The directors present their report with the financial statements of the company for the period ended 31 December 2023
Principal activities of the company
Principal Activities Of The Company Informations.
Principal activities of the companyFinancial assets and nancial liabilities measured at amortized costFinancial assets are measured at amortized cost if they are held under a business model with the objective to collect contractual cash ows (“Hold to Collect”) and they have contractual terms under which cash ows are solely payments of principal and interest (“SPPI”). In making the SPPI assessment, the Company considers whether the contractual cash ows are consistent with a basic lending arrangement (i. e., interest includes only consideration for the time value of money, credit risk, other basic lending risks and a pro t margin that is consistent with a basic lending arrangement). Where the contractual terms introduce exposure to risk or volatility that are inconsistent with a basic lending arrangement, the related nancial asset is classi ed and measured at fair value through profit or loss. Financial assets measured at fair value through other comprehensive income (“FVOCI”) Financial assets are measured at FVOCI if they are held under a business model with the objec- tive of both collecting contractual cash ows and selling the nancial assets (“Hold to Collect and Sell”), and they have contractual terms under which cash ows are SPPI. Financial assets measured at FVOCI include loans and advances that are held within the Company’s Retained Lending business.Economic capital risk measurement methodologiesAll material risks are considered in the total economic capital demand and are quanti ed over a 1-year holding period at a 99.9% con dence level.– Credit Risk: Credit Risk is quanti ed using the wholesale Economic Credit Capital model (ECC), with add-ons for risks not yet covered by the model. ECC seeks to capture the dis- tribution of portfolio losses arising from credit risk through either defaults or changes in value. The model produces loss distributions that are then used to assess the entity’s capital adequacy in the ICAAP. The principal drivers of portfolio capital are the risk characteristics of individual exposures and the correlations among different borrowers.Corporate private equityIncluding Five Arrows Principal Investments (FAPI) and Five Arrows Capital Partners (FACP) Secondaries, multi-manager funds and co-investments, including Five Arrows Secondary Opportunities (FASO), Five Arrows Private Equity Programme (FAPEP, formerly Arolla) and Five Arrows Minority Investments (FAMI, formerly Corporation Number (sc393133) Proprietary Investments)Corporate Responsibility Our unique and outstanding record of achievement is drivenby a strong values-driven culture. This has earned us the trust of our partners, clients and shareholders and drives our commitment to Corporate Responsibility today and in the future. Where the employers as a company of which regulations 3.2. of the regulations applies the certificate shall state and a prominent place. Either that the policy covers the holding company and all its subsidiaries except any specifically excluded by name or that policy covers the Holdings company and only the named subsidiaries.JurisdictionThese terms and conditions are governed by United Kingdom law and agree to submit to the exclusive jurisdiction in relation to all matters connected with or arising with corporate activities. Principal tax policyThe Group tax strategy applies to all entities ultimately owned by (Z U A A H L) Registered company number (SC393133) and applies to the management of the group corporate tax affairs. Employee and client related taxes are managed by Human resources and Legal & Compliance and are not covered under the group tax strategy.Affairs to manage taxation efficiently are organized by the group, registered company number (sc393133) consistent with commercial needs and with the group’s conservative approach to tax risk. We do not enter into, facilitate or promote arrangements which lack business purpose or commercial rationale or which run contrary to the intention of legislation.The Group tax team proactively identifies and monitors key tax risks throughout the year, taking into account changes in the business and applicable tax legislation, ensuring that the control framework governing tax risk is updated appropriately.The team also assists and works with the group Finance department to ensure full and timely compliance with the tax reporting and other obligations as required by legislation. It maintains close working relationships with different parts of the business to ensure thatthe tax implications of transactions and any business changes are fully understood.The Group tax team consults with external advisers on specific matters, where required, and engages with industry bodies to assess future legislative developments.CorporationA corporation is an Abstraction. It has no mind of its own anymore then it has a body of it on its active and directing will must consequence be sought in the person of somebody who for some purpose may be