Annual Report and Accounts

Transcription

1 Société d investissement à capital variable Established in Luxembourg RCS Luxembourg B Annual Report and Accounts For the year ended 31 January 2017 Audited

2 This audited Annual Report of the Company does not constitute an offer of Shares. Shares are offered on the basis of the information contained in the current Prospectus (and the documents referred to within it) supplemented by the last available audited Annual Report of the Company and any subsequently published unaudited Semi-Annual Report. Copies of the current Prospectus, latest audited Annual and unaudited Semi- Annual Reports and Portfolio Changes for the Company are available free of charge from the registered office of the Company or from any of the companies registered as distributors of the Company, or for investors in Switzerland, from the Representative of the Company in Switzerland.

3 Contents Directors' Report 2 Directors and Supervisory Officers 5 Investment Manager s Report 6.. Schedule of Investments Currency Fund US Dollar Currency Fund 7.. Statement of Net Assets 8 Statement of Net Asset Value per Share 9 Statement of Operations and Changes in Net Assets 10 Statement of Share Statistics 11 Notes to the Financial Statements 12 Audit Report 14 Unaudited Supplementary Information 15 Directory 16 1

4 Directors' Report. I Introduction Fidelity (the "Company") is an open-ended investment company established in Luxembourg as a société d'investissement à capital variable ("SICAV"). It has an umbrella structure and its assets may be held in a number of different funds ("sub-funds"). Each sub-fund is a separate portfolio of securities managed in accordance with specific investment objectives. Shares of the Company (the "Shares") are authorised for sale in a number of jurisdictions and are listed on the Luxembourg Stock Exchange.. II Financial Statements The Board of Directors of the Company (the "Board") submits its Report and the audited financial statements for the year ended 31 January The audited financial statements are set out on pages 7 to 13 of this Annual Report, with results for the year appearing in the Statement of Operations and Changes in Net Assets on page 10. A copy of the Annual Report may be obtained upon request from the offices of the companies registered as distributors or from the Registered Office of the Company. Alternatively, please go to Comparative figures for the previous year can be found in the Annual Report of the Company for the year ended 31 January III Activities during the year During the year, the Company followed the normal activities of an open-ended investment company. The Investment Manager's Report that follows gives an overview of performance. Assets under management as at 31 January 2017 exceeded USD 263 million (31 January 2016: USD 237 million). The Directors may from time to time close sub-funds as well as add further sub-funds with different investment objectives, subject to the approval of the Commission de Surveillance du Secteur Financier ("CSSF"). As at 31 January 2017, Fidelity consisted of one sub-fund namely the US Dollar Currency Fund.. IV Board of Directors The Directors of the Company are listed on page 5. There are no service contracts proposed or in existence between any of the Directors and the Company. Mrs Anne-Marie Brennan was appointed to the Board of Fidelity with effect from 31 December Mr Mike Nikou resigned from the Board of Fidelity with effect from 31 December V Management of the Company FIL Investment Management (Luxembourg) S.A. ("FIMLUX") as the Management Company, is responsible for the investment management, administration and distribution functions of the Company. FIMLUX may delegate part or all of such functions to third parties, subject to retaining overall control and supervision. With the consent of the Company, FIMLUX has delegated the investment management function to FIL Fund Management Limited ("FFML") and the distribution function to FIL Distributors ("FID"). FIMLUX performs the central administration function. As such, FIMLUX processes subscriptions, redemptions, switches and transfers of Shares and enters these transactions in the Company's register of Shareholders. FIMLUX provides services to the Company in connection with keeping the Company's accounts, determination of the Net Asset Value of Shares in the sub-fund on each Valuation Date and despatch of dividend payments. FIMLUX is formally responsible for the Annual Report and Accounts of the Company for each financial year, which are required under general principles to give a true and fair view of the state of affairs of the Company. In accordance with those same principles, FIMLUX is responsible for: selecting suitable accounting policies and applying them consistently; preparing the Financial Statements on a going concern basis; maintaining proper accounting records which disclose at any time the financial position of the Company; and complying with both the Luxembourg Law of 10 August 1915 on commercial companies and part I of the Luxembourg Law of 17 December 2010, as amended, on undertakings for collective investment. Supervisory Officers FIMLUX has appointed three Supervisory Officers (the "SOs"), namely Mr Stephan von Bismarck, Mr Nishith Gandhi and Mrs Corinne Lamesch. Supervisory Officers Responsibilities The SOs have a duty to ensure that the tasks of the General Distributor, the Investment Manager as well as the administrative functions carried out by the Management Company are performed in compliance with Luxembourg Law, the Company's Articles of Incorporation and the current Prospectus. Amongst other things, the SOs ensure compliance with the investment restrictions of the Company and oversee the implementation of the investment policy of the sub-fund by the appointed Investment Manager. The Management Company and/or the SOs shall report to the Board on a semi-annual basis, and the SOs shall inform the Management Company and the Board without delay of any materially adverse matters resulting from the actions of the Investment Manager, the General Distributor and of the Management Company in relation to the administrative functions. 2

