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Annual Report andAccounts 2021Schroder InvestmentManagement NorthAmerica LimitedYear ended 31 December 2021Registered Number: 02334190
Schroder Investment Management North America LimitedAnnual Report and Accounts 2021ContentsPageOfficers and professional advisers1Strategic report2Directors' report4Independent auditor’s report to the member ofSchroder Investment Management North America Limited6Income statement10Statement of comprehensive income10Statement of financial position11Statement of changes in equity12Cash flow statement13Notes to the financial statements14
Schroder Investment Management North America LimitedAnnual Report and Accounts 20211Officers and professional advisersDirectorsPaul ChislettLance DeLucaAndrew MoscowChristopher TaylorCompany SecretarySchroder Corporate Services LimitedRegistered Office1 London Wall PlaceLondonEC2Y 5AUIndependent AuditorsErnst & Young LLP25 Churchill PlaceLondonE14 5EY
Schroder Investment Management North America LimitedAnnual Report and Accounts 20212Strategic reportThe Directors present their Strategic report on Schroder Investment Management North America Limited (theCompany) for the year ended 31 December 2021.Results and review of the businessThe profit for the year, after income tax, was 9.9 million (2020: 7.5 million profit after income tax).The principal activities of the Company are investment management services. The Company’s investmentmanagement services business continued during the year. The Company’s investment principles are expected toremain unchanged.The Directors consider the results and the Company's financial position at 31 December 2021 to be satisfactory.The Company is authorised and regulated by the Financial Conduct Authority and is registered with the Securitiesand Exchange Commission in the United States of America. It is also registered with the Alberta SecuritiesCommission, British Columbia Securities Commission, Manitoba Securities Commission, Nova Scotia SecuritiesCommission, Ontario Securities Commission, Quebec Securities Commission, and Saskatchewan Financial ServicesCommission in Canada and the Monetary Authority of Singapore.Economic uncertainty driven by the Covid-19 pandemic remained a risk in 2021. The Covid-19 pandemic continues tohave an effect on many aspects of people’s lives and continues to impact investor sentiment.The Company and the Schroders plc Group remained resilient throughout the pandemic and there has been nosignificant impact on business operations. While the ongoing effects of the pandemic and more recent geopoliticalshifts on the world economy and central policy may cause more volatility in financial markets, the Company remainswell placed to weather future challenges.Directors’ duties – compliance with s172 of the Companies Act 2006Section 172 of the Companies Act 2006 requires a director of a company to act in the way he or she considers, in goodfaith, would most likely promote the success of the company for the benefit of its members as a whole. In doing thissection 172 requires a director to have regard, amongst other matters, to the: likely consequences of any decisions in the long-term;need to foster the company’s business relationships with suppliers, customers and others;impact of the company’s operations on the community and environment;desirability of the company maintaining a reputation for high standards of business conduct, andneed to act fairly as between members of the company.To discharge their section 172 duties the directors had regard to the factors set out above in making the principaldecisions taken by the Company.During the year, the Board decided not to pay a dividend in light of the changing regulatory environment andcontinues to monitor the Company’s capital and liquidity positions.Due to the structure of the Schroders Group stakeholder engagement also took place using Group resources, in linewith agreed delegations. For details of the engagement that takes place with the Company’s stakeholders at Grouplevel, please refer to the Schroders plc annual report and accounts for the year ended 31 December 2021 (‘theSchroders Report’).
