Pre-Annual General Meeting Information • Jun 30, 2016
Pre-Annual General Meeting Information
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If you are in any doubt as to what action you should take, you are recommended to immediately seek your own personal financial advice from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser duly authorised under the Financial Services and Markets Act 2000.
If you have sold or otherwise transferred all of your Ordinary Shares in Ashmore Group plc, please forward this document, together with the accompanying Form of Proxy, as soon as possible to the purchaser or transferee or to the stockbroker, bank manager, or other agent through whom the sale or transfer was effected for onward transmission to the purchaser or transferee.
Your attention is drawn to Ashmore Group plc's Annual Report and Accounts for the year ended 30 June 2016, a copy of which accompanies this document.
Goldman Sachs and UBS Investment Bank, who are each authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom, are acting for Ashmore Group plc and for no one else in connection with the Authority to Make Market Purchases and Waiver Resolution described in this document and accordingly will not be responsible to any person other than Ashmore Group plc for providing the protections afforded to clients of Goldman Sachs and UBS Investment Bank or for providing advice in relation to such proposals.
(Incorporated and registered in England and Wales under No. 3675683)
Notice of the Annual General Meeting of the Company to be held at Kingsway Hall Hotel, 66 Great Queen Street, London WC2B 5BX at 12 noon on Friday 21 October 2016 is set out at the end of this document.
Shareholders are requested to complete and return the Form of Proxy enclosed with this document as soon as possible but in any event, to be valid, so as to be received by the Company's registrar, Equiniti Registrars, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA not later than 12 noon on Wednesday 19 October 2016.
The return of the Form of Proxy will not preclude a member from attending and voting at the Annual General Meeting in person should he or she subsequently decide to do so.
| The following definitions apply throughout this document, unless the context otherwise requires: | |
|---|---|
| "2015 Annual Report" | means the Annual Report and Accounts of the Company for the year ended 30 June 2015 |
| "2016 Annual Report" | means the Annual Report and Accounts of the Company for the year ended 30 June 2016, a copy of which accompanies this document |
| "Annual General Meeting" or "AGM" | means the Annual General Meeting of the Company to be held at the Kingsway Hall Hotel, 66 Great Queen Street, London WC2B 5BX at 12 noon on Friday 21 October 2016 |
| "Authority to Make Market Purchases" | means the authority for the Company to make market purchases of Ordinary Shares to be proposed to Shareholders in the terms of resolution 17 set out in the Notice of AGM |
| "Board" or "Directors" | means the Directors of Ashmore Group plc, and "Director" shall mean any one of them, as the context requires |
| "Business Day" | means any day (other than a Saturday or Sunday or public holiday) on which banks are generally open for business in London |
| "Chairman's Letter" | means the letter from Peter Gibbs, the Non-executive Chairman of the Company, set out in Part I of this document |
| "Company" or "Ashmore" | means Ashmore Group plc |
| "Employee Benefit Trust" or "EBT" | means the Ashmore 2004 Employee Benefit Trust established by a trust deed dated 15 March 2004 of which Overseas Pensions and Benefits Limited (formerly Carey Pensions and Benefits Limited) is the trustee |
| "Form of Proxy" | means the form of proxy accompanying this document |
| "FSMA" | means the Financial Services and Markets Act 2000 |
| "Goldman Sachs" | means Goldman Sachs International |
| "Independent Directors" | means the Directors of the Company other than Mark Coombs |
| "Independent Non-executive Directors" | means Peter Gibbs, Clive Adamson, David Bennett, Simon Fraser, Nick Land and Dame Anne Pringle |
| "Independent Shareholders" | means Shareholders other than Mark Coombs and Rebecca Coombs, his spouse |
| "Listing Rules" or "LR" | means the Listing Rules of the UK Listing Authority made in accordance with Section 74 of FSMA |
| "London Stock Exchange" | means London Stock Exchange plc |
| "Notice of AGM" | means the notice of the Annual General Meeting set out at the end of this document |
| "Official List" | means the official list of the UK Listing Authority |
| "Ordinary Shares" | means ordinary shares of 0.01 pence each in the Company |
| "Panel" | means the Panel on Takeovers and Mergers |
| "Relationship Agreement" | means the relationship agreement entered into between Mark Coombs and the Company effective 1 July 2014 in accordance with Listing Rule 9.2.2AR(2)(a) |
| "resolution" or "resolutions" | means a resolution or the resolutions set out in the Notice of AGM |
| "Shareholders" | means holders of Ordinary Shares |
| "Share Options" | means options to subscribe for and awards over Ordinary Shares under the Share Schemes |
| "Share Schemes" | means the Ashmore Executive Omnibus Plan 2015, the Ashmore Executive Omnibus Incentive Plan, the Ashmore Company Share Option Plan and the Ashmore First Discretionary Share Option Scheme |
| "Takeover Code" | means the City Code on Takeovers and Mergers |
| "UBS" or "UBS Investment Bank" | means UBS Limited |
| "UK Listing Authority" | means the UK Listing Authority, being the Financial Conduct Authority acting as competent authority for the purposes of Part VI of FSMA |
| "Waiver Resolution" | means resolution 18 in the form set out in the Notice of AGM at the end of this document approving a waiver of the mandatory offer provisions set out in Rule 9 and Rule 37 of the Takeover Code |
(Registered in England No. 3675683)
Peter Gibbs (Non-executive Chairman) 61, Aldwych Mark Coombs (Chief Executive Officer) London WC2B 4AE Tom Shippey (Group Finance Director) Clive Adamson (Non-executive Director) 19 September 2016 David Bennett (Non-executive Director) Simon Fraser (Senior Independent Non-executive Director) Nick Land (Non-executive Director) Dame Anne Pringle (Non-executive Director)
Directors: Registered Office:
Dear Shareholder
The purpose of this letter is to provide you with an explanation of the resolutions to be proposed at the Annual General Meeting of the Company which will be held at the Kingsway Hall Hotel, 66 Great Queen Street, London WC2B 5BX at 12 noon on Friday 21 October 2016 and to seek your approval of them. The Notice of AGM is set out at the end of this document.
