Directors' Report

The Directors present their Report for the year ended 30 June 2024. The Corporate Governance Report below is deemed to form part of this Report.

Company Status

The Company is incorporated and domiciled in the United Kingdom and registered in England and Wales.

The Company is an investment company as defined in section 833 of the Companies Act 2006, approved as an investment trust in accordance with section 1158 of the Corporation Tax Act 2010 ('s.1158') and an alternative investment fund under the Alternative Investment Fund Managers Regulations. The Directors intend at all times to conduct the affairs of the Company to enable it to continue to qualify as an investment trust for the purposes of s.1158. 

The Company manages its affairs so as to be a qualifying investment for inclusion in an Individual Savings Account and it is the Directors' intention that the Company should continue to do so.

Business Review

The Company's principal activity is investment in a diversified, international portfolio of predominantly early and growth stage privately financed SpaceTech businesses that have the potential to dominate globally and are category leaders with first mover advantages in areas such as climate change, sustainability, communications, mobility and global security (including cyber security) with the objective of generating capital growth over the long term.

A detailed review of the Company's business and performance during the year, any future likely developments in the Company and the outlook for the Company are contained in the Strategic Report and should be read as part of this Report. 

Results and Dividends

The total comprehensive income for the year was a profit of £6.7m (2023: loss of £16.9m), comprising a loss of £3.7m (2023: loss of £4.5m) attributable to revenue and a  profit of £10.5m (2023: loss of £12.4m) attributable to capital. As the Company is focused on generating capital growth over the long term and given the nature of the Company's investments, the Board does not anticipate recommending paying any dividends in the foreseeable future.

Share Capital

As at 30 June 2024, the Company's issued share capital comprised 239,384,928 ordinary shares of £0.01 each, of which 2,186,344 ordinary shares were held in treasury. The total number of voting rights of the Company at 30 June 2024 was, therefore, 237,198,584.

Shareholders are entitled to all dividends paid by the Company (however, as stated above, the Company does not expect to pay dividends in the foreseeable future). On a winding up, provided the Company has satisfied all its liabilities, shareholders are entitled to the surplus assets of the Company. Shareholders are entitled to attend and vote at all general meetings of the Company and, on a poll, to one vote for each ordinary share held. Shares held in treasury have no rights to dividends, capital or vote.

There are:

·   no restrictions on the transfer of securities in the Company save where (a) the Company is legally entitled to impose such restrictions, such as restrictions on transfers by Directors and persons closely associated with them during closed periods, or (b) the Company's Articles of Association allow the Board to decline to register a transfer of shares or otherwise impose a restriction on shares to prevent the Company breaching any law or regulation;

·   no agreements between holders of securities regarding their transfer which are known to the Company;

·   no restrictions on exercising voting rights save where the Company is legally entitled to impose such restrictions, such as if, having been served with a notice under section 793 of the Companies Act 2006, a shareholder fails to disclose details of any past or present beneficial interest;

·   no special rights with regard to control attached to securities in the Company; and

·   no agreements to which the Company is a party that might affect its control following a successful takeover bid.

Share Issues and Buy-backs

The Board has not adopted any formal premium or discount targets which would dictate the point at which the Company would seek to issue or buy back ordinary shares.

During the year ended 30 June 2024, the Company did not issue any new ordinary shares and bought back through the market 2,186,344 ordinary shares into treasury at an average price of 45.01p and for an aggregate consideration of £1.0m (the rationale for these buy-backs is set out opposite 'Share price discount' below). In the period since the year end to 14 October 2024, the Company did not issue or buy-back any shares.

The Company's current general authorities to allot for cash on a pre-emptive or non-pre-emptive basis up to 23,719,858 ordinary shares, representing c.10% of the ordinary shares in issue on the date the authority was granted, expires at the conclusion of the 2024 AGM. Ordinary resolution 9 and special resolution 10 will be proposed at the forthcoming AGM seeking renewal of such authorities to issue ordinary shares up to 10% of the ordinary shares in issue on the date the authorities are granted until the next AGM or 31 December 2025, whichever is the earlier. Unless specifically authorised by shareholders, no issue of ordinary shares (or sale of ordinary shares from treasury) on a non-pre-emptive basis will be made at a price less than the prevailing NAV per ordinary share at the time of issue (or sale).

The Company's current authority to make market purchases of up to 35,556,067 ordinary shares, representing 14.99% of the ordinary shares in issue on the date the authority was granted, expires at the conclusion of the 2024 AGM. Special resolution 11 will be proposed at the forthcoming AGM seeking renewal of this authority until the next AGM or 31 December 2025, whichever is the earlier. The Company may hold bought-back shares in treasury and then re-sell such shares (or any of them) for cash or cancel bought-back shares (or any of them). Shares will only be re-sold from treasury at a premium to the NAV per share.

Major Interests in Shares

At 30 June 2024 and 30 September 2024, the Company had been notified under the FCA's Disclosure Guidance and Transparency Rules or was otherwise aware of the following shareholders who were directly or indirectly interested in 3% or more of the voting rights in the Company's issued share capital:

Directors

The names and biographical details of the Directors who all served throughout the year are shown below. Details of the interests of the Directors and their connected persons in the Company's ordinary shares, the Directors' remuneration policy and their remuneration can be found in the Directors' Remuneration Report below. No Director has a service contract with the Company and there are no agreements between the Company and its Directors providing for compensation for loss of office.

The rules concerning the appointment and replacement of Directors are contained in SSIT's Articles of Association and the Companies Act 2006. Further details are provided in the Corporate Governance Report below.

In line with the AIC Code and the Company's Articles of Association, all of the Directors are retiring at the forthcoming AGM and each offers themself for re-election. The Board has reviewed the performance and commitment of the Directors standing for re-election and considers that each should continue to serve on the Board as they bring wide, current and relevant experience that allows them to contribute effectively to the leadership of the Company and have demonstrated full commitment to and independence in their roles.

Directors' Insurance and Indemnification

Directors' and officers' liability insurance cover is in place in respect of the Directors and was in place throughout the year.

The Company's Articles of Association provide that the Company may, subject to the Companies Act 2006 and other applicable UK legislation for the time being in force affecting the Company, indemnify any person who is a Director of the Company against (a) any liability whether in connection with any negligence, default, breach of duty or breach of trust by that person in relation to the Company or any associated company or (b) any other liability incurred by or attaching to that person in the actual or purported execution and/or discharge of that person's duties and/or the exercise or purported exercise of that person's powers and/or otherwise in relation to or in connection with that person's duties, powers or office.

