NOT FOR DISTRIBUTION, DIRECTLY OR
INDIRECTLY, IN OR INTO THE UNITED
STATES, CANADA,
AUSTRALIA OR JAPAN OR ANY OTHER JURISDICTION WHERE TO DO SO
WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH
JURISDICTION
Ashmore Global
Opportunities Limited (“AGOL”, or the “Company”)
a Guernsey incorporated and registered limited liability
closed-ended investment company with a Premium Listing of its US
Dollar and Sterling share classes on the Official List.
LEI 549300D6OJOCNPBJ0R33.
Interim
Results
For the period ended 30 June 2018
(Classified
Regulated Information, under DTR 6 Annex 1 section 1.2)
The financial information set out in this announcement does not
constitute the Company's statutory accounts for the six months
ended 30 June 2018. All figures are
based on the unaudited financial statements for the six months
ended 30 June 2018.
The financial information for the six months ended 30 June 2018 is derived from the financial
statements delivered to the UK Listing Authority.
The announcement is prepared on the same basis as will be set
out in the interim accounts.
The Interim Report and Unaudited Condensed Interim Financial
Statements for the six months ended 30 June
2018 will be available on the Company website:
www.agol.com.
Share Price Information
|
|
30 June
2018 |
|
31
December 2017 |
|
|
|
|
|
Total Net Assets |
|
US$38,493,380 |
|
US$62,515,991 |
|
|
|
|
|
Net Asset Value per
Share |
|
|
|
|
US$ shares |
|
US$6.30 |
|
US$6.08 |
£ shares |
|
£5.95 |
|
£5.82 |
|
|
|
|
|
Closing-Trade Share
Price |
|
|
|
|
US$ shares |
|
US$4.79 |
|
US$3.80 |
£ shares |
|
£4.88 |
|
£3.90 |
|
|
|
|
|
Discount to Net Asset
Value |
|
|
|
|
US$ shares |
|
(23.97)% |
|
(37.50)% |
£ shares |
|
(17.98)% |
|
(32.99)% |
Chairman’s Statement
As at 30 June 2018, the Net Asset
Value (“NAV”) of Ashmore Global Opportunities Limited (the
“Company” or “AGOL”) was US$38.5m
compared to US$62.5m at 31 December 2017. The NAVs per share were
US$6.30 and £5.95 as at 30 June 2018, up from US$6.08 and £5.82 respectively at the end of
2017. The share prices stood at US$4.79 and £4.88 as at 30
June 2018.
The main contributor to performance was a mark-up in the value
of Microvast. Further details on the underlying exposures of the
Company are given in the Investment Manager’s Report.
There were significant realisations during the reporting period:
Bedfordbury and Largo were sold completely, and one of the two
remaining assets in the Everbright Ashmore China Real Estate Fund
was sold as well. The Board approved a capital distribution to
shareholders of US$25.5m on
21 June 2018, with a payment date of
10 July 2018. One of the underlying
holdings of the Company, ZIM Laboratories in India, was re-listed on the Bombay Stock
Exchange, thus providing another possible exit route for this
holding.
The Investment Manager is working towards the sale of the
remaining assets, with a particular focus on the two largest
exposures of the Company, namely Microvast and AEI. Your Board
receives regular updates on progress with these and other
sales.
Below is an overview of the distributions made since
February 2013 when Shareholders voted
to wind up the Company in an orderly fashion.
|
Quarterly
Distributions |
|
|
|
|
|
|
|
|
Quarter End Date |
Distributions |
% of 31
December 2012 |
% of 31
December 2012 |
|
|
(US$) |
NAV |
Market
Capitalisation |
|
31 March 2013 |
92,500,000 |
19% |
28% |
|
30 June 2013 |
13,000,000 |
3% |
4% |
|
30 September 2013 |
26,000,000 |
5% |
8% |
|
31 December 2013 |
36,900,000 |
8% |
11% |
|
30 June 2014 |
7,250,000 |
2% |
2% |
|
30 September 2014 |
21,500,000 |
5% |
7% |
|
31 December 2014 |
40,500,000 |
8% |
12% |
|
31 March 2015 |
19,500,000 |
4% |
6% |
|
30 June 2015 |
27,250,000 |
6% |
8% |
|
31 December 2015 |
16,200,000 |
3% |
5% |
|
31 March 2016 |
2,500,000 |
0% |
1% |
|
30 September 2017 |
3,000,000 |
1% |
1% |
|
30 June 2018 |
25,500,000 |
5% |
8% |
|
Total |
331,600,000 |
69% |
101% |
|
|
|
|
|
The Board continues to be in active dialogue with the Investment
Manager on completion of the asset sales, and subsequent winding up
of the Company. As further sales are realised, the Board will
review again the benefits and costs of the listing of the Company
on the London Stock Exchange.
I would like to thank everyone involved with AGOL for their hard
work.
Richard Hotchkis
24 August 2018
Investment Manager’s Report
Performance
As at 30 June 2018, the NAVs per
share of the US$ and £ classes stood at US$6.30 and £5.95 respectively, representing
returns of 3.62% and 2.23% over the last six months.
Portfolio Review
Strong operating performance, in particular by Microvast, and
realisations slightly in excess of book values led to positive
contributions to the NAV of the Company.
There were full realisations of the investments in Bedfordbury
and Largo during Q1 2018. In addition, one of the two remaining
assets in the Everbright Ashmore China Real Estate Fund was also
sold. The proceeds of these sales were distributed to shareholders
just after the reporting period, on 10 July
2018. With the sale of Bedfordbury, we also withdrew the
pending arbitration case.
The two largest investee company exposures, Microvast and AEI,
now account for around 42% of AGOL’s NAV as at 30 June 2018 (or around 70% of the portfolio
excluding cash).
Microvast gross margins have fallen due to the lower prices
under the new e-bus subsidy policy. The company managed a small
profit of US$4.7m which, considering
the manufacturing changes it had to make to meet new subsidy
requirements was a good result. A full exit of this asset will
probably be through an IPO in 2019 or 2020.
Jaguar, the power plant in Guatemala owned by AEI, is operating at
slightly above its listed capacity. The appeal by China Machine New
Energy Corporation (CMNC) against the arbitration award took place
before the Singapore High Court in November
2017. The court gave judgement in April 2018 and CMNC lost their appeal on all
counts. CMNC have further appealed to the Court of Appeal in
Singapore. This will be the last
stage of this legal appeal process. The hearing before the Court of
Appeal will take place early next year. We expect to realise this
asset after this last stage of the legal process, in 2019. Once
Jaguar has been sold, the intention is to wind up AEI.
Elsewhere, ZIM Laboratories was re-listed on the Bombay Stock
Exchange at a higher price than our book value. Current trading
liquidity is limited, and since listing, the Indian stock market
fell in value so that the price for ZIM Laboratories, at the time
of writing, is below the listing price.
Further details on the smaller holdings in the Company are given
later in this Investment Manager’s report.
Outlook
As described above, the focus remains on realising AGOL's
remaining investments in an orderly manner, and we expect to make
further progress on this. The general sentiment towards Emerging
Markets (EM) has been improving, in spite of some recent market
volatility, thus providing a more positive backdrop to
realisations. Nevertheless, realisations are very much influenced
by the attraction and circumstances of each individual asset.
Details on the Top 5 Underlying
Holdings (on a look through basis)
The table below shows the top 5 underlying investments as at
30 June 2018 excluding the cash
balance (cash was 39.88% as at 30 June
2018).