The first part of the AGM (resolutions 1 to 12 inclusive) will address ordinary business of the AGM. The second part of the AGM (resolutions 13 to 19 inclusive) will seek the necessary Shareholder approvals for:
– authority for the Company to make political donations of up to £60,000;
All of the resolutions to be proposed at the AGM (including the proposals outlined above) will be taken on a poll and are explained in further detail below.
The ordinary business of the AGM comprises resolutions 1 to 12 inclusive.
The Directors are required to lay the Directors' report, the audited annual accounts of the Company and the independent auditor's report before Shareholders at the Annual General Meeting. Accordingly, resolution 1 presents the accounts for the year ended 30 June 2016 and, although not a statutory requirement, proposes the accounts for adoption. A copy of the 2016 Annual Report accompanies this document.
Shareholder approval is required for the payment of a final dividend as recommended by the Board. Subject to shareholder approval, this dividend will be paid on 2 December 2016 to Shareholders on the register of members of the Company at the close of business on 4 November 2016.
Nick Land will not be seeking re-election at the Annual General Meeting and will retire from the Board on 21 October 2016 with effect from the conclusion of the meeting. Clive Adamson was appointed a Director on 22 October 2015 and will retire and seek election for the first time at the Annual General Meeting in accordance with the Articles of Association of the Company.
The Board has fully adopted provision B.7.1 of the UK Corporate Governance Code and, as at last year's annual general meeting, the Directors, save for Nick Land, will all retire and seek election or re-election (as the case may be) at the Annual General Meeting on 21 October 2016. The Company's Nominations Committee considers the appointment and replacement of Directors subject to the rules set out in the Articles of Association. The Nominations Committee will normally engage an independent search consultant with no connection to the Group to find appropriate candidates for the Board with the requisite skills, and in doing so will take account of relevant guidelines and legislation relating to the appointment of individuals to boards (including but not limited to the Equality Act 2010, relevant European Union law, guidance from the Equality and Human Rights Commission and the Financial Reporting Council's UK Corporate Governance Code (Sept 2012)). The Nominations Committee may also consider candidates introduced to the Company from other sources. None of the Independent Non-executive Directors seeking election or re-election (as the case may be) at the Annual General Meeting has any existing or previous relationship, transaction or arrangement with the Company, nor with any controlling shareholder of the Company or any associate of a controlling shareholder of the Company within the meaning of LR 13.8.17 R (1).
In considering the Independent Non-executive Directors' independence, the Board has taken into consideration the guidance provided by the UK Corporate Governance Code. The Board considers Peter Gibbs, Nick Land, Simon Fraser, Dame Anne Pringle, David Bennett and Clive Adamson to be independent in accordance with Provision B.1.1 of the UK Corporate Governance Code. Simon Fraser is the Senior Independent Director.
Each of Mark Coombs and his spouse is classed as a "controlling shareholder" of Ashmore under the Listing Rules. As a result, the Listing Rules require that Independent Non-executive Directors be re-elected by a majority of votes cast by Independent Shareholders as well as by a majority of votes cast by all Shareholders. Therefore, the resolutions for the election and re-election of the Independent Non-executive Directors (resolutions 5 to 9) will be taken on a poll and the votes cast by Independent Shareholders and all Shareholders will be calculated separately. Such resolutions will be passed only if a majority of votes cast by Independent Shareholders are in favour, in addition to a majority of votes cast by all Shareholders being in favour.
Biographies of the Directors are contained on page 45 of the 2016 Annual Report.
The UK Corporate Governance Code recommends that the Board should undertake a formal annual evaluation of its own performance and that of its committees and individual Directors and that an externally facilitated evaluation should be undertaken at least once every three years. An independent externally facilitated evaluation was conducted in 2015 by Independent Audit. The Chairman conducted an internal review of the performance of the Board in 2016. Meetings were held by the Chairman with each Director in which issues and developments over the year were discussed and performance was considered by reference to the objectives of the Board and its committees. The issues raised during this process were subsequently discussed by the Board together. The evaluation also considered my performance as Chairman and feedback on my performance as Chairman was reflected in the Board evaluation discussion. The Board believes that, following the completion of their evaluation, the performance of the Directors continues to be effective and that they continue to demonstrate commitment to their roles. The Company therefore also considers each of the Independent Non-executive Directors will be an effective Director. The Board therefore recommends the re-election of all Directors who are seeking re-election and also the election of the Director appointed during the year.