called an agent. But who is really the directing mind and will of the corporation the very ego and centre of the personality of the corporation it must be upon the true construction of that section in such a case as the present one that the fault or property is the fault of property of somebody who is not merely a servant or an agent for him the company is liable upon the footing responsibility superior but somebody for him the company is liable because his action is the very action of the company itself. It is not enough that the fault should be the fault of a servant in order to exonerate The owner, The fault must also be one which is not the fault of the owner, or a fault to which the owner and I take the view that when anybody sets up the section to excuse himself from the normal consequences of the maximum responsibility superior the burden lies upon him to do so. Nature true scope of workWe obtained an understanding of all the consolidated entities’ activities, and the description of the principal risks associated;We assessed the suitability of the criteria of the Guidelines with respect to their relevance, completeness, reliability, neutrality and understandability, with due consideration of industry best practices, where appropriate;We verified that the Statement presents the business model and a description of principal risks associated with the all the consolidated entities’ activities, including where relevant and proportionate, the risks associated with their business relationships, their productsor services, as well as their policies, measures and the outcomes thereof, including key performance indicators associated to the principal risks We obtained an understanding of internal control and risk management procedures the entity has put in place and assessed the data collection process to ensure the completeness and fairness of the Information; in order to verify theproper application of the definitions and procedures and reconcile the data with the supporting documents. This work was carried out on a selection of contributing entities and covers between 25% and 100% of the consolidated data selected for these tests; We assessed the overall consistency of the Statement based on our knowledge of all the consolidated entities.Statutory Auditors’ Responsibilities for the Audit of the Consolidated Financial StatementsWe submit a report to the Audit Committee which includes in particular a description of the scope of the audit and the audit program implemented, as well as the results of our audit. We also report,if any, significant deficiencies in internal control regarding the accounting and financial reporting procedures that we have identified.Our report to the Audit Committee includes the risks of material misstatement that, in our professional judgement, were of most significance in the audit of the consolidated financial statements of the current period and which are therefore the key audit matters, that we are required to describe in this audit report. The statutory auditors original signed byKPMG.
Principal activities of the company
Financial assets and nancial liabilities measured at amortized costFinancial assets are measured at amortized cost if they are held under a business model with the objective to collect contractual cash ows (“Hold to Collect”) and they have contractual terms under which cash ows are solely payments of principal and interest (“SPPI”). In making the SPPI assessment, the Company considers whether the contractual cash ows are consistent with a basic lending arrangement (i. e., interest includes only consideration for the time value of money, credit risk, other basic lending risks and a pro t margin that is consistent with a basic lending arrangement). Where the contractual terms introduce exposure to risk or volatility that are inconsistent with a basic lending arrangement, the related nancial asset is classi ed and measured at fair value through profit or loss. Financial assets measured at fair value through other comprehensive income (“FVOCI”) Financial assets are measured at FVOCI if they are held under a business model with the objec- tive of both collecting contractual cash ows and selling the nancial assets (“Hold to Collect and Sell”), and they have contractual terms under which cash ows are SPPI. Financial assets measured at FVOCI include loans and advances that are held within the Company’s Retained Lending business.Economic capital risk measurement methodologiesAll material risks are considered in the total economic capital demand and are quanti ed over a 1-year holding period at a 99.9% con dence level.– Credit Risk: Credit Risk is quanti ed using the wholesale Economic Credit Capital model (ECC), with add-ons for risks not yet covered by the model. ECC seeks to capture the dis- tribution of portfolio losses arising from credit risk through either defaults or changes in value. The model produces loss distributions that are then used to assess the entity’s capital adequacy in the ICAAP. The principal drivers of portfolio capital are the risk characteristics of individual exposures and the correlations among different borrowers.
