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EXHIBIT 4
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SN日N丫 Holdings
乙介刀 ited, Gibralta厂
Financial Stateme门 tsfor the year ended
0e'e犷7功e厂 31,2口里夕
and 加dependent 八 U苗tor's Report
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丁ABLE OF CON丁〔N丁S
Page
日NAN CIAL S丁A丁〔MEN丁S FOR 丁日〔丫EAR ENDED DECEMBER 31, 2019:
Independent auditor's report 2 to 3
Income statement and statement of other comprehensive income 4
Statement of financial position 5
Statement of changes in equity 6
Statement of cash flows 7
Notes to financial statements 8 to 17
Abbreviations
CHF - Swiss Francs
USD - United States Dollars
EUR - Euros
GBP - UK Pounds Sterling
OTC - OvertheCounter
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Deloitte
Deloitte AG
洲ngstwe心 strasse 11
8005 Zurich
Schweiz
Phone: +41 (0)58 279 6000
Fax: +41 (0)58 279 6600
www.deloitte.ch
Independent Auditor's Report
To the Shareholders of
SNBNY Holdings Limited, Gibraltar
Report on the Financial Statements
0pinion
In accordance with the terms of our engagement, we have audited the financial statements of SNBNY Holdings
Limited (the Company), which comprise the income statement, the statement of other comprehensive income for
2019, the statement of financial position as at December 31, 2019, the statement of changes in equity and
statement of cash flows for the year then ended, and notes to the financial statements.
In our opinion, the accompanying financial statements presentfairly, in all material respects, the financial position
of the Company as at December 31, 2019, and its financial performance and its cash flows for the year then ended
in accordance with the financial reporting provisions set out in the notes to the financial statements.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). 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 Gibraltar, 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.
0幼erMatter 一 Res份记tion on0istribution
Our report is intended solely for the Shareholders and should not be distributed to parties other than the
Shareholders.
Respons泊ilities 可 Management and 功e Boa心可 Directors 为r the Financia巧tatements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with
the financial reporting provisions set out in the notes to the financial statements and for such internal control as
Management determines 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, Management is responsible for assessing the Company's ability to continue as
a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of
accounting unless Management either intends to liquidate the Company or to cease operations, or has no realistic
alternative but to do so.
The Board of Directors is responsible for overseeing the Company's financial reporting process.
Auditor's Respons泊访ties 为rtheAu血可幼e Financial Statements
Our o 切 ectives 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 h咭h level of assurance but is not a guarantee that an audit conducted in accordance with
International Standards on Auditing (ISAs) 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.
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De协面 tte.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism
throughout the audit. We also:
Identi份 and assess the risks of material misstatement of the financial statements, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the Company's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by Management.
Conclude on the appropriateness of Management's use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditor's report to the related
disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report.
However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events in a
manner that achieves fair presentation.
We communicate with the Board of Directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify during
our aud比
Deloitte Ltd
Sandro Schonenberger Pietro Di Fluri
Auditor in charge
Zurich, June 24, 2021
Endosures
Financial statements (income statement and statement of other comprehensive income, statement of financial
position, statement of changes in equity, statement of cash flows and notes)
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SN日N丫日OLDINGS 日MI丁〔D
INCOMES丁A丁〔MEN丁 AND S丁A丁〔MEN丁 OF 0丁日ER COMPRE日ENSIVE INCOME FOR 丁日〔丫〔AR ENDED DECEM日ER 31, 2019
(All amounts expressed in USD 000)
Income statement
Note
interest expense
INet in1terest in1come o ． 、上例
Net interest income after credit losses 8 I (18)
Result from trading activities and the fair value option 0
Result from changes in fair value of subsidiaries 872.218
Other income 0
Total operating income 872.200
General expense 9 (83)
Total operating expense
Currency exchange losses
Profit before taxes 872.116
Profit after taxes 872.116
Other Comprehensive income:
Other comprehensive income 0
Total Comprehensive income for the year 872.116
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SN日N丫日OLDINGS 日MI丁〔D
STATEMENT OF FINANCIAL POSITION AS AT DECEMBER 31, 2019
(All amounts expressed in USD 000)
Assets
Note 3 1. 12.2019
Cash 20
Investment in subsidiaries 11 1.675.000
Total assets 1.675.020
Liabilities and equity
Note 3 1. 12.2019
Borrowings 10 449
丁ota日iab山ties 449
Share capital 207少 666
Share premium 1.466.947
Retained earnings (42)
Shareholders' equity 1.674.571
Total equity 1.674.571
Total liabilities and equity 1.675.020
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SN日N丫日OLDINGS 日MI丁〔D
S丁A丁〔MEN丁 OF CHAN6ES IN〔
Q日l丁丫「OR 丁日〔丫〔AR〔
NDED 31 DECEM日ER 2019
(All amounts expressed in USD 000)
Note Share capital Capital reserves Retained earnings Total equity
Balance as of 1 January 2019 100.001 706.401 (3.946) 802.456
Net profit 872.115 872.115
Capital increase/(decrease) 12 107.665 760.546 (868.211) 0
Balance as of 31 December 2019 207.666 1.466.947 (42) 1.674.571
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SN日N丫日OLDINGS 日MI丁〔D
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2019
(All amounts expressed in USD 000)
2019
Profit for the Year 872.116
Reconciliation to net cash flow from operating activities
Result from changes in fair value of subsidiaries (872.218)
Net(increase)/decrease in assets relating to operating activities: 0
。
Net increase/(decrease) in liabilities relating to operating activities
。
Cash flow from operating activities
Cash flow from investing activities 0
Cash flow from financing activities
Borrowings 56
Cash flow from financing activities 56
Net increase/(decrease) in cash and cash equivalents (46)
Cash and cash equivalents, be目nning of the year 66
Cash and cash equivalents as at the balance sheet date 20
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SNBNY HOLDINGS 日M汀ED
NO丁〔S 丁0 FINANCIAL S丁A丁〔MEN丁S FOR 丁日〔丫〔AR ENDED DECEM日ER 31, 2019
(All amounts expressed in USD 000)
1. General Information
SNBNY Holdings Limited ("the Company") was incorporated in Gibraltar on June 28, 1995 for the principal purpose of investing
in the common stock of Safra National Bank of New York ("the Bank"). In June 1995, the Company acquired 15,710 newly
issued shares of the Bank for US$5 million. In June 1996, the Company acquired an additional 173,790 shares increasing its
participation to 99.97% of the outstanding shares of the Bank. In August 2004, the Company contributed 99.97% of the
outstanding shares of the Bank to Safra New York Corporation ("SNYC"), a U.S. financial holding company, in exchange for
1,000 shares or 100% of the common stock of the entity and thus, remains the ultimate parent company of the Bank.
