Investing
for a better
tomorrow
Integrated Annual Report 2020
Chief Executive Officer’s Review
Our Strategy
Tracking our Strategic Progress
Engaging with our Stakeholders
Strategic Report
06 Ninety One at a Glance
08 Our Business Model
10 Chairman’s Statement
12
18
20
24
26 Our Clients
28 Our People and Culture
32
41
42
50
54
Sustainability
Non-financial Information Statement
Financial Review
Risk Management
Principal Risks
58
70
60
62
Governance
Chairman’s Introduction
to Corporate Governance
The Board of Directors
Board Leadership and
Company Purpose
65 Division of Responsibilities
Composition, Succession
68
and Evaluation
DLC Nominations and Directors’
Affairs Committee Report
DLC Audit and Risk
Committee Report
DLC Sustainability, Social
and Ethics Committee Report
DLC Human Capital and
Remuneration Committee Report
Directors’ Remuneration Policy
Annual Report on Remuneration
86
95
73
82
79
Annual Financial Statements
105 Directors’ Report
111
Directors’ Responsibility Statement
and Certificate by the company
secretary of Ninety One Limited
Independent Auditor’s Report
113
124 Consolidated Financial Statements
Annexure to the Consolidated
164
Financial Statements
Ninety One plc Company
Financial Statements
166
Additional Information
174 Glossary
176
Investor Relations
This was a
momentous year
About this report
Our journey from emerging market
roots has been like no other in
our industry. We started with a
unique perspective and continue
to embrace opportunities and
challenges in our own way.
We look different because we are
different. This report introduces
you to our distinctive culture and
our passion to always do our best
for our clients, our people, our
shareholders and the world overall.
Key numbers and events
£103.4bn
Assets under management
£588.0m
Adjusted operating revenue1
£198.5m
Profit before tax
16.1p
Adjusted earnings per share2
£6.0bn
Net flows
39%
Investment outperformance3
(1-year)
55%
Investment outperformance3
(3-year)
16.8p
Basic earnings per share
5.4%
Torque ratio
21%
Staff ownership
Demerged, rebranded and listed
on London and Johannesburg
Stock Exchanges in March 2020
1. Calculated as net revenue, less Silica third-party revenue and adjusted for foreign exchange gains/losses,
deferred employee benefit scheme movements, and other income.
2. Adjusted earnings per share (“Adjusted EPS”) is profit attributable to ordinary shareholders, adjusted to
remove non-operating items, divided by the number of ordinary shares in issue at the end of the year.
3. Firm-wide outperformance is calculated as the sum of the total market values for individual portfolios that
have positive active returns on a gross basis expressed as a percentage of total AUM. Our percentage of firm
outperformance is reported on the basis of current AUM and therefore does not include terminated funds.
Total AUM excludes double-counting of pooled products and third-party assets administered on our South
African (“SA”) fund platform (known as Ninety One Investment Platform). Benchmarks used for the above
analysis excludes cash, peer group averages, inflation and market indices as specified in client mandates
or fund prospectuses. For all periods shown, market values are as at the period end date.
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Investing
for a better
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Our purpose
We set up our business in 1991 with the aim of making a
positive difference to both our clients and the country
in which we started. Since then, we have expanded our
scope and ambition globally.
Our purpose is simple: investing for a better tomorrow.
This is what guides our strategic decision-making, culture
and interactions with our clients.
We do this by building a better firm, by trying to invest
in a better way and by contributing to a better world.
Our culture
The culture of Ninety One is a reflection of who we are as
people and it is our shared values and norms that make us.
Our culture informs our brand. It is a source of competitive
advantage and the foundation for enduring investment
performance and client service.
We strive to do the right thing for our clients, our people,
our community and for the wider world. Ambition and
care are not mutually exclusive and our culture aims to
achieve both. We are building a firm that insists on results,
excellence and ambition, but not at the expense of the
human spirit. We aim to be successful and decent at the
same time.
Read more about our culture on page 28
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Investing
for a better
tomorrow
Investing for a better tomorrow
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Better firm
Better investing
Better world
We are building a firm that aims to achieve
excellence over the long term, with a culture
that encourages our people to reach their
highest potential and puts our clients at the
centre of our business.
er firm
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Ninety One at a Glance
Launched in South Africa in
1991, we are one of the few
investment management
firms to have developed a
substantial global footprint
from emerging market origins.
Ninety One is a founder-led global investment manager
with £103.4 billion of assets under management (“AUM”),
as at 31 March 2020.
It was initially founded as Investec Asset Management,
an independent entity within Investec.
In March 2020, Investec Asset Management demerged
from Investec, rebranded as Ninety One and independently
listed on the London and Johannesburg Stock Exchanges
(“LSE” and “JSE”).
Our history
Ninety One has been sustainably and predominantly
organically built over nearly 30 years. Over this time,
it has established a long-term track record of growth
in AUM over three distinct phases.
+19% AUM CAGR FY98 – FY09
Internationalisation phase
+93% AUM CAGR FY92 – FY98
Domestic growth phase
Ninety One is now entering a new phase as an
independently listed investment management firm.
+12% AUM CAGR FY09 – FY20
Scaling post crisis phase
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F
AUM
Profit before tax and exceptional items
Bear market1
Financial years ended 31 March.
1. Bear market defined as a period in which share prices fell 20% (measured by the MSCI All Countries World Index) or more from the prior peak and
would include the period from the peak in the market to the lowest point of the bear market.
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What we do
Ninety One offers a range of specialist and outcome-oriented strategies. It has several distinct skillsets and invests across
the asset class spectrum.
Offering by
asset class1
Distinct skillsets1
£45.8bn
––
Equities
£30.5bn
––
Fixed income
£18.3bn
––
Multi-asset
£2.6bn
––
Alternatives
4Factor
Quality
Value
Fixed income
Alternatives
Multi-asset
Client demand
Specialist
Outcomes
1. Excluding SA fund platform.
Who we serve
Ninety One has a sophisticated and geographically diverse client base.
AUM by asset class
AUM by client type
Equities
Fixed income
Multi-asset
Alternatives
SA fund platform
44%
29%
18%
3%
6%
Advisor
Institutional
32%
68%
AUM as at 31 March 2020.
How we do it
1,165 staff (exc. Silica1)
––
(1,630 staff, inc. Silica1)
21
––
Offices
14
––
Countries
5
––
Client Groups
— Africa
— United Kingdom
— Asia Pacific
— Europe
— Americas
1. Silica is our transfer agency business in South Africa.
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Our Business Model
We focus on creating value for all our stakeholders, while
staying true to our purpose – investing for a better tomorrow.
The value for our stakeholders
Ninety One’s objective is to generate value
for our clients, our people, our shareholders,
and for society and the environment.
Our value proposition
to shareholders
Ninety One’s offering is differentiated
by the following attributes:
For clients
We want to assist our clients to
achieve their long-term financial
objectives.
For people
We want our people to be proud of
Ninety One, enjoy the work they do
and have the freedom to be themselves,
within a team context.
For shareholders
We want to offer our shareholders
participation in a simple and
capital-light business model with an
attractive long-term financial profile.
For society and the environment
We want to invest for a better
tomorrow and contribute to a
better and more sustainable world.
Unique employee
ownership
Organically and
sustainably built
Emerging market
heritage underpins
growth
Distinctive
specialist active
strategies
Superior global
reach given scale
Sophisticated
institutional and
advisor client base
Significant growth
potential across
existing skillsets
Attractive financial
profile with strong
cash generation
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Our business model and organisational structure
Investments
Equities
Fixed income
Multi-asset
Alternatives
Investment support
Ninety One invests across the asset class spectrum and our
investment teams are organised according to specialist skillsets.
These teams are aligned to investment philosophies that are
suited to different market environments. This diversity allows
the teams to focus on the long term and to produce good
outcomes for clients.
4Factor, Quality and Value specialist equity teams offer global
and regional strategies. The fixed income team invests in both
emerging and developed markets, covering bonds and credit.
The multi-asset team benefits from insights across the entire
firm, delivering global and regional growth and income
strategies. Unlisted investments and thematic strategies are
represented as alternatives.
The investment teams are globally integrated, with major hubs
in London and Cape Town, with additional investment centres
in New York, Hong Kong, Singapore, Gaborone and Windhoek.
They are centrally supported by the Chief Investment Officers’
office and Environmental, Social and Governance (“ESG”),
performance, risk and dealing teams.
Client Group
Africa
United Kingdom
Asia Pacific
Europe
Americas
Global marketing
Ninety One’s clients are served through five regional
Client Groups. We work with clients from all over the world,
predominantly in the institutional and advisor markets. Our
institutional clients include some of the world’s largest private
and public sector pension funds, sovereign wealth funds, central
banks, insurers, corporates and foundations. Our advisor clients
include large retail financial groups, wealth managers, private
banks and intermediaries serving individual investors.
The Client Groups are responsible for all aspects of client
engagement and service. We have developed strategic
client management teams in key locations across the globe
to coordinate our client relationships and offer bespoke
servicing where required, to cater to the varied and specific
needs of our clients. Close cooperation across our
teams allows us to share best practices and ensures
our clients can benefit from a diverse range of expertise.
The Client Groups are supported by a global marketing team
which is responsible for preparing a wide range of insightful
client materials, branding, events and digital engagement.
Clients’ assets are managed in pooled vehicles, primarily mutual
funds and segregated mandates. As at 31 March 2020, Ninety
One managed over 200 funds and 1,100 share classes across
its well-structured product platform and fund infrastructure.
Ninety One’s South African fund platform offers both offshore
and domestic investment solutions for independent financial
advisors in South Africa. The platform predominantly comprises
third-party products and selected Ninety One funds, which as
at 31 March 2020 represented £1.8 billion of the platform’s total
assets of £8.0 billion.
The Client Group operates out of 19 of Ninety One’s offices
around the world.
Operations
Legal,
Compliance
and Operational
Risk
Human
Capital
Finance &
Workplace
Internal
Audit
Investment
Operations
Product
Management
Information
Technology
Ninety One deploys a globally integrated operations platform
that relies on partnering with global service providers across
the value chain. This operating model allows for efficiency and
flexibility which acts as an enabler for targeted cost savings
through operations in low-cost locations.
Ninety One’s London and Cape Town offices are the main
operational centres. It has further operational activities in Hong
Kong, New York, Singapore, Sydney, Johannesburg, Gaborone
and Windhoek, which support distribution and investment
activities while taking advantage of time zones.
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Chairman’s
Statement
—— Gareth Penny
Chairman
“ As the new Chairman of
the Board of Ninety One,
I am delighted to introduce
this year’s Integrated Annual
Report, in what has been
a momentous year for
the business.”
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Ninety One was set up by Hendrik du Toit some 29
years ago, as Investec Asset Management, to provide
sophisticated asset management strategies to clients
in South Africa. Since then, the business has grown
into an independent global investment manager with
over £100 billion in assets under management.
The demerger from Investec and the subsequent listing on
the LSE and JSE in March 2020 have been extraordinary
achievements and a great team effort by the leadership
and staff in the business. This achievement in these
volatile and unprecedented times, shows the resilience
of the business and the strengths of its long-standing
and committed management team under Hendrik’s
continued leadership.
But the listing is just the next step on a long-term
journey for Ninety One. As an independent business,
we are now in a strong position to apply our specialist
investment capabilities and skillsets, our global
distribution footprint and stable, committed and
experienced staff to serve our clients to the best
of our abilities, to continue to profitably grow our
business and to create long-term shareholder value.
The Board
I was appointed as the Chairman of the Board in
November 2019, and I look forward to being part of
the business’s next stage of development, building
on our strong heritage and a long track record.
In November 2019, we announced the composition
of our new Board, introducing four independent
non-executive directors, namely Colin Keogh,
Busisiwe Mabuza, Idoya Basterrechea Aranda
and Victoria Cochrane.
Stakeholder engagement
The Board recognises that the long-term success of
our business is dependent on the success of all our
stakeholders. The Board has had regard to the interests
of our stakeholders while complying with its obligations
under relevant Companies Acts to promote the success
of the company. Notwithstanding the limited time since
its appointment, the Board has discussed its obligations,
including how stakeholder engagement is incorporated
into our long-term decision-making.
Further information on our stakeholders can be found
on pages 24 to 25 of this Integrated Annual Report
Looking ahead
Ninety One is monitoring the continuing developments
around the spread of COV ID-19 and we have taken
measures to ensure the safety of our people, while
continuing to serve our clients, unhindered. However,
we note the impact on the wider economy and markets,
bringing a lasting change to the way we live, the way we
work and communicate, and how we view the world.
We recognise the need, now more than ever, for
businesses to align themselves with wider society
and to look beyond pure profit maximisation. Ninety One
has always sought to do that. We strive to do the right
thing for our clients, for our people, for our communities
and for the wider world, which is reflected in our purpose
and in the way we conduct our business and ourselves.
In spite of the many challenges ahead, Ninety One is
well-positioned for the long term.
Our diverse new Board brings substantial financial sector
experience and a deep understanding of international
business, particularly in emerging markets, as well as
the skills and expertise required for a global dual-listed
company.
More information about our governance arrangements,
the Board and its committees can be found in the
Governance section of this Integrated Annual Report.
Relationship with Investec
Ninety One (then known as Investec Asset Management)
was part of Investec for nearly three decades. As the
group evolved, there was a need to simplify and focus
the different businesses within Investec for growth.
This resulted in a decision in September 2018 to demerge
and separately list the asset management business.
Although we are now starting our journey as an
independent, newly listed investment manager, we
remain grateful and proud of our heritage as part of
Investec and look forward to continuing our good
relationship. We wish them well as they pursue
their goals as a more focused bank and wealth
management business.
Management and employee
ownership
Following our demerger, Ninety One’s proposition is
now simpler and clearer. It has also enabled increased
employee ownership. This not only provides greater
incentivisation for many of our employees, but is also
ideal for talent retention and talent attraction, and
most importantly it aligns our people with our clients,
shareholders and the communities we serve.
Following the demerger, collectively through the employee
benefit trusts and the management ownership vehicle,
employees own just over 21% of Ninety One. We believe
this employee ownership will increase over time, with
our staff excited to participate and be part of our
long-term story.
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Chief
Executive
Officer’s
Review
—— Hendrik du Toit
Founder and Chief Executive Officer
“ Despite the recent market
volatility, Ninety One remains
a resilient, stable business
with strategic clarity and
an ambitious long-term
growth agenda.”
Historic year
The financial year to 31 March 2020 was a momentous
year for Ninety One. We ended our twenty-ninth year
in business with record earnings, a high-quality client
base from across the world, and a highly motivated
and experienced leadership team, but we were
challenged by the enormous economic and market
consequences of the COVID-19 pandemic.
During the last month of the financial year we successfully
demerged from Investec, listed on the LSE and JSE, and
rebranded as Ninety One. Significantly, all staff can now
be shareholders and the people who work in the firm
collectively own more than 21% of the equity of Ninety
One. This was a pivotal period in the evolution of our
business. While these developments support our
proposition as an independent investment manager
with significant employee ownership, it is important
to emphasise the stability of our staff and continuity
of our long-term strategy, which underpin the success
of our business.
Notwithstanding the cyclicality and high-beta inherent
in an asset management business, our business model
remains capital light and talent intensive, with a preference
for organic growth. The combination of a strong “owner-
culture” with a diversified investment offering provides
resilience over time. We deliberately engage across the
asset class spectrum as this provides useful diversification
through various market cycles. Our client focus is clear.
Ninety One serves institutional and advisor clients in
chosen markets around the world and does not
concentrate on direct retail business.
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Strategy and opportunities
Although the past year is correctly characterised as
eventful, our strategy remains consistent. Ninety One
continues to provide a range of specialist, active
strategies to its global client base. The business is
differentiated from the competitor universe by its blend
of global and emerging markets investment expertise
and its origins in emerging markets. We believe that
the growing weight of emerging markets in the world
economy is a structural trend, leading to increased
representation in major indices, over time. This underlines
the relevance of emerging markets to asset owners. Our
investment approach combines this perspective with a
global approach to investing, free from “home bias”. The
near-term challenges facing emerging markets, relating
to the COVID-19-triggered downturn, have not changed
our long-term view. On the contrary, we expect the next
few years to provide our investors with compelling
long-term opportunities in both developed and emerging
markets and risk assets in general. The stable and
experienced investment teams at Ninety One are
motivated to make the most of these opportunities
for our clients.
Investment performance
and progress
All of Ninety One’s investment capabilities are managed
with the simple aim of delivering performance which
meets or exceeds our clients’ expectations around
agreed, well-defined return and risk parameters.
In many ways the reporting period was a “year of two
parts”. Most of the first 11 months took place against the
background of rising markets and an expanding global
economy. During this period, our short- and longer-term
investment performance, as measured at firm level on an
aggregate asset-weighted basis, displayed an improving
trend. As at the end of December 2019, our one- and
three-year firm-wide outperformance stood at 81% and
71% respectively. This compared favourably with the
numbers we released for the half year to 30 September
2019 (54% and 75% for one- and three-year firm-wide
outperformance respectively).
After markets were hit by the COVID-19 correction in
March 2020, the situation deteriorated to the point
where our aggregate performance looked decidedly
average over one and three years, where the percentages
of our strategies, measured on an aggregate asset-
weighted basis, that beat their benchmarks were 39%
and 55% respectively. Value strategies had a particularly
tough time. On the positive side our global and emerging
markets equity strategies have delivered excellent results.
Our South African domestic strategies also reported
strong performance. This period of market dislocation
caused by the COVID-19 “black swan” event will create
opportunities for substantial alpha generation over the
coming year and we intend to capture as many of these
opportunities as possible. The past year has not been our
best performance year, but the investment teams have
been here before and know exactly what they need to do
to improve the situation and they have the full support of
the leadership team to achieve this.
Ninety One has strong client relationships, built up over
many years. This is because clients come first at Ninety
One. This is non-negotiable and central to the way in
which we operate. Against a very challenging background
for the active investment industry, we have achieved net
inflows in line with the prior year. The flows were mainly
driven by our fixed income and equities offerings. Our
five client regions (known as “Client Groups”) have all
generated net inflows with the UK, Africa and Europe the
best performers.
Our focus on developing our outcomes-based offerings
across the advisor market was also reflected in strong
inflows in certain multi-asset strategies. We remain
confident that our substantial investments in our Americas
and Asia Pacific Client Groups will deliver value for our
shareholders over the long term.
Over the past year, Ninety One has increased its investment
in technology to support its front office investment and
client-facing teams. We are acutely aware of the benefits
of our single and well-invested operations platform, which
we have built over many years. The fact that we could
grow over the past year, demerge, list and rebrand on
schedule whilst coping with the COVID-19 imperative to
enable our people to work from home without a major
incident, tells the story of a robust, experienced,
well-invested and well-run operations platform.
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Chief Executive Officer’s Review
Net flows by Client Group1
£m
4
1
Firm-wide investment performance3
As at 31 March 2020
%
1,444
2,670
243
1,620
(614)
FY18
593
981
2,908
1,703
(92)
FY19
66
256
1,549
1,835
2,342
FY20
United Kingdom
Americas
Africa
Europe
Asia Pacific2
Net flows by asset class1
£m
71
1,212
4,583
(215)
(288)
FY18
227
280
447
2,391
217
108
751
2,435
2,748
2,537
FY19
FY20
Fixed income
Alternatives
Equities
Multi-asset
SA fund platform
Net flows by client type1
£m
2,292
3,071
4,288
3,666
2,382
1,805
FY18
FY19
FY20
Advisor
Institutional
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Since
inception
10-year
5-year
3-year
1-year
71
79
29
21
44
45
61
56
55
39
Outperformance
Underperformance
Mutual fund performance4
As at 31 March 2020
%
10-year
5-year
3-year
1-year
36
31
33
28
48
7 9
31
22
17
19
23
40 7
34
15
1st quartile
3rd quartile
2nd quartile
4th quartile
1. Net inflows of £5.4 billion in financial year 2018, £6.1 billion in financial
year 2019 and £6.0 billion in financial year 2020.
2. Asia Pacific includes Middle East.
3. Firm-wide outperformance (underperformance) is calculated as the
sum of the total market values for individual portfolios that have positive
active returns (negative active returns) on a gross basis expressed as
a percentage of total AUM. Our percentage of firm outperformance is
reported on the basis of current AUM and therefore does not include
terminated funds. Total AUM excludes double-counting of pooled
products and third-party assets administered on our SA fund platform.
Benchmarks used for the above analysis include cash, peer group
averages, inflation and market indices as specified in client mandates
or fund prospectuses. For all periods shown, market values are as at
the period end date.
4. Mutual fund performance and ranking as per Morningstar data using
primary share classes net of fees to 31 March 2020. Peer group
universes are either IA, GIFS or ASISA sectors as classified by
Morningstar. Cash or cash-equivalent funds are excluded from
the charts. Mutual fund performance weighted by AUM.
Percentages may not add up to 100% due to rounding.
People and culture
This business is an intellectual capital business. We have
deliberately opted for a capital-light, organic model to
emphasise the fact we have built this business around
our people. At Ninety One, talented people from diverse
backgrounds enjoy working together in a demanding,
performance-driven and collaborative environment.
Teamwork is central to our success, but the individual is
also important. We care about results, but we care as
much about relationships. This approach sustains our
owner-culture, which is especially important in tough
times. It allows us to put clients first, to prioritise the
important over the urgent, and to think long term
when short-term pressure is high.
Sustainability
In spite of many other short-term concerns, we have no
hesitation to express our commitment to sustainability in
challenging times like these. This is no time to cut back on
our commitment to ensuring ESG integration in all our
investment processes; we continue to strive to mobilise
capital and encourage the companies in which we invest
to pursue a more sustainable future. Climate change is a
global emergency which needs urgent attention. Within
our invest, engage and inhabit framework, Ninety One
attempts to address the sustainability challenge in a
comprehensive way. We are committed to investing
client capital responsibly in support of a more sustainable
world, to engage society through advocacy on the
importance of sustainability and to inhabit the world
as a business in a way which reflects our commitment
to responsible citizenship.
Outlook
As we look ahead to the new year, we recognise
the challenging market conditions and competitive
environment.
Our well-tested and diverse set of investment capabilities
are in areas relevant to our clients, as evidenced by recent
flows. We have solid bridgeheads into the largest markets
in the world and we have maintained positive momentum
in our original markets. We expect the appetite for risk
assets to increase over time as the extreme volatility
recedes and we see opportunities for alpha generation.
Notwithstanding these opportunities, we expect
significant revenue pressure in the coming period.
Our response will be one of strict prioritisation and cost
discipline, but without impairing our ability to serve our
clients in these uncertain times.
Ninety One is committed to doing its best for all
stakeholders in the ongoing battle against the COVID-19
pandemic and its devastating economic consequences.
We will do this by remaining focused on our clients and
the investments we make on their behalf. We recognise
the key to our long-term growth is maintaining client
relevance and delivering investment performance.
Furthermore, we will engage and support the companies
we invest in, care for our people and contribute to the
societies we serve.
We believe our staff stability and strategic clarity position
us well for the long term. We intend to use this moment of
market and economic dislocation to inspire ourselves to
build a better firm, develop better ways of investing and
renew our commitment to building a better world. The
people of Ninety One fully intend to pursue our purpose
of investing for a better tomorrow.
Finally, I would like to thank our clients, shareholders,
regulators, board of directors and my colleagues at
Ninety One for their support through this time of change.
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Investing for a better tomorrow
6
1
Better firm
Better investing
Better world
Long-term investment excellence is our
primary function and is non-negotiable.
We aim to provide our clients with an
investment outcome that allows them
to achieve their financial goals.
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1
Our
Strategy
Strategic principles
Ninety One is a patient, organic, long-
term and intergenerational business.
Correspondingly, Ninety One’s strategy
is long-term and remains consistent
across reporting periods, based on
the following principles:
ɽ Ninety One offers organically-
developed investment capabilities
through active segregated
mandates and mutual funds
to sophisticated clients.
ɽ Ninety One operates globally in
both the institutional and advisor
space through five geographically
defined Client Groups.
ɽ Ninety One has an approach to
growth that is driven by structural
medium- to long-term client
demand and competitive
investment performance.
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See our principal risks on pages 50 to 57
Strategic priorities
1. Capture the growth
inherent in our current
capability set
2. Develop differentiated
strategies, anticipating
client needs
Why it is important
Ninety One’s investment capabilities
are aligned to industry demand and
the available revenue opportunities.
Ninety One believes its investment
capabilities are client relevant with
adequate diversity.
Clients are at the centre of what
we do. Therefore, we evolve our
investment offerings to align with
their needs and help them meet
their investment objectives.
Ninety One has a demonstrable track
record of expanding its offering
across asset classes to meet future
client demand and we will continue to
adopt this approach and long-term
thinking in the way we operate and
serve our clients.
3. Focus on growth
4. Ensure sustainability
5. Continuously invest in
in professionally
intermediated
channels (advisor
and institutional)
is at the core of
our business
our people and build
an intergenerational
business
In the advisor channel, Ninety One has
access to key portfolio assemblers and
financial institutions across all its Client
Groups, and its outcomes-based
offerings are positioned to capture
flows from intermediaries and their
clients who increasingly seek solutions.
The rising importance of the
sustainability agenda for society,
investors and business, places an
Ninety One is a people business with a
clearly defined culture. We enable our
people to have the freedom to create
obligation on investment managers.
within clear parameters of values, team
Ninety One is an active steward
of capital with ESG investment
and strategy.
This culture is a vital element of Ninety
considerations and sustainability factors
One’s long-term success and is conducive
In the institutional channel, Ninety One’s
integrated across our strategies as well
to building an intergenerational business.
differentiated capabilities and strong
traction with investment consultants
enable unique entry to globalising
capital pools, with investors in large
markets. Ninety One also remains
focused on the needs of our original
markets, South Africa and the UK.
as dedicated sustainability strategies,
helping to mitigate risks and enhance
value for clients.
In addition to investing our clients’ assets
responsibly, we also engage actively to
promote sustainability and try to inhabit
our communities as responsible citizens.
Key performance indicators
ɽ Net flows
ɽ Investment performance
ɽ Adjusted EPS
ɽ Client relationships and reputation
Progress in financial year 2020
Progress in this area was reflected in
our significant net inflows for the year
of £6.0 billion, a testament to solid
and deep client relationships and a
well-diversified product offering.
Net inflows into our most established
markets of the UK and Africa were
strong at £2.3 billion and £1.8 billion
respectively, driven mainly by our
established fixed income and
specialist equities strategies.
Similarly, fixed income and equities
saw significant overall net inflows
of £2.5 billion and £2.4 billion
respectively.
As ever, we continued to build
long-term relationships with our
clients, which were reflected in
various new and expanding
mandates during the year.
Although investment performance
was solid and improving for most of
the year, short-term performance
was affected in the last month of the
financial year. This will continue to be
an area of ongoing focus across our
capabilities in the year ahead.
ɽ Net flows
ɽ Investment performance
ɽ Client relationships and reputation
ɽ Net flows
ɽ Commitment to sustainability
ɽ Investment performance
ɽ Client relationships and reputation
ɽ Adjusted EPS
ɽ Client relationships and reputation
We continued to invest across our
investment capabilities to develop
strategies and products to meet
our clients’ needs into the future.
Our recently-developed sustainability
strategies continued to gain investor
attention. Similarly, some of our
recently-launched credit strategies
and other fixed income strategies
attracted strong net flows in Europe.
Our investment in multi-asset over
recent years was also evident in the
net inflows into our outcomes-based
strategies, across a number of
geographies.
We continued to build our investment
capabilities in China and the rest of
Asia as we anticipate client needs in,
and into, the region.
There were positive net flows across
both the advisor and institutional
channels with £2.4 billion and £3.7 billion
in net flows over the period, respectively.
Our sustainability activities are
organised into three focus areas:
Invest: During the year, we improved
our ESG integration across all
Our focus on growing specialist equities
investment teams and continued to
in recent years has been favourably
develop and promote our dedicated
reflected in this year’s net flows, across
sustainability and impact strategies in
both the advisor and institutional
various markets.
channels.
Our focus on scaling our outcomes-
based offerings across the advisor
market was well reflected in strong
inflows in certain multi-asset strategies.
Institutional net flows were strong in
specialist equities and fixed income
and were positive in all regions.
Engage: Our commitment to sustainability
also extended into our engagements
with clients and partners, as well as how
we operate as a business.
Inhabit: As a business, we continued
to focus on energy, waste, water and
travel in our own drive towards the
reduction and mitigation of our
carbon footprint.
ɽ Key employee retention and
succession planning
ɽ Commitment to sustainability
ɽ Client relationships and reputation
ɽ Adjusted EPS
During the year, Ninety One continued
to evolve as a long-term and
intergenerational business.
In March 2020, we successfully
completed our demerger from Investec,
rebranded and listed on the LSE and JSE.
This historic moment and evolution of
the business did not change the culture
of the business or the stability of
our experienced staff complement.
Furthermore, the period of transition
did not affect or interrupt the ordinary
course of business, as is evident in the
financial results for the year, which
reflects the quality of Ninety One’s
people and leadership.
The listing also enabled all eligible staff
to become shareholders, collectively
owning more than 21% of the equity of
Ninety One. This supports the long-term
orientation of the firm and underwrites
our “owner-culture”.
Strategic priorities
1. Capture the growth
2. Develop differentiated
inherent in our current
strategies, anticipating
capability set
client needs
Why it is important
Ninety One’s investment capabilities
are aligned to industry demand and
the available revenue opportunities.
Ninety One believes its investment
capabilities are client relevant with
adequate diversity.
Clients are at the centre of what
we do. Therefore, we evolve our
investment offerings to align with
their needs and help them meet
their investment objectives.
Ninety One has a demonstrable track
record of expanding its offering
across asset classes to meet future
client demand and we will continue to
adopt this approach and long-term
thinking in the way we operate and
serve our clients.
Key performance indicators
ɽ Net flows
ɽ Net flows
ɽ Investment performance
ɽ Investment performance
ɽ Adjusted EPS
ɽ Client relationships and reputation
ɽ Client relationships and reputation
Progress in financial year 2020
Progress in this area was reflected in
We continued to invest across our
our significant net inflows for the year
investment capabilities to develop
of £6.0 billion, a testament to solid
and deep client relationships and a
well-diversified product offering.
strategies and products to meet
our clients’ needs into the future.
Our recently-developed sustainability
Net inflows into our most established
strategies continued to gain investor
attention. Similarly, some of our
recently-launched credit strategies
and other fixed income strategies
attracted strong net flows in Europe.
Our investment in multi-asset over
recent years was also evident in the
net inflows into our outcomes-based
strategies, across a number of
geographies.
We continued to build our investment
capabilities in China and the rest of
Asia as we anticipate client needs in,
and into, the region.
markets of the UK and Africa were
strong at £2.3 billion and £1.8 billion
respectively, driven mainly by our
established fixed income and
specialist equities strategies.
Similarly, fixed income and equities
saw significant overall net inflows
of £2.5 billion and £2.4 billion
respectively.
As ever, we continued to build
long-term relationships with our
clients, which were reflected in
various new and expanding
mandates during the year.
Although investment performance
was solid and improving for most of
the year, short-term performance
was affected in the last month of the
financial year. This will continue to be
an area of ongoing focus across our
capabilities in the year ahead.
3. Focus on growth
in professionally
intermediated
channels (advisor
and institutional)
4. Ensure sustainability
is at the core of
our business
5. Continuously invest in
our people and build
an intergenerational
business
In the advisor channel, Ninety One has
access to key portfolio assemblers and
financial institutions across all its Client
Groups, and its outcomes-based
offerings are positioned to capture
flows from intermediaries and their
clients who increasingly seek solutions.
In the institutional channel, Ninety One’s
differentiated capabilities and strong
traction with investment consultants
enable unique entry to globalising
capital pools, with investors in large
markets. Ninety One also remains
focused on the needs of our original
markets, South Africa and the UK.
The rising importance of the
sustainability agenda for society,
investors and business, places an
obligation on investment managers.
Ninety One is an active steward
of capital with ESG investment
considerations and sustainability factors
integrated across our strategies as well
as dedicated sustainability strategies,
helping to mitigate risks and enhance
value for clients.
In addition to investing our clients’ assets
responsibly, we also engage actively to
promote sustainability and try to inhabit
our communities as responsible citizens.
ɽ Net flows
ɽ Investment performance
ɽ Adjusted EPS
ɽ Client relationships and reputation
ɽ Commitment to sustainability
ɽ Client relationships and reputation
There were positive net flows across
both the advisor and institutional
channels with £2.4 billion and £3.7 billion
in net flows over the period, respectively.
Our focus on growing specialist equities
in recent years has been favourably
reflected in this year’s net flows, across
both the advisor and institutional
channels.
Our focus on scaling our outcomes-
based offerings across the advisor
market was well reflected in strong
inflows in certain multi-asset strategies.
Institutional net flows were strong in
specialist equities and fixed income
and were positive in all regions.
Our sustainability activities are
organised into three focus areas:
Invest: During the year, we improved
our ESG integration across all
investment teams and continued to
develop and promote our dedicated
sustainability and impact strategies in
various markets.
Engage: Our commitment to sustainability
also extended into our engagements
with clients and partners, as well as how
we operate as a business.
Inhabit: As a business, we continued
to focus on energy, waste, water and
travel in our own drive towards the
reduction and mitigation of our
carbon footprint.
Ninety One is a people business with a
clearly defined culture. We enable our
people to have the freedom to create
within clear parameters of values, team
and strategy.
This culture is a vital element of Ninety
One’s long-term success and is conducive
to building an intergenerational business.
ɽ Key employee retention and
succession planning
ɽ Commitment to sustainability
ɽ Client relationships and reputation
ɽ Adjusted EPS
During the year, Ninety One continued
to evolve as a long-term and
intergenerational business.
In March 2020, we successfully
completed our demerger from Investec,
rebranded and listed on the LSE and JSE.
This historic moment and evolution of
the business did not change the culture
of the business or the stability of
our experienced staff complement.
Furthermore, the period of transition
did not affect or interrupt the ordinary
course of business, as is evident in the
financial results for the year, which
reflects the quality of Ninety One’s
people and leadership.
The listing also enabled all eligible staff
to become shareholders, collectively
owning more than 21% of the equity of
Ninety One. This supports the long-term
orientation of the firm and underwrites
our “owner-culture”.
See further details on pages 34 to 40
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Tracking our
Strategic Progress
Our key
performance
indicators
(“KPIs”) enable
us to monitor
our progress
towards our
strategic
priorities.
Financial (quantitative) KPIs
Non-financial (qualitative) KPIs
Adjusted EPS
Investment
performance
Net flows
Key employee
retention and
succession
planning
Commitment to
Client
sustainability
relationships
and reputation
Strategic
progress
Metric
16.1p
Definition
Profit attributable to ordinary
shareholders, adjusted to
remove non-operating items,
divided by the number of
ordinary shares in issue.
Why it’s important
Adjusted EPS measures
the value generated for
shareholders.
55%
£6.0bn
3-year firm-wide investment
outperformance calculated
as the sum of the total
market values for individual
portfolios that have positive
active returns on a gross
basis, expressed as a
percentage of total AUM.
Investment performance is
an important indicator for
our continued investment
success and demonstrates
our competitive advantage
in helping our clients to meet
their long-term financial
objectives.
New funds from clients less
funds withdrawn by clients,
with any duplication
removed.
The retention and continued
The progress against
The achievement of
development of leadership.
objectives identified by the
consistent client service
The progress against
strategic initiatives
Board under the firm’s invest,
outcomes, and continued
specifically identified by
engage, inhabit sustainability
reputation and brand
framework.
strengthening.
the Board. This could include
growth initiatives in respect
of new products, strategies
or geographies.
Net flows indicate client
support and market
relevance.
Ninety One is a people
business at its core. The
stability of our leadership
team has a direct impact on
the firm’s ability to compete.
The consistent quality of
Ninety One’s client service,
together with a culture of
good conduct and risk
management, informs the
brand and reputation,
and is a source of
competitive advantage.
The achievement of our
strategic objectives will
drive the future growth
of Ninety One.
Ninety One is committed
to investing for a better
tomorrow and sustainability
is a key part of our purpose
as an active investment
manager. We are a long-term
business, allocating capital
on a global basis to meet the
future needs of society and
our enduring commitment to
sustainability is a key
differentiator.
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Methodology
At Ninety One we have tracked our progress using three key financial KPIs. Adjusted
EPS is the single most important financial indicator of our business performance.
Net flows and investment performance are also key drivers of value creation.
In relation to non-financial KPIs, the Board periodically identifies non-financial
indicators which are aligned with Ninety One’s short-term and long-term objectives.
While the specific non-financial KPIs may change over time, these will always
emphasise a focus on people and culture, risk management and conduct, and
client outcomes and reputation.
Adjusted EPS
Investment
performance
Net flows
Metric
16.1p
Definition
55%
£6.0bn
divided by the number of
ordinary shares in issue.
market values for individual
portfolios that have positive
active returns on a gross
basis, expressed as a
percentage of total AUM.
removed.
Why it’s important
Adjusted EPS measures
the value generated for
shareholders.
Net flows indicate client
support and market
relevance.
Investment performance is
an important indicator for
our continued investment
success and demonstrates
our competitive advantage
in helping our clients to meet
their long-term financial
objectives.
Financial (quantitative) KPIs
Non-financial (qualitative) KPIs
Key employee
retention and
succession
planning
Commitment to
sustainability
Client
relationships
and reputation
Strategic
progress
Profit attributable to ordinary
3-year firm-wide investment
shareholders, adjusted to
outperformance calculated
remove non-operating items,
as the sum of the total
New funds from clients less
funds withdrawn by clients,
with any duplication
The retention and continued
development of leadership.
The progress against
objectives identified by the
Board under the firm’s invest,
engage, inhabit sustainability
framework.
The achievement of
consistent client service
outcomes, and continued
reputation and brand
strengthening.
The progress against
strategic initiatives
specifically identified by
the Board. This could include
growth initiatives in respect
of new products, strategies
or geographies.
Ninety One is a people
business at its core. The
stability of our leadership
team has a direct impact on
the firm’s ability to compete.
Ninety One is committed
to investing for a better
tomorrow and sustainability
is a key part of our purpose
as an active investment
manager. We are a long-term
business, allocating capital
on a global basis to meet the
future needs of society and
our enduring commitment to
sustainability is a key
differentiator.
The consistent quality of
Ninety One’s client service,
together with a culture of
good conduct and risk
management, informs the
brand and reputation,
and is a source of
competitive advantage.
The achievement of our
strategic objectives will
drive the future growth
of Ninety One.
To see how our KPIs link to principal risks see pages 54 to 57
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Investing for a better tomorrow
2
2
Better firm
Better investing
Better world
We are dedicated to building a better world.
We are responsible citizens of our societies
and natural environment.
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2
Engaging with
our Stakeholders
“ The Board recognises that
the long-term success of our
business is dependent on the
success of all our stakeholders.
The Board has had regard to the
interests of our stakeholders while
complying with its obligations under
relevant Companies Acts to promote
the success of the company.
Notwithstanding the limited time
since its appointment, the Board has
discussed its obligations, including
how stakeholder engagement is
incorporated into our long-term
decision-making.”
Gareth Penny, Chairman
Section 172 statement
The Board is fully aware of its duties under s172(1) of the
UK’s Companies Act 2006 to promote the success of
Ninety One for the benefit of its shareholders as a whole,
while having regard to the interest of all Ninety One’s
stakeholders.
Ninety One respects and carefully considers the views
of its stakeholders. Where their priorities conflict, the
Board will exercise its independent judgement,
recognising in particular the need to act fairly
between all shareholders.
The pages that follow detail Ninety One’s engagement
with these stakeholders over the period under report.
Further details of the Board’s activities
are described on pages 58 to 112
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Our
clients
Our
people
Our
shareholders
Society and
environment
Who they are
We work with clients all over the world,
predominantly in the institutional and
advisor markets.
Our institutional clients include some of
the world’s largest private and public
sector pension funds, sovereign wealth
funds, central banks, insurers, corporates
and foundations.
Our advisor clients include large retail
groups, wealth managers, private banks
and intermediaries serving individual
investors.
Why we engage
We want to assist our clients to meet their
long-term financial objectives.
How we engaged in financial
year 2020
ɽ There are five regional Client Groups in
Africa, Asia Pacific, Europe, the UK and
the Americas, servicing clients from 19
locations.
ɽ More than 1,000 meetings per month
were conducted to engage with clients
and prospects.
ɽ An active programme to communicate
the demerger and listing of Ninety One
was executed.
ɽ A high-intensity virtual engagement
programme was implemented during the
COVID-19 lockdown period, including
client webinars, virtual meetings and
podcast distribution.
ɽ The Board received regular reports
on client engagement over the period.
Ninety One is a people business.
Our shareholders include both large
From the start, we have been committed
Our people are key to our ongoing
success. They engage with our clients
to deliver exceptional service, provide
support and ultimately help create
long-term value.
Ninety One values diversity and our
teams and operations are built on a
institutional and smaller retail investors,
to investing for a better tomorrow with
as well as our own people.
As part of the demerger, all our eligible staff
sustainability as a key part of our purpose
as an active investment manager.
were awarded shares in Ninety One and
Society and environment are represented
together with a previously acquired
by the local communities in which we
management stake, our people collectively
operate as a global business, as well as
hold over 21% of the business.
the world we live in.
founder-owner mindset and collaborate
Our former parent, Investec, is currently
We also recognise our responsibility to
to generate long-term value for our clients.
our largest single shareholder, holding
wider society and other key stakeholders,
c. 25% of our issued share capital.
including regulators and suppliers.
We want our people to be proud of Ninety
We want to offer our shareholders
We want to invest for a better tomorrow
One, enjoy the work they do and have the
participation in a simple and capital-light
and contribute to a better and more
freedom to be themselves, within a team
business model with an attractive
sustainable world.
context.
long-term financial profile.
ɽ There is regular engagement with our
ɽ In the ordinary course of business,
ɽ Ninety One has a dedicated cross-
staff through team, office and global
updates and communications. Their
opinions and relevant concerns are
as part of Investec, we participated
in two results roadshows (in May and
November 2019) reaching our largest
reported to the Board via our quarterly
shareholders in the UK and South Africa.
capability Sustainability team focused
on a wide range of ESG matters.
ɽ At the investment level, we continued
to develop new sustainability strategies,
board and committee meetings.
ɽ Furthermore, we held various dialogues
while continuing to embed ESG into
ɽ The Chief Executive Officer and senior
with our major shareholders in
our investment decisions.
management provided regular staff
updates to large audiences in the main
offices, with smaller offices invited. In
addition the Chief Executive Officer
regularly updated all staff via email,
sharing his views on a wide range
of topics.
preparation for the demerger and the
listing of Ninety One. We were pleased
to see our shareholders strongly
supporting the transaction.
ɽ We also held a Capital Markets Day in
December 2019 to provide existing and
future shareholders with information
ɽ To celebrate the independent listing
on our business and strategy.
of Ninety One, the Board gifted shares
to all eligible employees, in the spirit
of our culture.
ɽ The business encouraged and promoted
ɽ Our institutional shareholders can
contact our Investor Relations Team
and our retail shareholders are able
to contact our Company Secretariat
employee wellbeing, diversity and “doing
Team and Ninety One’s registrar
the right thing” via various initiatives
(Computershare), with any relevant
throughout the year.
queries.
ɽ At an engagement level, we continued
to develop and contribute to our
partnerships with industry leaders
and advocates, as well as engaging
our clients on sustainable investing.
ɽ We also aim to act sustainably in the
way we inhabit our own environment.
Over the year we have continued to
run our business responsibly with
various initiatives including managing
our energy consumption and working
with our communities globally.
ɽ Last year we established a Sustainability,
Social and Ethics Committee to ensure
there is a dedicated board-led forum
to consider our societies and
environments.
For more information, see Our Clients
on pages 26 to 27
For more information, see Our People
For more information on our relationships
For more information, see the
on pages 28 to 31
with shareholders, see page 64
Sustainability section on pages 32 to 40
Our
clients
Our
people
Our
shareholders
Society and
environment
Who they are
We work with clients all over the world,
predominantly in the institutional and
advisor markets.
Our institutional clients include some of
the world’s largest private and public
sector pension funds, sovereign wealth
funds, central banks, insurers, corporates
and foundations.
Our advisor clients include large retail
groups, wealth managers, private banks
and intermediaries serving individual
investors.
Why we engage
We want to assist our clients to meet their
long-term financial objectives.
How we engaged in financial
year 2020
ɽ There are five regional Client Groups in
Africa, Asia Pacific, Europe, the UK and
the Americas, servicing clients from 19
locations.
ɽ More than 1,000 meetings per month
were conducted to engage with clients
and prospects.
ɽ An active programme to communicate
the demerger and listing of Ninety One
was executed.
ɽ A high-intensity virtual engagement
programme was implemented during the
COVID-19 lockdown period, including
client webinars, virtual meetings and
podcast distribution.
ɽ The Board received regular reports
on client engagement over the period.
Ninety One is a people business.
Our people are key to our ongoing
success. They engage with our clients
to deliver exceptional service, provide
support and ultimately help create
long-term value.
Ninety One values diversity and our
teams and operations are built on a
founder-owner mindset and collaborate
to generate long-term value for our clients.
Our shareholders include both large
institutional and smaller retail investors,
as well as our own people.
As part of the demerger, all our eligible staff
were awarded shares in Ninety One and
together with a previously acquired
management stake, our people collectively
hold over 21% of the business.
From the start, we have been committed
to investing for a better tomorrow with
sustainability as a key part of our purpose
as an active investment manager.
Society and environment are represented
by the local communities in which we
operate as a global business, as well as
the world we live in.
Our former parent, Investec, is currently
our largest single shareholder, holding
c. 25% of our issued share capital.
We also recognise our responsibility to
wider society and other key stakeholders,
including regulators and suppliers.
We want our people to be proud of Ninety
One, enjoy the work they do and have the
freedom to be themselves, within a team
context.
We want to offer our shareholders
participation in a simple and capital-light
business model with an attractive
long-term financial profile.
We want to invest for a better tomorrow
and contribute to a better and more
sustainable world.
ɽ There is regular engagement with our
staff through team, office and global
updates and communications. Their
opinions and relevant concerns are
reported to the Board via our quarterly
board and committee meetings.
ɽ The Chief Executive Officer and senior
management provided regular staff
updates to large audiences in the main
offices, with smaller offices invited. In
addition the Chief Executive Officer
regularly updated all staff via email,
sharing his views on a wide range
of topics.
ɽ To celebrate the independent listing
of Ninety One, the Board gifted shares
to all eligible employees, in the spirit
of our culture.
ɽ The business encouraged and promoted
employee wellbeing, diversity and “doing
the right thing” via various initiatives
throughout the year.
ɽ In the ordinary course of business,
as part of Investec, we participated
in two results roadshows (in May and
November 2019) reaching our largest
shareholders in the UK and South Africa.
ɽ Furthermore, we held various dialogues
with our major shareholders in
preparation for the demerger and the
listing of Ninety One. We were pleased
to see our shareholders strongly
supporting the transaction.
ɽ We also held a Capital Markets Day in
December 2019 to provide existing and
future shareholders with information
on our business and strategy.
ɽ Our institutional shareholders can
contact our Investor Relations Team
and our retail shareholders are able
to contact our Company Secretariat
Team and Ninety One’s registrar
(Computershare), with any relevant
queries.
ɽ Ninety One has a dedicated cross-
capability Sustainability team focused
on a wide range of ESG matters.
ɽ At the investment level, we continued
to develop new sustainability strategies,
while continuing to embed ESG into
our investment decisions.
ɽ At an engagement level, we continued
to develop and contribute to our
partnerships with industry leaders
and advocates, as well as engaging
our clients on sustainable investing.
ɽ We also aim to act sustainably in the
way we inhabit our own environment.
Over the year we have continued to
run our business responsibly with
various initiatives including managing
our energy consumption and working
with our communities globally.
ɽ Last year we established a Sustainability,
Social and Ethics Committee to ensure
there is a dedicated board-led forum
to consider our societies and
environments.
For more information, see Our Clients
on pages 26 to 27
For more information, see Our People
on pages 28 to 31
For more information on our relationships
with shareholders, see page 64
For more information, see the
Sustainability section on pages 32 to 40
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Our Clients
6
2
We want to assist our clients
to meet their long-term
financial objectives.
We work with clients from all over the world,
predominantly in the institutional and advisor markets.
Our institutional clients include some of the world’s
largest private and public sector pension funds,
sovereign wealth funds, central banks, insurers,
corporates and foundations. Our advisor clients
include large retail groups, wealth managers, private
banks and intermediaries serving individual investors.
Our client proposition
We are active and responsible investors, who focus on
where we can make a real difference for our clients –
to help them achieve their long-term investment goals.
Delivering active investment returns over the long term
through investment excellence is our primary function.
If we do this well, we add meaningful value and we
create the opportunity to retain and grow our client
relationships.
At the heart of our business philosophy is “clients always
come first”. We invest clients’ money, not our own. Our
journey to date has taught us to see the world differently,
to recognise and embrace change and uncertainty.
It’s given us a different perspective on the issues that
matter, from how we invest sustainably to the major
thematic and structural challenges facing investors.
In the world of investing, we recognise that change is a
constant and that for our clients, investment firms that
understand and anticipate their needs are better
long-term partners. We are deeply committed to this
continuous process of understanding and anticipating
needs, and developing and presenting relevant
propositions to our clients.
Our client relationships are centred on actively delivering
positive investment outcomes, but importantly we believe
that the best long-term relationships go beyond that to
include outstanding, transparent client service and the
capacity to share a meaningful investment dialogue.
We aim to provide valued investment insight that can
contribute positively to solving a range of investment
challenges our clients face and help them to build better
portfolios for the long term. We put considerable
emphasis on developing frameworks to anticipate and
understand the long-term agents of change and the
implications these can have for investing in today’s
markets. Our client proposition incorporates a
platform for debate and knowledge transfer, learning
opportunities for all levels of our partner organisations
and access to our experts across investment disciplines.
We are constantly refining our ability to provide a
professional and market-leading experience whenever
our clients engage with us, and where possible, we want
to exceed their expectations.
AUM by Client Group
AUM by client type
Africa
35%
United Kingdom
21%
Asia Pacific
Europe
Americas
17%
14%
13%
Advisor
Institutional
32%
68%
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We believe productive client engagement needs to be
supported by helpful, clear and transparent reporting.
Our clients want to hear directly from their investment
managers. We work closely with our clients to provide
relevant tools and reporting to enable them to
understand their investments and the market context.
We believe taking a more holistic approach to our
reporting framework and discussions with clients
improves our understanding of each other and positions
our clients to make better portfolio decisions.
Read more about our approach to stewardship in the
Sustainability section on pages 34 to 37
Even though Ninety One works in professionally
intermediated channels, we know that there are
individuals at the end of the chain. We are motivated
by the fact that if we do our job well, more people
reach their financial goals.
We believe active managers play a unique role in allocating
capital responsibly. We are devoted to embedding
sustainability at the core of our investment thinking.
Our approach continues to evolve as we strive to help
investors align their capital with the transition to a
sustainable future.
