Annual Financial Report
FIDELITY EUROPEAN VALUES PLC
ANNUAL FINANCIAL REPORT, PROXY FORM AND ADDITIONAL DISCLOSURES TO THE
PRELIMINARY RESULTS FOR THE YEAR TO
31 DECEMBER 2010
Further to the voluntary disclosure of the Company's annual results for the
year ended 31 December 2010 by way of a preliminary announcement dated 7 March
2011, in accordance with the Disclosure and Transparency Rules ("the Rules")
4.1.3 and 6.3.5(2) this announcement contains the text of the preliminary
announcement dated 7 March 2011 together with the additional text in compliance
with the Rules.
The Company's annual report and financial statements for the year ended 31
December 2010 together with the accompanying proxy form have been submitted to
the UK Listing Authority, and will shortly be available for inspection on the
National Storage Mechanism (NSM):
www.hemscott.com/nsm.do
(Documents will usually be available for inspection within two business days of
this notice being given)
The annual report and financial statements will shortly be available on the
Company's website at
https://www.fidelity.co.uk/static/pdf/common/investment-trusts/european/annual-report.pdf
Rebecca Burtonwood
FIL Investments International
Company Secretary
8 April 2011
01737 836 869
FIDELITY EUROPEAN VALUES PLC
For the year ended 31 December 2010
Announcement of Year End Results
Chairman's Statement
I have pleasure in presenting the annual report of Fidelity European Values PLC
for the year ended 31 December 2010, my first as Chairman.
PERFORMANCE
In 2010, global economic growth rebounded, following the end of a deep
recession in the advanced economies, whilst China and India continued to expand
at a rapid pace. In Europe, there was a divergence between the stronger
so-called "core" economies such as Germany, which benefited from a weaker euro
and strong consumption in Asia, and the "peripheral" countries, which were
encumbered by debt issues. Indeed, equity market performance in Europe proved
volatile, as the focus of attention turned to the sovereign risk crisis and its
impact on eurozone economies and the Euro itself.
Against this backdrop, the net asset value (NAV) per share of the Company
increased by 7.1%, outperforming its benchmark, the FTSE World Europe (ex UK)
Index, which rose by 5.1%. Overall, companies with exposure to emerging markets
performed well, whereas those in the financial sector struggled. Selecting
financials with stronger balance sheets whilst avoiding commercial banks which
came under particular pressure, helped returns for the portfolio. In addition,
exposure to selected basic materials companies, particularly in the chemicals
sector, also proved positive. Returns were held back by a lack of exposure to
industrial cyclical companies, which benefited from a strong rally towards the
end of the year.
A detailed review of the performance of the portfolio is provided in the
Manager's Review. (All figures are in sterling and are on a total return
basis).
DISCOUNT MANAGEMENT
The Board remains active in discount management, including buying back shares
at a discount. This is a practice it has adopted since launch and buybacks have
continued during the year. The purpose of this is to reduce share price
volatility and it also results in an enhancement to the net asset value per
share. Further details of share buybacks made during the year may be found in
the Directors' Report.
It is disappointing to note that the level of discount has nonetheless widened
over the year, causing the share price return to lag the NAV return. Indeed,
the share price showed a small decline over the period. To some extent this is
because continental European equity markets have been out of fashion with
investors, capital having flowed more towards emerging markets. I can assure
you it is a situation which the Board continues to monitor carefully.
Performance over one year, five years and since launch
to 31 December 2010 (on a total return basis)
NAV Share price FTSE World
Europe
(ex UK) Index
One year +7.1% -1.3% +5.1%
Five years +31.0% +7.9% +29.8%
Since launch (1991) +1,447.0% +1,194.3% +474.5%
Source: Fidelity and Datastream as at 31 December 2010
Basis: bid-bid with net income reinvested
Past performance is not a guide to future returns
DIVIDENDS
The Board intends to continue with its practice of paying out earnings in full.
The objective is one of long term capital growth and we will not seek to
influence the Manager to determine the level of income of your Company's
portfolio in any particular year.
The Board has decided to recommend a final dividend of 15.75 pence per share
for the year ended 31 December 2010 (2009: final dividend: nil; interim
dividend: 22.50 pence). This dividend will be payable on 27 May 2011 to
shareholders on the register at close of business on 18 March 2011 (ex-dividend
date 16 March 2011).
