![Graphics]() ### COURAGE · POWER · PRIDE ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 LIONTRUST ASSET MANAGEMENT PLC ![Graphics]() #### OUR PURPOSE To help clients enjoy a better financial future through the power of active management and distinct investment processes. #### INSIDE THIS REPORT Financial highlights Highlights and Key performance measures 4 Strategic Report Chair’s Statement 12 Chief Executive Officer’s report 14 Our Strategy 16 Our Business Model 23 Financial review 28 Principal Risks and Mitigations 38 Our People 54 Responsible Capitalism 62 Governance Board of Directors 70 Risk management and internal controls report 75 Corporate Governance report 78 Directors’ report 89 Directors’ responsibility statement 94 Nomination Committee report 96 Audit & Risk Committee report 102 Remuneration report 106 Financial Statements – Group and Company Consolidated Statement of Comprehensive Income 148 Consolidated Balance Sheet 149 Consolidated Cash Flow Statement 150 Consolidated Statement of Changes in Equity 151 Notes to the Financial Statements 152 Company Financial Statements 186 Company Notes to the Financial Statements 189 Independent auditor’s report to the members of Liontrust Asset Management PLC 194 Shareholder Information 201 Glossary 202 2 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 ![Graphics]() 3 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 ![Graphics]() #### HIGHLIGHTS ASSETS UNDER MANAGEMENT AND ADVICE\* NET FLOWS\* 12% PROFIT/ (LOSS) BEFORE TAX 101% 2024 £(0.6)m 2023 £49.3m ADJUSTED PROFIT BEFORE TAX\* 23% 2024 £67.4 m 2023 £87.1m TOTAL DIVIDEND PER SHARE 0% 2024 72 pence 2023 72 pence GROSS PROFIT 19% 2024 £186.1m 2023 £229.8m ADJUSTED DILUTED EARNINGS PER SHARE\* 28% 2024 79.16 pence 2023 109.78 pence DILUTED EARNINGS PER SHARE 109% 2024 (5.46) pence 2023 61.21 pence \*These are Alternative Performance Measures. The disclosure, definition and nature of adjustments to GAAP measures to the disclosed APMs is a judgement made by management and is a matter referred to the Audit & Risk Committee for approval prior to issuing the financial statements. See Page 32 for further details. 4 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL HIGHLIGHTS ## £27,822 million £(6,083) million ## £31,430 million £(4,841) million 2023 2023 2024 2024 31 March 31 March 31 March 31 March ![Graphics]() #### ASSETS UNDER MANAGEMENT AND ADVICE On 31 March 2024, our AuMA stood at £27,822 million and were broken down by type and investment process as follows: Process Total (£m) Institutional Accounts & Funds (£m) Investment Trusts (£m) UK Retail Funds & MPS (£m) Alternative Funds (£m) International Funds & Accounts (£m) Sustainable Investment 10,433 323 – 9,624 – 486 Economic Advantage 6,571 450 – 5,998 – 123 Multi–Asset 4,344 – – 4,220 124 – Global Innovation 827 – – 827 – – Cashflow Solution 2,184 556 – 1,404 112 112 Global Fundamental\* 1 3,267 412 1,135 1,706 – 14 Global Fixed Income 196 – – 36 – 160 Total 27,822 1,741 1,135 23,815 236 895 1 The Global Fundamental Global Equity Funds moved to Mark Hawtin’s new Global Equity Team in May 2024. #### NET FLOWS The net outflows over the Financial Year were £6,083 million (2023: £4,841 million). A reconciliation of fund flows and AuMA over the Financial Year is as follows: Total Institutional Accounts & Funds Investment Trusts UK Retail Funds & MPS Alternative Funds International Funds & Accounts £m £m £m £m £m £m Opening AuMA – 1 April 2023 31,430 2,394 1,139 25,721 1,084 1,092 Net flows (6,083) (925) (92) (3,999) (821) (246) Market and Investment performance 2,475 272 88 2,093 (27) 49 Closing AuMA – 31 Mar 2024 27,822 1,741 1,135 23,815 236 895 5 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL HIGHLIGHTS ![Graphics]() #### KEY PERFORMANCE MEASURES Fund management ability and investment performance The strength of Liontrust’s fund managers and investment processes is shown by the fact that over the period from launch or fund manager appointment to the end of each of the last three financial years, on an AuMA weighted basis, we have had over 60% or more of our actively managed UK retail AuMA in first quartile funds (see Figure 1). Figure 1 – AuMA weighted quartile ranking since launch or manager inception (covers 75% of AuMA). 1 net of fees and income reinvested. Net flows\* Net flows in the year falling to £(6,083) million from +£2,488 million two years ago and from £(4,841) million last year. Figure 2 – Net flows £’million AuMA\* Our AuMA has decreased by 12% from 31 March 2023 to 31 March 2024 and decreased by 17% from 31 March 2022 to 31 March 2024, reflecting market performance and net flows (see figure 3). Figure 3 – AuMA by investor type £’million Adjusted profit before tax\* Our adjusted profit before tax has decreased by 23% from 31 March 2023 to 31 March 2024 and by 30% from 31 March 2022 to 31 March 2024. Figure 4 – Adjusted profit before tax £’million 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 £4,000 £3,000 £2,000 £1,000 £0 (£1,000) (£2,000) (£3,000) (£4,000) (£5,000) (£6,000) (£7,000) FY22 FY23 FY24 100 80 60 40 20 0 FY22 FY23 FY24 FY22 FY23 FY24 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% FY22 FY23 FY24 First Quartile Second Quartile Third Quartile Fourth Quartile UK Retail Funds & MPS (£’m) Institutional Accounts & Funds (£’m) Investment trusts (£’m) Alternative Funds (£’m) International Funds & Accounts (£’m) \*These are Alternative Performance Measures. The disclosure, definition and nature of adjustments to GAAP measures to the disclosed APMs is a judgement made by management and is a matter referred to the Audit & Risk Committee for approval prior to issuing the financial statements. See Page 32 for further details. 6 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL HIGHLIGHTS ![Graphics]() Financial Adviser 37% UK Retail Funds & MPS 86% Instl. Accounts & Funds 6% Investment Trusts 4% Int. Funds & Accounts 3% Alternative Funds 1% Wealth Manager 17% Life & Pensions 15% Institutional 10% D2C/Execution only 8% Platform 8% Fund Manager 4% Other 2% BY CLIENT TYPE BY PRODUCT TYPE £ 2 7. 8 b n #### AuMA #### FUND PERFORMANCESPLIT OF AUMA Source: Liontrust, FE Analytics,31.03.24. Share classes are total return, net of fees, income reinvested. Quartiles as at 31.03.24, generated on 17.04.24. Details of the benchmarks can be found on the fund pages of the Liontrust website. Single strategy Liontrust funds both UK and offshore funds versus benchmark and those given an FE Analytics benchmark. 0 20 40 60 80 100 20242023202220212020 0 20 40 60 80 100 20242023202220212020 0 20 40 60 80 100 20242023202220212020 0 20 40 60 80 100 20242023202220212020 1 year 3 years 5 years Since inception / manager inception 44.2% (19) 63.2% (24) 50.0% (17) 52.3% (23) 28.9% (13) 52.6% (20) 73.0% (27) 54.5% (24) 24.5% (13) 48.8% (21) 5 7.9 % (22) 55.6% (25) 13.0% (6) 17. 8 % (8) 44.7% (17) 42.2% (19) 54.3% (25) 24.4% (11) 37.2 % (11) 44.7% (21) 23.9% (11) 13.3% (6) 13.2% (5) 17. 8 % (8) 15.2% (7) 42.2% (19) 26.3% (10) 28.9% (13) 47.8 % (7) 26.7% (12) 15.8% (6) 11.1% (5) 19.6% (9) 24.4% (11) 23.3% (10) 29.8% (14) 17. 4 % (8) 26.7% (12) 23.3% (10) 14.9% (7) 8.7% (8) 24.4% (11) 16.3% (11) 10.6% (5) 13.3% (6) 2 7.9 % (12) 23.7% (9) 22.2% (10) 26.7% (6) 14.0% (6) 5.3% (2) 13.3% (6) 35.6% (6) 9.3% (4) 13.2% (5) 8.9% (4) 44.4% (20) 26.3% (10) 8.1% (3) 22.7% (10) 17. 8 % (20) 13.2% (5) 10.8% (4) 15.9% (4) 8.9% (4) 7.9 % (3) 8.1% (3) 6.8% (3) 14.0% (6) 20.9% (9) 15.8% (6) 17. 6% (6) 15.9% (7) 20.9% (9) 21.1% (8) 11.8 % (4) 13.6% (6) 20.6% (4) 18.2% (8) 1st quartile 2nd quartile 3rd quartile 4th quartile 7 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL HIGHLIGHTS ![Graphics]() Fund Performance (Quartile ranking) Detailed quartile rankings by fund over one, three and five years and since launch date or fund manager appointment are shown in the table below: Quartile ranking – Since Launch/ Manager Appointed Quartile ranking – 5 year Quartile ranking – 3 year Quartile ranking – 1 year Launch Date/ Manager Appointed ECONOMIC ADVANTAGE FUNDS Liontrust UK Growth Fund 1 1 1 3 25/03/2009 Liontrust Special Situations Fund 1 2 3 4 10/11/2005 Liontrust UK Smaller Companies Fund 1 1 2 3 08/01/19 98 Liontrust UK Micro Cap Fund 1 1 1 2 09/03/2016 SUSTAINABLE FUTURE FUNDS Liontrust SF Monthly Income Bond Fund 1 1 2 1 12 / 07/2 010 Liontrust SF Managed Growth Fund 2 1 2 1 19/02/20 01 Liontrust SF Corporate Bond Fund 1 2 2 1 20/08/2012 Liontrust SF Cautious Managed Fund 2 3 4 3 23/07/2014 Liontrust SF Defensive Managed Fund 1 3 4 2 23/07/2014 Liontrust SF European Growth Fund 3 4 4 4 19/02/20 01 Liontrust SF Global Growth Fund 3 2 3 2 19/02/20 01 Liontrust SF Managed Fund 1 1 3 1 19/02/20 01 Liontrust UK Ethical Fund 3 4 4 3 01/12/2000 Liontrust SF UK Growth Fund 3 4 4 2 19/02/20 01 Liontrust GF SF US Growth Fund 2 – – – – – – 07/ 0 7/2 0 2 3 GLOBAL INNOVATION FUNDS Liontrust Global Dividend Fund 2 1 2 1 20/12/2012 Liontrust Global Innovation Fund 1 2 4 1 31/12/2001 Liontrust Global Technology Fund 2 2 1 1 15/12/2015 GLOBAL FUNDAMENTAL GLOBAL EQUITY FUNDS 1 Liontrust Balanced Fund 1 1 1 1 31/12/1998 Liontrust China Fund 4 3 4 3 31/12/2004 Liontrust Emerging Market Fund 3 4 3 1 30/09/2008 Liontrust Global Smaller Companies Fund 1 3 3 1 01/07/2016 Liontrust Global Alpha Fund 1 3 4 2 31/12/2001 Liontrust India Fund 4 2 1 1 29/12/2006 Liontrust Japan Equity Fund 2 1 2 1 22/06/2015 Liontrust Latin America Fund 3 4 4 3 03/12/2007 Liontrust US Opportunities Fund 1 3 3 1 31/12/2002 Liontrust GF US Equity Fund 2 1 3 1 26/06/2014 Liontrust GF International Equity Fund 4 – – 4 4 17/12/2019 8 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL HIGHLIGHTS ![Graphics]() Quartile ranking – Since Launch/ Manager Appointed Quartile ranking – 5 year Quartile ranking – 3 year Quartile ranking – 1 year Launch Date/ Manager Appointed CASHFLOW SOLUTION FUNDS Liontrust European Dynamic Fund 1 1 1 1 15/11/2006 GLOBAL FIXED INCOME FUNDS Liontrust Strategic Bond Fund 3 3 3 3 08/05/2018 GLOBAL FUNDAMENTAL TEAM FUNDS Liontrust UK Equity Fund 1 3 2 1 27/03/2003 Liontrust UK Focus Fund 1 4 3 1 29/09/2003 Liontrust Income Fund 1 1 1 1 31/12/2002 Liontrust GF UK Equity Fund 4 3 2 1 03/03/2014 Edinburgh Investment Trust Plc 1 – – 1 1 27/03/2020 1 The Global Fundamental Global Equity Funds moved to Mark Hawtin’s new Global Equity Team in May 2024. Source: Financial Express to 31 March 2024 as at 4 April 2024, bid‐bid, total return, net of fees, based on primary share classes. Past performance is not a guide to future performance, investments can result in total loss of capital. The above funds are all UK authorised unit trusts, OEICs, Irish authorised OEICs (primary share class) or UK listed investment trusts. Liontrust Russia Fund is not included as it is currently suspended and in an IA sector that is not rankable (e.g. Specialist) so it would not be a fair comparison to make. Liontrust GF Tortoise Fund is not included as it is not in an IA sector. Edinburgh Investment Trust Plc uses the IT UK Equity Income sector. 9 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL HIGHLIGHTS ![Graphics]() ![Graphics]() # STRATEGIC # REPORT Chair’s Statement 12 Chief Executive Officer’s report 14 Our Strategy 16 Our Business Model 23 Financial review 28 Principal Risks and Mitigations 38 Our People 54 Responsible Capitalism 62 ![Graphics]() #### CHAIR’S STATEMENT The Board of Directors are committed to Liontrust’s vision and the strategy of the Group. The underlying business is in better health than it has ever been with regards to investment proposition, quality of our people, reach of sales and marketing, and strengthening business infrastructure. We will not be diverted from our long-term plan by short-term challenges. ACTIVE MANAGEMENT There is no doubt we have been confronted by one of the toughest periods for active asset managers. This is especially the case for those which offer investment styles that have been largely out of favour during this environment of interest rates remaining higher for longer than many expected. For Liontrust, this has impacted our quality growth, small and mid-caps, sustainable investing, as well as UK equity, strategies; this is reflected in the net outflows of £6 billion over the financial year. Liontrust has always believed the best way of allocating capital to companies and managing investments on behalf of clients is through active management with robust investment processes and high-conviction portfolios. Each team at Liontrust has the freedom to use their own distinct investment processes and we continue to believe these are key to long-term performance and effective risk control. The need for individuals to take responsibility for their own savings and ensure their future financial security will only grow in importance and this can act as a tailwind for active managers. We believe those active managers who deliver value will continue to have a key role for investors in achieving their financial objectives. We recognise active managers and investment processes do not always deliver alpha in a consistent and predictable manner; in some years, as we have seen recently, processes will underperform, but we are confident they will deliver for clients over the long term. John Ions, Vinay Abrol, and the rest of Liontrust are working hard to enable the Group to return to net inflows and are not simply waiting for market sentiment to change. In his statement below, John explains the strategy for delivering growth and the many actions that have already been taken to ensure Liontrust is well positioned for the future and can take advantage of opportunities. ROBUST BUSINESS I am pleased to report that the Liontrust operating model is robust with the Group capital position remaining strong. Over the financial year, Liontrust delivered adjusted profit before tax of £67.4 million, gross profit of £186 million and the full year dividend is maintained at 72p per share. Our financial strength has been aided by our flexible remuneration model for investment managers through their revenue share model. This ensures the investment managers are fully aligned with the business and investors as AuMA rises and falls. Liontrust remains in robust financial health with £104 million of cash and cash equivalents on the balance sheet and surplus capital of nearly £80 million as at 31 March 2024. STRATEGY A strategic objective that John talks about in detail in his statement is the further diversification of our fund range and investment teams. We have seen clearly why this is important given the market environment of the last few years. Diversification can be achieved through launching funds for existing investment teams and recruiting new teams as we have done with the Global Equities team. The Board also believes in selective acquisitions that accelerate the development of Liontrust and its ability to grow, typically through bringing in investment teams that complement our existing capability or expand distribution. It is in this context that our endeavour to acquire GAM Holding AG in the first half of the financial year should be viewed. It presented the opportunity to expand rapidly our investment management and distribution capability, as well as enhance the operations and administration of the Group. Alongside acquisitions, Liontrust continues to pursue these objectives through recruitment and internal developments. 12 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() PEOPLE AND SUSTAINABILITY There are many ways in which Liontrust has responsibilities to investors, employees, stakeholders, the planet and society. These responsibilities range from engagement with the companies we invest in, through commitments to net zero, DE&I (Diversity, Equity, Inclusion) and the well-being of employees, to contributing to the financial services industry and our community. Liontrust has been investing in and developing our people, including through a leadership programme, coaching, training and a mentoring scheme. In May 2022, Liontrust signed up to the Net Zero Asset Managers’ initiative (NZAM). This commitment covers the Group’s net zero targets for the investments it makes on behalf of clients. At the time it joined, Liontrust committed approximately 42% of its AuMA to NZAM. As at the end of December 2023, the percentage of the Group’s AuMA committed had risen to 45%. In 2023, Liontrust set near-term science based emissions reduction targets (which were approved by the Science Based Targets initiative, or SBTi) to show the Group’s commitment to reducing emissions in line with the Paris Agreement goals. BOARD OF DIRECTORS I would like to welcome publicly Miriam Greenwood to the Board, who joined us in November and has become Chair of the Remuneration Committee. Miriam brings extensive experience and expertise to the Remuneration Committee and the Board as a whole. In becoming Chair of the Remuneration Committee, Miriam has succeeded George Yeandle, who is retiring from the Board at the AGM in September 2024. George has shown outstanding leadership of the Remuneration Committee over the last nine years and I want to thank him for his great contribution to the Board. We have announced previously that the process of seeking a new Chair had started. This process is progressing well and we will update shareholders when we have news on an appointment. RESULTS Gross Profit of £186.1 million (2023: £229.8 million), includes £10.4 million of performance fee revenues (2023: £18.5 million), with a Revenue Margin 1 of 0.620% (2023: 0.625%) on Average AuMA of £28,330 million (2023: £33,815 million). Adjusted profit before tax 1 is £67.430 million (2023: £87.083 million), a decrease of 22.6% compared to last year, with an Adjusted Operating Margin 1 of 35.5% (2023: 37.7%). Statutory Loss before tax of £0.6 million (2023: Statutory Profit before tax of £49.3 million), This includes charges of £68.0 million (2023: £37.8 million) relating to acquisitions and non-recurring costs (£18.8 million); the non-cash amortisation and impairment of the acquisition-related intangible assets and goodwill (amortisation: £12.1 million, impairment: £37.1 million). Adjusted profit before tax 1 is disclosed in order to give shareholders an indication of the profitability of the Group excluding non-cash (intangible asset amortisation) expenses and non-recurring (professional fees relating to acquisition, cost reduction, restructuring and severance compensation related) expenses. See note 7 on page 166 for a reconciliation of Adjusted profit before tax 1 . DIVIDEND The Board has declared a second interim dividend of 50.0 pence per share (2023: 50.0 pence) bringing the total dividend for the financial year ending 31 March 2024 to 72.0 pence per share (2023: 72.0 pence per share). The second interim dividend will be payable on 9 August 2024 to shareholders who are on the register as at 5 July 2024, the shares going ex-dividend on 4 July 2024. Last day for Dividend Reinvestment Plan elections is 19 July 2024. LOOKING FORWARD Liontrust has built a great business of which I am proud to be Chair. This has been based on the hard work and dedication of the team at Liontrust, along with their expertise, and the Board thanks everyone for their contribution. We are confident the actions taken by management will reap rewards in the future. Alastair Barbour Non-executive Chair 25 June 2024 “ I am pleased to report that the Liontrust operating model is robust with the Group having good capital strength. Over the financial year, Liontrust delivered adjusted profit before tax of £67.4 million, gross profit of £186 million and the full year dividend is being maintained at 72p per share” ALASTAIR BARBOUR CHAIR 1 This is an Alternative Performance Measure. See page 32 for details. 13 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() #### CHIEF EXECUTIVE OFFICER’S REPORT This has been a challenging year for Liontrust. As the Chair has outlined in his statement, the market environment and investor sentiment has been negative for many of our strategies and this has driven the net outflows for Liontrust over the financial year. We have full confidence in our proven investment teams and processes delivering over the long term for investors. Liontrust has also been developing the business to put it in a strong position to drive the next stage of our growth. We are pleased with the progress we have been making and how Liontrust is structured to capitalise on the opportunities ahead after the headwinds that the Group has faced over the last year. INVESTMENT PROPOSITION We have continued to expand Liontrust’s investment proposition as part of the strategic objective to diversify the product range. Liontrust has added the Global Equities team headed by Mark Hawtin. Mark has 40 years of investment experience, having been Head of Global Equities at GAM Investments and a partner and portfolio manager at Marshall Wace Asset Management. We are very pleased with the feedback about the new team and they are already bringing us opportunities to broaden our client base globally. The Economic Advantage team headed by Anthony Cross has expanded their capability through the recruitment of Alexander Game from Unicorn Asset Management, while Natalie Bell is now a named manager of the UK Smaller Companies and UK Micro Cap funds. The outflows of assets from UK equity funds and depressed valuations of UK listed companies is threatening the robustness of the stock market. Many fantastic UK companies are being taken private too cheaply, are subject to takeovers by overseas companies or are choosing to list outside the UK. For these reasons, we support initiatives that will attract greater capital and companies to the UK stock market. We welcomed the Government’s announcement of the intention to bring in a UK ISA. Liontrust, particularly the Economic Advantage team, has been actively engaged with the Government over the idea and the subsequent consultation. Liontrust believes in the long-term potential of the UK economy and its ability to produce world class companies. What we need are the incentives to encourage these companies to list on the UK market. Liontrust expanded the fund offering during the last year with the launch of the GF Sustainable Future US Growth Fund in July 2023, which is managed by the Sustainable Investment team, and the GF Pan-European Dynamic Fund in February 2024, which is managed by the Cashflow Solution team and attracted more than €200 million within four months. The Liontrust European Dynamic Fund won the award for best Europe ex UK Fund for the third year running at the prestigious Fund Manager of the Year awards on 20 June. The Liontrust European Strategic Equity Fund and the Liontrust India Fund were both shortlisted for awards. Liontrust has continued to deliver strong long- term fund performance for our clients. Of Liontrust’s funds, 86.3% are in the first or second quartile of their respective sectors since the funds were launched to 31 March 2024 1 . 14 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() Liontrust has been merging funds where we can produce economies of scale for the benefit of investors, such as the Global Equity and Global Focus funds into the Global Alpha Fund. These mergers also enable the Group to focus on those funds where there is significant existing or potential client demand. EXPAND DISTRIBUTION Another of our four strategic objectives is to further broaden distribution and the client base and we have made significant progress in this area as well by strengthening the sales team in both the UK and internationally. We made two internal appointments with Kristian Cook becoming Head of UK Distribution and Mark Wright being named Head of UK Regional Distribution. We have also recruited a new head of strategic partners in the UK and business development managers for London and the South-East of England. Jeremy Roberts joined from GAM Investments in March 2024 to be Head of Global Distribution (ex UK) with responsibility for developing sales internationally. We have strengthened our distribution capability in Germany with the appointment of Michael Buchholz. He joins Liontrust in August 2024 as Head of Distribution for Germany and Austria and will be based in our branch office in Frankfurt that will open later this year. Jeremy will be making further hires to build the international sales team and we will be expanding our physical presence in continental Europe. CLIENT EXPERIENCE We have also focused on providing an excellent level of service and engagement with clients and ensuring there is a high level of awareness and understanding of Liontrust funds. Nearly 1,800 professional intermediaries attended Liontrust events in 2023 and around 400 have attended the adviser roadshow around the UK in the spring and early summer of 2024 at which the Sustainable Investment and Global Innovation teams have been presenting. Liontrust has a series of events for professional intermediaries planned through the autumn. Liontrust is generating strong investor engagement through our marketing, with significant development of our digital presence. Liontrust fund manager videos had more than 2.3 million views from February 2023 to February 2024. A new weekly video that started in March 2024 to provide a bite-size review of the latest market and economic news has attracted 42,000 views in the first nine weeks. Also, from February 2023 to February 2024, Liontrust’s LinkedIn channel had 8.71 million impressions and 68,578 clicks. LinkedIn followers have grown by nearly 50% in the 15 months to June 2024. STRENGTHEN TECHNOLOGY AND DATA Another key way in which Liontrust has been ensuring we are in a strong position for the future is through developing our technological and data capability. This includes implementing new front office portfolio management and research management systems. These will give us a single front office operating platform that provides Liontrust with scalability, flexibility and efficiency to support future growth of the business. These systems will improve the quality and efficiency of delivering and analysing data and greater productivity across the business. In time, this will lead to enhancements for client service and reporting, enabling Liontrust to develop further our digital capability. In September 2023 we started a programme to implement a strategic Enterprise Platform and associated Operating Model which includes new Front Office tooling – BlackRock Aladdin, with FlexTrade as the EMS, an extended Middle Office operating model with BNY and the implementation of BNY Front Office Service, and a new Enterprise Data platform – BNY Data Vault. In December 2023 we implemented FactSet RMS, a flexible, scalable and consistent research management system which allows our investment teams to store, collaborate and analyse research, both internally generated and externally acquired. FactSet RMS allows us to leverage technology to generate insight and drive efficient, whilst also effectively supporting growing regulatory reporting requirements and preparing for emerging technologies like Artificial Intelligence. LIONTRUST FOUNDATION Liontrust established its charitable foundation during the financial year. The Liontrust Foundation was set up to promote social mobility and preserve and recover nature. The Foundation is committed to empowering young entrepreneurs and promoting DE&I in particular through these two objectives. We have a very strong Board of Trustee Directors, who are chaired by Simon Hildrey, Chief Marketing Officer at Liontrust. The other trustees are Mandy Donald (Non-executive Director of Liontrust), Nathalie Richards (CEO of SEO London) and Dr Andrew Terry (Director of Conservation and Policy at Zoological Society of London). OUTLOOK Liontrust has put in place the structure to deliver growth. We have an expanding and compelling range of investment teams with robust processes; broadening distribution and excellent client service; great engagement with our campaigns and content; a strong brand; and an enhanced operating model. This gives me confidence that we are able to take advantage of the opportunities and mitigate the challenges for active asset managers in the future. John Ions Chief Executive Officer 25 June 2024 1 Source: Financial Express, bid-to-bid basis, net of fees, primary share classes. Statistics using monthly return period. 15 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() 1 Continue to enhance the client experience and outcomes 3 Further broaden distribution and the client base 2 Diversify the product range and investment offering 4 Strengthen our technological, data and digital capability #### OUR STRATEGY Liontrust has four principal strategic objectives: 16 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() 1 #### Continue to enhance the client #### experience and outcomes Liontrust has a responsibility, and is committed, to delivering good outcomes for clients and enhancing their experience. This will engender client loyalty, deepen relationships with clients, promote the retention of assets, and lead to greater engagement and therefore flows. A key part of delivering good outcomes and a great experience is strong investment performance over the long term. Liontrust believes this is achieved through rigorous and repeatable investment processes and the quality of our investment teams. Liontrust ensures each investment team delivers on their documented investment process and meets the relevant risk profile. Liontrust seeks to deliver exceptional client service and support at all times, including through dedicated sales representatives; face-to-face meetings and presentations; and relevant, personalised and engaging communications. Liontrust provides support to help intermediaries service their clients, including through educational content and transparent reporting. Excellent service is achieved through the quality and knowledge of staff throughout the Company and investment in technology and data. Liontrust values its people and aims to nurture a working environment and culture that attracts talent to its business and retains the talent it has. Client experience is also enhanced through voting and engagement with investee companies and Liontrust’s Responsible Capitalism approach. This includes commitments to net zero and evidence-based reporting in terms of integrating ESG/ Sustainability, DE&I (Diversity, Equity, Inclusion), the well-being of staff and contributing to the financial services industry. Liontrust continues to deliver strong long-term performance. 75% of Liontrust’s fund range is in the 1st or 2nd quartile of their respective sectors since launch or fund manager inception to 31 March 2024. Of the eight Sustainable Investment team’s funds with a 10-year track record, four are in the 1st quartile and three are in the 2nd quartile The European Dynamic Fund is the best performer in its IA sector over three years and is ranked 2nd over five years The Global Technology Fund is the best performer in its IA sector over one year and ranked 7th over three years There is improving short-term performance. 71.7% of Liontrust’s fund range is in the 1st or 2nd quartile over one year. Five of the 10 UK-domiciled funds managed by the Sustainable Investment team are in the 1st quartile of their respective IA sectors over one year and another two are in the 2nd quartile Liontrust has strong engagement with clients. Around 1,800 clients attended Liontrust events in person in 2023 and there were more than 2.3 million views of fund manager videos over 12 months to February 2024 From February 2023 to February 2024, Liontrust’s LinkedIn channel had 8,711,419 impressions and 68,578 clicks 94% of retail investors find information extremely or fairly easily on the Liontrust website. 82% of retail investors who contacted client services were satisfied by the service they received The investment teams had 852 engagements with 477 entities in 2023. The teams cast more than 12,000 proxy votes. 45% of the Group’s AuMA is now committed to net zero by 2030 There is longevity and engagement of staff at Liontrust. Heads of Department have been at Liontrust an average of 8.5 years and 56% of staff have been at the Company for 5 years or more. There was a 82% response rate to the employee engagement survey in 2023 #### PROGRESS 17 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() #### PROGRESS 2 #### Diversify the product range #### and investment offering Liontrust adds to our fund range where we have the fund management expertise and there is investor demand. Diversifying the fund range will expand the potential client base. The demand for product varies between markets and an expanded fund range helps to meet the different client requirements. Liontrust seeks to broaden the asset classes we offer, which will also enable us to expand the client base and ensure we can deliver performance through the market cycle. An increase in asset classes will ensure Liontrust can provide more sustainable growth in the future even when certain styles of investments are out of favour with investors. The expansion of our fund range and investment teams will come through new launches, recruitment and acquisitions. Any new teams must meet the investment approach of Liontrust. Each investment team at Liontrust is focused on active management, a distinct investment process, high- conviction portfolios, long-term investing and engagement with investee companies and clients. Liontrust GF Sustainable Future US Growth Fund was launched in May 2023 Liontrust GF Pan-European Dynamic Fund was launched in February 2024 and by April 2024 had raised more than €150 million Global Equity and Global Focus Funds were merged into Global Alpha Fund in the 1st quarter of 2024 Mark Hawtin and his three-strong team were recruited from GAM Investments to launch the Global Equities team and joined Liontrust in May 2024. Mark has a strong track record in managing long only and long/ short equity funds at Marshall Wace Asset Management and then GAM and will help us to attract assets and build our client base Alex Game joined Liontrust in May 2024 from Unicorn Asset Management as a fund manager for the Economic Advantage team 18 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() #### PROGRESS 3 #### Further broaden distribution #### and the client base We seek to distribute our funds and portfolios to as broad a client base in the UK and internationally as possible, striving continually to raise awareness and knowledge of Liontrust and our funds, widen the number of clients who invest with us, deepen our relationships with existing investors and increase our assets under management. We are seeking to expand further our client base in the UK and internationally, with a key focus on Europe and South America. This will be achieved through investment in sales, marketing and broadening our fund range and asset classes. This includes developing Liontrust’s physical presence in European countries and building our brand to match the awareness, understanding and engagement we have in the UK. Liontrust strengthened the sales capability with the internal appointment of Kristian Cook as Head of UK Distribution and bringing single strategy and multi-asset sales into one team in the UK to enhance further the levels of service we provide clients. The new structure provides greater focus and clarity of responsibilities and will broaden the product range for each salesperson Mark Wright has been promoted to Head of UK Regional Distribution and Sophie Andrews joined in June from Franklin Templeton as Head of Strategic Partners and Consolidators There continues to be strong activity with UK clients to expand distribution. 806 clients attended the World Markets Review Roadshow (Multi-Asset), 643 attended the Sustainable Future Roadshow, 201 attended the Sustainable Future Virtual Conference, and 340 discretionary clients attended bespoke fund manager presentations Jeremy Roberts joined in March 2024 as Head of Global Distribution ex-UK. He will enhance Liontrust’s capability to expand distribution internationally by building on the sales platform and client base we have established Sales have been increasing in South America to the institutional market 19 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() #### PROGRESS 4 #### Strengthen our technological,data and digital capability Liontrust seeks to use technology and data to improve the client experience, support expansion of the Company and make the business more efficient. We are enhancing the management and distribution of data to enable better data-led decisions across the business, embed the ability to scale the operating model and provide support to the investment teams. Liontrust is enhancing the analysis of data to provide the Distribution team with increased market intelligence and lead generation. Through becoming a more data-centric organisation, we will be able to support clients to better develop the personalisation of communications, integrate new data tools such as AI, increase productivity and improve efficiencies. A new research management system (RMS) was implemented in the 4th quarter of 2023 A new order management system (OMS) and execution management system (EMS) have been selected and will be implemented in the 3rd quarter of 2024 A new cloud-based data store has been selected and will be implemented in the 3rd quarter of 2024, creating a single hub of data with the supporting ecosystem that can be relied upon by all departments in the business We are upgrading the CMS (content management system) of the Liontrust website to extend further the personalisation of communications We are developing the management of data to enhance and better leverage lead generation 20 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() 21 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() 22 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() PROCESS DRIVEN Each investment team applies distinct processes, which are rigorous and documented, to managing funds and portfolios to ensure the way they manage assets is predictable and repeatable and to prevent them from investing in stocks and portfolios for the wrong reasons ACTIVE MANAGEMENT Liontrust fund managers have the courage of their convictions in making decisions, ensuring our funds and portfolios are truly actively managed for the long-term benefit of our clients LONG-TERM APPROACH Each of the investment teams takes a long-term approach to managing their funds and portfolios through applying their distinct investment processes EXPERTISE Liontrust focuses on those areas of investment in which we have particular expertise ENGAGEMENT The investment teams ae committed to engaging with their investee companies and clients INVESTMENT FOCUSED Our fund managers can concentrate on managing their funds and portfolios without being distracted by other day-to-day aspects of running an asset management business STRONG AND DISTINCTIVE BRAND The Liontrust brand is accessible and engaging and represents our values of courage, power, pride CULTURE Liontrust takes pride in acting in the best interests of clients and delivering good customer outcomes at all times. Liontrust seeks to empower our staff to fulfil their potential and foster an environment in which everyone is engaged. Liontrust believes in the power of promoting diversity and inclusion across the business COMMUNITY ENGAGEMENT We focus on financial education, providing opportunities for young people and wildlife conservation #### OUR BUSINESS MODEL Liontrust is a specialist asset management company that was founded in 1994 and was listed on the London Stock Exchange in 1999. Liontrust invests on behalf of our clients – institutional investors, professional intermediaries and personal investors – who are primarily, but not exclusively based in the UK, Europe and South America. The investments are managed through funds, portfolios and segregated accounts. As at 31 March 2024, Liontrust managed £27.8 billion in AuMA across seven investment teams. These assets are invested with the objective of delivering strong long-term performance through distinct investment processes to enable clients to achieve their goals and enjoy a better financial future. This is complemented by Liontrust developing long-term relationships with our clients. Liontrust also has a strong role to play in supporting businesses and innovative companies, working to allocate capital towards positive outcomes that benefit the economy and society. Liontrust takes great pride in our role as active managers. #### What makes Liontrust distinctive? 23 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() #### HOW WE GENERATE SHAREHOLDER VALUE Sustainable earnings growth We look to grow our earnings by increasing our AuMA through sales, investment performance, new products and acquisitions while maintaining pricing. Increased AuMA delivers greater revenues which in turn support the equity value of your Company. Consistency of earnings Attracting and retaining clients maintains AuMA and fees. Liontrust seeks to achieve this through delivering the right products for our investors, strong long-term investment performance, excellent service, communications and administration, and positive outcomes. Business discipline Managing the business efficiently controls costs and therefore increases profitability with scale. This is achieved through strong infrastructure, operations, risk management and governance. 24 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() #### HOW WE ACHIEVE THIS Investment Management The quality and performance of the investment management teams is one of Liontrust’s key competitive advantages and core to helping investors to achieve their financial goals. We have a single division of seven fund management teams (which increased to eight after the end of the financial year) that manage a range of funds, portfolios and segregated accounts using distinct investment processes supported by a centralised trading team. There is no house view at Liontrust, and each of the teams manages funds according to their own investment process and market views without being distracted by other day- to-day aspects of running an asset management company. Liontrust believes robust and transparent investment processes are critical to delivering long-term performance and effective risk control. The teams subscribe to the belief that robust active management can deliver enhanced risk adjusted returns in the long term. Staying true to their documented investment processes helps to create an in-built risk control for our fund managers, especially in more challenging environments, by preventing them from investing in companies and funds for the wrong reasons. Documenting an investment process means an investor in our funds and portfolios knows exactly how each team manages their investments. Distribution The strength of the Liontrust brand, the breadth and depth of our client base and the relationships we have with our investors are competitive advantages. Our sales and marketing teams promote our funds and portfolios in the UK and internationally. In the UK, we market to institutional investors, discretionary fund managers, wealth managers, financial advisers and private investors. Outside the UK, we are focused on the wholesale market, primarily family offices, private banks, wealth managers and multi- managers in a number of countries. Liontrust has developed strong relationships across the different distribution channels. We have developed a strong brand through our marketing activities, including events, regular written and video communications, digital marketing, advertising, sponsorships and PR. Digital is a key, and ever-more important, driver of our brand profile and engagement, including through our website, social media, email communications and advertising and promotions. Operations The support provided to our clients, fund managers and the sales and marketing teams by operations is another key competitive advantage. We have a single Operations division, designed to support a fast-growing business, and have one fund administrator – Bank of New York Mellon. Having a single Operations function and fund administrator ensures the fund management and sales and marketing teams have the appropriate tools to be effective, provides executive management with the performance and risk monitoring information required to manage the business and supports the requirements of external stakeholders such as clients, shareholders and regulators. Risk Management Liontrust takes a cautious and pro-active approach to risk management, recognising the importance of understanding risks to the business, setting and monitoring risk appetite and implementing the systems and controls required to mitigate them. For more on risk management, see the section on Principal Risks. 25 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() Liontrust ensures that appropriate and prudent levels of risk are taken to meet the investment objectives and policies of all our funds. In general, risk within a fund is controlled and monitored in two ways: the investment process and predetermined risk controls are monitored by the Portfolio Risk Committee that is chaired by the Chief Risk Officer (CRO). Governance Liontrust takes its corporate governance responsibilities very seriously. Liontrust upholds the highest standard of integrity in all of its actions and strives for excellence in everything we do. We are seeking greater diversity across the company as we believe this enhances the performance of businesses and leads to better decision making, innovation and growth through independent thinking and new ideas. The Board of Directors is responsible for organising and directing the affairs of the Company in the best interests of the shareholders, meeting legal and regulatory requirements and ensuring good corporate governance practices. #### This is supported by Liontrust’s values COURAGE • Liontrust does not follow the herd and has the courage to have independence of thought • The business has the courage to do the right thing, make decisions and be nimble • Liontrust has the courage to take an active and engaged approach to investing, clients, staff and society POWER • Liontrust believes in the power of promoting diversity and inclusion across the business, bringing diverse and inclusive thinking and approaches to our purpose • We seek to empower our staff to fulfil their potential and foster an environment in which everyone is engaged and encouraged to actively participate in the business • Liontrust benefits from the power of being dynamic and ambitious, promoting positivity and adaptability to change PRIDE • We take pride in seeking to act in the best interests of clients and delivering good customer outcomes at all times • Our staff are responsible for upholding the highest standards of integrity, taking pride in being trustworthy and transparent while making decisions with a clear sense of fairness • Everyone takes pride in being responsible for supporting each other, collaborating, treating each other with dignity and respect, and being open-minded to new ideas, challenge and debate 26 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() 27 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() #### FINANCIAL REVIEW Financial performance Loss before tax was £0.579 million (2023: profit before tax £49.301 million). The loss before tax for the year includes £15.7 million of acquisition and reorganisation costs incurred as a result of the acquisition and reorganisation costs. In addition, the impairment losses of £7.3m and £29.8m on Architas and Majedie respectively have been recognised in the period. Adjusted profit before tax\*, which adjusts for amortisation, impairments and other costs relating to acquisitions; restructuring and severance compensation decreased to £67.430 million from £87.083 million last year and from £96.556 million two years ago, reflecting the increase net outflows and fall in AuMA due to current market conditions. Nonetheless, adjusted profit before tax is driven primarily by stronger than expected performance fee revenues during the Financial Year of £10.4 million (2023: £18.5million) received across three of our investment teams (Sustainable Investments team, Global Fundamental team and Cashflow Solution team)). Table (a) Analysis of financial performance Year ended 31 Mar 24 £’000 Year ended 31 Mar 23 £’000 Year on year change Revenue excluding performance fees 18 7, 4 8 0 224,855 -17% Performance fees 10,409 18,484 -44% Cost of sales (11, 8 28 ) (13,569) -13% Gross Profit 186,061 2 29,7 70 -19% Other gains 1,022 2,467 -59% Administration expenses (188,932) (183,210) 3% Operating (loss) profit (1,849) 49,027 -104% Net interest 1,270 275 362% Loss/(profit) before tax (579) 49,302 -101% Adjustments – see note 7 on page 166 68,009 37,781 80% Adjusted profit before tax\* 67,430 87,083 -23% Gross profit Gross profit fell by 19% compared to last year and decreased by 20% compared to two years ago. Figure 1 – Gross profit £’000 Average AuMA Average AuMA decreased by 16% to £28,330 million compared to last year and 18% lower than 2022. Figure 2 – Average AuMA £’billion 250,000 200,000 150,000 100,000 50,000 0 FY22 FY23 FY24 Performance fee revenues (£’000) Non-performance fee revenues (£’000) £40 £35 £30 £25 £20 £15 £10 £5 £0 FY22 FY23 FY24 \*These are Alternative Performance Measures. The disclosure, definition and nature of adjustments to GAAP measures to the disclosed APMs is a judgement made by management and is a matter referred to the Audit & Risk Committee for approval prior to issuing the financial statements. See Page 32 for further details. 28 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() Revenue Margin\* Revenue margin decreased by 0.005% from 31 March 2023 to 31 March 2024 compared to decrease by 0.011% two years ago. Figure 3 – Revenue Margin\* Adjusted profit before tax\* and Adjusted operating margin\* Adjusted profit before tax\* fell from £87.083 million to £67.430 million a year ago and from £96.556 million reported two years ago. This in turn is reflected in the Adjusted basic and Diluted earnings per share. Figure 4 – Adjusted profit before tax\* £’million Adjusted operating margin (calculated as Adjusted operating profit divided by Gross profit) reflects the operating gearing inherent in the business (see Figure 5 below). Figure 5 – Adjusted operating margin\* 50% 40% 30% 20% 10% 0% FY22 FY23 FY24 Adjusted profit before tax £ 6 7. 4 m \*These are Alternative Performance Measures. The disclosure, definition and nature of adjustments to GAAP measures to the disclosed APMs is a judgement made by management and is a matter referred to the Audit & Risk Committee for approval prior to issuing the financial statements. See Page 32 for further details. 120 100 80 60 40 20 0 FY22 FY23 FY24 0.8% 0.6% 0.4% 0.2% 0% FY22 FY23 FY24 29 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() Administration expenses The largest component of our costs, in common with other service companies, is member and employee related expenses. Staff compensation as a percentage of Gross profit decreased when compared to last year and the year before, even though headcount increased reflecting stringent cost control and reduced revenue share compensation to fund managers. See Figure 6 below. Figure 6 – Employee and member related expenses as a percentage of Gross profit\* Member and employee related costs are the sum of Director and employee costs, pensions, members’ drawings charged as an expense, and members’ advance drawings (where applicable). Dividend The Board has considered current market environment, the financial performance for the Group in the current year and its cash generation abilities in future years, and is declaring a second interim dividend of 50.0 pence per share (2023: 50.0 pence) which will result in total dividends for the financial year ending 31 March 2024 of 72.0 pence per share (2023: 72.0 pence) (See Figure 7 below). This reflects a dividend margin (dividend per share divided by Adjusted diluted earnings per share excluding performance fees) of 57% (See Figures 7 and 8 below). Figure 7 – Dividend per share (pence) Dividend margin is calculated by taking the dividend amount divided by adjusted diluted EPS excluding performance fees. Figure 8 – Dividend margin\* 100% 75% 50% 25% 0% 50% 45% 40% 35% 30% FY22 FY23 FY24 80 70 60 50 40 30 20 10 0 FY22 FY23 FY24 FY22 FY23 FY24 \*These are Alternative Performance Measures. The disclosure, definition and nature of adjustments to GAAP measures to the disclosed APMs is a judgement made by management and is a matter referred to the Audit & Risk Committee for approval prior to issuing the financial statements. See Page 32 for details. 30 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() Dividend policy Our policy is to grow our dividend progressively in line with our view of the underlying adjusted earnings per share on a diluted basis and cash flow of Liontrust. When setting the dividend, the Board looks at a range of factors, including: • the macro environment; • the current balance sheet; and • future plans. It is our intention that dividends will be declared and paid half yearly. Statement of viability In accordance with provision 31 of the 2018 Code, the Directors have assessed the prospects of the Group over a longer period than the 12 months required by the Going Concern provision. The Directors confirm that they have a reasonable expectation that the Group will continue to operate and meet its liabilities, as they fall due, up to 31 March 2027. The Directors’ assessment has been made with reference to the Group’s current position and strategy, the Group’s risk appetite, the Group’s financial forecasts, and the Group’s principal risks and mitigations, as detailed in the Strategic Report. The three-year period is consistent with the Group’s current strategic forecast and the ICARA. The forecast incorporates both the Group’s strategy and principal risks. The forecast is approved by the Board at least annually. This formal approval is underpinned by regular Board discussions of strategy and risks, in the normal course of business. The forecast is updated as appropriate. The three-year strategic forecast considers the Group’s profitability, cash flows, dividend payments, share purchases, seed capital and other key variables. These metrics are subject to sensitivity analysis, which involves downside scenarios, flexing a number of the main assumptions in the forecast, both individually and in unison. Given the market volatility and economic uncertainty due to the ongoing geopolitical tensions, management produced additional sensitivity scenario analysis for the strategic forecast and has considered mitigating actions should any of these scenarios occur. Scenario analysis is also performed as part of the Group’s ICARA, which is approved by the Board. Maintaining a strong capital position Liontrust’s increased surplus supports the growth in the Group and dividend payouts. Regulatory Capital Mar-24 £m Mar-23 £m Capital after regulatory deductions 1 101.9 113. 3 Regulatory Capital Requirement 2,3 22.8 26.8 Surplus Capital 79.1 86.5 Foreseeable Dividends 4 (31.9) (32.1) Surplus Capital after foreseeable dividends 4 7. 2 54.4 Note, the capital position for the Group as at 31 March 2024 (audited) includes the impairment of the intangible assets and goodwill. 1 Group Capital minus own shares, intangibles and goodwill adjusted for deferred tax liabilities 2 For the financial year ended 31 March 2024, the Group Capital requirement calculated per MiFIDPRU is estimated and will be finalised as part of the September 2024 ICARA process 3 For the financial year ended 31 March 2023, the Group Capital requirement calculated per MiFIDPRU as part of the September 2023 ICARA process 4 The Second interim dividend of 50.0 pence per share paid or to be paid in August following the financial year end Capital after regulatory deductions Capital after regulatory deductions: £m Regulatory Capital Requirement 26% Foreseeable Dividends 22% Surplus Capital after foreseeable dividends 46% TOTAL £101.9M 120 100 80 60 40 20 0 FY19 FY20 FY21 FY22 FY23 FY24 31 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() #### ALTERNATIVE PERFORMANCE MEASURES (‘APMs’) The Group uses the following APMs: ADJUSTED PROFIT BEFORE TAX\* Definition: Profit before taxation, amortisation, impairment and non-recurring items (which include: professional fees relating to acquisitions; restructuring and severance compensation related costs). Reconciliation: Note 7. Reason for use: This is used to present a measure of profitability of the Group which is aligned to the requirements of shareholders, potential shareholders and financial analysts, and which removes the effects of non-cash and non-recurring items, which eases the comparison with the Group’s competitors who may use different accounting policies and financing methods. Specifically, calculation of Adjusted profit before tax excludes amortisation and impairment expenses, and costs associated with acquisitions, restructuring and severance compensation related costs. It provides shareholders, potential shareholders and financial analysts a consistent year on year basis of comparison of a “profit before tax number”, when comparing the current year to the previous year and also when comparing multiple historical years to the current year, of how the underlying ongoing business is performing. ADJUSTED OPERATING PROFIT Definition: Operating profit before: 1. Interest received/paid; 2. Tax; 3. Amortisation of acquisition related intangible assets; 4. Impairment of acquisition related intangible assets and goodwill; 5. Expenses, including professional and other fees relating to acquisitions and potential acquisitions; 6. All employee and member severance compensation related costs; 7. Significant reorganisation expenses related to systems and outsourced services that enhance our target operating model; and 8. Other cash and non-cash expenses which are non-recurring in nature. Reconciliation: Note 7. Reason for use: This is used to present a measure of operating profitability of the Group which is aligned to the requirements of shareholders, potential shareholders and financial analysts, and which removes the effects of significant acquisitions, financing and capital investment, which eases the comparison with the Group’s competitors who may use different accounting policies and financing methods. It provides shareholders, potential shareholders, and financial analysts with a consistent year on year basis of comparison of an “operating profit before tax”, when comparing the current year to the previous year and also when comparing multiple historical years to the current year, of how the underlying business is performing. ADJUSTED OPERATING MARGIN Definition: Adjusted operating profit divided by Gross profit. Reconciliation: Note 7. Reason for use: This is used to present a consistent year-on- year measure of adjusted operating profit compared to gross profits, identifying the operating gearing within the business. REVENUE EXCLUDING PERFORMANCE FEES Definition: Revenue less any revenue attributable to performance related fees. Reconciliation: Note 4. Reason for use: This is used to present a consistent year on year measure of gross profits within the business, removing the element of revenue that may fluctuate significantly year-on-year. ADJUSTED EARNINGS PER SHARE Definition: Adjusted profit before tax divided by the weighted average number of shares in issue. Reconciliation: Note 7. Reason for use: This is used to present a measure of profitability per share in line with the adjusted profit as detailed above. \*This measure is used to assess the performance of the Executive Directors. The disclosure, definition and nature of adjustments to GAAP measures to the disclosed APMs is a judgement made by management and is a matter referred to the Audit & Risk Committee for approval prior to issuing the financial statements. 32 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() ADJUSTED DILUTED EARNINGS PER SHARE Definition: Adjusted profit before tax divided by the diluted weighted average number of shares in issue. Reconciliation: Note 7. Reason for use: This is used to present a measure of profitability per share in line with the adjusted profit as detailed above. REVENUE MARGIN Definition: Revenues excluding performance fees, less cost of sales divided by the average AuMA. Reason for use: This is used to present a measure of profitability over average AuMA. DIRECTOR, EMPLOYEE AND MEMBER RELATED EXPENSES AS A PERCENTAGE OF GROSS PROFIT Definition: A component of our costs, in common with other service companies, is Director, member and employee related expenses. Staff compensation as a percentage of Gross profit was decreased reflecting stringent cost control. DIVIDEND MARGIN Definition: This is the dividends declared per share for the year divided by the Adjusted diluted earnings per share excluding performance fees. Reconciliation: This can be recalculated with the information in notes 7 and 9. Reason for use: This is used to identify the dividend cover versus adjusted diluted earnings per share excluding performance fees. ASSETS UNDER MANAGEMENT AND ADVICE (‘AUMA’) Definition: the total aggregate assets managed or advised by the Group. Reconciliation: A detailed breakdown of AuMA is shown in the Strategic Report Reason for use: AuMA is a key performance indicator for management and is used both internally and externally to determine the direction of growth of the business. When used intra-month (i.e. AuMA for dates that are not a month end date) or used at month end but early in the following month then the AuMA for some accounts, funds or portfolios may not be the most recent actual AuMA, rather it will be the most recent available AuMA which may be the previous month end AuMA or the most recently available AuMA. AVERAGE ASSETS UNDER MANAGEMENT AND ADVICE (“AVERAGE AUMA”) Definition: The average of aggregate assets managed or advised by the Group during the relevant period. Reconciliation: Average AuMA for the year is the average of each month end aggregate AuMA during the relevant period. Reason for use: Average AuMA shows AuMA without the volatility of short term net flows and allows for comparability between years. NET FLOWS Definition: Total aggregate sales/inflows into Group funds and portfolios less total redemptions/outflows from Group funds accounts and portfolios. If positive may also be referred to as “Net inflows” and where negative as “Net outflows”. Reconciliation: A detailed breakdown of net flows is shown in the Strategic Report. Reason for use: Net flows is a key performance indicator for management and is used both internally and externally to assess the organic growth of the business. For certain MPS accounts, the net flow number is not available from the relevant administrator, so the net flow number is derived from the difference between the starting and ending AuMA adjusted for investment performance, if there is a reliable source for the investment performance. For certain MPS accounts where there is no reliable investment performance benchmark, the flows are not included. 33 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() #### LIONTRUST AND FUND AWARDS We are proud to announce the following awards for Liontrust and our fund management teams in the financial year ended 31 March 2024: Investment Week Fund Manager of the Year Awards 2023 Europe category Liontrust European Dynamic Fund AJ Bell Investment Awards Ethical/Sustainable – Active Liontrust Sustainable Future Global Growth Fund Professional Paraplanner Awards 2023 Best ESG Investment Solution Provider Liontrust CAMRA Data Awards 2023 European Inc. UK Equity – Core (EUR) Liontrust GF European Stategic Equity Fund CAMRA Data Awards 2023 UK Equity – Small Cap (GBP) Liontrust UK Smaller Companies Fund Investment Week Investment Marketing and Innovation Awards 2023 Best Website Professional Pensions Investment Awards 2023 Sustainable Corporate Bond Manager of the Year Professional Adviser Awards 2023 Best Responsible Fund Liontrust Sustainable Future Managed Growth Fund Online Money Awards 2023 Best Investment Trust Liontrust 34 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() #### COMMUNITY ENGAGEMENT There are three key objectives that we are aiming to achieve through the Liontrust community engagement programme: • Raise financial awareness and literacy throughout society • Provide opportunities for young people • Wildlife conservation Wildlife conservation Liontrust are proud sponsors of the global conservation charity ZSL and their efforts to protect the Asiatic lion from extinction, a partnership of more than a decade. London Zoo is home to a pride of Asiatic lions. An endangered species, there are fewer than 700 Asiatic lions remaining in the wild, and their dependency on one singular habitat in north- west India means the big cats are particularly vulnerable to natural disaster or a disease outbreak. Male Bhanu and female Arya at London Zoo gave birth to three lion cubs in April 2024. These three cubs are not only a huge boost to the conservation breeding programme, which ensures a healthy population of lions are cared for in zoos to provide a vital safety net for the vulnerable wild population, but they will also inspire millions of people to care and take action for wildlife. Liontrust and London Zoo asked primary school pupils from around the UK to nominate names for the three cubs. From the more than 650 names nominated by pupils, Liontrust and the lion keepers chose a shortlist of three names for each cub. Listeners to Times Radio and readers of The Times then voted on their favourite three names – Syanii, Mali and Shanti. The iconic big cats which once roamed across Asia – from Turkey to Eastern India – are now found only in the Gir Forest in Gujarat, India. Thanks to conservation efforts, Asiatic lions were bought back from the brink of extinction and their numbers have risen slightly in the last decade, but their future is still precarious. ZSL, through its science and conservation efforts in the field and at ZSL London Zoo, is working to ensure a future for Asiatic lions. Liontrust’s partnership with London Zoo – run by ZSL – supports its mission to educate millions of people about wildlife and inspire them to act. Five protected areas currently exist to protect the Asiatic lion in India: the Gir Sanctuary, Gir National Park and Pania Sanctuary form the Gir Conservation Area (GCA) covering an area of 20,000 km2 of forest representing the core habitat for the Asiatic lion. The other two wildlife sanctuaries, Mitiyala and Girnar, protect satellite areas within a lion’s range distance of the Gir Conservation Area. 35 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() ZSL London Zoo’s flagship exhibit Land of the Lions is an immersive and engaging hub for ZSL’s Asiatic lion conservation and education efforts, and an area sponsored by Liontrust. Transporting visitors from the heart of London to India’s vibrant Sasan Gir, people can get closer than ever before to the lions, while embarking on an adventure through the Indian-inspired experience. From exploring an Indian barber shop, in the replica Sasan Gir high-street to a train-station, the exhibit truly gives visitors a sense of just how close lions and people live in India. Blackpool FC Girls’ Emerging Talent Centre Liontrust has partnered with Blackpool Football Club Community Trust to become a principal partner and the front of shirt sponsor for the Girls’ Emerging Talent Centre (ETC) for the 2023/24 season. The Centre supports the development of young female players aged eight to 16 and provides a wider and more diverse talent pool for women’s football. The Girls’ Emerging Talent Centre run by Blackpool FC Community Trust is designed to be a central hub, working with grassroots clubs, schools and local coaches to identify talented female players and is part of the FA Pathway towards the Lionesses. It is offered free to all, removing the financial burden often faced with elite level training. With Liontrust’s support, Blackpool FC Community Trust offers a comprehensive approach to player development, giving all girls selected access to a high-quality training programme, strength and conditioning coaches, access to an onsite physiotherapist, nutritional advice and health and wellbeing support. Groups are also invited to play in competitive games against other ETC programmes. Liontrust’s focused support and investment via the ETC improves accessibility and increases inclusivity for local young female footballers, who are starting out on an elite development pathway. The FA’s ETC programme will lead to the number of young female players engaged in FA programmes nationally rising from 1,722 to over 4,200 by the end of the 2023/24 season. The FA Girls’ Emerging Talent Centres are a fantastic initiative as they provide the chance for female players to develop their football skills and be offered a potential pathway all the way to the Lionesses. The ETCs ensure players can participate in elite training. Ash Hackett, CEO, Blackpool FC Community Trust said: “We are very pleased that Liontrust has taken such an interest in our Girls’ Emerging Talent Centre. One of the elements that has made our project unique across the country is that we have removed all charges for the players, to support with removing the barriers to taking part and Liontrust’s support really contributes to this. I’d like to thank Liontrust for its support in allowing us to make this the best opportunity for local girls and really increase the quality of the only FA endorsed provision for talented players on the Fylde Coast.” 36 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() Here are some examples of the achievement of the Blackpool FC Girls’ ETC: • Offering free playing and training kits to players • Engaging 120 girls in academy level football • Three girls from the ETC teams have been nominated for the England Talent Pathway • Two girls from the ETC teams were invited to play at Manchester City and Manchester United’s Pro Game Academy squads Financial Education 10ticks Liontrust partners with 10ticks to enable them to deliver worksheets and new digital maths education to primary and secondary schools across the UK. 10ticks.com Mental Maths is a fun and engaging online resource designed to help support the instant recall of multiplication and division facts and lots of other mental maths topics with little teacher intervention. From challenging classmates online to playing live games across the globe, these stimulating activities are designed to engage pupils. The pupils can also create their own avatar and earn certificates and awards to inspire them to perfect their skills. There are many measures that 10ticks uses for mental arithmetic and improvements in pupils using digital maths education. A speed evaluation is based on a Beat the Clock game that measures how many questions you can answer correctly in 60 seconds. An accuracy evaluation is based on a Perfect 10 game measuring how quickly you can answer 10 questions in a row correctly without a mistake. To measure percentage improvement, an initial baseline test is measured against the ongoing average score. This improvement is mapped against the number of times pupils log in to the system. On average, pupils engaging with the system more than twice a week have increased their speed by 59.2% and improved their accuracy by 49.7%. To March 2024, 15.4 million questions have been answered by Liontrust pupils. In September 2023, Gamification was introduced as a feature on 10ticks. This approach fosters repetition and sustained engagement with mental maths questions through an incentivised reward system. To date, over 100,000 challenges have been successfully completed. With the appeal of rewards driving motivation, we anticipate heightened engagement, prolonged play sessions, and increased frequency of interactions. 