REG - Schiehallion Fund Schiehallion - MNTN Schiehallion Fund - Annual Financial Report
08/04/2024 16:15
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240408:nRSH7350Ja&default-theme=true
RNS Number : 7350J Schiehallion Fund Limited (The) 08 April 2024
The Schiehallion Fund Limited
Legal Entity Identifier: 213800NQOLJA1JCWXQ56
Regulated Information Classification: Annual Financial and Audit Reports
Annual Report and Financial Statements
Further to the preliminary statement of audited annual results announced to
the Stock Exchange on 4 April 2024, The Schiehallion Fund Limited
("Schiehallion" or "the Company") announces that the Company's Annual Report
and Financial Statements for the year ended 31 January 2024, including the
Notice of Annual General Meeting, has today been posted to shareholders and
submitted electronically to the National Storage Mechanism where it will
shortly be available for inspection at
data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) .
It is also available on the Schiehallion page of the Baillie Gifford website
at: schiehallionfund.com (http://www.schiehallionfund.com/) (as is the
preliminary statement of audited annual results announced by the Company on 4
April 2024).
Proposed Amendment to Articles of Incorporation
A special resolution is being proposed at the AGM, Resolution 13, which seeks
shareholder approval for the
adoption of new Articles of Incorporation (the 'New Articles'). The proposed
amendments being introduced in the New Articles relate to (i) clarifying the
Company's general authority to acquire its own shares and (ii) increasing the
cap on the aggregate fees paid to Directors from £360,000 per annum to
£430,000 per annum.
A copy of the existing Articles and the proposed amended Articles are
available on the Company page of the Baillie Gifford website at:
Schiehallion Fund | Baillie Gifford | Institutional Investors | Baillie
Gifford
(https://www.bailliegifford.com/en/uk/institutional-investor/funds/schiehallion-fund/#Documents)
The Company's Annual General Meeting (AGM) is being convened at 3pm on Friday,
10 May, at the offices of at the offices Herbert Smith Freehills, Exchange
House, Primrose Street, London EC2A 2EG.
The Board encourages all shareholders to submit proxy voting forms, appointing
the chairperson of the AGM, as soon as possible and, in any event, by no later
than 3pm on 8 May 2024.
We would encourage shareholders to monitor the Company's website at
schiehallionfund.com. Should shareholders have questions for the Board or the
Investment Manager or any queries as to how to vote, they are welcome as
always to submit them by email to adgg-aafa-f@alterdomus.com or call Alter
Domus (Guernsey) Limited on +44 (0) 1481 742 250.
Alter Domus (Guernsey) Limited may record your call.
If you or, if appointed, your proxy wish to attend the Annual General Meeting
electronically you, or your proxy, will have the same right to attend, be
counted in the quorum, participate in the business of the Annual General
Meeting, speak and vote as if you, or your proxy, had attended the meeting in
person. Details of how to attend the Annual General Meeting electronically can
be obtained from Alter Domus (Guernsey) Limited on the contact details
provided above.
Responsibility Statement of the Schiehallion Directors in respect of the
Annual Report and Financial Statements
The Schiehallion Fund Limited Directors confirm that, to the best of their
knowledge:
¾ the Financial Statements set out in the Annual Report and Financial
Statements, prepared in accordance with the applicable set of accounting
standards, give a true and fair view of the assets, liabilities, financial
position and profit or loss of the Company; and
¾ the Strategic Report set out in the Annual Report and Financial
Statements includes a fair review of the development and performance of the
business and the position of the issuer, together with a description of the
principal risks and uncertainties they face.
The Directors consider the Annual Report and Financial Statements, taken as a
whole, is fair, balanced and understandable and provides the information
necessary for shareholders to assess the Company's position and performance,
business model and strategy.
Principal and Emerging Risks relating to the Company
As explained on pages 64 and 65 of the Annual Report and Financial Statements,
there is a process for identifying, evaluating and managing the risks,
including emerging risks, faced by the Company on a regular basis. The
Directors have carried out a robust assessment of the principal and emerging
risks facing the Company, including those that would threaten its business
model, future performance, solvency or liquidity. A description of these risks
and how they are being managed or mitigated is set out in the table below.
The Board considers the ongoing coronavirus (Covid-19) pandemic to be a factor
which continues to exacerbate existing risks, and its impact is considered
within the relevant risks.
How the risk is managed? Current assessment of risk
What is the risk?
Investment and Strategic Risk
Liquidity of Investments The Company's investments are By diversification of the portfolio, in accordance with the Company's Stable: The Company has
investment limits and risk diversification policies.
predominantly in private investee companies or companies which have recently not seen any significant
completed an IPO. Such investments may not be
impact on underlying liquidity
liquid or may have restrictions on sale or transfer of shares. This may limit
the Company's ability to realise investments at short notice or at all. of investments, however,
the economic climate, in
a continuation of trends
observed in the previous
year, has continued to
depress IPO activity.
