Interim / Quarterly Report • May 7, 2020
Interim / Quarterly Report
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Half-Yearly Report for the 6 months ended 31 January 2020
The Company's objective is to achieve capital growth principally from the stockmarkets of the Asian Region excluding Japan.
With effect from 1 February 2020, the Company's performance will be measured against the return of the MSCI All Countires Asia ex Japan Small Cap Index (net) total return (in Sterling terms).
Fidelity Asian Values PLC provides shareholders with a differentiated equity exposure to Asian markets. The Portfolio Manager, Nitin Bajaj, achieves this differentiation by favouring undervalued small and medium sized companies as this allows him to find mispriced businesses, the "winners of tomorrow", before they become well known. Asia is the world's fastest-growing economic region and the Portfolio Manager looks to capitalise on this by finding strong businesses, run by trustworthy people and buying them at a sensible price.
Kate Bolsover, Chairman, Fidelity Asian Values PLC
Portfolio Manager's Review Read more page 04
| At a Glance | 02 |
|---|---|
| Financial Highlights | 03 |
| Portfolio Manager's Half-Yearly Review | 04 |
| Interim Management Report | 09 |
| Directors' Responsibility Statement | 12 |
| Twenty Largest Holdings | 13 |
| Income Statement | |||
|---|---|---|---|
| Statement of Changes in Equity | 18 | ||
| Balance Sheet | 20 | ||
| Notes to the Financial Statements | 21 |
| Shareholder Information | 30 |
|---|---|
| Directory | 32 |
| Glossary of Terms | 34 |
Six months ended 31 January 2020
Net Asset Value per Ordinary Share total return – undiluted1,2
-13.2%
(31 January 2019: -2.8%)
MSCI All Countries Asia ex Japan Index (net) total return (in Sterling terms)1,3
-3.6%
(31 January 2019: -4.6%)
Ordinary Share Price total return1,2
-15.0%
(31 January 2019: +3.3%)
Total Shareholders' Funds
£286.9m
Market Capitalisation
Capital Structure Ordinary Shares of 25 pence each in issue
75,580,889
The Portfolio Manager invests in securities of companies which he considers to have fundamental value that has not been recognised by the market.
The Company is not restricted in terms of size or industry of companies included in the portfolio and may invest in unlisted securities.
The Company may also invest into other transferable securities, collective investment schemes, money market instruments, cash and deposits and is also able to use derivatives for efficient portfolio management and investment purposes.
The Company operates a variable management fee arrangement and the performance element is calculated by reference to its Comparative Index.
| 31 January 2020 |
31 July 2019 |
|
|---|---|---|
| Assets | ||
| Gross Asset Exposure1 | £304.0m | £347.4m |
| Total Shareholders' Funds | £286.9m | £323.0m |
| Net Asset Value ("NAV") per Ordinary Share – undiluted | 379.65p | 447.16p |
| NAV per Ordinary Share – diluted2 | – | 439.91p |
| Gearing/(net cash position) 3,4 |
6.0% | 7.5% |
| Share Price and Discount Data | ||
| Ordinary Share Price at the period end | 379.00p | 455.50p |
| Period high | 457.50p | 457.00p |
| Period low | 379.00p | 356.00p |
| (Discount)/Premium to NAV per Ordinary Share at period end – undiluted | (0.2%) | 1.9% |
| Premium period high | 5.3% | 5.7% |
| (Discount) period high | (2.9%) | (4.8%) |
| Premium to NAV per Ordinary Share at period end – diluted |
– | 3.5% |
| Subscription Share Price at period end | – | 53.00p |
| Results for the six months ended 31 January | 2020 | 2019 |
| Revenue Return per Ordinary Share | 2.75p | 2.00p |
| Capital Loss per Ordinary Share | (61.15p) | (13.94p) |
| Total Loss per Ordinary Share | (58.40p) | (11.94p) |
1 The value of the portfolio exposed to market price movements.
2 There was no diluted NAV per Ordinary Share as all the subscription shares had been exercised or cancelled. For more information, see Note 10 on page 28.
3 Gross Asset Exposure less Total Shareholders' Funds expressed as a percentage of Total Shareholders' Funds.
4 Alternative Performance Measure (see Glossary of Terms on page 34).
Over the six-month period ended 31 January 2020, the net asset value ("NAV") of Fidelity Asian Values PLC (the Company) fell by 13.2%, compared with a decline of 3.6% for the MSCI All Countries Asia ex Japan Index (net) total return (in Sterling terms) (the Company's "Comparative Index"). Over the same period, the Company's share price decreased by 15.0%. (All figures are on a total return basis).
Six months is a relatively short period, and I do not consider short-term returns to be the most important measure; it is returns over the long-term that are key. That said, I am conscious that the Company's NAV has underperformed the Comparative Index for all periods except for the time since I took over the management of the portfolio.
The foremost reason for this underperformance is that in the last three years the Company's value style and bias towards small caps has been out of favour, as large growth stocks have strongly outperformed small cap value stocks.
As a reminder, my investment philosophy is focused on owning good quality businesses, run by competent management and buying them at a price which leaves enough margin of safety. Whenever markets get infatuated with a certain theme, it becomes harder for investors like me who focus primarily on intrinsic value. During my decade of managing money, I have been through a few cycles of under performance but this one has been more prolonged.
| Fidelity Asian Values PLC NAV total return (%) |
Comparative Index total return (%) |
|
|---|---|---|
| Tenure (since 1 April 2015) | +48.7 | +47.2 |
| 3 Years | +4.0 | +23.1 |
| 2 Years | -4.9 | -3.0 |
| 1 Year | -3.4 | +5.0 |
| 6 Months | -13.2 | -3.6 |
Source: Fidelity International.
| Average | Contribution | |||
|---|---|---|---|---|
| Active Weight | Gain/Loss | to Relative | ||
| Order | Security | (%) | (%) | Returns (%) |
| Top 5 Contributors | ||||
| 1 | China Yongda Automobile | |||
| Services Holdings | +1.1 | +8.4 | +0.3 | |
| 2 | Huaneng Renewables | +0.4 | +38.3 | +0.2 |
| 3 | Zhongsheng Group | +0.6 | +27.2 | +0.2 |
| 4 | AIA Group | -2.5 | -9.6 | +0.2 |
| 5 | Granules India | +0.4 | +25.6 | +0.1 |
| Total | +1.0 | |||
| Top 5 Detractors | ||||
| 1 | PNB Housing Finance | +1.7 | -43.6 | -0.9 |
| 2 | Samsung Electronics | -4.9 | +16.4 | -0.8 |
| 3 | Taiwan Semiconductor Manufacturing Co. | -4.0 | +28.7 | -0.8 |
| 4 | Alibaba Group | -5.5 | +10.5 | -0.7 |
| 5 | Power Grid Corporation of India | +3.6 | -20.1 | -0.6 |
| Total | -3.8 |
Source: Fidelity International.
Looking at the biggest five detractors, three of them are stocks we did not have a major holding in and their stock prices increased significantly (they show up as detractors because they are a large part of the index). This will always be the case with my index agnostic style. Historically, these errors of omission have been offset by stocks that we own which generate better returns. As the market has been focused on growth stocks during the last two years, it has meant that the businesses we own have continued to get cheaper.
The two stocks that I do own in the top five detractors deserve an explanation:
• PNB Housing Finance: It is the third largest housing finance company in India. I have had a significant position in non-banking finance companies in India with PNB
Housing Finance being one of them. It is a well-run company trading at around 4 times price–earnings ratio as the business is facing some issues due to a slowdown in the housing market in India. I continue to believe these issues will be transient, and we own a stake in a well-run company at a very attractive price.