For further details on our approach to sustainability,
see pages 32 to 40
As stewards of our clients’ capital, our distinctive
founder-owner culture helps ensure that Ninety One’s
interests and values are fully aligned with our clients’
long-term investment objectives. Each of our portfolio
managers invests alongside our clients in the strategies
they are managing. All of our employees have the
opportunity to own part of our firm and therefore link
their potential with the long-term outcomes experienced
by our clients. We see employee ownership as integral to
attracting and retaining talented people and to building
our investment capabilities to consistently meet our
clients’ investment expectations.
Client engagement
We are constantly striving to establish Ninety One as
a preferred investment partner for each of our client
relationships. Our clients and prospects are engaged and
serviced by our five regional Client Groups – Africa, Asia
Pacific, Europe, the UK and the Americas. We believe that
a local presence enhances our ability to build positive
relationships and ensure we understand our clients’
evolving needs over the long term. Each Client Group
tailors its approach to the markets and clients within
its remit, covering all aspects of client engagement
and servicing.
AUM by institutional clients
AUM by advisor clients
Pension funds
39%
Public authorities/
official institutions 23%
Insurance
14%
Corporates/other1 14%
Investments in
mutual funds
10%
Private banks/
wealth managers 39%
Retail banks/
insurance/IFAs2 35%
SA fund platform
19%
Other3
8%
1. “Other” represents c. 1% of institutional AUM.
2. “IFAs” represent Independent Financial Advisors.
3. “Other” represents sub-advised and legacy direct book.
AUM as at 31 March 2020. Percentages may not add up to 100%
due to rounding.
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Our People and Culture
Our culture
Our culture is one of the most important aspects of our
firm – for employees, prospective employees, clients or
shareholders. We are a people business and our culture
is a vital element of our long-term success. Since we
started, we have been built upon a foundation of
entrepreneurship which continues to operate with
a founder-owner mindset.
This is based on what we call “the freedom to create”
within the clear parameters of values, team and strategy.
We encourage direct, honest and open discussion,
ensuring diversity of thought and perspective. Our
people at Ninety One have the freedom to be themselves
which facilitates the combination of individual expression
with collective ambition and team discipline. We insist
on results but not at the expense of the human spirit.
Relationships matter and we balance relentless drive
with decency. A cornerstone of our culture is to
“do the right thing”.
We want our people to be proud
of Ninety One, enjoy the work
they do and have the freedom
to be themselves within a
team-oriented culture.
Our people around the world
Africa1
51%
UK & Europe
41%
Asia Pacific
Americas
4%
4%
1. Africa figure excludes 465 Silica employees.
We are a people business
Freedom to create within clear parameters of value, team and strategy
We strive to do
the right thing,
for clients, community
and the team
We combine
individual expression
with collective ambition
and team discipline
Relationships
matter
Our people have
the freedom to be
themselves
We insist on results
but not at the expense
of the human spirit
We balance
relentless drive
with decency
It is all about the drive to be better: better firm, better investing, better world
8
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Do the
right thing
Freedom
to create
Results and
relationships
Our values
Our philosophy of success
Our metrics of success
Our culture creates a home for
people who might not fit in traditional
organisations. We have one
overriding value: do the right thing.
This refers to how we strive to “do
the right thing” for our clients, our
communities and our colleagues.
We are acutely aware of our
responsibility to ensure that our
clients are always treated fairly.
Treating clients fairly is not merely
a regulatory requirement, but
rather a core part of our culture
and values.
One of the main tenets of, and the
philosophy behind our culture, is the
concept of freedom to create.
If freedom sits at the core of our
culture, strong relationships are
critical around that core.
This means that we strongly believe
in giving individuals the freedom to
be themselves within a team-
oriented context. We are creating a
culture where we can collectively
achieve together, without sacrificing
our individual selves, characters
and personalities. We believe that
people perform best when they are
liberated to pursue their passions
and interests and we strive to
give people the freedom to give
expression to their strengths, skills
and talents. Freedom is the greatest
driver of diversity in our business.
Strong relationships ensure diversity
in our business and an environment
where all people feel welcome and
respected and where all people feel
that they have a fair opportunity to
develop and contribute. We expect
people to perform both on the results
they deliver and the quality of their
relationships with each other. These
are our measures of success.
Our approach to remuneration is
outlined on pages 82 to 103
Talent development
Along with our philosophy of freedom to create that drives
our culture, our talent development programmes are
similar. We seek extraordinary performance and we
require talented people to achieve this. Therefore, as
an organisation, we encourage personal and professional
growth.
Skills training
We provide role-specific training for employees, which
ranges widely from courses covering specific software
packages to foreign languages and soft skills training.
These are delivered through both internal teams and
external suppliers. Employees are also encouraged to
attend seminars and conferences relevant to their roles
in order to gain more exposure to the wider industry.
We believe clear professional development opportunities
are key to attracting and retaining high-quality employees.
Testament to this are our high retention rates resulting in
an average tenure of over 14 years for our senior leadership
group. We encourage and empower our employees to
pursue their own professional development and we
believe this is to the ultimate benefit of our clients.
Professional qualifications
We are committed to maximising the potential of our
employees through professional educational development
and support our employees who wish to attain professional
qualifications such as the Chartered Financial Analyst
qualification and Investment Management Certificate,
as well as a range of other professional role-related
qualifications.
Annual performance review
All employees have an annual performance review during
which the employee and manager reflect on the past
year, and jointly identify training, learning and development
needs for the forthcoming year.
Graduate support
We aim to develop talent at all levels of our organisation
and our various graduate recruitment programmes have
been designed with that aim in mind. We have partnered
with various organisations across the globe, including
Investment20/20 in the UK and Girls Who Invest in the
US, to help build our pipeline of new talent.
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Our People and Culture
Leadership development
Leadership development at Ninety One is a key input
to the long-term success of the business. We focus on
developing people at all levels who can cultivate the
best out of those around them. We look at helping them
understand themselves, others and the organisational
context to create a total greater than the sum of their
parts. We focus on continuous learning at Ninety One,
where our developmental aspirations are more than
one-off interventions. This takes form in three stages,
each of which plays out through a journey of more than
12 months:
ɽ Emerge: Leading yourself, where high-potential
future leaders learn about what leadership is, their
own impact on others and how to continue to
develop themselves.
ɽ Connect: Leading others, where more established
leaders explore the concepts that allow teams and
individuals to perform.
ɽ Lead: Leading the organisation, a more bespoke
intervention where functional leadership teams in
the business strengthen the dynamics within their
team and also work on solving tangible problems
they face day to day.
Through these initiatives
we believe we encourage
and support our staff in all
areas of their professional
development.
Diversity and inclusion
We believe diversity helps to ensure the best outcomes
for our clients, shareholders, staff and the communities
in which we work. We are creating an environment where
everyone can be themselves and has the opportunity
to build a successful career, regardless of who they
are, or their background.
We abide by our diversity principles which help define
the framework of our ongoing journey with respect to
diversity and inclusion. These apply across the global
business and incorporate key aspects of a number of
more locally-based diversity and inclusion initiatives in
the countries in which we operate.
Race diversity
We work hard to ensure people of different backgrounds,
cultures, beliefs and perspectives feel comfortable and
welcome at Ninety One. We do not tolerate racism in our
business and believe diversity is essential to our firm’s
ability to compete, adapt and remain relevant. We are
taking concrete steps to ensure that we are proactively
combating racism, conscious and unconscious.
With regard to Black Economic Empowerment in South
Africa, we are determined to play our part in building a
country in which the majority of South Africans have a
fair chance to succeed, and we are building a firm that
is representative of the national population.
The Financial Sector Code in South Africa provides a
benchmark against which we determine our Broad-
Based Black Economic Empowerment (B-BBEE) rating.
We are a B-BBEE level 2 contributor.
Gender diversity
We are committed to attracting, developing and retaining
a diverse team of people and approach all decision-
making with a diverse set of perspectives. We believe
that this helps to ensure the best outcomes for our
stakeholders.
This year, we have continued our work on increasing
female representation in senior leadership roles. We
believe that the key to making further progress is to
make our senior business leaders accountable for
achieving diversity.
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Protecting our people
Ninety One prioritises the safety and wellbeing of its staff.
We have a range of firm-wide policies in place to protect
and maintain a safe and healthy working environment,
some of which are mentioned below.
Our Global Health and Safety Policy ensures that we
provide and maintain a safe working environment
across all of our offices, to promote welfare and mental
wellbeing. We are an equal opportunities employer and
our Equality Policy and Dignity at Work Policy are in place
to ensure equal and respectful treatment for all our
employees. This includes providing additional support to
meet the needs of those with disabilities. The policy also
outlines the types of behaviour that we consider to be
unacceptable and explains what solutions are available
if any employee has experienced any discrimination,
harassment, less favourable treatment or victimisation at
work. Our overarching value remains “do the right thing”
and it is within this context that our various policies exist.
We encourage our employees to speak up in the event
they become aware of malpractice either within Ninety
One or at any of its counterparties or clients. Our
Whistleblowing Policy ensures our employees feel safe to
raise any issues or concerns via a range of mechanisms,
including anonymously via a third-party hotline provider.
Partner organisations
We have partnered with a number of external organisations
and initiatives to support the development and growth of
our people, including:
Gender diversity1
Board
Senior management2
4
25
8
4
All staff
596
Male
Female
569
1. Figures for Ninety One employees, excluding Silica.
2. Senior management, excluding Executive Directors.
Over the year, we have taken the following steps:
ɽ Appointed a senior executive, responsible for
diversity and inclusion;
ɽ signed the Women in Finance Charter;
ɽ appointed a board of directors, where half of the
directors are female;
ɽ committed to achieving a target of 30% of women
in senior leadership by 2023; and
ɽ linked the pay of our senior executives to the delivery
of this target.
For more information on our approach to diversity and
inclusion, including our UK gender pay gap disclosures,
see our website, www.ninetyone.com
Networks
We are committed to promoting an inclusive work
environment for all. As such, our employee networks
are essential for creating inclusivity where everyone
can be themselves at work.
Inspire
Inspire, is a network created by women for women at
Ninety One. It enables the exchange of knowledge and
experiences in order to improve the opportunities for
career success and plays an important role in helping
us make our firm a more inclusive place.
Proud
Proud is our LGBT+ network which is designed to create an
internal community for our LGBT+ colleagues and their allies.
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Sustainability
2
3
We are committed to investing
for a better tomorrow, with
sustainability as a key part
of our purpose as an active
investment manager.
We believe that the privilege of investing our clients’
capital carries with it a responsibility to try to secure
a sustainable future. We aim to help our clients make
a positive difference.
With our roots in Africa, we know that well-directed
investment can transform lives for the better. For
over a decade, we have been investing in economic
development in Africa, mobilising finance to bring
health and prosperity to some of the continent’s poorest
communities. We also care deeply about preserving
the natural world. As well as investing sustainably,
we support initiatives to conserve wildlife.
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Our commitment to sustainability extends beyond
integrating it into the way we invest. We also engage
actively on these issues with our stakeholder
communities through knowledge exchange and
advocacy. Furthermore, we remain mindful of
the way we inhabit our environment.
Our sustainability activities are organised into
three focus areas:
Invest1
ESG analysis is integrated
across our investment strategies.
We also offer sustainable
investment solutions.
Engage
We seek to lead the conversation
on sustainable investing.
Inhabit
We believe change starts at
home. We run our business
responsibly and act sustainably.
1. Please see our Annual Stewardship Report on
www.ninetyone.com for more information.
Sustainability
Invest
4
3
We invest responsibly for
a more sustainable future
on behalf of our clients.
241
engagements spanning 32 countries
17,190
votes cast across 1,384
shareholder meetings
Our commitment
At Ninety One, we invest responsibly on behalf of our
clients. As a global investment manager, our essential
purpose is to preserve and grow the real purchasing
power of our clients’ assets over the long term in
accordance with their mandates. A key part of our
stewardship is the consideration and support of
sustainability.
We believe that active management has a unique role
in facilitating the allocation of capital in a responsible
manner and supporting the shift to a more sustainable
future. The investment management industry has an
extraordinary opportunity to generate attractive
long-term returns while contributing to positive social
and environmental outcomes. Financial capital, social
capital and natural capital must work together. This is
based on our view that considering material ESG risks
and opportunities should be integral to the investment
process and embedded in all investment strategies, as
we believe, they ultimately enable better investment
outcomes.
How we engage and vote
as investors
Engagements take place as an integral part of our
investment process. The investment teams initiate
engagement based on their investment processes
and priorities. We engage to improve transparency of
information and accountability of boards, and to preserve
and encourage the creation of sustainable value.
Ninety One votes at shareholder meetings throughout
the world as a matter of principle. We believe that once
we become investors, that is to say part-owners of
a company, we assume a duty of stewardship and
therefore take responsibility to support or sanction
as required. We follow the international corporate
governance best practice principles, as embodied by
the International Corporate Governance Network.
We also take into account regional/country-specific
market practice as the infrastructure that underpins
our decision-making.
During financial year 2020, we carried out 241
engagements across 32 countries and cast 17,190 votes.
Further details on our approach to active ownership
can be found in our Annual Stewardship Report.
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2. Our sovereign debt team, together with the London
School of Economics, published a paper on
the opportunity presented by sovereign debt
restructuring in Argentina to direct investment
into a climate-sustainable future.
3. We worked on our Task Force on Climate-related
Financial Disclosures (“TCFD”) response and expect
to disclose in line with the TCFD recommendations in
financial year 2021.
4. We participated in several collaborative engagements
most notably with Glencore through the Climate
Action 100+ initiative. This had a positive outcome,
with Glencore agreeing to cap its coal production.
Natural capital
Deforestation and the degradation of biodiversity and
productive land masses is a major concern for investors.
With WWF, we co-authored a report highlighting the
potential uses of geo-spatial data by investors. The report
argues that “advances in geo-spatial data and satellite
imagery could help sovereign debt investors better
assess and manage environmental risks”. The report
can be found on the Ninety One website.
For further details on our stewardship approach,
including highlights over the year, please refer to
Ninety One’s Annual Stewardship Report on the
Ninety One website.
www.ninetyone.com
Our responsible investing approach
On behalf of our clients, we invest responsibly, as follows:
1. We integrate ESG analysis across our investment
strategies as we believe this should enhance
long-term performance. By integrating ESG analysis,
our strategies consider the full spectrum of risks and
opportunities associated with an investment.
2. As an active investor, we engage with portfolio
companies and governments to encourage them
to address sustainability and improve their ESG
performance. We believe strongly in the power
of engagement to effect positive change.
3. We offer a growing range of sustainability and impact
strategies, giving investors the chance to put their
capital to work in support of, and to benefit from, the
sustainability revolution.
For more information on our sustainable investing strategies,
visit our website, www.ninetyone.com
Tackling the big issues
Alongside stakeholders across the industry, we seek to
address sustainability issues and related market-wide
systemic risks that have wide-reaching implications on
society, the environment and the economy. We believe
that the Sustainable Development Goals (“SDGs”)
provide a useful and durable framework for investors
to approach the shift we are seeing towards a more
equitable society and a less carbon intensive economic
model.
Our work over the year considering the implications of
climate change and the destruction of natural capital is
outlined below.
Climate change
We believe investors have a significant role to play as
active owners of corporations in the transition to a low
carbon economy. During this year we continued our
efforts across advocacy groups, company engagements,
and research, to understand and respond to the
investment implications of climate change. Notable
developments during the year, include:
1. We signed the Global Investor Statement to
Governments on Climate Change, tabled at COP25
in December 2019. The statement urges governments
to tackle the global climate crisis and proposes
phasing out thermal coal, taxing carbon pollution,
ending fossil fuel subsidies, and driving more
far-reaching industrial change.
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Sustainability
Engage
6
3
Through engaging with our
stakeholders, we contribute
actively to the conversation
on sustainable investing.
The role of business in society
We believe it is important to not only manage our clients’
assets in a responsible manner but also to proactively
engage our clients and stakeholders on the subject
of sustainability and encourage our clients on their
journey towards more sustainable long-term investing.
A sustainable future depends on recognising that
business is part of society, and that both depend
on the natural world.
Through engagements with relevant bodies, we seek
to play our part in accelerating the transition to a more
sustainable way of thinking and acting.
Global engagement
Our leadership team is engaged with global organisations
committed to the advancement and implementation
of sustainable development. Through our participation
in groups such as the Business and Sustainable
Development Commission, the Coalition for Inclusive
Capitalism, the Sustainable Development Goals Centre
for Africa, the UN Sustainable Development Solutions
Network and PRI, our dialogue with international
business, governments, labour representatives and
civil society leaders aims to articulate the case for
sustainable development. This includes establishing
policies and financing mechanisms that help businesses
grow sustainably, create jobs and contribute to the
SDGs. We are also an active participant in African
private markets industry associations, seeking to
contribute to the wider debate around mobilising
capital to address the continent’s needs.
Leading the conversation
Ninety One’s Investment Institute (the “Institute”) is an
engagement platform that delivers strategic investing
insights and analysis to our clients across asset classes,
investment strategies and borders. We provide in-depth
analysis and research on key geopolitical, economic
and investment trends. Our work draws on our firm’s
investment capabilities and partnerships with leading
academics and external practitioners, and seeks to
empower our clients with insight and knowledge. With
this collaboration, central themes of the Institute’s work
have been portfolio resilience, sustainability and the
application of ESG principles to investing. These have
culminated in the publication of annual journals
and papers.
For example, our “Energy 3.0” series investigates
the third energy transition as the world moves to a
decarbonised growth model. It looks at past energy
transitions, structural growth areas and the need for
positive investment. The series proposes a decision-
making framework to help asset owners assess and
report the climate risk in their portfolios.
In our Journal 5, we focused on what asset owners can
do to realign capital sustainably for the long term. We
explored the mounting empirical evidence in support of
long-horizon investing, how key stakeholders can move
from talking about long-termism to taking action, and
what role sustainability and ESG play.
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Investment Institute’s latest
publications on sustainability
Selection of our engagement partners
The publications can be accessed via our website,
www.ninetyone.com
Sustainability Workshop
In November 2019, we welcomed almost 50 clients
to our Sustainability Workshop in London.
The gap between how climate change is impacting
our planet and the progress being made to green
the world’s financial systems remains stark. We were
keen to empower investors to find solutions to
climate change through active engagement
and positive investment.
We heard our clients, consultants, expert guest
speakers and portfolio managers discuss the
progress being made, and witnessed the level of
debate and engagement that took place during the
event. We combined specific presentations with
panel discussions and covered a broad range of
topics, including the Just Transition framework,
tackling climate risk in portfolios and the advances
being made in sustainability data and research.
The evening saw the annual Tusk Conservation
Awards, which highlighted the phenomenal work
undertaken by individuals in the face of great
danger to protect Africa’s natural heritage.
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Sustainability
Inhabit
8
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We believe change starts at home.
We run our business responsibly
and act sustainably.
£2.9m
contributed to COVID-19 relief efforts
4%
reduction in total tCO2e per FTE
At Ninety One we try to inhabit our own ecosystem in
a manner that ensures a sustainable future for all. This
includes the way in which we look after our people and
the way we govern our firm.
In financial year 2020, our total GHG emissions reduced
2% to 16,941 tonnes of carbon dioxide equivalent
(“tCO2e”). Total tCO2e per full time employee, our
intensity metric, reduced 4%.
For more information, please see Our People section on
pages 28 to 31 and the Governance section from page 58
As a long-term investor on behalf of our clients, we are
aware of our broader responsibility to society. We focus
on making a positive impact via our Inhabit initiatives,
which support local communities and their environments.
Our main charitable efforts are directed towards
community and conservation.
Managing our energy consumption
As a newly listed business, we are looking to expand our
existing corporate sustainability strategy and find new
ways to reduce our direct carbon impact and encourage
positive sustainable behaviour. We strive to become
carbon neutral in our operations from a Scope 1 and
Scope 2 emissions viewpoint. We calculated our
carbon footprint in accordance with the international
Greenhouse Gas (“GHG”) Protocol’s Corporate
Accounting and Reporting Standard. Our data has been
gathered in line with requirements of the UK government’s
Streamlined Energy and Carbon Reporting framework,
and we have worked with the Carbon Trust who audited
and verified our carbon footprint under Scope 1 and 2.
We also monitor our Scope 3 emissions for water, waste
and business travel and continue to implement measures
on mitigating our Scope 3 emissions.
Total CO2e emissions (tonnes)
Scope 1 (fuel and refrigerant)
Scope 2 (electricity)
Scope 3 (paper, waste and travel)
Total GHG emissions
Energy consumption (kWh)1
Full time employees (“FTE”)
Total CO2e per FTE
1. Energy consumption in kWh for Scope 1 and 2.
Our Global Scope 1 emissions, which relate to fuel and
refrigerant usage, reduced 40% to 313 tCO2e. This is largely
due to work undertaken in financial year 2020 to remove
refrigerants with ozone-depleting potential, as well as
a reduction in refrigerant leaks. The Global Scope 2
electricity consumption emissions increased 9% to 8,009
tCO2e. This reflects the additional office space required
as part of the demerger from Investec and the new office
building in London. Our Global Scope 3 emissions, which
include paper, waste and business travel, reduced 8% to
8,619 tCO2e, driven by the reduction in employee air travel.
We are also supportive of the TCFD by reinforcing our
commitment to climate change. We look to report Scope
3 emissions in relation to our underlying client portfolios
in line with the TCFD recommendations in financial year
2021. No energy efficiency measures were undertaken
in 2020, though Scope 1 emissions have reduced due
to maintenance and upgrade work on refrigerant
systems that has reduced fugitive emissions.
We continue to assess viable options for sourcing our
energy from renewable options. As part of Investec,
we chose to purchase carbon credits to neutralise the
remaining carbon impact from running a global business.
For example, for our Scope 3 employee travel-related
emissions, we mitigated some of our carbon footprint with
the help of our strategic partners – Trees for Cities and
Woodland Trust in the UK and Greenpops in South Africa.
2020
UK and
offshore
147
780
3,755
4,682
Global
313
8,009
8,619
16,941
2019
UK and
offshore
153
689
3,398
4,240
Global
525
7,329
9,393
17,247
3,855,750
11,310,986
3,324,197
10,612,921
443
10.6
1,165
14.5
432
9.8
1,139
15.1
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Working with communities
We support a number of initiatives in various parts of the
world both through donations and through our employees
offering up their time. In South Africa, some of these have
included Promaths (a programme aimed at improving Maths,
Science and English for disadvantaged communities), the
Ikasuasa Student Financial Aid Programme and Fundisa.
Other notable partnerships include:
Tusk Trust
The Tusk charity addresses the urgent need to halt the
decline of Africa’s natural heritage and build a sustainable
future for the people and wildlife of the continent.
JL Zwane
In 2003, Ninety One and other corporate sponsors
provided the means to build the JL Zwane community
centre in Gugulethu, an impoverished township in Cape
Town. Today, this facility serves the needs of the entire
community, providing services including education,
adult literacy and HIV/Aids counselling and care. Our
continued commitment to JL Zwane includes partnering
with the Living Maths initiative to provide maths lessons
to over 140 learners every year.
Songo.info
In 2015, we established our partnership with songo.info,
a sports and education charity, enabling its development
programme to be provided to more children in the
township of Kayamandi in the Western Cape.
COVID-19 response
Our response to the COVID-19 pandemic is
organised around four key categories:
ɽ Our people: The main priority has been their
care and wellbeing. We did not furlough or
make any of our staff redundant as a result of
COVID-19. We enabled our people to work
from home and provided various webinars
and forums to encourage interaction. These
included 35 virtual check-ins with staff and our
Chief Executive Officer (over five weeks), and
webinars for managers to discuss virtual
meetings and leadership support.
ɽ Our clients: The focus here has been on
delivering and intensifying good quality service.
We remain fully operational globally, throughout
the lockdowns, continuing client engagement
and service virtually. Our technology allowed
us to reach and interact with large numbers
of clients and advisors, which has been a very
positive outcome in an otherwise difficult
situation. Our client engagement and reach
since 31 March 2020 has extended to well over
40,000 clients and advisors (via more than 100
webinars) and continues, as all parties have
adapted to virtual and digital communication.
ɽ Our shareholders: We have maintained the
clarity of our proposition and focus on results.
Our strategy is unchanged, and we remain
sufficiently capitalised. In relation to our year
end reporting to 31 March 2020, we managed
to successfully release our full year results via
webcast and engage with our main institutional
shareholders, without any delay, using virtual
forums.
ɽ Society: At Ninety One, we continued to
conduct our business and operations as
responsible citizens. We have contributed
£2.9m to COVID-19 relief efforts and initiated
a staff donation matching scheme. Since the
beginning of the outbreak, we have continued to
support our suppliers, while demanding they act
in the spirit of solidarity towards their people.
Furthermore, in June 2020, we also announced
plans to launch the Ninety One SA Recovery
Fund, to support South African businesses in
need of capital during these unprecedented
and challenging times.
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Sustainability
Acting responsibly as a corporate
citizen
At Ninety One, we are committed to acting responsibly
throughout all our activities, and have a number of
group-wide policies in place to ensure we continue to
operate in a socially responsible and compliant manner.
Our approach to anti-bribery and anti-corruption
At Ninety One, through our culture and values, we are
committed to the highest standards of integrity and
ethical behaviour. We demand integrity in all internal
and external dealings, consistently displaying the moral
strength of the firm and our employees, and behaviour
which promotes trust. We have a zero-tolerance
approach to bribery and corruption. Our employees
undertake training to ensure they understand their
responsibilities and are aware of the consequences of
the failure to comply with anti-bribery and anti-corruption
policies and standards in all the relevant jurisdictions in
which we operate.
Ninety One has established regional compliance teams
responsible for reviewing and updating internal policies
to enable our business and our employees to manage the
legal and reputational risks associated with bribery and
corruption.
The primary Ninety One policies established to mitigate
bribery and corruption risks are the Anti-Bribery and
Corruption Policy, the Anti-Money Laundering Policy,
the Whistleblowing Policy, the Third Party Benefits Policy,
the Prevention of Tax Evasion Policy and the Conflicts
of Interest Policy. The key elements of these policies
are also codified within the firm’s Global Code of Ethics,
which all staff members attest to annually, and in respect
of which they receive training.
Our approach to human rights
Support for, and protection of, human rights is embedded
in our core values. Ninety One is committed to ensuring
that our supply chain is free of any slavery and/or human
trafficking. We evaluate third-party relationships
with these issues in mind and further expect that all
organisations that we deal with, who fall within the ambit
of the UK’s Modern Slavery Act, are fully committed
to the principles embodied therein. We will not knowingly
support and/or do business with any third party who
is involved in slavery and/or human trafficking.
Our Modern Slavery Act Statement is published on our
website and includes details on the due diligence and
procedures we take to mitigate modern slavery and
human rights risks in our businesses dealings.
Data Protection and Privacy Policy
Our Data Protection and Privacy Policy promotes sound
practices for the collection and processing of personal
data to ensure that Ninety One acts in accordance
with global data protection and privacy regulations,
in addition to our fiduciary responsibilities towards our
clients and employees. Our people are aware of their
data protection responsibilities and receive the
appropriate training.
Our relationships with regulators
Ninety One is a dual-listed company, with listings on the
LSE and the JSE, and with regulatory obligations in the
many jurisdictions in which we operate. We maintain
constructive and proactive working relationships with
our regulators around the world, as this enables us to
conduct our business to the standards expected by
our clients, our shareholders, our employees, our
regulators, and the communities in which we operate.
We participate actively in industry forums in the markets
in which we operate, with the intention of constructive
development of policy and regulation. Our Board and our
Audit and Risk Committee are comprehensively engaged
in the material regulatory matters and policy initiatives
that Ninety One deals with.
Working with our suppliers
At Ninety One, we rely on external service providers to
provide goods and services globally to supplement our
own infrastructure. We value the relationships we have
built with our suppliers over the years and recognise the
value they provide to our business.
To ensure that the suppliers who provide us with
critical services adhere to the same high standards
and behaviours we uphold across Ninety One, we have
established a high level of oversight, focused on the
selection, onboarding, monitoring and reporting across
our supply chain. We also review their compliance with
human rights legislation, ethical sourcing, bribery and
corruption, living wages, and diversity and inclusion.
In keeping with our principle of “doing the right thing”,
our oversight also ensures that our suppliers are paid
promptly, and that we provide clear guidance on our
terms. We review our procedures bi-annually, to ensure
that our approach remains appropriate and that the
existing relationships continue to add value to our own
infrastructure.
Our global approach to tax
At Ninety One, we are committed to complying with all
our tax obligations wherever we operate. We seek to do
this in a manner consistent with both the spirit and the
letter of the law. In practice, this means we seek to ensure
that we comply with our tax reporting and payment
obligations in a timely manner and keep tax authorities
up to date on major changes within our business. Where
a tax authority has questions, or we disagree about a
tax treatment, we engage with those tax authorities
in a cooperative and transparent way.
Our Group Tax Strategy sets out the framework for managing
taxes, including information on our tax risk management and
governance. This is reviewed and approved by the Board
annually and is published on our website.
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Non-financial
Information Statement
(sections 414CA and 414CB of the Companies Act)
Ninety One aims to comply with the non-financial reporting requirements contained in sections 414CA and 414CB of
the Companies Act 2006. The below information is intended to help stakeholders better understand how we address
key non-financial matters and guide them to where the relevant non-financial information can be viewed.
Reporting requirements
Policies and publications
Where to find necessary information
Environmental matters
Annual Stewardship Report
Employees
Sustainability
Global Code of Ethics
Whistleblowing Policy
Equality Policy
Dignity at Work Policy
Diversity and Inclusion
Global Health and Safety Policy
Social matters
Global Code of Ethics
Prevention of Tax Evasion Policy
Conflicts of Interest Policy
Data Protection and Privacy Policy
www.ninetyone.com
See pages 32 to 40
See page 40
See page 31
See page 31
See page 31
See page 30
See page 31
See page 40
See page 40
See page 40
See page 40
Human rights
The Modern Slavery Act Statement
See page 40
Annual Stewardship Report
www.ninetyone.com
Anti-corruption and
anti-bribery matters
Other matters
Anti-Bribery and Corruption Policy
Anti-Money Laundering Policy
Third Party Benefits Policy
Business model
Non-financial KPIs
Principal risks
Group Tax Strategy
See page 40
See page 40
See page 40
See pages 8 to 9
See page 21
See pages 54 to 57
See page 40
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Financial
Review
—— Kim McFarland
Finance Director
“ I am pleased to present
Ninety One’s first set of financial
results as an independently
listed company.”
Summary income statement1
£ million unless otherwise stated
Closing assets under management (£ billion)
Net flows (£ billion)
Average assets under management (£ billion)
Management fees
Performance fees
Foreign exchange gains and other income
Adjusted operating revenue
Staff expenses
Non-staff expenses
Adjusted operating expenses
Adjusted operating profit
Adjusted net interest income
Silica profit
Profit before tax and exceptional items
Exceptional items
Ninety One share scheme implementation
Other exceptional items
Profit before tax
Tax expense
Profit after tax
Average fee rate (bps)
Adjusted operating profit margin
Compensation ratio
Full-time employees
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2020
103.4
6.0
118.3
565.7
21.5
0.8
588.0
(258.8)
(139.3)
(398.1)
189.9
4.5
1.9
196.3
13.1
(10.9)
198.5
(42.5)
156.0
47.8
32.3%
44.0%
1,165
2019
111.4
6.1
108.0
524.6
11.0
5.0
540.6
(242.6)
(125.5)
(368.1)
172.5
5.5
1.4
179.4
—
(1.0)
178.4
(38.6)
139.8
48.6
31.9%
44.9%
1,139
Change %
(7)
(1)
10
8
95
(84)
9
7
11
8
10
(18)
36
9
n.m.
n.m.
11
10
12
n.m
n.m
n.m
2
1. Please refer to the alternative performance measures explanations and definitions on pages 47 to 48 and pages 174 to 175 respectively.
Ninety One has delivered a strong set of financial results
in the current difficult market environment. Our adjusted
operating profit increased 10% to £189.9 million (2019:
£172.5 million). Adjusted operating profit margin of 32.3%
increased on the prior year (2019: 31.9%), principally due
to higher performance fees earned. The profit before tax
and exceptional items increased 9% to £196.3 million
(2019: £179.4 million).
The torque ratio of 5.4% was slightly lower than the
prior year (2019: 5.9%), as a result of similar net flows
but higher opening AUM of £111.4 billion (31 March
2019: £103.9 billion).
The average AUM increased 10% to £118.3 billion
(31 March 2019: £108.0 billion), reflecting the positive
market environment for most of the financial year.
Response to COVID-19
The safety and security of our people and clients is
of paramount importance. We continue to monitor and
comply with the relevant government recommendations
around the spread of COVID-19, across all our geographies.
We have put in place a range of precautionary measures,
including restrictions of all non-essential travel, and we were
able to implement working from home arrangements for all
our staff within a week of listing as an independent business.
Our people have worked hard to achieve this with no
material impact on our operations or client experience.
We have not needed to make any of our staff redundant
or furloughed as a result of COVID-19, and we contributed
£2.9 million to COVID-19 relief efforts.
Assets under management (“AUM”)
Ninety One achieved net inflows of £6.0 billion, in line
with the prior year. Our closing AUM reduced by 7%
to £103.4 billion (31 March 2019: £111.4 billion), as the
net inflows were more than offset by negative market
movements in the last month of the year. The market
and foreign exchange impact for the year was negative
£14.0 billion (31 March 2019: positive £1.4 billion).
Adjusted operating revenue
Management fees increased 8% to £565.7 million (2019:
£524.6 million), below the 10% growth in average AUM,
reflecting downward fee pressure due to some new
mandates awarded at lower fee rates. Average fee rates
were also impacted by the AUM mix, with growth in lower
fee rate investment strategies, such as fixed income,
relative to higher fee rate investment strategies, such
as alternatives. The average fee rate reduced 0.8 bps
to 47.8bps (2019: 48.6bps).
Performance fees increased to £21.5 million (2019:
£11.0 million) reflecting relative investment outperformance
in a selection of strategies, particularly in South African
equities.
Foreign exchange gains and other income of £0.8 million
was lower compared to the prior year (2019: £5.0 million)
mainly due to lower foreign exchange gains earned as
sterling strengthened and mark-to-market losses on
private equity co-invested capital.
Movement in profit before tax ("PBT") and exceptional items
£m
240
220
200
180
160
140
120
100
179.4
d
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F
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10.5
41.1
(4.7)
(16.2)
196.3
(13.8)
13.1
198.5
(10.9)
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1.
Other items include foreign exchange gains and other income, adjusted net interest income, and Silica profit.
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Financial Review
Adjusted operating expenses
£m
16.2
5.1
2.1
2.0
4.6
398.1
368.1
400
380
360
340
320
300
9
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Adjusted operating expenses
Adjusted operating expenses increased 8% to £398.1 million
(2019: £368.1 million), largely driven by an increase in staff
expenses, as well as higher accommodation expenses.
The increase in accommodation expenses was primarily
due to a new office building in London, into which we
have now moved, with the resulting double rent and
associated expenses.
Included in the operating expenses are the new ongoing
expenses we now incur as a listed business demerged
from Investec. These expenses of £3.6 million (2019:
£0.2 million) represent less than 1% of our operating
expenses and will increase in line with inflation.
Staff expenses
Ninety One is a people business, and our staff expenses
represent the largest portion of our expense base.
Total staff expenses (excluding Silica staff expenses
and deferred employee benefit scheme movements)
increased by 7% to £258.8 million (2019: £242.6 million).
This reflects a 5% increase in average headcount to 1,148
(2019: 1,094), with the remainder due to inflation and
market-related adjustments. The growth in headcount
largely relates to the replacement of functions previously
provided by Investec such as IT support services and
internal audit.
Approximately two-thirds of the operating expenses
related to staff expenses and over 50% of these are
variable and fluctuate in line with adjusted operating
profit. This ensures that the variable component of staff
expenses is aligned with our financial performance.
The compensation ratio reduced to 44.0% (2019: 44.9%),
mainly due to the growth in management and performance
fees being higher than the growth in staff expenses.
4
4
0
2
0
2
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Non-staff expenses
Non-staff expenses increased 11% to £139.3 million (2019:
£125.5 million). This largely reflects non-recurring items
such as duplicate London rental and one-off donations
to COVID-19 relief efforts of £2.9 million, as well as an
increase in systems and other expenses. We expect the
accommodation expense to normalise following the office
move in London in June 2020. Remaining expenses grew
largely in line with business activity levels, and our
continued investment to support long-term growth.
Adjusted net interest income
Adjusted net interest income decreased to £4.5 million
(2019: £5.5 million) in line with lower interest rates and
maintaining reasonable levels of capital. Adjusted net
interest income excludes interest expense on lease
liabilities of £3.0 million (2019: nil), which has been
included in adjusted operating expenses. This ensures
that the changes resulting from the implementation of
IFRS 16 Leases reflect consistently in adjusted operating
expenses for both years.
Silica profit
Silica is our transfer agency business in South Africa,
which was established in 1999. Its profits are not material
as it reinvests them annually into its core operational
platforms.
Ninety One share scheme
implementation
Upon the successful listing, Ninety One awarded shares
to the value of £2,000 to each eligible employee and
also partially invested deferred compensation awards
in shares into the Ninety One share scheme.
The Ninety One share scheme implementation income
of £13.1 million (2019: nil) reflects the impact of reversing
staff expense accruals of £18.3 million to fund the
investment into the new Ninety One share schemes
in March 2020, net of the share scheme expenses of
£5.2 million, which are amortised over the vesting period
of the awards under IFRS 2 Share-based Payment. This
is to ensure a like-for-like comparison of our operating
expenses with the prior financial year. Our estimate for the
2021 financial year indicates this figure will be immaterial
and therefore will be included in staff expenses.
Other exceptional items
Other exceptional items of £10.9 million (2019: £1.0
million) largely related to the demerger from Investec,
and subsequent listing on the LSE and JSE. Most of
the demerger expenses related to promotional and
rebranding expenses, as well as the IT network and
support services migration. The other exceptional items
in financial year 2019 primarily included the net foreign
exchange related gain on the closing of our Taiwan
subsidiary. We expect additional demerger related
expenses, which will be included as exceptional items
in the next financial year, reflecting that the demerger
and listing only occurred two weeks prior to the end
of financial year 2020.
Profit before tax
Profit before tax increased by 11% to £198.5 million (2019:
£178.4 million), while adjusted operating profit increased
10% to £189.9 million (2019: £172.5 million).
Effective tax rate
The effective tax rate was 21.4% (2019: 21.6%), above the
UK corporation tax rate of 19.0% (2019: 19.0%), mainly
due to the effect of higher tax rates applicable in foreign
jurisdictions such as South Africa, where the tax rate is
28.0% (2019: 28.0%).
Earnings per share
£ million unless otherwise stated
Profit after tax
Profit attributable to non-controlling interests
Profit attributable to ordinary shareholders
Ninety One share scheme implementation1
Other exceptional items1
Adjusted net interest income1
Silica profit1
Tax on adjusting items1
Adjusted earnings attributable to ordinary shareholders
Weighted average number of ordinary shares (m)
Number of ordinary shares (m)
Basic earnings per share (p)
Diluted earnings per share (p)
Headline earnings per share (p)
Adjusted earnings per share (p)
The change in the effective tax rate in financial year 2020
was due to an increase in profits earned in higher tax rate
countries offset by the adjustment of deferred tax assets
for the fact that the UK tax rate will no longer reduce to
17.0% as previously announced.
Earnings per share
Basic earnings per share (“Basic EPS”) and diluted
earnings per share grew 11% to 16.8p (2019: 15.1p). There
was no change in the number of shares in issue and the
impact of the investment in own shares held by Ninety
One as part of the new Ninety One share scheme had
minimal impact on the weighted average number of
ordinary shares. Headline earnings per share (“HEPS”)
grew 12% to 16.8p (2019: 15.0p), broadly in line with the
growth in Basic EPS, reflecting minor adjustments
between HEPS and Basic EPS.
Adjusted earnings per share increased by 10% to 16.1p
(2019: 14.6p), consistent with the growth in adjusted
operating profit and more reflective of the core operating
performance of Ninety One. For details on calculations,
see note 7 to the consolidated financial statements.
2020
156.0
(0.6)
155.4
(13.1)
10.9
(4.5)
(1.9)
2.0
148.8
922.5
922.7
16.8
16.8
16.8
16.1
2019
139.8
(0.5)
139.3
—
1.0
(5.5)
(1.4)
1.6
135.0
922.7
922.7
15.1
15.1
15.0
14.6
Change %
12
20
11
n.m.
n.m.
(18)
36
25
10
0
—
11
11
12
10
1. These items comprise “non-operating items” per adjusted earnings per share definition on page 174.
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Summary balance sheet
6
4
£ million
Non-current assets
Current assets
2020
Policyholders
Shareholders
Total IFRS
—
145.2
145.2
Linked investments backing policyholder funds
6,988.5
—
6,988.5
Cash and cash equivalents
Other current assets
Total current assets
Total assets
Non-current liabilities
Current liabilities
Policyholder investment contract liabilities
Other current liabilities
Total current liabilities
Total liabilities
Equity
Total equity and liabilities
£ million
Non-current assets
Current assets
Linked investments backing policyholder funds
Cash and cash equivalents
Other current assets
Total current assets
Total assets
Non-current liabilities
Current liabilities
Policyholder investment contract liabilities
Other current liabilities
Total current liabilities
Total liabilities
Equity
Total equity and liabilities
—
67.3
7,055.8
7,055.8
5.6
7,002.8
47.4
7050.2
7,055.8
—
7,055.8
194.5
255.8
450.3
595.5
140.1
194.5
323.1
7,506.1
7,651.3
145.7
—
7,002.8
351.7
7,354.5
7,500.2
151.1
7,651.3
304.3
304.3
444.4
151.1
595.5
2019
Policyholders
Shareholders
Total IFRS
—
44.3
44.3
8,173.7
—
60.3
8,234.0
8,234.0
15.3
8,190.9
27.8
8,218.7
8,234.0
—
8,234.0
—
269.2
255.1
524.3
568.6
44.9
—
328.0
328.0
372.9
195.7
568.6
8,173.7
269.2
315.4
8,758.3
8,802.6
60.2
8,190.9
355.8
8,546.7
8,606.9
195.7
8,802.6
0
2
0
2
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Assets and liabilities
Ninety One undertakes linked insurance business
through one of its South African entities and does not
take on any insurance risk in respect of such business.
The policyholders hold units in a pooled portfolio of
assets via linked policies issued by the insurance entity.
The assets are beneficially held by the insurance entity
and the assets are reflected on its statement of financial
position. Due to the nature of a linked policy, Ninety One’s
liability to the policyholders is equal to the market value
of the assets underlying the policies, less applicable
taxation. Therefore, the commentary below only covers
the shareholders’ amounts.
Total assets increased to £595.5 million (31 March 2019:
£568.6 million). Cash and cash equivalents reduced to
£194.5 million (31 March 2019: £269.2 million), which
largely related to the payment of dividends prior to
the demerger.
Total liabilities increased to £444.4 million (31 March 2019:
£372.9 million), principally due to the recognition of lease
liabilities on the balance sheet under IFRS 16, and there
continues to be no debt financing on the balance sheet.
The adoption of IFRS 16 in financial year 2020 resulted
in an initial recognition of assets of £85.3 million and
liabilities of £88.6 million, on 1 April 2019, which were
previously not recognised on the balance sheet
(see page 132 for details). At 31 March 2020, the
corresponding assets and liabilities were £90.7 million
and £101.6 million respectively.
Ninety One has limited seed investments. Seed capital for
mutual funds was £1.7 million (31 March 2019: £1.2 million)
and co-investments in private equity funds totalled
£9.3 million (31 March 2019: £11.0 million).
Equity
Equity reduced to £151.1 million (31 March 2019:
£195.7 million), which principally reflects the early
payment of dividends in March 2020, ahead of
the demerger from Investec.
Capital and regulatory position1
£ million
Equity
Non-qualifying assets2
Qualifying capital
Dividends declared after
year end
Regulatory requirement
Expected capital surplus
2020
151.1
(12.7)
138.4
—
(94.4)
44.0
2019
195.7
(9.3)
186.4
(64.7)
(86.4)
35.3
1. The above table represents the amalgamated position across
Ninety One plc and its subsidiaries and Ninety One Limited and its
subsidiaries, which for regulatory requirement purposes are separate
groups. Both groups of companies had an expected capital surplus
at 31 March 2019 and 31 March 2020.
2. Non-qualifying assets comprise assets that are not available to meet
regulatory requirements.
After deducting non-qualifying assets, our qualifying
capital was £138.4 million (31 March 2019: £186.4 million).
Our regulatory requirement increased to £94.4 million
(31 March 2019: £86.4 million). This provides Ninety One
with an expected capital surplus of £44.0 million
(31 March 2019: £35.3 million) which is consistent with
our intention of maintaining a capital-light balance sheet.
The capital requirements for all Ninety One companies
are monitored regularly throughout the year.
Through our internal capital adequacy assessment
processes and in conjunction with the boards we assess
our capital requirements to ensure Ninety One holds
sufficient capital to mitigate the financial impact of any
key risks materialising.
Ninety One plc’s overall regulatory capital requirement
and regulatory deductions, in accordance with the
European Union (“EU”) Capital Requirements Regulation,
are set out in Ninety One plc’s Pillar 3 Disclosures
published on our website, www.ninetyone.com.
Dividends
Prior to the demerger Ninety One (as Investec Asset
Management) paid a final dividend. The Ninety One board
of directors recommended no further ordinary or special
dividends for financial year 2020.
Looking ahead, Ninety One expects to target an ordinary
dividend payout ratio of at least 50% of its profit after tax.
We will consider paying a special dividend which will
comprise surplus retained earnings not needed for
regulatory or specific investment needs, as well as a
reasonable buffer as agreed with our board of directors.
There are no plans to increase the current number of
shares in issue.
Liquidity
Ninety One maintains a strong liquidity position, which
comprises cash and cash equivalents of £194.5 million
(31 March 2019: £269.2 million). Ninety One maintains
a consistent liquidity management model, with liquidity
requirements monitored carefully against its existing and
longer-term obligations. To meet the daily requirements of
the business and to mitigate its credit exposure, Ninety One
diversifies its cash and cash equivalents across a range of
suitably credit-rated corporate banks and money funds.
Alternative performance measures
Ninety One uses non-IFRS measures to reflect the manner
in which management monitors and assesses the financial
performance of Ninety One. In particular, they exclude
Silica as it is not core to Ninety One’s asset management
activities. These non-IFRS measures are considered
additional disclosures and in no case are intended to
replace the financial information prepared in accordance
with the basis of preparation detailed in the consolidated
financial statements. Moreover, the way in which Ninety
One defines and calculates these measures may differ from
the way in which these or similar measures are calculated
by other entities. Accordingly, they may not be comparable
to measures used by other entities in Ninety One’s industry.
These non-IFRS measures are considered to be pro
forma financial information for the purpose of the JSE
Listings Requirements and are the responsibility of
Ninety One’s board of directors. The non-IFRS financial
information has been prepared with reference to JSE
Guidance Letter: Presentation of pro forma financial
information dated 4 March 2010 and in accordance with
paragraphs 8.15 to 8.33 in the JSE Listings Requirements,
the Revised SAICA Guide on Pro forma Financial
Information (issued September 2014) and International
Standard on Assurance Engagement (“ISAE”) 3420 –
Assurance Engagements to Report on the Compilation of
Pro forma Financial Information included in a Prospectus,
to the extent applicable given the Non-IFRS Financial
Information’s nature.
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2
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8
4
This pro forma financial information has been reported on
by KPMG Inc in terms of ISAE 3420 and their unmodified
report is available for inspection on the Ninety One
website (www.ninetyone.com). These non-IFRS
measures, including reconciliations to their nearest
consolidated financial statements equivalents, are
as follows:
£ million
Net revenue
Adjusted for:
Silica third-party revenue
Foreign exchange gains
Net (losses)/gains
on investments
Deferred employee benefit
scheme losses/(gains)
Other income
Rounding
Adjusted operating revenue
Of which management fees
Of which performance fees
Of which foreign exchange
gains and other income
£ million
Operating expenses
Adjusted for:
Silica net expenses
Deferred employee benefit
scheme losses/(gains)
Interest expense on
lease liabilities
Rounding
2020
609.9
2019
556.9
(21.2)
2.1
(21.8)
5.0
(4.2)
5.1
1.0
0.2
0.2
588.0
565.7
21.5
(5.0)
0.4
—
540.6
524.6
11.0
0.8
5.0
2020
413.4
2019
393.7
(19.4)
(20.6)
1.0
3.0
0.1
(5.0)
—
—
Adjusted operating expenses
398.1
368.1
£ million
Adjusted operating revenue
Adjusted operating expenses
Adjusted operating profit
Adjusted operating
profit margin
£ million
Net interest income
Adjusted for:
Silica interest
Interest expense on
lease liabilities
Other interest expense
Adjusted net interest income
2020
588.0
(398.1)
189.9
2019
540.6
(368.1)
172.5
32.3%
31.9%
2020
1.7
2019
5.7
(0.1)
(0.2)
3.0
(0.1)
4.5
—
—
5.5
0
2
0
2
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Foreign currency
Ninety One prepares its financial information in British
pound sterling. The results of operations and the financial
condition of individual companies are reported in the
local currencies of the countries in which they are
domiciled, including South African rand and US dollars.
These results are then translated into pound sterling
at the applicable foreign currency exchange rates for
inclusion in the consolidated financial statements. The
following table sets out the movements in the relevant
exchange rates against pound sterling for the years
ended 31 March 2019 and 2020.
2020
2019
Period end
Average Period end
Average
South African
rand
US dollar
22.16
1.23
18.78
1.27
18.79
1.30
18.04
1.31
Statement of viability
In accordance with the UK Corporate Governance
Code, the board of directors has assessed the
prospects of the Group over a longer period than the
12 months required by the going concern provision.
The directors confirm, based on information known today,
that they have a reasonable expectation that Ninety One
will continue to operate and meet its liabilities, as they fall
due, to 31 March 2023. The directors’ assessment has
been made with reference to Ninety One’s current
position and strategy, the Board’s risk appetite, Ninety
One’s financial plans and forecasts, and its principal risks
and how these are managed, as detailed in the Strategic
Report. Ninety One defines its strategic planning
objectives over three years and this is underpinned by
a rolling three-year financial plan, the first year of which
is the current year budget. The budget is approved
annually by the Board, and in exceptional circumstances,
the Board reviews and approves structural changes to
the budget intra-year.
The further into the future the planning horizon is, the
greater the level of uncertainty in financial projections.
Therefore, Ninety One uses a three-year period in
assessing viability in order to be consistent with the
minimum period used in the Group’s capital assessments
and financial projections. The rolling financial projections
incorporate both the Group’s strategy and principal risks
and is reviewed by the Board at least annually. These
formal approval processes are underpinned by regular
executive management and Board discussions of
strategy and risks, in the normal course of business.
Throughout the year the Board assesses progress by
reviewing forecasts compared to the budget and
longer-term projections compared to the financial plan.
The current year forecast and longer-term financial
projections are regularly updated as appropriate.
Brexit
The UK left the EU on 31 January 2020, and has
entered into a transitional period which is due to run
to 31 December 2020. The Group undertook a review
of the potential impact of Brexit and concluded that
there will be a minimal impact to the Group as a direct
result of Brexit.
