|
Registered number:
FOR THE YEAR ENDED 31 DECEMBER 2024
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
COMPANY INFORMATION
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
CONTENTS
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
Principal Activities
Method Investments & Advisory Limited ("Method"), incorporated on 2nd November 2001, is authorised and regulated by the Financial Conduct Authority (FCA) for the following activities: • Advising on investments (except on Pension Transfers and Pension Opt Outs); • Agreeing to carry on a regulated activity; • Arranging (bringing about) deals in investments; • Arranging safeguarding and administration of assets; • Dealing in investments as agent; • Dealing in investments as principal; • Making arrangements with a view to transactions in investments; • Managing investments; • Safeguarding and administration of assets (without arranging). Method can provide its services only to "Professional Clients" and "Qualified Counterparties" and since September 2022 may control but cannot hold client money. Company efforts are focused on pursuing market strategies based on consistent income and risk diversification.
The financial results of Method show a gross profit of €3,811,434 (2023: €5,117,496) and a net loss for the year is €632,976 (2023: €37,070).
These results, however, take into account a change in the adopted accounting policy (from cost to fair value). Specifically, the cumulative profits up to and including 2022 profits should be revised upward to €15,172,100 , thus resulting in an average profit of €4,827,598 over the 2022–2024 period.
Page 1
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
As clarified below (refer to Note 26), the company performs periodic risk assessments in order to identify the risks relating to its activities, processes and systems. The foregoing risk assessment exercise is always documented within the firm's Risk Management Procedures Manual (RMP) and internal minutes for record keeping purposes. Based on the above and as highlighted within the RMP, the following risk categories are deemed to be material to the firm's business:
Business risks: Business risk arises when a firm is unable to realise its business plan and achieve its strategy targets due to insufficient planning or changes in the external environment. The company has demonstrated control over its planning process also considering the prevailing economic conditions. As a result it has always been in a position to adopt its proposed business strategy, capitalising the firm, establishing new business lines and maintaining resources in excess of its regulatory capital requirement. The firm has continued to engage professional advisors in respect of all business developments both in the UK and overseas: in the medium term, the company will thus be able to implement its proposed business strategy, even within very dynamic internal and external environments. Operational risks: Considered to be the risk of loss resulting from inadequate or failed internal processes, people and systems or external events, including legal risk. This is regularly assessed by the Board of Directors (BoD) with the help of the Accounting and Risk Management Departments. The company has always paid special attention to the implementation of effective measures deemed to mitigate (if not eliminate at all) the implications of the said risk drivers, including: ad-hoc cyber-security program starting from Q4 2024. Furthermore, all new business opportunities are considered in relation to the additional risks that they may bring, and new activities will only be pursued where the appropriate infrastructure is in place to address those risks. Once new lines of business are taken on, the company works to integrate those businesses into its current infrastructure, taking best practices across where necessary. Stress testing is also performed within the scope of ICARA process to determine whether there could be significant issues likely to arise in the foreseeable future that could have a potential material impact on the company's going concern. IFPR Capital Adequacy Requirements: The internally-developed risk management dashboard has been updated to make sure that all IFPR provisions are duly taken into account. In particular, all the trading desks are monitored in real time in terms of PnL, VaR, Net Position Held and Regulatory Capital Requirements (K-NPR). Online computations are logged for record keeping purposes and available for consultation on demand. In addition to that, the risk management team receives a wrap-up email with a screenshot of the aforementioned risk thresholds (on a single trading desk basis) every 15 mins. Daily (at 1 pm Italy time) the risk management department receives the daily output for K-CON requirements (with a detailed overview in terms of issuer, exposure and assigned risk weight). Clearly enough, the said output can be produced automatically even more often (or at a different time) on demand, based on the management's needs. K-DTF is computed relying on our internal BO systems: computations are clearly detailed both for cash and for derivatives instruments and are updated every month end. Even in this case, automatic computations can be carried out even more often, depending on the company's needs. K-AUM is also updated at the end of the month, even though computations can be potentially carried out any time, if need be, based on internally available data (gathered by an "ad-hoc" team and shared with the relevant departments via the AUMreport mailing list). Please be aware that: K-CMG is not applicable, being conceived as an alternative to K-NPR K-TCD, K-CMH and K-ASA are not applicable to Method's business mode. Starting from 03.2024, K-COH is computed via an internally-developed .net procedure. So far, however, its relevance has been negligible. Once the various K-factor requirements have been computed as indicated above, corporate regulatory capital is determined in line with IFPR provisions as max (PMR, FOR, KFR), with PMR=permanent min requirement (750k GBP, in the case of Method) and FOR=fixed overhead requirement (so far computed based on Dec23 audited financials). Provided that PMR is expressed in GBP terms, while both FOR and KFR are EUR-denominated, the daily ECB EUR/GBP rate is used for conversion (an internally developed automatic procedure retrieves it directly from ECB website every morning).
