Final Results & Change to Dividend Dates

FIDELITY ASIAN VALUES PLC - Final Results PR Newswire London, November 13 FIDELITY ASIAN VALUES PLC Final Results For the year ended 31 July 2014 CHANGE TO RECORD DATE AND EX-DIVIDEND DATE FOR FINAL DIVIDEND The final dividend for the year ended 31 July 2014 of 1.10 pence recommended by the Directors will, if approved, be payable on 16 December 2014 to shareholders on the register at close of business on 21 November 2014 (ex-dividend date 20 November 2014). This is a change to the record date and ex-dividend date quoted in the Annual Report and Accounts extracted below (there is no change to the payment date). EXTRACTS FROM THE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 JULY 2014 The information below has been extracted from the Annual Report and Accounts for the year ended 31 July 2014 and is included solely for the purpose of complying with DTR 6.3.5 and the requirements it imposes on issuers as to how to make public annual financial reports. Chairman's Statement PERFORMANCE In the year to 31 July 2014, the Net Asset Value ("NAV") per share of the Company increased by 11.7%, compared to a rise of 5.4% in the Benchmark Index. The Ordinary Share price of the Company rose by 10.1% over the year, with the discount widening from 11.2% to 12.5%. (All figures in UK sterling terms and on a total return basis.) INVESTMENT REVIEW I would first like to start by mentioning that the Company has been added to the `Investment Adviser 100 Club' for 2014. The Club identifies the industry's leading funds and asset managers and this is a great achievement for John Lo, the Portfolio Manager. This achievement is, in large, based on the Company's strong short and long term performance. Asian equities advanced over the year, against the backdrop of falling volatility and relatively low volumes. From a country perspective, South Korea was the best performer as a recovery in developed markets and growth in China consumption proved supportive. Indonesia, on the other hand, was the worst performer given weaker economic fundamentals. A detailed summary of market and sector behaviour is provided in the Portfolio Manager's Review. INVESTMENTS IN COMPANIES NOT LISTED OR DOMICILED IN ASIA During the period the Board granted permission to the Portfolio Manager to invest up to 5% in companies which were not listed or domiciled in Asia, provided the investment had a strong Asian rationale. Shortly after this decision, an investment in Bang and Olufsen was initiated. The company has a strong strategy for growth in China but is listed and domiciled in Denmark. OUTLOOK Asian economies stand to benefit from a return to growth in developed countries and a consequent pick up in exports. Furthermore, a series of reforms announced by the Chinese government will support its transition into a domestic consumption-driven economy, with a focus on revitalising private sectors and increasing urbanisation. The political environment in Indonesia and India is likely to be positive for the implementation of structural reforms. Nonetheless, any elevated reform expectations would need to be realistically managed and reforms are expected to be gradual. Elsewhere in Asia, South Korea offers strong global brands and good earnings growth prospects at attractive valuations. Overall, there are diverse investment opportunities across a wide range of markets in Asia that offer exceptional growth potential at attractive valuations. SHARE REPURCHASES Purchases of ordinary shares for cancellation are made at the discretion of the Board and within guidelines set from time to time by the Board in light of prevailing market conditions. Share repurchases will only be made when they will result in an enhancement to the NAV of ordinary shares for remaining shareholders. Details of ordinary shares repurchased for cancellation during the year are outlined in the full set of Report and Accounts. In the year under review a total of 192,000 ordinary shares were repurchased for cancellation. DIVIDEND Subject to shareholders' approval at the forthcoming Annual General Meeting, the Directors recommend a final dividend of 1.10 pence per ordinary share (2013: 1.10 pence). This dividend will be payable on 16 December 2014 to shareholders on the register at close of business on 17 October 2014 (ex-dividend date 16 October 2014). As the Company's objective is long term capital growth, any revenue surplus is a function of a particular year's business and it should not be assumed that dividends will continue to be paid in future. GEARING The Company continues to gear through the use of Contracts For Difference ("CFDs"). Total portfolio exposure was £192.3m at 31 July 2014, equating to gearing of 11.3%. Further details are provided in the full set of Report and Accounts. The costs of using CFDs are currently lower than the costs involved in traditional gearing (i.e. use of debt). REGULATORY MATTERS As stated in the Half-Yearly Report, the Board has worked with its advisors in order to achieve compliance with the Alternative Investment Fund Managers Directive ("AIFMD") which came into force on 22 July 2014. As a result the Company has appointed FIL Investment Services (UK) Limited (a Fidelity group company) to act as the Company's Alternative Investment Fund Manager ("the Manager"). FIL Investment Services (UK) Limited has delegated the portfolio management to FIL Investments International which previously acted as the Company's Manager. FIL Investments International will continue to act as Company Secretary. An additional requirement of the AIFMD was to appoint a depositary on behalf of the Company to oversee custody and cash arrangements. The Company has now appointed J.P.Morgan Europe Limited to act as the Company's Depositary. J.P.Morgan Europe Limited is part of the same group of companies as JP Morgan Chase Bank which acts as the Company's current banker and custodian and will continue to do so. BOARD SUCCESSION I will be stepping down at the Annual General Meeting after ten years on the Board, and having been Chairman for four years. I am delighted that Kate Bolsover, who is a highly experienced non-executive Director with a background in investment management, will be succeeding me as Chairman. I have every confidence in her ability to lead the Board and wish her success in the future. The Board is also pleased to welcome Michael Warren as a new member of the Board with effect from 29 September 2014. Mr Warren has over 30 years' experience within investment services, having both managed money and businesses and run distribution teams. CONTINUATION VOTE In accordance with the Articles of Association of the Company, the Company is subject to a continuation vote every five years. The next continuation vote will take place at the Annual General Meeting in 2016. ANNUAL GENERAL MEETING The Annual General Meeting will be held on 9 December 2014 at Fidelity's offices at 25 Cannon Street, London EC4M 5TA (St Paul's or Mansion House tube stations) 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 the immediate prospects for the Company. Mr Hugh Bolland Chairman 7 October 2014 Portfolio Manager's Review MARKET REVIEW Far East ex Japan equities advanced over the year. The government in China unveiled a series of reforms towards the end of 2013 with the aim of realigning the economy to achieve a more sustainable path of growth. This included a greater role for the private sector in resource allocation, and reforms to boost urbanisation. Notably, the government would like to rein in credit expansion without GDP falling significantly below 7.5%. The People's Bank of China announced a targeted cut in reserve requirements for qualified banks to boost the agricultural sector and small and medium enterprises. The acceleration of its second quarter GDP growth reflected the impact of cumulative easing measures unveiled so far this year. The export-oriented economies of South Korea and Taiwan showed signs of improvement due to recovering growth in developed markets. Meanwhile, the US Federal Reserve