10ticks works with thousands of teachers across the UK, making over 10,000 worksheets covering a huge variety of pedagogical styles including problem solving, puzzles, games, investigations, consolidation, Action Maths and Mastery available to their pupils. There are over 30% of secondary schools signed up to 10ticks.com, 10ticks.co.uk or both out of the targeted 4,171 schools. There are approximately 4 million children in this sector so the partnership is potentially reaching 1,240,000 children. 2,410 primary schools have signed up to 10ticks.com, 10ticks.co.uk or both via Liontrust, meaning we reach 11.5% of the 20,800 primary schools we are targeting in the UK. There are approximately 5.5 million children in this sector so we are reaching potentially 632,000 primary school children. Newcastle United Foundation Liontrust partners with Newcastle United Foundation (NUF) to provide a numeracy programme, Financial Football. This is designed to give primary school children a head start in financial education. The six-week programme has helped to break down any barriers that children face in understanding and learning about numeracy and finance, with the aim of improving children’s understanding of money, as well as giving them the confidence to thrive in school maths lessons. Financial Football uses the popularity and profile of Newcastle United football club to encourage primary school pupils to engage with maths problems, using real life scenarios such as buying and selling football players and paying fines for red cards to teach concepts such as budgeting. Since launch, 28 programmes have been completed with 756 pupils involved. Pupils were presented with five questions pre- and post-programme and the results show that Financial Football has led to a significant improvement in the percentage of students who answer correctly. Year four students improved their score from 32% to 73%, and year 5/6 pupils improved their score from 55% to 76%. The project, which involves interactive games around football, is working with Years 4, 5 and 6 pupils and reaching more than 500 primary school children a year. Financial Football has introduced a new maths education programme to increase primary school children’s confidence and understanding of this subject. Liontrust has also supported the building of Newcastle United Foundation’s community home called NUCASTLE, which officially opened in March 2022. One of the classrooms at NUCASTLE is called Liontrust and will be used to work with all members of the local community. Currently, Newcastle United Foundation is helping around 65,000 people across the North-East of England. 37 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() #### PRINCIPAL RISKS AND MITIGATIONS The Group takes a cautious and pro-active approach to risk management, recognising the importance of understanding risks to the business, setting and monitoring risk appetite and implementing the systems and controls required to mitigate them. Liontrust has defined a Risk Universe and uses a Risk Appetite Statement as well as an Enterprise Risk Framework to capture the core risks inherent in our business and assess how they are managed and mitigated, the key indicators that would suggest if the risk is likely to materialise together with an assessment that each risk may have on our regulatory capital. The Risk Department is a business function set up to manage the risk management processes on a day-to-day basis and is responsible for the Group’s Risk Management Framework and how it is integrated into the Group’s internal control system. It is an essential part of the Group’s corporate governance and management arrangements. It provides challenge, an objective review and an assessment of the risks Liontrust faces in seeking to achieve its objectives. Liontrust’s Risk Charter defines the mission, scope of work, organisation, accountability, authority and responsibilities of the Risk Department. It governs how the Chief Risk Officer and other staff of the department discharge their duties and conduct risk management activities within the overall Risk Management Framework of the Group. Our Professional Indemnity Insurance covers us for losses, errors, and fraud. Our current assessment of our key operational risks and our risk management framework suggest that we are not at material risk of breaching our insurance limits, although all our risk appetite and prudential planning incorporates the scenario of a failure of insurance cover. Risk Culture Statement Our risk culture aligns with Liontrust’s purpose of enabling investors to enjoy a better financial future. This statement is a guide for employees and describes the key elements which make up the Liontrust Risk Culture. #### Our Values and Risk Culture POWER • We are trusted and empowered to make decisions given we follow transparent, systematic, and thorough processes. • We believe that a diverse workforce promotes innovation and growth through independent thinking and new ideas. • We are committed to contributing to and benefiting the wider society. • We believe that good governance and stewardship, sustainability and social impact of the companies in which we invest is an essential part of creating shareholder value and delivering investment performance for our clients. • We believe climate change will be a defining driver of the global economy, society and financial markets in the future, and that investors will be unable to avoid the impacts of this. • We avoid excess complexity, appreciating that simple solutions are better and more effective. COURAGE • We are encouraged to “speak up” about any risks or incidents we are concerned about and deal with issues before they become major problems. • We understand that risk management is not about zero risk, but about taking balanced commercial decisions to achieve Liontrust’s goals. • We understand mistakes are inevitable and have the courage to own up to them. • We understand that efficiently learning from mistakes and sharing our good practises is critical to our success. • Potential incidents and near misses are treated seriously and seen as valuable learning opportunities. • We aim to correct the root cause of incidents, rather than implement temporary workarounds. PRIDE • We uphold the highest standards of integrity in all of our actions, treating staff, clients and stakeholders fairly and with respect. • We are encouraged to be transparent and open to provide our customers with information in a way that helps them make the right decision. • We own our risks and firmly understand how the risks we manage can impact the firm. • We are encouraged to follow the spirit of the rules, not just the words. • Senior management lead by example, demonstrating high integrity in and outside the workplace. • We do not turn a blind eye to inappropriate behaviour. • We take personal responsibility for having the due skill and knowledge to do our jobs well. 38 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() Enterprise Risk Management Framework In order to ensure that the Group regularly reviews and monitors all the potential areas of risk to the business, including emerging risks, Liontrust has implemented an Enterprise Risk Management (ERM) framework which allows management, the Audit & Risk Committee and the Board to be kept fully informed of potential risks to the business and also how these risks would impact the group’s capital adequacy and risk appetite. The diagram below summarises the key elements of the Group’s ERM Framework which is based around these risk areas to ensure a consistent approach across the framework. There are three main elements to capturing and reviewing risk within the Group; the Risk Appetite Statement (“RAS”), the ICARA and the regular risk reporting. • The RAS identifies key risks, their materiality and their likelihood of occurrence and sets the amount of risk we want to take or are willing to accept in order to achieve our business objectives. Breakout reporting is completed on the cross-cutting risk themes for further insight, i.e. Reputational, Conduct and ESG related risks. • The ICARA combines the RAS and the Group’s financials together with scenario analysis and stress testing to determine how the realisation of risks might impact on the Group’s capital and regulatory requirements. • The Enterprise Risk Report brings together the ongoing risk identification, management, monitoring and risk reporting across the risk universe to ensure the changing risk environment and the Group’s risk profile versus the RAS is communicated effectively to the Board. The risk and uncertainties that affect the Group’s business can also be broken down into risks that are within the management’s influence and risks that are outside it. Risks that are within management’s influence include areas such as the expansion of the business, prolonged periods of underperformance, loss of key personnel, human error, poor communication and service leading to reputation damage and fraud. Risks outside the management’s influence include pandemics, regulatory change, climate change, falling markets, terrorism, a deteriorating UK economy, investment industry price competition and hostile takeovers. 39 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT Liontrust Board Audit & Risk Committee ICARA Risk Appetite Statement Operational Risk Report Credit Risk Report Portfolio Risk Report Ad hoc risk reports Enterprise Risk Report ![Graphics]() Risk Management Process and Internal controls The broad process for managing risk in the framework essentially follows these steps: Risk Universe The Group has identified 8 Risk Areas across the business activities and functions of the Group and uses these Risk Areas to define, measure and mitigate risk in the business. This forms our risk universe: Define Risk Universe Agree Risk Appetite Manage the Risk Monitor the Risk Risk Description Credit risk Credit risk covers the risk of loss due to a debtor’s inability to pay. The Liontrust Group maintains a liquidity policy document which identifies the credit risks that may affect any area of the business and details how these risks are monitored and controlled. These risks include: • failure of banks / significant counterparties; • failure of a client to pay fees; • failure of a client to pay funds for an investment; and • failure of a fund to pay redemption monies. Market risk Market risk is the risk that the value of assets will decrease due to the change in value of the market risk factors. Common market risk factors include asset prices, interest rates, foreign exchange rates, and commodity prices. Operational risk Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events. The management of operational risk is formalised in a number of ways including risk assessments and scorecards, documented procedures and compliance manuals, a comprehensive compliance monitoring programme (both internal and external), issue tracking and a regular assessment of third party providers. Liontrust manages its operational risk with a framework based upon the Basel Committee on Banking Supervision’s paper “Sound Practices for the Management and Supervision of Operational Risk” using seven operational risk event types that may result in substantial losses including: Business risk The potential strategic, business and legal risks arising from poor strategy, competitive pressure, inadequate due diligence, poor integration of acquisition targets and badly managed divestitures. Client Management The risks associated with poor distribution and poor client service including a failure to meet client needs and suitability / mis-selling. Portfolio Management, Investment and Liquidity risk The risks arising from poor investment returns, incorrect levels of investment risk or liquidity issues in the funds. People / Talent Management The risk of losing experienced and talented staff or a failure to develop or attract staff. Regulatory, Compliance, Conduct and Financial Crime The risk of legal penalties, financial forfeiture and material loss if Liontrust fails to act in accordance with industry laws and regulations. Event Type Description/Examples Internal Fraud Misappropriation of assets, tax evasion, intentional mismarking of positions, bribery External Fraud Theft of information, hacking damage, third-party theft and forgery Employment Practices Discrimination, workers’ compensation, employee and workplace safety and wellbeing Clients, Products, & Business practice Market manipulation, antitrust, improper trade, product defects, fiduciary breaches, account churning Damage to Physical Assets Natural disasters, terrorism, vandalism Business Disruption & System failures Utility disruptions, software failures, hardware failures and disruption due to external events such as war or pandemic Execution, Delivery & Process Management Data entry errors, accounting errors, failed mandatory reporting, negligent loss of client assets 40 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() There are some risks that cut across the risk universe and so are analysed separately such as sustainability risk, conduct risk and reputational risk. Our approach is to individually tag each of the identified risks in the universe accordingly which enables drill-down analysis. Risk Appetite Liontrust have documented a Risk Appetite Statement for each of the Risk Areas. They identify the Key Risks facing the Group, define the Risk Appetite and detail a combination of qualitative and quantitative measures as appropriate to adequately track the identified risks. This includes identifying measures that are not only financially focused, but also measures that align to customer outcomes, reputation and operational risks. The risk appetite approach is consistent across the Group. The risks of each business entity reflects the strategic direction as set by the Group for their risk appetite in the financial year ahead, and gives due consideration to the broad range of internal and external risk factors from the risk universe that impact them. Our overarching financial risk appetite is to have operational risks cost less than one percent of annual adjusted profits. This risk appetite guides our insurance excess and the amount of operational risk we tolerate. Managing Risk The internal control system is designed to manage, rather than eliminate, the risk of failure to achieve business objectives. The Group’s internal control system is based on a “three lines of defence” model summarised in the diagram below: 41 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT Liontrust Asset Management Plc Board LIPPM / LFPPM Front Office Risk Internal Audit Operations Compliance External Audit Sales & Marketing Finance (Controls) AAF Assurance Process Finance (Treasury) IT Security Consultancy Reviews Audit & Risk Committee Business Departments 1st line of Defence 2nd line of Defence 3rd line of Defence Control Departments Other Assurance Providers ![Graphics]() Liontrust’s Business Departments, supervised by the Partnership Committees, are responsible for identifying and managing risk and control activities within their business lines. This is the first line of defence. The Control Departments supervised by the Audit & Risk Committee develop and implement risk frameworks to support the front line and objectively challenge the identification of risk and the design of the controls within the business as a whole. The third line is a review of the risk and control activities in the Group by parties independent from the design, implementation and execution to highlight weaknesses, and provide assurance on the effectiveness and suitability of the internal controls. Risk Registers and RCSAs As part of the ERM framework, the Group maintains department / team level risk registers. Departments complete Risk and Control Self Assessments (RCSAs) in which they detail in the register what risks they own or face, describe the mitigating controls in place and rate the risks in terms of inherent (pre- control) risk and residual (post-control) risk. The resulting risk registers provide a Group-wide bottom-up view of the risks faced by Liontrust. The ERM framework includes a risk definition matrix which enables risks across all departments to be compared in terms of likelihood and impact. Risk Monitoring The Group uses a Risk Scorecard system to track Risk Indicators for measuring levels of risk or to determine levels of Risk Appetite or Risk Capacity in each of the Risk Areas. Each Key Risk has one or more risk indicators associated with it. The Risk Indicators are the key mechanism for tracking of Risk Appetite performance throughout the financial year from a top-down view. They highlight when the Group is approaching pre-defined appetite levels and when action should be considered. The risk registers form a prospective and complementary monitor of risk and are categorised using the Group-wide Risk Areas. The individual risk scores and risk ratings are aggregated into Key Risks and then Risk Areas to produce a Risk Area scorecard and heat map respectively. This forms the Group’s Risk Profile and is designed to allow the Board and senior management to quickly identify areas of concern and compliance with the Group’s risk appetite. Where risk levels are approaching or exceeding appetite, an action plan is agreed, monitored and reported to the Audit and Risk Committee. Risk Profile Each risk register leverages off previous risk registers, various audits and industry sources to identify their risks. Over 900 risks were identified, assessed, and categorised into the standard Liontrust risk area taxonomy. Operational risk categories have been escalated one level in the taxonomy to provide more insight into operational risks. The following heat maps illustrate the highest risk rating within each risk area on the following basis: • inherent risk rating (pre-control – assuming the listed controls were not in place) and • residual risk rating 2023 (post-control – rating given the current effectiveness of controls) The inherent versus residual risk heat maps show a general down and left movement which shows the effectiveness of the mitigating controls on our risks. The heatmaps have been divided into Low, Medium and High risk zones. The red line represents our risk appetite and risks in the high risk zone are hence beyond our risk appetite. On an inherent basis, there are several risks which sit beyond our risk appetite, however on a residual basis, they are mitigated down to manageable levels. In comparison to the previous year, ratings marked red have relatively increased while those marked green have decreased. In comparing the 2023 residual ratings to 2024, the highest risk ratings within each category remained in the same zone, with Client, Products & Business Practice being downrated to a lower rating within the Medium risk zone. Compared to last year, there were 110 new risks, 48 residual risk ratings increased, 698 were unchanged and 50 ratings decreased. The change in the risk ratings is driven by a change in the business environment, increased comprehensiveness of the registers and/or increased understanding of the risks and controls. Number of residual risk ratings categorised as Low, Medium and High for 2023 No risks had an overall high rating and as such all risks were within our appetite. Any risk is rated high which is above our risk appetite and would require a risk mitigation plan to reduce its risk back to within our risk appetite. 48 risk ratings #### increased 50 risk ratings #### decreased #### 0 high rated #### 318 medium rated #### 588 low rated 42 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() Risk Profile Charts Inherent risk Residual risk 2023 Residual risk 2024 Risk Areas 1. Credit Risk 2. Market Risk 3. Operational risk – Internal Fraud 4. Operational risk – External Fraud 5. Operational risk – Employment Practices and Workplace Safety 6. Operational risk – Clients, Products & Business Practice 7. Operational risk – Damage to Physical Assets 8. Operational risk – Business Disruption & Systems Failures 9. Operational risk – Execution, Delivery & Process Management 10. Business risk 11. Client management 12. Portfolio Management, Investment risk and Liquidity 13. People / Talent management 14. Regulatory, Compliance, Conduct and Financial Crime Impact Likelihood Impact Likelihood Impact Likelihood 1 1 1 7 7 7 2 2 2 3 3 12 12 12 8 8 8 4 4 13 13 14 14 14 11 11 11 6 6 6 10 10 10 5 5 5 9 9 9 HIGH HIGH MEDIUM MEDIUM LOW LOW HIGH MEDIUM LOW 13 3 4 43 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() Conduct and ESG Risk Profiles Conduct and ESG risk cut across the risk universe, and due to their importance, we have analysed the Group’s exposures to these risks. The risk registers enable detailed tracking of risks across the business and each risk has been tagged if it is conduct and/or ESG related. The risks are filtered for those related to conduct/ESG and used to generate conduct and ESG risk profile heat maps. For this analysis: • Conduct related risks have been defined as risks which may lead to customer detriment or negatively impacts market stability. • ESG related risks encompass those associated with environmental, social, or governance factors, impacting the Liontrust Group, including its employees, counterparties, and clients. In comparison with the unfiltered risk profile, we observe risks which are significant for the Group and related to conduct and ESG retain their rating, such that those linked with clients’ needs, while those risks less related are rated lower, such as internal distribution target risks. Conduct Risk 2023 vs 2024 Overall the key conduct related risk ratings are fairly similar to the previous year, driven by risks such as staff disputes, trading errors, system failures, outsourcing failures and regulatory breaches which may impact clients and our ability to meet their needs. Conduct Residual Risk 2023 Conduct Residual Risk 2024 Impact Likelihood Impact Likelihood 1 1 7 72 2 3 3 12 12 8 8 4 4 13 13 14 14 11 11 6 6 10 10 5 5 9 9 Risk Areas 1. Credit Risk 2. Market Risk 3. Operational risk – Internal Fraud 4. Operational risk – External Fraud 5. Operational risk – Employment Practices and Workplace Safety 6. Operational risk – Clients, Products & Business Practice 7. Operational risk – Damage to Physical Assets 8. Operational risk – Business Disruption & Systems Failures 9. Operational risk – Execution, Delivery & Process Management 10. Business risk 11. Client management 12. Portfolio Management, Investment risk and Liquidity 13. People / Talent management 14. Regulatory, Compliance, Conduct and Financial Crime HIGH HIGH MEDIUM MEDIUM LOW LOW 44 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() ESG 2022 vs 2023 ESG related risks show a small amount of change over the year. The Group has enhanced controls on ESG evidencing for investments however risks stemming from regulatory change, staff disputes, inducement risk and control change risk either increased or remain a challenge. ESG Residual Risk 2022 ESG Residual Risk 2023 Impact Likelihood Impact Likelihood 11 77 22 3 3 12 12 44 13 13 1414 11 11 6 6 10 10 5 5 9 9 Risk Areas 1. Credit Risk 2. Market Risk 3. Operational risk – Internal Fraud 4. Operational risk – External Fraud 5. Operational risk – Employment Practices and Workplace Safety 6. Operational risk – Clients, Products & Business Practice 7. Operational risk – Damage to Physical Assets 8. Operational risk – Business Disruption & Systems Failures 9. Operational risk – Execution, Delivery & Process Management 10. Business risk 11. Client management 12. Portfolio Management, Investment risk and Liquidity 13. People / Talent management 14. Regulatory, Compliance, Conduct and Financial Crime 8 8 HIGH HIGH MEDIUM MEDIUM LOW LOW 45 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() Top Residual Risks The top-rated risks facing the Group on a residual basis are detailed below. Many of the risks are commercial in nature, reflecting the impact on the Group should anything lead to a sustained decrease in AUM and as such, many of the key risks remain from last year. Risk summary Failure of Outsourced Service Providers Strategic Link Objective 4 Description The failure of an outsourced provider may prevent the company from carrying out its business. Trend Risk Area Business Disruption Controls • Primarily deal with large institutions which are very reliable or are prompt to fix issues. • Outsource Oversight framework, incident management, regular service reviews. • Some tolerances for limited outages. Comment Operating model consolidates services with one primary provider which creates key dependencies and sensitivity to failure. Outsource oversight and engagement is our primary control to ensure services are robust. Risk summary Order Management System (OMS) failure Strategic Link Objective 4 Description Risk faced should our OMS fail – it is the most important system in our trading infrastructure. Trend Risk Area Business Disruption Controls • Trading Resilience Plan. • Direct contact with dealing desk. • Infrastructure continuity testing. Comment The OMS is critical for Liontrust in managing our investment portfolios and meeting our client needs. The Group’s front office infrastructure is undergoing substantial change with a goal of further mitigating this risk. Risk summary Control Change Risk Strategic Link Objective 4 Description Risk stemming from material changes to control infrastructure. Trend Risk Area Business Risk Controls • Oversight by senior managers and specialist external consultants. • Expert staff within first and second lines of defence. • Thorough testing procedures for change. • Industry leading, widely used counterparties. Comment Liontrust is well experienced with managing change efficiently and effectively with its history of no major operational incidents over a number of acquisitions and outsourcing changes. The robust controls around our trading and operations infrastructure has been vital to this success. The upcoming change to our trading and operations infrastructure presents significant opportunity and risk due its complexity and our reliance on the controls in mitigating our highest risks. 46 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() Risk summary Major economic decline / correction Strategic Link Objective 1 Description Major risk-off movement or correction leading to large net outflows. Trend Risk Area Client management and mis-selling – poor service Controls • Diversification of product offering. • Variable cost base. • Typically would expect markets to recovery in medium to long term. • Focus on communication and client retention. Comment Commercial risk which has a high financial impact risk due to market sensitive AUM directly driving revenue generation. Further diversification of products will potentially help reduce impact. Risk summary The risk of poor customer service Strategic Link Objective 3 Description Redemption Mitigation & Management Trend Risk Area Client management and mis-selling – poor service Controls • All sales team members service clients with continual reference to our key holders lists. • Monitoring of sales, client engagement and increased marketing. • Well established brand. • Positive long term performance. Comment Commercial risk of sustained redemption and declining AUM – high financial impact. This risk has materialised for the past few years and has demonstrated how market conditions can trigger and sustain the negative momentum on outflows. Risk summary Loss of key/large clients Strategic Link Objective 1,2 and 3 Description Liontrust’s top clients have considerable holdings which would have a notable impact if they were to withdraw. Trend Risk Area Client management and mis-selling – poor service Controls • Clarity around investment process and strategy. • Keeping clients informed, including webinars and other digital channels. • High client engagement and service levels. Comment High touch engagement strategies by client service, high investment performance and diversification of clients are our key mitigations to reduce the impact. 47 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() Risk summary Risk of target net flows not met Strategic Link Objective 2 and 3 Description Missing targets, could result in profit warnings and reduced returns for Liontrust shareholders Trend Risk Area Client management and mis-selling – poor service Controls • Constant monitoring of sales against targets. • Engaging clients, increased marketing activity. • Well established brand. Comment Strategic objective for continued growth, exposed to macro and style factors. Risk summary Staff disputes / legal action Strategic Link Objective 1 Description Risk of wrongful or unfair dismissal, leading to legal action and costs and potential compensation. Reputational damage and adverse publicity. Trend Risk Area Employment Practices and Workplace Safety Controls • Terminations performed in accordance with procedures. • Close relationship with Employment lawyers. • Positive, inclusive and supportive workplace culture. Comment Acquisitions and poor economic environment correlate with increased likelihood of potential employee disputes. Appropriate training of staff and HR management of people issues are key controls to reduce likelihood but impact is hard to reduce and may have significant reputation and financial impact. Risk summary Trading Errors Strategic Link Objective 4 Description Trading Errors can occur and may result in substantial compensation payments especially if the error is large or not discovered in a timely manner. Trend Risk Area Execution, Delivery & Process Management Controls • OMS is designed to minimise and mitigate the likelihood of error at all states including the initial order creation stage by the Fund Managers and the execution of the trades. • The trades are automatically generated and allocated and rely on as little manual intervention as possible. • Suitable policies are in place on execution, aggregation and allocation. • Procedures have been designed to minimise the risks of trading errors occurring through continual improvements to the workflow and checking rules. • Suitable insurance is in place to cover tail risk events. • Training for Fund Managers and dealers is intended to ensure a clear understanding of the workings of the system. • Reduction of manual processes. Comment Our trading process has robust and thoroughly tested controls, however due to the volume and value of trading completed, it is inevitable that some errors occur. The vast majority of these are small however empirically we can reasonably expected a more significant error in the next five years. The front office infrastructure is undergoing significant change which aims to further mitigate this risk. 48 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() Risk summary Key person risk – Fund managers Strategic Link Objective 1 and 2 Description Loss of key fund managers which could immediately lead to changes in ratings and potential redemptions. Trend Risk Area Execution, Delivery & Process Management Controls • Team approach for fund management rather than individuals. • Succession planning and staff development plans. • Ongoing engagement and communication with clients. • Revenue share and retention model. • Positive, supportive, and inclusive workplace culture. Comment Clients may associate their investment more heavily with the fund manager rather than the investment process or Group, leading to significant redemptions on team changes, primarily for smaller teams. Risk summary Performance – Funds and segregated accounts Strategic Link Objective 1 Description Failure to deliver strong performance or meet client expectations. Trend Risk Area Portfolio Management, Investment risk and Liquidity Controls • Robust, well documented investment processes. • Detailed and transparent performance commentary by Fund Managers shared with Clients. • Ongoing engagement and communication with clients. • Internal oversight of fund composition and performance. Comment Commercial risk that despite sound long term investment processes, we risk underperformance over shorter periods which is often associated with increased redemptions. 49 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() The most material sources of risk for Liontrust are: Over recent years, Liontrust has successfully integrated the Architas and Majedie businesses. There has been a higher risk of operational failures over this period due to the change of systems, controls and procedures as well as changing staff responsibilities. The Group made a significant investment in project oversight and appropriate resourcing, which has mitigated the risks and Liontrust has devoted considerable management time to minimise operational risk arising from the integrations. The learnings from previous acquisitions enable Liontrust to more confidently take on larger and more complex acquisitions. Cybersecurity and information technology risk Liontrust is dependent on our IT infrastructure and systems. A successful cyber-attack could result in the loss of data; disrupt our ability to service our customers or in a worst-case scenario – a loss of clients’ assets. Liontrust has included the management of cyber security into our governance framework for a number of years and have appointed a virtual Chief Information Security Officer to ensure we have the right infrastructure and defences in place. Liontrust also use specialist external consultants to review and test our IT infrastructure and security including penetration testing. All significant contracts, or those with sensitive data are subject to cybersecurity clearance. Remote working brings additional challenges and vectors for cyber risk: a reliance on individual’s internet connectivity, more digital controls, changes in sales techniques, more digital marketing, video client meetings and webinars. There are also the medium-term challenges of working digitally including reinforcing our culture remotely, developing and delivering online projects and improving productivity, recruiting talent and managing successful teams outside of the office. Liontrust undertakes regular incident response training to ensure it is prepared in the event of a successful attack on ourselves or a key outsourced service provider. Beyond our comprehensive IT controls, our best defence against an attack is staff awareness and training to mitigate social engineered or phishing entry vectors. Liontrust demands the same commitment to tackling cybersecurity from its key outsourced providers. Artificial Intelligence (AI) technology has made significant leaps recently in terms of its abilities and accessibilities. AI is expected to have a profound impact on the world, but it is being leveraged by malicious actors to launch ever more sophisticated cyber attacks which drives the need for us to build ever more resilient defences. Outsourcing Risk As we outsource many of our labour intensive operational functions, we commit high levels of resource to the management of these third party providers. We work hard to ensure that the relationship is a collaborative one and that both parties are working together towards the same goals, via a dedicated relationship management team and through a comprehensive monitoring programme. Failure of any outsource provider presents a real threat to the business and our continuity planning incorporates a stepped approach to manage and control these risks. Change Risk Liontrust has undertaking many significant change projects over recent years. These include several acquisitions, outsourcing of critical operational services and currently the transition onto new front office infrastructure. Each change aims to bring Liontrust closer to achieving its mission, however they also present significant operational risk. The operational success of its acquisitions and changes can be attributed to the high quality people, processes and oversight. Liontrust has built a strong diligent culture which is a key mitigation against complacency. The Group leverages its experience to continuously learn and improve, leading to improved capacity and confidence to tackle more ambitious changes. The front office infrastructure change impacts our critical trading systems. Some key areas of risk include: • Sufficient training of Fund Managers, Traders and support staff. • Challenges of redesigning and testing connectivity to and from the new systems to key internal and external counterparts. • Ensuring control processes are reliable, accurate and comprehensive. • Strain on existing resources to manage the transition on top of their BAU workload. Leveraging the expertise of consultants to oversee and project manage the transition is a key control to ensuring the above risks are mitigated. Operational risk The key operational risks that have been identified as potentially having a significant impact on our business or capital are as follows: Trading errors Breach of mandate restrictions Corporate action errors Failure of key supplier or system Consumer Duty risk 50 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() ESG Risk Liontrust may be negatively impacted by an ESG event or issue. There are multiple impacts of ESG or climate on companies. Liontrust may be impacted directly, via our outsource partners or through our investments in companies on our clients’ behalf. The impacts may come from physical risks (extreme weather events, or supply shortages) or from exposure to transition risks which arise from society’s response to climate change (technological change, social upheaval or regulation). These can change business costs, alter the viability of products or services, or alter asset values. There are also legal costs and potential liabilities for climate-related actions. This year we have worked on modelling these potential impacts into our Enterprise Risk Framework as described earlier. Further information on our efforts to manage this risk and integrate ESG throughout our business is in the “Responsible Capitalism” section of this report on page 62. Client Concentration and the risk of redemptions at short notice Liontrust has several large, key clients and relationships. Should a large client leave there is a risk that earnings may be impacted. Liontrust has successfully grown our client base over the last few years and this has reduced the impact of a single client redeeming. Clients are also able to withdraw their assets at short notice. The retail funds have daily liquidity and most institutional mandates have no lock in periods or liquidity constraints. This may mean that in times of crisis assets under management may fall quickly increasing the potential volatility of earnings. This is mitigated by the Group’s variable cost base as described in the Residual risk section above. Competitive Environment Liontrust operates within a highly competitive environment with both local and global businesses, many of which have greater scale and resources. The changes to the regulatory and business landscape have resulted in a greater focus on fees and charges, a growing importance of brand and marketing and distributor relationships. Initiatives such as Consumer Duty and the Assessment of Value promote transparency and enable clients to better compare funds. AI has the potential to dramatically enhance our scalability and efficiency, across the business. Careful consideration must be given to weaknesses of AI, including the management of information controls and the accuracy of output. Firms are at risk of being left behind as the industry begins to incorporate and leverage the technology. Failure to compete effectively in this environment may result in loss of existing clients and a reduced opportunity to capture new business which may have a material adverse impact on the Group’s financial wellbeing and growth. Our governance and leadership help to ensure that the Group remains competitive and does not lose focus. General macro-economic and Geopolitical risk The Group is susceptible to any economic downturn, policy, increased interest rates, exchange rate fluctuations, geopolitical conditions, volatility and or/price increases in energy/ commodity markets and volatility in world markets. Such changes in macroeconomic and political conditions may result in a large fall in the value of assets and therefore substantially and adversely affect the financial performance of the Group. In common with the asset management industry as a whole, the Group may be faced with increasingly challenging investment market conditions with persistently high interest rates and inflation. This along with the macro context of the Ukraine invasion, conflict in Gaza and South China Sea tensions, we have seen significant volatility in certain financial and commodities markets worldwide. The next 12 months bring significant political uncertainty with several major economies undergoing government elections including the US, UK, France, India, Mexico and Taiwan. Changing political regimes may bring changes in regulations and policies which may directly affect Liontrust, our investments and our clients. We continue to consider the impact of these scenarios and any other emerging risks in our business decisions as well as in our capital planning. Liontrust is well capitalised and positioned to weather these changes and take advantage of the opportunities arising. All investment teams consider the investment risks and opportunities that arise as a result of long- term trends in respect to their portfolios. People People are a key part of our business and the stability of our investment and operational expertise is critical to our success. The Group takes appropriate steps to manage expectations and minimise the loss of good quality staff. Any departure of significant personnel may result in a loss of funds under management, especially the loss of one of our fund management teams. Liontrust believes building and maintaining our distinct culture as well as providing a good working environment is key to the future success of our business and the engagement and retention of our staff. We invest significantly in our people, including through ongoing training and qualifications, providing competitive benefits, promoting diversity and inclusion while conducting regular workforce engagement surveys to track our progress. 51 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() SUMMARY OF CONTROLS The main elements of the Internal Controls which have operated throughout the year are as follows: • a clear division of responsibilities and lines of accountability, allowing adequate supervision of staff; • detailed procedures and controls for each department; • the development and implementation of specific accounting policies; • preparation of annual plans and performance targets in light of the overall Group objectives; • an operational risk scorecard measuring risk levels across the Group; • reports from the Executive Directors to the Board on the actual performance against plans; • reports from the Chief Risk Officer highlighting the principal risks faced by the Group detailing the exposures and mitigations in place; as well as the robustness of procedures and controls for each department; • reports from the Head of Finance on controls and risks concerning client money and assets; • reports from the Money Laundering Reporting Officer (MLRO) detailing the arrangements in place for anti-money laundering and financial crime prevention; • reports from the virtual Chief Information Security Officer (vCISO) on cybersecurity and data protection measures; • reports from Internal Audit on the effectiveness of the Group’s systems and controls to the Board; • reports to the Board in respect of the management of, and results of visits to, third parties to whom functions have been outsourced; • compliance by all members of staff with the Group’s policies and statement of business conduct, which seeks to ensure business is conducted in accordance with the highest standards; and • capture and evaluation of failings and weaknesses and confirmation that necessary action is taken to remedy the failings, particularly those categorised as ‘significant’. Effectiveness of Risk Management and Internal Controls The Board has reviewed the effectiveness of the Group’s system of internal controls for the financial year and up to the date of this annual report and financial statements. The Board has carried out a robust assessment of the emerging and principal risks affecting the business, including the principal risks as noted above and has a process in place within the business to control and monitor risks on an ongoing basis, in accordance with the guidance from the Financial Reporting Council’s Guidance on risk management, internal control and related financial and business reporting. The Board is of the view that all necessary actions have been, or are being, taken to address matters identified as part of the ongoing risk management process and that no significant weaknesses were identified during the year. ASSURANCE PROCESS The senior management arrangements, systems and controls environment in place across the Group are reviewed by the Board and Audit & Risk Committee each year. The Group appoint an internal audit function to monitor the appropriateness and effectiveness of its systems and controls. The Audit & Risk Committee and the Internal Auditors have agreed a rolling three year Internal Audit plan. This includes the following Audit areas: front office controls; business resilience, security and governance; risk management; significant financial systems; outsourcing arrangements and client assets. On an annual basis, Liontrust commissions an external accountancy firm, to perform testing of integrity of aspects of the Group-wide control environment. Liontrust has adopted the principles established in the “Assurance Reports on internal controls of service organisations made available to third parties” as recommended by the Institute of Chartered Accountants of England and Wales in the January 2020 technical release of AAF 01/20. RSM UK Group LLP were appointed to test the controls and to produce the AAF report. The results of this testing, including any exceptions identified, are made available to senior management, the Board, the Audit & Risk Committee and our institutional clients. 52 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() STAKEHOLDERS The Group has a significant number of stakeholders whose futures are linked to the success of our business. These significant stakeholders are: • shareholders; • clients; • members & employees; • service providers including those that provide the Group with outsourced functions; • regulators & industry bodies; and • wider society. Each of these groups presents different opportunities and uncertainties and the Group ensures that there is regular contact and monitoring of the various bodies. They are all integral to the future success of the business, detailed below is a summary of why they are important and how we engage with them: • We aim to provide our shareholders with sustainable growth and increasing returns. We regularly engage with our shareholders to support the long-term objectives of our business. • Clients are core to the success of our business. We strive to provide long term performance and meet the needs and expectations of our clients. Treating customers fairly, providing good service and good value is central to how we conduct business across the Group and we continually strive to improve our offering and service. • Liontrust is proud of our people and our culture and they help us to deliver on our vision and obligations to our stakeholders. We continue to invest in our staff to attract, retain, incentivise, develop and encourage the individuals in our company to meet and surpass our current and future objectives. • Outsourcing is an integral part of the Liontrust operating model. Liontrust outsources in two key areas, Transfer Agency and Fund Accounting & Fund Valuation Services across two main jurisdictions. Regular meetings and reviews helps to ensure that the relationship continually improves. • Liontrust acknowledges the importance of working closely and constructively with our regulators and our industry bodies to ensure we run our business in a compliant way and helps to improve the wider financial environment for clients in the longer term. • Liontrust also recognises the wider responsibility we have to society and the importance of doing the right thing. We continue to invest and improve our governance and corporate responsibility including via our community engagement projects to show the positive impact our investment management and corporate activities can have on our clients and wider society. The Section 172 Report within the Corporate Governance statement on pages 83 to 87 provides engagement outcomes and insight into some of the initiatives undertaken and engagement activity with significant stakeholders during the year. 53 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() #### OUR PEOPLE, SUSTAINABILITY AND #### CORPORATE RESPONSIBILITIES Liontrust is committed to building a sustainable business and intends that our principles are embedded into our policies and practices, to the benefit of stakeholders as well as the wider community. OUR PEOPLE Successful asset management firms are based on the quality of their people. We are proud of everyone who works at Liontrust and we invest in their training, wellbeing and development as part of our strategy to retain talented fund managers and staff. Everyone at Liontrust is personally accountable for their commitments and actions; and for delivering on our promises. We are responsible for supporting each other, collaborating, and being open to challenge and debate. All staff have a responsibility to act in the best interests of investors, shareholders and other stakeholders. We seek to uphold the highest standards of integrity in all our actions. We treat all our staff with respect. We are committed to the development of our people and encourage everyone to fulfil their talent and potential. Liontrust recognises the importance of an appropriate work-life balance, both for the health and welfare of employees and for the business. Everyone is encouraged to make decisions. Not every decision will be right, and we have to be confident enough to recognise when they are wrong and change them. Many businesses fail because people don’t make decisions. Employee Engagement Liontrust have a highly engaged, experienced and stable workforce, with over half (57%) of staff having been with the firm for five years or more. Unplanned turnover to March 2023 was 6 % (2023: 11%). We focus on keeping our most talented employees, and our retention of high-performing employees remains strong at 95 % (2023: 100%). AVERAGE YEARS’ SERVICE Less than 1 year 9% 1–5 years 4% 6–10 years 31% 11–15 years 14% 16–20 years 8% 21–25 years 2% Over 26 years 2% 57% 95% #### of employees having been with the firm for five years or more Our retention of #### high-performing employees 54 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() Liontrust encourages open communication and an inclusive culture. Liontrust’s Executive team hold frequent all-staff meetings to provide employees with company updates and to explain and discuss corporate strategies. Our Executives have an open door policy. We also encourage feedback from employees to senior management through more formal forums, including regular team meetings and off-sites to discuss our strategy, as well as through the annual performance appraisal process. Managers throughout Liontrust have a continuing responsibility to keep their teams informed of developments and progress. Workforce Advisory Forum Liontrust’s Workforce Advisory Forum has elected representatives from across the business and includes a Non- executive director. To maintain links with business strategy, the Forum is chaired by the Deputy Head of Finance and supported by HR. The Forum serves as an advisory group to the Management Committees and the Board on matters relating to the workforce of Liontrust. The Forum supports the Company in two-way information sharing on matters of workforce importance which may include engagement, appropriate strategies for the recognition and development of a diverse workforce and development opportunities for colleagues. The Forum engages with and supports other committees which may have complementary agendas for example, the Diversity & Inclusion Committee. During the year the Forum has convened four times with agenda items covering compensation, the financial results and the acquisition of GAM, facilities and building work, the engagement survey, self-development month, performance appraisals, and pension updates. Workforce engagement survey In December 2023, we used a new external software platform to support our annual engagement survey. The overall response rate was 82% which was the same as previous year. This ongoing level of participation is positive considering the potential impact of change on our staff. Our engagement was 71%, which is slightly ahead of other Financial Services firms (measured in January 2024). Engagement looks at how staff describe their commitment to Liontrust, their motivation and pride. In addition to the engagement questions we asked questions around leadership, enablement, action planning from the last survey and personal development. There were high scores for work life balance, interactions with managers, the fact we hold ourselves accountable for delivery and that we support and feel supported. Less positive areas, and where we give more focus are around how we focus on success, give feedback and recognise good work. Following the 2023 survey our HR team have taken each of the Heads of Department through their feedback, along with the teams. This gives everyone the opportunity to hear the feedback pertinent to their team, and how their team compares the rest of Liontrust. This gives staff at department level the chance for customised action planning relevant to their department, and in conjunction with the wider group. The overall response rate to our annual engagement survey was 82% 82% 55 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() Equal Opportunities, Diversity and Inclusion Liontrust believes that its people should be appointed to their roles based on skills, ability and performance and makes all appointments within the guidelines of its equal opportunities policy. We are committed to greater diversity, including gender and ethnicity, and the benefits that this will bring to the business. We are an equal opportunities employer and it is our policy to ensure that all job applicants and employees are treated fairly and on merit regardless of their race, gender, marital status, age, disability, religious belief or sexual orientation. During the year, we reviewed and updated our diversity policy; Senior Management and the Board continue to believe that greater diversity will enhance the performance of the business. Diversity Equity and Inclusion Committee Our established Diversity Equity and Inclusion Committee (DEI Committee) chaired by our COO/CFO provides feedback and recommendations to the Management Committees, Nomination Committee and the Board. The purpose of the Committee is to address the challenges and opportunities arising from the following topics: • Preventing and eliminating discrimination, including unconscious bias. • Raising awareness of the importance and benefits of diversity and equity to enhance our culture and innovation. • Ensuring policies and procedures promote diversity across the company. • Increasing awareness through training, mentoring and coaching. • Highlighting changes required to promote diversity and equity. • Attracting people from diverse backgrounds to join Liontrust and the asset management industry in general. The Committee meets regularly to make progress across this important area. At the outset of the Committee we partnered with GP Strategies to audit our DEI position and conclusions from this audit continue to inform the Committee in developing its strategy. During 2023 we have defined our DEI strategy under 5 strategic DEI pillars: • Clients and Investors • People and culture • Operations and Finance • Governance • Data and Insights With a focus on Training the Committee have organised training for all staff on Inclusion for All and provided an extensive programme of Wellbeing training tailored to both Managers and Staff. Heads of Department completed sessions around ‘Making Inclusion Real’ the objective of which was to consider how the leaders act as change agents for inclusion, and to understand the impact leadership has on how inclusion is felt across the Liontrust. The Committee have hosted events through the year to ensure an inclusive culture and somewhere where everyone can be themselves: • Pride • Black History Month • IWD During the year we have partnered with Mental Health at Work to deliver a well-being and mental health approach. Mental Health at Work, a not for profit, Community Interest Company (CIC) and a subsidiary of the Mental Health Foundation created the bespoke programme for Liontrust based on feedback from our managers and staff with sessions delivered through Spring and Summer. The Board regularly reviews the gender split across the Group and has asked management to address the issue of under representation of women in senior management. Liontrust has improved the diversity of the Board over the last few years currently with 43% female representation. The Board will continue to work to ensure the composition of the Board and the workforce is representative of wider society. As part of the Executive Directors’ strategic objectives, there is a commitment to gender-balanced shortlists of candidates at the beginning of a recruitment process. Liontrust’s current gender balance is broadly 13:9 male:female with men predominating in more senior positions. This reflects the history of the asset management industry, the companies we have acquired and is typical of the financial services industry. The Board and senior management are actively seeking to address this and investing in leadership development at the ‘direct report’ level. Senior management continue to focus on attracting and retaining female talent by updating policies and creating a culture to address the gender balance and gap at Liontrust. As at the 31st March 2024, Liontrust’s total of 213 employees/ partners was broken down as follows: 2024 Male Female Employees 102 83 Members of LLPs 24 4 Total 126 87 For the same period to 31st March 2024, Liontrust’s total of 213 employees/ partners seniority was broken down as follows: 2024 Male Female Heads of Department 13 4 Direct Reports to the Heads of Department 27 30 Other Staff 86 53 Total 126 87 56 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() Liontrust has improved the diversity of the Board over the last few years currently with 43% female representation 43% 57 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() We ensure there is a good gender mix of candidates in all recruitment, removing all-male recruitment processes, providing training to staff on diversity, reviewing our policies to remove unconscious bias and encourage diversity and offering flexible maternity, paternity and shared parental leave and flexible working policies to help support staff. We have signed terms with a female focused search firm. Liontrust tracks and analyses our gender pay gap (the percentage male employees overall are paid more than female employees), and it is more than the average for the financial services sector. Although the gender pay and bonus gaps between female and male employees could be expected to decline gradually as we continue to recruit and develop senior female talent across the business both the Board and senior management are seeking to transition the business more quickly. The McGregor-Smith review on ‘Race in the Workplace’, noted that in 2016, 14% of the working age population are from a BAME background, with this expected to increase to 21% by 2051. BAME individuals made up only 10% of the UK workforce and held only 6% of top management positions in the UK. As at the 31st March 2024, Liontrust’s total of 213 staff was broken down as follows: 2024 White 152 Black 6 Asian 30 Other Ethic or Mixed Group 14 Prefer not to say 11 We will continue to encourage our staff to voluntarily disclose this information as we believe it is important to measure the effectiveness of our initiatives to allow us to make further progress where necessary. The Parker Review sets out achievable objectives and timescales to encourage greater diversity and provides practical tools to support Board members of UK companies to address the issue. The Review recommends that an increase the ethnic diversity of UK Boards by proposing each FTSE 100 Board to have at least one director from an ethnic minority background by 2021 and for each FTSE 250 Board to do the same by 2024. Liontrust already meets this recommendation. In a recent update, each FTSE 350 company will be asked to set a percentage target for senior management positions that will be occupied by ethnic minority executives by December 2027. Although Liontrust do not currently meet the criteria, the Board continue to review appropriate targets for the Company. Investment 20/20 Internship Programme Liontrust first partnered with the Investment Association in 2019 for its Investment 20/20 Internship programme, which introduces young people to the asset management industry on a fixed term contract basis. The initiative helps interns to gain industry knowledge and experience and to develop relationships, enabling them to progress in their careers and providing them with skills to secure a permanent role. As part of the Investment 20/20 programme, trainees have opportunities to meet and network with over 200 of their peers across the industry and participate in social and insight events. Investment 20/20 also provides training on technical and soft skills. We currently have 2 trainees in position, with another who transferred to permanent employment during 2023. Trainees receive hands-on support and training. They have established themselves well in their roles and are actively supporting and contributing to the performance of the teams. Liontrust is committed to supporting our programme graduates to study and gain qualifications as well as offering a range of personal and professional training opportunities during the placements. In addition to the Investment 20/20 programme we have also hosted an intern from the Milken Institute. The Institute conducts research, hosts conferences, and constructs programs and policy initiatives aimed at solving urgent social and economic challenges. It operates with a mission to improve lives around the world. Mentoring and Coaching Programme Liontrust has offered coaching to its staff for a number of years. During 2023 we have defined our approach to formal mentoring with training to mentors and mentees in place in early 2024. The aim of the programme is to support managers and staff to enhance skills, attitudes and behaviours that support their ongoing growth and development as well as the overall performance of the business. In addition to using our learning management system which enhances our internal training, we encourage all our staff to acquire business relevant qualifications and offer support packages to enable them to do so. Our investment professionals are required to achieve standards above the regulatory minimum with a particular focus on the CFA’s Investment Management Certificate (IMC) qualification for investment staff. 58 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() Formal Development Programme During 2023 we continued the investment in a formal development programme for our employees. During 2023 the programme focused on the direct reports to the heads of department, with objectives to increase the effectiveness of leadership at Liontrust, concentrating on: • Purpose • Leadership Identity • How to leverage strengths, recognising weaknesses and preferences • Establishing shared leadership standards and behaviours • Decision making • Conflict confidence One the outputs of the attendees is a ‘Leadership Charter’ which defines the Liontrust leadership purpose, values, identity traits and desired behaviours. This Charter has been used to establish a framework for the development of future talent through 2024. The behaviour Charter is key to our succession planning and talent identification. It has been released to all staff will continue to be embedded in appraisals and development during 2024. To understand how the Charter has been understood by our staff we asked a set of 10 questions related to the behaviours in our engagement survey. The score across those questions had 79% of our staff agreeing or strongly agreeing with the behaviour statements. The feedback is positive and indicates we still have room to improve. Self Development Month During November we had a month focused on Self Development with a series of events and articles to support staff with career development. These included: • A workshop on Career Development Planning. The content focused on exploring working identity, how to drive growth and development and understanding a non-linear career. • Webinar on ‘Sparking Your Own Career Story’ with a communications coach. This session brought insights, applicable tools, and tips to talk about career stories • Face to face workshops on ‘Being your own Coach.’ The session explored fixed and growth mindsets and the impact they can have on performance and common thinking traps and how to overcome them • Career stories from employees – videos from colleagues on their personal and Liontrust career journeys Remuneration We maintain a remuneration approach that promotes a strong customer-centric culture, as well as risk awareness and performance with a good alignment of staff, investor and shareholder interests. Our benefits package provides a generous array of financial, health and well-being, lifestyle and family-friendly options for employees: • We encourage a good work-life balance with generous annual leave and other benefits including cycle to work, season ticket loans and freely available fresh fruit in the offices. • We have a cash ‘wellbeing allowance’ which is paid monthly for staff to put towards any wellbeing initiative they want. • Private medical insurance, comprehensive health checks, eye care, an employee assistance programme with access to confidential counselling support, and a further range of health and well-being options. • Health cash plan which gives access to additional health services not covered under the traditional private medical scheme, such as alternative therapies. • Employer pension contributions to a defined contribution pension scheme. • Life assurance policy and income protection scheme from the first day of employment, providing financial security and protection for when it really matters. We ensure our staff are aware of all the benefits afforded to them and have held webinars with the provider to showcase the terms. We also have dedicated intranet pages devoted to the benefits of working at Liontrust. All-employee Tax Efficient Share Schemes Our Share Incentive Plan (SIP) offers the opportunity for employees to purchase Liontrust shares tax free. To further enhance this, for every share an employee purchases, Liontrust purchases two shares on their behalf. This benefit is offered within the maximum limits as set by HMRC, allowing employees to ‘buy into’ the success of the company in a tax efficient way and is available to all employees who have at least three months service. As of 31 March 2024, 83% of eligible employees opted to participate in the SIP. To give employees the tools to understand how their investment is performing we have consolidated all employee share schemes into a single employee share scheme platform in partnership with Equiniti, who also act as our registrar. 59 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() 86% of staff agree with statements around work life blend 86% 60 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() SAYE Scheme During September 2023 we launched a ‘Save as You Earn’ scheme for employees. This HMRC recognised share saving scheme allows employees to save up to £500 per months from net pay, deducted at source for a period of 36 months. The plan awards options over Liontrust shares a 20% discount to the Liontrust share price on a set date. At the end of the savings period employees can exercise their option and sell the shares, exercise the options and keep the shares, or take all of their savings back. Work-Life Balance, Health and Well-Being Liontrust recognises the importance of an appropriate work- life balance, both to the health and welfare of employees and to the business. Within our benefits offering we include support for both physical and mental wellbeing. We offer private health care that includes mental health support, online GP appointments, physical health assessments and access to an employee assistance programme that provides a 24/7 counselling service, supports employees. We have a group of accredited Mental Health First Aiders who are trained to act as a point of contact and provide initial support, guiding a staff member in need towards the help they need. They are not therapists or psychiatrists, and they play an important role in the overall care of our staff. During 2023 Liontrust focused on Mental Health at work with a series of training tailored to line managers and individuals. We also provided training to line managers and staff on World Menopause day in Understanding Menopause in the Workplace. The training is further supported by new polices in support of Menopause and Menstruation at work Liontrust offers informal flexible working arrangements of a 3:2 split between the office and home. All staff have the option to make use of the informal flexible work arrangements, where their role allows for this. Liontrust continues to offer additional ad hoc flexible working over and above the informal flexible working policy where necessary. Liontrust supports formal flexible working with 8% of our staff with a non-standard contractual work pattern. We have good feedback through our engagement survey with 86% of staff agreeing with statements around work life blend. Living Wage Liontrust is committed to offering fair pay to all by paying staff at least the London Real Living Wage. This means that every member of staff based in London, including contracted maintenance and reception teams, earns at least a “living wage” which is an hourly rate higher than the UK minimum wage that is set independently, updated annually and based on the cost of living in London. Our two offices outside London employ staff who are remunerated above applicable minimum or living-wage requirements. Liontrust does not use zero hours contracts. Liontrust’s Equal Opportunities and Diversity Policies outline that all Liontrust employees (temporary and permanent), partners, contract workers and job applicants are treated fairly and are offered equal opportunity in selection, training, career development, promotion and remuneration. 