Sancus Lending Group Limited
Annual Report and
Audited Consolidated Financial Statements
For the year ended 31 December 2023
1
Sancus Lending Group Limited
For the year ended 31 December 2023
CONTENTS
CONTENTS
HIGHLIGHTS
2
STRATEGIC REPORT
Chairman’s Statement
4
Chief Executive Officer’s Review
5
Principal Risks, Uncertainties and Related Internal Controls
9
Environmental, Social and Governance
12
CORPORATE GOVERNANCE
Board of Directors and Executive Management Team
21
Governance Framework
23
Board Committee Structure
25
The Audit and Risk Committee Report
27
Remuneration and Nomination Committee Report
30
Directors’ Report
33
CONSOLIDATED FINANCIAL STATEMENTS
Independent auditor’s report to the members of Sancus Lending Group Limited
36
Consolidated Statement of Comprehensive Income
43
Consolidated Statement of Financial Position
44
Consolidated Statement of Changes in Shareholders’ Equity
45
Consolidated Statement of Cash Flows
46
Notes to the Financial Statements
47-85
Officers and Professional Advisers
86-87
2
Sancus Lending Group Limited
For the year ended 31 December 2023
HIGHLIGHTS
Rory Mepham, Chief Executive Officer of Sancus Lending Group Limited, commented:
“We remain committed to returning Sancus to profitable growth. During the year we have continued to focus on getting our
operating platform functioning efficiently in our three core markets, the UK, Ireland and Channel Islands. Our strategic focus is
clear – to become a private credit and property focussed asset and wealth manager – in which management, our shareholders
and funders have specific sectorial expertise and deal flow.
While we focus on credit quality and are on track to deliver our renewed strategies our reported operating loss of £9.9m,
includes an Expected Credit Loss (“ECL”) charge of £4.8 million predominantly against legacy loans written in 2019 or before.
The carrying cost of these historic loans and an increased group borrowing cost accounted for the majority of the remainder of
the loss.
During the year our residential property credit business achieved a 23% increase in pro-forma loans under management to
£208m, including the impact of a joint venture we announced with Hawk Lending Limited in December 2023. This joint venture,
in addition to strengthening our Channel Islands lending position will also improve our access to family office wealth. We also
saw good growth in the Irish business.
The Sancus team remain committed to achieving the highest possible proceeds from the “workout” of legacy loans and we
anticipate completing the majority of these workouts in 2024. We have had an encouraging start to the year. In the 5 months
to May 2024 we generated revenues of £6.3m (including our share of the joint venture announced with Hawk Lending
Limited). This compares to £4.6m for the 5 months to 31 May 2023. Our pro-forma Assets Under Management (“AUM”) Is
now £216m, a 7% increase on the equivalent year-end position (£202m) and we have an encouraging business
pipeline. Although we expect to report an operating loss for the 6 months to 30 June 2024 we expect this will be substantially
lower than the £3.8m operating loss for the 6 months to 30 June 2023. While the immediate economic outlook for the residential
property market remains somewhat uncertain we are excited by the potential of the teams that we have assembled in the UK,
Ireland and Channel Islands. We believe that these teams now have the platform from which to deliver profitable growth and
accelerate our strategic progress.”
Financial Highlights
• Group revenue increased by 23% to £12.3m (2022: £10.0m)
• Operating losses of £9.9m (2022: loss £4.7m)
• An ECL charge of £4.8m compared to £0.4m charge in 2022, reflecting required provisions against loans written
by the previous management team
• Group PBT loss for the year of £9.1m (2022: loss £14.1m)
Operational Highlights
• Pro-forma loan book at year end £202m (2022: £169m), reflecting the impact of the Hawk Lending Limited joint
venture
• Geographic focus remains unchanged: Irish loan book grew by 67% to £32.9m (2022: £19.7m), UK loan book
largely flat at £63.0m (2022: £65.9m) with Channel Islands benefitting from impact of Hawk Lending Limited joint
venture (pro-forma loan book of £103.1m vs £70.5m in 2022)
• New facilities written lower at £102m (2022: £122m), primarily reflecting the UK property market (2023 loans
written: £37m vs 2022: £84m). Irish loans written up 153% at £46m
Strategic Highlights
• Completion of a joint venture with Hawk Lending Limited to form a new Jersey based private credit and debt
advisory business. The joint venture also significantly enhances the Group’s Channel Islands network of private
wealth relationships.
• Further strengthening of the Group’s capital flexibility:
o Somerston purchased £3m of ZDP bonds held in treasury in April 2023
o Somerston also subscribed for £5m of preference shares in Sancus Lending (UK) Limited, one of our
subsidiaries, in April 2024
• The Group completed its withdrawal from Guernsey and Gibraltar in early 2023. As part of our withdrawal from
Guernsey finance and treasury functions were provided by Carlton Management Services until March 2024. This
contract has now come to an end and relevant staff have now been employed by Sancus.
3
Sancus Lending Group Limited
For the year ended 31 December 2023
HIGHLIGHTS (Continued)
Current Trading
• Revenues of £6.3m in the 5 months to 31 May 2024 (including our share of the Hawk Lending Limited joint
venture) with all parts of the business reporting revenue growth. This compares to revenue of £4.6m for the 5
months to 31 May 2023.
• Pro-forma AUM of £216m vs £202m as at 31 December 2023. The pipeline of new business as we enter the 2nd
half of the year is encouraging.
• Expectation of a materially lower operating loss for the 6 months to 30 June 2024 than for the 6 months to 30
June 2023 (£3.8m). Operating costs have remained broadly flat on a like for like basis and there have been no
material changes/deteriorations year to date in credit quality.
4
Sancus Lending Group Limited
For the year ended 31 December 2023
CHAIRMAN’S STATEMENT
Introduction
Our structured strategic change programme is now well advanced and our focus throughout the year has been on actions that will
position the Group for profitable growth as a private credit and property focussed asset and wealth manager. Demand for property
private credit has been sporadic in our markets of the UK, Ireland and Channel Islands but the residential development sectors remains
active. We believe that the highly selective policy of some traditional lenders will present an opportunity to write good quality new
business.
Results and Strategic Progress
We reported a 23% growth in our revenue to £12.3m. The reported operating loss of £9.9m primarily derives from further write-downs
on historic loans and associated carry costs as well as the increased interest cost of our group borrowings. The management team is
committed to returning the Group to profitability and I am confident that their actions will achieve this goal. In December 2023 we
announced a joint venture with Hawk Lending Limited, which will improve our positioning in the Channel Islands market and enhance
our access to the family office wealth markets. Operationally, we completed exits from Guernsey and Gibraltar early in 2023 and we
brought in-house the finance and treasury functions previously provided by Carlton Management Services under a service agreement.
Our People
Keith Lawrence has been appointed as the new Group Chief Financial Officer. As announced on 10 January 2023 Emma Stubbs, our
former CFO, left the business at the end of March 2023 and Tracy Clarke acted as the Group’s Interim Chief Financial Officer until 31
March 2024 when Keith was appointed. I appreciate the support and leadership provided by Tracy during this period but I am delighted
that Tracy has agreed to return as a non-executive director of the Group.
Keith has over 30 years experience in the financial services industry. After qualifying as a Chartered Accountant with KPMG Keith
worked in investment banking for 20 years, focussing primarily on financial services clients. Prior to joining Sancus Keith was the
CFO of an innovative private equity backed residential construction business.
Capital Raise
In order to provide the Group with additional capital, £3m of ZDP shares held in Treasury were sold to Somerston, the Group’s largest
shareholder and in April 2024 Somerston subscribed for £5m of preference shares in Sancus Lending (UK) Limited, one of our core
subsidiaries.
Dividend and Shareholders
The Group remains engaged in the recovery programme and therefore does not have the capacity to declare a dividend this year. The
Board will revisit this policy as soon as cash flow and profitability permit.
On behalf of the Board, I would like to thank shareholders for their continued support and patience. Thanks to the continuing efforts
of our team the Group has made good progress this year. While the Board does not underestimate the scale of the challenge ahead
we believe we have the right strategy, systems and personnel to return the business to profitability and growth.
I look forward to reporting positive developments in the coming year.
Steve Smith
Chairman
28 June 2024
5
Sancus Lending Group Limited
For the year ended 31 December 2023
CHIEF EXECUTIVE OFFICER’S REVIEW
Overview
Our priority focus is to achieve profitability. Since joining the business in 2021, the management team and I have been focused
on getting our residential property credit business operating efficiently across its core three markets (the UK, Ireland and
Channel Islands).
In parallel with seeking to make continuous improvements to the Sancus property lending business and achieving profitability
we now have a clear strategic focus. Over the next five years we intend to transform into an alternative asset manager, which
focuses on private credit, property (equity & debt) and other complementary alternative strategies in which the management,
our shareholders and funders have specific sectorial expertise and deal flow.
As at the end of 2023, the Group had £202m
(1)
of AUM of which £120m has been funded from private wealth markets in the
Channel Islands. Over the coming years we aim to widen our private wealth network in the Channel Islands and to develop
similar networks in the UK, Ireland and beyond. Additionally, once the residential property credit business has achieved
profitability we will seek to diversify the operating platforms into complementary strategies.
A key element of the transformation to an asset manager will involve transitioning to funding its current and planned lending
activities on an off-balance sheet basis. This is expected to be an iterative process with the ultimate goal to be funded entirely
off-balance sheet in the coming years.
Our Strategy
The business continues to prioritise achieving profitability through delivering on the following strategic pillars as part of our
transformation into an asset and wealth manager:
1. Focusing on revenue growth
In 2023 we achieved a £2.3 million (23%) increase in revenue to £12.3m. Our strong revenue growth during this period reflects
our success in driving increased fee income, with increased co-funder and exit fees more than off-setting a decrease in
transaction fees in 2023.
2. Achieving operating and cost efficiency
Our withdrawal from Guernsey and Gibraltar allows us to centralise most of our operations in Jersey and the UK and focus on
achieving greater operating efficiency. Operating costs in the year amounted to £6.5m, £0.2m lower than in 2022 (2022: £6.7m)
despite inflationary pressures. We are committed to achieving further expense savings and efficiency gains in future years.
3. Becoming a capital efficient business
Our disciplined capital management approach focuses on reducing the amount of own capital within loans and driving down
the cost of funding. To strengthen our balance sheet, we continue to reduce our exposure to legacy loans. At the end of 2023,
our own capital represented 1.4% of the total loan book, in comparison to 3.5% in 2022, helping us to improve the overall
capital efficiency of the business.
We also made significant progress in lowering our cost of funding during this period, which we anticipate some of the benefits
to be accrued in 2024 and future years, including:
• Offshore facility: Under the terms of the HLL transaction we have arranged a £25m facility to be provided by the Morton
family with at an attractive cost of funds.
• Loan notes: We continued to grow our Loan Note program. During the year total Loan Note funding increased from
£20.3m to £26.9m. The interest rate on these loan notes is below the institutional funding line secured by the Group.
• Private Wealth Co-funders: At 31 December, co-funders provided £56.4m of funding to us. We are committed to
further enhancing our private wealth co-funder proposition.
Note (1): Pro-forma for effect of joint venture agreement announced on 5
th
December 2023 with HLL
6
Sancus Lending Group Limited
For the year ended 31 December 2023
CHIEF EXECUTIVE OFFICER’S REVIEW (Continued)
As part of our transition to asset & wealth manager we continue to track our AUM. During this period, we have achieved £40
million (23%) increase in AUM to £202.1m on a pro-forma basis in 2023, partially due to completing a joint venture with Hawk
Lending Limited (“HLL” of “Hawk”) in Jersey on 5 December 2023 whereby the newly formed company will manage the
respective loans books of Sancus Jersey and Hawk (further details about this agreement can be found in the operational
updates below). Jurisdictional progress of AUM as follows:
• Pro-forma Channel Islands loan book as at 31 December 2023 was £103.1m (31 December 2022: £70.5m).
• Our Irish loan book grew by 67% to £32.9m and Irish fee income also increased strongly to £2.2m in 2023 from £1.6m
in 2022. We are excited about the prospects for our Irish business.
• Given macro-economic uncertainties, we chose to carefully manage our UK growth and our UK book remained broadly
flat at £63.0m (31 December 2022: £65.9m). We are committed to growing our UK business during 2024 and beyond.
The new facilities written this year (£102.3m vs £124.8min 2022), combined with the anticipated benefits of the HLL joint
venture, gives us confidence in our ability to further increase our AUM in 2024.
Financial Summary
Group revenue increased by 23% year on year from £10.0m in 2022 to £12.3m in 2023 with the UK revenue up by 13% to
£3.0m (2022: £2.7m) and Ireland up 40% over the course of 2023 to £2.2m (2022: £1.5m). We are confident that our HLL joint
venture will allow us to drive Channel Islands revenue growth in the future.
We have reported an operating loss of £9.9m for the year (2022: loss of £4.7m). This primarily reflects a £4.8m charge for ECL
under IFRS9 (2022: £0.4m), all of which was related to historic loans written. Operating costs in the year amounted to £6.5m,
£0.2m lower than in 2022 (2022: £6.7m) despite inflationary pressures. We are targeting further operating savings in
2024. This loss was also impacted by the cost of the group level borrowings from our Bond and Zero Dividend Preference
shares. In 2023 these Group borrowing costs amounted to £2.9m (2002: £1.8m).
The Group’s net assets have reduced in the year from £7.2m at 31 December 2022 to net liabilities of £2.0m as a result of the
operating loss in the year outlined above.
Group cash and cash equivalents was £5.0m at 31 December 2023 of which £1.6m related to Group operational cash and
£3.4m was within Sancus Loans Limited.
Goodwill carried on the balance sheet as at 31 December 2023 was £nil vs £14.3m as at 31 December 2022. The change in
carrying value reflects the transfer of the carrying value of our investment in Sancus Jersey following the sale of the business’
goodwill, business information, moveable assets, records and third party rights to HLL in exchange for shares in HLL. This
investment in the joint venture with HLL that we announced in December 2023 has been recognised separately on the
Statement of Financial Position at a value of £14.3m. Notes 9 and 12 provide further details of our investments in joint ventures
and goodwill.
We continue to manage down our on balance sheet loans (excluding those loans in Sancus Loans Limited). These amounted
to £2.3m before IFRS9 provisions at 31 December 2023 compared to £8.2m at 31 December 2022 (£0.5m net of IFRS9
provisions at 31 December 2023 compared to £3.0m at 31 December 2022). Sancus Loans Limited had loans of £82.6m at 31
December 2023 (31 December 2022: £74.7m).
The Group’s liabilities consist of the Bond instrument which still stands at £15.0m and ZDPs of £14.0m with a coupon of 9%.
The Bond has a quarterly paid coupon of 7% p.a. and matures on 31 December 2025. During the year we issued £3.0m of
ZDPs. The Pollen credit facility of £125m (2022: £75m) stood at £77.75m drawn as at 31 December 2023.
2020
2021
2022
2023
Revenue (£ million)
£10.9m
£9.0m
£10.0m
£12.3m
Loans under management (£ million)
£171.0m
£142.0m
£169.0m
£202.1m
Operating loss (£ million)
(£5.5m)
(£10.2m)
(£4.7m)
(£9.9m)
7
Sancus Lending Group Limited
For the year ended 31 December 2023
CHIEF EXECUTIVE OFFICER’S REVIEW (Continued)
Operational Updates
• Hawkbridge joint venture
On 5 December 2023 we announced that we had entered into a joint venture agreement with HLL to form a new Channel
Islands based property private credit and debt advisory business – Hawkbridge Ltd. Both former Sancus and Hawk teams are
now employed by the joint venture company. Trading as Hawk Lending the business is now in the process of writing its first
deals. This joint venture with the Hawk family office has significantly deepened the Group’s Channel Islands network of private
wealth relationships, enhancing its co-funder and wholesale finance reach.
• Loan book management and reduction in non-performing loans
Continued emphasis has been placed on actively managing loans once the initial drawdown has been made. This has been
particularly important against the backdrops of various market related pressures such as cost inflation. We are pleased to report
that the percentage of loan book in recovery continues to reduce.
In the year ended 31 December 2023 we have had to recognise an ECL charge of £4.8m (31 December 2022: £0.4m), all of
which relates to loans written by the previous management team.
• Diversification of funding
We continue to focus on increasing the funding capacity and diversifying the off-balance sheet funding sources of the business,
on improved terms. We are seeking to work with a diversified mix of funders, both private and institutional, to match funders
with loans meeting their varied risk and reward criteria.
Private Wealth Co-Funders remain one of our largest funding channels, with the majority of the Offshore loan book being co-
funded. As at 31 December 2023 co-funders provided £48.2m of funding (31 December 2022: £66.9m). We continue to
nurture relationships with the Co-Funder base, with these typically being Offshore private individuals and family offices. We
expect that our HLL joint-venture will enhance our capabilities here.
Loan Notes, managed by Amberton Limited, remain an important funding instrument for the business. Loan Note 8, which was
launched in January 2022 was £26.9m as at 31 December 2023 (31 December 2022: £3.0m). Loan Note 8 matures on 1
December 2026 and now has a coupon of 8% p.a. (payable quarterly), with Sancus providing a 20% first loss guarantee.
We continue to make use of an institutional funding line arranged by Pollen Street Capital (“Pollen Street”) and which is
designed to be complementary to our Co-Funder base and Loan Note program. At 31 December 2023 the total drawn was
£77.75m (31 December 2022 £67.75m). While the Pollen Street facility continues to be strategic for the business and is
generally utilised in relation to funding development loans we recognise that the availability, cost, diversification and flexibility
of funding is key to achieving our growth ambitions.
We are continuing to minimise the amount of our balance sheet capital deployed to back loans. During the year this was broadly
flat at £10.2m (31 December 2022: £10.2m).
• Operational efficiency and planned management changes
A focus on operational efficiency continued into 2023. We completed our exits from Guernsey and Gibraltar early in 2023 and
at the end of 2023, the Group headcount was 30 (31 December 2022: 39). We believe the business is now well resourced to
meet its objectives and are focussing on continuous improvement and development of our people.
