Annual Financial Report

FIDELITY ASIAN VALUES PLC

Preliminary Announcement of Results for the year ended 31 July 2010

 

Chairman's Statement

 

PERFORMANCE

 

The year under review has been positive for the Company. The undiluted net
asset value increased by 27.8%, compared to the performance of the MSCI All
Countries (Combined) Far East ex Japan Index which returned 19.8% over the same
period. (All figures in sterling terms and on a total return basis). At the
time of writing, the Company's ordinary share price is 189.25p.

 

SUBSCRIPTION SHARE ISSUE

 

During the year, a General meeting of the Company was held on 4 March 2010 and
a resolution was passed authorising a Bonus Issue of one subscription share for
every five ordinary shares held by qualifying shareholders. Each subscription
share gives the holder the right, but not the obligation, to subscribe for one
ordinary share at the end of each month from the end of May 2010 until the end
of May 2013 inclusive. Each subscription share may be exercised only once. The
exercise price is 191.00 pence per share based on the Company's NAV at 5.00 pm
on 4 March 2010, plus a 1% premium to such NAV, rounded up to the nearest whole
penny. A total of 12,188,212 subscription shares were allotted to the
qualifying shareholders and dealings commenced in these shares on 8 March 2010.
A total of 36,342 ordinary shares have been allotted following the exercise of
the rights attached to these subscription shares at the end of each month from
May to July 2010.

 

ARTICLES OF ASSOCIATION

 

At the General Meeting of the Company held on 4 March 2010 shareholders
approved the adoption of new Articles of Association of the Company, required
largely to reflect the implementation of the Companies Act 2006 and the rights
attaching to the subscription shares.

 

GEARING

 

The Company entered into a 364 day revolving credit facility with ING Bank N.V.
on 3 February 2010 for an amount of up to US$15 million. This followed the
repayment of the Lloyds TSB Bank PLC loan of US$11 million on 25 September
2009. The Company announced on 12 April 2010 that US$9 million had been drawn
down. The Board continues to review the gearing position on a regular basis and
believes the ability to gear will add value over the long term. As at 31 July
2010 gross gearing was 4.9% of shareholders' funds and net gearing (after
deducting cash held) was 3.8%. The current net gearing parameters set by the
Board are between 0% and 10%.

 

DIRECTORATE AND GOVERNANCE

 

During the year, Sir Robin McLaren and Sir Victor Garland both retired from the
Board. It is with great sadness that I record the recent death of Sir Robin who
retired from the Board following the 2009 Annual General Meeting. Sir Robin's
extensive Far Eastern experience contributed greatly to the Company and he will
be missed both professionally and personally.

 

Sir Victor retired from the Board on 3 June 2010. A Director of the Company
since launch, Sir Victor served as Chairman of the Board from 2000 to 2010. The
Board wishes to thank him for his committed stewardship of the Company whilst
Chairman and important contribution to the Company's business during his 15
years of service. His colleagues wish him well in his retirement. To ensure the
Board continues to strengthen its skills and experience, two new non-executive
Directors of the Company were appointed with effect from 1 January 2010. Mrs
Kate Bolsover and Mr Philip Smiley both have extensive experience in the
financial services industry and the Far East. In accordance with the Company's
Articles of Association, Kate Bolsover and Philip Smiley will seek formal
appointment to the Board at the forthcoming Annual General Meeting.

 

Following Sir Victor's retirement, I was appointed as Chairman of the Board
with effect from 3 June 2010. Kate Bolsover was, in turn, appointed Chairman of
the Audit Committee and William Knight was appointed Senior Independent
Director on 3 June 2010, both roles having previously been held by me. In
accordance with the Listing Rules, Kathryn Matthews, following an evaluation of
her performance by her fellow Directors and on their recommendation, will seek
re-election at the forthcoming Annual General Meeting. Kathryn Matthews retired
from her executive responsibilities at Fidelity in October 2009 and seeks
annual re-election due to her recent employment relationship with the Manager.
Both William Knight and I are subject to retirement by rotation and we will
both also be seeking re-election at the forthcoming Annual General Meeting.