61 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() #### RESPONSIBLE CAPITALISM Responsible Capitalism is the platform on which Liontrust brings together its ESG integration, stewardship, and sustainability-related activities. Responsible Capitalism is about focusing on what matters most to the Group’s clients, its employees, wider stakeholders and the investments made on behalf of clients. Liontrust points to its investment teams and their respective investment processes in determining what matters most. Each team is expert in managing its funds and understanding its holdings. Where material issues arise, the teams often focus on these topics during engagement and take that engagement into consideration when making investment decisions. Using this focus on materiality, engagement, and (as appropriate) issue management, Liontrust and its investment teams can determine more accurately what to spend time and energy on to provide the best service to clients across every aspect of the Group’s operations. RESPONSIBLE CAPITALISM TEAM The Head of Responsible Capitalism leads a team with a remit to implement the Responsible Capitalism strategy across the Group’s operations. The team provides investment teams with information on material exposures that their investee companies may face. These material exposures include, but are not limited to, ESG-related exposures that could impact the prospects of a company. The Responsible Capitalism team oversees related policies (which are approved by the Responsible Capitalism committee and include the Group’s Engagement policy, Proxy Voting policy, Corporate Governance guidelines, and ESG integration policy); administers Liontrust’s proxy voting (as agreed with each investment team); reports annually on Liontrust’s Responsible Capitalism-related activities; helps to deliver ESG reporting for the Group and its funds, including reports required under European and UK regulations; and plans and implements Liontrust’s net zero commitments across its operations and investment funds committed to net zero. KEY EXPOSURES Liontrust takes account of the exposures that its business faces, works to manage these effectively, and reports on these. Details are on page 46. For Liontrust, two areas to which the Group has exposure are: attracting and retaining talent and the financed emissions that the Group holds in its funds. During 2023, Liontrust took action on both of these exposures. ATTRACTING AND RETAINING TALENT Attracting and retaining talent continues to be a key objective for Liontrust. The Group seeks to achieve this by: Offering employees opportunities for career development/advancement Providing a range of employee benefits Undertaking an annual employee survey conducted every December to monitor employee engagement levels Increasing its focus on DE&I #### These are explored in more detail in the previous section – Our People 62 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() FINANCED EMISSIONS Liontrust notes the FRC’s CRR Thematic review of climate- related metrics and targets. The Group has tried to incorporate as many recommendations as possible. For example, Liontrust includes this section covering financed emissions as a material consideration for an asset manager. LIONTRUST’S COMMITMENT TO NET ZERO Liontrust – across its business and investments – is committed to achieving net zero greenhouse gas emissions by 2050. The Group has undertaken this commitment as part of its fiduciary duty to clients – to understand the key exposures that its investments face and to make well-informed decisions. The Group also feels that this commitment helps it promote well-functioning financial systems as it makes informed investment decisions and takes responsibility for its own financed emissions. NET ZERO ASSET MANAGERS (NZAM) INITIATIVE In May 2022, Liontrust joined the Net Zero Asset Managers’ (NZAM) initiative to adopt formally this goal. Following this initial commitment, Liontrust reported to NZAM in May 2023 on its targets for its operations and investments. The Group published subsequent updates in its CDP submission in July 2023 and to the PRI in August 2023. Information on the Group’s net zero commitment is also in its TCFD report which will be published on its website in June 2024 (for the 2023 calendar year). An initial 42% of Liontrust’s AUM was committed as part of the Group’s joining NZAM in May 2023. This figure rose to 45% as at 31 December 2023. This AUM came from the investment teams who wanted to support the commitment and who felt that it sits comfortably with their individual investment processes. The Group aims for more of its AUM gradually to join the commitment – an aim which should be possible as more carbon data from companies becomes available and as reporting methodologies for different asset classes become more standardised. Liontrust has an engagement plan for investments that are high emitters and which are held in funds that have committed to the Group’s net zero goal. NEAR TERM SCIENCE BASED TARGETS In 2023, Liontrust set near-term science based emissions reduction targets (which were approved by the Science Based Targets initiative, or SBTi) to show the Group’s commitment to reducing emissions in line with the Paris Agreement goals. As part of this, Liontrust commits to 52% of its listed equity and corporate bond portfolios by market value setting SBTi validated targets by 2027 from a 2022 base year. 63 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() THE GROUP’S GHG EMISSIONS The following information summarises the Group’s direct and indirect environmental performance for the calendar year ending 31 December 2023: Category Activity 2022 GHG Emissions (tCO2e) 2023 GHG Emissions (tCO2e) % change SCOPE 1 Stationary combustion Heating oil 13.5 13.6 1% SCOPE 2 Electricity (location-based) Purchased electricity 62.4 51.7 -17% Electricity (market-based) Purchased electricity 3.24 5.98 85% SCOPE 3 Purchased goods & services Spend 5,258 11,671 122% Water Supply 0.743 0.390 -48% Capital goods Spend N/A 44.1 N/A Fuel-and-energy-related activities Heating oil and purchased electricity 10.9 19.9 83% Upstream transportation and distribution Spend N/A 6.62 N/A Waste Recycling 0.0811 0.463 471% Landfill 0.332 0.790 138% Waste to energy 0.0426 0.0432 1.4% Business travel Air travel 246 615 150% Rail travel 12.3 16.8 37% Road travel 46.5 52.9 14% Hotel stays 32.7 17.6 -46% Employee commuting UK commuting 118 112 -4.9% Luxembourg commuting 7.34 8.41 15% WFH UK 59.4 57.3 -3.6% WFH Luxembourg 1.62 1.59 -2% Scope 1 & 2 Total (location-based) 75.9 65.4 -13.9% Scope 1 & 2 Total (market-based) 16.7 19.6 17.2% Total GHG emissions (location-based) 5,869 12,691 116% Total GHG emissions (market-based) 5,810 12,645 118% 64 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() Streamlined Energy and Carbon Reporting (SECR) Table Units UK Luxembourg Total GHG EMISSIONS Scope 1 tCO2e – 13.6 13.6 Scope 2 (location-based) tCO2e 51.4 0.309 51.7 Scope 2 (market-based) tCO2e 5.98 – 5.98 ENERGY CONSUMPTION Electricity MWh 248 5.95 254 Heating oil MWh – 58.2 58.2 Intensities 2022 GHG Emissions Intensity 2023 GHG Emissions Intensity % Change Scope 1 & 2 intensity per Full Time Equivalent (FTE) (location-based) 0.349 0.303 -13% Scope 1 & 2 intensity per FTE (market-based) 0.0780 0.091 17% The emissions intensity calculation is based on a figure of 215.84 Full Time Equivalent (FTE) in 2023. In 2022, a figure of 218 for Full Time Employees, as opposed to Full Time Equivalent, was used. Liontrust will report on a Full Time Equivalent basis going forward to allow for year on year comparison. 2023 data subject to independent limited assurance under ISAE (UK) 3000 and ISAE 3410. The assurance report provided by KPMG can be found in the Responsible Capitalism Report on the Liontrust website. 65 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() TASKFORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (TCFD) Liontrust has prepared the calendar year 2023 TFCD report in accordance with Listing Rules on Disclosure of Climate-Related Financial Information under the FCA rule (captured under LR 9.8.6R (8) and LR 9.8.7R). The report is standalone and is available on the Liontrust website. For calendar year 2023, Liontrust has included reporting on climate scenario analysis, and is therefore now wholly compliant. The 2023 TCFD report has also been prepared in the context of current FCA Consumer Duty requirements. As an asset manager, Liontrust is required to inform its clients of the risk exposures in their portfolios and to communicate this in its FRC Stewardship Code response and bespoke client reporting. The below table summarises Liontrust’s disclosures according to the principal TCFD recommendations: TCFD Category Key Recommended Disclosures Liontrust's Response Governance Disclose the organisation’s governance around climate related risks and opportunities. a) Describe the board’s oversight of climate- related risks and opportunities. b) Describe management’s role in assessing and managing climate-related risks and opportunities. • The Group’s Board has oversight of all Liontrust’s risks and opportunities, including those related to climate change. Rebecca Shelley is the named Non-Executive Director for Responsible Capitalism, including all ESG matters. • The potential impact of climate change on the business and future strategy, and in particular, on the Group’s ability to deliver long-term superior performance, is regularly discussed at Board level. • The Chief Executive Officer is accountable to the Board for overall Group performance, including climate-related risks and opportunities. Strategy Disclose the actual and potential impacts of climate- related risks and opportunities on the organisation’s businesses, strategy, and financial planning where such information is material. a) Describe the climate-related risks and opportunities the organisation has identified over the short, medium, and long term. b) Describe the impact of climate-related risks and opportunities on the organisation’s businesses, strategy, and financial planning. c) Describe the resilience of the organisation’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario. • While over the short to medium term Liontrust does not have high exposure to climate change-related risks (compared to the exposure it has in other areas), the Group does have exposure to different risks related to climate change. • Risks and opportunities have been considered at both the Group level and for financed emissions (investments made on behalf of clients) and in the context of short, medium and long-term time horizons. • Liontrust submitted its first report to the Net Zero Asset Managers’ (NZAM) initiative in April 2023. This commitment bolsters Liontrust’s approach to climate-related strategy both at the Group and the investments level. • For investments, in 2023 Liontrust continued to assess climate scenario testing options and decided to use MSCI’s CVaR metric in its analysis and reporting. Risk Management Disclose how the organisation identifies, assesses, and manages climate-related risks. a) Describe the organisation’s processes for identifying and assessing climate-related risks. b) Describe the organisation’s processes for managing climate-related risks. c) Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organisation’s overall risk management. • At Liontrust, climate-related risk is considered in terms of three main risk categories by the Risk team; Enterprise Risk, Investment Risk and Prudential Risk. • Climate-related risks are integrated into Liontrust’s overall ERM framework and considered in terms of materiality in line with other risks identified in the risk-assessment process. • Liontrust’s exposure to climate change-related risk at the Group level is far less significant than its exposure via its investments. At the investments level, each investment team identifies and manages climate-related risks according to its investment process. • Various climate-related scenarios are included in Liontrust’s internal capital adequacy assessment program to simulate the impact of climate change on the Group’s prudential modelling. Metrics and Targets Disclose the metrics and targets used to assess and manage relevant climate- related risks and opportunities where such information is material. a) Disclose the metrics used by the organisation to assess climate-related risks and opportunities in line with its strategy and risk management process. b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks. c) Describe the targets used by the organisation to manage climate-related risks and opportunities and performance against targets. • Liontrust engaged Good Business to calculate its Scope 1, Scope 2, and Scope 3 (purchased goods & services, capital goods, fuel and energy-related activities, upstream transportation and distribution, waste, business travel, and employee commuting) GHG emissions for the calendar year 01 January 2023 to 31 December 2023. • Liontrust commits to reduce its absolute Scope 1 & 2 (market- based) GHG emissions by 42% by 2030 from a 2022 base year. This near term target is in line with a 1.5°C trajectory and was approved by the SBTi in December 2023. • Liontrust commits to 52% of its listed equity and corporate bond portfolio by market value setting SBTi validated targets by 2027 from a 2022 base year. This Scope 3 portfolio target was approved by the SBTi in December 2023. • Liontrust has also set targets for the proportion of its AUM that has committed to NZAM. 66 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() 67 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() ![Graphics]() # GOVERNANCE Board of Directors 70 Risk management and internal controls report 75 Corporate Governance report 78 Directors’ report 89 Directors’ responsibility statement 94 Nomination Committee report 96 Audit & Risk Committee report 102 Remuneration report 106 ![Graphics]() 70 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS #### BOARD OF DIRECTORS The biographies of the Directors of the Board are listed below and demonstrate the skills and experience of each Director. The Directors work effectively together to contribute to the long-term sustainable success of the Company, both for its shareholders and wider stakeholders. The Board prides itself on its effective and entrepreneurial approach to developing strategy and collectively, with the leadership of the Chair establishes the purpose, values and culture of the Group. CHAIR Alastair Barbour Non-executive Chair Appointed Alastair joined the Board in April 2011 and was appointed Non-Executive Chair in September 2019. Committees Chair of the Nomination Committee. Skills and Experience Alastair has extensive knowledge and experience advising on accounting and financial reporting, corporate governance and management in the financial services sector, both within the UK and internationally. He has over 30 years of audit experience and is a chartered accountant, having trained with Peat, Marwick, Mitchell & Co, and is a former partner of KPMG in both Bermuda and the UK. Alastair has core skills and expertise in the areas of mergers and acquisitions, accounting and financial reporting, corporate governance and management. Alastair’s breadth of experience, focus on culture and strong corporate governance expertise allow him to provide constructive challenge and oversight. Alastair’s in-depth knowledge combined with his prior board experience, having held senior board level positions in several high profile financial services organisations, enable him to lead the Board effectively and are key to the delivery of the Liontrust strategy and the long-term sustainable success of the Company. Other listed directorships Lead Independent Director of the Bank of N.T. Butterfield & Son Limited (NYSE listed) ![Graphics]() 71 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT John Ions Chief Executive Officer Appointed John joined the Board in May 2010. Skills and Experience John has significant leadership and management experience in the financial services sector and in-depth knowledge of the asset management sector. He was previously Chief Executive Officer of Tactica Fund Management, Joint Managing Director of SG Asset Management and the Chief Executive Officer of Société Generale Unit Trusts Limited, having been a co-founder of the business . John was also formerly Head of Distribution at Aberdeen Asset Management. John has core skills and expertise in the areas of mergers and acquisitions, the integration of acquired businesses, regulation, sales and distribution. John is a skilled leader and draws on his substantial experience and knowledge of the sector to lead the Group as its Chief Executive Officer. John’s strong leadership skills, focus on strategic decisions and substantial asset management experience are integral to the delivery of Liontrust’s strategy and the long-term sustainable success of the Company. Other listed directorships John has no external directorships. Vinay Abrol Chief Financial Officer Appointed Vinay joined the Board in September 2004. Skills and Experience Vinay has significant knowledge of financial services having held a number of senior roles within the sector. Vinay joined Liontrust in 1995 and has in-depth expertise in finance, information technology, operations, risk and compliance. After obtaining a first-class degree in computing science from Imperial College London, Vinay worked for W.I. Carr (UK) Limited specialising in the development of equity trading systems for their Far East subsidiaries, HSBC Asset Management (Europe) Limited where he was responsible for global mutual funds systems and at S.G. Warburg and Co. Vinay has core skills and expertise in the areas of mergers and acquisitions, the integration of acquired businesses, finance, operations and regulation. Vinay’s financial and operational expertise and his experience of integrating businesses is vital to the delivery of Liontrust’s strategy and the long term sustainable success of the Company. During the period, Vinay held the role of Chief Operating Officer and Chief Financial Officer until 1st April 2024. Other listed directorships Vinay has no external directorships. EXECUTIVE DIRECTORS ![Graphics]() 72 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS Rebecca Shelley Senior Independent Director Appointed Rebecca joined the Board in November 2021. Committees Member of the Nomination Committee, Audit & Risk Committee and Remuneration Committee. Skills & Experience Rebecca has a wealth of experience acquired through a number of senior and leadership roles held throughout her career. Having been Investor Relations and Corporate Communications Director at Norwich Union Plc from 1998-2000, Rebecca moved to Prudential Plc in 2000, starting as Investor Relations Director, and then becoming Group Communications Director with a seat on their Group Executive Committee. Rebecca also held the role of Group Communications Director of Tesco Plc and was a member of their Executive Committee. Rebecca has held positions on the board of the British Retail Consortium and was a trustee of the Institute of Grocery Distribution. Most recently Rebecca spent three years at TP ICAP plc as Group Corporate Affairs Director and was a member of their Global Executive Committee. Rebecca’s breadth of experience and in-depth knowledge of effective communication ensures she provides oversight, constructive challenge and support to the Board and its Committees to achieve Liontrust’s strategy and the long-term sustainable success of the Company. Rebecca is Liontrust’s named Non-executive Director for Responsible Capitalism, including all ESG matters. Other listed directorships Sabre Insurance Group Plc (Chair) Hilton Food Group Plc Conduit Holdings Limited Mandy Donald Non-executive Director: Chair of the Audit & Risk Committee Appointed Mandy joined the Board in October 2019. Committees Chair of the Audit & Risk Committee. Member of the Nomination Committee and Remuneration Committee. Skills & Experience Mandy has extensive experience in both complex organisations and early stage environments and brings a background of strategic planning, financial and operational management to the Company. Mandy spent 18 years with EY before becoming a Non-executive Director across a wide range of companies. Mandy’s experience from a range of Non-executive and Audit Committee Chair roles allows her to support the Board and its Committees on delivering the Liontrust strategy whilst providing effective oversight and constructive challenge. Mandy is a chartered accountant and holds a Financial Times Non- executive Diploma with a focus in corporate governance. Mandy is Liontrust’s Consumer Duty and Whistleblowing champion. Mandy is also the designated workforce liaison to the Board. Other listed directorships Begbies Traynor Group Plc JP Morgan US Smaller Companies Investment Trust Plc NON-EXECUTIVE DIRECTORS ![Graphics]() 73 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT DETAILS OF THE BOARD’S RESPONSIBILITIES CAN BE FOUND ON PAGE 97 George Yeandle Non-executive Director Appointment George joined the Board in January 2015. Committees George is a member of the Nomination Committee, Audit and Risk Committee and Remuneration Committee. During the period, George held the role of Chair of the Remuneration Committee, stepping down as Chair on 1st April 2024. Skills & Experience George is a chartered accountant with over 30 years’ experience having specialised throughout most of his career in advising clients on executive pay and remuneration. George trained with Coopers & Lybrand (now PricewaterhouseCoopers LLP) before being admitted as a partner in 1989. More recently, George was Operational Leader of the London Region Human Resource Services Business and a Senior Partner of PricewaterhouseCoopers LLP, retiring in December 2013. George has held a number of leadership roles within the financial services sector and brings constructive challenge and independent oversight to the Board and its Committees. Other listed directorships George has no other listed directorships. Miriam Greenwood OBE DL Non-executive Director: Chair of the Remuneration Committee Appointments Miriam joined the Board in November 2023. Committees Member of the Nomination Committee, Remuneration Committee and Audit and Risk Committee. From the 1st of April 2024, Miriam was appointed as the Chair of the Remuneration Committee. Skills & Experience Miriam has spent more than 30 years working for a number of leading investment banks and other financial institutions and has been a Non-executive director of a number of publicly listed and private companies. She is an experienced Non-executive Director and brings extensive financial services experience to the Board. Miriam is the Chair of Aquila Energy Efficiency Trust plc. She was the Chair of Smart Metering Systems plc and was a member of their Remuneration Committee, having previously held the position of Chair, and was the Chair of the Remuneration Committee of River and Mercantile Group PLC from May 2019 to June 2022. Miriam held senior corporate finance and advisory roles at leading investment banks and financial services Miriam qualified as a Barrister and holds a law degree from Queen Mary College, University of London. Miriam is a member of the advisory committee of the Mayor of London’s Energy Efficiency Fund and served three terms on the Board of OFGEM and then as a Senior Adviser. A Deputy Lieutenant of the City of Edinburgh, Miriam was awarded an OBE DL for services to corporate finance. Other listed directorships Aquila Energy Efficiency Trust Plc (Chair) ![Graphics]() 74 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() 75 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT #### RISK MANAGEMENT AND INTERNAL CONTROLS The Board is ultimately responsible for determining the risk appetite, risk strategy and risk management framework of the Group. The FCA have noted that it is for each individual firm to determine, based on its nature, scale and complexity, as well as its attitude to exposure to risk, whether or not to establish a Risk Committee of the governing body. The Group has determined not to establish a separate Risk Committee but to combine it with the Audit Committee, although this is reviewed on a regular basis. The Audit & Risk Committee, on behalf of the Board, is accountable for, and responsible for, overseeing the Group’s financial reporting, risk management and system of internal controls, including suitable monitoring procedures, which are designed to provide reasonable, but not absolute, assurance against material misstatement or loss. The Audit & Risk Committee, on behalf of the Board, is also responsible for keeping under review the scope, results, fees and the independence of the external auditors. The Chief Risk Officer is responsible for overseeing all risk management of the Group and monitors the Group’s risks in a pro-active manner, with all departments fully aware of and managing the key risks appropriate to their responsibilities. All material risks to the business are monitored, appropriate mitigations for each risk are recorded and identified to the Board with markers for those with increased risk levels. Management recognise the importance of risk management and view risk management as an integral part of the management process which is tied into the business model and is described further in the Principal risks and mitigations section of the Strategic Report on pages 38 to 53. GOVERNANCE FRAMEWORK – COMMITTEE STRUCTURE AND DELEGATION OF POWERS The Corporate Governance report on page 78 details the Board’s and the Chief Executive Officer’s responsibilities for organising and implementing the strategy of the Company. The Board has delegated a number of its powers to three subcommittees; the Audit & Risk Committee, the Nomination Committee and the Remuneration Committee. From the 1st of April 2024, the Board has established a Sustainability Committee. The Board reviews and evaluates the ongoing long-term success of the Company ensuring all policies, processes and delegation of powers remain aligned and supports the long-term success of the Company. The Board has delegated the authority for the executive management of the Group to the Chief Executive Officer except where any decision or action requires approval as a reserved matter in accordance with the Schedule of Matters Reserved for the Board. The Schedule of Matters Reserved for the Board is maintained and reviewed on an annual basis, with the last review date being September 2023. The Group has set up two management committees to assist the Chief Executive Officer and manage the affairs of the respective limited liability partnership in accordance with its members’ agreement. The Board regularly reviews the ongoing work of the management committees to ensure the ![Graphics]() 76 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS implementation of the Group’s purpose, values and strategy remain aligned. Details of the two management committees are as follows: Liontrust Fund Partners LLP Partnership Management Committee (“LFPPM”) Areas of Oversight Liontrust Fund Partners LLP (“LFP”) has been appointed as the authorised corporate director, AIFM or authorised fund manager of certain collective investment schemes. LFPPM is responsible for management and oversight of all activities performed by LFP, including (but not limited to): all responsibilities as a regulated firm, including ensuring the Liontrust Funds are managed in accordance with the relevant prospectus and the regulations; the appointment and oversight of delegated investment managers; risk management; consumer duty and the assessment of value; client assets; product approval; oversight of sales and marketing activity; fund valuation and pricing; Fund register and subscription and redemptions; fund management operations including the appointment and oversight of the Depository / Trustee and any third party administrators (including transfer agency and fund accounting); compliance with applicable laws and regulations; financial and regulatory reporting and all other relevant business management functions. Liontrust Investment Partners LLP Partnership Management Committee (“LIPPM”) Areas of oversight LIPPM is responsible for the management and oversight of all activities performed by Liontrust Investment Partners LLP (“LIP”), including (but not limited to): all responsibilities as a regulated firm, including investment management (investment decision- making, appointment of fund managers, investment processes and performance); compliance with applicable laws and regulations; securities dealing; risk management; front office systems; data and research tools; investment compliance; investment operations; product development; sales and marketing activity (including promotion and distribution of Funds); as well as all other business management activities of the firm including human resources, finance and Information Technology compliance. Partnership Management Committee Meetings are held regularly over the course of a financial year. The management committees each have several sub- committees that have been delegated oversight of specific areas and report on these areas to the respective management committee. The sub-committees have been established to help govern and manage the business and assist with the effective oversight of the implementation of the Group’s strategy for the benefit of its stakeholders. Board and Management committees and sub-committees Liontrust Asset Management Plc Main Board Liontrust Fund Partners LLP ManCo (FRN: 518165) Distribution and Product Committee Technology Committee Responsible Capitalism Committee Financial Crime Prevention Committee Portfolio Risk Committee Operations and Outsource Oversight Committee Consumer Conduct Committee Fund Management Committee Client Assets Committee Liontrust Investment Partners LLP ManCo (FRN: 518552) Management Committees of the FCA regulated entities LFP sub-committees Joint sub-committees LIP sub-committees Diversity, Equity and Inclusion Committee Health and Safety Committee Workforce Advisory Forum Liontrust Cares Nomination Committee Remuneration Committee Audit and risk Committee ![Graphics]() 77 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT Sub-committees & Other Committees Overview Client Assets Committee This Committee is responsible for overseeing client money and reviewing how assets are held by the Group and its outsourced providers. The Committee monitors the identifying of client assets, control and procedures in place for handling assets and overseeing any associated risks. Consumer & Conduct Committee\* This Committee agrees and monitors the Group’s approach to clients and how the Group’s responsibilities are discharged. The Committee reviews the suitability of products and monitors customer outcomes. The Committee remains focused on delivering the six outcomes identified by the regulator. Distribution & Product Committee This Committee is responsible for distribution, marketing, and product strategy for the Group, alongside product development, reviews and approvals. Diversity & Inclusion Committee This Committee is responsible for the implementation of diversity focus and inclusion – related initiatives, across a broad range of topics, including mental health throughout the Group. The Committee works to promote inclusivity, tolerance and an open and accessible environment for all employees and partners within the Group. Financial Crime Prevention Committee This Committee is responsible for the management and oversight of all matters relating to the prevention of financial crime for the Group, alongside overseeing any financial crime related risk assessment for the Group. Fund Management Committee This Committee is responsible for ensuring fund management teams receive updates from Trading, Operations, Risk and Compliance on all matters relating to change, governance and regulatory issues impacting the Group. Health & Safety Committee This Committee is responsible for all Health and Safety matters for the Group including the Health and Safety Policy Statement, Risk Assessments, First Aid requirements, Fire Safety and emergency procedures amongst others. Oversight & Governance of Third-Party Services This Committee is responsible for the oversight of all outsourced functions provided by third parties, including those undertaken by BNYM. Portfolio Risk Committee This Committee is responsible for monitoring and overseeing risk and portfolio performance within the Group. The Committee establishes the Group‘s approach to risk management through the implementation of the Risk Management Process, including overseeing risk limits and controls. Responsible Capitalism Committee This Committee is responsible for advising the Group on all matters relating to ESG integration, sustainability, stewardship and ensuring responsible capitalism is interwoven into the Group’s strategy. Technology Committee This Committee is responsible for monitoring and oversight of Technology and Cyber Security across the Group along with ensuring the systems employed within the Group are fit for purpose. Workforce Advisory Forum\*\* This forum discusses all matters impacting the workforce of the Group. A two-way information sharing on matters of workforce importance which may include engagement, appropriate strategies for the recognition and development of a diverse workforce and development opportunities for colleagues. \*This Committee was previously the Treating Customers Fairly Committee. From 31 July 2023, this Committee became the Consumer & Conduct Committee responsible for oversight of Consumer Duty requirements for the Group. \*\*The Board and management committees place significant focus on engagement with the workforce and embedding culture within the Group, as such, Mandy Donald is the designated Board member for the workforce engagement. In March 2024, the management committees reviewed the membership, remit and duties of each sub-committee and established certain new sub-committees with effect from 1 April 2024. ![Graphics]() 78 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS #### CORPORATE GOVERNANCE COMPLIANCE WITH THE UK CORPORATE GOVERNANCE CODE The Board recognises the key value of good corporate governance in ensuring the long-term sustainable success of the Company, generating value for shareholders and contributing to wider society. Good corporate governance is critical to the successful management of a sustainable business. The Company is committed to the principles of corporate governance contained in the UK Corporate Governance Code (2018) (the “Code”). The Code is available at www.frc.org.uk. A review of the Company’s compliance with the Code has been carried out and the Company has applied the principles of the Code and complied with the provisions of the Code, except as detailed below. Further information on how the Company has applied the principles of the Code is set out in this Corporate Governance report and details of the cross-referenced sections are set out below. THE BOARD The Company is led by an effective and entrepreneurial board whose role is to promote the long-term sustainable success of the Company, generate value for shareholders, consider the interests of the Company’s stakeholders, including the workforce and contribute to wider society. The Board is responsible for organising and directing the affairs of the Company and the Group in a manner that is in the best interests of the shareholders, considers the interests of stakeholders, meets legal and regulatory requirements and is also consistent with good corporate governance practices. Details of the Board’s consideration of its stakeholders are set out in the Section 172 Statement on page 83 to 87. DIVISION OF RESPONSIBILITIES The division of responsibilities between the Chair, Alastair Barbour, Senior Independent Director, Rebecca Shelley, and the Chief Executive Officer, John Ions, are clearly established by way of written role statements, which have been approved by the Board. The Chair’s main responsibilities are to lead the Board, ensure that shareholders are adequately informed with respect to the Company’s affairs and that there are constructive relations and communication channels between management, the Board and shareholders. The Chair liaises as necessary with the Chief Executive Officer on developments and ensures that the Chief Executive Officer and his executive management team have appropriate objectives and that their performance against those objectives is reviewed. The Chair holds meetings with the Non-executive Directors without the Executive Directors present on a regular basis. The Chief Executive Officer’s main responsibilities are the executive management of the Group, liaison with the Board Board Leadership and Company Purpose Annual Report Reference Provides shareholders with information on the Company’s purpose, values and strategy, an overview of the work undertaken by the Board to promote the long-term sustainable success of the Company and how the Board has considered stakeholders interests See page 78 Division of Responsibilities Provides shareholders with information on the division of responsibilities between members of the Board and the committees of the Board and details the effective operation of the Board See page 78 Composition, Succession and Evaluation Provides an overview of the Board composition, the work of the Nomination Committee which includes succession planning and details of the Board evaluation process See page 70 and the Nomination Committee Report on page 96 Audit, Risk and Internal Control Provides a report from the Audit and Risk Committee on the work undertaken during the year to oversee the Company’s external audit and internal audit, the integrity of the financial statements, risk management oversight and review of the risks that the Company is willing to take to achieve its long-term strategic objectives See the Audit and Risk Committee Report on page 102 Risk management and internal controls page 75 Principal risks on page 38 Remuneration Provides a report from the Remuneration Committee on decisions made by the Remuneration Committee and the oversight of the Group’s remuneration practices to ensure that they are linked with the successful and sustainable delivery of the Company’s long-term strategy See the Remuneration Committee Report on page 106 ![Graphics]() 79 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT and shareholders, the development and management of the strategy of the Group, the management of the senior leadership team, oversight of the sales and marketing teams, and to be an innovator and facilitator of change. The Chief Executive Officer discharges certain of his responsibilities in relation to the executive management of the Group via two partnership management committees as detailed in the Risk management and internal controls report on page 75. The Senior Independent Director’s main responsibilities are to provide a sounding board to the Chair, lead discussions related to the succession of the Chair and serve as an intermediary for the other directors and shareholders. The Non-executive Directors’ role has the following key elements: • constructively challenging, and contributing to, the development of the strategy of the Company and the Group; • providing well considered and constructive opinions and specialist advice to the Board based on significant industry experience; • scrutinising the executive management team’s performance in meeting agreed goals and objectives, and monitoring the reporting of performance of the Board; • satisfying themselves that financial information is accurate and that financial controls and risk management systems are robust and defensible; and • being responsible for determining appropriate levels of remuneration for Executive Directors and a prime role in appointing (and where necessary removing) senior management and in succession planning. COMMITTEES The Board has established an Audit and Risk Committee, Nomination Committee and Remuneration Committee. The composition of these committees complies with the provisions of the Code. In March 2024, the Board approved the establishment of a board level Sustainability Committee. The Sustainability Committee comprises independent Non-executive Directors and is chaired by Rebecca Shelley, Senior Independent Director. The Chair is not a member of this committee. The Chair is not a member of the Audit and Risk Committee or the Remuneration Committee, but attends these meetings at the invitation of the chair of the respective committee. Each committee of the Board has formally documented the duties and responsibilities delegated to it, by way of terms of reference, which are available on the Company’s website. BOARD COMPOSITION As at 31 March 2024, the Board comprised seven directors: the Chair, four independent Non-executive Directors and two Executive Directors. As previously announced, Miriam Greenwood was appointed as a Non-executive Director in November 2023 and was, with effect from 1 April 2024, appointed as the Chair of the Remuneration Committee. George Yeandle intends to retire at the AGM in September 2024, having served nine years on the Board. At all times throughout the relevant reporting period, at least half of the Board, excluding the Chair, comprised independent Non- Executive Directors. Diversity, equity and inclusion have continued to be a key focus for the Board and Company. At 43%, rising to 50% when George Yeandle retires from the Board at the 2024 AGM, the Board complies with the Hampton-Alexander Review target of 33 per cent. female representation on the Board, and, following Miriam Greenwood’s appointment, the FCA’s gender representation target of 40 per cent. female representation on the Board. The Board further complies with the FCA’s targets that at least one senior board position is held by a woman, with Rebecca Shelley serving as the Senior Independent Director. The Company continues to comply with the recommendations of the Parker Review and the FCA target that at least one Board member should be from an ethnic minority background with Vinay Abrol serving as the Chief Financial Officer. The Board has determined that the balance achieved between the Executive Directors and Non-executive Directors is appropriate and effective for the control and direction of the business. The Non-executive Directors continue to bring objectivity, constructive challenge and independent oversight to the Board and complement the Executive Directors’ skills, experience and detailed knowledge of the business. No individual or group of individuals dominates the Board or its decision making. George Yeandle, Rebecca Shelley, Miriam Greenwood and Mandy Donald have been determined by the Board to be independent. In making such determination, the Board found each Non-executive Director to be independent in both character and judgment. There are no relationships or circumstances which are likely to affect or appear to affect the independence of these Non-executive Directors. The Board has considered the length of service of each of these Non-executive Directors. George Yeandle intends to retire at the AGM in September 2024, having served nine years on the Board as at January 2024. The Board has considered this and agreed that, in order to facilitate an orderly handover to Miriam Greenwood as Chair of the Remuneration Committee, it is in the best interests of the Company that George Yeandle remain on the Board and retire at the AGM. Notwithstanding the length of George Yeandle’s service, the Board is satisfied that he remains independent of mind and character and has determined that he should continue to be treated as independent. Accordingly, the Board considers these Non- executive Directors to be independent. OPERATION OF THE BOARD The Board meets on a scheduled basis six times per annum and on an ad-hoc basis to consider specific items of business as the need arises. Meetings are usually held in person in London. ![Graphics]() 80 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS At each scheduled Board meeting, a report from the Chief Executive Officer, John Ions, covering Strategy, Distribution, Fund Performance, Fund Management and Corporate matters and the Chief Financial Officer, Vinay Abrol, covering Finance and Operations, are tabled for discussion. The Chair of each Board Committee reports on its activities since the last Board meeting. The Chair, the Executive Directors and Company Secretary liaise sufficiently in advance of each meeting to finalise the agenda. A comprehensive set of papers are circulated before Board and Committee meetings. The Board has a formal schedule of matters reserved for its decision which it has reviewed and approved in the past year. Examples of these matters include the approval of the Group’s strategy, acquisitions and disposals, approval of half-year and full year financial statements, approval of major capital contracts, property leases, appointments to the Board and the oversight of corporate governance matters. Board & Committee Attendance During the year, the Board held 13 Board meetings, which include both scheduled and ad–hoc meetings to approve specific transactions, as well as meetings to approve the Company’s full and half year results. Board and Committee Member attendance at meetings is set out below: Board Audit & Risk Committee Remuneration Committee Nomination Committee Meetings held in the year 7 6 6 6 Directors’ attendance throughout the reporting period (Committee membership shown in brackets) Non–Executive Directors Alastair Barbour (Nomination) 7/7 – – 6/6 Mandy Donald (ARC, Nomination, Remuneration) 7/7 6/6 6/6 6/6 Miriam Greenwood Appointed to the Board in November 2023 (ARC, Nomination, Remuneration) 3/3 2/2 3/3 2/2 Rebecca Shelley (ARC, Nomination, Remuneration) 7/7 6/6 6/6 6/6 George Yeandle (ARC, Nomination, Remuneration) 7/7 6/6 6/6 6/6 Executive Directors Vinay Abrol (No Committees) 7/7 – – – John Ions (No Committees) 7/7 – – – Ad-hoc Board Ad-hoc Board meetings held in the reporting period 6 Non–Executive Directors Alastair Barbour 6/6 Rebecca Shelley 6/6 Mandy Donald 5/6\* George Yeandle 6/6 Miriam Greenwood 0/0 Executive Directors Vinay Abrol 6/6 John Ions 5/6\* \*Mandy Donald and John Ions were each unable to attend one ad hoc Board meeting due to a prior engagement. ![Graphics]() 81 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT In January 2024, the scheduled Board meeting was held over two days, which is reflected in the table above as two scheduled meetings. Where a Board or Committee Member was unable to attend a meeting, they were provided with the meeting materials, given the opportunity to raise questions to be tabled at the meeting (if appropriate) and were briefed on the discussions held, actions assigned and outcomes following the meeting. Directors may attend a Committee meeting for information purposes at the invitation of the Chair of that Committee. They are not part of the deliberations or decisions of that Committee. Where a Director attends a Committee of which they are not a member, this has been excluded from this analysis. Executive Directors attend Committee meetings at the invitation of the Chair of the Committee and when required if they are presenting matters for the Committee to consider. RESOURCES The Company Secretary advises the Board on all governance matters. All Directors have access to the Company Secretary’s service and advice. The appointment and removal of the Company Secretary is determined by the Board. Directors may take additional independent professional advice at the Group’s expense in furtherance of their duties. COMMITMENT The Board requires all Directors to devote sufficient time to their duties and to use their best endeavours to attend meetings. The Board reviews the policies, processes, information, time and resources it needs in order to function effectively and efficiently and confirms all Board members have had sufficient time to meet their board responsibilities and that they are able to provide constructive challenge, strategic guidance and oversight of management. Where an ad hoc meeting is called on short notice, it may not be possible for all Directors to attend this meeting. In these circumstances, papers are circulated to all Directors, the views of the Director are sought in advance of the meeting and a report provided to the Director after the meeting. Meeting times are set to maximum attendance. Neither of the Executive Directors are on the board of a FTSE 100 company. The Non-executive Directors have disclosed to the Company Secretary their significant commitments other than their directorship of the Company and have confirmed that they are able to meet their respective obligations to the Company. The appointment process for Non-Executive Directors is led by the Nomination Committee and considers other demands on Directors’ time. Additional external appointments are required to be approved in advance by the Nomination Committee. The Nomination Committee Report contains further details in respect of the time commitments of the Non-executive Directors. CULTURE The Board is responsible for setting the purpose, values and strategy of the Company and for ensuring that these are aligned with the Group’s culture. The Board strives to ensure that the Company’s culture promotes integrity and openness, values diversity and is responsive to the views of shareholders and stakeholders. The Directors act with integrity and lead by example, setting high standards to promote the desired culture across the Group. The Board assesses and monitors culture regularly through the reports received from senior management, the HR reports received and discussed at the Nomination Committee and Compliance reports received by the Audit and Risk Committee. Understanding our workforce’s views is an important element of monitoring and assessing the Group’s culture and ensure that Liontrust’s values and desired leadership behaviours are embedded across the Group. The Board and Nomination Committee considered the results of the annual employee engagement survey. Mandy Donald is the designated workforce liaison to the Board and provides regular updates to the Board on the activities of the workforce advisory forum. Through these activities, the Board is able to build up a clear view on the culture in the Group. In 2023, John Ions announced the publication of the Liontrust Leadership Charter at a Town Hall meeting. The Liontrust Leadership Charter was developed by senior leaders across the business through a series of focused externally facilitated workshops. The Liontrust Leadership Charter sets out a combined leadership purpose and agreed leadership behaviours under four agreed goals: to be accessible and inclusive; to be entrepreneurial and business focussed; to strive for excellence and to act with fairness and integrity. Compliance training is provided on the FCA’s conduct rules and annual certification is undertaken for all certified staff and senior managers in accordance with SM&CR, which includes a fitness and propriety assessment. A report from the Chief Compliance Officer is provided to the Remuneration Committee to ensure that conduct is considered as part of the reward assessment process. The Board seeks assurance from the Executive Directors and senior management that conduct matters are appropriately dealt with and escalated if necessary. CONFLICTS OF INTEREST Directors are aware that they have to inform the Board of any conflict of interest they might have in respect of any item of business and absent themselves from consideration of any such matter. At the start of every Board and Committee meeting, Directors are requested to declare any actual or potential conflicts of interests and in the event a declaration is made, conflicted Directors can be excluded from receiving information, taking part in discussions, and making decisions that relate to the potential or actual conflict. The Group has in place a conflicts of interest policy which has been approved by the Board. ![Graphics]() 82 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS PERFORMANCE EVALUATION The Board conducts a formal review and rigorous evaluation of its own performance and that of its committees. The evaluation process is constructively used to improve Board effectiveness, maximise strengths and address any weaknesses. Following the externally facilitated review in 2023, the 2024 effectiveness review was conducted internally by the Chair supported by the Company Secretary. An online questionnaire was drafted by the Company Secretarial team, reviewed and agreed by the Chair and issued to all Directors. The questionnaire includes free text boxes to facilitate individual feedback on certain questions. Further detail of the evaluation process is included in the Nomination Committee Report. The Executive Directors have been subject to a formal performance appraisal. These appraisals were carried out in 2024 and in all cases their performance was appraised as continuously effective. The performance of the Non-executive Directors during the year to 31 March 2024 has been reviewed by the Chair. The review has confirmed that the performance of the Non-executive Directors is effective and appropriate. APPOINTMENTS TO THE BOARD Board appointments are overseen by the Nomination Committee. The Nomination Committee leads the process for Board appointments and considers the balance of skills, experience and knowledge on the Board. It ensures that there is a formal and rigorous process for appointments to the Board. Further information on the activities of the Nomination Committee can be found in the Nomination Committee Report on page 96. INDUCTION, PROFESSIONAL DEVELOPMENT AND TRAINING The Company Secretary arranges a comprehensive preparation and induction programme for all new Directors. This programme includes meetings with the Executive Directors and members of senior management including the Chief Compliance Officer and Chief Risk Officer, meetings with the internal and external auditors and meetings with the Company Secretary on the Group’s governance framework. Every Director is entitled to receive appropriate training and guidance on their duties and responsibilities. Continuing professional development is offered to all Directors and the Board is given guidance and training on new developments, such as new regulatory requirements. During the review period, the Board received in person training on cyber security, net zero and science based targets, the Consumer Duty, SM&CR and the Market Abuse Regime. In order to promote awareness and understanding of the Group’s operations, the Chair ensures there are additional opportunities for the Non-executive Directors to meet with senior management outside of the Board and its Committees. DIRECTOR ELECTION AND RE-ELECTION In line with best practice set out in the Code, the Board requires that all Directors retire and offer themselves for re-election annually at the Company’s Annual General Meeting. The skills, competencies and experience of each Director is set out on page 70 in support of each Directors re-election. AGM At the Company’s Annual General Meeting held in London on 21 September 2023, all resolutions were passed with the requisite majority. The Board welcomed the opportunity to engage with shareholders at the AGM in person. The format of the meeting allowed for questions from shareholders in advance of the business of the meeting. Shareholders who were unable to attend in person were able to submit questions to the Board by email in advance of the meeting. The 2024 AGM will be held in London on Thursday 19 September 2024. SHAREHOLDER ENGAGEMENT The Chief Executive Officer and Chief Financial Officer have regular meetings with existing and potential new shareholders. The views of shareholders are reported back to the Board. The Chair and/or Senior Independent Director may meet with shareholders at their request. Each year, in advance of the Company’s AGM, the Company engages with key shareholders to seek their voting intentions and to offer further engagement with Executive and Non- Executive Directors. In addition, the Company further engages with the major proxy advisor organisations in order to ensure their voting recommendations are fair and reasonable and take full account of the published information available to them through the Company’s published financial report and accounts and website. EXPLANATION OF NON-COMPLIANCE WITH THE CODE Provision 19 of the Code sets out that the Chair should not remain in post beyond nine years from the date of their first appointment to the Board except in limited circumstances. The tenure of the Chair exceeds this recommended period. The Nomination Committee Report provides a detailed explanation for this departure from the Code and of the succession planning steps that will be taken to bring about effective succession and ensure the development of a diverse Board. Provision 10 of the Code sets out the circumstances that are likely to impair or could appear to impair a Non-executive Director’s independence, including where a director has served on the Board for more than nine years from the date of their first appointment. As highlighted above, George Yeandle’s tenure on the Board exceeds nine years and he will retire at the AGM in September 2024. Although there is a short period of non- compliance with Provision 10, the explanation for this has been detailed above and this departure from the Code will cease in September 2024. ![Graphics]() 83 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT SECTION 172 REPORT Introduction Section 172(1) of the Companies Act 2006 requires the Directors to act in a way they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to: • the likely consequences of any decision in the long term; • the interests of Company’s workforce; • the need to foster the and the interest of its stakeholders; • the need to foster the Company’s business relationships with suppliers, customers and others; • the impact of the Company’s operations on the community and the environment; • the desirability of the Company maintaining a reputation for high standards of business conduct; and • the need to act fairly as between members of the Company. This Section 172 Statement sets out how the Directors have discharged this duty. The Board considers its primary stakeholders to be shareholders, clients, members and employees, suppliers and service providers, regulators and wider society. Liontrust has sought to build closely aligned and trusted relationships with its shareholders, to act responsibly, openly and successfully when managing investments for its clients, to be known as a good employer, to engage fairly with suppliers and to take account of its wider responsibilities for the community and environment. Whilst the publication of a Section 172 Statement is a statutory requirement, the Board believes that maintaining a reputation for high standards in these areas should naturally be embedded in the culture and business practices of a reputable investment management business, and that seeking a measured balance between the interests of all members is more likely to promote the long term sustainable success of the business as a whole. The Board’s decision-making process considers both risk and reward in the pursuit of delivering the long term success of the Company and the interests of the Company’s stakeholders. The Board engages with stakeholders through a combination of information provided to it by management and direct engagement with stakeholders where appropriate. The Strategic Report from pages 16 to 26 sets out in depth our strategy, our principal strategic objectives and our values, whilst describing some of the actions, initiatives and contributions made by different parts of the firm; together setting out how these interact for the benefit of our significant stakeholders. The following provides engagement outcomes and insight into some of the initiatives undertaken and engagement activity with significant stakeholders during the year. Shareholders Shareholder interaction facilitates the discussion of strategic developments and to understand shareholder views on the performance of the Group against its strategic objectives. The Executive Directors routinely attend meetings with major shareholders, including roadshows following the annual and half year results announcements. The Senior Independent Director also meets major shareholders, either alongside the Executive Directors or without their attendance to enable more direct feedback. Board members interact with shareholders through general meetings or on ad hoc matters, such as the engagement by the Chair of the Remuneration Committee on remuneration matters. The Board routinely receives and reviews reports summarising shareholder interaction and feedback thereon. During the review period, the Company held two General Meetings in July 2023, to approve the proposed GAM transaction and the reduction of capital, and the Company’s AGM in September 2023 providing the opportunity for shareholders to interact directly with the Board. Shareholders are able to email questions to the Board in advance of General Meetings and raise questions at the General Meeting in person. Where possible, all members of the Board attend the General Meetings and AGMs and welcome the opportunity to meet and engage with shareholders. Liontrust seeks to keep shareholders appraised of corporate developments through its public website via a combination of published shareholder information, trading updates, results presentations and other RNS announcements. Shareholder engagement is also undertaken on behalf of the Group by its appointed corporate brokers, whilst research published by a number of other brokers, with whom the CFO frequently liaises, provides additional coverage. ![Graphics]() 84 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS Clients Our clients entrust us with the investment of their assets. We focus on understanding our clients’ needs and investment objectives to deliver on our purpose – to enable investors to enjoy a better financial future. Our clients are the investors in Liontrust funds, the entities for whom we manage segregated investment mandates and the industry professionals that utilise our model portfolio service; together the overwhelming source of Group revenues. All Liontrust investment strategies have clearly defined objectives, and our reporting thereon is transparent and regular through our public website, dedicated client web portals and data venues deemed to be appropriate to our clients. We pride ourselves on the quality and the longevity of our relationships across the breadth of our client base. Trust, built over time through our client interactions, is the cornerstone of these relationships. We seek to validate the trust our clients have placed in us by always behaving fairly, honestly and with transparency. Each year we undertake surveys and market research with professional intermediaries, clients and retail investors. These include near monthly surveys on the Liontrust brand and marketing content. semi-annual research on investors’ viewpoints on various topic including Liontrust services, and annual research on whether Liontrust is providing value for money, with outcomes shared with clients through the annual Assessment of Value Report, which is available on the Liontrust website. The Liontrust sales team is highly active, maintaining direct relationships with professional clients and the advisors of retail investors, with thousands of interactions each year. Engagement is through routine and ad hoc meetings, video and audio calls, as well as presentations at industry conferences and our own investor events. Sales team specialisms, which cover multi asset, single investment strategies and sustainability, include individuals with dedicated institutional and specific geographical areas of focus in the UK and continental Europe. During the year fund managers presented to professional investors at large scale events and include Liontrust specific presentations, industry-wide seminars and client specific conferences. An important element to our client engagement is via digital media, available via our website and other platforms. The website has a dedicated webpage in relation to educational content which is routinely expanded. The Liontrust webpage is available for personal investors when they visit the website and for distributors to use with their clients. The Liontrust website has separate customer journeys for different users, including one for professional advisers based in the UK and another for personal investors. The Board receives a Sales and Distribution Report and Marketing Report in each quarterly set of Board papers. The Chief Executive Officer, John Ions, reports on client demand, sales and investment performance at each quarterly Board meeting. The Consumer and Conduct Committee considers complaints data, the support of vulnerable customers and the implementation of the Consumer Duty. Mandy Donald, the Consumer Duty Champion, reports on this to the Board to ensure that there is appropriate focus on good consumer outcomes. ![Graphics]() 85 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT Members and Employees The Board recognises the importance of ensuring the Group attracts and retains an engaged, committed and talented workforce. The Board seeks to continually engage with members and employees and is committed to their ongoing training and development. We seek two-way engagement throughout the firm; structured between the Board and line managers through Board Committees and between line managers and their reports through routine team meetings and performance appraisals. More so, as a firm of our size and few office locations, there is natural interaction between colleagues across department and levels of seniority, which is encouraged and supported by the Board through a programme of ‘lunch and learn’ events, aimed at developing collaboration across departments. We aim for a positive working experience with a considered work-life balance, family friendly policies, training & development plans and providing support for physical and mental wellbeing. The Board understands the importance of ensuring members and employees feel part of the success and development of the Group. The Directors have overseen and supported the Company’s actions in maintaining a talented workforce, including the development of a Senior Leadership programme to enhance current skills, ensure future ‘bench strength’ and engender commitment through common purpose and values. This involved three cohorts of individuals who display leadership potential drawn from across the Liontrust business undertaking a series of externally facilitated leadership masterclasses and workshops. During the review period, the Liontrust Leadership Charter which articulates the desired effective and inclusive leadership behaviors has been shared Group wide and positively received by the workforce. We routinely encourage the provision of feedback through staff surveys. A firmwide annual workforce engagement survey was undertaken and the results reviewed by the Nomination Committee. The departmental results are shared with the relevant Heads of Department and HR works with them to develop action plans to address any lower scoring results of the survey in their department. The Remuneration Committee includes metrics linked to diversity & inclusion within the annual bonus consideration for the Executive Directors. The Nomination Committee receives information at every meeting in relation to recruitment, retention, promotion and talent development of employees and members within the Company with a focus on increasing diversity and inclusion. Mandy Donald has been designated as the non-executive director responsible for overseeing employee and member engagement and throughout the year attends committees and forums established to support employees and members. Liontrust operates a Workforce Advisory Forum to advise management of issues relating to the workforce. These forums, which have sought representation across departments and locations met a number of times during the financial year. Mandy Donald attends the Workforce Advisory Forum and reports on these matters to the Board. It has been a particularly active year for the Diversity, Equity & Inclusion Committee, details of these activities are included in the Nomination Committee Report on page 96. The Liontrust Social Committee continues to arrange events that provide opportunities for colleagues across the firm to engage and participate in areas of interest outside work, such as a book club, sports participation and other interest events. ![Graphics]() 86 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS Suppliers and Service Providers The provision of high-quality services to us by our key suppliers is integral in enabling us to deliver our services to our clients. We seek to conduct ourselves fairly and to maintain a reputation as a trusted and reliable partner. The Group is committed to procuring work and services from suppliers in an ethically, sustainable and environmentally sensitive way and seeks to ensure that suppliers follow similar practices. The Group encourages competition amongst suppliers whilst purchasing is undertaken in a reasonable and objective manner. We seek to pay our suppliers promptly and if in dispute, to engage openly to ensure fair resolution in a timely manner. The day-to-day responsibility of managing supplier relationships sits with the head of each business area; for example, the trading team engages with brokers, the IT team engages with network and communication suppliers and the operations team engages with fund governance and administration providers, fund platforms and other areas of our operational investment infrastructure delivery. Heads of department communicate the effectiveness or otherwise of external service partners to the Board, either directly or via appropriate Board Committees. Liontrust has in place a contract management system that integrates due diligence for appropriate standards on Modern Slavery in our contract approval procedures. We periodically seek evidential confirmation from our key outsource providers and service providers that they also follow a policy of zero tolerance of slavery or human trafficking. All Liontrust staff are required to undertake mandatory training. No breaches were identified in the year. The Board reviews and approves Liontrust’s Modern Slavery Statement annually. The Company’s regulated UK subsidiaries undertake payment practice reporting and aim to pay all undisputed invoices within 30 calendar days of receipt. Regulators Constructive engagement with our regulators helps to ensure a fair financial framework for our business and our clients. Our core activities are undertaken by group entities that are authorised and regulated by the Financial Conduct Authority (“FCA”). We also undertake activities under the jurisdiction of other regulators or state authorities, including the Central Bank of Ireland, the Commission de Surveillance du Secteur Financier (Luxembourg) and the Securities and Exchange Commission (USA) and the Information Commissioner’s Office (UK) with regards our obligations under data protection. We are aware of and abide by the rules as applicable to our activities in each territory, and ensure our engagement is appropriately open, timely and transparent. We engage directly with our regulators through periodic mandatory reporting and on an ad hoc basis in response to broader FCA consultations or as warranted by regulatory change or events. We also engage indirectly with regulators via a number of routes, such as: • the management companies of our Irish investment funds • external regulatory audit processes such as CASS audit reporting in the UK and Long-form reporting in Luxembourg. • active participation through our trade body, the Investment Association, including Liontrust representation on IA led committees, working groups and discussion forums. The Board and Audit Committee receives periodic reports from the Compliance and Risk departments, detailing our risk management framework, our regulatory processes and our periodic engagement with regulators, with further review and reporting undertaken by our Internal Audit function. The implementation of the FCA’s Consumer Duty regulation has continued to be an area of focus in the past year. A Consumer and Conduct Committee was established and has been operating effectively during the period. The management information it reviews is structured around the four Consumer Duty outcomes. The Consumer and Conduct Committee considers matters related to culture, conduct and competence, products and services, price and value, consumer understanding and consumer support. Following the results of consumer panel testing, changes were made to Liontrust’s website including the addition of an accessibility tool bar. A Vulnerable Customer’s Policy was implemented during the period and work undertaken to continue to identify and support vulnerable customers. Mandy Donald acts as the Consumer Duty Champion, attends meetings of the Consumer and Conduct Committee and reports to the Board on Consumer Duty related matters. The Board received training on Consumer Duty during the period. ![Graphics]() 87 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT Wider society As an asset manager, we have two main scopes of activity: our investment activity and our own business operations. In our investment activity we aim to uphold the values of human rights, encourage positive labour practices, promote sustainable environmental impacts, and support corporate behaviour that ensures the wellbeing of each business and its wider stakeholders. We aim to help our clients achieve their financial goals by producing a return on their investment, offering a range of funds, including many with specific sustainability-related objectives which enable investors to invest in funds that direct capital to companies helping to solve global problems. We are a signatory to the PRI, a UN supported network of investors which works to promote responsible investment through the incorporation of environmental, social and governance (ESG) factors into investment decision-making. Liontrust is also a signatory of IIGCC and the Stewardship Code, supporters of the Net Zero Asset Managers Initiative, TCFD and Climate Action 100+. The Board supports the Company’s commitment in striving for carbon neutrality across the business and in our portfolios by 2050. Our ESG aims, integration processes, engagement outcomes and proxy voting records are set out in detail within the Responsible Capitalism section of our website. Just as we expect our investee companies to think critically about their ESG risks and opportunities, we do this with our own business too: by turning the lens on ourselves, we aim to operate in a way that is sustainable and supports our local community and wider society. Liontrust is operationally carbon neutral, offsetting our Scope 1 and 2 market-based emissions (our direct emissions and the indirect emissions arising from the generation of purchased energy) by supporting projects linked to our sustainability goals. Our Responsible Capitalism report, which summarises our approach as an investor and as a Company, is updated each calendar year and published on our website. Rebecca Shelley is the Board ESG lead and has most recently chaired Liontrust’s Responsible Capitalism Committee. During the year, the Board has reviewed and approved near term science based emissions reduction targets to demonstrate our commitment to reducing emissions in line with the Paris Agreement goals. The Board further reviews and approves Liontrust’s Responsible Capitalism Report annually. We seek to contribute to positive societal outcomes through the Liontrust Community Engagement programme. This has had three key objectives: raising financial awareness and numeracy throughout society, providing opportunities for young people and wildlife conservation. Support has been given over a number of years through our work with: • Newcastle United Foundation to provide a numeracy programme, Financial Football; • 10ticks to support maths education in primary schools; • Blackpool FC Girls’ Emerging Talent Centre; and • ZSL London Zoo. In 2023 the Board approved the establishment and funding of the Liontrust Foundation, a registered charity further aiming to empower disadvantaged young children and to advance the preservation of biodiversity. ![Graphics]() 88 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() 89 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT #### DIRECTORS’ REPORT The Directors present their report and the audited consolidated financial statements of Liontrust Asset Management Plc for the year ended 31 March 2024. Principal activities The Company’s principal activity is to act as a holding company for a group of investment management companies. The Company’s shares are quoted on the Official List of the London Stock Exchange. The Company is domiciled in the UK and is incorporated in England and Wales. The Group operates principally in the United Kingdom with an international operating subsidiary in Luxembourg. It has three operating subsidiaries as follows: Subsidiary % owned by the Company Subsidiary principal activities Liontrust Fund Partners LLP 100% A financial services organisation managing unit trusts and is the authorised corporate director for Liontrust’s UK domiciled funds. It is also an Alternative Investment Fund Manager in accordance with AIFMD. It is authorised and regulated by the Financial Conduct Authority. Liontrust Investment Partners LLP 100% A financial services organisation offering investment management services to professional investors directly, through investment consultants and through other professional advisers, which is authorised and regulated by the Financial Conduct Authority. Liontrust Investment Partners LLP is also approved as an Investment Manager by the Central Bank of Ireland and is an SEC Register Adviser. Liontrust International (Luxembourg) S.A. 1 100% A distribution business authorised and regulated by the CSSF in Luxembourg. 