Investment
Name |
Holding |
|
|
Country |
Business
Description |
Microvast |
25.36% |
|
|
China |
Electric battery and
battery systems supplier |
AEI |
16.55% |
|
|
Guatemala |
Power generation in
Latin America |
Kulon |
7.02% |
|
|
Russia |
Real estate
development company |
ZIM Laboratories
Ltd |
4.94% |
|
|
India |
Pharmaceutical
research and manufacturing |
Numero Uno |
3.33% |
|
|
India |
Branded apparel
manufacturers and retailers |
The tables below show the country and industry allocations of
underlying investments over 1% at the end of June 2018:
Country |
% of
NAV |
|
Industry |
% of
NAV |
China |
26.65% |
|
Electrical Components
and Equipment |
25.36% |
Guatemala |
16.55% |
|
Electrical |
16.55% |
India |
8.82% |
|
Real Estate |
8.31% |
Russia |
7.02% |
|
Pharmaceuticals |
4.94% |
Nigeria |
1.09% |
|
Retail |
3.33% |
These tables form an integral part of the financial
statements.
Details on a Selection of the
Underlying Holdings
Microvast
Industry: Technology/Clean-tech
Country: China
Website: www.microvast.com
Company Status: Private
Investment Risk: Equity
Operational update
- Microvast continues to supply
batteries for pure e-bus and plug-in hybrid electric vehicles
(PHEV) to a large number of Chinese original equipment
manufacturers (OEMs), with these being deployed in over 30 cities
in China. Follow-on orders
continue to be received for the European bus market
- Microvast’s gross margins have fallen
due to lower prices under the new e-bus subsidy policy. Full year
2017 revenues were US$203m at a c.
21% gross margin. The company managed a small profit of
US$4.7m, which considering the
manufacturing changes it had to make to meet new subsidy
requirements, was a good result. There will be further margin
pressure in 2018 as a result of the Chinese Government introducing
further e-bus subsidy changes
- Production capacity has been
successfully increased to 3.5GWh per annum. Any further increases,
particularly for e-cars, will require external financing
- Microvast is working on Lithium-ion
battery (Li-B) systems for passenger vehicles with some of the
leading Chinese auto OEMs. A leading European car company is also
in testing
2018 operational
strategy/priorities
- Managing growth by adding new
facilities, increasing production capacity and hiring/training new
employees
- Building large scale production of
Li-B systems for passenger vehicles, growing the international
business and innovating battery safety and energy density
- Funding the capex programme and
IPO/Exit planning
- Meeting short order timeframes from
Chinese bus OEMs and ensuring customers can claim Chinese New
Energy Vehicle (NEV) subsidies
Key risks
- Overcapacity in both Chinese and
global battery companies
- Warranty claims arising from defective
cells or modules
- Unfavourable changes to the Chinese
government’s New Energy Vehicle policy
Exit strategy
- Block sale pre or post IPO
AEI
Industry: Power generation
Country: Guatemala
Website: www.aeienergy.com
Company Status: Private
Investment Risk: Equity
Operational update
- The only operating entity remaining in
AEI is Jaguar, in Guatemala, which
is currently being marketed for sale
- The appeal by China Machine New Energy
Corporation (CMNC) against the arbitration award took place before
the Singapore High Court in November
2017. The court gave judgement in April 2018 and CMNC lost their appeal on all
counts. CMNC have further appealed to the Court of Appeal in
Singapore. This will be the last
stage of this legal appeal process. The hearing before the Court of
Appeal will take place early next year
Key risks
- CMNC arbitration appeal
Exit strategy
- Sale process ongoing with a trade sale
the most likely route
- Wind up of AEI post the Jaguar
sale
Kulon
Industry: Real estate
Country: Russia
Website: n/a
Company Status: Private
Investment Risk: Equity
Operational update
- The Office and Warehouse spaces are
fully leased. The lease with the anchor tenant has been renewed for
another seven years, and we have taken on additional tenants this
year. The Moscow market remains
competitive and rents are under pressure
- The Russian Central bank has kept a
firm lid on inflation, keeping it to a little over 2%. This in turn
has allowed the reduction in the key rate from 10% to 7.25%, which
is supportive for rouble-denominated fixed income assets such as
this
Key risks
- Pressure on rental yields
Exit strategy
- Trade sale by selling the shares in
the holding company
- The Russian economy is recovering from
a recent recession, and the sale of the asset is actively being
pursued
ZIM Laboratories
Industry: Pharmaceuticals
Country: India
Website: zimlab.in
Company Status: Private
Investment Risk: Equity
Operational update and priorities
- The company continues to perform well
in its existing pharmaceutical lines
- It is seeing increasing registrations
and further penetration with its Oral Thin Film (OTF) products
Exit strategy
- The company is now listed on the BSE,
but liquidity is low
Numero Uno
Industry: Retail
Country: India
Website: www.numerounojeanswear.com
Company Status: Private
Investment Risk: Equity
Operational update and priorities
- The introduction of the GST in
India caused significant upheaval
for the company and its distributors as operational issues with
invoicing caused a loss of sales. This was a general problem, not
specific to Numero Uno
- The company is progressing its foray
into e-commerce
- Margins are starting to improve and
further improvements are targeted in the next two years
Key risks
- Cash payments remain important to the
company and any new tightening of liquidity conditions could impact
revenues
- E-commerce strategy and competition
will be important to realise the margin improvement
Exit strategy
- Previous exit discussions ceased as
the temporary drop in revenues as described above affected
valuations of the company
- The company will seek to achieve a few
quarters of new growth post the completion of the de-monetisation
policy and the introduction of the GST, in order to drive up the
value of the company, before re-embarking on the sales process
GZI
Industry: Aluminium can manufacturing
Country: Nigeria
Website: www.gzican.com
Company Status: Private
Investment Risk: Equity
Operational update
- The business experienced a strong
rebound in 2017 as the macro picture in Nigeria improved
- The market has stabilised in terms of
both volumes and price
- Going forward the outlook is
cautiously optimistic
2018 operational
strategy/priorities
- Establish a plant in South Africa
- Manage foreign exchange
exposures/requirements
- Export cans in the region to expand
sales and earn foreign currency
Key risks
- Continued slowdown in the African
beverages markets
- Clients opting for cheaper
alternatives
- Access to US$ / local currency
depreciation
- Recruitment / talent sourcing
Exit strategy and timing
- 2020 exit through IPO or strategic
sale. May be brought forward
Ashmore Investment Advisors
Limited
Investment Manager
24 August 2018
Board Members
As at 30 June 2018, the Board
consisted of four non-executive Directors. The Directors are
responsible for the determination of the Company’s investment
policy and have overall responsibility for its activities. As
required by the Association of Investment Companies Code on
Corporate Governance (the “AIC Code”), the majority of the Board of
Directors are independent of the Investment Manager. In preparing
this interim report, the independence of each Director has been
considered.
Richard Hotchkis,
Independent Chairman, (French resident) appointed
18 April 2011
Richard Hotchkis has over 40
years of investment experience. Until 2006, he was an investment
manager at the Co-operative Insurance Society, where he started his
career in 1976. He has a breadth of investment experience in both
UK and overseas equities, including in emerging markets, and in
particular, investment companies and other closed-ended funds,
offshore funds, hedge funds and private equity funds.
Steve Hicks, Non-Independent
Director (connected to the Investment Manager), (UK resident)
appointed 16 January 2014
Steve Hicks, who is a qualified
UK lawyer, has held a number of legal and compliance roles over a
period of more than 25 years. From June
2010 until January 2014 he was
the Ashmore Group Head of Compliance. Prior thereto he was
Director, Group Compliance at the London listed private equity company 3i Group
plc.
