Annual Financial Report and proxy form
FIDELITY SPECIAL VALUES PLC
ANNUAL FINANCIAL REPORT, PROXY FORM AND ADDITIONAL DISCLOSURES
TO THE PRELIMINARY RESULTS FOR THE YEAR TO 31 AUGUST 2010
Further to the voluntary disclosure of the Company's annual results for the
year ended 31 August 2010 by way of a preliminary announcement dated 5 November
2010, in accordance with the Disclosure and Transparency Rules ("the Rules")
4.1.3 and 6.3.5(2) this announcement contains the text of the preliminary
announcement dated 5 November 2010 together with the additional text in
compliance with the Rules.
The Company's annual report and financial statements for the year ended 31
August 2010 together with the accompanying proxy form have been submitted to
the UK Listing Authority, and will shortly be available for inspection on the
National Storage Mechanism (NSM):
www.hemscott.com/nsm.do
(Documents will usually be available for inspection within two business days of
this notice being given)
The annual report and financial statements will shortly be available on the
Company's website at www.fidelity.co.uk/static/pdf/common/investment-trusts/special/specialannual2010.pdf
Rebecca Burtonwood, FIL Investments International, Company Secretary - 01737
836 869
12 November 2010
FIDELITY SPECIAL VALUES PLC
Preliminary Announcement of Audited Results
For the year ended 31 August 2010
Chairman's Statement
NAV: +1.3%
SHARE PRICE: -2.1%
BENCHMARK: +10.6%
DIVIDEND: 10.5P
I have pleasure in presenting my first Annual Report as Chairman of Fidelity
Special Values PLC.
PERFORMANCE
At the beginning of our accounting year a stock market recovery was well under
way as it appeared that action by many world governments had probably averted
an economic depression and that parts of the global economy - especially Asia -
were still achieving strong GDP growth. A stream of data indicating that the
major economies, including the UK, were growing again helped the rally in UK
shares to continue until almost the end of 2009. In early 2010, concerns over
the level of State indebtedness, particularly in some of the eurozone
countries, caused renewed stock market turmoil worldwide and impacted sentiment
in many sectors especially banks. Speculation about a potential double dip
recession re-emerged, and at the end of our financial year there was a great
deal of uncertainty over how the economy would perform in the year ahead.
Against this backdrop, the net asset value per share of Fidelity Special Values
PLC rose by 1.3% on a total return basis. Although a positive rise in absolute
terms, this was less than the FTSE All-Share Index, which rose by 10.6%. The
share price fell by 2.1% during the year. The relative underperformance
occurred in the first half of our year, when the NAV fell by 1.4% against the
benchmark index return of 10.1%. During this period the portfolio was changing
from its earlier successful alignment to cyclical stocks, which did well in the
period when investors in general were focussed on economic recovery, towards
being positioned in companies which have strong fundamentals and which can
produce good earnings growth in the more difficult economic environment which
we now anticipate. In addition, the best performing stocks in the market during
the first half tended to be those with less strong fundamentals, which we had
largely avoided. These included stocks in the mining and chemicals sectors as
investors looked to companies supplying developing economies such as China.
In the second half of our financial year the Company outperformed the market
benchmark with the NAV rising by 2.7% on a total return basis against a
benchmark return of 0.5%. The flat market reflected evidence that governments
in the major economies were intent on tackling their respective deficits, which
in turn would create uncertainty over the macroeconomic outlook. In the UK, the
General Election resulted in a coalition government, whose first Budget in June
2010 and the subsequent Comprehensive Spending Review confirmed significant
reductions in public expenditure and the likelihood of a low growth economic
environment for at least the next year. As a consequence, the portfolio began
to benefit from its earlier repositioning.
DIVIDEND
The Board has decided to recommend a final dividend of 10.50 pence per share
for the year ended 31 August 2010 (2009: 9.00 pence). This dividend will be
payable on 21 December 2010 to shareholders on the register at close of
business on 19 November 2010 (ex-dividend date 17 November 2010).
BOARD OF DIRECTORS
During the past twelve months we have had a number of changes to the Board of
Directors. Sir Richard Brooke retired following the 2009 Annual General Meeting
and the Chairman, Alex Hammond-Chambers, retired on 8 July 2010. Both had
served the Company since its launch in 1994 and their commitment and service to
the Company will be greatly missed.