Page 2
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
As previously referred to, all the foregoing computations are recorded/automatically logged and available for consultation anytime on demand. Market risks: Given the company's core business, market risk certainly represents one of the main sources of uncertainty to be managed effectively. Market wide and specific risk factors are closely monitored by the Risk Management Department on a real time basis on all the company's accounts (both individually and at the aggregate level), to make sure that the risk limits (VaR, Stop Loss, Maximum Position Held, Regulatory Capital requirements) are not breached. Daily checks (t+1) are further carried out based on End of Day (t) positions/trades/orders, with a special focus on Stress Testing and Market Abuse. The internally adopted Stress Testing Programme and Market Abuse Process are kept up to date by the Risk Management Department and are always available for consultation upon demand. Even assuming that adverse market conditions materialise on worldwide financial markets, causing severe instability and uncertainty, the company has an internal risk management framework in place to face the resulting turmoil effectively, without seriously undermining its going concern. Liquidity risks: Stress tests carried out through 2024 have revealed that the Firm is robust enough to face extreme business conditions (both at an idiosyncratic and at a market wide level) over the medium term, thus corroborating the view that the maintained liquidity levels are adequate to survive even a severe turmoil. Financial crime and fraud risks: The company conducts a yearly (at least) review of the risk that it may be used for financial crime: the whole process is overseen by the internal MLRO who reports directly to the senior management team. In general, the company is thought to be at a low risk profile for being used by external parties for money laundering or by internal parties for fraud. This is due to: - the tripartite arrangement for the funds it manages where there is an administrator and electronic trade records - trading activity carried out predominantly with other EEA or equivalent regulated institutions on regulated markets - senior management responsibility for the review of systems and controls over time - the oversight by senior management of third parties - staff periodic (at least yearly) training on market abuse, money laundering, bribery and cyber-security Given the internal risk management framework detailed above and considering the final outcomes resulting from internal periodic stress testing, the company is very likely to be able to face potential future uncertainties promptly and effectively, without undermining its going concern to any material extent. Further details relating to risks are referred to in note 28 of the financial statements.
The company measures turnover, gross profit and net profit as its financial key performance indicators, with an additional focus on Return on Equity (ROE).
KPIs 2024 2023 Turnover 9,037,777 11,466,966 Gross profit 3,811,434 5,117,496 Net loss -632,976 -37,070 ROE -2.4% -0.14% Stress Testing is further carried out within the scope of the yearly ICARA. In the light of the above indicators, the directors are satisfied with the turnover and results achieved during the year.
Page 3
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
This statement, explains how the Directors have engaged with employees, suppliers, customers and other stakeholders; and have had regard to employee interests, the need to foster the company's business relationships with suppliers, customers and others, and the impact of the company's operations on the community and the environment.