COVID-19
In light of the impact of COVID-19 on financial markets
since mid-March 2020 and the fact that the budget for
31 March 2021 was approved ahead of this, Ninety One
updated the budget and forecasts for the year ending
31 March 2021 to 2023 taking into account the impact
of the fall in AUM to 31 March 2020 and adjusted for
the following additional financial stress tests:
ɽ A 20% drop in AUM from 31 March 2020 and
no further market and foreign exchange related
change in AUM for the remainder of the year
ending 31 March 2021.
ɽ A 3.5% increase in market and foreign exchange
related increase in AUM per annum for the financial
years ending 31 March 2022 and 2023.
ɽ An 80% reduction in the budgeted net inflows for
the year ending 31 March 2021, and for net inflows
to continue at this reduced level for the years
ending 31 March 2022 and 2023.
The Group was found to remain profitable for each of the
following three financial years using these scenarios and
therefore this analysis did not impact the directors’
assessment.
Scenario analysis is performed as part of both the
Group’s financial planning process and within Ninety
One’s business capital assessment processes, which are
approved by the Board. These scenarios evaluate the
potential impact of severe but plausible occurrences
which reflect Ninety One’s risk profile.
Scenarios modelled included:
ɽ Market stress: the effect of greater than expected
market falls and lower than expected client flows
as a result of the COVID-19 pandemic.
ɽ Shock event: a one-time event that led to an
immediate reduction in AUM of 35%. This is aligned
to the firm’s risk appetite limit and also compares to
a modelled estimated fall in AUM of 32%-33% if
the 2008 global financial crisis were to reoccur.
ɽ Operational risk event: the effect of an idiosyncratic
operational risk event. The event modelled was that
representing the greatest single operational risk capital
charge included in the capital assessment process.
ɽ Net outflows: the effects of experiencing net
outflows of AUM of £1.0 billion per annum. Falls were
assumed to occur over an annual period equally
across all capabilities. This value was chosen as it
represents the worst net outflows experience from
the period immediately prior to the financial crisis, to
31 March 2020.
ɽ A combination of the Market stress, the Net outflows
and the Operational risk event scenarios.
The capital assessments are conducted separately but
in a consistent manner for each of the two groups: Ninety
One plc and its subsidiaries and Ninety One Limited and
its subsidiaries; for regulatory capital purposes these are
considered to be separate groups.
Having reviewed the results of the stress tests, the
directors have concluded that the Group would have
sufficient capital and liquid resources in the respective
scenarios and that the Group’s ongoing viability would
be sustained. It is possible that a stress event could be
more severe and have a greater impact than we have
determined plausible. Actions are available that may
reduce the impact of more severe scenarios, but these
have not been considered in this viability statement.
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Risk Management
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Ninety One’s Board has ultimate responsibility for risk
management. It approves Ninety One’s risk appetite
and general risk management framework and monitors
the operation of the framework. Ninety One’s risk
management framework is not designed to eliminate risk
entirely, but to reduce uncertainty by identifying and
managing current and emerging risks to acceptable levels
and to harness risk management tools and techniques to
optimise performance and inform business decisions.
Creating and nurturing good
culture and conduct
One of the central attributes of Ninety One is the
concept of “doing the right thing”. Ninety One’s culture
and values permeate throughout the organisation.
We take great care to hire the right people who share
our values and nurture an environment where good
behaviours are demonstrated. This culture is displayed
in the actions of employees and the construction of our
policies and processes, and in the design of our products.
We operate a risk aware, open culture where all
employees contribute to effective risk management.
One of the central attributes
of Ninety One is the concept
of “doing the right thing”.
Approach to risk management
Risk appetite
Risk appetite sets the “tone from the top” and provides
boundaries of acceptability within which the business
can operate. Risk appetite provides a mechanism for
treating risks that exceed appetite and ensuring the
Board and key committees are informed where
appropriate. Risk appetite considers qualitative
and quantitative impacts affecting all stakeholders.
Ninety One’s risk appetite is documented in the
Risk Appetite Policy.
Risk governance
Ninety One’s Board has delegated responsibility for
risk oversight to the Audit and Risk Committee (“ARC”).
The ARC is supported by a Management Audit
Committee (“MAC”), Management Risk Committee
(“MRC”) and specialised risk sub-committees, comprising
subject matter experts from across the business. This
model ensures that material risks are escalated to the
ARC (or Board, where appropriate), but that all levels
of risk are regularly and formally evaluated.
Risk responsibilities
Ninety One utilises a “three lines of defence” model.
This ensures that there is responsibility for risk
management embedded within the specialist teams
overseeing day-to-day processes and demonstrable
independence within the functions employed to
challenge them. Ninety One’s employees are made
aware of their individual risk management responsibilities
through comprehensive training.
Current risks
Ninety One considers risks that exist in its business or
operating environment to be “current”, as they could
manifest at any time. Whilst the impact of current risks
on the business can be analysed, an element of
uncertainty may remain.
Emerging risks
Emerging risks, while also foreseeable are not an
immediate threat, but are likely to have an impact on
Ninety One’s business in the medium to long term.
Emerging risks may include those expected to result
from foreseeable business, regulatory or environmental
changes. As such, Ninety One identifies and plans for
these risks as part of its longer-term view. Emerging risks,
by their nature, may have a greater degree of uncertainty
associated with them.
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Key risk management committees
Ninety One Board
Ninety One Audit and Risk Committee
Ninety One’s primary risk management committee comprising only independent
non-executive members. Key stakeholders from the business attend meetings to
present reports and respond to questions and challenges from ARC members
on the business’s risk management framework, profile and activities.
Chief Executive
Officer
Management
Audit Committee
Management
Risk Committee
Executive
management
Supports the ARC and executive
management by overseeing
completeness, accuracy and
effectiveness of financial
reporting, corporate tax
compliance, and internal and
external audit arrangements
and operations. The MAC is
chaired by Ninety One’s Head
of Finance and is attended by
representatives from the Internal
Audit, Tax and Risk Management
Teams.
Supports the ARC and executive
management by ensuring
there is appropriate oversight,
reporting and escalation of risks
identified in the business or wider
operating environment. The MRC
comprises senior representation
from all areas of the business and
considers reports and escalated
items from each of its specialised
risk sub-committees. The MRC is
chaired by Ninety One’s General
Counsel and membership includes
the heads of all functional areas.
Supports the Chief Executive
Officer in managing risks
associated with delivering Ninety
One’s strategy and taking key
management decisions escalated
from the MRC. Executive
management is supported and
advised by specialist functions
in developing and delivering
Ninety One’s strategy.
Specialised risk sub-committees
Advisory
These act under specific delegated authority of the MRC. Their role is to perform
a more detailed review of their risk universe to ensure that all risk matters are
appropriately considered and escalated, in line with Ninety One’s risk appetite.
Investment Risk
Committee
Operational Risk
Committee
Legal and
Compliance Risk
Committee
Product Management
Team
Finance Team
Liquidity
Management
Committee
Third Party
Oversight
Committee
IT Risk Committee
Human Capital Team
Key:
Independent
Executive
Management
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Risk Management
The “three lines of defence”
Combined assurance is about effectively coordinating
the three lines of defence, through the encouragement
of collaboration and the development of a holistic view
of Ninety One’s risk universe to most effectively and
efficiently manage risk. Ninety One has implemented
a Governance Risk and Compliance (“GRC”) technology
solution that is used by all three lines of defence.
The GRC is a single repository of risks and controls
from which each team’s own risk assessments are
administered, evaluated and challenged. GRC facilitates
second and third line reviews, including tracking findings
and actions to maximise visibility.
Ninety One’s management is the first line of defence
against risk.
Management has a deep understanding of Ninety One’s
processes and is best placed to identify and manage risk.
Management assesses against risk appetite and builds
appropriate defences that are overseen by the relevant
risk sub-committee.
The second line of defence comprises the risk
management and compliance teams.
Risk management separates into two specialist teams
tasked with assessing and managing investment risks
(within portfolios) and operational risks, respectively.
Regulatory risk is managed by a dedicated compliance
team.
The third line of defence is an independent internal
audit team.
Internal audit operates a risk-based audit review programme
to provide independent assurance to the Board (via the
ARC) that the risk management framework and control
environment are suitability designed and properly
operated, and governed.
Risk management framework
The risk management framework is utilised across all
categories of risk within Ninety One and employs tools
including risk assessments, key indicators, stress and
scenario tests and learnings from internal and external
events. This informs business decisions, helps direct
resources and helps to ensure Ninety One is appropriately
capitalised. Current and emerging risks are evaluated
against risk appetite to aid prioritisation and determine
appropriate treatment and escalation.
Ninety One is exposed to risks from internal factors,
such as poor control design or operation, inadequate
technology or development and inadequate resourcing
or poor product design; these are deemed “controllable”
risks. Ninety One is also exposed to external factors such
as market behaviour and other macroeconomic factors,
changes in regulation and investor sentiment; these are
deemed “uncontrollable” risks. Different risk management
techniques (“treatments”) are employed.
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Capital adequacy
assessment process
Business decisions
and resource planning
Inherent risk
Risk management
Residual risk
Risk intelligence
Key indicators
Quantitative
measures with
prescribed thresholds
relative to risk
appetite
Risk assessments
Qualitative
assessments of
current and emerging
risks using subject
matter expertise to
identify and measure
risk relative to risk
appetite
Events
Internal and external
events that have
occurred, or can be
reasonably foreseen
(e.g. emerging
events), assessed
relative to risk
appetite
Stress tests
and scenarios
Quantitative
assessments of
operational, business
model, or investment
strategy sensitivity
to different events
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Primary sources of risk
Ultimately, Ninety One’s risk management framework
is designed to ensure that we meet our stakeholders’
(clients, employees, shareholders and communities)
expectations and objectives and that we live up to our
commitment to do the right thing.
Through our management and governance structure,
Ninety One has defined clear lines of accountability and
escalation for each of the risks inherent in our business
and operating environment. Ninety One’s primary
sources of risk are as follows:
Business and strategic risk
Business and strategic risk is the risk that Ninety One fails
to deliver our strategy or to achieve good stakeholder
outcomes. Business and strategic risks can manifest
through a failure to foresee and respond to the changing
needs of our clients and other stakeholders, lack of
resilience and ability to adapt to changes in our operating
environment, or an inability to attract or retain the
right talent to deliver good stakeholder outcomes.
Investment risk
Investment risk is the risk that we do not achieve clients’
investment objectives, or that portfolios are exposed to
inappropriate levels of risk in pursuit of achieving their
objectives. Investment risks can manifest through
portfolio positioning, portfolio construction, stock
selection or inappropriate benchmarking.
Operational risk
Operational risk results from poor design or execution
of controls. It can result in poor client experience through
sub-standard servicing (including errors or omissions)
or disruption to the provision of services. Operational
risk inconveniences clients and damages Ninety One’s
reputation. Operational risks can also expose clients,
and Ninety One to financial losses.
Risk management process
There are four stages to the risk management process:
Identify
Risks are identified through continual assessment and
monitoring of changes and events in the internal and
external environment. All teams maintain a risk
assessment.
Evaluate and report
Risks are evaluated, rated in line with our Risk Appetite
Policy and reported through the governance structure
as appropriate for the severity of the risk impact.
Manage
Treatment plans are agreed and monitored to completion.
These may be tactical changes such as new controls or
form the basis for more strategic projects.
Monitor and escalate
Tools to monitor changes in risk levels, such as key
indicators are implemented, and the risk escalated
where agreed levels are exceeded, in line with the
Risk Appetite Policy.
Treating risk
Since not all risks can be prevented, Ninety One applies
four main approaches to risk treatment:
Reduce likelihood
Where risks are deemed to be “controllable”, all efforts
are made to reduce the likelihood that an error will occur.
This is achieved through a robust internal control
environment that is under continual review by Ninety
One’s management and subject to challenge by the
risk, compliance and internal audit teams.
Transfer
Where it is more efficient and cost effective, or the risk
is too great for Ninety One to accept, Ninety One may
“transfer” risks to third parties with larger capacity or
specific skillsets (e.g. via its outsourcing model).
However, risk transfer techniques do not dilute
management accountability.
Reduce impact
Where risks cannot be controlled, measures may be
taken to reduce the impact of risk, usually through
diversification or hedging techniques.
Eliminate
Where risks are deemed or anticipated to breach
tolerance levels set in Ninety One’s Risk Appetite
Policy, the risk must be eliminated.
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Risk Management
Principal Risks
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The Ninety One Board has carried out
a robust assessment of the Group’s
risks. These are set out below:
Business and strategic risks
Key
Current firm risk profile
Risk is currently high
Risk is currently moderate
Risk is currently low
Risk profile change over
the financial year
Risk status has improved
Risk status remained stable
Risk status has deteriorated
Risk
Risk management
Financial year update
1. Failure to devise and implement strategy
Ninety One faces risks associated
with the implementation of its
strategy, owing to internal or
external factors which may delay
or inhibit progress on its strategic
priorities.
Strategic priorities: 1, 2, 3, 4, 5
Risk profile:
The Board, with the executive management, agree
the strategy for the business and ensure the right
structures are in place to achieve success.
Executive management regularly reviews and
monitors progress against Ninety One’s strategic
objectives. Where factors arise which may
impede (or accelerate) the execution of these
priorities, they are carefully considered and
appropriate action taken.
The Board is kept abreast of progress on Ninety
One’s strategy, including material developments
which may arise, so they may opine on new
developments, including risks.
Ninety One’s strategic objectives
have not changed as a result of
demerging from Investec and listing
as an independent business.
Ninety One continued to adopt a
long-term approach to its strategic
priorities and its strategic principles
and priorities remain unchanged.
2. Failure to plan for and adapt to changes in macroeconomy
Ninety One’s AUM and profitability
are exposed to volatility in global
financial markets and to other
adverse financial, economic,
political and market factors that
affect investor sentiment and the
operating environment.
Fluctuations in exchange rates
could have an adverse impact on
the business’s operating results
and Ninety One is subject to the
risk of adverse changes in the laws
and regulations in the markets in
which it operates.
Strategic priorities: 1, 2, 3, 4, 5
Risk profile:
Ninety One offers a diverse mix of investment
strategies in various asset classes and regions,
which reduces the risk profile of the firm in normal
circumstances. Similarly, a global and diversified
client base enables lower client concentration risk.
The business’s cost base is continuously
monitored with a preference for variable over
fixed personnel costs, where possible. The
balance sheet is conservatively positioned
with no debt.
Since inception, Ninety One gained
substantial experience in the
management of macroeconomic
and geopolitical risk. This includes
the global financial crisis of 2008,
various emerging market crises
and the UK’s withdrawal from the
EU following the Brexit referendum
in 2016.
Most recently, the global impact
of the COVID-19 pandemic has
significantly and negatively
impacted financial markets and
economic prospects, which
affected Ninety One's AUM
in the period.
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Business and strategic risks continued
Risk
Risk management
Financial year update
3. Poor product offerings or lack of diversification
Ninety One requires appropriate
and relevant product offerings to
succeed in this competitive
industry. Diversity and innovation
protects Ninety One against
changes in client demand
patterns.
Strategic priorities: 1, 2, 3, 4
Risk profile:
Ninety One has a clear product focus, offering a
diverse mix of organically developed investment
capabilities and differentiated strategies to
meet current, and anticipate future changes in,
client needs. A dedicated team of client-facing
professionals are in close contact with clients
to ensure the firm can react to changes in their
needs or to any concerns they may have. Ninety
One’s Client Groups work closely with both
the investment teams and a team of product
specialists to ensure the firm’s offerings continue
to anticipate changes in client expectations
and demands.
4. Inability to retain or attract talent
Ninety One is a people business.
Being able to retain and attract the
best talent is key to Ninety One’s
ability to continue to provide
competitive product offerings
and to service our clients and
prospects in a unique and
differentiated way.
A comprehensive approach to the recruitment,
development and retention of people is adopted
through the mechanisms of leader and team
development, remuneration, and culture and
employee ownership. These mechanisms have
been consistently applied for many years and are
embedded into our culture. The approach to
talent is therefore holistic and integrated into the
culture, rather than a single analysis or process.
Strategic priorities: 5
Risk profile:
Investment risks
5. Failure to meet client investment objectives
Poor investment performance
relative to clients' stated
benchmarks or outcomes could
mean Ninety One fails to meet
clients’ investment objectives.
Strategic priorities: 1, 2, 3, 4
Risk profile:
Ninety One has a relentless commitment to
achieving and exceeding portfolio expectations.
We implement this using a number of structures
and processes. Portfolio performance is measured
by an independent team and governance
processes are in place to monitor and assess
portfolio performance for all strategies. Poor
relative investment performance could trigger a
review of portfolio composition or investment
process to help improve performance.
In line with anticipating our clients'
future needs, Ninety One launched
numerous products during the year.
These included separately managed
accounts (an increasingly popular
investment approach for US retail
investors) as well as further funds
related to African credit, environment
and China, to cater for increasing
investor demand in these strategies.
Intensive efforts have been
made through the demerger and
rebranding to ensure stability and
continuity of the culture, which is
the foundation of Ninety One’s
talent strategy.
COVID-19 created a challenge, but
also an opportunity, to reinforce our
culture and talent environment.
Through a comprehensive set of
talent focused activities covering
practical, psychological, physical
and community support, we
have maintained cohesion and
engagement throughout the firm.
Asset markets were strong in 2019 but
as we entered 2020 the COVID-19
pandemic caused global markets to
fall sharply. As a result, performance
across Ninety One’s various
investment strategies was impacted
by lower market levels in the short
term; however, investment strategies
broadly performed as expected given
the market conditions. Despite these
market falls, Ninety One’s long-term
track record remains satisfactory.
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Risk Management – Principal Risks
Investment risks continued
6
5
Risk
Risk management
Financial year update
6. Failure to effectively manage risk in clients’ portfolios
Risk limits
Poor management of investment
risks within portfolios or funds
may lead to poor client outcomes
through excessive, or insufficient
risk taking.
Liquidity
Poor liquidity management could
result in clients being unable to
withdraw assets when needed at
prevailing market prices, and this
could impact the value of clients’
investments or the performance
of their portfolio.
Strategic priorities: 1, 2, 3, 4
Risk profile:
Operational risks
An independent investment risk team monitors
various risk measures to ensure portfolio risk
is appropriate and that risk budgets are
effectively used.
The investment risk team measures liquidity for
all portfolios, to ensure liquidity obligations can
be met. Given the redemption commitments of
pooled vehicles, particular focus is given to
these portfolios.
The Liquidity Management Committee oversees
the development of appropriate liquidity. The
most important mitigant for liquidity risk remains
the education of clients on the potential liquidity
risks in products/strategies.
Market volatility materially increased
in 2020 following a long period
of stability. This in turn increased
volatility in client portfolios. However,
portfolio risks have remained within
acceptable parameters.
High profile failures of liquidity
management and oversight within
the industry heightened investor
concerns in 2019 and invited
regulatory scrutiny in relation to how
investment firms measure, manage
and report liquidity in their portfolios.
Market liquidity was in many asset
classes subsequently impacted by the
effects of COVID-19; however, Ninety
One was able to manage market
exposure and service subscriptions
and redemptions without disruption.
7. Failure to meet regulatory or contractual obligations
Ninety One has dedicated legal and compliance
teams with local representation in key operating
jurisdictions. These teams work closely with
executive management to ensure regulatory
and contractual obligations are identified,
understood, and properly controlled.
Ninety One could fail to meet its
regulatory or contractual
obligations of its clients, including
adherence to clients’ investment
management agreements.
This could result in poor client
outcomes or regulatory censure.
Strategic priorities: 1, 2, 3, 4, 5
Risk profile:
Ninety One operates in a number of
highly regulated environments and
manages change on an ongoing
basis as regulators continue to
evolve the regulatory landscape
to improve investor protection
and market operations.
During the period, Ninety One
undertook significant work ahead of
the transition away from LIBOR. In
the UK and Europe, key focus areas
have been the implementation of the
Senior Managers and Certification
Regime, EU action plan on sustainable
finance and actions resulting from
the FCA’s Asset Management
Market Study.
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Operational risks continued
Risk
Risk management
Financial year update
8. Failure to design or operate an effective control environment
Internal control environment
A breakdown in Ninety One’s
controls could result in a poor
client experience or have a
material financial impact on
Ninety One.
Ninety One operates a robust control framework
that is under continual evolution through a
proactive risk management process and the
“three lines of defence” model. The firm’s
operating model benefits from automation
and utilises competent and reliable outsourcing
partners, which together improve efficiency
and scalability, and reduce human errors.
Key outsourcing partners
Ninety One utilises an outsourcing
model to support core areas of its
operations. Poor service levels or
controls could weaken Ninety
One’s own internal control
environment resulting in errors
or poor client experience.
Dedicated teams oversee Ninety One’s outsourced
service providers. A governance and escalation
structure ensures comprehensive due diligence
at the point of take-on and on an ongoing basis
to ensure any service deterioration/disruption
is quickly identified and remediated to limit any
impact to service provision.
Technology or cyber defences
Ninety One is dependent upon the
proper and continued functioning
of its IT systems and may be
vulnerable to attacks on, or
breaches of, its security systems.
Ninety One has a well-defined IT strategy,
underpinned by established governance and
monitoring processes. A dedicated Information
Security function is supported by specialist
co-sourcing security partners.
Strategic priorities: 1, 2, 3
Risk profile:
Prior to the demerger, internal audit
and some technology functions were
provided by Investec. Ninety One has
now established its own Internal Audit
Team and implemented its own GRC
technology solution. This further
integrated the lines of defence and
improved combined assurance
by enhancing the efficiency and
effectiveness of risk capture,
assessment and communication.
The outsourced service provider
market saw some consolidation,
but Ninety One considers this as
a positive development, ensuring
stronger and better-invested
providers. This allows Ninety
One to leverage these strong
relationships into new specialist
areas such as cyber security.
The recently concluded demerger
from Investec included a
comprehensive implementation
of skills and capabilities to address
the technology and cyber risks
which Ninety One may face.
9. Lack of operational resilience or continuity planning
Internal or external events may
cause disruption to Ninety One’s
operations or render its systems
or offices inaccessible. This could
result in Ninety One being unable
to meet client or regulatory
obligations or service the needs
of other stakeholders.
Ninety One has developed a dynamic crisis
management plan designed to adapt operations
in response to disruptive events. A focused team
of senior individuals makes up Ninety One’s
Resilience and Continuity Steering Group and
ensures that an effective plan can be quickly
developed and deployed should a disruption
event occur.
During the year, Ninety One’s
operations continued seamlessly
despite unrest in Hong Kong and
the COVID-19 pandemic. In both
instances, by utilising our advanced
remote working capabilities,
Ninety One delivered uninterrupted
operations across the organisation
without any impact to key controls.
Strategic priorities: 1, 2, 3, 4, 5
Risk profile:
For detailed disclosures of our risk factors, please see
the Prospectus on our website, www.ninetyone.com
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8
5
Chairman’s Introduction
to Corporate Governance
“ While our history has taught
us to think differently, one
constant remains: the need
to uphold the highest
standards of integrity.”
Dear shareholders
I am pleased to present our first corporate governance
report following Ninety One’s demerger from Investec
and its successful admission and listing on both the
London Stock Exchange (“LSE”) and Johannesburg
Stock Exchange (“JSE”) on 16 March 2020. As a long-
term investor Ninety One has always taken governance
seriously and sought to attain the best standards. We see
our commitment to good and sensible governance as an
integral part of our efforts to build a better investment
firm to finance a better world. This report details the
current governance framework for Ninety One plc and its
subsidiaries and Ninety One Limited and its subsidiaries
(together, “Ninety One” or the “Group”) and how we have
applied the provisions of the UK Corporate Governance
Code (the “UK Code”) and the South African King IV
Code on Corporate Governance (“King IV”).
Governance structure
Prior to listing Ninety One was an independently-run
division within Investec and its governance practices
were organised accordingly. In anticipation of the listing,
Ninety One sought to enhance its governance practices
with the implementation of new policies and procedures
akin to those expected of a business operating, in its own
right, in a listed environment.
Following the demerger from Investec and listing of
Ninety One on the LSE and the JSE, Ninety One now
operates as a dual-listed company (“DLC”) under a DLC
structure. The DLC structure comprises Ninety One plc, a
public company incorporated in the UK and listed on the
LSE, with a secondary listing on the JSE, and Ninety One
Limited, a public company incorporated in South Africa
and listed on the JSE. The DLC structure is designed to
place the shareholders of Ninety One plc and Ninety One
Limited in substantially the same position as if they held
shares in a single unified economic enterprise.
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The boards of directors of Ninety One plc and Ninety One
Limited (together the “Board”) are identical in terms of
their composition and Board meetings are held jointly.
A single committee structure has been constituted
comprising the Audit and Risk Committee, Human
Capital and Remuneration Committee, Nominations
and Directors’ Affairs Committee, Sustainability, Social
and Ethics Committee and Disclosure Committee. This
enables the effective management of the DLC structure.
Meetings of either the Ninety One plc board or Ninety
One Limited board on a stand-alone basis to discuss
matters relating specifically to the business of either
Ninety One plc or Ninety One Limited (as the case may
be) will be held as required.
Code compliance
As disclosed in the Prospectus, up to listing on 16 March
2020, Ninety One plc, on incorporation, was an unlisted
English company which was not subject to the UK Code.
Similarly, on incorporation, Ninety One Limited, was an
unlisted South African company which was not subject
to King IV. On and following listing the Board has applied
all the main principles of the UK Code and King IV and
complied with all of their relevant provisions, except in
respect of matters set out in the Governance Report
on page 69 of this Integrated Annual Report.
The Board
Following the announcement of the demerger of Ninety
One from Investec on 14 September 2018, Hendrik du Toit
and Kim McFarland undertook to step down in due course
from the boards of Investec upon demerger in March
2020. This then allowed them to devote their full
attention to their roles as chief executive officer
and finance director of Ninety One respectively.
Prior to listing, Ninety One also undertook a rigorous
process for the selection of the independent non-
executive directors. The selection process sought to
identify and recruit non-executive directors with the
skills and expertise needed for our business and the DLC.
I was appointed chairman of the Board on 19 November
2019 in preparation for the demerger. In addition to my
appointment, four new independent non-executive
directors, Colin Keogh, Idoya Basterrechea Aranda,
Victoria Cochrane and Busisiwe Mabuza were also
appointed on 19 November 2019. Fani Titi, a director and
chief executive officer of Investec, was also appointed
as a non-executive director. Biographies for each of
the directors are set out on pages 60 to 61.
Having established a strong Board with the appropriate
balance of skills, experience, independence and
knowledge, the non-executive directors in particular
have spent considerable time in the run-up to the
demerger familiarising themselves with the business
having gone through an extensive induction process.
The Board is responsible to shareholders for strategic
direction, management and control of the Group’s
activities and is committed to the highest standards
of corporate governance in delivering in these areas.
Performance evaluation
The Board recognises the importance of carrying out an
annual evaluation of the performance and effectiveness
of the Board, the committees and individual directors.
The Board is also committed to compliance with the
requirements of the UK Code and King IV in this regard.
Given how recently the listing took place and the short
period of time that the Board has been fully established,
an annual evaluation has not been carried out this year.
Such an evaluation will be conducted internally through
a questionnaire-based process in the second half of
2020 and through the annual cycle thereafter.
Diversity
We recognise the benefits of a diverse Board. Encouraging
diversity and inclusion forms an integral part of our firm’s
recruitment, development and retention strategy. Diversity
of thought, viewpoint, background and life experience
ensures we approach all decision-making with a set
of different perspectives. We believe this can be a
competitive advantage, helping us achieve the best
outcomes for our clients, our communities, our colleagues
and the wider world in which we work. The DLC Board
Diversity Policy was approved on 12 February 2020 and
further information on Board appointments and Ninety
One’s approach to our stakeholders can be found in the
Nominations and Directors’ Affairs Committee report on
page 70 and the Strategic Report on pages 24 to 31.
Dialogue with shareholders
The Board has looked to foster good relations with its
new shareholders. A newly established investor relations
function has assisted the Board in developing a programme
of meetings and presentations to institutional
shareholders.
Gareth Penny
Chairman
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6
The Board
of Directors
The management expertise and experience of
each director and the company secretary are
set out in the biographies below.
Gareth Penny
Independent Non-Executive Director and Chairman
Hendrik du Toit
Chief Executive Officer
Gareth was appointed as an independent non-executive director
and Chairman on 19 November 2019. He is chairman of Norilsk
Nickel, or Nornickel, Russia’s largest diversified mining and metals
company listed on the Moscow Exchange. Gareth was previously
chairman of the Edcon Group, a private fashion retailer in southern
Africa, and served as a non-executive director and Remuneration
Committee chairman of the Julius Bär Group. For 22 years, he was
with De Beers and Anglo American, the last five of which he was
group chief executive officer of De Beers.
In 2016, Gareth was awarded Russian Chairman of the Year,
with reference to his contribution to improvements in corporate
governance. Gareth has had considerable experience in chairing
both public and private boards. He has had significant exposure to
developing markets, wealth management, private equity and the
financial sector.
Kim McFarland
Finance Director
Kim was appointed to the Board in October 2019. She joined
Investec Asset Management in 1993 as its chief financial officer
and chief operating officer to manage the financial and operational
growth of the business. In October 2018, Kim was appointed as
an executive director of Investec plc and Investec Limited. Upon
completion of the implementation of the demerger and admission
of Ninety One, Kim resigned as a director of Investec plc and
Investec Limited to focus on her role as finance director on the
boards of Ninety One plc and Ninety One Limited. Prior to joining
Investec, Kim served as financial and operations manager at two
South African life insurance companies. Kim has been a non-
executive director of the Investment Association (UK) since
September 2015.
Kim has degrees in commerce and accounting and subsequently
qualified as a Chartered Accountant with Price Waterhouse in 1987.
She also holds an MBA degree from the University of Cape Town.
Hendrik was appointed to the Board in October 2019. He resumed
the role of chief executive officer on the demerger of the business
from Investec in March 2020. Prior to this he was joint chief
executive officer of Investec. Hendrik is a founding member of
Ninety One having entered the asset management industry in 1988;
joining Investec in 1991 to set up Investec Asset Management as
Ninety One was called before the demerger from Investec.
Hendrik is a non-executive director of Naspers Limited and its
European subsidiary, Prosus, a member of the Advisory Boards
of the UN Business and Human Security Initiative and the Impact
Investing Institute. Previously, Hendrik served as a non-executive
director of the Industrial Development Corporation of South Africa,
the Advisory Board of the Sustainable Development Solutions
Network, the Expert Board of HM Treasury’s Belt and Road initiative
and as commissioner of the Business and Sustainable Development
Commission which authored the report “Better Business Better
World” in 2017.
Hendrik holds an MPhil in Economics and Politics of Development
from Cambridge University, as well as an MCom in Economics from
Stellenbosch University.
Colin Keogh
Senior Independent Director
Colin was appointed as an independent non-executive director and
Human Capital and Remuneration Committee chair on 19 November
2019. Colin has spent his career in financial services, principally at
Close Brothers Group plc, where he worked for 24 years and was
chief executive officer from 2002 until 2009. Colin is senior
independent director and chairs the Remuneration Committee
of Hiscox Limited. He is also chairman of the specialist financial
services business Premium Credit Limited. He was previously a
non-executive director of M&G Group Limited and Virgin Money
Holdings (UK) plc.
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Gareth Penny
Hendrik du Toit
Idoya Basterrechea Aranda
Busisiwe Mabuza
Kim McFarland
Colin Keogh
Victoria Cochrane
Fani Titi
Committee key
Committee Chair
Audit and Risk
Disclosure
Human Capital and Remuneration
Nominations and Directors’ Affairs
Sustainability Social and Ethics
Idoya Basterrechea Aranda
Independent Non-Executive Director
Idoya was appointed as an independent non-executive director
on 19 November 2019. Idoya is the senior partner for strategy and
business development at Fidentiis Gestion SGIIC, an independent
asset manager headquartered in Madrid, Spain. Idoya’s prior
experience includes being a founding member, chief investment
officer and deputy general director of Norbolsa SVB (the
investment arm of the Basque Savings Banks) from 1989 to
2013, a member of the international equity sales team at Swiss Bank
Corporation and legal counsel in the Basque Government. Idoya
has been a member of the Bizkaia Bar Association since 1984.
Idoya has a law degree from Deusto University (Bilbao) and MSc
in European Studies from the London School of Economics.
Victoria Cochrane
Independent Non-Executive Director
Victoria was appointed as an independent non-executive director
and Audit and Risk Committee chair on 19 November 2019. Victoria
currently serves as senior independent director at Integrafin Holdings
plc, non-executive director and chair of the Audit Committee at
Euroclear Bank SA/NV, non-executive director and chair of the
Audit and Risk Committee at Perpetual Income and Growth
Investment Trust plc and senior independent director and chair of
the Audit and Risk Committee at HM Courts & Tribunals Service.
Victoria previously served as a non-executive director at Gloucester
Insurance Limited and senior advisor to Bowater Industries Limited.
Victoria started her career as a solicitor where she spent 10 years in
private practice, training with Beale & Co, before joining Cameron
Markby and subsequently McKenna & Co (now CMS). Her litigation
experience led to her joining Ernst & Young as their first UK general
counsel in 1991. She was a partner for 20 years and for the last five
was a Global Executive Board member and global managing partner
for Risk.
Busisiwe Mabuza
Independent Non-Executive Director
Busisiwe was appointed an independent non-executive director
and Sustainability, Social and Ethics Committee chair on
19 November 2019. Busisiwe is chair of the Board of Industrial
Development Corporation of South Africa, which was established
to promote sustainable economic growth and industrial development
in South Africa and is the largest development finance institution in
sub-Saharan Africa. Busisiwe is also lead independent director of
Tsogo Sun Gaming Limited, a South African gaming and entertainment
group listed on the JSE. She has held several other non-executive
Paula Watts
directorships, including appointments as chair of the board of
Airports Company South Africa Limited and the Central Energy Fund
Proprietary Limited. Busisiwe was also previously a partner at Ethos
Private Equity Proprietary Limited and has held several positions at
listed and private South African investment firms.
Fani Titi
Non-Executive Director
Fani was appointed as a non-executive director on 19 November
2019. He is currently the chief executive officer of Investec
where he has served as a board member since 2004. Prior to the
demerger he was joint chief executive officer of Investec alongside
Hendrik du Toit. Previously he has served on the boards of Investec
Asset Management Holdings Proprietary Limited and Investec Asset
Management Limited until May 2019.
Fani was a founding member of the private investment group Kagiso
Trust Investments Limited (now Kagiso Tiso Holdings), and later
cofounder of Kagiso Media Limited where, as chief executive officer,
he led the public offering on the JSE. Fani was subsequently the
founding executive chairman of the private investment firm the
Tiso Group until 2008, which subsequently merged with Kagiso
Trust Investments to form Kagiso Tiso Holdings.
Ninety One Africa Proprietary Limited
Ninety One Limited Company Secretary
Ninety One Africa Proprietary Limited was appointed as the corporate
company secretary for Ninety One Limited in February 2020. The
Board has satisfied itself with regard to the competence, qualifications
and experience of Ninety One Africa Proprietary Limited.
Paula Watts
Ninety One plc Company Secretary
Paula was appointed as the Ninety One plc company secretary on
29 January 2020. She joined Ninety One initially as a consultant
company secretary in June 2019. Paula is a seasoned company
secretary with over 25 years of experience working mainly in public
limited companies. She has spent the last 12 years working in the
financial services sector in both senior permanent and interim
company secretary roles. Her most recent publicly listed company
role was as interim company secretary for Hargreaves Lansdown plc.
Paula is a Fellow of the Institute of Chartered Secretaries and
Administrators.
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Board Leadership and
Company Purpose
Purpose
Our purpose is simple: Investing for a better tomorrow.
This guides our strategic decision-making, culture and
our interactions with our clients. And we do this by
building a better firm, by trying to invest in a better
way by contributing to a better world.
The Board delegates specific powers for some matters
to committees, details of which are set out below. The
outputs from each committee meeting are reported
to the Board, thus ensuring the Board maintains the
necessary oversight. More detail on the committees
and their work is described in the section headed
Board Committees.
Leadership
The Board considers that its primary role is to provide
leadership to the Group, to set Ninety One’s long-term
strategic objectives and to develop robust corporate
governance and risk management practices.
The Board has ultimate responsibility for ensuring that
the Group is managed effectively and in the best interests
of the shareholders, clients, employees and other
stakeholders (including regulators). The Board operates
within a formal framework set out in the board charter
which includes a schedule of matters reserved. The
board charter and the schedule of matters reserved are
reviewed by the Board on an annual basis. The Board is
scheduled to meet at least quarterly or as required
and provides direction, oversight, review and challenge
of Ninety One’s business.
A summary of matters reserved for the Board is set
out below:
ɽ Strategy and management;
ɽ financial reporting and controls;
ɽ structure and capital;
ɽ approval of dividends;
ɽ oversight of regulatory compliance and the
relationship with regulators;
ɽ oversight of internal control and risk management;
ɽ corporate governance;
ɽ remuneration;
ɽ approval of communications to shareholders
and other stakeholders;
ɽ board membership and other appointments;
ɽ delegation of authorities; and
ɽ policies.
Group subsidiary governance
The Group is subject to regulation by various regulatory
bodies across the jurisdictions in which it operates. The
nature and extent of applicable regulation varies from
jurisdiction to jurisdiction, but typically requires Group
companies carrying out specified activities to obtain and
maintain authorisation from one or more regulators to
carry on those activities and, consequently, to comply
with various prudential and conduct of business rules,
among other requirements. Regulators also require the
persons who control authorised firms to obtain and
maintain approval to act as a controller. The Group’s
executive directors and a number of senior executives
from the senior management team serve as directors
on these boards and are duly authorised to do so by
the appropriate regulator.
Board skills and experience
The skills and effectiveness of the Board will be reviewed
annually. The non-executive directors have a wide range
of relevant experience. The Board will look to a diverse
pool of candidates when in future considering any
vacancy which may arise and any appointments will
be made based on merit, having regard to the skills,
competencies and experience of the candidate. The
Board considers that the balance between executive
and non-executive directors allows it to exercise
objectivity in decision-making and proper control of
Ninety One’s business. Each member of the Board has
had access to all information relating to the Group and to
the advice and services of the company secretaries of
Ninety One plc and Ninety One Limited (together the
“Company Secretary”) who are responsible for ensuring
that Board procedures are followed.
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On listing the Board reviewed the structure, size and
composition of the Board, the membership of the
various committees of the Board and the expected time
commitment. The policy for Board appointments prior to
listing is reflected in the current construct. The directors’
aim is to ensure that the balance between executive and
non-executive directors of the Board reflects the
changing needs of the Group’s business.
Biographical details of all directors are given on
pages 60 to 61
Meetings and attendance
The Board plans to hold meetings at regular intervals
each year for the purpose of considering the Group’s
financial and business performance, along with risk,
compliance, IT, human resources and strategic matters.
A comprehensive agenda and Board pack is circulated
beforehand so that directors have the opportunity to
consider the issues to be discussed, and detailed minutes
and any actions are documented. The regular meetings
have been scheduled up to a year in advance, and if
any director is unable to attend then they may provide
comments on the papers to the chairman before
the meeting. Meetings will be structured so that
appropriate time is devoted to all agenda items.
In addition to these regular, scheduled meetings, ‘ad hoc’
board meetings may be held outside the published cycle
where circumstances require – for example, to approve
appointments to the board, any material transactions,
the signing of the Integrated Annual Report or the
approval of regulatory submissions.
How the board spent its time
From their appointment prior to listing and for the period
spanning the financial year ended 31 March 2020 and
the publication of this report, the board has devoted
significant time to considering:
ɽ The demerger and listing on the LSE and JSE;
ɽ strategy;
ɽ financial performance;
ɽ operational performance;
ɽ governance and risk management framework;
ɽ policies;
ɽ capital and liquidity adequacy;
ɽ the control environment; and
ɽ culture and people.
Meeting attendance
Director
Gareth Penny
Hendrik du Toit
Kim McFarland
Colin Keogh
Idoya Basterrechea Aranda
Victoria Cochrane
Busisiwe Mabuza
Fani Titi
Ninety
One plc
Eligible to
attend
Attended
Ninety One
Limited
Eligible
to attend
Attended
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Board Leadership and Company Purpose
Conflicts of interest
All directors have a duty to avoid situations that may give
rise to a conflict of interest and to disclose to the Board
any outside interests which may pose a conflict with their
duty to act in the best interests of Ninety One. Formal
procedures are in place to deal with any conflict of
interest. Directors are responsible for notifying the
chairman and the company secretary as soon as
they become aware of any actual or potential conflict
of interest for discussion by the members of the Board
who will take into account the circumstances of the
conflict when deciding whether or not to waive the
potential conflict or impose conditions on the director
in the interests of Ninety One. In addition, directors are
required to declare any new appointments or changes
in commitments. Directors will also be required, on an
annual basis, to confirm that they are not aware of any
circumstances which may affect their fitness and
propriety and therefore their ability to continue to
serve on the Board.
Relations with shareholders
The Board remains committed to maintaining good
relationships with shareholders. There is a good dialogue
with institutional shareholders, although care is exercised
to ensure that any price-sensitive information is released
at the same time to all shareholders, in accordance with
the requirements of the UK Market Abuse Regulations
and South African Financial Markets Act 2012. The chief
executive officer, finance director and Investor Relations
Team will meet with institutional shareholders on a
regular basis, have attended a number of investor road
shows and have been available for additional meetings
where requested. Institutional shareholders will be given
the opportunity to meet with the chairman and/or other
non-executive directors if they have concerns that have
not been, or cannot be, addressed through the chief
executive officer or the finance director.
The chairman is responsible for ensuring that appropriate
channels of communication are established between
the chief executive officer (and the other executive
directors) and shareholders, and for ensuring that the
views of the shareholders are made known to the Board;
this includes feedback prepared by the Group’s brokers
on meetings held with institutional shareholders.
Ninety One recognises the importance of ensuring
effective communication with all of its stakeholders.
An Integrated Annual Report and full year and half year
presentations will be distributed to all shareholders and
to other parties, who may have an interest in the Group’s
performance. This report, together with a wide range of
other information, including regulatory announcements
and current share price details, are made available
on Ninety One’s website at www.ninetyone.com.
Relationship with major shareholder
On listing of its shares on the LSE and the JSE in March
2020, Ninety One entered into a relationship agreement
with its major shareholder Investec which (among other
things) gives Investec the right to appoint a non-
executive director to the Board. Fani Titi is the initial
Investec appointee.
The directors believe that the terms of the relationship
agreement enable Ninety One to carry on its business
independently of the major shareholder.
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Division of Responsibilities
Governance structure
This report details the governance arrangements in
place at the time of listing, which was shortly prior to
the financial year end on 31 March 2020. As set out in
the Chairman’s Introduction on page 58, from listing,
Ninety One has operated under a DLC structure.
The nature of the DLC structure, the identical composition
of the boards and single committee structure enables the
effective management of the dual-listed companies as a
single unified economic enterprise with due consideration
being given to the interests of ordinary shareholders of
both Ninety One plc and Ninety One Limited.
The governance framework of the DLC structure, as set
out below, has been derived from, and is aligned to the
requirements of the UK Code and King IV.
Governance framework
Ninety One plc
Ninety One Limited
Single unified economic enterprise
DLC board of directors
Board Committees
DLC Audit and Risk Committee
ɼ Oversees the Group’s financial reporting and internal
control and risk management framework
ɼ Oversees the relationship with the external auditor
ɼ Oversees the activities of internal audit
ɼ Reviews and monitors the Group’s key risks and risk
appetite limits
ɼ Reviews the Group’s capital requirements
DLC Human Capital and Remuneration Committee
ɼ Approves and monitors the level and structure of
remuneration for the executive directors
ɼ Approves annual performance objectives
ɼ Reviews workforce policies, practices and remuneration
DLC Nominations and Directors’ Affairs Committee
ɼ Recommends board appointments
ɼ Oversees succession planning
ɼ Reviews composition, knowledge, experience and
diversity of the board
ɼ Oversees board evaluation
DLC Sustainability, Social and Ethics Committee
ɼ Oversees the Group’s strategy, commitments, targets
and performance relating to safety, the environment and
other sustainability matters
ɼ Oversees social and ethical issues
DLC Disclosure Committee
Responsible for overseeing the prompt disclosure
of inside information
Chief executive officer
Responsible for managing the business of the Group
on a day-to-day basis in accordance with the strategy
approved by the board.
Executive management
Reporting to the chief executive officer, the executive
management team is responsible for:
ɼ Management of the Group’s business on a day-to-day
basis
ɼ Developing the business and delivering on the board’s
approved strategy
ɼ Managing and monitoring the financial and operational
performance of the Group against budgets, forecasts
and targets
ɼ Managing the Group’s risks and internal control
mechanisms
ɼ Providing leadership to the people of Ninety One
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Division of Responsibilities
Board committees
The Board has established four common committees
under the DLC structure: Audit and Risk, Nominations and
Directors’ Affairs, Human Capital and Remuneration, and
Sustainability, Social and Ethics. The written terms of
reference of the committees, including their objectives
and the authority delegated to them by the Board, are
available upon request from the Company Secretary or
via the Group’s website at www.ninetyone.com.
The Board also has a Disclosure Committee, which is
responsible for monitoring, evaluating and enhancing
disclosure controls and procedures within the Group. In
particular, responsibilities set out in its terms of reference
include the identification of inside information and
maintenance of insider lists, the design, implementation
and evaluation of disclosure procedures and the
resolution of any questions concerning the materiality
of certain information. The Disclosure Committee is also
required to help the Group make timely and accurate
disclosures of all information where disclosure is required
to meet legal and regulatory obligations.
All committees have access to independent expert
advice and the services of the Company Secretary.
The chair of each committee reports to the Board. The
constitution and terms of reference of each committee
are reviewed annually to ensure that the committees
are operating effectively, and any changes considered
necessary are recommended to the Board for approval.
The Board delegates daily management responsibility
for the Group to the chief executive officer, who is
supported by an executive management team. The
chief executive officer is responsible for developing
the business and delivering against a strategy approved
by the Board and for ensuring effective management
of day-to-day operations, risk and internal control
mechanisms including that of its regulated and non-
regulated subsidiary boards.
The chief executive officer has established a number of
other management committees to assist with managing
the Group’s business. These committees are responsible
for risk and audit matters across the Group. Further
details regarding the structure of these committees is
set out on page 51 of the Strategic Report.
Chairman and chief executive officer
The roles of the chairman and the chief executive officer
are separate, clearly defined in writing and have been
agreed by the Board.
Their roles and the roles of the finance director, the
senior independent director, the non-executive directors
and company secretary are described below.
Chairman
The Chairman, Gareth Penny, is responsible for leadership
of the Board, ensuring its effectiveness in all aspects of its
role as well as being responsible for its governance. He
sets the tone for the Group and ensures that relationships
between the Board, management and shareholders are
strong. He also sets the agenda for the Board and ensures
that sufficient time is allocated to important matters.
The key responsibilities of the chairman are:
ɽ Chairing the Board and Nominations and Directors’
Affairs Committee. Member of the Disclosure
Committee and Sustainability, Social and Ethics
Committee;
ɽ Leading the Board, ensuring its effectiveness on all
aspects of its role in directing the Group;
ɽ Ensuring that the directors receive accurate, timely
and clear information;
ɽ Ensuring effective communication with shareholders;
ɽ Acting on the results of the Board’s performance
evaluation by recognising the strengths and
addressing the weaknesses of the Board and, where
appropriate, proposing new members be appointed
to the Board or seeking the resignation of directors;
and
ɽ Facilitating the effective contribution of non-
executive directors and ensuring constructive
relations between executive and non-executive
directors.
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Chief executive officer
The Chief Executive Officer, Hendrik du Toit is responsible
for day-to-day running of the business and, alongside the
chairman, provides leadership of the Group. He is also
accountable to and reports to the Board.
The key responsibilities of the chief executive officer are:
ɽ Chairing the Disclosure Committee, member of the
Nominations and Directors’ Affairs Committee and
Sustainability, Social and Ethics Committee;
ɽ leading the executive directors and the senior
executive team in the day-to-day running of the
Group’s business in accordance with the Board’s
approved strategy;
ɽ reviewing the strategic direction and operational
performance of the Group; and
ɽ ensuring that appropriate systems of risk
management and internal control mechanisms
are in place and operating effectively.
Finance director
The Finance Director, Kim McFarland, is responsible for
finance and governance across the business, reporting
directly to the chief executive officer.
The key responsibilities of the finance director are:
ɽ All aspects of financial and capital reporting and
governance;
ɽ supporting and advising the chairman and the chief
executive officer in the execution of the strategy; and
ɽ ensuring the non-executive directors have access
to management and documentation.
Senior independent director (“SID”)
The SID, Colin Keogh, acts as a sounding board to the
chairman and if necessary, serves as an intermediary
between the other directors. He is available to
shareholders if they have concerns when the normal
channels via the chairman, chief executive officer
and other executive directors, are not available.
The key responsibilities of the SID are:
ɽ Chairing the Human Capital and Remuneration
Committee and a member of the Audit and Risk
Committee;
ɽ chairing the Nominations and Directors’ Affairs
Committee when considering the succession of
the chairman of the Board;
ɽ developing effective working relationships with both
executive and non-executive directors while having
an awareness of any issues or concerns individual
directors may have;
ɽ leading the annual performance evaluation of the
chairman, considering the views of both executive
and non-executive directors and providing
appropriate feedback to the chairman;
ɽ all aspects of financial and capital reporting and
governance;
ɽ supporting and advising the chairman and the chief
executive officer in the execution of the strategy; and
ɽ ensuring the non-executive directors have access
to management and documentation.
Non-executive directors
The non-executive directors are independent of
management. Their role is to advise and challenge
management, along with monitoring their success in
delivering the agreed strategy within the risk appetite
and control framework set by the Board. They are also
responsible for determining appropriate levels of
remuneration for the executive directors.
Company secretary
All directors have access to the services of the Company
Secretary in relation to the discharge of their duties. The
Company Secretary is responsible for working with the
chairman to develop the agendas of the Board and
committees and to ensure that all procedures of the Board
are complied with. In addition, the Company Secretary
supports the chairman in the design and delivery of the
non-executive director induction programme. The
Company Secretary is the secretary for the Board and
its committees. The Company Secretary also advises the
Board on corporate governance matters, applicable rules
and relevant regulatory matters. The Board also obtains
advice from professional advisors as and when required.
The removal and appointment of the Company Secretary
is a matter reserved for the Board’s approval. The Board
confirmed the experience and effectiveness of the
Company Secretary on appointment.
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Composition, Succession
and Evaluation
Board composition
There is an appropriate combination of executive
directors and non-executive directors on the Board
such that no individual or small group of individuals can
dominate the Board’s decision-making. Prior to listing
the Board comprised a non-executive chairman, chief
executive officer, finance director and five non-executive
directors. On listing and at 31 March 2020 the composition
remained the same with a non-executive chairman, chief
executive officer, finance director and five non-executive
directors.