I was appointed Chairman following Alex Hammond-Chambers' retirement and Ben
Thomson was appointed Senior Independent Director shortly thereafter.
During the year, after interviewing a strong list of candidates, we were
pleased to welcome Sharon Brown and Andy Irvine to the Board. As I was
appointed to the role of Chairman in July, it was necessary for me to
relinquish my role as Audit Committee Chairman and this was transferred to
Sharon Brown on 26 October 2010, after six months' introductory service on the
Board.
It is my belief that the Board has the relevant skills and experience to serve
the Company well in to the future. In common with our practice since 2004, all
Directors are subject to election or re-election on an annual basis and their
biographical details are included in the Annual Report to assist shareholders
when considering their votes.
GEARING
On 26 January 2010 the Company repaid its fixed rate unsecured loan from
Barclays Bank PLC of £27,000,000 which matured on that date. In view of the
high level of interest rates that were quoted on replacement loans at the time,
the Board concluded that the utilisation of Contracts For Difference for
gearing purposes provided more flexibility for the Company's needs at a much
lower cost than traditional bank debt. At the time of writing the gross level
of gearing is somewhat below the 115% to 120% range we would consider "normal"
owing to the uncertain outlook, discussed below.
CONTINUATION VOTE
In accordance with the Articles of Association of the Company, an ordinary
resolution that the Company continue as an investment trust for a further three
years was passed at the 2007 Annual General Meeting. A further continuation
vote will take place at this year's Annual General Meeting.
The objective of the Company is to achieve long term capital growth from an
actively managed portfolio of special situation investments. We have always
stated to our shareholders that when assessing this objective, we consider a 5
year time span to be the most appropriate. The net asset value total return
performance for the last individual and annualised five years and also the
corresponding market benchmark returns are shown below, along with Sanjeev
Shah's performance since taking on the management of the portfolio on 1 January
2008 and the performance since launch in 1994. Sanjeev's performance is well
ahead of the market benchmark during his tenure over what has been a very
difficult period for the market. The 5 year record remains well in excess of
both the returns on cash and the market for this period.
The Board continues to be confident in the Manager's approach to achieving the
Company's objective and we hope that you will agree that the medium and long
term performance continues to justify this conclusion. Therefore your Board
recommends that shareholders vote in favour of the continuation vote. A further
continuation vote will take place at the Annual General Meeting in 2013.
NAV and share price performance % NAV Share Price Index
(total return basis)
Year to 31 August 2006 +19.4 +16.0 +16.8
Year to 31 August 2007 +15.9 +14.3 +11.8
Year to 31 August 2008 -9.8 -17.6 -8.7
Year to 31 August 2009 +9.0 +19.4 -8.2
Year to 31 August 2010 +1.3 -2.1 +10.6
Sanjeev Shah's tenure 1 January +2.5 +2.6 -8.7
2008 to 31 August 2010
Five years to 31 August 2010 +38.0 +27.7 +21.0
Launch to 31 August 2010 +622.5 +563.9 +186.2
CORPORATE GOVERNANCE
As detailed in the Corporate Governance Statement in the Annual Report, the
Board follows the approach recommended by the Association of Investment
Companies in its Code of Corporate Governance. The Board has always taken
corporate governance seriously and welcomes feedback from shareholders.
Corporate governance guidelines are changed and updated continually and,
although these are reviewed and adopted by the Board as appropriate, the Board
aims to ensure its governance is of benefit to the Company and is aimed at
enhancing shareholder value rather than being adopted purely to satisfy the
requirements of corporate governance "box-tickers".
THE ANNUAL GENERAL MEETING: WEDNESDAY 15 DECEMBER 2010 AT 11.30AM
The Annual General Meeting will be held at Fidelity's offices at 25 Cannon
Street (St Paul's or Mansion House tube stations) on Wednesday 15 December 2010
at 11.30am.
It is the most important meeting that we, the Directors of your Company, have
each year and we do urge as many of you as possible to come and join us for the
occasion. Sanjeev Shah will be making his annual presentation to shareholders,
highlighting the achievements and challenges of the year past and the prospects
for the year to come.
