6 April 2017

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Sanne Group plc

("Sanne" or "the Company")

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Posting of Annual Report and Financial Statements and Notice of Annual General Meeting

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Sanne, a leading provider of alternative asset and corporate administration services, has today posted its Annual Report and Financial Statements for the year ended 31 December 2016 together with the Notice of Annual General Meeting (AGM) and Proxy Form to its shareholders. The Annual Report & Financial Statements and Notice of AGM can also be downloaded from the Company's website at www.sannegroup.com.

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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.

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����� Annual Report and Financial Statements for the year ended 31 December 2016;

����� Notice of the Annual General Meeting; and

����� Proxy Form

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Information required under Disclosure and Transparency Rule 6.3.5

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This announcement should be read in conjunction with the Company's preliminary results announcement issued on 29 March 2017.� Together, these announcements constitute the material required by Disclosure 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 2016 Annual Report and Financial Statements, are set out below.� This information should be read in conjunction with, and not as a substitute for, reading the full 2016 Annual Report and Financial Statements.� Page numbers and notes in the following appendices refer to page numbers and notes in the Company's 2016 Annual Report and Financial Statements.

Appendix A: Principal risks and uncertainties

Risk assessment

Sanne reviews and monitors risk exposures closely, considering the potential impact and any management actions required to mitigate the impact of emerging issues and future events. The Group Risk Register is the principal tool for monitoring risks which are classified in a strict hierarchy. The highest level (Level 1) identifies five risk categories: Business Model, Operational, People, Regulatory and Financial. The next level (Level 2) contains defined risk categories and the final level (Level 3) carries the detailed risks themselves which are captured and maintained across the Group.

Risks are assessed using a 1-4 scoring system with each Level 3 risk rated by assessing the likelihood of its occurrence over the next three years and the associated impact. A residual risk score is then derived by taking into account an assessment of the internal control environment or other mitigation.

Risk appetite

In determining its risk appetite, Sanne 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 Audit and Risk Committee, with a view to presenting the key risks to the Board. The Board has agreed that the top ten Level 2 risks will be presented in the Annual Report and Accounts as the Principal Risks and these are summarised in the graphic above and in the following table. This is not an exhaustive list of all risks faced by the Group.

Assessment of principal risks

Using the described approach, the Board is able to confirm that they have carried out a robust assessment of the principal risks facing the Group including those that would threaten its business model, future performance, solvency or liquidity. Included on page 30 is the viability statement, which has been prepared with the assessment of these principal risks in mind.

