Fidelity Asian Values Regulatory News (FAS)

Fidelity Asian Values Plc - Half-year Report

PR Newswire

London, April 28

FIDELITY ASIAN VALUES PLCHalf-Yearly Report for the 6 months ended 31 January 2020

PORTFOLIO MANAGER’S HALF-YEARLY REVIEW

PERFORMANCE REVIEWOver the six-month period ended 31 January 2020, the net asset value (“NAV”) of Fidelity Asian Values PLC (the Company) fell by 13.2%, compared with a decline of 3.6% for the MSCI All Countries Asia ex Japan Index (net) total return (in Sterling terms) (the Company’s “Comparative Index”). Over the same period, the Company’s share price decreased by 15.0% (All figures are on a total return basis).

Six months is a relatively short period, and I do not consider short-term returns to be the most important measure; it is returns over the long-term that are key. That said, I am conscious that the Company’s NAV has underperformed the Comparative Index for all periods except for the time since I took over the management of the portfolio.

The foremost reason for this underperformance is that in the last three years the Company’s value style and bias towards small caps has been out of favour, as large growth stocks have strongly outperformed small cap value stocks.

As a reminder, my investment philosophy is focused on owning good quality businesses, run by competent management and buying them at a price which leaves enough margin of safety. Whenever markets get infatuated with a certain theme, it becomes harder for investors like me who focus primarily on intrinsic value. During my decade of managing money, I have been through a few cycles of under performance but this one has been more prolonged.

COMPANY AND COMPARATIVE INDEX RETURNS (AS AT 31 JANUARY 2020)

Source: Fidelity International.

KEY CONTRIBUTORS AND DETRACTORS OVER SIX MONTHS (AS AT 31 JANUARY 2020):

Source: Fidelity International

Looking at the biggest five detractors, three of them are stocks we did not have a major holding in and their stock prices increased significantly (they show up as detractors because they are a large part of the index). This will always be the case with my index agnostic style. Historically, these errors of omission have been offset by stocks that we own which generate better returns. As the market has been focused on growth stocks during the last two years, it has meant that the businesses we own have continued to get cheaper.

The two stocks that I do own in the top five detractors deserve an explanation:

• PNB Housing Finance: It is the third largest housing finance company in India. I have had a significant position in non-banking finance companies in India with PNB Housing Finance being one of them. It is a well-run company trading at around 4 times price–earnings ratio as the business is facing some issues due to a slowdown in the housing market in India. I continue to believe these issues will be transient, and we own a stake in a well-run company at a very attractive price.

• Power Grid Corporation of India: Power Grid is India’s largest electricity transmission utility and earns a regulated return on equity of close to 15%. The company has grown earnings for the last 20 years, and in my opinion, it will continue to grow in the next 10 years. The market has ignored the stock as a boring utility company. I like this growth company as it trades at 7 times price-earnings ratio and it continues to be our largest position in the portfolio.

THOUGHTS ON THE CORONAVIRUS (COVID-19)This is an unprecedented event for everyone, and investors are having to opine on a topic for which they are not trained. Even scientists and epidemiologists are not certain in terms of how things will unfold over the next few months. Having said that, undoubtedly the economic impact will be quite severe in the short-term on both demand and supply. Looking at current earnings forecasts is pointless given the fluidity of the situation. We can model scenarios but frankly the dispersion in outcomes makes them meaningless. There are a number of unknown factors. For example, as China emerges from its lockdown measures, could we have a second wave of infections? Factories cannot “work from home” so the risk of a resurgence in cases certainly exists. For the rest of the world, we do not know how long the lockdown must last and, once lockdowns are lifted, the degree of freedom of movement that will be allowed. It’s very difficult to forecast when the recovery will begin and whether it will be quick or long drawn.

My working assumptions are listed below. I would take these views with a pinch of salt as forecasting a pandemic is obviously beyond my core competence. I am by no means a trained epidemiologist.

