# Performance Composite Report: [Composite name]

> Annual performance report for one composite (the set of discretionary
> portfolios that follow the same strategy and are reported together as
> one track record), prepared by a firm that
> claims compliance with, or reports in the format of, the GIPS®
> standards (2020 edition for Firms, the current edition as of
> 2026-10). It covers the firm definition, the composite and benchmark,
> the annual return table with risk and dispersion statistics, the fee
> schedule, the calculation methodology (time-weighted and
> money-weighted returns), valuation, significant events, verification
> and a disclosure checklist written in our own words. The worked
> example is the fictional adviser Kestrel Bay Capital. Replace every
> `[bracketed]` value and every row marked *Example*. This template does
> not make a firm compliant: compliance is claimed firm-wide, and the
> required statements and disclosures must be taken from the official
> GIPS standards. This is a document format, not investment, legal or
> accounting advice. Obtain the standard or law for the normative text.

<!--
Guidance: How to use this template
- Use it to build the composite report that a firm gives to prospective
  clients and consultants, and as the controlled working file behind it.
  The client-facing report is usually a two-page extract of sections 1
  to 9; the rest of this file is the evidence that supports it.
- Fill section 1 (firm definition) and section 2 (composite definition)
  first. Every number in section 4 depends on which portfolios belong to
  the firm and the composite, and on the dates they joined or left.
- The GIPS standards are copyrighted and their website terms restrict
  automated and AI use. This template names the standards only. Insert
  the compliance statement, the trademark notice and every required
  disclosure in the exact wording taken from the official standards and
  the trademark guidelines; do not rely on paraphrases in this file.
- Marketing law applies on top of the standards: for a US registered
  adviser, the SEC Marketing Rule (17 CFR 275.206(4)-1); in the EU,
  Article 44 of Delegated Regulation (EU) 2017/565 and the ESMA
  marketing communication guidelines; in the UK, the FCA conduct rules.
  Route the final report through Marketing Review Checklist
  (`compliance/marketing-review-checklist`).
- Related documents: Performance Attribution Report
  (`finance/performance-attribution-report`), Fund Factsheet
  (`finance/fund-factsheet`), Manager Due Diligence Report
  (`finance/manager-due-diligence-report`), Valuation Policy
  (`compliance/valuation-policy`), Form ADV Part 2A Brochure
  (`compliance/form-adv-part-2a-brochure`).
-->

## Document control

<!-- Guidance: Identify the composite, the reporting period end and the people who calculated, checked and approved the figures. A new year-end is a new version; a restatement after an error is also a new version with the reason recorded. -->

| Field | Value |
|---|---|
| Document ID | [PCR-KBC-GQE-2025] |
| Version | [1.0] |
| Status | [Draft / Approved / Superseded / Restated] |
| Owner | [@head-of-performance] |
| Approvers/reviewers | [@chief-investment-officer], [@chief-compliance-officer], [@performance-oversight-committee] |
| Last updated | YYYY-MM-DD |
| Classification | [Public once approved / Internal draft] |
| Firm | [Firm name as defined in section 1] |
| Composite | [Composite name and code] |
| Reporting currency | [USD / EUR / other] |
| Period covered | [YYYY-MM-DD] to [YYYY-MM-DD] (annual periods) |
| Standard referenced | GIPS standards, 2020 edition for Firms; check for later editions and guidance statements |
| Verification status | [Verified through YYYY-MM-DD by [verifier] / Not verified] |
| Related documents | [Composite list and descriptions], [GIPS policies and procedures], [Valuation policy], [Attribution report] |

### Approvals

| Role | Name | Decision | Date |
|---|---|---|---|
| Head of performance (preparer) | [@name] | [Approve / Return for correction] | YYYY-MM-DD |
| Independent checker | [@name] | [Decision] | YYYY-MM-DD |
| Chief compliance officer (marketing review) | [@name] | [Decision] | YYYY-MM-DD |
| Performance oversight committee chair | [@name] | [Decision] | YYYY-MM-DD |

### Revision history

| Version | Date | Author | Change summary |
|---|---|---|---|
| 0.1 | YYYY-MM-DD | [@name] | First draft for the year ended [YYYY-12-31] |
| 1.0 | YYYY-MM-DD | [@name] | *Example:* Approved after independent check and compliance review |
| 1.1 | YYYY-MM-DD | [@name] | *Example:* Material error corrected in 2023 composite assets; restatement disclosed in section 8 |