OUTLOOK: STILL UNCERTAIN
The past year was characterised by market optimism during the first half,
followed by a return to uncertainty in the second half. The main reasons for
that uncertainty will probably remain with us for some while, and include the
level of government debt and whether governments will trigger inflation by
printing money to reduce the monetary burden of this debt; the impact of cuts
in public spending; rises in taxation; and weak economic growth. The market
volatility over the past year and the change from investor optimism to
uncertainty have produced an environment in which there are many interesting
investment opportunities. We expect the uncertain environment to favour stocks
with strong balance sheets, good cash generation, fair valuations and prospects
of good long term earnings growth even in a tough economy. The portfolio is
positioned in line with this outlook, emphasising careful stock selection and
continuing to seek opportunities across large, medium and small sized
companies.
Lynn Ruddick
Chairman
5 November 2010
This has been another challenging year for investors. Although the UK
stockmarket rose by 10.6% (on a total return basis) over our accounting year,
investor sentiment over the period switched from optimism to fear regarding the
economic outlook. The level of economic activity remained well below the
pre-crisis peak.
UK MARKET REVIEW
• GDP growth accelerated over the year, culminating in an expansion of 1.7% on
an annualised basis in the second calendar quarter of 2010.
• Inflation rose above the government's 2% target, elevated by temporary
effects stemming from higher oil prices and the restoration of the standard
rate of VAT, with August CPI reaching 3.1%
• The Bank of England kept the interest rate unchanged at 0.5% throughout the
year.
• The UK stock market rose during the 12 month period as the economic outlook
improved, but the European debt crisis capped the gains in the second half.
Investors' appetite for risk improved considerably during the first half of the
review period, supported by positive data releases and encouraging earnings
reports. However, markets turned more cautious in the second half as concerns
rose that the European sovereign debt crisis could curtail a global recovery.
Shares of banks suffered from worries about potential knock-on effects from the
debt troubles in Europe and tougher regulatory proposals. Following the UK
General Election in May and the new coalition government's Budget in June,
there was renewed speculation over the possibility of a double dip recession as
the market pondered the impact of spending cuts and tax increases. However,
many of the companies in the portfolio generate a significant proportion of
their revenue from outside the UK, either directly or via exports. There was
increased focus on some of the more cyclical sectors and stocks of the UK
market, in part due to expectations of continued strong demand from emerging
market countries (China in particular) for commodities. Nevertheless, some of
the Company's top-weighted sectors, such as technology and media, outperformed
the broader market. The energy sector ended in negative territory, mainly due
to the problems at oil major BP, whose shares suffered a significant drop
following an explosion at its oil well in the Gulf of Mexico in April 2010 and
the rising costs of cleaning up the resultant oil spill.
During the period, sterling weakened against the dollar from $1.63 to $1.54.
PORTFOLIO MANAGER'S REVIEW
During the 12 months to 31 August 2010, the NAV of the Company rose by 1.3%
(total return basis), but underperformed the FTSE All-Share Index, which rose
by 10.6%.
Although one of the Company's objectives was achieved, namely a positive
absolute return, it is nevertheless disappointing that the Company was so far
behind the market return. However, the objective of the Company is to achieve
long term capital growth and we are pleased to report that the annualised total
return to 31 August 2010 for 2, 3 and 5 years are all ahead of the market's
returns for these periods. The Company is also ranked in the first quartile
among its peers across different time periods including the 3 and 5 years to
the end of August 2010.
Like last year, this 12 month period was a tale of two halves, although in this
case with a strong rise in markets in the early months of our financial year as
investors globally breathed a collective sigh of relief that economic growth
had become positive. This was followed by a set back in the second half as
fears of the unsustainability of the economic growth gained precedence. I
altered the shape of the portfolio during the year to move away from some of
the cyclical exposure towards a greater emphasis on companies which can grow
during tougher economic conditions.
The key reason for the underperformance by the portfolio relative to the
benchmark, over the 12 month period, was the underweight stance in the mining
sector, where an improving outlook for demand for commodities supported stock
prices. However, I continue to be cautious about these stocks, which do not
seem attractive on valuation grounds.