• Short-term: The disease has now spread globally, and I would expect governments to be conservative in easing restrictions. I would expect a few waves or a continued (but controlled) flow of cases in most countries. This implies that the world economy will be on a hand brake until a medical remedy is found or nature takes a different course.

• Long-term: I think this will be contained – through natural causes or a vaccine. In two years’ time, it’s unlikely that there will be a significant impact on how the world functions. Some industries will change, some companies will fold; but on the whole the world should be able to return to normal.

• Economically, I expect earnings to get downgraded materially across most sectors. There will be disruption of both production and demand. Weak balance sheets should worsen, and we may see some bankruptcies of weak businesses.

• Unemployment rates will rise and will take time to bring back down. This will dampen the pace of recovery.

• Falling mortgage rates and low oil prices will boost consumer spending as we recover. However, overall I expect heightened volatility until such time as things start to improve. Markets will react (maybe overreact) to every data point as forecasting disease patterns is beyond our circle of competence and every data point gets extrapolated.

The new economic reality due to COVID-19 has had an impact on our portfolio as well. Businesses we own will be impacted either due to lack of demand and/or due to lockdown of their facilities. Most businesses that we own have low levels of debt (actually most have net cash on their balance sheets) and will be able to weather the storm. They should come out in a stronger position (as weaker competitors either shut shop or are unable to invest in the business) as the economy stabilises. However, there are a few businesses which cannot endure zero revenues. As a result, I have made the following changes to the portfolio:

• Sold out businesses which, even though they had a reasonable balance sheets, will not be able to endure the fixed cost burden during a lockdown. These were a small part of the portfolio (at about 1-2% of total assets).

• Increased the average quality of businesses that we own. There are businesses which I have known and admired for a long time, but which were historically not available at attractive prices. During this sell down, they came to prices which made sense to me and I have decided to invest in them. I have funded some of these by selling some existing holdings where I felt the stock market had not reflected the damage caused by COVID-19. I am taking this opportunity to increase the quality of the portfolio without sacrificing our value discipline.

INVESTMENT STRATEGY AND OUTLOOK 

The Company’s performance over the last nine months has been subdued and worse than the market returns. I am unable to explain market sentiment of many stocks – both in the portfolio and the market in general. There has been a dominance of growth companies, momentum strategy and stocks that fit a narrative (Technology, Bio-tech, Chinese Consumer, etc).

Stocks which are ignored or cheap, have become even more ignored. At times, the narrative of the stock market is different from the reality of business. This is true for value equities currently and cheap stocks have underperformed severely, with the valuation dispersion expanding further in the last few months. On a relative basis, the last time small cap value stocks were this cheap was in 1999!

My process of focusing on undiscovered stocks which have good underlying businesses, are well managed and available on cheap prices has been out of fashion and a headwind for performance. This is not an excuse but a reflection of how investment sentiment has worked over recent years.

Having said that, I have the utmost faith in my process. The most time-tested way of investing is to own good businesses, run by competent and honest managements and buy them at attractive prices. Avoiding bubbles and unsustainable valuations is key to long-term compounding, no matter how painful it is in the short-term.

Over time, the quality of business and valuations will matter.

The long-term value of any business will be driven by the cash flow it generates. Short-term market opinion on the value of a business should be meaningless except its impact on investor psychology (mine and yours) and unless we are forced to transact at these depressed valuations.

I am happy with the portfolio of companies we own – both the quality and price at which we own them. On average, we own vastly superior businesses versus the market and at significantly cheaper prices. This gives me confidence of robust returns in the future.

It has been a testing 9 months in terms of performance, but market fashions should not drive an investment philosophy. I look forward to what markets have to offer over the next three to five years and, in the meantime continue to work to find good businesses, run by good management teams and try to buy them at good prices.

