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.
28 August 2014
Interim Results for the period ended 30 June 2014
The financial information set out below does not constitute the Company's
statutory accounts for the period ended 30 June 2014. All figures are based on
the unaudited interim report and financial statements for the period ended 30
June 2014.
The unaudited interim report and financial statements for the period ended 30
June 2014 will shortly be posted to shareholders and will also be available on
the company website: www.agol.com
Financial Highlights
30 June 2014 31 December 2013
Total Net Assets US$234,796,177 US$278,192,239
Net Asset Value per Share
US$ Shares US$5.92 US$6.26
£ Shares £5.88 £6.19
Closing-Trade Share Price
US$ Shares US$4.61 US$4.72
£ Shares £4.45 £4.40
Discount to Net Asset Value
US$ Shares (22.13)% (24.60)%
£ Shares (24.32)% (28.92)%
Chairman's Statement
The Company's Net Asset Values (NAVs) per share have fallen from US$6.26 and £
6.19 at the end of 2013 to US$5.92 and £5.88 as at 30 June 2014.
The US Dollar and Sterling share prices stood at US$4.61 and £4.45 respectively
as at 30 June 2014, a decrease of 2.3% and an increase of 1.1% respectively
against 31 December 2013 levels. As at 30 June 2014, the NAV of the Company was
US$ 234.80 million and its market capitalization was US$ 178.95 million
reflecting an average discount of 23.78% between the NAVs and the share prices.
These discounts reduced somewhat over the period.
Performance of the Company on a look through basis
The main contributors to this negative performance were Alphaland, Media.Net
(Skenzo), and Odebrecht Agroindustrial. The valuation of Alphaland was
prudently marked down by 27% in March 2014 based on a threat that the position
held by the Company (and other Ashmore Funds) could be diluted, weighted by the
probability of that event occurring. Since March 2014, Alphaland's shareholders
have reached an agreement to divide its assets between them, which may in
future lead to a positive re-evaluation of the Company's underlying position.
The Company's stake in Media.Net was marked down by 39% due to deteriorating
operating performance and limited diversification of revenues which depressed
the multiple at which its earnings are valued. The value of equity in Odebrecht
Agroindustrial was marked down to zero by the independent valuation agent given
that its net debt currently exceeds its enterprise value.
Positive contributions came from EMTEK, Al Noor Medical and MCX, whose share
prices performed well due to strong operating performance and improving equity
market sentiment. In addition, the valuations of Pacnet and Indostar were also
marked up due to strong operating performance.
In terms of cash raised during the period, Belde was sold during the reporting
period for consideration that broadly covered the legal costs incurred by the
underlying funds on this investment since its purchase in 2006. The Company
also received an earn-out from APET's sale of Arzum and additional income came
from dividends and from realised gains on currency hedging. Your Board has
decided to make another distribution to Shareholders with reference to the 30
June NAV, and the Company will continue to distribute excess cash, when
available, to Shareholders at the end of each calendar quarter.
The Board continues to receive updates from the Investment Manager on the
progress made towards investment exits. A number of exit discussions are in
advanced stages and are expected to be completed in the next few months. The
Board is confident that the target of 50% of the NAV as at 21 December 2012
being available for distribution by 31 December 2014, remains achievable. This
of course remains subject to market conditions being conducive to the sale of
the Company's holdings by the Investment Manager.
Richard Hotchkis
27 August 2014
Investment Manager's Report
Performance
As at 30 June 2014, the Net Asset Values ("NAVs") per share of the US dollar
and Sterling classes stood at US$5.92 and £5.88, representing returns of -5.43%
and -5.01% over the six months to 30 June 2014 and annualised returns of-7.16%
and -7.28% since inception for the US dollar and Sterling classes respectively.
Portfolio
During the reporting period, the Company announced that a distribution payment
of US$36,900,000 was made in January 2014. The Board has announced that a
further distribution of US$7,250,000 will be paid on 8 August 2014.
A number of the investee companies experienced a difficult trading period which
led to some significant write downs. In contrast, better operating performance
and improved market sentiment in the second quarter caused share prices of
several listed companies to rise during the reporting period..
One of the largest detractors from performance over the period was Odebrecht
Agroindustrial, the Brazilian ethanol producer. Odebrecht has been hampered
over the past two years by poor harvests and politically motivated price
controls which have hurt the company's trading. The sector outlook continues to
be very negative, such that over 60 mills have closed since 2008 and over 65%
of all ethanol producers are loss making. Petrobras, the state owned oil
company, has also suffered significant losses by "subsidising" gasoline
imports. We believe that this situation is unlikely to change until the
Brazilian elections come around, which are scheduled to take place in October
2014. The pressure on Odebrecht continues to build with the company facing a
constant need to be rescued by its group of controlling shareholders, and plans
are now being formulated to restructure the business and its debt. As a
consequence, the equity valuation of Odebrecht was marked down to zero by the
independent valuation agent, given that its net debt currently exceeds its
enterprise value.
The valuation of Alphaland, the Philippines real estate development company,
was prudently marked down by 27% in March 2014. This was based on a threat that
the positions held by the underlying funds owned by the Company could be
diluted, weighted by the probability of that event occurring. Since then,
Alphaland's shareholders have reached an agreement to split the assets between
them, which may in future lead to a positive re-valuation of the Company's
position.
The Company's stake in Media.net, an Indian IT and media company, was marked
down by 39% over the period due to deteriorating operating performance and
limited diversification of revenues, which depressed the multiple at which its
earnings are valued.
One of the better performing companies in the portfolio was EMTEK; the Jakarta
Stock Exchange listed media company, whose publically listed share price
increased by 6.3% over the period. The merger of SCTV and IDKM is now complete
and their combination has allowed EMTEK's management to consolidate its
position as the market's preferred advertising platform given its potential
audience size. EMTEK is also keen to diversify its business and as such
acquired a 30% stake in 'Plan B', an outdoor advertising company in Thailand.
The company continues to perform strongly with the development of Nexmedia,
EMTEK's pay TV service, while 2013 EBITDA was 35% higher than the performance
achieved in 2012.
MCX, the multi-commodity exchange in India, also contributed positively to
performance. At the macro level, Indian equities performed strongly in the run
up to the April 2014 election in the anticipation that Narendra Modi's BJ Party
would win. Stocks were buoyed further once it was confirmed that Modi had
indeed won an outright majority, but the real catalyst behind MCX's
performance, particularly in the second quarter, was the partial exit by
Financial Technologies India (which was a sponsor of MCX) as ordered by the
Indian regulators. Operationally, the company has seen margins fall along with
a fall in average daily turnover following the implementation of the
Commodities Transaction Tax in mid 2013 (which increased the cost of trading
three-fold).