As announced on 10 January 2023 Emma Stubbs, CFO, left the business at the end of March 2023 and Tracy Clarke was
appointed as the Group's Interim Chief Financial Officer for a period of 12 months. Tracy, who was formerly a non-executive
director of Sancus, stepped down as CFO on 31 March 2024 and re-assumed her responsibilities as a non-executive director
of Sancus. Keith Lawrence, who joined the business as Finance Director in February 2024 assumed CFO responsibilities on 1
April 2024. Simultaneous with this the arrangement for Carlton Management Services to provide finance and treasury services
to Sancus has come to an end and relevant staff have now been employed by Sancus.
8
Sancus Lending Group Limited
For the year ended 31 December 2023
CHIEF EXECUTIVE OFFICER’S REVIEW (Continued)
ESG
We recognise our responsibility to incorporate sustainability practices through our business and our environmental, social and
governance (“ESG”) journey continued in 2023. We continue to use the materiality assessment to assist us in prioritising the
key ESG issues we face and have commenced utilising a data-driven approach to support our progress in improving our
approach to managing ESG factors.
We are pleased to publish our 2023 ESG report on our website. The report identifies the progress against our key objectives
set in 2022, recognises the key challenges we have faced and summarises key data. An extract of the ESG report is included
in this report on page 12.
Going Concern
The Company does not have any debt liabilities that fall due within the next 12 months. In April 2024 Somerston, the
Company’s largest shareholder, subscribed for £5m of preference shares in one of the Group’s principal subsidiaries, Sancus
Loans Limited, enhancing the Group’s financial flexibility. Based on this, the Directors are of the opinion that the Company has
adequate financial resources to continue in operation and meet its liabilities as they fall due for the foreseeable future.
Outlook
There are grounds for optimism. Given our strategic progress and focus, we believe the long term profitable growth potential
for our business is clear. While, the immediate economic outlook, especially for the residential property market, remains
somewhat uncertain, we expect that this is likely to lead to the continued retrenchment of major banks and other competitors
from both SME and development financing, creating further opportunities for us. The long term trend of under supplied housing
markets in each of our current markets provides a backdrop for an optimistic outlook. We continue to look forward to delivering
profitability.
Rory Mepham
Chief Executive Officer
28 June 2024
9
Sancus Lending Group Limited
For the year ended 31 December 2023
PRINCIPAL RISKS, UNCERTAINTIES AND RELATED INTERNAL CONTROLS
The Group aims to carefully manage the risks which are inherent across its business activities in order to deliver an appropriate
risk adjusted commercial return. The principal risks which the Group has consciously accepted in the pursuit of value creation
are liquidity risk, regulatory and compliance risk, market risk, credit risk, strategic risk, and investment risk. With regard to the
FinTech activities, exposure to investment risk is a factor of the strategic, liquidity, credit and operational risks assumed by the
platforms in which the Group is invested.
This section on the Group’s Principal Risks should be read together with the sections on the Group’s Governance Framework,
the operation of the Audit and Risk Committee, as well as Note 22 which describes the sensitivity of the Group’s financial
results to its Financial Risk exposures. These sections explain how these risks are being managed, monitored and governed.
The table below describes the Group’s assessment of the principal risks being those which have the potential to have a
significant impact on the Group’s business model, future performance, solvency or liquidity.
Principal Risks
Internal controls mitigating Risks
Current Rating of Risks
Group
1. Capital and liquidity Risk
Medium
Sancus’s own funding is sourced
primarily from the ZDP shares and the
Corporate Bond (as detailed in Note
17).
Expansion of lending and investment
activities will be constrained to the
extent of retained profits unless further
sources of funding are secured.
Sancus has a Treasury Committee
which meets once a month to manage
its capital and liquidity position, and
forecasts over several years to predict
longer term funding requirements.
Management of each of the operating
companies balance their lending and
funding and proposals to advance
lending are typically contingent on
sufficient funding having been secured
in advance.
The business seeks to maintain a
material liquidity buffer at all times.
Completion of the fundraising and
liability management exercise over the
last couple of years has significantly
improved the Group’s capital and
liquidity position.
Management at Group and subsidiary
level are focussed on raising
additional on and off balance sheet
funding in order to grow lending
activities and support funding
commitments.
2. Regulatory and Compliance Risk
Medium
As a Financial Services business,
compliance with regulation is
considered paramount within the
Group, particularly with regard to the
various regulators in the jurisdictions
that Sancus operating entities conduct
business within, the Financial Conduct
Authority (FCA) Handbook (UK) and
the various Anti Money Laundering
(AML) regulations with the regulatory
landscape in all jurisdictions continually
evolving.
The Company has chosen to comply
with the provisions of the QCA
Corporate Governance Code. Refer
Page 23 for further detail.
All entities have developed and
implemented appropriate policies and
procedures relating to regulatory
compliance and Anti Money
Laundering.
The Executive Risk Committee
monitors these risks, and forthcoming
regulations, with appropriate reporting
from the Risk and Compliance
Director and Money Laundering
Reporting Officers. External,
independent partners complete
additional regulatory horizon scanning
reviews and conduct periodic reviews
of internal compliance including AML
file reviews.
The Company has an appointed
NOMAD, Liberum, whom it liaises with
regularly, to ensure compliance with
the AIM rules, including the Market
Abuse Regulations.
Boards receive quarterly reports from
the Risk & Compliance Director and
where appropriate, Money Laundering
Reporting Officers on compliance
monitoring plans and any breaches
identified.
The compliance framework as
described is considered to be
operating effectively and has recently
been enhanced to increase oversight
of all risks within the Sancus lending
business through the Executive Risk
Committee.
Measures are in place to monitor
clients against various databases to
identify if any sanctions (including the
recent increase in sanctions relating to
the Ukraine/Russia conflict).
10
Sancus Lending Group Limited
For the year ended 31 December 2023
PRINCIPAL RISKS, UNCERTAINTIES AND RELATED INTERNAL CONTROLS (Continued)
3. Market risk
High
The primary market risks are
considered to be interest rate and
foreign exchange risk. Given the nature
of the business operations, with
relatively short-term lending and
currencies on lending opportunities
being matched (or hedged) the
exposure is considered to have limited
impact on its position as a going
concern.
Foreign exchange risk primarily arises
from the USD and Euro investments in
the FinTech portfolio and Euro loans
held in the Irish lending book.
Exposures to these risks are
monitored regularly by the Sancus
Treasury Committee and reported to
the Board on a quarterly basis.
These risks are identified and
assessed at the time of entering into
new transactions.
More information on the sensitivity to
these risks is contained in Note 22.
Macro-economics including increased
inflation and bank base rate and euro
margin fluctuations may have an
effect on margin. The introduction of
variable base rate loans and foreign
exchange hedging are having an
impact on mitigating the risk.
With the increase in bank base rate,
Co-Funders might look elsewhere to
invest; however, variable rate Co-
Funder returns should minimise this
risk with investors continuing to
receive attractive risk adjusted returns
on asset backed lending.
4. Credit Risk
High
The Group has direct credit exposures
through its on balance sheet lending
and credit support. Indirect credit risk
(potential losses to Co-Funders) could
impact further business development.
Each operational entity has its own
credit policies and procedures which
are the subject of at least annual
review by operating entity Boards.
The respective Credit Committees
take all credit decisions, monitor credit
exposures on an ongoing basis and
manage recoveries situations.
Following Covid-19 tighter lending
criteria has been implemented.
The IFRS9 provision increased
substantially during 2023, reflecting
the provisions required against legacy
loans. The credit performance across
of the rest of the Group’s loan book
remains resilient with actual losses
incurred being less than 1% of loans
advanced.
See Note 22 (5) for further details.
Increases in material costs, base rate
and inflation have created downside
risk through potential delays in loan
repayments and reduced recoveries.
Increased loan management oversight
will help mitigate this risk.
5. Operational Risk – Execution of
the Sancus strategy
Medium
The majority of Sancus’s capital has
been deployed into the Sancus Group.
There is a risk that the planned growth
of these businesses will not be realised
primarily as a result of sub optimal levels
of loan origination and funding.
The Board and Executive Committee of
Sancus Group recognise the challenge
of
building the business to meet the
financial targets and actively manage
all aspects of the business on an
ongoing basis. Plans and budgets are
in place and performance against
these is monitored regularly by the
management team and the Executive
Committee.
There continues to be strong demand
from both Borrowers and Co-Funders
for the lending products offered across
the business, and the risk adjusted
returns available to Co-Funders.
By its nature, this risk remains an on-
going area of focus for the Board,
particularly with respect to business
development in the UK and Ireland.
The emergence of Covid-19 created
downside risk on new loan origination
levels although we believe this risk has
now dissipated.
IT capabilities for Sancus were further
enhanced in recent years
, providing
Co-
Funders with online interactive
services and creating operational
efficiencies.
11
Sancus Lending Group Limited
For the year ended 31 December 2023
PRINCIPAL RISKS, UNCERTAINTIES AND RELATED INTERNAL CONTROLS (Continued)
6. Operational Risk – Operating
entities
High
Loan funding is provided by a blend of
institutional and co-funding models,
with jurisdictional variations in the
utilisation of these models. The limited
availability of diverse funding presents
an operational risk to continued growth
of the lending model.
With the recent focus on increasing the
loan book and resourcing the operation
effectively, there is a risk that
management of the existing loan book
is under resourced and key milestones
in the loan lifecycle are missed.
With reliance on various proprietary
and third-party IT systems to conduct
the lending operations, whilst ensuring
these systems remain effective for the
business, enable automation, are
utilised to maximum effect, maintain
data integrity and remain secure from
external factors remains an ongoing
challenge and presents potential risks.
The Executive Committee of Sancus
Group are in active engagement with
additional institutional funding lines to
increase diversity and consider cost of
funds and continue to evolve the co-
funder model with the view to increase
exposure across the lending
operation.
The lending operation is mitigating this
through the introduction of technology
improving oversight of key milestones
and is actively engaged in acquiring
additional resource for loan
management.
Introduction of new technology to
compliment the existing operational
framework ensures elements of these
risks are mitigated with effective
automation and data resilience.
Continual development of the existing
technology and enhancements to the
back-office systems ensures the
systems remain secure.
Oversight of these risks is completed
by the Executive Risk Committee, with
agreement on the mitigation
necessary to minimise the risks and
monitoring to ensure these controls
are effective.
7. Investment risk – FinTech
Ventures Platform Valuations
Low
Across the majority of the FinTech
portfolio, the growth rates historically
have been slower than originally
anticipated and the business models
have proved more capital intensive.
Many of the FinTech platforms require
additional capital to fund their ongoing
growth to enable them to reach
profitability. There remains a risk that
some platforms may not be successful
in the longer term, either as a result of
lack of loan funding, lack
of working
capital funding or difficulties in
establishing a competitive position in
their chosen markets.
The Group has board observer rights
on most of the remaining investee
company boards and thus is able to
participate in the strategic discussions
and monitor the progress on each
platform.
The Group regularly monitors the
progress of each business, with regular
review of financial and KPI reporting.
Quarterly valuations are conducted for
all investments in platforms. These are
based on a variety of factors including
the pricing for any recent relevant
capital transactions by the respective
platform or using an appropriate
valuation methodology.
As a result of the platforms taking
longer to reach profitability, and given
that several are seeking additional
capital, the Board has valued our
holding of the FinTech portfolio at Nil at
the end of 2023 (2022: £Nil).
The valuations are also subject to a
number of material estimation
uncertainties, refer to Note 22 (4).
12
Sancus Lending Group Limited
For the year ended 31 December 2023
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
Introduction and ESG ambition
We have been focusing on a data-driven approach and continue to utilise our materiality assessment to help prioritise the key
ESG issues for our business and stakeholders. This section is an executive summary of Sancus’ full ESG report, which will
be made available on our website.
Our headline objectives are:
Environmental
Social
Governance
Promote the efficient use of resources
by reducing the environmental impacts
associated with our operations and
business activities.
Enhance our approach to social
impact by supporting our people and
communities to thrive.
Strengthen our governance around
decision-making, data and reporting to
support our internal and external
stakeholders in delivering our ESG
goals.
We are committed to reducing our carbon emissions and have focused on improving the quality of data that allows us measure
our impact in order to lay the foundations for targeted action on reduction. Beyond our operations, we acknowledge the influence
we can have on emissions in the built environment and are also working with partners to understand the role we play in
promoting sustainable practices.
We also continue our commitment to improving the communities we operate in through local economy investment and
delivering voluntary programmes. Finally, we continue to work towards a more diverse leadership approach and maintain high
ethical standards across our business through our governance practices.
This report measures our progress against these priorities, which we will continue to report on an annual basis going forward.
Our plan and priorities
In 2022, we noted we are at the beginning of Sancus’ ESG programme. We have a team in place focusing on ESG and are
supported by industry experts. The ESG team have the full support of the Executive team. Over the last 12 months, we have
focussed on improving our data collection and reporting processes, including working to improve data collection from third-
party suppliers and partners. We see this as a key enabler of our action on ESG. Employee health and wellbeing has also
been a key focus, with multiple initiatives being taken over the last 12 months to continue building on our company culture and
ultimately our business success. We will continue to ensure appropriate resources are available to help us achieve our ESG
targets.
Our ambition is for ESG to become an integrated part of Sancus and be established in all our practices. We will leverage this
to deliver positive impacts for our stakeholders while continuing to help drive long-term value and growth for Sancus.
The key overarching priorities for Sancus are set out below. We have also outlined specific progress to date and next steps
across our ESG objectives.
1. Improving our ESG data maturity and addressing quick wins.
2. Strengthening our ESG capability by building expertise and embedding into wider business decision-making processes.
3. Establishing targets and accelerating action on our most material ESG topics.
4. Exploring ways of leveraging ESG in the delivery of business value to influence industry change.
Our key enablers
The key enablers for us to achieve our ESG objectives are:
• Data- continuing to improve our systems and processes ensuring quality data is obtained to maximise confidence in
our measurement against targets and how we report.
• Employee engagement - placing our people at the centre of our ESG strategy to understand how our business impacts
on them and how they can be empowered to have an impact on our business from an ESG perspective.
• Technology - integration of technology to support business scale and enhance delivery of our ESG strategy and data
collection whilst streamlining the business operations.
• Training - continued education and training of key ESG matters with a focus on building employee engagement and
confidence.
13
Sancus Lending Group Limited
For the year ended 31 December 2023
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (Continued
)
Our ESG journey
We summarise our ESG progress and commitments below.
E
nvironment
Focus area
2023 Commitment
2023 Outcome
Challenges
2024 Commitment
Carbon
Emissions
Identify, prioritise and
implement ‘low
hanging fruit’
measures to reduce
our footprint.
Office relocation in UK
has led to a new all
renewable electricity
energy contract, with
lower energy
consumption expected.
Access to building
energy use data has
been built into the lease.
Consolidation of the
offshore operations into a
single location
will allow us to reduce
energy consumption.
Despite progress and
engagement, it can still
be difficult to obtain
carbon emission data
from key service
providers.
Encouraging all our office
providers to switch to
renewable electricity.
Improve quality and
granularity of data being
captured through
continued engagement
with suppliers and
improved internal
reporting.
Use improved granularity
to consider which areas we
can have an impact on
emissions reduction.
An enhanced view of
our carbon footprint
through improving its
scope and data
quality.
Data quality has
improved which will start
allowing us to focus on
key areas for emission
reduction.
We want to further
improve our data quality.
Waste and
Circularity
Identify waste hot
spots and
opportunities for
reduction.
Through employee
engagement and the
office updates, we have
implemented improved
waste collection. We are
considering ways to
further reduce waste
reduction (e.g. reducing
single use plastic usage).
Greater engagement with
office providers and
capture of improved
data.
There are constraints in
obtaining quality and
granular waste data
from our service
providers.
Improve recycling
provisions at
Jersey office.
Continue employee
engagement for additional
waste management and
usage initiatives.
Identify measures to
improve data quality
through improved
engagement with service
providers to identify
hotspots for simple
improvements in waste
management.
14
Sancus Lending Group Limited
For the year ended 31 December 2023
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (Continued)
E
nvironment (continued)
Social
Focus area
2023 Commitment
2023 Outcome
Challenges
2024 Commitment
Community
building
A clearly defined set
of social value
measures (using
National Themes
Outcomes and
Measures (“TOMs”))
for community
building.
We aim to capture
quantitative data through
TOM’s framework in
2024.
Employee volunteering
hours included in staff
handbook.
Employees have
engaged within the
community.
We need to better
understand the TOM’s
framework and how we
can score against it.
Some
progress has been
achieved through
employee engagement.
Support the ESG team to
better
understand TOMs
framework better to allow
clearer reporting for 2024
which is aligned with the
principles of TOMs.
Diversity,
equity and
inclusion
(DE&I)
DE&I metrics for
gender diversity,
gender pay gap and
ethnic representation
have been recorded
and reported on.
An informed view of our
performance across key
DE&I metrics.
Due to the nature and
scale of the current
operation and staffing
levels we have limited
influence on DE&I.
Collect data on
socioeconomic diversity
of our people, following
guidance from the Social
Mobility Commission, to
benchmark ourselves
against the wider
industry.
Focus area
2023 Commitment
2023 Outcome
Challenges
2024 Commitment
Business
Travel
Establish a
sustainable business
travel policy.
We have not been able
to implement a
sustainable business
travel policy given data
constraints and business
priorities.
Steps have been taken
to improve how we
capture data regarding
our business travel and
are being implemented
during 2024. This
includes an updated
expense process to
calculate business
mileage (air, road, rail).
Improved collection of g
business travel data will
allow us to identify
opportunities for reducing
our impact and enhance
sustainable business
travel. This will include the
use of more sophisticated
expense management
technology.
Develop high-level
sustainable business travel
policy with a view to
enhance the policy in the
future.
Climate
Resilience
Deeper
understanding of
what climate
resilience means to
Sancus.
We have identified some
areas and plan to make
further progress.
Although we have
made some progress
we need to further
enhance our
understanding here.
