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Contacts

Schroders

Emma Holde

Maitland

William Clutt

ss ReroderResults t

efore tax £407

s per share 1

ar dividend 39

ows £3.2 billio

under manag

sset Manageme

ivate Banking

roup segment

before tax

er share (penc

end (pence per

s:

s

en Head o

terbuck

eleasrs plcto 31 Dec

7.3 million (20

15.9 pence (2

.0 pence per

on (2010: £27

ement £187.3

ent

ce)

r share)

of Corporate C

e c cember 2

010: £406.9 m

2010: 111.8 p

share (2010:

.1 billion)

3 billion (2010

Communicati

2011 (aud

million)

pence)

37.0 pence)

0: £196.7 billio

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on)

(0) 207 658 2

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2

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2011 £m

389.4

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uk

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Asset Mana

Asset Manafees to £36.656 basis poyears. Asse

While markperformancethe end of 2year in Institasset strategyear at £108

Retail investvolatility. As as a whole wended the ye

Private Ban

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Group

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Dividend

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Board chan

After more t3 May 2012down from thmade an impas a Senior A

ment Staver the level oability of the End yields on

ord lows. As a

background of 2010. Netositive at £3.2.7 billion).

agement

gement net r6 million (201ints (2010: 59

et Manageme

et volatility he remains stro2011. Togetheutional with £gies, and in e8.4 billion (201

tor demand wa result, gros

we had net ouear at £62.9 b

nking

king profit rebdoubtful debt doubled to £2r managemen

segment incual investmentscapital portfoliares and 5.2 m1.9 billion (201

is recommens on the Regpence).

nges

than nine yea2 and will be he Board at tportant contribAdviser to the

atement of governmenEurozone weigovernment ba result 2011

Schroders pet new busines2 billion (2010

revenue incre0: £72.6 millio9 basis pointnt profit befor

has impactedong with 70 per with our br£6.8 billion of equities despi10: £106.4 bil

was affected ss sales in ourutflows of £3.8billion (2010: £

bounded shat charges. Ne23.8 million (2nt ended the

urred a loss bs, principally io during the ymillion non-vo10: £1.8 billio

nding an uncgister at 30 M

ars as Chairmsucceeded b

the Annual Gebution to our e firm. During

nt debt in devighed heavily bonds, other was a particu

erformed wellss, whilst muc0: £27.1 billio

eased to £1,0on). As expects) reflecting tre tax was a re

d short-term per cent. of furoad product net inflows (2ite the markelion).

by growing cr Intermediary8 billion (2010£74.1 billion).

arply on the bet revenue inc2010: £10.1 myear at £16.0

before tax of £in the fourt

year in what woting ordinary n).

changed finaMarch 2012. T

man, Michael by Andrew Beeneral Meetinsuccess durinthe year we w

veloped econy on equity ma

than those dularly challeng

l, achieving ach reduced fr

on) and asset

041.5 million (cted, net revethe high leveecord £389.4

investment nds outperforrange and d

2010: £16.8 bet environmen

concerns ovey business de0: net inflows

back of recordcreased to £1million). Net

0 billion (2010

£5.9 million (2th quarter, owas a very loshares at a c

l dividend ofThis brings th

Miles will reeeson, the Sng. Alan has ng that time. welcomed As

omies, the imarkets througirectly impact

ging year for in

a profit before rom the excepts under man

(2010: £996.2enue marginsels of new bu4 million (2010

performancerming benchmistribution cap

billion). We sant. Assets und

er the macro-eclined as the£7.9 billion). A

d levels of ne14.3 million (new business: £16.2 billion

2010: profit £outweighed thow return envcost of £126.1

f 26.0 pencehe total divide

tire from the enior Indepenserved as ChHe will contin

shley Almanza

mpact of delevhout 2011. Inted by the sonvestors.

tax of £407.3ptionally stron

nagement end

2 million) desexcluding pesiness won i

0: £381.0 millio

e in some amark or peer pability, this rew high levelsder managem

economic ene environmentAssets under

ew business (2010: £103.3s was £0.2 b).

£15.8 million) he modest rironment. Aft1 million, shar

per share pend for the y

Board at thendent Directohief Investmennue to work wa as a membe

veraging on enterest rates

overeign debt

3 million, slighng result of thded the year

spite a declineerformance fen Institutionaon).

asset classesgroup over th

resulted in ans of net new bment in Institu

nvironment ant deterioratedr managemen

in the previo3 million) andbillion (2010:

as mark to mreturns we after the purchareholders’ eq

payable on 1year to 39.0 p

e Annual Genor. Alan Brownt Officer sinc

with some of oer of the Boar

economic growere negativcrisis in Euro

htly ahead of he previous ye

at £187.3 bil

e in performaees were lowel in the past

s, our long-tehe three yearnother succesbusiness in mutional ended

nd equity mad and for the ynt in Intermed

ous year and profit before £2.4 billion) a

market lossesachieved on ase of 3.4 miluity at the end

11 May 2012pence per sh

neral Meetingwn will also sce 2005 and our largest clierd.

