REG - Ashmore Group Plc - Final Results <Origin Href="QuoteRef">ASHM.L</Origin> - Part 5
08/09/2015 07:01
- Part 5: For the preceding part double click ID:nRSH3435Yd
liabilities held-for-sale 11.0 - - 11.0
Third-party interests in consolidated funds 41.5 - - 41.5
Derivative financial instruments 0.3 - - 0.3
Current trade and other payables 54.1 - - 54.1
106.9 - - 106.9
At 30 June 2014
Within 1 year 1-5 years More than Total
£m £m 5 years £m
£m
Non-current liabilities held-for-sale 2.7 - - 2.7
Third-party interests in consolidated funds 13.5 - - 13.5
Current trade and other payables 69.4 - - 69.4
85.6 - - 85.6
Details on leases and other commitments are provided in note 30.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of financial instruments will fluctuate because of
changes in market
interest rates.
The principal interest rate risk is the risk that the Group will sustain a reduction in interest income through adverse
movements in interest
rates. This relates to bank deposits held in the ordinary course of business. The Group has a cash management policy which
monitors cash levels and returns within set parameters on a continuing basis.
Bank and similar deposits held at year end are shown on the consolidated balance sheet as cash and cash equivalents. The
effective interest earned on bank and similar deposits during the year is given in the table below:
Effective interest rates applicable to bank deposits
2015 2014
% %
Deposits with banks and liquidity funds 1.17 0.70
Deposits with banks and liquidity funds are repriced at intervals of less than one year.
At 30 June 2015, if interest rates over the year had been 50 basis points higher/lower with all other variables held
constant, profit before tax for the year would have been £0.7 million higher/lower (FY2013/14: £1.9 million higher/lower),
mainly as a result of higher/lower interest on cash balances. An assumption that the fair value of assets and liabilities
will not be affected by a change in interest rates was used in the model to calculate the effect on profit before tax.
In addition, the Group is indirectly exposed to interest rate risk where the Group holds seed capital investments in funds
which invest in debt securities.
Group
Foreign exchange risk
Foreign exchange risk is the risk that the fair value or future cash flows of financial instruments will fluctuate because
of changes in foreign exchange rates.
The Group's revenue is almost entirely denominated in US dollars, whilst the majority of the Group's costs are denominated
in Sterling. Consequently, the Group has an exposure to movements in the GBP:USD exchange rate. In addition, the Group
operates globally which
means that it may enter into contracts and other arrangements denominated in local currencies in various countries. The
Group also holds a number of seed capital investments which are denominated mainly in US dollars, Brazilian real and
Indonesian rupiah.
The Group's policy is to hedge a proportion of the Group's revenue by using a combination of forward foreign exchange
contracts and options for a period of up to two years forward. The Group also sells US dollars at spot rates when
opportunities arise.
The table below shows the Group's sensitivity to a 1.0% exchange movement in the US dollar, Brazilian real and Indonesian
rupiah, net of hedging activities.
2015 2014
Foreign currency sensitivity test Impact on profit Impact on equity Impact on profit Impact on equity
before tax £m before tax £m
£m £m
US dollar +/- 1% 2.4 2.6 3.2 3.2
Brazilian real +/- 1% 0.1 0.1 - 0.1
Indonesian rupiah +/-1% 0.3 0.3 0.1 0.4
Price risk
Price risk is the risk that the fair value or future cash flows of financial instruments will fluctuate because of market
changes.
Seed capital
The Group is exposed to the risk of changes in market prices in respect of seed capital investments. Such price risk is
borne by the Group directly through interests in available-for-sale and non-current asset seed capital investments or
indirectly either through line-by-line consolidation of underlying financial performance and positions held in certain
funds or potential impairments when fair values less costs to sell of seed investments held-for-sale are less than carrying
amounts. Details of seed capital investments held are given in note 20.
The Group has well defined procedures governing the appraisal, approval and monitoring of seed capital investments.
At 30 June 2015, a 5% movement in the fair value of these investments would have had a £10.4 million (FY2013/14: £9.4
million) impact
on net assets and the impact on profit before tax would have been £4.6 million (FY2013/14: £3.7 million).
Management and performance fees
The Group is also indirectly exposed to price risk in connection with the Group's management fees which are based on a
percentage of value
of AuM and fees based on performance. Movements in market prices, exchange and interest rates could cause the AuM to
fluctuate which
in turn could affect fees earned. Performance fee revenues could also be reduced depending upon market conditions.
