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Amiri Capital

FSA required Disclosure - Risk Assessment and Management - Pillar 3.

Amiri Capital LLP ('AC LLP') is a UK incorporated BIPRU Euro 50,000 limited licence FSA regulated Firm which holds consents to manage investments. It intends to launch Shariah compliant 'long-short' equity and property funds, domiciled in the Cayman Islands, in the course of the next 12 months. It is neither a consolidated entity nor the parent of a consolidated group, nor a member of a non EEA sub group.

In accordance with the requirements of BIPRU Section 11 of the FSA Handbook, Amiri Capital LLP, as Pillar 3 disclosure confirms as follows that:

1. AC LLP does not under any circumstances receive or hold investor funds, nor does it directly manage any amount of investor funds.
2. It does not operate any form of trading book, nor does it invest in any of its arranged funds
3. As a result of statements 1 and 2 above, it has a maximum of 4 'material' Debtors at any one time - HMCE, the Bank in which capital resources are held and, at certain times recoverable costs from as yet un-launched funds and/or unpaid Management Fees from Amiri Funds.
4. AC LLP does not have any direct Retail exposure, Equity exposure, Counterparty Credit Risk (i.e. Prime Broker or Securitisation risk) and has only minimal exposure to interest rate risk and then only on the income side. It has no debt.

These four disclosures indicate that ACLLP is thus subject to relatively few of the risks normally affecting Investment Management Firms.

The Operating Committee of the LLP is fully responsible for the assessment, measurement, mitigation and management of all risks that do actually affect the Firm. Indeed, the Committee has established a register of all risks that might, from time to time affect the Firm and/or its funds and investors therein which is available for inspection on request. Specifically it operates with the mandate to minimise risk for any investors that may be subscribers to Amiri funds, as well as for its own activities and the aim of safeguarding the assets of funds and Firm alike, whilst allowing sufficient operating freedom to secure a satisfactory rate of investment return.

Credit risk exposure to specific banks, HMCE and in house funds are regularly monitored through accounting procedures and management accounts and evaluation of the 'Credit Risk' calculated accordingly, although levels of exposure are extremely unlikely to exceed the FOR Capital Requirement as adopted.

Operational Risks have been primarily identified as threefold:

1. The threat of 'non-launch' of fund(s) - in which circumstances the FOR Capital requirement calculation is deemed adequate and fit for purpose
2. The potential for operational errors and thereby loss and the need for compensation to be paid to Funds and or individual investors - all of which are covered and thereby fully mitigated via insurance cover suitably quantified and fully effected; and
3. The effects of Market downturn on a) performance of funds, b) levels of subscriptions to Funds; and c), more specifically the effect of exchange rate changes on Revenue streams and expenditure bases. Appropriate additions to Pillar 2 Capital requirements have been made to reflect the findings of sensitivity analysis conducted on the three parameters above.

All these 3 risks are constantly monitored by the operating committee via use of management accounts and enforcement of rigorous standard operating procedures put in place to minimise the risk of operational error or defalcation, although at present time the Committee feel that the Firm is not subject to Pillar 1 Operational risk.

As at December 31st, 2008, the Firm held £502,000 of Tier 1 Capital, all held as cash resources with Abbey National Bank. It had zero Tier 2 and Tier 3 Capital resources requirements.

The Firm has conducted the ICAAP (Internal Capital Adequacy Assessment Process) in accordance with FSA regulations (the latest as at 29th December 2009, based on 30th November management accounts) and has calculated its need for Pillar 1 and Pillar 2 total liquid capital requirements as £161,000 over the next 12 months once funds are actually launched. In the absence of launch such FOR requirement remains at £109,000

The Operating Committee is charged with ensuring that sufficient liquid capital funds will be present in the business during all of the next 12 months period - the subject of the ICAAP, to comply with this FSA regulated estimate of funds required.