lifted investor sentiment by suggesting that interest rates are likely to remain at record low levels for a `considerable time' after the asset purchase programme ends, and issued a broadly encouraging assessment of the US economic outlook. From a country perspective, equities in South Korea rose strongly as a recovery in developed markets and growth in China consumption proved supportive. Indonesia was the worst performer against the backdrop of weak economic fundamentals. Meanwhile, information technology ("IT") was the best performing sector. This was mainly driven by internet based service providers which benefited from changing consumer preferences, as rising internet penetration fuelled robust earnings growth. The rise of smartphones was a key driver of growth for online games producers. The consumer discretionary sector was also lifted higher as rising income and change in consumer preferences boosted earnings. On the other hand, defensively positioned healthcare, telecommunications services providers and energy producers were the worst performing sectors. PERFORMANCE REVIEW Over the year, the Company's performance produced a return of 11.7% compared to the Benchmark's performance return of 5.4%. This was driven by good stock selection in the industrial, consumer discretionary and materials sectors, as well as favourable positioning in the IT space. Within industrials, an overweight holding in diamond processing machinery manufacturer Sarine Technologies surged on solid earnings growth. Its shares were supported by strong growth in recurring earnings, an increase in dividends and expectations that the next leg of growth would be driven by new product launches. Its technological lead over its peer group and an absence of meaningful competition underpins its valuation. Meanwhile, China-based online games and social media company Tencent Holdings enhanced performance as a result of robust earnings growth, driven by its online games, social network and advertising businesses. An overweight stance in South Korea-based cosmetics producer and retailer AmorePacific added value. The company benefited from rising sales in China, robust expansion of the high-margin digital channel in its domestic market, and stabilising door-to-door sales. Within materials, Nine Dragons Paper Holdings rose towards the end of the review period given signs of improvement in China's macroeconomic environment, rising industry consolidation and prospects of a price rise. Elsewhere in the portfolio some holdings in technology and financials detracted from performance. A position in touch panel manufacturer TPK was affected by an earnings downgrade following a decline in tablet demand and delays in the launch of new products from key customer Apple. The holding has now been sold. In financials, an overweight position in Ping An, initiated in December 2013, detracted from performance as slowing growth and a rise in trust assets led to concerns over asset quality. OUTLOOK Asia is likely to benefit from the economic recovery that is currently underway in the US and parts of Europe. While there are concerns around the growth outlook in China, this is already priced into the market. On a positive note, improving economic data boosted sentiment and an improving earnings outlook helped to drive stock markets in the region. Corporate earnings and economic growth are likely to remain healthy in Asia. Corporate fundamentals are strong, and valuations are below their long term averages, particularly in North Asia. Over the long term, a sustained structural shift in favour of domestic consumption should continue to support growth in Asia. Driven by powerful demographic factors and rising per capita income, growth in intra-regional trade is likely to be strong. Asian economies are likely to be less dependent on the West than in the past. These factors should also continue to support corporate earnings despite a challenging external environment. Asian companies have large cash reserves and low leverage, which provide a buffer in the event of a global economic downturn. Corporates that can take advantage of changing consumer preferences in Asia, and have pricing power, are a compelling investment opportunity given weaker global growth. For these reasons, we believe that investment in Asia offers investors a good opportunity and we have already begun to see flows returning to Asian markets as investors start looking for investments outside of the US and Europe. Mr John Lo Portfolio Manager 7 October 2014 Strategic Report PRINCIPAL RISKS AND UNCERTAINTIES The Board confirms that there is an ongoing process for identifying, evaluating and managing the principal risks faced by the Company. The process is regularly reviewed by the Board in accordance with the Financial Reporting Council's "Internal Control: Revised Guidance for Directors". The Board is responsible for the Company's system of internal control and for reviewing its effectiveness. An internal controls report providing an assessment of risks, together with controls to mitigate these risks, is prepared by the Manager and considered by the Audit Committee at each of its meetings. The Board also determines the nature and extent of any risks it is willing to take in order to achieve its strategic objectives. The Alternative Investment Fund Managers Directive ("AIFMD") came into effect on 22 July 2014. The Board has appointed FIL Investment Services (UK) Limited (a Fidelity group company) to act as the Company's Alternative Investment Fund Manager ("AIFM"). In its capacity as AIFM, FIL Investment Services (UK) Limited has responsibility for risk management for the Company. It works with the Board to identify and manage the principal risks and to ensure that the Board can continue to meet its UK corporate governance obligations. The Board considers the following as the principal risks and uncertainties faced by the Company: Market risk The Company's assets consist mainly of listed securities and the principal risks are therefore market related such as market downturn, interest rate movements, and exchange rate movements. The Portfolio Manager's success or failure to protect and increase the Company's assets against this background is core to the Company's continued success. Risks to which the Company is exposed and which form part of the market risk category are included in the full set of the Report and Accounts together with summaries of the policies for managing these risks. These are: market price risk (which comprises interest rate risk, foreign currency risk and other price risk); liquidity risk, counterparty risk, credit risk and derivative instruments risk. Performance risk The achievement of the Company's performance objective relative to the market requires the application of risk such as strategy, asset allocation and stock selection, and may lead to underperformance of the Benchmark Index. The Board reviews risk at each Board meeting, considers the asset allocation of the portfolio and the risks associated with particular countries and industry sectors within the parameters of the investment objective and strategy. The Portfolio Manager is responsible for actively managing and monitoring the portfolio selected in accordance with the asset allocation parameters and seeks to ensure that individual stocks meet an acceptable risk/reward profile. The emphasis is on long term performance and the Board accepts that by targeting long term results the Company risks volatility of performance in the shorter term. Discount control risk The price of the Company's shares as well as its discount to NAV, are factors which are not within the Company's total control. Some short term influence over the discount may be exercised by the use of share repurchases at acceptable prices within the parameters set by the Board. Details of repurchases during the year are included in the Report and Accounts. The Company's ordinary share price, NAV and discount volatility are monitored daily by the Manager and considered by the Board regularly. Gearing risk The