March 2024
Annual Report and Accounts
SVM UK
Emerging Fund plc
The investment objective of SVM UK Emerging Fund plc
(the “Fund” or the “Company”) is long term capital growth
from investments in smaller UK companies. Its aim is to
outperform the IA UK All Companies Sector Average Index
on a total return basis.
Contents
1 Highlights
2-5 Chairman’s Statement
6-8 Manager’s Review
9 Investment Portfolio
10-16 Strategic Report
17 Board of Directors
18-23 Report of the Directors
24-26 Directors’ Remuneration Report
27-28 Audit Committee Report
29 Statement of Directors’ Responsibilities
30-35 Independent Auditor’s Report
36 Income Statement
37 Balance Sheet
38 Statement of Changes in Equity
39-40 Accounting Policies
41-46 Notes to the Financial Statements
47 Glossary of Terms and Alternative Performance Measures
48-50 Notice of Annual General Meeting
51 Shareholder Information
52 Corporate Information
31 March 31 March
2024 2023 % Change
Capital Return performance:
Net asset value per share (p) 96.73 93.03 4.0%
Share price (p) 61.50 65.50 -6.1%
MSCI UK Investable Market Index*** 2,277.47 2,093.18 8.8%
Discount* 36.4% 29.6%
Gearing* 0.7% 9.3%
Ongoing charges ratio:*
Investment management fees**** 0.30% 0.68%
Other operating expenses 2.51% 2.32%
Total 2.81% 3.00%
Total Return to 13510
31 March 2024 (%) Year Years Years Years
Net Asset Value 4.0% -22.6% -12.1% 30.8%
Comparator** 7.5% 11.2% 24.0% 59.6%
*For a definition of terms see the Glossary of Terms and Alternative Performance Measures on page 47.
**The comparator for the Fund is the IA UK All Companies Sector Average.
*** The MSCI UK Investable Market Index is a representative index of the UK Equity Market.
****Further information regarding investment management fees is included in Note 11 to the accounts on page 46.
Year to Year to
31 March 31 March
2024 2023
Total Return performance:
Net asset value total return* 4.0% -17.3%
Share price total return* -6.1% -25.1%
Comparator (IA UK 7.5% -1.9%
Companies Sector Average)**
• Over the 12 months to 31 March 2024, net asset value per share gained 4.0% to
96.73p compared to a return of 7.5% in the chosen comparator, the IA UK Companies
Sector Average. Over the same period the share price fell 6.1%
• Over the five years to 31 March 2024, net asset value has fallen 12.1% and the share
price 26.8%, against the comparator return of +24.0%
• There was a strong rebound in the market in general from October 2023 lows, with
takeovers of a number of mid cap companies
• Smaller companies again lagged the broader market averages
• Portfolio position numbers were reduced, emphasising liquidity
• At 28 June 2024 net asset value was 96.99p
Highlights
SVM UK EMERGING FUND plc 1
Annual Report & Accounts 2024
Financial Highlights
Over the year to 31 March 2024, net
asset value per share gained 4.0% to
96.7p and the share price fell 6.1%
compared to a return of 7.5% in the
chosen comparator, the IA UK
Companies Sector Average. The Board
appreciates that the level of discount
(36.4% at 31 March 2024 and 29.6% at
31 March 2023) is unhelpful to
shareholders wishing to realise their
investment. The Board will be
monitoring this carefully as the
Company approaches its scheduled
vote on the Company’s continuation in
2025.
The Company’s net asset value
increased in the two months since the
year end to 96.99p at 28 June 2024
(total return, FE fundinfo, IA UK
Companies Sector Average for
comparison purposes).
Review of the year
The year under review saw smaller
companies fall to their worst
underperformance relative to the broader
market indices in over 20 years, before a
rebound began in October 2023. Despite
improving prospects for the UK economy
with the expectation of a cut in interest
rates, recovery in recent months has
been moderate and sentiment towards
UK equities remains subdued. The
performance of smaller companies has
lagged that of medium and large
companies over the past 10 years. This
pattern is not unique to the UK - smaller
companies have underperformed large
companies in most developed countries.
However, the portfolio has benefited
from some UK companies making plans
to move their primary listings to Wall
Street with the prospect of higher
valuations. Also, a noticeable pickup in
merger activity and takeovers of UK
smaller and medium sized companies
has brought some life back into the
smaller company sector.
Chairman’s
Statement
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SVM UK EMERGING FUND plc
Annual Report & Accounts 2024
For a definition of terms see Glossary of Terms and Alternative Performance Measures on page 47.
SVM UK EMERGING FUND plc 3
Annual Report & Accounts 2024
The strongest contributions to
performance over the year were Dechra
Pharmaceuticals, 4Imprint Group, CRH,
Howden Joinery and Intercontinental
Hotels Group. Dechra, Instem and Kape
Technologies were taken over. Merger
and acquisition activity points to
recognition that share prices of some
successful British businesses have
become attractive as acquisition targets.
Negatives included Watches of
Switzerland, JD Sports Fashion, FDM
Group, XP Power and Impax Asset
Management.
Over the 12 months the number of
positions in the portfolio was reduced
from 62 to 45 and gearing was gradually
unwound from 109.3% to an almost
ungeared position of 100.7% market
exposure at the end of the period. New
purchases included Integrafin, Tesco,
IMI, Conduit and Marks & Spencer, and
significant additions were made to
existing investments in Howdens, Boku,
Segro and Serco. Complete sales were
made of Dianomi, Rentokil, Oxford
Instruments, Spectris, RS Group,
Loungers, Entain, Treatt and JD Sports
Fashion.
Reducing the number of holdings has
made little change to sector weightings
or the concentration in the largest ten
positions. Representation of banks,
commodities and pharmaceuticals
amongst smaller and medium sized
companies is low and accordingly the
Fund has little investment in these areas.
Annual General Meeting
The Annual General Meeting will be held
on Friday 6th September 2024 at SVM
Asset Management Limited's offices in
Edinburgh. At the last General Meeting,
shareholders approved powers for the
Company to issue shares and to buy
back for cancellation, or to hold in
treasury. Your Board has directed the
Manager to implement this
arrangement, operating within Board
guidelines and approvals. This was
intended to improve liquidity in our
shares, and your Board did not expect
this overall to be dilutive to shareholders.
With effect from 1 September 2023 the
Manager agreed to waive its
management fee until further notice.
This was in recognition of the higher
than usual level of expenses in the
Company. This will be reviewed if
circumstances change. On 1 December
2023 the full Investment Management
and Secretarial Agreement was
transferred from SVM Asset
Management Ltd to River Global
Investors LLP by deed of novation. There
was no change to the terms of the
agreement.
The Board and Manager are committed
to investing in a responsible manner and
the Manager embeds Environmental,
Social and Governance considerations
into the research and analysis
undertaken as part of the investment
process.
4
SVM UK EMERGING FUND plc
Annual Report & Accounts 2024
O
utlook
T
he evidence suggests that the UK is
now well past peak inflation with some
improving lead indicators. Valuations
suggest that there is a substantial
opportunity in many UK smaller
companies today. Some larger
companies are included in the portfolio
to assist overall liquidity and participate
in some favourable trends and business
characteristics not readily available in
smaller companies.
The portfolio focuses on resilient
growing businesses, typically with a
c
ompetitive edge in their sector or
niche that helps growth and assists in
protecting profit margins. The Fund is
positioned to benefit from an
improving UK economy and recovery
of interest by international investors.
The Fund remains fully invested.
Peter Dicks
Chairman
30 July 2024
SVM UK EMERGING FUND plc 5
Annual Report & Accounts 2024
Summary
The twelve months under review saw UK
shares initially lag other major markets, with
poor sentiment towards UK smaller companies
in particular. These concerns peaked as the UK
economy began a weak final quarter in 2023.
The Fund lagged the broader indices that have
greater emphasis on larger companies.
However, a stockmarket recovery began in
October 2023, helped by the prospect of
interest rate cuts in 2024. The global economic
outlook has improved in recent months,
despite heightened international tension and
conflicts. Although UK government borrowing
is high, the economy is resilient, and data now
suggests that growth and inflation are running
much in line with the European averages,
following a weaker recovery from the
pandemic. The principal UK concerns are high
inflation in the service sector, a rising benefits
cost and a need to address public sector
productivity. Business investment, which had
flatlined in the period after the Brexit vote has
recently begun to show signs of recovery.
Corporate balance sheets are generally sound
and businesses, with the UK labour market still
relatively tight, are taking the opportunity to
invest.
The UK Consumer is in reasonably good health.
UK households have been - since mid-2021 -
without net debt. Current savings data and
consumer lending activity do not signal an
imminent deterioration in this position. The
2023 pressures of rising interest rates and
inflation draining consumer confidence are
easing. Mortgage costs and food inflation
should become a lower burden on households
as the year progresses, with real wage growth
now positive. The unemployment rate remains
relatively low by historical measures. During
2024, consumer sentiment should be further
boosted by sizable benefit and state pension
increases, alongside a higher minimum wage.
Portfolio review and investment strategy
The Fund emphasises businesses assessed by
the Manager as having a credible growth
strategy that management can deliver.
Typically, this involves a competitive edge in
their sector or niche that helps growth and
assists in protecting profit margins.
Recognising the medium to longer term
potential of these businesses, portfolio
turnover is lower than the industry average.
The aim is to follow smaller and medium sized
companies as they grow to a size that attracts
more institutional investment and research
coverage, with the potential to improve
valuation and liquidity. Some larger companies
are included in the portfolio to assist overall
liquidity and participate in some favourable
trends and business characteristics not readily
available in smaller companies.
Repositioning of the portfolio has recognised
stewardship and sustainability. The Manager’s
approach to investing integrates
environmental, social and governance analysis
into its day-to-day investment activities, and
this combined with an active engagement
approach seeks to influence change and better
practices from the companies in which it
invests. Companies with successful business
models are usually transparent in their
accounting and reporting and communicate
their strategy.
During the 12 months under review, all
resolutions of portfolio companies were
Manager’s
Review
6
SVM UK EMERGING FUND plc
Annual Report & Accounts 2024
reviewed in terms of corporate sustainability
and governance. All voting on behalf of the
Fund is recorded, along with independent
governance advice. On several occasions
voting was against or withheld despite
r
ecommendations from the company boards
involved. The contentious issues involved
remuneration, financial statements and pre-
emption rights. Sadly, governance concerns
were often greatest within very small
‘microcap’ companies that should be even
more focused on engaging with shareholders
in order to secure growth capital. As a result,
several microcap holdings were sold during
the year with the result that overall portfolio
liquidity has been improved. Good stewardship
of shareholders’ capital is key to longer term
growth; Greggs and Games Workshop Group
are examples in the portfolio of businesses
that have been managed to deliver long term
growth with sustainable management of
capital.
Ten new holdings were added during the
twelve months. The portfolio includes two
non-life insurers, Beazley and Conduit,
together representing just under 7% of the
total portfolio value. Conduit was a new
investment during the year. It is capitalised at
£870m and is benefitting from higher
underwriting income helped by a favourable
industry background. It has reported that it is
s
eeing good opportunity to deploy capital.
Beazley is capitalised at £4.5bn and in early
2024 it reported record earnings and
favourable underwriting conditions.
During the year additional investment was
made in digital payments business, Boku.
Capitalised at £550m and UK-listed, it is US
headquartered and services clients
internationally, with an emphasis on emerging
markets that offer growth and less
competition. Boku has seen upgrades to
profits expectations and its shares, although
premium-rated, are at a discount to larger
international competitors.
The sole investment in healthcare is Kooth, a
provider of digital services assisting youth
mental well-being. Although a UK smaller
company, Kooth operates in the US as well as
the UK, and in early 2024 it reported record
revenues.
SVM UK EMERGING FUND plc 7
Annual Report & Accounts 2024
Outlook
Consumer and business confidence are
improving in the UK. Low valuations relative to
long term averages point to opportunity from
investing in UK smaller companies today.
Historically, in this phase of the economic cycle
– with broadening recovery and the prospect of
interest rate cuts - smaller companies have
started to outperform. There is also a market
pattern of increasing takeover bid activity,
particularly in mid-caps, suggesting some share
prices had fallen below true commercial value.
The companies in the portfolio typically benefit
from economic growth.
There is the prospect of the Bank of England,
together with its US and EU counterparts,
cutting interest rates later this year. Central
banks appear alert to the risk that inflation
could fall below targets as some disinflationary
forces remain. In the UK, the general election
has brought further debate on the need for
economic growth and this should be a positive
background for consumer discretionary sectors
and housebuilding, despite the possibility of
higher taxes. UK growth should accelerate in
2025, and the portfolio is fully invested, with
exposure to companies that should benefit
from this improving background. Recent
updates from most portfolio companies have
been positive. The portfolio emphasises
exposure to businesses with strong
competitive positions and potential for organic
growth.
Colin McLean
Investment Manager
30 July 2024
8
S
VM UK EMERGING FUND plc
Annual Report & Accounts 2024
Top 5 Contributors to Absolute Performance (%)
Company name Contribution
D
ECHRA PHARMACEUTICALS 1.30
4
IMPRINT GROUP 1.17
CRH 1.15
HOWDEN JOINERY GROUP 0.95
INTERCONTINENTAL HOTELS GROUP 0.81
Bottom 5 Contributors to Absolute Performance (%)
Company name Contribution
M
ICROLISE GROUP -0.59
K
AINOS GROUP -0.58
RENTOKIL INITIAL -0.57
ENTAIN -0.54
TEAM17 GROUP -0.48
Market Market
Exposure Exposure
2024 % of Net 2023
N
ame £000 Assets £000
1 4Imprint Group 301 5.2 335
2 Howden Joinery Group 217 3.7 154
3 Beazley 208 3.6 187
4 Unite Group 197 3.4 192
5 Boku 182 3.2 67
6 Serco Group 179 3.1 110
7 Ashtead Group 176 3.0 155
8 Games Workshop Group 175 3.0 140
9 Experian 173 3.0 133
10 CRH 169 2.9 –
Ten largest Investments 1,977 34.1
11 Conduit 165 2.8 –
12 Jet2 164 2.8 150
13 Compass Group 163 2.8 –
14 Alpha Group International 161 2.8 321
15 Cranswick 160 2.8 66
16 IMI 158 2.7 –
17 Computacenter 156 2.7 89
18 Marks & Spencer Group 154 2.7 –
19 Intercontinental Hotels Group 152 2.6 –
20 Tesco 151 2.6 –
Twenty largest investments 3,561 61.4
21 Whitbread * 150 2.6 66
22 Keystone Law Group 148 2.6 115
23 Londonmetric Property 144 2.5 70
24 JTC 134 2.3 –
25 Man Group 134 2.3 59
26 Segro 124 2.1 53
27 Hilton Food Group 124 2.1 102
28 Greggs 121 2.1 –
29 Renew 118 2.1 86
30 Flutter Entertainment * 113 1.9 145
Thirty largest investments 4,871 84.0
Other investments (15 holdings)*** 954 16.5
CFD positions (389) (6.7)
CFD unrealised gains 49 0.8
Total investments 5,485 94.6
CFD unrealised losses (9) (0.2)
Net current assets ** 323 5.6
Net assets 5,799 100.0
Investment Portfolio
as at 31 March 2024
S
VM UK EMERGING FUND plc 9
Annual Report & Accounts 2024
*Investment held as
Contract for Difference
("CFD").
** Net current assets
per this table do not
include CFD unrealised
losses as these are
disclosed separately for
clarity. These losses are
included in creditors in
the balance sheet and
are therefore included
within net current assets
in the balance sheet.
*** Includes CFDs.
Market exposure for
equity investments held
is the same as fair value
and for CFDs held is the
market value of the
underlying shares to
which the portfolio is
exposed via the contract.
