for the year ended 31 July 2015
First State Emerging Markets Bond Fund
31 July 2015 31 July 2014
Notes £'000 £'000
87,535 63,152
8 1,089 3,560
8,370 4,456
9,459 8,016
96,994 71,168
(75) (565)
9 (1,104) (3,862)
(562) (323)
(1,666) (4,185)
(1,741) (4,750)
95,253 66,418
Net assets attributable to shareholders
Notes to the financial statements are on pages 106 to 110.
Derivative liabilities Creditors
Distribution payable on income shares Total other liabilities
Total liabilities Liabilities
Balance sheet
as at 31 July 2015
Assets
Portfolio of investments Debtors
Cash and bank balances Total other assets Total assets
1.
2.
31 July 2015 31 July 2014
£'000 £'000
31 July 2015 31 July 2014
£'000 £'000
31 July 2015 31 July 2014
£'000 £'000
Payable to the Depositary, associates of the Depositary, and agents of either of them:
Depositary's fees Expenses
Payable to the ACD, associates of the ACD, and agents of either of them:
ACD's periodic charge Currency hedge gains/(losses) Total revenue
Interest from bank deposits
Interest from government and fixed interest securities Net capital (losses)/gains
Revenue
Forward foreign exchange currency contracts Currency gains/(losses)
Accounting basis and policies
Please see pages 10 to 12 for accounting basis and policies.
Net capital (losses)/gains
The net capital (losses)/gains during the year comprise:
Non-derivative securities
Notes to the Financial Statements
as at 31 July 2015
First State Emerging Markets Bond Fund
Notes to the Financial Statements
(continued) as at 31 July 2015First State Emerging Markets Bond Fund
5.
31 July 2015 31 July 2014
£'000 £'000
31 July 2015 31 July 2014
£'000 £'000
31 July 2015 31 July 2014
£'000 £'000
3,213 1,566
(1)
-Expenses charged to capital 893 643
4,105 2,209
8.
31 July 2015 31 July 2014
£'000 £'000
Amounts receivable for issue of shares Accrued revenue
Debtors
Sales awaiting settlement
Movement in net income as a result of conversions
Net distributions for the year
Details of the distribution per share is set out in the Distribution tables on pages 111 to 113.
Movement between net revenue and net distributions
Net revenue after taxation Interest
Total finance costs
Add: revenue deducted on cancellation of shares Deduct: revenue received on issue of shares Net distributions for the year
Final distribution Income tax withheld Interim distribution Finance costs
The distributions take account of revenue received on the issue of shares and revenue deducted on the cancellation of shares, and comprises:
Deferred taxation:
There is no provision required for deferred taxation at the Balance sheet date in the current or prior year.
Current tax charge for year
OEICs are exempt from tax on capital gains. Therefore, any capital return is not included in the above reconciliation.
Tax deductible interest distributions Net revenue before taxation
Corporation tax of 20% (2014: 20%) Effects of:
Factors affecting current tax charge for the year:
The tax assessed for the year is lower than (2014: lower than) the standard rate of corporation tax in the UK for an OEIC of 20% (2014:
20%). The differences are explained below:
Analysis of charge in year:
There is no corporation tax charge in the current year or prior year.
Taxation
Notes to the Financial Statements
(continued) as at 31 July 2015First State Emerging Markets Bond Fund
9.
31 July 2015 31 July 2014
£'000 £'000
31 July 2015 31 July 2014 31 July 2015 31 July 2014
£'000 £'000 £'000 £'000
119,573 101,631 97,268 70,595
119,573 101,631 97,268 70,595
- - -
-- - -
-- - -
-119,573 101,631 97,268 70,595
11.
12.
(a)
Creditors
Purchases awaiting settlement
Amounts payable for cancellation of shares Accrued expenses
Total creditors Income tax payable
Trades in the year before transaction costs Commissions
Taxes
Portfolio transaction costs
Purchases Sales
Non-derivative securities
Contingent liabilities and commitments
As at 31 July 2015, the Fund had no contingent liabilities (31/07/14: £nil) and no commitments (31/07/14: £nil).
