We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for real-time alerts, custom portfolio, and market movers
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Abrdn New Dawn Investment Trust Plc | LSE:ABD | London | Ordinary Share | GB00BBM56V29 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 226.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Trust,ex Ed,religious,charty | -19.43M | -23.5M | -0.2186 | -10.34 | 242.98M |
From Apr 2019 to Apr 2024
TIDMABD
RNS Number : 5229I
Aberdeen New Dawn Invest Trust PLC
20 June 2017
ABERDEEN NEW DAWN INVESTMENT TRUST PLC
ANNUAL FINANCIAL REPORT FOR THE YEARED 30 APRIL 2017
Legal Entity Identifier (LEI): 5493002K00AHWEME3J36
Information disclosed in accordance with Section 4.1.3 of the FCA's Disclosure Guidance and Transparency Rules ("DTR")
Investment Objective
To provide shareholders with a high level of capital growth through equity investment in the Asia Pacific countries ex Japan.
Investment Policy
The Company's assets are invested in a diversified portfolio of securities in quoted companies spread across a range of industries and economies in the Asia Pacific region excluding Japan. Investments may also be made through collective investment schemes and in companies traded on stock markets outside the Asia Pacific region.
Gearing
The Board is responsible for determining the gearing strategy for the Company. Gearing is used selectively to leverage the Company's portfolio in order to enhance returns where and to the extent this is considered appropriate to do so. At the year end the Company had net gearing of 9.7% which compares with a current maximum limit set by the Board of 25%. Borrowings are short to medium term and particular care is taken to ensure that any bank covenants permit maximum flexibility of investment policy.
Investment in Other Listed Investment Companies
In addition, it is the investment policy of the Company to invest no more than 15% of its gross assets in other listed investment companies (including investment trusts). As at 30 April 2017, 2.7% of the Company's gross assets were invested in listed investment companies.
Benchmark
Currency-adjusted MSCI All Countries Asia Pacific ex Japan Index.
Management
The investment management of the Company has been delegated by Aberdeen Fund Managers Limited ("AFML", the "AIFM" or the "Manager") to Aberdeen Asset Management Asia Limited ("AAM Asia" or the "Investment Manager"). Both companies are wholly owned subsidiaries of Aberdeen Asset Management PLC.
Website
Up to date information can be found on the Company's website: www.newdawn-trust.co.uk
COMPANY OVERVIEW - FINANCIAL HIGHLIGHTS
Share price total Net asset value return(A) total return (A) 2017 +38.8% 2017 +39.0% 2016 -15.1% 2016 -15.4% Index total return(A) Ongoing charges 2017 +36.4% 2017 0.9% 2016 -12.2% 2016 1.1% Revenue return Dividend per Ordinary per share share 2017 4.05p 2017 4.00p 2016 4.06p 2016 3.90p
(A) Total return represents capital return plus dividends reinvested
For further information, please contact:
Andrew Leigh
Aberdeen Asset Managers Limited 0207 463 6312
Please note that past performance is not necessarily a guide to the future and that the value of investments and the income from them may fall as well as rise. Investors may not get back the amount they originally invested.
COMPANY OVERVIEW - CHAIRMAN'S STATEMENT
Results and Dividend
I am pleased to report a strong performance for your Company for the year ended 30 April 2017. The net asset value ("NAV") total return for the year was 39.0%, ahead of the total return of 36.4% from the MSCI All Countries Asia Pacific ex Japan Index. The share price total return was 38.8%, with the share price of 212.0p at the end of the year representing a discount of 12.3% to the NAV per share (excluding current year income).
The Board is also pleased to announce a final dividend of 3.0p per share (2016: 2.9p), making a total dividend for the year of 4.0p per share (2016: 3.9p), an increase of 2.6% on last year. If approved by shareholders at the Annual General Meeting, the final dividend will be paid on 1 September 2017 to shareholders on the register on 4 August 2017.
Overview
Asian equities rose sharply during the year in Sterling terms, despite intermittent volatility with heightened political uncertainty playing a pivotal role in investor sentiment. This included the UK's vote to leave the European Union which was followed by a sharp fall in Sterling, thereby boosting the value of foreign-currency denominated assets such as those held by the Company. Risk appetites were tested again in the lead-up to, and aftermath of, Donald Trump's victory in the US presidential election. However, once the initial shock receded, Asian markets found considerable support as hopes that the Trump Presidency would usher in a series of reflationary and growth-focused policies outweighed fears around his protectionist stance.
In this environment, the Company's portfolio performed well compared to the benchmark, most notably in Hong Kong, Singapore and Korea. Within these markets, the Company has a particular focus on businesses with wide regional exposure, including Jardine Strategic and ASM Pacific Technology, rather than those that are dependent on their domestic economies. The Company was duly rewarded for this strategy.
Meanwhile, a series of political successes for Prime Minister Narendra Modi drove the overall positive momentum in Indian equities, which account for a large portion of the Company's underlying portfolio. The well-intentioned but poorly executed demonetisation induced a knee-jerk reaction, affecting consumption almost immediately, while also sparking a stockmarket correction. However, this was mitigated by the passage of the much-anticipated GST bill, which should help simplify the costs of doing business, as well as aid export competitiveness over the longer term. Investors also celebrated the ruling party's election win in Uttar Pradesh, the country's largest state, on hopes that an emboldened Modi would press ahead with his reform agenda.
China was one of the region's best-performers as signs of a stabilising economy and government stimulus attracted a steady flow of capital, some of which also found its way to neighbouring markets with trade links to the mainland. The Company's relatively light direct exposure to China weighed on performance. The Manager has, in the past, been wary of investing too heavily here, due to concerns around corporate governance and often opaque company ownership structures. However, given gradual improvements in these areas, the Manager has been steadily increasing exposure to the mainland through the Aberdeen Global - China A Share Fund, which offers good access to China's domestic market with less stock-specific risk.
At the sector level, commodity-related stocks were particularly buoyant given the rebound in oil prices following Opec's deal to cut output and hopes of increased US infrastructure spending which helped the share price performance of a number of holdings in the portfolio. The Company also benefited from the performance of a number of its technology companies.
The Investment Manager's Review gives a more detailed insight into performance during the period.
Gearing
With the Company's borrowings mostly denominated in US and Hong Kong Dollars, the depreciation of Sterling resulted in the value of its loans rising from GBP27.0 million to GBP29.5 million during the year. However, the portfolio's appreciation meant that gearing (net of cash) fell to 9.7%, compared to 11.4% at the start of the year.
Details of the Company's loans are provided in note 12 to the financial statements.
Share Buybacks and Treasury Shares
In line with many other investment trusts, the Company has bought back shares, with the aim of providing a degree of liquidity to the market at times when the discount to the NAV has widened in normal market conditions. It is the view of the Board that this policy is in the interests of shareholders and we review its operation at each Board meeting. The Board will seek to renew the Company's share buyback authority at the Annual General Meeting.
During the year, the Company bought back 3.7 million shares, representing 3.0% of the issued share capital. These shares are held in treasury and, in line with the Company's stated policy on treasury shares, can only be re-issued to the market at a premium to the NAV per share at that time. Shares held in treasury do not qualify to receive dividends. At the end of the year, the Company held 10.1 million shares in treasury, representing 8.6% of the issued share capital (excluding treasury shares).
Since the year end, the Company has bought back a further 565,000 shares to hold in treasury and, as at the date of this Report, there are 10.6 million shares in treasury representing 9.1% of the issued share capital.
In the event of the share price trading at a premium to the NAV per share, Ordinary shares can be re-issued out of treasury more efficiently than new Ordinary shares can be issued. The Board therefore believes that it is appropriate for shares bought back to be held in treasury. Although shares may be held in treasury indefinitely the Board is mindful of the total number of shares held in this way. We have, therefore, decided to adopt a new policy such that, in the event that the number of treasury shares represents more than 10% of the Company's issued share capital (excluding treasury shares) at the end of any financial year, the Company will cancel a proportion of its treasury shares such that the remaining balance will equal 7.5% of the issued share capital. The Board believes that, given the Company's annual 10% share issuance authority, this is a prudent way of managing the Company's capital base. This policy will apply with immediate effect and does not require shareholder approval.
Aberdeen Asset Management
The Board notes the announcements regarding the proposed recommended merger between the parent company of the Company's Manager, Aberdeen Asset Management PLC, and Standard Life PLC. The transaction is subject to regulatory approvals, with an expected completion date in August this year. While Aberdeen has put in place teams to handle the integration, the Board will monitor developments closely to ensure that the existing management team remains focused upon the interests of the Company and its shareholders.
Annual General Meeting
The Annual General Meeting will be held on Wednesday 30 August 2017 at 12 noon at the offices of Aberdeen Asset Management PLC, Bow Bells House, 1 Bread Street, London EC4M 9HH.
Outlook
In the near term, there are grounds for cautious optimism about the Asia Pacific region. Although the so-called 'Trump trade' that has supported global equities for the past few months now seems to be on shakier ground as doubts have grown about the US President's ability to push through promised reforms, Asian markets have taken the bouts of volatility in their stride. Improving corporate earnings, healthier exports and favourable policy-making have been equally instrumental in lifting investor sentiment. The possibility that economic momentum is gaining pace in China has proven a source of comfort, given its fortunes are so crucial to the wider region.
The long term investment case for Asia Pacific remains attractive, underpinned by good demographics, rising wealth and political reform. The Manager continues to have confidence in the Company's underlying holdings, which have been carefully selected for their skilled management, strong balance sheets and good growth prospects through the cycle.
David Shearer
Chairman
19 June 2017
STRATEGIC REPORT - OVERVIEW OF STRATEGY
Business Model
The business of the Company is that of an investment company which seeks to qualify as an investment trust for tax purposes. The Directors do not envisage any change in this activity in the foreseeable future.
Investment Objective
The Company's investment objective is to provide shareholders with a high level of capital growth through equity investment in the Asia Pacific countries ex Japan.
Investment Policy
The Company's assets are invested in a diversified portfolio of securities in quoted companies spread across a range of industries and economies in the Asia Pacific region excluding Japan. Investments may also be made through collective investment schemes and in companies traded on stock markets outside the Asia Pacific region provided that over 75% of their consolidated revenue is earned from trading in the Asia Pacific region or they hold more than 75% of their consolidated net assets in the Asia Pacific region.
Gearing
The Board is responsible for determining the gearing strategy for the Company. Gearing is used selectively to leverage the Company's portfolio in order to enhance returns where and to the extent this is considered appropriate to do so. At the year end the Company had net gearing of 9.7% which compares with a current maximum limit set by the Board of 25%. Borrowings are short to medium term and particular care is taken to ensure that any bank covenants permit maximum flexibility of investment policy.
Investment in Other Listed Investment Companies
In addition, it is the investment policy of the Company to invest no more than 15% of its gross assets in other listed investment companies (including investment trusts). As at 30 April 2017, 2.7% of the Company's gross assets were invested in listed investment companies.
Delivering the Investment Policy
The Directors are responsible for determining the Company's investment objective and investment policy. Day-to-day management of the Company's assets has been delegated, via the AIFM, to the Investment Manager.
Investment Process
The Investment Manager invests in a diversified range of companies throughout the Asia Pacific region in accordance with the investment policy. The Investment Manager follows a bottom-up investment process based on a disciplined evaluation of companies through direct visits by its fund managers. Stock selection is the major source of added value. No stock is bought without the fund managers having first met management. The Investment Manager estimates a company's worth in two stages: quality then price. Quality is defined by reference to management, business focus, the balance sheet and corporate governance. Price is calculated by reference to key financial ratios, the market, the peer group and business prospects. Top-down investment factors are secondary in the Investment Manager's portfolio construction, with diversification rather than formal controls guiding stock and sector weights. Little attention is paid to market capitalisation.
Benchmark
The Company compares its performance to the currency-adjusted MSCI All Countries Asia Pacific ex Japan Index.
Key Performance Indicators ("KPIs")
The Board uses a number of financial performance measures to assess the Company's success in achieving its objective and determining the progress of the Company in pursuing its investment policy. The main KPIs, which are considered at each Board meeting, are shown in the following table
Hot Features
Premium
Performance The Board considers the Company's NAV total
of net asset return figures to be the best indicator of
value ("NAV") performance over time and this is therefore
the main indicator of performance used.