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nce er at two

erm rs to ssful

multi-the

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Outlook

Since the yesome of thepositive net process of re

We will contbelieve that tfor our busin

Copies of thExecutive, ato discuss thThe webcasthe presentawww.schrod

The Annual

Forward-lo

This announmay containbusinesses current expeshould not pwords ‘targeare intendedor developmforecasts. Fthem at the looking statein the Annuprojection of

ear end, the e problems oflows in both educing gove

tinue to investhe higher sh

ness in the UK

his announceand Kevin Parhe Group’s rest can be viewation or particders.com/ir.

Report and A

ooking state

ncement, the n forward-looof the Group

ectations and place undue reets’, ‘plans’, ‘bd to identify suments to di

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tone in markof the Eurozo

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and Accountsial performan

kets has improne. Retail invand Intermedwill be a long

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ailable on theancial Officer,m. GMT on Tww.schroders.ve webcast, a

be available o

ort and Accouents with respements and fs but they relaem. Without lects’, ‘aims’ oooking statemlly from thos and forecasnt. The Direclt of new infor

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Thursday, 8 M.com/ir and wa replay will b

on the Schrod

unts for 2011pect to the fforecasts invate to events limitation, anyor ‘anticipatesments. There ose expressests are based ctors do not mrmation, futureSchroders we

estors have snd has recov

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and markets nt are fully jus

website: wwwresentation a

March 2012 atwww.StreetEvbe available fr

ders website: w

1 from which financial condvolve risk and

and depend y statements s’ or the negaare a numbeed or implieon the Direct

make any unde events or otebsite should

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w.schroders.cnd webcast fot 31 Greshaments.com. Forom midday o

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it is extracteddition, resultsd uncertainty upon circumpreceded or ftive of these

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f progress in what and we ikely to rema

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ers.com on 23

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followed by oterms and othat could cauard-looking sview and inforupdate or rev

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el Dobson, Cment commundon, EC2V 7Qunable to atte8 March 2012

3 March 2012

chroders webns, strategy aey are basede future and r that include her similar te

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We ities

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Conso

for the yea

Revenue

Cost of sales

Net gains on

Net revenue

Operating ex

Operating p

Net finance i

Share of pro

Profit before

Tax

Profit after t

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Basic

Diluted

Dividends p

1 Non-GAAP 2 Interim and

lidated

ar ended 31

s

n financial instru

e1

xpenses

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income

ofit of associates

re tax

tax

er share

per share2

measure of pfinal dividend

income

December

uments and oth

s and joint vent

performance. s declared du

e statem

2011

her income

tures

ring the year.

ment

2011 £m

1,501.9

(363.3)

14.0

1,152.6

(761.8)

390.8

14.5

2.0

407.3

(91.5)

315.8

115.9p

111.9p

39.0p

2

1,43

) (35

6

1,15

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38

1

40

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31

111

108

32

4

010£m

39.3

52.7)

69.2

55.8

74.0)

81.8

9.6

15.5

06.9

95.7)

11.2

1.8p

8.3p

2.0p

Conso

for the yea

Profit for the

Net exchange

Actuarial (los

Net fair value

Net fair value

Tax on items

Other comp

Total compr

lidated

ar ended 31

e year

e differences o

ses)/gains on d

e movement ari

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taken directly t

rehensive (los

rehensive inco

statem

December

on translation of

defined benefit

sing from avail

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to other compre

sses)/gains fo

ome for the ye

ent of c

2011

f foreign operat

pension schem

able-for-sale fin

able-for-sale fin

ehensive incom

r the year net

ear net of tax

compre

tions after hedg

mes

nancial assets

nancial assets

me

of tax

hensive

ging

held by joint ve

e incom

entures

me

2011 £m

315.8

2.1

(0.5)

(16.3)

(3.5)

(1.7)

(19.9)

295.9

20£

31

27

8

0

(

(12

23

334

5

010 £m 1.2

7.9

8.0

0.8

1.0)

2.4)

3.3

4.5

Conso 31 Decemb

Assets Cash and casTrade and othFinancial assAssociates anProperty, planGoodwill andDeferred tax Retirement b

