Sure Ventures
plc
Annual Report and Audited Financial
Statements
For the year ended 31 March
2024
Company Number: 10829500
Table of Contents
1 Investment
Objective, Policy and Performance Summary........
1
2 Chairman's
Statement...............................................................
3
3 Investment
Manager's
Report...................................................
7
4 Strategic
Report.....................................................................
13
Business Review
14
Principal Risks and
Uncertainties 16
Key Performance
Indicators8
Promoting the Success of the
Company
5 Directors' Report
Board of
Directors1
Statutory Information
22
Corporate Governance
Statement 6
Report of the Audit
Committee 33
Statement of Directors'
Responsibilities6
Directors' Remuneration Report
(Unaudited) 7
6
Independent Auditor's
Report....................................................
40
7 Financial
Statements7
Income Statement
8
Statement of Financial
Position9
Statement of Changes in
Equity 50
Statement of Cash Flows
51
Notes to the Financial
Statements2
8 Alternative
Performance Measures (APMs)
9 Glossary
10 Shareholders'
Information9
Directors, Portfolio Manager
and Advisers 70
11 Investment Policy
71
1 Investment Objective, Policy and
Performance Summary
Investment Objective
The investment objective of Sure
Ventures plc (the "Company") is to achieve capital growth for
investors.
Investment Policy
The Company's Investment Policy can
be found at page 71 of this Annual Report.
Performance Summary
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31 March
2024
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31 March
2023
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|
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|
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Number of ordinary shares in issue
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7,051,600
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6,646,472
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|
|
|
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Market capitalisation
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-
Ordinary shares (in sterling)
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5,182,926
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6,314,148
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Net
asset value ("NAV") attributable to ordinary
shareholders
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- Ordinary shares
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£5,819,730
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£7,963,207
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NAV
per share attributable to ordinary shareholders
|
|
|
|
-
Ordinary shares (in sterling)
|
82.53p
|
119.81p
|
|
|
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|
|
Ordinary share price (bid price)
|
|
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in sterling
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73.50p
|
95.00p
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Ordinary share price deficit to NAV
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|
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in sterling
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(10.94%)
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(20.71%)
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Investments held at fair value through profit and
loss
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£6,236,446
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£8,196,153
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Cash and cash equivalents
|
£65,209
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£36,697
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|
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Dividend History
There were no dividends paid
during the year (2023 - None).
Listing Information
The Company's shares are admitted to
trading on the Specialist Fund Segment (SFS) of the London Stock
Exchange.
The ISIN number for the GBP shares
is GB00BYWYZ460, Ticker: SURE.
Website
The Company's website address
is http://www.sureventuresplc.com.
2 Chairman's Statement
Chairman's Statement
Dear Shareholders,
On behalf of my fellow Directors,
I am pleased to present Sure Ventures plc's results for the year
ended 31 March 2024.
FINANCIAL PERFORMANCE
For the year to 31 March 2024, the
Company reported a net asset value ("NAV") total return per share
of -31.12% (31 March 2023: -7.06%). This performance is due largely
to the liquidation of two investee companies from the Fund I
portfolio (as defined and further described below), and a follow-on
down round of another Fund I investee company. However, the Company
made extensive efforts to facilitate a successful exit of another
investee company, and there is continued optimism for at least one
negotiated exit before the current financial year end.
Since the Company's incorporation
in 2017, it has created a balanced portfolio of early-stage
technology companies in rapidly evolving sectors of AI, AR/VR, IoT,
and cybersecurity. The Fund I portfolio is now at the realisation
stage, and it was always expected that some investments would not
reach Series A funding rounds and beyond. However, the remainder of
the Fund I portfolio is performing well, with a many of the
companies demonstrating robust business models and benefitting from
healthy revenue streams. This is expected to provide significant
uplifts in the coming quarters. Fund II is in its investment stage
and the portfolio is performing as expected.
We are in a challenging investment
environment. Many of the AI portfolio investments continue to show
resilience, as this sector remains essential in any diversified
technology-based portfolio. With high global interest rates,
upcoming elections in more than 50 countries, and ongoing
geopolitical conflicts, AI is the bright spot in an uncertain
global venture capital landscape.
Regarding current market
developments, Apple recently announced Apple Intelligence,
incorporating OpenAI's ChatGPT into Siri, and integrating AI in its
suite of other products. In AR/VR, Apple has updated the operating
system for its mixed reality Vision Pro headset, and this update
could be a game-changer for the AR/VR consumer market. And in
cybersecurity, several high-profile ransomware attacks have made
recent headlines such as Santander, Ticketmaster and London NHS
hospitals. While AI might increase global ransomware threats,
generative AI will likely offset this by improving threat
identification. The investment portfolio has plenty of exposure to
AI, AR/VR and cybersecurity sectors.
The Fund I portfolio is complete,
with no new investments planned. Remaining capital will be
allocated to follow-on rounds for current investee companies.
Conversely, Fund II is in early investment stages, with investments
in just three companies as at the year end. As at 31 March 2024,
the Company's NAV attributable to shareholders declined by £2.15m
to £5.82m due to a combination of NAV performance and new
subscriptions.
In line with the market trend, the
Company's share price now trades at a discount to its last
published NAV. However, in May 2023 and August 2023, the Company validated its share price by
raising new subscriptions through private placements at the
mid-market share price. Additionally, post year end in June 2024, the Company completed a private placement
generating net proceeds of £200k, demonstrating
its ability to capital raise in challenging market
conditions.
PORTFOLIO UPDATE FUND I
The Company's first fund
investment in Sure Valley Ventures, a Sub-Fund of Suir Valley Fund
ICAV ("Fund I") is a substantial part of the Company's investment
strategy. We committed €7m to Fund I, and as at 31 March 2024,
€6,756,616 has been drawn down.
In 2019, the Company invested
directly in VividQ Limited, a pioneer of AR/VR holography. The
investment provided an unrealised uplift in May 2021, and after a
discounted follow-on round in January 2024, the Company decided to
reduce its exposure by selling this holding to the ICAV,
crystallising a loss of £185k.
During the year, two investments
were liquidated and written down to zero. WarDucks struggled to
secure funding in a difficult global gaming market to further its
game launch, in this very difficult time for the gaming business
globally. Ambisense, which specialised in environmental analytics
and risk assessment, focusing on infrastructure projects, couldn't
secure contracts needed to stay afloat. These write-downs
significantly impacted the Company's NAV.
As at the year end, the Fund I
portfolio included two listed entities; ENGAGE XR Holdings plc, a
VR software developer and Smarttech247, a leader in AI and
cybersecurity cloud technologies. ENGAGE's share price closed
around 50% lower during the year. Smarttech247 performed well, and
post year end the AIFM sold the entire holding, resulting in a
small gain.
The Fund I portfolio includes ten
privately held companies in AI, AR/VR, IoT and cybersecurity. In
2019, the Company achieved its first successful exit via Fund I
with Artomatix, which provided a x5 return on the original
investment. Prior to the WarDucks and Ambisense liquidations, the
first write-downs occurred in the year ended 31 March 2023 for
Buymie and NDRC@Arclabs. Buymie was acquired in 2023, and NDRC's
incubator programme concluded, justifying the write-off.
PORTFOLIO UPDATE FUND
II
In March 2022, the Company
committed £5m to the Sure Valley Ventures Enterprise Capital Fund
("Fund II"), an £85m UK software technology fund. The fund focuses
on AR/VR, the Metaverse, AI, IoT, and cybersecurity, with the
British Business Bank as a cornerstone investor. Fund II aims to
invest in up to 25 software companies.
As at 31 March 2024, Fund II has
invested in three companies; Retinize, a Belfast-based creative
tech company; Jaid, a technology company offering AI-powered
communication solutions; and Captur, a London-based enterprise AI
platform for real-time image recognition. A total of £527k has been
invested in these three companies and the deal pipeline remains
healthy, with plans for 6-8 new investments this year.
COMMITMENTS AND FUNDING
In 2019, the Company increased its
subscription to Fund I by €2.5m, raising its total commitment to
€7m. This enhanced our share in Fund I 25.9%, with approximately
€250k remaining to be funded. The Company's £5m commitment to Fund
II is spread over the investment period. The Company believes it
has sufficient access to funding to meet its remaining commitments
to both funds, supported by available cash, liquid investments,
anticipated subscriptions, and access to loans and equity
subscription facilities.
INVESTMENT ENVIRONMENT
The Company pleased with the
performance of the remaining investments in Fund I and their
potential for delivering higher valuations and negotiated exits in
the next one to two years. Currently it is pursuing exits in
several of the key portfolio investments and, if sold, these
investments could return substantial value to the Company's
NAV.
The pace of technological change
is rapid, and our diverse portfolio is well-positioned to benefit
from these developments. The initial investments for Fund II and
the varied deal pipeline is encouraging and developing extremely
well.
DIVIDEND
The Company did not declare a
dividend for the year ended 31 March 2024 (31 March 2023: £nil).
Our dividend policy focuses on capital growth rather than income.
Significant dividends or other income from its investments are not
expected. While annual dividends are not anticipated, there may be
potential for one-off dividends at the Directors' discretion if
circumstances and liquidity allow.
GEARING
The Company may use gearing of up
to 20% of NAV for liquidity, capital flexibility, and portfolio
management. Primary gearing includes bank borrowings and may also
involve derivatives and other methods as determined by the Board.
As at 31 March 2024, the Company had borrowings of £400,000 drawn
from a £1,000,000 loan facility with Shard Merchant Capital
Limited. The Board and Investment Manager regularly review
borrowing in line with cash management and investment
strategy.
CAPITAL RAISING
On 5 May 2023, the Company
announced a placing of 200,000 ordinary shares on the Specialist
Fund Segment of the London Stock Exchange. A further placing of
205,128 ordinary shares was announced on 21 August 2023. This
increased the Company's total shares in admission to 7,051,600 as
at 31 March 2024. Post year end, a further 275,862 ordinary shares
were placed, raised £200,000 and taking the total shares in
admission to 7,327,462.
The Investment Manager's Report
following this statement provides more details on the Company's
operations and prospects. The Board remains confident in the
Company's long-term prospects and its investment
objectives.
OUTLOOK
It cannot be denied that this has
been a tough year for the Company with a 31.12% reduction in the
Company's NAV. It needs to be understood is that the Company has
robust risk controls and can withstand this environment. Not all
investments will succeed, and the Company would rather focus
valuable funding and personnel resources on those investments
likely to achieve successful negotiated exits, than support ailing
start-ups with little chance of success.
Continued high interest rates have
dampened investor appetite for funding start-up companies and the
continued need that they have for further funding commitments. This
is a theme across the Venture Capital sector. Many of the Company's
investment verticals are essential for global economic development
- AI and cybersecurity are critical now and will continue to be in
the future.
Reoccurring revenue streams,
contract wins, and growth stories are evident in the Company's
portfolio. Several key investments are at exciting development
stages. We remain confident there are compelling facts which
justify the Company to be optimistic about significant valuation
uplifts in the short-term.
Perry Wilson
Chairman
23 July 2024
3 Investment Manager's
Report
Investment Manager's
Report
The company
Sure Ventures plc (the "Company") was
established to enable investors to gain access to early-stage
technology companies in the four exciting and expansive market
verticals of Augmented Reality &
Virtual Reality (AR/VR), Artificial Intelligence (AI),
Cybersecurity and the Internet of Things (IoT).
The Company gains access to deal flow
ordinarily reserved for venture capital funds and ultra-high net
worth angel investors, establishing a diversified software-centric
portfolio with a clear strategy. Listing the Company on the London
Stock Exchange offers investors:
· Relative
liquidity
· A quoted share
price
· A high level of
corporate governance
It is often too expensive, too risky and too
labour-intensive for investors to build a portfolio of this nature
themselves. We are leveraging the diverse skillsets of an
experienced management team who have the industry network to gain
access to quality deal flow, the expertise to complete extensive
due diligence in target markets and the entrepreneurial skills to
help these companies to mature successfully. Those investing in the
Company will get exposure to Sure Valley Ventures which in turn
makes direct investments in the above sectors in the UK &
Ireland.
Artificial
Intelligence
The global technology landscape is
undergoing a profound transformation, with AI emerging as the
driving force behind this revolution. While AR/VR, the IoT and
Cybersecurity remain important areas of innovation, their
trajectories are increasingly intertwined with the advancements in
AI.
The global AI market size was
valued at USD 515.31 billion in 2023 and is projected to grow from
USD 621.19 billion in 2024 to USD 2,740.46 billion by 2032,
exhibiting a Compound Annual Growth Rate ("CAGR") of 20.4% during
the forecast period (2024-2032). This growth is fuelled by the
increasing demand for AI-powered solutions across industries,
ranging from healthcare and finance to manufacturing and
entertainment. AI is a field focused on
creating intelligent systems that can emulate human cognitive
abilities such as learning, reasoning, problem-solving, and
decision-making. AI involves developing algorithms and
computational models capable of processing and analysing data,
recognising patterns, and providing insights to aid decision-making
processes.
AI holds significant potential for
driving innovation and transforming various industries. By
automating repetitive tasks, AI can enhance operational efficiency
and productivity, allowing human resources to be allocated to more
strategic and creative endeavours. Moreover, AI's ability to
analyse vast amounts of data can uncover valuable insights,
enabling more informed decision-making and problem-solving in areas
such as healthcare, finance, and scientific research. AI also
presents opportunities for personalised experiences through
understanding individual preferences and behaviours, leading to
tailored products, services, and recommendations. Additionally,
AI-powered intelligent assistants, chatbots, and autonomous systems
can improve accessibility, convenience, and safety in various
domains.
The growth of the AI market is
being driven by a number of factors, including the increasing
adoption of AI technologies across various industries, the growing
demand for automation and efficiency, and the development of new AI
applications. Additionally, the increasing availability of data and
advancements in computing power are also contributing to the growth
of the AI market.
Recent developments within the AI Space
include:
· Google I/O Event: Google announced a whole slew of AI related
features and functionality the Google I/O Event in May 20204
including AI Generated Search Overviews (an entire AI-generated
search results page), Gemini 1.5 Flash (a smaller and faster
version of the next generation of Gemini large language models),
Project Astra (Google DeepMind's vision for the future of AI
assistants. The aim is to develop AI that can understand and
respond to situations similarly to humans), VEo Video Creation (a
model that can create high quality video output from text, image
and video prompts. This is a competitor for Open AI's Sora model
which can create video from text.).
· OpenAI release GPT-4o: Their newest flagship model provides
GPT-4-level intelligence but is much faster and improves on its
capabilities across text, voice, and vision.
· xAI
secures USD 6B to challenge OpenAI in AI race: This money will help bring xAI's first products to market,
build advanced infrastructure, and accelerate research and
development efforts into future technologies.
· Microsoft announces Copilot+ PCs: a
new category of Windows PCs designed for AI. Copilot+ PCs are the fastest, most intelligent Windows PCs
ever built. With powerful new silicon capable of an incredible 40+
TOPS (trillion operations per second), all-day battery life and
access to the most advanced AI models, Copilot+ PCs will enable you
to do things you can't on any other PC.
Immersive Technology
The Immersive Technology Market
size was valued at USD 33.2 billion in 2023 and is estimated to
register a CAGR of over 24.5% between 2024 and 2032, owing to the
diverse application scope of immersive technologies across various
industries.
Immersive technologies find
applications across various industries, including gaming,
entertainment, healthcare, education, manufacturing, retail, and
real estate. The versatility of these technologies allows for
innovative solutions in training, simulation, visualisation,
marketing, design, and customer engagement. As more industries
recognise the potential benefits of immersive technologies, demand
continues to grow.
Continuous advancements in
hardware components such as graphics processing units (GPUs),
displays, sensors, and software frameworks have significantly
improved the capabilities and performance of immersive
technologies. This includes developments in rendering techniques,
tracking technologies, and display resolutions, leading to more
realistic and immersive experiences. In 2024, key immersive
experience trends include the rise of virtual events, enhanced AR
shopping experiences, and the integration of MR in
education.
AI in Immersive Tech
The integration of AI in AR &
VR is expected to be transformative:
· Enhanced User Experience: AI is set to play a crucial role in
improving the user experience within AR/VR environments.
Intelligent algorithms can adapt and personalise immersive
experiences, offering users more engaging and tailored
interactions.
· Advanced Object Recognition: AI can significantly enhance
object recognition capabilities in AR applications, making it
easier for these systems to identify and interact with real-world
objects seamlessly.
Internet of Things
The global IoT market size was
valued at USD 595.73 billion in 2023 and is projected to grow from
USD 714.48 billion in 2024 to USD 4,062.34 billion by 2032,
exhibiting a CAGR of 24.3% during the forecast period
(2024-2032).
The IoT refers to the network of
physical objects that are inserted with software, sensors, and
other mechanisms for exchanging and connecting data with other
systems and devices over the Internet. The IoT technology operates
as a global infrastructure for the information society, empowering
modernised services to connect and communicate things based on
prevailing and evolving communication mechanisms. Also, it delivers
interoperable data and the capability to communicate
self-sufficiently without human intervention.
With rising population and
urbanisation, several countries globally are introducing smart city
projects and implementing smart city solutions to accomplish
resources. Connected devices, such as sensors, smart meters, and
smart lights, help advance the functions and proficiency of set-up
and related services. The rising number of smart homes and
buildings, Industry 4.0, smart manufacturing, and smart
infrastructure developments are projected to generate a vast
transformation in business areas, thereby driving the internet of
things market growth.
Moreover, smart city solutions,
such as smart utility meters, smart transportation, smart waste
management, smart grids, and smart air quality controllers, are
being implemented by consumers, thereby elevating the market
potential of connected devices worldwide.
AI in Internet of Things
As AI technologies continue to
advance, they are expected to play a crucial role in the
development of more sophisticated IoT applications. For
example:
· Generative AI can be implemented in IoT solutions to enhance
projecting maintenance. IoT sensors can collect massive amounts of
data regarding machine health and performance that can be used to
train generative AI models to generate synthetic data for upkeep
predictive analysis.
· AI
algorithms can process and analyse vast amounts of data generated
by IoT devices, extracting actionable insights and enabling more
intelligent decision-making.
· AI-driven automation can be used to improve the efficiency of
IoT systems.
· AI
can predict and identify potential issues in IoT devices before
they become critical, optimising maintenance schedules and reducing
downtime.
Such applications of AI, along
with IoT, can be used across different industries, such as
manufacturing, automotive, healthcare, and others.
Cybersecurity
The global cyber security market
size was valued at USD 172.32 billion in 2023 and is projected to
reach USD 424.97 billion in 2030, exhibiting a 13.8% CAGR during
the forecast 2023-2030.
The growth of the cyber security
market is being driven by a number of factors, including the
increasing number of cyber-attacks, the growing adoption of cloud
computing, and the increasing use of IoT devices. Cyber-attacks are
becoming more sophisticated and targeted, and they are causing
significant financial and reputational damage to
organisations. The key cyber security
players are implementing core technologies such as machine
learning, the IoT, cloud, and Big Data in their business security
units. They are further adopting IoT and machine learning
signature-less security system. This adoption would help the
players understand uncertain activities and trials and identify
& detect uncertain threats.
With the rising growth in the IoT
market, IoT solutions are gaining popularity across various
information security applications. Consequently, adopting advanced
technologies in internet security is considered a rapidly emerging
market trend. Moreover, Big Data and cloud technology support
enterprises in learning and exploring potential risks.
Another trend that aids the cyber
security industry growth is the increased adoption of cloud
computing. Players in the market, including Cisco Systems, IBM
Corporation, and others, focus on developing advanced cyber
security solutions based on. The rising
number of e-commerce platforms and technological advancements, such
as AI, cloud, and block chain, have augmented internet security
solutions in a connected network infrastructure. Additionally,
e-commerce companies are focused on adopting network security
solutions in their IT and electronic security systems.
AI in Cyber Security
As cyber threats become
increasingly sophisticated, AI is playing a critical role in
bolstering cybersecurity defences. AI-powered systems can analyse
network traffic, detect anomalies, and identify potential threats
in real-time, providing proactive protection against
cyberattacks.
The growth of the AI market is
also expected to have a significant impact on the Cyber Security
market. As AI technologies continue to advance, they are expected
to play a crucial role in the development of more sophisticated
cyber security systems. For example:
· AI-powered machine learning can be used to detect and respond
to cyber threats
· AI-driven automation can be used to improve the efficiency of
cyber security systems
Conclusion
The benefit of investing in
companies in these four key sectors at a seed stage are
that:
Sure Valley Ventures can invest in
these companies at attractive valuations of between £2 to £8m and
get up to 20% of the company for initial investment amounts of
between £0.75m to £1.25m.