 

The Directors have a wide range of appropriate skills and experience to make up
a balanced Board for your Company. The Board continues to monitor corporate
governance issues, reviewing and updating processes as appropriate.

 

DIVIDEND

 

In accordance with the Company's objective for long term capital growth, the
Board has agreed that there will be no dividend paid for the year ended 31 July
2010.

 

ANNUAL GENERAL MEETING

 

The 2010 Annual General Meeting will be held on Monday 29 November 2010 at
Fidelity's Cannon Street office commencing at 11.00 am. All shareholders and
Fidelity Savings Plan and ISA Scheme investors are invited to attend. The
Portfolio Manager will be making a presentation on the year under review and
immediate prospects for the Company.

 

OUTLOOK

 

Relative to the rest of the world, Asia remains a region with potential for
sustainable earnings growth. The region continues to attract investors thanks
to its substantial stimulus measures introduced in 2009 and healthy financial
systems. Central banks continue to maintain a vigilant stance against inflation
with precautionary tightening measures in place. Further capital raisings could
trigger market volatility; however stocks with quality earnings should perform
well. Earnings to date have been encouraging and investment performance is
expected to remain strong as prospects improve.

 

MrHugh Bolland

Chairman

22 September 2010

 

Enquiries:

Chris Davies - Head of Investment Trusts, FIL Investments International - 01737
837 723

Anne Read - Corporate Communications, FIL Investments International - 0207 961
4409

Rebecca Tyerman - Assistant Company Secretary, FIL Investments International -
01737 837 758


FIDELITY ASIAN VALUES PLC

 

Income Statement for the year ended 31 July 2010

 

                                         2010                    2009          
                                                                               
                                revenue capital  total  revenue capital  total 
                                                                               
                          Notes  £'000   £'000   £'000   £'000   £'000   £'000 
                                                                               
                                                                               
                                                                               
Gains on investments                                                           
designated at fair value                                                       
through profit or loss      9         -  25,432  25,432       -   9,210   9,210
                                                                               
                                                                               
                                                                               
Income                      2     2,446       -   2,446   2,767       -   2,767
                                                                               
                                                                               
                                                                               
Investment management fee   3   (1,161)       - (1,161)   (861)       -   (861)
                                                                               
                                                                               
                                                                               
Other expenses              4     (799)       -   (799)   (402)       -   (402)
                                                                               
                                                                               
                                                                               
Exchange gains on other                                                        
net assets                 13         9     181     190     153   1,972   2,125
                                                                               
                                                                               
                                                                               
Exchange losses on loan    13         -   (178)   (178)       - (1,409) (1,409)
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
Net return before finance                                                      
costs and taxation                  495  25,435  25,930   1,657   9,773  11,430
                                                                               
                                                                               
                                                                               
Interest payable on loan    5     (131)       -   (131)   (444)       -   (444)
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
Net return on ordinary                                                         
activities before                                                              
taxation                            364  25,435  25,799   1,213   9,773  10,986
                                                                               
                                                                               
                                                                               
Taxation on return on                                                          
ordinary activities         6     (200)       -   (200)   (233)       -   (233)
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
Net return on ordinary                                                         
activities after taxation                                                      
for the year                        164  25,435  25,599     980   9,773  10,753
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
Return per ordinary share   8     0.27p  41.73p  42.00p   1.49p  14.85p  16.34p
                                                                               
                                                                               
                                                                               

 

A Statement of Total Recognised Gains and Losses has not been prepared as there
are no gains and losses other than those reported in this Income Statement.

 

The total column of the Income Statement is the profit and loss account of the
Company. All revenue and capital items in the above statement derive from
continuing operations. No operations were acquired or discontinued in the year.

