### Ashmore Group plc Annual Report and Accounts 2022
## Annual Report and
## Accounts 2022
## Established
## Diversified
## Local
## Contents

### Strategic report

|  CEO review | 2  |
| --- | --- |
|  The Emerging Markets story | 4  |
|  Strategy | 6  |
|  Business model | 8  |
|  Key performance indicators | 10  |
|  Established | 12  |
|  Market review | 14  |
|  Diversified | 20  |
|  Investment processes | 22  |
|  Investment themes | 26  |
|  Local | 28  |
|  Business review | 30  |
|  Risk management | 38  |
|  Section 172 statement | 46  |
|  People & culture | 50  |
|  TCFD | 54  |
|  Sustainability | 68  |

### Governance

|  Board of Directors | 80  |
| --- | --- |
|  Corporate governance report | 82  |
|  Audit and Risk Committee report | 90  |
|  Nominations Committee report | 93  |
|  Remuneration report | 95  |
|  Annual Report on Remuneration | 110  |
|  Directors' Remuneration policy | 119  |
|  Statement of Directors' responsibilities | 127  |
|  Directors' report | 128  |

### Financial statements

|  Independent auditor's report | 134  |
| --- | --- |
|  Consolidated financial statements | 142  |
|  Company financial statements | 146  |
|  Notes to the financial statements | 149  |
|  Five-year summary | 191  |
|  Alternative Performance Measures | 192  |
|  Information for shareholders | 195  |
|  Glossary | 197  |

## 2022 highlights

AuM

**US$64.0bn**

2021: US$94.4bn
-32% YoY

Adjusted EBITDA
margin

**64%**

2021: 66%

AuM outperforming
benchmarks (3 years)

**28%**

2021: 57%

Profit before tax

**£118.4m**

2021: £282.5m
-58% YoY

Net revenue

**£262.5m**

2021: £291.7m
-10% YoY

Diluted EPS

**12.6p**

2021: 34.2p
-63% YoY

### More information

For the online version of the Annual Report and Accounts, other announcements and details of upcoming events, please visit the Ashmore Group plc investor relations website at www.ashmoregroup.com

Dividends per share

**16.9p**

2021: 16.9p

**Ashmore's strategy and business model are designed to manage through changing market conditions, maintaining a focus on the long term while ensuring a resilient performance as the shorter-term cycle evolves.**

Front cover: Dubai, United Arab Emirates
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
### Ashmore’s purpose, as a specialist Emerging Markets investment manager, is to
### deliver long-term investment outperformance for clients and generate value for
### shareholders through market cycles. In pursuing this purpose, Ashmore aims to ensure
### that its culture and working practices recognise its broader set of stakeholders.
For three decades, Ashmore’s strategy has underpinned its objective to capitalise on the long-
term growth trends across Emerging Markets. At the core of its success are three characteristics
that also reflect the nature of Emerging Markets:
## Established
### Ashmore has been a specialist Emerging Markets investor
### for 30 years
Read more on page 12
## Diversified
### Ashmore’s investment themes and actively-managed
### strategies cover the full spectrum of Emerging Markets
### liquid and illiquid asset classes
Read more on page 20
## Local
### Ashmore has established local asset management
### operations to participate fully in Emerging Markets
### growthtrends
Read more on page 28
Ashmore Group plc Annual Report and Accounts 2022 1
CEO REVIEW
## Consistent focus
### Ashmore’s long-term strategy and established business model respond to changing
### marketconditions, maintaining a focus on the long term opportunity while ensuring resilience
### as the shorter-term cycle evolves. These characteristics have mitigated the impact of lower
### AuM on the Group’s performance during the year.
The past 12 months have presented a challenging environment, Notwithstanding the cyclical picture, the investable asset classes
with the Russian invasion of Ukraine exacerbating geopolitical and continue to evolve, for example with substantial opportunities available
macroeconomic pressures. As a consequence, the Group’s AuM in investment grade credit, continued growth in specific real asset
reduced by 32% to US$64.0 billion, with the majority of the move themes such as infrastructure and private healthcare, and an
attributable to the impact of lower market levels, and a reduction in increasing recognition that ESG investing has an important role to play
risk appetite evident in client flows in the second half of the year. in the development of emerging economies. Ashmore’sstrategy is
well placed to continue to capitalise on theseopportunities.
Focus on strategic Emerging Markets opportunities
Business model protects margins
The long-term growth opportunities across the Emerging Markets
remain significant and centre on continued superior economic Ashmore’s well-capitalised and liquid balance sheet, flexible
growth compared with the developed world, delivering rising GDP operating cost structure and diversified client base and product
per capita and a growing share of global economic activity. range have supported the Group’s operating performance despite
Thesetrends are underpinned by structural reforms that deliver the decline in AuM over the period.
increasingly robust economic and political fundamentals, and
Although lower AuM levels led to a 13% fall in adjusted net revenue,
greater diversity across more than 70 investable countries.
disciplined cost management reduced operating costs by 7%, which
However, the impact of the Russian invasion of Ukraine on global
helped to limit the impact on profits to a 16% decline in adjusted
capital markets and investor sentiment led to broad-based
EBITDA and delivered an adjusted EBITDA margin of 64%. On an
de-risking during the second half of the financial year, with a
adjusted basis, diluted EPS reduced by 20% to 18.7 pence per share.
consequent effect on some institutional clients’ Emerging
The impact of weaker markets affected the mark-to-market valuation
Marketsallocations.
of the Group’s seed capital investments. Although the seed capital
Ashmore’s three-phase strategy aims to capture the benefits of
loss of £49.9 million for the period is unrealised, it was the primary
Emerging Markets growth and diversification for clients and
reason for the 58% fall in statutory profit before tax to £118.4 million.
shareholders. The inevitable market cycles mean that not every
The Board recognises the importance of the dividend to all
period will see uniform progress across all initiatives, but the Group
shareholders. While it is mindful of the lower level of statutory
maintains a consistent focus on execution to deliver diversification
profits this year, it also recognises the unrealised nature of the
and so mitigate the impact of weaker sentiment towards
seed capital loss and has undiminished confidence in the long-term
EmergingMarkets.
growth opportunity. The Group also generated cash flows before
For example, over the past 12 months, the Group’s local asset
dividends of more than £200 million in the year and the Board has
management operations, established to drive growth and
therefore recommended an unchanged final dividend.
diversification under the third phase of the strategy, have continued
to develop positively. Collectively, these businesses manage Investment performance reflects continued
AuMof US$6.9 billion, which was relatively stable over the year
challenging markets
(30June 2021: US$7.2 billion).
There have been several shocks to global capital markets over the
Progress in the second phase was mixed. Equities AuM increased past two years, with the Ukraine war in 2022 exacerbating some of
from 8% to 10% of the Group total and there was a similar the macroeconomic headwinds such as high inflation and monetary
increase in the proportion of assets in IG strategies from 11% to policy tightening by central banks. Ashmore’s approach of
14%, while the proportion of AuM sourced from intermediary retail selectively adding risk in such environments, combined with the
clients declined from 8% to 5% largely due to the challenging absence to date of a sustained market recovery, is reflected in
market environment. the Group’s overall relative investment performance with the
proportion of AuM outperforming over one, three and five years
at 45%, 28% and 48%, respectively.
## 21% 64% 49%

| Proportion of Group AuM in equities and | Adjusted EBITDA margin | Targeted minimum reduction |
| --- | --- | --- |
| investment grade products, increased from | maintained at a high level | in portfolio carbon emissions |
| 18% over the year in line with Ashmore’s | through disciplined | by 2030, under the NZAMI |
| strategic growth and diversification objectives | control of operating costs | framework |

2 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Spotlight on Ashmore Colombia Over the past 12 months, Ashmore Colombia
has successfully raised more than US$200
Established
million into its third private equity infrastructure
Ashmore Colombia was established in 2010 and
fund and it has clear opportunities to raise
has had a successful history of raising long-term
further capital into infrastructure and real
private equity and senior debt capital to invest in
estatefunds.
domestic and regional infrastructure projects.
Local
The business added real estate capabilities in

| 2018 and also invests in public equities, which | In common with Ashmore’s other local asset |
| --- | --- |
| grew 15% YoY. The investment teams have | management platforms, Ashmore Colombia’s |
| well-established ESG processes. | 48 employees are from the local market and |

are incentivised in line with the Group’s
Diversified
philosophy that rewards performance and
The client base has diversified over time,
instils a strong team-based culture through
## US$1.4bn fromlocal pension funds and other domestic
equity ownership.
institutional investors to include Ashmore’s
Ashmore Colombia
international clients seeking attractive long-term
AuM
returns from private and public markets in
theregion.
This picture is typical for Ashmore’s investment processes For example, in July 2021, Ashmore joined NZAMI and recently
following periods of weak and volatile markets. published its interim targets; it joined a second collaborative
engagement through Climate Action 100+; and it has reported its
Outperformance has been delivered in strategies such as local
approach to climate-related risks and opportunities in line with the
currency bonds, all cap equity and investment grade products
TCFD recommendations and as required by the UK FCA.
across fixed income, but strategies that have exposure to high yield
Furthermore, via The Ashmore Foundation, the Group has supported
markets have underperformed.
activities that will offset its FY2020/21 greenhouse gasemissions.
Importantly, history shows that, after a period of market
In the coming year, the Group’s incremental focus is on complying
dislocation, the subsequent recovery returns and outperformance
with TCFD recommendations as they apply to investment
delivered by Ashmore’s investment processes have been
managers, and continuing to enhance the reporting of portfolio
substantial and delivered over an extended period of time. Indeed,
GHG emissions to clients.
this recovery profile had begun in mid 2020 after the initial impact
of COVID-19 on markets but was then curtailed by higher inflation,
Culture and diversity
actual or expected tighter monetary policy, and the impact of
A significant development during the year was the return to offices
regulatory tightening in China. When Russia invaded Ukraine, the
for most employees following the removal of restrictions imposed
worldwide impact on inflation and rates expectations resulted in
by governments in response to the COVID-19 pandemic. The office
another challenging period for risk assets globally. To put the recent
environment is optimal for Ashmore’s team-based culture, and
market environment in historical context, the 20% decline in the
provides for efficient and productive working practices. However,
external debt index in the first half of 2022 represents the index’s
recognising the benefits it can bring, Ashmore provides a degree of
worst start to a year since 1995.
flexibility for employees to work remotely.
Exceptional valuations
This year, Ashmore launched a graduate recruitment programme
These market conditions have left valuations across Emerging that will support an increase in employee diversity over time.
Markets at exceptionally attractive levels. Current asset prices
I would like to thank all my colleagues for their commitment and hard
heavily discount the known risks surrounding inflation, global rates,
work in striving to deliver for our clients, shareholders and other
economic growth and, on probable scenarios, geopolitical issues.
stakeholders, in the face of the challenges of the past couple of years.
For example, external debt spreads are as wide as they were in
2008 and early 2020; equities trade at the widest discount to the Outlook
US market in nearly 20 years; and local currency bonds offer a
The global macro environment still presents some near-term
real yield premium of approximately 500bps to developed world
uncertainty, but Ashmore’s investment approach has been proven
bond markets.
across many different market cycles and facilitates access to the
Beyond the simple index valuations, the highly diverse asset exceptionally attractive valuations currently available across
classes provide significant investment opportunities to deliver Emerging Markets. Risk appetite will improve as some of the
attractive returns and outperformance as sentiment and risk recent macro headwinds abate, supporting a recovery in Emerging
appetite improve. In previous cycles, experienced clients have Markets asset prices and higher investor allocations. Together with
moved early to capture the full extent of recovery returns available, Ashmore’s consistent focus on its growth strategy and resilient
and prevailing valuations support a repeat of this pattern of business model, this underpins the delivery of long-term value for
behaviour in the current cycle. Ashmore’s clients, shareholders and employees.
Focus on the importance of ESG
Mark Coombs
Ashmore has long understood the importance of ESG
Chief Executive Officer
considerations when investing in developing countries. It has
integrated the consideration of ESG factors into its investment
1 September 2022
processes and, this year, made further significant progress in its
sustainability activities through participation in industry initiatives.
Ashmore Group plc Annual Report and Accounts 2022 3
THE EMERGING MARKETS STORY
## Powerful growth trends
### For the past 30 years, the Emerging Markets have experienced powerful economic, political and
### social convergence trends with the developed world, that result in superior growth and myriad
### investment opportunities. These trends are expected to continue and underpin Ashmore’s
### specialist focus and ability to create long-term value for clients and shareholders.
Rising wealth, significant future potential significant trade between emerging countries and
regions means that historical trading relationships
The rapid increase in GDP per capita across
can be revised to reflect the changing world.
emerging countries is evidence of the positive
impact of policy reforms, better economic The appropriate way to deal with geopolitical
management and more accountable challenges is to ensure portfolio diversification, and
politicalframeworks. the established, highly diversified Emerging Markets
with significant local currency funding can provide
While growth in GDP per capita has exceeded that
attractive opportunities for investors.
delivered by developed countries over the past few
decades, in absolute terms the Emerging Markets
Inefficiencies provide opportunities
are currently where the developed world was in
There remain substantial inefficiencies in the
1983. This underlines the further significant growth
Emerging Markets, compounded by investors’
potential in these markets.
misperceptions or inherent biases. This provides
Dominant share of world resources specialist, active investment managers with
opportunities to deliver outperformance by investing
The growth potential is further supported by the
through market cycles and taking advantage of
Emerging Markets’ dominant share of important
periods of market dislocation when these
macroeconomic factors, including:
inefficiencies are greatest.
– 58% share of world GDP (PPP basis);
– nearly US$10 trillion of foreign exchange reserves,
representing 72% of the world total; and
GDP per capita
– 84% of the world’s population lives in an
emerging country.
These factors are underrepresented in the main
fixed income indices, with Emerging Markets’ 1,100
aggregate weight of between 10% and 30%, albeit
these weights are rising over time. 900
More significantly, developed world investors remain
heavily underweight the Emerging Markets, with 700
typically an allocation of below 10%. Over time, as
the emerging world continues to deliver superior 500
growth and investors’ misperceptions are
challenged, these allocations will increase to more
300
representative levels.
100
Geopolitical risk and
2027f20202010200019901980
portfoliodiversification
Indexed
The large, diverse set of emerging countries has
Emerging Markets
distinct advantages in the face of an uncertain Developed Markets
1,300 geopolitical outlook. Many offer a ’neutral’ position
Source: IMF, World Economic Outlook Database, April 2022
rather than contributing to tension, they have
Purchasing power parity; international dollars
resilient local currency funding, and increasingly

| GDP/capita CAGR | Share of world GDP | Proportion of world | Emerging Markets |
| --- | --- | --- | --- |
| 20 00-2021 (vs +3% in |  | population living in an | weight in global indices |
| developed world) |  | emerging country |  |

## +5% 58% 84% 10% to 30%
4 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
## Ashmore’s specialist Emerging Markets focus
Specialist, active management Strong alignment of interests Resilience through
delivering long-term market cycles
The alignment of interests
investment performance
between employees, clients and The salient characteristics of
Ashmore’s active investment shareholders is critical in a cyclical Ashmore’s business model have
processes have delivered business. Ashmore achieves this been sustained through bull and
long-term investment through its team-based approach bear markets, demonstrating
outperformance for clients over to investment management resilience when confronted
nearly three decades. This drives and a remuneration philosophy with more challenging
growth in AuM, revenues and that places an emphasis on marketconditions.
profits over the longer term. performance-related pay with
a significant bias to long-dated
equity awards and that delivers
meaningful employee
equityownership.
Sheikh Zayed Grand Mosque Center, Abu Dhabi, United Arab Emirates
Ashmore Group plc Annual Report and Accounts 2022 5
STRATEGY
## A consistent strategy
### Ashmore’s strategy is aligned with its purpose and the significant growth
### opportunity available across the broad range of Emerging Markets asset
### classes. The three distinct phases are focused on growing and diversifying
### Ashmore’s business and creating value for clients and shareholders.
Establish Emerging Markets
assetclasses
Ashmore is recognised as an established
specialist Emerging Markets manager, and
is therefore well positioned to capture
investors’ rising allocations
Read more on page 12
Diversify investment themes and
developed world capital sources
Ashmore is diversifying its revenue mix to
provide greater revenue stability through
the cycle. There is particular focus on
growing intermediary retail, equity and
alternatives AuM
Read more on page 20
Mobilise Emerging Markets capital
Ashmore’s growth is enhanced through
accessing rapidly growing pools of
investable capital in Emerging Markets
Read more on page 28
## Local Diversified Established
Dubai, United Arab Emirates
6 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Opportunity Progress in 2022 Potential sources of risk

| – The Emerging Markets – Potential constraints on – Ashmore’s equity business is growing |
| --- |
| investment universe continues to longer-term growth such in importance, increasing its share of |
| – Managing the – Industry AuM in Emerging – The local platforms proved resilient, |
| – Developed world investors hold – Sentiment towards, and – The Emerging Markets allocation |
| grow and diversify, and Ashmore as competition AuM from 8% to 10% over the year |
| development of local Markets is growing twice as with aggregate AuM falling by only 3% |
| more than US$100 trillion of fundamental performance opportunity remains substantial, |

strives to be at the forefront of
– Long-term investment – The fixed income business continues to – Ashmore Colombia raised a third private asset management fast as the developed world
assets and yet are profoundly of, Emerging Markets but challenging market conditions,
accessing new market
– This presents a significant platforms in performance diversify, for example with investment equity fund and continues to target
– Long-term investment underweight Emerging Markets: particularly following Russia’s invasion
opportunities as they arise

| Emerging Markets grade products increasing from 11% to growth opportunity in local additional capital to invest in real assets |
| --- |
| target allocations are less than of Ukraine in February 2022, meant that performance |
| – Diversifying revenue streams 14% of total fixed income AuM |
| – AuM sourced from Emerging Markets- asset management platforms, |
| 10% compared with global investors globally sought to reduce risk |

provides greater stability through
– Broad market risk aversion, particularly in as well as cross-border Emerging domiciled clients increased from 26%
benchmark weights of
the cycle Ashmore Group plc Annual Report and Accounts 2022 7
Markets opportunities over the second half, led to intermediary retail to 27% over the year
approximately 10% to 30%
the longer term AuM falling from 8% to 5% of AuM
Read more on page 38 Read more on page 14 Read more on page 30
BUSINESS MODEL
## Supporting growth
### Ashmore’s business model supports its growth strategy and is designed to create value for
### theGroup’s stakeholders through market cycles. The model converts the structural growth
### opportunities in Emerging Markets to deliver positive outcomes for Ashmore’s clients,
### shareholders and employees as well as recognising Ashmore’s responsibilities to a broader
### set ofstakeholders including society.
Structural growth opportunities
High-return, diversified range Powerful political, social and Investor allocations have to
of Emerging Markets economic convergence trends increase significantly to match
asset classes global index weights
capital programme
Active seed
Strong, liquid
Specialist focus
balance sheet
Active
management
ESG integrated
Scalable operating
platform
Diversified
client base
Cost discipline
philosophy
Flexible remuneration
D
i s s
t i c
i n t
c i s
t i e r
v e c t
b u r a
s i c h a
n e s s o d e l
m
Delivering value through the cycle
Strong long-term investment Consistent investment process Significant alpha delivered
performance for clients followed since 1992 through market cycles
Interests aligned through employee Variable remuneration biased Employee equity ownership is
equity ownership towards long-dated equity awards approximately 40%
Value for shareholders 64% adjusted Strong cash Progressive
EBITDA margin generation dividend policy
8 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Jakarta, Indonesia
Ashmore Group plc Annual Report and Accounts 2022 9
KEY PERFORMANCE INDICATORS
## Measuring performance
Performance Assets under management Investment performance
measure The movement between opening and The proportion of relevant AuM that is
closing AuM provides an indication of outperforming benchmarks on a gross basis,
the overall success of the business over one year, three years and five years.
during the period, in terms of The gross basis reflects the largely
subscriptions, redemptions and institutional nature of the client base,
investment performance. typically with the ability to agree bespoke
fee arrangements. Funds without a
The average AuM level during the
performance benchmark, for example
period, combined with the average fee
overlay strategies, are excluded.
margins achieved, determines the
Group’s management fee revenues.
Relevance to Ashmore’s strategy seeks to capitalise Ashmore’s success is dependent on
on the growth trends across Emerging delivering investment performance
strategy and
Markets, which should manifest itself consistent with clients’ objectives, who
remuneration
in AuM growth over time. typically look at performance over the
medium to long term.
Growth in AuM is a vesting
performance condition for Investment performance is a
Executive Directors. vesting performance condition for
Executive Directors.
Five-year trend Assets under management Investment performance
(AuM outperforming over three years)

| US$64.0bn |  | 28% |  |
| --- | --- | --- | --- |
| 2021: US$94.4bn |  | 2021: 57% |  |
| 2022 | 64.0 |  | 45 |
| 2021 | 94.4 |  | 28 |

2022
2020 83.6 48
2019 91.8
96
2018 73.9
57
79
9
17
74
90
97
97
2021202020192018
73
94
89
Lotus Temple, New Delhi, India
10 Ashmore Group plc Annual Report and Accounts 2022
1 year 3 years 5 years
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Adjusted EBITDA margin Diluted EPS Balance sheet strength
This measure provides a meaningful Profit attributable to the equity Ashmore maintains a strong
assessment of the Group’s holders of the parent company balancesheet through the Emerging
operating performance, excluding divided by the weighted average Markets cycle. This is measured
the mark-to-market volatility of number of all dilutive potential bythe financial resources available
foreign exchange translation and ordinary shares. to the Group, which are then
seed capital-related items. compared with the Group’s
capital requirement to provide a
solvency ratio.
Delivering a high profit margin The earnings per share reflect the A strong balance sheet enables
demonstrates the benefits of overall financial performance of the Ashmore to build a diversified client
Ashmore’s global operating Group during the period and base, provides opportunities for
platform, enables investment in represent an aspect of value creation investment to grow the business
future growth opportunities, for shareholders. including the seeding of funds,
supports cash generation to and supports the Group’s
Growth in diluted EPS compared
sustain a strong balance sheet, dividend policy.
with benchmark indices is a vesting
and provides for attractive returns
performance condition for
to shareholders.
ExecutiveDirectors.
Adjusted EBITDA margin Diluted EPS Solvency ratio

| 64% |  | 12.6p |  | 530% |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 2021: 66% |  | 2021: 34.2p |  | 2021: 391% |  |  |  |  |
| 2022 | 64 | 2022 | 12.6 |  |  |  |  | 530125 |
| 2021 | 66 | 2021 | 34.2 |  | 202220212019 20202018 | 789 |  |  |
| 2020 | 68 | 2020 | 25.7 |  |  |  |  |  |
| 2019 | 66 | 2019 | 25.0 |  |  | 156 | 391 |  |
| 2018 | 66 | 2018 | 21.3 |  |  | 765 |  |  |

147 377
703
121 461
679
119 401
599
Capital requirement (£m)
Financial resources (£m)
Ashmore Group plc Annual Report and Accounts 2022 11
Solvency ratio (%)
0 5 10 15 20 25 30 35 0 10 20 30 40 50 60 70 80
ESTABLISHED
## Focused on growth in established markets
Ashmore has been investing in Emerging Markets since Tosupport further growth, Ashmore maintains an
1992, and has established a long and successful track operational business model that is appropriate for
record of delivering investment performance for clients the cyclical markets in which it invests, with nearly
through market cycles. £800million of financial resources, including more than
£500 million in cash, and delivering a 64% adjusted
In 1992, the bond markets were nascent and there was
EBITDA margin.
no benchmark index. The following year, J.P. Morgan
launched the Emerging Markets Bond Index (EMBI) with The economic, political and social convergence trends

| 13 high-yield rated countries. The equivalent index today | that underpin long-term growth |
| --- | --- |
| has 70 emerging countries, 160 issuers and comprises | across Emerging Markets are |
| more than US$1 trillion of bonds of which 52% are rated | well established, and provide |
| investment grade. | Ashmore with substantial |

opportunities to deliver
The Emerging Markets investment universe has grown
investment performance
over the past three decades. The total bond market is
for clients, to grow
now US$38 trillion and equity market capitalisation
AuM and to create
equals US$40 trillion. This provides significant
value for shareholders.
investment opportunities for global investors.
Ashmore has grown in keeping with these markets and
now employs more than 300 people in 11 offices around
the world and manages US$64 billion of client assets in
six dedicated Emerging Markets investment themes.
## Established
### Ashmore has been dedicated to specialist Emerging Markets investing for 30 years,
### andcontinually seeks to provide clients with access to new investment opportunities as
### the markets continue to grow and evolve.
Taj Mahal, Agra, India
12 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS

| 58% | US$79trn | >50% |
| --- | --- | --- |
| Emerging countries’ share of world GDP, | Total value of emerging bond and equity | Proportion of bonds rated |
| having grown consistently from 42% | markets, providing substantial | investment grade in external debt |
| in1992 | investmentopportunities | (52%) and corporate debt (57%) |

benchmark indices
Ashmore Group plc Annual Report and Accounts 2022 13
MARKET REVIEW
## Established, diversified and local
### The tradable Emerging Markets are well-established with nearly US$80 trillion of
### equity and fixed income securities, highly diversified across more than 70 countries,
### and are predominantly local in nature with domestic bond and equity markets
### accounting for more than 90% of the total investment universe. While the past
### 12months have been challenging, the long-term growth potential of emerging
### countries is well underpinned and not reflected in the exceptional valuations
### currentlyavailable across the Emerging Markets.
The macroeconomic pressures that were evident
during the first half of the financial year, resulting
Index returns by quarter (%)
from higher inflation, global rates repricing and
slower Chinese growth, were intensified by the
immediate and consequential effects of Russia’s
10
invasion of Ukraine in February. In particular,
commodity price inflation has added to the ongoing
5
pressure from supply chain bottlenecks as countries
emerge from the COVID-19 pandemic, which in turn
0
has caused a more dramatic repricing in global
interest rate markets and continued or accelerated
-5
monetary policy tightening by central banks. The full
impact on economic growth remains uncertain, but
weak investor sentiment globally reflects the
possibility of a recession.
While the aggregate global macroeconomic picture
is challenging, there are regional and, of course,
country-specific developments that deviate from it
Sep’21 Dec’21 Mar’22 Jun’22
for better or worse. For instance, the rally in certain
commodity prices benefited the terms of trade in
Latin America, the Middle East, and parts of Africa, EM equity EM blended debt MSCI World
while being negative for commodity importers in
Source: Bloomberg, MSCI, J.P. Morgan
Asia and Central America. In every cycle, an
understanding of the diversity of Emerging Markets
is important in order to identify and act upon
investment opportunities that arise from
indiscriminate, sentiment-driven price changes.
Emerging Markets investment universe
Emerging Markets returns, as measured by
benchmark indices, were negative for the 12 months
US$40.4trn
to 30 June 2022, but with a small drawdown in the
US$38.4trn 17%
first half and, in common with most capital markets 15%
worldwide, a more significant decline in prices in the
second half of the period. Over the year as a whole,
equity markets declined by 27% and fixed income
indices fell by between 14% and 21%.
US$16.4trn US$17.0trn
16% 5%
US$3.4trn
US$1.6trn
34%
67%
External External Local Local EM debt EM equity
sovereign corporate sovereign corporate
debt debt debt debt
-10
Index market value Non-index market value
-15
Source: Bank of America, BIS, Ashmore
-20
14 Ashmore Group plc Annual Report and Accounts 2022
US Treasuries index
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Continued growth in tradable Importantly, and particularly in the case of local
## currency markets, it may not be the case that these 87%
EmergingMarkets
factors infer lower liquidity and/or higher risk. It can
In US dollar terms, the tradable Emerging Markets
Proportion of Emerging
be the case that accessibility for foreigner investors
grew in calendar year 2021, with 12% growth in the Markets funding in local
is constrained and therefore trading and ownership
value of bonds outstanding to US$38 trillion, and 9% currencies, providing
is biased to domestic investors, who support the resilience when faced with
growth in equity market capitalisation to US$40
continued development of liquid tradable markets. exogenous challenges
trillion. In fixed income, local bond markets continue
Therefore, specialist active managers can seek to
to expand rapidly, with 14% growth in the value of
deliver returns from ‘off benchmark’ securities.
bonds outstanding and, at US$33 trillion, they now
represent 87% of all Emerging Markets bonds in Furthermore, while there are passive strategies
issue. The external debt markets increased by 5% to available in Emerging Markets, the indexed
US$5 trillion. investment universe is limited, the cost of trading
is higher than for active managers, and active
Index representation remains low
managers retain a significant competitive advantage
The index representation of Emerging Markets fixed through the ability to deliver alpha by accessing the
income and equities remains low at less than 20% of full range of investment opportunities and taking
the overall securities universe. The longer-established advantage of price dislocations.
sovereign and corporate external debt markets have
However, the low index representation may also
higher representation, but represent a minority of the
mean that investors do not yet consider the
bonds outstanding.
Emerging Markets to be ‘mainstream’ asset classes,
There are many reasons why bonds and listed and this can be a hurdle to higher allocations.
companies are not included in indices, the common Therefore, it is desirable that over time the
ones being: representation increases, which will lead to more
effective passive substitutes but will also underpin
– Local capital market accessibility and tax issues
the AuM growth opportunity through higher investor
– Minimum issue size requirement
allocations to Emerging Markets.
– Remaining years to maturity
– Coupon type
– Minimum free float requirement
The increasing significance of Emerging Markets to the
world’seconomy
For the past three decades, Emerging Markets have delivered superior economic growth
to the developed world and consequently have become the dominant force driving the
world’s economy. The powerful economic, political and social convergence trends
underpinning this performance are well-established across emerging countries and are
expected tocontinue.
Share of world GDP (%)
## 58%
Emerging Markets
generate 58% of the
world’s GDP
70
1985 1990 1995 2005 2010 2015 2000 2025f1980 2020
60
50
Source: IMF WEO database (PPP basis)
40
30 Ashmore Group plc Annual Report and Accounts 2022 15
Developed Markets Emerging Markets
MARKET REVIEW (CONTINUED)
## Macro environment
World inflation (CPI YoY,%)
## and outlook
Geopolitics
12
The pace of deterioration in international relations
accelerated over the past 12 months, most clearly
10
evidenced by Russia invading Ukraine, and with
ongoing geopolitical tension in other parts of the
8
world such as Taiwan. Political changes continue to
affect both developed and emerging countries, for
example with many European countries struggling to 6
find political stability and a continued shift to the left
in parts of Latin America. 4
While such situations increase uncertainty, there is a
2
sufficiently large and diverse investment universe in
Emerging Markets that provides investors with an
ability to navigate shifting geopolitical patterns. 0
Jan’20 Jan’21 Jan’22Jul’21Jul’20
Indeed, the end of US exceptionalism, and the
reshaping of political and trade relationships because
of the Ukraine war and other tensions, mean that
Source: Bloomberg
investors must prepare for a multi-polar world in
which market leadership is likely to shift away from
the US. In a scenario of permanently elevated
geopolitical risks, countries that remain neutral to
both ’cold’ and ’hot’ conflicts will become attractive Interest rates
destinations for investments. Most countries
Central banks have responded to higher inflation
remaining neutral to the current conflicts are in
with tighter monetary policy, including bringing
Emerging Markets, in Latin America, Africa, the
quantitative easing to an end as well as raising policy
Middle East, and Central and South East Asia.
rates. However, there are important differences
Until the ‘winners’ emerge from any given situation, between the response of central banks in emerging
portfolio diversification is paramount; with typically countries and the reaction of the Fed and other
underweight allocations to Emerging Markets, there developed world central banks.
is ample scope for investors to gain exposure to
For historical reasons, governments and central
higher return asset classes while managing risk in
banks in emerging countries are typically very
the face of geopolitical uncertainty.
sensitive to inflation and consequently many central
banks have increased rates, in many cases quite
Inflation
substantially, since early 2021. The inflationary
Upward pressure on inflation worldwide has been
impact of the Ukraine war means central banks
building for some time due to structural factors
extended their hiking cycles, but the tightening has
including negative real interest rates resulting from
already resulted in levels that should contain inflation
developed world central banks’ monetary policies;
pressures and that are highly attractive for local
the reversal of inequality driven by populist policies
currency investors.
fuelling demand; and the long-term impact of
Once again, the common narrative that higher US
countries’ transition to different energymatrices.
rates will result in widespread sovereign debt
In the short term, this pressure has been amplified
distress in Emerging Markets has been exposed as
by the disruption of supply chains brought about by
flawed. As shown above, the majority of emerging
the COVID-19 pandemic, and the initial economic
countries’ funding is in their own currencies, not US
impact of the Ukraine war and related sanctions.
dollars, and orthodox monetary policies together
Hence, CPI inflation has been on an upward trend with appropriate fiscal management provide
and was subject to an extra supply side disruption additional support.
when Russia invaded Ukraine.
In contrast, the Fed and the ECB arguably missed a
However, some of the factors behind the higher chance to raise interest rates in 2021 when demand
inflation prints are moving to a contractionary phase, recovered strongly as pandemic lockdowns eased,
namely monetary policy tightening forcing the governments deployed extraordinary fiscal stimulus,
financial system to reduce leverage; inventory cycles and supply was still constrained. Those central banks
shifting to become deflationary; and food prices are now tightening policy more aggressively than

| stabilising due to base effects, with the net result | in previous cycles into an economic slowdown. |
| --- | --- |
| that inflation is likely to moderate towards the end | Thiscould represent a second policy mistake, |
| of2022. | by not looking through the ongoing exogenous |

supply shocks, which will not be resolved with
higher interest rates.
16 Ashmore Group plc Annual Report and Accounts 2022
Jul’22
STRATEGIC REPORT

GOVERNANCE

FINANCIAL STATEMENTS

The same developed world central banks have also announced the end of quantitative easing, and in some cases the start of quantitative tightening, alongside rate increases. While the transition from ultra-loose unorthodox monetary policy means uncertainty and asset price volatility, the process will ultimately prove beneficial to Emerging Markets allocations. The past decade has experienced significant imbalances in worldwide capital allocation, in good part because of QE as artificially low funding costs led to higher valuations in developed world assets. When this distortion is removed, then investors will seek out yield and sustainable dividend returns (rather than QE-inspired capital gains) and, as described below, the valuations in Emerging Markets provide myriad opportunities to access attractive risk-adjusted yields.

Nevertheless, central banks are likely to moderate their hawkishness as inflationary pressures subside over the next six months, and particularly if a recession becomes more likely. Furthermore, the US mid-term elections in November 2022 introduce another factor in the market's assessment of the probable pace of Fed tightening. A less hawkish monetary policy environment would generally be supportive for higher levels of investor risk appetite.

## Growth

The long-term growth potential of Emerging Markets is well understood and underpinned by structural reforms and rising wealth. Over the past year, the world had started to recover from the COVID-19 pandemic, but then had to contend with slower growth in China and the profound impact of the Ukraine war including the unintended consequences of economic sanctions against Russia. Nonetheless, emerging countries in aggregate have sustained their economic growth premium over the developed world and the IMF expects 2022 to be the cyclical low point in relative growth rates before a meaningful expansion to historical levels over the next five years.

In the near term, leading indicators of economic activity such as PMI surveys support the divergence in growth between emerging and developed countries. In several of the major emerging countries these surveys are in expansionary territory with manufacturing and new orders PMIs above 50 and rising, whereas the same surveys show deterioration for developed countries.

China represents approximately 30% of Emerging Markets GDP and hence is important from both a fundamental perspective and in terms of investor sentiment. After a period of regulatory tightening in 2020 and 2021, compounded by its 'zero COVID-19' policy requiring severe lockdowns in major cities, China has shifted to policy stimulus in 2022. Importantly, the lockdowns appear to be moderating and the Chinese Communist Party National Congress in late 2022 provides an additional incentive to support growth.

## Emerging Markets deliver superior growth (%)

![img-0.jpeg](img-0.jpeg)

Source: IMF WEO database

Faced with mixed global macro signals, market expectations have moved from fearing stagflation to a worldwide recession, even if the latter view is not supported by current leading indicators. Although a recession is not yet a base case, the Emerging Markets are relatively well positioned to deal with adverse economic scenarios through their policy flexibility, diversity and lower leverage than developed countries.

Given the macro and geopolitical backdrop, there was widespread investor risk aversion through the second half of the financial year and the weakness in Emerging Markets became increasingly indiscriminate. Notably, other asset classes globally have also repriced in this period of de-risking, with US equities down 21% and commodity prices rolling over towards the end of the period; the US dollar benefited (+9% in the six months to 30 June).

Ashmore Group plc Annual Report and Accounts 2022 17
MARKET REVIEW (CONTINUED)
Valuations Outlook
The recent market environment has caused There is considerable geopolitical and macroeconomic
EmergingMarkets index valuations to overshoot to uncertainty reflected in global markets currently,
exceptionally attractive levels compared with history. but several factors give Emerging Markets investors
Inevitably, while there will be justification for the fall grounds for optimism.
in value of some securities, others will have been
Even without a near-term resolution to the war in
mispriced in a period of risk aversion that leads to
Ukraine, which sadly seems unlikely, inflationary
indiscriminate selling.
pressures should abate over the coming quarters.
Although there was a recovery in markets after the Base effects will play a significant role, as will the
initial shock of Russia invading Ukraine in early 2022, deflationary impact of inventory de-stocking following
this was short lived and the consequences of the a period of significant increases as the world
war in terms of higher inflation and central bank emerged from COVID-19 restrictions.
hawkishness led to further weakness in asset prices
In turn, this should moderate central banks’
globally towards the end of the financial year.
hawkishness, and economic growth should be
– In fixed income, the value available is illustrated by further supported by ongoing stimulus in China.
spreads on sovereign and corporate external debt, This scenario would be consistent with a return to
and the real yields and cheap currencies in local higher levels of investor risk appetite and improved
bond markets. For example, the main sovereign sentiment towards Emerging Markets, providing
external debt index (EMBI GD) traded at a spread meaningful catalysts for a recovery in asset prices
of 540 basis points over US Treasuries at the end from currentlevels.
of June, a level seen only a few times over the
There are risks to this positive outlook, but Emerging
past decade, and the local currency bond index
Markets are relatively well positioned since economic
(GBI-EM GD) offered a real yield premium of
growth has held up well relative to developed countries,
around 400 basis points over developed market
central banks in Emerging Markets are already closer
bonds of similar duration.
to the end of their rate hiking cycles than developed
– Equity valuations are at historical lows with the
world banks, and there are exceptionally attractive
MSCI EM index trading close to 10x earnings.
valuations in equity and fixed income markets that
While markets will continue to be influenced by
more than price in the near-term outlook for
policy actions and therefore volatility may remain
worldwide inflation and interest rates.
elevated, there is the prospect of moderating
In contrast, Developed Markets are more vulnerable
inflation over the coming quarters and China’s
since they must contend with highly indebted
stimulus should support the growth outlook.
governments, slowing economies with the risk of
Valuations alone are insufficient to deliver market
recession, an energy crisis, political challenges and
returns, but they are an important pre-requisite for
higher valuations.
the Emerging Markets asset classes to outperform
On balance, the combination of highly attractive
when investor risk appetite improves. History shows
absolute and relative valuations, resilient growth
that the inherent value can be captured rapidly when
and the potential easing of macro headwinds, mean
markets reach an inflection point, but also that the
that Emerging Markets assets should outperform.
recovery returns from a period of extreme and
Thedrivers of long-term Emerging Markets growth
indiscriminate market weakness can persist for a
are well-established and continue to underpin higher
prolonged period of time, as was the case beginning
investor allocations to the asset classes.
in 2009 and 2016.
Sovereign external debt spread over US Treasuries (bps)
750
625
500
375
250
125
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Source: J.P. Morgan
18 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
### “ The combination of highly attractive
### valuations, resilient growth and the
### potential easing of macro headwinds
### means that Emerging Markets assets
### should outperform.”
Nizwa Fort, Oman
Ashmore Group plc Annual Report and Accounts 2022 19
DIVERSIFIED
## Challenging perceptions
The size, scale and diversity of the Emerging Markets Ashmore’s business is highly diversified and reflects
are commonly misunderstood and underappreciated the markets in which it invests, with a broad range of
by investors. This is an inefficiency that Ashmore, as a investment products across four fixed income themes,
specialist active manager, can exploit to deliver investment equities and alternatives. Under phase two of its strategy
outperformance. However, allocations to the asset classes, the Group seeks to achieve further diversification over time,
and hence Ashmore’s AuM growth, will benefit as with particular focus on growth in equities AuM, an increase
investors gain more experience and a better understanding in the proportion of assets sourced from intermediary retail
of Emerging Markets over time. clients, and incremental capital raising into alternatives
funds. As the underlying markets continue to evolve,
The Emerging Markets represent an exceptionally
Ashmore expects further demand for investment grade
diverse set of liquid and illiquid asset classes,
strategies and ongoing client interest in ESG factors.
across more than 70 countries. These countries
have different political and economic models, Ashmore’s client base, while currently largely institutional,
funding profiles, credit ratings and demographics, is diversified and balanced by type of institution and client
amongst other characteristics, that ultimately domicile. This mitigates the inevitable impact of market
influence asset prices. Consequently, the cycles, with a range of client behaviours at particular points
dispersion of returns across the equity and in the cycle.
fixed income investment universe is wide
Read the Business review on pages 30 to 37 for more
and provides substantial opportunities for
information on Ashmore’s diverse business.
active managers.
For example, over the past 12 months, the sovereign
external debt benchmark index (EMBI GD) delivered a
return of -21%, but among its 70 constituents the highest
return was +14% and the lowest was -71%.
## Diversified
### The diversity of the Emerging Markets provides opportunities for Ashmore to deliver
### outperformance, and diversification of its business underpins the ability to create
### value for shareholders through market cycles.
Cappadocia, Turkey
20 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS

| 156 | 160 | 60 |
| --- | --- | --- |
| Emerging countries, of which | Issuers represented in the EMBI GD | Countries represented in the CEMBI |
| approximately half have investable | external debt index | BD corporate debt index, and |
| capitalmarkets |  | covering 799 issuers |

Ashmore Group plc Annual Report and Accounts 2022 21
INVESTMENT PROCESSES
## Ashmore’s consistent
## investment approach
## across asset classes
### Ashmore’s investing philosophy has been implemented consistently since the Group
### launched its first fund in October 1992. There are defining characteristics that are applied
### across asset classes as well as specific principles that recognise the key differences
### between, for example, investing successfully in the fixed income and equity markets.

| Investment committees | Proprietary research |  |
| --- | --- | --- |
| At the core of the philosophy in each asset class is | Ashmore’s long history of specialising in Emerging | 77 |
| a committee-based approach to managing client | Markets and its extensive network of relationships |  |

Emerging Markets countries
portfolios. This provides a highly institutionalised, means that proprietary research is an important
represented inportfolios
team-based framework that results in a ‘no star’ source of investment ideas. These insights are
culture in which no individual is single-handedly shared across asset classes, but importantly there
responsible for investment decisions. is no ‘house view’ that has to be followed by the
investment teams when constructing portfolios.
## 6
Inefficient asset classes
Additionally, Ashmore’s local office investment
The Emerging Markets fixed income and equity Local asset management
teams in countries such as Colombia, SaudiArabia,
operations in emerging
asset classes are large and diversified, as described
India and Indonesia also interact with the global countries
in the Market review, but also remain relatively
investment committees and provide valuable ‘on the
inefficient. This manifests itself in relatively low
ground’ insights as well as benefiting from global
index representation and volatility in security prices
macro views to assist in their own independent
that can be heavily influenced over short time
investment processes.
periods by factors other than underlying economic,
political and company fundamentals. Consequently,
Ashmore actively manages portfolios to exploit
these inefficiencies and to generate long-term
outperformance for clients.
Ashmore’s Emerging
Markets investments and
worldwide network
Emerging Markets invested
Ashmore presence
22 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Active management
Macro
In Emerging Markets, meaningful long-term alpha
Proprietary
top-down
can be delivered through active management and research
the expression of high conviction ideas in portfolios.
Thepoor index representation of fixed income and
equity markets means that alpha can be generated
both through active risk against benchmark weights,
and through investing in off-benchmark securities.
Thelatter does not necessarily mean instruments
are less liquid or have significantly different risk
A specialist,
characteristics, it simply means that they do not
active approach
conform to the strict eligibility criteria of the
to Emerging Markets
benchmark index provider.
Bottom-up:
Focus on liquidity Liquidity
– credit/value
Ashmore has an embedded risk-aware culture and obsessed
– equity/quality
this is especially important in the assessment and
growth
management of liquidity within portfolios. As such,
understanding market liquidity has always been
central to the investment processes, since the
investment teams must decide on and record
Active
specific securities to trade and seek to execute any
management
portfolio changes expeditiously. Inaddition to pre
and post-trade compliance oversight, the investment
committee reviews execution outcomes to ensure
that they comply with the agreed decisions.
To support the management of market liquidity,
theGroup’s global operating hubs in New York,
ESG integration
London and Singapore provide round-the-clock
Ashmore recognises that non-financial factors
## 102
trading capabilities and Ashmore has a wide range
can play an important part in ensuring sustainable
Investment professionals
of strong, well-established counterparty trading
growth and in building a robust and comprehensive dedicated to Emerging
relationships formed over three decades of specialist
understanding of an issuer, whether corporate or Markets
investing in Emerging Markets.
sovereign. Therefore, as a specialist Emerging
## Importantly, given that the majority of Emerging Markets manager, Ashmore considers ESG factors 34
Markets securities are issued, owned and traded in its investment analysis and integrates these
Global Emerging Markets
locally, these relationships include local brokers as factors into all of its investment processes, covering
fixed income team
well as global investment banks. Hence, as liquidity the fixed income, equity and alternatives asset classes.
increasingly moves to local trading venues within the
Similar to its credit and equity analysis, Ashmore
## 33
Emerging Markets, Ashmore’s portfolio managers
uses a variety of proprietary and third-party tools and
are well positioned to source liquidity when
data sets to assist in its understanding of ESG risks Global Emerging Markets
executing trading decisions. equity team
and opportunities, and how these are reflected in
market prices and fair values of securities.
Global and local investment teams
## 35
Ashmore’s common investing philosophy underpins In addition to ongoing engagement, both bilateral
independent decisions taken by the relevant and collaborative, with issuers on ESG topics, a focus
Local asset management
investment committees. Fixed income and equity in the near term is to continue to enhance the and alternatives teams
investment committees oversee the management of reporting of GHG portfolio emissions to clients.
global client portfolios, and local asset management
platforms invest in local and regional markets on
behalf of both domestic and global clients.
However, the local and global teams collaborate and
share information to assist in their independent
investment management processes.
Ashmore Group plc Annual Report and Accounts 2022 23
INVESTMENT PROCESSES (CONTINUED)
Fixed income investment process
Fixed income investment committee structure
Ashmore’s fixed income investment committee
oversees the management of global client portfolios
within the external debt, local currency, corporate
debt and blended debt themes.
Fixed income
The committee comprises the Chair, the relevant Investment Local offices
Equity
fixed income and multi-asset desk heads, and Committee (IC) and
IC
representatives from research, trading and Alternatives
Global macro and
riskmanagement.
asset allocation
The committee meets weekly and follows an
established process, to discuss and analyse the global
Collaboration Collaboration
macro environment, to update individual country and
company credit views, and to assess other relevant
risk factors including those relating to ESG.
Alongside the relevant asset class investment
Investment teams
teams, the committee oversees model portfolio Allocation
(sub ICs)
construction and changes to portfolio holdings.
Italso assesses the relative risks/rewards across
investment themes in order to determine the
appropriate positioning of blended debt strategies.
– External debt – Blended debt
Ashmore’s value-driven active management approach
– Local currency
employs a combination of macro top-down views
– Corporate debt
and rigorous bottom-up credit analysis with a focus
on determining an issuer’s ability and willingness
tomake coupon or capital payments.
ESG integration
Portfolio managers have geographic responsibilities
that guide their research focus, which includes
meetings with government officials, central banks,
regulators, company management and other
contacts within Ashmore’s established network.
In all themes, scenario planning plays an important
part in determining the fair value of a security,
andtherefore identifying cases where market prices
have diverged from underlying fundamentals.
The committee and its investment theme
sub-committees have the flexibility to analyse,
discuss and act upon market developments between
the formal weekly meetings, with portfolio decisions
subject to approval by the subsequent scheduled
investment committee meeting.
The combination of inefficient asset classes
and a specialist approach to value-based active
management means that Ashmore’s fixed income
investment process is able to deliver significant
long-term outperformance for clients, albeit with
the potential for periods of underperformance
typically when markets have become dislocated
and the greatest investment opportunities can
presentthemselves.
24 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Equity investment process
Equity investment committee structure
Ashmore’s equity investment process follows the
same philosophy and committee-based approach to
active portfolio management as the fixed
incomeprocess, yet is implemented independently.
Equity
Fixed Investment Local offices
Comprehensive coverage
Income Committee (IC) and
Ashmore’s equity strategies share common
IC Governance and Alternatives
underlying principles. This includes the belief that
risk management
Emerging and Frontier Markets are inefficient and
provide potential for significant alpha generation
through high conviction activemanagement.
Collaboration Collaboration
Ashmore’s investment universes are unconstrained
by indices, and liquidity assessment is integral to
both portfolio performance and risk management. Investment teams
Significant and sustained portfolio returns can be (sub ICs)
generated by a combination of both fundamental
’top-down’ and ’bottom-up’ research and
decisionmaking.
– All Cap – Active – Frontier – Multi-asset
Committee-based approach
The global Emerging Markets equity strategies are
managed by sub-committees for All Cap equity, Shared research framework
Active equity, Frontier Markets equity and
Multi-asset, in the same way that the fixed
income teams operate in investment theme
ESG integration
sub-committees. Governance and oversight is
provided by the equity investment committee,
which comprises the Chair, thesenior portfolio
managers responsible for the equity sub-themes,
and representatives from trading and
riskmanagement.
Shared research framework
There is a shared research framework that ensures
efficient and consistent analysis of opportunities,
andinsights are available from the fixed income and
local office teams, although importantly there is no
prescribed house view.
ESG fully integrated
Ashmore’s research is fundamental and primarily
proprietary in nature, and includes the explicit
integration of ESG factors into company analysis.
Ashmore’s equity investment professionals typically
have geographic research responsibilities and draw
upon a variety of internal and external sources to
generate investment ideas.
Delivering investment performance
Ashmore’s equity teams have delivered long-term
outperformance for clients and the current volatile
market environment, with a high dispersion of
returns, provides further significant investment
opportunities to support future alpha generation.
Ashmore Group plc Annual Report and Accounts 2022 25
INVESTMENT THEMES

# Ashmore’s diverse Emerging Markets investment themes

External debt

Invests in debt instruments issued by sovereigns and quasi-sovereigns and denominated in foreign currencies.

Local currency

Invests in local currencies and local currency-denominated debt instruments issued by sovereigns, quasi-sovereigns and companies.

Corporate debt

Invests in debt instruments issued by public and private sector companies.

Equities

Invests in equity and equity-related instruments including global, regional, country, small cap, frontier and multi-asset opportunities.

Alternatives

Invests in private equity, healthcare, infrastructure, special situations, distressed debt and real estate opportunities.

Blended debt

Asset allocation across the external debt, local currency and corporate debt investment themes, measured against tailor-made blended indices.

External debt

The external debt market is large with US$1.6 trillion of bonds outstanding, of which 67% are included in the benchmark index (EMBI GD). This index is highly diversified with 70 countries and balanced from a credit risk perspective with 52% of the bonds rated investment grade.

While emerging nations should naturally progress to local currency issuance, the external debt opportunity continues to grow as new issuers come to the market. Approximately half of the 156 developing countries have not issued publicly-tradable debt and, typically lacking domestic yield curves, can be expected to issue first in the external debt market.

The EMBI GD declined by 21% over the past 12 months, most of which occurred in the second half of the year, reflecting higher US Treasury yields, wider spreads as a result of broad-based risk aversion due to the factors described in the Market review, and the impact of actual or expected sovereign defaults. The high yield market underperformed investment grade assets with returns of -23% and -19%, respectively.

After recent market weakness, as at 30 June the index yields more than 8.5%, or in spread terms trades 540 basis points over US Treasuries, approximately twice the level that prevailed before the COVID-19 pandemic and which provides significant potential for spread compression and relative performance even as the Federal Reserve continues to raise interest rates. While some countries will inevitably face challenges with tighter financial conditions, the diversity of the index provides some protection against credit events.

Over the past 12 months, Ashmore has delivered outperformance in investment grade strategies (-17.8% composite gross return compared with -19.3% for the benchmark index) and underperformed in broad external debt strategies (-28.5% composite gross return compared with -21.2% for the benchmark index). The picture is similar over three years, with IG outperformance (-2.5% composite annualised gross return versus -3.4% for the index) and underperformance in broad external debt (-9.5% versus -5.2%). A bias towards high yield markets, with some areas of the asset class trading at distressed levels, is the principal reason for underperformance in the broad strategies.

Local currency

The local currency government bond markets are substantial, with US$16.4 trillion of bonds outstanding, and continue to grow as countries understand the merits of funding in their own currencies. While these markets are approximately 10 times the size of the sovereign external debt markets, index representation and index diversification lags the more established asset class: the benchmark GBI-EM GD index includes 16% of the total bonds outstanding, and comprises 20 countries.

In unhedged US dollar terms, the index fell 19% over the 12 months, broadly split between currency movements against a stronger US dollar and the impact of higher local rates.

Following this recent repricing, the index yields 7% in nominal terms, and around -1% in ex-post real terms, which is substantially more than the real yields available in Developed Markets of -5% to -7%. An important factor supporting valuations is that Emerging Markets central banks started their rate hiking cycles much earlier, thereby anchoring inflation expectations and providing relatively high yields, which, together with relatively cheap currencies, means the asset class offers attractive overall returns.

Ashmore has delivered outperformance in local currency bond strategies over the period, with a composite gross return of -16.1% compared with -19.3% for the benchmark index. There is also outperformance over three years, with a gross annualised return of -4.6% compared with -5.8% for the benchmark index.

Corporate debt

The scale of the Emerging Markets corporate debt opportunity is also significant with US$20.4 trillion of bonds outstanding. As is the case with sovereign credit, the majority of the issuance is in local currency (US$17.0 trillion) with hard currency bonds representing US$3.4 trillion. Similarly, the index representation is biased to the latter, with 34% of hard currency bonds in the benchmark CEMBI BD across 60 countries and comprising 799 issuers, but only 5% of the local currency-denominated bonds are in a benchmark index. The CEMBI BD is balanced from a credit quality perspective, with 57% of bonds rated investment grade.

26 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS

| US$38.4 trillion | US$33.4 trillion | US$40.4 trillion |
| --- | --- | --- |
| of Emerging Markets bonds inissue | of Emerging Markets debt is in | of Emerging Markets equity |
|  | localcurrencies | marketcapitalisation |

The CEMBI BD outperformed sovereign markets over the past Furthermore, investors in blended debt recognise that there
year, with a return of -14%, but still reflecting higher US Treasury can be substantial differences in the annual returns from the
yields and wider spreads. Incommon with external debt over this constituent fixed income asset classes, with a minimum difference
period, the HY and IG sub-indices delivered similar returns to the in the range of annual returns over the past 20 years of more than
overall index with -15% and -13%, respectively. 500basis points.
The default rate is 3.7% at the end of June, broadly unchanged Ashmore’s blended debt IG composite has marginally
compared with a year ago. EM debt typically outperforms the underperformed its benchmark index over the past year (-18.2%
USHY market due to greater diversity, lower leverage, and the gross return versus -17.6%) and over three years (-3.7% gross
potential for implicit or explicit sovereign support in certainindustries. annualised return versus -3.6%). The broad composite has also
underperformed with a gross return of -28.5% over one year
Leverage for EM corporates tends to result from operational and
compared with the benchmark index return of -18.5%, and a gross
investment needs rather than financial engineering, and management
annualised return of -9.7% compared with the benchmark index
teams are acutely aware of the challenges presented by changing
return of -4.8% over three years. The broad strategy’s allocation to
political and liquidity environments. Hence, in both IG and HY
external debt, and an off-benchmark allocation to corporate debt,
markets, leverage tends to be lower than in equivalent developed
both with a bias to high yield assets, explains the
world corporate bond markets.
underperformance compared with the benchmark.
In this context, the pricing of EM corporate debt today represents
an exceptional opportunity with spreads over US Treasuries above Equities
pre-pandemic levels. This applies equally to HY and IG markets,
The Emerging Markets equity investment universe is similar in
with the latter an increasingly attractive asset class for investors
size to the aggregate fixed income markets, at US$40.4 trillion
seeking diversification, attractive yields, and highly-rated credits.
of market capitalisation. The established large cap markets
Over the past 12 months, Ashmore has delivered outperformance represent the majority of the universe, but there are meaningful,
in its IG composite (-13.5% gross return compared with -15.5% and rapidly growing, opportunities in small cap and frontier equities.
for the benchmark index) and underperformance in its broad InEmerging Markets equity, the drivers of profits and short-term
composite (-23.7% compared with -14.3% for the benchmark valuations vary, butcan be domestic in nature, particularly in
index). Over three years, the broad composite has returned -4.5% frontier countries, and therefore provide longer-term investment
on a gross annualised basis and the IG composite has delivered opportunities that are uncorrelated with global macro factors.
-1.3%, both underperforming their benchmarks (-1.1% and -0.6%,
Over the past 12 months, the challenging macro environment and
respectively). As with external debt, the underperformance in broad
a stronger US dollar mean that the main Emerging Markets equity
corporate debt strategies is primarily due to positioning in high yield
indices fell in value. As a consequence, the Small Cap index fell by
markets, which have underperformed and, in certain cases such as
21% and the Frontier Markets index performed better and was 5%
Chinese real estate, have faced specific challenges that are in the
lower over the period. The MSCI EM index declined by 25%, with
process of being addressed.
weakness in Chinese assets being an important driver.
Blended debt The attractions of Emerging Market equities are centred on the
superior economic growth prospects compared with developed
An allocation to a blended debt strategy provides access to the full
countries, the distinct and uncorrelated returns available in Frontier
range of investment opportunities in the broad and diversified
Markets, and the substantial valuation discounts that prevail
Emerging Markets fixed income universe, comprising approximately
compared with both history and developed world equities. The first
US$38 trillion of bonds in issue.
two factors are structural, and the recent market weakness has
The standard blended debt index is 50% EMBI GD, 25% GBI-EM
delivered an exceptional opportunity to capture significant upside
GD and 25% ELMI+ and, reflecting the performance of the
from current asset price levels.
constituent asset classes described above, this index returned
Ashmore’s equity strategies have underperformed over the
-18.5% over the past 12 months, with the investment grade index
12months but have delivered good outperformance over the past
returning -17.6%.
three years. For example, the all cap composite has a gross return
The blended debt approach suits both the first-time investor
of -31.5% over one year compared with -25.3% for the benchmark
in Emerging Markets fixed income, by providing exposure
index, but has delivered a gross annual return of +4.9% over three
to the broad array of external debt, local currency and
years versus the benchmark index return of +0.6%.
corporate debt asset classes, and the experienced investor
that wishes to define bespoke investment objectives and
benchmarks that comprise multiple fixed income markets.
Ashmore Group plc Annual Report and Accounts 2022 27
LOCAL
## Local
### The importance of local markets is well-established, with 94% of the Emerging Markets
### investment universe represented by local currency assets. These markets are growing
### rapidly and Ashmore seeks to benefit from this trend through establishing, supporting and
### growing a diversified range of local asset management platforms to complement the
### Group’s global Emerging Markets activities.
Bogota, Colombia
28 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
## Seizing the local markets opportunities
The investable capital within emerging countries is growing However, they all share common characteristics that underpin
rapidly, approximately twice as fast as in the developed world, the diversification, growth and value-creation opportunities
and while some will be invested offshore, much of it will seek forAshmore:
domestic investment opportunities. Overall, Ashmore has a
– Independent investment management processes, interacting
significant base of assets sourced from clients in Emerging
with and bringing local market insight to Ashmore’s global
Markets, representing 27% of Group AuM.
investment teams
Ashmore is well-positioned to participate in the local market – Strong culture underpinned by local employees with
growth opportunity through the third phase of its strategy, which equityownership
seeks to mobilise Emerging Markets capital, including through a
– Ashmore retains significant equity stake and has firm
distinctive set of local asset management platforms in countries
governance oversight
with the potential for significant growth in their independent
– Common operating platform to deliver efficiency benefits
investment management industries. Ashmore has operations in
In addition to providing a conduit to strong AuM growth
Colombia, India, Indonesia, Peru, Saudi Arabia and United
opportunities and diversification benefits, the potential value of
ArabEmirates.
the local asset management platforms is illustrated by Ashmore
Each of the platforms is different; for example Colombia
Indonesia. This business listed on the Jakarta Stock Exchange in
predominantly manages domestic and regional real assets
January 2020 and has performed well, with the share price
in closed end funds, whereas Indonesia has a focus on investing
increasing 42% (to June 2022) and the valuation (in excess of
in the domestic liquid equity and fixed income markets.
20x prospective earnings) is a substantial premium to developed
world asset managers.
In pursuit of its strategic objectives, Ashmore will continue to
explore opportunities to expand the capabilities of its existing
platforms and to add additional offices to the network over time.

| US$6.9bn | 118 |
| --- | --- |
| Total assets managed locally, representing | Employees in local operations, providing |
| 11% of Group AuM | insights, diversity and a platform for |

further substantial AuM growth
Ashmore Group plc Annual Report and Accounts 2022 29
BUSINESS REVIEW

# Established business model

The combination of lower market levels and consequent net outflows reduced AuM by 32%. Ashmore’s established business model, with a high degree of cost flexibility, mitigated the impact and delivered a 64% adjusted EBITDA margin. The balance sheet remains robust with £664 million of excess capital resources.

## Assets under management

AuM declined by 32% over the year to US$64.0 billion, with the majority of the movement attributable to negative investment performance of US$16.6 billion and net outflows of US$13.5 billion. Average AuM were 7% lower than in the prior year at US$83.6 billion (FY2020/21: US$90.0 billion).

Gross subscriptions of US$13.1 billion represent 14% of opening AuM, lower than in the prior year period primarily as a consequence of lower risk appetite in the second half of the year (FY2020/21: US$17.6 billion, 21% of opening AuM).

New client mandates represented approximately 30% of institutional subscriptions with particular demand for external debt, blended debt and local currency strategies. Existing institutional clients added to mandates across a broad range of themes, including external debt, local currency, equities and blended debt.

Demand continues for investment grade products in sovereign and corporate debt, and clients recognised the attractive yields on offer with flows into Asia-focused corporate debt funds. Ashmore Colombia raised US$0.2 billion into its third private equity fund, which will focus on investments in domestic and regional infrastructure projects.

Gross redemptions of US$26.6 billion, or 28% of opening AuM, were higher than in the prior year period (FY2020/21: US$16.4 billion, 20% of opening AuM) and include US$6.0 billion of overlay redemptions (FY2020/21: US$0.7 billion) driven by lower market levels, particularly in the second half of the year.

The combination of geopolitical tension, high inflation figures and central banks tightening monetary policy, including the Fed in the second half of the year, with the consequent negative impact on market levels, meant that investor risk appetite was markedly lower as the period developed. Institutional asset allocation decisions based on risk appetite therefore led to redemptions in the fixed income and equities asset classes.

Some pension funds reduced risk exposure during the year as market performance in other asset classes, together with higher liability discount rates, have delivered fully-funded positions.

Additionally, strategies that have a high yield bias and have underperformed, notably in external debt and blended debt, also saw redemptions.

The total net outflow for the period of US$13.5 billion (FY2020/21: US$1.2 billion net inflow) comprises a net outflow from retail clients of US$2.3 billion (33% of opening intermediary retail AuM), reflecting a shorter investment horizon, and net redemptions from institutional clients of US$11.2 billion (13% of opening institutional AuM). Intermediary retail redemptions represented 15% of the total redemptions in the period compared with the 8% share of opening AuM.

|  £m | FY2021/22 Reported | Reclassification of |   | FY2021/22 Adjusted | FY2020/21 Adjusted  |
| --- | --- | --- | --- | --- | --- |
|   |   |  Seed capital-related items | Foreign exchange translation  |   |   |
|  Net management fees | **243.5** | – | – | **243.5** | 270.9  |
|  Performance fees | **4.5** | – | – | **4.5** | 11.9  |
|  Other revenue | **2.9** | – | – | **2.9** | 4.6  |
|  Foreign exchange | **11.6** | – | (5.3) | **6.3** | 9.2  |
|  **Net revenue** | **262.5** | – | (5.3) | **257.2** | 296.6  |
|  Gains on investment securities | **(61.3)** | 61.3 | – | – | –  |
|  Change in third-party interests in consolidated funds | **16.5** | (16.5) | – | – | –  |
|  Personnel expenses | **(73.4)** | – | 1.1 | **(72.3)** | (81.4)  |
|  Other expenses excluding depreciation and amortisation | **(22.0)** | 1.4 | – | **(20.6)** | (19.5)  |
|  **EBITDA** | **122.3** | 46.2 | (4.2) | **164.3** | 195.7  |
|  EBITDA margin | 47% | – | – | 64% | 66%  |
|  Depreciation and amortisation | **(3.1)** | – | – | **(3.1)** | (2.8)  |
|  **Operating profit** | **119.2** | 46.2 | (4.2) | **161.2** | 192.9  |
|  Net finance income/(expense) | **(2.1)** | 3.7 | – | **1.6** | 0.6  |
|  Associates and joint ventures | **1.3** | – | – | **1.3** | 0.3  |
|  **Profit before tax** | **118.4** | 49.9 | (4.2) | **164.1** | 193.8  |
|  Foreign exchange translation | – | – | 4.2 | **4.2** | (3.8)  |
|  Seed capital-related items | – | (49.9) | – | **(49.9)** | 92.5  |
|  **Profit before tax** | **118.4** | – | – | **118.4** | 282.5  |
|  **Diluted EPS (p)** | **12.6** | 6.6 | (0.5) | **18.7** | 23.3  |

30 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
AuM movements by investment theme Investment performance
The development during the period of AuM by theme is shown in As at 30 June 2022, 45% of AuM is outperforming over one year,
the table below. The local currency investment theme includes 28% over three years and 48% over five years (30 June 2021:
US$7.2 billion of overlay funds (30 June 2021: US$12.3 billion). 96%, 57% and 79%,respectively).
During the period, assets totalling US$0.5 billion were reclassified
While this overall performance picture is characteristic of
from the local currency theme to the blended debt theme as a
Ashmore’s investment processes in weak and volatile markets,
result of changes to benchmarks and/or investment guidelines.
within the headline figures there are a number of areas of
There was also a US$0.3 billion fall in local currency AuM as a
consistent outperformance including local currency strategies,
result of the reduction in the Group’s interest in Taiping Fund
investment grade products across all three fixed income asset
Management Company from 8.5% to 5.2%.
classes (external debt, corporate debt and blended debt) and
AuM as invested equitystrategies.
The charts on page 32 show AuM ‘as invested’ by underlying
Where there is underperformance, it is typically for one of the
investment theme, which takes account of the allocation into the
following connected reasons.
underlying asset classes of the multi-asset and blended debt
– The past two years have seen four distinct shocks to markets,
strategies, and of crossover investment by certain external
including the Emerging Markets, from which there is yet to be a
debtfunds.
sustained recovery: the COVID-19 pandemic, the inflation spike
The Group’s AuM remain geographically diverse and broadly
as lockdown restrictions eased, China’s policy tightening in areas
consistent with recent periods, with 39% of AuM invested in Latin
such as the real estate sector resulting in slower economic
America, 29% in Asia Pacific, 12% in Eastern Europe and 20% in
growth, and the Ukraine war that has exacerbated the inflation/
the Middle East and Africa.
rates challenges.
– Ashmore’s fixed income investment processes tend to acquire
Clients
risk in periods of market weakness, to take advantage of
Ashmore’s clients are predominantly a diversified set of
dislocated asset prices and to underpin future outperformance.
institutions, representing 95% of AuM, with the remainder sourced
During the most recent cycles these processes have been
through intermediary retail channels. Segregated accounts
implemented consistently and, as a consequence, there is
represent 81% of AuM (30 June 2021: 79%) and, in line with the
substantial inherent value in portfolios, but the performance
third phase of theGroup’s strategy, 27% oftheGroup’s AuM has
figures in some strategies reflect the buying of assets at wider
been sourced from clients domiciled in Emerging Markets
bid/offer spreads in anticipation of a recovery in pricing.
(30June2021: 26%).
– The HY markets have generally underperformed in the period
Ashmore’s principal mutual fund platforms are in Europe and the and this can be where the greatest value opportunities arise.
US, which in total represent AuM of US$6.4 billion in 42 funds. Therefore, for clients that have the ability to invest in these
TheEuropean SICAV range comprises 30 funds with AuM of markets, the market dislocation is likely to have had a more
US$5.4 billion (30 June 2021: US$10.1 billion in 29 funds) and pronounced impact, but the potential recovery is also
the US 40-Act range has 12 funds with AuM of US$1.0 billion commensurately greater.
(30June2021: US$2.3 billion in 12funds).
AuM

|  |  | AuM |  | Gross |  | Gross |  | Reclassifications |  |  |  | 30 June |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | 30 June 2021 |  | subscriptions |  | redemptions |  | Net flows |  | & other | Performance |  |  | 2022 |
| Investment theme |  | US$bn |  | US$bn |  | US$bn | US$bn |  | US$bn |  | US$bn | US$bn |  |

External debt 18.7 3.6 (3.7) (0.1) – (4.2) 14.4
Local currency 31.9 3.5 (10.8) (7.3) (0.8) (3.2) 20.6
Corporate debt 11.3 0.9 (2.2) (1.3) – (3.2) 6.8
Blended debt 23.4 2.1 (6.4) (4.3) 0.5 (5.2) 14.4
Equities 7.7 2.8 (3.5) (0.7) – (0.7) 6.3
Alternatives 1.4 0.2 – 0.2 – (0.1) 1.5
Total 94.4 13.1 (26.6) (13.5) (0.3) (16.6) 64.0
Ashmore Group plc Annual Report and Accounts 2022 31
BUSINESS REVIEW (CONTINUED)
## Ashmore’s diverse investment themes and clients
## 2021 (%) 2022 (%)
AuM by investment theme

| External debt 20 | External debt |
| --- | --- |
| Local currency 34 | Local currency |
| Corporate debt 12 | Corporate debt 11 |
| Blended debt 25 | Blended debt |
| Equities 8 | Equities 10 |
| Alternatives 1 | Alternatives |

AuM as invested

| External debt 32 | External debt |
| --- | --- |
| Local currency 40 | Local currency |
| Corporate debt 19 | Corporate debt 17 |
| Equities 8 | Equities 10 |
| Alternatives 1 | Alternatives |

AuM by investor type

| Central banks 11 | Central banks |
| --- | --- |
| Sovereign wealth funds 21 | Sovereign wealth funds |
| Governments 7 | Governments |
| Pension plans 26 | Pension plans |
| Corporates/financial | Corporates/financial |
| institutions 22 | institutions |
| Funds/sub-advisers 4 | Funds/sub-advisers |
| Intermediary retail 8 | Intermediary retail |
| Foundations/endowments 1 | Foundations/endowments |

AuM by investor geography

| Americas 20 | Americas |
| --- | --- |
| Europe 28 | Europe |
| UK 7 | UK |
| Middle East and Africa 17 | Middle East and Africa 17 |
| Asia Pacific 28 | Asia Pacific |

15
19 33 21
22
32 38 32
2
6
27
24
26 2
25
2
32 Ashmore Group plc Annual Report and Accounts 2022 3
5
1
STRATEGIC REPORT

GOVERNANCE

FINANCIAL STATEMENTS

## Financial review

### Revenues

Net revenue declined by 10% to £262.5 million, primarily as a result of lower net management and performance fees compared with the prior year. On an adjusted basis, excluding foreign exchange translation effects, net revenue fell by 13% to £257.2 million.

### Net revenue

|   | FY2021/22 £m | FY2020/21 £m  |
| --- | --- | --- |
|  Net management fees | **243.5** | 270.9  |
|  Performance fees | **4.5** | 11.9  |
|  Other revenue | **2.9** | 4.6  |
|  FX: hedges | **6.3** | 9.2  |
|  **Adjusted net revenue** | **257.2** | 296.6  |
|  FX: balance sheet translation | **5.3** | (4.9)  |
|  **Net revenue** | **262.5** | 291.7  |

Net management fee income declined by 10% to £243.5 million. This reflects the 7% fall in average assets under management, a lower net management fee margin of 39bps (FY2020/21: 41bps) and the small benefit from a lower average GBP:US$ rate in this period. At constant FY2020/21 exchange rates, net management fee income reduced by 11%.

The net management fee margin declined by two basis points compared with the prior year period but was stable during the 12 months. The year-on-year movement is attributable to the impact of higher margin intermediary retail net outflows (one basis point) and the effect of product mix, competition and other factors (one basis point).

There was no overall margin impact from changes in AuM by investment theme, with the positive effects of higher equities AuM, lower margin overlay redemptions and capital raising in alternatives being offset by lower AuM in the other fixed income themes.

Similarly, flows in and out of large mandates did not result in a material aggregate change in the Group's revenue margin compared with the prior year, with new mandates and top-ups countered by redemptions from other institutional accounts.

The table below summarises the net management fee income, performance fee income, and average net management fee margin by investment theme.

Performance fees of £4.5 million (FY2020/21: £11.9 million) were realised in the year, and delivered by a range of funds in the external debt, local currency, blended debt and equities investment themes. Approximately US$8 billion of the Group's AuM, or 12% of the total, is eligible to earn performance fees at 30 June 2022. The Group continues to expect its diverse sources of net management fee income to generate the substantial majority of its net revenues.

Translation of the Group's non-Sterling assets and liabilities, excluding seed capital, resulted in an unrealised foreign exchange gain of £5.3 million (FY2020/21: £4.9 million loss) reflecting a lower GBP:US$ dollar rate at the period end. The Group's effective hedging programme and the active management of foreign currency exposures during the period meant that realised and unrealised hedging gains of £6.3 million were generated (FY2020/21: £9.2 million gain). Therefore, the Group recognised a total foreign exchange gain of £11.6 million in revenues, higher than in the prior year (FY2020/21: £4.3 million gain).

Other revenue of £2.9 million was comparable to the prior year period (FY2020/21: £4.6 million).

### Operating costs

Total operating costs of £98.5 million (FY2020/21: £104.3 million) include £1.4 million of expenses incurred by seeded funds that are required to be consolidated (FY2020/21: £1.7 million), as disclosed in note 20. On an adjusted basis, taking into account the impact of seed capital and the variable compensation accrual on foreign exchange translation losses, operating costs reduced by 7% compared with the prior year period. Adjusted operating costs fell by 8% at constant FY2020/21 exchange rates.

|  Investment theme | Net management fees |   | Performance fees |   | Net management fee margin  |   |
| --- | --- | --- | --- | --- | --- | --- |
|   |  FY2021/22 £m | FY2020/21 £m | FY2021/22 £m | FY2020/21 £m | FY2021/22 bps | FY2020/21 bps  |
|  External debt | **46.7** | 52.0 | **2.0** | 1.8 | **35** | 38  |
|  Local currency | **54.9** | 60.4 | **0.8** | 1.8 | **27** | 29  |
|  Corporate debt | **26.0** | 34.6 | – | 4.2 | **37** | 41  |
|  Blended debt | **69.3** | 82.7 | **1.3** | 2.6 | **46** | 47  |
|  Equities | **33.1** | 28.9 | **0.4** | 0.8 | **58** | 62  |
|  Alternatives | **13.5** | 12.3 | – | 0.7 | **138** | 132  |
|  **Total** | **243.5** | 270.9 | **4.5** | 11.9 | **39** | 41  |

Ashmore Group plc Annual Report and Accounts 2022 33
BUSINESS REVIEW (CONTINUED)

| Operating costs |  |  |  |  | Impact of seed capital investments on profits |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | FY2021/22 |  | FY2020/21 |  |  | FY2021/22 |  | FY2020/21 |  |
|  |  | £m |  | £m |  |  | £m |  | £m |
| Staff costs (27.8) (26.7) |  |  |  |  | Consolidated funds (note 20): |  |  |  |  |
| Other operating costs (20.6) (19.5) |  |  |  |  | Gains/(losses) on investment |  |  |  |  |
| Depreciation and amortisation (3.1) (2.8) |  |  |  |  | securities (61.3) 123.5 |  |  |  |  |
| Operating costs before VC (51.5) (49.0) |  |  |  |  | Change in third-party interests in |  |  |  |  |
| Variable compensation (VC) (45.6) (53.6) |  |  |  |  | consolidated funds 16.5 (52.6) |  |  |  |  |
| VC accrual on FX gains/losses 1.1 (1.1) |  |  |  |  | Operating costs (1.4) (1.7) |  |  |  |  |
| Adjusted operating costs (96.0) (103.7) |  |  |  |  | Finance income 5.7 3.3 |  |  |  |  |
| Consolidated funds costs (1.4) (1.7) |  |  |  |  | Sub-total: consolidated funds (40.5) 72.5 |  |  |  |  |

Add back VC on FX gains/losses (1.1) 1.1
Total operating costs (98.5) (104.3) Unconsolidated funds (note 8):
Market return (10.6) 25.3
Staff costs increased by 4% to £27.8 million, reflecting the increase
Foreign exchange 1.2 (5.3)
in the Group’s headcount from 310 to 315 over the year and the
Sub-total: unconsolidated funds (9.4) 20.0
impact of industry-wide wage inflation.
Other operating costs, excluding consolidated fund expensesand Total seed capital profit/(loss) (49.9) 92.5
depreciation and amortisation, increased by 6% to £20.6 million.
– realised 0.1 8.5
Asexpected, the easing of COVID-19 restrictions around the world
– unrealised (50.0) 84.0
meant that, notably in the second half of the year, employees could
return to offices and business travel was possible across a greater Profit before tax
number of countries, with a commensurate return towards pre
Statutory profit before tax was 58% lower at £118.4 million
COVID-19 levels of operating expenses in these areas.
(FY2020/21: £282.5 million) as a consequence of the decline in
In line with the Board-approved policy, Ashmoreaccrued charitable adjusted EBITDA and the mark-to-market losses on the Group’s
donations of £0.6 million (FY2020/21: £1.0 million), equivalent to seed capital investments.
0.5% of profit before tax.
Taxation
Variable compensation has been accrued at 21.5% of earnings The impact of the Group’s share price on the allowable value of
before variable compensation, interest and tax, resulting in share-based remuneration provided to employees and non-
a charge of £45.6million, 15% lower than in the prior year deductible unrealised seed capital losses mean that the effective
(FY2020/21: £53.6 million) and consistent with the reduction tax rate of 22.4%(FY2020/21: 14.4%) is higher than the prevailing
in adjusted net revenue. UK corporation tax rate of 19.0% (FY2020/21: 19.0%). Note 12 to
the financial statements provides a full reconciliation of this
The combined depreciation and amortisation charges for
difference compared withthe UK corporation tax rate.
theperiodof £3.1 million were similar to the prior year.
The Group’s current effective tax rate, based on its geographic mix
Adjusted EBITDA
of profits and prevailing tax rates, is approximately 17% to 18%.
Consistent with the lower revenue base but also lower operating
costs, adjusted EBITDA fell by 16% from £195.7 million to Earnings per share
£164.3million. The Group’s disciplined approach to operating costs Basic earnings per share for the period fell by 63% to 13.4 pence
means that, notwithstanding lower AuM and revenues over the (FY2020/21: 36.4 pence) and diluted earnings pershare also
period, it delivered an adjusted EBITDA margin of 64% declined by 63% from 34.2 pence to 12.6pence.
(FY2020/21:66%).
On an adjusted basis, excluding the effects of foreign exchange
Finance income translation, seed capital-related items and relevant tax, diluted
Net finance expense of £2.1 million (FY2020/21: £23.9 million earnings per share were 20% lower at 18.7 pence (FY2020/21:
income) includes mark-to-market losses relating to seed capital 23.3pence), which is broadly consistent with the 16% year-on-year
investments, which are described in more detail below. Excluding decline in adjusted EBITDA.
such items, net interest income for the period of £1.6 million was
slightly higher than in the prior year as a consequence of higher
prevailing market interest rates (FY2020/21: £0.6 million).
Seed capital
The following table summarises the principal items in the accounts
to assist in understanding the financial impact of the Group’s seed
capital programme on profits. The seed capital investments
generated a total mark-to-market loss of £49.9 million (FY2020/21:
£92.5 million gain). Thiscomprises a £40.5 million loss in respect of
consolidated funds, including £5.7 million of finance income, and a
£9.4million loss in respect of unconsolidated funds that is reported
in financeincome.
34 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Balance sheet The mark-to-market gain recognised in the first half of the year
was unwound in the second half as the impact of the Ukraine
Ashmore’s consistent approach is to maintain a strong and liquid
war caused widespread risk aversion and a fall in the value of
balance sheet through market cycles, enabling it to support the
risk assets across global markets. There was a resultant mark-to-
commercial demands of current and prospective investors, and to
market impact on the value of the Group’s seed investments in
take advantage of strategic development opportunities across
equity and fixed income strategies, together with downward
thebusiness.
pressure on asset values in the alternatives theme. Overall, the
As at 30 June 2022, total equity attributable to shareholders
impact over the 12-month period was a net £49.9 million mark-to-
of the parent was £945.0 million (30June 2021: £911.6 million).
market loss, which was unrealised at the period end.
The Group has nodebt.
The diversified mix of seed capital investments means that the
Cash
underlying fund portfolios, some of which are consolidated under
Ashmore’s business model continues to deliver a high conversion IFRS 10, have exposure to a range of Emerging Markets asset
rate of operating profits to cash. Based on operatingprofit of classes, including sovereign and corporate fixed income, listed
£119.2 million for the period (FY2020/21: £258.3 million), theGroup equities, private equity, real estate and infrastructure, and a wide
generated £182.1 million of cash fromoperations (FY2020/21: array of industries including education, energy, financials,
£213.5 million). The operating cash flows after excluding healthcare, industrials, basic materials, transport and utilities.
consolidated funds represent 113% of the adjusted EBITDA
The consideration of ESG factors has been integrated into all of
for the financial year of £164.3 million (FY2020/21: 109%).
Ashmore’s investment processes, which therefore means the
Cash and cash equivalents by currency Group’s seed capital investments are in funds that are scored in
30 June 30 June accordance with Ashmore’s proprietary ESG methodology and may
2022 2021
£m £m contribute to Ashmore’s involvement in industry initiatives such as
Climate Action 100+, NZAMI and UN PRI.
Sterling 273.1 76.0

| US dollar 247.9 351.5 | Seed capital market value by currency |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
| Other 31.0 28.6 |  | 30 June |  | 30 June |  |
|  |  |  | 2022 |  | 2021 |
| Total 552.0 456.1 |  |  | £m |  | £m |

US dollar 222.4 297.6
Excluding cash held in consolidated funds, the Group’s cash and
Colombian peso 19.0 16.2
cash equivalents increased by £96.3 million to £542.0 million
Other 30.6 23.0
(30June 2021: £445.7 million). The principal reasons for the
Total market value 272.0 336.8
change were the significant net cash generated through successful
redemptions of seed capital investments, and an increase in the
As at 30 June 2022, approximately 60% of the Group’s seed capital
value of US dollar-denominated cash balances as the currency
is held in funds with better than one-month dealing frequency,
strengthened against Sterling over the year.
such as SICAV or US 40-Act mutualfunds. Ashmore has also made
Seed capital investments seed capital commitments to funds of £12.4 million that were
undrawn at the period end, giving a total value for the Group’s seed
The Group’s seed capital programme has delivered growth in
capital programme of approximately £285 million.
third-party AuM with approximately US$5 billion of AuM in funds
that have been seeded, representing 8% of total Group AuM.
Goodwill and intangible assets
During the year, the Group made new investments of At 30 June 2022, goodwill and intangible assets on the Group’s
£7.4 million and profitably realised £62.2 million from previous balance sheet totalled £90.9 million (30June 2021: £80.5million).
investments. As a consequence of these successful realisations, The movement in the period is primarily the result of aforeign
the Group’s seed capital activities generated net cash flows of exchange revaluation gain in reserves of £10.5 million (FY2020/21:
£54.7 million in the period. £9.0millionloss).
In addition to the net redemption of £54.8 million, the combination Shares held by EBT
of the unrealised mark-to-market loss and positive foreign
The Group’s EBT purchases and holds shares in anticipation of
exchange movements in reserves reduced the market value of
the vesting of share awards. At 30 June 2022, theEBT owned
seed investments by £10.0 million, resulting in a closing value of
55,512,301 ordinary shares (30 June 2021: 52,345,869 ordinary
£272.0 million at 30 June 2022 (30 June 2021: £336.8 million).
shares), representing 7.8% of the Group’s issued share capital
New subscriptions in the period were focused on developing the (30June 2021: 7.3%).
fund ranges in the Group’s local asset management platforms,
withAshmore Indonesia using its own balance sheet to fund seed
investments in the blended debt theme.
The majority of the redemptions were to match client flows into
equity funds, reflecting the Group’s success in generating client
demand particularly in all cap strategies. Theremainder primarily
relates to distributions made by funds in the alternatives theme
following successful investment realisations.
Ashmore Group plc Annual Report and Accounts 2022 35
BUSINESS REVIEW (CONTINUED)

### Foreign exchange

The majority of the Group's fee income is received in US dollars and it is the Group's policy to hedge up to two-thirds of the notional value of budgeted foreign currency-denominated net management fees. Foreign currency assets and liabilities, including cash, are marked to market at the period end exchange rate with movements reported in either revenues or other comprehensive income (OCI).