General confirmation of Directors' duties Method's focus is on activities that enable it to promote the interests of its shareholders. This includes the development of strategy and the assessment of material factors impacting the sector in which the company operates, the monitoring of executive action and the continuing assessment of the operational activity of the company. The likely consequences of any decision in the long term The Directors understand the regulated market in which the firm operates and are mindful of the differing scenarios that Brexit may have on the business. Method is focused on the need to maintain access to the relevant traded regulated markets as part of its strategic planning. The interests of the company's employees The Directors recognise that Method's employees are fundamental and core to the business and delivery of the company's goals and ambitions. The success of the business is dependent upon the attraction and retention of well trained and motivated employees. The company ensures that employees are trained to the standards required for the company's trading activities in regulated markets. The Directors consider the implications of the decisions that it makes on the company's employees whenever relevant and feasible. The need to foster the company's business relationships with suppliers, customers and others Method has limited third party customers as the majority of its revenue is generated from proprietary trading in regulated markets. Where the company has third party customers the Directors of the company are in regular contact with those customers to discuss investment strategy, risk and opportunity relevant to the investment of funds. The relationships with third party customers have been built up over time. Method's suppliers provide the business with both goods and services. The impact of the company's operations on the community and the environment As discussed above the Directors are mindful of the supplies that it consumes and the impact these may have on the environment and wider stakeholders in society. The Directors are also mindful of the fact that the firm's operations involve trading in regulated markets and that through its on going adherence with its FCA compliance obligations and internal control environment it contributes to act as a responsible trader in the markets and thus meets its legal and moral duty to the wider community of stakeholders in society.
Page 4
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
The need to act fairly between members of the company
Method only has one shareholder and so will always act fairly regarding the interests of its member. The Directors consider which course of action enables delivery of the company's strategy both operationally and in the longer term.
This report was approved by the board and signed on its behalf.
Page 5
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
The directors present their report and the financial statements for the year ended 31 December 2024.
The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The loss for the year, after taxation, amounted to €632,976 (2023 - loss €37,070).
The company's return on assets for the year was 1.5% (2023: 0.08%).
The directors did not pay a dividend during the year (2023: €Nil).
The directors who served during the year were:
Method has continued to communicate with its stakeholders as appropriate. The company has limited third party customers with whom the directors communicate with on a continuing basis. As a trading brokerage most of the company's activities are direct with the relevant regulated market. Method's suppliers provide services and goods to the company on normal commercial terms and Method communicates with its suppliers as necessary.
Page 6
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
During the year the company had a branch in Italy.
The information relating to risks impacting the company and research activities are disclosed in the strategic report as allowed under section 414C (11) of the Companies Act 2006.
There have been no significant events affecting the Company since the year end.
The auditor, MHA, previously traded through the legal entity MacIntyre Hudson LLP. In response to regulatory changes, MacIntyre Hudson ceased to hold an audit registration with the engagement transitioning to MHA Audit Services LLP.
The auditor, MHA, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
Page 7
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF METHOD INVESTMENTS & ADVISORY LIMITED
We have audited the financial statements of Method Investments & Advisory Limited (the 'Company') for the year ended 31 December 2024, which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity, the Statement of Cash Flows and the related notes, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
Page 8
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF METHOD INVESTMENTS & ADVISORY LIMITED (CONTINUED)
In our audit report for the year ended 31 December 2023, we qualified our opinion due to two key matters relating to the accounting for the investment in Gordon International SA, which was acquired from the Company’s immediate parent, Gordon Investments Limited.