Schroder Investment Management North America LimitedAnnual Report and Accounts 20213Strategic report (continued)Principal risks and uncertaintiesFrom the perspective of the Company, the principal risks and uncertainties are integrated with the principal risks ofSchroders plc’s other subsidiary undertakings which, with Schroders plc, form the Schroders plc Group (Group) andare not managed separately. Accordingly, the principal risks and uncertainties of the Group, which include those ofthe Company, are discussed in the “Key risks and mitigations” in the Strategic Report and “Risk and internalcontrols“ within the Governance section of the Schroders report for the year ended 31 December 2021. TheSchroders Report does not form part of this report.Key performance indicatorsThe Directors of the Group manage the Group’s operations on a divisional basis. For this reason, the Company’sDirectors believe that analysis using key performance indicators for the Company is not necessary or appropriatefor an understanding of the development, performance or position of the business of the Company. Thedevelopment, performance and position of the Group, which includes the Company, is discussed in the “Strategicreport” in the Schroders Report. The Schroders Report does not form part of this report.Approved by the Board of Directors and signed by its order by:Ria Vavakis, Authorised signatory forSchroder Corporate Services LimitedCompany Secretary17 March 2022
4Schroder Investment Management North America LimitedAnnual Report and Accounts 2021Directors’ reportThe Directors present their report and the audited financial statements of the Company for the year ended 31December 2021. The information contained in the Strategic report and the Statement of Directors’ responsibilitiesforms part of this Directors’ report.General informationThe Company is a private limited company, limited by shares incorporated and domiciled in England and Wales.The Company’s ultimate parent undertaking and controlling entity is Schroders plc, which together with theCompany and Schroders plc’s other subsidiary undertakings, form the Group.The Company continues to operate a branch office in Singapore.DividendsIn respect of the years ended 31 December 2021 and 31 December 2020, no dividends were paid or proposed.Risk management and use of financial instrumentsThe risk management processes of the Company are aligned with those of the Group as a whole. Details of theGroup’s risk management processes are outlined in the “Key risk and mitigations” section and “Risk and internalcontrols” within the Governance section of the Schroders Report. The Company’s specific risk exposures tofinancial instruments are explained in note 12 to the financial statements. The Schroders Report does not formpart of this report.Going concernTaking all the above factors into consideration, including the nature of the Company and its business, theDirectors are satisfied that, at the time of approving the financial statements, there is a reasonable expectationthat the Company has adequate resources to continue in operational existence for 12 months from the date theAnnual Report and Accounts are signed. For this reason the Directors continue to adopt the going concern basisin preparing the financial statements.DirectorsThe Directors of the Company who have served throughout the year are set out on page one.Directors’ liability insuranceDirectors’ and Officers’ liability insurance is taken out by Schroders plc, the Company’s ultimate parentundertaking, for the benefit of the Directors of the Company.To the best of the Directors’ knowledge there is no relevant audit information of which EY is unaware. Each of theDirectors has taken all reasonable steps that ought to have been taken by him or her as a Director in order tomake himself or herself aware of any relevant audit information and to establish that the Company’s auditor isaware of such information.Statement of corporate governance arrangementsAs a subsidiary undertaking, the Company applies the UK Corporate Governance Code where applicable tosupport the overall compliance of Schroders plc with that code.Statement of Directors' responsibilitiesThe Directors are responsible for preparing the Strategic report, the Directors’ report and the financial statementsin accordance with applicable law and regulations.Company law requires the Directors to prepare financial statements for each financial year. Under that law theDirectors have elected to prepare the financial statements in accordance with UK-adopted international accounting
Schroder Investment Management North America LimitedAnnual Report and Accounts 20215Directors’ report (continued)standards. Under company law the Directors must not approve the financial statements unless they are satisfiedthat they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company forthat period. In preparing these financial statements, the Directors are required to: select suitable accounting policies and then apply them consistently;make judgements and accounting estimates that are reasonable and prudent;state whether applicable UK-adopted international accounting standards have been followed, subject toany material departures disclosed and explained in the financial statements; andprepare the financial statements on a going concern basis unless it is inappropriate to presume that theCompany will continue in business.The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain theCompany’s transactions and disclose with reasonable accuracy at any time the financial position of the Companyand enable them to ensure that the financial statements comply with the Companies Act 2006.The Directors are also responsible for safeguarding the assets of the Company and hence for taking reasonablesteps for the prevention and detection of fraud and other irregularities.Approved by the Board of Directors and signed on its behalf by:Ria Vavakis,Authorised signatory forSchroder Corporate Services LimitedCompany Secretary17 March 2022Registered Office:1 London Wall PlaceLondon EC2Y 5AURegistered in England and Wales No 02334190
Schroder Investment Management North America LimitedAnnual Report and Accounts 20216Independent auditors’ report to the member ofSchroder Investment Management North AmericaLimitedReport on the audit of the financial statementsOpinionWe have audited the financial statements of Schroder Investment Management North America Limited (the‘Company’) for the year ended 31 December 2021 which comprise the Income statement, the Statement ofcomprehensive income, the Statement of financial position, the Statement of changes in equity, the Cash flowstatement and the related notes 1 to 15 including a summary of significant accounting policies. The financialreporting framework that has been applied in their preparation is applicable law and UK-adopted internationalaccounting standards.In our opinion, the financial statements: give a true and fair view of the Company’s affairs as at 31 December 2021 and of its profit for the year thenended;have been properly prepared in accordance with UK-adopted international accounting standards; andhave been prepared in accordance with the requirements of the Companies Act 2006.Basis for opinionWe conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicablelaw. Our responsibilities under those standards are further described in the ‘Auditor’s responsibilities for the auditof the financial statements’ section of our report. We are independent of the Company in accordance with theethical requirements that are relevant to our audit of the financial statements in the UK, including the FinancialReporting Council’s Ethical, and we have fulfilled our other ethical responsibilities in accordance with theserequirements.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.Conclusions relating to going concernIn auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting inthe preparation of the financial statements is appropriate.Based on the work we have performed, we have not identified any material uncertainties relating to events or conditionsthat, individually or collectively, may cast significant doubt on the Company’s ability to continue as a going concern fortwelve months from the date the Annual Report and Accounts is approved.Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevantsections of this report. However, because not all future events or conditions can be predicted, this statement is not aguarantee as to the Company’s ability to continue as a going concern.Other informationThe other information comprises the information included in the Annual Report and Accounts, other than thefinancial statements and our auditor’s report thereon. The directors are responsible for the other informationcontained within the Annual Report and Accounts.