1 With effect from 24 May 2024 Liontrust International (Luxembourg) S.A. changed its name to Liontrust Europe S.A. In addition to the principal operating subsidiaries listed above, the Company has the following other 100% owned subsidiaries: • Liontrust Investment Funds Limited and Liontrust Investment Services Limited which act as the corporate member in Liontrust Fund Partners LLP and Liontrust Investment Partners LLP respectively. • Liontrust Portfolio Management Limited, acquired pursuant to the acquisition of Majedie Asset Management Limited in April 2022. Application has been made to the FCA to surrender its regulatory permissions. • Liontrust Investment Management Limited, acquired pursuant to the acquisition of Neptune Investment Management Limited in October 2019. This entity will be liquidated. • Liontrust Advisory Services Limited and Liontrust Multi–Asset Limited, acquired as part of the acquisition of the Architas business and are currently being liquidated. Results and dividends Loss before tax was £(0.6) million (2023: £49.3 million).Adjusted profit before tax was £67.4 million (2023: £87.1 million) after adding back expenses including, severance compensation, acquisitions related costs, professional services (restructuring, acquisition related and other) and intangible asset amortisation and impairment, and is reconciled to profit before tax in note 7 to the financial statements. The Directors declare a second interim dividend of 50 pence per share (2023: 50 pence per share). This results in total dividends of 72 pence per share for the financial year ending 31 March 2024 (2023: 72 pence per share). Review of the business and future developments A review of the business and future developments is set out in the Chair’s statement, Chief Executive Officer’s report and Strategic Report on page 12 and 14 to 16 respectively. Directors The Directors of the Company during the year and up to the date of the signing of the financial statements were as follows: Vinay Abrol Alastair Barbour Mandy Donald John Ions Miriam Greenwood (Appointed on 16 November 2023) Rebecca Shelley George Yeandle Their interests in the share capital of the Company at 31 March 2024 are set out in the Remuneration report on page 106. ![Graphics]() 90 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS All the information cross referenced above is incorporated by reference into this Directors’ Report. DTR 7.2 Structure of capital and voting rights As at 31 March 2024, there were 64,935,384 fully paid ordinary shares of 1p amounting to £649,354. Each share in issue is listed on the Official List maintained by the FCA in its capacity as the UK Listing Authority. The Company has one class of ordinary shares which carry the right to attend, speak and vote at general meetings of the Company. The holders of ordinary shares have the right to participate in dividends and other distributions according to their respective rights and interests in the profits of the Company and a return of capital on a winding-up of the Company. Full details regarding the exercise of voting rights in respect of the resolutions to be considered at the Annual General Meeting to be held on 19 September 2024 are set out in the Notice of Annual General Meeting. To be valid, the appointment of a proxy to vote at a general meeting must be received not less than 48 hours before the time appointed for holding the meeting. None of the ordinary shares carries any special rights with regard to control of the Company. Authority to purchase own shares Under Resolution 16 of the Annual General Meeting held on 21 September 2023, the shareholders authorised the Company to purchase its own shares pursuant to section 701 of the Companies Act 2006. This authority is limited to the maximum number of 6,493,538 Ordinary shares of 1 pence each (equivalent to approximately ten per cent of the issued share capital of the Company). This authority expires at this year’s Annual General Meeting of the Company or 21 December 2024 (whichever is the earlier). The maximum price that may be paid for an Ordinary share will be the amount that is equal to 5 per cent above the average of the middle market prices shown in quotations for an Ordinary share in the London Stock Exchange Daily Official List for the five business days immediately preceding the day on which that Ordinary share is purchased. The minimum price which may be paid for an ordinary share is 1 pence. There have been no share buybacks during the period. The Company does not hold any shares in treasury. DISCLOSURE REQUIRED UNDER THE LISTING RULES AND DISCLOSURE GUIDANCE AND TRANSPARENCY RULES DTR 4.1.5.R and DTR 4.1.8 R and DTR 4.1.11R Information which is the required content of the management report can be found in the Strategic Report and in this Directors’ Report. LR 9.8.4R / DTR 7.2 The following table is disclosed pursuant to Listing Rule 9.8.4R and DTR 7.2. The information required to be disclosed, where applicable to the Company, can be located in these Annual Report and Financial Statements at the references set out below: Information required Location Interest capitalised Not applicable Shareholder waiver of dividends Note 23 Shareholder waiver of future dividends Note 23 Agreements with controlling shareholders Not applicable Provision of services by a controlling shareholder Not applicable Details of any significant contracts entered into by the Company or a subsidiary undertaking and (i) in which a Director is or was materially interested (ii) a controlling shareholder Not applicable Details of long-term incentives schemes Remuneration Report Waiver of emoluments by a Director Not applicable Waiver of future emoluments by a Director Not applicable Non-pre-emptive issues of equity for cash Not applicable Non-pre-emptive issues of equity for cash in relation to major subsidiary Not applicable Participation by parent of a placing by a listed subsidiary Not applicable Corporate Governance code and practices applied DTR 7.2.2 DTR7.2.3 Corporate Governance Report Main features of the internal control and risk management systems DTR 7.2.5 Risk Management and Internal Controls report Significant shareholders, rights, voting, appointment of directors, significant agreements DTR 7.2.6 Corporate Governance report; Directors’ Report Administrative, Management and Supervisory Bodies and their Committees DTR 7.2.7 Risk Management and Internal Controls Report Administrative, Management and Supervisory Bodies and their Committees DTR 7.2.7 Risk Management and Internal Controls Report ![Graphics]() 91 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT Shares held in an employee benefit trust The Liontrust Asset Management Employee Trust (the “EBT”) owns 1,027,873 shares in the Company as at 31 March 2024. Dividends on these shares are waived by the trustee of the EBT. Substantial shareholders As at 31 March 2024, as far as known to the Company, the following persons (other than a director) were directly or indirectly interested in 3 per cent. or more of the issued share capital of the Company. Share Register as at: 31 March 2024 Name Number of shares held Percentage of issued share capital Hargreaves Lansdown, stockbrokers 5,155,053 7.94 TFG Asset Management UK LLP\* 3,295,280 5.07 abrdn 3,169,700 4.88 Vanguard Group 2,643,414 4.07 Canaccord Genuity Wealth Management 2,498,629 3.85 Blackrock 2,466,899 3.80 Slater Investments 2,431,551 3.74 Sanford Deland Asset Management 2,340,000 3.60 Martin Currie Investment Management 2,250,000 3.46 SEB as principal 1,977,445 3.05 \*As per the notification received on 20 September 2023, TFG Asset Management UK LLP holds contracts for difference. As at 31 May 2024 (being the latest practicable date prior to the publication of this document), as far as known to the Company, the following persons (other than a director) were directly or indirectly interested in 3 per cent. or more of the issued share capital of the Company. Share Register as at: 31 May 2024 Name Number of shares held Percentage of issued share capital Hargreaves Lansdown, stockbrokers 5,018,542 7.73 TFG Asset Management UK LLP\* 3,295,280 5.07 abrdn 3,232,278 4.98 Canaccord Genuity Wealth Management 3,008,779 4.63 Vanguard Group 2,664,512 4.10 Blackrock 2,466,598 3.80 Slater Investments 2,420,794 3.73 Martin Currie Investment Management 2,250,000 3.46 Sanford Deland Asset Management 2,120,000 3.26 \*As per the notification received on 20 September 2023, TFG Asset Management UK LLP holds contracts for difference. ![Graphics]() 92 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS CORPORATE GOVERNANCE DTR 7.2.1 requires that the Company’s disclosures on corporate governance are included in the Directors’ Report. A report on corporate governance appears on pages 78 to 87, which is incorporated by reference into this Directors’ Report and is deemed to form part of this Directors’ report. RISKS AND UNCERTAINTIES A report on principal risks and how they are managed appears in the Strategic Report on pages 38 to 53 and a report on the risk management and internal controls appear on pages 75 to 77. CORPORATE SOCIAL RESPONSIBILITY Liontrust aims to be recognised as an organisation that is transparent and ethical in all its dealings as well as making a positive contribution to the community in which it operates. The Board recognises the Group’s impact, responsibilities and obligations on and towards society and aims to promote equal opportunities and human rights, reduce environmental risk and operate in a sustainable manner. The Group is committed to the highest standards of business conduct. Policies and procedures are in place to facilitate the reporting of suspect and fraudulent activities, including money laundering and anti-bribery policies. The Group’s health and safety policy aims, insofar as it is reasonably practical, to ensure the health and safety of all employees and other persons who may be affected by the Group’s operations and provide a safe and healthy working environment. The Group has a good record of safety. A report on Responsible Capitalism can be found on pages 62 to 66. This report includes environmental performance data, including Scope 1, Scope 2 and Scope 3 greenhouse gas (GHG) emissions data and the Company’s TCFD Report. The Company does not maintain a corporate jet and does not routinely use private jets for business travel. Liontrust aims to be recognised as an organisation that is transparent and ethical in all its dealings as well as making a positive contribution to the community in which it operates. Information on the consideration of stakeholder interests is set out in the Section 172 statement on page 83 to 87. EMPLOYEES Details of the Company’s employment practices, including diversity and employee engagement can be found in the Strategic Report on pages 54 to 55. FINANCIAL INSTRUMENTS The Group’s financial instruments at 31 March 2024 comprise cash and cash equivalents, financial assets and receivable and payable balances that arise directly from its daily operations. Receivables arise principally in respect of fees receivable on funds under management, cancellations of units in unit trusts and sales of units in unit trusts, and shares of ICVCs title to which are not transferred until settlement is received. The Group’s credit risk is assessed as low. Financial assets comprise assets held at fair value through profit or loss. Assets held at fair value through profit or loss are unit trust units held in the ‘manager’s box’ to ease the calculation of daily creations and cancellations, and shares in the sub-funds of the Liontrust Global Funds plc. Payables (excluding deferred income) represent amounts the Group is due to pay to third parties in the normal course of business. These include expense accruals as well as settlement accounts (amounts due to be paid for transactions undertaken). Trade payables are costs that have been billed, accruals represent costs, including remuneration, that are not yet billed or due for payment. They are initially recognised at fair value and subsequently held at amortised cost. Cash flow is managed on a daily basis, both to ensure that sufficient cash is available to meet liabilities and to maximise the return on surplus cash through use of overnight and monthly deposits. The Group is not reliant on income generated from cash deposits. ![Graphics]() 93 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT Deposit banks are selected on the basis of providing a reasonable level of interest on cash deposits together with a strong independent credit rating from a recognised agency. Any banks selected for holding cash deposits are selected using a detailed counterparty selection and monitoring policy which is approved by the Board. Based on holding the financial instruments as noted above the Group is not subject to any significant liquidity risk. Full details of the Group’s financial risk management can be found in note 2 on page 158 to 162. ANNUAL GENERAL MEETING The Annual General Meeting of the Company will be held in the Prince Philip and Queen Elizabeth II room at the Royal Society for the Arts (RSA), 8 John Adam Street, London, WC2N 6EZ on 19 September 2024 at 2.00 p.m. A notice convening this meeting will be sent to shareholders in August 2024. All resolutions are voted on separately and the final voting results will be published as soon as practicable after the meeting. SECTION 992, COMPANIES ACT 2006 The following information is disclosed in accordance with section 992 of the Companies Act 2006: • The Company’s capital structure and voting rights are set out in this report. • Details of substantial shareholders in the Company are listed on page 91. • The rules concerning the appointment and replacement of Directors are contained in the Company’s articles of association and are described on page 98. • There are no restrictions concerning the transfer of the securities in the Company; no special rights with the regard to control attached to securities; no agreement between holders of the securities regards their transfer known to the Company; and no agreement which the Company is party to that might affect its control following a takeover bid. • There are no agreements between the Company and its Directors concerning compensation for loss of office as at 31 March 2024. BASIS OF FINANCIAL STATEMENTS Having given consideration to the uncertainties and contingencies disclosed in the financial statements, the Directors have satisfied themselves that the Group has adequate resources to continue in operation for at least 12 months from approval of the financial statements and they continue to adopt the going concern basis of accounting in preparing the annual financial statements. So far as the Directors are aware, there is no relevant audit information of which the auditor is not aware. The Directors have taken all reasonable steps to make themselves aware of any relevant audit information and to establish that the auditor is aware of such information. Further details of the activities of the Audit and Risk Committee can be found on pages 102 to 105. INDEPENDENT AUDITORS A resolution to reappoint KPMG LLP as auditors to the Company and to authorise the Directors to fix their remuneration will be proposed at the 2024 Annual General Meeting. POLITICAL DONATIONS The Group made no political donations or contributions during the year. (2023: £nil). By order of the Board Sally Buckmaster General Counsel & Company Secretary 25 June 2024 ![Graphics]() 94 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT OF THE ANNUAL REPORT AND FINANCIAL STATEMENTS The directors are responsible for preparing the Annual Report and the Group and parent Company financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare Group and parent Company financial statements for each financial year. Under that law they are required to prepare the Group financial statements in accordance with UK-adopted international accounting standards and applicable law and have elected to prepare the parent Company financial statements on the same basis. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and parent Company and of the Group’s profit or loss for that period. In preparing each of the Group and parent Company financial statements, the directors are required to: • select suitable accounting policies and then apply them consistently; • make judgements and estimates that are reasonable, relevant and reliable; • state whether they have been prepared in accordance with UK-adopted international accounting standards; • assess the Group and parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and • use the going concern basis of accounting unless they either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent Company’s transactions and disclose with reasonable accuracy at any time the financial position of the parent Company and enable them to ensure that its financial statements comply with the Companies Act 2006. 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, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities. Under applicable law and regulations, the directors are also responsible for preparing a Strategic Report, Directors’ Report, Directors’ Remuneration Report and Corporate Governance Statement that complies with that law and those regulations. The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company’s website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. In accordance with Disclosure Guidance and Transparency Rule (“DTR”) 4.1.16R, the financial statements will form part of the annual financial report prepared under DTR 4.1.17R and 4.1.18R. The auditor’s report on these financial statements provides no assurance over whether the annual financial report has been prepared in accordance with those requirements. Responsibility statement of the Directors in respect of the annual financial report We confirm that to the best of our knowledge: • the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the company and the undertakings included in the consolidation taken as a whole; and • the strategic report includes a fair review of the development and performance of the business and the position of the issuer and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face. We consider the annual report and accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the group’s position and performance, business model and strategy. By order of the Board Vinay Abrol Chief Financial Officer 25 June 2024 ![Graphics]() 95 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() 96 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS #### NOMINATION COMMITTEE REPORT Dear shareholder, INTRODUCTION BY THE CHAIR OF THE NOMINATION COMMITTEE On behalf of the Nomination Committee (the “Committee”), I am pleased to present our report for the financial year ended 31 March 2024. This report is intended to provide a summary of the Committee’s principal duties and key activities during the year. BOARD SUCCESSION A key focus of the Committee when considering matters of Board succession has been ensuring that new appointments are the right cultural fit for the Board and Company. To this end, we have followed a careful and diligent selection process when recruiting members of the Board. This includes the consideration of the balance of skills, knowledge, experience and diversity on the Board, the appointment of a carefully selected independent executive search firm, the development of a detailed role specification and multiple interviews with candidates during the selection process. We prioritise finding the right cultural fit and the right person over the speed of appointment. During the year, the Committee has overseen the recruitment of Miriam Greenwood OBE DL, who was appointed to the Board in November 2023. Miriam has a wealth of experience and knowledge in financial services and listed companies, with recent relevant experience chairing the remuneration committee of a UK listed asset manager. Following Miriam’s successful induction on to the Board and its Committees, Miriam has been appointed as Chair of the Remuneration Committee with effect from 1 April 2024. George Yeandle, who chaired the Remuneration Committee during the financial year, intends to retire from the Board at the 2024 AGM. On behalf of the Committee and the Board, we would like to thank George for his diligent service to the Company and its stakeholders, and his outstanding leadership of the Committee. As noted in my last report to you, we have commenced the recruitment process for the selection of my successor as Chair of the Board. As you would anticipate, the recruitment process is being led by Rebecca Shelley, our Senior Independent Director. As noted above the abiding principle we follow is ensuring that we find the right person who is the right cultural fit for the Board and Company. The recruitment process for my successor is progressing well. Further detail of this is set out in the report below. DIVERSITY, EQUITY AND INCLUSION Liontrust is committed to building a workplace that fosters diversity, equity and inclusion (“DE&I”) for our staff. Achieving DE&I is an ongoing objective and one that requires continual work and reflection to achieve. The Committee considers both the diversity of the Board and that of our workforce. On matters of Board diversity, I am pleased to report that Liontrust complies both with the Hampton-Alexander Review recommendations on Board gender and ethnic diversity and, following Miriam’s appointment, the FCA’s Listing Rule targets on Board gender and ethnic diversity. Our commitment to DE&I is mirrored in our actions. I am pleased to report that Liontrust’s Diversity, Equity and Inclusion Committee (the “DE&I Committee”) now reports to this Committee. Liontrust’s DE&I Committee is chaired by our CFO, Vinay Abrol, and its membership is drawn from across our workforce, providing a rich vein of diverse and talented members to help us to continue to evolve and develop in this important area. Following the development of a diversity, equity and inclusion strategy by the DE&I Committee, the Committee approved Liontrust’s 2024 Diversity, Equity and Inclusion Strategy. The DE&I Committee also works closely with our Responsible Capitalism team, headed by Cindy Rose, to ensure a consistent approach to DE&I. A report on the activities of our DE&I is included in the report below. OUR PEOPLE Liontrust’s key assets are our people. We pride ourselves on the quality of our people’s knowledge and ability and therefore their positive impact on our clients and stakeholders. Accordingly, a principal area of focus for the Committee is on our people. At each meeting of the Committee, the Committee receives a People Report from our Head of HR, Louise Dilworth, which includes relevant data on diversity and staff turnover. During the year, the Committee has overseen senior management succession planning, reviewed the implementation of the Liontrust Leadership Charter and considered the results of 2023 Employment Engagement Survey. THE YEAR AHEAD The Committee will continue to focus on the recruitment of my successor, support and champion the work of our DE&I Committee and on matters related to our people. Alastair Barbour Chair of the Nomination Committee 25 June 2024 ![Graphics]() 97 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT KEY RESPONSIBILITIES The Committee’s key responsibilities are to: • Keep the composition of the Board and its Committees under review to ensure a correct balance of skills, knowledge, experience and diversity is in place. • Lead the search and selection process for new Board appointments, including identifying the skills and experience required. • Oversee succession planning for Directors and senior executives and the development of a diverse pipeline for succession, taking into account the challenges and opportunities facing the company, and what skills, diversity and expertise are therefore needed on the Board in the future. • Review and consider matters related to employee engagement, talent management and the training and development of the staff in the Group. • Undertake annually an assessment of the Board’s performance, review the results of the evaluation and oversee the implementation of any necessary actions. The terms of reference of the Committee, which set out its role and the authority delegated to it by the Board, are available on the Company’s website or upon request from the Company Secretary. The terms of reference of the Committee were most recently reviewed by the Committee and updated in July 2023. COMMITTEE COMPOSITION AND ATTENDANCE The Committee is comprised solely of the Non-executive Directors listed below: • Alastair Barbour (Chair) • Mandy Donald • Miriam Greenwood (appointed 16 November 2023) • Rebecca Shelley • George Yeandle. In accordance with the Code, the majority of the members of the Committee are independent Non-executive Directors. The Executive Directors and Head of HR attend Committee meetings by invitation. The Committee is empowered to appoint independent executive search consultants and seek legal advice where it sees fit to assist with its work. No individual Committee member participates in the decision- making when the matter under consideration relates to him or her. The Committee met six times during the year. The Committee members’ attendance is detailed on page 80. KEY ACTIVITIES DURING THE YEAR During the financial year to 31 March 2024, the activities of the Committee included: • Commenced and managed the search process for the recruitment of an additional Non-executive Director to succeed George Yeandle as the Chair of the Remuneration Committee. • Led by Rebecca Shelley, the Senior Independent Director, commenced the recruitment process for the selection of the successor to the Chair. • The review of the composition of the Board and its committees and the skills, knowledge and experience of the Board, which included a detailed skills matrix analysis. • The review of the Non-executive Directors’ external appointments and time commitments. • Succession planning across senior management, Heads of Department and investment teams across the Group, which included talent development planning and DE&I considerations. • The Liontrust Leadership Charter and the Liontrust Leadership Training Programme, which included the approach to embedding the Liontrust Leadership Charter across the Group. • Oversight of Liontrust’s staff training and development, which included training on mental health awareness, career development and diversity and inclusion for managers and staff. • Oversight of matters relating to Liontrust’s staff, including staff engagement, internal communications and staff wellbeing. • DE&I matters, including the review and approval of Liontrust’s 2024 DE&I Strategy, the review of DE&I data of the workforce, consideration of the diversity of the Board and senior management and the review and approval of a number of key DE&I policies. • The annual evaluation of performance of the Board, its committees, the Chair and the Directors. Further detail of certain activities of the Committee is set out below. BOARD AND COMMITTEE COMPOSITION The Committee reviewed the composition of the Board and its committees during the year and considered the optimal Board size for a company of the size and complexity of Liontrust. This included the consideration of the tenure of Board members, succession planning, diversity and skills and expertise. As part of this review, the Committee considered a detailed skills analysis matrix. The Committee further considered the relevant governance requirements and best practice. The Committee concluded that the Board’s current composition was appropriate in light of the planned recruitment activity. The Committee agreed that the skills and experience and Board composition would be reviewed annually in accordance with the requirements of the Code and governance best practice. APPOINTMENT OF MIRIAM GREENWOOD As noted in the Committee’s 2023 Report, George Yeandle intends to retire at the 2024 AGM. The Committee led the process for the recruitment of an additional independent Non- executive Director to succeed George as the Chair of the Remuneration Committee. The Committee reviewed and approved a detailed role specification, which included the requirement for the candidate to have recently served on a remuneration committee, listed Board experience and have relevant financial services ![Graphics]() 98 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS experience. Diversity has also been a key consideration in the recruitment process, albeit that the prerequisite for any proposed Board appointment is that the proposed director must have the skills, experience and character to contribute to the effectiveness of the Board and the long-term success of the Company. The Committee appointed Teneo to assist with the recruitment process. As required by the Code, Teneo is an independent executive search firm and other than providing recruitment services, Teneo does not have any connection with the Group which would affect its independence. Teneo prepared a long-list of candidates based on the role specification which were reviewed by members of the Committee and Board. Following this review, a short list of candidates most suited to the role was prepared and a series of interviews arranged with the members of the Committee and the Executive Directors. The feedback from this process and the review of references was then considered by the Committee. The process led to the unanimous conclusion by the Committee to recommend the appointment of Miriam Greenwood to the Board in November 2023 and to succeed George Yeandle as Chair of the Remuneration Committee with effect from 1 April 2024. CHAIR SUCCESSION Cognisant of the Code’s recommendations relating to the tenure of the Chair, the Committee, led by Rebecca Shelley, Senior Independent Director, in November 2023 commenced the recruitment process for the selection of the successor to the Chair. The Committee reviewed and approved a detailed role specification, which included the requirement for the candidate to have recently served as the chair, Senior Independent Director or chair of a committee on a publicly listed company, experience of corporate activity, a good appreciation of the evolving regulatory environment and strong financial acumen and risk management experience. In December 2023, after a “request for proposal” process where four executive search firms were asked to submit proposals for our Chair succession search, the Committee appointed Lygon Group to assist it with the recruitment process. As required by the Code, Lygon Group is an independent executive search firm and other than providing recruitment services, Lygon Group does not have any connection with the Group which would affect its independence. Lygon Group prepared a list of potential candidates based on the role specification which was reduced to a long-list of candidates, which in turn was reviewed by members of the Committee and Board. The Chair of the Committee and the Board recused himself from the review. Following this review, a short list of candidates most suited to the role was prepared and a series of interviews arranged with the members of the Committee and the Executive Directors. Interviews commenced in April 2024 and are ongoing. A further update on progress will be made in due course. TIME COMMITMENT The Committee keeps under review each Director’s external appointments to ensure they have sufficient time to dedicate to their duties. Neither of the Executive Directors have significant external appointment and do not serve on the boards of other listed companies. When reviewing external appointments, consideration is given to the duties of the proposed position – including appointment to committees or chairing a committee. Any significant new appointments are required to be approved in advance by the Committee. The Committee is satisfied that all Directors have sufficient time to dedicate to their duties and have clearly demonstrated this throughout the year. BOARD AND COMMITTEE EVALUATION In line with the Code, the Board undertakes a formal evaluation of its and its committees performance annually. For the past four years, the Board has undertaken an externally facilitated Board effectiveness and performance evaluation. In light of this and the recent appointment of Miriam Greenwood, the Committee decided to undertake an internally facilitated review of Board effectiveness and performance. The Committee will consider undertaking an externally facilitated Board effectives and performance review in 2025. The process followed for the Board’s evaluation is: • Tailored questionnaires are developed for the Board and its Committees by the Company Secretarial team and agreed with the Chair. • Questionnaires, which include free text boxes, are circulated to the Board for completion digitally. • The results are then compiled and reviewed by the Chair. • The Chair discusses the outcome with the Board, focussing on the themes raised in the evaluation. • The Chair may hold meetings with individual Directors where required to discuss the results of the evaluation. • The outcome of the evaluation is then considered by the Committee and the actions are then agreed. 2024 BOARD EVALUATION The Board scored collaboration highly and reported that the Board is more cohesive. The culture at Liontrust and ‘tone from the top’ is described as constructive, supportive, inclusive, performance driven, ambitious and consumer focussed. Directors, both the Non-executive Directors and Executive Directors alike, identified similar challenges for Liontrust relating to stemming outflows, expanding distribution and growing the business organically in difficult market and macroeconomic conditions. The Chair and Senior Independent Director received excellent feedback. The key recommendations from the performance review are: • Continued focus on succession planning for key members of senior management, ensuring that there is sufficient time allocated to talent development and the milestones for their achievement. ![Graphics]() 99 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT • Continued focus on the timely resolution of people matters and changes to roles and the staff target operating model. • With respect to stakeholder engagement, maintain a close focus on the Consumer Duty and increased management information on the feedback from customers. Following the outcome and evaluation of the Board and Committee performance review, the Committee concluded that each Director had engaged appropriately with the evaluation process and that the Board and its Committees had operated effectively during the period under review. DIVERSITY, EQUITY AND INCLUSION The Committee recognises that diversity in the Board helps to improve effective decision-making processes, allowing for a broader range of perspectives and experiences to be considered. Diversity takes many forms and as such the Committee is cognisant that a combination of skills and experience, gender, age, ethnicity and educational background on the Board is important in providing a range of perspectives and challenge needed to support good decision making. As noted by the FRC, “diversity is a long-term, multi-stranded journey where progress in one area is not a guarantee of progress in another”. Following the appointment of Miriam Greenwood, Liontrust meets the diversity targets set out in the FCA’s Listing Rules. Rebecca Shelley serves as Senior Independent Director, Vinay Abrol serves as the Chief Financial Officer and three of seven (42%) Directors are women. Liontrust continues to meet the recommendations of the Hampton Alexander Review on Board gender diversity and the Parker Review recommendations on ensuring that at least one Board member is from an ethnic minority background. During the year, the Committee has continued to support and champion the activities of the DE&I Committee. The DE&I Committee now reports to the Committee allowing for enhanced oversight and support. Membership of the DE&I Committee is drawn from across the workforce and the DE&I Committee is chaired by Vinay Abrol. The Committee also recently approved Liontrust’s 2024 DE&I Strategy. A report on the activities of the DE&I Committee is set out below highlighting Liontrust’s commitment to fostering an inclusive and equitable workplace and reflects the progress made in embedding DE&I across the Group. REPORT FROM THE DE&I COMMITTEE In 2021, Liontrust Asset Management took a significant step forward in its commitment to DE&I by establishing the DE&I Committee. The DE&I Committee engages Liontrust staff through arranging training, activities & events and internal communications on DE&I initiatives and themes throughout the year. Its mandate encompasses a range of vital areas including the prevention and elimination of discrimination, raising awareness of DE&I benefits, ensuring DE&I-promoting policies and procedures, and attracting diverse talent to Liontrust and the broader asset management industry. This year, under the guidance of the DE&I Committee, we have made substantial progress in embedding DE&I across the Group. Our initiatives, detailed below, reflect our deepening commitment to fostering an inclusive and equitable workplace, and driving meaningful change both within our organisation and in the communities we serve. MENTAL HEALTH At Liontrust, we firmly believe in the critical importance of mental well-being as an integral component of overall health and productivity. This belief underpins our comprehensive approach to mental health, which encompasses a range of initiatives designed to support our employees’ mental and emotional well-being. In addition to ‘Liontrust does lunch’ and the emphasis on regular breaks, including our flexible dress code policy, we also conducted managerial training focused on mental health. This training was crucial in equipping our leaders with the skills and knowledge to support their teams effectively, recognising the signs of mental health issues, and fostering a supportive environment. Our company-wide webinar on mental health awareness further highlighted our commitment to educating and engaging our entire workforce on this vital topic. By providing accessible and informative content, we aimed to destigmatise mental health issues and encourage open dialogue within the workplace. During Mental Health Awareness Week, we disseminated targeted mental health content and support, reinforcing our message that mental health is a priority year-round, not just during designated awareness periods. Our commitment to mental health is rooted in the recognition that a healthy mind is essential for creativity, decision-making, and resilience. It’s about more than reducing absenteeism; it’s about enhancing the quality of our working life. In a high-performance environment like ours, ensuring mental wellness is not just a duty but a strategic imperative that directly impacts our overall success. DE&I AMBASSADORS The introduction of the DE&I Ambassadors Programme in 2024 is a pivotal advancement in Liontrust’s DE&I strategy. This programme, embodying our core values, represents our firm belief that effective advocacy and support for DE&I are fundamental to creating a truly inclusive and dynamic workplace. These Ambassadors, trained across all DE&I dimensions, are not just representatives; they are the embodiment of our commitment to fostering a culture where every voice is heard and valued. At Liontrust, we understand that the success of DE&I initiatives hinges on active participation and visible advocacy within the organisation. The Ambassadors act as catalysts for this, ensuring that DE&I is not just a policy but a lived experience. They play a crucial role in promoting understanding, facilitating conversations, and providing guidance on DE&I matters. This hands-on approach is instrumental in embedding DE&I principles into the everyday fabric of our firm. PRIDE Liontrust’s celebration of Pride Month was a vibrant testament to our commitment to creating an inclusive and productive work environment. Our events, notably the Coffee Morning/Bake Off, provided an opportunity for staff to come together in a ![Graphics]() 100 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() 101 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT spirit of camaraderie and support for the LGBTQ+ community. These initiatives were not just about celebrating Pride; they played a crucial role in commemorating historical milestones and fostering an organisational culture that values acceptance and understanding. Such activities align with Liontrust’s strategic objective to create a diverse and inclusive workplace. By celebrating LGBTQ+ inclusivity, we not only honour the diversity within our community but also demonstrate our commitment to being a progressive and socially responsible organisation. This is essential for attracting and retaining a broad talent pool, and it enhances our reputation as a firm that truly values and embraces diversity in all its forms. BLACK HISTORY MONTH In October, Liontrust Asset Management proudly observed Black History Month, aligning with this year’s theme, “Saluting Our Sisters.” As part of our observance, we were honoured to host Baroness Floella Benjamin, DBE, as our keynote speaker. Her inspiring talk not only chronicled her remarkable journey to success but also illuminated the profound impact that she and other Black British women have had on British society. In addition to this enlightening keynote address, we also organised a Black History Month film club. This event provided our staff with an opportunity to engage with and reflect upon significant aspects of Black history and culture through cinema. The film club, alongside Baroness Benjamin’s presentation, formed a comprehensive programme that deepened our understanding and appreciation of the contributions of Black British women to our society. Baroness Benjamin’s presence, combined with the thoughtful selection of films, was more than a celebration of Black history; these events were integral to our ongoing commitment to recognising and understanding the diverse experiences and contributions of all communities. Her story of resilience and achievement, together with the narratives explored in the film club, offered profound insights and inspiration to our employees. These events were key opportunities for all to gain a deeper appreciation of the cultural and societal contributions of Black British women, enhancing our understanding of diversity and its significance in the fabric of British society. We firmly believe in the power of representation and the importance of acknowledging and learning from diverse historical narratives. By spotlighting the achievements of Black British women and exploring their stories through various mediums, we not only honour their legacy but also reinforce our commitment to promoting an inclusive and informed workplace. Such events are pivotal in our journey towards a more inclusive culture, where diversity is not only recognised but celebrated as a key driver of our collective progress and success. INTERNATIONAL WOMEN’S DAY CELEBRATIONS March 2024 marked a significant celebration of International Women’s Day (IWD) at Liontrust Asset Management, aligning with our enduring commitment to Diversity, Equity, and Inclusion. This year’s theme, “Inspire Inclusion,” underscored the global call to action for accelerating gender equality and celebrated the myriad achievements of women. At Liontrust, recognising and supporting women’s contributions across all sectors of our business is integral to our ethos, enhancing our innovative capacity and mirroring the diversity of the markets we serve. ENGAGEMENT AND EMPOWERMENT ACTIVITIES The month-long celebration began with an IWD Coffee and Sweet Treats Morning, an informal gathering designed to foster networking and solidarity among colleagues. This event served not just as a social get-together but also as a platform for initiating meaningful conversations on gender equality and inclusion, reflecting our commitment to creating a supportive work environment for all. A panel discussion titled “Inspire Inclusion” further deepened this dialogue, featuring influential women leaders who shared insights on creating inclusive workplaces. This was followed by a networking event, enabling participants to build connections that support professional growth and personal development. These interactions are vital in promoting an organisational culture that values and implements the principles of equity and inclusivity. EDUCATIONAL INITIATIVES In an effort to address unconscious biases and promote a more inclusive culture, we hosted the “Inclusion for All” webinar. The session equipped employees with actionable strategies to enhance inclusivity at every level of our operations, ensuring that Liontrust’s policies and practices reflect our commitment to equality. IMPACT AND IMPORTANCE By hosting these events, Liontrust not only celebrated IWD but also actively contributed to the broader movement towards a more equitable society. The discussions and activities of IWD have a ripple effect, influencing our policies, enhancing our workplace culture, and fostering a deeper understanding among all employees of the challenges and opportunities related to gender equality. Celebrating IWD is crucial for Liontrust as it aligns with our strategic objectives to attract and retain a diverse workforce and to foster an inclusive environment where every employee can thrive. The success of these initiatives demonstrates our proactive approach in leading by example within the asset management industry, showcasing our commitment to building a workplace where difference is not only accepted but valued and celebrated. CONCLUSION The past year has been one of marked progress and development in our DE&I endeavours. The initiatives and the dedicated work of the DE&I Committee has been instrumental in reinforcing our commitment to an inclusive and diverse workplace, aligning with our business objectives and values. We remain dedicated to advancing these principles, firmly believing in their transformative impact on our people, our clients, and the broader community. ![Graphics]() 102 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS #### AUDIT & RISK COMMITTEE REPORT Introduction by the Chair of the Audit & Risk Committee Dear shareholder, INTRODUCTION On behalf of the Audit & Risk Committee (the “Committee”), I am pleased to present the Audit & Risk Committee report for the financial year ended 31 March 2024. This report is intended to provide a summary of the Committee’s principal duties and key activities during the year. COMMITTEE’S ACTIVTIES The Committee has had a full agenda, undertaking the Committee’s core responsibilities, as well as overseeing a number of ad-hoc items. The Committee continues to focus on assisting the Board in its presentation of the Group’s financial results. Other key responsibilities include: continuing to review the effectiveness of the Group’s system of internal controls and risk management framework, monitoring and periodically reviewing the Group’s procedures and ensuring compliance with all regulatory and financial reporting requirements. The Committee also assesses the quality of audit undertaken by the external auditors, monitors the effectiveness of internal audit and reviews the independence and objectivity of the external auditors. The Committee maintains an effective and open relationship with the Group’s external auditors, enhancing the oversight, reporting and challenge the Committee undertakes. TERMS OF REFERENCE AND COMMITTEE MEMBERSHIP The terms of reference of the Committee explain its role and the authority delegated to it by the Board of Directors. The terms of reference are reviewed annually, with the last review undertaken in January 2024. The Committee’s terms of reference are published on the Company’s website and are available upon request from the Group Company Secretary. All members of the Committee are independent Non-Executive Directors and the Committee welcomed Miriam Greenwood as a new member of the Committee following her appointment to the Board in November 2023. As Chair, I extend Committee meeting invitations to non-Committee members throughout the year. Active participation from all meeting attendees allows for informative discussions and ensures individuals can raise any concerns they may have with the Committee. Further details in relation to Committee membership can be found below in ‘composition and attendance’. The Committee also meets privately, if required. The Committee annually reviews its remit and effectiveness. Following the externally facilitated review in 2021, the 2023 review was conducted internally, on behalf of the Board, by the Group Company Secretary. The review concluded that the Committee continued to operate effectively during the reporting period with no material issues or concerns raised. The Committee continues to meet the requirements of the Code and FRC Financial Reporting standards. The Board believes the Committee members have the necessary range of financial, risk, control and commercial expertise required to provide effective challenge to management as well as appropriate recent and relevant financial experience. Details of the Committee members’ profiles are set out in full in the Board members’ biographies. The Committee is a dynamic forum which benefits from a transparent and effective engagement with management, enabling effective discussions and decision making. SHAREHOLDER ENGAGEMENT Whilst no shareholders have requested specific matters to be addressed by the Committee, maintaining an open relationship with shareholders remains a commitment of the Committee. INTERACTION WITH THE BOARD The Committee has continued to work closely with the Board throughout the year. All recommendations made by the Committee have been accepted by the Board. AUDITOR ENGAGEMENT The Committee is satisfied that the external auditors challenge management’s assumptions, notably in areas of judgement such as the review of the impairment of intangible assets and goodwill and the definition and clarity of APMs. These areas are reported to the Committee and reviewed appropriately. The Committee has noted the upcoming FRC “Audit Committee and the External Auditors: Minimum Standard” publication and has reflected throughout the report where the Group already meets many of the new reporting requirements. Mindful of the Committee’s risk oversight responsibilities, the Committee also works closely with the Internal Auditor to determine its annual audit programme, approves the programme and reviews the audit reports undertaken. WHISTLEBLOWING I am pleased to report that the Committee approved the appointment of an externally facilitated whistleblowing hotline during the review period and I have been appointed as the whistleblowing champion. RISK MANAGEMENT FRAMEWORK AND INTERNAL CONTROLS The Committee will continue to develop and enhance its oversight of the Company’s risk management and internal control framework as it looks ahead to the implementation of Provision 29 of the updated 2024 Code. We are confident ![Graphics]() 103 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT Key responsibilities The Committee’s key responsibilities remain unchanged during the year and continue to be: • assist the Board in its presentation of the Group’s financial results and position through review of the interim and full year financial statements before they are approved by the Board. The Committee focuses on compliance with accounting principles and policies, changes in accounting practice and major matters of judgement; • keep under review the effectiveness of the risk framework that is used to monitor the Group’s system of internal controls and risk management framework. This includes suitable monitoring procedures for the identification, assessment, mitigation and management of all risks including liquidity, market, regulatory, credit, legal, operational and strategic risks, with particular emphasis on the principal risks faced by the Group. Such procedures are designed to provide reasonable, but not absolute, assurance against material misstatement or loss; • as part of the suite of risk management procedures, the Committee reviews and recommends to the Board for approval, the Group’s ICARA to fulfil its regulatory obligations under the Capital Requirements Directive, SRI Risk Profile Report and assess whether the Pillar 2 assessments and IFPR disclosures remain appropriate; • monitor and periodically review the Group’s procedures for ensuring compliance with regulatory and financial reporting requirements, including relationships with the relevant regulatory authorities; • review the Group’s arrangements for the deterrence, detection, prevention and investigation of financial crime, including whistleblowing arrangements; • monitor and review the effectiveness of the Group’s internal audit function and agree the scope of the internal audit plan; and • oversee the appointment, performance, remuneration and independence of the external auditors. Composition and attendance The Committee is comprised solely of Non-executive Directors • Mandy Donald • Rebecca Shelley • George Yeandle • Miriam Greenwood OBE DL (appointed 16 November 2023). The attendance record of members of the Committee during the year is shown on page 80. The Committee as a whole is considered by the Board to be appropriately experienced and sufficiently qualified to fulfil their duties and have competence relevant to the sector in which the Group operates. The Board considers Mandy Donald has recent and relevant financial experience in addition to her professional qualification as a chartered accountant. The Chief Financial Officer, Chief Compliance Officer, Head of Finance and Chief Risk Officer were regular attendees at the Committee meetings and report on their respective areas and support the Committee members, where appropriate, with their responsibilities although the agenda and items for discussion during a committee meeting is led by the Chair. The external auditor, KPMG LLP have attended all Committee meetings and met privately with the Committee and Committee Chair. Key Activities during the year The Committee has a formal programme of matters which it covers during the year. This programme is formulated by the Committee Chair and the Chief Financial Officer and is designed to ensure that all matters that fall within the Committee’s remit are reviewed during the year. The Committee has access to external independent advice at the Company’s expense, although no external advice was required during the year. During the financial year to 31 March 2024 and up to the date of this report, the Committee met seven times and its activities, amongst other things, covered the following matters: Financial Reporting • Reviewing the annual financial statements for the year ended 31 March 2023 and 2024 and half year financial statements for the six months to 30 September 2023 with particular emphasis on their fair presentation, challenging the reasonableness of management’s judgements made, notably review of the impairment of intangible assets and goodwill. There were no significant issues identified during the period in relation to the financial statements. • Review the appropriateness of the accounting policies used in drawing up the Group’s financial statements • Review and challenge of the Alternative Performance Measures used by management in the 31 March 2024 financial statements. During the year the Committee challenged management on the definitions of the Alternative Performance Measures. Management reviewed and revised the definitions to provide more clarity for the users of the Financial Statements. • Consideration of the Group’s taxation and insurance requirements. that we can build on the existing oversight activities undertaken to ensure compliance in 2026. I hope that you find this report a useful insight into the work of the Committee and I look forward to meeting with shareholders at our AGM on 19 September 2024. Mandy Donald Chair of the Audit & Risk Committee 25 June 2024 ![Graphics]() 104 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS • Review and discussion of regular reports on financial reporting, key risks, compliance, CASS and financial crime from the Head of Finance, Chief Risk Officer and Chief Compliance Officer respectively. • Share based payments are a focus for the Committee in view of the complexity of accounting, interpretation of the reporting standard and valuation of awards. • Considers the accounting for the judgmental nature of assumptions that are taken into account in the calculation of accounting models in relation to the valuation of intangible assets, goodwill and review of impairment • Considered and recommended to the Board that the certain subsidiaries take the parental guarantee in lieu of an audit for certain subsidiaries. Risk • Review of the Group’s governance, risk framework, risk management, risk management processes and related policies. • Approval of the Risk Charter and Enterprise Risk Management framework. • Review and approval of the Group’s ICARA. • Review and approval of the Group’s AAF report Governance • Review of the Group’s compliance monitoring programme, including the compliance manual. • Review of the Group’s annual anti-money laundering report. • Review of the Committee’s terms of reference. Whistleblowing • Approval of whistle blowing arrangements and appointment of Mandy Donald as the whistleblowing Champion. External Audit • Consideration of the external auditors’ report on the financial year ending 31 March 2023 and 2024 audit and discussion of their findings with them. • Review and consideration of the external auditors’ reports on Client Money & Assets. • Reviewed and discussed the findings of 12 internal audit reports, ensuring appropriate follow up by management of points raised. • Approval of the external audit plan for 2024. • Assessment of the performance, independence and objectivity of the external auditors, concluding that the • Committee was satisfied with the quality and effectiveness • of the audit; and noting that the auditors had appropriately challenged management’s assumptions and estimates. • Review and approval of all non-audit services to be carried out by the external auditors. Internal Audit • Review of the internal audit plan in the context of the Company’s overall risk management programme detailed above. ESG • Review of ESG reporting and metrics. The Committee discussed the impact of climate on the audit with the auditors. Significant accounting matters Acquisitions and impairment The Committee receives information and explanations from management, which is discussed with them and the external auditors, taking into account the results of the auditors work. Goodwill and Intangible assets arising on acquisitions is capitalised in the consolidated balance sheet. Goodwill is carried at cost less provision for impairment. The costs of acquiring intangible assets such as fund management contracts are capitalised where it is probable that future economic benefits that are attributable to the assets and goodwill will flow to the Group and the cost of the assets can be measured reliably. The assets are held at cost less accumulated amortisation. An assessment is made at each reporting date, on a standalone basis for each intangible asset, as to whether there is any indication that the asset in use may be impaired. During the year indicators of impairment were identified by management for the Architas and Majedie intangible assets due to higher-than-expected outflows. Subsequently, management retested the value of these intangible assets at 30 September 2023 resulting in impairments on Majedie intangible and goodwill and Architas intangible assets. Additionally, these assets were retested on 31 March 2024 resulting in a further impairment on the Majedie intangible asset and goodwill. The Committee considered management’s assessments and the views of the external auditors and are satisfied that the correct accounting treatment has been followed. Review of Audit Effectiveness External auditors As previously reported, the Committee undertook an Audit tender process in 2021 of which KPMG was selected as External Auditor, with Jatin Patel being appointed audit lead the same year. The tender was conducted in accordance with the FRC’s Best Practice Guide to Audit Tendering. In line with requirements, the Company intends to undertake a further competitive audit tender no later than 2028/9. The Committee has considered the FRCs Audit Quality Inspection and Supervision Report for KPMG LLP for 2023. The contents of the report were discussed with the audit partner. The Committee has considered the effectiveness of the external audit process throughout the year and included the activities and steps detailed below. ![Graphics]() 105 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT Each year the auditors present to the Committee the proposed scope of their full year audit plan, including their assessmen of the material risks to the Group’s audit and their proposed materiality levels. This plan is reviewed by the Committee and consideration is given to its coverage and the identification of risks. The Committee was satisfied that the audit plan proposed provided appropriate coverage and that the identification of material risks to the Group’s audit are covered by the audit plan. The Committee assesses the quality of the interactions of the Audit team with the Committee, including the provision of technical and industry knowledge. The audit partner attends the Committee meetings. In addition, the Committee met twice with the external auditors without management present. Each year, the Committee assesses the performance and independence of the external auditors prior to proposition of a resolution on their reappointment and remuneration at the Annual General Meeting. This assessment includes the review of the auditor’s challenge of management’s assumptions to ensure that the auditor has demonstrated professional scepticism. The Committee has concluded that KPMG have carried out their audit for the year-ended 31 March 2024 effectively. Based on the satisfactory conclusion of the work described above carried out by the Committee to assess the performance of the external auditors and safeguard their independence, the Committee has recommended their reappointment to the Board and a resolution will be proposed at the 2024 Annual General Meeting for the reappointment of KPMG as external auditors. Non-audit services The Committee has implemented a policy and guidelines on provision of non-audit services by the external auditors to safeguard their objectivity and independence. This policy has been approved by the Committee and is reviewed annually. The policy provides that provision of certain types of non-audit services are not permitted under any circumstances (“Prohibited Services”) whilst others allowed (“Allowed Services”). The Chair and Head of Finance regularly review any non-audit services and have a two-step sign off process to agree if work can commence. The Committee ensures the independence of the auditors is maintained at all times and this sign off process agree each individual aspect of work ensures independence is safeguarded and the auditor’s objectivity is maintained. Prohibited Services are those where the Committee considers that the possibilities of a threat to auditor independence is high. Allowed Services are those considered to have a low threat to auditor independence. Nonetheless, Allowed Services still need the Committee’s approval in advance. All services are reviewed and ratified by the Committee. The policy also sets out certain disclosures the external auditors must make to the Committee, restrictions on employing the external auditors’ former employees, partner rotation and the procedures for approving non-audit services provided by the auditors. The policy is reviewed regularly and updated to ensure compliance with all applicable regulations. During the year, the external auditors were, on several occasions, engaged as advisers. The services provided related to the regulatory CASS (client money) audits, interim review, ESG disclosures assurance, work related to the merger and closure of authorised investment funds and reporting accountant work related to a potential acquisition including the potential GAM acquisition. The Committee is satisfied that the external auditors were best placed to provide these services because of their familiarity with the relevant areas of Group’s business and that there are no matters that would compromise the independence of the external auditors or affect the performance of their statutory duties. The Committee receives a regular report setting out the non- audit services provided by the external auditors during the year and the fees charged. Details of fees paid to the auditors can be found in Note 6 of the financial statements. The non-audit services as identified in Note 6 have all complied with the policy as detailed above. External Audit oversight conclusion The Committee concludes that KPMG is effective, undertakes the audit with integrity and sufficient challenge and remains independent. Internal Auditors The Internal Auditor has a direct reporting line to the Chair of the Committee. The Committee continues to review the effectiveness of the internal audit function, ensuring an appropriately resourced and competent external firm are appointed as Internal auditors. The Committee ensures the externally appointed firm are independent of the day-to-day activities of the Group, whilst still having appropriate access to records. The Committee and the Internal Auditors have agreed a rolling three year Internal Audit plan, this includes the following Audit areas: Operational Risk Management Framework, Assessment of Value, Environment, Social and Governance, Corporate Governance Framework, Conduct and Culture, Portfolio Risk Management, Compliance and Regulation, Finance, Trade Execution and Allocation, Market Abuse and Mandate Compliance. The Internal Auditors will also perform a full systems and controls review every three years, with all management feedback to findings being independently reviewed and challenged by the Committee before being approved. The Committee regularly meets with the Internal Auditor, with and without management present, throughout the year to receive updates and to review its findings. Each year the Committee considers the scope of the internal audit plan and the performance of the Internal Auditors prior to the commencement