SEMI-ANNUAL REPORT. Period ended 30 June Finles Next Generation Fund I

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1 SEMI-ANNUAL REPORT Period ended 30 June 2017 Finles Next Generation Fund I

2 Table of contents General information... 3 Key figures... 4 Financial statements... 5 Balance sheet... 5 Profit and loss statement... 6 Cash flow statement... 7 Notes to the financial statements... 8 Other Information

3 General information Registered office Finles Next Generation Fund I Euclideslaan BS Utrecht The Netherlands Fund Manager Finles N.V. Euclideslaan BS Utrecht The Netherlands Legal Owner Holding SPV Stichting Finles Funds II Smallepad 30F 3811 MG Amersfoort Legal and Tax Counsel Deloitte Belastingadviseurs B.V. Orlyplein 50 P.O. Box HC Amsterdam The Netherlands Bank ABN AMRO Bank N.V. Gustav Mahlerlaan PP Amsterdam The Netherlands Depositary Darwin Depositary Services B.V. Barbara Strozzilaan HN Amsterdam The Netherlands Administrator Circle Investment Support Services B.V. Smallepad 30F 3811 MG Amersfoort The Netherlands 3

4 Key figures (all amounts in EUR) Total for the Fund Net Asset Value at 31 December 3,973,958 6,527,467 Outstanding participations at 31 December 6,183,792 6,146,128 Net Asset Value per Participation Performance of the Fund (39.12%) (0.99%) 4

5 Financial statements Balance sheet (prior to profit appropriation) (all amounts in EUR) A s s e t s Notes Investments 1 Equities 2,102,602 4,796,668 Loans 3,028,832 2,568,832 Total of investments 5,131,434 7,365,500 Intangible assets Deferred organisation costs 2 18,205 20,632 18,205 20,632 Receivables Other receivables 3 95,813 73,274 Total of receivables 95,813 73,274 Other assets Cash and cash equivalents 4 19,520 58,111 Total of other assets 19,520 58,111 Total assets 5,264,972 7,517,517 L i a b i l i t i e s Net asset value Net asset value of the Fund 3,973,958 6,527,467 Third party capital 217, ,551 Total net asset value 5, 6 4,191,331 6,876,018 Long term liabilities Loans 7 300, ,000 Total long term liabilities 300, ,000 Short term liabilities Loans 7 621, ,500 Payable for investments purchased - 12,800 Other liabilities 8 152, ,199 Total short term liabilities 773, ,499 Total liabilities 5,264,972 7,517,517 5

6 Profit and loss statement (all amounts in EUR) Notes Investment result Interest income 53,988 17,662 Management fee income 53,960 25,240 Total investment result 107,948 42,902 Revaluation of investments Unrealized results (2,694,066) - Total changes in value (2,694,066) - Operating expenses Management fee 9 66,718 35,011 Administration fees 10 7,527 4,809 Interest expenses 37,209 - Depositary fees 9,075 3,928 Brokerage fees and other transaction costs Legal fees 5,528 9,466 Directors fee 1,513 - Audit fees 11 6,938 4,235 Professional expenses - 10,825 Other expenses 2,830 1,214 Total operating expenses 137,575 69,566 Corporate income tax 12 (994) - Result for the period (2,724,687) (26,664) Result attributable to the Fund (2,593,509) (26,742) Third party result (131,178) 78 Result for the period (2,724,687) (26,664) 6

7 Cash flow statement (all amounts in EUR) Notes Cash flow from operating activities Purchases of investments (472,800) (6,880,500) Proceeds from sales of investments - - Management fee received 55,289 - Interest received 32,654 - Other income received - (40,597) Management fee paid (45,399) - Interest paid (33,566) - Corporate income tax paid (3,554) - Operating expenses paid (43,715) (307) Deposit to accounts SCN Funds (5,000) - Net cash flow from operating activities (516,091) (6,921,404) Cash flow from financing activities Proceeds from subscriptions to redeemable shares 40,000 6,941,251 Proceeds from loans 437,500 - Net cash flow from financing activities 477,500 6,941,251 Net cash flow for the period (38,591) 19,847 Cash and cash equivalents at the beginning of the period 58,111 - Cash and cash equivalents at the end of the period 4 19,520 19,847 7