The investment portfolio
is grossed up to
include CFDs and the net
CFD position is then
deducted in arriving at
the net asset total.
Further information is
given in note 6 to the
Financial Statements. A
full portfolio listing as at
31 March 2024 is
detailed on the website.
10
SVM UK EMERGING FUND plc
Annual Report & Accounts 2024
Strategic Report
The Directors are pleased to submit the
Strategic Report for the year to 31 March 2024.
The information set out on pages 2 to 16
including the Chairman’s Statement and the
Manager’s Review, forms part of the Strategic
Report.
Investment Objective
The investment objective of the Fund is long
term capital growth from investments in
medium-sized and smaller UK companies. Its
aim is to outperform the IA UK All Companies
Sector Average on a total return basis.
Investment Policy and Gearing Policy
The Fund aims to achieve its objective and to
diversify risk by investing in shares and related
instruments, controlled by a number of limits
on exposures. Appropriate guidelines for the
management of the investments, gearing and
financial instruments have been established by
the Board. Limits are expressed as
percentages of shareholders’ funds, measured
at market value.
Although the comparator is the IA UK
Companies Sector Average, the pursuit of the
investment objective may involve exposure to
companies on various exchanges and to
unlisted investments. A high conviction
investment approach is employed, which can
involve strong sector or thematic positions.
No individual investment will exceed 10% of
the portfolio on acquisition. Total exposure to
unlisted shares is also limited to a maximum of
25% of the portfolio and, historically, has been
considerably less. The Board has instructed the
Manager not to make any new investments
into unlisted shares. The two unlisted shares
held in the portfolio during the year were
valued at nil.
The Fund has the ability to borrow money to
enhance returns. This gearing can enhance
benefits to shareholders but, if the market
falls, losses may be greater. The level of
gearing, including the use of derivatives, is
closely monitored by the Manager and the
Board has set an upper limit of a total of 30%
of net assets. It may also sell parts of the
share portfolio and hold cash or other
securities when there may be a greater risk
of falling stock markets.
The Board has granted the Manager a limited
authority to invest in Contracts for Difference
(“CFDs”) (long positions) and similar
instruments as an alternative to holding actual
shares. This means that the gross cost of
investment is not incurred. The total effect of
such gearing (bank borrowings plus the gross
exposure of long positions less any hedging) is
limited to a total of 30% of the Fund’s net asset
value. Additional limits have also been set on
individual hedging to assist risk control. The
use of CFDs involves counterparty credit risk.
The Fund may also make use of hedging as
an additional investment tool. To help reduce
the potential for stock market weakness to
adversely impact the portfolio, the Board has
granted the Manager limited authority to
hedge risks, within specified limits and to a
maximum of 15% of the total portfolio. Such
hedging (short positions) may be conducted
through CFDs or other index instruments.
Hedging can be used to facilitate adjustment
of the portfolio at a time of economic
uncertainty or increased risk. It is only used
occasionally and aids flexibility and can allow
exposure to a sector to be reduced with less
disruption to the underlying long term
portfolio. However, in a rising stockmarket,
Historical record NAV Share Total
Year to 31 March per Share Price Return Rating
(p) (p) (p) Discount
2010 68.53 50.00 23.80 27.0%
2011 87.36 63.00 18.83 27.9%
2012 71.47 55.00 (15.89) 23.0%
2013 53.90 43.00 (17.57) 20.2%
2014 73.93 57.75 20.03 21.9%
2015 75.38 59.00 1.45 21.7%
2016 81.47 62.50 6.09 23.3%
2017 94.25 67.50 12.78 28.4%
2018 112.05 90.00 17.80 19.7%
2019 110.06 84.00 (1.99) 23.7%
2020 81.88 70.00 (28.20) 14.5%
2021 125.00 99.50 43.12 20.4%
2022 112.51 87.50 (12.49) 22.2%
2023 93.03 65.50 (19.48) 29.6%
2024 96.73 61.50 3.70 36.4%
S
VM UK EMERGING FUND plc 11
Annual Report & Accounts 2024
this may adversely impact performance.
The Fund does not normally invest in fixed rate
s
ecurities other than securities that are
convertible into equity. The Fund may,
however, invest in short dated Government
Securities as an alternative to holding cash.
Strategy and Business Model
The Fund is an investment trust which invests
in accordance with its objective and investment
policy as set out above. It has no employees
and outsources the management of its
investment portfolio to the Manager. The Board
of the Fund is ultimately responsible for the
stewardship of the Company’s affairs and risks,
acting in the interests of shareholders.
The Fund is required to comply with the
Companies Act, the UK Listing Rules and
applicable accounting standards. In addition to
the formal annual financial statements, interim
accounts and interim management statements,
it publishes monthly asset values and quarterly
factsheets.
Key Performance Indicators
The Directors consider a number of key
performance indicators (“KPIs”) to measure
the Fund’s success in achieving its
objectives. The KPIs used to measure the
performance and development of the
Fund are the Net Asset Value per share
(“NAV”), share price performance and the
discount. The Board assesses these on a
regular basis. Further information on these
indicators is detailed in the Highlights page,
Chairman’s Statement, the Manager’s
website www.river.global and quarterly
factsheets. The Board also reviews the
performance of the Fund against its peers.
12
SVM UK EMERGING FUND plc
Annual Report & Accounts 2024
Results
The total profit for the year of £222,000 (2023:
loss of £1,168,000) has been transferred to
reserves. No dividend has been declared. The
net asset value total return was 4.0% for the
year. At 31 March 2024, the net asset value per
share was 96.73p and the share price was
61.50p. The Chairman’s Statement and
Manager’s review include a review of the main
developments during the year.
Portfolio Analysis
An analysis of the Fund’s portfolio is provided on
the page entitled ‘Investment Portfolio’ and in
the Manager’s Review.
Principal Risks and Uncertainties
The Directors carry out a robust assessment of
the Company's emerging and principal risks
including reviewing the policies implemented for
identifying and managing the principal risks
faced by the Company.
Many of the Company’s investments are in
small companies and may be seen as carrying a
higher degree of risk than their larger
counterparts. These risks are, where practical,
mitigated through portfolio diversification, in-
depth company analysis, the experience of the
Manager and a rigorous internal control culture.
Further information on the internal controls
operated for the Company is detailed in the
Report of the Directors.
The principal risks facing the Company relate to
the investment in financial instruments and
include market, liquidity, credit and interest rate
risk. An explanation of these risks and how they
are mitigated is explained further under
“Financial”. Additional risks faced by the Fund
are summarised below.
Emerging risks –
are risks that could have a
future impact on the
Company
. The Board
considers that emerging risks exacerbate
existing identified risks e.g. market risk, rather
than themselves being new risks. The
Managers subscribe to a range of daily
investment research, including macro issues.
The investment team digest this and assess
whether any developments represent new or
growing risks. The directors bring their own
intelligence into board meetings as context for
the manager. Whilst there were no new
specific emerging risks added to the risk
register during the year, certain other risks
have continued to develop or recede, with the
conflict between Russia and Ukraine being an
example that continues to be considered. The
Board recognise the impact of inflationary
pressures and rising interest rates as
established risks.
Investment strategy – The risk that an
inappropriate investment strategy may lead to
the Fund underperforming its comparator, for
example in terms of share selection, asset
allocation or gearing. The Board has given the
Manager a clearly defined investment
mandate which incorporates various risk limits
regarding levels of borrowing and the use of
derivatives. The Manager invests in a
diversified portfolio of holdings and monitors
performance with respect to the comparator.
The Board regularly reviews the Fund’s
investment mandate and long term strategy.
This is a stable risk.
Discount – The risk that a disproportionate
widening of discount in comparison to the
Fund’s peers may result in loss of value for
shareholders. The discount varies depending
upon performance, market sentiment and
investor appetite. The Board regularly reviews
the discount and the Fund operates a share
buy-back programme. The Board acknowledge
the discount rate has widened and, by virtue
of that in isolation, assess that the associated
risk has increased during the year.
Accounting, Legal and Regulatory – Failure to
comply with applicable legal and regulatory
requirements could lead to a suspension of the
Fund’s shares, fines or a qualified audit report.
In order to qualify as an investment trust the
Fund must comply with section 1158 of the
Corporation Tax Act 2010 (“CTA”). Failure to
do so may result in the Fund losing investment
trust status and being subject to corporation
tax on realised gains within the Fund’s
S
VM UK EMERGING FUND plc 13
A
nnual Report & Accounts 2024
portfolio. The Manager monitors movements in
investments, income and expenditure to ensure
compliance with the provisions contained in
section 1158. Breaches of other regulations,
including the Companies Act 2006, the Listing
Rules of the UK Listing Authority or the
Disclosure and Transparency
Rules of the UK
Listing Authority, could lead to regulatory and
reputational damage. The Board relies on the
Manager and its professional advisers to ensure
compliance with section 1158 CTA, Companies
Act 2006 and the United Kingdom Listing
Authority Rules. This is a stable risk.
O
perational – The risk of loss resulting from
inadequate or failed internal processes, people
and systems or from external events. The Fund
has no employees and relies upon the services
provided by third parties. The Manager has
comprehensive internal controls and processes
in place to mitigate operational risks. Risk
controls are monitored by their assigned owner
with oversight from the Manager’s risk and
compliance function as part of the Manager’s risk
and control framework, which is reviewed at
least
annually. This is a stable risk.
Corporate Governance and Shareholder
Relations – The risk that the Company fails to
meet legal, regulatory or best practice
requirements in respect of corporate
governance, resulting in a legal or regulatory
breach or censure with the potential for being
held to not having had due regard to the
interests of shareholders. Details of the Fund’s
compliance with corporate governance best
practice, including information on relations with
shareholders, are set out in the Directors’
Statement on Corporate Governance. This is a
stable risk.
Financial – The Fund’s investment activities
expose it to a variety of financial risks including:
Market risk
The risk that the Fund may suffer a loss arising
from adverse movements in the fair value or future
cash flows of an investment. Market risks include
changes to market prices, interest rates and
c
urrency movements. The Fund invests in a
diversified portfolio of holdings covering a range
of sectors. The Manager conducts continuing
analysis of holdings and their market prices with
an objective of maximising returns to
shareholders. Asset allocation, share selection
and market movements are reported to the
Board on a regular basis. This risk is variable,
which is assessed by the Board and the Manager
throughout the year and is considered as broadly
stable.
Liquidity risk
The risk that the Fund may encounter difficultly
in meeting obligations associated with financial
liabilities. The Fund is permitted to invest in
shares traded on AIM or similar markets; these
tend to be in companies that are smaller in size
and by their nature less liquid than larger
companies. The Manager conducts continuing
analysis of the liquidity profile of the portfolio and
the Fund maintains an overdraft facility to ensure
that it is not a forced seller of investments. This
risk is variable, depending on the liquidity of the
underlying investments and is assessed by the
Board and the Manager throughout the year and
is considered as broadly stable.
Credit risk
The risk that the counterparty to a transaction
fails to discharge its obligation or commitment to
the transaction resulting in a loss to the Fund.
Investment transactions are entered into using
brokers that are on the Manager’s approved list,
the credit ratings of which are reviewed
periodically in addition to an annual review by the
Manager’s board of directors. The Fund’s
principal bankers are State Street Bank & Trust
Company and the main broker for CFDs is UBS.
Interest rate risk
The risk that interest rate movements may affect
the level of income receivable on cash deposits.
At most times the Fund operates with relatively
low levels of gearing, this has and will only be
increased where an opportunity exists to
substantially add to the net asset value
performance.
The Board note the increase in
interest rates but assess the risk as stable.
14
SVM UK EMERGING FUND plc
Annual Report & Accounts 2024
The Board seeks to mitigate and manage these
risks through continuous review, policy setting
and enforcement of contractual obligations. The
Board receives both formal and informal reports
from the Manager and third party service
providers addressing these risks. The Board
believes the Fund has a relatively low risk profile
as it has a simple capital structure; invests
principally in UK quoted companies; does not
use derivatives other than CFDs and uses well
established and creditworthy counterparties.
The capital structure comprises only ordinary
shares that rank equally. Each share carries one
vote at general meetings.
Viability Statement and Going Concern
Assessment
In accordance with The Financial Reporting
Council’s guidance on going concern and
liquidity risk, the Directors have undertaken a
thorough review of the Company’s ability to
continue as a going concern. In considering
going concern and viability assessment, whilst
a modest operating loss is forecast for the 12
months following signature of these financial
statements the investment portfolio is heavily
weighted to level 1 share positions which
provides sufficient liquidity to meet the
operational cost shortfall. The Russian-Ukraine
conflict and current inflationary pressures have
created periods of heightened market volatility,
during which the Company has navigated with
no going concern or viability issues to note,
where 2 and 7 day liquidity buckets (to redeem
the portfolio) have remained strong throughout
and currently have 98% and 100% coverage
respectively. Management’s oversight of these
matters supports the view that a going concern
basis of reporting remains appropriate. The
Manager and the other service suppliers to the
Company have demonstrated operational
resilience to date.
I
n accordance with Section 31 of the FRC's 2018
UK Corporate Governance Code the Directors have
assessed the viability of the Company over a period
of five years and consider that an appropriate period
given the Company’s investment objective,
strategy and business model. The Manager has
conducted stress testing of the liquidity risk
within the portfolio holdings considering both a
reduction in the availability of market liquidity and
the impact of spread cost on the portfolio. In
addition market risk has been stress tested
through a range of scenario modelling including
hypothetical extreme situations where the Fund
has no income for 5 years so must cover all the
costs for that period, as well as no income and a
50% reduction in the value of the portfolio. The
assessment which has, in particular, considered
the impact of heightened market volatility since
the Russian invasion of Ukraine and events in the
Middle East, has taken account of the Company’s
position, its investment objective and strategy, its
ability to settle projected liabilities of the
Company as they fall due and the potential impact
of the relevant principal risks detailed above.
Based on this assessment, the Directors have a
reasonable expectation that the Company will be
able to continue in operation and meet its
liabilities
as they fall due over the five year period, subject
to the Company’s Shareholders continuing to
support it and in particular voting in favour of the
continuation of the Company. A continuation vote
is held every five years at the AGM. The latest
vote was held in September 2020 at which the
Shareholders voted to approve the continuation
of the Fund for another five years. The next vote
will be held at the 2025 AGM.
On the basis of their robust review and with
consideration to the principal risks and
uncertainties the Company faces the Directors
consider it appropriate to adopt the going
concern basis of accounting in preparing the
annual financial statements and have not
identified any material uncertainties which
would affect the Company's ability to continue
in operation over a period of at least twelve
months from the date of approval of the
financial statements.
Directors’ Duty to Promote the Success of
the Company
Under section 172 of the Companies Act 2006
(the “Act”), the Directors have a statutory duty
to promote the success of the Company as a
whole and to describe how they have
performed this duty while having regard to
matters set out in section 172(1) of the Act and
the likely consequences of any decision in the
long term. The Board must consider how any
decision it makes will affect the stakeholders.
As an investment trust the Board’s principal
concern has been, and continues to be, the
interests of the Company’s Shareholders. As an
externally managed investment company, the
Company does not have employees. The Board
considers that its main stakeholders are its
Shareholders, who are also its customers, and its
suppliers. These suppliers are external firms
engaged by the Board to provide investment
management, secretarial, depositary, custodial,
banking and shareholder services. The principal
relationship is with the Manager, whose services
are fundamental to the success of the Company
through the pursuit of the investment objective.
To enable the Directors to exercise effective
oversight of the Company’s activities and
investment performance in relation to its
objective, the Board receives and reviews
detailed reports from the Manager at each
quarterly Board Meeting. The terms and
conditions of the Manager’s appointment are
reviewed by the Board annually. Further
information on the Board’s review process is set
out in the Directors’ Repor
t
.