Performance The Board measures performance against the
against benchmark benchmark index - the currency-adjusted MSCI
index All Countries Asia Pacific ex Japan Index.
Revenue return The Board monitors the Company's net revenue
per Ordinary return.
share
Dividends The Board monitors the Company's annual dividends
per share per Ordinary share.
Share price The Board monitors the performance of the
performance Company's share price on a total return basis.
Discount/premium The discount/premium of the share price relative
to NAV to the NAV per share is closely monitored
by the Board.
Ongoing charges The Board monitors the Company's operating
costs carefully.
Principal Risks and Uncertainties
The Company's principal risks and uncertainties form part of this Overview of Strategy and are included in the separate statement below.
Promoting the Company
The Board recognises the importance of promoting the Company to prospective investors both for improving liquidity and enhancing the value and rating of the Company's shares. The Board believes an effective way to achieve this is through subscription to and participation in the promotional programme run by the Aberdeen Group on behalf of a number of investment trusts under its management. The Company's financial contribution to the programme is matched by the Aberdeen Group. The Aberdeen Group Head of Brand reports to the Board giving analysis of the promotional activities as well as updates on the shareholder register and any changes in the make up of that register.
The purpose of the programme is both to communicate effectively with existing shareholders and to gain new shareholders with the aim of improving liquidity and enhancing the value and rating of the Company's shares. Communicating the long-term attractions of the Company is key and therefore the Company also supports the Aberdeen Group's investor relations programme which involves regional roadshows, promotional and public relations campaigns.
Board Diversity
The Board recognises the importance of having a range of skilled, experienced individuals with relevant knowledge in order to allow it to fulfill its obligations. The Board also recognises the benefits and is supportive of the principle of diversity in its recruitment of new Board members. However, in making new appointments, the Board's overriding priority is to appoint the most appropriate candidates, regardless of gender or other forms of diversity. The Board has not therefore set any measurable objectives in relation to its diversity. At 30 April 2017, there were three male Directors and two female Directors.
Environmental, Social and Human Rights Issues
The Company has no employees as the Board has delegated the day-to-day management and administrative functions to the Manager. There are therefore no disclosures to be made in respect of employees. The Company's socially responsible investment policy is set out below.
Socially Responsible Investment Policy
The Directors, through the Manager, encourage companies in which investments are made to adhere to best practice in the area of corporate governance and socially responsible investing. They believe that this can best be achieved by entering into a dialogue with company management to encourage them, where necessary, to improve their policies in both areas.
The Manager's ultimate objective, however, is to deliver superior investment returns for its clients. Accordingly, whilst the Manager will seek to favour companies which pursue best practice in these areas, this must not be to the detriment of the return on the investment portfolio.
UK Stewardship Code and Proxy Voting as an Institutional Shareholder
Responsibility for actively monitoring the activities of portfolio companies has been delegated by the Board to the Manager which has sub-delegated that authority to the Investment Manager.
The full text of the Company's response to the Stewardship Code may be found on its website.
Modern Slavery Act
Due to the nature of the Company's business, being a company that does not offer goods and services to customers, the Board considers that it is not within the scope of the Modern Slavery Act 2015 because it has no turnover. The Company is therefore not required to make a slavery and human trafficking statement. In any event, the Board considers the Company's supply chains, dealing predominantly with professional advisers and service providers in the financial services industry, to be low risk in relation to this matter.
Global Greenhouse Gas Emissions
The Company has no greenhouse gas emissions to report from its operations, nor does it have responsibility for any other emissions producing sources under the Companies Act 2006 (Strategic Report and Directors' Reports) Regulations 2013.
Duration
The Company does not have a fixed life. However, under its Articles of Association, if, in the 90 days preceding the Company's financial year end (30 April), the Ordinary shares have been trading, on average, at a discount in excess of 15% to the underlying NAV (excluding current year income, and with borrowings stated at market value) over the same period, notice will be given of an ordinary resolution to be proposed at the following Annual General Meeting to approve the continuation of the Company. If the resolution for the continuation of the Company is not passed at that Annual General Meeting or any adjournment thereof, the Directors will convene a general meeting to be held not more than three months after the Annual General Meeting at which a special resolution for the winding-up of the Company will be proposed. In the 90 days to 30 April 2017 the average discount to underlying NAV (excluding current year income, and with borrowings stated at market value) of the Ordinary shares was 13.0% and therefore no continuation resolution will be put to the Company's shareholders at this year's Annual General Meeting.
Viability Statement
The Board considers the Company, with no fixed life, to be a long term investment vehicle and it intends to maintain the current mandate. For the purposes of this viability statement, the Board has decided that three years is an appropriate period over which to report. The Board considers that this period reflects a balance between looking out over a long term horizon and the inherent uncertainties of looking out further than three years.
In assessing the viability of the Company over the review period, the Directors have focused upon the following factors:
-- The principal risks and uncertainties detailed below, in particular those relating to investment in Asia Pacific countries, and the steps taken to mitigate these risks.
-- The role of the Audit and Risk Committee in reviewing and monitoring the Company's internal control and risk management systems.
-- The ongoing relevance of the Company's investment objective.
-- The liquidity of the Company's portfolio. All of the Company's investments are in quoted equities actively traded on recognised stock exchanges.
-- The closed-ended nature of the Company which means that it is not subject to redemptions.
-- The use of the Company's share buy back and share issuance policies to help address any imbalance of supply and demand for the Company's shares.
-- The current and maximum levels of gearing, compliance with loan covenants and level of headroom within the financial covenants (see note 12 to the financial statements for details of loan covenants).
-- The ability of the Company to repay or refinance its GBP35 million loan facility on, or before, its maturity in October 2019.
-- The potential requirement of the Board to propose a resolution to approve the continuation of the Company at future Annual General Meetings. As explained above, this is dependent upon the level of discount in the 90 days preceding the Company's financial year end and there is no requirement for such a resolution to be proposed at the forthcoming Annual General Meeting.
In making its assessment, the Board has considered that there are other matters that could have an impact on the Company's prospects or viability in the future, including a large economic shock, significant stock market volatility, and changes in regulation or investor sentiment.
Taking into account the Company's current position and the potential impact of its principal risks and uncertainties, the Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due for a period of three years from the date of this Report.
Future
The majority of the region's economies have high rates of growth relative to developed markets, strong trade and fiscal surpluses and rapidly developing capital markets. Nevertheless, the past has demonstrated that there can be specific risks associated with the region. Many of the non-performance related trends likely to affect the Company in the future are common across all closed-ended investment companies, such as the attractiveness of investment companies as investment vehicles, the impact of regulatory changes (including MiFID II and the Packaged Retail Investment and Insurance Products regulations) and the recent changes to the pensions and savings market in the UK. These factors need to be viewed alongside the outlook for the Company, both generally and specifically, in relation to the portfolio. The Board's view on the general outlook for the Company can be found in the Chairman's Statement whilst the Investment Manager's views on the outlook for the portfolio are included in its statement below.
On behalf of the Board
David Shearer
Chairman
19 June 2017
STRATEGIC REPORT - RESULTS
Financial Highlights (capital return)
30 April 30 April % change
2017 2016
Total assets GBP315,715,000 GBP243,229,000 +29.8
Total equity shareholders'
funds (net assets) GBP286,191,000 GBP216,243,000 +32.3
Market capitalisation GBP247,748,000 GBP188,010,000
Net asset value per share
(including current year
income) 244.90p 179.43p +36.5
Net asset value per share
(excluding current year
income) 241.79p 176.30p +37.1
Share price (mid market) 212.00p 156.00p +35.9
Discount to net asset value
(including current year
income) 13.4% 13.1%
Discount to net asset value
(excluding current year
income) 12.3% 11.5%
MSCI AC Asia Pacific ex
Japan Index (currency adjusted,
capital gains basis) 703.67 531.87 +32.3
Net gearing (A) 9.72% 11.38%
Dividend and earnings
Revenue return per share
(B) 4.05p 4.06p -0.2
Dividends per share (C) 4.00p 3.90p +2.6
Dividend cover 1.01 1.04
Revenue reserves (D) GBP12,582,000 GBP12,417,000
Operating costs
Ongoing charges ratio (E) 0.91% 1.08%
(A) Calculated in accordance with AIC guidance "Gearing
Disclosures post RDR".
(B) Measures the total earnings for the year divided
by the weighted average number of Ordinary shares
in issue (see Statement of Comprehensive Income).
(C) The figures for dividends reflect the years in
which they were earned (see note 8) and assume approval
of the final dividend.
(D) Prior to payment of proposed final dividend.
(E) Ongoing charges ratio has been calculated in
accordance with guidance issued by the AIC as the
total of the management fee and administrative expenses
divided by the average cum income net asset value
throughout the year.
STRATEGIC REPORT - PERFORMANCE
Performance (total return)
1 year 3 year 5 year
return return return
% % %
Net asset value +39.0 +37.6 +48.8
Share price +38.8 +34.7 +46.1
MSCI AC Asia Pacific ex Japan Index
(currency adjusted) +36.4 +47.0 +62.1
Dividends
Rate xd date Record date Payment
date
Interim 2017 1.00p 5 January 6 January 27 January
2017 2017 2017
Proposed final 3.00p 3 August 4 August 1 September
2017 2017 2017 2017
_______
Total 2017 4.00p
_______
Interim 2016 1.00p 7 January 8 January 29 January
2016 2016 2016
Final 2016 2.90p 4 August 5 August 2 September
2016 2016 2016
_______
Total 2016 3.90p
_______
Ten Year Financial Record
Year to 30 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
April
Total revenue
(GBP'000) 4,301 4,734 4,372 5,752 6,799 6,562 6,819 7,412 7,004 6,922
Per share (p)
(A)
Net revenue
return 1.63 2.10 2.37 3.17 3.97 3.89 3.79 4.18 4.06 4.05
Total return 20.30 (30.64) 66.34 26.44 (2.72) 33.49 (18.68) 31.74 (34.72) 68.66
Net dividends
paid/proposed 1.20 1.60 2.00 2.50 3.30 3.40 3.60 3.80 3.90 4.00
Net asset value 129.26 97.42 162.16 186.60 181.38 210.57 188.49 216.67 179.43 244.90
_____ _____ _____ _____ _____ _____ _____ _____ _____ _____
Shareholders'
funds (GBP'000) 160,993 121,339 201,969 232,406 225,908 262,263 234,762 269,398 216,243 286,191
_____ _____ _____ _____ _____ _____ _____ _____ _____ _____
(A) Figures for 2008-2013 have been restated to reflect
the 5:1 sub-division on 3 September 2013.
STRATEGIC REPORT - INVESTMENT MANAGER'S REVIEW
Market Review
Equities in the Asia Pacific region achieved significant gains in the year under review, supported by renewed interest from global investors. In particular, those UK investors with overseas assets benefited from the fall in Sterling to 30 year lows following the result of the UK's referendum on European Union membership.
Meanwhile, the strengthening global economy and a recovery in commodity prices, especially that of oil, bolstered investors' appetite for risk. Despite a hesitant start, Asia-Pacific equities were buoyed by the liquidity-driven run-up as investors from developed markets turned their attention to the region. In the latter part of the year, stockmarkets continued to do well on hopes that Donald Trump's unexpected election as US President would herald expansionary government spending on defence and infrastructure, along with corporate tax cuts.
Portfolio Review
The Company's net asset value total return for the year was 39.0%, which compared to 36.4% for the MSCI All Countries Asia Pacific ex Japan Index. This performance was particularly encouraging as it appears to reflect the markets' return to focusing on corporate fundamentals, which has played well to the bottom-up, stock-picking approach that we favour.
The portfolio's holdings in Hong Kong and Korea were notable contributors to performance. In Hong Kong, Jardine Strategic's share price was supported by expectations that the outlook for its subsidiaries will continue to improve. In particular, its Indonesian unit, Astra International, should benefit from the recovery in its mining services, plantations and financial services businesses. At the same time, its retail arm, Dairy Farm, has achieved higher profit margins by shutting down non-performing stores, while also expanding its more lucrative fresh food segment. In addition, Jardine Strategic's inclusion into the MSCI AC World Index helped its share price. The portfolio also benefited from the performance of HSBC Holdings, which is experiencing an improvement in net interest margins as well as its management's commitment to returning capital to shareholders via a series of share buybacks. ASM Pacific Technology also performed well. We continue to like the company for its market leadership, robust balance sheet and commitment to investing through the business cycle that has helped it maintain its market-leading position.
