Financial Review

booked as a cost in Cost of Sales. There was no impairment charge in the year (2021: £0.6m).

Rent collections returned to pre-pandemic levels in 2022, averaging 99% for commercial occupiers and 98.5% for residential tenancies.

Operating profit before capital items decreased by £2.4m to £98.4m. Had we restated the misstatement due to the rent smoothing adjustment above in 2021 we would be reporting a £7.8m (8.2%) increase in operating profit before capital items from £95.7m in 2021 to £103.5m in 2022. The improvement in turnover was mostly offset by a rise in property and administration expenses due to increased development and trading activity.

SANJAY PATEL FINANCE DIRECTOR

Turnover includes income from hotels and serviced apartments of £8.9m (2021: £3.1m), the increase driven by a strong recovery of the hospitality sector following the first year since the pandemic started when hotels were no longer faced with restrictions on opening or trading.

During the year an overstatement of 2021 gross rental income by £5.1m was identified relating to a rent smoothing adjustment. We have chosen not to restate the prior year revenue figure given the amount is immaterial. Had a restatement been made we would be reporting gross rental income growth of £16.5m (10.3%) between 2021 and 2022. The significant year on year increase reflects a year of strong growth in leasing activity accompanied by rents achieved on average in excess of ERV and the impact of inflation-linked rent increases across the commercial and residential sectors.

There were no additional rent concessions provided in the year recognised as a reduction to gross rental income (2021: £3.1m)

In relation to rent deferrals or rents outstanding, the rental income is recognised as normal with the deferred rent or rent receivable balance remaining in trade debtors until settled. Where there is a credit risk over recoverability of a balance that is contractually due, any impairment is

Property expenses increased mainly as a result of carrying out more refurbishments in the year and the commencement of the Sloane Street Public Realm project. Hotel and serviced apartments cost of sales reflected a full year of costs for the Beaverbrook Town House, which opened in August 2021.

Administration expenses increased mainly as a result of costs incurred for the arrangement of long-term private placement financing, increases in salary, marketing and overhead costs.

The profit from the sale of investment properties in 2022, which includes profits from leasehold enfranchisements, contributed £15.1m compared to £12.2m in 2021 despite lower net proceeds. There was a higher number of transactions completed at 64 compared to 49 in 2021.

The consolidated income statement reflects the movement on the annual revaluation of the investment property portfolio. All categories apart from office and the regional portfolio increased in value during the year resulting in a net revaluation gain of £262.5m (2021: £34.6m).

The charge for current taxation in the year was £13.3m, a decrease of £5.6m compared to 2021 and a larger decrease than the decrease in operating profit, mainly because of a larger gain chargeable to corporation tax in 2021 from the sale of investment properties.

Turnover increased by 10.4% to £186.5m

(2021 - £168.9m)

Gross rental income increased by 3.8% to £170.8m

(2021 - £164.5m)

Operating profit before capital items decreased by 2.4% to £98.4m

(2021 - £100.8m)

Gain on revaluation of investment properties £262.5m

(2021 – £34.6m)

Increase of 5.4% in capital values on a like for like basis

Residential property disposal and enfranchisement proceeds reduced by 20% to £65.8m

(2021 – £82.2m)

Profit on property disposals and enfranchisement sales increased by 23.8% to £15.1m

(2021 – £12.2m)

Profit on ordinary activities before taxation (including revaluation gains) of £340.2m income tax. Furthermore, a substantial proportion of the dividend is used to provide for the ten-yearly charge to inheritance tax in relation to certain of the trust assets. In the case of the principal trust, it paid the latest ten-yearly charge in 2022 and is now starting to put funds aside for the next ten-yearly charge, due in 2032. We calculate that total dividends required by the family trusts from Cadogan to pay the inheritance tax charge due in 2022 amounted to £205m.

The overall figure for taxation in the income statement for 2022 was a charge of £79.0m (2021: charge of £228.7m). The reduction compared to 2021 is due mainly to a deferred tax charge in 2021 recognising an enacted future increase in the corporation tax rate from 19% to 25% in April 2023.

There were two dividends paid to shareholders in 2022, a first interim dividend of £49.6m in April and a second interim dividend of £26.9m in December. The first interim dividend was paid mainly to provide further funds to the major shareholder so it could meet an upcoming tenyearly inheritance tax charge which was due in 2022. A proportion of the second interim dividend and all normal dividends is set aside by the major shareholder to provide funds for future ten-yearly inheritance tax charges. A further portion of the dividend is paid to a charitable trust set up by the Cadogan family which requires the funds to make charitable donations.