INTERIM MANAGEMENT REPORT

COMPARATIVE INDEXAs mentioned in the Chairman’s Statement in the Annual Report for the year ended 31 July 2019, and effective from 1 February 2020, the Company has changed its Comparative Index from the MSCI All Countries Asia ex Japan Index (net) total return (in Sterling terms) to the MSCI All Countries Asia ex Japan Small Cap Index (net) total return (in Sterling terms). The Company is able to invest in companies of any size of capitalisation in order to achieve its objective of long-term capital growth principally from the stockmarkets of the Asian Region excluding Japan. The Portfolio Manager, Nitin Bajaj, looks to find investments in strong businesses which are run by trustworthy people and available to buy at a reasonable price. Therefore, the universe of investments available is not constrained by the size of a company or by its weighting in any comparative index. However, smaller companies are favoured by the Portfolio Manager as they provide an opportunity to find mispriced businesses, the “winners of tomorrow”, before they become well-known. Therefore, the Board considered that adopting a smaller companies Comparative Index was more appropriate. This change was approved by the shareholders at the Annual General Meeting held on 6 December 2019.

ASSOCIATION OF INVESTMENT COMPANIES (“AIC”) SECTOR CLASSIFICATIONWith the change in the Comparative Index, the Company is now part of the AIC’s Asia Pacific Smaller Companies sub-sector. The Board believes that this is the most appropriate peer group for the Company against which performance is measured.

BOARD CHANGES AND SUCCESSION PLANNINGIt has been agreed that Philip Smiley will retire from the Board with effect from 30 April 2020. The Board would like to thank him for his excellent contribution to the Company during his tenure and wish him well in the future. Tim Scholefield will succeed him as Senior Independent Director with effect from 1 May 2020.

MANAGEMENT FEEThe Company has had a variable management fee structure in place since 1 August 2018. It uses a Comparative Index against which the variable element of the management fee is calculated. The change to the Comparative Index from the MSCI All Countries Asia ex Japan Index (net) total return (in Sterling terms) to the MSCI All Countries Asia ex Japan Small Cap Index (net) total return (in Sterling terms) from 1 February 2020 has no impact to any fees accrued until the date of the change. However, any over or under performance will be measured against the new Comparative Index with effect from 1 February 2020 (the start of the second half of the Company’s reporting year). The performance of the portfolio is expected to correspond more closely to the new Comparative Index over time, which should lead to reduced volatility in the amount of the variable management fee.

BONUS ISSUE OF SUBSCRIPTION SHARESThe Company issued 3,081,455 ordinary shares of 25 pence on 2 December 2019 (effective date of 29 November 2019) in respect of shares arising on the exercise of the conversion rights attached to subscription shares. Following the final exercise date of 29 November 2019, the conversion rights attached to 8,021,575 subscription shares remained unexercised and as per paragraph 8(f) of Part 4 of the Prospectus published by the Company on 26 October 2016, a Final Subscription Trustee was appointed. The Final Subscription Trustee determined that the net proceeds of sale after deduction of all costs and expenses incurred by, and any fee payable to, the Final Subscription Trustee would not have exceeded the costs of exercising the outstanding 8,021,575 subscription share rights. Therefore, these outstanding subscription share rights lapsed on 13 December 2019 with nil value. The Final Subscription Trustee’s decision in this respect is final and binding on all holders of outstanding subscription shares.

SHARES ISSUEDThe Company’s shares have mostly traded at a premium in the six months to 31 January 2020 and the Board authorised the issue of 265,981 ordinary shares from the Company’s existing block listing facility during the reporting period. Issuing shares increases the size of the Company, making it more liquid and allowing for costs to be spread out over a larger asset base. Since then and as at the date of this report, no additional ordinary shares have been issued.

SHARE REPURCHASES AND TREASURY SHARESRepurchases of ordinary shares are made at the discretion of the Board and within guidelines set by it from time to time and in light of prevailing market conditions. Shares will only be repurchased when it results in an enhancement to the NAV of the ordinary shares for the remaining shareholders. In order to assist in managing the discount, the Board has shareholder approval to hold in Treasury any ordinary shares repurchased by the Company, rather than cancelling them. Any shares held in Treasury would only be re-issued at NAV per ordinary share or at a premium to NAV per ordinary share.