In Korea, the holding in Samsung Electronics was aided by its share buyback and cancellation programme. We have engaged with management over the need to return excess cash to shareholders, and were pleased when it announced a substantial share buyback programme and agreed to return a portion of its free cashflow to shareholders on an ongoing basis. Samsung also cancelled shares held in treasury, removing the risk of potential dilution.
On the downside, the portfolio's underweight exposure to China and Taiwan was detrimental to performance. The lack of direct exposure to Chinese internet companies, Tencent and Alibaba, in addition to the tech-heavy Taiwanese stockmarket, impacted performance. Chinese equities, along with those in the technology sector, rebounded on the back of improved market stability. However, in the first half of the year, we initiated a position in the Aberdeen Global - China A Share Fund which rose over the course of the year. The A Share Fund provides the portfolio with an exposure to China, while offering some measure of diversification. The introduction of this position reflects our increased comfort with holding mainland companies, having seen improvements in both their quality of earnings and corporate governance standards. This also allowed us to initiate a direct holding in newly-listed Yum China in the second half of the year. A spin off from Yum Brands, it offers direct exposure to the Chinese consumer. It is one of the largest restaurant operators on the mainland, running the KFC, Pizza Hut, East Dawning and Little Sheep chains. Its 7,200 outlets generate US$6.9 billion in revenue. It is backed by a strong balance sheet and high cashflow.
In addition to the portfolio changes referred to in the Half-Yearly Report, we recently initiated a holding in Singapore-based hospital operator Raffles Medical Group. Its long-term growth prospects appear attractive, with healthcare spending in Asia expected to grow for the foreseeable future. Raffles Medical has established itself as an efficient healthcare provider in the domestic market, where it has a solid operational history and a well-recognised brand. The group is not only expanding capacity at home but also venturing abroad, with a focus on China where it has invested in two hospital projects - in Shanghai and Chongqing. Together, these will add 1,100 beds to the group's overall capacity and should contribute to profits from 2018.
Corporate Governance and Engagement
As active managers, we seek to share with the management of investee companies the insight and experiences that we have accrued through decades of engaging with companies throughout the region. We believe that, ultimately, this has allowed us to become better stewards of capital. Key examples of our efforts in the second half of the year include discussions with DBS Bank on topics such as board governance and time commitment; meeting with Keppel's new in-house asset management subsidiary, Keppel Capital, to exchange views on strategy; communicating with Naver about capital allocation and corporate structure; and discussions with AmorePacific on how to improve quality following product recalls.
Corporate governance is one of Aberdeen's cornerstones. In trying to align the interest of the underlying holdings with that of your Company, it also allows us to unlock the value of these companies, which have conservatively managed balance sheets. We believe it is the right approach to investing in Asia as markets across the region are unique, each jurisdiction with its own set of rules and standards, as well as risks. Regular and active engagement allows us to encourage companies to become even better at what they do. To achieve our goal, we try to use persuasion, not confrontation. The best companies will welcome us, and have a natural interest in value creation. This is something that we will continue to do to ensure that the companies maintain their solid fundamentals, and that their long-term growth potential remains undiminished over the long term.
Outlook
Prospects for the global economy appear generally upbeat, supported by economic growth in Europe and the US. The outlook for the Asia Pacific region is also improving, especially the reform-fuelled growth in India. China appears relatively stable, although elevated debt levels are a cause for concern. From a stock market perspective, valuations in the region are undemanding and we remain satisfied that the portfolio's holdings are focused on stringent cost controls. They are also frontrunners in their respective fields and invest to maintain their lead, through product innovation, as well as research and development. In addition, they are led by experienced management and armed with considerable financial muscle. These efforts should stand them in good stead over the longer term.
Aberdeen Asset Management Asia Limited
19 June 2017
STRATEGIC REPORT - PRINCIPAL RISKS AND UNCERTAINTIES
There are a number of risks which, if realised, could have a material adverse effect on the Company and its financial condition, performance and prospects. The risks and uncertainties faced by the Company are reviewed by the Audit and Risk Committee in the form of a risk matrix, and the principal risks and uncertainties facing the Company at the current time, together with a description of the mitigating actions the Board has taken, are set out in the table below. The Board has carried out a robust assessment of these risks, which include those that would threaten its business model, future performance, solvency or liquidity. The principal risks associated with an investment in the Company's shares are published monthly on the Company's factsheet and they can be found in the pre-investment disclosure document ("PIDD") published by the Manager, both of which are available on the Company's website.
Risk Mitigating Action Investment strategy The Board keeps the level of discount and objectives - at which the Company's shares trade, the setting of an as well as the investment objective unattractive strategic and policy under review and holds proposition to the an annual strategy meeting where it market and the failure reviews investor relations reports
to adapt to changes and updates from the Investment Manager
in investor demand and the Company's Broker.
may lead to the Company
becoming unattractive The Directors are updated at each
to investors, a decreased Board meeting on the composition of,
demand for its shares and any movements in, the shareholder
and a widening discount. register.
Investment management The Board meets the Manager on a regular
- investing outside basis and keeps investment performance
of the investment under close review. Representatives
restrictions and of the Investment Manager attend all
guidelines set by Board meetings and a detailed formal
the Board could result appraisal of the Aberdeen Group is
in poor performance carried out annually by the Management
and an inability Engagement Committee.
to meet the Company's
objectives, as well The Board sets, and monitors, the
as a widening discount. investment restrictions and guidelines,
and receives regular reports which
include performance reporting on the
implementation of the investment policy,
the investment process and application
of the guidelines. The Board also
monitors the Company's share price
relative to the net asset value per
share.
Investment limits
In addition to the limits set out
in the investment policy, the Investment
Manager is authorised by the Board
to invest up to 15% of the Company's
gross assets in any single stock,
calculated at the time an investment
is made.
Income/dividends The Directors review detailed income
- the level of the forecasts at each Board meeting. The
Company's dividends Company has built up significant revenue
and future dividend reserves which can be drawn upon if
growth will depend required should there be a shortfall
on the performance in revenue returns.
of the underlying
portfolio. Any change
in the tax treatment
of dividends or interest
received by the Company
may reduce the level
of net income available
for the payment of
dividends to shareholders.
Financial - the financial The financial risks associated with
risks associated the Company include market risk, liquidity
with the portfolio risk and credit risk, all of which
could result in losses are mitigated by the Investment Manager.
to the Company. Further details of the steps taken
to mitigate the financial risks associated
with the portfolio are set out in
note 16 to the financial statements.
Gearing - a fall The Board sets the gearing limits
in the value of the within which the Investment Manager
Company's investment can operate. Gearing levels and compliance
portfolio could be with loan covenants are monitored
exacerbated by the on an ongoing basis by the Manager
impact of gearing. and at regular Board meetings. In
It could also result the event of a possible impending
in a breach of loan covenant breach, appropriate action
covenants. would be taken to reduce borrowing
levels.
In addition, AFML, as alternative
investment fund manager, has set overall
leverage limits.
Regulatory - failure The Board and Manager monitor changes
to comply with relevant in government policy and legislation
laws and regulations which may have an impact on the Company,
(including the Companies and the Audit and Risk Committee monitors
Act, The Financial compliance with regulations by reviewing
Services and Markets internal control reports from the
Act, The Alternative Manager. From time to time the Board
Investment Fund Managers employs external advisers to advise
Directive, accounting on specific matters.
standards, Investment
Trust regulations,
the Listing Rules,
Disclosure Guidance
and Transparency
Rules and Prospectus
Rules) could result
in fines, loss of
reputation and potentially
loss of an advantageous
tax regime.
Operational - the Written agreements are in place with
Company is dependent all third party service providers.
on third parties
for the provision The Board receives reports from the
of all systems and Manager on its internal controls and
services (in particular, risk management throughout the year
those of the Aberdeen and receives assurances from all its
Group) and any control other significant service providers
failures and gaps on at least an annual basis.
in their systems
and services could The Manager monitors closely the control
result in fraudulent environments and quality of services
activities or a loss provided by third parties, including
or damage to the those of the Depositary and Custodian,
Company. through service level agreements,
regular meetings and key performance
indicators.
In addition to the risks stated above, the Board is conscious that investment in Asia Pacific securities, or in companies that derive significant revenue or profit from the Asia Pacific region, involves a greater degree of risk than that usually associated with investment in the securities in developed markets, which may have an adverse effect on economic returns or restrict investment opportunities. These risks include:
-- greater risk of social, political and economic instability; the small size of the markets for securities of emerging markets issuers and associated low volumes of trading give rise to price volatility and a lack of liquidity;
-- certain national policies which may restrict the investment opportunities available in respect of a fund, including restrictions on investing in issuers or industries deemed sensitive to national interests; changes in taxation laws and/or rates which may affect the value of the Company's investments;
-- the absence in some markets of developed legal structures governing private or foreign investment and private property leading to supervision and regulation; and changes in government which may have an adverse effect on economic reform. Companies in the Asia Pacific region are not, in all cases, subject to the equivalent accounting, auditing and financial standards of those in the United Kingdom; and
-- currency fluctuations which may affect the value of the Company's investments and the income derived therefrom.
PORTFOLIO - TEN LARGEST INVESTMENTS
As at 30 April 2017
Valuation Total Valuation
2017 Assets 2016
Company Industry Country GBP'000 % GBP'000
Aberdeen Global - Indian
Equity Fund(B) 39,165 12.4 24,674
A tax-efficient pooled Collective India
India fund with a long-term Investment
investment approach Scheme
managed by the same
team managing the Company.
Jardine Strategic Holdings 16,379 5.2 11,247
A Hong Kong conglomerate Industrial Hong
with regional interests Conglomerates Kong
in retail, property,
hotels and auto distribution.
It provides the Company
with a diversified
exposure to the Asian
consumer, backed by
good distribution networks,
established franchises
and a decent valuation.
Samsung Electronics
Pref 16,151 5.1 12,415
A leading semiconductor Technology South
company which is also Hardware Korea
a major player in mobile Storage
phones and TFT-LCDs. & Peripherals
The Company owns the
preferred shares, which
trade at a discount
to the ordinary shares.
Oversea-Chinese Banking
Corporation 13,325 4.2 10,714
A Singapore lender Banks Singapore
that is evolving into
a regional financial
services firm, with
a meaningful presence
in Southeast Asia.
Its acquisition of
Wing Hang Bank, subject
to regulatory approval,
will also give it access
to greater China and
the offshore yuan market,
augmented by its stake
in Bank of Ningbo.
Taiwan Semiconductor
Manufacturing Company 11,660 3.7 8,689
The world's largest Semiconductors Taiwan
dedicated semiconductor & Semiconductor
foundry, it provides Equipment
wafer manufacturing,
wafer probing, assembly
and testing, mask production
and design services.