Cadogan is mindful of its tax obligations and is liable for, and collects on behalf of HMRC, various taxes in its operations. The table below shows the tax paid by Cadogan and that collected and remitted to HMRC by Cadogan. As in previous years, the tax collected is significantly greater than the direct tax charge shown in our accounts, demonstrating our wider contribution to the UK economy.

Balance Sheet And Borrowings

The value of our properties at the end of 2022 was £5.10bn, an increase on the previous year’s figure of £4.80bn. On a like for like basis this reflected an increase in value of 5.4% compared to a small increase in 2021 of 0.7%. Consequently, Group shareholders’ funds increased from £3.26bn to £3.44bn. Net assets per share increased to £28.68 from £27.14, an increase of 5.7%.

Cash inflow from the Group’s operating activities rose to £126.5m, compared to an inflow of £44.0m in 2021. The cash flow in 2021 was lower mainly because of a £51m short-term loan advanced to the parent company Cadogan Settled Estates Holdings Limited to enable the latter to make a capital distribution to the trust settlements that own the Group to fund the 2022 inheritance tax liability. The loan was repaid in April 2022.

Year end borrowings, excluding cash of £62.0m (2021 –overdraft of £2.4m), increased during 2022 from £806.8m to £850.4m. In December we received £100m from a deferred drawdown of a private placement completed earlier in 2022. As a result of these proceeds, the revolving credit facility was not utilised at the year end, a decrease of £35m compared to 31 December 2021. There were loan repayments in the year totalling £19m, comprising a £4m capital repayment in March on a loan maturing in 2025 and £15m in December in respect of maturing loan notes from a 2012 private placement. There was a reduction of £2.4m in 2022 after translating our dollar denominated borrowings at the year end exchange rate and recognising the fair value of the related cross currency swaps. At 31 December 2022 the average maturity of our debt was 16.33 years (2021: 12.28 years) and the average effective rate of interest across all drawn loans reduced from 4.44% in 2021 to 4.19%. Apart from the revolving credit facilities, all our debt is at fixed rates.

There was a reduction in year end balance sheet gearing to 22.9% from 24.9%. Gearing as measured under our loan covenants, reduced by 1.6% to 18.9%, while interest cover decreased to 3.2 times from 3.4 times, comfortably in excess of our financial covenants. At the year end there were total undrawn facilities available to the Group of £300m under revolving credit facility arrangements.

In addition to the tax set out in the table, Cadogan Group’s dividends flow through to several family trusts and are (save in the case of a charitable trust) subject to

In February and March 2022, we arranged £300m of long-term funding from three private placement deferred loans, taking advantage of low interest rates in anticipation of projected funding requirements over the next five years. £100m of this funding was drawn in December 2022, £50m is deferred to September 2024, £50m to March 2025, £50m to September 2025 and £50m to September 2026. The initial tranche of £100m matures in 2043 and the remaining tranches have maturities in 2060 and 2062.

On 15 March 2023 we refinanced our revolving credit facilities, increasing them by £50m to £350m in a new syndicated revolving credit facility for a term of 3½ years expiring on 15 September 2026, with two 1-year extension options exercisable from 1½ years and 2½ years of the start date.

Going Concern

We have undertaken a stress test with a severe but plausible downside scenario of an economic downturn beginning in the second half of 2023, to assess the potential impact on headroom for liquidity and loan covenant compliance, taking account of mitigations available. Details of the stress test are provided in the Going Concern section of the Directors’ Report on pages 94 to 95 and the conclusion is that, in the severe but plausible downside scenario modelled, we would have sufficient liquidity and satisfy all our loan covenants in 2023 and 2024.

Approach To Risk Management

Cadogan has a well-developed strategy and process for risk management. Overall responsibility for risk management lies with the Group board, which is responsible for determining the Group’s risk appetite and ensuring that the Group’s risk management system properly identifies, understands and manages all relevant risks.

The Group’s risk appetite and processes for managing risk are regularly reviewed by the board. The Finance Director, supported by the senior management team, is responsible for compiling the Risk Register which is updated on a regular basis. The Risk Register identifies the principal risks impacting on the business and the Group’s financial position. It provides an assessment of the likelihood of the identified risks materialising and includes an estimate of the potential impact of each area of risk on the business. The Register is formally reviewed by the board at least annually and this forms an important part of the overall risk management process. The Group also makes use of appropriate external specialists to advise on compliance with established policies and external regulations.