• Power Grid Corporation of India: Power Grid is India's largest electricity transmission utility and earns a regulated return on equity of close to 15%. The company has grown earnings for the last 20 years, and in my opinion, it will continue to grow in the next 10 years. The market has ignored the stock as a boring utility company. I like this growth company as it trades at 7 times priceearnings ratio and it continues to be our largest position in the portfolio.
(Gross Asset Exposure expressed as a percentage of Total Shareholders' Funds)
Thoughts on the Coronavirus (COVID-19) Source: Fidelity International, 31 January 2020. MSCI classification.
This is an unprecedented event for everyone, and investors are having to opine on a topic for which they are not trained. Even scientists and epidemiologists are not certain in terms of how things will unfold over the next few months. Having said that, undoubtedly the economic impact will be quite severe in the short-term on both demand and supply. Looking at current earnings forecasts is pointless given the fluidity of the situation. We can model scenarios but frankly the dispersion in outcomes makes them meaningless. There are a number of unknown factors. For example, as China emerges from its lockdown measures, could we have a second wave of infections? Factories cannot "work from home" so the risk of a resurgence in cases certainly exists. For the rest of the world, we do not know how long the lockdown must last and,
once lockdowns are lifted, the degree of freedom of movement that will be allowed. It's very difficult to forecast when the recovery will begin and whether it will be quick or long drawn.
My working assumptions are listed below. I would take these views with a pinch of salt as forecasting a pandemic is obviously beyond my core competence. I am by no means a trained epidemiologist.
• Short-term: The disease has now spread globally, and I would expect governments to be conservative in easing restrictions. I would expect a few waves or a continued (but controlled) flow of cases in most countries. This implies that the world economy will be on a hand brake until a medical remedy is found or nature takes a different course.
The new economic reality due to COVID-19 has had an impact on our portfolio as well. Businesses we own will be impacted either due to lack of demand and/or due to lockdown of their facilities. Most businesses that we own have low levels of debt (actually most have net cash on their balance sheets) and will be able to weather the storm. They should come out in a stronger position (as weaker competitors either shut shop or are unable to invest in the business) as the economy stabilises. However, there are a few businesses which cannot endure zero revenues. As a result, I have made the following changes to the portfolio:
• Sold out businesses which, even though they had reasonable balance sheets, will not be
able to endure the fixed cost burden during a lockdown. These were a small part of the portfolio (at about 1-2% of total assets).
• Increased the average quality of businesses that we own. There are businesses which I have known and admired for a long time, but which were historically not available at attractive prices. During this sell down, they came to prices which made sense to me and I have decided to invest in them. I have funded some of these by selling some existing holdings where I felt the stock market had not reflected the damage caused by COVID-19. I am taking this opportunity to increase the quality of the portfolio without sacrificing our value discipline.
The Company's performance over the last nine months has been subdued and worse than the market returns. I am unable to explain market sentiment of many stocks – both in the portfolio and the market in general. There has been a dominance of growth companies, momentum strategy and stocks that fit a narrative (Technology, Bio-tech, Chinese Consumer, etc).
Stocks which are ignored or cheap, have become even more ignored. At times, the narrative of the stock market is different from the reality of business. This is true for value equities currently and cheap stocks have underperformed severely, with the valuation dispersion expanding further in the last few months. On a relative basis, the last time small cap value stocks were this cheap was in 1999!
My process of focusing on undiscovered stocks which have good underlying businesses, are well managed and available on cheap prices has been out of fashion and a headwind for performance. This is not an excuse but a reflection of how investment sentiment has worked over recent years.
DIRECTORS' REPORTS
Having said that, I have the utmost faith in my process. The most time-tested way of investing is to own good businesses, run by competent and honest managements and buy them at attractive prices. Avoiding bubbles and unsustainable valuations is key to long-term compounding, no matter how painful it is in the short-term.
Over time, the quality of business and valuations will matter.
The long-term value of any business will be driven by the cash flow it generates. Short-term market opinion on the value of a business should be meaningless except its impact on investor psychology (mine and yours) and unless we are forced to transact at these depressed valuations.
I am happy with the portfolio of companies we own – both the quality and price at which we own them. On average, we own vastly superior businesses versus the market and at significantly cheaper prices. This gives me confidence of robust returns in the future.
It has been a testing nine months in terms of performance, but market fashions should not drive an investment philosophy. I look forward to what markets have to offer over the next three to five years and, in the meantime continue to work to find good businesses, run by good management teams and try to buy them at good prices.
As mentioned in the Chairman's Statement in the Annual Report for the year ended 31 July 2019, and effective from 1 February 2020, the Company has changed its Comparative Index from the MSCI All Countries Asia ex Japan Index (net) total return (in Sterling terms) to the MSCI All Countries Asia ex Japan Small Cap Index (net) total return (in Sterling terms). The Company is able to invest in companies of any size of capitalisation in order to achieve its objective of long-term capital growth principally from the stockmarkets of the Asian Region excluding Japan. The Portfolio Manager, Nitin Bajaj, looks to find investments in strong businesses which are run by trustworthy people and available to buy at a reasonable price. Therefore, the universe of investments available is not constrained by the size of a company or by its weighting in any comparative index. However, smaller companies are favoured by the Portfolio Manager as they provide an opportunity to find mispriced businesses, the "winners of tomorrow", before they become well-known. Therefore, the Board considered that adopting a smaller companies Comparative Index was more appropriate. This change was approved by the shareholders at the Annual General Meeting held on 6 December 2019.
With the change in the Comparative Index, the Company is now part of the AIC's Asia Pacific Smaller Companies sub-sector. The Board believes that this is the most appropriate peer group for the Company against which performance is measured.
It has been agreed that Philip Smiley will retire from the Board with effect from 30 April 2020. The Board would like to thank him for his excellent
contribution to the Company during his tenure and wish him well in the future. Tim Scholefield will succeed him as Senior Independent Director with effect from 1 May 2020.
The Company has had a variable management fee structure in place since 1 August 2018. It uses a Comparative Index against which the variable element of the management fee is calculated. The change to the Comparative Index from the MSCI All Countries Asia ex Japan Index (net) total return (in Sterling terms) to the MSCI All Countries Asia ex Japan Small Cap Index (net) total return (in Sterling terms) from 1 February 2020 has no impact to any fees accrued until the date of the change. However, any over or under performance will be measured against the new Comparative Index with effect from 1 February 2020 (the start of the second half of the Company's reporting year). The performance of the portfolio is expected to correspond more closely to the new Comparative Index over time, which should lead to reduced volatility in the amount of the variable management fee.
The Company issued 3,081,455 ordinary shares of 25 pence on 2 December 2019 (effective date of 29 November 2019) in respect of shares arising on the exercise of the conversion rights attached to subscription shares. Following the final exercise date of 29 November 2019, the conversion rights attached to 8,021,575 subscription shares remained unexercised and as per paragraph 8(f) of Part 4 of the Prospectus published by the Company on 26 October 2016, a Final Subscription Trustee was appointed. The Final Subscription Trustee determined that the net proceeds of sale after deduction of all costs and expenses incurred by, and any fee payable to, the Final Subscription Trustee would
not have exceeded the costs of exercising the outstanding 8,021,575 subscription share rights. Therefore, these outstanding subscription share rights lapsed on 13 December 2019 with nil value. The Final Subscription Trustee's decision in this respect is final and binding on all holders of outstanding subscription shares.