Company has the option to invest up to the total of any loan facilities or to use CFDs to invest in equities. The principal risk is that while in a rising market the Company will benefit from gearing, in a falling market the impact would be detrimental. Other risks are that the cost of gearing may be too high or that the term of the gearing is inappropriate in relation to market conditions. The Company currently has no bank loans and gears through the use of long CFDs. Utilising long CFDs for gearing purposes provides greater flexibility and has been significantly cheaper than traditional bank loans. The Board regularly considers the level of gearing and gearing risk and sets limits within which the Manager must operate. Under AIFMD, new rules have been introduced that change the way in which borrowing and market exposure of Investment Companies is reported. These leverage rules are in addition to the existing gearing limits and, rather than applying to the Company, apply to FIL Investment Services (UK) Limited as the AIFM. Details of the leverage limits and associated controls are contained in the AIFM's Disclosure in the full set of the Report and Accounts. Currency risk The functional currency of the Company in which it reports its results, is UK sterling; however, most of its assets and its income are denominated in other currencies. Consequently, it is subject to currency risk on exchange rate movements between UK sterling and these other currencies. It is the Company's policy not to hedge against currency risks. Further details can be found in the full set of the Report and Accounts. Tax and regulatory risks A breach of Section 1158 of the Corporation Tax Act 2010 could lead to a loss of investment trust status, resulting in the Company being subject to tax on capital gains. A breach of other legal and regulatory rules may lead to suspension from listing on the Stock Exchange. The Board receives regular reports from the Manager confirming regulatory compliance during the year. The regulation which was of greatest significance in this reporting year was the AIFMD. The Board has worked with its advisors in order to achieve compliance with the Directive. FIL Investment Services (UK) Limited, the AIFM, has delegated the portfolio management to FIL Investments International who previously acted as the Company's Manager. FIL Investments International will continue to act as the Company Secretary. An additional requirement of the AIFMD was to appoint a depositary on behalf of the Company to oversee the custody and cash arrangements of the Company. JP Morgan Chase Bank acts as the Company's current banker and custodian and will continue to do so. The Company has extended this arrangement and appointed J.P.Morgan Europe Limited, part of the same group of companies as JP Morgan Chase Bank, to act as the Company's Depositary. Operational risks The Company has no employees and relies on a number of third party service providers, principally the Manager, Registrar, Custodian and Depositary. The Company is dependent on the Manager's control systems and those of its Registrar, Custodian and Depositary, all of whom are monitored and managed by the Manager in the context of the Company's assets and interests on behalf of the Board. The security of the Company's assets, dealing procedures, accounting records and the maintenance of regulatory and legal requirements, among other things, rely on the effective operation of such systems. The Manager, Registrar, Custodian and Depositary are subject to a risk-based programme of internal audits by the Manager. In addition, service providers' own internal controls reports are received by the Board and any concerns investigated. While it is believed that the likelihood of poor governance, compliance and operational administration by third party service providers is low, the financial consequences could be serious, including the associated reputational damage to the Company. Other risks A continuation vote takes place every five years. There is a risk that shareholders do not vote in favour of continuation during periods when performance is poor. The next continuation vote will take place in 2016. Directors Report RELATED PARTY TRANSACTIONS No Director has a contract of service with the Company and no contracts existed during or at the end of the financial period in which any Director was materially interested and which were significant in relation to the Company's business. Therefore, there have been no related party transactions requiring disclosure under Financial Reporting Standard 8. GOING CONCERN The Company's business activities, together with the factors likely to affect its future development, performance and position are set out in the Strategic Report in the full set of the Report and Accounts. The financial position of the Company, its cash flows, liquidity position and gearing are described in the full set of the Report and Accounts. The Company's objectives, policies and processes for managing its capital, financial risk management objectives, details of financial instruments and its exposures to credit and liquidity risk are also set out in the full set of the Report and Accounts The Company's assets consist mainly of securities which are readily realisable. Where outsourcing arrangements are in place, including registrar, custodian and depositary services, alternative service providers are readily available. As a consequence, the Directors believe that the Company is well placed to manage its business risks successfully despite the current uncertain economic outlook. The Board receives regular reports from the Manager and the Directors have a reasonable expectation 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 the annual financial statements. CONTINUATION VOTE In accordance with the Articles of Association of the Company, a continuation vote is required every five years. The next continuation vote will take place at the Annual General Meeting in 2016. Statement of Directors' Responsibilities The Directors are responsible for preparing the Annual Report and the Financial Statements in accordance with applicable law and regulations. Company law requires the Directors to prepare financial statements for each financial period. Under that law they have elected to prepare the Financial Statements in accordance with UK Generally Accepted Accounting Practice. The Financial Statements are required by law to give a true and fair view of the state of affairs of the Company and of the profit or loss for the period. In preparing these Financial Statements the Directors are required to: select suitable accounting policies and then apply them consistently; make judgements and estimates that are reasonable and prudent; state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the Financial Statements; prepare the Financial Statements on the going concern basis unless it is inappropriate to assume that the Company will continue in business; and confirm, to the extent possible, that the Financial Statements are fair, balanced and understandable. The Directors are responsible for ensuring that adequate accounting records are kept which disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the Financial Statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Under applicable law and regulations the Directors are also responsible for preparing a Strategic Report, a Directors' Report, a Corporate Governance Statement and a Directors' Remuneration Report that comply with that law and those regulations. The Directors have delegated responsibility for the maintenance and integrity of the corporate and financial information included on the Company's pages of the Manager's website www.fidelity.co.uk/its to the Manager. Visitors to the website need to be aware that legislation in the UK governing the preparation and dissemination of the Financial Statements may differ from legislation in their jurisdictions. We confirm that to the best of our knowledge the Financial Statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and the