Cadogan is a long-term property investor with a clear focus on high quality property assets located in central London. Because of its private ownership and long-term outlook, the Group aims for, and is able to achieve, a high level of resilience in all areas of the business.

Cadogan assesses risk under three principal headings:

• Strategic risk

• Financial risk

• Operational risk

Risk Outlook

Our proactive support of occupiers during the pandemic, coupled with strong place making and curating of our portfolio has enabled the business to rebound swiftly during 2022 with high occupancy and demand for vacant space across all sectors driving robust rental growth. We have not yet seen a slackening in demand caused by the economic slowdown, benefiting from the high income demographic mix of the resident population in Chelsea and visitors to the area. Our occupiers, similarly, have experienced healthy increases in turnover as evidenced by the trading data we receive from a large proportion of our retail and hospitality occupiers.

With COVID-19 restrictions lifted and the success of the vaccination programme we view the pandemic as a receding threat but remain alert to the risk of more virulent variants emerging in future.

The recent stabilisation of the UK political environment is welcomed as it should reduce economic volatility notwithstanding the continuing risks posed by a high rate of inflation, forecast to reduce to low single digits by the end of 2023, consequential increases in the cost of borrowing and the ongoing war in Ukraine. Some of these factors could adversely impact rental income and UK property values.

Looking further forward, a change in government in 2024 could result in new policies, particularly on tax, the environment and property reform, which could impact our business.

Strategic Risks

Property market risks – the risks arising from property cycles and from shorter-term unexpected changes in the market for property investment, development and occupation. Retail has been subject to structural changes for many years, such as the ongoing shift to online transactions. These trends were accelerated by COVID-19, forcing the closure of many weak retail businesses, while others have successfully adapted their models to trade successfully in the new environment. Cadogan has been preparing for many years for the shift of retail sales to online by having a diversified asset portfolio, positioning its Estate towards luxury and distinctive retail propositions, increasing non-retail leisure and food and beverage options to increase attractiveness and increase dwell time in the area, and minimising vacant units with short-term lets to on-trend retail and hospitality occupiers. Cadogan led on the establishment of the first two Business Improvement Districts (BIDs) in 2021 in the Royal Borough of Kensington and Chelsea, on the King’s Road and Brompton Road. These are already helping to promote these areas, enhancing their vitality and attractiveness.

The move to more flexible working caused by COVID-19 has made the long-term demand for office space less certain, though Cadogan has not experienced a reduction in demand to date with vacancy levels remaining low at around 1%. The migration out of London of residential short-let tenants caused by the pandemic has largely reversed since the second half of 2021 with residential demand and occupancy stronger than before the pandemic.

Most property markets are cyclical, and this is particularly true of central London. As a long-term investor the Group is less reliant than others on predicting property market cycles and aims to manage the impact of the property cycle and any other short-term fluctuations in values or activity levels by ensuring a relatively high proportion of committed long-term loan finance, planning for significant headroom against external financial covenants and high levels of available liquidity. These factors also assist the Group in managing cash flow and liquidity risks.

Geographic concentration – the Group accepts the risks inherent in the small geographic area in which the Group’s properties are concentrated. The Group’s properties are primarily located in Kensington and Chelsea which for many years has been an area renowned for long-term prosperity and economic resilience. The Group also seeks to balance this geographic concentration through a diversified portfolio of uses and through close attention to the balance between sectors. The largest individual property represents 5.1% of the total portfolio value and the highest individual rent 3.6% of total annual rental income.

Cadogan has carefully curated its Estate over many years to create a vibrant local neighbourhood where spending is dominated by its residents and less reliant on visitor footfall. This was evidenced by the comparatively smaller reduction in footfall during the pandemic than other central London areas.

The Group monitors and is actively involved in consultation with the Royal Borough of Kensington and Chelsea where it considers that it could be affected by changes or developments to local planning policies. The Group is committed to close liaison with stakeholders and the community to ensure that its strategy and developments are understood externally. In addition, there are statutory and regulatory risks which are closely monitored.

Development risks – Cadogan regularly undertakes substantial development projects, but carefully considers the timing to ensure that the Group’s exposure to development risk is controlled, both relative to the overall portfolio and to potentially competing schemes in the same area. Cadogan consults widely with diverse stakeholders on development schemes to ensure that schemes are designed to the highest quality and to assist in obtaining the most appropriate planning consent.