Assets backCash and casFinancial ass

Total assets

Liabilities Trade and othFinancial liabCurrent tax Provisions Deferred tax Retirement b

Unit-linked l

Total liabiliti

Net assets

Equity

lidated

ber 2011

sh equivalents her receivables

sets nd joint venturent and equipme

d intangible ass

enefit scheme

king unit-linkedsh equivalents

sets

s

her payables bilities

enefit scheme

iabilities

es

statem

s

es ent ets

surplus

d liabilities

deficits

ent of fiinancial positioon

2011 £m

2,338.7

411.2 2,165.2

58.4 16.2

144.1 50.1 55.7

5,239.6

673.6

7,971.6 8,645.2

13,884.8

580.9

2,642.1 51.8 52.7 2.6 7.9

3,338.0

8,645.2

11,983.2

1,901.6

1,901.6

20£

2,0039

2,3861

1453

5,10

707,568,27

13,37

572,63

34

3,30

8,27

11,57

1,79

1,79

6

010 £m

04.090.588.867.09.3

42.554.034.400.5

07.765.773.4

73.9

77.031.538.044.42.77.2

00.8

73.4

74.2

99.7

99.7

7

Consolidated statement of changes in equity

for the year ended 31 December 2011

Year ended 31 December 2011

Share capital

£m

Share premium

£m

Own shares

£m

Net exchange

differences £m

Associates and joint ventures

reserve £m

Fair value

reserve £m

Profit and loss

reserve £m

Total £m

At 1 January 2011 290.4 84.7 (199.1) 122.1 35.5 50.8 1,415.3 1,799.7 Profit for the year - - - - 2.0 - 313.8 315.8 Net exchange differences on translation of foreign operations - - - 1.1 - - 0.1 1.2 Net exchange differences on hedging of foreign operations - - - 1.0 - - - 1.0 Transfer to the income statement of cumulative foreign exchange on derecognition of foreign operations

- - - (0.1) - - - (0.1)

Actuarial losses on defined benefit pension schemes - - - - - - (0.5) (0.5) Net fair value movements on available-for-sale financial assets taken to other comprehensive income

- - - - (3.5) (10.6) - (14.1)

Transfer to income statement on derecognition or impairment of available-for-sale financial assets

- - - - - (5.4) - (5.4)

Net exchange differences on available-for-sale financial assets - - - (0.3) - - - (0.3) Tax on items taken directly to other comprehensive income - - - - - 0.1 (1.8) (1.7) Other comprehensive income/(loss) - - - 1.7 (3.5) (15.9) (2.2) (19.9) Shares issued 0.5 3.1 - - - - - 3.6 Shares cancelled (8.4) - - - - - (16.0) (24.4) Share-based payments - - - - - - 42.7 42.7 Tax in respect of share schemes - - - - - - (6.1) (6.1) Dividends attributable to owners of the parent - - - - - - (104.8) (104.8) Dividends attributable to non-controlling interests - - - - - - (3.3) (3.3) Own shares purchased net of disposals - - (101.4) - - - (0.3) (101.7) Transactions with owners (7.9) 3.1 (101.4) - - - (87.8) (194.0) Transfers - - 128.0 - (8.2) - (119.8) - At 31 December 2011 282.5 87.8 (172.5) 123.8 25.8 34.9 1,519.3 1,901.6

8

Year ended 31 December 2010

Share capital

£m

Share premium

£m

Own shares

£m

Net exchange

differences£m

Associates and joint ventures

reserve£m

Fair value reserve

£m

Profit and loss reserve

£mTotal

£m At 1 January 2010 288.8 72.5 (89.7) 96.0 30.7 57.9 1,192.8 1,649.0 Profit for the year - - - - 15.5 - 295.7 311.2 Net exchange differences on translation of foreign operations - - - 50.5 - - (0.3) 50.2 Net exchange differences on hedging of foreign operations - - - (21.2) - - - (21.2) Transfer to the income statement of cumulative foreign exchange on derecognition of foreign operations

- - - (1.1) - - - (1.1)

Actuarial gains on defined benefit pension schemes - - - - - - 8.0 8.0 Net fair value movements on available-for-sale financial assets taken to other comprehensive income

- - - - (1.0) 14.0 - 13.0

Transfer to income statement on derecognition or impairment of available-for-sale financial assets

- - - - - (11.1) - (11.1)

Transfer of cumulative foreign exchange on derecognition or impairment of available-for-sale financial assets