 


FIDELITY ASIAN VALUES PLC

 

Reconciliation of Movements in Shareholders' Funds for the year ended 31 July
2010

 

                              share    capital    other non-                                    
                                                                                                
                     share   premium  redemption distributable  other   capital revenue  total  
                                                                                                
                    capital  account   reserve      reserve    reserve  reserve reserve  equity 
                                                                                                
              Notes  £'000    £'000     £'000        £'000      £'000    £'000   £'000   £'000  
                                                                                                
                                                                                                
                                                                                                
Opening                                                                                         
shareholders'                                                                                   
funds: 1                                                                                        
August 2008           25,789   15,359      5,034         7,367   44,143  37,750     499  135,941
                                                                                                
                                                                                                
                                                                                                
Net                                                                                             
recognised                                                                                      
capital gains                                                                                   
for the year               -        -          -             -        -   9,773       -    9,773
                                                                                                
                                                                                                
                                                                                                
Share premium                                                                                   
account                                                                                         
cancelled                  - (15,359)          -             -   15,359       -       -        -
                                                                                                
                                                                                                
                                                                                                
Capital                                                                                         
redemption                                                                                      
reserve                                                                                         
cancelled                  -        -   (13,803)             -   13,803       -       -        -
                                                                                                
                                                                                                
                                                                                                
Repurchase of                                                                                   
ordinary                                                                                        
shares                 (238)        -        238             -    (988)       -       -    (988)
                                                                                                
                                                                                                
                                                                                                
Ordinary                                                                                        
shares                                                                                          
cancelled on                                                                                    
completion of                                                                                   
the Tender                                                                                      
Offer               (10,316)        -     10,316             - (52,153)       -       - (52,153)
                                                                                                
                                                                                                
                                                                                                
Costs                                                                                           
associated                                                                                      
with the                                                                                        
Tender Offer               -        -          -             -    (842)       -       -    (842)
                                                                                                
                                                                                                
                                                                                                
Loan                                                                                            
redemption                                                                                      
costs                      -        -          -             -     (83)       -       -     (83)
                                                                                                
                                                                                                
                                                                                                
Net revenue                                                                                     
after                                                                                           
taxation for                                                                                    
the year                   -        -          -             -        -       -     980      980
                                                                                                
                                                                                                
                                                                                                
Dividend paid                                                                                   
to                                                                                              
shareholders    7          -        -          -             -        -       -   (494)    (494)
                                                                                                
                                                                                                
                                                                                                
                                                                                                
                                                                                                
Closing                                                                                         
shareholders'                                                                                   
funds: 31                                                                                       
July 2009             15,235        -      1,785         7,367   19,239  47,523     985   92,134
                                                                                                
                                                                                                
                                                                                                
Net                                                                                             
recognised                                                                                      
capital gains                                                                                   
for the year   13          -        -          -             -        -  25,435       -   25,435
                                                                                                
                                                                                                
                                                                                                
Bonus issue                                                                                     
of                                                                                              
subscription                                                                                    
shares         13        609        -          -             -    (609)       -       -        -
                                                                                                
                                                                                                
                                                                                                
Exercise of                                                                                     
rights                                                                                          
attached to                                                                                     
subscription                                                                                    
shares and                                                                                      
conversion                                                                                      
into ordinary                                                                                   
shares         13        (2)        2          -             -        -       -       -        -
                                                                                                
                                                                                                
                                                                                                
Issue of                                                                                        
ordinary                                                                                        
shares on                                                                                       
exercise of                                                                                     
rights                                                                                          
attached to                                                                                     
subscription                                                                                    
shares         13          9       60          -             -        -       -       -       69
                                                                                                
                                                                                                
                                                                                                
Net revenue                                                                                     
after                                                                                           
taxation for                                                                                    
the year       13          -        -          -             -        -       -     164      164
                                                                                                
                                                                                                
                                                                                                
Dividend paid                                                                                   
to                                                                                              
shareholders    7          -        -          -             -        -       -   (609)    (609)
                                                                                                
                                                                                                
                                                                                                
                                                                                                
                                                                                                
Closing                                                                                         
shareholders'                                                                                   
funds: 31                                                                                       
July 2010             15,851       62      1,785         7,367   18,630  72,958     540  117,193
                                                                                                
                                                                                                
                                                                                                

 


FIDELITY ASIAN VALUES PLC

 

Balance Sheet as at 31 July 2010

 

                                                               2010      2009  
                                                                               
                                                      Notes    £'000     £'000 
                                                                               
Fixed assets                                                                   
                                                                               
Investments designated at fair value through profit                            
or loss                                                 9     121,786    98,131
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
Current assets                                                                 
                                                                               