Management and performance fees are diversified across a range of investment themes and are not measurably correlated to
any single market index in Emerging Markets. In addition, throughout Ashmore's history, the policy of having funds with
year ends staged throughout
the financial year has meant that in periods of steep market decline, some performance fees have still been recorded. The
profitability impact
is likely to be less than this, as cost mitigation actions would apply, including the reduction of the variable
compensation paid to employees.
Using the year end AuM level of US$58.9 billion and applying the year's average net management fee rate of 59bps, a 5%
movement
in AuM would have a US$17.4 million impact on management fee revenues (FY2013/14: using the year end AuM level of US$75.0
billion
and applying the year's average net management fee rate of 60bps, a 5% movement in AuM would have a US$22.5 million impact
on management fee revenues).
Hedging activities
The Group uses forward and option contracts to hedge its exposure to foreign currency risk. These hedges, which have been
assessed as effective cash flow hedges as at 30 June 2015, protect a proportion of the Group's revenue cash flows from
foreign exchange movements. The cumulative fair value of the outstanding foreign exchange hedges asset at 30 June 2015 was
£0.1 million (30 June 2014: £2.4 million foreign exchange hedges asset) and is included within the Group's derivative
financial instrument assets.
The notional and fair values of foreign exchange hedging instruments were as follows:
2015 2014
Notional amount Fair value assets/ Notional amount Fair value assets/
£m (liabilities) £m (liabilities)
£m £m
Cash flow hedges
Foreign exchange nil-cost option collars 97.0 0.1 85.9 2.4
97.0 0.1 85.9 2.4
The maturity profile of the Group's outstanding hedges is shown below.
Notional amount of option collars maturing: 2015 2014
£m £m
Within 6 months 52.0 39.8
6 - 12 months 35.0 33.3
>12 months 10.0 12.8
97.0 85.9
When hedges are assessed as effective, intrinsic value gains and losses are initially recognised in other comprehensive
income and later reclassified to comprehensive income as the corresponding hedged cash flows crystallise. Time value in
relation to the Group's hedges is excluded from being part of the hedging item and, as a result, the net unrealised loss
related to the time value of the hedges is recognised
in the consolidated statement of comprehensive income for the year.
A £1.9 million intrinsic loss (FY2013/14: £2.8 million gain) on the Group's hedges has been recognised through other
comprehensive
income and £nil intrinsic value (FY2012/13: £nil) was reclassified from equity to the statement of comprehensive income in
the year.
Included within net realised and unrealised hedging loss of £0.4 million (note 7) recognised at 30 June 2015 (£3.5 million
gain at 30 June 2014) are:
- a £0.8 million loss in respect of foreign exchange hedges covering net management fee income for the financial year
ending 30 June 2015 (FY2013/14: £1.7 million gain in respect of foreign exchange hedges covering net management fee income
for the financial year ended 30 June 2014); and
- a £0.4 million gain in respect of crystallised foreign exchange contracts (FY2013/14: £1.8 million gain).
Company
The risk management processes of the Company including those relating to the specific risk exposures covered below are
aligned with
those of the Group as a whole unless stated otherwise.
In addition, the risk definitions that apply to the Group are also relevant for the Company.
Credit risk
The Company's maximum exposure to credit risk is represented by the carrying value of its financial assets. The table below
lists financial assets subject to credit risk by credit rating:
2015 2014
£m £m
Cash and cash equivalents 114.5 249.1
Trade and other receivables 451.8 256.9
Total 566.3 506.0
The Company's cash and cash equivalents comprise short-term deposits held with banks and liquidity funds which have credit
ratings ranging from A- to A+ as at 30 June 2015 (30 June 2014: A to AAAm).
All trade and other receivables are considered to be fully recoverable and none were overdue at year end (30 June 2014:
none).
Liquidity risk
The contractual undiscounted cash flows relating to the Company's financial liabilities all fall due within one year.
Details on leases and other commitments are provided in note 30.
Company
Interest rate risk
The principal interest rate risk for the Company is that it could sustain a reduction in interest revenue from bank
deposits held in the ordinary course of business through adverse movements in interest rates.
Bank and similar deposits held at year end are shown on the Company's balance sheet as cash and cash equivalents. The
effective interest earned on bank and similar deposits during the year is given in the table below:
Effective interest rates applicable to bank deposits
2015 2014
% %
Deposits with banks and liquidity funds 1.06 0.59
Deposits with banks and liquidity funds are repriced at intervals of less than one year.
At 30 June 2015, if interest rates over the year had been 50 basis points higher/lower with all other variables held
constant, post-tax profit for the year would have been £0.3 million higher/lower (FY2013/14: £0.9 million higher/lower),
mainly as a result of higher/lower interest on cash balances. An assumption that the fair value of assets and liabilities
will not be affected by a change in interest rates was used in the model to calculate the effect on post-tax profits.