Strategic Report and Directors' Report include a fair review of the development and performance of the business and the position of the Company together with a description of the principal risks and uncertainties it faces. We confirm that we consider the Annual Report and Financial Statements, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's performance, business model and strategy. Approved by the Board on 7 October 2014 and signed on its behalf. Mr Hugh Bolland Chairman 7 October 2014 Income Statement for the year ended 31 July 2014 2014 2013 revenue capital total revenue capital total Notes £'000 £'000 £'000 £'000 £'000 £'000 Gains on 9 - 15,131 15,131 - 24,955 24,955 investments designated at fair value through profit or loss Gains/ 10 - 3,147 3,147 - (1,140) (1,140) (losses) on derivative instruments held at fair value through profit or loss Income 2 3,332 - 3,332 2,981 - 2,981 Investment 3 (1,805) - (1,805) (1,485) - (1,485) management fee Other 4 (588) - (588) (592) - (592) expenses Exchange (62) (349) (411) (35) 299 264 (losses)/ gains on other net assets Exchange - - - - (312) (312) losses on bank loans ---------- ---------- ---------- ---------- ---------- ---------- Net return 877 17,929 18,806 869 23,802 24,671 on ordinary activities before finance costs and taxation Finance 5 (103) - (103) (135) - (135) costs ---------- ---------- ---------- ---------- ---------- ---------- Net return 774 17,929 18,703 734 23,802 24,536 on ordinary activities before taxation Taxation on 6 (5) (621) (626) (109) - (109) return on ordinary activities ---------- ---------- ---------- ---------- ---------- ---------- Net return 769 17,308 18,077 625 23,802 24,427 on ordinary activities after taxation for the year ========== ========== ========== ========== ========== ========== Return per 7 ordinary share Basic 1.14p 25.62p 26.76p 1.05p 40.01p 41.06p Diluted 1.14p 25.62p 26.76p 1.05p 39.99p 41.04p ========== ========== ========== ========== ========== ========== 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. The Notes on pages 45 to 59 form an integral part of these Financial Statements Reconciliation of Movements in Shareholders' Funds for the year ended 31 July 2014 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 2012 14,981 1,218 2,224 7,367 15,977 73,992 1,325 117,084 Exercise of rights attached to subscription shares and conversion into ordinary shares 13 (1) - 1 - - - - - Issue of ordinary shares on exercise of rights attached to subscription shares 13 2,864 19,014 - - - - - 21,878 Repurchase of ordinary shares 13 (924) - 924 - (6,964) - - (6,964) Net return on ordinary activities after taxation for the year - - - - - 23,802 625 24,427 Dividend paid to shareholders 8 - - - - - - (596) (596) Closing shareholders' funds: 31 July 2013 16,920 20,232 3,149 7,367 9,013 97,794 1,354 155,829 Repurchase of ordinary shares 13 (48) - 48 - (400) - - (400) Net return on ordinary activities after taxation for the year - - - - - 17,308 769 18,077 Dividend paid to shareholders 8 - - - - - - (744) (744) Closing shareholders' funds: 31 July 2014 16,872 20,232 3,197 7,367 8,613 115,102 1,379 172,762 Balance Sheet as at 31 July 2014 Company number 3183919 2014 2013 Notes £'000 £'000 Fixed assets Investments designated at fair value through profit or loss 9 169,880 151,273 Current assets Derivative assets held at fair value through profit or loss 10 2,617 736 Debtors 11 836 1,217 Amounts held in margin accounts - 856 Cash at bank 1,436 4,220 4,889 7,029 Creditors Derivative liabilities held at fair value through profit or loss 10 (609) (1,604) Other creditors 12 (1,398) (869) (2,007) (2,473) Net current assets 2,882 4,556 Total net assets 172,762 155,829 Capital and reserves Share capital 13 16,872 16,920 Share premium account 14 20,232 20,232 Capital redemption reserve 14 3,197 3,149 Other non-distributable reserve 14 7,367 7,367 Other reserve 14 8,613 9,013 Capital reserve 14 115,102 97,794 Revenue reserve 14 1,379 1,354 Total equity shareholders' funds 172,762 155,829 Net asset value per ordinary share 15 255.99p 230.24p The Financial Statements were approved by the Board of Directors on 7 October 2014 and were signed on its behalf by: Hugh Bolland Chairman Cash Flow Statement for the year ended 31 July 2014 year year ended ended 2014 2013 Notes £'000 £'000 Operating activities Investment income received 2,897 2,293 Income received from long CFDs 185 44 Investment management fees paid (1,785) (1,451) Directors' fees paid (121) (128) Other cash payments (482) (457) Net cash inflow from operating activities 16 694 301 Servicing of finance Interest paid on long CFDs and bank loans (102) (166) Net cash outflow from servicing of finance (102) (166) Taxation Overseas capital gains tax paid (271) - Net cash outflow from taxation (271) - Financial investments Purchase of investments (118,100) (113,823) Disposal of investments 115,361 110,751 Net cash outflow from financial investments (2,739) (3,072) Derivative activities Receipts/(payments) on long CFD positions closed 271 (272) Movements on amounts held at in margin accounts 856 (856) Net cash inflow/(outflow) from derivative activities 1,127 (1,128) Dividend paid to shareholders (744) (596) Net cash outflow before financing (2,035) (4,661) Financing Repurchase of ordinary shares (400) (7,190) Exercise of rights attached to subscription shares - 21,878 Net cash outflow from bank loans repaid - (9,875) Net cash (outflow)/inflow from financing (400) 4,813 (Decrease)/increase in cash 17 (2,435) 152 Notes to the Financial Statements 1 ACCOUNTING POLICIES The Company has prepared its Financial Statements in accordance with United Kingdom Generally Accepted Accounting Practice ("UK GAAP") and 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 January 2009. a) Basis of accounting - The Financial Statements have been prepared on a going concern basis, under the historical cost convention, except for the measurement at fair value of fixed asset investments and derivative assets and liabilities, and on the assumption that approval as an investment trust continues to be granted by HM Revenue & Customs. b) Income - Income from equity investments is credited to the Income Statement on the date on which the right to receive the payment is established. Overseas dividends are stated gross of withholding tax. UK dividends are stated at the amount actually receivable, which is net of the attached tax credit. Interest receivable on short term deposits is credited on an accruals basis. Where the Company has elected to receive its dividends in the form of additional shares rather than cash, the amount of the dividend foregone is recognised in the revenue column of the Income Statement. Any excess in the value of the shares received over the amount of the dividend foregone is recognised in the capital column of the Income Statement. Derivative income from dividends on long contracts for difference ("CFDs") is included in `Income' and recognised in the revenue column of the Income Statement. c) Special dividends - Special dividends are treated as a capital receipt or a revenue receipt depending on the facts and circumstances of each particular case. d) Expenses and finance costs - All expenses are accounted for on an accruals basis and are charged in full to the revenue column of the Income Statement. Finance costs are accounted for using the effective interest method and in accordance with the provisions of Financial Reporting Standard 26 "Financial Instruments: Recognition and Measurement". e) Taxation - Irrecoverable overseas withholding tax suffered is recognised at the same time as the income to which it relates. Deferred taxation is recognised in respect of all timing differences that have originated, but not reversed, at the Balance Sheet date, and where transactions or events that result in an obligation to pay more tax in the future, or a right to pay less tax, have occurred. A deferred taxation asset is recognised when it is more likely than not that the asset will be recoverable. f) Foreign currency - The Directors, having