Movements in the GBP:US$ and other exchange rates over the period benefited net management fees by 1%, increased operating costs by 1%, and resulted in translation gains in net revenue of £5.3 million on the Group's foreign currency assets and liabilities and a £1.2 million mark-to-market gain on the Group's unconsolidated seed capital investments.

Included in OCI is a foreign exchange translation gain on non-Sterling assets and liabilities of £80.2 million (FY2020/21: £74.9 million loss) primarily comprising a gain of £41.2 million on the Group's cash and a £38.2 million gain on the value of seed capital investments.

### Regulatory capital

In January 2022, the IFPR introduced a new capital adequacy assessment process, with the ICARA replacing the ICAAP. The ICARA shifts much of the focus away from risks that a firm faces towards the harm that it may pose to clients and markets. Ashmore has been reporting under IFPR since 1 January 2022 and will apply the ICARA approach to the calculation of the capital requirement for its UK regulated entity, AIML, in the second half of 2022.

Using a consistent approach to assessing the Group's regulatory capital requirement as was adopted under the ICAAP regime, the Board has determined the Group's capital requirement to be £125.2 million as at 30 June 2022. This is lower than the equivalent prior year figure (30 June 2021: £155.9 million) primarily because of a reduced market risk requirement as a result of the lower market value of seed capital investments.

Ashmore holds total capital resources of £788.7 million as at 30 June 2022, equivalent to 111 pence per share, and providing an excess of £663.5 million over the Group capital requirement.

### Dividend

The Board's policy is to pay a progressive ordinary dividend over time, taking into consideration factors such as the prospects for the Group's earnings, demands on the Group's financial resources, and the markets in which the Group operates.

The primary reason for lower statutory profits this year is the mark-to-market loss on seed capital investments, while the adjusted diluted EPS is significantly higher than the statutory figure.

The Board recognises the importance of the ordinary dividend to shareholders and, taking into consideration the profit for the year, the substantial cash flows delivered, the strength of the balance sheet and the continued long-term growth opportunities available to Ashmore, it has recommended a final dividend of 12.1 pence per share. The cost of the dividends paid and declared in respect of FY2021/22 is £118.2 million, which represents 54% of the Group's cash flows before dividends generated in the period.

If approved by shareholders, the dividend will be paid on 9 December 2022 to all shareholders on the register on 4 November 2022.

### Tom Shippey

Group Finance Director

1 September 2022

36 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Seoul, South Korea
Ashmore Group plc Annual Report and Accounts 2022 37
RISK MANAGEMENT
## Embedded risk
## management culture
### Ashmore recognises that its strategy and business model have inherent risks,
### withthe potential for harm to the firm, its clients and the markets in which it
### operates. Therefore, the Group identifies, evaluates and manages these principal
### and emerging risks through an established and effective internal control framework
### supported by an embedded risk management culture.
Overview of Ashmore’s risk management The Group’s RCC meets monthly and is
responsible for monitoring and assessing all
and internal control systems
relevant matters regarding risk, compliance and
In accordance with the Code, the Board is ultimately
The Group’s three-phase
related internalcontrols.
responsible for the Group’s risk management and strategy is designed
internal control systems and for reviewing their The RCC is chaired by the Head of Risk Management to create value for
shareholders through
effectiveness. Such systems and their review are and Control, and the other members are the CEO,
cycles by capitalising on
designed to manage, rather than eliminate, the risk the GFD, the Group Head of Compliance, the Group
the powerful economic,
of failure to achieve business objectives, and can General Counsel, the Group Head of Information
political and social
only provide reasonable and not absolute assurance Technology, the Head of Fund Administration, the convergence trends across
Head of Transaction Processing, the Group Head Emerging Markets.
against material misstatement or loss.
of Human Resources, the Group Head of Finance, Read about Ashmore’s
Within the Group’s over-arching corporate
the Group Head of Distribution and the Head of strategy on pages6-7
governance framework, through which the Board
Internal Audit. These senior management personnel
aims to maintain full and effective control over
share responsibility for risk identification, with each
appropriate strategic, financial, operational and The Group executes its
individual being responsible for day-to-day control of strategy using a distinctive
compliance issues, an internal control framework
risk in their business area. business model, and
has been established, against which the Group is
identifies, evaluates and
able to assess the effectiveness of its risk There are established policies and procedures to
manages the emerging and
management and internal control systems. enable the Audit and Risk Committee and ultimately principal risks inherent in
the Board, through its regular meetings, to monitor this businessmodel.
The Group’s system of internal control is integrated
the effectiveness of the risk management and internal Read about Ashmore’s
into the Group’s strategy and business model and
control systems. These systems cover all identified business model on
embedded within its routine business processes and
pages8-9
internal and external strategic, operational, financial,
operations, and a strong control culture is combined
compliance and other relevant risks, including the
with clear management responsibility and
Group’s ability to comply with applicable laws, The Board has ultimate
accountability for individual controls.
regulations and clients’ requirements. responsibility for the
The internal control framework provides an ongoing Group’s strategy.
The main features of the Group’s risk management Itformally reviews the
process for identifying, evaluating and managing the
and internal control systems are described below, strategy at least annually
Group’s emerging risks and principal risks, and has
and receives updates at
covering the Group’s key policies, specialised
been in place for the year under review and up to the each Boardmeeting.
committees, business processes, verification and
date of approval of the Annual Report and Accounts.
Read Ashmore’s
confirmation activities.
The process is regularly reviewed by the Group’s governance report
Audit and Risk Committee and accords with onpages 82-89
theGuidance.
The Executive Directors oversee the key risks and The Board is responsible
controls and the risk management process on a for risk management,
although it has delegated
day-to-day basis, and there is an organisational
authority to carry out
structure with clearly defined lines of responsibility
day-to-day functions to
and delegation of authority. Executive Directors and
specialised committees,
such as the Group RCC.
Read about Ashmore’s
principal risks on
pages44-45
38 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
The Board is ultimately responsible for risk management including setting
and monitoring the Group’s risk appetite, which determines the types
ASHMORE GROUP
and levels of risk that the Group is prepared to take in pursuit of its
PLC BOARD
strategic objectives. In practice, the Board delegates authority to carry
out day-to-day functions to Executive Directors
The Executive Directors have established a number of specialised
EXECUTIVE DIRECTORS
committees, as described in the corporate governance framework on
page87. One such committee is the RCC, which maintains a sound risk
management and internal control environment and assesses the impact of
the Group’s activities on its regulatory and operational exposures
GROUP RISK AND
COMPLIANCE COMMITTEE
RCC CHAIR Head of Risk Management and Control
– Chief Executive – Group General – Group Head of
Officer Counsel Human Resources
MEMBERS
– Group Finance – Head of IT – Group Head of
Director – Head of Fund Finance
– Group Head of Administration – Group Head of
Compliance – Head of Transaction Distribution
Processing – Head of
InternalAudit
Sheikh Zayed Grand Mosque, Abu Dhabi, United Arab Emirates
Ashmore Group plc Annual Report and Accounts 2022 39
## Risk management structure
RISK MANAGEMENT (CONTINUED)
1. Policies
The Board seeks to maintain a strong To support its risk management and Additionally, the Board and its committees
corporate culture, employing high internal control framework, Ashmore has a are responsible for a number of policies,
standards of integrity and fair dealing number of policy documents, effective at including those listed in the tablebelow:
in the conduct of the Group’s activities, both the Group and/or local business
– Seed capital
compliance with both the letter and the levels, and with which all employees are
– Dividend
spirit of relevant laws and regulations, expected to comply. These policies serve
– Market abuse
andstandards of good market practice as controls and/or mitigants over principal
– Diversity
across Ashmore’sactivities. and emerging risks, and include:
– Group tax
Ashmore’s Code of Ethics and its – Data protection
– Corporate liquidity riskmanagement
Compliance Manual underpin these – Information security
– Remuneration
objectives. Theformer sets out principles
– Anti-bribery and corruption
to guide employees, officers and Directors – Non-audit services
– Conflicts of interest
when conducting a wide range of business
– ESG
practices to act with integrity, and the
– Inducements
Compliance Manual provides employees
– Trading counterparty
with relevant information concerning the
Group’s regulatory environment, to enable – Valuation and pricing
all employees to carry out their – Media covering spokespeople, social
responsibilities in accordance with media and reputationmanagement
applicable laws and regulations and – Contact with regulators
clientguidelines.
– Whistleblowing
– FX and liquidity risk management
2. Committees
The Board has overall responsibility for The Pricing Oversight Committee The RCC is responsible for internal control
riskmanagement, but it has delegated supervises the effectiveness of pricing and for assessing the impact of Ashmore’s
authority to carry out day-to-day functions policies for all investments held in activities on the firm’s regulatory and
to the Executive Directors and specialised Ashmore sponsored funds where a reliable operational exposures.
committees, of which the main ones are pricing source is available. This includes the
The Operating Committee reviews
described below. responsibility to ensure that appointed
the Group’s financial and operating
third-party pricing agents carry out the
The Investment Committees and their performance to focus on delivery of the
agreed pricing policy faithfully and manage
sub-committees meet weekly, monthly or Group’s key strategic objectives and
the pricing sources appropriately.
quarterly depending on investment theme, implementation through the Group’s
and ensure that clients’ funds are managed The Best Execution Committee reviews localsubsidiaries.
in accordance with the agreed investment the effectiveness of trading practices
The Foreign Exchange and Liquidity
strategy and policies. across asset classes and has oversight
Management Committee is responsible
of the regular compliance testing of
The ESG Committee has oversight for the oversight and management of the
tradeexecution.
of Ashmore’s responsible investing Group’s foreign currency cash flows and
framework and focuses on the appropriate The Research Oversight Committee balance sheet exposures, including the
implementation of all elements of this addresses governance, oversight and appropriate level of hedging, and ensures
framework across Ashmore’s corporate ongoing reviews of third-party research the Group meets its liquidity requirements.
strategy and investment management procured byAshmore.
activity. This committee is also relevant
The Pricing Methodology and Valuation
to operational/governance activities.
Committee has oversight of the valuation
methodologies used for clients’ fund
investments that cannot be readily
externally priced.
40 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
2. Committees (continued)
The IT Steering Group ensures that the The GIPS Committee acts as the primary The Disclosure Committee is responsible
Group’s IT strategy is aligned with its strategy decision making body within the Group in for considering the assessment of
and objectives, and has responsibility for relation to any changes to the existing set confidential information, determining
implementing, managing and supporting of composites, and approving the creation whether it constitutes inside information
the Group’s IT systems and projects. of newcomposites. and taking appropriate action in accordance
with prevailing marketregulations.
The Product Committee has responsibility The Awards Committee has delegated
for product governance including the authorities from the Board’s Remuneration
launch, amendment, periodic review and Committee to oversee certain remuneration
closure of funds, including treating matters including employee remuneration
customers fairly oversight. and contracts of employment.
3. Processes
Underpinning the policies and committees, The Audit and Risk Committee and/or Operational/governance
the following business processes are the Board receives regular compliance,
Ashmore has a defined operational
important components of Ashmore’s risk risk and internal audit reports while the
framework and organisational structure
management and internal control framework. Board receives regular financial and other
with appropriate delegation of authority and
management information related to the
segregation of duties and accountability,
Compliance and risk management
control of expenditure against budget and
that have regard to acceptable levels
The Risk Management and Control the making of investments, and for
ofrisk.
function maintains a matrix of principal and monitoring the Group’s business and
The Board reviews and updates its risk
emerging risks, comprising key strategic itsperformance.
appetite statement regularly in line with
and business, client, treasury, investment
The RCC analyses KRI statistics on a
Ashmore’s strategy, business model,
and operational risks, and considers the
frequent and regular basis. The KRIs
financial capacity, business opportunities,
likelihood of those risks crystallising and
indicate trends in the Group’s risk profile,
regulatory constraints and other internal
the resultant impact. Senior management
assist in the reduction of errors and
and external factors.
and the employees responsible for the
potential financial losses and seek to prevent
risks and associated controls/mitigants The Group’s planning framework includes
exposure by dealing with a potential risk
review the matrix quarterly. The inherent a Board approved strategy. The Board
situation before an event occurs.
risk within each business activity is reviews and challenges the strategy
The Compliance function’s responsibilities
identified, with the adequacy and annually, and it receives updates on
and processes include ensuring that the
mitigating effect of existing processes progress against strategic objectives at
Group meets its regulatory obligations;
being assessed to determine a current each scheduled Board meeting.
integrating regulatory compliance
residual risk level for each such activity.
Ashmore is subject to the FCA’s Senior
procedures and best practices within the
Onthe basis that the Group may employ
Managers and Certification Regime,
Group including a compliance monitoring
further mitigants and/or controls over time,
whichrequires allocation of specific
programme that covers all relevant areas of
it defines a target residual risk for each
responsibilities to individuals and the
the Group’s operations and the results of
activity and tracks progress to target
documentation of this through a
which are reported to the RCC; identifying
asappropriate.
management responsibilities map and
any breach of compliance with applicable
individual job descriptions.
regulations; and real-time monitoring of
client mandate investment restrictions. Financial controls are in place to ensure
accurate accounting for transactions,
appropriate authorisation limits to contain
exposures, and reliability of data processing
and integrity of information generated.
Ashmore Group plc Annual Report and Accounts 2022 41
RISK MANAGEMENT (CONTINUED)
3. Processes (continued)
The Group’s Finance function, managed by The Board reviews and approves an annual Ashmore has procedures and thresholds
appropriately qualified accountants, is budget,which is subject to update through governing the appraisal and approval of
responsible for the preparation of the a forecastingprocess. corporate investments, including seeding
financial statements. Executive Directors of funds and purchase of own shares,
Board members receive monthly
and other parties review the statements, with detailed investment and divestment
management information including
and the process includes challenge by the approval procedures, incorporating
accounts and other relevant reports,
Board. TheFinance function works in appropriate levels of authority and regular
whichhighlight actual financial and
conjunction with the Group’s auditors post-investment reviews.
operational performance against budget/
and other external advisers to ensure
forecast and the prior year period.
compliance with applicable accounting and
reporting standards, prevailing regulations
and industry best practice.
4. Verification

| The following activities are intended to | The Internal Audit function undertakes | The Group’s external auditors |
| --- | --- | --- |
| provide the Board with independent | a programme of reviews of systems, | independently review annual control |
| verification of the effectiveness of the | processes and procedures as agreed with | reports pursuant to ISAE3402. |
| Group’s risk management and internal | the Audit and Risk Committee, reporting |  |

The Board, through the Audit and Risk
control systems. the results together with its advice and
Committee, receives half-yearly updates
recommendations to the Audit and
Internal Audit is responsible for reviewing from the Group’s external auditors, which
RiskCommittee.
the Group’s assurance map and providing include any control matters that have come
an independent assessment of assurance The external auditors express an opinion to theirattention.
to the Audit and Risk Committee on an on the annual financial statements and
annual basis. The assurance map review the condensed set of financial
documents the interaction of the first, statements in the half-yearly financial
second and third lines of defence with report, and they also review management’s
regard to the controls and mitigants approach to reporting operating results and
relating to the Group’s principal risks. financial resources.
## Three lines of defence
The Group has three lines of defence against unintended outcomes arising from the risks it faces.
First: Risk ownership
This rests with line managers, whether they are in portfolio management, distribution or support functions.
## st
## 1 The senior management team takes the lead role with respect to implementing and maintaining appropriate
controls across thebusiness.
Second: Risk control
## nd
This is provided by Group Risk Management and Control, including the Group’s principal risk matrix, and Group
## 2
Compliance, including the compliance monitoring programme.
Third: Independent assurance
Group Internal Audit is the third line of defence and provides independent assurance over agreed risk
## rd
## 3 management, internal control and governance processes aswellas recommendations to improve the
effectiveness ofthese processes.
42 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
5. Confirmation
The Board, through the Audit and Risk Principal and emerging risks,
Committee, has conducted an annual
controls andmitigants
review and assessment of the
The table on pages 44 to 45 summarises
effectiveness of the Group’s risk
those principal risks that the Group has
management and internal control systems,
assessed as being most significant
and has not identified any significant
currently, together with examples of
failings or weaknesses during this review.
associated controls and mitigants.
In conducting this review, the Board and/or Reputational and conduct risks are
Audit and Risk Committee has considered common to most aspects of Ashmore’s
periodic reports on compliance and risk strategy and business model.
matters, including reports provided by the
Ashmore’s internal control framework
Internal Audit function, and the annual
considers the assessment and
report on risk management and internal
management of emerging risks alongside
control processes from the Group’s RCC.
its principal risks, current examples of
The Board and/or Audit and Risk
which are:
Committee received these reports
throughout the year and up to the latest – impact of inflation;
practicable date prior to the approval of the – China’s regulatory curbs on private
Annual Report and Accounts. The Board is companies;
satisfied that appropriate planned actions – geopolitical and sanctions risks; and
continue to be effective in improving
– ESG risks including regulatory and
controls as the Group develops, and its
industry focus on potential
overall assessment of the control
greenwashing, legal uncertainty and
framework continues to be satisfactory.
litigation risks arising from the industry’s
differing interpretation of ESG regulation,
and a focus on social matters.
## Longer-term viability statement

| In accordance with Provision 31 of the | Regular management reporting to the | hold to cover its principal risks, |
| --- | --- | --- |
| Code, the Directors have assessed | Board against each risk allows the | including the amounts required under a |
| the current position and prospects of | Directors to assess the effectiveness of | range of severe stress test scenarios. |
| the Group over a three-year period to | the controls in place. The Board reviews |  |

The Group delivers a high level of
June2025, which is consistent with the and updates regularly the Group’s Risk
profitability together with healthy cash
planning and stress testing timeframe Appetite Statement.
flows, and has a strong and liquid
used historically in the Group’s ICAAP.
The Board reviews regular information balance that is able to withstand the
The Group currently plans to use
in respect of the prospects and financial financial impact of the range of adverse
the same timeframe under the
planning of the Group, which includes a planning scenarios. Consequently,
ICARAregime.

|  | three-year detailed financial forecast | theDirectors have a reasonable |
| --- | --- | --- |
| The Directors have made a robust | alongside severe but plausible scenario- | expectation that the Group will be able |
| assessment of the principal and | based downside stress testing. | to continue in operation, meet its |
| emerging risks implicit in the business | Thestress tests include the impact of | liabilities as they fall due and maintain |
| model, alongside the associated controls | negative investment performance, | sufficient regulatory capital over the |
| and mitigants, as presented in more | failure to comply with regulations, | next three years. |
| detail on pages 44 to 45. TheBoard | breach of client mandate guidelines or |  |
| regularly reviews the Group’s strategy | restrictions, a substantial decline in |  |
| and prospects, and management | AuM and ineffective third-party |  |
| presents qualitative and quantitative | services. Consequently, the Board |  |
| assessments of the principal risks to the | regularly assesses the amount of |  |
| Audit and Risk Committee quarterly. | capital that the Group is required to |  |

Ashmore Group plc Annual Report and Accounts 2022 43
RISK MANAGEMENT (CONTINUED)
Principal risks and associated controls and mitigants
Description of principal risks Examples of associated controls and mitigants
Strategic and business risks (Responsibility: the Board)
Long-term downturn in Emerging Markets – Group strategy is reviewed and approved by a Board with relevant
fundamentals/technicals/sentiment, and impact industryexperience
of broader industry changes (including ESG) on – Diversification of investment capabilities and products
Ashmore’s strategy and business model
– Ashmore has a strong balance sheet with no debt
– ESG and specialised committees meet regularly
– The Board reviews diversity data on an annual basis
Market capacity issues and increased competition – Experienced Emerging Markets investment professionals with deep
constrain growth marketknowledge
– Periodic investment theme capacity reviews
– Emerging Markets asset classes continue to grow, increasing the size of
Ashmore’s investable universe
Failure to understand and plan for the potential – Oversight by ESGC, which covers corporate and investment activities, and
impact of investor sentiment, climate change and scoring of all issuers for E, S and G factors
sustainability regulations on product preferences – Head of Responsible Investment and ESG Policy provides updates to
and underlying asset prices (including effects of theBoard
transition to a low carbon economy)
– NZAMI membership and participation in industry working groups to prepare
for net zero commitments
Client risks (Responsibility: Product Committee and RCC)
Inappropriate marketing or ESG strategy and/or – Regular Product Committee meetings review product suitability
ineffective management of existing and potential andappropriateness
fund investors and distributors, including impact of – Experienced distribution team with appropriate geographic coverage
net outflows and fee marginpressure
– Investor education to ensure understanding ofAshmoreinvestment themes
andproducts
– ESGC includes distribution team members
Inadequate client oversight including alignment – Global distribution team appropriately structured for institutional and
ofinterests intermediary retail clients
– Monitoring of client-related issues including a formal complaints
handlingprocess
– Compliance and legal oversight to ensure clear and fair terms of business and
disclosures, and appropriate client communications andfinancial promotions
Treasury risks (Responsibility: CEO and GFD)
Inaccurate financial projections and hedging of – Defined risk appetite, and risk appetite measures updated quarterly
future cash flows and balance sheet – Group FX hedging policy and FX and Liquidity ManagementCommittee
Investment risks (Responsibility: Group Investment Committees)
Downturn in long-term performance – Consistent investment philosophy over nearly 30 years and numerous market
cycles, with dedicated Emerging Markets focus including country visits and
network of local offices
Manager non-performance including (i) ineffective – Funds in the same investment theme are managed by consistent investment
ESG integration (including greenwashing risks), management teams, and allocations approved by investment committees
ineffective cash and liquidity management, similar – Comprehensive policies in place to cover, for example, conflicts,
portfolios being managed inconsistently; and (ii) best execution, market abuse and client order handling
neglect of duty, marketabuse
– Tools to manage liquidity issues as a result of redemptions
includingrestrictions on illiquid exposures and ability to use in
specieredemptions
44 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Description of principal risks Examples of associated controls and mitigants
Operational risks (Responsibility: RCC)
Inadequate security of information including cyber – Information security and data protection policies, subject to annual review
security and data protection including cyber security review
– Cyber Security Working Group meets quarterly
– Employees receive online training
Inadequate BCP – Established BCP process with periodic updates to Group RCC
Inaccurate or invalid data including manual – Dedicated teams responsible for Transaction Processing, FundAdministration,
processes/reporting and ESG data and Pricing and Data Management
– Pricing Oversight and Pricing Methodology and Valuation Committees, with
such valuations subject to external audit
– Annual ISAE 3402 process and report
Failure of IT infrastructure, including inability to – Appropriate IT policies with annual review cycle
support businessgrowth – IT systems and environmental monitoring
– Group IT platform incorporates local offices
Legal action, fraud or breach of contract – Independent Internal Audit function that considers risk of fraud in eachaudit
perpetrated against the Group, its funds – Anti-money laundering and anti-bribery and corruption policies, also required
orinvestments for service providers
– Whistleblowing policy including independent reporting line andBoardsponsor
– Due diligence on all new, and regular reviews of existing, serviceproviders
– Insurance policies in place with appropriate cover
Insufficient resources, including loss of key – Committee-based investment management reduces key man risk
employees, inability to attract employees, and – Appropriate Remuneration policy with emphasis on performance-related pay
impact of remote working, which hampers growth and long-dated deferral of equity awards
or the Group’s ability to execute itsstrategy
– Regular reviews of resource requirements and updates provided to theBoard
– Annual review of remuneration and benefits including benchmarking
againstindustry
– Annual Culture and Conduct report to the Board
Lack of understanding and compliance with global – Regulatory Development Working Group and compliance monitoring
and local regulatory requirements, as well as programme, which covers financial crime risks such as money laundering
conflicts of interest and not treating customers andbribery
fairly, and financial crime, which includes money – Compliance policies covering global and local offices, for example global
laundering, bribery and corruption, leading to high conflicts of interest and inducements policies
level publicity or regulatory sanction
– Anti-money laundering and anti-bribery and corruption policies
– Conduct risk and organisational culture indicators are considered
on a monthly basis by the Group RCC and on an annual basis
by the Board
– ESGC has oversight of regulatory and reporting requirements
– Mandatory compliance training for all employees
Inadequate tax oversight or advice – Dedicated in-house tax specialist and Group Tax policy covering all Group
entities with external advice sought as appropriate
Inappropriate oversight of market, liquidity, credit, – Group risk management policies, reviewed regularly
counterparty and operational risks – Monthly or more frequent reviews of market and credit risk
– Quarterly reviews of principal risks, counterparties and credit risk
Inadequate oversight of Ashmore overseasoffices – GFD has oversight responsibility for overseas offices, and RCC has oversight
of the operating model with annual reviews. Senior employees take local
board/advisory positions
– Dual reporting lines into local management and Group department heads,
with adherence to Group policies
– Local risk and compliance committees held and RCC receives updates
– Internal Audit reviews, and annual governance reviews reported toRCC
Ashmore Group plc Annual Report and Accounts 2022 45
SECTION 172 STATEMENT
## Ashmore’s stakeholders

| Section 172 statement | Section 172 factor Relevant disclosures |  |
| --- | --- | --- |
| In accordance with the Companies Act | The likely consequences | – Company purpose – page 1 |
| (asamended by the Companies (Miscellaneous | ofanydecision inthelong term | – Strategy – page 6 |
| Reporting) Regulations 2018), the Directors |  | – Business model – page 8 |

provide this statement describing how they
The interests of the – People & culture – page 50
have had regard to the matters set out in
Company’s employees – Remuneration report – page 95
section 172(1) of the Act, when performing
– Sustainability – page 68
their duty to promote the success of the
Company. Further details on key actions in this The need to fosterrelationships – Business model – page 8
regard are also contained within the Corporate with clients, suppliers and others
– Business review – page 30
governance report on pages 80 to 89 and the
– Directors’ report – page 128
Directors’ report on pages 128 to 133.
– Sustainability – page 68
The impact of theCompany’s – Sustainability report – page 68
operations on communities and – TCFD – page 54
theenvironment
The Company’s desire to maintain – Risk management – page 38
a reputation for highstandards of – Sustainability – page 68
business conduct
– Audit and Risk Committee report –
page 90
The need to act fairly as between – Stakeholder engagement – page 46
members of the Company – Annual General Meeting – page 133
What matters to this group? engages with current and prospective
clients to learn about their requirements
Clients are central to Ashmore’s business
and build lasting relationships.
## Clients and the focus is understanding clients’
needs, tailoring investment strategies to For example, the objectives, risk parameters
Ashmore is a specialist
suit their needs, and to report back on and portfolio structure for an institutional
Emerging Markets investment
outcomes in a transparent manner. local currency mandate have changed
manager and manages US$64
many times over the past 17 years.
billion of assets as at 30 June Clients’ needs can change over time.
Thestrength of the relationship and total
2022. Ashmore manages a wide Liability profile, applicable regulations, and
AuM managed have grown as the client
range of investment strategies additional targets and objectives in relation
elevated Ashmore to ‘strategic partner’
and products, organised under a to climate change are just a few examples
level, reflecting the trust built up over
number of broad Emerging of matters that impact on clients’
manyyears.
Markets investment themes, for investment objectives. Ashmore seeks to
a diversified institutional and partner with clients to guide them through Ashmore worked with a client and
intermediary retail client base. these changes, and to evolve its services its consultant to build a customised
to meet these changing requirements. ESG-focussed benchmark. This customised
Inthe process, Ashmore builds long-term, benchmark provided a first step to achieve
collaborative, mutually beneficial client the client’s ESG objectives (beta), which
relationships based on trust. was then enhanced through Ashmore’s
## 95%
active portfolio management process
Engagement and outcomes
(alpha), which incorporates additional
AuM from institutional clients
Ashmore’s global distribution team works ESGand carbon footprint reduction
closely with its dedicated portfolio managers considerations when managing ESG
to service clients. The distribution team focused mandates.
46 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
What matters to this group? focus on managing roadshows and other
interactions in-house.
Shareholders require a clear and consistent
## Shareholders communication of Ashmore’s strategy and The Executive Directors meet regularly with
business model, and information on the investors and the rest of the Board is responsive
The support of Ashmore’s
development of Emerging Markets. to shareholder requests for engagement.
shareholders, with an

| appropriately long-term | Shareholders appreciate the strong alignment | The Company held more than 140 virtual and |
| --- | --- | --- |
| investment horizon, | of interests with employees, achieved through | physical meetings during the year. Consequently, |
| isimportant to enable | long-term equity ownership. | the largely institutional shareholder base |
| Ashmore to fulfil its |  | continues to have a good understanding of |

This provides context for regular updates on
strategic growth ambitions. the Group’s strategy and business model.
financial and operational performance, together
with progress towards strategic objectives. Ashmore continues to respond to feedback
by enhancing disclosures relating to ESG
Ashmore’s resilient business model and high
and remuneration.
operating margins underpin the delivery of
## c.40% long-term value to shareholders through Shareholders supported all resolutions at the
marketcycles. 2021 AGM, and Ashmore continues to engage
Equity owned by employees,
with corporate governance teams and proxy
giving strong alignment
Engagement and outcomes
advisers to complement its interactions with fund
ofinterests
Ashmore seeks to build direct relationships with managers, with the objective of ensuring a
shareholders and potential investors through a comprehensive understanding of the Group’s
comprehensive investor relations plan with a strategy and business model.
What matters to this group? with employees. This included a series of
‘meetthe teams’ sessions with the Board,
Ashmore’s employees are a critical asset
chaired by the Non-executive Director for
## Employees and central to delivering value for clients and
workforce engagement, as well as regular
shareholders. Employees’ strong work ethic and
Ashmore’s experienced,
employee newsletters and off-site team building
long-term commitment are key factors enabling
diverse and dedicated
exercises across Ashmore offices.
Ashmore to meet the needs of other stakeholders.
employees are central to
Ashmore has also launched a graduate
the firm’s culture and Ashmore’s employees seek opportunities for
recruitment and mentoring programme to help
underpin its successful career development and training, and to be
foster the next generation of diverse employees.
business model. suitably rewarded with competitive pay and
The Culture and Conduct dashboard gives the
benefits. Employees come from a wide range of
Board clear metrics across a range of employee
cultures and 36 nationalities. Embracing diversity
related topics to ensure trends can be identified
and inclusion is central to Ashmore’s culture.
and steps taken to ensure employee satisfaction,
## 315 Engagement and outcomes performance and accountability is upheld across
the Group.
Following a return to predominantly office-based
Employees across 11 offices
working in September 2021, the Board has
focused on re-establishing face-to-face contact
What matters to this group? Ashmore contributed to charitable investments
within the Foundation’s grant portfolio.
The Ashmore Foundation engages with stakeholders

| Society | to make a positive and sustainable difference to | The Group offset substantially all of its FY2020/21 |  |
| --- | --- | --- | --- |
|  | social and economic issues affecting women, | CO | emissions through The Ashmore Foundation’s |
| Ashmore reviewed its |  |  | 2 |
|  | young people and disadvantaged communities | support for the IDEP Foundation in Indonesia, |  |

engagement with issuers,
in Emerging Markets. Underpinning the work which delivers positive environmental outcomes
and The Ashmore Foundation
of the Foundation is a focus on environmental while simultaneously realising societal and
focused on the needs of post
sustainability and partnering with stakeholders economic benefits for communities.
pandemic recovery and
to create long-term impact through a systems
rebuilding the communities In addition to its engagements with issuers,
change approach.
in which the Group operates, Ashmore is a public signatory to several related
and offsetting the Group’s Ashmore reviewed its ESG engagement with industry initiatives and forms part of a growing
GHGemissions. issuers in its investment universe, on bilateral and universe of responsible investment-minded
collaborative bases, and its engagement with investors. The majority of engagement activities
industry initiatives relating to sustainability issues. with issuers related to the decarbonisation theme
– particularly requests for increased disclosure of
Engagement and outcomes
GHG emissions and climate transition plans.
## 331
The Ashmore Foundation made specific grants to
support organisations delivering emergency relief
ESG engagements with
services at the onset of the humanitarian crisis
228issuers
in Ukraine and the £1.0 million donation from
Ashmore Group plc Annual Report and Accounts 2022 47
SECTION 172 STATEMENT (CONTINUED)
What matters to this group? its committees, and Ashmore’s
senior management holds meetings
As a global business, Ashmore works
with regulators to ensure strong
## Regulators to establish positive relationships with
workingrelationships.
regulators in the jurisdictions in which it
Regulatory oversight of
operates. A constructive and engaging Throughout the year engagement with
Ashmore’s investment
regulatory relationship enables Ashmore the FCA was focused on the impact
management operations and
to meet the growing regulatory of Russia’s invasion of Ukraine and
funds and adherence to global
requirements around the world, related sanctions and ESG related topics.
regulatory standards is a
ensuring it adheres to the rules and The FCA was particularly keen to
critical part of Ashmore’s
standards within each jurisdiction to understand residual and emerging risks
governance framework.
protect clients and shareholders. for clients and how such risks could be
identified and mitigated.
Ashmore manages its business to comply
with relevant international and local Ashmore also engaged in regulatory
requirements and to be able to meet questionnaires on topics of interest such
## 24
the needs of its clients. as IFPR, COVID-19, cyber-crime and
financial crime, and provided opinions to
Regulators overseeing
Engagement and outcomes
Ashmore’soffices help inform regulatory views.
Regulatory matters, including how
changes will impact Ashmore, are
regularly considered by the Board and
What matters to this group? Ashmore’s Supplier Code of Conduct sets
out the high standards and behaviour
Ashmore’s network of third-party suppliers
expected of its suppliers. The Board
## Third-party provides efficiency and scalability to the
approved an updated Supplier Code of
Group’s operating platform. Ashmore
## service providers
Conduct during the year, which enhanced
seeks a strong, mutually beneficial working
Ashmore’s operating platform the Group’s ability to request information
relationship and clear service standards
relies in part on high-quality on GHG emissions and employee diversity
with each of its suppliers.
service providers. statistics. This is in addition to the Supplier
Engagement and outcomes Code of Conduct’s existing focus on ethics,
labour and human rights, health and
Ashmore maintains regular communication
safety and environmental compliance
with its suppliers including through periodic
andsustainability.
service reviews and informal meetings.
## 300+
Ashmore also undertakes periodic due Ashmore continued to conduct due
diligence to ensure suppliers meet the diligence on all new third-party service
Suppliers
standards required. providers, and to review existing providers.
48 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Al-azhar mosque, El-Darb El-Ahmar, Egypt
Ashmore Group plc Annual Report and Accounts 2022 49
PEOPLE & CULTURE
## Established team-based culture
### Ashmore’s distinctive team-based culture is evident across the firm and instilled and
### maintained by factors such as the Group’s performance-based remuneration
### philosophy with an emphasis on long-term equity ownership, a robust compliance
### and risk management framework, and a clear ’tone from the top’ imparted by the
### Board of Directors and senior executives.
Defining and maintaining culture Importantly, while the local asset management
businesses operate independently in terms of
Culture is ultimately a reflection of common beliefs
investment decisions, they share a common
and behaviours, and therefore is of utmost importance
Ashmore’s Remuneration
team-based culture with the Group’s global
in a firm whose employees are one of its key assets.
Committee is guided
operations. Thesame remuneration philosophy is
Ashmore’s culture is appropriate for a specialist by clear principles of
followed by the local offices with significant
asset management firm operating in distinctive discretion and flexibility,
employee equity ownership. alignment with stakeholders,
markets with significant long-term growth potential.
consistency across
Importantly, the culture aligns the interests of
Efficient, team-based operations the Group, and pay for
employees, clients, shareholders and other long-term performance
Ashmore’s management structure is efficient, with a
stakeholders over the longer term; it supports and
Find out more on page 95
relatively flat hierarchy that minimises bureaucracy
reinforces the principal features of the business
and supports effective decision making with
model; and it underpins the achievement of the
clearaccountability.
Group’s strategic objectives.
## The firm’s investment committees oversee the c.40%
Ashmore’s culture has persisted through many
management of client portfolios by investment teams,
market cycles and significant growth in the firm’s of Ashmore’s shares
which operate with collective responsibility. There is are owned by current
operations, including the establishment of global
a ’no star’ fund manager culture, with no individual employees
operating hubs and distribution offices in New York,
responsible for a discrete fund, which instils
Dublin, Singapore and Tokyo, and also the
appropriate behaviour with committee oversight.
development of local asset management operations
in Colombia, Peru, Saudi Arabia, the United Arab
Emirates, India and Indonesia.
Employee age range Length of service

| 18-24 – 3% | < 1 year – 15% | 13-15 years – 8% |
| --- | --- | --- |
| 25-34 –22% | 1-3 years – 21% | 16-18 years – 2% |
| 35-44 – 42% | 4-6 years – 18% | 19-21 years – 1% |
| 45-54 – 24% | 7-9 years – 28% | >22 years – 1% |
| 55+ – 9% | 10-12 years – 6% |  |

50 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
## Nationality and ethnicity
Ashmore is proud to have a diverse workforce
with employees from 36 different countries.

| Nationality | Ethnicity |
| --- | --- |
| North America – 7% | Asian – 29% |
| South America – 20% | Black – 2% |
| Europe – 42% | Hispanic – 18% |
| Asia Pacific – 25% | Middle Eastern / |
| Middle East – 5% | North African – 5% |
| Africa – 1% | Mixed race – 1% |

Other – 1%
White – 34%
No response – 10%
The team-based approach is echoed across
Ashmore’s operations including distribution
Year end headcount
and support functions, and its overseas offices.
2022: 315
Thisresults in a collegiate, collaborative, client-focused
and mutually-supportive culture across the whole firm.
The lack of individual profit centres or operational
11 8 197
silos, together with a culture of shared equity
ownership for all Group employees, means that 102 213
Ashmore’s employees are suitably incentivised to
collaborate in order to achieve appropriate outcomes
113 197
for the business as a whole.
99 2 11
Remuneration philosophy underpins
theculture 112 194
Ashmore has a single Remuneration policy that 98 208
means Executive Directors are remunerated in
substantially the same way as all other Group
117 190
employees. This is an important factor in preserving
95 212
a common and appropriate culture across the firm.
The cap on salaries and capped annual variable
73 180
remuneration pool determined with reference to the
firm’s profits means that employees’ remuneration 83 170
20222021202020192018
is intrinsically linked to the performance of the
business as a whole. A significant proportion of the Global Support
variable pay is in the form of restricted ordinary Local Investment professionals
shares that vest in five years. This serves to
encourage long-term decision making and provides a
strong alignment of interests between employees,
clients, shareholders and other stakeholders.
Accordingly, approximately 40% of Ashmore’s
shares are owned by current employees.
Ashmore Group plc Annual Report and Accounts 2022 51
PEOPLE & CULTURE (CONTINUED)
## Commitment to people
Ashmore is committed to diversity and inclusion, Experienced and diverse workforce
career development, health and safety, workplace
## Ashmore’s employees are experienced, yet ongoing c.20%
benefits and a Remuneration policy that delivers a
career development is important and the firm supports
long-term alignment of interests with clients of Ashmore’s employees
professional development and qualifications that will
andshareholders. have more than a decade
support employees in maintaining and developing
of experience with the firm
their skills and competences. Furthermore, the Group’s
High standards
network of offices around the world allows it to
Ashmore’s long-term strategic success is ultimately
consider providing individuals with different business
dependent on its more than 300 employees and it
and career opportunities.
aims to attract, develop and retain high-calibre people.
At 30 June 2022, Ashmore’s gender split was
Recognising the diverse nature of its operations
asfollows.
across 11 countries, Ashmore’s policies and
– Board: three male and two female Directors.
procedures reflect best practice within each of
these countries and the firm requires its employees – Operating Committee: 10 male and one female.
to act ethically and to uphold clearly the standards – Group employees: 200 male and 113 female.
expected by the Group’s stakeholders including its
In FY2021/22, Ashmore launched its first graduate
clients, regulators, shareholders and broader society.
recruitment programme in its London office, which
By way of oversight, the Board receives periodic
is focused on front office roles and will support the
culture and conduct updates.
ongoing development of a diverse workforce
over the longer term. The first group of graduates
Long-term employee loyalty
will join in September 2022.
The effectiveness of Ashmore’s commitment to and
ongoing investment in its employees is demonstrated Remuneration linked to ESG factors
by their loyalty to the firm. As a consequence of the
As described in the Remuneration report, the Directors’
team-based culture and performance-based and
performance scorecards include a range of qualitative
equity-focused remuneration philosophy, Ashmore
and quantitative ESG factors. Subject to the role,
enjoys relatively low levels of unplanned staff
employees’ annual performance appraisals will also
turnover (FY2021/22: 10.5%).Thismeans that nearly
include sustainability measures.
two-thirds of Ashmore’s staff have been with the
firm for more than fouryears, and approximately
20% joined the firm more than a decade ago.
## Diversity

| Diversity means many things to Ashmore, | Ashmore’s focus on Emerging Markets | profile of the employee base must |
| --- | --- | --- |
| but the unifying thread is that the | and its network of 11 offices with local | occur over time as succession occurs, |
| diverse characteristics of markets, | employees mean that it is diverse from | new roles arise, and replacements are |
| clients, investment strategies and | ethnicity, gender and nationality | recruited based on merit and objective |
| employees are all positive factors | perspectives, with 67% of employees | criteria without any quotas set. |
| that help to underpin the Group’s | from diverse backgrounds (defined as |  |

Within this context, Ashmore seeks
long-term success. being not white or male). One-third of
to ensure that candidate pools are
the Group’s employees and 50% of the
assembled wherever possible to
Focus on employees
Board directors are female. Recognising
include candidates of different gender,
Employee diversity can be considered that the financial services sector has
ethnic and social backgrounds.
through many lenses, not just gender historically been a male-dominated
To ensure diversity characteristics are
and ethnicity, but also characteristics industry, the firm is keen to promote
understood and, where necessary,
such as experience, skills, tenure, gender diversity within both the
acted upon, Ashmore maintains a
age,disability and sexual orientation. industry and its own employee base.
comprehensive view of the profile of its
The diverse nature of a firm can help to
However, Ashmore is a relatively small
employees, based on self-identified
reduce the risks of ‘groupthink’ and
organisation of approximately 300
factual data. The ’diversity dashboard’
promote an appropriate culture that
employees, with a long-standing
isreported periodically to the Board,
supports the achievement of
remuneration philosophy that rewards
itsRemuneration Committee and the
strategicobjectives.
performance and engenders long-term
Group’s Risk and Compliance Committee.

| Ashmore’s culture is a meritocracy | employee loyalty. It does not have |
| --- | --- |
| that values openness, fairness and | large-scale recruitment programmes. |
| transparency and the Group is | Therefore, while Ashmore has become |
| committed to developing and | more diverse over the past 12 months, |
| retaining a diverse workforce. | any significant desired changes in the |

52 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
### “ Ashmore is committed to providing
### equal opportunities and seeks to ensure
### that its workforce reflects, as far as is
### practicable, the diversity of the many
### communities in which it operates.”
Jakarta, Indonesia
Ashmore Group plc Annual Report and Accounts 2022 53
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES
## Managing risks and opportunities
### Ashmore is a supporter of the TCFD and welcomes the recent incorporation by the FCA of the
### recommended climate-related disclosures into its Listing Rules and its reporting requirements for
### financial services companies.
Ashmore recognises the responsibilities it has both as a premium- Comply or explain framework
listed company on the London Stock Exchange and as a specialist
Ashmore Group plc
Emerging Markets investment manager acting as a steward of
In accordance with the FCA’s Listing Rules for premium-listed
clients’ capital. It explicitly considers climate-related risks and
companies, specifically LR 9.8.6R(8) and LR 9.8.6BG, Ashmore has
opportunities in its operations and investment processes as
made disclosures consistent with the 11 TCFD recommendations,
recommended by the TCFD framework.
including Sections C and D of the TCFD 2021 Annex, with the
Environmental challenges, and specifically the effects of exception of recommendation 3 (identification of risks and
climate change, can be acutely felt by the Emerging Markets opportunities), where the medium-term quantitative impact is
countries and companies in which Ashmore invests and currently uncertain, and recommendation 5 (scenario modelling),
operates. Therefore, Ashmore understands the challenges faced where a more detailed approach may be taken, including additional
by emerging economies and the environmental trade-offs that scenarios, as data and models evolve. Ashmore intends to undertake
can have a greater impact on emerging nations compared with further quantitative analysis in order to make progress towards
developed countries. Investors from both developed and emerging compliance with these recommendations over the next 12months.
economies need to invest in Emerging Markets to finance
Investment management
sustainable growth.
Furthermore, in accordance with its timetable, Ashmore has made
satisfactory progress towards complying with the FCA’s new rules
regarding the implementation of the TCFD recommendations and
recommended disclosures for asset managers under the FCA’s
new ESG Sourcebook, for which the first public disclosures are due
by 30 June 2023.
TCFD recommendations
### Governance Strategy Risk management Metrics and
### targets
Disclose the organisation’s Disclose the actual and Disclose how the Disclose the metrics and
governance around climate- potential impacts of climate- organisation identifies, targets used to assess
related risks and related risks and opportunities assesses, and manages and manage relevant
opportunities. on the organisation’s climate-related risks. climate-related risks and
businesses, strategy, and opportunities where such
financial planning where such information is material.
information is material.

| Recommended |  | Recommended |  | Recommended |  | Recommended |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
| disclosures |  | disclosures |  | disclosures |  | disclosures |  |
| 1. Describe the board’s |  | 3. Describe the climate- |  | 6. Describe the organisation’s |  | 9. Disclose the metrics used |  |
|  | oversight of climate- |  | related risks and |  | processes for identifying |  | by the organisation to |
|  | related risks and |  | opportunities the |  | and assessing climate- |  | assess climate-related |
|  | opportunities. |  | organisation has identified |  | related risks. |  | risks and opportunities |
|  |  |  | over the short, medium, |  |  |  | in line with its strategy |
| 2. Describe management’s |  |  |  | 7. Describe the organisation’s |  |  |  |
|  |  |  | and long term. |  |  |  | and risk management |
|  | role in assessing and |  |  |  | processes for managing |  |  |

process.
managing climate-related 4. Describe the impact climate-related risks.
risks and opportunities. of climate-related 10. Disclose Scope 1, Scope
8. Describe how processes
risks and opportunities 2 and, if appropriate,
for identifying, assessing,
on the organisation’s Scope 3 GHG emissions
and managing climate-
businesses, strategy, and the related risks.
related risks are
and financial planning.

|  |  | integrated into the | 11. Describe the targets used |  |
| --- | --- | --- | --- | --- |
| 5. Describe the resilience of |  | organisation’s overall |  | by the organisation to |
|  | the organisation’s strategy, | riskmanagement. |  | manage climate-related |
|  | taking into consideration |  |  | risks and opportunities |
|  | different climate-related |  |  | and performance |
|  | scenarios, including a 2°C |  |  | againsttargets. |

or lower scenario.
54 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Contributing to the climate transition
Ashmore recognises that it is important for the financial sector to need to balance the low-carbon transition with improved access to
contribute to climate action (Sustainable Development Goal 6), and energy and where the need for funding is paramount. Ashmore, as
the related transition to net zero. Furthermore, the commitment by a specialist Emerging Markets asset manager, is ideally placed to
the United Kingdom, where Ashmore is headquartered, to a net manage those investment flows and ensure a competitive return
zero economy has been considered as part of these disclosures. on capital, in both public and private markets.
Toachieve the economic transformation required to deliver
The main framework for asset managers in this regard is NZAMI,
‘netzero by 2050’, financial flows must become aligned with a
which Ashmore joined in July 2021. Ashmore recently submitted
low-carbon economy and incentivise climate mitigation and adaption.
its NZAMI interim target, and this is expected to be the main
This is particularly the case in Emerging Markets where there is a
mechanism by which Ashmore addresses climate change impact.
Progress in FY2021/22 in relation to climate action:
The Ashmore Foundation GHG emissions Net Zero Asset Managers
Initiative

| In addition to delivering impactful | While the return of business travel |  |
| --- | --- | --- |
| social, economic and environmental | and use of the Group’s offices | Ashmore joined NZAMI in |
| outcomes, TheAshmore | during FY2021/22 has contributed | July2021 and recently submitted |
| Foundation’s partnership with IDEP | to an increase in the Group’s GHG | its interim target. |
| Foundation in Indonesia will also | emissions compared with the |  |
| offset substantially all of Ashmore’s | previous year, the Group remains |  |
| Scope 1, 2 and 3 GHG emissions | committed to offsetting these |  |
| for FY2020/21. The initiatives, | emissions in an effective and |  |
| including tree planting, are ongoing | socially responsible manner |  |
| and IDEP Foundation expects to | through projects overseen by |  |
| complete activities during 2022 to | TheAshmore Foundation. |  |

deliver fully the offset targets.
Climate Action 100+ Climate reporting Emerging Markets focus
developments

| The Group’s corporate debt team |  | Ashmore published a policy position |
| --- | --- | --- |
| participated in a second | Ashmore developed GHG emission | paper titled “Seven policy proposals |
| collaborative engagement through | reporting for its corporate and | to meet the Paris Agreement |
| Climate Action 100+. | sovereign investments, which will | objectives”, highlighting that the |
|  | be made available to clients to aid | contrasting emissions profile of |
|  | them in their own TCFD reporting. | Developed and Emerging Markets |

had to be considered, and that
equitable carbon trading and subsidy
policies would incentivise greater
private sector involvement in
funding climate action.
Principal activities planned in FY2022/23:

| The Ashmore Foundation | Ensure TCFD reporting for | Further explore | Continue working |
| --- | --- | --- | --- |
| will research and identify | Ashmore’s investment | climate-related | with relevant clients |
| projects to seek to | management activities | forward-looking | to mutually agree |
| offset the Group’s | is aligned with the | metrics. | de-carbonising |
| FY2021/22 emissions. | FCA’s ESG Sourcebook |  | strategy and targets. |

requirements by
publication deadline
of 30June2023.
The following pages present Ashmore’s disclosures in relation to the TCFD framework. Where appropriate and to aid
understanding, the disclosures are split between the Group’s operational activities and its investment management activities.
Ashmore Group plc Annual Report and Accounts 2022 55
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## Summary
Governance
1. The Board’s oversight of In line with Ashmore’s corporate governance framework, Ashmore’s Board has delegated
climate-related risks and day-to-day responsibility of climate-related issues to Ashmore’s Executive Directors and the
opportunities Group’s specialised committees. TheBoard is updated at least annually on the Group’s
Responsible Investment Strategy, which includes climate-related topics.
2. Management’s role in The ESGC is the primary forum for responsible investment matters and is chaired by the CEO
assessing and managing with representatives from across the Group. The assessment and management of ESGrisks and
climate-related risks opportunities within investment processes, including those related to climate, is also monitored
andopportunities through Ashmore’s investment committees.
Strategy
3. Climate-related risks Over the short term, medium term, and long term, Ashmore has identified limited direct exposure
and opportunities identified to material operational climate-related risks. Identified transition risks include the evolving
over the short, medium, regulatory environment, with opportunities being the need for capital to flow to Emerging Markets
andlong term to fund the low-carbon transition.
The consideration of transitional and physical climate-related risks forms part of Ashmore’s
ESG assessment – an integral part of the investment process.
4. The impact of climate-related The identified climate-related issues outlined above have not significantly affected Ashmore’s
risks and opportunities on business, strategy, and financial planning. The main identified impact is that relating to the
businesses, strategy, and development of investment solutions to respond to changing regulation and demand.
financial planning
The extent to which climate-related issues, including the transition to a lower-carbon economy,
impacts individual investments is assessed through the ESG scorecard.
5. The resilience of Ashmore’s Ashmore concludes that its operational strategy will prove to be resilient if faced with
strategy considering different more severe effects of climate change. Ashmore continues to examine ways in which
climate-related scenarios climate-related scenario analysis can be used to augment the Board’s review and challenge
of Ashmore’s strategy and to assist in the ongoing development of the Group’s investment
managementcapabilities.
56 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT

GOVERNANCE

FINANCIAL STATEMENTS

|  Risk management  |   |
| --- | --- |
|  **6. Process for identifying and assessing climate-related risks** | Ashmore's internal control framework provides an ongoing process for identifying, evaluating, and managing the Group's emerging and principal risks, and identifies associated controls and mitigants. This includes Ashmore's Principal Risk Matrix, which explicitly identifies climate risk. For Ashmore's Investment Management function, climate-related risks are identified and assessed as part of the ESG scorecard.  |
|  **7. Process for managing climate-related risks** | Ashmore's principal risk matrix includes climate-related risks and associated controls and mitigants, and it is challenged on a quarterly basis by both the RCC and the Board's Audit and Risk Committee. The primary tool for managing issuers' climate-related risks is the ESG scorecard, where an issuer's ESG scores are reassessed at least annually. Ashmore also manages climate-related risks through its engagement efforts with sovereign and corporate issuers on a range of climate-related topics, both directly and in collaboration with other stakeholders.  |
|  **8. Integrating the identification, assessment, and management of climate-related risks into the overall risk management** | Climate-related risks are considered in a similar manner to other emerging or principal risks. The identification, assessment, and management of such risks are integrated fully into Ashmore's robust risk management culture and its internal control framework.  |
|  Metrics and targets  |   |
|  **9. Metrics used to assess climate-related risks and opportunities** | Ashmore uses a combination of qualitative and quantitative approaches to assess climate-related risks and opportunities, encompassing both corporate and investment activities. These will continue to evolve in response to evolving client and regulatory requirements and industry best practice. Quantitative metrics include GHG emissions and an internal carbon price.  |
|  **10. GHG emissions** | The Group reports its Scope 1, 2 and 3 GHG emissions. In FY2021/22, the total was 653.9 tCO_{2}e. GHG emissions are now available to Ashmore's clients for individual funds and mandates.  |
|  **11. Climate targets** | The principal target for FY2021/22 was to offset the Group's prior year GHG emissions via The Ashmore Foundation, resulting in the offset of 203 tCO_{2}e. Ashmore joined NZAMI in July 2021 and the initiative provides the primary target-setting framework for Ashmore's investment management function. The equity and corporate debt assets aligned to net zero by 2050 will be managed to a portfolio decarbonisation reduction target of at least 22% by 2025 and at least 49% by 2030.  |

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## Governance
As the regulatory environment evolves, Ashmore will continue to adhere to the TCFD’s principles and to satisfy the requirements of its
regulators and other relevant bodies as they relate to the assessment, management and disclosure of climate-related risks and opportunities.
1. Describe the Board’s oversight of climate-related risks and opportunities.
Ashmore Group plc has a premium listing on the London Theconsideration of climate-related issues as they relate to
Stock Exchange with a unitary Board of Directors. The Board guiding strategy, major plans of action, risk management
has ultimate responsibility for the Group’s strategy and policies, annual budgets, and business plans is guided by the
maintains full and effective control over appropriate strategic, Responsible Investment Strategy presented to the CEO,
financial, operational and compliance matters, including extracts of which are also included and discussed in the
material climate-related issues through its corporate annual update to the Board.
governance framework. This framework provides for regular
The consideration of climate-related issues is a core part
reporting and other updates to the Board, through which it is
of the investment framework applied by Ashmore’s
able to oversee progress against the Group’s targets,
investment teams and consequently it is a component of
including those relating to climate issues.
their performance objectives. The oversight, monitoring,
Hence, overall responsibility for climate-related risks and and implementation of a range of responsible investment
opportunities lies with the Board, however on a day-to-day activities also forms part of the performance objectives
basis the authority is delegated to the Executive Directors and of senior management, with ESG matters being one of the
the Group’s specialised committees. The Board’s annual areas of performance considered by the Remuneration
review and challenge of Ashmore’s strategy explicitly includes Committee when determining variable remuneration on
areas of focus relating to ESG and responsible investment. an annual basis for the Executive Directors.
It is important to note that from an operational perspective,
physical climate risk has limited material impact on an asset
management business, instead primarily relating to
transitional climate risks, which may impact the Group’s
products, and costs of business travel and office use.
2. Describe management’s role in assessing and managing climate-related risks andopportunities.
The Board has delegated certain authorities to the Executive From an investment management perspective, Ashmore’s
Directors who in turn have formed several specialist investment committees are ultimately responsible for the
committees with terms of reference to carry out the functions management of client portfolios. Through the oversight by
delegated to them. One such specialised committee is the these committees, the Group has integrated the assessment
ESGC, which is chaired by the Group CEO and with members and management of ESG risks and opportunities, including
drawn from across Ashmore’s investment, distribution, risk, those related to climate, into all its investment processes,
legal, operations and other support functions. This ensures including both global and local investment platforms and all
that responsible investment topics are appropriately investment themes. Reports presented both at the ESGC and
understood, assigned to, and discussed by all relevant areas the relevant investment committees ensure the effective
of the firm. monitoring of ESG-related risks.
The ESGC has oversight of relevant climate-related issues and The processes described in the Risk management section
the Group’s Head of Responsible Investment and ESG Policy, incorporate how senior management is informed about
or a delegate, provides updates to the Board. The Board is climate-related issues and their assessment and management
informed about goals and targets designed to address of such risks faced by the Group.
climate-related issues and these are consequently reported
on the following year. Additionally, ESGC members provide
the Board, its Audit and Risk Committee and the RCC with
multiple formal points of contact throughout the year.
58 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
## ESG in the context of Ashmore’s governance structure
PLC BOARD OF
DIRECTORS
PLC EXECUTIVE
DIRECTORS
PLC AUDIT AND
ESG COMMITTEE
RISK COMMITTEE
LOCAL OFFICE RESPONSIBLE
INVESTMENT FORUM
Alexander Nevsky Cathedral, Old Town Tallinn, Estonia
Ashmore Group plc Annual Report and Accounts 2022 59
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## Strategy
3. Describe the climate-related risks and opportunities the organisation has identified over the short, medium and long term.
Ashmore Group plc Over the medium term, there will be further opportunities to
influence perceptions and methods of measuring some of the
Ashmore considers material climate-related risks and
factors commonly linked to climate change. For example,
opportunities over the short term (up to three years, which
investors typically view GHG emissions from a producer
is consistent with the planning horizon under the Group’s
perspective, which is to the detriment of Emerging Markets
internal capital management processes), medium term
that serve as manufacturing bases, whereas a consumer
(up to 10 years), and the long term (beyond 10 years).
perspective would shift the emphasis to patterns of behaviour
The process includes consideration of climate-related risks
in developed markets. Developing countries will require
and opportunities through the Group’s internal control and risk
investment capital to achieve domestic and international
management framework, the activities of the ESGC including
ambitions related to climate change. The first phase of
the Local Office Responsible Investment Forum, the investment
Ashmore’s corporate strategy, which explicitly targets higher
committees, and the Group’s financial planning.
allocations to Emerging Markets, and therefore a greater
Over the short and long term, to the extent possible,
focus by investors on the impact of, and action required to
Ashmore has identified limited direct exposure to material
mitigate, climate-related risks, means that more capital should
operational climate-related risks. The medium-term opportunity
continue to flow to Emerging Markets over time.
relating to capital flows has been identified, but the quantitative
Over the long term, the most prominent climate-related risk
impact relating specifically to climate change is inherently
that could have a material financial impact on Ashmore is
uncertain and hence Ashmore does not claim to be fully
failure to deliver on its net zero commitment.
compliant with this recommendation.
As it relates to material physical climate-related risks, the
Over the short term, a prominent climate-related risk that
impact of these is considered to be limited to Ashmore in the
could have a material financial impact on Ashmore is the
short term due to its office-based asset management model.
evolving climate-related regulation and industry developments,
However, given its global business model, during the year,
potentially leading to duplication, contradiction, and diminishing
Ashmore conducted a review of the physical climate-related
effectiveness of initiatives. Ashmore remains focused on
risks faced by eight of its 11 offices. These include the
actions that support its purpose to deliver long-term investment
potential for more frequent serious weather events, flooding
performance for clients and to generate value for shareholders
and sustained higher ambient temperatures leading to
through market cycles. While evolving regulation poses
increased demand for airconditioning.
implementation risks, it also creates opportunities for an
active manager to develop new products and strategies
Investment management
to fulfil clients’ investment objectives. In line with client
As they relate to Ashmore’s investment management
preferences, and through its Product Committee, Ashmore
function, i.e. the Group’s products and services, transitional
will continue to seek opportunities to manage capital to
and physical risks and opportunities form an integral part of
deliver appropriate investment outcomes, including those
the investment process, factored into Ashmore’s investment
related to climate risk. Since Ashmore invests across fixed
strategies through its ESG scorecard.
income, equity and alternatives asset classes, and its
investment universe encompasses the full range of diversified
Emerging Markets, these opportunities are assessed on a
broad basis.
60 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
3. Describe the climate-related risks and opportunities the organisation has identified over the short, medium and long term.
(continued)
Identified climate-related risks and opportunities for Ashmore Group plc
Risks Opportunities
Transition to – Evolving regulatory landscape & reporting – Product development (S)
low-carbon world requirements (S) – Increased capital allocations to
– Changes in consumer preferences (M) EmergingMarkets (M)
– Market-wide climate-related shocks (S)
– Net-zero delivery (L)
Physical impacts – Weather events (S)
of climate change – Flooding (S)
– Higher temperatures (S)
Timeframes considered: S = short term; M = medium term; L = long term
Identified climate-related risks and opportunities for Ashmore’s investment management activities
Risks Opportunities
Transition to – Policy and regulation: Policy changes – Innovative technologies: The adoption of
low-carbon world attempting to constrain actions that contribute technological improvements and innovations
to the adverse effects of climate change or that that support the transition to the low-carbon
seek to promoteadaptation. economy and their ability to improve
– Stranded assets: Assets devaluing due to effectiveness and ultimately market demand.
climate change action. – Electrification
– Changes in consumer behaviour: The impact – Resource efficiency: Efficiencies such as
of policy and technology changes and shifts in energy and waste management and the use of
supply and demand for products, services, new technology result in direct cost savings to
andcommodities. operations over the medium and long term.
– Reputation: The perception of a company in – Energy source: Moving to low-emission
contributing to or detracting from the transition energy sources could see organisations save
to a low-carbon economy. on annual energy costs.
– Litigation risks: Claims brought by property – Products and services: Innovations in
owners, municipalities, NGOs, insurers, products and services may enable improved
andshareholders. competitive advantage.
– Markets: Organisations that diversify
their activities may be in a position to
access new markets and develop new
business partnerships.
Physical impacts – Acute: Event-driven such as increased severity – Adaption and resilience: In responding to
of climate change of extreme weather events. climate change, organisations may develop
– Chronic: Longer-term shifts including new processes, systems and products that
temperature changes, rainfall, and variations protect them from adverse impacts.
in weather patterns.
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## Strategy (continued)
4. Describe the impact of climate-related risks and opportunities on the organisation’s businesses, strategy and
financial planning.
Ashmore Group plc issues on Ashmore’s financial performance has beenidentified.
Furthermore, over the medium to longer term, Ashmore’s
The identified climate-related issues outlined above have
business model provides for significant mitigating factors,
not significantly affected Ashmore’s business, strategy,
such as flexibility afforded through being a leasehold tenant
and financial planning. From an operational standpoint this is,
rather than landlord and the potential for remote working,
as identified above, less material. Energy prices could pose a
together with regional or national government commitments
financial risk related to operational running costs, but it is not
to address climate-related challenges.
considered a material risk at this time. The main area of
impact relates to the Group’s products and services with
Investment management
opportunities for its investment management activities.
The extent to which climate-related risks and opportunities,
Ashmore’s investment processes currently incorporate
including the transition to a lower-carbon economy,
investment solutions that respond to the evolving regulatory
impacts individual investments is assessed through the
and industry requirements as they relate to climate change,
ESGscorecard.
including establishing net zero capabilities. For existing client
portfolios, an assessment of the impact of climate-related The scoring guidelines require score deductions to be applied
risks and opportunities is made using the Ashmore ESG where environmental or climate-related issues are identified
scorecard, as described below. e.g. due to the impact and materiality of Scope 3 GHG
emissions. Ashmore establishes whether the company has
Ashmore will assess and act upon climate-related issues that
policies in place to mitigate such emissions (e.g. through
might affect its planning processes, as appropriate, through
supply chain audits, end of life product care, increasing
the Group’s established processes including the Operating
product lifespan, local procurement policies, customer
Committee, Investment Committees, the ESGC, the Product
engagement, and/or the investment strategy) and targets
Committee, and via the Board’s regular strategy reviews.
to estimate and reduce such emissions.
Thus far, no direct and material impact of climate-related
Major categories of potential financial impact
Financial performance Financial position
Revenues: The need for private capital to contribute to Assets and liabilities: Ashmore is conscious of how
addressing climate mitigation and adaption can potentially climate-related risks may impact its assets and liabilities
act as an opportunity for Ashmore. and includes this consideration in its assessments.
Expenditures: Ashmore’s flexible cost structure is Capital and financing: Climate-related risks have been
well placed to accommodate its required response to considered unlikely to affect Ashmore’s capital, and it
climate-related issues. has nodebt.
Ashmore’s Emerging
Markets investments and
worldwide network
Emerging Markets invested
Ashmore presence
62 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
5. Describe the resilience of the organisation’s strategy, taking into consideration different climate-related scenarios,
including a 2°C or lower scenario.
Ashmore Group plc The International Energy Agency’s Net Zero
Transition risks are considered as part of the Group’s Emissions by 2050 Scenario
riskmanagement and internal control framework, and do A scenario is a coherent, internally consistent, and plausible
not currently pose a significant threat to Ashmore’s overall description of a possible future state of the world. The NZE
strategy. Similarly, from a Group perspective, the review scenario highlights the significant changes required to the
of physical risks to offices concluded that the risks are unlikely global energy sector in order to achieve net zero by 2050,
to have a material impact in the short term. Over the medium e.g. deployment of available clean energy technologies
to longer term, there are significant mitigating factors, such as between 2020 and 2030 and a need for clean energy
flexibility afforded through being a leasehold tenant rather then innovation. The IEA stresses the need for a rapid shift away
landlord, the potential for remote working and regional or national from fossil fuels, including the phasing out of all unabated
government commitments to address climate-relatedchallenges. coal and oil power plants by 2040. The Agency highlights the
benefits of such a transition, including universal access to
Therefore, Ashmore concludes that its strategy will prove to
clean energy and the significant number of new jobs such a
be resilient if faced with more severe effects of climate
transition would create. As electricity becomes the core of
change. The Group will keep its position under review and
the energy system, demand for batteries, hydrogen-based
where appropriate will also consider additional scenario
fuels, hydropower etc. will significantly increase. By 2045,
analysis tools to complement these reviews including, as data
the scenario envisages that most cars would be running on
and models permit, the consideration of a transition to a
electricity or fuel cells and aircraft largely relying on biofuels
low-carbon economy consistent with a 2°C or lower scenario.
and synthetic fuels. It paints a picture of a cleaner, healthier
Ashmore intends to make progress in this area over the next
2050 where the global energy sector relies largely on
financial year.
renewables, but stresses that to achieve this “a complete
Investment management transformation of the global energy system” is required.
Ashmore continues to examine ways in which climate-related
scenario analysis can be used to assist in the ongoing
development of the Group’s investment management
capabilities. The primary socioeconomic scenario that
Ashmore will consider is the IEA’s Net Zero Emissions by
2050 Scenario, designed as a roadmap for the global energy
sector. As Ashmore invests exclusively in Emerging Markets
it was important to consider a scenario that recognises the
different stages of economic development of countries and
regions, and the importance of ensuring a just transition.
Ashmore Group plc Annual Report and Accounts 2022 63
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## Risks and opportunities
Ashmore’s established and effective risk management framework and investment management capabilities provide it with the necessary
processes to identify, assess and manage climate-related risks and opportunities pertaining both to its business and to client portfolios.
6. Describe the organisation’s processes for identifying and assessing climate-related risks.
Ashmore Group plc Investment management
Ashmore’s internal control framework, described in detail in For Ashmore’s investment management function, the primary
the Risk management section, provides an ongoing process tool used to identify, assess, and monitor climate-related
for identifying, evaluating, and managing the Group’s emerging risks and opportunities is the Ashmore ESG scorecard.
and principal risks, and identifies associated controls and Thescorecard is applied consistently across the Group,
mitigants. The Board’s Audit and Risk Committee regularly whichallows for a standard approach to be taken to manage
reviews the framework. Ashmore’s Principal Risk Matrix material climate-related risks across investment strategies.
explicitly identifies climate risk and ensures senior management When identifying and assessing climate-related risks and
is made aware of, and acts on, such risks. For example, this opportunities in the ESG scorecard, the materiality of the risk
includes the failure to understand and plan for the potential or opportunity is considered through a combined quantitative
impact to the business that investor / business sentiment, and qualitative process. This review includes the consideration
climate change, and sustainability regulations may have on of the nature and scale of the identified risks and rates the
product preferences and on underlying asset prices which risk on a scale from 1-5.
may be affected by the transition to a low-carbon economy.
Another avenue for identifying climate-related risks is through
In addition, the emerging regulatory requirements for asset Ashmore’s engagement efforts with sovereign and corporate
managers relating to climate change (and ESG more issuers. Ashmore’s commitment to engaging with industry
generally) is a principal risk for the Group. This was previously bodies and Emerging Markets issuers on climate-related
identified and is monitored through the ESGC’s standing topics to identify and manage risks and opportunities is also
agenda item covering regulatory updates. reflected in its membership of the Climate Action 100+
initiative and NZAMI.
64 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
7. Describe the organisation’s processes for managing climate-related risks.
Ashmore Group plc The ESG scorecard analysis for any given issuer is reassessed
at least annually. Importantly, ESG risks and opportunities
Climate-related risks and associated controls and mitigants
are not considered in a silo, rather the investment committee
are reviewed and prioritised as part of Ashmore’s Principal
in each asset class oversees ESG analysis in a cohesive
Risk Matrix and, where appropriate, challenged on a quarterly
manner alongside fundamental macroeconomic, financial
basis by both the RCC and the Audit and Risk Committee.
performance and credit analysis for sovereign and corporate
For example, climate change and the failure to understand
issuers. The analysis is based primarily on proprietary
and plan for the potential impact to the business that investor
research, including engagement with issuers to identify
/ business sentiment, climate change and sustainability
potential investment opportunities. Additionally, the investment
regulations may have on product preferences and on
committees use third-party data as an input to the ESG
underlying asset prices that may be affected by the transition
scoring process.
to a low-carbon economy is mitigated by a combination of
Ashmore also manages climate-related risks through its
policy setting and governance by the ESGC. At Group level,
engagement efforts. Investment teams engage with
this risk is managed in relation to Ashmore’s GHG emissions,
sovereign and corporate issuers on a range of topics,
which are offset via The Ashmore Foundation.
bothdirectly and in collaboration with other stakeholders.
Investment management Thisincludes efforts to encourage better climate-related
disclosure as this information is crucial for informed
Ashmore advises clients and implements solutions in their
investment decision making and has been identified as an
investment management mandates to help them consider
evolving area with scope for improvement by Emerging Markets
climate-related risks, for example through decarbonisation
issuers. As a signatory to the TCFD since January 2020,
efforts. At the investment management level, this is
Ashmore also promotes TCFD-aligned climate disclosures
expressed in the dedicated ESG funds, for example by
by the companies in which it invests.
excluding oil and other fossil fuel investments. In addition,
the Group’s membership and participation in NZAMI in
preparation for net zero commitments influences both
Group and investment management activities.
8. Describe how processes for identifying, assessing and managing climate-related risks are integrated into the
organisation’s overall risk management.
Climate-related risks are considered in a similar manner to For example, within Ashmore’s Principal Risk Matrix, the
other emerging or principal risks, since they may affect different aspects of climate risks would impact distribution
various aspects of the Group’s strategy, business model, and client oversight activities, integration within investment
clients, and operational and financial performance. In this management processes as well as regulatory requirements
context, the identification, assessment, and management of and the Group’s overall reputation. These are considered both
such risks are integrated fully into Ashmore’s robust risk on a standalone basis as well as in combination to ensure
management culture and its internal control framework. related risks are assessed, managed and, where appropriate,
mitigated through the development of internal controls
andprocesses.
Ashmore Group plc Annual Report and Accounts 2022 65
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## Metrics and targets
Ashmore uses a combination of qualitative and quantitative approaches to assess climate-related risks and opportunities, encompassing
both corporate and investment activities. These will continue to evolve in response to changing client and regulatory requirements and
industry best practice.
9. Disclose the metrics used by the organisation to assess climate-related risks and opportunities in line with its
strategy and risk management process.
Ashmore Group plc with third-party providers and issuers to broaden coverage.
Today, the main metrics used are GHG emissions, stranded
The main climate-related metric used by Ashmore is its
asset data and the internal carbon price. Ashmore will
operational GHG emissions, which are modest and are
continue to evaluate other climate-related metrics, in
disclosed in accordance with the Act and the SECR
particular forward-looking metrics, and consider adoption of
regulation. Thelatest disclosures can be found in the
such metrics as industry convergence materialises.
Directors’ report.
The main metrics used by portfolio managers when
As part of the process to offset its GHG emissions, Ashmore
completing the ESG scorecard to assess climate-related risks
sets an internal carbon price based on the three-month rolling
and opportunities for corporate issuers are GHG emissions
average market price of the first carbon futures contract
(Scope 1 and 2 as well as Scope 3 where available),
traded on the European energy exchange. This methodology
sustainability impact metrics such as water usage and waste
is unchanged from last year and for the period ending 30 June
disposal, incidents of environmental pollution, utilisation of
2022 resulted in a price of €83.4 per tonne CO 2 e.
green energy, and product and process innovation to limit
Ashmore’s Remuneration Committee takes into consideration
environmental impact. For sovereign issuers these include
qualitative and quantitative ESG factors, including those
carbon intensity, air pollution, renewable energy consumption,
relating to climate issues, when determining Executive
energy intensity, water stress and water productivity as well
Directors’ performance-related variable remuneration,
as natural disaster risks and incidents of environmental
asdescribed in the Remuneration report.
impact. The use of these metrics has remained relatively
stable over recent years and will evolve as PASI indicators
Investment management
become moreprevalent.
Ashmore expects its analysis and reporting of climate-related
risks and opportunities and associated metrics and targets for
portfolio investments will evolve, particularly as Emerging
Markets issuers increasingly adopt measures such as the
TCFD recommendations. The Group continues to engage
Summary of climate-related metrics
Ashmore Group plc metric Investment management metric

| GHG emissions | Scope 1, 2 & 3 provided in tCO | 2 e WACI (tCO |  | 2 e / US$ million revenue) |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  | Total/Absolute Carbon Emissions (tCO |  |  | 2 e) |
|  |  |  | Carbon Footprint (tCO |  | 2 e / US$ million invested) |  |
| Transition risks | Qualitative assessment Stranded assets |  |  |  |  |  |
| Physical risks | Qualitative review Qualitative assessment |  |  |  |  |  |
| Climate-related | Industry demand for dedicated ESG-labelled |  | Qualitative assessment |  |  |  |
| opportunities | products |  |  |  |  |  |
| Capital deployment | N/A Qualitative assessment |  |  |  |  |  |
| Internal carbon price | Carbon price calculated using average price over three months |  |  |  |  |  |

66 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT

GOVERNANCE

FINANCIAL STATEMENTS

## 10. Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 GHG emissions and the related risks.

### Ashmore Group plc

Ashmore reports its GHG emissions annually, as required by the Act. The latest disclosures are provided in the Directors' report on page 128, and summarised in the chart below.

### Ashmore Group plc's GHG emissions by scope (tCO₂e)

|  FY2021/22 | 653.9  |
| --- | --- |
|  FY2020/21 | 227.0  |
|  FY2019/20 | 689.7  |

### Investment management

During 2022, Ashmore has estimated the GHG emissions associated with its corporate and sovereign strategies. The WACI, Total/Absolute Carbon Emissions, and Carbon Footprints are being made available to clients for individual funds and mandates.

Ashmore has seen an increased interest among its clients in reporting of GHG emissions as well as capabilities to incorporate net zero decarbonisation targets in the investment process.

## 11. Describe the targets used by the organisation to manage climate-related risks and opportunities and performance against targets.

### Ashmore Group plc

A principal target for FY2021/22 was to offset the Group's prior year GHG emissions, as disclosed in the Directors' report, through The Ashmore Foundation's portfolio of carbon initiatives that deliver positive environmental outcomes while simultaneously realising social and economic benefits for communities hardest hit by climate change. The Foundation selected IDEP Foundation in Indonesia, a country in which Ashmore has a significant local presence in the form of its asset management business, Ashmore Indonesia. IDEP Foundation's activities in the year have offset 203 tCO₂e, which represents a material proportion of the 227 tCO₂e Scope 1, 2 and 3 emissions reported by Ashmore for FY2020/21. These initiatives, including tree planting, are ongoing and IDEP expects to complete all of these activities during 2022 to deliver the full offset.