Foreign exchange risk
The Company is exposed primarily to foreign exchange risk in respect of US dollar cash balances and US dollar-denominated
intercompany balances. However, such risk is not hedged by the Company.
At 30 June 2015, if the US dollar had strengthened/weakened by 1% against Sterling with all other variables held constant,
profit before tax for the year would have decreased/increased by £2.6 million respectively (FY2013/14: decreased/increased
by £3.6 million respectively).
22) Share capital
Authorised share capital
Group and Company 2015 2015 2014 2014
Number of shares Nominal Number Nominal
value of shares value
£'000 £'000
Ordinary shares of 0.01p each 900,000,000 90 900,000,000 90
Issued share capital - allotted and fully paid
Group and Company 2015 2015 2014 2014
Number of shares Nominal Number Nominal
value of shares value
£'000 £'000
Ordinary shares of 0.01p each 712,740,804 71 712,740,804 71
All the above ordinary shares represent equity of the Company and rank pari passu in respect of participation and voting
rights.
At 30 June 2015 there were 175,000 (30 June 2014: 503,750) options in issue with contingent rights to the allotment of
ordinary shares
of 0.01p in the Company. There were also equity-settled share awards issued under the Omnibus Plan totalling 35,333,782 (30
June 2014: 29,315,890) shares that have release dates ranging from September 2015 to December 2019. Further details are
provided in note 10.
23) Own shares
The Ashmore 2004 EBT was established to act as an agent to facilitate the acquisition and holding of shares in the Company
with a view
to facilitating the recruitment and motivation of the employees. As at the year end, the EBT owned 37,889,347 (30 June
2013: 37,962,631) ordinary shares of 0.01p with a nominal value of £3,789 (30 June 2014: £3,796) and shareholders' funds
are reduced by £125.3 million
(30 June 2014: £124.6 million) in this respect. It is the intention of the Directors to make these shares available to
employees through
the share-based compensation plans. The EBT is periodically funded by the Company for these purposes.
24) Treasury shares
Treasury shares held by the Company
2015 2014
Group and Company Number £m Number £m
Ashmore Group plc ordinary shares 5,368,331 6.9 5,368,331 6.9
Reconciliation of treasury shares
2015 2014
Number Number
At the beginning and end of the year 5,368,331 5,368,331
The market value of treasury shares was £15.5 million at year end (30 June 2014: £19.9 million).
25) Trade and other payables
Group Group Company Company
2015 Restated 2015 2014
£m 2014 £m £m
£m
Current
Trade and other payables 26.7 51.6 29.7 28.6
Accruals and deferred income 27.4 35.4 2.7 3.3
Amounts due to subsidiaries - - 5.5 0.9
Total trade and other payables 54.1 87.0 37.9 32.8
26) Interests in subsidiaries
Operating subsidiaries
Movements in investments in subsidiaries during the year were as follows:
Company 2015 2014
£m £m
Cost
At the beginning and end of the year 20.1 20.1
In the opinion of the Directors, the following subsidiary undertakings principally affected the Group's results or
financial position at 30 June 2015. A full list of the Group's subsidiaries and all related undertakings is disclosed in
note 34.
Name Country of incorporation/ formation and principal place of operation % of equity shares held by the Group
Ashmore Investments (UK) Limited England 100.00
Ashmore Investment Management Limited England 100.00
Ashmore Investment Advisors Limited England 100.00
Ashmore Management Company Limited Guernsey 100.00
Ashmore Investment Management (Singapore) Pte. Ltd. Singapore 100.00
AA Development Capital Investment Managers (Mauritius) LLC Mauritius 55.00
Ashmore Investments (Brazil) Limited Guernsey 88.57
Ashmore Investments (India) Limited Mauritius 100.00
Ashmore Investments (Turkey) NV Netherlands 84.20
Ashmore Investment Management (US) Corporation USA 100.00
PT Ashmore Asset Management Indonesia Indonesia 70.00
Ashmore Investments Saudi Arabia Saudi Arabia 90.00
Ashmore Investments (Colombia) SL Spain 100.00
Ashmore Japan Co. Limited Japan 100.00
Ashmore Investment Consulting (Beijing) Co. Limited China 100.00
Ashmore Equities Holding Corporation USA 100.00
Ashmore Equities Investment Management (US) L.L.C.* USA 62.90
* Non-controlling interests (NCI) have a material economic interest in AEIM of 22.4%. The results and net assets of AEIM
for the year ended 30 June 2015, prepared in accordance with IFRS and modified for fair value adjustments on acquisition,
were: net profit of £16.9 million (of which £3.0 million was attributable to NCI) and net assets of £27.1 million (of which
£11.7 million was attributable to NCI).
