Finastra Group Holdings Limited Report and Financial Statements For The Year Ended 31 May 2019 ‘Company Number 01360027 #19960)" 4 510372020, te companies HOUSE #109Finastra Group Holdings Limited Company Information Directors Registered number Registered office Independent auditors Bankers Country of incorporation T Kilroy S Dowler T Schloesser K Metzroth S Pemble 01360027 Four Kingdom Street Paddington’ London w268D PricewaterhouseCoopers LLP 1 Embankment Place London WC2N 6RH Barclays Bank Pe 4 Churchill Place London E14 SHP England and WalesFinastra Group Holdings Contents Strategic Report Directors’ Report Independent Auditors’ Report Statement of Comprehensive Income Balance Sheet Statement of Changes in Equity Notes to the Financial Statements Page(s) 1 2-4 5-6 10-32Finastra Group Holdings Limited Strategic Report For the Year Ended 31 May 2019 The Directors present their Strategic Report of Finastra Group Holdings Limited ("the Company") for the year ended 31 May 2019, Business review and principal activities ‘The principal activity of the Company is to operate as an intermediate parent company and finance company. ‘The Company also holds certain assets and liabilities associated with property and a defined benefit pension scheme, ‘The Company reported a profit in the current year of $20m (2018: loss of $20m). This was largely driven by foreign exchange gains of $13m (2018; losses of $26m) on balances with fellow group subsidiaries and forward contracts. The Company received net interest receivable of $7m (2018: $15m) ‘The net assets of the Company have increased by $20m, driven by the improved profit in the year. Key performance indicators The executive management team of Tahoe Bidco Lid, being the parent company of the largest group in which the Company is included, manages the operations of Tahoe Bidco Ltd's group of companies (the Group" and referred to as "Finastra Group") on a group basis. For this reason, the Company's Directors believe that analysis using key performance indicators for the Company is not appropriate for an understanding of the development, performance or position of the business of the Company. The development, performance and position of the Group, which includes the Company, are discussed on pages 4 to 7 of the Group's Annual Report, which does not form part of this report. Principal risks and uncertainties From the perspective of the Company, the principal risks and uncertainties are integrated with the principal risks of the Group and are not managed separately. Accordingly, the principal risks and uncertainties of the Group, which include those of the Company, are discussed on pages 6 to 9 of the Group's Annual Report, which does not form part of this report. In June 2018, a UK referendum resulted in a vote for the country to leave the European Union and the resultant uncertainty adds to the challenges for UK businesses. This uncertainty may lead to volatilty in markets with potential fluctuations in foreign exchange rates and interest rates. These movements could impact, amongst other things, the fair value of derivative financial instruments and other assets. Sensitivity analysis associated with the Group's exposure to currency and interest rate risk was included in note 28 of the Group's Annual Report Overall, management assesses the direct impacts on the Company to be minimal in the short term, No significant changes to the Company's operations are expected and the Company will continue to consider changes that are in the best interests of its customers and investors. This report was approved by the Board and signed on its behalf by. Bor FIMO SCHLOESSER, Date 24/2/20Finastra Group Holdings Limited Directors' Report For the Year Ended 31 May 2019 ‘The Directors present their Annual Report together with the audited financial statements of Finastra Group Holdings Limited ("the Company’) for the year ended 31 May 2019, Future developments ‘The Company's performance is expected to continue throughout the next financial year and itis anticipated that the current performance levels will be maintained, ‘Subsequent events (On 17 October 2019, the Finastra Group refinanced it's 1st Lien Debt through Finastra Europe Sar, a trading entity in the group. As a result, the Company received €79.3m of cash in exchange for an intercompany loan demand note from Finastra Europe Limited, The loan was non-interest bearing, On the same date, Finastra Europe Limited transferred the loan receivable to Finastra Holdings Limited, The loan was redenominated into a '$86,9m receivable with the Company. The funds received were used to reduce the utilized 1st Lien Revolving Credit Facility by $86.9m. The Directors of Finastra Ireland intend to place the company into voluntary liquidation during 2020, following the completion of due diigence, Finastra Ireland is an indirectly held subsidiary and the liquidation is not material to the Company. Results and dividends The Company's profit for the financial year amounted to $20m (2018: loss of $20m). No interim dividend was paid during the year (2018: Sni). The Directors do not recommend the payment of a final dividend (2018: Sn). The results of the Company for the year are set out on page 7. Net assets as at 31 May 2019 were $775m compared to $755m at 31 May 2018. This increase was driven by the profit for the year. Charitable and political contributions. There were no charitable or political donations made in the year ended 31 May 2019 (2018: $nil) and the Company did not incur any political expenditure (2018: SnilFinastra Group Holdings Limited Directors’ Report (continued) For the Year Ended 31 May 2019 Financial risk management ‘The Company is exposed to a variety of financial risks including foreign exchange currency risk, credit risk and liquidity risk Foreign exchange currency risk ‘The Company operates internationally and is exposed to foreign currency fluctuations, primarily the pound sterling and the euro, Foreign exchange risks arise when future commercial transactions and recognised assets and liabilities are denominated in currencies that are not the Company's functional currency. The Group's net exposure to foreign currency risk is illustrated by the sensitivity analysis in note 28 of the Group's Annual Report. Credit risk The Company's principal financial assets are amounts owed by group undertakings. The Finastra Group regularly reviews intercompany balances for impairment and, where appropriate, adjustments to the carrying value are made at subsidiary level. Derivative and cash transactions are limited to high quality financial institutions, Liquioity risk The Company currently has. no requirements for external debt finance; sufficient funds for operations are maintained at Group level Further details of the Finastra Group's risk policies are available within the Group's Annual Report. Directors. ‘The following Directors served during the year and up to the date of signing of these financial statements: T Kilroy S Dowler (appointed 11 November 2018) T Schloesser (appointed 23 January 2019) K Metzroth (appointed 31 January 2020) 'S Pemble (appointed 24 February 2020) ‘J Hughes (appointed 30 June 2018) D Leigh (appointed 18 May 2019, resigned 28 November 2019) T Homer (resigned 30 June 2018) J Van Harken (resigned 23 January 2019) C Jehie (resigned 18 May 2018) Directors’ indemnities Al Directors have been granted an indemnity by the intermediate parent company, Finastra Limited, to the extent permitted by law in respect of certain liabilities incurred as a result of their office in associated companies. They are indemnified against liabilty to third parties, excluding criminal liability and regulatory penalties and certain ther liabilities. This is @ qualifying third party indemnity provision for the purposes of the Companies Act 2008 which was made during the financial year and remains in force at the date of approval of this report.Finastra Group Holdings Limited Directors’ Report (continued) For the Year Ended 31 May 2019 Directors’ Responsibilities Statement ‘The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulation. Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have prepared the financial statements in accordance with United Kingdom Generally Accepted ‘Accounting Practice (United Kingdom Accounting Standards, comprising FRS 101 “Reduced Disclosure Framework’, and applicable law). 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 the financial statements, the Directors are required to: © select suitable accounting policies and then apply them consistently, + state whether applicable United Kingdom Accounting Standards, comprising FRS 101, have been followed, subject to any material departures disclosed and explained in the financial statements, + make judgements and accounting estimates that are reasonable and prudent; and * 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 also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. ‘The 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. Disclosure of information to Auditors Each Director who is a Director of the Company at the date of approval of these financial statements confirm that + s0 far as the Directors are aware, there is no relevant information of which the Company's auditors are unaware, and ‘+ the Directors have taken all the steps that ought to have been taken as a Director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information, This confirmation is given and should be interpreted in accordance with the provisions of Section 418 of the Companies Act 2006, Independent Auditors PricewaterhouseCoopers LLP have expressed their willingness to continue in office and be deemed to be reappointed as Auditors under Section 487(2) of the Companies Act 2006. Approved by the Board and signed on its behalf by: EE Director T. SCH Pa 94/2 ooIndependent auditors’ report to the members of Finastra Group Holdings Limited Report on the audit of the financial statements Opinion In our opinion, Finastra Group Holdings Limited's financial statements; ‘+ givea true anid fair view ofthe state ofthe company’s affairs as at 31 May 2019 and of ts profit forthe year then ended; ‘+ have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 101 "Reduced Disclosure Framework’, and applicable law); and ‘+ have been prepared in accordance with the requirements of the Companies Act 2006. ‘We have audited the financial statements, included within the Report and Financial Statements (the “Annual Report”), which comprise: the Balance Sheet as at 31 May 2019; the Statement of Comprehensive Income, the Statement of Changes in Equity for the year then ended; and the notes to the financial statements, which include a deseription of the significant accounting policies. Basis for opinion ‘We conducted our audit in accordance with International Standards on Auditing (UK) ("ISAs (UK)") and applicable law. Our responsibilities under ISAs (UX) are further described in the Auditors’ responsibilities forthe audit ofthe financial statements section of our report. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion, Independence ‘We remained independent of the company in accordance with the ethical requirements that ae relevant to our audit ofthe financial statements inthe UK, which includes the FRC’ Ethical Standard, and we have flflled our other ethical responsibilities in accordance with these requirements. Conclusions relating to going concern ISAs (UK) require us to report to you when: the directors’ use ofthe going concern basis of accounting in the preparation ofthe financial statements is not appropriate; or ‘+ the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period of atleast twelve months from the date when the financial statements are authorised for issue We have nothing to report in respect ofthe above matters. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the company’s ability to continue as a going concern. For example, the terms ofthe United Kingdom's withdrawal from the European Union are not clear, and its difficult to evaluate all of the potential implications on the company’s trade, customers, suppliers and the wider economy. Reporting on other information ‘The other information comprises all ofthe information in the Annual Report other than the financial statements and our auditors’ report thereon. The directors are responsible forthe other information. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of assurance thereot In connection with our audit ofthe financial statements, ou responsibility i 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 audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material risstatement, we are required to perform procedures to conclude whether there is a material misstatement ofthe nancial statements or a material misstatement ofthe other information. If, based on the work we have performed, we conclude that there isa material misstatement of this other information, we are required to report that fact. We have nothing to report ‘based on these responsibilities. ‘With respect to the Strategic Report and Directors’ Report, we also considered whether the disclosures required by the UK ‘Companies Act 2006 have been included.Based on the responsibilities described above and our work undertaken in the course of the audit, ISAs (UK) require us also to report certain opinions and matters as described below. Strategic Report and Directors’ Report In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic Report and Directors’ Report for the year ended 31 May 2019 is consistent with the financial statements and has been prepared in accordance with applicable legal requirements. In light ofthe knowledge and understanding of the company and its environment obtained in the course ofthe audit, we did not identify any material misstatements inthe Strategic Report and Directors’ Report. Responsibilities for the financial statements and the audit Responsibilities of the directors for the financial statements ‘As explained more fully in the Directors’ Responsibilities Statement set out on page 4, the directors are responsible for the preparation ofthe financial statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The directors are also responsible for such internal control as they 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 of to cease operations, of have no realistic alternative but to do so. Auditors’ 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 iisstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance isa high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UX) 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, A further description of our responsibilities for the audit ofthe financial statements is located on the FRC's website at: ‘vr fre.org.uk/auditorstesponsibilities. This description forms part of our auditors’ report. Use of this report ‘This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance with Chapter g of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept for assume responsibilty for any other purpose orto any other person to whom this report is shown or into whose hands it ‘may come save where expressly agreed by our prior consent in writing, Other required reporting ‘Companies Act 2006 exception reporting Under the Companies Act 2006 we are required to report to you if, in our opinion: + wehave not received all the information and explanations we require for our audit; or + adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received from branches not visited by us; or ‘+ certain disclosures of directors’ remuneration specified by law are not made; or ‘+ thefinancial statements are not in agreement with the accounting records and returns. ‘We have no exceptions to report arising from this responsibilty. Ags, ‘Alex Hookway (Senior Statutory Auditor) for and on behalf of PricewaterhouseCoopers LLP (Chartered Accountants and Statutory Auditors London 5 March 2020Finastra