order to market the Company, specifically in the UK. The Board is working with the Company's advisers to ensure the necessary conditions are met, and all required notices and disclosures are made under NPPR. Eligible AIFMs will be able to continue to use NPPR until at least 2018, and until at least 2016 NPPR will be the sole regime available to market in the EEA.
Any regulatory changes arising from implementation of AIFMD (or otherwise) that limit the Company's ability to market future issues of its shares may materially adversely affect the Company's ability to carry out its investment policy successfully and to achieve its investment objective, which in turn may adversely affect the Company's business, financial condition, results of operations, NAV and/or the market price of the Ordinary Shares.
The Board, in conjunction with the Company's advisers, will continue to monitor the development of AIFMD and its impact on the Company.
Foreign Account Tax Compliance Act ("FATCA") and The OECD Common Reporting Standards ("CRS")
FATCA became effective on 1 January 2013 and is being gradually implemented internationally. The legislation is aimed at determining the ownership of US assets in foreign accounts and improving US Tax compliance with respect to those assets.
More than 90 jurisdictions, including 33 member countries of the Organisation for Economic Co-operation and Development ("OECD") and the G20 members, have committed to implement the Common Reporting Standard for automatic exchange of tax information ("CRS"). Building on the model created by FATCA, the CRS creates a global standard for the annual automatic exchange of financial account information between the relevant tax authorities.
The Board in conjunction with the Company's service providers and advisers have ensured the Company's compliance with FATCA and CRS's requirements to the extent relevant to the Company.
Constructive Use of the AGM
The Notice of AGM is sent out at least 20 working days in advance of the meeting. All shareholders will have the opportunity to put questions to the Board or Manager, either formally at the Company's Annual General Meeting on 19 May 2016, informally following the meeting, or in writing at any time during the year via the Company Secretary. The Company Secretary is available to answer general shareholder queries at any time throughout the year.
Report of the Audit Committee
The Board is supported by the Audit Committee, which comprised all the Directors during the year; including the Chairman of the Board to enable a greater understanding of the issues facing the Company. The Board has considered the composition of the Committee and is satisfied that there are sufficient recent relevant skills and experience, in particular with the Chairman of the Audit Committee, Chris Legge, having a background as a chartered accountant.
Role and Responsibilities
The primary role and responsibilities of the Audit Committee are outlined in the Committee's Terms of Reference, available at the registered office and on the Company's website, including:
-- Monitoring the integrity of the financial statements of the Company and any formal announcement relating to the Company's financial performance, and reviewing significant financial reporting judgements contained within said statements and announcements;
-- Reviewing the Company's internal financial controls, and the Company's internal control and risk management systems;
-- Monitoring the need for an internal audit function annually;
-- Monitoring and reviewing the scope, independence, objectivity and effectiveness of the external auditors, taking into consideration relevant regulatory and professional requirements;
-- Making recommendations to the Board in relation to the appointment, re-appointment and removal of the external auditors and approving their remuneration and terms of engagement, which in turn can be placed to the shareholders for their approval at the Annual General Meeting;
-- Development and implementation of the Company's policy on the provision of non-audit services by the external auditors, as appropriate;
-- Reviewing the arrangements in place to enable Directors and staff of service providers to, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters insofar as they may affect the Company;
-- Providing advice to the Board on whether the annual financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's performance, business model and strategy; and
-- Reporting to the Board on how the Committee discharged all relevant responsibilities, undertaken by myself at each Board meeting.
Financial Reporting
The Primary role of the Audit Committee in relation to the financial reporting is to review with the Administrator, Investment Adviser and the Auditor the appropriateness of the Annual Report and Audited Consolidated financial Statements and Interim Condensed Consolidated Financial Statements, concentrating on, amongst other matters:
-- The quality and acceptability of accounting policies and practices;
-- The clarity of the disclosures and compliance with financial reporting standards and relevant financial and governance reporting requirements;
-- Material areas in which significant judgements have been applied or there has been discussion with the Auditor;
-- Whether the Annual Report and Audited Consolidated Financial Statements, taken as a whole, is fair, balanced and understandable and provides the information necessary for the shareholders to assess the Company's performance, business model and strategy; and
-- Any correspondence from regulators in relation to the Company's financial reporting.
To aid its review, the audit committee considers reports from the Administrator and Investment Adviser and also reports from the Auditor on the outcomes of their half-year review and annual audit. The audit committee supports Deloitte LLP in displaying the necessary professional scepticism their role requires.
The Committee met three times during the year under review; individual attendance of Directors is outlined. The main matters discussed at those meetings were:
-- Review and approval of the interim review plan of the external auditors;
-- Review of auditor independence;
-- Review and approval of the annual audit plan of the external auditors;
-- Discussion and approval of the fee for the external audit;
-- Detailed review of the Half Year Report and Accounts and Annual Report and Consolidated Financial Statements and recommendation for approval by the Board;
-- Discussion of reports from the external auditors following their interim review and annual audit;
-- Assessment of the effectiveness of the external audit process as described below;
-- Review of the Company's key risks and internal controls; and
-- Consideration of the 2014 UK Corporate Governance Code, Guidance on Audit Committees and other regulatory guidelines, and the subsequent impact upon the Company.
The Committee has also reviewed and considered the whistleblowing policy in place for the Administrator, and is satisfied the relevant staff can raise concerns in confidence about possible improprieties in matters of financial reporting or other matters insofar as they may affect the Company.
Annual General Meeting
The Audit Committee Chairman, or other members of the Audit Committee appointed for the purpose, shall attend each Annual General Meeting of the Company, prepared to respond to any shareholder questions on the Audit Committee's activities.
Internal Audit
The Audit Committee considers at least once a year whether or not there is a need for an internal audit function. Currently, the Audit committee does not consider there to be a need for an internal audit function, given that there are no employees in the Group and all outsourced functions are with parties / administrators who have their own internal controls and procedures. This is evidenced by the internal control reports provided by the providers, which give sufficient assurance that a sound system of internal control is maintained.
Significant Risks in Relation to the Financial Statements
(MORE TO FOLLOW) Dow Jones Newswires
April 14, 2016 09:25 ET (13:25 GMT)
Throughout the year, the Audit Committee identified a number of significant issues and areas of key audit risks in respect of the Annual Report and Financial Statements. The Committee reviewed the external audit plan at an early stage and concluded that the appropriate areas of audit risk relevant to the Company had been identified and that suitable audit procedures had been put in place to obtain reasonable assurance that the financial statements as a whole would be free of material misstatements. The table below sets out the key areas of risk identified and how the Committee addressed the issues.
Significant Issues Actions to Address Issue
--------------------------- ----------------------------------
Valuation and ownership The Audit Committee and Board
of investment- focus review detailed Investment
upon one target company valuations on a regular basis
means that any errors throughout the year under
in valuation can be review, and receive confirmation
highly material. from the Investment Manager
that the pricing basis is
appropriate and in line with
relevant accounting standards.
--------------------------- ----------------------------------
Calculation of fees The Audit Committee reviewed
to related parties the calculations of fees to
- fees paid to investment ensure there were no material
manager and special misstatements. Regular review
limited partner may and comparison with the LPA
be materially misstated. is undertaken to ensure that
all fees are as contractually
stated. Board approval of
all invoices also reduces
this risk.
--------------------------- ----------------------------------
Auditor Tenure and Objectivity
The Company's current auditors, Deloitte LLP, have acted in this capacity since the Company's inaugural meeting on 9 November 2012. The Committee reviews the auditor's performance on a regular basis to ensure the Company receives an optimal service. Subject to annual appointment by shareholder approval at the Annual General Meeting, the appointment of the auditor is formally reviewed by the Committee on an annual basis. The Auditors are required to rotate the audit partner regularly every 5 years, and the current partner has been in place since 2014. There are no contractual obligations restricting the choice of external auditor and the company will consider putting the audit services contract out to tender at least every ten years. In line with the FRC's suggestions on audit tendering, this will be considered further when the audit partner rotates every five years.