We have embedded high-
level questions into the
Initial Credit
Assessment, which is the
core initial document for
considering loan proposals
for borrowers.
Identify and assess how
Sancus can fully
understand and
incorporate climate
resilience in its day-to-day
business.
15
Sancus Lending Group Limited
For the year ended 31 December 2023
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (Continued)
S
ocial (continued)
Focus area
2023 Commitment
2023 Outcome
Challenges
2024 Commitment
Employee
health and
wellbeing
An informed view of
our employee health
and wellbeing to
inform future
initiatives.
Regular wellbeing
initiatives promoted to all
staff.
Additional MHFA’s
trained during 2023.
Mental Health at Work
employee training
provided as part of the
annual training cycle with
100
% of employees
having completed the
module.
The impact and
effectiveness of our
health and wellbeing
initiatives is difficult to
measure given the size
of our business.
Conduct further, targeted
employee engagement
surveys to identify
important insight on how
we are progressing.
Continue delivering well-
being initiatives to our
staff and identify areas
for improvement.
Identify how to measure
success through the
TOM’s framework
following upskilling of the
ESG team.
Local
economic
growth
A clearly defined set
of social value
measures (using
National TOMs) for
local economic
growth.
Sancus believes the
nature of development
projects which are funded
across the group
naturally supports local
jobs and community
growth. We are not yet in
a position to fully
substantiate this claim
and are endeavouring to
improve our capability.
Sancus provides funding
for developments which
help increase housing
availability and creating
local economic growth.
Given the size of our
business this is difficult
to report on
quantitatively.
Build capacity to improve,
measure and report on
local economic value
across our operations
and align with National
TOMs measures where
relevant.
16
Sancus Lending Group Limited
For the year ended 31 December 2023
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (Continued)
G
overnance
Focus area
2023 Commitment
2023 Outcome
Challenges
2024 Commitment
Ethical business
practices
Promote ethical
business practices
throughout supply
chain.
Has been embedded
through Anti-bribery,
Anti money
laundering and
Modern Slavery
policies.
Ethics policy has
been drafted for
Implementation early
2024.
Annual training now
includes ESG and
Mental Health
subjects.
High level ESG data
being collected on the
Initial Credit
Assessment of new
loans.
Many of the
borrowers are small
businesses with no
published ESG
strategy and limited
resource to
implement such
strategies.
Increase engagement
with new borrowers to
promote ESG
considerations and
capture how the
development can
meet certain criteria.
Continue promoting
the importance of
ethical business
practices and
providing additional
staff training to
support this.
ESG management
Embed ESG into risk
and data
management
approach and have
grown ESG
awareness and
knowledge.
ESG is a discussion
point in board
meetings and a
growing
understanding is
present.
Our largest
institutional funding
partner requires ESG
key metrics and an
understanding of our
ESG strategy and has
the ability to either
offer discount or
increase rates
depending on scoring,
which enhances their
own ESG strategy. In
2023 we achieved a
discount
As a lean business
operating in a
challenging
environment,
completing priorities
need managing to
ensure we can meet
all the needs of
stakeholders,
including ESG.
Our newly appointed
CFO, Keith Lawrence,
has joined the ESG
Team driving top-level
engagement and
enhancing the board
oversight of our
strategy.
Responsible
investment
ESG is integrated into
our funding decisions.
ESG has been
embedded into
lending decisions
through capturing
high-level client ESG
strategy data.
Lack of ESG focus for
developers, which are
typically small
businesses with
limited resources and
understanding of ESG
matters.
Improve education of
key ESG matters with
borrowers
. Continue
to improve data
capture and enhance
reporting to identify
successes and
opportunities.
Transparency and
reporting
Explore alignment of
ESG reporting and
disclosure with
relevant industry
frameworks.
Review of external
ESG landscape
performed allowing
greater understanding
of reporting and
disclosure
requirements.
There is still
opportunity for the
ESG team to improve
their understanding
and communicate key
learnings to
management.
Exploration of the
IFRS Sustainability
Disclosure Standards
to evaluate potential
implications for our
ESG strategy and
reporting and identify
capability gaps.
17
Sancus Lending Group Limited
For the year ended 31 December 2023
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (Continued)
Task Force on Climate-related Financial Disclosures (“TCFD”) Statement - 2023
Governance - Sancus’ governance around climate-related risks and opportunities.
Describe the board’s oversight of climate-related risks and opportunities.
As set out in the Corporate Governance section, in addition to its requirement to comply with the AIM Rules, Sancus has chosen
to comply with the QCA Corporate Governance Code. The Sancus Board has overall responsibility for business strategy,
including setting the strategy, approach and monitoring its implementation. The Board receive quarterly reports from Executive
Management, which includes matters relating to environmental, social and governance (“ESG”) including climate-related risks.
The CEO is responsible for delivering the business strategy including ESG and climate-related risk matters and is present at
board meetings including those where ESG and climate-related matters are discussed, with these discussions helping to steer
the overall strategy.
Describe management’s role in assessing and managing climate-related risks and opportunities.
Day-to-day management of ESG and climate-related matters has been delegated to the Executive Management, with
representatives from across the business as members of the ESG Team, who review ESG and climate-related data and issues
and provide recommendations to the Executive Management for new initiatives, activities and overall strategy for ESG and
climate-related matters.
Strategy - Impacts of climate-related risks and opportunities on the business, strategy and financial
planning.
Describe the climate-related risks and opportunities the organisation has identified over the short, medium, and long
term. Describe the impact of climate-related risks and opportunities on the organisation’s businesses, strategy, and
financial planning.
Sancus considers risk and opportunities in the short, medium and long term:
Short: 0-1 years Medium: 1-5 years Long: 5-10 years
Sancus’ core business model is the provision of short-term funding for property development and bridging. Climate-related
risks and opportunities potentially impact the business model in several ways. The company has identified climate-related risks
across the TCFD’s two major categories: (1) risks related to the transition to a low-carbon economy and (2) risks related to the
physical impacts of climate change - summarised in Table 1 below.
Through this, Sancus will be able to assess climate-related risks and also consider what climate-related opportunities are
available, how these opportunities can be developed within the overall strategy and will report on the short-, medium- and long-
term objectives as we progress.
Our ESG report provides details of the key emissions data across Scope 1, Scope 2 and Scope 3 greenhouse gas emissions
(“GHG”), from across the various offices and staff locations the company operates from. We are working with our key suppliers
to improve the quality of data available and which will allow us to better measure GHG. Presently, and due to this, Sancus has
not defined a strategic target for reducing emissions. However, through initiatives such as the consolidation of office locations
in 2023 and our plans for a sustainable business travel policy, we believe there is scope to achieve quick wins to reduce
emissions over the medium-term. We will focus on achieving reduction through continued engagement with key providers over
the long-term.
18
Sancus Lending Group Limited
For the year ended 31 December 2023
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (Continued)
Describe the resilience of the organisation’s strategy, taking into consideration different climate-related scenarios,
including a 2°C or lower scenario.
Sancus continues to develop in responding to its requirements under TCFD and, currently, does not have the capability and
resources to perform climate scenario analysis as part of the reporting exercise. We recognise the importance of incorporating
climate scenario analysis into our strategic planning to ensure sustainable growth and resilience. To address this, we are
developing a comprehensive plan to build our internal capabilities, including investing in training and improving our data capture
systems. We anticipate that we will be fully equipped to conduct thorough climate scenario analyses within the next 3-4years.
T
able 1a - Summary of Sancus’ climate-related risks
Type
Climate-related risk
Potential financial impact
Timeframe
Transition
risks
Policy & legal
Change in building regulation
policy, such as imposing
minimum EPC/BER ratings.
Increased build cost for clients
to meet improved policy
standards.
Medium
Market
Change in home purchaser
preferences, such as a
preference towards more
energy efficient homes.
Reduced demand for sale of
older buildings, resulting in
extended exit, or inability to
sell homes.
Long
Reputation
Reputational risk, such as
increased scrutiny from co-
funders and investors.
Reduced availability of
appropriate funding lines or
increased cost of funds to
meet investor expectations
Medium
Physical
risks
Physical risk
Increased severe weather
events as a result of global
warming and changing
climates, such as increased
flood risks.
Reduced asset values due to
changes in flood risk
assessments by local
authorities/Environment
Agency.
Medium/Long
Physical risk
Increased severe weather
events as a result of global
warming and changing
climates, such as increased
drought and erosion risks.
Reduced asset values due to
changes in subsidence
assessments by local
authorities/British Geological
Survey.
Medium/Long
Table 1b - Summary of Sancus’ climate-related opportunities
Type
Climate-related opportunity
Potential financial impact
Timeframe
Products
Develop lending products incentivising
borrowers to meet high energy
efficiency ratings.
Increased demand for built assets
resulting in improved exit strategies.
Med
Increased interest from co-funders and
investors helping maintain or decrease
cost of funding.
Med
19
Sancus Lending Group Limited
For the year ended 31 December 2023
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (Continued)
Risk Management - Climate-related risk management and metrics
Describe the organisation’s processes for identifying and assessing climate-related risks.
Sancus continues to develop its strategy for identifying, assessing and managing climate-related risks and opportunities. Our
ESG Team, reporting to the Executive Management and Board are responsible for our overall ESG risk management
framework, including identifying and assessing climate-related risks and providing reporting to the Board. Our credit-risk
processes include assessment of known climate related risks (e.g. flood risk).
Sancus recognises further investment in training and support for the ESG Team is fundamental in building out this strategy
over the medium term.
D
escribe the organisation’s processes for managing climate-related risks.
Sancus recognises further investment in training and support for the ESG Team is fundamental in building out a strategy for
managing climate-related risks over the medium term and is committed to providing the resource necessary to achieve this.
D
escribe how processes for identifying, assessing, and managing climate-related risks are integrated into
the organisation’s overall risk management.
Through the Executive Risk Committee, Sancus intends to further integrate climate-related risk management into the overall
risk management strategy within the next 12-24 months.
Metrics and Targets
Disclose the metrics used by the organisation to assess climate-related risks and opportunities in line
with its strategy and risk management process. Disclose Scope 1, Scope 2, and, if appropriate, Scope 3
greenhouse gas (GHG) emissions, and the related risks.
Presently, the focus has been on capturing quality data relating to the energy usage of the operations with a view to developing
strategies for carbon emissions reduction. This data is focused on GHG emissions, using the GHG protocol for understanding
Scope 1, Scope 2, and Scope 3 emissions.
2023
GHG Emissions data
tCO2e
%
Scope 1
3.954
9.40
Scope 2
2.449
5.82
Scope 3
35.649
84.77
Emissions by source
Sancus Lending Group Limited
20
For the year ended 31 December 2023
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (Continued)
Capturing and understanding quality emissions data is key to developing a carbon reduction strategy. Despite progress and
engagement, it can still be difficult to obtain carbon emissions data from key service providers. Data quality has improved over
the last 12 months. However, improvements in data capture from key providers is pivotal in enabling Sancus to identify
opportunities for reducing GHG emissions over the medium to long term, which is part of the overall ESG strategy.
Describe the targets used by the organisation to manage climate-related risks and opportunities and
performance against targets.
Sancus recognises that it operates in the UK which has made a commitment to transition to a net zero economy (under the
Climate Change Act 2008 (Order 2019)). As part of our annual ESG and GHG emissions reporting exercises, we have
considered our level of maturity in being able to develop and disclose a climate transition plan.
At present, Sancus is still building out and developing its capability for GHG emissions calculations with the intention of
developing a realistic carbon reduction plan. Principally, we are still addressing key gaps in data availability and quality that
allow us to build a complete picture of our GHG emissions as a company, therefore impairing our ability to set a robust baseline
for emissions reduction targets. We plan to address data availability and quality issues through further engagement with key
providers and aim to have established a science-based net-zero target in the next coming years.
Summary
Whilst Sancus is committed to addressing climate-related risks and understands the importance of becoming a more
responsible and sustainable business, we acknowledge we are in the early stages of developing our overall climate strategy
and through the ESG programme, will continue to assess and refine the strategy, recognising that ESG and climate-related
risk management is an on-going commitment, rather than a one-time initiative.
21
Sancus Lending Group Limited
For the year ended 31 December 2023
CORPORATE GOVERNANCE
Board of Directors and Executive Management Team
Introduction
The Board recognises the importance of a strong corporate governance culture.
The composition of the Board is the subject of ongoing review. Somerston Group had the right to nominate a candidate for
appointment to the Board and presently exercises this right via the appointment of Tracy Clarke (bio noted below).
B
oard of Directors
The Company operates a unitary Board Structure, comprised of both Executive and Non-Executive Directors. Biographical
details of the Directors can be found below. The terms of Directors’ appointments are available from the Company Secretary.
On joining the Board, any new director will have received an induction through face to face meetings with existing directors,
senior management and the Company Secretary.
The Chairman leads the Board and is responsible for its overall effectiveness in directing the Company, its corporate
governance responsibilities, and addressing any training or development needs of the directors.
Steve Smith – Independent Non-Executive Director
Mr Smith was formerly an Executive Director and the Chief Investment Officer of The British Land Company plc, the FTSE 100
property investment trust, with responsibility for the group’s property and investment strategy, standing down in 2013. Prior to
this, Mr Smith was Global Head of Asset Management and Transactions at AXA Real Estate Investment Managers, where he
was responsible for the asset management of a portfolio of assets valued at more than €40 billion on behalf of life funds, listed
property vehicles, unit linked and closed end funds. Prior to joining AXA in 1999, Mr Smith was Managing Director at Sun Life
Properties for over five years. Over the last decade, Mr Smith has worked extensively in governance related roles for a number
of property focused organisations. Mr Smith is Chairman of the Board and is a member of the Audit and Risk Committee and
Remuneration and Nomination Committee. Mr Smith was appointed to the Board on 11 May 2021. He is resident in the UK.
John Whittle - Independent Non-Executive Director
Mr Whittle has a background in large third party Fund Administration. He has worked extensively in high tech service industries
and has in-depth experience of strategic development and mergers/acquisitions. He has experience of listed company boards
as well as the private equity, property and fund of funds sectors. He is currently Chairman of Starwood European Real Estate
Finance Limited and Director and Audit Chair of The Renewable Infrastructure Group Ltd (“TRIG”) (both listed on the main
market of the London Stock Exchange) and Director and Audit Chair of Chenavari Toro Income Fund Limited (admitted to
trading on the Specialist Fund Segment of the London Stock Exchange). Mr Whittle, a Chartered Accountant, has also served
as Finance Director of Close Fund Services Limited (responsible for internal finance and client financial reporting), Managing
Director of Hugh Symons Group PLC and Finance Director and Deputy MD of Talkland International Limited (now Vodafone
Retail).
Mr Whittle was appointed to the Board, the Audit and Risk Committee and the Remuneration and Nomination Committee on
23 September 2016, after having served as an Alternate Director since December 2015. He is resident in Guernsey. Mr Whittle
is Chairman of the Audit and Risk Committee, and of the Remuneration and Nomination Committee.
Tracy Clarke – Non-Executive Director
Ms Clarke is a representative of the Somerston group of companies (“Somerston”), the Company’s largest shareholder which
has the right to nominate one individual for appointment to the Board. Ms Clarke joined Somerston in 2016 and acts as the
Group’s Chief Operating Officer. Ms Clarke is also Managing Director of Carlton Management Services Limited, a licensed
Jersey trust company business. Prior to joining Somerston, Ms Clarke worked for Deutsche Bank in Jersey and Zurich for over
10 years, specialising in financial Intermediary and external asset manager business. Ms Clarke is a Fellow of the Institute of
Chartered Accountants in England and Wales and holds the CISI Investment Advice Diploma. Ms Clarke was appointed to the
Board on 8 March 2022 and is a member of the Company’s Audit and Risk Committee and Remuneration and Nomination
Committee.
22
Sancus Lending Group Limited
For the year ended 31 December 2023
CORPORATE GOVERNANCE (Continued)
Rory Mepham – Executive Director
Rory joined Sancus in January 2021, assuming the role of Interim CEO on 1 July 2021 and was then confirmed as CEO and
board member on 23 November 2021. Joining Sancus from The Somerston Group where he managed their European property
platform which includes businesses in the hotel, retail, land development, student housing and PRS sectors. Rory has over 20
years experience in the UK and European property market. He has spent his career working with institutional capital and has
an extensive track record in M&A, corporate finance, capital raising, debt finance, investment management and property
development. Rory holds an MBA from the Cranfield School of Management, a BSc (Hons) in Land Management from the
University of Reading and qualified as a member of the Royal Institute of Chartered Surveyors (MRICS).
E
xecutive Management Team
Rory Mepham – Chief Executive Officer
See above.
Keith Lawrence – Chief Financial Officer
Keith was appointed to the Executive Management Team on 1 April 2024. Keith has over 30 years experience in the financial
services industry. After qualifying as a Chartered Accountant with KPMG Keith worked in investment banking for 20 years,
focussing primarily on financial services clients. Prior to joining Sancus Keith was the CFO of an innovative private equity
backed residential construction business. Keith holds a BA(Econ)(Hons) in Accounting and Finance from the University of
Manchester. Keith joined Sancus in February 2024.
James Waghorn – Chief Investment Officer
James was appointed to the Executive Management Team on 8 March 2022. James has over 14 years experience in the UK
and European property market. James has extensive experience across the corporate real estate, investment and property
development sectors. For the past 6 years James has led Somerston’s land development business, a strategic land and
development focused business with capacity for in excess of 2,350 units within its strategic portfolio. James holds a BSc in
Investment and Finance in Property from the University of Reading and is MRICS accredited. James joined Sancus in January
2021.
23
Sancus Lending Group Limited
For the year ended 31 December 2023
GOVERNANCE FRAMEWORK
The Board is committed to maintaining high standards of corporate governance throughout the Company’s operations and to
ensuring that all of its practices are conducted transparently, ethically and efficiently. The Board believes that scrutinising all
aspects of the Company’s business and reflecting, analysing and improving its procedures will minimise the potential for
downside risk and will preserve shareholder value. In compliance with the AIM Rules for Companies, published March 2018,
the Company has chosen to comply with the provisions of the QCA Corporate Governance Code (the “QCA Code”). The
Company is also mindful of the provisions of the Finance Sector Code of Corporate Governance, as amended by the Guernsey
Financial Services Commission in November 2021.