Group Holdings Limited Statement of Comprehensive Income For the Year Ended 31 May 2019 2019 2018 Note SM SM ‘Administrative incomel(expenses) 3 @2) Impairment of receivables : (3) Operating profiti(loss) 5 13 35) Interest receivable and similar income a 26 24 Interest payable and similar expenses a (19) @ Profit(loss) before taxation 20 (20) Tax on profit(loss) 9 - - Profiti(loss) for the financial year 20 (20) Other comprehensive incomel(expense): Items that will not be reclassified to profit or loss: Actuarial loss on defined benefit schemes 15 “) @ Pension surplus not recognised 15 1 2 Total other comprehensive income : - Total comprehensive income/(expense) for the year 20 (20) All amounts relate to continuing activities ‘The notes on pages 10 to 32 form part of these financial statements.Finastra Group Holdings Limited Registered number: 01360027 Balance Sheet As at 31 May 2019 2019 2018 Note sM sm Non-current assets Property, plant and equipment 10 - 5 Investments " 768 768 Trade and other receivables: amounts falling due after more than one year 2 1,048 970 1,816 1,738 Current assets ‘Trade and other receivables: amounts falling due within one year 2 2 186 Derivatives financial instruments 3 3 1 Cash at bank and in hand 4 24 284 an Current liabilities ‘Trade and other payables: amounts faling due within one year “4 (495) (188) Net current (liabilities)assets (211) 23 Total assets less current liabilities 1,605 1,761 Non-current liabilities ‘Trade and other payables: amounts faling due after more than one year “4 (830) (1,006) Net assets 775 755 Capital and reserves Called up share capital 16 6 6 ‘Share premium account 7 20 20 Capital redemption reserve 7 229 229 Retained earnings 7 520 500 Total shareholders’ funds 775 755 The financial statements on pages 7 to 32 were approved and authorised for issue by the Board and were signed on its behalf by: LL Director T, SCHLOESSER, Date’ 94 \2\20 ‘The notes on pages 10 to 32 form part of these financial statements. 8Finastra Group Holdings Limited Statement of Changes in Equity For the Year Ended 31 May 2019 Share Capital Called up premium redemption sharecapital account —reserve SM sm sM At June 2017 6 20 229 ‘Comprehensive expense for the year Loss for the financial year 5 : : Total comprehensive expense, § ————, —____ —_____. —_____ for the year - : - Att June 2018 6 20 228 Comprehensive income for the year Profit for the year : : : Total comprehensive income for ——- —___ —____ ______ the year : 5 5 ‘At 31 May 2019 6 20 228 Total Retained shareholders’ earnings funds om sm 520 175 (20) (20) (20) (20) 500 785 20 20 20 20 520 775 ‘The notes on pages 10 to 32 form part of these financial statements.Finastra Group Holdings Limited Notes to the Financial Statements For the Year Ended 31 May 2019, General information ‘The Company is a private company limited by shares, domiciled in the United Kingdom. The Company is incorporated in England and Wales and its registered address is Four Kingdom Street, Paddington, London, W2 @BD. The nature of the Company's operations and its principle activities are set out in the Strategic Report on page 1 ‘Accounting policies Basis of preparation of financial staterients ‘The financial statements have been prepared under the historical cost convention, except for certain items which are measured at fair value as disclosed in the accounting policies below, and in accordance with the Companies Act 2008, Financial Reporting Standard 100 ‘Application of Financial Reporting Requirements’ (‘FRS 100") and Financial Reporting Standard 101 ‘Reduced Disclosure Framework’ ("FRS 101") ‘The preparation of financial statements in compliance with FRS 101 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3) ‘The Company is a subsidiary company and is exempt from the requirement to prepare group financial statements by virtue of section 401 of the Companies Act 2006. These financial statements therefore present information about the Company as an individual undertaking and not about its group. Financial Reporting Standard 101 - reduced disclosure exemptions {In preparing these financial statements, the Company has taken advantage of all relevant disclosure exemptions conferred by FRS 101. Therefore, these financial statements do not include: certain comparative information as otherwise required by EU endorses IFRS; certain disclosures regarding the Company's capital; a statement of cash flows: the effect of future accounting standards not yet adopted, the disclosure of the remuneration of key management personnel; and disclosure of related party transactions with other wholly owned members of the Group headed by Tahoe Bidco Ltd, In addition, and in accordance with FRS 101, further disclosure exemptions have been adopted because equivalent disclosures are included in the consolidated financial statements of Tahoe Bidco Lid. These financial statements therefore do not include certain disclosures in respect of + business combinations; financial instruments (other than certain disclosures required as a result of recording financial instruments at fair value); ‘+ fair value measurement (other than certain disclosures required as a result of recording financial instruments at fair value); and = impairment of assets, The financial statements of Tahoe Bidco Ltd can be obtained as described in note 20. 10Finastra Group Holdings Limited Notes to the Financial Statements For the Year Ended 31 May 2019 Accoui 19 policies (continued) Changes in accounting policies New standards and interpretations applied for the first time IFRS 9 - Financial instruments The only notable new standard applied for the first time is IFRS 9 which has been applied from 1 June 2018. IFRS 9 provides a new expected losses impairment model for financial assets, including ‘trade receivables, intercompany receivables and includes amendments to classification and measurement of financial instruments. IFRS 9 replaces the provisions of IAS 39 that relate to the recognition, classification and measurement of financial assets and financial liabilities, derecognition of financial instruments, impairment of financial assets and hedge accounting The adoption of IFRS 9 Financial Instruments from 1 June 2018 resulted in changes in accounting policies and no adjustments to the amounts recognised in the financial statements. The new accounting policies are set out below. The Company's use of financial instruments is limited to short-term trading balances such as receivables and payables and borrowings. No changes have arisen on payables or borrowings. The Company applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables and contract assets (accrued income within other receivables). Intercompany trading balances are initially recognised at fair value being the invoiced amount and are subsequently measured at amortised cost using the effective interest rate method less provision for impairment. Intercompany loans, whether informal or formal, are also recognised at fair value and are subsequently measured at amortised cost using the effective interest rate method less provision for impairment. Provisions are assessed by evaluating the credit risk of the counterparty and the ability of the counterparty to settle the amounts due in accordance with the terms of the loan. The ability of 2 related party to repay amounts due is a critical accounting estimate given the materiality of the balance. Intercompany loans balances are assessed using the IFRS 9 general model approach which requires an assessment of the probability of default and potential loss scenarios were a default to occur. The Finastra Group treasury strategy, availabilty of funds, and management intentions are all considered, In addition, the counterparty liquidity and financial position are critically evaluated, including an assessment of any improving or deteriorating financial position, to ensure amounts due can by collected. The Company has not identified any material impact