This resolution deals with the remuneration of the Directors and of the remuneration paid to the Directors during the year under review. Section 439 of the Companies Act 2006 requires that an ordinary resolution be put to Shareholders each year for their approval of the Directors' remuneration report, excluding the remuneration policy which was approved by shareholders at the annual general meeting last year. This is set out on pages 55 to 67 of the 2016 Annual Report. Resolution 10 is an advisory vote.
The Company's auditors must offer themselves for reappointment at each general meeting at which accounts are presented. KPMG have acted as the auditors to the Company since 2006 and EU legislation requires that a tender process be undertaken every 10 years. In January 2016 Ashmore invited submissions from three of the big four auditing firms for the provision of statutory audit and certain additional audit related services for the Ashmore group. The fourth firm, Deloitte, was not invited to tender as it already provides independent tax advisory services to the Ashmore group. The tendering firms submitted written proposals which were presented to the Audit and Risk Committee and Ashmore management in March 2016. It was the unanimous view of the Audit and Risk Committee that KPMG's proposal comfortably met each of the selection criteria required by the Audit and Risk Committee, and in particular it targeted continuity and stability alongside a change in audit partner as required under EU reform legislation. A full description of the audit tender process can be found on pages 51-52 of the 2016 Annual Report. On the recommendation of the Audit and Risk Committee the Board proposes that KPMG LLP be reappointed as auditors of the Company pursuant to resolution 11. Resolution 12 authorises the Directors to agree the remuneration of the Company's auditors.
The special business to be considered at the AGM comprises resolutions 13 to 19 inclusive.
Section 366 of the Companies Act 2006 requires the Company to seek shareholder approval for the making of political donations and the incurring of political expenditure by the Company. Although the Company does not make and does not intend to make donations to political parties within the normal meaning of that expression, the definition in the Companies Act 2006 is wide. It can extend to bodies such as those concerned with policy review, law reform and the representation of the business community and special interest groups such as those concerned with the environment, which the Company and its subsidiaries might wish to support. Accordingly, the Directors have decided to seek Shareholders' authority for political donations and political expenditure in case any of its normal activities are caught by the legislation.
At the annual general meeting held on 22 October 2015, members gave authority to the Directors to allot Ordinary Shares up to an aggregate nominal amount equal to £23,579.08 (representing 235,790,823 Ordinary Shares of 0.01 pence each) representing one-third of the issued ordinary share capital (excluding treasury shares) of the Company and, in connection with a rights issue in favour of Shareholders up to an aggregate nominal amount equal to £47,158.16 (representing 471,581,648 Ordinary Shares) representing two-thirds of the issued ordinary share capital (excluding treasury shares). Resolution 14 replaces the authority granted in 2015 which expires at the conclusion of this year's AGM.
Paragraph (a) of resolution 14 would give the Directors the authority to allot Ordinary Shares or grant rights to subscribe for or convert any securities into Ordinary Shares up to an aggregate nominal amount equal to £23,579.08 (representing 235,790,823 Ordinary Shares of 0.01 pence each). This amount represents one-third of the issued ordinary share capital (excluding treasury shares) of the Company as at 12 September 2016, the latest practicable date prior to publication of this document.
Consistent with the guidance issued by the Investment Association, paragraph (b) of resolution 14 would give the Directors authority to allot Ordinary Shares or grant rights to subscribe for or convert any securities into Ordinary Shares in connection with a rights issue in favour of Shareholders up to an aggregate nominal amount equal to £47,158.16 (representing 471,581,648 Ordinary Shares), as reduced by the nominal amount of any shares issued under paragraph (a) of this resolution. This amount (before any reduction) represents two-thirds of the issued ordinary share capital (excluding treasury shares) of the Company as at 12 September 2016, the latest practicable date prior to publication of this document.
The authority sought under this resolution will expire at the earlier of 31 December 2017 and the conclusion of the next annual general meeting of the Company.
The Directors will continue to seek to renew these authorities at each annual general meeting, in accordance with best practice. The Directors have no present intention to allot new Ordinary Shares, save as necessary under paragraph (a) to satisfy obligations of the EBT under the Company's Share Schemes.
As at 12 September 2016, the latest practicable date prior to publication of this document, 5,368,331 Ordinary Shares, with an aggregate nominal value of £536.83, were held by the Company in treasury.
Each of resolutions 15 and 16 will be proposed as a special resolution, which requires a 75 per cent majority of the votes to be cast in favour. The purpose of resolution 15 is to authorise the Directors to allot Ordinary Shares (or sell any Ordinary Shares which the Company elects to hold in treasury) for cash without first offering them to existing Shareholders in proportion to their existing shareholdings, without restrictions as to the use of proceeds of those allotments. This authority would be limited to allotments or sales in connection with pre-emptive offers and offers to holders of other equity securities if required by the rights of those shares or as the Directors otherwise consider necessary, or otherwise up to an aggregate nominal amount of £3,536.86 (representing 35,368,623 Ordinary Shares). This aggregate nominal amount represents approximately 5 per cent of the issued ordinary share capital (excluding treasury shares) of the Company and approximately 4.96 per cent of the issued ordinary share capital (including treasury shares) of the Company, in each case as at 12 September 2016, the latest practicable date prior to publication of this document.