Deloitte LLP regularly updates the Committee on the rotation of audit partners, staff, level of fees in proportion to overall fee income of the Company, details of any relationships between the auditor, the Company and any target company, and also provides overall confirmation from the auditors' of their independence and objectivity.
In addition to the audit and half yearly related remuneration, non audit fees were paid to the auditor in relation to the placing and tax compliance services. A breakdown of these fees can be seen in note 2 of the Consolidated Financial Statements.
The Audit Committee undertook a formal review of the external auditor for the year ending 31 December 2015, with no issues arising. As a result of their review, the Committee is satisfied that Deloitte LLP is independent of the Company, the Investment Manager and other service providers and recommends the continuing appointment of the auditors to the Board.
Conclusions in Respect of the Financial Statements
The production and the audit of the Company's Annual Report and Financial Statements is a comprehensive process requiring input from a number of different contributors. In order to reach a conclusion on whether the Company's financial statements are fair, balanced and understandable, the Board has requested that the Committee advise on whether it considers that the Annual Report and Financial Statements fulfils these requirements. In outlining their advice, the Committee has considered the following:
-- The comprehensive documentation that is in place outlining the controls in place for the production of the Annual Report, including the verification processes in place to confirm the factual content;
-- The detailed reviews undertaken at various stages of the production process by the Investment Manager, Administrator, Auditors and the Committee that are intended to ensure consistency and overall balance; and
-- The controls enforced by the Investment Manager, Administrator and other third party service providers to ensure complete and accurate financial records and security of the Company's assets.
As a result of the work performed during the year, the Audit Committee has concluded it has acted in accordance with its terms of reference and ensured the independence and objectivity of the external auditor. The Annual Report for the year ended 31 December 2015, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's performance, business model and strategy, and has reported on these findings to the Board. The Board's conclusions in this respect are set out in the Statement of Directors' Responsibilities.
Statement of Director's Responsibility
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors are required to prepare the group financial statements in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union. Under company law the Directors must not approve the accounts unless they are satisfied that they give a true and fair view of the state of affairs of the Group and of the profit or loss of the Group for that period. In preparing these financial statements, International Accounting Standard 1 "Presentation of Financial Statements" requires that Directors:
-- properly select and apply accounting policies;
-- present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
-- provide additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Group's financial position and financial performance; and
-- make an assessment of the Group's ability to continue as a going concern.
The Directors confirm that they have complied with the above requirements in preparing the Group Financial Statements. The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies (Guernsey) Law, 2008. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website. Legislation in Guernsey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Responsibility statement
We confirm that to the best of our knowledge:
-- the financial statements, prepared in accordance with IFRS, give a true and fair view of the assets, liabilities, financial position and profit or loss of the company and the undertakings included in the consolidation taken as a whole;
-- the Chairman's statement, Directors' strategic report and corporate governance statement include a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face; and
-- the annual report and financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's performance, business model and strategy.
In accordance with section 249 of the Companies (Guernsey) Law, 2008, each of the Directors confirms that, to the best of their knowledge:
-- There is no relevant audit information of which the Company's auditors are unaware;
-- All Directors have taken the necessary steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditors are aware of said information.
(MORE TO FOLLOW) Dow Jones Newswires
April 14, 2016 09:25 ET (13:25 GMT)
Independent Auditor's Report to the Members of Sherborne Investors (Guernsey) B Limited
Opinion on In our opinion the financial statements:
financial -- give a true and fair view of the state
statements of the Group's affairs as at 31 December
of Sherborne 2015 and of the Group's profit for the
Investors year then ended;
(Guernsey) -- have been properly prepared in accordance
B Limited with International Financial Reporting
Standards (IFRSs) as adopted by the European
Union; and
-- have been prepared in accordance with
the requirements of the Companies (Guernsey)
Law, 2008.
The financial statements comprise the
Consolidated Statement of Comprehensive
Income, the Consolidated Statement of
Financial Position, the Consolidated Statement
of Changes in Equity, the Consolidated
Statement of Cash Flows and the related
notes 1 to 15. The financial reporting
framework that has been applied in their
preparation is applicable law and IFRSs
as adopted by the European Union.
Going concern We have reviewed the Directors' statement
and the Directors' regarding the appropriateness of the going
assessment concern basis of accounting contained
of the principal within note 1 to the financial statements
risks that and the Directors' statement on the longer-term
would threaten viability of the Group contained within
the solvency the Directors' Strategic Report.
or liquidity We have nothing material to add or draw
of the Group attention to in relation to:
-- the Directors' confirmation that they
have carried out a robust assessment of
the principal risks facing the Group,
including those that would threaten its
business model, future performance, solvency
or liquidity;
-- the disclosures that describe those
risks and explain how they are being managed
or mitigated;
-- the Directors' statement in note 1
to the financial statements about whether
they considered it appropriate to adopt
the going concern basis of accounting
in preparing them and their identification
of any material uncertainties to the Group's
ability to continue to do so over a period
of at least twelve months from the date
of approval of the financial statements;
-- the Directors' explanation as to how
they have assessed the prospects of the
Group, over what period they have done
so and why they consider that period to
be appropriate, and their statement as
to whether they have a reasonable expectation
that the Group will be able to continue
in operation and meet its liabilities
as they fall due over the period of their
assessment, including any related disclosures
drawing attention to any necessary qualifications
or assumptions.
We agreed with the Directors' adoption
of the going concern basis of accounting
and we did not identify any such material
uncertainties. However, because not all
future events or conditions can be predicted,
this statement is not a guarantee as to
the Group's ability to continue as a going
concern.
Independence We are required to comply with the Financial
Reporting Council's Ethical Standards
for Auditors and we confirm that we are
independent of the Group and we have fulfilled
our other ethical responsibilities in
accordance with those standards. We also
confirm we have not provided any of the
prohibited non-audit services referred
to in those standards.
Our assessment The assessed risks of material misstatement
of risks of described below are those that had the
material misstatement greatest effect on our audit strategy,
the allocation of resources in the audit
and directing the efforts of the engagement
team:
Risk How the scope of our audit
responded to the risk
==================================== ===============================================================
Valuation and ownership In order to test the investments
of Investments at fair balance as at 31 December
value through profit or 2015 we performed the following
loss procedures:
The investment balance
at 31 December 2015 had * Assessed the design and implementation of controls
a fair value of GBP426.8m relating to the valuation and ownership of
(2014: GBP239.8m). This investments. This included reviewing the controls
is comprised solely of adopted by the Group's administrator and a review of
an equity investment in the AAF 01/06 report of the Group's administrator;
Electra Private Equity
Plc ("Electra"), representing
28.21% (2014: 22.22%) ownership * Reconciled the number of equity shares held as at 31
interest in Electra at December 2015 to an independently received
year-end. Details of the confirmation from the Group's custodian;
investments are disclosed
in notes 5 and 15, and
the accounting policies * Tested the initial cost and cut-off of investment
relating to them are disclosed transactions by agreeing all purchase and sale of
in note 1 (d). equity shares to independent confirmations;
Investments are the most
quantitatively significant
balance in the Consolidated * Obtained independent pricing information as at 31
Statement of Financial December 2015 in order to recalculate the fair value
Position and are an area of the Group's investment;
of focus as they drive
the net asset value of
the Group. * Evaluated the liquidity of the market for Electra
The risk exists that the shares, to ensure there was an active market for
use of an unadjusted level those shares as defined in IFRS 13;
1 price to value the investments
balance at year-end is
not representative of its * Assessed the valuation policy and methodology adopted
value in accordance with by management in comparison to IFRS and industry
IFRS 13 - Fair Value Measurement practice, with emphasis placed on assessing the
('IFRS 13'). appropriateness of the use of an unadjusted level 1
The risk also exists that price in valuing the investment as per IFRS 13;
the incorrect number of
shares is recognised at
year-end, resulting in * Obtained the prospectus of the convertible bonds of
a material misstatement. Electra, and used the terms therein to recalculate
This includes investment the number of shares received on conversion; and
trades being recorded in
the incorrect period, resulting
in an incorrect number * Reviewed the accounting policy for the conversion of
of shares being recognised the convertible bonds during the year to assess
in the financial statements. whether it was in compliance with IFRS.