Total costs
Total net trades in the year after transaction costs
The Fund invests principally in fixed interest securities. Certain fixed interest securities are liable to default risk whereby the nominal capital is not or is unlikely to be returned to investors. The value of fixed interest stocks is not fixed and may go down as well as up. This may be the result of a specific factor affecting the value of an individual fixed interest stock or be caused by a general market factor (such as government policy or the health of the underlying economy) which can affect the entire portfolio.
Any change to the interest rates relevant for particular securities may result in either revenue increasing or decreasing, or the ACD being unable to secure similar returns on the expiry of contracts or the sale of securities. In addition changes to prevailing rates or changes in expectations of future rates may result in an increase or decrease in the value of securities held. In addition, the management of the Fund complies with the Financial Conduct Authority COLL sourcebook, which includes rules limiting the size of investment in any particular holding.
Market price risk arises mainly from uncertainty about future prices of the financial instruments held. Investment risk in the portfolio is regularly reviewed and controlled through the adoption of parameters limiting exposures to various factors such as industries, countries, and company size.
The Fund enters into transactions in financial instruments which expose it to the risk that the counter-party will not deliver the investment (purchase) or cash (sale) after the Fund has fulfilled its obligations. The Fund only buys and sells financial instruments through parties that have been approved by the ACD as acceptable. These are reviewed on an ongoing basis.
The Fund’s main liability is the redemption of any shares that investors wish to sell. In general, the ACD manages the cash to ensure that it can meet its liabilities. Assets from a fund may need to be sold if insufficient cash is available to finance such redemptions. The Fund’s holdings are reviewed on a regular basis, with particular emphasis on the market capitalisation of the issuer (securities issued by larger Derivatives and other financial instruments
General
In pursuing its investment objectives the Fund holds fixed interest securities.
Notes to the Financial Statements
(continued) as at 31 July 2015First State Emerging Markets Bond Fund
12. for which rate is fixed
Financial liabilities not carrying
interest Total
Currency £'000 £'000 % Years £'000 £'000
31 July 2015
Sterling - - - - 28,666 28,666
Euro - - - - 24,205 24,205
US dollar 8,370 87,357 6.30 10.40 (53,345) 42,382
Total 8,370 87,357 (474) 95,253
31 July 2014
Sterling - - - - 25,111 25,111
Euro 1 - - - 14,714 14,715
Mexican peso - 1,201 4.61 6.13 9 1,210
US dollar 4,454 61,949 5.38 11.33 (41,021) 25,382
Total 4,455 63,150 (1,187) 66,418
(c)
Currency £'000 £'000 £'000 £'000 £'000 £'000
Euro 24,205 - 24,205 14,715 - 14,715
Mexican peso - - - 9 1,201 1,210
US dollar (44,975) 87,357 42,382 (36,567) 61,949 25,382
(20,770) 87,357 66,587 (21,843) 63,150 41,307
(d)
The interest rate risk profile of the company's financial assets and liabilities at 31 July was:
Fair value of financial assets and financial liabilities
There is no material difference between the value of the financial assets and liabilities, as shown in the Balance sheet, and their fair value.
Interest rate risk
The Fund receives revenue from fixed interest investments. Given that the Fund's objective is to achieve a total investment return from income and capital appreciation, these cash flows are considered to be of primary importance and are actively managed.
Derivatives and other financial instruments (continued)
Analysis of the Fund's currency exposure
The following summarises the Sterling value of currencies of the Fund in which the investments, including cash, debtors and creditors, are denominated.
As at 31 July the Fund had the following net currency exposure (excluding sterling):
Net foreign currency assets Net foreign currency assets
31 July 2015 31 July 2014
Derivative risk
The Manager may enter into derivatives transactions for investment purposes and for efficient portfolio management purposes. A relatively small market movement may have a potentially larger impact on derivatives than on the underlying assets and the use of derivatives can therefore increase the volatility of the value of units in the Scheme. However it is not anticipated that the use of derivatives will have a significant effect on the risk profile of the Scheme.
Exposure to the various markets may be balanced through tactical asset allocation of futures contracts. Tactical asset allocation is a technique which allows the ACD to undertake a switch in the Fund's exposure by the use of derivatives rather than through the sale and purchase by the Fund of transferable securities.