Al Noor, the UAE hospitals business, continues to perform well. Revenues in
2013 increased 12% while Q1 2014 revenues accelerated by 24.7% year on year.
The company acquired clinics and medical centres in Dubai, Abu Dhabi and Oman,
while new medical centres have been commissioned in Bateen and Baniya, as well
as an ICAD (Industrial City of Abu Dhabi) for industrial workers.
AEI is now focused on its two remaining Greenfield projects in Peru (Fenix) and
Guatemala (Jaguar), having sold the wind farm in Chile. Fenix was fully
commissioned in April 2014, but subsequent damage to one of the turbines led to
a delay in achieving full capacity. The contractor at Jaguar has now been
replaced due to poor performance and construction activities under the new team
have been fully re-mobilised. AEI continues to sell its non-core assets.
Pacnet recently launched its new 'Pacnet Enabled Network' (PEN) infrastructure
which allows customers to "cloudify" their network requirements. In addition,
Tier 3 data centres were opened in Singapore and Chongqing bringing the total
number of racks in Pacnet's core data centres to 6000. Pacnet now has 7 data
centres and plans to own 9 by the end of 2014.
Outlook
Whilst there were limited realisations in the first half of 2014, the Manager
is at an advanced stage in realising GEMS/Utileco which is expected to complete
later this year, and exit discussions are underway for a number of the
Company's underlying investments.
Details on Top 10 Underlying Holdings (on a look through basis)
The table below shows the top 10 underlying investments. The main change to the
table since the annual report stems from the decrease in value of Media.Net
during Q2 which has resulted in the inclusion of Largo Resources. There have
also been some changes in size/ranking by NAV.
Investment Name Holding Country Business Description
EMTEK 15.93% Indonesia Listed Indonesian telecoms,
information technology and multimedia
company.
AEI 11.29% Cayman Islands Owns, operates and develops interests
in multiple power generation assets
in Latin America.
Pacnet 9.37% Singapore Asia's leading independent telecoms
infrastructure and service provider.
Alphaland 8.38% Philippines Real estate development company
focussing on underdeveloped sites.
GEMS/Utileco 8.01% Saudi Arabia Saudi Arabian integrated industrial
services and waste management
platform.
Al Noor Medical 7.50% UAE Provider of integrated healthcare
services.
Jasper 5.93% Singapore Invests in the offshore oil and gas
Investments drilling and services sector.
MCX 5.13% India India's leading commodity exchange
with over 80% market share.
Indostar 3.56% India Non-bank finance company (NBFC)
focusing on wholesale lending in
India.
Largo Resources 3.24% Brazil Brazilian provider of mining
services.
Good performance by EMTEK has resulted in Indonesia replacing Singapore at the
top of the country allocations with India remaining as a core allocation in
third place. By industry, the largest weighting has reverted back to Media, as
it was at the interim period end last year. The tables below show the top ten
country and industry allocations at the end of June 2014:
Country % of NAV Industry % of NAV
Indonesia 15.93% Media 15.93%
Singapore 15.30% Electric Integration and 12.80%
Generation
India 14.17% Real Estate 11.70%
Cayman Islands 11.29% Diversified Financial 10.12%
Services
Philippines 9.63% Telecommunications 9.37%
Saudi Arabia 8.01% Environmental Control 8.01%
United Arab Emirates 7.57% Healthcare Services 7.50%
China 4.10% Oil and Gas Services 5.93%
Brazil 3.24% Mining 3.24%
Russia 2.31% Advertising 2.13%
Elang Mahkota Teknologi EMTEK
Company: PT Elang Mahkota Teknologi
Industry: Media
Country: Indonesia
Website: www.emtek.co.id
Company Status: Public
Deal Type: Private Equity
Investment Risk: Equity
Operational update
* The company continues to perform strongly, with 2013 EBITDA 35% higher than
in 2012
* Acquired 30% of "Plan B" (outdoor advertising in Thailand)
* The merger of SCMA and IDKM (becoming SCTV/Indosiar) was completed on 1 May
2013
* The SCP interest was sold to SCMA on 28 June 2013
2014 operational and strategic priorities
* Continued development of the Nexmedia Pay TV service
* Consolidation of EMTEK's position as the preferred advertising platform in
Indonesia
* Leverage of in-house content to improve margins
* Exploitation of further synergies in SCMA/Indosiar infrastructure and
management
Key risks
* Securing a block trade at the right price levels
Exit strategy and timing
* Block trade, subject to prevailing market conditions, which have improved
since the outcome of the July elections
AEI
Company: AEI
Industry: Power Generation
Country: Regional Latin America
Website: www.aeienergy.com
Company Status: Private
Deal Type: Private Equity
Investment Risk: Equity
Operational update
* Three operating and two greenfield projects remain within the business
* Arrayan, the wind project in Chile, was sold last quarter, with the
remaining two greenfield projects (Jaguar and Fenix) targeted for sale in
the next 12 months
* Greenfields:
* Fenix part was commissioned in Q1 and is now generating cashflows. Full
commissioning has been delayed to Q4 2014 due to a faulty transformer.