Consolidated funds
The Group consolidated the following investment funds as at 30 June 2015 over which the Group is deemed to have control:
Name Type of fund Country of incorporation/ principal place of operation % of net
assets value held by the Group
Ashmore Brazil Long Short Fund Equity Brazil 76.81
Ashmore Special Opportunities Fund LP Alternatives Guernsey 50.00
Ashmore Emerging Markets Distressed Debt Fund Corporate debt Guernsey 40.02
Ashmore Emerging Markets Debt and Currency Fund Limited Blended debt Guernsey 97.84
Ashmore Dana Obligasi Nusantara Local currency Indonesia 88.35
Ashmore Dana USD Nusantara External debt Indonesia 100.00
Ashmore SICAV Turkish Equity Fund Equity Luxembourg 99.61
Ashmore SICAV Latin America Equity Fund Equity Luxembourg 100.00
Ashmore SICAV Emerging Markets Local Currency Bonds Broad Fund Local currency Luxembourg 47.75
Ashmore Emerging Markets Debt Fund External debt USA 97.77
Ashmore Emerging Markets Frontier Equity Fund Equity USA 78.93
Ashmore Emerging Markets Equity Fund Equity USA 66.22
27) Interests in associates and joint arrangements
The Group held interests in the following associates and joint ventures as at 30 June 2015:
Name Type Nature of business Country of incorporation/ % of equity shares held by the Group
formation and principal
place of operation
VTB-Ashmore Capital Holdings Limited Associate Investment management Russia 50%
Everbright Ashmore* Associate Investment management China 30%
Central China Securities Co. Limited Joint venture Investment management China 49%
*Everbright Ashmore includes four related investment management entities.
The associates and the joint venture are unlisted.
Movements in investments in associates and joint ventures during the year were as follows:
2015 2014
Associates Joint ventures Total Associates Joint ventures Total
£m £m £m £m £m £m
At the beginning of the year 2.3 7.4 9.7 2.3 9.5 11.8
Additions - - - - - -
Share of profit /(loss) (0.1) (1.5) (1.6) 0.2 (2.1) (1.9)
Distributions (0.6) - (0.6) (0.2) - (0.2)
Foreign exchange revaluation (0.2) - (0.2) - - -
At the end of the year 1.4 5.9 7.3 2.3 7.4 9.7
Associates
The summarised aggregate financial information on associates is shown below.
Group 2015 2014
£m £m
Total assets 3.3 3.4
Total liabilities (0.3) (1.1)
Net assets 3.0 2.3
Group's share of net assets 0.9 0.7
Revenue for the year 0.7 4.6
Profit for the year (0.3) 0.6
Group's share of profit for the year (0.1) 0.2
The carrying value of the investments in associates includes attributable goodwill that arose on acquisition of the
associates. Although the Group's share of net assets of the associates is currently below the aggregate carrying value of
the associates reflected on the consolidated balance sheet, the Group has considered that this position is temporary. No
permanent impairment is believed to exist relating
to the associates.
The Group has undrawn capital commitments of £4.2 million (30 June 2014: £5.1 million) to investment funds managed by the
associates. Further details are provided in note 28.
Joint ventures
Group owns 49% interest in a fund management joint venture with Central China Securities Co. Limited in China. Under the
terms of the agreement and upon being granted the required approvals by the China Securities Regulatory Commission and
other relevant government authorities, the Group contributed its share of the initial capitalisation equivalent to £9.9
million.
Summarised financial information on the Group's share in the joint venture is shown below:
2015 2014
£m £m
Current assets 5.6 8.7
Non-current assets - 0.1
Current liabilities (0.3) (1.4)
Total equity 5.3 7.4
Income 0.2 0.6
Expenses (1.7) (2.7)
Loss for the year (1.5) (2.1)
28) Interests in structured entities
The Group has interests in structured entities as a result of the management of assets on behalf of its clients. Where the
Group holds a direct interest in a closed-ended fund, private equity fund or open-ended pooled fund such as a SICAV, the
interest is accounted for either as a consolidated structured entity or as a financial asset depending on whether the Group
has control over the fund or not.
The Group's interest in structured entities is reflected in the Group's AuM. The Group is exposed to movements in AuM of
structured entities through potential loss of fee income as a result of client withdrawals. Outflows from funds are
dependent on market sentiment, asset performance and investor considerations. Further information on these risks can be
found in the Business review.
Considering the potential for changes in AuM of structured entities, management has determined that the Group's
unconsolidated structured entities include segregated mandates and pooled funds vehicles. Disclosure of the Group's
exposure to unconsolidated structured entities has been made on this basis.