- - - 0.9 - - - 0.9

Net exchange differences on available-for-sale financial assets - - - (3.0) - - - (3.0) Tax on items taken directly to other comprehensive income - - - - - (10.0) (2.4) (12.4) Other comprehensive income/(loss) - - - 26.1 (1.0) (7.1) 5.3 23.3 Shares issued 1.6 12.2 - - - - - 13.8 Share-based payments - - - - - - 31.1 31.1 Tax in respect of share schemes - - - - - - 11.2 11.2 Dividends attributable to owners of the parent - - - - - - (87.6) (87.6) Dividends attributable to non-controlling interests - - - - - - (0.4) (0.4) Own shares purchased net of disposals - - (151.9) - - - - (151.9) Transactions with owners 1.6 12.2 (151.9) - - - (45.7) (183.8) Transfers - - 42.5 - (9.7) - (32.8) - At 31 December 2010 290.4 84.7 (199.1) 122.1 35.5 50.8 1,415.3 1,799.7

Conso

for the yea

Net cash from

Cash flows f

Aggregate ca

Acquisition of

Net purchase

Net disposal/

Non-banking

Distributions

Other flows

Net cash fro

Cash flows f

Proceeds fromPurchase of n

Net acquisitio

Net (repayme

Dividends pa

Other flows

Net cash use

Net increase

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Effect of exch

Closing cash

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Cash backing

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Cash equival

The cash bathe life comp

lidated

ar ended 31

m operating act

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om/(used in) in

from financing

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ents)/proceeds

aid

ed in financing

e in cash and c

h and cash equ

in cash and ca

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g unit-linked lia

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December

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of borrowings

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cash equivale

uivalents

ash equivalents

nges

quivalents

quivalents con

bilities

alents held by t

ked liabilities cwn corporate p

ow state

2011

posal of subsidi

s

ment and intang

ts

d joint ventures

ties

y shares r cancellation

nts

s

nsists of:

he Group:

cannot be usepurposes.

ement

iaries

gible assets

ed by the Grooup as it is no

ot legally entitle

2011 £m

426.8

-

-

(12.7)

114.6

15.0

9.0

-

125.9

3.6

(24.4)

(101.7)

(18.6)

(104.8)

(4.8)

(250.7)

302.0

2,711.7

302.0

(1.4)

3,012.3

673.6

1,396.9 941.8

2,338.7

3,012.3

ed to draw on

2010£m

1,066.8

10.4

(14.3

(10.0

(15.8

7.3

9.7

(2.1

(14.8

13.8

(151.9

18.6

(87.6

(2.8

(209.9

842.1

1,769.3

842.1

100.3

2,711.7

707.7

1,446.2

557.8

2,004.0

2,711.7

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31 December

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Asset ement

£m

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(335.4)

17.6

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6.7

389.4

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of costs to indierformance analigns the cha

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£m

106.3 35.9

142.2

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-

114.3

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23.8

p. Asset Mans, fixed incomed funds of hedded to high nreasury manaement.

purposes to t. One of the kividual businend to provide arge with the

Group £m

0.4 -

0.4

- - -

(3.6)

(3.2)

(12.8) (16.0)

14.8

(4.7)

(5.9)

nagement e securities, dge funds. et worth agement

the Group’s key measuresess segmentsmanagers wiresources

Tota £m

1,466.035.9

1,501.9

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r business anGroup Risk ur assessmennvironment.

ently, we

risks facing tnon-executive

e Group. ential impactsrformance ancontrol

The

ommittee, ent and rivate Bankine Group Risknt frameworkt risk

n Investmentave risk takes the

ds expected

s the third line anagement

l of risk. For rnal risks facnancial

otable ough reportind daily report

opment revieweparations for business orporate

21

nd

nt

the e

s nd

ng. k k,

t,

ced

ng t of

ws; r

We devotedenvironmen

We have incquantificatio

We have exCommittee

Key risks

The followinthe risks tha

Market, inv

We face riskas both prinhold investmsecurities; abonds, equManagemen

Description Market risk Market risk amovements, in the value oand a declineunder manag Shareholdersand expensesubsidiaries acurrencies anexchange rat

Investment pThe managea core skill ofthat portfoliosinvestment oadversely affbusiness.

d resources tnt, establishin

creased the on of Pillar 2

xtended the Gon a quarter

ng tables sumat are curren

vestment pe

ks from movncipal and agments in funand through ities, funds ont and Privat

of key risk

arises from mawhich can cau

of principal inve in the value gement.

s’ funds, net fees of the Groupare denominand are therefote risk.

performance ment of investf the Group. Ts will not meetbjectives. This

fect levels of n

to the managng a team to

sophisticatioregulatory c

Group Risk Crly basis.