As the Company’s shares have mostly been trading at a premium in the six months to 31 January 2020, no ordinary shares were repurchased for cancellation or for holding in Treasury in the reporting period. However, since mid-February 2020, there has been an unprecedented level of turmoil in the world’s financial markets and the Company’s premium/discount has been extremely volatile in reaction to such market conditions. As a result, the Board took the decision to repurchase 41,294 shares into Treasury on 27 March 2020. This was the first buyback the Company has undertaken in nearly 6 years. At the time of writing, the Board is pleased to report that the discount to NAV per ordinary share has narrowed considerably and, at times, since 27 March 2020, the Company has been trading at a small premium.

PRINCIPAL RISKS AND UNCERTAINTIESThe Board, with the assistance of the Alternative Investment Fund Manager (FIL Investment Services (UK) Limited/the “Manager”), has developed a risk matrix which, as part of the risk management and internal controls process, identifies the key risks and uncertainties faced by the Company.

The Board considers that the principal risks and uncertainties faced by the Company continue to fall to the following categories: market, economic and political risk; investment performance risk; key person risk; discount control risk; gearing risk; derivatives risk; currency risk; and cybercrime risk. Other risks facing the Company include tax and regulatory risks; and operational (service providers) risks. Information on each of these risks can be found in the Strategic Report section of the Annual Report for the year ended 31 July 2019 and can be found on the Company’s pages of the Manager’s website at www.fidelityinvestmenttrusts.com.

These principal risks and uncertainties have not materially changed in the six months to 31 January 2020. However, since mid February 2020, the wide spread of the Coronavirus (COVID-19) has had a significant impact on markets and is clearly an additional uncertainty, the implications of which the Board is actively considering both for the short and longer-term.

Investors should be prepared for market fluctuations and remember that holding shares in the Company should be considered to be a long-term investment. These risks are somewhat mitigated by the investment trust structure which means no forced sales of any portfolio holdings will need to take place in order to deal with any redemptions. Therefore, investments can be held over a longer time horizon.

The Board has received confirmation from the Manager that in in light of the Coronavirus (COVID-19) outbreak, its contingency plans have so far operated effectively and remain under continual review. The Manager has, in line with Government rules, mandated work from home arrangements, implemented split team working for those whose work is deemed necessary to be carried out in the office, and imposed self-isolation arrangements on staff as appropriate. The Company’s other third-party service providers have also confirmed the implementation of similar measures to ensure business disruption is minimised to the extent possible.

TRANSACTIONS WITH THE MANAGER AND RELATED PARTIESThe Manager has delegated the Company’s portfolio management and the role of Company Secretary to FIL Investments International. Transactions with the Manager and related party transactions with the Directors are disclosed in Note 12.

GOING CONCERNThe Directors have considered the Company’s investment objective, risk management policies, liquidity risk, credit risk, capital management policies and procedures, the nature of its portfolio (being mainly securities which are readily realisable) and its expenditure and cash flow projections and have concluded that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing these Financial Statements. This conclusion also takes into account the Board’s assessment of the risks arising from the Coronavirus (COVID-19).

Continuation votes are held every five years and the next continuation vote will be put to shareholders at the Annual General Meeting in 2021.

BY ORDER OF THE BOARD.

FIL INVESTMENTS INTERNATIONAL

28 April 2020

DIRECTORS’ RESPONSIBILITY STATEMENT

The Disclosure and Transparency Rules (“DTR”) of the UK Listing Authority require the Directors to confirm their responsibilities in relation to the preparation and publication of the Interim Management Report and Financial Statements.

The Directors confirm to the best of their knowledge that:

a) the condensed set of Financial Statements contained within the Half-Yearly Report has been prepared in accordance with the Financial Reporting Council’s Standard, FRS 104: Interim Financial Reporting; and

b) the Interim Management Report, together with the Portfolio Manager’s Half-Yearly Review, includes a fair review of the information required by DTR 4.2.7R and 4.2.8R.