The reconciliation of AuM reported by the Group within unconsolidated structured entities is shown below.
Total AuM Less: AuM within
US$bn AuM within consolidated funds unconsolidated structured entities
US$bn US$bn
30 June 2015 58.9 0.2 58.7
Included in the Group's consolidated management fees of £250.2 million are management fees amounting to £245.8 million
earned from unconsolidated structured entities.
The table below shows the carrying values of the Group's interests in unconsolidated structured entities, recognised in the
Group balance sheet, which are equal to the Group's maximum exposure to loss from those interests.
2015
£m
Management fees receivable 46.5
Trade and other receivables 4.7
Seed capital investments 102.0
Total exposure 153.2
The main risk the Group faces from its beneficial interests in unconsolidated structured entities arises from potential
decrease in the fair value of seed capital investments. The Group's beneficial interests in seed capital investments are
disclosed in note 20. Note 21 includes further information on the Group's exposure to market risk arising from seed capital
investments.
The Group has undrawn investment commitments relating to structured entities as follows.
2015 2014
£m £m
Ashmore I - FCP Colombia Infrastructure Fund 2.3 2.9
Everbright Ashmore China Real Estate Fund 1.3 1.6
VTBC-Ashmore Real Estate Partners I, LP 2.9 3.5
Ashmore Special Opportunities Fund LP 6.9 -
Ashmore Emerging Markets Distressed Debt Fund 1.4 -
Ashmore Emerging Markets Corporate Private Debt Fund 1.2 -
Total undrawn investment commitments 16.0 8.0
29) Related party transactions
Related parties of the Group include key management personnel, close family members of key management personnel,
subsidiaries, associates, joint ventures, Ashmore Funds, the EBT and the Ashmore Foundation.
Key management personnel - Group and Company
The compensation paid to or payable to key management personnel for employee services is shown below:
£m 2015 2014
£m £m
Short-term employee benefits 1.4 0.9
Defined contribution pension costs - -
Share-based payment benefits 2.9 (0.4)
4.3 0.5
Share-based payment benefits represent the fair value charge to the statement of comprehensive income of current year share
awards.
During the year, there were no other transactions entered into with key management personnel (FY2013/14: none). Aggregate
key management personnel interests in consolidated funds at 30 June 2015 were £11.5 million (30 June 2014: £3.4 million).
Transactions with subsidiaries - Company
Details of transactions between the Company and its subsidiaries are shown below:
2015 2014
£m £m
Transactions during the year
Management fees received 78.8 45.0
Net dividends received 141.1 143.2
Loans given to subsidiaries 44.5 40.9
Amounts receivable or payable to subsidiaries are disclosed in notes 17 and 25, respectively.
Transactions with Ashmore Funds - Group
During the year, the Group received £137.7 million of gross management fees and performance fees (FY2013/14: £158.5
million) from the 96 funds (FY2013/14: 90 funds) it manages and which are classified as related parties. As at 30 June 2015
the Group had receivables due from funds of £46.8 million (30 June 2014: £55.3 million).
Transactions with the EBT - Group and Company
The EBT, which acts as an agent for the purpose of the employee share-based compensation plans, has been provided a loan
facility to allow it to acquire Ashmore shares in order to satisfy outstanding unvested shares awards. The EBT is included
within the results of the Group and the Company. As at year end the loan outstanding was £149.0 million (30 June 2014:
£137.6 million).
Transaction with the Ashmore Foundation - Group and Company
The Ashmore Foundation is a related party to the Group. The Foundation was set up to provide financial grants to worthwhile
causes within
the Emerging Markets countries in which Ashmore invests and/or operates with a view to giving back into the countries and
communities. The Group donated £0.1 million to the Foundation during the year (FY2013/14: £0.1 million).
30) Commitments
Operating lease commitments
The Group and Company have entered into certain property leases. The leases have no escalation clauses or renewal or
purchase options,
and no restrictions imposed on them. The future aggregate minimum lease payments under these non-cancellable operating
leases fall due
as follows:
Group
2015 2014
£m £m
Within 1 year 2.3 2.8
Between 1 and 5 years 8.5 8.2
Later than 5 years 6.6 5.2
17.4 16.2
Company
2015 2014
£m £m
Within 1 year 1.2 1.2
Between 1 and 5 years 4.6 4.6
Later than 5 years 4.1 5.2
9.9 11.0
Operating lease expenses are disclosed in note 11.
Company
The Company has undrawn loan commitments to other Group entities totalling £58.9 million (30 June 2014: £84.2 million) to
support their investment activities but has no investment commitments of its own (30 June 2014: none).