Nigel de la Rue, Independent
Director, (Guernsey resident) appointed 16 October 2007
Nigel de la Rue graduated in 1978
from Pembroke College,
Cambridge with a degree in Social
and Political Sciences. He is qualified as an Associate of the
Chartered Institute of Bankers, as a Member of the Society of Trust
and Estate Practitioners (“STEP”) and as a Member of the Institute
of Directors. He was employed for 23 years by Baring Asset
Management’s Financial Services Division, where he was responsible
for the group’s Fiduciary Division and sat on the Executive
Committee. He left Baring in December
2005, one year after that Division was acquired by Northern
Trust. He has served on the Guernsey Committees of the Chartered
Institute of Bankers and STEP, and on the Guernsey Association of
Trustees, and currently holds a number of directorships in the
financial services sector.
Christopher Legge, Independent
Director, (Guernsey resident) appointed 27 August 2010
Christopher Legge has over 25
years’ experience in financial services. He qualified as
a Chartered Accountant in London in 1980 and spent the majority of
his career based in Guernsey with Ernst & Young,
including being the Senior Partner of Ernst & Young in the
Channel Islands. Christopher retired from Ernst
& Young in 2003 and currently holds a number of
directorships in the financial sector. He was appointed to the
Board of Sherborne Investors (Guernsey) C Limited on 25 May 2017. He was also appointed as a
non-executive director of NB Distressed Debt Investment Fund
Limited with effect from 12 April
2018.
Disclosure of Directorships in Public
Companies Listed on Recognised Stock Exchanges
The following summarises the Directors’ directorships in other
public companies:
Company Name |
Exchange |
|
|
Richard Hotchkis |
Nil |
|
|
Steve Hicks |
Nil |
|
|
Nigel de la Rue |
Nil |
|
|
Christopher Legge |
|
John Laing
Environmental Assets Group Limited |
London |
NB
Distressed Debt Investment Fund Limited (from 12 April 2018) |
London |
Sherborne
Investors (Guernsey) B Limited |
London |
Sherborne
Investors (Guernsey) C Limited |
London |
Third Point
Offshore Investors Limited |
London |
TwentyFour
Select Monthly Income Fund Limited |
London |
Directors’ Responsibility
Statement
The Directors are responsible for preparing the Interim Report
and Unaudited Condensed Interim Financial Statements, which have
not been audited by an independent auditor, and confirm that to the
best of their knowledge:
? the condensed set of financial statements in the interim
financial report has been prepared in accordance with IAS 34
Interim Financial Reporting; and
? the interim financial report includes a fair view of the
information required by:
(a) DTR 4.2.7R of the Disclosure and
Transparency Rules, being an indication of the important events
that have occurred during the first six months of the financial
year and their impact on the condensed set of interim financial
statements; and a description of the principal risks and
uncertainties for the remaining six months of the year ending
31 December 2018; and
(b) DTR 4.2.8R of the Disclosure and
Transparency Rules, being related party transactions that have
taken place in the first six months of the current financial year
and that have materially affected the financial position or
performance of the entity during that period, and any changes in
the related party transactions described in the last annual report
that could do so.
Signed on behalf of the Board of Directors on 24 August 2018
Richard Hotchkis |
Christopher Legge |
Chairman |
Chairman of the Audit Committee |
Unaudited Condensed Statement of
Financial Position
As at 30 June 2018
|
|
30
June 2018 |
|
31
December 2017 |
|
Note |
US$ |
|
US$ |
Assets |
|
|
|
|
Cash and cash
equivalents |
|
27,010,092 |
|
673,736 |
Other financial
assets |
5a |
145 |
|
12,928 |
Financial assets at
fair value through profit or loss |
3 |
38,693,602 |
|
62,924,603 |
Total
assets |
|
65,703,839 |
|
63,611,267 |
|
|
|
|
|
Equity |
|
|
|
|
Capital and
reserves attributable to equity holders
of the Company |
|
|
|
|
Special reserve |
|
381,934,791 |
|
407,583,513 |
Retained earnings |
|
(343,441,411) |
|
(345,067,522) |
Total
equity |
|
38,493,380 |
|
62,515,991 |
|
|
|
|
|
Liabilities |
|
|
|
|
Current
liabilities |
|
|
|
|
Distribution
payable |
7 |
25,648,722 |
* |
- |
Other financial
liabilities |
5b |
1,022,023 |
|
1,095,276 |
Financial liabilities
at fair value through profit or loss |
3 |
539,714 |
|
- |
Total
liabilities |
|
27,210,459 |
|
1,095,276 |
Total equity and
liabilities |
|
65,703,839 |
|
63,611,267 |
|
|
|
|
|
Net asset
values |
|
|
|
|
Net assets per US$
share |
8 |
US$6.30 |
|
US$6.08 |
Net assets per £
share |
8 |
£5.95 |
|
£5.82 |
* The distribution payable differs by US$148,722 to the amount declared, because during
the distribution process, shareholders of the £ share class were
overpaid by US$148,589 (the
US$133 difference is FX). The Company
had to compulsory redeem shares from the £ shareholders to the
value of the amount by which they were overpaid, and these proceeds
were then distributed as cash to the US$ shareholders who were
underpaid. This extra compulsory redemption of US$148,589 is reflected in the £ shares in issue
figure on page 29.
The unaudited condensed interim financial statements on pages 14
to 32 were approved by the Board of Directors on 24 August 2018, and were signed on its behalf
by:
Richard
Hotchkis
Christopher Legge
Chairman
Chairman of the Audit Committee
Unaudited Condensed Statement of
Comprehensive Income
For the six months ended 30 June
2018
|
|
Six
months ended
30 June 2018 |
|
Six
months ended
30 June 2017 |
|
Note |
US$ |
|
US$ |
|
|
|
|
|
Interest income |
|
16,955 |
|
1,778 |
Dividend income |
|
19,792,062 |
|
1,110 |
Net foreign currency
gain/(loss) |
|
55,855 |
|
(1,710) |
Other net changes in
fair value on financial assets and liabilities at fair value
through profit or loss |
4 |
(18,132,180) |
|
8,574,961 |
Total net
gain |
|
1,732,692 |
|
8,576,139 |
|
|
|
|
|
Expenses |
|
|
|
|
Investment management
fees |
|
(32,806) |
|
(31,301) |
Incentive fees |
|
82,756 |
* |
(150,949) |
Directors’
remuneration |
|
(58,939) |
|
(35,307) |
Fund administration
fees |
|
(5,887) |
|
(6,117) |
Custody fees |
|
(3,306) |
|
(3,349) |
Other operating
expenses |
|
(88,399) |
|
(78,189) |
Total operating
expenses |
|
(106,581) |
|
(305,212) |
|
|
|
|
|
Gain for the
period |
|
1,626,111 |
|
8,270,927 |
|
|
|
|
|
Total comprehensive
gain for the period |
|
1,626,111 |
|
8,270,927 |
|
|
|
|
|
Earnings per
share |
|
|
|
|
Basic and diluted
gain per US$ share |
9 |
US$0.20 |
|
US$0.72 |
Basic and diluted
gain per £ share |
9 |
US$0.06 |
|
US$1.13 |
* Incentive fees are positive due to a reversal of prior year
accruals.
All items derive from continuing activities.
