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RNS Number : 0787W
Sanne Group PLC
12 April 2019
Sanne Group plc
12 April 2019
Sanne Group plc
("SANNE" or "the Company")
Posting of Annual Report and Accounts and Notice of Annual
General Meeting
SANNE, a leading global provider of alternative asset and
corporate services, has posted its Annual Report and Accounts for
the year ended 31 December 2018 (the "2018 Annual Report and
Accounts"), together with the Notice of Annual General Meeting
("AGM") and Form of Proxy, to its shareholders. The 2018 Annual
Report and Accounts and the Notice of AGM can also be downloaded
from the Company's website at www.sannegroup.com.
Copies of the documents listed below have been submitted to the
National Storage Mechanism and will be available for inspection at
www.morningstar.co.uk/uk/NSM:
-- Annual Report and Accounts for the year ended 31 December 2018
-- Notice of the Annual General Meeting
-- Form of Proxy
Information required under Disclosure Guidance and Transparency
Rule 6.3.5
This announcement should be read in conjunction with the
Company's preliminary results announcement issued on 22 March 2019.
Together, these announcements constitute the material required by
Disclosure Guidance and Transparency Rule 6.3.5 to be communicated
to the media in full unedited text through a Regulatory Information
Service. A description of the Principal Risks and Uncertainties and
the Directors' Responsibility Statement, extracted in full unedited
text from the 2018 Annual Report and Accounts, are set out below.
This information should be read in conjunction with, and not as a
substitute for, reading the full 2018 Annual Report and Accounts.
Page numbers and notes in the following appendices refer to page
numbers and notes in the Company's 2018 Annual Report and
Accounts.
Appendix A: Principal Risks and Uncertainties
Risk assessment
The Group reviews and monitors risk exposures closely,
considering the potential impact and any management actions
required to mitigate the impact of emerging issues and potential
future events. The Group Risk Register is the principal tool for
monitoring risks which are classified in a strict hierarchy (see
table on the next page). The highest level (Level 1) identifies
five risk categories: Business Model & Strategy, Operational,
People, Regulatory and Financial. The next level (Level 2) contains
27 risk categories and the final level (Level 3) carries the
detailed risks themselves which are captured and maintained across
the Group.
Each Level 2 and Level 3 risk is rated by assessing the
likelihood of its occurrence over the next three years and the
potential associated impact. A scoring is given to each risk which
is then used in conjunction with an assessment of the internal
control environment or other mitigations to derive a residual risk
score.
Risk appetite
In determining its risk appetite, the Group has defined the
levels of risk it is willing to take in the pursuit of its
strategic objectives.
This has been articulated as a Risk Appetite Statement with
appetite set for each of the Level 2 categories within the Group
Risk Register. For each Level 2 risk category, the risk appetite is
compared against the associated residual risk to identify areas of
focus.
Principal Risks
The risks from the Group Risk Register are discussed, debated
and challenged, firstly by senior management and Executive
Directors, and then by the Risk Committee, with a view to
presenting the key risks to the Board. The Board has agreed that
the top risks will be presented in the Annual Report and Accounts
as the Principal Risks.
Assessment of Principal Risks and Uncertainties
Using the described approach, the Board is able to confirm that
they have carried out a robust assessment of the Principal Risks
and Uncertainties facing the Group including those that would
threaten its business model, future performance, solvency or
liquidity. Included on page 71 is the viability statement, which
has been prepared with the assessment of these Principal Risks and
Uncertainties in mind.
Business Risk Assessments - global and jurisdictional
targets
SANNE's Business Risk Assessment Framework is a key tool within
the Group's risk management framework. Underpinned by SANNE's risk
appetite, the framework evaluates the adequacy and effectiveness of
SANNE's internal controls. Global, and a number of jurisdictional,
assessments were completed in 2018 and the outcome included a
consolidated view of existing risk exposures supported by agreed
risk appetite statements and any remediation work required to
strengthen existing control environments. SANNE's jurisdictional
Business Risk Assessments will continue into 2019.
Level 1 Risk Category Level 2 Risk Category Principal Risk
---------------------------------- ---------------
Business Model & Strategy Strategy Yes
Corporate Governance
Risk Management
Acquisition Due Diligence Yes
Acquisition Integration
Competitor Yes
Client Concentration
Fiduciary
-------------------------- ---------------------------------- ---------------
Operational Process Yes
Business Change Yes
Business Continuity
Technology
Insurance
Outsourcing & Third Parties
Physical Security
Property Security
Cyber Security Yes
Data Management Yes
Legal
-------------------------- ---------------------------------- ---------------
People Staff Culture, Ethics & Behaviour
Staff Resources Yes
-------------------------- ---------------------------------- ---------------
Regulatory Regulatory Change Yes
Listing Rules
Compliance Yes
Financial Crime Yes
-------------------------- ---------------------------------- ---------------
Financial Working Capital
Impairment Yes
Accounting & Reporting Errors
Income
-------------------------- ---------------------------------- ---------------
Business Model & Strategy
Direction of change:
During the period the Group has seen steady progress with the
integration of more recent acquisitions. SANNE has experienced a
number of years of strong growth, both organically and
inorganically, and therefore a number of projects (including
strengthening the 3 Lines of Defence model and enhancing minimum
internal standards) as mentioned on pages 34 and 35, have continued
throughout 2018 to enhance the business model and keep on building
stronger foundations for future sustainable growth.