The Board believes that applying the principles and reporting against the provisions of the QCA Code accurately reflects the
nature, scale and complexity of the business and enables the Board to provide information to shareholders on its activities in
accordance with the principles set out in a recognised governance framework. Furthermore, through applying the relevant
provisions the Company is better positioned to mitigate downside risk and in doing so, preserve long-term shareholder value.
The Company’s corporate governance framework has been based on these principles and is designed to deliver the Group’s
strategy, and the application of such principles to the operation of the Board ensures that its decision-making processes remain
focussed on the long-term sustainable success of the Company.
As at 31 December 2023, the Company complied substantially with the relevant provisions of the QCA Code and it is the
intention of the Board that the Company will comply with these provisions throughout the year ending 31 December 2024, save
with regard to the following:
• The appointment of a Senior Independent Director: Given the size and composition of the Board, the Board does not
consider it is necessary to appoint a Senior Independent Director. The Board considers that all the independent Directors
have different qualities and areas of expertise on which they may lead where issues arise and to whom concerns can be
referred.
• Internal audit function: The Board has considered the need for an internal audit function and is satisfied that the
compliance policies, procedures and reporting mechanisms in place throughout the group are sufficient, and that
implementing a separate internal audit function would be unnecessary. This requirement is assessed annually by the
Audit and Risk Committee.
How we apply the QCA Code
The Company has established specific formally constituted committees and implemented certain policies, to ensure that:
• It is led by an effective Board which is collectively responsible for the long-term sustainable success of the Company and
establishes a culture whereby the tone is set from the top which is consistent with the objectives, strategy and business
model of the Group.
• The Board and its committees have the appropriate balance of skills, experience, independence, and knowledge of the
Company to enable them to discharge their respective duties and responsibilities effectively.
• The Board establishes a formal and transparent arrangement for considering how it applies the corporate reporting, risk
management, and internal control principles and for maintaining an appropriate relationship with the Company's auditors.
• There is a dialogue with shareholders based on the mutual understanding and alignment of objectives, conducted
primarily through the CEO and the Corporate Broker.
Risk management remains a key area of focus during Board meetings. Details of the Company’s risk management and internal
control framework is set out on pages 9-11.
24
Sancus Lending Group Limited
For the year ended 31 December 2023
GOVERNANCE FRAMEWORK (Continued)
Composition and Independence of the Board of Directors
The Board of Directors is responsible for ensuring the affairs of the Company are properly managed through formulating,
reviewing and approving the Company's strategy, budgets, and corporate actions and that oversight, scrutiny and challenge is
applied to Executives responsible for the day-to-day activities of the Group. The Company seeks to deliver long-term growth
for shareholders and maintain a flexible, efficient and effective management framework within an entrepreneurial environment.
It is important that the Board itself contains the right mix of skills and experience in order to deliver the strategy of the Company.
As such, the Board is comprised of:
• Two Independent Non-Executive Directors, one of which serves as the Chairman, who is responsible for leadership of
the Board and ensuring its effectiveness on all aspects of its role.
• One Non-Executive Director who, whilst sharing the fiduciary and statutory duties of the independent directors, is also an
executive director of the Somerston Group, a significant shareholder of the Company, and therefore not considered
independent under the QCA Code.
• Two Executive Directors, who are also members of the Group’s Executive Committee and are therefore not considered
independent under the QCA Code.
The Board is comprised of individuals holding professional qualifications and experience relevant to the activities of the
Company. A biography of each of the Directors is included on pages 21 and 22. The time requirement expected from each of
the Directors is set out in writing in their respective appointment letters.
Liberum Capital has been appointed as the Company’s Corporate Broker and Nominated Adviser under the AIM Rules and
advises on compliance with the AIM Rules, corporate communications and acts as financial adviser to corporate actions.
Additionally, the Company has appointed a professional Company Secretary who assists the Board of Directors in preparing
for and running effective board meetings, including the timely dissemination of appropriate information. The Company Secretary
provides guidance to the extent required by the Board on certain aspects of the legal and regulatory environment, within which
the Company operates.
The Board believes that long serving Directors should not be prevented from forming part of the Board or from acting as
Chairman and no limit has been imposed on the overall length of service of the Directors. Each Director will retire and seek
reappointment at every third annual general meeting, with those serving for nine years or more subject to reappointment
annually. The Board meets on at least a quarterly basis during the financial year.
The Board has appointed several committees to support it in different areas of the business; each with formal terms of
reference, with specific roles as set out below.
The Board undertakes an annual evaluation of its own performance, the performance of its formally constituted committees
and that of individual Directors. This includes a formal process of self-appraisal reviewing the balance of skills, experience,
independence and diversity present on the Board, and individual director performance, contribution and commitment to the
Group to ensure that the Board and its committees continue to operate effectively, or to identify areas where action is required.
The remainder of the Board is responsible for evaluating the performance of the Chairman. The Chairman also has
responsibility for assessing the individual Board members’ training requirements. No significant findings were identified in the
2023 evaluation which required further action.
The Directors remain mindful of the benefits which can flow from increasing the level of diversity represented on the Board
including, but not limited to, cultural, gender, experience and background. Such factors will be taken into consideration by the
Nomination Committee during any selection process.
Executive Management Team
As at the year end, the Company’s Executive Management Team comprised Rory Mepham (Chief Executive Officer), Tracy
Clarke (Interim Chief Financial Officer), and James Waghorn (Chief Investment Officer) (together the “Executive Management
Team” or “Management”). Management are responsible for the day-to-day management of the Company’s operations. The
non-executive independent Directors monitor and evaluate the performance of the Management Team on an ongoing basis.
25
Sancus Lending Group Limited
For the year ended 31 December 2023
BOARD COMMITTEE STRUCTURE
Audit and Risk Committee
The Audit and Risk Committee conducts formal meetings at least twice a year. The Audit and Risk Committee’s key duties
include:
• Monitoring the integrity of the financial statements of the Group, including its annual and half-yearly reports and any other
formal announcement relating to its financial performance, reviewing, challenging (where necessary) and reporting to the
Board on significant financial reporting issues and judgements which they contain having regard to matters communicated
to it by the auditor, and how they were addressed.
• Reviewing the Group’s internal financial controls and the Group’s internal control and risk management systems.
• Making recommendations to the Board for it to put to the shareholders for their approval in general meeting in relation to
the appointment, re-appointment or removal of the external auditor and to recommend the remuneration and terms of
engagement of the external auditor.
• Monitoring the external auditor’s independence and objectivity and the effectiveness of the audit process, taking into
account relevant professional and regulatory requirements.
• In conjunction with executive management, advise the Board on the overall risk appetite, tolerance and strategy of the
Group, current risk exposures and future risk strategy.
• Keep under review the Group’s overall risk assessment processes that inform the Board’s decision making, ensuring both
qualitative and quantitative metrics are used.
The Audit and Risk Committee has three members, two of whom are independent, non-executive directors and one of whom
is a non-executive director, and at least one member has recent and relevant financial experience. The current members of
the Committee are John Whittle as the Chairman, Steve Smith and Tracy Clarke.
The Audit and Risk Committee is supported by a risk management and oversight process employed by the Executive
Management Team and receives reports twice a year on key risks and developments during the period, or as otherwise required
in the case of a material development.
The terms of reference of the Audit and Risk Committee are available from the Company Secretary.
Remuneration and Nomination Committee
The purpose of the Remuneration and Nomination Committee is to determine and agree with the Board the framework or broad
policy for the remuneration of the Company’s Directors, senior executives, and any bonus-related arrangements in place by
the Company as well as to consider the structure, size and composition of the Board. The key duties of the Remuneration and
Nomination Committee include:
• Determining and agreeing with the Board the framework or broad policy for the remuneration of the Company’s Chairman,
executive and non-executive directors and such other members of the management as it is designated to consider.
• Reviewing the ongoing appropriateness and relevance of the remuneration policy.
• Reviewing the structure, size and composition of the Board.
• Considering the succession planning for Directors and the Executive Management Team.
• Reviewing the leadership needs of the organisation.
• Identifying candidates for appointment to the Board.
The Remuneration and Nomination Committee has three members, all of whom are non-executive directors and two are
independent. The current members of the committee are John Whittle as the Chairman, Steve Smith and Tracy Clarke.
26
Sancus Lending Group Limited
For the year ended 31 December 2023
BOARD COMMITTEE STRUCTURE (Continued)
The terms of reference of the Remuneration and Nomination Committee are available from the Company Secretary.
Please refer to the Remuneration Report on page 30 for details of fees paid to the Directors during the year.
Meetings and attendance
The Directors meet on a quarterly basis (‘Quarterly’ meetings per the table below) and at other unscheduled times (‘Other’
meetings per the table below) when necessary to assess Group operations and the setting and monitoring of strategy and
performance.
The table below, details the attendance of the Board at eligible Board and Committee meetings during the year, noting that
certain Directors retired or were appointed during the course of the year as set out below the table:
Board
Quarterly Other
Remuneration &
Nomination
Committee
Audit and Risk
Committee
Total number of meetings held
during the year
4
3
1
3
Stephen Smith
4 of 4
3 of 3
1 of 1
3 of 3
John Whittle
4 of 4
3 of 3
1 of 1
3 of 3
Tracy Clarke
3 of 3 (plus 1 as
Observer pre-
appointment)
3 of 3 N/A 3 of 3
Emma Stubbs (resigned 30 March
2023)
1 of 4 1 of 3 N/A N/A
Rory Mepham
4 of 4
3 of 3
N/A
N/A
Relations with Stakeholders
The Board’s advisers and the Executive Management Team maintain regular dialogue with key shareholders, the feedback
from which is reported to the Board and the Chairman. Shareholders who wish to communicate with the Board should contact
the Company Secretary in the first instance, whose contact details can be found on page 86.
The Board also regularly monitors the shareholder profile of the Company. All shareholders have the opportunity to and are
encouraged to attend the Company’s annual general meeting at which members of the Board are available in person to meet
shareholders and answer questions.
Whilst the primary duty of the Directors is owed to the Company as a whole, the Board takes into consideration the interests of
all key stakeholder groups as part of its decision-making process and particular consideration is given to the impact of any
decision on holders of its securities, the Co-Funders to the underlying loan businesses, and providers of the Group’s long-term
debt capital. The Board also recognises the crucial roles played by those involved throughout the Group’s operations who
contribute to delivering strategy, including staff and key service providers, to ensure a continued alignment of interests between
their activities and those of the Company.
Terms of Reference of Committees
Committee Terms of Reference are available from the Company Secretary.
27
Sancus Lending Group Limited
For the year ended 31 December 2023
AUDIT AND RISK COMMITTEE REPORT
The Audit and Risk Committee
The Audit and Risk Committee has a formal terms of reference mandate documenting the duties and responsibilities which it
has been delegated by the Board. These are available from the Company Secretary. The Audit and Risk Committee has been
in operation throughout the year under review.
Chairman and Membership
The Audit and Risk Committee comprises of John Whittle as Chairman, Steve Smith and Tracy Clarke. Only Non-Executive
Directors serve on the Audit and Risk Committee and members of the Audit and Risk Committee have no links with the
Company’s external auditor and are independent of the Executive Management Team. The Audit and Risk Committee meets
not less than three times a year in Guernsey and meets the external auditor at least twice a year in Guernsey. The identity of
the Chairman of the Audit and Risk Committee is reviewed on an annual basis and the membership of the Audit and Risk
Committee, and its terms of reference are kept under review. Regular attendees at the Audit and Risk Committee include the
CEO, CFO and CIO.
Duties
The Audit and Risk Committee is responsible for monitoring the financial reporting process, including the appropriateness of
the Company’s accounting policies and the effectiveness of the Company’s risk management and internal control systems.
The Committee continues to spend a considerable amount of time reviewing significant risks and areas of judgement. In
particular, the Committee conducts detailed reviews and analysis of the valuations prepared by the Executive Management
Team of the FinTech Ventures investments, the Subsidiary Goodwill value in use models to assess if any impairment might be
required and the Expected Credit Loss model. These valuations are key elements in the Group’s financial statements and the
Audit and Risk Committee questions these carefully.
External Audit
The Audit and Risk Committee is responsible for overseeing the relationship with the external auditor, including the ongoing
assessment of the auditor’s independence. The Committee makes recommendations to the Board with regard to the
appointment of the external auditor and approves their terms of engagement and fees. The Committee discusses and agrees
the nature and scope of the audit as set out in the audit engagement letter, reviews the results of the audit as described in the
auditors’ management letter and the ongoing independence and objectivity of the external auditor. Moore Kingston Smith LLP
has been appointed as the Group’s auditor. The Group’s former external auditor, Moore Stephens Audit & Assurance (Jersey)
Limited, resigned in May 2024 for technical reasons relating to the listing of the Group’s Zero Dividend Preference shares. As
part of their resignation Moore Stephens Audit & Assurance (Jersey) Limited confirmed that there were no factors that they
required to the members or creditors of the Group to be made aware of.
Processes are in place to safeguard the independence of the external auditor, including controls around the use of the external
auditor for non-audit services. The external auditor also provides the Audit and Risk Committee with further assurance as to
the procedures that it maintains to preserve objectivity and confirmation that it remains independent. All non-audit services are
pre-approved by the Audit and Risk Committee.
Effectiveness of External Auditor
The Committee assessed the effectiveness of the external auditor and the external audit process for 2023 through a number
of steps, including:
• Agreement of their engagement letter and fees.
• Review of the external audit plan.
• Meetings with the external auditors.
• Considering the extent of any non-audit services provided by the external auditors.
• Considering the external auditors’ fulfilment of the agreed audit plan and variations from it.
• Considering the report from the auditor highlighting any major issues that arose during the course of the audit.
• Conducting interviews to obtain feedback from the Executive Management Team to evaluate the performance of the audit
team.
For the audit for the year ended 31 December 2023, the Audit and Risk Committee was satisfied that the audit was effective
and that there were no factors which had any bearing on the independence or effectiveness of the external auditor.
28
Sancus Lending Group Limited
For the year ended 31 December 2023
AUDIT AND RISK COMMITTEE REPORT (Continued)
Financial Reporting
The Audit and Risk Committee reviews, considers and, if thought appropriate, recommends to the Board the approval of the
contents of the half yearly report and annual report and audited financial statements together with the external auditor’s report
thereon. It focuses particularly on compliance with legal requirements, accounting standards and the relevant Listing Rules.
The ultimate responsibility for reviewing and approving the half year report and annual report and audited financial statements
remains with the Board.
The Audit and Risk Committee provides a forum through which the external auditor reports to the Board and the external auditor
is invited to attend Audit and Risk Committee meetings at which annual and half yearly financial statements are considered.
After discussions with the Executive Management Team and external auditor, the Audit and Risk Committee determined that
the key risks of misstatement of the Group’s financial statements relate to the valuation of financial assets at fair value through
profit or loss, the valuation and recoverability of goodwill, loan impairments and revenue.
Freely tradeable market prices are not available for the majority of the Group’s financial assets, including the carrying value of
goodwill arising on consolidation, which are therefore based on a discounted cash flow basis. Goodwill impairment testing is
carried out annually or sooner where an indicative event of impairment has been identified. As set out in Note 12 to the financial
statements, on 5 December 2023, the Group sold its Jersey operations in exchange for a 50% shareholding in a new joint
venture, Hawkbridge Limited. The goodwill attributable to these Jersey operations has therefore been fully transferred to
Hawkbridge Limited as part of the consideration.
For the valuations of the FinTech Ventures portfolio, the Executive Management Team provides a detailed valuation report on
a quarterly basis. The Executive Management Team has confirmed to the Audit and Risk Committee that the valuation
methodology has been applied consistently during the year. The accounting policies are described in detail in Note 2 (f) to the
financial statements.
The Audit and Risk Committee has assessed the processes around the expected credit loss provisions recorded in respect of
the Group’s loan assets and reviewed the IFRS 9 model adopted at year-end which had also gone through the credit committee
for approval.
The accounting policies for revenue recognition are described in detail in Note 2 (o) to the financial statements. The Audit and
Risk Committee has reviewed the revenue recognition policies of the Group and has determined that they are in accordance
with the accounting standards and have been applied consistently.
After due consideration, the Audit and Risk Committee recommends to the Board 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 Group and Company’s performance, business model and strategy.
Non-Audit and audit related fees paid to the External Auditors
During 2023 no non-audit fees were paid to Moore Kingston Smith LLP, the external auditors or Moore Stephens, the former
external auditors. £15,000 was paid to Moore Stephens for audit related services, being the half year review. There is no
perceived threat to auditor independence given the nature of the services provided and the safeguards in place.
Risk Management and Internal Control Systems
During 2023, management continued to enhance its reporting on risk management to the Board and the Audit and Risk
Committee, which cover the operation of the Company and its wholly owned subsidiaries. The Audit and Risk Committee has
received and considered these reports on three occasions, which has been the basis for its conclusion below.
In addition to the review of risk management reports, and in accordance with the guidance published in the Guidance on Risk
Management, Internal Control and Related Financial and Business Reporting by the Financial Reporting Council (the “FRC”),
the Audit and Risk Committee has reviewed the Company’s internal control procedures and concluded that these are adequate
to manage the current risk profile.
A robust, ongoing process of Risk Management and Internal Control
The Board and Executive Management Team are responsible for safeguarding the assets of the Group through establishing
effective systems of risk management and internal control. This responsibility is shared by the Directors of subsidiary
companies, who are similarly responsible for safeguarding the assets of these companies.
29
Sancus Lending Group Limited
For the year ended 31 December 2023
AUDIT AND RISK COMMITTEE REPORT (Continued)
The Board is also responsible for deciding on whether the nature and extent of risks taken within the Group are within its risk
appetite. Such risks have been formally defined (refer page 9), setting the basis for the design and implementation of the
Group’s internal control framework.
On behalf of the Board, the Audit and Risk Committee oversees the Group’s risk management and internal control systems.
