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 2019
(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 2019. All figures are
based on the unaudited financial statements for the six months
ended 30 June 2019.
The financial information for the six months ended 30 June 2019 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
2019 will be available on the Company website:
www.agol.com.
Financial Highlights
|
|
30 June
2019 |
|
31
December 2018 |
|
|
|
|
|
Total Net Assets |
|
US$19,920,134 |
|
US$30,518,440 |
|
|
|
|
|
Net Asset Value per
Share |
|
|
|
|
US$ shares |
|
US$4.10 |
|
US$5.05 |
£ shares |
|
£3.76 |
|
£4.73 |
|
|
|
|
|
Closing-Trade Share
Price |
|
|
|
|
US$ shares |
|
US$4.04 |
|
US$4.15 |
£ shares |
|
£3.12 |
|
£3.58 |
|
|
|
|
|
Discount to Net Asset
Value |
|
|
|
|
US$ shares |
|
(1.46)% |
|
(17.82)% |
£ shares |
|
(17.02)% |
|
(24.31)% |
Chairman’s Statement
As at 30 June 2019, the Net Asset
Value (“NAV”) of Ashmore Global Opportunities Limited (the
“Company” or “AGOL”) was US$19.9m
compared to US$30.5m at 31 December 2018. The NAVs per share were
US$4.10 and £3.76 as at 30 June 2019, down from US$5.05 and £4.73 respectively at the end of
2018. The share prices stood at US$4.04 and £3.12 as at 30
June 2019.
The main detractor to performance was a mark-down in the value
of Microvast. This was off-set somewhat by a mark-up in AEI.
Further details on the underlying exposures of the Company are
given in the Investment Manager’s Report.
There were further realisations during the reporting period:
Kulon in Russia and the final
asset in Everbright in China were
sold completely, and AEI paid a dividend. The Board approved a
distribution to Shareholders of US$4.7m on 13 May
2019, with a payment date of 13 June
2019.
The Investment Manager is working towards the sale of the
remaining assets, with a particular focus on the two largest
exposures of the Company, namely Microvast and AEI. Your Board
receives regular updates on the operating performance and on
progress with the sales processes.
Below is an overview of the distributions made since
February 2013 when Shareholders voted
to wind up the Company in an orderly fashion.
Quarterly
Distributions |
|
|
|
|
|
|
|
|
|
Quarter
End Date |
Distributions |
|
% of 31
December 2012 |
% of 31
December 2012 |
|
(US$) |
|
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% |
31 December 2018 |
1,500,000 * |
0% |
0% |
30 June 2019 |
4,725,000 |
|
1% |
1% |
|
|
|
|
|
Total |
337,825,000 |
|
70% |
102% |
|
|
|
|
|
|
* was declared in January 2019 and
paid in April 2019.
I would like to thank everyone involved with AGOL for their hard
work.
Richard Hotchkis
23 August 2019
Investment Manager’s Report
Performance
As at 30 June 2019, the NAVs per
share of the US$ and £ classes stood at US$4.10 and £3.76 respectively, representing
returns of -18.81% and -20.51% over the last six months.
Portfolio Review
The principal detractor to performance in the first half of 2019
was the mark-down in the value of Microvast by the independent
valuation agent. This mark-down was due to a 60-70% reduction in
Chinese subsidies for the customers who buy the EV batteries. This
change in the subsidy scheme was noted in AGOL’s last annual report
but turned out to be even larger than envisaged by the market. This
has depressed margins. In addition, there is currently an
oversupply of EV batteries in the Chinese market and further
exports have to be found.
There were full realisations of the investments in Kulon and
Everbright during H1 2019, at prices marginally above book values.
AEI paid another dividend from its ongoing operations. The proceeds
of these sales and dividend were distributed to shareholders in
April 2019.
The two largest investee company exposures, Microvast and AEI,
now account for around 80% of AGOL’s NAV as at 30 June 2019.
As noted above, Microvast’s gross margins have fallen due to the
lower prices under the new e-bus subsidy policy. The company made
small losses in Q1 and Q2 2019 and is working on obtaining further
export orders, as well as follow-up orders in China. A full exit of this asset is envisaged
in 2020/2021, probably through a pre or post IPO transaction.
Sales discussions are proceeding with Numero Uno in India.
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 2019 excluding the cash
balance (cash was -0.14% as at 30 June
2019).