of the next year’s internal audit programme to ensure they remain consistent with the Group’s requirements. ![Graphics]() 106 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS #### REMUNERATION REPORT Dear shareholder, INTRODUCTION BY THE CHAIR OF THE REMUNERATION COMMITTEE On behalf of the Remuneration Committee (the “Committee”), I am pleased to present the Remuneration Report for the year ended 31 March 2024, which will be my last report as Chair of the Committee. As you will be aware, with effect from 1 April 2024, Miriam Greenwood became the new Chair of the Committee. I remain a member of the Committee and will retire from the Board at the 2024 AGM. This letter is intended to provide a summary of key events during the year from a Committee perspective and to give further insight into the workings of the Committee and its approach. The Annual Report on Remuneration outlines how we implemented the current Directors’ Remuneration Policy (“DRP”) and how we intend to apply the Policy in the financial year ending 31 March 2025. This report will be subject to an advisory vote at our 2024 AGM, to be held on 19 September 2024. DIRECTORS’ REMUNERATION POLICY This year marks the second full year in the operation of our most recent DRP. which was approved by Shareholders at a General meeting in February 2022. The DRP is available on the Company’s website (in the Investor Relations section) and we have, therefore, only included the DRP’s Elements of Reward table in this report. When the current DRP was put in place, we stated that it would remain in force until our annual general meeting in 2024. We have, therefore set out the new DRP intended to apply from 1 April 2025 and is subject to a binding vote at our 2024 AGM, to be held on 19 September 2024. The proposed new DRP is introduced and set out by Miriam Greenwood in the New Directors’ Remuneration Policy section below. IMPLEMENTATION OF THE DRP IN FY24 I have consistently maintained that although the DRP is critical in establishing the framework for Executive Director remuneration the Committee should be judged on how it implements that policy. It is the actual outcome that matters rather than the theoretical one. In that respect I have set out below how the DRP has been implemented including where changes have been made either by the Committee using its judgement or exercising its discretion to impact pay outcomes. Our guiding principle remains that only exceptional, stretch performance will receive exceptional reward. I remain committed to openness and with transparency of performance metrics and their associated weighted outcomes and how, in turn, this affects annual bonus. We have also set out full disclosure of the performance conditions on granted LTIP awards. VARIABLE REMUNERATION FOR FY24 Annual Bonus The Committee undertook a review of performance against all bonus metrics, both quantitative and qualitative. As Shareholders will be aware this was a challenging year for many active asset managers in the UK market but the Committee considered that no adjustments should be made to the financial metrics on account of difficult trading conditions. Financial metrics were based around budgets and cross referenced for reasonableness to analysts consensus numbers. The outturn for the financial metrics, as fully disclosed later, was nil vesting compared with the maximum opportunity of 70%. The Committee noted the significant improvement in weighted investment performance (a 61% outcome) and that the threshold vesting of this financial metric at 67.5% was particularly stretching. For the ESG metrics the Committee assessed performance overall as above target, once again as fully disclosed later in the Annual Report on Remuneration. This produces a vesting of 22% compared with the maximum opportunity of 30%. However, given the overall disappointing financial performance in the year the Committee decided to use its discretion to limit the overall vesting of the annual bonus to 20%. This reduction also means the final outcome mirrors the reduction in the Adjusted profit before tax\* for the year. The cash element of the bonus is restricted to 50% with the remaining 50% deferred into a range of Liontrust Funds which the Committee believes aligns the Executive Directors with the experience of those who invest in our funds. In order to satisfy itself further that the outturn of the annual bonus for 2024 was appropriate the Committee referenced that: \*These are Alternative Performance Measures. The disclosure, definition and nature of adjustments to GAAP measures to the disclosed APMs is a judgement made by management and is a matter referred to the Audit & Risk Committee for approval prior to issuing the financial statements. See Page 32 for details. ![Graphics]() 107 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT • there was no adjustment necessary when considering the overlay of risk management, compliance, conduct and personal performance; • the level of the bonus for Executive Directors, is completely consistent with senior management and the wider workforce. In a difficult year the outcome of bonus pay has been fairly shared across the business and in no way favours the Executive Directors; and; • there was a robust debate about whether to vest any of the ESG metrics given the financial performance. The Committee and the Board believe that to improve long term sustainable value for all stakeholders the ‘how’ is as important as the ‘what’. Recognising the significant improvement made across all ESG measures and the importance of Responsible Capitalism within the business the Committee considered it right to recognise and reward performance in this area. In addition, the Committee noted: • the final financial outcome was at the top end of analysts’ predictions; and above consensus; • the significant improvement in investment performance; and • the annual dividend for the year to 31 March 2024 has been maintained LTIP The FY21 LTIP award vested in the period with 37.3% of awards vesting. See section 3.1 of the Annual Report on Remuneration for further information. SINGLE FIGURE TOTAL FOR REMUNERATION FOR FY24 In summary, the variable remuneration total from the single figure total for remuneration for FY24 for John Ions and Vinay Abrol, as set out in the Annual Report on Remuneration, when compared to last year is down 47% and 48% respectively. Fixed remuneration in FY25 Fixed remuneration under the DRP for the Executive Directors is capable of rising in line with that of the wider workforce. In recognition of the broader, societal context for pay awards and taking into account the financial performance of the Group over the year, the Committee resolved not to increase base pay for the Executive Directors for the next year. The salary increase for employees and members (excluding fund managers and the Executive Directors) is 4.0% on average and is focused on our less senior colleagues. Pension/cash payments in lieu of pension for the Executive Directors to be the same as and in no case higher than for the majority of the workforce. Therefore the pension/cash in lieu of pension for the Executive Directors will remain at 12.5% in line with the majority of the workforce. Annual bonus for FY25 The Committee intends to operate the assessment of annual bonus for 2025 on a very similar basis to 2024 with 70% of the scorecard focused on Financial Metrics split between Adjusted profit before tax\* of 50%, Distribution effectiveness (new flows) of 10%; and investment performance of 10%. There will continue to be Non-Financial Metrics (30%) to ensure that the Executive Directors lead and oversee the components of ESG what we know as “Responsible Capitalism” in the business, but will look to link the Non-Financial Metrics to our four strategic objectives which will be drivers of future growth. The first objective is to continue to enhance the client experience and outcomes. The second objective is to diversify the product range and investment offering selectively with teams that meet our investment approach. The third objective is to broaden further distribution and the client base in the UK and internationally. The fourth objective is to strengthen our technology, data and digital capability to advance investment management, client service and efficiencies. LTIP for FY25 The LTIP award for the Executive Directors for the year ending 31 March 2025, in line with the current DRP, will once again be a fixed number of shares and can be summarised as follows: • LTIP awards for the financial year ended 31 March 2025 of 153,130 and 112,295 for John Ions and Vinay Abrol respectively; and • No adjustment has been made for the weakness of the share price and the awards represent for John Ions a multiple of 176% of salary. This supports the Committee’s view that the LTIP is about the long-term transformation of the business in the next age of Liontrust and certainly does not reward short term volatility. The Group will make these awards as soon as possible after the announcement of the Group’s annual results. The performance criteria for these LTIP awards will be will include financial measures i.e. Adjusted diluted earnings per share\* (60%) and relative TSR growth (40%). \*These are Alternative Performance Measures. The disclosure, definition and nature of adjustments to GAAP measures to the disclosed APMs is a judgement made by management and is a matter referred to the Audit & Risk Committee for approval prior to issuing the financial statements. See Page 32 for details. ![Graphics]() 108 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS DEVELOPMENTS IN LEGISLATION AND GOVERNANCE The current DRP, as approved by shareholders at our February 2022 General Meeting and subsequently amended following consultation, remains appropriate and no changes are proposed this year. The Annual Report on Remuneration is subject to an advisory shareholder vote at our 2024 AGM. Additionally, the Committee has considered the various requirements under the latest Corporate Governance Code in relation to justification of Executive Director pay in the context of strategic rationale, internal and external measures, and Company-wide pay policies. I am satisfied that the provisions of paragraph 41 of the code have been met and, in particular, that the policy has operated this year as intended in terms of the Group’s performance and following the decisions of the Committee as to quantum. The Committee specifically considered progress across the Company in gender equality when assessing bonus outcomes. The Committee is using the Workforce Advisory Forum (“WAF”) to engage with the wider employee group, generally and specifically, on how Executive Director remuneration aligns with the wider company pay policy. I can also confirm that Miriam Greenwood, as the new Chair of the Committee, has met with the WAF to present and discuss remuneration matters. Further details on our progress on employee engagement is contained within the Nomination Committee report. Mandy Donald, the Non-executive Director responsible for employee engagement, and attends the WAF, provides valuable feedback to the Committee on employee engagement matters. SHAREHOLDER ENGAGEMENT I have always welcomed feedback from our shareholders on all aspects of Executive Director remuneration and will be continuing engagement with them in the run up to the AGM and beyond. I believe changes through iteration is a strength not a weakness. We hope that we will earn your support in respect of our Remuneration Report for 2024 at the forthcoming AGM. THE ROLE OF THE COMMITTEE AND ITS COMPOSITION The Committee is charged with determining remuneration policy for, and setting pay and other benefits of, the Executive Directors of the Company and reviewing pay and other benefits of the Group’s workforce. All its recommendations are referred to the Board. Any Director, who has an interest in the matter which is the subject of a recommendation to the Board, abstains from the Board’s vote in relation to that matter and takes no part in its deliberations. The Committee may use external advisors if required. The terms of reference of the Committee, which explains its role and the authority delegated to it by the Board, are available on the Company’s website or upon request from the Company Secretary. George Yeandle Chair of the Remuneration Committee (for the financial year ended 31 March 2024) 25 June 2024 ![Graphics]() 109 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT #### NEW DIRECTORS’ REMUNERATION POLICY Dear shareholder, On behalf of the Remuneration Committee (the “Committee”), I am pleased to present the new Directors’ Remuneration Policy (“DRP”). As you will be aware, with effect from 1 April 2024, I became the new Chair of the Committee. George Yeandle and I have worked closely together to deliver on the Remuneration outcomes for the business and I would like to thank him for his contribution and support. As the Chair it is my responsibility to bring forward the new DRP. This section below sets out the new DRP, proposed for shareholders’ approval at the 2024 AGM on 19 September 2024 and subject to receiving shareholder approval, the DRP is intended to apply for three years to the end of the AGM in 2027. SETTING THE DRP The Committee undertook a detailed review of the DRP during 2024 to ensure the policy enables the Group to be successful in the delivery of its strategy which focuses on expanding distribution in the UK and internationally, broadening the investment capability and asset classes, enhancing the client experience and outcomes, and developing our technology, data and digital capability to drive growth. The Committee believes that the DRP should create a competitive package to support the retention and incentivisation of a high calibre, well regarded management team to deliver this next phase of Liontrust’s growth and strategy. The Committee has recognised the significant personal shareholding of the CEO and CFO (currently 1,200% and 1,700% of salary respectively) and the relatively low levels of unvested deferred awards they currently have outstanding (following successive years of reduced variable pay outcomes). This has resulted in what the Committee and the Board considers is an insufficient level of lock-in for the current Executive Directors. A key consideration for the Committee, therefore, is to create appropriate levels of opportunity and retention for the Executive Directors through the proposed DRP and to deliver this through a mix of shares and funds to create alignment with our shareholders and investors in our funds. This will cascade through the senior leadership of business. The Committee also reflected carefully on the challenge from shareholders in relation to our current DRP. The Committee noted that this was primarily driven by the view that the maximum potential opportunity under the LTIP was excessive and uncapped, and the structure, granting a fixed number of shares each year, was unconventional. The Committee sought independent advice from, PricewaterhouseCoopers LLP. We also consulted extensively with a significant number of our shareholders as well as proxy advisors to consider their views on the proposed DRP. We found this engagement to be valuable and constructive and we were pleased with the level of feedback and support received. Based on our review and taking into account the feedback received from our shareholders as part of our engagement on the DRP, the Committee concluded that the new DRP should: • incentivise the Executive team to deliver on the strategic priorities; • help retain and attract talent; • maintain strong alignment with the achievement of our strategic priorities and the shareholder experience; and • introduce simplicity and strong alignment with a typical FTSE remuneration approach by moving to an LTIP award based on a more traditional percentage of salary grant rather than a fixed number of shares with an uncapped value at grant. SUMMARY OF PROPOSED CHANGES TO THE DRP The proposed DRP is set out below. The only material change to be made under the proposed DRP relates to the LTIP structure. As part of the transition to a more conventional and market-aligned LTIP structure, the Committee is proposing to replace the LTIP structure under which each annual LTIP award was of a fixed quantum of shares with a LTIP structure under which grants will be capped as a percentage of salary. The maximum LTIP opportunity under the proposed DRP will be 350% and 250% of salary for the CEO and CFO, respectively. This follows UK standard practice. To address shareholder feedback, the minimum weighting of financial vs non- financial targets in the annual bonus scorecard will be adjusted to 80% to 20% to ensure the annual bonus payouts have strong alignment with shareholder experience. Minor changes have also been made to provide the Committee with sufficient flexibility to implement the policy, as intended ,over its term. This includes providing the Committee the flexibility to determine the payout for threshold performance to be up to 25% of the maximum. This change will allow the Committee to set an appropriate level of threshold payout for each financial year taking into account the reduced variable pay opportunity under the proposed DRP and the new LTIP award structure (which is now aligned with UK standard practice where payout for threshold performance is typically set at 25%), market and economic conditions at the time of setting targets and any shareholder feedback. The Committee will also ensure targets set have an appropriate level of stretch reflecting the payout profile at different performance levels. The targets will also be aligned with the delivery of our strategic objectives and with a strong link with shareholder experience and overall Group performance. As part of the consultation some of our shareholders noted that it may be preferable to phase-in the maximum LTIP opportunity once there has been an improvement in the Group’s performance. The Committee reflected on this feedback and it is their current intention that the first LTIP grants under the new DRP in June 2025 will be no more than 90% of the relevant maximum individual limit (i.e. 315% of salary for John Ions) unless there has been an improvement in the ![Graphics]() 110 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS Objective and link to strategy Operation Maximum opportunity Performance measures and assessment Base salary To provide a satisfactory base salary within a total compensation package. The level of base salary to reflect the complexity of the business, market levels and skills required to deliver our strategy. It is also designed to attract and retain talent. Salaries are reviewed annually and become effective in April taking account of market levels, corporate performance and individual performance. In normal circumstances, the Committee will ensure that the percentage of any annual increases in base salary will be no more than the average percentage increase for the wider workforce for that year. The Committee may determine larger increases in exceptional circumstances, such as a change in responsibility, where the overall remuneration opportunity has been set lower than the market and when it is justified based on skills, experience and performance in the role. Not applicable. Pension To provide competitive levels of retirement benefit. Executive Directors are eligible to receive pension contributions into the Liontrust Group Pension Plan. Executive Directors have the choice of taking an equivalent cash payment in lieu of pension contributions. The maximum percentage of salary that the Executive Directors can receive as a pension contribution or cash equivalent will be aligned with the average funding percentage for the wider workforce (excluding fund managers), currently 12.5%. Not applicable. Benefits To provide benefits which are appropriately competitive. Executive Directors are entitled to a range of benefits which currently include private medical insurance, life insurance, disability, assurance, travel insurance and access to an employee/member assistance programme. Where relocation payments or allowances are paid, they will be capped at 50% of base salary. Additional benefits, including participation in all employee share plans on the same basis as all other employees, may also be provided in such other circumstances as the Committee may determine in its discretion. The maximum opportunity for benefits is defined by the nature of the benefit itself and the cost of providing it. As the cost of providing such insurance benefits varies according to premium rates and the cost of other benefits is dependent on market rates and other factors, there is no formal maximum monetary value. The benefit amount will be disclosed in the single figure of remuneration table for the relevant year as required. Not applicable. Annual bonus The annual bonus rewards good performance of the Group and individual Executive Directors, and is based on a balanced scorecard of financial and non-financial measures which align with the performance and delivery of annual objectives and strategic priorities. Deferral ensures a link to longer term performance and risk management and aligns the interests of Executive Directors with those of shareholders and fund investors. Executive Directors are eligible to participate in the annual bonus at the discretion of the Remuneration Committee. The performance period for the annual bonus will be 1 April - 31 March each year. Performance measures and weightings are determined annually but will include a mix of financial and non-financial measures. Awards may be deferred into Liontrust shares and/or fund units. Deferral will be in line with the regulatory requirement, with a minimum 50% deferral, vesting annually over three years (subject to a continuing employment and/or membership requirement) or such other period as may be determined by the Committee at its discretion. Deferral will automatically be made into Liontrust shares unless the shareholding requirement has been met, in which case deferral will be made into fund units in line with regulatory expectations under the FCA’s remuneration rules. Where required by regulation, the element of the bonus deferred into shares and/or fund units may be subject to a post-vesting retention period. At the discretion of the Committee, dividend equivalents may be awarded on vested deferred awards in respect of dividends paid during the vesting and holding period on the underlying shares/fund units. CEO: Maximum award is 450% of base salary. CFO: Maximum award is 350% of base salary. Awards are subject to continued employment and a balanced scorecard of measures, with assigned weightings and targets set each year. A mix of financial and non-financial criteria will be used each year and may include financial, strategic, operational and ESG measures. Financial measures will account for at least 80% of the annual bonus. Payout at stretch performance will be set at 100% of maximum award while payout at entry level performance will be up to 25% of maximum award as determined by the Committee for each financial year. Individual risk and compliance behaviour is also considered in detail for relevant roles and factored into the assessment of performance and the determination of the bonus awarded. Discretion may be exercised in cases where the Committee believes that the bonus outcome is not a fair and accurate reflection of business performance. The exercise of this discretion may result in a downward or upward adjustment in the amount of the bonus payout resulting from the application of the performance measures. Any adjustments will be disclosed in the relevant annual report. The Committee also retains discretion in exceptional circumstances to change performance measures and targets part-way through a financial year if there is a significant and material event which causes the Committee to believe the original measures are no longer appropriate. Any adjustments or discretion applied by the Committee will be fully disclosed in the relevant year’s Remuneration Report as required by the reporting requirements. REMUNERATION POLICY FOR EXECUTIVE DIRECTORS – COMPONENTS OF EXECUTIVE DIRECTOR REMUNERATION The following Remuneration Policy table (over the next four pages) summarises each of the remuneration elements payable to the Executive Directors, with additional information provided in the sections following the table: performance of the Group. For this purpose, the Committee will take into consideration the financial performance of the Group in the financial year ending 31 March 2025 and the market capitalisation of the Company at this time to assess whether there has been an improvement in the performance of the Group. Only where the Committee is satisfied that there has been an improvement in the performance will it consider making an LTIP grant at the maximum opportunity set out in the new DRP. Details of this assessment will be set out in the Annual Report on Remuneration. The Committee also can exercise operational discretions available under the various incentive plan rules in addition to the specific discretions expressly set out in the DRP to adjust the percentage of awards that vest to ensure that variable remuneration outcomes align with the shareholder experience. ![Graphics]() 111 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT Objective and link to strategy Operation Maximum opportunity Performance measures and assessment Base salary To provide a satisfactory base salary within a total compensation package. The level of base salary to reflect the complexity of the business, market levels and skills required to deliver our strategy. It is also designed to attract and retain talent. Salaries are reviewed annually and become effective in April taking account of market levels, corporate performance and individual performance. In normal circumstances, the Committee will ensure that the percentage of any annual increases in base salary will be no more than the average percentage increase for the wider workforce for that year. The Committee may determine larger increases in exceptional circumstances, such as a change in responsibility, where the overall remuneration opportunity has been set lower than the market and when it is justified based on skills, experience and performance in the role. Not applicable. Pension To provide competitive levels of retirement benefit. Executive Directors are eligible to receive pension contributions into the Liontrust Group Pension Plan. Executive Directors have the choice of taking an equivalent cash payment in lieu of pension contributions. The maximum percentage of salary that the Executive Directors can receive as a pension contribution or cash equivalent will be aligned with the average funding percentage for the wider workforce (excluding fund managers), currently 12.5%. Not applicable. Benefits To provide benefits which are appropriately competitive. Executive Directors are entitled to a range of benefits which currently include private medical insurance, life insurance, disability, assurance, travel insurance and access to an employee/member assistance programme. Where relocation payments or allowances are paid, they will be capped at 50% of base salary. Additional benefits, including participation in all employee share plans on the same basis as all other employees, may also be provided in such other circumstances as the Committee may determine in its discretion. The maximum opportunity for benefits is defined by the nature of the benefit itself and the cost of providing it. As the cost of providing such insurance benefits varies according to premium rates and the cost of other benefits is dependent on market rates and other factors, there is no formal maximum monetary value. The benefit amount will be disclosed in the single figure of remuneration table for the relevant year as required. Not applicable. Annual bonus The annual bonus rewards good performance of the Group and individual Executive Directors, and is based on a balanced scorecard of financial and non-financial measures which align with the performance and delivery of annual objectives and strategic priorities. Deferral ensures a link to longer term performance and risk management and aligns the interests of Executive Directors with those of shareholders and fund investors. Executive Directors are eligible to participate in the annual bonus at the discretion of the Remuneration Committee. The performance period for the annual bonus will be 1 April - 31 March each year. Performance measures and weightings are determined annually but will include a mix of financial and non-financial measures. Awards may be deferred into Liontrust shares and/or fund units. Deferral will be in line with the regulatory requirement, with a minimum 50% deferral, vesting annually over three years (subject to a continuing employment and/or membership requirement) or such other period as may be determined by the Committee at its discretion. Deferral will automatically be made into Liontrust shares unless the shareholding requirement has been met, in which case deferral will be made into fund units in line with regulatory expectations under the FCA’s remuneration rules. Where required by regulation, the element of the bonus deferred into shares and/or fund units may be subject to a post-vesting retention period. At the discretion of the Committee, dividend equivalents may be awarded on vested deferred awards in respect of dividends paid during the vesting and holding period on the underlying shares/fund units. CEO: Maximum award is 450% of base salary. CFO: Maximum award is 350% of base salary. Awards are subject to continued employment and a balanced scorecard of measures, with assigned weightings and targets set each year. A mix of financial and non-financial criteria will be used each year and may include financial, strategic, operational and ESG measures. Financial measures will account for at least 80% of the annual bonus. Payout at stretch performance will be set at 100% of maximum award while payout at entry level performance will be up to 25% of maximum award as determined by the Committee for each financial year. Individual risk and compliance behaviour is also considered in detail for relevant roles and factored into the assessment of performance and the determination of the bonus awarded. Discretion may be exercised in cases where the Committee believes that the bonus outcome is not a fair and accurate reflection of business performance. The exercise of this discretion may result in a downward or upward adjustment in the amount of the bonus payout resulting from the application of the performance measures. Any adjustments will be disclosed in the relevant annual report. The Committee also retains discretion in exceptional circumstances to change performance measures and targets part-way through a financial year if there is a significant and material event which causes the Committee to believe the original measures are no longer appropriate. Any adjustments or discretion applied by the Committee will be fully disclosed in the relevant year’s Remuneration Report as required by the reporting requirements. ![Graphics]() 112 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS Objective and link to strategy Operation Maximum opportunity Performance measures and assessment Long-Term Incentive Plan (“LTIP”) The LTIP is intended to provide long term reward, incentivise strong performance and retain the Executive Directors. Vesting will be subject to a continuing employment/ membership requirement and performance conditions which are linked to key financial and shareholder return measures LTIP awards are normally granted annually over Liontrust shares with vesting dependent on the achievement of stretching performance conditions. Performance is measured over a 3-year period. Shares received on or after vesting are subject to a 2-year holding period commencing on the date of vesting or such other period as may be determined by the Committee at its discretion noting any applicable regulatory requirements. The operation of the LTIP is reviewed annually to ensure that grant levels, performance measures and other features remain appropriate to the Company’s current circumstances. Dividend equivalents may be awarded on vested shares in respect of dividends paid during the vesting and holding period. CEO: Maximum award is 350% of base salary. CFO: Maximum award is 250% of base salary. The first LTIP grant will not be more than 90% of the maximum opportunity for the CEO and CFO unless there has been an improvement in the financial performance of the Group. For this purpose, the Committee will take into consideration the financial performance of the business in the relevant financial year ending 31 March 2025) and the market capitalisation of the Group at this time to assess whether there has been an improvement in the performance of the Group. Only where the Committee is satisfied that there has been an improvement in the performance will it consider making an LTIP grant at the maximum opportunity. The vesting of awards is subject to continued employment and achievement of performance conditions linked closely to financial performance and shareholder return as set out below. Currently, the performance measures are expected to be: 1. absolute TSR (40% weighting) with a relative TSR underpin. The relative TSR underpin will be assessed against the FTSE 250 and allow the Committee to flex the outcome of the absolute TSR assessment by up to 10% of the award, creating strong alignment with shareholders. 2. EPS (30% weighting) 3. Investment performance (3 year and 5 year) (30% weighting). This can involve looking at the weighted fund performance that is in the first or second quartile of their respective Investment Association sector over the 3 and 5 year period as at the end of the relevant 3 year performance period for each LTIP award. Entry level performance will payout up to 25% of maximum as determined by the Committee for each financial year whilst payout at stretch performance will be set at 100% of the maximum award. In line with the UK Corporate Governance Code, the Committee has the discretion to adjust formulaic outcomes of the LTIP to reflect overall corporate performance. Any adjustments or discretion applied by the Committee will be fully disclosed in the relevant year’s Remuneration Report as required by the reporting requirements. Share Incentive Plan (“SIP”) The SIP allows all employees, including the Executive Directors, to purchase Company shares with a matching element, to build up an interest in Company shares and to increase alignment of interests with shareholders. An all-employee HMRC approved share plan that allows the Executive Directors to purchase shares, in a tax efficient manner and subject to limits, which are matched by the Company. In line with the normal operation of a SIP envisaged by HMRC, there are no performance conditions on matching shares. Up to a maximum of £1,800 to purchase Partnership Shares which are matched by the Company on a 2 for 1 basis. Not applicable. Save As You Earn (“SAYE”) The SAYE allows all employees, including the Executive Directors, to make contributions to a savings plan that can then be used at the end of the scheme to purchase shares at a discounted price, to build up an interest in Company shares and to increase alignment of interests with shareholders An all employee HMRC approved savings scheme that allows the Directors to purchase shares, in a tax efficient manner and subject to limits, at a discounted price. The option price can be at a discount to the prevailing share price. Currently the discount can be up to a maximum of 20%, as permitted under the applicable HMRC rules. Subject to completing the full term of the scheme, the option can be exercised, or savings can be redeemed in cash. There are no performance conditions linked to the options granted. Savings of £500 per month across all SAYE schemes participated in. Not applicable. Shareholding requirement The shareholder requirement aligns the interests of Executive Directors with those of shareholders. The shareholder requirement further aligns the interests of Executive Directors with those of shareholders and encourages the Executive Directors to focus on sustainable long-term performance. The employee shareholding requirement is 500% of base salary for all Executive Directors. In addition to personally owned shares, any unvested shares which are not subject to performance conditions (such as shares deferred under the annual bonus) and vested shares subject to a holding period will count towards the shareholding requirement, net of tax. In the case of incoming Executive Directors, the shareholding requirement is expected to be met within five years of an Executive Director’s appointment. The post-employment shareholding requirement is to continue to hold, for a period of two years after stepping down as an Executive Director, the lower of the i) shareholding requirement immediately prior to cessation or ii) shares acquired through variable pay awards granted under this DRP and the previous shareholder approved DRP. Not applicable. Not applicable. ![Graphics]() 113 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT Objective and link to strategy Operation Maximum opportunity Performance measures and assessment Long-Term Incentive Plan (“LTIP”) The LTIP is intended to provide long term reward, incentivise strong performance and retain the Executive Directors. Vesting will be subject to a continuing employment/ membership requirement and performance conditions which are linked to key financial and shareholder return measures LTIP awards are normally granted annually over Liontrust shares with vesting dependent on the achievement of stretching performance conditions. Performance is measured over a 3-year period. Shares received on or after vesting are subject to a 2-year holding period commencing on the date of vesting or such other period as may be determined by the Committee at its discretion noting any applicable regulatory requirements. The operation of the LTIP is reviewed annually to ensure that grant levels, performance measures and other features remain appropriate to the Company’s current circumstances. Dividend equivalents may be awarded on vested shares in respect of dividends paid during the vesting and holding period. CEO: Maximum award is 350% of base salary. CFO: Maximum award is 250% of base salary. The first LTIP grant will not be more than 90% of the maximum opportunity for the CEO and CFO unless there has been an improvement in the financial performance of the Group. For this purpose, the Committee will take into consideration the financial performance of the business in the relevant financial year ending 31 March 2025) and the market capitalisation of the Group at this time to assess whether there has been an improvement in the performance of the Group. Only where the Committee is satisfied that there has been an improvement in the performance will it consider making an LTIP grant at the maximum opportunity. The vesting of awards is subject to continued employment and achievement of performance conditions linked closely to financial performance and shareholder return as set out below. Currently, the performance measures are expected to be: 1. absolute TSR (40% weighting) with a relative TSR underpin. The relative TSR underpin will be assessed against the FTSE 250 and allow the Committee to flex the outcome of the absolute TSR assessment by up to 10% of the award, creating strong alignment with shareholders. 2. EPS (30% weighting) 3. Investment performance (3 year and 5 year) (30% weighting). This can involve looking at the weighted fund performance that is in the first or second quartile of their respective Investment Association sector over the 3 and 5 year period as at the end of the relevant 3 year performance period for each LTIP award. Entry level performance will payout up to 25% of maximum as determined by the Committee for each financial year whilst payout at stretch performance will be set at 100% of the maximum award. In line with the UK Corporate Governance Code, the Committee has the discretion to adjust formulaic outcomes of the LTIP to reflect overall corporate performance. Any adjustments or discretion applied by the Committee will be fully disclosed in the relevant year’s Remuneration Report as required by the reporting requirements. Share Incentive Plan (“SIP”) The SIP allows all employees, including the Executive Directors, to purchase Company shares with a matching element, to build up an interest in Company shares and to increase alignment of interests with shareholders. An all-employee HMRC approved share plan that allows the Executive Directors to purchase shares, in a tax efficient manner and subject to limits, which are matched by the Company. In line with the normal operation of a SIP envisaged by HMRC, there are no performance conditions on matching shares. Up to a maximum of £1,800 to purchase Partnership Shares which are matched by the Company on a 2 for 1 basis. Not applicable. Save As You Earn (“SAYE”) The SAYE allows all employees, including the Executive Directors, to make contributions to a savings plan that can then be used at the end of the scheme to purchase shares at a discounted price, to build up an interest in Company shares and to increase alignment of interests with shareholders An all employee HMRC approved savings scheme that allows the Directors to purchase shares, in a tax efficient manner and subject to limits, at a discounted price. The option price can be at a discount to the prevailing share price. Currently the discount can be up to a maximum of 20%, as permitted under the applicable HMRC rules. Subject to completing the full term of the scheme, the option can be exercised, or savings can be redeemed in cash. There are no performance conditions linked to the options granted. Savings of £500 per month across all SAYE schemes participated in. Not applicable. Shareholding requirement The shareholder requirement aligns the interests of Executive Directors with those of shareholders. The shareholder requirement further aligns the interests of Executive Directors with those of shareholders and encourages the Executive Directors to focus on sustainable long-term performance. The employee shareholding requirement is 500% of base salary for all Executive Directors. In addition to personally owned shares, any unvested shares which are not subject to performance conditions (such as shares deferred under the annual bonus) and vested shares subject to a holding period will count towards the shareholding requirement, net of tax. In the case of incoming Executive Directors, the shareholding requirement is expected to be met within five years of an Executive Director’s appointment. The post-employment shareholding requirement is to continue to hold, for a period of two years after stepping down as an Executive Director, the lower of the i) shareholding requirement immediately prior to cessation or ii) shares acquired through variable pay awards granted under this DRP and the previous shareholder approved DRP. Not applicable. Not applicable. ![Graphics]() 114 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS NOTES TO THE REMUNERATION POLICY TABLE Malus and clawback Malus and clawback provisions will apply whereby annual bonus and / or LTIP awards can be reduced, withheld or reclaimed in an exceptional event of: • a misstatement or misleading representation of performance; • a significant failure in risk management and control; • actions resulting in censure from a regulated authority or reputational harm; • serious misconduct for which the individual is personally responsible or directly accountable; • participation in or being responsible for conduct which resulted in significant losses to the firm; and/or • failure to meet appropriate standards of fitness and propriety. For the annual bonus, malus will apply over the deferral period and clawback will apply for 2 years after the payment of any upfront and deferred portion of the award. For the LTIP, malus will apply over the 3-year vesting period and clawback will apply over the 2-year post-vesting holding period. PAYMENTS FROM EXISTING AWARDS The Committee reserves the right to make any remuneration payments including satisfying awards of variable remuneration, notwithstanding that they are not in line with the DRP set out above, where the terms of the payment were agreed: • before the DRP set out above or any previous DRP came into effect; or • at a time where a previous DRP, approved by shareholders, was in place provided the payment is in line with the terms of that DRP; or • at a time when the relevant individual was not a Director of the Group and the payment was not in consideration for the individual becoming a Director of the Group. Details of any such payments will be set out in the Remuneration Report as they arise. PERFORMANCE MEASURES The performance measures selected for the annual bonus and LTIP awards will be set on an annual basis by the Committee, taking into account our strategic priorities and any feedback received from our shareholders. Performance measures and targets for the annual bonus and LTIP will include a balance of financial and non-financial measures which are aligned with Liontrust’s short-term and long-term key strategic priorities. Financial measures will include measures linked to profits, fund performance and TSR. Non-financial measures will include measures aligned with the delivery of our strategic priorities and ESG commitments. The targets for the measures will be set taking into account a number of factors, including targets set in our annual business plans, our strategic priorities, shareholder expectations, analyst forecasts and the economic environment. CONTEXT OF WORKFORCE PAY The Committee considers the pay and conditions of all employees and members when determining remuneration arrangements for Executive Directors. The DRP for Executive Directors contains some minor differences in the structure of pay compared to that of all other employees and members, particularly around corporate governance requirements that apply for Executive Directors. However, all employees and members, including Executive Directors, are incentivised in a similar way and are rewarded according to the success of the Group and personal performance. Participation in the all-employee share plans (the HMRC tax advantaged Save-As-You-Earn and Share Incentive Plan) is offered to all UK employees on the same terms. Benefits are also offered on a consistent basis. For example, the level of employer pension contributions or payments in lieu of pension contributions for Executive Directors as a percentage of salary will be in line with the average contribution rate for all UK employees (excluding fund managers). Other benefits, such as private medical insurance, life insurance and health-screening are offered to all employees and members on the same terms. STAKEHOLDER VIEWS The Committee is committed to ongoing dialogue with shareholders and investor bodies, and consulted with both a number of times in determining the DRP. The Committee has considered the impact of the DRP on wider stakeholders, including our clients, our employees and members and the wider economy. After consulting with our major shareholders, investor bodies and other stakeholders, feedback and views varied across these groups and was not always uniform, but the Committee is confident that the new DRP addresses areas of concern with our current DRP, ensures that our arrangements are fit for purpose as we move forward with our strategy and encourage ambition and entrepreneurial management. In particular, the changes proposed to the LTIP structure will bring our LTIP structure in line with standard UK practice. The shareholders we engaged with were supportive of this change to our LTIP structure to bring it in line with standard UK practice. The Committee is satisfied that the proposed DRP takes a responsible approach to pay and guards against irresponsible behaviour or excessive risk-taking. The Committee also consulted on the proposed changes with the Company’s workforce advisory forum given the importance of employee engagement. EXECUTIVE DIRECTOR ILLUSTRATIVE PAY SCENARIOS Our aim is to ensure that superior awards of variable remuneration are only paid for exceptional performance, with a substantial proportion of Executive Directors’ remuneration payable in the form of annual bonus and LTIP awards. The charts below illustrate the remuneration opportunity provided to each Executive Director at different levels of performance for the first year of the new DRP. ![Graphics]() At a glance – our remuneration policy for Executive Directors 0 10000002000000300000040000005000000600000070000008000000 0 1000000 2000000 3000000 4000000 CEO CFO Minimum Minimum10 0% 10 0%£660,550 £505,300 Fixed Annual bonus LTIP Fixed Annual bonus LTIP £3,578,550 £2,176,300 £5,329,350 £3,178,900 £6,350,650 £3,735,900 18% 23%46% 45%36% 32% 12% 16%49% 49%38% 35% 10% 14%41% 42%48% 45% Target Target Maximum Maximum Maximum with 50% share price growth Maximum with 50% share price growth 0 1 2 3 4 5 6 7 8 0 1 2 3 4 5 £’m £’m CEO £584k CFO £446k Base salary CEO £584k CFO £446k Perf. year Y0 Y1 Y2 Y3 Y4 Y5Total 3 year performance period 2 year holding period 10% salaryPension 10% salary CEO 450% salary CFO/COO 350% salary Annual bonus 1/3 ve sts 1/3 ve sts 1/3 ve sts Grant Vest Vest 50% upfront CEO 350% salary CFO/COO 250% salary LTIP 115 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT Element Assumptions Fixed remuneration Base salary and fixed allocation as at 1 April 2024. Benefits paid at the same level as in the financial year ended 31 March 2024. Pension of 12.5% of base salary. Annual bonus Maximum annual bonus opportunity of 450% of base salary for the CEO and 350% for the CFO. Target performance payout will be at the mid-point of payout for threshold performance at 25% of the maximum and stretch performance payout at 100% of the maximum. LTIP Maximum LTIP opportunity of 350% of base salary for the CEO and 250% for the CFO. Target performance payout will be at the mid-point of payout for threshold performance at 25% of the maximum and stretch performance payout at 100% of the maximum (with no share price growth). For maximum with 50% share price growth 100% of maximum payout is assumed with 50% growth in share price. ![Graphics]() 116 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS APPROACH TO RECRUITMENT REMUNERATION The Committee’s approach to recruitment remuneration is to pay no more than is necessary to attract appropriate candidates to the role. Our principle is that the pay of any new Executive Director would be assessed following the same principles as for the existing Executive Directors and under the applicable Directors’ Remuneration Policy previously summarised, unless specific circumstances arise that the Committee deems as appropriate, accompanied by a clear business case to secure a desired candidate. The Committee is mindful that it wishes to avoid paying more than it considers necessary to secure the preferred candidate and is cognisant of guidelines and shareholder sentiment regarding one-off or enhanced short or long term incentive payments made on recruitment and the appropriateness of any performance conditions associated with an award. SERVICE CONTRACTS AND PAYMENT FOR LOSS OF OFFICE The Directors’ employment contracts or letters of appointment or limited liability partnership membership agreements/side letters are set out below in section 7.2 of the Annual Report on Remuneration. The Group’s general policy is that each Executive Director will have a rolling contract of employment (and, if applicable side letter) with mutual notice periods of six months. If an Executive Director has a contract as an employee and as a member, then any notice periods will run concurrently. The Committee will consider the appropriate notice period when appointing any new Executive Director. If necessary to secure a new hire, a notice period of up to 12 months may be offered. When recruiting new Executive Directors, the Committee’s policy is that contracts will not contain any provision for compensation upon early termination. None of the Directors’ employment contracts or letters of appointment or limited liability partnership membership agreements/side letters contain provisions for compensation for loss of office. The Group’s policy on compensation for loss of office is set out on the page opposite. Element Policy Base salary/fees and benefits New Directors will be provided with a satisfactory base salary and/or fee level within a total package. Performance-related components and certain benefits for Executive Directors are calculated by reference to base salary. The level of salary and fee broadly reflects the value of the individual, their role, skills and experience. New Executive Directors shall be eligible to receive benefits in line with the Group’s benefits policy as set out in the Remuneration Policy for Executive Directors. Pension New Executive Directors will be provided with post-retirement pension benefits or a cash alternative in line with the Group’s pension policy as set out in the Remuneration Policy for Executive Directors. Annual bonus New Executive Directors will be eligible to participate in the annual bonus arrangements as set out in the Remuneration Policy for Executive Directors at the discretion of the Committee taking into account the time spent by the individual in the relevant Executive Director role (a maximum award of 450% of salary for the CEO and 350% of salary for other Executive Directors). LTIP New Executive Directors may be eligible to participate in the LTIP arrangements as set out in the Remuneration Policy for Executive Directors at the discretion of the Committee taking into account the time spent by the individual in the relevant Executive Director role (a maximum award of 350% of salary for the CEO and 250% of salary for other Executive Directors). Sign-on payments / recruitment rewards It is not the Committee’s policy to provide sign-on payments other than in exceptional circumstances. Where sign-on payments/recruitment rewards are paid in exceptional circumstances, they will be limited to 100% of base salary/fixed allocation. Buyout awards The Committee will also seek to structure any replacement awards such that overall, they are no more generous in terms of quantum or the vesting period than the awards due to be forfeited. In determining quantum and structure of these commitments, the Committee will seek to replicate the fair value and, as far as practicable, the timing and performance requirements of remuneration foregone and, where appropriate, the malus and clawback terms. The Committee may determine in its absolute discretion on whether such awards will be made in cash, shares or a combination of both subject to regulatory requirements. Relocation policies It is the Committee’s policy to avoid relocation payments or allowances other than in exceptional circumstances. Where relocation payments or allowances are paid it will be limited to 50% per annum of base salary/ fixed allocation, for a maximum of two years. ![Graphics]() 117 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT Element Approach Discretion Base salary, benefits and pension In the event of loss of office, there will be no compensation in respect of base salary, benefits or pension. Base salary, benefits or pension will continue to be paid during the notice period. The Committee has absolute discretion to determine that, if appropriate, a payment in lieu of notice may be made, if it is in the best interests of the Group. Annual bonus Where an Executive Director’s employment or membership is terminated after the end of a performance year but before the payment is made, the Executive Director may be eligible for a bonus/variable allocation for that performance year, subject to achievement of applicable performance conditions over the period. No bonus or variable allocation will be made in the event of termination for gross misconduct. Where an Executive Director’s employment or membership is terminated during a performance year, a pro-rata award/ allocation for the period worked in that performance year may be payable subject to achievement of applicable performance conditions over the period and provided the individual is a “good leaver”. If the Executive Director is a good leaver, any bonus under deferral will also vest in full at the end of the deferral period. The good leaver definition is the same as for the LTIP as set out below. The Committee has absolute discretion to determine: • whether a payment is due in the instance of termination after the end of a performance year but before payment, subject to performance achieved; and • that the reason for termination is classified in the same manner as those described in the “good leaver” definition set out below. LTIP The treatment of unvested LTIP awards is governed by the rules of the LTIP. On termination of employment or membership before the performance measurement date, all unvested/unreleased awards generally will lapse, unless termination of employment is by reason of: • death; • ill-health, injury or disability; • redundancy; • retirement (with the agreement of the Company); • the employing company and/or limited liability partnership in which the Executive Director is an employee and/or member ceases to be a member of the group; • transfer of the business or part of the business to which the participant’s employment or membership relates to a person who is not a member of the group; or • any reason, permitted by the Board in its absolute discretion in any particular case. If an Executive Director terminates employment and/ or membership by any of the reasons described above, that individual is classified as a “good leaver” and does not lose unvested share awards. At the discretion of the Committee and subject to regulatory requirements, unvested share awards will vest on the vesting date or the date of cessation. In determining the proportion of awards which vest, the Committee will take into account if the performance conditions have been achieved and time served in employment during the relevant performance period where appropriate. The Committee has absolute discretion to determine that the reason for termination is classified in the same manner as those described adjacent. Subject to regulatory restrictions, the Committee has the discretion to determine that the end of the performance period is the date of cessation, whether and to what extent the performance measures have been satisfied or waived, whether to pro-rate the number of vested shares to reflect the performance period completed and whether to accelerate the vesting date to the date on which the Committee makes its final determination of the number of shares which vest. It should be noted that it is the Committee’s policy to only apply its discretion in limited circumstances. ![Graphics]() 118 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS Change of control All unvested deferred awards and LTIP will vest on a change of control (regardless of underlying corporate performance or satisfaction of the shareholding requirement) subject to compliance with any regulatory requirements. All unvested awards under the deferred bonus will vest in full. The level of vesting of LTIP awards will be determined by the proportionate achievement of the performance conditions as at the date of change of control (and time elapsed since grant to change of control at the discretion of the Committee) and subject to compliance with any regulatory requirements. Discretion may be exercised in cases where the Committee believes that the outcome is not a fair and accurate reflection of performance achieved. The exercise of this discretion may result in a downward or upward adjustment in the amount determined based on proportionate achievement of the performance conditions. Any adjustments will be disclosed in the relevant annual report. Other contractual obligations There are no other contractual provisions. None. Legal claims The Committee retains the discretion to make payments (including but not limited to professional and outplacement fees) in connection with an Executive Director’s cessation of office or employment to facilitate smooth handovers; mitigate against legal claims; and/or procure reasonable assistance with investigations or claims. The Directors’ employment contracts or letters of appointment or limited liability partnership membership agreements/side letters are available for inspection at 2 Savoy Court, London WC2R 0EZ. EXECUTIVE DIRECTORS’ EXTERNAL APPOINTMENTS Board approval is required before any external appointment may be accepted by an Executive Director. If approved, the individual is permitted to retain any fees paid in respect of such office or services. At present, none of the Executive Directors hold an external appointment. SENIOR LEADERSHIP TEAM REMUNERATION The approach to Executive Director pay will be appropriately cascaded for other senior executives at Liontrust, ensuring that there is alignment within the senior leadership team. Remuneration policies for the wider senior leadership team will remain broadly unchanged with bonuses capped at between 200% and 300% of salary (with 30% deferred over three years into Liontrust funds) and LTIP awards capped at between 100% and 200% salary). COMPLIANCE WITH THE FCA’S MIFIDPRU REMUNERATION CODE The Committee regularly reviews its remuneration policies and practices to ensure compliance with the requirements of the FCA’s MIFIDPRU Remuneration Code as applicable to the Company. The Company’s remuneration policies and practices are designed to be consistent with the prudent management of risk, and the sustained long-term performance of the Company. The CFO, who is responsible for Risk at Board level, is involved in reviewing the remuneration policies and practices to ensure that they are aligned with sound risk management, and keeps the Committee informed of the Group’s risk profile so that this can be taken into account in remuneration decisions. NON-EXECUTIVE DIRECTORS’ FEES The following Remuneration Policy summarises the remuneration payable to Non-Executive Directors. ![Graphics]() 119 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT DILUTION AND THE EMPLOYEE BENEFIT TRUST Dilution from employee share awards and member incentivisation under the new DRP will be to ensure that dilution will be no more than 10% in any rolling ten-year period. The Committee intends to utilise the Company’s existing discretionary employee benefit trust (the “Employee Trust”) to reduce and manage dilution. The Employee Trust will have full discretion about the application of the trust fund (subject to recommendations from the Committee). The Company will be able to fund the Employee Trust to acquire shares in the market and/or to subscribe for shares at nominal value in order to satisfy option awards or other awards granted under the LTIP (for the Executive Directors and other employees and members), SAYE and CSOP. Any shares issued to the Employee Trust in order to satisfy awards will be treated as counting towards the dilution limit. For the avoidance of doubt, any shares acquired by the Employee Trust in the market will not count towards these limits. Share awards under the SIP are satisfied by market purchased shares, so have no dilutive effect. Miriam Greenwood OBE DL Chair of the Remuneration Committee (from 1 April 2024) 25 June 2024 Objective and link to strategy Operation Maximum opportunity Performance measures Base salary, benefits and pension Non-Executive Director fees (including the Non-Executive Chairman) are reviewed annually with changes effective from April. The annual fees comprise the following elements: Base Fee and Additional fees, which may also apply in respect of Senior Independent Director status, committee chairmanship and committee membership. The policy is to position Non- Executive Director fees at, generally, around what the Executive Directors and Chair of the Board believe is median in the market for a company of similar size and complexity. This may also include fees for membership/ chairmanship of subcommittees of the Board or other Group committees The Executive Directors and Chair of the Board are responsible for setting the remuneration of the Non- Executive Directors. The Chair of the Board’s fee is set by the Remuneration Committee. Non-Executive Directors do not participate in any variable remuneration elements. The Board (excluding the Non- Executive Directors) retains the discretion to pay the fees in shares rather than cash where appropriate. Any taxable or other expenses incurred in performing their role may be reimbursed along with any related tax cost on such reimbursement. The Board (excluding Non- Executive Directors) will normally review the amount of each component of fees periodically to assess whether, individually and in aggregate, they remain competitive and appropriate in light of changes in roles, responsibilities and/ or time commitment of the Non-executive Directors, and to ensure that individuals of the appropriate calibre are retained or appointed. Fee increases are determined noting the above and by reference to individual responsibilities, inflation and an appropriate comparator group. Not applicable. ![Graphics]() 120 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ANNUAL REPORT ON REMUNERATION This remuneration report details the remuneration outcomes for the financial year ended 31 March 2024 across Liontrust and specifically for the Executive and Non-executive Directors; and compares them to remuneration across the wider group, remuneration outcomes for the previous financial year; and proposals for Executive remuneration for the forthcoming financial year. The Directors’ remuneration for the year ended 31 March 2024 was managed in line with the Directors’ remuneration policy (“DRP”) which was approved by shareholders at the 2022 DRP General Meeting. Proposed remuneration for the year ended 31 March 2025 is in accordance with the DRP approved at the February 2022 general meeting. The report sets out: 1. Remuneration outcomes for the year to 31 March 2024 – including the context for the Directors’ remuneration and the performance metrics that the Committee considered when setting the Executive Director annual bonus outcome. 2. Allocation of variable remuneration – information on how the annual bonus pool awards were allocated across the Group. 3. Deferral of variable remuneration – Directors’ deferred remuneration rights under the LTIP and Deferred Bonus Plan (DBVAP). 4. Proposed remuneration for the financial year ending 31 March 2025. 5. Returns to shareholders and Executive remuneration – returns to shareholders over the past 10 years are compared with the total remuneration of the Chief Executive Officer over the same period. 6. Directors’ shareholdings – the share interests of Directors and their connected persons. 7. Other disclosures and historical information. 8. Directors’ remuneration policy. To aid the reader of this report the term “salary” is used as a collective term for employee salary and member fixed allocation; and “annual bonus” to refer to annual bonus for employees and variable allocation for members. ![Graphics]() 121 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT 1. REMUNERATION OUTCOME FOR THE YEAR TO 31 MARCH 2024 1.1 Single total figure for remuneration Executive Directors (audited information) John Ions Year to 31 March Vinay Abrol Year to 31 March 2024 £’000 2023 £’000 2024 £’000 2023 £’000 A. Fixed pay Base salary 584 550 445 420 Benefits in kind -private medical insurance 5 4 5 5 Cash in lieu of pension 69 55 53 42 Total Fixed pay 658 609 503 467 B. Annual Bonus Cash bonus 263 310 156 184 DBVAP 263 310 156 184 Total Annual Bonus 526 620 312 368 C. Total pay for the financial year Sub-total (A+B) 1,184 1,229 815 835 D. Vesting of LTIP awards Base value element of vested LTIP awards 324 508 214 334 Share price appreciation and dividend equivalent elements on vested LTIP awards (145) 192 (96) 127 Total LTIP awards vesting 179 700 118 461 E. Other SIP matching shares 4 4 4 4 Total Other 4 4 4 4 Total remuneration (C+D+E) 1,367 1,933 937 1,300 Of which: Total variable remuneration (B + D) 705 1,320 430 829 ![Graphics]() 122 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 1.1 Single total figure for remuneration (continued) Non-executive Directors (audited information) Alastair Barbour Year to 31 March Mandy Donald Year to 31 March George Yeandle Year to 31 March 2024 £’000 2023 £’000 2024 £’000 2023 £’000 2024 £’000 2023 £’000 Basic Non-executive Director fee – – 65 65 65 65 Fee for Non-executive Chair 210 210 – – – – Fee for Senior Independent Director – – – – – – Fee for Sub-committee Chair / membership: Audit & Risk Committee – – 20 20 9 – Nomination Committee – – 5 5 5 5 Remuneration Committee – – 9 2 20 20 Fee for membership of other Group Committees – – 22 17 9 9 Benefits 1 4 – – – – – Total 214 210 121 109 108 99 Rebecca Shelley Year to 31 March Miriam Greenwood 2 Year to 31 March 2024 £’000 2023 £’000 2024 £’000 Basic Non-executive Director fee 65 65 25 Fee for Non-executive Chair – – – Fee for Senior Independent Director 12 12 – Fee for Sub-committee Chair / membership: Audit & Risk Committee 9 9 3 Nomination Committee 5 5 2 Remuneration Committee 9 9 3 Fee for membership of other Group Committees 5 – – Benefits 1 – – – Total 105 100 33 1 Non-executive Directors are entitled to the reimbursement of expenses in relation to the performance of their duties, such expenses are reported above grossed up for income tax and national insurance. 2 Appointed 16 November 2023. ![Graphics]() 123 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() Performance Metric Weighting Threshold Target Max Actual Weighted Result % Notes Financial Measures (70%) Change in Adjusted Profit Before Tax 50.0% 90.0% 100.0% 110.0% 80% 0.0% Due to a challenging year for active asset managers and net outflows in financial year the financial outcome is 80% compared to a target of £82.6 million so scores 0%. Distribution effectiveness - Net flows compared to budget of £500 million 10.0% 90% 100% 110% (1217%) 0.0% Net outflows for the financial year versus a budget for net inflows, so outcome is well below target of net inflows of £500 million so scores 0%. Investment performance, percentage of AuMA over 1, 3 and 5 years in 1st or 2nd Quartile). Weighted 30% for 1Y, 40% for 3Y and 30% for 5Y performance. 