Aberdeen Global - China A Share Equity Fund (B) 11,354 3.6 - The Fund offers a selection Collective China of Chinese companies Investment that benefits from Scheme rising consumption and incomes of a growing middle class. However, investing in the A-share market remains challenging and we believe it is more prudent to do so via a pooled vehicle offering diversification with lower stock-specific risk and volatility. AIA Group 10,604 3.4 9,012 A leading pan-Asian Insurance Hong life insurance company, Kong it is poised to take advantage of Asia's growing affluence, backed by an effective agency force and solid fundamentals. Ayala Land 9,447 3.0 8,233 A leading property Real Estate Philippines developer in the Philippines Management with an attractive & Development land bank, well-respected brand and expertise across residential, commercial and retail sectors. City Developments 9,294 2.9 7,726 A leading Singapore-based Real Estate Singapore property developer Management with seasoned management. & Development We see value in the company, not just from its sizeable low-cost land bank but also from its holding in the global Millennium & Copthorne hotel chain. CSL 9,173 2.9 5,179 The vertically-integrated Biotechnology Australia biopharmaceutical company has a portfolio of plasma products that has both breadth and depth, and is backed by a steady balance sheet. There is potential to grow its recently acquired vaccine business, while prospects for its more mature Albumin business is likely to come from the increasingly affluent emerging markets. Top ten investments 146,552 46.4
PORTFOLIO - OTHER INVESTMENTS
As at 30 April 2017
Valuation Total Valuation
2017 Assets 2016
Company Industry Country GBP'000 % GBP'000
Construction
Siam Cement (Foreign) Materials Thailand 8,100 2.6 7,725
Rio Tinto (London
Listing) Metals & Mining Australia 7,935 2.5 7,106
Diversified
Telecommunication
Singapore Telecommunication Services Singapore 7,342 2.3 6,942
Wireless Telecommunication
China Mobile Services China 7,296 2.3 6,924
Bank Central Asia Banks Indonesia 6,752 2.2 2,202
Singapore Technologies Aerospace
Engineering & Defence Singapore 6,400 2.0 6,559
Hong
HSBC Holdings Banks Kong 6,371 2.0 7,096
Real Estate
Swire Pacific B Shares Management Hong
(C) & Development Kong 6,278 2.0 6,828
Aberdeen New India Investment
Inv. Trust Trusts India 5,730 1.8 4,143
Standard Chartered United
(London listing) Banks Kingdom 5,527 1.8 5,798
Top twenty investments 214,283 67.9
Industrial
Keppel Corporation Conglomerates Singapore 5,481 1.7 4,119
Internet Software South
Naver Corporation & Services Korea 5,291 1.7 1,254
BHP Billiton (London
listing) Metals & Mining Australia 5,051 1.6 4,860
Real Estate
Management Hong
Swire Properties & Development Kong 4,882 1.6 3,363
Wireless Telecommunication
Taiwan Mobile Services Taiwan 4,727 1.5 4,475
United
M.P. Evans Group Food Products Kingdom 4,212 1.3 2,557
Electronic
Equipment,
Instruments
Venture Corp & Components Singapore 4,116 1.3 2,594
Hong Kong Exchanges Hong
& Clearing Capital Markets Kong 3,990 1.3 2,427
United Overseas Bank Banks Singapore 3,799 1.2 7,420
Hotels, Restaurants
Yum China Holdings & Leisure China 3,612 1.1 -
Top thirty investments 259,444 82.2
DBS Group Holdings Banks Singapore 3,581 1.1 2,495
Semiconductors
& Semiconductor Hong
ASM Pacific Technology Equipment Kong 3,482 1.1 1,488
Vietnam Dairy Products Food Products Vietnam 3,406 1.1 1,048
CIMB Group Holdings Banks Malaysia 3,164 1.0 2,419
Household
Unilever Indonesia Products Indonesia 3,159 1.0 2,697
John Keells Holdings Industrial Sri
(D) Conglomerates Lanka 3,095 1.0 2,326
Anhui Conch Cement Construction
H Shares Materials China 2,976 0.9 1,109
Food & Staples South
E-Mart Retailing Korea 2,963 0.9 3,327
Real Estate
Management Hong
Hang Lung Group & Development Kong 2,838 0.9 1,847
Aberdeen Asian Smaller
Companies Inv. Trust Investment Other
(D E) Trusts Asia 2,786 0.9 2,663
Top forty investments 290,894 92.1
Real Estate
Management Hong
Hang Lung Properties & Development Kong 2,665 0.8 1,795
Food & Staples Hong
Dairy Farm International Retailing Kong 2,611 0.8 2,664
Public Bank Berhad Banks Malaysia 2,562 0.8 2,353
Amorepacific Corporation South
(F) Personal Goods Korea 2,521 0.8 1,118
Oil, Gas &
Consumable
PetroChina H Shares Fuels China 2,483 0.8 4,645
Hong
MTR Corporation Road & Rail Kong 2,192 0.7 1,627
Astra International Automobiles Indonesia 1,928 0.6 1,297
Health Care
Providers
Raffles Medical & Services Singapore 1,543 0.5 -
Air Freight Hong
Kerry Logistics Network & Logistics Kong 1,406 0.5 -
Industrial Sri
Aitken Spence & Co. Conglomerates Lanka 1,261 0.4 1,673
Top fifty investments 312,066 98.8
Sri
DFCC Bank Banks Lanka 1,113 0.4 1,206
Health Care
Bangkok Dusit Medical Providers
Services & Services Thailand 351 0.1 -
Total investments 313,530 99.3 Net current assets (G) 2,185 0.7 Total assets 315,715 100.0 (B) No double-charging of management fees by Aberdeen. (C) 2016 holding merged two equity holdings, with values split as follows: A shares GBP475,000 and B shares GBP6,353,000. (D) 2016 holding comprised equity and warrant GBP2,318,000 and GBP8,000. (E) 2016 holding comprised equity and convertible unsecured loan stock split GBP2,177,000 and GBP486,000. (F) Holding merges two equity holdings with values split as follows: Ordinary shares GBP299,000 and Preference shares GBP2,222,000 (2016 - GBP1,118,000). (G) Excluding bank loans of GBP29,524,000. Note: Unless otherwise stated, foreign stock is held and all investments are equity holdings.
PORTFOLIO - CHANGES IN ASSET DISTRIBUTIONS
Value Sales Appreciation/ Value
at at
30 April Purchases proceeds (depreciation) 30 April
2016 2017
Country GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Australia 24,006 3,580 12,212 6,785 22,159
China 12,678 14,300 2,430 3,173 27,721
Hong Kong 49,394 3,217 8,329 19,416 63,698
India 28,817 5,620 - 10,458 44,895
Indonesia 6,196 2,908 - 2,735 11,839
Malaysia 4,772 111 - 843 5,726
Other Asia 2,663 - 524 647 2,786
Philippines 8,233 426 - 788 9,447
Singapore 48,569 3,502 10,463 13,273 54,881
South Korea 18,114 5,405 6,988 10,395 26,926
Sri Lanka 6,175 127 1,139 306 5,469
Taiwan 13,164 - 2,476 5,699 16,387
Thailand 7,725 362 1,455 1,819 8,451
United Kingdom 8,355 - 2,010 3,394 9,739
Vietnam 1,048 1,887 - 471 3,406
_________ _________ _________ _________ _________
Total investments 239,909 41,445 48,026 80,202 313,530
Net current assets
(A) 3,320 - - (1,135) 2,185
_________ _________ _________ _________ _________
Total assets
less current
liabilities 243,229 41,445 48,026 79,067 315,715
_________ _________ _________ _________ _________
(A) Excluding bank loans
of GBP29,524,000.
DIRECTORS' REPORT (EXTRACT)
The Directors present their report and the audited financial statements for the year ended 30 April 2017.
Results and Dividends
The financial statements for the year ended 30 April 2017 are contained below. An interim dividend of 1.0p per Ordinary share was paid on 27 January 2017 and the Board recommends a final dividend of 3.0p per Ordinary share, payable on 1 September 2017 to shareholders on the register on 4 August 2017. The relevant ex-dividend date is 3 August 2017. A resolution in respect of the final dividend will be proposed at the forthcoming Annual General Meeting.
Investment Trust Status
The Company is registered as a public limited company (registered in England and Wales No. 02377879) and is an investment company within the meaning of Section 833 of the Companies Act 2006. The Company has been approved by HM Revenue & Customs as an investment trust subject to it continuing to meet the relevant eligibility conditions of Section 1158 of the Corporation Tax Act 2010 and the ongoing requirements of Part 2 Chapter 3 Statutory Instrument 2011/2999 for all financial years commencing on or after 1 May 2012. The Directors are of the opinion that the Company has conducted its affairs for the year ended 30 April 2017 so as to enable it to comply with the ongoing requirements for investment trust status.
Individual Savings Accounts
The Company has conducted its affairs in such a way as to satisfy the requirements as a qualifying security for Individual Savings Accounts. The Directors intend that the Company will continue to conduct its affairs in this manner.
Capital Structure
The issued Ordinary share capital at 30 April 2017 consisted of 116,862,098 Ordinary shares of 5p and 10,073,567 shares held in treasury. During the year the Company purchased 3,656,912 Ordinary shares to be held in treasury and, since the end of the year, it has purchased a further 565,000 Ordinary shares to be held in treasury. At the date of approval of this Report there were 116,297,098 Ordinary shares of 5p in issue and 10,638,567 shares held in treasury.
Voting Rights
Each Ordinary shareholder is entitled to one vote on a show of hands at general meetings of the Company and, on a poll, to one vote for every share held. The Ordinary shares, excluding treasury shares, carry a right to receive dividends. On a winding up or other return of capital, after meeting the liabilities of the Company, the surplus assets will be paid to Ordinary shareholders in proportion to their shareholdings.
There are no restrictions on the transfer of Ordinary shares in the Company other than certain restrictions which may from time to time be imposed by law.
Management Agreement
The Company has appointed Aberdeen Fund Managers Limited, a wholly owned subsidiary of Aberdeen Asset Management PLC, as its alternative investment fund manager. AFML has been appointed to provide investment management, risk management, administration and company secretarial services to the Company as well as promotional activities. The Company's portfolio is managed by Aberdeen Asset Management Asia Limited by way of a group delegation agreement in place between AFML and AAM Asia. In addition, AFML has sub-delegated promotional activities to Aberdeen Asset Managers Limited and administrative and secretarial services to Aberdeen Asset Management PLC.
Details of the management fee and fees payable for promotional activities are shown in notes 4 and 5 to the financial statements. The management agreement is terminable on not less than 12 months' notice. In the event of termination by the Company on less than the agreed notice period, compensation is payable to the Manager in lieu of the unexpired notice period.
Substantial Interests
At 30 April 2017 the following interests in the issued Ordinary share capital of the Company had been disclosed in accordance with the requirements of the FCA's Disclosure Guidance and Transparency Rules:
Shareholder Number of Ordinary % held(B)
shares held
Aberdeen Investment Trust Share
Plans(A) 9,308,579 7.9
Funds managed by Rathbones 8,443,851 7.2
Old Mutual Plc 6,848,084 5.8
Derbyshire County Council 6,350,000 5.4
City of London Investment Management
Company Ltd 6,017,273 5.1
Wells Capital Management Inc 5,947,051 5.0
(A) Non-beneficial interest
(B) Based on 116,862,098 Ordinary shares in issue as at 30 April 2017
There have been no changes notified to the Company since the year end as at the date of approval of this Report.
Corporate Governance
The Company is committed to high standards of corporate governance. The Board is accountable to the Company's shareholders for good governance and this statement describes how the Company has applied the principles identified in the UK Corporate Governance Code (the "UK Code"), as published in September 2014 and effective for financial years commencing on or after 1 October 2014, which is available on the Financial Reporting Council's website: frc.org.uk.
The Board has also considered the principles and recommendations of the AIC Code of Corporate Governance (the "AIC Code") by reference to the AIC Corporate Governance Guide for Investment Companies (the "AIC Guide"). The AIC Code, as explained by the AIC Guide, addresses all the principles set out in the UK Code, as well as setting out additional principles and recommendations on issues that are of specific relevance to investment trusts. The AIC Code and AIC Guide are available on the AIC's website: theaic.co.uk.
The Board considers that reporting in accordance with the principles and recommendations of the AIC Code, and by reference to the AIC Guide (which incorporates the UK Code), will provide better information to shareholders. The Board confirms that, during the year, the Company complied with the recommendations of the AIC Code and the relevant provisions of the UK Code, except as set out below.
The UK Code includes provisions relating to:
-- the role of the chief executive (A.1.2); -- executive directors' remuneration (D.1.1 and D.1.2); and -- the need for an internal audit function (C.3.6).
For the reasons set out in the AIC Guide, and as explained in the UK Code, the Board considers that these provisions are not relevant to the position of the Company, being an externally managed investment company. In particular, all of the Company's day-to-day management and administrative functions are outsourced to third parties. As a result, the Company has no executive directors, employees or internal operations. The Company has therefore not reported further in respect of these provisions. The Company is also non-compliant with Provision A.4.1 of the UK Code which states that the Board should appoint a Senior Independent Director. The Board has considered whether a Senior Independent Director should be appointed and has concluded that, given the current size of the Board and the fact that it is comprised entirely of non-executive Directors, this is unnecessary at the present time.