The purpose of resolution 16 is to authorise the Directors to allot Ordinary Shares (or sell any Ordinary Shares which the Company elects to hold in treasury) for cash up to a further nominal amount of £3,536.86 (representing 35,368,623 Ordinary Shares), equivalent to approximately 5 per cent of the total issued ordinary share capital (excluding treasury shares) of the Company and 4.96 per cent of the total issued ordinary share capital (including treasury shares) of the Company, only in connection with an acquisition or specified capital investment which is announced contemporaneously with the allotment, or which has taken place in the preceding six-month period and is disclosed in the announcement of the issue. If the authority given in resolution 16 is used, the Company will publish details of the placing in its next annual report.
The Board intends to follow the provisions of the Pre-Emption Group's Statement of Principles, as updated in March 2015, and not to allot shares for cash on a non pre-emptive basis pursuant to the authority in resolution 15 in excess of an amount equal to 7.5 per cent of the total issued ordinary share capital of the Company (excluding treasury shares) within a rolling three-year period, other than:
(i) without prior consultation with the Shareholders; or
(ii) in connection with an acquisition or specified capital investment which is announced contemporaneously with the allotment or which has taken place in the preceding six-month period and is disclosed in the announcement of the allotment.
The Directors will continue to seek to renew the authorities in resolutions 15 and 16 at each annual general meeting, in accordance with current best practice.
If the resolutions are passed, the authority will expire at the earlier of 31 December 2017 and the conclusion of the next annual general meeting of the Company.
This resolution, which is conditional on the passing of the Waiver Resolution (resolution 18), will be proposed as a special resolution and seeks authority for the Company to buy back its own Ordinary Shares as permitted by the Companies Act 2006. The authority, if granted, limits the number of Ordinary Shares that could be purchased to a maximum of 35,368,623 Ordinary Shares, representing approximately 5 per cent of the Company's issued share capital (excluding treasury shares) as at 12 September 2016, the latest practicable date prior to publication of this document, and sets the minimum and maximum prices that can be paid. As explained below in relation to resolution 18, the maximum number of Ordinary Shares that may be purchased pursuant to the Authority to Make Market Purchases is 5 per cent of the Company's issued share capital. The Company may either retain any of its own Ordinary Shares which it has purchased as treasury shares with a possible re-issue at a future date, or cancel them.
The Company would consider holding any of its Ordinary Shares that it purchased pursuant to the authority conferred by this resolution as treasury shares. This would give the Company the ability to re-issue treasury shares quickly and cost-effectively, and would provide the Company with additional flexibility in the management of its capital base.
Any market purchases would only be made from the Company's distributable reserves not required for other purposes. No provider of finance will be required and therefore no payment of interest, repayment of, or security for, any liability will be required to be dependent upon the business of the Company. During the financial year ended 30 June 2016, the Company did not utilise the authority to make market purchases conferred at the 2015 annual general meeting. The authority being sought under this resolution would only be exercised if the Directors believed that to do so would result in an increase in earnings per share and would be in the interests of Shareholders generally.
A purchase of Ordinary Shares by the Company pursuant to the Authority to Make Market Purchases could increase the percentage of voting rights held by Mark Coombs, Ashmore's Chief Executive Officer, and his spouse. In certain circumstances (described below) such an increase could trigger an obligation on Mark Coombs to make a mandatory offer for the whole of the issued share capital of the Company pursuant to the Takeover Code.
Independent Shareholders will be asked, under the Waiver Resolution (resolution 18), to renew their approval of the waiver by the Panel of the mandatory offer provisions such that the purchases of Ordinary Shares by the Company pursuant to the Authority to Make Market Purchases will not trigger a requirement for Mark Coombs to make a mandatory offer for the entire issued share capital of the Company. Further details of this waiver are set out below.
As at 12 September 2016, the latest practicable date prior to the publication of this document, there were no outstanding options granted under the Share Schemes and no outstanding warrants.
The Waiver Resolution seeks Independent Shareholders' approval of a waiver of the obligation that could arise on Mark Coombs to make a general offer for the entire issued share capital of the Company under Rule 9 of the Takeover Code as a result of purchases by the Company of Ordinary Shares pursuant to the Authority to Make Market Purchases. The voting on the Waiver Resolution will be by means of a poll of Independent Shareholders.
In common with many other asset managers, the Company has capital in excess of its regulatory requirements and generates appreciable free cash flow. It remains the Board's intention to return the surplus capital to Shareholders when appropriate. To date, capital has been returned to Shareholders primarily by way of dividends on Ordinary Shares. However, the full suite of options for returning capital to Shareholders also includes the Company making purchases of Ordinary Shares, as it did in 2009. If the Waiver Resolution is not passed, the Company will be unable to make purchases of Ordinary Shares and its flexibility to manage its capital resources will accordingly be limited. The Independent Directors continue to believe that retaining the option for the Company to make purchases of Ordinary Shares is in the best
interests of Shareholders generally. Ashmore acknowledges that voting guidelines issued by certain institutional investor bodies do not recommend normally supporting resolutions of this type, due to a concern regarding the risk of progressive acquisition of control by major shareholders (or "creeping control"). In recognition of such concerns Ashmore therefore proposes to limit the maximum number of Ordinary Shares that may be purchased pursuant to the Authority to Make Market Purchases (resolution 17) to 5 per cent of the Company's issued share capital.