Firstly, we were unable to obtain sufficient and appropriate audit evidence to support the fair value of the investment in Gordon International SA at both the acquisition date and at 31 December 2023. The investment was recorded at a fair value of €6,370,521 but we were unable to determine whether this value was appropriate due to a lack of substantiating documentation and third-party valuation evidence. Secondly, the Company recognised a waiver of the €6,370,521 consideration payable to its parent company as other operating income in the profit and loss account. However, in accordance with FRS 102, as the waiver was granted by the Company’s immediate parent, this amount should have been treated as a capital contribution and recognised directly in equity through retained earnings. This misstatement resulted in an overstatement of profit for the year ended 31 December 2023 by €6,370,521. The reported profit of €1,300,662 would have been a loss of €5,046,469 had the waiver been correctly classified. The Company disposed of the investment in Gordon International SA during the current year, and we are satisfied with the accounting for that disposal in the 2024 financial statements. Accordingly, the qualification does not extend to the current year’s financial statements. The comparative information presented for the year ended 31 December 2023 amounted to €6,370,521 which remains misstated and has not been restated. The audit opinion has been modified because of the effects or possible effects of these matters on the comparability of the current year's figures and the corresponding figures.
We conducted our qualified audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our qualified report. We are independent of the Company in accordance with the ethical requirements that are relevant to our qualified audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and e have fulfilled our qualified other ethical responsibilities in accordance with these requirements. We believe that the audit evidence e have obtained is sufficient and appropriate to provide a basis for our qualified opinion.
In auditing the financial statements, e have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work e have performed, e have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Page 9
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF METHOD INVESTMENTS & ADVISORY LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our qualified Auditor's Report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, e do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our qualified knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If e identify such material inconsistencies or apparent material misstatements, e are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work e have performed, e conclude that there is a material misstatement of this other information, e are required to report that fact.
As described in the basis for qualified opinion section of our report, our opinion on the financial statements is qualified in respect of the comparative information for the year ended 31 December 2023. We were unable to satisfy ourselves as to the fair value of the investment in Gordon International SA at the date of acquisition and as at 31 December 2023, and in respect of the accounting treatment of a loan waiver in 2023, which was recognised in profit or loss rather than as a capital contribution through equity.
Accordingly, we have concluded that where the other information refers to the acquisition and fair value measurement of Gordon International SA or the Company’s financial performance during 2023, it may be materially misstated for the same reasons.
Except for the possible and actual matters described in the Basis for qualified opinion section of our report, in our qualified opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
Page 10
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF METHOD INVESTMENTS & ADVISORY LIMITED (CONTINUED)
Except for the possible and actual matters described in the basis for qualified opinion section of our report, iIn the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, e have not identified material misstatements in the Strategic Report or the Directors' Report.
Arising from the issues identified within the basis for qualified opinion section of this report, referred to above: • we have not received all the information and explanations we require for our audit; and • we were unable to determine whether adequate accounting records have been kept.
Page 11
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF METHOD INVESTMENTS & ADVISORY LIMITED (CONTINUED)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditor's Report that includes our qualified opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our qualified responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our qualified procedures are capable of detecting irregularities, including fraud is detailed below:
- Enquiry of management and those charged with governance around actual and potential litigation and claims;
- Enquiry of entity staff in and compliance functions to identify and instances of non-compliance with laws and regulations; - Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias; - Reviewing minutes of meetings of those charged with governance and; - Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
Because of the inherent limitations of an audit, there is a risk that e will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as e will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our qualified responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our qualified Auditor's Report.
Page 12
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF METHOD INVESTMENTS & ADVISORY LIMITED (CONTINUED)
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that e might state to the Company's members those matters e are required to state to them in an Auditor's Report and for no other purpose. To the fullest extent permitted by law, e do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our qualified audit work, for this report, or for the opinions e have formed.
for and on behalf of
Statutory Auditor
London, United Kingdom
1 May 2025
MHA is the trading name of MHA Audit Services LLP, a limited liability partnership in England and Wales (Registered number OC455542)
Page 13
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
Page 14
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
REGISTERED NUMBER: 04316140
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 20 to 43 form part of these financial statements.
Page 15
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 16
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
Page 17
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Page 18
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2024
Page 19
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Method Investments & Advisory Limited is a private company limited by shares, incorporated in England & Wales. The company's registered number is 04316140.