regard to the currency of the Company's share capital and the predominant currency in which its investors operate, have determined the functional currency to be UK sterling. Transactions denominated in foreign currencies are calculated in UK sterling at the rate of exchange ruling as at the date of transactions. Assets and liabilities in foreign currencies are translated at the rates of exchange ruling at the Balance Sheet date. All capital gains and losses, including exchange differences on the translation of foreign currency assets and liabilities, are dealt with in the capital column of the Income Statement. g) Valuation of investments - The Company's business is investing in financial assets with a view to profiting from their total return in the form of income and capital growth. This portfolio of financial assets is managed and its performance evaluated on a fair value basis, in accordance with a documented investment strategy, and information about the portfolio is provided on that basis to the Company's Board of Directors. Accordingly, upon initial recognition the investments are designated by the Company as "at fair value through profit or loss". They are included initially at fair value, which is taken to be their cost, and subsequently the investments are valued at fair value, which is measured as follows: • Listed investments are valued at bid prices, or last market prices, depending on the convention of the exchange on which they are listed, or otherwise at fair value based on published price quotations; and • Unlisted investments, where there is not an active market, are valued using an appropriate valuation technique so as to establish what the transaction price would have been at the Balance Sheet date. In accordance with the AIC SORP the Company includes transaction costs, incidental to the purchase or sale of investments, within gains on investments and has disclosed them in Note 9 on page 50. h) Derivative instruments - The Company has obtained exposure to Asian equities through the use of long CFDs. The gearing level is monitored and reviewed by the Board on an ongoing basis. CFDs are measured at fair value which is the difference between the settlement price of the contract and the fair value of the underlying shares in the contract, which is calculated in accordance with policy 1(g). All gains and losses in the fair value of CFDs are included in the `gains/(losses) on derivative instruments held at fair value through profit or loss' in the capital column of the Income Statement. Income received from dividends on CFDs is included in `income' in the revenue column on the Income Statement and the finance costs of these contracts are included in `Finance costs' in the revenue column of the Income Statement. i) Capital reserve - The following are accounted for in capital reserve: • Gains and losses on the disposal of investments and derivative instruments; • Changes in the fair value of the investments and derivative instruments held at the year end; • Foreign exchange gains and losses of a capital nature; • Dividends receivable which are capital in nature; and • Taxation payable which is capital in nature. As a result of technical guidance issued by the Institute of Chartered Accountants in England and Wales in TECH 01/10 "Distributable Profits", changes in fair value of investments which are readily convertible to cash, without accepting adverse terms at the Balance Sheet date, can be treated as realised. In accordance with the SORP, capital reserves realised and unrealised are shown in aggregate as `capital reserve' in the Reconciliation of Movements in Shareholders' Funds and the Balance Sheet. At the Balance Sheet date all investments held by the Company were listed on a recognised stock exchange and were considered to be readily convertible to cash. j) Dividends - In accordance with Financial Reporting Standard 21: "Events after the Balance Sheet Date" dividends declared and approved by the Company after the Balance Sheet date have not been recognised as a liability of the Company at the Balance Sheet date. 2014 2013 £'000 £'000 2 INCOME Income from investments Overseas dividends 2,996 2,703 Overseas scrip dividends 148 234 Overseas interest 2 - 3,146 2,937 Income from derivative instruments Dividends from long CFDs 185 44 Other income Deposit income 1 - Total income 3,332 2,981 2014 2013 £'000 £'000 3 INVESTMENT MANAGEMENT FEE Investment management fee 1,805 1,485 A summary of the terms of the Management Agreement is given in the Directors' Report on page 24. 2014 2013 £'000 £'000 4 OTHER EXPENSES AIC fees 14 13 Custody and depositary fees 87 62 Directors' expenses 26 20 Directors' fees* 122 108 Legal and professional fees 86 84 Marketing expenses 88 88 Printing and publication expenses 53 65 Registrars' fees 36 55 Fees payable to the Company's Auditor for audit services 24 20 Other expenses 52 50 Costs associated with the exercise of the subscription - 27 shares 588 592 *Details of the breakdown of Directors' fees are disclosed in the Directors' Remuneration Report on page 36. 2014 2013 £'000 £'000 5 FINANCE COSTS Interest paid on long CFDs 103 36 Interest paid on bank loans - 99 103 135 2014 2013 revenue capital total revenue capital total £'000 £'000 £'000 £'000 £'000 £'000 6 TAXATION ON RETURN ON ORDINARY ACTIVITIES a) Analysis of the taxation charge for the year Taxation on overseas 5 - 5 109 - 109 dividends Taxation on Indian capital - 621 621 - - - gains Total current taxation for 5 621 626 109 - 109 the year (see Note 6b) b) Factors affecting the taxation charge for the year The taxation charge for the year is lower than the standard rate of UK corporation tax of 22.33% (2013: 23.67%). A reconciliation of the taxation charge based on the standard rate of UK corporation tax to the actual taxation charge is shown below: 2014 2013 revenue capital total revenue capital total £'000 £'000 £'000 £'000 £'000 £'000 Return on ordinary 774 17,929 18,703 734 23,802 24,536 activities before taxation Return on ordinary 173 4,004 4,177 174 5,634 5,808 activities before taxation multiplied by the standard rate of UK corporation tax of 22.33% (2013: 23.67%) Effects of: Gains on investments - (4,004) (4,004) - (5,634) (5,634) not taxable* Income not taxable (636) - (636) (654) - (654) Excess management 469 - 469 484 - 484 expenses Overseas taxation (6) - (6) (4) - (4) expensed Overseas taxation 5 - 5 109 - 109 suffered Overseas capital gains - 621 621 - - - tax charge Current taxation charge 5 621 626 109 - 109 (Note 6a) * Investment trust companies are exempt from taxation on capital gains if they meet the HM Revenue & Customs criteria set out in Section 1159 Corporation Taxes Act 2010. c) Deferred taxation There are excess management expenses of £9,343,000 (2013: £7,241,000) and excess loan relationship deficits of £2,605,000 (2013: £2,615,000) which could constitute a deferred taxation asset. It is unlikely that this deferred taxation asset will be utilised in the future and therefore it has not been recognised in these Financial Statements. 2014 2013 revenue capital total revenue capital total 7 RETURN PER ORDINARY SHARE Basic return per 1.14 25.62 26.76 1.05 40.01 41.06 ordinary share - pence Diluted return per 1.14 25.62 26.76 1.05 39.99 41.04 ordinary share - pence Net return on ordinary 769 17,308 18,077 625 23,802 24,427 activities after taxation for the year - £'000s The basic return per ordinary share is based on 67,568,925 ordinary shares (2013: 59,496,253) being the weighted average number of ordinary shares in issue during the year. There was no dilution for the year ended 31 July 2014 because all the rights attached to subscription shares were exercised in the year ended 31 July 2013. The diluted returns per ordinary share for the year ended 31 July 2013 are based on the net return on ordinary activities after taxation for that year and on the weighted average number of ordinary shares in issue during the year, increased to include the potential number of ordinary shares that could have been issued at the beginning of the year on the exercise of rights attached to subscription shares. For the purposes of calculating this number of potential ordinary shares, the excess of the average ordinary share price during the year over the 191 pence exercise price of a subscription share is multiplied by the number of subscription shares rights in issue. The number of potential ordinary shares represents the number of ordinary shares that could have been purchased at the average ordinary share price with this excess amount. The weighted average number of ordinary shares in issue during the year on this diluted basis was 59,515,839. 