Investment
Name |
Holding |
|
|
Country |
Business
Description |
AEI |
57.83% |
|
|
Guatemala |
Power generation in
Latin America |
Microvast |
22.22% |
|
|
China |
Electric battery and
battery systems supplier |
ZIM Laboratories
Ltd |
9.55% |
|
|
India |
Pharmaceutical
research and manufacturing |
Numero Uno |
5.37% |
|
|
India |
Branded apparel
manufacturers and retailers |
GZ Industries
Limited |
3.33% |
|
|
Nigeria |
Aluminium can
manufacturing |
The tables below show the country and industry allocations of
underlying investments over 1% at the end of June 2019:
Country |
% of
NAV |
|
Industry |
% of
NAV |
Guatemala |
57.83% |
|
Electrical |
57.83% |
China |
22.22% |
|
Electrical components
and equipment |
22.22% |
India |
16.20% |
|
Pharmaceuticals |
9.55% |
Nigeria |
3.89% |
|
Retail |
5.37% |
|
|
|
Miscellaneous
manufacturing |
3.89% |
|
|
|
|
|
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. It is expected that revenues in H1
2019 will be approximately US$35m at
a c. 20% gross margin. As in prior years, H1 is always
seasonally weaker and the Co has a number of large revenue
opportunities to be contracted in H2. The company is expected to
make an operating loss of c.US$17m
over H1 2019 as it continues to invest in R&D to maintain its
technological leadership
- The company is in advanced discussions on new export orders for
e-car, e-bus and truck batteries
- 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. The
production of such batteries will require additional capex and
funding
2019/20 operational
strategy/priorities
- Building large scale production of Li-B systems for passenger
vehicles, growing the International business and further
innovations on 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 targeted in 2020 or 2021
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 operating
normally
- The final appeal by China Machine New Energy Corporation (CMNC)
against the arbitration award before the Singapore Court of Appeal is scheduled for
late 2019
Key risks
Exit strategy
- The Manager will explore further exit opportunities post the
completion of the Singapore Arbitration process
ZIM Laboratories
Industry: Pharmaceuticals
Country: India
Website: zimlab.in
Company Status: Private
Investment Risk: Equity
Operational update and priorities
- The company continues to grow but highly ambitious growth
targets have not yet been reached. We are in discussion with
management about re-assessing the business plan
- The share price has improved somewhat but liquidity remains
low
Exit strategy and timing
- 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 company is progressing its foray into e-commerce
- Margins have started 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 and timing
- The discussions with the promotor about realising our
investment are progressing while alternative exits are also being
explored
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 2018 and the first
half of 2019 as the macro picture in Nigeria has stabilised and improved
- While pricing has started to decline marginally, can volumes
are up 15% in H1 2019
- The plant in South Africa
launched in April 2019 and over 60%
of capacity was contracted before launch, which will grow as the
business ramps up to full capacity by December 2019
2019 operational
strategy/priorities
- Ramp up plant in South
Africa
- Sign multi country contracts with clients to fill up unutilized
capacity in Nigeria
- Sell land in Kenya
- Manage foreign exchange exposures/requirements
Key risks
- Increased competition
- 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
Ashmore Investment Advisors Limited
Investment Manager
23 August 2019