Refinancing is currently being planned, which will be followed by exit
planning
* Jaguar's EPC (engineering, procurement and construction) contractor (CMNC)
has been replaced and construction activities are proceeding at full speed
with a target commercial operation date (COD) of Q2 2015. Arbitration
proceedings are ongoing with the previous EPC contractor
* The Arrayan exit was completed during the second quarter of 2014
* HQ: Circa 60% of the remaining HQ staff will be cut in FY14 to reflect
continued downsizing
Key risks
* Jaguar project completion on time and on budget
* CMNC arbitration
* Retention of key people to support the wind down
2014 operational and strategic priorities
* On time and on budget commissioning of the greenfield projects
* Disposal planning for all assets
* HQ cost reduction
Exit strategy and timing
* Private sale of the assets either individually or in clusters
Pacnet
Company: Pacnet
Industry: Telecommunications
Country: Hong Kong and Singapore
Website: www.pacnet.com
Company Status: Private
Deal Type: Private Equity
Investment Risk: Debt
Operational update
* The exit from low margin products and the cost reduction initiative have
resulted in a 32% year-on-year increase in EBITDA and a 763bps improvement
in the EBITDA margin
* Capex investment has been made in the sub-sea network with over 70% of the
network now transmitting data on 100g coherent technology
* Pacnet is pioneering Network as a Service (NaaS), the ability to provision
managed network services using software defined networking technology, with
the launch of Pacnet Enabled Networks (PEN), which allows customers to
"cloudify" their network requirements
* New tier 3 data centres (DCs) were opened in Singapore and Chongqing
bringing the total number of racks to 6000 in Pacnet's core DCs. Pacnet now
has 7 owned DCs
2014 operational and strategic initiatives
* Launch further versions of PEN for IP-VPN and wavelength managed network
products, meaning products generating over 70% of revenues can be
provisioned using the PEN platform
* Explore the sale of under-utilised dark fibre on premium sub-sea routes
* Open a new data centre in Tianjin, which will have capacity for up to 2000
racks. The company has also secured a lease to build a new greenfield DC in
Shanghai. By the end of 2014, Pacnet plans to have 9 owned DCs
Key risks
* Price declines and churn on network services
* Slower fill rates in data centres
Exit strategy and timing
* Strategic sale (2014) or IPO (H1 2015)
Alphaland
Company: Alphaland Corporation
Industry: Real Estate Development
Country: Philippines
Website: www.alphaland.com.ph
Company Status: Public
Deal Type: Private Equity
Investment Risk: Equity
Exit strategy and timing
* Agreement has been reached with Alphaland Corporation and its local
Filipino shareholder group to split the assets. Bedfordbury Development
Corporation (BDC), a Philippines company in which the Ashmore Funds are
indirect shareholders, will acquire the main commercial asset, Alphaland
Tower, and the two main landbanks (Alphaland Bay City and Boracay Gateway)
* Closing is subject to regulatory approvals which we expect in Q3 2014
* Ashmore staff are assisting BDC on closing the transaction and preparing
the assets for active management
GEMS / Utileco
Company: GEMS/Utileco
Industry: Waste Management
Country: Saudi Arabia
Website: www.gems-ksa.com
www.utileco.com
Company Status: Private
Deal Type: Private Equity
Investment Risk: Equity
Operational update
* 2013 revenues were US$72m and 2013 EBITDA doubled to US$25m vs. prior year,
reflecting steady growth in waste management and the benefit of new
business lines including industrial services, engineering services and oil
trading
* H1 sales were US$52m, the EBITDA margin was 35%
2014 operational and strategic priorities
* GEMS has developed a prototype facility for the processing of highly toxic
waste from Aramco, SABIC affiliates and others, which is currently sent to
the USA for processing. Contracts to receive this high value waste have
been signed and revenues are expected in Q2 2014. Full scale facilities are
under construction in Dammam and Joffah
Key risks
* Construction delays
Exit strategy and timing
* One of two potential sale and purchase agreements (SPAs) for the sale of
the company has been signed, subject to condition precedents (CPs), and the
provision of reps and warranties
Al Noor Medical Company
Company: Al Noor Medical Company
Industry: Healthcare
Country: United Arab Emirates
Website: www.alnoorhospital.com
Company Status: Private
Deal Type: Private Equity
Investment Risk: Equity
Operational update
* Listed in June 2013
* 2013 revenues of US$365m were up 12% on 2012. Q1 sales were US$112m (+24.7%
vs. Q1 2012)
* The EBITDA margin was 22.7% and the US$83m EBITDA represented 17% growth
compared with prior year
* Cash in hand was US$63m. The US$82m working capital facility remains
available and unused
* Acquired Manchester Clinic, Dubai; Al Madar Medical Centre, Abu Dhabi and a
further 3 medical centres in Abu Dhabi, Al Ain and Oman during 2013. In
2014 medical centres have been commissioned in Bateen and Baniya, as well
as an ICAD, for industrial workers
* A further 32 physicians have been recruited, to bring the total to 502
2014 operational and strategic priorities
* Upgrade to Khalifa Street via the lease and fit-out of additional space
* Construction in Al Ain, which is now underway
* Complete the acquisition of the Gulf International Centre in Abu Dhabi
* Continued growth in UAE/Oman
Key risks
* Significant private shareholdings were recently unlocked and may be a drag
on the market in Al Noor if sold inelegantly
Exit strategy and timing
* The Al Noor shares underlying the Company's investment are now unlocked,
but are subject to the customary closed-period restrictions and to the
phased unwinding of the investment vehicle over the coming 12 months
Jasper Investments
Company: Jasper Investments Limited
Industry: Oil Field Services
Country: Singapore
Website: www.jasperinvestments.com
Company Status: Public
Deal Type: Private Equity
Investment Risk: Equity
Operational update
* Jasper Explorer finished its drilling contract at the end of March and is
currently moored off the African coast. Initial discussions are ongoing for
further contract work, however there is a limited market for a ship with
Explorer's specifications. The crew has been reduced to minimal levels
* Jasper Cosmopolitan, a 500 bed accommodation vessel conversion, was
completed successfully on time and on budget
* HQ and all central costs were decreased further to minimal levels
2014 operational and strategic priorities
* Negotiate a drilling contract for Explorer despite very difficult market
conditions
* Extend yard financing, and proceed to lease or sell Cosmopolitan
* Continue to focus on reducing costs without impacting operational risk
Key risks
* Failure to sell Explorer
* Failure to lease and/or sell Cosmopolitan
* Extension of yard financing for Cosmopolitan
* The business has limited cash and therefore time to secure the above
Exit strategy and timing
Sale of the two ships in a block or separately
Multi Commodity Exchange of India Limited (MCX)
Company: Multi Commodity Exchange of India
Industry: Banking and Finance
Country: India
Website: www.mcxindia.com
Company Status: Public
Deal Type: Private Equity
Investment Risk: Equity
Operational update
* MCX has an 85% market share of the commodities market
* Average daily turnover and revenues both decreased after the implementation
of the Commodities Transaction Tax (CTT) in mid 2013, which increased the
cost of trading three-fold
* EBITDA margins were hit due to the fall in revenues and a slower cut to
overheads
* The promoters of the company were implicated in a regulatory matter
unconnected with the operations of MCX. Within MCX this resulted in the