Schroder Investment Management North America LimitedAnnual Report and Accounts 20217Independent auditors’ report to the member ofSchroder Investment Management North AmericaLimited (continued)Our opinion on the financial statements does not cover the other information and, except to the extent otherwiseexplicitly stated in this report, we do not express any form of assurance conclusion thereon.Our responsibility is to read the other information and, in doing so, consider whether the other information is materiallyinconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears tobe materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are requiredto determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on thework we have performed, we conclude that there is a material misstatement of the other information, we are required toreport that fact.We have nothing to report in this regard.Opinions on other matters prescribed by the Companies Act 2006In our opinion, based on the work undertaken in the course of the audit: the information given in the Strategic report and the Directors’ report for the financial year for which thefinancial statements are prepared is consistent with the financial statements; andthe Strategic report and Directors’ report have been prepared in accordance with applicable legalrequirements.Matters on which we are required to report by exceptionIn light of the knowledge and understanding of the Company and its environment obtained in the course of theaudit, we have not identified material misstatements in the Strategic report or Directors’ report.We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us toreport to you if, in our opinion: adequate accounting records have not been kept, or returns adequate for our audit have not been receivedfrom branches not visited by us; or the financial statements are not in agreement with the accounting records and returns; or certain disclosures of directors’ remuneration specified by law are not made; or we have not received all the information and explanations we require for our auditResponsibilities of directorsAs explained more fully in the Statement of Directors’ responsibilities set out on page 5, the directors are responsible forthe preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internalcontrol as the directors determine is necessary to enable the preparation of financial statements that are free from materialmisstatement, whether due to fraud or error.In preparing the financial statements, the directors are responsible for assessing the Company’s ability to continue as agoing concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accountingunless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but todo so.
Schroder Investment Management North America LimitedAnnual Report and Accounts 20218Independent auditors’ report to the member ofSchroder Investment Management North AmericaLimited (continued)Auditor’s responsibilities for the audit of the financial statementsOur objectives are to obtain reasonable assurance about whether the financial statements as a whole are freefrom material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes ouropinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted inaccordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if, individually or in the aggregate, they could reasonably be expectedto influence the economic decisions of users taken on the basis of these financial statements.Explanation as to what extent the audit was considered capable of detecting irregularities, including fraudIrregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in linewith our responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a materialmisstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberateconcealment by, for example, forgery or intentional misrepresentations, or through collusion. The extent to which ourprocedures are capable of detecting irregularities, including fraud is detailed below. However, the primary responsibilityfor the prevention and detection of fraud rests with both those charged with governance of the entity and management. We obtained an understanding of the legal and regulatory frameworks that are applicable to the Companyand determined that the most significant are those that relate to the UK-adopted international accountingstandards, the Companies Act 2006 and relevant tax compliance regulations. In addition, we concluded thatthere are certain significant laws and regulations which may have an effect on the determination of theamounts and disclosures in the financial statements being the Financial Conduct Authority (‘FCA’) rules andregulations.We understood how the Company is complying with those frameworks by making enquiries of management.We corroborated our understanding through our review of board meeting minutes and correspondencereceived from the FCA.We assessed the susceptibility of the Company’s financial statements to material misstatement, including howfraud might occur by meeting with management to understand where they considered there wassusceptibility to fraud. We considered the controls that the Company has established to address risksidentified, or that otherwise prevent, deter and detect fraud, including in a remote-working environment; andhow management monitors these controls.Based on this understanding we designed our audit procedures to identify non-compliance with such lawsand regulations identified in the paragraphs above. Our procedures involved: journal entry testing, with afocus on manual journals and journals indicating large or unusual transactions based on our understandingof the business and enquiries of management.A further description of our responsibilities for the audit of the financial statements is located on theFinancial Reporting Council’s website at https://www.frc.org.uk/auditorsresponsibilities. This description forms part of ourauditor’s report.