The full text of the Company's Corporate Governance Statement can be found on its website.
Directors
The Board comprise five Directors, consisting of an independent non-executive Chairman and four non-executive Directors. Ms Sears was appointed as a Director on 1 August 2016 and stood for election at the Annual General Meeting on 31 August 2016. All Directors, with the exception of Mr Young, are considered by the Board to be independent and free of any material relationship with the Aberdeen Group. Mr Young is a Director of various entities connected with, or within, the Aberdeen Group and, as such, is not considered to be independent.
Directors attended scheduled Board and Committee meetings during the year ended 30 April 2017 as shown in the table below (with their eligibility to attend the relevant meeting in brackets).
Manage-ment
Director Nomination Engagement
Audit and Committee Committee
Board Risk Committee Meetings Meetings
Meetings Meetings
D Shearer(A) 6 (6) 2 (2) 1 (1) 1 (1)
J Lorimer 6 (6) 2 (2) 1 (1) 1 (1)
S Rippingall 6 (6) 2 (2) 1 (1) 1 (1)
M Sears(B) 5 (5) 1 (1) 1 (1) - (-)
H Young(C) 6 (6) - (-) 1 (1) - (-)
(A) Mr Shearer is not a member of the Audit and Risk Committee, although attends by invitation.
(B) Appointed on 1 August 2016.
(C) Mr Young is not a member of the Audit and Risk or Management Engagement Committees.
The Board meets more frequently when business needs require.
The Company's Articles of Association require that one third of the Directors retire by rotation at each Annual General Meeting, and that any Director who was not elected or re-elected at one of the preceding two Annual General Meetings also retires by rotation at the Annual General Meeting. However, the Board has decided that, notwithstanding the provisions of the Articles of Association, all Directors will retire at each Annual General Meeting and, if eligible, may seek re-election. Messrs Shearer, Lorimer and Young, Ms Rippingall and Ms Sears will therefore retire and seek re-election at the Annual General Meeting.
The Board believes that, except for Mr Young, all Directors remain independent of the Manager and free from any relationship which could materially interfere with the exercise of their judgement on issues of strategy, performance, resources and standards of conduct. In addition, the Board confirms that, following a formal performance evaluation, the performance of all Directors continues to be effective and demonstrates commitment to the role. The Board therefore recommends the re-election of each of the Directors at the Annual General Meeting.
Directors' and Officers' Liability Insurance
The Company's Articles of Association indemnify each of the Directors out of the assets of the Company against any liabilities incurred by them as a Director of the Company in defending proceedings, or in connection with any application to the Court in which relief is granted. In addition, the Directors have been granted qualifying indemnity provisions by the Company which are currently in force. Directors' and Officers' liability insurance cover has been maintained throughout the year at the expense of the Company.
Management of Conflicts of Interest
The Board has a procedure in place to deal with a situation where a Director has a conflict of interest. As part of this process, each Director prepares a list of other positions held and all other conflict situations that may need to be authorised either in relation to the Director concerned or his or her connected persons. The Board considers each Director's situation and decides whether to approve any conflict, taking into consideration what is in the best interests of the Company and whether the Director's ability to act in accordance with his or her wider duties is affected. Each Director is required to notify the Company Secretary of any potential or actual conflict situations that will need authorising by the Board. Authorisations given by the Board are reviewed at each Board meeting. No Director has a service contract with the Company although all Directors are issued with letters of appointment.
The Board takes a zero-tolerance approach to bribery and has adopted appropriate procedures designed to prevent bribery. The Manager also takes a zero-tolerance approach and has its own detailed policy and procedures in place to prevent bribery and corruption.
Going Concern
The Company's assets consist substantially of equity shares in companies listed on recognised stock exchanges and in most circumstances are realisable within a short timescale. The Board has set limits for borrowing and regularly reviews cash flow projections and compliance with banking covenants. The Directors believe that, after making enquiries, the Company has adequate resources to continue in operational existence for the foreseeable future and has the ability to meet its financial obligations as they fall due for a period of at least twelve months from the date of approval of this Report. Accordingly, they continue to adopt the going concern basis of accounting in preparing the financial statements.
Accountability and Audit
Each Director confirms that, so far as he or she is aware, there is no relevant audit information of which the Company's Auditor is unaware, and they have taken all the steps that they could reasonably be expected to have taken as Directors in order to make themselves aware of any relevant audit information and to establish that the Company's Auditor is aware of that information.
Independent Auditor
The Company's Auditor, KPMG LLP, has indicated its willingness to remain in office. The Board will place resolutions before the Annual General Meeting to re-appoint KPMG LLP as Auditor for the ensuing year and to authorise the Directors to determine its remuneration.
Relations with Shareholders
The Directors place a great deal of importance on communication with shareholders. Shareholders and investors may obtain up to date information on the Company through its website and the Manager's information service.
The Board's policy is to communicate directly with shareholders and their representative bodies without the involvement of the management group (including the Company Secretary or the Manager) in situations where direct communication is required, and representatives from the Board meet with major shareholders on an annual basis in order to gauge their views.
In addition, the Company Secretary only acts on behalf of the Board, not the Manager, and there is no filtering of communication. At each Board meeting the Board receives full details of any communication from shareholders to which the Chairman responds personally as appropriate.
The Notice of the Annual General Meeting is sent out at least 20 working days in advance of the meeting. All shareholders have the opportunity to put questions to the Board and Manager at the meeting.
The Company has adopted a nominee code, which ensures that, when shares in the Company are held in the name of nominee companies and notification has been received in advance, nominee companies will be provided with copies of shareholder communications for distribution to their investors. Nominee investors may attend and speak at general meetings.
Participants in the Aberdeen Investment Trust Share Plan and ISA, whose shares are held in the nominee name of the plan administrator, are given the opportunity to vote at the Annual General Meeting by means of a Letter of Direction enclosed with the Annual Report. When forwarded to the plan administrator, the voting instructions given in the Letter of Direction will in turn be reflected in the proxy votes lodged by the plan administrator.
Electronic Communications
The Company's Articles of Association allow shareholders to elect to receive communications from the Company and allow voting in electronic format. If shareholders would like to receive future communications in electronic format they should contact the Company's registrar, Equiniti Limited. If shareholders wish to continue to receive Annual Reports and other communications in hard copy format only they need take no further action.
Annual General Meeting
The Annual General Meeting will be held at the offices of Aberdeen Asset Management PLC, Bow Bells House, 1 Bread Street, London EC4M 9HH on 30 August 2017 at 12 noon.
By order of the Board
Aberdeen Asset Management PLC
Company Secretary
19 June 2017
STATEMENT OF COMPREHENSIVE INCOME
Year ended 30 Year ended 30 April
April 2017 2016
Revenue Capital Total Revenue Capital Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Gains/(losses) on
investments held
at fair value through
profit or loss 10 - 80,202 80,202 - (45,629) (45,629)
Income 3 6,922 - 6,922 7,004 - 7,004
Management fee 4 (810) (810) (1,620) (829) (829) (1,658)
Administrative expenses 5 (766) - (766) (734) - (734)
Exchange losses - (2,477) (2,477) - (959) (959)
_______ _______ ______ _______ ______ _______
Net return before
finance costs and
taxation 5,346 76,915 82,261 5,441 (47,417) (41,976)
Interest payable
and similar charges 6 (257) (257) (514) (227) (227) (454)
Return before taxation 5,089 76,658 81,747 5,214 (47,644) (42,430)
Taxation 7 (279) - (279) (226) - (226)
_______ _______ ______ _______ ______ _______
Return after taxation 4,810 76,658 81,468 4,988 (47,644) (42,656)
_______ _______ ______ _______ ______ _______
Return per Ordinary
share (pence) 9 4.05 64.61 68.66 4.06 (38.78) (34.72)
_______ _______ ______ _______ ______ _______
The total column of this statement represents the profit
and loss account of the Company.
The Company does not have any income or expense that
is not included in "Return after taxation" and therefore
this represents the "Total comprehensive income for
the year".
All revenue and capital items are derived from continuing
operations.
The accompanying notes are an integral part of the financial
statements.
STATEMENT OF FINANCIAL POSITION
As at As at
30 April 30 April
2017 2016
Notes GBP'000 GBP'000
Fixed assets
Investments at fair value through
profit or loss 10 313,530 239,909
_________ _________
Current assets
Debtors 11 1,052 1,319
Cash at bank and in hand 1,719 2,369
_________ _________
2,771 3,688
_________ _________
Creditors: amounts falling due
within one year 12
Loans (24,524) (21,986)
Other creditors (586) (368)
_________ _________
(25,110) (22,354)
_________ _________
Net current liabilities (22,339) (18,666)
_________ _________
Total assets less current liabilities 291,191 221,243
Non-current creditors 12
Loans (5,000) (5,000)
_________ _________
Net assets 286,191 216,243
_________ _________
Share capital and reserves
Called-up share capital 13 6,347 6,347
Share premium account 17,955 17,955
Special reserve - 5,411
Capital redemption reserve 10,207 10,207
Capital reserve 14 239,100 163,906
Revenue reserve 12,582 12,417
_________ _________
Equity shareholders' funds 286,191 216,243
_________ _________
Net asset value per Ordinary
share (pence) 15 244.90p 179.43p
_________ _________
The accompanying notes are an integral part of the financial statements.
STATEMENT OF CHANGES IN EQUITY
For the year ended
30 April 2017
Share Capital
Share premium Special redemption Capital Revenue
capital account reserve reserve reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 30 April
2016 6,347 17,955 5,411 10,207 163,906 12,417 216,243
Buy back of Ordinary
shares for treasury - - (5,411) - (1,464) - (6,875)
Return after taxation - - - - 76,658 4,810 81,468
Dividends paid
(see note 8) - - - - - (4,645) (4,645)
______ ______ ______ ______ ______ ______ ______
Balance at 30 April
2017 6,347 17,955 - 10,207 239,100 12,582 286,191
______ ______ ______ ______ ______ ______ ______
For the year ended
30 April 2016
Share Capital
Share premium Special redemption Capital Revenue
capital account reserve reserve reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 30 April
2015 6,347 17,955 11,218 10,207 211,550 12,121 269,398
Buy back of Ordinary
shares for treasury - - (5,807) - - - (5,807)
Return after taxation - - - - (47,644) 4,988 (42,656)
Dividends paid
(see note 8) - - - - - (4,692) (4,692)
______ ______ ______ ______ ______ ______ ______
Balance at 30 April
2016 6,347 17,955 5,411 10,207 163,906 12,417 216,243
______ ______ ______ ______ ______ ______ ______
The revenue reserve represents the amount of the Company's
reserves distributable by way of dividend.
The accompanying notes are an integral part of the financial
statements.
STATEMENT OF CASHFLOWS
Year ended Year ended
30 April 30 April
2017 2016
Notes GBP'000 GBP'000
Operating activities
Net return before finance costs
and taxation 82,261 (41,976)
Adjustment for:
(Gains)/losses on investments (80,202) 45,629
Currency losses 2,477 959
Decrease in accrued dividend
income 244 619
Decrease/(increase) in other
debtors 16 (7)
Increase/(decrease) in other
creditors 160 (261)
Stock dividends included in
investment income (871) (521)
Overseas withholding tax (271) (205)
_______ _______
Net cash flow from operating
activities 3,814 4,237
Investing activities
Purchases of investments (40,574) (16,549)
Sales of investments 48,026 23,078
_______ _______
Net cash from investing activities 7,452 6,529
Financing activities
Equity dividends paid 8 (4,645) (4,692)
Interest paid (509) (453)
Buy back of Ordinary shares
for treasury 13 (6,821) (5,807)
_______ _______
Net cash used in financing
activities (11,975) (10,952)
_______ _______
Decrease in cash (709) (186)
_______ _______
Analysis of changes in cash
during the year
Opening balance 2,369 2,614
Effect of exchange rate fluctuations
on cash held 59 (59)
Decrease in cash as above (709) (186)
_______ _______
Closing balances 1,719 2,369
_______ _______
The accompanying notes are an integral part of the financial statements.
NOTES TO THE FINANCIAL STATEMENTS:
For the year ended 30 April 2016
1. Principal activity
The Company is a closed-end investment company,
registered in England & Wales No 02377879, with
its Ordinary shares being listed on the London Stock
Exchange.
