Annual Financial Report

RNS Number : 2481J

Liontrust Asset Management PLC

28 June 2011

 



28 June 2011

Stock Exchange Announcement

LIONTRUST ASSET MANAGEMENT PLC

Annual Report and Financial Statements 2011

Liontrust Asset Management PLC (the "Company", "Group" or "Liontrust") has posted its Annual Report and Financial Statements for the year ended 31 March 2011 (the "Annual Report") to shareholders. A copy of the Annual Report has been submitted to the National Storage Mechanism and will shortly be available for inspection at http://www.hemscott.com/nsm.do.

The Annual Report can also be viewed on the Company's website, www.liontrust.co.uk, from 29 June 2011.

For further information please contact:

Liontrust Asset Management PLC                              

John Ions                                                                                             020 7412 1700

Vinay Abrol

Simon Hildrey - Head of Marketing & Communications

Altium

Sam Fuller                                                                                                       020 7484 4040

Paul Chamberlain

The information below, which is extracted from the Annual Report, is included solely for the purpose of complying with DTR 6.3.5. It should be read in conjunction with the Company's Preliminary Results for the year ended 31 March 2011, which were announced on 15 June 2011. Together these constitute the material required by DTR 6.3.5 to be communicated to the media in unedited full text through a Regulatory Information Service. This material is not a substitute for reading the full Annual Report. Page numbers and cross-references in the extracted information below refer to page numbers and cross-references in the Annual Report. 

Risks and uncertainties

The Directors have identified the risk and uncertainties that affect the Group's business and these can 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 under-performance, loss of key personnel, human error, poor communication and service leading to reputation damage and fraud.

Risks outside the management's influence include falling markets, terrorism, a deteriorating UK economy, investment industry price competition and hostile takeovers.

Management monitor all material risks to the business, they record how each risk is mitigated and have warning flags to identify 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 Risk management and

internal control section on page 16 of the Annual Report.

Additionally the Group has a significant number of stakeholders whose future risks and uncertainties are linked to the Group. These significant stakeholders are: shareholders; clients; members; employees; service providers that provide the Group with outsourced functions; and industry bodies. Each of these groups presents different risks and uncertainties and the Group ensures that there is regular contact and monitoring of the various bodies.

Directors' responsibilities statement

The Directors are responsible for preparing the Annual Report, the Directors' Remuneration Report and the financial statements in accordance with applicable law and regulations.  Company law requires the Directors to prepare financial statements for each financial year.  Under that law the Directors have prepared the group and parent company financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. 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 the company and of the profit or loss of the company and group for that period. In preparing these financial statements, the Directors are required to:

·    select suitable accounting policies and then apply them consistently;

·    make judgements and estimates that are reasonable and prudent;

·    state that the financial statements comply with IFRSs as adopted by the European Union;

·    prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and enable them to ensure that the financial statements and the Directors' Remuneration Report comply with the Companies Act 2006 and, as regards the group financial statements, Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Each of the Directors, whose names and functions are listed on page 11 of the Annual Report confirm that, to the best of their knowledge:

·    the group financial statements, which have been prepared in accordance with IFRSs as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group; and

·    the Directors' Report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that it faces.

The financial statements may be published on the www.liontrust.co.uk website, which is maintained by the Company. The maintenance and integrity of the website is the responsibility of the Directors. The work carried out by the auditors does not involve consideration on the maintenance and integrity of this website and, accordingly, the auditors accept no responsibility for any changes that have occurred to the financial statements since they were

initially presented on the website. The financial statements are prepared in accordance with UK legislation, which may differ from legislation in other jurisdictions.

Audit Report

PricewaterhouseCoopers LLP, the Group's auditors, have reported on the statutory accounts, and provided an unqualified opinion.

Related party transactions during the year

On 8 July 2010, as part of a reorganisation of the Group, two subsidiaries of the Company transferred their respective and entire regulated businesses to two newly incorporated limited liability partnerships ("LLP"). Liontrust Investment Funds Limited ("LIF") and Liontrust Fund Partners LLP ("LFP"), and Liontrust Investment Services Limited ("LIS") and Liontrust Investment

Partners LLP ("LIP") entered into separate Business Contribution Agreements for the transfer of their respective and entire regulated businesses (the "Businesses") together with all properties, rights, assets and goodwill relating to the Businesses as going concerns to the respective LLP. The transfer of the Businesses took place at book value, and has been treated as a contribution of capital by the relevant subsidiary company of the Group to the relative LLP and has been credited to its Capital Account with the relevant LLP. For the purposes of Chapter 11 of the Listing Rules of the UK Listing Authority (the "Listing Rules"), certain participants invited to become members of LFP and LIP were considered to be related parties of the Company on

the basis that these individuals had served as Directors of subsidiaries of the Company during the previous twelve month period and it was therefore considered that these arrangements constituted smaller related party transactions under the Listing Rules.

On 16 August 2010, the Company entered into an agreement to acquire 45,000 C Ordinary Shares held by each of Mr West and Mr Inglis-Jones respectively in Liontrust European Investment Services Limited ("LEIS"), a subsidiary of the Company, subscribed for by them pursuant to an investment agreement dated 16 June 2006. These represented the entire interests of Mr West and Mr Inglis-Jones in LEIS. The total consideration payable by Liontrust for such shares, including stamp duty, listing fees and legal expenses, was £2,744,000. As part of such arrangement, Mr West and Mr Inglis-Jones applied 50% of the consideration received to subscribe for, in aggregate, 1,679,882 new Ordinary Shares of 1p in Liontrust at the prevailing market price. For the purposes of Chapter 11 of the Listing Rules, Mr West and Mr Inglis-Jones were considered to be related parties of the Company on the basis that these individuals were Directors of LEIS and it was therefore considered that these arrangements constituted smaller related party transactions under the Listing Rules.

On 11 April 2011, LIF and LIS entered into amended LLP agreements for LFP and LIP, so as to enable the management committee of LFP and LIP to grant awards to incentivise certain individual members (other than those members who are executive directors of the Company) which may, at a test date three years following the date of grant (the "Test Date"), provide

value to the holders thereof, by means of the allocation of capital interests to certain of such individual members ("Incentive Capital Interest"). Each participating member would only be entitled to a percentage (up to 100 per cent.) of his Incentive Capital Interest at the Test Date, such percentage being calculated by reference to the share price of the Company at that date (with appropriate adjustments in relation to good leaver/bad leaver provisions and takeover offers). For the purposes of Chapter 11 of the Listing Rules, certain participants who were individual members of LFP or LIP were considered to be related parties of the Company on the basis that these individuals had served as Directors of subsidiaries of the Company during the previous twelve month period and it was therefore considered that these arrangements constituted smaller related party transactions under the Listing Rules.

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