Board Members
As at 30 June 2019, 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, (UK 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 (until 13 June 2019) |
London |
NB Distressed
Debt Investment Fund Limited |
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 2019; 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 23 August 2019
Richard
Hotchkis
Christopher Legge
Chairman
Chairman of the Audit Committee
Unaudited Condensed Statement of
Financial Position
As at 30 June 2019
|
|
30
June 2019 |
|
31
December 2018 |
|
Note |
US$ |
|
US$ |
Assets |
|
|
|
|
Cash and cash
equivalents |
|
695,632 |
|
413,401 |
Other financial
assets |
5a |
7,315 |
|
5,366 |
Financial assets at
fair value through profit or loss (“FVTPL”) |
3 |
20,423,737 |
|
31,179,252 |
Total
assets |
|
21,126,684 |
|
31,598,019 |
|
|
|
|
|
Equity |
|
|
|
|
Capital and
reserves attributable to equity holders
of the Company |
|
|
|
|
Special reserve |
|
375,709,891 |
|
381,934,791 |
Retained earnings |
|
(355,789,757) |
|
(351,416,351) |
Total
equity |
|
19,920,134 |
|
30,518,440 |
|
|
|
|
|
Liabilities |
|
|
|
|
Current
liabilities |
|
|
|
|
Other financial
liabilities |
5b |
1,188,582 |
|
1,009,345 |
Financial liabilities
at FVTPL |
3 |
17,968 |
|
70,234 |
Total
liabilities |
|
1,206,550 |
|
1,079,579 |
Total equity and
liabilities |
|
21,126,684 |
|
31,598,019 |
|
|
|
|
|
Net asset
values |
|
|
|
|
Net assets per US$
share |
8 |
US$4.10 |
|
US$5.05 |
Net assets per £
share |
8 |
£3.76 |
|
£4.73 |
The unaudited condensed interim financial statements were
approved by the Board of Directors on 23
August 2019, and were signed on its behalf by:
Richard Hotchkis
Christopher
Legge
Chairman
Chairman of the Audit
Committee
Unaudited Condensed Statement of Comprehensive Income
For the six months ended 30 June
2019
|
|
Six
months ended 30 June 2019 |
|
Six
months ended 30 June 2018 |
|
|
Note |
US$ |
|
US$ |
|
|
|
|
|
|
|
Interest income
calculated using the effective interest method |
|
13,139 |
|
16,955 |
|
Net foreign currency
gain |
|
45,111 |
|
55,855 |
|
Net (loss)/income from
financial instruments at FVTPL |
4 |
(4,086,738) |
|
1,659,882 |
* |
Total net
(loss)/gain |
|
(4,028,488) |
|
1,732,692 |
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
Incentive fees |
|
(179,473) |
|
82,756 |
** |
Investment management
fees |
|
(33,403) |
|
(32,806) |
|
Directors’
remuneration |
|
(55,205) |
|
(58,939) |
|
Fund administration
fees |
|
(2,865) |
|
(5,887) |
|
Custody fees |
|
(1,792) |
|
(3,306) |
|
Other operating
expenses |
|
(72,180) |
|
(88,399) |
|
Total operating
expenses |
|
(344,918) |
|
(106,581) |
|
|
|
|
|
|
|
(Loss)/gain for the
period |
|
(4,373,406) |
|
1,626,111 |
|
|
|
|
|
|
|
Total (loss)/profit
and comprehensive income
for the period |
|
(4,373,406) |
|
1,626,111 |
|
|
|
|
|
|
|
Earnings per
share |
|
|
|
|
|
Basic and diluted
(loss)/gain per US$ share |
9 |
US$(0.73) |
|
US$0.20 |
|
Basic and diluted
(loss)/gain per £ share |
9 |
US$(0.92) |
|
US$0.06 |
|
* |
The prior period comparatives have
been amended to include the dividend income in line with the
requirements of IFRS 9. The dividend income was previously
disclosed as a separate line item. |
** |
Incentive fees were
positive for the six months ended 30 June 2018 due to a reversal of
the prior year accruals. |
All items derive from continuing activities.
Unaudited Condensed Statement of Changes in Equity
For the six months ended 30 June
2019
|
|
|
Special |
|
Retained |
|
|
|
|
|
reserve |
|
earnings |
|
Total |
|
Note |
|
US$ |
|
US$ |
|
US$ |
|
|
|
|
|
|
|
|
Total equity as at
1 January 2019 |
|
|
381,934,791 |
|
(351,416,351) |
|
30,518,440 |
Total comprehensive
loss for the period |