Holdings in financials also hurt overall performance. While earnings have been
improving at key holdings, such as Royal Bank of Scotland and Lloyds Banking
Group, the negative sentiment due to the European debt crisis and anticipated
tough proposals on capital requirements from the Basel Committee, affected
sector returns. Nevertheless, many of these recommendations have been watered
down recently, which augurs well for the banking sector.
Certain stocks detracted from performance during the period. For example, the
holdings in Yellow Pages publisher Yell and outsourcing group Xchanging proved
significant detractors due to the market's worries about their earnings, but I
retain conviction in the long term prospects for those companies. Some of the
positions within the travel & leisure sector, such as Ladbrokes, held back
returns. I still remain confident about these companies' long term growth
prospects.
Several of our key overweight positions made positive contributions. These
included components distributors Premier Farnell and Electrocomponents, where
continued acceleration in their web based sales supported stock prices. Within
the media sector, satellite broadcaster British Sky Broadcasting, which has
seen the addition of new HD customers and a bid approach from News Corp, was a
notable contributor. Shares in the leading education publisher Pearson also
rose, supported by growth in its higher education business, the structural
shift to digital delivery and an upgrade in its full year outlook. Elsewhere
within the sector, business publisher United Business Media was a positive
contributor as it benefited from a recovery in corporate spending on events.
Food retailer J Sainsbury also made a positive contribution, as did an
underweight stance in BP.
The portfolio is overweight in medium to small sized companies as they tend to
be a more fertile hunting ground for a special situations investor. I continue
to find some very good opportunities in large companies, where overall
valuations appear attractive versus history. However, careful stock selection
will be essential.
Derivatives
During the last year I have used derivatives in the form of Contracts For
Difference ("CFDs") as a cheaper alternative to straight borrowing. Like
regular borrowing, CFDs used for this purpose will magnify the direction of
underlying share prices, one way or another. In addition, I am able to use
other derivatives from time to time, although these form a small component of
the portfolio. They provide another way of investing in mis-priced stocks and I
use them in two key ways. I can seek to take advantage of periods when the
overall market is either overbought or oversold. I can also look to derive
performance from individual shares that I believe to be overvalued and likely
to fall. The impact of the derivatives overall was negative during this
financial year. However, these strategies have contributed 5.3% over the period
since I took on the management of the Company's portfolio at the beginning of
2008.
OUTLOOK
The market has become more volatile recently, but these periods of volatility
also offer opportunities to pick up stocks at attractive valuations that have
been dragged down by the general turmoil. Economic data continues to be uneven,
leading to fears about the sustainability of the global economic recovery, but
governments have shown their willingness for providing further stimulus
measures. Overall, the likely low growth economic environment over the next few
quarters has led me to switch to higher quality growth companies. I continue to
see good stock specific opportunities in financials, and media continues to be
a significant position given its low valuation versus history.
Sanjeev Shah
FIL Investments International
5 November 2010
PRINCIPAL RISKS AND UNCERTAINTIES AND RISK MANAGEMENT
Due to the current economic climate, shareholders will have concerns about the
direction of some markets. The Board confirms that there is an ongoing process
for identifying, evaluating and managing the principal risks faced by the
Company. The Board, with the assistance of the Manager, has developed a risk
matrix which, as part of the internal control process, identifies the
operational risks that the Company faces. The matrix has identified strategic,
marketing and business development, investment management, company secretarial,
fund administration and operations and support function risks. The Board
reviews and agrees policies, which have remained broadly unchanged since the
beginning of the accounting period, for managing these risks. The process is
regularly reviewed by the Board in accordance with the FRC's "Internal Control:
Revised Guidance for Directors on the Combined Code". Risks are identified and
graded in this process, together with the policies and procedures for the
mitigation of risks, and are updated and reviewed twice a year in the form of a
comprehensive internal controls report considered by the Audit Committee. The
key risks identified within this matrix are:
External risks
Market risk
The Company's assets consist mainly of listed securities and the principal
risks are therefore market related such as market recessions, interest rate
movements, deflation/inflation, terrorism and protectionism. Risks to which the
Company is exposed and which form part of the market risks category are
included in Note 19 to the financial statements in the Annual Report together
with summaries of the policies for managing these risks. These comprise: market
price risk; foreign currency risk; interest rate risk; liquidity risk;
counterparty risk and credit risk. The Company's fixed term, fixed rate loan
facility was repaid at the beginning of the year. The extent to which any loan
facilities will be renewed will be kept under the most careful scrutiny.