2014 2013 £'000 £'000 8 DIVIDENDS Dividend paid Dividend of 1.10 pence per ordinary share paid for the 744 - year ended 31 July 2013 Dividend of 1.00 pence per ordinary share paid for the - 596 year ended 31 July 2012 744 596 Dividend proposed Dividend proposed of 1.10 pence per ordinary share payable 742 - for the year ended 31 July 2014 (based on the number of shares in issue at the date of this report) Dividend proposed of 1.10 pence per ordinary share payable - 744 for the year ended 31 July 2013 742 744 The Directors propose the payment of a dividend for the year ended 31 July 2014 of 1.10 pence per ordinary share to be paid on 16 December 2014 to shareholders on the register at 17 October 2014 (ex-dividend date 16 October 2014). 2014 2013 £'000 £'000 9 INVESTMENTS DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS Listed overseas 169,880 151,273 Opening fair value of investments Opening book cost 127,297 108,740 Opening investment holding gains 23,976 15,018 151,273 123,758 Movements in the year Purchases at cost 118,425 114,041 Sales - proceeds (114,949) (111,481) Sales - realised gains on sales in the year 11,813 15,997 Movement in investment holding gains in the year 3,318 8,958 Closing fair value of investments 169,880 151,273 Closing book cost 142,586 127,297 Closing investment holding gains 27,294 23,976 Closing fair value of investments 169,880 151,273 2014 2013 £'000 £'000 Gains on investments Gains on sales of investments in the year 11,813 15,997 Investment holding gains in the year 3,318 8,958 15,131 24,955 The portfolio turnover rate for the year was 74.1% (2013: 83.1%). Gains on investments are shown net of investment transaction costs which are incurred in the acquisition and disposal of investments. These were as follows: 2014 2013 £'000 £'000 Cost of investment transactions Purchase costs 217 385 Sales costs 302 592 519 977 2014 2013 fair exposure fair exposure value value £'000 £'000 £'000 £'000 10 DERIVATIVE INSTRUMENTS Derivative assets/(liabilities) held at fair value through profit or loss Long CFDs - assets 2,617 10,509 736 4,146 Long CFDs - liabilities (609) 11,863 (1,604) 11,983 2,008 22,372 (868) 16,129 2014 2013 £'000 £'000 Gains/(losses) on derivative instruments held at fair value through profit or loss in the year Gains/(losses) on long CFD positions closed 271 (272) Movement in investment holding gains/(losses) on long 2,876 (868) CFDs 3,147 (1,140) 2014 2013 £'000 £'000 11 DEBTORS Securities sold for future settlement 390 802 Accrued income 367 330 Other debtors 79 85 836 1,217 2014 2013 £'000 £'000 12 OTHER CREDITORS Securities purchased for future settlement 750 573 Other creditors and accruals 648 296 1,398 869 2014 2013 number of £'000 number £'000 shares of shares 13 SHARE CAPITAL Issued, allotted and fully paid: Ordinary shares of 25 pence each Beginning of the year 67,680,213 16,920 59,918,781 14,980 Issue of ordinary shares on the - - 11,454,432 2,864 exercise of rights attached to subscription shares Repurchase of ordinary shares (192,000) (48) (3,693,000) (924) End of the year 67,488,213 16,872 67,680,213 16,920 Subscription shares of 0.01 pence each Beginning of the year - - 11,454,432 1 Exercise of rights attached to - - (11,454,432) (1) subscription shares and conversion into ordinary shares End of the year - - - - Total share capital 16,872 16,920 The subscription shares were listed and trading commenced in the shares on 8 March 2010. Each subscription share gave the holder the right, but not the obligation, to subscribe for one ordinary share on the last business day of each month up to the last business day in May 2013. The exercise price was 191 pence per share. Between 1 August 2012 and 31 May 2013 rights attaching to 6,382,430 subscription shares were exercised. On 3 June 2013, the Company appointed a Final Subscription Trustee, in respect of the 5,072,002 subscription shares that had not been exercised by shareholders. The Trustee exercised all these outstanding subscription shares on the same terms on 3 June 2013 and sold the resulting ordinary shares in the market. The profits of the sale, being the net proceeds less the 191 pence per share cost of exercising the rights, and after deduction of expenses and fees, were paid to the holders of those outstanding subscription shares. This brought the total number of subscription shares exercised in the year to 11,454,432. 14 RESERVES The "share premium account" represents the amount by which the proceeds from the issue of ordinary shares, on the exercise of rights attached to subscription shares, exceeded the nominal value of those ordinary shares. It is not distributable by way of dividend. It cannot be used to fund share repurchases. The "capital redemption reserve" maintains the equity share capital of the Company and represents the nominal value of shares repurchased and cancelled. It is not distributable by way of dividend. It cannot be used to fund share repurchases. The "other non-distributable reserve" represents amounts transferred with High Court approval from the warrant reserve, in prior years. It is not distributable by way of dividend. It cannot be used to fund share repurchases. The "other reserve" represents amounts transferred with High Court approval from the share premium account and the capital redemption reserve, in prior years. It is not distributable by way of dividend. It can be used to fund share repurchases. The "capital reserve" represents realised gains or losses on investments and derivatives sold, unrealised increases and decreases in the fair value of investments and derivatives held and other income and costs recognised in the capital column of the Income Statement. It is not distributable by way of dividend. It can be used to fund share repurchases. The "revenue reserve" represents retained revenue surpluses recognised through the revenue column of the Income Statement. It is distributable by way of dividend. 15 NET ASSET VALUE PER ORDINARY SHARE The net asset value per ordinary share is based on net assets of £172,762,000 (2013: £155,829,000) and on 67,488,213 (2013: 67,680,213) ordinary shares, being the number of ordinary shares in issue at the year end. 2014 2013 £'000 £'000 16 RECONCILIATION OF NET RETURN BEFORE FINANCE COSTS AND TAXATION TO NET CASH INFLOW FROM OPERATING ACTIVITIES Net total return before finance costs and taxation 18,806 24,671 Net capital return before finance costs and taxation (17,929) (23,802) Net revenue return before finance costs and taxation 877 869 Scrip dividends (148) (234) (Increase)/decrease in accrued income and other (31) 56 debtors Increase/(decrease) in other creditors and accruals 1 (281) Overseas taxation suffered (5) (109) Net cash inflow from operating activities 694 301 2014 2013 £'000 £'000 17 RECONCILIATION OF NET CASH MOVEMENTS TO MOVEMENT IN NET FUNDS/(DEBT) Net funds/(debt) at the beginning of the year 4,220 (5,794) Net cash (decrease)/increase (2,435) 152 Net decrease in bank loans - 9,875 Foreign exchange movement on cash at bank (349) 299 Foreign exchange movement on bank loans - (312) Change in net funds (2,784) 10,014 Net funds at the end of the year 1,436 4,220 2014 net cash foreign 2013 flows exchange £'000 £'000 £'000 movements £'000 Analysis of movements in net funds Cash at bank 1,436 (2,435) (349) 4,220 18 FINANCIAL INSTRUMENTS MANAGEMENT OF RISK The general risk analysis undertaken by the Board and its overall policy approach to risk management are set out