from the adoption of IFRS 9 on intercompany balances and no impairment charge has been recorded. "Finastra Group Holdings Limited Notes to the Financial Statements For the Year Ended 31 May 2019 2 Accounting policies (continued) Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciation. Cost includes the original purchase price of the asset and the cost attributable to bringing the asset to its working condition for its intended use. Depreciation is calculated on a straight-line basis to write off the cost, less estimated residual value of each asset, over its expected useful lfe. The residual values and useful economic lives of property, plant and equipment are reviewed annually. The useful lives by major class of asset applied from the date of purchase are Leasehold improvements = 5-15 years or the period of the lease if shorter Fixtures and fitings = 4-15 years Impairment of non-financial assets All non-current assets are tested for impairment whenever events or circumstances indicate that their carrying value may be impaired. Additionally, capitalised development expenditure relating to a product that is not yet in full production are subject to an annual impairment test. ‘An impairment loss is recognised in the Company's Statement of Comprehensive Income to the ‘extent that an asset's carrying value exceeds its recoverable amount, which represents the higher of the asset's net realisable value and its value in use. An asset's value in use represents the present value of the future cash flows expected to be derived from the asset or from the cash generating unit to which it relates. The present value is calculated using a discount rate that reflects the current market assessment of the time value of money and the risks specific to the asset concerned, Impairment losses recognised in previous periods for an asset other than goodwill are reversed if there has been a change in the estimates used to determine the asset's recoverable amount, but only to the extent that the carrying amount of the asset does not exceed its carrying amount had no impairment loss been recognised in previous periods. Impairment losses in respect of goodwill are not reversed, Fixed asset investments Investments in subsidiary undertakings held as non-current assets are stated at cost plus incidental expenses less any provision for impairment considered necessary. Trade receivables Trade receivables are initially recognised at fair value, which is usually the original invoice amount and are subsequently measured at amortised cost using the effective interest rate method less provision for impairment. The Company applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables. Cash and cash equivalents Cash and cash equivalents comprise cash in hand and current balances with banks and similar institutions, which are readily convertible to known amounts of cash and which are subject to insignificant risk of changes in value and have an original maturity of three months or less. On the Company Balance Sheet, bank overdrafts are shown within borrowings in current liabilities. 12Finastra Group Holdings Limited Notes to the Financial Statements For the Year Ended 31 May 2019 ‘Accounting policies (continued) Share capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from proceeds. Trade payables Trade payables are recognised initially at fair value, which is usually the original invoice value, and subsequently measured at amortised cost using the effective interest method. If payment is due within one year or less, payables are classified as current liabilties, if not, they are presented as non- current liabilities. Interest-bearing loans and other borrowings All interest-bearing loans and other borrowings with banks and simitar institutions are initially recognised at fair value net of directly attributable transaction costs, After initial recognition, interest- bearing loans and other borrowings are subsequently measured at amortised cost using the effective interest method. Amortised cost is calculated by taking into account any issue costs, discount or premium, The difference between the proceeds (net of directly attributable transaction costs) and the redemption value is recognised in the Company income statement, within finance costs, over the period of the borrowings. Borrowings are classified as current liabilties unless the Company has an unconditional right to defer settlement of the lability for at least 12 months after the reporting date. Taxation Taxation comprises current and deferred tax. Tax is recognised in the Company's Statement of Comprehensive Income except to the extent that it relates to items recognised directly in shareholders’ equity, in which case It too is recognised in shareholders’ equity, Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or ‘substantively enacted at the Balance Sheet date, along with any adjustment to tax payable in respect of previous years. Taxable profit differs from net profit as reported in the Company's Statement of ‘Comprehensive Income because it excludes items that are never taxable or deductible, Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes and is accounted for using the Balance Sheet liability method, apart from the following differences which are not provided for: goodwill not deductible for tax purposes; the initial recognition of assets or liabilities that affect neither accounting nor taxable profit; and differences relating to investments in ‘subsidiaries to the extent they will probably not reverse in the foreseeable future. ‘The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amounts of assets and liabilities, using tax rates and laws, which are expected to apply in the year when the liability is settled, or the asset is realised. Deferred tax assets are only recognised to the extent that recovery is probable, Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilties and assets, and these relate to income taxes levied by the same tax authority on the same taxable entity, or on different taxable entities, but they intend to settle current tax liabilities and assets on a net basis or these tax assets and liabilities will be realised simultaneously. 13Finastra Group Holdings Limited Notes to the Financial Statements For the Year Ended 31 May 2019 Accounting policies (continued) Taxation (continued) A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilised, Deferred tax assets are reviewed at each reporting date and are reduced to the extent that itis no longer probable that the related tax benefit will be realised. In determining the amount of current and deferred tax, the Company considers the impact of uncertain tax positions and whether additional taxes, penalties and interest may be due. Amounts recorded are based on the Company's best estimate of amounts to be paid Foreign currency translation ‘The financial statements are presented in US dollar, which is the functional currency of the Company ‘and the Company's presentational currency. The Company determines its own functional currency land items included in the financial statements of each entity are measured using that functional currency. Transactions in foreign currencies are, on intial recognition, recorded in the functional currency of the entity at the exchange rate ruling at the date of the transaction, Monetary assets and liabilties denominated in foreign currencies are retranslated at the functional currency rate of exchange ruling at the Balance Sheet date. All exchange movements are included in the Company's income statement for the period. Non-monetary items that are measured at historical cost in a currency other than the functional currency of the entity concemed are translated using the ‘exchange rate prevailing at the dates of the initial transaction. For presenting financial statements, the assets and liabilities of the Company's non-US dollar functional currency subsidiary undertakings are translated into US dollar at exchange rates prevailing at the Balance Sheet date. The results of these subsidiary undertakings are translated into US dollar at the average rates of exchange for the relevant period Employee benefits Pension obligations ‘The Company operates defined benefit and defined contribution pension schemes which cover the majority of its employees. Defined benefit pension scheme liabilities are measured using a projected-unit method and discounted at the current rate of return on a high-quality corporate bond of equivalent term and currency to the liability. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity in the Statement of Comprehensive Income as they arise. Pension scheme assets are measured at fair value. The pension scheme surplus (to the extent that it is recoverable) or deficit is recognised in full on the Company Balance Sheet. Any current or past service cost and administration expenses are recognised in the Company's Statement of Comprehensive Income as are the net interest on the schemes’ liabilities. Full independent actuarial valuations of the defined benefit scheme are carried out on a regular basis and updated at each reporting date, The assets of the schemes are held separately from those of the Company. Contributions to defined contribution schemes are charged to the Company's Statement of Comprehensive Income as incurred, “4Finastra Group Holdings Limited Notes to the Financial Statements For the Year Ended 31 May 2019 ‘Accounting policies (continued) Employee benefits (continued) Other post-employment obligations ‘Some subsidiaries provide other post-retirement benefits to their retirees (e.g. gratuities). The entitlement of those benefits is usually conditional on the employee completing a specific length of service. The expected costs of these benefits are accrued over the period of employment using actuarial assumptions, Actuarial gains or losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity in other comprehensive income in the period in which they arise. Termination benefits ‘Termination benefits are payable when employment is terminated by the Company before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Company recognises termination benefits at the earlier of the following dates: (a) when the Company can no longer withdraw the offer of those benefits; and (b) when the entity recognises costs for a restructuring that is within JAS 37 ‘Provisions, Contingent Liabilities and Contingent Assets’ and involves the payment of termination benefits, Leases ‘The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement and requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets and whether the arrangement conveys a right to use the asset or assets. Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are Classified as operating leases. Lease payments are apportioned between finance charges and the reduction of the lease obligation to achieve a constant rate of return on the remaining balance of the liability. Payments under operating leases are charged to the Company's Statement of Comprehensive Income on a straight- line basis over the term of the relevant lease. Exceptional costs Exceptional costs consist of acquisition and integration costs, and restructuring related charges. 18Finastra Group Holdings Limited Notes to the Financial Statements For the Year Ended 31 May 2019 Judgements in applying accounting policies and key sources of estimation uncertainty Consistent with Intemational Financial Reporting Standards, the Company makes estimates and assumptions concerning the future and in the application of accounting judgements. The following items are the most significant areas of estimate and judgement in the financial statements. Provision for impairment in investments Management reviews the balances held as investments in subsidiaries to assess for any impairment. ‘Where there are insufficient net assets in the investment, management assess the likelinood of future profits, to determine whether an impairment exists. Pensions ‘The present value of the pension obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost (income) for pension include the discount rate. Any changes in these assumptions will impact the carrying ‘amount of pension obligations (see note 15). Exceptional costs Exceptional costs during the year were $191,000 (2018: Snil) associated with legal and professional fees ‘Operating profit(loss) ‘The operating profit(loss) is stated after charging/(crediting): 2019 2018 sm SM Depreciation of tangible fixed assets - 5 Foreign exchange (gainVloss ) 26 Gain on forward currency contracts ” a ‘There were no employees in the year (2018: nil. Audit fees of $0.02m (2018: $0.02m) have been borne by another group company. Directors’ remuneration ‘The Directors are employed and remunerated by other group companies. The Directors do not consider there to be any remuneration in respect of their services as Directors of this Company. Interest receivable and similar income 2019 2018 sM sM Interest receivable from group companies 26 24 16Finastra Group Holdings Limited Notes to the Financial Statements For the Year Ended 31 May 2019 Interest payable and similar expenses 2019 2018 SM SM Other finance cost 9 4 Interest payable to group undertakings 10 5 Tax on profiti(loss) 2019 2018 SM SM Corporation tax UK corporation tax charge for the year : - Factors affecting tax charge for the year The tax assessed for the year is lower than (2018: higher than) the standard rate of corporation tax in the UK of 19% (2018: 19%). The differences are explained below. 2019 2018 SM SM Profitoss) before taxation 20 (20) Profit(loss) multiplied by standard rate of corporation tax in the UK of 19% (2018: 19%) 4 @) Effects of: Group relief received without charge 4 3 Deferred tax not recognised : 1 Total tax charge for the year : A The effect of changes to the corporation tax rates substantively enacted as part of the Finance Bill 2016 (on 7 September 2016) includes reductions to the main rate to reduce the rate to 17% from 1 April 2020. Deferred taxes at the Balance Sheet date have been measured using these enacted tax rates and reflected in these financial statements, At 31 May 2019, there is an unrecognised deferred tax asset of $1.1m (2018: $1.5m). This deferred tax asset has not been recognised as it is uncertain whether the Company will have sufficient future profits within the Group to utlise the assets. The unrecognised deferred tax balance comprises amounts of $1.1m (2018: $1.5m) for deductible temporary differences relating to fixed assets. v7Finastra Group Holdings Limited Notes to the Financial Statements For the Year Ended 31 May 2019 10. Property, plant and equipment Leasehold Fixtures and improvements fittings Total sm sm sM Cost At 1 June 2018 8 2 10 At31 May 2019 8 2 10 Accumulated depreciation ALA June 2018 a 2 10 At31 May 2019 8 2 10 Net book value At31 May 2019 : e : At31 May 2018 5 : Roundings on presentation to $m in the table above have resulted in a net book value of nil for fixtures. and fitings at 31 May 2019. The actual net book value at this date was $111,000 (2018: $164,000) Depreciation charges for the year, included within administrative expenses, were $53,000. 