Related Party and Investment Manager Transactions

The Company's transactions with related parties during the year were with its Directors. There were no material transactions between the Company and its Directors during the year other than the amounts paid to them in respect of Directors' remuneration for which there were no outstanding amounts payable at the year end.

Details of amounts paid to the Investment Manager during the year are included in note  to the financial statements below. During the year, the Investment Manager recharged the Company for £116k of third-party expenses it incurred on the Company's behalf. There were no amounts outstanding to the Investment Manager at 30 June 2024.

As explained below, in April 2024, the Company announced the sale of nine early stage portfolio companies to the Venture Fund for a total consideration of £3.8m, settled through the issuance of an interest for the Company in the Venture Fund. The Investment Manager also acts as investment manager to the Venture Fund.

Risks and Risk Management

The principal risks and uncertainties facing the Company are set out below. Further details of the Company's key financial risks are set out in note 14 to the financial statements below

Going Concern

In light of the conclusions drawn in the longer-term viability statement below and as set out in note 2 to the financial statements below, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for at least 12 months from the date of this Annual Report. Accordingly, the Directors believe that it is appropriate to continue to adopt the going concern basis in preparing the financial statements.

Disclosure of Information to the Company's Auditor

Having made enquiries of the Investment Manager and Administrator, each of the Directors confirms that, at the date of approval of this Report:

·   as far as they are aware, there is no relevant audit information of which the Auditor is unaware; and

·   they have taken all the steps a Director might reasonably be expected to have taken to be aware of any relevant audit information and to establish that the Auditor is aware of that information.

This confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Companies Act 2006.

Independent Auditor

The Directors will propose the re-appointment of BDO LLP as the Company's Auditor and resolutions concerning this and to authorise the Audit Committee to determine the Auditor's remuneration will be proposed at the forthcoming AGM.

Annual Report

As disclosed in the Audit Committee Report below, after due consideration the Audit Committee concluded that this Annual Report, taken as a whole, is fair, balanced and understandable. Therefore, the Board is of the opinion that this Annual Report provides the information necessary for shareholders to assess the position and performance, strategy and business model of the Company.

Events After the Balance Sheet Date

Save as disclosed in note 17 to the financial statement below, there have been no significant events since 30 June 2024.

2024 AGM

The next AGM will be held at 1 Fleet Place, London, EC4M 7WS (GPS postcode EC4M 7RA) at 11.00 on 26 November 2024. The formal notice convening the AGM, together with an explanation of the resolutions to be considered at it, will be sent to shareholders in due course and a copy of the notice will be published on the Company's website (https://investors.seraphim.vc).

We believe that all the resolutions to be proposed at the AGM are in the best interests of shareholders as a whole and therefore recommend shareholders to vote in favour of them as we will be doing with our own holdings.

Articles of Association

The Company's Articles of Association may only be amended by special resolution at a general meeting of shareholders.

UK Listing Rule 9.8.4C

The FCA's UK Listing Rule 9.8.4C requires the Company to include certain information in a single identifiable section of the Annual Report or a cross-reference table indicating where the information is set out. The Directors confirm that there are no disclosures to be made in this regard.

Approval

This Directors' Report was approved on 14 October 2024.

On behalf of the Board:

Will Whitehorn

Chair

14 October 2024

Corporate Governance Report

Corporate Governance Framework and Compliance

The FCA's Disclosure Guidance and Transparency Rules (the 'Disclosure Rules') require listed companies to disclose how they have applied the principles and complied with the provisions of the UK Corporate Governance Code issued by the Financial Reporting Council (the 'FRC') in July 2018 (the 'UK Code'). The UK Code can be viewed at www.frc.org.uk. In January 2024 the Financial Reporting Council updated the UK Code which will apply to financial years beginning on or after 1 January 2025.

The related Code of Corporate Governance issued by the Association of Investment Companies (the 'AIC') in February 2019 (the 'AIC Code') addresses the principles and provisions set out in the UK Code, as well as setting out additional provisions on issues that are of specific relevance to listed closed-ended investment companies, such as the Company. The AIC Code is available on the AIC website (www.theaic.co.uk). In August 2024 the AIC Code was updated and endorsed by the FRC, the 2024 AIC Code applies to accounting periods beginning on or after 1 January 2025, with the exception of Provision 34 which will apply to accounting periods beginning on or after 1 January 2026.  It includes an explanation of how the AIC Code adapts the principles and provisions set out in the UK Code to make them relevant for listed closed-ended investment companies. The FRC has endorsed the AIC Code and confirmed that AIC member companies who report against the AIC Code will be meeting their obligations in relation to the UK Code and the associated disclosure requirements of the Disclosure Rules.

The Company is a member of the AIC and the Board considers that reporting against the principles and provisions of the AIC Code provides more relevant information on the Company's governance arrangements to shareholders than reporting against the principles and provisions of the UK Code. 

The Board operates under a governance framework which is consistent with the principles and provisions of the AIC Code. This Report describes how the Company applies those principles and provisions. The Audit, Management Engagement and Remuneration and Nomination Committee Reports below are deemed to form part of this Report. The Board confirms that the Company complied with the relevant principles and provisions of the AIC Code during the year.

As an externally managed investment company, the Company has no employees and all its substantive operations are conducted on its behalf by its third-party service providers. Consequently, the Company has not complied with the provisions in the UK Code relating to the role of the chief executive, executive directors' remuneration and the need for an internal audit function. However, the Audit Committee considers the need for an internal audit function at least annually (see below for further information).

Board Leadership and Purpose

Role of the Board

The Board is collectively responsible for promoting the long-term sustainable success of the Company, generating value for shareholders whilst having regard to the interests of wider society.

The Board's role is to provide leadership and direction within a robust framework of risk management and internal controls. It sets the Company's strategic objectives (subject to the Company's Articles of Association and such approval of the shareholders in general meeting as may be required from time to time) and ensures that the necessary resources are in place to enable the Company's objectives to be met.

In managing the Company, the aim of both the Board and the Investment Manager is always to ensure SSIT's long-term sustainable success and, therefore, the likely long-term consequences of any decision are a key consideration. The Investment Manager's Responsible Investment Policy is integrated into its investment process, ensuring that it has regard to the interests of wider society in managing SSIT's portfolio.

Company purpose and strategy

The Company's purpose is to provide a vehicle through which a broad range of investors can gain exposure to a diversified, international portfolio of predominantly early and growth stage privately financed SpaceTech businesses that have the potential to dominate globally and are category leaders with first mover advantages in areas such as climate change, sustainability, communications, mobility and security (including cyber security). The Company seeks to generate capital growth over the long term for shareholders.

