Interim Results

Aberdeen Asian Smaller Co's Inv Tst 11 April 2007 ABERDEEN ASIAN SMALLER COMPANIES INVESTMENT TRUST PLC ANNOUNCEMENT OF UNAUDITED INTERIM RESULTS for the six months ended 31 January 2007 Highlights • Share price up 17.5% • Diluted NAV rose 17.1% • MSCI AC Asia Pacific ex Japan Index rose 14.2% Chairman's Statement I am pleased to report another successful period for the six months to 31 January 2007, as investors continued to take a positive view of global economic growth. During the period the Company's diluted net asset value increased 17.1% to 323.8p, while the share price increased 17.5% to 310.25p. As there is no readily available benchmark that tracks Asian smaller companies, the Manager uses a broad index for comparative purposes, in particular the MSCI AC Asia Pacific Free ex-Japan Index, which rose by 14.2% in sterling terms over the same period. Overview Liquidity has remained a key driver of Asian equities with strong capital inflows, buoyant M&A activity and a record new issue market. This was supported, in most cases, by good company results. Over the period stock markets in India, Singapore, Hong Kong, China and Australia reached all-time highs. Against the trend, Thailand and Korea ended the period flat. These conditions favoured big caps in general and particularly in China, where the Shanghai market more than doubled. Speculators bid up IPOs, with many state enterprises coming to the market after a one-year freeze on new issues. For now, while fundamentals on the mainland have improved, valuations there suggest a bubble, which is one reason, along with the low quality of companies, why our Managers still have no direct exposure. Alongside China, India's market has looked the most expensive. However, the hot money that returned so quickly after the sell-off in May has at least been justified by earnings growth. Company results have continued to surprise on the upside, testimony to the high level of pent-up demand in the economy, and the growing share of manufacturing and services. There was some rotation into Malaysia, where a longstanding valuation discount finally disappeared. The promise of more public spending plus the streamlining of government stakes across the economy spurred gains. In neighbouring Singapore, exports were exceptionally strong but it was the property sector that was most active as the government unveiled its ambitious plans for casinos. The Philippines, which has languished for some time, also had a positive run, buoyed by continued flows from overseas workers (which now account for around 10% of GDP). Of the underperformers, Korea felt the brunt of a rising Won on its big export base. Thailand, which had earlier stood out for value, saw its military junta impose capital controls. This has proven the first of many policy blunders. Nonetheless, the risk of contagion is small and our holdings, bought at lower levels, have upside. Overall, Asian economies were generally healthy, and largely unaffected by the now-familiar external concerns, the main one being the health of the US economy. For companies, conditions have been good with corporate earnings for the most part exceeding expectations. Some notable examples were Singapore's Wheelock Properties and Straits Trading, South Korea's Jeonbuk Bank, the Philippines' Jollibee Foods, and in Malaysia, Malaysian Oxygen and Bursa Malaysia. Notably, not only has the quality of earnings improved but balance sheets are healthier (because cash is being used cautiously and surpluses even returned). Standards of corporate governance have improved as well. These bode well for smaller companies, in particular, which have traditionally been less transparent and under-researched. Portfolio Two new stocks were introduced to the portfolio over the six months: Castrol India, a lubricants company which is attractively valued and offers a good dividend yield, and the leading financial journal the Hong Kong Economic Times, which trades on attractive valuations. Against this, our Managers sold out of India's ICICI Bank, after a strong run in its share price pushed its market capitalisation to in excess of US$10 billion. Among the period's outstanding performers were Distilleries, Sri Lanka's largest Arrak producer, whose share price doubled; Bursa Malaysia, the country's stock exchange, rose more than 80%, as did Wheelock Properties, one of Singapore's most respected developers. Other stocks such as Cebu Holdings and Asian Terminals in the Philippines, ICI India and Jammu & Kashmir Bank had gains of around 50%. A particular mention must be made of India, one of the long-standing overweights in our portfolio. Given our Manager's conservative investment style that emphasises quality companies, it was not surprising that our Indian holdings lagged in last year's momentum driven market. On a short-term basis, the Indian market is not cheap, having rebounded from its June lows. Longer term, however, the market continues to appeal to us for its bottom-up, stock-picking potential. Outlook At the time of writing, global markets face their biggest challenge for some time. Volatility has increased as investors adjust their view of the US economy in light of weaker housing data. The fear is that consumption will fall sharply, which will surely affect corporate profits (which are at record levels). Still, Asia is in good shape. Whilst there are many markets such as China and India which seem over-extended, there are others like Thailand or Korea that continue to appear inexpensive. Overall, valuations are fair, if no longer cheap. Economies have reaped the benefits of structural