Due to the use of derivatives, the percentage movements in the value of the Fund will be different from the percentage movements in the markets. At the period end, as the sensitivity analysis or value at risk are not significant, no additional disclosure has been shown.
Notes to the Financial Statements
(continued) as at 31 July 2015First State Emerging Markets Bond Fund
13.
-All share classes have the same rights on winding up.
Share class Z Gross Accumulation (USD share class):
The net asset value of each share class, the net asset value per share and the number of shares in each class are given in the Performance Record on page 101.
The distributions per share class are given in the Distribution Tables on pages 111 to 113.
Share class Z Gross Hedged Accumulation:
Share class B Hedged Income (EUR share class):
Share class B Accumulation (USD share class) (Institutional):
Share class B Gross Accumulation (USD share class):
Share class A Hedged Accumulation (EUR share class):
Share class A Hedged Income (EUR share class):
Share class A Hedged Income (Institutional):
Share class B Hedged Accumulation (Institutional):
Share class B Hedged Income:
The Fund has eleven share classes in issue.
The ACD's periodic charge on each share class is as follows:
Share class A Hedged Accumulation (Institutional):
As at 31 July 2015 CFS Managed Property Limited, a related party of the ACD, owned 24.74% (31/07/14: 45.53%) of the Net Asset Value of the Fund.
As at 31 July 2015 First State Investments Services (UK) Limited, a related party of the ACD, owned 0.27% (31/07/14: 0.71%) of the Net Asset Value of the Fund.
Share classes
First State Investments (UK) Limited, ("the ACD") is a related party to the Fund as defined by Financial Reporting Standard 8 ‘Related Party Disclosures’. By virtue of the regulations governing OEICs, the ACD is party to every transaction in respect of shares of the Fund, which are summarised in the ‘Statement of Change in Net Assets attributable to Shareholders’. Amounts due at the year end in respect of issues and cancellations are included in the Balance Sheet.
Amounts paid to First State Investments (UK) Limited in respect of ACD fees are disclosed in note 4, with £64,043 (31/07/14: £53,419) due at the year end.
Related parties
Gross
Interim 2.8566 0.5713 2.2853 - 2.2853 1.8541
Final 2.9270 0.5854 2.3416 - 2.3416 2.3443
Group 2 (p) (p) (p) (p) (p) (p)
Interim 1.9701 0.3940 1.5761 0.7092 2.2853 1.8541
Final 1.3340 0.2668 1.0672 1.2744 2.3416 2.3443
Gross
Interim 2.5789 0.5158 2.0631 - 2.0631 1.7417
Final 2.5903 0.5181 2.0722 - 2.0722 2.1576
Group 2 (p) (p) (p) (p) (p) (p)
Interim 0.9924 0.1985 0.7939 1.2692 2.0631 1.7417
Final 1.3380 0.2676 1.0704 1.0018 2.0722 2.1576
Gross
Interim 2.4574 0.4915 1.9659 - 1.9659 1.5937
Final 2.5234 0.5047 2.0187 - 2.0187 2.0046
Group 2 (p) (p) (p) (p) (p) (p)
Interim 1.5389 0.3078 1.2311 0.7348 1.9659 1.5937
Final 0.9434 0.1887 0.7547 1.2640 2.0187 2.0046
Gross
Interim 2.3193 0.4639 1.8554 - 1.8554 1.5574
Final 2.3381 0.4676 1.8705 - 1.8705 1.9300
Group 2 (p) (p) (p) (p) (p) (p)
Interim 0.6101 0.1220 0.4881 1.3673 1.8554 1.5574
Final 1.3353 0.2671 1.0682 0.8023 1.8705 1.9300
Share class B Hedged Accumulation
Share class B Hedged Income Share class A Hedged Income Share class A Hedged Accumulation
Final - Shares purchased between 1 February 2015 and 31 July 2015 Group 2 Interim - Shares purchased between 1 August 2014 and 31 January 2015 Final - Shares purchased prior to 1 February 2015
Distribution in pence and cents per share