|
|
- |
|
(4,373,406) |
|
(4,373,406) |
Capital
distribution |
7 |
|
(6,224,900) |
|
- |
|
(6,224,900) |
Total equity as at
30 June 2019 |
|
|
375,709,891 |
|
(355,789,757) |
|
19,920,134 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
(25,648,722) |
* |
- |
|
(25,648,722) |
Total equity as at
30 June 2018 |
|
|
381,934,791 |
|
(343,441,411) |
|
38,493,380 |
* |
The distribution payable differed 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. |
Unaudited Condensed Statement of Cash Flows
For the six months ended 30 June
2019
|
Six
months ended 30 June 2019 |
|
Six
months ended 30 June 2018 |
|
US$ |
|
US$ |
Cash flows from
operating activities |
|
|
|
Net bank interest
received |
13,139 |
|
16,955 |
Dividends
received |
1,083,816 |
|
19,792,055 |
Net operating expenses
paid |
(167,631) |
|
(167,051) |
Net cash from
operating activities |
929,324 |
|
19,641,959 |
|
|
|
|
Cash flows from
investment activities |
|
|
|
Sales of
investments |
13,133,633 |
|
6,137,712 |
Purchases of
investments |
(7,499,907) |
* |
- |
Net cash flows on
derivative instruments and foreign exchange |
(55,919) |
|
556,685 |
Net cash from
investment activities |
5,577,807 |
|
6,694,397 |
|
|
|
|
Cash flows from
financing activities |
|
|
|
Capital
distributions |
(6,224,900) |
|
- |
Net cash used in
financing activities |
(6,224,900) |
|
- |
|
|
|
|
Net increase in
cash and cash equivalents |
282,231 |
|
26,336,356 |
|
|
|
|
Reconciliation of net cash flows to movement in cash and cash
equivalents |
|
|
|
|
|
|
Cash and cash
equivalents at the beginning of the period |
413,401 |
|
673,736 |
Net increase in cash
and cash equivalents |
282,231 |
|
26,336,356 |
Cash and cash
equivalents at the end of the period |
695,632 |
|
27,010,092 |
* |
This amount represents a purchase of
shares in the Ashmore SICAV 2 Global Liquidity US$ Fund, which is
solely related to the cash management of US$ on account. This is
not the purchase of a new investment. |
Notes to the Unaudited Condensed Interim Financial Statements
- Schedule of Investments
As at 30 June 2019
Description of
investments |
Fair
value
US$ |
|
%
of
net assets |
|
|
|
|
AEI Inc - Equity |
6,979,727 |
|
35.04 |
Ashmore Global Special
Situations Fund 4 LP |
6,108,015 |
|
30.67 |
AA Development Capital
India Fund 1, LLC |
3,410,606 |
|
17.12 |
Ashmore Global Special
Situations Fund 5 LP |
2,548,737 |
|
12.79 |
Ashmore Global Special
Situations Fund 3 LP |
689,536 |
|
3.46 |
Ashmore Global Special
Situations Fund 2 Limited |
457,551 |
|
2.30 |
Ashmore Asian Recovery
Fund |
120,522 |
|
0.61 |
VTBC Ashmore Real
Estate Partners 1 LP |
84,524 |
|
0.42 |
Ashmore Asian Special
Opportunities Fund Limited |
18,720 |
|
0.09 |
Ashmore SICAV 2 Global
Liquidity US$ Fund |
5,799 |
|
0.03 |
|
|
|
|
Total investments
at fair value |
20,423,737 |
|
102.53 |
|
|
|
|
Net other current
liabilities |
(503,603) |
|
(2.53) |
|
|
|
|
Total net
assets |
19,920,134 |
|
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 2018. 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
23 August 2019.
The Directors have assessed the impact of the Alternative
Investment Fund Managers Directive (“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 2018.
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 2018. 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
2019 |
31
December 2018 |
|
|
|
|
|
|
US$ |
US$ |
Equity
investments |
|
20,423,737 |
31,179,252 |
Total
financial assets at FVTPL |
|
20,423,737 |
31,179,252 |
There were no significant changes to the Company’s direct equity
investments other than valuation movements.
As at 30 June 2019 and
31 December 2018, there were no
derivative financial assets.