These systems are designed to ensure proper accounting records are maintained and that internal and published financial
information is reliable, and that the assets of the Group are safeguarded. Such a system of internal controls can only provide
reasonable and not absolute assurance against misstatement or loss.
Critical components of the Group’s internal control framework include the documented policies which describe how each risk
is to be managed and governed and the governance committees established in terms of such policies, which have mandates
describing how they should operate, what reports they should receive and how they should govern the management of principal
risks. Such policies have been implemented at Company as well as subsidiary levels.
On a semi-annual basis, the Executive Management Team review the key risks across the Group to ensure they are being
managed within the Company’s risk appetite. Action plans are drawn up if any risks are considered to be outside of the
Company’s risk appetite and these are monitored on a regular basis until they return to levels back within the risk appetite.
On a semi-annual basis, the Board and/or Audit and Risk Committee receive reports on risk management, the key risks and
the exposures outstanding. Also included in these reports are the results of the Executive Management Team’s risk and issue
identification discussions noted above. These meetings also provide the Directors with the opportunity to consider any other
issues which management may not have identified and give direction on any additional risk management actions which might
be required.
Insurance
The Sancus and subsidiaries insurance programme is subject to annual review each year, with cover generally renewed in
April of the following year. A significant amount of Insurance cover is held for Public Indemnity, Directors’ and Officers’ liability,
Cyber, and Crime. Appropriate office and travel insurance is also in place.
During 2023, the Committee did not receive any reports relating to whistleblowing across the Group.
On behalf of the Audit and Risk Committee
John Whittle
Chairman
Audit and Risk Committee
28 June 2024
30
Sancus Lending Group Limited
For the year ended 31 December 2023
REMUNERATION REPORT
Introduction
An ordinary resolution for the approval of the annual remuneration report will be put to the shareholders at the annual general
meeting to be held in 2024.
Remuneration and Nomination Committee
The Remuneration and Nomination Committee comprises of John Whittle as Chairman, Steve Smith and Tracy Clarke. The
key duties include, but are not limited to, agreeing a framework for Director remuneration, ensuring management staff are
appropriately incentivised to enhance performance, and reviewing the effectiveness of the remuneration policy on an on-going
basis. No Director is involved in determining their own remuneration.
Remuneration Policy
In February 2020 the Remuneration Policy was last approved and adopted. The Company is committed to the objective of
maximising shareholder return in the longer term. The remuneration policy aims to be competitive, aligned with shareholder
interests and relatively simple and transparent. The Board takes into consideration the views of significant shareholders when
determining the remuneration of directors.
The objective is to put in place a remuneration package that, as a whole:
• Aligns the interests of employees with that of shareholders and the success of the Company.
• Is appropriately benchmarked, such that it aids retention and recruitment.
• Meets applicable legal or regulatory requirements, is tax efficient and simple to implement and administer.
The Board is reviewing the Remuneration Policy against these objectives.
The Policy is divided into two parts; the first part in relation to the remuneration of the Non-Executive directors of the Company,
and the second part in relation to the remuneration of the Executive Directors of the Company.
Part 1 – Remuneration Policy of Non-Executive Directors
Each Non-Executive Director receives a fixed fee per annum based on their role and responsibility within the Company and
the time commitment required. It is not considered appropriate that Non-Executive Directors’ remuneration should be
performance related and none of the Non-Executive Directors are eligible for pension benefits, share options, long-term
incentive schemes or other benefits in respect of their services as Non-Executive directors of the Company. Shares held by
the Non-Executive Directors are disclosed in the Annual Report.
Pursuant to Article 30.3 of the Company’s Articles of Incorporation (the “Articles”) the Board may award additional remuneration
to any Director engaged in exceptional work at the request of the Board on a time spent basis to compensate for the additional
time spent over their expected time commitment.
The total remuneration of the Non-Executive Directors has not exceeded the £300,000 per annum limit (excluding amounts
payable in respect of any out-of-pocket expenses pursuant to Article 30.2 or any additional remuneration awarded pursuant to
Article 30.3) pursuant to an ordinary resolution passed at the Annual General Meeting of the Company held on 19 May 2016.
The Articles provide that Non-Executive Directors retire and offer themselves for re-election- at the first annual general meeting
after their appointment and at least every three years thereafter. A Non-Executive Director’s appointment may at any time be
terminated by and at the discretion of either party upon three months’ written notice. A Non-Executive Director’s appointment
will terminate immediately without notice (or payment in lieu of notice) if such director is not re-appointed at a General Meeting
of the Company (if required under the Articles), if such director is removed as a director at a General Meeting of the Company,
or if such director resigns or ceases to be a director in accordance with the provisions of the Articles.
The terms and conditions of appointment of each Non-Executive Director are available for inspection at the Company’s
registered office.
The last independent remuneration review was carried out in July 2014. A Long Term Incentive Plan was established for Senior
Management during 2023, further details of which are set out below.
31
Sancus Lending Group Limited
For the year ended 31 December 2023
REMUNERATION REPORT (Continued)
Non-Executive Directors (Continued)
For comparative purposes the table below sets out the Non-Executive Directors’ remuneration approved and actually paid for
the year to 31 December 2022 as well as that proposed for the year ended 31 December 2023 (to be approved at the 2024
AGM).
Director Role
Base for
2023
Additional fees
for 2023
Total fees
for 2023
Base for
2022
Additional fees
for 2022
Total fees
for 2022
Steve Smith
Non-Executive
Director and
Chairman of the
Board
£35,000
£15,000 for
Chairman of the
Board
£50,000 £35,000
£15,000 for
Chairman of the
Board
£50,000
John Whittle
Non-Executive
Director, Chairman
of the Audit and
Risk Committee
and Chairman of
the Remuneration
Committee
£35,000
£5,000 for
Chairman of the
ARC and £2,500
for Chairman of
Rem & Nom Co
£42,500 £35,000
£5,000 for
Chairman of the
ARC and £2,500
for Chairman of
Rem & Nom Co
£42,500
Nicholas
Wakefield*
Non-Executive
Director
- - - £6,329 - £6,329
Tracy Clarke*
Non-Executive
Director
£8,750 £97,500 £106,250 £28,671 Nil £28,671
Total £78,750 £120,000 £198,750 £105,000 £22,500 £127,500
* Pro rata for 2022 as Mr Wakefield was succeeded by Ms Clarke on 8 March 2022. Ms Clarke served as a non-executive
director from 1 January 2023 to 31 March 2023 and during which she received a pro-rata portion of her annual fees of
£35,000. She then served as Interim Group CFO from 1 April 2023 and received the pro rata portion of an annual salary of
£130,000.
Part 2 - Remuneration Policy of Executive Directors
For comparative purpose the following table sets out remuneration paid to Executive Directors for the years ended 31
December 2023 and 31 December 2022, excluding all reasonable expenses incurred in the course of their duties which were
reimbursed by the Company.
31 December 2023 31 December 2022
Director
Base
Salary
Cash
Bonus
Pension
Contribution
Other
(4)
Total
Base
Salary
Cash
Bonus
Pension
Contribution
Total
Rory Mepham £220,000 - £11,000 - £231,000 £220,000 - £11,000 £231,000
Emma Stubbs
(1)
£85,000 - £4,250 £85,000 £174,250 £17,000 - £8,500 £178,500
Tracy Clarke
(2)
£97,500 - - - £97,500 - - -
James Waghorn £153,750 - £1,321 - £155,071 £135,000 £50,000 £1,076 £186,076
Helen Trott
(3)
£55,817 - £771 £99,606 £156,194 £135,000 - £117 £135,117
Total £612,067 - £17,342 £184,606 £814,015 £660,000 £50,000 £20,693 £730,693
1
Ms Stubbs resigned on 31 March 2023.
2
As noted above, Ms Clarke served as Interim Group CFO from 30 March 2022 until 31 March 2023.
3
Ms Trott was appointed COO and Legal Counsel on 29 November 2022 and was employed on a 4 day a week contract. She resigned on
14 July 2023.
4
Relates to termination payments to Ms Stubbs and Ms Trott, including payments in lieu of notice.
32
Sancus Lending Group Limited
For the year ended 31 December 2023
REMUNERATION REPORT (Continued)
Long Term Incentives
The Board introduced a Long Term Incentive Plan (“LTIP”) for Senior Management during 2023. An initial grant of restricted
forfeiture ordinary shares was made to Rory Mepham and James Waghorn as follows:
Value at grant of share
awards
No. of shares
Rory Mepham
£110,000
22,000,000
James Waghorn
£70,000
14,000,000
These forfeiture shares will vest in 2026, 3 years after grant, and the level of vesting will be subject to the achievement of
operating profit targets measured up to the end of the 2025 financial year.
Operating Profit achieved
in year ending 31
December 2025
(1)
Level of vesting
Maximum
£4m
100%
£3m
75%
£2m
50%
Threshold
£1m
25%
Below threshold
Below £1m
0%
1
Defined as operating profit after all debt financing including ZDP and Bonds, loan loss provisions/recoveries and a provision for other staff
cash bonuses. Operating profit is measured pre-exceptional items and taxation.
Subject to shareholder approval at the Annual General Meeting it is proposed that a further grant of will be made to members
of the Executive Management and certain members of senior management. The awards proposed to be awarded to the
Executive Management are as follows:
Value at grant of share
awards
No. of shares
Rory Mepham
£110,000
22,000,000
James Waghorn
£80,000
16,000,000
Keith Lawrence
£40,000
8,000,000
These forfeiture shares will vest in 2027, 3 years after grant, and the level of vesting will be subject to the achievement of
operating profit targets measured up to the end of the 2026 financial year.
Operating Profit achieved
in year ending 31
December 2026
(1)
Level of vesting
Maximum
£5m
100%
£4m
75%
£4m
50%
Threshold
£2m
25%
Below threshold
Below £2m
0%
1
Defined as operating profit after all debt financing including ZDP and Bonds, loan loss provisions/recoveries and a provision for other staff
cash bonuses. Operating profit is measured pre-exceptional items and taxation.
Discretionary Executive Bonus
No discretionary cash bonuses were paid to the Executive Management Team in 2023. (In the year to 2022: £50,000 was paid
to James Waghorn).
On behalf of the Remuneration Committee
John Whittle
Remuneration Committee Chairman
28 June 2024
33
Sancus Lending Group Limited
For the year ended 31 December 2023
DIRECTORS’ REPORT
The Directors submit their Report together with the Consolidated Statement of Comprehensive Income, the Consolidated
Statement of Financial Position, the Consolidated Statement of Changes in Shareholders’ Equity, the Consolidated Statement
of Cash Flows and the related Notes for the year ended 31 December 2023, which have been prepared in accordance with
UK-adopted International Accounting Standards, in accordance with any relevant enactment for the time being in force, and
are in agreement with the accounting records, which comply with Section 238 of The Companies (Guernsey) Law, 2008.
Principal Activities
The Company does not have a fixed life and the Articles do not contain any trigger events for a voluntary liquidation of the
Company.
Following the approval by Shareholders at the Company AGM on 19 May 2016, the Company changed its status from being
an investing company for the purpose of the AIM rules to a trading Company.
The Executive Management Team is responsible for the day-to-day management of the Company.
The Group
As at 31 December 2023, the Group comprises the Company and the entities disclosed in Note 20 to the financial statements.
Directors and Executive Management Team of the Company
A list of the Directors and the Executive Management Team who served the Company during the year and as at the date of
this report is shown on page 21.
Results and Dividends
The Group results for the year are set out on page 43-46. No Dividends were paid during the year (31 December 2022: Nil).
Substantial Shareholdings
As at 31 December 2023, the Company was aware of the following substantial shareholders who held 3% or more of issued
share capital of the Company:
Number of
Ordinary Shares
held
Percentage of total
ordinary shares
issued held
Somerston Group
300,827,335
51.50%
Philip J Milton & Company plc
95,247,327
16.31%
34
Sancus Lending Group Limited
For the year ended 31 December 2023
DIRECTORS’ REPORT (Continued)
Directors’ Interests
As at 31 December 2023, the Directors had the following beneficial interests in the Ordinary Shares of the Company:
31 December 2023
31 December 2022
No. of Ordinary
Shares Held
% of Ordinary
Shares Held
No. of Ordinary
Shares Held
% of Ordinary
Shares Held
John Whittle
138,052
0.02
138,052
0.02
Steve Smith
-
-
-
-
Rory Mepham
2,000,000
0.34
-
-
Tracy Clarke
-
-
-
-
Statement of Directors' Responsibilities
The Directors are responsible for preparing the financial statements in accordance with UK-adopted International Accounting
Standards and The Companies (Guernsey) Law, 2008 for each financial period to give a true and fair view of the state of affairs
of the Group as at the end of the financial year and of the profit or loss for that period. International Accounting Standard 1
requires that financial statements present fairly for each financial period the Group's financial position, financial performance
and cash flows. This requires faithful representation of the effects of transactions, other events and conditions in accordance
with the definitions and recognition criteria for assets, liabilities, income and expenses set out in the International Accounting
Standards Board's "Framework for the preparation and presentation of financial statements". In virtually all circumstances a
fair presentation will be achieved by compliance with all IFRSs as adopted by the UK.
In preparing these financial statements, the Directors are required to:
• Ensure that the financial statements comply with the Memorandum and Articles of Incorporation and UK-adopted
International Accounting Standards.
• Select suitable accounting policies and apply them consistently.
• Present information including accounting policies, in a manner that provides relevant, reliable, comparable and
understandable information.
• Make judgements and estimates that are reasonable and prudent.
• Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company and
the Group will continue in business.
The Directors confirm that they have complied with the above requirements in preparing the financial statements.
The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the
financial position of the Company and the Group and enable them to ensure that the financial statements have been properly
prepared in accordance with The Companies (Guernsey) Law, 2008. They are also responsible for safeguarding the assets of
the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other
irregularities.
The Directors also confirm 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 Group and Company’s performance,
business model and strategy.
Internal Controls Review
Taking into account the ongoing work of the Audit and Risk Committee in monitoring the risk management and internal control
systems on behalf of the Board the Directors, the latter has conducted a robust assessment of the principal risks and
uncertainties faced by the Group as set out on page 9 and is satisfied that each of these has been properly identified and is
being effectively managed through the operation of appropriate internal controls and risk management systems, within the
constraints of the resources of the Group.
35
Sancus Lending Group Limited
For the year ended 31 December 2023
DIRECTORS’ REPORT (Continued)
Statement as to Disclosure of Information to Auditor
The Directors who held office at the date of approval of this Directors’ Report confirm that:
• There is no relevant audit information of which the Company's auditors are unaware.
• The Directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information
and to establish that the auditors are aware of that information.
Auditor
Moore Kingston Smith LLP were appointed in the year and have indicated their willingness to continue in office and a resolution
to re-appoint Moore Kingston Smith LLP will be tabled at the forthcoming AGM.
Going Concern
The Group has reported an operating loss of £9.9m (2022: £4.7m) for the year. This is primarily due to an ECL charge of £4.8m
(2022: £0.4m). As at 31 December 2023 the Group had net liabilities of (£1.9m) (2022: net assets of £7.2m), including cash
and cash equivalents of £5.0m (2022: £4.1m).
The Directors have considered the going concern basis in the preparation of the financial statements as supported by the
Director’s assessment of the Company’s and Group’s ability to pay its liabilities as they fall due and have assessed the current
position and the principal risks facing the business with a view to assessing the prospects of the Company. The Directors have
prepared a cash flow forecast for the period to 30 September 2025 which shows that the Company and the Group will have
sufficient cash resources to meet their ongoing liabilities as they fall due for at least twelve months from the date of approval
of these financial statements. Following the extension of the ZDPs at the end of 2022, for a further 5 years to 5 December
2027 and with the Bonds maturity date not until 31 December 2025, the Company does not have any debt liabilities that fall
due within the next 12 months. Based on this, along with the issuance of preference shares by a subsidiary of the Group in
April 2024 and as set out in Note 27 to these financial statements, the Directors are of the opinion that the Company and the
Group has adequate financial resources to continue in operation and meet its liabilities as they fall due for the foreseeable
future.
It is however expected, whereby equity is required to facilitate an increase in drawdown from institutional funding lines that the
Company will require growth capital to fund the continued growth of the loan book. The Company’s largest shareholder,
Somerston has indicated their willingness to support the Company’s growth plans. The Company will be looking at options
available to raise such additional growth capital over the course of the year.
The Directors therefore believe it is appropriate to continue to adopt the going concern basis in preparing the financial
statements.
Board Succession
The Directors remain focussed on ensuring the Board is comprised of individuals with the requisite skills, knowledge,
experience and diversity to operate effectively and to meet the future leadership needs of the Company. From 30 March 2022
until 31 March 2023 Ms Tracy Clarke served as the Interim Group CFO. Keith Lawrence, who joined the Group in February
2024, was appointed as Group CFO on this date and Ms Tracy Clarke has reverted to being Somerston’s appointed Board
representative.
Approved and signed on behalf of the Board of Directors on 28 June 2024.
Director: Stephen Smith
Director: John Whittle
36
Sancus Lending Group Limited
For the year ended 31 December 2023
Independent auditor’s report to the members of Sancus Lending Group Limited
Opinion
We have audited the Group financial statements of Sancus Lending Group Limited (the ‘Group’) for the year ended 31
December 2023 which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Statement of
Financial Position, the Consolidated Statement of Changes in Equity, the Consolidated Statement of Cash Flows, and 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 Group financial statements:
• Give a true and fair view of the state of the group’s affairs as at 31 December 2023 and of the group’s 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 (Guernsey) Law, 2008.
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 group, in accordance with the ethical requirements that are relevant
to our audit of the financial statements in Guernsey, including the FRC’s Ethical Standard as applied to listed 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.
An overview of the scope of our audit
Our audit approach was a risk-based approach founded on a thorough understanding of the group’s business, its environment
and risk profile. We conducted substantive audit procedures and evaluated the group’s internal control environment. We also
addressed the risk of management override of internal controls, including assessing whether there was evidence of bias by the
directors that may have represented a risk of material misstatement. The components of the group were evaluated by the group
audit engagement team based on a measure of materiality, considering each component as a percentage of the group’s total
assets, current assets, revenue and gross profit, which allowed the group audit engagement team to assess the significance
of each component and determine the planned audit response.