The Company's shares have mostly traded at a premium in the six months to 31 January 2020 and the Board authorised the issue of 265,981 ordinary shares from the Company's existing block listing facility over the reporting period. Since then and as at the date of this report, no additional ordinary shares have been issued. Issuing shares increases the size of the Company, making it more liquid and allowing for costs to be spread out over a larger asset base.
Repurchases of ordinary shares are made at the discretion of the Board and within guidelines set by it from time to time and in light of prevailing market conditions. Shares will only be repurchased when it results in an enhancement to the NAV of the ordinary shares for the remaining shareholders. In order to assist in managing the discount, the Board has shareholder approval to hold in Treasury any ordinary shares repurchased by the Company, rather than cancelling them. Any shares held in Treasury would only be re-issued at NAV per ordinary share or at a premium to NAV per ordinary share.
As the Company's shares have mostly been trading at a premium in the six months to 31 January 2020, no ordinary shares were repurchased for cancellation or for holding in Treasury in the reporting period. However, since mid February 2020, there has been an unprecedented level of turmoil in the world's financial markets and the Company's premium/ discount has been extremely volatile in
reaction to such market conditions. As a result, the Board took the decision to repurchase 41,294 shares into Treasury on 27 March 2020. This was the first buyback the Company has undertaken in nearly 6 years. At the time of writing, the Board is pleased to report that the discount to NAV per ordinary share has narrowed considerably and, at times, since 27 March 2020, the Company has been trading at a small premium.
The Board, with the assistance of the Alternative Investment Fund Manager (FIL Investment Services (UK) Limited/the "Manager"), has developed a risk matrix which, as part of the risk management and internal controls process, identifies the key risks and uncertainties faced by the Company.
The Board considers that the principal risks and uncertainties faced by the Company continue to fall to the following categories: market, economic and political risk; investment performance risk; key person risk; discount control risk; gearing risk; derivatives risk; currency risk; and cybercrime risk. Other risks facing the Company include tax and regulatory risks; and operational (service providers) risks. Information on each of these risks can be found in the Strategic Report section of the Annual Report for the year ended 31 July 2019 and can be found on the Company's pages of the Manager's website at
These principal risks and uncertainties have not materially changed in the six months to 31 January 2020. However, since mid February 2020, the wide spread of the Coronavirus (COVID-19) has had a significant impact on markets and is clearly an additional uncertainty, the implications of which the Board is actively considering both for the short and longer-term.
Investors should be prepared for market fluctuations and remember that holding shares in the Company should be considered to be a long-term investment. These risks are somewhat mitigated by the investment trust structure which means no forced sales of any portfolio holdings will need to take place in order to deal with any redemptions. Therefore, investments can be held over a longer time horizon.
The Board has received confirmation from the Manager that in in light of the Coronavirus (COVID-19) outbreak, its contingency plans have so far operated effectively and remain under continual review. The Manager has, in line with Government rules, mandated work from home arrangements, implemented split team working for those whose work is deemed necessary to be carried out in the office, and imposed self-isolation arrangements on staff as appropriate. The Company's other third-party service providers have also confirmed the implementation of similar measures to ensure business disruption is minimised to the extent possible.
The Manager has delegated the Company's portfolio management and the role of Company Secretary to FIL Investments International. Transactions with the Manager and related party transactions with the Directors are disclosed in Note 12 to the Financial Statements on page 29.
The Directors have considered the Company's investment objective, risk management policies, liquidity risk, credit risk, capital management policies and procedures, the nature of its portfolio (being mainly securities which are readily realisable) and its expenditure and cash flow projections and have concluded
that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing these Financial Statements. This conclusion also takes into account the Board's assessment of the risks arising from the Coronavirus (COVID-19).
Continuation votes are held every five years and the next continuation vote will be put to shareholders at the Annual General Meeting in 2021.
By order of the Board. FIL Investments International 28 April 2020
The Disclosure and Transparency Rules ("DTR") of the UK Listing Authority require the Directors to confirm their responsibilities in relation to the preparation and publication of the Interim Management Report and Financial Statements.
The Directors confirm to the best of their knowledge that:
The Half-Yearly Report has not been audited or reviewed by the Company's Independent Auditor.
The Half-Yearly Report was approved by the Board on 28 April 2020 and the above responsibility statement was signed on its behalf by Kate Bolsover, Chairman.
The Gross Asset Exposures shown below measure exposure to market price movements as a result of owning shares and derivative instruments. The Balance Sheet Value is the actual value of the portfolio. Where a contract for difference ("CFD") is held, the Balance Sheet Value reflects the profit or loss on the contract since it was opened and is based on how much the share price of the underlying share has moved.
| Balance Sheet |
|||
|---|---|---|---|
| Gross Asset Exposure | Value | ||
| £'000 | %1 | £'000 | |
| Long Exposures – shares unless otherwise stated | |||
| Power Grid Corporation of India | |||
| Operator of the Indian national electricity grid | 10,107 | 3.5 | 10,107 |
| Shriram Transport Finance | |||
| Provider of hire purchase and lease finance for medium and | |||
| heavy commercial vehicles | 8,534 | 3.0 | 8,534 |
| Redington India | |||
| Distributor of information technology products, mobile | |||
| handsets and accessories | 7,817 | 2.7 | 7,817 |
| Fufeng Group (shares and long CFD) | |||
| Bio-fermentation products manufacturer | 5,800 | 2.0 | 5,571 |
| Cromwell European Real Estate Investment Trust | |||
| Real estate investment company | 5,489 | 1.9 | 5,489 |
| BOC Aviation (shares and long CFD) | |||
| Global aircraft operating leasing company | 5,188 | 1.8 | 3,721 |
| Cebu Air | |||
| Airline operator | 5,126 | 1.8 | 5,126 |
| Xingda International Holdings | |||
| Manufacturer and producer of radial tire cords, bead wires | |||
| and other wires | 5,111 | 1.8 | 5,111 |
| China Yongda Automobiles Services Holdings | |||
| Investment holding company engaged in the sale of | |||
| passenger vehicles and provision of related services | 5,053 | 1.8 | 5,053 |
| Tianneng Power International | |||
| Manufacturer of storage batteries | 4,854 | 1.7 | 4,854 |
as at 31 January 2020
| Balance Sheet |
|||
|---|---|---|---|
| Gross Asset Exposure | Value | ||
| £'000 | %1 | £'000 | |
| Sinopec Kantons Holdings | |||
| Operator of crude oil loading and unloading, storage and | |||
| transportation facilities, oil and petrochemical trading | 4,816 | 1.7 | 4,816 |
| Shriram City Union Finance | |||
| Financial service provider specialising in retail finance | 4,713 | 1.6 | 4,713 |
| Shinhan Financial Group | |||
| Financial holding company | 4,314 | 1.5 | 4,314 |
| Cikarang Listrindo | |||
| Electric power distribution company | 4,190 | 1.5 | 4,190 |
| Arwana Citramulia | |||
| Ceramics manufacturer | 4,113 | 1.4 | 4,113 |
| Dream International | |||
| Toy designer, manufacturer and seller | 3,913 | 1.4 | 3,913 |
| Convenience Retail Asia | |||
| Convenience store chain operator | 3,852 | 1.3 | 3,852 |
| Cognizant Technology Solutions | |||
| Provider of information technology, digital and technology services | 3,629 | 1.3 | 3,629 |
| PTC India | |||
| Provider of power trading solutions in India | 3,549 | 1.2 | 3,549 |
| Daewon Pharmaceutical | |||
| Manufacturer and seller of pharmaceutical products | 3,484 | 1.2 | 3,484 |
| Twenty largest long exposures | 103,652 | 36.1 | 101,956 |
| Other long exposures | 180,914 | 63.1 | 169,469 |
| Total long exposures before hedges (145 holdings) | 284,566 | 99.2 | 271,425 |
| Balance Sheet |
|||
|---|---|---|---|
| Gross Asset Exposure | Value | ||
| £'000 | %1 | £'000 | |
| Add: long futures | |||
| MSCI All Countries Asia ex Japan Index Future March 2020 | 9,062 | 3.2 | (512) |