## Contents

<!-- Guidance: Keep this list aligned with the headings. -->

1. [Firm definition and compliance claim](#1-firm-definition-and-compliance-claim)
2. [Composite description](#2-composite-description)
3. [Benchmark description](#3-benchmark-description)
4. [Annual performance table](#4-annual-performance-table)
5. [Fee schedule and net-of-fee method](#5-fee-schedule-and-net-of-fee-method)
6. [Calculation methodology](#6-calculation-methodology)
7. [Valuation and policies](#7-valuation-and-policies)
8. [Significant events, errors and restatements](#8-significant-events-errors-and-restatements)
9. [Verification status](#9-verification-status)
10. [Disclosure checklist](#10-disclosure-checklist)
11. [Production workflow and controls](#11-production-workflow-and-controls)
12. [Glossary and references](#12-glossary-and-references)

## 1. Firm definition and compliance claim

<!-- Guidance: Define the firm exactly as the business presents itself to clients, because compliance and total firm assets apply to that whole entity. Questions: which legal entities, brands and divisions are inside? Are any affiliates excluded, and why? Pitfall: defining the firm as only the teams whose numbers look good; the firm definition cannot be drawn around performance. -->

### 1.1 Firm definition

| Item | Entry |
|---|---|
| Firm name | [Firm name] |
| Definition | [Legal entity or entities, and the business units included, as presented to clients] |
| Regulatory status | [For example: registered investment adviser; MiFID investment firm] |
| Entities excluded and reason | [Entity: reason] |
| Date the firm definition last changed | [YYYY-MM-DD, or "No change since first claim"] |
| Date compliance was first claimed | [YYYY-MM-DD] |
| Total firm assets at period end | [Currency amount] |

*Example:* Kestrel Bay Capital is a fictional investment adviser registered with the
SEC. For this report the firm is defined as all discretionary and non-discretionary
assets managed by Kestrel Bay Capital in its New York office. Its EU affiliate, Kestrel
Bay Capital Europe (a MiFID investment firm), is a separate legal entity presented to
clients under its own name and is therefore defined as a separate firm with its own
claim. The fictional Kestrel Bay Global Quality Equity Fund, a UCITS managed by Kestrel
Bay Capital Europe with the same strategy, is therefore not a member of this composite
as shown in Fund Factsheet (`finance/fund-factsheet`). Total firm assets at 2025-12-31 were
USD 2,480 million.

### 1.2 Compliance claim placeholder

Insert the compliance statement here only when the firm actually claims compliance and
every firm-wide requirement has been met. Copy the wording exactly from the current GIPS
standards; do not edit it, shorten it or add qualifiers. If the firm is verified, use
the version of the statement for verified firms; if it is not, use the version for firms
that have not been verified.

> [Insert the compliance statement in the exact wording required by the
> GIPS standards for this firm's situation.]

If the firm does not claim compliance, delete this subsection and do not describe the
report as compliant, "in accordance with" or "consistent with" the standards. A report
that only borrows the layout is a marketing piece and must say nothing that implies
compliance.

### 1.3 Trademark notice

Place the trademark notice required by the GIPS trademark guidelines at the foot of the
report, in the exact wording given there. Use the registered mark on first use and only
as an adjective ("GIPS® standards", "GIPS® Composite Report").

> [Insert the trademark notice in the exact wording required by the
> current GIPS trademark guidelines.]

## 2. Composite description

<!-- Guidance: Describe the strategy precisely enough that a reader could tell which portfolios belong. Questions: what is the investment mandate, the main instruments, the use of leverage or derivatives, the minimum size and the membership rules? Pitfall: a vague description ("global equities") that lets the firm move portfolios in and out of the composite. -->

### 2.1 Composite profile

| Item | Entry |
|---|---|
| Composite name and code | [Name] ([CODE]) |
| Description | [Strategy, objective, instruments, typical number of holdings, use of derivatives, leverage and short positions] |
| Composite creation date | [YYYY-MM-DD: when the firm first defined this composite] |
| Composite inception date | [YYYY-MM-DD: start of the performance record] |
| Reporting currency | [Currency] |
| Minimum portfolio size for inclusion | [Currency amount, or "None"] |
| Inclusion rule | [For example: from the first full month under management after funding is complete] |
| Exclusion rule | [For example: from the last full month before termination notice, or when a client restriction makes the portfolio non-discretionary] |
| Significant cash flow policy | [Whether used; threshold; how the portfolio is removed and returned] |
| Composite list availability | [Statement that the list of composite descriptions is available on request] |

*Example:* The Global Quality Equity Composite (KBC-GQE) contains all fee-paying,
discretionary, long-only portfolios that invest in listed developed and emerging market
equities of companies with high and stable returns on capital, typically 40 to 60
holdings, unhedged, with no leverage. Derivatives are not used except currency forwards
to settle trades. The composite was created on 2016-01-15 and has an inception date of
2016-01-01. The reporting currency is USD. Portfolios below USD 2 million at the start
of a month are excluded for that month. New portfolios join at the start of the first
full calendar month after they are fully invested; terminated portfolios leave after the
last full month before notice. A client contribution or withdrawal of 25% or more of
portfolio assets is a significant cash flow: the portfolio leaves the composite for that
month and returns at the start of the next month.

