Supply@ME Capital : Annual Report and Consolidated Financial Statements for the Year Ended 31 December 2020

Registration number: 03936915

Supply@ME Capital plc

Annual Report and Consolidated Financial Statements

for the Year Ended 31 December 2020

Supply@ME Capital plc

Contents

Company Information

Chief Executive's Review and Chairman's Statement

Strategic Report

Directors

Directors' Report

Remuneration Report

Corporate Governance

Independent Auditor's Report

Consolidated Statement of Comprehensive Income

Consolidated Statement of Financial Position

Consolidated Statement of Cash Flows

Consolidated Statement of Changes in Equity

Notes to the Consolidated Financial Statements

Company Statement of Financial Position

Company Statement of Changes in Equity

Notes to the Company Financial Statements

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	Supply@ME Capital plc
	Company Information
Directors	Enrico Camerinelli
	Susanne Chishti
	Dominic White
	Alessandro Zamboni
Secretary	MSP Corporate Services Limited
	27/28 Eastcastle Street
	London
	W1W 8DH
Company number	03936915
Registered office	27/28 Eastcastle Street
	London
	W1W 8DH
Auditor	Crowe UK LLP
	55 Ludgate Hill
	London
	EC4M 7JW
Solicitors	Charles Russell Speechlys LLP
	5 Fleet Place
	London
	EC4M 7RD
Bankers	World First UK Ltd.
	Millbank Tower
	21-24 Millbank
	London
	SW1P 4QP
Registrars	Neville Registrars Limited
	Neville House
	Southampton
	SO14 2JF
Public Relations	Cicero/AMO
	3 Pancras Square
	London
	N1C 4AG
Accountants	Azets
	45 King William Street
	London
	EC4R 9AN
Investor Relations	Walbrook PR Ltd
	4 Lombard Street
	London
	EC3V 9HD
Website	www.supplymecapital.com

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Supply@ME Capital plc

Chief Executive's Review and Chairman's Statement

We are pleased to report to you on the Group's activities in the year to 31 December 2020, and subsequent developments to date.

These financial statements represent the Group's first period of trading on the Main Market of the Stock Exchange since the acquisition of Supply@ME S.r.l..

Business overview

Global landscape: a huge addressable target market

Inventory monetisation facilities can play a key role in addressing the financing needs of the broadly defined global supply chain market. According to "The 2020 McKinsey Global Payments Report", insights into that market reveal:

• $17 trillion, as potential market for supply-chain finance.
• ~80% of eligible assets that do not benefit from better working capital financing. The remaining one-fifth of assets are often inefficiently financed.
• $14 trillion, managed directly (not financed).
• $ 2.5 trillion, currently addressed by seller-side finance solutions. In this regard, inventory financing represented, in the past year, 10% of the Seller-side financial solutions, while the receivables financing segment (including factoring, invoice discounting and receivables finance in all its forms), remains the largest segment with an estimated 65% market share.
• $ 0.5 trillion, addressed through buyer-led solutions.
• $1.5 trillion as the global gap in trade finance. In this regard, the overall trade finance market can be roughly differentiated into three segments, each with unique product dynamics:
  o Documentary business, which includes traditional off-balance-sheet trade finance instruments, such as letters of credit, international guarantees, and banks' payment obligations. These instruments are typically used to cover the two corporate parties against potential transaction risks (e.g., an exporter protecting against country-related risks of its importer's domestic market);
  o Seller-side finance, including two main financial instruments: factoring and invoice finance. These instruments address the financing needs of corporate sellers by advancing liquidity related to commercial transactions;
  o Buyer-side finance, which is typically aimed at large buyers and their suppliers. It covers the financing needs of suppliers originated by large buyers, like reverse factoring, where suppliers can access third-party financing for buyer-approved invoices, as well as dynamic discounting, where buyers pay suppliers early in exchange for discounts on the invoice. This has traditionally been a smaller and more fragmented market (roughly $500 billion of turnover financed), but is now growing at double-digit rates, driven by increasing interest and new offerings by players.

Seeing the wider opportunities related to the untapped supply chain finance market, the Company wants to play a key role in this space, gaining traction from its inventory monetisation services to provide a unique non-credit approach and covering both "in-transit" and warehoused goods.

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Supply@ME Capital plc

Chief Executive's Review and Chairman's Statement

Delivering a unique alternative facility for SMEs and Large Corporates - and a new asset class for investors

Supply@ME delivers an innovative platform ("Platform") for inventory monetisation that enables a wide range of manufacturing and trading customers to improve their working capital position by releasing capital from their inventory stock. The Platform matches the working capital needs of its customers, with capital invested through the Platform by its inventory investors ("Inventory Funders").

Investors in Supply@ME shares gain exposure to the fee income generated by the Platform from inventory monetisation. Inventory Funders subscribe financial instruments that are secured by inventory portfolios.

The highlight event for Supply@ME Capital Plc (LON:SYME - the Company or SYME) in the year to 31 December 2020 was the successful acquisition, via a reverse takeover, of Supply@ME S.r.l. together with a successful Placing and Main Market Listing on the London Stock Exchange on 23 March 2020. These were both key milestones that will enable the Group to develop and fulfil its ambition to become a leading platform for inventory monetisation (Supply@ME Capital plc changed its name from Abal Group plc on 30 March 2020).

The Company's purpose is to be the leading fintech inventory monetisation business enabling companies to optimise their working capital cycle through the release of capital from their inventory, in a time and price efficient way.

Its immediate strategy of creating a highly scalable global business is built on three key objectives:

• delivering a unique facility, via a digitised route, attracting and on-boarding its customers ("Client Companies"),
• developing a cutting-edge technology Platform that efficiently manages the Inventory Monetisation process, and
• implementing a repeatable, multi-channel funding strategy to diversify and scale-up its Inventory Funder investor base, allowing the asset management industry to diversify its portfolio by virtue of a real new asset class.

Building the fundamentals: milestones 2020 achieved towards the key objectives

2020 saw the groundwork laid for a number of business initiatives which have either been implemented or are close to fruition. The Company also strengthened its board and senior management team with the appointment of a Chief Financial Officer and several highly experienced individuals to key positions.

Looking at the business plan's strategic pillars, apart from the delay in delivering the first inventory monetisation in 2020, most of the other work streams planned are on-track or completed. Specifically:

• Client Company sourcing partnerships have been established in Italy, the UK, MENA and the US with 14 partners to deliver an ongoing stream of monetisation demand to the Platform;
• the technology Platform has been further developed and is now operational and ready to implement the first monetisation transaction
• the Company has in place a multi-channel global funding strategy:

• Middle East: Shariah structure approval
• Italy: strategic agreement with the institutional asset manager Quadrivio Group (and its Industry 4.0 fund) who are working on a European bank acquisition. In parallel, establishing a Self-Funding model in order to allow other banks to promote the inventory monetisation service to their customer base
• Italy and UK: progress with the Italian and UK securitisation program managed by Storm Harbour
• USA: partnership with The Trade Advisory aimed at delivering the inventory monetisation service gaining traction from Mr Anthony Brown's ecosystem (Funders, Client companies, warehouse service providers etc.).

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