The Manager seeks to maintain productive
relationships with the Company's other
suppliers on behalf of the Company through
regular communications, service review
meetings and the provision of information as
necessary.
To help the Board in its aim to act fairly between
the Company’s Shareholders, it encourages
communications with all shareholders. Directors
are available to meet with Shareholders during
the year and at the Annual General Meeting. The
AGM provides a key forum for both the Board
and the Manager to make presentations on the
performance of the Company. The Board seeks
to ensure that Shareholders are provided with
sufficient information to allow them to
understand the risk/return balance to which they
are exposed by holding their shares, through
the information given in the annual and half-
year financial reports, quarterly factsheets and
the monthly net asset value disclosures, all of
which are available on the Manager’s website.
In seeking to enhance value for Shareholders
over the long term, the Board has also
established guidelines to allow the Manager to
use gearing on a tactical basis when
opportunities arise and to implement share
buy-backs, operating within Board guidelines
and approvals. Further information on share
buy-backs can be found on pages 4 and 19.
Whilst the Company’s operations are limited
(with all substantive matters being conducted
by its externally appointed service providers)
the Board is aware of the need to consider the
impact of the Company’s operations on
environmental, social and governance matters
(ESG). The Board also expects good standards
at the companies within which the Company
is invested. In this regard, it is satisfied that
the Manager consistently and proactively
engages with investee companies on ESG
matters, where these are material to the
investment case and therefore to the long-
term success of the Company. The Manager’s
approach to investing integrates ESG analysis
into its day-to-day investment activities. This
is combined with an active engagement
approach which seeks to influence change
and better practices from the companies in
which it invests. Further details on the
Manager’s stewardship policy are available
under the Governance section of the
Manager’s website, at www.river.global. More
information on the Manager’s ESG policy can
be found under the Responsible Investing
section of the Manager’s website.
Directors and Employees and Gender
Representation
The Directors of the Company at 31 March
2024, all of whom held office throughout the
year, are set out on the page entitled ‘Board of
Directors’ which contains biographies.
Throughout the year the Board consisted of
SVM UK EMERGING FUND plc 15
Annual Report & Accounts 2024
three male Directors. At 31 March 2024, the
Board did not meet the FCA targets of at least
40% female directors nor a director from a
minority ethnic background. No woman held
one of the four senior positions, as listed by the
FCA, on the Board, but as an investment
company there is not a chief executive or chief
financial officer. There has been no change to
this information as at the date on which the
annual financial report was approved. The
Company does not have any employees.
Notwithstanding the size of the company and
the resulting small constitution of the Board and
low cost, it is committed to appointing
individuals of a high calibre based on merit, with
due regard to the benefits of diversity on the
Board.
Social, Community and Human Rights Issues
As an investment trust, the
Company
has no
direct responsibilities in respect of these matters,
however, the Directors recognise that
encouraging investee companies to recognise
these responsibilities can have positive
implications for shareholder value. Further
information on governance responsibilities,
including environmental, is included in the
Directors’ Statement on Corporate Governance
contained in the Directors’ Report.
The Company aims to act to the highest
standards in regard to these issues and is
committed to integrating responsible business
practices throughout its operations. The
prevention of modern slavery is an important
part of good corporate governance.
The Fund is an investment vehicle and does
not provide goods or services in the normal
course of its business, or have customers. The
Fund’s turnover is below the threshold of the
Modern Slavery Act 2015 and, accordingly, the
Directors consider that the Fund is not
required to make any slavery or human
trafficking statement under the Act.
Future Prospects
The Board’s main focus is to achieve long term
capital growth. The future performance of the
Fund is dependent on the success of the
investment strategy and the performance of
economic and financial markets. The current
outlook for the Fund is referred to in the
Chairman’s Statement and Manager’s Review.
The Board’s intention is that the Fund will
continue to pursue its investment objective
and stated investment policy.
By Order of the Board,
River Global Investors LLP
30 July 2024
Number of Percentage Number of senior positions on the
Gender identity or sex* Board members of the Board Board (CEO, CFO, SID and Chair)
Men 3 100% 2
Women –– –
Not specified/ –– –
prefer not to say
Number of Percentage Number of senior positions on the
Ethnic background* Board members of the Board Board (CEO, CFO, SID and Chair)
White British or other white 3 100% 2
(including minority-
white groups)
Mixed/Multiple ethnic groups –– –
Asian/Asian British –– –
Black/African/ –– –
Caribbean/Black British
Other ethnic group, –– –
including Arab
Not specified/ –– –
prefer not to say
* This information was collected through a self-identification exercise by all Directors and facilitated by the Company Secretary.
Permission was sought from the Directors to use the information for this purpose.
16
SVM UK EMERGING FUND plc
Annual Report & Accounts 2024
Board of Directors
Peter Dicks (Chairman)
Peter Dicks was a founder and director of
Abingworth plc which, between 1973 and
1992, specialised in making venture capital
investments in the USA and the UK. He is
currently a director of Averon Park Limited,
Miton UK MicroCap Trust plc, Unicorn Asset
Management Limited and other unquoted
companies. Mr Dicks was appointed on 4
October 2000, and stands for annual re-
election.
Ian Gray (Chairman of the Audit Committee
and Management and Nomination
Committee)
Ian Gray is a Chartered Accountant (FCA),
holding the Corporate Finance qualification and
a Chartered Manager. He has worked in
strategic roles in a variety of businesses
helping with their strategy, development and
corporate governance. He is a director of
Clancy Group Holdings Ltd. Mr Gray was
appointed to the Board on 6 March 2020 and
stands for annual re-election.
Jeremy Harris (Non-executive director)
Jeremy Harris is a solicitor and partner at
Brian Harris & Co, a member of the
International Bar Association and the Law
Society of England and Wales. He is a
director of Gatekeeper Trustee Limited. Mr
Harris was appointed to the Board on 15
August 2019 and stands for annual re-
election.
The Board regards all of the Directors to be
wholly independent of the Fund's Manager.
SVM UK EMERGING FUND plc 17
Annual Report & Accounts 2024
The Directors submit the Annual Report and
Financial Statements for the year to 31 March
2024.
Principal Activity, Status and Review
The Fund is an Investment Company as defined
in Section 833 of the Companies Act 2006
(company number: SC211841). It is not a close
company for taxation purposes. It has been
approved by HM Revenue & Customs as an
investment trust subject to the Fund continuing
to meet the eligibility conditions in section 1158
of Corporation Tax Act 2010 and the ongoing
requirements for approved companies. In the
opinion of the Directors, the Fund has
subsequently conducted its affairs so as to
enable it to continue to obtain such approval.
The Company is registered as a small UK
Alternative Investment Fund Manager under the
Alternative Investment Fund Managers
Regulations 2013.
There are no other instances where the
Company is required to make disclosures in
respect of Listing Rule 9.8.4R.
Directors
The Directors who held office during the year
and their beneficial interests in the ordinary
shares of the Fund were:
31 March 31 March
2024 2023
P F Dicks* 307,500 307,500
I Gray 15,000 15,000
J Harris – –
*Holding was previously disclosed in error as
297,000.
There have been no changes in the Directors’
interests between 31 March 2024 and 30 July
2024.
Each Director has a letter of appointment,
details of which are noted in the Directors’
Remuneration Report.
Each Director will offer himself for re-election at
the Annual General Meeting. The Board
considers that each Director is independent,
despite the Chairman having served on the
Board for more than ten years, and have
demonstrated their independence through
integrity and a robust contribution. The Board is
of the view that length of service does not
necessarily compromise the independence or
contribution of directors of an investment trust,
where continuity and experience can add
significantly to the strength of the Board. The
Board recommends the Directors’ individual re-
election to shareholders.
Management
On 1 December 2023 the full Investment
Management and Secretarial Agreement was
transferred from SVM Asset Management Ltd
to River Global Investors LLP by deed of
novation. There were no changes to the terms
of the agreement. These services can be
terminated without compensation at any time
by giving one year’s notice or an immediate
payment of a year’s fees in lieu of notice. The
Manager is entitled to a fee for these services,
payable quarterly in arrears, equivalent to 0.75%
per annum of the total assets of the Company,
less current liabilities. The Manager elected to
waive these fees with effect from 1 September
2023 until further notice.
The Management and Nomination Committee
assess the Manager’s performance on an
ongoing basis and meet each year to conduct a
formal evaluation of the Manager. It assesses
the resources made available by the Manager,
the results and investment performance in
relation to the Fund’s objectives and also the
additional services provided by the Manager to
the Fund.
The Committee has reviewed the Manager’s
contract. In carrying out its review, it considered
the past investment performance and the
Manager’s capability and resources to deliver
superior future performance. It also considered
the length of the notice period of the investment
management contract and the fees payable
together with the standard of other services
Report of the
Directors
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provided which include secretarial, accounting,
marketing and risk monitoring. Following this
review, it is the Directors’ opinion that the
continuing appointment of the Manager on the
terms agreed is in the best interests of the
shareholders.
Substantial shareholdings
As at 30 June 2024, the following interests in
excess of 3 per cent of the issued ordinary
shares of the Fund had been reported:
Number of Percentage
shares held held
C W McLean and
family members 1,749,932 29.1%
(held directly and
through Barnton
Capital and other
intermediaries) *
Armstrong
Investments Ltd 935,000 15.6%
Charles Stanley & Co,
Rock (Nominees)
Limited** 293,891 4.9%
Peter Dicks 307,500 5.1%
Stephen James
Blackford &
Mrs Tracey Magdeline
Blackford 296,000 4.9%
Integrated Financial
Arrangements Ltd 229,044 3.8%
* C W McLean has direct holdings of 370,000
(6.2%) which in prior years have been separately
disclosed. For the current year they have been
aggregated to show the total direct and indirect
holdings of C W McLean and his family
members.
** Holding at 31 March 2024 was 301,000
(5.0%). Within this figure are 35,932 shares
owned by C W McLean, also shown in the
disclosure of 1,749,932 shares.
Financial instruments
The Fund’s financial instruments comprise the
investment portfolio (including the use of CFDs),
cash at bank and on deposit, bank overdrafts
and debtors and creditors that arise directly
from operations. The main risks that the Fund
faces from its financial instruments are
disclosed in note 10 to the financial statements.
Share Capital
The rights and obligations attaching to the Fund’s
ordinary shares are set out in the Fund’s Articles
of Association. The ordinary shares, except
those held in treasury, carry the right to receive
any dividends and have one voting right per
share. There are no restrictions on voting rights
of the shares or the transfer of shares, and there
are no shares that carry specific rights with
respect to control of the Fund. 10,000 ordinary
shares were held in treasury at 31 March 2024
(2023: 10,000) which have no rights to vote or
receive dividends.
Directors’ authority to issue shares
The Directors are seeking authority to allot
ordinary shares up to an aggregate nominal
amount of £30,000 and authority to sell shares
held in treasury as set out in Resolutions 8 and
10 of the Notice of the Annual General Meeting.
The Directors believe this authority can improve
liquidity in the Fund’s shares and will only issue
shares pursuant to this authority if they believe
it is advantageous to the Fund’s existing
shareholders to do so.
Directors’ authority to buy back shares
The current authority of the Fund to make
market purchases expires on the conclusion of
this year’s Annual General Meeting. Resolution
8, as set out in the Notice of the Annual General
Meeting, seeks renewal of this authority to
make market purchases of up to 10% of the
issued ordinary shares. The price paid for shares
will not be less than the nominal value of 5
S
VM UK EMERGING FUND plc 19
Annual Report & Accounts 2024
pence per share nor more than 5% above the
average of the market values of these shares for
the five business days before the shares are
purchased. This power will only be exercised if,
in the opinion of the Directors, a repurchase
would be in the best interests of the
shareholders as a whole.
Any shares purchased under this authority will
either be cancelled or held in treasury for future
re-sale in appropriate market conditions.
There were no share buybacks during the year.
Going concern
The Board, having made appropriate enquiries,
has a reasonable expectation that the Fund has
adequate resources to continue in operational
existence for the foreseeable future, a period
of not less than 12 months from the date of
this report. At the Annual General Meeting to
be convened in 2025 and every five years
thereafter, shareholders will be given the
opportunity to decide on the future of the Fund
via a continuation vote. In assessing whether it
is a going concern the Board has considered
the principal risks and uncertainties, as
referenced in the Strategic Report, the current
cash position and the overall financial position
of the Fund alongside stress testing of portfolio
performance, analysis of portfolio liquidity
under normal and stressed scenarios, and the
Manager’s business continuity plan. For these
reasons, the Board considers that there is
reasonable evidence to continue to adopt the
going concern basis in preparing the financial
statements.
Directors’ Statement on Corporate
Governance
The Board of Directors considers that the Fund
has complied with the principles of the 2019 AIC
Code of Corporate Governance (“the AIC
Code”) and the provisions of the Financial
Reporting Council’s 2018 UK Corporate
Governance Code (the “Code’’) that are relevant
to the Fund throughout the year except as noted
below:
• the role of the chief executive;
• executive directors’ remuneration; and
• the need for an internal audit function.
Therefore, those issues on which the Fund does
not report in detail are excluded because the
Board deems them to be not relevant to the Fund
as explained in the AIC Code.
The Directors confirm that the Fund has
complied with the requirement to be headed by
an effective Board to lead and control it. The
Fund is an investment trust and not a trading
company and, as such, there is no requirement
for a Chief Executive Officer. The Board consists
solely of non-executive Directors. Mr Peter Dicks
is the Chairman and Mr Ian Gray is the Senior
Independent Director. All Directors are
considered by the Board to be independent of
the Manager and free from all business or other
relationships that could interfere with the
exercise of their independent judgement.
The Chairman has served for more than ten
years. However, the Board subscribes to the
view expressed within the AIC Code that long-
serving Directors should not be prevented from
forming part of an independent majority. The
Board considers that independence is not
compromised by the length of tenure and that it
has the appropriate balance of skills, experience,
ages and length of service.
Whilst the Directors are not appointed for
specific terms, as required by the Code, all the
Directors must submit themselves for re-election
by the shareholders annually and are not entitled
to compensation if they are not re-elected to
office.
Since all Directors are non-executive, the Fund is
not required to comply with the principles of the
Code in respect of executive Directors’
remuneration. Directors may seek independent
20
SVM UK EMERGING FUND plc
Annual Report & Accounts 2024
professional advice if necessary, at the expense
of the Fund.
The Directors conduct an annual self-
assessment of their collective and individual
performances on a range of issues to review the
effectiveness of the Board, the Committees and
individual Directors in order to ensure that they
are acting in the best interests of the Fund and
its shareholders. In addition, the performance of
the Chairman is evaluated by the other
Directors. Having reviewed these assessments,
it is the Board’s opinion that each Director’s
performance continues to be effective and to
demonstrate commitment to their role.
The table below sets out the number of Board
meetings, Audit Committee and, Management
and Nomination Committee meetings held
during the year and the meetings attended by
each Director.
The Manager maintains regular contact with the
Fund’s shareholders, particularly institutional
shareholders, and reports regularly to the Board
on shareholder relations. In addition, the Board
uses the Annual General Meeting as a forum for
shareholders to meet and discuss issues with
the Board and the Manager.
A management agreement between the Fund
and the Manager sets out the matters over
which the Manager has authority and the limits
over which Board approval must be sought. All
other matters, including corporate strategy,
investment policy, corporate governance
procedures, risk management and principal
operating issues such as hedging, gearing,
share issuance and buy-backs are reserved for
the approval of the Board. Details of the limits
set on the key areas are set out in the Financial
Instruments disclosures in note 10 to the
financial statements.