5 Directors' Report. VI Role of Investment Manager and Central Administrative Agent FFML provides day-to-day investment management of the Company, under the supervision and subject to the control of FIMLUX and its SOs. FFML is authorised to act on behalf of the Company and to select agents, brokers and dealers through whom to execute transactions and is required to provide FIMLUX and the Board with any reports they may require. FFML may receive investment advice from, and act upon the advice of, any company within the FIL Limited ("FIL") organisation, including affiliate companies of FFML, and may execute, transact and otherwise carry out its functions, duties and obligations with or through any of these Fidelity companies. FFML remains responsible for the proper performance by such companies of those responsibilities. The duties of the Investment Manager include the design, implementation and maintenance of controls and procedures to administer the assets of the Company and to manage its affairs properly. The system extends to operational and compliance controls and risk management. In addition, the Company and FIMLUX have appointed FIL to provide services in relation to the investments of the sub-fund including valuation, statistical, technical, reporting and other assistance.. VII Corporate Governance The Board applies a clear and transparent corporate governance framework for the management of the Company's affairs. 1. The Board has adopted the principles of good governance as set out in the ALFI (Association of the Luxembourg Fund Industry) code of conduct issued in June 2013 and considers that the Company has been in compliance with them in all material respects throughout the financial year ended 31 January There are contractual arrangements in place governing the relationships with FIMLUX, FFML, FID and FIL as well as other third party suppliers to the Company. 3. The Directors take decisions in the interests of the Company and its Shareholders and refrain from taking part in any deliberation or decision which creates conflict between their personal interests and those of the Company and its Shareholders. 4. The Board meets at least twice a year. The Board requests and receives reports from FIMLUX and its SOs, FFML, FID and FIL on the various activities including compliance controls and risk management undertaken by the relevant FIL companies. Senior representatives of these companies attend meetings by invitation, thus enabling the Board to question the reports presented to it. 5. As part of the control framework within FIL, all FIL group employees are subject to a Code of Ethics, which, among other things, sets out procedures for personal account dealing in securities. The Board receives regular reports on the Code of Ethics to ensure that any conflicts of interest between personal accounts dealing by FIL group staff and the interests of the Company are properly managed. 6. The Board reviews the Annual Report, the external audit process, corporate governance issues, sub-custodian arrangements and the relationship with the external Auditor, including the recommendation to Shareholders of its appointment and level of fees. 7. The nomination of new Directors is considered by the Board and is subject to the approval of the CSSF and ultimately the approval of Shareholders at the Annual General Meeting. Directors, all of whom are affiliated with FFML or its holding company or its subsidiaries, have waived their fees for the year ended 31 January The Directors are committed to ensuring that Shareholders are kept informed of matters relevant to their investment and that all Shareholders are treated fairly. The maintenance and integrity of information concerning the Company on the FIL website is the responsibility of FIL. FIMLUX is responsible for the accuracy of translations of legal documents which may be available to investors in languages other than English. The Directors approve the English form of the Financial Statements presented to them at Board meetings. The approved external Statutory Auditor (réviseur d'entreprises agréé), PricewaterhouseCoopers, Société coopérative, being eligible, offers itself for re-election for the year 1 February 2017 to 31 January VIII Other Information Commissions and Interfunding FFML uses supplemental research in the course of its work for the Company and other clients that are paid for or provided by brokers through whom the Investment Manager executes transactions for the Company and other clients. The Company participates in the Investment Manager's interfunding programme whereby FIL's traders, on occasion, identify situations where an account or sub-fund managed by FIL is buying the same security that another account or sub-fund is selling. If a trader can confirm that it would be in the interests of both accounts to execute a transaction between them rather than in the market then an interfund transaction is executed. Swiss investors Swiss investors are advised that the present sub-fund of the Company has been authorised by the Swiss Financial Market Supervisory Authority for distribution in Switzerland. 3