in the Strategic Report on pages 12 and 13. This Note is incorporated in accordance with Financial Reporting Standard 29 "Financial Instruments: Disclosures" ("FRS 29") and refers to the identification, measurement and management of risks potentially affecting the value of financial instruments. The Company's financial instruments comprise: • Equity shares and derivative instruments (which comprise long CFDs) held in accordance with the Company's investment objective and policies; and • Cash, liquid resources and short term debtors and creditors that arise from its operations. The risks identified by FRS 29 arising from the Company's financial instruments are market price risk (which comprises interest rate risk, foreign currency risk and other price risk), liquidity risk, counterparty risk, credit risk and derivative instruments risk. The Board reviews and agrees policies for managing each of these risks, which are summarised below. These policies have remained unchanged since the beginning of the accounting period. Market price risk Interest rate risk The Company finances its operations through share capital raised. In addition, the Company has a geared exposure to Asian equities through the use of long CFDs which incur funding costs and consequently the Company is exposed to a financial risk as a result of increases in Asian interest rates. Interest rate risk exposure The values of the Company's financial instruments that are exposed to movements in interest rates are shown below: 2014 2013 £'000 £'000 Exposure to financial instruments that earn interest Amounts held in margin accounts - 856 Cash at bank 1,436 4,220 1,436 5,076 Exposure to financial instruments that bear interest Long CFD exposure in excess of fair value 20,364 16,997 Net exposure to financial instruments that bear 18,928 11,921 interest Foreign currency risk The Company's total return and total net assets are affected by foreign exchange movements because the Company has income and assets which are denominated in currencies other than the Company's base currency which is UK sterling. Three principal areas have been identified where foreign currency risk could impact the Company: • Movements in rates affecting the value of investments and long CFDs; • Movements in rates affecting short term timing differences; and • Movements in rates affecting income received. The Company does not hedge, by the use of derivative instruments, the UK sterling value of investments, long CFDs and other net assets which are priced in other currencies. The Company might also be subject to short term exposure from exchange rate movements, for example, between the date when an investment is bought or sold and the date when settlement of the transaction occurs. Currency exposure of financial assets The company's financial assets comprise equity investments, long CFDs, short term debtors and cash. The currency profile of these financial assets is shown below: 2014 currency investments designated at exposure short cash total fair value through profit or to long term loss CFDs debtors £'000 £'000 £'000 £'000 £'000 Australian 10,284 - - - 10,284 dollar Chinese 1,028 - 23 25 1,076 renminbi Danish 2,244 - - - 2,244 krone Hong Kong 64,346 13,653 260 - 78,259 dollar Indian 14,601 - 260 123 14,984 rupee Korean won 39,355 - 3 - 39,358 Malaysian 1,759 - - - 1,759 ringgit New 786 - - - 786 Zealand dollar Singapore 14,374 - - - 14,374 dollar Taiwan 13,892 - 207 202 14,301 dollar UK - - 79 41 120 sterling US dollar 7,211 8,719 4 1,045 16,979 169,880 22,372 836 1,436 194,524 2013 currency investments designated at exposure short cash* total fair value through profit or to long term loss CFDs debtors £'000 £'000 £'000 £'000 £'000 Australian 1,537 - - - 1,537 dollar Chinese 25,944 - - - 25,944 renminbi Hong Kong 40,231 5,733 675 - 46,639 dollar Indian 1,844 - 7 - 1,851 rupee Indonesian 1,489 - 23 - 1,512 rupiah Korean won 32,505 - 3 - 32,508 Malaysian 10,504 - 251 92 10,847 ringgit Singapore 7,262 - 17 - 7,279 dollar Taiwan 21,904 - 76 1 21,981 dollar UK - - 83 - 83 sterling US dollar 8,053 10,396 82 4,983 23,514 151,273 16,129 1,217 5,076 173,695 *Cash includes cash at bank and amounts held at brokers. Currency exposure of financial liabilities The Company finances its investment activities through its ordinary share capital and reserves and it has a geared exposure to Asian equities through the use of long CFDs. The Company's financial liabilities comprise long CFDs and other short term creditors. The currency profile of these financial liabilities is shown below: 2014 currency gearing short total through term long creditors CFDs £'000 £'000 £'000 Danish krone - 195 195 Hong Kong dollar 11,114 2 11,116 Indian rupee - 350 350 Korean won - 249 249 Taiwan dollar - 306 306 UK sterling - 293 293 US dollar 9,250 3 9,253 20,364 1,398 21,762 2013 currency gearing short total through term long creditors CFDs £'000 £'000 £'000 Hong Kong dollar 5,077 522 5,599 Malaysian ringgit - 52 52 UK sterling - 292 292 US dollar 11,920 3 11,923 16,997 869 17,866 Other price risk Other price risk arises mainly from uncertainty about future prices of financial instruments used in the Company's business. It represents the potential loss the Company might suffer through holding market positions in the face of price movements. The Board meets quarterly to consider the asset allocation of the portfolio and the risk associated with particular industry sectors within the parameters of the investment objective. The Portfolio Manager is responsible for actively managing and monitoring the existing portfolio selected in accordance with the overall asset allocation parameters described above and seeks to ensure that individual stocks also meet an acceptable risk/reward profile. Liquidity risk The Company's assets mainly comprise readily realisable securities and long CFDs, which can be sold easily to meet funding commitments if necessary. Short term flexibility is achieved by the use of overdraft facilities as required. Counterparty risk All securities and derivative instruments are transacted with brokers and carry the risk that the counterparty to a transaction may not meet its financial obligations. All counterparties for any type of trading are assessed by an independent Credit Research and Analysis function of the Manager. Exposures to counterparties are monitored frequently by the Manager. For long CFDs, in accordance with the terms of International Swap Dealers Association ("ISDA") market standard derivative contracts, collateral is used to reduce the risk of both parties to the contract. Collateral is managed on a daily basis for all relevant transactions. At 31 July 2014, £2,088,000 in government bonds was held by the broker in a segregated collateral account, on behalf of the Company, to reduce the credit risk exposure of the Company. At 31 July 2013, £856,000 in cash was held by the Company in a segregated collateral account, on behalf of the broker, to reduce the credit risk exposure of the broker. Credit risk Investments may be adversely affected if any of the institutions with which money is deposited suffer insolvency or other financial difficulties. All transactions are carried out with a large number of brokers and are settled on a delivery versus payment basis. Limits are set on the amount that can be due from any one broker. All security transactions are through brokers who have been approved as an acceptable counterparty. This is reviewed on an ongoing basis. At the year end, the exposure to credit risk includes cash at bank, outstanding securities transactions and the fair value of the long CFDs. Derivative instruments risk The risks and risk management processes which result from the use of derivative instruments are included within the risk categories disclosed above. Derivative instruments are used by the Portfolio Manager to gain unfunded long exposure to equity markets, sectors or single stocks. "Unfunded" exposure is exposure gained without an initial outflow of capital. The risk and performance contribution of these instruments to