18Finastra Group Holdings Limited Notes to the Financial Statements For the Year Ended 31 May 2019 "1. Investments. Cost At‘ June 2018 At31 May 2019 Impairment Att June 2018 At31 May 2019 Net book value At31 May 2019, At31 May 2018 Investments in subsidiary undertakings sm 1,393 1,393, 625 625 768 768 In the opinion of the Directors, the carrying value of the Company's investments is not less than the recoverable amount. ‘The Company is exempt under Section 401 of the Companies Act 2006 from the requirement to prepare consolidated financial statements as it and its subsidiary undertakings are included by full consolidation in the consolidated financial statements of Tahoe Bidco Ltd, a company incorporated in Cayman Islands. Direct subsidiary undertakings ‘The following were direct subsidiary undertakings of the Company: Name Registered office address Holding Principal activity Finastra Europe Limited ; 100% Holding company Finastra Holdings Limited (note 1) : 5% Holding company Misys Retirement Benefits Trustees Limited : 100% Dormant Misys Group Pensions Trustees Limited * 100% In liquidation ‘The following were indirect subsidiary undertakings of the Company: Name Finastra Software Solutions (India) Private Limited Principal Registered office address Holding activity Virgo Building, Bagmane Constellation Business Park, Outer Ring Road, Doddanekundi, Bengaluru, Karnataka, 560037, India 100% * 19Finastra Group Holdings Limited Notes to the Financial Statements For the Year Ended 31 May 2019 11, Investments (continued) Finastra Global Operations Limited (formerly Summit Asia Limited) Misys India Holdings Limited Finastra Romania SRL. (formerly Misys International Financial Systems SRL) Misys International Financial Systems SL Misys Egypt LLC ‘Sophis Brazil Servicos De Tecnolgia Lida (note 2) Finastra Morocco S.8 1, (formerly Misys. Morocco S.8 rl.) Misys Spain S.L. Misys Netherlands Global B.V. Finastra Italy Sc (formerly Misys italy Se) Finastra Ireland Limited Finastra (Thailand) Limited (formerly Misys International Systems Limited) PT Misys International Financial Systems Finastra Europe S.A, Finastra South Aftica (Pty) Ltd (formerly Misys International Financial Systems (Proprietary) Limited) Misys International Banking Systems AG. 5 100% c 100% Othideea Towers, Strada Orhideelor nr. 15 Etajele 2, 38i4, Sector 6, Bucuresti, Romania 100% Edificio Mapfre, Avenida de Burgos, no 12, 3 planta, 28036, Madrid, Spain 100% 26 July 10 Street, Downtown the Third Round, Cairo, Egypt 100% Rua Olimpiadas, 205, 4° andar, conjunto 44, salas 401, 403, 404 e 408, Vila Olimpia, S80 Paulo SP, CEP (04551 000, Brazil 99.99% 219, boulevard Zerkouni, résidence El Bardai, ETG 1 APPT 1 MAARIF, Casablanca, 2000, Morocco 100% Edificio Maptre, Avenida de Burgos, n° 12, 3° planta 28036, Madrid, Spain 100% Herikerbergweg 238, 1101CM, Amsterdam, Zuidoost, Netheriands 100% Corso Italia 1, Milano, Italy 100% East Point Business Park, Dublin 3, Ireland 100% No. 191 Silom Complex Building, 17th Floor, Room 1712 Silom Road, Silom Sub district, Bangrak District, Bangkok, Thailand 100% Ged, Bursa Efek Indonesia, Tower II 16 Floor Suite 1601, JI, Jend. Sudirman Kav. 52 53 Senayan Kebayoran Baru, Jakarta, Selatan, 12190, Indonesia 100% 287 289, Route d'Arlon, L 1150, Luxembourg, Luxembourg 100% Office LO3 LO4, Zone Phase 2, 31 Tyrwhitt Avenue, Rosebank, Johannesburg, Gauteng, 2196, South Africa 100% Bahnhofstrasse 52, 8001, Zurich, Switzerland 100% 20 Holding companyFinastra Group Holdings Limited Notes to the Financial Statements For the Year Ended 31 May 2019 1. Investments (continued) Misys International ‘Systems - Informatica Unipessoal Limitada Misys International Banking Systems KK. Misys Africa Limited Misys International Banking Systems Limited Finastra International Limited Finastra International GmbH Finance Information et Technologie SAS Finastra France SAS ACT Pension Trustees Limited Misys International Banking Systems (CIS) Limited Finastra UK Limited Finastra MKI Australia Pty Limited (formerty MKI Australia Pty) Finastra International Ply Limited (formerly Misys International Banking Systems Pty Limited) Finastra Hong Kong Limited Misys Intemational Financial Systems. Technology (Beijing) Limited Misys Philippines Inc. (note 3) Misys Poland $p2.0.0 Finastra Malaysia Sdn Bhd (formerly Misys Intemational Systems Sdn Bhd) Praga do Campo Pequeno, 48 2* Dt’, 1000 081 Lisboa, Portugal Fukoku Seimei Building, 2 2 2 Uchisaiwaicho, Chiyoda Ku, Tokyo, Japan 2800 Park Place, 666 Burrard Street, Vancouver BC \VeC 227, Canada Hedderichstrasse 36, 60594, Frankfurt, Germany ‘Washington Plaza 42, rue Washington, 75008 Paris, France ‘Washington Plaza 42, rue Washington, 75008 Paris, France Level 10, 167 Macquarie Street, Sydney 2000 NSW, Australia Level 10, 167 Macquarie Street, Sydney NSW 2000, Austral Suites 604 610, 6th Floor, Everbright Centre, 108 Gloucester Road, Wanchai, Hong Kong Room 2760, Building No 9 17, ‘Yongdingmenneizhongli, East Street, Dongcheng District , Bejing, China 8th Floor, Zuellig Building, Makati Ave cor Paseo De Roxas, Makati City, 1225, Philippines Biurowiec Lumen, ul. Zlota 59, 00 120 Warszawa, Polska, Poland 10th Floor, Menara Hap Seng, No.1 & 3 Jalan P Ramlee 50250 Kuala Lumpur, Malaysia a 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 99.99% 100% 100% Holding company Holding companyFinastra Group Holdings Limited Notes to the Financial Statements For the Year Ended 31 May 2019 4. Investments (continued) Finastra USA Inc. (Delaware) Finastra Technology, Ine. Misys International Banking Systems Mexico S.A. DE CV Finastra Hungary Kft Finastra Sauci Arabia (formerly Troy TRM Limited) (note 1) Finastra USA, Inc. (Delaware, US) D#H USA Holdings LUC (Delaware, us) Finastra USA Corporation (Oregon, US) Fundtech tnvestments I, Inc. (Delaware, US) US FT Parent, Ine (Delaware, US) D+H Investments $.a +, (Luxembourg) Finastra Financial Technology Corporation (Celaware, US) BServ Investments, Inc. Finastra Merchant Services, Inc (Nevada, US) World Trade Board Limited Fundtech Australia PTY Limited (Australia) Fundtech UK Limited (UK) Fundtech FSC Lia. (UK) ‘Accountis Europe Ltd (UK) DH Corporation (Ontario, Canada) 1209 Orange Street, Wilmington DE 19801, United States. 285 Madison Avenue, 4th Floor, New York 10017, United States Torre Candela, Sierra Candela #111, Piso 2, Despacho 208, Col Lomas de Chapult, OF 11000, Mexico Szechenyi u. 70 Floor IV, Miskole, H 3530, Hungary Cerecon Building 8, 1st floor, Mousa Bin Nasyer Street, Olaya, Post box number 1119, Riyadh, 11393, Saudi Arabia 1209 Orange Street, Wilmington, DE 19801, United States Corporation Trust Center, 1209 Orange St, ‘Wilmington, DE 19801, United States. CT Corporation System, Attn Legal Department, 1320 ‘SW Broadway, Suite 100, Portland, Oregon, 97301 Corporation Trust Center, 1209 Orange St, Wilmington, DE 19801, United States Corporation Trust Center, 1209 Orange St, Wilmington, DE 19801, United States 287 289, Route d’Arlon, L 1150, Luxembourg Corporation Trust Center, 1209 Orange St, Wilmington, DE 19801, United States Corporation Trust Center, 1209 Orange St, Wilmington, DE 19801, United States “The Corporation Trust, Company of Nevada, 701 S Carson St STE 200, Carson City, Nevada, 80701 Level 29, 66 84 Goulburn Street, Sydney, NSW 2000, Australia 120 Bremner Blvd, 30th Floor, Toronto, ON MS OA8, Canada 22 100% 100% 100% 100% 90% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Holding company In liquidationFinastra Group Holdings Limited Notes to the Financial Statements For the Year Ended 31 May 2019 14, Investments (continued) Tricura Canada Inc (Federal, Canada) 1119614 BG.C. ULC (®C, Canada) 1119607 B.C, Ltd (BC, Canada) D+H Cheque Services Corporation (BC, Canada) D+H Mortgage Technology Corporation (BC, Canada) D+H Shared Services Corporation (BC, Canada) D+H Software Corporation (BC, Canada) F-T. Israeli Holdco 2011 Ltd, (Israel) D+H Financial Technology Limited Finastra Financial Technology Israel Ud D+H Solutions India Private Limited Finastra Israel Technology Limited Fundtech india Private Limited Finastra Switzerland GmbH Functech Financial Messaging Lid Finastra Financial Technology Germany GmbH 2 Robert Speck Parkway, 11th Floor, Mississauga, ON L4Z 1H8, Canada 1600 925 West Georgia Street, Vancouver, BC VEC 312, Canada 1600 925 West Georgia Street, Vancouver, BC VEC 312, Canada 1600 925 West Georgia Street, Vancouver, BC VEC 312, Canada 1600 925 West Georgia Street, Vancouver, BC VEC 312, Canada 1600 925 West Georgia Street, Vancouver, BC VEC 312, Canada 1600 925 West Georgia Street, Vancouver, BC VEC 312, Canada Sth Floor, 10 Hamada Street, Herzliya, 4673344, Israel 8th Floor, Block E Iveagh Court Harcourt Road, Dublin, 2; Ireland 14 Hamaskir Street, Herzliya, 467331, Israel 6A, Sixth Floor, Plot 2, Leela Infopark, Technopark, Trivandrum, Kerala, 695581, India 5th Floor, 10 Hamada Street, Herzliya, 4673344, Israel Office No. 604 & 605, 6th Floor, Powai Plaza, Hiranandani Complex, Powai Mumbai, 400076, India Baderstrasse 29, 5400, Baden, Switzerland HedderichstraBe 36, 60594, Frankfurt am Main, Germany 23 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% In liquidationFinastra Group Holdings Limited Notes to the Financial Statements For the Year Ended 31 May 2019 11 12, Investments (continued) * denotas the principal activites of supply of software and services to the banking and cpital markets industry. ‘+ denotes that the Company entered into strike off with effect from 1 September 2017. * denotes that the registered office address of the subsidiary is Four Kingdom Street, Paddington, London, W2 68D, United Kingdom ‘The class of shares held in all subsidiaries is ordinary. Notes 41. The remaining shareholding is owned by another group undertaking. 