As further disclosed in
note 5, 14,922 Units in
5% subordinated convertible
bonds of Electra that were
held during the year were
converted into 736,889
ordinary shares in Electra
with a fair value of GBP27.7m
as at 31 December 2015
(2014: GBPnil). There is
a risk that the transaction
has been inappropriately
accounted for, resulting
in the equity instruments
being initially recognised
at an incorrect value and
an inappropriate unrealised
gain being recorded in
the Consolidated Statement
of Comprehensive Income.
==================================== ===============================================================
Basis and Calculation of
(MORE TO FOLLOW) Dow Jones Newswires
April 14, 2016 09:25 ET (13:25 GMT)
Incentive Allocation We tested the incentive
allocation recognised by
The Company has subscribed performing the following
to the Limited Partnership procedures :
Agreement of SIGB, LP.
Under the agreement, there * Assessed the design and implementation of controls in
is an obligation to pay relation to the calculation of the incentive
an incentive fee to SIGB, allocation;
LP's Special Limited Partner
when a distribution is
made by SIGB, LP. This * Reviewed the details of the Limited Partnership
obligation is allocated Agreement to determine whether the basis and
to non-controlling interest calculation of the incentive allocation was in
in the Consolidated Statement accordance with the terms of the agreement;
of Changes in Equity until
it is distributed on the
sale of a Target Investment. * Obtained and reviewed the subscription agreement for
Sherborne Strategic Fund D to assess whether the
The total incentive allocation incentive allocation has been calculated
has been calculated in appropriately;
note 14 as GBP7.8m (2014:
GBP6.2m). In the current
year a total GBP1.8m (2014: * Recalculated the incentive allocation for the
GBP6.2m) has been allocated investment in Electra, in order to determine whether
to the Special Limited the inputs to the calculation were appropriate based
Partner, of which GBP0.18m on the terms of the Limited Partnership Agreement;
(2014: GBPnil) is attributable and
to SSFD.
As disclosed in note 14, * Reviewed the notes to the financial statements to
SSFD committed GBP15m on determine whether they adequately explain the
22 May 2015 and is managed rationale behind the basis applied in the calculation,
by a related party to the the terms of the Limited Partnership Agreement used
Group. The overall effect in the calculation, and that the disclosures of the
of this is that GBP1.6m accrued cost are adequate.
(2014: GBP6.2m) has been
allocated to non-controlling
interest in the Consolidated
Statement of Changes in
Equity.
The incentive allocation
is calculated on one of
two bases, either a 'Stake
Building' or 'Turnaround'
basis. The determination
of which basis is used
is dependent on the stage
in the investment strategy
of the Selected Target
Investment. The methodology
behind the calculation
of the incentive allocation
under each basis is further
disclosed in note 14.
Following the appointment
of designees of the Group
to the Board of Directors
of Electra, the Directors
of the Company have determined
that the incentive allocation
was to be calculated on
a Turnaround basis.
The basis used for the
calculation is not explicitly
defined within the Limited
Partnership Agreement,
and there is significant
judgement around how the
investment in the STC is
characterised at a point
in time, as disclosed in
note 1. The methodology
of the calculation is also
complex and is sensitive
in nature. A risk therefore
exists that the use of
the Turnaround basis at
year-end is inappropriate,
or that the calculation
itself is incorrect, resulting
in the incentive allocation
being understated, including
the amount transferred
to non-controlling interest
in the Consolidated Statement
of Changes in Equity.
==================================== ===============================================================
The description of risks above should
be read in conjunction with the significant
issues considered by the Audit Committee.
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.
Our application We define materiality as the magnitude
of materiality of misstatement in the financial statements
that makes it probable that the economic
decisions of a reasonably knowledgeable
person would be changed or influenced.
We use materiality both in planning the
scope of our audit work and in evaluating
the results of our work.
We determined materiality for the Group
to be GBP7,228,000 (2014: GBP4,514,000),
which is below 2% (2014: 2%) of equity.
The investment objective of the Group
is to realise a return in the growth of
the fair value of the investment in a
selected company. We therefore consider
the value of the Group's equity to be
a key performance indicator for shareholders.
We agreed with the Audit Committee that
we would report to the Committee all audit
differences in excess of GBP145,000 (2014:
GBP90,000), as well as differences below
that threshold that, in our view, warranted
reporting on qualitative grounds. We also
report to the Audit Committee on disclosure
matters that we identified when assessing
the overall presentation of the financial
statements.
An overview Our Group audit was scoped by obtaining
of the scope an understanding of the Group and its
of our audit environment, including Group-wide controls,
and assessing the risks of material misstatement
at the Group level.
Sherborne Investors (Guernsey) B Limited
("the Company") is a limited partner in
SIGB, LP ("the Investment Partnership"),
together "the Group", holding a 95.55%
capital interest. The Investment Partnership
holds the underlying investment in Electra.
Deloitte LLP have audited both the Company
and the Investment Partnership and therefore
the audit team have audited the whole
Group directly.
At the parent entity level we also tested
the consolidation process and carried
out analytical procedures to confirm our
conclusion that there were no significant
risks of material misstatement of the
aggregated financial information of the
remaining components not subject to audit
or audit of specified account balances.
The administrator maintains the books
and records of the entity. Our audit therefore
included obtaining an understanding of
this service organisation (including obtaining
and reviewing their controls assurance
report) and its relationship with the
entity.
================== =============================================================
Matters on
which we are
required to
report by
exception
Adequacy of Under the Companies (Guernsey) Law, 2008
explanations we are required to report to you if, in
received and our opinion:
accounting -- we have not received all the information
records and explanations we require for our audit;
or
-- proper accounting records have not
been kept; or
-- the financial statements are not in
agreement with the accounting records.
We have nothing to report in respect of
these matters.
Our duty to Under International Standards on Auditing
read other (UK and Ireland), we are required to report
information to you if, in our opinion, information
in the Annual in the annual report is:
Report * materially inconsistent with the information in the
audited financial statements; or
* apparently materially incorrect based on, or
materially inconsistent with, our knowledge of the
Group acquired in the course of performing our audit;
or
* otherwise misleading.
In particular, we are required to consider
whether we have identified any inconsistencies
between our knowledge acquired during
the audit and the Directors' statement
that they consider the annual report is
fair, balanced and understandable and
whether the annual report appropriately
discloses those matters that we communicated
to the audit committee which we consider
should have been disclosed. We confirm
(MORE TO FOLLOW) Dow Jones Newswires
April 14, 2016 09:25 ET (13:25 GMT)
that we have not identified any such inconsistencies
or misleading statements.
================== =============================================================
Corporate Although not required to do so, the Directors
Governance have voluntarily chosen to make a corporate
Statement governance statement detailing the extent
of their compliance with the UK Corporate
Governance Code. We reviewed the part
of the Corporate Governance Statement
relating to the Group's compliance with
certain provisions of the UK Corporate
Governance Code. We have nothing to report
arising from our review.
