INVESCO AsiaNET Fund plc
Preliminary Announcement
Unaudited Final Results
For the Year Ended 31 December 2002
Chairman's Report
Performance
During this past year, the Company's net asset value declined again, falling by
15.9% from $4.33 to $3.64. While it must be our prime objective to make money
for our Shareholders, there is some comfort to be taken from the fact that our
benchmark index, against which we compare our performance, fell a good deal
further, declining by 29.9%. The year 2002 was the third year running that
markets around the world declined in the aftermath of the Y2K bubble and
technology stocks generally did not fare well.
The fact that our relative performance was quite a bit better than that of our
benchmark index - The FTSE Global - Pro Asian Technology Index - was largely
due to the careful and consistent approach that Billy Chan and Henry Chan have
taken in their management of the portfolio. As we have mentioned before, the
investment strategy focuses on maintaining a short list of holdings in
technology companies, which are market leaders, are winners and/or have strong
business franchises. Billy and Henry have continued this strategy and this has
helped contain the fall in the net asset value that might otherwise have
resulted. Of the 63 holdings held during the course of the year, no less than
25 of them returned a profit; in a bear market of course the size of rises
tends to be much smaller than the extent of the falls.
Our portfolios in India, Singapore and South Korea in fact actually made money
for us during the year, albeit small sums and certainly not large enough to
offset losses in other areas, the most significant of which came from our
Taiwanese portfolio. The strength of most East Asian currencies against the US
Dollar, our base currency, contributed to our performance.
Costs
Since the launch of the Fund in April 2000, its size has fallen considerably -
as the 64% fall in the net asset value illustrates. While at these lower levels
your Board believes that the prospects for making money from a much more
attractively valued portfolio are good, it is very conscious that the costs
involved in running the Fund have risen as a percentage of its total assets.
The Board of course monitors its total expense ratio regularly and maintains a
disciplined control on all costs.
Outlook
The outlook for the world's stock markets, yet alone for the technology sector
in Asia, is, at the time of writing this statement, uncertain; confidence
everywhere is at a low ebb. America and its coalition partners are at war in
Iraq, consumer confidence in America, whose economy is so important to the rest
of the world and particularly to our world of investment, is well down from its
peak levels and business confidence is such that investment decisions are on
hold. In East Asia there is additional uncertainty caused by the outbreak of
SARS. It is very much wait-and-see time.
Investor confidence is affected by all these issues and others, the most
important of which is confidence in the reporting of corporate profits. But the
uncertainty will not last forever. Assuming that the war in Iraq is a short
one, then after it is over it is likely that it will be back-to-business and
that the American economy will begin to grow. Given that during these last
three years of bear markets the pace of technological development has
continued, that we are now much closer to the establishment of third generation
mobile phone systems, that other products such as digital cameras and flat
screen televisions are growing in popularity and that the personal computer
replacement cycle is now quite mature, there is the chance that some technology
companies can start performing quite well. But it will be important to identify
those that will prosper and those that won't and that is why we believe that
our disciplined approach to stock selection should stand us in good stead and
allow us to make some money for our Shareholders in anything but the
short-term. We are encouraged by the fact that America's technology influenced
NASDAQ Composite Index has risen so far this year.
Robert Alexander Hammond-Chambers
Chairman
9 April 2003
INVESCO AsiaNET Fund plc
Profit and Loss Account
For the year ended 31 December 2002
2002 2001
$ $
Income
Dividend income 257,931 266,591
Less: Withholding tax (13,465) (15,876)
Interest Income 12,106 6,629
256,572 257,344
Expenses
Management Fee - Income 201,166 207,174
Directors' fees & expenses 65,312 61,291
Administration Fee 46,211 44,171
Bank Interest & fees 3,008 23,129
Custodian Fee 17,164 11,980
Auditor's Remuneration 11,143 9,708
General expenses 108,183 45,506
452,187 402,959
Income/(Deficit) arising in the year (195,615) (145,615)
Realised & Unrealised Gain/(Loss) on Investments
Realised Loss on Investments (3,698,990) (11,987,429)
Net realised & unrealised loss on currencies (3,392) (81,740)
Movement in unrealised gain/(loss) on investments 2,063,076 8,512,841
Net realised and unrealised loss for the year (1,639,306) (3,556,328)
Result of operations for the year (1,834,921) (3,701,943)
INVESCO AsiaNET Fund plc
Balance Sheet as at 31 December 2002
31-Dec-02 31-Dec-01
$ $
Assets
Investments at market value (cost 2002: 9,534,604 16,248,227
US$14,075,090)
cost 2001: US$22,521,664 392,008 295,096
Cash at bank
Debtors 1,853 24,751
Total Assets 9,928,465 16,568,074
Liabilities
Creditors 30,910 71,295
30,910 71,295
Net Assets
Equivalent to Shareholder's equity 9,897,555 16,496,779
Units in Issue 2,721,507 3,812,530
Net Asset Value per Share $3.64 $4.33
INVESCO AsiaNET Fund plc
Cash Flow Statement
For the year ended 31-Dec-02 31-Dec-01
Cash Flow from Operating Activities
Net deficit (195,615) (145,615)
Increase in debtors 22,898 93,527
Decrease in creditors (40,385) (90,916)
Net Cash Outflow from Operating Activities (213,102) (143,003)
Cash Flow from Investing Activities
Purchase of investments (11,290,597) (12,059,951)
Proceeds from sale of investments 16,364,914 14,863,362
5,074,317 2,803,411
Cash Flow from Financing Activities
Creations for the year (4,964,464) -
Redemptions for the year 200,161 (1,366,633)
(4,764,303) (1,366,633)
Net decrease in Cash and Cash Equivalents 96,912 1,293,775
Cash and cash equivalents at beginning of year 295,097 (998,678)
Cash overdraft and cash equivalents at end of year 392,008 295,097
Note to the Financial Statements
Taxation
The Fund qualifies as an investment undertaking as defined in Section 739B of
the Taxes Consolidation Act, 1997. It is not chargeable to Irish tax on its
income and gains.
Tax may arise on the happening of a chargeable event. A chargeable event
includes any distribution payments to Shareholders or any encashment,
redemption or transfer of units. No tax will arise on the Fund in respect of
chargeable events in respect of:
1) a Shareholder who is not Irish resident and not ordinarily resident in
Ireland at the time of the chargeable event, provided the necessary signed
statutory declarations are held by the Fund; and
2) certain exempted Irish resident investors who have provided the Fund with
the necessary signed statutory declarations.
Dividend income, interest and capital gains received by the Fund may be subject
to non-recoverable withholding tax in the countries of origin.
The financial information set out above does not constitute the Company's
statutory accounts for the year ended 31 December 2002 or the year ended 31
December 2001. The financial information for 2001 is derived from the statutory
accounts for 2001. The auditors have reported on the 2001 accounts; their
report was unqualified. The financial information for the year ended 31
December 2002 is unaudited. The statutory accounts for 2002 will be finalised
on the basis of the financial information presented by the Directors in this
preliminary announcement.
The audited Report and Accounts will be posted to shareholders shortly. Copies
may be obtained during normal business hours from the Company's Registered
Office, George's Quay House, 43 Townsend Street, Dublin 2, Ireland.
By order of the Board
INVESCO Asset Management (Ireland) Limited - Secretaries 9 April 2003
END