Contracts For Difference are currently used for gearing purposes. In addition a
day to day overdraft facility can be used if required. The impact of limited
finance from counterparties including suppliers has not impacted the Company to
date, however there are alternative suppliers available in the market place
should the need arise. The Company relies on a number of main service
providers, namely the Manager, Registrar and Custodian. The Manager is the
member of a privately owned group of companies on which a regular report is
provided to the Board. The Manager, Registrar and Custodian are subject to
regular audits by Fidelity's internal audit team and the counterparties' own
internal controls reports are received by the Board and any concerns
investigated.
Share price risk
Although it is usually the case that the longer a share is owned the less the
risk of losing money, share prices are volatile and for the short term
shareholder, likely to want to sell in the near future, volatility is a risk.
The Board does not regard volatility as a significant risk for the long term
shareholder.
Discount risk
The Board cannot control the discount at which the Company's share price trades
to net asset value. However, it can influence this through its share buyback
policy and through creating demand for shares through good performance and an
active investor relations programme.
Internal risks
Investment management
The Board relies on the Manager's skills and judgement to make investment
decisions based on research and analysis of individual stocks and sectors. The
Board reviews the performance of the asset value of the portfolio against the
Company's benchmark and competitors and the outlook for the market with the
Manager at each Board meeting. The emphasis is on long term investment
performance and the Board accepts that by targeting long term results the
Company risks volatility in the shorter term.
Governance, operational, financial, compliance, administration etc
While it is believed that the likelihood of poor governance, compliance and
operational administration by other third party service providers is low, the
financial consequences could be serious, including the associated reputational
damage to the Company. Your Board is responsible for the Company's system of
internal control and for reviewing its effectiveness. Details of this process
are provided in the Corporate Governance Statement within this Annual Report.
Financial and financial instrument risks
The financial instrument risks faced by the Company are shown in Note 19 to the
financial statements in the Annual Report.
Other risks monitored on a regular basis include derivative positions, which
are subject to daily monitoring, together with the Company's cash position, and
the continuation vote (at a time of poor performance).
Related parties
Nicky McCabe is an Executive Director of Moonray Investors, a division of FIL
Investments International, a member of the FIL Limited Group of Companies.
Nicky McCabe has waived her entitlement to Director's fees. No Director has a
contract of service with the Company and no contracts existed during or at the
end of the financial period in which any Director was materially
interested and which were significant in relation to the Company's business,
except as disclosed in relation to Nicky McCabe's interests in the Management
Agreement. There have been no other related party transactions requiring
disclosure under Financial Reporting Standard ("FRS") 8.
The interests of the Directors and FIL Limited in the ordinary shares of the
Company as at 31 August 2010 and 31 August 2009 are shown in the Annual Report.
Statement of Directors' responsibilities
The Directors are responsible for preparing the annual report and the financial
statements in accordance with applicable law and regulations. Company law
requires the Directors to prepare financial statements for each financial
period. Under the law they have elected to prepare the financial statements in
accordance with UK Generally Accepted Accounting Practice.
The financial statements are required by law to give a true and fair view of
the state of affairs of the Company and of the profit or loss for the period.
In preparing these financial statements the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• state whether applicable UK Accounting Standards have been followed, subject
to any material
departures disclosed and explained in the financial statements; and
• prepare the financial statements on the going concern basis unless it is
inappropriate to presume
that the Company will continue in business.
The Directors are responsible for ensuring that adequate accounting records are
kept which disclose with reasonable accuracy at any time the financial position
of the Company and to enable them to ensure that the financial statements
comply with the Companies Act 2006. They are also responsible for safeguarding
the assets of the Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
Under applicable law and regulations the Directors are also responsible for
preparing a Directors' Report, including a Business Review, a Directors'
Remuneration Report and a Corporate Governance Statement that comply with that
law and those regulations. The Directors are responsible for the maintenance
and integrity of the corporate and financial information included on the
Company's pages of the Manager's website www.fidelity.co.uk/its. Visitors to
the website need to be aware that legislation in the United Kingdom governing
the preparation and dissemination of the financial statements may differ from
legislation in their jurisdictions.