The principal activity of the Company is that of a private investment holding company. Under the United States Bank Holding
Company Act of 1956, SNBN丫日old ings 日mited is a Bank 日olding Company with respect to Safra National Bank of New 丫ork
("the Bank") via its 100% holding of Safra New York Corporation. Additionally, Safra New York Corporation is the owner of other
businesses, such as J. Safra Asset Management Corporation and Planet 550 Corp.
The subsidiary Bank engages in both wholesale and private banking under a federal charter and is a member of the Federal
Deposit Insurance Corporation ("FDIC") and the Federal Reserve System ("FED"). The office of the comptroller of the currency
("the 0CC") regulates and supervises the Bank.
The Company's financial statements are presented in USD, which is also the functional currency of the Company.
These financial statements were approved by the Board of Directors and authorised for issue on June 24, 2021.
2. Basis of presentation
These financial statements of the Company have been prepared in accordance with the accounting principles set out below
("Accounting Principles"). These are based on the International Financial Reporting Standards (IFRS) yet do not reflect all the
requirements of that framework. Whilst the financial statements are prepared to fairly present the financial conditions and
results of operations in accordance with IFRS, no comparative information is disclosed.
The financial statements have been prepared in accordance with the historical cost basis, except as disclosed in the accounting
policies below. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date, regardless of whether that price is directly observable or estimated using
another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the
characteristics of the asset or liabil的 if market participants would take those characteristics into account when pricing the
asset or liability at the measurement date.
The Company also prepares consolidated financial statements in accordance with IFRS.
Going concern
The directors have, at the time of approving the financial statements, a reasonable expectation that the Company have
adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going
concern basis of accounting in preparing the financial statements.
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3. Accounting principles
3.1. Foreign currency translation
The Company's presentation currency is the US Dollar (USD). The Company uses the following main FX rates:
Spot Rate Average Rate
31.12.2019 2019
GBP/USD 1,3247 1,2875
The Company companies prepare their financial statements in their respective functional currencies. Transactions in a
currency other than the functional currency are recognized at the spot rate on the transaction date. Exchange differences
arising between the date of a transaction and its subsequent settlement are recognized in the income statement.
At the balance sheet date, monetary assets and liabilities denominated in a foreign currency are translated into the functional
currency using the closing exchange rate, and unrealized exchange differences are recognized in the income statement. Non-
monetary assets and liabilities not measured at fair value are translated into the functional currency at the historical exchange
rate. Non-monetary assets and liabilities measured at fair value are translated into the functional currency using the closing
exchange rate.
Any unrealized gains or losses arising on the foreign currency translation are recognized in line with the recognition of gains or
losses on the change in fair value of the item.
Assets and liabilities of branches that are denominated in a different functional currency to the Company are translated into
US dollars at the closing exchange rates. Average exchange rates for the business year are used for items in the income
statement, statement of other comprehensive income and statement of cash flows. Exchange differences arising from the use
of closing exchange rates and average exchange rates are recognized as currency translation adjustments in the statement of
other comprehensive income.
3.2. Recognition of Income
3.2.1. Interest Income
Interest income and expenses are recognized for all loans and receivables an accrual basis, using the effective interest method.
When calculating the effective interest rate, the Company estimates cash flows considering all contractual terms of the
financial instrument, but does not consider future credit losses. The calculation includes all amounts paid or received between
parties to the contract that are an integral part of the effective interest rate, transaction costs, and any other premiums or
discounts. Negative interest on assets is recorded as an interest expense, and negative interest on liabilities is recorded as
interest income.
For financial assets other than purchased or originated credit-impaired financial assets (i.e. assets that are credit impaired on
initial recognition), the effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees
and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or
discounts) excluding expected credit losses, through the expected life of the debt instrument, or, where appropriate, a shorter
period, to the gross carrying amount of the debt instrument on initial recognition. For purchased or originated credit-impaired
financial assets, a credit adjusted effective interest rate is calculated by discounting the estimated future cash flows, including
expected credit losses, to the amortized cost of the debt instrument on initial recognition
3.3. Investment in subsidiaries, associates and joint ventures
The investments in subsidiaries, associates and joint ventures assets are investments in subsidiary undertakings which are
intended to be held for an indefinite period of time, but which may be sold in response to changes in the Company's financial
environment. The Company has elected to account for its investments in subsidiary undertakings at fair value in accordance
with IFRS 9 requirements, as permitted by lAS 27.
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3.4. Financial instruments
3.4.1. Initial Recognition and derecognition
The Company uses trade date accounting to recognize financial transactions. The Company recognized a financial asset or
financial liability at the transaction date (i.e. trade date) at fair value of the consideration given or received, including directly
attributable transaction costs. In the case of financial assets orfinancia日iabilities measured atfairva旧e through profit or loss,
the transaction costs are immediately recognized in the income statement. At the date on which the Company enters into a
sales contract for financial assets and the conditions for derecognition are met, the relevant financial asset is derecognized
from the statement of financial position.
Recognition or derecognition is mainly associated with the transfer of the contractual rights to receive cash as well as the
respective risks and rewards (market risk).
3.4.2. Measuring fair values, fair value hierarchy and recognition of 1-day profit
For information on the measurement of fair value of financial instruments, the valuation techniques used, the fair value
hierarchy and day 1 profit, please refer to note 10 "Fair value of financial instruments".
3.4.3. Loans and receivables (amortized cost)
These positions are held to collect contractual cash flows that are solely payments of principal and interest on the principal
amount outstanding. The cash holdings in the balance sheet item "Cash" and other positions are recognized at amortized cost
less expected credit losses.
The change in expected credit losses is shown in "Net interest income". Interest on positions that are not past due is accrued
in the period in which it is earned using the effective interest method and recognized in "Net interest income". Negative
interest is shown as interest expense.
3.4.4. Other financial instruments at FVTPL (FVTPL)
Financial assets that do not meet the criteria for being measured at amortised cost or FVTOCI are measured at FVTPL.
Specifically, debt instruments that do not meet the amortised cost criteria or the FVTOCI criteria are classified as at FVTPL. In
addition, debt instruments that meet either the amortised cost criteria or the FVTOCI criteria may be designated as at FVTPL
upon initial recognition if such designation eliminates or significantly reduces a measurement or recognition inconsistency (so
called 'accounting mismatch') that would arise from measuring assets or liabilities or recognising the gains and losses on them
on different bases.
Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any fair value gains or losses
recognised in profit or loss to the extent they are not part of a designated hedging relationship (see hedge accounting policy).
The net gain or loss recognised in profit or loss includes any dividend or interest earned on the financial asset and is included
in the "Interest Income" line item (note Error! Reference source notfound.).
3.4.5. Derivatives instruments (FVTPL)
Derivative instruments are recognized at fair value. Provided no hedge accounting is applied for the relevant derivatives, all
income components are recognized in Results from trading activities
3.4.6. Loans to affiliates and associates
These positions are recognized at amortized cost. Interest is accrued in the period in which it is incurred using the effective
interest method and recognized in "Net interest income". Negative interest is shown as interest income.
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3.5. Provisions
The Company recognises a provision if, as a result of a past event, the Company has a current liabil的 at the balance sheet date
that will probably lead to an outflow of funds (which can include legal fees), at the level of which can be reliably estimated.
The recognition and release of provisions are recognised in the line item "Provisions and Losses". If an outflow of funds is
unlikely to occur or the amount of the liability cannot be reliably estimated, a contingent liability is shown. A contingent liability
is also shown 代 as a resu比 of a past event, there is a possible liabil的 at the balance sheet date whose existence depends on
future developments that are not fully within the Company's control. If the possibility of an outflow of resources is remote,
neither a provision nor a contingent liability is reported.
4. Critical accounting estimates and judgements in applying accounting policies
The preparation of financial statements requires the Company's management to make judgements, estimates and assumptions
that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Such
estimates and assumptions are based on the best available information and are adapted continuous份 in line with new findings
and circumstances but may involve significant uncertainty at the time they are made. Actual results may differ from these
estimates.The Company believes that the estimates and assumptions it has made are appropriate, and that the Company's
financial statements are therefore a fair representation of its financial position and results in all material respects.
The most relevant areas in which the Company exercises judgment include the application of the Company's estimations and
assumptions with respect to: fair value of investments in subsidiaries (Note 10.3 and 111).
5. Changes to critical accounting estimates
There are no changes to critical accounting estimates during the reporting period.
6. Effect of changes in accounting policy and changes in estimates
The effect of changes in accounting policy and changes in estimates are recognized in the income statement in the period in
which the Company changes its accounting policy or estimates.
7. Risk management
7.1. General considerations
A clearly defined, transparent and integrated risk management policy is adopted and is adapted continuously to the latest
knowledge. Substantial human and technological resources are made available forthis purpose Active risk managementshould
make it possible to minimize undesirable risks and to make optimum use of the Company's capital for the benefit of a日
shareholders.
7.2. Risk culture
The standard of risk management achieved by a financial Company is not only a question of compliance with formalized internal
and external rules. Accordingly, if not even greater, significance is the risk awareness of decision-makers.
The quantitative criteria on which attention frequently focuses is only one component of a comprehensive risk management
system. The development of an appropriate risk culture as part of a financial Company's overall culture is highly important. A
central element of such a risk culture is the discipline and thoroughness with which participants respond to their tasks in the
risk management process.
7.3. Organization of risk management
The Board of Directors has performed adequate and regular risk assessments and introduced any remedial measures required
to minimize the risk of material misstatement in the financial statements as far as possible. Furthermore, the Board of Directors
is responsible for the formulation and implementation of the Company's risk policy. It determines the risk strategy, the
organizational framework for risk management such as limits and systems, the maximum risk tolerance and respective
responsibilities. The appropriateness of the risk policy is reviewed annually.
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Currency risk
The level of exposure by currency is subject to approved limits. The table below summarizes the exposure to foreign currency
exchange rate risk, categorized by currency.
Concentration of assets and liabilities items
December 31,2019 USD Total
Assets:
Cash and cash equivalents 20 20
Investments in subsidiaries 1.675.000 1.675.000
Total balance sheet assets 1.675.020 1.675.020
Delivery entitlements from spot exchange, forward
forex and forex options transactions
Total assets 1.675.020 1.675.020
Liab山ties:
Borrowings 449 449
Total Liabilities 449 449
Share capital 207.666 207.666
Share premium 1.466.947 1.466.947
Retained earnings (42) (42)
Total Equity 1.674.571 1.674.571
Total balance sheet liabilities 1.675.020 1.675.020
Total Liabilities 449 449
Net currency position 1.674.571 1.674.571
7.3.1. Liquidity Risk
Liquidity risk refers to the potential inability of the Company to meet its payment obligations or failure to meet requirements
imposed by banking regulations.The prime objective is to guarantee the Company's abil的 to meet its payment ob 馆ations at
all times and to ensure compliance with legal requirements on liquidity. A key task of the Company is to monitor all relevant
liquidity risk factors. These include money flows between subsidiaries and the parent Company, inflows and outflows of client
funds and changes in the availability of liquidity reserves. These liquidity aspects are considered in aggregate but also per
currency. As a supporting strategy, target bandwidths are set for surplus coverage of minimum liquidity. These are actively
monitored and corresponding measures are taken if liquidity falls below the specified targets. A contingency funding plan may
be triggered if certain conditions are met. Stress testing allows for the impact of larger outflows combined with the
deterioration of Company assets on the liquidity indicators to be assessed.
Due
Due Due within 12 Due more
within 3 N0
USD 000 At sight within 3 mont卜sto5 t卜an 5 Total
to 12 maturi钾
months 丫ears 丫ears
months
Cas卜 20 20
Loans to affiliates
Investments in subsidiaries 1.675.000 1.675.000
Total 31.12.2019 20 1.675.000 1.675.020
Borrowings 449 449
Total 31.12.2019 449 449
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7.3.2. Operational risk
Operational risks are defined as the risk of losses that arise through the inadequacy or failure of internal procedures, people
or systems, or as a consequence of external events．丁 h 污 definition indudes a｝日 egal and supervisory risks, 匕 ut excludes strategic
risks and risks to the Company's reputation.The Company manages its operational risks on the basis of a consistent Company-
wide framework. The underlying processes for monitoring operational risks are based on directives and on reporting at the
appropriate level. The regular measurement, reporting and assessment of segment specific risk indicators enable potential
hazards to be detected well in advance. A regular self-assessment is performed involving representatives from specialist units
and risk experts in order to identify and catalogue the underlying risks and inadequacies of a specific area, and these
procedures are reviewed on a regular basis.