The Fund usually exercises its voting powers at
general meetings of investee companies. It does
not operate a fixed policy when voting but treats
each case on merit. The Manager has adopted the
statement of principles set out by the Institutional
Shareholders’ Committee on the Responsibilities
of Institutional Shareholders and Agents.
The Board recognises that corporate, social,
environmental and ethical responsibility enables
good sustainable business growth and can have
positive implications for shareholder value. The
Board believes that encouraging companies to
recognise these responsibilities is best achieved
with dialogue and actively aiming to encourage
best practice. The Board notes that the Manager
has complied with the UK 2020 Stewardship
Code and is a signatory to the Code. The code
can be found on the Manager’s website
www.river.global
Each Director has a statutory duty to avoid a
situation where they (and connected persons)
have, or could have, a direct or indirect interest
which conflicts, or may conflict, with the interests
of the Fund. The Board has in place procedures
for identifying and dealing with conflicts or
potential conflicts. No actual or potential conflicts
were identified during the year.
Amendment of the Fund’s Articles of
Association requires a special resolution to be
passed by shareholders.
S
VM UK EMERGING FUND plc 21
Annual Report & Accounts 2024
The Board has adopted a formal schedule of
matters specifically reserved to itself for
decision and, in relation to certain matters, two
committees (the Audit Committee, and the
Management and Nomination Committee) have
been established. Each of the committees
comprises all of the Directors. The Board
considers that it is appropriate for all Directors
to be members of these committees, given the
size and composition of the Board.
Both committees are chaired by the Senior
Independent Director. The terms of reference of
both committees are available for inspection on
request from the Manager. Further information
on the role of the Audit Committee is set out in
the Audit Committee Report.
Management and Nomination committee
The Management and Nomination Committee,
which comprises all of the independent
Directors and for which a quorum is any two of
the independent Directors, meets at least once
a year. Its remit includes such matters as
reviewing all contracts for services delivered to
the Fund, reviewing and recommending new
appointments to the Board and fixing the
remuneration of the Directors. In considering
appointments to the Board, the Management
and Nomination Committee takes into account
the ongoing requirements of the Fund and the
need to have a balance of skills, experience,
diversity (including gender), and independence
and knowledge of the Fund and, where
appropriate, actively searches for candidates.
Given the small constitution of the Board, it is
committed to appointing individuals of a high
calibre based on merit, with due regard to the
benefits of diversity on the Board.
Disclosure of information to the Auditor
As required by section 418 of the Companies
Act 2006 each Director of the Fund confirms
that:
• so far as he is aware, there is no audit
information needed by the Fund’s Auditor in
connection with preparing their report of
which the Auditor is unaware; and
• he has taken all the steps that he ought to
have taken to make himself aware of any such
audit information and to establish that the
Auditor is aware of that information.
Auditor
Johnston Carmichael LLP has expressed its
willingness to continue in office as the Fund’s
Auditor and a resolution proposing their re-
appointment and authorising the Directors to
determine their remuneration for the ensuing
year will be proposed at the forthcoming Annual
General Meeting.
Internal control and financial reporting
The Board is responsible for establishing and
maintaining the Fund’s system of internal
control and reviewing its effectiveness. The
Code states that the review should cover all
material controls, including financial, operational
and compliance controls. The Board, in
conjunction with the Manager, has established a
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I G
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J H
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Committees
22
SVM UK EMERGING FUND plc
Annual Report & Accounts 2024
process for identifying, evaluating and managing
the significant risks faced by the Fund. This
process is subject to regular review by the Board
and accords with the Financial Reporting Council
guidance. The process has been in place for the
year under review and up to the date of these
financial statements. Internal control systems
are designed to meet the particular needs of the
Fund and the risks to which it is exposed and, by
their nature, can provide reasonable but not
absolute assurance against material
misstatement or loss.
The principal elements of the Fund’s system of
internal controls and the process applied by the
Board in reviewing its effectiveness are:
• Clearly documented contractual arrangements
with service providers.
• Annual review by the Board of the internal
control reports of service providers.
• Consideration by the Board of the latest
Review of Internal Controls documentation.
• Quarterly Board meetings to review
performance, investment policy, strategy and
shareholder relations.
• Regular updating by the Manager on key risks
and control developments.
The Board meets every quarter to review the
overall business of the Fund and to consider the
matters specifically reserved for it to decide
upon. At these meetings, the Directors review
investment performance of the Fund compared
to its comparator and in relation to comparable
investment trusts. The Directors also review its
activities over the preceding quarter to ensure
it adheres to its investment policy or, if it is
considered appropriate, to authorise any change
to that policy. The Board is satisfied that it is
supplied in a timely manner with information to
enable it to discharge its duties.
The Board has engaged external firms to
undertake the investment management,
administration, secretarial and custodial activities
of the Fund. There are clearly documented
contractual arrangements between the Fund and
these organisations which define the areas
where the Board has delegated authority to
them.
The Board receives reports on at least an annual
basis detailing the internal control objectives and
procedures adopted by each organisation. The
Board’s review of these reports allows it to
assess the effectiveness of the internal systems
of financial control which affect the Fund.
Greenhouse Gas Emissions
As the Board has engaged external firms to
undertake the investment management,
secretarial, accounting and custody activities of
the Fund, the Fund has no greenhouse gas
emissions to report from its operations, nor
does it have responsibility for any other
emissions producing sources under the
Companies Act 2006 (Strategic Report and
Directors’ Reports) Regulations 2013.
Directors’ Indemnity
The Company’s Articles of Association provide,
subject to the provisions of applicable UK
legislation, an indemnity for Directors in respect
of costs incurred in the defence of any
proceedings brought against them by third
parties arising out of their positions as Directors,
in which they are acquitted or judgement is
given in their favour.
Compliance statement
Except as noted above, the Fund has complied
with the applicable provisions of the Code and
the AIC Code during the year and up to the date
of the approval of the financial statements.
By Order of the Board,
River Global Investors LLP
30 July 2024
S
VM UK EMERGING FUND plc 23
Annual Report & Accounts 2024
The Board has prepared this report in
accordance with the requirements of the
Companies Act 2006. It comprises the
Directors’ Remuneration Policy Report and the
Annual Report on Directors’ Remuneration.
The Directors’ Remuneration Policy Report will
be put to shareholders at the forthcoming
Annual General Meeting and, if passed, will
apply until it is next put to shareholders for
approval, which must be at intervals of not less
than three years. The Annual Report on
Directors’ Remuneration will be put to
shareholders at the forthcoming Annual
General Meeting and annually thereafter.
The law requires the Auditor to audit certain
aspects of the disclosures provided. Where
disclosures have been audited, they are
indicated as such. The Auditor’s opinion is
included in their report on the page entitled
‘Independent auditor’s report’.
DIRECTORS’ REMUNERATION POLICY
REPORT
Directors’ remuneration - Statement by the
Chairman
The Board’s policy is that the remuneration of
non-executive Directors should reflect the
experience of the Board as a whole, be fair and
comparable to that of other investment trusts
that are similar in size, have a similar capital
structure, and have similar investment
objectives. In addition, a number of other
factors are considered, including the time
commitment required, the level of skills and
experience required and any specific
responsibilities of Directors. There were no
changes to the policy during the year and it is
the intention that this policy will continue for
the three year period ending at the Annual
General Meeting in 2024.
The fees for the non-executive Directors are
determined within the limits set out in the
Fund’s Articles of Association. The current limit
is £75,000 in aggregate per annum and
shareholder approval in a general meeting
would be required to change this limit. Non-
executive Directors are not eligible for
bonuses, pension benefits, share options, long-
term incentive schemes, compensation for
loss of office or other benefits.
Directors’ appointment and tenure
One of the Directors was originally appointed
at the Fund’s inception in 2000 and the other
two were appointed during 2019-20. All
Directors have a letter of appointment. These
letters are kept and are available for inspection
at the Fund’s registered office. The terms of
their appointment provide that a Director shall
retire and be subject to re-election at the first
Annual General Meeting following their
appointment. Directors are thereafter obliged
to retire by rotation, and, if they wish, to offer
themselves for re-election, at least every three
years thereafter. There is a three month notice
period and the Fund reserves the right to make
a payment in lieu of notice on early termination
of appointment. None of the Directors has a
service contract with the Fund.
The Board’s policy of tenure is to review
actively whether Directors with service of nine
years or more should be re-nominated, whilst
ensuring that the process of refreshing the
Board does not compromise a balance of
experience, age, length of service and skills.
The Management and Nomination Committee
recommends to the Board candidates for
nomination as Directors. The Committee seeks
candidates with the aim of ensuring that the
Board comprises a broad spread of experience
and knowledge and, where appropriate, actively
searches for candidates. New appointments
will receive induction training and spend time
with representatives of the Manager. The
Fund’s policy is to encourage Directors to keep
up to date with industry developments relevant
to the Fund.
Directors’
Remuneration
Report
24
SVM UK EMERGING FUND plc
Annual Report & Accounts 2024
ANNUAL REPORT ON DIRECTORS’
REMUNERATION
Remuneration committee
The Fund has three non-executive Directors as
detailed on the ‘Board of Directors’ page, all of
whom are independent. The Management and
Nomination Committee, comprising of all the
Directors, fulfils the function of a
Remuneration Committee in addition to its
nominations functions. The agreements for
the provision of investment management and
secretarial services were transferred from
SVM Asset Management Ltd to River Global
Investors LLP with effect from 1 December
2023. There were no changes to the terms of
the agreement. The Board has appointed River
Global Investors LLP as Company Secretary to
provide information when the Management
and Nomination Committee consider the level
of Directors’ fees. The Directors are
independent of River Global Investors LLP and
River Global Investors LLP receives no
additional fees for the provision of this
information. The Management and Nomination
Committee carries out a review of the level of
Directors’ fees on an annual basis. In addition,
River Global Investors LLP provides
investment management, administration and
secretarial services to the Fund. The Manager
elected to waive the investment management
fees with effect from 1 September 2023 until
further notice.
Relative Importance of Spend on Directors’
Remuneration
The table below shows the actual expenditure
during the year in relation to Directors’
remuneration, operating expenses and
shareholder distributions. Non-executive
Directors are not eligible for bonuses, pension
benefits, share options, long-term incentive
schemes, compensation for loss of office or
other benefits. The revised fees are currently
at the original levels set at the inception of the
Fund, being £10,000 for the Chairman and
£7,500 for each of the non-executive directors
per annum.
2024 2023 Change
£ £%
Directors’ total
remuneration 25,000 25,000 –
Operating
Expenses 118,000 118,000 –
Dividends paid
to shareholders Nil Nil –
Directors’ Shareholdings (audited)
The Directors who held office during the year
and their beneficial interests in the ordinary
shares of the Fund were:
31 March 31 March
2024 2023
Number of Number of
shares held shares held
P F Dicks* 307,500 307,500
I Gray 15,000 15,000
J Harris – –
*Holding was previously disclosed in error as 297,000.
There have been no changes in the Directors’
interests between 31 March 2024 and 30 June
2024. The Board has not adopted a policy
whereby Directors are required to own shares
in the Fund.
Annual Percentage Change in Directors’
Remuneration
The table below sets out the annual percentage
change in Directors’ fees for the past four years.
Fees Fees Fees Fees
2024 2023 2022 2021
% % % %
P F Dicks – – – –
I Gray – – – –
J Harris – – – –
S
VM UK EMERGING FUND plc 25
Annual Report & Accounts 2024
Directors' emoluments for the year
(audited)
The Directors who served in the year received
the following emoluments in the form of fixed
fees. The year on year increase for each
Director from 2021 to 2023 has been nil
percent pa. There is no variable element to
Directors’ emoluments.
Fees Fees
2024 2023
£ £
P F Dicks 10,000 10,000
I Gray 7,500 7,500
J Harris 7,500 7,500
Total 25,000 25,000
Fund performance
The graph below compares the share price total
return (assuming all dividends are reinvested)
to Ordinary Shareholders for the last 10 years
(to 31 March 2024) to the total shareholder
return on a notional investment made up of
shares of the same kinds and number as those
by reference to which the IA UK All Companies
Sector Average is calculated. The comparator
has been chosen as it represents the Fund’s
comparator.
Future Policy Table
Based on the current level of fees, Directors’
remuneration for the forthcoming financial year
will be as follows:
Fees Fees
2025 2024
£ £
P F Dicks 10,000 10,000
I Gray 7,500 7,500
J Harris 7,500 7,500
Total 25,000 25,000
The Fund has not received any views from its
Shareholders in respect of the level of
Directors’ remuneration.
Voting at Annual General Meeting
At the Fund’s last Annual General Meeting,
held on 9 September 2023, shareholders
approved the Directors’ Remuneration Report
in respect of the year ended 31 March 2023.
100% of votes were in favour of the resolution
and 0% were against.
Ordinary resolutions for the approval of this
report and the Directors’ Remuneration Policy
Report will be put to the members at the
forthcoming Annual General Meeting.
By Order of the Board,
River Global Investors LLP
Company Secretary
30 July 2024
2
6
SVM UK EMERGING FUND plc
Annual Report & Accounts 2024
Composition and Role
The Audit Committee, which comprises all of
the independent Directors, meets at least
twice a year. All Directors have the requisite
financial experience to sit on this committee.
Terms of reference set out the role of the Audit
Committee. Its role is to review the Fund’s
financial position, internal controls, scope and
results of the external audit, its cost
effectiveness and the independence and
objectivity of the auditor. The auditor is invited
to attend such meetings and report on the
results of the audit.
The Audit Committee must also satisfy itself
that the Annual Report and Financial
Statements are fair, balanced and
understandable.
The Audit Committee considers annually the
need for an internal audit function. It believes
such a function is unnecessary as the Fund has
no employees and subcontracts its business to
third parties, the principal one of which is the
Manager.
External Audit
The Audit Committee met on two occasions
during the year. In the course of its duties, the
committee had direct access to the external
auditor and senior members of the Manager’s
team. During the year its Chairman met with
the external auditor outside of the committee
meetings. Amongst other things, the Audit
Committee considered and reviewed the
following matters and reported thereon to the
Board:
• annual results announcements, and annual
and half-yearly reports and financial
statements;
• accounting policies of the Fund;
• principal risks faced by the Fund and the
effectiveness of the Fund’s internal control
environment;
• internal controls operated by the Manager;
• effectiveness of the audit process and
related non-audit services and the
independence and objectivity of Johnston
Carmichael, their appointment, remuneration
and terms of engagement;
• policy on the engagement of Johnston
Carmichael to supply non-audit services; and
• implications of proposed new accounting
standards and regulatory changes.
As part of its review of the scope and results
of the audit, the Audit Committee considered
Johnston Carmichael’s plan for the audit of the
financial statements for the year ended
31 March 2024. At the conclusion of the audit
Johnston Carmichael did not highlight any
issues to the Audit Committee which would
cause it to qualify its audit report nor did it
highlight any fundamental internal control
weaknesses. Johnston Carmichael issued an
unqualified audit report.
In evaluating the effectiveness of the external
audit process, the Audit Committee has taken
into consideration the standing, skills and
experience of Johnston Carmichael and the
audit team. Working closely with the Manager
the Audit Committee considered and evaluated
Johnston Carmichael’s planning, scope and
execution of the audit.
Significant Issues considered by the Audit
Committee
In relation to the 2024 Annual Report and
Financial Statements, the Audit Committee
considered a number of issues in relation to
the financial statements. The key risk areas
identified and how these were addressed were
as follows:
• The accuracy of the valuation of the
investment portfolio.