6 Directors' Report. IX Business of the Annual General Meeting The Board of Directors is proposing the following resolutions be put to the Shareholders at the Annual General Meeting of the Company to be held on 26 May 2017 at noon at 2a rue Albert Borschette, L-1246 Luxembourg: the presentation of the Report of the Board of Directors; the presentation of the Audit Report; the approval of the Statement of Net Assets and Statement of Operations and Changes in Net Assets for the year ended 31 January 2017; the discharge of the Board of Directors; the election/re-election of the Directors; the re-election of the external Auditor; and consideration of such other business that may properly come before the Annual General Meeting under the Articles of Association. BOARD OF DIRECTORS FIDELITY FUNDS II 24 April

7 Directors and Supervisory Officers Board of Directors of Fidelity Nishith Gandhi FIL (Luxembourg) S.A. Anne-Marie Brennan Director Corporate Director Director Represented by Marc Wathelet United Kingdom Board of Directors of the Management Company Jon Skillman John Ford Allan Pelvang Director Director Director United Kingdom Bermuda Marc Wathelet Chairman Supervisory Officers of the Management Company Stephan von Bismarck Nishith Gandhi Corinne Lamesch Supervisory Officer Supervisory Officer Supervisory Officer United Kingdom 5

8 Investment Manager s Report* Performance Overview Fixed income markets performed well in 2016, as headwinds to global growth, such as high debt, deteriorating demographics and low inflation encouraged central banks to retain their accommodative monetary policies. For instance, government bonds benefited from the Bank of Japan's decision to adopt negative interest rates and the European Central Bank's announcement of another set of easing measures. Credit markets did not fare too well in February 2016, due to increasing concerns over falling oil prices and the health of the European banking sector. However, sentiment rebounded fairly quickly, turning positive in March, as spreads tightened from their earlier highs. Meanwhile, politics increasingly took centre stage in the latter part of the period, with the UK's decision to leave the European Union, Donald Trump's victory in the US elections, and an increased focus on fiscal stimulus weighing on bond returns. In the US, Trump's election and his promise of looser fiscal policy sent yields and inflation expectations sharply higher, as markets priced in higher levels of Treasury issuance to pay for tax cuts and infrastructure spending. As widely anticipated, the US Federal Reserve raised interest rates in December. However, it struck an aggressive tightening stance, raising the projection for interest rate cuts in Despite a turbulent year, credit spreads tightened, due to technical support in Europe and the UK and an improvement in the US growth outlook. On the macroeconomic front, the US economy grew at an annualised rate of 1.6% in Strong consumer spending was a key factor driving GDP growth. A pickup in business investment, rebound in home construction and stronger spending by state and local governments also supported the economy. Meanwhile, inflation continued to rise, with the headline Consumer Price Index (CPI) rising to 2.1% in December on an annualised basis. Core CPI, which excludes energy and food components, also inched up to 2.2% in December. Labour market conditions continue to tighten, with recent data showing a drop in the number of people filing for unemployment aid. Performance** Sub Fund Name Currency One Year Five Year Since Launch US Dollar Currency Fund - A Shares (USD) USD 0.05% 0.25% 67.35% * The information stated in this report is historical and not necessarily indicative of future performance. ** Returns are calculated from published Net Asset Value price to published Net Asset Value price. This calculation does not include any initial charge. In all instances annual fees and expenses are included. The calculation represents the true investment performance of the class of Shares, in the currency of the class. 6