| Add: hedging exposures | |||
| Forward Currency Contracts | 33 | – | 33 |
| Total long exposures after the netting of hedges | 293,661 | 102.4 | 270,946 |
| Add: short exposures | |||
| Short CFDs (10 holdings) | 9,261 | 3.2 | 1,827 |
| Short Futures (1 holding) | 1,119 | 0.4 | 1 |
| Gross Asset Exposure2 | 304,041 | 106.0 | |
| Portfolio Fair Value3 | 272,774 | ||
| Net current assets (excluding derivative assets and liabilities) | 14,171 | ||
| Total Shareholders' Funds/Net Assets | 286,945 |
1 Gross Asset Exposure is expressed as a percentage of Total Shareholders' Funds.
2 Gross Asset Exposure comprises market exposure to investments of £272,307,000 plus market exposure to derivative instruments of £31,734,000.
3 Portfolio Fair Value comprises Investments of £272,307,000 plus derivative assets of £2,230,000 less derivative liabilities of £1,763,000 (per the Balance Sheet on page 20).
for the six months ended 31 January 2020
| six months ended 31 January 2020 | ||||
|---|---|---|---|---|
| unaudited | ||||
| Notes | revenue £'000 |
capital £'000 |
total £'000 |
|
| (Losses)/gains on investments | – | (46,281) | (46,281) | |
| Gains/(losses) on derivative instruments | – | 1,786 | 1,786 | |
| Income 4 |
4,206 | – | 4,206 | |
| Investment management fees 5 |
(1,063) | 55 | (1,008) | |
| Other expenses | (440) | – | (440) | |
| Foreign exchange (losses)/gains | – | (528) | (528) | |
| Net return/(loss) on ordinary activities before finance costs and taxation |
2,703 | (44,968) | 42,265 | |
| Finance costs | (358) | – | (358) | |
| Net return/(loss) on ordinary activities before taxation |
2,345 | (44,968) | (42,623) | |
| Taxation on return/(loss) on ordinary activities 6 |
(324) | 8 | (316) | |
| Net return/(loss) on ordinary activities after taxation for the period |
2,021 | (44,960) | (42,939) | |
| Basic return/(loss) per ordinary share 7 |
2.75p | (61.15p) | (58.40p) | |
| Diluted return/(loss) per ordinary share 7 |
– | – | – |
The Company does not have any other comprehensive income. Accordingly the net return/(loss) on ordinary activities after taxation for the period is also the total comprehensive income for the period and no separate Statement of Comprehensive Income has been presented.
The total column of this statement represents the Income Statement of the Company. The revenue and capital columns are supplementary and presented for information purposes as recommended by the Statement of Recommended Practice issued by the AIC.
No operations were acquired or discontinued in the period and all items in the above statement derive from continuing operations.
| six months ended 31 January 2019 | year ended 31 July 2019 | ||||
|---|---|---|---|---|---|
| unaudited | audited | ||||
| revenue | capital | total | revenue | capital | total |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
| – | (10,742) | (10,742) | – | 16,606 | 16,606 |
| – | 1,159 | 1,159 | – | (573) | (573) |
| 3,350 | – | 3,350 | 11,481 | – | 11,481 |
| (982) | (97) | (1,079) | (2,030) | (232) | (2,262) |
| (363) | – | (363) | (772) | (39) | (811) |
| – | 51 | 51 | – | 879 | 879 |
| 2,005 | (9,629) | (7,624) | 8,679 | 16,641 | 25,320 |
| (349) | – | (349) | (678) | – | (678) |
| 1,656 | (9,629) | (7,973) | 8,001 | 16,641 | 24,642 |
| (272) | – | (272) | (492) | 4 | (488) |
| 1,384 | (9,629) | (8,245) | 7,509 | 16,645 | 24,154 |
| 2.00p | (13.94p) | (11.94p) | 10.70p | 23.71p | 34.41p |
| 1.99p | (13.84p) | (11.85p) | 10.58p | 23.46p | 34.04p |
for the six months ended 31 January 2020
| share | share premium |
|||
|---|---|---|---|---|
| Notes | capital £'000 |
account £'000 |
||
| Six months ended 31 January 2020 (unaudited) | ||||
| Total shareholders' funds at 31 July 2019 | 18,058 | 38,073 | ||
| Net (loss)/return on ordinary activities after taxation for the period |
– | – | ||
| Issue of ordinary shares on the exercise of rights attached to subscription shares |
10 | 770 | 11,332 | |
| Issue of new ordinary shares | 10 | 67 | 1,096 | |
| Dividend paid to shareholders | 8 | – | – | |
| Total shareholders' funds at 31 January 2020 | 18,895 | 50,501 | ||
| Six months ended 31 January 2019 (unaudited) | ||||
| Total shareholders' funds at 31 July 2018 | 17,167 | 24,316 | ||
| Net (loss)/return on ordinary activities after taxation for the period |
– | – | ||
| Issue of ordinary shares on the exercise of rights attached to subscription shares |
10 | 303 | 4,327 | |
| Dividend paid to shareholders | 8 | – | – | |
| Total shareholders' funds at 31 January 2019 | 17,470 | 28,643 | ||
| Year ended 31 July 2019 (audited) | ||||
| Total shareholders' funds at 31 July 2018 | 17,167 | 24,316 | ||
| Net return on ordinary activities after taxation for the year |
– | – | ||
| Issue of ordinary shares on the exercise of rights attached to subscription shares |
10 | 303 | 4,327 | |
| Issue of new ordinary shares | 10 | 588 | 9,430 | |
| Dividend paid to shareholders | 8 | – | – | |
| Total shareholders' funds at 31 July 2019 | 18,058 | 38,073 | ||
| total | |||||
|---|---|---|---|---|---|
| other non | capital | ||||
| shareholders' | revenue | capital | other | distributable | redemption |
| funds | reserve | reserve | reserve | reserve | reserve |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
| 322,999 | 9,737 | 237,954 | 8,613 | 7,367 | 3,197 |
| (42,939) | 2,021 | (44,960) | – | – | – |
| 12,102 | – | – | – | – | – |
| 1,163 | – | – | – | – | – |
| (6,380) | (6,380) | – | – | – | – |
| 286,945 | 5,378 | 192,994 | 8,613 | 7,367 | 3,197 |
| 287,974 | 6,005 | 221,309 | 8,613 | 7,367 | 3,197 |
| (8,245) | 1,384 | (9,629) | – | – | – |
| 4,630 | – | – | – | – | – |
| (3,777) | (3,777) | – | – | – | – |
| 280,582 | 3,612 | 211,680 | 8,613 | 7,367 | 3,197 |
| 287,974 | 6,005 | 221,309 | 8,613 | 7,367 | 3,197 |
| 24,154 | 7,509 | 16,645 | – | – | – |
| 4,630 | – | – | – | – | – |
| 10,018 | – | – | – | – | – |
| (3,777) | – | ||||
| (3,777) | 8,613 | 3,197 | |||
| – | – | – 7,367 |
| 31.01.20 | 31.07.19 | 31.01.19 | ||
|---|---|---|---|---|
| unaudited | audited | unaudited | ||
| Notes | £'000 | £'000 | £'000 | |
| Fixed assets | ||||
| Investments | 9 | 272,307 | 312,681 | 270,518 |
| Current assets | ||||
| Derivative instruments | 9 | 2,230 | 1,537 | 1,846 |
| Debtors | 718 | 3,325 | 2,427 | |
| Amounts held at futures clearing houses and brokers |
1,670 | 2,905 | 1,944 | |
| Cash at bank | 13,286 | 5,796 | 5,537 | |
| 17,904 | 13,563 | 11,754 | ||
| Creditors | ||||
| Derivative instruments | 9 | (1,763) | (2,192) | (886) |
| Other creditors | (1,503) | (1,053) | (804) | |
| (3,266) | (3,245) | (1,690) | ||
| Net current assets | 14,638 | 10,318 | 10,064 | |