Board balance, independence
and time commitment
The UK Code recommends that at least half the board of
directors of a UK-listed company, excluding the chairman,
should comprise non-executive directors determined by
the board to be independent in character and judgement
and free from relationships or circumstances which
may affect, or could appear to affect, the director’s
judgement. The Board regards all of the non-executive
directors, other than Fani Titi, as “independent non-
executive directors” within the meaning of the UK Code
and free from any business or other relationship that
could materially interfere with the exercise of their
independent judgement.
On his appointment as Chairman, Gareth Penny did
satisfy the independence criteria. However, following
his appointment he is assumed, in accordance with the
UK Code, not to be independent. The Board, while
recognising the reasoning behind this assumption, has
concluded that the Chairman is independent, being
independent in character and judgement and being free
from any relationships or circumstances which are likely
to affect, or could appear to affect, his judgement.
Appointments to the Board are the responsibility of
the full Board. On joining the Board, the non-executive
directors receive a formal appointment letter, which
identifies the time commitments expected of them.
The terms and conditions of appointment of the non-
executive directors and service contracts of executive
directors are available to shareholders for inspection
at the Group’s registered office during normal
business hours.
The UK Code further recommends that directors should
be subject to annual re-election. Ninety One intends to
comply with this recommendation.
Board effectiveness
Due to the short period in the financial year for which
Ninety One was listed, the Board has not carried out
a board effectiveness review for the relevant period to
31 March 2020 but, in line with the requirements of the
UK Code and King IV, intends to undertake, led by the
chairman, a self-evaluation of its effectiveness in the
current financial year ending 31 March 2021.
Election and re-election
All new directors are subject to election at the first Annual
General Meeting (“AGM”) following their appointment
by the Board. Ninety One’s Articles of Association and
Memorandum of Incorporation also state that all
directors are subject to election at every AGM.
The Board explains the reasons why it believes each
director should be elected or re-elected in the notice of
meeting for the next AGM. As referred to above, those
directors who held office during the relevant period will
be subject to election at the forthcoming AGM. The
Board believes that its performance continues to be
effective and that their election is also consistent with
the Board’s evaluation of the size, structure and
composition of the Board.
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Induction and professional
development
On appointment all new directors receive a comprehensive
and tailored induction, having regard to any previous
experience they may have as a director of a public company
or otherwise. Ninety One also provides additional induction
materials and training for those directors who are
committee chairs. The induction programme provided
to Board members on appointment included:
ɽ The culture of Ninety One;
ɽ the structure and operation of a DLC;
ɽ directors’ duties and responsibilities under the UK
and South African Companies Acts, UK and JSE
Listing Rules, Disclosure and Transparency Rules
as well as the UK Code and King IV;
ɽ board charter and matters reserved for the Board;
ɽ group structure charts;
ɽ board committees, governance structure and terms
of reference;
ɽ constitutional documents;
ɽ board meeting schedule and plans;
ɽ risk management framework and the Internal Capital
Adequacy Assessment Process (“ICAAP”);
ɽ share dealing rules;
ɽ contact information for Board members and key staff;
and
ɽ meetings with executive management and the
company secretary.
The Board receives detailed reports from executive
management on the performance of Ninety One at its
meetings and other information as necessary. Regular
updates are provided on relevant legal, compliance,
risk, corporate governance and financial reporting
developments and directors are encouraged to attend
external seminars on areas of relevance to their role.
Appropriate training will be provided to any newly
appointed director and an ongoing programme of
training is available to all members of the Board including
professional external training, internal on-line training
and bespoke Board training on relevant topics such as
regulatory developments, ICAAP and cyber security.
Directors are also encouraged to devote an element of
their time to self-development. This is in addition to any
guidance that may be given from time to time by the
company secretary.
Diversity policy
The Board is committed to improving diversity in its
membership and while new appointments continue to
be based on skill, experience and knowledge, careful
consideration will be given to diversity.
On 12 February 2020, the Board approved the
introduction of a DLC Board Diversity Policy to be
implemented in 2020. A diverse Board will include and
make good use of differences in the skills, regional and
industry experience, cultural background, race, gender
and other distinctions between its members. Further
information on Board appointments can be found in the
Nominations and Directors’ Affairs Committee report on
page 70.
Compliance with the UK Code
and King IV
The Board is committed to the highest standards of
corporate governance. On and following listing, the
Board was fully aligned and compliant with all applicable
requirements of the UK Code and King IV save as
described below:
ɽ In relation to principles 8 and 10, King IV recommends
that the nomination committee’s members are all
non-executive directors with the majority being
independent and that the chief executive officer shall
not sit on the nomination committee, however, from
listing Hendrik du Toit has been a member of Ninety
One’s Nominations and Directors’ Affairs Committee.
See the explanation in the Nominations and Director’s
Affairs Committee report on page 71; and
ɽ as referred to in the Chairman’s Introduction on page
59 given how recently the listing took place and the
short period of time that the Board has been fully
established, an annual evaluation has not been
carried out this year (Section 3.21 of the UK Code).
Such evaluation will be conducted internally through
a questionnaire-based process in the second half of
2020 and through the annual cycle thereafter. The
Board also intends to comply with recommended
practice in relation to King IV principle 9 by having
an externally facilitated annual evaluation every
two years.
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Composition, Succession and Evaluation
DLC Nominations
and Directors’ Affairs
Committee Report
Role and responsibilities
The committee’s primary responsibility is to lead the
process for the appointment of new members to the
Board and in doing so ensuring that they bring the
right skills, experience, knowledge and diversity
to the Board. The committee is also responsible
for regularly reviewing the size, structure and
composition of the Board and leading the
process for succession planning.
Meeting attendance
The committee will meet at least twice a year.
Member
Gareth Penny
Appointment
date
19 November
2019
Idoya Basterrechea
Aranda
19 November
2019
Hendrik du Toit
19 November
2019
Meetings
eligible
to attend
Meetings
attended
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Dear shareholders
I am pleased to present my first Nominations and
Directors’ Affairs Committee Report for the financial
period to 31 March 2020.
The Board considers that having the appropriate range
of high calibre directors is key to achieving Ninety One’s
strategic objectives and to providing appropriate
oversight of regulatory matters and other risks facing the
business. Achieving the right balance of skills, knowledge
experience and diversity on the board in the interests
of enhancing the Board’s capabilities to deal with the
growth of the business and an ever changing regulatory
environment in which it operates, is of upmost importance.
Section 3.21 of the UK Code recommends an annual
performance review of each committee. However,
due to the committee only being established in late
2019 a performance evaluation for the year was not
considered appropriate but an internal review will be
completed in the next financial period and reported
on in the next Integrated Annual Report.
The committee’s duties and responsibilities are noted
below but detailed fully in the committee’s terms of
reference, which are available to view on Ninety One’s
website at www.ninetyone.com. Further information on
the activities of the Nominations and Directors’ Affairs
Committee are provided in the following report.
Gareth Penny
Chair of the Nominations and Directors’ Affairs
Committee
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Board composition by gender
Male 50%
Female 50%
Board composition by race
Black
White
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Committee membership and
regular attendees
The committee is chaired by Gareth Penny and the formal
members are Idoya Basterrechea Aranda and Hendrik du
Toit, Gareth and Idoya are independent non-executive
directors. The company secretary of Ninety One plc acts
as secretary to the committee.
Every member of the Board is entitled to attend any
committee meeting as an observer. However, the finance
director, the head of human capital and general counsel
will be invited to attend all meetings of the committee on
a regular basis and other non-members may be invited to
attend all or part of any meeting as and when appropriate
or necessary.
The Board has applied the principles set out in the UK
Code and King IV. Section 3.17 of the UK Code recommends
that a majority of the members of a nomination committee
should be independent non-executive directors. However,
King IV recommends that all members of the nomination
committee should be non-executive directors and that
the chief executive officer should not sit on the nomination
committee. Hendrik du Toit is a member of the committee,
so in that regard Ninety One will not be compliant with
King IV. The reason for this is due to the level of experience,
continuity and corporate memory Hendrik brings to the
committee as a founder of the business, especially given
that the independent non-executive directors only joined
during the final stages of the demerger process.
Board skills and experience
During the year the committee reviewed a directors’ skills
matrix detailing key expertise areas relevant to Ninety
One’s business. The matrix demonstrated that the Board
has a breadth of experience across a large number of
areas including financial services, financial markets, ESG,
risk management and business ethics. The review also
highlighted more limited experience with regard to the
technology sector. The Ninety One Information Technology
Team prepares regular Board reports and is able to
provide comprehensive support to the Board when
required but the committee will consider the skills
needs again when appointing future directors.
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Composition, Succession and Evaluation – DLC Nominations and Directors’ Affairs Committee Report
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7
Key areas of responsibility
The committee was constituted prior to listing and operates under formal terms of reference. It has discharged its
responsibilities both in the period prior to listing and post listing, up to and including the publication of the Integrated
Annual Report in the following areas:
Responsibilities
Committee’s activities
Composition of
the Board
Board skills,
experience and
knowledge
Committees’
membership
Committees’
terms of
reference
Appointment
of the SID
Independence of
the chairman and
non-executive
directors
Board
induction
ɽ Reviewed the size and composition of the Board and confirmed that it was appropriate for the DLC.
ɽ Prepared and considered a skills matrix for the Board detailing skills, knowledge, experience, geographical
spread and diversity. The committee were comfortable with the make-up of the Board.
ɽ Considered the membership and appointment of the chair for each of the Board committees just prior
to listing and recommended the appointments to the Board for approval; and
ɽ in particular, the committee considered the skills of the members of the Audit and Risk Committee and
confirmed that they were sufficiently qualified and experienced to be elected at the forthcoming AGM.
ɽ Approved the committees’ terms of reference and annual agenda framework in readiness for listing.
ɽ Reviewed the skills and experience of the independent non-executive directors and agreed that
Colin Keogh has the requisite skills required to be the SID.
ɽ Reviewed and confirmed that the Chairman, Gareth Penny was independent on appointment and that
the non-executive directors, Idoya Basterrechea Aranda, Victoria Cochrane, Colin Keogh, and Busisiwe
Mabuza, were independent in character judgement and free from any relationship that might hinder that
independence. With respect to Fani Titi, the committee confirmed that he was not independent due to
his appointment as a director of a significant shareholder, Investec.
ɽ Approved the Board’s induction policy. The committee also noted that a comprehensive and structured
induction process had been provided to the Board based on life as a listed company; and
ɽ the induction had included inviting new directors to meet with senior members of the business and
key external advisors.
Board
development
ɽ Discussed and agreed that continued development would be provided, particularly for new directors
covering such items as Ninety One’s business, its market environment, its people and its culture; and
ɽ the committee had agreed to keep abreast of other development areas where training may be required
on regulatory, cyber, governance and economic changes.
Board diversity
ɽ Reviewed and recommended the approval of the DLC Board Diversity Policy.
Election and
re-election
of directors
Succession
planning
Board and
committees
effectiveness
ɽ Confirmed that it was satisfied that the composition of the newly appointed Board will drive effectiveness
and recommended to the Board that each of the directors should stand for election (in accordance with
the UK Code) at the 2020 AGM.
ɽ Considered succession planning for the board of directors and senior management, considering the
opportunities, challenges and future needs facing Ninety One in light of its strategic objectives.
ɽ Discussed and agreed, in support of the chairman, that it will lead an internally facilitated Board,
committees and director evaluation process for 2020, the results of which will be discussed by the
committee and the Board as outlined in the corporate governance statement for the financial year
ending on 31 March 2021.
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Audit, Risk and Internal Control
DLC Audit and Risk
Committee Report
Role and responsibilities
The committee’s primary responsibility is to oversee
Ninety One’s corporate financial reporting, internal
controls and risk management framework and the
relationship with the external auditor, including an
assessment of the auditor’s independence and
objectivity.
Meeting attendance
The committee will, under normal circumstances,
meet at least three times a year. However, the
number of meetings this year reflects the fact that
the committee was only established mid-way
through the financial period in readiness for the
demerger.
Member
Victoria Cochrane
Appointment
date
19 November
2020
Idoya Basterrechea
Aranda
19 November
2020
Colin Keogh
19 November
2020
Meetings
eligible
to attend
Meetings
attended
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Dear shareholders
Following the committee’s formation in November 2019,
I am pleased to present my first Audit and Risk Committee
Report for the financial period to 31 March 2020.
The Audit and Risk Committee is a key governance
function for Ninety One providing formal arrangements
for considering how to apply financial reporting, risk
management, internal control processes and oversight
of the relationship with the auditor. It also advises the
Board on any material current risk exposures, emerging
risks and future risk strategy of Ninety One, including
the strategy for capital and liquidity management, and
the embedding and maintenance of a supportive risk
management culture. This report details the committee’s
performance against its duties detailed in the terms of
reference, which are available to view on the Ninety One
website at www.ninetyone.com.
Section 3.21 of the UK Code recommends an annual
performance review of each committee. However, due
to the committee’s recent establishment, a performance
evaluation for the financial period was not considered
appropriate but an internal evaluation will be completed
during the financial year 2021 and will be reported on in
the Integrated Annual Report 2021.
Victoria Cochrane
Chair of the Audit and Risk Committee
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Audit, Risk and Internal Control – DLC Audit and Risk Committee Report
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Key areas of responsibility
The committee was constituted prior to listing and operates under formal terms of reference. It has discharged its
responsibilities both in the period prior to listing and post listing, up to and including the publication of the Integrated
Annual Report in the following areas:
Responsibilities
Committee’s activities
Annual report and
financial statements
ɽ Reviewed the integrity of the financial disclosures, the financial statements and the significant
accounting policies;
ɽ ensured that the necessary information was included for shareholders to understand the business
model and strategy and to assess Ninety One’s financial position and performance;
ɽ reviewed significant judgements and accounting issues;
ɽ ensured that Ninety One had established appropriate financial reporting procedures and that those
procedures were operating, which included consideration of all entities included in the consolidated
group IFRS financial statements, to ensure that the firm had access to all the financial information to
effectively prepare and report on the financial statements;
ɽ considered whether Ninety One’s annual financial reports were fair, balanced and understandable; and
ɽ assessed the going concern and viability assessment.
Tax
JSE proactive
monitoring
ɽ Reviewed and approved the firm’s tax strategy and policy.
ɽ Reviewed the JSE’s latest report from its proactive monitoring process setting out the results of its
reviews of financial statements.
Finance director
ɽ Reviewed the appropriateness of the expertise and the experience of the finance director and the
wider Finance Team; and
ɽ confirmed that they were satisfied with the appropriateness of the expertise and experience
of the finance director.
External audit
ɽ Reviewed and approved the continued appointment, terms and fee of the external auditor;
ɽ received a detailed formal report on external audit findings for the financial year and management’s
response;
ɽ received information from the external auditor to enable assessment of the suitability for appointment
of KPMG and designated partners;
ɽ reviewed the directors’ letter of representation to the external auditor;
ɽ reviewed the policy and provision of non-audit services;
ɽ reviewed and confirmed the objectivity and independence of the external auditor;
ɽ reviewed the quality of the external audit, and the effectiveness of the External Audit Team;
ɽ considered the tenure of the external auditor and the external audit partners; and
ɽ met with the external audit partners without management present.
Internal audit
ɽ Reviewed and approved the internal audit charter and annual internal audit plan;
ɽ received updates on the progress and status of internal audit reviews; and
ɽ reviewed the effectiveness of the Internal Audit Team.
Internal controls and
risk management
Risk and compliance
ɽ Reviewed the adequacy and effectiveness of the internal controls and risk management systems.
ɽ Reviewed the principal risks and uncertainties;
ɽ reviewed the risk management framework, risk appetite statement, risk tolerances and risk reporting;
ɽ reviewed the compliance management framework and monitoring plan;
ɽ received a presentation on IT risk management; and
ɽ reviewed the adequacy and security of the Ninety One’s arrangements for anti-money laundering, anti-bribery
and corruption, anti-fraud and whistleblowing policies, IT risk controls and compliance monitoring.
COVID-19
ɽ Discussed extensively the impact and the risks associated with the COVID-19 pandemic.
Capital and liquidity
ɽ Reviewed the UK ICAAP;
ɽ reviewed the South African ORSA; and
ɽ reviewed the wind-down plan and Liquidity Risk Management Framework.
Committee terms
of reference
ɽ Reviewed and approved the committee’s terms of reference and annual agenda framework.
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Committee membership and
regular attendees
The committee is chaired by Victoria Cochrane and
the members are Idoya Basterrechea Aranda and Colin
Keogh, who are all independent non-executive directors.
The company secretary of Ninety One plc acts as
secretary to the committee.
Every member of the Board is entitled to attend any
committee meeting as an observer. However, the chief
executive officer, finance director, head of finance, head
of internal audit, representatives of the external auditor
and senior risk and compliance personnel are invited to
attend all meetings of the committee on a regular basis,
and other non-members may be invited to attend all or part
of any meeting, as and when appropriate or necessary.
The committee is constituted as a statutory committee
as required by the South African Companies Act 2008.
The committee’s composition complies with the UK Code
and King IV. Furthermore, it is a DLC committee of the Board
in respect of other duties assigned to it by the Board.
Financial reporting
The committee has reviewed the integrity of the financial
disclosures made in the Integrated Annual Report
together with the letter of representation and reports
from the external auditor, KPMG. The committee has
reviewed whether suitable accounting policies have
been adopted and has considered the significant
accounting estimates and judgements applied as
part of this process.
Significant accounting estimates
and judgements
The preparation of the financial statements requires the
application of certain estimates and judgements. Ninety
One has not identified any significant judgements and
estimates in respect of each reporting period that
require separate disclosure in the financial statements.
However, the areas that include estimates are related to
the valuation of Level 3 financial instruments per the fair
value hierarchy and the valuation of the pension fund
assets/obligations. Management do not expect changes
in assumptions to lead to a material adjustment in future
periods in these areas and full details are set out in the
financial statements.
Areas of either estimation or judgement not considered to
be significant, but which were reviewed by the committee
in respect of the 31 March 2020 financial statements are
set out below. Each of these areas is assessed by the
committee based on reports prepared by the Finance
Team. The external auditor, considered each estimate
and judgement and presented their conclusions to the
committee.
Basis of consolidation
Ninety One consists of two separate legal entities, being
Ninety One plc and Ninety One Limited, that operate
under a DLC structure as a result of legally binding
agreements that became effective at the point of
demerger. The effect of the DLC is that Ninety One plc
and Ninety One Limited and their direct and indirect
subsidiaries and associates operate together as a single
economic entity, with neither assuming a dominant role
and accordingly are reported as a single reporting entity
under IFRS.
IFRS does not specifically provide guidance on how to
account for such structures and hence judgement is
required when applying the consolidation principles of
IFRS 10 Consolidated Financial Statements. The directors
of Ninety One plc and Ninety One Limited, having
assessed the legal agreements referred to above and
the requirements of IFRS 10, have concluded that
Ninety One’s financial statements represent the
consolidation of the assets, liabilities and the results of
Ninety One plc and Ninety One Limited and their direct
and indirect subsidiaries and associates. Subsidiaries are
consolidated from the date Ninety One obtains control
and are excluded from consolidation from the date which
Ninety One loses control.
The committee considered the principles of consolidation
at length in the preparation of the Prospectus/pre-listing
statement ahead of Ninety One’s listing in March 2020
and are satisfied that appropriate consolidation principles
have been applied in preparing the 31 March 2020
financial statements in accordance with IFRS.
Lease assets and liabilities
IFRS 16 became effective for periods beginning on or
after 1 January 2019. The new standard removes the
distinction between operating and finance leases and
requires the recognition of a right-of-use asset and
corresponding liability for future lease payments. Ninety
One has elected to use the modified retrospective
approach and therefore has not restated comparative
information in preparing the 31 March 2020 financial
statements, as permitted under the specific transitional
provisions in the standard.
The committee reviewed the impact of IFRS 16 and key
judgements, including the determination of lease terms
and identification of appropriate discount rates used in
the calculation of lease liabilities. The committee agreed
with the discount rates recommended by the Finance
Team and the estimation and judgement required to
determine the incremental borrowing rates.
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Audit, Risk and Internal Control – DLC Audit and Risk Committee Report
Exceptional items
Exceptional items are defined as income or expenses that
arise from events or transactions that are clearly distinct
from the ordinary activities of Ninety One and therefore
are not expected to recur frequently or regularly. Such
items have been separately presented to enable a better
understanding of Ninety One’s operating performance.
Exceptional items relate primarily to:
ɽ The costs incurred as part of the demerger and listing
of Ninety One in March 2020; and
ɽ the impact of reversing staff expense accruals to
fund the investment into the new Ninety One share
schemes in March 2020, net of the share scheme
expenses which are amortised over the vesting
period of the awards under IFRS 2.
The committee reviewed the exceptional items proposed
by the Finance Team for the period and agreed that they
met the principles for treatment as exceptional items.
Alternative performance measures
(“APMs”)
APMs have been separately presented to enable a better
understanding of Ninety One’s operating performance.
The use and disclosure of APMs in the Integrated Annual
Report was reviewed by the committee and was found to
be appropriate, with clear definitions and explanations.
Tax strategy
The committee has reviewed and approved Ninety One’s
tax strategy noting the low appetite for tax risk. This has
been made publicly available on the Ninety One website.
Viability statement
The committee has assessed the viability of Ninety One
over a three year period to 31 March 2023 on behalf of
the Board and discussed Ninety One’s current financial
position, its liquidity and any risk to its future liquidity, its
capital surplus position and, for the financial statements
for the year ended 31 March 2020, the impact of
COVID-19. It has also reviewed the statements made
in the Integrated Annual Report to ensure that they
comply with disclosure requirements. Details of the
assessment can be found following the Financial Review
on pages 48 to 49.
The committee recommended to the Board that the
viability statement be approved.
Fair, balanced and understandable
The committee has considered on behalf of the Board
whether the Integrated Annual Report for the year ended
31 March 2020, taken as a whole, is fair balanced and
understandable and whether the disclosures are
appropriate. As part of that process and in justifying
this statement the committee has taken into account:
ɽ The robust process in place, led by the Investor
Relations Team, to create the Integrated Annual
Report working with appropriate internal teams
who have worked together to prepare the report,
including members of the Company Secretariat,
Legal, Risk, Internal Audit, Human Capital, Finance
and Marketing teams;
ɽ the early involvement of the committee in the
preparation of the report which enabled it to provide
input into the overall messages and tone;
ɽ the input provided by senior management and the
process of review, evaluation and verification to
ensure balance, accuracy and consistency;
ɽ a review of the full document to ensure the information
provided and the language used were accurate,
there was consistency between the front and back
sections of the report and user-friendly language
was used throughout;
ɽ assurance on each section in advance of the sign
off by the committee;
ɽ the reviews conducted by external advisors
appointed to advise on best practice; and
ɽ the final sign-off process by the Board.
Risk and internal controls
The Board has overall responsibility for Ninety One’s
system of internal controls, the ongoing monitoring of
risk and internal control systems and for reporting on any
significant failings or weaknesses. The system of internal
controls is designed to manage rather than eliminate the
risk of failure to achieve Ninety One’s strategic objectives
and can only provide reasonable assurance against
material misstatement or loss. The Board has delegated
responsibility to the committee for monitoring and
reviewing the effectiveness of the risk and internal
control framework.
The internal control framework is based on the
“three lines of defence” model. Risk management is
the responsibility of the management who constitute
the “first line”. Oversight and guidance are provided by
the “second line” through the risk management and
compliance functions. Independent oversight of the
internal controls of the business is the responsibility
of the “third-line”, the Internal Audit Team.
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Internal audit complies with the International Standards
for the Professional Practice of Internal Auditing and will
be subject to an independent Quality Assurance Review
(“QAR”) at appropriate intervals. The first QAR will take
place in the financial year 2026. The terms of reference
for internal audit are set out in the internal audit charter
which the committee approved.
Annually, internal audit compiles a risk-based audit plan,
which is assessed and validated by management and
approved by the committee. The annual internal audit
plan is reviewed regularly to ensure it remains relevant
and responsive, as a result of changes in the industry,
the regulatory and operating environment. All changes
to the plan are approved by the committee. Significant
control weaknesses are reported in terms of an
escalation protocol to Ninety One’s specialised sub-risk
committees, where remediation procedures and
progress are considered and reviewed by management.
The committee receives a report on significant control
issues and actions taken by management to remediate
risks. Internal audit has unrestricted access to all Ninety
One documentation, functions and employees as
required, to enable it to perform its functions.
Internal audit proactively reviews its practices and
resources for adequacy and appropriateness to meet
corporate governance and the regulatory requirements.
The Internal Audit Team comprises well-qualified,
experienced staff to ensure that the function has the
competence to meet Ninety One’s requirements. Where
specialist skills are required, these are obtained from third
parties. Internal audit liaises with the external auditors
and with Ninety One’s risk management and compliance
teams providers, to enhance efficiencies in terms of
integrated assurance.
The committee has the responsibility to assess that
internal audit has adequate resources and continues
to be effective within its remit. The appointment and
removal of the head of internal audit is the responsibility
of the committee. A questionnaire based procedure to
monitor and review internal audit’s effectiveness using
feedback from the board and senior management has
been established.
The head of internal audit reports to the committee, to
ensure its independence from the business and internal
audit it is subject to an effectiveness review on an
annual basis.
Both the Internal Audit Team and the Compliance
Monitoring Team perform a number of audits during the
year covering the adequacy of controls and compliance
with regulation. Results from these assurance activities
are reported to executive management and to the Board
and are shared for action with the relevant teams. In
satisfying the requirements to ensure Ninety One has
adequate and effective systems of internal controls and
risk management, and taking into account the assurance
provided by risk, compliance and internal audit functions,
the committee has:
ɽ Reviewed the adequacy and effectiveness of
internal controls, financial controls, risk management
framework and infrastructure as well as the internal
control statements in the Integrated Annual Report;
ɽ considered reports on a range of factors when
determining the key risks and uncertainties faced
by Ninety One. These included assessments of
Ninety One’s capital position and process for
the production of Ninety One’s internal capital
assessments. Further information can be
found in the Risk Management section of the
Strategic Report set out on pages 50 to 57; and
ɽ reviewed the effectiveness of the anti-money
laundering, anti-bribery and corruption, anti-fraud
and whistleblowing policies, IT risk controls and
compliance monitoring.
The committee was content with the effectiveness
of Ninety One’s processes governing financial and
regulatory reporting and controls, its culture, ethical
standards and its relationships with regulators. The
committee was also satisfied with the appropriateness
and adequacy of the risk management arrangements and
supporting risk management systems including: the risk
monitoring processes, internal controls framework and
the three lines of defence model.
Internal audit
In anticipation of the demerger from Investec, Ninety One
established its own Internal Audit Team from 1 October
2019, covering all geographies in which Ninety One
operates by using a risk-based methodology. Previously,
internal audit work was performed by Investec’s internal
audit teams.
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Audit, Risk and Internal Control – DLC Audit and Risk Committee Report
External auditor
The committee has responsibility for overseeing
the relationship with the external auditor, KPMG, as
well as ensuring its independence and objectivity.
The committee has approved the external auditor
engagement letter, audit fee and audit plan, including
materiality levels. The committee has reviewed
arrangements for ensuring the external auditor’s
independence and objectivity, including the external
auditor’s fulfilment of the agreed audit plan.
A full assessment of the quality and effectiveness
of KPMG’s FY 2020 audit was considered by way of
a questionnaire completed by key stakeholders in
accordance with the FRC’s guidance on assessing
audit quality. The findings from this questionnaire were
presented to the committee in May 2020. During the
year, the committee also discussed the periodic UK FRC’s
and South African Independent Regulatory Board for
Auditors’ audit quality review findings, performed during
the ordinary course of business, and root cause analysis
performed by KPMG. The committee has concluded
that external audit and the external audit process was
effective.
Tenure of external audit
This is the first year KPMG have been the auditors of
Ninety One. Jatin Patel is the lead partner for the UK and
Gawie Kolbe is the lead partner for South Africa. They
have demonstrated appropriate qualifications and
expertise and have remained independent of the Group.
However, to meet UK requirements, the committee will
undertake a tender process during the year ending
31 March 2021.
Non-audit fees
The committee reviewed and approved the non-audit
services policy noting that it was the Group’s intention
not to utilise KPMG for the provision of non-audit
services, other than in rare circumstances which
would require approval by the finance director and the
committee chair. KPMG as a firm has taken the decision
going forward not to engage in non-audit services for
any of their clients. However, the committee noted that
there were exceptions to this in that certain services
provided by the auditors were classed as non-audit but
were not considered to impact on their independence
as they are closely linked to their statutory audit
responsibilities. These exceptions include the audit of
the interim financial statements, the Dual AAF 01/06 and
ISAE 3402 controls reporting, and regulatory reporting
(including in respect of the FCA Client Money and Asset
Rules), where KPMG would continue to provide these
services. It was also noted that fund audits were separate
and not considered to be part of this assessment.
Fees paid to KPMG for non-audit work during the year
amounted to £1,941,855 of which £1,043,000 related
directly to the demerger from Investec, £604,947
related to mandated assurance reporting of regulated
subsidiaries, £238,908 related to tax advisory services
and £55,000 related to other non-audit services. Fees
for the statutory audit for the year were £1,607,461.
Investec paid £1,691,000 of the above fees as they
related directly or indirectly to the demerger.
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DLC Sustainability, Social
and Ethics Committee Report
Role and responsibilities
The committee’s primary responsibility is to oversee
sustainability, social and ethical commitments,
targets and performance of the Group.
It provides guidance in relation to sustainability
matters generally, reviewing and updating Ninety
One’s framework of sustainability policies and
strategies, ensuring they are aligned with global
best practice. Our approach to sustainability is
set out in the Strategic Report on pages 32 to 40.
Meeting attendance
The committee will, under normal circumstances,
meet at least four times a year. However, the number
of meetings this year reflects the fact that the
committee was only established mid-way through
the financial period in readiness for the demerger.
Member
Appointment Date
Busisiwe Mabuza
Gareth Penny
Hendrik du Toit
19 November
2019
19 November
2019
19 November
2019
Meetings
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Dear shareholders
Following the committee’s formation in November 2019,
I am pleased to present my first Sustainability, Social
and Ethics Committee Report for the financial period
to 31 March 2020.
The committee plays a critical role in monitoring Ninety
One’s ability to create value and contribute to the health
of our economies, our people, our communities and the
shared environment. We recognise that economic
growth and societal transformation are vital to creating
a sustainable future for all the communities in which we
operate and that we play a meaningful role in enabling this.
Ninety One also recognises the contribution each
employee makes towards the success of the Group.
Our aim is to promote a non-biased safe working
environment for all our workforce to enable each
employee to flourish. We are committed to reviewing
our practices around creating a fair, diverse and inclusive
working environment. For further information in regard
to Ninety One’s approach to corporate sustainability,
social and ethics please refer to pages 32 to 40.
This report details the committee’s performance against
its duties, as detailed in its terms of reference, for the brief
period that Ninety One has been listed. The committee’s
terms of reference are available to view on Ninety One’s
website at www.ninetyone.com.
Section 3.21 of the UK Code recommends an annual
performance review of each committee. However, due
to the committee’s recent establishment, a performance
evaluation for the financial period was not considered
appropriate but an internal evaluation will be completed
in late 2021 and reported on in the Integrated Annual
Report 2021.
Busisiwe Mabuza
Chair of the Sustainability, Social and Ethics Committee
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DLC Sustainability, Social and Ethics Committee Report
Committee membership and
regular attendees
The committee is chaired by Busisiwe Mabuza, an
independent non-executive director and the members
are Gareth Penny who is an independent non-executive
director and Chairman of the Group and Hendrik du Toit
who is the Chief Executive Officer. The company
secretary of Ninety One plc acts as secretary to the
committee. In accordance with King IV recommended
practice, the majority of the members of the committee
are independent non-executive directors.
Every member of the Board is entitled to attend any
committee meeting as an observer. However, the
finance director, the head of human capital and
general counsel will be invited to attend all meetings
of the committee on a regular basis and other non-
members may be invited to attend all or part of any
meeting as and when appropriate or necessary.
Key areas of responsibility
The committee is constituted in accordance with the
South African Companies Act No. 71 of 2008 read with
Regulation 43 of the Companies Regulations, 2011 and
recommendations of King IV.
Schedule of topics
During the reporting period, at the committee’s request,
management have formulated a revolving schedule of
topics to focus on at each meeting. These topics are
based on a comprehensive matrix of matters relating
to the committee’s areas of responsibility. The resulting
matrix is a key tool to ensure that the committee meets
its monitoring obligations.
The committee chair regularly reports to the Board on
the work and output from meetings and provides any
necessary recommendations or advice on matters of
direct relevance to the deliberations of the Board.
The committee was constituted prior to listing and operates under formal terms of reference. It has discharged its
responsibilities both in the period prior to listing and post listing, up to and including the publication of the Integrated
Annual Report in the following areas:
Responsibilities
Committee’s activities
Sustainability
ɽ Reviewed the Group’s global sustainability framework and strategy to:
•
Invest: Investing in strategies which incorporate ESG processes and offering sustainable
investment solutions;
• Engage: Seeking to lead the conversation on sustainable investing; and
•
Inhabit: Running the business responsibly and acting sustainably.
Social and economic
development
(including human
rights)
ɽ Reviewed the Group’s standing in terms of the goals and purposes of the 10 principles set out under
the United Nations Global Compact Principles (UNGC) and noted that the Group remains committed
to these principles with respect to human rights, labour, environment and anti-corruption;
ɽ reviewed and approved the Group’s human trafficking and modern slavery statement; and
ɽ reviewed the Organisation of Economic Co-Operation and Development (OECD) recommendations
regarding corruption.
The South African
Employment
Equity Act
ɽ Reviewed Ninety One’s compliance with the relevant legislation and progress made against employment
equity plans;
ɽ reviewed diversity across the Group and considered any regulatory developments in this regard;
ɽ supported management’s efforts to build a diverse organisation and maintain a diverse talent pipeline;
and
ɽ satisfied itself that the Group did take the appropriate measures in order to comply with the relevant
legislation.
ɽ Reviewed compliance with the relevant legislation;
ɽ received and reviewed detailed information on recent developments with respect to the Department
of Trade and Industry Codes, the Financial Sector Charter and the scorecards; and
ɽ reviewed empowerment rating and discussed with management how to improve the rating.
The South African
Broad-Based
Black Economic
Empowerment Act
(B-BBEE)
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Corporate citizenship
ɽ Reviewed the various initiatives and elements of good corporate citizenship across the Group’s
promotion of equality, prevention of unfair discrimination and reduction of corruption, including
transformation policies and strategies, and social responsibility policies and strategies;
ɽ contributing to the development of the communities in which its activities are predominantly
conducted or within which its products or services are predominantly marketed;
ɽ recording sponsorship, donations and charitable giving; and
ɽ monitoring the COVID-19 response.
Environment, health
and public safety
Consumer
relationships
Labour, employment
issues and workforce
engagement
ɽ Reviewed the Group’s impact on the environment, health and public safety, including the impact
of Ninety One’s activities and of its products or services; and
ɽ reviewed the performance relating to CO2 emissions and carbon-based energy.
ɽ Considered consumer relationships, including the Group’s advertising, public relations and compliance
with consumer protection laws.
ɽ Reviewed the Group’s standing in terms of the International Labour Organisation Declaration on
Fundamental Principles and Rights at Work;
ɽ reviewed the Group’s investment in significant opportunities for the development of its leaders
and employees;
ɽ reviewed the Group’s employment relationships and its contribution towards the educational
development of its employees;
ɽ reviewed culture and ethics with respect to its employees;
ɽ confirmed the appointment of Colin Keogh as the independent non-executive director responsible
for interfacing with the workforce in compliance with the requirements of the UK Code on workforce
engagement;
ɽ reviewed and approved the workforce engagement programme; and
ɽ received updates on the workforce engagement programme.
Culture and ethics
ɽ Reviewed and satisfied itself that the Group’s culture and ethical values had a positive impact on the
success of the Group and wellbeing of local communities, the environment and on overall
macroeconomic stability.
Whistleblowing
ɽ Reviewed the Whistleblowing Policy and programme for staff to raise issues of potential impropriety,
with the Audit and Risk Committee.
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Report on Directors’ Remuneration
DLC Human Capital
and Remuneration
Committee Report
Role and responsibilities
The committee is responsible for determining and
developing the Group’s policies for remuneration of
the chairman of the Board, the Executive Directors
and senior executives. In determining such policies,
the committee will have regard to the need to
attract, retain and motivate directors and senior
executives of the quality required to run the Group
successfully in a way that promotes its strategy and
long term success.
Meeting attendance
The table below lists the members of the committee
during 2020 and the number of meetings they
attended in the financial year 2020. Two meetings
of the committee took place during the financial
year 2020.
Member
Colin Keogh
Appointment
Date
19 November
2019
Idoya Basterrechea
Aranda
19 November
2019
Busisiwe Mabuza
19 November
2019
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Dear shareholders
I am pleased to present our Directors’ Remuneration
Report for the financial year 2020, which includes our
first Directors’ Remuneration Policy (“the Policy”)
submission for your approval since Ninety One’s
demerger from Investec.
Ninety One’s listing as an independent business on the
LSE and JSE took place on 16 March 2020, and was
the culmination of nearly 30 years of the visionary
stewardship of Hendrik du Toit and Kim McFarland,
the Executive Directors of Ninety One.
Under their leadership, Ninety One retains a long-
standing and highly motivated management team, which
has together delivered record earnings in the financial
year 2020. While the COVID-19 pandemic continues to
pose logistical, economic and market challenges, Ninety
One is a resilient business, supported by our high quality
client relationships, diverse investment offering and our
unique “owner-culture”.
Committee membership and
regular attendees
The committee is chaired by Colin Keogh, and the
members are Idoya Basterrechea Aranda and Busisiwe
Mabuza, who are all independent non-executive
directors. The company secretary of Ninety One plc
acts as secretary to the committee.
Every member of the Board is entitled to attend any
committee meeting as an observer. In addition, the chief
executive officer, the finance director, the head of human
capital and external advisors may be invited by the
committee to attend all or part of any meeting, as and
when appropriate or necessary. Notwithstanding this,
no person shall be involved in any decisions as to their
own remuneration.
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The committee was further guided by the following
key principles:
Simplicity, clarity and alignment with
existing remuneration philosophy
Ninety One strives to attract and retain the highest
calibre individuals who enjoy a sense of responsibility and
ownership. In support of this objective, Ninety One has
long-standing remuneration structures in place for the
wider workforce which are clear and simple, and which
also promote and protect Ninety One’s unique employee
ownership and culture. These structures have been
designed and implemented to align employee interests
with those of shareholders and clients, while supporting
the long term sustainability of the business, and our
culture of good conduct and risk management.
We attach considerable importance to simplicity and
clarity and believe it is important that the Policy is aligned
with Ninety One’s existing remuneration philosophy.
To this end, the Policy proposes only two pay
components, namely fixed remuneration and a
single annual variable remuneration award.
Competitive remuneration levels
Remuneration levels at Ninety One reflect both our
pursuit of excellence and commitment to organic
business building. In setting remuneration levels, truly
exceptional contributions are rewarded, recognising our
competitive positioning alongside local and international
peers, including those that are privately held.
Fixed remuneration levels reflect the relative skills and
experience of the Executive Directors. The current
Executive Directors will not receive any pension benefits,
and their employee benefits will be in line with the wider
UK workforce. As set out in the Prospectus, the Executive
Directors will each receive fixed remuneration equal
to 50% of the annual fixed remuneration which they
received as executive directors of Investec, in line with
typical asset management pay structures where a
greater emphasis is placed on variable remuneration.
The committee is constituted in accordance with the
JSE Listing Requirements, the UK Code and King IV. The
committee’s composition complies with the UK Code and
King IV. Furthermore, the committee is a DLC committee
of the Board in respect of other duties assigned to it by
the Board.
Major decisions of the committee
Since the committee formed in February 2020, it has
focused its work on finalising the transitional remuneration
arrangements for the Executive Directors for the financial
year 2020 and formulating the Policy, which is intended to
apply from the financial year 2021 onwards. I have set out
below a summary of our approach and further details of
the Policy can be found on pages 86 to 94.
Formulating the Policy
Prior to Ninety One’s listing, the committee developed
a framework for remunerating the Executive Directors,
the principles of which were set out in our Prospectus.
In developing the Policy, the committee has considered
both external guidance and factors specific to
Ninety One.
External guidance:
ɽ Market practice and peer data;
ɽ advice from our independent remuneration advisors,
Deloitte LLP;
ɽ advice from legal counsel, being Linklaters LLP and
ENSafrica; and
ɽ corporate governance standards in the UK and
South Africa.
In addition, the committee has specifically consulted with
shareholders to obtain their views on the Policy.
Factors specific to Ninety One:
ɽ The committee recognises the instrumental roles
the Executive Directors have played in founding and
growing this business over a period of almost three
decades, as well as their unique and enduring roles
in ensuring the stability and development of Ninety
One’s senior management team, which will support
the continuity of Ninety One’s long-term strategy
and ultimately deliver value for shareholders.
This was a fundamental consideration in setting the
fixed remuneration levels and the variable remuneration
opportunities under the Policy.
ɽ The Executive Directors have significant equity
exposure to Ninety One via their participations in the
Marathon Trust (being equivalent to 1.93% in the case
of Hendrik du Toit, and 1.25% for Kim McFarland, as at
31 March 2020).
This was a fundamental consideration in the structural
design of the Policy.
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Report on Directors’ Remuneration – Human Capital and Remuneration Committee Report
Variable remuneration opportunities under the Policy are
capped at 800% of fixed remuneration, and in setting
this cap the committee specifically considered historical
remuneration levels of the Executive Directors at
Ninety One, industry benchmarks for both listed and
unlisted peers and remuneration levels of other senior
management at Ninety One. The proposed award
opportunities also reflect the instrumental roles the
Executive Directors have played in founding and growing
this business over a period of almost three decades,
as well as their unique and enduring roles in ensuring
the stability and development of Ninety One’s senior
management team, which will support the continuity
of Ninety One’s long term strategy and ultimately deliver
value for shareholders. Maximum variable remuneration
outcomes will only be awarded for the achievement of
stretching financial and non-financial performance, in
line with Ninety One’s long term strategy.
The current operating environment has presented
challenges for the committee in setting performance
targets under the Policy. In this regard, the committee
has been guided by the importance of ensuring
that performance and remuneration outcomes are
aligned. The committee therefore devoted significant
energy to identifying a range of performance and
remuneration outcomes which would ensure that the
Executive Directors continue to be incentivised to
deliver long-term value for shareholders, in the
context of this challenging environment and market
expectations. Market volatility and uncertainty are
expected to persist for the foreseeable future, which
may have a significant impact on Ninety One’s future
performance. Notwithstanding the targets set, the
committee retains discretion under the Policy to apply
its judgement when determining final remuneration
outcomes, to ensure that these are clearly linked to
performance achieved and also reflect the
shareholder experience.
Link to strategy and long term
alignment with shareholders
The Policy for Executive Directors has been formulated
by the committee to closely align with the overall
remuneration philosophy at Ninety One, while
recognising shareholder expectations for a listed
company. The reason for selecting a single incentive
model over the more widely used long term and short
term incentive structure is the considerable alignment
that already exists between the Executive Directors and
shareholders, principally through their significant equity
exposure to Ninety One via their participations in the
Marathon Trust.
Ninety One is committed to profitably growing and
continuing to create long term shareholder value
through the consistent quality of our client servicing
and differentiated investment offering.
The committee will select measures and targets which
are aligned with our strategic priorities, in order to
incentivise the Executive Directors in a way that will
deliver value over the long term in line with our purpose.
The committee has created this long term incentivisation
by setting the lifespan of any one award at eight years,
being the period from the start of the performance
period through to the end of the required holding
period for that award.
Policy summary
For the purposes of the Policy, the committee has
proposed the Executive Incentive Plan (the “EIP”), under
which each of the Executive Directors will be eligible to
receive an annual single incentive award, which has both
long term and short term elements. The long term
element will comprise 55% of the award and be subject
to performance assessment over three financial years,
on a trailing basis, while the short term element will
comprise 45% of the award and be subject to
performance assessment over the most recent
financial year.
The award will be based 75% on financial/quantitative
performance (comprising 55% long term performance
and 20% short term performance) while 25% of the
award will be based on non-financial/qualitative
performance (all short term performance). For both long
term and short term financial performance, the measures
will include adjusted earnings per share (“Adjusted EPS”)
(50% weighting), net flows (12.5% weighting) and
investment performance (12.5% weighting). The targets
for the performance measures will be set annually by the
committee for the relevant performance periods. The
targets applicable to the financial measures may differ
between the long term and short term performance
elements, considering the financial performance
outlook for Ninety One.
The committee believes that the financial measures
chosen are consistent with the overall strategy of
Ninety One. In particular, Adjusted EPS is the single most
important indicator of business performance and has
been weighted accordingly. Net flows and investment
performance are also key drivers of value creation.
The non-financial measures chosen each year by the
committee will ensure an appropriate focus on strategic
progress, sustainability, risk management, client
outcomes, people and culture.
Up to 50% of the award will be payable in cash following
the end of the financial year, and at least 50% will
be deferred into Ninety One shares for three years.
Following the end of the deferral period, deferred awards
will normally be subject to a further two-year holding
period, with 50% released four years after award and
50% released five years after award. Awards will be
subject to malus and clawback provisions.
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Overview of executive remuneration
for the financial year 2021
For the financial year 2021, no increases are proposed
to the fixed remuneration for either of the Executive
Directors. In relation to variable remuneration, the single
incentive model proposed will measure performance
relative to stretching targets across a range of financial
and non-financial measures.
While the framework for the single incentive model
is formulaic, the committee will retain discretion to
consider performance holistically and adjust formulaic
outcomes to ensure that final remuneration awards are
aligned with the sustainable performance of Ninety One
and our purpose to deliver value over the long term.
The committee believes that the 2020 executive
remuneration outcomes are aligned with the interests
of shareholders and that the Policy will incentivise the
Executive Directors over both the long and short term,
which will support the continuity of Ninety One’s long
term strategy and ultimately deliver value for shareholders.
I hope that you will vote in support of the proposed
resolutions at our AGM on 3 September 2020.
Colin Keogh
Chair of the Human Capital and Remuneration Committee
Corporate governance
The committee is satisfied that the Policy meets the
requirements of corporate governance codes in both
the United Kingdom and South Africa. In particular,
the Policy incorporates features which enhance the
positive alignment between the Executive Directors and
shareholders. Further, the committee has been mindful of
shareholder guidelines on remuneration and will continue
to take these into account in fulfilling our duties in relation
to remuneration for the Executive Directors and for the
wider workforce.
Executive remuneration outcomes
for the financial year 2020
For the financial year 2020, Ninety One’s two Executive
Directors were remunerated as described in the
Prospectus. This includes fixed remuneration and an
award of variable remuneration made in recognition
of their contribution to the successful rebranding and
demerger of Ninety One from Investec, together with
Ninety One’s strong financial performance in the
financial year 2020. Further detail is set out in the
Annual Report on Remuneration.
The committee recognises that both Executive Directors
are eligible to receive variable remuneration in respect
of their services as directors of Investec during the
financial year 2020, as described in the Prospectus.
In determining the Ninety One remuneration outcomes
for the financial year 2020, the committee was mindful
of these entitlements and determined outcomes in
this context.
Illustration of the EIP
The graphic below illustrates the operation of the EIP for the award to be granted in respect of the financial year 2021,
which is described in detail in the Policy, set out on the pages that follow.
Long-term element measured on trailing
basis over the three years up to and
including the performance year
Short-term element measured annually
at the end of the performance year
FY 2019
FY 2020
FY 2021
Real growth in
adjusted EPS
Real growth in
adjusted EPS
Real growth in
adjusted EPS
%
5
5
Investment
performance
Investment
performance
Investment
performance
Net flows
Net flows
Net flows
%
0
2
%
5
2
Annual financial
performance
– above measures
Annual
non-financial
performance
Short- and
long-term
targets are
measured
to determine
the value of
the award
Up to 50%
of the
award is
paid in cash
Maximum
award 800%
of fixed
remuneration
50%
cash
50%
deferred
over
3 years
At least 50% of the award would be delivered as forfeitable
shares deferred for a period of three years. A further two-year
holding period would apply with shares being released 50% at
the end of years four and five respectively
FY 2022
FY 2023
FY 2024
FY 2025
FY 2026
50%
released
50%
released
Lifespan of a single award extends over eight years
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Report on Directors’ Remuneration
6
8
Directors’
Remuneration Policy
The Policy has been developed over the course of a
number of committee meetings between February
2020 and May 2020, taking into account market data
and competitor practice, corporate governance
requirements and shareholder expectations.
The Policy supports the long term success of our
business by adhering to the following principles, in
line with corporate governance requirements:
ɽ It is simple, fair and transparent, with clear links
between Ninety One’s strategy and remuneration
outcomes.
ɽ It is designed to promote our culture and values, with
an emphasis on risk management and conduct.
ɽ It aligns interests of Executive Directors with those
of shareholders and clients.
ɽ It emphasises the importance of non-financial drivers
for Ninety One’s long term success.
ɽ Remuneration levels reflect our pursuit of excellence
for our clients and our commitment to organic
business building.
Introduction and key principles
It is intended that the Policy takes effect from
3 September 2020, the date of the AGM, subject to
shareholder approval of the Policy and associated
plan rules.
At Ninety One, we seek to attract and retain the highest
calibre individuals who enjoy a sense of individual
responsibility and ownership. Results and relationships
remain at the core of our thinking. Our approach to
remuneration is that it is an important (but not the only)
part of our employee value proposition – designed to
attract, retain and motivate staff and to reinforce the
behaviours needed to support our culture and values
over the short term and long term in a risk conscious
manner. Integral to the determination of remuneration
levels is the commitment to our culture in the pursuit
of excellence for our clients within an effective risk
management environment.
Ninety One’s remuneration policies are clear and
transparent - they are designed and implemented to
align employee interests with those of all stakeholders
including our shareholders and clients, and to support
the long term success of our business.
The Policy has been formulated within the framework of
Ninety One’s overall remuneration philosophy described
on page 94. Under the Policy, the performance of the
Executive Directors will be assessed against financial
and non-financial measures which are key drivers of
Ninety One’s success.
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Executive Directors – policy table
The Executive Directors’ remuneration has two main components, being fixed remuneration and variable remuneration in
the form of an annual single incentive award. A single incentive award was deemed appropriate given the significant
direct and indirect shareholdings of the Executive Directors in Ninety One. The Executive Directors are also eligible
to participate in HMRC-registered all-employee share plans. The following table sets out the Policy in relation to these
components. Full details of how the committee intends to apply the Policy in the financial year 2021 are contained in
the Annual Report on Remuneration.
Element and link to strategy
Operation
Opportunity
Performance
Fixed remuneration
Fixed remuneration reflects
the relative skills and
experience of, and
contribution made by,
the individual.
Fixed remuneration is
set at levels that allow
us to attract and retain
executives with the
necessary skills and
experience to deliver
strategic objectives.
Pension
Fixed remuneration is delivered in cash (base salary),
with a portion sacrificed to fund benefits.
Fixed remuneration will be reviewed annually. Factors
considered in any review would include: the size and
scope of the role, business and individual performance,
affordability, increases for the wider workforce and
peer comparisons.