Unaudited Condensed Statement of
Changes in Equity
For the six months ended 30 June
2018
|
|
Special |
|
Retained |
|
|
|
|
reserve |
|
earnings |
|
Total |
|
Note |
US$ |
|
US$ |
|
US$ |
|
|
|
|
|
|
|
Total equity as at
1 January 2018 |
|
407,583,513 |
|
(345,067,522) |
|
62,515,991 |
Total comprehensive
gain for the period |
|
- |
|
1,626,111 |
|
1,626,111 |
Capital
distribution |
7 |
(25,648,722) |
* |
- |
|
(25,648,722) |
Total equity as at
30 June 2018 |
|
381,934,791 |
|
(343,441,411) |
|
38,493,380 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity as at
1 January 2017 |
|
410,583,457 |
|
(356,978,544) |
|
53,604,913 |
Total comprehensive
gain for the period |
|
- |
|
8,270,927 |
|
8,270,927 |
Total equity as at
30 June 2017 |
|
410,583,457 |
|
(348,707,617) |
|
61,875,840 |
* The distribution payable differs by US$148,722 to the amount declared, because during
the distribution process, shareholders of the £ share class were
overpaid by US$148,589 (the
US$133 difference is FX). The Company
had to compulsory redeem shares from the £ shareholders to the
value of the amount by which they were overpaid, and these proceeds
were then distributed as cash to the US$ shareholders who were
underpaid. This extra compulsory redemption of US$148,589 is reflected in the £ shares in issue
figure on page 29.
Unaudited Condensed Statement of Cash
Flows
For the six months ended 30 June
2018
|
Six
months ended
30 June 2018 |
|
Six
months ended
30 June 2017 |
|
US$ |
|
US$ |
Cash flows from
operating activities |
|
|
|
Net bank interest
received |
16,955 |
|
1,778 |
Dividends
received |
19,792,055 |
|
1,110 |
Net operating expenses
charged |
(167,051) |
|
(182,184) |
Net cash from/(used
in) operating activities |
19,641,959 |
|
(179,296) |
|
|
|
|
Cash flows from
investment activities |
|
|
|
Sales of
investments |
6,137,712 |
|
- |
Net cash flows on
derivative instruments and foreign exchange |
556,685 |
|
587,291 |
Net cash from
investment activities |
6,694,397 |
|
587,291 |
|
|
|
|
Net increase in
cash and cash equivalents |
26,336,356 |
|
407,995 |
|
|
|
|
Reconciliation of net cash flows to movement in cash and cash
equivalents |
|
|
|
|
|
|
Cash and cash
equivalents at the beginning of the period |
673,736 |
|
956,920 |
Net increase in cash
and cash equivalents |
26,336,356 |
|
407,995 |
Cash and cash
equivalents at the end of the period |
27,010,092 |
|
1,364,915 |
Note to the Unaudited Condensed
Interim Financial Statements - Schedule of Investments
As at 30 June 2018
Description of
investments |
Fair
value
US$ |
|
%
of
net assets |
|
|
|
|
Ashmore Global Special
Situations Fund 4 LP |
15,108,765 |
|
39.25 |
AEI Inc - Equity |
6,423,327 |
|
16.69 |
AA Development Capital
India Fund 1, LLC |
5,775,792 |
|
15.00 |
Ashmore Global Special
Situations Fund 5 LP |
5,347,072 |
|
13.89 |
VTBC Ashmore Real
Estate Partners 1 LP |
3,901,005 |
|
10.13 |
Everbright Ashmore
China Real Estate Fund LP |
775,904 |
|
2.02 |
Ashmore Global Special
Situations Fund 3 LP |
638,294 |
|
1.66 |
Ashmore Global Special
Situations Fund 2 Limited |
427,965 |
|
1.11 |
Ashmore Asian Special
Opportunities Fund Limited |
190,479 |
|
0.50 |
Ashmore Asian Recovery
Fund |
104,055 |
|
0.27 |
Ashmore SICAV 2 Global
Liquidity US$ Fund |
944 |
|
- |
|
|
|
|
Total investments
at fair value |
38,693,602 |
|
100.52 |
|
|
|
|
Net other current
liabilities |
(200,222) |
|
(0.52) |
|
|
|
|
Total net
assets |
38,493,380 |
|
100.00 |
Notes to the Unaudited Condensed
Interim Financial Statements
1. Basis of
Preparation
a) Statement of Compliance
These unaudited condensed interim financial statements have been
prepared in accordance with IAS 34 Interim Financial Reporting and
on a going concern basis, despite the managed wind-down of the
Company approved by the shareholders on 13
March 2013. The Directors have examined significant areas of
possible financial going concern risk and are satisfied that no
material exposures exist. The Directors consider that the Company
has adequate resources to continue in operational existence for the
foreseeable future and believe that it is appropriate to adopt the
going concern basis despite the managed wind-down of the Company
over the next few years.
These unaudited condensed interim financial statements do not
include as much information as the annual financial statements, and
should be read in conjunction with the audited financial statements
of the Company for the year ended 31
December 2017. Selected explanatory notes are included to
explain events and transactions that are relevant to understanding
the changes in financial position and performance of the Company
since the last annual financial statements.
These unaudited condensed interim financial statements were
authorised for issue by the Board of Directors on
24 August 2018.
The Directors have assessed the impact of the AIFMD on the
financial statements of the Company and have concluded that the
Company is exempt from following Chapter V, Section 1, Articles 103
– 111 of the European Commission’s Level 2 Delegated Regulation on
the basis of the operations of the Company: it being (i) a Non-EEA
AIF, and (ii) not being marketed in the European Union, as defined
by the Directive.
b) Judgements and Estimates
Preparing the unaudited condensed interim financial statements
requires judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of
assets, liabilities, income and expenses. Actual results may differ
from these estimates. The significant judgements made in applying
the Company’s accounting policies, and the key sources of
estimation uncertainty, were the same as those that applied to the
audited financial statements of the Company for the year ended
31 December 2017.
2. Summary of Significant
Accounting Policies
The Board has concluded that at present the managed wind-down of
the Company has no significant impact on the valuation of the
Company’s investments.
The accounting policies applied in these unaudited condensed
interim financial statements are the same as those applied in the
Company’s audited financial statements for the year ended
31 December 2017. As disclosed in
those Annual Financial Statements, IFRS 9,‘Financial Instruments’
was applicable for financial reporting periods starting
1 January 2018. As such, these
standards have been adopted by the Company, but have not materially
affected the Company. There were no other new standards,
interpretations or amendments to standards issued and effective for
the period which materially impacted the Company.
3. Financial Assets
and Liabilities at Fair Value through Profit or Loss
|
|
|
|
|
|
30 June
2018 |
31
December 2017 |
|
|
|
|
|
|
US$ |
US$ |
Financial
assets held for trading: |
|
|
|
-
Derivative financial assets |
|
- |
521,399 |
Total
financial assets held for trading |
|
- |
521,399 |
|
|
|
|
|
|
|
|
Designated
at fair value through profit or loss at inception: |
|
|
|
- Equity
investments |
|
38,693,602 |
62,403,204 |
Total
designated at fair value through profit or loss at
inception |
|
38,693,602 |
62,403,204 |
Total
financial assets at fair value through profit or loss |
|
38,693,602 |
62,924,603 |
There were no significant changes to the Company’s direct equity
other than valuation movements.
As at 30 June 2018, there were no
derivative financial assets.
As at 31 December 2017, derivative
financial assets comprised forward foreign currency contracts as
follows:
Currency
Bought |
Amount
Bought |
|
Currency
Sold |
Amount
Sold |
|
Maturity
Date |
Unrealised
Gain |
£ |
13,000,749 |
|
US$ |
17,091,562 |
|
16/02/2018 |
521,399 |
Derivative financial assets |
|
|
521,399 |
|
|
|
|
|
|
30 June
2018 |
31
December 2017 |
|
|
|
|
|
|
US$ |
US$ |
Financial
liabilities held for trading: |
|
|
|
-
Derivative financial liabilities |
|
(539,714) |
- |
Total
financial liabilities held for trading |
|
(539,714) |
- |
As at 30 June 2018, derivative
financial liabilities comprised forward foreign currency contracts
as follows:
Currency
Bought |
Amount
Bought |
|
Currency
Sold |
Amount
Sold |
|
Maturity
Date |
Unrealised
Loss |
£ |
13,000,749 |
|
US$ |
17,737,819 |
|
16/08/2018 |
(539,714) |
Derivative financial liabilities |
|
|
(539,714) |
As at 31 December 2017, there were
no derivative financial liabilities.