31) Restatements on adoption of IFRS 10
As explained in note 3, the Group adopted IFRS 10 in the year and has reassessed its consolidation conclusions effective
from 1 July 2014. As a result, the Group consolidated four additional funds retrospectively, with the impact of increasing
consolidated total assets and liabilities by £73.9 million as at 1 July 2014. These funds were previously accounted for as
financial assets and classified as available-for-sale financial assets and investments held at fair value through profit
and loss. The Group's comparative cash flow statement has also been restated, with the effect of increasing subscriptions
and redemptions in consolidated funds by £44.6 million and £40.2 million, respectively.
The Group has restated comparative information where relevant, as shown below.
Impact on consolidated statement of comprehensive income
30 June 2014
As previously reported IFRS 10 restatement As restated
£m £m £m
Net revenue 262.9 - 262.9
Operating profit 169.7 1.6 171.3
Profit before tax 170.3 1.3 171.6
Profit for the period 133.4 1.3 134.7
Other comprehensive income, net of related tax effect (21.9) (1.3) (23.2)
Total comprehensive income for the period 111.5 - 111.5
Profit attributable to:
Equity holders of the parent 130.8 1.3 132.1
Non-controlling interests 2.6 - 2.6
Profit for the period 133.4 1.3 134.7
Earnings per share
Basic 19.29p 0.19p 19.48p
Diluted 18.44p 0.19p 18.63p
Impact on consolidated balance sheets
30 June 2014 30 June 2013
Condensed consolidated balance sheet As previously reported IFRS 10 restatement As restated As previously reported IFRS 10 restatement As restated
£m £m £m £m £m £m
Non-current assets 118.1 - 118.1 130.6 - 130.6
Investment securities 70.7 102.5 173.2 49.7 57.8 107.5
Available-for-sale financial assets 48.5 (19.1) 29.4 55.6 (19.2) 36.4
Fair value through profit or loss investments 25.3 (16.9) 8.4 - - -
Trade and other receivables 64.0 5.7 69.7 77.3 5.2 82.5
Derivative financial instruments 2.4 0.1 2.5 - - -
Cash and cash equivalents 370.6 1.6 372.2 395.5 0.2 395.7
Non-current assets held-for-sale 39.1 - 39.1 104.9 - 104.9
Total assets 738.7 73.9 812.6 813.6 44.0 857.6
Non-current liabilities 4.5 - 4.5 3.0 - 3.0
Current tax 16.4 - 16.4 28.9 - 28.9
Third-party interests in consolidated funds 13.5 56.2 69.7 12.8 28.0 40.8
Derivative financial instruments - 0.1 0.1 2.1 0.1 2.2
Trade and other payables 69.4 17.6 87.0 94.1 15.9 110.0
Non-current liabilities held-for-sale 2.7 - 2.7 26.9 - 26.9
Total liabilities 106.5 73.9 180.4 167.8 44.0 211.8
Share capital 15.7 - 15.7 15.7 - 15.7
Retained earnings 616.4 1.8 618.2 608.0 0.5 608.5
Foreign exchange reserve (12.8) (1.8) (14.6) 5.3 (0.3) 5.0
Available-for-sale fair value reserve (5.3) - (5.3) 0.7 (0.2) 0.5
Cash flow hedging reserve 1.8 - 1.8 (1.0) - (1.0)
Non-controlling interests 16.4 - 16.4 17.1 - 17.1
Total equity 632.2 - 632.2 645.8 - 645.8
32) Post-balance sheet events
There were no post-balance sheet events that required adjustment of or disclosure in the financial statements for the year
ended 30 June 2015.
33) Accounting estimates and judgements
Estimates and judgements used in preparing the financial statements are regularly evaluated and are based upon management's
assessment
of current and future events. The principal estimates and judgements that have a significant effect on the carrying amounts
of assets and liabilities are discussed below.
Impairment of intangible assets
The Group tests goodwill and intangible assets annually for impairment. The recoverable amount for goodwill is determined
in reference to the Group's market capitalisation, whereas recoverable amount for intangible assets is determined based
upon value in use calculations prepared on the basis of management's assumptions and estimates. The carrying value of
goodwill and intangible assets on the Group's balance sheet
at 30 June 2015 was £74.1 million (30 June 2014: £72.2 million). Management considers that reasonable possible changes in
any of the key assumptions applied would not cause the carrying value of goodwill to materially exceed its recoverable
value. An impairment charge of £0.4 million was recognised on the intangible assets, representing the excess of the
carrying value to its recoverable value (see note 15).
Performance fees
The Group assesses the recognition of performance fees to determine whether receipt of the fees is considered probable and
the amount reliable. The assessment is made using management's judgement of the circumstances relevant to each performance
fee entitlement.