9 US Dollar Currency Fund Schedule of Investments as at 31 January Country Code Ccy Shares or Nominal Year-end % Net Value USD Assets Securities Admitted to or Dealt on an Official Stock Exchange Securities Admitted to or Dealt on an Official Stock Exchange Financials Bank of Tokyo-Mitsubishi 1.20% 10/03/ A JP USD 4,125,000 4,125, Bank of Tokyo-Mitsubishi 2.35% 23/02/2017 Reg S JP USD 3,000,000 3,001, ,127, Money Market Instruments Money Market Instruments La Banque Postale CD 0.569% 03/02/2017 FR USD 12,000,000 11,999, Bank of Montreal CD 1.046% 20/03/2017 CA USD 12,000,000 11,983, Sumitomo Mitsui Trust Bank CD 1.082% 05/04/2017 JP USD 12,000,000 11,977, DekaBank CP 1.095% 13/03/2017 DE USD 10,000,000 9,987, Mizuho Bank London CD 1.099% 11/04/2017 GB USD 9,000,000 8,981, KBC Bank CD 0.887% 06/02/2017 BE USD 7,500,000 7,498, ABN Amro Bank CP 1.05% 21/03/2017 NL USD 7,500,000 7,489, Barclays CP 0.823% 09/05/2017 GB USD 7,000,000 7,000, Rabobank Australia CD 0.939% 02/03/2017 AU USD 7,000,000 6,994, Schlumberger Finance CP 1.05% 19/04/2017 NL USD 7,000,000 6,984, Agence Centrale CP 1.15% 18/04/2017 FR USD 7,000,000 6,983, Nordea Bank CP 1.13% 27/03/2017 SE USD 6,500,000 6,489, Standard Chartered Bank Sing CD 1.00% 21/02/2017 SG USD 6,000,000 5,996, BFCM Paris CP 1.06% 01/03/2017 FR USD 6,000,000 5,995, KBC Bank CD 1.116% 03/03/2017 BE USD 6,000,000 5,994, Standard Chartered Bank Sing CD 1.023% 07/03/2017 SG USD 6,000,000 5,994, Commonwealth Bank Australia CP 1.02% 05/04/2017 AU USD 6,000,000 5,989, Zurich Holding America CP 1.05% 10/04/2017 US USD 6,000,000 5,988, Agence Centrale CP 1.096% 10/04/2017 FR USD 6,000,000 5,987, DZ Bank CD 1.04% 18/04/2017 DE USD 6,000,000 5,986, Rabobank Australia CD 1.02% 20/04/2017 AU USD 6,000,000 5,986, CDC CP 1.16% 21/06/2017 FR USD 6,000,000 5,973, Toronto CP 1.20% 19/06/2017 CA USD 6,000,000 5,972, Toronto Dominion Bank CD 1.208% 05/07/2017 CA USD 6,000,000 5,969, Allianz CP 1.305% 05/07/2017 DE USD 6,000,000 5,966, CSFB Australia CP 0.94% 03/02/2017 AU USD 5,000,000 4,999, Mitsubishi UFJ Trust & Bank CD 0.649% 03/02/2017 JP USD 5,000,000 4,999, Belgium CP 0.90% 09/02/2017 BE USD 5,000,000 4,999, Commonwealth Bank Australia CP 1.18% 21/03/2017 AU USD 5,000,000 4,992, Toyota Finance Australia CP 1.01% 10/04/2017 AU USD 3,000,000 2,994, Toyota Finance Australia CP 1.01% 10/04/2017 (A) AU USD 2,000,000 1,996, SNCF CP 1.04% 27/04/2017 (A) FR USD 2,000,000 1,995, SNCF CP 1.04% 27/04/2017 FR USD 2,000,000 1,995, Zurich Holding America CP 1.07% 27/04/2017 US USD 1,500,000 1,496, Belgium CP 0.90% 10/02/2017 BE USD 1,000, , ,636, Fractions (1) (0.00) Total Investments (Cost USD 220,763,617) 220,763, ,763, Bank Deposits Bank Deposits Bred Banque Populaire TD 0.77% 01/02/2017 FR USD 33,676,632 33,676, ING Bank TD 0.70% 01/02/2017 NL USD 10,000,000 10,000, Natixis TD 1.118% 18/05/2017 FR USD 5,000,000 5,000, ,676, Total Investments (including Bank Deposits) 269,440, ,440, Other Assets and Liabilities (5,828,607) (2.22) Net Assets 263,611, ,611, GEOGRAPHICAL SPLIT Country Country Code % Net Assets France FR Australia AU Netherlands NL 9.28 Japan JP 9.14 Canada CA 9.08 Germany DE 8.32 Belgium BE 7.39 UK GB 6.06 Singapore SG 4.55 USA US 2.84 Sweden SE 2.46 Cash and other net liabilities (2.22) The accompanying notes to the financial statements form an integral part of these financial statements. The percentage of net assets in the schedule of investments and in the geographical split is subject to rounding. 7