Fixed remuneration adjustments would typically be
effective from 1 April.
The current fixed remuneration
for the chief executive officer
is £666,000 per annum and
£533,000 per annum for the
finance director.
Individual performance
will be taken into
consideration when
awarding any increase
in fixed remuneration.
There is no overall maximum
opportunity or increase.
However, in awarding any
increase, the committee will be
mindful of any relevant factors,
which may include increases
for the wider workforce or
changes in scope of role.
The current Executive Directors are not entitled to any pension benefits. Any new Executive Directors may be entitled to pension benefits in line with
those generally offered to the wider workforce in the location in which they are employed.
Benefits
To provide a market
competitive level of fixed
remuneration that allows
us to attract and retain
executives with the
necessary skills and
experience. Benefits reflect
local market practice and
support health and
wellbeing.
Ninety One offers a range of benefits which currently
includes private medical insurance, disability insurance
and life cover, which are the benefits generally offered to
all Ninety One employees in the UK.
These benefits are funded
by each of the Executive
Directors sacrificing a portion
of their fixed remuneration.
Not applicable
The benefits provided may be subject to amendment
from time to time by the committee within the Policy.
In addition, Executive Directors are eligible for other
benefits which are introduced for the wider workforce,
on broadly similar terms.
The value of benefits is
dependent on each
Executive Director’s individual
circumstances. The committee
has therefore not set a
maximum monetary value
for this component of fixed
remuneration, save that
the aggregate of cash and
benefits will not exceed the
value of fixed remuneration.
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Report on Directors’ Remuneration – Directors’ Remuneration Policy
Element and link to strategy
Operation
Opportunity
Performance
8
8
EIP
Annual single incentive
award which rewards the
delivery of key financial and
non-financial objectives
which are consistent with
Ninety One’s strategy and
are measured over both
long term and short term
periods.
Enhances Executive
Directors’ alignment
with shareholders via
appropriate performance
measures and through
deferral into Ninety One
shares.
The EIP will reward performance, assessed against
financial/quantitative and non-financial/qualitative
measures, over the current year and the preceding
three-year period.
The committee will set the long term and short term
performance measures, targets and the weighting
annually to reflect the key financial and strategic
priorities for Ninety One. Performance conditions
will be determined and set subject to the following
parameters:
ɽ Not less than 75% of the overall award will be
based on financial performance measures, and
ɽ Not less than 55% of the overall award will be
based on long term performance.
Award outcomes will be assessed annually following
year end, and will be based on a formulaic application
of the Policy, with the committee retaining discretion to
consider performance holistically and adjust formulaic
outcomes to ensure that final remuneration awards are
aligned with the sustainable performance of Ninety
One and our purpose to deliver value over the
long term.
Up to 50% of each award will be paid in cash, with the
remaining amount (being at least 50% of the award)
deferred into an award of Ninety One shares, which will
be entitled to receive dividends or dividend equivalents.
Deferred awards will vest in full three years after award.
Following vesting, deferred awards will normally be
subject to a further two year holding period, with 50%
released four years after award and 50% released five
years after award.
Malus and clawback provisions will apply, as described
in further detail on page 90.
The committee will set the
long term and short term
performance measures
annually to reflect the key
financial and strategic
priorities for Ninety One.
The measures may
therefore vary from
year to year.
The measures for the
financial years 2021, 2022
and 2023 are set out in
the Annual Report on
Remuneration on page 101.
Awards granted in respect
of each financial year will
be capped at 800% of fixed
remuneration (subject to
treatment in a change of
control event).
Performance will be measured
relative to threshold, target
and stretch achievement
levels. Award outcomes as a
percentage of the maximum
award opportunity will be
as follows:
ɽ Threshold: 25%
ɽ Target: 50%
ɽ Stretch: 100%
Award outcomes will be
determined on a straight-line
basis for performance
between these levels.
Award outcomes will be set out
in the relevant Annual Report
on Remuneration.
Share Incentive Plan (“SIP”)
To increase the alignment
of the Executive Directors’
interests with shareholders.
May provide UK tax benefits.
Executive Directors are eligible to participate in Ninety
One’s HMRC-approved SIP, on the same terms as other
employees.
Participation in the Ninety One
SIP is subject to maximum
limits set by HMRC. This is
currently £1,800 per year
for partnership shares.
Not applicable
Shareholding requirement
Not applicable
Not applicable
To maintain the alignment of
the Executive Directors with
the long term interest of
Ninety One and our
stakeholders.
Executive Directors are expected to build and maintain
an interest in Ninety One shares, and to retain a portion
of this interest for a period after ceasing to be an
Executive Director.
Requirements for current Executive Directors
While serving as an Executive Director:
ɽ 1,000% of fixed remuneration for the chief executive
officer, and
ɽ 800% of fixed remuneration for the finance director.
Each of the current Executive Directors exceeds this
requirement by virtue of their respective participation in
the Marathon Trust.
For a period of two years from ceasing to be an
Executive Director, the following will normally apply:
ɽ 500% of fixed remuneration for the chief executive
officer, and
ɽ 400% of fixed remuneration for the finance director.
Requirements for new Executive Directors
The level of interests in Ninety One shares required will be
considered by the committee at the time of appointment,
having due regard to the scope of the role.
This requirement will need to be attained within a
reasonable timeframe (expected to be no longer than five
years from appointment), but having regard to any existing
share interests.
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Explanatory notes to the table
Competitive positioning
Remuneration opportunities recognise our competitive
positioning alongside local and international peers,
including those that are privately held.
Wider workforce context
The wider workforce receives fixed remuneration, which
includes base salary, pension contributions (where
applicable) and other local employee benefits. Variable
remuneration typically takes the form of an annual
discretionary award, which may comprise both cash
and deferred elements. Deferred elements are normally
invested in a combination of Ninety One shares and
funds, which cliff vest after three years and are subject
to malus and clawback provisions consistent with those
applicable to the Executive Directors. Remuneration
levels at Ninety One reflect both our pursuit of excellence
and commitment to organic business building. In setting
remuneration levels, truly exceptional contributions are
rewarded and individual variable remuneration awards
are not capped for the wider workforce. Aggregate
variable remuneration is however subject to affordability
considerations. In exceptional cases, retention related
share awards may also be granted to employees other
than the Executive Directors.
Performance measures
The performance measures are set out in the Annual
Report on Remuneration. These have been chosen
to align with Ninety One’s key financial and strategic
priorities. Targets will be set taking into account
both internal and external factors which may include
internal benchmarks, and economic and market
conditions. The committee expects to measure
performance against the financial and non-financial
measures set out below. The committee shall retain
discretion to select the most appropriate measures at
the start of a performance period, to ensure these are
aligned with Ninety One’s short term and long term
objectives.
Financial/quantitative measures
Real growth in Adjusted EPS
Adjusted EPS (as defined on page 142) is the primary
measure of Ninety One’s financial performance.
Our long term objective is to grow adjusted earnings
consistently, recognising the potential significant impact
of market volatility on financial results.
Net flows
The achievement of net flows is a key driver of value.
Our long term objective is to grow and diversify our asset
and client base by consistently generating positive net
flows. The torque ratio will be the primary metric to
monitor success.
Investment performance
As an active investment manager, investment
outperformance is critical to delivering value to
our clients. Our objective is to deliver investment
outperformance in the long run. As such, performance
is measured over multiple time periods, with higher
weightings for longer time periods.
Non-financial/qualitative measures
These would typically include the following:
ɽ Key employee retention and succession planning –
retention and development of senior leadership team;
ɽ client relationships and reputation – positive client
service outcomes;
ɽ commitment to sustainability – progress against
objectives agreed by the Board under Ninety One’s
Invest / Engage / Inhabit sustainability framework;
and
ɽ strategic progress – progress relative to strategic
initiatives specifically identified from time to time by
the Board. This could include growth initiatives in
respect of new products, strategies or geographies.
Ongoing regulatory compliance
In the event that regulatory requirements change, the
committee has discretion to make such changes as are
necessary to ensure continued compliance, even if a
revised policy has not been tabled for approval by
shareholders. Any such changes would be included
in the next Directors’ Remuneration Report.
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Report on Directors’ Remuneration – Directors’ Remuneration Policy
Exercise of discretion
The committee may exercise discretion under the terms of
the EIP, in addition to the discretions referred to elsewhere
in the Policy, in a number of key areas as follows:
ɽ The committee has an overriding discretion to
consider performance holistically and adjust formulaic
outcomes to ensure that final remuneration awards are
aligned with the sustainable performance of Ninety One
and our purpose to deliver value over the long term.
ɽ The committee also has discretion to adjust
performance conditions if anything happens which
causes it reasonably to consider that the amended
condition would be a fairer measure of performance.
ɽ The committee may adjust the timing of vesting,
for example it may delay vesting during a disciplinary
review or accelerate vesting in exceptional
circumstances.
ɽ The committee has standard discretions relating to
share awards, including discretion to adjust awards
on a variation in share capital or settle awards in cash
in exceptional circumstances.
Prior arrangements
The committee reserves the right to honour any award
commitments made to Executive Directors prior to
the approval of the Policy (including exercising any
discretions available to it in connection with such
commitments), notwithstanding that these are not in
line with the Policy. This includes awards granted in
relation to periods prior to the listing of Ninety One
or prior to their appointment to the Board).
Malus and clawback
Malus will apply to unvested awards under the EIP.
Clawback will apply to both vested awards and the cash
element awarded under the EIP. These provisions may be
invoked at the committee’s discretion at any time within
two years of the payment of upfront cash elements and
within five years of the grant of deferred elements.
The circumstances in which the committee may consider
the application of malus and/or clawback are set out in
the EIP rules and can be summarised as follows:
ɽ A material misstatement of financial results.
ɽ An error in the assessment or calculation of award
outcomes, or such calculations being performed
using inaccurate or misleading information.
ɽ Misbehaviour or material error committed.
ɽ Failure to meet appropriate standards of conduct.
ɽ Material risk management failures.
ɽ Exceptional events materially impacting the value
or reputation of Ninety One.
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Remuneration scenario charts
The following charts illustrate the potential range of remuneration outcomes for each of the Executive Directors under
the Policy. The following scenarios are presented:
Fixed remuneration
Variable remuneration
Below threshold
Nil
Threshold
Target
Stretch
Total fixed
remuneration for
the financial year,
consisting of base
salary plus benefits
Value of single incentive awarded if threshold performance
is achieved, which is 25% of the maximum opportunity
Value of single incentive awarded on-target performance
is achieved, which is 50% of the maximum opportunity
Value of single incentive awarded stretch performance
is achieved, which is 100% of the maximum opportunity
Deferral of variable
remuneration
Up to 50% of any
single incentive will
be paid in cash,
with the remainder
deferred into
Ninety One shares.
These scenarios
assume a 50%
deferral rate.
Chief executive officer
Below threshold
100% £666,000
Threshold
33.3%
33.3%
33.3%
£1,998,000
Target
20%
40%
40%
£3,330,000
Stretch
11.1%
£
0
1m
2m
44.4%
3m
44.4%
£5,994,000
4m
5m
6m
Fixed
Variable – cash element
Variable – deferred element
Finance director
Below threshold
100% £533,000
Threshold
33.3% 33.3% 33.3%
£1,599,000
Target
20%
40%
40%
£2,665,000
Stretch
11.1%
44.4%
44.4%
£4,797,000
£
0
1m
2m
3m
4m
5m
6m
Fixed
Variable – cash element
Variable – deferred element
These scenarios do not assume any share price growth between the dates of award and vesting. A 50% increase
in share price between these dates would increase the value of the deferred variable remuneration in the stretch
scenarios, such that total remuneration would be £7.3 million for the chief executive officer and £5.9 million for
the finance director.
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Report on Directors’ Remuneration – Directors’ Remuneration Policy
Approach to recruitment
remuneration
Remuneration for new Executive Directors will be
consistent with the Policy, including maximum variable
remuneration opportunities. In setting fixed remuneration
levels, the committee will consider the size and scope of
the role, the skills and experience of a candidate, and
their existing levels of fixed remuneration.
Where applicable, awards may be granted to replace
awards or amounts forfeited from a previous employer. In
such cases, the committee retains the discretion to grant
awards on a comparable basis to the forfeited award(s)
taking into account the time horizons and performance
conditions that applied. For internal candidates, unvested
deferred awards granted in respect of the prior role
would continue to vest as per the original terms. These
may be adjusted at the discretion of the committee.
Although the intention would be to offer any new
Executive Director benefits as set out in the Policy table
on page 87, the committee reserves the discretion to
offer a new Executive Director additional benefits such
as to cover relocation expenses in order to facilitate
their appointment.
To facilitate any buyout awards outlined above, the
committee may grant awards to a new Executive Director,
relying on the exemption in the applicable Listing Rules,
which allows for the grant of awards to facilitate, in
unusual circumstances, the recruitment of an Executive
Director without seeking prior shareholder approval
(including under any other appropriate Ninety One
incentive plan).
The fees payable to a new chairman or Non-Executive
Director would be in accordance with the Policy.
Service contracts and letters
of appointment
The Executive Directors are the only Directors with service
contracts, which set out their terms and conditions of
employment. These contracts are terminable by either
party on six months’ written notice and do not have an
expiry date. Service contracts include a provision for a
termination payment in lieu of notice (see further details
on the following page). The terms set out in the service
contracts for the current Executive Directors do not
provide for any payments that are not in line with the
Policy. Service contracts for new Executive Directors
will be consistent with the Policy, including notice periods
and payments in lieu of notice. The service contracts are
available for inspection on request from Ninety One’s
offices.
Non-Executive Directors have not entered into service
contracts with Ninety One. They are appointed under a
letter of appointment under which their appointment is
terminable by either party on three months’ written
notice except where the Director is not reappointed by
shareholders, in which case termination is with immediate
effect. There are no obligations within the Non-Executive
Directors’ letters of appointment that could give rise to
remuneration payments on termination or payments for
loss of office.
The dates of appointment and notice period for each
Director are set out below.
Executive Directors
Hendrik du Toit
Kim McFarland
Non-Executive Directors
Gareth Penny
Colin Keogh
Date of appointment –
Ninety One plc
Date of appointment –
Ninety One Ltd
Notice period
4 October 2019
18 October 2019
six months
4 October 2019
18 October 2019
six months
19 November 2019
19 November 2019
three months
19 November 2019
19 November 2019
three months
Idoya Basterrechea Aranda
19 November 2019
19 November 2019
three months
Victoria Cochrane
Busisiwe Mabuza
Fani Titi
19 November 2019
19 November 2019
three months
19 November 2019
19 November 2019
three months
19 November 2019
19 November 2019
three months
Hendrik du Toit’s employment with Ninety One commenced on 1 February 1991, while Kim McFarland’s employment commenced on 1 December 1993.
On 1 October 2018, both Hendrik and Kim transferred to Investec plc, assuming roles as executive directors. In advance of the demerger of Ninety One
from Investec, both Hendrik and Kim entered into service contracts with Ninety One, which took effect from 1 March 2020 and remuneration for
qualifying services commenced from that date.
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Policy on payments for loss of office
In the event of the termination of an Executive Director’s employment, any payments will be determined in accordance
with the Policy, and will be in line with the relevant Executive Director’s service contract and the rules of any relevant
incentive plans. The table below sets out a summary of Ninety One’s policy in relation to payments for loss of office.
Element
Policy
Notice period
EIP awards
Deferred EIP
awards
All employee
plans
Other
Ninety One will have the ability to make a payment in lieu of notice equal to base salary only for any unexpired
portion of the notice period. Ninety One may also reserve the right to place the Executive Directors on garden
leave during the notice period. However, neither notice nor a payment in lieu of notice will be given in the
event of gross misconduct or gross negligence.
Good leavers1 who depart during a performance period, or after a performance period but prior to the grant
of any awards, may receive awards at the committee’s discretion, taking into account relevant factors
including but not limited to the Executive Director’s length of service and the circumstances of departure.
In granting any awards in respect of uncompleted performance periods, the committee will consider the
Executive Director’s performance in the financial year of departure in addition to their contribution towards
long term goals on such reasonable basis as it decides taking into account performance to departure and,
if it so decides, expected future performance, and any awards granted would be pro-rated. In the financial
year of departure, any awards granted shall not exceed the maximum variable remuneration opportunity
under the Policy. Those awards would normally be deferred per the normal vesting schedule, although the
committee retains discretion to accelerate the vesting schedule in exceptional circumstances. Any such
award would be subject to the normal malus and clawback provisions.
A good leaver holding awards would normally be entitled to retain their deferred awards, subject to the
original terms (including deferral and holding periods, and malus and clawback). The committee retains
the discretion to accelerate the vesting of unvested deferred EIP awards in exceptional circumstances.
Unvested deferred awards for bad leavers will lapse in full.
The committee will have the discretion to determine the appropriate vesting treatment, including potential
acceleration which would be granted only in exceptional circumstances, in respect of unvested deferred EIP
awards for good leavers, taking account relevant factors including but not limited to the Executive Director’s
length of service. All awards continue to be subject to their original terms, including malus, clawback and
holding periods.
Leaver treatment will be determined in accordance with HMRC-approved provisions.
The committee may make other limited payments in connection with a Director’s cessation of office or
employment including but not limited to paying any fees for outplacement assistance and/or the Director’s
legal and/or professional advice fees in connection with their cessation of office or employment, where the
payments are made in good faith in discharge of an existing legal obligation (or by way of damages for breach
of such an obligation) or by way of settlement of any claim arising in connection with the cessation of a
Director’s office or employment.
1. Good leavers are individuals who are either not terminated for cause, or who do not leave to join a direct competitor of Ninety One.
Change of control
On a change of control (for example, a takeover by an
acquiring company), awards will vest or participants
may be allowed or required to exchange their awards for
equivalent awards over shares in the acquiring company.
Where awards vest on a change of control, the extent of
vesting will be subject to the committee’s discretion. If a
change of control is due to occur during a performance
period or after a performance period but prior to the
grant of any awards then the committee may measure
performance early on such reasonable basis as it decides
taking into account performance to date and, if it so
decides, expected future performance, and pro-rated
awards will then be granted in respect of each performance
period, conditional on the change of control occurring.
In the case of any performance period where the short
term performance targets have not yet been set, the
short term performance targets of the most recent
financial year for which such targets have been set
will be used for that performance period.
Consideration of shareholder views
The terms of the Policy are in line with the arrangements
described in Ninety One’s Prospectus, which was issued
on 2 March 2020.
In formulating the Policy and determining remuneration
outcomes, the committee has been mindful of the
status of the current Executive Directors as significant
contributors over many years to growing this business.
The committee has also considered corporate governance
requirements and best practice guidelines issued by
institutional shareholder bodies, which would typically
apply for executive directors of listed companies. The
committee has proactively sought input on the Policy
from significant shareholders and their feedback has been
taken into consideration. We also welcome feedback from
all shareholders at any time. The committee’s proposal
incorporates shareholder views and is an appropriate and
effective incentivisation arrangement for Ninety One’s
Executive Directors.
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Report on Directors’ Remuneration – Directors’ Remuneration Policy
Consideration of wider remuneration
arrangements at Ninety One
In formulating the Policy, the committee has been mindful
of the Ninety One remuneration policy which applies to
the wider workforce, although employees have not been
directly consulted in its development. Both of these
policies have been developed to align with our culture
and reflect our pursuit of excellence and commitment
to organic business building. This ensures that all
employees, including the Executive Directors, are
incentivised in a similar way. The Policy contains some
differences to the wider workforce policy, notably that
Executive Director variable remuneration opportunities
are capped and determined in a formulaic manner,
subject to committee discretion. All discretionary variable
remuneration awards, including those for the Executive
Directors, are funded from the same variable
remuneration pool.
Since inception in 1991, Ninety One has been built upon
a foundation of entrepreneurship, and it continues to
operate with this founder-owner mindset. On listing,
Ninety One introduced new employee share schemes
to enable the deferral of variable remuneration into
Ninety One shares. Ninety One also introduced an
HMRC-approved SIP, which allows UK staff to purchase
shares in Ninety One, in a potentially tax advantaged
way. In line with our philosophy to encourage a culture
of employee ownership, an award of shares to the
value of £2,000 was offered on admission to all eligible
employees globally. Through these employee share
schemes and the participation of senior leadership in
the Marathon Trust, people who work for the firm
collectively own more than 21% of Ninety One.
Non-Executive Directors – policy table
The Non-Executive Directors’ fee remuneration is set out in the table below.
Element
Fees
Policy
Non-Executive Directors fees are industry competitive and reflect the skills, experience and time required
to undertake their roles. The fees cover the dual roles that the directors perform in relation to Ninety One plc
and Ninety One Limited. Fees for the chairman are determined by the committee, while fees for other
Non-Executive Directors are determined by the Board. Non-Executive Directors do not participate in the
determination of their own fees. Fees are paid in cash and reviewed annually.
Non-Executive Directors receive a basic annual fee. Fees are also payable for additional responsibilities,
including to the chairman, the Senior Independent Director and for serving as a chairperson or member
of major board sub-committees.
Remuneration for Non-Executive Directors will not exceed £5 million per annum in aggregate or such higher
amount as may be determined by an ordinary resolution of Ninety One.
Benefits and
Other
Non-Executive Directors are entitled to be reimbursed for all reasonable expenses properly incurred in the
performance of their duties and to be provided with cover under Ninety One’s directors’ indemnity insurance.
The Non-Executive Directors are not entitled to receive any other benefits, bonuses or share awards.
Proposed annual fees for the chairman and the Non-Executive Directors are set out on page 102.
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Annual Report
on Remuneration
This section of the Directors’ Remuneration Report sets out the remuneration paid to the Executive Directors and
Non-Executive Directors of Ninety One in respect of the financial year 2020. During the year, the Directors (including the
chief executive officer and finance director) were appointed to the boards of the newly-established holding companies
of the Investec Asset Management business which was renamed Ninety One on listing. The information contained in this
section refers to their remuneration from their relevant dates of appointment to the end of the financial year 2020. The
chief executive officer and finance director have 29 and 26 years of service respectively with Ninety One and Investec.
Sections which are subject to audit are indicated as such.
Single figure of remuneration (audited)
The table below sets out the total remuneration received by the Directors in respect of the financial year 2020.
No information is disclosed for the prior year as Ninety One listed on the LSE and JSE on 16 March 2020.
Executive Directors1
Hendrik du Toit
Kim McFarland
Total
Non-Executive Directors2
Gareth Penny
Colin Keogh
Idoya Basterrechea Aranda
Victoria Cochrane
Busisiwe Mabuza
Fani Titi
Total
Salary/fees
£
54,294
43,410
97,704
64,167
44,000
36,667
34,833
34,955
25,667
240,289
Taxable
benefits
£
950
796
Annual
variable
remuneration
Total
remuneration
Total fixed
remuneration
Total variable
remuneration
£
£
£
£
500,000
555,244
55,244
500,000
400,000
444,206
44,206
400,000
1,746
900,000
999,450
99,450
900,000
—
—
—
—
—
—
—
—
—
—
—
—
—
—
64,167
64,167
44,000
44,000
36,667
34,833
34,955
25,667
36,667
34,833
34,955
25,667
240,289
240,289
—
—
—
—
—
—
—
1. Hendrik du Toit and Kim McFarland entered into new service contracts in respect of their roles within Ninety One, which took effect from 1 March 2020 prior
to the listing on 16 March 2020. The table shows remuneration awarded in respect of their service to Ninety One between 1 March and 31 March 2020.
2. All of the Non-Executive Directors were appointed as Directors of Ninety One plc and Ninety One Limited on 19 November 2019.
Notes to the table (audited)
Fixed remuneration
The Executive Directors’ fixed remuneration levels were reviewed at the time of the Group’s admission.
There will be no change to their fixed remuneration for the financial year 2021.
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Single figure of remuneration (audited) continued
Pension
The Executive Directors are not entitled to any pension benefits.
Benefits
The Executive Directors are entitled to receive private medical insurance, disability insurance and life cover, which are
the benefits generally offered to all Ninety One employees in the UK. These benefits are funded by sacrificing a portion
of their fixed remuneration.
Variable remuneration
For the financial year 2020, the committee decided to make a one-off variable remuneration award, payable in cash,
in recognition of the material time and effort devoted to the Ninety One business in addition to their commitments as
executive directors of Investec. This award further recognised that 2020 was a momentous year for Ninety One,
delivering record earnings and the successful demerger from Investec, rebranding as Ninety One and listing on the
LSE and JSE.
In setting the quanta of the awards, the committee exercised its discretion under the Prospectus, and in particular took
into account Ninety One’s consistent investment performance, and strong earnings growth and strong net inflows,
which delivered the following outcomes for the financial year 2020:
ɽ Nominal growth in Adjusted EPS of 10% relative to the financial year 2019;
ɽ net inflows and a torque ratio of 5.4%, which is well ahead of both the UK and global industry five-year averages; and
ɽ the majority of AUM (on a firm-wide asset weighted basis) outperforming their basic benchmarks over one, three and
five years.
In addition, the committee also recognised the instrumental roles played by the Executive Directors in delivering the following:
ɽ Demerger of Ninety One from Investec;
ɽ rebranding of Ninety One; and
ɽ successful listing of Ninety One.
Hendrik du Toit
Kim McFarland
Annual variable
remuneration
£
500,000
400,000
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Directors’ shareholdings
Directors’ interests in shares and share schemes (audited)
No share scheme interests were granted to Directors between admission and the end of the financial year 2020.
Neither were any exercised, nor did any lapse during this period.
The share scheme interests listed below are conditional share awards granted by Investec to Hendrik du Toit,
Kim McFarland and Fani Titi in their capacity as executive directors of Investec.
All of these awards were granted prior to the demerger on 13 March 2020. The awards will be settled partly in Investec
plc shares (two-thirds) and partly in Ninety One plc shares (one-third), in line with the demerger conversion ratio.
The table below includes only the portion of these awards which will be settled in Ninety One plc shares. For the
Executive Directors, these awards are conditional on continued service with Ninety One.
The Directors and their associates/connected persons own the following ordinary shares and hold the following share
scheme interests in Ninety One plc and Ninety One Limited ordinary shares at 31 March 2020.
Shares owned outright
Share scheme interests4
Total share scheme interests
and shares owned outright3
Hendrik du Toit
Kim McFarland
Fani Titi
Ninety One
plc
172,818
82,095
72,740
Ninety One
Limited
302,370
3,772
—
Forty Two Point Two2
127,752,520
60,017,591
Investec
deferred STI
2019
Ninety One
plc
36,902
14,440
36,902
—
Investec
LTI
2019
Ninety One
plc
139,040
55,637
139,040
Investec
LTI
2020
Ninety One
plc
Ninety One
plc
Ninety One
Limited
139,176
111,383
487,936
302,370
263,555
—
248,682
3,772
—
—
— 127,752,520
60,017,591
Total1
128,080,173 60,323,733
88,244
333,717
250,559 128,752,693 60,323,733
Notes to the table
1. The Directors not listed in this table do not hold any interests in Ninety One shares at 31 March 2020.
2. Forty Two Point Two is a company wholly-owned by the Marathon Trust, both of which are associates/connected
persons of Hendrik du Toit and Kim McFarland. The Marathon Trust is a long term share ownership vehicle which was
established to enable key employees of Ninety One, including Hendrik du Toit and Kim McFarland, to collectively
participate in an indirect equity shareholding in Ninety One. Forty Two Point Two’s acquisition of its shareholding
in Ninety One has been, and future share acquisitions are expected to be, funded by capital provided by the
participating employees to the Marathon Trust and/or third-party debt-funding assumed by Forty Two Point Two.
The Ninety One shares held by Forty Two Point Two are pledged in terms of the third party debt-funding arrangements.
Voting rights in relation to the shares pledged remain with Forty Two Point Two. At 31 March 2020, the Executive
Directors’ Marathon participations equated to an indirect equity shareholding of 1.93% in the case of Hendrik du Toit
and 1.25% for Kim McFarland.
3. Between 31 March and 22 June 2020 (being the last practicable date prior to the finalisation of this report),
50% of the share scheme interests related to the ‘Investec deferred STI – 2019’ vested to each of Hendrik du Toit,
Kim McFarland and Fani Titi. Fani Titi also disposed of 49,279 Ninety One plc shares to settle tax liabilities arising
from the vesting of previous Investec share awards. In addition, Hendrik du Toit and Kim McFarland received awards
under the Investec directors’ remuneration policy of 39,765 and 31,120 Ninety One plc shares respectively, for their
services as executive directors to Investec for Investec’s financial year 2020. There were no other movements in
the share interests of the Directors or their associates/connected persons between 31 March and 22 June 2020.
4. Details of the share scheme interests are as follows:
Share scheme
Details
Investec deferred
STI – 2019
These below awards are not subject to any further performance conditions. These awards vest equally over
a period of two years and are subject to a 12-month retention period after each vesting date.
Vesting date
Tranche 1 – 29 May 2020
Tranche 2 – 29 May 2021
Vesting %
50%
50%
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Directors’ shareholdings continued
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Notes to the table continued
Investec
LTI – 2019
These awards are subject to the following Investec performance conditions.
Investec performance condition
Financial measures
Weighting
Threshold
(0% vesting)
Target
(100% vesting)
Stretch
(150% vesting)1
Growth in net tangible asset value per share
Return on risk-weighted assets
40%
35%
15%
1.4%
30%
1.6%
45%
1.8%
Non-financial measures2
Culture and values
Franchise development
Governance and regulatory and shareholder
relationships
Employee relationship and development
4%
13%
4%
4%
0
0
0
0
4
4
4
4
6
6
6
6
If stretch levels of performance for all measures are achieved, the vesting of the awards will be capped at 135% of target.
1.
2. Non-financial measures are assessed against a seven-point scale, with scores between 0 and 6 awarded.
These awards vest equally over a period of five years and are subject to a 12-month retention period after
each vesting date.
Vesting date
Tranche 1 – 29 May 2022
Tranche 2 – 29 May 2023
Tranche 3 – 29 May 2024
Tranche 4 – 29 May 2025
Tranche 5 – 29 May 2026
Vesting %
20%
20%
20%
20%
20%
Investec
LTI – 2020
These awards are subject to the following Ninety One performance conditions.
Ninety One performance condition
Real growth in Adjusted EPS2
Investment performance3
Net flows4
Weighting
Threshold
(0% vesting)
Target
(100% vesting)
Stretch
(150% vesting)1
67%
16.5%
16.5%
2% p.a.
50%
4% p.a.
62.5%
6% p.a.
75%
1% p.a.
2.5% p.a.
4% p.a.
If stretch levels of performance for all measures are achieved, the vesting of the awards will be capped at 135% of target.
1.
2. Measured as per the definition of Adjusted EPS on page 142. Real growth adjusted for UK CPI.
3. Measured as the proportion of firm-wide AUM outperforming basic benchmarks on an asset weighted basis, weighted over
one (20% weighting), three (30% weighting) and five (50% weighting) years.
4. Measured as the torque ratio.
These awards vest equally over a period of five years and are subject to a 12-month retention period after
each vesting date.
Vesting date
Tranche 1 – 28 May 2023
Tranche 2 – 28 May 2024
Tranche 3 – 28 May 2025
Tranche 4 – 28 May 2026
Tranche 5 – 28 May 2027
Vesting %
20%
20%
20%
20%
20%
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Directors’ interests in fund awards (audited)
At 31 March 2020, Hendrik du Toit had an unvested deferred interest in a fund award granted under Ninety One’s fund
deferral incentive plan. The award represented the deferred component of a variable remuneration award granted by
Ninety One for the financial year 2017. The award had a face value of £930,000 at grant. This award vested on 31 May
2020 and was paid in June 2020. No performance conditions applied to this award.
No other Directors holds any interests in fund awards.
Shareholding guidelines
To ensure the alignment of the financial interests of executives with those of shareholders the Executive Directors are
required to build up and maintain an interest in shares in Ninety One equivalent to 1,000% of fixed remuneration for
the chief executive officer and 800% of fixed remuneration for the finance director. Each of the Executive Directors
currently exceeds this requirement by virtue of their participation in the Marathon Trust.
The chief executive officer will be required to maintain a minimum interest in shares in Ninety One equivalent to 500%
of fixed remuneration for a period of two years after the termination of his employment, while the finance director will
be required to maintain a minimum interest in shares in Ninety One equivalent to 400% of fixed remuneration for a
period of two years after the termination of her employment. Participations in the Marathon Trust will count towards
this requirement.
Payments to past directors (audited)
There were no payments to past directors in the financial year 2020.
Payments for loss of office (audited)
There were no payments to Directors for loss of office in the financial year 2020.
Total shareholder return (“TSR”) performance
The graph below shows Ninety One’s TSR performance from admission to 31 March 2020 relative to the TSR
performance of the FTSE 250 excluding Investment Trusts. This index has been chosen because it is a broad
equity market index, and Ninety One is a constituent of this index.
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Ninety OneFTSE 250 (exc Investment Trusts)Source: Thomson Reuters Datastream, April 20208090110100120TSR performanceTSR index16 March202021 March202026 March 202031 March 2020
Report on Directors’ Remuneration – Annual Report on Remuneration
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Percentage change in chief executive officer’s remuneration
Ninety One demerged from Investec on 13 March 2020 and listed independently on 16 March 2020 and no comparative
information for the chief executive officer’s remuneration is available.
Relative importance of spend on pay
The following graphs illustrate Ninety One’s profit after tax, employee remuneration and dividends declared for 2020
and 2019.
Implementation of the Policy in the financial year 2021
Fixed remuneration
The Executive Directors’ fixed remuneration was set prior to admission and has been effective since 1 March 2020.
No increases to these fixed remuneration levels are proposed for the financial year 2021. The committee will continue
to review fixed remuneration on a regular basis.
Hendrik du Toit
Kim McFarland
Current fixed
remuneration
£
666,000
533,000
Fixed remuneration is inclusive of benefits, which are funded by sacrificing a portion of fixed remuneration.
Variable remuneration
Shareholder approval is being sought, at the AGM on 3 September 2020, for the introduction of a new single incentive
plan, the EIP, which will apply for the financial year 2021 onwards.
As described fully in the Policy, the EIP will reward performance assessed, against financial/quantitative and non-
financial/qualitative measures, over the current year and over the preceding three-year period. Up to 50% of the award
will be payable in cash following the end of the financial year, and at least 50% will be deferred into Ninety One shares for
three years. Following the end of the deferral period, deferred awards will normally be subject to a further two-year
holding period, with 50% released four years after award and 50% released five years after award.
The first awards under the EIP will be made following the end of the financial year 2021.
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050100150200250300Total employee remuneration £m20192020050100150200250300Profit after tax £m20192020050100150200250300Dividends declared £m20192020
Awards in respect of any financial year will be capped at 800% of fixed remuneration (excluding any awards granted in
relation to a change of control event).
The EIP will reward the achievement of financial and non-financial targets assessed over the one-year and trailing
three-year period ending 31 March 2021.
Performance will be measured relative to threshold, target and stretch achievement levels for financial/quantitative and
non-financial/qualitative measures. Award outcomes as a percentage of the maximum award opportunity will be as follows:
ɽ Threshold: 25%
ɽ Target: 50%
ɽ Stretch: 100%
For performance between the above levels, the award outcome will be determined on a straight-line basis.
In determining awards under the EIP, the committee retains discretion to consider performance holistically and adjust
formulaic outcomes where deemed appropriate – for example, where the committee considers that the formulaic
outcomes do not reflect underlying performance or circumstances arise that were unexpected or unforeseen when
performance targets were set.
The performance measures will be as follows for the financial years 2021, 2022 and 2023:
Performance measure
Financial/quantitative measures
Real annual growth in Adjusted EPS1
Investment performance2
Net flows3
Non-financial/qualitative measures
Key employee retention and succession planning
Client relationships and reputation
Commitment to sustainability
Strategic progress
Weighting
Measurement
period
75%
50%
12.5%
12.5%
one and
three years4
25%
one year
1. Measured as per the definition of Adjusted EPS on page 142. Real growth adjusted for UK CPI.
2. Measured as the proportion of firm-wide AUM outperforming basic benchmarks on an asset weighted basis, weighted over one (20% weighting),
three (30% weighting) and five (50% weighting) years.
3. Measured as the torque ratio.
4. 75% of the award will be determined based on performance relative to financial/quantitative measures. This comprises 55% long term performance
(three years) and 20% short term performance (one year).
Financial/quantitative targets
Long-term performance will be measured relative to the following three financial/quantitative targets for the financial
year 2023.
In setting these targets, the committee was guided by the importance of ensuring that performance and remuneration
outcomes are aligned. The committee devoted significant energy to identifying a range of performance and remuneration
outcomes which would ensure that the Executive Directors continue to be incentivised to deliver long-term value for
shareholders, in the context of this challenging environment and market expectations. Market volatility and uncertainty are
expected to persist for the foreseeable future, which may have a significant impact on Ninety One’s future performance.
Notwithstanding the targets set, the committee retains discretion under the Policy to apply its judgement when determining
final remuneration outcomes, to ensure that these are clearly linked to performance achieved and also reflect the
shareholder experience.
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Report on Directors’ Remuneration – Annual Report on Remuneration
Implementation of the Policy in the financial year 2021 continued
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1
Measure
Real annual growth in Adjusted EPS
Investment performance
Net flows
Threshold
-5% p.a.
50%
Target
0% p.a.
62.5%
Stretch
5% p.a.
75%
1% p.a.
2.5% p.a.
4% p.a.
Given the performance periods remaining for these awards, the Adjusted EPS and net flows targets for the short term
performance period ending 31 March 2021, and the long term performance periods ending 31 March 2021 and 2022, are
considered to be commercially sensitive and are therefore not disclosed here. The investment performance targets for
these periods are as per the table above. The committee will report on the relevant targets set and provide a description
of the achievement levels and outcomes against these measures in the relevant Directors’ Remuneration Report.
Non-financial/qualitative targets
The committee has set objectives for the non-financial measures, all of which are fundamental to the long term success
of Ninety One. Where applicable, quantitative targets may be set by the committee in support of these objectives.
The committee will assess performance against these objectives annually and will provide a description of the
achievement levels and outcomes against these measures in the relevant Directors’ Remuneration Report.
Chairman and Non-Executive Director fees
The annual fees for the chairman and Non-Executive Directors were set upon appointment and are as follows:
Chairman fee (inclusive of the Non-Executive Director basic fee)
Senior Independent Director fee (inclusive of the Non-Executive Director basic fee)
Non-executive Director basic fee
Chairs of the Audit and Risk and Human Capital and Remuneration Committee additional fee
Chairs of the Nominations and Directors’ Affairs and Sustainability, Social and Ethics Committee additional fee
Committee member supplementary fee
There is no change to these fee levels for the financial year 2021.
£
150,000
85,000
70,000
25,000
15,000
10,000
Directors’ service contracts
The Executive Directors have entered into rolling service contracts with Ninety One. These contracts are terminable
by either party on six months’ written notice.
Non-Executive Directors have not entered into service contracts with Ninety One. They operate under a letter of
appointment under which their appointment can be terminated by either party on three months’ written notice except
where the Director is not reappointed by shareholders, in which case termination is with immediate effect.
Chief executive officer pay ratio
The table below shows the ratio of the single total figure of remuneration for the chief executive officer relative to
the 25th, 50th and 75th percentile annual remuneration of full-time equivalent UK employees. These total remuneration
percentiles have been calculated based on fixed remuneration at 31 March 2020 and annual variable remuneration
awarded in respect of the financial year 2020. Where an identified employee was part-time or only employed for
part of the year, their annual remuneration figures have been converted to a full-time annual equivalent.
The chief executive officer was appointed on 1 March 2020, one month before the end of the financial year 2020. As a
result, the chief executive officer pay ratio for the financial year 2020 does not reflect a consistent comparison to the
full-time equivalent total remuneration of UK employees. The table below therefore additionally includes a comparison to
normalised chief executive officer remuneration, assuming on-target performance levels. The committee considers that
this approach provides the most consistent comparison of the chief executive officer’s remuneration relative to that of
UK employees.
Statutory chief executive officer pay ratio
Normalised chief executive officer pay ratio
Financial
year
2020
Option
A
25th
percentile
50th
percentile
75th
percentile
6 : 1
38 : 1
4 : 1
24 : 1
2 : 1
13 : 1
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UK regulations require this disclosure, and provide three options in relation to the methodology used to calculate the ratio,
termed Options A, B and C. Ninety One has chosen to calculate the chief executive officer pay ratio using Option A. This
method was chosen because it is statistically the most accurate and it should provide, as far as possible, a like-for-like
comparison between employee and chief executive officer pay. This method entails calculating the total remuneration
of all UK employees, employed as at the end of the financial year 2020, to identify the total remuneration at the 25th, 50th
and 75th percentiles. The total remuneration value for the employees at the 25th, 50th and 75th percentiles was £87,980,
£139,440 and £253,688 respectively, of which the salary component was £61,200, £90,000 and £91,800 respectively.
This is the first year in which Ninety One is required to report this ratio. Longer-term trends and year-on-year comparisons
will only be possible in future years.
As Ninety One only listed as an independent business in March 2020, no comparable increases can be disclosed. Ninety
One has a Group-wide remuneration policy which applies to all staff globally, including those in the UK. The proposed
Directors’ Remuneration Policy has been formulated using the same principles which underpin the Group-wide
remuneration policy. The committee recognises that the chief executive officer pay ratio will fluctuate from year to
year due to the variety of factors which will influence this ratio, specifically the fact that the Executive Directors will be
measured exclusively on Group-wide performance. The committee therefore does not target a specific pay ratio,
but will consider trends in the movement of the ratio over time.
The Human Capital and Remuneration Committee
The Human Capital and Remuneration Committee’s terms of reference were approved on 13 February 2020 and can be
viewed on our website, www.ninetyone.com.
The committee considers all factors including relevant legal and regulatory requirements which it deems necessary.
This includes the FCA Listing Rules, the UK Corporate Governance Code, the King IV Report on Corporate Governance
for South Africa, 2016, the Listings Requirements issued by the JSE Limited and where relevant FCA Remuneration
Codes covering AIFMD, UCITS, CRD III and MiFID II, as well as all associated guidance.
The committee is also responsible for reviewing all employee pay arrangements to ensure that they are aligned with the
strategy, culture and values of the Group and the health and wellness of employees. It also monitors and reviews the
Group’s compliance with good corporate governance in respect of human capital matters including the application of
the King IV Code and the Companies Act requirements in South Africa. Lastly, the committee reviews the engagement
levels of all employees and ensures that management takes appropriate action to ensure the highest possible levels of
engagement. In fulfilling its responsibilities, the committee will work with other Board committees as appropriate.
The chairman, chief executive officer, finance director, company secretary and human capital representatives attend
meetings by invitation, except when their own remuneration is discussed. No Director is involved in setting his or her own
remuneration. None of the committee members have had any personal financial interest, except as shareholders in the
matters decided.
In addition to the binding resolution for the Policy, this report will be submitted for an advisory shareholder vote at our
AGM on 3 September 2020. On behalf of the committee, I look forward to receiving your support.
Colin Keogh
Chair of the Human Capital and Remuneration Committee
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Annual Financial
Statements
105
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113
124
125
126
127
128
129
164
166
167
168
169
Directors’ Report
Directors’ Responsibility Statement and Certificate
by the company secretary of Ninety One Limited
Independent Auditor’s Report
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Annexure to Consolidated Financial Statements
Ninety One plc Company Statement of Financial Position
Ninety One plc Company Statement of Changes in Equity
Ninety One plc Company Statement of Cash Flows
Notes to the Ninety One plc Company Financial Statements
* The DLC Audit and Risk Committee Report forms part of the annual
financial statements and can be found on pages 73 to 78.
Preparation of annual financial statements
These are the annual financial statements of Ninety One DLC for the
year ended 31 March 2020. They have been prepared by management
under the supervision of the Finance Director, Kim McFarland CA(SA).
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Directors’ Report
The directors present their
report for the financial period
from listing to 31 March 2020.
The Strategic Report, the Governance Report and the
Annual Report on Remuneration, which form part of this
Integrated Annual Report include information that would
otherwise need to be included in this Directors’ Report.
Relevant items are referred to below and incorporated by
reference into this report. Readers are also referred to the
forward looking statements on page 176 of this Integrated
Annual Report.
Principal activities and performance
Ninety One is an active investment manager, serving its
clients from around the world. Detail of our business
model and organisational structure is explained in the
Strategic Report on pages 8 to 9. Ninety One has 21
offices worldwide, with head offices in London and
Cape Town and branches in Italy, Germany and Sweden.
Detail of our subsidiaries can be found in note 26 to the
Consolidated Financial Statements.
Commentary on Ninety One’s development and
performance in the financial year ended 31 March
2020, and likely future developments, is included in
the Strategic Report on pages 4 to 57.
Our approach to stakeholder engagement, including our
section 172 statement, can be found on pages 24 to 25.
Disclosures relating to the employment of disabled
persons, the number of women in senior management
roles, employee engagement and policies are included
in the Our People and Culture section of the Strategic
Report on pages 28 to 31.
Disclosures relating to Ninety One’s approach to the
environment and sustainability, including disclosures on
Scope 1, Scope 2 and Scope 3 emissions for financial
year 2020, can be found in the Sustainability section
of the Strategic Report on pages 32 to 40.
Details of Ninety One’s policy on risk management in
relation to the use of financial instruments and its
exposure to financial, market, and liquidity risks are
included in note 21 to the Consolidated Financial
Statements.
Information concerning directors’ contractual
arrangements and entitlements under share based
remuneration arrangements is given in the Director’s
Remuneration Policy and Annual Report on Remuneration
on pages 86 to 103.
Requirements of Listing Rule 9.8.4 of the UK Listing Rules
Information to be included in the annual report and financial statements under Listing Rule 9.8.4, where
applicable, can be found as follows:
Listing Rule
Description
9.8.4(1) R
Interest capitalised
9.8.4(2) R
Publication of unaudited financial information
9.8.4(4) R
Details of long-term incentive schemes required by Listing Rule 9.4.3
9.8.4(5) R Waiver of emoluments by a director
9.8.4(6) R Waiver of future emoluments by a director
9.8.4(7) R
Non pre-emptive issues of equity for cash
9.8.4(8) R
Non pre-emptive issues of equity for cash in relation to major subsidiary
undertakings
9.8.4(9) R
Parent participation in a placing by a listed subsidiary
9.8.4(10) R Contracts of significance involving a director
9.8.4(11) R
Provision of services by a controlling shareholder
9.8.4(12) R
Shareholder waivers of dividends
9.8.4(13) R
Shareholder waivers of future dividends
9.8.4(14) R
Agreements with controlling shareholders
Location
Not applicable
The results announcement on 20 May 2020
was not audited and is available on Ninety
One’s website.
Annual Report on Remuneration
pages 95 to 103
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
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Directors’ Report
Corporate governance
The Corporate Governance Report is found on pages
58 to 103 and it, together with this report of which it
forms part, fulfils the requirements of the corporate
governance statement for the purpose of the Financial
Conduct Authority’s Disclosure and Transparency Rules
Sourcebook (“DTR”).
Market abuse regulations
Ninety One has its own internal dealing rules which apply
to all staff and which encompass the requirements of the
UK Market Abuse Regulations and the South African
Financial Markets Act.
The effectiveness of Ninety One policies will be reviewed
through the annual cycle of activities and Board and
committee meetings.
Directors
The names and details of the current directors, together
with their biographical details are set out on pages 60
to 61.
Directors’ guarantees
There are no guarantees provided by Ninety One plc
or Ninety One Limited for the benefit of the directors.
Directors’ interests
Information about interests in the shares of Ninety One
of those who held the office of director in the period to
31 March 2020 is included in the Directors’ Remuneration
Policy and Annual Report on Remuneration on pages 86
to 103.
During the period covered by this report, no director had
any interest in any transaction which was unusual in its
nature or conditions or was significant to the business
of Ninety One, and which was effected by any entity
of Ninety One in the current financial year or which
remains in any respect outstanding or unperformed.
The UK and South African Companies Acts require
directors to disclose any direct or indirect material
interest they have in contracts, including proposed
contracts, which are of significance to the Group’s
business. Directors are required to make these
disclosures at Board meetings, and all disclosures
made are recorded in the minutes of those meetings.
Conflicts of interest
Statutory duties with respect to directors’ conflicts of
interest exist under the UK and South African Companies
Acts. In accordance with these Acts and the Articles
of Association (“Articles”) of Ninety One plc and the
Memorandum of Incorporation (“MOI”) of Ninety One
Limited, the Board may authorise any matter which would
or might otherwise constitute or give rise to a breach of
the duty of a director to avoid a situation in which he or
she has, or can have, a direct interest that conflicts, or
possibly may conflict, with the interest of the Group. The
Board has adopted a procedure, as set out in the Articles
and MOI, that includes a requirement for directors to
notify the Board of any actual or potential conflict for
consideration, and if considered appropriate, approval.
External directorships
Outside business interests of directors are closely
monitored and we are satisfied that all of the directors
have sufficient time to effectively discharge their duties.
Directors’ dealings
Directors’ dealings in the securities of Ninety One plc and
Ninety One Limited are subject to a policy based on the
DTR and the JSE Listings Requirements. All directors’ and
company secretaries’ dealings require the prior approval
of the Compliance Team and the Chairman.
Dealings in securities
Dealings in securities by staff are subject to Ninety One’s
Personal Account Dealing Policy. The policy is based on
regulatory guidance and industry practice and is updated
to ensure compliance with applicable regulations and
industry best practice. The policy is designed to
discourage speculative trading and highlight potential
conflicts of interest between employees and Ninety
One or any of its clients, shareholders or potential
shareholders. The UKLA’s Disclosure Guidance and
Transparency Rules require Ninety One to disclose
transactions in shares and related securities by all
persons discharging management responsibilities and
their “connected persons”. These include directors and
senior executives of Ninety One. Staff are prohibited from
dealing in all listed Ninety One securities during closed
periods.
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Directors’ indemnity and insurance
Ninety One’s Articles and MOI respectively permit the
provision of indemnities to the directors. Each of the
directors is entitled to rely on, and has the benefit of, the
indemnity against directors’ liability set out in the Articles
and MOI respectively.
In addition, Ninety One maintains directors’ and officers’
liability insurance cover in respect of legal actions
brought against the directors and officers. No amounts
have been paid under this insurance policy.
Related parties
Ninety One has processes and policies in place to govern
the review, approval and disclosure of related party
transactions entered into with directors, management
and staff.
Powers of the Board
The Board may exercise all powers conferred on
it by the Articles and MOI which may only be amended
by special resolution of the shareholders at a general
meeting. Copies of the Articles and MOI are available
on Ninety One’s website www.ninetyone.com.
With effect from 16 March 2020 (the “Admission Date”),
the Board was authorised to allot shares up to certain
limits as detailed in the Prospectus. Such authority will
expire at the conclusion of the annual general meeting
to be held in 2021 or, if earlier, at the close of business
on 30 September 2021.
Share capital
Full details of Ninety One’s share capital can be found
in note 13 to the consolidated financial statements.