10.0% 67.5% 75% 82.5% 61% 0.0% It continued to be a very difficult year for Quality Growth and UK Small and Mid-Cap equities. However, performance over the near term is improving, but blended investment performance is at 61%, so scores 0%. ESG inc Risk, Personal Performance Measures (30%) Attraction and retention of talent, which includes the following factors: Articulation of Employee Value Proposition – the tangible and intangible benefits of working at Liontrust. Investment in training and development opportunities for all staff and bringing to life the Liontrust Leadership Charter 10.0% N/a N/a N/a See comments 7.0% During FY24 John and Vinay achieved the measures of success as set out under Attraction and Retention of talent. They worked to define the employee value proposition in a single document – Life At Liontrust. Delivered training for all staff including around self help career planning and inclusion. Reorganised the senior leadership team supporting clearer succession planning. Evidence of success through the engagement survey results which were positive in December 2023 with scores exceeding or remaining in line those from FY23. Continued financial investment in development of all staff in difficult trading conditions. DE&I – which includes the following factors: Establish of a group wide DE&I strategy, establish baseline DE&I metrics for the Group, continuing to offer DE&I specific training, and ensuring there is a DE&I component in hiring practices 10.0% N/a N/a N/a See comments 8.0% John Ions and Vinay Abrol developed and enhanced DE&I during FY24, including the formulation of a DE&I strategy and established DEI metrics for the purpose of identifying the areas of future success exposure or weakness. Vinay Abrol, our CFO, chairs the DE&I Committee with a 100% attendance record during the financial year. John Ions and Vinay Abrol sponsored and actively supported training for all staff on inclusivity, DE&I and on inclusive leadership. The staff engagement survey in December 2023 was very well supported with a participation rate of 82% which is the same as last year and 3% higher than the year before, with the DE&I questions in the survey scoring a very positive 80%. ESG Integration, which includes the following factors: Reporting on ESG integration for the Group’s investment teams, evidencing what we do across the Group in terms of RC (reporting and making sure the activity is in place in the areas investors expect us to be active) 10.0% N/a N/a N/a See comments 7.0% John Ions and Vinay Abrol drove ESG integration and reporting in FY24. They sponsored the Group’s stewardship code response and Responsible Capitalism report which supported Liontrust retaining its signatory status with the FRC. Ensured that the Group should evidence that it does what it says. Working with the Responsible Capitalism team to ensure the investment teams providing examples of engagements with companies, rationales for proxy voting, and showing where these factors impact the investment decision. Established a baseline for future measurement about where Liontrust stands in terms of its own business in areas such as biodiversity, financial inclusion, financial education. Totals 100.0% 22.0% 1.2 Annual bonus The annual bonus for the financial year ended 31 March 2024 were based on the following key performance metrics. The performance outcomes for each key performance indicator are also shown below: 124 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() Performance Metric Weighting Threshold Target Max Actual Weighted Result % Notes Financial Measures (70%) Change in Adjusted Profit Before Tax 50.0% 90.0% 100.0% 110.0% 80% 0.0% Due to a challenging year for active asset managers and net outflows in financial year the financial outcome is 80% compared to a target of £82.6 million so scores 0%. Distribution effectiveness - Net flows compared to budget of £500 million 10.0% 90% 100% 110% (1217%) 0.0% Net outflows for the financial year versus a budget for net inflows, so outcome is well below target of net inflows of £500 million so scores 0%. Investment performance, percentage of AuMA over 1, 3 and 5 years in 1st or 2nd Quartile). Weighted 30% for 1Y, 40% for 3Y and 30% for 5Y performance. 10.0% 67.5% 75% 82.5% 61% 0.0% It continued to be a very difficult year for Quality Growth and UK Small and Mid-Cap equities. However, performance over the near term is improving, but blended investment performance is at 61%, so scores 0%. ESG inc Risk, Personal Performance Measures (30%) Attraction and retention of talent, which includes the following factors: Articulation of Employee Value Proposition – the tangible and intangible benefits of working at Liontrust. Investment in training and development opportunities for all staff and bringing to life the Liontrust Leadership Charter 10.0% N/a N/a N/a See comments 7.0% During FY24 John and Vinay achieved the measures of success as set out under Attraction and Retention of talent. They worked to define the employee value proposition in a single document – Life At Liontrust. Delivered training for all staff including around self help career planning and inclusion. Reorganised the senior leadership team supporting clearer succession planning. Evidence of success through the engagement survey results which were positive in December 2023 with scores exceeding or remaining in line those from FY23. Continued financial investment in development of all staff in difficult trading conditions. DE&I – which includes the following factors: Establish of a group wide DE&I strategy, establish baseline DE&I metrics for the Group, continuing to offer DE&I specific training, and ensuring there is a DE&I component in hiring practices 10.0% N/a N/a N/a See comments 8.0% John Ions and Vinay Abrol developed and enhanced DE&I during FY24, including the formulation of a DE&I strategy and established DEI metrics for the purpose of identifying the areas of future success exposure or weakness. Vinay Abrol, our CFO, chairs the DE&I Committee with a 100% attendance record during the financial year. John Ions and Vinay Abrol sponsored and actively supported training for all staff on inclusivity, DE&I and on inclusive leadership. The staff engagement survey in December 2023 was very well supported with a participation rate of 82% which is the same as last year and 3% higher than the year before, with the DE&I questions in the survey scoring a very positive 80%. ESG Integration, which includes the following factors: Reporting on ESG integration for the Group’s investment teams, evidencing what we do across the Group in terms of RC (reporting and making sure the activity is in place in the areas investors expect us to be active) 10.0% N/a N/a N/a See comments 7.0% John Ions and Vinay Abrol drove ESG integration and reporting in FY24. They sponsored the Group’s stewardship code response and Responsible Capitalism report which supported Liontrust retaining its signatory status with the FRC. Ensured that the Group should evidence that it does what it says. Working with the Responsible Capitalism team to ensure the investment teams providing examples of engagements with companies, rationales for proxy voting, and showing where these factors impact the investment decision. Established a baseline for future measurement about where Liontrust stands in terms of its own business in areas such as biodiversity, financial inclusion, financial education. Totals 100.0% 22.0% 125 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() 126 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS Executive Director Key performance in the financial year ended 31 March 2024 John Ions John Ions has led the senior leadership team in a highly effective manner in a very difficult environment for active asset managers. In particular, strong leadership of the distribution and marketing teams. The UK distribution team has been reorganised with the Single-Strategy sales team and the Multi-Asset team merged into one UK distribution team under Kristian Cook. International Distribution has also been restructured under Jeremy Roberts, new recruit who has joined from GAM as our new Head of Global Distribution (ex-UK). Sales engagement with clients has continued to be excellent with over 800 clients attending the World Market Review Roadshow (for Multi-Asset solutions) and over 800 clients attending the Sustainable Future Roadshow and Virtual Conference. Liontrust’s marketing team did an excellent job in promoting the brand, coming first for unprompted advertising recall among retail investors (source: L Research in Finance, Oct 2023). Alongside Vinay Abrol, has been hugely active in promoting DE&I this year. Alongside Vinay Abrol, led external shareholder relations, with excellent positive feedback from these meetings, and developing a strong relationship with our larger shareholders Investec and HSBC initiated analyst coverage during the year. Always ensured that risk and compliance were important factors when managing the Group, including meeting with the Chief Risk Officer and Internal Audit on a regular basis. Vinay Abrol Vinay Abrol has shown strong leadership of the Finance, Operations, Risk, Compliance, Technology & Data, Property & Facilities, Product Development, Human Resources and Trading functions. Delivered budget and cost controls in the financial year and led the Group through the annual and half-year reporting cycles. Vinay, alongside John Ions, led the reorganisation of the Senior Leadership Team, promoting Edward Catton to Chief Operating Officer, Martin Kearney to Chief Risk Officer and Sally Buckmaster to General Counsel. Vinay led the project to review and assess our research tooling across our business, which in turn led to a project to select a vendor provided solution. Having selected FactSet RMS as our preferred supplier, Vinay oversaw the project to implement FactSet RMS across our investment teams. Vinay is also leading our project to implement a new front office system tooling having selected BlackRock Aladdin, with FlexTrade as our execution management system, and an extended middle officer model with BNY Mellon and the implementation of a new enterprise data platform - BNYM Mellon’s Data Vault solution. Vinay Abrol has been instrumental in leading the Group’s relationships with the Financial Analysts, with regular meetings with the analysts from Singer Capital Markets, Panmure Gordon, Numis, Barclays and Berenberg. During the year Barclays initiated coverage bringing analyst coverage back to six firms, following KBW’s decision to cease coverage during the year. This bonus pool for the Executive Directors translates into individual annual bonuses to the Executive Directors of between 70% and 90% of base remuneration (2023: 88% and 113%). The Committee also set the level of deferral into Group managed funds at 50% for John Ions (2023: 50%) and 50% for Vinay Abrol (2023: 50%) over the period 25 June 2024 to 25 June 2027; and therefore linked to the performance of the relevant Liontrust funds. The vesting of deferred awards are not subject to any performance condition but are subject to continuous service conditions and also to malus and claw back provisions. The level of deferral means that the cash bonus/variable allocation for John Ions and Vinay Abrol is 35% and 45% of base remuneration respectively (2023: 56% and 44%). 1.3 Malus and claw back For the annual bonus in respect of the financial year ended 31 March 2016 and onwards, malus and claw back provisions apply whereby the payment of such cash bonus, and the unvested amount deferred into Group managed funds can be reduced, withheld or reclaimed in the exceptional event of: misstatement or misleading representation of performance, a significant failure in risk management and control, or serious misconduct for which the individual is personally responsible or directly accountable. Malus provisions apply for a period from the date of grant to the relevant vesting date of the relative award and claw back provisions apply for a period of 2 years from date of vesting of the relevant award. The Committee also considered that no further adjustments up or down should be made on account of the risk and personal performance moderator. ![Graphics]() 127 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT For the LTIP awards, claw back and malus provisions will apply whereby the LTIP awards can be reduced, withheld, or reclaimed in the exceptional event of: misstatement or misleading representation of performance, a significant failure in risk management and control, or serious misconduct for which the individual is personally responsible or directly accountable. 1.4 Pensions (audited information) All staff (including Executive Directors) are eligible to receive pension contributions of at least 12.5 % of base salary. None of the Executive Directors have a prospective entitlement to a defined benefit pension by reference to qualifying service. As stated in last year’s Remuneration Report, the Committee clarified its approach set out in the current DRP with regard to the provision of pensions to the Executive Directors. The shareholders approved the current DRP which is fully compliant with corporate governance best practice in that the Executive Directors may participate in pension arrangements, or receive cash in lieu, which are fully aligned with that of the wider Liontrust workforce. Employees of Liontrust have flexibility and choice, in certain circumstances, over the balance between employer pension contributions and cash in lieu, with options to take cash for some or all of the amount the Company would otherwise contribute to the pension plan. 2. ALLOCATION OF ANNUAL VARIABLE REMUNERATION Annual bonus for the Executive Directors as a percentage of the aggregate annual bonus pool for all staff (including fund managers) has decreased again this year, at 2.1% for the financial year ended 31 March 2024 (2023: 4.3%), with 1.3% allocated to John Ions and 0.8% to Vinay Abrol. 2.1 Percentage change in Directors’ remuneration The percentage change in all Directors’ pay (defined for these purposes as salary, fees for non-Executives, taxable benefits, annual bonus and DBVAP awards in respect of the relevant year) between the year ended 31 March 2024 and the prior year; and the same information, on an averaged basis, for all staff (excluding the Chief Executive Officer and Directors) is shown in the table below: Directors percentage change year ended 31 March 2024 Directors percentage change year ended 31 March 2023 All staff year ended 31 March 2024 1 All staff year ended 31 March 2023 Salary 2% 67% 2 6% 11% Benefits 3 12% 55% 39% 14% Bonus -15% -77% -7% -38% 1 Based on a consistent population of the workforce who received a full year’s remuneration in each year 2 Increase due to the implementation of the 2022 DRP and realignment of Non-executive Director fees in the period (see 4.1) 3 Benefits comprise private medical insurance, pension contributions and other sundry benefits. ![Graphics]() 128 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 2.2 Chief Executive Officer pay ratio The table below shows the ratio of Chief Executive’s pay to Lower quartile, median and upper quartile for employee member: Ratio for year ended 31 March 2024 Ratio for year ended 31 March 2023 Ratio for year ended 31 March 2022 Ratio for year ended 31 March 2021 Lower quartile ratio 15x 21x 69x 84x Median ratio 10x 13x 39x 45x Upper quartile ratio 5x 7x 16x 22x Based on full time equivalent staff The Group uses ‘Option A’ to calculate the Chief Executive Officer pay ratio. This method uses the individual pay and benefits of all UK staff, and is therefore consistent and comparable with the approach that must be used for the CEO single figure. It allows a like-for-like comparison to take place between the pay data of the CEO and members and employees at the lower, median and upper quartiles. For the purpose of this disclosure, the Company has chosen 31 March 2023 as the reference date on which the pay for all employees and members was calculated, consistent with our approach in prior years. Lower quartile £’000 Median £’000 Upper quartile £’000 CEO single figure – 1,367 – Workforce single figure 89 139 259 Workforce salary component 62 92 139 2.3 Relative importance of spend on pay The following chart shows the Group’s Adjusted Profit before tax (excluding and including performance fee profits), total workforce remuneration and dividends declared on Ordinary shares for the financial year ended 31 March 2024 and 31 March 2023. \*These are alternative performance measures (‘APM’). See Note 7 on page 166. 0 20,000 100,00080,00060,00040,000 Adjusted profit before tax – excl. performance fee profit (£’000)\* 2023 2024 Adjusted profit before tax (£’000)\* Total workforce renumeration (£’000) Dividend spend (£’000) ![Graphics]() 129 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT 2.4 Wider workforce remuneration and engagement The Committee is closely involved in considering the remuneration policies and levels of the wider Liontrust workforce. The Committee’s work involves debate, discussion and ultimate approval of the Group-wide annual bonus and long-term incentives; as well as the salary increases for all staff, with consideration given to the amounts and proportions of total remuneration allocated to different areas of the business. Part of this discussion requires an assessment of the financial performance of the business, including Adjusted Profit before tax, net flows and fund performance, all of which are also key metrics under the bonus scorecard for Executive Directors. One of the recurring exercises undertaken by the Committee on an annual basis is a review of external compensation benchmarking data, giving an overview of fixed and total remuneration levels for all staff relative to the wider market. This data allows the Committee to challenge remuneration decisions at a more granular level and make proposals to the Executive Directors in respect of an upcoming remuneration review round. The Committee approves all compensation for Code Staff , including for fund managers. Whilst this process is a regulatory driven requirement, it involves a detailed and robust discussion. The Committee is also provided with data illustrating the mean and median annual bonus levels; and salary increase percentages split by gender for the current, and previous financial year, in order that it can also analyse the outcomes from a gender pay perspective. Liontrust operates a Workforce Advisory Forum, whose Chair meets with the Committee Chair to discuss remuneration related matters. This engagement is Liontrust’s method for ensuring a formal dialogue exists between employees, members and the Committee. It provides the opportunity for employees and members to engage with the Committee via the Workforce Advisory Forum on any relevant employee and/or member remuneration matter. Collectively this work helps demonstrate the Committee’s considerations in appropriately balancing the remuneration outcomes for the wider work force with its decisions regarding Executive Director Remuneration. 3. DEFERRAL OF VARIABLE REMUNERATION The significant deferral of variable remuneration (deferral of bonus and LTIP awards) is an important component of the Company’s remuneration policy, and I am pleased to be able to confirm that John Ions and Vinay Abrol are deferring 84% and 87% of their variable remuneration respectively: Director Type of variable remuneration Value (£’000) % deferred John Ions Cash bonus 263 n/a DBVAP 263 15% LTIP award FY2024 1 1,152 69% Total 1,678 84% Vinay Abrol Cash bonus 156 n/a DBVAP 156 14% LTIP award FY2024 1 845 73% Total 1,157 87% 1 Awarded 22 June 2023 ![Graphics]() 130 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 3.1 Vested LTIP Awards Background The LTIP for the financial year ended 31 March 2021, over 61,719 and 40,671 Ordinary shares. 23,027 shares for John Ions and 15,174 shares for Vinay Abrol vested (37.3%), with the vested Ordinary shares released on 7 July 2023 then being subject to a two-year holding period. Performance measures and vesting Condition Test Result % vesting TSR Performance (40%) Absolute TSR performance (% growth per annum): Below 10% per annum then nil vests, at 10% per annum growth 10% vests and at 15% per annum and above 100% vests. Straight line vesting between 10% per annum and 15% per annum growth Start of the performance period: 7 July 2020, Starting share price: 1,356.3p, End of the performance period: 7 July 2023. Three-month average share price to end of performance period is 755.65p, meaning an annualised TSR over the period of -14% versus a Target of 15% so 0% vests 0% Relative TSR performance (% growth per annum): Below 10% per annum then nil vests, at 10% per annum growth 20% vests and at 15% per annum and above 100% vests. Straight line vesting between 10% per annum and 15% per annum growth Start of the performance period: 7 July 2020, with starting FTSE all share total return index value is 6,531.22 which is the 30-day average to the day before grant date and staring share price is 1,356.3p, End of the performance period: 7 July 2023. 30-day FTSE all share total return index value is 8,631.39 and three-month average share price is 755.65p both to end of performance period, meaning an annualised TSR over the period of -23.7% versus a Target of 15% so 0% vests 0% EPS Performance (30%) EPS growth per annum: Below 10% per annum then nil vests, at 10% per annum growth 10% vests and at 15% per annum and above 100% vests. Straight line vesting between 10% per annum and 15% per annum growth Starting EPS (Diluted Adjusted EPS excluding performance fees): 56.21p for the financial year ending 31 March 2020 Adjusted diluted EPS excluding performance fees for the financial year ended 31 March 2023 was 100.91p, which is an annualised return of 21.5% versus a Target of 15% so 100% vests. 30% Strategic Objectives Performance Net inflows compared to target (15%): Below 75% of target nil vests, at 75% of target 10% vests and at 125% of target and above 100% vests. Straight line vesting between 75% of target and 125% per annum growth. Starting year for net inflows: Year ending 31 March 2020. Ending year for net inflows: Year ending 31 March 2023. Target net inflows of £8,035 million, actual net inflows of £1,167 million, so 15% versus a Target of 125% so 0% vests. 0% Investment performance (7.5%): Below 50% of funds in 1st or 2nd quartile nil vests, at 50% of funds 10% vests and at 75% of funds and above 100% vests. Straight line vesting between 50% of funds and 75% of funds Starting year for investment performance: Year ending 31 March 2020. Ending year for investment performance: Year ending 31 March 2023 FY21, 51% of relevant AuMA in 1st or 2nd quartile; FY22, 20% of relevant AuMA in 1st or 2nd quartile; FY23 72% of relevant AUM in 1st or 2nd quartile. Average over the period is 48% versus a Target of 75% so 0% vests. 0% 1. Developing existing employees/ members and recruiting new talent (25% of 7.5%). 2. Providing the products and services that clients require (25% of 7.5%). 3. Broadening the client base in the UK and internationally (25% of 7.5%). 4. Maintaining an appropriate risk controls and compliance environment (25% of 7.5%). 1. Limit senior employee/member losses and strengthen the management team. 2. Broaden the product range. 3. Expand out multi-asset and international franchise. 4. Strong risk controls and create a positive compliance environment. 1. Over the period there have been very few employee/ member losses and some good hires (e.g. Head of Institutional Business, Head of Product Development, Head of Portfolio & Data Insights, Chief Technology Officer). 2. Acquired the Global Equity team as part of Neptune acquisition; Architas acquisition bolstered multi-asset range and AUMA to over £6bn. 3. Over the period Multi-Asset AuMA grew from £844m to £6,660m (inc-Architas), international AUMA increased from £1,649m to £2,412m with the Majedie acquisition (nearly 4x). Overall 90%. 4. Vinay Abrol and John Ions maintained appropriate risk controls, carefully considering management decisions in light of risk considerations, and spending time on a very regular basis with the Heads of Risk and Compliance, and with Internal Audit. 7.3% 37.3% ![Graphics]() 131 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT Retention requirements 37.3% of the LTIP awards vested, so for John Ions 23,027 Ordinary shares and for Vinay Abrol 15,174 Ordinary shares, were exercised and then subject to a two-year holding period. Year ended 31 March 2024 LTIP awards that vested Value on grant Gain result from share price appreciation and dividend equivalent payments on vested LTIP awards over the vesting period Value on vesting John Ions 23,027 £324,690 (£145,197) £179,493 Vinay Abrol 15,174 £213,964 (£95,695) £118,269 Year ended 31 March 2023 LTIP awards that vested Value on grant Gain result from share price appreciation and dividend equivalent payments on vested LTIP awards over the vesting period Value on vesting John Ions 66,605 £507,530 £192,888 £700,418 Vinay Abrol 43,891 £334,457 £127,121 £461,578 Option exercise details (audited information) For John Ions and Vinay Abrol, LTIP awards were exercised on 7 July 2023. The market value of: • John Ions share options on the date of exercise were £149,445 (23,027 share options at 649p per share); and • Vinay Abrol share options on the date of exercise were £98,479 (15,174 share options at 649p per share). The exercise price for the LTIP awards was nil pence. The exercised shares are subject to a two-year holding period from the date of vest. 3.2 LTIP Awards for the financial year ending 31 March 2024 (audited information) The Company’s shareholders approved the LTIP under which awards were granted on 12 August 2019 and the LTIP was adopted by the Board on 21 March 2016, and subsequently amended on 25 September 2018 and 19 June 2019. The rules of the LTIP state that awards may be granted to participants within the 42-day period following the date of publication of the annual results of the Company, approval of the LTIP by shareholders, or such other period as may be determined by the Committee in exceptional circumstances. LTIP awards for the financial year ending 31 March 2024 Percentage LTIP award of base remuneration LTIP awards granted Value on grant Date of grant Vesting date (subject to performance conditions being met) John Ions 197% 153,130 £1,152,303 22 June 2023 22 June 2026 Vinay Abrol 190% 112,295 £845,020 22 June 2023 22 June 2026 ![Graphics]() 132 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS On vesting 100% of the LTIP awards are subject to a two-year holding period, with the post vesting releases subject to continued employment. These LTIP awards are subject to continued employment and achievement of a range of balanced and holistic performance conditions that are linked closely to the Company’s business strategy/KPIs. The performance criteria for these LTIP awards are: • Diluted adjusted earnings (excluding performance fees) per share (60%) Starting EPS (Diluted Adjusted EPS excluding performance fees): 100.95p for the financial year ending 31 March 2023. End of the performance period is 31 March 2026. Performance will be assessed against the following targets: EPS Vesting (% of maximum) Entry level performance: 8.5% 10% Target performance: 11% 50% Stretch performance: 16.75% 100% There will be straight line vesting between targets. NIL vesting for performance below entry level. • Relative TSR growth versus FTSE250 ex-IT (40%) Performance will be assessed against the FTSE250 index. Performance will be assessed against the following targets: Relative TSR growth p.a. versus FTSE250 Vesting (% of maximum) Entry level performance: median performance 10% Stretch performance: upper quintile performance 100% There will be straight line vesting between targets. 4. PROPOSED REMUNERATION FOR THE FINANCIAL YEAR ENDING 31 MARCH 2025 Remuneration for the year ended 31 March 2025 has been set in accordance with the 2022 DRP approved by shareholders at the February GM in 2022. 4.1 Annual fixed remuneration Fixed remuneration under the current DRP for the Executive Directors is capable of rising in line with that of the wider workforce. In recognition of the broader, societal context for pay awards and taking into account the financial performance of the Group over the year, the Committee resolved not to increase base pay for the Executive Directors for the next year. Therefore, the Committee has set the salary of the Executive Directors at £583,600 for John Ions and £445,600 for the Vinay Abrol. The salary increases for employees and members (excluding fund managers and the Executive Directors) is 5.8% on average and is focused on our less senior colleagues. Any salary increases in future years will be no more than the average for the wider workforce for that year. The Board itself determines the fees of the Non-executive Directors of the Company, each of whom abstains in respect of matters relating to their own position. As part of the implementation of the latest DRP the Board increased the fees for the Non-Executive Directors to more closely align with the median fee structure of other FTSE 250 financial services companies. In accordance with the latest DRP, the base Non-executive Chairman fee increased to £210,000 and the base Non-executive Director fee were increased to £65,000 plus fees for other roles as noted below. The Non-executive Chairman’s aggregate fee is capped at £210,000 (increase from £200,000) and hence the Chairman waives any other fees for other roles and committees that would otherwise be payable. Other Non-executive Directors aggregate fees are capped at £150,000. Role Fee Senior independent director £12,000 Audit & Risk Committee chair / member £20,000 / £9,000 Nomination Committee chair / member £15,000 / £5,000 Remuneration Committee chair / member £20,000 / £9,000 Other committees £9,000 Sustainability committee chair/ member £12,000/£5,000 Engagement roles £5,000 to £7,500 Non-executive Directors will be encouraged to use a percentage of their annual fee to purchase and hold shares in Liontrust. ![Graphics]() 133 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT 4.2 Annual bonus Annual bonus for the financial year ending 31 March 2025 will be determined using the current DRP. In summary, this will comprise a balanced scorecard of financial and non-financial measures including ESG, with assigned weightings; and introduction of a minimum weighting of financial measures where financial measures will account for at least 70%. 50% will be deferred into shares with pro-rata vesting over three years (vesting 1/3 each year) unless the Executive’s shareholding is greater than 10 times base salary, in which case the Executive can elect to defer into funds. 4.3 LTIP awards LTIP awards for the financial year ending 31 March 2025 will be determined using the current DRP with 153,130 nil price options for the John Ions and 112,295 nil price options for Vinay Abrol. The performance period will be from 1 April 2024 to 31 March 2027 with performance conditions as noted below; and subject to a two year post-vest holding period: • Diluted adjusted earnings (excluding performance fees) per share (60%) Starting EPS (Diluted Adjusted EPS excluding performance fees): 74.82p for the financial year ending 31 March 2024. End of the performance period is the financial year ending 31 March 2027. Performance will be assessed against the following targets: EPS growth p.a. Vesting (% of maximum) Entry level performance: 8.5% 10% Target performance: 11% 50% Stretch performance: 16.75% 100% There will be straight line vesting between performance level thresholds. NIL vesting for performance below entry level. • Relative TSR growth versus FTSE250 ex-IT (40%) Performance will be assessed against the FTSE250 index. Performance will be assessed against the following targets: Relative TSR growth versus FTSE250 Vesting (% of maximum) Entry level performance: median performance 10% Stretch performance: upper quintile performance 100% There will be straight line vesting between entry level and stretch performance. NIL vesting for performance below entry level. 4.4 Cap on total remuneration The Business, Energy and Industrial Strategy Committee report on Executive Pay, released in March 2020, suggested an overall cap on total remuneration for executives in any year. Whilst not a requirement to include it currently, I can confirm that the Committee considered introducing a cap on total remuneration, and decided against currently doing so. However, the Committee intends to re-consider the appropriateness of implementing a total remuneration cap for a business of our size, and will update shareholders in due course on the results of its further consideration. ![Graphics]() 134 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 5. RETURNS TO SHAREHOLDERS AND EXECUTIVE REMUNERATION 5.1 Pay versus performance Share price performance The graph below illustrates the performance of the Group, based on share price returns, compared to FTSE All-Share and FTSE 250 indices, from 1 April 2014. These indices have been chosen to put the Group’s performance into the context of the overall UK stock market, and in the context of more similar sized operating companies. 1,200% 1,000% 800% 600% 400% 200% 0% 1-Apr-14 1-Apr-15 1-Apr-16 1-Apr-17 1-Apr-18 1-Apr-19 1-Apr-20 1-Apr-21 1-Apr-22 1-Apr-23 Liontrust Asset Management PLC FTSE All-Share Index FTSE 250 Table of historic levels of Chief Executive Officer remuneration The table below shows the percentage change in the Chief Executive’s remuneration package over the past ten years: Year ended 31 Mar Name Single figure of total remuneration (£’000) Long term incentive vesting rates (as % maximum opportunity) 2024 John Ions 1,367 37% 2023 John Ions 1,933 58% 2022 John Ions 6,014 99% 2021 John Ions 6,648 100% 2020 John Ions 4,555 100% 2019 John Ions 4,419 100% 2018 John Ions 2,191 Nil 2017 John Ions 1,751 Nil 2016 John Ions 1,572 Nil 2015 John Ions 1,544 Nil ![Graphics]() 135 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT 6. DIRECTORS’ SHAREHOLDINGS 6.1 Shareholding requirement (audited information) and Fund holding information A key component of the Company’s remuneration policy is a shareholding requirement of 4 times salary for Executive Directors. As at 31 March 2024 the Executive Directors and their closely associated persons held: Executive Directors Ordinary shares held Vested but unexercised options Value at 31 Mar 2024 (£’000) Multiple of salary John Ions 879,001 – 5,907 10x Vinay Abrol 988,253 – 6,641 15x The value of the vested but unexercised options is after income tax and national insurance using basic salaries as at 1 April 2024. 6.2 Directors’ Shareholdings (audited information) The interests of the Directors and their closely associated persons in the share capital of the Company at 31 March 2024 were as follows: Ordinary shares Unvested Ordinary shares Total Ordinary shares Options subject to perf. conditions Total options over Ordinary shares Executive Directors John Ions 877,321 1,680 879,001 359,649 359,649 Vinay Abrol 986,573 1,680 988,253 259,772 259,772 Non-executive Directors Alastair Barbour 34,175 – 34,175 – – Mandy Donald 1,579 – 1,579 – – Rebecca Shelley 1,544 – 1,544 – – George Yeandle 20,000 – 20,000 – – There were the following changes to the Directors’ interests between 1 April 2024 and 25 June 2024: John Ions and Vinay Abrol purchased 777 shares on 8 April 2024 pursuant to their participation in the Liontrust SIP. There were no other charges. SIP Shares (audited information) Awards held start of year Awards held at the end of the year Director Tax year Number of shares as at 1 Apr 2023 Face value Grant/Vesting date Number of shares granted/ (vested) Number of shares as at 31 Mar 2024 Earliest vesting date John Ions 2020/21 336 £3,600 27-Apr-20 (336) – 27-Apr-23 2021/22 345 £3,600 345 4-May-24 2022/23 468 £3,600 468 27-Apr-25 2023/24 – £3,600 3-Aug-23 867 867 3-Aug-26 Vinay Abrol 2020/21 336 £3,600 27-Apr-20 (336) – 27-Apr-23 2021/22 345 £3,600 345 4-May-24 2022/23 468 £3,600 468 27-Apr-25 2023/24 – £3,600 3-Aug-23 867 867 3-Aug-26 The vesting of SIP shares awarded are subject to continuous performance and claw back conditions. Vested shares may remain in the SIP after vesting ![Graphics]() 136 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 6.3 Post-employment shareholding requirements The Executive Directors are required to maintain their shareholding in the Company at a level equal to the lower of the shareholding requirement immediately prior to departure or the actual shareholding on departure for at least two years. 7. OTHER DISCLOSURES AND HISTORICAL INFORMATION 7.1 Remuneration Committee composition and attendance During the year, the Committee comprised entirely independent Non-executive Directors: • George Yeandle (Chair) (Stepped down as Chair of Committee on 1 April 2024) • Mandy Donald • Alastair Barbour • Rebecca Shelley • Miriam Greenwood OBE DL (joined on 16 November 2023 and appointed Chair of the Committee on 1 April 2024) The attendance record of members of the Committee during the year is shown in the table on page 80. Activities during the year In the financial year to 31 March 2024, the Committee met seven times and discussed, amongst other things, the subjects described below: • approval of the 2023 Remuneration Report; • review and approval of the bonuses for the Executive Directors for the financial year ended 31 March 2023; • review and approval of the bonuses for the employees and members (excluding the Executive Directors) for the financial year ended 31 March 2023; • approval of salary changes for the senior members of the fund management teams; • approval of allocations under the Liontrust Company Share Option Plan (“CSOP”) in August 2023; • approval granting of DBVAP awards for the financial year ended 31 March 2023; • review and approval of the Bonus Methodology, deferral methodology and Metrics for the financial year ending 31 March 2024; • approval of LTIP allocation for the financial year ending 31 March 2024 for the Executive Directors and key executives; • reviewing regular reports from HR and Compliance; • approval of the vesting of the 2021 LTIPs granted in June 2020; • review of proxy voting agency and shareholder comments on the Remuneration report for 2023; • review of DRP, consideration potential options for new DRP noting the feedback received on the current DRP and review of shareholder engagement materials; • engagement with shareholders and proxy advisors on the new DRP; • review of bonus/remuneration capping and bonus performance metrics for the year ended 31 March 2024; • review of the bonus methodology, related Executive Director remuneration and market practices on Executive Director remuneration; and • approval of Director, employee and member appraisal process for the financial year ended 31 March 2024. ![Graphics]() 137 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT 7.2 Service Contracts The Director service contracts (Director appointment letter and limited liability partnership (“LLP”) Deed of Adherence) are as follows: Director Type of contract Date of contract Notice period Executive Directors John Ions Director Letter of appointment 23 January 2014 6 months LLP membership deed of adherence 08 July 2010 6 months Vinay Abrol Director Letter of appointment 23 January 2014 12 months LLP membership deed of adherence 08 July 2010 12 months Non-executive Directors Alastair Barbour 1 Director Letter of appointment 19 November 2019 3 months Mandy Donald Director Letter of appointment 18 July 2019 3 months Miriam Greenwood Director Letter of appointment 15 November 2023 3 months Rebecca Shelley Director Letter of appointment 12 October 2021 3 months George Yeandle Director Letter of appointment 16 December 2014 3 months 1 Alastair joined the Board in April 2011 and was appointed Non-executive Chair in September 2019. 7.3 Compensation for loss of office (audited information) No payments for loss of office were made during the financial year ended 31 March 2024 (2023: Nil). 7.4 Payments to former Directors (audited information) There have been no payments to former Directors and no payment for loss of office. 7.5 Dilution and employee benefit trust Our policy regarding dilution from employee share awards and member incentivisation has been, and will continue to be, to ensure that dilution will be no more than 10% in any rolling ten-year period. The Committee intends to utilise the Company’s existing discretionary employee benefit trust (the EBT) to reduce and manage dilution. The EBT will have full discretion about the application of the trust fund (subject to recommendations from the Committee). The Company will be able to fund the EBT to acquire shares in the market and/or to subscribe for shares at nominal value in order to satisfy option awards granted under the LTIP and Liontrust CSOP. Any shares issued to the Employee Trust in order to satisfy awards will be treated as counting towards the dilution limit. For the avoidance of doubt, any shares acquired by the Employee Trust in the market will not count towards these limits. Share awards under the SIP and CSOP are satisfied by market purchased shares, so have no dilutive effect. ![Graphics]() 138 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 7.6 Shareholder voting outcomes for 2023 Directors’ Remuneration Report The table below shows the advisory vote on the 2023 Directors’ Remuneration Report at the Annual General Meeting held on 22 September 2023: Votes for % Votes against % Votes withheld 2023 Annual report on remuneration 26,969,791 80.20% 6,657,628 19.80% 1,016,350 7.7 Shareholder voting outcomes for 2022 Directors’ Remuneration Policy The table below shows the advisory vote on the 2022 Directors’ Remuneration Policy (DRP) at the Annual General Meeting held on 16 February 2022: Votes for % Votes against % Votes withheld Directors’ remuneration policy 24,896,831 54.06 21,155,267 45.94 520,989 The DRP, as approved by shareholders at our February 2022 General Meeting, remains appropriate and no changes are proposed this year. 7.8 Advisers The Committee invites individuals to attend meetings as it deems beneficial to assist it in reviewing matters for consideration. During the year, these individuals included the Chair of the Company, the Chief Executive Officer, the Chief Financial Officer and the Group Company Secretary. In the performance of its duties, the Committee can seek assistance from external advisers. At the March 2024 meeting of the Committee the approved the appointment of PricewaterhouseCoopers LLP to support the Committee on the new DRP. 7.9 Compliance with the FCA Remuneration Code and the UK Corporate Governance Code During the reporting period, Liontrust was subject to the FCA’s MIFIDPRU,, UCITs and AIFM remuneration codes and the Committee ensured these were appropriately reflected in the Remuneration Policy and adhered to on an ongoing basis. ![Graphics]() 139 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT 7.10 Historical Information LTIP Awards (audited information) Directors Financial year ended 31-Mar Face value Share price used to determine the award Number of options held at 1 Apr 2023 Options forfeit Options granted or exercised Number of options held at 31 March 2024 Exercise Price Date of grant End of performance period John Ions 2019 (in respect of 2019/20/21) £870,250 589.6p 29,279 (29,279) – Nil 26-Jun-18 26-Jun-21 2021 (in respect of 2021/22/23) £870,250 1410.0p 61,719 (38,692) (23,027) – Nil 8-Jul-20 8-Jul-23 2022 (in respect of 2022/23/24) £870,250 1630.0p 53,389 – 53,389 Nil 23-Jun-21 23-Jun-24 2023 (in respect of 2023/24/25) £1,439,000 940.0p 153,130 153,130 153,130 Nil 23-Jun-22 23-Jun-25 2024 (in respect of 2024/25/26) £1,152,303 752.5p – 153,130 153,130 Nil 22-Jun-23 22-Jun-26 Vinay Abrol 2019 (in respect of 2019/20/21) £573,475 589.6p 19,294 (19,294) – Nil 26-Jun-18 26-Jun-21 2021 (in respect of 2021/21/23) £573,475 1410.0p 40,671 (25,497) (15,174) – Nil 8-Jul-20 8-Jul-23 2022 (in respect of 2022/23/24) £573,475 1630.0p 35,182 – 35,182 Nil 23-Jun-21 23-Jun-24 2023 (in respect of 2023/24/25) £1,056,000 940.0p 112,295 – 112,295 Nil 23-Jun-22 23-Jun-25 2024 (in respect of 2024/25/26) £845,020 752.5p – 112,295 112,295 Nil 22-Jun-23 22-Jun-26 The share price used to determine the award is the 30 day average closing share price prior to the Committee meeting that approved the granting of the awards. Claw back and malus provisions apply, see DRP elements of reward table for further details. ![Graphics]() 140 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS LTIP Performance Conditions Financial year ended 31 March 2022 (in respect of 2022/23/24) granted 23 June 2021: Absolute Shareholder Return target (20%) Performance condition: TSR performance (% growth per annum): Below 10% per annum then nil vests, at 10% per annum growth 10% vests and at 15% per annum and above 100% vests. Straight line vesting between 10% per annum and 15% per annum growth. Required outcome: Start of the performance period: on 23 June 2021, with the starting share price being 1559.53p, which is the 30-day average to the day before the date of grant. The end of the performance period: 23 June 2024. Relative Shareholder Return target (20%) Performance condition: Relative performance vs the FTSE All- Share Index Total Return (% growth per annum in excess of the index return): Below 10% per annum then nil vests, at 10% per annum growth 10% vests and at 15% per annum and above 100% vests. Straight line vesting between 10% per annum and 15% per annum growth. Required outcome: Using the same starting price as above, performance will be assessed against FTSE All Share Total Return Index (starting index value 7,862.94 which is the 30- day average to the day before the date of grant). The end of the performance period: 23 June 2024. EPS target (30%) Performance condition: EPS growth per annum: Below 10% per annum then nil vests, at 10% per annum growth 10% vests and at 15% per annum and above 100% vests. Straight line vesting between 10% per annum and 15% per annum growth. Required outcome: Starting EPS (Diluted Adjusted EPS excluding performance fees): 79.67p for the financial year ending 31 March 2021. End of the performance period is 31 March 2024. Strategic targets (30%) Performance condition 1 (15%): Net inflows compared to target (25% of Strategic targets portion): Below 75% of target nil vests, at 75% of target 20% vests and at 125% of target and above 100% vests. Straight line vesting between 75% of target and 125% per annum growth. Required outcome: Starting year for net inflows: Year ending 31 March 2022. Ending year for net inflows: Year ending 31 March 2024. Actual target for net inflows are commercially sensitive and will disclosed after vesting in 2024 Performance condition 2 (7.5%): Investment performance (25% of Strategic targets portion): Below 50% of funds in 1st or 2nd quartile nil vests, at 50% of funds 10% vests and at 75% of funds and above 100% vests. Straight line vesting between 50% of funds and 75% of funds. Required outcome: Starting year for investment performance: Year ending 31 March 2022. Ending year for investment performance: Year ending 31 March 2024. Performance condition 3 (7.5%): Other strategic targets: Required outcome: Actual target for other strategic objectives are commercially sensitive and will disclosed after vesting in the 2025 Annual Report on Remuneration. However, include objectives in relation to personal performance, talent development, product, risk management, compliance and promoting a compliant culture; and improving gender diversity in the business. Financial year ended 31 March 2023 (in respect of 2023/24/25) granted 23 June 2022: Performance conditions as per section 4.3 (page 133) Details of the awards granted on 22 June 2023 for the financial year ended 31 March 2024 are on page 131. ![Graphics]() 141 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT DBVAP Share Options, Shares and Options over Group managed funds (audited information) Directors Financial year ended 31-Mar Basis of award % of annual bonus Face value Issue date Exercise dates John Ions 2021 (in respect of 2020) 80% £1,392,000 8 July 2020 8 July 2021/22/23 2022 (in respect of 2021) 69% £1,915,000 23 June 2021 23 June 2022/23/24 2023 (in respect of 2022) 69% £1,915,000 22 June 2022 22 June 2023/24/25 2024 (in respect of 2023) 50% £310,000 22 June 2023 22 June 2024/25/26 Vinay Abrol 2021 (in respect of 2020) 80% £786,000 8 July 2020 8 July 2021/22/23 2022 (in respect of 2021) 69% £1,085,000 23 June 2021 23 June 2022/23/24 2023 (in respect of 2022) 50% £786,000 22 June 2022 22 June 2023/24/25 2024 (in respect of 2022) 50% £184,000 22 June 2023 22 June 2024/25/26 The DBVAP awards nil price options over shares/units in a portfolio of Liontrust Group managed funds. The share/unit price used to determine the number of shares/units which shall be subject to the option grant is calculated using the unit price on the date of grant. The portfolio of funds each year is determined by the Remuneration Committee. A minimum of 50% of the annual bonus is deferred into the DBP scheme with higher levels of deferral at the discretion of the Remuneration Committee. No further performance conditions apply to DBP awards as in determining the original annual bonus, the Committee is satisfied that performance objectives have been met. One third of the awards are exercisable on the exercise dates noted. ![Graphics]() 142 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 8. DIRECTORS’ REMUNERATION POLICY APPLICABLE TO 31 MARCH 2025 This section of the Remuneration Report provides an overview of the key remuneration elements in place for Executive Directors. After the support received from shareholders at the February 2022 GM at which the revised Directors’ Remuneration Policy (the “DRP”) was approved, we have not made any changes to our DRP and as such remain bound by the DRP. We have not reproduced the full DRP in this report. The summary below presents our approved Elements of Reward table for Executive Directors’ and Non-executive Directors’ for reference. A copy of our full DRP as approved by shareholders can be found in the February 2022 Notice of General Meeting, available on our website: www.liontrust.co.uk in the Investor Relations/Governance/Governance Policies section. 8.1 Elements of Reward The following table summarises each of the elements of Liontrust’s total compensation package and the ongoing remuneration policy for the Executive Directors: Objective and Link to strategy Operation Maximum opportunity Performance measures and assessment Base salary To provide a satisfactory base salary within a total package comprising base salary and bonus. The level of base salary reflects the value of the individual, their role, skills and experience. It is also designed to attract and retain talent in the market in which the individual is employed and/or a member. Salaries are reviewed annually and become effective in April taking account of market levels, corporate performance, individual performance subject to the maximum increase set out on the right. Reference is made to the median level within the FTSE 250 and FTSE 250 FS. The Committee will ensure that the percentage of any annual increases in base salary will be no more than the average percentage increase for the wider workforce for that year. Not applicable. Annual bonus The annual bonus rewards good performance of the Group and individual Executive Directors and is based on a balanced scorecard of financial and non-financial measures which align with the performance and delivery of annual objectives. Deferral ensures a link to longer term performance and risk management and aligns the interests of Executive Directors with those of shareholders. Executive Directors are eligible to participate in the annual bonus at the discretion of the Remuneration Committee. The performance period for the annual bonus will be 1 April - 31 March each year. Performance measures and weightings are determined annually but will include a mix of financial and non- financial measures. Awards may be deferred into Liontrust shares and/or funds. Deferral will be in line with current regulatory landscape, with a minimum 50% deferral, vesting annually over three years (subject to a continuing employment and/or membership requirement). Deferral will automatically be made into Liontrust shares unless the shareholding is greater than 1,000% of base salary in which case, executives can elect to defer into funds. Where required by regulation, the element of the bonus deferred into shares and/or funds may be subject to a retention period after the awards vests. Dividend equivalents may be awarded on deferred shares in respect of dividends paid during the deferral period. Chief Executive Officer: Maximum award is 450% of base salary. CFO: Maximum award is 350% of base salary. Awards are subject to continued employment and a balanced scorecard of measures, with assigned weightings and targets set each year. A mix of financial and non-financial criteria will be used each year and may include financial, strategic, operational and ESG measures. Financial measures will account for at least 50% of the annual bonus. Payout at target performance will be set at 50% of maximum award while payout at entry level performance will be set at 10% of maximum award. Individual risk and compliance behaviour is also considered in detail for relevant roles and factored into the assessment of performance and the determination of the bonus awarded Discretion may be exercised in cases where the Committee believes that the bonus outcome is not a fair and accurate reflection of business performance. The exercise of this discretion may result in a downward or upward adjustment in the amount of the bonus payout resulting from the application of the performance measures. Any adjustments will be disclosed in the relevant annual report. The Committee also retains discretion in exceptional circumstances to change performance measures and targets part-through a financial year if there is a significant and material event which causes the Committee to believe the original measures are no longer appropriate. Any adjustments of or discretion applied by the Committee will be fully disclosed in the following year’s Remuneration Report. ![Graphics]() 143 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT Objective and Link to strategy Operation Maximum opportunity Performance measures and assessment Base salary To provide a satisfactory base salary within a total package comprising base salary and bonus. The level of base salary reflects the value of the individual, their role, skills and experience. It is also designed to attract and retain talent in the market in which the individual is employed and/or a member. Salaries are reviewed annually and become effective in April taking account of market levels, corporate performance, individual performance subject to the maximum increase set out on the right. Reference is made to the median level within the FTSE 250 and FTSE 250 FS. The Committee will ensure that the percentage of any annual increases in base salary will be no more than the average percentage increase for the wider workforce for that year. Not applicable. Annual bonus The annual bonus rewards good performance of the Group and individual Executive Directors and is based on a balanced scorecard of financial and non-financial measures which align with the performance and delivery of annual objectives. Deferral ensures a link to longer term performance and risk management and aligns the interests of Executive Directors with those of shareholders. Executive Directors are eligible to participate in the annual bonus at the discretion of the Remuneration Committee. The performance period for the annual bonus will be 1 April - 31 March each year. Performance measures and weightings are determined annually but will include a mix of financial and non- financial measures. Awards may be deferred into Liontrust shares and/or funds. Deferral will be in line with current regulatory landscape, with a minimum 50% deferral, vesting annually over three years (subject to a continuing employment and/or membership requirement). Deferral will automatically be made into Liontrust shares unless the shareholding is greater than 1,000% of base salary in which case, executives can elect to defer into funds. Where required by regulation, the element of the bonus deferred into shares and/or funds may be subject to a retention period after the awards vests. Dividend equivalents may be awarded on deferred shares in respect of dividends paid during the deferral period. Chief Executive Officer: Maximum award is 450% of base salary. CFO: Maximum award is 350% of base salary. Awards are subject to continued employment and a balanced scorecard of measures, with assigned weightings and targets set each year. A mix of financial and non-financial criteria will be used each year and may include financial, strategic, operational and ESG measures. Financial measures will account for at least 50% of the annual bonus. Payout at target performance will be set at 50% of maximum award while payout at entry level performance will be set at 10% of maximum award. Individual risk and compliance behaviour is also considered in detail for relevant roles and factored into the assessment of performance and the determination of the bonus awarded Discretion may be exercised in cases where the Committee believes that the bonus outcome is not a fair and accurate reflection of business performance. The exercise of this discretion may result in a downward or upward adjustment in the amount of the bonus payout resulting from the application of the performance measures. Any adjustments will be disclosed in the relevant annual report. The Committee also retains discretion in exceptional circumstances to change performance measures and targets part-through a financial year if there is a significant and material event which causes the Committee to believe the original measures are no longer appropriate. Any adjustments of or discretion applied by the Committee will be fully disclosed in the following year’s Remuneration Report. ![Graphics]() 144 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS Objective and Link to strategy Operation Maximum opportunity Performance measures and assessment Long Term Incentive Plan (“LTIP”) The annual bonus rewards good performance of the Group and individual Executive Directors and is based on a balanced scorecard of financial and non-financial measures which align with the performance and delivery of annual objectives. Deferral ensures a link to longer term performance and risk management and aligns the interests of Executive Directors with those of shareholders. LTIP awards are granted annually as an option over a fixed number of shares with vesting dependent on the achievement of stretching performance conditions. Performance is measured over a 3-year period. Shares received on or after vesting are subject to a 2-year holding period commencing on the date of vesting. The operation of the LTIP is reviewed annually to ensure that grant levels, performance measures and other features remain appropriate to the Company’s current circumstances. Dividend equivalents may be awarded on vested shares in respect of dividends paid during the vesting and holding period. The maximum number of shares subject to the three annual LTIP awards which may be granted under this Policy is: For the Chief Executive Officer, annual awards of shares equal to 0.25% (a total of 0.75%) of the issued share capital on the date of the adoption of the LTIP. CFO, annual awards of shares equal to 0.18% (a total of 0.55%) of the issued share capital on the date of the adoption of the LTIP. The vesting of awards is subject to continued employment and achievement of performance conditions linked closely to financial performance and shareholder return as set out below. The current performance measures are: i) relative total shareholder return vs. FTSE 250 (Excluding Investment Trusts) (“TSR”) with a 40% weighting; and ii) adjusted earnings per share excluding performance fees (“EPS”) with a 60% weighting. Entry level performance payout at 10% of maximum (for relative TSR this will be median). Target payout of 50% of stretch performance applies to EPS measure (for relative TSR will be straight line vesting between entry level and stretch performance, where stretch performance equates to upper quintile performance). In line with the UK Corporate Governance Code the Committee has the discretion to adjust formulaic outcomes on the LTIP to reflect overall corporate performance. Any adjustments of or discretion applied by the Committee will be fully disclosed in the following year’s Remuneration Report. Shareholding requirement The shareholding requirement aligns the interests of Executive Directors with those of shareholders. The post-employment shareholding requirement further aligns the interests of Executive Directors with those of shareholders and encourages the Executive Directors to focus on sustainable long-term performance. The employee shareholding requirement is 500% of base salary for all Executive Directors. In addition to personally owned shares, any unvested shares which are not subject to performance conditions (such as shares deferred under the annual bonus) and vested shares subject to a holding period will count towards the shareholding requirement, net of tax. In the case of incoming Executive Directors the shareholding requirement must be met within five years of an Executive Director’s appointment. The post-employment shareholding requirement is to continue to hold for a period of two years after cessation the lower of the i) shareholding requirement immediately prior to cessation or ii) actual shareholding on cessation. Not applicable. Not applicable. Share Incentive Plan (“SIP”) The SIP allows the Executive Directors to purchase Company shares with a matching element, to build up an interest in Company shares and increase alignment of interests with shareholders. An all-employee HMRC approved share plan that allows the Executive Directors to purchase shares, in a tax efficient manner and subject to limits, which are matched by the Company. In line with the normal operation of a SIP envisaged by HMRC, there are no performance conditions on matching shares. Up to a maximum of £1,800 to purchase Partnership Shares which are matched by the Company on a 2 for 1 basis. Not applicable. Benefits To provide benefits which are appropriately competitive. Executive Directors are entitled to a range of benefits including: • Private Medical Insurance • Life Insurance; • Disability Assurance; • Travel Insurance; and • access to a Workforce Assistance Programme Where relocation payments or allowances are paid it will be limited to 50% of salary. The maximum opportunity for other benefits is defined by the nature of the benefit itself and the cost of providing it. As the cost of providing such insurance benefits varies according to premium rates and the cost of other benefits is dependent on market rates and other factors, there is no formal maximum monetary value. Not applicable. Pension To provide competitive levels of retirement benefit aligned with the wider workforce. Executive Directors’ pension contributions are made at 12.5% of base salary into the Liontrust Group Pension Plan. Executive Directors have the choice of taking an equivalent cash payment in lieu of pension contributions. The maximum percentage that the Executive Directors can receive as a pension contribution or cash equivalent payment is 12.5% of base salary. Not applicable. ![Graphics]() 145 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT Objective and Link to strategy Operation Maximum opportunity Performance measures and assessment Long Term Incentive Plan (“LTIP”) The annual bonus rewards good performance of the Group and individual Executive Directors and is based on a balanced scorecard of financial and non-financial measures which align with the performance and delivery of annual objectives. Deferral ensures a link to longer term performance and risk management and aligns the interests of Executive Directors with those of shareholders. LTIP awards are granted annually as an option over a fixed number of shares with vesting dependent on the achievement of stretching performance conditions. Performance is measured over a 3-year period. Shares received on or after vesting are subject to a 2-year holding period commencing on the date of vesting. The operation of the LTIP is reviewed annually to ensure that grant levels, performance measures and other features remain appropriate to the Company’s current circumstances. Dividend equivalents may be awarded on vested shares in respect of dividends paid during the vesting and holding period. The maximum number of shares subject to the three annual LTIP awards which may be granted under this Policy is: For the Chief Executive Officer, annual awards of shares equal to 0.25% (a total of 0.75%) of the issued share capital on the date of the adoption of the LTIP. CFO, annual awards of shares equal to 0.18% (a total of 0.55%) of the issued share capital on the date of the adoption of the LTIP. The vesting of awards is subject to continued employment and achievement of performance conditions linked closely to financial performance and shareholder return as set out below. The current performance measures are: i) relative total shareholder return vs. FTSE 250 (Excluding Investment Trusts) (“TSR”) with a 40% weighting; and ii) adjusted earnings per share excluding performance fees (“EPS”) with a 60% weighting. Entry level performance payout at 10% of maximum (for relative TSR this will be median). Target payout of 50% of stretch performance applies to EPS measure (for relative TSR will be straight line vesting between entry level and stretch performance, where stretch performance equates to upper quintile performance). In line with the UK Corporate Governance Code the Committee has the discretion to adjust formulaic outcomes on the LTIP to reflect overall corporate performance. Any adjustments of or discretion applied by the Committee will be fully disclosed in the following year’s Remuneration Report. Shareholding requirement The shareholding requirement aligns the interests of Executive Directors with those of shareholders. The post-employment shareholding requirement further aligns the interests of Executive Directors with those of shareholders and encourages the Executive Directors to focus on sustainable long-term performance. The employee shareholding requirement is 500% of base salary for all Executive Directors. In addition to personally owned shares, any unvested shares which are not subject to performance conditions (such as shares deferred under the annual bonus) and vested shares subject to a holding period will count towards the shareholding requirement, net of tax. In the case of incoming Executive Directors the shareholding requirement must be met within five years of an Executive Director’s appointment. The post-employment shareholding requirement is to continue to hold for a period of two years after cessation the lower of the i) shareholding requirement immediately prior to cessation or ii) actual shareholding on cessation. Not applicable. Not applicable. Share Incentive Plan (“SIP”) The SIP allows the Executive Directors to purchase Company shares with a matching element, to build up an interest in Company shares and increase alignment of interests with shareholders. An all-employee HMRC approved share plan that allows the Executive Directors to purchase shares, in a tax efficient manner and subject to limits, which are matched by the Company. In line with the normal operation of a SIP envisaged by HMRC, there are no performance conditions on matching shares. Up to a maximum of £1,800 to purchase Partnership Shares which are matched by the Company on a 2 for 1 basis. Not applicable. Benefits To provide benefits which are appropriately competitive. Executive Directors are entitled to a range of benefits including: • Private Medical Insurance • Life Insurance; • Disability Assurance; • Travel Insurance; and • access to a Workforce Assistance Programme Where relocation payments or allowances are paid it will be limited to 50% of salary. The maximum opportunity for other benefits is defined by the nature of the benefit itself and the cost of providing it. As the cost of providing such insurance benefits varies according to premium rates and the cost of other benefits is dependent on market rates and other factors, there is no formal maximum monetary value. Not applicable. Pension To provide competitive levels of retirement benefit aligned with the wider workforce. Executive Directors’ pension contributions are made at 12.5% of base salary into the Liontrust Group Pension Plan. Executive Directors have the choice of taking an equivalent cash payment in lieu of pension contributions. The maximum percentage that the Executive Directors can receive as a pension contribution or cash equivalent payment is 12.5% of base salary. Not applicable. ![Graphics]() 146 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 8.2 Non-executive Directors The following table summarises each of the elements of Liontrust’s total compensation package and the ongoing remuneration policy for the Non-executive Directors: Objective and Link to strategy Operation Maximum opportunity Performance measures and assessment Fees To provide a market competitive level of Non-executive Director fees which is sufficient to attract and retain individuals with appropriate knowledge and experience to review and support the implementation of the Group’s strategy. Non-executive Director fees (including the Non- executive Chair) are reviewed annually with changes effective from April. The annual fees comprise the following elements: Base Fee and Additional fees, which may also apply in respect of Senior Independent Director status, committee Chairship and committee membership. The policy is to position Non-executive Director fees at, generally, around what the Executive Directors and Chair of the Board believe is median in the market for a company of similar size and complexity from the FTSE 250 FS. This may also include fees for membership/ Chairship of subcommittees of the Board or other Group committees. The Executive Directors and Chair of the Board are responsible for setting the remuneration of the Non-executive Directors. The Chair of the Board’s fee is set by the Committee. Non-executive Directors do not participate in any variable remuneration element. Non-executive Chair fees are capped at £210,000. Other Non-executive Director fees are capped at £150,000. Fee increases are determined by reference to individual responsibilities, inflation and an appropriate comparator group. Not applicable. George Yeandle Chair of the Remuneration Committee (to 31 March 2024) Miriam Greenwood OBE DL Chair of the Remuneration Committee (from 1 April 2024) 25 June 2024 ![Graphics]() # FINANCIAL # STATEMENTS Consolidated Statement of Comprehensive Income 148 Consolidated Balance Sheet 149 Consolidated Cash Flow Statement 150 Consolidated Statement of Changes in Equity 151 Notes to the Financial Statements 152 Liontrust Asset Management Plc Financial Statements 186 Liontrust Asset Management Plc Notes to the Financial Statements 189 Independent auditor’s report to the members of Liontrust Asset Management PLC 194 Shareholder Information 201 Glossary 202 ![Graphics]() #### CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME for the year ended 31 March 2024 Note Year ended 31-Mar-24 £’000 Year ended 31-Mar-23 £’000 Revenue 4 197,889 243,339 Cost of sales 4 (11,828) (13,569) Gross profit 186,061 229,770 Gain on write back of Majedie acquisition provision – 1,848 Realised profit on sale of financial assets 184 – Unrealised gain on financial assets 838 618 Administration expenses 5 (188,932) (183,210) Operating (loss) / profit 6 (1,849) 49,026 Interest receivable 8 1,337 358 Interest payable 16 (67) (83) (Loss) / profit before tax (579) 49,301 Taxation 10 (2,911) (9,973) (Loss) / profit for the year (3,490) 39,328 Other comprehensive income: Total comprehensive income (3,490) 39,328 Pence Pence Earnings per share Basic earnings per share 12 (5.46) 61.45 Diluted earnings per share 12 (5.46) 61.21 The notes on pages 152 to 185 form an integral part of these consolidated financial statements. 