| Net assets | 286,945 | 322,999 | 280,582 | |
| Capital and reserves | ||||
| Share capital | 10 | 18,895 | 18,058 | 17,470 |
| Share premium account | 50,501 | 38,073 | 28,643 | |
| Capital redemption reserve | 3,197 | 3,197 | 3,197 | |
| Other non-distributable reserve | 7,367 | 7,367 | 7,367 | |
| Other reserve | 8,613 | 8,613 | 8,613 | |
| Capital reserve | 192,994 | 237,954 | 211,680 | |
| Revenue reserve | 5,378 | 9,737 | 3,612 | |
| Total shareholders' funds | 286,945 | 322,999 | 280,582 | |
| Net asset value per ordinary share | 11 | 379.65p | 447.16p | 401.51p |
| Diluted net asset value per ordinary share | 11 | – | 439.91p | 400.31p |
Fidelity Asian Values PLC is an Investment Company incorporated in England and Wales with a premium listing on the London Stock Exchange. The Company's registration number is 3183919, and its registered office is Beech Gate, Millfield Lane, Lower Kingswood, Tadworth, Surrey, KT20 6RP. The Company has been approved by HM Revenue & Customs as an Investment Trust under Section 1158 of the Corporation Tax Act 2010 and intends to conduct its affairs so as to continue to be approved.
The Financial Statements in this half-yearly financial report have not been audited by the Company's Independent Auditor and do not constitute statutory accounts as defined in section 434 of the Companies Act 2006 (the "Act"). The financial information for the year ended 31 July 2019 is extracted from the latest published Financial Statements of the Company. Those Financial Statements were delivered to the Registrar of Companies and included the Independent Auditor's Report which was unqualified and did not contain a statement under either section 498(2) or 498(3) of the Act.
Customer: Fidelity Project Title: Asian Values Half Year Rpt 2020 T: 0207 055 6500 F: 020 7055 6600 DIRECTORS' REPORTSFINANCIAL STATEMENTS Notes to the Financial Statements The Company prepares its Financial Statements on a going concern basis and in accordance with UK Generally Accepted Accounting Practice ("UK GAAP") and FRS 102: The Financial Reporting Standard applicable in the UK and Republic of Ireland, issued by the Financial Reporting Council. The Financial Statements are also prepared in accordance with the Statement of Recommended Practice: Financial Statements of Investment Trust Companies and Venture Capital Trusts ("SORP") issued by the Association of Investment Companies ("AIC") in October 2019. FRS 104: Interim Financial Reporting has also been applied in preparing this condensed set of Financial Statements. The accounting policies followed are consistent with those disclosed in the Company's Annual Report and Financial Statements for the year ended 31 July 2019.
| six months | six months | year | |
|---|---|---|---|
| ended | ended | ended | |
| 31.01.20 | 31.01.19 | 31.07.19 | |
| unaudited | unaudited | audited | |
| £'000 | £'000 | £'000 | |
| Investment income | |||
| Overseas dividends | 3,889 | 3,243 | 10,694 |
| Overseas scrip dividends | 45 | – | 370 |
| 3,934 | 3,243 | 11,064 | |
| Derivative income | |||
| Dividends received on long CFDs | 143 | 16 | 126 |
| Interest received on short CFDs | 97 | 55 | 201 |
| 240 | 71 | 327 | |
| Other interest | |||
| Deposit interest | 32 | 36 | 90 |
| Total income | 4,206 | 3,350 | 11,481 |
No special dividends have been recognised in capital during the period (six months ended 31 January 2019 and year ended 31 July 2019: £nil).
| ended ended ended 31.01.20 31.01.19 31.07.19 unaudited unaudited audited £'000 £'000 £'000 Investment management fees – base (charged to revenue) 1,063 982 2,030 Investment management fees – variable (charged to capital) (55) 97 1,008 1,079 2,262 FIL Investment Services (UK) Limited is the Company's Alternative Investment Fund Manager and has delegated portfolio management to FIL Investments International ("FII"). Both companies are Fidelity group companies. From the 1 August 2018, the Company adopted a new fee arrangement which reduced the base management fee from 0.90% on the first £200 million of gross assets and 0.85% on gross assets over £200 million to 0.70% of net assets per annum. In addition, with effect from 1 November 2018, there is +/- 0.20% variation fee based on the NAV per share performance relative to the Comparative Index. Fees are payable monthly in arrears and are calculated on a daily basis. 6 Taxation on Return/(Loss) on Ordinary Activities six months six months year ended ended ended 31.01.20 31.01.19 31.07.19 unaudited unaudited audited £'000 £'000 £'000 Revenue – taxation on overseas dividends 324 272 Capital – Indian capital gains tax received in the period (8) – Total taxation charge for the period 316 – |
|---|
| six months | six months | year | |
|---|---|---|---|
| ended | ended | ended | |
| 31.01.20 | 31.01.19 | 31.07.19 | |
| unaudited | unaudited | audited | |
| £'000 | £'000 | £'000 | |
| Revenue – taxation on overseas dividends | 324 | 272 | 492 |
| Capital – Indian capital gains tax received | |||
| in the period | (8) | – | (4) |
| Total taxation charge for the period | 316 | – | 488 |
| six months | six months | year | |
|---|---|---|---|
| ended | ended | ended | |
| 31.01.20 | 31.01.19 | 31.07.19 | |
| unaudited | unaudited | audited | |
| Revenue return per ordinary share – basic | 2.75p | 2.00p | 10.70p |
| Capital (loss)/return per ordinary share – basic | (61.15p) | (13.94p) | 23.71p |
| Total (loss)/return per ordinary share – basic | (58.40p) | (11.94p) | 34.41p |
| Revenue return per ordinary share – diluted | – | 1.99p | 10.58p |
| Capital (loss)/return per ordinary share – diluted | – | (13.84p) | 23.46p |
| Total (loss)/return per ordinary share – diluted | – | (11.85p) | 34.04p |
The basic return/(loss) per ordinary share is based on the net return/(loss) on ordinary activities after taxation for the period divided by the weighted average number of ordinary shares in issue during the period.
| £'000 | £'000 | £'000 | |
|---|---|---|---|
| Net revenue return on ordinary activities after taxation for the period |
2,021 | 1,384 | 7,509 |
| Net capital (loss)/return on ordinary activities after taxation for the period |
(44,960) | (9,629) | 16,645 |
| Net total (loss)/return on ordinary activities after taxation for the period |
(42,939) | (8,245) | 24,154 |
| number | number | number | |
| Weighted average number of ordinary shares in issue during the period |
73,529,470 | 69,084,724 | 70,193,856 |
There is no diluted return/(loss) per ordinary share for the current period as all the subscription shares were exercised or cancelled (see Note 10 for further details).