7.3.3. IT and Information security risk
IT risk refers to a subset of operational risk due to technology- related factors. It may lead to potential business disruptions as
a result of a deficient implementation of IT risk governance. It comprises, but is not limited to, user access management, the
evolution of the IT infrastructure and IT operations management. Information security risk relates to the potential inability of
the Company to anticipate, resist, or react to a threat that exploits vulnerabilities, causing harm to the organization. This
includes cyber risk which is more specific to the use of technology. The Company aims to ensure that data is protected against
intentional and unintentional abuse, in line with the applicable regulations and the best industry practices. The emergence of
potential new threats is continuously monitored by the Company. In relation to both IT and information security, a dedicated
IT Risk Management Committee meets on a quarterly basis to review and address those risks.
7.3.4. Reputational Risk
Reputation is a critical element shaping stakeholders' perception of the Company's public standing, professionalism, integrity
and reliability. Reputational risk can be defined as the existing or potential threat of negative commercial impacts on the
Company created by stakeholders' negative perception of the Company. It is most often an event, which has occurred as a
direct consequence of another risk materializing. To identify potential reputational risks at an early stage and take appropriate
preventive measures, the Company strives to insti日 an intrinsic risk culture in its sta代 structures and processes.
7.3.5. Legal and compliance risk
Legal risks relate to potential financial loss as a result of the deficient drafting or implementation of contractual agreements or
as a consequence of contractual infringements or illegal and/or culpable actions. It also covers the deficient implementations
of changes in the legal and regulatory environment. The legal department is involved as soon as a potential risk has been
identified. It assesses the situation and沂 appropriate, instructs an externa日awyer with whom it works to resolve the issue.
Such risks have been assessed and provisions have been set aside on a case七y-case basis.
Compliance risk is defined as the risk of legal sanctions, material financia日oss, or loss to reputation the Company may suffer
as a result of its failure to comp 份 with applicable laws, its own regulations, code of conduct, and standards of bes灯good
practice.
Compliance risk relates to many areas, such as anti-money laundering and combating the financing of terrorism, regulatory tax
compliance, breaches of the cross-border rules, conduct risks including suitability and appropriateness of products and
investments, and market conduct rules.
7.3.6. Business Strategic risk
Business and strategic risk is inherent to external or internal events or decisions resulting in strategic and business objectives
not being achieved. Assessment reviews are conducted on a regular basis to evaluate the impact of potential strategic and
business risks and define mit咭ating measures the balance sheet position "Liabilities from Other financial instruments
designated at fair value through profit or loss" or "Other financial instruments designated at fair value through profit or loss",
respective呼
Potential derivative positions also held for hedging purposes are reported under "Positive (or negative) replacement values of
derivative financial instruments".
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8. Net Interest Income
Net interest income after credit losses
3 1.12.2019
Total interest income from financial instruments at amortized cost 0
Total dividend and interest income from financial instruments at fair value through profit and loss 0
Total interest income 0
Interest expense from Borrowings (18)
Total interest expense from financial instruments at amortized cost (18)
Total credit loss (expense)/recovery 0
Total net interest income after credit loss (18)
9. General expense
2019
USD 000
General and administrative expenses
丁otal
10. Fair values of financial instruments
The fair value of financial instruments and investment properties contained in the statement of financial position of the
Company based on the valuation methods explained below is the same as the book value. There is no deviation between fair
va旧eand bookva旧e.
10.1. Measurement Methodology
Financial instruments
Derivative financia日nstruments, trading portfolio assets and liabilities, other financial assets des咭nated at fair value and other
financial liabilities designated at fair value and investment properties are recognised at fair value in the statement of financial
position. Changes in the fair values of these instruments are recognised in the income statement as "result from trading
activities and the fair va旧e option".
The transaction price represents the best indication of the fair value of financial instruments unless the fair value of the
financial instrument or investment property can be better determined by comparison with other observable current market
transactions involving the same instrument (level 1 instrument) or is based on a valuation method that uses only observable
market data (level 2 instrument). In this case, any difference between fair value and the transaction price is recognised as day-
1 profit or loss in the line item "result from trading activities and the fair value option". For level 3 instruments, day-i result is
deferred over the duration of the product.
Fair value is determined using quoted prices in active markets when these are available. In other cases, fair value is determined
using a valuation model. Valuation models use inputs and rates derived from observable market data, such as interest rates
and foreign exchange rates, when available. Valuation models are primarily used forthe valuation of issued structured products
and derivatives.
The output of a model is typically an estimate or approximation of a value that cannot be determined with certainty, and the
valuation techniques employed may not fully reflect all factors relevant to the positions held. Significant risks arise when
models are used to value financial instruments and calculate hedging ratios. The consequence of an inadequate model could
be an incorrect valuation leading to an incorrect risk assessment and an incorrect hedging position, both of which could have
a financia日mpa改．
一 14-
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For financial instruments, all models for are validated before they are used as a basis for financial reporting, and they are
periodically reviewed thereafter by qualified specialists who operate independently from model developers and users.
Whenever possible, the valuations derived from models are compared with the prices of similar financial instruments and with
actual values once realised in order to further validate and calibrate the models. Valuation models are generally applied
consistently across products from one period to the next, ensuring the comparability and continuity of valuations over time.
There were no significant changes in the valuation models used for the reporting period.