mmarise keytly considere

erformance

vements in thgent. We havnds; in our Pr

the Group’sof hedge funte Banking in

arket use a fall vestments of assets

ee income p’s overseas

ated in local ore subject to

risk tment risk is

This is the risk t their s can

net new

gement of rismonitor, pre

on of statisticapital. The F

Committee’s

business rised to be mos

e and liquid

he financial mve principal erivate Bankins Investment ds, propertyn respect of t

How we ma Our geograwith solutioindividual m Group manprincipal invcapital inveThese decisFinancial O Income andsubsidiariestransactionaBanking, mBanking Ris

The Schrodinvestment reporting dioversight an We adhere investment Individual pfund managidentified an Recognisingproduct set one fund or Investment manageme

sks associatee-empt and re

cal modellingFinancial revi

attendees to

sks. The list ist relevant to

ity risks

markets in wexposure in tng business,t capital, whey, and privatethe assets w

anage this ris

aphically diversns tailored to

market depend

agement reguvestments are

estments may sions are take

Officer.

d expenses ars. We also useal and investmarket risk is msk Committee

der Investmenrisks across erectly to the Gnd challenge t

to a clearly detargets within

portfolio perforgers and manand mitigated.

g that not all p which reducer asset class.

performance ent process.

ed with Eurozeact to deve

of risk outcoiew in the An

o include all

is not exhausour busines

which we opethe life comp, where we h

ere we hold be equity. Thewe manage o

sk

sified, broad pa variety of m

dencies.

ularly reviews e managed witbe hedged in

en by the Grou

re, where posse forward forement exposuremonitored and

.

t Risk Frameweach of the asGroup Head ofto this process

efined investmn stated risk pa

rmance, valuaagement on a

products will oes the concent

is monitored a

zone instabillopments. Its

omes which hnnual Report

members of

stive but aims.

rate, arising pany in Assehold bank papbank paper, gre is agency n behalf of o

product range arket conditio

all holdings wthin approved respect of ma

up Capital Com

sible, matchedign exchange

e to currency mmanaged at a

work provides set classes mf Risk providess.

ment process warameters.

tions and risk regular basis

outperform all ttration of risk o

as part of our

lity and the ws work contin

has resultedt covers this

the Group M

ms to provide

from holdinet Managemeper and govegovernment

y exposure inour clients.

enables us toons and serves

within Group calimits. The Gr

arket risk and cmmittee, chair

d in the currene contracts to mmovements. Ina local level an

review and chmanaged by th

s further indep

which seeks to

profiles are ms, allowing issu

the time, we oon the perform

investment pe

weak economnues.

in improvedin more deta

Management

information

g investmenent where weernment and corpora

n Asset

o provide cliens to diversify

apital. All roup’s seed currency risk. red by the Chi

ncy of individuamitigate n Private nd by the Priva

hallenge of e Group. A teapendent

o meet

monitored by ues to be

offer a diversifmance of any

erformance ris

22

mic

d ail.

on

nts e

ate

ts

ef

al

ate

am

ied

sk

Liquidity risLiquidity risk cannot be geredemptions they arise. Lia result of mainherently illiq

Credit risk

We face riskcounterpartadditionally

Description Credit risk We face credcounterparty We also faceby Private Ba

Operationa

Operationaland the opemanagemen

Description Operational Operational rfailure of signundertaken b We have a nsupplier relatimportant parparticularly inadministratio

k is the risk tha

enerated to meor other obligquidity issuesarket conditionquid investme

k

ks from the dty risk in relay faces princ

of key risk

dit risk as a resexposure.

e credit risk thranking.

al risk

l risk arises ieration of ount is respons

of key risk

risk risk could arisenificant busineby Schroders.

umber of outstionships that rt of our businn respect of fun services.

at cash flows eet ations as

s can arise as ns or through

ents.

default of coation to the fiipal credit ris

sult of

rough lending

in our investr infrastructusible for ope

e from the ess processes

sourced are an ess model, nd

To mitigate liquidity of arequiremenWe also rev Each of ourcapital requour anticipa We monitorjurisdictionsLiquidity Adscenarios.

unterpartiesinancial transsk on its lend

How we ma In order to mwith limits eoverall limit Where posscounterpart All counterpfollowing chrating agencases. In Private Bin the form managed a

tment managure and as a rational risk

How we ma

All new bussuite of ope Prior to enteand, prior toagreed serv

this risk withia portfolio’s unnts. We activelview products

r regulated suuirements. In aated needs, ta

r Private Banks concerned. Idequacy Asse

s to our princsactions in tding activitie

anage this ris

manage this rexpressed in tets in respect o

sible, we seekties.