For those components that were evaluated as significant components, either a full scope audit or a specified audit procedures
approach was determined based on their relative materiality to the group and our assessment of the level of audit risk. For
significant components requiring a full scope audit approach, we evaluated controls by performing walkthroughs over the
financial reporting systems identified as part of our risk assessment, reviewed the accounts production process and addressed
critical accounting matters. We then undertook substantive testing on significant transactions and material account balances.
We determined there to be five significant components to the group, which were Sancus Lending Group Limited, Sancus
Lending (UK) Limited, Sancus Holdings (UK) Limited, Sancus Loans Limited and Sancus Lending (Ireland) Limited which were
subject to full scope audits. Other non-significant components were subject to targeted audit procedures based on the level of
risk in the context of the group as a whole.
Significant elements of the group’s operations are located in the United Kingdom and the Republic of Ireland. Component audit
teams in both countries performed full scope audits of relevant significant components.
The audit of the United Kingdom significant components was completed by another office of Moore Kingston Smith LLP l and
the audit of the Republic of Ireland significant component was completed by Moore Ireland Audit Partners Limited .These audits
were completed under the supervision and direction of the group audit engagement team, as described in more detail below.
The remaining significant component, namely the parent company Sancus Lending Group Limited, was audited by the group
audit engagement team.
Our involvement with the component auditors
As part of our supervision and direction of the component audit teams, we determined the level of involvement required in order
to be able to conclude whether sufficient appropriate audit evidence has been obtained in respect of the United Kingdom and
Irish significant components as a basis for our opinion on the group financial statements as a whole. Our involvement with the
component auditors included the following:
37
Sancus Lending Group Limited
For the year ended 31 December 2023
Independent auditor’s report to the members of Sancus Lending Group Limited (Continued)
Our involvement with the component auditors (continued)
• We issued detailed group reporting instructions to the component auditors, which included the significant areas to be
covered by the audit (including areas that were considered to be key audit matters as detailed below) and set out the
information required to be reported to the group audit engagement team.
• The group audit engagement team performed reviews of relevant working papers and performed additional audit work
where necessary for instance in respect of the significant risk areas that represented Key Audit Matters for the group.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the group
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 group financial statements, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters. This is not a complete list of all risks identified by our audit.
Audit Matter
Procedures
Accounting treatment of goodwill and investment in
joint venture and assessment of carrying value
On 5 December 2023 the group entered into a joint
venture agreement for which the majority of the
consideration was the business of Sancus Lending
(Jersey) Limited which included the goodwill previously
recognised in the group financial statements in respect
of that business of £14.255m (2022:£14.255m). The
investment in the joint venture had been recognised at
a fair value of £16.312m in the draft financial
statements.
We identified this transaction as a significant risk given
its material nature and the subjectivity of the accounting
treatment.
Our audit work included, but was not restricted to, the following
procedures:
• We critically assessed the legal documentation in respect of the
transaction to determine its legal nature and commercial
substance.
• We critically assessed the directors’ accounting treatment of the
transaction in the draft financial statements to determine whether
it complied with the requirements of the relevant financial
reporting standards, specifically IAS 28 and IFRS 11.
• We obtained management’s assessment of whether there are any
indicators of impairment of the investment in the joint venture.
• We critically assessed the arithmetic accuracy of the DCF Capital
Asset Pricing Model prepared by management in forming the
above assessment.
• We critically assessed the inputs into the DCF Capital Asset
Pricing Model and obtained supporting evidence and
documentation for the assumptions used in the DCF Capital Asset
Pricing Model
• We performed sensitivity analysis on the key assumptions used in
the DCF Capital Asset Pricing Model
• We evaluated the accounting policy and detailed disclosures in
the notes to the financial statements to determine whether
information provided in the financial statements is compliant with
the requirements of relevant financial reporting standards
including IFRS 11 and IAS 36.
Based on our audit work performed we determined that the fair value
uplift of £2.057m on recognition of the joint venture in the draft
financial statements required adjustment to ensure that the joint
venture had been accounted for in accordance with the requirements
of IAS 28 and IFRS 11.
We consider the disclosures in the financial statements relating to this
area to be adequate following amendments to the relevant disclosures
in the notes to the financial statements and to and the Consolidated
Statement of Comprehensive Income and Consolidated Statement of
Financial Position as a result of the adjustment referred to above.
38
Sancus Lending Group Limited
For the year ended 31 December 2023
Independent auditor’s report to the members of Sancus Lending Group Limited (Continued)
Audit Matter
Procedures
Impairment and recoverability of loans receivable
At 31 December 2023 the value of loans and loan
equivalents was £78.865m (2022:£76.125m)
representing 74.1% of total assets (2022:75%). The loan
portfolio comprises property backed loans and direct
exposure to loans through co-investment alongside third
party lenders.
The group has also provided a first loss guarantee as
part of the Sancus Loan Note structures. The value of
these assets are also supported by the underlying loan
book. Management is required to assess loans for
impairment, including the application of the expected
credit loss (‘ECL’) model under IFRS 9.
In making this assessment, management makes several
significant judgements. These include determining
appropriate assumptions for calculating the loss
allowance under IFRS 9 (including probability of default
and loss given default), as well as loan-specific matters
including cash flow forecasts and covenant compliance,
specifically related to loan to value (LTV) ratio. As a
result, errors or deliberate manipulation of these
determining factors could result in material misstatement
of the financial statements, as such it is considered as a
key audit matter.
Our audit work included, but was not restricted to, the following
procedures:
• We obtained an understanding of the significant controls over
the loans impairment process
• We performed a walkthrough of the impairment process
including testing of the operation of the relevant controls.
• We critically assessed the reasonableness of management’s
allocation of loans to the various stages under IFRS 9 including
an assessment of management’s definition of significant
increase in credit risk and definition of default.
• We critically assessed management’s assumptions in respect of
the recoverability of non-performing loans.
• We critically assessed management’s judgements and
estimates in determining the probability of default (‘PD’),
determining the loss given default (‘LGD’) and exposure at
default (‘EAD’) for each stage within which loans are classified.
• We performed sample testing of inputs used in the Loans
Monitoring Report (‘LMS’)
• We critically assessed the accounting policy and detailed
disclosures in the financial statements to determine whether
information provided in the financial statements is compliant with
the requirements of IFRS 9
Based on our audit work performed we have not identified any
material misstatement in the impairment and recoverability of loans.
We consider the disclosures in the financial statements relating to
this area to be adequate.
39
Sancus Lending Group Limited
For the year ended 31 December 2023
Independent auditor’s report to the members of Sancus Lending Group Limited (Continued)
Audit Matter
Procedures
Revenue recognition
The group’s revenue for the year ended 31 December
2023 was £12.310m (2022: £9.989m) being interest
income and fees enforced as per lending agreements.
Revenue recognition is a presumed significant risk and is
material to the financial statements.
Our audit work included, but was not restricted to, the following
procedures:
• We obtained and documented an understanding of the
methodology for recognising revenue to determine whether it
was appropriate.
• We critically assessed the group’s revenue accounting policy to
assess compliance with IFRS 15.
• We performed substantive testing on a sample of individual
revenue transactions throughout the year to evaluate whether
revenue is recognised in accordance with the loan contract
terms and the requirements of IFRS 15.
• We performed substantive testing of a sample of interest income
selected from the Loans Monitoring Reports by recalculating the
interest amount and comparing it to the interest income
recognised.
• We performed revenue cut off testing to ensure revenue has
been recognised in the correct accounting period.
• We performed analytical review to critically assess the level of
interest income.
• We critically assessed the disclosures in the financial
statements to determine whether the accounting policy and
other revenue disclosures comply with the disclosure
requirements of IFRS 15
Based on our audit work performed we have not identified any
material misstatement in the recognition of revenue.
We consider the disclosures in the financial statements relating to
this area to be adequate.
Our application of materiality
The scope and focus of our audit were influenced by our assessment and application of materiality. We define materiality as
the magnitude of misstatement that could reasonably be expected to influence the readers and the economic decisions of the
users of the financial statements. We use materiality to determine the scope of our audit and the nature, timing, and extent of
our audit procedures and to evaluate the effect of misstatements, both individually and on the financial statements as a whole.
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements.
Based on our professional judgement we determined materiality for the financial statements as a whole and performance
materiality as follows:
Group financial statements
Materiality
£1,081,000
Basis for determining materiality
Gross assets
Rationale for the benchmark applied
The group is an asset-based operation. Assets (loans) drive
the group’s revenue. Consequently gross assets was
considered likely to be the metric on which the users of the
financial statements will place most focus.
Performance materiality
£540,500
Basis for determining performance materiality
50% of overall materiality.
40
Sancus Lending Group Limited
For the year ended 31 December 2023
Independent auditor’s report to the members of Sancus Lending Group Limited (Continued)
Performance materiality:
We calculated performance materiality at a level lower than materiality to reduce the probability that, in aggregate,
uncorrected and undetected misstatements exceed the materiality level for the Group consolidated financial statements as a
whole. We determined performance materiality to be £540,500, which was set at 50% of overall materiality and reflects the
Group’s listed status.
Component materiality:
We set materiality for each component of the group based on a percentage of group materiality dependent on the size and
our assessment of risk of material misstatements of that component. Component materiality, other than the parent
company’s, ranged from £60,000 to £757,450. In the audit of each component, we further applied performance materiality
levels of 50% of the component materiality to our testing to ensure that the risk of errors exceeding component materiality
was appropriately mitigated.
Trivial:
We agreed with the Audit Committee that we would report to them all individual audit differences in excess of £54,050 for the
group. We also agreed to report differences below this threshold that, in our view, warranted reporting on qualitative grounds.
We also reported to the Audit Committee on disclosure matters that we identified when assessing the overall presentation of
the financial statements.
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 group’s ability to
continue to adopt the going concern basis of accounting included, but was not limited to:
• Critically assessing the going concern assessment prepared by management covering at least twelve months from
the date of approval of the financial statements and challenging the client as regards the key assumptions and
forecasts used in their assessment; Performing sensitivity analysis on the cash flow forecast to determine the level
of headroom for the group to continue as a going concern for at least twelve months from the date of approval of the
financial statements; and
• Reviewing the post year end trading performance of the group and comparing it to the forecasts prepared by
management to assess their accuracy; and
• Assessing the adequacy of the going concern disclosures in the financial statements.
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 group’s ability to continue as a going concern.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant
sections of this report.
Other information
The other information comprises the information included in the annual report, other than the Group 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 group financial statements does not cover the other information and, except to the extent otherwise explicitly
stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the group financial statements, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the Group 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 there is a material misstatement in
the group 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.
41
Sancus Lending Group Limited
For the year ended 31 December 2023
Independent auditor’s report to the members of Sancus Lending Group Limited (Continued)
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group 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 where the Companies (Guernsey) Law, 2008 requires us to
report to you if, in our opinion:
• We have not received all the information and explanations we require for our audit; or
• Proper accounting records have not been kept by the parent company; or
• The financial statements are not in agreement with the accounting records.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on page 34, the directors are responsible for the
preparation of the group 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 group financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the Group financial statements, the directors are responsible for assessing the group’s and the parent
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 group or the parent company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Group financial statements
Our objectives are to obtain reasonable assurance about whether the group 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 aggregate, they could reasonably be expected to influence the economic decisions of users taken
on the basis of these Group financial statements.
A further description of our responsibilities is available on the FRC’s website at https://wwww.frc.org.uk/auditors/auditor-
assurance/auditor-s-responsibilities-for-the-audit-of-the-fi/description-of-the-auditor's-responsibilities-for This description
forms part of our auditor’s report.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
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.
The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the group
financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material
misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to
respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility
for the prevention and detection of fraud rests with both management and those charged with governance of the Group.
42
Sancus Lending Group Limited
For the year ended 31 December 2023
Independent auditor’s report to the members of Sancus Lending Group Limited (Continued)
Our approach was as follows:
• We obtained an understanding of the legal and regulatory requirements applicable to the group and considered that
the most significant are the Companies (Guernsey) Law, 2008, UK-adopted International Accounting Standards, the
rules of the Alternative Investment Market, and relevant taxation legislation.
• We obtained an understanding of how the group complies with these requirements by discussions with management
and those charged with governance.
• We assessed the risk of material misstatement of the group financial statements, including the risk of material
misstatement due to fraud and how it might occur, by holding discussions with management and those charged with
governance.
• We inquired of management and those charged with governance as to any known instances of non-compliance or
suspected non-compliance with laws and regulations.
• Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-
compliance with laws and regulations. This included making enquiries of management and those charged with
governance and obtaining additional corroborative evidence as required.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of
non-compliance with laws and regulations that are not closely related to events and transactions reflected in the Group
financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not
detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Section 262 of the Companies
(Guernsey) Law, 2008. Our audit work has been undertaken so that we might state to the company’s members those matters
we are required to state to them in an auditor’s report and 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.
Matthew Banton
for and on behalf of Moore Kingston Smith LLP, Statutory Auditor
6th Floor
9 Appold Street
London
EC1A 2AP
28 June 2024
43
Sancus Lending Group Limited
For the year ended 31 December 2023
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
| Notes | 2023 | 2022 | |
£’000 | £’000 | ||
Revenue | 5 | ||
Cost of sales | 6 | ( | ( |
Gross profit | |||
Operating expenses | 7 | ( | ( |
Operating loss before credit losses | ( | ( | |
Changes in expected credit losses | 22 | ( | ( |
Operating loss | ( | ( | |
FinTech Ventures fair value movement | 22 | ( | |
Other net gains | 8 | ||
Goodwill impairment | 12 | ( | |
Loss on disposal of other assets | 26 | ( | |
Profit on disposal of other assets | 14 | ||
Loss for the year before tax | ( | ( | |
Income tax expense | 18 | ( | ( |
Loss for the year after tax | ( | ( | |
Items that may be reclassified subsequently to profit and loss | |||
Foreign exchange (loss)/gain arising on consolidation | ( | ||
Other comprehensive income for the year after tax | ( | ||
Total comprehensive loss for the year | ( | ( | |
Loss for the year after tax attributable to equity holders of the company | ( | ( | |
Total comprehensive loss attributable to equity holders of the company | ( | ( | |
Basic Loss per Ordinary Share | 10 | ( | ( |
Diluted Loss per Ordinary Share | 10 | ( | ( |
The accompanying Notes on pages 47 to 85 form an integral part of these financial statements.
44
Sancus Lending Group Limited
As at 31 December 2023
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31 December | 31 December | ||
| 2023 | 2022 | ||
ASSETS | Notes | £’000 | £’000 |
Non-current assets | |||
Fixed assets | 11 | ||
Goodwill | 12 | ||
Other intangible assets | 13 | ||
Sancus loans and loan equivalents | 22 | ||
FinTech Ventures investments | 22 | ||
Other investments | 14 | ||
Investments in equity-accounted joint ventures and associates | 9 | ||
Total non-current assets | |||
Current assets | |||
Other assets | 14 | ||
Sancus loans and loan equivalents | 22 | ||
Trade and other receivables | 15 | ||
Cash and cash equivalents | |||
Total current assets | |||
Total assets | |||
EQUITY | |||
Share premium | 16 | ||
Treasury shares | 16 | ( | ( |
Other reserves | ( | ( | |
Capital and reserves attributable to equity holders of the Group | ( | ||
Total equity | ( | ||
LIABILITIES | |||
Non-current liabilities | |||
Borrowings | |||
Lease liabilities | |||
Total non-current liabilities | 17 | ||
Current liabilities | |||
Trade and other payables | |||
Hedging contracts | |||
Tax liabilities | |||
Provisions | |||
Lease liabilities | |||
Interest payable | |||
Total current liabilities | 17 | ||
Total liabilities | |||
Total equity and liabilities |
45
Sancus Lending Group Limited
As at 31 December 2023
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
Note | Share | Treasury | Warrants | Foreign | Retained | Capital and reserves | |
| Premium | Shares | Outstanding | Exchange | Earnings/ | attributable to | ||
| Reserve | (Losses) | equity holders of | |||||
the Company | |||||||
£’000 | £’000 | £’000 | £’000 | £’000 | £’000 | ||
Balance at 1 January | ( | ( | |||||
2023 | |||||||
Transactions with owners | |||||||
Total comprehensive income/(loss) for the year | ( | ( | ( | ||||
Balance at 31 | ( | ( | ( | ||||
December 2023 | |||||||
Balance at 1 January | ( | ( | |||||
2022 | |||||||
Exercise of warrants | |||||||
Movement in fair value | ( | ||||||
of warrants | |||||||
Transactions with owners | ( | ||||||
Total comprehensive income/(loss) for the year | ( | ( | |||||
Balance at 31 | ( | ( | |||||
December 2022 |
16
46
Sancus Lending Group Limited
For the year ended 31 December 2023
CONSOLIDATED STATEMENT OF CASH FLOWS
31 December | 31 December | ||
| 2023 | 2022 | ||
Notes | £’000 | £’000 | |
Cash flow from operations, excluding loan movements | 19 | ( | ( |
Decrease/(Increase) in Sancus loans | ( | ||
Increase in Sancus Loans Limited loans | ( | ( | |
Divestment in Sancus Loan Notes | |||
Net Cash flows used in operating activities | ( | ( | |
Investing activities | |||
Net investments in FinTech Ventures | ( | ||
Divestment in Sancus (IOM) Holdings Limited | |||
Investment in joint venture | ( | ( | |
Expenditure on Sancus Properties Limited | ( | ||
Sale of Sancus Properties Limited | |||
Property, equipment and other intangibles acquired | ( | ( | |
Net cash inflow / (outflow) from investing activities | ( | ||
Financing activities | |||
Drawdown of Pollen facility | 19 | ||
Capital element of lease payments | 19 | ( | ( |
Exercise of warrants | |||
Issue of bonds | 19 | ||
Debt issue costs | 19 | ( | |
Sale/(Repayment) of ZDPs | 19 | ( | |
Net cash generated by financing activities | |||
Effects of foreign exchange | ( | ||
Net increase/(decrease) in cash and cash equivalents | ( | ||
Cash and cash equivalents at beginning of year | |||
Cash and cash equivalents at end of year |
The accompanying Notes on pages 47 to 85 form an integral part of these financial statements.