The Half-Yearly Report has not been audited or reviewed by the Company’s Independent Auditor.

The Half-Yearly Report was approved by the Board on 28 April 2020 and the above responsibility statement was signed on its behalf by Kate Bolsover, Chairman.

TWENTY LARGEST HOLDINGS AS AT 31 JANUARY 2020

The Gross Asset Exposures shown below measure exposure to market price movements as a result of owning shares and derivative instruments. The Balance Sheet Value is the actual value of the portfolio. Where a contract for difference (“CFD”) is held, the Balance Sheet Value reflects the profit or loss on the contract since it was opened and is based on how much the share price of the underlying share has moved.

1 Gross Asset Exposure is expressed as a percentage of Total Shareholders’ Funds.

2 Gross Asset Exposure comprises market exposure to investments of £272,307,000 plus market exposure to derivative instruments of £31,734,000.

3 Portfolio Fair Value comprises Investments of £272,307,000 plus derivative assets of £2,230,000 less derivative liabilities of £1,763,000 (per the Balance Sheet).

FINANCIAL STATEMENTS

INCOME STATEMENT FOR THE SIX MONTHS ENDED 31 JANUARY 2020

The Company does not have any other comprehensive income. Accordingly, the net return/(loss) on ordinary activities after taxation for the period is also the total comprehensive income for the period and no separate Statement of Comprehensive Income has been presented.

The total column of this statement represents the Income Statement of the Company. The revenue and capital columns are supplementary and presented for information purposes as recommended by the Statement of Recommended Practice issued by the AIC.

No operations were acquired or discontinued in the period and all items in the above statement derive from continuing operations.

STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 31 JANUARY 2020

BALANCE SHEET AS AT 31 JANUARY 2020

Company number 3183919

NOTES TO THE FINANCIAL STATEMENTS

1 PRINCIPAL ACTIVITYFidelity Asian Values PLC is an Investment Company incorporated in England and Wales with a premium listing on the London Stock Exchange. The Company’s registration number is 3183919, and its registered office is Beech Gate, Millfield Lane, Lower Kingswood, Tadworth, Surrey, KT20 6RP. The Company has been approved by HM Revenue & Customs as an Investment Trust under Section 1158 of the Corporation Tax Act 2010 and intends to conduct its affairs so as to continue to be approved.

2 PUBLICATION OF NON-STATUTORY ACCOUNTSThe Financial Statements in this half-yearly financial report have not been audited by the Company’s Independent Auditor and do not constitute statutory accounts as defined in section 434 of the Companies Act 2006 (the “Act”). The financial information for the year ended 31 July 2019 is extracted from the latest published Financial Statements of the Company. Those Financial Statements were delivered to the Registrar of Companies and included the Independent Auditor’s Report which was unqualified and did not contain a statement under either section 498(2) or 498(3) of the Act.

3 BASIS OF PREPARATIONThe Company prepares its Financial Statements on a going concern basis and in accordance with UK Generally Accepted Accounting Practice (“UK GAAP”) and FRS 102: The Financial Reporting Standard applicable in the UK and Republic of Ireland, issued by the Financial Reporting Council. The Financial Statements are also prepared in accordance with the Statement of Recommended Practice: Financial Statements of Investment Trust Companies and Venture Capital Trusts (“SORP”) issued by the Association of Investment Companies (“AIC”) in October 2019. FRS 104: Interim Financial Reporting has also been applied in preparing this condensed set of Financial Statements. The accounting policies followed are consistent with those disclosed in the Company’s Annual Report and Financial Statements for the year ended 31 July 2019.

4 INCOME

No special dividends have been recognised in capital during the period (six months ended 31 January 2019 and year ended 31 July 2019: £nil).