· The
investment sectors (AI, AR/VR, IoT, and Cybersecurity) have massive
growth potential ahead of them which creates a tailwind behind the
companies that are creating these new markets.
· These sectors are also ones that have the potential of
creating the next big European Companies and build on Europe's
existing technology strengths.
· These companies have the potential to get to exponential
growth and of achieving an IPO or being acquired by one of the
Silicon Valley giants who are all investing in these
sectors.
· The
Sure Valley Ventures Platform and Network can help fast-track the
development of these companies across the chasm to the Series A
investment round, which in turn increases the potential for an
outsized return and also reduces the risk of the failure of a
portfolio company.
In summary, Sure Ventures plc can
gain exposure to all these benefit through its participation in the
Sure Valley Ventures' Funds.
PORTFOLIO BREAKDOWN
On 6 February 2018, the Company entered into a
€4.5m commitment to Sure Valley Ventures ("Fund I"), the sole
Sub-Fund of Suir Valley Funds ICAV and its investment was equalised
into Fund I at that date. On 31 August 2019, a further €2.5m was
committed to Fund I, taking the total investment in Sure Valley
Ventures to €7m. The first drawdown was made on 5 March 2018 and as
at 31 March 2024, a total of €6,756,616 had been drawn down against
this commitment.
On 26 April 2019, the Company made a direct
investment of £500,000 into VividQ Limited, a deep tech start-up
with world leading expertise in 3D holography. VividQ Limited
completed an additional funding round in May 2021 which saw the
valuation of this investment rise to £794k, representing a 59%
unrealised gain. In January 2024, VividQ raised a significant round
of investment at a 60% discount to the previous round, which
resulted in the position being revalued to £315k. The decision was
made to exit this holding to the Sure Valley Ventures Fund, to
reduce the direct exposure of this portfolio company to Sure
Ventures plc. This sale was done at the price of the latest round,
resulting in a realised loss on the total investment of
£185k.
Sure Ventures plc also holds a direct
investment in a UK-based immersive entertainment group; Let's
Explore Group Inc (formerly Immotion Group PLC), as announced on 24
April 2018. In May 20203, Let's Explore announced it had entered
into a conditional sale and purchase agreement, for the sale of its
Location Based Entertainment business (collectively; Immotion
Studios Limited, Immotion VR Limited and C.2K Entertainment Inc.),
to LBE BidCo, Inc. for an enterprise value of USD 25,211,739 on a
cash free/debt free basis. Further to this news, a tender offer for
65% of shares held was made by the acquirer at 4.75p a share, which
the AIFM team took up. In addition to this, due to the unknown
nature of the acquirer, the decision was made to sell down the
remaining 35% of the holding, as liquidity in the share permitted.
As at 31 March 2024, Sure Ventures plc has sold materially all of
its holding in this listed entity, with only a small residual
position remaining.
On 25 February 2022, Sure Ventures plc
committed to invest £5m into the second fund of Sure Valley
Ventures ("Fund II"). Fund II completed an £85m first close of a
£95m UK software technology fund, which aims to increase the supply
of equity capital to high-potential, early-stage UK companies. The
first drawdown was made on 23 February 2022 and as at 31 March
2024, a total of £526,971 had been drawn down against this
commitment.
As detailed in the Statement of Financial
Position included in the following financial statements, these two
Sure Valley Ventures Fund investments alongside the residual listed
holding, represent the entire portfolio of Sure Ventures plc as at
31 March 2024.
On 5 May 2023, the Company announced a placing
of 200,000 ordinary shares, followed by a further placing of
205,128 ordinary shares, announced on 21 August 2023. The ordinary
shares were admitted to trading on the Specialist Fund Segment of
the London Stock Exchange on 12 May 2023 and 25 August 2023
respectively, under the existing ISIN: GB00BYWYZ460, taking the
total shares in admission as at 31 March 2024 to
7,051,600.
SUIR VALLEY FUNDS ICAV
Suir Valley Funds ICAV (the ''ICAV'') is a
closed-ended Irish Collective Asset-management Vehicle with
segregated liability between sub-funds incorporated in Ireland
pursuant to the Irish Collective Asset-management Vehicles Act 2015
and constituted as an umbrella fund insofar as the share capital of
the ICAV is divided into different series with each series
representing a portfolio of assets comprising a separate
sub-fund.
The ICAV was registered on 18 October 2016 and
authorised by the Central Bank of Ireland as a qualifying investor
alternative investment fund ("QIAIF") on 10 January 2017. The
initial sub-fund of the ICAV is Sure Valley Ventures, or Fund I,
which had an initial closing date of 1 March 2017. Fund I invests
in a broad range of software companies with a focus on companies in
the AR/VR, AI and IoT sectors.
As at 31 March 2024, Fund I had commitments
totaling €27m and had made seventeen direct investments into
companies spanning the AR/VR, AI and IoT sectors. One of these
investments was sold in 2019, giving Fund I its first realised gain
on exit of around 5x return on investment. On 12 March 2018,
Immersive VR Education Limited, Fund I's first investment,
completed a flotation on the London Stock Exchange (AIM) and the
Dublin Stock Exchange (ESM). The public company is now called
ENGAGE XR Holdings plc - ticker EXR (Formally VR Education Holdings
plc - VRE). EXR was the first software company to list on the ESM
since that market's inception. In July 2020, following an
improvement in share price, Fund I decided to sell sufficient
shares to recover its initial investment. This resulted in a
realised gain of €73k being payable to Sure Ventures plc, along
with its share of the initial investment, and some Escrow funds
from the aforementioned exit. The final Escrow payment from the
sale was settled in July 2021, seeing another €151k flowing to Sure
Ventures plc. Total distributions from Fund I to Sure Ventures plc
as at 31 March 2024 was €1,759,630.
SURE VALLEY VENTURES ENTERPRISE
CAPITAL FUND
Sure Valley Ventures Enterprise Capital Fund is a
closed-ended UK based GP/LP Fund which completed its first close on
1 March 2022. The total commitments for this first close were £85m,
with potential for a further £10m to be raised in a secondary
close. The British Business Bank are the cornerstone investor of
this Fund, committing £50m of the initial £85m, with Sure Ventures
plc committing a total of £5m.
Fund II has a similar investment strategy to the
first Fund, being a seed capital investor in high growth software
companies that are focused on bringing a disruptive innovation to
market. It plans to invest into 25 software companies from across
the UK through its new fund. As well as being based in London,
Dublin, and Cambridge, the Sure Valley team has recently opened an
office in Manchester to help access deals in the significant and
exciting innovation clusters that have developed around creative
technologies in the North of England and in the Metaverse and AI
opportunities in cities such as Manchester, Leeds, Sheffield and
Newcastle.
As at 31 March 2024, the Fund had drawn down a total
of £8.92m and has made its first three investments into a Belfast
based company called Retinize, for an amount of £1m in March 2022;
a London based company called Jaid (t/a Opsmatix Limited) for £1m
in November 2022 plus a further £988k in follow on investments; and
finally a London based company called Captur, which the Fund
invested £1.5m in September 2023. The total invested capital to
date for Sure Ventures plc was £526,971.
Performance
In the year to 31 March 2024, the Company returned a
Net Asset Value ("NAV") of £0.83/unit, representing a 31.1% decline
from the audited March 2024 NAV of £1.20p. The NAV decline is
largely a result of the Fund I performance struggling in a tough
market environment which has seen one additional investment write
off and one funding down round. The lack of new funding rounds and
additional exit opportunities have resulted in less unrealised
gains than in prior years and so this has negatively impacted the
Fund's NAV. The investment in Sure Valley Venture Enterprise
Capital Fund has returned a NAV of £0.57. This performance is
considered in line with expectation as the Fund continues to build
out the portfolio and would be unlikely to see any immediate gains
given the infancy of the Fund. Regarding the only other
investments, Let's Explore Group plc which has been acquired and
renamed Huddled Group plc, this closed the period at 2.35p, down
from 3.6p at the year end; indicative of a tough few months in the
public markets and wider economy. However, as mentioned above, Sure
Ventures plc has materially exited this position at higher levels
than the current share price. Given the lack of revenue to support
the ongoing operational costs of the plc, the unrealised gains in
the two Sure Valley Funds are key to maintaining a steady NAV,
until the point that we see more exits to create realised gains,
which we hope to see in the near future.
FutuRe Investment
OUTLOOK
Fund I has achieved one very positive realised gain,
recovered its full investment in its listed portfolio company, as
well as seeing number a of unrealised gains across the portfolio.
The portfolio of current investments is continuing to mature, with
most companies having now completed series A funding rounds, which
provided the previous NAV growth that was set out to achieve from
inception. The focus now shifts towards finding exit opportunities
as we look to realise some further gains across the portfolio. As
the investment period of this Fund has now closed, there are no
more new investments to be made, with all remaining capital being
allocated to follow-on funding of existing investments, as these
companies continue to grow and provide the Fund with opportunities
to exit.
In addition to this, having more exposure to the UK
market for early-stage high growth software companies through the
commitment into the Sure Valley Ventures Enterprise Capital Fund
will yield exciting opportunities as the Fund continues to deploy
capital across the landscape with a view to generating significant
returns for investors throughout its lifecycle.
We remain confident in the future outlook of the
Company for the following financial year, particularly with the
exciting pipeline of deals that can been seen from the new
Enterprise Capital Fund and the increasing maturity of the first
Sure Valley Ventures Fund portfolio. Whilst the Funds provide great
exposure to a wealth of expertise and a larger suite of portfolio
companies, we also reserve the right to make further direct
investments provided there is sufficient working capital to do
so.
Shard Capital
AIFM LLP
Investment Manager
June
2024
4 Strategic Report
Business Review
The strategic report on pages 13
to 19 has been prepared to help shareholders assess how the Company
operates and how it has performed. The strategic report has been
prepared in accordance with the requirements of Section 414 A-D of
the Companies Act 2006 (the "Act") and best practice. The business
review section of the strategic report discloses the Company's
risks and uncertainties as identified by the board, the key
performance indicators used by the board to measure the Company's
performance, the strategies used to implement the Company's
objectives, the Company's environmental, social and ethical policy
and the Company's future developments.
PrincipaL activity
The Company carries on business as
an investment trust and its principal activity is to invest in
companies in accordance with the Company's investment policy with a
view to achieving its investment objective.
Investment Policy
The Company's Investment Policy
can be found at page 71 of this Annual Report.
Future developments
While the future performance of the Company is
dependent, to a large degree, on the performance of
Sure Valley Ventures (the "Fund") which, in
turn, is subject to many external factors, the board's intention is
that the Company will continue to pursue its stated investment
objective as outlined on page 2. The Company's future developments
and outlook are discussed in more detail in the Chairman's
Statement on pages 3 to 6 and the Investment Manager's Report on
pages 7 to 12.
Premium/Discount
management
The board closely monitors the
premium or discount at which the Company's ordinary shares trade in
relation to the Company's underlying net asset value and takes
action accordingly. Throughout the period under review the
Company's ordinary shares traded at discount to its underlying net
asset value. The board is of the view that an increase of the
Company's ordinary shares in issue provides benefits to
shareholders, including a reduction in the Company's administrative
expenses on a per share basis and increased liquidity in the
Company's shares.
Whilst the board believes that it is in the
shareholders' best interests to prevent the Company's shares
trading at a discount to net asset value as shareholders will be
unable to realise the full value of their investments, the current
trend is for listed investment trusts to trade at a discount to net
asset value. Notwithstanding this current discount to net asset
value, the Company may from time to time acquire its own shares,
should there be sufficient liquidity to do so.
Corporate and operational
structure
Operational and portfolio
management
The Company has outsourced its operations and
portfolio management to various service providers as detailed
below:
· Shard
Capital AIFM LLP is appointed as the Company's manager (the
"Manager" or "Investment Manager") and Alternative Investment Fund
Manager ("AIFM") for the purposes of the Alternative Investment
Fund Managers Directive ("AIFMD");
· Apex
Fund Services (Ireland) Limited is appointed to act as the
Company's administrator;
· Apex
Secretaries LLP is appointed as the Company's secretary.
· INDOS
Financial Limited is appointed as the Company's
depositary;
·
Computershare Investor Services plc is appointed as the
Company's registrar;
· Shard
Capital Partners LLP is appointed to act as the Company's placing
agent; and
· PKF
Littlejohn LLP is appointed to act as the Company's independent
auditor.
Alternative Investment Fund Managers
Directive
In accordance with the AIFMD, the Company has
appointed Shard Capital AIFM LLP to act as the Company's AIFM for
the purposes of the AIFMD. The AIFM ensures that the Company's
assets are valued appropriately in accordance with the relevant
regulations and guidance. In addition, the Company has appointed
INDOS Financial Limited as depositary, to provide depositary
services to the Company as required by the AIFMD.
Donations
The Company made no political or charitable
donations during the year under review to organisations either
within or outside the EU (2023: none).
Environment, human rights, employee, social
and community issues
The Company is required by law to provide
details of environmental matters (including impact of the Company's
business on the environment), employee, human rights, social and
community issues (including information about any policies it has
in relation to these matters and the effectiveness of those
policies). The Company does not have any employees and the board
comprises non-executive directors. As an investment trust, its
activities do not have a direct impact on the environment. The
Company aims to minimise any detrimental effect that its actions
may have by adhering to applicable social legislation, and as a
result does not maintain specific policies in relation to these
matters.
The Company has no operations and therefore no
greenhouse gas emissions to report nor does it have responsibility
for any other emissions producing sources under the Companies Act
2006 (Strategic Report and Directors' Report) Regulations 2013,
including those within its underlying investment portfolio.
However, the Company believes that high standards of corporate
social responsibility such as the recycling of paper waste will
support its strategy and make good business sense.
In carrying out its investment activities and
in relationships with suppliers, the Company aims to conduct itself
responsibly, ethically and fairly.
Modern slavery
Due to the nature of the Company's business,
the board does not consider the Company to be directly within the
scope of modern slavery regulations. The board considers the
Company's supply chains, being with professional service providers
within the UK or the EU to be low risk in relation to this
matter.
Anti-bribery and corruption
It is the Company's policy to conduct its
business in an ethical manner. The Company takes a zero tolerance
approach to bribery and corruption and is committed to acting
professionally, fairly and with integrity in its business
dealings.
Principal Risks and
Uncertainties
The board has carried out a robust assessment
of its risks and controls as detailed below. The day-to-day risk
management functions of the Company have been delegated to Shard
Capital AIFM LLP (the "Manager"), which reports to the
board.
OperationaL Risks
Third party service providers
The Company has no employees and the directors
have all been appointed on a non-executive basis. Whilst the
Company has taken all reasonable steps to establish and maintain
adequate procedures, systems and controls to enable it to comply
with its obligations, the Company is reliant upon the performance
of third-party service providers for its executive function. In
particular, the Manager, Depositary, Administrator and Registrar
amongst others, will be performing services which are integral to
the day-to-day operation, including IT, of the Company.
The termination of service provision by any
service provider, or failure by any service provider to carry out
its obligations to the Company, or to carry out its obligations to
the Company in accordance with the terms of its appointment, could
have a material adverse effect on the Company's operations and its
ability to meet its investment objective.
Mitigation
Day-to-day oversight of third-party service
providers is exercised by the Manager and reported to the board on
a quarterly basis. As appropriate to the function being undertaken,
each of the service providers is subject to regular performance and
compliance monitoring. The performance of the Manager in its duties
to the Company is subject to ongoing review by the board on a
quarterly basis as well as formal annual review by the Company's
management engagement committee.
The appointment of each service provider is
governed by agreements which contain the ability to terminate each
of these counterparties with limited notice should they continually
or materially breach any of their obligations to the
Company.
Reliance on key individuals
The Company will rely on key individuals at
the Manager to identify and select investment opportunities and to
manage the day-to-day affairs of the Company. There can be no
assurance as to the continued service of these key individuals at
the Manager. The departure of key individuals from the Manager
without adequate replacement may have a material adverse effect on
the Company's business prospects and results of operations.
Accordingly, the ability of the Company to achieve its investment
objective depends heavily on the experience of the Manager's team,
and more generally on the ability of the Manager to attract and
retain suitable staff.
Mitigation
The interests of the Manager are closely
aligned with the performance of the Company through the management
and performance fee structures in place and direct investment by
certain key individuals of the Manager. Furthermore, investment
decisions are made by a team of professionals, mitigating the
impact loss of any single key professional within the Manager's
organisation. The performance of the Manager in its duties to the
Company is subject to ongoing review by the board as well as formal
annual review by the management engagement committee.
Fluctuations in the market price of issue
shares
The market price of the issued shares may
fluctuate widely in response to different factors and there can be
no assurance that the issued shares will be repurchased by the
Company even if they trade materially below their net asset value.
Similarly, the shares may trade at a premium to net asset value
whereby the shares can trade on the open market at a price that is
higher than the value of the underlying assets. There can be no
assurance, express or implied, that shareholders will receive back
the amount of their investment in the issued shares.
Mitigation
The Manager and the board closely monitor the
level of discount or premium at which the shares trade on the open
market. Subject to shareholders' approval, and compliance with the
relevant companies legislation, the Company may purchase the shares
in the market with the intention of enhancing the net asset value
per ordinary share, however there can be no assurance that any
purchases will take place or that any purchases will have the
effect of narrowing any discount to net asset value at which the
ordinary shares may trade. When the shares trade at a premium the
Company may issue shares to reduce the premium at which shares
trade. As at 31 March 2024, the shares were trading at a discount
to net asset value.
Investments
Achievement of the investment
objective
There can be no assurance that the Manager
will continue to be successful in implementing the Company's
investment objective.
Mitigation
The Company's investment decisions are
delegated to the Manager. Performance of the Company against its
investment objectives is closely monitored on an ongoing basis by
the Manager and the board and is reviewed in detail at each board
meeting. Any action required to mitigate underperformance is taken
as deemed appropriate by the Manager.
Borrowing
The Company may use borrowings in connection
with its investment activities including, where the Manager
believes that it is in the interests of shareholders to do so, for
the purposes of seeking to enhance investment returns. Such
borrowings may subject the Company to interest rate risk and
additional losses if the value of its investments falls. Whilst the
use of borrowings should enhance the net asset value of the issued
shares when the value of the Company's underlying assets is rising,
it will have the opposite effect where the underlying asset value
is falling. In addition, in the event that the Company's income
falls for whatever reason, the use of borrowings will increase the
impact of such a fall on the Company's return and accordingly will
have an adverse effect on the Company's ability to pay dividends to
shareholders.
Mitigation
The Manager and the board closely monitor the
level of gearing of the Company. The Company has a maximum
limitation on borrowings of 20% of net asset value (calculated at
the time of borrowing) which the Manager may affect at its
discretion. During the year ended 31 March 2019, the
Company entered into a loan facility agreement of £1,000,000 with
Shard Merchant Capital Limited. In both the years ended 31 March
2024 and 2023, the Company drew down £200,000 each year totalling
£400,000 of a drawdown on this loan facility agreement (see note 11
for further details).
Liquidity of investments
The Company expects to have a material level
of exposure to unquoted companies that are aligned with the
Company's strategy and that present opportunities to enhance the
Company's return on its investments. Such investments, by their
nature, involve a higher degree of valuation and performance
uncertainties and liquidity risks than investments in listed and
quoted securities and they may be more difficult to realise. The
illiquidity of such investments may make it difficult for the
Company to sell them if the need arises and may result in the
Company realising significantly less than the value at which it had
previously recorded such investments. Investments in unlisted
equity securities, by their nature, involve a higher degree of
valuation and performance uncertainties and liquidity risks than
investments in listed securities and therefore may be more
difficult to realise.
Mitigation
The Company has established investment
restrictions on the extent to which it can invest up to 15% of net
asset value in a single investment. However, this restriction does
not apply to investments in the Fund or any further Funds or
collective investment vehicles managed by third parties. Compliance
with these restrictions is monitored by the Manager and by the
board on an ongoing basis.
Regulations
Tax
Any changes in the Company's tax status or in
taxation legislation could affect the value of investments held by
the Company, affect the Company's ability to provide returns to
shareholders and affect the tax treatment for shareholders of their
investments in the Company.