appointment of a new CEO and CFO
* The promoters have started the process of exiting their stakes in MCX to
comply with the order of the Forward Markets Commission (FMC) (the
Regulator)
2014 operational and strategic priorities
* Renegotiate the technology services contract, which will reduce costs and
improve the profitability of the company
* Enhance product portfolio by adding new commodities
* Expand geographically and improve penetration though international
strategic tie ups, investor awareness drives and by signing up new brokers
Key risks
* Increased regulatory oversight by the FMC
* Timing uncertainty with regard to the enactment of the Forward Contracts
Regulations Act, which will bring in a new set of investors and allow MCX
to start offering "options" as a product
Exit strategy and timing
* Sale in the public market
* Q3/Q4 2014
Indostar
Company: Indostar Capital Finance
Industry: Banking and Financial Services
Country: India
Website: www.indostarcapital.com
Company Status: Private
Deal Type: Private Equity
Investment Risk: Equity
Operational update
* The management team is focussed on improving business performance amidst a
challenging lending environment, with revenues during the last quarter
tracking budget
* The Company completed an on-budget borrowing programme, where its leverage
(D/E) increased from 0.92x in FY13 to 1.70x in June 2014
* Indostar is currently well placed from both an asset portfolio and a
liquidity position
2014 operational and strategic priorities
* Continue to build the loan book with an increased focus on origination and
higher fee income to increase the return on equity
* Increase leverage while also reducing the borrowing cost by diversifying
sources and improving the debt rating
* Diversify income streams through the launch of an Asset Management business
Key risks
* Transacting a suitable merger to enable a full exit (including regulatory
approval)
* Maintaining the quality and growth of the loan book
Exit strategy and timing
* M&A, strategic stake sale
* Q4 2014/2015
Largo Resources
Company: Largo Resources
Industry: Metals and Mining
Country: Brazil
Website: www.largoresources.com
Company Status: Public
Deal Type: Private Equity
Investment Risk: Equity
Operational/corporate update
* This deal was a private placement in December 2013 for US$17m
* All equipment has now arrived on site. Kiln parts were delayed during
manufacturing causing a significant delay to production (almost six months)
versus expectations this time last year. Cost over-runs are currently circa
12%
* As of 22 July 2014 production is expected imminently
2014 operational and strategic priorities
* Establish production, and ramp up over the next 12 months
* Year 1 target is 5,500 tonnes (the design capacity is 9,400 tonnes of V2O5
concentrate, in the initial phase)
Key risks
* Commissioning delays may cause additional funding gaps
* Largo is in dispute with GTP concerning a contract which Largo entered into
for the supply of tungsten from Currais Novos. Currais Novos remains shut
due to production problems, not least due to a lack of water
Exit strategy and timing
* Re-listing on the main TSX exchange in 2014, and/or a strategic sale in
2015
Ashmore Investment Management Limited
Investment Manager
27 August 2014
Board Members
As at 30 June 2014, the Board consisted of four non-executive Directors. The
Directors are responsible for the determination of the investment policy of
Ashmore Global Opportunities Limited (the "Company" or "AGOL") and have overall
responsibility for the Company's activities. As required by the AIC Code on
Corporate Governance (the "Code"), the majority of the Board of Directors are
independent of the Investment Manager. In preparing this Annual Report, the
independence of each Director has been considered.
Richard Hotchkis,Independent Chairman, (Guernsey resident) appointed 18 April
2011
Richard Hotchkis has 38 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. Richard is currently a director of a number of funds, including
Alternative Investment Strategies Limited and Advance Frontier Markets Fund
Limited.
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, including at BH Macro Limited where he is Senior Independent Director
and chairs the Audit Committee.
Graeme Dell, Non-Independent Director (employee of the Investment Manager), (UK
resident) appointed 5 March 2008 and resigned 16 January 2014.
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
Alternative Investment Strategies Limited London
Advance Frontier Markets Fund Limited AIM and CISE
Steve Hicks Nil
Nigel de la Rue Nil
Christopher Legge
Baring Vostok Investments PCC Limited CISE
BH Macro Limited London, Bermuda and Dubai
John Laing Environmental Assets Group Limited London
Sherborne Investors (Guernsey) B Limited London
Third Point Offshore Investors Limited London
TwentyFour Select Monthly Income Fund Limited London
Directors' Responsibility Statement
We confirm that to the best of our knowledge:
* the condensed set of financial statements in the half-yearly financial
report has been prepared in accordance with IAS 34 Interim Financial
Reporting; and
* the half-yearly 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 2014; 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 27 August 2014
Richard Hotchkis Christopher Legge
Chairman Chairman of the Audit Committee
Independent Review Report to Ashmore Global Opportunities Limited
Introduction
We have been engaged by Ashmore Global Opportunities Limited (the "Company") to
review the condensed set of financial statements in the half-yearly financial
report for the six months ended 30 June 2014, which comprise the Unaudited
Condensed Statement of Financial Position, the Unaudited Condensed Statement of
Comprehensive Income, the Unaudited Condensed Statement of Changes in Equity,
the Unaudited Condensed Statement of Cash Flows and the related explanatory
notes. We have read the other information contained in the half-yearly
financial report and considered whether it contains any apparent misstatements
or material inconsistencies with the information in the condensed set of
financial statements.
This report is made solely to the Company in accordance with the terms of our
engagement to assist the Company in meeting the requirements of the Disclosure
and Transparency Rules ("the DTR") of the UK's Financial Conduct Authority
("the UK FCA"). Our review has been undertaken so that we might state to the
Company those matters we are required to state to it in this report and for no
other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company for our review work, for
this report, or for the conclusions we have reached.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the Directors. The Directors are responsible for preparing the
half-yearly financial report in accordance with the DTR of the UK FCA. The
annual financial statements are prepared in accordance with IFRSs. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with IAS 34 Interim Financial Reporting.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.
Scope of review
We conducted our review in accordance with the International Standard on Review
Engagements (UK and Ireland) 2410 Review of Interim Financial Information
Performed by the Independent Auditor of the Entity issued by the Auditing
Practices Board for use in the UK. A review of interim financial information
consists of making enquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review procedures. A
review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK and Ireland) and consequently does
not enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express an
audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 June 2014 is not prepared, in all
material respects, in accordance with IAS 34 and the DTR of the UK FCA.