There were no outstanding performance fees receivable at 30 June 2015 (30 June 2014: none).
Share-based payment transactions
The Group measures the cost of equity-settled and cash-settled share-based awards at fair value at the date of grant and
expenses them over the vesting period based on the Group's estimate of the shares that will eventually vest.
Classification of seed capital investments
The Group invests seed capital from time to time to support the initial launch and growth of new products, such as SICAVs,
private-equity funds and alternative investment funds. The seed capital investments vary in duration depending on the
nature of the product and the time expected to grow the funds to a size and track record required for participation by
third-party investors. The Group reviews the size and nature of these investments to consider the level of control over the
fund and to determine the appropriate classification for accounting either as full consolidation (where the Group concludes
that it has control over the fund), using equity-method accounting (where the Group exercises significant influence or
joint control), or as a financial asset classified as available-for-sale, held-for-sale or at fair value through profit or
loss. In the case of seed capital investments, where the Group concludes that it does not have control over the fund, the
Group is also not deemed to have significant influence over the fund, and therefore does not apply equity-method
accounting. The Group would account for the seed capital investment as a financial asset, classified either as an
available-for-sale financial asset, financial asset held-for-sale, or a financial asset at fair value through profit or
loss. The Group considers that its seeding activity is intended to help establish a fund's track record and to provide
initial scale until the fund has attracted sufficient third-party capital, at which stage the Group will actively seek to
redeem and redeploy the seed capital.
The adoption of IFRS 10 has led to additional funds being consolidated where the Group is now deemed to hold a controlling
interest as defined in IFRS 10. Prior to the adoption of IFRS 10, the Group consolidated funds as held-for-sale assets and
liabilities or consolidated funds, when the Group's aggregate economic interest gave the Group control over these funds.
This policy has not changed subsequent to the adoption of IFRS 10. However, the change to the definition of control under
IFRS 10 means that certain of the Group's funds now meet the definition of a subsidiary as they are deemed to be controlled
by the Group as a result of the combination of holding a significant proprietary investment and additionally being the
investment manager, with third-party investors unable to remove the Group or Group subsidiary entities easily from that
role without cause.
Interests in unconsolidated structured entities
Management exercises judgement to determine whether the Group controls an investment fund under IFRS 10, including making
an assessment of whether the Group has power over the fund which the Group exercises for self-benefit. Management also
assesses the magnitude of the Group's aggregate economic interest in the fund (comprising direct interests, carried
interests, expected management fees, fair value gains or losses, and distributions receivable from funds managed) relative
to third-party investors, and whether third-party investors have substantive rights to remove the Group from acting as a
fund manager without cause.
The Group has assessed and classified the following fund vehicles as unconsolidated structured entities:
- Segregated mandates and pooled funds managed where the Group does not hold a direct interest, for example, seed
capital investment.
The Group has assessed that third-party investors have the practical ability to vote by a simple majority, to remove the
Group from acting as fund manager without cause. As a result, the Group has concluded that it acts as agent for the
third-party investors.
- Pooled funds managed where the Group holds interests, for example seed capital investments, and the Group's
aggregate economic exposure in the fund relative to third-party investors is less than 20% (i.e. the threshold established
below which the Group is deemed to act as an agent, and above which the Group is deemed to act as a principal, taking into
account investor kick-out rights). As a result, the Group concluded it is an agent for third-party investors and,
therefore, has accounted for its beneficial interest in the fund as a financial asset. Further details on the carrying
values of these seed capital financial assets have been disclosed under note 20.
The disclosure of the AuM in respect of consolidated and unconsolidated structured entities is provided under note 28.