BUSINESS MODEL ASSESSMENT
The Group makes an assessment of the business model in which an asset is held at portfolio level because this best reflects the way the business is managed and information is provided to management. The information considered includes:
The stated policies and objectives for the portfolio and the operation of those policies in practice. In particular, the Group considers whether management’s strategy focuses on earning interest revenue, maintaining a particular interest profile, matching the duration of the financial assets to the duration of the liabilities that are funding those assets; or realising cash flows through the sale of the assets;
How the performance of the portfolio is evaluated and reported to the Group’s management;
The risks that affect the performance of the business model and how those risks are managed;
How managers of the business are compensated, e.g. whether compensation is based on the fair value of the assets managed or the
contractual cash flows collected; and
The frequency, volume and timing of sales in prior periods, the reason for such sales and its expectations about future sales activity.
However, information about sales activity is not considered in isolation, but as part of an overall assessment of how the Group’s stated objective for managing the financial assets is achieved and how cash flows are realised.
Financial assets that are held for trading or managed on a fair value basis are measured at
ASSESSMENT WHETHER CONTRACTUAL CASH FLOWS ARE SOLELY PAYMENTS OF PRINCIPAL AND INTEREST (SPPI)
For the purposes of this assessment. principal is defined as the fair value of the financial asset on initial recognition. “Interest” is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs, as well as profit margin.
In assessing whether the contractual cash flows are SPPI, the Group considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the Group considers.
The net asset value of these investments in Group,
Other companies and portfolio holdings is determined by Management, depending
on the availability of the data and by using quotation prices,
net or revalued share in equity or references to recent transactions.
When the inventory value thus determined is lower than the acquisition cost of these investments, an impairment is recognised.
The methodology and assumptions used to determine the inventory value of investments in Group, other companies and portfolio holdings requiring the exercise of judgement, and considering the relative importance of the amount of these financial assets in the balance sheet of the Company, we considered that the determination of impairment
of investments in Group, other companies and portfolio holdings is a key audit matter for the annual accounts of the Company.
Paragraph III “Accounting principles, rules and methods” of the appendix sets out the methods for recording an impairment to cover the risk of
a decline in the value of investments in Group, other companies and portfolio holdings.
Our response
Our procedures consisted of:
Understanding the internal control and governance put in place by Management to measure the inventory value of investments in Group, other companies and portfolio holdings;
Considering the validity of the methodologies applied and the relevance of the parameters and assumptions used by the Company to determine the inventory values of these financial assets;
Testing, on a sample basis, the inventory values used by the Company for these financial assets and the correct application of the methods.
Lastly, we made sure that the information presented in the financial statements are appropriate.
General principles
The notes to the accounts have been prepared having taken into account the understanding, relevance, reliability, comparability and materiality of the information provided.
The Audit Committee is responsible for monitoring the financial reporting process and the effectiveness of internal control and risks management systems and where applicable, its internal audit, regarding the accounting and financial reporting procedures.
The financial statements were approved by the Management.
Political and charitable donations
Political and charitable donations
The Company’s Managing Partner has full power to act in all circumstances in Acrobat Group name and on its behalf, in order to, amongother things: ensure the effective determination of the direction of the business of Acrobatgrouplimited and the entities within the Group on a consolidated basis; supervise the accounting and financial information and direct the internal control of Acrobatgrouplimited and the entities within the Group on a consolidated basis; determine the regulatory capital of Acrobatgrouplimited and the entities within the Group on a consolidated basis; approve the annual, consolidated and half-yearly accounts of Acrobatgrouplimited determine the agenda and prepare the draft resolutions of the shareholders’ General Meetings of Acrobatgrouplimited ; convene the shareholders’ General Meetings of Acrobatgrouplimited; and prepare those reports and decisions established in its capacity asthe Managing Partner Charitable works & vaccinations donations.