Schroder Investment Management North America LimitedAnnual Report and Accounts 20219Independent auditors’ report to the member ofSchroder Investment Management North AmericaLimited (continued)Use of our reportThis report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of theCompanies Act 2006. Our audit work has been undertaken so that we might state to the Company’s membersthose matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extentpermitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’smembers as a body, for our audit work, for this report, or for the opinions we have formed.Sarah Langston (Senior statutory auditor)For and on behalf of Ernst & Young LLP, Statutory AuditorLondon17 March 2022
Schroder Investment Management North America LimitedAnnual Report and Accounts 202110Income statementfor the year ended 31 December 2021Note2021 '0002020 '000Revenue2128,74298,111Cost of 1(575)(417)12,2539,244(2,328)(1,762)9,9257,4822021 '0002020 '000Net operating revenueNet gains/(losses) on foreign exchange and finance income4Net incomeOperating expenses5Profit before income taxIncome tax expense6Profit after taxStatement of comprehensive incomefor the year ended 31 December 2021Profit for the year9,9257,482Total comprehensive income for the year, net of tax9,9257,482
Schroder Investment Management North America LimitedAnnual Report and Accounts 202111Statement of financial positionAs at 31 December 2021Notes2021 '0002020 '000Cash and cash equivalents8767779Trade and other receivables934,29125,222Deferred tax103135,06126,00211,59413,0332,3301,757Total liabilities13,92414,790Net assets21,13711,212Total equity21,13711,212AssetsTotal assetsLiabilitiesTrade and other payables11Current taxThe notes on pages 14 to 23 form an integral part of the financial statements.The financial statements on pages 10 to 23 were approved by the Board of Directors on 17 March 2022 and weresigned on its behalf by:Paul ChislettDirectorRegistered Number: 02334190
Schroder Investment Management North America LimitedAnnual Report and Accounts 202112Statement of changes in equityfor the year ended 31 December 20212021Retainedearnings2Total equity '000 '000 '00060010,61211,212-9,9259,92560020,53721,137Share capital1At 1 January 2021Total comprehensive income for the year, net of tax31 December 20212020At 1 January 2020Total comprehensive income for the year, net of taxShare capital1Retainedearnings2Total equity '000 '000 1211,212Transactions with shareholder:Dividends31 December 2020Share capital represents issued and fully paid ordinary shares at a par value of 1 each.Retained earnings represent accumulated comprehensive income for the year and prior periods together withtransactions with shareholders.12
Schroder Investment Management North America LimitedAnnual Report and Accounts 202113Cash flow statementfor the year ended 31 December 2021Note2021 '0002020 '00012,2539,244(Increase) in trade and other receivables(9,069)(5,030)(Decrease)/Increase in trade and other 4)(40)5,962Interest received2829Net cash from investing activities2829Dividend paid-(6,000)Net cash used in financing activities-(6,000)Net decrease in cash and cash equivalents(12)(9)Opening cash and cash equivalents779788Net decrease in cash and cash equivalents(12)(9)767779Operating activitiesProfit before income taxAdjustments for statement of financial position movements:Adjustments for which cash effects are investing activities:Interest receivedCash from operating activitiesTax paidNet cash (used)/received from operating activitiesInvesting activitiesFinancing activitiesClosing cash and cash equivalents8
Schroder Investment Management North America LimitedAnnual Report and Accounts 202114Notes to the financial statementsfor the year ended 31 December 20211. Presentation of the financial statementsFinancial information for the year ended 31 December 2021 is presented in accordance with InternationalAccounting Standard ('IAS') 1 Presentation of Financial Statements.Basis of preparationThe financial statements are prepared in accordance with UK-adopted international accounting standards and inconformity with the requirements of Companies Act 2006.The financial information presented within these financial statements has been prepared on the going concernbasis under the historical cost convention.The Company's principal accounting policies have been consistently applied. The preparation of financialstatements in conformity with UK-adopted international accounting standards, requires the use of certain criticalaccounting estimates. It also requires management to exercise its judgement in the process of applying theCompany's accounting policies. Any areas involving a higher degree of judgement or complexity, or areas whereassumptions and estimates are significant to the financial statements, are disclosed within the notes below.The Company has complied with regulation 2 of the Capital Requirements (Country-by-Country