The Foundation continues to research and plan initiatives to support the Group's carbon offsetting objectives. While the scope tends to be limited to local initiatives, the Group nonetheless believes that this approach is optimal because it delivers positive societal, economic, and environmental benefits to communities in emerging countries and has greater direct impact than, for example, simply acquiring carbon-related securities. Ashmore will also report on the activities relating to the FY2021/22 GHG emissions in next year's Annual Report and Accounts.

Operationally, Ashmore leases its offices, typically alongside other tenants, meaning that in many cases it is allocated a share of total building emissions based on leased footprint. Therefore, the ability to measure, and hence to directly influence changes in the Group's gross GHG emissions, is severely limited. Nonetheless, Ashmore seeks to offset its operational GHG emissions through a thoughtful, socially responsible, and measurable approach via The Ashmore Foundation as demonstrated by the donation to the IDEP Foundation.

### Investment management

Ashmore joined NZAMI in July 2021 and the initiative provides the primary target-setting framework for Ashmore's investment management function. As part of the NZAMI interim target, Ashmore has identified the scope of its AuM that will be managed in line with the net zero target, which initially will account for 6% of the Group's AuM. Ashmore has included in the scope its ESG-labelled range of pooled funds, which includes all its SFDR Article 8 pooled funds. In addition, any client mandates managed to at least the same net zero ambition as that of Ashmore's interim target will be considered 'in scope'. Ashmore will introduce a phased approach to include further funds and mandates within the scope where it has discretion to do so and believes it is aligned with clients' interests. Ashmore will engage with clients to include further mandates and continue to develop net zero solutions.

Ashmore has adopted the NZAOA's Net Zero Target Setting Protocol to guide its implementation of NZAMI commitments. This framework recommends a combination of portfolio-specific targets, sector-specific targets, financing solutions and engagement. Where appropriate, sector-specific targets and financing solutions targets will also be developed.

The equity and corporate debt assets aligned to net zero by 2050 will be managed to a portfolio decarbonisation reduction target of at least 22% by 2025 and at least 49% by 2030 (using 2021 as base year), in line with the recommended range by the NZAOA's Target Setting Protocol. The portfolio targets are based on the WACI metric. Absolute Carbon Footprints will be made available and tracked to monitor alignment with the net zero intention.

Ashmore will also target climate-related engagement with the 20 investee companies with the highest owned emissions, as per recommendations by the NZAOA's Target Setting Protocol.

Ashmore Group plc Annual Report and Accounts 2022 67
SUSTAINABILITY
## Critical to success
### As an Emerging Markets focused investment manager, Ashmore’s success has always been
### dependent on understanding sustainability in the markets in which it operates andinvests.
Ashmore recognises the role it plays in the deployment of its – Environmental challenges: specifically the effects of climate
clients’ capital and the impact this can have on sustainability of the change which can already be acutely felt by companies and
environment and broader society. As such, the Group aims to communities in these markets, including many in which Ashmore
integrate sustainability and responsible investing across its operates and invests. In recognition of this, the Group is a
operations, coordinated by the Head of Responsible Investment supporter of the TCFD as well as NZAMI.
and ESG Policy. Board accountability is ensured through the – Inequality and wealth disparity: this can present significant
Group’s specialised ESGC, which has overall responsibility for challenges in developing markets, and the social investments
Ashmore’s sustainability and responsible investing framework 1
made by The Ashmore Foundation aim to empower communities
across its operational and investment activities. at the extreme end of these disparities.
Ashmore’s responsibility further extends to all its stakeholders and Ashmore’s commitment to act as a responsible investor extends to
includes managing its operations in ways that effectively ensure support for and membership of global and industry-specific initiatives,
the health and wellbeing of its employees. The Group’s distinctive including the UN PRI, the UN GC, and Climate Action 100+. Ashmore will
culture means that Ashmore ensures that its employees are able to continue to develop its approach in line with regulatory requirements
work in a constructive environment, which enables personal and and in so doing contribute to the evolution of industry practice.
professional development.
Ashmore’s broad and encompassing approach to sustainability is
Understanding and achieving sustainability can take many forms, centred on three pillars covering the breadth of its corporate
but arguably some of the greatest impact and change can be operations, investment activities, and the social impact investing by
achieved in the Emerging Markets. Two areas that are particularly The Ashmore Foundation. These pillars are not mutually exclusive
relevant to these markets are: but provide a framework enabling Ashmore to define and pursue its
sustainability objectives. The following pages describe in more detail
some of the factors relevant to each pillar.
Sustainability governs Ashmore’s approach to investments, communities and the environment

| 1. Corporate | 2. Investment | 3. Societal |
| --- | --- | --- |
| Ensure the firm is managed to the | Ensure investments are aligned with | Philanthropic efforts to make a social |
| highest social and environmental | expectations of a ’responsible investor’ | and environmental difference in the |
| standard, in line with local expectations. | and pay particular attention to the risks | communities in which Ashmore invests. |

stemming from ESG concerns and the
sustainability impact of investments.
Ashmore has continued to develop and refine its approach in relation to sustainability and responsible investing over the past year and has
made significant progress on several initiatives at both operational and investment levels.
FY2021/22 highlights Group’s GHG emissions compared with the previous year,
theGroup remains committed to offset these emissions in an
Below are notable achievements over the past year in relation to
effective and socially responsible manner through projects
sustainability and responsible investing:
overseen by The Ashmore Foundation.
– Introduced flexible working for the Group’s employees,
– Maintained or improved the Group’s ESG ratings issued by
tailored to each office location.
relevant agencies, including MSCI and Sustainalytics.
– Launched a graduate recruitment scheme in the UK, to underpin
– Continued to develop investment track records in the four
the long-term development of a diverse workforce. The first
dedicated ESG strategies covering external debt, corporate
cohort of employees will join the firm in September 2022.
debt, blended debt, and equities.
– The Ashmore Foundation has developed a partnership with
– Enhanced climate-related disclosures in accordance with
the IDEP Foundation in Indonesia, which will be offsetting
TCFD recommendations and the FCA’s Listing Rules for
substantially all of Ashmore’s Scope 1, 2 and 3 emissions for
premium-listed companies.
FY2020/21. The initiatives, including tree planting, are ongoing
– Joined NZAMI in July 2021 and recently submitted the
and IDEP Foundation expects to complete activities during
interimtarget.
2022 to fully deliver the offset targets.
– The Group’s investment team joined a second collaborative
– While the return of business travel and use of the Group’s
engagement with an Emerging Markets issuer through
offices during FY2021/22 has contributed to an increase in the
Climate Action 100+.
1 The Ashmore Foundation is a company limited by guarantee, registered in England (6444943) and is a registered charity in England and Wales (1122351). TheAshmore
Foundation is a separate and distinct legal entity from Ashmore Group plc.
68 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
## 1.
## Corporate sustainability
### Ashmore’s approach to corporate sustainability recognises the role it plays in wider
### society and is underpinned by values of transparency, fairness, accountability and
### integrity across the Group’s worldwide operations.
The nature of Ashmore’s business as an investment manager and its consistent single operating platform means that corporate
responsibility can be considered and understood in a relatively small number of areas, listed in the table below, and explained in more detail
on the following pages.
1. Social As a traditional asset management business, employees are a critical asset to Ashmore. The Group’s
responsibilities to its employees are well understood and reflected in its commitments to diversity, career
development, health and safety, including workplace benefits, and a Remuneration policy that delivers a long-term
alignment of interests between employees, clients, and shareholders.
2. Governance Ashmore’s Board of Directors maintains a distinctive culture across the Group, with a strong ‘tone from the top’
that outlines clear expectations, standards, and the importance of accountability to employees. In addition to the
governance arrangements described in the corporate governance section and the Section 172 statement,
corporate responsibility is also underpinned by the following factors:
– A commitment to upholding high ethical standards across the Group’s operations and to minimising the risks
associated with financial crime.
– The Board has ultimate responsibility for risk management and control. This encompasses a wide range of
principal and emerging risks, as described in the Risk management section.
– Ashmore has operations in multiple regulatory and tax jurisdictions and manages its business in a responsible
and transparent manner.
3. Environment Ashmore’s business is based primarily on intellectual capital so its direct impact on the environment is limited.
However, the Group manages the environmental risks it faces responsibly, and described below are specific
developments in the areas of GHG emissions and carbon offsetting.
In recognition of its approach to corporate responsibility, Ashmore Ashmore aims to have employee policies and procedures that
is a constituent of the FTSE4Good equity index. It has a ‘AA’ ESG reflect best practice within each of the countries where it has a
rating from MSCI and a Sustainalytics ESG score of 18.3, which presence, and Ashmore requires employees to act ethically and to
places it in the ‘low exposure to ESG risk’ category. uphold the standards expected by the Group’s clients. This means
having policies and practices that make Ashmore an attractive
Policy documents
place to work in respect of the day-to-day operating environment
Ashmore has a number of policies and other documents that
and culture, and in respect of medium to long-term growth for
support its approach to corporate responsibility. These include
employees, personally, professionally, and financially.
documents that are for employee use, that are made available to
the Group’s clients, and that are publicly available on the Group’s Diversity
website, such as those listed below: Ashmore is committed to providing equal opportunities and seeks
to ensure that its workforce reflects, as far as is practicable, the
– ESG Policy;
diversity of the many communities in which it operates. Ashmore
– Supplier Code of Conduct;
will not discriminate because of age, disability, gender
– Slavery & human trafficking statement;
reassignment, marriage and civil partnership, pregnancy and
– Conflicts of interest statement;
maternity, race (which includes colour, nationality and ethnic or
– Complaints handling procedure; national origins), religion or belief, sex or sexual orientation, or any
– UK tax strategy; and other irrelevant factor, and has built a culture that values
– FTSE Women Leaders Review data. meritocracy, openness, fairness, honesty, and transparency.
Furthermore, diversity of thought is critical to Ashmore’s success.
Social
To achieve this, Ashmore aims to attract and develop diverse
The Group’s priority is to attract, develop, manage, and retain
teams. At Ashmore, such diversity is integral to the culture of the
employees to achieve its strategic growth objectives and to create
Group and encompasses, amongst other things: experience, skills,
value for its stakeholders. The success of Ashmore’s approach to
tenure, age, geographical expertise, professional background,
human resources and its support to corporate responsibility is
gender, ethnicity, disability, and sexual orientation.
reflected in the low levels of unplanned employee turnover
Ashmore is proud to have a diverse workforce with employees
(FY2021/22: 10.5%).
from 36 different countries. Please see the People & culture
section for further information on Ashmore’s diversity.
Ashmore Group plc Annual Report and Accounts 2022 69
SUSTAINABILITY (CONTINUED)
Ashmore provides data to the FTSE Women Leaders Review, as During the year, Ashmore introduced the opportunity for
summarised in the table below, together with the Board gender employees to work remotely for a specified period during the
split as at 30 June 2022. The proportion of female Board Directors week. This recognises similar developments across the industry
was 40% as at 30 June 2022, and is currently 50%. The Senior and the experience of the past few years during which employees
Independent Director is female. Ashmore therefore complies with worked effectively in remote locations while subject to government
the FCA’s diversity and inclusion requirements, applying for restrictions related to the COVID-19 pandemic.
financial years starting on or after 1 April 2022, for at least 40% of
Remuneration
Board members to be women and for at least one senior Board
Ashmore’s distinctive remuneration philosophy, described in
position to be a woman.
detail in the Remuneration report, is a critical factor underpinning
Male Female Total the Group’s culture, designed to achieve a long-term alignment
Board of Directors 3 2 5 between employee remuneration and the interests of clients,
shareholders, and other stakeholders.
Operating Committee 10 1 11
– direct reports 56 19 75 Ashmore recognises that individuals have different personal
requirements dependent on the stage of their life or career.
Ashmore operates a zero-tolerance policy towards harassment and
Inresponse to this, it provides employees with a range of benefits,
bullying and has a formal policy that documents the organisation’s
both non-financial and financial, in addition to basic salaries.
commitment to ensuring employees are treated with respect and
dignity while at work. Health and safety
Ashmore promotes high standards of health and safety at work and
Recruitment and career development
has a comprehensive health and safety policy that highlights the
Ashmore believes that its distinctive business model and
Group’s commitment to ensuring employees are provided with a
culture lead existing employees to recommend Ashmore as an
safe and healthy working environment. For example, in London,
employer and in so doing enables the Group to attract the most
Ashmore carries out regular risk assessments of premises and
talented candidates.
provides employees with safety training including the provision of
Ashmore provides all employees with a comprehensive induction training to fire wardens and first aid representatives. Ashmore also
on joining the business, which introduces the company’s structure, engages external consultants to carry out regular health and safety
culture, operations, and practices. This includes all elements of and fire assessments. Similar arrangements are also made in other
compliance issues, an understanding of the key business ethics Ashmore offices.
operating within the Group, and up-to-date information on
There were no reportable accidents in the financial year in the UK
relevantregulations.
or overseas premises.
Ashmore supports professional development or qualifications that
Human rights and modern slavery
will assist employees in maintaining and developing their levels of
Ashmore supports the United Nations Universal Declaration of
competence. As part of this, Ashmore believes that constructive
Human Rights. Ashmore has developed a Supplier Code of
performance management is an essential tool in the effective
Conduct that applies to all suppliers that provide goods or services
management of its people and business. The performance
to Ashmore and outlines the basic ethical requirements that
management cycle comprises setting objectives and an annual
suppliers must meet in order to do business with the Group,
performance appraisal against those agreed objectives. Output from
including affording employees the freedom to choose employment
this performance process is used to assist with decisions on
and not using any form of forced, bonded, or involuntary labour
remuneration, and career development and progression.
(including child labour).
Ashmore is committed to internal progression of its employees
Ashmore investing in local communities
whenever this is possible, to ensure that it retains the most
Ashmore recognises the positive impact it can have on the
talented people. The diverse and global nature of its business
communities where it operates and is committed to creating
allows the Group to consider placing talented individuals into
lasting benefits in those locations where the Group has a presence.
different business and career opportunities within its worldwide
Beyond support for The Ashmore Foundation, employees across
office network, to foster their development, and to benefit clients.
all offices are encouraged to engage with and to support local
Workplace benefits community projects. This commitment is reflected in Ashmore’s
Ashmore recognises the diverse needs of its employees in policy enabling employees to take one day annually to support
managing the responsibilities of their work and personal lives and charitable projects.
believes that achieving an effective balance in these areas is
Ashmore employees drive local volunteering initiatives and take
beneficial to both Ashmore and the individual. Employee health and
part in a range of activities to support disadvantaged communities
wellbeing is vital to sustained performance at work, and Ashmore
in their local vicinity. Ashmore continues to make an annual
therefore operates a range of schemes to support employees’
donation to homeless charity Crisis, in support of its Christmas
physical wellbeing. For example, in London, Ashmore operates a
cardcampaign.
mental health wellbeing scheme, and has a designated Mental
Health First Aider. Obsolete equipment
Ashmore’s London office provides obsolescent computers to
Ashmore also operates in the UK an integrated healthcare approach
Computer Aid, a UK registered charity that provides developing
whereby its private medical health provider and occupational
countries with access to technology that can support education and
health clinics work hand in hand to promote wellness amongst
improve lives. Computer Aid sends the equipment to various
employees. Similar healthcare arrangements are also offered by
projects across the Emerging Markets and provides Ashmore with
Ashmore’s international offices.
details of where they are used. Any units that are not usable are
disposed of in an environmentally friendly manner.
70 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Governance Information security and data protection
Ashmore’s client base comprises institutions, such as pension
Ashmore’s Board of Directors maintains a strong corporate culture
funds and central banks, and intermediaries that provide access
employing high standards of integrity and fair dealing in the
to retail investors. Consequently, the Group does not handle
conduct of the Company’s activities, compliance with both the
substantial quantities of sensitive personal data, and that data
letter and the spirit of relevant regulations and standards of good
which is gathered and held relates primarily to its employees.
market practice in all jurisdictions where the Group operates.
The Group has comprehensive and, necessarily, confidential
Reporting to industry initiatives where Ashmore is a
Information Security and Data Protection policies that are
signatory
reviewed at least annually and apply to all employees and offices.
As signatory to several industry initiatives Ashmore has certain
Thesepolicies also apply to all third parties that process the
reporting obligations. These include UN PRI, where reporting takes
Group’s personal data.
place each March (this has been delayed over the past year and is
next expected in 2023), TCFD, an update on Ashmore’s NZAMI The Board is ultimately responsible for the Group’s risk
interim target, which was submitted in July 2022, and UN GC. management and internal control systems and for reviewing their
effectiveness. The Group considers principal and emerging risks,
United Nations Global Compact
and associated controls and mitigants relating to information
The UN GC was launched in 2000 to harness the power of
security and data protection, within this framework.
collective action in the promotion of responsible corporates. It is a
framework for businesses that are committed to aligning their The following sections provide a summary of the principles
operations and strategies with the 10 principles in the areas of and processes in place to manage data protection and
human rights, labour, the environment, and anti-corruption. information security.
Ashmore’s 2022 Communication on Progress is included in its Data protection
2022 Sustainability report. Ashmore processes (i.e. collects, uses, and destroys) personal data
in accordance with applicable privacy laws, including the GDPR in
Ethical standards
the United Kingdom and the European Union.
The Board aims to ensure that the Group is fit and proper to
undertake its business, to safeguard the legitimate interests of The Group’s Data Protection Policy establishes a set of principles,
Ashmore clients, and to protect Ashmore’s reputation. listed below, to govern how it uses personal data.
While there have been no whistleblowing reports this year, – Lawfulness, Fairness and Transparency: Personal data shall be
Ashmore considers it important that there is a clear and accessible processed lawfully, fairly, and in a transparent manner in relation
process through which employees can raise such concerns. to individuals.
Therefore, it has procedures in place to enable employees to raise
– Purpose Limitation: Personal data shall be collected for specified,
concerns confidentially regarding behaviour or decisions that are
explicit, and legitimate purposes and not further used or
perceived to be unethical. This includes use of a third-party agency
otherwise processed in a manner that is incompatible with
to provide employees with an independent whistleblowing channel
thosepurposes.
and the Chair of the Audit and Risk Committee acts as the
– Data Minimisation: Personal data shall be adequate, relevant, and
nominated Board Director for whistleblowing.
limited to what is necessary in relation to the purposes for which
Financial crime risks they are processed.
Ashmore is committed to minimising the risk that the Group is – Accuracy: Personal data shall be accurate and, where necessary,
used for the purposes of financial crime, including money laundering, kept up to date; every reasonable step must be taken to ensure
bribery and corruption, fraud, and market abuse. Toachieve this that personal data that are inaccurate, having regard to the
aim, Ashmore has adopted a number of risk-based policies and purposes for which they are processed, are erased, or rectified
procedures for each area of financial crime, as described in the Risk without delay.
management section. The Group provides training to all employees
– Storage Limitation: Personal data shall be kept in a form
in relation to anti-money laundering and countering terrorist financing,
which permits identification of individuals for no longer than
including customer due diligence requirements, identifying money
is necessary for the purposes for which the personal data
laundering, suspicious activity, and financial crime.
areprocessed.
Ashmore is committed to ensuring that it verifies the identity of its – Respect for Individuals: Personal data shall be processed in
clients before a business relationship commences and that this is accordance with individuals’ legal rights.
valid throughout the course of the relationship. – Integrity and Confidentiality: Personal data shall be processed in
a manner that ensures appropriate security of the personal data,
including protection against unauthorised or unlawful processing
and against accidental loss, destruction, or damage, using the
appropriate technical or organisational measures.
– Safe Transfer: Personal data shall not be transferred abroad
without adequate safeguards being put in place in accordance
with the law.
Ashmore Group plc Annual Report and Accounts 2022 71
SUSTAINABILITY (CONTINUED)
In accordance with relevant laws and regulations Ashmore Tax strategy
respects and aims to comply with individuals’ rights as they relate As a large, multi-national organisation with a diverse geographic
to their data. For example, the Data Protection Policy recognises footprint, Ashmore seeks to create value for its shareholders and
the following rights under GDPR: clients by managing its business in a commercial, tax efficient, and
transparent manner, within the remit of applicable tax rules and
– to ask whether the Group holds personal data and/or to receive a
bearing in mind the potential impact of its actions on its brand and
copy of that data;
reputation. Ashmore aims to comply with all relevant tax laws and
– to restrict or object to processing of personal data;
fiscal obligations, including accurate calculation and punctual
– to prevent processing for direct marketing purposes;
settlement of tax liabilities and correct and timely lodging of
– to object to decisions being taken by automated means;
relevant tax returns and other required documentation with
– in certain circumstances, to have inaccurate personal data relevant tax authorities.
rectified, blocked, erased, or destroyed; and
Environment
– to claim compensation for damages caused by a breach
ofGDPR. Ashmore’s business is based fundamentally on intellectual capital,
and it does not own its business premises, therefore its direct
Furthermore, in accordance with GDPR, Ashmore commits to
impact on the environment is limited and there are few
keeping the use of legally defined special category personal data,
environmental risks associated with the Group’s activities.
such as that relating to an individual’s ethnic origin, to a minimum
Nevertheless, Ashmore has a responsibility to manage these
and to restrict its availability only to those people who need to
risks as effectively as possible.
know it.
The Group continues to promote energy efficiency and the
Ashmore maintains a register that describes its processing of
avoidance of waste throughout its operations. Ashmore’s largest
personal data in accordance with the relevant legal requirements.
occupancy is at its headquarters at 61 Aldwych, London where
Information security and cyber security
it has a single floor of approximately 19,000 square feet in a
Information security (including cyber security) is identified as a
nine storey multi-tenanted building. Electricity usage in London
principal risk to the business which is subject to Ashmore’s
is separately monitored by floor, with energy efficient lighting
governance, policies and procedures and risk assessment.
installed. The building landlord allocates the usage of other utilities
Ashmore assesses, monitors, and controls data security risk,
based on occupied floor space.
andensures that there is adequate communication between
Recycling programmes operate for appropriate disposable
the key stakeholders, which include senior management and IT,
materials. The Company seeks to minimise the use of paper
human resources, risk management and control, and legal and
and wherever possible chooses paper materials that have been
compliance departments.
sustainably sourced and are FSC or equivalently accredited.
Ashmore has a layered security model, within which multiple
Mandatory GHG emissions reporting and SECR
complementary technologies and processes are employed.
requirements
Ashmore employees undertake mandatory training in matters of
In line with the Companies Act 2006 (Strategic Report and
information security (including cyber security). Ashmore routinely
Directors’ Report) Regulations 2013, since 1 October 2013 all
deploys security updates to its systems and undertakes regular
companies listed on the main market of the London Stock
vulnerability testing of its networks and systems using a specialist
Exchange have been required to report their GHG emissions in
service provider. The Board’s Audit and Risk Committee receives
their annual report. In addition, effective from 1 April 2019,
an annual report on the Group’s cyber security arrangements, and
Ashmore is also required to adhere to the mandatory SECR
the Group has a culture of continuous improvement that means
regulation introduced by the UK Government.
that improvements can and do occur throughout the year.
Ashmore is required to report its Scope 1 and 2 emissions as part
Ashmore undertakes appropriate pre-contract due diligence for
of mandatory GHG reporting and SECR. The Group has provided a
new suppliers. Ashmore also maintains appropriate oversight of
summary of this information in its Directors’ report.
cyber security arrangements for all key partners, ensuring there is
additional monitoring and protection regarding their cyber security.
For example, Ashmore affirms and/or attests with key partners on
an annual basis that they have not been susceptible to cyber
security attacks and vendors have taken all reasonable steps
to continuously monitor and protect themselves on cyber
securityweaknesses.
72 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT

GOVERNANCE

FINANCIAL STATEMENTS

## Carbon offsetting

Ashmore donates 0.5% of its profit before tax to charities each year, a proportion of which it donates to The Ashmore Foundation. Within the Foundation's donation is a specific amount to support the Group's objective to offset its GHG emissions. In this way, the initiative will have not only the desired offsetting outcome but also deliver social benefits in the emerging countries in which Ashmore invests and operates.

This approach means that the initiative may not be verified by a third-party certification body. Ashmore will review the requirements for certification over the coming years.

Ashmore sets its internal carbon price annually using the past three months rolling average market price of the first carbon futures contract traded on the European Energy Exchange. For the year ended 30 June 2022, the internal carbon price is €83.46 (prior year: €50.20). Ashmore will continue to review its internal carbon price methodology as industry best practice evolves.

## FY2021/22 initiative

To offset the prior year's GHG emissions, The Ashmore Foundation selected the IDEP Foundation in Indonesia, a country in which Ashmore has a substantial local presence in the form of its asset management business, Ashmore Indonesia.

IDEP focuses on sustainable development with the philosophy of "helping people to help themselves". With the support provided by The Ashmore Foundation, it oversees a community-based agroforestry project in West Bali, with a range of environmental and social targets including the ability to offset carbon emissions through tree planting and forest conservation.

The project's activities in the year will offset 203 tCO₂ emissions, substantially all of the 227 tCO₂e Scope 1, 2, and 3 emissions reported by Ashmore for FY2020/21. The initiatives, including tree planting, are ongoing and IDEP expects to complete activities during 2022 to deliver the full offset. Importantly, IDEP has delivered beneficial environmental and social outcomes in the following areas:

- established a community monitoring group to map and monitor at least 100 hectares of forest, with more to follow;
- 330 hectares of natural forest is being conserved;
- providing livelihood alternatives to timber activities for 100 community members in the tourism industry (forest camping and trekking);
- improved income capacity for low-income families through post-harvesting activities, for example coffee production and seed-saving;
- 424 students from three schools participated in tree-planting, improving their knowledge of conservation and climate change; and
- ongoing training of families in permaculture, agroforestry, and business management.

## Eduforest learning activity with schoolchildren

![img-1.jpeg](img-1.jpeg)

## Future initiatives

The Ashmore Foundation continues to research and plan initiatives to support Ashmore's carbon offsetting objectives. While the scale of individual initiatives tends to be relatively limited, the Group nonetheless believes that this approach is optimal because it helps communities in emerging countries and has greater direct impact than, for example, simply acquiring carbon-related securities.

Ashmore Group plc Annual Report and Accounts 2022 73
SUSTAINABILITY (CONTINUED)
## 2.
## Responsible investment
### Ashmore’s purpose is to deliver long-term investment outperformance for clients
### and to generate value for shareholders through market cycles, while ensuring it acts
### as a responsible investor and steward of clients’ capital.
Ashmore recognises that being a responsible investor brings Inaccordance with Ashmore’s ESG Policy, ESG risk analysis is
with it a duty to act in a manner that benefits wider society. integrated into the investment processes in the same way as
Thisresponsibility is particularly acute in the markets in which Ashmore assesses macroeconomic risk, financial performance,
Ashmore invests and operates, with the need to balance ESG andcredit metrics. Itacts as both a form of risk management and a
factors with the financial wellbeing of emerging market sovereigns source of alpha generation. Ashmore’s ESG risk analysis involves
and corporates. consideration of relevant risks, including for example, natural
disasters and risks related to incidents of environmental pollution,
The integration of the assessment of ESG risks and opportunities in
societal stability, product quality and safety issues, supplychain
the investment process has been an area of significant focus for
and labour risks, health and safety failings, human rights violations
Ashmore, supported by strong interest from clients. Ashmore aims
and changes in the regulatory environment relating to sustainability.
to work collaboratively with its clients to develop a broad suite of
This is an indicative list only, and Ashmore recognises that the
products across the responsible investment spectrum.
universe of relevant ESG risks will grow and evolve over time.
Ashmore’s philosophy is underpinned by a fiduciary responsibility
It should be noted that evolving industry-wide standards and
to its clients. Ashmore recognises the importance of responsible
approaches and therefore ESG can mean different things to
investing and the related opportunities and risks it presents.
different investors. Moreover, Ashmore recognises that many
An ESG or ‘sustainability’ risk is an ESG event or condition
investors continue to evaluate the role that ESG will play in their
that, if it occurs, could cause an actual or potential
strategies and portfolios.
material negative impact on the value of an investment.
Traditional Responsible Sustainable Impact Investing Philanthropy
Investing Investing Investing
Financial returns driven Sustainability impact driven
Objective Financial returns Financial returns Enhanced focus on Focus or priority of Sustainability
sustainability issues sustainability impacts impacts only
Lens ESG Risk lens Sustainability lens Sustainability
lens only
Lever – exclusions – consideration of
– voting sustainability
issues
– consideration
of ESG risk – active voting
– active
engagement
SFDR Article 6 Article 6 Article 8 Article 9 Out of scope
Ashmore All other funds All other funds ESG-labelled funds The Ashmore
Foundation
74 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Responsible investment governance Ashmore’s alternatives theme covers a diverse range of real assets
in private equity, healthcare, infrastructure, special situations,
Responsibility for Ashmore’s responsible investment activities
distressed debt, and real estate opportunities. As such, the
lies with the Board, which delegates to the ESGC chaired by the
approach to ESG integration is tailored to the context of each
CEO and managed by the Head of ESG and Responsible
market. Notwithstanding this, the ESG scoring of these issuers
Investment Policy.
is also conducted using the same proprietary ESG scoring
The ESGC meets formally at least quarterly and has representation
methodology described above. Wherever possible, Ashmore
from across the organisation, in particular the investment teams,
also incorporates ESG assessment frameworks, which align to
risk management, operations, investor relations, distribution, and
internationally accepted standards, including the PRI and the IFC
legal. Ashmore’s integrated approach to ESG assessment means
Performance Standards for Real Estate investments. Furthermore,
that reviews of ESG investment related activities are undertaken by
Ashmore’s investment teams seek to ensure that its frameworks
the investment committees and the relevant theme sub-investment
comply with local regulations and standards.
committees. The ESGC reviews and ensures the maintenance and
Ashmore has aimed to align its investment approach, including
integrity of all responsible investment/ESG processes and procedures.
how ESG issues are integrated, with the investment horizon of its
Integrating ESG in the investment process clients. This is primarily done through dialogue with the clients to
account for liquidity requirements, performance objectives and
Ashmore has explicitly integrated the analysis of ESG factors into
sustainability concerns.
its investment processes, which reflects its philosophy that the
incorporation of non-financial factors is essential to building a
Responsible investing solutions
robust understanding and assessment of an issuer, and that over
In addition to the integration of ESG analysis across all investment
time this will improve investment performance, promote better
themes, Ashmore has several dedicated ESG products covering
corporate business models, and help foster more sustainable
external debt, corporate debt, blended debt, and equity strategies.
economic development. As with its credit and financial analysis,
Ashmore’s ESG research is primarily proprietary in nature, based Ashmore has managed dedicated Emerging Markets ESG
on research visits and meetings with issuers, with additional strategies in both fixed income and equity since 2019 and 2020,
context obtained using third-party data. respectively. These approaches consider sustainability issues and
opportunities in more depth and set a higher standard for ESG
Ashmore’s approach to ESG integration includes the use of
performance in the determination of the investable universe,
proprietary ESG scorecards that are applied and implemented
aswell as position sizing and portfolio construction. In addition,
consistently across all the strategies managed by the Group. Every
Ashmore applies a wider set of industry and issuer exclusion
issuer that is either owned or considered for investment is scored.
criteria including those relating to revenues generated from the
These scorecards form an integral part of the investment
manufacture, distribution or sale of any defence, gambling, and
assessment both prior to holding as well as throughout until
tobacco, given their high negative externalities. It also means
exiting. The ESG scores are reviewed at least annually and are also
excluding industries that have high sustainability impact with a
flagged for review on an event-led basis. They consider both
viable low-risk alternative, namely fossil fuels that can be replaced
historical and forward-looking factors and assess issuers on a
by renewables. For client managed segregated mandates,
global absolute basis (as opposed to relative to peer group) to
Ashmore also customises client portfolios to meet specific ESG
promote a ‘best-in-class’ scoring mind set.
requirements for geographic, sector and stock specific restrictions,
While governance-related issues have historically dominated
as well as those mentioned above.
non-financial factor assessment in Emerging Markets, climate and
social equalities have notably risen in importance as both a driver of
risk as well as opportunity. The ESG factors in the table below have
been identified by Ashmore to be of particular importance for
assessment, seen through an Emerging Markets lens.
Sovereign issuers are scored by Ashmore’s sovereign bond
investment teams. The corporate debt and equities teams share
the responsibility for the evaluation of the issuers that have
issued both debt and equity instruments, resulting in Ashmore
having one common, joint ESG assessment across the Group.
Furthermore, all the ESG scoring sheets, notes, and engagement
activities are shared across Ashmore.
Ashmore Group plc Annual Report and Accounts 2022 75
SUSTAINABILITY (CONTINUED)
Group-wide exclusions As noted above, for the ESG product range, Ashmore applies
minimum ESG score criteria. Any issuer that fails to meet the
In general, across all funds and segregated mandates,
minimum combined score on any of the E, S or G scores,
Ashmorerestricts investment in companies engaged in the
accordingto Ashmore’s ESG scoring process, are automatically
manufacture, distribution, and maintenance of controversial
excluded from the portfolio. For additional information on this
weapons. The scope and breadth of this restriction is outlined in
process, please refer to Ashmore’s ESG Policy available on
Ashmore’s Controversial Weapons Policy available on Ashmore’s
Ashmore’swebsite.
website. Ashmore funds and segregated mandates also restrict
investing in issuers that Ashmore determines to have significant Ashmore also offers customisation of client portfolios to meet
involvement in the manufacture, distribution or sales related specific requirements for geographic, sector, and other security
topornography. specific restrictions.
Furthermore, Ashmore seeks to comply with applicable government
authorities and, where appropriate, screens investments against
the UN Security Council and EU/UK sanctions and the US Office of
Foreign Assets and Control lists.
## Examples of ESG criteria
Environment
Corporate Sovereign
Global impact and GHG emissions, local impact and water and Carbon emissions, clean energy/climate adaption strategies,
waste management, incidents of environmental pollution, natural disasters risk and preparedness, resource use, and
energy management, and use of green energy, policies and environmental regulations
innovations to limit negative impact
Social
Corporate Sovereign
Employee diversity and inclusion, customer welfare, human Basic needs of population, societal stability, human
rights and community relations, labour practices and health and development, economic freedom, labour rights,
safety, supply chain management, materiality of philanthropy andinequality
spend, and product quality and safety
Governance
Corporate Sovereign
Transparency and disclosure, governance structure, fair Progress to sustainability, institutional strength, rule of law,
representation of minority interests, public listing and reporting, democratic processes, and corruption
management accessibility, long-term incentive scheme KPIs,
and strategies to mitigate the impact of ESG risks
76 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Contributing to the net zero transition Stewardship and engagement summary
Ashmore recognises that it is important for the financial sector to Ashmore believes that through strong relationships with sovereign
contribute to climate action (Sustainable Development Goal 6), and corporate issuers of debt and equity, the Group can positively
and the related net zero transition. To achieve the economic influence outcomes related to ESG risks and an issuer’s
transformation required to deliver ‘net zero by 2050’ financial flows management of sustainability concerns. Ashmore sees such
must become aligned with a low-carbon economy and incentivise active ownership to be an integral part of its fiduciary duty as
climate mitigation and adaption. This is particularly the case in well as an important tool to enhance and preserve the value of its
Emerging Markets where there is a need to balance the low-carbon clients’ investments.
transition with improved access to energy and where the need for
Building on the Group’s previous engagement activities,
funding is paramount.
theAshmore Engagement Strategy, outlined in Ashmore’s
The main framework for asset managers in this regard is NZAMI, Engagement Report, was updated in 2021 and 2022 to reflect
which Ashmore joined in July 2021. Ashmore recently submitted prevailing industry guidance. The updated Strategy consists of four
its NZAMI interim target, and this is expected to be the main areas: direct engagement with issuers, collaborative and collective
mechanism by which Ashmore addresses climate change impact. engagement efforts, escalation strategies, and exercising voting
rights and responsibilities.
As part of the NZAMI interim target, Ashmore has identified the
scope of its AuM that is to be managed in line with the net zero
ESG engagement topics
target, which initially will account for 6% of the Group’s AuM.
Environmental
Ashmore has included in the scope its ESG-labelled range of
### ■ Climate change
pooled funds, which includes all its SFDR Article 8 pooled funds.
### ■ Environmental
Inaddition, any client mandates managed to at least the same net Social
### zero ambition as that of Ashmore’s interim target will be ■ Society
### ■ Workplace
considered ‘in scope’.
Governance
### Ashmore will introduce a phased approach to include further funds ■ Board 10%
### and mandates within the scope where it has discretion to do so ■ Core governance
### ■ Other
and believes it is aligned with clients’ interests. Ashmore will
ESG
engage with clients to include further mandates in this regard as
### ■ Generic
well as continue to develop net zero solutions.
Ashmore has adopted the NZAOA’s Net Zero Target Setting
The main body of Ashmore’s engagement efforts is in the form of
Protocol to guide its implementation of NZAMI commitments.
engagements between Ashmore’s portfolio managers and issuers.
Thisframework recommends a combination of portfolio-specific
These are typically referred to as bilateral engagement efforts,
targets, sector-specific targets, financing solutions, and engagement.
which can be triggered by an issuer or sector specific ESG risk or
The equity and corporate debt assets aligned to net zero by 2050 sustainability issue. In keeping with industry guidance, the
will be managed to a portfolio decarbonisation reduction target of Engagement Strategy also applies an appropriately high bar for
at least 22% by 2025 and at least 49% by 2030 (using 2021 as the what qualifies as an ‘engagement’ requiring a pre-determined
base year), in line with the recommended range by the NZAOA’s objective. As a result, general interactions portfolio managers have
Protocol, based on the WACI metric. Absolute Carbon Footprints with issuers on ESG and sustainability issues are still tracked but
will also be made available and tracked to monitor alignment with will not be counted as an engagement. In 2021 Ashmore engaged
the net zero intention. with 228 issuers across 331 engagement efforts. Of these, 55%
had a pre-determined objective. The main topics for engagement
Ashmore will also target climate-related engagement with the
were climate change followed by the need for better ESG
20investee companies with the highest owned emissions,
disclosure and reporting.
as per recommendations by the Protocol.
25%
5%
7%
9%
Ashmore Group plc Annual Report and Accounts 2022 77
8%
14%
22%
SUSTAINABILITY (CONTINUED)
Another important component of the Engagement Strategy is
engagement conducted as part of collaborative efforts with other
investors or collective efforts typically arranged by industry
initiatives. In 2021 Ashmore participated in three such efforts of
note: the Group supported a letter to governments on strong
climate action arranged by The Investor Agenda, participated in
decarbonisation-focused engagements as part of Climate Action
100+, and published a position paper on the policy required to
address the Paris Agreement highlighting the contrasting position
of Emerging and Developed Markets.
If Ashmore determines that its engagement efforts are not yielding
the desired results it might choose to escalate the engagement.
This is considered on an exception basis and can take several
forms e.g. a downgrade of the Ashmore ESG score, a vote against
the re-election of directors, or divestment. Selling a position is
considered a last resort as by divesting, Ashmore would no longer
have the opportunity to directly influence the issuer.
Ashmore considers exercising voting rights and responsibilities
to be an important aspect of its role as a responsible investor.
Ashmore aims to vote on all votable ballots and voted in 2021
on 93% of the votes presented. Ashmore has an active approach
to voting with all votes being instructed by portfolio managers.
As a result, in 2021 9% of votes were against management while
4% against independent advice. Further details are included in
Ashmore’s Engagement Report.
Percentage voted with management recommendations 81%
Percentage voted against management recommendations 9%
Percentage of abstentions 9%
Percentage of votes withheld 1%
78 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
## 3.
## The Ashmore Foundation
### Ashmore recognises that being a member of the global community brings with it
### responsibility to act in a manner that benefits wider society.
Since its establishment in 2008, Emergency relief funding to Ukraine
TheAshmore Foundation has partnered
Following Russia’s invasion of Ukraine in early 2022, a humanitarian
with over 75 local organisations in 26
crisis unfolded displacing over 7 million people and affecting the
Emerging Markets countries to equip
lives of millions of children and families in the country. In line with
women and young people with the skills
the Foundation’s commitment to respond to emergencies and
and resources they need to generate
ensure civil society organisations and their beneficiaries are
income, drive system change, and have a positive environmental
supported at their most vulnerable, the Trustees approved
impact on their local communities andbeyond.
donations of US$100,000 to deliver humanitarian aid and medical
The Ashmore Foundation functions independently of Ashmore and supplies to support people displaced by the conflict.
is registered in the United Kingdom as a charity and company
Two of the organisations supported through this funding were
limited by guarantee. It is staffed by an Executive Director who is
Razom, which shipped hundreds of tons of tactical medical
responsible for managing the Foundation’s affairs. The Ashmore
equipment and supplies to Ukraine, and The WONDER Foundation,
Foundation board of trustees consists of 10 Ashmore employees,
which provided emergency supplies to over 100,000 Ukrainian
one Ashmore Non-executive Director and one independent trustee.
refugees in Poland.
In addition to the board of trustees, Ashmore employees are
The Trustees have approved further support as the crisis continues
encouraged to engage directly in the governance of the Foundation
and the needs of refugees and those affected by the conflict evolve.
through involvement in sub-committees.
Ashmore matched donations made by its employees to the
Ashmore supports the Foundation’s charitable activities through
Ukraine emergency funding appeal.
the provision of pro-bono office space, administrative support,
anda matched funding commitment for employee donations to
theFoundation.
Ashmore donates 0.5% of its profit before tax to charities each
year, a proportion of which it donates to The Ashmore Foundation
to deliver its charitable grant strategy.
Ashmore employees actively support the Foundation through a
global annual giving programme as well as organising and
participating in a range of fundraising events from wine tastings to
sports competitions. Over the years employees have summited the
UK’s three peaks, competed in RideLondon 2022, and walked the
length of Hadrian’s Wall to raise funds to support the Foundation.
Delivering social impact in Emerging Markets
The Ashmore Foundation’s grant strategy is underpinned by the belief
that gender equity, systems change, and a people-first climate
approach are necessary to support economic and social development
at a time when inequality continues to rise in the Emerging Markets.
The Ashmore Foundation believes that with the right support and Supported by The Ashmore Foundation, The WONDER Foundation
investment in education, employment, and entrepreneurship, provided emergency supplies to 100,000 refugees in Poland and
people can grow and prosper to break the cycle of poverty that 20,000 Ukrainians on the border.
disproportionately affects women and young people in Emerging
Markets countries. The Foundation therefore focuses its social
investment strategy on programmes that aim to equip people with
the skills and resources they need to increase their livelihood
opportunities, enabling them to meet their basic needs while also
supporting economic growth and beginning to address broader
societal inequalities.
Pages 1 to 79 constitute the Strategic report which was approved by the Board on 1 September 2022 and signed on its behalf by:
Mark Coombs
Chief Executive Officer
1 September 2022
Ashmore Group plc Annual Report and Accounts 2022 79
BOARD OF DIRECTORS
## Committed to robust
## standards of governance

| Mark Coombs | Tom Shippey | Clive Adamson |
| --- | --- | --- |
| Chief Executive Officer | Group Finance Director | Non-executive Chair |
| Appointed to the Board: December 1998 | Appointed to the Board: November 2013 | Appointed to the Board: October 2015 |

and as Chair: April2022
Skills, experience and contribution: Skills, experience and contribution:
(Independent on appointment).

| Mark Coombs founded the business | Tom Shippey is a chartered accountant |  |
| --- | --- | --- |
| which became Ashmore in 1992 and has | with extensive experience in investment | Skills, experience and contribution: |
| overseen its successful growth for nearly | management, mergers and acquisitions, | Clive Adamson has enjoyed a career |
| 30 years. | capital raising and financial and | in financial services for over 40 years |
|  | regulatoryreporting. | spanning executive roles in banking and |

Other roles past and present:
regulation and, more recently, board roles
Mark was appointed a Director on the Other roles past and present:
across wholesale and retail banking,
incorporation of the Company and has Tom was appointed to the Board as Group
insurance and asset management.

| served as its Chief Executive Officer since | Finance Director in November 2013. Prior |  |
| --- | --- | --- |
| then. He held a number of positions at | to joining Ashmore in 2007, he worked at | Other roles past and present: |
| Australia and New Zealand Banking Group | UBS Investment Bank, including advising | Clive spent 20 years in wholesale banking, |
| (ANZ) and led Ashmore’s buyout from | on the Ashmore IPO in 2006. He is | holding senior positions with Citigroup and |
| ANZ in early 1999. He is Co-Chair of EMTA, | currently a trustee of the Resurgo Trust. | Bank of America. He moved into regulation |
| the trade association for Emerging |  | as an adviser at the Bank of England before |

Tom qualified as a Chartered Accountant
Markets, having been on the Board since joining the newly formed Financial Services
with PricewaterhouseCoopers in 1999 and
1993. Mark holds an MA in Law from Authority and then the FCA upon formation
is a Fellow of the ICAEW. Tom holds a BSc
Cambridge University. where he was Director of Supervision and
in International Business and German from
an Executive Member of the Board. Clive
Aston University.
was a Non-executive Director of Virgin
Money plc and a Senior Adviser at
McKinsey & Company. He is currently a
Non-executive Director of J.P. Morgan
Securities plc, Chair of J.P. Morgan Europe
Ltd and its Nominations Committee, and
Chair of Nutmeg Saving and Investment
Ltd. He is a Non-executive Director and
Key to membership of committees
Chair of the Risk Committee of both M&G
A – Audit and Risk plc and Prudential Assurance Company
Limited. Clive holds an MA in Economics
N – Nominations
from Cambridge University.
R – Remuneration
Committee membership: A, N, R
(A bold letter denotes the Chair)
Board and committee attendance
The table below sets out the number of scheduled meetings of the Board and its committees and individual attendance by the Directors.
Board N: Nominations Committee A: Audit and Risk Committee R: Remuneration Committee
Meeting attendance between 1 July 2021 and 30 June 2022 Attended Attended Attended Attended
Mark Coombs 8/8 – – –
Tom Shippey 8/8 – – –
Helen Beck 8/8 5/5 4/4 Chair 5/5
David Bennett* 7/7 Chair 4/4 – 4/4
Clive Adamson** 8/8 Chair 5/5 Chair 4/4 5/5
Jennifer Bingham 8/8 5/5 4/4 5/5
Members of executive management are invited to attend Board committee meetings as required but do not attend as members of
thosecommittees.
* David Bennett retired as a Director and Chair of the Board on 20 April 2022. He chaired the Nominations Committee except when it considered the matter of his
resignation as Board Chair.
** Clive Adamson was appointed Chair of the Board and Chair of the Nominations Committee from 21 April 2022. He remained Chair of the Audit and Risk Committee on
an interim basis and took over as Chair of the Nominations Committee.
80 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS

| Helen Beck | Jennifer Bingham | Shirley Garrood |
| --- | --- | --- |
| Independent Non-executive Director | Senior Independent Director | Independent Non-executive Director |
| Appointed to the Board: June 2021 | Appointed to the Board: June 2018 | Appointed to the Board: August 2022 |
| Skills, experience and contribution: | Skills, experience and contribution: | Skills, experience and contribution: |
| Helen Beck is a commercial international | Jennifer Bingham has in-depth experience | Shirley Garrood has extensive financial |
| adviser with significant experience in | in investment oversight of the investment | services experience built up over many |
| advising boards on remuneration and | portfolios of family offices and charitable | years with a focus on operations, finance |
| human resources. She has a strong | foundations and in her previous executive | and risk matters within financial services |
| executive track record in building and | role in the emerging markets fund | and investment management. |
| growing client centric businesses with | management business. |  |

Other roles past and present:
extensive financial services experience
Other roles past and present: Shirley was Chief Financial Officer and
across a broad range of asset management
Jennifer is an accountant and between Chief Operating Officer of Henderson
firms and banks.

|  | 1992 and 2003 she was a senior executive | Group plc and, since finishing her executive |
| --- | --- | --- |
| Other roles past and present: | of Brunswick Capital Management Limited, | career, has held roles at esure Group plc |
| Helen was formerly a Partner and Head | an investment manager specialising in the | as Deputy Chair, Chair of the Audit |
| of Financial services remuneration practice | Russian equity market. During this period | Committee and Senior Independent |
| at Deloitte LLP. Prior to joining Deloitte, | she variously held the offices of Chief | Director; and Chair of the Audit and Risk |
| she held a number of senior executive | Executive, Chief Operating and Chief | Committees and Senior Independent |
| appointments in human resources, | Financial Officer. Since 2003 Jennifer has | Director of Hargreaves Lansdown plc. |
| remuneration and consultancy, including at | held finance, administration and | Shealso served as a governor of the |
| Standard Bank, McLagan Partners and | investment oversight roles with investment | Peabody Trust housing association. Shirley |
| Fidelity Asia-Hong Kong. Helen has also | company PCHB Limited (part of the Cundill | is currently a Non-executive Director of |
| been a Governor of the John Whitgift | group of companies). She is currently an | Royal London Mutual Insurance Society |
| Foundation, including being Chair of the | Executive Director of FPC Philanthropies | Limited, and Chair of Royal London Asset |
| Salaries Committee. Helen is currently a | Ltd (the Peter Cundill Foundation) and sits | Management Holdings Limited and Royal |
| Non-executive Director of Funding Circle | on the investment committee of PCHB | London Asset Management Limited, also |
| Holdings plc and Chair of its Remuneration | Limited. Jennifer is also an Executive | chairing their Risk and Capital Committee. |
| Committee, a Non-executive Director | Director of Valley Management (UK) | She is a Non-executive Director and Chair |
| of Irwin Mitchell Holdings Limited, an | Limited, an Executive Director of Stichting | of the Audit and Risk Committee of the |
| Independent Governor of University of | Pamina, a Dutch Charitable Foundation, | BBC. Shirley is also an Independent |
| Bedfordshire, and an Independent Member | and a Trustee of The Ashmore Foundation. | Non-executive on Deloitte LLP’s Audit |
| of the Remuneration Committee for the |  | Governance Board, providing oversight of |

Committee membership: A, N, R
British Olympic Association. Helen holds a the external audit and assurance business
BA(Hons) in Social Administration from the only. Shirley holds a B.Sc in Economics and
University of Nottingham, is a Member of Accounting from the University of Bristol
the Institute of Personnel Development and is a qualified Chartered Accountant and
and holds a Post Graduate Diploma in Corporate Treasurer.
Personnel Management.
Committee membership: A, N, R
Committee membership: A, N, R
Ashmore Group plc Annual Report and Accounts 2022 81
CHAIR’S STATEMENT AND INTRODUCTION TO CORPORATE GOVERNANCE
## Commitment to
## robust governance
Dear shareholder, The Board’s work during the year is set out on page
## 89 and shows the usual schedule of business as Over
This is my first report to you in my new role as
well as updates on specific topics. The Company’s
Chairof the Board of Ashmore. David Bennett,
strategy remains growing and diversifying Ashmore’s
## mypredecessor, retired from the Board on 80%
business and creating value for clients and
20 April 2022 following more than seven years of shareholders voted
shareholders. More detail can be found in the
of service to Ashmore, including three years in favour of Ashmore’s
Strategy description on page 6. Remuneration report
asChair. On behalf of the Board, I would like to
thank him for his significant contribution over this Our shareholders
period. Hisassistance during the period of handover
Understanding the views of shareholders is essential
and, more generally, his insights into the issues
to the Group’s long-term success. Shareholder
before the Board in his capacity as Chair have been
feedback is regularly considered at the Board
invaluable. All the Board members wish David
meetings and factors into the Board’s decision
well for the future.
making. We keep shareholders updated on
We continue to be in uncertain times, now performance and news through annual and half year
dominated principally by the impact of the war in results, quarterly AuM statements and via the
Ukraine and, closer to home, the deteriorating regulatory news service.
picture in the UK and Europe and macro-economic
At the 2021 AGM, over 80% of shareholders voted
uncertainty. The positive outlook at the start of the
in favour of the Remuneration report. We feel this
year, created by the success of the vaccination
reflects efforts after the 2020 AGM to engage with
programme against COVID-19, and early signs of
shareholders and proxy adviser teams and the Board
international economic recovery, has since been
and the Remuneration Committee will keep this
overshadowed and global markets have become
under review. The arrangements that have served
more volatile again.
us so well over the years can be found in the
I am pleased to say that the resilience, determination Remuneration report on page 95. Executive
and team spirit of Ashmore employees continued during Directors held regular meetings with a range of
this time with strong interaction and co-operation, shareholders during the year and the economic
helped by the transition to a return to primarily environment, the Company’s performance,
office-based working for many employees. Whilst the impact of the war in Ukraine, and the return
the office environment is optimal for Ashmore’s of employees to office working, were recurring
team-based culture, in recognition of the benefits it themes. Ashmore’s AGM provides an opportunity
can bring, Ashmore provides flexibility for employees for all shareholders to meet with the Board and
to work remotely. raise matters of interest.
Governance and Company purpose
The Board
Ashmore’s governance structure continues to be
This year, I led the annual evaluation of the Board,
appropriate to the size and complexity of the business.
committees and Directors, assisted by a questionnaire
It enables the Board to oversee the execution and
and meetings with each member of the Board.
delivery of Ashmore’s purpose, as a specialist
Allviews were shared and discussed in an informal
Emerging Markets investment manager, to deliver
meeting of the Board. All Directors were of the
long-term investment outperformance for clients
opinion that the Board is effective in carrying out its
and generate value for shareholders through market
responsibilities. There is a shared view amongst
cycles. In fulfilling its role, the Board is guided by
the Directors that the Board operates effectively,
the Group’s purpose in the shaping of key decisions,
has the right composition, and is efficient.
culture and values. The Board looks to set the
Nevertheless, we found areas where we could
highest ethical and professional standards in the
improve. More detail is provided in the Nominations
business. At Ashmore, this is supported by a
Committee report on page 93.
strong internal culture and values among staff,
which drive appropriate behaviour, embedded by
the Company’s compliance, risk management and
employmentpolicies.
82 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
While the Board operated efficiently and effectively
### “ ... the resilience, determination and team
during a period of remote working due to COVID-19
### spirit of Ashmore employees continued
restrictions, the return to physical meetings has
been welcome. The Board values the experience of
### during this time.”
face-to-face meetings, in-person management
presentations and informal ‘meet the teams’
sessions. Being kept up to date on the latest
The Board has responsibility for oversight of the
compliance and regulatory requirements and
Group’s whistleblowing arrangements and the Chair
anticipated developments remain high on the
of the Audit and Risk Committee is the nominated
agenda, as they are across the business. The Board
Director with responsibility for whistleblowing. An
remains alert to changes in investor expectations
independent agency provides a means through
in Emerging Markets, notably in respect of
which employees can raise concerns, if they do not
ESGstandards.
wish to bring these to the attention of management.
The Nominations Committee has discussed All employees are made aware of, and have access
succession planning and diversity for both the Board to these arrangements.
and senior management. This year we put this
Ashmore has a single Remuneration policy which
planning into practice to enable a smooth transition
applies to its workforce and Executive Directors
upon the resignation of David Bennett as Chair of
alike, with some additional restrictions for Directors.
the Board.
More information on how Ashmore invests in and
Details of each Director’s profile can be found on rewards its people is provided in the Remuneration
pages 80 to 81 of this Report and the Board is report on pages 95 to 126. The Board believes that
recommending the election or re-election of all the remuneration structure works to benefit clients,
Directors at this year’s AGM. shareholders and employees alike.
Our people Diversity
The Board has continued to engage directly with In order to execute its strategy, the Group needs to
Ashmore’s workforce, by hosting informal continue to attract, develop and retain a diverse
discussions with employees from different workforce. Ashmore has 50% gender diversity on
departments. By necessity, this has sometimes the Board and the gender diversity of employees and
been by video conferencing. With the relaxation of senior management is reported on pages 52 and 70.
COVID-19 restrictions, the Board has been able to Ashmore is an organisation which spans multiple
invite London based employees back into the cultures and ethnicities, however, the Board and
boardroom at the end of formal Board meetings. Nominations Committee understand the importance
This approach allows Directors to meet directly and of improving its gender and ethnic diversity. The
informally with the workforce and helps us assess Board discusses diversity at least annually, as
and monitor the culture of the firm. It is also the described further in the Directors’ report on page
Board’s intention to visit the offices in Singapore and 128. The Board already meets the requirement to
Indonesia and meet local employees face-to-face have a minimum of 40% of Board positions held by
later this year, and to conduct further visits to other women and has a female Senior Independent
local offices in the future. Director in compliance with the FTSE Women
Leaders Review and new FCA Listing Rules
Jennifer Bingham is the Non-executive Director for
requirements. The Board is committed to the target
workforce engagement. As such, she chairs the
of having at least one director from an ethnic
‘meet the teams’ sessions and acts as a conduit for
minority in line with the Parker Review and FCA
the Board to facilitate interaction and understanding
Listing Rules requirement.
of workforce sentiment. This engagement helps to
inform our discussions and decision making.
Asummary of the Board’s engagement with
employees and other stakeholders is included in the
Section 172 statement on page 46 and the Directors’
report on page 128.
Ashmore Group plc Annual Report and Accounts 2022 83
CHAIR’S STATEMENT AND INTRODUCTION TO CORPORATE GOVERNANCE (CONTINUED)
## COMMITMENT TO ROBUST GOVERNANCE (CONTINUED)
Board changes and time commitments Dividend
We welcomed Shirley Garrood to the Board on The Board recognises the importance of the
1August 2022 and she became a member of the ordinary dividend to shareholders, and, taking into
Nominations, Remuneration and Audit and Risk consideration the annual profit, the unrealised nature
Committees on appointment. If elected at the 2022 of the seed capital result, the cash flows delivered,
AGM, she will take over as Chair of the Audit and the balance sheet’s strength and the continued
Risk Committee on 14 October 2022, subject to growth opportunities available to Ashmore over the
FCAapproval. Any potential conflict and her longer term, it is recommending a final dividend of
other time commitments were declared to the 12.10 pence per share, to give total dividends per
Board and considered at the time of appointment. share for the year of 16.90 pence.
Acomprehensive induction programme was
arranged to support her introduction to Ashmore.
Clive Adamson
All appointments are disclosed to and considered by
Chair
the Board in the context of the overall time
commitments of the relevant Director (bearing in
1 September 2022
mind any roles that have also been relinquished) and
whether such commitments impinge on their duties
to Ashmore. During the year, I ceased to be a Senior
Adviser at McKinsey & Company and Helen Beck
2018 UK Corporate Governance
retired from her role as a Governor of the John
Code Compliance Statement:
Whitgift Foundation. Details of the Directors’
Ashmore has complied with the Code
external commitments are provided on pages 80 to
during the year, save for Provision M
81. The Nominations Committee report gives details
(membership of the Audit and Risk
on how it treated applications by Non-executive
Committee) for part of the year. Ashmore
Directors to take on new external appointments.
explains on pages 85 to 86 how each of the
Wider society Principles of the Code have been applied
and why there was a departure from
Ashmore continues to engage with investors,
Provision M on an interim basis.
governments and NGOs across a range of issues
that are important to the business and the wider
world. Management shares insight and feedback
from this engagement with the Board, helping us
understand how Ashmore’s products and services
can better serve its stakeholders.
Our Section 172 statement on pages 46 to 48 sets
out how Ashmore has taken account of our
stakeholders, and the Sustainability report on pages
68 to 73 describes the good work that has been
done this year by The Ashmore Foundation and the
offsetting of the Group’s carbon emissions. ESG is
integrated into Ashmore’s investment processes and
we are committed to providing transparent reporting
to stakeholders on ESG outcomes. This year
Ashmore joined NZAMI, and set interim targets to
reduce GHG emissions in client portfolios. A more
extensive review of Ashmore’s ESG activities can be
found on pages 68 to 79.
84 Ashmore Group plc Annual Report and Accounts 2022
CORPORATE GOVERNANCE
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
## 2018 UK Corporate Governance
## Code
### Ashmore explains below how it complied with the principles of the Code during the year
### ended 30 June 2022. The explanation references the alphabetic coding of the Provisions of
### the Code. Ashmore adhered to all Provisions, save as indicated below (Provision M). Please
### see pages 93 and 94 for a fuller explanation of that departure.
Board Leadership and Company Purpose E. Workforce engagement. Jennifer Bingham, the Senior
Independent Director, is the designated Non-executive Director
A. Board’s role. A formal schedule of matters reserved for the
with responsibility for engagement with Ashmore’s workforce.
Board is reviewed and approved by the Board on an annual
An explanation as to how she undertook this function during the
basis. It sets out the framework under which the Board
year is given on page 128. The Chair of the Audit and Risk
manages its responsibilities, discharges its authority and
Committee performs the role of whistleblowing champion for
manages its own activities. A yearly planner seeks to ensure the
the Group. A hotline is available for any employees who wish to
most important and current topics are discussed at meetings
raise concerns of wrongdoing in the workplace. The Board
during the year. The Board’s main activities throughout the year
receives regular reports on the functioning of the independent
are detailed on page 89.
reporting arrangements in place for any such matter raised.
B. Purpose and culture. The Company’s purpose, as a specialist
Division of Responsibilities
Emerging Markets investment manager, is to deliver long-term
investment outperformance for clients and generate value for F. Role of the Chair. The Chair was independent upon
shareholders through market cycles. Its strategy for doing so is appointment. He leads on the effectiveness of the Board by
set out in the Strategic report and includes, among other setting the agendas and timetable for meetings, and
matters, how in pursuing the objectives set out within the encouraging an open and constructive dialogue during
purpose, Ashmore ensures its culture and working practices meetings, inviting the views of all Board members. He ensures
align both with its purpose and its broader set of stakeholders that Board members receive accurate, timely and clear
through effective and entrepreneurial leadership. The Board information in his regular interactions with Executive Directors
receives regular reports on employees’ compliance with and the Company Secretary.
regulatory and risk management requirements, hears
G. Composition of the Board. The Board consists of two Executive
presentations and updates from different departments and
Directors, three Non-executive Directors and a Non-executive
offices and meets employees on an informal basis after each
Chair who was considered independent upon appointment to
Board meeting. These elements underpin Ashmore’s
the Board. Their responsibilities have been set out in writing and
assessment of its culture.
agreed by the Board and are available on the Group’s website
C. Resources and controls. It is the duty of the Board to ensure at: https://ir.ashmoregroup.com/corporate-governance. Their
that adequate resources are in place for the delivery of its roles and responsibilities are also further described on page 88
strategy over the long term. The use of those resources is set which show the division between the Board responsibilities and
out in a delegated authority framework, designed to ensure that the executive leadership of the Company. These roles and
decisions over those resources are taken by the right persons at responsibilities are reviewed annually. A Senior Independent
the right level with accountability to the Board. The Risk Director has been appointed and Jennifer Bingham led this
management section of this report further describes the year’s appraisal of the Chair. More details are given at page 94.
framework of controls by which Ashmore enables risk
H. Role of the Non-executive Directors. The Non-executive
assessment and risk management.
Directors’ engagement with management, their constructive
D. Stakeholder engagement. The Section 172 statement made at challenge and contribution to Board discussion are assessed as
pages 46 to 48 of this report includes examples of matters part of the Board’s annual effectiveness review. Their expected
considered by the Board during the year and what was taken minimum time commitment is set out in their appointment letters
into account when making those decisions, including and they are required to seek approval for any new external
engagement with shareholders and other stakeholders. The appointments in advance. During the year, the Nominations
Board’s monitoring and response to any Director’s potential Committee reviewed proposed external appointments, details of
conflict of interest is carried out by the Nominations Committee. which are set out in the Nominations Committee report on page
An agreement is in place with respect to the controlling 93. All Directors’ other appointments are listed at pages 80 to 81
shareholding of Mark Coombs where independence provisions and their attendance at meetings on page 80.
are in place. This is explained in more detail in the Directors’
I. Role of the Company Secretary. All Directors have access to the
report on page 128. Any Director with any concerns about the
advice and support of the Group Company Secretary and her
Board or management of the Company may have these
team. Through her, Directors can arrange to receive additional
recorded in theminutes.
briefings on the business, external developments and
professional advice independent of the Company, at the
Company’s expense.
Ashmore Group plc Annual Report and Accounts 2022 85
CORPORATE GOVERNANCE (CONTINUED)
## APPLYING THE PRINCIPLES OF THE GOVERNANCE CODE (CONTINUED)
Composition, Succession and Evaluation N. Fair, balanced and understandable assessment. When taken as
a whole, the Directors consider the Annual Report and Accounts
J. Appointments to the Board and succession planning.
is fair, balanced and understandable and provides information
TheNominations Committee report on pages 93 to 94 sets
necessary for shareholders to assess the Company’s
out its activities and areas of focus during the year, including
performance, business model and strategy. A description of
the recruitment of a new Non-executive Director, Board and
how the Audit and Risk Committee ensures a robust process is
Committee composition and progress on diversity and inclusion.
in place for ensuring that is so, is described on pages 90 to 92.
All the independent Non-executive Directors are members of
the Nominations Committee and the Chair of the Board is also O. Risk management and internal control framework. The Board is
Chair of the Committee, save where it considers the role of responsible for setting the Company’s risk appetite in line with
Board Chair. All Directors are subject to shareholder election or its long-term strategic objectives, and annually reviews the
re-election at each AGM, unless retiring at the conclusion of the effectiveness of the Company’s risk management and internal
meeting. None of the Non-executive Directors has served over control systems. The internal control framework is described
nine years on the Board. on pages 38 to 43. The Audit and Risk Committee has oversight
of the effectiveness of internal controls and for developing
K. Skills, experience and knowledge of the Board. During the year,
proposals in respect of overall risk appetite and tolerance as
the Nominations Committee commenced the process of
well as metrics to monitor the Group’s risk management
recruiting a new Non-executive Director based on an analysis of
performance. Further details are set out in the Audit and Risk
the skills, experience and knowledge needed. The Nominations
Committee report on pages 90 to 92 and a description of the
Committee report on page 93 gives further details of that
principal risks facing the Company is set out on pages 44 to 45.
recruitment process. Following the recruitment of Shirley
Garrood, a series of induction meetings were set up to enable Remuneration
her to gather further insights into the Company. There is a
P. Remuneration policies and practices. The Remuneration
programme of ongoing training for all Board members and
Committee is comprised of all the independent Non-executive
during the year there were a series of ‘deep dive’ presentations
Directors and chaired by Helen Beck. The Chair of the Board,
on a number of topics in addition to the regular programme of
who was independent on appointment, is also a member
presentations at Board meetings.
of theCommittee. The Group’s Remuneration policy is
L. Board evaluation. The internal Board evaluation, which took substantially the same for all Group employees and aimed
place during the year, is described in the Nominations at promoting the long-term and sustainable success of
Committee report on page 94, together with its outcomes. the Company. The Board believes that this aligns the
interests of both the Executive Directors and shareholders.
Audit, Risk, and Internal Control
TheRemuneration report on page 95 provides furtherdetails.
M. Internal and external audit. The Audit and Risk Committee
Q. Executive remuneration. The Remuneration Committee
currently comprises three independent Non-executive Directors
has responsibility for determining the policy for executive
and, on an interim basis, the Chair of the Board. From 21 April
remuneration and for setting remuneration for the Chair of the
2022 to 30 June 2022, following the resignation of David
Board, Executive Directors and senior management. No Director
Bennett as Chair of the Board, the Company did not comply
is involved in deciding their own remuneration and the
with Provision 24 of the Code which states that the Chair of the
remuneration of the Chair of the Board and the Non-executive
Board should not be a Committee member. Clive Adamson
Directors is designed to reflect their time commitment and
retained the role of Chair of the Audit and Risk Committee when
responsibilities. Further details are set out in the Remuneration
he took over as Chair of the Board. The intention was this was
report on pages 95 to 126.
an interim solution, while the task of recruiting a new Non-
executive Director was ongoing. Clive Adamson intends to hold R. Remuneration outcomes and independent judgement. Details of
that role until the AGM, when, subject to her election as a the composition and the work of the Remuneration Committee
Director and FCA approval, Shirley Garrood will succeed him as are reflected in its terms of reference and are set out in the
Chair of the Audit and Risk Committee and he will step down as Remuneration report.
a member of the Committee. Further details are set out in the
Nominations Committee report on page 93.
The Board delegates a number of responsibilities to the Audit
and Risk Committee, including oversight of the Group’s financial
reporting processes, internal control and risk management
systems and the work undertaken by the external and internal
auditors. The Committee also supports the Board’s consideration
of the Company’s viability statement and its ability to operate as
a going concern. The Audit and Risk Committee report on pages
90 to 92 describes the work of the Committee during the year
and how it discharged its duties and responsibilities.
86 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
## Corporate governance
## framework
plc Remuneration Committee
Terms of reference approved by the
Board. Determines compensation for
EDs, Code Staff and reviews
compensation for Control Staff
plc Board of Directors
Responsible for overall strategy, management and control. plc Nominations Committee
Schedule of matters reserved solely for its decision Terms of reference approved by the
Board. Makes recommendations to
the Board on Board membership and
governance structure in line with
corporate governance best practice
plc Audit and Risk Committee
Terms of reference approved by the
Board. Oversees the Group’s financial
plc Executive Directors
reporting processes, internal control
Schedule of matters delegated by the Board
and risk management systems and
auditors in line with corporate
governance bestpractice
Specialised Committees
Responsible for overseeing business, investments and internal controls.
Auditors
Terms of reference approved by executive management
– Investment Committees – Risk and Compliance
External:
– Pricing Methodology and Committee
Valuation Committee – Pricing Oversight Committee Independent assurance via audit of
– Product Committee – Foreign Exchange and Liquidity Group financial statements and audit
Management Committee of internal control procedures under
– GIPS Committee
ISAE 3402 and SSAE 18
– Awards Committee – IT Steering Group
– Disclosure Committee – Best Execution Committee
– Research Oversight Committee – ESG Committee
Internally resourced:
– Operating Committee
Independent assurance via audit
directed at specific departmental
control procedures
Senior management
Responsible for day-to-day management
Ashmore Group plc Annual Report and Accounts 2022 87
CORPORATE GOVERNANCE (CONTINUED)
## Roles of the Board
Executive roles Non-executive roles
Chief Executive Chair
Responsible for managing and leading Responsible for leading the Board and its
the business and its employees overall effectiveness
Chair of the fixed income, equities, healthcare and Building an effective and diverse Board
special situations investment committees with complementary skills which is
progressively refreshed
Developing an effective relationship
with the Chair and the Board Facilitating and encouraging an
effective contribution from all Board members
Leading the business towards
achievement of the strategy Ensuring the Board has clear, accurate
and timely information
Maintaining an effective dialogue
with shareholders and stakeholders Facilitating an annual evaluation of the Board,
its committees and individual Directors
Making business decisions (within the framework
of the Board’s delegated authorities)
Senior Independent Director
Group Finance Director A sounding board for the Chair
and an intermediary for the other Directors
Managing the Group’s capital, cash flow
and shareholders
andliquidity
Facilitating an annual review of the performance
Leading and overseeing the Finance, Middle Office
of the Chair
and IT functions, which are responsible for
Transaction Processing, Fund Administration,
Performance, Data and Client Reporting,
Information Technology development
andinfrastructure
Independent Non-executive Directors
Responsible for the Group’s financial reporting and
Providing oversight of, but not managing,
leading the annual budget process
thebusiness
Maintaining an effective dialogue with shareholders
Providing effective independent oversight
and analysts on the performance of the Company
and challenge of the executive management
Responsible for corporate development, including
Scrutinising the performance of
mergers and acquisitions
executive management
Managing the Group’s subsidiaries
The Company Secretary is responsible for advising the Board on all governance matters.
(The appointment or removal of the Company Secretary is a matter for the whole Board.)
88 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
## Board activity during the year
### In addition to its regular business, specific topics considered by the Board at its meetings
### this year included:
Standing agenda items:

| September 2021 | – Annual Review on the Effectiveness of Risk | – Declaration of Directors’ potential conflicts of |
| --- | --- | --- |
|  | Management and Internal Control Systems | interest and any significant additional time |
|  | – ICAAP report | commitments |
|  | – Distribution presentation | – Reports from Chairs of committees |

– Monthly management report
– Investor relations and communications
– Emerging Markets Healthcare opportunities – Strategy update
October 2021
presentation
Post-meeting:
– Operations and IT presentation
– ‘Meet the teams’ sessions
– Investor relations update
– Non-executive Directors’ private sessions
– AGM arrangements, results of proxy voting and
– Board evaluation (once a year)
governance agency reports
Board training:
– FCA Senior Managers and Certification Regime
– Cyber security
December 2021 – Annual review of Culture, Conduct and Diversity
– Directors’ duties
– Group strategy review
– Ongoing quarterly online training modules
– Annual review of delegated authorities and
matters reserved to the Board Deep dive presentations for Non-executive Directors:
– Modern Slavery Act statement
– Internal Audit review
– Chief Risk Officer review
– Compliance review
– Tax presentation
– Credit and Counterparty Risk
February 2022 – Review of Seed Capital Policy
– Review of FX and Liquidity Management
Framework policy and activities
– Update on ICAAP and new IFPR requirements
– Ashmore Saudi Arabia presentation
March 2022 – Board membership changes and revised
committee composition
– Approval of Important Business Services and
impact tolerances ahead of the introduction of
the FCA rules on Operational Resilience
April 2022 – Corporate Debt presentation
– Compliance officer report
– Renewal of the Group and Funds’ insurances
June 2022 – 2022/23 Budget
– Operational Resilience programme
– ESG presentation
Ashmore Group plc Annual Report and Accounts 2022 89
AUDIT AND RISK COMMITTEE REPORT
## To provide oversight
## and challenge
Meetings
During the year ended 30 June 2022, the Committee met four
This report outlines the activities of the Audit
times. Each meeting is divided into two sessions: the first
and Risk Committee for the financial year ended
addresses risk management and compliance reporting and the
30 June 2022. The Committee remains central to
second addresses financial and audit reporting. The GFD, Head of
the oversight of the Group’s financial reporting,
Risk Management and Control, Head of Internal Audit, Group Head
risk management, control and assurance processes
of Finance and Group Head of Compliance are invited to attend the
and internal and external audit.
relevant sessions of each meeting. The Chair of the Committee
typically holds one-to-one meetings prior to the Committee
Clive Adamson
meetings, with the attendees and the external auditor.
Chair
In assessing the various key matters relative to its terms of
Committee membership reference and to satisfy itself that the sources of assurance and
information the Committee has used to carry out its role to review,
The following Directors served on the Committee during
monitor and provide assurance or recommendations to the Board
the year and to the date of this report:
are sufficient and objective, the Committee has adopted an
– Clive Adamson (Chair);
integrated assurance approach. This approach relies on the work of
– Jennifer Bingham; the external auditor, and additionally on management assurances
– Helen Beck; and received through reports from the GFD, the Group Head of
– Shirley Garrood (from 1 August 2022). Compliance, the Head of Risk Management and Control, the Head
of Internal Audit, and the Group Head of Finance, and also via the
All are independent Non-executive Directors, save for
existing Ashmore governance framework such as specialised
Clive Adamson. Upon becoming Chair of the Board on
management committees. Other independent assurance is
21April 2022, Clive did not count as an independent
received from the compliance monitoring programme, Internal
Non-executive Director. The Code states that the Chair
Audit, and the externally audited ISAE 3402 report on the
of the Board should not be a member of the Audit and
controlenvironment.
Risk Committee. Therefore, for part of the year, the
Committee’s composition was not fully compliant with The Committee considered a range of standing topics throughout
the Code. An explanation is given in the Nominations the year, including product governance, balance sheet risks and risk
Committee report on pages 93 to 94. The attendance appetite metrics, subsidiary and funds reporting and governance.
record of Committee members is set out in the table The Committee also received reports on the Annual Review of Risk
onpage 80. Management and Internal Control Systems as well as special
topics such as Operational Resilience and the new IFPR
requirements. The Chair reports to the Board on the business of
each Committee meeting.
The Board is satisfied that for the year under review
For each of the half year and annual financial statements, a review
and going forward, Clive Adamson and Shirley Garrood
is undertaken by a panel comprising the GFD, the Head of Investor
are the Committee members with recent and relevant
Relations, the Group Company Secretary and the Group Head of
financial experience and the Committee as a whole
Finance to ensure that the reporting is ‘fair, balanced and
has competence relevant to the sector in which the understandable’, and other members of senior management attend
Company operates. Shirley Garrood will take over as appropriate. This review is taken into account by the Committee
as Chair of the Committee following the AGM, in advising the Board as to whether these criteria have been met.
subject to her election as Director and FCA approval,
Financial statements
and CliveAdamson will retire from the Committee
The Committee reviewed the 2022 Annual Report and Accounts,
on the samedate.
the interim results, and reports from the external auditor, KPMG
The terms of reference for the Committee can LLP, on the outcome of its reviews and audits in FY2021/22.
be found on Ashmore’s corporate website at:
Significant accounting matters
https://ir.ashmoregroup.com/corporate-governance
During the year, the Committee considered key accounting issues,
matters and judgements in relation to the Group’s financial
statements and disclosures. The principal areas of estimates and
judgements are disclosed in note 31 of the financial statements.
90 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT

GOVERNANCE

FINANCIAL STATEMENTS

## Other accounting matters

During the year, the Committee received communications from management and from the external auditor on other accounting matters. The Committee has also reviewed the adoption of the going concern basis in preparing the interim and year end consolidated accounts and considered the longer-term viability statement for the Group, which is described in more detail on page 43.

## 2018 UK Corporate Governance Code

A separate Corporate governance statement is included on pages 85 to 86 which includes explanation of how the Group has applied each of the Principles of the Code.

## External auditor

KPMG LLP (including its prior entity KPMG Audit plc) has acted as external auditor to Ashmore since the IPO in October 2006. The lead audit partner rotates every five years to assure independence. The Committee undertook a comprehensive tender process in March 2016. Mandatory audit firm rotation is required after 20 years and a re-tender must be conducted at least every 10 years. The Committee has no plans at present to re-tender the external audit process. For FY2021/22 Jatin Patel was, with the approval of the Committee, appointed as the new KPMG audit partner with responsibility for the audit of the Group. The outgoing partner, Thomas Brown, attended a final meeting in September 2021.

The external auditor provides reports at each Committee meeting on topics such as the control environment, key accounting matters and mandatory communications. An annual audit plan for the full year and a review plan for the interim statement are presented for the Committee's approval each year, covering key audit matters and scope. There were no new financial accounting Standards or Interpretations in issue and required to be adopted by the Group during the current year. However, the Committee recognises the ongoing scrutiny of companies' ESG-related disclosures and through its review of the Annual Report and Accounts it received confirmation that ESG material had been reviewed and approved by the CEO, who chairs the ESGC, which has oversight of the underlying ESG data. The Committee will maintain its focus on ESG in future due to the importance of this subject.

The Committee also receives presentations from the funds' auditors on the outcome of the fund audits for the year, including any key accounting matters and developments.

## External auditor independence

It is the responsibility of the Committee to monitor the performance, objectivity and independence of the external auditor. A policy is in place for permitted non-audit services, to ensure that these do not impair these requirements. In practice, the majority of such services provided to the Company by KPMG LLP are closely related to audit work. All contracts for non-audit services over £25,000 must be notified to and approved by the Chair of the Committee. During the year, approval was given for a review of Ashmore's half-year financial statements and for work on ISAE 3402. ISAE 3402 covers internal control systems and is applicable to Ashmore's offices in London and Dublin, in line with investment management industry standards.

In FY2021/22 the value of non-audit services provided by KPMG LLP amounted to £0.2 million (FY2020/21: £0.2 million). Non-audit services as a proportion of total fees paid to the auditor were approximately 21% (FY2020/21: 22%). The Committee considers this proportion acceptable. Other than as already described, the other non-audit services provided related to supplying mandatory assurance reports in relation to client assets to the FCA (as the regulator of Ashmore Investment Management Limited and Ashmore Investment Advisors Limited).

The assurance provided by the Group's external auditor on the items listed above is considered by the Committee to be strictly necessary in the interests of the business and, by their nature, these services could not easily be provided by a separate professional auditing firm. KPMG LLP does not supply tax compliance or advisory service to the Group. Independent tax advice is supplied by Deloitte LLP.

At the end of each Committee meeting, the Non-executive Directors meet with the external and internal auditors without the Executive Directors present to permit them to raise any matters of concern in confidence.

The Committee is required to assess the quality and effectiveness of the external audit process as well as the controls and procedures in place to ensure auditor independence and objectivity. Measures taken by the Committee included detailed questions for both management and the external auditor, and a review of the audit quality statistics. Based on this review, the Committee concurred with management's view that there had been appropriate focus and challenge of the primary areas of audit risk and assessed the quality of the audit to be satisfactory. The Committee was satisfied with the work of KPMG LLP and considered that it remained objective and independent. It therefore recommended to the Board that a resolution be put to shareholders for the reappointment of the auditor at the AGM.

## Internal controls and risk management systems

The Head of Risk Management and Control attends each meeting of the Committee and provides reports. These reports have addressed a number of risk-related topics and have demonstrated how the output of the different Investment, Risk and Compliance and Pricing and Valuation Methodology Committees' discussions throughout the period have been effective in highlighting, tracking and contributing towards managing key market, liquidity, credit, counterparty and operational risks. In particular, the Committee received reports on the treatment of assets impacted by the status of real estate investment in China and by the war in Ukraine. In relation to operational risk, the Committee continued to review and discuss the Group's Principal Risk Matrix which functions as an effective tool to highlight and monitor the principal risks facing the Group. During the year, the Committee reviewed the impact of joining NZAMI, the process of setting interim targets for funds and what the risks were around target setting and related measurements.