Risk Description Key Mitigants and Controls
-----------------------------------------------------------
Acquisition Due Diligence Risk
The risk that inadequate due diligence of future * Robust due diligence process including 3rd party
acquisitions made by the Group give rise assessments by top accounting and law firms, prior t
to unidentified liabilities or unintended consequences o
and/or acquisitions made by the Group recommendations to the Board.
are poorly integrated, due to inadequate planning, lack
of management oversight or lack of
resources. * Governance and challenge from independent
Non-executive Directors.
* Committees set up to manage integration processes in
line with SANNE's acquisition integration framework.
--------------------------------------------------------- -----------------------------------------------------------
Competitor Risk
Risk of declining business revenue or margins by failing * Strong pricing and bespoke business offerings driven
to invest in SANNE's infrastructure by expert industry and client base knowledge.
or innovate to react to external market conditions.
* Investment in product development capability.
* Overarching Executive Committee and Board review of
digital/ technology investment.
--------------------------------------------------------- -----------------------------------------------------------
Strategy Risk
Risk of poor strategic business decisions, and/or poor * Regular review of business strategy.
execution, including poor communication,
inadequate resources or a failure to respond to changing
market conditions. * Governance framework to escalate strategy and
appetite issues.
* Executive Committee and Board review and governance,
including monthly financial and risk reporting.
--------------------------------------------------------- -----------------------------------------------------------
Operational
Direction of change:
Continued acquisitions and strong growth in client numbers and
staffing has meant increased inherent operational risk exposures
for the Group, as anticipated in the 2017 Annual Report and
Accounts. These risks have been mitigated, and a number of
operational projects and business change initiatives continue to
further strengthen the control environment in this respect.
Risk Description Key Mitigants and Controls
-----------------------------------------------------------
Business Change Risk
Risk of failure to effectively plan, design, communicate * Dedicated and skilled change management resource.
or execute internal change in a timely
manner, leading to resistance, saturation and fatigue.
* Overarching governance of business critical change
programmes by Executive Committee and Change &
Investment Committee.
* Documented change administration processes.
* Horizon Scanning enabling early identification of
upstream changes which may impact business
operations.
--------------------------------------------------------- -----------------------------------------------------------
Cyber Security Risk
Risk that SANNE's systems, data or services are not * Dedicated team responsible for Information Security.
protected from a cyber-attack leading
to confidential data being obtained or services being
unavailable. * Staff Training & Awareness programme schedule, with
mandatory training to all staff.
* Policies and procedures in place.
* Third Party Management Assessments and contract
reviews.
* InfoSec and cyber tools to support staff in managing
exposure to cyber risk.
--------------------------------------------------------- -----------------------------------------------------------
Process Risk
Risk of errors, inconsistent or untimely application of * Enhanced governance, structure and awareness through
critical processes leading to customer a Group framework that supports the creation and
dissatisfaction or failure to meet statutory or implementation of minimum standards.
regulatory requirements.
* Continued development and documenting of procedures.
* First Line of Defence Control Testing programme.
* Continued centralisation of critical processes,
enabling standardisation and improving effectiveness
.
--------------------------------------------------------- -----------------------------------------------------------
Data Management Risk
Risk of an inability to identify, maintain and protect * Dedicated team in place responsible for Data
data within agreed quality parameters, Protection, including a Global Data Protection
impacting delivery against strategic objectives and Officer (DPO).
regulatory and legal obligations.
* Staff Training & Awareness programme schedule, with
mandatory training to all staff.
* Policies and procedures in place.
* Data Protection Data Flow Mapping.
* Third Party Management Assessments and contract
reviews.
* Mapping and understanding of applicable regulatory
and legal obligations.
--------------------------------------------------------- -----------------------------------------------------------
People
Direction of change:
In key jurisdictions in which the Group operates, the fund and
corporate administration employment market is increasingly
competitive, which, along with the Group's continuing organic
growth, can lead to difficulties in attracting and retaining the
best resources. Initiatives to create and develop knowledge hubs
across the organisation are ongoing, and will help to mitigate this
risk over the medium-term. With a new senior leadership team now in
place, we continue to progress towards developing more centres of
excellence to support our staff.