4. Net Gain/Loss from
Financial Assets and Liabilities at Fair Value through Profit or
Loss
|
|
|
|
|
|
30 June
2018 |
30 June
2017 |
|
|
|
|
|
|
US$ |
US$ |
Other net
changes in fair value through profit or loss: |
|
|
|
- Realised
gains on investments |
|
- |
- |
- Realised
losses on investments |
|
(2,564,465) |
- |
- Realised
gains on forward foreign currency contracts |
|
1,270,047 |
614,486 |
- Realised
losses on forward foreign currency contracts |
|
(769,216) |
(25,482) |
- Change
in unrealised gains on investments |
|
5,540,878 |
7,958,795 |
- Change
in unrealised losses on investments |
|
(20,548,311) |
(117,665) |
- Change
in unrealised gains on forward foreign exchange contracts |
|
- |
150,363 |
- Change
in unrealised losses on forward foreign exchange contracts |
|
(1,061,113) |
(5,536) |
Total
(loss)/gain |
|
(18,132,180) |
8,574,961 |
|
|
|
|
|
|
|
|
|
30 June
2018 |
30 June
2017 |
|
US$ |
US$ |
Other net
changes in fair value on derivative assets held for trading |
(560,282) |
733,831 |
Other net
changes in fair value on assets designated at fair value through
profit or loss |
(17,571,898) |
7,841,130 |
Total
net (loss)/gain |
|
(18,132,180) |
8,574,961 |
5. Other Financial Assets
and Liabilities
a) Other financial assets:
Other financial assets relate to accounts receivable and prepaid
expenses and comprise the following:
|
|
|
|
|
|
30 June
2018 |
31
December 2017 |
|
|
|
|
|
|
US$ |
US$ |
Prepaid
Directors’ insurance fees |
|
- |
6,387 |
Other
receivables and prepaid expenses |
|
145 |
6,541 |
|
|
|
|
|
|
145 |
12,928 |
b) Other financial liabilities:
Other financial liabilities relate to accounts payable and
accrued expenses, and comprise the following:
|
|
|
|
|
|
30 June
2018 |
31
December 2017 |
|
|
|
|
|
|
US$ |
US$ |
Investment
management fees payable |
|
(5,353) |
(5,432) |
Incentive
fees payable |
|
(925,443) |
(1,008,198) |
Other
accruals |
|
(91,227) |
(81,646) |
|
|
|
|
|
|
(1,022,023) |
(1,095,276) |
6. Financial
Instruments
a) Financial risk management
The Company’s financial risk management objectives and policies
are consistent with those disclosed in the audited financial
statements of the Company for the year ended 31 December 2017.
b) Carrying amounts versus fair values
As at 30 June 2018, the carrying
values of financial assets and liabilities presented in the
Unaudited Condensed Statement of Financial Position approximate
their fair values.
The table below sets out the classifications of the carrying
amounts of the Company’s financial assets and financial liabilities
into categories of financial instruments as at 30 June 2018.
|
Held
for trading |
Designated at fair value |
Loans
and receivables |
|
Other
financial
liabilities |
Total |
|
US$ |
US$ |
US$ |
|
US$ |
US$ |
Cash and cash
equivalents |
- |
- |
27,010,092 |
|
- |
27,010,092 |
Non-pledged financial
assets at fair
value through profit or loss |
- |
38,693,602 |
- |
|
- |
38,693,602 |
Other receivables |
- |
- |
145 |
|
- |
145 |
Total |
- |
38,693,602 |
27,010,237 |
|
- |
65,703,839 |
|
|
|
|
|
|
|
Financial liabilities
at fair value
through profit or loss |
(539,714) |
- |
- |
|
- |
(539,714) |
Other payables |
- |
- |
- |
|
(26,670,745) |
(26,670,745) |
Total |
(539,714) |
- |
- |
|
(26,670,745) |
(27,210,459) |
The table below sets out the classifications of the carrying
amounts of the Company’s financial assets and financial liabilities
into categories of financial instruments as at 31 December 2017.
|
Held
for trading |
Designated at fair value |
Loans
and receivables |
|
Other
financial
liabilities |
Total |
|
US$ |
US$ |
US$ |
|
US$ |
US$ |
Cash and cash
equivalents |
- |
- |
673,736 |
|
- |
673,736 |
Non-pledged financial
assets at fair
value through profit or loss |
521,399 |
62,403,204 |
- |
|
- |
62,924,603 |
Other receivables |
- |
- |
12,928 |
|
- |
12,928 |
Total |
521,399 |
62,403,204 |
686,664 |
|
- |
63,611,267 |
|
|
|
|
|
|
|
Financial liabilities
at fair value
through profit or loss |
- |
- |
- |
|
- |
- |
Other payables |
- |
- |
- |
|
(1,095,276) |
(1,095,276) |
Total |
- |
- |
- |
|
(1,095,276) |
(1,095,276) |
|
|
|
|
|
|
|
|
c) Financial instruments carried at fair value - fair value
hierarchy
Fair value is defined as the price that would be received to
sell an asset or paid to transfer a liability (i.e. the exit price)
in an orderly transaction between market participants at the
measurement date.
For certain of the Company’s financial instruments including
cash and cash equivalents, prepaid/accrued expenses and other
creditors, their carrying amounts approximate fair value due to the
immediate or short-term nature of these financial instruments. The
Company’s investments and financial derivative instruments are
carried at market value, which approximates fair value.
The Company classifies financial instruments within a fair value
hierarchy that prioritises the inputs to valuation techniques used
to measure fair value. The hierarchy gives the highest priority to
unadjusted quoted prices in active markets for identical assets or
liabilities (Level 1 measurements) and the lowest priority to
unobservable inputs (Level 3 measurements). The three levels of the
fair value hierarchy are as follows:
Level 1 inputs are unadjusted quoted prices in active
markets for identical assets or liabilities that the reporting
entity has the ability to access at the measurement date.
Level 2 inputs are observable inputs other than quoted
prices included within Level 1 that are observable for the asset or
liability, either directly or indirectly, including:
- quoted prices for similar assets or liabilities in active
markets;
- quoted prices for identical or similar assets or liabilities
in markets that are not active;
- inputs other than quoted prices that are observable for the
asset or liability;
- inputs that are derived principally from or corroborated by an
observable market.
Level 3 inputs are unobservable inputs for the asset or
liability.
Inputs are used in applying various valuation techniques and
broadly refer to the assumptions that market participants use to
make valuation decisions, including assumptions about risk. Inputs
may include price information, volatility statistics, specific and
broad credit data, liquidity statistics, and other factors. A
financial instrument’s level within the fair value hierarchy is
based on the lowest level of any input that is significant to the
fair value measurement. However, the determination of what
constitutes “observable” requires significant judgement. The
Company considers observable data to be that market data which is
readily available, regularly distributed or updated, reliable and
verifiable, not proprietary, and provided by independent sources
that are actively involved in the relevant market.
The categorisation of a financial instrument within the
hierarchy is based upon the pricing transparency of the instrument
and does not necessarily correspond to the Company’s perceived risk
of that instrument.
Investments: Investments whose values are based on quoted
market prices in active markets, and are therefore classified
within Level 1, include active listed equities, certain U.S.
government and sovereign obligations, and certain money market
securities. The Company does not generally adjust the quoted price
for such instruments, even in situations where it holds a large
position and a sale could reasonably impact the quoted price.