Mitigation
The Company intends at all times to conduct
its affairs so as to enable it to qualify as an investment trust
for the purposes of Chapter 4 of Part 24 of the Corporation Tax Act
2010. Both the board and the Manager are aware of the requirements
which are to be fulfilled in any accounting period for the Company
to maintain its investment trust status. Adherence to the
conditions required to satisfy the investment trust criteria are
monitored by the compliance function of the Manager and reviewed by
the board on a regular basis.
Breach of applicable legislative
obligations
The Company and its third-party service
providers are subject to various legislation and regulations,
including, but not limited to The Data Protection Act 2018 and the
General Data Protection Regulation. Any breach of applicable
legislative obligations could have a negative impact on the Company
and impact returns to shareholders.
Mitigation
The Company engages only with third party
service providers which hold the appropriate regulatory approvals
for the function they are to perform, and can demonstrate that they
can adhere to the regulatory standards required of them. Each
appointment is governed by agreements which contain the ability to
terminate each of these counterparties with limited notice should
they continually or materially breach any of their legislative
obligations, or their obligations to the Company more broadly.
Additionally, each of the counterparties is subject to regular
performance and compliance monitoring by the Manager, as
appropriate to their function, to ensure that they are acting in
accordance with applicable regulations and are aware of any
upcoming regulatory changes which may affect the Company.
Performance of third party service providers is reported to the
board on a quarterly basis, whilst the performance of the Manager
in its duties to the Company is subject to ongoing review by the
board on a quarterly basis as well as formal annual review by the
management engagement committee.
Key Performance Indicators
The board monitors success in implementing the
Company's strategy against a range of key performance indicators
("KPIs"), which are viewed as significant measures of success over
the longer term. Although performance relative to the KPIs is also
monitored over shorter periods, it is success over the long-term
that is viewed as more important, given the inherent volatility of
short-term investment returns. The principal KPIs are set out
below:
|
KPI
|
Performance
|
|
|
Year ended
31 March
2024
|
Year ended
31 March
2023
|
|
Movement in net asset value per
ordinary share
|
Decreased by 31.12%
|
Decreased by 7.06%
|
|
Premium/discount (after deducting
borrowings at fair value)
|
Traded
at a discount of 10.94% at the year end
|
Traded
at a discount of 20.71% at the year end
|
|
Movement in the share
price
|
Decreased by 22.63%
|
Decreased by 6.86%
|
The Company does not currently follow any
benchmark. Similarly, the Fund does not follow any benchmark.
Accordingly, the portfolio of investments held by the Company and
the Fund will not mirror the stocks and weightings that constitute
any particular index or indices, which may lead to the Company's
shares failing to follow either the direction or extent of any
moves in the financial markets generally (which may or may not be
to the advantage of shareholders).
Promoting the success of the
Company
Under Section 172 of the Companies
Act 2006, the board has a duty to promote the long-term success of
the Company for the benefit of its shareholders as a whole and, in
doing so, have regard to the likely consequences of its decisions
in the long-term upon the Company's other stakeholders and the
environment.
The Company's objective is to achieve capital growth for investors through
exposure to early stage technology companies, with a focus on
software-centric businesses in its chosen target
markets.
The board believes that the values
of integrity, accountability and transparency form the basis of the
Company's corporate culture and promote good standards of
governance.
The board has identified the
Company's main stakeholders to be its shareholders, Investment
Manager and other key service providers. The board seeks to
understand the priorities of its stakeholders and engages with them
through the communication and governance processes that it has put
in place.
Shareholders
The board believes that
transparent communication with shareholders is important. In
addition to the Annual Report and the half-yearly report, the
Company publishes quarterly portfolio updates which are available
on the Company's website together with other information that the
board believes shareholders will find useful. The board welcomes
feedback from shareholders and the Investment Manager provides such
feedback to the board on a regular basis.
During the year, the Company
issued 405,128 new ordinary shares in response to investor demand.
The board believes that share issues are in the interests of
shareholders as a whole as they provide additional finance for
investment opportunities, enable the Company's fixed costs to be
spread over a wider base and provide a source of liquidity in the
Company's shares.
Investment Manager
The Investment Manager has a
fundamental role in promoting the long-term success of the Company.
The board regularly reviews the performance of the investment
portfolio at quarterly board meetings and performs a formal annual
evaluation of the performance of the Investment Manager. This
contact enables constructive regular dialogue between the
Investment Manager and the board.
Other key service providers
The board believes that strong
relationships with its other key service providers (Company
Secretary, Administrator, Depositary and Registrar) are also
important for the long-term success of the Company. There is
regular contact between the board and the Company's other key
service providers. The board performs an annual review of the
services provided by the Company Secretary, Administrator,
Depositary and Registrar to ensure that these are in line with the
Company's requirements.
Environmental, Social and Governance
("ESG")
The board and the Investment
Manager recognise the importance of the impact of the Company's
decisions and ESG factors are integrated in the investment
process.
Approval
The strategic report was approved by the board
of directors on 23 July 2024 and signed on its behalf
by:
Perry
Wilson
Chairman
5 Directors' Report
Board
of Directors
Perry Wilson
Chairman of the board and the
management engagement committee and a member of the audit
committee.
Perry Wilson (Chairman)
(independent)
Perry Wilson is a financial
services professional with over 25 years' experience in investment
banking and fund management, responsible for running portfolio risk
positions in global markets. He started his career in accountancy
before joining the asset trading group at Lazard in 1987, focusing
on illiquid credit and structured products and going on to become a
director of the bank.
In 2003, Mr. Wilson joined Argo
Capital as executive director, an AIM listed alternative investment
fund management firm and was part of a small team of portfolio
managers that oversaw the group's fiftyfold AUM growth to USD 1.3bn
at its height. After leaving Argo in 2010, Mr .Wilson joined
Integra Capital to implement a liquid credit strategy before
setting up a fixed income sales and trading operation for a Central
Asian investment bank, Visor Capital in 2013.
Since 2015, Mr. Wilson has been on
the board of a number of UK and offshore financial services firms
and investment funds, as independent non-executive director, and
also acted as chair of trustees for a UK pension plan, providing
corporate governance and oversight utilising his extensive
financial markets background and experience.
St. John Agnew
St. John Agnew
St. John trained as a solicitor
and was an in-house Commercial and Banking Counsel for TSB Bank.
His responsibilities included drafting and negotiating legal
documentation in relation to all bank lending and commercial
arrangements. This included many types of commercial contracts and
involved a close working relationship with the technology team who
required advice on a steady flow of technology
contracts.
St. John became an Investment
Manager in 2000 and set up a fund in the Cayman Islands in 2004
based on Technical Analysis which he successfully operated and
closed in late 2007. St. John continues to advise on investment and
is currently an Investment Manager registered with Credo Capital
with his own private clients.
St. John has also served as
Trustee on a Pension fund for a Charity and, using his legal and
investment knowledge, he helped to restructure the board to allow
it to recognise and meet its extensive ongoing Pension obligations.
He is also currently a non-executive director of a food company,
The Big Prawn Company, where he uses his knowledge and experience
to help guide this company.
gareth burchell
Gareth Burchell
Gareth Burchell began his career
in the insurance industry and spent three years at RBS Insurance
prior to beginning his career in investment advice and management.
Mr. Burchell is currently Head of Shard Capital Stockbrokers and
chairs an investment committee that specialises in providing
funding for both listed and unlisted small companies. Mr. Burchell
has had a focus on the small cap arena for 15 years and he and his
team have provided £100m+ of funding to 300+ companies. He has an
in-depth knowledge of the UK listing process of various small cap
exchanges.
Statutory Information
Board members, and directors' and
officers' insurance
The names and biographical details of the
board members who served on the board as at the year end can be
found on page 21.
During the year under review, the Company's
directors' and officers' liability insurance for its directors and
officers as permitted by section 233 of the Companies Act 2006 was
covered and maintained by the Manager.
Status of the Company
The Company is an investment company within
the meaning of section 833 of the Companies Act 2006.
The Company operates as an investment trust in
accordance with Chapter 4 of Part 24 of the Corporation Tax Act
2010 and the Investment Trust (Approved Company) (Tax) Regulations
2011. The Company has obtained its initial approval as an
investment trust from HM Revenue & Customs. In the opinion of
the directors, the Company has conducted its affairs since its
initial approval as an investment trust in order that it is able to
maintain its status as an investment trust.
The Company is an externally managed
closed-ended investment company with an unlimited life and has no
employees.
Internal controls and risk
management
Details of the Company's principal risks and
uncertainties can be found in the strategic report on pages 13 to
19 inclusive of details of the Company's internal controls. Details
of the Company's application of hedging arrangements, if any, are
set out on page 73 of the investment policy section of these
financial statements.
Share capital - voting and
dividend
As at 31 March 2024, the Company had 7,051,600
(2023: 6,646,472) ordinary shares in issue. There are no other
classes of shares in issue and no shares are held in
treasury.
The maximum number of shares which can be
admitted to trading on the London Stock Exchange ("LSE") without
the publication of a prospectus is 20% of the ordinary shares in
issue on a rolling 12 month basis at the time of admission of the
shares.
During the year under review a total of
405,128 (2023: 633,247) ordinary shares were issued as detailed
below:
|
Date
|
Shares issued
|
Price paid per share (pence,
sterling)
|
Discount to NAV (%) (1)
|
|
May 2023
|
200,000
|
100.0
|
16.9%
|
|
Sep 2023
|
205,128
|
97.5
|
18.6%
|
(1) Last published NAV at time of
issue.
As at 31 March 2024, there were 7,051,600
ordinary shares of 1p in issue. Since the year end, a further
275,862 ordinary shares have been issued.
The ordinary shares carry the right to receive
dividends and have one voting right per ordinary share. There are
no shares which carry specific rights with regard to the control of
the Company. The shares are freely transferable. There are no
restrictions or agreements between shareholders on the voting
rights of any of the ordinary shares or the transfer of
shares.
The Company has been incorporated with an
unlimited life.
On a winding-up or a return of capital by the
Company, the ordinary shareholders are entitled to the capital of
the Company.
No final dividend is being recommended. The
Company's policy is to pay dividends, if any, on an annual basis,
as set out in the Company's prospectus dated 17 November 2017 and
the supplementary prospectus dated 2 January 2018 (the
"Prospectus"). There were no dividends paid in respect of the year
ended 31 March 2024 (2023 - None).
The Company will pay out such dividends as are
required for it to maintain its investment trust status.
Substantial share
interests
The Company has received the following
notification in accordance with the Disclosure and Transparency
Rule 5.1.2R of an interest in the voting rights attaching to the
Company's issued share capital.
As at 31 March 2024, Pires Investments plc had
holds 1,500,000 ordinary shares in the Company, representing 21.27
% of the Company's ordinary shares in issue at 31 March
2024.
Independent auditor
The Company's independent auditor, PKF
Littlejohn LLP ("PKF"), was appointed by the members on 16 April
2018 and has expressed its willingness to continue to act as the
Company's independent auditor for the forthcoming financial year.
The audit committee has carefully considered the independent
auditor's appointment, as required in accordance with its terms of
reference, and, having regard to its effectiveness and the services
it has provided to the Company during the year under review, has
recommended to the board that the independent auditor be appointed
at the forthcoming Annual General Meeting ("AGM"). At the AGM
resolutions will be proposed for the appointment of the independent
auditor and to authorise the directors to agree its remuneration
for the forthcoming financial year. In reaching its decision, the
audit committee considered the points detailed on pages 33 to 35 of
the audit committee's report.
Audit information
As required
by section 418 of the
Companies Act
2006, the
directors who held
office at the date
of this
report each confirm that, so
far as they are aware,
there
is no
relevant audit
information of
which the Company's independent auditor is unaware and
each director has taken
all the
steps required
of a director to make
themselves aware
of any
relevant
audit
information and
to establish that
the Company's independent auditor
is aware of that information.
Articles of
Association
Any amendments to the
Company's
articles of association
must be
made by special resolution.
Going concern
The directors have reviewed the
financial projections of the Company from the date of this report,
which shows that the Company will be able to generate sufficient
cash flows in order to meet its liabilities as they fall due.
Accordingly, the directors are satisfied that the going concern
basis remains appropriate for the preparation of the financial
statements. The Company also has detailed policies and processes
for managing the risks, set out in the investment policy on
pages 71 to 73.
Viability statement
In accordance with the revised
Association of Investment Companies Code of Corporate Governance
published in February 2019 and revised UK Corporate Governance
Code, published by the Financial Reporting Council in July 2018,
the directors have assessed the prospects of the Company over a
three-year period ending 31 March 2027. The board believes this
period to be appropriate taking into account the current trading
position and the potential impact of the principal
risks that could affect the viability of the Company. As at 31
March 2024, the Company's cash less liabilities amounted to
(£420,344) which may pose a potential risk to the viability of the
Company.
Analysis to assess viability has focused on
the risks in delivery of the growth of the business and a series of
projections have been considered changing funding levels and the
performance of the assets acquired.
The analysis demonstrates that, the Company
would be able to withstand the impact of the risks identified.
Based on the robust assessment of the principal risks, prospects
and viability of the Company, the board confirms that they have
reasonable expectation that the Company will be able to continue in
operation and meet its liabilities as they fall due over the
three-year period ending 31 March 2027.
Management and
administration
Company Secretary
Apex Secretaries LLP (the "Company Secretary")
is the company secretary of the Company.
Administrator
Apex Fund Services (Ireland) Limited (the
"Administrator"), is the administrator of the Company. The
Administrator provides the day-to-day administration of the
Company. The Administrator is also responsible for the Company's
general administrative functions, such as the calculation of the
NAV and maintenance of the Company's accounting records.
Under the terms of the administration
agreement, the Administrator is entitled to an annual
administration fee equal to the greater of: (i) €28,000 per annum;
and (ii) an amount equal to 0.08% of the portion of NAV up to and
including €100 million, 0.06% of the portion of NAV between €100
million and €200 million and 0.05% of the portion of NAV above €200
million (exclusive of VAT and out-of-pocket expenses). The
Administrator is also entitled to reimbursement of all reasonable
out-of-pocket expenses incurred by it in connection with the
performance of its duties. The administration agreement can be
terminated by either party by providing 90 days' written
notice.
Manager
Shard Capital AIFM LLP (the "Manager"), a
UK-based company authorised and regulated by the Financial Conduct
Authority, is the Company's manager and alternative investment fund
manager (the "AIFM") for the purposes of the Alternative Investment
Fund Managers Directive ("AIFMD"). The Manager is responsible for
the discretionary management of the Company's assets and ensures
that these are valued appropriately in accordance with the relevant
regulations and guidance.
Under the terms of the management agreement,
the Manager is entitled to a management fee and a performance fee
together with reimbursement of reasonable expenses incurred by it
in the performance of its duties. From the period from first
admission, the management fee payable was based on 1.25% of the
NAV. The Manager is also entitled to receive a performance fee
equal to 15% of any excess returns over a high watermark, subject
to achieving a hurdle rate of 8% in respect of each performance
period. Further details on the management fee and the performance
fee can be found in note 4 to the financial statements. The
management agreement can be terminated by either party providing 12
months' written notice.
Depositary
The Company's depositary is INDOS Financial
Limited (the "Depositary"), a company authorised and regulated by
the Financial Conduct Authority. Under the terms of the depositary
services agreement the Depositary is entitled to a monthly
depositary fee equal to the greater of: (i) £2,000 and £2,917 per
month (depending on the activity of the Company); and (ii) an
amount equal to 1/12 of 0.03% of NAV (exclusive of VAT and
out-of-pocket expenses). The depositary services agreement can be
terminated by either party by providing 90 days' written
notice.
Change of control
There are no agreements which the Company is
party to that might be affected by a change of control of the
Company.
Subsequent events
Following the year end, the Company raised
gross proceeds of £200,000 by way of a private placing. The 275,862
ordinary shares were issued at 72.5p per share, representing the
closing mid-price on 10 June 2024. Total shares in admission of the
Company then amounted to 7,327,462.
Following the year end, Sure Ventures PLC was
informed that LandVault, a Sure Valley Ventures Fund 1 portfolio
company, has been acquired by Infinite Reality Labs for $450m. This
acquisition is a share for share transaction, with the acquirer
planning to list on the Nasdaq later this year. Sure Valley
Ventures Fund 1 has a 7% holding in LandVault and so this has
created a significant uplift in the valuation of this holding,
which will be reflected in the next quarterly NAV.
Future developments
Indications of likely future developments in
the business of the Company are set out in the strategic report on
pages 13 to 19.
By order of the board
Apex
Secretaries LLP
Company Secretary
Date: 23 July 2024
Corporate Governance
Statement
The corporate governance statement explains
how the board has sought to protect shareholders' interests by
protecting and enhancing shareholder value. The directors are
ultimately responsible for the stewardship of the Company and this
section explains how they have fulfilled their corporate governance
responsibilities. This corporate governance statement forms part of
the directors' report.
As set out in the Prospectus, the Company's
Specialist Fund Segment securities are not admitted to the Official
List of the UK Listing Authority. Therefore the Company has not
been required to satisfy the eligibility criteria for admission to
listing on the Official List and is not required to comply with the
Financial Conduct Authority's Listing Rules. The board is committed
to high standards of corporate governance and have adopted the UK
Corporate Governance Code (the "UK Code") published by the
Financial Reporting Council ("FRC"). The Disclosure Guidance and
Transparency Rules ("DTR") require companies to disclose how they
have applied the principles and provisions of the UK Code. A copy
of the UK Code is available from the website of the FRC
at:
https://www.frc.org.uk/directors/corporate-governance-and-stewardship/uk-corporate-governance-code.
The Association of Investment Companies
("AIC") has published its own code on corporate governance (the
"AIC Code"). The FRC has confirmed that AIC member companies who
report against the AIC Code will be meeting their obligations in
relation to the UK Code and the associated disclosure requirements
of the DTR. The AIC Code is available from the AIC's website at
www.theaic.co.uk.
The board has considered the principles and
provisions of the AIC Code. The AIC Code addresses the principles
and provisions set out in the UK Code, as well as setting out
additional principles and provisions on issues that are of specific
relevance to the Company.
The board considers that voluntarily reporting
against the principles and provisions of the AIC Code, which has
been endorsed by the FRC, provides more relevant information to
shareholders.
Statement of
compliance
The Company has complied with the
recommendations of the AIC Code and the relevant provisions of the
UK Code, except as set out below.
The UK Code includes provisions relating
to:
· The role
of the chief executive;
·
Executive directors' remuneration;
· The
appointment of a senior independent director; and
· The need
for an internal audit function.
The board considers these provisions are not
relevant to the Company, being an externally managed investment
company with no executive directors. In particular, all of the
Company's day-to-day management and administrative functions are
outsourced to third parties. As a result, the Company has no
executive directors, employees or internal operations. The Company
has therefore not reported further in respect of these
provisions.
In addition, the board does not, at present,
consider that separate nomination and remuneration committees would
be appropriate given the board's size, being three members in
total. Currently, decisions concerning the board's remuneration,
nomination and board appraisals are undertaken by the board as a
whole. However, the need for separate nomination and remuneration
committees and an internal audit function will be kept under
review.
The Board of
Directors
The board consists of three directors, all of
whom are non-executive directors. Biographies of the directors are
shown on page 21 and demonstrate the wide range of skills and
experience that they bring to the board. The directors possess
business and financial expertise relevant to the direction of the
Company and consider themselves to be committing sufficient time to
the Company's affairs.
None of the directors have a service contract
with the Company, nor are any such contracts proposed. Each
director has been appointed pursuant to a letter of appointment
entered into with the Company. The directors' appointment can be
terminated in accordance with the articles of association and
without compensation. There are no agreements between the Company
and any director which provide for compensation for loss of office
in the event that there is a change of control of the
Company.
Copies of the letters of appointment will be
available at the AGM.
The Chairman, Perry Wilson, is independent and
considers himself to have sufficient time to commit to the
Company's affairs. The Chairman's other commitments are detailed in
his biography on page 21.
The directors have determined that the size of
the Company's board does not warrant the appointment of a senior
independent director at this time. All of the directors are
available to address shareholder queries or engage in consultation
as required.
The operation of the
Board
The board of directors meets at least four
times a year and more often if required.
The table below sets out the directors'
attendance at board and audit committee meetings held in the
financial year ended 31 March 2024, against the number of meetings
each board or audit committee member was eligible to
attend.
|
Director
|
Board
|
Audit
Committee
|
Management
Engagement Committee
|
|
Perry
Wilson
|
5/5
|
3/3
|
1/1
|
|
Gareth
Burchell
|
5/5
|
-
|
-
|
|
St. John
Agnew
|
5/5
|
3/3
|
1/1
|
No individuals other than the committee or
board members are entitled to attend the relevant meetings unless
they have been invited to attend by the board or relevant
committee.