The registered office of Method Investments & Advisory Limited is 40 New Bond Street, London, W1S 2RX.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The financial statements have been rounded to the nearest €1.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
The Company is exempt from the requirement to prepare consolidated financial statements as all of its subsidiaries are required to be excluded from consolidation by section 402 of the Companies Act 2006.
Functional and presentation currency
Transactions and balances
Page 20
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
Trading revenue comprises of all realised and unrealised gains and losses from changes in fair value of financial assets and financial liabilities held for trading, together with related income, expenses and dividends.
Page 21
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
Balances with clients and counterparties in respect of unsettled transactions are included in trading book debtors and trading book creditors at their gross trade value. They reflect the company's legal right and obligation at the balance sheet date.
Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Profit and loss account over its useful economic life.
The estimated useful lives range as follows:
Page 22
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
The Company adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the Company. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Investments in unlisted Company shares, whose market value can be reliably determined, are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in the Statement of Comprehensive Income for the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment.
Page 23
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
The company has elected to measure investments in associates at fair value through profit or loss, in accordance with Section 14 of FRS 102. Changes in fair value are recognised in profit or loss in the period in which they arise. This accounting policy provides more relevant and reliable information about the performance and financial position of the company, particularly where investments are held with a view to subsequent resale. The fair value of unlisted associates is determined based on valuation reports prepared by qualified external valuation specialists.
Page 24
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
If a financial asset is held for trading, it is classified as held at fair value through profit and loss (FVPL). Attributable transaction costs and changes in fair value are recognised in the Statement of Comprehensive Income in the period in which they arise.
Financial liabilities are classified at fair value through profit or loss (FVPL) if they are held for trading. Gains and losses on such financial liabilities are recognised within the Statement of Comprehensive Income in the period in which they arise. Included in this category are securities held for trading (long and short positions) which are valued at the last transaction price at the close of business on the Balance Sheet date with gains or losses recognised in the Statement of Comprehensive Income. Financial assets and liabilities are recognised on trade date. Interest arising on financial assets or liabilities that are held for trading is reported within interest income and expense respectively using the effective interest method. The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares. Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan. Investments in non-derivative instruments that are equity to the issuer are measured: - at fair value with changes recognised in the Profit and loss account if the shares are publicly traded or their fair value can otherwise be measured reliably; - at cost less impairment for all other investments Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment loss is recognised in the Profit and loss account. For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the curent effective interest rate determined under the contract. For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold
Page 25
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
at the reporting date.
Financial assets and liabilities are offset and the net amount reported in the Statement of financial position there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneoulsy. (a) fair value gains and losses on financial instruments. (b) fair value gains and losses on investments in subsidiaries held as an investment portfolio. (c) fair value gains and losses of investments in associates The carrying value of investments in subsidiaries and associates is disclosed in note 15. The carrying value of investments in financial instruments is disclosed in notes 19 and 26.
Page 26
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
During the year, the company changed its accounting policy in respect of its investment in associates. Previously, investments in associates were measured at cost less impairment. From the current year onward, such investments are measured at fair value through profit or loss, in line with the fair value accounting policy adopted for financial assets.
This change was made to better reflect the fair value of the company's holdings in its associates and to provide more relevant and reliable information to users of the financial statements. As a result of this change: The company’s investment in Fasanara Capital Ltd (subsequently held in Fasanara FF Holdings Ltd after a group reorganisation) has been restated at fair value as at 31 December 2023, based on a valuation performed by independent share valuation specialists. This has been accounted for as a prior year adjustment. The company’s investment in Fasanara FF Holdings Ltd is carried at fair value as at 31 December 2024, also based on a valuation by independent share valuation specialists. The impact of the change in accounting policy is reflected in the restated comparative figures and in the current year’s profit and loss and shown below. The change in accounting policy for the company’s investment in Fasanara Capital Ltd resulted in the following restatement of the prior year figures: Previously Adjustment Restated Reported Figures ----------- ----------- ----------- Statement of Financial Position (as at 31 Dec 2023) Investment in associate (Note 15) £1,149,430 £14,710,158 £15,859,588 Retained earnings £994,953 £14,710,158 £15,705,111 Statement of Profit or Loss (year to 31 Dec 2023) Fair value loss on investment £818,786 -£1,337,732 -£518,946 Profit/(loss) for the year £1,300,662 -£1,337,732 -£37,070
Page 27
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
The whole of the turnover is attributable to the provision of investment management services, advisory services and proprietary trading income. Included in turnover is income of €3,454,051 (2023: €3,049,562) in relation to items not at fair value through profit and loss relating to investment management and advisory services.