### 2.2 Membership changes since the last annual period

| Change ID | Portfolio | Event | Date | Reason | Approved by |
|---|---|---|---|---|---|
| CMP-CHG-001 *(Example)* | P-118 | Added | 2026-04-01 | First full month after funding | [@performance-analyst] |
| CMP-CHG-002 *(Example)* | P-107 | Removed | 2026-08-31 | Client imposed a sector restriction that changes the strategy; portfolio became non-discretionary for this strategy | [@chief-investment-officer] |
| CMP-CHG-003 *(Example)* | P-111 | Temporarily removed | 2026-06-01 to 2026-06-30 | Withdrawal of 40% of assets, above the 25% significant cash flow threshold | [@head-of-performance] |
| [CMP-CHG-NNN] | [Portfolio] | [Event] | [Date] | [Reason] | [@name] |

*Example:* no portfolio joined or left the composite during 2025, so the six portfolios
in section 4.3 are the whole composite for that year. The log entries above fall in
2026, after the period covered by section 4, and will be reflected in the 2026 annual
figures. The log is kept continuously, not only at year end.

Keep the history of every portfolio that has ever been in the composite. A terminated
portfolio's past returns stay in the composite for the periods it was included; never
remove them retroactively.

## 3. Benchmark description

<!-- Guidance: Name the benchmark and say why it reflects the strategy. Questions: what does it contain, is it total return, with which dividend treatment, and in which currency? Has it changed, and when? Pitfall: switching to a weaker benchmark retroactively, or hiding a benchmark change in a footnote. -->

| Item | Entry |
|---|---|
| Benchmark name | [Index provider, index name, variant] |
| Return basis | [Total return, net or gross dividends reinvested] |
| Currency | [Currency, hedged or unhedged] |
| Why it is appropriate | [Link to the composite strategy] |
| Benchmark changes | [Date, old benchmark, new benchmark, reason; or "None"] |
| Custom or blended benchmark rules | [Components, weights, rebalancing frequency; or "Not applicable"] |
| Licence for benchmark data | [Licence reference; confirm that the provider allows publication] |

*Example:* The benchmark is [a broad developed and emerging market equity index], net
dividends reinvested, in USD, unhedged. It is the opportunity set from which the
strategy selects stocks. The benchmark has not changed since inception. The firm holds a
data licence that permits publication of annual benchmark returns in client materials.

Index names and data are usually trademarks and licensed data of the index provider. Use
the provider's required attribution line and do not publish index constituent data
beyond what the licence allows.

## 4. Annual performance table

<!-- Guidance: This is the core of the report. Present one row per annual period, oldest or newest first but consistently. Questions: does every row reconcile to the calculation system? Are gross and net computed from the same portfolio returns? Pitfall: a table built from a spreadsheet copy that has drifted from the performance system after a restatement. -->

### 4.1 Annual returns and statistics

All returns are in USD and are total returns including reinvested income. Gross returns
are after transaction costs and before management fees. Net returns are after a model
management fee (see section 5). Figures for the 3-year annualised standard deviation are
calculated from 36 monthly returns held in the calculation workbook.