Directors are provided with a comprehensive
set of papers for each board or committee meeting, which equips
them with sufficient information to prepare for the
meetings.
The board has a formal schedule of matters
specifically reserved to it for decision to ensure effective
control of strategic, financial, operational and compliance issues,
which includes:
· The
Company's structure including share issues and setting a
discount/premium management programme;
· Risk
management;
·
Appointing the Manager and other service providers and
setting their fees;
·
Approving board changes including the audit committee and
management engagement committee;
·
Considering and authorising board conflicts of
interest;
·
Approving the Company's annual accounts and half yearly
accounts including accounting policies;
·
Approving the Company's level of gearing;
· The
approval of terms of reference and membership of board committees;
and
·
Approving liability insurance.
There is a procedure in place for the
directors to take independent professional advice at the expense of
the Company. No such professional advice has been taken by
the directors during the period under review.
The directors' and officers' liability
insurance covered by the Manager shall be maintained for the full
term of each director's appointment.
Division of Responsibilities
The Chairman leads the board and is
responsible for its overall effectiveness in directing the Company.
He ensures that the directors' views are taken into consideration
as part of the board's decision making process. The Chairman
promotes a culture of openness and debate at the Company's board
meetings and ensures that an appropriate amount of time is devoted
to each matter on the agenda for the board's consideration. He
ensures that the board receives accurate, timely and clear
information in order for the directors to discharge their duties.
The Chairman is also available to facilitate the board's relations
with shareholders and the Company's other stakeholders.
The Company has established audit and
management engagement committees which deal with matters determined
by terms of reference issued by the board.
The board ensures that an appropriate amount
of time is spent on board matters. The board receives papers ahead
of board meetings, which are reviewed by the directors to enable
them to participate effectively and efficiently at meetings. Other
information is received by the board between meetings and input is
provided by board members as required.
Independence of Directors
Both Perry Wilson and St. John Agnew were
considered, on appointment, to be independent of the Manager and
free from any business or other relationship that could materially
interfere with the exercise of his independent judgement and
remained so throughout the financial year under review.
Gareth Burchell is a member of the Manager's
investment committee and is therefore not considered to be
independent. Mr. Burchell is also currently Head of Shard Capital
Stockbrokers and chairs an investment committee that specialises in
providing funding for both listed and unlisted small companies. The
board believes that having Mr. Burchell on the board is beneficial
to the board as it provides the board with added insight on the
Company's investment portfolio. Mr. Burchell does not participate
in discussions on, or vote on, matters where there would be a
conflict or potential conflict of investment, including but not
limited, the evaluation of the Manager.
There are no other relationships or
circumstances relating to the Company that are likely to affect the
judgement of any of the directors.
Composition
The board believes that during the year ended
31 March 2024, its composition was appropriate for an investment
company of the Company's nature and size. Care will be taken at all
times to ensure that the board is composed of members who, as a
whole, have the required knowledge, abilities and experience to
properly fulfil their role and are sufficiently
independent.
Directors' interests
No director holds shares in the
Company.
Board evaluation
The most recent board evaluation was completed
in September 2022. The results of the evaluation were reviewed by
the Chairman and discussed with the board. The conclusions from the
board evaluation demonstrated that the directors showed the
necessary commitment for effective fulfilment of their
duties.
Board training and induction
The Company Secretary, the board or the
Manager upon request of the board or any director individually,
will offer induction training to new directors about the Company,
its key service providers, the directors' duties and obligations
and other matters as may be relevant from time to time.
The board members are encouraged to keep up to
date and attend training courses on matters which are directly
relevant to their involvement with the Company.
Board appointment, election and
tenure
The rules concerning the appointment and
replacement of directors are contained in the Company's articles of
association and the Companies Act 2006.
The board takes into account the
requirements of the AIC Code with regards to tenure. The board
recognises the benefits to the Company of having longer serving
directors together with progressive refreshment of the board. None
of the directors consider length of service as an impediment to
independence or good judgement but, if they felt that this had
become the case, the relevant director would stand down. The
Company was incorporated in June 2017, therefore no director has
served for more than nine years. The board is currently developing
a succession plan.
The directors of the Company and their
biographies are set out on page 21. At the forthcoming AGM, in
accordance with the AIC Code, all members of the board will put
themselves forward for re-election.
The board considers that all of the current
directors contribute effectively to the operation of the board and
the strategy of the Company. The board has considered each board
member's independence of the Company and the Manager. As such the
board believes that it is in the best interests of shareholders
that each of the directors be re-elected.
Basis of Directors'
appointment
Consideration is given to the recommendations
of the AIC Code on diversity. The board seeks to appoint new
directors on the basis of merit as a primary consideration, with
the aim of bringing an appropriate range of skills, diversity and
experience together.
Management agreement and continuing
appointment
Details of the Manager's agreement and fees
are set out in note 4 to the financial statements.
The board keeps the performance of the Manager
under continual review through the Company's management engagement
committee. The most recent evaluation of the Manager was completed
in September 2022, following which the board concluded that due to
its specialist knowledge of the sectors in which the Company
invests and the Company's performance to date, the continuing
appointment of the Manager is in the best interests of shareholders
as a whole.
Conflicts of interest
The articles of association provide that the
directors may authorise any actual or potential conflict of
interest that a director may have, with or without imposing any
conditions that they consider appropriate on the director.
Directors are not able to vote in respect of any contract,
arrangement or transaction in which they have a material interest,
and, in such circumstances, they are not counted in the quorum at
the relevant board meeting. A process has been developed to
identify any of the directors' potential or actual conflicts of
interest. This includes declaring any potential new conflicts
before the start of each board meeting.
Audit Committee
The board has delegated certain
responsibilities to its audit committee. The committee comprises
two or more independent directors. The Chairman of the board may be
a member of the committee and due to the size of the board, the
Chairman of the board, Perry Wilson acts as chairman of the audit
committee. The board has established formal terms of reference for
the audit committee which are available from the Company Secretary
upon request. An outline of the remit of the audit committee and
its activities during the year are set out below.
The audit committee is chaired by Perry Wilson
and meets at least twice a year. It is responsible for ensuring
that the financial performance of the Company is properly reported
and monitored and provides a forum through which the Company's
external auditor may report to the board. The audit committee
reviews and recommends to the board the annual and half-yearly
reports and financial statements, financial announcements, internal
control systems, risk metrics, decisions requiring a significant
element of judgement and procedures and accounting policies of the
Company.
Further details on the work of the audit
committee can be found in the report of the audit committee on
pages 33 to 35.
Management Engagement Committee
The Chairman of the Company acts as chairman
of the management engagement committee. The management engagement
committee meets once a year. Its principal duties are to formally
review the actions and judgements of the Manager, the terms of its
management agreement and to review the performance and services of
the Company's other key service providers. The committee reports to
the board on its proceedings after its meeting.
The most recent evaluation of the Manager and
other key service providers was completed in September
2022.
The terms of reference of the committee are
available from the Company Secretary.
Company secretary
The board has direct access to the advice and
services of the Company Secretary, which is responsible for
ensuring that the board and committee procedures are followed, and
that applicable rules and regulations are complied with. The
Company Secretary is also responsible for ensuring good information
flows between all parties.
Review of shareholder
profile
The board reviews reports provided by
qualified independent industry consultants and Shard Capital
Partners LLP on the Company's shareholder base and its underlying
beneficial owners. The Manager and Shard Capital Partners LLP
disclose any concerns raised by shareholders to the
board.
Stewardship responsibilities and
the use of voting rights
The FRC introduced a Stewardship Code which
sets out the responsibilities of institutional shareholders in
respect of investee companies. Under the Stewardship Code, Managers
should:
· Publicly
disclose their policy on how they will discharge their stewardship
responsibilities to their clients;
· Disclose
their policy on managing conflicts of interest;
· Monitor
their investee companies;
·
Establish clear guidelines on how they escalate
evaluation;
· Be
willing to act collectively with other investors where
appropriate;
· Have a
clear policy on proxy voting and disclose their voting record;
and
· Report
to clients.
The Company recognises that with respect to
its equity assets one of the important obligations that it has as a
shareholder is the right to vote on issues submitted to
shareholders. These issues may include the election of directors
and other important matters that affect the structure of the
investee company. The Manager acts on behalf of the Company in
these matters and will exercise its voting rights, supported by
independent providers, if considered appropriate.
Relations with
shareholders
The notice of the AGM will be sent out
separately in due course. The notice of the AGM, which is sent out
at least 21 clear days in advance of the AGM, sets out the business
of the meeting and any items not of an entirely routine nature is
explained in the directors' report. Separate resolutions are
proposed in respect of each substantive issue.
Any questions that shareholders wish to raise
at the AGM can be emailed to info@sureventuresplc.com and the board
and/or the Manager will respond as appropriate.
Proxy voting figures will be published on the
Company's website following the AGM.
The Manager holds regular discussions with
major shareholders, the feedback from which is provided to and
greatly valued by the board. The directors are available to enter
into dialogue and correspondence with shareholders regarding the
progress and performance of the Company. Further information about
the Company can be found on the Company's website http://www.sureventuresplc.com.
Internal control
review
The board has elected not to have an internal
audit function as the Company delegates its operations to
third-party service providers and does not employ any staff.
Instead it has been agreed that the Company will rely on the
internal controls which exist within its third-party
providers.
The Administrator, Depositary and Manager have
established internal control frameworks to provide reasonable
assurance on the effectiveness of the internal controls operated on
behalf of their clients. The Manager, the Administrator, the
Depositary and the Company Secretary will report on any breaches of
law or regulation, if and when they arise, periodically in
scheduled board reports. The audit committee considers annually
whether there is any need for an internal audit function, and it
has agreed that it is appropriate for the Company to rely on the
internal audit controls which exist within its third-party
providers.
The board keeps under review the effectiveness
of the Administrator and the Manager's systems of internal control
and risk management. During the year under review, the board has
not identified any significant failings or weaknesses in the
internal control systems of its service providers. Details of the
Company's principal risks and uncertainties can be found on pages
16 to 18 of the strategic report, together with an explanation of
the controls that have been established to mitigate each risk. The
risk matrix provides a basis for the audit committee and the board
to regularly monitor the effective operation of the controls and to
update the matrix when new risks are identified.
The system of internal control and risk
management is designed to meet the Company's particular needs and
the risks to which it is exposed. The board recognises that these
control systems can only be designed to manage, rather than
eliminate, the risk of failure to achieve business objectives and
to provide reasonable, but not absolute, assurance against material
misstatement or loss.
Alternative Investment Fund Management
Directive Disclosure
Quantitative remuneration disclosure
In accordance with 3.3.5 (5) of the Financial
Conduct Authority's Investment Funds Sourcebook ("FUND") and in
accordance with the Financial Conduct Authority's Finalised
guidance - General guidance on the AIFM Remuneration Code (SYSC
19B) (the "Guidelines"), dated January 2014, the total amount of
remuneration paid by or paid to Shard Capital AIFM LLP (the
"AIFM"), for the financial year ended 31 March 2024 in respect of
the Company was £138,646 (2023:
£149,907). The AIFM out of
its own resources decided to pay rebates out of the management fee.
For the financial year ended 31 March 2024, the Company incurred
rebate income from the AIFM of £88,646 (2023:
£99,907). There was no
performance fee payable in respect of the years ended 31 March 2024
or 31 March 2023. The AIFM does not consider that any individual
member of staff or partner of the AIFM has the ability to
materially impact the risk profile of the Company.
Other disclosures
The AIFMD requires that the AIFM ensures that
certain other matters are actioned and or reported to investors.
Each of these is set out below:
·
Provision and content of an annual report (FUND 3.3.2 and
3.3.5). The publication of the annual report and accounts of the
Company satisfies these requirements.
· Material
change of information. The AIFMD requires certain information to be
made available to investors in the Company before they invest and
requires that material changes to this information be disclosed in
the annual report.
Periodic disclosure (FUND 3.2.5 and
3.2.6)
There are no assets subject to special
arrangements due to their illiquid nature and no new arrangements
for the managing of the liquidity of the Company.
There is no change to the arrangements, as set
out in the Prospectus, for managing the Company's
liquidity.
The current risk profile of the Company is set
out in the strategic report, principal risks and uncertainties
section on pages 16 to 18 and in note 17 of these financial
statements.
The Company is permitted to be leveraged and
the table below sets out the current maximum permitted and actual
leverage.
|
As a percentage of net asset value
|
Gross
method
|
Commitment
method
|
|
Maximum level
of leverage
|
150%
|
150%
|
|
Leverage as at 31 March 2024
|
107%
|
108%
|
Other matters
The AIFM has confirmed that all required
reporting to the FCA has been undertaken in accordance with FUND
3.4.
Approval
This report was approved by the board of
directors on 23 July 2024.
On behalf of the board
Perry Wilson
Chairman
Report of the Audit
Committee
As Chairman of the audit committee I am
pleased to present the audit committee report for the year ended 31
March 2024.
Membership of the Audit
Committee
As the board is small with only three members,
St. John Agnew and Perry Wilson are both appointed members of the
audit committee. As chairman of the audit committee, I can confirm
that I have relevant financial experience to fulfil my obligations
in this capacity.
The role of the Audit
Committee
The role of the audit committee is defined in
its terms of reference, which can be obtained from the Company
Secretary.
In summary, the role of the audit committee
includes the following:
· To
monitor the financial reporting process;
· To
review and monitor the integrity of the half-year and annual
financial statements and review and challenge where necessary the
accounting policies and judgements of the Manager and the
Administrator;
· To
review the adequacy and effectiveness of the Company's internal
financial and internal control and risk management
systems;
· To make
recommendations to the board on the re-appointment or removal of
the external independent auditor and to approve its remuneration
and terms of engagement;
· To
review and monitor the external independent auditor's independence
and objectivity; and
· To
review and consider on an annual basis the need for an internal
audit function.
Matters considered during the year
The audit committee has met 3 times during the
year under review and considered the following items:
· The
Company's audit plan with the external auditor;
· The
policy on non-audit services; and
· The
dividend policy.
The audit committee also reviewed the
following items:
· Whether
there was a requirement for an internal audit function;
· The
Company's risk matrix and the internal controls implemented to
manage those risks; and
· The
appropriateness of the Company's accounting policies and whether
appropriate estimates and judgements have been made.
UK non-audit services
In relation to non-audit services, the audit
committee has reviewed and implemented a policy on the engagement
of the auditor to supply non-audit services and this is reviewed on
an annual basis. All requests or applications for other services to
be provided by the auditor are submitted to the audit committee and
will include a description of the services to be rendered and an
anticipated cost. The Company's policy follows the requirements of
the Financial Reporting Council's Revised Ethical Standard 2019.
The policy specifies a number of prohibited services which it is
not permitted for the auditor to provide under the revised Ethical
Standard.
For the year ended 31 March 2024, there were
no non-audit services rendered to the Company and none for the year
ended 31 March 2023.
The audit committee reviewed the level of
non-audit services and were satisfied that the auditors maintained
their independence.
Significant accounting matters
The audit committee met on 23 July 2024 to
review the report and accounts for the year to 31 March 2024. The
audit committee considered the following significant issues,
including principal risks and uncertainties in light of the
Company's activities and issues communicated by the auditors during
their review, all of which were satisfactorily
addressed:
|
Issues considered
|
How the issue was addressed
|
|
Retention of
investment trust status
|
The audit committee received assurance from the Company's Investment Manager that
the
Company
has remained compliant with the
requirements to maintain its investment trust status. The directors
regularly review the investments and their mix to ensure they
remain diversified, its retained income levels to ensure sufficient
distributions are made and the Company's shareholdings to determine
if the Company has become a close company.
|
|
Risk of misappropriation of assets
and ownership of investments
|
The audit committee reviews
reports
from its service
providers on key
controls over the assets of
the Company. Any significant issues are reported to the board
by the
Manager and/ or
the Company's Depositary. The Manager has put in place procedures to ensure that investments can only be made to the extent that the appropriate contractual and legal arrangements are in place to protect the
Company's assets.
The Company's Depositary issues a quarterly report on the status of
the assets to the directors for review.
|
|
The risk that
income
is overstated, incomplete or inaccurate through
failure to recognise proper income
entitlements
or to apply the appropriate accounting treatment for
recognition of income.
|
The board regularly reviews income forecasts.
The external audit includes checks on the completeness and accuracy
of income and also checks that this has been recognised in
accordance with stated accounting policies.
|
|
The risk that
valuation of the Investments held may not be
correct.
|
The audit committee receives assurance from the Company's Administrator and Manager that
the
Company's valuation
policy is followed at all times.
|
External independent auditor
The Company's external independent auditor,
PKF Littlejohn LLP ("PKF"), was appointed pursuant to the
engagement letter dated 18 March 2024. The audit committee intends
to re-tender within the timeframe set by the Financial Reporting
Council.
The individual at PKF who acts as the
Company's appointed audit partner is Azhar Rana, whose appointment
is reviewed annually. In accordance with UK legislation, the audit
partner must rotate at least every five years. As this is Azhar
Rana's second year as audit partner, he will be due to rotate out
of this role following the completion of the audit for the year
ended 31 March 2028.
The audit fees for the period under review can
be found in note 5 to the financial statements on page
56.
The audit committee monitors the auditor's
objectivity and independence on an ongoing basis. In determining
PKF's independence, the audit committee has assessed all
relationships with PKF and received confirmation from PKF that it
is independent and that no issues of conflicts arose during the
period. The audit committee is therefore satisfied that PKF is
independent.
The audit committee monitors and reviews the
effectiveness of the external audit process on an annual basis and
makes recommendations to the board on its re-appointment,
remuneration and terms of engagement of the auditor. The audit
committee has met with the audit partner and assessed PKF's
performance to date and to discuss the Company's audit and other
matters concerning the Company. I can confirm that Azhar Rana did
not raise any issues of concern during our meeting. The review has
involved an examination of the independent auditor's remuneration,
the quality of its work including the quality of the audit report,
the quality of the audit partner and audit team, the expertise of
the audit firm and the resources available to it, the
identification of audit risk, the planning and execution of the
audit and the terms of engagement.
The audit committee has direct access to the
Company's independent auditor and provides a forum through which
the independent auditor reports to the board. Representatives of
PKF attend the audit committee meetings at least twice
annually.
Internal audit
The audit committee believes that the Company
does not require an internal audit function, principally because
the Company delegates its day-to-day operations to third parties,
which are monitored by the audit committee, and which provide
control reports on their operations at least annually.
This report was approved by the audit committee
on 23 July 2024.
Perry Wilson
Chairman of
the Audit Committee
Statement of Directors'
Responsibilities
The directors are responsible for preparing
the annual report, the directors' remuneration report and the
financial statements in accordance with applicable law and
regulations.
Applicable law requires the directors to
prepare financial statements for each financial year. As such the
directors have prepared the financial statements in accordance with
international accounting standards in conformity with the
requirements of the Companies Act 2006. The directors must not
approve the financial statements unless they are satisfied that
they give a true and fair view of the state of affairs of the
Company and of the profit or loss of the Company for that year. In
preparing these financial statements, the directors are required
to:
· select
suitable accounting policies and then apply them
consistently;
· make
judgements and accounting estimates that are reasonable and
prudent;
· state
whether applicable international accounting standards have been
followed, subject to any material departures disclosed and
explained in the financial statements; and
· prepare
the financial statements on the going concern basis unless it is
inappropriate to presume that the Company will continue in
business.
The directors are responsible for keeping
adequate accounting records that are sufficient to show and explain
the Company's transactions and disclose with reasonable accuracy at
any time the financial position of the Company and enable them to
ensure that the financial statements and the directors'
remuneration report comply with the Companies Act 2006. They are
also responsible for safeguarding the assets of the Company and
hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
The directors are responsible for the
maintenance and integrity of the Company's website. Legislation in
the United Kingdom governing the preparation and dissemination of
financial statements may differ from legislation in other
jurisdictions.
The directors consider that the annual report
and financial statements, taken as a whole, is fair, balanced and
understandable and provides the information necessary for
shareholders to assess the Company's performance, business model
and strategy.