COVID-19 had a number of adverse effects on development activity. Some development projects were delayed to preserve financing headroom in the face of uncertainty as to the length and severity of the pandemic. Compliance with social distancing guidelines meant fewer workers were allowed on some sites, affecting productivity. Materials shortages led to delays and increased inflation in input costs, which may lead to cost overruns on some projects. There is a need to incorporate additional flexibility in future development projects to allow a wider range of end uses following recent changes in planning use guidelines and changing market demand over time. Movement of international labour caused by travel restrictions impacted some projects relying on specialist skills from other countries. Most of these risks have abated during 2022, though high inflation continues to affect costs.

In 2022, we undertook a comprehensive review, resulting in changes to the way we procure major development projects (those costing more than £10m) and, for high value projects, we appointed new cost consultants and quantity surveying firms experienced in overseeing large, complex projects.

Risks associated with London's position as a global capital – London’s position as a global capital has been a significant factor in the overall prosperity of central London in recent years. There are risks to this position from several factors, most significantly from Brexit, from terrorism, from under-investment in infrastructure and from adverse changes to the tax regime, particularly affecting overseas investors. The Group cannot manage or control these risks but Cadogan takes an active role in lobbying through organisations such as BusinessLDN and the British Property Federation amongst others, to ensure that the long-term health of London is at the forefront of the minds of national and local government.

COVID-19 reduced the number of international visitors to the UK which adversely impacted retail on the Estate in the short-term. This has been exacerbated by the withdrawal of tax-free shopping by the Government, making the UK the only major European country that does not have a practical tax-free shopping scheme for overseas tourists. Inbound tourism has rebounded during 2022 but has still not returned to pre-pandemic numbers unlike some competing capital cities in Europe such as Paris, which is thought to be partially linked to the withdrawal of tax-free shopping. Cadogan is working closely with its retailers on enhanced marketing strategies for attracting more UK and international visitors to the area in 2023 and beyond.

Financial Risks

Interest rate risk – The majority of long-term borrowings are at fixed rates of interest, achieved either by agreement with the lender, or through the interest rate derivatives market. The board requires at least 75% of long-term debt to be subject to fixed rates of interest. The Group does not undertake financial instrument transactions that are speculative or unrelated to trading activities. Board approval is required for the use of any new financial instrument. In December 2021 and January 2022, the Group took advantage of low prevailing interest rates to raise £300m of fixed-rate, long-term deferred borrowing with maturity dates ranging from 2043 to 2062 which will be drawn in tranches in 2022, 2024, 2025 and 2026.

Inflation risk – The reopening of the world economy following the pandemic has led to widespread shortages of labour, raw materials and energy leading to higher inflation. This has been exacerbated by the war in Ukraine. The Office for Budgetary Responsibility forecasts that inflation will come down to target levels by the end of 2023, but the war in Ukraine and increasing demand from China as it emerges from its long period of isolation could mean that high inflation persists for longer and increases the risk of stagflation (low growth, high inflation). Interest rates have increased steeply to quell inflation, affecting our cost of debt and the economic outcome of investment decisions, impacting our investment strategy. Persistent inflation could also lead to increased operational costs. Rents on most of Cadogan’s commercial and residential leases are linked to RPI, mitigating against cost inflation.

Construction costs on development projects can be locked at the outset through fixed price contracts, but in a high inflation environment it could lead to higher construction costs for new projects and projects where the costs have not been fixed as contractors seek to mitigate their risk. High inflation can help retailer profitability where they are able to pass on costs through higher pricing, providing retail occupiers, particularly luxury retailers, with a hedge against higher rents.

Refinancing risk – The Group seeks to manage refinancing risk using a spread of loan maturities. In normal circumstances loan terms, other than bank loans, are for an initial period of ten years or more. The incidence of maturities is spread to ensure that major refinancing is spaced out over time. On 15 March 2023, the Group refinanced £300m of existing revolving credit facilities that were due to expire in April 2024, with a new £350m syndicated revolving credit facility having a 3½ year term expiring in September 2026 which has two 1-year extension options exercisable at any time 1½ years and 2½ years after the inception of the facility.

Foreign currencies – Some of the private placings of debt which the Group has undertaken have included a significant proportion of US dollar borrowings. All exposure to US dollars in relation to both interest and capital repayments has been swapped into sterling on the date on which the loans were committed, and as a result there is no residual foreign exchange risk exposure to the Group. Operationally the Group has no foreign currency exposure.