Analysis of turnover by country of destination:
Page 28
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Page 29
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Page 30
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Page 31
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
12.Taxation (continued)
There were no factors that may affect future tax charges.
Page 32
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Page 33
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Page 34
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Page 35
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Page 36
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Page 37
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Page 38
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Page 39
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
There is also a short term advance to Mr G Dessi of €196,671 payable on demand (2023: €274,055). Interest is charged on the loan which for the year ended 31 December 2024 was at rates of 5.5% through to 7.75%.
The immediate and ultimate parent company is Gordon Investments Limited (a company registered in Cyprus).
G Dessi is the ultimate controlling party.
Page 40
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
The internally adopted Risk Management Program mainly focuses on 4 risk areas
1. Market Risk (including Specific Risk, General Market Risk, Foreign Exchange Rate Risk, Interest Rate Risk, and Price Risk) 2. Liquidity Risk 3. Credit Risk and Large Exposures (Concentration Risk) 4. Operational Risk (including Legal Risk, Reputational Risk and IT Risk including Cyber-Security) These are deemed to be of material importance to the Firm, given the current business profile of the company and considering the macroeconomic environment where it operates. Clearly enough, the foregoing risk categories are monitored both individually and jointly, so as to highlight potential interdependences that could give rise to further adverse exposures. Risk assessment is carried out daily (online and end of day) by the Risk Management Departments and periodically (usually monthly) by the Board of Directors (BoD) and by the Risk Committee (RC). In particular, daily risk assessment mainly focuses on Market Risk and aims at checking whether all the Firm's accounts operate within the defined risk limits (defined by the BoD and ratified by the RC), while the periodical risk assessment takes into account internal/external business contingencies and develops a detailed guidance outlining the level and type of risks deemed to be acceptable. Market Risk Specific and General Market Risk: Based on MIFIDPRU provisions, the Risk Management Department monitors all the trading book positions in real time (both at the individual and aggregate/company level), to make sure that existing exposures do not exceed the risk thresholds established by the Board and further checks that the related regulatory capital requirements are reasonably above regulatory minima. Online computations are logged on company's servers and are always available for consultation upon demand. Interest Rate Risk: The company's exposure to interest rate fluctuations both on its cash positions and on its borrowings is limited. In particular, special attention is paid to trading book positions that are substantially hedged in order to minimise the potential adverse impact of a sudden interest rate swing. At December 2024, the company's overall position on Government Bonds, Bonds. Shares, ETFs, Options, Futures and Certificates amounted to EUR 7,791,067. Foreign Exchange Rate Risk: The company has bank accounts/revenues denominated in foreign currencies and is thus exposed to some FX risk. FX exposures hence arise from normal business activities being denominated in different currencies, with primary non EURO exposures being versus the GBP and the USD. As established by the Senior Management, hedging against Foreign Exchange Rate Risk falls under the full responsibility of the various traders, whose daily (non EURO denominated) activity is further monitored on a continuous basis by the Back Office, the Accounting and the Risk Management Departments.
Page 41
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Price Risk: The company is minimally exposed to price risk, as its primary business is trading and any positions held are most often liquidated within a few days. The company's investment policy further requires trading positions to be fully hedged against market fluctuations (with the sole exception of some Algo strategies, that are either required to close out all positions at market close, or to hold only a few K EUR at most) and preferably placed in highly liquid, low risk securities (such as highly rated government bonds).