Operating as an externally managed investment company, SSIT seeks to fulfil its purpose by delegating operational matters to specialist third-party service providers, subject to oversight by the Board. In particular, the Investment Manager and Administrator are responsible for implementing the Company's strategy and managing the Company's day-to-day operations, respectively. The Company's success is based on such implementation and management being effective. The Board's strategy is, therefore, to work closely with the Investment Manager and Administrator in a long-term relationship designed to foster an environment that is consistent with SSIT's culture and values and contributes to achieving SSIT's strategic objectives.

Culture and values

As an externally managed investment company, SSIT's culture and values are the product of the behaviours of both the Board and the Investment Manager and the way in which they interact with each other and with the Company's other stakeholders.

The Board operates in an open, respectful and inclusive manner, where differences of perspective are welcomed and constructive challenge is encouraged. Advice and input are sought from external advisers and others, as required, to ensure a broad range of views are available and to guard against groupthink.

The Investment Manager has established an organisation driven by purpose where its employees are united by a passion to work with the most impactful companies in the SpaceTech sector. The Investment Manager strives to develop a culture of candour and openness, with employees empowered to innovate and work autonomously. Value is placed on output (the quality of work produced) rather than input (the number of hours logged). Team cohesion and collaboration are core tenets of the Investment Manager's people strategy.

Both the Board and Investment Manager aim to ensure that SSIT is run in a manner that is consistent with their beliefs in integrity, fairness, transparency and diligence and responsive to the views of the Company's shareholders and other stakeholders. Both seek to maintain high standards of business conduct at all times.

We believe that the culture and values of the Board and Investment Manager encourage constructive and robust challenge and debate, lead to coherent discussions, generate strong collective wisdom and ultimately lead to good decision making, all of which are important to the successful implementation of the Company's strategic objectives.

Conflicts of interest

Directors have a duty to avoid situations where they have, or could have, a direct or indirect interest that conflicts, or possibly could conflict, with the Company's interests ('conflict situations'). As permitted by the Companies Act 2006, the Company's Articles of Association allow the Directors to authorise conflict situations, where appropriate.

The Board has a procedure in place to deal with conflict situations. As part of this process, Directors must submit any actual or potential conflict situations they may have to the Board for approval as soon as possible. In deciding whether to approve a conflict situation, the Board will act in a way it considers, in good faith, will be most likely to promote the Company's success, taking into consideration whether the Director's ability to act in accordance with their wider duties is affected. The Company Secretary maintains the register of approved conflict situations (which also includes a list of other external positions held). Directors have a duty to keep the Board updated about any changes to their approved conflict situations. In certain circumstances the conflicted Director may be required to absent themself from discussions or decisions on the matter on which they are conflicted. No such circumstances arose in the year. None of the Directors have, or have had, any potential conflicts of interest of the nature listed in provisions 6 and 12 of the AIC Code.

The Board also has a procedure in place to manage potential conflicts of interest of the Investment Manager. These can arise, for example, where share options and/or warrants have been granted to an affiliate of the Investment Manager by a participant in an accelerator programme run by that affiliate and the Company subsequently has the opportunity to invest in the participant. In such instances, only the independent advisory committee members of the Investment Manager's Investment Committee (listed below) consider the investment at the Investment Committee meeting, and the final stage of the Board's conflict management process requires any such investment to be approved by the Board before it is made. Details of potential conflicts of interest of the Investment Manager that arose during the year are set out opposite 'Investment approvals' below.

Division of Responsibilities

The Board has overall responsibility for the Company's activities. However, the Company has delegated or outsourced various matters to its standing Committees and key service providers, most notably the Investment Manager and the Administrator, all of which operate within clearly defined terms of reference or agreements that set out their roles, responsibilities and authorities.

Board

The Board's principal responsibilities include:

·   determining the Company's strategic objectives;

·   overseeing the execution of the Company's strategy, business conduct and implementation of its key investment, financial, operational and compliance policies, ensuring they are aligned with SSIT's purpose and strategy and the Board's culture and values and that any necessary corrective action is taken;

·   ensuring that appropriate internal controls and risk management frameworks are in place to enable risk to be managed and continually assessed;

·   scrutinising the performance of the Investment Manager, Administrator and other key service providers and holding them to account; and

·   ensuring effective engagement with, and encouraging participation from, shareholders and other key stakeholders.

Matters not delegated or outsourced to Committees and key service providers are reserved for consideration and approval by the Board (including those matters listed in a formal schedule of reserved matters approved by the Board), thus enabling the Board to maintain full and effective control over appropriate strategic, financial, operational and compliance matters. The reserved matters include:

•  approving SSIT's long-term objectives and any matters of a strategic nature, including any change in investment objective, policy and restrictions, including those which may need to be submitted to shareholders for approval;

•  the appointment and removal of key service providers and any material amendments to the Company's agreements with them;

•  approval of any other material contracts and agreements entered into, varied or terminated;

•  approving any transactions with related parties;

•  approval of quarterly and any ad hoc NAV and other financial announcements;

•  approval of the Company's operating and marketing budgets;

•  the Company's corporate governance arrangements; and

•  approving any actual or potential conflicts of interest, including any potential investments in respect of which the Investment Manager may have a potential conflict of interest.

The full schedule of matters reserved for the Board is available on the Company's website (https://investors.seraphim.vc/).

The primary focus at Board meetings is a review of investment performance and associated matters (such as new investments, progress of portfolio companies, investment pipeline, projected cash flow and market environment), share price discount/premium, investor relations, industry issues, legal and regulatory (including corporate governance) developments and principal and emerging risks and uncertainties, in particular those identified in the Strategic Report.

Chair

The Chair is Will Whitehorn. His primary role as Chair is to provide leadership to the Board. The principal responsibilities of the Chair include:

•  ensuring the overall effectiveness of the Board in directing the Company;

•  taking a leading role in setting the Company's strategic objectives;

•  facilitating open, honest and constructive debate among Directors and the effective contribution of all Directors;

•  ensuring the Company is meeting its responsibilities to shareholders and wider stakeholders; and

•  engaging with shareholders to ensure that the Board has a clear understanding of their views.

Full details of the Chair's role and responsibilities are available on the Company's website (https://investors.seraphim.vc/).

Senior Independent Director ('SID')

The SID is Sue Inglis. Her primary responsibilities as such are to serve as a sounding board for the Chair, act as an intermediary for other Directors and be available to respond to shareholders' concerns if they cannot be resolved through the normal channels of communication (i.e. through the Chair). The SID leads the annual evaluation of the Chair. Full details of the SID's role and responsibilities are available on the Company's website (https://investors.seraphim.vc/).