Neale D Jehan
For and on behalf of KPMG Channel Islands Limited
Chartered Accountants and Recognised Auditors
20 New Street, St Peter Port, Guernsey, GY1 4AN
27 August 2014
Unaudited Schedule of Investments
As at 30 June 2014
Valuation in % of NAV
US$
Ashmore Global Special Situations Fund 4 LP 91,423,446 38.94
Ashmore Asian Recovery Fund 47,766,647 20.34
Ashmore Global Special Situations Fund 5 LP 28,833,316 12.28
AEI Inc - Equity 15,778,617 6.72
Ashmore Global Special Situations Fund 3 LP 11,575,429 4.93
AA Development Capital India Fund LP 7,142,194 3.04
Aginyx Ordinary Shares 7,085,797 3.02
Everbright Ashmore China Real Estate Fund LP 5,489,359 2.34
VTBC Ashmore Real Estate Partners 1 LP 5,239,040 2.23
Ashmore Asian Special Opportunities Fund 3,433,544 1.46
Limited
Ashmore Global Special Situations Fund 2 1,179,147 0.50
Limited
Ashmore Private Equity Turkey Fund 1 LP 64,639 0.03
Renovavel Investments BV New PIK/PPN - -
Total investments at fair value 225,011,175 95.83
Net other current assets 9,785,002 4.17
Total net assets 234,796,177 100.00
Unaudited Condensed Statement of Financial Position
As at 30 June 2014
30 June 2014 31 December 2013
Note US$ US$
Assets
Cash and cash equivalents 10,232,899 41,013,703
Other financial assets 4a 25,424 9,895
Financial assets at fair value through 3 227,522,726 241,385,286
profit or loss
Total assets 237,781,049 282,408,884
Equity
Capital and reserves attributable to
equity holders of the Company
Special reserve 543,768,937 579,014,573
Retained earnings (308,972,760) (300,822,334)
Total equity 234,796,177 278,192,239
Liabilities
Current liabilities
Other financial liabilities 4b 2,984,872 3,693,957
Financial liabilities at fair value 3 - 522,688
through profit or loss
Total liabilities 2,984,872 4,216,645
Total equity and liabilities 237,781,049 282,408,884
Net asset values
Net assets per $ share 7 US$5.92 US$6.26
Net assets per £ share 7 £5.88 £6.00
The unaudited condensed interim financial statements were approved by the Board
of Directors on 27 August 2014, and were signed on its behalf by:
Richard Hotchkis Christopher Legge
Chairman Chairman of the Audit Committee
The notes form an integral part of these financial statements.
Unaudited Condensed Statement of Comprehensive Income
For the six months ended 30 June 2014
Six months Six months
ended 30 June ended 30 June
2014 2013
Note US$ US$
Interest income 65 4,489
Dividend income 1,227,097 462,236
Net foreign currency (loss) (189,997) (1,327,204)
Other net changes in the fair value of 3 (6,925,485) (28,508,285)
financial assets and liabilities at fair
value through profit or loss
Total net (loss) (5,888,320) (29,368,764)
Expenses
Net investment management fees (1,900,316) (4,950,999)
Incentive fees 138,519 3,304,814
Directors' remuneration (113,583) (125,260)
Fund administration fees (21,102) (40,272)
Custody fees (10,551) (24,604)
Other operating expenses (355,073) (831,670)
Total operating expenses (2,262,106) (2,667,991)
Operating (loss) for the period (8,150,426) (32,036,755)
Other comprehensive income - -
Total comprehensive (loss) for the period (8,150,426) (32,036,755)
Earnings per share
Basic and diluted (loss) per US$ share 8 US$(0.34) US$(0.24)
Basic and diluted (loss) per £ share 8 US$(0.22) US$(1.23)
All items derive from continuing activities.
The notes form an integral part of these financial statements.
Unaudited Condensed Statement of Changes in Equity
For the six months ended 30 June 2014
Special Retained
Note reserve earnings Total
US$ US$ US$
As at 1 January 2014 579,014,573 (300,822,334) 278,192,239
Total comprehensive loss for - (8,150,426) (8,150,426)
the period
Capital distribution 6 (35,245,636) - (35,245,636)
As at 30 June 2014 543,768,937 (308,972,760) 234,796,177
As at 1 January 2013 705,125,322 (225,091,053) 480,034,269
Total comprehensive loss for - (32,036,755) (32,036,755)
the period
Capital distribution 6 (88,799,141) - (88,799,141)
As at 30 June 2013 616,326,181 (257,127,808) 359,198,373
The notes form an integral part of these financial statements.
Unaudited Condensed Statement of Cash Flows*
For the six months ended 30 June 2014
Six months Six months
ended 30 June ended 30 June
2014 2013
US$ US$
Cash flows from operating activities
Net bank interest received 65 4,489
Dividends received 1,227,097 462,236
Operating expenses paid (2,986,720) (8,029,478)
Net cash used in operating activities (1,759,558) (7,562,753)
Cash flows from investing activities
Sale of investments - 211,048,914
Purchase of investments - (101,112,589)
Net cash flows on derivative instruments and 6,224,390 (15,244,147)
foreign exchange
Net cash inflow from investing activities 6,224,390 94,692,178
Cash flows from financing activities
Capital distributions (35,245,636) (88,799,141)
Net cash used in financing activities (35,245,636) (88,799,141)
Net decrease in cash and cash equivalents (30,780,804) (1,669,716)
Reconciliation of net cash flow to movement in cash and bank
balances
Cash and cash equivalents at the beginning of 41,013,703 28,141,250
the period
Decrease in cash and bank balances (30,780,804) (1,669,716)
Cash and cash equivalents at the end of the 10,232,899 26,471,534
period
*The preparation of the cash flow statement has changed from the indirect
method to the direct method with the approval of the Directors.
The notes form an integral part of these financial statements.
Notes to the Unaudited Condensed Interim Financial Statements
1. Basis of Preparation
a) Statement of Compliance
The unaudited condensed interim financial statements have been prepared in
accordance with IAS 34 Interim Financial Reporting on a going concern basis,
despite the managed wind-down of the Company which was approved by the
Shareholders during the Extraordinary General Meeting of 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
therefore consider that the Company has adequate resources to continue in
operational existence for the foreseeable future and after due consideration
believe it is appropriate to adopt the going concern basis in preparing the
financial statements, despite the managed wind-down of the Company over the
next few years.
These unaudited interim financial statements do not include all of the
information required for the full annual financial statements, and should be
read in conjunction with the audited financial statements of the Company for
the year ended 31 December 2013. Selected explanatory notes are included to
explain events and transactions that are significant to have an understanding
of 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 27 August 2014.
b) Judgements and Estimates
Preparing the condensed interim financial statements requires management to
make 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.
In preparing these unaudited condensed interim financial statements,
significant judgements made by management 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 2013.
2. Summary of Significant Accounting Policies
The unaudited condensed interim financial statements were prepared on the going
concern basis, despite the managed wind-down of the Company which was approved
by the Shareholders during the Extraordinary General Meeting of 13 March 2013.
The Board has concluded that currently the managed wind-down of the Company has
no significant impact on the valuation of the Company's investments.
Except for the changes below, the accounting policies applied in these
unaudited condensed interim financial statements are the same as those applied
in the Company's financial statements as at and for the year ended 31 December
2013.
i. Offsetting Financial Assets and Financial Liabilities (amendments to IAS
32)
The Company has adopted the amendments to IAS 32 on offsetting. These
amendments clarify the offsetting criteria in IAS 32 by explaining when an
entity currently has a legally enforceable right to set-off and when gross
settlement is considered to be equivalent to net settlement.