Listed investments are valued using stock
exchange prices provided by a third party
pricing vendor. CFDs are valued with
Audit
Committee
Report
S
VM UK EMERGING FUND plc 27
Annual Report & Accounts 2024
reference to the investment’s underlying bid
prices using stock exchange prices provided
by a third party pricing vendor. Unlisted
investments are valued at fair value based
on the latest information available and
recommendations from the Fair Value
Pricing Committee of the Manager. The
Board reviews portfolio valuations and also
relies on controls operated by the Manager
in respect of pricing.
• Misappropriation of the Company’s
investments or other assets.
The Audit Committee reviews reports from
service providers on key controls over the
assets of the Fund, including the
reconciliation of the Fund’s records with
those of the custodian of the Fund’s assets.
• Revenue Recognition
The Board reviews revenue forecasts and
receives explanations from the Manager
regarding movements from previous
forecasts. Judgement is also required in
determining whether special dividends are
treated as income or capital in the Income
Statement.
• Other Matters
The Audit Committee considered the impact
of the war in Ukraine, increasing interest
rates and the cost of living pressures for the
UK consumer on the Company, including the
valuation of the investment portfolio and the
revenues of the Company.
Auditor Appointment and Tenure
The auditor appointment was last put out to
tender in 2020 and Johnston Carmichael was
appointed as auditor commencing with the
audit in respect of the year to 31 March 2020.
Richard Sutherland is an Audit Partner at
Johnston Carmichael and this is his third year
as Senior Statutory Auditor to the company.
Based on its review of the effectiveness of
Johnston Carmichael, the Audit Committee
has recommended the continuing
appointment of Johnston Carmichael to the
Board. Johnston Carmichael’s performance
will continue to be reviewed annually taking
into account all relevant guidance and best
practice.
Non-Audit Services
The auditor did not provide any non-audit
services to the Fund for 2024 (2023: nil). The
Audit Committee has concluded that the
auditor is objective and independent. The Audit
Committee will continue to monitor on an
annual basis the level of non-audit work carried
out by the auditor.
Ian Gray
30 July 2024
2
8
S
VM UK EMERGING FUND plc
Annual Report & Accounts 2024
The Directors are responsible for preparing the
Annual Report, the Directors’ Remuneration
Report and the Financial Statements in
accordance with applicable law and regulations.
Company law requires the Directors to prepare
financial statements for each financial year.
Under that law, the Directors prepared the
financial statements in accordance with United
Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting
Standards and applicable law). Under company
law, the Directors must not approve the
financial statements unless they are satisfied
that they give a true and fair view of the state
of affairs of the Fund and of its gain or loss for
that period. In preparing these financial
statements, the Directors are required to:
• select suitable accounting policies and then
apply them consistently;
• make judgements and accounting
estimates that are reasonable and prudent;
• state whether applicable UK Accounting
Standards have been followed, subject to
any material departures disclosed and
explained in the financial statements; and
• prepare the financial statements on the
going concern basis, unless it is
inappropriate to presume the Fund will
continue in business.
The Directors are responsible for keeping
adequate accounting records that are sufficient
to show and explain the Fund’s transactions
and disclose with reasonable accuracy at any
time the financial position of the Fund and
enable them to ensure that the financial
statements comply with the Companies Act
2006. They are also responsible for
safeguarding the assets of the Fund and hence
for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
The Directors have delegated responsibility to
the Manager for the maintenance and integrity
of the Fund’s corporate and financial
information included on the Manager’s
website. The work carried out by the Auditor
does not involve consideration of these
matters and, accordingly, the Auditor accepts
no responsibility for any changes that may have
occurred to the financial statements since they
were initially presented on the website.
Legislation in the UK governing the preparation
and dissemination of financial statements may
differ from legislation in other jurisdictions.
The Directors consider that the Annual Report
and Financial Statements, taken as a whole,
are fair, balanced and understandable and
provide the information necessary for
shareholders to assess the Fund’s
performance, business model and strategy.
The Directors each confirm to the best of their
knowledge that:
•the financial statements, prepared in
accordance with the applicable accounting
standards, give a true and fair view of the
assets, liabilities, financial position and gain
or loss of the Fund and;
• the Strategic Report includes a fair review
of the development and performance of the
business and the position of the Fund
together with a description of the principal
risks and uncertainties that it faces.
By Order of the Board
Peter Dicks
Chairman
30 July 2024
Statement of Directors’
Responsibilities in
Respect of the Financial
Statements
S
VM UK EMERGING FUND plc 29
Annual Report & Accounts 2024
Opinion
We have audited the financial statements of SVM UK Emerging Fund plc (“the Company”), for the
year ended 31 March 2024, which comprise the Income Statement, the Balance Sheet, the Statement
of Changes in Equity and the notes to the Financial Statements, including significant accounting
policies. The financial reporting framework that has been applied in their preparation is applicable law
and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial
Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted
Accounting Practice).
In our opinion the financial statements:
• Give a true and fair view of the state of the Company’s affairs as at 31 March 2024 and of its profit
for the year then ended;
• Have been properly prepared in accordance with United Kingdom Generally Accepted Accounting
Practice; and
• Have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and
applicable law. Our responsibilities under those standards are further described in the Auditor
responsibilities for the audit of the financial statements section of our report.
We are independent of the Company in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the FRC’s Ethical Standard, as applied to listed
public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these
requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Our approach to the audit
We planned our audit by first obtaining an understanding of the Company and its environment, including
its key activities delegated by the Board to relevant approved third-party service providers and the
controls over provision of those services.
We conducted our audit using information maintained and provided by State Street Global Services (the
“Administrator”), State Street Bank & Trust Company (the “Custodian”) and River Global Investors LLP
(the “Company Secretary” and “Investment Manager”) to whom the Company has delegated the
provision of services.
We tailored the scope of our audit to reflect our risk assessment, taking into account such factors as
the types of investments within the Company, the involvement of the Administrator, the accounting
processes and controls, and the industry in which the Company operates.
The scope of our audit was influenced by our application of materiality. We set certain quantitative
thresholds for materiality. These together with qualitative considerations, helped us to determine the
scope of our audit and the nature, timing and extent of our audit procedures on the individual financial
statement line items and disclosures and in the evaluation of the effect of misstatements, both
individually and in aggregate on the financial statements as a whole.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial statements of the current period and include the most significant assessed
risks of material misstatement (whether or not due to fraud) that we identified. These matters included
those which had the greatest effect on: the overall audit strategy; the allocation of resources in the
audit; and directing the efforts of the engagement team. These matters were addressed in the context
of our audit of the financial statements as a whole, and in forming our opinion thereon, we do not provide
a separate opinion on these matters.
We summarise below the key audit matters in arriving at our audit opinion above, together with how
our audit addressed these matters and the results of our audit work in relation to these matters.
Independent
Auditor’s Report
to the members of SVM UK Emerging Fund plc
3
0
S
VM UK EMERGING FUND plc
Annual Report & Accounts 2024
Key Audit Matter
Valuation of investments
(as described on pages 27 and 28 in the
Audit Committee Report and as per the
accounting policy on page 40 and Note 6).
The valuation of the level 1, listed
investments at 31 March 2024 was
£5.44m (2023: £4.86m), and the net value
of the level 2 Contracts for Difference
(“CFDs”) was £0.04m (2023: -£0.49m).
As this is the largest component of the
Company’s Balance Sheet and a key driver
of the Company’s net assets and total
return, this has been designated as a key
audit matter, being one of the most
significant assessed risks of material
misstatement due to fraud or error.
There is a further risk that the investments
held at fair value may not be actively
traded and the quoted prices may not be
reflective of their fair value.
How our audit addressed the key audit matter and
our conclusions
• We obtained and assessed controls reports provided
by the Administrator and the Custodian to evaluate
the design of the process and implementation of key
controls.
• We compared market prices applied to all listed
investments held at 31 March 2024 to an
independent third-party source and recalculated the
investment valuations.
• We compared the market prices applied to all CFD’s
held at 31 March 2024 to an independent third-party
source and recalculated the investment valuations.
• We obtained average trading volumes from an
independent third-party source for all listed
investments held at year end as evidence of the
existence of active markets and noted no significant
illiquid holdings.
• From our completion of these procedures, we
identified no material misstatements in relation to
the valuation of the investments.
Revenue recognition, including
allocation of special dividends as
revenue or capital returns
(as described on page 28 in the Audit
Committee Report and as per the
accounting policy on page 39 and Note 1.
Investment income recognised in the
year was £140k (2023: £104k) consisting
primarily of dividend income from listed
investments and CFDs.
Revenue-based performance metrics are
often one of the key performance
indicators for stakeholders. The
investment income received by the
Company during the year directly impacts
these metrics and the minimum dividend
required to be paid by the Company.
There is a risk that revenue is
incomplete, did not occur or is inaccurate
through failure to recognise income
entitlements or failure to appropriately
account for their treatment. It has
therefore been designated as a key audit
matter being one of the most significant
assessed risks of material misstatement
due to fraud or error.
Additionally, there is a further risk of
incorrect allocation of special dividends
as revenue or capital returns as
judgement is required in determining
their allocation within the Income
Statement.
• We obtained and assessed controls reports provided
by the Administrator to evaluate the design of the
process and implementation of key controls.
• We confirmed that income was recognised and
disclosed in accordance with the AIC SORP by
assessing the accounting policies.
• We recalculated 100% of dividends due to the
Company, from both equity and CFD holdings, based
on investment holdings throughout the year and
announcements made by investee companies.
• We agreed a sample of dividends received to bank
statements.
• We assessed the completeness of the special
dividend population with reference to third party
market data and assessed management’s judgement
for allocating special dividend as revenue or capital
returns with reference to the underlying commercial
circumstances of the dividend payments.
• From our completion of these procedures, we
identified no material misstatements in relation to
revenue recognition, including allocation of special
dividends as revenue or capital returns.
S
VM UK EMERGING FUND plc 31
Annual Report & Accounts 2024
Specifically, given the importance of the distinction between revenue and capital
for the Company, we also applied a separate testing threshold for the revenue
column of the Income Statement, set at the higher of 5% of the net return before
taxation and our Audit Committee Reporting Threshold.
We have also set a separate specific materiality in respect of related party
transactions and Directors’ remuneration.
We used our judgement in setting these thresholds and considered our experience
and industry benchmarks for specific materiality.
Audit Committee Reporting Threshold – we agreed with the Audit Committee that
we would report to them all differences in excess of 5% of overall materiality in
addition to other identified misstatements that warranted reporting on qualitative
grounds, in our view. For example, an immaterial misstatement as a result of fraud.
During the course of the audit, we reassessed initial materiality and found no reason to alter the basis
of calculation used at year-end.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern
basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the
Directors’ assessment of the Company’s ability to continue to adopt the going concern basis of
accounting included:
• Evaluating management’s method of assessing going concern, including consideration of the 2025
continuation vote and market conditions and uncertainties;
• Assessing and challenging the forecast cashflows and associated sensitivity modelling used by the
Directors in support of their going concern assessment;
• Obtaining and recalculating management’s assessment of the Company’s ongoing maintenance of
investment trust status;
• Evaluating management’s assessment of the business continuity plans of the Company’s main
service providers; and
• Assessing the adequacy of the Company’s going concern disclosures included in the Annual Report.
Based on the work we have performed, we have not identified any material uncertainties relating to
events or conditions that, individually or collectively, may cast significant doubt on the Company’s ability
to continue as a going concern for a period of at least twelve months from when the financial
statements are authorised for issue.
Our application of materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it
probable that the economic decisions of a reasonably knowledgeable person would be changed or
influenced. We use materiality in determining the nature and extent of our work and in evaluating the
results of that work.
Materiality for the Financial Statements as a Whole – we have set materiality as
1% of net assets as we believe that net assets is the primary performance measure
used by investors and is the key driver of shareholder value. It is also the standard
i
ndustry benchmark for materiality for investment trusts and we determined the
measurement percentage to be commensurate with the risk and complexity of the
audit and the Company’s listed status.
Performance Materiality – performance materiality represents amounts set by the
auditor at less than materiality for the financial statements as a whole, to reduce to
an appropriately low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds materiality for the financial statements as a
whole.
In setting this we consider the Company’s overall control environment and any
experience of the audit that indicates a lower risk of material misstatements. Based
on our judgement of these factors, we have set performance materiality at 75% of
our overall financial statement materiality.
Specific Materiality – recognising that there are transactions and balances of a
lesser amount which could influence the understanding of users of the financial
statements we calculate a lower level of materiality for testing such areas.
£58,000
(2023: £56,000)
£43,000
(2023: £42,000)
£2,900
(2023: £2,800)
£2,900
(2023: £2,800)
3
2 SVM UK EMERGING FUND plc
Annual Report & Accounts 2024
In relation to the Company’s reporting on how it has applied the UK Corporate Governance Code, we
have nothing material to add or draw attention to in relation to the Directors’ statement in the financial
statements about whether the Directors considered it appropriate to adopt the going concern basis of
accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described
in the relevant sections of this report.
Other information
The other information comprises the information included in the Annual Report other than the financial
statements and our auditor’s report thereon. The Directors are responsible for the other information
contained within the Annual Report. Our opinion on the financial statements does not cover the other
information and, except to the extent otherwise explicitly stated in our report, we do not express any
form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our knowledge obtained in the
course of the audit, or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether this gives
rise to a material misstatement in the financial statements themselves. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we are required
to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, the part of the Directors’ Remuneration Report to be audited has been properly prepared
in accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
• The information given in the Strategic Report and the Directors’ Report for the financial year for
which the financial statements are prepared is consistent with the financial statements; and
• The Strategic Report and the Directors’ Report have been prepared in accordance with applicable
legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Company and its environment obtained in the
course of the audit, we have not identified material misstatements in the Strategic Report or the
Directors’ Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act
2006 requires us to report to you if, in our opinion:
• Adequate accounting records have not been kept by the Company, or returns adequate for our audit
have not been received from branches not visited by us; or
• The financial statements and the part of the Directors’ Remuneration Report to be audited are not
in agreement with the accounting records and returns; or
• Certain disclosures of Directors’ remuneration specified by law are not made; or
• We have not received all the information and explanations we require for our audit; or
• A corporate governance statement has not been prepared by the Company.
Corporate governance statement
We have reviewed the Directors’ Statement in relation to going concern, longer-term viability and that
part of the Corporate Governance Statement relating to the entity’s compliance with the provisions of
the UK Corporate Governance Code specified for our review by the Listing Rules.
Based on the work undertaken as part of our audit, we have concluded that each of the following
elements of the Corporate Governance Statement is materially consistent with the financial statements
or our knowledge obtained during the audit:
• The Directors’ statement with regards to the appropriateness of adopting the going concern basis
of accounting and any material uncertainties identified set out on page 20;
• The Directors’ explanation as to its assessment of the Company’s prospects, the period this
assessment covers and why the period is appropriate set out on page 14;
• The Directors’ statement on fair, balanced and understandable set out on page 29;
S
VM UK EMERGING FUND plc 33
Annual Report & Accounts 2024
• The Directors’ statement on whether it has a reasonable expectation that the Company will be able
to continue in operation and meets its liabilities set out on page 14;
• The Board’s confirmation that it has carried out a robust assessment of the emerging and principal
risks set out on page 12;
• The section of the annual report that describes the review of the effectiveness of risk management
and internal control systems set out on pages 22 and 23; and
• The section describing the work of the Audit Committee set out on pages 27 and 28.
Responsibilities of Directors
As explained more fully in the Directors’ responsibilities statement set out on page 29, the Directors
are responsible for the preparation of the financial statements and for being satisfied that they give a
true and fair view, and for such internal control as the Directors determine is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, the Directors are responsible for assessing the Company’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the Directors either intend to liquidate the Company or
to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee
that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when
it exists. Misstatements can arise from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the economic decisions of users taken
on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditor’s report.