2. The remaining shareholding is held by another group undertaking. Additionally, the exact shareholding (of Sophis Brazil is 99.9979%. 3. The exact shareholding of Misys Philippines Inc. is 99.9967%. The remaining shareholding is owned by 5 Individuals holding 0.00007% each ‘Several of the Parent Company's direct subsidiaries were dissolved during the year ended 31 May 2019. ‘On 16 December 2017 IDOM Consulting Limited was dissolved. On 8 December 2017 ACT Sigmex Limited was dissolved, On 17 September 2019 Intersoftware UK Limited (UK) was dissolved, On 17 ‘September 2019 Payactive Limited was dissolved. On 17 September 2019 Intersoftware Bureaux Limited was dissolved. On 4 October 2019 Fundtech Singapore Pte Ltd was dissolved. On 16 December 2017 ACT Overseas Limited was dissolved. On 8 December 2017 Misys Finance Limited was dissolved Trade and other receivables 2019 2018 sm SM Amounts falling due after more than one year ‘Amounts owed by group undertakings 4,048 970 2019 2018 SM sm Amounts falling due within one year ‘Amounts owed by group undertakings 274 182 Other receivables 3 4 277 186 ‘Amounts owed by group undertakings are unsecured and are repayable on demand. However, payment of $1,048m (2018: $970m) is not expected within the short term and so these amounts are classified as non-current assets. Of the non-current amounts owed by group undertakings above, $930m (2018: $935m) is interest bearing. The make-up of this amount has attracted interest at floating rates ranging from -0.36% to 2.79% (2018: 4.62% to 7.32%) during the year. 24Finastra Group Holdings Limited Notes to the Financial Statements For the Year Ended 31 May 2019 13. 14, Derivative financial instruments 2019 2018 sM sm Derivative financial assets Forward contracts. ‘The Finastra Group operates internationally and is exposed to foreign exchange risk arising from various currency fluctuations. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign operations. The Group reviews the non euro net cash flow exposure of the Group and hedges exposures which exceed the limit specified by management using external forward contracts. Al derivative fnancial instruments are measured at their fair value and are calculated by reference to the net present value of future cash flows, based on exchange rates at the reporting date. During the year a gain of §1.0m (2018: gain of $1.3m) was recognised in administrative expenses in the Statement of Comprehensive Income in relation to forward foreign currency contracts. ‘Trade and other payables 2019 2018 sM sm Amounts falling due within one year Bank overdrafts and borrowings 83 7 ‘Amounts owed to group undertakings 412 181 495 188 Included within bank overdrafts and borrowings, is the Company's principal short-term debt facility being the RCF, a committed borrowing facility provided by commercial banks. The RCF has a total availability ‘of $400.0m, a portion of which can be used at the option of the Company to issue guarantees. The interest rate on drawings under the RCF is at a floating range of borrowing. At 31 May 2019, $54.0m (May 2018: nil) of short-term loans were drawn under the facility. 25Finastra Group Holdings Limited Notes to the Financial Statements For the Year Ended 31 May 2019, 14. 15. Trade and other payables (continued) 2019 2018 SM sM ‘Amounts falling due after more than one year ‘Amounts owed to group undertakings 829 41,005 Other creditors fi 1 830 1,006 ‘Amounts owed to group undertakings are unsecured and repayable on demand. However, the ‘counterparties have confirmed that payment of $823m (2018: $1,005m) will not be recalled within the short term and so these amounts are classified as non-current liabilities. Of the non-current amounts owed to group undertakings above, $814m (2018: $997m) is interest bearing. The make-up of this amount has attracted interest at floating rates ranging from -0.36% to 2.79% (2018: 1.27% to 3.35%) during the year. Retirement benefit obligations ‘The Company operates a defined benefit pension scheme. in 2003/04, the active members of the Misys UK final salary retirement benefits plan ("the Plan”) ceased to accrue benefits on the basis of their final salary during the year. Thereafter, the benefits of the active members accrue on a money purchase (defined contribution) basis, ‘The Plan is a funded, defined benef, final salary pension plan. The level of benefits provided depends on members! length of service and their date of leaving the Plan. Pensions in payment receive different levels of increases, some fixed (at 0%, 3% and 3.5% per annum) and some receive inflationary increases in ine with the increase in the Retail Prices Index ("RPI") (subject to certain caps and ficors). The benefit payments are from trustee administered funds. The amounts of contributions to be paid are decided jointly by the employer and the Trustees of the Plan. Assets held in trust are governed by UK regulations and practice. The Plan's investment strategy is decided by the Trustees, in consultation with the employer. The board of Trustees must be composed of representatives of the employer and plan participants in accordance with the Plan's legal documentation, ‘The latest full actuarial valuation of the Plan was carried out as at 31 May 2014, the assumptions of which have been updated to 31 May 2019 by qualified independent actuaries, 2019 2018 sm SM Present value of funded obligations. (ray (80) Fair value of plan assets 82 90 Total surplus of defined pensions plans 8 10 Unrecognised asset due to limit in IFRIC 14 - JAS 19 ‘Employee benefits @) (10) Liability in the Balance Sheet - - 26Finastra Group Holdings Limited Notes to the Financial Statements For the Year Ended 31 May 2019 18. Retirement benefit obligations (continued) ‘The year end assets and liabilities in the Plan were: 2019 2018 sm sm Investment funds 52 59 Buy-in contract 29 30 Cash and other 1 1 Total market value of assets 82 90 Actuarial valve of liabilities (74 (80) Surplus in the Plan 8 10 Unrecognised asset due to limit in IFRIC 14 - IAS 19 ‘Employee benefits’ (8) (10) Net pension liability at 31 May 2019 - : Of which not quoted on 2019 active market, % sm SM Investment funds. 52 82 64 Buy-in contract 23 29 36 Cash and other 1 1 1 82 82 100 ‘The Plan does not invest in the Group's own transferable financial instruments. Of which not quoted on 2018 active market % SM SM Investment funds 59 59 66 Buy-in contract 30 30 33 Cash and other 1 1 1 920 90 100 arFinastra Group Holdings Limited Notes to the Financial Statements For the Year Ended 31 May 2019 45. Retirement benefit obligations (continued) The Trustee of the Plan bought @ bulk annuity policy from Legal & General Assurance (Pensions Management) Limited in respect of the Plan's pensioners and their dependents as at 14 August 2012. An estimate of the value of the buy in contract is included in the asset value. ‘The market value of assets is considered to be materially the same as fair value. Reconciliation of present value of plan liabilities: 2019 sm ‘At the beginning of the year (80) Interest expense 2 Gains and losses on settlement 5 Actuarial gains 2 Exchange differences (2) Benefit payments 3 At the end of the year 74) Reconciliation of present value of plan assets: 2019 sm Atthe beginning of the year 90 Interest income 2 Gains and losses on settlement 6) Return on plan on assets excluding amounts included in interest expense @) Exchange differences 2 Benefit payments At the end of the year ‘The actuarial gain recognised in other comprehensive income is $n (2018: $n). 