10.2. Fair Value Hierarchy
All financial assets and liabilities as well as investment properties at fair value are
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FILED: NEW YORK COUNTY CLERK 03/03/2023 12:45 PM INDEX NO. 650710/2023 NYSCEF DOC. NO. 22 RECEIVED NYSCEF: 03/03/2023 EXHIBIT 4 FILED: NEW YORK COUNTY CLERK 03/03/2023 12:45 PM INDEX NO. 650710/2023 NYSCEF DOC. NO. 22 RECEIVED NYSCEF: 03/03/2023 SN日N丫 Holdings 乙介刀 ited, Gibralta厂 Financial Stateme门 tsfor the year ended 0e'e犷7功e厂 31,2口里夕 and 加dependent 八 U苗tor's Report FILED: NEW YORK COUNTY CLERK 03/03/2023 12:45 PM INDEX NO. 650710/2023 NYSCEF DOC. NO. 22 RECEIVED NYSCEF: 03/03/2023 丁ABLE OF CON丁〔N丁S Page 日NAN CIAL S丁A丁〔MEN丁S FOR 丁日〔丫EAR ENDED DECEMBER 31, 2019: Independent auditor's report 2 to 3 Income statement and statement of other comprehensive income 4 Statement of financial position 5 Statement of changes in equity 6 Statement of cash flows 7 Notes to financial statements 8 to 17 Abbreviations CHF - Swiss Francs USD - United States Dollars EUR - Euros GBP - UK Pounds Sterling OTC - OvertheCounter 1 FILED: NEW YORK COUNTY CLERK 03/03/2023 12:45 PM INDEX NO. 650710/2023 NYSCEF DOC. NO. 22 RECEIVED NYSCEF: 03/03/2023 Deloitte Deloitte AG 洲ngstwe心 strasse 11 8005 Zurich Schweiz Phone: +41 (0)58 279 6000 Fax: +41 (0)58 279 6600 www.deloitte.ch Independent Auditor's Report To the Shareholders of SNBNY Holdings Limited, Gibraltar Report on the Financial Statements 0pinion In accordance with the terms of our engagement, we have audited the financial statements of SNBNY Holdings Limited (the Company), which comprise the income statement, the statement of other comprehensive income for 2019, the statement of financial position as at December 31, 2019, the statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements. In our opinion, the accompanying financial statements presentfairly, in all material respects, the financial position of the Company as at December 31, 2019, and its financial performance and its cash flows for the year then ended in accordance with the financial reporting provisions set out in the notes to the financial statements. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). 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 Gibraltar, 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. 0幼erMatter 一 Res份记tion on0istribution Our report is intended solely for the Shareholders and should not be distributed to parties other than the Shareholders. Respons泊ilities 可 Management and 功e Boa心可 Directors 为r the Financia巧tatements Management is responsible for the preparation and fair presentation of the financial statements in accordance with the financial reporting provisions set out in the notes to the financial statements and for such internal control as Management determines 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, Management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless Management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. The Board of Directors is responsible for overseeing the Company's financial reporting process. Auditor's Respons泊访ties 为rtheAu血可幼e Financial Statements Our o 切 ectives 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 h咭h level of assurance but is not a guarantee that an audit conducted in accordance with International Standards on Auditing (ISAs) 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. 2 FILED: NEW YORK COUNTY CLERK 03/03/2023 12:45 PM INDEX NO. 650710/2023 NYSCEF DOC. NO. 22 RECEIVED NYSCEF: 03/03/2023 De协面 tte. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: Identi份 and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management. Conclude on the appropriateness of Management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with the Board of Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our aud比 Deloitte Ltd Sandro Schonenberger Pietro Di Fluri Auditor in charge Zurich, June 24, 2021 Endosures Financial statements (income statement and statement of other comprehensive income, statement of financial position, statement of changes in equity, statement of cash flows and notes) 3 FILED: NEW YORK COUNTY CLERK 03/03/2023 12:45 PM INDEX NO. 650710/2023 NYSCEF DOC. NO. 22 RECEIVED NYSCEF: 03/03/2023 SN日N丫日OLDINGS 日MI丁〔D INCOMES丁A丁〔MEN丁 AND S丁A丁〔MEN丁 OF 0丁日ER COMPRE日ENSIVE INCOME FOR 丁日〔丫〔AR ENDED DECEM日ER 31, 2019 (All amounts expressed in USD 000) Income statement Note interest expense INet in1terest in1come o ． 、上例 Net interest income after credit losses 8 I (18) Result from trading activities and the fair value option 0 Result from changes in fair value of subsidiaries 872.218 Other income 0 Total operating income 872.200 General expense 9 (83) Total operating expense Currency exchange losses Profit before taxes 872.116 Profit after taxes 872.116 Other Comprehensive income: Other comprehensive income 0 Total Comprehensive income for the year 872.116 一4 FILED: NEW YORK COUNTY CLERK 03/03/2023 12:45 PM INDEX NO. 650710/2023 NYSCEF DOC. NO. 22 RECEIVED NYSCEF: 03/03/2023 SN日N丫日OLDINGS 日MI丁〔D STATEMENT OF FINANCIAL POSITION AS AT DECEMBER 31, 2019 (All amounts expressed in USD 000) Assets Note 3 1. 12.2019 Cash 20 Investment in subsidiaries 11 1.675.000 Total assets 1.675.020 Liabilities and equity Note 3 1. 12.2019 Borrowings 10 449 丁ota日iab山ties 449 Share capital 207少 666 Share premium 1.466.947 Retained earnings (42) Shareholders' equity 1.674.571 Total equity 1.674.571 Total liabilities and equity 1.675.020 一5 FILED: NEW YORK COUNTY CLERK 03/03/2023 12:45 PM INDEX NO. 650710/2023 NYSCEF DOC. NO. 22 RECEIVED NYSCEF: 03/03/2023 SN日N丫日OLDINGS 日MI丁〔D S丁A丁〔MEN丁 OF CHAN6ES IN〔 Q日l丁丫「OR 丁日〔丫〔AR〔 NDED 31 DECEM日ER 2019 (All amounts expressed in USD 000) Note Share capital Capital reserves Retained earnings Total equity Balance as of 1 January 2019 100.001 706.401 (3.946) 802.456 Net profit 872.115 872.115 Capital increase/(decrease) 12 107.665 760.546 (868.211) 0 Balance as of 31 December 2019 207.666 1.466.947 (42) 1.674.571 一6 FILED: NEW YORK COUNTY CLERK 03/03/2023 12:45 PM INDEX NO. 650710/2023 NYSCEF DOC. NO. 22 RECEIVED NYSCEF: 03/03/2023 SN日N丫日OLDINGS 日MI丁〔D STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2019 (All amounts expressed in USD 000) 2019 Profit for the Year 872.116 Reconciliation to net cash flow from operating activities Result from changes in fair value of subsidiaries (872.218) Net(increase)/decrease in assets relating to operating activities: 0 。 Net increase/(decrease) in liabilities relating to operating activities 。 Cash flow from operating activities Cash flow from investing activities 0 Cash flow from financing activities Borrowings 56 Cash flow from financing activities 56 Net increase/(decrease) in cash and cash equivalents (46) Cash and cash equivalents, be目nning of the year 66 Cash and cash equivalents as at the balance sheet date 20 一7 FILED: NEW YORK COUNTY CLERK 03/03/2023 12:45 PM INDEX NO. 650710/2023 NYSCEF DOC. NO. 22 RECEIVED NYSCEF: 03/03/2023 SNBNY HOLDINGS 日M汀ED NO丁〔S 丁0 FINANCIAL S丁A丁〔MEN丁S FOR 丁日〔丫〔AR ENDED DECEM日ER 31, 2019 (All amounts expressed in USD 000) 1. General Information SNBNY Holdings Limited ("the Company") was incorporated in Gibraltar on June 28, 1995 for the principal purpose of investing in the common stock of Safra National Bank of New York ("the Bank"). In June 1995, the Company acquired 15,710 newly issued shares of the Bank for US$5 million. In June 1996, the Company acquired an additional 173,790 shares increasing its participation to 99.97% of the outstanding shares of the Bank. In August 2004, the Company contributed 99.97% of the outstanding shares of the Bank to Safra New York Corporation ("SNYC"), a U.S. financial holding company, in exchange for 1,000 shares or 100% of the common stock of the entity and thus, remains the ultimate parent company of the Bank. The principal activity of the Company is that of a private investment holding company. Under the United States Bank Holding Company Act of 1956, SNBN丫日old ings 日mited is a Bank 日olding Company with respect to Safra National Bank of New 丫ork ("the Bank") via its 100% holding of Safra New York Corporation. Additionally, Safra New York Corporation is the owner of other businesses, such as J. Safra Asset Management Corporation and Planet 550 Corp. The subsidiary Bank engages in both wholesale and private banking under a federal charter and is a member of the Federal Deposit Insurance Corporation ("FDIC") and the Federal Reserve System ("FED"). The office of the comptroller of the currency ("the 0CC") regulates and supervises the Bank. The Company's financial statements are presented in USD, which is also the functional currency of the Company. These financial statements were approved by the Board of Directors and authorised for issue on June 24, 2021. 