Issued share capital
The Ninety One plc shares are denominated in pound
sterling and trade on the London Stock Exchange
(“LSE”) in pound sterling and on the Johannesburg
Stock Exchange (“JSE”) in South African rand. The issued
nominal share capital of Ninety One plc is £92,271.41
comprising: (i) 622,624,622 Ninety One plc ordinary
shares of £0.0001 each; (ii) 300,089,454 Ninety One plc
special converting shares of £0.0001 each; (iii) one UK
DAS share of £0.0001; (iv) one UK DAN share of £0.0001;
(v) one Ninety One plc special voting share of £0.0001;
and (vi) one Ninety One plc special rights share of
£0.0001, all of which were fully paid or credited as
fully paid.
The Ninety One Limited shares are denominated, and
trade on the JSE, in South African rand. The issued share
capital of Ninety One Limited comprises: (i) 300,089,454
Ninety One Limited ordinary shares; (ii) 622,624,622
Ninety One Limited special converting shares; (iii) one
SA DAS share; (iv) one SA DAN share; (v) one Ninety One
Limited special voting share; and (vi) one Ninety One
Limited special rights share, all of which were issued at
no par value. The salient features of the various share
classes are set out in the Prospectus.
In the UK, the demerger from Investec was implemented
by way of a court approved scheme of arrangement
including a reduction of capital. The share premium
(amounting to £732.2 million) arising from the demerger
transactions described in note 13(a) on page 146,
being the premium of shares issued by Ninety One plc
to Investec plc shareholders in exchange for an 80
percent plus one share stake in Ninety One UK Limited,
was subsequently transferred to a distributable reserve
by effecting a reduction of capital, see note 13(c) on
page 147.
Rights and obligations
The rights attaching to the Ninety One plc shares are
uniform in all respects and they form a single class for
all purposes, including with respect to voting and for all
dividends and other distributions declared, made or paid
on the ordinary share capital of Ninety One plc. Subject
to the provisions of the UK Companies Act, any equity
securities issued by Ninety One plc for cash must first
be offered to the holders of Ninety One plc shares in
proportion to their holdings. The UK Companies Act and
the UK Listing Rules allow for disapplication of pre-emption
rights which may be waived by a special resolution of
Ninety One plc, whether generally or specifically, for
a maximum period not exceeding five years.
The rights attaching to the Ninety One Limited shares are
uniform in all respects and they form a single class for all
purposes, including with respect to voting and for all
dividends and other distributions thereafter declared,
made or paid on the ordinary share capital of Ninety One
Limited. Subject to the provisions of the JSE Listings
Requirements, any equity securities issued by Ninety One
Limited for cash must first be offered to the holders of
Ninety One Limited shares in proportion to their holdings.
The JSE Listings Requirements allow for disapplication
of pre-emption rights which may be waived by a special
resolution of Ninety One Limited, whether generally or
specifically, for a fixed period of time.
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In respect of resolutions of each company which is
the issuer of such shares, on a show of hands, every
shareholder who is present in person shall have one
vote and, on a poll, every shareholder present in person
or by proxy shall have one vote per share held.
Under the terms of the DLC Agreements (detailed in the
Prospectus), any joint electorate action will effectively be
voted upon by the holders of both Ninety One plc shares
and Ninety One Limited shares acting together as a single
decision-making body. Furthermore, under the terms
of the DLC Agreements, any class rights action would
require the prior approval of the ordinary shareholders in
the other companies voting separately and the approval
of its own ordinary shareholders voting separately. Joint
electorate actions and class rights actions are together
expected to cover the majority of the resolutions to be
voted upon by the shareholders.
The shares do not carry any rights to participate in a
distribution (including on a winding-up) other than those
that exist under the UK and South African Companies
Acts. The Ninety One plc shares will rank pari passu in
all respects and the Ninety One Limited shares will
rank pari passu in all respects.
Restrictions on transfer
The shares are freely transferable and there are no
restrictions on transfer. The Ninety One plc shares will
have full transferability between the LSE and the JSE
as well as the UK share register and South African branch
share register.
Authority to issue shares
The directors require authority from shareholders in
relation to the issue of shares. Whenever shares that
constitute equity securities are issued, these must be
offered to existing shareholders pro-rata to their holdings
unless the directors have been given authority by
shareholders to issue shares without offering them first
to existing shareholders. Ninety One will seek authority
from its shareholders on an annual basis to issue shares
up to a maximum amount, of which a defined number
may be issued without pre-emption. Disapplication of
statutory pre-emption procedures is also sought for
rights issues. Relevant resolutions to authorise share
capital issuances will be put to shareholders at the annual
general meeting (“AGM”) on 3 September 2020.
Authority to purchase own shares
The Board requires authority from shareholders in
relation to the purchase of Ninety One’s own shares.
Ninety One will seek authority by special resolution on
an annual basis for the buyback of its own shares in
accordance with applicable law, regulation and other
related guidance. A special resolution will be put to
shareholders at the AGM on 3 September 2020. Full
details of Ninety One’s purchases of own shares are
set out in note 13(b).
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Beneficial owners of shares with “information rights”
Beneficial owners of shares who have been nominated
by the registered holder of those shares to receive
information rights under section 146 of the UK Companies
Act are required to direct all communications to the
registered holder of their shares rather than to the
company’s UK registrar, Computershare Investor
Services PLC, or to Ninety One directly.
Shares held in Ninety One employee benefit trusts
There are three employee benefit trusts which have been
established to facilitate the acquisition of shares in Ninety
One plc or Ninety One Limited under employee share plans
for the benefit of employees of the Ninety One Group.
The Ninety One South Africa Employee Benefit Trust (the
“SA EBT”) holds ordinary shares in Ninety One Limited for
the benefit of employees based in Africa, while the Ninety
One Guernsey Employee Benefit Trust (the “GSY EBT”)
holds ordinary shares in Ninety One plc for the benefit
of employees based outside of Africa. In addition, Ninety
One has established an HMRC-approved Share Incentive
Plan (“SIP”) for the benefit of employees in the UK. The
SIP shares are held in trust (“SIP Trust”).
Terra Nova Trustees (Pty) Ltd, Zedra Trust Company
(Guernsey) Limited and Yorkshire Building Society are
the respective trustees for the SA EBT, GSY EBT and SIP
Trust (the “Trustees”). Where the Trustees have allocated
shares in respect of specific awards granted under
Ninety One’s share plans, the holders of such awards
may recommend to the Trustees as to how voting rights
relating to such shares should be exercised. In respect
of shares for which no participant recommendation is
made, it is recommended that the Trustees vote in favour
of the relevant resolutions. As at 31 March 2020 the SA
EBT held 0.6% of the issued share capital of Ninety One
Limited, the GSY EBT held 0.6% of the issued share
capital of Ninety One plc, and the SIP Trust held 0.1%
of the issued share capital of Ninety One plc.
Dividends
The results of Ninety One are set out in detail on pages
42 to 49. As indicated in the Prospectus, the directors will
not be recommending a final dividend for the financial
period ended 31 March 2020. The first dividends to be
paid by Ninety One are expected to be interim dividends
in respect of the six months ending 30 September 2020.
Shareholder analysis
Major shareholders
Ninety One Limited
Based on the Ninety One Limited share register as at
31 March 2020, the directors are aware of the following
shareholders directly holding 5% or more of the issued
shares of Ninety One Limited:
Shareholder
Investec Investments
Forty Two Point Two
Number of
shares
80,619,508
60,017,591
Public Investment Corporation
21,741,527
Allan Gray
17,048,933
% of
shares
26.87
20.00
7.25
5.68
Investec Limited Security
Purchase and Option
Scheme 2002 Trust
Public and non-public shareholding1
Ninety One Limited
Public
Non-public
Investec Investments2
Number of
Ninety One
Limited shares
144,405,227
155,684,227
80,619,508
% of
shares
48.11
51.89
26.87
Forty Two Point Two
60,017,591
20.00
Investec employee share
scheme3
Ninety One employee share
scheme
Directors4 and any associates5
12,899,378
4.30
1,821,386
326,364
0.61
0.11
Total
300,089,454
100.00
15,054,751
5.02
Ninety One plc
Between 31 March 2020 and 29 May 2020, Coronation
Fund Managers increased their shareholding in Ninety
One Limited to 8.84%.
Ninety One plc
Based on the Ninety One plc share register as at 31 March
2020, the directors are aware of the following shareholders
directly holding 3% or more of the issued shares of
Ninety One plc:
Shareholder
Investec Investments
Forty Two Point Two
Allan Gray
Public Investment
Corporation
Prudential Portfolio
Managers
Number of
shares
150,059,010
127,752,520
48,063,940
27,029,641
25,002,861
% of
shares
24.10
20.52
7.72
4.34
4.02
Between 31 March 2020 and 29 May 2020, Coronation
Fund Managers increased their shareholding in Ninety
One plc to 3.35%.
Public
Non-public
Investec Investments2
Number of
Ninety One plc
shares
325,577,819
297,046,803
150,059,010
% of
shares
52.29
47.71
24.10
Forty Two Point Two
127,752,520
20.52
Investec employee share scheme3
14,312,867
2.30
Ninety One employee share
scheme
Directors4 and any associates5
Total
4,560,663
361,743
0.73
0.06
622,624,622 100.00
1. As required by JSE Listings Requirements. Analysis at 31 March 2020.
2. At 31 March 2020, Investec Investments held 10% or more of both
Ninety One plc and Ninety One Limited and as such is regarded
as a non-public shareholder under the JSE Listing Requirements.
3. Certain directors and employees of Ninety One are beneficiaries
of these schemes and as such they are regarded as a non-public
shareholder under the JSE Listing Requirements.
4. Including any directors of major subsidiaries.
5. Excluding Forty Two Point Two, which is listed separately.
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Disclosure of information to auditor
Having made the requisite enquiries, the directors in
office on the date of this report and financial statements
have each confirmed that:
ɽ So far as they are aware, there is no relevant audit
information of which Ninety One’s auditors are
unaware; and
ɽ each director has taken all the steps that they
ought to have taken as a director in order to make
themselves aware of any relevant audit information
and to establish that Ninety One’s auditors are aware
of that information.
Annual general meeting
All shareholders are invited to attend the AGM on
3 September 2020 and will have the opportunity
to put questions to the Board.
Details of all resolutions to be proposed to Ninety One’s
shareholders will be set out in the notice of AGM, which
will be published ahead of the meeting.
By order of the Board.
Paula Watts
Company Secretary Ninety One plc
Ninety One Africa Proprietary Limited
Company Secretary Ninety One Limited
Directors’ Report
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Events after balance sheet date
Details of those important events affecting Ninety One
which have occurred since the end of the reporting
period are set out in note 25 to the consolidated financial
statements.
Political donations
Ninety One does not make political donations.
Going concern, longer-term
prospects and viability statement
As described in the Viability Statement on pages 48 to 49,
the directors have assessed the viability of Ninety One
over a period that exceeds the 12 months required by the
going concern provision. The Board has also performed
an assessment of the principal and emerging risks facing
Ninety One. The details of this assessment can be found
in the Risk Management section of the Strategic Report
on pages 50 to 57.
The Board has concluded that it remained appropriate
to adopt the going concern basis of accounting in preparing
the consolidated financial statements as it believes
Ninety One will continue to be in business, with neither
the intention nor the necessity of liquidation, ceasing of
trading or seeking of protection from creditors pursuant to
laws or regulations for a period of at least 12 months from
the date of approval of Ninety One’s financial statements.
Appointment of auditor
KPMG LLP and KPMG Inc. (together “KPMG”) have
expressed their willingness to accept appointment as
auditors of Ninety One plc and Ninety One Limited
respectively and resolutions to appoint KPMG will be
proposed at the AGM to be held on 3 September 2020.
The appointment of KPMG has the support of the DLC
Audit and Risk Committee, which will be responsible for
determining their audit fee on behalf of the directors.
However, to meet UK requirements, the committee will
undertake a tender process during the year ending
31 March 2021.
Note 3(b) to the financial statements and page 78 set out
the auditors’ fees both for audit and non-audit work.
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Directors’ Responsibility
Statement
The directors are responsible for keeping an effective
system of risk management and for maintaining 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 Company and enable them to ensure that its financial
statements comply with the Companies Act 2006 in
the UK and the Companies Act of South Africa. They are
responsible for such internal controls as they determine are
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 comply with that law and
those regulations.
The directors are responsible for the maintenance and
integrity of the corporate and financial information
included on Ninety One’s website. Legislation in the UK
governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Ninety One plc and Ninety One Limited were incorporated
in accordance with applicable laws and regulations and
operated in conformity with, respectively, their Articles
and MOI.
Statement of directors’
responsibilities in respect of the
annual report and the financial
statements
The directors are responsible for the preparation and
fair presentation of the Integrated Annual Report and the
Group and Company financial statements in accordance
with applicable law and regulations.
Company law requires the directors to prepare Group
and Company financial statements for each financial
year. Under these laws they are required to prepare the
Group financial statements in accordance with
International Financial Reporting Standards (“IFRS”) and
the interpretations of the IFRS Interpretations Committee
as adopted by the European Union (“EU”), and with IFRS
as issued by the International Accounting Standards
Board (collectively “IFRS”) since the latter is identical in
all material respects. Under UK law, the directors have
elected to prepare the parent company financial
statements on the same basis.
Under UK 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 their profit or loss for
that period.
In preparing each of the Group and parent company
financial statements, the directors are required to:
ɽ Select suitable accounting policies and then apply
them consistently;
ɽ make judgements and estimates that are
reasonable, relevant, reliable and prudent;
ɽ for the Group financial statements, state whether
they have been prepared in accordance with IFRS
as adopted by the EU;
ɽ assess the Group’s and Company’s ability to
continue as a going concern, disclosing, as
applicable, matters related to going concern; and
ɽ use the going concern basis of accounting unless
they either intend to liquidate the Group or the
Company or to cease operations or have no
realistic alternative but to do so.
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Certificate by the company secretary
of Ninety One Limited
In terms of section 88(2)(e) of the South African
Companies Act, we hereby certify that, to the best
of our knowledge and belief, Ninety One Limited has
lodged with the South African Companies and Intellectual
Property Commission, for the financial year ended
31 March 2020, all such returns and notices as are
required in terms of the Act and that all such returns
and notices are true, correct and up to date.
Ninety One Africa Proprietary Limited
Company Secretary Ninety One Limited
Directors’ Responsibility Statement
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Responsibility statement of the
directors
We confirm that to the best of our knowledge:
ɽ The financial statements, prepared in accordance
with the applicable set of accounting standards,
present fairly and 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
ɽ the Directors’ Report and Strategic Report include a
fair review of the development and performance of
the business and the position of the Company 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 Integrated Annual Report 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.
Approval of the annual
financial statements
The Directors’ Report and the Consolidated Financial
Statements of the Group and the Ninety One plc Parent
Company Accounts, which appear on pages 105 to 110
and 124 to 173 respectively, were approved by the Board
on 3 July 2020.
On behalf of the Board
Hendrik du Toit
Chief Executive Officer
Kim McFarland
Finance Director
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Independent auditor’s report
To the members of Ninety One plc
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1. Our opinion is unmodified
We have audited the financial statements of Ninety One
plc (“the Company”) for the year ended 31 March 2020
which comprise the Consolidated Income Statement, the
Consolidated Statement of Comprehensive Income,
the Consolidated and Company Statement of Financial
Position, the Consolidated and Company Statement
of Changes in Equity, the Consolidated and Company
Statement of Cash Flows and the related notes, including
the accounting policies in note 1.
In our opinion:
ɽ 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 2020 and of the Group’s profit
for the year then ended;
ɽ the Group financial statements have been properly
prepared in accordance with International Financial
Reporting Standards as adopted by the European
Union (IFRSs as adopted by the EU);
ɽ the parent Company financial statements have been
properly prepared in accordance with IFRSs as
adopted by the EU and as applied in accordance
with the provisions of the Companies Act 2006; and
ɽ the financial statements have been prepared in
accordance with the requirements of the Companies
Act 2006 and, as regards the Group financial
statements, Article 4 of the IAS Regulation.
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 & Risk Committee.
Ninety One plc was set up as part of the demerger from
Investec plc and therefore this is KPMG’s first year as
auditors of the Company.
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
£9.8m
5% of Group profit before tax
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100% of Group profit before tax
Key audit matters
Event driven
New Group risk: Consolidation
Recurring risks
New Group risk: Revenue recognition
New Parent Company risk: Valuation
of investment in subsidiary
undertakings
Other matter
The Ninety One Business implemented a dual-listed
company (“DLC”) arrangement comprising Ninety One
plc and Ninety One Limited effective 16 March 2020.
The 31 March 2020 consolidated financial statements
is the first set of consolidated financial statements of
the Group. The basis of preparation explains how the
comparative information, on which no previous audit
opinion was issued, is presented as if the demerger
transactions had occurred as at 1 April 2018. The
comparative information has been derived from the
underlying financial information previously included in
the audited financial statements of the entities forming
the Ninety One Business, adjusted for the demerger
equity and reserve transactions which are now audited.
2. Key audit matters: including 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.
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Independent auditor’s report
Group risk:
Consolidation
of Ninety One plc
Refer to page 73 (Audit
and Risk Committee
Report), page 129
(accounting policy)
and page 146 (financial
disclosures).
The risk
Accounting treatment
Ninety One plc and Ninety One
Limited, which together are referred
to as the Ninety One Business exist
as a dual listed company (“DLC”)
with no single overall parent
company.
Ninety One plc and Ninety One
Limited have entered into various
agreements which seek to ensure
that shareholders in each company
receive equal rights and obligations
over the combined Ninety One
Business.
Accordingly, in preparing the
consolidated financial statements
of Ninety One plc, judgement is
required when assessing if the
provisions and clauses in the
agreements meet the consolidation
principles set out in accounting
standards.
There is a risk that the criteria
required to be met to consolidate
an entity as set out in accounting
standards have not been applied
correctly. Due to the complexity of
the structure and the work effort
required by the audit team, the
consolidation of Ninety One plc was
determined to be a key audit matter.
Our response
Our procedures included:
ɽ Test of details: Inspection of the following
agreements to determine whether
consolidation requirements were met:
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The demerger agreements;
the Ninety One Sharing Agreements; and
the Ninety One Voting Agreement.
ɽ Accounting analysis: Critically assessed the
directors’ key judgements in their technical
accounting paper against our understanding
of the agreements and relevant accounting
standards.
ɽ Test of details: We challenged the directors
and their legal expert on the interpretation and
application of the various agreements referred
to above that supported the directors’
judgements.
ɽ Assessing transparency: We considered
the adequacy of disclosures to support the
preparation of the consolidated financial
statements in accordance with accounting
standards.
Our findings
ɽ We found that the group’s judgement of the
consolidation of Ninety One plc was balanced
with proportionate disclosures of the group
structure and related assumptions.
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Group risk:
Revenue recognition
Refer to page 73 (Audit
and Risk Committee
Report), page 129
(accounting policy)
and page 138 (financial
disclosures).
The risk
Data capture and
calculation error
Revenue is the most significant
balance in the Consolidated Income
Statement. Revenue largely
comprises the recurring
management fee income which
results from the business activities
of the Group. The two key
components to management fee
calculations are fee rates and
assets under management.
The following are identified as the
key risks for recurring fee income:
ɽ Risk in relation to fee rates:
There is a risk that fee rates have
not been entered into the fee
calculation and billing systems
when new clients are on
boarded or agreements are
amended.
Our response
Our procedures included:
Procedures in relation to fee rates:
ɽ Control design and operation: We tested
the design and operating effectiveness of
controls over the integrity of system data for
fee rates and over new and amended fee
agreements.
ɽ Test of details: We agreed a selection of fee
rates used in the system calculation to the
original investment management agreements
(“IMAs”), fee letters or fund prospectuses
outlining the latest effective fee rates.
Procedures in relation to assets under
management:
ɽ Control design and operation: For
institutional recurring management fees, we
tested the design and operating effectiveness
of controls over the production of AUM
valuations used in calculating recurring
management fees.
ɽ Risk in relation to assets
ɽ for retail recurring management fees,
under management (“AUM”):
There is a risk that AUM data
from the third- party service
providers and other in- house
systems is not complete and/or
accurate.
ɽ Risk in relation to calculation
of management fee income:
There is a risk that management
fee income is incorrectly
calculated.
we inspected the internal controls reports
prepared by the outsourced service
organisations (in particular State Street)
to understand if the key controls over the
production of AUM valuations used in
calculated recurring management fees
were designed and operating effectively.
General procedures
ɽ Test of details: We independently
recalculated a sample of recurring fee income
and agreed the recalculated fees to the
management fee recognised.
ɽ Assessing transparency: We considered the
adequacy of the disclosures made in respect
of revenue against the relevant accounting
standards.
Our findings
ɽ We found no errors in the Group’s calculation
of management fee income and related
disclosures to be balanced.
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Independent auditor’s report
Parent company risk:
recoverability of parent
company’s investment
in subsidiaries:
(£915.3 million)
Refer to page 73 (Audit
and Risk Committee
Report), page 129
(accounting policy)
and page 169 (financial
disclosures).
The risk
Low risk, high value
The carrying amount of the parent
company’s investments in
subsidiaries represents 99.5% of
the 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.
Our response
Our procedures included:
ɽ Test of details: We compared the carrying
amount of the investment balances to audited
net assets of the respective subsidiary to
identify whether their net assets, being an
approximation of their minimum recoverable
amount, were in excess of their carrying
amount and inspected that the subsidiaries
had historically been profit making.
Our findings
ɽ We found the parent company’s estimated
recoverable amount to be balanced.
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 £9.8 million, determined with reference to
a benchmark of Group profit before tax, of which it
represents 5%. Materiality for the parent Company
financial statements as a whole was set at £0.92 million
for Ninety One plc, determined with reference to a
benchmark of Company total assets, of which it
represents 0.1%.
We agreed to report to the Group Audit and Risk
Committee any corrected or uncorrected identified
misstatements exceeding £0.49 million, in addition to
other identified misstatements that warranted reporting
on qualitative grounds.
In addition, we applied materiality of £38 million to
the classification of unit-linked assets and liabilities in
the consolidated statement of financial position and
related notes, determined with reference to a benchmark
of total assets, of which it represents 0.5%. This
materiality was applied solely for our work on matters
for which a misstatement is likely only to lead to a
reclassification between line items within assets and
liabilities, in accordance with FRC Practice Note 20
The Audit of Insurers in the United Kingdom.
We agreed to report to the Audit and Risk Committee any
corrected or uncorrected classification misstatements
in unit-linked assets and liabilities exceeding £1.9 million.
All audit procedures are completed by the UK and South
African component teams. Of the Group’s two reporting
components, we subjected both to audits for Group
reporting purposes. These audits covered 100% of
Group net revenue; 100% of Group profit before tax;
100% of total Group assets; and 100% of total Group
expenses. All audit procedures are completed by the
Group audit team in the UK and the South African
component team.
Group profit before tax
£198.5m
Group materiality
£9.8m
£9.8m
Whole financial
statements materiality
£7.8m
Range of materiality
at 2 components
(£5.9m-£7.8m)
£0.49m
Misstatements reported
to the audit committee
Profit before tax
Group materiality
Group net revenue
Group profit before tax
100%
100%
Group total assets
Group total expenses
100%
100%
Full scope for group audit purposes 2020
Specified risk-focused audit procedures 2020
Residual components
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4. We have nothing to report
on going concern
The Directors have prepared the financial statements on
the going concern basis as they do not intend to liquidate
the Company or the Group or to cease their operations,
and as they have concluded that the Company’s and the
Group’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”).
Our responsibility is to conclude on the appropriateness
of the Directors’ conclusions and, had there been a
material uncertainty related to going concern, to make
reference to that in this audit report. 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 absence of reference to
a material uncertainty in this auditor’s report is not a
guarantee that the Group and the Company will
continue in operation.
In our evaluation of the Directors’ conclusions, we
considered the inherent risks to the Group’s and
Company’s business model, including the impact of
Brexit, and analysed how those risks might affect the
Group’s and Company’s financial resources or ability
to continue operations over the going concern period.
We evaluated those risks and concluded that they were
not significant enough to require us to perform additional
procedures.
Based on this work, we are required to report to you if:
ɽ We have anything 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
Company’s use of that basis for a period of at least
twelve months from the date of approval of the
financial statements; or
ɽ the related statement under the Listing Rules set out
on page 105 is materially inconsistent with our audit
knowledge.
We have nothing to report in these respects, and we did
not identify going concern as a key audit matter.
5. 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:
ɽ We have not identified material misstatements in the
strategic report and the directors’ report;
ɽ in our opinion the information given in those reports
for the financial year is consistent with the financial
statements; and
ɽ in our opinion those reports have been prepared
in accordance with the Companies Act 2006.
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 principal risks and longer-term viability
Based on the knowledge we acquired during our financial
statements audit, we have nothing material to add or draw
attention to in relation to:
ɽ The directors’ confirmation within the statement of
viability on pages 48 to 49 that they have carried out
a robust assessment of the principal risks facing
the Group, including those that would threaten
its business model, future performance, solvency
and liquidity;
ɽ the Principal Risks disclosures describing these risks
and explaining how they are being managed and
mitigated; and
ɽ 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.
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Independent auditor’s report
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Under the Listing Rules we are required to review the
statement of viability. We have nothing to report in
this respect.
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 Company’s longer-term
viability.
Corporate governance disclosures
We are required to report to you if:
ɽ We have identified material inconsistencies between
the knowledge we acquired during our financial
statements audit and 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; or
ɽ the section of the annual report describing the
work of the Audit and Risk Committee does not
appropriately address matters communicated
by us to the Audit and Risk Committee.
We are required to report to you if the Corporate
Governance Statement does not properly disclose
a departure from the provisions of the UK Corporate
Governance Code specified by the Listing Rules for
our review.
We have nothing to report in these respects.
6. 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:
ɽ 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
ɽ 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
ɽ certain disclosures of directors’ remuneration
specified by law are not made; or
ɽ we have not received all the information and
explanations we require for our audit.
We have nothing to report in these respects.
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7. Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page
111, 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.
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 other
irregularities (see below), 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, other irregularities
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.
Irregularities – ability to detect
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, 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. 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, pensions
legislation and 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.
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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 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. Through
these procedures we became aware of actual or
suspected non-compliance and considered the effect as
part of our procedures on the related financial statement
items. The identified actual or suspected non-compliance
was not sufficiently significant to our audit to result in our
response being identified as a key audit matter.
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 (irregularities) 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 irregularities, as these may involve collusion, forgery,
intentional omissions, misrepresentations, or the override
of internal controls. We are not responsible for preventing
non-compliance and cannot be expected to detect
non-compliance with all laws and regulations.
8. 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
London
United Kingdom
E14 5GL
3 July 2020
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Independent auditor’s report
To the shareholders of Ninety One Limited
Report on the audit of the
consolidated financial statements
Opinion
We have audited the consolidated financial statements
of Ninety One Limited (the “group”), set out on pages 124
to 165 which comprise the consolidated statement of
financial position at 31 March 2020, and the consolidated
income statement, consolidated statement of
comprehensive income, the consolidated statement
of changes in equity and the consolidated statement
of cash flows for the year then ended, and notes to the
consolidated financial statements, including a summary
of significant accounting policies, the annexure to the
consolidated financial statements and the specified
remuneration disclosures marked as audited included
in the Annual Report on Remuneration.
In our opinion, the consolidated financial statements
present fairly, in all material respects, the consolidated
financial position of Ninety One Limited at 31 March
2020, and its consolidated financial performance and
consolidated cash flows for the year then ended in
accordance with International Financial Reporting
Standards and the requirements of the Companies
Act of South Africa.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (ISAs). Our responsibilities under
those standards are further described in the Auditor’s
responsibilities for the audit of the consolidated financial
statements section of our report. We are independent of
the group in accordance with the sections 290 and 291 of
the Independent Regulatory Board for Auditors’ Code of
Professional Conduct for Registered Auditors (Revised
January 2018), parts 1 and 3 of the Independent Regulatory
Board for Auditors’ Code of Professional Conduct for
Registered Auditors (Revised November 2018) (together
the IRBA Codes) and other independence requirements
applicable to performing audits of financial statements
in South Africa. We have fulfilled our other ethical
responsibilities, as applicable, in accordance with the IRBA
Codes and in accordance with other ethical requirements
applicable to performing audits in South Africa. The IRBA
Codes are consistent with the corresponding sections of
the International Ethics Standards Board for Accountants’
Code of Ethics for Professional Accountants and the
International Ethics Standards Board for Accountants’
International Code of Ethics for Professional Accountants
(including International Independence Standards)
respectively. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide
a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our
professional judgement, were of most significance in
our audit of the consolidated financial statements of
the current period. These matters were addressed in
the context of our audit of the consolidated financial
statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion
on these matters.
Consolidation of Ninety One Limited
Refer to introduction on page 129, significant accounting policies note 1(a); and note 13 to the consolidated financial
statements.
Key audit matter
How the matter was addressed in our audit
Ninety One plc and Ninety One Limited, which together
are referred to as the Ninety One Business exist as a
dual-listed company (“DLC”) with no single overall
parent company.
Ninety One plc and Ninety One Limited have entered into
various agreements which ensure that shareholders in
each company receive equal rights and obligations over
the combined Ninety One Business. The agreements
allow the DLC to operate as a single corporate group
(collectively the “group”).
Accordingly, in preparing the consolidated financial
statements of Ninety One Limited, judgement is required
when assessing if the provisions and clauses in the DLC
agreements meet the consolidation principles set out in
accounting standards.
There is a risk that the criteria required to be met to
consolidate an entity as set out in accounting standards
have not been applied correctly.
Due to the complexity of the structure and the work effort
required by the audit team, the consolidation of Ninety
One Limited was determined to be a key audit matter.
Our procedures included:
ɽ Inspection of the following agreements to determine
whether consolidation requirements were met:
ɽ The demerger agreements;
ɽ the Ninety One Sharing Agreements; and
ɽ the Ninety One Voting Agreement.
ɽ critically assessed the directors’ key judgements in their
technical accounting paper against our understanding
of the agreements and relevant accounting standards.
ɽ we challenged the directors and their legal expert on
the interpretation and application of the various
agreements referred to above that supported the
directors’ judgements.
ɽ we considered the adequacy of disclosures to support
the preparation of the consolidated financial statements
in accordance with accounting standards.
We found that the group’s judgement of the consolidation
of Ninety One Limited was balanced with proportionate
disclosures of the group structure and related assumptions.
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Revenue recognition
Refer to significant accounting policies note 1(e)(ii); and note 2 to the consolidated financial statements.
Key audit matter
How the matter was addressed in our audit
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Revenue is the most significant balance in the
consolidated income statement. Revenue largely
comprises recurring management fee income which
results from the business activities of the Group. The two
key components to management fee calculations are fee
rates and assets under management (“AUM”).
The following are identified as the key risks for recurring
fee income:
ɽ There is a risk that fee rates have not been accurately
entered into the fee calculation and billing systems
when new clients are on boarded or agreements are
amended.
ɽ there is a risk that assets under management data
from the third-party service providers and other
in-house systems is not complete and/or accurate.
ɽ there is a risk that management fee income is
incorrectly calculated.
Due to the work effort required by the audit team, revenue
recognition was determined to be a key audit matter.
Our procedures included:
Procedures in relation to fee rates:
ɽ We tested the design and operating effectiveness of
controls over the integrity of system data for fee rates
and over new and amended fee agreements.
ɽ we agreed a selection of fee rates used in the system
calculation to the original investment management
agreements (“IMAs”), fee letters or fund prospectuses
outlining the latest effective fee rates.
Procedures in relation to assets under management:
ɽ For institutional recurring management fees, we tested
the design and operating effectiveness of controls over
the production of AUM valuations used in calculating
recurring management fees.
ɽ for retail recurring management fees, we inspected the
internal control reports prepared by the outsourced
service organisations to understand if the key controls
over the production of AUM valuations used in
calculated recurring management fees were designed
and operating effectively.
General procedures:
ɽ We independently recalculated 100% of recurring fee
income and agreed the recalculated fees to the
management fees recognised.
ɽ we considered the adequacy of the disclosures made
in respect of revenue against the relevant accounting
standards.
We found no errors in the Group’s calculation of
management fee income and related disclosures
to be balanced.
Other matter
The Ninety One Business implemented a dual-listed
company (“DLC”) arrangement comprising Ninety One
plc and Ninety One Limited effective 16 March 2020. The
31 March 2020 consolidated financial statements is the
first set of consolidated financial statements of the
Group. The basis of preparation explains how the
comparative information, on which no previous audit
opinion was issued, is presented as if the demerger
transactions had occurred as at 1 April 2018. The
comparative information has been derived from the
underlying financial information previously included in the
audited financial statements of the entities forming the
Ninety One Business, adjusted for the demerger equity
and reserve transactions which are now audited.
Other information
The directors are responsible for the other information.
The other information comprises the information included
in the document titled “Ninety One Integrated Annual
Report 2020”, which includes the Directors’ Report, the
DLC Audit and Risk Committee Report and the
Declaration by the Company Secretary as required by
the Companies Act of South Africa, but excludes the
specified remuneration disclosures marked as audited
included in the Annual Report on Remuneration. The
other information does not include the consolidated
financial statements and our auditor’s report thereon.
Our opinion on the consolidated financial statements
does not cover the other information and we do not
express an audit opinion or any form of assurance
conclusion thereon.
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Independent auditor’s report
In connection with our audit of the consolidated
financial statements, our responsibility is to read the
other information and, in doing so, consider whether
the other information is materially inconsistent with the
consolidated financial statements or our knowledge
obtained in the audit, or otherwise appears to be
materially misstated. If, based on the work we have
performed, we conclude that there is a material
misstatement of this other information, we are required to
report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the consolidated
financial statements
The directors are responsible for the preparation and fair
presentation of the consolidated financial statements
in accordance with International Financial Reporting
Standards and the requirements of the Companies
Act of South Africa, and for such internal control as
the directors determine is necessary to enable the
preparation of consolidated financial statements that
are free from material misstatement, whether due to
fraud or error.
In preparing the consolidated financial statements, the
directors are responsible for assessing the group’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 the directors either
intend to liquidate the group or to cease operations, or
have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the
consolidated financial statements
Our objectives are to obtain reasonable assurance
about whether the consolidated financial statements
as a whole are free from material misstatement, whether
due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs will always detect a
material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably
be expected to influence the economic decisions
of users taken on the basis of these consolidated
financial statements.
As part of an audit in accordance with ISAs, we exercise
professional judgement and maintain professional
scepticism throughout the audit. We also:
ɽ Identify and assess the risks of material misstatement
of the consolidated financial statements, whether
due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate
to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from
fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override
of internal control.
ɽ obtain an understanding of internal control relevant
to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the
effectiveness of the group’s internal control.
ɽ evaluate the appropriateness of accounting policies
used and the reasonableness of accounting
estimates and related disclosures made by
the directors.
ɽ conclude on the appropriateness of the directors’
use of the going concern basis of accounting and
based on the audit evidence obtained, whether a
material uncertainty exists related to events or
conditions that may cast significant doubt on the
group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to
the related disclosures in the consolidated financial
statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on
the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions
may cause the group to cease to continue as a
going concern.
ɽ evaluate the overall presentation, structure and
content of the consolidated financial statements,
including the disclosures, and whether the
consolidated financial statements represent
the underlying transactions and events in a
manner that achieves fair presentation.
ɽ obtain sufficient appropriate audit evidence
regarding the financial information of the entities
or business activities within the group to express
an opinion on the consolidated financial statements.
We are responsible for the direction, supervision
and performance of the group audit. We remain
solely responsible for our audit opinion.
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We communicate with the directors regarding, among
other matters, the planned scope and timing of the audit
and significant audit findings, including any significant
deficiencies in internal control that we identify during
our audit.
We also provide the directors with a statement that
we have complied with relevant ethical requirements
regarding independence, and to communicate with them
all relationships and other matters that may reasonably
be thought to bear on our independence, and where
applicable, related safeguards.
From the matters communicated with the directors, we
determine those matters that were of most significance
in the audit of the consolidated financial statements
of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s
report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not
be communicated in our report because the adverse
consequences of doing so would reasonably be
expected to outweigh the public interest benefits
of such communication.
Report on other legal and regulatory requirements
In terms of the IRBA Rule published in Government
Gazette Number 39475 dated 4 December 2015,
we report that KPMG Inc. has been the auditor of
Ninety One Limited for one year.
KPMG Inc
Per GS Kolbé
Chartered Accountant (SA)
Registered Auditor
Director
The Halyard
4 Christiaan Barnard Street
Foreshore
Cape Town
8000
South Africa
3 July 2020
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Consolidated income statement
For the year ended 31 March 2020
Notes
2
2020
£’m
761.0
(151.1)
609.9
2019
£’m
696.6
(139.7)
556.9
3
(413.4)
(393.7)
(4.2)
2.1
0.2
5.1
5.0
0.4
194.6
173.7
4
1.7
196.3
5.7
179.4
6(a)
6(b)
(10.9)
13.1
—
(1.5)
—
0.5
198.5
178.4
5
(42.5)
156.0
(38.6)
139.8
155.4
0.6
156.0
139.3
0.5
139.8
7(a)
16.8
15.1
Revenue
Commission expense
Net revenue
Operating expenses
Net (loss)/gain on investments
Foreign exchange gain
Other income
Operating profit
Net interest income
Profit before tax and exceptional items
Exceptional items
Financial impact of group restructures
Ninety One share scheme implementation
Gain on disposal of subsidiary
Profit before tax
Tax expense
Profit after tax
Profit attributable to:
Shareholders
Non-controlling interests
Earnings per share (pence)
Basic and diluted
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Consolidated statement
of comprehensive income
For the year ended 31 March 2020
Profit after tax
Other comprehensive income/(loss) for the year
Items that will not be reclassified to profit or loss:
Net actuarial losses on pension fund asset/obligation
Deferred tax on revaluation of pension fund asset/obligation
Deferred tax on share options vested
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign subsidiaries
Other comprehensive loss for the year
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2020
£’m
156.0
2019
£’m
139.8
5
2
1
(1.8)
0.4
0.1
(10.2)
(11.5)
(2.4)
0.4
—
(9.9)
(11.9)
Total comprehensive income for the year
144.5
127.9
Total comprehensive income attributable to:
Shareholders
Non-controlling interests
143.9
0.6
144.5
127.4
0.5
127.9
0
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Consolidated statement
of financial position
At 31 March 2020
Assets
Investments
Investment in associate
Property and equipment
Right-of-use assets
Deferred tax assets
Other receivable
Pension fund asset
Total non-current assets
Investments
Linked investments backing policyholder funds
Income tax recoverable
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Liabilities
Other liabilities
Lease liabilities
Pension fund obligation
Deferred tax liabilities
Total non-current liabilities
Policyholder investment contract liabilities
Other liabilities
Lease liabilities
Trade and other payables
Deferred income
Income tax payable
Total current liabilities
Equity
Share capital
Own share reserve
Other reserves
Retained earnings
Shareholders’ equity excluding non-controlling interests
Non-controlling interests
Total equity
Total equity and liabilities
Notes
11
8
18(a)
9
20
11
10
12
15
18(a)
20
9
14
15
18(a)
16
13(a)
13(b)
13(c)
2020
£’m
4.8
0.3
18.0
90.7
25.2
6.2
—
145.2
2019
£’m
5.3
—
7.7
—
25.3
5.8
0.2
44.3
72.3
6,988.5
4.4
246.4
194.5
7,506.1
72.4
8,173.7
1.2
241.8
269.2
8,758.3
7,651.3
8,802.6
39.3
98.9
1.8
5.7
145.7
7,002.8
37.6
2.7
304.3
—
7.1
7,354.5
441.2
(9.9)
(351.6)
71.0
150.7
0.4
151.1
44.9
—
—
15.3
60.2
8,190.9
32.6
—
311.2
0.2
11.8
8,546.7
441.2
—
(346.1)
100.0
195.1
0.6
195.7
7,651.3
8,802.6
The consolidated financial statements were approved by the Board on 3 July 2020 and signed on its behalf by:
Hendrik du Toit
Chief Executive Officer
Kim McFarland
Finance Director
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Consolidated statement
of changes in equity
For the year ended 31 March 2020
1 April 2019
Profit for the year
Other comprehensive loss
Total comprehensive income
Transactions with
shareholders of the Group
Share-based payment
transactions related to
Ninety One share scheme
Own shares purchased
Dividends paid
Total transactions with
shareholders of the Group
Notes
Share
capital
£’m
441.2
—
—
—
—
—
—
—
13(c)(iv)
13(b)
13(d)
Own share
reserve
Total other
reserves
Retained
earnings
£’m
£’m
£’m
—
—
—
—
(346.1)
100.0
—
155.4
(10.2)
(10.2)
(1.3)
154.1
Total
shareholders’
equity
Non-
controlling
interests
£’m
195.1
155.4
(11.5)
143.9
£’m
0.6
0.6
—
0.6
Total
equity
£’m
195.7
156.0
(11.5)
144.5
—
(9.9)
—
4.7
—
—
—
—
4.7
(9.9)
—
—
4.7
(9.9)
(183.1)
(183.1)
(0.8)
(183.9)
(9.9)
4.7
(183.1)
(188.3)
(0.8)
(189.1)
31 March 2020
441.2
(9.9)
(351.6)
71.0
150.7
0.4
151.1
1 April 2018
441.2
—
(336.2)
106.1
211.1
0.6
211.7
Profit for the year
Other comprehensive loss
Total comprehensive income
Transactions with
shareholders of the Group
Share-based payment
transactions related to
Ninety One share scheme
Own shares purchased
Dividends paid
Total transactions with
shareholders of the Group
13(c)(iv)
13(b)
13(d)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
139.3
(9.9)
(9.9)
(2.0)
137.3
139.3
(11.9)
127.4
0.5
—
0.5
139.8
(11.9)
127.9
—
—
—
—
—
—
—
—
—
—
—
(143.4)
(143.4)
(0.5)
(143.9)
—
(143.4)
(143.4)
(0.5)
(143.9)
31 March 2019
441.2
—
(346.1)
100.0
195.1
0.6
195.7
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7
2
1
0
2
0
2
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Consolidated statement
of cash flows
For the year ended 31 March 2020
8
2
1
Cash flows from operations – shareholders
Cash flows from operations – policyholders
Cash flows from operations
Interest received
Interest paid in respect of lease liabilities
Other interest paid
Income tax paid
Net cash flows from operating activities
Cash flows from investing activities
Net (acquisition)/disposal of investments
Additions to property and equipment
Proceeds from disposal of subsidiary
Net acquisition of linked investments backing policyholder funds
Net cash flows from investing activities
Cash flows from financing activities
Payment of lease liabilities
Purchase of own shares by EBTs
Dividends paid
Net cash flows from financing activities
Notes
22(a)
8
10
22(b)
13(b)
2020
£’m
196.4
667.5
863.9
4.8
(0.6)
(0.1)
(54.4)
813.6
(3.6)
(13.4)
—
(655.0)
(672.0)
(5.7)
(9.9)
(183.9)
(199.5)
2019
£’m
171.7
596.5
768.2
5.7
—
—
(64.5)
709.4
3.4
(6.5)
1.8
(592.7)
(594.0)
—
—
(143.9)
(143.9)
Effect of foreign exchange rate changes
(16.8)
(10.6)
Net change in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
(74.7)
269.2
194.5
(39.1)
308.3
269.2
12
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Notes to the consolidated
financial statements
For the year ended 31 March 2020
Introduction
On 14 September 2018, Investec plc and Investec Limited (collectively referred to as “Investec”) announced their
plan to demerge and publicly list the asset management business (the “Ninety One Business”). The separation was
implemented by way of a demerger of the Ninety One Business to a new dual-listed company (“DLC”) arrangement,
comprising Ninety One plc, a public limited company incorporated in England and Wales under the UK Companies
Act 2006 and Ninety One Limited, a public company incorporated in the Republic of South Africa under the South
African Companies Act 71 of 2008. Investec has retained a minority stake in the Ninety One Business.
As a result of the planned demerger of the Ninety One Business from Investec, Ninety One plc and Ninety One
Limited became the holding companies of the Ninety One Business, through a share-for-share exchange, with
Ninety One plc and Ninety One Limited receiving the entire net asset value of the underlying entities of the Ninety
One Business, in exchange for the issue of ordinary shares of Ninety One plc and Ninety One Limited to the original
stakeholders of the Ninety One Business on a pro rata basis. Upon the completion of the share-for-share exchange,
Ninety One plc and Ninety One Limited, together with their direct and indirect subsidiaries formed a DLC
arrangement through the Ninety One DLC agreements which is that Ninety One plc and Ninety One Limited are
operated as a single corporate group (collectively, the “Group”) under the agreements. The Group was demerged
from Investec on 13 March 2020 (the “Date of Demerger”) and listed on the London and Johannesburg Stock
Exchanges on 16 March 2020 (the “Admission Date”).
1. Basis of preparation and accounting policies
1(a) Basis of preparation
The Group’s financial statements are prepared in accordance with both International Financial Reporting Standards
(“IFRS”) and the interpretations of the IFRS Interpretations Committee (“IFRIC”) as adopted by the European Union (“EU”),
and with IFRS as issued by the International Accounting Standards Board (“IASB”) (collectively “IFRS”) since the latter
is identical in all material respects. They are also prepared in accordance with the interpretations adopted by the
International Accounting Standards Board, the South African Institute of Chartered Accountants’ Financial Reporting
Guides and Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council and the
requirements of the Companies Act 2006 in the UK and the Companies Act of South Africa.
The Group’s financial statements comprise the consolidated statement of financial position at 31 March 2020, and the
consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes
in equity and consolidated statement of cash flows for the year ended 31 March 2020, and a summary of significant
accounting policies and the notes thereto.
This is the first set of the Group’s financial statements in which the Group has prepared the consolidated financial
statements, using the accounting policies applied in preparing the combined historical financial information of the Ninety
One Business reported in the Ninety One prospectus and pre-listing statement dated 2 March 2020 (the “Prospectus”),
which is available on the Group’s website. These accounting policies have been disclosed under significant accounting
policies.
The insertion of Ninety One plc and Ninety One Limited as the ultimate holding companies of the Group via a share-
for-share exchange with the original stakeholders of the Ninety One Business (the “Demerger Transactions”) constitute
“transactions under common control” in which merger accounting is applied. Accordingly, the consolidated financial
statements are prepared as if the Group had already existed before the start of the earliest period presented. The
comparative information is, therefore, presented as if the Demerger Transactions had occurred at 1 April 2018. The
comparative information has been derived from the audited financial statements of entities forming the Ninety One
Business adjusted for the demerger equity and reserve adjustments.
The financial statements have been prepared on the historical cost basis with the exception of linked investments
backing policyholder funds, policyholder investment contract liabilities, investments, the pension fund asset and the
pension fund obligations. The presentation currency of the Group is pound Sterling (“£”), being the functional currency
of Ninety One plc. The functional currency of Ninety One Limited is South African Rand. All values are rounded to the
nearest million (“£m”), unless otherwise indicated.
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Notes to the consolidated financial statements
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1(a) Basis of preparation continued
Foreign operations are subsidiaries and interests in associated undertakings of the Group, the activities of which are
based in a functional currency other than that of the reporting entity. The functional currency of an entity is determined
based on the primary economic environment in which the entity operates. Foreign currency transactions are translated
into the functional currency of the entity in which the transactions arise, based on rates of exchange ruling at the date
of the transactions.
The separate financial statements of Ninety One plc are included in the Group’s financial statements in accordance with
the requirement of UK Listing Rules. The separate financial statements of Ninety One plc are prepared in accordance
with the Group’s accounting policies, other than for investments in subsidiary undertakings, which are stated at cost less
impairments in accordance with IAS 27 Separate Financial Statements. The separate financial statements of Ninety One
Limited are published on the Group’s website as a separate document.
Going concern
The board of directors have considered the resilience of the Group, taking into account its current financial position,
the principal risks facing the business and the impacts that the outbreak of the new coronavirus (“COVID-19”) and its
associated events has had on the Group. The board of directors have considered the impact of COVID-19 by applying
various stressed scenarios, including plausible downside assumptions, about the impact on assets under management,
profitability of the Group and known commitments. All scenarios show that the Group would continue to operate
profitably for a period of at least 12 months from the date of approval of the annual financial statements. The consolidated
financial statements have therefore been prepared on a going concern basis.
1(b) Accounting judgements and estimates
The preparation of the consolidated financial statements requires management to make judgements, estimates and
assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses.
The estimates and underlying assumptions are based on historical experience and various other factors that are believed
to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying
values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these
estimates. These estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the
period of the revision and future periods if the revision affects both current and future periods.
The Group has not identified any significant judgements and estimates at the end of the reporting period. However, the
areas that include estimates are related to the valuation of level 3 financial instruments per the fair value hierarchy and
the valuation of the pension fund asset/obligation. Management do not expect changes in assumptions to lead to a
material adjustment in the future periods.
(i) Basis of consolidation
Ninety One plc and Ninety One Limited operate under a DLC arrangement as a result of legally binding agreements that
were executed at the point of demerger. The effect of the DLC structure is that Ninety One plc and Ninety One Limited
and their direct and indirect subsidiaries and associates operate together as a single economic entity, with neither
assuming a dominant role and accordingly are reported as a single reporting entity under IFRS. IFRS does not specifically
provide guidance on how to account for such structures and hence judgement is required in applying the consolidation
principles set out in IFRS 10. The board of directors of Ninety One plc and Ninety One Limited, having assessed the legal
agreements referred to above and the requirements of IFRS 10, have concluded that the Group’s consolidated financial
statements represent the consolidation of the assets, liabilities and the results of Ninety One plc and Ninety One Limited
and their direct and indirect subsidiaries and associates. Subsidiaries are those entities controlled by the Group.
Subsidiaries are consolidated from the date the Group obtains control and are excluded from consolidation from the
date which the Group loses control.
On consolidation, the results and financial position of foreign operations are translated into the presentation currency
of the Group, as follows:
ɽ Assets and liabilities for the consolidated statement of financial position presented are translated at the closing rate
at the reporting date;
ɽ income and expense items are translated at exchange rates ruling at the date of the transactions;
ɽ all resulting exchange differences are recognised in other comprehensive income (foreign currency translation
reserve), which is recognised in profit or loss within the consolidated statement of comprehensive income on
disposal of the foreign operation; and
ɽ cash flow items are translated at the exchange rates ruling at the date of the transactions.
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All intra-group balances, income and expenses arising from transactions between companies belonging to the Group
were eliminated when preparing the consolidated financial statements. In addition, the investments of the holding
companies in the Group were eliminated against the equity of the respective subsidiaries. The share capital of the
Group is an aggregation of the share capitals of Ninety One plc and Ninety One Limited.
1
3
1
(ii) Lease assets and liabilities
IFRS 16 became effective for periods beginning on or after 1 January 2019. The new standard removes the distinction
between operating and finance leases and requires the recognition of a right-of-use asset and corresponding liability for
future lease payments. The Group has elected to use the modified retrospective approach and therefore has not restated
comparative information in preparing the 31 March 2020 consolidated financial statements, as permitted under the
specific transitional provisions in the standard.
Calculation of leased assets and liabilities requires the use of both estimation and judgement. The determination of the
lease term for each lease involves the Group assessing any extension and termination options, the enforceability of such
options, and judging whether it is reasonably certain that they will be exercised. Several of the Group’s leases contain
such clauses. For each lease, a conclusion was reached on the overall likelihood of the option being exercised.