10 Statement of Net Assets as at 31 January 2017 Currency Fund: NAME US Dollar Currency Fund CURRENCY USD ASSETS Investments in securities at market value 220,763,617 Bank deposits 48,676,632 Dividends and interest receivable 102,269 Total Assets 269,542,518 LIABILITIES Payables on fund Shares redeemed 5,666,013 Expenses payable 264,863 Total Liabilities 5,930,876 NET ASSETS as at ,611,642 NET ASSETS as at ,165,186 NET ASSETS as at ,458,892 COST OF INVESTMENTS 220,763,617 The accompanying notes to the financial statements form an integral part of these financial statements. 8

11 Statement of Net Asset Value per Share as at 31 January 2017 Name - Currency Shares outstanding as at : Net Asset Value per share as at : Net Asset Value per share as at : Net Asset Value per share as at : Currency Fund US Dollar Currency Fund - USD - A Shares (USD) 7,875, The accompanying notes to the financial statements form an integral part of these financial statements. 9

12 Statement of Operations and Changes in Net Assets for the year ended 31 January 2017 Currency Fund: NAME US Dollar Currency Fund CURRENCY USD INVESTMENT INCOME Net dividend and interest income 1,952,745 Net income 1,952,745 EXPENSES Investment management fee 2,675,782 Administration expenses 267,574 Government taxes 26,018 Custody fees 26,929 Other expenses 36,807 Total expenses 3,033,110 Expense reimbursement (1,214,184) Net expenses 1,818,926 NET INVESTMENT INCOME / (LOSS) 133,819 Net realised gain / (loss) on securities 6,707 RESULTS OF OPERATIONS 140,526 CAPITAL SHARE TRANSACTIONS Proceeds from fund Shares issued 183,968,095 Payment for fund Shares redeemed (157,660,178) Equalisation (1,987) Increase / (decrease) derived from capital share transactions 26,305,930 NET INCREASE / (DECREASE) 26,446,456 NET ASSETS Beginning of year 237,165,186 End of year 263,611,642 The accompanying notes to the financial statements form an integral part of these financial statements. 10

13 Statement of Share Statistics as at 31 January 2017 Name - Currency Shares outstanding - beginning of year Shares Issued Shares Redeemed Net increase / (decrease) in Shares Shares outstanding - end of year Currency Fund US Dollar Currency Fund - USD - A Shares (USD) 7,089,331 5,499,118 (4,712,689) 786,429 7,875,760 The accompanying notes to the financial statements form an integral part of these financial statements. 11