Respective As explained more fully in the Directors'
responsibilities Responsibilities Statement, the Directors
of Directors are responsible for the preparation of
and auditor the financial statements and for being
satisfied that they give a true and fair
view. Our responsibility is to audit and
express an opinion on the financial statements
in accordance with applicable law and
International Standards on Auditing (UK
and Ireland). We also comply with International
Standard on Quality Control 1 (UK and
Ireland). Our audit methodology and tools
aim to ensure that our quality control
procedures are effective, understood and
applied. Our quality controls and systems
include our dedicated professional standards
review team and independent partner reviews.
This report is made solely to the Company's
members, as a body, in accordance with
Section 262 of the Companies (Guernsey)
Law, 2008. Our audit work has been undertaken
so that we might state to the Company's
members those matters we are required
to state to them in an auditor's report
and/or those further matters we have expressly
agreed to report to them on in our engagement
letter 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.
Scope of the An audit involves obtaining evidence about
audit of the the amounts and disclosures in the financial
financial statements sufficient to give reasonable
statements assurance that the financial statements
are free from material misstatement, whether
caused by fraud or error.
This includes an assessment of: whether
the accounting policies are appropriate
to the Group's circumstances and have
been consistently applied and adequately
disclosed; the reasonableness of significant
accounting estimates made by the Directors;
and the overall presentation of the financial
statements.
In addition, we read all the financial
and non-financial information in the annual
report to identify material inconsistencies
with the audited financial statements
and to identify any information that is
apparently materially incorrect based
on, or materially inconsistent with, the
knowledge acquired by us in the course
of performing the audit. If we become
aware of any apparent material misstatements
or inconsistencies we consider the implications
for our report.
Consolidated Statement of Comprehensive Income
For the year ended
31 December 2015
2015 2014
Notes GBP GBP GBP GBP
------------------------------ -------- ---------- ------------ ---------- ------------
Income 1(e)
Unrealised gain on
investments held at
fair value through 1(d),
profit or loss 5 76,040,076 12,420,420
Realised gain on investments
and derivative contracts 5 2,950,714 21,004,048
Dividend income 7 3,778,198 -
Investment income 509,600 -
Bank interest income 17,762 138,349
------------------------------ -------- ---------- ------------ ---------- ------------
83,296,350 33,562,817
------------------------------ -------- ---------- ------------ ---------- ------------
Expenses 1(f)
Professional fees 919,894 1,131,964
Trading and custodian
fees 1,012,761 2,145,488
Administrative fees 270,321 266,344
Finance costs 1(g),10 2,120,563 188,154
Management fees 14 3,341,523 1,595,936
Other fees 356,472 76,809
Directors' fees 2 110,000 110,000
(8,131,534) (5,514,695)
------------------------------ -------- ---------- ------------ ---------- ------------
Consolidated comprehensive
income for the year 75,164,816 28,048,122
------------------------------ -------- ---------- ------------ ---------- ------------
Income attributable
to:
Shareholders 70,351,500 22,039,882
1(b),
Non-controlling interest 14 4,813,316 6,008,240
------------------------------ -------- ---------- ------------ ---------- ------------
Weighted average number
of shares outstanding 297,717,952 207,000,000
Basic and diluted gain
per share (pence) 4 23.63 10.65
------------------------------ -------- ---------- ------------ ---------- ------------
All revenue and expenses are derived
from continuing operations.
The accompanying notes form an integral part of these consolidated financial statements.
Consolidated Statement of Financial Position
For the year ended 31 December 2015
2015 2014
Notes GBP GBP GBP GBP
------------------------- ------- ------------- ------------- -------------- -------------
Non-current Assets
Financial assets
at fair value
through profit
or loss 5 426,795,688 239,773,392
------------------------- ------- ------------- ------------- -------------- -------------
426,795,688 239,773,392
------------------------- ------- ------------- ------------- -------------- -------------
Current Assets
Prepaid expenses 6 31,890 59,071
Cash and cash
equivalents 1(j),8 8,934,650 26,361,169
------------------------- ------- ------------- ------------- -------------- -------------
8,966,540 26,420,240
------------------------- ------- ------------- ------------- -------------- -------------
Current Liabilities
Trade and other
payables 9 (1,012,106) (1,206,140)
Loan Payable 10 (19,979,533) (39,264,921)
------------------------- ------- ------------- ------------- -------------- -------------
(20,991,639) (40,471,061)
------------------------- ------- ------------- ------------- -------------- -------------
Net Current Liabilities (12,025,099) (14,050,821)
------------------------- ------- ------------- ------------- -------------- -------------
Net Assets 414,770,589 225,722,571
------------------------- ------- ------------- ------------- -------------- -------------
Capital and Reserves
Called up share
capital and share
premium 11 302,696,145 203,833,343
Retained reserves 85,997,672 15,646,172
(MORE TO FOLLOW) Dow Jones Newswires
April 14, 2016 09:25 ET (13:25 GMT)
------------------------- ------- ------------- ------------- -------------- ------------- Equity attributable to the Company 388,693,817 219,479,515 ------------------------- ------- ------------- ------------- -------------- ------------- Non-controlling 1(b), interest 14 26,076,772 6,243,056 ------------------------- ------- ------------- ------------- -------------- ------------- Total Equity 414,770,589 225,722,571 ------------------------- ------- ------------- ------------- -------------- -------------
The Consolidated Financial Statements were approved by the Board of Directors for issue on 14 April 2016.
Consolidated Statement of Changes in Equity
For the year ended 31 December 2015
Share
Capital Non-
and Share Retained Controlling Total
Premium Reserves Interests Equity
Notes GBP GBP GBP GBP
------------------------ -------- ------------ ------------ ------------- ------------
Balance at 1 January
2015 203,833,343 15,646,172 6,243,056 225,722,571
------------------------ -------- ------------ ------------ ------------- ------------
Proceeds of Share
issue 11 100,556,687 - - 100,556,687
Contribution from
non-controlling
interests 14 - - 15,020,400 15,020,400
Cost of share issue 11 (1,693,885) - - (1,693,885)
Total comprehensive
income for the
year - 71,968,231 3,196,585 75,164,816
Incentive allocation 1(m),14 - (1,616,731) 1,616,731 -
Balance at 31 December
2015 302,696,145 85,997,672 26,076,772 414,770,589
------------------------ -------- ------------ ------------ ------------- ------------
Share
Capital Non-
and Share Retained Controlling Total
Premium Reserves Interests Equity
Notes GBP GBP GBP GBP
------------------------ -------- ------------ ------------ ------------- ------------
Balance at 1 January
2014 203,833,343 (6,393,710) 9,969,112 207,408,745
------------------------ -------- ------------ ------------ ------------- ------------
Net distribution
to non-controlling
interests 1(b) - - (1,136) (1,136)
Total comprehensive
income for the year - 28,239,320 (191,198) 28,048,122
Incentive allocation 1(m),14 - (6,199,438) 6,199,438 -
Incentive distribution 1(m),14 - - (9,733,160) (9,733,160)
Balance at 31 December
2014 203,833,343 15,646,172 6,243,056 225,722,571
------------------------ -------- ------------ ------------ ------------- ------------
The accompanying notes form an integral part of these consolidated financial statements.