Board Committees

The Board has three standing Committees, being the Audit Committee, Management Engagement Committee and Remuneration and Nomination Committee. The roles and responsibilities of the Committees are included in their respective Reports below and the terms of reference of each Committee are available on the Company's website (https://investors.seraphim.vc/). The Committees review their terms of reference at least annually, with any proposed changes recommended to the Board for approval. Committee Chairs attend AGMs to answer any questions on each of their Committees' activities. In addition, Committee Chairs will seek engagement with shareholders on significant matters related to their areas of responsibility.

The Board may also establish additional Committees from time to time to take operational responsibility on specific matters. These Committees ensure that key matters are dealt with efficiently.

Investment Manager

The Investment Manager is the Company's alternative investment fund manager (the 'AIFM') for the purpose of the EU AIFM Directive as incorporated into UK legislation. The Investment Management Agreement dated 22 June 2021 between the Company and the Investment Manager (the 'IMA') sets out the matters in respect of which the Investment Manager has authority and responsibility, subject to the overall control and supervision of the Board. These include the Investment Manager having full discretion in relation to SSIT's portfolio management activities in accordance with SSIT's investment policy and any other restrictions imposed by the IMA or the Board from time to time. The Investment Manager is also responsible for promoting the Company's investment proposition to professional and retail investors.

In advance of Board meetings, the Investment Manager provides regular reports, which include operating updates on the Company's investments, information on potential new investment opportunities, cash flow forecasts and other financial information and other relevant information. Senior representatives of the Investment Manager attend Board meetings. The Investment Manager is responsible for keeping the Board informed, in a timely manner, of any material developments arising from its portfolio management activities or other relevant matters, including interactions with shareholders and other key stakeholders.

Under the IMA, the Investment Manager is entitled to management fees, details of which are included in note 4 to the financial statements below. The Investment Manager's appointment is terminable by the Company or Investment Manager on not less than 12 months' notice, such notice to expire on or at any time after the third anniversary of SSIT's launch. The IMA may be terminated with immediate effect on the occurrence of certain events.

Administrator/Company Secretary

The Company has appointed the Administrator to provide fund accounting, company secretarial and other administrative services. The Administrator's responsibilities include:

•  undertaking the day-to-day financial and administration functions of the Company, including calculation of the NAV and maintenance of the Company's accounting and statutory records;

•  providing the company secretarial functions required by the Companies Act 2006;

•  ensuring that the Company complies with applicable laws, rules and regulations, including laws and regulations applicable to investment trusts and the rules of the FCA and London Stock Exchange;

•  advising on governance matters;

•  supporting the Board to ensure that it has the policies, processes and information it needs to function effectively and efficiently;

•  ensuring that Board procedures are followed; and

•  facilitating good and timely information flows within the Board and its Committees and between Directors and the Investment Manager and other service providers.

In advance of Board meetings, the Administrator provides regular reports, which include financial and other operational information, details of any breaches or complaints and relevant legal and regulatory, corporate governance and other technical updates. The Administrator is responsible for keeping the Board informed, in a timely manner, of any material developments regarding matters within the scope of its role and responsibilities.

Board and Committee Meetings

Regular Board and Committee meetings are scheduled throughout the year (Board: four; Audit Committee: eight, including four valuation meetings; Management Engagement Committee: one; Remuneration and Nomination Committee: one). In addition, the Board and Committees meet between scheduled meetings in preparation for or follow-up after scheduled meetings and any other matters that may arise between scheduled meetings. The Company also holds an annual strategy meeting to enable the Directors to consider strategic matters outside of standard Board meetings.

The Company Secretary assists the Board and Committee Chairs in agreeing the agenda in sufficient time before the meeting to allow input from key stakeholders. Care is taken to ensure that papers are presented clearly and with the appropriate level of detail and delivered in a timely manner in advance of the relevant meeting to ensure the Directors have sufficient time to prepare properly for the meeting and to make further enquiries about any matter prior to the meeting, should they so wish. This also allows any Director who is unable to attend to submit views in advance of the meeting.

The Investment Manager, the Administrator and, as required, the Company's other key service providers are expected to be present at formal Board and Committee meetings unless identified conflicts require otherwise.

The proceedings at all Board and Committee meetings are fully recorded, including any Director's concerns, in the minutes. After each Board and Committee meeting, the Company Secretary operates a follow-up procedure to ensure that actions are completed as agreed by the Board or Committee.

Attendance at meetings

The number of scheduled meetings during the year, and the attendance of the individual Directors at those meetings, is shown in the table below.

In addition to the scheduled meetings, there were two ad hoc Board and Committee meetings during the year. Typically, all Directors attend ad hoc meetings, although this is not always feasible or necessary and Directors who are unable to attend a meeting can communicate their views ahead of the meeting.  The Board also meets from time to time on an informal basis to discuss, in particular, developments affecting the Company and progress on identified workstreams.

Board Composition and Succession

Board composition and independence

At the date of this Report, the Board consists of four non-executive Directors, all of whom are (and were on appointment) independent of the Investment Manager. Each of the Directors is (and was on appointment) independent when assessed against the circumstances set out in provision 13 of the AIC Code.

The current Board was selected to bring a breadth of professional skills, experience and knowledge relevant to the Company's structure and strategy. Three of the Directors were appointed prior to the IPO and the fourth joined the Board on 1 January 2022. Details of the Directors, including their professional skills and experience, are set out below.

The composition of the Board is a fundamental driver of its success as the Board must provide strong and effective leadership of the Company without any one individual or small group dominating the decision-making. The strong and diverse mix of experienced individuals on the current Board enables high calibre debate and constructive challenge. The Board is able to use the professional skills, experience and knowledge of the individual Directors to their maximum potential and make decisions that are in the best long-term interests of the Company.

The Board's tenure, succession and diversity policies seek to ensure that the Board continues to be well-balanced and refreshed from time to time by the appointment of new Directors with the necessary professional skills, experience, knowledge and personal qualities and who can bring fresh perspectives.

Board diversity

In accordance with the FCA's UK Listing Rules 14.3.33, we are required to disclose on a 'comply or explain' basis whether the Board has met the following targets: (a) at least 40% of the Board should be women; (b) at least one of the senior Board positions should be held by a woman; and (c) at least one member of the Board should be from a minority ethnic background. The required disclosures are set out in the tables below and are based on information provided by individual Directors in response to a request from the Administrator.

As an externally managed investment company with solely non-executive Directors, the Company does not have a chief executive or a chief financial officer (both being 'senior positions' under the relevant FCA UK Listing Rule) and has no employees. Accordingly, no disclosures about executive management positions have been included. However, given the nature of the Company, the Board considers the chair of the Audit Committee to be senior positions and, therefore we have added a further (last) column to the prescribed tables below to show the Board-defined senior positions.