2. Accounting policies
(a) Basis of accounting
The financial statements have been prepared in
accordance with Financial Reporting Standard 102
and with the Statement of Recommended Practice
'Financial Statements of Investment Trust Companies
and Venture Capital Trusts' issued in November
2014 and updated in January 2017 with consequential
amendments. The financial statements are prepared
in sterling which is the functional currency of
the Company and rounded to the nearest GBP'000.
They have also been prepared on a going concern
basis and on the assumption that approval as an
investment trust will continue to be granted.
The Directors have, at the time of approving the
financial statements, a reasonable expectation
that the Company has adequate resources to continue
in operational existence for the foreseeable future.
Thus they continue to adopt the going concern
basis of accounting in preparing the financial
statements.
(b) Valuation of investments
Listed investments have been designated upon initial
recognition as fair value through profit or loss.
Investments are recognised and de-recognised on
the trade date at cost. Subsequent to initial
recognition, investments are valued at fair value
which for listed investments is deemed to be bid
market prices. Gains and losses arising from changes
in fair value are included as a capital item in
the Statement of Comprehensive Income and are
ultimately recognised in the capital reserve.
(c) Income
Dividends, including taxes deducted at source,
are included in revenue by reference to the date
on which the investment is quoted ex-dividend.
Special dividends are reviewed on a case-by-case
basis and may be credited to capital, if circumstances
dictate. Dividends receivable on equity shares
where no ex-dividend date is quoted are brought
into account when the Company's right to receive
payment is established. Fixed returns on non-equity
shares are recognised on a time apportioned basis
so as to reflect the effective yield on shares.
Other returns on non-equity shares are recognised
when the right to return is established. Where
the Company has elected to receive its dividends
in the form of additional shares rather than cash,
the amount of the scrip dividend is recognised
as income. Any excess in the value of the shares
received over the amount of the cash dividend
is recognised in capital reserves. Interest receivable
on bank balances is dealt with on an accruals
basis.
(d) Expenses
All expenses are accounted for on an accruals
basis. Expenses are charged through the revenue
column of the Statement of Comprehensive Income
except as follows:
* expenses directly relating to the acquisition or
disposal of an investment, in which case, they are
added to the cost of the investment or deducted from
the sale proceeds. Such transaction costs are
disclosed in accordance with the SORP. These expenses
are charged to the capital column of the Statement of
Comprehensive Income and are separately identified
and disclosed in note 9; and
* the Company charges 50% of investment management fees
and finance costs to the capital column of the
Statement of Comprehensive Income, in accordance with
the Board's expected long term return in the form of
capital gains and income respectively from the
investment portfolio of the Company.
(e) Taxation
The tax payable is based on the taxable profit
for the year. Taxable profit differs from net
profit as reported in the Statement of Comprehensive
Income because it excludes items of income or
expenditure that are taxable or deductible in
other years and it further excludes items that
are never taxable or deductible (see note 7 for
a more detailed explanation). The Company has
no liability for current tax.
Deferred taxation is provided on all timing differences,
that have originated but not reversed at the Statement
of Financial Position date, where transactions
or events that result in an obligation to pay
more or a right to pay less tax in future have
occurred at the Statement of Financial Position
date, measured on an undiscounted basis and based
on enacted tax rates. This is subject to deferred
tax assets only being recognised if it is considered
more likely than not that there will be suitable
profits from which the future reversal of the
underlying timing differences can be deducted.
Timing differences are differences arising between
the Company's taxable profits and its results
as stated in the accounts which are capable of
reversal in one or more subsequent periods. Due
to the Company's status as an investment trust
company, and the intention to continue to meet
the conditions required to obtain approval for
the foreseeable future, the Company has not provided
deferred tax on any capital gains and losses arising
on the revaluation or disposal of investments.
(f) Foreign currencies
Assets and liabilities in foreign currencies are
translated at the rates of exchange ruling on
the Statement of Financial Position date. Transactions
involving foreign currencies are converted at
the rate ruling on the date of the transaction.
Gains and losses on the realisation of foreign
currencies are recognised in the Statement of
Comprehensive Income and are then transferred
to the capital reserve.
The Company's investments and borrowings are made
in a number of currencies, however the Board considers
the Company's functional currency to be Sterling.
In arriving at this conclusion, the Board considered
that the shares of the Company are listed on the
London Stock Exchange, it is regulated in the
United Kingdom, principally having its shareholder
base in the United Kingdom, pays dividends and
expenses in Sterling. Consequently, the Board
also considers the Company's presentational currency
to be Sterling.
(g) Dividends payable
Dividends are recognised from the date on which
they are declared and approved by shareholders.
Interim dividends are recognised when paid.
(h) Nature and purpose of reserves
Called up share capital
The Ordinary share capital on the Statement of
Financial Position relates to the number of shares
in issue and in treasury. Only when the shares
are cancelled, either from treasury or directly,
is a transfer made to the capital redemption reserve.
Share premium account
The balance classified as share premium includes
the premium above nominal value from the proceeds
on issue of any equity share capital comprising
ordinary shares of 5p.
Special reserve
The special reserve arose following Court approval
in 1999 to transfer GBP50m from the share premium
account. This reserve was distributable and has
been extinguished to fund share buy backs to be
held in treasury by the Company.
Capital redemption reserve
The capital redemption reserve is used to record
the amount equivalent to the nominal value of
any of the Company's own shares purchased and
cancelled in order to maintain the Company's capital.
Capital reserve
Gains or losses on disposal of investments and
changes in fair values of investments are transferred
to the capital reserve. The capital element of
the management fee and relevant finance costs
are charged to this reserve. Any associated tax
relief is also credited to this reserve. During
the year the costs of share buybacks to be held
in treasury have also been deducted from this
reserve as the special reserve has now been extinguished.
Revenue reserve
This reserve reflects all income and costs which
are recognised in the revenue column of the Statement
of Comprehensive Income. The revenue reserve represents
the amount of the Company's reserves distributable
by way of dividend.
2017 2016
3. Income GBP'000 GBP'000
Income from investments
UK dividend income 877 1,434
UK investment income 8 16
Overseas dividends 5,164 5,029
Scrip dividends 871 521
_______ _______
6,920 7,000
_______ _______
Other income
Deposit interest 2 4
_______ _______
Total income 6,922 7,004
_______ _______
2017 2016
Revenue Capital Total Revenue Capital Total
4. Management fee GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Management fee 810 810 1,620 829 829 1,658
_______ _______ _______ _______ _______ _______
Management and secretarial services are provided
by Aberdeen Fund Managers Limited ("AFML").
With effect from 1 July 2016, the Board and the
Manager agreed a new rate for calculating the Company's
management fees payable to AFML. The management
fee is payable monthly in arrears based on an annual
rate of 0.85%, previously 1%, of the net asset value
of the Company valued monthly, with the following
provisions for commonly managed funds:
* the Company's investments in Aberdeen Global - Indian
Equity Fund, Aberdeen Asian Smaller Companies
Investment Trust PLC and Aberdeen New India
Investment Trust PLC are excluded from the
calculation of the investment management fee. The
total value of such commonly managed funds, on a bid
price basis (basis on which management fee is
calculated), at the year end was GBP47,681,000 (2016
- bid basis - GBP31,481,000).
* the Company receives a rebate from the Manager for
the amount of fees in excess of 0.85%, previously 1%,
of net assets charged by the Manager for any commonly
managed fund.
The balance due to AFML at the year end, net of
any rebates was GBP278,000 (2016 - GBP138,000).
The agreement is terminable by either party on not
less than twelve months' notice to the other.In
the event of termination by the Company on less
than the agreed notice period, compensation is payable
to the Manager in lieu of the unexpired notice period.
2017 2016
5. Administrative expenses GBP'000 GBP'000
Promotional activities 158 158
Directors' fees 131 136
Safe custody fees 130 111
Auditor's remuneration:
* fees payable to the Company's auditor for the audit
of the Company's annual accounts 15 15
* fees payable to the Company's auditor for the review
of the Company's half yearly accounts 4 4
Other administration expenses 328 310
_______ _______
766 734
_______ _______
The Company has an agreement with AFML for the provision
of promotional activities. The total fees payable
during the year were GBP158,000 (2016 - GBP158,000)
and the sum due to AFML at the year end was GBP53,000
(2016 - GBP13,000).
No pension contributions were made in respect of
any of the Directors.
The Company does not have any employees.
2017 2016
Revenue Capital Total Revenue Capital Total
6. Interest payable GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
and similar charges
On bank loans 257 257 514 227 227 454
_______ _______ _______ _______ _______ _______
2017 2016
Revenue Capital Total Revenue Capital Total
7. Taxation GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
(a) Analysis of charge
for the year
Overseas tax 339 - 339 278 - 278
Overseas tax
reclaimable (60) - (60) (52) - (52)
Total tax charge
for the year 279 - 279 226 - 226
(b) Factors affecting the tax charge for the year
The tax assessed for the year is lower than the
current standard rate of corporation tax in the
UK.
2017 2016
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Net return on
ordinary activities
before taxation 5,089 76,658 81,747 5,214 (47,644) (42,430)
_______ _______ ______ _______ _______ ______
Net return on
ordinary activities
multiplied by
effective standard
rate of corporation
tax in the UK
of 19.92% (2016
- 20%) 1,014 15,270 16,284 1,043 (9,529) (8,486)
Effects of:
Non-taxable
UK dividend
income (253) - (253) (290) - (290)
Non-taxable
overseas dividends (1,103) - (1,103) (1,066) - (1,066)
Overseas tax
suffered 279 - 279 226 - 226
Surplus management
expenses and
loan relationship
deficits not
relieved 342 213 555 313 211 524
Non-taxable
exchange losses - 493 493 - 192 192
Non-taxable
(gains)/losses
on investments - (15,976) (15,976) - 9,126 9,126
_______ _______ ______ _______ _______ _______
Total tax charge 279 - 279 226 - 226
_______ _______ ______ _______ _______ _______
(c) Provision for deferred taxation
No provision for deferred taxation has been made
in the current year or in the prior year.
The Company has not provided for deferred tax
on capital gains or losses arising on the revaluation
or disposal of investments as it is exempt from
tax on these items because of its status as an
investment trust company.
(d) Factors that may affect future tax charges
At the year end, the Company has an unrecognised
deferred tax asset of GBP3,429,000 (2016 - GBP3,392,000)
arising as a result of excess management expenses
and non-trade loan relationship deficits. These
expenses will only be utilised if the Company
has profits chargeable to corporation tax in the
future.
2017 2016
8. Dividends GBP'000 GBP'000
Amounts recognised as distributions
to equity holders in the period:
Final dividend for 2016 - 2.9p (2015
- 2.8p) 3,464 3,469
Interim dividend for 2017 - 1.0p (2016
- 1.0p) 1,181 1,223
_______ _______
4,645 4,692
_______ _______
The proposed final dividend in respect of the year
ended 30 April 2017 is subject to approval by shareholders
at the Annual General Meeting and has not been included
as a liability in these financial statements.
The table below sets out the proposed final dividend,
together with the interim dividend paid, in respect
of the financial year, which is the basis on which
the requirements of Section 1158 of the Corporation
Tax Act 2010 are considered. The revenue available
for distribution by way of dividend for the year
is GBP4,810,000 (2016 - GBP4,988,000).
2017 2016
GBP'000 GBP'000
Interim dividend for 2017 - 1.0p (2016
- 1.0p) 1,181 1,223
Proposed final dividend for 2017 -
3.0p (2016 - 2.9p) 3,489 3,475
_______ _______
4,670 4,698
_______ _______
Subsequent to the year end the Company has purchased
for treasury a further 565,000 Ordinary shares.
Therefore the amounts reflected above for the cost
of the proposed final dividend for 2017 are based
on 116,297,098 Ordinary shares in issue, being the
number of Ordinary shares in issue at the date of
this Report.
2017 2016
9. Return per Ordinary share GBP'000 p GBP'000 p
Revenue return 4,810 4.05 4,988 4.06
Capital return 76,658 64.61 (47,644) (38.78)
_______ _______ _______ _______
Total return 81,468 68.66 (42,656) (34.72)
_______ _______ _______ _______
Weighted average number of Ordinary
shares in issue (A) 118,657,145 122,842,641
(A) Calculated excluding __________ __________
shares held in treasury.