In addition, the identification of an appropriate discount rate to use in the calculation of the lease liability involves both
estimation and judgement. Where the lease’s implicit rate is not readily determinable, an incremental borrowing rate
must be calculated by the Group. The discount rate used has a direct effect on the size of the lease liability capitalised,
however it is assessed that the change in discount rate is unlikely to have an material impact to the Group.
Details of the adoption of IFRS 16 are disclosed in note 1(c).
(iii) Exceptional items
Exceptional items are defined as income or expenses that arise from events or transactions that are clearly distinct
from the ordinary activities of the Ninety One Business and therefore are not expected to recur frequently or regularly.
Such items have been separately presented to enable a better understanding of the Group’s operating performance.
Exceptional items relate primarily to:
ɽ The costs incurred as part of the demerger and separate listing of the Group in March 2020; and
ɽ the impact of reversing staff expense accruals to fund the investment into the new Ninety One share schemes
in March 2020, net of the share scheme expenses which are amortised over the vesting period of the awards
under IFRS 2.
Details of exceptional items are presented in note 6.
1(c) New standard adopted by the Group
The Group has initially adopted IFRS 16 as from 1 April 2019 (the “Date of Initial Application”). IFRS 16 replaces IAS 17
Leases and sets out the principles for recognition, measurement, presentation and disclosure of leases for lessees and
lessors. It introduces a single accounting model for lessees, which requires a lessee to recognise a right-of-use asset
and a lease liability for all leases, except for leases that have a lease term of 12 months or less (“short-term leases”) and
leases of low-value assets. It also introduces additional disclosure requirements which aim to enable users of the
financial statements to assess the effect that leases have on the financial position, financial performance and cash
flows of an entity.
The Group has elected to use the modified retrospective approach and therefore has not restated comparative
information, as permitted under the specific transitional provisions in the standard.
0
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Notes to the consolidated financial statements
1(c) New standard adopted by the Group continued
At the Date of Initial Application, the Group determined the length of the remaining lease terms and measured the lease
liabilities for the leases previously classified as operating leases at the present value of the remaining lease payments,
discounted using the relevant incremental borrowing rates used at the Date of Initial Application. Right-of-use assets
were measured at an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease
payments relating to that lease recognised in the statement of financial position of the respective subsidiaries as
at 31 March 2019. The weighted average of the incremental borrowing rates used for determination of the present
value of the remaining lease payments was 3.37%. The Group has applied the following practical expedients:
ɽ Grandfather the previous assessment of which existing contracts are, or contain, leases in accordance with IAS 17;
and
ɽ not consider on adoption any initial direct costs in the initial calculation of the right-of-use asset.
The following table reconciles the operating lease commitments as disclosed at the end of the annual reporting period
of the respective subsidiaries immediately preceding the Date of Initial Application to the opening balance for lease
liabilities recognised as at the Date of Initial Application.
Operating lease commitments at 31 March 2019
Add: lease payments for the additional periods where the Group
considers it reasonably certain that it will exercise the extension options
Less: total future interest expenses
Total lease liabilities recognised at 1 April 2019
£’m
113.8
0.1
113.9
(25.3)
88.6
The change in accounting policy affected the following items in the consolidated statement of financial position on
1 April 2019:
ɽ Right-of-use assets increased by £85.3m;
ɽ trade and other payables decreased by £3.3m; and
ɽ lease liabilities increased by £88.6m.
1(d) Forthcoming standards applicable to the Group
There are new or revised accounting standards and interpretations in issue that are not yet effective. These include
the following standards that are applicable to the Group:
ɽ Amendments to IAS 1 Presentation of Financial Statements and IAS 8 Accounting Policies, changes in Accounting
Estimates and Errors align the wording of the definition of “material” across all IFRSs and the Conceptual Framework
for Financial Reporting. It also clarifies when information is material and incorporates some of the guidance in IAS 1
about immaterial information. The amendment is effective for annual periods beginning on or after 1 January 2020.
ɽ amendments to IFRS 3 Business Combinations clarify that the definition of a business requires an acquisition to
include an input and a substantive process that together significantly contribute to the ability to create outputs.
The definition of the term “outputs” is amended to focus on goods and services provided to customers, generating
investment income and other income, and it excludes returns in the form of lower costs and other economic
benefits. The amendment is effective for annual periods beginning on or after 1 January 2020.
The Group is in the process of making an assessment of what the impact of these amendments is expected to be in
the period of initial application. So far the Group has concluded that the adoption of these amendments is unlikely
to have a significant impact on the consolidated financial statements.
2
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1(e) Significant accounting policies
The accounting policies set out below have been applied consistently throughout the periods presented in the
consolidated financial statements, unless indicated otherwise.
3
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(i) Consolidation and related policies
Subsidiaries
Subsidiaries are those entities over which the Group has control. The Group controls an entity if the Group has all of
the following:
ɽ Power over the investee;
ɽ exposure, or rights, to variable returns from its involvement with the investee; and
ɽ the ability to use its power over the investee to affect its returns.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated
from the date that control ceases.
Inter-company transactions, balances, income and expenses on transactions between companies within the Group are
eliminated. Profits and losses resulting from intercompany transactions that are recognised in assets are also eliminated.
Associates
Associates are all entities over which the Group has significant influence but not control or joint control, through
participation in the financial and operating policy decisions. Investments in associates are accounted for using the
equity method of accounting. Under the equity method of accounting, investments are initially recognised at cost and
thereafter the Group recognises its share of the investee’s post-acquisition profits or losses in its consolidated income
statement. Dividends received or receivable from the investee are recognised as a reduction in the carrying amount of
the investment. The carrying amount of equity-accounted investments is tested for impairment in accordance with the
policy described in “Impairment of non-financial assets” in these accounting policies.
Merger accounting for common control combinations
Merger accounting is used by the Group for common control transactions, which are transactions between entities that
are ultimately controlled by the same party or parties. This method treats the merged entities as if they had been merged
throughout the current and comparative accounting periods.
The net assets of the combining entities or businesses use the existing book values from the controlling parties’
perspective. No amount is recognised in consideration for goodwill or excess of acquirers’ interest in the net fair
value of acquiree’s identifiable assets, liabilities and contingent liabilities over cost at the time of the common control
combination, to the extent of the continuation of the controlling party’s interest. The excess of the acquiree’s share
capital and share premium over the cost of investment is represented as a reserve in equity in the consolidated
statement of financial position.
Transaction costs, including professional fees, registration fees, costs of furnishing information to shareholders, costs or
losses incurred in combining operations of the previously separate businesses, etc., incurred in relation to the common
control combination that are to be accounted for by using merger accounting are recognised as an expense in the year
in which they are incurred.
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Notes to the consolidated financial statements
1(e) Significant accounting policies continued
(i) Consolidation and related policies continued
Non-controlling interests
Non-controlling interests represent the equity in a subsidiary not attributable directly or indirectly to the Group, and in
respect of which the Group has not agreed any additional terms with the holders of those interests which would result in
the Group as a whole having a contractual obligation in respect of those interests that meets the definition of a financial
liability. The Group can elect to measure any non-controlling interests either at fair value or at the non-controlling
interests’ proportionate share of the subsidiary’s net identifiable assets, at initial recognition. Thereafter, non-controlling
interests are measured using the proportionate share method. Non-controlling interests are presented in the consolidated
statement of financial position within equity, separately from equity attributable to the equity shareholders of the Group.
Non-controlling interests in the results of the Group are presented on the face of the consolidated statement of
comprehensive income as an allocation of the total profit or loss and total comprehensive income for the year between
non-controlling interests and the equity shareholders of the Group. Changes in the Group’s interests in a subsidiary that
do not result in a loss of control are accounted for as equity transactions, whereby adjustments are made to the amounts
of controlling and non-controlling interests within consolidated equity to reflect the change in relative interests, but no
adjustments are made to goodwill and no gain or loss is recognised.
(ii) Other significant accounting policies
Revenue
The Group recognises revenue when or as it satisfies a performance obligation by transferring promised services to the
customers in an amount to which the Group expects to be entitled in exchange for those services. The Group includes
variable consideration in revenue when it is no longer highly probable of significant reversal. Generally, the Group is
deemed to be the principal in the contracts because the Group controls the promised services before they are
transferred to customers, and accordingly presents the revenue gross of related costs.
i) Management fees are recognised as the services are performed over time and are primarily based on agreed
percentages of the net asset values of the investment funds and segregated mandates.
ii) Performance fees are recognised on the crystallisation date (at a point in time) and are calculated on a percentage of
the appreciation in the net asset value of investment funds and segregated mandates above a defined hurdle, taking
into consideration the relevant basis of calculation for investment funds and segregated mandates, and it is highly
probable that they will not be subject to significant reversal.
iii) Silica’s revenue includes fee income for third-party administration outsourced services and project income for client
system development and implementation. Fee income for third-party administration outsourced services is
recognised as the services are rendered. Project income for client system development and implementation is
recognised on a stage of completion basis.
Management fees and performance fees are both forms of variable consideration, however there is no significant
judgement or estimation involved as the transaction price is equal to the amount determined at the end of each
measurement period or on the crystallisation date and is equal to the amount billed to the customer as per contractual
agreements. Fees received from customers are generally not subject to returns or refunds.
All components of the Group’s revenue are revenue from contracts within the scope of IFRS 15 Revenue from Contracts
with Customers. The Group uses the output method to recognise revenue, applying the practical expedient that allows
an entity to recognise revenue in the amount to which the entity has a right to invoice if that consideration corresponds
directly with the value to the customer of the entity’s performance completed to date.
Interest income
Interest income is recognised on an accrual basis using the effective interest method in accordance with the
requirements of IFRS 9 Financial instruments.
Commission expenses
Commissions and similar expenses payable to intermediaries are recognised when services are provided.
4
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Leases
The Group leases various offices for business purposes. Lease terms are negotiated on an individual basis and contain
a wide range of different terms and conditions. The lease agreements do not impose any covenants, but leased assets
may not be used as security for borrowing purposes.
5
3
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Prior to the adoption of IFRS 16, all leases were classified as operating leases. Payments made under operating leases
(net of any incentives received from the lessor) were charged to profit or loss on a straight-line basis over the period of
the lease.
From 1 April 2019, leases are recognised as a right-of-use asset with a corresponding liability at the date which the
leased asset is available for use by the Group. Assets and liabilities arising from a lease are initially measured on a present
value basis.
Lease liabilities include the net present value of lease payments. The lease payments are discounted using the entity’s
incremental borrowing rate, being the rate that the entity would have to pay to borrow the funds necessary to obtain
an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and
conditions. Lease payments are allocated between the principal and finance cost. The finance cost is charged to profit
or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability
for each period.
Right-of-use assets are measured at cost comprising the following:
ɽ The amount of the initial measurement of lease liabilities;
ɽ any lease payment made at or before the commencement date less any lease incentives;
ɽ any initial direct costs; and
ɽ restoration costs.
Right-of-use assets are generally depreciated over the lease term on a straight-line basis. Payments associated with
short-term leases are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases
with a lease term of 12 months or less.
Property and equipment
Property and equipment is stated at cost less accumulated depreciation and accumulated impairment losses.
Depreciation is provided for on a straight-line basis over the estimated useful lives of property and equipment as follows:
Computer equipment
Fixtures and fittings
Leasehold improvements Shorter of term of lease or useful economic life
3 years
5 years
The residual values, depreciation methods and useful lives are reassessed annually.
Income tax
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively
enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is provided using the statement of financial position method, providing for temporary differences between
the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation
purposes. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the
carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the reporting date. A
deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which
the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax
benefit will be realised. Deferred tax assets are offset against deferred tax liabilities if they relate to income taxes levied
by the same taxation authority on the same taxable entity.
Income taxes of the Group were determined based on the assumption that the individual entities were separate taxable
entities. Therefore, the current and deferred income taxes of all subsidiaries of the Group are calculated separately and
the recoverability of the deferred tax assets is also assessed accordingly.
0
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Notes to the consolidated financial statements
1(e) Significant accounting policies continued
(ii) Other significant accounting policies continued
Financial instruments
Recognition and derecognition of financial instruments
Financial instruments are initially recognised at fair value on the statement of financial position when, and only when,
the Group becomes a party to the contractual provisions of the particular instrument. Financial assets are derecognised
when, and only when, the Group transfers substantially all risks and rewards of ownership. Financial liabilities are
derecognised when, and only when, the obligations under the contract are discharged, cancelled or expire.
Classification and measurement of financial assets and financial liabilities
Financial assets are classified into three principal classification categories: measured at amortised cost, at fair value
through other comprehensive income and at fair value through profit or loss (“FVTPL”). The classification of financial
assets under IFRS 9 is based on the business model under which the financial asset is managed and its contractual
cash flow characteristics. The Group’s financial assets are either classified as measured at FVTPL or amortised cost.
Financial assets measured at amortised cost
Financial assets are measured at amortised cost when their contractual cash flows represent solely payments of
principal and interest and they are held within a business model designed to collect cash flows. It typically applies to the
Group’s trade and other receivables. The carrying amount of financial assets measured at amortised cost is adjusted for
expected credit loss (“ECL”) under the ECL model.
In measuring ECLs, the Group takes into account reasonable and supportable information that is available without
undue cost or effort. This includes information about past events, current conditions and forecasts of future economic
conditions.
The ECL amount depends on the specific stage that the financial instrument has been allocated to within the ECL model,
which depends on whether there has been a significant increase in credit risk since initial recognition of the financial
instrument, it is in default, or is considered to be credit impaired. ECL allowances are measured on either i) 12-month
ECL: that result from possible default events within the 12 months after the reporting date; or ii) Lifetime ECLs: that result
from all possible default events over the expected life of a financial instrument. The Group considers a financial asset
to be in default when: i) the borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the
Group to actions such as realising security (if any is held); or ii) the financial asset is more than 90 days past due without
reasonable expectation of recovery. The Group applies the simplified approach in determining ECLs for trade
receivables.
Financial assets measured at FVTPL
Financial assets measured at FVTPL consist of linked investments backing policyholder funds, holdings in pooled
vehicles as part of the deferred compensation plan (explained further below), seed capital investments and the
investment in unlisted investment vehicles. These investments are initially recognised at fair value and subsequently
measured at FVTPL, with gains and losses recognised in the consolidated income statement in the period which they
arise. Contracts related to linked investments backing policyholder funds issued by the Group do not qualify as
insurance contracts as defined in IFRS 4 Insurance Contracts as there is no transfer of insurance risk. Therefore,
these contracts are accounted for under IFRS 9.
When available, the Group measures the fair value of an instrument, such as interest-bearing investments, listed
investments and investments in collective investment schemes and mutual funds, using the quoted price in an active
market. If there is no quoted price in an active market, such as derivatives and unlisted equity investments, the fair
value of these investments is determined by applying a generally accepted valuation technique.
Financial liabilities
Financial liabilities comprise policyholder investment contract liabilities, deferred compensation liabilities, other liabilities,
trade and other payables and amounts payable to Investec. All financial liabilities, excluding policyholder investment
contract liabilities and deferred compensation liabilities, are measured at amortised cost using the effective interest
method. Policyholder investment contract liabilities and deferred compensation liabilities are held at fair value with
movements in fair value recognised in the statement of comprehensive income. Policyholder investment contract
liabilities are designated at fair value so as to avoid a mismatch in profit or loss between the policyholder investments
linked to investment contracts and the policyholder investment contract liabilities.
6
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Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and on hand and money market funds that are readily convertible
to a known amount of cash and are subject to an insignificant risk of changes in value.
7
3
1
Impairment of non-financial assets
The carrying amounts of the Group’s assets are reviewed at each reporting date to determine whether there is any
indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. At the reporting
date, there was no indication of impairment of any assets.
Pension schemes
The Group operates a number of pension schemes including defined benefit and defined contribution schemes.
Payments to defined contribution schemes are charged as an expense as the employees render services.
Defined benefit pension obligations are calculated using the projected unit credit method. The net charge to the
consolidated statement of comprehensive income mainly comprises the service cost and the net interest on the net
defined benefit asset or liability, and is presented in administrative expenses.
Remeasurements of the net defined benefit asset or liability, which comprise actuarial gains or losses, return on plan
assets excluding interest and the effect of the asset ceiling (if any), are recognised in other comprehensive income.
The net defined benefit asset or liability represents the present value of defined benefit obligations reduced by the fair
value of plan assets, after applying the asset ceiling test, where the net defined benefit surplus is limited to the present
value of available refunds and reductions in future contributions to the plan.
Share-based payments
The Group operates a number of share incentive plans for its employees. The share incentive plans, which are on an
equity- settled basis, involve an award of shares or options in the Group to selected employees. The vesting conditions
of the awards can be performance and/or service conditions and vary between different types of awards. The fair
value of employee services received, measured by reference to the grant date fair value of the awards adjusted by the
estimate of the likely levels of forfeiture and achievement of performance criteria, is recognised as an expense over
the vesting period with a corresponding credit to the share-based payments reserve in the equity of the Group’s
consolidated financial statements. The vesting period for these plans may commence before the legal grant date if the
employees have started to render services in respect of the award before the legal grant date, where there is a shared
understanding of the terms and conditions of the arrangement.
At each period end, the Group reassesses the number of equity instruments expected to vest and recognises any
difference between the revised and original estimate in the consolidated income statement with a corresponding
adjustment to the share-based payments reserve in equity. Failure to meet a vesting condition by the employee is not
treated as a cancellation, and the amount of expense recognised for the award is adjusted to reflect the number of
awards expected to vest.
Long-term employee benefits
The obligation in respect of long-term employee benefits other than retirement benefits is the amount of future benefit
that employees have earned in return for their service in the current and prior periods. This future benefit relates to
deferred compensation provided by the Group to its employees, which the Group invests in pooled vehicles managed
by entities within the Group. At the end of the specified vesting period, employees are entitled to an amount equal to the
value of the investments held by the Group. It is management’s view that the most relevant measure of the employee
benefit liability is therefore the fair value of the investments held by the Group. The investments do not qualify as plan
assets and are presented separately in the statement of financial position. The accounting policy for investments
designated at fair value addresses the accounting treatment of these investments. As the nature of the scheme is
that of an annual bonus award, the charge is booked in full in profit or loss at the time of the award.
Interests in structured entities
A structured entity is an entity that has been designed so that voting or similar rights are not the dominant factor in
deciding control, such as when any voting rights relate to administrative tasks only, or when the relevant activities are
directed by means of contractual arrangements. The interests in unconsolidated structured entities are described in
note 24.
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Notes to the consolidated financial statements
2. Segmental reporting
As an integrated global investment manager, the Group operates a single-segment investment management business.
All financial, business and strategic decisions are made centrally by the chief operating decision maker (the “CODM”)
of the Group. The CODM is the chief executive officer of the Group from time to time. Reporting provided to the CODM
is on an aggregated basis which is used for evaluating the Group’s performance and the allocation of resources. The
CODM monitors operating profit for the purpose of making decisions about resource allocation and performance
assessment. Revenue is disaggregated by geographic location of contractual entities, as this best depicts how the
nature, amount, timing and uncertainty of the Group’s revenue and cash flows are affected by economic factors.
Revenue is generated from a diversified customer base and the Group has no single customer that it relies on. Non-
current assets other than intangibles, investments, deferred tax assets and pension fund assets are allocated based
on where the assets are physically located. Non-current assets for this purpose consist of property and equipment.
Revenue from external clients
United Kingdom and Other
Southern Africa
Total
Performance fees included in revenue above
Non-current assets
United Kingdom and Other
Southern Africa
Total
3. Operating expenses
Staff costs
Operating lease expense
Depreciation of right-of-use assets
Depreciation of property and equipment
Auditors’ remuneration
Other administrative expenses
3(a) Staff costs
Salaries, wages and other related costs
Share-based payment expenses related to Investec Share Plans
Social security costs
Pension costs
Notes
8
Notes
3(a)
18(b)
8
3(b)
2020
£’m
597.4
163.6
761.0
2019
£’m
546.3
150.3
696.6
21.5
11.0
14.8
3.2
18.0
5.1
2.6
7.7
2020
£’m
2019
£’m
273.2
263.6
—
10.7
2.5
1.5
125.5
413.4
2020
£’m
245.0
1.2
17.8
9.2
11.6
—
2.0
1.2
115.3
393.7
2019
£’m
236.1
2.4
16.7
8.4
273.2
263.6
The share-based payments expense related to the Ninety One share scheme of £5.2 million (2019: nil) is excluded from
the above expenses. See note 6(b) for more detail.
8
3
1
0
2
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2
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(i) Average number of employees
The monthly average number of persons, including the directors, employed by the Group during the year ended 31
March 2020, excluding 481 (2019: 506) employed by the Silica subsidiaries, by activity is:
9
3
1
Investments
Client group and marketing
Operations and central services
3(b) Auditors’ remuneration
Fees payable to the Group’s auditors and their associates for the audit
of the Group’s consolidated financial statements
Fees payable to the Group’s auditors and their associates for audit and other services:
Audit of the Group’s subsidiaries pursuant to legislation
Audit-related assurance services
Tax compliance services
Other assurance services
4. Net interest income
Interest income
Interest expense on lease liabilities
Other interest expense
Interest income consists of interest on financial assets measured at amortised cost.
5. Tax expense
Current tax – current year
Current tax – adjustment for prior years
Current tax expense
Deferred tax – current year
Deferred tax – adjustment for prior years
Deferred tax – change in corporate tax rate
Deferred tax credit
2020
249
401
498
2019
238
394
462
1,148
1,094
2020
£’m
0.3
0.7
0.3
—
0.2
1.5
2020
£’m
4.8
(3.0)
(0.1)
1.7
2020
£’m
43.6
(0.2)
43.4
0.5
(0.3)
(1.1)
(0.9)
2019
£’m
—
0.6
0.3
0.1
0.2
1.2
2019
£’m
5.7
—
—
5.7
2019
£’m
40.0
0.1
40.1
(2.0)
—
0.5
(1.5)
42.5
38.6
0
2
0
2
t
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Notes to the consolidated financial statements
5. Tax expense continued
The UK corporate tax rate for 2020 was 19% (2019: 19%). The UK corporate tax rate was planned to reduce to 17% from
1 April 2020 as part of the Finance Bill 2016. However, it was further announced by HMRC on 11 March 2020 that the UK
corporate tax rate remains at 19% rather than reducing it to 17% from 1 April 2020 with the objective of raising revenue
while maintaining the UK’s competitive rate of corporation tax.
The tax charge in the year is higher (2019: higher) than the standard rate of corporate tax in the UK and the differences
are explained below:
Reconciliation of effective tax rate
Effective rate of taxation
Tax effect of non-deductible expenses
Effect on deferred tax balances resulting from a change in tax rate
Adjustment to tax charge in respect of prior year
Effect of different tax rates applicable in foreign jurisdictions
United Kingdom standard tax rate
6. Exceptional items
2020
%
21.4
(0.3)
0.6
0.2
(2.9)
19.0
2019
%
21.6
(0.2)
(0.3)
—
(2.1)
19.0
Exceptional items are defined as income or expenses that arise from events or transactions that are clearly distinct from
the ordinary activities of the Group and therefore are not expected to recur frequently or regularly. Exceptional items are
set out as below:
6(a) Financial impact of group restructures
The financial impact amounting to £10.9 million (2019: £1.5 million) are the costs incurred in separating from Investec
which mainly consist of costs on rebranding and network migration.
6(b) Ninety One share scheme implementation
The Group established two new long-term incentive plans and a UK tax advantaged share incentive plan with effect from
the Admission Date. Before the Date of Demerger, the Ninety One Business operated a bonus deferral arrangement
where a portion of selected employees’ annual bonuses are deferred into investment funds managed by the Ninety One
Business. The Ninety One share schemes are intended to complement this arrangement and allow for a portion of the
annual bonus to be deferred into an award under the Ninety One share scheme.
Due to the terms attaching to these incentive plans, previously expensed bonus deferral costs for relevant employees
are fully reversed and replaced by costs of the new long-term incentive plans over their vesting period. The net impact of
reversing costs related to the deferred bonus arrangement into the Ninety One share scheme in March 2020 is set out
as below:
Reversal of costs related to the deferred bonus arrangement
Recognition of share-based payment expense and other related costs for the Ninety One share scheme
These expenses are not expected to be exceptional in future periods.
2020
£’m
18.3
(5.2)
13.1
0
4
1
0
2
0
2
t
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R
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a
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A
d
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a
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A
7. Earnings per share
The Group calculates earnings per share (“EPS”) on a number of different bases in accordance with IFRS and prevailing
South Africa requirements.
Share transactions such as share issues in respect of the Demerger Transactions are reflected in the EPS denominator
as if these transactions had occurred before the year ended 31 March 2019.
7(a) Basic and diluted earnings per share
The calculations of basic and diluted EPS are based on IAS 33 Earnings Per Share; details are shown as below:
Basic earnings per share are calculated by dividing the profit for the year attributable to ordinary shareholders by the
weighted average number of ordinary shares outstanding during the year, excluding own shares held by the Ninety One
Employee Benefit Trusts.
Diluted earnings per share are calculated by dividing the profit for the year attributable to ordinary shareholders by the
weighted average number of ordinary shares outstanding during the year, plus the weighted average number of ordinary
shares that would be issued on the conversion of all the potentially dilutive shares into ordinary shares. There are no
potentially dilutive shares for the years ended 2020 and 2019, therefore the weighted average number of ordinary
shares used to calculate the basic and diluted EPS is the same.
Profits attributable to ordinary shareholders
2020
£’m
155.4
2019
£’m
139.3
The table below summarises the calculation of the weighted average number of ordinary shares for the purpose of
calculating basic and diluted earnings per share:
Weighted average number of ordinary shares
Ordinary shares in issue
Less: Own shares held by the Ninety One Employee Benefit Trusts
Weighted average number of ordinary shares for the purpose of calculating basic
and diluted EPS
Basic earnings per share and diluted earnings per share (pence)
2020
Number of
shares
2019
Number of
shares
922,714,076
922,714,076
(262,276)
—
922,451,800
922,714,076
16.8
15.1
7(b) Headline earnings and diluted headline earnings per share
The Group is required to calculate headline earnings per share (“HEPS”) in accordance with the JSE Listings Requirements,
determined by reference to circular 1/2019 “Headline Earnings” issued by the South African Institute of Chartered
Accountants.
The table below reconciles the profits attributable to ordinary shareholders to headline earnings and summarises the
calculation of basic and diluted HEPS:
Profits attributable to ordinary shareholders
Share of profit from associates
Gain on disposal of subsidiary
Headline earnings and diluted headline earnings
2020
£’m
155.4
(0.2)
—
155.2
2019
£’m
139.3
—
(0.5)
138.8
1
4
1
0
2
0
2
t
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p
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R
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a
u
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Notes to the consolidated financial statements
7(b) Headline earnings per share continued
Weighted average number of ordinary shares for the purpose of calculating basic
and diluted EPS (note 7(a))
Headline earnings per share and diluted headline earnings per share (pence)
2020
Number of
shares
2019
Number of
shares
922,451,800
922,714,076
16.8
15.0
7(c) Adjusted earnings per share
Adjusted earnings per share is the Group’s key alternative performance measure which is consistent with the way that
financial performance is measured by the senior management of the Group. It is calculated by dividing the adjusted
earnings after tax attributable to ordinary shareholders by the total number of ordinary shares in issue at the end of the
year. Adjusted earnings are calculated to reflect the underlying long-term performance of the Group by excluding the
impact of the following items:
ɽ Exceptional items;
ɽ interest income excluding Silica;
ɽ profit or loss arising from entities which do not reflect the core business of the Group, (Silica); and
ɽ relevant tax impact on adjusting items.
The table below reconciles the profit for the financial year to adjusted earnings and summarises the calculation
of adjusted EPS:
Profits attributable to ordinary shareholders
Adjusted for:
Financial impact of group restructures
Ninety One share scheme implementation
Gain on disposal of subsidiary
Interest income excluding Silica
Profit from Silica
Tax on adjusted items
2020
£’m
155.4
10.9
(13.1)
—
(4.5)
(1.9)
2.0
2019
£’m
139.3
1.5
—
(0.5)
(5.5)
(1.4)
1.6
Adjusted earnings attributable to ordinary shareholders
148.8
135.0
Total number of ordinary shares in issue
Adjusted earnings per share (pence)
2020
Number of
shares
2019
Number of
shares
922,714,076
922,714,076
16.1
14.6
2
4
1
0
2
0
2
t
r
o
p
e
R
l
a
u
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n
A
d
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t
a
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e
t
n
I
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O
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t
e
n
N
i
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t
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e
m
e
t
a
t
S
l
i
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n
a
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F
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a
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A
8. Property and equipment
At 31 March 2020
Cost
Opening balance
Additions
Disposals
Exchange adjustment
Closing balance
Accumulated depreciation
Opening balance
Depreciation
Disposals
Exchange adjustment
Closing balance
Leasehold
improvements
Computer
equipment
Fixtures and
fittings
£’m
£’m
£’m
6.1
9.9
(0.4)
(0.1)
15.5
(1.3)
(0.5)
0.4
—
(1.4)
12.1
2.8
(4.0)
(1.2)
9.7
(9.5)
(1.7)
4.0
0.8
(6.4)
1.2
0.7
(0.2)
(0.2)
1.5
(0.9)
(0.3)
0.2
0.1
(0.9)
Total
£’m
19.4
13.4
(4.6)
(1.5)
26.7
(11.7)
(2.5)
4.6
0.9
(8.7)
Closing net book value
14.1
3.3
0.6
18.0
At 31 March 2019
Cost
Opening balance
Additions
Disposals
Exchange adjustment
Closing balance
Accumulated depreciation
Opening balance
Depreciation
Disposals
Exchange adjustment
Closing balance
Leasehold
improvements
Computer
equipment
Fixtures and
fittings
£’m
£’m
£’m
2.1
4.4
(0.4)
—
6.1
(1.3)
(0.4)
0.4
—
(1.3)
12.5
2.0
(1.6)
(0.8)
12.1
(10.3)
(1.5)
1.7
0.6
(9.5)
2.0
0.1
(0.8)
(0.1)
1.2
(1.5)
(0.1)
0.6
0.1
(0.9)
Total
£’m
16.6
6.5
(2.8)
(0.9)
19.4
(13.1)
(2.0)
2.7
0.7
(11.7)
Closing net book value
4.8
2.6
0.3
7.7
3
4
1
0
2
0
2
t
r
o
p
e
R
l
a
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Notes to the consolidated financial statements
9. Deferred taxation
4
4
1
Deferred tax assets arising from the following:
Accelerated capital allowances
Employee benefits
Tax loss carried forward
Capital gains tax on fair value gains
Deferred compensation payments
Prepayments
Donation
Opening balance
Deferred tax charge to profit from operations
Deferred tax charge to other comprehensive income:
Deferred tax on revaluation of pension fund asset
Deferred tax on other movements through other comprehensive income
Exchange adjustments
Closing balance
Deferred tax liabilities arising from the following:
Deferred capital allowance
Unrealised capital gain
Opening balance
Deferred tax (credit)/charge related to policyholder funds
Exchange adjustments
Closing balance
2020
£’m
0.2
10.5
—
—
14.5
(0.1)
0.1
25.2
25.3
0.9
0.4
0.1
(1.5)
25.2
0.1
5.6
5.7
15.3
(8.8)
(0.8)
5.7
2019
£’m
0.6
10.0
0.8
(0.2)
14.2
(0.1)
—
25.3
24.6
1.5
0.4
—
(1.2)
25.3
—
15.3
15.3
14.2
2.9
(1.8)
15.3
0
2
0
2
t
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R
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A
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10. Linked investments backing policyholder funds
l
a
u
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A
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i
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a
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F
i
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e
m
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S
Quoted investments at fair value
Equities
Interest-bearing stocks, debentures and other loans
Derivatives
Unquoted investments at fair value
Collective investment schemes
Mutual funds
Equities
Interest-bearing stocks, debentures and other loans
Derivatives
Cash and cash equivalents
Opening balance
Net fair value (losses)/gains on linked investments backing policyholder funds
Net acquisition of linked investments backing policyholder funds
Exchange adjustment
Closing balance
11. Investments
Non-current
Investments in unlisted investment vehicles
Current
Deferred compensation investments
Investments in pooled vehicles
2020
£’m
2019
£’m
412.3
1,429.5
(30.9)
836.9
1,760.5
—
1,810.9
2,597.4
2,886.4
1,233.9
3,396.2
1,125.4
4.5
824.2
(13.5)
242.1
4.9
907.3
(12.9)
155.4
5,177.6
5,576.3
6,988.5
8,173.7
8,173.7
8,424.2
(588.7)
655.0
159.7
592.7
(1,251.5)
(1,002.9)
6,988.5
8,173.7
2020
£’m
2019
£’m
4.8
5.3
70.6
1.7
72.3
71.2
1.2
72.4
5
4
1
0
2
0
2
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Notes to the consolidated financial statements
12. Cash and cash equivalents
Cash at bank and on hand
Money Market Funds
2020
£’m
152.0
42.5
194.5
2019
£’m
82.6
186.6
269.2
Cash balances within linked investments backing policyholder funds are not included as they are not due to the Group.
13. Share capital, other reserves and dividends
13(a) Share capital
Ordinary shares are classified as equity instruments when there is no contractual obligation to deliver cash or other
assets to another entity on terms that may be unfavourable. The value of the Group’s share capital consists of the
number of ordinary shares in issue in Ninety One plc and Ninety One Limited multiplied by their nominal value. The
comparative figures are presented as if the Demerger Transactions had occurred at the beginning of the year ended
31 March 2019.
The tables below provide details of the share capital of Ninety One plc and Ninety One Limited.
Ninety One plc
Ordinary shares of £0.0001 each, issued, allotted and fully paid1
Special shares of £0.0001 each, issued, allotted and fully paid:2
Special converting shares
UK DAS share
UK DAN share
Special voting share
Special rights share
Ninety One plc balance at 31 March 2020 and 2019
Number of
shares
622,624,622
300,089,454
1
1
1
1
Nominal value
£’m
0.1
—
—
—
—
—
0.1
On the Date of Demerger, Ninety One plc acquired the net assets of Ninety One UK Limited (previously Investec Asset
Management Limited), the former holding company of the Ninety One Business in the UK, from Investec and Forty Two
Point Two for a consideration of £915.3 million. The transfer was effected by the issue of 622,624,621 ordinary shares
by Ninety One plc, with the balance giving rise to the share premium of £732.2 million and a merger reserve of £183.0
million, being the differences between the nominal value of shares issued and the consideration of the acquired net
assets of Ninety One UK Limited. Share premium was subsequently transferred to a distributable reserve by means of the
reduction of share capital.
Number of
shares
Nominal value
£’m
Ninety One Limited
Ordinary shares with no par value, issued, allotted and fully paid1
300,089,454
441.1
Special shares with no par value, issued, allotted and fully paid:2
Special converting shares
SA DAS share
SA DAN share
Special voting share
Special rights share
Ninety One Limited balance at 31 March 2020 and 2019
622,624,622
1
1
1
1
—
—
—
—
—
441.1
6
4
1
0
2
0
2
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On the Date of Demerger, Ninety One Limited acquired the net assets of Ninety One Africa Proprietary Limited
(previously Investec Asset Management Holding Proprietary Limited), the former holding company of the Ninety One
Business in Southern Africa, from Investec and Forty Two Point Two for a consideration of £441.1 million. The transfer
was effected by the issue of 300,089,454 ordinary shares by Ninety One Limited.
7
4
1
Total ordinary shares in issue and share capital at 31 March 2020 and 2019
Number of
shares
922,714,076
Nominal value
£’m
441.2
1. All ordinary shares in issue rank pari passu and carry the same voting rights and entitlement to receive dividends and other distributions declared
or paid by the Group. Ninety One Limited is authorised to issue one billion ordinary shares with no par value.
2. Special shares will not have any rights to vote, except on a resolution either to vary the rights attached to such share or on a winding-up of
Ninety One plc or Ninety One Limited, nor any right to receive any dividend or other distribution by Ninety One plc or Ninety One Limited.
13(b) Own share reserve
The Group established the employee benefit trusts (“EBTs”) for the purpose of purchasing the Group’s shares and
satisfying the share-based payment awards granted to employees. The EBTs are funded and operated by the relevant
entity of the Group and hold shares that have not vested unconditionally to employees of the Group. The EBTs are
consolidated into the Group’s consolidated financial statements, with any Ninety One shares held by the EBTs classified
as own shares deducted from equity of the Group’s consolidated statement of financial position. These shares are
recorded at cost, and no gain or loss is recognised in the Group’s consolidated income statement on the purchase, sale,
issue or cancellation of these shares.
Movements in the own share reserve during the year were as follows:
Opening balance
Own shares purchased
Closing balance
6.4 million ordinary shares were purchased and held within the EBTs during the year.
13(c) Other reserves
The following table shows the movements in other reserves during the year:
Share
premium
Distributable
reserve
Merger
reserve
£’m
(ii)
DLC reserve
£’m
(iii)
£’m
(i)
732.2
183.0
(1,236.5)
Share-based
payment
reserve
£’m
(iv)
—
2020
£’m
—
(9.9)
(9.9)
Total
£’m
Foreign
currency
translation
reserve
£’m
(v)
(24.8)
(346.1)
1 April 2019
Exchange differences on
translating foreign
subsidiaries
Share-based payment
transactions
31 March 2020
£’m
(i)
—
—
—
—
—
—
—
—
—
—
732.2
183.0
(1,236.5)
—
(10.2)
(10.2)
4.7
4.7
—
4.7
(35.0)
(351.6)
1 April 2018
732.2
—
183.0
(1,236.5)
—
(14.9)
(336.2)
Transfer to distributable
reserve
Exchange differences
on translating foreign
subsidiaries
31 March 2019
(732.2)
732.2
—
—
—
—
—
—
—
732.2
183.0
(1,236.5)
—
—
—
—
—
(9.9)
(9.9)
(24.8)
(346.1)
0
2
0
2
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Notes to the consolidated financial statements
8
4
1
13(c) Other reserves continued
(i) Share premium and distributable reserve
The share premium amounting to £732.2 million arising from the Demerger Transactions described in note 13(a), being
the premium of shares issued by Ninety One plc to Investec plc shareholders in exchange for the 80 percent stake, plus
one share, in Ninety One UK Limited, was subsequently transferred to a distributable reserve by effecting a court
approved reduction of capital, reducing its share premium account in order to create a distributable reserve for future
distributions.
(ii) Merger reserve
The merger reserve of £183.0 million is a legally created reserve that represents the premium of shares issued by
Ninety One plc to Forty Two Point Two in exchange for its 20 percent (less one share) stake in Ninety One UK Limited.
This transaction attracted merger relief under section 612 of the Companies Act 2006.
(iii) DLC reserve
The DLC reserve of £1,236.5 million is an accounting reserve in equity to reflect the difference between the consideration
for the acquired net assets of Ninety One UK Limited and Ninety One Africa Proprietary Limited (i.e. value of shares issued
by Ninety One plc and Ninety One Limited) amounting to £1,356.4 million and the share capital and share premium of
Ninety One UK Limited and Ninety One Africa Proprietary Limited amounting to £119.9 million.
(iv) Share-based payment reserve
The share-based payment reserve of £4.7 million comprises the fair value of share awards granted which are yet to be
exercised. The amount will be reversed to the own share reserve when the related awards are forfeited or vested and
transferred to employees.
(v) Foreign currency translation reserve
The foreign currency translation reserve of £35.0 million (2019: £24.8 million) represents the exchange differences
arising from the translation of the financial statements of foreign subsidiaries.
13(d) Dividends
Dividends are distributions of profit to holders of the Group’s share capital and as a result are recognised as a deduction
in equity. Dividends are recognised only when they are paid or approved by the shareholders of the Group. The table
below shows the total dividends paid during the year.
Ordinary dividends
Prior year’s final dividend paid
Interim dividend paid
Dividend paid prior to the Demerger
Total dividends attributable to ordinary shareholders
2020
Pence per
share
2019
£’m
Pence per
share
7.0
7.0
5.8
19.8
64.7
64.6
53.8
183.1
7.4
8.2
—
15.6
£’m
68.2
75.2
—
143.4
Final and interim dividends paid for the years ended 31 March 2020 and 2019 relates to the distributions of profits prior to
the Date of Demerger. Dividend per share is calculated by dividing dividend paid by the number of shares in issue at the
Date of Demerger. The board of directors recommended no further ordinary or special dividend for financial year 2020.
0
2
0
2
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14. Policyholder investment contract liabilities
Opening balance
Investment income on linked investments backing policyholder funds
Net fair value (losses)/gains on linked investments backing policyholder funds
Investment and administration expenses
Income tax credit/(expense) - policyholders’ funds
Surplus transferred to shareholders
Net fair value change on policyholder investment contract liabilities
Contributions
Withdrawals
Exchange adjustment
15. Other liabilities
Non-current deferred compensation liabilities
Current deferred compensation liabilities
The above liabilities include applicable employer tax.
16. Trade and other payables
Employee related payables
Trade payables
Amounts payable to Investec
2020
£’m
2019
£’m
8,190.9
8,446.1
452.9
(588.7)
(27.6)
4.5
(28.3)
(187.2)
442.7
159.7
(24.9)
(6.7)
(27.1)
543.7
975.1
(722.1)
930.0
(723.5)
(1,253.9)
(1,005.4)
7,002.8
8,190.9
2020
£’m
39.3
37.6
76.9
2020
£’m
145.4
158.1
0.8
304.3
2019
£’m
44.9
32.6
77.5
2019
£’m
152.7
154.8
3.7
311.2
9
4
1
0
2
0
2
t
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Notes to the consolidated financial statements
0
5
1
0
2
0
2
t
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17. Related parties
In the ordinary course of business, the Group carries out transactions with related parties, as defined by IAS 24 Related
Party Disclosures. Apart from those disclosed elsewhere in the consolidated financial statements, material transactions
for the year are set out below:
17(a) Transactions with key management personnel
Prior to the Date of Demerger, the key management personnel are defined as the directors of Ninety One UK Limited and
Ninety One Africa Proprietary Limited, which are the former holding companies of the Ninety One Business. Certain
directors are not paid directly by the Ninety One Business but received remuneration from Investec, in respect of their
services to the larger group which included the Ninety One Business. Following the Date of Demerger, the key
management personnel are defined as the directors (both executive and non-executive) of Ninety One plc and Ninety
One Limited. Details of the compensation paid to the directors as well as their shareholdings in the Group are disclosed
in the Annual report on remuneration.
The aggregate compensation paid or payable to key management personnel for employee services is as follows:
Remuneration paid to key management personnel
Short-term employee benefits
2020
£’m
11.2
2019
£’m
8.2
17(b) Balance and transactions with Marathon Trust and Forty Two Point Two
At 31 March 2020, Ninety One employees indirectly hold an interest in the Group through the Marathon Trust (the “Trust”)
and Forty Two Point Two. The Trust owns 100 percent of Forty Two Point Two and Forty Two Point Two owns 20.35
percent of the Group. During the year ended 31 March 2020, Forty Two Point Two increased their shareholding in the
Group by 0.35 percent through purchases of shares in the market.
At 31 March 2019, Forty Two Point Two owned 20 percent (less one share) of Ninety One UK Limited and Ninety One
Africa Proprietary Limited, the former holding companies of the Ninety One business. During the year ended 31 March
2019, Forty Two Point Two made additional investment in Ninety One UK Limited and Ninety One Africa Proprietary
Limited of 2.9999 percent. The terms and conditions of the transaction were no more favourable than those available,
or which might be expected to be available on a similar transaction to non-related entities. There are no cross
guarantees between Ninety One and Forty Two Point Two.
17(c) Balances and transactions with former parent group, Investec
Investec retained significant influence over the Group by holding 25 percent of the Group’s shares, therefore Investec
remained as a related party to the Group for the year ended 31 March 2020. The Group had various transactions with
Investec and its subsidiaries, all of which were in the normal course of business. Transactions and balances are shown
as below:
Transactions with Investec
Interest income on deposit account – Investec Bank Limited 1
Administration fee expenses 2
Balances with Investec
Amounts payable to Investec
Current account with Investec Bank Limited 1
Current account with Investec Bank (Channel Islands) Limited 1
2020
£’m
0.3
11.1
2020
£’m
0.8
1.1
0.2
2019
£’m
0.4
12.8
2019
£’m
3.7
5.1
1.2
1. The current accounts with Investec Bank Limited and Investec Bank (Channel Islands) Limited earn interest at 6.7% (2019: 6.6%) and 0% (2019: 0%)
per annum respectively.
2. Prior to the Date of Demerger, Investec incurred operating expenditures (i.e. accommodation, system and information) on behalf of the Group.
Invested recharged these expenditures at cost to the Group on a monthly basis.
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17(d) Other related parties
The Group operates and participates in staff pension schemes as detailed in note 20. Transactions made between
the Group and the Group’s staff pension schemes are made in the normal course of business.
1
5
1
18. Leases
18(a) Amounts recognised in the consolidated statement of financial position
applying IFRS 16
Right-of-use assets
Office premises
Additions to the right-of-use assets during the year ended 31 March 2020 were £19.2m.
Lease liabilities
Current
Non-current
2020
£’m
90.7
2.7
98.9
101.6
The following table shows the remaining contractual maturities of the Group’s lease liabilities at the end of the current
reporting period:
Within one year
Between one and five years
Over five years
2020
Present
value of the
minimum lease
payments
Total
minimum lease
payments
£’m
2.7
20.2
78.7
101.6
£’m
2.8
35.4
90.7
128.9
18(b) Amounts recognised in the consolidated income statement applying IFRS 16
Depreciation charge of right-of-use assets
Interest expense on lease liabilities
2020
£’m
10.7
3.0
The total cash outflow for leases during the year ended 31 March 2020 was £5.7 million.
18(c) For the year ended 31 March 2019, commitments for minimum lease
payments in relation to non-cancellable operating leases were payable as follows:
Within one year
Between one and five years
Between five and ten years
2019
£’m
5.9
26.4
81.5
113.8
0
2
0
2
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Notes to the consolidated financial statements
19. Share-based payments
A summary of charges related to share-based payments (excluding employer taxes) for each share-based payment
arrangement is set out as below:
Ninety One plc LTIP and Ninety One Limited LTIP (note 19(a)(i))
Ninety One SIP (note 19(a)(ii))
Investec Share Plans (note 19(b))
Expense charged to statement of comprehensive income: Equity settled
Details of each share-based payment arrangement are presented below:
2020
£’m
4.7
—
1.2
5.9
2019
£’m
—
—
2.4
2.4
19(a) Arrangements started from the Date of Demerger and onwards
The Group established two new long-term incentive plans and a UK tax advantaged share incentive plan with effect from
the Admission Date. These are the Ninety One plc Long-Term Incentive Plan 2020 (“Ninety One plc LTIP”), Ninety One
Limited Long-Term Incentive Plan 2020 (“Ninety One Limited LTIP”) and Ninety One Share Incentive Plan 2020 (“Ninety
One SIP”) (collectively known as the “Ninety One share scheme”). Awards under the Ninety One share scheme have
been accounted for as equity-settled share-based payments. The fair value of the awards granted is recognised as an
expense over the appropriate performance and vesting period.
(i) Ninety One plc LTIP and Ninety One Limited LTIP
Employees of Ninety One plc and its subsidiaries are eligible to participate in the Ninety One plc LTIP. Employees of
Ninety One Limited and its subsidiaries are eligible to participate in the Ninety One Limited LTIP. Awards are made at the
discretion of the Group’s Human Capital and Remuneration Committee and may be granted in the form of options,
forfeitable shares or conditional awards. Awards granted under the Ninety One plc LTIP are over shares in Ninety One
plc and awards granted under the Ninety One Limited LTIP are over shares in Ninety One Limited.
The awards granted under the Ninety One plc LTIP and Ninety One Limited LTIP in the year ended 31 March 2020 took
the form of forfeitable shares or conditional awards.
Awards are granted in the following circumstances:
ɽ Listing awards - on the Admission Date, awards over approximately £2,000 worth of shares were made to all eligible
employees of selected subsidiaries of the Group as at the date of admission. These listing awards will vest after three
years;
ɽ annual bonus deferral into shares – before the Date of Demerger, the Ninety One Business operated a bonus deferral
arrangement where a portion of selected employees’ annual bonuses were deferred into investment funds managed
by the Ninety One Business. The Ninety One share scheme is intended to complement this arrangement and allow
for a portion of the annual bonus to be deferred into an award under the Ninety One plc LTIP or Ninety One Limited
LTIP. The bonus deferral awards over shares will vest after three years, in line with the vesting period of awards
deferred into investment funds; and
ɽ ad hoc awards - for strategically important employees and new hires, excluding executive directors. These awards
will vest in equal tranches on the third, fourth and fifth anniversaries of the grant.
Outstanding at start of the year
Granted during the year
Outstanding at end of the year
2020
Number of
ordinary
shares
—
5,631,288
5,631,288
The weighted average fair value of shares granted under these plans is £1.531. Fair value is equal to the market value of
the shares at the date of grant.
2
5
1
0
2
0
2
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(ii) Ninety One SIP
The Ninety One SIP is an all-employee share plan. Free share awards (over approximately £2,000 worth of shares in
Ninety One plc) were made under the Ninety One SIP. All eligible UK employees on the Admission Date received their
listing awards (as described in 19(a)(i)) as free share awards under the Ninety One SIP. The Ninety One SIP may be used
as an employee share purchase plan in the future. The free share awards granted in the year ended 31 March 2020
will be subject to a three-year holding period starting from the grant date.
3
5
1
Outstanding at start of the year
Granted during the year
Outstanding at end of the year
2020
Number of
ordinary
shares
—
594,900
594,900
The charge for the Ninety One SIP during the year amounted to £13,000. The weighted average fair value of shares
granted under this plans is £1.512. Fair value is equal to the market value of the shares at the date of grant.
19(b) Arrangements existing before the Date of Demerger
(i) Investec Share Plans – Investec Ordinary Shares
Investec operates a share option scheme involving share options in Investec Limited and Investec plc (the “Investec
Share Plans”). The Investec Share Plans, which are on an equity-settled basis, allow the Group’s employees to acquire
shares of Investec Limited and Investec plc (“Investec Ordinary Shares”) prior to the Date of Demerger. Following the
Date of Demerger, share awards outstanding at the Date of Demerger under the Investec Share Plans, continue on their
vesting schedule, modified such that the awards are over a combination of Investec Ordinary Shares and ordinary
shares of the Group (“Ninety One Ordinary Shares”), in the same ratio as received by the holders of Investec Ordinary
Shares on the Admission Date. As a result of this arrangement, the obligation of settling both Investec Ordinary Shares
and ordinary shares of the Group remains with Investec. Investec continues to recharge the expenses arising from these
share-based payments related to the Group’s employees until all the options are vested. As the changes to the Investec
Share Plans are not beneficial to the employees of the Group, these changes do not result in the accounting for
modification to the share-based payments arrangement under IFRS 2. Awards over Ninety One Ordinary shares continue
to be accounted for as equity-settled share-based payments within the scope of IFRS 2. Awards over Investec Ordinary
Shares are accounted for as employee benefits within the scope of IAS 19 Employee Benefits. The following summarises
the details of the awards under Investec Share Plans.