Board gender representation at 30 June 2024

Board ethnicity representation at 30 June 2024

As shown in the tables above, the Board has met the gender-based diversity targets but has not met the ethnicity-based diversity target. The Board supports the principle of boardroom diversity, of which gender and ethnicity are important aspects. The Company's policy is that the Board should be comprised of Directors who collectively display the necessary balance of professional skills, experience, perspectives and length of service and that appointments to the Board should be made on merit, against objective criteria, including diversity in its broadest sense.

The objective of the of the Company's diversity policy is to have a broad range of professional skills, knowledge, experience, backgrounds, approaches and length of service represented on the Board. The Board believes that this ensures that there is a breadth of perspectives among the Directors and the challenge needed to support good decision-making and, ultimately, will make the Board more effective in promoting the long-term sustainable success of the Company and generating value for shareholders. Consequently, achieving a diversity of perspectives and backgrounds on the Board is a key consideration in any Director search process.

As part of its annual evaluation of the composition of the Board, the Remuneration and Nomination Committee debated whether it would be in shareholders' interests to recruit, at this stage, a Director that would allow the Board to meet the ethnicity-based diversity target referred to above. As explained in its Report below, the Remuneration and Nomination Committee decided against recruiting an ethnically diverse Director at this time.

Appointments to the Board

The Remuneration and Nomination Committee reviews at least annually the composition of the Board and its Committees, including the balance of professional skills, experience, knowledge, diversity (including age, gender, social and ethnic backgrounds and cognitive and personal strengths) and length of service, and makes recommendations to the Board when it considers that a new Director should be recruited.

Once a decision has been taken by the Board to recruit a new Director, the Remuneration and Nomination Committee oversees the recruitment process. At the outset, the Committee reviews the current balance and diversity of the Board, identifies any specific professional skills, experience, knowledge and personal qualities that are required to ensure the continued effective operation of the Board and then sets objective selection criteria to ensure a formal and transparent appointment process. The Remuneration and Nomination Committee intends to use non-executive director recruitment consultants and/or open advertising when recruiting new Directors. Following the creation of a shortlist of candidates, the decision-making process will be based on merit, with due consideration of the objective selection criteria identified.

When considering new appointments, the Committee also takes into account other demands on the candidates' time. In advance of joining the Board, successful candidates will be asked to disclose any existing significant commitments with an indication of the time involved and to confirm that they are able to allocate sufficient time to the business of the Company and that there are no situations where they have, or could have, a direct or indirect interest that conflicts, or possibly could conflict, with the Company's interests.

Directors are not appointed for any specific term and are subject to election at the first AGM following their appointment and, thereafter, annual re-election at AGMs appointment and may resign by notice in writing to the Board at any time. At the time of appointment, a new Director receives a letter of appointment that sets out their duties and obligations. Copies of the letters of appointment of the current Directors are available for inspection at the Company's registered office and at each AGM.

Board induction and training

New Directors receive an induction on joining the Board covering the Company's strategy, policies, operational structure and governance, which is coordinated by the Company Secretary. In addition, new Directors are briefed fully about the Company's strategy and portfolio by the Investment Manager.

The Company Secretary is charged with assisting in the ongoing training and development of all Directors, including providing the Directors with details of the Company's regulatory and statutory obligations (and changes thereto). Directors are able to receive training or additional information on any specific subject pertinent to their role as a Director that they request or require. The Directors are encouraged to participate in relevant industry events and to attend any other relevant seminars and conferences, if necessary, at the Company's expense.

Information and support

To enable the Board to function effectively and the Directors to discharge their responsibilities, the Directors are regularly updated on investment, financial, investor and other stakeholder engagement and other matters. In addition to periodic reporting at scheduled Board and Committee meetings, the Directors receive, and may request, ad hoc information from the Investment Manager, Administrator and other key service providers.

The Directors have access to the advice and services of the Administrator. In addition, there is a procedure in place for Directors to take independent professional advice at the Company's expense should this be required to aid them in their duties. No such independent professional advice was sought during the year under review

Time commitment

All Directors are aware of the need to allocate sufficient time to the Company in order to discharge their responsibilities effectively. Directors must obtain prior approval from the Board when they take on any additional external appointments and it is their responsibility to ensure that such appointments will not prevent them meeting their time commitments to the Company.

Election and re-election by shareholders

Directors are required to stand for election at the first AGM following their and annual re-election at each subsequent AGM. Directors' appointments are reviewed by the Remuneration and Nomination Committee ahead of their submission for election or re-election, with submission being contingent on satisfactory performance evaluation and their willingness to continue to act.

If, at a general meeting at which a Director retires, the Company neither re-elects that Director nor appoints another person to the Board in the place of that Director, the retiring Director shall, if willing to act, be deemed to have been re-elected unless at the general meeting it is resolved not to fill the vacancy or a resolution for the re-election of the Director is put to the meeting and not passed.

All of the Directors will retire at the forthcoming AGM and are willing to continue to act. Having considered their effectiveness, demonstration of commitment to the role, attendance at meetings and contribution to the Board's and Committees' deliberations, the Board has approved the nomination for re-election of all of the Directors.

Board tenure

The Board's policy on Director, including Chair, tenure is that a Director should normally serve no longer than nine years but, where it is in the best interests of the Company, its shareholders and other stakeholders, a Director may serve for a limited time beyond that.

The Board believes that the continuity of experience and knowledge of its Directors is important and that a suitable balance requires to be struck with the need for refreshing the professional skills and experience of the Board. The Board believes that some limited flexibility in its approach to Director, including Chair, tenure will enable it to manage succession planning more effectively.

Succession planning

The Remuneration and Nomination Committee is responsible for succession planning and its approach to succession planning is explained in its Report below.

Annual Performance Evaluations

Board, Committees, Chair and individual Directors

Details on the annual evaluations of the Board, its standing Committees, the Chair and individual Directors, conducted by the Remuneration and Nomination Committee, are included in that Committee's Report below. Having considered the Committee's report and recommendations, the Board accepted all the Committee's recommendations.

Investment Manager

Details on the annual evaluation of the Investment Manager, conducted by the Management Engagement Committee, are included in that Committee's Report below. Having considered the Committee's report and recommendation, the Board believes that the continued appointment of the Investment Manager on the terms agreed is in the interests of the shareholders as a whole.

Administrator and other key service providers

Information on the annual evaluations of the Administrator and other key service providers is included in the Management Engagement Committee Report below. Having considered the Committee's report and recommendations, the Board accepted all the Committee's recommendations.

