AEW Global Advisors (Europe) Limited
Annual Report and Financial Statements
For the year ended 31 December 2021
Company Registration No. 05406927 (England and Wales)
AEW Global Advisors (Europe) Limited
Company Information
Directors
Robert Oosterkamp
Richard Moreschi
Company number
05406927
Registered office
33 Jermyn Street
London
SW1Y 6DN
Auditors
Moore Kingston Smith LLP
Devonshire House
60 Goswell Road
London
EC1M 7AD
Bankers
Royal Bank of Scotland International Ltd
280 Bishopsgate
London
EC2M 4RB
AEW Global Advisors (Europe) Limited
Contents
Page
Strategic report
1 - 3
Directors' report
4 - 5
Directors' responsibilities statement
6
Independent auditor's report
7 - 9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 22
AEW Global Advisors (Europe) Limited
Strategic Report
For the year ended 31 December 2021
Page 1
The directors present the strategic report for the year ended 31 December 2021.
Review of the business
Since inception the company has achieved an investment result which is on average around 2% per annum higher than the benchmark, the FTSE EPRA/NAREIT Developed Europe Index. This result has been achieved with a lower risk than the benchmark as the volatility of these returns has been lower than the benchmark. Future investment strategy will remain consistent which should result in continued investment trend performance. AEW Global Advisors (Europe) Limited manages 21 separate mandates which are the European sleeve of Global mandates or funds, European only accounts and a European Absolute Return Fund. Performance fees have also been recognised in the year due to strong performance of the absolute return strategy.
Principal risk and uncertainties
The directors have overall responsibility for identifying, evaluating and managing major business risks. They regularly assess the business risks exposure and control including compliance assessments and determine any appropriate action required.
Principal business risks reviewed
are discussed below:
Allocation of responsibilities and control environment
The risk exists that there are weaknesses in the control environment. These risks are mitigated through the application of limits and controls and a monitoring process at operational level. An assessment of systems and controls is undertaken by the US parent, AEWCM, annually and includes a risk assessment of the firm.
Quality and integrity of personnel
The risk exists that the firm could lose key personnel reducing the quality of the team in place. This risk is mitigated by the monitoring of staff turnover ratios to ensure this does not rise above the industry average. Employee engagement is also conducted to reduce risk of staff turnover.
Compliance controls
The risk is that regulatory sanctions will be incurred or that the Capital Adequacy Ratio will fall below the firms minimum acceptable tolerance. This risk is mitigated by regular business practices reviews, breach analysis and maintenance of complaints logs. Key Risk Indicator analysis is also reported to Board of Directors and AEW Capital Management, the parent company.
IT Systems
The risk exists of unauthorised access and data corruption. To mitigate this all computers are password protected whilst only some authorised users are able to effect changes to the information on the computer.
AEW Global Advisors (Europe) Limited
Strategic Report (Continued)
For the year ended 31 December 2021
Page 2
Analysis based on Key Performance Indicators and future developments
The board monitors the progress of the company on a monthly basis by reference to the following key performance indicators:
1. Revenue
2. Profit
3. Assets Under Management (AUM)
The board are satisfied with the company’s performance during the year. AUM
figures
have increased during the year
to £743.6m (2020: £595.4m)
resulting in an increase in investment management fees to £3.0m (2020: £2.7m). In addition, the company earned £2.9m of performance fees during the year. The administrative expenses of £5.3m (2020: £3.4m) increased in 2021 primarily due to increased employee remuneration related to the increases in turnover. The overall increase in turnover generated profits for the financial year of £0.
65
m (2020: loss of £0.73m). The company did not pay a dividend for the year ended 31 December 2021 (2020: £nil). Payment of dividends will be reviewed annually.
The directors are optimistic about the future growth of the business and profitability.
Statement by the director relating to their statutory duties under section 172(1) of the Companies Act 2006
The directors, in line with their duties under s172 of the Companies Act 2006, act individually and collectively in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its member, and in doing so have regard, amongst other matters, to the:
-
Likely consequences of any decision in the long term;
-
Interests of the company's employees;
-
Need to foster the company's business relationships with suppliers, customers and others;
-
Impact of the company's operations on the community and the environment;
-
Desirability of the company maintaining a reputation for high standards of business conduct;
-
Need to act fairly as between members of the company.