28 2018 SM 0 8) 8)Finastra Group Holdings Limited Notes to the Financial Statements For the Year Ended 31 May 2019 15. Retirement benefit obligations (continued) Inflation (RPI) Inflation (CPI) Fixed 3% Fixed 3.5% RPI max 5% min 3% RPI max 5% min 3.5% Post 1988 Guaranteed minimum pension Discount rate for Plan liabilities 2019 3.55 2.55 3.00 3.50 3.70 3.95 2.20 2.30 2018 3.35 2.35 3.00 3.50 3.60 3.90 2.10 2.65 Assumptions regarding future mortality are set based on actuarial advice in accordance with published statistics and experience. These assumptions translate into an average life expectancy in years for a pensioner retiring at age 60: Life expectancy for male currently aged 60 Life expectancy for female currently aged 60 Life expectancy at 60 for male currently aged 40, Life expectancy at 60 for female currently aged 40, 2019 Years 28.7 30.7 29.3 30.8 The sensitivity of the defined benefit obligation to changes in the principal assumptions is: Discount rate RPI inflation 29 Impact of 0.1% increase on the defined benefit obligation 2018 Years 28.9 30.9 29.4 34 Impact of 0.1% decrease on the defined benefit obligation SM 09 (0.2)Finastra Group Holdings Limited Notes to the Financial Statements For the Year Ended 31 May 2019, 15. Retirement benefit obligations (continued) ‘Additionally, a decreaselincrease of one year in the demographic change assumption would have a ($1.5m)/$1.5m impact on the defined benefit obligation. ‘The above sensitivity analysis on the discount rate is based on a change in assumption while holding all ‘other assumptions constant, The change in RPI inflation assumption impacts on the CPI (Consumer Prices Inflation), revaluation in deferment and pension increase assumptions. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the pension liability recognised within the ‘Statement of financial position. ‘The plan is exposed to a number of risks, the most significant of which are detailed below. Asset volatility ‘The liabilities are calculated using a discount rate set with reference to corporate bond yields; if assets underperform this yield, this will create a deficit. The Plan holds a significant proportion of growth assets (e.g. equities, property, absolute fund return) which are expected to outperform corporate bonds in the long term while providing volatility and risk in the short term. The allocation to growth assets is monitored ‘such that itis suttable with the Plan's long term objectives. Changes in bond yields A decrease in the corporate bond yields will increase the Plan's liabilities, although this will be partially offset by an increase in the value of the Plan’s bond holdings. Inflation risk ‘The majority of the Plan's benefit obligations are linked to inflation, and higher inflation will ead to higher liabilities (although, in most cases, caps on the level of inflationary increases are in place to protect against extreme inflation). The majority of the assets are either unaffected by, or loosely correlated with, inflation, meaning that an increase in inflation will also increase the deficit. Life expectancy The majority of the Plan's obligations are to provide benefits forthe lfe of the members, so increases in life expectancy will result in an increase in the lables. ‘The Plan uses the buy in contract and liability matching assets (which includes swaps and cash funds) as matching assets. The remainder of the assets is used as growth assets. Funding levels are monitored on a quarterly basis and the next triennial valuation is due to be completed as at 31 May 2022 ‘There are no employer contributions expected to be paid to the Plan for the year ending 31 May 2020. ‘The weighted average duration of the defined benefit obligation is approximately 15 years. 30Finastra Group Holdings Limited Notes to the Financial Statements For the Year Ended 31 May 2019 16. 47. 18, Called up share capital 2019 2018 sm $M Allotted, called up and fully paid 334,387,338 (2018: 334,387,338) Ordinary shares of £0.0114286 each 6 6 Reserves Share premium account Share premium comprises amounts subscribed for share capital in excess of nominal value. Capital redemption reserve The capital redemption reserve comprises the nominal value of share capital that has been repurchased Retained earnings Retained earnings represents cumulative profits, losses and total other comprehensive income made by the Company, including distributions to, and contributions from, the owner. Contingent liabilities On 13 June 2017 as part of the combination with D+H, Vista Equity Partners, the Finastra Group's ultimate controlling party arranged for new external debt finance to refinance its existing debt and provide funding for the acquisition of D+H. The new external debt finance consisted of $3,582m and €850m First Lien Term Loans, $1,245m Second Lien Term Loan, and a Mult-Currency Revolving Credit Facility (‘new RCF") totalling to $400m. The First Lien Term loans will mature on 12 June 2024, the Second Lien Term loan will mature on 12 June 2025 and the new RCF will mature on 13 June 2022. The Company together with several other wholly owned subsidiaries of the newly formed Finastra Limited Group, guarantees these credit facilities. Under these credit facilities there is a fixed and floating charge over all the assets of the Company. There is also a negative pledge over these assets, The Company and its subsidiaries may be parties to legal actions and claims arising in the ordinary course of business. Whilst the outcome of current outstanding actions and claims remains uncertain, itis, expected that they will be resolved without a material impact to the Company's financial position, The Company considers that itis remote that any material liabilities will arise from any other contingent liablities which are not identified above. 3Finastra Group Holdings Limited Notes to the Financial Statements For the Year Ended 31 May 2019 419. Subsequent events On 17 October 2018, the Finastra Group refinanced i's ‘st Lien Debt through Finastra Europe Sarl, a trading entity in the group. As a result, the Company received €79.3m of cash in exchange for an intercompany loan demand note from Finastra Europe Limited. The loan was non-interest bearing, On the same date, Finastra Europe Limited transferred the loan receivable to Finastra Holdings Limited. The Joan was redenominated into a $86.9m receivable with the Company. The funds received were used to reduce the utilized ‘st Lien Revolving Credit Facility by $86.9m, The Directors of Finastra Ireland intend to place the company into voluntary liquidation during 2020, following the completion of due diligence. Finastra Ireland is an indirectly held subsidiary and the liquidation is not material to the Company. 20. Ultimate parent company The immediate parent company undertaking is Misys International Limited, whose registered office address is Four Kingdom Street, Paddington, London, W26BD. ‘The parent company of the smallest and largest group in which the Company is included in consolidated financial statements is that of Tahoe Bidco Ltd, a company incorporated in the Cayman Islands. Copies of the consolidated financial statements of Tahoe Bidco Ltd may be obtained from Finastra Group Secretariat, Four Kingdom Street, Paddington, London, W2 6BD. ‘The Ultimate controlling party is Vista Equity Partners, incorporated in the United States of America. 32