The decrease in the level of income and thus the dividend payment in comparison
to last year is a function of stock selection, but it is important to note that
the NAV return has been positive and ahead of its benchmark.
PORTFOLIO MANAGER
During the year, we announced that Sam Morse would take over management of the
portfolio with effect from
1 January 2011. Sam replaces Sudipto Banerji who was appointed to new portfolio
management responsibilities within Fidelity's global equity team.
With more than 20 years of successful investment experience, I am sure that Sam
Morse will build on the hard work of Sudipto Banerji. Sam follows a strong
stock selection process which the Board believes is closely aligned to what
shareholders expect from their investment in the Company. We hope that further
improved performance and signs of better sentiment towards Continental European
equities will also be reflected in a narrowing of the discount level.
Sam's investment approach is focused on generating long term outperformance, in
particular through investment in companies with the prospect of continuing
dividend growth, positive fundamentals, cash generation, a robust balance sheet
and an attractive valuation. As such, his method is closely aligned with the
Company's objective.
The Board watched Sam's success in transferring his approach from the
management of UK equities to the Fidelity European Fund and, as a result,
considered this to be a good opportunity to bring both the open and
closed-ended European vehicles under the same manager. This mirrors the
management responsibilities during the tenures of both Anthony Bolton
(1991-2001) and Tim McCarron (2001-2008).
INVESTMENT POLICY
The broad thrust of investment policy continues without significant change.
This being said, the Board is always looking for new ways of enhancing the way
in which your Company operates.
Shareholders will have received a circular with the Annual Report detailing the
Board's recommendation to change the Company's investment policy to permit the
use of Contracts for Difference ("CFD"s) for gearing purposes.
A full explanation is provided in the circular. The Board believes that it is
in the best interests of shareholders for the Company to continue to have the
ability to employ gearing. The ability to use CFDs will increase gearing
flexibility and add to the range of options available to the Board and FIL
Investments International.
We continue to monitor and review the Company's gearing level, which currently
stands at 8%, reflecting the broadly positive view of the Manager towards
opportunities in European equities, fully endorsed by your Board.
DIRECTORATE
Following the Annual General Meeting held on 18 May 2010, Robert Walther, who
had been a Director of the Company since launch and Chairman for nine years,
retired. We are grateful to Robert for the strong leadership he provided and
his sound judgement over the many years of his involvement in your Company.
I was appointed Chairman and James Robinson was appointed Chairman of the Audit
Committee and Senior Independent Director with effect from that date. As
previously detailed, Robin Niblett was appointed a Director on 14 January 2010
following a search using an external agency and was duly re-elected at the AGM.
Simon Fraser is subject to annual re-election under the Listing Rules due to
his recent employment relationship with the Manager and his directorship of
another investment trust managed by Fidelity, namely Fidelity Japanese Values
PLC. The Board is convinced that Simon Fraser's experience serves the Company
well, and the Directors voted unanimously that he should remain a Director when
he left the employment of Fidelity.
The Board supports the proposal in the new UK Corporate Governance Code for
Directors of FTSE 350 companies to be subject to annual re-election. The Board
has therefore decided to introduce such annual re-election at this year's AGM,
a year ahead of the proposed schedule. As detailed in the biographies in the
Annual Report the Directors have a wide range of appropriate skills and
experience to make up a balanced Board for your Company. With the exception of
Simon Fraser, all other Directors are totally independent.
The Board has considered the proposal for the re-election of all of the
Directors and recommends to shareholders that they vote in favour of the
proposals.
CONTINUATION VOTE
In accordance with the Articles of Association of the Company, an ordinary
resolution that the Company continue as an investment trust for a further two
years was passed at the 2009 Annual General Meeting. A further continuation
vote will take place at this year's Annual General Meeting. The Company's
performance record has been excellent since launch with a NAV increase of
1447.3% compared to an increase in the benchmark Index of 474.5%. During the
past 12 months the Company's NAV has outperformed the Index by 2% and is also
ahead of the Index over 3, 5 and 10 years. Therefore your Board recommends that
shareholders vote in favour of the continuation vote. A further continuation
vote will take place at the Annual General Meeting in 2013.