5 INVESTMENT MANAGEMENT FEES

FIL Investment Services (UK) Limited is the Company’s Alternative Investment Fund Manager and has delegated portfolio management to FIL Investments International (“FII”). Both companies are Fidelity group companies.

From the 1 August 2018, the Company adopted a new fee arrangement which reduced the base management fee from 0.90% on the first £200 million of gross assets and 0.85% on gross assets over £200 million to 0.70% of net assets per annum. In addition, with effect from 1 November 2018, there is +/- 0.20% variation fee based on the NAV per share performance relative to the Comparative Index. Fees are payable monthly in arrears and are calculated on a daily basis.

6 TAXATION ON RETURN/(LOSS) ON ORDINARY ACTIVITIES

7 RETURN/(LOSS) PER ORDINARY SHARE

The basic return/(loss) per ordinary share is based on the net return/(loss) on ordinary activities after taxation for the period divided by the weighted average number of ordinary shares in issue during the period.

There is no diluted return/(loss) per ordinary share for the current period as all the subscription shares were exercised or cancelled (see Note 10 for further details).

In the prior period, the diluted return/(loss) per ordinary share reflected the notional dilutive effect that would have occurred if the rights attached to subscription shares had been exercised and additional ordinary shares had been issued. The net return/(loss) on ordinary activities after taxation for the period used in the diluted calculation was the same as those for the basic return/ (loss) above. These returns/(losses) were divided by the notional weighted average number of ordinary shares in issue during the period – 31 January 2019: 69,592,203 and 31 July 2019: 70,964,574. The number of shares reflected the additional number of ordinary shares that could have been purchased at the average ordinary share price for the period with the proceeds from the excess of the subscription share rights exercise price over the average ordinary share price.

8 DIVIDENDS PAID TO SHAREHOLDERS

No dividend has been declared in respect of the six months ended 31 January 2020.

9 FAIR VALUE HIERARCHYThe Company is required to disclose the fair value hierarchy that classifies its financial instruments measured at fair value at one of three levels, according to the relative reliability of the inputs used to estimate the fair values.

Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair value measurement of the relevant asset. The table below sets out the Company’s fair value hierarchy:

10 SHARE CAPITAL

A bonus issue of subscription shares to ordinary shareholders on the basis of one subscription share for every five ordinary shares held took place on 5 December 2016. Each subscription share gave the holder the right, but not the obligation, to subscribe for one ordinary share upon payment of the subscription price. The subscription price was based on the published unaudited NAV per ordinary share at 2 December 2016, plus a premium (rounded to the nearest quarter penny) depending upon the year in which the right was exercised. The subscription share rights could have been exercised annually in the 25 business days prior to the relevant subscription date (on which the exercise would take effect). The subscription dates, subscription prices and premiums were as follows:

After the final exercise date of 29 November 2019, the Company appointed a trustee to exercise any rights remaining that were not exercised by shareholders, providing that by doing so a profit could be realised. To realise a profit, the sale proceeds from selling the resulting ordinary shares in the market needed to be in excess of the 392.75 pence per share price of exercising the rights, plus any related expenses and fees. On 13 December 2019, the Board announced that the Trustee had not exercised any of the unexercised subscription rights of the 8,021,575 outstanding subscription shares. The Trustee determined that the net proceeds of the sale, after deduction of all costs and expenses, would not have exceeded the costs of exercising the subscription share rights. Therefore, all subscription share rights for the outstanding subscription shares lapsed with nil value.

During the period, the Company issued 3,081,455 ordinary shares (year ended 31 July 2019 and six months ended 31 January 2019: 1,213,003 shares) on the exercise of rights attached to subscription shares. The subscription share price of 392.75 pence per ordinary share issued represented a premium of 367.75 pence per share over the 25 pence nominal value of each share. The total premium received in the period on the issue of ordinary shares of £11,332,000 (year ended 31 July 2019 and six months ended 31 January 2019: £4,327,000) was credited to the share premium account.