|
|
|
|
|
|
30 June
2019 |
31
December 2018 |
|
|
|
|
|
|
US$ |
US$ |
Derivative
financial liabilities |
|
(17,968) |
(70,234) |
Total
financial liabilities at FVTPL |
|
(17,968) |
(70,234) |
As at 30 June 2019, derivative
financial liabilities comprised forward foreign currency contracts
as follows:
Currency
Bought |
Amount
Bought |
|
Currency
Sold |
Amount
Sold |
|
Maturity
Date |
Unrealised
Loss |
£ |
5,540,907 |
|
US$ |
7,080,143 |
|
31/07/2019 |
(17,968) |
Derivative financial liabilities |
|
|
(17,968) |
As at 31 December 2018, derivative
financial liabilities comprised forward foreign currency contracts
as follows:
Currency
Bought |
Amount
Bought |
|
Currency
Sold |
Amount
Sold |
|
Maturity
Date |
Unrealised
Loss |
£ |
8,082,702 |
|
US$ |
10,378,641 |
|
31/01/2019 |
(70,234) |
Derivative financial liabilities |
|
|
(70,234) |
4. Net
(Loss)/Income from Financial Instruments at FVTPL
|
|
|
|
|
|
30 June
2019 |
30 June
2018 |
|
|
|
|
|
|
|
US$ |
US$ |
|
Derivative
financial instruments |
|
(48,765) |
(560,282) |
* |
Total
derivative financial instruments |
|
(48,765) |
(560,282) |
* |
Financial
assets mandatorily measured at FVTPL: |
|
|
|
|
|
- Equity
investments |
|
(4,037,973) |
2,220,164 |
* |
Total
financial assets mandatorily measured at FVTPL |
|
(4,037,973) |
2,220,164 |
* |
Net
(loss)/income from financial instruments at FVTPL |
|
(4,086,738) |
1,659,882 |
* |
Net income from
financial instruments at FVTPL: |
|
|
|
|
- Dividend income |
|
1,099,409 |
19,792,062 |
* |
- Realised gains on
investments |
|
- |
- |
|
- Realised losses on
investments |
|
(780,516) |
(2,564,465) |
|
- Realised gains on
forward foreign currency contracts |
|
632,731 |
1,270,047 |
|
- Realised losses on
forward foreign currency contracts |
|
(733,762) |
(769,216) |
|
- Change in unrealised
gains on investments |
|
2,406,435 |
5,540,878 |
|
- Change in unrealised
losses on investments |
|
(6,763,301) |
(20,548,311) |
|
- Change in unrealised
gains on forward foreign currency contracts |
|
70,234 |
- |
|
- Change in unrealised
losses on forward foreign currency contracts |
|
(17,968) |
(1,061,113) |
|
Net (loss)/income
from financial instruments at FVTPL |
|
(4,086,738) |
1,659,882 |
* |
* |
The prior period comparatives have
been amended to conform with the current period’s presentation, in
line with the requirements of IFRS 9. |
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
2019 |
31
December 2018 |
|
|
|
|
|
|
US$ |
US$ |
Prepaid
expenses |
|
7,315 |
5,366 |
|
|
|
|
|
|
7,315 |
5,366 |
b) Other financial liabilities:
Other financial liabilities relate to accounts payable and
accrued expenses, and comprise the following:
|
|
|
|
|
|
30 June
2019 |
31
December 2018 |
|
|
|
|
|
|
US$ |
US$ |
Incentive
fees payable |
|
(1,087,369) |
(907,896) |
Investment
management fees payable |
|
(5,816) |
(5,069) |
Other
accruals |
|
(95,397) |
(96,380) |
|
|
|
|
|
|
(1,188,582) |
(1,009,345) |
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 2018.
b) Carrying amounts versus fair values
As at 30 June 2019, 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 2019.
|
Mandatorily at FVTPL |
Financial assets at amortised cost |
Financial liabilities at amortised cost |
Total |
Cash and cash
equivalents |
- |
695,632 |
- |
695,632 |
Non-pledged financial
assets at FVTPL |
20,423,737 |
- |
- |
20,423,737 |
Other receivables |
- |
7,315 |
- |
7,315 |
Total |
20,423,737 |
702,947 |
- |
21,126,684 |
|
|
|
|
|
Financial liabilities
at FVTPL |
(17,968) |
- |
- |
(17,968) |
Other payables |
- |
- |
(1,188,582) |
(1,188,582) |
Total |
(17,968) |
- |
(1,188,582) |
(1,206,550) |
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 2018.
|
Mandatorily at FVTPL |
Financial assets at amortised cost |
Financial liabilities at amortised cost |
Total |
Cash and cash
equivalents |
- |
413,401 |
- |
413,401 |
Non-pledged financial
assets at FVTPL |
31,179,252 |
- |
- |
31,179,252 |
Other receivables |
- |
5,366 |
- |
5,366 |
Total |
31,179,252 |
418,767 |
- |
31,598,019 |
|
|
|
|
|
Financial liabilities
at FVTPL |
(70,234) |
- |
- |
(70,234) |
Other payables |
- |
- |
(1,009,345) |
(1,009,345) |
Total |
(70,234) |
- |
(1,009,345) |
(1,079,579) |
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 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.