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.
We assessed whether the engagement team collectively had the appropriate competence and
capabilities to identify or recognise non-compliance with laws and regulations by considering their
experience, past performance and support available.
All engagement team members were briefed on relevant identified laws and regulations and potential
fraud risks at the planning stage of the audit. Engagement team members were reminded to remain
alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
We obtained an understanding of the legal and regulatory frameworks that are applicable to the
Company and the sector in which it operates, focusing on those provisions that had a direct effect on
the determination of material amounts and disclosures in the financial statements. The most relevant
frameworks we identified include:
• Companies Act 2006;
• FCA listing and DTR rules;
• The principles of the UK Corporate Governance Code applied by the AIC Code of Corporate
Governance (the “AIC Code”);
• Industry practice represented by the Statement of Recommended Practice: Financial Statements
of Investment Trust Companies and Venture Capital Trusts (“the SORP”) issued in July 2022;
• Financial Reporting Standard 102; and
• The Company’s qualification as an investment trust under section 1158 of the Corporation Tax Act
2010.
We gained an understanding of how the Company is complying with these laws and regulations by
making enquiries of management and those charged with governance. We corroborated these
enquiries through our review of relevant correspondence with regulatory bodies and board meeting
minutes.
3
4 SVM UK EMERGING FUND plc
Annual Report & Accounts 2024
We assessed the susceptibility of the Company’s financial statements to material misstatement,
including how fraud might occur, by meeting with management and those charged with governance
to understand where it was considered there was susceptibility to fraud. This evaluation also
considered how management and those charged with governance were remunerated and whether
this provided an incentive for fraudulent activity. We considered the overall control environment and
how management and those charged with governance oversee the implementation and operation of
controls. We identified a heightened fraud risk in relation to the completeness and allocation of special
dividends (audit procedures performed in response to these risks are set out in the section on key
audit matters above) and management override (procedures in response to this risk are included below).
In addition to the above, the following procedures were performed to provide reasonable assurance
that the financial statements were free of material fraud or error:
• Reviewing minutes of meetings of those charged with governance for reference to: breaches of
laws and regulation or for any indication of any potential litigation and claims; and events or
conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to
commit fraud;
• Performing audit work procedures over the risk of management override of controls, including
testing of journal entries and other adjustments for appropriateness, recalculating the investment
management fee, evaluating the business rationale of significant transactions outside the normal
course of business and reviewing judgements made by management in their calculation of
accounting estimates for potential management bias;
• Completion of appropriate checklists and use of our experience to assess the Company’s
compliance with the Companies Act 2006 and the Listing Rules; and
• Agreement of the financial statement disclosures to supporting documentation.
Our audit procedures were designed to respond to the risk of material misstatements in the financial
statements, recognising that 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 intentional concealment,
forgery, collusion, omission or misrepresentation. There are inherent limitations in the audit procedures
described above and the further removed non-compliance with laws and regulations is from the events
and transactions reflected in the financial statements, the less likely we would become aware of it.
Other matters which we are required to address
Following the recommendation of the Audit Committee, we were appointed by the Board on 22
January 2020 to audit the financial statements for the year ended 31 March 2020 and subsequent
financial periods. The period of our total uninterrupted engagement is five years, covering the years
ended 31 March 2020 to 31 March 2024
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Company
and we remain independent of the Company in conducting our audit.
Our audit opinion is consistent with the additional report to the Audit Committee.
Use of our report
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part
16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the
Company’s members those matters we are required to state to them in an auditor’s report and for no
other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to
anyone other than the Company and the Company’s members as a body, for our audit work, for this
report, or for the opinions we have formed.
Richard Sutherland
(Senior Statutory Auditor)
For and on behalf of Johnston Carmichael LLP
Statutory Auditor
Edinburgh
30 July 2024
S
VM UK EMERGING FUND plc 35
Annual Report & Accounts 2024
Revenue Capital Total
Notes £000 £000 £000
Net gain on investments at fair value 6 – 272 272
Income 1 140 – 140
Investment management fees 2 – (17) (17 )
Other expenses 3 (143) – (143 )
(Loss)/Gain before finance costs
and taxation (3) 255 252
Finance costs (30) – (30 )
(Loss)/Gain on ordinary activities
before taxation (33) 255 222
Taxation 4 –– –
(Loss)/Gain attributable to ordinary
shareholders (33) 255 222
(Loss)/Gain per Ordinary Share 5 (0.55)p 4.25p 3.70 p
The Total column of
this statement is the
profit and loss
account of the Fund.
All revenue and
capital items are
derived from
continuing operations.
No operations were
acquired or
discontinued in the
year. A Statement of
Comprehensive
Income is not
required as all gains
and losses of the
Fund have been
reflected in the above
statement.
The Accounting
Policies and the
Notes on pages 39 to
46 form part of these
Financial Statements.
Income Statement
for the year to 31 March 2024
Revenue Capital Total
Notes £000 £000 £000
Net loss on investments at fair value 6 – (1,065) (1,065 )
Income 1 104 – 104
Investment management fees 2 – (42) (42 )
Other expenses 3 (143) – (143 )
Loss before finance costs
and taxation (39) (1,107) (1,146 )
Finance costs (22) – (22 )
Loss on ordinary activities
before taxation (61) (1,107) (1,168 )
Taxation 4 –– –
Loss attributable to ordinary
shareholders (61) (1,107) (1,168 )
Loss per Ordinary Share 5 (1.02)p (18.46)p (19.48 )p
for the year to 31 March 2023
3
6 SVM UK EMERGING FUND plc
Annual Report & Accounts 2024
2
024 2023
Notes £000 £000
Fixed Assets
Investments at fair value through profit or loss 6 5,485 4,882
Current Assets
Debtors 7 174 897
Cash at bank and on deposit 348 375
Total current assets 522 1,272
Creditors: amounts falling due within one year 8 (208 ) (577 )
Net current assets 314 695
Total assets less current liabilities 5,799 5,577
Capital and Reserves
Share capital 9 300 300
Share premium 314 314
Special reserve 5,136 5,136
Capital redemption reserve 27 27
Capital reserve 649 394
Revenue reserve (627 ) (594 )
Equity shareholders’ funds 5,799 5,577
Net asset value per Ordinary Share 5 96.73 p 93.03 p
Approved and authorised for issue by the Board of Directors on 30 July 2024 and signed on its behalf
by Peter Dicks, Chairman.
Company registered number: SC211841
Balance Sheet
as at 31 March 2024
For a definition of terms see Glossary of Terms and Alternative Performance Measures on page 47.
The Accounting Policies
and the Notes on
pages 39 to 46 form
part of these Financial
Statements.
S
VM UK EMERGING FUND plc 37
Annual Report & Accounts 2024
Capital
Share Share Special redemption Capital Revenue
c
apital premium reserve* reserve** reserve** reserve* Total
£000 £000 £000 £000 £000 £000 £000
As at 1 April 2023 300 314 5,136 27 394 (594 ) 5,577
Gain/(loss) attributable
to shareholders – – – – 255 (33 ) 222
As at 31 March 2024 300 314 5,136 27 649 (627 ) 5,799
Capital
Share Share Special redemption Capital Revenue
capital premium reserve* reserve** reserve** reserve* Total
£000 £000 £000 £000 £000 £000 £000
As at 1 April 2022 300 314 5,136 27 1,501 (533 ) 6,745
Loss attributable
to shareholders – – – – (1,107 ) (61 ) (1,168 )
As at 31 March 2023 300 314 5,136 27 394 (594 ) 5,577
The Accounting Policies
and the Notes on
pages 39 to 46 form
part of these Financial
Statements.
Statement of
Changes in Equity
f
or the year to 31 March 2024
for the year to 31 March 2023
*Distributable reserves comprise of the Special Reserve and the Revenue Reserve and were £4,509,000 at
31 March 2024 (31 March 2023: £4,542,000).
**Non-distributable reserves comprise the Capital Redemption Reserve and Capital Reserve and were
£676,000 at 31 March 2024 (31 March 2023 : £421,000).
3
8 SVM UK EMERGING FUND plc
Annual Report & Accounts 2024
Basis of preparation
The Financial Statements are prepared under the historical cost convention, modified to include the
revaluation of fixed asset investments which are recorded at fair value, in accordance with FRS 102,
t
he “Financial Reporting Standard applicable in the UK and Republic of Ireland” and under the AIC’s
Statement of Recommended Practice “Financial Statements of Investment Trust Companies and
Venture Capital Trusts” (SORP) issued in July 2022. The Directors have also prepared the Financial
Statements on a going concern basis and have a reasonable expectation that the Company has
adequate resources to continue in operational existence for at least twelve months from the date of
approval of these Financial Statements. In making their assessment the Directors have reviewed
income and expenditure projections, reviewed the liquidity of the investment portfolio and considered
the Company's ability to meet liabilities as they fall due. This conclusion also takes in to account the
Directors' assessment of the continuing risks emerging from the conflict in Ukraine. A shareholder
vote on continuation of the Fund is due in September 2025. Shareholders amounting to c.30% have
already indicated that they are minded to vote in favour of continuing; additionally all previous votes
have been to continue with the Fund. The Board is confident that the next vote will also be in favour.
The Company is exempt from presenting a Cash Flow Statement as a Statement of Changes in
Equity is presented and substantially all of the Company’s investments are highly liquid and are carried
at market value.
Significant judgements and estimates
Preparation of financial statements can require management to make significant judgements and
estimates. There are no significant judgements or sources of estimation uncertainty the Board
considers need to be disclosed.
Income
Dividend income is included in the Income Statement on an ex-dividend basis and includes dividends
on both direct equity investments and synthetic equity holdings via Contracts for Differences. Special
dividends are recorded on an ex-dividend basis and allocated to revenue or capital in line with the
underlying commercial circumstances of the dividend payment. Interest receivable on bank balances
is included in the Income Statement on an accruals basis.
Expenses and interest
Expenses and interest payable are recognised on an accruals basis. All expenses other than
investment management fees are charged to revenue.
Investment management fees
Investment management fees are allocated 100 per cent to capital. The allocation is in line with the
Board’s expected long-term return from the investment portfolio. The terms of the investment
management agreement are detailed in the Report of the Directors.
Taxation
Current tax is provided at the amounts expected to be paid or received. Deferred taxation is
recognised in respect of all timing differences that have originated but not reversed at the balance
sheet date where transactions or events that result in an obligation to pay more or a right to pay less
tax in the future have occurred at the balance sheet date measured on an undiscounted basis and
based on enacted or substantively enacted tax rates. This is subject to deferred tax assets only being
recognised if it is considered probable that there will be suitable profits from which the future reversal
of the underlying timing differences can be deducted. Timing differences are differences arising
between the taxable profits and the results as stated in the financial statements which are capable
of reversal in one or more subsequent periods.
Accounting Policies
S
VM UK EMERGING FUND plc 39
Annual Report & Accounts 2024
I
nvestments
The investments have been categorised as ‘‘fair value through profit or loss’’. All investments
are held at fair value. For listed investments this is deemed to be at bid prices. A Contract for
Difference (CFD) is a synthetic equity comprising of a future contract to either purchase or sell
a specific asset at a specified future date for a specified price. The Company can hold long and
short positions in CFDs which are held at fair value, based on the bid prices of the underlying
securities in respect of long positions, and the offer prices of the underlying securities in respect
of short positions. Profits and losses on CFDs are recognised in the Income Statement as capital
gains or losses on investments at fair value. Dividends and interest on CFDs are included in
revenue income. The year end fair value of CFD positions which are assets is included in fixed
asset investments, whilst the year end fair value of CFD positions which are liabilities is included
within current liabilites in Note 8. Balances with brokers in respect of margin calls are included
within debtors in Note 7. Unlisted investments are valued at fair value based on the latest
available information and with reference to International Private Equity and Venture Capital
Valuation Guidelines.
All changes in fair value and transaction costs on the acquisition and disposal of portfolio
investments are included in the Income Statement as a capital item. Purchases and sales of
investments are accounted for on trade date.
Financial instruments
In addition to the investment transactions described above, basic financial instruments are
entered into that result in recognition of other financial assets and liabilities, such as investment
income due but not received, other debtors and other creditors.
These financial instruments are receivable and payable within one year and are stated at cost
less impairment.
Foreign currency translation
Transactions involving foreign currencies are converted at the rate ruling as at the date of the
transaction. Sterling is the functional currency of the Fund and all foreign currency monetary
assets and liabilities are retranslated into Sterling at the rate ruling on the financial reporting date.
Capital reserve
Gains and losses on realisations of fixed asset investments, and transactions costs, together
with appropriate exchange differences, are accounted for within this reserve. All investment
management fees, together with any tax relief, are also taken to this reserve. Increases and
decreases in the valuation of fixed asset investments are recognised in this reserve.
Special reserve
On 29 June 2001, the court approved the redesignation of the Share Premium Account, at that
date, as a fully distributable Special Reserve.
Capital redemption reserve
This reserve represents the nominal value of own shares bought back.
Revenue reserve
Retained revenue profits and losses, are accounted for in this fully distributable reserve.
Share Capital
This account represents, allotted, issued and fully paid up shares of 5p each.
Share Premium
This account represents the value received for issuing shares in excess of the nominal value of
5p per share.
4
0 SVM UK EMERGING FUND plc
Annual Report & Accounts 2024
| 2024 | 2023 | |
| £ | ||
| 000 | £000 | |
| 1. Income | ||
| Income from shares and securities | ||
| – dividends | 138 | 103 |
| – interest | 2 | 1 |
| 140 | 104 |
| 2. Investment management fees | ||
| Investment management fees | 17 | 42 |
| 3. Other expenses | ||
| Revenue | ||
| General expenses | 75 | 79 |
| Directors’ fees | 25 | 25 |
| Auditor’s remuneration | 43 | 39 |
| 143 | 143 |
| 4. Taxation | ||
| Current taxation | – | – |
| Deferred taxation | – | – |
| Total taxation charge for the year | – | – |
| The tax assessed for the year is different from the standard small company rate of corporation tax in | ||
| the UK. The differences are noted below: | ||
| Gain/(loss) on ordinary activities before taxation | 222 | (1,168) |
| Corporation tax (25%, 2023 – 19%) | 56 | (222) |
| Effects of: | ||
| Non taxable UK dividends | (25) | (15) |
| (Gains)/losses on CFD | (125) | 25 |
| Non taxable investment losses on CFD | 57 | 177 |
| Non taxable overseas dividends | (4) | (1) |
| Movement in deferred tax rate on excess management charges | – | (11) |
| Movement in unutilised management expenses and NTLR deficits | 41 | 47 |
| Total taxation charge for the year | – | – |
At 31 March 2024, the Fund had unutilised management expenses and non trade loan relationship (“NTLR”) deficits
of £1,988,000 (2023 – £1,824,000).
A deferred tax asset of £497,000 (2023 – £456,000) has not been recognised on the unutilised management
expenses as it is unlikely that there would be suitable taxable profits from which the future reversal of the deferred
tax asset could be deducted.
Notes to the Financial
Statements
S
VM UK EMERGING FUND plc 41
Annual Report & Accounts 2024
5. Returns per share
Returns per share are based on a weighted average of 5,995,000 (2023 - 5,995,000) ordinary shares in
issue during the year, not held in Treasury.
Total return per share is based on the total gain for the year of £222,000 (2023 - loss of £1,168,000).
Capital return per share is based on the net capital gain for the year of £255,000 (2023 - loss of
£
1,107,000).
Revenue return per share is based on the revenue loss after taxation for the year of £33,000 (2023 -
loss of £61,000).