Investments that trade in markets that are not considered to be
active, but are valued based on quoted market prices, dealer
quotations or alternative pricing sources supported by observable
inputs are classified within Level 2. These may include government
and sovereign obligations, government agency securities, corporate
bonds, and municipal and provincial obligations.
Investments classified within Level 3 have significant
unobservable inputs, as they trade infrequently or not at all.
Level 3 instruments may include private equity investments, certain
loan agreements, less-liquid corporate debt securities (including
distressed debt instruments) and collateralised debt obligations.
Also included in this category are government and sovereign
obligations, government agency securities and corporate bonds for
which independent broker prices are used and information relating
to the inputs of the price models is not observable.
When observable prices are not available; e.g. if an asset does
not trade regularly, the Company may rely on information provided
by any person, firm or entity including any professional person
whom the Directors consider to be suitably qualified to provide
information in respect of the valuation of investments and who is
approved by the Custodian (an “Approved Person”). Approved Persons
may include certain brokers and the Pricing Methodology and
Valuation Committee (“PMVC”) of the Investment Manager.
The PMVC may provide assistance to the Administrator in
determining the valuation of assets where the Administrator cannot
determine a valuation from another source. These assets, which are
classified within Level 3, may include all asset types but are
frequently ‘Special Situations’ type investments, typically
incorporating distressed, illiquid or private investments.
For these hard-to-value investments, the methodology and models
used to determine fair value are created in accordance with the
International Private Equity and Venture Capital Valuation (“IPEV”)
guidelines. Smaller investments may be valued directly by the PMVC
but material investments are valued by experienced personnel at an
independent third-party valuation specialist. Such valuations are
subject to review, amendment if necessary, then approval by the
PMVC. The valuations are ultimately approved by the Directors and
the auditors to a material extent in so far as they make up part of
the Net Asset Value (“NAV”) in the financial statements.
Valuation techniques used include the market approach, the
income approach or the cost approach depending on the availability
of reliable information. The market approach generally consists of
using; comparable transactions, earnings before interest, tax,
depreciation and amortisation (“EBITDA”) multiples; or enterprise
value (“EV”) multiples (based on comparable public company
information). The use of the income approach generally consists of
the net present value of estimated future cash flows, adjusted as
deemed appropriate for liquidity, credit, market and/or other risk
factors.
Inputs used in estimating the value of investments may include
the original transaction price, recent transactions in the same or
similar instruments, completed or pending third-party transactions
in the underlying investment or comparable issuers, subsequent
rounds of financing, recapitalisations and other transactions
across the capital structure, offerings in the equity or debt
capital markets and bids received from potential buyers.
For the determination of the NAV, Level 3 investments may be
adjusted to reflect illiquidity and/or non-transferability.
However, any such adjustments are typically reversed in the
financial statements where it is determined that this is required
by the accounting standards.
The Company believes that its estimates of fair value are
appropriate, however estimates and assumptions concerning the
future, by definition, seldom equal the actual results and the
estimated value may not be realised in a current sale or immediate
settlement of the asset or liability. The use of different
methodologies, assumptions or inputs would lead to different
measurements of fair value and given the number of different
factors affecting the estimate, specific sensitivity analysis
cannot be reliably quantified. It is reasonably possible, on the
basis of existing knowledge, that outcomes within the next
financial year that are different from the assumptions used could
require a material adjustment to the carrying amounts of affected
assets.
Financial Derivative Instruments: Financial derivative
instruments can be exchange-traded or privately negotiated
over-the-counter (“OTC”). Exchange-traded derivatives, such as
futures contracts and exchange-traded option contracts, are
typically classified within Level 1 or Level 2 of the fair value
hierarchy depending on whether or not they are deemed to be
actively traded.
OTC derivatives, including forwards, credit default swaps,
interest rate swaps and currency swaps, are valued by the Company
using observable inputs, such as quotations received from the
counterparty, dealers or brokers, whenever these are available and
considered reliable. In instances where models are used, the value
of an OTC derivative depends upon the contractual terms of, and
specific risks inherent in, the instrument as well as the
availability and reliability of observable inputs. Such inputs
include market prices for reference securities, yield curves,
credit curves, measures of volatility, prepayment rates and
correlations of such inputs. Certain OTC derivatives, such as
generic forwards, swaps and options, have inputs which can
generally be corroborated by market data and are therefore
classified within Level 2.
Those OTC derivatives that have less liquidity or for which
inputs are unobservable are classified within Level 3. While the
valuations of these less liquid OTC derivatives may utilise some
Level 1 and/or Level 2 inputs, they also include other unobservable
inputs which are considered significant to the fair value
determination.
The Company recognises transfers between Levels 1, 2 and 3 based
on the date of the event or change in circumstances that caused the
transfer. This policy on the timing of recognising transfers is the
same for transfers into a level as for transfers out of a level.
There were no transfers between the three levels during the period
ended 30 June 2018 and the year ended
31 December 2017.
The following table analyses within the fair value hierarchy the
Company’s financial assets and liabilities at fair value through
profit and loss (by class) measured at fair value as at
30 June 2018:
|
Level
1 |
Level
2 |
Level
3 |
Total
balance |
|
US$ |
US$ |
US$ |
US$ |
Financial assets at
fair value
through profit and loss |
|
|
|
|
Financial assets
designated at fair value through profit or loss at inception: |
|
|
|
|
- Equity
investments |
944 |
- |
38,692,658 |
38,693,602 |
Total |
944 |
- |
38,692,658 |
38,693,602 |
|
|
|
|
|
Financial
liabilities at fair value
through profit and loss |
|
|
|
|
Financial liabilities
held for trading: |
|
|
|
|
- Derivative financial
liabilities |
- |
(539,714) |
- |
(539,714) |
Total |
- |
(539,714) |
- |
(539,714) |
The following table analyses within the fair value hierarchy the
Company’s financial assets and liabilities at fair value through
profit and loss (by class) measured at fair value as at
31 December 2017:
|
Level
1 |
Level
2 |
Level
3 |
Total
balance |
|
US$ |
US$ |
US$ |
US$ |
Financial assets at
fair value
through profit and loss |
|
|
|
|
Financial assets held
for trading: |
|
|
|
|
- Derivative financial
assets |
- |
521,399 |
- |
521,399 |
Financial assets
designated at fair value through profit or loss at inception: |
|
|
|
|
- Equity
investments |
938 |
- |
62,402,266 |
62,403,204 |
Total |
938 |
521,399 |
62,402,266 |
62,924,603 |
Level 1 assets include the Ashmore SICAV 2
Global Liquidity US$ Fund.
Level 2 assets and liabilities include forward foreign
currency contracts that are calculated internally using observable
market data.
Level 3 assets include all unquoted Ashmore Funds
(“Funds”), limited partnerships and unquoted investments.
Investments in unquoted Funds and limited partnerships are valued
on the basis of the latest NAV, which represents the fair value, as
provided by the administrator of the unquoted Fund at the close of
business on the relevant valuation day. Unquoted Funds have been
classified as Level 3 assets after consideration of their
underlying investments, lock-up periods and liquidity.
The following table presents the movement in Level 3 instruments
for the period ended 30 June
2018.
|
|
Equity investments |
|
|
US$ |
Opening balance as at
1 January 2018 |
|
|
|
62,402,266 |
Sales and returns of
capital |
|
|
|
(6,137,713) |
Gains and
losses recognised in profit and loss * |
|
|
(17,571,895) |
Closing balance as
at 30 June 2018 |
|
|
|
38,692,658 |
* Gains and losses recognised in profit and loss include net
unrealised losses on existing assets as at 30 June 2018 of US$365,621,810.