Ashmore Group plc Annual Report and Accounts 2022 91
AUDIT AND RISK COMMITTEE REPORT (CONTINUED)
## TO PROVIDE OVERSIGHT AND CHALLENGE (CONTINUED)
The Committee also received a report on, and conducted a review After due consideration, and in accordance with the Internal Audit
and evaluation of, the system of internal controls and risk Financial Services Code of Practice, the Committee remains
management operated within the Company pursuant to the satisfied that the quality, experience and expertise of the Internal
Guidance, prior to final review by the Board. Audit function is appropriate, that it is operating effectively for the
business and that it has adequate and appropriate resources to
During the year, the Committee received regular updates on
fulfil its remit.
the IFPR requirements which took effect from January 2022.
The Committee agreed to have a final ICAAP review for the year
Compliance
ended 30 June 2022. New rules and guidance from the FCA came
In order to ensure a co-ordinated reporting process with the Risk
into force on 31 March 2022, on Building Operational Resilience.
Management and Internal Audit functions, the Group Head of
This requires firms to introduce operational resilience mapping,
Compliance is invited to attend and present to the Committee.
testing and tolerances by no later than 31 March 2025.
Reports from Compliance include details of the Group’s relations
TheCommittee received regular progress updates.
with regulators, thecompliance monitoring programme, material
A detailed description of the risk management framework and the
breaches, errorsand complaints, retail conduct risk, anti-money
manner in which risks are identified and managed is set out on
laundering controls and sanctions compliance. The Committee
pages 38 to 45.
also approves the compliance monitoring programme and reviews
the Group’s procedures for ensuring compliance with regulatory
Internal audit
reporting requirements.
The Internal Audit function derives its authority from the Board and
operates under its own terms of reference that are reviewed each Information security
year. The Board has delegated oversight of the function to the
Information security (including cyber security) is identified as
Committee which is responsible for ensuring that it has adequate
a principal risk to the business which is subject to Ashmore’s
standing, is properly resourced and free of management or other
governance, policies and procedures and risk assessment.
restrictions.
The Committee receives annual updates from the Ashmore
The Head of Internal Audit has regular meetings with the Chair of IT Department on potential cyber security threats and how
the Committee and attends all meetings of the Committee. The Ashmore would respond to a significant event. During the
Committee continues to monitor the Internal Audit plan on an year the Committee also received an update on GDPR and
ongoing basis to ensure that it remains effective and relevant to compliancemonitoring.
the needs of the business and to ensure that it can be adapted or
ESEF reporting
changed if a particular focus area necessitates this.
The Committee noted DTR 4.1.14R, requiring the preparation
During the year, the Committee received presentations from
of the Group’s consolidated financial statements using the
Internal Audit on a number of topics including the Internal Audit
single electronic reporting format in accordance with ESEF.
plan for the year and the outcomes of any internal audits conducted
TheCommittee ensured that all necessary procedures to prepare
during the period under review. The Committee also received
the ESEF report had been completed, including involvement of a
presentations from Internal Audit on the implementation of the
specialist IT services provider.
assurance framework in the year and the results of the assurance
review over the effectiveness of the controls and mitigants in place Funds’ audits
for the principal risks. Based on the work described, and in
The Committee met with and received reports from the
accordance with the requirements of the Internal Audit Financial
independent auditors of Ashmore sponsored SICAV, US, Guernsey
Services Code of Practice, Internal Audit has provided the
and Cayman funds on the conduct of those audits and outcomes
Committee with its assessment of the overall effectiveness of
fromthem, including key accounting matters and developments,
Ashmore’s governance and risk and control framework and its
and no material issues were raised.
conclusions with regard to Ashmore’s adherence to its risk
appetiteframework. Audit and Risk Committee effectiveness
Internal Audit provides annual confirmations to the Committee on During the year, there was an evaluation of the effectiveness of
four areas: internal independence, Internal Audit’s ongoing the Board, its Committees and individual Directors. Following this
conformance with relevant professional standards, any potential evaluation, the Board concluded that the Committee works
conflicts of interest and the ongoing suitability of the Internal Audit effectively. Further details of the review are given on page94.
terms of reference. In addition, the Internal Audit Financial Services
Code of Practice recommends that committees should obtain an
Clive Adamson
independent and objective external assessment of the Internal
Chair of the Audit and Risk Committee
Audit function at least every five years, and that this assessment
should explicitly include whether Internal Audit conforms with the
1 September 2022
Internal Audit Financial Services Code of Practice. The Chair of the
Committee has recently overseen the process for appointing the
next external evaluation of the Internal Audit function’s External
Quality Assessment review, which will take place in the first half of
the next financial year.
92 Ashmore Group plc Annual Report and Accounts 2022
NOMINATIONS COMMITTEE REPORT

STRATEGIC REPORT

GOVERNANCE

FINANCIAL STATEMENTS

# To ensure a fair and balanced Board

**This report details the role of the Nominations Committee and the important work it has undertaken during the year, including the matters considered and steps taken by the Committee in the year ended 30 June 2022. Ashmore's focus has been on maintaining a strong, value-adding and effective Board, with a broad range of professional backgrounds, skills and perspectives.**

**Clive Adamson**

Chair

## Committee membership

The following Directors served on the Committee during the year and to the date of this report:

- David Bennett (to 20 April 2022)
- Clive Adamson
- Jennifer Bingham
- Helen Beck; and
- Shirley Garrood (from 1 August 2022).

David Bennett retired as Chair of the Board and Committee on 20 April 2022. Clive Adamson was appointed Chair of both the Board and the Committee with effect from 21 April 2022. Shirley Garrood joined the Board and the Committee on 1 August 2022.

David Bennett and Clive Adamson were both independent Non-executive Directors prior to taking up their appointments as Committee Chair within the meaning of the Code. The other Committee members are independent Non-executive Directors of the Board.

Only Committee members have the right to attend its meetings. Other individuals such as the Chief Executive, the Group Head of Human Resources, senior management and external advisers may attend meetings as and when appropriate. The attendance record of Committee members is set out in the table on page 80.

## Activities

During the year ended 30 June 2022, the Committee met five times and was fully compliant with the Code in respect of its own proceedings.

The Committee considered Non-executive Director succession planning during the year, focusing on diversity as well as cognitive and personal strengths. In doing so, the Committee considered the requirements of the Parker Review, the FCA Diversity and Inclusion Policy Statement and Listing Rule change and the FTSE Women Leaders Review. The Board already meets the gender recommendations as women comprise 50%. The Committee is focused on progress against the recommendation to have at least one director from a minority ethnic group. Details of the gender balance of the senior management and the workforce as a whole are provided on page 52. The Committee examined the composition of the Board and committees in December 2021 and again when considering the appointment of a new Board Chair, as further explained below.

The other significant matters considered are set out below.

Clive Adamson's term of appointment was due to expire in October 2021 at which point he had served as a Non-executive Director for six years. The Committee met without him present to consider extending his term by a further three years. The Code indicates that Non-executive Directors should not serve for more than nine years and Non-executive Directors that have served six years should be subjected to a rigorous review. Having reviewed the contribution he had made to the Company to that point and his extensive and relevant financial experience, the Committee was unanimously of the opinion that this extension should be made.

After being notified that David Bennett would be retiring from his roles at Ashmore, the Committee met to consider whether it was appropriate to appoint an existing Director to the role of Board Chair, or to seek external candidates. Having reviewed Clive Adamson's extensive and relevant financial experience, the Committee unanimously agreed to recommend to the Board that he, then the Senior Independent Director, should be the new Board Chair and Chair of the Nominations Committee. The Committee also agreed that he would retain his existing role as Chair of the Audit and Risk Committee on an interim basis. Both David Bennett and Clive Adamson recused themselves from participation in the meeting. The same meeting recommended that Jennifer Bingham become the Senior Independent Director and retain her responsibility as Director responsible for workforce engagement.

Ashmore Group plc Annual Report and Accounts 2022 93
NOMINATIONS COMMITTEE REPORT (CONTINUED)
In recommending to the Board that Clive Adamson be retained as The Committee is also tasked with considering significant
Chair of the Audit and Risk Committee on an interim basis, the new appointments for Non-executive Directors to ensure that
Committee considered that, among the existing Non-executive any additional time commitment does not compromise their
Directors, he had the most appropriate experience, and so should commitment to their roles at Ashmore and, as part of this, the
continue in that role whilst a successor was found. In this respect, Committee also notes when previous external roles come to an
the Committee noted that for a short period of time the Company end. During the year, the Committee considered various proposals
would not be complying with the Code requirement that the Chair for Non-executive Directors to take on other roles. Taking into
of the Board should not be a member of the Audit and Risk account the proposed time commitments of each of these new
Committee. Clive Adamson’s interim position as Chair of that roles, it was decided that they would not impair the Directors’
Committee will last until the AGM whereupon he will retire from commitment to Ashmore. Having confirmed that there were no
the Audit and Risk Committee and Shirley Garrood (subject to her conflicts of interests, these proposed appointments were
election at that meeting and approval from the FCA) will take over considered and approved. As of 1 September 2022, Helen Beck
as Chair of that Committee. has been appointed as a Non-executive Director of Irwin Mitchell
Holdings Limited, however, the other appointment is yet to
Prior to notice of David Bennett’s resignation, the Committee
takeeffect.
had commenced preparatory work to source potential candidates
by the end of 2022 with both accounting and financial services Following the triennial externally facilitated Board evaluation
experience, and to seek candidates with the right combination of in 2021, this year there was an internal Board evaluation in
skills and experience in the context of Ashmore’s commitment to accordance with the Code requirement. As part of this process,
diversity and inclusion. Whilst Shirley Garrood’s status as a theChair interviewed each Director and held discussions with
potential candidate arose from industry connections, in considering the Board, together with the Company Secretary, focusing on the
her appropriateness, the Committee focused on her extensive Board’s priorities during the year, the committees’ responsibilities
financial and asset management experience. The Committee also and how they were discharged, together with the quality of
undertook a thorough investigation into her skills, past experience, reporting. The Board was of the view that the Board and each of its
other time commitments and any potential conflict of interest. committees is operating soundly to fulfil its critical functions and
Therefore, whilst the Committee is aware of the Code expectation the Board is satisfied with the governance structures in place and
that an external search consultancy or open advertising should with the quality of information being provided. As Clive Adamson
generally be used for the sourcing of candidates, given the became Chair in April 2022, the evaluation of him as Chair,
suitability of Shirley Garrood, it was considered that departure from conducted by Jennifer Bingham in her capacity as Senior
this expectation was acceptable. Since joining the Board on Independent Director, focused on his brief period in the role,
1August 2022, Shirley Garrood has undertaken a comprehensive thefunctioning of that position beforehand, as well as looking
induction programme which included meetings with all department forward to 2023. Following this Board evaluation, the Board
heads to enable her to gather further insights into the firm and agreed areas of focus for the coming year, including shareholder
itsoperations. engagement ahead of the triennial Remuneration policy vote in
2023, refinements to the ‘meet the teams’ sessions to continue to
The Committee’s terms of reference require it to note any changes
strengthen the Board’s interaction with employees in overseas
to Ashmore’s leadership with a view to ensuring the Company’s
offices, and further Board visits to other local offices following the
continued ability to compete effectively in the marketplace.
first such trip planned for Singapore and Indonesia in 2022.
Duringthe year, changes to the roles held by senior management
were noted and considered to be of a standard that would leave
the Company able to compete to the standards required.
Clive Adamson
Chair of the Nominations Committee
1 September 2022
94 Ashmore Group plc Annual Report and Accounts 2022
REMUNERATION REPORT

# Ensuring alignment between employees and shareholders

**This report outlines the activities of the Remuneration Committee for the financial year ended 30 June 2022. The Committee is responsible for setting and overseeing the operation of the Remuneration policy for both Executive Directors and the wider workforce.**

**Helen Beck**

Chair

## Committee membership

The following Directors served on the Committee during the year and to the date of this report:

- Helen Beck (Chair);
- Clive Adamson;
- David Bennett (to 20 April 2022);
- Jennifer Bingham; and
- Shirley Garrood (from 1 August 2022).

David Bennett retired as Chair of the Board on 20 April 2022. Clive Adamson was appointed Chair of the Board with effect from 21 April 2022. Shirley Garrood joined the Board and the Committee on 1 August 2022.

David Bennett and Clive Adamson were both independent Non-executive Directors prior to taking up their appointments as Chair within the meaning of the Code. The other Committee members are independent Non-executive Directors of the Board. Only Committee members have the right to attend its meetings. Other individuals such as the CEO, the Group Head of Human Resources and external advisers may attend meetings as and when appropriate. The attendance record of Committee members is set out in the table on page 80.

## Activities

During the year ended 30 June 2022, the Committee met five times and was fully compliant with the Code in respect of its own proceedings.

At the beginning of FY2021/22 the Committee added more detailed ESG metrics into the annual performance measures for Executive Directors, confirming the Company's commitment to focus on this important area. Specifically these are to ensure adequate progress is made in relation to Ashmore's ambition to become carbon neutral, to ensure continued funding and support for the activities of The Ashmore Foundation and to support efforts to ensure that Ashmore's ESG ratings are appropriate, consistent with the peer group and do not fall below investors' expectations.

The Committee considered the performance of the Executive Directors and their personal contribution to business performance and outcomes, the performance of employees categorised as material risk takers under the FCA's AIFMD and BIPRU remuneration codes, and determined the appropriate remuneration outcomes for these groups. In addition the Committee oversaw the remuneration of all employees performing control function roles.

The Committee also evaluated and determined the vesting outcomes for equity awards made to Executive Directors which vest subject to the application of performance conditions.

Remuneration governance featured as a significant part of the Committee's activities through the period, in preparation for compliance with the FCA's IFPR and the associated MIFIDPRU remuneration regulations that come into effect for Ashmore for the performance year commencing 1 July 2022.

The application of a MIFIDPRU compliant remuneration policy alongside the existing AIFMD remuneration policy will introduce additional elements, including enhanced malus and clawback requirements during FY2022/23.

The Committee reviewed the share plan rules in regard to the treatment of shares which vest on termination of employment for Executive Directors. With immediate effect, the Committee has amended the award terms to ensure that new awards granted to Executive Directors in 2022 will normally vest no sooner than their original vesting date following termination of employment (except in the event of death) and will not be accelerated to the termination date.

The Committee has also amended the Share Plan rules to ensure that in a scenario where the application of malus and clawback is potentially to be considered, but a final determination has not yet been made, delivery of vested shares or the proceeds from the sale of vested shares can be delayed until a final conclusion has been reached.

Ashmore's remuneration policies apply in the majority to both Executive Directors and other employees, and so the Committee takes responsibility for considering the impact of changes to policy for all employees.

The Remuneration report for FY2021/22 has been reviewed and restructured by the Committee during the period, with the intention of providing shareholders with a clearer and more accessible presentation of both the Annual Report on Remuneration, and the elements of the report required to comply with reporting requirements. In response to shareholder feedback, the restructure also includes further disclosure in regard to the activities of the Committee and the many factors it considers when determining remuneration outcomes.

The report is presented in a number of sections:

1. An 'at a glance' summary, detailing this year's remuneration outcomes for the CEO and GFD.
2. An explanation of Ashmore's approach to remuneration.
3. The Remuneration Committee's review of the Executive Directors' performance for FY2021/22, including the key metrics behind that assessment.
4. Details of shares with additional performance conditions attached, vesting and being granted.
5. The Annual Report on Remuneration, which explains how the current Remuneration policy has been applied during the year and which will be subject to an advisory vote at the AGM on 14 October 2022.
6. Remuneration governance and the Directors' Remuneration policy, which was approved by shareholders at the October 2020 AGM for three years.

Ashmore Group plc Annual Report and Accounts 2022 95

STRATEGIC REPORT

GOVERNANCE

FINANCIAL STATEMENTS
REMUNERATION REPORT

## ENSURING ALIGNMENT BETWEEN EMPLOYEES AND SHAREHOLDERS (CONTINUED)

### Ashmore's approach to remuneration

The current Remuneration policy ensures that between 40% and 77% of the variable pay of Executive Directors is deferred for five years into Ashmore shares. Executive Directors have a low basic salary and no separate LTIP, this also results in a very high proportion of total remuneration being deferred into shares, and also being subject to malus and clawback policies.

Ashmore's team-based approach to investment management is mirrored across all areas of the business, with a collegiate, collaborative, pragmatic, client-focused and mutually supportive culture being the result. Maintaining this approach through market cycles, with continuity of personnel in the investment management teams, distribution and support functions, all of whom are remunerated through a similar pay structure.

The policy therefore allows the Remuneration Committee to vary the awards made to senior managers and Executive Directors in order to reflect the performance of both the business and the individual in any given period.

This approach supports the Group's strategy and provides significant cost flexibility in a cyclical business, thus aligning the interests of clients, shareholders and employees through market cycles, and, in combination with ongoing performance conditions, seeks to support and encourage long-term decision making.

### Performance during FY2021/22

The challenging geopolitical and macro economic environment has significantly contributed to the financial performance of the Group during the reporting period being weaker compared with the prior year.

Whilst it is recognised that the long-term growth opportunities across the Emerging Markets remain significant and that valuations for Emerging Markets assets are currently at highly attractive levels, investment performance in the period has suffered.

Relative to the Group's key performance measures during the year and in comparison to the prior period, AuM dropped by 32%, EBIT dropped by 54% and the percentage of funds outperforming relative to their benchmarks dropped over one, three and five years.

However, as noted in detail elsewhere in this report, there are a number of areas which have been well managed during the year: the disciplined approach to operating costs, substantial progress made in relation to ESG initiatives, the increasing significance of the local asset management businesses and the continued strong governance and control framework.

### Performance assessment and bonus awards for FY2021/22

The financial performance of the Group is weaker relative to the prior period, and therefore given the overall cap on VC as a percentage of profits, the amount available for VC has also reduced proportionately.

However, in addition to this proportionate reduction in the amount available, the Remuneration Committee has determined that in order to further reflect the shareholder experience and financial performance in the period the VC percentage should be reduced to 21.5% of EBVCIT (FY2020/21: 22%).

As can be seen in more detail on page 30, this has been a challenging year, with AuM development, investment performance and profitability over the period, which together form a large part of the measurement of the CEO's performance, not being at a satisfactory level. Despite the good work that has been done by the CEO in many other areas, the outcome of the Remuneration Committee's deliberations was to exercise its discretion to not make an award to the CEO this year.

The GFD took on incremental responsibility during the period for middle office operations and information technology and demonstrated strong personal performance, but in a business with reduced profitability the Committee determined that his bonus should be reduced by 6% relative to FY2020/21 to £800,000.

The Remuneration Committee considered the performance of the Executive Directors in the round, taking into account their performance criteria, and determined that the outcomes for the Executive Directors are fair, and therefore there is no justification to consider applying malus or clawback to current or prior year awards.

### Base salary for FY2022/23

The Remuneration Committee and management team have spent considerable time during the period reviewing basic salaries for all employees, including Executive Directors.

The Directors Remuneration Policy currently caps basic salaries for Executive Directors at £120,000, however, in practice basic salaries for Executive Directors have been capped at £100,000 since the Company listed in 2006.

In order to reflect the GFD's significant increase in responsibilities during FY2021/22, as noted above, the Remuneration Committee has determined that his basic salary should increase in FY2022/23 to £120,000. The CEO's basic salary has not been increased.

Increases in basic salaries for employees categorised as material risk takers under the FCA's AIFMD and BIPRU remuneration codes were also approved by the Remuneration Committee at similar levels, as were increases for a significant number of other employees, which will be reported in the 2022/23 Annual Report on Remuneration.

### Directors' Remuneration policy

As noted on page 119 the Company has a comprehensive shareholder engagement process.

The current Directors' Remuneration policy was approved by shareholders in October 2020. In advance of the triennial binding shareholder vote on the policy in 2023, I look forward to consulting with stakeholders including shareholders, in order that consideration can be given to their views in formulating any required or desirable changes.

Together with my colleagues on the Remuneration Committee I would welcome your support for the 2022 Annual Report on Remuneration.

**Helen Beck**

Chair of the Remuneration Committee

1 September 2022

96 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
## Remuneration at a glance
REMUNERATION REPORT
for the year ending 30 June 2022
## ENSURING ALIGNMENT BETWEEN EMPLOYEES AND SHAREHOLDERS
## (CONTINUED)
The Chief Executive Officer’s remuneration outcomes The Group Finance Director’s remuneration outcomes
The CEO was not awarded a bonus for the year ending 30 June The GFD has voluntarily elected to defer for five years the
2022, reflecting overall business and financial performance during maximum 50% of his cash bonus into an equivalent value of
As can be seen in more detail on page 30, this has been a challenging the period and the Remuneration Committee’s strict application restricted shares, and as a result will receive a matching
Ashmore’s approach to remuneration
year, with AuM development, investment performance and profitability of its discretion. restricted share award. The GFD’s annual bonus comprising cash
The current Remuneration policy ensures that between 40% and
over the period, which together form a large part of the measurement and restricted share awards at grant value for FY2021/22 is
77% of the variable pay of Executive Directors is deferred for five Shares awarded to the CEO in 2016 reached their vesting date
of the CEO’s performance, not being at a satisfactory level. Despite the £1,040,000 (FY2020/21: £1,105,000).
years into Ashmore shares. Executive Directors have a low basic during FY2021/22. A proportion of these awards were subject to
good work that has been done by the CEO in many other areas, the
salary and no separate LTIP, this also results in a very high performance conditions, based on investment performance, Shares awarded to the GFD in 2016 reached their vesting date
outcome of the Remuneration Committee’s deliberations was to
proportion of total remuneration being deferred into shares, and increasing AuM, profitability and relative TSR and partially vested during FY2021/22. A proportion of these awards were subject to
exercise its discretion to not make an award to the CEO this year.
also being subject to malus and clawback policies. once these conditions had been applied. In addition, the CEO performance conditions, based on investment performance,
The GFD took on incremental responsibility during the period for received £103,010 in dividend equivalents related to the 2016 increasing AuM, profitability and relative TSR, and partially vested
Ashmore’s team-based approach to investment management is
middle office operations and information technology and awards which were rolled up and paid to the extent the once these conditions had been applied. In addition, the GFD received
mirrored across all areas of the business, with a collegiate,
demonstrated strong personal performance, but in a business with underlying awards vested. £51,505 in dividend equivalents related to the 2016 awards which
collaborative, pragmatic, client-focused and mutually supportive
reduced profitability the Committee determined that his bonus were rolled up and paid to the extent the underlying awards vested.
culture being the result. Maintaining this approach through market
should be reduced by 6% relative to FY2020/21 to £800,000.
cycles, with continuity of personnel in the investment management
teams, distribution and support functions, all of whom are The Remuneration Committee considered the performance of the Pensions Pensions
remunerated through a similar pay structure. Executive Directors in the round, taking into account their
Taxable benefits Taxable benefits
performance criteria, and determined that the outcomes for the
The policy therefore allows the Remuneration Committee to vary the Annual cash bonus Annual cash bonus
Executive Directors are fair, and therefore there is no justification to
awards made to senior managers and Executive Directors in order
Annual bonus deferred Annual bonus deferred
consider applying malus or clawback to current or prior year awards.
to reflect the performance of both the business and the individual in
into equity into equity
any given period. Base salary for FY2022/23
Annual bonus deferred Annual bonus deferred
This approach supports the Group’s strategy and provides significant The Remuneration Committee and management team have spent into equity, with additional into equity, with additional
cost flexibility in a cyclical business, thus aligning the interests of considerable time during the period reviewing basic salaries for all performance conditions performance conditions
clients, shareholders and employees through market cycles, and, in employees, including Executive Directors.
combination with ongoing performance conditions, seeks to
The Directors Remuneration Policy currently caps basic salaries for
support and encourage long-term decision making.
Executive Directors at £120,000, however, in practice basic salaries
Performance during FY2021/22 for Executive Directors have been capped at £100,000 since the
Chief Executive Officer – variable remuneration Comparison of total remuneration and
Company listed in 2006.
The challenging geopolitical and macro economic environment has 1 2
outcomes over time dividends paid
significantly contributed to the financial performance of the Group In order to reflect the GFD’s significant increase in responsibilities
The chart below shows variable remuneration awarded to the The chart below compares the annual total cost of remuneration
during the reporting period being weaker compared with the prior year. during FY2021/22, as noted above, the Remuneration Committee
CEO each year between 2011 and 2022. As can be seen, the paid to employees, comprising personnel expenses and variable
has determined that his basic salary should increase in FY2022/23
Whilst it is recognised that the long-term growth opportunities
Remuneration Committee exercises its discretion in setting the compensation, with the value of ordinary dividends paid to
to £120,000. The CEO’s basic salary has not been increased.
across the Emerging Markets remain significant and that valuations
annual level of award at an appropriate level based on the shareholders in each year.
for Emerging Markets assets are currently at highly attractive Increases in basic salaries for employees categorised as material risk
performance of the business.
levels, investment performance in the period has suffered. takers under the FCA’s AIFMD and BIPRU remuneration codes were %
also approved by the Remuneration Committee at similar levels, as 12
Relative to the Group’s key performance measures during the year 90
were increases for a significant number of other employees, which will 10
and in comparison to the prior period, AuM dropped by 32%, EBIT 80
be reported in the 2022/23 Annual Report on Remuneration.
70
dropped by 54% and the percentage of funds outperforming 8
60

| relative to their benchmarks dropped over one, three and five years. | Directors’ Remuneration policy |  |  |
| --- | --- | --- | --- |
|  |  | 6 | 50 |
|  | As noted on page 119 the Company has a comprehensive |  | 40 |

However, as noted in detail elsewhere in this report, there are a
4
30
shareholder engagement process.
number of areas which have been well managed during the year:
20
2
the disciplined approach to operating costs, substantial progress The current Directors’ Remuneration policy was approved by 10
0 0
made in relation to ESG initiatives, the increasing significance of the shareholders in October 2020. In advance of the triennial binding Chief Executive Officer – Remuneration outcomes Chief Executive Officer – Remuneration outcomes
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
local asset management businesses and the continued strong shareholder vote on the policy in 2023, I look forward to consulting with over time over time
governance and control framework. £m
stakeholders including shareholders, in order that consideration can be
100
Bonus accepted Bonus received Bonus awarded Dividends paid in the yearTotal remuneration
given to their views in formulating any required or desirable changes.
Performance assessment and bonus awards for FY2021/22
Salary 91% Salary 9%
Together with my colleagues on the Remuneration Committee I would
The financial performance of the Group is weaker relative to the prior
1. This chart includes data on shares awarded between 2010 and 2016 which vested between 2015 and 2021. No cash bonus or shares were awarded in 2014, 2020 or 2022 to reflect business
welcome your support for the 2022 Annual Report on Remuneration. 8% 1%
period, and therefore given the overall cap on VC as a percentage of performance and the Remuneration Committee’s application of strict discretion. The chart will be updated in future years to show the vesting outcomes for shares awarded from 2016 onwards.
profits, the amount available for VC has also reduced proportionately. 2. Dividends includes the estimated cost of the proposed final dividend for FY2021/22. 1% 0%
20% 0%
However, in addition to this proportionate reduction in the amount Helen Beck
available, the Remuneration Committee has determined that in order to Chair of the Remuneration Committee
further reflect the shareholder experience and financial performance in 46% 0%
1 September 2022

| the period the VC percentage should be reduced to 21.5% of EBVCIT |  |  |  |  |  |  | Ashmore Group plc Annual Report and Accounts 2022 97 |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (FY2020/21: 22%). |  | 2011 | 2012 | 2013 | 2014 | 2015 |  | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 |
|  | 24% 0% |  |  |  |  |  |  |  |  |  |  |  |  |  |

Bonus awarded – includes cash paid in the year and restricted, bonus and matching
96 Ashmore Group plc | Annual Report and Accounts 2022 Ashmore Group plc | Annual Report and Accounts 2022 97
shares at grant value
Bonus received – includes cash paid in the year and the vesting value of any shares
five years later
Bonus accepted – shows the final amount accepted by the CEO after any waivers
to charity or for the general benefit of staff
REMUNERATION REPORT (CONTINUED)
## Ashmore’s approach to remuneration
### The Remuneration Committee is guided by a clear set of remuneration principles, with a
### comprehensive approach to determining variable pay outcomes.
These principles assist the Committee in determining its policy and practices, and are in compliance with Provision 40 of the Code.
1. Discretion and flexibility The Remuneration Committee determines annual
Variable remuneration is not formulaic or capped at an individual bonus awards based on a balanced scorecard of
level, albeit there is a cap at an aggregate level, and as such the factors at both the Group and individual level,
Remuneration Committee has complete discretion to ensure that and applies discretion rather than a formulaic
awards reflect business and individual performance, thus the
approach in order to deliver outcomes which
behavioural risk arising from target based incentive plans is
reflect the best value for shareholders.
not present.
Factors considered include:
Malus and clawback may be applied by the Remuneration
Committee to all elements of variable remuneration.
Financial
The Remuneration Committee is able to apply an ex-ante risk
adjustment to the bonus pool to reflect any concerns arising. – Group financial performance
– Group EBIT
– Movement in management fee margins
– Movement in assets under management
2. Alignment with stakeholders
– Absolute and relative investment performance for each
Base salaries are capped and set at the lower end of market levels
investment theme over one, three and five years
to ensure fixed costs are tightly controlled.
– Cost management
On an annual basis the bonus pool is derived solely from profits
made in the year and has been capped at 25% of EBVCIT,
ensuring predictability of overall outcomes. Non-Financial
Up to 77% of VC is delivered in Ashmore shares, restricted and – Progress in relation to the Group’s strategic objectives
deferred for five years.
– ESG matters
A significant proportion of Executive Directors’ VC will only vest
– Employee turnover, retention of key employees, recruitment
subject to the achievement of stretching performance targets,
and succession planning and employee diversity
closely aligned with the Group’s KPIs.
– Culture and conduct risk indicators
Remuneration governance
3. Consistency across the Group
– The overall VC pool available in the period
The clear and simple Remuneration policy applies to all Ashmore
– Compliance with relevant regulatory and corporate
employees, including Executive Directors, which is a material
governance requirements
factor in defining and shaping both the Remuneration policy and
– Input from the Group Head of Compliance and the Head of
Ashmore’s culture.
Risk Management and Control regarding organisational and
Executive Directors receive the same level of pension
individual performance in these areas over the year
contributions as other employees.
– Whether any instances have occurred that may warrant
the application of malus or clawback to previously
granted awards
4. Pay for long-term performance
The Remuneration Committee considers the performance of
Executive Directors and senior managers over the long term,
taking account of progress over a multi-year period, annual
performance in the context of the business and progress
made towards both its strategic objectives and its KPIs.
Awards are subject to performance conditions over a five-year
performance period.
98 Ashmore Group plc Annual Report and Accounts 2022
98 Ashmore Group plc | Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
REMUNERATION REPORT (CONTINUED)
## Ashmore’s approach to remuneration
### Key business metrics aligned to long term performance, delivering a strong equity
### ownership culture.
### Vesting of restricted share awards To align with, encourage and maintain
### The Remuneration Committee is guided by a clear set of remuneration principles, with a
### is contingent on meeting stringent Ashmore’s equity ownership culture,
### comprehensive approach to determining variable pay outcomes.
### long-term performance conditions, employees and Executive Directors may
These principles assist the Committee in determining its policy and practices, and are in compliance with Provision 40 of the Code.

|  |  | clearly aligned with the achievement | elect to reduce their annual cash bonus |
| --- | --- | --- | --- |
|  |  | of the Group’s strategic objectives and | by up to 50%, and in exchange receive an |
| 1. Discretion and flexibility | The Remuneration Committee determines annual |  |  |
|  |  | KPIs, leading to a proportionality of | equivalent value of restricted shares, |
| Variable remuneration is not formulaic or capped at an individual | bonus awards based on a balanced scorecard of |  |  |
|  |  | reward outcomes. | which are in turn matched with a further |
| level, albeit there is a cap at an aggregate level, and as such the | factors at both the Group and individual level, |  |  |
| Remuneration Committee has complete discretion to ensure that | and applies discretion rather than a formulaic |  | award of restricted shares. |

awards reflect business and individual performance, thus the
approach in order to deliver outcomes which
behavioural risk arising from target based incentive plans is The remuneration model generates strong retention
reflect the best value for shareholders.
not present. AuM development of employees, who are able to build up a meaningful
Factors considered include:
Malus and clawback may be applied by the Remuneration shareholding in the firm over time, thus aligning them with
Compound increase in AuM (US$bn)
Committee to all elements of variable remuneration. the long-term interests of our clients, shareholders and their
Financial

| The Remuneration Committee is able to apply an ex-ante risk |  |  | colleagues, while also complying with relevant remuneration |
| --- | --- | --- | --- |
|  | – Group financial performance | 64.0 |  |
| adjustment to the bonus pool to reflect any concerns arising. |  |  | regulations and encouraging behaviours consistent with |
|  | – Group EBIT | 94.4 | Ashmore’s culture and strategy. |
|  | – Movement in management fee margins | 83.6 |  |

The five-year deferral and cliff vesting of share awards also
– Movement in assets under management 91.8 provides a smoothing of income over time which again aids
2. Alignment with stakeholders
– Absolute and relative investment performance for each retention of employees through market cycles.
Base salaries are capped and set at the lower end of market levels 73.9
investment theme over one, three and five years
to ensure fixed costs are tightly controlled.
– Cost management
On an annual basis the bonus pool is derived solely from profits
made in the year and has been capped at 25% of EBVCIT,

| ensuring predictability of overall outcomes. | Non-Financial | Investment performance |  |
| --- | --- | --- | --- |
| Up to 77% of VC is delivered in Ashmore shares, restricted and |  |  | 40% |
|  | – Progress in relation to the Group’s strategic objectives | % of AuM outperforming benchmarks |  |

deferred for five years.
– ESG matters
A significant proportion of Executive Directors’ VC will only vest Approximately 40% of outstanding shares
– Employee turnover, retention of key employees, recruitment
subject to the achievement of stretching performance targets, 48% are either owned directly or as restricted
and succession planning and employee diversity
closely aligned with the Group’s KPIs. 28% share awards by employees, who average
– Culture and conduct risk indicators
over eight years of service
Remuneration governance
3. Consistency across the Group
– The overall VC pool available in the period
The clear and simple Remuneration policy applies to all Ashmore
– Compliance with relevant regulatory and corporate
Profitability
employees, including Executive Directors, which is a material
governance requirements
factor in defining and shaping both the Remuneration policy and Diluted EPS performance relative to
– Input from the Group Head of Compliance and the Head of
Ashmore’s culture.
Emerging Markets indices (%)
Risk Management and Control regarding organisational and
Executive Directors receive the same level of pension
individual performance in these areas over the year
contributions as other employees.
– Whether any instances have occurred that may warrant (11)
the application of malus or clawback to previously 23
granted awards
3
4. Pay for long-term performance
11
The Remuneration Committee considers the performance of
Executive Directors and senior managers over the long term, (10)
taking account of progress over a multi-year period, annual
performance in the context of the business and progress
made towards both its strategic objectives and its KPIs.
Awards are subject to performance conditions over a five-year
performance period.
2022 2022
2021 2021
Ashmore Group plc Annual Report and Accounts 2022 99

|  | 2020 2020 |  |  |
| --- | --- | --- | --- |
|  | 5 years 2019 2019 |  |  |
|  | 3 years 2018 2018 |  |  |
| 98 Ashmore Group plc \| Annual Report and Accounts 2022 |  | 83.6 | Ashmore Group plc \| Annual Report and Accounts 2022 99 |

REMUNERATION REPORT (CONTINUED)

# Review of performance over the period

for the year ending 30 June 2022

Financial measures

Group financial performance, including that reported results are a fair reflection of underlying performance and the Company's liquidity and overall financial position

Committee assessment

During FY2021/22 adjusted net revenues declined by 13% to £257.2 million (FY2020/21: £296.6 million) and adjusted EBITDA fell by 16% to £164.3 million (FY2020/21: £195.7 million). AuM fell by 32% year-on-year to US$64.0 billion. Continued focus on cost management meant that the adjusted EBITDA margin was 64% (FY2020/21: 66%). Diluted EPS declined by 63% to 12.6p, as a result of unrealised mark-to-market losses on the Group's seed capital investments. The Group's strong and liquid balance sheet was maintained, with capital resources of £788.7 million and excess regulatory capital of £663.5 million.

The Remuneration Committee is satisfied the Group has been profitable over the period and has sufficient funds available to pay employees bonuses without any negative impact to the Company's liquidity and overall financial position.

Group EBIT

2021/22: £119.2m

2020/21: £258.3m

Movement in management fee margins

2021/22: 39 bps

2020/21: 41bps

The net management fee margin declined by two basis points compared with the prior year period but was stable during the 12 months. The year-on-year movement is attributable to the impact of higher margin intermediary retail net outflows (one basis point) and the effect of product mix, competition and other factors (one basis point).

There was no overall impact from changes in AuM by investment theme, with the positive effects of higher equities AuM, lower margin overlay redemptions and capital raising in alternatives being offset by lower AuM in the other fixed income themes. Similarly, flows in and out of large mandates did not result in an aggregate change in the Group's revenue margin compared with the prior year, with new mandates and top-ups countered by redemptions from other institutional accounts.

Cost management

Total operating costs of £98.5 million (FY2020/21: £104.3 million) include £1.4 million of expenses incurred by seeded funds that are required to be consolidated (FY2020/21: £1.7 million). On an adjusted basis, taking into account the impact of seed capital and the VC accrual on FX translation losses, operating costs reduced by 7% compared with the prior year period. Adjusted operating costs fell by 8% at constant FY2020/21 exchange rates. Adjusted operating costs before VC were 5% higher at £51.5 million (FY2020/21: £49.0 million).

100 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
REMUNERATION REPORT (CONTINUED)
## Review of performance over the period
for the year ending 30 June 2022
Financial measures Committee assessment
Absolute and relative Absolute performance by theme
investment performance
% AuM outperformance within each theme as at 30 June 2022
for each of the principal
By AuM 1 year By AuM 3 years By AuM 5 years
Financial measures Committee assessment
investment themes over
External debt 40% External debt 25% External debt 48%
Group financial performance, During FY2021/22 adjusted net revenues declined by 13% to £257.2 million (FY2020/21: £296.6 one, three and five years
including that reported million) and adjusted EBITDA fell by 16% to £164.3 million (FY2020/21: £195.7 million). AuM fell Local currency 91% Local currency 55% Local currency 96%
results are a fair reflection of by 32% year-on-year to US$64.0 billion. Continued focus on cost management meant that the Corporate debt 0% Corporate debt 11% Corporate debt 11%
underlying performance and adjusted EBITDA margin was 64% (FY2020/21: 66%). Diluted EPS declined by 63% to 12.6p, as a
Blended debt 38% Blended debt 11% Blended debt 19%
the Company’s liquidity and result of unrealised mark-to-market losses on the Group’s seed capital investments. The Group’s
Equities 24% Equities 24% Equities 50%
overall financial position strong and liquid balance sheet was maintained, with capital resources of £788.7 million and
Overall 45% Overall 28% Overall 48%
excess regulatory capital of £663.5 million.
The Remuneration Committee is satisfied the Group has been profitable over the period and has In fixed income, local currency and investment grade products are performing well and in equities
sufficient funds available to pay employees bonuses without any negative impact to the frontier market products are performing well. Other investment themes are underperforming
Company’s liquidity and overall financial position. relative to benchmarks with 45% of AuM outperforming over one year and 28% over three years.
48% of assets are outperforming benchmarks over five years.
Group EBIT 2021/22: £119.2m
Relative performance by theme (quartiles)
2020/21: £258.3m
1 year 3 years 5 years
Movement in management 2021/22: 39 bps
External debt Q4 Q4 Q4
fee margins
2020/21: 41bps Local currency Q2 Q2 Q2
The net management fee margin declined by two basis points compared with the prior year period Corporate debt Q4 Q4 Q4
but was stable during the 12 months. The year-on-year movement is attributable to the impact of
Blended debt Q4 Q4 Q4
higher margin intermediary retail net outflows (one basis point) and the effect of product mix,
Frontier Markets equity Q1 Q2 Q2
competition and other factors (one basis point).
All Cap equity Q4 Q2 Q1
There was no overall impact from changes in AuM by investment theme, with the positive
Active equity Q3 Q3 Q2
effects of higher equities AuM, lower margin overlay redemptions and capital raising in
alternatives being offset by lower AuM in the other fixed income themes. Similarly, flows in and Investment performance relative to peers remains positive for local currency and frontier equity
out of large mandates did not result in an aggregate change in the Group’s revenue margin over one, three and five years. All cap equity is performing well over three and five years, and
compared with the prior year, with new mandates and top-ups countered by redemptions from active equity over five years. External, Corporate and Blended debt are underperforming over one,

|  | other institutional accounts. |  | three and five years. |
| --- | --- | --- | --- |
| Cost management | Total operating costs of £98.5 million (FY2020/21: £104.3 million) include £1.4 million of expenses |  |  |
|  |  | Movement in AuM for each | Opening AuM at 30 June 2021 was US$94.4bn |

incurred by seeded funds that are required to be consolidated (FY2020/21: £1.7 million). On an
of the principal investment
adjusted basis, taking into account the impact of seed capital and the VC accrual on FX translation Year end AuM was US$64.0bn
themes
losses, operating costs reduced by 7% compared with the prior year period. Adjusted operating AuM Gross Gross AuM
30 June 2021 Performance subscriptions redemptions Net flows 30 June 2022
costs fell by 8% at constant FY2020/21 exchange rates. Adjusted operating costs before VC were
US$bn US$bn US$bn US$bn US$bn Reclass US$bn
5% higher at £51.5 million (FY2020/21: £49.0 million).
External debt 18.7 (4.2) 3.7 (3.8) (0.1) – 14.4
Local currency 31.9 (3.2) 3.5 (10.8) (7.3) (0.8) 20.6
Corporate debt 11.3 (3.2) 0.9 (2.2) (1.3) – 6.8
Blended debt 23.4 (5.2) 2.1 (6.4) (4.3) 0.5 14.4
Equities 7.7 (0.7) 2.7 (3.4) (0.7) – 6.3
Alternatives 1.4 (0.1) 0.2 – 0.2 – 1.5
Total 94.4 (16.6) 13.1 (26.6) (13.5) (0.3) 64.0
Investment performance during the period contributed to 55% of the reduction in AuM with net
redemptions contributing 45%.
Ashmore Group plc Annual Report and Accounts 2022 101
100 Ashmore Group plc | Annual Report and Accounts 2022 Ashmore Group plc | Annual Report and Accounts 2022 101
REMUNERATION REPORT (CONTINUED)

# REVIEW OF PERFORMANCE OVER THE PERIOD (CONTINUED)

for the year ending 30 June 2022

Non-financial measures

Progress in relation to the Company's strategic objectives

Committee assessment

Phase 1: Establish Emerging Markets asset class

The Emerging Markets allocation opportunity remains substantial, but challenging market conditions, particularly following Russia's invasion of Ukraine in February 2022, meant that investors globally sought to reduce risk.

Phase 2: Diversify investment themes and developed world capital sources

Ashmore's equities business has grown, increasing its share of AuM from 8% to 10% over the year.

The fixed income business continues to diversify, with investment grade products increasing from 11% to 14% of total fixed income AuM.

Broad market risk aversion, particularly in the second half, led to intermediary retail AuM falling from 8% to 5% of AuM.

Phase 3: Mobilise Emerging Markets capital

The local platforms proved resilient, with aggregate AuM falling by only 3%. Ashmore Colombia raised a third private equity fund and continues to target additional capital to invest in real assets. AuM sourced from Emerging Markets domiciled clients increased from 26% to 27% over the year.

Overall progress towards these three strategic goals has continued through FY2021/22, albeit progress slowed relative to the prior period as a result of broad market risk aversion.

Environmental, social and governance matters

During FY2021/22, Ashmore became a signatory to NZAMI and has recently submitted interim targets. Significantly enhanced disclosure is provided on climate-related risks and opportunities, including in relation to how the Group has offset prior year GHG emissions through The Ashmore Foundation, supporting projects in developing countries with environmental and social benefits. In addition, a more detailed explanation has been provided in relation to how the Board has considered the Group's stakeholders in its decision making, which can be found in the Section 172 statement on pages 46 to 48.

The Board previously approved an annual charitable contribution equivalent to 0.5% of the Group's profit before tax. This means that in respect of FY2021/22, the Group will make a payment of £0.6 million (FY2020/21: £1.0 million) to The Ashmore Foundation and other charitable activities.

Ashmore improved its Sustainalytics ESG rating during the year and moved from the 'medium' to 'low' ESG risk category. It has maintained an AA ESG rating from MSCI and is a member of the FTSE4Good equity index.

102 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT

GOVERNANCE

FINANCIAL STATEMENTS

# **Non-financial measures**

Employee turnover, retention of key employees, recruitment and succession planning

# **Committee assessment**

The Group's permanent average headcount increased slightly over FY2021/22 to 305 employees, as a result of local office growth, of which 299 are involved in investment management-related activities (FY2020/21 averages: 301 and 295, respectively), demonstrating strong cost control.

Employee turnover increased during FY2021/22, after a period of suppression during COVID-19, with unplanned turnover for the Group excluding the subsidiaries at 8.3% (FY2020/21: 3.7%) and at 10.5% including the subsidiaries (FY2020/21: 6.6%); the increase including subsidiaries reflects the different nature of the employment environments the subsidiaries operate in.

During the period succession plans were implemented for four roles, two Non-executive Directors and two senior management roles with a smooth transition between individuals taking place.

The Group has continued to monitor and take positive steps in relation to diversity and inclusion matters, with initiatives underway to support the development of the pipeline of under-represented groups into the workplace. The Group successfully returned to predominantly office-based working during the period, after COVID-19, which has further reinforced Ashmore's team based culture.

The Group has been successful in its recruitment activities, and has been able to hire experienced and appropriately qualified staff where and when required.

The GFD assumed additional incremental responsibility for the Middle Office Operations and Information Technology functions during the period. These have been managed effectively since his increase in responsibility.

The Remuneration Committee is satisfied that the Group is managed effectively and is adequately resourced.

Culture and conduct risk indicators

The Remuneration Committee reviews a dashboard of indicators on an annual basis which seek to measure and monitor aspects of organisational culture. During FY2021/22 24 indicators were reported on under the headings of 'tone from the top', incentive structures and remuneration, effectiveness of management and governance and individual accountability. There were no matters of concern arising during FY2021/22 that would warrant the Remuneration Committee questioning the management of the Group or indicating poor organisational culture or conduct risks.

Ashmore Group plc Annual Report and Accounts 2022 103
REMUNERATION REPORT (CONTINUED)
## Remuneration Committee's consideration
## and risk adjustment
The Remuneration Committee determines the VC pool based on a balanced scorecard of factors at the Group level, and applies discretion
rather than a formulaic approach in order to deliver outcomes which reflect the best value for shareholders.
Remuneration governance Committee assessment
The overall bonus pool available in the The Remuneration Committee is satisfied the Group has been profitable over the period and has
period, including within that the sum sufficient funds available to pay staff bonuses without any negative impact to the Company’s
required to fund bonuses for staff liquidity and overall financial position.
other than the Executive Directors and
The Company’s approach to funding its total variable remuneration means it only pays out a
senior management, is at an
capped proportion of annual profits and this supports its ability to ensure a sound capital base.
appropriate level to ensure retention
The Company pays employees an amount in total of up to 25% EBVCIT from the performance /
and an appropriate level of reward
financial year in question.
The financial performance of the Group is weaker relative to the prior period and therefore
given the overall cap on VC as a percentage of profits, the amount available for VC has also
reduced proportionately.
However, in addition to this proportionate reduction in the amount available, the Remuneration
Committee has determined that in order to further reflect the shareholder experience and financial
performance in the period the VC percentage available to fund bonus awards for all employees
and Executive Directors should be reduced to 21.5% of EBVCIT (FY2020/21: 22%).
Compliance with relevant regulatory The Group has in place an effective governance framework and has sufficiently independent
and corporate governance and adequately resourced control functions, which have operated effectively over FY2021/22.
requirements The Remuneration Committee is satisfied that all relevant regulatory and corporate governance
requirements have been met appropriately.
Input from the Global Head of The Remuneration Committee received a report, provided to the Audit and Risk Committee,
Compliance and the Head of Risk detailing the measures undertaken by the Company in regard to ensuring that all compliance and
Management and Control regarding risk management processes have been adhered to, and highlighting any issues that the Global
organisational performance in relation Head of Compliance and Head of Risk Management and Control felt should be brought to the
to compliance and risk management attention of the Remuneration Committee.
over the year, in order that the
There have been no matters of concern during the period that would warrant the Remuneration
Remuneration Committee may
Committee considering reducing the potential bonus pool available for staff awards for FY2021/22.
consider any ex-ante bonus pool
adjustments
Whether any instances have occurred Having reviewed all of the information provided to it, the Remuneration Committee has
which may warrant the application of determined that there is no cause to apply malus or clawback to any previously granted awards for
malus or clawback to previously Executive Directors.
granted awards
104 Ashmore Group plc Annual Report and Accounts 2022
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STRATEGIC REPORT

GOVERNANCE

FINANCIAL STATEMENTS

# Executive Directors' remuneration outcomes

The Remuneration Committee considered the qualitative and quantitative inputs provided to it by the management team across the range of areas detailed above and, to assist shareholders in understanding their decision making, summarises its assessment of performance as follows:

|  Chief Executive Officer | Group Finance Director  |
| --- | --- |
|  The CEO's short-term performance is assessed on: – 75% on financial performance measures including effectively managing investment performance to deliver consistent growth relative to each investment theme, maintaining and increasing AuM and maintaining and increasing EBIT; and – 25% on non-financial management performance, including management of matters relating to ESG, strategy development and implementation, recruitment, staff turnover and succession planning and regulatory and compliance adherence. | The GFD's short-term performance is assessed on: – 85% on his management of the Finance, Middle Office Operations, Information Technology, Corporate Development and Investor Relations departments and on his management of subsidiary business activities outside the UK, including joint ventures; – 15% on contribution to the development and implementation of strategic goals and increasing value for shareholders, investor relations and communication, broadening the shareholder base and communicating effectively with all relevant stakeholders.  |
|  Financial and non-financial measures | Business management and contribution to strategy  |
|  As detailed elsewhere in this report, FY2021/22 has been a challenging year of global macro headwinds which have resulted in reduced financial performance in the period being assessed by the Remuneration Committee. The financial measures represent the greater proportion of the areas considered by the Remuneration Committee in determining annual remuneration for the CEO, in order that there is a clear alignment of annual incentives with the Group's KPIs and the delivery over time of value for shareholders. Relative to the Group's and the CEO's key performance measures during the year and in comparison to the prior period, AuM dropped by 32%, EBIT dropped by 54% and the percentage of funds outperforming relative to their benchmarks dropped over one, three and five years. During the period positive developments related to non-financial measures have taken place in regards to ESG, and the business remains well governed with the appropriate personnel and resources in place. | In the Remuneration Committee's assessment, the GFD has performed well in FY2021/22, significantly expanding his portfolio of responsibilities and the areas of the business he is responsible for during the period. The departments he is now responsible for continue to be run effectively, with stable, high quality teams in place and delivering timely and effective outputs. The subsidiary businesses have continued to perform well, maintaining AuM through challenging market conditions, becoming a relatively more material part of the Group's operations through the period and remain well integrated with the Group. The GFD played a leading role in managing Ashmore's response to COVID-19 and returning to predominantly office based working. Operating costs remained well managed by the GFD, reducing by 7% relative to the prior period, supporting the adjusted EBITDA margin. Ongoing contribution to business strategy, investor relations and shareholder and third-party relationship management remains effective.  |

## Executive Director annual bonus awards for the year ending 30 June 2022

The Remuneration Committee has considered these inputs and has determined that the reduced financial performance in the period must be recognised in this year's award levels. The Committee also recognises that despite the weaker financial performance in the period, the GFD has taken on greater responsibility and has personally performed well; the CEO and GFD will therefore be awarded bonuses as follows:

|   | Annual bonus award  |
| --- | --- |
|  Mark Coombs | –  |
|  Tom Shippey | £800,000  |

Ashmore Group plc Annual Report and Accounts 2022 105
REMUNERATION REPORT (CONTINUED)
## Performance conditions, vesting outcome and grant
The vesting of 50% of restricted share awards and 50% of matching share awards awarded in 2016 was contingent on meeting stringent
long-term performance conditions, clearly aligned with the achievement of the Group’s strategic objectives and KPIs.
Figure 1
Performance conditions’ vesting scale
Performance condition Performance % of award vesting
TSR Below median of peer group Zero
Median 25%
Between median and upper quartile Straight-line proportionate vesting
Upper quartile 100%
Investment outperformance Below 50% of assets outperforming the Zero
benchmarks over three and five years
50% of assets outperforming the benchmarks over 25%
three and five years
Between 50% and 75% of assets outperforming the Straight-line proportionate vesting
benchmarks over three and five years
75% or above of assets outperforming the 100%
benchmarks over three and five years
Growth in assets under management Below 5% compound increase in AuM over the Zero
five-year performance period
5% compound increase in AuM over the five-year 25%
performance period
Between 5% and 10% compound increase in AuM Straight-line proportionate vesting
over the five-year performance period
10% or above compound increase in AuM over the 100%
five-year performance period
Profitability – Ashmore’s diluted EPS Below the benchmark return Zero
performance relative to a combination of
At the benchmark return 25%
Emerging Markets indices representative
Between the benchmark return and 10% Straight-line proportionate vesting
of the markets in which Ashmore invests,
outperformance
determined by the Remuneration
At or above 10% outperformance relative to the 100%
Committee and based on the underlying
structure of the business benchmark return
106 Ashmore Group plc Annual Report and Accounts 2022
106 Ashmore Group plc | Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
REMUNERATION REPORT (CONTINUED)
## Performance conditions, vesting outcome and grant
Figure 2
TSR peer group
The Remuneration Committee decided to remove relative total shareholder return (TSR) as a vesting condition from July 2018 onwards,
based upon its observations over the past decade and combined with external advice, that there are no other listed asset managers
The vesting of 50% of restricted share awards and 50% of matching share awards awarded in 2016 was contingent on meeting stringent
dedicated to managing investments in Emerging Markets and therefore whose share price is influenced by particular external
long-term performance conditions, clearly aligned with the achievement of the Group’s strategic objectives and KPIs.
macroeconomic factors in the same way as Ashmore’s. The TSR peer group therefore relates only to awards granted in 2016 and 2017.

| Figure 1 | Companies who have delisted during the performance period have been removed from the comparator group. |  |  |
| --- | --- | --- | --- |
| Performance conditions’ vesting scale | Company Country of listing Company Country of listing |  |  |
| Performance condition Performance % of award vesting | Affiliated Managers USA Invesco USA |  |  |
| TSR Below median of peer group Zero | Alliance Bernstein USA | Janus Henderson Investors | USA & Australia |

(added in May 2017)
Median 25%
BlackRock USA Jupiter Fund Management UK
Between median and upper quartile Straight-line proportionate vesting
CI Financial Canada Man Group UK
Upper quartile 100%
Federated Hermes USA Schroders UK

| Investment outperformance | Below 50% of assets outperforming the | Zero |  |  |
| --- | --- | --- | --- | --- |
|  | benchmarks over three and five years |  | Franklin Resources USA SEI Investments USA |  |
|  | 50% of assets outperforming the benchmarks over | 25% | GAM Holding (2016 and 2017 | Switzerland T Rowe Price USA |
|  | three and five years |  | awards only) |  |
|  | Between 50% and 75% of assets outperforming the | Straight-line proportionate vesting |  |  |

benchmarks over three and five years
75% or above of assets outperforming the 100%
benchmarks over three and five years
Growth in assets under management Below 5% compound increase in AuM over the Zero
five-year performance period
5% compound increase in AuM over the five-year 25%
performance period
Between 5% and 10% compound increase in AuM Straight-line proportionate vesting
over the five-year performance period
10% or above compound increase in AuM over the 100%
five-year performance period
Profitability – Ashmore’s diluted EPS Below the benchmark return Zero
performance relative to a combination of
At the benchmark return 25%
Emerging Markets indices representative
Between the benchmark return and 10% Straight-line proportionate vesting
of the markets in which Ashmore invests,
outperformance
determined by the Remuneration
At or above 10% outperformance relative to the 100%
Committee and based on the underlying
structure of the business benchmark return
Ashmore Group plc Annual Report and Accounts 2022 107
106 Ashmore Group plc | Annual Report and Accounts 2022 Ashmore Group plc | Annual Report and Accounts 2022 107
REMUNERATION REPORT (CONTINUED)
## PERFORMANCE CONDITIONS, VESTING OUTCOME AND GRANT (CONTINUED)
Performance and vesting outcome for the CEO and GFD’s 2016 long-term incentive awards which vested during
FY2021/22
During FY2021/22, shares awarded to Mark Coombs and Tom Shippey in 2016 reached their vesting date. On the vesting date, all bonus
shares and half of the restricted and matching shares vested. Performance conditions were applied to the vesting of half of the restricted
and matching shares awarded. Each performance condition was equally weighted at 25%. The performance outcomes, relative to the
performance conditions vesting scale shown in Figure 1, are shown in Figure 3. TSR performance condition calculations were provided
by Deloitte.
Figure 3
Vesting outcome for CEO and GFD’s 2016 long-term incentive awards subject to performance conditions
CEO GFD

|  |  |  |  |  | Restricted and |  |  |  | Restricted and |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  | matching |  |  |  | matching |  |  |
|  |  |  |  |  |  | shares |  |  |  | shares |  |  |
|  |  |  |  |  |  | awarded |  |  |  | awarded |  |  |
|  |  |  |  |  |  | subject to |  |  |  | subject to |  |  |
|  |  |  | Vesting | Type of share | performance |  | Shares | Shares | performance |  | Shares | Shares |
|  | Performance measure assessment | percentage |  | award |  | conditions | vesting | lapsing |  | conditions | vesting | lapsing |
| Investment | 73% of AuM were outperforming | 94% |  | Restricted |  | 22,088 20,845 1,243 11,044 10,423 621 |  |  |  |  |  |  |
| performance | over 3 and 5 years |  |  | shares |  |  |  |  |  |  |  |  |
|  |  |  |  | Matching |  | 16,566 15,634 932 8,283 7,817 466 |  |  |  |  |  |  |

shares
Increasing The compound annual growth in 100% Restricted 22,088 22,088 – 11,044 11,044 –
AuM AuM over the five-year period, shares
from US$52.6 billion to US$94.4
Matching 16,566 16,566 – 8,283 8,283 –
billion, was above 10%. Actual
shares
was 12.4%
Profitability On a compound basis, Ashmore 70% Restricted 22,088 15,400 6,688 11,044 7,700 3,344
increased its diluted EPS by shares
13.5% per annum over the five-
Matching 16,566 11,550 5,016 8,283 5,775 2,508
year period, exceeding the 7.6%
shares
compound return from the
benchmark index
TSR The Company’s TSR was 43.5%, 54% Restricted 22,088 11,950 10,138 11,044 5,975 5,069
which ranked Ashmore at 5.84 shares
relative to the TSR peer group of
Matching 16,566 8,962 7,604 8,283 4,481 3,802
13 companies; the median rank
shares
which would have resulted in
25% vesting was 7 or a TSR of
37.8%. The upper quartile rank
which would have resulted in
100% vesting was 4 or a TSR of
122%. Therefore 54.1% of the
restricted and matching share
awards vested
Totals 80% 154,616 122,995 31,621 77,308 61,498 15,810
The Remuneration Committee has discretion to adjust the vesting level of the awards if it considers that the vesting level does not reflect
the underlying financial or non-financial performance over the vesting period; or the vesting level is not appropriate in the context of
circumstances that were unexpected or unforeseen; or there exists any other reason why an adjustment is appropriate, taking into account
such factors as the Remuneration Committee considers relevant. The Remuneration Committee has not applied its discretion to alter the
number of awards vesting during FY2021/22.
108 Ashmore Group plc Annual Report and Accounts 2022
108 Ashmore Group plc | Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
REMUNERATION REPORT (CONTINUED)
## PERFORMANCE CONDITIONS, VESTING OUTCOME AND GRANT (CONTINUED)
Figure 4
Long-term incentive awards made during the year ended 30 June 2022 – audited information
No. of Date Share award Face value Face value Performance period
Name Type of award shares of award price 2 (£) (£) (% of salary) end date
1
Performance and vesting outcome for the CEO and GFD’s 2016 long-term incentive awards which vested during Mark Coombs Restricted shares 144,915 16 September 2021 £3.7512 £543,605 544% 15 September 2026
FY2021/22 1
Mark Coombs Matching shares 108,686 16 September 2021 £3.7512 £407,703 408% 15 September 2026
During FY2021/22, shares awarded to Mark Coombs and Tom Shippey in 2016 reached their vesting date. On the vesting date, all bonus 1
Tom Shippey Restricted shares 90,638 16 September 2021 £3.7512 £340,001 340% 15 September 2026
shares and half of the restricted and matching shares vested. Performance conditions were applied to the vesting of half of the restricted 1
Tom Shippey Matching shares 67,979 16 September 2021 £3.7512 £255,003 255% 15 September 2026
and matching shares awarded. Each performance condition was equally weighted at 25%. The performance outcomes, relative to the
1. Executives may voluntarily defer their cash bonus into shares in order to receive an equivalent level of matching shares and are also required under the AIFMD rules to defer a portion of their cash
performance conditions vesting scale shown in Figure 1, are shown in Figure 3. TSR performance condition calculations were provided
bonus for six months. These awards are not subject to any performance conditions and so are not included in Figure 4; full details can be found in Figure 6.
by Deloitte.
2. Based on the average Ashmore Group plc closing share price for the five business days prior to the grant date.
Figure 3 Long-term incentive awards made during the year ended 30 June 2022 – performance conditions

| Vesting outcome for CEO and GFD’s 2016 long-term incentive awards subject to performance conditions |  |  |  |  |  |  |  |  |  |  |  |  |  | Figure 4 provides details of the long-term incentive awards that were made during FY2021/22. These represent the restricted and matching |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | CEO GFD |  |  |  |  |  |  |  |  |  |  |  |  | share awards, 50% of which are subject to additional performance conditions, and will vest on the fifth anniversary of the award date, to the |
|  |  |  |  |  |  | Restricted and |  |  |  | Restricted and |  |  |  | extent that the performance conditions are met. The remaining 50% are subject to continued employment. |
|  |  |  |  |  |  |  | matching |  |  |  | matching |  |  |  |
|  |  |  |  |  |  |  | shares |  |  |  | shares |  |  | The performance conditions for the most recent awards were a combination of: |
|  |  |  |  |  |  |  | awarded |  |  |  | awarded |  |  |  |
|  |  |  |  |  |  |  | subject to |  |  |  | subject to |  |  | – 33.3% investment outperformance, relative to the relevant benchmarks over three and five years; |
|  |  |  |  | Vesting | Type of share | performance |  | Shares | Shares | performance |  | Shares | Shares |  |
|  |  | Performance measure assessment | percentage |  | award |  | conditions | vesting | lapsing |  | conditions | vesting | lapsing | – 33.3% growth in assets under management, demonstrated through a compound increase in AuM over the five-year performance period; and |

– 33.3% profitability, demonstrated through Ashmore's diluted EPS performance relative to a comparator index over the five-year
Investment 73% of AuM were outperforming 94% Restricted 22,088 20,845 1,243 11,044 10,423 621 performance period.
performance over 3 and 5 years shares
The performance conditions’ vesting scale and the TSR peer group, which relates to share awards made until September 2017, are shown
Matching 16,566 15,634 932 8,283 7,817 466 in Figures 1 and 2 respectively.
shares
Payments to past directors
Increasing The compound annual growth in 100% Restricted 22,088 22,088 – 11,044 11,044 –
No payments were made to past directors during FY2021/22.

| AuM | AuM over the five-year period, | shares |  |  |
| --- | --- | --- | --- | --- |
|  | from US$52.6 billion to US$94.4 |  |  | Payments for loss of office |
|  |  | Matching | 16,566 16,566 – 8,283 8,283 – |  |

billion, was above 10%. Actual
shares No payments were made for loss of office during FY2021/22.
was 12.4%
Non-Executive Director fees at 30 June 2022
Profitability On a compound basis, Ashmore 70% Restricted 22,088 15,400 6,688 11,044 7,700 3,344
Non-executive Director fees paid at 30 June 2022 are shown below. David Bennett retired as Chair of the Board on 20 April 2022.

| increased its diluted EPS by | shares |  |  |  |
| --- | --- | --- | --- | --- |
| 13.5% per annum over the five- |  |  |  | All inclusive fee |
|  | Matching | 16,566 11,550 5,016 8,283 5,775 2,508 |  |  |
| year period, exceeding the 7.6% |  |  | Clive Adamson 150,000 |  |

shares
compound return from the
Helen Beck 75,000
benchmark index
Jennifer Bingham 70,000
TSR The Company’s TSR was 43.5%, 54% Restricted 22,088 11,950 10,138 11,044 5,975 5,069
1

|  |  |  | Shirley Garrood |  | 60,000 |
| --- | --- | --- | --- | --- | --- |
| which ranked Ashmore at 5.84 | shares |  |  |  |  |
| relative to the TSR peer group of |  |  |  | 1. Shirley Garrood joined the Board on 1 August 2022. |  |
|  | Matching | 16,566 8,962 7,604 8,283 4,481 3,802 |  |  |  |

13 companies; the median rank
shares
which would have resulted in
25% vesting was 7 or a TSR of
37.8%. The upper quartile rank
which would have resulted in
100% vesting was 4 or a TSR of
122%. Therefore 54.1% of the
restricted and matching share
awards vested
Totals 80% 154,616 122,995 31,621 77,308 61,498 15,810
The Remuneration Committee has discretion to adjust the vesting level of the awards if it considers that the vesting level does not reflect
the underlying financial or non-financial performance over the vesting period; or the vesting level is not appropriate in the context of
circumstances that were unexpected or unforeseen; or there exists any other reason why an adjustment is appropriate, taking into account
such factors as the Remuneration Committee considers relevant. The Remuneration Committee has not applied its discretion to alter the
number of awards vesting during FY2021/22.
Ashmore Group plc Annual Report and Accounts 2022 109
108 Ashmore Group plc | Annual Report and Accounts 2022 Ashmore Group plc | Annual Report and Accounts 2022 109
ANNUAL REPORT ON REMUNERATION
## Annual report on remuneration
This part of the report has been prepared in accordance with Part 3 of The Large and Medium-sized Companies and Groups (Accounts
and Reports) (Amendment) Regulations 2013 and 9.8.6R of the Listing Rules.
Figure 5
Remuneration for the year ending 30 June 2022 – audited information
The table below sets out the remuneration received by the Directors in the year ending 30 June 2022.
Executive Directors

|  | Mark Coombs |  | Tom Shippey | Clive Adamson |  | Helen Beck |  | David Bennett |  | Jennifer Bingham |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  | 1, 4, 6, 7, 8, 9, 10, 11 | 1, 4, 6, 8, 9, 10, 11 |  | 10 |  | 10 |  | 10, 12 |  | 10 |
| 2022 |  | 100,000 100,000 97,365 75,000 120,577 61,782 |  |  |  |  |  |  |  |  |  |

Salary and fees
2021 100,000 100,000 85,000 5,000 150,000 60,000
2022 1,123 2,808 – – – –
Taxable benefits
2021 901 2,253 – – – –
2022 9,000 9,500 – – – –
Pensions
2021 9,000 9,500 – – – –
2022 0 232,800 – – – –
Cash bonus
2021 394,200 247,350 – – – –
2022 0 287,000 – – – –
4
Voluntarily deferred share bonus
2021 407,700 255,000 – – – –
2022 0 240,000 – – – –
5
Mandatorily deferred share bonus
2021 439,800 305,150 – – – –
2022 0 760,000 – – – –
Total bonus
2021 1,241,700 807,500 – – – –
2022 542,619 271,308 – – – –
2, 3
Long-term incentives vesting
2021 1,108,587 365,748 – – – –
2022 652,742 1,143,616 97,365 75,000 120,577 61,782
11
Total for year
2021 2,460,188 1,285,501 85,000 5,000 150,000 60,000
2022 110,123 112,308 97,365 75,000 120,577 61,782
Total fixed remuneration
2021 109.901 112,253 85,000 5,000 150,000 60,000
2022 542,619 1,031,308 – – – –
Total variable remuneration
2021 2,350,287 1,173,248 – – – –
1. Benefits for both Executive Directors include membership of the Company medical scheme.
2. Long-term incentives vesting relates to share awards with performance conditions where the performance period has ended in the relevant financial year plus the value of any dividend equivalents.
3. The figure of £542,619 shown as the value of Mark Coombs’ 2022 Long-term incentives vesting reflects £21,979 of share price appreciation over the period between grant and vest.
The figure of £383,616 shown as the value of Tom Shippey’s 2022 Long-term incentives vesting reflects £10,990 of share price appreciation over the period between grant and vest.
The figure of £1,108,587 shown as the value of Mark Coombs’ 2021 Long-term incentives vesting reflects £304,251 of share price appreciation over the period between grant and vest.
The figure of £365,748 shown as the value of Tom Shippey’s 2021 Long-term incentives vesting includes £97,637 of share price appreciation over the period between grant and vest.
4. Mark Coombs and Tom Shippey may voluntarily defer up to 50% of their cash bonus in favour of an equivalent amount of bonus share or phantom bonus share awards and an equivalent
value in matching share or phantom matching share awards. All share or phantom share awards will be reported in the Directors’ share and phantom share award tables in the year of grant.
Both Mark Coombs and Tom Shippey chose to commute 50% of their cash bonus in 2021 for an equivalent value in bonus share awards. Bonus shares are deferred for five years with no
service condition attached.
5. From the year ending 30 June 2015 onward, additional performance conditions are applied to 50% of any restricted or matching share award. The amounts shown in the row labelled
mandatorily deferred share bonus represent the 50% of restricted and matching share awards that do not have additional performance conditions attached, and also include the amounts
detailed in note 6 below relating to compliance with the Alternative Investment Fund Managers Directive (AIFMD). These amounts represent the cash value of shares awarded at grant, which
will vest after five years subject to continued employment, and in the case of shares related to AIFMD, after a retention period.
6. In order to comply with the AIFMD Mark Coombs and Tom Shippey received a proportion of their bonus, which would have otherwise been delivered in cash, as an additional award of restricted
shares which will vest after a retention period. In 2022, the value of this award for Mark Coombs was £0 (FY2020/21: £13,500), and for Tom Shippey was £7,200 (FY2020/21: £7,650).
7. In respect of prior year deferred share awards which have been waived to charity, any dividend equivalents associated with the amounts waived are paid directly to the nominated charities.
The figures shown exclude the amounts waived.
8. Dividends or dividend equivalents were paid relating to voluntarily and mandatorily deferred share or phantom share awards in the period.
9. Mark Coombs receives cash in lieu of a pension contribution. Tom Shippey’s pension contribution includes an employee contribution via salary sacrifice; in 2022 this was £500 (2021: £500).
10. Total short-term benefits for key management personnel, including salary and fees, taxable benefits and cash bonuses, as reported in note 28 of the financial statements is £791,455 in
FY2021/22. In addition, the total cost of equity-settled awards for the Executive Directors charged to the statement of comprehensive income, as reported in note 28 of the financial
statements, is £223,684 in FY2021/22.
11. The Committee exercised its discretion to determine the CEO and GFD’s variable remuneration based on various factors. The discretion has not been exercised as a result of share price
appreciation or depreciation for annual incentives and LTIPs.
12. David Bennett stepped down from the Board on 20 April 2022; no payments for loss of office were made.
110 Ashmore Group plc Annual Report and Accounts 2022
110 Ashmore Group plc | Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
## Directors’ outstanding share awards
ANNUAL REPORT ON REMUNERATION
## Annual report on remuneration
Figure 6
Outstanding share awards
The table below sets out details of Executive Directors’ outstanding share awards.

| This part of the report has been prepared in accordance with Part 3 of The Large and Medium-sized Companies and Groups (Accounts |  | Type of |  |  |  | Number of | Granted |  |  |  | Lapsed | Number of |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  | Omnibus |  | Share award |  | shares at | during |  | Vested during |  | during | shares at | Performance |  |  |
| and Reports) (Amendment) Regulations 2013 and 9.8.6R of the Listing Rules. | Executive | award | Date of award |  | price | 30 June 2021 |  | year |  | year | year | 30 June 2022 |  | period | Vesting/release date |

1
Figure 5 Mark RS 16 September 2016 £3.3955 161,330 – 143,261 18,069 – 5 years 15 September 2021
Coombs 1
RBS 16 September 2016 £3.3955 120,999 – 120,999 – – 5 years 15 September 2021
Remuneration for the year ending 30 June 2022 – audited information
1
RMS 16 September 2016 £3.3955 121,000 – 107,448 13,552 – 5 years 15 September 2021
The table below sets out the remuneration received by the Directors in the year ending 30 June 2022.
1
RS 14 September 2017 £3.2353 449,542 – – – 449,542 5 years 13 September 2022
Executive Directors
1
Mark Coombs Tom Shippey Clive Adamson Helen Beck David Bennett Jennifer Bingham RBS 14 September 2017 £3.2353 337,156 – – – 337,156 5 years 13 September 2022
1, 4, 6, 7, 8, 9, 10, 11 1, 4, 6, 8, 9, 10, 11 10 10 10, 12 10
1
RMS 14 September 2017 £3.2353 337,156 – – – 337,156 5 years 13 September 2022

|  | 2022 | 100,000 100,000 97,365 75,000 120,577 61,782 |  |  |
| --- | --- | --- | --- | --- |
| Salary and fees |  |  |  | 1 |
|  | 2021 |  | RS | 14 September 2018 £3.3269 218,342 – – – 218,342 5 years 13 September 2023 |

100,000 100,000 85,000 5,000 150,000 60,000
1
2022 1,123 2,808 – – – – RBS 14 September 2018 £3.3269 163,757 – – – 163,757 5 years 13 September 2023
Taxable benefits

| 2021 |  |  | 1 |
| --- | --- | --- | --- |
|  | 901 2,253 – – – – | RMS | 14 September 2018 £3.3269 163,757 – – – 163,757 5 years 13 September 2023 |
| 2022 | 9,000 9,500 – – – – |  | 1 |
|  |  | RS | 13 September 2019 £4.3833 248,580 – – – 248,580 5 years 12 September 2024 |

Pensions
2021 9,000 9,500 – – – –
1
RBS 13 September 2019 £4.3833 186,435 – – – 186,435 5 years 12 September 2024
2022 0 232,800 – – – –
1
Cash bonus RMS 13 September 2019 £4.3833 186,435 – – – 186,435 5 years 12 September 2024
2021 394,200 247,350 – – – –
2

|  |  |  | RS | 16 September 2021 £3.7512 – 3,599 3,599 – – 6 months 16 March 2022 |
| --- | --- | --- | --- | --- |
|  | 2022 | 0 287,000 – – – – |  |  |
| 4 |  |  |  | 1 |

Voluntarily deferred share bonus
RS 16 September 2021 £3.7512 – 144,915 – – 144,915 5 years 15 September 2026
2021 407,700 255,000 – – – –
1
2022 RBS 16 September 2021 £3.7512 – 108,686 – – 108,686 5 years 15 September 2026
0 240,000 – – – –
5
Mandatorily deferred share bonus
1
2021 439,800 305,150 – – – – RMS 16 September 2021 £3.7512 – 108,686 – – 108,686 5 years 15 September 2026
2022 0 760,000 – – – –
Total 2,694,489 365,886 375,307 31,621 2,653,447
Total bonus
2021 1,241,700 807,500 – – – –
1. In respect of the years ending 30 June 2016, 30 June 2017, 30 June 2018, 30 June 2019 and 30 June 2021 Mark Coombs chose to waive 10% of his potential non-AIF related variable remuneration
2022 award in return for the Remuneration Committee considering and approving a contribution to a charity or charities nominated by himself. The 'Number of shares at 30 June 2021', 'Granted during
542,619 271,308 – – – –
2, 3 year' and 'Number of shares at 30 June 2022' figures are shown excluding the amounts waived. On the vesting/release date, any shares waived to charity will vest to them to the extent that any
Long-term incentives vesting
2021 1,108,587 365,748 – – – – relevant performance conditions have been satisfied.
2022 652,742 1,143,616 97,365 75,000 120,577 61,782 2. In order to comply with the AIFMD remuneration principles in regard to the delivery of remuneration in retained instruments, a proportion of Mark Coombs’ cash bonuses relating to the year ending
11

| Total for year |  |  | 30 June 2021 were delivered in the form of restricted shares, subject to a six-month retention period, rather than being delivered in cash. These shares vested in full on the date shown and were not |
| --- | --- | --- | --- |
|  | 2021 | 2,460,188 1,285,501 85,000 5,000 150,000 60,000 | subject to any additional performance conditions. |
|  | 2022 | 110,123 112,308 97,365 75,000 120,577 61,782 |  |

Total fixed remuneration
2021 109.901 112,253 85,000 5,000 150,000 60,000
2022 542,619 1,031,308 – – – – KEY
Total variable remuneration
2021 2,350,287 1,173,248 – – – –
RS – Restricted shares RBS – Restricted bonus shares RMS – Restricted matching shares
1. Benefits for both Executive Directors include membership of the Company medical scheme.
2. Long-term incentives vesting relates to share awards with performance conditions where the performance period has ended in the relevant financial year plus the value of any dividend equivalents.
3. The figure of £542,619 shown as the value of Mark Coombs’ 2022 Long-term incentives vesting reflects £21,979 of share price appreciation over the period between grant and vest.
The figure of £383,616 shown as the value of Tom Shippey’s 2022 Long-term incentives vesting reflects £10,990 of share price appreciation over the period between grant and vest.
The figure of £1,108,587 shown as the value of Mark Coombs’ 2021 Long-term incentives vesting reflects £304,251 of share price appreciation over the period between grant and vest.
The figure of £365,748 shown as the value of Tom Shippey’s 2021 Long-term incentives vesting includes £97,637 of share price appreciation over the period between grant and vest.
4. Mark Coombs and Tom Shippey may voluntarily defer up to 50% of their cash bonus in favour of an equivalent amount of bonus share or phantom bonus share awards and an equivalent
value in matching share or phantom matching share awards. All share or phantom share awards will be reported in the Directors’ share and phantom share award tables in the year of grant.
Both Mark Coombs and Tom Shippey chose to commute 50% of their cash bonus in 2021 for an equivalent value in bonus share awards. Bonus shares are deferred for five years with no
service condition attached.
5. From the year ending 30 June 2015 onward, additional performance conditions are applied to 50% of any restricted or matching share award. The amounts shown in the row labelled
mandatorily deferred share bonus represent the 50% of restricted and matching share awards that do not have additional performance conditions attached, and also include the amounts
detailed in note 6 below relating to compliance with the Alternative Investment Fund Managers Directive (AIFMD). These amounts represent the cash value of shares awarded at grant, which
will vest after five years subject to continued employment, and in the case of shares related to AIFMD, after a retention period.
6. In order to comply with the AIFMD Mark Coombs and Tom Shippey received a proportion of their bonus, which would have otherwise been delivered in cash, as an additional award of restricted
shares which will vest after a retention period. In 2022, the value of this award for Mark Coombs was £0 (FY2020/21: £13,500), and for Tom Shippey was £7,200 (FY2020/21: £7,650).
7. In respect of prior year deferred share awards which have been waived to charity, any dividend equivalents associated with the amounts waived are paid directly to the nominated charities.
The figures shown exclude the amounts waived.
8. Dividends or dividend equivalents were paid relating to voluntarily and mandatorily deferred share or phantom share awards in the period.
9. Mark Coombs receives cash in lieu of a pension contribution. Tom Shippey’s pension contribution includes an employee contribution via salary sacrifice; in 2022 this was £500 (2021: £500).
10. Total short-term benefits for key management personnel, including salary and fees, taxable benefits and cash bonuses, as reported in note 28 of the financial statements is £791,455 in
FY2021/22. In addition, the total cost of equity-settled awards for the Executive Directors charged to the statement of comprehensive income, as reported in note 28 of the financial
statements, is £223,684 in FY2021/22.
11. The Committee exercised its discretion to determine the CEO and GFD’s variable remuneration based on various factors. The discretion has not been exercised as a result of share price
appreciation or depreciation for annual incentives and LTIPs.
12. David Bennett stepped down from the Board on 20 April 2022; no payments for loss of office were made.
Ashmore Group plc Annual Report and Accounts 2022 111
110 Ashmore Group plc | Annual Report and Accounts 2022 Ashmore Group plc | Annual Report and Accounts 2022 111
ANNUAL REPORT ON REMUNERATION (CONTINUED)
## DIRECTORS’ OUTSTANDING SHARE AWARDS (CONTINUED)
Figure 6 continued
Outstanding share awards

|  | Type of |  |  |  | Number of | Granted | Vested | Lapsed |  | Number of |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | Omnibus |  | Share award |  | shares at | during | during | during |  | shares at | Performance |  |  |
| Executive | award | Date of award |  | price | 30 June 2021 | year | year |  | year | 30 June 2022 |  | period | Vesting/release date |
| Tom | RS 16 September 2016 £3.3955 88,353 – 79,318 9,035 – 5 years 15 September 2021 |  |  |  |  |  |  |  |  |  |  |  |  |

Shippey
RBS 16 September 2016 £3.3955 66,265 – 66,265 – – 5 years 15 September 2021
RMS 16 September 2016 £3.3955 66,265 – 59,490 6,775 – 5 years 15 September 2021
RS 14 September 2017 £3.2353 117,455 – – – 117,455 5 years 13 September 2022
RBS 14 September 2017 £3.2353 88,091 – – – 88,091 5 years 13 September 2022
RMS 14 September 2017 £3.2353 88,091 – – – 88,091 5 years 13 September 2022
RS 14 September 2018 £3.3269 105,204 – – – 105,204 5 years 13 September 2023
RBS 14 September 2018 £3.3269 22,544 – – – 22,544 5 years 13 September 2023
RMS 14 September 2018 £3.3269 22,544 – – – 22,544 5 years 13 September 2023
RS 13 September 2019 £4.3833 91,256 – – – 91,256 5 years 12 September 2024
RBS 13 September 2019 £4.3833 68,442 – – – 68,442 5 years 12 September 2024
RMS 13 September 2019 £4.3833 68,442 – – – 68,442 5 years 12 September 2024
RS 18 September 2020 £3.6009 99,976 – – – 99,976 5 years 17 September 2025
RBS 18 September 2020 £3.6009 74,982 – – – 74,982 5 years 17 September 2025
RMS 18 September 2020 £3.6009 74,982 – – – 74,982 5 years 17 September 2025
1
RS 16 September 2021 £3.7512 – 2,040 2,040 – – 6 months 16 March 2022
RS 16 September 2021 £3.7512 – 90,638 – – 90,638 5 years 15 September 2026
RBS 16 September 2021 £3.7512 – 67,979 – – 67,979 5 years 15 September 2026
RMS 16 September 2021 £3.7512 – 67,979 – – 67,979 5 years 15 September 2026
Total 1,142,892 228,636 207,113 15,810 1,148,605
1. In order to comply with the AIFMD remuneration principles in regard to the delivery of remuneration in retained instruments, a proportion of Tom Shippey’s cash bonuses relating to the year ending
30 June 2021 were delivered in the form of restricted shares, subject to a six-month retention period, rather than being delivered in cash. These shares vested in full on the date shown and were not
subject to any additional performance conditions.
KEY
RS – Restricted shares RBS – Restricted bonus shares RMS – Restricted matching shares
The Company’s obligations under its employee share plans can be met by newly issued shares in the Company, or shares purchased in the
market by the trustees of the EBT. As detailed in the Business review, the EBT continues to make market purchases of shares to satisfy
awards.
The overall limits on new issuance operated under the existing share plans were established on the listing of the Company in 2006. Under
these agreed limits, the number of shares which may be issued in aggregate under employee share plans of the Company over any ten-year
period following the date of the Company’s Admission in 2006 is limited to 15% of the Company’s issued share capital. It is expected that
all of the awards made to date will be satisfied by the acquisition of shares in the market, thus none of the Company’s obligations under its
employee share plans have been met by newly issued shares. As at 30 June 2022, 6.04% of the Company’s issued share capital was
outstanding under employee share plans to its staff.
Defined benefit pension entitlements
None of the Directors has any entitlements under Company defined benefit pension plans.
112 Ashmore Group plc Annual Report and Accounts 2022
112 Ashmore Group plc | Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
ANNUAL REPORT ON REMUNERATION (CONTINUED)
## DIRECTORS’ OUTSTANDING SHARE AWARDS (CONTINUED)
Directors’ shareholding and share interests
Details of the Directors’ interests in shares are shown in the table below. The Directors’ Remuneration policy, approved by binding
shareholder vote at the 16 October 2020 AGM, includes a formal requirement for Executive Directors to build an unrestricted, post vesting
shareholding equivalent to 200% of salary, to be built up over the three-year period following the approval of the Remuneration policy by

| Figure 6 continued |  |  |  |  |  |  |  |  |  |  |  |  |  | shareholders in 2017 or from the first five-year vesting date for newly appointed Executive Directors. |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Outstanding share awards |  |  |  |  |  |  |  |  |  |  |  |  |  | The closing price of Ashmore shares on 30 June 2020 was £4.172 which means that by 20 October 2020 both Mark Coombs and Tom |
|  | Type of |  |  |  | Number of | Granted |  | Vested | Lapsed | Number of |  |  |  | Shippey were required to hold at least 47,939 unrestricted shares to meet the shareholding requirement. |
|  | Omnibus |  | Share award |  | shares at |  | during | during | during | shares at | Performance |  |  |  |
| Executive | award | Date of award |  | price | 30 June 2021 |  | year | year | year | 30 June 2022 |  | period | Vesting/release date | Both Mark Coombs and Tom Shippey have met the shareholding requirement. |
| Tom | RS 16 September 2016 £3.3955 88,353 – 79,318 9,035 – 5 years 15 September 2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |

Under the Directors’ Remuneration policy, Executive Directors are usually required to maintain a shareholding of 200% of salary for two
Shippey
RBS 16 September 2016 £3.3955 66,265 – 66,265 – – 5 years 15 September 2021 years post termination of their employment. The minimum number of shares to be held is based on the market price of Ashmore shares on
the year end date of 30 June prior to their termination date. The Committee retains discretion to waive this guideline if it is not considered
RMS 16 September 2016 £3.3955 66,265 – 59,490 6,775 – 5 years 15 September 2021
appropriate in the specific circumstances.
RS 14 September 2017 £3.2353 117,455 – – – 117,455 5 years 13 September 2022
Figure 7
RBS 14 September 2017 £3.2353 88,091 – – – 88,091 5 years 13 September 2022
RMS 14 September 2017 £3.2353 88,091 – – – 88,091 5 years 13 September 2022 Share interests of Directors and connected persons at 30 June 2022 – audited information

| RS 14 September 2018 £3.3269 105,204 – – – 105,204 5 years 13 September 2023 |  | Outstanding restricted and |  | Outstanding voluntarily deferred |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | Beneficially owned |  | 1 |  |  | 2 | Total interest in shares | 3 |
|  |  | matching share awards |  |  | bonus share awards |  |  |  |

RBS 14 September 2018 £3.3269 22,544 – – – 22,544 5 years 13 September 2023
Executive Directors
RMS 14 September 2018 £3.3269 22,544 – – – 22,544 5 years 13 September 2023
Mark Coombs 221,372,488 1,857,416 796,034 224,025,938
RS 13 September 2019 £4.3833 91,256 – – – 91,256 5 years 12 September 2024
Tom Shippey 50,610 826,567 322,038 1,199,215
RBS 13 September 2019 £4.3833 68,442 – – – 68,442 5 years 12 September 2024
RMS 13 September 2019 £4.3833 68,442 – – – 68,442 5 years 12 September 2024
Non-executive Directors
RS 18 September 2020 £3.6009 99,976 – – – 99,976 5 years 17 September 2025
Clive Adamson 2,265 – – 2,265
RBS 18 September 2020 £3.6009 74,982 – – – 74,982 5 years 17 September 2025
Helen Beck – – – –
RMS 18 September 2020 £3.6009 74,982 – – – 74,982 5 years 17 September 2025
Jennifer Bingham – – – –
1
RS 16 September 2021 £3.7512 – 2,040 2,040 – – 6 months 16 March 2022
1. Half of the restricted shares and matching shares awarded in 2017, 2018, 2019, 2020 and 2021 are subject to performance conditions.
RS 16 September 2021 £3.7512 – 90,638 – – 90,638 5 years 15 September 2026
2. Voluntarily deferred bonus shares are not subject to performance conditions.
RBS 16 September 2021 £3.7512 – 67,979 – – 67,979 5 years 15 September 2026 3. Save as described above, there have been no changes in the shareholdings of the Directors between 30 June and 1 September 2022. The Directors are permitted to hold their shares as collateral for
loans with the express permission of the Board. Shirley Garrood does not hold any shares.
RMS 16 September 2021 £3.7512 – 67,979 – – 67,979 5 years 15 September 2026
Total 1,142,892 228,636 207,113 15,810 1,148,605
Statement on implementation of the Remuneration policy in the year commencing 1 July 2022
1. In order to comply with the AIFMD remuneration principles in regard to the delivery of remuneration in retained instruments, a proportion of Tom Shippey’s cash bonuses relating to the year ending
30 June 2021 were delivered in the form of restricted shares, subject to a six-month retention period, rather than being delivered in cash. These shares vested in full on the date shown and were not The Remuneration Committee intends to continue to apply broadly the same metrics and weightings to annual VC in the year ending
subject to any additional performance conditions.
30 June 2023 as have been applied in the current period. The Committee also intends to apply the same three performance conditions to
any long-term incentives awards made with the same weightings as used in FY2021/22, these being in relation to investment
outperformance, growth in assets under management and profitability. The Committee does not intend to increase basic salaries for the
KEY Executive Directors other than as noted in the Chair’s letter, and there has been no change to the VC opportunity, pension or benefits for
the year commencing 1 July 2022. There has also been no change to the fees for the Board Chairman and Non-executive Directors for
RS – Restricted shares RBS – Restricted bonus shares RMS – Restricted matching shares
FY2022/23 other than fees due to Shirley Garrood as a newly appointed non-executive Director. The UK based FCA regulated business will
be required to operate in compliance with the MIFIDPRU remuneration regime for FY2022/23.
The Company’s obligations under its employee share plans can be met by newly issued shares in the Company, or shares purchased in the
market by the trustees of the EBT. As detailed in the Business review, the EBT continues to make market purchases of shares to satisfy
awards.
The overall limits on new issuance operated under the existing share plans were established on the listing of the Company in 2006. Under
these agreed limits, the number of shares which may be issued in aggregate under employee share plans of the Company over any ten-year
period following the date of the Company’s Admission in 2006 is limited to 15% of the Company’s issued share capital. It is expected that
all of the awards made to date will be satisfied by the acquisition of shares in the market, thus none of the Company’s obligations under its
employee share plans have been met by newly issued shares. As at 30 June 2022, 6.04% of the Company’s issued share capital was
outstanding under employee share plans to its staff.
Defined benefit pension entitlements
None of the Directors has any entitlements under Company defined benefit pension plans.
Ashmore Group plc Annual Report and Accounts 2022 113
112 Ashmore Group plc | Annual Report and Accounts 2022 Ashmore Group plc | Annual Report and Accounts 2022 113
REMUNERATION REPORT (CONTINUED)

# Remuneration governance

## Membership of the Remuneration Committee

The members of the Remuneration Committee during the period are listed in the table below. All of these are independent Non-executive Directors, as defined under the Code, with the exception of the Company Chair who was independent on his appointment.