| Year | Composite gross (%) | Composite net (%) | Benchmark (%) | Composite 3-yr SD (%) | Benchmark 3-yr SD (%) | Number of portfolios | Internal dispersion (%) | Composite assets (USD m) | Firm assets (USD m) | Composite as % of firm |
|---|---|---|---|---|---|---|---|---|---|---|
| 2016 *(Example)* | 9.12 | 8.30 | 7.86 | N/A | N/A | 3 | N/M | 31.4 | 1,120 | 2.8 |
| 2017 *(Example)* | 23.85 | 22.92 | 23.97 | N/A | N/A | 4 | N/M | 45.9 | 1,310 | 3.5 |
| 2018 *(Example)* | -7.41 | -8.10 | -9.41 | 10.62 | 10.94 | 4 | N/M | 47.2 | 1,280 | 3.7 |
| 2019 *(Example)* | 28.64 | 27.68 | 26.60 | 11.48 | 11.37 | 5 | N/M | 66.0 | 1,540 | 4.3 |
| 2020 *(Example)* | 17.89 | 17.01 | 16.27 | 17.95 | 18.41 | 6 | 0.84 | 82.7 | 1,760 | 4.7 |
| 2021 *(Example)* | 20.12 | 19.22 | 18.54 | 16.70 | 17.33 | 6 | 0.71 | 101.3 | 2,050 | 4.9 |
| 2022 *(Example)* | -15.63 | -16.26 | -18.36 | 19.86 | 20.42 | 7 | 0.93 | 88.6 | 1,890 | 4.7 |
| 2023 *(Example)* | 21.48 | 20.57 | 22.20 | 16.42 | 16.98 | 6 | 0.58 | 109.5 | 2,140 | 5.1 |
| 2024 *(Example)* | 14.27 | 13.42 | 17.49 | 15.88 | 16.05 | 6 | 0.66 | 135.0 | 2,310 | 5.8 |
| 2025 *(Example)* | 11.86 | 11.02 | 13.02 | 12.94 | 13.27 | 6 | 0.63 | 151.2 | 2,480 | 6.1 |

Notes to the table:

- N/A: the 3-year standard deviation is not shown until 36 monthly
returns are available.
- N/M: internal dispersion is not shown as meaningful when too few
portfolios were in the composite for the full year. State the threshold the firm applies
and check it against the GIPS standards.
- Composite and firm assets are at year end. The percentage column is
composite assets divided by firm assets (*Example:* 151.2 / 2,480 = 6.1% for 2025).
- *Example:* composite assets moved from USD 135.0 million at the end of
2024 to USD 151.2 million at the end of 2025. The 11.86% gross return
accounts for USD 16.0 million (135.0 x 0.1186), and net client
contributions for the remaining USD 0.2 million; the six portfolios
were the same at both dates (section 4.3).

### 4.2 Annualised returns for the required periods

Marketing rules in several jurisdictions expect standard periods next to the
calendar-year table. For a US registered adviser, the SEC Marketing Rule (17 CFR
275.206(4)-1(d)(2)) requires 1-, 5- and 10-year results (or since inception if shorter)
ending no earlier than the most recent calendar year end, with equal prominence.
Annualised returns are the geometric mean of the annual returns in the window.

| Period to 2025-12-31 | Composite gross (% p.a.) | Composite net (% p.a.) | Benchmark (% p.a.) |
|---|---|---|---|
| 1 year *(Example)* | 11.86 | 11.02 | 13.02 |
| 5 years *(Example)* | 9.49 | 8.67 | 9.45 |
| 10 years *(Example)* | 11.56 | 10.73 | 10.84 |

$$
R_{\text{ann}} = \left( \prod_{t=1}^{n} (1 + R_t) \right)^{1/n} - 1
$$

*Example:* the 5-year gross figure links 2021 to 2025: 1.2012 x 0.8437 x 1.2148 x 1.1427
x 1.1186 = 1.5737, and 1.5737 to the power 1/5, minus 1, gives 9.49% p.a.

### 4.3 Internal dispersion worked example

Internal dispersion shows how consistently the strategy was applied across portfolios
that were in the composite for the whole year. The firm uses the asset-weighted standard
deviation of annual portfolio returns around the composite return; state the measure the
firm chose. For simplicity this worked example weights by assets at the start of the
year; the production calculation aggregates monthly.

| Portfolio | Beginning assets (USD m) | Weight (%) | 2025 gross return (%) |
|---|---|---|---|
| P-101 *(Example)* | 48.0 | 35.56 | 12.27 |
| P-102 *(Example)* | 36.5 | 27.04 | 12.00 |
| P-104 *(Example)* | 22.0 | 16.30 | 10.83 |
| P-107 *(Example)* | 15.5 | 11.48 | 11.61 |
| P-111 *(Example)* | 9.0 | 6.67 | 12.86 |
| P-115 *(Example)* | 4.0 | 2.96 | 10.17 |
| **Total** | **135.0** | **100.00** (rounded weights sum to 100.01) | **11.86 (asset-weighted)** |

$$
R_C = \sum_{i} w_i R_i, \qquad \sigma_{\text{disp}} = \sqrt{ \sum_{i} w_i \left( R_i -
R_C \right)^2 }
$$

*Example:* the asset-weighted composite return is 11.86% and the asset-weighted
dispersion is 0.63%. For comparison, the equal-weighted population standard deviation of
the six returns is 0.90% and the high-low range is 2.69 percentage points (12.86 minus
10.17). The six portfolios were in the composite for all of 2025 (membership did not
change during 2025), so they are both the dispersion population and the full composite
for the year. Their beginning assets (USD 135.0 million) therefore equal the 2024
year-end composite assets in section 4.1.