Total gains and losses included in the Unaudited Condensed
Statement of Comprehensive Income are presented in “Other net
changes in fair value on financial assets and liabilities at fair
value through profit or loss”.
The following tables show the valuation techniques and the key
unobservable inputs used in the determination of the fair value of
Level 3 direct investments:
|
Balance as at
30 June 2018 |
Valuation
Technique |
Significant unobservable inputs |
Range of estimates for unobservable inputs |
Sensitivity to
changes in significant unobservable inputs |
|
US$ |
|
|
|
|
Equity in a
private company |
6,423,327 |
Discounted Cash Flows |
Liquidity discount at adjusted equity level |
-
** |
The estimated fair value would increase if:
- the liquidity discount were lower
- the EV/EBITDA multiples were higher |
Market
approach using comparable traded multiples |
Listed
company EV/EBITDA multiple |
-
** |
Investments in unlisted
Funds |
32,269,331 |
Unadjusted NAV |
Inputs
to NAV* |
US$0.02
- US$52.86 |
The estimated fair
value would increase if the NAV was higher |
|
Balance as at
31 December 2017 |
Valuation
Technique |
Significant unobservable inputs |
Range of estimates for unobservable inputs |
Sensitivity to
changes in significant unobservable inputs |
|
US$ |
|
|
|
|
Equity in a
private company |
6,837,105 |
Discounted Cash Flows |
Liquidity discount at adjusted equity level |
-
** |
The estimated fair value would increase if:
- the liquidity discount were lower
- the EV/EBITDA multiples were higher |
Market
approach using comparable traded multiples |
Listed
company EV/EBITDA multiple |
-
** |
Investments in unlisted
Funds |
55,565,161 |
Unadjusted NAV |
Inputs
to NAV* |
US$0.04
- US$52.25 |
The estimated fair
value would increase if the NAV was higher |
* The Company has assessed whether there are any discounts in
relation to lock-in periods that are impacting liquidity. There
were no discounts in relation to lock-in periods as at 30 June 2018 and 31
December 2017.
** Information has not been included as these are commercially
sensitive.
Unobservable inputs are developed as follows:
? EBITDA and revenue multiples represent amounts
that market participants would use when pricing an investment.
These multiples are selected from comparable publicly listed
companies based on geographic location, industry size, target
markets and other factors that management considered to be
reasonable. The traded multiples for the comparable companies are
determined by dividing its respective enterprise value by its
EBITDA or revenue.
? The Company used a combination of market multiples
and discounted cash flows methodologies to derive the fair
value.
The Company believes that its estimates of fair value are
appropriate; however the use of different methodologies or
assumptions could lead to different measurements of fair value. For
fair value investments in Level 3, changing one or more of the
assumptions used to alternative assumptions could result in an
increase or decrease in net assets attributable to investors. Due
to the numerous different factors affecting the assets, the impact
cannot be reliably quantified. It is reasonably possible on the
basis of existing knowledge, that outcomes within the next
financial period that are different from the assumptions used could
require a material adjustment to the carrying amounts of affected
assets.
7. Capital and
Reserves
Ordinary Shares
The following table presents a summary of changes in the number
of shares issued and fully paid during the period ended
30 June 2018:
|
|
US$
shares |
|
£
shares |
Shares
outstanding as at 1 January 2018 |
7,357,618 |
|
2,258,946 |
Share conversions |
|
55,834 |
|
(44,175) |
Compulsory
partial redemptions |
(2,942,300) |
|
(897,586) |
Shares
outstanding as at 30 June 2018 |
4,471,152 |
|
1,317,185 |
Share Conversion
The following share conversions took place during the period
ended 30 June 2018:
Transfers from |
Transfers to |
Number
of shares
to switch out |
|
Number
of shares
to switch in |
£ shares |
US$ shares |
47,047 |
|
59,613 |
US$ shares |
£ shares |
3,779 |
|
2,872 |
Compulsory Partial Redemptions
During the period ended 30 June
2018, management announced partial returns of capital to
shareholders by way of compulsory partial redemptions of shares
with the following redemption dates:
•
21 June 2018, US$25.5m using the 31 May
2018 NAV.
Voting rights
The voting rights each share is entitled to in a poll at any
general meeting of the Company (applying the Weighted Voting
Calculation as described in the Prospectus published by the Company
on 6 November 2007) are as
follows:
US$ shares: |
1.0000 |
£ shares: |
2.0288 |
The above figures may be used by shareholders as the denominator
for calculations to determine if they are required to notify their
interest in, or a change to their interest in the Company under the
FCA’s Disclosure and Transparency Rules.
8. Net Asset Value
The NAV of each US$ and £ share is determined by dividing the
total net assets of the Company attributable to the US$ and £ share
classes by the number of US$ and £ shares in issue respectively at
the period and year ends as follows:
As at 30 June
2018 |
Net
assets
attributable to each
share class in US$ |
Shares in issue |
Net
assets
per share
in US$ |
Net
assets
per share
in local currency |
US$ shares |
28,148,921 |
4,471,152 |
6.30 |
6.30 |
£ shares |
10,344,459 |
1,317,185 |
7.85 |
5.95 |
|
38,493,380 |
|
|
|
As at 31 December
2017 |
Net
assets
attributable to each
share class in US$ |
Shares in issue |
Net
assets
per share
in US$ |
Net
assets
per share
in local currency |
US$ shares |
44,735,598 |
7,357,618 |
6.08 |
6.08 |
£ shares |
17,780,393 |
2,258,946 |
7.87 |
5.82 |
|
62,515,991 |
|
|
|
The allocation of the Company’s NAV between share classes is
further described in the Company’s Prospectus.
9. Earnings per Share
(“EPS”)
The calculation of the earnings per US$ and £ share is based on
the gain/loss for the period attributable to US$ and £ shareholders
and the respective weighted average number of shares in issue for
each share class during the period.
The gain attributable to each share class for the period ended
30 June 2018 was as follows:
|
|
|
US$
share |
|
£
share |
Issued shares at the
beginning of the period |
|
|
7,357,618 |
|
2,258,946 |
Effect on
the weighted average number of shares: |
|
|
|
|
- Conversion of
shares |
|
|
474 |
|
546 |
- Compulsory partial
redemption of shares |
|
|
(58,846) |
|
(18,893) |
Weighted average
number of shares |
|
|
7,299,246 |
|
2,240,599 |
Profit
for the period attributable to each class of shareholders
(US$) |
|
1,487,467 |
|
138,644 |
EPS (US$) |
|
|
0.20 |
|
0.06 |
There were no dilutive instruments in issue during the period
ended 30 June 2018.
The gain attributable to each share class for the period ended
30 June 2017 was as follows:
|
|
|
US$
share |
|
£
share |
Issued shares at the
beginning of the period |
|
|
7,465,478 |
|
2,586,288 |
Effect on
the weighted average number of shares: |
|
|
|
|
- Conversion of
shares |
|
|
116,291 |
|
(96,740) |
Weighted average
number of shares |
|
|
7,581,769 |
|
2,489,548 |
Gain/(loss) per
share class (US$) |
|
|
5,455,908 |
|
2,815,019 |
EPS (US$) |
|
|
0.72 |
|
1.13 |
There were no dilutive instruments in issue during the period
ended 30 June 2017.
10. Segmental Reporting
Although the Company has two share classes and invests in
various investment themes, it is organised and operates as one
business and one geographical segment, as the principal focus is on
emerging market strategies, mainly achieved via investments in
funds domiciled in Europe but
investing globally. Accordingly, all significant operating
decisions are based upon analysis of the Company as one segment.