Market, Economic, Political and Environmental Risks From time to time a large The Board assesses this risk Increasing: This risk is
proportion of the total value of by considering, at each meeting, metrics which have contributed to performance seen as increasing due
as well as discussion with the portfolio managers on specific conditions which
the Company's portfolio could the underlying investee companies face. This risk is also managed by the to increased volatility as
Company's investment diversification policy.
be concentrated in a limited a result of the ongoing
number of investee companies, Russian invasion of Ukraine
which could be adversely and conflict in Gaza, high
affected by an unexpected energy prices, inflation and
change in their markets, by interest rates, as well as the
governmental intervention or global reach of the increased political tensions between the US and China.
by a reputational issue. This
could have a material impact
on the overall value of the
Company's portfolio and
consequential adverse effects
on the Company's share price.
How the risk is managed? Current assessment of risk
What is the risk?
Investment and Strategic Risk (continued)
Valuation Risk The Company invests in late The Investment Manager has a Stable: This risk is seen as
stage private businesses which robust valuation methodology, stable. In periods of market
are valued in accordance with which is applied consistently. The Investment Manager's valuation process volatility the Private Company
revalues each of the private company investments every 3 months and additional
International Private Equity valuations are carried out in response to trigger events to ensure the Valuations Group will perform
investments are carried at fair value. The valuation process is overseen by
and Venture Capital Valuation the Private Companies Valuations Group at Baillie Gifford which is independent a trigger analyses and,
from the portfolio
('IPEV') Guidelines using
if appropriate, revalue the
managers and which takes advice from an independent third party (S&P
appropriate valuation methods. Global). The valuations are subject to review and challenge by the Board every affected investments,
6 months and are subject to scrutiny annually by the external Auditor.
Such methods include an as described in the report
element of judgement which on page 28 of the Annual report and Financial Statements.
may lead to a material
mis-statement of the valuation
and consequently of the
Company's net asset value.
Investment Strategy Risk Pursuing an investment strategy The Board regularly reviews Increasing: The risk is
to fulfil the Company's objective and monitors the Company's seen as increasing as the
which the market perceives to investment policy and strategy, market's appetite for direct
be unattractive or inappropriate, the investment portfolio and or indirect investment in
or ineffective implementation its performance, the level of growth stocks is reduced due
of the Company's investment discount/premium to net asset to ongoing macroeconomic
strategy, may lead to reduced value at which the shares trade and geopolitical concerns.
returns for shareholders and, as and movements in the share
a result, decreased demand for register. A strategy meeting is
the Company's shares. This may also held annually. In addition,
lead to the Company's shares the Investment Manager
trading at a widening discount keeps in close contact with
to their net asset value. key shareholders and provide
regular feedback to the Board.
Discount Risk The discount/premium at which The Board monitors the level of Increasing: Although the
the Company's shares trade discount/premium at each Board meeting. The Company has authorities in place discount narrowed following
to buy back or issue shares, when deemed to be in the best interest of the
relative to its net asset value Company and its shareholders. the announcement that the
can change. Such an imbalance Company would buy back
can diminish the attractiveness shares, the risk is considered
of the Company's shares to to be increasing as overall
existing investors and lead the discount widened
to a lack of liquidity in the significantly over the year.
Company's share trading.
Climate and governance risk Perceived problems on This is mitigated by the Stable:
environmental, social and Investment Manager's ESG The Investment Manager continue to employ strong ESG stewardship and
governance ('ESG') matters in stewardship and engagement engagement policies.
an investee company could lead policies, which are integrated
to that company's shares being into the investment process, as
less attractive to investors, well as the extensive upfront and ongoing due diligence which the Investment
Manager undertakes on each investee company. This includes the risk inherent
adversely affecting its share in climate change (see page 66 of the Annual Report and Financial Statements).
price, in addition to potential
valuation issues arising from
any direct impact of the
failure to address the ESG
weakness on the operations or
management of the investee
company (for example in the
event of an industrial accident
or spillage). Repeated failure
by the Investment Manager
to identify ESG weaknesses
in investee companies could
lead to the Company's own
shares being less attractive to
investors, adversely affecting
its own share price. In addition,
the valuation of investments
could be impacted by climate
change due to climate-related
operational challenges, changes
in end demand or failure to
identify a pathway to Net Zero.
External Risks
Political and Associated Global political changes result Political developments and Increasing:
Economic Risk in policy changes in areas in other social trends are closely This risk is increasing as governments
which the Company invests monitored by the Board and and consumers around the world continue to assess the impact of the ongoing
Russia-Ukraine war, including
or may invest may have are regularly discussed at
sanctions applied in response, heightened tensions between the US and China,
practical consequences for the Board meetings. the conflict in Gaza and the impact of high inflation and interest rates.
Company and impact financial
performance.
How the risk is managed? Current assessment of risk
What is the risk?
External Risks (continued)
Legal and Regulatory Risk Changes to the regulatory To mitigate this risk, Baillie Stable:
environment could negatively Gifford's Business Risk, All control procedures working effectively. There have been no material
regulatory changes that have occurred during the year.
impact the Company. Failure to Internal Audit and Compliance
comply with applicable legal, Departments provide regular
regulatory and tax requirements reports to the Audit Committee
could lead to suspension of the on Baillie Gifford's monitoring
Company's Stock Exchange programmes. The Administrator
listing, financial penalties, a provides regular compliance
qualified Audit Report or the reports to the Audit Committee
Company being subject to tax to confirm the relevant Guernsey submissions are made to protect the legal and
tax status of the Company. Major regulatory change could impose
on capital gains. disproportionate compliance burdens on the Company. In such circumstances
representation is
made to ensure that the special
circumstances of investment
companies are recognised.