We confirm that to the best of our knowledge the financial statements, prepared
in accordance with the applicable set of accounting standards, give a true and
fair view of the assets, liabilities, financial position and profit or loss of
the Company; and the Directors' Report includes a fair review of the
development and performance of the business and the position of the Company
together with a description of the principal risks and uncertainties it faces.
Approved by the Board on 5 November 2010 and signed on its behalf.
Lynn Ruddick
Chairman
5 November 2010
Enquiries:
Chris Davies - Head of Investment Trusts, FIL Investments International - 01737
837 723
Anne Read - Corporate Communications, FIL Investments International - 0207 961
4409
Rebecca Burtonwood - Company Secretary, FIL Investment International - 01737
836 869
FIDELITY SPECIAL VALUES PLC
Income Statement for the
year ended31 August 2010
2010 2009
revenue capital total revenue capital total
£'000 £'000 £'000 £'000 £'000 £'000
Gains on investments - 3,613 3,613 - 8,423 8,423
designated at fair value
through profit or loss
(Losses)/gains on - (5,219) (5,219) - 10,756 10,756
derivative instruments held
at fair value through
profit or loss
Franked investment income 3,671 - 3,671 2,477 - 2,477
UK scrip dividends 5,531 - 5,531 5,340 - 5,340
Overseas dividends 764 - 764 628 - 628
Overseas scrip dividends 320 - 320 736 - 736
Income from REIT 273 - 273 574 - 574
investments
Deposit interest 18 - 18 134 - 134
Income from Fidelity - - - 28 - 28
Institutional Liquidity
Fund plc
Interest on VAT recovered - - - 407 - 407
on investment management
fees
Underwriting commission 28 - 28 97 - 97
Net derivative income/ 261 - 261 (375) - (375)
(expenses)
Investment management fee (3,515) - (3,515) (2,862) - (2,862)
VAT recovered on investment - - - 6 - 6
management fees
Other expenses (587) - (587) (513) - (513)
Exchange (losses)/gains on (4) (117) (121) - 123 123
other net assets
Net return/(loss) before 6,760 (1,723) 5,037 6,677 19,302 25,979
finance costs and taxation
Interest paid on loans (591) - (591) (1,637) - (1,637)
Net return/(loss) on 6,169 (1,723) 4,446 5,040 19,302 24,342
ordinary activities before
taxation
Taxation on return/(loss) (56) - (56) (57) - (57)
on ordinary activities(¹)
Net return/(loss) on 6,113 (1,723) 4,390 4,983 19,302 24,285
ordinary activities after
taxation for the year
Return/(loss) per ordinary 10.74p (3.03p) 7.71p 8.76p 33.92p 42.68p
share
(¹) This relates to overseas taxation only.
A Statement of Total Recognised Gains and Losses has not been prepared as there
are no gains and losses other than those reported in this Income Statement. The
total column of the Income Statement is the profit and loss account of the
Company. All revenue and capital items in the above statement derive from
continued operations. No operations were acquired or discontinued during the
year.