8 Notes to the financial statements General information Finles Next Generation Fund I (The Fund ) is a fund for joint account ( fonds voor gemene rekening ) organised and established on April 7, 2016 (date of AFM approval) under the laws of The Netherlands and governed based on its Terms and Conditions. The Fund is a contractual Fund with a closed-end structure. An Investor will be able to redeem Participations when the underlying investments are disposed or when a capital distribution will be made by the underlying investments. Fund is governed by the Terms and Conditions of Management and Depositary. By entering into a Subscription Form, an Investor represents and warrants to have reviewed the Terms and Conditions of Management and Depositary and agrees to be bound thereby. An Investor is admitted to the Fund by the issuance of Participations by the Fund to the Investor. The Fund s investment activities are managed by the Fund Manager, with the administration delegated to Circle Investment Support Services B.V. The assets, rights and obligations of the Fund are held by the Holding SPV on behalf of the Fund. The Investors will invest in the Fund as participants ( participanten ) and will as such acquire Participations in the Fund. These financial statements consolidate SCN Fondsen III B.V. and the Fund. Accounting policies The financial statements are prepared in accordance with Part 9, Book 2 of the Dutch Civil Code and the Dutch Financial Supervision Act. The accounting principles of the Fund are summarized below. These accounting principles have all been applied consistently throughout the financial period and the preceding period. The semi-annual report has not been audited by an independent auditor. The length of reporting period is from 1 January 2017 through 30 June

9 Notes to the balance sheet 1. Investments The movement of the financial instruments is as follows (all amounts in EUR): (all amounts in EUR) Equities Opening balance 4,796,668 - Purchases - 4,206,668 Unrealized investment result (2,694,066) - Closing balance 2,102,602 4,206,668 Loans Opening balance 2,568,832 - Purchases 460,000 2,673,832 Closing balance 3,028,832 2,673, Deferred organisation costs The Fund has deferred the costs of setting up the organisation of the Fund. The total organisation costs amount to EUR 24,273 and these are expensed in a period of 60 months. At reporting date the deferred organisation costs amount to EUR 18, Other receivables (all amounts in EUR) Management fee receivable 33,996 35,325 Interest receivable 47,069 25,735 Current accounts SCN Funds 14,748 9,748 Prepaid corporate income tax - 2,466 Closing balance 95,813 73, Cash and cash equivalents At 30 June 2017 no restrictions on the use of cash and cash equivalents exist. 9

10 5. Net assets value Movement schedule of net asset value (all amounts in EUR) Net asset value Opening balance 6,855,386 - Transfer from SCN III - 6,592,745 Subscriptions 40,000 - Transfer to legal reserve for deferred organisation costs - (24,273) Transfer from legal reserve for deferred organisation costs 2,427 1,214 Result current period (2,724,687) (26,742) Closing balance 4,173,126 6,542,944 Legal reserve for deferred organisation costs Opening balance 20,632 24,273 Transfer to net asset value (2,427) (1,214) Closing balance 18,205 23,059 Total net assets value at reporting date 4,191,331 6,914,509 Third party capital 217, ,506 Total net assets value of the Fund at reporting date 3,973,958 6,566,003 Movement schedule of units (in number of units) Opening balance 6,146,128 - Transfer from SCN III - 6,136,782 Subscriptions 37,664 - Outstanding units at reporting date 6,183,792 6,136,782 10

11 6. Redeemable participations Participations are not listed on a regulated stock exchange nor does the intention exist to apply for such listing in the foreseeable future. No developed unregulated market for Participations exists and no party has been instructed by the Fund or the Fund Manager to maintain a market for Participations. Participations in the Fund can only be sold back to the Fund. Participations of the Fund cannot be transferred. The Redemption of Participations will only take place when underlying investments will be disposed or when capital distributions (like dividends) are made by the underlying investments. The Fund may also buy back Participations from its existing cash. The Fund Manager shall then on behalf of the Fund, subject to the provisions of the Terms and Conditions of Management and Depositary, repurchase Participations. Upon each distribution of a redemption, the Fund Manager shall notify the Participants of the amount and payment date of the redemption. The redemption price of a Participation is equal to the Net Asset Value per Participation which we will be calculated at the time of the disposal of the underlying investments. The Redemption Amount will normally be paid to the redeeming Participants within ten (10) Business Days after the release of the Net Asset Value of the applicable Redemption Date and when the proceeds from any disposal or any capital distribution have been received by the Fund, unless exceptional circumstances occur, in which case the consideration will be paid at the earliest possible Business Day thereafter. The Fund Manager may suspend the redemption of Participations in case: a) the determination of the Net Asset Value has been suspended; b) the payment of funds realized from the sale of Fund Assets cannot, at the opinion of the Fund Manager, be effected at normal rates of exchange; c) the sale of Fund Assets is otherwise restricted or suspended; d) a state of affairs exists which constitutes a state of emergency as a result of which the sale of Fund Assets would, in the sole opinion of the Fund Manager, not be practical or would negatively affect the rights of Investors; e) the Investor did not act in compliance with applicable legislation, the Subscription Form or the Terms and Conditions of Management and Depositary; or f) for whatever reason, the valuation of Fund Assets or Fund Obligations to be sold cannot be promptly or accurately ascertained. 7. Loans The Fund has entered into private loans agreements that can be specified as follows (all amounts in EUR): Interest Amount Rate 2017 Long term loans Loans with 3-year maturity 0,75% 300,000 Total long term loans 300,000 Short term loans Loans with no maturity 0,75% 621,000 Total short term loans 621,000 Total 921,000 The interest rate on all loans amounts to 0,75% per month over the remaining outstanding balance of the loan. The loans may be redeemed by the Fund at any time without a fine or additional costs. 11