### 4.4 Reconciliation

| Check | Source A | Source B | Difference | Status |
|---|---|---|---|---|
| CHK-001 *(Example)*: 2025 composite gross return | Performance system | Report table | 0.00 | Pass |
| CHK-002 *(Example)*: composite assets 2025-12-31 | Portfolio accounting | Report table | 0.0 | Pass |
| CHK-003 *(Example)*: firm assets 2025-12-31 | Firm AUM register | Report table | 0.0 | Pass |
| CHK-004 *(Example)*: benchmark 2025 | Index provider file | Report table | 0.00 | Pass |
| [CHK-NNN] | [Source] | [Source] | [Value] | [Pass / Fail] |

## 5. Fee schedule and net-of-fee method

<!-- Guidance: Show the fee schedule prospective clients would pay and explain exactly how net returns were derived. Questions: actual fees or model fees? Highest fee or standard fee? Are performance fees included? Pitfall: a model fee lower than the fee prospective clients would actually pay, which flatters net returns. -->

### 5.1 Current fee schedule

| Assets under management | Annual management fee |
|---|---|
| First USD 25 million *(Example)* | 0.75% |
| Next USD 75 million *(Example)* | 0.60% |
| Above USD 100 million *(Example)* | 0.50% |
| Performance fee | [None / description] |
| Other fees and expenses | [Custody and administration paid by the client directly / included] |

*Example:* a USD 40 million portfolio pays 0.75% on the first 25 million (USD 187,500)
and 0.60% on the next 15 million (USD 90,000), total USD 277,500 a year or 0.69% of
assets.

### 5.2 Net-of-fee method

*Example:* net returns are calculated by deducting one twelfth of the highest tier fee
(0.75% a year) from the gross composite return each month, so the annual model fee
compounds:

$$
R_{\text{net}} = (1 + R_{\text{gross}}) \left( 1 - \frac{0.0075}{12} \right)^{12} - 1
$$

For 2025: 1.1186 x (1 - 0.000625) to the 12th power = 1.1186 x 0.99253 = 1.1102, so the
net return is 11.02%.

Record whether actual or model fees are used, why the chosen model fee is at least as
high as the fee a prospective client would pay, and the treatment of performance fees
and bundled fees. The SEC staff Marketing Compliance FAQ (updated 2025-03-19 and
2026-01-15) addresses net performance (including net figures that use actual fees when
future fees will be higher) and extracted performance; check the current FAQ before
publication.

## 6. Calculation methodology

<!-- Guidance: Explain the return method in enough detail that a verifier or consultant could reproduce a number. Questions: how often are portfolios valued, how are external cash flows handled, how are portfolio returns combined into the composite return? Pitfall: daily-weighted returns described as "time-weighted" without saying how cash flows inside the month are treated. -->

### 6.1 Portfolio returns: time-weighted return

The firm calculates portfolio returns as time-weighted returns (TWR). The portfolio is
valued on the date of each external cash flow of 10% or more of its value (*Example*
firm threshold) and at each month end. Sub-period returns are linked geometrically, so
the timing and size of client contributions and withdrawals do not affect the result.

$$
r_s = \frac{EMV_s - BMV_s - CF_s}{BMV_s + CF_s}, \qquad TWR = \prod_{s=1}^{S} (1 + r_s)
- 1
$$

Here the external cash flow $CF_s$ is treated as arriving at the start of sub-period
$s$, and $BMV_s$ is the value just before it arrives.

*Example (portfolio P-104, July 2026):* beginning value USD 10.00 million on 2026-07-01;
value USD 10.25 million at the close of 2026-07-15; contribution of USD 2.00 million at
the start of 2026-07-16; ending value USD 12.18 million on 2026-07-31.

| Sub-period | Start value (USD m) | Cash flow (USD m) | End value (USD m) | Return (%) |
|---|---|---|---|---|
| 2026-07-01 to 2026-07-15 *(Example)* | 10.00 | 0.00 | 10.25 | 2.500 |
| 2026-07-16 to 2026-07-31 *(Example)* | 10.25 | 2.00 | 12.18 | -0.571 |
| **Linked TWR** | | | | **1.914** |

Linking: 1.025 x (12.18 / 12.25) = 1.025 x 0.994286 = 1.019143, so the TWR for July is
1.914%.