Risk Management and Internal Controls

A critical factor in achieving the long-term sustainable success of the Company is understanding the risks that the Company faces and ensuring that controls are in place to manage and mitigate them. The Company's principal and emerging risks, together with details of how we seek to manage and mitigate them, are set out in the Strategic Report. The Company's financial risks are discussed in note 14 to the financial statements below .

Responsibility for risk management and internal controls

The Board is responsible for determining the nature and extent of the principal and emerging risks the Company is willing to take in order to achieve its long-term strategic objectives. The Board is also responsible for maintaining the Company's systems of risk management and internal controls (such as financial, operational and compliance controls).

Risk management and internal control systems

The Board, through the Audit Committee, has established, in conjunction with the Investment Manager and Administrator, an ongoing process that is designed to identify, manage and mitigate on a timely basis both the principal and emerging risks inherent to the Company's business and activities and safeguard the Company's assets. The process takes account that the Company has delegated its day-to-day activities to the Investment Manager and Administrator and has clearly defined their roles, responsibilities and authorities. The Investment Manager, which is regulated by the FCA, and Administrator have their own risk management and internal control systems that operate on an ongoing basis. The Administrator has an annual type 2 report produced under the International Standard on Assurance Engagements (ISAE) 3402, which entails an independent rigorous examination and testing of its controls and processes.

The Company has a risk-based approach to risk management and internal controls through a detailed matrix that identifies each of the key risk associated with the Company's business and activities and the controls employed to mitigate those risks. Accordingly, the process seeks to manage rather than eliminate the risk of failure to achieve the Company's business objectives and provides reasonable, but not absolute, assurance against material misstatement or loss.

The Audit Committee is responsible for monitoring and regularly reviewing the Company's risk management and internal control process, including the risk matrix, and reports its findings and conclusions to the Board. Where changes in risk are identified during the year, the risk matrix is updated as appropriate and an assessment made as to whether further action is required to manage and/or mitigate the changes identified and then the updated risk matrix is recommended by the Audit Committee to the Board for approval.

The Board, either directly or through the Audit Committee, oversees the ongoing performance and actions of the Investment Manager and Administrator at scheduled meetings and, as required, at ad hoc meetings. At the scheduled Board and Audit Committee meetings, the Investment Manager reports on the performance and valuation of the Company's investments, activities since the last scheduled meetings, any specific new or merging risks identified relating to the Company's investment activities and cash projections and the Administrator reports on the Company's corporate activity and financial, compliance, governance, legal and regulatory matters. The Board also receives updates from the Investment Manager and Administrator on material developments affecting the Company's business, activities or investments between scheduled Board meetings.

The Board, Investment Manager and Administrator, together, review all financial performance and results notifications. In addition, the Investment Manager reports to the Board twice a year regarding the Company's longer-term viability, which includes financial sensitivities and stress testing of the business to ensure that the adoption of the going concern basis continues to be appropriate.

The Company is ultimately dependent upon the quality and integrity of the management and staff of the Investment Manager and Administrator. In each case, qualified and able individuals have been selected at all levels. The Investment Manager and Administrator are aware of the Company's risk management and internal controls relevant to their activities and are collectively accountable for the operation of those controls.

Each year a detailed review of the quality of services and performance of the Investment Manager, Administrator and other key service providers pursuant to their terms of engagement is undertaken by the Management Engagement Committee. 

The Company's risk management and internal control systems accord with the AIC Code and the FRC's 'Guidance on Risk Management, Internal Control and Related Financial and Business Reporting'  were in operation, and did not change materially, throughout the year and up to the date of this Report. 

Effectiveness of risk management and internal controls

The AIC Code requires the Board to review the effectiveness of the Company's systems of risk management and internal controls at least annually. At its October 2024 meeting, the Audit Committee carried out an annual assessment of the Company's risk management and internal controls for the year ended 30 June 2024 and took into account events since the year end. The Committee determined that the risk management and internal controls were operating effectively and as expected.

Based on the ongoing work of the Audit Committee in monitoring the risk management and internal control systems on behalf of the Board and the Audit Committee's report to the Board on its findings and conclusions regarding those systems, the Board:

·   is satisfied that it has carried out a robust assessment of the principal and emerging risks facing the Company, including those that could threaten its business model, future performance, solvency, liquidity or reputation; and

·   has reviewed the adequacy and effectiveness of the risk management and internal control systems and no significant failings or weaknesses were identified.

Internal Audit Function

For the reasons stated in the Audit Committee Report below, the Board does not currently consider that an internal audit function is required.

Relations with Shareholders and Other Stakeholders

We place great importance on communication with shareholders, as well as with the Investment Manager, Administrator and other key stakeholders. Details of our engagement with all of the Company's key stakeholders and examples of how we had regard to those stakeholders in our decision-making processes during the year are set out in the Strategic Report. In addition, the Chairs of the Board's standing Committees will seek to engage with shareholders on significant matters related to their areas of responsibility.

The Board recognises that relationships with service providers and other suppliers are enhanced by prompt payment and the Administrator, in conjunction with the Investment Manager, ensures all payments are processed within the contractual terms agreed with individual suppliers.

Approval

This Corporate Governance Report was approved by the Board on 14 October 2024.

On behalf of the Board:

Will Whitehorn

Chair

 October 2024

Audit Committee Report

Angela Lane

I am pleased to present my report as Chair of the Audit Committee. All Board members are also members of the Committee.

The Committee members have considerable business and financial experience. In particular, I am a Fellow of the Institute of Chartered Accountants in England and Wales. The AIC Code permits the Chair of the Board to be a member of the Committee and the Board believes that Will Whitehorn's SpaceTech industry experience and knowledge is a significant benefit to the Committee. The Board considers that the membership of the Committee as a whole has sufficient recent and relevant sector and financial experience to discharge the responsibilities of the Committee All members of the Committee are independent of the Company's Auditor, Investment Manager and Administrator.

The role of the Committee is to assist the Board in protecting shareholders' interests through fair, balanced and understandable financial reporting, ensuring effective internal controls and maintaining an appropriate relationship with the Company's Auditor. The Committee operates to a forward-planned agenda linked to the Company's financial calendar. The Committee meets eight times a year (four valuation meetings and four meetings to, amongst other matters, approve the quarterly NAVs) and at such other times as the Committee Chair shall require.

Representatives of the Investment Manager and Administrator attend Committee meetings and the Committee Chair may invite other external specialists as and when deemed appropriate. The Auditor attends the Committee meeting at which the Annual Report is considered and such other meetings as may be agreed with the Committee Chair. At least once a year the Committee meets with the Auditor without any representative of the Investment Manager or Administrator being present.