Under Rule 9 of the Takeover Code, when (i) any person acquires, whether by a series of transactions over a period of time or not, an interest in shares which, taken together with shares in which he and persons acting in concert with him are interested, carry 30 per cent or more of the voting rights of a company subject to the Takeover Code, or (ii) any person who, together with persons acting in concert with him, is interested in shares which in aggregate carry not less than 30 per cent of the voting rights of a company, but does not hold shares carrying more than 50 per cent of such voting rights and such person, or any person acting in concert with him, acquires an interest in any other shares which increases the percentage of the shares carrying voting rights in which he is interested, then in either case, that person is normally required to make a general offer in cash for all the remaining equity share capital of the Company at the highest price paid by him, or any persons acting in concert with him, for shares in the Company within the 12 months prior to announcement of the offer.
Under Rule 37 of the Takeover Code, when a company purchases its own voting shares, any resulting increase in the percentage of shares carrying voting rights in which a person or group of persons acting in concert is interested will be treated as an acquisition for the purpose of Rule 9 (although a shareholder who is neither a director nor acting in concert with a director will not normally incur an obligation to make a Rule 9 offer).
At 12 September 2016, the latest practicable date prior to publication of this document, Mark Coombs was interested in an aggregate of 288,619,627 Ordinary Shares (including equity settled share awards under the Ashmore Executive Omnibus Plan and the share interests of his spouse with whom he is deemed to be acting in concert) representing 40.80 per cent of the issued share capital of the Company (excluding treasury shares). If the Company were to repurchase from persons other than Mark Coombs and his spouse all the Ordinary Shares for which it is seeking authority under the Authority to Make Market Purchases, the interests of Mark Coombs and his spouse in Ordinary Shares would (assuming no other allotments of Ordinary Shares) increase to 42.95 per cent of the issued share capital of the Company (excluding treasury shares), by virtue of such a repurchase. Accordingly, an increase in the percentage of the shares carrying voting rights in which Mark Coombs and his spouse is interested, as a result of any exercise of the Authority to Make Market Purchases, would ordinarily have the effect of triggering Rule 9 of the Takeover Code and result in Mark Coombs being under an obligation to make a general offer to all Shareholders.
The Company applied to the Panel for a waiver of Rule 9 of the Takeover Code in order to permit the Authority to Make Market Purchases proposed under resolution 17 to be exercised by the Board (if such authority is approved by Shareholders) without triggering an obligation on the part of Mark Coombs to make a general offer to Shareholders. The Panel has agreed, subject to Independent Shareholders' approval on a poll, to waive the requirement for Mark Coombs to make a general offer to all Shareholders where such an obligation would arise as a result of purchases by the Company of up to 35,368,623 Ordinary Shares. In the event that resolution 18 is approved by Independent Shareholders, Mark Coombs will not be restricted from making a general offer for the Company.
The waiver granted by the Panel relates only to any increase in the percentage of Ordinary Shares held by Mark Coombs and his spouse as a result of purchases by the Company of Ordinary Shares pursuant to the Authority to Make Market Purchases sought from the Shareholders at the AGM and is conditional on the passing of the Waiver Resolution (resolution 18) by Independent Shareholders of the Company on a poll. As Mark Coombs and his spouse are interested in the outcome of the Waiver Resolution and as required by the Takeover Code, they will not vote on that resolution.
Mark Coombs is not presently proposing any changes to the Board (other than those already reported by the Company and as described herein and in the 2016 Annual Report) and his intention, following any increase in his shareholding as a result of any repurchase of Ordinary Shares, is that the business of the Company should continue to be run in substantially the same manner as at present. Mark Coombs has also confirmed that he is not proposing, as a result of any increase in his shareholding following any repurchase of Ordinary Shares by the Company, to seek any change in the locations of the Company's business and the continued employment of employees and management of the Company, including any material change in conditions of employment, contributions into the Company's pension scheme, the accrual of benefits for existing members and admission of new members, nor will there be any re-deployment of the fixed assets of the Company nor any change to the Company's listing on the London Stock Exchange.
As described on page 46 of the 2016 Annual Report, Mark Coombs entered into the Relationship Agreement with the Company effective 1 July 2014 in accordance with Listing Rule 9.2.2AR(2)(a), which is intended to ensure that Mark Coombs, as a controlling shareholder, complies with the independence provisions set out in Listing Rule 6.1.4DR.
Mark Coombs was appointed as Chief Executive Officer and as a Director on the incorporation of the Company in December 1998. He held a number of positions at Australia and New Zealand Banking Group (ANZ) and led Ashmore's buyout from ANZ in early 1999. He is Co-Chair of EMTA, the trade association for emerging markets, having been on the board since 1993. Mark has an MA in law from Cambridge University.
The Waiver Resolution will expire at the earlier of 31 December 2017 and the conclusion of the next annual general meeting of the Company.
Under the Companies Act 2006, the minimum notice period required for general meetings of the Company is 21 days, unless Shareholders approve a shorter notice period, which cannot be less than 14 clear days. Annual general meetings will in any event be held on at least 21 clear days' notice.
In order to maintain flexibility for the Company, resolution 19 seeks approval for the Company to call general meetings on not less than 14 clear days' notice. The approval will be effective until the Company's next annual general meeting, when it is intended that a similar resolution will be proposed. The shorter notice period would not be used as a matter of routine for such meetings, but only where the flexibility is merited by the business of the meeting and is thought to be to the advantage of Shareholders as a whole.
You will find set out at the end of this document a Notice of AGM convening the AGM of the Company to be held at the Kingsway Hall Hotel, 66 Great Queen Street, London WC2B 5BX at 12 noon, on Friday, 21 October 2016, at which the resolutions referred to above will be proposed.