parties are revhanges to theicy outputs in

Banking, we mof cash, portfo

against the per

gement activconsequenccontrols. anage this ris

siness processerational contr

ering outsourco engagementvice levels.

n client portfonderlying invesly monitor marand portfolios

bsidiaries andaddition, we mking account o

king liquidity agn the UK, thisssment that m

cipal financiatheir portfolioes. sk

isk we activelyerms of value f both principa

k to diversify o

viewed on a rer financial meassessing cou

mitigate credit rolio investmenrformance of t

vities, distribuce of our div

sk

ses are subjecrols to mitigate

cing arrangemts, maintains a

lios, we seek tstments with itrkets for indicas to identify ca

d the Group asmaintain suffici

of the risks we

gainst the regs includes the monitors liquidi

al transactionos and funds

y monitor counand term to m

al and agency

our exposure a

egular basis antrics. We activunterparties. C

risk where posnts or propertyhe collateral.

ution channeersified busi

ct to review in e potential risk

ments, the Groa programme

to match, whets anticipated ators of declinapacity constra

s a whole meeent liquidity ine face.

ulatory requiremaintenance ity against a ra

ns. Our cliens. Private Ba

nterparty credmaturity. The Gy counterparty

across differen

nd limits are avely monitor mCollateral is ta

ssible throughy. Credit risk is

els, product iness model

order to identks.

oup undertakesof assessmen

ere possible, tliquidity

nes in liquidity.aints.

et regulatory n our assets fo

ements in the of an Individuange of stress

ts also face anking

ditworthiness Group sets risk.

nt

amended market data an

ken in some

collateralisatis monitored an

developmen. Local

tify a suitable

s due diligencnt against

23

he

.

or

al s

nd

ion nd

nt

ce

Distribution Distribution rmanagementdifferent distrproducts. Wethree channeoften advisedclients, intermbrokers and iprivate clients Product riskProduct risk athe developmmeet change Product risk ccapacity consassets underparticular assdifficult to tra Technology We rely on teprofessionalsinfrastructure

risk isk arises fromt and concentribution channe access clienels: institutionad by consultanmediated throuindependent as.

k arises from co

ment of new pres in client dem

can also arisestraints wherer managementset class makede efficiently i

risk echnology ands to maintain oe.

m relationship ration across

nels and ts through

al clients, nts; retail ugh banks, advisers; and

omplexity and roducts to mand.

e from e the size of t in a es it more in the market.

d qualified our

The broad rany sales c No single c

We have a review proc We activelyclosing prod

Our technotested technable to prov Outsource pthem to mabefore enteongoing basthe busines

range of districhannel.

lient accounts

dedicated procedure.

y monitor poteducts to new i

logy is partly onology from ovide the requir

partners are aaintain the quaering into new sis. Continuity

ss.

bution channe

s for more than

oduct developm

ntial capacity nvestment in

outsourced anutsource partnred level of se

an important pality and continarrangements

y and business

els mitigates a

n one per cent

ment team an

constraints ancertain circum

nd our platformners assessedrvice.

art of our businuity of services, and performs resumption p

against a key d

t. of total reve

d a product ap

nd may mitigamstances.

m utilises well d to be financi

iness model ae. Due diligenc

mance is reviewplanning is in

dependency o

enue.

pproval and

ate them by

established, ally stable and

and we work wce is undertakwed on an place across

24

on

d

with ken

People risk Our businessensure we emappropriate toneeds. We expect ouwith integrity, GeographicaOur businessregion whichaggregate risa result of locbusiness cus

Legal risk The risk that counterpartieobligations aproceedings.

Regulatory aThe risk of lomeet regulatojurisdictions ioperates.

s depends on mploy people o our changin

ur employees , which is a co

al diversity ris is broadly div, whilst mitigask, introduces cal laws, regustoms and trad

Schroders or es fail to meet nd the risk of

and complianoss arising fromory requiremein which the G

people. We with skill sets g business

to behave ore value.

isk versified by ting local risks as lations, ditions.

their legal legal

nce risk m failure to ents in those Group

We recruit adeepens an To mitigate appropriateWe also opsingle pools Clear objecreview proccan be mot We actively

We employinternationa The Group matters giviaction. We keep ouparticularly Europe and An indepenassessing trisk mitigati We rely on the obligatio Semi-annuathat any disthe Genera We maintaiour Compliaobligations.

and develop snd our investm

people risks, e deferred benperate from mas of talent and

ctives are set fcess. This alloivational and i

y promote ethi

y local people wally around the

Risk Committing cause for

ur employeesextra-territoria

d the US.