148 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() #### CONSOLIDATED BALANCE SHEET As at 31 March 2024 Note As at 31-Mar-24 £’000 As at 31-Mar-23 £’000 Assets Non current assets Intangible assets 15 48,472 90,629 Goodwill 14 32,110 38,586 Property, plant and equipment 16 3,719 3,378 Total non current assets 84,301 132,593 Current assets Trade and other receivables 17 229,586 241,682 Financial assets 18 8,157 9,921 Cash and cash equivalents 1i 104,318 121,037 Total current assets 342,061 372,640 Liabilities Non current liabilities Deferred tax liability 11 (11,227) (21,493) Lease liability 16 (2,538) (2,168) Total non current liabilities (13,765) (23,661) Current liabilities Trade and other payables 19 (241,363) (255,460) Corporation tax payable – (5,131) Total current liabilities (241,363) (260,591) Net current assets 100,698 112,049 Net assets 171,234 220,981 Shareholders’ equity Ordinary shares 20 648 648 Share premium – 112,510 Capital redemption reserve 19 19 Retained earnings 183,461 121,341 Own shares held 22 (12,894) (13,537) Total equity 171,234 220,981 The notes on pages 152 to 185 form an integral part of these consolidated financial statements. The financial statements on pages 148 to 185 were approved and authorised for issue by the Board of Directors on 25 June 2024 and signed on its behalf by V.K. Abrol, Chief Financial Officer. Company Number 2954692 149 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() #### CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 March 2024 Note As at 31-Mar-24 £’000 As at 31-Mar-23 £’000 Cash flows from operating activities Cash received from operations 178,771 236,362 Cash paid in respect of operations (134,636) (174,437) Net cash generated from changes in unit trust receivables and payables 1,197 (1,387) Net cash generated from operations 45,332 60,538 Interest received 1,432 358 Tax paid (18,558) (17,479) Net cash generated from operating activities 28,206 43,417 Cash flows from investing activities Purchase of property and equipment (142) (253) Acquisition of Majedie net of cash acquired – 13,596 Loan to GAM (8,900) – Loan repaid by GAM 8,900 – Gain on liquidation of Architas – 827 Purchase of DBVAP Financial Asset (1,493) (2,701) Sale DBVAP Financial Asset 4,348 – Purchase of Seeding investments (328) (2,193) Sale of Seeding investments 371 1,990 Net cash generated from investing activities 2,756 11,266 Cash flows from financing activities Payment of lease liabilities (1,525) (1,328) Purchase of own shares – (7,100) Dividends paid (46,156) (46,070) Net cash used in financing activities (47,681) (54,498) Net (decrease) / increase in cash and cash equivalents\* (16,719) 185 Opening cash and cash equivalents\* 121,037 120,852 Closing cash and cash equivalents\* 104,318 121,037 \*Cash and cash equivalents consist only of cash balances. The notes on pages 152 to 185 form an integral part of these consolidated financial statements. 150 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() #### CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 31 March 2024 Note Ordinary shares £ ‘000 Share premium £ ‘000 Capital redemption £ ‘000 Retained earnings £ ‘000 Own shares held £ ‘000 Total Equity £ ‘000 Balance at 1 April 2023 brought forward 648 112,510 19 121,341 (13,537) 220,981 Loss for the year – – – (3,490) – (3,490) Total comprehensive income for the year – – – (3,490) – (3,490) Dividends paid 9 – – – (46,156) – (46,156) Cancellation of share premium account 20 – (112,510) – 112,510 – – Purchase of own shares – – – – (381) (381) Sale of own sharesSale of own shares –– –– –– (1,024)(1,024) 1,0241,024 –– Members share incentive award exercises – – – (385) – (385) Equity share options issued 23 – – – 665 – 665 Balance at 31 March 2024 648 – 19 183,461 (12,894) 171,234 #### CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 31 March 2023 Note Ordinary shares £ ‘000 Share premium £ ‘000 Capital redemption £ ‘000 Retained earnings £ ‘000 Own shares held £ ‘000 Total Equity £ ‘000 Balance at 1 April 2022 brought forward 612 64,370 19 128,859 (9,692) 184,168 Profit for the year – – – 39,328 – 39,328 Total comprehensive income for the year – – – 39,328 – 39,328 Dividends paid 9 – – – (46,070) – (46,070) Shares issued 20 36 48,140 – – – 48,176 Purchase of own shares – – – – (7,100) (7,100) Sale of own shares – – – (2,692) 3,255 563 Equity share options issued 23 – – – 1,916 – 1,916 Balance at 31 March 2023 648 112,510 19 121,341 (13,537) 220,981 The notes on pages 152 to 185 form an integral part of these consolidated financial statements. 151 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() #### NOTES TO THE FINANCIAL STATEMENTS 1 PRINCIPAL ACCOUNTING POLICIES a) Basis of preparation The consolidated financial statements have been prepared in accordance with UK-adopted International Financial Reporting Standards (IFRS) and those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The preparation of financial statements in conformity with IFRS requires the directors of the Company to make significant estimates and judgements that affect the reported amounts of assets and liabilities and disclosure of contingencies at the date of the financial information and the reported income and expense during the reporting periods. Although these judgements and assumptions are based on the directors’ best knowledge of the amount, events or actions, actual results may differ from these estimates. The accounting policies set out below have been used to prepare the financial information. All accounting policies have been consistently applied. The financial information has been prepared based on the IFRS standards effective as at 31 March 2024. There have been no significant changes issued to IFRS that would affect the Group and Company during the year. b) Going concern The consolidated financial information presented within these financial statements has been prepared on a going concern basis (See ‘Basis of financial statements’ on page 93) under the historical cost convention (except for the measurement of financial assets at fair value through profit and loss and DBVAP liability which are held at their fair value). The Group is reliant on cash generated by the business to fund its working capital. The Directors have assessed the prospects of the Group and parent company over the forthcoming 12 months, including an assessment of current trading; budgets, plans and forecasts; the adequacy of current financing arrangements; liquidity, cash reserves and regulatory capital; and potential material risks to these forecasts and the Group strategy. This assessment includes a review of the ongoing impact of the global geopolitical tensions; and consideration of a severe but plausible downside scenario in which AuMA falls by 20% with nil net sales. Consequently, the directors are confident that the Group and parent company will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the financial statements and therefore have prepared the financial statements on a going concern basis. Within our reasonable plausible downside, we do not consider the impact of investor sentiment on ESG factors from the climate targets detailed within the responsible capitalism on page 62 to 63 to be a material risk in the medium and long term and therefore have not considered these risks in the reasonable plausible downside scenarios. c) Basis of consolidation Subsidiaries are all entities over which the Group has control. The Group has control of an entity if, and only if it has all of the following: • power over the entity; • exposure, or rights to, variable returns from its involvement with the entity; and • the ability to use its power over the entity to affect its returns. The Group considers all relevant facts and circumstances in assessing whether it has power over an entity, including: the purpose and design of an entity, its relevant activities, substantive and protective rights, and voting rights and potential voting rights. There is no fixed minimum percentage at which the Group consolidates, and each exposure is reviewed individually. Subsidiaries comprise operating and holdings companies, partnerships and those funds where the Group acts as fund manager and which are consolidated as a result of additional exposure to the variable returns of the funds through seed investment. Such seed investments are typically small as a proportion of the aggregate capital of the fund and at the date of the report no investee funds are considered subsidiaries and consolidated. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases. Uniform accounting policies are applied across all Group entities. Inter-company transactions, balances, income and expenses on transactions between Group entities are eliminated on consolidation. Profits and losses resulting from inter-company transactions that are recognised in assets are also eliminated on consolidation. Subsidiaries’ exemption from audit by parental guarantee The Company has provided a parental guarantee under section 479C of the Companies Act (2006) over the outstanding liabilities of some of its subsidiaries as at 31 March 2024 until they are settled in full. The subsidiaries covered by the parental guarantee are exempt from the requirements of the Companies Act (2006) relating to the audit of their individual accounts in accordance with section 479A. The guarantee covers the following of the Company’s wholly-owned subsidiaries: • Liontrust Investment Services Limited • Liontrust Investment Funds Limited • Liontrust Investment Management Ltd This parental guarantee was not provided in the prior year. Significant accounting estimates and judgements The preparation of the financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. Estimates and judgements used in preparing the financial statements are periodically evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable. There are no significant judgements. The Directors make a number of estimates, these 152 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() include leases (note k) and share based payments (note p), neither of which are considered to be significant. In addition, the Directors make significant estimates to support the carrying value of goodwill and intangibles that arise on acquisition. These estimates are set out below: Accounting estimates and judgements (i) Acquisition of Majedie Investment Management Limited (“Majedie”) on 1st April 2022 The consideration paid for Majedie is allocated between the intangible assets related to the fund management contracts, segregated client portfolios and goodwill, being the excess of the consideration and the amount recognised for noncontrolling interests, over the net identifiable assets acquired and liabilities assumed. The significant estimate is in relation to certain unobservable inputs supporting the carrying value of the intangible assets and goodwill. Details of the key assumptions used are provide in notes 13, 14 and 15. (ii) Impairment of Goodwill and Intangible assets Goodwill arising on acquisitions is capitalised in the consolidated balance sheet. Goodwill is carried at cost less provision for impairment. The carrying value of goodwill is not amortised but is tested annually for impairment or more frequently if any indicators of impairment arise. Goodwill is allocated to a cash generating unit (CGU) for the purpose of impairment testing, with the allocation to those CGUs that are expected to benefit from the business combination in which the goodwill arose (see note 14 and 15). The costs of acquiring intangible assets such as fund management contracts are capitalised where it is probable that future economic benefits that are attributable to the assets will flow to the Group and the cost of the assets can be measured reliably. The assets are held at cost less accumulated amortisation. An assessment is made at each reporting date, on a standalone basis for each intangible asset, as to whether there is any indication that the asset in use may be impaired. If any such indication exists and the carrying value exceeds the estimated recoverable amount at the time, the assets are written down to their recoverable amount. The recoverable amount is measured as the greater of fair value less costs to sell and value in use. Further information on the impairment testing and estimates used are contained in note 14. The fund management contracts and segregated clients contracts relating to the assets acquired as part of the acquisitions of Alliance Trust Investments Limited; Neptune Investment Management Limited; Architas Multi-Manager Limited and Architas Advisory Services Limited (together “Architas”) and Majedie are recorded initially at fair value and recorded in the consolidated financial statements as intangible assets, they are then amortised over their useful lives on a straightline basis. Management have determined that the useful life of these assets is between 5 and 10 years owing to the nature of the acquired products. Impairment is tested through measuring the recoverable amount against the carrying value of the related intangible asset. Impairment testing is only required if there is an impairment trigger. The recoverable amount is the higher of the fair value less costs to sell and its value in use. The Directors assess the value in use using a multi-period excess earnings model which requires a number of inputs requiring management estimates, the most significant of which include: future AuMA growth and discount rates. In the current period, significant estimates were only required for the intangible assets and goodwill in relation to Architas and Majedie (see notes 13,14 and 15 for further detail). Although in the year there were net outflows, it was not considered significant enough to trigger an indicator of impairment for ATI and Neptune. e) Property, plant and equipment Property, plant and equipment are stated at historic purchase cost less accumulated depreciation. The cost includes the original purchase price of the asset and the costs attributable to bringing the asset to its working condition for its intended use. Leasehold improvements are included at cost and are depreciated on a straight line basis over the lower of the estimated useful life and the remaining lease term. Office equipment is depreciated on a straight line basis over the estimated useful life of the asset, which is between three and ten years. Computer equipment is depreciated on a straight line basis over the estimated useful life of the asset which is three years. At each reporting date management reviews the assets’ residual values and useful lives, and will make adjustments if required. f) Trade and other receivables Trade and other receivables include prepayments as well as amounts the Group is due to receive from third parties in the normal course of business. These include fees as well as settlement accounts for transactions undertaken. These receivables are normally settled by receipt of cash. Trade and other receivables are initially recognised at fair value and then at amortised cost after deducting provisions for expected credit losses. The Group applies the IFRS9 simplified approach to measuring expected credit losses (ECLs) for trade receivables at an amount equal to lifetime ECLs. All receivable are current and there is limited (or no history) of credit losses and therefore the Group believe any ECL would not be material. The ECLs on trade receivables are calculated based on actual historic credit loss experience and is adjusted for forward-looking estimates. Prepayments arise where the Group pays cash in advance for services. As the service is provided, the prepayment is reduced and the operating expenses are recognised in the Consolidated Statement of Comprehensive Income. Purchase orders from customers for units in managed funds are initially recognised as receivables pending receipt of cash to fund the purchase on a trade date basis. Settlement of the transaction occurs through exchange of cash for units in the underlying fund which are received from the registrar in exchange for this consideration. Correspondingly, redemptions of units in funds are recognised as payables from trade date until receipt of sales proceeds from the registrar. This purchase and sale process and settlement cycle results in significant, but largely offsetting, 153 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() 154 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() receivable and payable balances on the Group balance sheet. A breakdown of these amounts is provided in notes 17 and 19. Any balances not settled on due date are segregated within client money accounts separate from the assets of the Group. g) Trade and other payables Trade and other payables (excluding deferred income) represent amounts the Group is due to pay to third parties in the normal course of business. These include expense accruals as well as settlement accounts (amounts due to be paid for transactions undertaken as noted above). Trade payables are costs that have been billed. Accruals represent costs, including remuneration, that are not yet billed or due for payment. They are initially recognised at fair value and subsequently held at amortised cost. h) Financial assets The Group holds the following assets at fair value through profit or loss: for the UK Authorised unit trust, units are held in the ‘manager’s box’ are to ease the calculation of daily creations and cancellations of units. These box positions are not held to create speculative proprietary positions but are managed in accordance with specified criteria and authorisation limits. The units in the ‘manager’s box’ are accounted for on a trade date basis. These units are valued on a bid price basis. For the UK ICVCs, the shares held in the ‘manager’s box’ are to facilitate the calculation of daily creations and cancellations of shares. These box positions are not held to create speculative proprietary positions but are managed in accordance with specified criteria and authorisation limits. The shares in the ‘manager’s box’ are accounted for on a trade date basis. These shares are valued on a mid-price basis. Units in Liontrust UK Authorised unit trusts, shares in the sub funds of the Liontrust Global Funds Plc; and shares in the Liontrust ICVCs are held by the Liontrust Asset Management Employee Trust (an Employee Benefit Trust ‘EBT’) in respect of the Deferred Bonus and Variable Allocation Plan (DVBAP). The units and shares are accounted for on a trade date basis and are valued on a mid (unit trust) or bid (ICVC) basis. The Group assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired. i) Cash and cash equivalents Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value. Under IFRS cash and cash equivalents are included in the consolidated cash flow statement. j) Own shares Own shares held by the EBT are valued at cost and are shown as a deduction from the Group’s shareholders’ equity. No gains or losses are recognised in the Consolidated Statement of Comprehensive Income. k) Leases At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. As a lessee At commencement, or on modification of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of its relative stand-alone price. However, for the leases of property the Group has elected not to separate non-lease components and account for the lease and non-lease components as a single lease component. The Group recognises a right-of-use asset (ROU) and a lease liability at the lease commencement date. The ROU asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset, or to restore the underlying asset or the site on which it is located, less any lease incentives received. The ROU asset is subsequently depreciated using the straight- line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the cost of the ROU asset reflects that the Group will exercise a purchase option. In that case the ROU asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the ROU asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate (IBR). Generally, the Group uses its IBR as the discount rate. The Group determines its IBR by obtaining interest rates from various external financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased. Lease payments included in the measurement of the lease liability comprise the following: • fixed payments, including in-substance fixed payments; • variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date; • amounts expected to be payable under a residual value guarantee; and • the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Group is reasonably certain not to terminate early. 155 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a significant event or change in circumstances that is within the control of the Group that affects the determination of the lease term, and therefore in future lease payments. This could arise from a change in and index or rate, if there is a change in Group’s estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the ROU asset, or is recorded in profit or loss if the carrying amount of the ROU has been reduced to zero. l) Income and expenses Income Income and expenses are accounted for on an accruals basis when they become receivable or payable in accordance with IFRS 15. The Group’s primary source of revenue is fee income from investment management activities. These fees are generally based on an agreed percentage of the valuation of the AuMA and are recognised as the service is provided and it is probable that the fee will be received. Contractual rebates payable to customers are deducted from revenue. Management and administration fees are earned over a period of time, and revenue is recognised in the same period in which the service is performed. Performance fees are earned in respect of certain contracts only and are recognised when the fee amount can be estimated reliably and it is highly probable that it will not be subject to significant reversal. Performance fees can include terms that a proportion of the fee earned is deferred until the next performance fee is payable. As there is no certainty that such deferred fees will be collectable in future years, the Group’s accounting policy is to include performance fees in income only when they become due and collectable in accordance with IFRS 15. Revenue is also earned from the net value of sales and redemptions, and liquidations and creations, of units and shares in units trusts and open-ended investment companies; and from the operation of a box of units in the unit trusts (“box profits”) – being the at-risk trading profit or loss arising from changes in the valuation of holdings of units in Group Unit Trusts to help manage client sales into, and redemptions from the trust. Box profits are recognised as incurred. Management, administration and performance fees are forms of variable consideration, however there is no significant judgement or estimation. Expenses Operating expenses represent the Group’s administrative expenses and are recognised as the services are provided. DBVAP – in accordance with regulatory requirements and good market practice the Group defers a proportion of senior staff annual bonuses and variable allocations over a period of 3 years. At the inception of the deferral period the company purchases units in a portfolio of Liontrust funds to match the future liability arising from these awards which is recognised in the EBT as a financial asset. The DBVAP does not have any further performance conditions but has a continuous service condition. The costs of purchasing these units is recognised over the vesting period. Further details are disclosed in the Directors Remuneration Policy Elements of Reward table on page 142. m) Taxation The tax expense for the period comprises current and deferred tax. Tax is recognised in the income statement, except to the extent that it relates to items recognised in other comprehensive income, or directly in equity; in these cases, the related tax is also recognised in other comprehensive income or directly in equity. The current income tax charge is calculated on the basis of the tax laws enacted, or substantively enacted, at the balance sheet date in the countries where the company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. Deferred income tax is recognised, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the deferred income tax is not accounted for, if it arises from initial recognition of an asset or liability in a transaction, other than a business combination, that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates and laws that have been enacted, or substantively enacted, by the balance sheet date and are expected to apply when the related deferred income tax asset is realised; or the deferred income tax liability is settled. Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on a net basis. n) Members drawings Members drawings are paid on account during the period plus any share of profits paid out after the period end, accounted for as an expense in the period in which they are incurred. 156 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() o) Pensions The Group operates defined contribution schemes for its employees. The assets are invested in individual Self Invested Pension Plan accounts and are held separately from the Group. The costs of the pension scheme are recognised in the Consolidated Statement of Comprehensive Income in the period in which they are incurred. The Group has no further payment obligations once the contributions have been paid. p) Employee share options and Member incentive awards The Group operates a number of equity-settled share-based compensation plans, under which the entity receives services from employees and members as consideration for equity instruments of the Group. The fair value of the services received in exchange for the awards is recognised as an expense, and credited to equity reserves for equity settled awards, over the vesting period. For equity settled awards the total amount to be expensed is determined at the date of grant by reference to the fair value of the awards granted. Monte Carlo and Black- Scholes models have been used to calculate the fair value of the awards. The models require estimates to be made to determine the fair value of the awards the most significant of which are as follows: Liontrust Long Term Incentive Plan (‘eLTIP’) and Liontrust Members Long Term Incentive Plan (‘mLTIP’) with market based performance conditions attached: a Monte Carlo simulation model is used to value the award with the following assumptions having been made: • the fair values spread over the vesting period of 3 years with an exercise price of nil; • the options are expected to be exercised at the point they become exercisable; • the risk-free interest rate has been based on the implied yield of zero-coupon government bonds (UK strips) with a remaining term equal to the expected term; and • the expected volatility is based on the Company’s historical volatility eLTIP and mLTIP with non-market based performance conditions attached; Liontrust Company Share Option Plan (CSOP) and Save As You Earn (SAYE) scheme: • a Black-Scholes model is used to value the award with the following assumptions having been made: • the fair value is spread over the vesting period which is 3 years with an exercise price of nil (eLTIP/mLTIP), or set at the time of issue of the award for CSOP awards and SAYE options; • the eLTIP/mLTIP awards are expected to be exercised at the point they become exercisable; • the CSOP awards are estimated to be exercised at the midpoint between vest (3 years) and lapse (10 years); • the SAYE options are expected to exercised at the point they become exercisable; • the risk-free interest rate of has been based on the implied yield of zero-coupon government bonds (UK strips) with a remaining term equal to the expected term; • the expected volatility is based on the Company’s historical volatility; • dividend yield of nil for eLTIP/mLTIP awards as dividend equivalents are paid on vesting of these awards; and • dividend yield estimated based on the current expectation and history of dividends paid for CSOP and SAYE awards. Based on historic experience, no reduction in the expense has been taken for expected award lapses from staff leaving the Group. q) Dividends Dividends are recognised as a reduction in equity in the period in which they are paid or in the case of final dividends when they are approved by shareholders. The reduction in equity in the Period therefore comprises the prior Period final dividend and the current Period interim. r) Foreign currency gains/losses Items in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (The ‘functional currency’). The consolidated financial statements are presented in Sterling (‘£’) which is the Group and Company’s functional and presentation currency. Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Consolidated Statement of Comprehensive Income. s) Share Capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds. t) Employee Benefit Trusts (‘EBTs’) EBTs are accounted for under IFRS 10 and are consolidated on the basis that the parent has control, thus the assets and liabilities of the EBT are included on the Company balance sheet and shares held by the EBT are presented as a Loan to EBT. 157 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() 2 FINANCIAL RISK MANAGEMENT The Group’s activities expose it to a variety of financial risks: market risk (including price risk, interest rate risk and foreign exchange risk), credit risk, liquidity risk and capital risk. The Group’s overall risk management programme understands the unpredictable nature of financial markets and seeks to minimise any potential adverse effects on the Group’s financial performance. The Group uses a number of analytical tools to measure the state of the business. The financial review on pages 28 to 31 of the Strategic Report identifies some of these measures. a) Market risk i) Price risk The Group is exposed to equity securities price risk because of investments held by the Group and classified on the consolidated balance sheet as current financial assets (held at fair value through profit or loss). The Group holds the following types of investment as assets held at fair value through profit or loss (see note 18): Operational investments: 1. Units in UK Authorised unit trusts; 2. shares in the sub-funds of Liontrust Global Funds PLC; 3. Shares in the sub-funds of Liontrust Global Fundamental PLC; 4. shares in the sub-funds of Liontrust Investment Funds ICVC; and 5. shares in the sub-funds of Liontrust Sustainable Funds ICVC. Investments held by the EBT 1. Units in UK Authorised unit trusts; and 2. shares in the sub-funds of Liontrust Sustainable Funds ICVC. For UK Authorised unit trusts and the ICVC’s, the units and shares held in the ‘manager’s box’ are to ease the calculation of daily creations and cancellations of units or shares . These box positions are not held to create speculative proprietary positions but are managed in accordance with specified criteria and authorisation limits. The manager’s box for each fund is reviewed daily. If there is a negative box position then units or shares are created to bring the box level positive. Three control levels of the manager’s box exist for each fund and each level is required to be signed off by progressively more senior staff. There are clearly defined maximum limits, over which manager’s box levels cannot exceed. The units in the ‘manager’s box’ are accounted for on a trade date basis. These units are valued on a bid price basis and held at fair value through profit and loss. The shares in the ‘manager’s box’ are accounted for on a trade date basis. These shares are valued on a mid price basis and held at fair value through profit and loss. For UK Authorised unit trusts, the units held in the EBT are selected as part of the DBVAP to align the interests of the Directors with the wider business. The units are accounted for on a trade date basis and valued on a bid price basis and held at fair value through profit and loss. For the shares in the sub-funds of Liontrust Sustainable Funds ICVC held in the EBT are selected as part of the DBVAP to align the interests of the Directors with the wider business. The shares are accounted for on a trade date basis and valued on a single price basis and held at fair value through profit and loss. The operational investment in the sub-funds of Liontrust Global Funds PLC, (an Ireland domiciled open ended investment company) have been undertaken as an investment to aid incorporation and will be redeemed when the sub funds grow in size. The Group has a regular review process for the investments which identifies specific criteria to ensure that investments are within agreed limits. Management consider, based on historic information, that a sensitivity rate of 10% is appropriate. Based on the holdings in the Liontrust Global Funds at the balance sheet date a price movement of 10% would result in a movement in the value of the investment of £307,000 (2023: £280,700). Based on the holdings in the Liontrust Authorised Unit Trusts and UK ICVC’sat the balance sheet date a price movement of 10% would result in a movement in the value of the investment of £509,000 (2023: £711,000). The Group monitors its investments with respect to its regulatory capital requirements and reviews its investments’ values with respect to overall Group capital on a monthly basis. ii) Cash flow interest rate risk Interest rate risk is the risk that the Group will sustain losses from the fair value or future cash flows of adverse movements in interest bearing assets and liabilities and so reduce profitability. The Group holds cash on deposit in GBP. The interest on these balances is based on floating rates. The Group monitors its exposure to interest rate movements and may decide to adjust the balance between deposits on fixed or floating interest rates, or adjust the level of deposits. Management consider that given current interest rate levels a sensitivity rate of 1% is appropriate for GBP cash. Following a review of sensitivity based on average cash holdings during the year a 1% increase or decrease in the interest rate cause a £978,000 increase or a decrease to nil in interest receivable (2023: £1,154,000 increase or decrease to nil). 158 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() iii) Foreign exchange risk Foreign exchange risk is the risk that the Group will sustain losses through adverse movements in currency exchange rates. The Group’s policy is to hold the minimum currency exposure required to cover operational needs and, therefore, to convert foreign currency on receipt. The Group is currently exposed to foreign exchange risk in the following areas: Investments denominated in US Dollars and Euros and income receivable in Euro and US Dollars, these amounts are not considered to be material. In calculating the sensitivity analysis below it has been assumed that expenses/income will remain in line with budget in their relative currencies year on year. Management consider that a sensitivity rate of 10% is appropriate given the current level of volatility in the world currency markets. In respect of investments denominated in foreign currencies a 10% movement in the UK Sterling vs. the relevant exchange rate would lead to an exchange gain or loss as follows: Sterling vs. Euros – a movement of 10% would lead to a movement of £17,000 (2023: £13,000). Sterling vs. US Dollar – a movement of 10% would lead to a movement of less than £23,000 (2023: less than £4,000). In respect of Income receivable in Euro a 10% movement in the exchange rate would result in a movement of £57,000 (2023: £559,782) in the income statement. In respect of Income receivable in US Dollar a 10% movement in the exchange rate would result in a movement of £19,000 (2023: £262,169) in the income statement. b) Credit risk Credit risk is managed at a Group level. The Group is exposed to credit risk primarily on its trade receivables and from its financing activities, including deposits with banks and financial institutions and other financial instruments. Fees receivable arise mainly from the Group’s investment management business and amounts are monitored regularly. Historically, default levels have been insignificant and the Group’s maximum exposure to credit risk is represented by the carrying value of its financial assets. Maximum exposure to credit risk 31-Mar-24 £’000 31-Mar-23 £’000 Cash and cash equivalents 104,318 121,037 Trade receivables 229,578 241,682 For banks and financial institutions only independently rated parties with a minimum rating of ‘A-2’ are used and their ratings are regularly monitored by the Portfolio Risk Committee. For receivables the Group takes into account the credit quality of the client and credit positions are monitored. The Group has three main types of receivables: management and performance fees, settlement due from investors in its funds and from the funds themselves for unit/share liquidations. For management and performance fee receivables, the Group proactively manages the invoicing process to ensure that invoices are sent out on a timely basis and has procedures in place to chase for payment at pre-determined times after the despatch of the invoice to ensure timely settlement. For receivables due from investors, the Group has rigorous procedures to chase investors by phone/ letter to ensure that settlement is received on a timely basis. For settlement due from the fund for liquidations, the settlement of these types of receivables are governed by regulation and are monitored on an exception basis. In all cases, detailed escalation procedures are in place to ensure that senior management are aware of any problems at an early stage. During the year there have been no losses due to non-payment of receivables and the Group does not expect any losses from the credit counterparties as held at the balance sheet date. 159 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() c) Liquidity risk Prudent liquidity risk management requires the maintenance of sufficient net cash and marketable securities. The Group monitors rolling forecasts of the Group’s liquidity reserves (comprising readily realisable investments and cash and cash equivalents) on the basis of expected cash flows. The Group has categorised its financial liabilities into maturity Groupings based on the remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the table below are the contractual undiscounted cash flows. As at 31 March 2024 Due within 3 months £’000 Due between 3 months and one year £’000 Due in over one year £’000 Payables 237,482 – 2,308 As at 31 March 2023 Due within 3 months £’000 Due between 3 months and one year £’000 Due in over one year £’000 Payables 255,460 – 2,168 d) Capital risk management The Group’s objective when managing capital is to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders whilst maintaining an optimal company structure to reduce the cost of capital and meet working capital requirements. The Group’s policy is that it and its subsidiaries should have sufficient capital to meet regulatory requirements, keep an appropriate standing with counterparties and meet working capital requirements at both a Group and subsidiary level. Management reviews the Group’s assets on a monthly basis and will ensure that operating capital is maintained at the levels required. In order to maintain or adjust the capital structure the Group may adjust the amounts of dividends paid to shareholders, return capital to shareholders, issue new shares, buy back shares or sell financial assets which may increase cash and reduce capital requirements. Regulatory risk capital (unaudited) Recognised regulatory bodies, such as the FCA in the UK, oversee the activities of a number of the Group’s operating subsidiaries and impose capital requirements on the regulated legal entities. The FCA imposes prescribed minimum capital requirements and requires firms to access whether additional capital above the minimum requirement is needed for each entity along with any Group risks to ensure sufficient capital is in-place to accommodate the potential impact of any risk that may cause harm to our clients, the market and/or to Liontrust. The minimum capital requirement is calculated based on the regulatory entitlements/classification of each entity. Liontrust Investment Partners, LLP is subject to the Investment Firm Prudential Regime (IFPR) and the FCA’s MIFIDPRU handbook whereby the minimum capital requirement is the highest of the following: 1) the Permanent Minimum Requirement (PMR); 2) the K-factor Requirement (prescribed coefficients / risk scores on key business metrics such as AUM and daily trading flow); and 3) the Fixed Overhead Ratio (FOR) Requirement. Liontrust Fund Partners, LLP is subject to IPRU-INV which the minimum capital requirement is the highest of the following: 1) the Funds Under Management (FUM) Requirement and 2) the Fixed Overhead Ratio (FOR) requirement, plus applicable cover for professional liability risks. Additional capital requirements are assessed specific to each firm along with any Group risks that may cause harm. Additional capital requirements also quantifies the cost of a wind-down to ensure sufficient capital above the minimum is available should any material risks occur during the course of normal operations or in the event of a wind-down. Liontrust performs this additional capital requirement assessment every September – and more frequently if any material change to the regulated entities and/or the Group – in the Internal Capital Adequacy and Risk Assessment (ICARA) process. The ICARA process details how all material risks are being managed to ensure that the risks are tolerable in terms of potential impact should they materialise. The assessment draws upon the results of our risk management controls and includes scenario analysis and stress testing that considers each regulated entity and the Group’s exposure to extreme events in addition to any mitigating actions. The capital requirement for Liontrust as of 31 March, 2023 is £26.8m (based on the 2023 ICARA) and is estimated to reduce to £22.8 million as at 31 March, 2024 in our 2024 ICARA given AuMA for the Group is lower than the previous fiscal year. 160 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() The preparation of the 2023 ICARA and subsequent periodic capital adequacy reviews throughout the year was managed by the Chief Risk Officer alongside the Chief Executive Officer and Chief Operating Officer / Chief Financial Officer, together with key input from senior managers within the business. The ICARA is reviewed and approved by the Audit and Risk Committee and the Group Board. As at 31 March 2024, the Group has regulatory capital (own funds) resources of £101.9 million (2023: £113.3million), significantly in excess of the capital requirement for Liontrust. The regulatory capital is all comprised of common equity tier 1 capital such as retained earnings and ordinary shares line items on the balance sheet. During the period, the subsidiary entities and the Group complied with all regulatory capital requirements each entity is subject to. The table below illustrates the composition of regulatory capital (own funds) resources. Liontrust Investment Partners, LLP is required to disclosure its regulatory capital information which will be available on the Group’s website www.liontrust.co.uk/regulatory. Composition of Regulatory Capital Item Amount (GBP thousands) Source based on reference numbers/letters of the balance sheet in the audited statements 1 OWN FUNDS 101,879 2 TIER 1 CAPITAL 101,879 3 COMMON EQUITY TIER 1 CAPITAL 184,129 4 Fully paid up capital instruments 648 Ordinary shares 5 Share premium – Share premium 6 Retained earnings 183,461 Retained earnings 7 Accumulated other comprehensive income – 8 Other reserves 19 Capital redemption reserve 9 Adjustments to CET1 due to prudential filters – 10 Other funds – 11 (-)TOTAL DEDUCTIONS FROM COMMON EQUITY TIER 1 82,249 Intangible assets, Goodwill, Own shares held, and Deferred tax liabilities 19 CET1: Other capital elements, deductions and adjustments – 20 ADDITIONAL TIER 1 CAPITAL – 21 Fully paid up, directly issued capital instruments – 22 Share premium – 23 (-) TOTAL DEDUCTIONS FROM ADDITIONAL TIER 1 – 24 Additional Tier 1: Other capital elements, deductions and adjustments – 25 TIER 2 CAPITAL – 26 Fully paid up, directly issued capital instruments – 27 Share premium – 28 (-) TOTAL DEDUCTIONS FROM TIER 2 – 29 Tier 2: Other capital elements, deductions and adjustments – The table on the next page reconciles the composition of regulatory capital in the table above to the audited balance sheet of this report. 161 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() Own funds: reconciliation of regulatory own funds to balance sheet in the audited financial statements Figures below are in GBP thousands unless noted otherwise Item Balance sheet as in published / audited financial statements 31-Mar-24 Cross-reference to Composition of Regulatory Capital table Assets – Breakdown by asset classes according to the balance sheet in the audited financial statements Intangible assets 48,472 Line 11 Goodwill 32,110 Line 11 Property, plant and equipment 3,719 Trade and other receivables 229,586 Financial assets 8,157 Cash and cash equivalents 104,318 Total Assets 426,362 Liabilities – Breakdown by liability classes according to the balance sheet in the audited financial statements Deferred tax liability (11,227) Line 11 Lease liability (2,538) Trade and other payables (241,363) Total Liabilities (255,128) Shareholders’ Equity – Breakdown by shareholders’ equity classes according to the balance sheet in the audited financial statements Ordinary shares 648 Line 4 Share premium – Line 5 Retained earnings 183,461 Line 6 Capital redemption reserve 19 Line 8 Own shares held (12,894) Line 11 Total Shareholders' Equity 171,234 3 SEGMENTAL REPORTING The Group operates only in one operating segment - Investment Management. Management offers different fund products through different distribution channels. All key financial, business and strategic decisions are made centrally by the Board, which determines the key performance indicators of the Group. The Group reviews financial information presented at a Group level. The Board, is therefore, the chief operating decision-maker for the Group. The information used to allocate resources and assess performance is reviewed for the Group as a whole. On this basis, the Group considers itself to be a single-segment investment management business. Revenue by location of customer Year ended 31-Mar-24 £’000 Year ended 31-Mar-23 £’000 United Kingdom 189,105 226,267 Europe (ex UK) 8,598 16,854 Canada 16 21 Australia 170 197 197,889 243,339 During the year ended 31 March 2024 the Group had no customer contributing more than 10% of total revenue (2023: £25,043K) 162 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() 4 REVENUE AND COST OF SALES (GROSS PROFIT) The Group’s main source of revenue is management fees. Management fees are for investment management or administrative services and are based on an agreed percentage of the AUM. Initial charges and commissions are for additional administrative services at the beginning of a client relationship, as well as ongoing administrative costs. Performance fees are earned from some funds when agreed performance conditions are met. Year ended 31-Mar-24 £’000 Year ended 31-Mar-23 £’000 Management fee and other revenue 187,480 224,855 Performance fee revenue 10,409 18,484 Revenue 197,889 243,339 Cost of sales (11,828) (13,569) Gross profit 186,061 229,770 Gross Profit excluding Performance fee revenues 175,652 211,286 Average AuMA (£m) 28,330 33,815 Revenue margin (%) 0.620% 0.625% Revenue from customers includes: • Investment management fees on unit trusts, open-ended investment companies sub-funds, portfolios and segregated accounts. • Performance fees on unit trusts, open-ended investment companies sub-funds, portfolios and segregated accounts. • Fixed administration fees on unit trusts and open-ended investment companies sub-funds. • Net value of sales and repurchases of units in unit trusts and shares in open-ended investment companies (net of discounts). • Net value of liquidations and creations of units in unit trusts and shares in open-ended investment companies sub-funds. • Box profits on unit trusts - the “at-risk” trading profit or loss arising from changes in the valuation of holdings of units in Group Unit Trusts to help manage client sales into, and redemptions from the trust. • Less: contractual rebates paid to customers. The cost of sales includes: • Operating expenses including (but not limited to) keeping a record of investor holdings, paying income, sending annual and interim reports, valuing fund assets and calculating prices, maintaining fund accounting records, depositary and trustee oversight and fund auditor fees. • Sales commission paid or payable. • External investment advisory fees paid or payable. Performance fee revenue Performance fee revenue include fees that are subject to arrangements whereby fees are deferred from prior periods but are only recognised and received following another period of outperformance. During the year £10.4 million of performance fees are recognised. In future periods another £1.5 million may be received. As there is no certainty that such deferred fees will be collectable in future years, the Group’s accounting policy is to include performance fee revenue in income only when they become due and collectable and therefore the element (if any) deferred beyond 31 March 2024 has not been recognised in the results for the year. 163 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() 5 ADMINISTRATION EXPENSES Year ended 31-Mar-2024 Year ended 31-Mar-2024 Year ended 31-Mar-2024 Year ended 31-Mar-2023 Year ended 31-Mar-2023 Year ended 31-Mar-2023 £’000 £’000 £’000 £’000 £’000 £’000 Fixed Variable Total Fixed Variable Total Staff related expenses Wages and salaries 32,324 30,178 Fund management 4,019 6,045 10,064 5,109 2,963 8,072 Other staff 17,876 4,384 22,260 16,559 5,547 22,106 Social security costs 2,613 4,105 Fund management 331 – 331 1,300 – 1,300 Other staff 2,282 – 2,282 2,805 – 2,805 Pension costs 2,502 2,388 Fund management 457 – 457 442 – 442 Other staff 2,045 – 2,045 1,946 – 1,946 Share incentivisation expense 1,271 2,354 All staff – 1,271 1,271 – 2,354 2,354 DBVAP expense 2,953 2,777 All staff – 2,953 2,953 – 2,777 2,777 Severance compensation 3,198 3,995 Member related expenses Members' drawings charged as an expense 36,445 59,507 Fund management 3,328 29,180 32,508 14,449 35,359 49,808 Other members 2,393 1,544 3,937 5,501 4,198 9,699 Share incentivisation expense 1,040 1,225 All members – 1,040 1,040 – 1,225 1,225 Non-staff related expenses Professional services 1 15,652 8,026 Depreciation 1,975 3,883 Intangible asset amortisation 12,094 14,793 Intangible asset and Goodwill impairment 37,065 12,816 Other administration expenses 39,800 37,163 Total administration expenses 188,932 183,210 1 Includes acquisition related and restructuring costs for past acquisitions, see table below for a detailed breakdown. Note, Acquisition related costs relate primarily to corporate finance, sponsor, due diligence, target operating model design, Class 1 circular (as applicable) and Swiss public offer (as applicable) and legal expenses. Year ended 31-Mar-24 £’000 Year ended 31-Mar-23 £’000 GAM acquisition related costs 1 9,508 1,540 Neptune/Architas/Majedie acquisition related costs 559 5,868 Significant costs relating to target operating model restructure 2 5,585 618 Total Professional services 15,652 8,026 1 Liontrust attempted to acquire GAM and then remained resolute in sticking to a price that was believed to be fair for the value of the business, recognising the costs it would have entailed and decided to not to acquire the company. 2 See page 20 for further details on Liontrust Asset Management PLC plan on the target operating model. 164 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() Year ended 31-Mar-24 £’000 Year ended 31-Mar-23 £’000 Share incentivisation expense - Share option expense employees 398 1,485 - Share option NIC expense 169 175 - Share incentive plan expense 475 455 - Share plan administration expenses 229 239 1,271 2,354 - Share option expense members 1,040 1,225 2,311 3,579 The average number of staff of the Group (as calculated on a weighted average basis over the year), excluding Non-executive Directors, was 235 (2023: 247). All staff are involved in the investment management business of the Group. Average number of staff during the year Year ended 31-Mar-24 £’000 Year ended 31-Mar-23 £’000 Investment management 56 57 Management and operations 110 120 Sales and Marketing 69 70 Non-executive Directors 5 6 240 253 6 OPERATING PROFIT Year ended 31-Mar-24 £’000 Year ended 31-Mar-23 £’000 The following items have been included in arriving at operating profit: Foreign exchange (losses)/gains (109) (192) Depreciation 1,975 3,883 Amortisation of intangible asset 12,094 14,792 Impairment of intangible asset and goodwill 37,065 12,816 Costs relating to Directors and staff (Note 5) 77,111 106,530 Auditors remuneration: Fees payable to the Company’s auditors and its associates for the audit of the parent Company and consolidated financial statements 564 599 Fees payable for subsidiary audits 156 150 Fees payable to the Company's auditors and its associates for other services: - services pursuant to legislation 241 219 - other services 54 154 The Group also pays audit fees for the funds as part of fund expenses costs, the total costs during the year amounted to £754,400 and £10,000 relating to non audit services (2023: £592,000, no non audit services). 165 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() 7 ADJUSTED PROFIT Adjusted profit seeks to exclude the effects of non-recurring, non-operating (financing/ capital/ non-cash) and exceptional items from the statutory measures. A reconciliation of the adjusted amounts to the IFRS reported amounts is shown below. Further details can be found in our explanation of Alternative Performance Measures on page 32. Year ended 31-Mar-24 £’000 Year ended 31-Mar-23 £’000 Profit before tax (579) 49,301 Write back of Majedie acquisition provision – (1,848) Severance compensation and staff reorganisation costs 1 3,198 3,995 Professional services 2 15,652 8,026 Amortisation of intangible asset 12,094 14,793 Impairment of intangible asset and goodwill 37,065 12,816 Adjustments 68,009 37,782 Adjusted profit before tax 67,430 87,083 Interest receivable (1,337) (358) Adjusted operating profit 66,093 86,725 1 Staff redundancy, severance compensation and related legal expenses in relation to a cost reduction programme and acquisitions. 2 See footnote 1 in Note 5 Adjusted earnings per share is reconciled in the tables below: Year ended 31-Mar-24 pence Year ended 31-Mar-23 pence Basic earnings per share (5.46) 61.45 Adjustments: Taxation 4.56 15.58 Write back of Majade acquisition provision – (2.89) Severance compensation 1 5.01 6.24 Professional services 2 24.50 12.54 Amortisation of intangible asset 18.93 23.11 Impairment of intangible asset and goodwill 58.03 20.03 Adjustments: 111.03 74.61 Taxation at 25% (26.39) (25.85) Adjusted basic earnings per share 79.18 110.21 Performance fees 3 (4.34) (8.83) Adjusted basic earnings per share (excluding performance fees) 74.84 101.38 1 See footnote 1 above. 2 See footnote 1 in Note 5. 3 Performance fee revenues contribution calculated in line with operating margin of 36% (2023: 38%) and a taxation rate of 25% (2023: 19%). 166 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() Year ended 31-Mar-24 pence Year ended 31-Mar-23 pence Diluted earnings per share (5.46) 61.21 Adjustments: Taxation 4.56 15.52 Write back of Majade acquisition provision – (2.88) Severance compensation 1 5.01 6.22 Professional services 2 24.49 12.49 Amortisation of intangible asset 18.93 23.02 Impairment of intangible asset and goodwill 58.01 19.95 Adjustments: 111.0 74.32 Taxation at 25% (26.38) (25.75) Adjusted diluted earnings per share 79.16 109.78 Performance fees 3 (4.34) (8.80) Adjusted diluted earnings per share (excluding performance fees) 74.82 100.98 £’000 £’000 Adjusted operating profit 66,093 86,724 Gross profit 186,061 229,770 Adjusted operating margin 35.5% 37.7% 1 See footnote 1 on the previous page. 2 See footnote 1 in Note 5. 3 Performance fee revenues contribution calculated in line with operating margin of 36% (2023: 38%) and a taxation rate of 25% (2023: 19%). 167 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() 168 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() 8 INTEREST RECEIVABLE Disclosures relating to the Group’s financial instruments risk management policies are detailed in note 2. Cash earns interest at floating or fixed rates based on daily bank deposit rates. The weighted average effective interest rate on cash is 1.2% (2023: 1.2%). 9 DIVIDENDS Year ended 31-Mar-24 £’000 Year ended 31-Mar-23 £’000 Ordinary Shares Prior year second interim 50 pence per share (2023: 50 pence) 31,922 32,000 Dividend equivalent paid on exercise of options 176 – First interim at 22 pence per share (2023: 22 pence) 14,058 14,070 Total 46,156 46,070 In addition, the Directors are proposing a second interim dividend in respect of the financial year ending 31 March 2024 of 50p per share which will absorb an estimated £31.9m of shareholders’ funds. It will be paid on 4 August 2024 to shareholders who are on the register of members at 5 July 2024, with shares going ex-dividend on 4 July 2024. 10 TAXATION Year ended 31-Mar-24 £’000 Year ended 31-Mar-23 £’000 (a) Analysis of charge in year Current tax: UK corporation tax at 25% (2023: 19%) 14,389 13,991 Adjustment in respect of prior periods (665) 1,005 Total current tax 13,724 14,996 Deferred tax: Deferred tax originated from timing differences (10,266) (5,023) Adjustment in respect of prior periods (547) – Total charge in year 2,911 9,973 (b) Factors affecting tax charge (Loss)/Profit on ordinary activities before tax (579) 49,301 (Loss)/Profit on ordinary activities at UK corporation tax at 25% (2023: 19%) (145) 9,367 Effects of: Expenses not deductible for tax purposes 2,826 421 Depreciation in excess of capital allowances 19 – Partnership tax adjustments – 196 Tax relief on exercise of unapproved options 876 (80) Overseas losses not deductible – (429) Other adjustments – Impairment of intangible assets – (653) Income not chargeable for tax purposes – (351) Write off of acquired deferred tax – 497 Adjustment in respect of prior periods (665) 1,005 Total taxation 2,911 9,973 No deferred tax asset has been recognised in respect of overseas losses as it is not expected that such losses will be deductible in future periods. 169 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() 11 DEFERRED TAX Deferred tax assets 2024 £’000 2023 £’000 Balance as at 1 April 1,165 1,612 Acquired Deferred tax on Majedie Acquisition – 497 Deferred tax on option IFRS2 charge (274) (447) Deferred tax acquired LPML – (497) Balance as at 31 March 891 1,165 Deferred tax liability 2024 £’000 2023 £’000 Balance as at 1 April (22,658) (18,213) Deferred tax recognised on acquired intangible asset (See note 13) – (10,412) Deferred tax on intangible assets 10,540 5,967 Balance as at 31 March (12,118) (22,658) Net deferred tax liability (11,227) (21,493) The deferred tax position as at 31 March 2024 has been calculated based on the tax rate of 25%. The net deferred tax asset/ (liability) included in the consolidated statement of financial position is as follows: As at 31-Mar-24 £’000 As at 31-Mar-23 £’000 Share-based payment scheme 891 1,165 Acquired intangible asset (12,118) (22,658) (11,227) (21,493) 12 EARNINGS PER SHARE The calculation of basic earnings per share is based on profit after taxation for the year and the weighted average number of Ordinary Shares in issue for each year. The weighted average number of Ordinary Shares was 63,875,440 for the year (2023: 63,998,999). Shares held by the EBT are not eligible for dividends and are treated as cancelled for the purposes of calculating earnings per share. Diluted earnings per share are calculated on the same bases as set out above, after adjusting the weighted average number of Ordinary Shares for the effect of options to subscribe for new Ordinary Shares or Ordinary Shares held in the EBT that were in existence during the year ended 31 March 2024. The adjusted weighted average number of Ordinary Shares so calculated for the year was 63,898,351 (2023 : 64,250,561). This is reconciled to the actual weighted number of Ordinary Shares as follows: As at 31-Mar-24 number As at 31-Mar-23 number Weighted average number of Ordinary Shares 63,875,440 63,998,999 Weighted average number of dilutive Ordinary shares under option: - to the Liontrust Long Term Incentive Plan 22,911 247,003 - to the Liontrust Option Plan – 4,559 Adjusted weighted average number of Ordinary Shares 63,898,351 64,250,561 Details of the options outstanding at 31 March 2024 to Directors are set out in the Directors’ Remuneration Report on page 106. 170 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() 13 ACQUISITION OF MAJEDIE ASSET MANAGEMENT AND NEPTUNE Majedie The following table summarises the consideration paid for Majedie Asset Management (‘Majedie’), the fair value of the assets acquired and the liabilities assumed at the Completion Date. Consideration at 1 April 2022 £’000 Fair value of consideration payable: Equity instruments (3,683,220 shares issued on completion) 48,175 Cash 4,036 Contingent consideration 1,849 Total consideration 54,060 Recognised amounts of identifiable assets acquire and liabilities assumed: Fixed assets 90 Cash and cash equivalents 17,633 Trade and other receivables 10,650 Trade and other payables (17,976) Intangible assets - Investment Management contracts 27,056 Intangible assets - Segregated clients 16,010 Deferred tax liabilities (10,412) Goodwill 11,009 Net assets acquired 54,060 On 1 April 2022 the Company acquired the entire issued share capital of Majedie Asset Management Limited (“Majedie”) for a cost of £54.060 million. The consideration was funded by an issue of 3,683,220 shares raising £48.175 million. The acquisition adds a further highly regarded investment team and distinct investment process, the Global Fundamental team; and provides broader distribution and growth opportunities in our institutional and investment trust business. The goodwill of £11.009 million relating to from the acquisition, allocated to the Global Fundamental fund management team CGU, is attributable to the new business relating to investment management contracts and segregated clients and the expected economies of scale, growth opportunities and efficiencies from combining the operations of Majedie with the Group. Reorganisation costs of £8.459 million have been charged to administrative expenses in the consolidated statement of the comprehensive income for the period to 31 March 2023. These costs have been included within note 7. Two further tranches of deferred consideration are payable subject to conditions: 1. Performance fee consideration – a maximum of 538,674 shares in Liontrust is payable if performance fee targets are met by 31 March 2025 subject to an AUM target at 31 March 2023. At 31 March 2023 the AuMA target had not been met and therefore the performance fee consideration is not payable. 2. Client consideration – a maximum of £20 million payable subject to Liontrust being appointed as investment manager by a specified client before 31 March 2023. The expected value of this consideration, based on a probability weighted expected returns model, is £1.849 million. As at 31 March 2023 the Client had not appointed Liontrust as investment manager and therefore the Client consideration is not payable. The fair value assigned to this consideration has therefore been written back resulting in income of £1.849 million in the year to 31 March 2023. The identifiable assets acquired are accounted for at fair value. The fair value of intangible assets acquired was calculated using a Multiple Periods Excess Earnings Model (‘MPEEM’) which takes into account the future expected revenue and costs linked to the assets acquired. Due to the different characteristics of fund management contracts and segregated client relationships the related intangible assets were modelled separately. The MPEEM model assisted the Group in arriving at the valuation of £27,056 million for the fund management contracts and £16.010 million for segregated client relationships which management believe is appropriate. The material accounting judgements used by management in the MPEEM included the useful economic life of the assets (10 years for funds, 5 years for segregated), the discount rate (12.7%), and net AuMA growth rate (effective, -1.9% and -8.5% for funds and segregated accounts respectively). 171 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() Neptune On 1 October 2019 (“Completion Date”) the Company acquired the entire issued share capital of Neptune Investment Management Limited. The Share Purchase Agreement in relation to the acquisition provided that an earnout of 661,813 Liontrust Shares (“Tranche Two Consideration Shares”) was payable if the AuMA managed by the acquired team exceeded £4bn on the 3rd anniversary of the Completion Date. The seller could extend this term if the MSCI World Index fell by 10% or more in the preceding 12 months prior to the 3rd anniversary of the completion date. As at 1 October 2022 the MSCI World Index had fallen by more than 10% and therefore the earnout provision was retested at 1 October 2023. At 1 October 2023 the AuMA of the acquired team did not meet the threshold and the Tranche Two Consideration was not payable. 14 GOODWILL Goodwill is allocated to the CGU to which it relates as the underlying funds acquired in each business acquisition are clearly identifiable to the ongoing investment team that is managing them. For all four CGUs, an assessment was made in relation to impairment of the goodwill where the recoverable amount, based on a value in use, was calculated using an earnings model which used key assumptions such as discount rate and net AuMA growth rate. In addition, the model uses a terminal growth rate of 2%. The projected cash flows used within the goodwill model is based on a 5-year period where the terminal growth is used for years beyond that, and forecasts have been approved by senior management. The discount rate was derived from the Group’s weighted average cost of capital and takes into account the weighted average cost of capital of other market participants. The net AuMA growth rate is a combination of three variables: AUM market growth rate, fund flows and fund attrition. The net AuMA growth rate is determined by using historical actual experience and external sources to estimate future growth based on historic equities/bonds performances. In addition, the terminal growth rate is also based on external sources too and based on long term inflation expectations. See table below for details. CGU Goodwill 2024 £’000 Goodwill 2023 £’000 Discount Rate 2024 Discount Rate 2023 Terminal Growth Rate 2024 Terminal Growth Rate 2023 Net AuMA Growth Rate 2024 Net AuMA Growth Rate 2023 ATI 11,873 11,873 13.00% 13.80% 2% 2% 4.5% 7% Neptune 7,668 7,753 13.00% 13.80% 2% 2% 7.3% 5.5% Architas 7,951 7,951 13.00% 13.80% 2% 2% 0.3% 0.2% Majedie 4,618 11,009 13.00% 13.80% 2% 2% 2.2% 3.5% Total 32,110 38,586 For ATI and Neptune, there were no indicators of impairment. There were indicators of impairment for both Architas and Majedie as a result of an increase in net outflows which led to actual revenues being lower than originally forecast. Based on key assumptions in the table, the Architas recoverable amount was £35.2m and the headroom above the carrying amount of the CGU was £5.5m. Majedie recoverable amount was £10.6m. For Majedie, the value of the Goodwill have been tested for FY24 which has resulted in a higher carrying value than value in use hence an impairment of £6.389 million (2023: £nil). Sensitivity analysis was carried out on the Architas and Majedie Goodwill models to assess the impact of reasonable plausible downside scenarios on the discount rate and the AuMA effective growth rate assumptions. In relation to Architas sensitivity, changing the discount rate from 13% to 13.4% and net AuMA growth rate from 0.3% to -1.1% would lead to a reduction of £1,231k and £1,660k respectively on the headroom and no impairment to Goodwill for both changes. The cumulative impact of the change in discount rate and decrease net AuMA growth rate would lead to decrease in headroom by £2,816k. For Majedie Goodwill (Funds and Segregated Clients combined) the discount rate being changed from 13% to 13.4% and the net AuMA growth rate from 2.2% to 0.8% leads to the further impairment of Goodwill by £329k and £305k respectively. The cumulative impact of the change in discount rate and decrease net AuMA growth rate leads to a £614k increase in impairment. Within our reasonable plausible downside, we do not consider the impact of investor sentiment on ESG factors from the climate targets detailed within the responsible capitalism on page 62 to be a material risk in the medium and long term to our recoverable amount and therefore have not considered these risks in the reasonable plausible downside scenarios. 172 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() 31-Mar-23 £’000 Goodwill impairment recognised in the period £’000 31-Mar-24 £’000 ATI - Sustainable investment team 11,873 – 11,873 Neptune – Global Equity team\* 7,753 – 7,668 Architas – Multi-Asset team 7,951 – 7,951 Majedie – Global Fundamental team 11,009 (6,391) 4,618 38,586 (6,391 ) 32,110 \*There is a movement of £85k which does not relate to an impairment of Goodwill but a fair value adjustment of the overall Goodwill value. 15 INTANGIBLE ASSETS The Group recognises five intangible assets relating to investment management contracts and segregated clients arising on business acquisitions. An assessment is made at each reporting date, on a standalone basis for each intangible asset, as to whether there is any indication that an asset in use may be impaired. If any such indication exists and the carrying value exceeds the estimated recoverable amount at the time, the assets are written down to their recoverable amount. The recoverable amount is measured as the greater of fair value less costs to sell and value in use. With the exception of new business AUM and the terminal growth rate, the standalone intangible asset models use the same inputs as those used in assessing the recoverability of the CGUs, outlined in note 14. The assessment made at 31 March 2024 did not indicate any indicators of impairment in the value of the ATI or Neptune intangible assets. For Majedie, indicators of impairment were identified for both the investment management contracts and segregated clients intangible assets as at 31 March 2024 due to higher than expected fund outflows leading to actual revenues being lower than originally forecast. The value of the intangible assets have therefore been tested for FY24 which has resulted in a higher carrying value than value in use hence an impairment of the Majedie investment management contract intangible of £16.537 million (2023: £4.016 million) and Majedie Segregated Clients intangible of £6.828 million (2023: £nil million). In 2023, Majedie investment management contract was impaired due to higher than expected fund outflows and negative market returns leading to actual revenues being lower than originally forecast. For Architas, indicators of impairment were identified due to higher than expected fund outflows leading to actual revenue being lower than originally forecast. The value of the intangible assets have therefore been tested for at half year and end of FY24 which at half year has resulted in a higher carrying value than value in use hence an impairment of the Architas investment management contract intangible of £7.311 million (2023: £8.800 million). There was no further impairment and headroom increased during year end due to changes in certain inputs including lower discount rate and higher market growth rates however, no impairment reversal has been recognised due to continued net outflows from the underlying funds. Management continues to monitor the performance of the asset. In 2023, Architas was impaired due to higher than expected fund outflows and negative market returns leading to actual revenues being lower than originally forecast. As at 31 March 2024 Description Carrying value year ended 31-Mar-24 Carrying value year ended 31-Mar-23 Remaining amortisation period As at 31-Mar-24 Remaining amortisation period year ended 31-Mar-23 Investment management contracts acquired as part of ATI acquisition 3,600 4,800 3 Years 4 Years Investment management contracts acquired as part of Neptune acquisition 17,185 19,682 5½ Years 6½ Years Investment management contracts acquired as part of Architas acquisition 21,674 32,793 6½ Years 7½ Years Investment management contracts acquired as part of Majedie acquisition - Funds 2,476 20,546 8 Years 9 Years Investment management contracts acquired as part of Majedie acquisition - Segregated 3,537 12,808 3 Years 4 Years 173 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() Investment management contracts 2024 £’000 Segregated clients 2024 £’000 Total 2024 £’000 Investment management contracts 2023 £’000 Segregated clients 2023 £’000 Total Investment management contracts 2023 £’000 Cost Balance as at 1 April 142,169 16,010 158,179 115,113 – 115,113 Additions: - Additions arising on acquisition of Majedie – – – 27,056 16,010 43,066 Balance as at 31 March 142,169 16,010 158,179 142,169 16,010 158,179 Accumulated amortisation and impairment Balance as at 1 April 64,348 3,202 67,550 39,942 - 39,942 Amortisation for the year 9,037 2,443 11,480 11,590 3,202 14,792 Impairment for the year 23,849 6,828 30,677 12,816 - 12,816 Balance as at 31 March 97,234 12,473 109,707 64,348 3,202 67,550 Net Book Value £’000 As at 31 March 2024 48,472 As at 31 March 2023 90,629 As at 31 March 2022 75,171 Sensitivity analysis was carried out on the Architas and Majedie models to assess the impact of reasonable plausible downside scenarios on both the discount rate, and the net AuMA growth rate assumptions. In relation to Architas sensitivity, changing the discount rate from 13% to 13.4% leads to £266k reduction in headroom but no impairment and changing the net AuMA growth rate from 0.6% to -0.8% leads to £1,081k reduction in headroom but no impairment. The cumulative impact of the change in discount rate and decrease net AuMA growth rate leads to £1,331k reduction in headroom but no impairment. For Majedie the discount rate sensitivity applied is consistent with Architas (13% to 13.4%) leading to an increase in impairment of £49k. Decreasing the net AuMA growth rate from 3.1% to 2.2% for the Majedie would lead to an increase in impairment of £206k. The cumulative impact of the change in discount rate and decrease net AuMA growth rate would lead to an increase in impairment of £252k. Within our reasonable plausible downside, we do not consider the impact of investor sentiment on ESG factors from the climate targets detailed within the responsible capitalism on page 62 to 63 to be a material risk in the medium and long term to our recoverable amount and therefore have not considered these risks in the reasonable plausible downside scenarios. 