Reporting)Regulations 2013 by publishing the information in relation to the year ended 31 December 2020 on the SchrodersGroup Website before 31 December 2021. This is available at ity/our-economic-contribution. The Company will publish the information in relation to the year ended31 December 2021 on the Schroders Group Website before 31 December 2022.Future accounting developmentsThe Company did not implement the requirements of any Standards or Interpretations which were in issue andwhich were not required to be adopted at the year end date.Estimates and judgementsThe preparation of the financial statements in conformity with UK-adopted international accounting standardsrequires the use of certain critical accounting estimates. It also requires management to exercise its judgement inthe process of applying the Company's accounting policies. Estimates and judgements used in preparing thefinancial statements are periodically evaluated and are based on historical experience and other factors, includingexpectations of future events that are believed to be reasonable. The resulting accounting estimates will seldomequal the related actual results. There are no estimates or judgements that have a significant effect on the carryingamounts of assets and liabilities.
Schroder Investment Management North America LimitedAnnual Report and Accounts 202115Notes to the financial statementsfor the year ended 31 December 20212. RevenueThe Company’s primary source of revenue is fee income from investment management activities and includes feesthat are paid away (see note 3). The fees are generally based on an agreed percentage of the valuation of theassets under management and are recognised as the service is provided and it is probable that the fee will bereceived.Performance fees are earned from certain arrangements when contractually agreed performance levels areexceeded within specified performance measurement periods. They are only recognised where it is highlyprobable that a significant reversal will not occur in future periods. Performance fees are typically earned over oneyear and are recognised at the end of the performance period.Revenue comprises:20212020 '000 '000Management fees104,99884,280Performance fees23,74413,831Revenue128,74298,1113. Cost of salesCost of sales principally comprises investment management fees payable to other Group companies,recognised over the period for which the service is provided.4. Net gains/(losses) on foreign exchange and finance incomeForeign currency monetary assets and liabilities are translated at the rates of exchange ruling at the year-enddate and transactions in foreign currency are converted to sterling at the rate ruling at the date of thetransaction.Net gains/(losses) taken to the income statement in respect of financial assets and liabilities are:2021 '0002020 '000-(58)Net finance income2829Net gains/(losses) on foreign exchange and finance income28(29)Net (losses) on foreign exchange
Schroder Investment Management North America LimitedAnnual Report and Accounts 202116Notes to the financial statementsfor the year ended 31 December 20215. Operating expensesOperating expenses are recognised on an accruals basis as services are provided.Operating expenses include:20212020UK SingaporeTotalUK SingaporeTotal '000 '000 '000 '000 '000 '00024832248327101761016Audit and non-audit fees311849301848Other operating expenses4448252627594369Operating expenses475100575305112417Fees payable for the audit of the CompanyFees payable for audit related assurance servicesDirectors’ emolumentsThe amounts set out in this note are in respect of 1 (2020: 1) Director whose emoluments were charged eitherin part or in full to the Company during the year. This Director has a contract of service with and receives theiremoluments from another Group company. A charge is made by that Group Company in respect of the servicesit provides to the Company. The emoluments of 3 (2020: 3) Directors employed by and paid for by anotherGroup company are included in the financial statements of that entity.Their emoluments are deemed to be wholly attributable to their services to these companies. These Directorstherefore receive no incremental emoluments for their services to the Company.20212020 '000 '000Aggregate emoluments395214Company pension contributions to the defined contribution67scheme401221Retirement benefits have accrued to no (2020: none) Directors under a defined benefit scheme and to 1 (2020:1) Directors under a defined contribution pension scheme.During the year, 1 (2020: 1) Director became entitled to shares under the Group's Equity Compensation Plan
Ria Vavakis, Authorised signatory for . Schroder Corporate Services Limited Company Secretary . 17 March 2022. 4 . Schroder Investment Management North America Limited Annual Report and Accounts 2021 Directors' report. The Directors present their report and the audited financial statements of the Company for the year ended 31