FIDELITY SPECIAL VALUES PLC
Balance Sheet as at 31 August 2010
2010 2009
£'000 £'000
Fixed assets
Investments designated at fair value through 323,663 355,379
profit or loss
Current assets
Derivative assets held at fair value through 1,995 4,186
profit or loss
Debtors 2,451 9,135
Amounts held at futures clearing houses and 2,470 843
brokers
Cash at bank 11,165 8,087
18,081 22,251
Creditors - amounts falling due within one
year
Derivative liabilities held at fair value (4,180) (1,238)
through profit or loss
Fixed rate unsecured loan - (27,000)
Other creditors (3,781) (14,874)
(7,961) (43,112)
Net current assets/(liabilities) 10,120 (20,861)
Total net assets 333,783 334,518
Capital and reserves
Share capital 14,234 14,234
Share premium account 95,767 95,767
Capital redemption reserve 2,554 2,554
Other non-distributable reserve 5,152 5,152
Capital reserve 208,765 210,488
Revenue reserve 7,311 6,323
Total equity shareholders' funds 333,783 334,518
Net asset value per ordinary share 586.21p 587.50p
FIDELITY SPECIAL VALUES PLC
Reconciliation of Movements in Shareholders' Funds for the year ended 31 August
2010
share share capital other capital revenue total
capital premium redemption non-distributable reserve reserve equity
account reserve reserve
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Opening 14,198 95,058 2,545 5,152 191,309 10,995 319,257
shareholders'
funds: 1
September 2008
Net recognised - - - - 19,302 - 19,302
capital losses
for the year
Issue of 45 709 - - - - 754
ordinary shares
Repurchase of (9) - 9 - (123) - (123)
ordinary shares
Net revenue - - - - - 4,983 4,983
return after
taxation for the
year
Dividend paid to - - - - - (9,655) (9,655)
shareholders
Closing 14,234 95,767 2,554 5,152 210,488 6,323 334,518
shareholders'
funds: 31 August
2009
Net recognised - - - - (1,723) - (1,723)
losses for the
year
Net revenue - - - - - 6,113 6,113
return after
taxation for the
year
Dividend paid to - - - - - (5,125) (5,125)
shareholders
Closing 14,234 95,767 2,554 5,152 208,765 7,311 333,783
shareholders'
funds: 31 August
2010
FIDELITY SPECIAL VALUES PLC
Cash Flow Statement for the year ended 31 August 2010
2010 2009
£'000 £'000
Operating activities
Investment income received 4,823 4,232
Net derivative income/(expenses) 236 (377)
Underwriting commission received 28 97
Deposit interest received 17 216
Investment management fee paid (3,518) (2,797)
VAT recovered on investment management fees paid - 2,300
Directors' fees paid (122) (112)
Other cash receipts/(payments) 52 (684)
Net cash inflow from operating activities 1,516 2,875
Returns on investments and servicing of finance
Interest paid (736) (1,692)
Net cash outflow from returns on investments and (736) (1,692)
servicing of finance
Taxation
Overseas taxation recovered 25 38
Taxation recovered 25 38
Financial investment
Purchase of investments (187,551) (263,308)
Disposal of investments 223,444 254,390
Net cash inflow/(outflow) from financial investment 35,893 (8,918)
Derivative activities
Premium received on options 1,111 3,441
Premium paid on options (1,390) (1,365)
Proceeds of derivative instruments 406 5,923
Movements on amounts held at futures clearing houses (1,627) (843)
and brokers
Net cash (outflow)/inflow from derivative activities (1,500) 7,156
Dividend paid to shareholders (5,125) (9,655)
Net cash inflow/(outflow) before use of liquid 30,073 (10,196)
resources and financing
Net cash inflow from management of liquid resources - 9,091
Net cash inflow/(outflow) before financing 30,073 (1,105)
Financing
Issue of ordinary shares - 754
Repurchase of ordinary shares - (124)
5.435% fixed rate unsecured loan repaid (27,000) -
5.655% fixed rate unsecured loan repaid - (8,000)
Net cash outflow from financing (27,000) (7,370)
Increase/(decrease) in cash 3,073 (8,475)
The above statements have been prepared on the basis of the accounting policies
as set out in the annual financial statements to 31 August 2010. This
preliminary statement, which has been agreed with the Auditor, was approved by
the Board on 5 November 2010. It is not the Company's statutory financial
statements. The statutory financial statements for the financial year ended 31
August 2009 have been delivered to the Registrar of Companies. The statutory
financial statements for the financial year ended 31 August 2010 have been
approved and audited but have not yet been filed. The statutory financial
statements for the financial years ended 31 August 2009 and 31 August 2010
received unqualified audit reports, did not include a reference to any matters
to which the Auditor drew attention by way of emphasis without qualifying the
report and did not contain statements under section 498(2) and (3) of the
Companies Act 2006. The annual report and financial statements will be posted
to shareholders as soon as is practicable and in any event no later than 15
November 2010.
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