Listed Listed
overseas in UK Total
10. Investments GBP'000 GBP'000 GBP'000
Fair value through profit or
loss:
Opening book cost 119,708 30,165 149,873
Opening fair value gains/(losses)
on investments held 93,074 (3,038) 90,036
_______ _______ _______
Opening valuation 212,782 27,127 239,909
Movements in the year:
Purchases at cost 39,592 1,853 41,445
Sales - proceeds (40,271) (7,755) (48,026)
Sales - realised gains/(losses) 14,743 (602) 14,141
Current year fair value gains
on investments held 55,442 10,619 66,061
_______ _______ _______
Closing valuation 282,288 31,242 313,530
_______ _______ _______
Closing book cost 133,772 23,661 157,433
Closing fair value gains on investments
held 148,516 7,581 156,097
_______ _______ _______
282,288 31,242 313,530
_______ _______ _______
2017 2016
GBP'000 GBP'000
Investments listed on an overseas
investment exchange 282,288 212,782
Investments listed on the UK
investment exchange 31,242 27,127
_______ _______
313,530 239,909
_______ _______
2017 2016
Gains/(losses) on investments held GBP'000 GBP'000
at fair value through profit or loss
Realised gains on sales 14,141 4,701
Increase/(decrease) in fair
value gains on investments held 66,061 (50,330)
_______ _______
80,202 (45,629)
_______ _______
Transaction costs
During the year expenses were incurred in acquiring
or disposing of investments classified as fair value
through profit or loss. These have been expensed
through capital and are included within gains/(losses)
on investments held at fair value through profit
or loss in the Statement of Comprehensive Income.
The total costs were as follows:
2017 2016
GBP'000 GBP'000
Purchases 46 32
Sales 85 34
_______ _______
131 66
_______ _______
2017 2016
11. Debtors GBP'000 GBP'000
Prepayments and accrued income 980 1,244
Other loans and receivables 72 75
_______ _______
1,052 1,319
_______ _______
2017 2016
12. Creditors GBP'000 GBP'000
Amounts falling due within one year:
a) Loans
Foreign currency loans 22,024 19,486
Sterling loan 2,500 2,500
_______ _______
24,524 21,986
_______ _______
2017 2016
b) Other GBP'000 GBP'000
Amounts due to brokers 117 63
Other creditors 469 305
_______ _______
586 368
_______ _______
2017 2016
Non-current creditors: GBP'000 GBP'000
Sterling loan 5,000 5,000
_______ _______
At the year end the Company's secured floating rate
bank loans of HK$154,100,000 (2016 - HK$154,100,000),
equivalent to GBP15,315,000 (2016 - GBP13,561,000),
US$8,680,000 (2016 - US$8,680,000), equivalent to
GBP6,709,000 (2016 - GBP5,925,000), GBP2,500,000
(2016 - GBP2,500,000), with a maturity date of 24
May 2017 (2016 - 25 May 2016), and fixed rate bank
loan of GBP5,000,000 (2016 - GBP5,000,000), were
drawn down from the GBP35,000,000 facility with
The Royal Bank of Scotland at interest rates of
1.41%, 1.99%, 1.26% and 2.75% (2016 - 1.23%, 1.44%,
1.51% and 2.75%) respectively.
As of the latest date prior to the signing of this
Report the HK$154,100,000, US$8,680,000 and GBP2,500,000
loans had been drawn down to 23 June 2017 at interest
rates of 2.02004%, 1.36339% and 1.25101% respectively.
The terms of the bank loan with The Royal Bank of
Scotland state that:
* the net tangible assets of the Company must be not
less than GBP125 million at all times;
* the ratio of gross borrowings to adjusted assets must
be less than 25% at all times (adjusted assets are
total gross assets less (i) the value of any unlisted
investment; (ii) the value in excess of 10% of total
gross assets invested in the largest single security
or asset; (iii) the value of any single security or
asset (other than the largest security or asset
referred to above) exceeds 5% of gross assets; (iv)
the value in excess of 60% of total gross assets
invested in the top twenty largest investments; (v)
the extent to which the value of securities in
collective investment schemes exceeds 30% of gross
assets; and (vi) the extent to which the aggregated
value of securities or assets in countries with a
Standard and Poor's foreign sovereign debt rating
lower than BBB exceeds 30% of gross assets.)
* the facility, under which the loans are made, will
expire on 7 October 2019.
The Company has met all financial covenants throughout
the period and up to the date of this Report.
2017 2016
13. Called-up share capital GBP'000 GBP'000
Allotted, called up and fully paid:
116,862,098 (2016 - 120,519,010) Ordinary
shares of 5p each 5,843 6,026
Held in treasury:
10,073,567 (2016 - 6,416,655) Ordinary
shares of 5p each 504 321
_______ _______
6,347 6,347
_______ _______
During the year 3,656,912 (2016 - 3,814,000) Ordinary
shares of 5p each were repurchased by the Company
at a total cost, including transaction costs, of
GBP6,875,000 (2016 - GBP5,807,000). All of the shares
were placed in treasury. Shares held in treasury
represent 8.62% of the Company's total issued share
capital at 30 April 2017. Shares held in treasury
do not carry a right to receive dividends.
Subsequent to the year end the Company bought back
for treasury a further 565,000 Ordinary shares for
a total consideration of GBP1,238,000.
The investment objective of the Company is to provide
shareholders with a high level of capital growth
through equity investment in the Asia Pacific countries
ex Japan.
The Company manages its capital to ensure that it
will be able to continue as a going concern while
maximising the return to shareholders through the
optimisation of the debt and equity balance.
The Board monitors and reviews the broad structure
of the Company's capital on an ongoing basis. This
review includes:
* the planned level of gearing which takes account of
the Manager's views on the market;
* the level of equity shares in issue; and
* the extent to which revenue in excess of that which
is required to be distributed should be retained.
The Company's objectives, policies and processes
for managing capital are unchanged from the preceding
accounting period.
The Company does not have any externally imposed
capital requirements.
2017 2016
14. Capital reserve GBP'000 GBP'000
At 1 May 2016 163,906 211,550
Movement in fair value gains/(losses) 80,202 (45,629)
Foreign exchange movement (2,477) (959)
Buy back of Ordinary shares for treasury (1,464) -
Expenses allocated to capital (1,067) (1,056)
_______ _______
At 30 April 2017 239,100 163,906
_______ _______
The capital reserve includes investment holding
gains amounting to GBP156,097,000 (2016 - GBP90,036,000),
as disclosed in note 10.
15. Net asset value per share
The net asset value per share and the net asset
values attributable to Ordinary shareholders at
the year end calculated in accordance with the Articles
of Association were as follows:
2017 2016
Net assets attributable (GBP'000) 286,191 216,243
Number of Ordinary shares in issue
(excluding shares held in treasury) 116,862,098 120,519,010
Net asset value per share (p) 244.90 179.43
16. Financial instruments
Risk management
The Company's investment activities expose it to
various types of financial risk associated with
the financial instruments and markets in which it
invests. The Company's financial instruments comprise
securities and other investments, cash balances,
loans and debtors and creditors that arise directly
from its operations; for example, in respect of
sales and purchases awaiting settlement, and debtors
for accrued income.
The Board has delegated the risk management function
to AFML under the terms of its management agreement
with AFML (further details of which are included
under note 4). The Board regularly reviews and agrees
policies for managing each of the key financial
risks identified with the Manager. The types of
risk and the Manager's approach to the management
of each type of risk, are summarised below. Such
approach has been applied throughout the year and
has not changed since the previous accounting period.
Risk management framework
The directors of Aberdeen Fund Managers Limited
collectively assume responsibility for AFML's obligations
under the AIFMD including reviewing investment performance
and monitoring the Company's risk profile during
the year.
AFML is a fully integrated member of the Aberdeen
Group, which provides a variety of services and
support to AFML in the conduct of its business activities,
including in the oversight of the risk management
framework for the Company. The AIFM has delegated
the day to day administration of the investment
policy to Aberdeen Asset Management Asia Limited,
which is responsible for ensuring that the Company
is managed within the terms of its investment guidelines
and the limits set out in its pre-investment disclosures
to investors (details of which can be found on the
Company's website). The AIFM has retained responsibility
for monitoring and oversight of investment performance,
product risk and regulatory and operational risk
for the Company.
The Manager conducts its risk oversight function
through the operation of the Group's risk management
processes and systems which are embedded within
the Group's operations. The Group's Risk Division
supports management in the identification and mitigation
of risks and provides independent monitoring of
the business. The Division includes Compliance,
Business Risk, Market Risk, Risk Management and
Legal. The team is headed up by the Group's Head
of Risk, who reports to the Chief Executive Officer
of the Group. The Risk Division achieves its objective
through embedding the Risk Management Framework
throughout the organisation using the Group's operational
risk management system ("SWORD").
The Group's Internal Audit Department is independent
of the Risk Division and reports directly to the
Group CEO and to the Audit Committee of the Group's
Board of Directors. The Internal Audit Department
is responsible for providing an independent assessment
of the Group's control environment.
The Group's corporate governance structure is supported
by several committees to assist the board of directors
of Aberdeen, its subsidiaries and the Company to
fulfil their roles and responsibilities. The Group's
Risk Division is represented on all committees,
with the exception of those committees that deal
with investment recommendations. The specific goals
and guidelines on the functioning of those committees
are described on the committees' terms of reference.
Risk management
The main risks the Company faces from its financial
instruments are (i) market risk (comprising interest
rate risk, currency risk and price risk), (ii) liquidity
risk and (iii) credit risk.
(i) Market risk
The fair value of, or future cash flows from a financial
instrument held by the Company may fluctuate because
of changes in market prices. This market risk comprises
three elements - interest rate risk, foreign currency
risk and other price risk.
Interest rate risk
Interest rate movements may affect:
* the level of income receivable on cash deposits; and,
* interest payable on the Company's variable rate
borrowings.
Management of the risk
The possible effects on fair value and cash flows
that could arise as a result of changes in interest
rates are taken into account when making investment
and borrowing decisions.
The Board imposes borrowing limits to ensure gearing
levels are appropriate to market conditions and
reviews these on a regular basis. Borrowings comprise
fixed rate, revolving, and uncommitted facilities.
The fixed rate facilities are used to finance opportunities
at low rates and, the revolving and uncommitted
facilities to provide flexibility in the short-term.
Current bank covenant guidelines state that the
total borrowings will not exceed 25% of the adjusted
net assets of the Company as defined in note 12.
Interest risk profile
The interest rate risk profile of the portfolio
of the Company's financial assets and liabilities,
excluding equity holdings which are all non-interest
bearing, at the Statement of Financial Position
date was as follows:
Weighted Weighted
average
period for average Fixed Floating
which
rate is fixed interest rate rate
rate
At 30 April 2017 Years % GBP'000 GBP'000
Assets
Sterling - - - 1,652
Taiwan Dollar - - - 5
US Dollar - - - 56
Vietnam Dong - - - 6
_______ _______
- 1,719
_______ _______
Weighted Weighted
average
period for average Fixed Floating
which
rate is fixed interest rate rate
rate
Years % GBP'000 GBP'000
Liabilities
Bank loan - GBP2,500,000 0.08 1.26 2,500 -
Bank loan - GBP5,000,000 2.44 2.75 5,000 -
Bank loan - HK$154,100,000 0.08 1.41 15,315 -
Bank loan - US$8,680,000 0.08 1.99 6,709 -
_______
29,524 -
_______
Weighted Weighted
average
period for average Fixed Floating
which
rate is fixed interest rate rate
rate
At 30 April 2016 Years % GBP'000 GBP'000
Assets
Indonesian Rupiah - - - 15
Sterling - 0.20 - 2,351
Taiwan Dollar - - - 3
_______ _______
- 2,369
_______ _______
Weighted Weighted
average
period for average Fixed Floating
which
rate is fixed interest rate rate
rate
Years % GBP'000 GBP'000
Liabilities
Bank loan - GBP2,500,000 0.08 1.51 2,500 -
Bank loan - GBP5,000,000 3.44 2.75 5,000 -
Bank loan - HK$154,000,000 0.08 1.23 13,561 -
Bank loan - US$8,680,000 0.08 1.44 5,925 -
_______
26,986 -
_______ _______
The weighted average interest rate is based on the
current yield of each asset, weighted by its market
value. The weighted average interest rate on bank
loans is based on the interest rate payable, weighted
by the total value of the loans. The maturity date
of the Company's loans are shown in note 12.