Each of the directors, whose names and
functions are listed in the directors' report, confirms that, to
the best of their knowledge:
· the
financial statements, which have been prepared in accordance with
international accounting standards in conformity with the
requirements of the Companies Act 2006, give a true and fair view
of the assets, liabilities, financial position and profit of the
Company;
· the
strategic report includes a fair review of the development and
performance of the business and the position of the Company,
together with a description of the principal risks and
uncertainties that it faces;
· so far
as the director is aware, there is no relevant audit information of
which the Company's independent auditor is unaware; and
· they
have taken all the steps that they ought to have taken as a
director in order to make themselves aware of any relevant audit
information and to establish that the Company's independent auditor
is aware of that information.
Directors' Remuneration Report
(Unaudited)
Statement from the Chairman
I am pleased to present the directors'
remuneration report for the year ended 31 March 2024, prepared in
accordance with The Large and Medium-sized Companies and Groups
(Accounts and Reports) (Amendment) Regulations 2013 and the
Companies Act 2006. The Company's Independent Auditor is required
to verify certain information within this report subject to
statutory audit by the Companies Act 2006.
We are required to seek shareholder approval
of the directors' remuneration policy at least every third year and
the remuneration report annually. Any changes to the directors'
remuneration policy will require shareholder approval. The
Company's remuneration policy is set out below and is unchanged
since it was last approved by shareholders at the AGM held in
September 2021. An ordinary resolution to approve the directors'
remuneration policy will be put to shareholders at the upcoming
AGM. At the AGM, shareholders will also be asked to consider an
advisory resolution on the contents of the directors' remuneration
report.
As at 31 March 2024, the board comprised three
non-executive directors, two of whom are independent of the
Manager.
Given the size of the board, and as the
Company has no employees, it is not considered appropriate for the
Company to establish separate remuneration and nomination
committees. It is, therefore, the Company's practice for the board
to consider and approve directors' remuneration. Post the Company's
incorporation, Directors' fees are set at the rate of £26,100 (31
March 2023: £26,100) for Perry Wilson and £26,100 (31 March 2023:
£26,100) for St. John Agnew (inclusive of National Insurance
Contributions). Prior to the Company's incorporation Directors'
fees were set at the rate of £24,000 per director per annum for
Perry Wilson. Gareth Burchell has agreed to waive his director's
fee.
As the board's fees were considered prior to
its listing as an investment company, the appointment of external
remuneration consultants was not considered necessary. Furthermore,
the board took the decision not to revise the board's fees because
they did not feel it was appropriate, given the Company's short
existence. Many parts of the Large and Medium-sized Companies and
Groups (Accounts and Reports) (Amendment) Regulations 2013 do not
apply to the Company as the board is comprised entirely of
non-executive directors and the Company has no
employees.
Directors' remuneration
policy
The remuneration policy was approved at the
Company's AGM held on 15 September 2021, with all shareholders
present voting in favour of the resolution on a show of
hands.
The maximum fees for the board as a whole are
limited by the Company's Articles of Association to £300,000 per
annum. Subject to this limit, the board's policy is that
remuneration of non-executive directors should reflect the
experience of the board member and the time commitment required by
board members to carry out their duties, and is determined with
reference to the appointment of directors of similar investment
companies. The level of remuneration has been set with the aim of
promoting the future success of the Company. With this in mind the
board considers remuneration in order to attract individuals of a
calibre appropriate to promote the long-term success of the Company
and to reflect the specific circumstances of the Company and its
field of investment, the duties and responsibilities of the
directors and the value and amount of time commitment required of
directors to the Company's affairs.
Due regard is taken of the board's requirement
to attract and retain individuals with suitable knowledge and
experience and the role that the individual directors fulfil. There
are no specific performance-related conditions attached to the
remuneration of the board and the board members are not eligible
for bonuses, pension benefits, share options, long-term incentive
schemes or other non-cash benefits or taxable expenses. No other
payments are made to directors other than reasonable out-of-pocket
expenses which have been incurred as a result of attending to the
affairs of the Company.
In addition to the board's remuneration, board
members are entitled to such fees as they may determine in respect
of any extra or special services performed by them, having been
called upon to do so. Such fees would only be incurred in
exceptional circumstances. An example of such a circumstance would
be if the Company was to undertake a corporate action, which would
require the board to dedicate additional time to review associated
documents and to attend additional meetings. Such fees would be
determined at the board's absolute discretion and would be set at a
similar rate to other comparable investment companies who have
undertaken equivalent activities. The fees would be set with the
Company's long-term success in mind and the interests of the
Company's members as a whole would be considered prior to the
setting of such fees.
The directors are entitled to be paid all
expenses properly incurred by them in attending meetings with
shareholders or other directors or otherwise in connection with the
discharge of their duties as directors. Shareholders have the
opportunity to express their views in respect of directors'
remuneration at the Company's AGM. The Company has not sought
shareholder views on its remuneration policy. Any comment
volunteered by shareholders on the remuneration policy will be
carefully considered and appropriate action taken. No
communications have been received from shareholders on the
directors' remuneration policy.
The directors' remuneration policy and its
implementation are reviewed by the board as a whole on an annual
basis. Directors do not vote on their own fees. Reviews are based
on third parties' information on the fees of other similar
investment trusts.
None of the directors have a service contract
with the Company, nor are any such contracts proposed. Instead,
directors are appointed pursuant to a letter of appointment entered
into with the Company. There is no notice period specified in the
letters of appointment or articles of association for the removal
of directors. Directors are not appointed for a specific term.
Copies of the directors' letters of appointment are available at
each of the Company's AGMs.
The directors are not entitled to exit
payments and are not provided with any compensation for loss of
office.
As with most investment trusts there is no
chief executive officer and no employees. The directors'
remuneration policy will apply to new board members, who will be
paid the equivalent amount of fees as current board members holding
similar roles.
Voting at 15 September
2021
As stated above an ordinary resolution for the
approval of the proposed directors' remuneration policy was last
approved by shareholders at the AGM held in September
2021.
The directors' remuneration report, including
the implementation of the directors' remuneration policy, is
subject to an annual advisory vote via an ordinary resolution. An
advisory vote is a non-binding resolution. At the meeting of the
Company held on 15 September 2021, the vote to approve the
directors' remuneration report was passed with all shareholders
presented voted in favour of the relation by a show of hand and the
resolution was passed.
Directors' fees
Single total aggregate directors' remuneration
(exclusive of National Insurance Contributions) for the year under
review was £48,000 (2023: £48,000). The directors who served during
the year under review received the following emoluments:
|
Director
|
Fees paid during
the
year under review
(1 April 2023 to
31 March
2024)
|
Taxable
benefits
|
Non-taxable
benefits
|
Total year to
31 March 2024
|
|
St.
John Agnew
|
£24,000
|
£-
|
£-
|
£24,000
|
|
Perry Wilson
(Chairperson)
|
£24,000
|
£-
|
£-
|
£24,000
|
|
Total
|
£48,000
|
£-
|
£-
|
£48,000
|
|
Director
|
Fees paid during
the
year under review
(1 April 2022 to
31 March
2023)
|
Taxable
benefits
|
Non-taxable
benefits
|
Total year to
31 March 2023
|
|
St.
John Agnew
|
£24,000
|
£-
|
£-
|
£24,000
|
|
Perry Wilson
(Chairperson)
|
£24,000
|
£-
|
£-
|
£24,000
|
|
Total
|
£48,000
|
£-
|
£-
|
£48,000
|
No payments were made to past directors for
loss of office. In the absence of further major increases in the
workload and responsibility involved, the board does not expect
fees to increase significantly over the next three years. The
overall remuneration of each director will continue to be monitored
by the board, taking into account those matters referred to in the
annual statement above. The Company did not pay any other benefits
including bonuses, pension benefits, share options, long-term
incentive schemes or other non-cash benefits or taxable
benefits.
The Company has not made any loans to the
directors, nor has it ever provided any guarantees for the benefit
of any director or the directors collectively nor does it intend
to.
Company performance
The board is responsible for the Company's
investment strategy and performance, although day-to-day management
of the Company's affairs, including the management of the Company's
portfolio, has been delegated to third-party service providers. An
explanation of the performance of the Company is given in the
Chairman's statement and the Investment Manager's report on pages 4
and 12, respectively.
Expenditure by the Company on
Directors' remuneration compared with distributions to
shareholders
The following table is provided in accordance
with The Large and Medium-sized Companies and Groups (Accounts and
Reports) (Amendment) Regulations 2013 which sets out the relative
importance of spend on pay in respect of the year ended 31 March
2024. The table shows the remuneration paid to directors for the
year under review, compared to the distribution payments to
shareholders.
|
|
Year from
1 April 2023 to 31 March 2024
|
|
Total remuneration paid to directors
|
£48,000
|
|
Shareholder distribution - dividends or share
buybacks
|
£-
|
|
|
Year from
1 April 2022 to 31 March 2023
|
|
Total remuneration paid to directors
|
£48,000
|
|
Shareholder distribution - dividends or share
buybacks
|
£-
|
Directors' interests
The Company does not have any
requirement for any director to own shares in the
Company.
As at 31 March 2024, the directors
do not hold shares in the Company.
There have been no changes to any
holdings between 31 March 2024 and the date of this annual
report.
The annual report on remuneration was approved
by the board on 23 July 2024 and signed on its behalf
by:
Perry
Wilson
Chairman
6 Independent Auditor's
Report
INDEPENDENT AUDITOR'S REPORT TO THE
MEMBERS OF SURE VENTURES PLC
Opinion
We have audited the financial statements of
Sure Ventures plc (the 'company') for the year ended 31 March 2024
which comprise the Income Statement, the Statement of Financial
Position, the Statement of Changes in Equity, the Statement of Cash
Flows and notes to the financial statements, including significant
accounting policies. The financial reporting framework that has
been applied in their preparation is applicable law and UK-adopted
international accounting standards.
In our opinion, the financial
statements:
· give a true and
fair view of the state of the company's affairs as at 31 March 2024
and of its loss for the year then ended;
· have been
properly prepared in accordance with UK-adopted international
accounting standards; and
· have been
prepared in accordance with the requirements of the Companies Act
2006.
Basis for
opinion
We conducted our audit in accordance with
International Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are further
described in the Auditor's responsibilities for the audit of the
financial statements section of our report. We are independent of
the company in accordance with the ethical requirements that are
relevant to our audit of the financial statements in the UK,
including the FRC's Ethical Standard as applied to listed public
interest entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe
that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Conclusions
relating to going concern
In auditing the financial statements, we have
concluded that the directors' use of the going concern basis of
accounting in the preparation of the financial statements is
appropriate. Our evaluation of the directors' assessment of the
company's ability to continue to adopt the going concern basis of
accounting included:
· Reviewing and
challenging management's assessment of going concern. Our review
focused on the levels of expenditure and anticipated investor
commitments over the twelve months following the approval of the
financial statements and whether the directors had demonstrated
that the company would have sufficient funds available to meet
these obligations;
· Reviewing the
impact of external factors such as the Russia-Ukraine crisis and
the impact of rising inflation, and we have not noted any
significant impact on the business to date;
· Evaluating and
assessing whether all relevant information, based on our knowledge
of the company and the sector, and factors impacting the sector,
was included in management's assessment of going concern;
and
· Reviewing the
company's ongoing maintenance of its investment trust status, in
particular the company's compliance with the close company
requirements per The Investment Trust (Approved Company) (Tax)
Regulations 2011.
Based on the work we have performed, we have
not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant
doubt on the company's ability to continue as a going concern for a
period of at least twelve months from when the financial statements
are authorised for issue.
In relation to the entity's reporting on how
they have applied the UK Corporate Governance Code, we have nothing
material to add or draw attention to in relation to the directors'
statement in the financial statements about whether the directors
considered it appropriate to adopt the going concern basis of
accounting.
Our responsibilities and the
responsibilities of the directors with respect to going concern are
described in the relevant sections of this report.
Our
application of materiality
We define materiality as the magnitude of
misstatement, including omission, either individually or in
aggregate, that makes it probable that the economic decisions of a
reasonably knowledgeable person would be changed or influenced.
Importantly, misstatements below this level will not necessarily be
evaluated as immaterial as we also take account of the nature of
identified misstatements, and the particular circumstance of their
occurrence, when evaluating their effect on the financial
statements. We use materiality both in planning the scope of our
audit work and in evaluating the results of our work.
Based on our professional judgement, we
determine materiality for the financial statements as a whole as
follows:
|
|
Year ended 31
March 2024
|
Year ended 31
March 2023
|
|
Materiality
|
£122,000
|
£79,000
|
|
Basis for
determining materiality
|
Materiality was determined on the basis of 2%
of net assets in 2024 and 1% of net assets in 2023.
|
|
Rationale for
the benchmark applied
|
In both years, net assets was the benchmark
for materiality given the nature of the business, which is asset
focused. The percentage applied to the benchmark was increased from
1% to 2% due to the investments and related balances being tested
in full and the remaining areas of the financial statements being
comparatively low risk.
|
We also determine a level of performance
materiality which we use to assess the extent of testing needed to
reduce to an acceptably low level, the probability that the
aggregate of uncorrected and undetected misstatements exceeds
materiality for the financial statements as a whole. Performance
materiality is set based on the materiality as adjusted for the
judgements made as to the entity risk and our evaluation of the
specific risk of each audit area having regards to the internal
control environment. In this respect, performance materiality was
set to 70% of the above materiality, to £85,400 (2023:
£55,300).
We agreed with the Audit Committee that we
would report audit differences in excess of £6,100 (2023: £3,950)
as well as differences below that threshold that, in our view,
warranted reporting on qualitative grounds.
Our approach
to the audit
Our audit approach was developed by updating
our understanding of the company's activities and the overall
control environment. Based on this understanding, we assessed those
aspects of the company's transactions and balances which were most
likely to give rise to a material misstatement and were most
susceptible to irregularities including fraud or error. We looked
at areas involving significant accounting estimates and judgement
by the directors, being the valuation of investments held at fair
value through profit or loss, as detailed within our Key Audit
Matter, and considered future events that are inherently uncertain.
We also addressed the risk of management override of internal
controls, including evaluating whether there was evidence of bias
by the directors that represented a risk of material misstatement
due to fraud. We identified what we considered to be key audit
matters in the next section and planned our audit approach
accordingly.
Key audit
matters
Key audit matters are those matters that, in
our professional judgment, were of most significance in our audit
of the financial statements of the current period and include the
most significant assessed risks of material misstatement (whether
or not due to fraud) we identified, including those which had the
greatest effect on: the overall audit strategy, the allocation of
resources in the audit; and directing the efforts of the engagement
team. These matters were addressed in the context of our audit of
the financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these
matters.
|
Key Audit Matter
|
How our scope addressed this matter
|
|
The valuation of investments held at fair value through profit
or loss (Note 9)
|
|
|
The valuation
of investments at 31 March 2024 was £6,236,446 (2023: £8,196,153)
consisting of a portfolio of listed, unlisted and fund
investments.
The valuation
of the assets held in the investment portfolio is the key driver of
the company's net asset value. Incorrect investment valuations
could materially affect the overall investment portfolio valuation
and subsequently the return generated for the
shareholders.
The
investments are recorded at fair value through profit or loss. The
fair value is largely driven by the audited Net Asset Value ('NAV')
of the investee Fund's portfolio.
The Investee
Fund has holdings in private equity companies, being level 3
investments (as defined by IFRS 13 Fair Value Measurement).
As the
investments are material to the overall performance of the company
and significant estimates and judgement is applied in valuing
these, there is a risk that the underlying investments are
inappropriately valued and as such the valuation of investments is
deemed to be a key audit matter.
|
Our work in this area included:
· Understanding and evaluating the design and implementation of
controls in place over the valuation of investments;
· Updating our understanding of the
valuation process applied by the company;
· Agreeing the value of the company's
investments in the funds to the audited financial statements of the
funds for the year ended 31 March 2024;
· Reviewing the valuation methodology
applied for each investment and considering whether it was
appropriate based on the investment's individual circumstances and
not inconsistent with observed industry best practice and the
provisions of the International Private Equity and Venture Capital
Valuation Guidelines;
· Agreeing key inputs which drive the
overall valuation to source documentation; and
· Considering the adequacy,
appropriateness and relevance of disclosures in accordance with
IFRS 9 Financial Instruments and
IFRS 13.
Based on the procedures performed, we
concluded that the fair values attributable to the company's
investments were reasonable.
|
Other
information
The other information comprises the
information included in the annual report, other than the financial
statements and our auditor's report thereon. The directors are
responsible for the other information contained within the annual
report. Our opinion on the financial statements does not cover the
other information and, except to the extent otherwise explicitly
stated in our report, we do not express any form of assurance
conclusion thereon. Our responsibility is to read the other
information and, in doing so, consider whether the other
information is materially inconsistent with the financial
statements or our knowledge obtained in the course of the audit, or
otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are
required to determine whether this gives rise to a material
misstatement in the financial statements themselves. If, based on
the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report
that fact.
We have nothing to report in this
regard.
Opinions on
other matters prescribed by the Companies Act
2006
In our opinion, based on the work undertaken
in the course of the audit:
· the
information given in the strategic report and the directors' report
for the financial year for which the financial statements are
prepared is consistent with the financial statements;
and
· the strategic report and the
directors' report have been prepared in accordance with applicable
legal requirements.
Matters on
which we are required to report by exception
In the light of the knowledge and
understanding of the company and its environment obtained in the
course of the audit, we have not identified material misstatements
in the strategic report or the directors' report.
We have nothing to report in respect of the
following matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
· adequate accounting records have not been kept, or returns
adequate for our audit have not been received from branches not
visited by us; or
· the
financial statements are not in agreement with the accounting
records and returns; or
· certain disclosures of directors' remuneration specified by
law are not made; or
· we
have not received all the information and explanations we require
for our audit.
Corporate
governance statement
We have reviewed the directors' statement in
relation to going concern, longer-term viability and that part of
the Corporate Governance Statement relating to the company's
compliance with the provisions of the UK Corporate Governance
Code.
Based on the work undertaken as part of our
audit, we have concluded that each of the following elements of the
Corporate Governance Statement is materially consistent with the
financial statements or our knowledge obtained during the
audit:
· Directors' statement with regards the
appropriateness of adopting the going concern basis of accounting
and any material uncertainties identified set out on page
23;
· Directors' explanation as to their
assessment of the entity's prospects, the period this assessment
covers and why the period is appropriate set out on page
24;
· Directors' statement on whether they
have a reasonable expectation that the company will be able to
continue in operation and meet its
liabilities set out on page 24;
· Directors' statement that they
consider the annual report and the financial statements, taken as a
whole, to be fair, balanced and understandable set out on page
36;
· Board's confirmation that it has
carried out a robust assessment of the emerging and principal risks
set out on page 16;
· The section of the annual report that
describes the review of effectiveness of risk management and
internal control systems set out on page
31; and
· The section describing the work of the
Audit Committee set out on page 33.
Responsibilities of
directors
As explained more fully in the Statement of
Directors' Responsibilities, the directors are responsible for the
preparation of the financial statements and for being satisfied
that they give a true and fair view, and for such internal control
as the directors determine is necessary to enable the preparation
of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the
directors are responsible for assessing the company's ability to
continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the
company or to cease operations, or have no realistic alternative
but to do so.
Auditor's
responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable
assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and
to issue an auditor's report that includes our opinion. Reasonable
assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect
a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these
financial statements.
Irregularities, including fraud, are instances
of non-compliance with laws and regulations. We design procedures
in line with our responsibilities, outlined above, to detect
material misstatements in respect of irregularities, including
fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
· We
updated our understanding of the company and the sector in which it
operates to identify laws and regulations that could reasonably be
expected to have a direct effect on the financial statements. We
obtained our understanding in this regard through discussions with
management, industry research, application of cumulative audit
knowledge and experience of listed entities and the investment
trust sector.
· We
determined the principal laws and regulations relevant to the
company in this regard to be those arising from the Companies Act
2006, UK-adopted international accounting standards, Financial
Conduct Authority (FCA) Rules, UK-tax law including section 1158 of
the Corporation Tax Act 2010 covering the company's qualification
as an investment trust and The Investment Trust (Approved Company)
(Tax) Regulations 2011, and the UK Corporate Governance
Code.
· We
designed our audit procedures to ensure the audit team considered
whether there were any indications of non-compliance by the company
with those laws and regulations. These procedures included, but
were not limited to:
o reviewing the financial
statements disclosures and testing to supporting documentation to
assess compliance with the relevant laws and regulations listed
above;
o using appropriate
checklists and application of cumulative audit knowledge and
experience of the sector to assess compliance with the relevant
laws and regulations listed above;
o reviewing minutes of
meetings of the Board and the Audit Committee;
o reviewing Regulatory
News Service (RNS) announcements; and
o reviewing legal and
regulatory correspondence.