You are requested to complete the Form of Proxy accompanying this document in accordance with the instructions printed thereon, whether or not you intend to be present at the AGM, and return it to the Company's registrar, Equiniti Registrars, Aspect House, Spencer Road, Lancing, Worthing, West Sussex BN99 6DA, as soon as possible and in any event so that it is received not later than 12 noon on Wednesday, 19 October 2016. Completion and return of the Form of Proxy will not prevent you from attending the AGM and voting in person if you so wish.
Your attention is drawn to the 2016 Annual Report and to Part II of this document which contain certain additional information in respect of the Company and the Directors' interests. Shareholders are advised to read the whole of this document and the 2016 Annual Report and not to rely solely on the summary information set out in this letter.
The Board believes the proposals described above regarding the resolutions to be proposed at the AGM to be in the best interests of the Company and Shareholders as a whole, save that Mark Coombs makes no recommendation with regard to the Waiver Resolution as, in accordance with the provisions of the Takeover Code, it is the percentage increase in his interest in Ordinary Shares which is the subject of the Waiver Resolution. Accordingly, the Board, with the exception just described, recommends that Shareholders vote in favour of the resolutions at the AGM, as the Directors intend to do in respect of their own beneficial holdings of Ordinary Shares, amounting to 40.84 per cent of the issued Ordinary Shares (excluding treasury shares), save that as required by the Takeover Code neither Mark Coombs nor his spouse will vote, in respect of their beneficial holding of Ordinary Shares, which amount to 40.80 per cent of the issued Ordinary Shares (excluding treasury shares), on the Waiver Resolution, in which Mark Coombs and his spouse are considered to be interested.
The Independent Directors, who have been so advised by Goldman Sachs and UBS Investment Bank, consider the waiver of the obligation that could arise on Mark Coombs to make an offer under Rule 9 of the Takeover Code in relation to the Authority to Make Market Purchases to be in the best interests of the Independent Shareholders and the Company as a whole. In providing their advice to the Independent Directors, Goldman Sachs and UBS Investment Bank have taken account of the Independent Directors' commercial assessments. Accordingly, the Independent Directors unanimously recommend that Independent Shareholders vote in favour of the Waiver Resolution to be proposed at the AGM, as the Independent Directors intend to do in respect of their own beneficial holdings of Ordinary Shares, which amount to approximately 0.036 per cent of the issued Ordinary Shares (excluding treasury shares).
Yours sincerely
Peter Gibbs Chairman
To the best of the knowledge and belief of the Directors (who have taken all reasonable care to ensure that this is the case), such information is in accordance with the facts and does not omit anything likely to affect the import of such information.
The Company is a public limited company listed on the London Stock Exchange and incorporated and domiciled in the United Kingdom. The Company is registered in England and Wales with Company No. 3675683 and has its registered office at 61 Aldwych, London WC2B 4AE. Ashmore is a specialist emerging markets investment manager. The Directors intend to continue conducting the business of the Company and its subsidiaries in a similar manner as it is currently conducted and there are currently no plans to introduce any major changes to the business of the Company and its subsidiaries or the terms of engagement of any employees of the Company and its subsidiaries.
3.1 The names of the Directors and the positions they hold at the date of this document are:
| Name | Position |
|---|---|
| Peter Gibbs | Non-executive Chairman |
| Mark Coombs | Chief Executive Officer |
| Tom Shippey | Group Finance Director |
| Clive Adamson | Non-executive Director |
| David Bennett | Non-executive Director |
| Simon Fraser | Senior Independent Non-executive Director |
| Nick Land | Non-executive Director |
| Dame Anne Pringle | Non-executive Director |
Further information relating to the Directors is included on page 45 of the 2016 Annual Report.
3.2 The business address of the Directors is 61 Aldwych, London WC2B 4AE.
Mark Coombs is deemed to be acting in concert with his spouse for the purpose of the Takeover Code. With this exception, the Directors confirm that they are unaware of any agreements, arrangements or understandings between any of the Directors and any of the Shareholders of the Company which would amount to such Shareholders acting in concert with any of the Directors.
It is not the Directors' intention to sell any of their shareholdings back to the Company pursuant to the Authority to Make Market Purchases. The Directors also believe that there are no related parties from whom Ordinary Shares are proposed to be purchased and in the event that any Shareholders of the Company come within the definition of related party set out in the Listing Rules, the Directors confirm that there is no prior understanding, arrangement or agreement between the Company and any related party.