The Committee's authority and duties are clearly defined in its written terms of reference which are available on the Company's website (https://investors.seraphim.vc/). The terms of reference include all matters indicated by the FCA's Disclosure Guidance and Transparency Rule 7.1, the AIC Code and the UK Code. The terms of reference are reviewed at least annually.

Principal Activities

The Committee met eight times during the year and two times in the subsequent period to the date of this Report. In addition, there was ongoing liaison and discussion between the Auditor (BDO LLP), Investment Manager, Administrator and me with regard to the audit approach and progress and other matters pertinent to the Committee.

The main matters reviewed and discussed at its meetings included:

·   the Investment Manager's valuation approach and the quarterly valuations of the Company's investments prepared by the Investment Manager;

·   SSIT's key risks, including emerging risks, and its risk matrix;

·   the adequacy and effectiveness of the Company's risk management and internal control systems;

·   SSIT's costs budget and costs incurred relative to budget;

·   SSIT's ability to continue as a going concern and of its longer-term viability;

·   SSIT's periodic financial statements, including accounting policies;

·   the format and content of the Annual and Interim Reports, associated results announcements and related matters;

·   whether there is a need for an internal audit function;

·   the Financial Reporting Council's latest Annual Review of Audit Quality  Report and its Audit Quality Inspection and Supervision Report on BDO LLP;

·   the Auditor's independence, fee and terms of engagement; and

·   the audit plan of the Auditor and its implementation.

Significant Areas of Judgement

The most significant risk of misstatement of the Company's financial statements relates to the valuations of SSIT's private company investments, which are held at fair value through profit or loss and represent a significant proportion of the Company's net assets (83.3% as at 30 June 2024), as their valuations the use of estimates, assumptions and judgements. Whilst the Administrator calculates the NAV, the most significant input to calculating the NAV is the valuations of the Company's investments, which are prepared by the Investment Manager. Accordingly, there is also an inherent risk of management override as the Investment Manager's performance fee is calculated based on NAV (see note 4 to the financial statements below for details of the performance fee). Valuations are subject to review by the Committee and approval by the Board.

The Company's private company investments are predominantly early or growth stage companies. Valuations are prepared in accordance with the IPEV Valuation Guidelines and the Investment Manager's valuation policy, which is formally reviewed by the Audit Committee on at least an annual basis and is approved by the Board. The Investment Manager's Report approach to valuation of investments is outlined in its Report below and notes 2 and 8 to the financial statements below respectively.

On a quarterly basis, the Investment Manager provides a detailed analysis of the proposed valuations of the Company's investments with supporting materials. These are initially reviewed and discussed in detail by the Committee at a valuation meeting and the Committee, as necessary, challenges the analysis and supporting materials, including the methodology and integrity of the valuations, and may request additional information. The final proposed valuations are then considered by the Committee at its meeting to approve the quarterly NAV. Once the Committee has satisfied itself that the key estimates, assumptions and judgements used in the valuations are appropriate and that the investments have been fairly valued, it recommends the valuations for approval by the Board.

The Auditor has explained the results of its audit work on valuations in its Report below. There were no adjustments proposed that were material in the context of this Annual Report as a whole.

Risk Management and Internal Controls

Under the AIC Code, the Board is required to establish procedures to manage risk, oversee the internal control framework and determine the nature and extent of the principal risks the Company is willing to take in order to achieve its long-term strategic objectives. A principal role of the Committee is to assist the Board in this regard. Details of the Company's risk management and internal controls framework are set out under 'Principal Risks and Uncertainties' below. The Company's principal and emerging risks, together with details of how the Board seeks to manage and mitigate them, are also set out under 'Risk and Risk Management' below. The Committee continued to monitor the effectiveness of the Company's risk management and internal controls framework during the year, making changes as required.

The AIC Code requires the Board to review the effectiveness of the Company's risk management and internal controls systems  at least annually. At its October 2024 meeting, the Committee carried out an annual assessment of the Company's risk management and internal control systems for the year ended 30 June 2024 and took into account events subsequent to the year end. No significant weaknesses in the systems were identified and the Committee concluded that they were operating effectively and as expected.

Financial Reporting

The primary role of the Committee in relation to financial reporting is to review, with the Administrator, Investment Manager and, in the case of the Annual Report, Auditor, and report to the Board on the integrity of the financial statements and the appropriateness of the Annual or Interim Report, as appropriate, concentrating on, amongst other matters:

·   the quality and acceptability of accounting policies and practices;

·   the clarity of the disclosures and compliance with financial reporting standards and relevant financial and governance reporting requirements;

·   material areas in which significant judgements are applied or where there have been discussions with the Auditor, including the valuation of unlisted investments and going concern and viability statements;

·   the Company's longer-term viability;

·   whether the strategic report in the Annual Report includes a fair review of the development and performance of the business and financial position of the Company, together with a description of the principal and emerging risks and uncertainties that it faces; and

·   whether the Annual Report, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's position and performance, business model and strategy.

To aid its review, the Committee considers reports from the Administrator and Investment Manager and, in relation to the Annual Report, the report from the Auditor on the outcome of its annual audit. Information on the assessment of SSIT's longer-term viability is set out in the Strategic Report.

Having completed a comprehensive review of this Annual Report and made enquiries of the various parties involved in its preparation, the Committee concluded that this Annual Report, taken as a whole, is fair, balanced and understandable and provides the necessary information for shareholders to assess the Company's financial position, performance, business model and strategy. The Committee reported its conclusion to the Board.

Internal Audit

The Committee considers at least once a year whether there is a need for an internal audit function. Currently, the Committee does not consider there to be a need for an internal audit function on the basis that the Company has no employees and all outsourced functions are with parties who have their own internal controls and procedures. The Management Engagement Committee regularly reviews the performance of the Investment Manager, Administrator and other key service providers and their risk and control processes.

Auditor

BDO LLP was appointed as the Company's Auditor following its incorporation. The reappointment of the Auditor is subject to annual shareholder approval at the AGM. There are no contractual obligations restricting the choice of Auditor and the Company will put the audit services contract out to tender at least every 10 years. In accordance with professional guidelines, the Company's statutory auditor will be rotated at least every five years. The current statutory auditor, Mr Wieder, has completed his third year in the role.