34) Subsidiaries and related undertakings
The following is a full list of the Ashmore Group plc subsidiaries and related undertakings as at 30 June 2015 pursuant to
the requirements of Statutory Instrument 2015 No. 80 The Companies, Partnerships and Groups (Accounts and Reports)
Regulations 2015. The list includes the Group's subsidiaries and related undertakings, all significant holdings (greater
than 20% interest), associate undertakings, joint ventures and significant holdings in Ashmore sponsored public funds in
which the Group has invested seed capital:
Name Country of incorporation/ principal place of operation Classification % interest
Ashmore Brasil Gestora de Recursos Limitada Brazil Subsidiary 100.00
Ashmore Investment Consulting (Beijing) Co. Limited China Subsidiary 100.00
Ashmore Management Company Colombia SAS Colombia Subsidiary 61.00
Ashmore Investments (UK) Limited England and Wales Subsidiary 100.00
Ashmore Investment Management Limited England and Wales Subsidiary 100.00
Ashmore Investment Advisors Limited England and Wales Subsidiary 100.00
Aldwych Administration Services Limited England and Wales Subsidiary 100.00
Ashmore Asset Management Limited England and Wales Subsidiary 100.00
Ashmore Investments (Brazil) Limited Guernsey Subsidiary 88.00
Ashmore Management Company Limited Guernsey Subsidiary 100.00
Ashmore Management Company Turkey Limited Guernsey Subsidiary 100.00
Ashmore Private Equity Turkey Fund 1 (GP) Limited Guernsey Subsidiary 100.00
Ashmore Global Special Situations Fund 3 (GP) Limited Guernsey Subsidiary 100.00
Ashmore Global Special Situations Fund 4 (GP) Limited Guernsey Subsidiary 100.00
Ashmore Global Special Situations Fund 5 (GP) Limited Guernsey Subsidiary 100.00
VTBC-Ashmore Investment Management Limited Guernsey Subsidiary 100.00
VTBC-Ashmore Partnership Management 1 Limited Guernsey Subsidiary 100.00
AA Indian Development Capital Advisors Private Limited India Subsidiary 100.00
Ashmore Investment Advisors (India) Private Limited India Subsidiary 99.82
Ashmore - Centrum India Opportunities Investment Advisers Private Limited India Subsidiary 51.00
Ashmore-Centrum Funds Trustee Company Private Limited India Subsidiary 51.00
PT Ashmore Asset Management Indonesia Indonesia Subsidiary 70.00
Ashmore Japan Co. Limited Japan Subsidiary 100.00
AA Development Capital Investment Managers (Mauritius) LLC Mauritius Subsidiary 55.00
Ashmore Investments (India) Limited Mauritius Subsidiary 100.00
Ashmore Investments (Turkey) NV Netherlands Subsidiary 84.20
Ashmore Russia LLC Russia Subsidiary 100.00
Ashmore Investment Saudi Arabia Saudi Arabia Subsidiary 90.00
Ashmore Investment Management (Singapore) Pte. Ltd. Singapore Subsidiary 100.00
Ashmore Investments (Colombia) SL Spain Subsidiary 100.00
Ashmore Portfoy Yonetimi Anonim Sirketi Turkey Subsidiary 99.96
Ashmore Emlak ve Yatirim Ltd Sirketi Turkey Subsidiary 100.00
Ashmore Investment Management (US) Corporation USA Subsidiary 100.00
Ashmore Equities Holding Corporation USA Subsidiary 100.00
Ashmore Equities Investment Management (US) L.L.C. USA Subsidiary 62.90
Everbright Ashmore Real Estate Partners Limited Cayman Islands Associate 30.00
Everbright Ashmore Services and Consulting Limited Cayman Islands Associate 30.00
Everbright Ashmore Investment Management Limited Cayman Islands Associate 30.00
EA Team Investment Partners Limited Cayman Islands Associate 30.00
T&C (Hong Kong) Limited Hong Kong Associate 24.00
Ashmore Central China Securities Co. Limited China Joint venture 49.00
VTB-Ashmore Capital Holdings Limited Russia Associate 50.00
Ashmore Brazil Long Short Fund Brazil Consolidated fund 76.81
Ashmore Special Opportunities Fund LP Guernsey Consolidated fund 50.00
Ashmore Emerging Markets Distressed Debt Fund Guernsey Consolidated fund 40.02
Ashmore Emerging Markets Debt and Currency Fund Limited Guernsey Consolidated fund 97.84
Ashmore Dana Obligasi Nusantara Indonesia Consolidated fund 88.35
Ashmore Dana USD Nusantara Indonesia Consolidated fund 100.00
Ashmore SICAV Turkish Equity Fund Luxembourg Consolidated fund 99.61
Ashmore SICAV Latin America Equity Fund Luxembourg Consolidated fund 100.00
Ashmore SICAV Emerging Markets Local Currency Bonds Broad Fund Luxembourg Consolidated fund 47.75
Ashmore Emerging Markets Debt Fund USA Consolidated fund 97.84
Ashmore Emerging Markets Frontier Equity Fund USA Consolidated fund 78.93
Ashmore Emerging Markets Equity Fund USA Consolidated fund 66.22
Everbright Ashmore China Real Estate Fund China Significant holding 22.78
Ashmore Russian Debt Fund Guernsey Significant holding 83.33
Ashmore Dana Ekuitas Nusantara Indonesia Significant holding 27.64
Ashmore Dana USD Equity Nusantara Indonesia Significant holding 82.18
Ashmore SICAV Frontier Equity Fund Luxembourg Significant holding 31.93
Ashmore SICAV 3 EM Multi Strategy Fund
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