At the close of business on 12 September 2016 (being the latest practicable date prior to the posting of this document), the interests of the Directors and their families and the interests of persons connected with them, within the meaning of Part 22 of the Companies Act 2006, in the issued share capital of the Company (excluding treasury shares) were as follows:
| Name | Ordinary Shares | % of issued share capital |
|---|---|---|
| Peter Gibbs1 | 50,000 | 0.007 |
| Mark Coombs2 | 288,619,627 | 40.80 |
| Tom Shippey3 | 1,266,776 | 0.179 |
| Clive Adamson | – | – |
| David Bennett | 10,000 | 0.001 |
| Simon Fraser | 25,000 | 0.004 |
| Nick Land | 43,000 | 0.006 |
| Dame Anne Pringle4 | 3,595 | 0.000 |
Notes:
| Number of restricted shares |
Number of bonus shares |
Number of matching shares |
Market price at date of grant |
Date of grant | Release date |
|---|---|---|---|---|---|
| 649,878 | 487,409 | 487,409 | 393.92 pence | 20 September 2011 | 19 September 2016 |
| 328,009 | 246,007 | 246,007 | 329.26 pence | 18 September 2012 | 17 September 2017 |
| 422,536 | 316,902 | 316,902 | 383.40 pence | 17 September 2013 | 16 September 2018 |
| 494,271 | 370,703 | 370,703 | 242.78 pence | 22 September 2015 | 21 September 2020 |
| Number of restricted shares |
Number of bonus shares |
Number of matching shares |
Market price at date of grant |
Date of grant | Release date |
|---|---|---|---|---|---|
| 215,780 | – | – | 393.92 pence | 20 September 2011 | 19 September 2016 |
| 78,965 | 59,224 | 59,224 | 329.26 pence | 18 September 2012 | 17 September 2017 |
| 70,423 | 52,817 | 52,817 | 383.40 pence | 17 September 2013 | 16 September 2018 |
| 58,253 | 43,690 | 43,690 | 309.00 pence | 30 September 2014 | 29 September 2019 |
| 164,757 | 123,568 | 123,568 | 242.78 pence | 22 September 2015 | 21 September 2020 |
The interests of the EBT, as disclosed pursuant to DTR 5, at the close of business on 12 September 2016 (being the latest practicable date prior to the posting of this document), amounted to 35,824,935 Ordinary Shares.
The Directors' current service agreements and letters of appointment will be available for inspection as set out in paragraph 12 below and are summarised below (and on page 58 of the 2016 Annual Report). There are no other service contracts/letters of appointment between the Directors and the Company or any of its subsidiaries and, save as disclosed herein, no other service contracts/letters of appointment have been entered into nor have existing service contracts/letters of appointment been amended during the period of six months prior to the date of this document.
The table below provides details of the Directors' service agreements/letters of appointment. Full details of the Directors' emoluments and other benefits are set out on pages 54 to 67 of the 2016 Annual Report which accompanies this document.
| Directors' service contracts | Date appointed Director | Contract date | Notice period | Expiry/review date |
|---|---|---|---|---|
| Executive directors | ||||
| Mark Coombs | 3 December 1998 | 21 September 2006 | 1 year | Rolling |
| Tom Shippey | 25 November 2013 | 25 November 2013 | 1 year | Rolling |
| Non-executive directors | ||||
| Peter Gibbs – Chairman | 29 April 2015 | 29 April 2015 | 1 month | 29 April 2018 |
| Clive Adamson | 22 October 2015 | 22 October 2015 | 1 month | 22 October 2018 |
| David Bennett | 30 October 2014 | 30 October 2014 | 1 month | 30 October 2017 |
| Simon Fraser | 10 February 2012 | 10 February 2015 | 1 month | 10 February 2018 |
| Nick Land | 3 July 2006 | 3 July 2015 | 1 month | 21 October 2016 |
| Dame Anne Pringle | 19 February 2013 | 19 February 2016 | 1 month | 19 February 2019 |
No contracts have been entered into by the Company or any of its subsidiaries, other than in the ordinary course of business, within the period of two years prior to the posting of this document which are or may be material.
As set out in paragraph 12 below, this document incorporates by reference the audited consolidated accounts of Ashmore Group plc for the financial years ended 30 June 2015 and 30 June 2016.
There are no current ratings or outlooks accorded to the Company by rating agencies.
There has been no significant change in the financial or trading position of the Company since 30 June 2016, being the date to which the last audited published accounts of the Company and its subsidiaries were prepared.
The middle market quotations for the Ordinary Shares of the Company, as derived from the London Stock Exchange Daily Official List, on the first Business Day of each of the six months immediately preceding the date of this document and on 12 September 2016 (being the latest practicable date prior to the posting of this document) were:
| Date | Price per Ordinary Share (p) |
|---|---|
| 12 September 2016 | 347.20 |
| 1 September 2016 | 351.90 |
| 3 August 2016 | 329.20 |
| 1 July 2016 | 308.60 |
| 1 June 2016 | 286.20 |
| 3 May 2016 | 297.70 |
| 1 April 2016 | 282.00 |
11.1 Each of Goldman Sachs and UBS has given and has not withdrawn its written consent to the issue of this document with the inclusion of its respective name and references to it in this document in the form and context in which they appear.
has as at 12 September 2016 (being the latest practicable date prior to the publication of this document) any interest in, right to subscribe in respect of or short position in relation to any relevant securities; and
(e) there are no relevant securities which the Company or any person acting in concert with the Directors has borrowed or lent (excluding any borrowed relevant securities which have either been on lent or sold).
In this paragraph 11.3 reference to:
(iii) subscribing or agreeing to subscribe for securities;
(iv) the exercise or conversion, whether in respect of new or existing securities, of any securities carrying conversion or subscription rights;
For the purposes of this paragraph 11.3 a person is treated as "interested" in securities if he has long economic exposure, whether absolute or conditional, to changes in the price of those securities (and a person who only has a short position in securities is not treated as interested in those securities). In particular, a person is treated as "interested" in securities if:
Copies of the following documents will be available for inspection during usual business hours on any Business Day at the registered office of the Company from the date of this document up to the date of the AGM and at the place of meeting for 15 minutes prior to the Annual General Meeting and during the meeting:
Copies of the documents set out above (except (iv)) will also be available at the Company's website (www.ashmoregroup.com/investor-relations).