2. Basis of presentation These financial statements of the Company have been prepared in accordance with the accounting principles set out below ("Accounting Principles"). These are based on the International Financial Reporting Standards (IFRS) yet do not reflect all the requirements of that framework. Whilst the financial statements are prepared to fairly present the financial conditions and results of operations in accordance with IFRS, no comparative information is disclosed. The financial statements have been prepared in accordance with the historical cost basis, except as disclosed in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liabil的 if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. The Company also prepares consolidated financial statements in accordance with IFRS. Going concern The directors have, at the time of approving the financial statements, a reasonable expectation that the Company have adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the financial statements. 8 FILED: NEW YORK COUNTY CLERK 03/03/2023 12:45 PM INDEX NO. 650710/2023 NYSCEF DOC. NO. 22 RECEIVED NYSCEF: 03/03/2023 3. Accounting principles 3.1. Foreign currency translation The Company's presentation currency is the US Dollar (USD). The Company uses the following main FX rates: Spot Rate Average Rate 31.12.2019 2019 GBP/USD 1,3247 1,2875 The Company companies prepare their financial statements in their respective functional currencies. Transactions in a currency other than the functional currency are recognized at the spot rate on the transaction date. Exchange differences arising between the date of a transaction and its subsequent settlement are recognized in the income statement. At the balance sheet date, monetary assets and liabilities denominated in a foreign currency are translated into the functional currency using the closing exchange rate, and unrealized exchange differences are recognized in the income statement. Non- monetary assets and liabilities not measured at fair value are translated into the functional currency at the historical exchange rate. Non-monetary assets and liabilities measured at fair value are translated into the functional currency using the closing exchange rate. Any unrealized gains or losses arising on the foreign currency translation are recognized in line with the recognition of gains or losses on the change in fair value of the item. Assets and liabilities of branches that are denominated in a different functional currency to the Company are translated into US dollars at the closing exchange rates. Average exchange rates for the business year are used for items in the income statement, statement of other comprehensive income and statement of cash flows. Exchange differences arising from the use of closing exchange rates and average exchange rates are recognized as currency translation adjustments in the statement of other comprehensive income. 3.2. Recognition of Income 3.2.1. Interest Income Interest income and expenses are recognized for all loans and receivables an accrual basis, using the effective interest method. When calculating the effective interest rate, the Company estimates cash flows considering all contractual terms of the financial instrument, but does not consider future credit losses. The calculation includes all amounts paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs, and any other premiums or discounts. Negative interest on assets is recorded as an interest expense, and negative interest on liabilities is recorded as interest income. For financial assets other than purchased or originated credit-impaired financial assets (i.e. assets that are credit impaired on initial recognition), the effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) excluding expected credit losses, through the expected life of the debt instrument, or, where appropriate, a shorter period, to the gross carrying amount of the debt instrument on initial recognition. For purchased or originated credit-impaired financial assets, a credit adjusted effective interest rate is calculated by discounting the estimated future cash flows, including expected credit losses, to the amortized cost of the debt instrument on initial recognition 3.3. Investment in subsidiaries, associates and joint ventures The investments in subsidiaries, associates and joint ventures assets are investments in subsidiary undertakings which are intended to be held for an indefinite period of time, but which may be sold in response to changes in the Company's financial environment. The Company has elected to account for its investments in subsidiary undertakings at fair value in accordance with IFRS 9 requirements, as permitted by lAS 27. 9 FILED: NEW YORK COUNTY CLERK 03/03/2023 12:45 PM INDEX NO. 650710/2023 NYSCEF DOC. NO. 22 RECEIVED NYSCEF: 03/03/2023 3.4. Financial instruments 3.4.1. Initial Recognition and derecognition The Company uses trade date accounting to recognize financial transactions. The Company recognized a financial asset or financial liability at the transaction date (i.e. trade date) at fair value of the consideration given or received, including directly attributable transaction costs. In the case of financial assets orfinancia日iabilities measured atfairva旧e through profit or loss, the transaction costs are immediately recognized in the income statement. At the date on which the Company enters into a sales contract for financial assets and the conditions for derecognition are met, the relevant financial asset is derecognized from the statement of financial position. Recognition or derecognition is mainly associated with the transfer of the contractual rights to receive cash as well as the respective risks and rewards (market risk). 3.4.2. Measuring fair values, fair value hierarchy and recognition of 1-day profit For information on the measurement of fair value of financial instruments, the valuation techniques used, the fair value hierarchy and day 1 profit, please refer to note 10 "Fair value of financial instruments". 3.4.3. Loans and receivables (amortized cost) These positions are held to collect contractual cash flows that are solely payments of principal and interest on the principal amount outstanding. The cash holdings in the balance sheet item "Cash" and other positions are recognized at amortized cost less expected credit losses. The change in expected credit losses is shown in "Net interest income". Interest on positions that are not past due is accrued in the period in which it is earned using the effective interest method and recognized in "Net interest income". Negative interest is shown as interest expense. 3.4.4. Other financial instruments at FVTPL (FVTPL) Financial assets that do not meet the criteria for being measured at amortised cost or FVTOCI are measured at FVTPL. Specifically, debt instruments that do not meet the amortised cost criteria or the FVTOCI criteria are classified as at FVTPL. In addition, debt instruments that meet either the amortised cost criteria or the FVTOCI criteria may be designated as at FVTPL upon initial recognition if such designation eliminates or significantly reduces a measurement or recognition inconsistency (so called 'accounting mismatch') that would arise from measuring assets or liabilities or recognising the gains and losses on them on different bases. Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any fair value gains or losses recognised in profit or loss to the extent they are not part of a designated hedging relationship (see hedge accounting policy). The net gain or loss recognised in profit or loss includes any dividend or interest earned on the financial asset and is included in the "Interest Income" line item (note Error! Reference source notfound.). 3.4.5. Derivatives instruments (FVTPL) Derivative instruments are recognized at fair value. Provided no hedge accounting is applied for the relevant derivatives, all income components are recognized in Results from trading activities 3.4.6. Loans to affiliates and associates These positions are recognized at amortized cost. Interest is accrued in the period in which it is incurred using the effective interest method and recognized in "Net interest income". Negative interest is shown as interest income. 一 10- FILED: NEW YORK COUNTY CLERK 03/03/2023 12:45 PM INDEX NO. 650710/2023 NYSCEF DOC. NO. 22 RECEIVED NYSCEF: 03/03/2023 3.5. Provisions The Company recognises a provision if, as a result of a past event, the Company has a current liabil的 at the balance sheet date that will probably lead to an outflow of funds (which can include legal fees), at the level of which can be reliably estimated. The recognition and release of provisions are recognised in the line item "Provisions and Losses". If an outflow of funds is unlikely to occur or the amount of the liability cannot be reliably estimated, a contingent liability is shown. A contingent liability is also shown 代 as a resu比 of a past event, there is a possible liabil的 at the balance sheet date whose existence depends on future developments that are not fully within the Company's control. If the possibility of an outflow of resources is remote, neither a provision nor a contingent liability is reported. 4. Critical accounting estimates and judgements in applying accounting policies The preparation of financial statements requires the Company's management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Such estimates and assumptions are based on the best available information and are adapted continuous份 in line with new findings and circumstances but may involve significant uncertainty at the time they are made. Actual results may differ from these estimates.The Company believes that the estimates and assumptions it has made are appropriate, and that the Company's financial statements are therefore a fair representation of its financial position and results in all material respects. The most relevant areas in which the Company exercises judgment include the application of the Company's estimations and assumptions with respect to: fair value of investments in subsidiaries (Note 10.3 and 111). 5. Changes to critical accounting estimates There are no changes to critical accounting estimates during the reporting period. 6. Effect of changes in accounting policy and changes in estimates The effect of changes in accounting policy and changes in estimates are recognized in the income statement in the period in which the Company changes its accounting policy or estimates. 7. Risk management 7.1. General considerations A clearly defined, transparent and integrated risk management policy is adopted and is adapted continuously to the latest knowledge. Substantial human and technological resources are made available forthis purpose Active risk managementshould make it possible to minimize undesirable risks and to make optimum use of the Company's capital for the benefit of a日 shareholders. 7.2. Risk culture The standard of risk management achieved by a financial Company is not only a question of compliance with formalized internal and external rules. Accordingly, if not even greater, significance is the risk awareness of decision-makers. The quantitative criteria on which attention frequently focuses is only one component of a comprehensive risk management system. The development of an appropriate risk culture as part of a financial Company's overall culture is highly important. A central element of such a risk culture is the discipline and thoroughness with which participants respond to their tasks in the risk management process. 7.3. Organization of risk management The Board of Directors has performed adequate and regular risk assessments and introduced any remedial measures required to minimize the risk of material misstatement in the financial statements as far as possible. Furthermore, the Board of Directors is responsible for the formulation and implementation of the Company's risk policy. It determines the risk strategy, the organizational framework for risk management such as limits and systems, the maximum risk tolerance and respective responsibilities. The appropriateness of the risk policy is reviewed annually. 一 11- FILED: NEW YORK COUNTY CLERK 03/03/2023 12:45 PM INDEX NO. 650710/2023 NYSCEF DOC. NO. 22 RECEIVED NYSCEF: 03/03/2023 Currency risk The level of exposure by currency is subject to approved limits. The table below summarizes the exposure to foreign currency exchange rate risk, categorized by currency. Concentration of assets and liabilities items December 31,2019 USD Total Assets: Cash and cash equivalents 20 20 Investments in subsidiaries 1.675.000 1.675.000 Total balance sheet assets 1.675.020 1.675.020 Delivery entitlements from spot exchange, forward forex and forex options transactions Total assets 1.675.020 1.675.020 Liab山ties: Borrowings 449 449 Total Liabilities 449 449 Share capital 207.666 207.666 Share premium 1.466.947 1.466.947 Retained earnings (42) (42) Total Equity 1.674.571 1.674.571 Total balance sheet liabilities 1.675.020 1.675.020 Total Liabilities 449 449 Net currency position 1.674.571 1.674.571 7.3.1. Liquidity Risk Liquidity risk refers to the potential inability of the Company to meet its payment obligations or failure to meet requirements imposed by banking regulations.The prime objective is to guarantee the Company's abil的 to meet its payment ob 馆ations at all times and to ensure compliance with legal requirements on liquidity. A key task of the Company is to monitor all relevant liquidity risk factors. These include money flows between subsidiaries and the parent Company, inflows and outflows of client funds and changes in the availability of liquidity reserves. These liquidity aspects are considered in aggregate but also per currency. As a supporting strategy, target bandwidths are set for surplus coverage of minimum liquidity. These are actively monitored and corresponding measures are taken if liquidity falls below the specified targets. A contingency funding plan may be triggered if certain conditions are met. Stress testing allows for the impact of larger outflows combined with the deterioration of Company assets on the liquidity indicators to be assessed. Due Due Due within 12 Due more within 3 N0 USD 000 At sight within 3 mont卜sto5 t卜an 5 Total to 12 maturi钾 months 丫ears 丫ears months Cas卜 20 20 Loans to affiliates Investments in subsidiaries 1.675.000 1.675.000 Total 31.12.2019 20 1.675.000 1.675.020 Borrowings 449 449 Total 31.12.2019 449 449 一 12- FILED: NEW YORK COUNTY CLERK 03/03/2023 12:45 PM INDEX NO. 650710/2023 NYSCEF DOC. NO. 22 RECEIVED NYSCEF: 03/03/2023 7.3.2. Operational risk Operational risks are defined as the risk of losses that arise through the inadequacy or failure of internal procedures, people or systems, or as a consequence of external events．