ANNUAL GENERAL MEETING
The Annual General Meeting of the Company is due to take place on 18 May 2011
at midday at Fidelity's offices at 25 Cannon Street. Full details of the
meeting are given in the Annual Report and I look forward to talking with as
many shareholders as possible at this occasion.
CONCLUSION
Investment markets will have to contend with a wide range of complex factors in
2011, not least, now, political unrest in the Middle East and North Africa and
increasing inflationary pressures, induced largely by rising commodity prices.
In addition, peripheral eurozone economies will most likely face growth
headwinds in the coming year, due to austerity measures introduced by their
governments. However, the more stable core eurozone economies, including
Germany, continue to benefit from the global recovery and are even now seeing
signs of improving domestic confidence. With global economic growth forecasts
remaining positive and, we hope, the political will to tackle the sovereign
debt issues in Europe, the future looks reasonably bright for continental
European equities. Equity valuations in the region continue to be attractive
and companies are in a more robust financial position than a year ago, giving
rise to good stock picking opportunities.
Humphrey van der Klugt
Chairman
7 March 2011
Manager's Review
FIL Investments International
The Company is managed by FIL Investments International (which is authorised
and regulated by the Financial Services Authority). FIL Investments
International is part of the FIL Limited group which, as at 31 December 2010,
had total assets under management exceeding £160 billion.
Sam Morse
is a portfolio manager with FIL Investment Services (UK) Limited based in
London. During the year, we announced that Sam would take over the management
of the portfolio with effect from 1 January 2011 replacing Sudipto Banerji. Sam
has more than 20 years' investment experience. He also manages the Fidelity
European Fund.
PERFORMANCE REVIEW
As shown in the Summary of Results in the annual report, the NAV per share of
Fidelity European Values PLC increased by 7.1% in the year to 31 December 2010,
outperforming the FTSE World Europe (ex UK) Index, which rose by 5.1%. (All
performance figures are quoted on a total return basis and in sterling).
The portfolio generated positive absolute returns and outperformed the broader
market. European equity markets produced positive gains over the year, but were
highly volatile as newsflow surrounding the sovereign risk crisis dominated the
headlines. Overall, companies in the region with exposure to global trade
performed well, whereas financials suffered during periods of uncertainty.
MARKET BACKGROUND
European equities made positive gains at the start of the year, with investors
anticipating continuing global economic recovery and companies reporting
improved earnings results. However, this was short-lived as intensified Greek
debt problems spilled over from the previous year and investors grew concerned
that there would be an escalation in Eurozone sovereign risk.
Significant support packages announced from the EMU member states, the IMF and
the EU combined were not enough to stem investor fears of contagion. Banking
sector worries remained given their exposure to sovereign bonds. The interbank
funding market also showed signs of stress with lending rates starting to rise
once more.
After a short lull during the summer period, investors began to rotate into
riskier assets once again. This was as a result of better than expected macro
economic data and the announcement that there would be further quantitative
easing from the US. At a company level, third quarter earnings releases
continued to be positive and the anticipation of continuing economic recovery
led investors to be less concerned with European contagion and US recession
risks.
The year end saw a European equity market rally in which even the peripheral
countries participated as investors began to appreciate the positive
fundamentals that Europe can offer rather than focus on the negative headlines.
PORTFOLIO REVIEW
During the period, the portfolio outperformed its benchmark by 2%. Stock
picking, particularly in the financials sector, was the key contributor to
relative out performance. Avoiding commercial banks in some of the more
troubled Eurozone economies such as Spain, Ireland and Greece proved positive,
whereas holding financial stocks with a more defensive profile such as Zurich
Financial Services, the Swiss insurance company, and Swedbank of Sweden, also
helped returns.
Exposure to basic materials was positive during the period. Within the
chemicals sector, Umicore, which generates a large part of its revenue from
catalytic converters used in the automobile industry, benefited from a cyclical
recovery in automobile production during the year. Other positions in the
sector, such as BASF, benefited from good relative returns, but to a lesser
degree.
Factors that held back performance included an underweight exposure to the
industrial cyclical stocks which enjoyed a year end rally due to growing
optimism in a continued global economic recovery.