In the prior period, the diluted return/(loss) per ordinary share reflected the notional dilutive effect that would have occurred if the rights attached to subscription shares had been exercised and additional ordinary shares had been issued. The net return/(loss) on ordinary activities after taxation for the period used in the diluted calculation was the same as those for the basic return/ (loss) above. These returns/(losses) were divided by the notional weighted average number of ordinary shares in issue during the period – 31 January 2019: 69,592,203 and 31 July 2019: 70,964,574. The number of shares reflected the additional number of ordinary shares that could
the excess of the subscription share rights exercise price over the average ordinary share price.
| 8 Dividends Paid to Shareholders | six months ended 31.01.20 unaudited £'000 |
six months ended 31.01.19 unaudited £'000 |
year ended 31.07.19 audited £'000 |
|
|---|---|---|---|---|
| for the year ended 31 July 2019 | Dividend of 8.80 pence per ordinary share paid | 6,380 | – | |
| for the year ended 31 July 2018 | Dividend of 5.50 pence per ordinary share paid | – | 3,777 | 3,777 |
| 6,380 | 3,777 | 3,777 | ||
| Classification Level 1 |
Input Valued using quoted prices in active markets for identical assets |
|||
| Level 2 | Valued by reference to valuation techniques using observable inputs other than quoted prices included within level 1 |
|||
| Level 3 | Valued by reference to valuation techniques using inputs that are not based on observable market data |
|||
| Classification | Input |
|---|---|
| Level 1 | Valued using quoted prices in active markets for identical assets |
| Level 2 | Valued by reference to valuation techniques using observable inputs other than quoted prices included within level 1 |
| Level 3 | Valued by reference to valuation techniques using inputs that are not based on observable market data |
Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair value measurement of the relevant asset. The table below sets out the Company's fair value hierarchy:
| 31 January 2020 (unaudited) | level 1 £'000 |
level 2 £'000 |
level 3 £'000 |
total £'000 |
|---|---|---|---|---|
| Financial assets at fair value through profit or loss | ||||
| Investments | 270,739 | 1,052 | 516 | 272,307 |
| Derivative instrument assets | – | 2,230 | – | 2,230 |
| 270,739 | 3,282 | 516 | 274,537 | |
| Financial liabilities at fair value through profit or loss | ||||
| Derivative instrument liabilities | (511) | (1,252) | – | (1,763) |
| 31 July 2019 (audited) | level 1 £'000 |
level 2 £'000 |
level 3 £'000 |
total £'000 |
| Financial assets at fair value through profit or loss | ||||
| Investments | 311,753 | 386 | 542 | 312,681 |
| Derivative instrument assets | 85 | 1,194 | 258 | 1,537 |
| 311,838 | 1,580 | 800 | 314,218 | |
| Financial liabilities at fair value through profit or loss | ||||
| Derivative instrument liabilities | (463) | (1,729) | – | (2,192) |
| 31 January 2019 (unaudited) | level 1 £'000 |
level 2 £'000 |
level 3 £'000 |
total £'000 |
| Financial assets at fair value through profit or loss | ||||
| Investments | 270,063 | 51 | 404 | 270,518 |
| Derivative instrument assets | 395 | 1,451 | – | 1,846 |
| 270,458 | 1,502 | 404 | 272,364 | |
| Financial liabilities at fair value through profit or loss | ||||
| Derivative instrument liabilities | (186) | (700) | – | (886) |
| 31 January 2020 unaudited |
31 July 2019 audited |
31 January 2019 unaudited |
||||
|---|---|---|---|---|---|---|
| number of | number of | number of | ||||
| shares | £'000 | shares | £'000 | shares | £'000 | |
| Issued, allotted and fully paid |
||||||
| Ordinary shares of 25 pence each held outside Treasury |
||||||
| Beginning of the period | 72,233,453 | 18,058 | 68,669,402 | 17,167 | 68,669,402 | 17,167 |
| Ordinary shares issued on the exercise of rights |
3,081,455 | 770 | 1,213,003 | 303 | 1,213,003 | 303 |
| New ordinary shares issued |
265,981 | 67 | 2,351,048 | 588 | – | – |
| End of the period | 75,580,889 | 18,895 | 72,233,453 | 18,058 | 69,882,405 | 17,470 |
| Issued, allotted and fully paid |
||||||
| Subscription shares of 0.001 pence |
||||||
| Beginning of the period | 11,103,030 | – | 12,316,033 | – | 12,316,033 | – |
| Cancellation of subscription shares on the exercise of rights |
(3,081,455) | – | (1,213,003) | – | (1,213,003) | – |
| Cancellation of subscription shares |
(8,021,575) | – | – | – | – | – |
| End of the period | – | – | 11,103,030 | – | 11,103,030 | – |
| Total share capital | 18,895 | 18,058 | 17,470 | |||
A bonus issue of subscription shares to ordinary shareholders on the basis of one subscription share for every five ordinary shares held took place on 5 December 2016. Each subscription share gave the holder the right, but not the obligation, to subscribe for one ordinary share upon payment of the subscription price. The subscription price was based on the published unaudited NAV per ordinary share at 2 December 2016, plus a premium (rounded to the nearest quarter penny) depending upon the year in which the right was exercised. The subscription share rights could have been exercised annually in the 25 business days prior to the relevant subscription date (on which the exercise would take effect). The subscription dates, subscription prices and premiums were as follows:
| Exercise date | Exercise price | Premium | |
|---|---|---|---|
| First exercise date | 30 November 2017 | 370.75p | 1% |
| Second exercise date | 30 November 2018 | 381.75p | 4% |
| Final exercise date | 29 November 2019 | 392.75p | 7% |
After the final exercise date of 29 November 2019, the Company appointed a trustee to exercise any rights remaining that were not exercised by shareholders, providing that by doing so a profit could be realised. To realise a profit, the sale proceeds from selling the resulting ordinary shares in the market needed to be in excess of the 392.75 pence per share price of exercising the rights, plus any related expenses and fees. On 13 December 2019, the Board announced that the Trustee had not exercised any of the unexercised subscription rights of the 8,021,575 outstanding subscription shares. The Trustee determined that the net proceeds of the sale, after deduction of all costs and expenses, would not have exceeded the costs of exercising the subscription share rights. Therefore, all subscription share rights for the outstanding subscription shares lapsed with nil value.
During the period, the Company issued 3,081,455 ordinary shares (year ended 31 July 2019 and six months ended 31 January 2019: 1,213,003 shares) on the exercise of rights attached to subscription shares. The subscription share price of 392.75 pence per ordinary share issued represented a premium of 367.75 pence per share over the 25 pence nominal value of each share. The total premium received in the period on the issue of ordinary shares of £11,332,000 (year ended 31 July 2019 and six months ended 31 January 2019: £4,327,000) was credited to the share premium account.
The Company issued 265,981 new ordinary shares during the period (year ended 31 July 2019: 2,351,048 shares and six months ended 31 January 2019: nil). The total premium received in the period on the issue of new ordinary shares of £1,096,000 (year ended 31 July 2019: £9,430,000 and six months ended 31 January 2019: £nil) was credited to the share premium account.