The floating rate assets consist of cash deposits
on call earning interest at prevailing market rates.
The Company's equity portfolio and short-term debtors
and creditors (excluding bank loans) have been excluded
from the above tables.
Interest rate sensitivity
Movements in interest rates would not significantly
affect net assets attributable to the Company's
shareholders and total profit.
Foreign currency risk
All of the Company's investment portfolio is invested
in overseas securities and the Statement of Financial
Position, therefore, can be significantly affected
by movements in foreign exchange rates.
Management of the risk
It is not the Company's policy to hedge this risk
on a continuing basis but the Company may, from
time to time, match specific overseas investment
with foreign currency borrowings. The Company's
borrowings, as detailed in note 12, are also in
foreign currency.
The revenue account is subject to currency fluctuation
arising on dividends paid in foreign currencies.
The Company does not hedge this currency risk.
Foreign currency exposure by currency of denomination:
30 April 2017 30 April 2016
Net Total Net Total
monetary currency monetary currency
Investments assets exposure Investments assets exposure
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Australian
Dollar 9,173 - 9,173 12,040 - 12,040
Hong Kong
Dollar 57,463 (15,315) 42,148 48,161 (13,561) 34,600
Indonesian
Rupiah 11,839 - 11,839 6,196 15 6,211
Malaysian
Ringgit 5,726 - 5,726 4,772 - 4,772
Philippine
Peso 9,447 - 9,447 8,233 - 8,233
Singapore
Dollar 54,882 - 54,882 48,569 - 48,569
South Korean
Won 26,925 - 26,925 18,114 - 18,114
Sri Lankan
Rupee 5,469 - 5,469 6,175 - 6,175
Sterling 70,406 (5,848) 64,558 51,801 (5,149) 46,652
Taiwanese
Dollar 16,387 5 16,392 13,164 3 13,167
Thailand Baht 8,451 - 8,451 7,725 - 7,725
US Dollar 33,956 (6,653) 27,303 13,911 (5,925) 7,986
Vietnam Dong 3,406 6 3,412 1,048 - 1,048
_______ _______ _______ _______ _______ _______
Total 313,530 (27,805) 285,725 239,909 (24,617) 215,292
_______ _______ _______ _______ _______ _______
Foreign currency sensitivity
The following table details the Company's sensitivity
to a 10% increase and decrease in sterling against
the foreign currencies in which the Company has
exposure. The sensitivity analysis includes foreign
currency denominated monetary items and adjusts
their translation at the period end for a 10% change
in foreign currency rates.
2017 2016
GBP'000 GBP'000
Australian Dollar 917 1,204
Hong Kong Dollar 4,215 3,460
Indonesian Rupiah 1,184 621
Malaysian Ringgit 573 477
Philippine Peso 945 823
Singapore Dollar 5,488 4,857
South Korean Won 2,693 1,811
Sri Lankan Rupee 547 618
Taiwanese Dollar 1,639 1,317
Thailand Baht 845 773
US Dollar 2,730 799
Vietnam Dong 341 105
_______ _______
22,117 16,865
_______ _______
Price risk
Other price risks (ie changes in market prices other
than those arising from interest rate or currency
risk) may affect the value of the quoted investments.
Management of the risk
It is the Board's policy to hold an appropriate
spread of investments in the portfolio in order
to reduce the risk arising from factors specific
to a particular country or sector. Both the allocation
of assets and the stock selection process act to
reduce market risk. The Manager actively monitors
market prices throughout the year and reports to
the Board, which meets regularly in order to review
investment strategy. The investments held by the
Company are listed on various stock exchanges worldwide.
Price risk sensitivity
If market prices at the Statement of Financial Position
date had been 10% higher or lower while all other
variables remained constant, the return attributable
to Ordinary shareholders for the year ended 30 April
2017 would have increased/(decreased) by GBP31,353,000
(2016 - increased/(decreased) by GBP23,991,000)
and equity reserves would have increased/(decreased)
by the same amount.
(ii) Liquidity risk
This is the risk that the Company will encounter
difficulty in meeting obligations associated with
financial liabilities.
Management of the risk
The Board imposes borrowing limits to ensure gearing
levels are appropriate to market conditions and
reviews these on a regular basis. Borrowings comprise
a revolving multi-currency credit facility, which
expires on 7 October 2019. The Board has imposed
a maximum gearing level, measured on the most stringent
basis of calculation after netting off cash equivalents,
of 25%. Details of borrowings at 30 April 2017 are
shown in note 12.
Liquidity risk is not considered to be significant
as the Company's assets comprise mainly readily
realisable securities, which can be sold to meet
funding commitments if necessary. Short-term flexibility
is achieved through the use of the loan facility,
details of which can be found in note 11. Under
the terms of the loan facility, the Manager provides
the lender with loan covenant reports on a monthly
basis, to provide the lender with assurance that
the terms of the facility are not being breached.
The Manager will also review the credit rating of
a lender on a regular basis. Details of the Board's
policy on gearing are shown in the interest rate
risk section of this note.
Liquidity risk exposure
At 30 April 2017 and 30 April 2016 the Company's
floating rate bank loans, amounting to GBP24,524,000
and GBP21,986,000 respectively, were due for repayment
or roll-over within one month of the year end.
(iii) Credit risk
This is the risk of failure of the counterparty
to a transaction to discharge its obligations under
that transaction that could result in the Company
suffering a loss.
Management of the risk
Investment transactions are carried out with a large
number of brokers, whose credit-standing is reviewed
periodically by the Manager, and limits are set
on the amount that may be due from any one broker.
Cash is held only with reputable banks with high
quality external credit enhancements.
Credit risk exposure
In summary, compared to the amounts in the Statement
of Financial Position, the maximum exposure to credit
risk at 30 April was as follows:
2017 2016
Statement Statement
of of
Financial Maximum Financial Maximum
Position exposure Position exposure
GBP'000 GBP'000 GBP'000 GBP'000
Fixed assets
Investments at fair
value through profit
or loss 313,530 313,530 239,909 239,909
Current assets
Loans and receivables 1,052 1,052 1,319 1,319
Cash at bank and in
hand 1,719 1,719 2,369 2,369
_______ _______ _______ _______
316,301 316,301 243,597 243,597
_______ _______ _______ _______
None of the Company's financial assets is past due
or impaired.
Fair values of financial assets and financial liabilities
For the floating rate HK$ loan, the fair value of
borrowings has been calculated at GBP15,311,000
as at 30 April 2017 (2016 - GBP13,561,000) compared
to an accounts value in the financial statements
of GBP15,315,000 (2016 - GBP13,561,000) (note 12).
For the floating rate US$ loan, the fair value of
borrowings has been calculated at GBP6,710,000 as
at 30 April 2017 (2016 - GBP5,926,000) compared
to an accounts value in the financial statements
of GBP6,709,000 (2016- GBP5,925,000) (note 12).
For the floating rate GBP loan, the fair value of
borrowings has been calculated at GBP2,500,000 as
at 30 April 2017 (2016 - GBP2,500,000) compared
to an accounts value in the financial statements
of GBP2,500,000 (2016 - GBP2,500,000) (note 12).
For the fixed rate GBP loan, the fair value of borrowings
has been calculated at GBP5,163,000 as at 30 April
2017 (2016 - GBP5,167,000) compared to an accounts
value in the financial statements GBP5,000,000 (2016
- GBP5,000,000) (note 12). The fair value of each
loan is determined by aggregating the expected future
cash flows for that loan discounted at a rate comprising
the borrower's margin plus an average of market
rates applicable to loans of a similar period of
time and currency. All other assets and liabilities
of the Company are included in the Statement of
Financial Position at fair value.
17. Fair value hierarchy
FRS 102 requires an entity to classify fair value
measurements using a fair value hierarchy that reflects
the significance of the inputs used in making the
measurements. The fair value hierarchy has the following
classifications:
Level 1: unadjusted quoted prices in an active market
for identical assets or liabilities that the entity
can access at the measurement date.
Level 2: inputs other than quoted prices included
within Level 1 that are observable (ie developed
using market data) for the asset or liability, either
directly or undirectly.
Level 3: inputs are unobservable (ie for which market
data is unavailable) for the asset or liability.
The financial assets and liabilities measured at
fair value in the Statement of Financial Position
are grouped into the fair value hierarchy at the
reporting date as follows:
Level Level Level Total
1 2 3
As at 30 April 2017 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- -------- -------- -------- --------
Financial assets at fair
value through profit or
loss
Quoted equities 263,011 - - 263,011
Collective investment schemes - 50,519 - 50,519
------------------------------------- -------- -------- -------- --------
Total fair value 263,011 50,519 - 313,530
------------------------------------- -------- -------- -------- --------
Level Level Level Total
1 2 3
As at 30 April 2016 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- -------- -------- -------- --------
Financial assets at fair
value through profit or
loss
Quoted equities 215,235 - - 215,235
Collective investment schemes - 24,674 - 24,674
------------------------------------- -------- -------- -------- --------
Total fair value 215,235 24,674 - 239,909
------------------------------------- -------- -------- -------- --------
Quoted Equities
The fair value of the Company's investments in quoted
equities has been determined by reference to their
quoted bid prices at the reporting date. Quoted
equities included in Fair Value Level 1 are actively
traded on recognised stock exchanges.
Collective Investment Schemes
The fair value of the Company's investments in collective
investment schemes has been determined by reference
to their quoted net asset values at the reporting
date and hence are categorised in Fair Value Level
2.
18. Related party transactions and transactions with
the Manager
Fees payable during the period to the Directors
and their interests in shares of the Company will
be disclosed within the Directors' Remuneration
Report.
Mr H Young is a director of Aberdeen Asset Management
PLC, of which Aberdeen Fund Managers Limited ("AFML")
is a subsidiary. Management, promotional activities
and secretarial and administration services are
provided to the Company by AFML. Details of transactions
during the year and balances outstanding at the
year end disclosed in notes 4 and 5.
Additional Notes to the Annual Financial Report
The Annual General Meeting will be held at 12 noon on 30 August 2017 at Bow Bells House, 1 Bread Street, London EC4M 9HH.
If approved at the Annual General Meeting, the final dividend of 3.0p per share will be paid on 1 September 2017 to holders of Ordinary shares on the register at the close of business on 4 August 2017. The relevant ex-dividend date is 3 August 2017.
The Annual Financial Report Announcement is not the Company's statutory accounts. The above results for the year ended 30 April 2017 have been agreed with the auditor and are an abridged version of the Company's full accounts, which have been approved and audited with an unqualified report. The 2016 and 2017 statutory accounts received unqualified reports from the Company's auditor and did not include any reference to matters to which the auditor drew attention by way of emphasis without qualifying the reports, and did not contain a statement under s.498(2) or 498(3) of the Companies Act 2006. The financial information for 2016 is derived from the statutory accounts for 2016 which have been delivered to the Registrar of Companies. The 2017 accounts will be filed with the Registrar of Companies in due course.
The Annual Report and Accounts will be posted to shareholders in July 2017. Copies will be available during normal business hours from the Secretary, Aberdeen Asset Management PLC, 40 Princes Street, Edinburgh EH2 2BY or from the Company's website, www.newdawn-trust.co.uk*.
Please note that past performance is not necessarily a guide to the future and that the value of investments and the income from them may fall as well as rise and may be affected by exchange rate movements. Investors may not get back the amount they originally invested.
By order of the Board
Aberdeen Asset Management PLC
Company Secretary
19 June 2017
* Neither the Company's website nor the content of any website accessible from hyperlinks on it (or any other website) is (or is deemed to be) incorporated into, or forms (or is deemed to form) part of this announcement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SFMFMUFWSESM
(END) Dow Jones Newswires
June 20, 2017 02:00 ET (06:00 GMT)
1 Year Abrdn New Dawn Investment Chart |
1 Month Abrdn New Dawn Investment Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