### 6.2 Approximation for flows without a valuation

Where a cash flow is below the firm's revaluation threshold, the modified Dietz method
weights each flow by the fraction of the period it was invested:

$$
R_{MD} = \frac{EMV - BMV - \sum_j CF_j}{BMV + \sum_j W_j \, CF_j}, \qquad W_j = \frac{D
- d_j}{D}
$$

where $D$ is the number of days in the period and $d_j$ is the number of days elapsed
before flow $j$ arrives. *Example:* applying it to the same July data, the flow arrives
after 15 of 31 days, so $W$ = 16/31 = 0.5161; the gain is 12.18 minus 10.00 minus 2.00 =
0.18; the return is 0.18 / (10.00 + 2.00 x 0.5161) = 0.18 / 11.0323 = 1.632%. The gap to
the true TWR (1.914%) shows why large flows require a valuation.

### 6.3 Money-weighted return

Money-weighted return (MWR, the internal rate of return) reflects the timing of cash
flows and is the usual measure for closed-end private market funds where the manager
controls flows. If the composite uses MWR, show it since inception, annualised, with the
cash flow frequency.

$$
EMV = BMV \, (1 + r)^{1} + \sum_j CF_j \, (1 + r)^{W_j}
$$

*Example:* solving this for July gives a monthly MWR of 1.632%, close to the modified
Dietz figure, because modified Dietz is a first-order approximation of the same rate.
For this open-ended equity strategy the firm reports TWR, which is the appropriate
measure when clients, not the manager, decide on contributions and withdrawals.

### 6.4 Composite returns

| Item | Firm policy |
|---|---|
| Aggregation method | [For example: asset-weighted using beginning-of-month values plus weighted external cash flows] |
| Frequency | [Monthly, linked geometrically to annual] |
| Treatment of cash and cash equivalents | [Included in portfolio returns] |
| Accrual accounting | [Interest and dividends accrued; dividends recorded on ex-date] |
| Trade-date accounting | [Yes] |
| Withholding taxes | [Returns net of non-recoverable withholding taxes; reclaimable amounts accrued] |
| Risk statistics | [3-year annualised ex-post standard deviation of monthly composite and benchmark returns, population formula, annualised by the square root of 12] |
| Dispersion measure | [Asset-weighted standard deviation of annual returns of portfolios in the composite for the full year] |

$$
\sigma_{3y} = \sqrt{12} \times \sqrt{ \frac{1}{36} \sum_{m=1}^{36} \left( r_m - \bar{r}
\right)^2 }
$$

## 7. Valuation and policies

<!-- Guidance: Summarise how prices are obtained and where the full policies are. Questions: which pricing sources and hierarchy, what happens when a price is stale, who approves overrides? Pitfall: a report that cites "fair value" without saying who decides it for illiquid holdings. -->

| Topic | Policy summary | Reference |
|---|---|---|
| Valuation sources | [Primary vendor prices; fallback hierarchy; broker quotes for illiquid holdings] | Valuation Policy (`compliance/valuation-policy`) |
| Fair value overrides | [Committee approval, documentation, back-testing] | [Policy section] |
| Valuation frequency | [Daily accounting; monthly for returns; on large flows] | Section 6 |
| Foreign exchange rates | [Source and fixing time, for example a 16:00 London fix] | [Policy section] |
| Calculation policies | [GIPS policies and procedures manual, version and date] | [Document ID] |
| Availability statement | [Policies for valuing investments, calculating performance and preparing reports are available on request] | Section 10 |

*Example:* Kestrel Bay Capital values listed equities at the closing price on the
primary exchange, converted at the 16:00 London fix. Its valuation committee approves
any override and reviews stale prices weekly.

## 8. Significant events, errors and restatements

<!-- Guidance: Record events that a prospective client needs in order to read the record fairly. Questions: did key people leave, did the process change, was an error found? Pitfall: correcting a material error silently; a material error must be corrected and disclosed under the firm's error correction policy. -->

### 8.1 Significant events

| Event ID | Date | Event | Effect on the record | Disclosed until |
|---|---|---|---|---|
| EVT-001 *(Example)* | 2024-06-30 | Co-portfolio manager retired; successor had co-managed since 2021 | None on the process; disclosed for transparency | [YYYY-12-31] |
| EVT-002 *(Example)* | 2025-01-01 | Moved to a new portfolio accounting system | Parallel run for six months; no differences above 1 basis point | [YYYY-12-31] |
| [EVT-NNN] | [Date] | [Event] | [Effect] | [Date] |

### 8.2 Error correction log

| Error ID | Found | Period affected | Description | Materiality (per policy) | Action |
|---|---|---|---|---|---|
| ERR-001 *(Example)* | 2026-02-10 | 2023 | Composite assets overstated by USD 4.1 million (a terminated portfolio left in the year-end total) | Material under the firm's policy threshold for asset figures | Restated; disclosure added; report redistributed to prospective clients who received it in the last 12 months |
| [ERR-NNN] | [Date] | [Period] | [Description] | [Material / Not material] | [Action] |

Define materiality in the firm's error correction policy (for example, by size of the
change and whether it would alter a reader's view). Keep the disclosure for the period
the policy and the standards require.