Debtors                                                10       1,187     1,161
                                                                               
Cash at bank                                                    1,272       425
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                2,459     1,586
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
Creditors - amounts falling due within one year                                
                                                                               
Fixed rate unsecured loan                              11     (5,729)   (6,584)
                                                                               
Other creditors                                        11     (1,323)     (999)
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                              (7,052)   (7,583)
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
Net current liabilities                                       (4,593)   (5,997)
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
Total net assets                                              117,193    92,134
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
Capital and reserves                                                           
                                                                               
Share capital                                          12      15,851    15,235
                                                                               
Share premium account                                  13          62         -
                                                                               
Capital redemption reserve                             13       1,785     1,785
                                                                               
Other non-distributable reserve                        13       7,367     7,367
                                                                               
Other reserve                                          13      18,630    19,239
                                                                               
Capital reserve                                        13      72,958    47,523
                                                                               
Revenue reserve                                        13         540       985
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
Total equity shareholders' funds                              117,193    92,134
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
Net asset value per ordinary share                                             
                                                                               
Basic                                                  14     192.19p   151.18p
                                                                               
Diluted                                                14     191.99p       n/a
                                                                               
                                                                               
                                                                               

 

The financial statements were approved by the Board of Directors on 22
September 2010 and were signed on its behalf by:

 

Hugh Bolland,

Chairman

 


FIDELITY ASIAN VALUES PLC

 

Cash Flow Statement for the year ended 31 July 2010

 

                                                               2010       2009  
                                                                                
                                                     Notes    £'000      £'000  
                                                                                
Operating activities                                                            
                                                                                
Investment income received                                      2,257      2,655
                                                                                
Deposit interest received                                           -         68
                                                                                
Investment management fee paid                                (1,145)    (1,268)
                                                                                
Directors' fees paid                                             (93)       (93)
                                                                                
Other cash payments                                             (720)      (337)
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
Net cash inflow from operating activities             15          299      1,025
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
Returns on investments and servicing of finance                                 
                                                                                
Interest paid                                                   (215)      (495)
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
Net cash outflow from returns on investments and                                
servicing of finance                                            (215)      (495)
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
Financial investment                                                            
                                                                                
Purchase of investments                                      (91,819)   (47,992)
                                                                                
Disposal of investments                                        94,199     97,560
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
Net cash inflow from financial investment                       2,380     49,568
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
Dividend paid to shareholders                          7        (609)      (494)
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
Net cash inflow before use of financing                         1,855     49,604
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
Financing                                                                       
                                                                                
Exercise of subscription share rights                              52          -
                                                                                
Repurchase of ordinary shares                                       -      (988)
                                                                                
Ordinary shares cancelled on completion of the                                  
Tender Offer                                                        -   (52,995)
                                                                                
Loan redemption costs on completion of the Tender                               
Offer                                                               -       (83)
                                                                                
2.65% fixed rate unsecured credit facility drawn                                
down                                                  16        5,857          -
                                                                                
5.60% fixed rate unsecured loan repaid                16      (6,890)    (3,912)
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
Net cash outflow from financing                                 (981)   (57,978)
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
Increase/(decrease) in cash                           16          874    (8,374)
                                                                                
                                                                                
                                                                                

 

The above statements have been prepared on the basis of the accounting policies
as set out in annual financial statements to 31 July 2010. This preliminary
statement, which has been agreed with the Auditor, was approved by the Board on
22 September 2010. It is not the Company's statutory financial statements.  The
statutory financial statements for the financial year ended 31 July 2009 have
been delivered to the Registrar of Companies. The statutory financial
statements for the financial year ended 31 July 2010 have been approved and
audited but have not yet been filed.  The statutory financial statements for
the financial years ended 31 July 2009 and 31 July 2010 received unqualified
audit reports, did not include a reference to any matters to which the auditors
drew attention by way of emphasis without qualifying the report and did not
contain statements under section 498 (2) and (3) of the Companies Act 2006. 
The annual report and financial statements will be posted to shareholders as
soon as is practicable and in any event no later than 28 October 2010.