ndent team, rethe impact of mon.

our employeeons we assum

al confirmationspute or potenal Counsel.

n compliance ance function . Compliance w

specialist skillsment and distri

we have comnefits, targetedany internationd individual co

for employeesws us to identincrease the r

cal standards

with local expe Group.

tee receives reconcern and r

up to date on al legislation w

porting to the material issue

es, with suppome and our com

ns are obtainential claim has

arrangementssupports busiwith relevant r

s as the rangebution strateg

petitive remund at key emplonal centres, whuntry stability.

s and we meastify employee etention of tal

and train our

ertise and also

eports from linrecommendati

international which typically

Group Head os and impleme

rt from our legmpliance with

ed from represbeen brought

s across our gness manageregulatory req

e of our producgies develop in

neration plansoyees.

which reduces .

sure success development ented people.

employees ac

o move emplo

ne managemeions for appro

regulation reley emanates fro

of Risk, is resenting approp

gal team, to cothem.

sentatives arot promptly to th

global offices, ement in meetquirements is m

ct offerings nto new areas

s, with

reliance on

in the annual initiatives whi.

ccordingly.

oyees

ent regarding opriate remedia

evant to them,om the UK,

ponsible for priate and time

onsider carefu

und the Grouphe attention of

through whiching its monitored.

25

.

ch

al

,

ely

ully

p f

h

Current as

The key congeopolitical

The horizontvertical axis Group undercostly.

1. Peoplepractic

2. GeogrDisaste

3. Regula4. Operat5. Operat

and bu6. Legal r7. Operat

infrastr8. Operat

delivermanag

9. Counte10. Credit 11. Liquidi12. Investm13. Market

Emerging

Emerging riGroup. Thesand apply mare currentllikelihood, tcircumstan

1. Double 2. Eurozon3. Major b4. Market 5. Investm6. Financia

Scheme7. Vickers 8. Capital 9. AIFMD 10. Financia11. Basel II12. MiFID II13. RDR im14. Dodd-F15. Terroris

ssessment o

ntinuing riskl environmen

tal axis considconsiders whrtakes additio

e risk: Employmces and workplaraphical diversiters and public atory and comptional risk: Disttional risk: Clieusiness practicerisk tional risk: Tecructure failures tional risk: Exery and process gement erparty credit rilending risk ity risk ment performat risk

risks

isks are thosse are the ha

mitigation anly our focus timeframe ances change

dip recession ne crisis ank failure liquidity crisis

ment performanal Services Come review report impact controls in the impact al transaction taI impact I/PRIPS/UCITS

mpact Frank, EMIR (Osm

of key cont

ks outlined abnt as summa

ders if the prohether the potonal work to a

ment ace safety ty: safety pliance risk ribution risk nts, products es

hnology and

cution,

sk

nce risk

se with unceardest to def

nd managemeof attention

nd impact onand mitigatio

ce mpensation

Eurozone

ax

S V impact

TC market refo

inuing risks

bove have bearised in the

obability of eacential cost of ddress those

rtain impact,fine and chanent plans. Thare set out b

n our busineson plans are

orm)

s

een assessediagram bel

ch key risk is the key risk hrisks that it c

, probability nge regularlyhe external ebelow. The diss. The estim

e developed.

ed in the lightow.

heightened dhas increasedonsiders to be

and timeframy. We analysemerging riskiagram indic

mated impac

t of the curre

due to current due to currene potentially h

me that couldse each risk aks and key re

cates our asst and likeliho

ent economi

t market condnt market conheightened an

d cause riskand, if needeegulatory chsessment of ood may cha

c and

ditions. The nditions. The nd/or more

k to the ed, develop hanges that the

ange as

26

Directo

To the best o

– The congive a trincluded

– The annof Schroprincipa

– So far aunaware

– They hathemselthat info

Directors:

Michael Mile

Michael Dob

Alan Brown

Philip Mallinc

Kevin Parry

Massimo To

Andrew Bee

Ashley Alma

Luc Bertrand

Robin Bucha

Lord Howard

Merlyn Lowt

Bruno Schro

7 March 201

ors’ resp

of their knowle

nsolidated finarue and fair vied in the conso

nouncement inoders plc and l risks and un

s each Directe; and

ave each takeves aware of

ormation.