Shareholder documents and
announcements, including the
Company's published Interim
and Annual Report and Financial Statements, are subject to stringent review
processes and procedures are in place to ensure adherence to the Transparency
Directive and the Market Abuse Directive with reference to inside information.
Operational Risks
Performance and Reliance on Third Party Service Providers In common with most other The Audit Committee receives Stable: All control procedures
investment companies the six monthly reports from are deemed to be working
Company has no direct the Investment Manager's effectively. Portfolio
employees and relies entirely Business Risk Department on management and all
for its operations on third party their monitoring programme regulatory and administrative
service providers. Failure of the of internal controls. The Audit tasks have continued
Investment Manager's systems Committee also receives ISAE uninterrupted during the year.
or those of another service 3402 or equivalent reports on the Investment Manager and other service
providers. These reports are reviewed by Baillie Gifford's Business Risk
provider, such as the Custodian Department and a summary of the key points is reported to the Audit Committee
and any concerns are investigated.
and Depositary, could lead to
an inability to accurately report
or lead to a misappropriation
of assets.
Cyber Security Threats Errors, fraud or control failures The Audit Committee receives Increasing: This risk is
by the Company's key service confirmation that key service seen as increasing due to
providers or loss of data providers have appropriate cyber/ IT policies to ensure that controls are in recent indications that the
place including business continuity and disaster recovery arrangements.
through increasing cyber continuation of geopolitical
threats or business continuity tensions could lead to more
interruptions could damage cyber attacks. Emerging
the Company's reputation or technologies, including AI,
investors' interests or result could potentially increase
in losses. information security risks.
In addition, service providers
operate a hybrid approach
of remote and office working,
thereby increasing the
potential of a cyber security
threat.
Key Professionals Loss of key professionals, particularly in relation to the Investment Manager The Board reviews the Investment Manager's performance annually as well as the Stable:
could impact the Company's ability to implement its investment strategy. resources of the Investment Manager for attracting and retaining talent.
All procedures are satisfactory.
Emerging Risks
As explained on pages 39 to 43 of the Annual Report and Financial Statements
the Board has regular discussions on principal risks and uncertainties,
including any risks which are not an immediate threat but could arise in the
longer term. The Board
considers that the key emerging risks arise from two areas; the proliferation
of AI and the exposure
of the portfolio to further geopolitical and macroeconomic headwinds as
described below:
How the risk is managed? Current assessment of risk
What is the risk?
Investment and Strategic Risk (continued)
Emerging risks The ever-increasing capacity The Investment Manager has Increasing. This risk is seen
and wide adoption of AI tools, established a group to monitor as increasing due to the rapid
in daily life and businesses the risks associated with emerging technologies such as AI. The Audit adoption and development
Committee receives confirmation that key service providers have
globally. The proliferation of this
of AI tools.
appropriate cyber/IT policies to
technology increases the risk
ensure that controls are in place
of both its malicious use such
including business continuity and disaster recovery arrangements.
as cyberattacks and fraud as
well as unintentional negative
effects given the novel nature
of these tools. There are also
considerations regarding the
societal effects of AI as it
develops and becomes adopted
more broadly.
The global reach of the The risks are mitigated by the Increasing. This risk is
investment portfolio and its Investment Manager's close links to the investee companies and their ability seen as increasing due
to ask questions on contingency plans. The Investment Manager believes the
exposure to external and impact of such events may be to slow growth rather than to invalidate the to escalating geopolitical
investment rationale.
emerging threats such as an
tensions globally.
escalation of the Russia-Ukraine
The Investment Manager monitors the risks emerging in certain geographies and
war, broadening conflict in the have established a group to manage the response to any future events that
might result in heightened levels of market volatility. Regular exercises are
Middle East and heightened carried out to test the Investment Manager's response to various scenarios.
cyber risk. An escalation in
tensions between the US and
China may lead to sanctions
being imposed on China with
the potential for adversely
affecting the Company's
Chinese investments. Higher
inflation, interest rates and
energy costs could add
pressure to the companies in
the investment portfolio.
Baillie Gifford & Co Limited
08 April 2024
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END ACSIPMATMTBMBBIRecent news on Schiehallion Fund
See all newsREG - Schiehallion Fund Schiehallion - MNTN - Net Asset Value(s)
AnnouncementREG - Schiehallion Fund Schiehallion - MNTN - Total Voting Rights
AnnouncementREG - Schiehallion Fund Schiehallion - MNTN - Block listing Interim Review
AnnouncementREG - Schiehallion Fund Schiehallion - MNTN - Transaction in Own Shares
AnnouncementREG - Schiehallion Fund Schiehallion - MNTN - Net Asset Value(s)
Announcement