The directors' regard to these matters is embedded in their decision-making process, through the company's business strategy, culture, governance framework, management information flows and stakeholder engagement processes. The company's business strategy is focused on achieving success for the company in the long term. In setting this strategy, the board takes into account the impact of relevant factors and stakeholder interests on the company's performance. The board also identifies principal risks facing the business and sets risk management objectives. The board promotes a culture of upholding the highest standards of business conduct and regulatory conduct. The board ensures these core values are communicated to the company's employees and embedded in the company's policies and procedures, employee induction and training programmes and its risk control and oversight framework. The board recognises that building strong and lasting relationships with our stakeholders will help us to deliver our strategy in line with our long term values, and operate a sustainable business.
Stakeholders
The board understands the importance of engagement with all of its stakeholders and gives appropriate weighting to the outcome of its decisions for the relevant stakeholder in weighing up how best to promote the success of the company. The board regularly discuss issues concerning employees, clients, suppliers, community and environment, regulators and its shareholder, which it takes into account in its decision-making process. In addition to this, the board seeks to understand the interests and views of the company's stakeholders by engaging with them directly when required. The below summarises the key stakeholders and how we engage with each:
AEW Global Advisors (Europe) Limited
Strategic Report (Continued)
For the year ended 31 December 2021
Page 3
Employees
Our employees contribute to a positive working culture and healthy working environment. Employees are key to the success of our business. In addition to aiming to be a responsible employer in our approach to pay and benefits, we continue to engage with our team to ascertain which training and development opportunities should be made available to improve our team's productivity and our individual employees' potential within the business. We continually invest in employee development and wellbeing to create and encourage an inclusive culture within the organisation. Our employee appraisal programme encourages employee feedback and facilitates the opportunity for both employees and directors to set performance goals on an annual basis. Our culture invites different perspectives, new ideas and opportunities for growth. We work hard to ensure employees feel welcome and are valued and recognised for their hard work.
Clients
Clients are at the centre of our business. We aim to build lasting relationships with current and potential clients to understand their objectives and requirements. We are in regular contact with clients in order to meet their needs.
Suppliers
We work with a wide range of suppliers and remain committed to being fair and transparent in our dealings with all of our suppliers. The company has procedures in place requiring due diligence of suppliers as to their internal governance, including for example, their anti-bribery and corruption practices, data protection policies and modern slavery matters. The company has systems and procedures in place to ensure suppliers are paid in a timely manner.
Regulators
Having a positive dialogue with our regulators means we can help them to understand our business model and strategy, our culture and our focus for doing the right thing for our clients. We aim to achieve a transparent relationship with our regulators, as well as providing an insight into any challenges we may face.
Community and The Environment
Considering the impact of our actions as a business on the wider interests of society is an important part of being a responsible business. As investors, our decisions can have a wider impact and we take our stewardship responsibilities seriously. We see ourselves as part of the communities in which we live and work, and seek to actively contribute, and actively engaging with them is an important part of who we are.
COVID-19
COVID-19 has had an impact on the business in 20
20
and 202
1
due to volatility of the share-prices of the investments in the portfolio. This has resulted in volatility of the assets under management and profitability of the firm. The portfolios managed by the firm have performed relatively well during these volatile times. Most European economies have now almost fully re-opened the negative effects of COVID-19 are subsiding.
Robert Oosterkamp
Director
25 April 2022
AEW Global Advisors (Europe) Limited
Directors' Report
For the year ended 31 December 2021
Page 4
The directors present their annual report and financial statements for the year ended 31 December 2021.
Principal activities
The principal activity of the company continued to be that of the provision of investment management services. The company is authorised and regulated by the Financial Conduct Authority ('FCA').
Results and dividends
The results for the year are set out on page 10.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Robert Oosterkamp
Richard Moreschi
Supplier payment policy
The company's current policy concerning the payment of trade creditors is to follow the CBI's Prompt Payers Code (copies are available from the CBI, Centre Point, 103 New Oxford Street, London WC1A 1DU).
The policy is to:
-
settle the terms of payment with suppliers when agreeing the terms of each transaction;
-
ensure that suppliers are made aware of the terms of payment by inclusion of the relevant terms in contracts; and
-
pay in accordance with the company's contractual and other legal obligations.