The net asset value per ordinary share is based on net assets of £286,945,000 (31 July 2019: £322,999,000 and 31 January 2019: £280,582,000) and on 75,580,889 (31 July 2019: 72,233,453 and 31 January 2019: 69,882,405) ordinary shares, being the number of ordinary shares of 25 pence each held outside of Treasury at the end of the period.
There is no diluted net asset value per ordinary share as all the subscription shares were exercised or cancelled during the period (see Note 10 for further details).
The diluted net asset value per ordinary share at 31 January 2019 and 31 July 2019 reflect the potential dilution in the net asset value per ordinary share if the rights of the 11,103,030 subscription shares in issue had been exercised at the next exercise date price of 392.75 pence per share. The basis of the calculation is in accordance with the guidelines laid down by the AIC.
FIL Investment Services (UK) Limited is the Company's Alternative Investment Fund Manager and has delegated portfolio management and the role of Company Secretary to FIL Investments International ("FII"). Both companies are Fidelity group companies.
Customer: Fidelity Project Title: Asian Values Half Year Rpt 2020 T: 0207 055 6500 F: 020 7055 6600 DIRECTORS' REPORTSFINANCIAL STATEMENTS 11 Net Asset Value per Ordinary Share Details of the fee arrangements are given in Note 5 above. During the period, management fees of £1,008,000 (six months ended 31 January 2019: £1,079,000 and year ended 31 July 2019: £2,262,000) and secretarial and administration fees of £38,000 (six months ended 31 January 2019: £38,000 and year ended 31 July 2019: £75,000) were payable to FII. At the Balance Sheet date, management fees of £130,000 (31 January 2019: £202,000 and 31 July 2019: £217,000) and secretarial and administration fees of £6,000 (31 January 2019: £6,000 and 31 July 2019: £6,000) were accrued and included in other creditors. FII also provides the Company with marketing services. The total amount payable for these services during the period was £64,000 (six months ended 31 January 2019: £64,000 and year ended 31 July 2019: £146,000). At the Balance Sheet date, marketing services of £24,000 (31 January 2019: £8,000 and 31 July 2019: £20,000) were accrued and included in other creditors.
As at 31 January 2020, the Board consisted of six non-executive Directors (as shown in the Directory on page 32), all of whom are considered to be independent by the Board. None of the Directors have a service contract with the Company. The Chairman receives an annual fee of £36,000, the Audit Committee Chairman an annual fee of £30,000 and each other Director an annual fee of £26,000. As at the date of this report, the following members of the Board held shares in the Company: Kate Bolsover 15,452 ordinary shares, Clare Brady 2,500 ordinary shares, Timothy Scholefield 12,000 ordinary shares, Philip Smiley 2,500 ordinary shares, Grahame Stott 25,000 ordinary shares and Michael Warren, 10,000 ordinary shares.
Fidelity Asian Values PLC is a company listed on the London Stock Exchange and you can buy its shares through a platform, stockbroker, share shop or bank. Fidelity also offers a range of options, so that you may invest in a way that is best for you. Details of how to invest and the latest Key Information Document can be found on Fidelity's website at
www.fidelityinvestmenttrusts.com
Shareholders and Fidelity Platform Investors should contact the appropriate administrator using the contact details given below. Links to the websites of major platforms can be found online at
www.fidelityinvestmenttrusts.com
Contact Link Asset Services, Registrar to Fidelity Asian Values PLC, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU.
Email: [email protected]
Telephone: 0371 664 0300 (calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. Lines are open 9:00 – 17:30, Monday to Friday, excluding public holidays in England and Wales).
Details of individual shareholdings and other information can also be obtained online from the Registrar's Share Portal at
www.signalshares.com. Shareholders are able to manage their shareholding online by registering for the Share Portal, a free and secure online access service. Facilities include:
Account Enquiry – Shareholders can access their personal shareholding, including share transaction history, dividend payment history and obtain an up-to-date shareholding valuation. Amendment of Standing Data – Shareholders can change their registered postal address and add, change or delete dividend mandate instructions. Shareholders can also download forms such as change of address, stock transfer and dividend mandate forms as well as buy and sell shares in the Company.
Should you have any queries in respect of the Link Share Portal, contact the helpline on 0371 664 0391 (calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. Lines are open 9:00 – 17:30, Monday to Friday excluding public holidays in England and Wales).
Link Asset Services offer a low cost share dealing service to buy or sell shares. Further information is available at www.linksharedeal.com, or by telephoning 0371 664 0445 (calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. Lines are open 8:00 – 16:30, Monday to Friday excluding public holidays in England and Wales). The Link Share Dealing Service allows you to deal in the shares of other companies for which Link Asset Services acts as Registrar, provided you are already a shareholder in the relevant company, and that company offers the Share Deal facility to its shareholders.
| Contact Fidelity, using the freephone numbers given below, or by writing to: UK Customer Service, Fidelity International, Oakhill House, 130 Tonbridge Road, Hildenborough, Tonbridge, Kent TN11 9DZ. Website: www.fidelity.co.uk/shares/ investment-trusts/ Private investors: call free on 0800 41 41 10, 9:00 – 18:00 Monday to Saturday. Financial advisers: call free on 0800 41 41 81, 8:00 – 18:00, Monday to Friday. |
General enquiries should be made to the Secretary, at the Company's registered office: FIL Investments International, Investment Trusts, Beech Gate, Millfield Lane, Lower Kingswood, Tadworth, Surrey KT20 6RP. Telephone: 01737 837846 Email: [email protected] Website: www.fidelityinvestmenttrusts.com If you hold Fidelity Asian Values PLC shares in an account provided by Fidelity International, you will receive a report every six months detailing all of your transactions and the value of your shares. |
|---|---|
| Financial Calendar 2020 | |
| 31 January 2020 | Half-Year End |
| April 2020 | Announcement of the Half-Yearly results |
| April 2020 | Publication of the Half-Yearly Report |
| 31 July 2020 | Financial Year End |
| October 2020 | Publication of the Annual Report |
| December 2020 | Annual General Meeting |
Kate Bolsover (Chairman) Philip Smiley (Senior Independent Director) Grahame Stott (Chairman of the Audit Committee) Timothy Scholefield Michael Warren Clare Brady
FIL Investment Services (UK) Limited Oakhill House 130 Tonbridge Road Hildenborough Tonbridge Kent TN11 9DZ
FIL Investments International Beech Gate Millfield Lane Lower Kingswood Tadworth Surrey KT20 6RP Email: [email protected]
JPMorgan Chase Bank (London Branch) 125 London Wall London EC2Y 5AJ
J.P. Morgan Europe Limited 25 Bank Street London E14 5JP
Stifel Nicolaus Europe Ltd 150 Cheapside London EC2V 6ET
Ernst & Young LLP 25 Churchill Place London E14 5EY
Charles Russell Speechlys LLP 5 Fleet Place London EC4M 7RD
Link Asset Services The Registry 34 Beckenham Road Beckenham Kent BR3 4TU
The Company is an investment trust which is a public limited company and has certain regulatory obligations such as the requirement to send documents to its shareholders, for example, the Annual Report and other documents that relate to meetings of the Company. The Company will therefore collect shareholders' personal data such as names, addresses and identification numbers or investor codes and will use this personal data to fulfil its statutory obligations.
Any personal data collected will be kept securely on computer systems and in some circumstances on paper. Personal information is kept secure in line with Fidelity's Information Security policies and standards. If you are unhappy with how we have used your personal data, you can complain by contacting the UK Data Protection Officer, Fidelity International, Beech Gate, Millfield Lane, Lower Kingswood, Tadworth, Surrey KT20 6RP.