the Company's portfolio is overseen by a specialist derivative instruments team which draws on over forty years experience in derivative risk management. This team uses sophisticated portfolio risk assessment tools to advise the Portfolio Manager on portfolio construction. RISK SENSITIVITY ANALYSIS Investments exposure sensitivity analysis An increase of 10% in the fair value of the investments at 31 July 2014 would have increased the total return on ordinary activities and total net assets by £16,988,000 (2013: £15,127,000). A decrease of 10% in the fair value of investments would have had an equal and opposite effect. Derivative instruments exposure sensitivity analysis The Company invests in long CFDs to gain exposure to the equity markets. An increase of 10% in the price of shares underlying the CFDs at 31 July 2014 would have increased total net assets and total return on ordinary activities by £2,237,000 (2013: £1,613,000). A decrease of 10% would have had an equal and opposite effect. Interest rate risk sensitivity analysis If the Company's exposures at 31 July 2014 to bank balances and long CFDs had been held throughout the year, with all other variables remaining constant, then if interest rates had increased by 0.25%, total net assets and total return on ordinary activities would have decreased by £47,000 (2013: £30,000). A decrease in interest rates by 0.25% would have had an equal and opposite effect. Foreign currency risk sensitivity analysis At 31 July 2014, if UK sterling had strengthened by 10% in relation to the larger currency exposures, then with all other variables held constant, total net assets and total return on ordinary activities would have decreased by the amounts shown below: 2014 2013 £'000 £'000 Australian dollar (935) (140) Hong Kong dollar (6,104) (3,731) Indian rupee (1,330) (168) Korean won (3,555) (2,955) Singapore dollar (1,307) (662) Taiwan dollar (1,272) (1,998) At 31 July 2014, if UK sterling had weakened by 10% in relation to the larger currency exposures, then with all other variables held constant, total net assets and total return on ordinary activities would have increased by the amounts shown below: 2014 2013 £'000 £'000 Australian dollar 1,143 171 Hong Kong dollar 7,460 4,560 Indian rupee 1,626 206 Korean won 4,345 3,612 Singapore dollar 1,597 809 Taiwan dollar 1,555 2,442 Fair value of financial assets and liabilities As explained in Notes 1(g) and 1(h) on pages 45 and 46, investments are stated at fair value, which is bid or last market price, and long CFDs are stated at fair value, which is the difference between the settlement price and the value of the underlying shares in the contract. Other financial assets and liabilities are stated in the Balance Sheet at values which are not materially different to their fair values. In the case of cash, book value approximates to fair value due to the short maturity of the instruments. FAIR VALUE HIERARCHY Under FRS 29 companies are required to disclose the fair value hierarchy that classifies financial instruments measured at fair value at one of three levels according to the relative reliability of the inputs used to estimate their fair values. 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 valuation techniques used by the Company are explained in Notes 1(g) and 1 (h) on pages 45 and 46. The tables below set out movements in the Company's fair value hierarchy: 2014 level 1 level 2 total investments derivative instruments £'000 £'000 £'000 Fair value of financial instruments at 151,273 (868) 150,405 the beginning of the year Purchases of investments at cost 118,425 - 118,425 Sales of investments - proceeds (114,949) - (114,949) Sales of investments - realised gains 11,813 - 11,813 Derivative positions closed - receipts - (271) (271) Derivative positions closed - realised - 271 271 gains Movement in investment holding gains in 3,318 2,876 6,194 the year Fair value of financial instruments at 169,880 2,008 171,888 the end of the year 2013 level 1 level 2 total investments derivative instruments £'000 £'000 £'000 Fair value of financial instruments at 123,758 - 123,758 the beginning of the year Purchases of investments at cost 114,041 - 114,041 Sales of investments - proceeds (111,481) - (111,481) Sales of investments - realised gains 15,997 - 15,997 Derivative positions closed - payments - 272 272 Derivative positions closed - realised - (272) (272) losses Movement in investment holding gains/ 8,958 (868) 8,090 (losses) in the year Fair value of financial instruments at 151,273 (868) 150,405 the end of the year 19 CAPITAL MANAGEMENT The Company does not have any externally imposed capital requirements. The financial resources of the Company comprise its share capital and reserves, as disclosed in its Balance Sheet on page 43, and its gearing which is managed through the use of long CFDs, as disclosed on page 16. These resources are managed in accordance with the Company's investment policy, in pursuit of its investment objective, both of which are detailed in the Strategic Report on page 10. The principal risks and their management are disclosed in the Strategic Report on pages 12 and 13 and in Note 18 above. 20 CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS There were no contingent liabilities or capital commitments at 31 July 2014 (2013: none). 21 RELATED PARTY TRANSACTIONS AND TRANSACTIONS WITH THE MANAGER The Directors have complied with the provisions of Financial Reporting Standard 8 "Related Party Disclosures", which require disclosure of related party transactions and balances. FIL Investment Services (UK) Limited is the Alternative Investment Fund Manager of the Company and has delegated portfolio management to FIL Investments International, the previous Manager. Details of the services provided by the Manager and fees paid are given on page 24. Fees paid to the Directors are disclosed in the Directors' Remuneration Report on page 36. STATUS OF RESULTS ANNOUNCEMENT CHANGE TO RECORD DATE AND EX-DIVIDEND DATE FOR FINAL DIVIDEND The record and ex-dividend dates in the extracts above are as originally quoted in the Annual Report and Accounts due to the requirement to communicate those sections in unedited full text under DTR 6.3.5. The record date and ex-dividend date have now changed as noted at the beginning of this announcement. The final dividend for the year ended 31 July 2014 of 1.10 pence recommended by the Directors will, if approved, be payable on 16 December 2014 to shareholders on the register at close of business on 21 November 2014 (ex-dividend date 20 November 2014) 2013 FINANCIAL INFORMATION The figures and financial information for 2013 are extracted from the published Annual Report and Accounts for the year ended 31 July 2013 and do not constitute the statutory accounts for that year. The Annual Report and Accounts has been delivered to the Registrar of Companies and included the Report of the Independent Auditors which was unqualified and did not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006. 2014 FINANCIAL INFORMATION The figures and financial information for 2014 are extracted from the published Annual Report and Accounts for the year ended 31 December 2013 and do not constitute the statutory accounts for that year. The Annual Report and Accounts include the Report of the Independent Auditors which is unqualified and does not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006. The Annual Report and Accounts will be delivered to the Registrar of Companies in due course. A copy of the annual report will shortly be submitted to the National Storage Mechanism and will be available for inspection at www.morningstar.co.uk/uk/NSM. The annual report and financial statements were posted to shareholders on/ around 17 October 2014 and are available on the Company's website at www.fidelity.co.uk/its For Enquiries, please contact: Natalia de Sousa FIL Investments International Company Secretary 13 October 2014 +44 (0) 1737 837846

Companies

Fidelity Asian Values (FAS)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today