All engagement team members were briefed on
relevant laws and regulations and potential fraud risks at the
planning stage of the audit and reconsidered these throughout the
audit and at the completion stage of the audit However, the primary
responsibility for the prevention and detection of fraud rests with
those charged with governance of the company.
· We
also identified the risks of material misstatement of the financial
statements due to fraud. We considered, in addition to the
non-rebuttable presumption of a risk of fraud arising from
management override of controls, that the potential for management
bias which could materially impact the financial statements existed
in the valuation of the investments held at fair value through
profit or loss. The key audit matters section of this report
details the procedures used in auditing the fair value of
investments.
· As in
all of our audits, we addressed the risk of fraud arising from
management override of controls by performing audit procedures
which included, but were not limited to: the testing of
journals; reviewing accounting estimates for evidence of
bias; and evaluating the business rationale of any significant
transactions that are unusual or outside the normal course of
business.
Because of the inherent limitations of an
audit, there is a risk that we will not detect all irregularities,
including those leading to a material misstatement in the financial
statements or non-compliance with regulation. This risk increases
the more that compliance with a law or regulation is removed from
the events and transactions reflected in the financial statements,
as we will be less likely to become aware of instances of
non-compliance. The risk is also greater regarding irregularities
occurring due to fraud rather than error, as fraud involves
intentional concealment, forgery, collusion, omission or
misrepresentation.
A further description of our responsibilities
for the audit of the financial statements is located on the
Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor's report.
Other matters
which we are required to address
We were appointed by the Audit Committee on 16
April 2018 to audit the financial statements for the period ended
31 March 2018 and subsequent financial periods. Our total
uninterrupted period of engagement is seven years, covering the
periods ended 31 March 2018 to 31 March 2024.
The non-audit services prohibited by the FRC's
Ethical Standard were not provided to the company and we remain
independent of the company in conducting our audit.
Our audit opinion is consistent with the
additional report to the Audit Committee.
Use of our
report
This report is made solely to the company's
members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we
might state to the company's members those matters we are required
to state to them in an auditor's report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone, other than the company and the company's
members as a body, for our audit work, for this report, or for the
opinions we have formed.
Azhar Rana
(Senior Statutory Auditor)
15 Westferry Circus
For and on
behalf of PKF Littlejohn LLP
Canary Wharf
Statutory
Auditor
London E14 4HD
23 July 2024
7 Financial Statements
Income Statement
For the year ended 31 March 2024
|
|
|
2024
|
2023
|
|
|
Note
|
Revenue
£
|
Capital
£
|
Total
£
|
Revenue
£
|
Capital
£
|
Total
£
|
|
Income
|
|
|
|
|
|
|
|
|
Loss on disposal of investments
|
|
-
|
(271,039)
|
(271,039)
|
-
|
-
|
-
|
|
Other net changes in fair value on financial
assets at fair value through profit or loss
|
|
-
|
(1,887,051)
|
(1,887,051)
|
-
|
(100,248)
|
(100,248)
|
|
Rebate management fee
|
|
88,646
|
-
|
88,646
|
99,907
|
-
|
99,907
|
|
Total net
income/(loss)
|
|
88,646
|
(2,158,090)
|
(2,069,444)
|
99,907
|
(100,248)
|
(341)
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
Management fee
|
4
|
(138,646)
|
-
|
(138,646)
|
(149,907)
|
-
|
(149,907)
|
|
Custodian, secretarial and administration
fees
|
|
(116,379)
|
-
|
(116,379)
|
(110,274)
|
-
|
(110,274)
|
|
Other expenses
|
5
|
(179,561)
|
-
|
(179,561)
|
(161,958)
|
-
|
(161,958)
|
|
Total
operating expenses
|
|
(434,586)
|
-
|
(434,586)
|
(422,139)
|
-
|
(422,139)
|
|
Interest expense
|
6
|
(22,448)
|
-
|
(22,448)
|
(7,158)
|
-
|
(7,158)
|
|
|
|
|
|
|
|
|
|
|
Loss before taxation and after finance
costs
|
|
(368,388)
|
(2,158,090)
|
(2,526,478)
|
(329,390)
|
(100,248)
|
(429,638)
|
|
Taxation
|
7
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Loss after taxation
|
|
(368,388)
|
(2,158,090)
|
(2,526,478)
|
(329,390)
|
(100,248)
|
(429,638)
|
|
|
|
|
|
|
|
|
|
|
Deficit per share
|
8
|
(5.31)
|
(31.10)
|
(36.41)
|
(5.14)
|
(1.56)
|
(6.70)
|
The total column of this statement represents
the income statement prepared in accordance with international
accounting standards in conformity with the requirements of the
Companies Act 2006. The supplementary revenue return and capital
return columns are both prepared under guidance issued by the
Association of Investment Companies. All items in the above
statement derive from continuing operations.
The Company does not have any income or
expense that is not included in the income statement for the year.
Accordingly, the net loss for the year is also the total
comprehensive income for the year, as defined in IAS 1
(revised).
The notes on pages 52 to 65 form an integral
part of the financial statements.
Statement of Financial
Position
As at 31 March
2024
Company No. 10829500
|
|
Note
|
31 March 2024
£
|
31 March 2023
£
|
|
Non - current assets
|
|
|
|
|
Investments held at fair value through profit
or loss
|
9
|
6,236,446
|
8,196,153
|
|
|
|
6,236,446
|
8,196,153
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
Receivables
|
10
|
8,527
|
2,240
|
|
Cash and cash equivalents
|
|
65,209
|
36,697
|
|
|
|
73,736
|
38,937
|
|
|
|
|
|
|
Total assets
|
|
6,310,182
|
8,235,090
|
|
|
|
|
|
|
Non - current
liabilities
|
|
|
|
|
Interest payable
|
11
|
(29,238)
|
(7,145)
|
|
Loan payable
|
11
|
(400,000)
|
(200,000)
|
|
|
|
(429,238)
|
(207,145)
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
Other payables
|
12
|
(61,214)
|
(64,738)
|
|
|
|
(61,214)
|
(64,738)
|
|
|
|
|
|
|
Total assets less current
liabilities
|
|
6,248,968
|
8,170,352
|
|
|
|
|
|
|
Total net assets
|
|
5,819,730
|
7,963,207
|
|
|
|
|
|
|
Shareholders'
funds
|
|
|
|
|
Ordinary share capital
|
13
|
70,514
|
66,464
|
|
Share premium
|
|
6,782,648
|
6,403,697
|
|
Revenue reserves
|
|
(2,013,466)
|
(1,645,078)
|
|
Capital reserves
|
|
980,034
|
3,138,124
|
|
Total
shareholders' funds
|
|
5,819,730
|
7,963,207
|
|
|
|
|
|
|
Net asset
value per share
|
14
|
82.53p
|
119.81p
|
The notes on pages 52 to 65 form an integral
part of the financial statements.
The financial statements on pages 47
to 65 were approved by the board of directors
and authorised for issue on 23 July 2024.
The financial statements were signed on its behalf by:
Perry Wilson,
Chairman
Statement of Changes in
Equity
For the year ended 31 March 2024
|
|
Ordinary
Share
Capital
£
|
Share
Premium
£
|
Revenue
Reserves
£
|
Capital
Reserves
£
|
Total
Reserves
£
|
Total
Equity
£
|
|
Balance at 1 April 2023
|
66,464
|
6,403,697
|
(1,645,078)
|
3,138,124
|
1,493,046
|
7,963,207
|
|
Ordinary shares issued
|
4,050
|
395,950
|
-
|
-
|
-
|
400,000
|
|
Ordinary shares issue costs
|
-
|
(16,999)
|
-
|
-
|
-
|
(16,999)
|
|
Loss after taxation
|
-
|
-
|
(368,388)
|
(2,158,090)
|
(2,526,478)
|
(2,526,478)
|
|
Dividends paid in the year
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Balance at 31 March 2024
|
70,514
|
6,782,648
|
(2,013,466)
|
980,034
|
(1,033,432)
|
5,819,730
|
For the year ended 31 March 2023
|
|
Ordinary
Share
Capital
£
|
Share
Premium
£
|
Revenue
Reserves
£
|
Capital
Reserves
£
|
Total
Reserves
£
|
Total
Equity
£
|
|
Balance at 1 April 2022
|
60,132
|
5,768,780
|
(1,315,688)
|
3,238,372
|
1,922,684
|
7,751,596
|
|
Ordinary shares issued
|
6,332
|
668,667
|
-
|
-
|
-
|
674,999
|
|
Ordinary shares issue costs
|
-
|
(33,750)
|
-
|
-
|
-
|
(33,750)
|
|
Loss after taxation
|
-
|
-
|
(329,390)
|
(100,248)
|
(429,638)
|
(429,638)
|
|
Dividends paid in the year
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Balance at 31 March 2023
|
66,464
|
6,403,697
|
(1,645,078)
|
3,138,124
|
1,493,046
|
7,963,207
|
As at 31 March 2024, the Company had
distributable revenue reserves of £Nil (2023: £Nil). The
distributable reserves are the capital reserves of £5,006,859
(2023: £3,338,124).
The notes on pages 52 to 65 form an integral
part of the financial statements.
Statement of Cash Flows
For the year ended 31 March 2024
|
|
Notes
|
For the year
ended
31 March 2024
£
|
For the year
ended
31 March 2023
£
|
|
Cash flows from operating
activities:
|
|
|
|
|
Loss after taxation
|
|
(2,526,478)
|
(429,638)
|
|
Adjustments for:
|
|
|
|
|
Loss on sale of investment
|
|
271,039
|
-
|
|
Increase in receivables
|
|
(6,287)
|
(640)
|
|
Increase in payables
|
12
|
18,569
|
23,034
|
|
Unrealised loss/(gain) on foreign
exchange
|
9
|
151,722
|
(204,145)
|
|
Net changes in fair value on financial assets
at fair value through profit or loss
|
9
|
1,735,329
|
304,393
|
|
Net cash (outflow) from operating
activities
|
|
(356,106)
|
(306,996)
|
|
|
|
|
|
|
Cash flows from investing
activities:
|
|
|
|
|
Purchase of investments
|
9
|
(662,460)
|
(779,734)
|
|
Sales of investments
|
9
|
464,077
|
-
|
|
Net cash (outflow) from investing
activities
|
|
(198,383)
|
(779,734)
|
|
|
|
|
|
|
Cash flows from financing
activities:
|
|
|
|
|
Proceeds from issue of ordinary
shares
|
|
400,000
|
674,999
|
|
Proceed from loans
|
|
255,000
|
400,000
|
|
Repayment of loans
|
|
(55,000)
|
(200,000)
|
|
Share issue costs
|
|
(16,999)
|
(33,750)
|
|
Net cash
inflow from financing activities
|
|
583,001
|
841,249
|
|
|
|
|
|
|
Net change in cash and cash
equivalents
|
|
28,512
|
(245,481)
|
|
Cash and cash equivalents at the beginning of
the year
|
|
36,697
|
282,178
|
|
Net cash and cash equivalents
|
|
65,209
|
36,697
|
The notes on pages 52 to 65 form an integral
part of the financial statements.
Notes to the Financial
Statements
1) MATERIAL Accounting Policies
Basis of accounting
The financial statements of Sure Ventures plc
(the "Company") have been prepared in accordance with UK-adopted
international accounting standards in accordance with the
requirements of the Companies Act 2006.
The principal accounting policies adopted by
the Company are set out below. Where presentational guidance set
out in the Statement of Recommended Practice (the "SORP") for
investment trusts issued by the Association of Investment Companies
(the "AIC") in July 2022 is consistent with the requirements of the
applicable international accounting standards, the directors have
sought to prepare the financial statements on a basis compliant
with the recommendations of the SORP.
The financial statements have been prepared on
the going concern basis under the historical cost convention, as
modified by the inclusion of investments and financial instruments
at fair value through profit or loss.
All values are rounded to the nearest pound
unless otherwise indicated.
Going concern
The directors have assessed the going concern
assumption. Following the assessment, the directors have a
reasonable expectation that the Company has adequate resources to
continue in operational existence for the foreseeable future. For
this reason, they have adopted the going concern basis in preparing
the financial statements.
Foreign currency
The presentation currency of the Company is
pound sterling ("£"), the financial statements are prepared in this
currency in accordance with the Company's prospectus. The Company
is required to nominate a functional currency, being the currency
in which the Company predominantly operates. The board has
determined that pound sterling is the Company's functional
currency.
Foreign exchange gains and losses relating to
the financial assets and financial liabilities carried at fair
value through profit or loss are presented in the income statement
within 'other net changes in fair value on financial assets at fair
value through profit or loss'.
Presentation of income statement
In order to better reflect the activities of
an investment trust company and in accordance with guidance issued
by the AIC, supplementary information which analyses the income
statement between items of a revenue and capital nature has been
presented alongside the income statement.
Income
Dividend income from investments is recognised
when the Company's right to receive payment has been established,
normally the ex-dividend date.
Interest income in profit or loss
in the income statement includes bank
interest. Interest income is recognised on an accrual
basis.
Capital distributions and all changes in fair
value of investments held at fair value through profit or loss are
recognised in the capital column of the income
statement.
Management fee rebate
Any management fee and performance fee payable
by the Company in accordance with the Management Agreement shall be
reduced by an amount equal to any management fee and performance
fee received by the Manager and the AIFM, or any member of its
group, from the Fund or any further Fund in respect of the
Company's investment in the Fund or any further Fund.
Expenses
All expenses are accounted for on the accrual
basis. In respect of the analysis between revenue and capital items
presented within the income statement, all expenses have been
presented as revenue items except as follows:
Transaction costs which are incurred on the
purchases or sales of investments designated as fair value through
profit or loss are expensed to capital in the income statement
under other expenses.
Expenses are split and presented partly as
capital items where a connection with the maintenance or
enhancement of the value of the investments held can be
demonstrated and, accordingly, the management fee for the financial
year has been allocated 100% (2023: 100%) to revenue and Nil%
(2023: Nil%) to capital, in order to reflect the directors'
long-term view of the nature of the expected investment returns of
the Company.
Capital
reserves
Increases and decreases in the valuation of
investments and realised/unrealised foreign exchange (loss)/gain
held as at the year end are accounted for in the capital reserves.
This reserve includes the proportion of expenses that have been
presented as capital items in the income statement.
Taxation
In line with the recommendations of the SORP,
the allocation method used to calculate tax relief on expenses
presented against capital returns in the supplementary information
in the income statement is the 'marginal basis'. Under this basis,
if taxable income is capable of being entirely offset by expenses
in the revenue column of the income statement, then no tax relief
is transferred to the capital return column.
Deferred tax is the tax expected to be payable
or recoverable on differences between the carrying amounts of
assets and liabilities in the financial statements and the
corresponding tax bases used in the computation of taxable profit
and is accounted for using the statement of financial position
liability method. Deferred tax liabilities are recognised for all
taxable temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable profits
will be available against which deductible temporary differences
can be utilised.
Deferred tax is calculated at the tax rates
that are expected to apply in the period when the liability is
settled or the asset is realised. Deferred tax is charged or
credited in the revenue return column of the income statement,
except when it relates to items charged or credited directly to
equity, in which case the deferred tax is also dealt with in
equity.
Investment trusts which have approval under
Part 24, Chapter 4 of the Corporation Tax Act 2010 are not liable
for taxation on capital gains.
Classification
Financial assets and financial
liabilities
In accordance with UK-adopted international
accounting standards and in conformity with the requirements of the
Companies Act 2006, the Company has designated its investments as
financial assets at fair value through profit or loss.
i)
Financial assets at fair value through profit or
loss
The Company has designated all of its
investments upon initial recognition as "financial assets at fair
value through profit or loss". Their performance is evaluated on a
fair value basis, in accordance with the risk management and
investment strategies of the Company.
ii) Financial
assets at amortised cost
Financial assets that are classified as
"financial assets at amortised cost" include cash and cash
equivalents and receivables.
iii) Financial
liabilities at amortised cost
Financial liabilities at amortised cost
include other payables, loan payable and interest
payable.
Derecognition
The Company recognises financial assets and
financial liabilities on the date it becomes a party to the
contractual provisions of the instrument. Financial assets are
derecognised when the rights to receive cash flows from the
financial assets have expired or where the Company has transferred
substantially all risks and rewards of ownership. If substantially
all the risks and rewards have been neither retained nor
transferred and the Company has retained control, the assets
continue to be recognised to the extent of the Company's continuing
involvement. Financial liabilities are derecognised when they are
extinguished. Any gains or losses arising from the disposal of
financial assets or financial liabilities (sale proceeds less
transaction costs less the original cost of the investment) are
recorded in the Income Statement.
Investments
All investments held by the Company are held
at fair value through profit or loss ("FVTPL") but are also
described in these financial statements as investments held at fair
value, and are valued in accordance with the International Private
Equity and Venture Capital Valuation Guidelines ("IPEVCV") issued
in December 2022 as endorsed by the British Private Equity and
Venture Capital Association.
Purchases and sales of unlisted investments
are recognised when the contract for acquisition or sale becomes
unconditional.
Receivables
Receivables do not carry any interest and are
short-term in nature. They are initially stated at their nominal
value and reduced by appropriate allowances for estimated
irrecoverable amounts (if any).
Cash and cash equivalents
Cash and cash equivalents (which are presented
as a single class of asset on the Statement of Financial Position)
comprise cash at bank, cash in hand and deposits with an original
maturity of three months or less. The carrying value of these
assets approximates to their fair value.
Payables
Payables are non-interest bearing.
Dividends
Interim dividends are recognised in the year
in which they are paid. Final dividends are recognised when they
have been approved by shareholders.
Loan payable
Loan payable is classified and measured at
amortised cost; any difference between the proceeds (net of
transaction costs) and the redemption value is recognised over the
period of the loan using the effective interest rate method. The
Company initially recognises a loan payable when the Company
becomes a party to the contractual provisions of a loan payable.
The Company subsequently measures a loan payable at amortised cost
and any interest expenses on a loan is recognised in the income
statement using the effective interest rate method.
New
standards, amendments and interpretations effective from 1 January
2023
Up to the date of issue of these financial
statements, the International Accounting Standards Board (the
"IASB") has issued a number of amendments, new standards and
interpretations which are effective for the period beginning 1
January 2023 and which have been adopted in these financial
statements.
Amendments to
IAS 1 - presentation of financial statements and practice statement
2: disclosure of accounting policies
The amendments to IAS 1 and IFRS Practice
Statement 2 Making Materiality Judgements, in which it provides
guidance and examples to help entities apply materiality judgements
to accounting policy disclosures. The amendments aim to help
entities provide accounting policy disclosures that are more useful
by replacing the requirement for entities to disclose their
'significant' accounting policies with a requirement to disclose
their 'material' accounting policies and adding guidance on how
entities apply the concept of materiality in making decisions about
accounting policy disclosures.
Amendments to
IAS 8 - accounting policies, changes in accounting estimates and
errors: definition of accounting estimate
The amendments to IAS 8, in which it
introduces a definition of 'accounting estimates'. The amendments
clarify the distinction between changes in accounting estimates and
changes in accounting policies and the correction of errors. Also,
they clarify how entities use measurement techniques and inputs to
develop accounting estimates.
The amendments and improvements noted above
are effective from 1 January 2023 and the Company has adopted
these, where relevant, from 1 January 2023 and it has not resulted
in any change to the presentation of these financial
statements.
New or
revised accounting standards and interpretations that have been
issued but not yet effective for the year ended 31 December
2023
The following amendments to standards have
been issued to date and are not yet effective for the year ended 31
December 2023 and have not been applied nor early adopted, where
applicable in preparing these financial statements:
|
Description
|
Effective for accounting period
beginning on or after
|
|
Amendments to IAS 1 - Classification of
Liabilities as Current or Non-current and Non-current Liabilities
with Covenants
|
1 January
2024
|
|
Amendments to IFRS 16 - Lease Liability in a
Sale and Leaseback
|
1 January
2024
|
The Directors of the Company anticipate that
the adoption of these amendments that were in issue at the date of
authorisation of these financial statements, but not yet effective,
will have no material impact on the financial statements of the
Company in the year of initial application.
CAPITAL STRUCTURE
Share
capital
Ordinary shares are classed as equity. The
ordinary shares in issue have a nominal value of one penny and
carry one vote each.
Share
premium
This reserve represents the difference between
the issue price of shares and the nominal value of shares at the
date of issue, net of related issue costs.