The Company issued 265,981 new ordinary shares during the period (year ended 31 July 2019: 2,351,048 shares and six months ended 31 January 2019: nil). The total premium received in the period on the issue of new ordinary shares of £1,096,000 (year ended 31 July 2019: £9,430,000 and six months ended 31 January 2019: £nil) was credited to the share premium account.

11 NET ASSET VALUE PER ORDINARY SHAREThe net asset value per ordinary share is based on net assets of £286,945,000 (31 July 2019: £322,999,000 and 31 January 2019: £280,582,000) and on 75,580,889 (31 July 2019: 72,233,453 and 31 January 2019: 69,882,405) ordinary shares, being the number of ordinary shares of 25 pence each held outside of Treasury at the end of the period.

There is no diluted net asset value per ordinary share as all the subscription shares were exercised or cancelled during the period (see Note 10 for further details).

The diluted net asset value per ordinary share at 31 January 2019 and 31 July 2019 reflect the potential dilution in the net asset value per ordinary share if the rights of the 11,103,030 subscription shares in issue had been exercised at the next exercise date price of 392.75 pence per share. The basis of the calculation is in accordance with the guidelines laid down by the AIC.

12 TRANSACTIONS WITH THE MANAGER AND RELATED PARTIESFIL Investment Services (UK) Limited is the Company’s Alternative Investment Fund Manager and has delegated portfolio management and the role of Company Secretary to FIL Investments International (“FII”). Both companies are Fidelity group companies.

Details of the fee arrangements are given in Note 5 above. During the period, management fees of £1,008,000 (six months ended 31 January 2019: £1,079,000 and year ended 31 July 2019: £2,262,000) and secretarial and administration fees of £38,000 (six months ended 31 January 2019: £38,000 and year ended 31 July 2019: £75,000) were payable to FII. At the Balance Sheet date, management fees of £130,000 (31 January 2019: £202,000 and 31 July 2019: £217,000) and secretarial and administration fees of £6,000 (31 January 2019: £6,000 and 31 July 2019: £6,000) were accrued and included in other creditors. FII also provides the Company with marketing services. The total amount payable for these services during the period was £64,000 (six months ended 31 January 2019: £64,000 and year ended 31 July 2019: £146,000). At the Balance Sheet date, marketing services of £24,000 (31 January 2019: £8,000 and 31 July 2019: £20,000) were accrued and included in other creditors.

As at 31 January 2020, the Board consisted of six non-executive Directors (as shown in the Directory of the Half-Yearly Report), all of whom are considered to be independent by the Board. None of the Directors have a service contract with the Company. The Chairman receives an annual fee of £36,000, the Audit Committee Chairman an annual fee of £30,000 and each other Director an annual fee of £26,000. As at the date of this report, the following members of the Board held shares in the Company: Kate Bolsover 15,452 ordinary shares, Clare Brady 2,500 ordinary shares, Timothy Scholefield 12,000 ordinary shares, Philip Smiley 2,500 ordinary shares, Grahame Stott 25,000 ordinary shares and Michael Warren, 10,000 ordinary shares.

The financial information contained in this Half-Yearly Results Announcement does not constitute statutory accounts as defined in section 435 of the Companies Act 2006. The financial information for the six months ended 31 January 2020 and 31 January 2019 has not been audited or reviewed by the Company’s Independent Auditor.

The information for the year ended 31 July 2019 has been extracted from the latest published audited financial statements, which have been filed with the Registrar of Companies, unless otherwise stated. The report of the Auditor on those financial statements contained no qualification or statement under sections 498(2) or (3) of the Companies Act 2006.

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

A copy of the Half-Yearly Report will shortly be submitted to the National Storage Mechanism and will be available for inspection at www.morningstar.co.uk/uk/NSM

The Half-Yearly Report will also be available on the Company's website at www.fidelity.co.uk/asianvalues where up to date information on the Company, including daily NAV and share prices, factsheets and other information can also be found.

Contacts

For further information, please contact:

Natalia de Sousa - Company Secretary

01737 837846