### Remuneration Committee attendance

|   | Percentage of meetings attended out of potential maximum  |
| --- | --- |
|  Clive Adamson | 100%  |
|  Helen Beck | 100%  |
|  David Bennett (until 20 April 2022) | 100%  |
|  Jennifer Bingham | 100%  |

The Company's CEO attends the meetings by invitation and assists the Remuneration Committee in its decision making, except when his personal remuneration is discussed. No Directors are involved in deciding their own remuneration. The Company Secretary acts as Secretary to the Remuneration Committee. Other executives may be invited to attend as the Remuneration Committee requests.

### Terms of reference

The terms of reference for the Remuneration Committee include:

- reviewing the ongoing appropriateness and relevance of the Remuneration policy;
- reviewing the design of all incentive and share incentive plans for approval by the Board and shareholders;
- ensuring that members of the executive management of the Company are provided with appropriate incentives to encourage enhanced performance and that remuneration incentives are compatible with the Company's risk policies and systems;
- making recommendations to the Board as to the Company's framework or policy for the remuneration of the Chairman, the Executive Directors and the Company Secretary and to determine their total individual remuneration packages including bonuses, incentive payments and share options or other share awards;
- ensuring that a significant proportion of Executive Directors' remuneration is structured so as to link rewards to corporate and individual performance and that performance conditions are stretching and designed to promote the long-term success of the Company; and
- ensuring that contractual terms on termination, and any payments made, are fair to the individual and the Company, that failure is not rewarded and that the duty to mitigate loss is fully recognised.

### Activities of the Remuneration Committee

During FY2021/22, the Remuneration Committee comprised the following Non-executive Directors and was fully compliant with the Code:

- Clive Adamson
- Helen Beck
- David Bennett until he retired as Chair of the Board on 20 April 2022
- Jennifer Bingham

The members of the Remuneration Committee have the appropriate balance of skills, experience, independence and knowledge of the Company to enable them to discharge their respective duties and responsibilities effectively, and met five times during the year. The Directors' attendance at the Remuneration Committee meetings is set out in the table above.

Remuneration governance featured as a significant part of the Committee's activities through the period, in preparation for compliance with the FCA's IFPR and the associated MIFIDPRU remuneration regulations that come into effect for Ashmore for the performance year commencing 1 July 2022.

The application of a MIFIDPRU compliant remuneration policy alongside the existing AIFMD remuneration policy will introduce additional elements, including enhanced malus and clawback requirements during FY2022/23.

The Committee reviewed the share plan rules in regard to the treatment of shares which vest on termination of employment for Executive Directors, and with immediate effect have amended the plan rules to ensure new awards vest not sooner than their original vesting date, and will not be accelerated to vest at the termination date. The Committee has also amended the share plan rules to ensure that in a scenario where the application of malus and clawback is potentially to be considered, but a final determination has not yet been made, delivery of vested shares or the proceeds from the sale of vested shares can be delayed until such time as a final conclusion has been reached.

114 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT

GOVERNANCE

FINANCIAL STATEMENTS

## Regulatory considerations for FY2021/22

For remuneration relating to FY2021/22, the Remuneration Committee has again ensured that pay will be delivered to Executive Directors and other employees categorised by the FCA as Identified Staff, consistent with the requirements of the Alternative Investment Fund Managers Directive. This has meant that Executive Directors and other relevant employees will receive a proportion of their cash bonus delivered as a further award of restricted shares which are retained and restricted from sale for a six-month period, rather than as cash. Further details of this can be found in the Annual Report on Remuneration on page 110. Throughout the period regular regulatory updates were provided to the Committee.

Ashmore's UK employee headcount remains significantly under 250, and as a result of this, Ashmore is not required to include a CEO pay ratio calculation as part of the Remuneration report.

## Consideration of malus and clawback for FY2021/22

A malus and clawback principle applies to variable remuneration awarded to senior staff including Executive Directors, enabling the Remuneration Committee to recoup variable remuneration under certain circumstances. Malus and clawback can be applied to both the cash and share-based elements of variable remuneration, via the reduction or cancellation of any outstanding unvested deferred share awards regardless of the year to which they relate, or via the repayment of amounts to the Company. The Remuneration Committee considered there were no events or circumstances that would have made it appropriate to recoup remuneration during FY2021/22.

## External advisers

The Remuneration Committee received independent advice from Deloitte throughout the period from 1 July 2021 to 30 June 2022. Deloitte abides by the Remuneration Consultants' Code of Conduct, which requires it to provide objective and impartial advice. Deloitte's fees for the year ending 30 June 2022 were £47,600 and were charged on a time and materials basis. Deloitte also provides other tax, employee mobility and share plan administration related services to the Company.

## Compliance with the Code

The Code requires a description of how the Remuneration Committee has addressed the following factors

|  Code requirements | How the Committee has addressed the requirement  |
| --- | --- |
|  Clarity – remuneration arrangements should be transparent and promote effective engagement with shareholders and the workforce | Remuneration arrangements for Executive Directors and the workforce are substantially the same, and are described in detail within the Directors' Remuneration policy. A significant proportion of variable pay is deferred for five years into Company shares creating a direct alignment with external shareholders.  |
|  Simplicity – remuneration structures should avoid complexity and their rationale and operation should be easy to understand | Remuneration is simple for Executive Directors and the workforce, comprising a capped basic salary and an annual bonus, delivered partly in cash and partly in Company shares which are deferred for five years. There is no separate and complex LTIP arrangement.  |
|  Risk – remuneration arrangements should ensure reputational and other risks from excessive rewards, and behavioural risks that can arise from target based incentive plans, are identified and mitigated | The Remuneration Committee has discretion to vary the bonus pool, to vary individual annual award levels and to apply malus or clawback to existing awards. There is no formulaic or target based incentive plan to drive negative behaviours. The Remuneration Committee will determine the appropriate outcomes based solely on individual and Company performance.  |
|  Predictability – the range of possible values of rewards to individual directors and any other limits or discretions should be identified and explained at the time of approving the policy | The bonus pool is capped at a Group level, currently at 25% of EBVCIT. Awards at an individual level are uncapped, but the Company does not apply its discretion to deliver excessive rewards, as can be seen in looking back at outcomes over previous performance years.  |
|  Proportionality – the link between individual awards, the delivery of strategy and the long-term performance of the company should be clear. Outcomes should not reward poor performance | The Remuneration Committee strictly applies its discretion to reward performance, and to recognise periods of underperformance, as has been demonstrated on more than one occasion where senior management and risk takers have had very material reductions in annual variable remuneration and the CEO has not been awarded an annual bonus, reflecting business performance at the time.  |
|  Alignment to culture – incentive schemes should drive behaviours consistent with company purpose, values and strategy | Ashmore's purpose is to deliver long-term investment outperformance for clients and generate value for shareholders through market cycles. The Committee has ensured the remuneration policies of the Company support this, building employee retention through cycles and delivering significant equity alignment between employee shareholders and external shareholders.  |

Ashmore Group plc Annual Report and Accounts 2022 115
REMUNERATION REPORT (CONTINUED)

# REMUNERATION GOVERNANCE (CONTINUED)

**Figure 8**

# **Five-year history of percentage changes in the remuneration of the Executive Directors and the fees of Non-executive Directors relative to the remuneration of a relevant comparator employee group**

|   | 2021 to 2022 % change | 2020 to 2021 % change | 2019 to 2020 % change | 2018 to 2019 % change | 2017 to 2018 % change  |
| --- | --- | --- | --- | --- | --- |
|  Mark Coombs base salary | 0% | 0% | 0% | 0% | 0%  |
|  Tom Shippey base salary | 0% | 0% | 0% | 0% | 0%  |
|  Clive Adamson fees^{1, 2} | 15% | 0% | 4% | 22% | 13%  |
|  Helen Beck fees^{1, 3} | 1,400% | 0% | – | – | –  |
|  David Bennett fees^{1, 4} | (20%) | 0% | 15% | 63% | 7%  |
|  Jennifer Bingham fees^{1} | 3% | 0% | 0% | – | –  |
|  Relevant comparator employees' base salary | 2% | 1% | 1% | 3% | 0%  |
|  Mark Coombs taxable benefits^{7} | 25% | (87%) | (6%) | (8%) | (1%)  |
|  Tom Shippey taxable benefits^{7} | 25% | 0% | (6%) | (4%) | 8%  |
|  David Bennett taxable benefits^{5} | 0% | (100%) | (39%) | 103% | 46%  |
|  Relevant comparator employees' taxable benefits^{7} | 25% | 0% | 0% | (5%) | (9%)  |
|  Mark Coombs annual bonus^{6} | (100%) | N/A | (100%) | 50% | (50%)  |
|  Tom Shippey annual bonus | (6%) | (6%) | (10%) | 14% | (8%)  |
|  Relevant comparator employees' annual bonus | (16%) | 4% | (12%) | 10% | 5%  |

1. Non-executive Directors do not receive a bonus.

2. Clive Adamson joined the Board on 22/10/15 and chaired the Remuneration Committee from 31/12/17 until 19/10/18; he became the Senior Independent Director and Audit and Risk Committee chair on 19/10/18, and became the Chair on 21/04/22.

3. Helen Beck joined the Board on 01/06/21.

4. David Bennett joined the Board on 30/10/14 and chaired the Audit and Risk Committee from 22/10/15 until 19/10/18; he acted as Senior Independent Director from 31/12/17 until 19/10/18 and was appointed as Chair on 19/10/18. He stepped down from the Board on 20/04/22.

5. David Bennett's taxable benefits relate to transportation costs and the associated income tax and national insurance costs in relation to his role.

6. Mark Coombs did not receive a bonus in 2020 or 2022.

7. The increase in taxable benefits is a result of the cost increase of private medical coverage.

Figure 8 compares the percentage change from 2017 to 2022 in remuneration elements for the CEO, the GFD and the Non-executive Directors with the average year-on-year change across relevant comparator employees as a whole. Relevant comparator employees are all full-time employees and part-time employees on a full-time equivalent basis of Ashmore Group, who have been employed throughout the full performance year. Figures do not include amounts of cash waived to charity.

116 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
REMUNERATION REPORT (CONTINUED)
## REMUNERATION GOVERNANCE (CONTINUED)
Performance chart
Figure 9 shows the Company’s TSR performance (with dividends reinvested) against the performance of the FTSE 250 and FTSE 100 for
the period since 30 June 2012. These indices have been chosen as they represent companies of a broadly similar market capitalisation to
Ashmore. Each point at a financial year end is calculated using an average total shareholder return value over the month of June (i.e. 1 June
Figure 8 to 30 June inclusive). As the chart indicates, £100 invested in Ashmore on 30 June 2012 was worth £106 10 years later, compared with
£195 for the same investment in the FTSE 100 Index, and £236 for the same investment in the FTSE 250 Index.
Five-year history of percentage changes in the remuneration of the Executive Directors and the fees of Non-
executive Directors relative to the remuneration of a relevant comparator employee group Figure 9
2021 to 2022 2020 to 2021 2019 to 2020 2018 to 2019 2017 to 2018
Total shareholder return – value of hypothetical £100 holding
% change % change % change % change % change
Mark Coombs base salary 0% 0% 0% 0% 0%
300
Tom Shippey base salary 0% 0% 0% 0% 0%
1, 2 250
Clive Adamson fees 15% 0% 4% 22% 13%
£236
1, 3
Helen Beck fees 1,400% 0% – – –
200 £195
1, 4

| David Bennett fees | (20%) 0% 15% 63% 7% |  |  |
| --- | --- | --- | --- |
|  | 1 | 150 |  |
| Jennifer Bingham fees | 3% 0% 0% – – |  |  |
| Relevant comparator employees’ base salary 2% 1% 1% 3% 0% |  |  | £106 |

100
7

| Mark Coombs taxable benefits | 25% (87%) (6%) (8%) (1%) |  |
| --- | --- | --- |
|  | 7 | 50 |
| Tom Shippey taxable benefits | 25% 0% (6%) (4%) 8% |  |

5
David Bennett taxable benefits 0% (100%) (39%) 103% 46%
0
7
Relevant comparator employees’ taxable benefits 25% 0% 0% (5%) (9%) 30 June 12 30 June 13 30 June 14 30 June 15 30 June 16 30 June 17 30 June 18 30 June 19 30 June 20 30 June 2230 June 21
6
Mark Coombs annual bonus (100%) N/A (100%) 50% (50%) Ashmore Group FTSE 250 IndexFTSE 100 Index
Tom Shippey annual bonus (6%) (6%) (10%) 14% (8%)
Relevant comparator employees’ annual bonus (16%) 4% (12%) 10% 5%
1. Non-executive Directors do not receive a bonus. Figure 10
2. Clive Adamson joined the Board on 22/10/15 and chaired the Remuneration Committee from 31/12/17 until 19/10/18; he became the Senior Independent Director and Audit and Risk Committee
Chief Executive Officer
chair on 19/10/18, and became the Chair on 21/04/22.
3. Helen Beck joined the Board on 01/06/21. Figure 10 shows the total remuneration figure for the CEO during each of the financial years shown in the TSR chart. The total remuneration
4. David Bennett joined the Board on 30/10/14 and chaired the Audit and Risk Committee from 22/10/15 until 19/10/18; he acted as Senior Independent Director from 31/12/17 until 19/10/18 and was figure includes the annual bonus and share awards, which vested based on performance in those years. As there is no cap on the maximum
appointed as Chair on 19/10/18. He stepped down from the Board on 20/04/22.
individual bonus award, a percentage of maximum annual bonus is not shown.
5. David Bennett’s taxable benefits relate to transportation costs and the associated income tax and national insurance costs in relation to his role.
Performance-related Percentage of restricted
6. Mark Coombs did not receive a bonus in 2020 or 2022.
Annual restricted and matching and matching phantom
Year ended 30 June Salary Benefits Pension bonus phantom shares vested 1 shares vested Total
7. The increase in taxable benefits is a result of the cost increase of private medical coverage.
Figure 8 compares the percentage change from 2017 to 2022 in remuneration elements for the CEO, the GFD and the Non-executive 2022 £100,000 £1,123 £9,000 – £542,619 79.55% £652,742
Directors with the average year-on-year change across relevant comparator employees as a whole. Relevant comparator employees are all 2021 £100,000 £901 £9,000 £1,241,700 £1,108,587 57.00% £2,460,188
full-time employees and part-time employees on a full-time equivalent basis of Ashmore Group, who have been employed throughout the
2020 £100,000 £7,203 £9,000 – – – £116,203
full performance year. Figures do not include amounts of cash waived to charity.
2019 £100,000 £7,627 £9,000 £2,491,200 £997,173 30.23% £3,605,000
2018 £100,000 £8,293 £9,000 £1,261,277 – – £1,378,570
2017 £100,000 £8,404 £9,000 £3,071,748 £95,574 – £3,284,726
2016 £100,000 £8,400 £9,000 £1,083,458 £284,932 – £1,485,790
£
2015 £100,000 £8,388 £8,000 £2,415,000 £462,159 – £2,993,547
2014 £100,000 £8,934 £7,000 – £452,386 – £568,320
2013 £100,000 £9,330 £7,000 £2,430,000 £421,668 – £2,967,998
1. Performance-related restricted and matching or phantom share equivalent awards vested during the years ending 30 June 2019 and 30 June 2021 plus the value of any dividend equivalents. The
sums shown in earlier years relate to dividends or dividend equivalents paid on share or phantom share awards.
Value (£) (rebased)
Ashmore Group plc Annual Report and Accounts 2022 117
This graph shows the value, by 30 June 2022, of £100 invested in Ashmore Group on 30 June 2012, compared with the value of £100 invested in the FTSE 100 and FTSE 250 indices on the same date.
Source: Factset
116 Ashmore Group plc | Annual Report and Accounts 2022 Ashmore Group plc | Annual Report and Accounts 2022 117
REMUNERATION REPORT (CONTINUED)

# REMUNERATION GOVERNANCE (CONTINUED)

**Figure 11**

# **Relative importance of spend on pay**

|  Metric | 2022 | 2021 | 2021 to 2022 % change  |
| --- | --- | --- | --- |
|  Remuneration paid to or receivable by all employees of the Group (i.e. accounting cost) | **£73.4** | £80.3m | (9%)  |
|  Average headcount | **309** | 301 | 3%  |
|  Distributions to shareholders (dividends and/or share buybacks) | **£118.5m** | £118.3m | 0%  |

**Figure 12**

# **Statement of shareholder voting**

At the 2020 AGM, the Directors' Remuneration policy received the following votes from shareholders:

|  Remuneration policy | 2020 AGM resolution to approve the Directors' Remuneration policy for the years ending 30 June 2021, 2022 and 2023 | % of votes cast  |
| --- | --- | --- |
|  Votes cast in favour | 386,652,049 | 69.16%  |
|  Votes cast against | 172,385,927 | 30.84%  |
|  Total votes cast | 559,037,976 | 100.00%  |
|  Abstentions | 38,657,285 | N/A  |

At the 2021 AGM, the Directors' Remuneration report received the following votes from shareholders:

|  Remuneration report | 2021 AGM resolution to approve the Directors' Remuneration report for the year ended 30 June 2021 | % of votes cast  |
| --- | --- | --- |
|  Votes cast in favour | 464,123,556 | 80.27%  |
|  Votes cast against | 114,108,503 | 19.73%  |
|  Total votes cast | 578,232,059 | 100.00%  |
|  Abstentions | 37,258,133 | N/A  |

For additional information, Figure 13 shows the history of financial results for the last five years.

**Figure 13**

# **Five-year summary of financial results**

|   | 2022 | 2021 | 2020 | 2019 | 2018  |
| --- | --- | --- | --- | --- | --- |
|  AuM US$ billion (at period end) | **64.0** | 94.4 | 83.6 | 91.8 | 73.9  |
|  Operating profit £ million | **119.2** | 258.3 | 209.7 | 202.8 | 176.5  |

118 Ashmore Group plc Annual Report and Accounts 2022
DIRECTORS' REMUNERATION POLICY

# Directors' remuneration policy

This section of the Remuneration report has been prepared in accordance with Part 4 of The Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013. It sets out the Remuneration policy for the Company. The policy has been developed taking into account the principles of the Code and shareholders' executive remuneration guidelines. The current policy was approved by a binding shareholder vote in October 2020, and is expected to apply for three years.

## Policy overview

The Remuneration Committee determines, and agrees with the Board, the Company's policy on the remuneration of the Board Chair, Executive Directors and senior managers including employees designated as Code or Identified Staff under the FCA's Remuneration Codes. The Remuneration Committee's terms of reference are available on the Company's website.

In determining the Remuneration policy, the Remuneration Committee takes into account the following:

- the need to encourage and promote the long-term success of the Company;
- the need to attract, retain and motivate talented Executive Directors and senior management;
- consistency with the remuneration principles applied to Ashmore employees as a whole;
- external comparisons to examine current market trends and practices and equivalent roles in similar companies taking into account their size, business complexity, international scope and relative performance; and
- the requirements of the Remuneration Codes of the UK financial services regulator.

## How the views of shareholders are taken into account

The Remuneration Committee regularly compares the Company's Remuneration policy with shareholder guidelines, and takes account of the results of shareholder votes on remuneration.

If material changes to the Remuneration policy are contemplated, the Remuneration Committee Chair consults with major shareholders about these in advance.

Details of votes cast to approve the Directors' Remuneration policy and last year's Annual Report on Remuneration are provided in the Annual Report on Remuneration section of this report.

Ashmore seeks to build direct relationships with shareholders and potential investors through a comprehensive investor relations plan with a focus on managing roadshows and other interactions in-house. The Executive Directors meet regularly with investors and the rest of the Board is responsive to shareholder requests for engagement.

The Company held more than 140 virtual and physical meetings during the year. Consequently, the largely institutional shareholder base continues to have a good understanding of the Group's strategy and business model. Ashmore continues to respond to feedback by enhancing disclosures relating to remuneration.

At last year's AGM, over 80% of shareholders voted in favour of the Remuneration report. This reflects progress in the Company's efforts after the 2020 AGM to engage with shareholders and proxy adviser teams and the Committee keep this under review.

STRATEGIC REPORT

GOVERNANCE

FINANCIAL STATEMENTS

Ashmore Group plc Annual Report and Accounts 2022 119
DIRECTORS’ REMUNERATION POLICY (CONTINUED)
Figure 14
Remuneration policy (the Policy) for Executive Directors
Policy table
The table below summarises the key aspects of the Company’s Remuneration policy for Executive Directors which is effective from
16 October 2020.
Base salary (Fixed pay)
Purpose and link to short and long-term strategy Operation, performance measures and periods,
deferral and clawback
Provides a level of fixed remuneration sufficient to permit a zero
bonus payment, should that be appropriate. The cap on base Base salaries are capped.
salary helps to contain fixed costs.
Maximum opportunity
The current cap is £120,000.
The cap is reviewed periodically; the Policy permits the cap to be
changed if this is deemed necessary to meet business, legislative
or regulatory requirements.
Fringe benefits (Fixed pay)
Purpose and link to short and long-term strategy Operation, performance measures and periods,
deferral and clawback
Provide cost-effective benefits, to support health and wellbeing.
The Company currently provides benefits such as medical
insurance and life insurance. In the event of relocation of an
executive, the Company could consider appropriate relocation
assistance. Specific benefits provision may be subject to minor
change from time to time, within the Policy.
Maximum opportunity
Fringe benefits are not subject to a specific cap, but represent
only a small percentage of total remuneration.
Pension (Fixed pay)
Purpose and link to short and long-term strategy Operation, performance measures and periods,
deferral and clawback
Provides a basic level of Company contribution, which individuals
can supplement with their own contribution. Company contributions are made, normally on a defined
contribution basis, either to a pension plan or in the form of an
equivalent cash allowance.
Maximum opportunity
The current level of Company contribution is 9% of base salary,
with a further matching contribution of up to 1% of base salary,
should the Executive Director make a personal contribution of an
equivalent amount. The contribution level for Executive Directors
is aligned with the general workforce, and is reviewed periodically;
the Policy permits the Company-wide contribution rate to be
amended if necessary to reflect trends in market practice and
changes to pensions legislation.
120 Ashmore Group plc Annual Report and Accounts 2022
120 Ashmore Group plc | Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
DIRECTORS’ REMUNERATION POLICY (CONTINUED)
Variable compensation (Discretionary)
Purpose and link to short and long-term strategy 3. Restricted matching shares awarded on the
voluntarily commuted cash bonus (from 1 above)
Rewards performance and ensures interests of Executive
Figure 14
Directors are closely aligned with other shareholders. Matching is provided on the voluntarily commuted cash bonus,
Remuneration policy (the Policy) for Executive Directors subject to the same performance conditions on half of the
Operation, performance measures
matching award as that described in 2 above. The maximum
Policy table and periods, deferral and clawback
match used to date on any award made under the current
The table below summarises the key aspects of the Company’s Remuneration policy for Executive Directors which is effective from Executive Directors are considered each year for a discretionary
Policy was one-for-one; the Policy permits the matching level to
16 October 2020. variable pay award depending on personal and Company
be changed for future awards but not to exceed three-for-one.
performance, by applying a range of performance indicators
Dividends or dividend equivalents on deferred restricted bonus
Base salary (Fixed pay) such as growth in AuM, investment performance, profits, and
share (or phantom equivalent) awards and on the portion of
strategic and operational achievements. The variable pay award
restricted share and restricted matching share awards that are
comprises a cash bonus (part of which may be voluntarily
Purpose and link to short and long-term strategy Operation, performance measures and periods,
not subject to a performance condition vesting after five years
deferred into restricted shares) and a long-term incentive in the
deferral and clawback
Provides a level of fixed remuneration sufficient to permit a zero will be paid out in line with the Company’s dividend payment
form of both a restricted share award and a restricted matching
bonus payment, should that be appropriate. The cap on base Base salaries are capped. schedule. Dividends or dividend equivalents on the portion
share award on any voluntarily deferred cash bonus.
salary helps to contain fixed costs. of restricted and restricted matching share (or phantom
Maximum opportunity
1. Cash bonus (60% of total award)
equivalent) awards which are subject to a performance
The current cap is £120,000.
The Executive Director may voluntarily commute up to half of condition will be accrued and paid out at the time the award
The cap is reviewed periodically; the Policy permits the cap to be the cash bonus in return for the same value in a restricted bonus vests and to the extent of vesting. For any awards made to an
changed if this is deemed necessary to meet business, legislative share award (or phantom equivalent) deferred for five years. Executive Director prior to his or her appointment as a
or regulatory requirements. The deferred shares are eligible for restricted matching shares Executive Director, the dividend or dividend equivalent
(or phantom equivalent) vesting after five years subject to payments are made on share awards in full, under previous
conditions (see 3 below). commitments made to participants.
Fringe benefits (Fixed pay) Long-term incentives under the Company Executive The Remuneration policy permits the award of deferred
remuneration in alternative forms such as share options,
Omnibus Incentive Plan (Omnibus Plan)
Purpose and link to short and long-term strategy Operation, performance measures and periods, although none have been granted in recent years, and to vary
2. Restricted shares award (40% of total award)
the percentage split of award between cash and share awards
deferral and clawback
Provide cost-effective benefits, to support health and wellbeing.
There is no separate long-term incentive plan, rather 40% of to meet business, legislative or regulatory requirements.
The Company currently provides benefits such as medical
the Executive Director’s annual bonus is compulsorily deferred Awards will be delivered in the appropriate combination of cash
insurance and life insurance. In the event of relocation of an
into Company shares (or phantom equivalent) for a period of five and shares, in line with prevailing regulatory requirements. The
executive, the Company could consider appropriate relocation
years and does not qualify for matching. Half of this deferred combination of cash and instruments will be determined each
assistance. Specific benefits provision may be subject to minor
portion is subject to additional performance conditions on year by the Remuneration Committee.
change from time to time, within the Policy.
vesting. The Policy permits the Remuneration Committee to set
The Remuneration Committee also retains discretion,
Maximum opportunity suitable performance conditions each year for each award type.
if required by regulation, to include a minimum retention
The performance condition for the most recent award is set out
Fringe benefits are not subject to a specific cap, but represent period for incentive awards in addition to or as partial
on page 109.
only a small percentage of total remuneration. replacement for a deferral period (usually with a combined
These performance conditions are chosen to closely align the deferral / retention period of at least five years).
remuneration outcomes for the Executive Directors with the
performance of the business relative to its KPIs. Targets are set
Pension (Fixed pay)
that are appropriately challenging relative to relevant internal and
external benchmarks. The maximum level of vesting for
Purpose and link to short and long-term strategy Operation, performance measures and periods,
achieving threshold performance is 25%. Where required by
deferral and clawback
Provides a basic level of Company contribution, which individuals
regulation, the amount of variable pay which is deferred will be
can supplement with their own contribution. Company contributions are made, normally on a defined
increased to ensure compliance with regulatory deferral levels
contribution basis, either to a pension plan or in the form of an
for all variable pay.
equivalent cash allowance.
Maximum opportunity
The current level of Company contribution is 9% of base salary,
with a further matching contribution of up to 1% of base salary,
should the Executive Director make a personal contribution of an
equivalent amount. The contribution level for Executive Directors
is aligned with the general workforce, and is reviewed periodically;
the Policy permits the Company-wide contribution rate to be
amended if necessary to reflect trends in market practice and
Ashmore Group plc Annual Report and Accounts 2022 121
changes to pensions legislation.
120 Ashmore Group plc | Annual Report and Accounts 2022 Ashmore Group plc | Annual Report and Accounts 2022 121
DIRECTORS’ REMUNERATION POLICY (CONTINUED)
Maximum opportunity The Remuneration Committee may, in its discretion, determine
at any time prior to the sixth anniversary of the date of grant or
The aggregate variable compensation pool for all employees,
such longer period as the Remuneration Committee
including Executive Directors, is capped, currently at 25% of
determines is required by any applicable law or regulation to:
EBVCIT. The Policy permits the Remuneration Committee to
vary this cap if necessary to meet business needs. – reduce or extinguish the number of shares to which an
award relates;
The Policy is to cap the aggregate sum available for variable
– cancel an award;
compensation rather than to cap individual variable
compensation awards. – impose further conditions on an award;
– impose further restrictions on the shares subject to an award;
The high proportion of VC deferral, with vesting after five
– require a participant to make a cash payment to the Company
years and subject in part to ongoing performance conditions,
in respect of some or all of the shares or cash delivered
encourages a prudent approach to risk management, in support
under the award and the basis on which the amount of cash
of the Company’s risk and compliance controls. Most importantly,
or shares is calculated including whether and if so to what
though, the remuneration structure is designed to support and
extent to take account of any tax or social security liability
fit with the long-term strategy of the business. The Group
applicable to the award; and/or
operates in a growth sector which experiences market cycles
and this aspect of the Remuneration policy plays a key role in – require a participant to transfer for nil consideration some or
providing flexibility in variable costs, enabling key staff retention all of the shares delivered under the award.
during times of market stress, and thereby aligns the interests
Personal shareholding
of clients, shareholders and employees including Executive
Existing Executive Directors are usually required to build up and
Directors through such cycles.
then maintain a shareholding equivalent to 200% of salary over
Malus and clawback the three-year period from October 2017, and from the first
In addition to the performance condition described above, five-year vesting date for newly appointed Executive Directors.
the Remuneration Committee has the discretion to apply The minimum number of shares to be held by existing
malus and clawback provisions to all elements of variable Executive Directors is based on the closing price of Ashmore
remuneration, including to unvested equity awards made in prior Group plc shares on 30 June 2020, which was £4.172.
periods. The Remuneration Committee may choose to exercise
Post-employment shareholding
this discretion for a number of reasons, for example:
Executive Directors are usually required to maintain a
– a material misstatement of the Company’s or any other Group
shareholding of 200% of salary for two years post termination
company’s financial results;
of their employment. The minimum number of shares to
– an error in assessing a performance condition applicable to an be held is based on the market price of Ashmore shares on
award or in the information or assumptions on which the the year end date of 30 June prior to their termination date.
award was granted or vests; The Committee retains discretion to waive this guideline if it is
– a material failure of risk management by the Company, not considered appropriate in the specific circumstances.
any other Group company or a relevant business unit;
– serious reputational damage to the Company, any other Group
company or a relevant business unit;
– misconduct on the part of the participant; or
– any other circumstances which the Remuneration Committee
in its discretion considers to be similar in their nature or effect.
122 Ashmore Group plc Annual Report and Accounts 2022
122 Ashmore Group plc | Annual Report and Accounts 2022
STRATEGIC REPORT

GOVERNANCE

FINANCIAL STATEMENTS

### Differences in Remuneration policy for Executive Directors compared with other employees

The Remuneration policy for the Executive Directors is generally consistent with that for employees across the Company as a whole. However, there are some differences which the Remuneration Committee believes are necessary to reflect the different responsibilities of employees across the Company. Below Executive Director level, while the same five-year deferral policy applies, share awards are not subject to additional performance conditions. Group employees other than Executive Directors may elect to receive up to the first £50,000 (or local currency equivalent) of their annual bonus delivered as 90% cash and 10% as restricted shares, rather than in the Company's usual proportions of 60% cash and 40% restricted shares.

#### External Non-executive Director positions

Executive Directors are permitted to serve as Non-executive Directors of other companies where there is no competition with the Company's business activities and where these duties do not interfere with the individual's ability to perform his or her duties for the Company. Tom Shippey holds one unpaid external appointment with a charitable organisation unconnected to the asset management industry. Mark Coombs is Co-Chair of EMTA, the trade association for Emerging Markets, having been on the Board since 1993. Other than as noted above, the Executive Directors do not presently hold any external directorships with any non-Ashmore-related companies.

Where an outside appointment is accepted in furtherance of the Company's business, any fees received are remitted to the Company.

If the appointment is not connected to the Company's business, the Executive Director is entitled to retain any fees received.

#### Approach to remuneration for new Executive Director appointments

The remuneration package for an externally recruited new Executive Director would be set in accordance with the terms and maximum levels of the Company's approved Remuneration policy in force at the time of appointment.

In addition, the Remuneration Committee may offer additional cash and/or share-based elements to take account of any remuneration relinquished when leaving the former employer, when it considers these to be in the best interests of the Company (and therefore shareholders). In considering any such payments, the Committee would take account of the nature, vesting dates and any performance requirements attached to the relinquished remuneration. The Committee may determine to make any such recruitment related awards outside the variable pay pool cap. For an internal appointment, any variable pay element awarded in respect of the prior role may be allowed to be paid out according to its terms, adjusted if necessary, to take into account the appointment.

For external and internal appointments, the Company may meet certain relocation expenses as appropriate including but not limited to assistance with housing, immigration, taxes and travel.

#### Service contracts and loss of office payment policy

Service contracts normally continue until the Executive Director's agreed retirement date or such other date as the parties agree.

The service contracts contain provisions for early termination.

Notice periods are limited to 12 months by either party. Service agreements contain no contractual entitlement to receive variable pay; participation in these arrangements is at the Remuneration Committee's discretion. The Executive Directors' service contracts are available for inspection at the Company's registered office during normal business hours.

If the employment of an Executive Director is terminated without giving the period of notice required under the contract, the Executive Director would be entitled to claim recompense for up to one year's remuneration subject to consideration of the obligation to mitigate the loss. Such recompense is expected to be limited to base salary due for any unexpired notice period, and any amount assessed by the Remuneration Committee as representing the value of other contractual benefits and pension which would have been received during the period. In the event of a change of control of the Company, there is no enhancement to these terms.

In summary, the contractual provisions are as follows:

|  Provision | Detailed terms  |
| --- | --- |
|  Notice period | 12 months  |
|  Termination payment in the event of termination by the Company without due notice | Base salary plus value of benefits (including pension) paid monthly and subject to mitigation  |
|  Change of control | Same terms as above on termination  |

Any outstanding share-based entitlements granted to an Executive Director under the Company's share plans will be determined based on the relevant plan rules.

An Executive Director's service contract may be terminated without notice and without any further payment or compensation, except for sums accrued up to the date of termination, on the occurrence of certain events such as gross misconduct.

The Committee reserves the right to make any other payments in connection with a Director's cessation of office or employment where the payments are made in good faith in discharge of an existing legal obligation (or by way of damages for breach of such an obligation) or by way of a compromise or settlement of any claim arising in connection with the cessation of a Director's office or employment. Any such payments may include but are not limited to paying any fees for outplacement assistance and/or the Director's legal and/or professional advice fees in connection with cessation of office or employment and/or retirement gifts.

Ashmore Group plc Annual Report and Accounts 2022 123
DIRECTORS’ REMUNERATION POLICY (CONTINUED)
Incentive plan discretions Non-executive Directors
The Remuneration Committee will operate the current share plans Non-executive Directors are engaged under letters of appointment
in accordance with their respective rules and the Policy set out and do not have contracts of service. They are appointed for an
above, and in accordance with the Listing Rules and relevant initial three-year period, subject to annual shareholder re-election.
legislation or regulation. As is consistent with market practice, Their continued engagement is subject to the requirements of the
the Remuneration Committee retains discretion over a number Company’s Articles relating to the retirement of Directors by
of areas relating to operating and administrating these plans. rotation. The letters of appointment are available for inspection at
These include (but are not limited to) the following: the Company’s registered office during normal business hours.
– who participates in the plans; Compliance with the Remuneration Codes
– the timing of the grant of an award and/or payment;
The Remuneration Committee regularly reviews its Remuneration
– the size of an award and/or a payment within the plan limits Policy’s compliance with the principles of the FCAs Remuneration
approved by shareholders; Codes, as applicable to Ashmore.
– the choice of (and adjustment of) performance measures and
The Remuneration policy is designed to be consistent with the
targets in accordance with the Policy set out above and the rules
prudent management of risk, and the sustained, long-term
of each plan (including the treatment of delisted companies for
performance of the Company.
the purpose of the TSR comparator group);
Reward scenarios
– discretion relating to the measurement of performance in the
event of a change of control or reconstruction; The Remuneration policy results in the majority of the remuneration
– determination of a good leaver (in addition to any specified received by the Executive Directors being dependent
categories) for incentive plan purposes, based on the rules of on performance, and being deferred for five years into
each plan and the appropriate treatment under the plan rules; restricted shares.
– adjustments required in order to comply with any new regulatory As noted earlier, the Policy is not to cap individual awards, but rather
requirements which the Company is compelled to adhere to; and the aggregate pool. As such, it is not possible to demonstrate
– adjustments required in certain circumstances (e.g. rights issues, maximum remuneration levels. In lieu of this, the minimum (fixed)
corporate restructuring, special dividends and on a change remuneration is illustrated in Figure 15, which provides an
of control). indication of the potential range of total remuneration using the
highest and lowest variable pay awards in a rolling five-year period.
Any use of the above discretions would, where relevant, be
The variable pay awards are shown assuming full vesting five years
explained in the Annual Report on Remuneration. As appropriate,
later of the long-term incentive components based on achievement
it might also be the subject of consultation with the Company’s
relative to the performance conditions, both at the grant price and
major shareholders.
also with 50% share price growth.
The Committee may make minor amendments to this Policy (for
regulatory, exchange control, tax or administrative purposes or to
take account of a change in legislation) without obtaining
shareholder approval for that amendment.
Legacy arrangements
For the avoidance of doubt, this Policy includes authority for the
Company to honour any commitments entered into with current or
former Directors that have been disclosed to shareholders in
previous Remuneration reports. Details of any payments to former
Directors will be set out in the Annual Report on Remuneration as
they arise.
124 Ashmore Group plc Annual Report and Accounts 2022
124 Ashmore Group plc | Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
DIRECTORS’ REMUNERATION POLICY (CONTINUED)
Figure 15
CEO GFD
Incentive plan discretions Non-executive Directors
The Remuneration Committee will operate the current share plans Non-executive Directors are engaged under letters of appointment £3657.6
in accordance with their respective rules and the Policy set out and do not have contracts of service. They are appointed for an
above, and in accordance with the Listing Rules and relevant initial three-year period, subject to annual shareholder re-election.
legislation or regulation. As is consistent with market practice, Their continued engagement is subject to the requirements of the
the Remuneration Committee retains discretion over a number Company’s Articles relating to the retirement of Directors by
of areas relating to operating and administrating these plans. rotation. The letters of appointment are available for inspection at 52.2%
These include (but are not limited to) the following: the Company’s registered office during normal business hours.
– who participates in the plans; Compliance with the Remuneration Codes
– the timing of the grant of an award and/or payment;
The Remuneration Committee regularly reviews its Remuneration
– the size of an award and/or a payment within the plan limits Policy’s compliance with the principles of the FCAs Remuneration
£1,762
approved by shareholders; Codes, as applicable to Ashmore.
– the choice of (and adjustment of) performance measures and 23.3%
The Remuneration policy is designed to be consistent with the £1,257
targets in accordance with the Policy set out above and the rules 50%
prudent management of risk, and the sustained, long-term
of each plan (including the treatment of delisted companies for 41%
performance of the Company.
the purpose of the TSR comparator group);

|  |  |  | 8% |  | 8% | 21.4% | 0.2% | 9% |  | 7% |  | 0.5% |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | Reward scenarios |  |  |  |  |  |  |  |  | 1% | 21% |  |
| – discretion relating to the measurement of performance in the |  |  | 1% |  | 6% |  | 0.2% £5,861.9 | 2% |  |  |  | 0.5% |
|  |  | £110 £112 |  | £116 |  |  |  |  | 41% | 1% |  |  |

21%

|  | event of a change of control or reconstruction; | The Remuneration policy results in the majority of the remuneration |  | 91% |  |  |  | 2.7%86% |  | 89% |  | 9% |  |  | 7% |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| – determination of a good leaver (in addition to any specified |  | received by the Executive Directors being dependent |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  | Fixed/Minimum Lowest pay |  |  |  | Highest pay |  | Fixed/Minimum Lowest pay |  |  |  |  | Highest pay |  |
|  |  | on performance, and being deferred for five years into |  |  | received in five-year | received in five-year |  |  |  |  | received in five-year |  | received in five-year |  |  |

categories) for incentive plan purposes, based on the rules of
rolling period rolling period rolling period rolling period
each plan and the appropriate treatment under the plan rules; restricted shares.
Base salary Benefits Pension Share bonus (face value using share price at grant) Cash bonus
– adjustments required in order to comply with any new regulatory As noted earlier, the Policy is not to cap individual awards, but rather
requirements which the Company is compelled to adhere to; and the aggregate pool. As such, it is not possible to demonstrate LTI: restricted shares and matching awards (face value using share price at grant) Additional value created should LTI increase in value by 50%
– adjustments required in certain circumstances (e.g. rights issues, maximum remuneration levels. In lieu of this, the minimum (fixed)
corporate restructuring, special dividends and on a change remuneration is illustrated in Figure 15, which provides an Figure 16
of control). indication of the potential range of total remuneration using the
Fees policy for the Board Chairman and other Non-executive Directors
highest and lowest variable pay awards in a rolling five-year period.
Any use of the above discretions would, where relevant, be Element Purpose and link to strategy Operation Maximum
The variable pay awards are shown assuming full vesting five years
explained in the Annual Report on Remuneration. As appropriate,
Executive Director total remuneration at different levels of performance (£’000) – Board – To pay an all-inclusive – The Board Chair is paid a single fee for – The overall fees payable to Non-
later of the long-term incentive components based on achievement
it might also be the subject of consultation with the Company’s
Chair fee basic fee that takes all his responsibilities. The level of the fee is executive Directors will remain within
relative to the performance conditions, both at the grant price and
major shareholders.
account of the role reviewed periodically by the Committee, the limit stated in the Articles of
also with 50% share price growth.
The Committee may make minor amendments to this Policy (for and responsibilities with reference to market levels in Association, currently £750,000
£5,000

| regulatory, exchange control, tax or administrative purposes or to |  |  | comparably sized FTSE companies, and a | – The current level of fees is disclosed in |  |
| --- | --- | --- | --- | --- | --- |
| take account of a change in legislation) without obtaining |  |  | recommendation is then made to the Board |  | the Annual Report on Remuneration |
| shareholder approval for that amendment. |  |  | (without the Chair being present) |  |  |
|  | £4,000 | – The Board Chair may also be paid expenses |  |  |  |

Legacy arrangements
in relation to the performance of his role
For the avoidance of doubt, this Policy includes authority for the
– Non-executive – To pay an all-inclusive – The Non-executive Directors are paid a – The overall fees payable to Non-
Company to honour any commitments entered into with current or

|  |  | Director fees | basic fee that takes | single inclusive basic fee. There are no | executive Directors will remain within |
| --- | --- | --- | --- | --- | --- |
| former Directors that have been disclosed to shareholders in | £3,000 |  |  |  |  |
|  |  |  | account of the role | supplements for Committee Chairs | the limit stated in the Articles of |

previous Remuneration reports. Details of any payments to former
and responsibilities or memberships; the fee levels are Association, currently £750,000
Directors will be set out in the Annual Report on Remuneration as
reviewed periodically by the Chair and – The current level of fees is disclosed in
they arise.
£2,000 Executive Directors
the Annual Report on Remuneration
– The Non-executive Directors may also
be paid expenses in relation to the
performance of their roles
£1,000
£0
Ashmore Group plc Annual Report and Accounts 2022 125
124 Ashmore Group plc | Annual Report and Accounts 2022 Ashmore Group plc | Annual Report and Accounts 2022 125
DIRECTORS’ REMUNERATION POLICY (CONTINUED)
Consistent Company-wide approach
The Company applies a consistent remuneration philosophy for employees at all levels.
The cap on base salary means that Executive Directors’ base salaries are set at a similar level to other senior investment and professional
employees in the Company, and the base salary range from lowest to highest in the Company is considerably narrower than the market
norm. All employees are eligible for a performance-related annual bonus, and the principle of bonus deferral into Company shares or
equivalent applies to annual bonuses for all employees who have at least one full year’s service. Group employees other than Executive
Directors may elect to receive up to the first £50,000 (or local currency equivalent) of their annual bonus delivered as 90% cash and 10% as
restricted shares, rather than in the Company’s usual proportions of 60% cash and 40% restricted shares. Rates of pension contribution and
fringe benefit provisions are consistent between executives and other employees within each country where the Company operates.
The Company does not operate formal employee consultation on remuneration. However, employees are able to provide direct feedback on
the Company’s Remuneration policy to their line managers, the Human Resources team, the designated Non-executive Director for
workforce engagement or to the Board directly through our regular process of teams meeting the Board.
The CEO presents the Company’s detailed financial results, including the financial and economic factors affecting the performance of the
business, to all employees as part of both interim and full year results announcements. There follows a detailed Q&A session with
employees covering the results, the firm’s strategy, market conditions and other topics of interest.
The Remuneration Committee monitors the effectiveness of the Company’s Remuneration policy in recruiting, retaining, developing,
engaging and motivating employees, and receives reports from the CEO and the Group Head of Human Resources on how the Company’s
remuneration policies are viewed by employees and whether they are meeting business needs.
The Remuneration Committee does not seek to apply fixed ratios between the total remuneration levels of different roles in the Company,
as this would prevent it from recruiting and retaining the necessary talent in a highly competitive employment market. However, the base
salary multiple between the highest and lowest paid UK-based employees in the Company is less than 4x.
Approval
This Directors’ Remuneration report including both the proposed Directors’ Remuneration policy and the Annual Report on Remuneration
has been approved by the Board of Directors.
Signed on behalf of the Board of Directors.
Helen Beck
Chair of the Remuneration Committee
1 September 2022
126 Ashmore Group plc Annual Report and Accounts 2022
126 Ashmore Group plc | Annual Report and Accounts 2022
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
The Directors are responsible for preparing the Annual Report and Under applicable law and regulations, the Directors are also
Accounts and the Group and parent Company financial statements responsible for preparing a Strategic report, Directors’ report,
in accordance with applicable law and regulations. Remuneration report and Corporate governance statement that
complies with such law and regulations.
Company law requires the Directors to prepare Group and parent
Company financial statements for each financial year. Under that The Directors are responsible for the maintenance and integrity of
law they are required to prepare the Group financial statements in the corporate and financial information included on the Company’s
accordance with UK adopted international accounting standards website. Legislation in the UK governing the preparation and
and applicable law and have elected to prepare the parent dissemination of financial statements may differ from legislation in
Company financial statements on the same basis. other jurisdictions.
Under company law the Directors must not approve the financial In accordance with DTR4.1.14R, the financial statements will form
statements unless they are satisfied that they give a true and fair part of an annual report and accounts prepared using the single
view of the state of affairs of the Group and parent Company and electronic reporting format under ESEF. The auditor’s report on
of the Group’s profit or loss for that period. In preparing each of the these financial statements provides no assurance over the
Group and parent Company financial statements, the Directors are ESEFformat.
required to:
Responsibility statement of the Directors in respect
– select suitable accounting policies and then apply themconsistently;
of the Annual Report and Accounts
– make judgements and estimates that are reasonable, relevant
The Directors confirm that to the best of their knowledge:
and reliable;
– state whether they have been prepared in accordance with UK – the financial statements, prepared in accordance with the
adopted international accounting standards; applicable set of accounting standards, give a true and fair view
of the assets, liabilities, financial position and profit or loss of the
– assess the Group and parent Company’s ability to continue as a
Company and the undertakings included in the consolidation
going concern, disclosing, as applicable, matters related to going
taken as a whole; and
concern; and
– the Strategic report and Directors’ report includes a fair review
– use the going concern basis of accounting unless they either
of the development and performance of the business and the
intend to liquidate the Group or the parent Company or to cease
position of the Company and the undertakings included in the
operations, or have no realistic alternative but to do so.
consolidation taken as a whole, together with a description of the
The Directors are responsible for keeping adequate accounting
principal risks and uncertainties that they face.
records that are sufficient to show and explain the parent
The Directors consider the Annual Report and Accounts, taken as
Company’s transactions and disclose with reasonable accuracy at
a whole, isfair, balanced and understandable and provides the
any time the financial position of the parent Company and enable
information necessary for shareholders to assess the Group’s
them to ensure that its financial statements comply with the Act.
position and performance, business model and strategy.
They are 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,
Clive Adamson
and have general responsibility for taking such steps as are
Chair
reasonably open to them to safeguard the assets of the Group and
to prevent and detect fraud and otherirregularities.
1 September 2022
Ashmore Group plc Annual Report and Accounts 2022 127
DIRECTORS' REPORT

## The Directors present their Annual Report and Accounts for the year ended 30 June 2022.

The financial statements have been prepared in accordance with UK adopted international accounting standards.

### Principal activity and business review

The principal activity of the Group is the provision of investment management services. The Company is required to set out in this report a fair review of the business of the Group during the financial year ended 30 June 2022 and of the position of the Group at the end of that financial year and a description of the principal risks and uncertainties facing the Group (referred to as the Business review). The information that fulfils the requirements of the Business review, along with an indication of the likely future developments in the business, can be found in the financial highlights on the inside front cover, the Chief Executive Officer's review on page 2, the Business review on pages 30 to 37 and the Corporate governance report on pages 82 to 89.

The Group's approach to financial risk management and the principal operating risks facing the business, including price risk, credit risk, liquidity risk and cash flow risk are detailed on pages 38 to 45.

### Results and dividends

The results of the Group for the year are set out in the CSCI on page 142.

The Directors are recommending a final dividend of 12.10 pence per share (FY2020/21: 12.10 pence) which, together with the interim dividend of 4.80 pence per share (FY2020/21: 4.80 pence) already declared, makes a total for the year ended 30 June 2022 of 16.90 pence per share (FY2020/21: 16.90 pence). Further details relating to dividends are set out in note 14 to the financial statements.

Subject to approval at the AGM, the final dividend will be paid on 9 December 2022 to shareholders on the register on 4 November 2022 (the ex-dividend date being 3 November 2022).

### Related party transactions

Details of related party transactions are set out in note 28 to the financial statements.

### Directors

The members of the Board together with their biographical details are shown on pages 80 to 81. Shirley Garrood was appointed as a Director on 1 August 2022. All other members of the Board served as Directors throughout the year.

Details of the service contracts of the current Directors are described on page 133.

Under the Articles, the minimum number of Directors is two and the maximum is nine. Directors may be appointed by the Company by ordinary resolution or by the Board. A Director appointed by the Board must offer himself/herself for election at the next AGM following their appointment. That Director is not taken into account in determining the Directors or the number of Directors who are to

retire by rotation at that meeting. Notwithstanding these provisions, the Board has adopted provision 18 of the Code and all Directors will retire and seek re-election at each AGM. The Listing Rules require that the election/re-election of independent directors is by a majority of votes cast by independent shareholders as well as by a majority of votes cast by all shareholders.

The Board confirms that the Company and Mark Coombs entered into a relationship agreement on 1 July 2014 as required under UK Listing Rule 9.2.2ADR(1); and that: (i) the Company has complied with the independence provisions included in that agreement; (ii) so far as the Company is aware, Mark Coombs has complied with the independence provisions included in that agreement; and (iii) so far as the Company is aware, Mark Coombs has complied with the procurement obligation included in that agreement pursuant to UK Listing Rule 9.2.2BR(2)(a), in each case during the financial year ended 30 June 2022.

### Diversity

The Nominations Committee and the Board recognise the importance of diversity and ensuring candidates for Board appointments, whilst being assembled on merit and objective criteria, wherever possible reflect different genders, ethnic and social backgrounds. In addition, the Nominations Committee, in assessing the suitability of a prospective Director, will consider whether the candidate is 'over-boarded' and has sufficient time available to discharge their duties, and the overall balance of skills, experience and knowledge on the Board.

It is Ashmore's policy to attract and retain a diverse workforce. Whilst there are no quotas set in respect of gender, age, educational or professional background, Ashmore is committed to providing equal opportunities and seeks to ensure that its workforce reflects, as far as is practicable, the diversity of the many communities in which it operates. Details of the gender balance across the Group and in relation to senior management and their direct reports are provided on pages 52 and 70. It is the Group's policy to give appropriate consideration to applications from persons with disabilities, having regard to their particular aptitudes and abilities. For the purposes of training, career development and progression (including those who become disabled during the course of their employment), all are treated on equal terms with other employees.

### Engagement with employees and wider stakeholders

The Board, at a series of 'meet the teams' sessions chaired by Jennifer Bingham as the Non-executive Director for workforce engagement, listened to employees' views on the Group and these interactive sessions help shape the Group's culture, in addition to other forms of employee engagement such as regular employee newsletters and off-site team building exercises across the Group's offices. Ashmore's engagement with other stakeholders and the outcomes are detailed in the Section 172 statement on page 46.

128 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Insurance and indemnification ofDirectors
The Company maintains Directors’ and officers’ liability insurance for all Directors. To the extent permissible by law, the Articles of
Association also permit the Company to indemnify Directors and former Directors against any liability incurred whilst serving in such capacity.
Directors’ conflicts of interest
The Act imposes upon Directors a statutory duty to avoid unauthorised conflicts of interest with the Company. The Company’s Articles of
Association enable Directors to approve conflicts of interest and also include other conflict of interest provisions. The Company has
implemented processes to identify potential and actual conflicts of interest. Such conflicts are then considered for approval by the Board,
subject, where necessary, to appropriate conditions.
Save as disclosed on page 80, Executive Directors do not presently hold any external appointments with any non-Ashmore-related companies.
Directors’ share interests
The interests of Directors in the Company’s shares are shown on page 113 within the Remuneration report.
Significant agreements with provisions applicable to a change in control of the Company
Save as described, there are no agreements in place applicable to a change in control of the Company.
Resolution 17 in the Notice of AGM will seek approval from shareholders to a waiver of the provisions of Rule 9 of the Takeover Code in
respect of the obligation that could arise for MarkCoombs to make a mandatory offer for the Company in the event that the Company
exercises the authority to make market purchases of its own shares. Further details will be contained in the separate Noticeof AGM.
Substantial shareholdings
The Company has been notified of the following significant interests in accordance with the DTRs (other than those of the Directors which
are disclosed separately on page 113) in the Company’s ordinary shares of 0.01pence each as set out in the table below.
1

| Substantial shareholdings | (as disclosed to the Company in accordance with DTR 5) |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  | Number of voting |  |  |  |  | Number of voting |  |  |
|  |  | rights disclosed as at |  |  | Percentage |  | rights disclosed as at |  | Percentage |  |
|  |  |  |  |  |  | 3 |  |  |  | 3 |
|  |  |  |  | 30 June 2022 | interests |  |  | 1 September 2022 | interests |  |

2
Overseas Pensions and Benefits Limited 50,648,181 7.10 50,648.181 7.10
Standard Life Aberdeen plc 54,815,884] 7.69 54,815,884 7.69
Schroders plc 34,470,970 4.85 34,470,970 4.85
Allianz Global Investors GmbH 32,695,220 4.58 32,695,220 4.58
Black Rock Inc. 39,793,689 5.57 39,793,689 5.57
1. The shareholding of Mark Coombs, a Director and substantial shareholder, is disclosed separately on page 111.
2. In addition to the interests in the Company’s ordinary shares referred to above, each Executive Director and employee of the Group has an interest in the Company’s
ordinary shares held by Overseas Pensions and Benefits Limited under the terms of the EBT. The voting rights disclosed for the EBT in this table reflect the last
notification made to the Company in accordance with DTR 5. The actual number of shares held by the EBT as at 30 June 2022 is disclosed in note 23 to the
financialstatements.
3. Percentage interests are based upon 712,740,804 shares in issue (2021: 712,740,804).
Ashmore Group plc Annual Report and Accounts 2022 129
DIRECTORS' REPORT (CONTINUED)

## Relations with shareholders

The Company places great importance on communication with its investors and aims to keep shareholders informed by means of regular communication with institutional shareholders, analysts and the financial press throughout the year.

Annual and interim reports and quarterly AuM updates are widely distributed to other parties who may have an interest in the Group's performance. These documents are also made available on the Company's website where formal regulatory information service announcements are posted. The CEO and GFD report to the Board on investor relations and on specific discussions with major shareholders.

The Company will be issuing a separate circular and Notice of Meeting in respect of this year's AGM. The Group will announce the number of votes cast on resolutions at the AGM via a regulatory information service.

The Senior Independent Director is available to shareholders if they have concerns where contact through the normal channels of Chair, CEO or GFD has failed to resolve it or for which such contact is inappropriate. The Company continues to offer major shareholders the opportunity to meet any or all of the Chair, the Senior Independent Director and any new Directors.

## Share capital

The Company has a single class of share capital, ordinary shares of 0.01 pence, each of which rank pari passu in respect of participation and voting rights. The shares are in registered form. The issued share capital of the Company at 30 June 2022 was 712,740,804 shares. There were no shares held in Treasury.

Details of the structure of and changes in share capital are set out in note 22 to the financial statements.

## Restrictions on voting rights

A member shall not be entitled to vote at any general meeting or class meeting in respect of any share held by him if any call or other sum then payable by him in respect of that share remains unpaid or if a member has been served with a restriction notice (as defined in the Articles of Association) after failure to provide the Company with information concerning interests in those shares required to be provided under the Act. Votes may be exercised in person or by proxy. The Articles of Association currently provide a deadline for submission of proxy forms of 48 hours before the meeting.

## Purchase of own shares

In the year under review, the Company did not purchase any of its own shares for Treasury and the EBT purchased 10,827,365 shares worth £34.1 million. Until the date of the next AGM, the Company is generally and unconditionally authorised to buy back up to 35,637,040 of its own issued shares. The Company is seeking a renewal of the share buyback authority at the 2022 AGM.

## Power to issue and allot shares

The Directors are generally and unconditionally authorised to allot unissued shares in the Company up to a maximum nominal amount of £23,758.03 (and £47,516.05 in connection with an offer by way of a rights issue).

A further authority has been granted to the Directors to allot the Company's shares for cash, up to a maximum nominal amount of £23,758.03, without regard to the pre-emption provisions of the Act. No such shares have been issued or allotted under these authorities, nor is there any current intention to do so, other than to satisfy outstanding obligations under the employee share schemes where necessary.

These authorities are valid until the date of the 2022 AGM when a resolution for such renewal will be proposed.

## Employees

Details of the Company's employment practices (including the employment of persons with disabilities) can be found in the Sustainability report on page 68.

Overseas Pensions and Benefits Limited as trustee of the EBT has discretion as to the exercise of voting rights over shares which it holds in respect of unallocated shares, namely those shares in which no employee beneficial interests exist.

## Corporate governance

The Company is governed according to the applicable provisions of company law and by the Company's Articles. As a listed company, the Company must also comply with the Listing Rules and the DTRs. Listed companies are expected to comply as far as possible with the Code, and to state how its principles have been applied. There is a report from the Chair on Corporate governance on pages 82 to 84 and a description of how the Company has complied with each of the principles of the Code on pages 85 to 86. The Company complied throughout the accounting period under review with all the relevant Provisions set out in the Code other than Provision M where Clive Adamson has retained the role of Chair of the Audit and Risk Committee on an interim basis whilst also being Chair of the Company.

## Mandatory GHG reporting and SECR requirements

In line with the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013, all companies listed on the main market of the London Stock Exchange have been required to report their GHG emissions within their annual report. In addition, as of 1 April 2019, the Group is required to meet the mandatory SECR requirements.

130 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT

GOVERNANCE

FINANCIAL STATEMENTS

## Operational control methodology

The Group has followed the operational control method of reporting. The emissions reported below are for the 11 offices around the world where the Group exercised direct operational control in FY2021/22. The office emissions reported, as well as emissions originating from their operations, are those which are considered material to the Group. The Group has a policy of carbon offsetting and further details are provided on page 73.

## Emission scopes

In accordance with mandatory GHG reporting, Scope 1 and Scope 2 are required to be reported¹. In line with the GHG Protocol's reporting requirements, Scope 2 emissions have been reported both in terms of 'market-based' emissions and 'location-based' emissions².

It is not mandatory to report Scope 3. However, the Group continues to report on key Scope 3 emission categories (air travel, water, waste) in order to provide a more complete picture to stakeholders.

## Exclusions and estimation

Overall, approximately 14% of the Group's total emissions generated were based on estimation (89.2 tCO₂e). Best endeavours have been undertaken at each office to provide the required data, however, in some cases data was not available for reporting.

Estimation methodologies adopted are summarised in the following approaches:

- In cases where data was only provided for a subset of the full reporting period, data was extrapolated based on the most appropriate method. For instance, several offices provided data for Q1-Q3, but were unable to provide the Q4 totals because of the inherent delay in receiving this data from relevant third parties, in which case, monthly averaged data was used as a proxy for the absent Q4 disclosure.
- Where no data was available for the current reporting period, the previous period's data have been used to estimate FY2021/22 consumption, adjusted to reflect changes in FTE.
- For offices located within shared and leased buildings, many were only able to provide an estimated consumption rate based on the apportionment of the building total as sub-metered data was not available. Each office's share of the total was based on the percentage occupied within the building. No sub-metered data was available for each tenant in these cases.
- Where cost-only data was available for consumption, an average price per unit estimate was applied to the total cost to calculate the consumption rate.

- For some offices, waste data could only be provided in terms of volume disposed. The waste volume was converted to weight using UK Government waste-type specific weight conversion factors. In this case, the disposal containers have been assumed to be full at the point of collection.
- For offices unable to provide any waste data, it was decided that estimation was inappropriate due to the significant differences in disposal rates by building, office size and per employee, and therefore no waste data was included.

## Methodology

Data collection and analysis has strictly followed the GHG Protocol Corporate Accounting and Reporting Standard³. The WRI and the WBCSD developed the standard to promote standardised global carbon accounting methodologies and as such, the GHG Protocol Standard is one of the recommended methodologies under SECR guidelines. The UK Government's 2021 emission factors³, generated by DEFRA, have been used to quantify all emissions, with the exception of overseas electricity, which has been quantified using the International Energy Agency's 2021 emissions factors⁴.

The Group's data inputs and outputs have been reviewed, processed and generated by Carbon Responsible Limited.

## Consumption and emissions

The Group emitted a total of 653.9 tonnes of CO₂e across its global offices for all scopes (including Scope 3 which is not mandatory to report). Scope 3 accounted for 58% of the total emissions, Scope 2 for 34% and Scope 1 accounted for 8%.

Overall, the Group's GHG emissions increased by 188% compared with FY2020/21 and decreased by 5% compared with the baseline year of FY2019/20. The year-on-year emissions performance also shows a marked increase of 21% for Scope 1, mostly driven by the inclusion of additional sources of fuel data, mainly diesel and petrol consumption in owned vehicles and inclusion of refrigerants. A marked increase was also seen in Scope 2 emissions by 64% using the location-based approach and by 43% when using the market-based approach, primarily driven by increased electricity usage by the Group's offices. These increases are mainly due to a return to office-based working following working from home due to COVID-19. The significant rise in Scope 3 emissions (1200%) is mostly driven by business travel which was artificially low during FY2020/21, also due to COVID-19.

1. Ashmore's Scope 1 emissions relate to gas combustion, mobile fuel combustion and refrigerant usage.

Ashmore's Scope 2 emissions relate to purchased electricity.

Ashmore's Scope 3 emissions relate to water usage, air travel, office waste, hotel stay and third party fuel combustion.

2. www.https://ghgprotocol.org/corporate-standard

3. All UK related emissions factors have been selected from the emissions conversion factors published annually by the UK Government: http://www.gov.uk/government/publications/greenhouse-gas-reporting-conversion-factors-2021

4. All international electricity emissions factors were taken from the International Energy Agency's statistics report "CO2 Emissions from Fuel Combustion" (2020 Edition). Purchased under licence.

Ashmore Group plc Annual Report and Accounts 2022 131
DIRECTORS’ REPORT (CONTINUED)
Following an increase in equity ownership in the Indian operations Year-on-year change in emissions for the Group from
to a wholly owned subsidiary during the year, it has been added to
FY2019/20 to FY2021/22
the Group carbon emission data in FY2021/22. The inclusion of the
% Change % Change
office in India in 2021/22 accounts for a 15% increase in emissions

|  |  | 2019/20 | 2020/21 |
| --- | --- | --- | --- |
| generated compared with last year and a 5% increase compared | Scope 2019/20 2020/21 2021/22 | - 2021/22 | - 2021/22 |
| with the baseline year (FY2019/20). | 1 35.1 43.0 51.9 48% 21% |  |  |

2 Location-based 200.1 138.4 227.3 14% 64%
The emission profile was generated by various sources, across the
2 Market-based 233.4 154.7 221.1 -5% 43%
three scopes. As a proportion of the total emissions, the biggest
source of emissions was generated by business air travel (55%), 3 421.3 29.3 380.4 -10% 1198%
followed by electricity (market-based) generation (34%), and natural Total 689.8 227.0 653.4 -5% 188%
gas (6%). All other emission sources contributed 2% or less of the
total emissions each. Ashmore Group’s emissions by market base
Tonnes CO 2 e Tonnes CO 2 e Tonnes CO 2 e
The Group’s FY2021/22 consumption of GHG
Emissions by office location 2019/20 2020/21 2021/22
emitting sources
UK & offshore 286.5 96.3 246.1
Scope Emissions by source 2019/20 2020/21 2021/22 Global 403.3 130.8 408
Scope 1 Natural gas (kWh) 191,095 234,876 212,833 Total 689.8 227.1 654.1
Other fuels (kWh) – – 29,849
Intensity metrics
Owned vehicles (km) – – 6,670
Refrigerants (kg) – – 1 An intensity metric per FTE has been calculated for the Group’s
Scope 2 Electricity (kWh) 510,108 376,564 509,618 emissions as required by SECR.
Scope 3 Air travel (km) 2,499,532 127,270 2,434,869 In comparison to FY2020/21, the emissions per FTE have increased
Hotel stay (room nights) – – 241 due to the lessening impacts of COVID-19, however, when compared
Third Party vehicles (km) – – 498 to the FY2019/20 baseline, emissions per FTE havedecreased.
3
Water (m ) 3,588 1,198 1,454
1
Emissions per full-time employee
Waste (kg) 26,554 26,931 33,913
Tonnes CO 2 e/FTE Tonnes CO 2 e/FTE Tonnes CO 2 e/FTE
Scope 2019/20 2020/21 2021/22
1 & 2 0.9 0.7 0.9
1, 2 & 3 2.4 0.8 2.2
1. FTE 2019/20 = 291.5 employees; FTE 2020/21 = 290 employees; FTE 2021/22 = 294 employees. Emisions by Market-based employee.
132 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT

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FINANCIAL STATEMENTS

## Charitable and political contributions

During the year, the Group made charitable donations of £0.6 million (FY2020/21: £1.0 million). The work of The Ashmore Foundation is described in the Sustainability section of this report on pages 68 to 79. It is the Group's policy not to make contributions for political purposes.

## Creditor payment policy

The Group's policy and practice in the UK are to follow its suppliers' terms of payment and to make payment in accordance with those terms subject to receipt of satisfactory invoicing. Unless otherwise agreed, payments to creditors are made within 30 days of receipt of an invoice. At 30 June 2022, the amount owed to the Group's trade creditors in the UK represented approximately 17 days' average purchases from suppliers (FY2020/21: 13 days).

## Auditors and the disclosure of information to auditors

The Directors who held office at the date of approval of this Directors' report confirm that, so far as they are each aware, there is no relevant audit information of which the Group's auditors are unaware, and each Director has taken all the steps that they ought to have taken as Directors to make himself or herself aware of any relevant audit information and to establish that the Group's auditors are aware of that information.

Resolutions will be proposed at the AGM to reappoint KPMG LLP as auditor and to authorise the Audit and Risk Committee to agree their remuneration. Note 11 to the financial statements sets out details of the auditor's remuneration.

References in this Directors' report to the financial highlights, the Business review, the Corporate governance report and the Remuneration report are deemed to be included by reference in this Directors' report.

The summary below provides details of the Directors' service agreements/letters of appointment:

|  Directors' service contracts | Date appointed Director | Contract commencement date | Notice period | Expiry/review date  |
| --- | --- | --- | --- | --- |
|  **Executive Directors**  |   |   |   |   |
|  Mark Coombs | 3 December 1998 | 21 September 2006 | 1 year | Rolling  |
|  Tom Shippey | 25 November 2013 | 25 November 2013 | 1 year | Rolling  |
|  **Non-executive Directors**  |   |   |   |   |
|  Clive Adamson | 22 October 2015 | 22 October 2015 | 1 month | 22 October 2024  |
|  Jennifer Bingham | 29 June 2018 | 29 June 2018 | 1 month | 29 June 2024  |
|  Helen Beck | 1 June 2021 | 1 June 2021 | 1 month | 1 June 2024  |
|  Shirley Garrood | 1 August 2022 | 1 August 2022 | 1 month | 1 August 2025  |

Approved by the Board and signed on its behalf by:

Group Company Secretary

1 September 2022

## 2022 Annual General Meeting

Details of the AGM will be given in the separate circular and Notice of Meeting.

## Going concern

The Company and Group have considerable financial resources and the Directors believe that both are well placed to manage their business risks successfully.

Further information regarding the Group's business activities, together with the factors likely to affect its future development, performance and position, are set out on pages 30 to 36.

After making enquiries, the Directors are satisfied that the Company and the Group have adequate resources to continue to operate for the next 12 months from the date of this report and confirm that the Company and the Group are going concerns. For this reason they continue to adopt the going concern basis in preparing these financial statements.

## Companies Act 2006

This Directors' report on pages 128 to 133 inclusive has been drawn up and presented in accordance with and in reliance on English company law and the liabilities of the Directors in connection with that report shall be subject to the limitations and restrictions provided by such law.