14 Notes to the Financial Statements 1. General The Company is an open-ended investment company constituted in Bermuda on 1 November 1991 and redomiciled in Luxembourg as a SICAV on 31 July The Company is governed under part I of the amended Luxembourg Law of 17 December 2010 relating to undertakings for collective investment and implements Directive 2014/91/EU ("UCITS V Directive"). The Company may be composed of several sub-funds each relating to a separate investment portfolio of securities, cash and other assets. As at 31 July 2017, the Company consisted of 1 active sub-fund. 2. Significant Accounting Policies The financial statements are prepared in accordance with the Luxembourg legal and regulatory requirements relating to undertakings for collective investments. Calculation of the Net Asset Value. The Net Asset Value per Share of each class of Shares, is calculated by determining first the proportion of the net assets of the relevant sub-fund attributable to each class of Shares. Each such amount will be divided by the number of Shares of the relevant class outstanding as at close of business to the extent feasible. The Net Asset Value of each class is determined in the principal dealing currency of the respective class. Security Valuation. The valuation of short-dated debt transferable securities and money market instruments is determined by means of the amortised cost method to the extent this does not materially deviate from market value. Under this method, amortised cost is determined by valuing the security at original cost and thereafter accreting (amortising) the discount (premium) to its nominal value at a constant rate until maturity. All other assets are valued in such manner as the Directors of the Company consider appropriate. As at 31 January 2017, all securities in the sub-fund were valued at amortised cost. All holdings owned by the Company are quoted on a regulated market, except where otherwise distinguished in the sub-fund's Schedule of Investments. Fair Value Adjustments Policy. Fair value adjustments may be implemented to protect the interests of the Company's Shareholders against market timing practices. Accordingly if the sub-fund invests in markets that are closed for business at the time the sub-fund is valued, the Directors may, by derogation from the provisions above under security valuation, allow for the securities included in a particular portfolio to be adjusted to reflect more accurately the fair value of the sub-fund's investments at the point of valuation. As at 31 January 2017, the sub-fund was not impacted by this fair value adjustment policy. Bank Deposits. All bank deposits amounts are carried at face value. Investment Security Transactions. Investment security transactions are accounted for on the date securities are purchased or sold. The computation of the cost of sales of securities is made on the basis of average cost. Foreign Exchange. The Directors determine the designated currency of the sub-fund. Fund Share Transactions. The issue and redemption price per Share of the sub-fund is the Net Asset Value per Share on the date of trade. Income. Interest income is accounted for on an accrual basis. Zero Coupon Disclosure. Zero coupon bonds and zero coupon money market instruments are disclosed in the Schedule of Investments at a rate reflecting the actual return. 3. Investment Management Fees and Other Transactions with the Investment Manager or its Affiliates HEADER Pursuant to WITH the Investment BACKGROUND Management Agreement dated 1 June 2012, FFML is entitled to a monthly management fee, accrued daily and based on the average total Net Assets of the sub-fund, at an annual rate of up to 1.00%. During the year ended 31 January 2017 the investment management fee was USD 2,675,782. FIL and its affiliates may waive any or all of their fees and limit the maximum level of expenses (with certain exceptions) that the sub-fund would be paying. No fees were waived by FIL and its affiliates during the year ended 31 January These waivers are voluntary and may be revised or stopped at any time, in which case the Company would bear such fees up to the amount permitted by the Prospectus. FIL and FIMLUX provide valuation, record keeping and administrative services to the Company and earned USD 267,574 in fees for these services during the year ended 31 January During the year ended 31 January 2017, the Company received a discretionary expense reimbursement from FFML in the amount of USD 1,214, Transaction Fees No transaction fees relating to the purchase or sale of securities were charged to the sub-fund during the year ended 31 January Directors Fees All Directors are affiliated with FIL and have waived their fees for the year ended 31 January 2017, so no Directors' fees were charged for the year. 6. Taxation The Company is not liable to any Luxembourg taxes on income or on realised or unrealised capital gains, nor to any Luxembourg withholding tax. The sub-fund is subject to an annual subscription tax of 0.01%, calculated and payable quarterly on the net assets of the sub-fund on the last day of each calendar quarter. Capital gains, dividends and interest may be subject to capital gain and withholding taxes or other taxes imposed by the country of origin concerned and such taxes may not be recoverable by the Company or its Shareholders. 12