The number and weighted average exercise price for options outstanding during the year are as follows:
UK Schemes
South African Schemes
2020
2019
2020
2019
Weighted
average
exercise
price
£
Weighted
average
exercise
price
£
Weighted
average
exercise
price
R
Number
of share
options
Number
of share
options
Number
of share
options
Number
of share
options
Outstanding at start of the year
308,274
0.13
320,229
0.24
803,416
—
1,184,359
Relocation of employees
during the year
Granted during the year
Exercised during the year
—
890,471
(61,074)
—
—
1,068
113,560
—
—
(9,236)
—
—
—
10,396
115,722
— (106,753)
0.23
(176,353)
— (456,346)
Lapsed during the year
(32,902)
0.51
(19,830)
0.76
(30,333)
—
(50,715)
Outstanding at the end
of the year
1,104,769
0.01
308,274
0.13
587,494
— 803,416
Exercisable at end of year
3,956
—
4,860
—
10,978
—
14,508
Weighted
average
exercise
price
R
—
—
—
—
—
—
—
0
2
0
2
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Notes to the consolidated financial statements
4
5
1
19(b) Arrangements existing before the Date of Demerger continued
(i) Investec Share Plans – Investec Ordinary Shares continued
The exercise price range and weighted average remaining contractual life for share options outstanding at the year end
were as follows:
Exercise price range
Weighted average remaining contractual life (years)
UK Schemes
South African Schemes
2020
2019
£0 - 4.18
£0 - 5.87
4.16
2.21
2020
R —
1.54
2019
R —
2.15
The fair value of share options at grant date, granted in the year are £2.8 million (2019: £1.2 million). The fair values of
shares options granted were calculated at market price of the shares; additional information relating to options was
as follows:
Share price at date of grant
Exercise price
Option life (years)
UK Schemes
2020
£4.38 - £4.79
£0
7 - 7.25
2019
£5.59
£0
4.75
South African Schemes
2020
n/a
n/a
n/a
2019
R90.96 - R92.55
R —
4.75
(ii) Investec Share Plans – Ninety One Ordinary Shares
The movement for numbers of options outstanding to acquire Ninety One Ordinary Shares and the weighted average
exercise prices during the year are as follows:
UK Schemes
South African Schemes
2020
2020
Ninety One share awards issued at the Date of Demerger
Exercised during the year
Outstanding at the end of the year
Weighted
average
exercise
price
£
Number
of share
options
Number
of share
options
553,397
0.01
297,347
(1,258)
—
(3,557)
552,139
0.01
293,790
Exercisable at end of year
1,717
—
5,502
Weighted
average
exercise
price
R
—
—
—
—
The exercise price range and weighted average remaining contractual life for share options outstanding at the year end
were as follows:
Exercise price range
Weighted average remaining contractual life (years)
20. Pension schemes
UK Schemes
South African Schemes
2020
£0 - £3.39
4.16
2020
R —
1.54
20(a) Defined benefit schemes
The Group participates in the Investec Asset Management Pension Scheme (the “Scheme”), which is a closed defined
benefit scheme. The Scheme is a registered defined benefit final salary scheme subject to the UK regulatory framework
for pensions and is administered by its trustees with their assets held separately from those of the Group. The trustees
are required by the Trust Deed to act in the best interest of the scheme participants. The Scheme was funded by
contributions from the Group in accordance with an independent actuary’s recommendation based on actuarial
valuations. The latest independent actuarial valuations of the Scheme were at 31 March 2020 by qualified independent
actuaries. There is no restriction to the amount of surplus that can be recognised, as the Group has the right to a refund
of the surpluses assuming the gradual settlement of the Scheme over time until all members have left the Scheme.
The Scheme exposes the Group to actuarial risks, such as interest rate risk, investment risk and longevity risk.
0
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The pension fund (obligation)/asset in respect of the Scheme is as follows:
Investec Diversified Growth Fund
Investec Cautious Managed Fund
Trustees’ bank account
Total fair value of plan assets
Present value of obligation
2020
£’m
7.4
6.9
0.1
14.4
(16.2)
2019
£’m
8.9
8.7
0.2
17.8
(17.6)
Pension fund (obligation)/asset recognised in the consolidated statement
of financial position
(1.8)
0.2
The Investec Diversified Growth Fund and Investec Cautious Managed Fund are managed funds which invest primarily
in a globally diversified portfolio of assets, mainly consisting of global equities, bonds issued by governments, physical
gold and silver bullion and money market instruments. The funds are quoted in an active market and their underlying
investments are either level 1 or level 2 investments.
Movements in plan assets:
Plan assets at the beginning of the year
Benefits paid including expenses
Interest income
Return on plan assets, excluding interest income
Plan assets at the end of the year
Movements in the present value of the defined benefit obligation:
Obligations at the beginning of the year
Actuarial gains arising from changes in demographic
Actuarial (gains)/losses arising from changes in financial assumptions
Benefits paid including expenses
Interest cost
Administration costs
Obligations at the end of the year
Amounts recognised in the consolidated statement of comprehensive income are as follows:
Net interest on net defined benefit asset/obligation
Actuarial gains/(losses)
Return on plan assets, excluding interest income
Total defined benefit costs
The major assumptions used were:
Inflation assumption
Rate of increase in pensions in payment for post 1997 service
Rate of increase in pensionable salaries
Discount rate
2020
£’m
17.8
(1.3)
0.4
(2.5)
14.4
17.6
—
(0.6)
(1.3)
0.4
0.1
16.2
—
0.7
(2.5)
(1.8)
2019
£’m
18.7
(0.6)
0.5
(0.8)
17.8
16.1
(0.3)
1.9
(0.6)
0.4
0.1
17.6
0.1
(1.6)
(0.8)
(2.3)
2020
2019
%
2.6
2.6
2.6
2.3
%
3.3
3.2
3.3
2.4
The defined benefit obligations are not expected to be materially different as a result of a 0.25% change in the above
major assumptions. This sensitivity assessment is based on the assumption that changes in actuarial assumptions are
not correlated and therefore it does not take into account the correlations between the actuarial assumptions.
5
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Notes to the consolidated financial statements
6
5
1
21. Financial risk management and fair values
of financial instruments
The Group has exposure to credit and liquidity risk which arises in the normal course of the business. The Group is also
exposed to market risk arising from its financial instruments.
This note presents information about the Group’s exposure to each of the above risks and the objectives, policies and
processes for measuring and managing risk.
The board of directors of the Group has overall responsibility for the establishment and oversight of the Group’s risk
management framework. The Management Risk Committee, which is responsible for developing and monitoring the
Group’s risk management policies, reports quarterly to the board of directors on its activities.
The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set
appropriate risk limits and controls, and to monitor risks and adherence to limits. The Management Risk Committee
meets once every two months and risk management policies and systems are reviewed regularly to reflect changes
in market conditions and the Group’s business activities.
The Ninety One Audit and Risk Committee oversees how management monitors compliance with the Group’s risk
management policies and procedures and reviews the adequacy of the risk management framework in relation to
the risks faced by the Group. The Ninety One Audit and Risk Committee receives updates from the Internal Audit Team,
the Management Risk Committee and the Management Audit Committee. Material risks are appropriately escalated to the
Ninety One Audit and Risk Committee, and all levels of risk are regularly and formally evaluated. The Management Risk
Committee oversees how management monitors compliance with the risk management policies and procedures and
reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The Management
Audit Committee reviews and oversees financial, audit and tax-related matters. The Internal Audit Team undertakes both
regular and ad hoc reviews of the governance framework, risk management and control environment, the results of which
are reported to the Management Audit Committee, as well as the Ninety One Audit and Risk Committee.
In preparation for the UK leaving the European Union, the Group established a Brexit Steering Committee made up
of various stakeholders whose objective was to identify and implement plans to mitigate any risks arising from Brexit.
Having undertaken a review of the potential impact of Brexit to the Group it was concluded that there will be a minimal
impact to the Group as a direct result of Brexit. Where there are regulatory impacts such as authorisation to conduct
business in Europe, the Group has taken measures to resolve these, which include the establishment of branch operations
in Luxembourg. There may be indirect outcomes such as currency movements that come about as a result of Brexit,
however these are difficult to predict.
21(a) Policyholders’ assets and liabilities
The Group has no credit or market risk related to policyholders’ investments and trade and other receivables as they are
matched by the liability that the Group has to its policyholders for the value of these assets. Therefore, the credit and
market risk disclosure in the remainder of this note only deals with the financial risks related to non-policyholder financial
assets and liabilities.
21(b) Credit risk
Credit risk is the risk of financial loss to the Group if a client or counterparty to a financial instrument fails to meet its
contractual obligations and arises principally from the Group’s trade receivables. The Group’s credit risk arising from cash
and cash equivalents is limited because the counterparties are reputable banks or financial institutions with a minimum
credit rating of Ba1 or BB assigned by Moody’s and S&P respectively, which the management of the Group considers to
have low credit risk. The maximum exposure to credit risk is represented by the carrying value of trade receivables and
cash and cash equivalents. The Group has no significant concentrations of credit risk with respect to trade receivables
as the client bases are widely dispersed in different sectors and industries. Aging of trade receivables at year end was:
Less than 30 days
Between 30 and 90 days
More than 90 days
2020
£’m
104.6
5.1
0.4
110.1
2019
£’m
97.3
4.4
0.1
101.8
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Outstanding balances are aged monthly and long outstanding balances are actively followed up.
The Group applies the IFRS 9 simplified approach to measuring ECLs for trade receivables at an amount equal to lifetime
ECLs. The ECLs on trade receivables are determined by grouping together trade receivables with similar credit risk
characteristics and collectively assessing them for likelihood of recovery, taking into account prevailing economic
conditions. While cash and cash equivalents are also subject to the impairment requirement of IFRS 9, the identified
impairment loss was immaterial.
7
5
1
Expected loss rates are based on the payment profiles of trade receivables over the preceding ten years and the
corresponding historical credit losses experienced within this period. These rates are adjusted to reflect differences
between economic conditions during the period over which the historic data has been collected, current conditions
and the Group’s view of economic conditions over the expected lives of the receivables.
The ECLs are considered insignificant as the results of the assessment showed an insignificant impact, therefore no loss
allowance has been provided for the years ended 31 March 2020 and 2019.
The Group considers a trade receivable to be credit impaired when one or more detrimental events have occurred, such
as significant financial difficulty of the client or it becoming probable that the client will enter bankruptcy or other
financial reorganisation.
Trade receivables are written off when they are considered credit impaired or there is no reasonable expectation of
recovery. Indicators that there is no reasonable expectation of recovery include, among others, the failure of a debtor to
engage in a repayment plan with the Group after the contractual payment has been past due. The Group has not written
off any trade receivables for the years ended 31 March 2020 and 2019.
21(c) Liquidity risk
Liquidity risk is the risk that the Group cannot meet its financial obligations as they fall due. The Group’s approach to
managing liquidity is to maintain sufficient liquidity to cover any cash flow funding, meeting obligations as they fall due
and maintaining solvency. The Group holds sufficient liquid funds to cover its needs in the normal course of business.
The maximum exposure to liquidity risk is represented by current financial liabilities. All amounts are unsecured and
interest free. With the exception of lease liabilities, current financial liabilities are contractually due within one year or
repayable on demand. The remaining contractual maturity of lease liabilities is disclosed in note 18.
21(d) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will
affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management
is to manage and control market risk exposures within acceptable parameters.
(i) Currency risk
The Group is exposed to currency risk in the ordinary course of business on portions of its trade receivables, cash and
cash equivalents and trade payables. Foreign currency exchange rate fluctuations may create unpredictable earnings
and cash flow volatility. Entities within the Group conducting business with international counterparties that leads to
future cash flows denominated in a currency other than their functional currencies are exposed to the risk from changes
in foreign currency exchange rates. Outstanding amounts are regularly monitored and settled to mitigate currency
exposures. The risk is also mitigated by, as far as possible, closing all types of business transactions mainly in the
functional currency.
Effects of foreign currency translation
The financial statements of those entities located outside of the United Kingdom are translated into GBP for the
preparation of the financial statements of the Group. Investments in foreign-based operations are permanent and that
reinvestment is continuous. Effects from foreign currency exchange rate fluctuations on the translation of net asset
amounts into GBP are reflected in the equity position.
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Notes to the consolidated financial statements
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21(d) Market risk continued
Cash flow sensitivity analysis
At the year ended 31 March 2020, if the functional currencies of respective foreign entities had strengthened by 10%,
profit before tax of the Group would have decreased by £1.1 million (2019: £1.1 million). A 10% weakening would have had
the equal but opposite effect. Results of the analysis represent an aggregation of the instantaneous effects on each of
the entities’ profit before tax. Differences from the translation of the financial statements of foreign operations into the
Group’s presentation currency are excluded.
(ii) Interest rate risk
The Group adopts a policy of ensuring that its exposure to changes in interest rates is on a floating rate basis as virtually
all such exposures are short-term in nature. At the year end, the Group’s only interest-bearing financial instruments were
cash and cash equivalents and loan receivable from a staff share scheme trust, which are variable rate instruments. This
was also the case at the previous year ends.
Cash flow sensitivity analysis
An increase of 10 basis points in interest rates at the year ended 31 March 2020 would have increased profit before tax
by: £ 0.2 million (2019: £ 0.3 million). A decrease of 10 basis points in interest rates at year end would have had the equal
but opposite effect. This assumes that all other variables remain constant and the year-end balance has been constant
throughout the year. The analysis is performed on the same basis for the prior year.
(iii) Price risk
The financial instruments of the Group subject to price risk are its deferred compensation investments, investment in unit
trusts which are seed capital investments and the investment in unlisted investment vehicles. As the Group’s deferred
compensation investments are matched by the liability the Group has to its employees for the value of these investments,
there is no impact to the statement of comprehensive income for changes in the values of these investments. Price risk
on seed capital investments is not deemed to be significant as the holdings in the investments are small. The investments
in unlisted investment vehicles are unquoted investments, changes in market conditions will not directly affect the profit
or loss for the year.
21(e) Capital management
The capital of the Group is considered to be its share capital and reserves. The Group’s objectives and policies are to
retain sufficient capital on hand to meet the external minimum capital requirements of the Financial Conduct Authority
(“FCA”) in the UK, the Financial Sector Conduct Authority (“FSCA”) in South Africa and certain overseas financial
regulators and to safeguard the Group’s ability to continues as a going concern. All regulated entities within the
Group complied with the externally imposed regulatory capital requirements. Through our internal capital adequacy
assessment processes and in conjunction with the board of directors, management assess the capital requirements to
ensure that the Group holds sufficient capital to mitigate the financial impact of any key risks materialising. There were no
changes in the approach to capital management during the year.
21(f) Fair value measurements
The fair values of all financial instruments are substantially similar to carrying values reflected in the statement of financial
position as they are short-term in nature, subject to variable, market-related interest rates or stated at fair value in the
statement of financial position. The Group measures fair values using the following fair value hierarchy that reflects
the significance of the inputs used in making the measurements:
Level 1: Quoted market price (unadjusted) in an active market for an identical instrument.
Level 2: Valuation techniques based on observable inputs, either directly (i.e. as prices) or indirectly (i.e. derived from
prices). The category includes instruments valued using quoted market prices in active markets for similar
instruments, quoted prices for identical or similar instruments in markets that are considered less than active
or other valuation techniques where all significant inputs are directly or indirectly observable from market data.
Level 3: Valuation techniques where one or more significant inputs are unobservable.
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The table below analyses financial instruments measured at fair value at the end of the reporting period by the level in
the fair value hierarchy into which the fair value measurement is categorised:
At 31 March 2020
Deferred compensation investments
Investments in pooled vehicles
Unlisted investment vehicle
Investments backing policyholder funds
Policyholder investment contract liabilities
At 31 March 2019
Deferred compensation investments
Investments in pooled vehicles
Unlisted investment vehicle
Investments backing policyholder funds
Policyholder investment contract liabilities
Notes
11
11
11
10
14
11
11
11
10
14
Level 1
£’m
70.6
1.7
—
Level 2
£’m
Level 3
£’m
—
—
—
—
—
4.8
Total
£’m
70.6
1.7
4.8
1,810.9
5,137.3
40.3
6,988.5
(1,810.9)
(5,151.6)
(40.3)
(7,002.8)
72.3
(14.3)
4.8
62.8
71.2
1.2
—
—
—
—
2,597.4
5,568.8
(2,597.4)
(5,586.0)
72.4
(17.2)
—
—
5.3
7.5
(7.5)
5.3
71.2
1.2
5.3
8,173.7
(8,190.9)
60.5
During the years ended 2020 and 2019, there were no transfers between level 1 and level 2, or transfers into or out of
level 3. The Group’s policy is to recognise transfers between levels of fair value hierarchy as at the end of the reporting
period in which they occur. Carrying amounts of the financial assets and financial liabilities measured at amortised cost
approximate fair value.
(i) Information about level 3 fair value measurements
Unlisted investment vehicles represent the Group’s investment in Investec Africa Private Equity Fund 2 GP LP and
investment in Growthpoint Investec African Properties Limited. The input used in measuring its fair value is the audited
net asset value of the underlying investment which is calculated by the General Partner.
Investments backing policyholder funds/policyholder investment contract liabilities include derivatives that are not
actively traded and where the principal input in their valuation (i.e. credit spreads) is unobservable. Accordingly, an
alternative valuation methodology has been applied being either an EBITDA multiple or expected cost recovery.
A sensitivity analysis has not been presented as the “stressing” of the significant unobservable inputs applied in the
valuation does not have a material impact on the consolidated financial statements.
The movements during the year in the balance of the level 3 fair value measurements are as follows:
Opening balance
Purchase of investments
Unrealised (loss)/gain on investments
Closing balance
2020
£’m
5.3
2.8
(3.3)
4.8
2019
£’m
4.0
1.0
0.3
5.3
9
5
1
0
2
0
2
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Notes to the consolidated financial statements
22. Notes to the consolidated statement of cash flows
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22(a) Reconciliation of cash flows from operations
Profit before tax
Adjusted for:
Net loss/(gain) on investments
Depreciation of property and equipment
Depreciation of right-of-use assets
Net interest income
Net loss of pension fund
Net fair value losses/(gains) on linked investments backing policyholder funds
Net fair value change on policyholder investment contract liabilities
Net contribution received from policyholders
Gain on disposal of subsidiary
Share of profit from associate
Share-based payments amortisations related to Ninety One share scheme
Working capital changes:
Trade and other receivables
Trade and other payables
Deferred income
Other liabilities
Cash flows from operations
Notes
8
18(b)
4
10
14
2020
£’m
198.5
4.2
2.5
10.7
(1.7)
0.1
588.7
(187.2)
253.0
—
(0.2)
4.7
(5.0)
(3.6)
(0.2)
(0.6)
2019
£’m
178.4
(5.1)
2.0
—
(5.7)
0.1
(159.7)
543.7
206.5
(0.5)
—
—
(21.4)
29.2
—
0.7
863.9
768.2
Refer to the Annexure to the consolidated financial statements for the split of shareholder and policyholder cash flows.
22(b) Reconciliation of liabilities arising from financing activities
The table below details changes in the Group’s liabilities from financing activities, including both cash and non-cash
changes. Liabilities arising from financing activities are liabilities for which cash flows were, or future cash flows will be,
classified in the consolidated statement of cash flows as cash flows from financing activities.
At 31 March 2019
Impact on initial application of IFRS 16
Changes from financing cash flows:
Payment of lease liabilities
Other changes:
Net change in lease liabilities from entering into new leases
Interest expense
Exchange adjustments
At 31 March 2020
0
2
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Lease liabilities
£’m
—
88.6
(5.7)
16.2
3.0
19.2
(0.5)
101.6
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23. Commitments
The Group has a USD 20.0 million private equity investment commitment to the Investec Africa Frontier Private Equity
Associate Fund L.P. of which USD 18.2 million (2019: USD 18.2 million) has been paid, and USD 7.6 million (equivalent to
£6.2 million) remains receivable as at 31 March 2020 and is included in non-current other receivables. The Group also
has a USD 10.5 million (2019: USD 10.5 million) private equity investment commitment to the Investec Africa Private Equity
Fund 2 GP L.P. of which USD 7.0 million (2019: USD 7.0 million) has been paid as at 31 March 2020. This amount has been
classified as a non-current investment.
24. Interests in unconsolidated structured entities
The Group has concluded that the mutual funds and investment trusts managed by the Group are structured entities.
The table below describes the types of structured entities that the Group does not consolidate but in which it holds
an interest.
Type of structured entity
Nature and purpose
Interest held by the Group
Mutual funds and
investment trusts
To manage assets on behalf of investors and
generate fees for the investment manager.
i) Shares or units issued by the funds or trusts
ii) Management fee and performance fee
These vehicles are financed through the issue
of shares or units to investors.
The table below sets out interests held by the Group in unconsolidated structured entities. The maximum exposure
to loss is the carrying amount of the seed capital, holdings in money market funds and management fee receivables.
At 31 March 2020
At 31 March 2019
Number
of funds
145
146
AUM of
the funds
£’bn
54
58
Carrying amount
included in the
statement of
financial position
Investment
management
and performance
fees for the year
Management/
performance
fees receivable
as at year end
£’m
44.2
187.9
£’m
414.0
376.7
£’m
38.8
34.1
During the years ended 2020 and 2019, the Group did not provide financial support to unconsolidated structured entities and has
no intention of providing financial or other support.
25. Events after the reporting date
The consolidated financial statements reflect the impact of the COVID-19 pandemic up to the end of the reporting
period. In the second quarter of 2020, the ongoing COVID-19 pandemic has led to disruption to business and economic
activity, which has been reflected in recent fluctuations in global stock markets. The Group considers the continued
spread of COVID-19 to be a non-adjusting post balance sheet event. The board of directors has considered the impact
of COVID-19 by applying various stressed scenarios, including plausible downside assumptions, about the impact on
assets under management, profitability of the Group and known commitments. All scenarios show that the Group
would continue to operate profitably for a period of at least 12 months from the date of the release of these results.
1
6
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Notes to the consolidated financial statements
26. Subsidiaries and other related undertakings
The Group operates globally, which results in the Group having a corporate structure consisting of a number of
related undertakings, comprising subsidiaries and associates. All subsidiaries have been consolidated in the Group's
financial statements. There are no restrictions or changes in ownership of the subsidiaries. The Group’s related
undertakings along with the place of incorporation, the registered address, the classes of shares held and the effective
percentage of equity owned at 31 March 2020 are disclosed below.
The addresses of the registered offices of Ninety One plc and Ninety One Limited are 55 Gresham Street, London,
EC2V 7EL, United Kingdom and 36 Hans Strijdom Avenue, Cape Town, 8001, South Africa respectively.
Company name
Principal subsidiaries and associates held by Ninety One plc
United Kingdom
Registered office: 55 Gresham Street, London, EC2V 7EL
Ninety One Global Limited 1
Ninety One International Limited
Ninety One UK Limited (previously Investec Asset Management Limited)
Registered office: 25 Basinghall Street, London, EC2V 5HA
Investec Fund Managers Limited 4
Guernsey
Registered office: First Floor, Dorey Court, Elizabeth Avenue, St. Peter Port, GY1 2HT
Investec Asset Management Guernsey Limited 4
Growthpoint Investec African Property Management Limited 3, 4
Investec Africa Frontier Private Equity Fund GP Limited 4
Investec Africa Private Equity Fund 2 GP Limited 4
Growthpoint Investec African Properties Co-Invest GP Limited 4
Growthpoint Investec African Properties Co-Invest LP 4
GIAP Manco Empowerment Limited3
Luxembourg
Registered office: 2-4 Avenue Marie-Thérèse, L-2132
Ninety One Luxembourg S.A. (previously Investec Asset Management Luxembourg S.A.)
Ninety One Africa Credit Opportunities Fund 2 GP S.à r.l.
(previously Investec Africa Credit Opportunities Fund 2 GP S.à r.l.)
Switzerland
Registered office: Seefeldstrasse 69, 8008 Zurich
Share class
Equity interest
in %
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Limited
partnership
Ordinary
Ordinary
Ordinary
100
100
100
100
100
47
100
100
100
100
50
100
100
Ninety One Switzerland GmbH (previously Investec Asset Management Switzerland GmbH)
Ordinary
100
United States of America
Registered office: 2711 Centerville Road, Suite 400, Wilmington, 19808, New Castle
Ninety One North America, Inc. (previously Investec Asset Management North America, Inc.)
Ordinary
100
Australia
Registered office: Level 28 Suite 3, Chifley Tower, 2 Chifley Square, Sydney, NSW 2000
Ninety One Australia Pty Limited (previously Investec Asset Management Australia Pty Limited)
Ordinary
100
Hong Kong
Registered office: Suite 3609-14, 36/F, Two International Finance Centre, 8 Finance Street,
Central
Ninety One Hong Kong Limited (previously Investec Asset Management Hong Kong Limited)
Ordinary
100
Singapore
Registered office: 8 Wilkie Road, #03-01 Wilkie Edge, Singapore 228095
Ninety One Singapore Pte. Limited (previously Investec Asset Management Singapore Pte. Limited)
Ordinary
100
2
6
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Company name
Principal subsidiaries and associates held by Ninety One Limited
South Africa
Registered office: 36 Hans Strijdom Avenue, Cape Town, 8001
Ninety One Africa Proprietary Limited2 (previously Investec Asset Management Holdings Proprietary
Limited)
Ninety One Alternative Investments GP Proprietary Limited (previously Investec Alternative
Investments GP Proprietary Limited)
Ninety One SA Proprietary Limited (previously Investec Asset Management Proprietary Limited)
Ninety One Fund Managers SA (RF) Proprietary Limited (previously Investec Fund Managers SA (RF)
Proprietary Limited)
Investec Assurance Limited 4
Ninety One Investment Platform Proprietary Limited (previously Investec Investment Management
Services Proprietary Limited)
Silica Holdings Proprietary Limited
Silica Financial Administration Solutions Proprietary Limited
Silica Administration Services Proprietary Limited
Silica Software Solutions Proprietary Limited
Silica Nominees Proprietary Limited
Grayston Nominees Proprietary Limited
Namibia
Registered office: 24 Orban Street, Klein Windhoek, Windhoek
Ninety One Asset Management Namibia (Proprietary) Limited (previously Investec Asset Management
Namibia (Proprietary) Limited)
Ninety One Fund Managers Namibia Limited (previously Investec Fund Managers Namibia Limited)
Botswana
Registered office: Plot 465, Mathangwane Road, Extension 4, Gaborone
Ninety One Botswana Proprietary Limited (previously Investec Asset Management Botswana
(Proprietary) Limited)
Ninety One Fund Managers Botswana Proprietary Limited (previously Investec Fund Managers
Botswana (Proprietary) Limited)
1. Directly held by Ninety One plc.
2. Directly held by Ninety One Limited.
3. This is an associate to the Group for the financial year ended 2020.
4. Company names have subsequently changed before the date of approval of the annual financial statements.
Share class
Equity interest
in %
3
6
1
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
100
100
100
100
100
100
100
100
100
100
100
100
85
85
70
70
0
2
0
2
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Annexure to the consolidated financial statements
Consolidated statement
of financial position (including policyholder figures)
2020
2019
Policyholders
Shareholders
Total
Policyholders
Shareholders
£’m
£’m
£’m
£’m
£’m
Assets
Investments
Investment in associate
Property and equipment
Right-of-use assets
Deferred tax assets
Other receivable
Pension fund asset
Total non-current assets
Investments
Linked investments backing
policyholder funds
Income tax recoverable
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Liabilities
Other liabilities
Lease liabilities
Pension fund obligation
Deferred tax liabilities
Total non-current liabilities
—
—
—
—
—
—
—
—
—
4.8
0.3
18.0
90.7
25.2
6.2
—
4.8
0.3
18.0
90.7
25.2
6.2
—
145.2
145.2
72.3
72.3
—
—
—
—
—
—
—
—
—
6,988.5
0.1
67.2
—
—
4.3
179.2
194.5
6,988.5
8,173.7
4.4
246.4
194.5
—
60.3
—
7,055.8
450.3
7,506.1
8,234.0
—
—
—
5.6
5.6
39.3
98.9
1.8
0.1
140.1
39.3
98.9
1.8
5.7
145.7
—
—
—
15.3
15.3
7,055.8
595.5
7,651.3
8,234.0
568.6
8,802.6
Total
£’m
5.3
—
7.7
—
25.3
5.8
0.2
44.3
5.3
—
7.7
—
25.3
5.8
0.2
44.3
72.4
72.4
—
1.2
181.5
269.2
524.3
8,173.7
1.2
241.8
269.2
8,758.3
44.9
44.9
—
—
—
44.9
—
32.6
—
283.5
0.2
11.7
—
—
15.3
60.2
8,190.9
32.6
—
311.2
0.2
11.8
Policyholder investment contract liabilities
7,002.8
—
7,002.8
8,190.9
Other liabilities
Lease liabilities
Trade and other payables
Deferred income
Income tax payable
—
—
37.6
2.7
37.6
2.7
47.4
256.9
304.3
—
—
—
7.1
—
7.1
—
—
27.7
—
0.1
Total current liabilities
7,050.2
304.3
7,354.5
8,218.7
328.0
8,546.7
Equity
Share capital
Own share reserve
Other reserves
Retained earnings
Shareholders’ equity excluding
non-controlling interests
Non-controlling interests
Total equity
—
—
—
—
—
—
—
441.2
(9.9)
(351.6)
71.0
150.7
0.4
151.1
441.2
(9.9)
(351.6)
71.0
150.7
0.4
151.1
—
—
—
—
—
—
—
441.2
—
(346.1)
100.0
195.1
0.6
195.7
441.2
—
(346.1)
100.0
195.1
0.6
195.7
Total equity and liabilities
7,055.8
595.5
7,651.3
8,234.0
568.6
8,802.6
4
6
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2
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Consolidated statement
of cash flows (including policyholder figures)
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2020
2019
Policyholders
Shareholders
Total
Policyholders
Shareholders
£’m
£’m
£’m
£’m
£’m
Total
£’m
5
6
1
—
198.5
198.5
—
178.4
178.4
Cash flows from operating activities
Profit before tax
Adjusted for:
Net loss/(gain) on investments
Depreciation of property and equipment
Depreciation of right-of-use assets
Net interest income
Net loss of pension fund
Net fair value losses/(gains) on linked
investments backing policyholder funds
Net fair value change on policyholder
investment contract liabilities
Net contribution received from
policyholders
Gain on disposal of subsidiary
Share of profit from associate
Share-based payments amortisations
related to Ninety One share scheme
Working capital changes:
Trade and other receivables
Trade and other payables
Deferred income
Other liabilities
Cash flows from operations
Interest received
Interest paid
Income tax paid
—
—
—
—
—
588.7
(187.2)
253.0
—
—
—
(6.8)
19.8
—
—
667.5
—
—
—
Net cash flows from operating activities
667.5
Cash flows from investing activities
Net (acquisition)/disposal of investments
Additions to property and equipment
Proceeds from disposal of subsidiary
Net acquisition of linked investments
backing policyholder funds
Net cash flows from investing activities
—
—
—
(655.0)
(655.0)
4.7
4.7
4.2
2.5
10.7
(1.7)
0.1
—
—
—
—
(0.2)
1.8
(23.4)
(0.2)
(0.6)
196.4
4.8
(0.7)
(54.4)
146.1
(3.6)
(13.4)
—
—
(17.0)
4.2
2.5
10.7
(1.7)
0.1
—
—
—
—
—
588.7
(159.7)
(187.2)
543.7
253.0
206.5
—
(0.2)
(5.0)
(3.6)
(0.2)
(0.6)
863.9
4.8
(0.7)
(54.4)
813.6
(3.6)
(13.4)
—
—
—
—
11.3
(5.3)
—
—
596.5
—
—
—
596.5
—
—
—
(655.0)
(672.0)
(592.7)
(592.7)
(5.1)
2.0
—
(5.7)
0.1
—
—
—
(0.5)
—
(5.1)
2.0
—
(5.7)
0.1
(159.7)
543.7
206.5
(0.5)
—
—
—
(32.7)
34.5
—
0.7
171.7
5.7
—
(64.5)
112.9
3.4
(6.5)
1.8
—
(1.3)
—
—
(143.9)
(143.9)
(21.4)
29.2
—
0.7
768.2
5.7
—
(64.5)
709.4
3.4
(6.5)
1.8
(592.7)
(594.0)
—
—
(143.9)
(143.9)
Cash flows from financing activities
Payment of lease liabilities
Purchase of own shares by EBTs
Dividends paid
Net cash flows from financing activities
—
—
—
—
(5.7)
(9.9)
(183.9)
(199.5)
(5.7)
(9.9)
(183.9)
(199.5)
—
—
—
—
Effect of foreign exchange rate changes
(12.5)
(4.3)
(16.8)
(3.8)
(6.8)
(10.6)
Net change in cash and cash
equivalents
Cash and cash equivalents at beginning
of year
Cash and cash equivalents at end
of year
—
—
—
(74.7)
(74.7)
269.2
269.2
194.5
194.5
—
—
—
(39.1)
(39.1)
308.3
308.3
269.2
269.2
0
2
0
2
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Ninety One plc Company Financial Statements
Statement of financial position
At 31 March 2020
6
6
1
Assets
Non-current assets
Investment in subsidiary undertakings
Current assets
Amounts receivable from subsidiary undertakings
Total assets
Liabilities
Current liabilities
Trade and other payables
Loan payable to subsidiary undertakings
Total liabilities
Equity
Share capital
Own share reserve
Other reserves
Total equity
Total equity and liabilities
Notes
2020
£’m
27
915.3
29
4.2
919.5
29
28(a)
28(b)
28(c)
0.2
7.1
7.3
0.1
(7.0)
919.1
912.2
919.5
The financial statements of Ninety One plc (registered number 12245293) were approved by the Board on 3 July 2020
and signed on its behalf by:
Hendrik du Toit
Chief Executive Officer
Kim McFarland
Finance Director
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2
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2
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Statement of changes in equity
For the period from 4 October 2019 to 31 March 2020
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At the Date of Incorporation
Transactions with shareholders
of the Company
Issue of share capital
Redemption of preference shares
Share-based payment transactions
Own shares purchased
Total transactions with
shareholders of the Company
At 31 March 2020
Notes
28(a)
28(a), (c )
28(a)
28(c)
28(b)
Share capital
£’m
—
0.1
—
—
—
0.1
0.1
Redeemable
preference
shares
£’m
0.1
Own share
reserve
Total other
reserves
Total equity
£’m
—
£’m
—
£’m
0.1
7
6
1
—
(0.1)
—
—
—
—
—
(7.0)
915.2
915.3
—
3.9
—
(0.1)
3.9
(7.0)
(0.1)
(7.0)
919.1
912.1
—
(7.0)
919.1
912.2
0
2
0
2
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Ninety One plc Company Financial Statements
Statement of cash flows
For the period from 4 October 2019 to 31 March 2020
8
6
1
Cash flows from operating activities
Result for the year
Adjusted for:
Share-based payments transactions related to Ninety One share scheme
Working capital changes:
Amounts receivable from subsidiary undertakings
Trade and other payables
Net cash flows from operating activities
Cash flows from financing activities
Purchase of own shares by EBTs
Loan from subsidiary undertakings
Net cash flows from financing activities
Net change in cash and cash equivalents
Cash and cash equivalents at the Date of Incorporation
Cash and cash equivalents at 31 March 2020
Notes
28(b)
29
2020
£’m
—
3.9
(4.2)
0.2
(0.1)
(7.0)
7.1
0.1
—
—
—
0
2
0
2
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Notes to the Company financial statements
For the period from 4 October 2019 to 31 March 2020
Accounting policies
Basis of preparation
The separate financial statements of Ninety One plc (the “Company”) have been prepared on a going concern basis in
accordance with IFRS as adopted by the European Union (“EU”), and with the provisions of the Companies Act 2006
(the “Act”) applicable to companies reporting under IFRS as adopted by the EU. The principal accounting policies
adopted are the same as those set out in note 1 to the Group’s consolidated financial statements.
The Company’s financial statements comprise the statement of financial position, statement of changes in equity and
statement of cash flows for the period from 4 October 2019 (“Date of Incorporation”) to 31 March 2020. The accounting
reference period of the Company ending on 31 October 2020 was shortened to end on 31 March 2020 in order to align
with the accounting reference period of the Ninety One group of companies. The financial statements have been
prepared on the historical cost basis. The Company has taken advantage of the exemption in section 408 of the Act
not to present its own income statement and statement of comprehensive income in these financial statements.
The Company made no profit or loss for the period ended 31 March 2020.
27. Investment in subsidiary undertakings
Investment in subsidiary undertakings are held at cost less any accumulated impairment losses.
Investment in subsidiary undertakings
Opening balance
Acquisition of subsidiaries (Note 27(a))
Closing balance
2020
£’m
—
915.3
915.3
A detailed listing of the Company’s direct and indirect subsidiaries is set out in note 26 to the Group’s consolidated
financial statements.
27(a) Acquisition of subsidiaries
On the Date of Demerger, Ninety One plc acquired the net assets of Ninety One UK Limited (previously Investec Asset
Management Limited), the former holding company of the Ninety One Business in the UK, from Investec and Forty Two
Point Two for a consideration of £915.3 million. The transfer was effected by the issue of 622,624,621 ordinary shares by
the Company, with the balance giving rise to the share premium of £732.2 million and merger reserve of £183.0 million,
being the differences of the nominal value of shares issued and the consideration of the acquired net assets of Ninety
One UK Limited. Share premium was subsequently transferred to distributable reserve by means of the reduction of
share capital.
The Company subsequently undertook a reorganisation plan prior to 31 March 2020 in which Ninety One Global Limited,
a direct subsidiary of the Company, acquired all the shares in Ninety One UK Limited from the Company at cost in
exchange for the issue of the shares from Ninety One Global Limited.
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9
6
1
0
2
0
2
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Ninety One plc Company Financial Statements
28. Share capital and other reserves
0
7
1
28(a) Share capital
Ordinary shares of £0.0001 each, issued, allotted and fully paid1
At the Date of Incorporation
Issued during the year2
At 31 March 2020
Special shares of £0.0001 each, issued, allotted and fully paid3
At the Date of Incorporation
Issued during the year2
Special converting shares
UK DAS share
UK DAN share
Special voting share
Special rights share
At 31 March 2020
Redeemable preference shares of £1 each
At the Date of Incorporation
Redemption of preference shares4
At 31 March 2020
Total share capital
Number of
shares
1
622,624,621
622,624,622
Number of
shares
—
300,089,454
1
1
1
1
Nominal value
£’m
—
0.1
0.1
Nominal value
£’m
—
—
—
—
—
—
—
Number of
shares
Nominal value
£’m
50,000
(50,000)
—
0.1
(0.1)
—
0.1
1. On 19 November 2019, the Company effected a subdivision of shares (from 1 share to 10,000 shares) with the nominal value per share reduced from
£1 to £0.0001, and subsequent cancellation of 9,999 shares. All ordinary shares in issue rank pari passu and carry the same voting rights and
entitlement to receive dividends and other distributions declared or paid by the Company.
2. These are the capital transactions related to the acquisition of subsidiaries from Investec as part of the Demerger Transactions on the Date of
Demerger; details of the transactions are presented in note 27(a).
3. Special shares will not have any rights to vote, except on a resolution either to vary the rights attached to such shares or on a winding-up of the
Company, nor any right to receive any dividend or other distribution by the Company.
4. The Company has fully redeemed 50,000 redeemable preference shares from the subscriber at nominal value during the period.
0
2
0
2
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28(b) Own share reserve
The Company established employee benefit trusts (“EBTs”) for the purpose of purchasing the Company’s shares and
satisfying the share-based payment awards granted to employees within the Ninety One plc group. The EBTs are funded
by the relevant subsidiaries of the Company and operated by the Company. The EBTs hold shares that have not vested
unconditionally to employees of the subsidiaries of the Company. The EBTs are consolidated into the Company’s
financial statements, with any Company’s shares held by the EBT classified as own shares deducted from equity in the
Company’s statement of financial position. These shares are recorded at cost, and no gain or loss is recognised in the
Company’s income statement on the purchase, sale, issue or cancellation of these shares.
At the Date of Incorporation
Own shares purchased
At 31 March 2020
During the year, 4.6 million ordinary shares were purchased and held within the EBTs.
28(c) Other reserves
The following table shows the movements in other reserves during the year:
2020
£’m
—
7.0
7.0
Share-based
payment
reserve
Total other
reserves
£’m
(iii)
—
—
—
3.9
£’m
—
915.2
—
3.9
Share
premium
Distributable
reserve
Merger
reserve
£’m
(i)
—
£’m
(i)
—
£’m
(ii)
—
732.2
—
183.0
(732.2)
732.2
—
—
—
—
—
732.2
183.0
3.9
919.1
At the Date of Incorporation
Issue of share capital
Transfer to distributable reserve
Share-based payment transactions
At 31 March 2020
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7
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2
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Ninety One plc Company Financial Statements
2
7
1
28(c) Other reserves continued
(i) Share premium and distributable reserve
The share premium amounting to £732.2 million arising from the Demerger Transactions described in note 27(a), being
the premium of shares issued by the Company to Investec plc shareholders in exchange for the 80 percent plus one
share stake in Ninety One UK Limited, was subsequently transferred to a distributable reserve by effecting a court
approved reduction of capital, reducing its share premium account in order to create a distributable reserve for future
distributions.
(ii) Merger reserve
The merger reserve of £183.0 million is a legally created reserve that represents the premium of shares issued by
Ninety One plc to Forty Two Point Two in exchange for its 20 percent (less one share) stake in Ninety One UK Limited.
This transaction attracted merger relief under section 612 of the Companies Act 2006.
(iii) Share-based payment reserve
The share-based payment reserve of £3.9 million comprises the fair value of share awards granted which are yet to be
exercised. The amount will be reversed to the own share reserve when the related awards are forfeited or vested and
transferred to employees.
29. Related parties
In the ordinary course of business, the Company carries out transactions with related parties, as defined by IAS 24.
Apart from those disclosed elsewhere in the financial statements, material transactions for the year are set out below:
29(a) Balances and transactions with subsidiaries
Loan payable to subsidiary undertakings1
Amounts receivable from subsidiary undertakings
2020
£’m
(7.1)
4.2
1. On 16 March 2020, the Company entered into a loan facility agreement (the “Agreement”) with its subsidiary, Ninety One UK Limited, to cover the cash
requirement for the initial funding of the EBTs. The loan is repayable 12 months from the date of the Agreement and charged at interest rates of 2.75
percent above the 6-month LIBOR rate prevailing at the time of the advance per annum. Interest expense charged on this loan for the year ended
31 March 2020 amounted to £9,146.
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29(b) Transactions with key management personnel
The key management personnel are defined as the directors (both executive and non-executive) of Ninety One plc.
Certain directors are not paid directly by the Company but receive remuneration from companies within the Group,
in respect of their services to the larger group which includes the Company.
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The aggregate compensation paid or payable to key management personnel for employee services is as follows:
Remuneration paid to key management personnel
Short-term employee benefits
30. Financial instruments
The table below summarises the carrying value of the financial instruments of the Company by category:
Financial assets
measured at
amortised cost
Financial
liabilities
measured at
amortised cost
Total financial
instruments
Non-financial
instruments
£’m
£’m
£’m
£’m
2020
£’m
0.3
Total
£’m
At 31 March 2020
Investments in subsidiary undertakings
Amounts receivable from subsidiary undertakings
Loan payable to subsidiary undertaking
Trade and other payables
Total
—
4.2
—
—
4.2
—
—
(7.1)
(0.2)
(7.3)
—
4.2
(7.1)
(0.2)
(3.1)
915.3
915.3
—
—
—
4.2
(7.1)
(0.2)
915.3
912.2
At 31 March 2020, the Company did not hold any financial instruments measured at fair value. Carrying amounts of
financial assets and financial liabilities measured at amortised cost approximate to their fair value. The Company’s
exposure to price, foreign exchange, interest rate, credit and liquidity risk is not considered to be material and, therefore,
no further information is provided.
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Glossary
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Adjusted earnings per share (Adjusted EPS)
Profit attributable to ordinary shareholders, adjusted to
remove non-operating items, divided by the number of
ordinary shares in issue at the end of the year
Average AUM
Calculated as a 13-point average of opening AUM for
the year, and the month end AUM for the subsequent
12 months
Adjusted net interest income
Calculated as net interest income less interest income
arising from Silica operations, interest expenses from
lease liabilities for office premises and other interest
expenses
Adjusted operating expenses
Calculated as operating expenses less Silica net expenses
and deferred employee benefit scheme movements, but
including interest expense on lease liabilities
Average fee rate
Management fee revenue divided by average AUM
(annualised for non-twelve months periods), expressed
as basis points
Basic earnings per share (Basic EPS)
Profit after tax attributable to ordinary shareholders
divided by the weighted average number of ordinary
shares outstanding during the year, excluding own
shares held by Ninety One share schemes
Adjusted operating profit
Calculated as adjusted operating revenue less adjusted
operating expenses
Board
Includes the Board of Ninety One plc and the Board
of Ninety One Limited
Adjusted operating profit margin
Calculated as adjusted operating profit divided by
adjusted operating revenue
Adjusted operating revenue
Calculated as net revenue, less Silica third-party revenue
and adjusted for foreign exchange gains/losses, deferred
employee benefit scheme movements, and other income
AIFMD
Alternative Investment Fund Managers Directive
ASISA
Association for Savings and Investment South Africa
represents the majority of the country’s asset managers,
collective investment scheme management companies,
linked investment service providers, multi-managers and
life insurance companies
Assets under management (AUM)
The aggregate assets managed on behalf of clients. For
some private markets investments, the aggregate value of
assets managed is based on committed funds by clients;
this is changed to the lower of committed funds and net
asset value, in line with the fee basis. Where cross
investment occurs, assets and flows are identified, and
the duplication is removed. AUM excludes assets
administered for third-party clients by Silica
CRD III
Capital Requirements Directive
Compensation ratio
Total staff expenses excluding Silica and deferred
employee benefit schemes as a percentage of adjusted
operating revenue
Diluted earnings per share
Profit for the year attributable to ordinary shareholders
divided by the weighted average number of ordinary
shares outstanding during the year, plus the weighted
average number of ordinary shares that would be issued
on the conversion of all the potentially dilutive shares into
ordinary shares
DLC structure
The arrangement whereby Ninety One plc and Ninety One
Limited operate as a single economic enterprise
Executive Directors
The executive directors of Ninety One plc and
Ninety One Limited, currently Hendrik du Toit and
Kim McFarland
GIFS
Global Investment Fund Sectors are international
categories developed and tested by Standard and Poor’s
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PRI
Principles for Responsible Investment
Prospectus
Ninety One Prospectus issued 2 March 2020
South African (SA) fund platform
Ninety One’s South African fund platform (known as Ninety
One Investment Platform) offers both offshore and local
investment solutions for independent financial advisors
in South Africa. The platform predominantly comprises
third-party products and selected Ninety One funds
Torque ratio
The relative scale of net flows in relation to the overall size
of the business, expressed as a percentage. Calculated as
net flows for the relevant period divided by AUM as at the
first day of that period (annualised for non-twelve month
periods)
UCITS
Undertaking for Collective Investment in Transferable
Securities Directive
Headline earnings per share (HEPS)
Ninety One is required to calculate HEPS in accordance
with JSE Listing Requirements, determined by reference
to circular 1/2019 “Headline Earnings” issued by the South
African Institute of Chartered Accountants
Investment Association (IA)
The Investment Association is the trade body that
represents investment managers and asset management
firms in the UK
Johannesburg Stock Exchange (JSE)
The exchange operated by JSE Limited, a public company
incorporated and registered in South Africa, under the
Financial Markets Act
London Stock Exchange (LSE)
The securities exchange operated by London Stock
Exchange plc under the Financial Services and Markets
Act 2000, as amended
MiFID
Markets in Financial Instruments Directive
MiFID 2
The second iteration of the Markets in Financial
Instruments Directive. MiFID II is an EU directive which
standardises regulation for investment services
throughout the European Economic Area
Net flows
New funds from clients less funds withdrawn by clients,
with any duplication removed, during a given period
Net revenues
Represents revenue in accordance with IFRS, less
commission expense
Ninety One (also “the Group”)
Ninety One plc and its subsidiaries and Ninety One Limited
and its subsidiaries
Non-Executive Directors
The non-executive directors of Ninety One plc and
Ninety One Limited
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Investor Relations
Financial calendar
Event
Date
First quarter AUM update
17 July 2020
Annual General Meeting
3 September 2020
Half year end
Interim results
30 September 2020
17 November 2020
Third quarter AUM update
22 January 2021
Financial year end
Full year results
31 March 2021
19 May 2021
Forward-looking statements
This Integrated Annual Report does not constitute or
form part of any offer, invitation or inducement to any
person to underwrite, subscribe for or otherwise acquire
or dispose of securities in Ninety One nor should it
be construed as legal, tax, financial, investment or
accounting advice.
This Integrated Annual Report may include statements
that are, or may be deemed to be, “forward-looking
statements”. These forward-looking statements may be
identified by the use of forward-looking terminology,
including the terms “believes”, “estimates”, “plans”,
“projects”, “anticipates”, “expects”, “intends”, “may”,
“will” or “should” or, in each case, their negative or other
variations or comparable terminology, or by discussions
of strategy, plans, objectives, goals, future events or
intentions. Forward-looking statements may and often do
differ materially from actual results. Any forward-looking
statements reflect Ninety One’s current view with respect
to future events and are subject to risks relating to future
events and other risks, uncertainties and assumptions
relating to the Ninety One’s business, results of operations,
financial position, liquidity, prospects, growth and
strategies. Forward-looking statements speak only
as of the date they are made.
Ninety One expressly disclaims any obligation or
undertaking to release publicly any updates or revisions
to any forward-looking statements contained in this
Integrated Annual Report or any other forward-looking
statements it may make whether as a result of new
information, future developments or otherwise.
Corporate information
Auditor
KPMG
Corporate brokers
HSBC Bank plc
Investec Bank plc and Investec Bank Limited
J.P. Morgan Cazenove
JSE Sponsor
J.P. Morgan Equities South Africa (Pty) Ltd
Registrars in the UK
Computershare Investor Services plc
The Pavilions
Bridgwater Road
Bristol, BS99 6ZZ
Telephone: +44 (0) 370 703 6027
Website: www.computershare.com
Transfer Secretaries in South Africa
Computershare Investor Services Proprietary Limited
Rosebank Towers
15 Biermann Avenue
Rosebank, 2196
Telephone (SA): 0861 100 933
Telephone: +27 (0) 11 370 5000
Website: www.computershare.com
Registered offices
Ninety One plc
55 Gresham Street
London, EC2V 7EL
Incorporated in England and Wales
Registration number 12245293
Ninety One Limited
36 Hans Strijdom Avenue
Cape Town, 8001
Incorporated in the Republic of South Africa
Registration number 2019/526481/06
Telephone: +44 (0) 20 3938 2000
Email: enquiries@ninetyone.com
Website: www.ninetyone.com
This report is printed on paper certified in accordance with the FSC® (Forest Stewardship Council®) and is recyclable and acid-free.
Designed and produced by Instinctif Partners, www.creative.instinctif.com
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