Risk Description Key Mitigants and Controls
----------------------------------------------------------
Staff Resourcing Risk
Risk of failure to attract, retain or engage staff, * Investment in training with established industry
leading to insufficient capacity and / bodies such as ACCA, ICAEW and ICSA, alongside
or capability, undermining business performance and regulatory training, coaching and mentoring.
delivery.
* Established Remuneration Committee for Executive
Directors.
* Enhanced Employee Value proposition through market
monitoring, remuneration benchmarking and performan
ce
management and bonus structure.
* Increased focus on succession planning.
---------------------------------------------------------- ----------------------------------------------------------
Regulatory
Direction of change:
The Group remains exposed to the political/regulatory risks
associated with Brexit and continues to monitor ongoing
developments as the 2019 deadline approaches. Regulatory Compliance
risk is in part correlated to business model, operational and staff
risk, recognising that as the Group becomes larger and more
diverse, the risk of an omission or error increases leading to
possible regulatory sanction. This increasing risk is being
mitigated by various projects, in particular the strengthening of
the 3 Lines of Defence model and including an increase in assurance
and oversight activity.
Risk Description Key Mitigants and Controls
------------------------------------------------------------
Regulatory Change Risk
Risk of failure to identify, assess, communicate and * Brexit Committee in place to consider, assess and
execute mandatory regulatory changes monitor risks and opportunities.
to our policies, processes and technology in a timely
manner.
* Active dialogue with regulators, governmental and
industry bodies supported by a regulatory liaison
policy framework.
* Horizon scanning process enabling early
identification of upstream regulatory and legislative
changes which may impact SANNE.
* Jurisdictional oversight by Compliance and increased
level of monitoring activity.
-------------------------------------------------------- ------------------------------------------------------------
Compliance Risk
Risk of failure to identify non-compliance to mandatory * Compliance monitoring plans established in each
regulatory requirements and/ or provide jurisdiction assessing compliance with local
timely, accurate and complete reports and required requirements.
disclosures.
* Issues management policy established requiring
incidents to be escalated to jurisdictional and Group
governance committees on a materiality basis.
* Regulatory liaison policy detailing the requirements
of notification of material events to local
regulators/ licensees.
* Employee awareness campaigns embedding knowledge
relating to timely escalation of incidents, breaches
and errors.
-------------------------------------------------------- ------------------------------------------------------------
Financial Crime Risk
Risk of inadequate policies, procedures, controls and * Financial Crime controls and procedures in place.
technology to identify, assess and manage
Financial Crime Risks, leading to SANNE being exposed
to, and used for, criminal activity. * Manual and automated name screening for sanctions,
Politically Exposed Persons (PEPs) and adverse
information.
* Financial Crime Risk governance structure with Group
and jurisdictional subject matter expert support.
* Centralised KYC Data to manage and identify risks.
* All transactions subject to approval process and
subject to sign-off.
-------------------------------------------------------- ------------------------------------------------------------
Financial
Direction of change:
Given the number of acquisitions made by the Group in recent
years, there are significant intangible assets (including goodwill)
on the balance sheet.
Risk Description Key Mitigants and Controls
------------------------------------------------------------
Impairment Risk
Risk of recoverable amounts being below the value of * Director led due diligence with 3rd party assessments
assets, including intangible assets (e.g. by top accounting and law firms.
goodwill), due to a decline in value following
acquisition.
* Impairment testing and attestations per accountancy
rules.
* Six monthly value assessments.
* Ongoing monitoring against performance expectations
and targets.
* Focus on delivering strategic and financial benefits
from acquired businesses.
-------------------------------------------------------- ------------------------------------------------------------
Appendix B: Directors' Responsibility Statement
We confirm that to the best of our knowledge:
-- the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair view
of the assets, liabilities, financial position and profit of the
parent Company and its undertakings included in the consolidation
taken as a whole; and
-- the Strategic Report and Directors' Report include a fair
view of the development and performance of the business and the
position of the Company and the undertakings included in the
consolidation taken as a whole, together with a description of the
Principal Risks and Uncertainties that they face.
For and on behalf of Sanne Group plc
Enquiries:
Sanne Group plc
Ian Portal, Group Company +44 (0) 20 3911
Secretary 1048
Tulchan Communications LLP +44 (0) 20 7353
Tom Murray 4200
Notes:
About SANNE
SANNE is a leading global provider of alternative asset and
corporate services. Established for over 30 years and listed on the
Main Market of the London Stock Exchange and a member of the FTSE
250 index, SANNE employs more than 1,400 people worldwide and
administers structures and funds that have in excess of GBP240
billion of assets.
Key clients include alternative asset managers, financial
institutions, family offices, ultra-high net-worth individuals and
corporates.
SANNE operates from a global network of offices located in
leading financial jurisdictions, which are spread across the
Americas, Europe, Africa and Asia-Pacific.
www.sannegroup.com
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
ACSZMGMDMZRGLZM
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