OUTLOOK
There are still some key challenges for European economies to face, not least
debt issues especially in the periphery. However, attractive valuations
relative to history and other regions, together with the prospect of profits
growth in spite of these economic headwinds, means that there are some good
reasons for investors to look again at Europe. A focus on attractively valued
companies with sustainable dividend growth prospects should continue to add
value in an uncertain economic environment.
FIL Investments International
7 March 2011
Principal risks and uncertainties
Due to the uncertain economic climate, shareholders will have greater concerns
about the way their investments are managed. The Board confirms that there is
an ongoing process for identifying, evaluating and managing the principal risks
which fall under the general headings of strategic, operational and management.
With the assistance of Fidelity's internal audit team the Board has constructed
a risk matrix which identifies the key risks to the Company under these broad
headings. The Board reviews and agrees policies, which have remained unchanged
since the beginning of the accounting period, for managing risks and summaries
of these are set out below.
The process is regularly reviewed by the Board in accordance with the FRC's
"Internal Control: Revised Guidance for Directors on the Combined Code". Risks
are identified and graded. This process, together with the policies and
procedures for the mitigation of risks, is updated and reviewed regularly in
the form of internal controls reports considered by the Audit Committee.
The key risks identified are:
1. Market risks
The Company's assets consist mainly of listed securities and the principal
risks are therefore market related such as market recessions, interest rate
movements, deflation/inflation, terrorism and protectionism.
The Portfolio Manager's success or failure to protect and increase the
Company's assets against this background are core to the Company's continued
success. Other factors affected by market forces, such as exchange and bond
rates, contribute to risks which have to be taken as part of the Company's
normal business.
Risks to which the Company is exposed and which form part of the market risks
category are included in Note 18 to the financial statements in the annual
report together with summaries of the policies for managing these risks. These
comprise: market price risk (comprising other price risk, interest rate risk
and foreign currency risk), liquidity risk, counterparty risk and credit risk.
The Company's €40,000,000 fixed term loan facility with Lloyds TSB Bank plc was
repaid on maturity on 22 June 2010. The €65,000,000 fixed term loan facility
with Barclays Bank PLC and the €25,000,000 revolving credit facility (currently
nil drawn down) with Lloyds TSB Bank plc will both mature on 15 December 2011.
The extent to which any loan facilities will be retained or renewed will be
kept under the most careful scrutiny. Cash may be held against the loans held
by the Company to reduce the level of net gearing. However, should good
opportunities for investment arise, these funds are readily available. A day to
day overdraft facility can be used if required. Limited finance from
counterparties including suppliers has not impacted the Company to date,
however there are alternative suppliers available in the market place should
the need arise.
The Company relies on a number of main counterparties, namely the Manager,
Registrar and Custodian. The Manager is the member of a privately owned group
of companies on which a regular report is provided to the Board. The Manager,
Registrar and Custodian are subject to regular audits by Fidelity's internal
controls team and the counterparties' own internal controls reports are
received by the Board and any concerns investigated.
2. Performance risk
The achievement of the Company's performance objective relative to the market
requires the application of risk. Strategy, asset allocation and stock
selection might lead to underperformance of the benchmark Index and target.
Management of the risks set out above is carried out by the Board which, at
each Board meeting, considers the asset allocation of the portfolio and the
risk associated with particular countries and industry sectors within the
parameters of the investment objective. The Portfolio Manager is responsible
for actively monitoring the portfolio selected in accordance with the asset
allocation parameters and seeks to ensure that individual stocks meet an
acceptable risk/reward profile.
3. Investment management and income risks - dividends
In addition to the risk of the mis-management of funds by poor investment
decisions, there is also a risk involved in income. The Company's objective is
capital growth and, as explained in the Chairman's Statement, the Portfolio
Manager is not constrained in any way to determine the level of income. The
Board monitors this risk through the receipt of detailed income reports and
forecasts which are considered at each meeting.
4. Share price, NAV and discount volatility risk
The price of the Company's shares relative to the benchmark Index and in
absolute terms, as well as its discount to net asset value, 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.
Details of repurchases during the year are given in the annual report. The
Company's share price, NAV and discount volatility are monitored daily by the
Manager and considered by the Board at each of its meetings.