15 Notes to the Financial Statements - continued 7. Other Expenses The other expenses include audit fees, legal and professional fees and interest expenses. 8. Global Risk Exposure The global risk exposure is analysed for the sub-fund, and utilising the commitment approach it has been determined that the total derivative exposure is zero for the year ended 31 January Statement of Changes in Investments A list for the sub-fund, specifying for each investment the total purchases and sales which occurred during the year under review, may be obtained free of charge upon request from the Registered Office of the Company or from any of the companies registered as Distributors of the Company. It is possible to receive information about the full holdings of the sub-fund in which you invest, at any point in time during the year. This is available upon request by contacting your usual Fidelity Representative. 10. Other Matters From 18 March 2016, the fee paid to Brown Brothers Harriman (Luxembourg) S.C.A. acting as depositary of Fidelity has increased to an amount not exceeding % per annum of the net assets of the Company. 11. Securities Financing Transactions Regulation As at 31 January 2017, the sub-fund had no financial instruments within the scope of the Securities Financing Transactions Regulation Directive which came into effect on the 13 January Remuneration (unaudited) The Management Company operates under the terms of the Remuneration Policy of FIL Investment Management (Luxembourg) S.A. Under the Remuneration Policy, remuneration is composed of fixed and performance-related compensation. For the fiscal year of the Management Company, ending 30 June 2016, the following remuneration details are applicable. Total Remuneration paid to staff employed by the Management Company EUR 5,577,110 Of which, fixed remuneration EUR 4,420,142 Of which, variable remuneration EUR 1,156,968 Total number of employees of the Management Company (as at 30/06/2016) 60 Portion of remuneration that is attributable to the Company (as at 30/06/2016) 0.26% 13

16 Audit Report To the Shareholders of Fidelity We have audited the accompanying financial statements of Fidelity, which comprise the Statement of Net Assets and the Schedule of Investments as at 31 January 2017 and the Statement of Operations and Changes in Net Assets for the year then ended, and a summary of significant accounting policies and other explanatory notes to the financial statements. Responsibility of the Board of Directors of the SICAV for the financial statements The Board of Directors of the SICAV is responsible for the preparation and fair presentation of these financial statements in accordance with Luxembourg legal and regulatory requirements relating to the preparation of the financial statements and for such internal control as the Board of Directors of the SICAV determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Responsibility of the "Réviseur d'entreprises agréé" Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing as adopted for Luxembourg by the "Commission de Surveillance du Secteur Financier". Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the judgment of the "Réviseur d'entreprises agréé", including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the "Réviseur d'entreprises agréé" considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of Directors of the SICAV, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements give a true and fair view of the financial position of Fidelity as of 31 January 2017, and of the results of its operations and changes in its net assets for the year then ended in accordance with Luxembourg legal and regulatory requirements relating to the preparation of the financial statements. Other information The Board of Directors of the SICAV is responsible for the other information. The other information comprises the information included in the annual report but does not include the financial statements and our audit report thereon. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report this fact. We have nothing to report in this regard. PricewaterhouseCoopers, Société coopérative Represented by Luxembourg, 24 April 2017 Steven Libby PricewaterhouseCoopers, Société coopérative, 2 rue Gerhard Mercator, B.P. 1443, L-1014 Luxembourg T: , F: , Cabinet de révision agréé. Expert-comptable (autorisation gouvernementale n ) R.C.S. Luxembourg B TVA LU

17 Unaudited Supplementary Information The European Directive on Savings Income 2003/48/EC The EU Council Directive 2003/48/EC of 3 June 2003 on taxation of savings income in the form of interest payments (hereinafter the "Directive") provides that from 1 July 2005, paying agents established in a member state of the EU or certain dependent or associated territories of member states who make certain savings income payments to individuals resident in another member state or to residual entities within the sense of the Directive (and, depending on the home state of the paying agent, possibly also to individuals and residual entities within the sense of the Directive resident in certain dependent or associated territories of member states) will be obliged, depending on the jurisdiction of establishment of the paying agent, either to report details of the payment and payee to fiscal authorities or to withhold tax from it. The Directive 2003/48/EC was repealed by the EU Council on 10 November 2015, effective 1 January As of 1 January 2016, Luxembourg applied the automatic exchange of information on interest payments made by a paying agent established in Luxembourg to individuals resident in another EU Member State. The newly adopted directive 2014/107/EU amends provisions of the directive 2003/48/EC on the mandatory automatic exchange of information between tax administrations, with Austria being allowed to start applying this directive up to one year later than other Member States. It extended the scope of that exchange to include interest, dividends and other types of income. The Company falls within the application of the Directive as follows: Sub-fund name Status period Distributions Redemptions Establishing status US Dollar Currency Fund 01/06/16-31/12/16 IN IN Asset test IN = In scope of the Law. 15