12 8. Other liabilities (all amounts in EUR) Management fees payable 126, ,430 Administration fees payable 3,010 3,716 Audit fees payable 6,575 13,150 Directors fee payable 1,513 - Legal fees payable 3,600 10,879 Interest payable 6,902 3,259 Taxes payable 992 1,956 Other liabilities 3,300 6,809 Closing balance 152, ,199 12

13 Notes to the profit and loss statement 9. Management fee The Fund Manager receives an annual management fee for managing the Fund equal to 2%, calculated over the total capital (issued share capital plus the premium reserve) which has been invested by the Participants. Asset management fees are exempted from VAT in the Netherlands. The Management Fee is payable on a monthly basis. The management fee for the period ended 30 June 2017 amounts to EUR 66,718 (first half of 2016: EUR 35,011). 10. Administration fees The Fund has entered into an administration agreement with Circle Investment Support Services B.V. (the Administrator ). The administrator is entitled to an annual administration fee of EUR 7,500. The following costs are incurred by the administrator for the period ended 30 June: (all amounts in EUR) Administration fee 3,814 2,375 Reporting fee 2,307 1,930 AIFMD fee FATCA fee Closing balance 7,527 4, Audit fees The Fund has appointed Crowe Horwath Foederer B.V. as the independent auditor of the Fund. The Independent Auditor s remuneration amounts to EUR 6,938 (first half of 2016: 4,235). The Independent Auditor does not provide any other audit or non-audit services to the Fund. 12. Income and corporate income taxes The Fund is organized as an mutual Fund ( Fonds voor gemene rekening ) under the current system of taxation in The Netherlands. The Fund is transparent for The Netherlands corporate income tax purposes. As a consequence, the Fund is, in contrast to SCN Fondsen III B.V., not subject to The Netherlands corporate income tax. Certain dividend and interest income received by the Fund are subject to withholding tax imposed in the country of origin. 13

14 13. Core business and outsourcing The following key tasks have been outsourced by the Fund: Administration The administration has been outsourced to Circle Investment Support Services B.V, who carries out the administration of the Fund, including the processing of all investment transactions, processing of revenues and expenses and the preparation of the NAV. It also states, under the responsibility of the Manager, the interim report and the financial statements of the Fund. For information on the fees of the Administrator refer to note 10. Fund management The investment policy is outsourced to Finles N.V. (the Fund Manager). The Fund Manager is responsible for managing the Fund. The primary duties and powers of the Fund Manager are the following: to determine and execute the investment policy of the Fund; to conduct (or have conducted) the administration of the Fund; to ensure that the Net Asset Value is determined correctly and in a timely manner; to ensure that the Fund complies with all relevant laws and regulations; and to protect the interests of the Unit Holders. For information on the fees of the Fund Manager refer to note 9. Depositary Darwin Depositary Services B.V. serves as the Depositary to the Fund. The main responsibilities of the Depositary are: To monitor cash flows of the Fund (ensuring in particular that all payments by or on behalf of the Participants upon the subscription for Units have been received and that all cash of the Fund has been booked in cash accounts opened in the name of the Holding SPV on behalf of the Fund or in the name of the Fund Manager acting on behalf of the Fund); To verify the ownership of the assets of the Fund and maintain a record of those assets; To verify the Fund s compliance with the investment restrictions as set out in the Prospectus; To perform various oversight duties with regard to the issue and redemption of Participations; To ensure that in transactions involving the assets of the Fund, any consideration is remitted to the Fund within the usual time limits; and Verification that appropriate and consistent procedures are established and applied for the valuation of the assets of the Fund. None of these duties may be delegated by the Depositary. The Depositary shall perform its duties as depositary ( bewaarder ) of the Fund within the meaning of article 4:62n Wft. The Depositary shall act solely in the interest of the Participants. The depository fee amounts to EUR 15,000 (excl. 21% VAT) per annum. 14

15 14. Proposed appropriation of the result The Fund will not distribute any dividend. The result for the period ended 30 June 2017 will be added to the general reserve. 15. Events after balance sheet date On 20 July 2017, the Fund Manager received two notices from the Dutch Authority Financial Markets (AFM). The notices concern: (1) the suspension of purchases and sales of participations in the Finles Next Generation Fund I, and (2) regulatory compliance of the Fund manager s organizational procedures and in particular the valuation methodology of its fund assets. The Fund manager expects that the notices will be cancelled by the AFM in due course. 15

16 Other Information Personal holdings of the Board of Directors of the Fund Managers The Board of Directors or the Fund Manager had no interests or positions at 30 June 2017 in investments the Fund held in its portfolio. Utrecht, August 31, 2017 Fund Manager Finles N.V. 16