Trade creditors of the company at the year end were equivalent to 1 day's purchases, based on the average daily amount invoiced by suppliers during the year.
Future developments
The company has chosen to include this information in the Strategic Report in accordance with section 414C of the Companies Act 2006.
Auditor
The auditor, Moore Kingston Smith LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Energy and carbon report
As the company has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.
Statement of disclosure to auditor
Each of the directors in office at the date of approval of this annual report confirms that:
-
so far as the directors are aware, there is no relevant audit information of which the company's auditors are unaware, and
-
the directors have taken all the steps that they ought to have taken as directors in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information.
AEW Global Advisors (Europe) Limited
Directors' Report (Continued)
For the year ended 31 December 2021
Page 5
Pillar 3 Disclosures
Details of the company's unaudited Pillar 3 disclosures, required under section 11 of the FCA's Prudential Sourcebook for Banks, Building Societies and Investment Firms (BIPRU), can be found at the following website: www.aew.com/legal.
On behalf of the board
Robert Oosterkamp
Director
25 April 2022
AEW Global Advisors (Europe) Limited
Directors' Responsibilities Statement
For the year ended 31 December 2021
Page 6
The directors are responsible for preparing the Directors Report, Strategic Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
-
select suitable accounting policies and then apply them consistently;
-
make judgements 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 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.
AEW Global Advisors (Europe) Limited
Independent Auditor's Report
To the Members of AEW Global Advisors (Europe) Limited
Page 7
Opinion
We have audited the financial statements of AEW Global Advisors (Europe) Limited (the 'company') for the year ended 31 December 2021 which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity, the Statement of Cash Flows and notes to the financial statements, including significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the company's affairs as at 31 December 2021 and of its profit for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our 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 report. We are independent of the
company
in accordance with the ethical requirements that are relevant to our audit of the
financial statements
in the UK, including the FRC’s Ethical Standard
, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we 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 we have performed, we 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.
The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. The directors are 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, we 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 knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
AEW Global Advisors (Europe) Limited
Independent Auditor's Report (Continued)
To the Members of AEW Global Advisors (Europe) Limited
Page 8
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the Strategic Report and the Directors'
R
eport 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.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the Strategic Report and the Directors'
R
eport
.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-
the financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of
remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the Directors'
R
esponsibilities
S
tatement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of
financial statements
that are free from material misstatement, whether due to fraud or error.
In preparing the
financial statements
, the
directors are
responsible for assessing the company
'
s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
directors
either
intend
to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
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 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 responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
AEW Global Advisors (Europe) Limited
Independent Auditor's Report (Continued)
To the Members of AEW Global Advisors (Europe) Limited
Page 9
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.
Our approach was as follows:
-
We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006, UK financial reporting standards as issued by the Financial Reporting Council, and UK taxation legislation.
-
We obtained an understanding of how the company complies with these requirements by discussions with management and those charged with governance.
-
We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.
-
We inquired of management and those charged with governance as to any known instances of non-compliance or suspected non-compliance with laws and regulations.
-
Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
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 we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
Thomas Moore (Senior Statutory Auditor)
for and on behalf of Moore Kingston Smith LLP
25 April 2022
Chartered Accountants
Statutory Auditor
Devonshire House
60 Goswell Road
London
EC1M 7AD
AEW Global Advisors (Europe) Limited
Statement of Comprehensive Income
For the year ended 31 December 2021
Page 10
2021
2020
Notes
£
£
Turnover
2
5,977,278
2,662,439
Administrative expenses
(5,326,693)
(3,394,114)
Operating profit/(loss)
4
650,585
(731,675)
Interest receivable and similar income
7
955
Profit/(loss) before taxation
650,585
(730,720)
Tax on profit/(loss)
8
(309)
Profit/(loss) for the financial year
650,585
(731,029)
The Profit and Loss Account has been prepared on the basis that all operations are continuing operations.