Company policy on disabled employees
Risk policy General provisions Risk management forms a cornerstone of the Acrobat Group’s corporate strategy and governance. The Acrobat Group’s Management defines the Group’s general risk policy, which is applied to all companies in the Acrobat Group and is intended to cover all types of major risk to which the Group is exposed. Specific factors related to the various categories of risk are covered in specific risk policies or in-house directives or guidelines. The risk policy is implemented at several dif-ferent levels: – The Acrobat Group’s Management ratifies and oversees implementation of general risk policy; – The Executive Committees of Acrobat Group companies supervise the proper implementation of the policy and put operational measures into practice to apply it; – Specific committees are responsible for managing risks in their respective fields; – The individual business units are responsible for managing risks specific to them. In addition, the Acrobat Group strives to foster a corporate culture in which risk management is given a high priority and made an integral part of all management activities. As such, risk management (for all risk caregories) must be perceived by every member of staff as being one of their re-sponsibilities as well. Operational risk Operational or business risk can be defined as the risk of losses or damage resulting from inadequacies or short-comings in in-house processes, staff or systems, or stemming from external events. Operational risk also co-vers legal and compliance risks. The Acrobat Group Operational Risk Policy sets out the or-ganisational framework and the fundamental principles of operational risk management. The policy requires that the responsibilities are clearly defined for each significant risk. These responsibilities are broken down into three categories: owning the risk, controlling the risk and mon-itoring the risk. Management teams for each business line are responsible for identifying, assessing, managing, monitoring and con-trolling those operational risks specific to their area of business. They are assisted in this by risk managers work-ing directly with the various business lines. These risk managers also act as liaisons between Management and the Group Risk Department. A process of identifying and assessing operational risks throughout the Acrobat Group is performed on a regular ba-sis. If deemed necessary, action plans are instigated to lessen risks that are assessed to exceed limits set according to the appetite for risk. Key risk indicators (KRIs) are defined and regularly ana-lysed. These KRIs measure the level of risk resulting from business activities, systems, processes, etc. All operating incidents and potentially resultant financial losses are logged so as to have an overall quantifiable view of incidents that have occurred and to ensure that plans to mitigate risk levels or extra checks and controls can be put in place in the event of a major incident. The Acrobat Group has instituted robust corporate govern-ance geared towards anticipating risk. This involves active exchanges of information with business lines and regular efforts to emphasise to staff their responsibilities and heighten their awareness about the direct and indirect im-pact that the Acrobat Group’s activities (for example, changes in the political or regulatory climate) might have on its reputation as well as on that of its clients and its staff. Effective management of communications, both in-house and to the outside world, is crucial in safeguarding the Acrobat Group’s good name and reputation. Group Cor-porate Communications is responsible for effective image management of the Group. It monitors articles published about the Group and will contact the media as soon as the Group’s reputation might be at stake. Measures aimed at limiting risk to the Group’s image and reputation include notably analysing and pinpointing any areas of vulnera-bility, internal analysis and escalation procedures as well as rules of conduct applicable to staff. Group Corporate Communications works closely together with the Risks, Compliance and Legal Departments. Reputational risk, coupled with the monitoring and appropriateness of measures, are included in the consolidated report on over-all risk submitted to Acrobat Group’s Management. The Acrobat Group has formulated a crisis-management process to enable it to take effective and swift action to cope with a variety of crisis events. A crisis-management plan has been drawn up. Members of staff appointed as ‘Crisis Coordinators’ have been trained. Operating proce-dures and communications plans have been compiled. Business Continuity Management is geared towards safe-guarding the sustainability of the Acrobat Group and pro-tecting its assets. Contingency solutions have been devised, deployed and kept operational for each Group company in keeping with the risks incurred, statu-tory and regulatory requirements, and need in terms of safeguarding the continuity of operations. To this end, emergency off-site workplaces and IT/technical infra-structures are available and regularly tested. Change in risk policy There were no changes in the risk policy.
Providing financial support to charities and social enterprises, as well as
to individuals
Offering our professional expertise to social purpose organisations, helping them to drive change for young people
Encouraging our people to volunteer, using their skills to help young people to succeed in life.
Through our Corporate Giving programme we make targeted donations to some of the most innovative and effective charities and social enterprises operating in this field. We also give directly to individual young people
in need through a number of scholarship and bursary programmes supporting higher educational pathways.
Through our Giving Together programme we encourage our people to give to the causes they particularly care about as well as to those we support as a company. Giving Together represents our joint efforts as a company and as colleagues to donate money and goods to the causes that we care about.