Consolidated Statement of Cash Flows
For the year ended 31 December
2015 Notes 2015 2014
GBP GBP
---------------------------------- ------ ----------------------- --------------
Net cash flow used in operating
activities (1,872,264) (2,343,344)
---------------------------------- ------ ----------------------- --------------
Investing activities
Purchase of investments 5 (108,784,050) (208,226,810)
Proceeds from disposal of
investments 5 752,544 137,272,237
Net cash flows used in investing
activities (108,031,506) (70,954,573)
---------------------------------- ------ ----------------------- --------------
Financing activities
Issue of share premium 11 100,556,687 -
Cost of share issue 11 (1,693,885) -
Loan drawdowns 10 40,000,000 40,000,000
Loan repayments 10 (60,000,000) -
Finance costs (1,063,662) -
Transaction costs and commitment
fee on loan 10 (342,289) (126,027)
Contributions/(distributions)
from non-controlling interest 14 15,020,400 (1,136)
Incentive distribution 14 - (9,733,160)
Net cash flows from financing
activities 92,477,251 30,139,677
---------------------------------- ------ ----------------------- --------------
Net decrease in cash and
cash equivalents (17,426,519) (43,158,240)
Cash and cash equivalents
at beginning of year 26,361,169 69,519,409
---------------------------------- ------ ----------------------- --------------
Cash and cash equivalents
at year end 8,934,650 26,361,169
---------------------------------- ------ ----------------------- --------------
Net cash flow used in operating
activities
---------------------------------- ------ ----------------------- --------------
Total consolidated comprehensive
income for the year 75,164,816 28,048,122
Realised gain on investments
and derivative contracts (2,950,714) (21,004,048)
Fair value gain on financial
assets (76,040,076) (12,420,420)
Decrease in prepaid expenses
and income receivable 27,181 2,527,544
(Decrease)/increase in trade
and other payables (194,034) 317,304
Finance costs 2,120,563 188,154
---------------------------------- ------ ----------------------- --------------
Net cash flow used in operating
activities (1,872,264) (2,343,344)
---------------------------------- ------ ----------------------- --------------
The accompanying notes form an integral part of these consolidated financial statements.
Notes to the Consolidated Financial Statements
For the year ended 31 December 2015
1. Summary of significant accounting policies
Reporting entity
Sherborne Investors (Guernsey) B Limited (the "Company") is a closed-ended investment company with limited liability formed under The Companies (Guernsey) Law, 2008. The Company was incorporated and registered in Guernsey on 8 November 2012. The Company commenced dealings on the London Stock Exchange's AIM market on 29 November 2012 and moved from AIM to the London Stock Exchange's Specialist Fund Market ("SFM") on 7 May 2013. The Company's registered office is 1 Royal Plaza, Royal Avenue, St Peter Port, Guernsey, Channel Islands, GY1 2HL. The "Group" is defined as the Company and its subsidiary, SIGB, LP.
Basis of preparation
The Consolidated Financial Statements of the Group have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union, which comprise standards and interpretations approved by the International Accounting Standards Board (the "IASB") and International Accounting Standards and Standing Interpretations Committee interpretations approved by the International Accounting Standards Committee (the "IASC") that remain in effect, together with applicable legal and regulatory requirements of Guernsey law. The Directors of the Company have taken the exemption in Section 244 of The Companies (Guernsey) Law, 2008 (as amended) and have therefore elected to only prepare Consolidated Financial Statements for the year.
These Consolidated Financial Statements have been prepared on the historical cost basis, as modified by the measurement at fair value of investments and derivatives.
Going concern
Under the UK Corporate Governance Code and applicable regulations, the Directors are required to satisfy themselves that it is reasonable to assume that the Company is a going concern.
The Directors have undertaken a rigorous review of the Company's ability to continue as a going concern including reviewing the ongoing cash flows and the level of cash balances as of the reporting date as well as taking forecasts of future cash flows into consideration.
After making enquiries of the Investment Manager and the Administrator, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt a going concern basis in preparing these audited consolidated financial statements. Please see the Corporate Governance section.
Critical accounting judgments and key sources of estimation uncertainty
(MORE TO FOLLOW) Dow Jones Newswires
April 14, 2016 09:25 ET (13:25 GMT)
The preparation of the Group's Consolidated Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and contingencies at the date of the Group's Consolidated Financial Statements and revenue and expenses during the reported year. Actual results could differ from those estimated.
As more fully described in Note 14, "Related Party Transactions", the Special Limited Partner is entitled to receive an incentive allocation once aggregate distributions to Partners of the Investment Partnership exceed a certain level. The basis of the incentive calculation differs depending on how the investment in the Selected Target Company is ultimately characterised (i.e. as a Turnaround or Stake Building Investment). Otherwise there are no significant estimates utilised for the preparation of the Group's Consolidated Financial Statements as at 31 December 2015 due to the nature of the activities that have occurred in this year, together with the sole investment held by the Group being quoted on the London Stock Exchange. Fair value of financial assets held through profit or loss is therefore based on the quoted closing bid price at 31 December 2015.
Adoption of new and revised standards
(i) Amendments early adopted by the Company:
There were no standards, amendments and interpretations adopted early by the Company.
(ii) Standards, amendments and interpretations that are in issue but not yet effective:
New standards Effective
date
---------------- ----------------------------------------------------
IFRS Financial Instruments - Classifications 1 January
9 and Measurement 2018
IFRS Revenue from Contracts with Customers 1 January
15 2019
IFRS Leases 1 January
16 2019
Revised and amended standards Effective
date
-------------------------------- ----------------------------------------------------
IFRS Mandatory Effective Date and Transition 1 January
7/9 Disclosure (amended) 2018
Unless stated otherwise, the Directors do not consider the adoption of new and revised Accounting Standards and Interpretations to have a material impact.
a. Basis of consolidation
The Consolidated Financial Statements incorporate the financial statements of the Company and an entity controlled by the Company (its subsidiary). Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities.
Non-controlling interests in the net assets of the consolidated subsidiary are identified separately from the Group's equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling entities' share of changes in equity since the date of the combination. Losses applicable to the non-controlling entities in excess of their interest in the subsidiary's equity are allocated against their interests to the extent that this would create a negative balance.
Where necessary, adjustments are made to the financial statements of the subsidiary to bring the accounting policies used into line with those used by the Group.
All intra-group transactions, balances and expenses are eliminated on consolidation.
The Company owns approximately 95.55% (2014: 99.98%) of the capital interest in SIGB, LP. Whilst the general partner of SIGB, LP, Sherborne Investors (Guernsey) GP, LLC, a company registered in Delaware, USA, is responsible for directing the day to day operations of SIGB, LP, the Company, through its majority interest in SIGB, LP, has the ability to approve the proposed investment of SIGB, LP and to remove the general partner. Hence, the Company has consolidated SIGB, LP in its financial statements.
b. Non-controlling interest
The interest of non-controlling parties in the subsidiary is measured at the minority's proportion of the net fair value of the assets, liabilities and contingent liabilities recognised.
c. Functional currency
Items included in the Consolidated Financial Statements of the Group are measured using the currency of the primary economic environment in which the entity operates ("the functional currency"). The Consolidated Financial Statements are presented in Pound Sterling (GBP), which is the Group's functional and presentational currency. Transactions in currencies other than GBP are translated at the rate of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the date of the Consolidated Statement of Financial position are retranslated into GBP at the rate of exchange ruling at that date. Exchange differences are reported in the Consolidated Statement of Comprehensive Income.
d. Financial assets at fair value through profit or loss
Investments, including equity and loan investments in associates, are designated at fair value through profit or loss in accordance with International Accounting Standard 39 ("IAS 39") "Financial Instruments: Recognition and Measurement", as the Company is an investment company whose business is investing in financial assets with a view to profiting from their total return in the form of interest and changes in fair value. Despite the large holding, under International Accounting Standard 28 ("IAS 28") "Investments in Associates", the fund can hold the investment in Electra shares at fair value through profit or loss rather than as an associate as SIGB is a close-ended fund. The convertible bonds, due to being a hybrid contract have been presented wholly at fair value through profit or loss.
Investments in voting shares, convertible bonds and derivative contracts are initially recognised at cost. The investments in voting shares and derivative contracts and convertibles are subsequently re-measured at fair value, as determined by the Directors. Unrealised gains or losses arising from the revaluation of investments in voting shares and derivative contracts and convertibles are taken directly to the Consolidated Statement of Comprehensive Income.