AEW Global Advisors (Europe) Limited
Balance Sheet
As at 31 December 2021
31 December 2021
Page 11
2021
2020
Notes
£
£
£
£
Current assets
Debtors
10
3,956,980
654,685
Cash at bank and in hand
1,664,486
1,032,849
5,621,466
1,687,534
Creditors: amounts falling due within one year
12
(1,985,736)
(702,389)
Net current assets
3,635,730
985,145
Capital and reserves
Called up share capital
13
2,200,000
200,000
Profit and loss reserves
1,435,730
785,145
Total equity
3,635,730
985,145
The financial statements were approved by the board of directors and authorised for issue on 25 April 2022 and are signed on its behalf by:
Robert Oosterkamp
Director
Company Registration No. 05406927
AEW Global Advisors (Europe) Limited
Statement of Changes in Equity
For the year ended 31 December 2021
Page 12
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2020
200,000
1,516,174
1,716,174
Year ended 31 December 2020:
Loss and total comprehensive income for the year
-
(731,029)
(731,029)
Balance at 31 December 2020
200,000
785,145
985,145
Year ended 31 December 2021:
Profit and total comprehensive income for the year
-
650,585
650,585
Issue of share capital
13
2,000,000
-
2,000,000
Balance at 31 December 2021
2,200,000
1,435,730
3,635,730
AEW Global Advisors (Europe) Limited
Statement of Cash Flows
For the year ended 31 December 2021
Page 13
2021
2020
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
16
(1,368,363)
(1,254,545)
Income taxes (paid)/refunded
120,260
Net cash outflow from operating activities
(1,368,363)
(1,134,285)
Investing activities
Interest received
955
Financing activities
Proceeds from issue of shares
2,000,000
Net increase/(decrease) in cash and cash equivalents
631,637
(1,133,330)
Cash and cash equivalents at beginning of year
1,032,849
2,166,179
Cash and cash equivalents at end of year
1,664,486
1,032,849
AEW Global Advisors (Europe) Limited
Notes to the Financial Statements
For the year ended 31 December 2021
Page 14
1
Accounting policies
Company information
AEW Global Advisors (Europe) Limited is a
private
company
limited by shares
incorporated in
England and Wales
.
The registered office is
33 Jermyn Street, London, SW1Y 6DN.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest
pound.
The financial statements have been prepared on the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
At the balance sheet date of 31 December 2021, the company and had net assets of £3,635,730 and generated a profit for the year of £650,585. At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future and a significant surplus on its regulatory capital requirement. The company also has the support of the wider group. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements
true
1.3
Turnover
Turnover represents fees receivable for investment management services provided net of VAT
as applicable
.
1.4
Cash and cash equivalents
Cash and cash equivalents include cash in hand
and
deposits held at call with banks
.
1.5
Financial Instruments
The Company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial assets are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets are classified into specified categories. The classification depends on the nature and purpose of the financial assets and is determined at the time of recognition.
Basic financial assets
Basic financial assets, which include
debtors
and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
AEW Global Advisors (Europe) Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2021
1
Accounting policies
(Continued)
Page 15
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in
profit
or
loss
, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Loans and receivables
Trade debtors
, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment.
Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.
Impairment of financial assets
Financial assets, other than those
held
at
fair value through profit and loss
, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
AEW Global Advisors (Europe) Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2021
1
Accounting policies
(Continued)
Page 16
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
Basic financial liabilities
Basic financial liabilities, including
creditors
, bank loans, loans from
fellow group companies and preference shares that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective
interest rate method.
Trade creditors
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts payable are classified as
current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities.
Trade creditors
are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
s
ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in
profit
or
loss
in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value th
r
ough profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
Trade creditors
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts payable are classified as
current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities.
Trade creditors
are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
1.6
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
AEW Global Advisors (Europe) Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2021
1
Accounting policies
(Continued)
Page 17
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.7
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the
profit and loss account
because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
In accordance with FRS 19, deferred tax is recognised as a liability or asset if transactions or events that give the company the obligation to pay more tax in future or a right to pay less tax in future have occurred by the balance sheet date.