es

bson

ckrodt

osato

eson

anza

d

anan

d of Penrith

ther

oder

12

ponsibil

edge and bel

ancial statemeew of the ass

olidation taken

ncludes a fairthe undertak

ncertainties tha

tor is aware, t

en all the stepsf any relevant

Chairma

Chief Ex

Chief In

Head of

Chief Fi

Executiv

Senior I

Indepen

Indepen

Indepen

Indepen

Indepen

Non-exe

lity state

ief, each of th

ents of Schrodsets, liabilities,n as a whole;

r summary of ings includedat they face;

here is no rele

s that ought toaudit informa

an

xecutive

vestment Off

f Private Bank

nancial Office

ve Vice Chair

ndependent D

ndent non-exe

ndent non-exe

ndent non-exe

ndent non-exe

ndent non-exe

ecutive Direct

ement

he Directors lis

ders plc, prep, financial pos

the developmd in the conso

evant audit in

o have been tation and to es

ficer

king

er

rman and Glo

Director

ecutive Direct

ecutive Direct

ecutive Direct

ecutive Direct

ecutive Direct

tor

sted below co

pared in accorsition and prof

ment and perflidation taken

nformation of w

taken by themstablish that t

obal Head of D

tor

tor

tor

tor

tor

onfirms that:

rdance with IFfit of Schrode

formance of th as a whole a

which the Com

m as Directorshe Company’

Distribution

FRS as adopers plc and the

he business aand a descript

mpany’s aud

s in order to my’s auditors are

ted by the EUe undertaking

and the positiotion of the

itors are

make e aware of

27

U, s

on

Five-ye

Profit before t

Tax

Profit after ta

Earnings pe

Basic earning

Diluted earnin

Dividends (I

Cost (£m)

Pence per sh

Total equity

Net assets p

*Dividends peshareholders o**Net assets p

Assets

£ billion

31 Decembe

Gross inflows

Gross outflow

Net flows

Investment re

31 Decembe

ear con

tax

ax

er share:

gs per share

ngs per share

FRS):

hare*

(£m)

per share (pen

er share are thoon the register per share are ca

s under

er 2010

s

ws

eturns

er 2011

solidate

nce)**

ose amounts apat the specifiedalculated by us

manag

ed finan

pproved by the d dates. sing the actual n

gement

ncial su

2011£m

407.3

(91.5)

315.8

2011Pence

115.9

111.9

2011

104.8

39.0

1,901.6

673

shareholders t

number of shar

– 2011

To

19

5

(5

(1

18

mmary

2010£m

406.9

) (95.7

311.2

2010Pence

111.8

108.3

2010

87.6

32.0

1,799.7

620

to be paid withi

res at the year-

flows

otal Insti

96.7

59.3

56.1)

3.2

12.6)

87.3

0 m

200£m

9 137.

7) (41.

2 95.

0 e

200Penc

8 34.

3 34.

0 200

6 84.

0 31.

7 1,649.

0 57

n the year on a

-end date.

tutional I

106.4

23.9

(17.1)

6.8

(4.8)

108.4

09 m

200£

.5 123

.8) (51

.7 71

09 ce

200Pen

.3 27

.2 27

09 200

.9 86

.0 31

.0 1,632

71 56

a per share bas

ntermediary

74.1

31.1

(34.9)

(3.8)

(7.4)

62.9

08 £m

20£

3.1 39

1.8) (8

1.3 30

08 ce

20Pen

7.5 10

7.3 10

08 20

6.7 7

1.0 2

2.2 1,69

69 5

sis to the

PrivaBanki

1

(

(

1

28

007 £m 2.5

88.8)

3.7

007 nce

4.8

3.2

007

4.9

6.5

6.2

576

ate ing 6.2

4.3

(4.1)

0.2

(0.4)

6.0

Income

Cost: net reve

Compensatio

Bonus: pre-b

Return on av

Return on av

Exchan

Sterling:

Euro

US dollar

Swiss franc

Australian do

Hong Kong d

Japanese ye

Singaporean

e and c

enue ratio

on cost: operati

onus operating

verage capital (p

verage capital (p

nge rate

ollar

dollar

n

dollar

cost met

ng revenue rat

g profit

pre-tax)

post-tax)

es - clo

trics for

tio

sing

r the Gr

2011

1.20

1.55

1.45

1.52

12.07

119.57

2.02

roup

2010

1.17

1.57

1.46

1.53

12.17

126.98

2.01

0 200

7 1.1

7 1.6

6 1.6

3 1.8

7 12.5

8 150.3

1 2.2

2011 66%

44%

39%

22%

17%

09 200

3 1.0

61 1.4

67 1.5

80 2.0

52 11.

33 130.3

27 2.0

2067

45

40

24

18

08 20

03 1

44 1

53 2

06 2

14 15

33 222

07 2

29

010 7%

5%

0%

4%

8%

007

.36

.99

.25

.27

.52

.38

.87