Fair Value is determined as follows:
Investments measured and reported at fair value are classified and disclosed in one of the following categories:
Level I - An unadjusted quoted price for identical assets and liabilities in an active market provides the most reliable evidence of fair value and is used to measure fair value whenever available. As required by IFRS 13, the Group will not adjust the quoted price for these investments, even in situations where it holds a large position and a sale could reasonably impact the quoted price.
Level II - Inputs are other than unadjusted quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models or other valuation methodologies.
Level III - Inputs are unobservable for the investment and include situations where there is little, if any, market activity for the investment. The inputs into the determination of fair value require significant management judgment or estimation.
The investments held by the Group at the period end are classified as meeting the definition of Level I (2014: Level I). On disposal of shares or conversion of bonds, cost of investments are allocated on a FIFO basis.
e. Revenue recognition
Dividend income is recognised when the Group's right to receive payment has been established. Tax suffered on dividend income for which no relief is available is treated as an expense.
Interest receivable from short-term deposits and investment income are recognised on an accruals basis. Where receipt of investment income is not likely until the maturity or realisation of an investment then the investment income is accounted for as an increase in the fair value of the investment.
f. Expenses
All expenses are accounted for on an accruals basis. Expenses are charged through the Consolidated Statement of Comprehensive Income.
g. Finance cost
Finance costs include interest on bank loan and amortised transaction costs. Finance cost is recognised using the effective interest method.
h. Prepaid expenses and trade receivables
Trade and other receivables are initially recognised at fair value. A provision for impairment of trade receivables is established when there is objective evidence the Group will not be able to collect all amounts due according to the original terms of the receivables.
i. Cash and cash equivalents
Cash and cash equivalents comprises cash in hand, call and current balances with banks and similar institutions, which are readily convertible to known amounts of cash and which are subject to insignificant risk of changes in value. This definition is also used for the Consolidated Statement of Cash Flows.
j. Trade and other payables
Trade and other payables are initially recognised at fair value and subsequently, where necessary, re-measured at amortised cost using the effective interest method.
k. Financial instruments
Financial assets and liabilities are recognised in the Group's Consolidated Statement of Financial Position when the Group becomes a party to the contractual provisions of the instrument.
l. Segmental reporting
As the Group invests in one Investee Company, there is no segregation between industry, currency or geographical location. No further disclosures have been made in conjunction with IFRS 8 Operating Segments as it is deemed not to be applicable.
(MORE TO FOLLOW) Dow Jones Newswires
April 14, 2016 09:25 ET (13:25 GMT)
m. Incentive allocation
The incentive allocation is accounted for on an accruals basis and the calculation is disclosed in Note 14. It was calculated as GBP7,816,169 at 31 December 2015 (GBP6,199,438 at 31 December 2014). The incentive is payable to Non-Controlling Interest and therefore recognised in the Consolidated Statement of Changes in Equity rather than recognised as an expense in the Consolidated Statement of Comprehensive Income.
2. Comprehensive income
The consolidated comprehensive income has been arrived at after charging:
2015 2014
GBP GBP
---------------------------------- -------- --------
Directors' fees 110,000 110,000
Auditor's remuneration - Audit 28,200 26,370
Auditor's remuneration - Interim
Review 14,600 16,400
---------------------------------- -------- --------
In addition to the audit and half-yearly review related remuneration above, GBP45,000 non-audit related fees were paid to the Auditor in the current year in relation to the share placing and a further GBP34,280 for Tax compliance services.
3. Tax on ordinary activities
The Company has been granted exemption from income tax in Guernsey under the Income Tax (Exempt Bodies) (Bailiwick of Guernsey) Ordinance 1989, and is liable to pay an annual fee (currently GBP1,200) under the provisions of the Ordinance. As such it will not be liable to income tax in Guernsey other than on Guernsey source income (excluding deposit interest on funds deposited with a Guernsey bank). No withholding tax is applicable to distributions to Shareholders by the Company.
The Investment Partnership will not itself be subject to taxation in Guernsey. No withholding tax is applicable to distributions to partners of the Investment Partnership.
Income which is wholly derived from the business operations conducted on behalf of the Investment Partnership with, and investments made in, persons or companies who are not resident in Guernsey will not be regarded as Guernsey source income. Such income will not therefore be liable to Guernsey tax in the hands of non-Guernsey resident limited partners.
Dividend income is shown gross of any withholding tax.
For the year ended 31 December 2015
4. Gain per share
The calculation of basic and diluted gain per share is based on the return on ordinary activities less total comprehensive income attributable to the Non-Controlling Interest and on there being 297,717,952 (2014:207,000,000) weighted average number of shares in issue at year end.
Days in Weighted Average
Date of issue Shares issue Shares
01/01/2015 207,000,000 365 207,000,000
26/02/2015 106,951,871 308 90,249,798
19/03/2015 595,388 287 468,154
314,547,259 297,717,952
5. Financial assets at fair value through profit or loss
2015 2014
GBP GBP
---------------------------------- ------------ --------------
Opening fair value at the
beginning of the year 239,773,392 135,394,351
Purchases of ordinary shares
at cost 85,282,572 208,226,810
Purchases of Convertible -
bonds at cost 23,501,478
Disposal of shares (589,242) (116,268,189)
Adjustment for shares recognised -
on conversion 2,787,412
Movement in fair value 76,040,076 12,420,420
---------------------------------- ------------ --------------
Closing fair value at the
end of the period 426,795,688 239,773,392
---------------------------------- ------------ --------------
Percentage holding of Electra 28.21% 22.22%
The Board of Directors approved an investment in Electra Private Equity plc ("Electra") which was proposed by SIGB, LP's Investment Manager, Sherborne Investors Management (Guernsey) LLC in December 2013. Electra is a London Stock Exchange listed investment trust focused on private equity investments.
As at 31 December 2015, the Group held 11,360,013 shares of Electra (31 December 2014: 7,918,540). During the year, the Group had held convertible bonds in Electra that could be converted at the Investment Manager's discretion. In accordance with the Company's investment policy, the Investment Manager never intended to effect a conversion in sufficient number such that it would be required to make a mandatory bid for the entire share capital of Electra. No interest was paid to the sellers when the bonds were purchased and therefore no purchased interest has been deducted.
The convertible bonds were listed on the London Stock Exchange. During the year, the Group received interest of GBP509,600 on the bonds, which was paid on 29 June 2015 and 29 December 2015.
On 30 December 2015, Electra announced that all of the Subordinated Convertible Bonds outstanding on 29 December 2015 had been mandatorily converted into new ordinary shares of Electra. The Conversion Price in respect of each Subordinated Convertible Bond was 2,025 pence. This resulted in receipt of 507,012 shares in Electra, which were valued at GBP18,685,940 on initial recognition. A gain was realised on the de-recognition of the Convertible bond of GBP2,240,695.
The voluntary conversion in September and October resulted in a combined total of 229,876 shares received which were valued at GBP7,602,950 on initial recognition. A gain was realised on the conversion of GBP546,717.
During the year, 24,144 shares in Electra were disposed (2014: nil) with gross proceeds received of GBP752,544. A realised gain on disposal of GBP163,302 was recognised (2014: nil). As discussed in note 10, disposal proceeds were used to purchase additional shares in Electra within 30 days of trade settlement, and as such the prepayment clause within the loan facility was adhered to.
6. Prepaid Expenses
2015 2014
GBP GBP
-------------------------------- ------- -------
Prepaid Directors and officers
insurance 21,877 21,797
Other prepaid expenses 10,013 37,274
-------------------------------- ------- -------
31,890 59,071
-------------------------------- ------- -------
7. Dividend Income
2015 2014
GBP GBP
---------------- ---------- -----
Dividend income 3,778,198 -
3,778,198 -
---------------- ---------- -----
On 21 May 2015 an announcement was made to the stock exchange that Electra would pay a dividend of 38 pence per share. This was paid on 24 July 2015.