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 2019 and the year ended
31 December 2018.
The following table analyses within the fair value hierarchy the
Company’s financial assets and liabilities at FVTPL (by class)
measured at fair value as at 30 June
2019:
|
Level
1 |
Level
2 |
Level
3 |
Total
balance |
Non-pledged
financial assets at FVTPL |
|
|
|
|
Equity
investments |
5,799 |
- |
20,417,938 |
20,423,737 |
Total |
5,799 |
- |
20,417,938 |
20,423,737 |
|
|
|
|
|
Financial
liabilities at FVTPL |
|
|
|
|
Derivative financial
liabilities |
- |
(17,968) |
- |
(17,968) |
Total |
- |
(17,968) |
- |
(17,968) |
The following table analyses within the fair value hierarchy the
Company’s financial assets and liabilities at FVTPL (by class)
measured at fair value as at 31 December
2018:
|
Level
1 |
Level
2 |
Level
3 |
Total
balance |
Non-pledged
financial assets at FVTPL |
|
|
|
|
Equity
investments |
2,000,954 |
- |
29,178,298 |
31,179,252 |
Total |
2,000,954 |
- |
29,178,298 |
31,179,252 |
|
|
|
|
|
Financial
liabilities at FVTPL |
|
|
|
|
Derivative financial
liabilities |
- |
(70,234) |
- |
(70,234) |
Total |
- |
(70,234) |
- |
(70,234) |
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
2019:
|
|
Equity investments |
Opening balance as at
1 January 2019 |
|
|
|
29,178,298 |
Sales and returns of
capital |
|
|
|
(3,622,979) |
Gains and
losses recognised in profit and loss * |
|
|
(5,137,381) |
Closing balance as
at 30 June 2019 |
|
|
|
20,417,938 |
* The change in unrealised losses for the period recognised in
profit or loss relating to Level 3 instruments held as at
30 June 2019 amounted to US$4,356,866.
Total gains and losses included in the Unaudited Condensed
Statement of Comprehensive Income are presented in “Net
(loss)/income from financial instruments at FVTPL”.
The following tables show the valuation techniques and the key
unobservable inputs used in the determination of the fair value of
Level 3 direct investments:
|
Balance as at 30 June 2019
US$ |
Valuation technique |
Significant unobservable inputs |
Range of estimates
for unobservable inputs |
Sensitivity to
changes in significant unobservable inputs |
Equity in a
private company |
6,979,727 |
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 |
13,438,211 |
Unadjusted NAV |
Inputs
to NAV* |
US$0.02 to
US$37.57 |
The estimated fair
value would increase if the NAV was higher |
|
|
|
|
|
|
Balance as at
31 December 2018
US$ |
Valuation technique |
Significant unobservable inputs |
Range of estimates
for unobservable inputs |
Sensitivity to
changes in significant unobservable inputs |
Equity in a
private company |
6,082,361 |
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 |
23,095,937 |
Unadjusted NAV |
Inputs
to NAV* |
US$0.02
to US$44.89 |
The estimated fair
value would increase if the NAV was higher |
* The Company has assessed whether there are any discounts in
relation to lock-in periods that are impacting liquidity. There
were no discounts in relation to lock-in periods as at 30 June 2019 and 31
December 2018.
** Information has not been included as these are commercially
sensitive.
Unobservable inputs are developed as follows:
- EBITDA and revenue multiples represent amounts that market
participants would use when pricing an investment. These multiples
are selected from comparable publicly listed companies based on
geographic location, industry size, target markets and other
factors that management considered to be reasonable. The traded
multiples for the comparable companies are determined by dividing
its respective enterprise value by its EBITDA or revenue.
- The Company used a combination of market multiples and
discounted cash flows methodologies to derive the fair value.
The Company believes that its estimates of fair value are
appropriate; however the use of different methodologies or
assumptions could lead to different measurements of fair value. For
fair value investments in Level 3, changing one or more of the
assumptions used to alternative assumptions could result in an
increase or decrease in net assets attributable to investors. Due
to the numerous different factors affecting the assets, the impact
cannot be reliably quantified. It is reasonably possible on the
basis of existing knowledge, that outcomes within the next
financial period that are different from the assumptions used could
require a material adjustment to the carrying amounts of affected
assets.