The table below sets out the sections of the 2016 Annual Report and the 2015 Annual Report which are incorporated by reference into this document, so as to provide the information required pursuant to the Takeover Code. As set out above, these documents will also be available at the Company's website (www.ashmoregroup.com/investor-relations) from the date of this document.
| Document / Section | Page |
|---|---|
| 2016 Annual Report | |
| – Remuneration report | 54 |
| – Audited consolidated accounts of Ashmore Group plc for the financial year ended 30 June 2016 | |
| Independent Auditor's report | 74 |
| Consolidated financial statements | 78 |
| Company financial statements | 82 |
| Notes to the financial statements | 85 |
| 2015 Annual Report | |
| – Remuneration report | 58 |
| – Audited consolidated accounts of Ashmore Group plc for the financial year ended 30 June 2015 | |
| Independent Auditor's report | 70 |
| Consolidated financial statements | 73 |
| Company financial statements | 77 |
| Notes to the financial statements | 80 |
Any Shareholder, person with information right or other person to whom this document is sent may request a copy of each of the documents set out above in hard copy form. Hard copies will only be sent where valid requests are received from such persons. Request for hard copies are to be submitted to Equiniti Registrars at Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA, Tel: 0871 384 2812 (International: +44 121 415 7047). Calls to this number cost 10p per minute plus your phone company's access charge. Lines open 8.30am to 5.30pm, Monday to Friday. All valid requests will be dealt with as soon as possible and hard copies mailed no later than two Business Days following such request being received.
Notice is hereby given that the 2016 Annual General Meeting of Ashmore Group plc will be held at Kingsway Hall Hotel, 66 Great Queen Street, London WC2B 5BX at 12 noon on Friday 21 October 2016 to consider and, if thought fit, to pass the following resolutions, which, in the case of resolutions 15, 16 and 17 will be proposed as special resolutions and, in the case of the other resolutions, will be proposed as ordinary resolutions. Resolutions 5 to 9 relating to the re-election and election of the Independent Non-executive Directors will be passed only if a majority of votes cast by Independent Shareholders are in favour, in addition to a majority of votes cast by all Shareholders being in favour. Resolution 18 will be voted on only by the Independent Shareholders of the Company. As Mark Coombs and his spouse are interested in the outcome of resolution 18 and as required by the Takeover Code, they will not vote on that resolution.
such authorities to apply until the end of next year's annual general meeting (or, if earlier, until the close of business on 31 December 2017) but, in each case, so that the Company may make offers and enter into agreements during the relevant period which would, or might, require shares to be allotted or rights to subscribe for or convert securities into shares to be granted after the authority ends and the Directors may allot shares or grant rights to subscribe for or convert securities into shares under any such offer or agreement as if the authority had not ended.
subject to any such limits or restrictions and make any arrangements which the Directors may consider necessary or appropriate to deal with treasury shares, fractional entitlements, record dates, legal, regulatory or practical problems in, or under the laws of, any territory or any other matter; and
(b) in the case of the authority granted under paragraph (a) of resolution 14 and/or in the case of any transfer of treasury shares which is treated as an allotment of equity securities under section 560(3) of the Companies Act 2006, to the allotment (otherwise than under paragraph (a) of this resolution) of equity securities up to an aggregate nominal amount of £3,536.86,
such authority to apply until the end of next year's annual general meeting of the Company (or, if earlier, until the close of business on 31 December 2017) but during this period the Company may make offers and enter into agreements which would, or might, require equity securities to be allotted and treasury shares to be sold after the authority given by this resolution ends and the Directors may allot equity securities and sell treasury shares under any such offer or agreement as if the authority had not ended.
such authority to apply until the end of next year's annual general meeting of the Company (or, if earlier, until the close of business on 31 December 2017) but during this period the Company may make offers and enter into agreements which would, or might, require equity securities to be allotted and treasury shares to be sold after the authority given by this resolution ends and the Directors may allot equity securities and sell treasury shares under any such offer or agreement as if the authority had not ended.
By order of the Board
Company Secretary 19 September 2016
(15) As soon as practicable following the AGM, the results of the voting at the meeting and the number of votes cast for and against and the number of votes withheld in respect of each resolution will be announced via a Regulatory Information Service and placed on the Company's website (www.ashmoregroup.com).
(16) A copy of this Notice of AGM has been sent for information only to persons who have been nominated by a member to enjoy information rights under section 146 of the Companies Act 2006 ("nominated persons"). The rights to appoint a proxy cannot be exercised by a nominated person, but only by the member. However, a nominated person may, under an agreement between him and the member by whom he was nominated, have a right to be appointed (or to have someone else appointed) as a proxy for the meeting. If a nominated person does not have such a right or does not wish to exercise it, he may have a right under such an agreement to give instructions to the member as to the exercise of voting rights.
The AGM will be held at Kingsway Hall Hotel, 66 Great Queen Street, London WC2B 5BX at 12 noon on Friday 21 October 2016. Kingsway Hall Hotel, 66 Great Queen Street, London WC2B 5BX
Ashmore Group plc 61 Aldwych London WC2B 4AE United Kingdom www.ashmoregroup.com
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