Championing giving
Through our Corporate Giving programme we make targeted donations to some of the most innovative and effective charities and social enterprises operating in this field. We also give directly to individual young people
in need through a number of scholarship and bursary programmes supporting higher educational pathways.
Through our Giving Together programme we encourage our people to give to the causes they particularly care about as well as to those we support as a company.
Giving Together represents our joint efforts as a company and as colleagues to donate money and goods to the causes that we care about.
Company policy on disabled employees
Company policy on disabled employees
Risk policy General provisions Risk management forms a cornerstone of the Holdings Company corporate strategy and governance. The Acrobat Group’s Management defines the Group’s general risk policy, which is applied to all companies in the Groups and is intended to cover all types of major risk to which the Group is exposed. Specific factors related to the various categories of risk are covered in specific risk policies or in-house directives or guidelines. The risk policy is implemented at several dif-ferent levels: – The Z U A A H L (SC393133) Management ratifies and oversees implementation of general risk policy; – The Executive Committees of Z U A A H L companies supervise the proper implementation of the policy and put operational measures into practice to apply it; – Specific committees are responsible for managing risks in their respective fields; – The individual business units are responsible for managing risks specific to them. In addition, the Acrobat Group strives to foster a corporate culture in which risk management is given a high priority and made an integral part of all management activities. As such, risk management (for all risk caregories) must be perceived by every member of staff as being one of their re-sponsibilities as well. Operational risk Operational or business risk can be defined as the risk of losses or damage resulting from inadequacies or short-comings in in-house processes, staff or systems, or stemming from external events. Operational risk also co-vers legal and compliance risks. The Company (SC393133) Operational Risk Policy sets out the or-ganisational framework and the fundamental principles of operational risk management. The policy requires that the responsibilities are clearly defined for each significant risk. These responsibilities are broken down into three categories: owning the risk, controlling the risk and mon-itoring the risk. Management teams for each business line are responsible for identifying, assessing, managing, monitoring and con-trolling those operational risks specific to their area of business. They are assisted in this by risk managers work-ing directly with the various business lines. These risk managers also act as liaisons between Management and the Group Risk Department. A process of identifying and assessing operational risks throughout the Acrobat Group is performed on a regular ba-sis. If deemed necessary, action plans are instigated to lessen risks that are assessed to exceed limits set according to the appetite for risk. Key risk indicators (KRIs) are defined and regularly ana-lysed. These KRIs measure the level of risk resulting from business activities, systems, processes, etc. All operating incidents and potentially resultant financial losses are logged so as to have an overall quantifiable view of incidents that have occurred and to ensure that plans to mitigate risk levels or extra checks and controls can be put in place in the event of a major incident. The (SC393133) has instituted robust corporate govern-ance geared towards anticipating risk. This involves active exchanges of information with business lines and regular efforts to emphasise to staff their responsibilities and heighten their awareness about the direct and indirect im-pact that the Corporations activities (for example, changes in the political or regulatory climate) might have on its reputation as well as on that of its clients and its staff. Effective management of communications, both in-house and to the outside world, is crucial in safeguarding the Company (SC393133) good name and reputation. Group Cor-porate Communications is responsible for effective image management of the Group. It monitors articles published about the Group and will contact the media as soon as the Group’s reputation might be at stake. Measures aimed at limiting risk to the Group’s image and reputation include notably analysing and pinpointing any areas of vulnera-bility, internal analysis and escalation procedures as well as rules of conduct applicable to staff. Group Corporate Communications works closely together with the Risks, Compliance and Legal Departments. Reputational risk, coupled with the monitoring and appropriateness of measures, are included in the consolidated report on over-all risk submitted to Acrobat Group’s Management. The Corporation has formulated a crisis-management process to enable it to take effective and swift action to cope with a variety of crisis events. A crisis-management plan has been drawn up. Members of staff appointed as ‘Crisis Coordinators’ have been trained. Operating proce-dures and communications plans have been compiled. Business Continuity Management is geared towards safe-guarding the sustainability of the Z U A A H L and pro-tecting its assets. Contingency solutions have been devised, deployed and kept operational for each Group company in keeping with the risks incurred, statu-tory and regulatory requirements, and need in terms of safeguarding the continuity of operations. To this end, emergency off-site workplaces and IT/technical infra-structures are available and regularly tested. the group contribution to the employment of disabled persons is conducted by the payment of a contribution for disabled people employed, by recruitment activities, by adaptations of jobs, and by investing in educational projects for disabled people.