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Risk Description	Key Mitigants
Business Model Direction of change: Down Execution of the Group's Strategy has resulted in a number of successful acquisitions taking place, the latest and most high profile of which was funded by raising capital on the main market of the London Stock Exchange in late 2016 which was fully subscribed. The continued global expansion of the business model has reduced dependency on our core markets for business performance, thus decreasing the exposure to business model risk.
Acquisition Risk The risk that: given inadequate due diligence, future acquisitions made by the Group give rise to unidentified liabilities or unintended consequences; and/or acquisitions made by the Group are poorly integrated, due to inadequate planning, lack of management oversight or lack of resources.	����� Acquisition risk appetite set and monitored by the Board ����� Robust due diligence process including third party assessments by top accountant and law firms, prior to recommendations to the Board ����� Governance and challenge from independent Non-Executive Directors ����� Integration strategy in place prior to acquisition ����� Integration Committees set up to manage integration processes ���� Internal Audit reviews conducted on all integrations
Strategic Risk The risk that the business model responds inadequately to changing market conditions or fails to meet its strategic objectives, such that sustainable growth, market share or profitability is affected. This is particularly the case due to ongoing changes within the outsourced administration industry, whereby asset classes are evolving and new asset classes are being created.	����� Strategy regularly reviewed and challenged by Executive Committee and Board ����� Significant resource devoted to communicate strategy effectively ����� Strategy drives annual business planning process and performance based targets ���� Executive Operational Risk Committee ensures matters escalated are aligned with strategy and risk appetite
Competitor Risk Failure to innovate and invest in appropriate systems increases the risk that we fall behind key competitors and do not meet the expectations of clients and other stakeholders. Digital developments and social media are rapidly evolving meaning that we must keep pace with the expectations of clients, especially with our strategic objective of delivering services to institutional clients.	����� Divisional responsibility for identifying forthcoming requirements in respect of digital / business systems investment ·     COO responsible for prioritising and monitoring investment in digital / business systems ·    Board oversight of current and planned digital / business systems
Operational Direction of change: Up Acquisitions made since 2015 have increased the size and complexity of the technology and operational environment of the Group, thereby increasing the exposure to operational risk.
Business Change Risk The risk that the planning and implementation of change is ineffective or fails to deliver desired outcomes or results in resources being stretched to the detriment of business as usual activities.	·     In-house change team reporting to Chief Operating Officer ·     Documented business plans and IT strategy ·     Overarching governance of business critical programmes provided by the Executive Committee and the Board
Data Security Risk The risk of a security breach (including cyberattacks) leading to loss of confidentiality, integrity and/or availability of data.	·     Defined IT security procedures ·     Penetration testing ·     System access controls and encryption ·     Physical security at all locations ·     Training and employee awareness ·     Review of relevant procedures and controls as part of the annual ISAE 3402 Type II report
Process Risk The risk that general policies, procedures and processes are ineffective and/or inefficient leading to operational losses, poor client service and employee frustration.	·     Documented procedures and controls with ongoing training ·     Allocated responsibility for continual maintenance and enhancement of policies and procedures ·     Compliance monitoring/second line reviews ·     Internal audit reviews
People Direction of change: Down Whilst an extended period of rapid growth has increased the pressure to recruit and retain the best people, the ability to draw resources from a larger number of jurisdictions has helped reduced this risk.
Staff Resourcing Risk Failure to attract, retain, develop and motivate the best people with the right capabilities across all levels and jurisdictions.	·     Recruitment strategy, succession planning in place and employee value proposition ·     Established Remuneration Committee ·     Set objectives over talent planning and people development ·     Regular remuneration benchmarking ·    Established ACCA, ICAEW and ICSA training schemes
Regulatory Direction of change: Up The result of the EU referendum has led to a period of uncertainty which has increased the Group's exposure to political/regulatory risk, although to date the effects have been minimal. Regulatory licence (Compliance) risk has increased, in part driven by the Group's international expansion resulting in a greater number of regulated jurisdictions (e.g. Mauritius, South Africa, Malta), as well as an increase in the range of regulated services and reporting capabilities offered to clients.
Political / Regulatory Change Risk The risk that Sanne's business model is materially impacted by legal, political or regulatory changes which restrict access to markets or services.	·     Product / jurisdictional diversification strategy reduces impact ·     Jurisdictional oversight by Compliance ·     Horizon scanning by Executive Operational Risk Committee for potential changes ·     Strategy to ensure the business model remains flexible and responsive to change and is regularly reviewed ·    Active dialogue with regulators, governments and industry bodies
Regulatory Licence (Compliance) Risk The risk that Sanne is exposed to regulatory sanction and subsequent reputational damage given a failure to follow regulatory laws, orders and codes of practice requirements.	·     Appropriate compliance resources in each jurisdiction reporting to the Chief Compliance Officer ·     Defined and updated policies aligned to regulatory obligations ·    Compliance Monitoring programme
Financial Direction of change: Up Given a number of acquisitions made by the Group since 2015, there is an increased risk of an impairment to the intangible assets (including goodwill) now held on the balance sheet.
Intangible Asset Risk The risk that events arise, foreseen or unforeseen, which result in an impairment of the intangible assets held on the balance sheet.	·     Robust due diligence process including third party assessments by Big Four accountant firms, prior to acquisitions being realised ·    Regular impairment testing as per accounting rules

 

 

 

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.

 

 

Enquiries:

 

Sanne Group plc Dan McKeon, Company Secretary

+44 (0) 1534 722 787