To form a view on audit quality and the effectiveness of the external audit process, the Committee reviewed and considered:

·   the Auditor's fulfilment of the agreed audit plan and variations from it;

·   discussions or reports highlighting the major issues that arose during the course of the audit;

·   based on the Committee's own observations and interactions with the Auditor and feedback from the Administrator and Investment Manager, the performance of the audit team, including:

- the audit team's understanding of the Company's business and activities;

- the level of diligence, professional scepticism and challenge offered by the audit team;

- the technical competence, skills, experience and overall quality of the audit team;

- the timeliness of delivering the tasks required for the audit and reporting to the Committee;

- the overall quality of the service; and

- the overall robustness of the audit.

Following this review, the Audit Committee was satisfied that BDO LLP had carried out its duties in a diligent and professional manner and provided a high level of service.

The Committee monitors the Auditor's independence through three aspects of its work:

·   its policy regulating the non-audit services that may be provided by the Auditor to the Company;

·   assessing the appropriateness of the fees paid to the Auditor for all work undertaken by it; and

·   reviewing the information and assurances provided by the Auditor on its compliance with the relevant ethical standards.

Details of the audit fees paid to BDO LLP in respect of the year under review and the prior year are set out in note 5 to the financial statements below . During the last three financial years, BDO LLP was paid non-audit fees of £210k (including VAT) in relation to share issue and valuation work completed before the IPO. Notwithstanding such non-audit services, the Committee considered BDO LLP to be independent of the Company and that the provision of such services was not a threat to BDO LLP's objectivity and independence.

BDO LLP confirmed that all its partners and staff involved with the audit were independent of any links to the Company and that these individuals had complied with BDO LLP's ethics and independence policies and procedures which are fully consistent with the Financial Reporting Council's Ethical Standards.

Having satisfied itself as to the effectiveness of the audit process and independence of BDO LLP as the Company's Auditor, the Committee recommended to the Board that BDO LLP be reappointed as Auditor for the year ending 30 June 2024. Accordingly, a resolution proposing the reappointment of BDO LLP as the Auditor will be put to shareholders at the 2024 AGM.

The Committee will continue to monitor the performance of the Auditor on an annual basis and will consider its independence and objectivity, taking account of appropriate guidelines. In addition, the Committee Chair will continue to maintain regular contact with the lead audit partner outside the formal Committee meeting schedule, not only to discuss formal agenda items for upcoming meetings, but also to review any other significant matters.

Committee Evaluation

The Audit Committee's composition and activities are reviewed annually as part of the Board's annual performance evaluation undertaken by the Remuneration and Nomination Committee (see the Remuneration and Nomination Committee Report below for further information). Having completed the annual evaluation process in May 2024, the Remuneration and Nomination Committee concluded that the Audit Committee had the right balance of membership in terms of breadth of professional skills, experience and knowledge relevant to the Company's structure and strategy and was operating effectively with the appropriate level of diligence and challenge.

Approval

This Audit Committee Report was approved on 14 October 2024.

On behalf of the Committee:

Angela Lane

Audit Committee Chair

14 October 2024

Management Engagement Committee Report

Christina McComb

I am pleased to present my report as Chair of the Management Engagement Committee. All Board members are also members of the Committee.

The Committee's authority and duties are clearly defined in its written terms of reference which are available on the Company's website (https://investors.seraphim.vc/). The terms of reference are reviewed at least annually.

The Committee meets once a year and at such other times as the Committee Chair shall require. It met once during the year.

Principal Activities During the Year

Evaluation of the Investment Manager

The performance of the Investment Manager is considered at every Board meeting, with a formal evaluation by the Committee at least once each year. To assist in ongoing monitoring, the Board receives detailed reports and views from the Investment Manager on the Company's investment strategy, investment portfolio and pipeline (including associated risks) and investment performance.

The Committee met in May 2024 for the purpose of the formal annual evaluation of the Investment Manager's performance and to review the terms of the Investment Management Agreement (details of which are included under 'Investment Manager' below and in note 4 to the financial statements below), including the fee provisions. The Committee reviewed a detailed questionnaire completed by the Investment Manager, which included sections on the Investment Manager's systems, controls and policies. The results of the detailed questionnaire completed by the Directors and the Investment Manager in connection with the Board evaluation, to the extent that they were relevant to the Investment Manager evaluation, were also reviewed. Other factors reviewed included:

·   depth, quality and continuity of the Investment Manager's team responsible for SSIT;

·   investment results achieved to date;

·   the Investment Manager's engagement with the Board, investors and other key stakeholders;

·   the Investment Manager's ongoing commitment to promoting the Company;

·   the Investment Manager's compliance with contractual arrangements and duties, including compliance with SSIT's investment policy;

·   the methodology and level of the management fees, and where relevant the performance fees(see note 4 to the financial statements below for details) and the other terms of the Investment Management Agreement, having regard to those of comparable listed investment companies; and

·   the Investment Manager's culture and its strategy and goals for developing its business.

Following its review, the Committee concluded that the Investment Manager was performing well against the requirements set by the Board and that it was satisfied, in all material respects, with the services provided by, performance of and support from the Investment Manager and also with the interaction between the Board and the Investment Manager.

The Committee concluded that, in its opinion, the continuing appointment of the Investment Manager on the terms agreed was in the best interests of shareholders as a whole and recommended this to the Board. The Board agreed with the Committee's recommendation and approved the continuing appointment of the Investment Manager on the terms agreed.

Evaluation of other key service providers

The performance of the Company's other key service providers is monitored by the Board on an ongoing basis and formally evaluated by the Committee at least once a year, with a key focus on the Administrator and Company Secretary.

At its meeting in May 2024, the Committee undertook the formal annual evaluation of the other key service providers' performance and reviewed their respective remuneration. The Committee reviewed a detailed questionnaire completed by the other key service providers, which included sections on their systems, controls and policies. In most instances, relationships with the other key service providers are managed by the Investment Manager and/or Administrator and Company Secretary on behalf of the Board and the Committee considered feedback received from them regarding the levels of service provided by, and relationships with, the other key service providers.

The Committee was satisfied, in all material respects, with the levels of service provided by the other key service providers. The Committee concluded that, in its opinion, the continuing appointments of the other key service providers on the terms agreed remained appropriate and in the best interests of the Company and recommended this to the Board. The Board agreed with the Committee's recommendations and approved the continuing appointments of the other key service provider on the terms agreed.

Committee Evaluation

The Management Engagement Committee's composition and activities are reviewed as part of the Board's annual  performance evaluation undertaken by the Remuneration and Nomination Committee (see the Remuneration and Nomination Committee Report below for further information). Having completed the annual evaluation process in May 2024, the Remuneration and Nomination concluded that the Management Engagement Committee had the right balance of membership and was discharging its duties effectively.

Approval

This Management Engagement Committee Report was approved on 14 October 2024.

On behalf of the Committee:

Christina McComb

Management Engagement Committee Chair

14 October 2024