Posting of Annual Report and Notice of AGM

Risk Description

Key Mitigants

Business Model

Direction of change:

As a result of the Company's listing on the Main Market during 2015, the level of business model risk has increased given the raised profile and related public scrutiny.

Acquisition

There is a risk that acquisitions made by the Group do not achieve intended objectives, give rise to ongoing or previously unidentified liabilities or result in unintended consequences, including execution risk.

The Group's strategy to deliver further growth through targeted acquisitions naturally increases acquisition activity and therefore increases this risk.

· Risk appetite set by the Board

· Governance and challenge from independent Non-Executive Directors

· Robust due diligence process, incorporating independent advice, prior to recommendations to the Board

· Integration strategy in place prior to acquisition

Strategy

The risk that the business model responds inadequately to changing market conditions or fails to meet its strategic objectives, such that sustainable growth, market share or profitability is affected.

This is particularly the case due to ongoing changes within the outsourced administration industry, whereby asset classes are evolving and new asset classes are being created.

· Strategy regularly reviewed and challenged by Executive Committee and Board of Directors

· Significant resource devoted to communicate strategy effectively

· Strategy drives annual business planning process and performance based targets

· Executive Operational Risk Committee ensures matters escalated are aligned with strategy and risk appetite

Competitors

Failure to innovate and invest in appropriate systems increases the risk that we fall behind key competitors and do not meet the expectations of clients and other stakeholders.

Digital developments and social media are rapidly evolving meaning that we must keep pace with the expectations of clients, especially with our strategic objective of delivering services to institutional clients.

· Functional budgets for digital / systems investment

· COO responsible for monitoring and proposing investment in new systems

· Board of Directors oversight of business systems

Vicarious

It is in the nature of providing fiduciary and outsourced administration services that independent actions or inactions of our clients or counterparties can affect the reputation of the Group and may expose the Group to litigation.

· Robust client acceptance processes

· Money laundering procedures

· Conflicts of interest procedure and central register

Operational

Direction of change:

There has been rapid growth across divisions and jurisdictions in the year which, combined with the Group being listed in the year, has placed additional pressures on the operational environment.

Business Change

The risk that the planning and implementation of change is ineffective or fails to deliver desired outcomes or results in resources being stretched to the detriment of business as usual activities.

· In-house change team reporting to Chief Operating Officer provides strong project management capability

· Documented business plans and IT strategy

· Over-arching governance of business critical programmes provided by Executive and Board

Business Continuity

The risk that an internal or external event results in either failure or detriment to core business processes or services.

· Documented business continuity plans and testing

· Continuous monitoring of IT systems availability

· Dual data centre

· Off-site continuity suite

· Ability to move or manage between jurisdictional offices

Data Security

The risk of a security breach (including cyber attacks) leading to loss of confidentiality, integrity or availability of data.

· Defined IT security procedures

· Review of procedures and controls as part of the annual ISAE 3402 Type II report

· System access controls and encryption

· Physical security at all locations

· Training and employee awareness

Process

Risk that policies and procedures may not be in line with current regulatory, legal, client and other stakeholder expectations or are inefficient leading to poor client service and employee frustration.

· Documented procedures and controls with ongoing training

· Allocated responsibility for continual maintenance, enhancement and training of policies and procedures

· Compliance monitoring programme

People

Direction of change:

The level of people risk faced by the Group has increased in the year due to rapid growth leading to additional resources being required across the Group.

Staff Resourcing

Failure to attract, retain, develop and motivate the best people with the right capabilities across all levels and jurisdictions.

· Recruitment strategy, succession planning in place and employee value proposition

· Established Remuneration Committee

· Set objectives over talent planning and people development

· Regular remuneration benchmarking

· Established ACCA, ICAEW and ICSA training schemes

Regulatory

Direction of change:

Whilst the environment is constantly evolving, the overall level of political/regulatory risk faced across the Group has not materially changed.

Political / Regulatory Change

Risk that Sanne's business model is materially impacted by legal, political or regulatory changes which restrict access to marketsor services.

· Product / diversification strategy reduces impact

· Jurisdictional oversight by Compliance

· Horizon scanning by Executive Operational Risk Committee for upcoming potential changes

· Strategy to ensure the business model remains flexible and responsive to change and is regularly reviewed

· Active dialogue with regulators, government and industry bodies

Financial

Direction of change:

There were no material changes to the level of financial risk faced by the Group.

There were no principal risks identified in this Category.

Sanne Group plc

Dan McKeon, Company Secretary

+44 (0) 1534 722 787