47
Sancus Lending Group Limited
For the year ended 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS
1. GENERAL INFORMATION
domiciled in Guernsey, Channel Islands company limited by shares and with limited liability, on 9 June 2005 in
accordance with The Companies (Guernsey) Law, 1994 (since superseded by The Companies (Guernsey) Law, 2008).
Until 25 March 2015, the Company was an Authorised Closed-ended Investment Scheme and was subject to the
Authorised Closed-ended Investment Scheme Rules 2008 issued by the Guernsey Financial Services Commission
(“GFSC”). On 25 March 2015, the Company was registered with the GFSC as a Non-Regulated Financial Services
Business (“NRFSB”), at which point the Company’s authorised fund status was revoked. The Company’s Ordinary
Shares were admitted to trading on the AIM market of the London Stock Exchange on 5 August 2005 and its issued
zero dividend preference shares were listed and traded on the Standard listing Segment of the main market of the
London Stock Exchange with effect from 5 October 2015. The Company changed where its business is managed and
controlled, from Guernsey to Jersey, effective 1 April 2023. The Board agreed that the Company should revoke its
NRFSB status, which was completed on 23 June 2023.
The Company does not have a fixed life and the Articles do not contain any trigger events for a voluntary liquidation of
the Company. The Company is an operating company for the purpose of the AIM rules. The Executive Management
Team is responsible for the management of the Company.
As at 31 December 2023, the Group comprises the Company and its subsidiaries (Note 20).
The Company has taken advantage of the exemption conferred by the Companies (Guernsey) Law, 2008, Section 244,
not to prepare company only financial statements.
2. ACCOUNTING POLICIES
48
Sancus Lending Group Limited
For the year ended 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS (Continued)
2. ACCOUNTING POLICIES (continued)
49
Sancus Lending Group Limited
For the year ended 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS (Continued)
2. ACCOUNTING POLICIES (continued)
(f) Financial assets and liabilities (continued)
50
Sancus Lending Group Limited
For the year ended 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS (Continued)
2. ACCOUNTING POLICIES (continued)
(f) Financial assets and liabilities (continued)
51
Sancus Lending Group Limited
For the year ended 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS (Continued)
2. ACCOUNTING POLICIES (continued)
52
Sancus Lending Group Limited
For the year ended 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS (Continued)
2. ACCOUNTING POLICIES (continued)
(j) Other intangible assets (continued)
53
Sancus Lending Group Limited
For the year ended 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS (Continued)
2. ACCOUNTING POLICIES (continued)
(l) Investment in Joint Venture and associates (continued)
54
Sancus Lending Group Limited
For the year ended 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS (Continued)
2. ACCOUNTING POLICIES (continued)
(o) Revenue recognition (continued)
i) Commitment and arrangement fees (continued)
55
Sancus Lending Group Limited
For the year ended 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS (Continued)
2. ACCOUNTING POLICIES (continued)
56
Sancus Lending Group Limited
For the year ended 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS (Continued)
2. ACCOUNTING POLICIES (continued)
(u) Leases (continued)
57
Sancus Lending Group Limited
For the year ended 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS (Continued)
58
Sancus Lending Group Limited
For the year ended 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS (Continued)
3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING ACCOUNTING POLICIES
(continued)
Critical judgements in applying the group’s accounting policies (continued)
59
Sancus Lending Group Limited
For the year ended 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS (Continued)
3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING ACCOUNTING POLICIES
(continued)
Key sources of estimation uncertainty (continued)
60
Sancus Lending Group Limited
For the year ended 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS (Continued)
4. SEGMENTAL REPORTING (continued)
Reconciliation to Consolidated Financial Statements | |||||||||||
Year to 31 | Sancus | Fintech | |||||||||
| December | Loans | Sancus | SLL | Ventures | Consolidated | ||||||
| 2023 | Limited | Debt | Total | Head | Debt | Fair Value | Financial | ||||
Offshore | UK | Ireland | (SLL) | Costs | Sancus | Office | Costs | & Forex | Other | Statements | |
£’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |
Revenue | 1,275 | 3,025 | 2,164 | (1,799) | - | 4,665 | - | 7,645 | - | - | 12,310 |
Operating | (530) | 501 | 1,060 | (1,846) | - | (815) | (1,315) | - | - | (19) | (2,149) |
(loss)/profit * | |||||||||||
Credit Losses | (1,120) | (31) | - | (3,666) | - | (4,817) | - | - | - | - | (4,817) |
Debt Costs | - | - | - | - | (2,893) | (2,893) | - | - | - | - | (2,893) |
Other (losses)/gains | 96 | - | 5 | 152 | - | 253 | - | - | 715 | (13) | 955 |
Loss on JVs | - | - | - | - | - | - | - | - | - | (100) | (100) |
and associates | |||||||||||
Taxation | 3 | - | (133) | - | - | (130) | - | - | - | - | (130) |
(Loss)/Profit | (1,551) | 470 | 932 | (5,360) | (2,893) | (8,402) | (1,315) | - | 715 | (132) | (9,134) |
After Tax | |||||||||||
Year to 31 | |||||||||||
| December | |||||||||||
| 2022 | |||||||||||
Revenue | 1,372 | 2,679 | 1,547 | (725) | - | 4,873 | - | 5,116 | - | - | 9,989 |
Operating | (943) | (446) | 647 | (744) | - | (1,486) | (1,026) | - | - | (31) | (2,543) |
Profit/(loss) * | |||||||||||
Credit Losses | (244) | - | - | (174) | - | (418) | - | - | - | - | (418) |
Debt Costs | - | - | - | - | (1,751) | (1,751) | - | - | - | - | (1,751) |
Other Gains/(losses) | (8,630) | - | 10 | 191 | - | (8,429) | - | - | (894) | 57 | (9,266) |
Loss on JVs | - | - | - | - | - | - | - | - | - | (34) | (34) |
and associates | |||||||||||
Taxation | 18 | - | (68) | - | - | (50) | - | - | - | - | (50) |
(Loss)/Profit | (9,799) | (446) | 589 | (727) | (1,751) | (12,134) | (1,026) | - | (894) | (8) | (14,062) |
After Tax |
61
Sancus Lending Group Limited
For the year ended 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS (Continued)
4. SEGMENTAL REPORTING (continued)
2023 | 2022 | |
£’000 | £’000 | |
Co-Funder fees | 2,730 | 1,733 |
Earn out (exit) fees | 1,188 | 677 |
Transaction fees | 2,260 | 3,063 |
Total revenue from contracts with customers | 6,178 | 5,473 |
Interest on loans | 167 | 83 |
Pollen Interest income | 5,847 | 4,390 |
Sundry income | 118 | 43 |
Total Revenue | 12,310 | 9,989 |
2023 | 2022 | |
£’000 | £’000 | |
Interest costs | 2,917 | 1,789 |
Pollen interest costs | 7,645 | 5,116 |
Other cost of sales | 294 | 704 |
Total cost of sales | 10,856 | 7,609 |
At 31 December | Sancus | Reconciliation to Financial Statements | ||||||||
| 2023 | Loans | Inter | Consolidated | |||||||
| Limited | Total | Head | Fintech | Segment | Financial | |||||
Offshore | UK | Ireland | (SLL) | Sancus | Office | Portfolio | Other | Balances | Statements | |
£’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |
Total Assets | 32,329 | 17,298 | 1,668 | 86,822 | 138,117 | 59,306 | - | 9 | (91,020) | 106,412 |
Total Liabilities | (54,670) | (18,494) | (273) | (96,832) | (170,269) | (29,130) | - | (9) | 91,020 | (108,388) |
Net (Liabilities)/ | (22,341) | (1,196) | 1,395 | (10,010) | (32,152) | 30,176 | - | - | - | (1,976) |
Assets |
62
Sancus Lending Group Limited
For the year ended 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS (Continued)
2023 | 2022 | |
| £’000 | £’000 | |
Amortisation and depreciation | 282 | 305 |
Audit fees | 128 | 140 |
Company secretarial | 119 | 112 |
Corporate insurance | 68 | (16) |
Employment costs | 4,276 | 4,858 |
Investor relations expenses | 79 | 63 |
Legal and professional | 355 | (141) |
Marketing expenses | 76 | 255 |
NOMAD fees | 75 | 75 |
Other office and administration costs | 923 | 901 |
Pension costs | 79 | 101 |
Registrar fees | 31 | 16 |
Sundry | 5 | 5 |
6,496 | 6,674 |
8. OTHER NET GAINS/(LOSSES)
The £39,000 other net gains is made up of gains on foreign exchange £139,000 and loss on joint ventures and
associates of £100,000. (2022 £233,000 other net gains: consist of gains on foreign exchange £267,000 and loss on
joint ventures and associates of £34,000).
31 December 2023 | 31 December 2022 | |
£’000 | £’000 | |
At beginning of year | - | 500 |
Additions – joint venture | 100 | - |
Additions – goodwill | 14,255 | - |
Impairment of joint venture | (100) | - |
Disposals | - | (500) |
At end of year | 14,255 | - |
63
Sancus Lending Group Limited
For the year ended 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS (Continued)
9. INVESTMENTS IN JOINT VENTURES (continued)
10.
LOSS PER ORDINARY SHARE
Consolidated loss per Ordinary Share has been calculated by dividing the consolidated loss for the year after tax
attributable to Ordinary Shareholders of £9,134,000 (31 December 2022: loss of £14,062,000) by the weighted average
number of Ordinary Shares (excluding treasury shares) outstanding during the period of 584,138,346 (31 December
2022: 485,999,406).
Note 16 describes the warrants in issue, which are currently out of the money. As such the warrants have not been
considered to have a dilutive effect on the loss per Ordinary Share in the current year.
31 December 2023 | 31 December 2022 | |
Number of shares | 584,138,346 | 584,138,346 |
Weighted average no. of shares in issue throughout the year | 584,138,346 | 485,999,406 |
Basic Loss per share | (1.56)p | (2.89)p |
Diluted Loss per share | (1.56)p | (2.89)p |
64
Sancus Lending Group Limited
For the year ended 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS (Continued)
11. FIXED ASSETS
Right-of-use | Property & | Total | |
| assets | Equipment | ||
Cost | £’000 | £’000 | £’000 |
At 31 December 2021 | 1,247 | 463 | 1,710 |
Additions in the year | - | 17 | 17 |
Disposals | - | (20) | (20) |
At 31 December 2022 | 1,247 | 460 | 1,707 |
Additions in the year | 246 | 3 | 249 |
Disposals | (128) | (44) | (172) |
At 31 December 2023 | 1,365 | 419 | 1,784 |
Right-of-use | Property & | Total | |
| assets | Equipment | ||
Accumulated depreciation | £’000 | £’000 | £’000 |
At 31 December 2021 | 686 | 364 | 1,050 |
Charge in the year | 197 | 55 | 252 |
Disposals | - | (20) | (20) |
At 31 December 2022 | 883 | 399 | 1,282 |
Charge for the year | 230 | 52 | 282 |
Disposals | (29) | (45) | (74) |
At 31 December 2023 | 1,084 | 406 | 1,490 |
Net book value 31 December 2023 | 281 | 13 | 294 |
Net book value 31 December 2022 | 364 | 61 | 425 |
65
Sancus Lending Group Limited
For the year ended 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS (Continued)
31 December 2023 | 31 December 2022 | |
£’000 | £’000 | |
At 31 December 2022 | 14,255 | 22,894 |
Impairment of goodwill | - | (8,639) |
Disposal of goodwill | (14,255) | - |
At 31 December 2023 | - | 14,255 |
Cost | £’000 |
At 31 December 2023, 31 December 2022 and 31 December 2021 | 1,584 |
Amortisation | £’000 |
At 31 December 2021 | 1,531 |
Charge for the year | 53 |
At 31 December 2022 | 1,584 |
Charge for the year | - |
At 31 December 2023 | 1,584 |
Net book value 31 December 2023 | - |
Net book value 31 December 2022 | - |
66
Sancus Lending Group Limited
For the year ended 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS (Continued)
Development | |
| properties | |
£’000 | |
Cost | |
At 31 December 2021 | 496 |
Additions | 210 |
At 31 December 2022 | 706 |
| Disposals | (706) |
At 31 December 2023 | - |
3 1 December | 31 December | |
3 | 2 | |
£’000 | £’000 | |
| Loan fees, interest and similar receivables | 7,235 | 4,673 |
| Receivable from associated companies | - | 5 |
Taxation | 5 | 58 |
| Other trade receivables and prepaid expenses | 818 | 1,070 |
8,058 | 5,806 |
Share Capital – ordinary shares of nil par value | ||
31 December 2023 | 31 December 2022 | |
Number of shares | Number of shares | |
At beginning of the year | 584,138,346 | 489,843,477 |
Issued during the year | - | 94,294,869 |
At end of the year | 584,138,346 | 584,138,346 |
67
Sancus Lending Group Limited
For the year ended 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS (Continued)
16. SHARE CAPITAL, SHARE PREMIUM & DISTRIBUTABLE RESERVE (continued)
Share Premium – Ordinary shares of nil par value | ||
31 December 2023 | 31 December 2022 | |
£’000 | £’000 | |
At beginning of the year | 118,340 | 116,218 |
Exercise of warrants | - | 2,122 |
At end of the year | 118,340 | 118,340 |
31 December 2023 | 31 December 2022 | |
Number of shares | Number of shares | |
Balance at start and end of the year | 11,852,676 | 11,852,676 |
31 December 2023 | 31 December 2022 | |
£’000 | £’000 | |
| Balance at start and end of the year | 1,172 | 1,172 |
31 December 2023 | 31 December 2022 | |
Non-current liabilities | £’000 | £’000 |
ZDP shares (1) | 13,967 | 9,117 |
Corporate Bond (2) | 14,950 | 14,925 |
Pollen Facility (3) | 77,169 | 66,826 |
Lease liabilities (Notes 2(u) & 24) | 130 | 152 |
106,216 | 91,020 |
68
Sancus Lending Group Limited
For the year ended 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS (Continued)
17. LIABILITIES (Continued)
31 December 2023 | 31 December 2022 | |
31 December 2023 | 31 December 2022 | |
Interest costs on debt facilities | £’000 | £’000 |
ZDP shares (1) | 1,817 | 831 |
Corporate Bond (2) | 1,075 | 920 |
Pollen Facility (3) | 7,645 | 5,116 |
Lease Interest | 25 | 38 |
10,562 | 6,905 |
69
Sancus Lending Group Limited
For the year ended 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS (Continued)
17. LIABILITIES (Continued)
18. TAXATION
The Company is exempt from Guernsey taxation under the Income Tax (Exempt Bodies) (Guernsey) Ordinance, 1989.
A fixed annual fee of £1,200 (31 December 2022: £1,200) is payable to the States of Guernsey in respect of this
exemption.
Reconciliation of tax charge
2023 | 2022 | |
£’000 | £’000 | |
Accounting loss before tax | (9,004) | (14,012) |
Gibraltar Corporation Tax at 10% (2022: 10%) | - | - |
Jersey Corporation Tax at 10% (2022: 10%) | - | - |
Ireland Corporation Tax at 12.5% (2022: 12.5%) | 133 | 68 |
Adjustments in respect of prior years | (3) | (18) |
Tax expense | 130 | 50 |
Certain of the Group’s subsidiaries have an estimated £29m of losses between them available to carry forward to offset
against qualifying future trading profits. The Group does not recognise deferred tax assets in respect of losses arising
because in the opinion of the directors the quantum and timing of any suitable taxable profits which can utilise these
losses is unknown.