On 26 October 2015 an announcement was made to the stock exchange that Electra would pay a dividend of 78 pence per share. This was paid on 26 February 2016.
8. Cash and cash equivalents
Cash and cash equivalents comprises cash held by the Group and short term deposits held with various banking institutions. The carrying amount of these assets approximates their fair value.
9. Trade and other payables
2015 2014
GBP GBP
-------------------------------- ---------- ----------
Loan arrangement fee payable - 600,000
Unsettled investment purchases 603,894 -
Amount due to broker 8,350 279,035
Loan interest payable 197,133 103,069
Loan commitment fee payable 29,116 94,137
Other payables 173,613 129,899
-------------------------------- ---------- ----------
1,012,106 1,206,140
-------------------------------- ---------- ----------
10. Loan payable - current
2015 2014
GBP GBP
-------------------------------- ------------- -----------
Balance at 1 January 2015 39,264,921 -
Loan draw down 40,000,000 40,000,000
Repayment (60,000,000) -
Transaction costs (342,289) (820,164)
Amortisation of transaction
costs 1,056,901 85,085
-------------------------------- ------------- -----------
19,979,533 39,264,921
-------------------------------- ------------- -----------
On 8 July 2014, SIGB, LP entered into a GBP50 million, unsecured term loan facility with a bank. Borrowings under the facility could be used to purchase shares, debt or derivative securities of Electra. On 5 March 2015, the borrowings were repaid in their entirety.
On 19 March 2015, GBP20 million of a new GBP50 million, unsecured term loan facility with HSBC Bank Plc was drawn with GBP10 million being repaid on 1 May 2015. The remaining GBP10 million was due to be repaid by 21 September 2015, but was extended. Two further drawdowns of GBP5 million each were made on 20 October 2015 and 25 November 2015, respectively. The finance costs amounted to GBP2,120,563 (2014: GBP188,154), consisting of GBP1,056,901 amortisation of transaction costs, GBP885,850 loan interest and GBP48,696 breakage fees to 31 December 2015 plus non-utilisation fees of GBP129,116.
(MORE TO FOLLOW) Dow Jones Newswires
April 14, 2016 09:25 ET (13:25 GMT)
At the date of this report GBP20 million of this facility is repayable, with the interest, by 26 February 2016; which was subsequently extended to 26 February 2017. The rate of interest per annum on the loan is LIBOR rates plus 4%. The weighted average effective interest rate for the year was 4.68% per annum.
The Facility Agreement has the following main covenants:
i. Any dividend received from Electra shall be applied in prepayment of the Loan and accrued interest up to the amount of the dividend.
ii. Any disposal proceeds from the sale of Electra shares, debt instruments or relevant derivatives shall be applied in the prepayment of the Loan and accrued interest up to the amount of the disposal proceeds.
iii. Any partnership capital injections in SIGB, LP shall be applied in the prepayment of the Loan and accrued interest up to the amount of the capital injections.
iv. SIGB, LP is also required to maintain a Loan to Value (LTV) ratio below 50%. An LTV ratio of 50% or higher would entitle the bank to require full or partial prepayment to restore the required LTV ratio. The LTV ratio is the percentage of the Loan, any accrued interest and fees to the value of SIGB, LP's investment in Electra.
The Loan to Value ratio is regularly monitored by the Board to ensure that covenants are maintained in accordance with the Facility Agreement. HSBC have waived the requirement of using any dividend payments to reduce outstanding borrowings at the year end.
As all the disposal proceeds of shares was used to buy more shares within 30 days subject to Clause 7.7 of the Facility agreement, outstanding borrowings did not have to be reduced with the proceeds.
11. Share capital and share premium
2015 2014
Consolidated Consolidated
--------------------------- ------------- -------------
Authorised share capital No. No.
Ordinary Shares of no par
value Unlimited Unlimited
--------------------------- ------------- -------------
Issued and fully paid No. No.
Ordinary Shares of no par
value 314,547,259 207,000,000
--------------------------- ------------- -------------
2015 2014
Consolidated Consolidated
---------------------------- ------------- -------------
Share premium account GBP GBP
Share premium account upon
issue 307,556,687 207,000,000
Less: Cumulative costs
of issue (4,860,542) (3,166,657)
Balance at the end of the
year 302,696,145 203,833,343
---------------------------- ------------- -------------
On 25 February 2015, it was approved by the Board to issue an allotment of 106,951,871 new shares at the Issue Price of 93.5 pence per share for cash consideration. On 19 March 2015, further allotments of 595,388 new shares were issued at a price of 93.5 pence per share for cash consideration.
The share issue costs for the two allotments were GBP1,693,885.
12. Net asset value per share attributable to the Company
No. of Shares Consolidated
Pence per
Share
------------------- -------------- -------------
31 December 2015
Ordinary Shares
Basic and diluted 314,547,259 123.57
31 December 2014
Ordinary Shares
Basic and diluted 207,000,000 106.03
13. Subsequent Events
Since 31 December 2015, the share price of Electra has decreased from 3,757 pence to 3,559 pence as at 13 April 2016. If this share price was used to value the Electra shares at 31 December 2015, it would have resulted in a decrease in the closing fair value from GBP426,795,688 to GBP404,302,863.
The revolving loan facility with HSBC Bank plc (the "Facility") has been extended for an additional 12 months, with a new maturity date of 26 February 2017. The Facility commitment remains GBP50 million and borrowings under the facility are currently GBP20 million.
A final dividend in Electra was declared on 26 October 2015, and on 26 February 2016 the dividend of GBP8,861,980 was received. This equated to 78 pence per share. HSBC Bank waived the requirement of using the dividend payment to reduce the outstanding borrowings at the year end.
On 9 March 2016 the Custodian to the Company was moved from Credit Suisse Securities (USA) LLC to UBS Financial Services Inc.
On 14 April 2016 a dividend of 1.5 pence was declared by the Company and is payable on 13 May 2016 to shareholders on the register at 22 April 2016.
14. Related party transactions
The Investment Partnership and its General Partner, Sherborne Investors (Guernsey) GP, LLC, have engaged Sherborne Investors Management (Guernsey) LLC to serve as Investment Manager who is responsible for identifying the Selected Target Company, subject to approval by the Board of Directors of the Company, as well as day to day management activities of the Investment Partnership. The Investment Manager is entitled to receive from the Investment Partnership a monthly management fee equal to one-twelfth of 1% of the net asset value of the Investment Partnership, less cash and cash equivalents and certain other adjustments. At the year end, management fees of GBP3,341,523 (2014: GBP1,595,936) had been paid by the Partnership. No balance was outstanding at the year end.
One member of Sherborne Investors (Guernsey) GP, LLC is Sherborne Investors LP (the non-controlling interest), which also serves as the Special Limited Partner of the Investment Partnership. The Special Limited Partner is entitled to receive an incentive allocation once aggregate distributions to Partners of the Investment Partnership, of which one is the Company, exceed a certain level of capital contributions to the Investment Partnership, excluding amounts contributed attributable to management fees.
SSFD, an affiliate of the General Partner to the Investment Partnership, subscribed as a limited partner for GBP15 million of SIGB, LP on 20 May 2015, thereby acquiring a 4.43% capital interest. The interest was acquired at the net asset value ("NAV") of SIGB, LP on 20 May 2015. Management and incentive fees have been accrued based on the capital interest of the new limited partner since the date of its admission. For Turnaround investments, the incentive allocation is computed at 10% of the distributions to all Partners in excess of 110%, increasing to 20% of the distributions to all Partners in excess of 150% and increasing to 25% of the distributions to all Partners in excess of 200% of capital contributions, excluding amounts contributed attributable to management fees.