The Company does not hold any financial assets or financial liabilities that
are subject to Master Netting agreements or similar agreements and, as such,
has not presented any financial assets or liabilities net on the Unaudited
Condensed Statement of Financial Position. There were no financial assets or
financial liabilities that are offset in the Unaudited Condensed Statement of
Financial Position.
ii. IFRS 12 Disclosure of Interests in Other Entities
As a result of the application of IFRS 12, Disclosure of Interests in Other
Entities, the Company has made disclosures about its involvement with
unconsolidated structured entities (see Note 11).
The Company has concluded that un-listed funds in which it invests, but does
not consolidate, meet the definition of structured entities for the following
reasons:
* the voting rights attached to the funds are not considered to be dominant
rights as the holder is unable to control the funds. The rights relate only
to influence over administrative tasks;
* each fund's activities are restricted by its prospectus; and
* the funds have narrowed and well-defined objectives to provide investment
opportunities to investors.
iii. Investment Entities (Amendments to IFRS 10, IFRS 12, and IAS 27)
The Company has adopted Investment Entities (Amendments to IFRS 10, IFRS 12,
and IAS 27)and the management concluded that the Company meets the definition
of an investment entity. All investments of the Company in underlying funds are
measured at fair value through profit and loss.
3. Financial Assets and Liabilities at Fair Value through Profit or Loss
30 June 2014 31 December 2013
US$ US$
Financial assets held for trading:
- Derivative financial assets 2,511,551 4,072,451
Total financial assets held for trading 2,511,551 4,072,451
Designated at fair value through profit or
loss at inception:
- Equity investments 225,011,175 234,666,774
- Debt investments - 2,646,061
Total designated at fair value through 225,011,175 237,312,835
profit or loss at inception
Total financial assets at fair value 227,522,726 241,385,286
through profit or loss
During the period ended 30 June 2014, no acquisitions or disposals of
investments were made.There were no significant changes to the Company's direct
equity holdings and debt investments other than the valuation movements.
As at 30 June 2014, derivative financial assets were comprised of forward
foreign currency contracts as follows:
Currency Amount Currency Amount Maturity Unrealised
Bought Bought Sold Sold Date gain
GBP 93,281,103 US$ 156,930,531 15/08/ 2,511,551
2014
Derivative financial assets 2,511,551
As at 31 December 2013, derivative financial assets were comprised of forward
foreign currency contracts as follows:
Currency Amount Currency Amount Maturity Unrealised
Bought Bought Sold Sold Date gain
BRL 31,607,567 US$ 13,210,000 04/02/ 76,223
2014
GBP 120,308,128 US$ 196,194,284 17/01/ 3,047,441
2014
US$ 15,988,451 BRL 35,778,956 04/02/ 948,787
2014
Derivative financial assets 4,072,451
30 June 2014 31 December 2013
US$ US$
Financial liabilities held for trading:
- Derivative financial liabilities - (522,688)
Total financial liabilities held for - (522,688)
trading
As at 31 December 2013, derivative financial liabilities were comprised of
forward foreign currency contracts as follows:
Currency Amount Currency Amount Maturity Unrealised
Bought Bought Sold Sold Date loss
US$ 5,010,012 EUR 3,693,588 21/01/2014 (79,524)
US$ 23,404,608 GBP 14,400,000 17/01/2014 (443,164)
Derivative financial liabilities (522,688)
As at 30 June 2014, there were no derivative financial liabilities in the
Company.
30 June 2014 31 December 2013
US$ US$
Other net changes in fair value through
profit or loss:
- Realised 6,414,387 (16,964,482)
- Change in unrealised (13,339,872) (89,849,284)
Total (losses) (6,925,485) (106,813,766)
Other net changes in fair value on assets 5,376,175 (155,505)
held for trading
Other net changes in fair value on assets (12,301,660) (106,658,261)
designated at fair value through profit or
loss
Total net (losses) (6,925,485) (106,813,766)
4. Other Financial Assets and Liabilities
a. Other financial assets relate to prepaid expenses and were comprised of the
following:
30 June 2014 31 December 2013
US$ US$
Prepaid Directors' 25,424 9,895
insurance
25,424 9,895
b. Other financial liabilities
Other financial liabilities relate to accounts payable and accrued expenses,
and comprise the following:
30 June 2014 31 December 2013
US$ US$
Management fee payable (net) 144,647 258,918
Incentive fee payable 1,779,391 2,600,241
Other accruals 1,060,834 834,798
2,984,872 3,693,957
The net management fee payable includes a rebate of US$629,764 (31 December
2013: US$665,598) due from the Investment Manager in accordance with the
Investment Management Agreement.
5. 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 2013.
b) Carrying amounts versus fair values
As at 30 June 2014 the carrying values of financial assets and liabilities
approximate their fair values and are presented in the Unaudited Condensed
Statement of Financial Position.
c) Financial instruments carried at fair value - fair value hierarchy
The Company classifies fair value measurements using a fair value hierarchy
that reflects the significance of the
inputs used in making the measurements. The fair value hierarchy has the
following levels:
• Level 1: Quoted prices (unadjusted) in an active market for identical
instruments.
• Level 2: Valuation techniques based on observable inputs, either directly
(i.e. as prices) or indirectly (i.e. derived from prices). This category
includes instruments valued using: quoted prices in active markets for similar
instruments: quoted prices for identical or similar instruments in markets that
are considered less than active; or other valuation techniques for which all
significant inputs are directly or indirectly observable from market data.
• Level 3: Valuation techniques using significant unobservable inputs. This
category includes all instruments for which the valuation technique includes
inputs not based on observable data and the unobservable inputs have a
significant effect on the instrument's valuation. This category includes
instruments that are valued based on quoted prices for similar instruments for
which significant unobservable adjustments or assumptions are required to
reflect differences between the instruments.
The level in the fair value hierarchy within which the fair value measurement
is categorised in its entirety is determined on the basis of the lowest level
input that is significant to the fair value measurement in its entirety. For
this purpose, the significance of an input is assessed against the fair value
measurement in its entirety. If a fair value measurement uses observable inputs
that require significant adjustment based on unobservable inputs, that
measurement is a level 3 measurement. Assessing the significance of a
particular input to the fair value measurement in its entirety requires
judgement, considering factors specific to the asset or liability.
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.
There were no transfers to or from level 3 during the period.