1.8
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.9
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
2
Turnover and other revenue
An analysis of the company's turnover is as follows:
2021
2020
£
£
Turnover analysed by class of business
Investment management fees
3,031,258
2,662,439
Performance fees
2,946,020
-
5,977,278
2,662,439
AEW Global Advisors (Europe) Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2021
2
Turnover and other revenue
(Continued)
Page 18
2021
2020
£
£
Turnover analysed by geographical market
United States of America
5,977,278
2,662,439
2021
2020
£
£
Other significant revenue
Interest income
-
955
3
Critical accounting estimates and judgements
The directors consider that there are no critical accounting estimates and judgements made in preparing these financial statements.
4
Operating profit/(loss)
2021
2020
Operating profit/(loss) for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
12,000
11,000
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2021
2020
Number
Number
Finance and administration
4
4
Their aggregate remuneration comprised:
2021
2020
£
£
Wages and salaries
3,748,732
1,607,757
Social security costs
512,778
217,382
Pension costs
30,414
36,517
4,291,924
1,861,656
AEW Global Advisors (Europe) Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2021
Page 19
6
Directors' remuneration
2021
2020
£
£
Remuneration for qualifying services
1,660,095
885,272
Company pension contributions to defined contribution schemes
4,000
5,001
1,664,095
890,273
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2020 - 1).
Remuneration disclosed above are exclusively related to the highest paid director.
7
Interest receivable and similar income
2021
2020
£
£
Interest income
Interest on bank deposits
955
Investment income includes the following:
Interest on financial assets not measured at fair value through profit or loss
955
8
Taxation
2021
2020
£
£
Current tax
UK corporation tax on profits for the current period
309
AEW Global Advisors (Europe) Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2021
8
Taxation
(Continued)
Page 20
The actual charge for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:
2021
2020
£
£
Profit/(loss) before taxation
650,585
(730,720)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
123,611
(138,837)
Tax effect of utilisation of tax losses not previously recognised
(123,611)
Unutilised tax losses carried forward
138,869
Under/(over) provided in prior years
309
Provision adjustments
(32)
Taxation charge for the year
-
309
AEW Global Advisors (Europe) Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2021
Page 21
9
Financial instruments
2021
2020
£
£
Carrying amount of financial assets
Instruments measured at fair value through profit or loss
3,949,164
637,040
Carrying amount of financial liabilities
Measured at amortised cost
1,365,554
217,519
10
Debtors
2021
2020
Amounts falling due within one year:
£
£
Amounts owed by group undertakings
3,909,569
605,016
Other debtors
4,791
2,858
Prepayments and accrued income
42,620
46,811
3,956,980
654,685
Trade debtors disclosed above are measured at amortised cost.
11
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
30,414
36,517
The company operates a defined contribution pension scheme for all qualifying employees.
The assets of the scheme are held separately from those of the company in an independently administered fund.
12
Creditors: amounts falling due within one year
2021
2020
£
£
Trade creditors
784
Amounts due to fellow group undertakings
128,809
Other taxation and social security
619,397
484,870
Other creditors
2,535
2,534
Accruals and deferred income
1,363,020
86,176
1,985,736
702,389
AEW Global Advisors (Europe) Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2021
Page 22
13
Share capital
2021
2020
£
£
Ordinary share capital
Issued and fully paid
2,200,000 Ordinary shares of £1 each
2,200,000
200,000
2,200,000
200,000
On 28 June 2021 2,000,000 ordinary shares of £1 each were issued at par for cash.
14
Related party transactions
The company has taken advantage of exemption available in FRS Section 33.1A not to disclose transactions with any fellow wholly owned group companies.
15
Ultimate controlling party
The company's immediate parent entity is AEW Capital Management LP, registered in the United States of America. The ultimate controlling party is Groupe BPCE, registered in France.
The group financial statements may be obtained from the Finance Director, Groupe BPCE, 30 Avenue Pierre Méndes-France, 75013 Paris, France.
16
Cash absorbed by operations
2021
2020
£
£
Profit/(loss) for the year after tax
650,585
(731,029)
Adjustments for:
Taxation charged
309
Investment income
(955)
Movements in working capital:
(Increase)/decrease in debtors
(3,302,295)
8,043
Increase/(decrease) in creditors
1,283,347
(530,913)
Cash absorbed by operations
(1,368,363)
(1,254,545)
17
Analysis of changes in net funds
1 January 2021
Cash flows
31 December 2021
£
£
£
Cash at bank and in hand
1,032,849
631,637
1,664,486
2021-12-31
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