The financial results from this segment are equivalent to the
financial statements of the Company as a whole. Additionally, the
Company’s performance is evaluated on an overall basis. The
Company’s management receives financial information prepared under
IFRS and, as a result, the disclosure of separate segmental
information is not required.
11. Ultimate Controlling Party
In the opinion of the Directors and on the basis of
shareholdings advised to them, the Company has no ultimate
controlling party.
12. Involvement with Unconsolidated
Structured Entities
The table below describes the types of structured entities that
the Company does not consolidate but in which it holds an
interest.
Type of structured
entity |
Nature and
purpose |
|
Interest held by the
Company |
Investment Funds |
To manage assets on
behalf of third party investors. These vehicles are financed
through the issue of units to investors. |
|
Investments in units
issued by the Funds |
The table below sets out interests held by the Company in
unconsolidated structured entities as at 30
June 2018.
Investment in unlisted
investment Funds |
Number
of
investee Funds |
|
Total net
assets |
|
Carrying
amount included in "Financial assets at fair value through profit
or loss" |
|
% of net
assets of underlying Funds |
Special Situations
Private Equity Funds |
7 |
|
141,943,446 |
|
27,592,422 |
|
19.44 |
Real Estate Funds |
2 |
|
43,975,363 |
|
4,676,909 |
|
10.64 |
The maximum exposure to loss is the carrying amount of the
financial assets held.
During the period, the Company did not provide financial support
to these unconsolidated structured entities and the Company has no
intention of providing financial or other support, except for the
outstanding commitments disclosed in note 14 to the financial
statements.
13. Related Party Transactions
Parties are considered to be related if one party has the
ability to control the other party or to exercise significant
influence over the other party in making financial or operational
decisions.
The Directors are responsible for the determination of the
investment policy of the Company and have overall responsibility
for the Company’s activities. The Company’s investment portfolio is
managed by AIAL.
The Company and the Investment Manager entered into an
Investment Management Agreement under which the Investment Manager
has been given responsibility for the day-to-day discretionary
management of the Company’s assets (including uninvested cash) in
accordance with the Company’s investment objectives and policies,
subject to the overall supervision of the Directors and in
accordance with the investment restrictions in the Investment
Management Agreement and the Articles of Incorporation.
During the period ended 30 June
2018, the Company had the following related party
transactions:
|
|
Expense |
Payable |
Related
Party |
Nature |
US$ |
US$ |
AIAL |
Investment management
fees |
(32,806)
|
(5,353) |
AIAL |
Incentive fees |
82,756
* |
(925,443) |
Board of
Directors |
Directors’
remuneration |
(58,939)
|
- |
|
|
|
|
|
|
|
Investment Activity |
Related
Party |
Nature |
|
US$ |
Related Funds |
Sales |
|
6,137,713 |
Related Funds |
Dividends |
|
19,755,109 |
Ashmore SICAV 2 Global
Liquidity US$ Fund |
Dividends |
|
7 |
* Incentive fees are positive due to a reversal of prior year
accruals.
During the period ended 30 June
2017, the Company engaged in the following related party
transactions:
|
|
Expense |
Payable |
Related
Party |
Nature |
US$ |
US$ |
AIAL |
Investment management
fees |
(31,301)
|
(5,364) |
AIAL |
Incentive fees |
(150,949)
|
(946,042) |
Board of
Directors |
Directors’
remuneration |
(35,307)
|
- |
|
|
|
|
|
|
Investment
Activity |
|
|
|
US$ |
Ashmore SICAV 2 Global
Liquidity US$ Fund |
Dividends |
|
3 |
Related Funds are other Funds managed by Ashmore Investment
Advisors Limited or its associates.
Purchases and sales of the Ashmore SICAV 2 Global Liquidity US$
Fund (“Global Liquidity Fund”) were solely related to the cash
management of US dollars on account. Funds are swept into the
S&P AAA rated Global Liquidity Fund and returned as and when
required for asset purchases or distributions. The Global Liquidity
Fund is managed under the dual objectives of the preservation of
capital and the provision of daily liquidity, investing exclusively
in very highly rated short-term liquid money market securities.
During the periods ended 30 June
2018 and 30 June 2017,
Directors’ remuneration was as follows:
Chairman: |
|
£28,350 per annum |
Chairman of the
Audit Committee: |
|
£28,350 per annum |
Independent
Directors: |
|
£26,730 per annum |
Non-Independent
Director: |
|
waived |
The Directors had the following beneficial interests in the
Company:
|
30 June
2018 |
31
December 2017 |
|
£
ordinary shares |
£
ordinary shares |
Nigel de la Rue |
469 |
779 |
Christopher Legge |
293 |
487 |
Richard Hotchkis |
176 |
293 |
14. Commitments
During the year ended 31 December
2010, the Company entered into a subscription agreement with
Everbright Ashmore China Real Estate Fund LP for a total commitment
of US$10 million. As at 30 June 2018, the outstanding commitment was
US$529,455 (31
December 2017: US$529,455).
During the year ended 31 December
2011, the Company increased its commitment to VTBC Ashmore
Real Estate Partners 1 LP to a total of €11.4 million. As at
30 June 2018, the outstanding
commitment was €243,474 (31 December
2017: €243,474).
During the year ended 31 December
2011, the Company entered into a subscription agreement with
AA Development Capital India Fund LP for an initial commitment of
US$4,327,064, which was subsequently
increased to US$23,581,027. AA
Development Capital India Fund LP was dissolved by its General
Partner on
28 June 2013 with all outstanding
commitments transferred to AA Development Capital India Fund 1 LLC.
As at 30 June 2018, the outstanding
commitment was US$5,959,809
(31 December 2017: US$5,959,809).
15. Subsequent Events
The capital distribution of US$25.5
million that was declared on 21 June
2018 was paid on 10 July 2018.
The additional compulsory redemption of US$148,589 as a result of the overpayment to £
shareholders (as described on page 14) was paid on the 6 August 2018.
There were no other significant events subsequent to the
period-end date that require adjustment to, or disclosure in, the
financial statements.
Corporate Information
Directors
Richard Hotchkis
Nigel de la Rue
Christopher Legge
Steve Hicks |
Custodian
Northern Trust (Guernsey) Limited
P.O. Box 71
Trafalgar Court
Les Banques
St Peter Port
Guernsey
GY1 3DA
Channel Islands |
Registered Office
P.O. Box 255
Trafalgar Court
Les Banques
St Peter Port
Guernsey
GY1 3QL
Channel Islands |
Auditor
KPMG Channel Islands Limited
Glategny Court
Glategny Esplanade
St Peter Port
Guernsey
GY1 1WR
Channel Islands |
Administrator, Secretary and Registrar
Northern Trust International Fund
Administration Services (Guernsey) Limited
P.O. Box 255
Trafalgar Court
Les Banques
St Peter Port
Guernsey
GY1 3QL
Channel Islands |
Advocates to the Company
Carey Olsen
Carey House
Les Banques
St Peter Port
Guernsey
GY1 4BZ
Channel Islands |
Alternative Investment Fund Manager
Ashmore Investment Advisors Limited
61 Aldwych
London
WC2B 4AE
United Kingdom |
UK
Solicitor to the Company
Slaughter and May
One Bunhill Row
London
EC1Y 8YY
United Kingdom |
Brokers
J.P. Morgan Cazenove
20 Moorgate
London
EC2R 6DA
United Kingdom
Jefferies International Limited
Vintners Place
68 Upper Thames Street
London
EC4V 3BJ
United Kingdom |
UK
Transfer Agent
Computershare Investor Services PLC
The Pavilions
Bridgewater Road
Bristol
BS13 8AE
United Kingdom
Website
Performance and portfolio information for shareholders can be found
at:
www.agol.com |