The net asset value per share is based on the net assets of the Fund of £5,799,000 (2023 - £5,577,000)
divided by the number of shares in issue at the year end as shown in note 9.
| 2024 | 2023 | |||
| £000 | £000 | |||
| 6. Investments at fair value through profit or loss | ||||
| Listed investments and CFDs | 5,485 | 4,882 | ||
| Unlisted investments | – | – | ||
| Valuation as at end of year | 5,485 | 4,882 | ||
| Listed | Unlisted | Total | ||
| £000 | £000 | £000 | ||
| Opening book cost | 3,944 | 159 | 4,103 | 5,093 |
| Opening investment holding gains/(losses) | 938 | (159) | 779 | 1,315 |
| Opening fair value* | 4,882 | – | 4,882 | 6,408 |
| Analysis of transactions made during the year | ||||
| Purchases at cost | 1,994 | – | 1,994 | 513 |
| Sales proceeds received** | (1,147) | (18) | (1,165) | (1,106) |
| (Losses)/gains on investments*** | (244) | 18 | (226) | (933) |
| Closing fair value | 5,485 | – | 5,485 | 4,882 |
| Closing book cost | 4,005 | (141) | 4,146 | 4,103 |
| Closing investment holding gains/(losses) | 1,480 | (141) | 1,339 | 779 |
| Closing fair value**** | 5,485 | – | 5,485 | 4,882 |
| (Losses)/gains on investments | (244) | 18 | (226) | (933) |
| Movement in CFD current liability | 498 | – | 498 | (132) |
| Net gains/(losses) on investments at fair value | 254 | 18 | 272 | (1,065) |
The transaction costs in acquiring investments during the year were £9,000 (2023: £3,000). For disposals, transaction costs were
£2,000 (2023: £2,000).
The company received £1,165,000 (2023: £1,106,000) from investments sold in the year. The book cost of these investments
when they were purchased was £1,951,000 (2023: £1,503,000). These investments have been revalued over time and, until they
were sold, any unrealised gains/losses were included in the fair value of the investments.
*Opening fair value of £4,882,000 includes £22,000 of CFD gains.
**Sale proceeds received of £1,165,000 includes a negative balance of £712,000 in relation to losses on CFDs.
***Losses on investments of £226,000 includes a balance of £712,000 in relation to losses on CFDs, £75,000 in relation to
losses on sales and £561,000 in relation to unrealised gains on investment holdings.
****Closing fair value of £5,485,000 includes £49,000 of CFD gains.
| 2024 | 2023 | |
| £000 | £000 | |
| 7. Debtors | ||
| Investment income receivable | 19 | 13 |
| Amounts receivable relating to CFDs – being cash held at broker | 135 | 868 |
| Prepayments | 15 | 13 |
| Taxation | 5 | 3 |
| 174 | 897 |
4
2 SVM UK EMERGING FUND plc
Annual Report & Accounts 2024
| 2024 | 2023 | |
| £000 | £000 | |
| 8. Creditors: amounts falling due within one year | ||
| Amounts due to broker relating to CFDs | 9 | 507 |
| Due to the Manager | 32 | 10 |
| Other creditors | 167 | 60 |
| 208 | 577 |
| 9. Share capital | ||
| Allotted, issued and fully paid | ||
| 6,005,000 ordinary 5p shares (2023 - 6,005,000) | 300 | 300 |
As at the date of publication of this document, there was no change in the issued share capital and each
ordinary share carries one vote, other than the 10,000 shares held in treasury which carry no voting rights.
During current and prior year there were no Ordinary Shares bought back.
10. Financial instruments
Risk Management
The Fund’s investment policy is to hold investments, CFDs and cash balances with gearing being
provided by the use of CFDs and a bank overdraft arranged with State Street Bank and Trust Company.
100% (2023: 100%) of the Fund's net asset value is held in investments that are denominated in
Sterling and are carried at fair value. Where appropriate, gearing can be utilised in order to enhance
net asset value. It does not invest in short dated fixed rate securities other than where it has
substantial cash resources. Fixed rate securities held at 31 March 2024 were valued at £nil (2023 –
£nil). Investments, which comprise principally equity investments, are valued as detailed in the
accounting policies.
The Fund only operates short term gearing, which is limited to 30 per cent of gross assets, and is
undertaken through an unsecured variable rate bank overdraft and the use of CFDs. The comparator
rate which determines the interest received on Sterling cash balances or paid on bank overdrafts is
the bank base rate which was 5.25% as at 31 March 2024 (2023 – 4.25%). There are no undrawn
committed borrowing facilities. Short-term debtors and creditors are excluded from disclosure.
The Fund does not hold any (2023: nil) of the total net asset value in investments with direct foreign
currency exposure and is consequently not currency hedged. Financial information on the investment
portfolio is detailed in note 6.
| Assets | Liabilities | Assets | Liabilities | |
| 2024 | 2024 | 2023 | 2023 | |
| £000 | £000 | £000 | £000 | |
| Classification of financial instruments | ||||
| Level 1 | 5,436 | – | 4,860 | – |
| Level 2 | 49 | 9 | 22 | 507 |
| Level 3 - 2 investments (2023 - 3) | – | – | – | – |
Level 1 reflects financial instruments quoted in an active market.
Level 2 reflects financial instruments whose fair value is evidenced by comparison with other
observable current market transactions in the same instrument or based on a valuation technique
whose variable include only data from observable markets. The CFD positions are the sole Level 2
investments at 31 March 2024 and 2023.
Level 3 reflects financial instruments whose fair value is determined in whole or in part using a
valuation technique based on assumptions that are not supported by prices from observable market
transactions in the same instrument and not based on available observable market data. The Board
has instructed the Manager not to make any new investments in unlisted shares.
There are 2 (2023-3) investments in the Fund which have values of £nil where the respective share
prices have been suspended, or are stale. The Fair Value and Pricing Committee oversees and has
ratified the positions.
S
VM UK EMERGING FUND plc 43
Annual Report & Accounts 2024
10. Financial instruments (continued)
The Board has established guidelines to grant the Manager a limited authority to invest in CFDs to
achieve some degree of gearing and/or hedging without incurring the gross cost of investment. The
Board requires the Manager to operate within certain risk limits, as detailed in the Report of the
Directors. The following table details the CFD positions:
| 2024 | 2023 | |
| £000 | £000 | |
| Number of CFD holdings (2024 - 4; 2023 - 9) | ||
| Gross exposure | 389 | 892 |
| Net exposure | 389 | 892 |
| Unrealised gains | 49 | 22 |
| Unrealised losses | 9 | 507 |
The major risks inherent within the Fund are market risk, liquidity risk, credit risk and interest rate risk.
The Fund has an established environment for the management of these risks which are continually
monitored by the Manager. Appropriate guidelines for the management of its financial instruments
and gearing have been established by the Board of Directors. It has no significant exposure to foreign
currency assets and therefore does not use currency hedging. It does not use derivatives within the
portfolio with the exception of CFDs.
Market risk
The risk that the Fund may suffer a loss arising from adverse movements in the fair value or future
cash flows of an investment. Market risks include changes to market prices of the underlying shares
held in the Fund, interest rates and currency movements. The Fund invests in a diversified portfolio
of holdings covering a range of sectors. The Manager conducts continuing analysis of holdings and
their market prices with an objective of maximising returns to shareholders. Asset allocation, share
selection and market movements are reported to the Board on a regular basis.
Liquidity risk
The risk that the Fund may encounter difficultly in meeting obligations associated with financial
liabilities. The Fund is permitted to invest in shares traded on AIM or similar markets; these tend to
be in companies that are smaller in size and by their nature less liquid than larger companies. The
Manager conducts continuing analysis of the liquidity profile of the portfolio and the Fund maintains
an overdraft facility to ensure that it is not a forced seller of investments.
Credit risk
The risk that the counterparty to a transaction fails to discharge its obligation or commitment to the
transaction resulting in a loss to the Fund. Investment transactions are entered into using brokers that
are on the Manager’s approved list, the credit ratings of which are reviewed periodically in addition to
an annual review by the Manager’s board of directors. The Fund’s principal bankers are State Street
Bank & Trust Company, the main broker for CFDs is UBS and other approved execution broker
organisations authorised by the Financial Conduct Authority.
4
4 SVM UK EMERGING FUND plc
Annual Report & Accounts 2024
10. Financial instruments (continued)
Interest rate risk
The risk that interest rate movements may affect the level of income receivable on cash deposits. At
most times the Fund operates with relatively low levels of bank gearing, this has and will only be
increased where an opportunity exists to substantially add to the net asset value performance.
Sensitivity analysis
The following table details the impact on net asset value and return per share of the Fund to changes
in, what can be, the two principal drivers of performance, namely investment returns, in relation to
market risk, and interest rates. The calculations are based on the balances at the respective balance
sheet dates and are not representative of the year as a whole.
| 2024 | 2023 | |
| £000 | £000 | |
| Investment portfolio | ||
| Investment returns 5% increase | +4.6p | +4.1p |
| Investment returns 5% decrease | -4.6p | -4.1p |
| Other assets/liabilities | ||
| Interest rate 0.5% increase | – | – |
| Interest rate 0.5% decrease | – | – |
Maximum credit risk analysis
As at the year end, the Fund’s maximum credit risk exposure was as follows:
| Bank | 348 | 375 |
| Amounts receivable relating to CFDs | 135 | 868 |
| Investment income due but not received | 19 | 13 |
| Taxation | 5 | 3 |
| 507 | 1,259 |
Contractual maturity analysis
| Due not | Due | Due | ||
| later than | between 1 and | between 3 and | 2024 | |
| 1 month | 3 months | 12 months | Total | |
| £000 | £000 | £000 | £000 | |
| Bank | 348 | – | – | 348 |
| Debtors | 39 | – | 135 | 174 |
| Creditors | (208) | – | – | (208) |
| Net liquidity | 179 | – | 135 | 314 |
| Due not | Due | Due | ||
| later than | between 1 and | between 3 and | 2023 | |
| 1 month | 3 months | 12 months | Total | |
| £000 | £000 | £000 | £000 | |
| Bank | 375 | – | – | 375 |
| Debtors | 29 | – | 868 | 897 |
| Creditors | (577) | – | – | (577) |
| Net liquidity | (173) | – | 868 | 695 |
Cash flows payable under financial liabilities by remaining contractual liabilities are as stated above.
S
VM UK EMERGING FUND plc 45
Annual Report & Accounts 2024
10. Financial instruments (continued)
Capital management policies
The Fund’s management objectives are to provide shareholders with long term capital growth.
| 2024 | 2023 | |
| £000 | £000 | |
| Capital and reserves: | ||
| Share capital | 300 | 300 |
| Share premium | 314 | 314 |
| Special reserve | 5,136 | 5,136 |
| Capital redemption reserve | 27 | 27 |
| Capital reserve | 649 | 394 |
| Revenue reserve | (627) | (594) |
| Total shareholders’ funds | 5,799 | 5,577 |
The Fund’s objectives for managing capital are detailed in the Strategic Report and have been complied
with throughout the year. It normally restricts gearing to 30% of net assets, maintaining a minimum
share capital of £50,000 (as a public company) and adheres to the capital restrictions imposed by
relevant company and tax legislation.
The revenue reserve is distributable and, to the extent it is positive, dividends can be funded from it.
The special reserve is distributable and the cost of purchasing own shares has been accounted for in
this reserve. The Company’s Articles of Association prohibit the distribution of capital profits by way
of dividend.
11. Transactions with the Manager and SVM Asset Management Limited
The Management section of the Report of the Directors sets out the services provided by the Manager
to the Fund and fees earned. The share interests of the Manager in the Fund are set out in the
Substantial Shareholdings section of the Report of the Directors. C W McLean is the Investment
Manager at River Global Investors LLP and is interested, directly or indirectly, in 1,749,932 shares
representing 29.1% of the issued share capital of the Company.
There are no transactions with Directors other than aggregated remuneration for services as Directors
as disclosed in the Directors’ Remuneration Report and note 3. Shareholdings of Directors are also
set out in the Directors’ Remuneration Report.
The agreements for the provision of investment management and secretarial services were novated
from SVM Asset Management Ltd to River Global Investors LLP with effect from 1 December 2023.
There were no changes to the terms of the agreement. The Manager is entitled to a fee for services,
payable quarterly in arrears, equivalent to 0.75% of the total assets of the Fund, less current liabilities.
The Manager elected to waive the investment management fee from 1 September 2023 until further
notice.
Amounts paid to the Manager in respect of Investment Management fees are disclosed in note 2,
with £nil (2023: £10,498) due at the year end.
During the year, SVM Asset Management Limited paid supplier invoices and Directors' fees on behalf
of the Fund. The balance due to SVM Asset Management Limited is usually settled by the Fund in full
twice a year; generally in September and March.
4
6 SVM UK EMERGING FUND plc
Annual Report & Accounts 2024
Glossary of Terms
and Alternative
Performance Measures
Alternative Performance Measures (APM)
A
n Alternative Performance Measure ‘APM’ is a financial measure of historical or future financial
performance, financial position, or cash flows, other than a financial measure defined or specified in the
applicable financial reporting framework. The Company uses the APMs noted below throughout the annual
report, financial statements and notes to the financial statements:
Discount (APM)
Discount is the amount, expressed as a percentage, by which the share price is lower than the NAV
per share. If the share price is higher than the NAV per share, this situation is called a premium. As
at 31 March 2024 the share price was 61.50p and the NAV per share was 96.73p therefore the
discount was 36.4%, (2022: discount 29.6%).
Gearing (APM)
Gearing means borrowing to invest in additional investments for the Company and is calculated as
the amount by which total investments exceed the net asset value, expressed as a percentage of
net asset value. If the net asset value grows, gearing can increase the Company’s returns, but, if
they fall, losses can be greater. Gearing is calculated as Total CFD exposure (£389,000) less cash
held (£348,000) divided by Total Net Assets (£5,799,000) = 0.7%, (2023: 9.3%).
Net Asset Value (‘NAV’) Total Return (APM)
NAV total return is the return on the NAV per share considering both capital return and dividends
paid, assuming these were reinvested on ex-date represented by the movement in NAV during the
year, being 100*(-1) = 4.0% (2023: -17.3%).
Ongoing Charges (APM)
Ongoing charges are the total of the Company’s expenses including both the investment
management fee and other operating costs expressed as a percentage of NAV. Ongoing charges
are calculated as Investment Management fees (£17,000) divided by the average of opening and
closing NAV ((£5,577,000 + £5,799,000)÷2)) = 0.30%, (2023: 0.68%). Similarly other expenses
(£143,000) are divided by the same average NAV referred above = 2.51%, (2023: 2.32%). Total
ongoing charges are, therefore, calculated as Investment Management fees plus other expenses
(£5,577,000+£5,799,000) divided by the average of the opening and closing NAV ((£17,000 +
£143,000)÷2) = 2.81%, (2023: 3.00%).
Share Price Total Return (APM)
Share price total return is the return of the share price considering both capital return and dividends
paid, assuming these were reinvested on ex-date represented by the movement in share price during
the year, being 100*(-1) = -6.1%,(2023: -25.1%).
Comparator Total Return
Comparator total return is the return of the comparator considering both capital return and dividends
paid, assuming these were reinvested on ex-date. The Company’s comparator is the IA UK All
companies Sector Average.