Capital
reserve
Unrealised gains and losses on investments
held as at the year end arising from movements in fair value, and
realised gains and losses on disposal of investments are taken to
the capital reserve. This reserve includes the proportion of
expenses that have been presented as capital items in the income
statement.
Revenue
reserve
Net revenue profits and losses of the
Company.
2) MATERIAL Accounting
Judgements, Estimates and Assumptions
The preparation of financial statements in
accordance with UK-adopted international accounting standards in
conformity with the requirements of the Companies Act 2006,
requires the Company to make judgements, estimates and assumptions
that affect the application of accounting policies and the reported
amounts of assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during
the reporting year. Although these estimates are based on the
directors' best knowledge of the amount, actual results may differ
ultimately from those estimates.
The areas requiring a higher degree of
judgement or complexity and areas where assumptions and estimates
are material to the financial statements are in relation to
investments at fair value through profit or loss described
below.
Estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the year in which the estimates are revised and in
any future years affected.
Equity investments
The unquoted equity assets are valued on a
periodic basis using techniques including a market approach, costs
approach and/or income approach. The valuation process is
collaborative, involving the finance and investment functions
within the Manager with the final valuations being reviewed by the
Manager's valuation committee.
Shareholders should note that increases or
decreases in any of the inputs in isolation may result in higher or
lower fair value measurements. Changes in fair value of all
investments held at fair value are recognised in the income
statement as a capital item. On disposal, realised gains and losses
are also recognised in the income statement.
3) Segmental
Reporting
The Company's board and the
Investment Manager consider investment activity in selected equity
assets as the single operating segment of the Company, being the
sole purpose for its existence. No other activities are
performed.
The directors are of the opinion
that the Company is engaged in a single segment of business and
operations of the Company are wholly in the United
Kingdom.
4) Management and
Performance Fee
Management fee
The management fee is payable
quarterly in advance at a rate equal to 1/4 of 1.25% per month of
net asset value (the ''Management Fee''). The aggregate fee payable
on this basis must not exceed 1.25% of the net assets of the
Company in any year.
During the year ended 31 March
2024, the Company incurred £138,646 (2023: £149,907) of management
fees and as at 31 March 2024, there was £12,500 (2023: £12,500)
payable to the Manager.
Management fee is allocated to
revenue and capital expenses in order to reflect the directors'
long-term view of the nature of the expected investment returns of
the Company. The revenue expense is the percentage of investment
held at fair value through profit or loss to the net asset value of
the Company. The management fee for the financial year has been
allocated 100% (2023: 100%) to revenue and Nil% (2023: Nil%) to
capital. During the year the rebate management fee amounted to
£88,646 (2023: £99,907).
Performance fee
The Manager is entitled to a
performance fee, which is calculated in respect of each twelve
month period starting on 1 April and ending on 31 March in each
calendar year ("Calculation Period"), and the final Calculation
Period shall end on the day on which the management agreement is
terminated or, if earlier, the business day immediately preceding
the day on which the Company goes into liquidation.
The Manager is entitled to receive
a performance fee equal to 15% of any excess returns over a high
watermark, subject to achieving a hurdle rate of 8% in respect of
each performance period. There is no performance fee charged during
the year ended 31 March 2024 (2023: £Nil).
5) Other Expenses
|
|
For the
year
ended
31 March 2024
£
|
For the
year
ended
31 March 2023
£
|
|
Auditor's remuneration - audit fees
|
38,950
|
32,850
|
|
Directors' fees
|
48,000
|
48,000
|
|
VAT expense
|
40,737
|
35,524
|
|
Legal and other professional
|
24,347
|
20,609
|
|
Listing fees
|
5,923
|
(2,193)
|
|
Service fee expense
|
6,506
|
8,800
|
|
Other expenses
|
15,098
|
18,368
|
|
Total other
expenses
|
179,561
|
161,958
|
All expenses are inclusive of VAT where
applicable. Further details on directors' fees can be found in the
directors' remuneration report on pages 37 to 39.
6) Interest
Expense
Interest income and interest expense are
accounted for on an accrual basis and recognised in the income
statement.
Interest expense for the year ended 31 March
2024 was £22,448 (2023: £7,158).
7) TAXATION
As an investment trust the Company is exempt
from corporation tax on capital gains. The Company's revenue income
is subject to tax, but offset by any interest distribution paid,
which has the effect of reducing that corporation tax to Nil (2023:
Nil). This means the interest distribution may be taxable in the
hands of the Company's shareholders.
Any change in the Company's tax status or in
taxation legislation generally could affect the value of
investments held by the Company, affect the Company's ability to
provide returns to shareholders, lead the Company to lose its
exemption from UK Corporation tax on chargeable gains or alter the
post-tax returns to shareholders. It is not possible to guarantee
that the Company will remain a non-close company, which is a
requirement to maintain status as an investment trust, as the
ordinary shares are freely transferable. The Company, in the event
that it becomes aware that it is a close company, or otherwise
fails to meet the criteria for maintaining investment trust status,
will as soon as reasonably practicable, notify shareholders of this
fact.
The Company has obtained initial approval of
investment trust status from HM Revenue & Customs and the
directors believe that the Company has met the ongoing investment
trust requirements since the date of initial approval.
Factors affecting taxation charge for the
year
The taxation charge for the year is lower than
the standard rate of UK corporation tax of 25.00% (2023: 19.00%). A
reconciliation of the taxation charge based on the standard rate of
UK corporation tax to the actual taxation charge is shown
below.
|
31 March 2024
|
Revenue
£
|
Capital
£
|
Total
£
|
|
Return on ordinary activities before
taxation
|
(368,388)
|
(2,158,090)
|
(2,526,478)
|
|
Return on ordinary activities before taxation
multiplied by the standard rate of UK corporation tax of
25.00%
|
(92,097)
|
(539,523)
|
(631,620)
|
|
Effects
of:
|
|
|
|
|
Excess management expenses not
utilised
|
92,097
|
539,523
|
631,620
|
|
Total tax charge in income
statement
|
-
|
-
|
-
|
|
31 March 2023
|
Revenue
£
|
Capital
£
|
Total
£
|
|
Return on ordinary activities before
taxation
|
(329,390)
|
(100,248)
|
(429,638)
|
|
Return on ordinary activities before taxation
multiplied by the standard rate of UK corporation tax of
19.00%
|
(62,584)
|
(19,047)
|
(81,631)
|
|
Effects
of:
|
|
|
|
|
Excess management expenses not
utilised
|
62,584
|
19,047
|
81,631
|
|
Total tax charge in income
statement
|
-
|
-
|
-
|
Overseas taxation
The Company may be subject to taxation under
the tax rules of the jurisdictions in which it invests, including
by way of withholding of tax from interest and other income
receipts. Although the Company will endeavour to minimise any such
taxes this may affect the level of returns to
shareholders.
Factors that may affect future tax
charges
As at 31 March 2023, the Company
had unrelieved losses of £2,087,772 (2023: £1,719,383) available to
offset future taxable revenue. A deferred tax asset of £521,943
(2023: £429,846) has not been recognised because the Company is not
expected to generate sufficient taxable income in future periods in
excess of the available deductible expenses and accordingly, the
Company is unlikely to be able to reduce future tax liabilities
through the use of existing surplus losses.
The 2024 deferred tax asset not
recognised has been calculated at 25% (2023: 25%), being the
substantively enacted corporation tax rate expected to be
applicable at the date of reversal of the Company's unrelieved
losses, should this reversal occur. Due to historic reallocations
of income statement items between those of a revenue nature and a
capital nature, the comparative unrelieved losses and deferred tax
asset not recognised have been restated.
Deferred tax is not provided on
capital gains and losses arising on the revaluation or disposal of
investments because the Company meets (and intends to continue for
the foreseeable future to meet) the conditions for approval as an
investment trust company.
8) Earnings per
Share
|
For the financial year ended 31 March
2024
|
Revenue
pence
|
Capital
pence
|
Total
pence
|
|
Earnings per ordinary share
|
(5.31)p
|
(31.10)p
|
(36.41)p
|
The calculation of the above is based on
revenue returns of (£368,388), capital returns of (£2,158,090) and
total returns of (£2,526,478) and the weighted average number of
ordinary shares of 6,938,133 as at 31 March 2024.
|
For the financial year ended 31 March
2023
|
Revenue
pence
|
Capital
pence
|
Total
pence
|
|
Earnings per ordinary share
|
(5.14p)
|
(1.56p)
|
(6.70p)
|
The calculation of the above is based on revenue returns of
(£329,390), capital returns of (£100,248) and total returns of
(£429,638) and the weighted average number of ordinary shares
of 6,413,341 as at 31 March 2023.
9) Fair Value
Measurements
(a) Movements in the year
|
|
As of 31 March
2024
£
|
As of 31 March
2023
£
|
|
Opening
cost
|
|
|
|
Opening fair value
|
8,196,153
|
7,516,667
|
|
|
|
|
|
Purchases at cost
|
662,460
|
779,734
|
|
Sales
|
(464,077)
|
-
|
|
Realised loss
|
(271,039)
|
-
|
|
Unrealised loss
|
(1,735,329)
|
(304,393)
|
|
Unrealised (loss)/gain on foreign
exchange
|
(151,722)
|
204,145
|
|
Closing fair
value as at 31 March 2024 and 2023
|
6,236,446
|
8,196,153
|
(b) Accounting classifications and fair
values
IFRS 13 requires the Company to classify its
financial instruments held at fair value using a hierarchy that
reflects the significance of the inputs used in the valuation
methodologies.
These are as follows:
· Level 1
- quoted prices in active markets for identical
investments;
· Level 2
- other significant observable inputs (including quoted prices for
similar investments, interest rates, prepayments, credit risk,
etc.); and
· Level 3
- significant unobservable inputs (including the Company's own
assumptions in determining the fair value of
investments).
The following sets out the classifications
used as at 31 March 2024 in valuing the Company's
investments:
|
|
Carrying
amount
|
|
Fair
value
|
|
31 March 2024
|
Mandatorily
at FVTPL
|
Financial assets at
amortised cost
|
Other financial
liabilities
|
Total carrying
amount
|
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|
|
£
|
£
|
£
|
£
|
|
£
|
£
|
£
|
£
|
|
Financial assets measured at fair
value
|
|
|
|
|
|
|
|
|
|
|
Investments in quoted equity
assets
|
3,642
|
-
|
-
|
3,642
|
|
3,642
|
-
|
-
|
3,642
|
|
Investments in unquoted equity
assets
|
6,232,804
|
-
|
-
|
6,232,804
|
|
-
|
-
|
6,232,804
|
6,232,804
|
|
|
6,236,446
|
-
|
-
|
6,236,446
|
|
3,642
|
-
|
6,232,804
|
6,236,446
|
|
Financial assets not measured at fair
value
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
-
|
65,209
|
-
|
65,209
|
|
|
|
Receivables
|
-
|
8,527
|
-
|
8,527
|
|
|
|
|
-
|
73,736
|
-
|
73,736
|
|
|
|
Financial liabilities not measured at fair
value
|
|
|
|
|
|
|
|
Loan payable
|
-
|
-
|
400,000
|
400,000
|
|
|
|
Interest payable
|
-
|
-
|
29,238
|
29,238
|
|
|
|
Other payables
|
-
|
-
|
61,214
|
61,214
|
|
|
|
|
-
|
-
|
490,452
|
490,452
|
|
|
|
|
Carrying
amount
|
|
Fair
value
|
|
31 March 2023
|
Mandatorily at
FVTPL
|
Financial assets at
amortised cost
|
Other financial
liabilities
|
Total carrying
amount
|
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|
|
£
|
£
|
£
|
£
|
|
£
|
£
|
£
|
£
|
|
Financial assets measured at fair
value
|
|
|
|
|
|
|
|
|
|
|
Investments in quoted equity
assets
|
140,814
|
-
|
-
|
140,814
|
|
140,814
|
-
|
-
|
140,814
|
|
Investments in unquoted equity
assets
|
8,055,339
|
-
|
-
|
8,055,339
|
|
-
|
-
|
8,055,339
|
8,055,339
|
|
|
8,196,153
|
-
|
-
|
8,196,153
|
|
140,814
|
-
|
8,055,339
|
8,196,153
|
|
Financial assets not measured at fair
value
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
-
|
36,697
|
-
|
36,697
|
|
|
|
Receivables
|
-
|
2,240
|
-
|
2,240
|
|
|
|
|
-
|
38,937
|
-
|
38,937
|
|
|
|
Financial liabilities not measured at fair
value
|
|
|
|
|
|
|
|
Loan payable
|
-
|
-
|
200,000
|
200,000
|
|
|
|
Interest payable
|
-
|
-
|
7,145
|
7,145
|
|
|
|
Other payables
|
-
|
-
|
64,738
|
64,738
|
|
|
|
|
-
|
-
|
271,883
|
271,883
|
|
|
10) Receivables
|
|
31 March 2024
£
|
31 March 2023
£
|
|
Prepayments
|
8,527
|
2,240
|
|
Total
receivables
|
8,527
|
2,240
|
The above receivables do not carry any
interest and are short-term in nature. The directors consider that
the carrying values of these receivables approximate their fair
value.
11) Loan
Payable
The Company entered into a loan
facility agreement of £1,000,000 with Shard Merchant Capital
Limited dated 23 April 2018. Effective 12 January 2024, the
maturity date of the loan agreement was extended to 23 April 2028.
During the financial years ended 31 March 2024 and 2023, the
Company drew down £255,000 and £400,000, respectively, on this loan
facility agreement at an interest rate of 8% per annum. During the
financial years ended 31 March 2024 and 2023, the Company repaid
£55,000 and £200,000, respectively, on this loan facility
agreement.
The below table shows the details
of the loan payable with interest payable as at 31 March 2024 and
2023.
|
|
As at 31 March 2024
|
As at 31 March 2023
|
|
|
Nominal
|
Interest
|
Nominal
|
Interest
|
|
|
£
|
£
|
£
|
£
|
|
Loan
payable
|
400,000
|
29,238
|
200,000
|
7,145
|
12) Other
Payables
|
|
31 March 2024
£
|
31 March 2023
£
|
|
Accruals and deferred income
|
61,214
|
64,738
|
|
Total other
payables
|
61,214
|
64,738
|
The above payables do not carry any interest and are short-term in
nature. The directors consider that the carrying values of these
payables approximate their fair value.
13) Ordinary Share
Capital
The table below details the issued share
capital of the Company as at the date of the financial
statements.
|
Issued and allotted
|
No. of shares
31 March 2024
|
£
|
No. of shares
31 March 2023
|
£
|
|
Ordinary
shares of 1 penny each
|
7,051,600
|
70,514
|
6,646,472
|
66,464
|
The following table details
the subscription activity for the year ended 31 March
2024.
|
|
31 March
2024
|
31 March
2023
|
|
Balance as at 1 April
|
6,646,472
|
6,013,225
|
|
Ordinary shares issued
|
405,128
|
633,247
|
|
Balance as at
31 March
|
7,051,600
|
6,646,472
|
During the years ended 31 March 2024 and 2023,
all proceeds from the issues were received.
14) Net Asset Value per
Ordinary Share
|
|
Year ended 31 March
2024
|
Year ended 31 March
2023
|
|
|
Net asset
value per
ordinary share
pence
|
Net assets
attributable
£
|
Net asset
value per
ordinary
share
pence
|
Net assets
attributable
£
|
|
Ordinary
shares of 1 penny each
|
82.53p
|
5,819,730
|
119.81p
|
7,963,207
|
The net asset value per ordinary share is
based on net assets as at 31 March 2024 of
£5,819,730 (2023:
£7,963,207) and on 7,051,600 (2023:
6,646,472) ordinary shares in issue as at the year end.
15) Contingent Liabilities
and Capital Commitments
The Company may invest in Sure Valley
Ventures, Sure Valley Ventures Enterprise Capital LP or other
collective investment vehicles, subscriptions to which are made on
a commitment basis. The Company will be expected to make a
commitment that may be drawn down, or called, from time to time at
the discretion of the Manager of the other collective investment
vehicle. The Company will usually be contractually obliged to make
such capital call payments and a failure to do so would usually
result in the Company being treated as a defaulting investor by the
collective investment vehicle.
The Company has to satisfy capital calls on
its commitments and will do through a combination of reserves, and
where applicable the realisation of cash and cash equivalents and
liquid investments (as each expression is defined in the prospectus
dated 17 November 2017), anticipated future cash flows to the
Company, the use of borrowings and, potentially, further issues of
shares.
As at 31 March 2024, the Company had
outstanding commitments in relation to the Sure Valley Ventures in
the amount of €0.2 million (2023: €0.7 million) and for Sure Valley
Ventures Enterprise Capital LP in the amount of £4.5 million (2023:
£4.8 million).
16) Related Party
Transactions and Transactions with the Manager
Directors - The
remuneration of the directors is set out in the directors'
remuneration report on pages 37 to 39. There were no contracts
subsisting during or at the end of the year in which a director of
the Company is or was interested and which are or were significant
in relation to the Company's business. There were no other
transactions during the year with the directors of the Company. The
directors do not hold any ordinary shares of the
Company.
As at 31 March 2024, there was £4,343 (2023:
£1,239) payable to the Her Majesty's Revenue and Customs ("HMRC")
for taxes on the Directors' fees and expenses.
Manager - Shard
Capital AIFM LLP (the "Manager"), a UK-based company authorised and
regulated by the Financial Conduct Authority, has been appointed as
the Company's Manager and Alternative Investment Fund Manager for
the purposes of the Alternative Investment Fund
Managers Directive. Details of the services provided
by the Manager and the fees paid are given in note 4.
During the year ended 31 March 2024, the
Company incurred £138,646 (2023: £149,907) of management fees and
as at 31 March 2024, there was £12,500 (2023: £12,500) payable to
the Manager. During the year ended 31 March 2024, the Company
received a rebate management fee of £88,646 (2023: £99,907) from
the Manager.
During the year ended 31 March 2024, the
Company paid £16,999 (2023: £33,750) of placement fees to Shard
Capital Partners LLP.
The Company paid corporate broking retainer
fees of £12,280 (2023: £12,110) (excluding VAT) to Shard Capital
Partners LLP during the year ended 31 March 2024.
The Company has investments in Sure Valley
Ventures, the sub-fund of Suir Valley Funds ICAV, and Sure Valley
Ventures Enterprise Capital LP, amounting to £5,932,789 (2023:
£7,139,802) and £300,014 (£121,367) respectively. These funds are
also managed by the Manager.
17) Financial Risk
Management
The Company's investment objective
is to achieve capital growth for investors pursuant to the
investment policy outlined in the prospectus, this involves certain
inherent risks. The main financial risks arising from the Company's
financial instruments are market risk, credit risk and liquidity
risk. The board reviews and agrees policies for managing each of
these risks as summarised below.
Market risk
Market risk is the risk that the fair value of
future cash flows of a financial instrument will fluctuate. Market
risk comprises three types of risk, price risk, interest rate risk
and currency risk.
· Price
risk - the risk that the fair value or future cash flows of
financial instruments will fluctuate because of changes in market
prices (other than those arising from interest rate risk or
currency risk);
· Interest
rate risk - the risk that the fair value or future cash flows of
financial instruments will fluctuate because of changes in market
interest rates; and
· Currency
risk - the risk that the fair value or future cash flows of
financial instruments will fluctuate because of changes in foreign
exchange rates.
The Company's exposure, sensitivity to and
management of each of these risks is described below. Management of
market risk is fundamental to the Company's investment objective.
The investment portfolio is continually monitored to ensure an
appropriate balance of risk and reward within the parameters of the
investment restrictions outlined in the prospectus.
(a) Price risk
Price risk arises mainly from
uncertainty about future prices of financial instruments used in
the Company's business. It represents the potential loss the
Company might suffer through holding market positions in the face
of price movements (other than those arising from interest rate
risk or currency risk) specifically in equity investments purchased
in pursuit of the Company's investment objective, held at fair
value through the profit and loss.
As at 31 March 2024 and 2023, the
Company held three direct private equity investments in the
participating shares of Sure Valley Ventures, a sub-fund of Suir
Valley Funds ICAV, Sure Valley Ventures Enterprises Capital LP and
VividQ Limited.
As at 31 March 2024 and 2023, the
investments in Sure Valley Ventures and Sure Valley Ventures
Enterprises Capital LP are valued at the net asset values of the
entities, as calculated by their administrators. As at 31 March
2024 and 2023, the investment in VividQ Limited is valued at the
last round of investment.