If after acquiring a shareholding, the share price of the Selected Target Company rises to a level at which further investment and the effort of a Turnaround is, in the Investment Manager's opinion, no longer justified or otherwise no longer presents a viable Turnaround opportunity, the Investment Partnership intends to sell (and distribute the proceeds to the Company) or distribute in kind the holding to the limited partners (in each case after deductions for any costs and expenses and for the Investment Partnership's Minimum Capital Requirements and subject to applicable law and regulation), rather than seeking to join the Board of Directors or otherwise engage with Selected Target company (a "Stake Building Investment").
For Stake Building Investments, the incentive allocation is computed at 20% of net returns on the investment of the Investment Partnership, such amount to be payable after each partner in the Investment Partnership has had distributed to it an amount equal to its aggregate capital contribution to the Investment Partnership in respect to the Stake Building Investment (excluding any capital contributions attributable to Management Fees). The Special Limited Partner may waive or defer all or any part of any incentive allocation otherwise due.
At 31 December 2015, the incentive allocation has been computed based on a Turnaround investment basis and amounts to GBP7,816,169. The incentive allocation is now computed on a Turnaround basis as the Investment Manager's nominees have joined the board of Electra.
Each of the Directors (other than the Chairman) receives a fee payable by the Company currently at a rate of GBP30,000 per annum. The Chairman of the Audit Committee receives GBP5,000 per annum in addition to such fee. The Chairman receives a fee payable by the Company currently at the rate of GBP45,000 per annum.
Individually and collectively, the Directors of the Company hold no shares of the Company as at 31 December 2015.
Sherborne Investors GP, LLC has granted to the Company a non-exclusive licence to use the name "Sherborne Investors" in the UK and the Channel Islands in the corporate name of the Company and in connection with the conduct of the Company's business affairs. The Company may not sub-licence or assign its rights under the Trademark Licence Agreement. Sherborne Investors GP, LLC receives a fee of GBP20,000 per annum for the use of the licenced name.
15. Financial risk factors
The Group's investment objective is to realise capital growth from investment in the Selected Target Company, identified by the Investment Manager with the aim of generating significant capital return for Shareholders. Consistent with that objective, the Group's financial instruments mainly comprise of an investment in a Selected Target Company. In addition, the Group holds cash and cash equivalents as well as having trade and other receivables and trade and other payables that arise directly from its operations.
Liquidity risk
The Group's cash and cash equivalents are placed in demand deposits and short-term money market instruments with a range of financial institutions.
(MORE TO FOLLOW) Dow Jones Newswires
April 14, 2016 09:25 ET (13:25 GMT)
The following table details the liquidity analysis for financial liabilities at the date of the Consolidated Statement of Financial Position:
As at 31 December 2015 Less than 1 - 12
Consolidated 1 month months Total
GBP GBP GBP
Trade and other payables (814,973) (197,133) (1,012,106)
Loan payable - (19,979,533) (19,979,533)
-------------------------- ------------ ------------- -------------
(814,973) (20,176,666) (20,991,639)
-------------------------- ------------ ------------- -------------
As at 31 December 2014 Less than 1 - 12
Consolidated 1 month months Total
GBP GBP GBP
-------------------------- ------------ ------------- -------------
Trade and other payables (1,103,071) (103,069) (1,206,140)
Loan payable - (39,264,921) (39,264,921)
-------------------------- ------------ ------------- -------------
(1,103,071) (39,367,990) (40,471,061)
-------------------------- ------------ ------------- -------------
Credit risk
The Company is exposed to credit risk in respect of its cash and cash equivalents and derivative contracts, arising from possible default of the relevant counterparty, with a maximum exposure equal to the carrying value of those assets. The credit risk on liquid funds is mitigated through the Group depositing cash and cash equivalents across several banks. The credit risk associated with derivative contracts is monitored by reviewing the credit rating for counterparty.
The Group is exposed to credit risk in respect of its trade receivables and other receivable balances with a maximum exposure equal to the carrying value of those assets.
Credit Suisse currently has a stand alone credit rating of A- with Standard & Poor's. UBS Financial Services Inc. currently has a stand alone credit rating of A- with Standard & Poor's.
Market price risk
Market price risk arises as a result of the Group's exposure to the future values of the share price of the Selected Target Company. It represents the potential loss that the Group may suffer through investing in the Selected Target Company.
As at 31 December 2015 a +/-20% change in the price of Electra would positively or negatively affect the Group's net assets, income and consolidated comprehensive income for the year, by GBP85,359,138.
Interest rate risk
The Group is subject to risks associated with changes in interest rates in respect of interest earned on its cash and cash equivalents. The Group seeks to mitigate this risk by monitoring the placement of cash balances on an on-going basis in order to maximize the interest rates obtained. This risk is also mitigated through the Group depositing cash and cash equivalents across several banks.
As at 31 December
2015 Interest bearing
-------------------------------------
Less 1 month 3 months
than to to Non- interest
1 month 3 months 1 year bearing Total
GBP GBP GBP GBP GBP
------------------- ---------- ---------- ------------- -------------- -------------
Assets
Cash and cash
equivalents 8,934,650 - - - 8,934,650
Investments
held at fair
value through
profit or loss - - - 426,795,688 426,795,688
Prepaid expenses - - - 31,890 31,890
------------------- ---------- ---------- ------------- -------------- -------------
Total Assets 8,934,650 - - 426,827,578 435,762,228
------------------- ---------- ---------- ------------- -------------- -------------
Liabilities
Other payables - - - (1,012,106) (1,012,106)
Loan payable - - (19,979,533) - (19,979,533)
------------------- ---------- ---------- ------------- -------------- -------------
Total Liabilities - - (19,979,533) (1,012,106) (20,991,639)
------------------- ---------- ---------- ------------- -------------- -------------
Interest rate risk
As at 31 December
2014 Interest bearing
--------------------------------------
Less 1 month 3 months
than to to Non- interest
1 month 3 months 1 year bearing Total
GBP GBP GBP GBP GBP
------------------- ----------- ---------- ------------- -------------- -------------
Assets
Cash and cash
equivalents 26,361,169 - - - 26,361,169
Investments
held at fair
value through
profit or loss - - - 239,773,392 239,773,392
Prepaid expenses - - 59,071 59,071
------------------- ----------- ---------- ------------- -------------- -------------
Total Assets 26,361,169 - - 239,832,463 266,193,632
------------------- ----------- ---------- ------------- -------------- -------------
Liabilities
Other payables - - - (1,206,140) (1,206,140)
Loan payable - - (39,264,921) - (39,264,921)
------------------- ----------- ---------- ------------- -------------- -------------
Total Liabilities - - (39,264,921) (1,206,140) (40,471,061)
------------------- ----------- ---------- ------------- -------------- -------------
As at 31 December 2015, the total interest sensitivity gap for interest bearing items was a deficit of GBP11,044,883 (2014: deficit GBP12,903,752).
As at 31 December 2015, interest rates reported by the Bank of England were 0.5% which would equate to net expense of GBP55,224 (2014: income GBP64,519) per annum if interest bearing assets and liabilities remained constant. If interest rates were to fluctuate by 0.25%, this would have a positive or negative effect of GBP27,612 (2014: GBP32,259) on the Group's annual income.
Capital risk management
The capital structure of the Company consists of proceeds raised from the issue of Ordinary Shares. As at 31 December 2015, the Group is not subject to any external capital requirement.
The company of Directors believe that at the date of the Consolidated Statement of Financial Position there were no other material risks associated with the management of the Company's capital.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR AKQDBNBKDNQD
(END) Dow Jones Newswires
April 14, 2016 09:25 ET (13:25 GMT)
1 Year Sherborne Investors (gue... Chart |
1 Month Sherborne Investors (gue... Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