Leverage
For the purposes of the Alternative Investment Fund Managers Directive (‘AIFMD’), leverage is any
method which increases the Company’s exposure, whether through borrowings, derivatives or any
other means. It is expressed as a ratio between the Company’s exposure and its net asset value
and can be calculated on a gross and a commitment method. In accordance with AIFMD leverage
can be calculated using a gross and a commitment method, as represented by the Gearing
calculation, being an APM. Under the gross method, exposure represents the sum of the Company’s
positions after the deduction of sterling cash balances, without taking into account any hedging and
netting arrangements. Under the commitment method, exposure is calculated without the deduction
of sterling cash balances and after certain hedging and netting positions are offset against each
other. The commitment leverage is calculated as gross exposure expressed as a percentage of the
closing NAV, being 389,000/5,799,000*100 = 6.7% (2023: 16.0%). The gross leverage is calculated
as the gross exposure (£389,000) less sterling cash balances (£348,000) divided by the NAV
(£5,799,000) = 0.7% (2023: 9.3%).
NAV Per Share
The net asset value (‘NAV’) is the value of the investment company’s assets, less any liabilities that
it has. The NAV per share is the NAV divided by the number of shares in issue, not held in Treasury
being £5,799,000/5,995,000 shares *100 = 96.73p, (2023: 93.03p).
S
VM UK EMERGING FUND plc 47
Annual Report & Accounts 2024
Notice of Annual
General Meeting
NOTICE IS HEREBY GIVEN that an Annual
General Meeting of SVM UK Emerging Fund
plc (‘the Company’) will be held at the offices
of SVM Asset Management Limited, 7 Castle
Street, Edinburgh, EH2 3AH on Friday, 6
September 2024 at 10am to consider and, if
thought fit, pass the following resolutions of
which resolutions 1 – 8 will be proposed as
Ordinary Resolutions and Resolutions 9 & 10
as Special Resolutions, all as set out below.
Ordinary Business – Ordinary Resolutions
1. That the financial statements for the year to
31 March 2024, the Directors’ Report and
the Independent Auditor’s Report be
received.
2. That the Directors’ Remuneration Policy
Report as contained in the Directors’
Remuneration Report for the year to
31 March 2024 be approved.
3. That the Annual Report on Directors’
Remuneration as contained in the Directors’
Remuneration Report for the year to 31
March 2024 be approved.
4. That Peter Frederick Dicks be re-appointed
as a Director.
5. That Ian Gray be re-appointed as a Director.
6. That Jeremy Harris be re-appointed as a
Director.
7. That Johnston Carmichael LLP be re-
appointed as Auditor of the Company to
hold office until the conclusion of the next
general meeting of the Company at which
accounts are laid before the Company and
that their remuneration be determined by
the Directors.
8. Authority to allot shares
That, in substitution for any existing
authority, but without prejudice to the
exercise of that authority prior to the date
hereof, the Directors of the Company are
hereby authorised in accordance with
Section 551 of the Companies Act 2006 to
exercise all the powers of the Company to
allot shares in the Company and to grant
rights to subscribe for shares in the
Company provided that such authority shall
be limited to the allotment of shares and
the grant of rights in respect of shares with
an aggregate nominal value not exceeding
£30,000, representing approximately 10%
of the nominal value of the issued capital of
the Company and provided that said
authority shall expire at the conclusion of
the next general meeting of the Company
after the passing of this resolution or on the
expiry of 15 months from the passing of
this resolution, whichever is the earlier,
unless previously revoked, varied or
extended by the Company in a general
meeting, save that the Company may at
any time prior to the expiry of this authority
make an offer or enter into an agreement
which would or might require shares to be
allotted or granted after the expiry of this
authority and the Directors shall be entitled
to allot or grant shares pursuant to said
offer or agreement as if this authority had
not expired.
Special Resolutions
9. Market purchase of shares
That in substitution for any existing
authority but without prejudice to the
exercise of any such authority prior to the
date hereof, the Company be generally and
unconditionally authorised in accordance
4
8 SVM UK EMERGING FUND plc
Annual Report & Accounts 2024
w
ith section 701 of Companies Act 2006 to
make market purchases (within the
meaning of section 693 thereof) of shares
of the Company provided that:
(a) the maximum aggregate number of
shares hereby authorised to be
purchased is less than 10% of the
issued share capital as at the date this
resolution is passed;
(b) the minimum price which may be paid
for a share shall be 5 pence;
(c) the maximum price (excluding expenses)
which may be paid for a share shall be
not more than the higher of:
(i) 5% above the average closing price
on the London Stock Exchange for
the shares over the five business
days immediately preceding the date
of purchase;
(ii) the higher of the last independent
trade and the highest current
independent bid on the London
Stock Exchange; and
(d) unless renewed, varied or revoked, the
authority hereby conferred shall expire
at the conclusion of the next Annual
General Meeting of the Company, or 15
months from the passing of this
Resolution, whichever is the earlier,
save that the Company may, prior to
such expiry, enter into a contract to
purchase shares under such authority
which will or may be executed wholly or
partly after the expiry of such authority
and may make a purchase of shares
pursuant to any such contract.
10.Disapplication of pre-emption rights
That, the Directors be authorised to allot
shares in the Company for cash either
p
ursuant to the authority conferred by
resolution 8 above or by way of sale of
treasury shares as if Section 561(1) of the
Companies Act 2006 did not apply to such
allotment, provided that this authority shall
be limited to the allotment of shares with
an aggregate nominal value not exceeding
£30,000 representing approximately 10%
of the nominal value of the issued share
capital of the Company. The Directors of
the Company are hereby authorised for the
purposes of LR15.4.11 of the Listing Rules
of the UK Listing Authority of the Financial
Conduct Authority to sell treasury shares
for cash at a price below the net asset
value per share of those shares without any
prior offer to Shareholders of the Company.
This authority shall expire at the conclusion
of the next general meeting of the
Company after the passing of this
resolution or on the expiry of 15 months
from the passing of this resolution,
whichever is the earlier, save that the
Company may, before such expiry, make an
offer or agreement which would or might
require shares to be allotted after such
expiry and the Directors may allot shares
pursuant to any such offer or agreement as
if the authority conferred hereby had not
expired.
By order of the Board
River Global Investors LLP
Company Secretary
30 July 2024
S
VM UK EMERGING FUND plc 49
Annual Report & Accounts 2024
Notes:
1
. Under Section 324 of the Companies Act 2006, a member
of the Company is entitled to appoint one or more proxies
to exercise all or any of the member’s rights to attend,
speak and vote at a meeting of the Company, provided
that each proxy is appointed to exercise the rights
attached to a different share or shares held by the
member.
2. A form of proxy for use by shareholders is enclosed with
this document. Forms of proxy must be lodged with the
Company’s registrars, Computershare Investor Services
plc at the address noted on the form, not less than 48
h
ours (excluding non-working days) before the time
a
ppointed for the meeting, together with any Power of
Attorney or other authority under which the proxy is
signed. Completion of the form of proxy will not preclude
you from attending the meeting and voting in person.
Attendance by non-shareholders will be at the discretion
of the Company. Alternatively, shareholders may register
the appointment of a proxy electronically by logging on to
the website www.investorcentre.co.uk/eproxy. To appoint
a proxy electronically, you will require the Control Number,
Shareholder Reference Number and PIN detailed on your
Form of Proxy. Electronic proxy appointments must be
also be received by the Company’s Registrar,
Computershare, no later than 48 hours (excluding non-
working days) before the time appointed for the meeting.
Proxies received after that date or sent to any other
a
ddress, will not be valid.
3. Pursuant to Regulation 41 of the Uncertificated Securities
Regulations 2001, only those shareholders entered on the
Register of Members at close of business on 4
September 2024 are entitled to attend and/or vote at the
meeting. If the meeting is adjourned, to be entitled to
attend and vote at the adjourned meeting, members must
be entered on the Register of Members 48 hours
(excluding non-working days) before the time fixed for the
adjourned meeting.
4. The letters of appointment of the directors are available
for inspection at the Company’s registered office during
normal business hours and at the AGM (for 15 minutes
prior to the meeting and during the meeting).
5. To facilitate voting by corporate representatives at the
meeting, arrangements will be put in place so that (i) if a
corporate shareholder has appointed the Chairman of the
meeting as its corporate representative with instructions
to vote on a poll in accordance with the directions of all
of the other corporate representatives for that shareholder
at the meeting, then on a poll those corporate
representatives will give voting directions to the Chairman
and the Chairman will vote (or withhold a vote) as
corporate representative in accordance with those
directions; and (ii) if more than one corporate
representative for the same corporate shareholder
attends the meeting but the corporate shareholder has
not appointed the Chairman of the meeting as its
corporate representative, a designated corporate
representative will be nominated, from those corporate
representatives who attend, who will vote on a poll and
the other corporate representatives will give voting
directions to that designated corporate representative.
6. CREST members who wish to appoint a proxy or proxies
through the CREST electronic proxy appointment service
may do so by using the procedures described in the
CREST Manual. CREST personal members or other
CREST sponsored members, and those CREST members
who have appointed a voting service provider(s), should
refer to their CREST sponsor or voting service provider(s),
who will be able to take the appropriate action on their
behalf. In order for a proxy appointment or instruction
made by means of CREST to be valid, the appropriate
CREST message (a “CREST proxy instruction”) must be
properly authenticated in accordance with Euroclear UK
& Ireland Limited’s specifications, and must contain the
information required for such instruction, as described in
the CREST Manual. The message, regardless of whether
it constitutes the appointment of a proxy or is an
amendment to the instruction given to a previously
appointed proxy, must, in order to be valid, be transmitted
so as to be received by the Company’s registrar (ID
number 3RA50) no later than 48 hours (excluding non-
working days) before the time of the meeting or any
adjournment. For this purpose, the time of receipt will be
taken to be the time (as determined by the timestamp
applied to the message by the CREST Application Host)
from which the Company’s registrar is able to retrieve the
message by enquiry to CREST in the manner prescribed
by CREST. After this time any change of instructions to
proxies appointed through CREST should be
communicated to the appointee through other means.
CREST members and, where applicable, their CREST
sponsors, or voting service providers should note that
Euroclear UK & Ireland Limited does not make available
special procedures in CREST for any particular message.
Normal system timings and limitations will, therefore,
a
pply in relation to the input of CREST Proxy Instructions.
It is the responsibility of the CREST member concerned
to take (or, if the CREST member is a CREST personal
member, or sponsored member, or has appointed a
voting service provider(s), to procure that his CREST
sponsor or voting service provider(s) take(s)) such action
as shall be necessary to ensure that a message is
transmitted by means of the CREST system by any
particular time. In this connection, CREST members, and
where applicable, their CREST sponsors or voting service
provider(s) are referred, in particular, to those sections of
the CREST Manual concerning practical limitations of the
CREST system and timings. The Company may treat as
invalid a CREST Proxy Instruction in the circumstances
s
et out in Regulation 35(5)(a) of the Uncertificated
Securities Regulations 2001.
7. The members of the Company may require the Company
to publish, on its website, a statement setting out any
matter relating to the audit of its financial statements,
including the auditor’s report and the conduct of the audit.
It will be required to do so once it has received such
requests from either members representing at least 5%
of the total voting rights of the Company or at least 100
members who have a relevant right to vote and hold
shares in the Company on which there has been paid up
an average sum per member of at least £100. Such
requests should be made in writing and must state your
full name and address and be sent to the Company at 7
Castle Street, Edinburgh EH2 3AH.
8. As at 28 June 2024, the latest practicable date prior to
the publication of this document, the Company’s issued
share capital was 6,005,000 Ordinary Shares of 5p each.
Each ordinary share, other than those held in treasury,
carries the right to one vote at a general meeting of the
Company and, therefore the total number of voting rights
in the Company as at 30 June 2024 is 5,995,000.
9. Any person holding 3% of the total voting rights in the
Company who appoints a person other than the
Chairman as his proxy will need to ensure that both he
and such third party complies with their respective
disclosure obligations under the Disclosure and
Transparency Rules.
10. A copy of this notice, which the Company is required by
Section 311A Companies Act 2006 Act to publish on a
website in advance of the meeting is available on the
Manager’s website on www.river.global
11. Under section 319A of the Companies Act 2006, the
Company must cause to be answered any question
relating to the business being dealt with at the meeting
put by a member attending the meeting unless:
(a) answering the question would interfere unduly with
the preparation for the meeting or involve the
disclosure of confidential information;
(b) the answer has already been given on a website in
the form of an answer to a question; or
(c) it is undesirable in the interests of the Company or
the good order of the meeting that the question be
answered.
5
0 SVM UK EMERGING FUND plc
Annual Report & Accounts 2024
The River Global website remains the best
source of information about the Fund. Over
recent years, there have been a number of
initiatives which have been added to improve
shareholder access and the quality of reporting
and marketing. These initiatives attract new
investors and keep existing shareholders
informed.
The Fund’s webpage is easy
to access within the Manager’s
website www.river.global
and provides detailed
information on the Fund.
The most recent prices for shares are available
on the Trustnet website at www.trustnet.com
There is no longer any requirement to post the
Fund’s half yearly report to shareholders. It is
made available on the website together with all
other information we publish for the Fund.
Comprehensive quarterly factsheets are
produced with the Manager’s commentary,
portfolio analysis, featured share, fund
performance, sector breakdowns and current
hedging and gearing status.
The Fund distributes quarterly updates by email
to a number of intermediaries. It is also
possible for shareholders and other interested
parties to subscribe to this. To do so, please
email your request to enquiries@river.global
At River Global, we aim to achieve superior
investment performance through careful share
picking and analysis. Whether we are
researching for our long or long/short funds we
undertake proprietary, in-depth analysis in order
to identify the true value of a company or fund.
This strategy has ensured that we have
achieved superior investment returns for a
broad range of clients – both institutional and
private investors. As pure equity specialists, we
focus our expertise on investing in UK and
European companies as well as global
investment funds.
Investing in SVM UK Emerging Fund plc
Shares can be easily traded on the London
Stock Exchange.
Investors wishing to purchase shares in the
Fund or sell all or part of their existing holding
may do so through a stockbroker or their other
financial adviser. Most banks also offer this
service. It is also possible to trade the
Company’s shares through many of the online
dealing service providers.
For more information the Manager can be
contacted on +44 (0) 20 3327 5100 or
alternatively information is available on the
website: www.river.global. The Manager is not
permitted to give you financial or tax advice. If
you are in any doubt please consult your
financial adviser.
Shareholder
Information
S
VM UK EMERGING FUND plc 51
Annual Report & Accounts 2024
Investment Manager and Secretary
River Global Investors LLP
30 Coleman Street
London EC2R 5AL
Telephone: +44 (0) 20 3327 5100
Email: sales.support@river.global
Web: www.river.global
Registered Office
SVM UK Emerging Fund plc
7 Castle Street
Edinburgh EH2 3AH
Authorised and regulated by the Financial
Conduct Authority and a member of the
Investment Association
Registrars
Computershare Investor Services plc
Edinburgh House
4 North St. Andrew Street
Edinburgh EH2 1HJ
Telephone: +44 (0) 370 702 0003
Authorised and regulated by the Financial
Conduct Authority
Auditor
Johnston Carmichael LLP
7-11 Melville Street
Edinburgh EH3 7PE
Custodians
State Street Bank & Trust Company
Registered Office:
20 Churchill Place
Canary Wharf
London EH14 5HJ
Correspondence Address:
Quartermile 3
10 Nightingale Way
Edinburgh EH3 9EG
Authorised and regulated by the
Financial Conduct Authority and a
member of the Investment
Association
Registered Number
SC211841
Manager’s Website
www.river.global
Corporate Information
(unaudited)
5
2 SVM UK EMERGING FUND plc
Annual Report & Accounts 2024
Contact:
+44 (0) 20 3327 5100
sales.support@river.global
Registered Office:
SVM UK Emerging Fund plc
7 Castle Street, Edinburgh
Issued by:
River Global Investors LLP who is authorised and regulated
by the Financial Conduct Authority.
30 Coleman Street, London, EC2R 5AL
©River Global Investors LLP