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 at 30 June 2014:
Level 1 Level 2 Level 3 Total
balance
Financial assets at fair value
through profit and loss
Financial assets held for trading:
- Derivative financial assets - 2,511,551 - 2,511,551
Financial assets designated at
fair value through profit or loss
at inception:
- Equity investments 7,085,797 - 217,925,378 225,011,175
- Debt investments - - - -
Total 7,085,797 2,511,551 217,925,378 227,522,726
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 at 31 December 2013:
Level 1 Level 2 Level 3 Total
balance
Financial assets at fair value
through profit and loss
Financial assets held for
trading:
- Derivative financial assets - 4,072,451 - 4,072,451
Financial assets designated at
fair value through profit or
loss at inception:
- Equity investments 5,371,650 - 229,295,124 234,666,774
- Debt investments - - 2,646,061 2,646,061
Total 5,371,650 4,072,451 231,941,185 241,385,286
Financial liabilities at fair value through profit and
loss
Financial liabilities held for
trading:
- Derivative financial - 522,688 - 522,688
liabilities
Total - 522,688 - 522,688
Level 1 assets include listed Aginyx Ordinary Shares (MCX).
Level 2 assets include forward currency contracts that are calculated
internally using observable data.
Level 3 assets include all unquoted funds, limited partnerships and unquoted
investments. Investments in unquoted funds and limited partnerships are valued
on the basis of the latest Net Asset Value after adjustment(s) resulting from
the Board of Directors' evaluation of whether such Net Asset Value is
representative of fair value under IFRS 13. Unquoted funds are 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 2014 by class of financial instrument.
Equity securities Debt Total
securities
Opening balance 1 January 2014 229,295,124 2,646,061 231,941,185
Gains and losses recognised in profit and (11,369,746) (2,646,061) (14,015,807)
loss *
Closing balance 30 June 2014 217,925,378 - 217,925,378
* Gains and losses recognised in profit and loss include unrealised results of
US$(12,301,660) on existing level 3 instruments as at 30 June 2014.
Total gains and losses included in the Unaudited Condensed Statement of
Comprehensive Income are presented in `Other net changes in the fair value of
financial assets and financial liabilities at fair value through profit or
loss'.
As at 30 June 2014 the carrying values of other financial assets and
liabilities approximate their fair values.
Valuation methodology of level 3 assets held directly by the Company and
indirectly by the Company through its investments in the underlying Ashmore
Funds
The Pricing Methodology and Valuation Committee (PMVC) which has been
authorised as an Approved Person to provide valuations to the Administrator,
operates and meets to consider the methods for pricing hard to value
investments where a reliable pricing source is not available, if an asset does
not trade regularly, or in the case of a significant event (such as a major
event and market volatility outside of local market hours). These assets, which
are classified within level 3, may include all asset types but are frequently
`Special Situations' style investments, typically incorporating distressed,
illiquid or private equity assets.
For these hard to value investments, the methodology and models used to
determine fair value were created in accordance with the International Private
Equity and Venture Capital Valuation (IPEV) guidelines by experienced personnel
at an independent third party valuation specialist. The valuation is then
subject to review, amendment if necessary, then approval, firstly by the PMVC,
and then by the Board of Directors of the Company.
Valuation techniques used by the third party valuation specialists include the
market approach, the income approach or the cost approach for which sufficient
and reliable data is available. Within level 3, the use of the market approach
generally consists of using comparable market transactions, while 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.
The main inputs used by the third party valuation specialist in estimating the
value of level 3 investments 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
changes in financial ratios or cash flows. Level 3 investments may also be
adjusted to reflect illiquidity and/or non-transferability.
The following table shows the valuation technique and the key unobservable
inputs used in the determination of the fair value of level 3 investments:
Valuation Significant unobservable inputs Inter- relationship between
technique significant unobservable
inputs and fair value
measurement
As described - Forecast annual revenue The estimated fair value
above growth rate would increase if:
- Forecast EBITDA margin - the annual revenue growth
rate was higher;
- Risk adjusted discount rate - the EBITDA margin was
higher;
- Market multiples - the risk-adjusted discount
rate was lower; or
- the multiples were lower
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 would result in an
increase/(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.
6. Capital and Reserves
The following share conversions took place during the period ended 30 June
2014:
Transfers from Transfers to Number of Number of
shares to shares to
switch out switch in
£ shares US$ shares 547,946 910,146
On 16 January 2014 the Company announced a return of capital to shareholders of
78.84 pence and 79.71 US cents per £ and US$ share held respectively, by way of
a compulsory partial redemption of shares, with a redemption date of 31 January
2014 using the 31 December 2013 Net Asset Value.
The redemption was effected pro-rata to holdings of shares on the register at
the close of business on the redemption record date which was 24 January 2014.
As a result 12.83 per cent of the Company's issued share capital was redeemed.
Fractions of shares were not redeemed and the number of shares redeemed for
each shareholder was rounded down to the nearest whole number of shares.
The cash utilised to effect the partial redemption of shares was comprised of
monies from the realisation of the Company's investments received up to and
including 31 December 2013, pursuant to the winding down of the Company.
Number of Consideration
ordinary shares in US$
redeemed
US$ Share 1,983,733 12,324,761
£ Share 2,269,536 22,920,875
4,253,269 35,245,636
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
registration document published by the Company on 6 November 2007 (the
"Prospectus")) is as follows:
US Dollar Shares: 1.0000
Sterling 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.
7. Net Asset Value
The Net Asset Value of each US$ and £ share is determined by dividing the total
net assets of the Company attributed to the US$ and £ share classes by the
number of US$ and £ shares in issue respectively at the period end as follows:
As at 30 June Net Shares in Net Net
2014 assets issue assets assets
attributable to per share per share
each share in in
class in US$ local
US$ currency
US$ Share 85,221,871 14,388,415 5.92 5.92
£ Share 149,574,306 14,872,530 10.06 5.88
234,796,177
As at 31 December Net Shares in Net Net
2014 assets issue assets assets
attributable to per share per share
each share in in
class in US$ local
US$ currency
US$ Share 96,788,419 15,462,002 6.26 6.26
£ Share 181,403,820 17,690,012 10.25 6.19
278,192,239
The allocation of the Company's Net Asset Value between share classes is
further described in the Company's Prospectus.