丁 h 污 definition indudes a｝日 egal and supervisory risks, 匕 ut excludes strategic risks and risks to the Company's reputation.The Company manages its operational risks on the basis of a consistent Company- wide framework. The underlying processes for monitoring operational risks are based on directives and on reporting at the appropriate level. The regular measurement, reporting and assessment of segment specific risk indicators enable potential hazards to be detected well in advance. A regular self-assessment is performed involving representatives from specialist units and risk experts in order to identify and catalogue the underlying risks and inadequacies of a specific area, and these procedures are reviewed on a regular basis. 7.3.3. IT and Information security risk IT risk refers to a subset of operational risk due to technology- related factors. It may lead to potential business disruptions as a result of a deficient implementation of IT risk governance. It comprises, but is not limited to, user access management, the evolution of the IT infrastructure and IT operations management. Information security risk relates to the potential inability of the Company to anticipate, resist, or react to a threat that exploits vulnerabilities, causing harm to the organization. This includes cyber risk which is more specific to the use of technology. The Company aims to ensure that data is protected against intentional and unintentional abuse, in line with the applicable regulations and the best industry practices. The emergence of potential new threats is continuously monitored by the Company. In relation to both IT and information security, a dedicated IT Risk Management Committee meets on a quarterly basis to review and address those risks. 7.3.4. Reputational Risk Reputation is a critical element shaping stakeholders' perception of the Company's public standing, professionalism, integrity and reliability. Reputational risk can be defined as the existing or potential threat of negative commercial impacts on the Company created by stakeholders' negative perception of the Company. It is most often an event, which has occurred as a direct consequence of another risk materializing. To identify potential reputational risks at an early stage and take appropriate preventive measures, the Company strives to insti日 an intrinsic risk culture in its sta代 structures and processes. 7.3.5. Legal and compliance risk Legal risks relate to potential financial loss as a result of the deficient drafting or implementation of contractual agreements or as a consequence of contractual infringements or illegal and/or culpable actions. It also covers the deficient implementations of changes in the legal and regulatory environment. The legal department is involved as soon as a potential risk has been identified. It assesses the situation and沂 appropriate, instructs an externa日awyer with whom it works to resolve the issue. Such risks have been assessed and provisions have been set aside on a case七y-case basis. Compliance risk is defined as the risk of legal sanctions, material financia日oss, or loss to reputation the Company may suffer as a result of its failure to comp 份 with applicable laws, its own regulations, code of conduct, and standards of bes灯good practice. Compliance risk relates to many areas, such as anti-money laundering and combating the financing of terrorism, regulatory tax compliance, breaches of the cross-border rules, conduct risks including suitability and appropriateness of products and investments, and market conduct rules. 7.3.6. Business Strategic risk Business and strategic risk is inherent to external or internal events or decisions resulting in strategic and business objectives not being achieved. Assessment reviews are conducted on a regular basis to evaluate the impact of potential strategic and business risks and define mit咭ating measures the balance sheet position "Liabilities from Other financial instruments designated at fair value through profit or loss" or "Other financial instruments designated at fair value through profit or loss", respective呼 Potential derivative positions also held for hedging purposes are reported under "Positive (or negative) replacement values of derivative financial instruments". 一 13- FILED: NEW YORK COUNTY CLERK 03/03/2023 12:45 PM INDEX NO. 650710/2023 NYSCEF DOC. NO. 22 RECEIVED NYSCEF: 03/03/2023 8. Net Interest Income Net interest income after credit losses 3 1.12.2019 Total interest income from financial instruments at amortized cost 0 Total dividend and interest income from financial instruments at fair value through profit and loss 0 Total interest income 0 Interest expense from Borrowings (18) Total interest expense from financial instruments at amortized cost (18) Total credit loss (expense)/recovery 0 Total net interest income after credit loss (18) 9. General expense 2019 USD 000 General and administrative expenses 丁otal 10. Fair values of financial instruments The fair value of financial instruments and investment properties contained in the statement of financial position of the Company based on the valuation methods explained below is the same as the book value. There is no deviation between fair va旧eand bookva旧e. 10.1. Measurement Methodology Financial instruments Derivative financia日nstruments, trading portfolio assets and liabilities, other financial assets des咭nated at fair value and other financial liabilities designated at fair value and investment properties are recognised at fair value in the statement of financial position. Changes in the fair values of these instruments are recognised in the income statement as "result from trading activities and the fair va旧e option". The transaction price represents the best indication of the fair value of financial instruments unless the fair value of the financial instrument or investment property can be better determined by comparison with other observable current market transactions involving the same instrument (level 1 instrument) or is based on a valuation method that uses only observable market data (level 2 instrument). In this case, any difference between fair value and the transaction price is recognised as day- 1 profit or loss in the line item "result from trading activities and the fair value option". For level 3 instruments, day-i result is deferred over the duration of the product. Fair value is determined using quoted prices in active markets when these are available. In other cases, fair value is determined using a valuation model. Valuation models use inputs and rates derived from observable market data, such as interest rates and foreign exchange rates, when available. Valuation models are primarily used forthe valuation of issued structured products and derivatives. The output of a model is typically an estimate or approximation of a value that cannot be determined with certainty, and the valuation techniques employed may not fully reflect all factors relevant to the positions held. Significant risks arise when models are used to value financial instruments and calculate hedging ratios. The consequence of an inadequate model could be an incorrect valuation leading to an incorrect risk assessment and an incorrect hedging position, both of which could have a financia日mpa改． 一 14- FILED: NEW YORK COUNTY CLERK 03/03/2023 12:45 PM INDEX NO. 650710/2023 NYSCEF DOC. NO. 22 RECEIVED NYSCEF: 03/03/2023 For financial instruments, all models for are validated before they are used as a basis for financial reporting, and they are periodically reviewed thereafter by qualified specialists who operate independently from model developers and users. Whenever possible, the valuations derived from models are compared with the prices of similar financial instruments and with actual values once realised in order to further validate and calibrate the models. Valuation models are generally applied consistently across products from one period to the next, ensuring the comparability and continuity of valuations over time. There were no significant changes in the valuation models used for the reporting period. 10.2. Fair Value Hierarchy All financial assets and liabilities as well as investment properties at fair value are