In order to assist the Company in meeting its statutory requirements, the Company delegates certain duties around the processing of this data to its third party service providers, such as the Company's Registrar and Printers. The Company has appointed Fidelity to undertake marketing activities for the Company and their privacy statement can be found on the Company's website at https://investment-trusts.fidelity.co.uk/privacy-policy/
Customer: Fidelity Project Title: Asian Values Half Year Rpt 2020 T: 0207 055 6500 F: 020 7055 6600 DIRECTORS' REPORTSINFORMATION FOR SHAREHOLDERSGeneral Data Protection Regulation ("GDPR") The Company's agreements with the third party service providers have been updated to be compliant with GDPR requirements. The Company confirms to its shareholders that their data will not be shared with any third party for any other purpose, such as for marketing purposes. In some circumstances, it may be necessary to transfer shareholders' personal data across national borders to Fidelity Group entities operating in the European Economic Area ("EEA"). Where this does occur, the European standard of protections will be applied to the personal data that is processed. Where personal data is transferred within the Fidelity group, but outside of the EEA, that data will subsequently receive the same degree of protection as it would in the EEA.
We will keep the personal data for as long as is necessary for these purposes and no longer than we are legally permitted to do so.
Shareholders can access the information that the Company holds about them or ask for it to be corrected or deleted by contacting Fidelity's UK Data Protection Officer, Fidelity International, Beech Gate, Millfield Lane, Lower Kingswood, Tadworth, Surrey KT20 6RP.
Alternative Investment Fund ("AIF"). The Company is an AIF.
Alternative Investment Fund Manager ("AIFM"). The Board has appointed FIL Investment Services (UK) Limited to act as the Company's AIFM (the Manager).
The Alternative Investment Fund Managers Directive ("AIFMD") is a European Union Directive and was implemented on 22 July 2014.
The Company uses the following Alternative Performance Measures which are all defined in this Glossary of Terms:
Assets provided as security.
MSCI All Countries Asia ex Japan Index (net) total return (in Sterling terms) up to 31 January 2020. From 1 February 2020, this changed to the MSCI All Countries Asia ex Japan Small Cap Index (net) total return (in Sterling terms).
A contract for difference is a derivative. It is a contract between the Company and an investment house at the end of which the parties exchange the difference between the opening price and the closing price of an underlying asset of the specified financial instrument. It does not involve the Company buying or selling the underlying asset, only agreeing to receive or pay the movement in its share price. A contract for difference allows the Company to gain access to the movement in the share price by depositing a small amount of cash known as margin. The Company may reason that the asset price will rise, by buying ("long" position) or fall, by selling ("short" position). If the Company trades long, dividends are received and interest is paid. If the Company trades short, dividends are paid and interest is received.
An entity that holds (as intermediary) the Company's assets, arranges the settlement of transactions and administers income, proxy voting and corporate actions. The Company's Custodian is JPMorgan Chase Bank.
An entity that oversees the custody, cash arrangements and other AIFM responsibilities of the Company. J.P. Morgan Europe act as the Company's Depositary.
Financial instruments (such as futures, options and contracts for difference) whose value is derived from the value of an underlying asset.
The diluted net asset value per ordinary share reflects what the net asset value per ordinary share would have been if there were any outstanding rights attached to subscription shares and had they been exercised at the period end date. A dilution occurs when the exercise price of the subscription share rights is less than the net asset value per ordinary share. At the reporting date, the Company had no more subscription shares remaining.
If the share price of the Company is lower than the net asset value per ordinary share, the Company's shares are said to be trading at a discount. The discount is shown as a percentage of the net asset value per ordinary share.
The fair value is the best measure of the realisable value of the investments, including derivatives, at a point in time and this is measured as:
Agreement to buy or sell a currency at a specified future date and at a pre-agreed price.
Agreements to buy or sell a stated amount of a security at a specific future date and at a pre-agreed price.
Customer: Fidelity Project Title: Asian Values Half Year Rpt 2020 T: 0207 055 6500 F: 020 7055 6600 DIRECTORS' REPORTSINFORMATION FOR SHAREHOLDERSDiluted Net Asset Value per Ordinary Share Gearing describes the level of the Company's exposure and is expressed as a percentage of shareholders' funds. It reflects the amount of exposure the Company uses to invest in the market. It can be obtained through the use of bank loans, bank overdrafts and derivatives, in order to increase the Company's exposure to investments. If assets rise in value, gearing magnifies the return to shareholders. Correspondingly, if assets fall in value, gearing magnifies the fall. Derivatives are used as a way of gaining exposure to the price movements of shares without buying the underlying shares directly.
In a simple example, if a company has £100 million of net assets and a total portfolio of £108 million, with £8 million of borrowings (either via bank loans or derivatives), then the shareholders' funds are 8% geared. Normally, the higher the gearing percentage, the more sensitive the Company's shares will be to the movements up and down in the value of the investment portfolio.
A measure of the Company's total equity exposure. It is calculated as the sum of all long exposures, after taking account of hedging positions and the absolute value of all short exposures.
A strategy aimed at minimising or eliminating the risk or loss through adverse movements normally involving taking a position in a derivative such as future or option.
FIL Investment Services (UK) Limited is the appointed Manager under the Alternative Investment Fund Managers' Directive ("AIFMD") and it has delegated the portfolio management of assets to FIL Investments International.
Net asset value is sometimes also described as "shareholders' funds" and represents the total value of the Company's assets less the total value of its liabilities. For valuation purposes it is common to express the net asset value on a per ordinary share basis.
The net asset value divided by the number of ordinary shares in issue.
A measure of the Company's net equity exposure. It is calculated as the total of all long exposures (less the total of any exposures hedging the portfolio) less the total of all short exposures.
Total operating expenses (excluding finance costs and taxation) incurred by the Company as a percentage of the average daily net asset values for the reporting year.
An option is a contract which gives the right but not the obligation to buy or sell an underlying asset at an agreed price on or before an agreed date. Options may be calls (buy) or puts (sell) and are used to gain or reduce exposure to the underlying asset on a conditional basis.
Nitin Bajaj is the appointed Portfolio Manager for the Company and is responsible for managing the Company's assets.
If the share price of the Company is higher than the net asset value per ordinary share, the Company is said to be trading at a premium. The premium is shown as a percentage of the net asset value per ordinary share.
An entity that manages the Company's shareholders register. The Company's Registrar is Link Asset Services.
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The return/(loss) generated in the period from the investments:
Shareholders' funds are also described as net asset value and represent the total value of the Company's assets less the total value of its liabilities.
Customer: Fidelity Project Title: Asian Values Half Year Rpt 2020 T: 0207 055 6500 F: 020 7055 6600 DIRECTORS' REPORTSINFORMATION FOR SHAREHOLDERSShareholders' Funds The return on the share price or net asset value per ordinary share taking into account the rise and fall of share prices and dividends paid to shareholders. Any dividends received by the shareholder are assumed to have been reinvested in additional shares (for share price total return) or the Company's assets (for net asset value total return).
Ordinary shares of the Company that have been repurchased by the Company and not cancelled but held in Treasury. These shares do not receive dividends, have no voting rights and are excluded from the net asset value per ordinary share calculation.
To find out more about Fidelity Asian Values PLC visit our website www.fidelityinvestmenttrusts.com where you can read articles and watch videos on the Company.
Fidelity, Fidelity International, the Fidelity International logo and symbol are trademarks of FIL Limited
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