8. 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 2014 was
as follows:
US$ Share £ Share
(Loss) per share class (US$) (4,746,356) (3,404,069)
Weighted average number of 14,081,834 15,645,812
shares
EPS per share class (US$) (0.34) (0.22)
Issued shares at the beginning 15,462,002 17,690,012
of the period
Effect on the weighted average number of
shares:
Conversion of shares 266,330 (160,485)
Compulsory redemption of shares (1,646,498) (1,883,715)
Weighted average number of 14,081,834 15,645,812
shares
There were no dilutive instruments in issue during the period
The loss attributable to each share class for the period ended 30 June 2013 was
as follows:
US$ Share £ Share
(Loss) per share class (US$) (5,077,479) (26,959,276)
Weighted average number of 21,564,108 21,879,928
shares
EPS per share class (US$) (0.24) (1.23)
Issued shares at the beginning 23,834,219 23,052,010
of the period
Effect on the weighted average number of
shares:
Conversion of shares (659,967) 427,366
Compulsory redemption of shares (1,610,144) (1,599,448)
Weighted average number of 21,564,108 21,879,928
shares
There were no dilutive instruments in issue during the period.
9. Segmental Reporting
Although the Company has two classes of shares 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.
10. 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.
11. 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 Fund
Investment funds To manage assets on behalf Investments in units
of third party investors issued by the funds
and generate fees for the
investment manager.
These vehicles are
financed through the issue
of units to investors.
The table below sets out interests held by the Company in unconsolidated
structured entities. The maximum exposure to loss is the carrying amount of the
financial assets held.
Investment in unlisted Number of Total net Carrying amount
investment funds investee funds assets included in
"Financial assets
at fair value
through profit or
loss"
Special Situation Private 8 1,167,325,685 191,418,362
Equity Funds
Real Estate Funds 2 118,277,497 10,728,399
During the period, the Company did not provide financial support to
unconsolidated structures entities and has no intention of providing financial
or other support.
12. 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 Ashmore Investment Management
Limited.
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 2014, the Company had the following related
party transactions:
Income/ Receivable/
(Expense) (Payable)
Related Party Nature US$ US$
Ashmore Investment Management Management fees (1,900,316) (144,647)
Limited (net)
Ashmore Investment Management Incentive fees 138,519 (1,779,391)
Limited
Ashmore Investment Management Administration (79,430) (172,334)
Limited fees
Board of Directors Directors' fees (113,583) (56,108)
Investment
Activity
US$
Related Funds Dividends 1,227,097
During the period ended 30 June 2013, the Company engaged in the following
related party transactions:
Income/ Receivable/
(Expense) (Payable)
Related Party Nature US$ US$
Ashmore Investment Management Management fees (4,950,999) (138,648)
Limited (net)
Ashmore Investment Management Incentive fees 3,304,814 (837,862)
Limited
Ashmore Investment Management Administration (74,058) (45,076)
Limited fees
Board of Directors Directors' fees (125,260) -
Investment
Activity
US$
Related Funds Purchases (101,112,589)
Related Funds Sales 212,526,409
Related Funds Dividends 462,236
Related Funds are other Funds managed by Ashmore Investment Management Limited.
During the period ended 30 June 2014, Directors' remuneration was as follows:
Chairman: £31,500 per annum
Chairman of the Audit Committee: £31,500 per annum
Independent Directors: £29,700 per annum
Non-Independent Director: waived
The Directors had the following beneficial interest in the Company:
30 June 2014 31 December 2013
£ Ordinary Shares £ Ordinary Shares
Nigel de la Rue 2,514 2,883
Christopher Legge 1,571 1,802
Richard Hotchkis 944 1,082
13. Commitments
During the period 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 2014 the outstanding
commitment was US$808,727 (31 December 2013: US$808,727).
During the period 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 2014 the outstanding commitment was €243,474 (31 December 2013: €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 2014, the outstanding commitment was
US$6,261,340 (31 December 2013: US$6,261,340).
14. Subsequent Events
Compulsory redemption of shares
On 21 July2014, the Company announced that it would return 17.44 pence and
17.56 US cents per GBP and US$ share respectively, on a payment date of 8
August 2014 using the 30 June 2014 Net Asset Value.As a result, 448,555 GBP
shares and 433,810 US$ shares were redeemed.The gross capital distribution
amounted to US$7.25 million (gross of fees, including buyback fees and
distribution costs).
The Alternative Investment Fund Managers Directive ("AIFMD")
Ashmore Investment Advisors Limited ("AIAL") was authorised as an Alternative
Investment Fund Manager ("AIFM") by the Financial Conduct Authority ("FCA") on
18 July 2014. The Board have appointed AIAL as the Company's AIFM and Ashmore
Investment Management Limited has agreed to novate its rights and obligations
under the 05 November 2007 Investment Management Agreement ("IMA") to AIAL. The
IMA has been amended; to reflect these changes; to comply with regulatory
obligations; and to provide an appropriate balance between the Board's
independence from the AIFM, its control over the Company and the Company's
investment policies.
The Company has appointed Northern Trust International Fund Administration
Services (Guernsey) Limited ("NTIFASGL") as its Depositary, an appointment
required by the AIFMD. Under the terms of the new Administration Agreement
dated 29 May 2014, in return for performing its duties as depositary, NTIFASGL
is remunerated with a fee based on 0.01% of the Company's Total Net Assets.
Corporate Information
Directors Custodian
Richard Hotchkis - Chairman Northern Trust (Guernsey) Limited
Nigel de la Rue PO Box 71
Christopher Legge Trafalgar Court
Steve Hicks Les Banques
St Peter Port
Guernsey GY1 3DA
Channel Islands
Registered Office Auditor
Ashmore Global Opportunities Limited KPMG Channel Islands Limited
PO Box 255 20 New Street
Trafalgar Court St Peter Port
Les Banques Guernsey GY1 4AN
St Peter Port Channel Islands
Guernsey GY1 3QL
Channel Islands
Administrator, Secretary and Registrar Advocates to the Company
Northern Trust International Fund Carey Olsen
Administration Services (Guernsey) Carey House
Limited Les Banques
PO Box 255 St Peter Port
Trafalgar Court Guernsey GY1 4BZ
Les Banques Channel Islands
St Peter Port
Guernsey GY1 3QL
Channel Islands
Investment Manager UK Solicitors to the Company
Ashmore Investment Advisors Limited Slaughter and May
61 Aldwych One Bunhill Row
London WC2B 4AE London EC1Y 8YY
United Kingdom United Kingdom
Broker UK Transfer Agent
J.P. Morgan Cazenove Computershare Investor Services PLC
20 Moorgate The Pavilions
London EC2R 6DA Bridgewater Road
United Kingdom Bristol BS13 8AE
United Kingdom
Broker Website
Jefferies International Limited Performance and portfolio information
Vintners Place for Shareholders can be found at:
68 Upper Thames Street www.agol.com
London EC4V 3BJ
United Kingdom