16 PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment is made up of leasehold improvements, office equipment, computer equipment and ROU (ROU) assets. Property, plant and equipment is stated at cost, less accumulated depreciation and any provision for impairment. Depreciation is calculated on a straight-line basis to allocate the cost of each asset over its estimated useful life: Leasehold improvements lower of the estimated useful and the remaining lease term on straight-line basis Office equipment 3-10 years on a straight-line basis Computer equipment 3 years on a straight-line basis ROU assets lease term on a straight-line basis 174 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() The useful economic lives and residual values are reviewed at each financial period end and adjusted if appropriate. Specific items are derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising on the disposal of an asset, calculated as the difference between the net disposal proceeds and the carrying amount of the item, is included in the income statement in the year the item is sold or retired. Year to 31 March 2024 ROU Assets £’000 Leasehold Improvements £’000 Office Equipment £’000 Computer Equipment £’000 Total £’000 Cost As at 31 March 2023 9,243 2,022 972 2,120 14,357 Additions 2,194 1 – 140 2,334 Disposals – (1,729) (743) (1,353) (3,825) As at 31 March 2024 11,437 294 229 907 12,867 Accumulated depreciation As at 31 March 2023 6,493 1,898 894 1,694 10,979 Charge for the year 1,634 54 35 252 1,975 Disposals – (1,710) (743) (1,353) (3,806) As at 31 March 2024 8,127 242 186 593 9,148 Net Book Value As at 31 March 2024 3,310 52 43 314 3,719 As at 31 March 2023 2,750 124 78 426 3,378 Year to 31 March 2023 ROU Assets £’000 Leasehold Improvements £’000 Office Equipment £’000 Computer Equipment £’000 Total £’000 Cost As at 31 March 2022 7,962 1,107 557 1,128 10,754 Majedie acquisition 1,281 899 403 762 3,345 Additions – 16 12 230 258 As at 31 March 2023 9,243 2,022 972 2,120 14,357 Accumulated depreciation As at 31 March 2022 4,997 924 449 726 7,096 Majedie acquisition 495 869 368 755 2,487 Charge for the year 1,001 105 77 213 1,396 As at 31 March 2023 6,493 1,898 894 1,694 10,979 Net Book Value As at 31 March 2023 2,750 124 78 426 3,378 As at 31 March 2022 4,717 261 72 207 5,257 Depreciation has been included in the Consolidated Statement of Comprehensive Income within administration expenses. 175 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() Lease liability As at 31-Mar-24 £’000 As at 31-Mar-23 £’000 Opening balance 3,588 3,667 Additions 1,955 1,306 5,543 4,973 Rent & interest charge for the year (1,432) (1,385) Closing balance 4,111 3,588 Measurement of lease liability Lease liability As at 31-Mar-24 £’000 As at 31-Mar-23 £’000 Current 1,573 1,420 Non-current 2,538 2,168 4,111 3,588 The undiscounted cash payments that will be made until end of the lease term are as follows: £’000 Within 1 year 1,652 Between 2 to 5 years 2,378 More than 5 years 266 Measurement of ROU asset ROU asset As at 31-Mar-24 £’000 As at 31-Mar-23 £’000 Office space 3,310 2,750 3,310 2,750 Depreciation on ROU asset 1,634 1,001 Finance costs 67 83 Cash outflow for leases for the year 1,525 1,328 Additional profit or loss and cash flow information The Group did not sublease any office premises during the current financial year. Sale and leaseback transactions There have been no sale and leaseback transactions in the current financial year. 176 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() 17 TRADE AND OTHER RECEIVABLES As at 31-Mar-24 £’000 As at 31-Mar-23 £’000 Trade receivables - Fees receivable 19,465 20,732 - Unit trust sales and cancellations 201,748 212,001 Prepayments 8,365 8,949 Corporation tax receivable 8 – 229,586 241,682 All financial assets listed above are non-interest bearing. The carrying amount of these non-interest bearing trade and other receivables approximates their fair value. As at 31 March 2024, trade receivables of £nil (2023: £nil) were past due but not impaired. ECLs are immaterial. 18 FINANCIAL ASSETS The Group holds financial assets that have been categorised within one of three levels using a fair value hierarchy that reflects the significance of the inputs into measuring the fair value. These levels are based on the degree to which the fair value is observable and are defined as follows: • Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets and liabilities; • Level 2 fair value measurements are those derived from inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); • Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data. As at the balance sheet date all financial assets are categorised as Level 1. Under IFRS9 all financial assets are categorised as Assets held at fair value through profit and loss. The Group’s financial assets represent shares in the GF Global Strategic Equity Fund, GF European Smaller Companies Fund, GF European Strategic Equity Fund and GF UK Growth Fund (all sub-funds of Liontrust Global Funds PLC) and are valued at bid price); and units in the Liontrust Global Income Fund and The Liontrust UK Growth Fund. The gain on the fair value adjustments during the year net of tax was £202,000 (2023: 618,000). Foreign currency assets are translated at rates of exchange ruling at the balance sheet date. As at 31-Mar-24 As at 31-Mar-23 Assets held at fair value through profit and loss £’000 Assets held at fair value through profit and loss £’000 Financial assets in Level 1 UK Authorised unit trusts & UK authorised ICVCs 5,085 7,114 Ireland Open Ended Investment company 3,072 2,807 Total Financial Assets 8,157 9,921 177 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() 19 TRADE AND OTHER PAYABLES As at 31-Mar-24 £’000 As at 31-Mar-23 £’000 Current Liabilities Trade payables – unit trust repurchases and creations 202,734 211,791 Other payables including taxation and social security 2,421 1,422 Lease liability 1,573 1,420 DBVAP liability 2,103 2,438 Other payables 1 32,532 38,389 241,363 255,460 1 Other payables includes fund expenses £3,847k (2023:£nil), management fee rebate £1,933k (2023: £1,845k) & bonus accruals £23,156k (2023: £36,371k). As at 31-Mar-24 £’000 As at 31-Mar-23 £’000 Non current Liabilities Lease liability 2,538 2,168 20 ORDINARY SHARES 2024 Shares 2024 £’000 2023 Shares 2023 £’000 Allotted, called up and fully paid ordinary shares of 1 pence As at 1 April 64,935,384 648 61,252,164 612 Issued during the year – – 3,683,220 36 As at 31 March 64,935,384 648 64,935,384 648 On 1 August 2023, Liontrust Asset Management PLC cancelled its share premium account in accordance with a Special Resolution that was passed on 7 July 2023 at the General Meeting. 21 RELATED UNDERTAKINGS The Companies Act 2006 requires disclosure of certain information about the Group’s related undertakings which is set out in this note. Related undertakings comprise subsidiaries, joint ventures, associates and other significant holdings. Significant holdings are where the Group either has a shareholding greater than or equal to 20% of the nominal value of any share class, or a book value greater than 20% of the Group’s assets. a) The direct related undertakings of the Company as at 31 March 2024 are listed below and opposite. Name of undertaking Country of incorporation % held Liontrust Investment Funds Limited\* UK 1 100% Liontrust Investment Services Limited\* UK 1 100% Liontrust Investment Management Limited\* UK 1 100% Liontrust Portfolio Management Limited\* UK 1 100% Liontrust International Luxembourg SA\* Luxembourg 2 100% GF European Strategic Equity Fund CF Ireland 3 100% GF European Smaller Companies CF Ireland 3 100% GF Strategic Bond Fund B5 Acc Ireland 3 100% GF SF European Corporate Bond Fund A5 Ireland 3 100% GF SF Euro Corporate Bond CF FOUNDERACC Ireland 3 100% 178 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() Name of undertaking Country of incorporation % held GF High Yield Bond Fund A5 Dist Hdg Ireland 3 100% GF Absolute Return Bond Fund A1 AC Ireland 3 100% GF SF Global Growth Fund C8 GBP ACC Ireland 3 100% GF SF Global Growth Fund A1 AC EUR Acc Ireland 3 100% GF SF Global Growth Fund A8 AC EUR Acc Ireland 3 100% GF SF Global Growth Fund C8 D GBP Acc Ireland 3 100% GF SF Global Growth Fund D1 A CHF Acc Ireland 3 100% GF SF Global Growth Fund C1 D GBP Acc Ireland 3 100% GF SF Global Growth Fund D8 CHF Acc Ireland 3 100% Liontrust GF Sustainable Future Multi Asset Global Fund D5 CHF ACC Ireland 3 100% Liontrust GF International Equity Fund Class F Acc USD Ireland 3 100% GF Sustainable Future US Growth Fd USD B5 AC Ireland 3 100% GF Sustainable Future US Growth Fd USD B1 Acc Ireland 3 100% GF Sustainable Future US Growth Fd EUR A5 Acc Ireland 3 100% LT GF Pan-European Dynamic Fund AP5 Acc EUR Ireland 3 100% LT GF Pan-European Dynamic Fund A8 Acc EUR Ireland 3 100% LT GF Pan-European Dynamic Fund A5 Acc EUR Ireland 3 100% LT GF Pan-European Dynamic Fund A1 Acc EUR Ireland 3 100% Liontrust GF Pan-European Dynamic Fund CF GBP ACC Ireland 3 100% LT GF UK Growth C8 Distribution Ireland 3 100% Liontrust Monthly Income Bond Fund Z Gross Inc UK 100% Liontrust UK Growth Fund S Acc UK 100% Liontrust UK Growth Fund S Inc UK 100% Liontrust GF International Equity Fund Class F Acc Ireland 3 72% GF US Equity Fund Class P USD Ireland 3 36% GF SF European Corporate Bond Fund A1 Ireland 3 33% GF US Equity Fund Class B USD Ireland 3 32% GF SF Global Growth Fund A8 EUR Dist Ireland 3 28% GF US Equity Fund Class B Ireland 3 24% GF Strategic Bond Fund A1 Acc Ireland 3 21% b) The indirect related undertakings of the Company as at 31 March 2024 are listed below. Name of undertaking Country of incorporation % held Liontrust Fund Partners LLP\* UK 1 100% Liontrust Investment Partners LLP\* UK 1 100% 1 Registered office: 2 Savoy Court, London, WC2R 0EZ 2 Registered office: 18 Val Saint Croix, Luxembourg, L-1370 3 Registered office: 1 Dockland Central, Guild Street, International Financial Services Centre, Dublin 1, Ireland \*These related undertakings are consolidated per note 1c. 179 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() 22 OWN SHARES AND OPTIONS Shareholder Approval was given at the AGM in September 2023 for the grant of options under an HMRC registered Save As You Earn (“SAYE”) plan. Further, approval was given at a GM in February 2016 for the grant of options under the Liontrust Long Term Incentive Plan (the “LTIP”). The Board adopted the Liontrust Company Share Option Plan (the “CSOP”) in June 2018. The CSOP scheme is an HMRC approved company share option plan that is aimed at those employees not covered by the LTIP scheme. The options become exercisable between the 3rd and 10th anniversary of the issue date. The options granted under the SAYE, LTIP and CSOP, including to the Executive Directors, were as follows: Issue Date 1 April 2023 Options Granted Options Exercised Lapsed 31 March 2024 Exercise price Scheme 27 June 2018 54,000 – (54,000) – – Nil LTIP 12 August 2019 9,184 – – – 9,184 £7.62 CSOP 12 August 2019 5,785 – – (5,785) – Nil LTIP 12 June 2020 19,552 – – (1,504) 18,048 £13.30 CSOP 8 July 2020 190,503 – (91,063) (99,440) – Nil LTIP 23 June 2021 155,130 – – (11,847) 143,283 Nil LTIP 8 July 2021 11,462 – – (1,563) 9,899 £19.18 CSOP 23 June 2022 390,287 – – (26,595) 363,692 Nil LTIP 2 Sept 2022 50,400 – – (2,400) 48,000 £8.33 CSOP 22 June 2023 – 479,164 – (61,830) 417,334 Nil LTIP 2 August 2023 – 97,527 – – 97,527 £6.36 CSOP 1 December 2023 – 115,979 – – 115,979 £4.80 SAYE Issue Date 1 April 2022 Options Granted Options Exercised Lapsed 31 March 2023 Exercise price Scheme 22 June 2017 75,923 – (75,923) – – Nil LTIP 27 June 2018 108,000 – (54,000) – 54,000 Nil LTIP 8 April 2019 33,173 – – (33,173) – Nil Phantom 12 August 2019 283,621 – (166,207) (111,629) 5,785 Nil LTIP 12 August 2019 24,928 – (15,744) – 9,184 £7.62 CSOP 8 July 2020 190,503 – – – 190,503 Nil LTIP 12 June 2020 19,552 – – – 19,552 £13.30 CSOP 23 June 2021 155,130 – – – 155,130 Nil LTIP 8 July 2021 17,193 – – (5,731) 11,462 £19.18 CSOP 23 June 2022 – 390,287 – – 390,287 Nil LTIP 2 Sept 2022 – 51,600 – (1,200) 50,400 £8.33 CSOP 180 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() Under the Liontrust Members Long term Incentive Plan (‘mLTIP’), certain individual members have been entitled to a variable allocation in the financial year, a proportion of which is paid early and applied on the Member’s behalf in acquiring ordinary shares in the capital of LAM , which entitle such individual member to a future amount dependant on performance conditions being met. The amount of the award to the member is calculated on the basis of a percentage of fixed allocation. The amounts awarded, in terms of total number of Ordinary shares, to individual members were as follows: Issue Date 1 April 2023 Granted Exercised Lapsed 31 March 2024 Exercise price Scheme 22 June 2018 3,779 – (3,779) – – Nil mLTIP 12 August 2019 28,321 – – (28,321) – Nil mLTIP 7 July 2020 57,605 – (34,563) (23,042) – Nil mLTIP 19 July 2021 33,700 – – – 33,700 Nil mLTIP 23 June 2022 84,854 – – – 84,854 Nil mLTIP 22 June 2023 – 117,139 – – 117,139 Nil mLTIP Issue Date 1 April 2022 Granted Exercised Lapsed 31 March 2023 Exercise price Scheme 22 June 2017 228,926 – (35,652) – 193,274 Nil mLTIP 22 June 2018 7,558 – (3,779) – 3,779 Nil mLTIP 12 August 2019 94,411 – (66,090) – 28,321 Nil mLTIP 7 July 2020 57,605 – – – 57,605 Nil mLTIP 19 July 2021 33,700 – – – 33,700 Nil mLTIP 23 June 2022 – 84,854 – – 84,854 Nil mLTIP Details of the Directors’ LTIP options can be found in the Directors’ Remuneration report. At 31 March 2024, the EBT owned 1,027,873 shares (2023: 1,146,288) at a cost of £12,893,265 (2023: £13,536,517). Dividends on these shares have been waived and they are treated as cancelled for the purposes of calculating the earnings per share of the Group. As at 31 March 2024 the market value of the shares was £6,907,307 (2023: £11,715,000). 181 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() 23 SHARE BASED PAYMENTS Liontrust Asset Management PLC (“Company”, “LAM”) currently operates a number of equity-settled share-based compensation plans under which the entity receives services from employees and members as consideration for equity-linked instruments (share options share awards with vesting conditions). (a) The Company Share Option Plan (“CSOP”) permits the Company to grant share options with a strike price set at the market price at the date of issue over ordinary shares in the capital of LAM to qualifying employees. The equity settled options vest after 3 years and do not have any performance conditions attached. (b) The Employees Long Term Incentive Plan (“eLTIP”) is intended to provide long term reward, incentivise strong performance and retain Executive Directors and senior employees employed by LAM. The eLTIP issues nil-priced options with vesting, exercise and holding conditions. The equity settled options vest after 3 years subject to various performance targets detailed in the Remuneration report (see page 140). (c) The Members Long Term Incentive Plan (“mLTIP”) is intended to provide long term reward, incentivise strong performance and retain senior management executives who are members of Liontrust Investment Partners LIP (“LIP”) and Liontrust Fund Partners LLP (“LFP”). The mLTIP awards equity awards to members with vesting, exercise and holding conditions aligned to those of the eLTIP. (d) The Group operates a Save As You Earn (“SAYE”) scheme which is open to all employees with more than 3 months continuous service. This is an approved HMRC scheme and was established in October 2023. Under the SAYE, participants remaining in the Group’s employment at the end of the three years savings period are entitled to use their savings to purchase shares in the Company at a stated exercise price. Number of shares Weighted average exercise price Unvested options for the year: Outstanding at 1 April 2023 1,195,862 Granted during year 809,809 Exercised during year (183,405) – Lapsed during year (363,627) Outstanding at 31 March 2024 1,458,639 1.04 Exercisable at 31 March 2024 – – Number of shares Weighted average exercise price Unvested options for the year: Outstanding at 1 April 2022 1,126,620 Granted during year 526,741 Exercised during year (417,395) 0.29 Lapsed during year (40,104) Outstanding at 31 March 2023 1,195,862 0.81 Exercisable at 31 March 2023 – – 182 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() Valuation approach The fair value of the options granted during the year were calculated at the measurement date using the valuation models: • Monte Carlo – for options subject to the absolute and relative TSR performance conditions in the eLTIP, mLTIP and Phantom Awards; and • Black Scholes – for options under the eLTIP, mLTIP and Phantom Awards with non-market based performance conditions, and for all CSOP options. The specific adjustments made to value the share options subject to the absolute TSR performance condition are as follows: 1. simulated one possible path of the daily share price (assuming nil) dividends) from the grant/measurement dates to the end of the performance period; 2. calculated the 30 day average Company share at the end of the performance period; 3. used the total Company share price calculated in step 2 to calculate the share price return over the performance period; 4. calculated the percentage of options vesting on the vesting date using the vesting criteria; 5. assessed the Company share price on vesting at the vesting date and the present value of a nil-cost option over a single share at that date, discounted at the grant/measurement date using a risk-free rate; 6. applied the percentage of options calculated in step 4 to the present value of the nil-cost call option in step5; and 7. run steps 1 to 5 for 100,000 iterations and taken the mean-average outcome to arrive at the assessed fair value per option. The specific adjustments made to value the share options subject to the relative TSR performance condition are as follows: 1. simulated one possible path of the daily Company share price and one possible path of daily index price from the grant/ measurement dates to the end of the performance period. Company and index prices are not correlated; 2. calculated the 30 day average Company share price and 30 day average index price at the end of the performance period; 3. used the total Company share price and Index price calculated in Step 2 to calculate the share price return and Index return over the Performance Period; 4. measured the difference between the Company share price return and Index return to calculate the percentage of options vesting on the vesting date using the vesting criteria; 5. assessed the Company share price on vesting at the vesting date and the present value of a nil-cost option over a single share at that date, discounted to the grant date/measurement date using a risk-free rate; 6. applied the percentage of options calculated in Step 4 to the present value of the nil-cost call option in Step 5; and 7. run steps 1 to 5 for 100,000 iterations and taken the mean-average outcome to arrive at the assessed fair value per option. Measurement date • Equity settled transactions – date the awards were granted Inputs common to both valuation models Plan Valuation date Share price at valuation date Exercise price at valuation date Option life Expected volatility Dividend yield Risk free interest rate CSOP 3 August 2023 £6.36 £6.36 3.0 years 42.66% 11.31% 4.73% eLTIP 22 June 2023 £7.53 £nil 3.0 years 42.23% 0.00% 4.91% mLTIP 22 June 2023 £7.53 £nil 3.0 years 42.23% 0.00% 4.91% SAYE 25 November 2023 £6.00 £4.80 3.0 years 38.50% 12.00% 4.52% 183 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() Fair value conclusion Plan Number of shares Weighted average fair value £ Options granted during year to 31 March 2024: CSOP 97,527 1.58 eLTIP 479,164 8.00 mLTIP 117,139 8.00 SAYE 115,979 1.08 809,809 18.66 Share incentivisation expense by plan type Year ended 31-Mar-24 £’000 Year ended 31-Mar-23 £’000 Share based payment plan – equity settled IFRS2 charge – employees 398 1,485 IFRS2 charge – members 254 431 Share based payment plan – SIP Matching Employees 462 455 Equity share options issued 1,114 2,371 Option settlement expense 155 794 Share option NIC expense 169 175 Cost of matching SIP shares 462 455 Plan administration costs 229 239 2,129 4,034 24 RELATED PARTY TRANSACTIONS During the year the Group received fees from unit trusts and ICVCs under management of £166,176,739 (2023 : £203,091,000). Transactions with these funds comprised creations of £11,266,216,000 (2023 : £12,244,561,000) and liquidations of £7,109,312,921 (2023 : £12,444,476,000). Directors can invest in funds managed by the Group on commercial terms that are no more favourable than those available to staff in general. As at 31 March 2024 the Group owed the funds £202,733,732 (2023 : £211,790,000) in respect of creations and was owed £216,208,769 (2023 : £228,069,000) in respect of cancellations and fees. During the year the Group received fees from offshore funds under management of £8,911,716 (2023: £8,776,000). Transactions with these funds comprised purchases of £nil (2023 : £nil) and sales of £nil (2023: £nil). As at Total fees the Group was owed £1,231,693 (2023: £873,000) in respect of offshore fund fees. Compensation to key management personnel (Directors) is disclosed in table 1.1 of the directors in table 1.1 of the Directors’ Remuneration Report on page 121 to 122. The aggregate gains made by Directors on the exercise of share options is disclosed in the table in section 3.1 of the Directors Remuneration Report on page 130. The charge recognised in the statement of the comprehensive income in relation to Directors share options was £598,000 (2023: £497,000). Interests in structured entities IFRS 12 requires certain disclosures in respect of interests in subsidiaries, joint arrangements, associates and unconsolidated structured entities. A structured entity is defined as an entity that has been designed so that voting or similar rights are not the dominant factor in deciding who controls the entity, such as when any voting rights relate to administrative tasks only, or when the relevant activities are directed by means of contractual arrangements. The Group has assessed whether the funds it manages are structured entities and concluded that funds managed by the Group are structured entities unless substantive removal or liquidation rights exist. 184 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() The Group has interests in these funds through the receipt of management and other fees and, in certain funds, through ownership of fund units. The Group’s investments in these funds are subject to the terms and conditions of the respective fund’s offering documentation and are susceptible to market price risk. The investments are included in financial assets at fair value through profit or loss in the balance sheet. Where the Group has no equity holding in a fund it manages, the investment risk is borne by the external investors and therefore the Group’s maximum exposure to loss relates to future fees and any uncollected fees at the balance sheet date. Where the Group does have an equity holding, the maximum exposure to loss constitutes the future and uncollected management fees plus the fair value of the Group’s investment in that fund. Number of funds Net AuMA of funds £bn Financial assets at FVTPL £m Fees received in the year £m Fees receivable £m as at 31 March 2024 70 24.4 8.2 166 16.2 as at 31 March 2023 74 25.7 9.9 204 16.1 25 CONTINGENT ASSETS AND LIABILITIES The Group can earn performance fees on some of the segregated and fund accounts that it manages. In some cases a proportion of the fee earned is deferred until the next performance fee is payable or offset against future underperformance on that account. As there is no certainty that such deferred fees will be collectable in future years, the Group’s accounting policy is to include performance fees in income only when they become due and collectable and therefore the element (if any) deferred beyond 31 March 2024 has not been recognised in the results for the year. 26 POST BALANCE SHEET EVENT There were no events after the reporting period that require disclosure in these financial statements. 185 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() #### COMPANY BALANCE SHEET as at 31 March 2024 Note 31-Mar-24 £’000 31-Mar-23 £’000 Assets Non current assets Property, plant and equipment 30 3,707 3,328 Investment in subsidiary undertakings 31 177,522 177,522 Loan to Employee Benefit Trust 29 11,993 18,374 Total non current assets 193,222 199,224 Current assets Trade and other receivables 32 31,838 12,883 Financial assets 33 3,072 2,687 Deferred tax assets 891 1,165 Cash and cash equivalents 54,509 60,618 Total current assets 90,310 77,353 Liabilities Non current liabilities Lease liabilities (2,538) (2,167) Total non current liabilities (2,538) (2,167) Current liabilities Trade and other payables 34 (52,855) (55,733) Corporation tax payable (1,987) (2,318) Total current liabilities (54,842) (58,051) Net current assets 35,468 19,302 Net assets 226,152 216,359 Shareholders’ equity Ordinary shares 35 648 648 Share premium – 112,510 Capital redemption reserve 19 19 Retained earnings 225,485 103,182 Total equity 226,152 216,359 The profit after taxation for the year ended 31 March 2024 for the Company was £56.8m (year ended 31 March 2023: £66.8m profit after taxation). The notes on pages 189 to 193 form an integral part of these Company financial statements. The financial statements on pages 186 to 193 were approved and authorised for issue by the Board of Directors on 25 June 2024 and signed on its behalf by V.K. Abrol, Chief Financial Officer. Company Number 2954692 186 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() #### COMPANY CASH FLOW STATEMENT for the year ended 31 March 2024 Year ended 31-Mar-24 £’000 Year ended 31-Mar-23 £’000 Cash flows from operating activities Cash inflow from operations 36,451 19,481 Cash outflow from operations (79,505) (184) Net cash used in operations (43,054) 19,297 Interest received 1,359 204 Tax paid (8,915) (17,272) Net cash (used in)/ generated from operating activities (50,611) 2,229 Cash flows from investing activities Purchase of property and equipment (140) (253) Acquisition of Majedie – (4,037) Loan to GAM (8,900) – Loan repaid by GAM 8,900 – Gain on liquidation of Architas – 827 Loan to the EBT (1,493) (9,801) Loan repaid by the EBT 3,893 – Purchase of seeding investments (328) (2,193) Sale of Seeding investments 251 153 Dividends received from subsidiaries 90,000 101,000 Issue of shares – (1,251) Net cash generated from investing activities 92,183 84,445 Cash flows from financing activities Payment of lease liabilities (1,525) (1,272) Dividends paid (46,156) (46,070) Net cash used in from financing activities (47,681) (47,342) Net (decrease)/increase in cash and cash equivalents\* (6,109) 39,332 Opening cash and cash equivalents\* 60,618 21,286 Closing cash and cash equivalents\* 54,509 60,618 \*Cash and cash equivalents consist only of cash balances. The notes on pages 189 to 193 form an integral part of these Company financial statements. 187 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() #### COMPANY STATEMENT OF CHANGES IN EQUITY for the year ended 31 March 2024 Ordinary shares £ ‘000 Share premium £ ‘000 Capital redemption £ ‘000 Retained earnings £ ‘000 Total Equity £ ‘000 Balance at 1 April 2023 brought forward 648 112,510 19 103,182 216,359 Profit for the year – – – 56,819 56,819 Dividends paid – – – (46,156) (46,156) Cancellation of share premium account – (112,510) – 112,510 – Equity share options issued – – – 412 412 Sale of own shares – – – (1,282) (1,282) Balance at 31 March 2023 648 – 19 225,485 226,152 #### COMPANY STATEMENT OF CHANGES IN EQUITY for the year ended 31 March 2023 Ordinary shares £ ‘000 Share premium £ ‘000 Capital redemption £ ‘000 Retained earnings £ ‘000 Total Equity £ ‘000 Balance at 1 April 2022 brought forward 612 64,370 19 82,772 147,773 Profit for the year – – – 66,760 66,760 Dividends paid – – – (46,070) (46,070) Shares issued 36 48,140 – – 48,176 Sale of own shares – – – (1,765) (1,765) Equity share options issued – – – 1,485 1,485 Balance at 31 March 2023 648 112,510 19 103,182 216,359 The notes on pages 189 to 193 form an integral part of these Company financial statements. 188 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() 27 SIGNIFICANT ACCOUNTING POLICIES The company financial statements have been prepared in accordance with UK-adopted International Financial Reporting Standards (IFRS) and those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared on the going concern basis under the historical cost convention. The principle accounting policies are the same as those set out in note 1. Under section s408 of the Companies Act 2006 the Company is exempt from the requirement to present its own statement of comprehensive income. Investment in subsidiaries are stated at cost less, where appropriate, provisions for impairment. Notes 27 to 29 reflect the information for the Company. 28 FINANCIAL RISK MANAGEMENT The Company’s activities expose it to a variety of financial risks: market risk (including price risk, cash flow interest rate risk and foreign exchange risk), credit risk, capital risk and liquidity risk. The Company is covered by the Group’s overall risk management programme. The risk management policies are the same as those set out in note 2 and elsewhere in the report and financial statements. The specific risks affecting the Company are as follows: Market risk The investments in the sub-funds of Liontrust Global Funds PLC and Liontrust Global Fundamental PLC are valued on a daily basis at mid price. The investments are held at fair value and any gain or loss in the value of the shares held would be taken to unrealised gain on financial assets.. Management consider, based on historic information, that a sensitivity rate of 10% is appropriate. Based on the holdings in the Liontrust Global Funds at the balance sheet date a price movement of 10% would result in a movement in the value of the investment of £307,000 (2023: £265,000). Cash flow interest rate risk The Company holds cash on deposit. The interest on these balances is based on floating rates and fixed rates. The Company monitors its exposure to interest rate movements and may decide to adjust the balance between deposits on fixed or floating interest rates, or adjust the level of deposits. Following a review of sensitivity based on average cash holdings during the year a 1% increase or decrease in the interest rate will cause a £487,000 increase or decrease in interest receivable (2023: £265,000). In addition to the risks covered by the Group risk management polices. The Company is subject to some specific risks relating to its interaction with other Group companies. The company reviews its balances due to and from other Group companies on a regular basis. Prudent liquidity risk management required the maintenance of sufficient cash and marketable securities. The Company monitors rolling forecasts of the it’s liquidity reserves (comprising readily realisable investments and cash and cash equivalents) on the basis of expected cash flow. The Company has analysed its financial liabilities into maturity Groupings based on the remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the table below are the contractual undiscounted cash flows. As at 31 March 2024 Within 3 months £’000 Between 3 months £’000 Over one year £’000 Payables 6,578 – 2,048 As at 31 March 2023 Within 3 months £’000 Between 3 months £’000 Over one year £’000 Payables 55,733 – 55,733 29 LOAN TO THE EMPLOYEE BENEFIT TRUST The company is the sponsor of Liontrust Asset Management Employee Trust (the ‘Trust’). The value of the loan to the EBT is treated as a financial instrument held at fair value through profit and loss. An annual review was carried out under the appropriate accounting standards and the value of the loan to the EBT was calculated at £11,993,000 (2023: £18,374,000). The current value of the shares in the trust are disclosed in Note 22. 189 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() 30 PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment is made up of leasehold improvements, office equipment, computer equipment and right-of-use (ROU) assets. Property, plant and equipment is stated at cost, less accumulated depreciation and any provision for impairment. Depreciation is calculated on a straight-line basis to allocate the cost of each asset over its estimated useful life: Leasehold improvements Lower of the estimated useful and the remaining lease term on straight-line basis Office equipment 3- 10 years Computer equipment 3 years ROU assets Lease term on a straight-line basis The useful economic lives and residual values are reviewed at each financial period end and adjusted if appropriate. Specific items are derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising on the disposal of an asset, calculated as the difference between the net disposal proceeds and the carrying amount of the item, is included in the income statement in the year the item is sold or retired. Year to 31 March 2024 ROU Assets £’000 Leasehold Improvements £’000 Office Equipment £’000 Computer Equipment £’000 Total £’000 Cost As at 1 April 2023 9,238 1,124 549 1,350 12,261 Additions 2,194 1 – 139 2,334 Disposals – (830) (336) (591) (1,757) As at 31 March 2024 11,432 295 213 898 12,838 Accumulated depreciation As at 1 April 2023 6,488 1,018 489 938 8,933 Charge for the year 1,634 45 2 8 1,689 Disposals – (821) (311) (359) (1,491) As at 31 March 2024 8,122 242 180 587 9,131 Net Book Value As at 31 March 2024 3,310 53 33 312 3,707 As at 31 March 2023 2,750 106 60 412 3,328 Year to 31 March 2023 ROU Assets £’000 Leasehold Improvements £’000 Office Equipment £’000 Computer Equipment £’000 Total £’000 Cost As at 31 March 2022 7,957 1,107 542 1,120 10,726 Additions\* 1,281 17 7 230 1,535 As at 31 March 2023 9,238 1,124 549 1,350 12,261 Accumulated depreciation As at 31 March 2022 4,992 924 447 725 7,088 Charge for the year\* 1,496 94 42 213 1,845 As at 31 March 2023 6,488 1,018 489 938 8,933 \*On 1 April 2022 the Group acquired the fixed assets of Majedie Asset Management Limited Net Book Value As at 31 March 2023 2,750 106 60 412 3,328 As at 31 March 2022 2,965 183 95 395 3,638 Depreciation has been included in the Consolidated Statement of Comprehensive Income within administration expenses. 190 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() Lease liability As at 31-Mar-24 £’000 As at 31-Mar-23 £’000 Current 1,573 1,421 Non-current 2,538 2,167 4,111 3,588 The undiscounted cash payments that will be made until end of the lease term are as follows: £’000 Within 1 year 1652 Between 2 to 5 years 2378 More than 5 years 266 Measurement of ROU asset ROU asset As at 31-Mar-24 £’000 As at 31-Mar-23 £’000 Office space 3,310 2750 3,310 2,750 Depreciation on ROU asset 1,634 1,496 Finance costs 67 142 Cash outflow for leases for the year 1,525 1,272 Additional profit or loss and cash flow information The Group did not sublease any office premises during the current financial year. Sale and leaseback transactions There have been no sale and leaseback transactions in the current financial year. 191 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() 31 INVESTMENT IN SUBSIDIARY UNDERTAKINGS The Company’s investment in subsidiary undertakings represents 100% interests (unless otherwise stated) in the ordinary shares, capital, voting rights (unless stated otherwise) of Liontrust Investment Funds Limited and Liontrust Investment Services Limited, both registered in England whose principal activity is as operating companies for the Group’s investment management LLP’s and Liontrust Investment Solutions Limited, whose principal activity is investment management. all subsidiary undertakings have the same accounting date as the parent company. Full details of the Company’s subsidiary undertakings can be found on page 89. Management identified indicators of impairment, however based on management’s assessment there was no impairment required. 2024 £’000 2023 £’000 Balance at 1 April 177,522 142,902 Additions during the year – 55,311 Reductions during the year – (20,691) Balance at 31 March 177,522 177,522 During the year ended 31 March 2023, the Company liquidated two wholly-owned subsidiaries and accordingly has fully impaired the carrying value of these subsidiaries in the prior year. 32 TRADE AND OTHER RECEIVABLES 31-Mar-24 £’000 31-Mar-23 £’000 Receivables due from subsidiary undertakings 30,615 12,248 Prepayments and accrued income 1,223 635 31,838 12,883 Amounts due from subsidiary undertakings are non-interest bearing and are repayable on demand. The carrying amount of these non-interest bearing trade and other receivables approximates their fair value. 33 FINANCIAL ASSETS The Company’s financial assets held as fair value through profit or loss represent shares in the sub funds of the Liontrust Global Fund PLC and are valued at mid price. The assets are all categorized as Level 1 in line with the categorisation detailed in note 16. 31-Mar-24 31-Mar-23 Financial assets Assets held at fair value through profit and loss £’000 Assets held at fair value through profit and loss £’000 Ireland Open Ended Investment Company 3,072 2,687 3,072 2,687 192 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() 34 TRADE AND OTHER PAYABLES Current payables 2024 £’000 2023 £’000 Other payables including taxation and social security 1,338 834 Payables due to subsidiary undertakings 1 43,968 45,343 Lease liability 1,573 1,421 Other payables 5,976 8,135 52,855 55,733 Non current payables Lease liability 2,538 2,167 2,538 2,167 Amounts due to subsidiary undertakings above are non-interest bearing and repayable on demand. The carrying amount of these non-interest bearing trade and other payables approximates their fair value. 1 In the normal course of business the Company will receive and reimburse amounts for services provided to, and received from, Group entities. 35 ORDINARY SHARES 2024 Shares 2024 £’000 2023 Shares 2023 £’000 Allotted, called up and fully paid shares of 1 pence As at 1 April 64,935,384 648 61,252,164 612 Issued during the year – – 3,683,220 36 As at 31 March 64,935,384 648 64,935,384 648 36 RELATED PARTY TRANSACTIONS As at 31 March 2024 the Company was owed the following intercompany balances to: Liontrust Investment Partners LLP – £nil (2023 : £45,343,000), this amount arose from Group operations. Liontrust Investment Funds Limited – £2,025,774 (2023 : £nil), this amount arose from Group operations. Liontrust Fund Partners LLP – £28,589,677 (2023 : £nil), this amount arose from Group operations. As at 31 March 2024 the Company owed the following intercompany balances by: Liontrust Fund Partners LLP – £nil (2023 : £8,043,000) these amounts arose from Group operations. Liontrust Investment Fund Partners LLP – £23,791,670 (2023 : £8,727,000) these amounts arose from Group operations. Liontrust Investment Management Limited – £1,779,553 (2023 : £2,000,000) these amounts arose from Group operations. Liontrust Portfolio Management Limited – £12,624,398 (2023 : £141,000) these amount arose from Group operations. Liontrust Investment Services Limited – £5,687,698 (2023: £nil) these amounts arose from Group operations. Liontrust International Luxembourg SA – £84,714 (2023: £nil) these amounts arose from Group operations. 37 AUDIT FEES Amounts receivable by the Company’s auditor and its associates, other than the audit of the Company’s financial statements, have not been disclosed as the information is required instead to be disclosed on a consolidation basis in the consolidated financial statements (note 6). 193 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() #### INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF #### LIONTRUST ASSET MANAGEMENT PLC 1. OUR OPINION IS UNMODIFIED We have audited the financial statements of Liontrust Asset Management PLC (“the Company”) for the year ended 31 March 2024 which comprise of the Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Consolidated Cash Flow Statement, Consolidated Statement of Changes in Equity, Company Balance Sheet, Company Cash Flow Statement and Company Statement of Changes in Equity, and the related notes, including the accounting policies in note 1 and 27. In our opinion: • the financial statements give a true and fair view of the state of the Group’s and of the parent Company’s affairs as at 31 March 2024 and of the Group’s loss for the year then ended; • the Group financial statements have been properly prepared in accordance with UK-adopted international accounting standards; • the parent Company financial statements have been properly prepared in accordance with UK-adopted international accounting standards and as applied in accordance with the provisions of the Companies Act 2006; and • the financial statements have been prepared in accordance with the requirements of the Companies Act 2006. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities are described below. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion. Our audit opinion is consistent with our report to the audit and risk committee. We were first appointed as auditor by the directors the on 4 November 2020. The period of total uninterrupted engagement is for the four financial years ended 31 March 2024. We have fulfilled our ethical responsibilities under, and we remain independent of the Group in accordance with, UK ethical requirements including the FRC Ethical Standard as applied to listed public interest entities. No non-audit services prohibited by that standard were provided. Overview Materiality: Group financial statements as a whole £2.9m (2023: £3.5m) 5.3% (2023: 5.0%) of normalised profit before tax Coverage 99% (2023: 88%) of group profit before tax Key audit matters vs 2023 Recurring risk (Group) Recoverability of Architas and Majedie Goodwill and Intangibles Assets Recurring risk (Parent Company) Recoverability of parent Company’s investment in subsidiary undertakings 2.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. 194 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() The risk Our response Recoverability of Architas and Majedie Goodwill and Intangible Assets (Architas Goodwill £7.95 million; 2023: £7.95 million; Architas Intangible Asset £21.67 million; 2023: £32.80 million) Architas Intangible Asset impairment £7.31million (2023: £8.80million) (Majedie Goodwill £4.62 million; 2023: £11.0 million; Majedie Intangible Assets £6.01 million 2023: £33.40 million ) Majedie Intangible Assets impairment £23.37 million (2023: £4.02million) Majedie Goodwill impairment £6.39 million (2023: nil) Refer to page 104 (Audit and Risk Committee Report,) page 153 (accounting policy) and pages 172–174 (financial disclosures). Forecast based assessment: The Group’s intangible assets include investment management contracts and customer relationships for segregated mandates recognised as a result of the acquisition of Architas Multi-Manager Limited and Architas Advisory Services Limited (together “Architas”) in October 2020 and Majedie Asset Management Limited (“Majedie”) on 1 April 2022, together with goodwill arising on these acquisitions. Reductions in Assets under Management and Advice “AuMA” which impact revenues has led to a risk of recoverability of the Architas and Majedie goodwill and was identified as an impairment trigger for the intangible assets and accordingly an impairment review was undertaken. The estimated recoverable amount is subjective due to the inherent uncertainty involved in forecasting and discounting future cash flows. The key assumptions are the discount rate and AuMA growth rates for both goodwill and intangible assets. The effect of these matters is that, as part of our risk assessment for audit planning purposes, we determined that the value in use of these intangible assets and goodwill had a high degree of estimation uncertainty; with a potential range of reasonable outcomes greater than our materiality for the financial statements as a whole and possibly many times that amount. In conducting our final audit work we reassessed the degree of estimation uncertainty at the balance sheet date over the post- impairment carrying amounts to be less than that of materiality. The financial statements (note 14 and 15) disclose the sensitivities estimated by the Group. We performed the tests below rather than seeking to rely on any of the Group’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 procedures included: Our valuation expertise: We critically assessed the Group’s key assumptions of discount rate and AuMA growth rates with reference to historical experience and market comparable data obtained publicly or through internally derived data. With the assistance of our own valuation specialists, we compared the Group’s discount rate assumption with our own expected range based on comparable company information. Sensitivity analysis: We challenged the Group’s sensitivity analysis and performed our own sensitivity analysis, which included assessing the effect of possible changes in discount rate and AuMA growth rates on the recoverable amount of intangible assets and goodwill. Assessing transparency: We assessed whether the Group’s disclosures about the sensitivity of the outcome of the impairment assessment to changes in key assumptions reflected the risks inherent in the recoverable amount of intangible assets and goodwill. Our findings We found the directors’ initial estimate of the recoverable amount of the Architas and Majedie intangible assets and goodwill to be outside the range we consider acceptable. As a result the directors revised their estimate of the recoverable amount and then used this revised estimate for the purpose of calculating the impairment charge on the Architas and Majedie intangible assets and the Majedie goodwill now made in notes 14 and 15 (2023: same findings). Following revision, we found the Group’s carrying value of Majedie and Architas intangible assets and goodwill and the related impairment charges to Majedie and Architas intangible and Majedie goodwill to be balanced with proportionate disclosure (2023: balanced with proportionate disclosure.) 195 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() The risk Our response Recoverability of parent Company’s investment in subsidiary undertakings (Investment in subsidiary undertakings £177.5 million; 2023: £177.5 million) Refer to page 189 (accounting policy) and page 192 (financial disclosures) Low risk, high value The carrying amount of the parent Company’s investment in subsidiary undertakings represents 63% (2023: 62%) of the parent Company’s total assets. Their recoverability is not at a high risk of significant misstatement or subject to significant judgement. However due to their materiality in the context of the parent Company financial statements, this is considered to be the area that had the greatest effect on our overall parent Company audit. We performed the tests below rather than seeking to rely on any of 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 procedures included: Tests of detail: We compared the carrying amount of 100% of investments with the relevant subsidiaries’ draft balance sheet to identify whether their net assets, being an approximation of their minimum recoverable amount, were in excess of their carrying amount and assessing whether those subsidiaries have historically been profit- making. We considered the work performed by the group audit team over the subsidiaries’ profits and net assets. Our findings We found the Company’s conclusion that there is no impairment of its investments in subsidiaries to be balanced (2023: balanced). We continue to perform procedures over balances relating to the Acquisition of Majedie. However as the acquisition occurred in the prior year, 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 196 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() 3.OUR APPLICATION OF MATERIALITY AND AN OVERVIEW OF THE SCOPE OF OUR AUDIT Materiality for the Group financial statements as a whole was set at £2.9m (2023: £3.5m), determined with reference to a benchmark of Group profit before tax normalised £58.3m (2023: £71.4m) Group materiality £2.9m (2023: £3.5m) Group profit before tax , normalised (2023: normalised) to exclude costs in relation to severance compensation and staff reorganisation costs in Note 7 of £3.2m (2023: £4.0m) and professional services relating to acquisitions as disclosed in Note 7 of £15.6m (2023: £8.0m) and impairments as disclosed in note 14 and 15 of £37.1m (2023: £12.8m). In 2023 we also normalised for the write back of the Majedie acquisition provision of £1.8m. Materiality represents 5.3% (2023: 5.0%) of the benchmark. Materiality for the parent Company financial statements as a whole was set at £1.3m (2023: £1.8m), determined with reference to a benchmark of parent Company total assets, of which it represents 0.46% (2023: 0.7%). In line with our audit methodology, our procedures on individual account balances and disclosures were performed to a lower threshold, performance materiality, so as to reduce to an acceptable level the risk that individually immaterial misstatements in individual account balances add up to a material amount across the financial statements as a whole. Performance materiality was set at 65% (2023: 65%) of materiality for the financial statements as a whole, which equates to £1.9m (2023: £2.3m) for the Group and £0.8m (2023: £1.2m) for the parent Company. We applied this percentage in our determination of performance materiality based on identified unadjusted differences and control deficiencies noted during the prior period. We agreed to report to the Audit and Risk Committee any corrected or uncorrected identified misstatements exceeding £0.1m (2023: £0.2m), in addition to other identified misstatements that warranted reporting on qualitative grounds. Of the Group’s 8 (2023: 8) reporting components, we subjected 3 (2023: 3) to full scope audits for group purposes. The range of materiality at 3 components (2023: 3) components was £1.3m to £2.6m (2023: £1.7m to 3.2m). The components within the scope of our work accounted for the percentages illustrated opposite. The remaining 0% (2023: 9%) of total Group revenue, 1% (2023: 12%) of Group profit before tax and 2% (2023: 6%) of total Group assets is represented by 5 (2023: 5) reporting components, none of which individually represented more than 1% (2023: 7%) of any of total Group revenue, Group profit before tax or total Group assets. For these components, we performed analysis at an aggregated group level to re- examine our assessment that there were no significant risks of material misstatement within these. The work on all of the components, including the audit of the parent Company, was performed by the Group team. The scope of the audit work performed was predominately substantive as we placed limited reliance upon the Group’s internal control over financial reporting. Group profit before tax Group total assets Grouprevenue Key: Full scope for group audit purposes 2024 Full scope for group audit purposes 2023 Residual components Group pro f it be f ore tax normalised £58.3m (2023: £71.4m) Group materiality £2.9m (2023: £3.5m) Normalised PBT Group materiality £2.9m Whole financial statements materiality (2023: £3.5m) £1.9m Whole financial statements performance materiality (2023: £2.3m) £2.6m Range of materiality at 3 components (£1.3m to £2.6m) (2023: £1.7m to £3.2m) £0.1m Misstatements reported to the audit and risk committee (2023: £0.2m) 100% (2023 91%) (2023 88%) 99% 91 100 88 99 94 98 98% (2023 94%) 197 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() 4.THE IMPACT OF CLIMATE CHANGE ON OUR AUDIT In planning our audit, we have considered the potential impact of climate change on the Group’s business and its financial statements including the impact on the portfolios it manages on behalf of investors, potential reputational risk associated with the Group’s delivery of its climate related initiatives, and greater emphasis on climate related narrative and disclosure in the annual report. As a part of our audit, we have made enquiries of management to understand the extent of the potential impact of climate change risk on the Group’s financial statements and the Group’s preparedness for this and we have performed a risk assessment. We have not assessed climate related risk to be significant to our audit or a key audit matter. We have also read the disclosure of climate related information in the front half of the annual report as set out on pages 62 to 66 and considered consistency with the financial statements and our audit knowledge. 5. GOING CONCERN The directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the Group or the parent Company or to cease their operations, and as they have concluded that the Group’s and the parent Company’s financial position means that this is realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt over their ability to continue as a going concern for at least a year from the date of approval of the financial statements (“the going concern period”). We used our knowledge of the Group, its industry and operating model, and the general economic environment to identify the inherent risks to its business model and analysed how those risks might affect the Group’s and the parent Company’s financial resources or ability to continue operations over the going concern period. The risk that we considered most likely to adversely affect the Group’s and parent Company’s available financial resources over this period was the impact of significant adverse market movements on assets under management and advice. We considered whether this risk could plausibly affect the liquidity in the going concern period by comparing severe, but plausible downside scenarios that could arise from this risk individually and collectively against the level of available financial resources indicated by the Group’s financial forecasts. Our conclusions based on this work: • we consider that the directors’ use of the going concern basis of accounting in the preparation of the financial statements 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 parent Company’s ability to continue as a going concern for the going concern period; • we have nothing material to add or draw attention to in relation to the directors’ statement in note 1 to the financial statements on the use of the going concern basis of accounting with no material uncertainties that may cast significant doubt over the Group and parent Company’s use of that basis for the going concern period, and we found the going concern disclosure in note 1 to be acceptable; and • the related statement under the Listing Rules set out on page 93 is materially consistent with the financial statements and our audit knowledge. However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a guarantee that the Group or the parent Company will continue in operation. 6.FRAUD AND BREACHES OF LAWS AND REGULATIONS – ABILITY TO DETECT Identifying and responding to risks of material misstatement due to fraud To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included: • Enquiring of directors, the Group Audit & Risk Committee, Group Internal Audit, Group Compliance, Group Risk, and inspection of policy documentation, as to the Group’s high- level policies and procedures to prevent and detect fraud, including the internal audit function, and the Group’s channel for ‘whistleblowing’, as well as whether they have knowledge of any actual, suspected or alleged fraud; • Reading Board minutes and reading and attending Group Audit & Risk Committee meetings; • Considering remuneration incentive schemes and performance targets for management and directors; and • Reading broker reports • Reading internal audit reports We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud throughout the audit. As required by auditing standards, and taking into account possible pressures to meet profit targets, we performed procedures to address the risk of management override of controls, in particular the risk that Group management may be in a position to make inappropriate accounting entries and the risk of bias in accounting estimates and judgements such as the assessment of recoverability of Majedie and Architas intangible assets and goodwill. On this audit we do not believe there is a fraud risk related to revenue recognition because there is limited management judgement involved in the valuation of AuMA and recognition of all material revenue streams. 198 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() We did not identify any additional fraud risks. We performed procedures including: • Identifying journal entries and other adjustments to test for all full scope components based on risk criteria and comparing the identified entries to supporting documentation. These included, but were not limited to, journals impacting cash and revenue balances that were identified as unusual or unexpected in our risk assessment procedures. • Assessing whether the judgements made in making significant accounting estimates are indicative of potential bias. Identifying and responding to risks of material misstatement related to compliance with laws and regulations We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience and through discussion with the directors and other management (as required by auditing standards), and from inspection of the Group’s regulatory and legal correspondence and discussed with the directors and other management the policies and procedures regarding compliance with laws and regulations. As the Group is regulated, our assessment of risks involved gaining an understanding of the control environment including the entity’s procedures for complying with regulatory requirements. We communicated identified laws and regulations throughout our team and remained alert to any indications of non- compliance throughout the audit. The potential effect of these laws and regulations on the financial statements varies considerably. Firstly, the Group is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including related companies legislation), distributable profits legislation, taxation legislation and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items. Secondly, the Group is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation. We identified the following areas as those most likely to have such an effect: the Listing Rules and Disclosure Guidance and Transparency Rules, specific areas of regulatory capital and liquidity, conduct including Client Assets, money laundering, market abuse regulations and certain aspects of company legislation recognising the financial and regulated nature of the Group’s activities and its legal form. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and other management and inspection of regulatory and legal correspondence, if any. Therefore if a breach of operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach. Context of the ability of the audit to detect fraud or breaches of law or regulation Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non- compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of fraud, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non- compliance or fraud and cannot be expected to detect non- compliance with all laws and regulations. 7. WE HAVE NOTHING TO REPORT ON THE OTHER INFORMATION IN THE ANNUAL REPORT The directors are responsible for the other information presented in the Annual Report together with the financial statements. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except as explicitly stated below, any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether, based on our financial statements audit work, the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Based solely on that work we have not identified material misstatements in the other information. Strategic report and directors’ report Based solely on our work on the other information: • we have not identified material misstatements in the strategic report and the directors’ report; • in our opinion the information given in those reports for the financial year is consistent with the financial statements; and • in our opinion those reports have been prepared in accordance with the Companies Act 2006. 199 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() Directors’ remuneration report In our opinion the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006. Disclosures of emerging and principal risks and longer-term viability We are required to perform procedures to identify whether there is a material inconsistency between the directors’ disclosures in respect of emerging and principal risks and the viability statement, and the financial statements and our audit knowledge. Based on those procedures, we have nothing material to add or draw attention to in relation to: • the directors’ confirmation within the Statement of viability page 31 that they have carried out a robust assessment of the emerging and principal risks facing the Group, including those that would threaten its business model, future performance, solvency and liquidity; • the Principle Risks and Mitigation disclosures describing these risks and how emerging risks are identified, and explaining how they are being managed and mitigated; and • the directors’ explanation in the Statement of viability of how they have assessed the prospects of the Group, over what period they have done so and why they considered that period to be appropriate, and their statement as to whether they have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment, including any related disclosures drawing attention to any necessary qualifications or assumptions. We are also required to review the Statement of viability, set out on page 31 under the Listing Rules. Based on the above procedures, we have concluded that the above disclosures are materially consistent with the financial statements and our audit knowledge. Our work is limited to assessing these matters in the context of only the knowledge acquired during our financial statements audit. As we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the absence of anything to report on these statements is not a guarantee as to the Group’s and parent Company’s longer- term viability. Corporate governance disclosures We are required to perform procedures to identify whether there is a material inconsistency between the directors’ corporate governance disclosures and the financial statements and our audit knowledge. Based on those procedures, we have concluded that each of the following is materially consistent with the financial statements and our audit knowledge: • the directors’ statement that they consider that the annual report and financial statements taken as a whole is fair, balanced and understandable, and provides the information necessary for shareholders to assess the Group’s position and performance, business model and strategy; • the section of the annual report describing the work of the Audit and Risk Committee, including the significant issues that the audit and risk committee considered in relation to the financial statements, and how these issues were addressed; and • the section of the annual report that describes the review of the effectiveness of the Group’s risk management and internal control systems. We are required to review the part of the Corporate Governance Statement relating to the Group’s compliance with the provisions of the UK Corporate Governance Code specified by the Listing Rules for our review. We have nothing to report in this respect. 8. WE HAVE NOTHING TO REPORT ON THE OTHER MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION Under the Companies Act 2006, we are required to report to you if, in our opinion: • adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or • the parent Company financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with the accounting records and returns; or • 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. 9.RESPECTIVE RESPONSIBILITIES Directors’ responsibilities As explained more fully in their statement set out on page 89, the directors are responsible for: the preparation of the financial statements including being satisfied that they give a true and fair view; 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; assessing the Group and parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and using the going concern basis of accounting unless they either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so. 200 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() Auditor’s responsibilities Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue our opinion in an auditor’s report. Reasonable assurance is a high level of assurance, but does not guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities. The Company is required to include these financial statements in an annual financial report prepared under Disclosure Guidance and Transparency Rule 4.1.17R and 4.1.18R. This auditor’s report provides no assurance over whether the annual financial report has been prepared in accordance with those requirements. 10. THE PURPOSE OF OUR AUDIT WORK AND TO WHOM WE OWE OUR RESPONSIBILITIES This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and the terms of our engagement by the Company. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report, and the further matters we are required to state to them in accordance with the terms agreed with the Company, and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members, as a body, for our audit work, for this report, or for the opinions we have formed. Jatin Patel (Senior Statutory Auditor) for and on behalf of KPMG LLP, Statutory Auditor Chartered Accountants 15 Canada Square E14 5GL 25 June 2024 #### SHAREHOLDER INFORMATION DIRECTORS AND ADVISERS Registered Office and Company number 2 Savoy Court, London WC2R 0EZ Registered in England with Company Number 02954692 Company Secretary Sally Buckmaster 2 Savoy Court London WC2R 0EZ Independent Auditor KPMG LLP 15 Canada Square, London, E14 5GL Banker Royal Bank of Scotland Plc 280 Bishopsgate London EC2M 4RB Financial Adviser and Corporate Broker Panmure Gordon & Co 40 Gracechurch St London EC3V 0BT Singer Capital Markets 1 Bartholomew Lane London EC2N 2AX Legal Advisers Macfarlanes LLP 20 Cursitor Street London EC4A ILT Simmons & Simmons LLP City Point, 1 Ropemaker Street London EC2Y 9SS Financial Calendar Year End 31 March Half Year End 30 September Results announced: Full year: June, half year: November Interim report available: December Annual Report available: July Annual General Meeting: September Share price information: The Company’s shares are quoted on the London Stock Exchange and the price appears daily in The Financial Times, (listed under ‘General Financial’). 201 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]() #### GLOSSARY OF TERMS AAF Audit and Assurance Faculty APM Alternative Performance Measure AuMA Assets under Management and Advice AuM Assets under Management BNYM The Bank of New York Mellon Board The board of directors of the Company CASS Client Money & Assets CEO Chief Executive Officer CFO Chief Financial Officer Code The UK Corporate Governance Code (2018) Company Liontrust Asset Management Plc COO Chief Operating Officer CRO Chief Risk Officer CSOP Liontrust Company Share Option Plan DBVAP Deferred Bonus and Variable Allocation Plan DE&I Diversity, Equity and Inclusion Directors The directors of the Company DRP Directors’ Remuneration Policy EBT Liontrust Asset Management Employee Benefit Trust EIT Edinburgh Investment Trust eLTIP Employee Long Term Incentive Plan EPS Earnings Per Share ERM Enterprise Risk Management ESG Environmental, Social and Governance Executive Directors The Executive Directors of the Company, John Ions and Vinay Abrol FCA Financial Conduct Authority FRC Financial Reporting Council GAM GAM Holding AG GHG Greenhouse Gases Group Liontrust Asset Management Plc and its subsidiaries 202 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ![Graphics]() HR Human Resources IA The Investment Association IAS International Accounting Standards IASB International Accounting Standards Board ICARA Internal Capital And Risk Assessment ICVC Investment Company with Variable Capital IFRS International Financial Reporting Standards KIID Key Investor Information Document LFP Liontrust Fund Partners LLP LFPPM Liontrust Fund Partners LLP Partnership Management Committee LILSA Liontrust International (Luxembourg) S.A. (renamed Liontrust Europe S.A.) LIP Liontrust Investment Partners LLP LIPPM Liontrust Investment Partners LLP Partnership Management Committee LTIP Long Term Incentive Plan Majedie Majedie Asset Management Limited mLTIP Member Long Term Incentive Plan MLRO Money Laundering Reporting Officer MPS Model Portfolio Service NED Non-executive Director NZAM Net Zero Asset Managers’ Initiative OMS Order Management System RAS Risk Appetite Statement SAYE Save As You Earn Scheme SID Senior Independent Director SIP Share Incentive Plan SM&CR Senior Managers & Certification Regime TCFD Task Force on Climate-related Financial Disclosures TSR Total Shareholder Return vCISO Liontrust’s virtual Chief Information Security Officer Workforce Advisory Forum Liontrust’s Workforce Advisory Forum 203 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT ![Graphics]()