The adoption of our new accounting policy for platform valuations improves the clarity of our Group results and brings them in line with how we view the Group’s performance. Change in accounting policy Governance and Board changes In our Interim report we discussed the view of the Board that the Effective governance processes both at subsidiary and holding Group’s results are best presented by disclosing the consolidated company level continue to be a priority for your Board. This is earnings of Sancus BMS and the fair value of the FinTech Ventures’ critical to ensuring that only well-considered risks are taken, platform portfolio Proforma figures were disclosed on this basis. and expe cted returns emerge as planned. At Group level a more I’m pleased to say that we have adopted a new accounting policy strategic approach to the assessment, reporting and management to enable us to state the platform of risk has been implemented. W ithin the subsidiaries themselves , portfolio at fair value, so bringing the Group’s consolidated statutory accounts in line with how we the management of credit and information technology risks are view and manage the Group’s performance. Refer Note 2(b) for a priority, and the GLI team works with the boards of subsidiaries further detail. to ensure the effective management of these risks. This change has meant that we have been able further to simplify I would like to thank both Fred Forni and James Carthew, two of our disclosures by taking advantage of the exemption in the my fellow long standing Board Directors for their support over the Companies (Guernsey) Law, 2008, of the requirement to disclose years. James and Fred have resigned from the Board with effect Company-only financial information. from 23 September 2016. Fred had been on the Board over 10 years and was one of the longest serving Board members. James decided As stated previously, we are reporting the results of the Group to step down due to other business commitments and John Whittle, as a Trading Business and have moved away from fund reporting previously James’s alternate, succeeded James on the Board and NAV updates. Instead we will be providing trading updates and assumed the role of Audit and Risk Committee Chairman with an earnings focus on a bi- annual basis in future. on 23 September 2016. Financial results We continue to monitor the comosition of the Board and are p The key features of our financial results this year have been: planning to appoint an additional Non-Executive director this year. > continued growth in the profitability of Sancus and BMS Somerston Group has the right to nominate a candidate for (key components of Sancus BMS); appointment to the Board and it is expected they will consider doing so during 2017. > the consolidation, for the first time, of the operating losses The Board and I wish to thank And y Whelan and his team for their of Sancus Finance and Funding Knight; excellent work and diligence in taking the Group forward through > impairment to the goodwill of two subsidiaries (Sancus Finance a challenging period. and Funding Knight) and to the value of FinTech Ventures’ portfolio; and, Outlook > incurring restructure costs of GBP1.9m The global financial markets may be more volatile than in 2016, fuelled by a changing political landscape, including the impending exit of the The consolidated loss for the year of GBP16.5m primarily reflected UK from the European Union, but this is unlikely to have more than a the Sancus Finance and Funding Knight operating losses and marginal impact on the growth of loan books across the Group. goodwill write downs, as well the FinTech Ventures’ fair value Sancus BMS is expected to continue growing its profitability, reductions. This has been a very difficult year for the Group, but and is focussed on adding to its funding base. I look forward to one from which our two businesses have emerged more focused, an improved performance from Sa and w ith a more predictable, more positive outlook. ncus Finance. Dividends Following a year during which the promise of some of the FinTech Ventures’ platforms began to show, and others failed to meet the The Company has stated that it will pay the quarterly dividends expectations set at the time of investment, we are more optimistic totalling 2.5 pence in respect of the 2016 financial year. The fourth for the year ahead. The focus in 2017 and beyond will very much be payment of 0.625p will be made on 21 April 2017. on supporting platforms through strategic input, introductions to The Trading Update published on 13 March 2017 described the external fun ders and limited provision of fnanc. e expect to see i eW rationale for introducing a revised dividend policy. This recognises a growth trajectory for the majority of our platforms during 2017, the need to balance dividend payments in the short term with though anticipate that those platforms that fail to reach break-even the opportunities to grow the business for shareholders in the within the next 12 months will find future funding increasingly longer term. As such the Group’s policy is to make dividend challen ging. We are optimistic th at some platforms may reach payments which are consistent with prudent capital and liquidity realisable valuations during the year and the Group will seek to management, covered by cash earnings and realised profits on take advantage of this. the sale of investments. Any dividend will be set at a rate that 2016 was a year of significant change, some tough decisions, is affordable. and a lot of hard work to improve the positioning of the Group for the GLI is committed to providing a stable progressive platform future. This having been achieved I am increasingly excited about the for future growth. Group’s prospects and confident in our ability to execute accordingly. Where deemed appropriate an d subject to the criteria outlined above, In conclusion, I am very grateful to all our Shareholders who have any dividend payments will be made half yearly, (September (interim maintained confidence in the Group during the challenges faced dividend) and March (final dividend)), with a weighting in payment of in our last fina ncial year. approximately one third/two thirds respectively between periods. Patrick Firth Non-Executive Chairman 26 March 2017 GLI Finance Annual Report 2016 5 Overview Strategic report Corporate governance Financial statements Additional information