Liquidity Risk The internally adopted Liquidity Management policy requires maintaining sufficient liquid resources to eliminate the risk that liabilities cannot be met as they fall due or that financial resources can only be secured at excessive cost: daily cash management is thus implemented through a close and continuous focus on liquid funds, carried out, in particular, by the Accounting Department in cooperation with the Back Office team. Based on FCA provisions (MIF002), the firm's liquidity buffer is calculated on a quarterly basis. Any issues arising in respect of the financial or liquidity situation in the intervening periods are reported to senior management for action to be taken as required. Liquidity management under normal business conditions: The company keeps an amount in its bank accounts at all times, with any cash required to be held for working capital purposes being held over and above this amount. This policy ensures that, under normal business conditions, the firm will always expect to have sufficient liquidity in order to be able to meet its liabilities as they fall due. Furthermore, the assets currently held are denominated in currencies which are readily convertible into other currencies in which liabilities may be denominated (typically UK Sterling, US Dollar), so that no liquidity risk is presented by this either. Liquidity management under stressed conditions: In addition to the daily and monthly checks described above, the company periodically considers the liquidity risk it may be exposed to under extreme market scenarios (stress testing). These are documented within its ICARA, which are prepared with the support of all departments and finally approved by the BoD.
Page 42
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
METHOD INVESTMENTS & ADVISORY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Credit risk and Large Exposures
Credit Risk refers to all potential losses the company may suffer in case a given counterparty fails to meet its contractual obligations. Stated in alternative terms, Credit Risk can be conceived as the risk of loss associated with an obligor's inability to fulfil its payment obligations. In practice, the foregoing definition includes both: (i) Counterparty exposure risk concentration risk: Defined as the risk of loss arising from large individual exposures and significant exposures to groups of counterparties whose likelihood of default is driven by common underlying factors, e.g. business sector, economy, geographical location, instrument type. (ii) Counterparty default risk: Defined as the potential loss arising from a counterparty's failure to meet the terms of any contract or otherwise fail to perform as agreed. The foregoing categories of credit risk refer both to the trading and to the non trading books and can potentially pose material issues to the company. In order to grant effective risk monitoring, the aforementioned risks are managed through a pervasive internal policy, structured as follows: Before dealing with any new counterparty, the Compliance Department verifies whether it is either authorised and regulated by the FCA (or an equivalent overseas regulator) or listed on a recognised investment exchange and submits the new counterparty to the RC for the official approval; Once the counterparty is officially accepted (the Compliance Department distributes a full list of approved counterparties to the staff on a monthly basis), the Risk Management Department checks that the corresponding trading book position does not exceed the officially established risk threshold, especially in all those cases where the said position has been kept open for more than 10 days; Senior Management is always kept informed of all large exposures, deemed to give rise to potential credit issues, so to allow for immediate remedial action whenever this is thought to be necessary. Based on the current business environment, credit risk is considered to be low, as the vast majority of the company's counterparties are large financial institutions. However, continuous attention is paid to settlement statistics and exposures to all counterparties with outstanding unsettled transactions. At December 2024, the company's largest exposures were predominantly held towards large financial institutions, This is fully consistent with the firm's main business. At December 2024, the company's largest exposure to a single counterparty was held towards a large EU financial Institution. Operational Risk Please refer to "Principal Risks and Uncertainties' section in the Strategic report. Clearly enough, in addition to the above risk categories, the company also pays particular attention to its capital (defined as equity + reserves) to make sure it is able to operate as a going concern. Following a strict prudential approach, the internal Capital Management policy also requires the company to hold surplus capital over FCA requirement on a continuous basis: the available capital has thus met the minimum capital requirements set out by the regulator all through 2024.
Page 43
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||