Ashmore Group plc Annual Report and Accounts 2022 133
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ASHMORE GROUP PLC ONLY
Year ended 30 June 2022
Our opinion is unmodified Basis for opinion
We have audited the financial statements of Ashmore Group plc We conducted our audit in accordance with International
(the Company) for the year ended 30 June 2022 which comprise the Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Consolidated statement of comprehensive income, Consolidated Our responsibilities are described below. We believe that the
balance sheet, Consolidated statement of changes in equity, audit evidence we have obtained is a sufficient and appropriate
Consolidated cash flow statement, Company balance sheet, basis for our opinion. Our audit opinion is consistent with our
Company statement of changes in equity, Company cash flow report to the Audit and Risk Committee.
statement, and the related notes, including the accounting policies
We were first appointed as auditor of the Company (then Ashmore
in notes 1 to 4.
Group Limited) by the Directors following its incorporation on
30 November 1998. Subsequent to the Company’s conversion
In our opinion:
into a public limited company and the public listing of its shares
– the financial statements give a true and fair view of the state of the
on the London Stock Exchange on 3 October 2006, we were
Group’s and of the parent Company’s affairs as at 30 June 2022
reappointed as auditor of Ashmore Group plc by the Directors on
and of the Group’s profit for the year then ended;
31 October 2007. The period of total uninterrupted engagement is
– the Group financial statements have been properly prepared in
23 years ended 30 June 2022 (15 years since the Company’s public
accordance with UK-adopted international accounting standards;
listing). We have fulfilled our ethical responsibilities under, and we
– the parent Company financial statements have been properly remain independent of the Group in accordance with, UK ethical
prepared in accordance with UK-adopted international accounting requirements including the FRC Ethical Standard as applied to
standards, and as applied in accordance with the provisions of listed public interest entities.
the Companies Act 2006; and
No non-audit services prohibited by that standard were provided.
– the financial statements have been prepared in accordance with
Overview
the requirements of the Companies Act 2006.

| Materiality: |  | £9.1m (2021: £13.6m) |
| --- | --- | --- |
| Group financial |  | 5.5% of Group profit |
| statements as a whole | before tax adjusted for investments |  |

gains and losses (2021: 5% of Group
profit before tax)
Coverage 89% (2021: 97%) of Group profit
before tax
Key audit matters vs 2021
Recurring risks Recoverability of parent ◄ ►
Company’s loan to subsidiaries
New Management fees ◄ ►
134 Ashmore Group plc Annual Report and Accounts 2022
134 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT

GOVERNANCE

FINANCIAL STATEMENTS

### Key audit matters: our assessment of risks of material misstatement

Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. We summarise below the key audit matters, in decreasing order of audit significance, in arriving at our audit opinion above, together with our key audit procedures to address those matters and our findings from those procedures in order that the Company's members as a body may better understand the process by which we arrived at our audit opinion. These matters were addressed, and our findings are based on procedures undertaken, in the context of, and solely for the purpose of, our audit of the financial statements as a whole, and in forming our opinion thereon, and consequently are incidental to that opinion, and we do not provide a separate opinion on these matters.

|   | The risk | Our response  |
| --- | --- | --- |
|  **Revenue recognition:** **Management fees** £247.0 million; (2021: £276.4 million) Refer to page 156 (accounting policy). | **Data capture and calculation error** Management fees is the most significant item in the Consolidated Statement of Comprehensive Income and represents an area that had the greatest effect on the overall group audit. Management fees comprise segregated and pooled management fees. The two key components to management fee calculations are fee rates to be applied and the amount of assets under management (AUM). The following are identified as the key risks for management fee income: – Risk in relation to fee rates: There is a risk that fee rates have not been entered appropriately into the fee calculation and billing systems when new clients are onboarded or agreements are amended. – Risk in relation to AUM: There is a risk that AUM data from the third-party service providers and other in-house systems is not complete and/or accurate. – Risk in relation to calculation of management fee income: There is a risk that management fee income is incorrectly calculated. | **Our procedures included:** **Procedures in relation to fee rates** – Control design and operation: We tested the design and operating effectiveness of controls over new and amended fee agreements. – Tests of details: We agreed a selection of fee rates used in the system calculation to the original investment management agreements (IMAs), fee letters or fund prospectuses outlining the latest effective fee rates. **Procedures in relation to AUM** – Control design and operation: For segregated management fees, we tested the design and operating effectiveness of controls over the production of AUM valuations used in calculating management fees. – For pooled funds management fees, we inspected the internal controls reports prepared by the outsourced service organisations (in particular Northern Trust) to check whether the key controls over the production of AUM valuations used in calculated management fees were designed and operating effectively. **General procedures** – Test of details: We independently recalculated 100% of in-scope component pooled management fees and a sample of segregated management fees. We agreed the recalculated fees to the general ledger records. This represented 82% of total revenue for the Group. – Assessing transparency: We considered the adequacy of the disclosures made in respect of management fees against the relevant accounting standards. **Our findings** – We found no errors in the Group's calculation of its Management fee income (2021: no errors).  |

Ashmore Group plc Annual Report and Accounts 2022 135
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ASHMORE GROUP PLC ONLY (CONTINUED)
Year ended 30 June 2022
The risk Our response

| Recoverability of | Low risk, high value | Our procedures included: |  |
| --- | --- | --- | --- |
| parent Company’s | The carrying amount of the | Test of details |  |
| loan to subsidiaries | parent Company’s loans due from | – We assessed the parent Company’s loan with reference to the |  |
| £376.9 million; | subsidiaries represents 57% (2021: |  | subsidiary’s balance sheet, to identify whether the subsidiary had a |
| (2021: £507.7 million) | 76%) of the Company’s total assets |  | positive net asset value, and therefore coverage of the debt owed, |
| Refer to page 155 | and is comprised of a loan to one |  | as well as assessing whether the subsidiary had historically been |
| (accounting policy) | subsidiary. The recoverability of the |  | profit-making. |
| and page 170 | loan is not at high risk of significant |  |  |

Assessing subsidiary audits:
(financial disclosures). misstatement or subject to
significant judgement. However, due – We considered the results of the work we performed on the
subsidiary audit on those net assets, including assessing the ability
to its materiality in the context of the
parent Company financial statements, of the subsidiary to obtain liquid funds and, therefore, the ability of
this is considered to be the area that the subsidiary to fund the repayment of the receivable.
had the greatest effect on our overall – We performed the tests above rather than seeking to rely on any of
parent Company audit. the Company's controls because the nature of the balance is such
that we would expect to obtain audit evidence primarily through the
detailed procedures described.
Our findings
– We found the Company’s conclusion that there is no impairment of
the loan due from its subsidiary to be acceptable (2021: acceptable).
We also performed procedures over the valuation of level 3 investments. However, following a continued reduction in the overall size of the
balance, along with a reduction in those assets valued using higher risk market multiples or discounted cash flows, we have not assessed
this as one of the most significant risks in our current year audit and, therefore, it is not separately identified in our report this year.
136 Ashmore Group plc Annual Report and Accounts 2022
136 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ASHMORE GROUP PLC ONLY (CONTINUED)
Year ended 30 June 2022
Our application of materiality and an overview
of the scope of our audit
£9.1m (2021: £13.6m)
Materiality for the Group financial statements as a whole was
set at £9.1 million (2021: £13.6 million), which is determined £9.1m
The risk Our response Whole financial statements
with reference to a benchmark of Group profit before tax adjusted
Recoverability of Low risk, high value Our procedures included: materiality (2021: £13.6m)
for investment gains and losses, of which it represents 5.5%.
£6.8m
parent Company’s The carrying amount of the Test of details
The adjustments are made up of the following line items from the Whole financial statements
loan to subsidiaries parent Company’s loans due from – We assessed the parent Company’s loan with reference to the performance materiality
consolidated statement of comprehensive income: gains/(losses)
(2021: £10.2m)
£376.9 million; subsidiaries represents 57% (2021: subsidiary’s balance sheet, to identify whether the subsidiary had a
on investment securities, change in third-party interests in
£8.0m
(2021: £507.7 million) 76%) of the Company’s total assets positive net asset value, and therefore coverage of the debt owed,
consolidated funds and finance income/(expense). We have
Range of materiality at 8

| Refer to page 155 | and is comprised of a loan to one | as well as assessing whether the subsidiary had historically been |  |  |
| --- | --- | --- | --- | --- |
|  |  |  | amended our benchmark as the removal of investment valuation | components (£8.0m to £1.0m) |
| (accounting policy) | subsidiary. The recoverability of the | profit-making. |  | (2021: £8.0m to £2.0m) |

volatility provides a more stable measure year on year.

| and page 170 | loan is not at high risk of significant |  |  | £0.46m |
| --- | --- | --- | --- | --- |
|  |  | Assessing subsidiary audits: | Materiality for the parent Company financial statements as a whole | Misstatements reported to |
| (financial disclosures). | misstatement or subject to |  |  |  |

the audit committee
– We considered the results of the work we performed on the was set at £6.6 million (2021: £6.6 million), determined with
significant judgement. However, due (2021: £0.68m)
subsidiary audit on those net assets, including assessing the ability reference to a benchmark of Company total assets, of which it
to its materiality in the context of the

|  |  | represents 1% (2021: 1%). | Group profit before tax Group materiality |
| --- | --- | --- | --- |
| parent Company financial statements, | of the subsidiary to obtain liquid funds and, therefore, the ability of |  |  |
| this is considered to be the area that | the subsidiary to fund the repayment of the receivable. |  |  |

In line with our audit methodology, our procedures on individual
had the greatest effect on our overall – We performed the tests above rather than seeking to rely on any of
account balances and disclosures were performed to a lower
parent Company audit. the Company's controls because the nature of the balance is such
threshold, performance materiality, so as to reduce to an
that we would expect to obtain audit evidence primarily through the
acceptable level the risk that individually immaterial misstatements
detailed procedures described.
in individual account balances add up to a material amount across
the financial statements as a whole.
Our findings
3 3
– We found the Company’s conclusion that there is no impairment of Performance materiality was set at 75% (2021: 75%) of materiality
the loan due from its subsidiary to be acceptable (2021: acceptable). for the financial statements as a whole, which equates to
£6.8 million (2021: £10.2 million) for the Group and £4.9 million
### 82% 89%
We also performed procedures over the valuation of level 3 investments. However, following a continued reduction in the overall size of the (2021: £4.9 million) for the parent Company. We applied this 39 50
(2021: 97%) (2021: 97%)
balance, along with a reduction in those assets valued using higher risk market multiples or discounted cash flows, we have not assessed percentage in our determination of performance materiality
Group net revenue Group profit before tax
this as one of the most significant risks in our current year audit and, therefore, it is not separately identified in our report this year. because we did not identify any factors indicating an elevated
level of risk. 94 94
We agreed to report to the Group Audit and Risk Committee any 82
corrected or uncorrected identified misstatements exceeding
£0.46 million (2021: £0.68 million), in addition to other identified
misstatements that warranted reporting on qualitative grounds.
Group net assets
Of the Group’s 28 (2021: 28) reporting components, we subjected
four (2021: four) to full scope audits for Group reporting purposes
and four (2021: one) to specified risk-focused audit procedures.
The latter were not individually financially significant enough to 1 20 2
17
require a full scope audit for Group purposes, but did present
specific individual risks that needed to be addressed.
### 96% 97%
The components within the scope of our work accounted for the
(2021: 98%) (2021: 100%)
percentages illustrated opposite. For the residual components,
Group total assets
we performed analysis at an aggregated Group level to re-examine
our assessment that there were no significant risks of material 97 98
misstatement within the components.
79 77
All of the work, including the audit of the parent Company,
Group profit before tax was performed by the Group team. The Group team performed Group materiality
£118.4m (2021 £282.5m) procedures on the items excluded from Group profit before tax. Full scope for group audit purposes 2022
The Group team approved component materialities, which ranged Specified risk-focused audit procedures 2022
from £8.0 million to £1.0 million (2021: £8.0 million to £2.0 million), Full scope for group audit purposes 2021
having regard to the mix of size and risk profile of the components Specified risk-focused audit procedures 2021
across the Group. Residual components
The scope of the audit work performed was predominately
substantive as we placed limited reliance upon the Group’s internal
control over financial reporting other than as set out in our key
audit matter.
Ashmore Group plc Annual Report and Accounts 2022 137
136 Ashmore Group plc Annual Report and Accounts 2022 Ashmore Group plc Annual Report and Accounts 2022 137
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ASHMORE GROUP PLC ONLY (CONTINUED)
Year ended 30 June 2022
The impact of climate change on our audit – we have nothing material to add or draw attention to in relation to
In planning our audit we have considered the potential impacts the Directors’ statement in note 2 to the financial statements on
of climate change on the Group’s business and its financial the use of the going concern basis of accounting with no material
statements. Climate change impacts the Group in a number of uncertainties that may cast significant doubt over the Group and
ways: through its own operations (including potential reputational Company’s use of that basis for the going concern period and we
risk associated with the Group’s delivery of its climate related found the going concern disclosure in note 2 to be acceptable; and
initiatives), through its portfolio of investments and its stewardship – the related statement under the Listing Rules set out on page 43
role, and the greater emphasis on climate related narrative and is materially consistent with the financial statements and our
disclosure in the annual report. audit knowledge.
As a part of our audit, we have made enquiries of management to However, as we cannot predict all future events or conditions and
understand the extent of the potential impact of climate change risk as subsequent events may result in outcomes that are inconsistent
on the Group’s financial statements and the Group’s preparedness with judgements that were reasonable at the time they were
for this. We have performed a risk assessment of how the impact made, the above conclusions are not a guarantee that the Group or
of climate change may affect the financial statements and the Company will continue in operation.
our audit.
Fraud and breaches of laws and regulations – ability
On the basis of the risk assessment procedures performed above
to detect
and taking into account the nature of the assets on the Group’s
Identifying and responding to risks of material
balance sheet, we concluded that there was no significant impact
from climate change. We have also read the disclosure of climate misstatement due to fraud
related information in the front half as set out on pages 54 to 78 of To identify risks of material misstatement due to fraud (fraud risks)
the annual report and considered consistency with the financial we assessed events or conditions that could indicate an incentive or
statements and our audit knowledge. pressure to commit fraud or provide an opportunity to commit fraud.
Our risk assessment procedures included:
Going concern
– Enquiring of Directors and inspection of policy documentation as
The Directors have prepared the financial statements on the going
to the Company’s high-level policies and procedures to prevent
concern basis as they do not intend to liquidate the Company
and detect fraud, as well as whether they have knowledge of any
or the Group or to cease their operations, and as such they have
actual, suspected or alleged fraud.
concluded that the Company’s and the Group’s financial position
means that this is realistic. They have also concluded that there – Reading Audit and Risk Committee meeting minutes.
are no material uncertainties that could have cast significant doubt – Using analytical procedures to identify any unusual or
over their ability to continue as a going concern for at least a year unexpected relationships.
from the date of approval of the financial statements (the going
– Considering remuneration incentive schemes and performance
concern period).
targets for management such as the Group’s share-based
incentive scheme.
We used our knowledge of the Group, its industry, and the general
economic environment to identify the inherent risks to its business
We communicated identified fraud risks throughout the audit team
model and analysed how those risks might affect the Group’s
and remained alert to any indications of fraud throughout the audit.
financial resources or ability to continue operations over the
going concern period. The risk that we considered most likely to As required by auditing standards, and taking into account our
adversely affect the Group’s available financial resources over overall knowledge of the control environment, we perform
procedures to address the risk of management override of controls,
this period was AuM outflows.
in particular the risk that management may be in a position to make
We considered whether these risks could plausibly affect the
inappropriate accounting entries. On this audit we do not believe
liquidity in the going concern period by assessing the degree of
there is a fraud risk related to revenue recognition because the
downside assumption that, individually and collectively, could result
calculation of the revenue is non-judgmental and straightforward,
in a liquidity issue, taking into account the Group’s current and
with limited opportunity for manipulation.
projected cash. We also assessed the completeness of the going
concern disclosure. We did not identify any additional fraud risks.
Our conclusions based on this work: We also performed procedures including identifying journal
entries to test based on risk criteria and comparing the identified
– we consider that the Directors’ use of the going concern basis
entries to supporting documentation. These included all material
of accounting in the preparation of the financial statements
post-closing journals.
is appropriate;
– we have not identified, and concur with the Directors’
assessment that there is not, a material uncertainty related to
events or conditions that, individually or collectively, may cast
significant doubt on the Group’s or Company's ability to continue
as a going concern for the going concern period;
138 Ashmore Group plc Annual Report and Accounts 2022
138 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ASHMORE GROUP PLC ONLY (CONTINUED)
Year ended 30 June 2022
Identifying and responding to risks of material Context of the ability of the audit to detect fraud or
misstatement due to non-compliance with laws breaches of law or regulation
and regulations Owing to the inherent limitations of an audit, there is an unavoidable
We identified areas of laws and regulations that could reasonably risk that we may not have detected some material misstatements
The impact of climate change on our audit – we have nothing material to add or draw attention to in relation to in the financial statements, even though we have properly planned
be expected to have a material effect on the financial statements
In planning our audit we have considered the potential impacts the Directors’ statement in note 2 to the financial statements on and performed our audit in accordance with auditing standards.
from our general commercial and sector experience, and through
of climate change on the Group’s business and its financial the use of the going concern basis of accounting with no material For example, the further removed non-compliance with laws and
discussion with the Directors and other management (as required
statements. Climate change impacts the Group in a number of uncertainties that may cast significant doubt over the Group and regulations is from the events and transactions reflected in the
by auditing standards), and from inspection of the Company’s
ways: through its own operations (including potential reputational Company’s use of that basis for the going concern period and we financial statements, the less likely the inherently limited
regulatory and legal correspondence and discussed with the
risk associated with the Group’s delivery of its climate related found the going concern disclosure in note 2 to be acceptable; and procedures required by auditing standards would identify it.
Directors and other management the policies and procedures
initiatives), through its portfolio of investments and its stewardship – the related statement under the Listing Rules set out on page 43 regarding compliance with laws and regulations.
In addition, as with any audit, there remained a higher risk of
role, and the greater emphasis on climate related narrative and is materially consistent with the financial statements and our
As the Group is regulated, our assessment of risks involved gaining non-detection of fraud, as these may involve collusion, forgery,
disclosure in the annual report. audit knowledge.
an understanding of the control environment including the entity’s intentional omissions, misrepresentations, or the override of
As a part of our audit, we have made enquiries of management to However, as we cannot predict all future events or conditions and procedures for complying with regulatory requirements. internal controls. Our audit procedures are designed to detect
understand the extent of the potential impact of climate change risk as subsequent events may result in outcomes that are inconsistent material misstatement. We are not responsible for preventing
We communicated identified laws and regulations throughout our
on the Group’s financial statements and the Group’s preparedness with judgements that were reasonable at the time they were non-compliance or fraud and cannot be expected to detect
team and remained alert to any indications of non-compliance
for this. We have performed a risk assessment of how the impact made, the above conclusions are not a guarantee that the Group or non-compliance with all laws and regulations.
throughout the audit.
of climate change may affect the financial statements and the Company will continue in operation.
our audit. We have nothing to report on the other information
The potential effect of these laws and regulations on the financial
Fraud and breaches of laws and regulations – ability statements varies considerably. in the Annual Report
On the basis of the risk assessment procedures performed above
to detect The Directors are responsible for the other information presented in the
and taking into account the nature of the assets on the Group’s Firstly, the Company is subject to laws and regulations that directly
Annual Report together with the financial statements. Our opinion on
Identifying and responding to risks of material
balance sheet, we concluded that there was no significant impact affect the financial statements including financial reporting
the financial statements does not cover the other information and,
from climate change. We have also read the disclosure of climate misstatement due to fraud
legislation (including related companies legislation), distributable
accordingly, we do not express an audit opinion or, except as explicitly
related information in the front half as set out on pages 54 to 78 of To identify risks of material misstatement due to fraud (fraud risks) profits legislation, taxation legislation, and financial services
stated below, any form of assurance conclusion thereon.
the annual report and considered consistency with the financial we assessed events or conditions that could indicate an incentive or legislation and we assessed the extent of compliance with these
statements and our audit knowledge. pressure to commit fraud or provide an opportunity to commit fraud. laws and regulations as part of our procedures on the related Our responsibility is to read the other information and, in doing so,
Our risk assessment procedures included: financial statement items. consider whether, based on our financial statements audit work,
Going concern
the information therein is materially misstated or inconsistent with
– Enquiring of Directors and inspection of policy documentation as Secondly, the Company is subject to many other laws and regulations
The Directors have prepared the financial statements on the going
the financial statements or our audit knowledge. Based solely on
to the Company’s high-level policies and procedures to prevent where the consequences of non-compliance could have a material
concern basis as they do not intend to liquidate the Company
that work we have not identified material misstatements in the
and detect fraud, as well as whether they have knowledge of any effect on amounts or disclosures in the financial statements, for
or the Group or to cease their operations, and as such they have
other information.
actual, suspected or alleged fraud. instance through the imposition of fines or litigation or the loss of the
concluded that the Company’s and the Group’s financial position
means that this is realistic. They have also concluded that there – Reading Audit and Risk Committee meeting minutes. Company’s authority to operate. We identified the following areas as Strategic report and Directors’ report
are no material uncertainties that could have cast significant doubt those most likely to have such an effect: specific areas of regulatory Based solely on our work on the other information:
– Using analytical procedures to identify any unusual or
over their ability to continue as a going concern for at least a year capital and liquidity, conduct including Client Assets, anti-money
unexpected relationships.
– we have not identified material misstatements in the Strategic
from the date of approval of the financial statements (the going laundering, anti-bribery and market abuse regulations, and certain
– Considering remuneration incentive schemes and performance
report and the Directors’ report;
concern period). aspects of company legislation and financial services legislation
targets for management such as the Group’s share-based
recognising the financial and regulated nature of the Company’s – in our opinion the information given in those reports for the
incentive scheme.
We used our knowledge of the Group, its industry, and the general
activities and its legal form. Auditing standards limit the required audit financial year is consistent with the financial statements; and
economic environment to identify the inherent risks to its business
We communicated identified fraud risks throughout the audit team procedures to identify non-compliance with these laws and regulations – in our opinion those reports have been prepared in accordance
model and analysed how those risks might affect the Group’s
and remained alert to any indications of fraud throughout the audit. to enquiry of the Directors and other management and inspection of with the Companies Act 2006.
financial resources or ability to continue operations over the
regulatory and legal correspondence, if any. Therefore if a breach of
going concern period. The risk that we considered most likely to As required by auditing standards, and taking into account our Directors’ Remuneration report
operational regulations is not disclosed to us or evident from relevant
adversely affect the Group’s available financial resources over overall knowledge of the control environment, we perform
In our opinion the part of the Directors’ Remuneration report to
correspondence, an audit will not detect that breach.
procedures to address the risk of management override of controls,
this period was AuM outflows. be audited has been properly prepared in accordance with the
in particular the risk that management may be in a position to make
Companies Act 2006.
We considered whether these risks could plausibly affect the
inappropriate accounting entries. On this audit we do not believe
liquidity in the going concern period by assessing the degree of
there is a fraud risk related to revenue recognition because the
downside assumption that, individually and collectively, could result
calculation of the revenue is non-judgmental and straightforward,
in a liquidity issue, taking into account the Group’s current and
with limited opportunity for manipulation.
projected cash. We also assessed the completeness of the going
concern disclosure. We did not identify any additional fraud risks.
Our conclusions based on this work: We also performed procedures including identifying journal
entries to test based on risk criteria and comparing the identified
– we consider that the Directors’ use of the going concern basis
entries to supporting documentation. These included all material
of accounting in the preparation of the financial statements
post-closing journals.
is appropriate;
– we have not identified, and concur with the Directors’
assessment that there is not, a material uncertainty related to
events or conditions that, individually or collectively, may cast
significant doubt on the Group’s or Company's ability to continue
as a going concern for the going concern period; Ashmore Group plc Annual Report and Accounts 2022 139
138 Ashmore Group plc Annual Report and Accounts 2022 Ashmore Group plc Annual Report and Accounts 2022 139
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ASHMORE GROUP PLC ONLY (CONTINUED)
Year ended 30 June 2022
Disclosures of principal and emerging risks and Corporate governance disclosures
longer-term viability We are required to perform procedures to identify whether there is
We are required to perform procedures to identify whether there is a material inconsistency between the Directors’ corporate
a material inconsistency between the Directors’ disclosures in governance disclosures and the financial statements and our
respect of principal and emerging risks and the longer-term viability audit knowledge.
statement, and the financial statements and our audit knowledge.
Based on those procedures, we have concluded that each of the
Based on those procedures, we have nothing material to add or following is materially consistent with the financial statements and
draw attention to in relation to: our audit knowledge:
– the Directors’ confirmation within the longer-term viability – the Directors’ statement that they consider that the Annual
statement on page 43 that they have carried out a robust Report and financial statements taken as a whole is fair, balanced
assessment of the emerging and principal risks facing the Group, and understandable, and provides the information necessary for
including those that would threaten its business model, future shareholders to assess the Group’s position and performance,
performance, solvency and liquidity; business model and strategy;
– the principal and emerging risks disclosures describing these – the section of the Annual Report describing the work of the Audit
risks and how emerging risks are identified, and explaining how and Risk Committee, including the significant issues that the
they are being managed and mitigated; and Audit and Risk Committee considered in relation to the financial
statements, and how these issues were addressed; and
– the Directors’ explanation in the longer-term viability statement
of how they have assessed the prospects of the Group, over – the section of the Annual Report that describes the review of the
what period they have done so and why they considered that effectiveness of the Group’s risk management and internal
period to be appropriate, and their statement as to whether they control systems.
have a reasonable expectation that the Group will be able to
We are required to review the part of the Corporate Governance
continue in operation and meet its liabilities as they fall due over
Statement relating to the Group’s compliance with the provisions of
the period of their assessment, including any related disclosures
the UK Corporate Governance Code specified by the Listing Rules
drawing attention to any necessary qualifications or assumptions.
for our review. We have nothing to report in this respect.
We are also required to review the longer-term viability statement,
We have nothing to report on the other matters
set out on page 43 under the Listing Rules. Based on the above
procedures, we have concluded that the above disclosures are on which we are required to report by exception
materially consistent with the financial statements and our Under the Companies Act 2006, we are required to report to you if,
audit knowledge. in our opinion:
Our work is limited to assessing these matters in the context of – adequate accounting records have not been kept by the parent
only the knowledge acquired during our financial statements audit. Company, or returns adequate for our audit have not been
As we cannot predict all future events or conditions and as received from branches not visited by us; or
subsequent events may result in outcomes that are inconsistent – the parent Company financial statements and the part of the
with judgements that were reasonable at the time they were Directors’ Remuneration report to be audited are not in
made, the absence of anything to report on these statements is not agreement with the accounting records and returns; or
a guarantee as to the Group’s and Company’s longer-term viability.
– certain disclosures of Directors’ remuneration specified by law
are not made; or
– we have not received all the information and explanations we
require for our audit.
We have nothing to report in these respects.
140 Ashmore Group plc Annual Report and Accounts 2022
140 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ASHMORE GROUP PLC ONLY (CONTINUED)
Year ended 30 June 2022
Respective responsibilities The purpose of our audit work and to whom we owe
Directors’ responsibilities our responsibilities
This report is made solely to the Company’s members, as a body,
As explained more fully in their statement set out on page 127,
the Directors are responsible for: the preparation of the financial in accordance with Chapter 3 of Part 16 of the Companies Act 2006
Disclosures of principal and emerging risks and Corporate governance disclosures and the terms of our engagement by the Company. Our audit work
statements including being satisfied that they give a true and fair
longer-term viability We are required to perform procedures to identify whether there is has been undertaken so that we might state to the Company’s
view; such internal control as they determine is necessary to
We are required to perform procedures to identify whether there is a material inconsistency between the Directors’ corporate enable the preparation of financial statements that are free from members those matters we are required to state to them in an
a material inconsistency between the Directors’ disclosures in governance disclosures and the financial statements and our material misstatement, whether due to fraud or error; assessing auditor’s report, and the further matters we are required to state
respect of principal and emerging risks and the longer-term viability audit knowledge. to them in accordance with the terms agreed with the Company,
the Group and parent Company’s ability to continue as a going
statement, and the financial statements and our audit knowledge. concern, disclosing, as applicable, matters related to going concern; and for no other purpose. To the fullest extent permitted by law,
Based on those procedures, we have concluded that each of the
and using the going concern basis of accounting unless they either we do not accept or assume responsibility to anyone other than the
Based on those procedures, we have nothing material to add or following is materially consistent with the financial statements and
Company and the Company’s members, as a body, for our audit
intend to liquidate the Group or the parent Company or to cease
draw attention to in relation to: our audit knowledge:
operations, or have no realistic alternative but to do so. work, for this report, or for the opinions we have formed.
– the Directors’ confirmation within the longer-term viability – the Directors’ statement that they consider that the Annual
statement on page 43 that they have carried out a robust Report and financial statements taken as a whole is fair, balanced Auditor’s responsibilities
assessment of the emerging and principal risks facing the Group, and understandable, and provides the information necessary for Our objectives are to obtain reasonable assurance about whether the Jatin Patel (Senior Statutory Auditor)
including those that would threaten its business model, future shareholders to assess the Group’s position and performance, financial statements as a whole are free from material misstatement, for and on behalf of KPMG LLP, Statutory Auditor
performance, solvency and liquidity; business model and strategy; Chartered Accountants
whether due to fraud or error, and to issue our opinion in an
auditor’s report. Reasonable assurance is a high level of assurance, 15 Canada Square
– the principal and emerging risks disclosures describing these – the section of the Annual Report describing the work of the Audit
but does not guarantee that an audit conducted in accordance with London E14 5GL
risks and how emerging risks are identified, and explaining how and Risk Committee, including the significant issues that the
they are being managed and mitigated; and Audit and Risk Committee considered in relation to the financial ISAs (UK) will always detect a material misstatement when it
1 September 2022
statements, and how these issues were addressed; and exists. Misstatements can arise from fraud, other irregularities or
– the Directors’ explanation in the longer-term viability statement
error and are considered material if, individually or in aggregate,
of how they have assessed the prospects of the Group, over – the section of the Annual Report that describes the review of the
they could reasonably be expected to influence the economic
what period they have done so and why they considered that effectiveness of the Group’s risk management and internal
decisions of users taken on the basis of the financial statements.
period to be appropriate, and their statement as to whether they control systems.
have a reasonable expectation that the Group will be able to
A fuller description of our responsibilities is provided on the FRC’s
We are required to review the part of the Corporate Governance
continue in operation and meet its liabilities as they fall due over
website at www.frc.org.uk/auditorsresponsibilities.
Statement relating to the Group’s compliance with the provisions of
the period of their assessment, including any related disclosures
the UK Corporate Governance Code specified by the Listing Rules
The Company is required to include these financial statements in an
drawing attention to any necessary qualifications or assumptions.
for our review. We have nothing to report in this respect.
annual financial report prepared using the single electronic reporting
We are also required to review the longer-term viability statement,
format specified in the TD ESEF Regulation. This auditor’s report
We have nothing to report on the other matters
set out on page 43 under the Listing Rules. Based on the above
provides no assurance over whether the annual financial report has
procedures, we have concluded that the above disclosures are on which we are required to report by exception
been prepared in accordance with the ESEF format.
materially consistent with the financial statements and our Under the Companies Act 2006, we are required to report to you if,
audit knowledge. in our opinion:
Our work is limited to assessing these matters in the context of – adequate accounting records have not been kept by the parent
only the knowledge acquired during our financial statements audit. Company, or returns adequate for our audit have not been
As we cannot predict all future events or conditions and as received from branches not visited by us; or
subsequent events may result in outcomes that are inconsistent – the parent Company financial statements and the part of the
with judgements that were reasonable at the time they were Directors’ Remuneration report to be audited are not in
made, the absence of anything to report on these statements is not agreement with the accounting records and returns; or
a guarantee as to the Group’s and Company’s longer-term viability.
– certain disclosures of Directors’ remuneration specified by law
are not made; or
– we have not received all the information and explanations we
require for our audit.
We have nothing to report in these respects.
Ashmore Group plc Annual Report and Accounts 2022 141
140 Ashmore Group plc Annual Report and Accounts 2022 Ashmore Group plc Annual Report and Accounts 2022 141
# CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 30 June 2022

|   | Notes | 2022 £m | 2021 £m  |
| --- | --- | --- | --- |
|  Management fees |  | **247.0** | 276.4  |
|  Performance fees |  | **4.5** | 11.9  |
|  Other revenue |  | **2.9** | 4.6  |
|  **Total revenue** |  | **254.4** | 292.9  |
|  Distribution costs |  | **(3.5)** | (5.5)  |
|  Foreign exchange | 7 | **11.6** | 4.3  |
|  **Net revenue** |  | **262.5** | 291.7  |
|  Gains/(losses) on investment securities | 20 | **(61.3)** | 123.5  |
|  Change in third-party interests in consolidated funds | 20 | **16.5** | (52.6)  |
|  Personnel expenses | 9 | **(73.4)** | (80.3)  |
|  Other expenses | 11 | **(25.1)** | (24.0)  |
|  **Operating profit** |  | **119.2** | 258.3  |
|  Finance income/(expense) | 8 | **(2.1)** | 23.9  |
|  Share of profit from associates | 26 | **1.3** | 0.3  |
|  **Profit before tax** |  | **118.4** | 282.5  |
|  Tax expense | 12 | **(26.5)** | (40.7)  |
|  **Profit for the year** |  | **91.9** | 241.8  |
|  **Other comprehensive income/(loss), net of related tax effect**  |   |   |   |
|  Items that may be reclassified subsequently to profit or loss:  |   |   |   |
|  Foreign currency translation differences arising on foreign operations |  | **80.2** | (74.9)  |
|  Cash flow hedge intrinsic value gains/(losses) |  | **(6.0)** | 1.2  |
|  **Other comprehensive income/(loss), net of tax** |  | **74.2** | (73.7)  |
|  **Total comprehensive income for the year** |  | **166.1** | 168.1  |
|  **Profit attributable to:**  |   |   |   |
|  Equity holders of the parent |  | **88.5** | 240.1  |
|  Non-controlling interests |  | **3.4** | 1.7  |
|  **Profit for the year** |  | **91.9** | 241.8  |
|  **Total comprehensive income attributable to:**  |   |   |   |
|  Equity holders of the parent |  | **161.9** | 167.5  |
|  Non-controlling interests |  | **4.2** | 0.6  |
|  **Total comprehensive income for the year** |  | **166.1** | 168.1  |
|  **Earnings per share**  |   |   |   |
|  Basic | 13 | **13.42p** | 36.40p  |
|  Diluted | 13 | **12.61p** | 34.23p  |

The notes on pages 149 to 190 form an integral part of these financial statements.

142 Ashmore Group plc Annual Report and Accounts 2022
# CONSOLIDATED BALANCE SHEET

As at 30 June 2022

STRATEGIC REPORT

GOVERNANCE

FINANCIAL STATEMENTS

|   | Notes | 2022 £m | 2021 £m  |
| --- | --- | --- | --- |
|  **Assets** |  |  |   |
|  **Non-current assets** |  |  |   |
|  Goodwill and intangible assets | 15 | **90.9** | 80.5  |
|  Property, plant and equipment | 16 | **9.1** | 11.2  |
|  Investment in associates | 26 | **2.1** | 0.9  |
|  Non-current financial assets measured at fair value | 20 | **39.3** | 34.0  |
|  Deferred acquisition costs |  | **0.4** | 0.5  |
|  Deferred tax assets | 18 | **32.7** | 34.8  |
|   |  | **174.5** | 161.9  |
|  **Current assets** |  |  |   |
|  Investment securities | 20 | **265.1** | 318.1  |
|  Financial assets measured at fair value | 20 | **32.3** | 41.0  |
|  Trade and other receivables | 17 | **74.3** | 83.4  |
|  Derivative financial instruments | 21 | – | 1.3  |
|  Cash and cash equivalents |  | **552.0** | 456.1  |
|   |  | **923.7** | 899.9  |
|  Financial assets held for sale | 20 | – | 46.2  |
|  **Total assets** |  | **1,098.2** | 1,108.0  |
|  **Equity and liabilities** |  |  |   |
|  **Capital and reserves – attributable to equity holders of the parent** |  |  |   |
|  Issued capital | 22 | **0.1** | 0.1  |
|  Share premium |  | **15.6** | 15.6  |
|  Retained earnings |  | **901.0** | 941.0  |
|  Foreign exchange reserve |  | **33.2** | (46.2)  |
|  Cash flow hedging reserve |  | **(4.9)** | 1.1  |
|   |  | **945.0** | 911.6  |
|  Non-controlling interests | 30 | **21.8** | 21.1  |
|  **Total equity** |  | **966.8** | 932.7  |
|  **Liabilities** |  |  |   |
|  **Non-current liabilities** |  |  |   |
|  Lease liabilities | 16 | **5.8** | 7.3  |
|  Deferred tax liabilities | 18 | **8.8** | 10.5  |
|   |  | **14.6** | 17.8  |
|  **Current liabilities** |  |  |   |
|  Lease liabilities | 16 | **2.2** | 2.5  |
|  Derivative financial instruments | 21 | **5.2** | –  |
|  Third-party interests in consolidated funds | 20 | **73.0** | 105.7  |
|  Trade and other payables | 24 | **36.4** | 45.5  |
|   |  | **116.8** | 153.7  |
|  Financial liabilities held for sale | 20 | – | 3.8  |
|  **Total liabilities** |  | **131.4** | 175.3  |
|  **Total equity and liabilities** |  | **1,098.2** | 1,108.0  |

The notes on pages 149 to 190 form an integral part of these financial statements.

Approved by the Board on 1 September 2022 and signed on its behalf by:

Chief Executive Officer

Group Finance Director

Ashmore Group plc Annual Report and Accounts 2022 143
# CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 30 June 2022

|   | Attributable to equity holders of the parent |   |   |   |   |   | Non-controlling interests £m | Total equity £m  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|   |  Issued capital £m | Share premium £m | Retained earnings £m | Foreign exchange reserve £m | Cash flow hedging reserve £m | Total £m  |   |   |
|  **Balance at 30 June 2020** | 0.1 | 15.6 | 813.2 | 27.6 | (0.1) | 856.4 | 22.6 | 879.0  |
|  Profit for the year | – | – | 240.1 | – | – | 240.1 | 1.7 | 241.8  |
|  Other comprehensive income/(loss): |  |  |  |  |  |  |  |   |
|  Foreign currency translation differences arising on foreign operations | – | – | – | (73.8) | – | (73.8) | (1.1) | (74.9)  |
|  Cash flow hedge intrinsic value gains | – | – | – | – | 1.2 | 1.2 | – | 1.2  |
|  **Total comprehensive income/(loss)** | – | – | 240.1 | (73.8) | 1.2 | 167.5 | 0.6 | 168.1  |
|  Transactions with owners: |  |  |  |  |  |  |  |   |
|  Purchase of own shares | – | – | (23.3) | – | – | (23.3) | – | (23.3)  |
|  Share-based payments | – | – | 29.3 | – | – | 29.3 | – | 29.3  |
|  Increase in non-controlling interests | – | – | – | – | – | – | 0.8 | 0.8  |
|  Dividends to equity holders | – | – | (118.3) | – | – | (118.3) | – | (118.3)  |
|  Dividends to non-controlling interests | – | – | – | – | – | – | (2.9) | (2.9)  |
|  **Total contributions and distributions** | – | – | (112.3) | – | – | (112.3) | (2.1) | (114.4)  |
|  **Balance at 30 June 2021** | 0.1 | 15.6 | 941.0 | (46.2) | 1.1 | 911.6 | 21.1 | 932.7  |
|  Profit for the year | – | – | **88.5** | – | – | **88.5** | **3.4** | **91.9**  |
|  Other comprehensive income/(loss): |  |  |  |  |  |  |  |   |
|  Foreign currency translation differences arising on foreign operations | – | – | – | **79.4** | – | **79.4** | **0.8** | **80.2**  |
|  Cash flow hedge intrinsic value losses | – | – | – | – | (6.0) | (6.0) | – | (6.0)  |
|  **Total comprehensive income/(loss)** | – | – | **88.5** | **79.4** | **(6.0)** | **161.9** | **4.2** | **166.1**  |
|  Transactions with owners: |  |  |  |  |  |  |  |   |
|  Purchase of own shares | – | – | (34.5) | – | – | (34.5) | – | (34.5)  |
|  Share-based payments | – | – | 24.5 | – | – | 24.5 | – | 24.5  |
|  Decrease in non-controlling interests | – | – | – | – | – | – | (0.5) | (0.5)  |
|  Dividends to equity holders | – | – | (118.5) | – | – | (118.5) | – | (118.5)  |
|  Dividends to non-controlling interests | – | – | – | – | – | – | (3.0) | (3.0)  |
|  **Total contributions and distributions** | – | – | **(128.5)** | – | – | **(128.5)** | **(3.5)** | **(132.0)**  |
|  **Balance at 30 June 2022** | **0.1** | **15.6** | **901.0** | **33.2** | **(4.9)** | **945.0** | **21.8** | **966.8**  |

The notes on pages 149 to 190 form an integral part of these financial statements.

144 Ashmore Group plc Annual Report and Accounts 2022
CONSOLIDATED CASH FLOW STATEMENT
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
For the year ended 30 June 2022
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2022
2022 2021
£m £m
Operating activities
Profit for the year 91. 9 241. 8
Adjustments for non-cash items:
Attributable to equity holders of the parent
Depreciation and amortisation 3.1 2.8

|  |  |  |  | Foreign | Cash flow |  |  | Non- |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Issued |  | Share | Retained | exchange | hedging |  | controlling |  | Total | Accrual for variable compensation 24 .3 33.4 |
| capital | premium |  | earnings | reserve | reserve | Total | interests |  | equity |  |

Unrealised foreign exchange gains (11.6) (4.3)
£m £m £m £m £m £m £m £m
Finance expense/(income) 2.1 (2 3.9)
Balance at 30 June 2020 0.1 15.6 813.2 27.6 (0.1) 856.4 22.6 879.0
Net losses/(gains) on investment securities 44.8 (70.9)
Tax expense 26.5 40.7

| Profit for the year – – 240.1 – – 240.1 1.7 241.8 |  |  |  | Share of profits from associates (1.3) (0.3) |
| --- | --- | --- | --- | --- |
| Other comprehensive income/(loss): |  |  | Cash generated from operations before working capital changes 179.8 219.3 |  |
|  | Foreign currency translation differences arising on | – – – (73.8) – (73.8) (1.1) (74.9) | Changes in working capital: |  |
|  | foreign operations |  |  | Decrease in trade and other receivables 4.9 2.4 |

Decrease/(increase) in derivative financial instruments 6.5 (3.0)
Cash flow hedge intrinsic value gains – – – – 1.2 1.2 – 1.2
Decrease in trade and other payables (9.1) (5 .2)
Total comprehensive income/(loss) – – 240.1 (73.8) 1.2 167.5 0.6 168.1
Cash generated from operations 182.1 213.5
Transactions with owners:
Taxes paid (24.7) (64.3)
Purchase of own shares – – (23.3) – – (23.3) – (23.3) Net cash generated from operating activities 157.4 149.2
Share-based payments – – 29.3 – – 29.3 – 29.3
Investing activities
Increase in non-controlling interests – – – – – – 0.8 0.8
Interest and investment income received 8.1 3.2
Dividends to equity holders – – (118.3) – – (118.3) – (118.3) Purchase of non-current financial assets measured at fair value (1.9) (8.1)
Dividends to non-controlling interests – – – – – – (2.9) (2.9) Purchase of financial assets held for sale – (42.2)
Purchase of financial assets measured at fair value (5.5) (14.4)
Total contributions and distributions – – (112.3) – – (112.3) (2.1) (114.4)
Sale/(purchase) of investment securities 24.2 (33.3)
Balance at 30 June 2021 0.1 15.6 941.0 (46.2) 1.1 911.6 21.1 932.7
Sale of non-current financial assets measured at fair value 1.5 2. 6
Sale of financial assets held for sale 0.1 7.2
Profit for the year – – 88.5 – – 88.5 3.4 91.9 Sale of financial assets measured at fair value 44.0 58.4
Net cash on initial consolidation of seed capital investments 0.3 (5.2)
Other comprehensive income/(loss):
Purchase of property, plant and equipment (0.5) (0 .7)
Foreign currency translation differences arising on – – – 79.4 – 79.4 0.8 80.2
Net cash generated from/(used in) investing activities 70.3 (32.5)
foreign operations
Cash flow hedge intrinsic value losses – – – – (6.0) (6.0) – (6.0) Financing activities
Dividends paid to equity holders (118.5) (118.3)
Total comprehensive income/(loss) – – 88.5 79.4 (6.0) 161.9 4.2 166.1
Dividends paid to non-controlling interests (3.0) (2 .9)
Transactions with owners:
Third-party subscriptions into consolidated funds 0.5 54.9
Purchase of own shares – – (34.5) – – (34.5) – (34.5)
Third-party redemptions from consolidated funds (4.2) (0 .6)
Share-based payments – – 24.5 – – 24.5 – 24.5 Distributions paid by consolidated funds (10.7) (28.8)
Decrease in non-controlling interests – – – – – – (0.5) (0.5) Increase/(decrease) in non-controlling interests (0.5) 0. 5
Payment of lease liabilities (2.0) (2 .1)
Dividends to equity holders – – (118.5) – – (118.5) – (118.5)
Interest paid (0.4) (0 .4)
Dividends to non-controlling interests – – – – – – (3.0) (3.0)
Purchase of own shares (34.5) (23.3)
Total contributions and distributions – – (128.5) – – (128.5) (3.5) (132.0)
Net cash used in financing activities (173.3) (121.0)
Balance at 30 June 2022 0.1 15.6 901.0 33.2 (4.9) 945.0 21.8 966.8
Net increase/(decrease) in cash and cash equivalents 54.4 (4.3)
The notes on pages 149 to 190 form an integral part of these financial statements. Cash and cash equivalents at beginning of year 456.1 500.9
Effect of exchange rate changes on cash and cash equivalents 41.5 (40.5)
Cash and cash equivalents at end of year 55 2.0 456.1
Cash and cash equivalents at end of year comprise:
Cash at bank and in hand 57.4 51.4
Daily dealing liquidity funds 225.7 333.5
Deposits 268.9 71.2
552.0 456.1
The notes on pages 149 to 190 form an integral part of these financial statements.
Ashmore Group plc Annual Report and Accounts 2022 145
144 Ashmore Group plc Annual Report and Accounts 2022 Ashmore Group plc Annual Report and Accounts 2022 145
# COMPANY BALANCE SHEET  
As at 30 June 2022

|   | Notes | 2022 £m | 2021 £m  |
| --- | --- | --- | --- |
|  **Assets**  |   |   |   |
|  **Non-current assets**  |   |   |   |
|  Goodwill | 15 | **4.1** | 4.1  |
|  Property, plant and equipment | 16 | **5.5** | 6.8  |
|  Investment in subsidiaries | 25 | **19.9** | 19.9  |
|  Deferred acquisition costs |  | **0.4** | 0.5  |
|  Trade and other receivables | 17 | **132.0** | –  |
|  Deferred tax assets | 18 | **18.2** | 25.1  |
|   |  | **180.1** | 56.4  |
|  **Current assets**  |   |   |   |
|  Trade and other receivables | 17 | **324.9** | 521.8  |
|  Derivative financial instruments | 21 | – | 1.3  |
|  Cash and cash equivalents |  | **159.7** | 86.1  |
|   |  | **484.6** | 609.2  |
|  **Total assets** |  | **664.7** | 665.6  |
|  **Equity and liabilities**  |   |   |   |
|  **Capital and reserves**  |   |   |   |
|  Issued capital | 22 | **0.1** | 0.1  |
|  Share premium |  | **15.6** | 15.6  |
|  Retained earnings |  | **600.6** | 540.6  |
|  Cash flow hedging reserve |  | **(4.9)** | 1.1  |
|  **Total equity attributable to equity holders of the Company** |  | **611.4** | 557.4  |
|  **Liabilities**  |   |   |   |
|  **Non-current liabilities**  |   |   |   |
|  Lease liability | 16 | **3.3** | 4.4  |
|  **Current liabilities**  |   |   |   |
|  Lease liability | 16 | **1.3** | 1.3  |
|  Derivative financial instruments | 21 | **5.2** | –  |
|  Trade and other payables | 24 | **43.5** | 102.5  |
|   |  | **53.3** | 108.2  |
|  **Total equity and liabilities** |  | **664.7** | 665.6  |

The Company has taken the exemption under section 408 of the Companies Act 2006 not to present its profit and loss account and related notes. The Company's profit for the year ended 30 June 2022 was £188.6 million (30 June 2021: £69.4 million).

The notes on pages 149 to 190 form an integral part of these financial statements.

The financial statements of Ashmore Group plc (registered number 03675683) were approved by the Board on 1 September 2022 and signed on its behalf by:

Chief Executive Officer

Group Finance Director

146 Ashmore Group plc Annual Report and Accounts 2022
COMPANY STATEMENT OF CHANGES IN EQUITY
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
For the year ended 30 June 2022
COMPANY BALANCE SHEET
As at 30 June 2022
Total equity
Cash flow attributable to
Issued Share Retained hedging equity holders of
capital premium earnings reserve the parent
£m £m £m £m £m
Balance at 30 June 2020 0.1 15.6 583.5 (0.1) 599.1

|  |  | 2022 | 2021 |  |
| --- | --- | --- | --- | --- |
|  | Notes | £m | £m |  |
| Assets |  |  |  | Profit for the year – – 69.4 – 69.4 |
| Non-current assets |  |  |  | Cash flow hedge intrinsic value gains – – – 1.2 1.2 |
| Goodwill 15 4.1 4.1 |  |  |  | Purchase of own shares – – (23.3) – (23.3) |
| Property, plant and equipment 16 5.5 6.8 |  |  |  | Share-based payments – – 29.3 – 29.3 |
| Investment in subsidiaries 25 19.9 19.9 |  |  |  | Dividends to equity holders – – (118.3) – (118.3) |

Deferred acquisition costs 0.4 0.5
Balance at 30 June 2021 0.1 15.6 540.6 1.1 557.4
Trade and other receivables 17 132.0 –
Deferred tax assets 18 18.2 25.1
Profit for the year – – 188.6 – 188.6
180.1 56.4
Cash flow hedge intrinsic value losses – – – (6.0) (6.0)
Current assets
Purchase of own shares – – (34.1) – (34.1)
Trade and other receivables 17 324.9 521.8
Share-based payments – – 24.0 – 24.0
Derivative financial instruments 21 – 1.3
Dividends to equity holders – – (118.5) – (118.5)
Cash and cash equivalents 159.7 86.1
Balance at 30 June 2022 0.1 15.6 600.6 (4.9) 611.4
484.6 609.2
The notes on pages 149 to 190 form an integral part of these financial statements.
Total assets 664.7 665.6
Equity and liabilities
Capital and reserves
Issued capital 22 0.1 0.1
Share premium 15.6 15.6
Retained earnings 600.6 540.6
Cash flow hedging reserve (4.9) 1.1
Total equity attributable to equity holders of the Company 611.4 557.4
Liabilities
Non-current liabilities
Lease liability 16 3.3 4.4
Current liabilities
Lease liability 16 1.3 1.3
Derivative financial instruments 21 5.2 –
Trade and other payables 24 43.5 102.5
53.3 108.2
Total equity and liabilities 664.7 665.6
The Company has taken the exemption under section 408 of the Companies Act 2006 not to present its profit and loss account and related
notes. The Company’s profit for the year ended 30 June 2022 was £188.6 million (30 June 2021: £69.4 million).
The notes on pages 149 to 190 form an integral part of these financial statements.
The financial statements of Ashmore Group plc (registered number 03675683) were approved by the Board on 1 September 2022 and
signed on its behalf by:
Mark Coombs Tom Shippey
Chief Executive Officer Group Finance Director
Ashmore Group plc Annual Report and Accounts 2022 147
146 Ashmore Group plc Annual Report and Accounts 2022 Ashmore Group plc Annual Report and Accounts 2022 147
# COMPANY CASH FLOW STATEMENT

For the year ended 30 June 2022

|   | 2022 £m | 2021 £m  |
| --- | --- | --- |
|  **Operating activities** |  |   |
|  Profit for the year | **188.6** | 69.4  |
|  Adjustments for: |  |   |
|  Depreciation and amortisation | **1.8** | 1.4  |
|  Accrual for variable compensation | **19.3** | 25.2  |
|  Unrealised foreign exchange losses/(gains) | **(58.4)** | 35.6  |
|  Finance income | **(0.4)** | –  |
|  Tax expense/(income) | **26.0** | (16.5)  |
|  Dividends received from subsidiaries | **(174.0)** | (110.1)  |
|  Cash generated from operations before working capital changes | **2.9** | 5.0  |
|  Changes in working capital: |  |   |
|  Decrease/(increase) in trade and other receivables | **(73.8)** | 6.9  |
|  Decrease/(increase) in derivative financial instruments | **6.5** | (3.0)  |
|  Increase/(decrease) in trade and other payables | **(59.0)** | 97.4  |
|  Cash generated from/(used in) operations | **(123.4)** | 106.3  |
|  Taxes paid | **(12.1)** | (38.2)  |
|  Net cash generated from/(used in) operating activities | **(135.5)** | 68.1  |
|  **Investing activities** |  |   |
|  Interest received | **0.2** | 0.3  |
|  Loans advanced to subsidiaries | **(0.2)** | (110.2)  |
|  Loans repaid by subsidiaries | **184.0** | 67.3  |
|  Dividends received from subsidiaries | **174.0** | 110.1  |
|  Purchase of property, plant and equipment | **(0.4)** | (0.6)  |
|  **Net cash generated from investing activities** | **357.6** | 66.9  |
|  **Financing activities** |  |   |
|  Dividends paid | **(118.5)** | (118.3)  |
|  Payment of lease liability | **(1.1)** | (1.1)  |
|  Interest paid | **(0.2)** | (0.2)  |
|  Purchase of own shares | **(34.1)** | (23.3)  |
|  **Net cash used in financing activities** | **(153.9)** | (142.9)  |
|  **Net increase/(decrease) in cash and cash equivalents** | **68.2** | (7.9)  |
|  Cash and cash equivalents at beginning of year | **86.1** | 91.8  |
|  Effect of exchange rate changes on cash and cash equivalents | **5.4** | 2.2  |
|  **Cash and cash equivalents at end of year** | **159.7** | 86.1  |
|  **Cash and cash equivalents at end of year comprise:** |  |   |
|  Cash at bank and in hand | **6.3** | 17.0  |
|  Daily dealing liquidity funds | **1.9** | 14.6  |
|  Deposits | **151.5** | 54.5  |
|   | **159.7** | 86.1  |

The notes on pages 149 to 190 form an integral part of these financial statements.

148 Ashmore Group plc Annual Report and Accounts 2022
NOTES TO THE FINANCIAL STATEMENTS

## 1) General information

Ashmore Group plc (the Company) is a public limited company listed on the London Stock Exchange and incorporated and domiciled in the United Kingdom. The consolidated financial statements of the Company and its subsidiaries (together the Group) for the year ended 30 June 2022 were authorised for issue by the Board of Directors on 1 September 2022. The principal activity of the Group is described in the Directors' report on page 128.

## 2) Basis of preparation

The Group and Company financial statements for the year ended 30 June 2022 have been prepared in accordance with UK-adopted international accounting standards.

The financial statements have been prepared on a going concern basis under the historical cost convention, except for the measurement at fair value of derivative financial instruments and financial assets and liabilities that are held at fair value through profit or loss.

The Company has taken advantage of the exemption in section 408 of the Companies Act 2006 that allows it not to present its individual statement of comprehensive income and related notes.

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. Further information about key sources of estimation and areas of judgement are set out in note 31.

### Going concern

The Board of Directors has considered the resilience of the Group, taking into account its current financial position, and the principal and emerging risks facing the business in the context of the current economic outlook. The Board reviewed cash flow forecasts for a period of 12 months from the date of approval of these financial statements which indicate that the Group will have sufficient funds to meet its liabilities as they fall due for that period. The Board applied stressed scenarios, including severe but plausible downside assumptions, and the impact on AuM, profitability of the Group and known commitments. While there are wider market uncertainties that may impact the Group, the stressed scenarios, which assumed a significant reduction in revenue for the entire forecast period, show that the Group and Company would continue to operate profitably and meet their liabilities as they fall due for a period of at least 12 months from the date of approval of the annual financial statements. The financial statements have therefore been prepared on a going concern basis.

## 3) New Standards and Interpretations not yet adopted

There were no Standards or Interpretations that were in issue and required to be adopted by the Group as at the date of authorisation of these consolidated financial statements. No other Standards or Interpretations have been issued that are expected to have a material impact on the Group's financial statements.

## 4) Significant accounting policies

The following principal accounting policies have been applied consistently where applicable to all years presented in dealing with items considered material in relation to the Group and Company financial statements, unless otherwise stated.

### Basis of consolidation

The consolidated financial statements of the Group comprise the financial statements of the Company and its subsidiaries, associates and joint ventures. This includes an Employee Benefit Trust (EBT) established for the employee share-based awards and consolidated investment funds.

### Interests in subsidiaries

Subsidiaries are entities, including investment funds, over which the Group has control as defined by IFRS 10. The Group has control if it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date when control ceases. The Group reassesses whether or not it controls an entity if facts and circumstances indicate that there are changes to one or more of the elements of control.

The profit or loss and each component of other comprehensive income are attributed to the equity holders of the Company and to any non-controlling interests. Based on their nature, the interests of third parties in consolidated funds are classified as liabilities and appear as 'Third-party interests in consolidated funds' on the Group's balance sheet. Associates and joint ventures are presented as single-line items in the statement of comprehensive income and balance sheet. Intercompany transactions and balances are eliminated on consolidation. Consistent accounting policies have been applied across the Group in the preparation of the consolidated financial statements as at 30 June 2022.

A change in the ownership interest of a consolidated entity that does not result in a loss of control by the Group is accounted for as an equity transaction. If the Group loses control over a consolidated entity, it derecognises the related assets, goodwill, liabilities, non-controlling interest and other components of equity, and any gain or loss is recognised in consolidated comprehensive income. Any investment retained is recognised at its fair value at the date of loss of control.