As at 31 March 2024, had the fair
value of investments strengthened by 10% with all other variables
held constant, net assets attributable to holders of participating
shares would have increased by £623,645 (2023: £819,615). A 10%
weakening of the market value of investments against the above
would have resulted in an equal but opposite effect on the above
financial statement amounts to the amounts shown above, on the
basis that all other variables remain constant. Actual trading
results may differ from this sensitivity analysis and the
difference may be material.
(b) Interest rate risk
Interest rate risk arises from the
possibility that changes in interest rates will affect future cash
flows or the fair values of financial instruments.
The Company finances its operations
mainly through its share capital and reserves, including realised
gains on investments.
Exposure of the Company's financial
assets and financial liabilities to floating interest rates (giving
cash flow interest rate risk when rates are reset) and fixed
interest rates (giving fair value risk) as at 31 March 2024 and 31
March 2023 is shown overleaf:
|
|
|
31 March
2024
|
31 March
2023
|
|
Financial instrument
|
|
Floating
rate
£
|
Fixed
or
administered
rate
£
|
Total
£
|
Floating
rate
£
|
Fixed
or
administered rate
£
|
Total
£
|
|
Cash and cash equivalents
|
|
-
|
65,209
|
65,209
|
-
|
36,697
|
36,697
|
|
Loan payable
|
|
-
|
(400,000)
|
(400,000)
|
-
|
(200,000)
|
(200,000)
|
|
Total
exposure
|
|
-
|
(334,791)
|
(334,791)
|
-
|
(163,303)
|
(163,303)
|
An administered rate is not like a floating
rate, movements in which are directly linked to LIBOR. The
administered rate can be changed at the
discretion of the counterparty.
(c) Currency risk
As at 31 March 2024, the Company's largest
investment is denominated in Euro whereas its functional and
presentation currency is pound sterling. Consequently, the Company
is exposed to risks that the exchange rate of its currency relative
to Euro may change in a manner that has an adverse effect on the
fair value of the Company's assets.
As at the reporting date the carrying value of
the Company's financial assets and financial liabilities held in
individual foreign currencies as a percentage of its net assets
were as follows:
|
Foreign currency exposure as a percentage of
net assets
|
31 March
2024
|
31 March
2023
|
|
Euro
|
102%
|
90%
|
Sensitivity analysis
If the Euro exchange rates
increased/decreased by 10% against pound sterling, with all other
variables held constant, the increase/decrease in the net asset
attributable to the Company arising from a change in financial
assets at fair value through profit or loss, which are denominated
in Euro, would have been +/- £593,279 (2023: +/-
£713,980).
Credit risk
Credit risk is the risk that one
party to a financial instrument will cause a financial loss for the
other party by failing to discharge an obligation.
The Company's credit risks arise
principally through cash deposited with banks, which is subject to
risk of bank default.
The Company ensures that it only makes
deposits with institutions with appropriate financial
standing.
Due to the low credit risk of the financial
assets at amortised cost, the expected credit loss ("ECL") was
determined to be immaterial and no impairment was recognised on the
Company in the year ended 31 March 2024.
Liquidity risk
Liquidity risk is the risk that the
Company will have difficulty in meeting its obligations in respect
of financial liabilities as they fall due.
The Company manages its liquid
resources to ensure sufficient cash is available to meet its
expected contractual commitments. It monitors the level of
short-term funding and balances the need for access to short-term
funding, with the long-term funding needs of the
Company.
Capital management
The Company's capital is
represented by ordinary shares and reserves.
The Company's primary objectives in
relation to the management of capital are:
· to
maximise the long-term capital growth for its shareholders pursuant
to its investment objective; and
· to
ensure its ability to continue as a going concern.
The Company manages its capital structure and
liquidity resources to meet its obligations as described
above.
Borrowing limits
Pursuant to the Prospectus dated 17
November 2017, the Company can deploy gearing up to 20% of the net
asset value of the Company (calculated at the time of borrowing) to
seek to enhance returns and for the purpose of capital flexibility
and efficient portfolio management. During the financial years
ended 31 March 2024 and 2023, the Company drew down £255,000 and
£400,000, respectively, on this loan facility agreement at an
interest rate of 8% per annum. During the financial years ended 31
March 2024 and 2023, the Company repaid £55,000 and £200,000,
respectively, on this loan facility agreement.
18) Ultimate Controlling
Party
It is the opinion of the directors
that there is no ultimate controlling party.
19) Events after the
Reporting Period
Subsequent to the year end up until
the date of signing these financial statements, the Company had the
following significant events:
· Following the
year end, the Company raised gross proceeds of £200,000 by way of a
private placing. The 275,862 ordinary shares were issued at 72.5p
per share, representing the closing mid-price on 10 June 2024.
Total shares in admission of the Company then amounted to
7,327,462.
· Following the
year end, Sure Ventures PLC was informed that LandVault, a Sure
Valley Ventures Fund 1 portfolio company, has been acquired by
Infinite Reality Labs for $450m. This acquisition is a share for
share transaction, with the acquirer planning to list on the Nasdaq
later this year. Sure Valley Ventures Fund 1 has a 7% holding in
LandVault and so this has created a significant uplift in the
valuation of this holding, which will be reflected in the next
quarterly NAV.
8 Alternative Performance Measures
("APMs")
APMs are often used to describe the
performance of investment companies although they are not
specifically defined under UK-adopted international accounting
standards. Calculations for APMs used by the Company are shown
below.
Ongoing
charges
A measure expressed as a percentage of average
net assets, of the regular, recurring annual costs of running an
investment company, calculated in accordance with the AIC
methodology.
|
Year ended 31 March 2024
|
|
Page
|
|
|
Average NAV (£'000)
|
a
|
not
applicable
|
£7,115
|
|
Recurring costs (£'000)
|
b
|
47
|
£365
|
|
|
b/a
|
|
5.13%
|
|
Year ended 31 March 2023
|
|
Page
|
|
|
Average NAV (£'000)
|
a
|
not
applicable
|
£7,969
|
|
Recurring costs (£'000)
|
b
|
47
|
£328
|
|
|
b/a
|
|
4.12%
|
Premium/(Discount)
The amount, expressed as a percentage, by which
the share price is more than the NAV per share.
|
As at 31 March 2024
|
|
Page
|
|
|
NAV per ordinary share
|
a
|
not
applicable
|
82.53p
|
|
Share price
|
b
|
not
applicable
|
73.50p
|
|
|
(b-a)/a
|
|
(10.94%)
|
|
As at 31 March 2023
|
|
Page
|
|
|
NAV per ordinary share
|
a
|
not
applicable
|
119.81p
|
|
Share price
|
b
|
not
applicable
|
95p
|
|
|
(b-a)/a
|
|
(20.71%)
|
Total
return
A measure of performance that includes both
income and capital returns. This takes into account capital gains
and reinvestment of any dividends paid out by the Company, with
reinvestment on ex-dividend date
|
Year ended 31 March 2024
|
|
Page
|
NAV
|
Share
price
|
|
Opening as at 1 April 2023 (p)
|
a
|
2
|
119.81
|
95.00
|
|
Closing at 31 March 2024 (p)
|
b
|
2
|
82.53
|
73.50
|
|
Dividend reinvestment factor
|
c
|
n/a
|
1
|
1
|
|
Adjusted closing (d = b x c)
|
d
|
|
82.53
|
73.50
|
|
Total return
|
(d-a)/a
|
|
(31.12%)
|
(22.63%)
|
|
Year ended 31 March 2023
|
|
Page
|
NAV
|
Share
price
|
|
Opening as at 1 April 2022 (p)
|
a
|
2
|
128.91
|
102.00
|
|
Closing at 31 March 2023 (p)
|
b
|
2
|
119.81
|
95.00
|
|
Dividend reinvestment factor
|
c
|
n/a
|
1
|
1
|
|
Adjusted closing (d = b x c)
|
d
|
|
119.81
|
95.00
|
|
Total return
|
(d-a)/a
|
|
(7.06%)
|
(6.86%)
|
9 Glossary
|
AIC
|
Association of Investment Companies
|
|
Alternative
Investment Fund or
"AIF"
|
An investment vehicle under AIFMD. Under AIFMD
(see below) Sure Ventures plc is classified as an AIF.
|
|
Alternative
Investment Fund
Managers
Directive or "AIFMD"
|
A European Union directive which came into
force on 22 July 2013 and has been implemented in the United
Kingdom.
|
|
Annual
General Meeting or "AGM"
|
A meeting held once a year which shareholders
can attend and where they can vote on resolutions to be put forward
at the meeting and ask directors questions about the company in
which they are invested.
|
|
The
Company
|
Sure Ventures plc.
|
|
Custodian
|
An entity that is appointed to safeguard a
company's assets.
|
|
Discount
|
The amount, expressed as a percentage, by
which the share price is less than the net asset value per
share.
|
|
Depositary
|
Certain AIFs must appoint depositaries under
the requirements of AIFMD. A depositary's duties include, inter
alia, safekeeping of a company's assets and cash monitoring. Under
AIFMD the depositary is appointed under a strict liability
regime.
|
|
Dividend
|
Income receivable from an investment in
shares.
|
|
Ex-dividend
date
|
The date from which you are not entitled to
receive a dividend which has been declared and is due to be paid to
shareholders.
|
|
Financial
Conduct Authority or
"FCA"
|
The independent body that regulates the
financial services industry in the United Kingdom.
|
|
Gearing
effect
|
The effect of borrowing on a company's
returns.
|
|
Index
|
A basket of stocks which is considered to
replicate a particular stock market or sector.
|
|
Investment
company
|
A company formed to invest in a diversified
portfolio of assets.
|
|
Investment
trust
|
An investment company which is based in the UK
and which meets certain tax conditions which enables it to be
exempt from UK corporation tax on its capital gains. The Company is
an investment trust.
|
|
Liquidity
|
The extent to which investments can be sold at
short notice.
|
|
Net assets or
net asset value ("NAV")
|
An investment company's assets less its
liabilities.
|
|
NAV per
ordinary share
|
Net assets divided by the number of ordinary
shares in issue (excluding any shares held in treasury).
|
|
Ordinary
shares
|
The Company's ordinary shares in
issue.
|
|
Portfolio
|
A collection of different investments held in
order to deliver returns to shareholders and to spread
risk.
|
|
Relative
performance
|
Measurement of returns relative to an
index.
|
|
Share
buyback
|
A purchase of a company's own shares. Shares
can either be bought back for cancellation or held in
treasury.
|
|
Share
price
|
The price of a share as determined by a
relevant stock market.
|
|
Treasury
shares
|
A company's own shares which are available to
be sold by a company to raise funds.
|
|
Volatility
|
A measure of how much a share moves up and
down in price over a period of time.
|
|
|
|
|
|
|
10 Shareholders'
Information
Directors, Portfolio Manager and
Advisers
|
Directors
|
Administrator
|
|
|
Perry Wilson
|
Apex Fund Services (Ireland)
Limited
|
|
|
Gareth Burchell
|
2nd Floor, Block 5
|
|
|
St. John Agnew
|
Irish Life Centre
|
|
|
|
Abbey Street Lower
|
|
|
|
Dublin 1 DO1 P767
|
|
|
|
Ireland
|
|
|
|
|
|
|
Registered Office
|
Company Secretary
|
|
|
International House
|
Apex Secretaries LLP
|
|
36-38 Cornhill
|
6th Floor
|
|
|
London EC3V 3NG
|
125 London Wall
|
|
|
United Kingdom
|
London EC2Y 5AS
|
|
|
|
United Kingdom
|
|
|
|
|
|
|
Manager and AIFM
|
Registrar
|
|
|
Shard Capital AIFM LLP
|
Computershare Investor Services PLC
|
|
|
International House
|
The Pavilions
|
|
|
36-38 Cornhill
|
Bridgewater Road
|
|
|
London EC3V 3NG
|
Bristol BS99 6ZZ
|
|
|
United Kingdom
|
United Kingdom
|
|
|
|
|
|
|
Placing Agent
|
Depositary
|
|
|
Shard Capital Partners LLP
|
INDOS Financial Limited
|
|
|
International House
|
27-28 Clements Lane
|
|
|
36-38 Cornhill
|
London EC4N 7AE
|
|
|
London EC3V 3NG
|
United Kingdom
|
|
|
United Kingdom
|
|
|
|
|
|
|
|
Website
|
Independent Auditor
|
|
|
http://www.sureventuresplc.com
|
PKF Littlejohn LLP
|
|
|
|
15 Westferry Circus
|
|
|
|
Canary Wharf
|
|
|
|
London E14 4HD
|
|
|
|
United Kingdom
|
|
|
|
|
|
|
Share Identifiers
|
|
|
|
ISIN: GB00BYWYZ460
|
|
|
|
SEDOL: BYWYZ46
|
|
|
|
EPIC: SURE
|
|
|
Investment Policy
Asset allocation
The investment policy of the
Company is to seek exposure to early stage technology companies,
with a focus on software-centric businesses in four chosen target
markets:
* Augmented reality and virtual
reality (AR/VR)
* Financial technology
(FinTech)
* The internet of things
(IoT)
* Artificial Intelligence
(AI)
The Company may invest directly in
investee companies or obtain exposure to such companies through
investment in collective investment vehicles, including Sure Valley
Ventures (the "Fund") and any further funds, which have investment
policies that are complementary to that of the Company. Investments
may be made using such instruments as the Company in conjunction
with Shard Capital AIFM LLP (the "Manager") may determine but are
expected to predominantly comprise equities and equity-linked
securities (including shares, preference shares, convertible debt
instruments, payment-in-kind notes, debentures, warrants and other
similar securities) and may include derivative instruments,
contractual rights and other similar interests that grant the
Company rights equivalent or similar to those conferred by equity
and equity-linked securities.
The Company may implement its
investment policy by investing in class A shares of the Fund and by
investing in any further funds and collective investment vehicles
managed by third parties. The Company will have discretion as to
how to make investments, although it is anticipated that
investments in the Fund will represent between 10% and 100% of the
Company's portfolio at any given time, and that investments in any
further funds and collective investment vehicles managed by third
parties may similarly constitute a material proportion of the
Company's net asset value subject to the Company's investment
restrictions.
Diversification
The Company will seek to hold a
diversified portfolio of investments and, once the assets of the
Company, the Fund and any other collective investment vehicles
through which the Company invests are each fully invested, expects
to have a direct or indirect holding of between 20 and 30
investments. It is intended that the Company would ordinarily
acquire a significant interest, consisting generally of between 20%
and 50% of an investee company's equity capital. The Company does
not envisage taking management control of a portfolio company other
than in exceptional circumstances and on a temporary basis, and
only if it is considered that such action would be necessary to
secure the interests of the Company. The Company has the option to
invest directly in quoted companies. Furthermore, a portfolio
company may seek a flotation in which case: (i) the Company may
continue to hold such investments without restriction; and (ii) the
Company may make follow-on investments in such portfolio
companies.
The Company's investments will not
be constrained by geographical limits. However, it is expected that
the Company's portfolio will predominantly be exposed to companies
that have their principal operations in the UK, Republic of Ireland
or elsewhere in the European Economic Area. In addition, the
Company will aim to satisfy the following guideline criteria for
its portfolio:
•
no more than 15% of the Company's NAV in a single
investment and no more than 60% of the Company's NAV invested in a
further fund or collective investment vehicle managed by a third
party,
•
invest in a further fund or collective investment
vehicle managed by a third party only if such further fund or
collective investment vehicle has an investment policy that is
consistent with the investment policy of the Company,
•
no investment in companies whose primary business
is acquisition or development of real estate,
•
no investments in real estate assets,
and
•
no more than 15% of the Company's NAV to a
counterparty in relation to the utilisation of derivatives
(including for investment and hedging purposes).
Borrowing
The Company may borrow (through
bank or other facilities) a maximum of 20% of net asset value in
aggregate (calculated at the time of borrowing) to seek to enhance
returns and for the purpose of capital flexibility and efficient
portfolio management. The Company's gearing is expected to
primarily comprise bank borrowings but may include the use of
derivative instruments and such other methods as the board may
determine. The board will review the Company's borrowing policy, in
conjunction with the Manager, on a regular basis.
Hedging
Fluctuations in interest rates are influenced
by factors outside the Company's control, and can adversely affect
the Company's results and profitability in a number of ways. The
Company's investment in the Fund will be denominated in Euro. The
Company may use derivatives, including forward foreign exchange
contracts and contracts for difference, to seek to hedge against
any currency risk between the currency of the Company's investment
in the Fund and pound sterling, the base currency of the Company.
Shareholders should note that there is no guarantee that such
hedging arrangements will be utilised or, if so, will be
successful.
Cash management
The Company may hold cash on deposit and may
invest in cash equivalent investments, including short-term
investments in money market type funds, tradeable debt securities
and government bonds and securities (''cash and cash
equivalents''). There is no restriction on the amount of cash and
cash equivalents that the Company may hold and there may be times
when it is appropriate for the Company to have a significant cash
or cash equivalent position instead of being fully or near fully
invested. In order to efficiently allocate all of the Company's
available funds, the Company may make short- and medium-term
investments in relatively liquid assets that are in accordance with
the Company's investment policy (''liquid investments''). Such
liquid investments may include shares, bonds and other debt
instruments issued by companies as well as shares, units or other
interests in collective investment schemes, other investment funds,
exchange traded funds and fixed income investments. Prior to the
full drawdown of the Company's commitment to the Fund, the cash
held by the Company will be utilised in accordance with the
Company's stated investment policy and cash management policy. The
directors, on advice from the Manager, consider that it is the
interests of shareholders for the cash held by the Company in
respect of its commitment to the Fund to potentially be available
for investment in suitable investment opportunities pending
drawdown by the Fund.
Website
The Company's website can be found at
http://www.sureventuresplc.com. The site provides visitors with
Company information and literature downloads.
The Company's profile is also available on
third-party sites such morningstar.co.uk.
Annual report
Copies of the annual report may be obtained
from the Company Secretary or by visiting
www.sureventuresplc.com.
Share prices and net asset value
information
The Company's ordinary shares of 1p each are
quoted on the London Stock Exchange:
· ISIN:
GB00BYWYZ460
· SEDOL:
BYWYZ46
· EPIC:
SURE
The codes above may be required to access
trading information relating to the Company on the
internet.
Electronic communications with the
Company
The Company's annual report and accounts,
half-yearly reports and other formal communications are available
on the Company's website. To reduce costs the Company's half-yearly
accounts are not posted to shareholders but are instead made
available on the Company's website.
Whistleblowing
As the Company has no employees, the Company
does not have a whistleblowing policy. The audit committee reviews
the whistleblowing procedures of the Manager and the Administrator
to ensure that the concerns of their staff may be raised in a
confidential manner.
Warning to shareholders - share fraud
scams
Fraudsters use persuasive and high-pressure
tactics to lure investors into scams. They may offer to sell shares
that turn out to be worthless or non-existent, or to buy shares at
an inflated price in return for an upfront payment. While high
profits are promised, if you buy or sell shares in this way, you
will probably lose your money.
How to avoid share fraud
· Keep in
mind that firms authorised by the Financial Conduct Authority are
unlikely to contact you out of the blue with an offer to buy or
sell shares.
· Do not
get into a conversation, note the name of the person and firm
contacting you and then end the call.
· Check
the Financial Services Register from www.fca.org.uk to see if the
person and firm contacting you is authorised by the Financial
Conduct Authority.
· Beware
of fraudsters claiming to be from an authorised firm, copying its
website or giving you false contact details.
· Use the
firm's contact details listed on the register maintained by the
Financial Conduct Authority if you want to call it back.
· Call the
Financial Conduct Authority on 0800 111 6768 if the firm does not
have contact details on the register or you are told they are out
of date.
· Search
the list of unauthorised firms to avoid at
www.fca.org.uk/scams.
· Consider
that if you buy or sell shares from an unauthorised firm you will
not have access to the Financial Ombudsman Service or Financial
Services Compensation Scheme.
· Think
about getting independent financial and professional advice before
you hand over any money.
·
Remember: if it sounds too good to be true, it probably
is.
5,000 people contact the Financial Conduct
Authority about share fraud each year, with victims losing an
average of £20,000.
Report a scam
If you are approached by fraudsters, please
tell the FCA using the share fraud reporting form at fca.org.uk
/scams, where you can find out more about investment
scams.
You can also call the FCA Consumer Helpline on
0800 111 6768.
If you have already paid money to share
fraudsters, you should contact Action Fraud on 0300 123
2040.