5. Gearing risk
The Company has the option to invest up to the total of its loan facilities in
equities. In a rising market the Company will benefit but in a falling market
the impact would be detrimental. In order to manage the level of gearing the
Board regularly considers gearing and gearing risk and sets limits accordingly.
The Portfolio Manager follows these and may hold short term cash deposits to
control the level of net gearing appropriate to the circumstances as viewed at
the time.
6. Control systems, regulation, governance including shareholder relations
risks
The Company is dependent on the Manager's control systems and those of its
Custodian and Registrar, both of which 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 and the maintenance of
investment trust status under Section 1159 of the Corporation Tax Act 2010,
among other things, rely on the effective operation of such systems. These are
regularly tested and a programme of internal audits is carried out by the
Manager to maintain standards. Regular reports are provided to the Board.
7. Other risks
Other risks monitored on a regular basis include loan covenants, which are
subject to daily monitoring, together with the Company's cash position, and the
continuation vote (at a time of poor performance). Regular reports are provided
to the Board.
Related Parties
Mr Fraser was employed by FIL Limited Group until the end of December 2008. Mr
Fraser is a Director of Barclays PLC and Barclays Bank PLC. The Company has a
current loan relationship with Barclays Bank PLC. Mr Fraser has no influence
over the decisions by Barclays Bank PLC in its lending relationship with the
Company.
FIL Limited has an interest of 112,379 shares or 0.23% in the Company (2009:
112,379 shares or 0.22%).
No Director is under 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, except as disclosed previously in relation to Mr Fraser's interest in
the Management Agreement and his directorship of Barclays Bank PLC. There have
been no other related party transactions requiring disclosure under Financial
Reporting Standard ("FRS") 8. The interests of the Directors in the ordinary
shares of the Company as at 31 December 2010 and 31 December 2009 are shown in
the annual report.
Statement of Directors' Responsibilities
The Directors are responsible for preparing the annual report and 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; and
• prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Company will continue in business.
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 its 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 Directors' Report, including a Business Review, a Directors'
Remuneration Report and a Corporate Governance Statement that comply with that
law and those regulations. The Directors are responsible 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. Visitors to
the website need to be aware that legislation in the United Kingdom governing
the preparation and dissemination of the financial statements may differ from
legislation in their own 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 Directors' Report includes 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.
Approved by the Board on 7 March 2011 and signed on its behalf.
Humphrey van der Klugt
Chairman
7 March 2011
Income Statement for the year ended 31 December 2010
2010 2009
revenue capital total revenue capital total
£'000 £'000 £'000 £'000 £'000 £'000
Gains on investments - 33,621 33,621 - 46,288 46,288
designated at fair value
through profit or loss
Income* 18,883 - 18,883 23,261 - 23,261
Investment management fee (5,036) - (5,036) (4,582) - (4,582)
VAT recovered on investment - - - 37 - 37
management fee
Other expenses (664) - (664) (793) - (793)
Exchange gains/(losses) on 65 (4,808) (4,743) 161 (8,056) (7,895)
other net assets
Exchange gains on loans - 4,153 4,153 - 6,867 6,867
Net return before finance 13,248 32,966 46,214 18,084 45,099 63,183
costs and taxation
Finance costs (3,025) - (3,025) (3,768) - (3,768)
Net return on ordinary 10,223 32,966 43,189 14,316 45,099 59,415
activities before taxation
Taxation on return on (2,262) (60) (2,322) (3,434) 506 (2,928)
ordinary activities**
Net return on ordinary 7,961 32,906 40,867 10,882 45,605 56,487
activities after taxation
for the year
Return per ordinary share 15.95p 65.91p 81.86p 20.59p 86.27p 106.86p
*INCOME
2010 2009
£'000 £'000
Income from investments designated at fair value
through profit or loss
Overseas dividends 18,344 20,954
Overseas scrip dividends 352 1,730
18,696 22,684
Other income
Deposit interest 55 165
Income from Fidelity Institutional Liquidity Fund plc 132 412
Total income 18,883 23,261
** Relates to overseas taxation only.
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.