Additional information
In line with HMRC-approved limits.
Maximum opportunity performance metrics.
The Company Sc393133 is based on independent external valuation carried out in accordance with RICS valuation performance standards Tax Paid Fully of Sort 0.628 Current Financial Years. Relative TSR helps align the interest of Executive Directors with shareholders by incentivise share growth and provides an objective measure of the Companies long-term success. The current long-term incentive performances conditions are summarised within the Annual Reports on Remuneration performance is measured related to bespoke comparator group of properties, agricultural lands, venture capital companies and Capco.
TAX POLICY DOCUMENT (i)
The Holdings Group tax function works closely with the business to ensure that the tax policy supports the group business strategy and is adapted and followed constantly across the group ensuring that all obligations are fully complied with and tax affairs managed appropriately.
GROUP TAX POLICY (ii)
Our Corporations recognises and seeks to meet the legitimate expectations of many stakeholders. We are committed to: act with integrity and transparency of all our tax compliance and reporting duties.
Ensure our tax policy is consistent with our group strategy and core value.
Maintain collaborative and open relationships with HM Revenue & Customs (HMRC).
Obtain pre-clearance from HMRC in area of complexity and uncertainty.
Given due consideration to Group's Corporate and responsibilities, reputation and the intention of the relevant tax legislation when considering tax reliefs.
GROUP CODE OF CONDUCT (iii)
The Holding Unlimited business code of conduct sets out the principle under which group staff are expected to operate. In addition the financial crime policy set out specific requirements with respect to tax matters in support of the group tax policy group staff receive training on these matters. The group is committed to observing all applicable laws, rules, regulations. and reporting disclosure requirements. A dedicated tax function collaborate with the business to provide advice and guidance necessary to ensure the tax group remains fully complied.
TAX RISK (iiii)
Tax risk is managed through strong compliances procedures which are continuously monitored and improved. This insures transparent financial reporting, accurate complete tax returns and creates a strong working relationship with HMRC. The group tax function works closely with the business to identify and track all tax risks that may impact the Group.
CONSISTENCY WITH GROUP STRATEGY (iiiii)
The final course of action will be approved by the Chief Financial Officer with Chief Executive and the Board approval being sought where appropriate in addition, regular updates to the Audit Committee ensure openness and transparency in areas of tax uncertainty and complexity.
The parent company principles subsidiaries are intermediate holding company the (IHC). The (IHC) holds stocks and its subsidiaries. The IHC also owns other assets and owns Inter-company indebtedness to the holding company. The parent company is obligated to contribute all the net proceeds received from security issuances (including issuances assurance of senior and subordinated debt securities and of preferred and common stock). The principal sources of income and funding for the Parent Company are dividends and extensions of credit from the IHC. The IHC is prohibited from paying dividends or extending credit to the Parent Company if certain capital or liquidity “thresholds” are breached or if limits are otherwise imposed by the Parent Company’s management or Board of Directors.Comprehensive Capital Analysis and Review (“CCAR”) and other stress testing processes to ensure that large bank holding companies (“BHC”) have sufficient capital during periods of economic and financial stress, and have robust, (“ICAAP”), as well as its plans to make capital distributions, such as dividend payments or stock repurchases.
The director shown below has held office during the period of
2 October 2023
to
31 December 2023
The above report has been prepared in accordance with the special provisions in part 15 of the Companies Act 2006
This report was approved by the board of directors on
3 October 2024