## 9. Verification status

<!-- Guidance: State the verification and any performance examination accurately. Questions: who verified, for which period, and was this composite examined? Pitfall: implying that verification covers the accuracy of a specific composite's numbers; verification is firm-wide and an examination is a separate, composite-specific engagement. -->

| Item | Entry |
|---|---|
| Verifier | [Firm name] |
| Verification period | [YYYY-MM-DD to YYYY-MM-DD] |
| Date of latest verification report | [YYYY-MM-DD] |
| Performance examination of this composite | [Yes, period YYYY to YYYY / No] |
| Statement placement | [Insert the verification wording exactly as required by the GIPS standards] |

*Example:* Kestrel Bay Capital has been verified for the periods 2016-01-01 to
2025-12-31. The Global Quality Equity Composite has not had a performance examination.
The verification report is available on request.

## 10. Disclosure checklist

<!-- Guidance: Use this as an internal completeness check, in the firm's own words. Questions: is every item present in the report, correctly worded from the source, and current? Pitfall: treating this list as the official list of required disclosures; it is a working aid, and the GIPS standards and the applicable marketing law prevail. -->

Tick each item only after comparing the report with the official source. This list is
original to this template and is not the list of GIPS provisions; obtain the standards
for the authoritative list.

| ID | Item to confirm | Source to check | Present |
|---|---|---|---|
| DSC-001 | Compliance statement, exact wording for the verification status | GIPS standards | [Yes / No] |
| DSC-002 | Firm definition, and date of any change | GIPS standards | [Yes / No] |
| DSC-003 | Composite description, creation date and inception date | GIPS standards | [Yes / No] |
| DSC-004 | Benchmark description, and changes with dates and reasons | GIPS standards | [Yes / No] |
| DSC-005 | Currency of returns and statistics | GIPS standards; Delegated Reg (EU) 2017/565 Art. 44(4)(e) for EU retail | [Yes / No] |
| DSC-006 | Gross and net returns, with the fee and expense basis of each | GIPS standards; 17 CFR 275.206(4)-1(d)(1) | [Yes / No] |
| DSC-007 | Fee schedule appropriate to the prospective client | GIPS standards | [Yes / No] |
| DSC-008 | Risk statistic and dispersion measure, and their definitions | GIPS standards | [Yes / No] |
| DSC-009 | Number of portfolios, composite assets and total firm assets | GIPS standards | [Yes / No] |
| DSC-010 | Availability of the composite list and of the policies | GIPS standards | [Yes / No] |
| DSC-011 | Use of leverage, derivatives and short positions, if material | GIPS standards | [Yes / No] |
| DSC-012 | Significant cash flow policy, if used | GIPS standards | [Yes / No] |
| DSC-013 | Significant events and material error disclosures | GIPS standards; firm policy | [Yes / No] |
| DSC-014 | Trademark notice, exact wording | GIPS trademark guidelines | [Yes / No] |
| DSC-015 | 1-, 5- and 10-year (or since inception) periods with equal prominence | 17 CFR 275.206(4)-1(d)(2) | [Yes / No] |
| DSC-016 | No statement implying regulator approval of the figures | 17 CFR 275.206(4)-1(d)(3) | [Yes / No] |
| DSC-017 | Past-performance warning, reference period and source (EU, UK clients) | Delegated Reg (EU) 2017/565 Art. 44(4); FCA rules; GIPS standards (check) | [Yes / No] |
| DSC-018 | Benchmark provider attribution line | Index licence | [Yes / No] |