Reconciliation of Movements in Shareholders' Funds for the year ended 31
December 2010
share capital
share premium redemption capital revenue total
capital account reserve reserve reserve equity
£'000 £'000 £'000 £'000 £'000 £'000
Opening shareholders'
funds:
1 January 2009 13,728 58,615 2,097 550,355 25,186 649,981
Net recognised capital - - - 45,099 - 45,099
gains for the year
Repurchase of ordinary (949) - 949 (37,913) - (37,913)
shares
Taxation credited to - - - 506 - 506
capital
Net revenue return after - - - - 10,882 10,882
taxation for the year
Dividends paid to - - - - (19,620) (19,620)
shareholders
Closing shareholders'
funds:
31 December 2009 12,779 58,615 3,046 558,047 16,448 648,935
Net recognised capital - - - 32,966 - 32,966
gains for the year
Repurchase of ordinary (417) - 417 (17,968) - (17,968)
shares
Taxation charged to - - - (60) - (60)
capital
Net revenue return after - - - - 7,961 7,961
taxation for the year
Dividend paid to - - - - (11,292) (11,292)
shareholders
Closing shareholders'
funds:
31 December 2010 12,362 58,615 3,463 572,985 13,117 660,542
Balance Sheet as at 31 December 2010
2010 2009
£'000 £'000
Fixed assets
Investments designated at fair value 693,547 658,771
through profit or loss
Current assets
Debtors 2,106 7,760
Fidelity Institutional Liquidity Fund plc* 21,533 45,823
Cash at bank 3,976 40,973
27,615 94,556
Creditors - amounts falling due within one
year
Fixed rate unsecured loan (55,812) (35,471)
Other creditors (4,808) (11,280)
(60,620) (46,751)
Net current (liabilities)/assets (33,005) 47,805
Total assets less current liabilities 660,542 706,576
Creditors - amounts falling due after more
than one year
Fixed rate unsecured loan - (57,641)
Total net assets 660,542 648,935
Capital and reserves
Share capital 12,362 12,779
Share premium account 58,615 58,615
Capital redemption reserve 3,463 3,046
Capital reserve 572,985 558,047
Revenue reserve 13,117 16,448
Total equity shareholders' funds 660,542 648,935
Net asset value per ordinary share 1,335.78p 1,269.52p
* Fidelity Institutional Cash Fund plc was renamed Fidelity Institutional
Liquidity Fund plc on 5 July 2010.
Cash Flow Statement for the year ended 31 December 2010
2010 2009
£'000 £'000
Operating activities
Investment income received 14,713 17,088
Deposit interest received 188 657
Investment management fee paid (4,958) (4,602)
Performance fee paid - (7,458)
VAT recovered on investment management fee - 37
paid
Directors' fees paid (112) (113)
Other cash payments (735) (659)
Net cash inflow from operating activities 9,096 4,950
Servicing of finance
Interest paid on bank loans (3,054) (3,794)
Net cash outflow from servicing of finance (3,054) (3,794)
Taxation
Overseas taxation recovered 1,485 1,218
Taxation recovered 1,485 1,218
Financial investment
Purchase of investments (555,131) (834,557)
Disposal of investments 554,223 882,130
Net cash (outflow)/inflow from financial (908) 47,573
investment
Dividends paid to shareholders (11,292) (19,620)
Net cash (outflow)/inflow before use of (4,673) 30,327
liquid resources and financing
Cash flow from management of liquid
resources
Fidelity Institutional Liquidity Fund plc 24,290 2,941
Net cash inflow from management of liquid 24,290 2,941
resources
Net cash inflow before financing 19,617 33,268
Financing
Repurchase of ordinary shares (19,590) (36,004)
3.23% fixed rate unsecured loan repaid (33,147) -
Net cash outflow from financing (52,737) (36,004)
Decrease in cash (33,120) (2,736)
The above statements have been prepared on the basis of the accounting policies
as set out in the financial statements in the annual report to 31 December
2010. This preliminary statement, which has been agreed with the Auditor, was
approved by the Board on 7 March 2011. It is not the Company's statutory
financial statements. The statutory financial statements for the financial year
ended 31 December 2009 have been delivered to the Registrar of Companies. The
statutory financial statements for the financial year ended 31 December 2010
have been approved and audited but have not yet been filed. The statutory
financial statements for the financial years ended 31 December 2009 and 31
December 2010 received unqualified audit reports, did not include a reference
to any matters to which the Auditor 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 8 April 2011.
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