STRATEGIC REPORT

GOVERNANCE

FINANCIAL STATEMENTS

Ashmore Group plc Annual Report and Accounts 2022 149
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
4) Significant accounting policies continued The Group concludes that it acts as a principal when the power it
has over the fund is deemed to be exercised for self-benefit,
Interests in associates and joint arrangements
considering the level of aggregate economic exposure in the fund
Associates are partly owned entities over which the Group has
and the assessed strength of third-party investors’ kick-out rights.
significant influence but no control. Joint ventures are entities
The Group concludes that it acts as an agent when the power it has
through which the Group and other parties undertake an economic
over the fund is deemed to be exercised for the benefit of third-
activity which is subject to joint control.
party investors.
Investments in associates and interests in joint ventures are
If the Group concludes that it acts as a principal, it is deemed to
measured using the equity method of accounting. Under this
have control and, therefore, will consolidate a fund as if it were a
method, the investments are initially recognised at cost,
subsidiary. If the Group concludes that it does not have control over
including attributable goodwill, and are adjusted thereafter for
the fund, the Group recognises and measures its interest in the
the post-acquisition changes in the Group’s share of net assets.
fund as a financial asset.
The Group’s share of post-acquisition profit or loss is recognised in
the statement of comprehensive income. Where the Group’s
Interests in unconsolidated structured entities
financial year is not coterminous with those of its associates or
The Group classifies the following investment funds as
joint ventures, unaudited interim financial information is used after
unconsolidated structured entities:
appropriate adjustments have been made.
– Segregated mandates and pooled funds managed where the
Interests in consolidated structured entities Group does not hold any direct interest. In this case, the Group
The Group acts as fund manager to investment funds that are considers that its aggregate economic exposure is insignificant
considered to be structured entities. Structured entities are entities and, in relation to segregated mandates, the third-party investor
that have been designed so that voting or similar rights are not the has the practical ability to remove the Group from acting as fund
dominant factor in deciding which party has control: for example, manager, without cause. As a result, the Group concludes that
when any voting rights relate to administrative tasks only and it acts as an agent for third-party investors.
the relevant activities of the entity are directed by means of
– Pooled funds managed by the Group where the Group holds a
contractual arrangements. The Group’s assets under management
direct interest, for example seed capital investments, and the
are managed within structured entities. These structured
Group’s aggregate economic exposure in the fund relative to
entities typically consist of unitised vehicles such as Société
third-party investors is less than the threshold established by the
d’Investissement à Capital Variable (SICAVs), limited partnerships,
Group for determining agent versus principal classification. As a
unit trusts and open-ended and closed-ended vehicles which
result, the Group concludes that it is an agent for third-party
entitle third-party investors to a percentage of the vehicle’s net
investors and, therefore, will account for its beneficial interest in
asset value.
the fund as a financial asset.
The Group has interests in structured entities as a result of the
The disclosure of the AuM in respect of consolidated and
management of assets on behalf of its clients. Where the Group
unconsolidated structured entities is provided in note 27.
holds a direct interest in a closed-ended fund, private equity fund or
Foreign currency
open-ended pooled fund such as a SICAV, the interest is accounted
The Group’s financial statements are presented in Pounds Sterling
for either as a consolidated structured entity or as a financial asset,
(Sterling), which is also the Company’s functional and presentation
depending on whether the Group has control over the fund or not.
currency. Items included in the financial statements of each of the
Control is determined in accordance with IFRS 10, based on an
Group’s entities are measured using the functional currency, which
assessment of the level of power and aggregate economic interest
is the currency that prevails in the primary economic environment
that the Group has over the fund, relative to third-party investors.
in which the entity operates.
Power is normally conveyed to the Group through the existence of
an investment management agreement and/or other contractual
arrangements. Aggregate economic interest is a measure of the
Group’s exposure to variable returns in the fund through a combination
of direct interest, expected share of performance fees, expected
management fees, fair value gains or losses, and distributions
receivable from the fund.
150 Ashmore Group plc Annual Report and Accounts 2022
150 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Foreign currency transactions Acquisition-related costs are expensed as incurred, except if they
Transactions in foreign currencies are translated into the respective are related to the issue of debt or equity securities.
functional currencies of the Group entities at the spot exchange
Contingent consideration is classified either as equity or a financial
rates at the date of the transactions.
liability. Amounts classified as a financial liability are subsequently
4) Significant accounting policies continued The Group concludes that it acts as a principal when the power it
Monetary assets and liabilities denominated in foreign currencies remeasured to fair value with changes in fair value recognised
has over the fund is deemed to be exercised for self-benefit,
Interests in associates and joint arrangements at the balance sheet date are translated into the functional currency in profit or loss. If the contingent consideration is classified as
considering the level of aggregate economic exposure in the fund
Associates are partly owned entities over which the Group has at the spot exchange rate at that date. Non-monetary assets and equity, it will not be remeasured and settlement is accounted
and the assessed strength of third-party investors’ kick-out rights.
significant influence but no control. Joint ventures are entities liabilities that are measured in terms of historical cost in a foreign for within equity.
The Group concludes that it acts as an agent when the power it has
through which the Group and other parties undertake an economic currency are translated using the exchange rate at the date of
over the fund is deemed to be exercised for the benefit of third- If the business combination is achieved in stages, the acquisition
activity which is subject to joint control. the transaction.
party investors. date carrying value of the acquirer’s previously held equity interest
Investments in associates and interests in joint ventures are Foreign currency differences arising on translation are generally in the acquiree is remeasured to fair value at the acquisition date.
If the Group concludes that it acts as a principal, it is deemed to
measured using the equity method of accounting. Under this recognised in comprehensive income, except for qualifying cash Any gains or losses arising from such remeasurement are
have control and, therefore, will consolidate a fund as if it were a
method, the investments are initially recognised at cost, flow hedges to the extent that the hedge is effective, in which case recognised in profit or loss.
subsidiary. If the Group concludes that it does not have control over
including attributable goodwill, and are adjusted thereafter for foreign currency differences arising are recognised in other
the fund, the Group recognises and measures its interest in the
Goodwill
the post-acquisition changes in the Group’s share of net assets. comprehensive income.
fund as a financial asset.
The Group’s share of post-acquisition profit or loss is recognised in The cost of a business combination in excess of the fair value of
the statement of comprehensive income. Where the Group’s Foreign operations net identifiable assets or liabilities acquired, including intangible
Interests in unconsolidated structured entities
financial year is not coterminous with those of its associates or The assets and liabilities of foreign operations, including goodwill assets identified, is recognised as goodwill and stated at cost less
The Group classifies the following investment funds as
joint ventures, unaudited interim financial information is used after and fair value adjustments arising on consolidation, are translated any accumulated impairment losses. Goodwill has an indefinite
unconsolidated structured entities:
appropriate adjustments have been made. into Sterling at the spot exchange rates at the balance sheet date. useful life, is not subject to amortisation and is tested annually for
– Segregated mandates and pooled funds managed where the The revenues and expenses of foreign operations are translated impairment or when there is an indication of impairment.
Interests in consolidated structured entities Group does not hold any direct interest. In this case, the Group into Sterling at rates approximating to the foreign exchange rates
ruling at the dates of the transactions. Intangible assets
The Group acts as fund manager to investment funds that are considers that its aggregate economic exposure is insignificant
considered to be structured entities. Structured entities are entities and, in relation to segregated mandates, the third-party investor The cost of intangible assets, such as management contracts
Foreign currency differences are recognised in other
that have been designed so that voting or similar rights are not the has the practical ability to remove the Group from acting as fund and brand names, acquired as part of a business combination
comprehensive income, and accumulated in the foreign currency
dominant factor in deciding which party has control: for example, manager, without cause. As a result, the Group concludes that is their fair value as at the date of acquisition. The fair value at the
translation reserve, except to the extent that the translation
when any voting rights relate to administrative tasks only and it acts as an agent for third-party investors. date of acquisition is calculated using the discounted cash flow
difference is allocated to non-controlling interests.
the relevant activities of the entity are directed by means of methodology and represents the valuation of the profits expected
– Pooled funds managed by the Group where the Group holds a
contractual arrangements. The Group’s assets under management When a foreign operation is disposed of such that control is lost, to be earned from the management contracts and brand name in
direct interest, for example seed capital investments, and the
are managed within structured entities. These structured the cumulative amount in the foreign currency translation reserve place at the date of acquisition.
Group’s aggregate economic exposure in the fund relative to
entities typically consist of unitised vehicles such as Société related to that foreign operation is reclassified to comprehensive
third-party investors is less than the threshold established by the
Following initial recognition, intangible assets are carried at cost
d’Investissement à Capital Variable (SICAVs), limited partnerships, income as part of the gain or loss on disposal. If the Group
Group for determining agent versus principal classification. As a
less any accumulated amortisation and impairment losses.
unit trusts and open-ended and closed-ended vehicles which disposes of only part of its interest in a subsidiary that includes a
result, the Group concludes that it is an agent for third-party
Intangible assets with finite life are amortised on a systematic basis
entitle third-party investors to a percentage of the vehicle’s net foreign operation while retaining control, the relevant proportion of
investors and, therefore, will account for its beneficial interest in
over their useful lives. The useful life of an intangible asset which
asset value. the cumulative amount is reattributed to non-controlling interests.
the fund as a financial asset.
has arisen from contractual or other legal rights does not exceed
The Group has interests in structured entities as a result of the If the settlement of a monetary item receivable from or payable to a the period of the contractual or other legal rights.
The disclosure of the AuM in respect of consolidated and
management of assets on behalf of its clients. Where the Group foreign operation is neither planned nor likely in the foreseeable
unconsolidated structured entities is provided in note 27.
future, foreign currency differences arising on the item form part Non-controlling interests (NCI)
holds a direct interest in a closed-ended fund, private equity fund or
Foreign currency
open-ended pooled fund such as a SICAV, the interest is accounted of the net investment in the foreign operation and are recognised The Group recognises NCI in an acquired entity either at fair value
The Group’s financial statements are presented in Pounds Sterling in other comprehensive income, and accumulated in the foreign or at the NCI’s proportionate share of the acquired entity’s net
for either as a consolidated structured entity or as a financial asset,
(Sterling), which is also the Company’s functional and presentation currency translation reserve within equity. identifiable assets. This decision is made on an acquisition-by-
depending on whether the Group has control over the fund or not.
currency. Items included in the financial statements of each of the acquisition basis. Changes to the Group’s interest in a subsidiary
Control is determined in accordance with IFRS 10, based on an
Group’s entities are measured using the functional currency, which Business combinations that do not result in a loss of control are accounted for as
assessment of the level of power and aggregate economic interest
is the currency that prevails in the primary economic environment Business combinations are accounted for using the acquisition equity transactions.
that the Group has over the fund, relative to third-party investors.
in which the entity operates. method as at the acquisition date. The acquisition date is the date
Power is normally conveyed to the Group through the existence of
an investment management agreement and/or other contractual on which the acquirer effectively obtains control of the acquiree.
arrangements. Aggregate economic interest is a measure of the
The consideration transferred for the acquisition is generally
Group’s exposure to variable returns in the fund through a combination
measured at the acquisition date fair value, as are the identifiable
of direct interest, expected share of performance fees, expected
net assets acquired, liabilities incurred (including any asset or
management fees, fair value gains or losses, and distributions
liability resulting from a contingent consideration arrangement)
receivable from the fund.
and equity instruments issued by the Group in exchange for control
of the acquiree.
Ashmore Group plc Annual Report and Accounts 2022 151
150 Ashmore Group plc Annual Report and Accounts 2022 Ashmore Group plc Annual Report and Accounts 2022 151
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
4) Significant accounting policies continued Financial instruments
Property, plant and equipment Recognition and initial measurement
Financial instruments are recognised when the Group becomes
Property, plant and equipment are stated at cost less accumulated
depreciation and impairment losses. Cost is determined on the party to the contractual provisions of an instrument, initially at fair
basis of the direct and indirect costs that are directly attributable. value plus transaction costs except for financial assets classified at
fair value through profit or loss. Purchases or sales of financial
Property, plant and equipment are depreciated using the straight-
line method over the estimated useful lives, assessed to be assets are recognised on the trade date, being the date that the
five years for office equipment and four years for IT equipment. Group commits to purchase or sell the asset.
The residual values and useful lives of assets are reviewed at
Financial assets are derecognised when the rights to receive
least annually.
cash flows from the investments have expired or been transferred
The Group’s property, plant and equipment include right-of use or when the Group has transferred substantially all risks and
assets recognised on operating lease arrangements in accordance rewards of ownership. Financial liabilities are derecognised
when the obligation under the liability has been discharged,
with IFRS 16 Leases.
cancelled or expires.
Leases
Subsequent measurement
The Group’s lease arrangements primarily consist of operating
The subsequent measurement of financial instruments depends
leases relating to office space. Obligations and rights under
on their classification in accordance with IFRS 9 Financial
operating lease agreements are recognised and classified within
Instruments and IFRS 5 Non-current Assets Held for Sale and
property, plant and equipment on the Group’s consolidated
Discontinued Operations.
statement of financial position in accordance with IFRS 16.
Under IFRS 9, the Group classifies its financial assets into
The Group initially records a lease liability reflecting the present
two measurement categories: amortised cost and FVTPL.
value of the future contractual cash flows to be made over the
The classification of financial assets under IFRS 9 is generally
lease term, discounted using the rate implicit in the lease, being the
based on the business model in which a financial asset is managed
rate that the lessee would have to pay to borrow the funds
and its contractual cash flow characteristics. A financial asset is
necessary to obtain an asset of similar value to the right-of-use
measured at amortised cost if it meets both of the following
asset in a similar economic environment with similar terms,
conditions and is not designated as at FVTPL:
security and conditions. Where this rate is not readily available,
the Group applies the incremental borrowing rate applicable for
– it is held within a business model whose objective is to hold
each lease arrangement. A right-of-use asset is also recorded at the
assets to collect contractual cash flows; and
value of the lease liability plus any directly related costs and
– its contractual terms give rise on specified dates to cash flows
estimated dilapidation expenses and is presented within property,
that are solely payments of principal and interest on the principal
plant and equipment. Interest is accrued on the lease liability using
amount outstanding.
the effective interest rate method to give a constant rate of return
over the life of the lease whilst the balance is reduced as lease All financial assets not classified as measured at amortised cost are
payments are made. The right-of-use asset is depreciated over the measured at FVTPL. The Group classifies its financial liabilities at
life of the lease as the benefit of the lease is consumed. amortised cost or derivative liabilities measured at FVTPL.
After the commencement date, the Group reassesses the lease Amortised cost is the amount determined based on moving the
term if there is a significant event or change in circumstances that initial amount recognised for the financial instrument to the maturity
is within its control and affects the likelihood that it will exercise (or value on a systematic basis using a fixed interest rate (effective
not exercise) a term extension option. interest rate), taking account of repayment dates and initial
premiums or discounts.
The cost of short-term (less than 12 months) leases is expensed on
a straight-line basis over the lease term.
Deferred acquisition costs
Costs that are directly attributable to securing an investment
management contract are deferred if they can be identified
separately and measured reliably and it is probable that they will be
recovered. Deferred acquisition costs represent the incremental
costs incurred by the Group to acquire an investment management
contract, typically on a closed-ended fund. The Group amortises the
deferred acquisition asset recognised on a systematic basis, in line
with the revenue generated from providing the investment
management services over the life of the fund.
152 Ashmore Group plc Annual Report and Accounts 2022
152 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Financial assets (ii) Financial assets measured at fair value
The Group classifies its financial assets into the following The Group classifies readily realisable interests in seeded funds as
categories: investment securities at FVTPL, financial assets held for financial assets measured at FVTPL with fair value changes being
sale, financial assets at FVTPL and financial assets measured at directly recognised through the consolidated statement of
4) Significant accounting policies continued Financial instruments amortised cost. comprehensive income. Fair value is measured based on the
proportionate net asset value in the fund.
Property, plant and equipment Recognition and initial measurement
The Group may, from time to time, invest seed capital in funds
Financial instruments are recognised when the Group becomes
Property, plant and equipment are stated at cost less accumulated where a subsidiary is the investment manager or an adviser.
(iii) Derivatives
depreciation and impairment losses. Cost is determined on the party to the contractual provisions of an instrument, initially at fair
Where the holding in such investments is deemed to represent
Derivatives include foreign exchange forward contracts and options
basis of the direct and indirect costs that are directly attributable. value plus transaction costs except for financial assets classified at
a controlling stake and is acquired exclusively with a view to
used by the Group to manage its foreign currency exposures and
fair value through profit or loss. Purchases or sales of financial
Property, plant and equipment are depreciated using the straight- subsequent disposal through sale or dilution, these seed capital
those held in consolidated funds. Derivatives are initially recognised
line method over the estimated useful lives, assessed to be assets are recognised on the trade date, being the date that the
investments are recognised as financial assets held for sale in
at fair value on the date on which a derivative contract is entered
five years for office equipment and four years for IT equipment. Group commits to purchase or sell the asset.
accordance with IFRS 5. The Group recognises 100% of the
into and subsequently remeasured at fair value. Transaction costs
The residual values and useful lives of assets are reviewed at investment in the fund as a ‘financial asset held for sale’ and the
Financial assets are derecognised when the rights to receive are recognised immediately in the statement of comprehensive
least annually. interest held by other parties as a ‘financial liability held for sale’.
cash flows from the investments have expired or been transferred income. All derivatives are carried as financial assets when the
Where control is not deemed to exist, and the assets are readily
The Group’s property, plant and equipment include right-of use or when the Group has transferred substantially all risks and fair value is positive and as financial liabilities when the fair value
realisable, they are recognised as financial assets measured at
assets recognised on operating lease arrangements in accordance rewards of ownership. Financial liabilities are derecognised is negative.
FVTPL in accordance with IFRS 9. Where the assets are not readily
when the obligation under the liability has been discharged,
with IFRS 16 Leases.
realisable, they are recognised as non-current financial assets Any gains or losses arising from changes in the fair value of
cancelled or expires.
derivatives are taken directly in comprehensive income, except for
measured at FVTPL. If a seed capital investment remains under the
Leases
control of the Group for more than one year from the original the effective portion of cash flow hedges, which is recognised in
Subsequent measurement
The Group’s lease arrangements primarily consist of operating
investment date, the underlying fund is consolidated line by line. other comprehensive income.
The subsequent measurement of financial instruments depends
leases relating to office space. Obligations and rights under
on their classification in accordance with IFRS 9 Financial
operating lease agreements are recognised and classified within
Investment securities at FVTPL Financial assets measured at amortised cost
Instruments and IFRS 5 Non-current Assets Held for Sale and
property, plant and equipment on the Group’s consolidated
(i) Trade and other receivables
Investment securities represent securities, other than derivatives,
Discontinued Operations.
statement of financial position in accordance with IFRS 16.
held by consolidated funds. These securities are measured at fair Trade and other receivables are initially recorded at fair value plus
Under IFRS 9, the Group classifies its financial assets into
The Group initially records a lease liability reflecting the present value with gains and losses recognised through the consolidated transaction costs. The fair value on acquisition is normally the cost.
two measurement categories: amortised cost and FVTPL.
value of the future contractual cash flows to be made over the statement of comprehensive income. Subsequent to initial recognition these assets are measured at
The classification of financial assets under IFRS 9 is generally
lease term, discounted using the rate implicit in the lease, being the amortised cost less impairment loss allowances. Impairment losses
based on the business model in which a financial asset is managed Financial assets held for sale (HFS)
rate that the lessee would have to pay to borrow the funds are recognised in the statement of comprehensive income for
and its contractual cash flow characteristics. A financial asset is
necessary to obtain an asset of similar value to the right-of-use Financial assets held for sale are measured at the lower of their expected credit losses, and changes in those expected credit
measured at amortised cost if it meets both of the following
asset in a similar economic environment with similar terms, carrying amount and fair value less costs to sell except where losses over the life of the instrument. Loss allowances are
conditions and is not designated as at FVTPL:
security and conditions. Where this rate is not readily available, measurement and remeasurement is outside the scope of IFRS 5. calculated based on lifetime expected credit losses at each
the Group applies the incremental borrowing rate applicable for Where investments that have initially been recognised as financial reporting date.
– it is held within a business model whose objective is to hold
each lease arrangement. A right-of-use asset is also recorded at the assets held for sale, because the Group has been deemed to hold a
assets to collect contractual cash flows; and
(ii) Cash and cash equivalents
value of the lease liability plus any directly related costs and controlling stake, are subsequently disposed of or diluted such that
– its contractual terms give rise on specified dates to cash flows Cash represents cash at bank and in hand, and cash equivalents
estimated dilapidation expenses and is presented within property, the Group’s holding is no longer deemed a controlling stake, the
that are solely payments of principal and interest on the principal comprise short-term deposits and investments in money market
plant and equipment. Interest is accrued on the lease liability using investment will subsequently be classified as a financial asset
amount outstanding. instruments that are redeemable on demand or with an original
the effective interest rate method to give a constant rate of return measured at FVTPL in accordance with IFRS 9.
maturity of three months or less. The carrying amount of these
over the life of the lease whilst the balance is reduced as lease All financial assets not classified as measured at amortised cost are
assets approximates their fair value.
measured at FVTPL. The Group classifies its financial liabilities at Financial assets at FVTPL
payments are made. The right-of-use asset is depreciated over the
life of the lease as the benefit of the lease is consumed. amortised cost or derivative liabilities measured at FVTPL. Financial assets at FVTPL include certain readily realisable interests
in seeded funds, non-current financial assets measured at fair value
After the commencement date, the Group reassesses the lease Amortised cost is the amount determined based on moving the
and derivatives. From the date the financial asset is recognised,
term if there is a significant event or change in circumstances that initial amount recognised for the financial instrument to the maturity
all subsequent changes in fair value, foreign exchange differences,
is within its control and affects the likelihood that it will exercise (or value on a systematic basis using a fixed interest rate (effective
interest and dividends are reflected in the consolidated statement
not exercise) a term extension option. interest rate), taking account of repayment dates and initial
of comprehensive income and presented in finance income
premiums or discounts.
The cost of short-term (less than 12 months) leases is expensed on or expense.
a straight-line basis over the lease term.
(i) Non-current financial assets measured at fair value
Deferred acquisition costs Non-current financial assets include closed-end funds that are
measured at FVTPL. They are held at fair value with changes in fair
Costs that are directly attributable to securing an investment
value being recognised through the consolidated statement of
management contract are deferred if they can be identified
comprehensive income.
separately and measured reliably and it is probable that they will be
recovered. Deferred acquisition costs represent the incremental
costs incurred by the Group to acquire an investment management
contract, typically on a closed-ended fund. The Group amortises the
deferred acquisition asset recognised on a systematic basis, in line
with the revenue generated from providing the investment
management services over the life of the fund.
Ashmore Group plc Annual Report and Accounts 2022 153
152 Ashmore Group plc Annual Report and Accounts 2022 Ashmore Group plc Annual Report and Accounts 2022 153
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
4) Significant accounting policies continued Where instruments are not listed on any stock exchange or not
traded on any regulated markets, valuation techniques are used
Financial liabilities
by valuation specialists. These techniques include the market
The Group classifies its financial liabilities into the following
approach, the income approach or the cost approach. The use of
categories: financial liabilities held for sale, financial liabilities at
the market approach generally consists of using comparable market
FVTPL and financial liabilities at amortised cost.
transactions or using techniques based on market observable
inputs, while the use of the income approach generally consists
Financial liabilities held for sale
of the net present value of estimated future cash flows, adjusted
Financial liabilities held for sale represent interests held by other parties
as deemed appropriate for liquidity, credit, market and/or other
in funds in which the Group recognises 100% of the investment in
risk factors.
the fund as a financial asset held for sale. These liabilities are
carried at fair value with gains or losses recognised in the Investments in funds are valued on the basis of the last available
statement of comprehensive income within finance income net asset value of the units or shares of such funds.
or expense.
The fair value of the derivatives is their quoted market price at the
Financial liabilities at FVTPL balance sheet date.
Financial liabilities at FVTPL include derivative financial instruments
Hedge accounting
and third-party interests in consolidated funds. They are carried at
The Group applies the general hedge accounting model in IFRS 9.
fair value with gains or losses recognised in the consolidated
This requires the Group to ensure that hedge accounting
statement of comprehensive income within finance income
relationships are aligned with its risk management objectives and
or expense.
strategy and to apply a more qualitative and forward-looking
Financial liabilities at amortised cost approach to assessing hedge effectiveness.
Other financial liabilities including trade and other payables are
The Group uses forward and option contracts to hedge the
subsequently measured at amortised cost using the effective
variability in cash flows arising from changes in foreign exchange
interest rate method. Interest expense is recognised as it is
rates relating to management fee revenues. The Group designates
incurred using the effective interest method, which allocates
only the change in fair value of the spot element of the forward and
interest at a constant rate of return over the expected life of the
option contracts in cash flow hedging relationships. The effective
financial instrument based on the estimated future cash flows.
portion of changes in fair value of hedging instruments is
accumulated in a cash flow hedge reserve as a separate
Fair value of financial instruments
component of equity.
Fair value is defined as the price that would be received to sell an
asset or paid to transfer a liability (i.e. the ‘exit price’) in an orderly The Group applies cash flow hedge accounting when the
transaction meets the specified hedge accounting criteria.
transaction between market participants at the measurement date.
In determining fair value, the Group uses various valuation To qualify, the following conditions must be met:
approaches and establishes a hierarchy for inputs used in
– formal documentation of the relationship between the hedging
measuring fair value that maximises the use of relevant observable
instrument(s) and hedged item(s) must exist at inception;
inputs and minimises the use of unobservable inputs by requiring
– the hedged cash flows must be highly probable and must
that the most observable inputs be used when available.
present an exposure to variations in cash flows that could
Observable inputs are inputs that market participants would use in
ultimately affect comprehensive income;
pricing the asset or liability developed based on market data
– the effectiveness of the hedge can be reliably measured; and
obtained from sources independent of the Group.
– the hedge must be highly effective, with effectiveness assessed
Unobservable inputs are inputs that reflect the Group’s judgements
on an ongoing basis.
about the assumptions other market participants would use in
pricing the asset or liability, developed based on the best For qualifying cash flow hedges, the change in fair value of the
information available in the circumstances. effective hedging instrument is initially recognised in other
comprehensive income and is released to comprehensive income
Securities listed on a recognised stock exchange, or dealt on any
in the same period during which the relevant financial asset or
other regulated market that operates regularly, is recognised and
liability affects the Group’s results.
open to the public, are valued at the last known available closing bid
price. If a security is traded on several actively traded and organised Where the hedge is highly effective overall, any ineffective portion
financial markets, the valuation is made on the basis of the last of the hedge is immediately recognised in comprehensive income.
known bid price on the main market on which the securities are Where the instrument ceases to be highly effective as a hedge, or
traded. In the case of securities for which trading on an actively is sold, terminated or exercised, hedge accounting is discontinued.
traded and organised financial market is not significant, but which
are bought and sold on a secondary market with regulated trading
among security dealers (with the effect that the price is set on a
market basis), the valuation may be based on this secondary market.
154 Ashmore Group plc Annual Report and Accounts 2022
154 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Derecognition of financial assets and liabilities The Group’s trade receivables comprise balances due from
The Group derecognises a financial asset only when the contractual management fees, performance fees and expense recoveries from
funds managed, and are generally short term and do not contain
rights to the cash flows from the asset expire, or when it transfers
the financial asset and substantially all the risk and rewards of financing components. Factors considered in determining whether
Where instruments are not listed on any stock exchange or not ownership of the asset. The Group derecognises a financial a default has taken place include how many days past the due date
4) Significant accounting policies continued
traded on any regulated markets, valuation techniques are used a payment is, deterioration in the credit quality of a counterparty,
liability when the Group’s obligations are discharged, cancelled or
Financial liabilities
by valuation specialists. These techniques include the market they expire. and knowledge of specific events that could influence a
The Group classifies its financial liabilities into the following
approach, the income approach or the cost approach. The use of counterparty’s ability to pay. The Group assesses lifetime expected
categories: financial liabilities held for sale, financial liabilities at
the market approach generally consists of using comparable market Impairment of financial assets credit losses based on historical observed default rates, adjusted
FVTPL and financial liabilities at amortised cost.
transactions or using techniques based on market observable Under IFRS 9, impairment losses on the Group’s financial assets at by forward-looking estimates regarding the economic conditions
inputs, while the use of the income approach generally consists amortised cost are measured using an expected credit loss (ECL) within the next year. Externally derived credit ratings have been
Financial liabilities held for sale
of the net present value of estimated future cash flows, adjusted model. Under this model, the Group is required to account for identified as representing the best available determinant of
Financial liabilities held for sale represent interests held by other parties
as deemed appropriate for liquidity, credit, market and/or other expected credit losses, and changes in those expected credit counterparty credit risk for cash balances and credit risk is deemed
in funds in which the Group recognises 100% of the investment in
risk factors. losses over the life of the instrument. The amount of expected to have increased significantly if the credit rating has significantly
the fund as a financial asset held for sale. These liabilities are
credit losses is updated at each reporting date to reflect changes in deteriorated at the reporting date relative to the credit rating at the
carried at fair value with gains or losses recognised in the Investments in funds are valued on the basis of the last available
credit risk since initial recognition and, consequently, more timely date of initial recognition.
statement of comprehensive income within finance income net asset value of the units or shares of such funds.
information is provided about expected credit losses. A three-stage
or expense.
Impairment of non-financial assets
The fair value of the derivatives is their quoted market price at the model is used for calculating expected credit losses, which requires
balance sheet date. financial assets to be assessed as: For all other assets other than goodwill, an impairment test
Financial liabilities at FVTPL
is performed annually or whenever events or changes in
Financial liabilities at FVTPL include derivative financial instruments
– performing (stage 1) financial assets where there has been no
Hedge accounting circumstances indicate that the carrying amount may not be
and third-party interests in consolidated funds. They are carried at
significant increase in credit risk since original recognition; or
The Group applies the general hedge accounting model in IFRS 9. recoverable. An impairment loss is recognised for the amount by
fair value with gains or losses recognised in the consolidated
– under-performing (stage 2) financial assets where there has been which the asset’s carrying amount exceeds its recoverable amount.
This requires the Group to ensure that hedge accounting
statement of comprehensive income within finance income
a significant increase in credit risk since initial recognition, but no The recoverable amount is the higher of an asset’s fair value less
relationships are aligned with its risk management objectives and
or expense.
default event; or costs of disposal and value in use. For the purposes of assessing
strategy and to apply a more qualitative and forward-looking
approach to assessing hedge effectiveness. – non-performing (stage 3) financial assets that are in default. impairment, assets are grouped at the lowest levels for which
Financial liabilities at amortised cost
there are separately identifiable cash inflows which are largely
Other financial liabilities including trade and other payables are
The Group uses forward and option contracts to hedge the Expected credit losses for stage 1 financial assets are calculated
independent of the cash inflows from other assets or groups
subsequently measured at amortised cost using the effective
variability in cash flows arising from changes in foreign exchange based on possible default events within the 12 months after the
of assets (cash-generating units). Non-financial assets, other
interest rate method. Interest expense is recognised as it is
rates relating to management fee revenues. The Group designates reporting date. Expected credit losses for stage 2 and 3 financial
than goodwill, that have suffered an impairment are reviewed
incurred using the effective interest method, which allocates
only the change in fair value of the spot element of the forward and assets are calculated based on lifetime expected credit losses that
for possible reversal of the impairment at the end of each
interest at a constant rate of return over the expected life of the
option contracts in cash flow hedging relationships. The effective result from all possible default events over the expected life of a
reporting period.
financial instrument based on the estimated future cash flows.
portion of changes in fair value of hedging instruments is financial instrument. The Group applies the simplified approach to
accumulated in a cash flow hedge reserve as a separate calculate expected credit losses for financial assets measured at
Goodwill
Fair value of financial instruments
component of equity. amortised cost. Under this approach, financial assets are not
Goodwill is tested for impairment annually or whenever there is an
Fair value is defined as the price that would be received to sell an
categorised into three stages and expected credit losses are
The Group applies cash flow hedge accounting when the indication that the carrying amount may not be recoverable based
asset or paid to transfer a liability (i.e. the ‘exit price’) in an orderly
calculated based on the life of the instrument.
transaction meets the specified hedge accounting criteria. on management’s judgements regarding the future prospects of
transaction between market participants at the measurement date.
To qualify, the following conditions must be met: the business, estimates of future cash flows and discount rates.
In determining fair value, the Group uses various valuation Assets measured at amortised cost
When assessing the appropriateness of the carrying value of
approaches and establishes a hierarchy for inputs used in The Group measures loss allowances at an amount equal to
– formal documentation of the relationship between the hedging
goodwill at year end, the recoverable amount is considered
measuring fair value that maximises the use of relevant observable lifetime expected credit losses. Expected credit loss allowances
instrument(s) and hedged item(s) must exist at inception;
to be the greater of fair value less costs to sell or value in use.
inputs and minimises the use of unobservable inputs by requiring for financial assets measured at amortised cost are deducted from
– the hedged cash flows must be highly probable and must
The pre-tax discount rate applied is based on the Group’s weighted
that the most observable inputs be used when available. the gross carrying amount of the assets. The Group’s financial
present an exposure to variations in cash flows that could
average cost of capital after making allowances for any specific risks.
Observable inputs are inputs that market participants would use in assets subject to impairment assessment under the ECL model
ultimately affect comprehensive income;
pricing the asset or liability developed based on market data comprise cash deposits held with banks and trade receivables.
The business of the Group is managed as a single unit, with asset
– the effectiveness of the hedge can be reliably measured; and
obtained from sources independent of the Group. In assessing the impairment of financial assets under the
allocations, research and other such operational practices reflecting
– the hedge must be highly effective, with effectiveness assessed
ECL model, the Group assesses whether the risk of default has the commonality of approach across all fund themes. Therefore,
Unobservable inputs are inputs that reflect the Group’s judgements
on an ongoing basis.
increased significantly since initial recognition, by considering for the purpose of testing goodwill for impairment, the Group is
about the assumptions other market participants would use in
both quantitative and qualitative information, and the analysis is considered to have one cash-generating unit to which all goodwill
pricing the asset or liability, developed based on the best For qualifying cash flow hedges, the change in fair value of the
based on the Group’s historical experience of credit default, is allocated and, as a result, no further split of goodwill into smaller
information available in the circumstances. effective hedging instrument is initially recognised in other
including forward-looking information. cash-generating units is possible and the impairment review is
comprehensive income and is released to comprehensive income
Securities listed on a recognised stock exchange, or dealt on any
in the same period during which the relevant financial asset or conducted for the Group as a whole.
other regulated market that operates regularly, is recognised and
liability affects the Group’s results.
An impairment loss in respect of goodwill cannot be reversed.
open to the public, are valued at the last known available closing bid
price. If a security is traded on several actively traded and organised Where the hedge is highly effective overall, any ineffective portion
financial markets, the valuation is made on the basis of the last of the hedge is immediately recognised in comprehensive income.
known bid price on the main market on which the securities are Where the instrument ceases to be highly effective as a hedge, or
traded. In the case of securities for which trading on an actively is sold, terminated or exercised, hedge accounting is discontinued.
traded and organised financial market is not significant, but which
are bought and sold on a secondary market with regulated trading
among security dealers (with the effect that the price is set on a
market basis), the valuation may be based on this secondary market.
Ashmore Group plc Annual Report and Accounts 2022 155
154 Ashmore Group plc Annual Report and Accounts 2022 Ashmore Group plc Annual Report and Accounts 2022 155
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
4) Significant accounting policies continued Other revenue
Other revenue principally comprises fees for other services,
Net revenue
which are typically driven by the volume of transactions, along with
Net revenue is total revenue less distribution costs and including
revenues that vary in accordance with the volume of fund project
foreign exchange. The Group’s total revenue includes management
development activities. Other revenue includes transaction,
fees, performance fees and other revenue. The primary revenue
structuring and administration fees, project management fees,
source for the Group is fee income received or receivable for the
and reimbursement by funds of costs incurred by the Group.
provision of investment management services.
This revenue is recognised as the relevant service is provided
The Group recognises revenue in accordance with the principles of and it is probable that the fee will be collected.
IFRS 15 Revenue from Contracts with Customers.
Distribution costs
The core principle of IFRS 15 is that revenue is recognised to
Distribution costs are costs of sales payable to external
reflect the transfer of promised goods or services to customers in
intermediaries for marketing and investor servicing. Distribution
an amount that reflects the consideration to which the entity
costs vary based on fund assets managed and the associated
expects to be entitled to in exchange for those goods or services.
management fee revenue, and are expensed over the period in
The Group applies the IFRS 15 five-step model for recognising
which the service is provided.
revenue, which consists of identifying the contract with the
customer; identifying the relevant performance obligations;
Employee benefits
determining the amount of consideration to be received under
Obligations for contributions to defined contribution pension plans
the contract; allocating the consideration to each performance
are recognised as an expense in the statement of comprehensive
obligation; and earning the revenue as the performance obligations
income when payable in accordance with the scheme particulars.
are satisfied.
Share-based payments
The Group’s principal revenue recognition policies are
The Group issues share awards to its employees under share-based
summarised below:
compensation plans.
Management fees
For equity-settled awards, the fair value of the amounts payable to
Management fees are presented net of rebates, and are calculated
employees is recognised as an expense with a corresponding
as a percentage of net fund assets managed in accordance with
increase in equity over the vesting period after adjusting for the
individual management agreements. Management fees are
estimated number of shares that are expected to vest. The fair
calculated and recognised on a monthly basis in accordance with
value is measured at the grant date using an appropriate valuation
the terms of the management fee agreements. Management fees
model, taking into account the terms and conditions upon which
are typically collected on a monthly or quarterly basis.
the instruments were granted. At each balance sheet date prior to
vesting, the cumulative expense representing the extent to which
Performance fees
the vesting period has expired and management’s best estimate of
Performance fees are presented net of rebates, and are calculated
the awards that are ultimately expected to vest is calculated. The
as a percentage of the appreciation in the net asset value of a fund
movement in cumulative expense is recognised in the statement of
above a defined hurdle. Performance fees are earned from some
comprehensive income with a corresponding entry within equity.
arrangements when contractually agreed performance levels are
exceeded within specified performance measurement periods, For cash-settled awards, the fair value of the amounts payable to
typically over one year. The fees are recognised when they can employees is recognised as an expense with a corresponding
be reliably estimated and/or crystallised, and there is deemed liability on the Group’s balance sheet. The fair value is measured
to be a low probability of a significant reversal in future periods. using an appropriate valuation model, taking into account the
This is usually at the end of the performance period or upon early estimated number of awards that are expected to vest and the
redemption by a fund investor. Once crystallised, performance fees terms and conditions upon which the instruments were granted.
typically cannot be clawed-back. During the vesting period, the liability recognised represents the
portion of the vesting period that has expired at the balance sheet
Rebates
date multiplied by the fair value of the awards at that date.
Rebates relate to repayments of management and performance Movements in the liability are recognised in the statement of
fees charged subject to a rebate agreement, typically with comprehensive income.
institutional investors, and are calculated based on an agreed
The Group has in place an intragroup recharge arrangement for
percentage of net fund assets managed and recognised as the
equity-settled share based awards whereby the parent Company is
service is received. Where rebate agreements exist, management
reimbursed based on the grant-date cost of share awards granted
and performance fees are presented on a net basis in the
to employees of the subsidiary entity. During the vest period, the
consolidated statement of comprehensive income.
subsidiary entity recognises a share-based payment expense in
accordance with IFRS 2 requirements with an intercompany
payable to parent Company. The parent Company recognise an
intercompany receivable and a corresponding credit within equity
as a share-based payment reserve. The intercompany balances are
settled regularly and reported as current assets/liabilities.
156 Ashmore Group plc Annual Report and Accounts 2022
156 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Finance income and expense Dividends
Finance income includes interest receivable on the Group’s cash Dividends are recognised when shareholders’ rights to receive
and cash equivalents, and both realised and unrealised gains on payments have been established.
financial assets at FVTPL.
4) Significant accounting policies continued Other revenue Equity shares
Finance expense includes both realised and unrealised losses on
Other revenue principally comprises fees for other services, The Company’s ordinary shares of 0.01 pence each are classified as
Net revenue
financial assets at FVTPL. Interest expense on lease liabilities is
which are typically driven by the volume of transactions, along with equity instruments. Ordinary shares issued by the Company are
Net revenue is total revenue less distribution costs and including presented within finance expense.
revenues that vary in accordance with the volume of fund project recorded at the fair value of the consideration received or the
foreign exchange. The Group’s total revenue includes management
development activities. Other revenue includes transaction, market price at the day of issue. Direct issue costs, net of tax, are
fees, performance fees and other revenue. The primary revenue Taxation
structuring and administration fees, project management fees, deducted from equity through share premium. When share capital
source for the Group is fee income received or receivable for the Tax expense for the year comprises current and deferred tax.
and reimbursement by funds of costs incurred by the Group. is repurchased, the amount of consideration paid, including directly
provision of investment management services. Tax is recognised in the consolidated statement of comprehensive
This revenue is recognised as the relevant service is provided attributable costs, is recognised as a change in equity.
income except to the extent that it relates to items recognised
The Group recognises revenue in accordance with the principles of and it is probable that the fee will be collected.
directly in equity, in which case it is recognised in equity.
IFRS 15 Revenue from Contracts with Customers. Own shares
Distribution costs Own shares are held by the Employee Benefit Trust (EBT).
The core principle of IFRS 15 is that revenue is recognised to Current tax
Distribution costs are costs of sales payable to external The holding of the EBT comprises own shares that have not
reflect the transfer of promised goods or services to customers in Current tax comprises the expected tax payable or receivable on
intermediaries for marketing and investor servicing. Distribution vested unconditionally to employees of the Group. In both the
an amount that reflects the consideration to which the entity the taxable income or loss for the year, and any adjustment to the
costs vary based on fund assets managed and the associated Group and Company, own shares are recorded at cost and are
expects to be entitled to in exchange for those goods or services. tax payable or receivable in respect of previous years. It is
management fee revenue, and are expensed over the period in deducted from retained earnings.
The Group applies the IFRS 15 five-step model for recognising measured using tax rates enacted or substantively enacted at the
which the service is provided.
revenue, which consists of identifying the contract with the balance sheet date in the countries where the Group operates.
Segmental information
customer; identifying the relevant performance obligations; Current tax also includes withholding tax arising from dividends.
Employee benefits Key management information, including revenues, margins,
determining the amount of consideration to be received under
Obligations for contributions to defined contribution pension plans investment performance, distribution costs and AuM flows, which
the contract; allocating the consideration to each performance Deferred tax
are recognised as an expense in the statement of comprehensive is relevant to the operation of the Group, is reported to and
obligation; and earning the revenue as the performance obligations Deferred tax is recognised using the balance sheet liability method,
income when payable in accordance with the scheme particulars. reviewed by the Board on the basis of the investment management
are satisfied. in respect of temporary differences between the carrying amounts
business as a whole. Hence, the Group’s management considers
of assets and liabilities for financial reporting purposes and the
Share-based payments
The Group’s principal revenue recognition policies are that the Group’s services and its operations are not run on a
amounts used for taxation purposes. The following differences are
The Group issues share awards to its employees under share-based
summarised below: discrete geographic basis and comprise one business segment
not provided for:
compensation plans.
(being provision of investment management services).
Management fees – goodwill not deductible for tax purposes; and
For equity-settled awards, the fair value of the amounts payable to
Management fees are presented net of rebates, and are calculated Company-only accounting policies
– differences relating to investments in subsidiaries to the extent
employees is recognised as an expense with a corresponding
as a percentage of net fund assets managed in accordance with
that they will probably not reverse in the foreseeable future. In addition to the above accounting policies, the following
increase in equity over the vesting period after adjusting for the
individual management agreements. Management fees are
specifically relates to the Company:
estimated number of shares that are expected to vest. The fair
The amount of deferred tax provided is based on the expected
calculated and recognised on a monthly basis in accordance with
value is measured at the grant date using an appropriate valuation
manner of realisation or settlement of the carrying amount of
the terms of the management fee agreements. Management fees Investment in subsidiaries
model, taking into account the terms and conditions upon which
assets and liabilities, using tax rates enacted or substantively
are typically collected on a monthly or quarterly basis. Investments by the Company in subsidiaries are stated at cost less,
the instruments were granted. At each balance sheet date prior to
enacted at the reporting date.
where appropriate, provisions for impairment.
vesting, the cumulative expense representing the extent to which
Performance fees
Deferred tax assets are recognised only to the extent that it is
the vesting period has expired and management’s best estimate of
Performance fees are presented net of rebates, and are calculated
probable that future taxable profits will be available against which
the awards that are ultimately expected to vest is calculated. The
as a percentage of the appreciation in the net asset value of a fund
the assets can be utilised. Deferred tax assets are reviewed at each
movement in cumulative expense is recognised in the statement of
above a defined hurdle. Performance fees are earned from some
reporting date and are reduced to the extent that it is no longer
comprehensive income with a corresponding entry within equity.
arrangements when contractually agreed performance levels are
probable that the related tax benefit will be realised.
exceeded within specified performance measurement periods, For cash-settled awards, the fair value of the amounts payable to
Deferred tax is measured at the tax rates that are expected to be
typically over one year. The fees are recognised when they can employees is recognised as an expense with a corresponding
applied to temporary differences when they reverse, using tax rates
be reliably estimated and/or crystallised, and there is deemed liability on the Group’s balance sheet. The fair value is measured
enacted or substantively enacted at the balance sheet date.
to be a low probability of a significant reversal in future periods. using an appropriate valuation model, taking into account the
This is usually at the end of the performance period or upon early estimated number of awards that are expected to vest and the
redemption by a fund investor. Once crystallised, performance fees terms and conditions upon which the instruments were granted.
typically cannot be clawed-back. During the vesting period, the liability recognised represents the
portion of the vesting period that has expired at the balance sheet
Rebates
date multiplied by the fair value of the awards at that date.
Rebates relate to repayments of management and performance Movements in the liability are recognised in the statement of
fees charged subject to a rebate agreement, typically with comprehensive income.
institutional investors, and are calculated based on an agreed
The Group has in place an intragroup recharge arrangement for
percentage of net fund assets managed and recognised as the
equity-settled share based awards whereby the parent Company is
service is received. Where rebate agreements exist, management
reimbursed based on the grant-date cost of share awards granted
and performance fees are presented on a net basis in the
to employees of the subsidiary entity. During the vest period, the
consolidated statement of comprehensive income.
subsidiary entity recognises a share-based payment expense in
accordance with IFRS 2 requirements with an intercompany
payable to parent Company. The parent Company recognise an
intercompany receivable and a corresponding credit within equity
Ashmore Group plc Annual Report and Accounts 2022 157
as a share-based payment reserve. The intercompany balances are
settled regularly and reported as current assets/liabilities.
156 Ashmore Group plc Annual Report and Accounts 2022 Ashmore Group plc Annual Report and Accounts 2022 157
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
5) Segmental information
The Group’s operations are reported to and reviewed by the Board on the basis of the investment management business as a whole,
hence the Group is treated as a single segment. The key management information considered is adjusted EBITDA which is £164.3 million
for the year as reconciled on page 30 (FY2020/21: adjusted EBITDA of £195.7 million was derived by adjusting operating profit by
£2.8 million of depreciation and amortisation expense, £23.3 million of income related to seed capital and £3.8 million of foreign exchange
gains). The disclosures below are supplementary, and provide the location of the Group’s non-current assets at year end other than financial
assets and deferred tax assets. Disclosures relating to revenue by location are in note 6.
Analysis of non-current assets by geography
2022 2021
£m £m
United Kingdom and Ireland 26.5 24.8
United States 73.5 65.1
Other 2.5 3.2
Total non-current assets 102.5 93.1
6) Revenue
Management fees are accrued throughout the year in line with prevailing levels of AuM and performance fees are recognised when they
can be estimated reliably and it is probable that they will crystallise. The Group is not considered to be reliant on any single source of
revenue. During the year, none of the Group’s funds (FY2020/21: none) provided more than 10% of total revenue in the year respectively
when considering management fees and performance fees on a combined basis.
Analysis of revenue by geography
2022 2021
£m £m
United Kingdom and Ireland 193.6 229.9
United States 22.0 26.8
Other 38.8 36.2
Total revenue 254.4 292.9
7) Foreign exchange
The foreign exchange rates which had a material impact on the Group’s results are the US dollar, the Euro, the Indonesian rupiah and the
Colombian peso.

|  |  |  |  |  | Average rate |  |  | Average rate |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | Closing rate |  | Closing rate |  | year ended |  |  | year ended |  |
|  | as at 30 June |  | as at 30 June |  |  | 30 June |  |  | 30 June |
| £1 |  | 2022 |  | 2021 |  |  | 2022 |  | 2021 |

US dollar 1.2145 1.3815 1.3289 1.3472
Euro 1.1617 1.1649 1.1785 1.1315
Indonesian rupiah 18,092 20,031 19,146 19,389
Colombian peso 5,053 5,158 5,164 4,968
Foreign exchange gains and losses are shown below.
2022 2021
£m £m
Net realised and unrealised hedging gains 6.3 9.2
Translation gains/(losses) on non-Sterling denominated monetary assets and liabilities 5.3 (4.9)
Total foreign exchange gains 11.6 4.3
158 Ashmore Group plc Annual Report and Accounts 2022
158 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
8) Finance income/(expense)
2022 2021
£m £m
Interest and investment income 7.7 4.3
Net realised gains on seed capital investments measured at fair value 0.1 8.5
5) Segmental information
The Group’s operations are reported to and reviewed by the Board on the basis of the investment management business as a whole, Net unrealised gains/(losses) on seed capital investments measured at fair value (9.5) 11.5
hence the Group is treated as a single segment. The key management information considered is adjusted EBITDA which is £164.3 million Interest expense on lease liabilities (note 16) (0.4) (0.4)
for the year as reconciled on page 30 (FY2020/21: adjusted EBITDA of £195.7 million was derived by adjusting operating profit by
Total finance income/(expense) (2.1) 23.9
£2.8 million of depreciation and amortisation expense, £23.3 million of income related to seed capital and £3.8 million of foreign exchange
gains). The disclosures below are supplementary, and provide the location of the Group’s non-current assets at year end other than financial Included within interest and investment income are gains of £5.7 million (FY2020/21: £3.3 million gains) from investment securities on
assets and deferred tax assets. Disclosures relating to revenue by location are in note 6. consolidated funds (note 20d).
Included within net realised and unrealised gains on seed capital investments measured at fair value are £1.1 million losses (FY2020/21:
Analysis of non-current assets by geography
£10.8 million gains) in relation to financial assets held for sale (note 20a), £12.5 million losses (FY2020/21: £8.2 million gains) on financial
2022 2021
£m £m assets measured at FVTPL (note 20b) and £4.2 million gains (FY2020/21: £2.2 million gains) on non-current financial assets measured at fair
value (note 20c).
United Kingdom and Ireland 26.5 24.8
United States 73.5 65.1
9) Personnel expenses
Other 2.5 3.2
Personnel expenses during the year comprised the following:
Total non-current assets 102.5 93.1
2022 2021
£m £m
6) Revenue
Wages and salaries 22.1 21.4
Management fees are accrued throughout the year in line with prevailing levels of AuM and performance fees are recognised when they
Performance-related cash bonuses 20.7 20.2
can be estimated reliably and it is probable that they will crystallise. The Group is not considered to be reliant on any single source of
Share-based payments (note 10) 24.9 33.4
revenue. During the year, none of the Group’s funds (FY2020/21: none) provided more than 10% of total revenue in the year respectively
Social security costs 1.9 1.8
when considering management fees and performance fees on a combined basis.
Pension costs 1.8 1.8
Analysis of revenue by geography Other costs 2.0 1.7
2022 2021
Total personnel expenses 73.4 80.3
£m £m
United Kingdom and Ireland 193.6 229.9
Number of employees
United States 22.0 26.8
At 30 June 2022, the number of investment management employees of the Group (including Executive Directors) during the year was
Other 38.8 36.2
as follows:
Total revenue 254.4 292.9
Average for Average for
the year the year
ended ended At At
7) Foreign exchange

|  |  |  |  |  |  | 30 June 2022 |  | 30 June 2021 |  | 30 June 2022 |  | 30 June 2021 |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| The foreign exchange rates which had a material impact on the Group’s results are the US dollar, the Euro, the Indonesian rupiah and the |  |  |  |  |  |  | Number |  | Number |  | Number |  | Number |
| Colombian peso. |  |  |  |  | Total investment management employees 305 295 309 298 |  |  |  |  |  |  |  |  |
|  |  |  | Average rate | Average rate |  |  |  |  |  |  |  |  |  |
|  | Closing rate | Closing rate | year ended | year ended |  |  |  |  |  |  |  |  |  |

Directors’ remuneration

|  | as at 30 June |  | as at 30 June |  | 30 June |  | 30 June |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| £1 |  | 2022 |  | 2021 |  | 2022 |  | 2021 | Disclosures of Directors’ remuneration during the year as required by the Companies Act 2006 are included in the Remuneration report |
| US dollar 1.2145 1.3815 1.3289 1.3472 |  |  |  |  |  |  |  |  | on pages 95 to 126. |

Euro 1.1617 1.1649 1.1785 1.1315
There are retirement benefits accruing to two Executive Directors under a defined contribution scheme (FY2020/21: two).
Indonesian rupiah 18,092 20,031 19,146 19,389
10) Share-based payments
Colombian peso 5,053 5,158 5,164 4,968
The cost related to share-based payments recognised by the Group in the statement of comprehensive income is shown below:
Foreign exchange gains and losses are shown below.

|  |  |  | 2022 | 2021 |
| --- | --- | --- | --- | --- |
|  |  | Group | £m | £m |
| 2022 | 2021 |  |  |  |
| £m | £m |  |  |  |

Omnibus Plan 25.1 33.3
Net realised and unrealised hedging gains 6.3 9.2
Phantom Bonus Plan (0.2) 0.1
Translation gains/(losses) on non-Sterling denominated monetary assets and liabilities 5.3 (4.9)
Total share-based payments expense 24.9 33.4
Total foreign exchange gains 11.6 4.3
The total expense recognised for the year in respect of equity-settled share-based payment awards was £24.5 million (FY2020/21:
£29.9 million), of which £0.2 million (FY2020/21: £2.5 million) relates to share awards granted to key management personnel.
Ashmore Group plc Annual Report and Accounts 2022 159
158 Ashmore Group plc Annual Report and Accounts 2022 Ashmore Group plc Annual Report and Accounts 2022 159
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
10) Share-based payments continued
The Executive Omnibus Incentive Plan (Omnibus Plan)
The Omnibus Plan was introduced prior to the Company listing in October 2006 and provides for the grant of share awards, market value
options, premium cost options, discounted options, linked options, phantoms and/or nil-cost options to employees. The Omnibus Plan will
also allow bonuses to be deferred in the form of share awards with or without matching shares. Awards granted under the Omnibus Plan
typically vest after five years from date of grant, with the exception of bonus awards which vest after the shorter of five years from date of
grant or on the date of termination of employment. Awards under the Omnibus Plan are accounted for as equity-settled, with the exception
of phantoms which are classified as cash-settled.
The combined cash and equity-settled payments below represent the share-based payments relating to the Omnibus Plan.
Total expense by year awards were granted (excluding national insurance)
Group and Company 2022 2021
Year of grant £m £m
2016 – 2.6
2017 3.2 3.7
2018 2.9 3.8
2019 3.5 4.4
2020 3.5 3.9
2021 5.5 11.5
2022 5.7 –
Total Omnibus share-based payments expense reported in comprehensive income 24.3 29.9
Awards outstanding under the Omnibus Plan were as follows:
i) Equity-settled awards

|  |  |  | 2022 |  | 2022 |  |  | 2021 |  | 2021 |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  | Number of |  | Weighted |  |  | Number of |  | Weighted |  |
|  | shares subject |  |  | average |  | shares subject |  |  | average |  |
| Group and Company |  | to awards |  | share price |  |  | to awards |  | share price |  |

Restricted share awards
At the beginning of the year 19,997,393 £3.58 22,073,338 £3.27
Granted 4,423,544 £3.71 4,189,112 £3.62
Vested (3,874,613) £3.44 (5,945,594) £2.47
Forfeited (1,234,829) £3.44 (319,463) £3.12
Awards outstanding at year end 19,311,495 £3.65 19,997,393 £3.58
Bonus share awards
At the beginning of the year 10,617,648 £3.58 10,693,287 £3.32
Granted 2,285,034 £3.75 2,261,160 £3.61
Vested (1,905,089) £3.44 (2,336,799) £2.43
Forfeited – – ––
Awards outstanding at year end 10,997,593 £3.64 10,617,648 £3.58
Matching share awards
At the beginning of the year 10,687,135 £3.58 10,750,311 £3.33
Granted 2,297,585 £3.75 2,273,623 £3.61
Vested (1,881,231) £3.44 (2,230,531) £2.43
Forfeited (723,744) £3.42 (106,268) £2.43
Awards outstanding at year end 10,379,745 £3.65 10,687,135 £3.58
Total 40,688,833 £3.65 41,302,176 £3.58
160 Ashmore Group plc Annual Report and Accounts 2022
160 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
ii) Cash-settled awards

|  |  |  |  | 2022 |  | 2022 |  |  | 2021 |  | 2021 |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  | Number of |  | Weighted |  |  | Number of |  | Weighted |  |
|  |  | shares subject |  |  | average |  | shares subject |  |  | average |  |
|  | Group and Company |  | to awards |  | share price |  |  | to awards |  | share price |  |
| 10) Share-based payments continued | Restricted share awards |  |  |  |  |  |  |  |  |  |  |

At the beginning of the year 122,239 £3.53
The Executive Omnibus Incentive Plan (Omnibus Plan)
The Omnibus Plan was introduced prior to the Company listing in October 2006 and provides for the grant of share awards, market value Granted 15,741 £3.75
options, premium cost options, discounted options, linked options, phantoms and/or nil-cost options to employees. The Omnibus Plan will Vested (27,700) £3.40 (19,836) £2.43
also allow bonuses to be deferred in the form of share awards with or without matching shares. Awards granted under the Omnibus Plan
Forfeited – –
141,297 £3.45
typically vest after five years from date of grant, with the exception of bonus awards which vest after the shorter of five years from date of
Awards outstanding at year end 110,280 £3.60
grant or on the date of termination of employment. Awards under the Omnibus Plan are accounted for as equity-settled, with the exception 778 £3.60
of phantoms which are classified as cash-settled.
Bonus share awards
The combined cash and equity-settled payments below represent the share-based payments relating to the Omnibus Plan. ––
At the beginning of the year 80,765 £3.55
122,239 £3.53

| Total expense by year awards were granted (excluding national insurance) |  |  | Granted 11,276 £3.75 |
| --- | --- | --- | --- |
| Group and Company | 2022 | 2021 | Vested (11,530) £3.40 (6,179) £2.43 |
| Year of grant | £m | £m |  |

Forfeited – –
2016 – 2.6 86,944 £3.47
Awards outstanding at year end 80,511 £3.60
2017 3.2 3.7 ––
2018 2.9 3.8
Matching share awards
2019 3.5 4.4 ––
At the beginning of the year 80,765 £3.55
2020 3.5 3.9 80,765 £3.55
Granted 11,276 £3.75
2021 5.5 11.5
Vested (11,530) £3.40 (6,179) £2.43
2022 5.7 –
Forfeited – –
Total Omnibus share-based payments expense reported in comprehensive income 24.3 29.9
86,944 £3.47
Awards outstanding at year end 80,511 £3.60
––
Awards outstanding under the Omnibus Plan were as follows:
Total 271,302 £3.60
i) Equity-settled awards
––
2022 2022 2021 2021
Number of Weighted Number of Weighted
80,765 £3.55
shares subject average shares subject average
Group and Company to awards share price to awards share price 283,769 £3.54
Restricted share awards
At the beginning of the year 19,997,393 £3.58 22,073,338 £3.27
Granted 4,423,544 £3.71 4,189,112 £3.62
Vested (3,874,613) £3.44 (5,945,594) £2.47
Forfeited (1,234,829) £3.44 (319,463) £3.12
Awards outstanding at year end 19,311,495 £3.65 19,997,393 £3.58
Bonus share awards
At the beginning of the year 10,617,648 £3.58 10,693,287 £3.32
Granted 2,285,034 £3.75 2,261,160 £3.61
Vested (1,905,089) £3.44 (2,336,799) £2.43
Forfeited – – ––
Awards outstanding at year end 10,997,593 £3.64 10,617,648 £3.58
Matching share awards
At the beginning of the year 10,687,135 £3.58 10,750,311 £3.33
Granted 2,297,585 £3.75 2,273,623 £3.61
Vested (1,881,231) £3.44 (2,230,531) £2.43
Forfeited (723,744) £3.42 (106,268) £2.43
Awards outstanding at year end 10,379,745 £3.65 10,687,135 £3.58
Total 40,688,833 £3.65 41,302,176 £3.58
Ashmore Group plc Annual Report and Accounts 2022 161
160 Ashmore Group plc Annual Report and Accounts 2022 Ashmore Group plc Annual Report and Accounts 2022 161
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
10) Share-based payments continued
iii) Total awards

|  |  | 2022 |  | 2022 |  |  | 2021 |  | 2021 |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | Number of |  | Weighted |  |  | Number of |  | Weighted |  |
|  | shares subject |  | average |  | shares subject |  |  | average |  |
| Group and Company | to awards |  | share price |  |  | to awards |  | share price |  |

Restricted share awards
At the beginning of the year 20,119,632 £3.58 22,214,635 £3.27
Granted 4,439,285 £3.71 4,189,890 £3.62
Vested (3,902,313) £3.44 (5,965,430) £2.47
Forfeited (1,234,829) £3.44 (319,463) £3.12
Awards outstanding at year end 19,421,775 £3.65 20,119,632 £3.58
Bonus share awards
At the beginning of the year 10,698,413 £3.58 10,780,231 £3.33
Granted 2,296,310 £3.75 2,261,160 £3.61
Vested (1,916,619) £3.44 (2,342,978) £2.43
Forfeited – – ––
Awards outstanding at year end 11,078,104 £3.64 10,698,413 £3.58
Matching share awards
At the beginning of the year 10,767,900 £3.58 10,837,255 £3.33
Granted 2,308,861 £3.75 2,273,623 £3.61
Vested (1,892,761) £3.44 (2,236,710) £2.43
Forfeited (723,744) £3.42 (106,268) £2.43
Awards outstanding at year end 10,460,256 £3.65 10,767,900 £3.58
Total 40,960,135 £3.65 41,585,945 £3.58
The weighted average fair value of awards granted to employees under the Omnibus Plan during the year was £3.73 (FY2020/21: £3.62),
calculated based on the average Ashmore Group plc closing share price for the five business days prior to grant. For Executive Directors,
the fair value of awards also takes into account the performance conditions set out in the Remuneration report.
Where the grant of restricted and matching share awards is linked to the annual bonus process, the fair value of the awards is spread over a
period including the current financial year and the subsequent five years to their vesting date when the grantee becomes unconditionally
entitled to the underlying shares. The fair value of the remaining awards is spread over the period from the date of grant to the vesting date.
The liability arising from cash-settled awards under the Omnibus Plan at the end of the year and reported within trade and other payables on
the Group consolidated balance sheet is £0.4 million (30 June 2021: £0.8 million) of which £nil (30 June 2021: £nil) relates to vested awards.
162 Ashmore Group plc Annual Report and Accounts 2022
162 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
11) Other expenses
Other expenses consist of the following:

|  |  |  |  |  |  | 2022 | 2021 |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  | £m | £m |
| 10) Share-based payments continued |  |  |  |  | Travel 0.9 0.1 |  |  |
| iii) Total awards |  |  |  |  | Professional fees 4.7 4.8 |  |  |
|  | 2022 | 2022 | 2021 | 2021 |  |  |  |

Information technology and communications 7.3 7.0

|  |  | Number of | Weighted |  | Number of | Weighted |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  | shares subject |  | average | shares subject |  | average | Amortisation of intangible assets (note 15) 0.2 0.2 |
| Group and Company |  | to awards | share price |  | to awards | share price |  |

Operating leases 0.4 0.3
Restricted share awards
Depreciation of property, plant and equipment (note 16) 2.9 2.6
At the beginning of the year 20,119,632 £3.58 22,214,635 £3.27
Premises-related costs 1.3 1.0
Granted 4,439,285 £3.71 4,189,890 £3.62
Insurance 1.0 0.8
Vested (3,902,313) £3.44 (5,965,430) £2.47
Research costs 0.4 0.5
Forfeited (1,234,829) £3.44 (319,463) £3.12
Auditor’s remuneration (see below) 0.9 0.8
Awards outstanding at year end 19,421,775 £3.65 20,119,632 £3.58
Consolidated funds 1.2 1.6
Other expenses 3.9 4.3
Bonus share awards
25.1 24.0
At the beginning of the year 10,698,413 £3.58 10,780,231 £3.33
Granted 2,296,310 £3.75 2,261,160 £3.61 Operating leases expense relates to short-term leases where the Group has applied the optional exemption contained within IFRS 16,
which permits the cost of short-term leases (less than 12 months) to be expensed on a straight-line basis over the lease term.
Vested (1,916,619) £3.44 (2,342,978) £2.43
Forfeited – – ––
Auditor’s remuneration
Awards outstanding at year end 11,078,104 £3.64 10,698,413 £3.58 2022 2021
£m £m
Fees for statutory audit services:
Matching share awards
– Fees payable to the Company’s auditor for the audit of the Group’s accounts 0.2 0.2
At the beginning of the year 10,767,900 £3.58 10,837,255 £3.33
– Fees payable to the Company’s auditor and its associates for the audit of the Company’s subsidiaries
Granted 2,308,861 £3.75 2,273,623 £3.61
pursuant to legislation 0.5 0.4
Vested (1,892,761) £3.44 (2,236,710) £2.43
Forfeited (723,744) £3.42 (106,268) £2.43
Fees for non-audit services:
Awards outstanding at year end 10,460,256 £3.65 10,767,900 £3.58
– Other non-audit services 0.2 0.2
Total 40,960,135 £3.65 41,585,945 £3.58
0.9 0.8
The weighted average fair value of awards granted to employees under the Omnibus Plan during the year was £3.73 (FY2020/21: £3.62),
calculated based on the average Ashmore Group plc closing share price for the five business days prior to grant. For Executive Directors,
the fair value of awards also takes into account the performance conditions set out in the Remuneration report.
Where the grant of restricted and matching share awards is linked to the annual bonus process, the fair value of the awards is spread over a
period including the current financial year and the subsequent five years to their vesting date when the grantee becomes unconditionally
entitled to the underlying shares. The fair value of the remaining awards is spread over the period from the date of grant to the vesting date.
The liability arising from cash-settled awards under the Omnibus Plan at the end of the year and reported within trade and other payables on
the Group consolidated balance sheet is £0.4 million (30 June 2021: £0.8 million) of which £nil (30 June 2021: £nil) relates to vested awards.
Ashmore Group plc Annual Report and Accounts 2022 163
162 Ashmore Group plc Annual Report and Accounts 2022 Ashmore Group plc Annual Report and Accounts 2022 163
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

## 12) Taxation

Analysis of tax charge for the year:

|   | 2022 £m | 2021 £m  |
| --- | --- | --- |
|  **Current tax** |  |   |
|  UK corporation tax on profits for the year | **11.1** | 24.4  |
|  Overseas corporation tax charge | **14.9** | 17.3  |
|  Adjustments in respect of prior years | **(0.5)** | (0.4)  |
|   | **25.5** | 41.3  |
|  **Deferred tax** |  |   |
|  Origination and reversal of temporary differences (note 18) | **1.0** | 1.8  |
|  Effect on deferred tax balance of changes in corporation tax rates (note 18) | – | (2.4)  |
|  **Tax expense** | **26.5** | 40.7  |

### Factors affecting tax charge for the year

|   | 2022 £m | 2021 £m  |
| --- | --- | --- |
|  Profit before tax | **118.4** | 282.5  |
|  Profit on ordinary activities multiplied by the UK tax rate of 19% (FY2020/21: 19%) | **22.5** | 53.7  |

### Effects of:

|  Permanent differences including non-taxable income and non-deductible expenses | **4.7** | (3.1)  |
| --- | --- | --- |
|  Different rate of taxes on overseas profits | **(3.3)** | (3.8)  |
|  Non-deductible/(non-taxable) investment returns^{1} | **3.2** | (4.1)  |
|  Adjustments in respect of prior years | **(0.6)** | –  |
|  Derecognition of deferred tax assets | – | 0.4  |
|  Effect on deferred tax balances from changes in corporation tax rates | – | (2.4)  |
|  **Tax expense** | **26.5** | 40.7  |

1. Non-taxable investment returns comprises seed capital investment gains/losses in certain jurisdictions in which the Group operates for which there are local tax exemptions.

The tax charge recognised in reserves within other comprehensive income is as follows:

|   | 2022 £m | 2021 £m  |
| --- | --- | --- |
|  Current tax expense on foreign exchange gains | **2.9** | –  |
|  **Tax expense recognised in reserves** | **2.9** | –  |

164 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
13) Earnings per share
Basic earnings per share at 30 June 2022 of 13.42 pence (30 June 2021: 36.40 pence) is calculated by dividing the profit after tax for the
financial year attributable to equity holders of the parent of £88.5 million (FY2020/21: £240.1 million) by the weighted average number of
ordinary shares in issue during the year, excluding own shares.
12) Taxation
Diluted earnings per share is calculated based on basic earnings per share adjusted for all dilutive potential ordinary shares. There is
Analysis of tax charge for the year:
no difference between the profit for the year attributable to equity holders of the parent used in the basic and diluted earnings per
2022 2021 share calculations.
£m £m
Reconciliation of the weighted average number of shares used in calculating basic and diluted earnings per share is shown below.
Current tax

| UK corporation tax on profits for the year 11.1 24.4 |  | 2022 |  | 2021 |
| --- | --- | --- | --- | --- |
|  | Number of |  | Number of |  |
| Overseas corporation tax charge 14.9 17.3 | ordinary |  | ordinary |  |
|  |  | shares |  | shares |

Adjustments in respect of prior years (0.5) (0.4)
Weighted average number of ordinary shares used in the calculation of basic earnings per share 659,466,487 659,341,111
25.5 41.3
Effect of dilutive potential ordinary shares – share awards 42,657,852 41,926,476
Deferred tax
Weighted average number of ordinary shares used in the calculation of diluted earnings per share 702,124,339 701,267,587
Origination and reversal of temporary differences (note 18) 1.0 1.8
Effect on deferred tax balance of changes in corporation tax rates (note 18) – (2.4)
14) Dividends
Tax expense 26.5 40.7
Dividends paid in the year

|  |  |  |  | 2022 | 2021 |
| --- | --- | --- | --- | --- | --- |
| Factors affecting tax charge for the year |  |  | Company | £m | £m |
|  | 2022 | 2021 | Final dividend for 2020/21 – 12.10p (FY2019/20: 12.10p) 85.0 84.7 |  |  |
|  | £m | £m |  |  |  |

Interim dividend 2021/22 – 4.80p (FY2020/21: 4.80p) 33.5 33.6
Profit before tax 118.4 282.5
118.5 118.3
Profit on ordinary activities multiplied by the UK tax rate of 19% (FY2020/21: 19%) 22.5 53.7 In addition, the Group paid £3.0 million (FY2020/21: £2.9 million) of dividends to non-controlling interests.
Dividends declared/proposed in respect of the year
Effects of:

|  |  |  | 2022 | 2021 |
| --- | --- | --- | --- | --- |
| Permanent differences including non-taxable income and non-deductible expenses 4.7 (3.1) |  | Company | pence | pence |
| Different rate of taxes on overseas profits (3.3) (3.8) |  | Interim dividend per share paid 4.80 4.80 |  |  |
|  | 1 | Final dividend per share proposed 12.10 12.10 |  |  |
| Non-deductible/(non-taxable) investment returns | 3.2 (4.1) |  |  |  |
| Adjustments in respect of prior years (0.6) – |  | 16.90 16.90 |  |  |

Derecognition of deferred tax assets – 0.4
On 1 September 2022, the Board proposed a final dividend of 12.10 pence per share for the year ended 30 June 2022. This has not been
Effect on deferred tax balances from changes in corporation tax rates – (2.4)
recognised as a liability of the Group at the year end as it has not yet been approved by shareholders. Based on the number of shares
Tax expense 26.5 40.7 in issue at the year end that qualify to receive a dividend, the total amount payable would be £84.7 million.
1. Non-taxable investment returns comprises seed capital investment gains/losses in certain jurisdictions in which the Group operates for which there are local
tax exemptions.
The tax charge recognised in reserves within other comprehensive income is as follows:
2022 2021
£m £m
Current tax expense on foreign exchange gains 2.9 –
Tax expense recognised in reserves 2.9 –
Ashmore Group plc Annual Report and Accounts 2022 165
164 Ashmore Group plc Annual Report and Accounts 2022 Ashmore Group plc Annual Report and Accounts 2022 165
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

## 15) Goodwill and intangible assets

|  Group | Goodwill £m | Fund management intangible assets £m | Total £m  |
| --- | --- | --- | --- |
|  **Cost (at original exchange rate)**  |   |   |   |
|  **At 30 June 2022 and 2021** | **70.4** | **0.9** | **71.3**  |
|  **Accumulated amortisation and impairment**  |   |   |   |
|  At 30 June 2020 | – | (0.3) | (0.3)  |
|  Amortisation charge for the year | – | (0.2) | (0.2)  |
|  At 30 June 2021 | – | (0.5) | (0.5)  |
|  Amortisation charge for the year | – | **(0.1)** | **(0.1)**  |
|  **At 30 June 2022** | **–** | **(0.6)** | **(0.6)**  |
|  **Net book value**  |   |   |   |
|  At 30 June 2020 | 89.1 | 0.6 | 89.7  |
|  Accumulated amortisation for the year | – | (0.2) | (0.2)  |
|  Foreign exchange revaluation through reserves* | (9.0) | – | (9.0)  |
|  At 30 June 2021 | 80.1 | 0.4 | 80.5  |
|  Accumulated amortisation for the year | – | **(0.1)** | **(0.1)**  |
|  Foreign exchange revaluation through reserves* | **10.4** | **0.1** | **10.5**  |
|  **At 30 June 2022** | **90.5** | **0.4** | **90.9**  |

\* Foreign exchange revaluation through reserves is a result of the retranslation of US dollar-denominated intangibles and goodwill.

|  Company | Goodwill £m  |
| --- | --- |
|  **Cost**  |   |
|  At the beginning and end of the year | 4.1  |
|  **Net carrying amount at 30 June 2022 and 2021** | **4.1**  |

166 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT

GOVERNANCE

FINANCIAL STATEMENTS

## Goodwill

The Group's goodwill balance relates to the acquisition of subsidiaries. The Company's goodwill balance relates to the acquisition of the business from ANZ in 1999.

Goodwill acquired in a business combination is allocated to the cash-generating units that are expected to benefit from that business combination. It is the Group's judgement that the lowest level of cash-generating unit used to determine impairment is the investment management segment level. The Group has assessed that it consists of a single cash-generating unit for the purposes of monitoring and assessing goodwill for impairment. This reflects the Group's global operating model, based on a single operating platform, into which acquired businesses are fully integrated and from which acquisition-related synergies are expected to be realised. Based on this model, the Group's investment management activities are considered as a single cash-generating unit, for which key management regularly receive and review internal financial information.

An annual impairment review of goodwill was undertaken for the year ending 30 June 2022, and no factors indicating potential impairment of goodwill were noted. Goodwill is tested for impairment annually or whenever there is an indication that the carrying amount may not be recoverable based on management's judgements regarding the future prospects of the business, market capitalisation, macroeconomic and market considerations. The key assumption used to determine the recoverable amount is based on a fair value calculation using the Company's market share price.

Based on the calculation as at 30 June 2022 using a market share price of £2.22, the recoverable amount was in excess of the carrying value of goodwill and no impairment was implied. In addition, the sensitivity of the recoverable amount to a 10% change in the Company's market share price will not lead to any impairment. Therefore, no impairment loss has been recognised in the current or preceding years.

## Fund management intangible assets

Intangible assets as at 30 June 2022 comprise fund management contracts and a contractually agreed share of carried interest recognised by the Group on the acquisition of Ashmore Avenida Investments (Real Estate) LLP in July 2018. An annual impairment review was undertaken for the year ending 30 June 2022 and no factors were identified suggesting that fund management contracts intangible assets were impaired. The remaining amortisation period for fund management contracts is three years.

Ashmore Group plc Annual Report and Accounts 2022 167
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
16) Property, plant and equipment
The Group’s property, plant and equipment include right-of-use assets recognised on operating lease arrangements as follows:
Group Company
£m £m
Property, plant and equipment owned by the Group 1.5 1.1
Right-of-use assets 7.6 4.4
Net book value at 30 June 2022 9.1 5.5
The movement in property, plant and equipment is provided below:

|  |  | 2022 |  | 2021 |
| --- | --- | --- | --- | --- |
|  | Fixtures, |  | Fixtures, |  |
|  | fittings and |  | fittings and |  |
|  | equipment |  | equipment |  |
| Group |  | £m |  | £m |

Cost
At the beginning of the year 21.9 20.8
Right-of-use assets recognition and remeasurement – 1.4
Additions 0.5 0.7
Foreign exchange revaluation 0.6 (1.0)
At the end of the year 23.0 21.9
Accumulated depreciation
At the beginning of the year 10.7 9.1
Right-of-use assets recognition and remeasurement – (0.8)
Depreciation charge for the year 2.9 2.9
Foreign exchange revaluation 0.3 (0.5)
At the end of the year 13.9 10.7
Net book value at 30 June 9.1 11.2

|  |  | 2022 |  | 2021 |
| --- | --- | --- | --- | --- |
|  | Fixtures, |  | Fixtures, |  |
|  | fittings and |  | fittings and |  |
|  | equipment |  | equipment |  |
| Company |  | £m |  | £m |

Cost
At the beginning of the year 13.5 12.0
Right-of-use assets recognition and remeasurement – 0.9
Additions 0.4 0.6
At the end of the year 13.9 13.5
Accumulated depreciation
At the beginning of the year 6.8 5.2
Depreciation charge for year 1.6 1.5
At the end of the year 8.4 6.7
Net book value at 30 June 5.5 6.8
168 Ashmore Group plc Annual Report and Accounts 2022
168 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Lease arrangements
The Group leases office space in various countries and enters into operating lease agreements on office premises with remaining lease
periods of two to six years. Lease terms are negotiated on an individual basis and contain varying terms and conditions depending on
location. The lease agreements do not impose any covenants other than the security interests in the leased assets that are held by the
16) Property, plant and equipment lessor. The Group calculates the lease liabilities using the lessee’s incremental borrowing rates that resulted in a weighted average
The Group’s property, plant and equipment include right-of-use assets recognised on operating lease arrangements as follows: incremental borrowing rate of 4.6% (FY2020/21: 4.5%).
Group Company The carrying value of right-of-use assets, lease liabilities and the movement during the year are set out below.
£m £m
Property, plant and equipment owned by the Group 1.5 1.1

|  | Right-of-use |  |  |  | Lease | Right-of-use |  |  |  | Lease |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Right-of-use assets 7.6 4.4 |  | assets |  | liabilities |  |  | assets |  | liabilities |  |
|  |  |  | £m |  | £m |  |  | £m |  | £m |

Net book value at 30 June 2022 9.1 5.5
At 30 June 2020 9.9 10.2 5.7 5.9
Group Company

| The movement in property, plant and equipment is provided below: |  |  |  |  | Additions and remeasurement of lease obligations 2.2 2.2 0.9 0.9 |
| --- | --- | --- | --- | --- | --- |
|  |  | 2022 |  | 2021 | Lease payments – (2.5) – (1.3) |
|  | Fixtures, |  | Fixtures, |  |  |
|  | fittings and |  | fittings and |  | Interest expense (note 8) – 0.4 – 0.2 |
|  | equipment |  | equipment |  |  |
| Group |  | £m |  | £m | Depreciation charge (2.2) – (1.1) – |
| Cost |  |  |  |  | Foreign exchange revaluation through reserves (0.5) (0.5) – – |
| At the beginning of the year 21.9 20.8 |  |  |  |  | At 30 June 2021 9.4 9.8 5.5 5.7 |
| Right-of-use assets recognition and remeasurement – 1.4 |  |  |  |  | Lease payments – (2.4) – (1.3) |
| Additions 0.5 0.7 |  |  |  |  | Interest expense (note 8) – 0.4 – 0.2 |
| Foreign exchange revaluation 0.6 (1.0) |  |  |  |  | Depreciation charge (2.1) – (1.1) – |
| At the end of the year 23.0 21.9 |  |  |  |  | Foreign exchange revaluation through reserves 0.3 0.2 – – |

At 30 June 2022 7.6 8.0 4.4 4.6
Accumulated depreciation
The contractual maturities on the minimum lease payments under lease liabilities are provided below:
At the beginning of the year 10.7 9.1
Right-of-use assets recognition and remeasurement – (0.8) 30 June 30 June 30 June 30 June
2022 2021 2022 2021
Depreciation charge for the year 2.9 2.9
Maturity analysis – contractual undiscounted cash flows £m £m £m £m
Foreign exchange revaluation 0.3 (0.5)
Within 1 year 2.6 2.5 1.3 1.3
At the end of the year 13.9 10.7 Group Company
Between 1 and 5 years 6.0 8.1 3.7 5.0
Net book value at 30 June 9.1 11.2 Later than 5 years 0.2 0.5 – –
Total undiscounted lease liabilities 8.8 11.1 5.0 6.3

|  |  | 2022 |  | 2021 |  |
| --- | --- | --- | --- | --- | --- |
|  | Fixtures, |  | Fixtures, |  |  |
|  | fittings and |  | fittings and |  | Lease liabilities are presented in the balance sheet as follows: |
|  | equipment |  | equipment |  |  |
| Company |  | £m |  | £m | Current 2.2 2.5 1.3 1.3 |
| Cost |  |  |  |  | Non-current 5.8 7.3 3.3 4.4 |
| At the beginning of the year 13.5 12.0 |  |  |  |  | Total lease liabilities 8.0 9.8 4.6 5.7 |

Right-of-use assets recognition and remeasurement – 0.9
Additions 0.4 0.6 Amounts recognised under financing activities in the cash flow statement:
At the end of the year 13.9 13.5 Payment of lease liabilities 2.0 2.1 1.1 1.1
Interest paid 0.4 0.4 0.2 0.2
Accumulated depreciation Total cash outflow for leases 2.4 2.5 1.3 1.3
At the beginning of the year 6.8 5.2
Depreciation charge for year 1.6 1.5
At the end of the year 8.4 6.7
Net book value at 30 June 5.5 6.8
Ashmore Group plc Annual Report and Accounts 2022 169
168 Ashmore Group plc Annual Report and Accounts 2022 Ashmore Group plc Annual Report and Accounts 2022 169
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

## 17) Trade and other receivables

|   | Group |   | Company  |   |
| --- | --- | --- | --- | --- |
|   |  2022 £m | 2021 £m | 2022 £m | 2021 £m  |
|  Trade debtors | **66.1** | 77.9 | **1.0** | 1.2  |
|  Prepayments | **3.5** | 3.2 | **2.1** | 1.9  |
|  Amounts due from subsidiaries | – | – | **73.8** | 9.1  |
|  Loans due from subsidiaries | – | – | **376.9** | 507.7  |
|  Other receivables | **4.7** | 2.3 | **3.1** | 1.9  |
|  **Total trade and other receivables** | **74.3** | 83.4 | **456.9** | 521.8  |

Group trade debtors include accrued management and performance fees in respect of investment management services provided up to 30 June 2022. Management fees are received in cash when the funds' net asset values are determined, typically every month or every quarter. Performance fees are accrued when crystallised, and amounted to £0.5 million as at 30 June 2022 (30 June 2021: £0.5 million). The majority of fees are deducted from the net asset values of the respective funds by independent administrators and therefore, the credit risk of fee receivables is minimal. As at 30 June 2022, the assessed provision for expected credit losses was immaterial and the Group has not recognised any expected credit losses in the current year (30 June 2021: £nil).

Amounts due from subsidiaries for the Company represent intercompany trading balances that are repayable within one year. Loans due from subsidiaries for the Company include an intercompany loan to a subsidiary related to the provision of funding for seed capital investments and cash invested by the subsidiary in daily-traded investment funds. The intercompany loan is repayable on demand and regularly settled during the year. Under the IFRS 9 expected credit loss model, credit risk is assessed by determining the borrower's capacity to meet contractual cash flow obligations, taking into account the available net assets to repay the intercompany balance in future periods. Expected credit losses are estimated based on the assumption that repayment is demanded at the reporting date. If the borrower has sufficient accessible highly liquid assets available to settle the balance if demanded at the reporting date, the expected credit loss has been assessed to be immaterial. In line with the Company's historical experience, and after consideration of current credit exposures, the Company does not expect to incur any credit losses and has not recognised any expected credit losses in the current year (30 June 2021: £nil).

## 18) Deferred taxation

Deferred tax assets and liabilities recognised by the Group and Company at year end are attributable to the following:

|  Group | 2022 |   |   | 2021  |   |   |
| --- | --- | --- | --- | --- | --- | --- |
|   |  Other temporary differences £m | Share-based payments £m | Total £m | Other temporary differences £m | Share-based payments £m | Total £m  |
|  Deferred tax assets | **12.5** | **20.2** | **32.7** | 7.6 | 27.2 | 34.8  |
|  Deferred tax liabilities | **(8.8)** | – | **(8.8)** | (10.5) | – | (10.5)  |
|   | **3.7** | **20.2** | **23.9** | (2.9) | 27.2 | 24.3  |

|  Company | 2022 |   |   | 2021  |   |   |
| --- | --- | --- | --- | --- | --- | --- |
|   |  Other temporary differences £m | Share-based payments £m | Total £m | Other temporary differences £m | Share-based payments £m | Total £m  |
|  Deferred tax assets | – | **18.2** | **18.2** | – | 25.1 | 25.1  |

Deferred taxes at the balance sheet date reflected in these financial statements have been measured using the relevant enacted or substantively enacted tax rate for the year in which they are expected to be realised or settled.

An increase in the main rate of UK corporation tax from 19% to 25% with effect from 1 April 2023 was enacted in the Finance Act 2021. This rate increase has been taken into account in the calculation of the Group's UK deferred tax assets and liabilities as at 30 June 2022, to the extent that they are expected to reverse after the rate increase comes into effect.

170 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Movement of deferred tax balances
The movement in the deferred tax balances between the balance sheet dates has been reflected in the statement of comprehensive
income as follows:
Other
17) Trade and other receivables temporary Share-based
differences payments Total
Group Company

|  |  |  |  |  | Group | £m | £m | £m |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | 2022 | 2021 | 2022 | 2021 |  |  |  |  |
|  | £m | £m | £m | £m | At 30 June 2020 0.8 22.9 23.7 |  |  |  |
| Trade debtors 66.1 77.9 1.0 1.2 |  |  |  |  | Credited/(charged) to the consolidated statement of comprehensive income (3.6) 4.3 0.7 |  |  |  |
| Prepayments 3.5 3.2 2.1 1.9 |  |  |  |  | Foreign exchange revaluation (0.1) – (0.1) |  |  |  |
| Amounts due from subsidiaries – – 73.8 9.1 |  |  |  |  | At 30 June 2021 |  |  |  |
| Loans due from subsidiaries – – 376.9 507.7 |  |  |  |  | Credited/(charged) to the consolidated statement of comprehensive income 6.0 (7.0) (1.0) |  |  |  |
| Other receivables 4.7 2.3 3.1 1.9 |  |  |  |  | Foreign exchange revaluation 0.6 – 0.6 |  |  |  |
| Total trade and other receivables 74.3 83.4 456.9 521.8 |  |  |  |  | At 30 June 2022 3.7 20.2 23.9 |  |  |  |

(2.9) 27.2 24.3
Group trade debtors include accrued management and performance fees in respect of investment management services provided up to Other
temporary Share-based
30 June 2022. Management fees are received in cash when the funds’ net asset values are determined, typically every month or every
differences payments Total
quarter. Performance fees are accrued when crystallised, and amounted to £0.5 million as at 30 June 2022 (30 June 2021: £0.5 million). Company £m £m £m
The majority of fees are deducted from the net asset values of the respective funds by independent administrators and therefore, the credit
At 30 June 2020 0.1 20.5 20.6
risk of fee receivables is minimal. As at 30 June 2022, the assessed provision for expected credit losses was immaterial and the Group has
Credited/(charged) to the statement of comprehensive income (0.1) 4.6 4.5
not recognised any expected credit losses in the current year (30 June 2021: £nil).
At 30 June 2021 – 25.1 25.1
Amounts due from subsidiaries for the Company represent intercompany trading balances that are repayable within one year. Loans due
Credited/(charged) to the statement of comprehensive income – (6.9) (6.9)
from subsidiaries for the Company include an intercompany loan to a subsidiary related to the provision of funding for seed capital
At 30 June 2022
investments and cash invested by the subsidiary in daily-traded investment funds. The intercompany loan is repayable on demand and
regularly settled during the year. Under the IFRS 9 expected credit loss model, credit risk is assessed by determining the borrower’s
19) Fair value of financial instruments
capacity to meet contractual cash flow obligations, taking into account the available net assets to repay the intercompany balance in future
The Group has an established control framework with respect to the measurement of fair values. This framework includes committees that
periods. Expected credit losses are estimated based on the assumption that repayment is demanded at the reporting date. If the borrower
have overall responsibility for all significant fair value measurements. Each committee regularly reviews significant inputs and valuation – 18.2 18.2
has sufficient accessible highly liquid assets available to settle the balance if demanded at the reporting date, the expected credit loss
adjustments. If third-party information is used to measure fair value, the committee assesses and documents the evidence obtained from
has been assessed to be immaterial. In line with the Company’s historical experience, and after consideration of current credit exposures,
the third parties to support such valuations. There are no material differences between the carrying amounts of financial assets and liabilities
the Company does not expect to incur any credit losses and has not recognised any expected credit losses in the current year
and their fair values at the balance sheet date.
(30 June 2021: £nil).
Fair value hierarchy
18) Deferred taxation
The Group measures fair values using the following fair value levels that reflect the significance of inputs used in making the
Deferred tax assets and liabilities recognised by the Group and Company at year end are attributable to the following:
measurements, based on the degree to which the fair value is observable:
2022 2021
Other Other – Level 1: Valuation is based upon a quoted market price in an active market for an identical instrument. This fair value measure relates
temporary Share-based temporary Share-based
to the valuation of quoted and exchange traded equity and debt securities.
differences payments Total differences payments Total
Group £m £m £m £m £m £m
– Level 2: Valuation techniques are based upon observable inputs, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Deferred tax assets 12.5 20.2 32.7 7.6 27.2 34.8 This fair value measure relates to the valuation of quoted equity securities in inactive markets or in interests in unlisted funds whose
Deferred tax liabilities (8.8) – (8.8) (10.5) – (10.5) net asset values are referenced to the fair values of the listed or exchange traded securities held by those funds. Valuation techniques
may include using a broker quote in an inactive market or an evaluated price based on a compilation of primarily observable market
3.7 20.2 23.9 (2.9) 27.2 24.3
information utilising information readily available via external sources.
2022 2021 – Level 3: Fair value measurements are derived from valuation techniques that include inputs not based on observable market data.
Other
temporary Share-based Other temporary Share-based For financial instruments that are recognised at fair value on a recurring basis, the Group determines whether transfers have occurred
differences payments Total differences payments Total
Company £m £m £m £m £m £m between levels in the hierarchy by reassessing categorisation (based on the lowest level input that is significant to the fair value
measurement as a whole) at the end of the financial year.
Deferred tax assets – 18.2 18.2 – 25.1 25.1
Deferred taxes at the balance sheet date reflected in these financial statements have been measured using the relevant enacted or
substantively enacted tax rate for the year in which they are expected to be realised or settled.
An increase in the main rate of UK corporation tax from 19% to 25% with effect from 1 April 2023 was enacted in the Finance Act 2021.
This rate increase has been taken into account in the calculation of the Group’s UK deferred tax assets and liabilities as at 30 June 2022,
to the extent that they are expected to reverse after the rate increase comes into effect.
Ashmore Group plc Annual Report and Accounts 2022 171
170 Ashmore Group plc Annual Report and Accounts 2022 Ashmore Group plc Annual Report and Accounts 2022 171
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

## 19) Fair value of financial instruments continued

The fair value hierarchy of financial instruments which are carried at fair value at year end is summarised below:

|   | 2022 |   |   |   | 2021  |   |   |   |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|   | Level 1 £m | Level 2 £m | Level 3 £m | Total £m | Level 1 £m | Level 2 £m | Level 3 £m | Total £m  |
|  **Financial assets**  |   |   |   |   |   |   |   |   |
|  Investment securities | **158.8** | **82.7** | **23.6** | **265.1** | 209.0 | 66.7 | 42.4 | 318.1  |
|  Financial assets held for sale | – | – | – | – | 46.2 | – | 46.2 | –  |
|  Financial assets measured at FVTPL | – | **32.3** | – | **32.3** | – | 39.2 | 1.8 | 41.0  |
|  Derivative financial instruments | – | – | – | – | 1.3 | – | 1.3 | –  |
|  Non-current financial assets at fair value | – | – | **39.3** | **39.3** | – | – | 34.0 | 34.0  |
|   | **158.8** | **115.0** | **62.9** | **336.7** | 209.0 | 153.4 | 78.2 | 440.6  |
|  **Financial liabilities**  |   |   |   |   |   |   |   |   |
|  Third-party interests in consolidated funds | **58.4** | **6.3** | **8.3** | **73.0** | 73.7 | 15.1 | 16.9 | 105.7  |
|  Financial liabilities held for sale | – | – | – | – | – | 3.8 | – | 3.8  |
|  Derivative financial instruments | – | **5.2** | – | **5.2** | – | – | – | –  |
|   | **58.4** | **11.5** | **8.3** | **78.2** | 73.7 | 18.9 | 16.9 | 109.5  |

### Transfers between levels

The Group recognises transfers into and transfers out of fair value hierarchy levels at each reporting period based on assessments of price inputs used in the valuation of financial assets. During the year investments with a carrying value of £3.3 million were transferred out of level 3 into level 1 and level 2 as their fair value was determined based on observable prices. There were no transfers between level 1 and level 2 of the fair value hierarchy during the period.

### Fair value measurements using significant unobservable inputs (level 3)

The following table presents the changes in level 3 items for the years ended 30 June 2022 and 2021:

|   | Investment securities £m | Financial assets measured at FVTPL £m | Non-current financial assets at fair value £m | Third-party interests in consolidated funds £m  |
| --- | --- | --- | --- | --- |
|  At 30 June 2020 | 48.8 | 0.7 | 27.9 | 10.4  |
|  Additions | 57.2 | 1.1 | 8.1 | 28.6  |
|  Disposals | (73.8) | (0.4) | (2.5) | (26.9)  |
|  Unrealised gains/(losses) recognised in finance income | 11.9 | 0.4 | 2.2 | 4.8  |
|  Unrealised gains/(losses) recognised in reserves | (1.7) | – | (1.7) | –  |
|  At 30 June 2021 | 42.4 | 1.8 | 34.0 | 16.9  |
|  Additions | – | – | **1.9** | –  |
|  Disposals | **(25.5)** | – | **(1.5)** | **(10.7)**  |
|  Transfers out | **(1.5)** | **(1.8)** | – | –  |
|  Unrealised gains/(losses) recognised in finance income | **4.4** | – | **3.5** | **2.1**  |
|  Unrealised gains/(losses) recognised in reserves | **3.8** | – | **1.4** | –  |
|  **At 30 June 2022** | **23.6** | – | **39.3** | **8.3**  |

172 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Valuation of level 3 financial assets recognised at fair value on a recurring basis using valuation techniques
Investments valued using valuation techniques include financial investments which, by their nature, do not have an externally quoted price
based on regular trades, and financial investments for which markets are no longer active as a result of market conditions, e.g. market
illiquidity. The valuation techniques used include comparison to recent arm’s length transactions, market approach making reference to other
19) Fair value of financial instruments continued instruments that are substantially the same, discounted cash flow analysis, enterprise valuation and net assets approach. These techniques
The fair value hierarchy of financial instruments which are carried at fair value at year end is summarised below: may include a number of assumptions relating to variables such as interest rate and price earnings multiples. Changes in assumptions
relating to these variables could positively or negatively impact the reported fair value of these instruments. When determining the inputs
2022 2021
into the valuation techniques used, priority is given to publicly available prices from independent sources when available, but overall the

|  | Level 1 |  | Level 2 |  | Level 3 |  | Total | Level 1 |  | Level 2 |  | Level 3 |  | Total |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  | £m |  | £m |  | £m | £m |  | £m |  | £m |  | £m | £m | source of pricing is chosen with the objective of arriving at a fair value measurement that reflects the price at which an orderly transaction |
| Financial assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  | would take place between market participants on the measurement date. |

Investment securities 158.8 82.7 23.6 265.1 209.0 66.7 42.4 318.1
The fair value estimates are made at a specific point in time, based upon available market information and judgements about the financial
Financial assets held for sale ––––– 46.2 – 46.2 instruments, including estimates of the timing and amount of expected future cash flows. Such estimates could include a marketability
Financial assets measured at FVTPL – 32.3 – 32.3 – 39.2 1.8 41.0 adjustment to reflect illiquidity and/or non-transferability that could result from offering for sale at one time the Group’s entire holdings of a
particular financial instrument.
Derivative financial instruments ––––– 1.3 – 1.3
Non-current financial assets at fair value – – 39.3 39.3 – – 34.0 34.0 The following tables show the valuation techniques and the significant unobservable inputs used to estimate the fair value of level 3
investments as at 30 June 2022 and 2021, and the associated sensitivity to changes in unobservable inputs to a reasonable alternative.
158.8 115.0 62.9 336.7 209.0 153.4 78.2 440.6
2022 Change in
Financial liabilities
Fair value Significant Range of Sensitivity fair value
Third-party interests in consolidated funds 58.4 6.3 8.3 73.0 73.7 15.1 16.9 105.7 Asset class and valuation technique £m unobservable inputs estimates factor £m
Unquoted securities
Financial liabilities held for sale – – – – – 3.8 – 3.8
EBITDA multiple 10x-15x +/- 1x +/- 0.5
Derivative financial instruments – 5.2 – 5.2 – – – – Market multiple and discount 6.2
Marketability adjustment 20%-30% +/- 5% -/+ 0.4
58.4 11.5 8.3 78.2 73.7 18.9 16.9 109.5
Discount rate 10%-20% +/- 1% -/+ 3.6
Discounted cash flow 26.3
Marketability adjustment 10%-60% +/- 5% -/+ 1.5
Transfers between levels
The Group recognises transfers into and transfers out of fair value hierarchy levels at each reporting period based on assessments of price Unquoted funds
1
inputs used in the valuation of financial assets. During the year investments with a carrying value of £3.3 million were transferred out of Net assets approach 30.4 NAV 1x +/- 5% +/- 1.5
level 3 into level 1 and level 2 as their fair value was determined based on observable prices. There were no transfers between level 1 and
Total level 3 investments 62.9
level 2 of the fair value hierarchy during the period.

| Fair value measurements using significant unobservable inputs (level 3) |  |  | 2021 |  |  |  | Change in |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  | Fair value |  | Significant | Range of | Sensitivity | fair value |  |
| The following table presents the changes in level 3 items for the years ended 30 June 2022 and 2021: | Asset class and valuation technique |  | £m | unobservable inputs | estimates | factor |  | £m |

Unquoted securities
Third-party

|  |  |  | Financial |  |  | Non-current |  |  | interests in |  |  | EBITDA multiple 5x-15x +/- 1x +/- 1.5 |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Investment |  | assets measured |  |  | financial assets at |  |  |  | consolidated |  | Market multiple and discount 23.7 |  |
| securities |  |  | at FVTPL |  |  |  | fair value |  |  | funds |  | Marketability adjustment 5%-95% +/- 5% -/+ 2.9 |
|  | £m |  |  | £m |  |  |  | £m |  | £m |  |  |

Discount rate 10%-20% +/- 5% -/+ 2.9
At 30 June 2020 48.8 0.7 27.9 10.4 Discounted cash flow 13.4
Marketability adjustment 20%-60% +/- 5% -/+ 1.5
Additions 57.2 1.1 8.1 28.6
Unquoted funds
Disposals (73.8) (0.4) (2.5) (26.9)
1
Net assets approach 41.1 NAV 1x +/- 5% +/- 1.9
Unrealised gains/(losses) recognised in finance income 11.9 0.4 2.2 4.8
Total level 3 investments 78.2
Unrealised gains/(losses) recognised in reserves (1.7) – (1.7) –
1. NAV priced assets include seed capital investments whose value is determined by the fund administrator using unobservable inputs. The significant unobservable inputs
At 30 June 2021 42.4 1.8 34.0 16.9
applied include EBITDA, market multiples, last observable vendor price and discount rates.
Additions – – 1.9 –
The sensitivity demonstrates the effect of a change in one unobservable input while other assumptions remain unchanged. There may be a
Disposals (25.5) – (1.5) (10.7)
correlation between the unobservable inputs and other factors that have not been considered. It should also be noted that some of the
Transfers out (1.5) (1.8) – – sensitivities are non-linear, therefore, larger or smaller impacts should not be interpolated or extrapolated from these results.
Unrealised gains/(losses) recognised in finance income 4.4 – 3.5 2.1
Financial instruments not measured at fair value
Unrealised gains/(losses) recognised in reserves 3.8 – 1.4 –
Financial assets and liabilities that are not measured at fair value include cash and cash equivalents, trade and other receivables, and trade
At 30 June 2022 23.6 – 39.3 8.3
and other payables. The carrying value of financial assets and financial liabilities not measured at fair value is considered a reasonable
approximation of fair value as at 30 June 2022 and 2021.
Ashmore Group plc Annual Report and Accounts 2022 173
172 Ashmore Group plc Annual Report and Accounts 2022 Ashmore Group plc Annual Report and Accounts 2022 173
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
20) Seed capital investments
The Group considers itself a sponsor of an investment fund when it facilitates the establishment of a fund in which the Group is the
investment manager. The Group ordinarily provides seed capital in order to provide initial scale and facilitate marketing of the funds to
third-party investors. Aggregate interests held by the Group include seed capital, management fees and performance fees. The Group
generates management and performance fee income from managing the assets on behalf of third-party investors.
The movements of seed capital investments and related items during the year are as follows:
Investment

|  |  |  |  |  | Financial |  | securities |  |  |  | Other |  | Third-party |  |  | Non-current |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  | Financial |  |  | assets |  | (relating to |  |  | (relating to |  |  | interests in |  | financial assets |  |  |  |
|  |  | assets |  | measured at |  |  | consolidated |  |  | consolidated |  |  | consolidated |  |  | measured at |  |  |
|  | held for sale |  |  |  | fair value |  |  | funds) | 1 |  | funds) | 2 |  | funds |  | fair value | 3 | Total |
| Group |  |  | £m |  |  | £m |  | £m |  |  |  | £m |  | £m |  |  | £m | £m |

Carrying amount at 30 June 2020 38.6 11.6 234.5 11.8 (86.1) 28.0 238.4
Reclassification:
HFS investments to consolidated funds (44.1) – 53.8 – (9.7) – –
Consolidated funds to FVTPL – 49.9 (112.0) – 62.1 – –
Additions 42.2 14.4 130.3 – (57.9) 5.6 134.6
Disposals – (41.4) (101.2) – 39.2 (2.6) (106.0)
Fair value movement 5.7 6.5 112.7 (2.2) (53.3) 0.4 69.8
Carrying amount at 30 June 2021 42.4 41.0 318.1 9.6 (105.7) 31.4 336.8
Reclassification:
HFS investments to consolidated funds (39.1) – 40.5 0.4 (1.8) – –
Consolidated funds to FVTPL – 39.1 (59.5) 0.1 20.3 – –
Additions – 5.5 – – – 1.9 7.4
Disposals (0.1) (44.9) (25.5) – 10.2 (1.5) (61.8)
Fair value movement (3.2) (8.4) (8.5) 1.0 4.0 4.7 (10.4)
Carrying amount at 30 June 2022 – 32.3 265.1 11.1 (73.0) 36.5 272.0
1. Investment securities in consolidated funds are measured at FVTPL.
2. Relates to cash and other assets in consolidated funds that are not investment securities, see note 20(d).
3. Excludes £2.8 million of other non-current financial assets measured at fair value that are not classified as seed capital.
174 Ashmore Group plc Annual Report and Accounts 2022
174 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
a) Financial assets and liabilities held for sale
Where Group companies invest seed capital into funds operated and controlled by the Group and the Group is actively seeking to reduce its
investment and it is considered highly probable that it will relinquish control within a year, the interests in the funds are treated as held for
sale and are recognised as financial assets and liabilities held for sale. During the year, none were seeded in this manner (FY2020/21: seven
20) Seed capital investments were seeded, met the above criteria, and consequently the assets and liabilities of these funds were initially classified as held for sale).
The Group considers itself a sponsor of an investment fund when it facilitates the establishment of a fund in which the Group is the
The financial assets and liabilities held for sale at 30 June 2022 were as follows:
investment manager. The Group ordinarily provides seed capital in order to provide initial scale and facilitate marketing of the funds to
2022 2021
third-party investors. Aggregate interests held by the Group include seed capital, management fees and performance fees. The Group
£m £m
generates management and performance fee income from managing the assets on behalf of third-party investors.
Financial assets held for sale – 46.2

| The movements of seed capital investments and related items during the year are as follows: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Financial liabilities held for sale – (3.8) |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  | Investment |  |  |  |  |  |  |  |  |  |  |  | Financial assets held for sale – 42.4 |
|  |  |  |  | Financial | securities |  |  |  | Other |  | Third-party |  |  | Non-current |  |  |  |
|  |  | Financial |  | assets | (relating to |  |  | (relating to |  |  | interests in |  | financial assets |  |  |  |  |
|  |  | assets | measured at |  | consolidated |  |  | consolidated |  |  | consolidated |  |  | measured at |  |  | Investments cease to be classified as held for sale when they are no longer controlled by the Group. A loss of control may happen through |
|  | held for sale |  |  | fair value |  | funds) | 1 |  | funds) | 2 |  | funds |  | fair value | 3 | Total |  |

sale of the investment and/or dilution of the Group’s holding. When investments cease to be classified as held for sale, they are classified
Group £m £m £m £m £m £m £m
as financial assets at FVTPL. No such fund was transferred to the FVTPL category during the year (FY2020/21: none).
Carrying amount at 30 June 2020 38.6 11.6 234.5 11.8 (86.1) 28.0 238.4
If the fund remains under the control of the Group for more than one year from the original investment date, it will cease to be classified
Reclassification:
as held for sale, and will be consolidated line by line after it is assessed that the Group controls the investment fund in accordance with
HFS investments to consolidated funds (44.1) – 53.8 – (9.7) – –
the requirements of IFRS 10. During the year, six such funds (FY2020/21: five) with an aggregate carrying amount of £39.1 million
Consolidated funds to FVTPL – 49.9 (112.0) – 62.1 – –
(FY2020/21: £44.1 million) were transferred from held for sale to consolidated funds category. There was no impact on net assets
Additions 42.2 14.4 130.3 – (57.9) 5.6 134.6
or comprehensive income as a result of the transfer.
Disposals – (41.4) (101.2) – 39.2 (2.6) (106.0)
Included within finance income are losses of £1.1 million (FY2020/21: gains of £10.8 million) in relation to financial assets held for sale.
Fair value movement 5.7 6.5 112.7 (2.2) (53.3) 0.4 69.8
As the Group considers itself to have one segment (refer to note 4), no additional segmental disclosure of held for sale financial assets or
Carrying amount at 30 June 2021 42.4 41.0 318.1 9.6 (105.7) 31.4 336.8
liabilities is applicable.
Reclassification:
HFS investments to consolidated funds (39.1) – 40.5 0.4 (1.8) – – b) Financial assets measured at fair value through profit or loss

|  | Consolidated funds to FVTPL – 39.1 (59.5) 0.1 20.3 – – | FVTPL investments at 30 June 2022 comprise shares held in debt and equity funds as follows: |  |  |
| --- | --- | --- | --- | --- |
| Additions – 5.5 – – – 1.9 7.4 |  |  | 2022 | 2021 |
|  |  |  | £m | £m |

Disposals (0.1) (44.9) (25.5) – 10.2 (1.5) (61.8)
Equity funds 15.5 33.7
Fair value movement (3.2) (8.4) (8.5) 1.0 4.0 4.7 (10.4)
Debt funds 16.8 7.3
Carrying amount at 30 June 2022 – 32.3 265.1 11.1 (73.0) 36.5 272.0
Financial assets measured at fair value 32.3 41.0
1. Investment securities in consolidated funds are measured at FVTPL.
2. Relates to cash and other assets in consolidated funds that are not investment securities, see note 20(d). Included within finance income are losses of £12.5 million (FY2020/21: gains of £8.2 million) on the Group’s financial assets measured
3. Excludes £2.8 million of other non-current financial assets measured at fair value that are not classified as seed capital. at FVTPL.
c) Non-current financial assets measured at fair value
Non-current financial asset investments relate to the Group’s holding in closed-end funds and are measured at FVTPL. Fair value is assessed
by taking account of the extent to which potential dilution of gains or losses may arise as a result of additional investors subscribing to the
fund where the final close of a fund has not occurred.
2022 2021
£m £m
Real estate funds 1.5 1.8
Infrastructure funds 24.1 20.2
Other funds 10.9 9.4
1
Non-current financial assets measured at fair value 36.5 31.4
1. Excludes £2.8 million (30 June 2021: £2.6m) of other non-current financial assets measured at fair value that are not classified as seed capital
Included within finance income are gains of £4.2 million (FY2020/21: gains of £2.2 million) on the Group’s non-current financial assets
measured at fair value.
Ashmore Group plc Annual Report and Accounts 2022 175
174 Ashmore Group plc Annual Report and Accounts 2022 Ashmore Group plc Annual Report and Accounts 2022 175
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

## 20) Seed capital investments continued

### d) Consolidated funds

The Group has consolidated 18 investment funds as at 30 June 2022 (30 June 2021: 14 investment funds), over which the Group is deemed to have control (refer to note 25). Consolidated funds represent seed capital investments where the Group has held its position for a period greater than one year and its interest represents a controlling stake in the fund in accordance with IFRS 10. Consolidated fund assets and liabilities are presented line by line after intercompany eliminations. The table below sets out an analysis of the carrying amounts of interests held by the Group in consolidated investment funds.

|   | 2022 £m | 2021 £m  |
| --- | --- | --- |
|  Investment securities^{1} | **265.1** | 318.1  |
|  Cash and cash equivalents | **10.0** | 10.4  |
|  Other^{2} | **1.1** | (0.8)  |
|  Third-party interests in consolidated funds | **(73.0)** | (105.7)  |
|  **Consolidated seed capital investments** | **203.2** | 222.0  |

1. Investment securities represent trading securities held by consolidated investment funds and are measured at FVTPL. Note 25 provides a list of the consolidated funds by asset class, and further detailed information at the security level is available in the individual fund financial statements.