## 11. Production workflow and controls

<!-- Guidance: Describe how the report is produced each year, by whom, and with what checks. Questions: what is independent of the portfolio managers? How are versions controlled? Pitfall: one analyst calculating, checking and distributing the report without a second pair of eyes. -->

```mermaid
flowchart LR
    A[Month-end portfolio valuations] --> B[Portfolio returns in performance system]
    B --> C[Composite membership check]
    C --> D[Composite returns and statistics]
    D --> E[Independent recalculation]
    E --> F{Reconciles?}
    F -- No --> G[Investigate and correct]
    G --> D
    F -- Yes --> H[Compliance marketing review]
    H --> I[Oversight committee approval]
    I --> J[Publish and log distribution]
```

| Control ID | Control | Frequency | Owner | Evidence |
|---|---|---|---|---|
| PCR-CTL-001 *(Example)* | Membership changes approved against written inclusion and exclusion rules | Monthly | [@head-of-performance] | Signed change log (section 2.2) |
| PCR-CTL-002 *(Example)* | Independent recalculation of annual composite returns from monthly portfolio returns | Annual | [@independent-checker] | Recalculation workbook |
| PCR-CTL-003 *(Example)* | Reconciliation of composite and firm assets to portfolio accounting | Annual | [@fund-accounting] | Reconciliation (section 4.4) |
| PCR-CTL-004 *(Example)* | Marketing review of the final report and every extract | Each distribution | [@chief-compliance-officer] | Marketing Review Checklist record |
| PCR-CTL-005 *(Example)* | Distribution log of prospective clients who received the report | Continuous | [@client-service] | CRM extract |
| [PCR-CTL-NNN] | [Control] | [Frequency] | [@owner] | [Evidence] |

Keep the records that support each figure (portfolio valuations, transactions,
membership decisions and calculations) for at least the period required by the firm's
record-keeping rules; for a US adviser, check the books and records rule (17 CFR
275.204-2).

## 12. Glossary and references

<!-- Guidance: Define terms for prospective clients who are not performance specialists, and list the exact texts consulted with their dates. -->

### 12.1 Glossary

| Term | Meaning in this document |
|---|---|
| Composite | The set of portfolios that the firm reports together as one track record because they follow the same strategy |
| Firm | The organisation, as it presents itself to clients, whose total assets and policies the compliance claim covers |
| Time-weighted return (TWR) | Return that removes the effect of external cash flows by linking sub-period returns |
| Money-weighted return (MWR) | The single rate that equates beginning value and cash flows with the ending value; also called internal rate of return |
| Modified Dietz | An approximation of the money-weighted return that weights each flow by the time it was invested |
| Gross return | Return after transaction costs, before management fees |
| Net return | Return after management fees (actual or model) |
| Internal dispersion | A measure of how widely the returns of individual portfolios in the composite vary around the composite return |
| 3-year standard deviation | Annualised volatility of the last 36 monthly returns |
| Verification | An engagement by an independent third party that covers the whole firm and tests how composites are built and how performance is calculated and presented; it gives no assurance on any single composite's figures |
| Performance examination | A separate independent engagement on one composite or pooled fund |

### 12.2 References

| Reference | Version or date | Use |
|---|---|---|
| GIPS standards for Firms (name only) | 2020 edition, effective 2020-01-01; check for later editions and guidance statements | Compliance claim, statements and required items, inserted by the firm from the official text |
| GIPS trademark guidelines (name only) | Current version on the official site | Trademark notice |
| SEC Investment Adviser Marketing Rule, 17 CFR 275.206(4)-1 | As in force 2026-10 | Paragraph (d) performance conditions |
| SEC Division of Investment Management, Marketing Compliance FAQ | Updated 2025-03-19 and 2026-01-15 | Net performance with actual fees, extracted performance |
| 17 CFR 275.204-2 (books and records) | As in force 2026-10 | Record retention |
| Commission Delegated Regulation (EU) 2017/565, Article 44 | As amended; check the consolidated text | Past performance in client information (EU) |
| Regulation (EU) 2019/1156, Article 4, and ESMA guidelines on marketing communications (ESMA34-45-1272) | Guidelines applied from 2022-02-02 | Marketing communications for funds (EU) |
| Brinson, Hood and Beebower (1986); Brinson and Fachler (1985) | Journal articles, cited by name | Attribution (see the attribution report) |

## Standard and licence note

Structure aligned with the GIPS® standards (2020 edition for Firms), which are
referenced by name only; no text, provision wording, sample report or table from the
standards is reproduced or paraphrased. GIPS® is a registered trademark of its owner,
which has not endorsed or reviewed this template; insert the compliance statement,
verification wording and trademark notice from the official sources. The SEC Marketing
Rule and record-keeping rule (US federal works) and EU legislation from EUR-Lex are
cited by section and article in original wording; the ESMA guidelines are cited by
reference and ESMA does not endorse this template. The worked example (Kestrel Bay
Capital) and all figures are fictional. The text is original. Check the current official
versions before use. This is a document format, not investment, legal or accounting
advice. Template licence: MIT.