18 Directory as at 31 January 2017 Registered Office Fidelity 2a rue Albert Borschette, L-1246 Luxembourg B.P L-1021 Luxembourg Management Company FIL Investment Management (Luxembourg) S.A. 2a rue Albert Borschette, L-1246 Luxembourg B.P L-1021 Luxembourg Investment Manager FIL Fund Management Limited Pembroke Hall 42 Crow Lane Pembroke HM19 Bermuda Depositary Brown Brothers Harriman (Luxembourg) S.C.A. 80, route D'Esch L-1470 Luxembourg General Distributor FIL Distributors Pembroke Hall 42 Crow Lane Pembroke HM19 Bermuda Telephone: (1) Fax: (1) Share Distributors FIL Distributors International Limited PO Box HM670 Hamilton HMCX Bermuda Telephone: (1) Fax: (1) FIL Investments International Oakhill House 130 Tonbridge Road Hildenborough Tonbridge, Kent TN11 9DZ United Kingdom (Authorised and regulated in the UK by the Financial Conduct Authority) Telephone: (44) Fax: (44) FIL (Luxembourg) S.A. 2a rue Albert Borschette, L-1246 Luxembourg B.P L-1021 Luxembourg Telephone: (352) Fax: (352) FIL Investment Management (Hong Kong) Limited 21/F, Two Pacific Place, 88 Queensway, Admiralty, Hong Kong Telephone: (852) Fax: (852) FIL Gestion Washington Plaza 29 rue de Berri F Paris France Telephone: (33) FIL Investment Services GmbH Kastanienhöhe 1 D Kronberg im Taunus Germany Telephone: (49) Fax: (49) FIL Pensions Management Oakhill House 130 Tonbridge Road Hildenborough Tonbridge, Kent TN11 9DZ United Kingdom Telephone: (44) Fax: (44) Financial Administration Services Limited Oakhill House 130 Tonbridge Road Hildenborough Tonbridge, Kent TN11 9DZ United Kingdom Telephone: (44) Fax: (44) Registrar, Transfer Agent, Administrative Service Agent and Domiciliary Agent FIL Investment Management (Luxembourg) S.A. 2a rue Albert Borschette, L-1246 Luxembourg B.P L-1021 Luxembourg Representative for Austria UniCredit Bank Austria AG Lassallestrasse 1 A-1020 Vienna Austria Representative for France BNP Paribas Securities Services S.A. 3 rue d'antin F Paris France Representative for Hong Kong FIL Investment Management (Hong Kong) Limited 21/F, Two Pacific Place, 88 Queensway, Admiralty, Hong Kong Representative for Ireland FIL Fund Management (Ireland) Limited George's Quay House 43 Townsend Street Dublin 2 Ireland Representative for Norway FIL (Luxembourg) S.A. 2a, rue Albert Borschette B.P L-1021 Luxembourg Telephone: (352) Fax: (352) Representative for Sweden Svenska Handelsbanken AB Blasieholmstorg 12 SE Stockholm Sweden Representative for Switzerland BNP Paribas Securities Services, Paris, Succursale de Zurich Selnaustrasse 16 CH-8002 Zurich Switzerland Representative for the United Kingdom FIL Investments International Oakhill House 130 Tonbridge Road Hildenborough Tonbridge, Kent TN11 9DZ United Kingdom (Regulated in the UK by the Financial Conduct Authority) Auditor PricewaterhouseCoopers, Société coopérative 2, rue Gerhard Mercator B.P L-1014 Luxembourg 16

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