Compliance with financial covenants – The Group has provided financial covenants to its lenders to support its unsecured borrowings. The Group’s financial position is regularly monitored against the covenant requirements to ensure that the Group has significant financial headroom and is not at risk of breaching any of the covenants. Scenario planning is used to assess the sensitivity of potential changes to the principal financial measures which might impact the ability to meet covenant requirements.

Customer creditworthiness – COVID-19 resulted in a sharp fall in rent collection rates and an increase in defaults. Cadogan responded quickly through a number of initiatives. It identified a list of the smaller and most financially vulnerable businesses and offered various financial support packages including deferrals, waivers, turnover only rents and monthly in arrears payments, the purpose being to enable them to survive the crisis and remain operational afterwards. The frequency of credit control meetings was increased from 8 to 12 times a year, and additional staff were recruited to liaise with customers to help assess and deal with their requests. These actions resulted in minimising commercial vacancies and defaults and increased rent collection rates which have returned to pre-pandemic levels during 2022.

Operational Risks

Property loss and damage – All the Group’s properties are insured against loss or damage on a full reinstatement basis, including three years’ loss of rental income. Cover includes terrorism risk which is provided by a major insurer and member of Pool Re. COVID-19 illustrated the limitations of insurance cover and highlights the importance of maintaining a strong financial position and liquidity headroom to enable the business to withstand uninsurable or unknown future events. In 2022 we started a project to digitise all our remaining paper property deeds and records to mitigate against the risk of loss due to fire or flooding.

Health and safety risks – The Group accords a high priority to health and safety. Health and safety issues are always discussed at the monthly Property Management Committee meeting of senior leadership and all incidents are reported and reviewed on a monthly basis. From time to time the Group undertakes external reviews and audits of its health and safety policies and procedures, the results of which have confirmed the quality and integrity of health and safety practices. An online health and safety system has been implemented since 2021 to enhance compliance monitoring.

Risk of energy shortages – The war in Ukraine highlighted the risk to the business and its occupiers of shortages in energy. We have back-up generators for our main site which can provide electricity for short periods of outage. Our teams are equipped to work from home for longer periods if necessary. We have collated a list of vulnerable residential tenants to ensure that vital support can be provided to them if there are prolonged power cuts, especially during cold weather.

COVID-19 resulted in employees working more flexibly. All staff are required to complete online assessments to ensure their equipment, furniture and home environment are suitable for working from home, in addition to workplace safety assessments. Mental health awareness training has been provided for staff as well as access to confidential helplines with trained professionals and there will be four mental health first aiders in place by the end of May 2023.

A similar emphasis is placed on health and safety on our construction sites, with our consultants monitoring contractors’ compliance with safety rules.

Climate change – Climate-related risks are considered to be principal risks and their management is integrated with the overall risk management strategy.

There are four climate specific risks identified which comprise both physical and transition risks and opportunities from climate change:

- Medium-term impact of climate change on our property and business, including the risk of damage caused by river or surface water flooding and the risk caused by rising temperatures and extreme weather events. The Group works closely with its principal insurer and external experts to support physical and transition climate risk assessments and strategies to implement mitigations.

- Short-term changes in environmental and climate regulation including increasing building energy efficiency and reporting requirements. Changes in legislation are monitored internally, by trade bodies of which Cadogan is a member, and our legal advisers, and suitable changes made where necessary.

- Medium-term, increasing energy and carbon pricing. Improved energy usage monitoring and management is intended to reduce consumption over time, alongside efficient equipment and renewable generation. Our energy prices were fixed under a three year contract which expires in October 2023. We will face potentially higher energy costs following that date if current high energy prices persist. Our carbon offset hedging strategy will explore the potential for pre-purchasing offsets to reduce exposure to extreme price increases in the latter half of this decade.

- Loss of social licence to operate if we are perceived not to be acting in the wider interests of the area and the country. We actively engage with the local council, the Royal Borough of Kensington and Chelsea and stakeholders in the community.

Cadogan publicly announced its new sustainability strategy, Chelsea 2030, in 2021 following its approval by the board in December 2020. Chelsea 2030 seeks to address and mitigate all the above risks.

In 2021 we conducted a climate risk review in line with the TCFD recommendations. The conclusions are summarised below, grouped under physical and transition risk.

Physical Risk

- We worked with our insurers Zurich to understand the physical risks climate change poses to our Estate, taking a building-by-building approach to modelled global risks through qualitative and quantitative scenario analysis using climate data from Jupiter Intelligence’s Climate Score Global v2.3.