70
Sancus Lending Group Limited
For the year ended 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS (Continued)
19. NOTES TO THE CASH FLOW STATEMENT
| Cash generated from operations (excluding loan movements) | ||
2023 | 2022 | |
£’000 | £’000 | |
Loss for the year | (9,134) | (14,062) |
| Adjustments for: | ||
Net (losses)/gains on FinTech Ventures | (715) | 894 |
| Other net losses/(gains) | 390 | (86) |
| ZDP finance costs | 1,791 | 807 |
| Impairment of joint ventures | 100 | 34 |
Changes in expected credit losses | 4,817 | 418 |
| Amortisation/depreciation of fixed assets | 282 | 305 |
Impairment of goodwill | - | 8,639 |
Amortisation of debt issue costs | 396 | 225 |
Loss on disposal of subsidiary | (202) | - |
Changes in working capital: | ||
Trade and other receivables | (7,116) | (392) |
Trade and other payables | (1,243) | (330) |
Cash outflow from operations (excluding loan movements) | (10,634) | (3,548) |
| Amortisation | |||||||
| of debt issue | 31 | ||||||
| 1 January | Debt issue | costs | Other | December | |||
| 2023 | Payments 1 | Receipts 1 | costs 1 | Non-cash | Non-cash | 2023 | |
£’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |
ZDP Shares | 9,117 | - | 3,000 | 32 | 27 | 1,791 2 | 13,967 |
Corporate Bond | 14,925 | - | - | - | 25 | - | 14,950 |
Pollen Facility | 66,826 | - | 10,000 | - | 343 | - | 77,169 |
Lease Liability | 364 | (229) 1 | - | - | - | 147 | 282 |
Total liabilities | 91,232 | (229) | 13,000 | 32 | 395 | 1,938 | 106,368 |
| Amortisation | |||||||
| of debt issue | 31 | ||||||
| 1 January | Debt issue | costs | Other | December | |||
| 2022 | Payments 1 | Receipts 1 | costs 1 | Non-cash | Non-cash | 2022 | |
£’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |
ZDP Shares | 10,532 | (2,037) 1 | - | (167) | 25 | 764 2 | 9,117 |
Corporate Bond | 12,474 | - | 2,425 | - | 26 | - | 14,925 |
Pollen Facility | 52,203 | - | 15,250 | (410) | 177 | (394) 2 | 66,826 |
| Lease Liability | 576 | (212) 1 | - | - | - | - | 364 |
Total liabilities | 75,785 | (2,249) | 17,675 | (577) | 228 | 370 | 91,232 |
71
Sancus Lending Group Limited
For the year ended 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS (Continued)
| Subsidiary entity | Date of | Country of | Nature of Holding | % |
Incorporation | Incorporation | held | ||
Sancus Group Holdings Limited | 27 December 2013 | Guernsey | Directly held -Equity Shares | 100% |
| Sancus Lending (Jersey) Limited | 1 July 2013 | Jersey | Indirectly held - Equity Shares | 100% |
Sancus Lending (Guernsey) Limited | 18 June 2014 | Guernsey | Indirectly held - Equity Shares | 100% |
Sancus Lending (Ireland) Limited | 10 April 2017 | Ireland | Indirectly held - Equity Shares | 100% |
Sancus Lending (UK) Limited | 17 February 2011 | UK | Indirectly held - Equity Shares | 100% |
Sancus Holdings (UK) Limited | 7 January 2011 | UK | Indirectly held - Equity Shares | 100% |
FinTech Ventures Limited | 9 December 2015 | Guernsey | Directly held - Equity Shares | 100% |
Sancus Properties Limited | 21 August 2018 | Guernsey | Indirectly held - Equity Shares | 100% |
Sancus Loans Limited | 3 July 2017 | UK | Indirectly held – Equity Shares | 100% |
Sancus Loans No2 Limited | 19 July 2023 | UK | Indirectly held – Equity Shares | 100% |
Name of Investment: | Nature of holding | Country of incorporation | Percentage | Measurement |
| holding | ||||
FinTech Ventures: | ||||
Ovamba Solutions Inc | Indirectly held - Equity | United States of America | 20.18% | Fair Value |
72
Sancus Lending Group Limited
For the year ended 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS (Continued)
| Sancus loans and loan equivalents | 31 December 2023 | 31 December 2022 |
£’000 | £’000 | |
Non-current | ||
Sancus loans | - | 171 |
Sancus Loans Limited loans | 10,148 | 23,693 |
Total non-current Sancus loans and loan equivalents | 10,148 | 23,864 |
Current | ||
Sancus loans | 460 | 2,790 |
Sancus Loans Limited loans | 68,157 | 49,471 |
Total current Sancus loans and loan equivalents | 68,617 | 52,261 |
Total Sancus loans and loan equivalents | 78,765 | 76,125 |
31 December 2023 | 31 December 2022 | |||
Level 2 | Level 3 | Level 2 | Level 3 | |
£’000 | £’000 | £’000 | £’000 | |
FinTech Ventures investments | - | - | - | - |
Derivative contracts | (231) | - | (398) | - |
Total assets at Fair Value | (231) | - | (398) | - |
73
Sancus Lending Group Limited
For the year ended 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS (Continued)
22. FINANCIAL INSTRUMENTS - FAIR VALUES AND RISK MANAGEMENT (Continued)
FinTech Ventures investments (continued)
31 December 2022 | Equity | Loans | Total |
£’000 | £’000 | £’000 | |
Opening fair value | - | 500 | 500 |
New investments/divestments | - | 394 | 394 |
Realised gains recognised in profit and loss | - | (894) | (894) |
Closing fair value | - | - | - |
| Assets at Amortised Cost | ||
31 December 2023 | 31 December 2022 | |
£’000 | £’000 | |
Sancus loans and loan equivalents | 78,765 | 76,125 |
Trade and other receivables | 7,240 | 4,736 |
Cash and cash equivalents | 4,990 | 4,134 |
Total assets at amortised cost | 90,995 | 84,995 |
| Liabilities at Amortised Cost | ||
31 December 2023 | 31 December 2022 | |
£’000 | £’000 | |
ZDP Shares | 13,967 | 9,117 |
Corporate Bond | 14,950 | 14,925 |
Pollen Facility | 77,169 | 66,826 |
Trade and other payables | 2,053 | 2,698 |
Provisions in respect of guarantees | 18 | 413 |
Total liabilities at amortised cost | 108,157 | 93,979 |
74
Sancus Lending Group Limited
For the year ended 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS (Continued)
22. FINANCIAL INSTRUMENTS - FAIR VALUES AND RISK MANAGEMENT (Continued)
(1) Capital Risk Management (continued)
Contractual maturities of financial liabilities | Within 12 | Between 1 | Between 2 | |
months | and 2 years | and 5 years | Total | |
£’000 | £’000 | £’000 | £’000 | |
31 December 2023 | ||||
ZDP shares | - | - | 13,967 | 13,967 |
Corporate bond | - | 14,950 | - | 14,950 |
Sancus Loans Limited | - | - | 77,169 | 77,169 |
Trade and other payables | 2,085 | 180 | 37 | 2,302 |
Total liabilities | 2,085 | 15,130 | 91,173 | 108,388 |
Contractual maturities of financial liabilities | Within 12 | Between 1 | Between 2 | |
months | and 2 years | and 5 years | Total | |
£’000 | £’000 | £’000 | £’000 | |
31 December 2022 | ||||
ZDP shares | - | - | 9,117 | 9,117 |
Corporate bond | - | - | 14,925 | 14,925 |
Sancus Loans Limited | - | - | 66,826 | 66,826 |
Trade and other payables | 3,357 | 85 | 67 | 3,509 |
Total liabilities | 3,357 | 85 | 90,935 | 94,377 |
75
Sancus Lending Group Limited
For the year ended 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS (Continued)
22. FINANCIAL INSTRUMENTS - FAIR VALUES AND RISK MANAGEMENT (Continued)
(3) Interest rate risk (continued)
Floating rate | Fixed Rate | ||
| Financial | Financial | ||
Instruments | Instruments | Total | |
31 December 2023 | £’000 | £’000 | £’000 |
Assets | |||
Sancus loans and loan equivalents | 64,586 | 14,179 | 78,765 |
Cash and cash equivalents | 4,990 | - | 4,990 |
Total assets | 69,576 | 14,179 | 83,755 |
Liabilities | |||
ZDP shares | - | 13,967 | 13,967 |
Corporate Bond | - | 14,950 | 14,950 |
Sancus Loans Limited | - | 77,169 | 77,169 |
Total liabilities | - | 106,086 | 106,086 |
Total interest sensitivity gap | 69,576 | (91,907) | (22,331) |
Floating rate | Fixed Rate | ||
| Financial | Financial | ||
Instruments | Instruments | Total | |
31 December 2022 | £’000 | £’000 | £’000 |
Assets | |||
Sancus loans and loan equivalents | 7,194 | 68,931 | 76,125 |
Cash and cash equivalents | 4,134 | - | 4,134 |
Total assets | 11,328 | 68,931 | 80,259 |
Liabilities | |||
ZDP shares | - | 9,117 | 9,117 |
Corporate Bond | - | 14,925 | 14,925 |
Sancus Loans Limited | - | 66,826 | 66,826 |
Total liabilities | - | 90,868 | 90,868 |
Total interest sensitivity gap | 11,328 | (21,937) | (10,609) |
76
Sancus Lending Group Limited
For the year ended 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS (Continued)
22. FINANCIAL INSTRUMENTS - FAIR VALUES AND RISK MANAGEMENT (Continued)
(4) Investment risk (continued)
77
Sancus Lending Group Limited
For the year ended 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS (Continued)
22. FINANCIAL INSTRUMENTS - FAIR VALUES AND RISK MANAGEMENT (Continued)
(5) Credit risk (continued)
78
Sancus Lending Group Limited
For the year ended 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS (Continued)
22. FINANCIAL INSTRUMENTS - FAIR VALUES AND RISK MANAGEMENT (Continued)
(5) Credit risk (continued)
Provision for ECL (Continued)
Sancus loans and loan | Stage 1 | Stage 2 | Stage 3 | Total |
equivalents at 31 December 2023 | £’000 | £’000 | £’000 | £’000 |
Closing loans at 31 December 2022 | 61,932 | - | 14,193 | 76,125 |
New Loans | 44,199 | - | 421 | 44,620 |
Loans Repaid | (33,733) | - | (6,598) | (40,331) |
Transfers from Stage 1 to Stage 3 | (6) | - | 6 | - |
Movement in ECL | - | - | (1,649) | (1,649) |
Closing loans at 31 December 2023 | 72,392 | - | 6,373 | 78,765 |
Loss allowance | Stage 1 | Stage 2 | Stage 3 | Total |
at 31 December 2023 | £’000 | £’000 | £’000 | £’000 |
Closing loss allowance at 31 December 2022 | - | - | 6,835 | 6,835 |
Increase in provision | - | - | 1,649 | 1,649 |
Closing loss allowance at 31 December 2023 | - | - | 8,484 | 8,484 |
79
Sancus Lending Group Limited
For the year ended 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS (Continued)
22. FINANCIAL INSTRUMENTS - FAIR VALUES AND RISK MANAGEMENT (Continued)
(5) Credit risk (continued)
Provision for ECL (continued)
Sancus loans and loan | Stage 1 | Stage 2 | Stage 3 | Total |
equivalents at 31 December 2022 | £’000 | £’000 | £’000 | £’000 |
Closing loans at 31 December 2021 | 30,060 | 5,743 | 17,441 | 53,244 |
New Loans | 48,986 | - | 421 | 49,407 |
Loans Repaid | (17,109) | (2,776) | (6,215) | (26,100) |
Transfers from Stage 1 to Stage 3 | (5) | - | 5 | - |
Transfers from Stage 2 to Stage 3 | - | (2,967) | 2,967 | - |
Movement in ECL | - | (426) | (426) | |
Closing loans at 31 December 2022 | 61,932 | - | 14,193 | 76,125 |
Loss allowance | Stage 1 | Stage 2 | Stage 3 | Total |
at 31 December 2022 | £’000 | £’000 | £’000 | £’000 |
Closing loss allowance at 31 December 2021 | - | - | 6,409 | 6,409 |
Increase in provision | - | - | 426 | 426 |
Closing loss allowance at 31 December 2022 | - | - | 6,835 | 6,835 |
Loans | Trade | Guarantees | Total | |
| £’000 | Receivables | £’000 | £’000 | |
£’000 | ||||
Loss allowance at 31 December 2022 | 6,835 | 6,493 | 413 | 13,741 |
Charge /(credit) for the year | 4,032 | 1,180 | (395) | 4,817 |
Utilisations | (2,383) | (1,211) | - | (3,594) |
Loss allowance at 31 December 2023 | 8,484 | 6,462 | 18 | 14,964 |
80
Sancus Lending Group Limited
For the year ended 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS (Continued)
22. FINANCIAL INSTRUMENTS - FAIR VALUES AND RISK MANAGEMENT (Continued)
Currency | 31 December | 31 December | 31 December |
2023 | 2022 | 2021 | |
EUR | 1.1534 | 1.1284 | 1.1898 |
USD | 1.2731 | 1.2101 | 1.3527 |
| At 31 December 2023 | ||||||
Counterparty | Settlement | Buy | Buy Amount | Sell | Sell | Unrealised loss |
| date | Currency | £’000 | currency | amount | £’000 | |
€’000 | ||||||
| Alpha | December 2023 | GBP | 7,710 | Euro | 9,000 | (97) |
to January 2024 | ||||||
Lumon Risk | December 2023 | GBP | 23,851 | Euro | 27,640 | (134) |
Management | to January 2024 | |||||
Unrealised loss on forward foreign contracts | (231) |
| At 31 December 2022 | ||||||
Counterparty | Settlement | Buy | Buy Amount | Sell | Sell | Unrealised loss |
| date | Currency | £’000 | currency | amount | £’000 | |
€’000 | ||||||
EWealthGlobal | January 2023 | GBP | 3,565 | Euro | 4,187 | (144) |
Group Limited | to May 2023 | |||||
| Liberum | January 2023 | |||||
| Wealth Limited | to February | GBP | 3,202 | Euro | 3,650 | (35) |
2023 | ||||||
Lumon Risk | January 2023 | GBP | 9,259 | Euro | 10,676 | (219) |
Management | to May 2023 | |||||
Unrealised loss on forward foreign contracts | (398) |
81
Sancus Lending Group Limited
For the year ended 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS (Continued)
31 December | 31 December | |||
2023 | 2022 | |||
£ | £ | |||
Tracy Clarke (stepped down as non-executive director 30 March | 106,250 | 35,000 | ||
2023 | , | reappointed 31 March 2024) | ||
Steven Smith | 50,000 | 50,000 | ||
John Whittle | 42,500 | 42,500 |
2023 | 2022 | |
£’000 | £’000 | |
Aggregate remuneration in respect of qualifying service – fixed salary | 612 | 512 |
Aggregate amounts contributed to Money Purchase pension schemes | 17 | 21 |
Aggregate bonus paid (cash) | - | 50 |
82
Sancus Lending Group Limited
For the year ended 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS (Continued)
23. RELATED PARTY TRANSACTIONS (continued)
31 December 2023 | 31 December 2022 | |||
No. of Ordinary | % of Ordinary | No. of Ordinary | % of Ordinary | |
Shares Held | Shares | Shares Held | Shares | |
John Whittle | 138,052 | 0.02 | 138,052 | 0.02 |
Emma Stubbs | 1,380,940 | 0.24 | 1,380,940 | 0.24 |
Rory Mepham | 2,000,000 | 0.34 | - | - |
31 December 2023 | 31 December 2022 | |
£’000 | £’000 | |
Net receivable from/ (payable to) related parties | ||
Amberton Limited | - | (7) |
Office and staff costs recharges | ||
Amberton Limited | - | 47 |
24. LEASES
The Group as Lessee
Maturity Analysis – contracted undiscounted cash flows
31 December 2023 | 31 December 2022 | |
| £’000 | £’000 | |
Within one year | 207 | 247 |
In the second to fifth years inclusive | 137 | 166 |
After five years | - | - |
344 | 413 |
All lease commitments relate to office space.
83
Sancus Lending Group Limited
For the year ended 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS (Continued)
24. LEASES (continued)
Lease liabilities included in the statement of financial position
31 December 2023 | 31 December 2022 | |
| £’000 | £’000 | |
Current | 152 | 212 |
Non-current | 130 | 152 |
282 | 364 |
Amounts recognised in the statement of comprehensive income
2023 | 2022 | |
| £’000 | £’000 | |
Depreciation expense on right-of-use assets | 227 | 197 |
Interest expense on lease liabilities | 24 | 38 |
Expense related to short term leases | 258 | 149 |
Income received from sub-leasing right-of-use assets | 116 | 33 |
26. LOSS ON DISPOSAL OF SUBSIDIARY
On 15 March 2023, the Company announced the sale of Sancus Lending (Gibraltar) Limited for £10,000. A loss on
disposal of £202, being the difference between the net assets of Sancus Lending (Gibraltar) Limited and sale proceeds
on disposal has been recognised in the Consolidated Statement of Comprehensive Income.
84
Sancus Lending Group Limited
For the year ended 31 December 2023
NOTES TO THE FINANCIAL STATEMENTS (Continued)
27.
EVENTS AFTER THE REPORTING DATE
In April 2024, Somerston Fintech Limited, a subsidiary of Somerston Group, the majority shareholder of the Company,
subscribed for £5,000,000 of preference shares in Sancus Loans Limited (“Sancus Loans”). The Preference Shares
have a non-cash, cumulative coupon of 15% and a maturity date of 23 November 2026. The proceeds of the
subscription were used to strengthen the liquidity of Sancus Loans. Approximately £4m of these proceeds will be
available for transfer from Sancus Loans to other Group subsidiaries in order to provide the Group with additional
corporate flexibility and working capital.
The Company purchased 1,388,889 Zero Dividend Preference shares of no par value at a price of £1.08 per ZDP share
on 29 April 2024. All of the ZDP shares purchased will be held as treasury shares. Following this transaction, the
Company has 18,169,461 ZDP Shares in issue, of which 11,894,628 ZDP Shares are held by the Company as treasury
shares. The total number of ZDP Share voting rights is therefore 6,274,833.
85
Sancus Lending Group Limited
For the year ended 31 December 2023
OFFICERS AND PROFESSIONAL ADVISERS
Directors
Non-executive
Stephen Smith
John Richard Whittle
Tracy Clarke (resigned 30 March 2023, reappointed 31
March 2024)
Executive
Rory Mepham
Emma Stubbs (resigned 30 March 2023)
Tracy Clarke (appointed 30 March 2023, resigned 31
March 2024)
The address of the
Directors is the company’s registered office
Executive Management Team
Chief Executive Officer
Rory Mepham
Chief Financial Officer
Keith Lawrence (appointed 31 March 2024); Tracy Clarke
(resigned 31 March 2024)
Chief Investment Officer
James Waghorn
Registered Office
Nominated Advisor and Broker
Liberum Capital Limited
Ropemaker Place
25 Ropemaker Street
London, EC2Y 9LY
Company Secretary
Sanne Fund Services (Guernsey) Limited
1 Royal Plaza
Royal Avenue
St Peter Port
Guernsey, GY1 2HL
Legal Advisors, Offshore
Carey Olsen
PO Box 98
Carey House
Les Banques
St Peter Port
Guernsey, GY1 4BZ
86
Sancus Lending Group Limited
For the year ended 31 December 2023
OFFICERS AND PROFESSIONAL ADVISERS (continued)
Legal Advisors, UK
Stephenson Harwood
1 Finsbury Circus
London, EC2M 7SH
Legal Advisors, USA
Troutman Pepper
3000 Two Logon Square
Eighteenth and Arch Streets
Philadelphia, PA 19103-2799
Bankers
Barclays International
1
st
Floor, 39041 Broad Street
St Helier
Jersey, JE4 8NE
Auditors
Moore Kingston Smith LLP
9 Appold Street
London
EC2A 2AP
Registrar
Link Market Services Limited
The Registry, 34 Beckenham Road
Beckenham
Kent, BR3 4TU
Public Relations
Instinctif Partners Limited
65 Gresham Street
London, EC2V 7NQ