2. Other includes trade receivables, trade payables and accruals.

The maximum exposure to loss is the carrying amount of the assets held. The Group has not provided financial support or otherwise agreed to be responsible for supporting any consolidated or unconsolidated funds financially.

Included within the consolidated statement of comprehensive income are net losses of £40.5 million (FY2020/21: £72.5 million net gains) relating to the Group's share of the results of the individual statements of comprehensive income for each of the consolidated funds, as follows:

|   | 2022 £m | 2021 £m  |
| --- | --- | --- |
|  Interest and dividend income | **5.7** | 3.3  |
|  Gains/(losses) on investment securities | **(61.3)** | 123.5  |
|  Change in third-party interests in consolidated funds | **16.5** | (52.6)  |
|  Audit fees | **(0.2)** | (0.1)  |
|  Other expenses | **(1.2)** | (1.6)  |
|  **Net gains/(losses) on consolidated funds** | **(40.5)** | 72.5  |

Included in the Group's cash utilised in operations is £2.8 million (FY2020/21: £0.4 million cash generated from operations) relating to consolidated funds.

As of 30 June 2022, the Group's consolidated funds were domiciled in Guernsey, Luxembourg, Saudi Arabia and the United States.

176 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT

GOVERNANCE

FINANCIAL STATEMENTS

## 21) Financial instrument risk management

### Group

The Group is subject to strategic and business, client, investment, treasury and operational risks throughout its business as discussed in the Risk management section. This note discusses the Group's exposure to and management of the following principal risks which arise from the financial instruments it uses: credit risk, liquidity risk, interest rate risk, foreign exchange risk and price risk. Where the Group holds units in investment funds, classified either as financial assets held for sale, FVTPL or non-current financial assets, the related financial instrument risk disclosures in the note below categorise exposures based on the Group's direct interest in those funds without looking through to the nature of underlying securities.

Risk management is the ultimate responsibility of the Board, as noted in the Risk management section on pages 38 to 45.

### Capital management

It is the Group's policy that all entities within the Group have sufficient capital to meet regulatory and working capital requirements and it conducts regular reviews of its capital requirements relative to its capital resources.

In January 2022, the IFPR introduced a new capital adequacy assessment process, with the ICARA replacing the ICAAP. The ICARA shifts much of the focus away from risks that a firm faces towards the harm that it may pose to clients and markets. Ashmore has been reporting under IFPR since 1 January 2022 and will apply the ICARA approach to the calculation of the capital requirement for its UK regulated entity, AIML, in the second half of 2022.

Using a consistent approach to assessing the Group's regulatory capital requirement as was adopted under the ICAAP regime, the Board has determined the Group's capital requirement to be £125.2 million as at 30 June 2022. This is lower than the equivalent prior year figure (30 June 2021: £155.9 million) primarily because of a reduced market risk requirement as a result of the lower market value of seed capital investments.

Ashmore holds total capital resources of £788.7 million as at 30 June 2022, providing an excess of £663.5 million over the Group capital requirement.

### Credit risk

The Group has exposure to credit risk from its normal activities where the risk is that a counterparty will be unable to pay in full amounts when due.

Exposure to credit risk is monitored on an ongoing basis by senior management and the Group's Risk Management and Control function. The Group has a counterparty and cash management policy in place which, in addition to other controls, restricts exposure to any single counterparty by setting exposure limits and requiring approval and diversification of counterparty banks and other financial institutions. The Group's maximum exposure to credit risk is represented by the carrying value of its financial assets measured at amortised cost. The table below lists financial assets subject to credit risk.

|   | Notes | 2022 £m | 2021 £m  |
| --- | --- | --- | --- |
|  Trade and other receivables | 17 | **74.3** | 83.4  |
|  Cash and cash equivalents |  | **552.0** | 456.1  |
|  **Total** |  | **626.3** | 539.5  |

The Group's cash and cash equivalents, comprising short-term deposits with banks and liquidity funds, are predominantly held with counterparties with credit ratings ranging from A to AAAm as at 30 June 2022 (30 June 2021: A+ to AAAm). As at 30 June 2022, the Group held £225.7 million (30 June 2021: £333.5 million) in the Ashmore Global Liquidity Fund.

All trade and other receivables are considered to be fully recoverable at year end. They include fee debtors that arise principally within the Group's investment management business. They are monitored regularly and, historically, default levels have been insignificant. There is no significant concentration of credit risk in respect of fees owing from clients.

Ashmore Group plc Annual Report and Accounts 2022 177
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

## 21) Financial instrument risk management continued

### Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting obligations associated with its financial liabilities that are settled by delivering cash or other financial assets.

In order to manage liquidity risk, there is a Group Liquidity Policy to ensure that there is sufficient access to funds to cover all forecast committed requirements for the next 12 months.

The table below summarises the maturity profile of the Group’s financial liabilities at 30 June 2022 and 30 June 2021 based on contractual undiscounted payments:

#### At 30 June 2022

|   | Within 1 year £m | 1-5 years £m | More than 5 years £m | Total £m  |
| --- | --- | --- | --- | --- |
|  Current trade and other payables | 36.4 | – | – | 36.4  |
|  Lease liabilities | 2.6 | 6.0 | 0.2 | 8.8  |
|  **Total** | **39.0** | **6.0** | **0.2** | **45.2**  |

#### At 30 June 2021

|   | Within 1 year £m | 1-5 years £m | More than 5 years £m | Total £m  |
| --- | --- | --- | --- | --- |
|  Current trade and other payables | 45.5 | – | – | 45.5  |
|  Lease liabilities | 2.5 | 8.1 | 0.5 | 11.1  |
|  **Total** | **48.0** | **8.1** | **0.5** | **56.6**  |

### Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of financial instruments will fluctuate because of changes in market interest rates.

The principal interest rate risk is the risk that the Group will sustain a reduction in interest income through adverse movements in interest rates. This relates to deposits with banks and liquidity funds held in the ordinary course of business. The Group has a cash management policy which monitors cash levels and returns within set parameters on a continuing basis.

Bank and similar deposits held at year end are shown on the consolidated balance sheet as cash and cash equivalents. The effective interest earned on bank and similar deposits during the year is given in the table below:

#### Effective interest rates applicable to bank deposits

|   | 2022 % | 2021 %  |
| --- | --- | --- |
|  Deposits with banks and liquidity funds | 0.41 | 0.23  |

At 30 June 2022, if interest rates over the year had been 50 basis points higher/lower with all other variables held constant, profit before tax for the year would have been £2.5 million higher/lower (FY2020/21: £2.3 million higher/lower), mainly as a result of higher/lower interest on cash balances. An assumption that the fair value of assets and liabilities will not be affected by a change in interest rates was used in the model to calculate the effect on profit before tax.

In addition, the Group is indirectly exposed to interest rate risk where the Group holds seed capital investments in funds that invest in debt securities.

178 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Group
Foreign exchange risk
Foreign exchange risk is the risk that the fair value or future cash flows of financial instruments will fluctuate because of changes in foreign
exchange rates.
21) Financial instrument risk management continued
The Group’s revenue is almost entirely denominated in US dollars, while the majority of the Group’s costs are denominated in Sterling.
Liquidity risk
Consequently, the Group has an exposure to movements in the GBP:USD exchange rate. In addition, the Group operates globally, which
Liquidity risk is the risk that the Group will encounter difficulty in meeting obligations associated with its financial liabilities that are settled
means that it may enter into contracts and other arrangements denominated in local currencies in various countries. The Group also holds
by delivering cash or other financial assets.
a number of seed capital investments denominated mainly in US dollars, Colombian pesos and Indonesian rupiah.
In order to manage liquidity risk, there is a Group Liquidity Policy to ensure that there is sufficient access to funds to cover all forecast
The Group’s policy is to hedge a proportion of the Group’s revenue by using a combination of forward foreign exchange contracts and
committed requirements for the next 12 months.
options for a period of up to two years forward. The Group also sells US dollars at spot rates when opportunities arise.
The table below summarises the maturity profile of the Group’s financial liabilities at 30 June 2022 and 30 June 2021 based on contractual
The table below shows the Group’s sensitivity to a 1% exchange movement in the US dollar, Colombian peso, Indonesian rupiah and the
undiscounted payments:
Euro, net of hedging activities.
2022 2021
At 30 June 2022
Impact on Impact on
More than

|  |  |  |  |  |  |  |  |  | profit | Impact on |  |  |  | profit | Impact on |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Within 1 year |  | 1-5 years |  | 5 years |  | Total |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  | before tax |  |  | equity |  | before tax |  |  | equity |
|  | £m |  | £m |  | £m | £m |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  | Foreign currency sensitivity test |  | £m |  |  | £m |  | £m |  | £m |

Current trade and other payables 36.4 – – 36.4
US dollar +/- 1% 0.4 3.9 0.4 5.3
Lease liabilities 2.6 6.0 0.2 8.8
Colombian peso +/- 1% 0.1 0.2 0.1 0.1
Total 39.0 6.0 0.2 45.2
Indonesian rupiah +/- 1% – 0.1 – 0.1
Euro +/- 1% – – 0.1 0.1
At 30 June 2021
More than
Within 1 year 1-5 years 5 years Total Price risk
£m £m £m £m
Price risk is the risk that the fair value or future cash flows of financial instruments will fluctuate because of market changes.
Current trade and other payables 45.5 – – 45.5
Seed capital
Lease liabilities 2.5 8.1 0.5 11.1
The Group is exposed to the risk of changes in market prices in respect of seed capital investments. Such price risk is borne by the Group
Total 48.0 8.1 0.5 56.6
directly through interests in financial assets measured at fair value or indirectly either through line-by-line consolidation of underlying financial
performance and positions held in certain funds. Details of seed capital investments held are given in note 20.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of financial instruments will fluctuate because of changes in market The Group has procedures defined by the Board governing the appraisal, approval and monitoring of seed capital investments.
interest rates.
At 30 June 2022, a 5% movement in the fair value of these investments would have a £13.6 million (FY2020/21: £16.8 million) impact
The principal interest rate risk is the risk that the Group will sustain a reduction in interest income through adverse movements in interest on net assets and profit before tax.
rates. This relates to deposits with banks and liquidity funds held in the ordinary course of business. The Group has a cash management
Management and performance fees
policy which monitors cash levels and returns within set parameters on a continuing basis.
The Group is also indirectly exposed to price risk in connection with the Group’s management fees, which are based on a percentage of
Bank and similar deposits held at year end are shown on the consolidated balance sheet as cash and cash equivalents. The effective
value of AuM, and fees based on performance. Movements in market prices, exchange and interest rates could cause the AuM to fluctuate,
interest earned on bank and similar deposits during the year is given in the table below:
which in turn could affect fees earned. Performance fee revenues could also be reduced depending upon market conditions.
Effective interest rates applicable to bank deposits Management and performance fees are diversified across a range of investment themes and are not measurably correlated to any single
2022 2021 market index in Emerging Markets. In addition, the policy of having funds with year ends staged throughout the financial year has meant
% %
that in periods of steep market decline, some performance fees have still been recorded. The profitability impact is likely to be less than this,
Deposits with banks and liquidity funds 0.41 0.23
as cost mitigation actions would apply, including the reduction of the variable compensation paid to employees.
At 30 June 2022, if interest rates over the year had been 50 basis points higher/lower with all other variables held constant, profit before tax Using the year end AuM level of US$64.0 billion and applying the year’s average net management fee rate of 39bps, a 5% movement
for the year would have been £2.5 million higher/lower (FY2020/21: £2.3 million higher/lower), mainly as a result of higher/lower interest on in AuM would have a US$12.5 million impact, equivalent to £10.3 million using a year end exchange rate of 1.2145, on management fee
cash balances. An assumption that the fair value of assets and liabilities will not be affected by a change in interest rates was used in the revenues (FY2020/21: US$94.4 billion and applying the year’s average net management fee rate of 41bps, a 5% movement in AuM would
model to calculate the effect on profit before tax. have a US$19.4 million impact, equivalent to £14.0 million using a year end exchange rate of 1.3815, on management fee revenues).
In addition, the Group is indirectly exposed to interest rate risk where the Group holds seed capital investments in funds that invest in
Hedging activities
debt securities.
The Group uses forward and option contracts to hedge its exposure to foreign currency risk. These hedges, which have been assessed as
effective cash flow hedges as at 30 June 2022, protect a proportion of the Group’s revenue cash flows from foreign exchange movements.
The cumulative fair value of the outstanding foreign exchange hedges liability at 30 June 2022 was £5.2 million and is included within the
Group’s derivative financial instrument liabilities (30 June 2021: £1.3 million foreign exchange hedges asset included in derivative
financial assets).
Ashmore Group plc Annual Report and Accounts 2022 179
178 Ashmore Group plc Annual Report and Accounts 2022 Ashmore Group plc Annual Report and Accounts 2022 179
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

## 21) Financial instrument risk management continued

The notional and fair values of foreign exchange hedging instruments were as follows:

|   | 2022 |   | 2021  |   |
| --- | --- | --- | --- | --- |
|   | Notional amount US$m | Fair value assets/ (liabilities) £m | Notional amount US$m | Fair value assets/ (liabilities) £m  |
|  Cash flow hedges |  |  |  |   |
|  Foreign exchange nil-cost option collars | **100.0** | **(5.2)** | 100.0 | 1.3  |
|   | **100.0** | **(5.2)** | 100.0 | 1.3  |

The maturity profile of the Group's outstanding hedges is shown below.

|  Notional amount of option collars maturing: | 2022 US$m | 2021 US$m  |
| --- | --- | --- |
|  Within 6 months | **40.0** | 40.0  |
|  Between 6 and 12 months | **40.0** | 40.0  |
|  Later than 12 months | **20.0** | 20.0  |
|   | **100.0** | 100.0  |

When hedges are assessed as effective, intrinsic value gains and losses are initially recognised in other comprehensive income and later reclassified to comprehensive income as the corresponding hedged cash flows crystallise. Time value in relation to the Group's hedges is excluded from being part of the hedging item and, as a result, the net unrealised loss related to the time value of the hedges is recognised in the consolidated statement of comprehensive income for the year.

An intrinsic value loss of £6.0 million (FY2020/21: £1.2 million gain) on the Group's hedges has been recognised through other comprehensive income and a £0.5 million intrinsic value loss (FY2020/21: £1.8 million intrinsic value gain) was reclassified from equity to the statement of comprehensive income in the year.

Included within the net realised and unrealised hedging gain of £6.3 million (note 7) recognised at 30 June 2022 (30 June 2021: £9.2 million gain) are:

- a £0.5 million loss in respect of foreign exchange hedges covering net management fee income for the financial year ending 30 June 2022 (FY2020/21: £1.8 million gain); and
- a £6.8 million gain in respect of crystallised foreign exchange contracts (FY2020/21: £7.4 million gain).

### Company

The risk management processes of the Company, including those relating to the specific risk exposures covered below, are aligned with those of the Group as a whole unless stated otherwise.

In addition, the risk definitions that apply to the Group are also relevant for the Company.

### Credit risk

The Company's maximum exposure to credit risk is represented by the carrying value of its financial assets. The table below lists financial assets subject to credit risk.

|   | 2022 £m | 2021 £m  |
| --- | --- | --- |
|  Cash and cash equivalents | **159.7** | 86.1  |
|  Trade and other receivables | **456.9** | 521.8  |
|  **Total** | **616.6** | 607.9  |

The Company's cash and cash equivalents comprise short-term deposits held with banks and liquidity funds which have credit ratings ranging from A to AAAm as at 30 June 2022 (30 June 2021: A to AAAm).

All trade and other receivables are considered to be fully recoverable and none were overdue at year end (30 June 2021: none overdue).

### Liquidity risk

The Company's exposure to liquidity risk is not considered to be material and, therefore, no further information is provided.

Details on other commitments are provided in note 29.

180 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Company
Interest rate risk
The principal interest rate risk for the Company is that it could sustain a reduction in interest revenue from bank deposits held in the ordinary
course of business through adverse movements in interest rates.
21) Financial instrument risk management continued
Bank and similar deposits held at year end are shown on the Company’s balance sheet as cash and cash equivalents. The effective interest
The notional and fair values of foreign exchange hedging instruments were as follows:
earned on bank and similar deposits during the year is given in the table below:
2022 2021
Fair value Fair value
Effective interest rates applicable to bank deposits

|  | Notional |  | assets/ |  | Notional | assets/ |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | amount | (liabilities) |  |  | amount | (liabilities) |  |  | 2022 | 2021 |
|  | US$m |  |  | £m | US$m |  | £m |  | % | % |
| Cash flow hedges |  |  |  |  |  |  |  | Deposits with banks and liquidity funds 0.46 0.28 |  |  |

Foreign exchange nil-cost option collars 100.0 (5.2) 100.0 1.3
At 30 June 2022, if interest rates over the year had been 50 basis points higher/lower with all other variables held constant, post-tax profit
100.0 (5.2) 100.0 1.3 for the year would have been £0.6 million higher/lower (FY2020/21: £0.4 million higher/lower), mainly as a result of higher/lower interest on
cash balances. An assumption that the fair value of assets and liabilities will not be affected by a change in interest rates was used in the
The maturity profile of the Group’s outstanding hedges is shown below.
model to calculate the effect on post-tax profits.
2022 2021
Notional amount of option collars maturing: US$m US$m
Foreign exchange risk
Within 6 months 40.0 40.0
The Company is exposed primarily to foreign exchange risk in respect of US dollar cash balances and US dollar-denominated intercompany
Between 6 and 12 months 40.0 40.0 balances. However, such risk is not hedged by the Company.
Later than 12 months 20.0 20.0
At 30 June 2022, if the US dollar had strengthened/weakened by 1% against Sterling with all other variables held constant, profit before tax
100.0 100.0 for the year would have increased/decreased by £3.6 million (FY2020/21: increased/decreased by £4.9 million).
When hedges are assessed as effective, intrinsic value gains and losses are initially recognised in other comprehensive income and later
22) Share capital
reclassified to comprehensive income as the corresponding hedged cash flows crystallise. Time value in relation to the Group’s hedges is
Authorised share capital
excluded from being part of the hedging item and, as a result, the net unrealised loss related to the time value of the hedges is recognised

|  |  |  |  |  | 2022 |  |  |  | 2021 |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| in the consolidated statement of comprehensive income for the year. |  |  | 2022 | Nominal |  |  | 2021 | Nominal |  |
|  |  | Number of |  |  | value | Number |  |  | value |
| An intrinsic value loss of £6.0 million (FY2020/21: £1.2 million gain) on the Group’s hedges has been recognised through other | Group and Company |  | shares |  | £’000 | of shares |  |  | £’000 |
| comprehensive income and a £0.5 million intrinsic value loss (FY2020/21: £1.8 million intrinsic value gain) was reclassified from equity | Ordinary shares of 0.01p each 900,000,000 90 900,000,000 90 |  |  |  |  |  |  |  |  |

to the statement of comprehensive income in the year.
Issued share capital – allotted and fully paid
Included within the net realised and unrealised hedging gain of £6.3 million (note 7) recognised at 30 June 2022 (30 June 2021: £9.2 million
2022 2021
gain) are:

|  |  |  |  | 2022 | Nominal |  |  | 2021 | Nominal |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  | Number of |  |  | value | Number |  |  | value |
| – a £0.5 million loss in respect of foreign exchange hedges covering net management fee income for the financial year ending 30 June 2022 |  | Group and Company |  | shares |  | £’000 | of shares |  |  | £’000 |
|  | (FY2020/21: £1.8 million gain); and | Ordinary shares of 0.01p each 712,740,804 71 712,740,804 71 |  |  |  |  |  |  |  |  |

– a £6.8 million gain in respect of crystallised foreign exchange contracts (FY2020/21: £7.4 million gain).
All the above ordinary shares represent equity of the Company and rank pari passu in respect of participation and voting rights.
Company
At 30 June 2022, there were equity-settled share awards issued under the Omnibus Plan totalling 40,688,833 (30 June 2021: 41,302,176)
The risk management processes of the Company, including those relating to the specific risk exposures covered below, are aligned with shares that have release dates ranging from August 2022 to March 2027. Further details are provided in note 10.
those of the Group as a whole unless stated otherwise.
23) Own shares
In addition, the risk definitions that apply to the Group are also relevant for the Company.
The Trustees of the Ashmore 2004 Employee Benefit Trust (EBT) acquire and hold shares in Ashmore Group plc with a view to facilitating
Credit risk the vesting of share awards. As at 30 June 2022, the EBT owned 55,512,301 (30 June 2021: 52,345,869) ordinary shares of 0.01p with a
nominal value of £5,551 (30 June 2021: £5,235) and shareholders’ funds are reduced by £187.6 million (30 June 2021: £179.8 million)
The Company’s maximum exposure to credit risk is represented by the carrying value of its financial assets. The table below lists financial
in this respect. The EBT is periodically funded by the Company for these purposes.
assets subject to credit risk.
2022 2021
£m £m
Cash and cash equivalents 159.7 86.1
Trade and other receivables 456.9 521.8
Total 616.6 607.9
The Company’s cash and cash equivalents comprise short-term deposits held with banks and liquidity funds which have credit ratings
ranging from A to AAAm as at 30 June 2022 (30 June 2021: A to AAAm).
All trade and other receivables are considered to be fully recoverable and none were overdue at year end (30 June 2021: none overdue).
Liquidity risk
The Company’s exposure to liquidity risk is not considered to be material and, therefore, no further information is provided.
Details on other commitments are provided in note 29.
Ashmore Group plc Annual Report and Accounts 2022 181
180 Ashmore Group plc Annual Report and Accounts 2022 Ashmore Group plc Annual Report and Accounts 2022 181
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
24) Trade and other payables

| Group |  | Group | Company |  | Company |  |
| --- | --- | --- | --- | --- | --- | --- |
| 2022 |  | 2021 |  | 2022 |  | 2021 |
|  | £m | £m |  | £m |  | £m |

Current
Trade payables 15.8 19.3 2.4 2.8
Accruals and provisions 20.6 26.2 11.4 16.6
Amounts due to subsidiaries – – 29.7 83.1
Total trade and other payables 36.4 45.5 43.5 102.5
25) Interests in subsidiaries
Operating subsidiaries held by the Company
There were no movements in investments in subsidiaries held by the Company during the year.
2022 2021
Company £m £m
Cost
At 30 June 2022 and 2021 19.9 19.9
In the opinion of the Directors, the following subsidiary undertakings principally affected the Group’s results or financial position at
30 June 2022. A full list of the Group’s subsidiaries and all related undertakings is disclosed in note 33.
Country of
incorporation/
formation and % of equity
principal place of shares held
Name operation by the Group
Ashmore Investments (UK) Limited England 100.00
Ashmore Investment Management Limited England 100.00
Ashmore Investment Advisors Limited England 100.00
Ashmore Management Company Colombia SAS Colombia 61.20
Ashmore CAF-AM Management Company SAS Colombia 53.66
Ashmore Avenida Investments (Real Estate) LLP Colombia 56.00
Ashmore Management Company Limited Guernsey 100.00
Ashmore Investment Management India LLP India 100.00
PT Ashmore Asset Management Indonesia Tbk Indonesia 60.04
Ashmore Investment Management (Ireland) Limited Ireland 100.00
Ashmore Japan Co. Limited Japan 100.00
Ashmore Investments (Holdings) Limited Mauritius 100.00
Ashmore Investments Saudi Arabia Saudi Arabia 100.00
Ashmore Investment Management (Singapore) Pte. Ltd. Singapore 100.00
Ashmore Investment Management (US) Corporation USA 100.00
Ashmore Investment Advisors (US) Corporation USA 100.00
182 Ashmore Group plc Annual Report and Accounts 2022
182 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Consolidated funds
The Group consolidated the following 18 investment funds as at 30 June 2022 over which the Group is deemed to have control:
Country of % of net
incorporation/ asset value
principal place of held by the
24) Trade and other payables
Name Type of fund operation Group
Group Group Company Company
Ashmore Emerging Markets Debt and Currency Fund Limited Alternatives Guernsey 57.88
2022 2021 2022 2021
£m £m £m £m
Ashmore SICAV Emerging Markets Corporate Debt ESG Fund Corporate debt Luxembourg 100.00
Current
Ashmore SICAV Emerging Markets Equity ESG Fund Equity Luxembourg 99.89
Trade payables 15.8 19.3 2.4 2.8
Ashmore SICAV Emerging Markets Indonesian Equity Fund Equity Luxembourg 100.00
Accruals and provisions 20.6 26.2 11.4 16.6
Ashmore SICAV Emerging Markets Global Small-Cap Equity Fund Equity Luxembourg 41.16
Amounts due to subsidiaries – – 29.7 83.1
Ashmore SICAV Emerging Markets Middle East Equity Fund Equity Luxembourg 88.00
Total trade and other payables 36.4 45.5 43.5 102.5
Ashmore SICAV Emerging Markets IG Total Return Fund Blended debt Luxembourg 100.00
Ashmore SICAV Emerging Markets Total Return ESG Fund Blended debt Luxembourg 99.95
25) Interests in subsidiaries
Ashmore SICAV Emerging Markets Sovereign Debt ESG Fund External debt Luxembourg 100.00
Operating subsidiaries held by the Company
Ashmore SICAV Emerging Markets Volatility-Managed Local Currency Bond Fund Local currency Luxembourg 100.00
There were no movements in investments in subsidiaries held by the Company during the year.
Ashmore SICAV Emerging Markets China Bond Fund Local currency Luxembourg 69.78

|  | 2022 | 2021 |  |
| --- | --- | --- | --- |
| Company | £m | £m | Ashmore Saudi Equity Fund Equity Saudi Arabia 95.78 |
| Cost |  |  | Ashmore Growing Multi Strategy Fund Limited Equity Guernsey 100.00 |
| At 30 June 2022 and 2021 19.9 19.9 |  |  | Ashmore Emerging Markets Equity ESG Fund Equity USA 100.00 |

Ashmore Emerging Markets Short Duration Select Fund Equity USA 100.00
In the opinion of the Directors, the following subsidiary undertakings principally affected the Group’s results or financial position at
Ashmore Emerging Markets Investment Grade Income Fund Corporate debt USA 100.00
30 June 2022. A full list of the Group’s subsidiaries and all related undertakings is disclosed in note 33.
Ashmore Emerging Markets Corporate Debt ESG Fund Corporate debt USA 100.00
Country of

|  |  | incorporation/ |  |  | Ashmore Emerging Markets Local Currency Bond Fund Local currency USA 53.09 |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  | formation and |  | % of equity |  |  |  |  |
|  | principal place of |  |  | shares held |  |  |  |  |
| Name |  |  | operation | by the Group | 26) Investment in associates |  |  |  |
| Ashmore Investments (UK) Limited England 100.00 |  |  |  |  | The Group held an interest in the following associate as at 30 June 2022 that is unlisted: |  |  |  |
| Ashmore Investment Management Limited England 100.00 |  |  |  |  |  | Country of incorporation/ |  | % of equity |
|  |  |  |  |  |  | formation and principal | shares held by |  |

Ashmore Investment Advisors Limited England 100.00
Name Type Nature of business place of operation the Group
Ashmore Management Company Colombia SAS Colombia 61.20
Taiping Fund Management Company Associate Investment management China 5.23%
Ashmore CAF-AM Management Company SAS Colombia 53.66
During the year the Group increased its interest in Ashmore Investment Management India LLP from 30% to 100% through a restructure
Ashmore Avenida Investments (Real Estate) LLP Colombia 56.00
and additional capital injection that resulted in the Group’s interest being reclassified from associate to an investment in a subsidiary.
Ashmore Management Company Limited Guernsey 100.00
During the year the Group’s interest in Taiping Fund Management Company decreased from 8.50% to 5.23% following an issue of
Ashmore Investment Management India LLP India 100.00
additional shares by the investee to other parties. As a result, the Group recognised a gain on dilution of interest amounting to £1.3 million
PT Ashmore Asset Management Indonesia Tbk Indonesia 60.04
which has been reported in the consolidated statement of comprehensive income.
Ashmore Investment Management (Ireland) Limited Ireland 100.00
The movement in the carrying value of investments in associates for the year is provided below:
Ashmore Japan Co. Limited Japan 100.00
2022 2021
Ashmore Investments (Holdings) Limited Mauritius 100.00
Associates £m £m
Ashmore Investments Saudi Arabia Saudi Arabia 100.00
At the beginning of the year 0.9 0.6
Ashmore Investment Management (Singapore) Pte. Ltd. Singapore 100.00
Reclassification (0.2) –
Ashmore Investment Management (US) Corporation USA 100.00
Gain on dilution 1.3 –
Ashmore Investment Advisors (US) Corporation USA 100.00
Share of profit for the year – 0.3
Foreign exchange revaluation 0.1 –
At the end of the year 2.1 0.9
Ashmore Group plc Annual Report and Accounts 2022 183
182 Ashmore Group plc Annual Report and Accounts 2022 Ashmore Group plc Annual Report and Accounts 2022 183
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

## 26) Investment in associates continued

The summarised financial information for the associate is shown below.

|  Associates | 2022 £m | 2021 £m  |
| --- | --- | --- |
|  Total assets | **54.5** | 30.1  |
|  Total liabilities | **(13.3)** | (21.0)  |
|  Net assets | **41.2** | 9.1  |
|  Group's share of net assets | **2.1** | 0.8  |
|  Revenue for the year | **23.5** | 16.8  |
|  Profit for the year | **0.8** | 3.6  |
|  Group's share of profit for the year | **–** | 0.3  |

The carrying value of the investments in associates represents the cost of acquisition subsequently adjusted for share of profit or loss and other comprehensive income or loss. No permanent impairment is believed to exist relating to the associate as at 30 June 2022.

The Group had no undrawn capital commitments (30 June 2021: £nil) to investment funds managed by the associate.

## 27) Interests in structured entities

The Group has interests in structured entities as a result of the management of assets on behalf of its clients. Where the Group holds a direct interest in a closed-ended fund, private equity fund or open-ended pooled fund such as a SICAV, the interest is accounted for either as a consolidated structured entity or as a financial asset, depending on whether the Group has control over the fund or not.

The Group's interest in structured entities is reflected in the Group's AuM. The Group is exposed to movements in AuM of structured entities through the potential loss of fee income as a result of client withdrawals. Outflows from funds are dependent on market sentiment, asset performance and investor considerations. Further information on these risks can be found in the Strategic report.

Considering the potential for changes in AuM of structured entities, management has determined that the Group's unconsolidated structured entities include segregated mandates and pooled funds vehicles. Disclosure of the Group's exposure to unconsolidated structured entities has been made on this basis.

The reconciliation of AuM reported by the Group within unconsolidated structured entities is shown below.

|   | Total AuM US$bn | Less: AuM within consolidated funds US$bn | AuM within unconsolidated structured entities US$bn  |
| --- | --- | --- | --- |
|  30 June 2021 | 94.4 | 0.5 | 93.9  |
|  **30 June 2022** | **64.0** | **0.3** | **63.7**  |

Included in the Group's consolidated management fees of £247.0 million (FY2020/21: £276.4 million) are management fees amounting to £246.0 million (FY2020/21: £275.8 million) earned from unconsolidated structured entities.

The table below shows the carrying values of the Group's interests in unconsolidated structured entities, recognised in the Group balance sheet, which are equal to the Group's maximum exposure to loss from those interests.

|   | 2022 £m | 2021 £m  |
| --- | --- | --- |
|  Management fees receivable | **47.6** | 55.6  |
|  Trade and other receivables | **0.8** | 0.6  |
|  Seed capital investments* | **68.8** | 114.9  |
|  Total exposure | **117.2** | 171.1  |

* Comprise financial assets held for sale, financial assets measured at fair value and non-current financial assets measured at fair value (refer to note 20).

The main risk the Group faces from its beneficial interests in unconsolidated structured entities arises from a potential decrease in the fair value of seed capital investments. The Group's beneficial interests in seed capital investments are disclosed in note 20. Note 21 includes further information on the Group's exposure to market risk arising from seed capital investments.

184 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
28) Related party transactions
Related parties of the Group include key management personnel, close family members of key management personnel, subsidiaries,
associates, joint ventures, Ashmore funds, the EBT and The Ashmore Foundation.

| 26) Investment in associates continued |  |  | Key management personnel – Group and Company |  |  |
| --- | --- | --- | --- | --- | --- |
| The summarised financial information for the associate is shown below. |  |  | The compensation paid to or payable to key management personnel is shown below: |  |  |
|  | 2022 | 2021 |  | 2022 | 2021 |
| Associates | £m | £m |  | £m | £m |
| Total assets 54.5 30.1 |  |  | Short-term benefits 0.8 1.3 |  |  |
| Total liabilities (13.3) (21.0) |  |  | Defined contribution pension costs – – |  |  |
| Net assets 41.2 9.1 |  |  | Share-based payment benefits (note 10) 0.2 2.5 |  |  |
| Group’s share of net assets 2.1 0.8 |  |  | 1.0 3.8 |  |  |

Revenue for the year 23.5 16.8
Short-term benefits include salary and fees, benefits and cash bonus.
Profit for the year 0.8 3.6
Share-based payment benefits represent the cost of equity-settled awards charged to the statement of comprehensive income.
Group’s share of profit for the year – 0.3
Details of the remuneration of Directors are given in the Remuneration report on pages 95 to 126.
The carrying value of the investments in associates represents the cost of acquisition subsequently adjusted for share of profit or loss
During the year, there were no other transactions entered into with key management personnel (FY2020/21: none). Aggregate key
and other comprehensive income or loss. No permanent impairment is believed to exist relating to the associate as at 30 June 2022.
management personnel interests in consolidated funds at 30 June 2022 were £62.7 million (30 June 2021: £80.2 million).
The Group had no undrawn capital commitments (30 June 2021: £nil) to investment funds managed by the associate.
27) Interests in structured entities
The Group has interests in structured entities as a result of the management of assets on behalf of its clients. Where the Group holds a
direct interest in a closed-ended fund, private equity fund or open-ended pooled fund such as a SICAV, the interest is accounted for either as
a consolidated structured entity or as a financial asset, depending on whether the Group has control over the fund or not.
The Group’s interest in structured entities is reflected in the Group’s AuM. The Group is exposed to movements in AuM of structured
entities through the potential loss of fee income as a result of client withdrawals. Outflows from funds are dependent on market sentiment,
asset performance and investor considerations. Further information on these risks can be found in the Strategic report.
Considering the potential for changes in AuM of structured entities, management has determined that the Group’s unconsolidated
structured entities include segregated mandates and pooled funds vehicles. Disclosure of the Group’s exposure to unconsolidated
structured entities has been made on this basis.
The reconciliation of AuM reported by the Group within unconsolidated structured entities is shown below.
Less: AuM within
AuM within unconsolidated
consolidated structured
Total AuM funds entities
US$bn US$bn US$bn
30 June 2021 94.4 0.5 93.9
30 June 2022 64.0 0.3 63.7
Included in the Group’s consolidated management fees of £247.0 million (FY2020/21: £276.4 million) are management fees amounting to
£246.0 million (FY2020/21: £275.8 million) earned from unconsolidated structured entities.
The table below shows the carrying values of the Group’s interests in unconsolidated structured entities, recognised in the Group balance
sheet, which are equal to the Group’s maximum exposure to loss from those interests.
2022 2021
£m £m
Management fees receivable 47.6 55.6
Trade and other receivables 0.8 0.6
Seed capital investments* 68.8 114.9
Total exposure 117.2 171.1
* Comprise financial assets held for sale, financial assets measured at fair value and non-current financial assets measured at fair value (refer to note 20).
The main risk the Group faces from its beneficial interests in unconsolidated structured entities arises from a potential decrease in the fair
value of seed capital investments. The Group’s beneficial interests in seed capital investments are disclosed in note 20. Note 21 includes
further information on the Group’s exposure to market risk arising from seed capital investments.
Ashmore Group plc Annual Report and Accounts 2022 185
184 Ashmore Group plc Annual Report and Accounts 2022 Ashmore Group plc Annual Report and Accounts 2022 185
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

## 28) Related party transactions continued

### Transactions with subsidiaries – Company

Details of transactions between the Company and its subsidiaries are shown below:

|   | 2022 £m | 2021 £m  |
| --- | --- | --- |
|  **Transactions during the year** |  |   |
|  Management fees | **67.2** | 80.7  |
|  Net dividends | **174.0** | 110.1  |
|  Loans repaid by/(advanced to) subsidiaries | **183.8** | (42.9)  |

Amounts receivable or payable to subsidiaries are disclosed in notes 17 and 24 respectively.

### Transactions with Ashmore funds – Group

During the year, the Group received £96.2 million of gross management fees and performance fees (FY2020/21: £124.7 million) from the 99 funds (FY2020/21: 106 funds) it manages and which are classified as related parties. As at 30 June 2022, the Group had receivables due from funds of £5.8 million (30 June 2021: £8.1 million) that are classified as related parties.

### Transactions with the EBT – Group and Company

The EBT has been provided with a loan facility to allow it to acquire Ashmore shares in order to satisfy outstanding unvested share awards. The EBT is included within the results of the Group and the Company. As at 30 June 2022, the loan outstanding was £163.7 million (30 June 2021: £160.0 million).

### Transactions with The Ashmore Foundation – Group and Company

The Ashmore Foundation is a related party to the Group. The Foundation was set up to provide financial grants to worthwhile causes within the Emerging Markets countries in which Ashmore invests and/or operates with a view to giving back to the countries and communities. The Group donated £0.6 million to the Foundation during the year (FY2020/21: £1.0 million).

## 29) Commitments

The Group has undrawn investment commitments relating to seed capital investments as follows:

|  Group | 2022 £m | 2021 £m  |
| --- | --- | --- |
|  Ashmore Andean Fund II, LP | **0.1** | 0.1  |
|  Ashmore Avenida Colombia Real Estate Fund I (Cayman) LP | **0.1** | 0.1  |
|  Ashmore I – CAF Colombian Infrastructure Senior Debt Fund | **6.6** | 6.3  |
|  Ashmore KCH HealthCare Fund II | **1.2** | 2.4  |
|  Ashmore KCH HealthCare LLC | **4.4** | –  |
|  **Total undrawn investment commitments** | **12.4** | 8.9  |

### Company

The Company has undrawn loan commitments to other Group entities totalling £394.1 million (30 June 2021: £203.6 million) to support their investment activities but has no investment commitments of its own (30 June 2021: none).

186 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
30) Non-controlling interests
The Group’s material NCI as at 30 June 2022 was held in PT Ashmore Asset Management Indonesia Tbk (Ashmore Indonesia). Set out
below is summarised financial information and the amounts disclosed are before intercompany eliminations.
40% NCI interest

| 28) Related party transactions continued |  | Ashmore Indonesia |  |  |
| --- | --- | --- | --- | --- |
|  |  |  | 2022 | 2021 |
| Transactions with subsidiaries – Company | Summarised balance sheet |  | £m | £m |

Details of transactions between the Company and its subsidiaries are shown below:
Total assets 23.0 19.6
2022 2021 Total liabilities (6.4) (4.0)
£m £m
Net assets 16.6 15.6
Transactions during the year
Non-controlling interests 13.6 13.0
Management fees 67.2 80.7
Net dividends 174.0 110.1
Summarised statement of comprehensive income
Loans repaid by/(advanced to) subsidiaries 183.8 (42.9)
Net revenue 12.3 10.2
Amounts receivable or payable to subsidiaries are disclosed in notes 17 and 24 respectively.
Profit for the period 5.9 5.0
Other comprehensive income/(loss) 1.6 (2.0)
Transactions with Ashmore funds – Group
During the year, the Group received £96.2 million of gross management fees and performance fees (FY2020/21: £124.7 million) from the Total comprehensive income 7.5 3.0
99 funds (FY2020/21: 106 funds) it manages and which are classified as related parties. As at 30 June 2022, the Group had receivables due Profit allocated to NCI 3.0 1.2
from funds of £5.8 million (30 June 2021: £8.1 million) that are classified as related parties.
Dividends paid to NCI 2.3 1.7
Transactions with the EBT – Group and Company
The EBT has been provided with a loan facility to allow it to acquire Ashmore shares in order to satisfy outstanding unvested share awards. Summarised cash flows
The EBT is included within the results of the Group and the Company. As at 30 June 2022, the loan outstanding was £163.7 million Cash flows from operating activities 6.5 3.6
(30 June 2021: £160.0 million).
Cash flows used in investing activities (3.6) (3.1)
Cash flows used in financing activities (6.3) (4.4)
Transactions with The Ashmore Foundation – Group and Company
Net decrease in cash and cash equivalents (3.4) (3.9)
The Ashmore Foundation is a related party to the Group. The Foundation was set up to provide financial grants to worthwhile causes within
the Emerging Markets countries in which Ashmore invests and/or operates with a view to giving back to the countries and communities.
The Group donated £0.6 million to the Foundation during the year (FY2020/21: £1.0 million).
29) Commitments
The Group has undrawn investment commitments relating to seed capital investments as follows:
2022 2021
Group £m £m
Ashmore Andean Fund II, LP 0.1 0.1
Ashmore Avenida Colombia Real Estate Fund I (Cayman) LP 0.1 0.1
Ashmore I – CAF Colombian Infrastructure Senior Debt Fund 6.6 6.3
Ashmore KCH HealthCare Fund II 1.2 2.4
Ashmore KCH HealthCare LLC 4.4 –
Total undrawn investment commitments 12.4 8.9
Company
The Company has undrawn loan commitments to other Group entities totalling £394.1 million (30 June 2021: £203.6 million) to support their
investment activities but has no investment commitments of its own (30 June 2021: none).
Ashmore Group plc Annual Report and Accounts 2022 187
186 Ashmore Group plc Annual Report and Accounts 2022 Ashmore Group plc Annual Report and Accounts 2022 187
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
31) Principal accounting estimates and judgements
The preparation of the financial statements in conformity with UK-adopted international accounting standards requires the use of certain
accounting estimates, and management to exercise its judgement in the process of applying the Group’s accounting policies. If such
estimates and assumptions, which are based on management’s best judgement at the date of preparation of the financial information,
deviate from actual circumstances, the original estimates and assumptions are modified as appropriate in the period in which the
circumstances change.
There are areas of the financial statements where the use of estimation is important, but where the risk of material adjustment is not
significant, including the assessment of performance conditions attached to certain executive share awards (note 10), assumptions used in
the valuation of level 3 seed capital investments (note 19) and deferred tax assets (note 18). The areas where judgements are made include
the impairment review of goodwill and intangibles (note 15), the calculation of lease assets and liabilities (note 16) and consolidation of seed
capital investments (note 20).
32) Post-balance sheet events
There are no post-balance sheet events that require adjustment or disclosure in the Group consolidated financial statements.
33) Subsidiaries and related undertakings
The following is a full list of the Ashmore Group plc subsidiaries and related undertakings as at 30 June 2022, along with the registered
address and the percentage of equity owned by the Group. Related undertakings comprise significant holdings in associated undertakings,
joint ventures and Ashmore sponsored public funds in which the Group owns greater than 20% interest.
% voting

| Name Classification | interest | Registered address and place of incorporation |  |
| --- | --- | --- | --- |
| Ashmore Group plc Subsidiary 100.00 |  | 61 Aldwych, London WC2B 4AE |  |
| Ashmore Investments (UK) Limited Subsidiary 100.00 |  |  | United Kingdom |

Ashmore Investment Management Limited Subsidiary 100.00
Ashmore Investment Advisors Limited Subsidiary 100.00
Aldwych Administration Services Limited (dormant) Subsidiary 100.00
1
Ashmore Asset Management Limited Subsidiary 100.00
Ashmore Avenida Investments (Real Estate) LLP Subsidiary 56.00
Ashmore Avenida Devco Holding Company Limited Subsidiary 100.00
Ashmore Investment Management (Ireland) Limited Subsidiary 100.00 32 Molesworth Street, Dublin 2, D02 Y512
Ashmore Investment Management India LLP Subsidiary 100.00 507A Kakad Chambers, Dr Annie Besant
Ashmore Investment Advisors (India) Private Limited (in liquidation) Subsidiary 99.82 Road Worli, Mumbai 400 018, India
1. Ashmore Asset Management Limited (registered number 3888504) is exempt from the requirements relating to the audit of accounts under section 479A of the UK
Companies Act 2006.
188 Ashmore Group plc Annual Report and Accounts 2022
188 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
% voting
Name Classification interest Registered address and place of incorporation
Ashmore Investment Management (US) Corporation Subsidiary 100.00 475 Fifth Avenue, 15th Floor
Ashmore Investment Advisors (US) Corporation Subsidiary 100.00 New York, 10017
USA
31) Principal accounting estimates and judgements
Avenida Partners LLC Subsidiary 100.00 200 Park Avenue South
The preparation of the financial statements in conformity with UK-adopted international accounting standards requires the use of certain
Avenida CREF I Manager Cayman LLC Subsidiary 100.00 New York, 10003
accounting estimates, and management to exercise its judgement in the process of applying the Group’s accounting policies. If such
Avenida CREF I Manager LLC Subsidiary 100.00 USA
estimates and assumptions, which are based on management’s best judgement at the date of preparation of the financial information,
deviate from actual circumstances, the original estimates and assumptions are modified as appropriate in the period in which the Avenida A2 Partners LLC Subsidiary 100.00
circumstances change.
Avenida Colombia Member LLC Subsidiary 83.30
There are areas of the financial statements where the use of estimation is important, but where the risk of material adjustment is not Avenida CREF II Partners LLC Subsidiary 100.00
significant, including the assessment of performance conditions attached to certain executive share awards (note 10), assumptions used in Avenida CREF II GP LLC Subsidiary 100.00
the valuation of level 3 seed capital investments (note 19) and deferred tax assets (note 18). The areas where judgements are made include
MCA Partners LLC (in liquidation) Subsidiary 100.00
the impairment review of goodwill and intangibles (note 15), the calculation of lease assets and liabilities (note 16) and consolidation of seed
Avenida REF Holding SA Subsidiary 100.00 Yamandu 1321, 11500
capital investments (note 20).
Avenida CREF II Manager SRL Subsidiary 99.00 Montevideo
32) Post-balance sheet events Uruguay
Avenida CREF Partners SRL Subsidiary 99.00
There are no post-balance sheet events that require adjustment or disclosure in the Group consolidated financial statements.
Avenida CREF II GP SRL Subsidiary 85.00
33) Subsidiaries and related undertakings Ashmore Avenida LatAm Energy Efficient Affordable Housing Subsidiary 100.00 10 rue du Château d’Eau, L-3364
The following is a full list of the Ashmore Group plc subsidiaries and related undertakings as at 30 June 2022, along with the registered Fund III GP Leudelange, Grand Duchy of Luxembourg
address and the percentage of equity owned by the Group. Related undertakings comprise significant holdings in associated undertakings, Ashmore Investment Management (Singapore) Pte. Ltd. Subsidiary 100.00 1 George Street, #15-04, Singapore 049145
joint ventures and Ashmore sponsored public funds in which the Group owns greater than 20% interest.
KCH Cairo Pte. Ltd. Subsidiary 100.00

|  | % voting |  |  |  | th |
| --- | --- | --- | --- | --- | --- |
|  |  |  | PT Ashmore Asset Management Indonesia Tbk Subsidiary 60.04 | Pacific Century Place, 18 | Floor, |
| Name Classification | interest | Registered address and place of incorporation |  |  |  |

SCBD Lot 10, Jl. Jenderal. Sudirman Kav.
Ashmore Group plc Subsidiary 100.00 61 Aldwych, London WC2B 4AE
52-53 Jakarta 12190, Indonesia
Ashmore Investments (UK) Limited Subsidiary 100.00 United Kingdom
Ashmore Management Company Colombia SAS Subsidiary 61.20 Carrera 7 No. 75-66,
Ashmore Investment Management Limited Subsidiary 100.00
Ashmore-CAF-AM Management Company SAS Subsidiary 53.66 Office 701 & 702
Ashmore Investment Advisors Limited Subsidiary 100.00
Bogotá, Colombia
Ashmore Holdings Colombia S.A.S. Subsidiary 100.00
Aldwych Administration Services Limited (dormant) Subsidiary 100.00
Ashmore Investment Advisors Colombia S.A. Subsidiary 100.00
1
Ashmore Asset Management Limited Subsidiary 100.00
Sociedad Fiduciaria
Ashmore Avenida Investments (Real Estate) LLP Subsidiary 56.00
Ashmore Management Backup Company S.A.S Subsidiary 100.00
Ashmore Avenida Devco Holding Company Limited Subsidiary 100.00
Avenida Colombia Management Company SAS Subsidiary 100.00
Ashmore Investment Management (Ireland) Limited Subsidiary 100.00 32 Molesworth Street, Dublin 2, D02 Y512
Ashmore Avenida DP General Partner SAS Subsidiary 100.00
Ashmore Investment Management India LLP Subsidiary 100.00 507A Kakad Chambers, Dr Annie Besant
Ashmore Avenida Back Office SAS Subsidiary 100.00
Ashmore Investment Advisors (India) Private Limited (in liquidation) Subsidiary 99.82 Road Worli, Mumbai 400 018, India
Ashmore Peru Backup Management Subsidiary 100.00 Av. Circunvalación del Club Golf Los Incas
1. Ashmore Asset Management Limited (registered number 3888504) is exempt from the requirements relating to the audit of accounts under section 479A of the UK
No. 134, Torre 1, Of. 505, Surco. Lima, Perú
Companies Act 2006.
Ashmore Japan Co. Limited Subsidiary 100.00 11F, Shin Marunouchi Building 1-5-1
Marunouchi Chiyoda-ku
Tokyo Japan 100-6511
Ashmore Investments (Colombia) SL Subsidiary 100.00 c/ Hermosilla 11, 4ºA, 28001 Madrid, Spain
Ashmore Management (DIFC ) Limited Subsidiary 100.00 Unit L30-07, Level 30, ICD Brookfield Place,
Dubai International Financial Centre, Dubai,
UAE
Ashmore Investment Saudi Arabia Subsidiary 100.00 3rd Floor Tower B, Olaya Towers
Ashmore Saudi Equity Fund Consolidated fund 96.05 Olaya Main Street, Riyadh, Saudi Arabia
Ashmore AISA (Cayman) Limited Subsidiary 100.00 Ugland House, Grand Cayman,
Ashmore Emerging Markets Holdings LLC Subsidiary 100.00 KY1-1104, Cayman Islands
Ashmore Emerging Markets Acquisition Corp 1 Subsidiary 100.00

| AA Development Capital Investment Managers | Subsidiary 55.00 Les Cascades Building |  |  |
| --- | --- | --- | --- |
| (Mauritius) LLC |  | 33 Edith Cavell Street, Port Louis |  |
| Ashmore Investments (Holdings) Limited Subsidiary 100.00 |  |  | Mauritius |

Ashmore Group plc Annual Report and Accounts 2022 189
188 Ashmore Group plc Annual Report and Accounts 2022 Ashmore Group plc Annual Report and Accounts 2022 189
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

### 33) Subsidiaries and related undertakings continued

|  Name | Classification | % voting interest | Registered address and place of incorporation  |
| --- | --- | --- | --- |
|  Ashmore Management Company Limited | Subsidiary | 100.00 | Trafalgar Court  |
|  Ashmore Global Special Situations Fund 3 (GP) Limited | Subsidiary | 100.00 | Les Banques  |
|  Ashmore Global Special Situations Fund 4 (GP) Limited | Subsidiary | 100.00 | St Peter Port  |
|  Ashmore Global Special Situations Fund 5 (GP) Limited | Subsidiary | 100.00 | GY1 3QL  |
|  Ashmore Growing Multi Strategy Fund Limited | Consolidated fund | 100.00 | Guernsey  |
|  Ashmore Emerging Markets Debt and Currency Fund Limited | Consolidated fund | 57.88 |   |
|  Ashmore SICAV Emerging Markets Middle East Equity Fund | Consolidated fund | 88.00 | 10, rue du Chateau d'Eau  |
|  Ashmore SICAV Emerging Markets Sovereign Debt ESG Fund | Consolidated fund | 100.00 | L-3364 Leudelange  |
|  Ashmore SICAV Emerging Markets Corporate Debt ESG Fund | Consolidated fund | 100.00 | Grand-Duchy of Luxembourg  |
|  Ashmore SICAV Emerging Markets China Bond Fund | Consolidated fund | 69.78 |   |
|  Ashmore SICAV Emerging Markets Global Small-Cap Equity Fund | Consolidated fund | 41.16 |   |
|  Ashmore SICAV Emerging Markets IG Total Return Fund | Consolidated fund | 100.00 |   |
|  Ashmore SICAV Emerging Markets Total Return ESG Fund | Consolidated fund | 99.95 |   |
|  Ashmore SICAV Emerging Markets Indonesian Equity Fund | Consolidated fund | 100.00 |   |
|  Ashmore SICAV Emerging Markets Equity ESG Fund | Consolidated fund | 99.89 |   |
|  Ashmore SICAV Emerging Markets Volatility-Managed LCBF | Consolidated fund | 100.00 |   |
|  Ashmore SICAV Emerging Markets IG Short Duration Fund | Significant holding | 31.32 |   |
|  Ashmore SICAV Emerging Markets Multi-Asset Fund | Significant holding | 26.13 |   |
|  Ashmore Emerging Markets Corporate Debt ESG Fund | Consolidated fund | 100.00 | 50 South LaSalle Street  |
|  Ashmore Emerging Markets Investment Grade Income Fund | Consolidated fund | 100.00 | Chicago, Illinois 60603  |
|  Ashmore Emerging Markets Local Currency Bond Fund | Consolidated fund | 53.09 |   |
|  Ashmore Emerging Markets Equity ESG Fund | Consolidated fund | 100.00 |   |
|  Ashmore Emerging Markets Short Duration Select Fund | Consolidated fund | 100.00 |   |
|  Taiping Fund Management Company | Associate | 5.23 | Unit 101, Building No.5, 135 Handan Road, Shanghai, China  |

### Cautionary statement regarding forward-looking statements

It is possible that this document could or may contain forward-looking statements that are based on current expectations or beliefs, as well as assumptions about future events. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as anticipate, target, expect, estimate, intend, plan, goal, believe, will, may, should, would, could or other words of similar meaning.

Undue reliance should not be placed on any such statements because, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results, and the Group's plans and objectives, to differ materially from those expressed or implied in the forward-looking statements. There are several factors that could cause actual results to differ materially from those expressed or implied in forward-looking statements. Among the factors that could cause actual results to differ materially from those described in the forward-looking statements are changes in global, political, economic, business, competitive, market and regulatory forces, future exchange and interest rates, changes in tax rates and future business combinations or dispositions. The Group undertakes no obligation to revise or update any forward-looking statements contained within this document, regardless of whether those statements are affected as a result of new information, future events or otherwise.

190 Ashmore Group plc Annual Report and Accounts 2022
# FIVE-YEAR SUMMARY

STRATEGIC REPORT

GOVERNANCE

FINANCIAL STATEMENTS

|   | 2022 £m | 2021 £m | 2020 £m | 2019 £m | 2018 £m  |
| --- | --- | --- | --- | --- | --- |
|  Management fees | **247.0** | 276.4 | 330.0 | 307.6 | 259.7  |
|  Performance fees | **4.5** | 11.9 | 3.9 | 2.8 | 21.9  |
|  Other revenue | **2.9** | 4.6 | 4.1 | 5.9 | 4.1  |
|  **Total revenue** | **254.4** | 292.9 | 338.0 | 316.3 | 285.7  |
|  Distribution costs | **(3.5)** | (5.5) | (14.5) | (13.3) | (9.2)  |
|  Foreign exchange | **11.6** | 4.3 | 7.0 | 11.3 | (0.2)  |
|  **Net revenue** | **262.5** | 291.7 | 330.5 | 314.3 | 276.3  |
|  Gains/(losses) on investment securities | **(61.3)** | 123.5 | (19.1) | 0.5 | 3.0  |
|  Change in third-party interests in consolidated funds | **16.5** | (52.6) | 7.5 | 3.8 | (2.4)  |
|  Personnel expenses | **(27.8)** | (26.7) | (27.6) | (26.5) | (24.2)  |
|  Variable compensation | **(45.6)** | (53.6) | (55.0) | (57.7) | (48.6)  |
|  Other operating expenses | **(25.1)** | (24.0) | (26.6) | (31.6) | (27.6)  |
|  Total operating expenses | **(98.5)** | (104.3) | (109.2) | (115.8) | (100.4)  |
|  **Operating profit** | **119.2** | 258.3 | 209.7 | 202.8 | 176.5  |
|  Finance income/(expense) | **(2.1)** | 23.9 | 12.0 | 17.4 | 15.2  |
|  Share of profit/(loss) from associates and joint ventures | **1.3** | 0.3 | (0.2) | (0.3) | (0.4)  |
|  **Profit before tax** | **118.4** | 282.5 | 221.5 | 219.9 | 191.3  |
|  Tax expense | **(26.5)** | (40.7) | (36.8) | (38.4) | (37.8)  |
|  **Profit for the year** | **91.9** | 241.8 | 184.7 | 181.5 | 153.5  |
|  EPS (basic) | **13.4p** | 36.4p | 27.4p | 26.6p | 22.6p  |
|  Dividend per share | **16.9p** | 16.9p | 16.9p | 16.7p | 16.7p  |
|  **Other operating data (unaudited)** |  |  |  |  |   |
|  AuM at year end (US$bn) | **64.0** | 94.4 | 83.6 | 91.8 | 73.9  |
|  Average AuM (US$bn) | **83.6** | 90.0 | 89.6 | 80.5 | 69.2  |
|  Average GBP:USD exchange rate for the year | **1.33** | 1.35 | 1.26 | 1.30 | 1.35  |
|  Period end GBP:USD exchange rate for the year | **1.21** | 1.38 | 1.24 | 1.27 | 1.32  |

Ashmore Group plc Annual Report and Accounts 2022 191
ALTERNATIVE PERFORMANCE MEASURES

Ashmore discloses APMs in order to assist shareholders' understanding of the operational performance of the Group during the accounting period and to allow consistent comparisons with prior periods.

The calculation of APMs is consistent with the financial year ended 30 June 2021. Historical disclosures relating to APMs, including explanations and reconciliations, can be found in the respective interim financial reports and Annual Reports and Accounts.

### Net revenue

As shown in the CSCI, net revenue is total revenue less distribution costs and including FX. This provides a comprehensive view of the revenues recognised by the Group in the period.

|   | Reference | FY2021/22 £m | FY2020/21 £m  |
| --- | --- | --- | --- |
|  Total revenue | CSCI | **254.4** | 292.9  |
|  Less: |  |  |   |
|  Distribution costs | CSCI | **(3.5)** | (5.5)  |
|  Add: |  |  |   |
|  Foreign exchange | CSCI | **11.6** | 4.3  |
|  Net revenue |  | **262.5** | 291.7  |

### Net management fees

The principal component of the Group's revenues is management fees, net of associated distribution costs, earned on AuM.

|   | Reference | FY2021/22 £m | FY2020/21 £m  |
| --- | --- | --- | --- |
|  Management fees | CSCI | **247.0** | 276.4  |
|  Less: |  |  |   |
|  Distribution costs | CSCI | **(3.5)** | (5.5)  |
|  Net management fees |  | **243.5** | 270.9  |

### Net management fee margin

The net management fee margin is defined as the ratio of annualised management fees less distribution costs to average AuM for the period, in US$ since it is the primary currency in which fees are received and matches the Group's AuM disclosures. The average AuM excludes assets where fees are not recognised in revenues, for example AuM related to associates and joint ventures. The margin is a principal measure of the firm's revenue generating capability and is a commonly used industry performance measure.

|   | FY2021/22 | FY2020/21  |
| --- | --- | --- |
|  Net management fee income (US$m) | **323.4** | 367.1  |
|  Average AuM (US$bn) | **82.8** | 89.4  |
|  Net management fee margin (bps) | **39** | 41  |

### Variable compensation ratio

The variable compensation ratio is defined as the charge for VC as a proportion of EBVCIT. The linking of variable annual pay awards to the Group's profitability is one of the principal methods by which the Group controls its operating costs. The charge for VC is a component of personnel expenses and comprises share-based payments and performance-related cash bonuses.

EBVCIT is operating profit excluding the charge for VC, charitable donations and seed capital-related items. The latter comprises gains/losses on investment securities, change in third-party interests in consolidated funds, and other expenses in respect of consolidated funds.

|   | Reference | FY2021/22 £m | FY2020/21 £m  |
| --- | --- | --- | --- |
|  Operating profit | CSCI | **119.2** | 258.3  |
|  Less: |  |  |   |
|  Seed capital-related items | CSCI, Note 20d | **46.2** | (69.2)  |
|  Add: |  |  |   |
|  Variable remuneration | Note 9 | **45.6** | 53.6  |
|  Charitable donations |  | **0.6** | 1.0  |
|  EBVCIT |  | **211.6** | 243.7  |
|  VC ratio |  | **21.5%** | 22.0%  |

192 Ashmore Group plc Annual Report and Accounts 2022
STRATEGIC REPORT

GOVERNANCE

FINANCIAL STATEMENTS

## EBITDA

EBITDA provides a view of the operating performance of the business before certain non-cash items, financing income and charges, and taxation.

|   | Reference | FY2021/22 £m | FY2020/21 £m  |
| --- | --- | --- | --- |
|  Operating profit | CSCI | **119.2** | 258.3  |
|  Add: |  |  |   |
|  Depreciation & amortisation | Note 11 | **3.1** | 2.8  |
|  EBITDA |  | **122.3** | 261.1  |

### Adjusted net revenue, adjusted operating costs and adjusted EBITDA

Adjusted figures exclude items relating to FX translation and seed capital. This provides an alternative view of performance, excluding the volatility associated with those items, which is used by management to assess the Group's operating performance.

|   | Reference | FY2021/22 £m | FY2020/21 £m  |
| --- | --- | --- | --- |
|  Net revenue | CSCI | **262.5** | 291.7  |
|  Less: |  |  |   |
|  Foreign exchange translation | Note 7 | **(5.3)** | 4.9  |
|  Adjusted net revenue |  | **257.2** | 296.6  |

|   | Reference | FY2021/22 £m | FY2020/21 £m  |
| --- | --- | --- | --- |
|  Personnel expenses | CSCI | **(73.4)** | (80.3)  |
|  Other expenses | CSCI | **(25.1)** | (24.0)  |
|  Less: |  |  |   |
|  Other expenses in consolidated funds | Note 20d | **1.4** | 1.7  |
|  Add: |  |  |   |
|  VC % on foreign exchange translation | Note 7 | **1.1** | (1.1)  |
|  Adjusted operating costs |  | **(96.0)** | (103.7)  |

|   | Reference | FY2021/22 £m | FY2020/21 £m  |
| --- | --- | --- | --- |
|  EBITDA |  | **122.3** | 261.1  |
|  Less: |  |  |   |
|  Foreign exchange translation | Note 7 | **(5.3)** | 4.9  |
|  VC % on foreign exchange translation |  | **1.1** | (1.1)  |
|  Seed capital-related items | CSCI, Note 20d | **46.2** | (69.2)  |
|  Adjusted EBITDA |  | **164.3** | 195.7  |

### Adjusted EBITDA margin

The ratio of adjusted EBITDA to adjusted net revenue, both of which are defined and reconciled above. This is an appropriate measure of the Group's operational efficiency and its ability to generate returns for shareholders.

Ashmore Group plc Annual Report and Accounts 2022 193
ALTERNATIVE PERFORMANCE MEASURES (CONTINUED)

### Adjusted diluted EPS

Diluted EPS excluding items relating to FX translation and seed capital, as described above, and the related tax impact.

|   | Reference | FY2021/22 pence | FY2020/21 pence  |
| --- | --- | --- | --- |
|  Diluted EPS | CSCI | **12.6** | 34.2  |
|  Less: |  |  |   |
|  Foreign exchange translation | Note 7 | **(0.6)** | 0.6  |
|  Tax on foreign exchange translation (19%) |  | **0.1** | (0.1)  |
|  Seed capital-related items | CSCI, Note 8, Note 20d | **7.1** | (13.2)  |
|  Tax on seed capital-related items |  | **(0.5)** | 1.8  |
|  Adjusted diluted EPS |  | **18.7** | 23.3  |

### Conversion of operating profits to cash

This compares cash generated from operations, excluding consolidated funds, to adjusted EBITDA, and is a measure of the effectiveness of the Group's operations in converting profits to cash flows for shareholders. Excluding consolidated funds also ensures consistency between the cash flow and adjusted EBITDA.

|   | Reference | FY2021/22 £m | FY2020/21 £m  |
| --- | --- | --- | --- |
|  Cash generated from operations | Consolidated cash flow statement | **182.1** | 213.5  |
|  Less: |  |  |   |
|  Cash flows relating to consolidated funds | Note 20d | **2.8** | (0.4)  |
|  Operating cash flow |  | **184.9** | 213.1  |
|  Adjusted EBITDA |  | **164.3** | 195.7  |
|  Conversion of operating profits to cash |  | **113%** | 109%  |

### Capital resources

Ashmore has calculated its capital resources in a manner consistent with the ICAAP regime. Note that goodwill and intangible assets include deferred acquisition costs and foreseeable dividends relate to the proposed final dividend of 12.1 pence per share.

|   | Reference | 30 June 2022 £m | 30 June 2021 £m  |
| --- | --- | --- | --- |
|  Total equity | Balance sheet | **966.8** | 932.7  |
|  Less deductions: |  |  |   |
|  Goodwill and intangibles | Balance sheet | **(91.3)** | (81.0)  |
|  Investments in associates | Balance sheet | **(2.1)** | (0.9)  |
|  Foreseeable dividends | Note 14 | **(84.7)** | (85.7)  |
|  Capital resources |  | **788.7** | 765.1  |

194 Ashmore Group plc Annual Report and Accounts 2022
INFORMATION FOR SHAREHOLDERS
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS

| Ashmore Group plc | Registrar |
| --- | --- |
| Registered in England and Wales. | Equiniti Registrars |
| Company No. 3675683 | Aspect House |

Spencer Road
Registered office
West Sussex
61 Aldwych BN99 6DA
London WC2B 4AE
UK shareholder helpline: +44 (0) 371 384 2812. Lines are open
Tel: +44 (0) 20 3077 6000
8.30am to 5.30pm, Monday to Friday.
Fax: +44 (0) 20 3077 6001
International shareholder helpline: +44 121 415 7047.
Principal UK trading subsidiary
Further information about the Registrar is available on its website
Ashmore Investment Management Limited www.equiniti.com.
Registered in England and Wales, Company No. 3344281. Up-to-date information about current holdings on the register is
also available at www.shareview.co.uk.
Business address and registered office as above.
Shareholders will need their reference number (account number)
Further information on Ashmore can be found
and postcode to view information on their own holding.
on the Company’s website: www.ashmoregroup.com.
Share price information
Financial calendar Share price information can be found at www.ashmoregroup.com
or through your broker.
First quarter AuM statement 14 October 2022
Annual General Meeting 14 October 2022 Share dealing
Ex-dividend date 3 November 2022 Shares may be sold through a stockbroker or share dealing service.
There are a variety of services available. The Registrar offers an
Record date 4 November 2022
internet-based share dealing service known as Shareview Dealing.
Final dividend payment date 9 December 2022
You can log on at www.shareview.co.uk/dealing to access this
Second quarter AuM statement January 2023
service, or contact the helpline on +44 (0) 345 603 7037 to deal
Announcement of unaudited interim February 2023 bytelephone.
results for the six months ended
You may also use the Shareview service to access and manage
31December 2022
your share investments and view balance movements, indicative

| Third quarter AuM statement April 2023 |  | share prices, information on recent dividends, portfolio valuation |
| --- | --- | --- |
| Fourth quarter AuM statement July 2023 |  | and general information for shareholders. |
| Announcement of results for the year | September 2023 | Shareholders must register at www.shareview.co.uk, entering |
| ended 30 June 2023 |  | the shareholder reference on the share certificate and other |

personal details.
Having selected a personal PIN, a user ID will be issued by
theRegistrar.
Electronic copies of the 2022 Annual Report and
Accounts and other publications
Copies of the 2022 Annual Report and Accounts, the Notice of
Annual General Meeting, other corporate publications, press
releases and announcements are available on the Company’s
website at www.ashmoregroup.com.
Ashmore Group plc Annual Report and Accounts 2022 195
INFORMATION FOR SHAREHOLDERS (CONTINUED)

### **Sharegift**

Shareholders with only a small number of shares whose value makes them uneconomic to sell may wish to consider donating to charity through Sharegift, an independent charity share donation scheme.

For further information, please contact either the Registrar or see the Sharegift website at www.sharegift.org.

### **Frequent shareholder enquiries**

Enquiries and notifications concerning dividends, share certificates or transfers and address changes should be sent to the Registrar; the Company's governance reports, corporate governance guidelines and the terms of reference of the Board committees can be found on the Company's website at www.ashmoregroup.com.

### **Notifying the Company of a change of address**

You should notify Equiniti Registrars in writing.

If you hold shares in joint names, the notification to change address must be signed by the first-named shareholder. You may choose to do this online, by logging on to www.shareview.co.uk. You will need your shareholder reference number to access this service – this can be found on your share certificate or from a dividend counterfoil.

You will be asked to select your own PIN and a user ID will be posted to you.

### **Notifying the Company of a change of name**

You should notify Equiniti Registrars in writing of your new name and previous name. You should attach a copy of your marriage certificate or your change of name deed, together with your share certificates and any un-cashed dividend cheques in your old name, so that the Registrar can reissue them.

### **Dividend payments directly into bank or building society accounts**

We recommend that all dividend payments are made directly into a bank or building society account. Dividends are paid via BACS, providing tighter security and access to funds more quickly. To apply for a dividend mandate form, contact the Registrar, or you can find one by logging on to www.shareview.co.uk (under Frequently Asked Questions) or by calling the helpline on +44 (0) 371 384 2812 (lines are open 8.30am to 5.30pm, Monday to Friday).

International shareholder helpline: +44 121 415 7047.

### **Transferring Ashmore Group plc shares**

Transferring some or all of your shares to someone else (for example your partner or a member of your family) requires completion of a share transfer form, which is available from Equiniti Registrars. The form should be fully completed and returned with your share certificate representing at least the number of shares being transferred. The Registrar will then process the transfer and issue a balance share certificate to you if applicable. The Registrar will be able to help you with any questions you may have.

### **Lost share certificate(s)**

Shareholders who lose their share certificate(s) or have their certificate(s) stolen should inform Equiniti Registrars immediately by calling the shareholder helpline on +44 (0) 371 384 2812 (lines are open 8.30am to 5.30pm, Monday to Friday).

International shareholder helpline: +44 121 415 7047.

### **Disability helpline**

For shareholders with hearing difficulties, a special text phone number is available: +44 (0) 371 384 2255.

196 Ashmore Group plc Annual Report and Accounts 2022
GLOSSARY
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
AGM Annual General Meeting
APM Non-GAAP financial Alternative Performance Measures
Ashmore Ashmore Group plc
AuM Assets under management
BCP Business continuity planning
CEMBI J.P. Morgan Corporate Emerging Markets Bond Index
CEMBI BD J.P. Morgan CEMBI Broad Diversified Core Index
CEO Chief Executive Officer
CO 2 e Carbon Dioxide equivalent
Code 2018 UK Corporate Governance Code
Companies Act UK Companies Act 2006
Company Ashmore Group plc
CPI Consumer Price Index
CSCI Consolidated statement of comprehensive income
DTR FCA’s Disclosure Guidance and Transparency Rules
EBIT Earnings before income tax
EBITDA Earnings before interest, tax, depreciation and amortisation
EBT Ashmore 2004 Employee Benefit Trust
EBVCIT Earnings before variable compensation, interest and tax
ECB European Central Bank
ELMI+ J.P. MorganEmerging Local Markets Index Plus
EM Emerging markets
EMBI J.P. Morgan Emerging Market Bond Index
EMBI GD J.P. Morgan Emerging Market Bond Index Global Diversified
EMTA Trade Association for the Emerging Markets
EPS Earnings per share
ESEF European Single Electronic Format Regulation
ESG Environmental, social and governance
ESGC ESG Committee
FCA Financial Conduct Authority of the United Kingdom
Fed Federal Reserve of the United States of America
FRC Financial Reporting Council
®
FSC Forest Stewardship Council
FTE Full time equivalent
FX Foreign exchange
GAAP Generally accepted accounting principle
GBI-EM J.P. Morgan Government Bond Index – Emerging Markets
GBI-EM GD J.P. Morgan Government Bond Index – Emerging Markets Global Diversified
GBP British pound sterling, the official currency of the United Kingdom and its territories
GDPR General Data Protection Regulations
GFD Group Finance Director
GHG Greenhouse gas
GIPS Global investment performance standards
Ashmore Group plc Annual Report and Accounts 2022 197
GLOSSARY (CONTINUED)
Group Ashmore Group plc and its subsidiaries
Guidance FRC’s Guidance on Risk Management, Internal Control and Related Financial and Business Reporting 2014
HY High yield
ICAAP Internal Capital Adequacy Assessment Process
ICARA Internal Capital and Risk Assessment
IEA International Energy Agency
IFC International Finance Corporation
IFPR Investment Firms Prudential Regime
IFRS International Financial Reporting Standards
IG Investment grade
IMF International Monetary Fund
ISAE 3402 International Standards on Assurance Engagements 3402
KPI Key performance indicators
KRI Key risk indicator
NGOs Non-governmental organisations
NZAMI Net Zero Asset Managers Initiative
NZAOA Net Zero Asset Owner Alliance
NZE Net Zero Emissions
PASI Principal Adverse Sustainability Impact
PMI Purchasing managers index
PPP Purchasing power parity
QE Quantitative easing
RCC The Group’s Risk and Compliance Committee
Remuneration report Directors’ Remuneration policy and the Annual Report on Remuneration
Scope 1 Direct emissions from owned or controlled sources, including fuel consumption, fugitive emissions and
vehicle usage
Scope 2 Indirect GHG emissions from the generation of purchased electricity
Scope 3 Indirect GHG emissions including air travel, hotels, water and waste
SDGs United Nations Sustainable Development Goals
SECR Streamlined Energy and Carbon Reporting
SSAE 18 Statement on Standards for Attestation Engagements no. 18
TCF Treating customers fairly
TCFD Financial Stability Board’s Task Force on Climate-related Financial Disclosures
UN GC United Nations Global Compact
UN PRI United Nations Principles for Responsible Investment
US$ US dollar, the official currency of the United States of America
VC Employee variable compensation
WACI Weighted Average Carbon Intensity
WBCSD World Business Council for Sustainable Development
WRI World Resources Institute
YoY Year on year
198 Ashmore Group plc Annual Report and Accounts 2022
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### Ashmore Group plc Annual Report and Accounts 2022
### Ashmore Group plc
### 61 Aldwych
### London WC2B 4AE
### United Kingdom
### www.ashmoregroup.com