- We considered risk in the short term until 2030, and medium term up to 2050, with long term information to 2100 provided for context. Our analysis focused on two distinct climate scenarios (called “Shared Socio-economic Pathways” or “SSPs”) used by the Intergovernmental Panel on Climate Change (IPCC): a scenario where global average temperature increases by under 2 degrees by the end of the century (SSP 1-2.6), and a scenario where temperatures increase by over 4 degrees by 2100 (SSP 5-8.5). Following international pledges made at COP 26 in Glasgow, we look to be on track for a climate scenario between these two.

- The scenario analysis assessed the change over time of perils including fluvial flood, precipitation, wind, hail, thunderstorm, drought, heat and wildfire. These perils were considered in the context of building vulnerabilities, including building height, presence of basements, tenant type and building structure. Together, risk was quantified by impact on building value and rental income.

- An increase in precipitation severity of approximately 6% is modelled between the baseline period and 2020-2030, and a more marked increase of 11% - 14% is projected by 2050 for both scenarios. These extreme precipitation events would see more than an average historical month’s total rain falling in 24 hours, potentially resulting in surface flooding, due to the capacity of drainage systems being exceeded.

- A small differentiation between properties regarding river flooding is observed due to terrain effects, with two properties showing a significant increase in flood risk by end of century. Properties with basements are generally more vulnerable to river and precipitation flooding, and account for over 40% of the total building value and annual rent on the Estate.

- The occurrence of severe drought conditions that impact soil moisture and reservoir storage is projected to increase by 2050 in both scenarios. Impacts of reduced soil moisture include subsidence, which affects buildings differently due to their age and type of foundations, potentially causing cracking and damage to pipes including water and gas. Other impacts of drought are felt through water availability.

- From the near-term out to the end of the century, heating is likely to remain an important requirement, although the number of hot days is also likely to increase over the century in both climate change scenarios. This is important to feed into the decarbonisation plan for the estate as heating is electrified and insulation protection provided against both extreme heat and cold.

- This physical risk is managed through both extensive consideration in new developments, and refurbishment works identified both through theoretical risk assessments and actual incidents.

Transition Risk

Three principal transition risks and mitigations have been identified as we progress towards a net zero economy:

- Risks (and opportunities) from our retail occupier concentration in high fashion and luxury goods and the fashion industry not adopting stronger ESG strategies. These risks are mitigated through our Chelsea 2030 strategy and working in partnership with occupiers and suppliers to create a more sustainable Chelsea in which brands with strong ESG strategies want to locate.

- Risk of increasing energy and carbon pricing. Our extensive energy efficiency and carbon reduction investment programme will deliver significant energy savings and protection against rising energy costs. This combined with proactive purchasing and exploration of other energy and carbon offset procurement models (such as energy trading, power purchase agreements for energy and pending issuance units for carbon offsets) will mitigate energy cost and carbon pricing risk.

- The risk of continuing changes in environmental and climate regulation. Legislation is proactively monitored, assimilated and estate management policies adapted accordingly. Through our membership of the British Property Federation we respond to consultations, contribute to industry papers and work to shape forthcoming legislation so it acts in reality as intended, ensuring we can ensure a compliant approach and support the country’s transition to a net zero economy.

IT, telecommunications and business continuity risks –The Group ensures its IT and telecommunications systems are robust and fit for purpose, with an emphasis on the development of inherent resilience and backup capability. The Group has a detailed business continuity plan which is regularly reviewed and updated. The Group undertakes regular external cyber security reviews, the last one being conducted during 2022, and implements any resulting recommendations for security improvements.

Staff are regularly reminded of e-mail and IT security threats and undergo rolling training on IT security throughout the year. As a result of its operational preparedness, Cadogan staff were able to transition seamlessly to working from home from the start of the first pandemic lockdown and IT systems have worked without any major downtime throughout the pandemic. All electronic files are stored and backed up in the Microsoft Azure Cloud. Our cyber threat response is planned to be refreshed during 2022 and we have cyber insurance in place ostensibly to provide ready access to the best IT, legal and security expertise in the event of a cyber breach or attack.

Compliance with General Data Protection Regulations (“GDPR”) is embedded within the organisation, with GDPR Champions appointed for each team, who undergo training every six months. New joiners are required to undergo compulsory GDPR training on joining and on a regular basis thereafter.