7. Capital and
Reserves
Ordinary Shares
The following table presents a summary of changes in the number of
shares issued and fully paid during the period ended 30 June 2019:
|
|
US$
shares |
|
£
shares |
Shares
outstanding as at 1 January 2019 |
4,449,792 |
|
1,334,501 |
Compulsory
partial redemptions |
(849,134) |
|
(254,584) |
Shares
outstanding as at 30 June 2019 |
3,600,658 |
|
1,079,917 |
Share Conversion
No share conversions took place during the period ended
30 June 2019.
Compulsory Partial Redemptions
During the period ended 30 June 2019,
management announced partial returns of capital to shareholders by
way of compulsory partial redemptions of shares with the following
redemption dates:
•
7 March 2019, US$1.5m using the 31
January 2019 NAV; and
•
6 June 2019, US$4.7m using the 30 April
2019 NAV.
Voting rights
The voting rights each share is entitled to in a poll at any
general meeting of the Company (applying the Weighted Voting
Calculation as described in the Prospectus published by the Company
on 6 November 2007) are as
follows:
US$ 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
2019 |
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 |
14,750,491 |
3,600,658 |
4.10 |
4.10 |
£ shares |
5,169,643 |
1,079,917 |
4.79 |
3.76 |
|
19,920,134 |
|
|
|
As at 31 December
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 |
22,475,297 |
4,449,792 |
5.05 |
5.05 |
£ shares |
8,043,143 |
1,334,501 |
6.03 |
4.73 |
|
30,518,440 |
|
|
|
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 loss attributable to each share class for the period ended
30 June 2019 was as follows:
|
|
|
US$
share |
|
£
share |
Issued shares at the
beginning of the period |
|
|
4,449,792 |
|
1,334,501 |
Effect on
the weighted average number of shares: |
|
|
|
|
- Compulsory partial
redemption of shares |
|
|
(116,188) |
|
(34,823) |
Weighted average
number of shares |
|
|
4,333,604 |
|
1,299,678 |
Loss
for the period attributable to each class of shareholders
(US$) |
|
(3,171,946) |
|
(1,201,460) |
EPS (US$) |
|
|
(0.73) |
|
(0.92) |
There were no dilutive instruments in issue during the period
ended 30 June 2019.
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 |
Gain
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.
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 2019.
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 |
|
84,585,667 |
|
13,353,687 |
|
15.79 |
Real Estate Funds |
1 |
|
693,200 |
|
84,524 |
|
12.19 |
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
2019, the Company had the following related party
transactions:
|
|
Expense |
|
Payable |
Related
Party |
Nature |
US$ |
|
US$ |
AIAL |
Investment management
fees |
(33,403) |
|
(5,816) |
AIAL |
Incentive fees |
(179,473) |
|
(1,087,369) |
Board of
Directors |
Directors’
remuneration |
(55,205) |
|
- |
|
|
|
|
|
|
|
|
|
Investment Activity |
Related
Party |
Nature |
|
|
US$ |
Related Funds |
Sales |
|
|
3,622,979 |
Related Funds |
Dividends |
|
|
1,083,816 |
Ashmore SICAV 2 Global
Liquidity US$ Fund |
Purchases |
|
|
(7,499,907) |
Ashmore SICAV 2 Global
Liquidity US$ Fund |
Sales |
|
|
9,510,654 |
Ashmore SICAV 2 Global
Liquidity US$ Fund |
Dividends |
|
|
15,593 |
During the period ended 30 June
2018, the Company engaged in 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 |
|
|
|
|
US$ |
Related Funds |
Sales |
|
|
6,137,713 |
Related Funds |
Dividends |
|
|
19,755,109 |
Ashmore SICAV 2 Global
Liquidity US$ Fund |
Dividends |
|
|
7 |
* Incentive fees were positive due to a reversal of the prior
year accruals.
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.
With effect from 1 January 2019,
the Directors’ remuneration was reduced by 25%.
During the period ended 30 June
2019, Directors’ remuneration was as follows:
Chairman: |
|
£21,240
per annum |
Chairman of the Audit
Committee: |
|
£21,240
per annum |
Independent
Directors: |
|
£20,040
per annum |
Non-Independent
Director: |
|
waived |
During the period ended 30 June
2018, 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
2019 |
31
December 2018 |
|
£
ordinary shares |
£
ordinary shares |
Nigel de la Rue |
373 |
462 |
Christopher Legge |
232 |
288 |
Richard Hotchkis |
139 |
173 |
14. Commitments
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 2019, the outstanding
commitment was €243,474 (31 December
2018: €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 2019, the outstanding
commitment was US$5,959,809
(31 December 2018: US$5,959,809).
15. Contingent Assets
The Company has submitted a claim in connection with the
settlement of a securities class action lawsuit preliminarily
approved by the US District Court for the Southern District of
New York captioned In Re Foreign
Exchange Benchmark Rates Antitrust Litigation. The inflow of
economic benefits from the settlement fund is deemed to be
probable, but not virtually certain.
16. Subsequent Events
There were no 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 |