improvements over the past few years. Meanwhile, the asset reflation story is at too early a stage to be seriously derailed. Your Company's portfolio is currently trading on a price/earnings multiple of 16.6 times for calendar year 2007 according to our Manager's conservative estimates. We remain confident about your Company's prospects as we believe the Manager's strategy of focusing on good quality companies and emphasising discipline, particularly on price at this point of the cycle, should hold up well. Nigel Cayzer Chairman 11 April 2007 Aberdeen Asian Smaller Companies Investment Trust PLC Income Statement (unaudited) Six months ended 31 January 2007 Six months ended 31 January 2006 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Gains on investments - 18,379 18,379 - 12,182 12,182 Income 2,643 - 2,643 1,620 - 1,620 Investment management fees (581) - (581) (435) - (435) Administrative expenses (308) - (308) (298) - (298) Exchange (losses)/gains (19) 384 365 14 48 62 _______ _______ _______ _______ _______ _______ Net return on ordinary activities before 1,735 18,763 20,498 901 12,230 13,131 finance costs and taxation Finance costs (227) - (227) (219) - (219) _______ _______ _______ _______ _______ _______ Net return on ordinary activities before 1,508 18,763 20,271 682 12,230 12,912 taxation Taxation (428) - (428) (187) - (187) _______ _______ _______ _______ _______ _______ Net return on ordinary activities after 1,080 18,763 19,843 495 12,230 12,725 taxation _______ _______ _______ _______ _______ _______ Return per Ordinary share (pence): Basic 3.34 58.10 61.44 1.67 41.20 42.87 _______ _______ _______ _______ _______ _______ Diluted 3.01 52.31 55.32 1.46 36.16 37.62 _______ _______ _______ _______ _______ _______ The total column of this statement represents the profit and loss account of the Company. A Statement of Total Recognised Gains and Losses has not been prepared as all gains and losses are recognised in the Income Statement. All revenue and capital items are derived from continuing operations. Balance Sheet As at As at As at 31 January 2007 31 July 31 January 2006 2006 (unaudited) (audited) (unaudited) £'000 £'000 £'000 Non-current assets Investments at fair value through profit or loss 122,063 103,101 106,466 Current assets Debtors 208 427 611 Cash at bank and in hand 3,669 3,970 1,007 _________ _________ _________ 3,877 4,397 1,618 _________ _________ _________ Creditors: amounts falling due within one year Bank loans (7,626) (8,012) (8,454) Other creditors (826) (763) (427) _________ _________ _________ (8,452) (8,775) (8,881) _________ _________ _________ Net current liabilities (4,575) (4,378) (7,263) _________ _________ _________ Total assets less current liabilities 117,488 98,723 99,203 Provision for liabilities and charges (29) (54) (74) _________ _________ _________ Net assets 117,459 98,669 99,129 _________ _________ _________ Capital and reserves Called-up share capital 8,145 8,047 7,847 Share premium account 11,087 10,259 7,880 Special reserve 14,990 14,990 14,990 Warrant reserve 1,738 1,785 2,275 Capital redemption reserve 2,062 2,062 2,062 Capital reserve - realised 31,151 27,211 19,748 Capital reserve - unrealised 46,204 31,334 43,079 Revenue reserve 2,082 2,981 1,248 _________ _________ _________ Equity Shareholders' funds 117,459 98,669 99,129 _________ _________ _________ Net asset value per Ordinary share (pence): Basic 360.53 306.56 315.84 _________ _________ _________ Diluted 323.79 276.45 283.69 _________ _________ _________ Reconciliation of Movements in Shareholders' Funds (unaudited) As at 31 January 2007 Six months ended 31 January 2007 Share Capital Capital Capital Share premium Special Warrant redemption reserve- reserve- Revenue capital account reserve reserve reserve realised unrealised reserve Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 31 July 2006 8,047 10,259 14,990 1,785 2,062 27,211 31,334 2,981 98,669 Net return on ordinary - - - - - 3,893 14,870 1,080 19,843 activities after taxation Dividends paid - - - - - - - (1,979) (1,979) Issue of Ordinary shares 62 721 - - - - - - 783 Exercise of Warrants 36 107 - (47) - 47 - - 143 _____ _______ _______ _______ _______ _______ _______ ______ _______ Balance at 31 January 2007 8,145 11,087 14,990 1,738 2,062 31,151 46,204 2,082 117,459 _____ _______ _______ _______ _______ _______ _______ ______ _______ Six months ended 31 January 2006 Share Capital Capital Capital Share premium Special Warrant redemption reserve- reserve- Revenue capital account reserve reserve reserve realised unrealised reserve Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 31 July 2005 7,214 4,194 14,990 2,275 2,062 17,581 33,016 1,750 83,082 (restated) Net return on ordinary - - - - - 2,167 10,063 495 12,725 activities after taxation Dividends paid - - - - - - - (997) (997) Issue of Ordinary shares 633 3,686 - - - - - - 4,319 _____ _______ _______ _______ _______ _______ _______ ______ _______ Balance at 31 January 2006 7,847 7,880 14,990 2,275 2,062 19,748 43,079 1,248 99,129 _____ _______ _______ _______ _______ _______ _______ ______ _______ Cash Flow Statement (unaudited) Six months ended Six months ended 31 January 2007 31 January 2006 £'000 £'000 Return on ordinary activities before taxation 20,498 13,131 Adjustments for: Realised gains on investments (3,509) (2,118) Unrealised gains on investments (14,870) (10,064) Effect of foreign exchange rates (384) (48) Decrease/(increase) in accrued income 16 (46) (Increase)/decrease in other debtors (56) 967 Increase in other creditors 21 6 Overseas withholding tax suffered (2) (58) _____________ _____________ Net cash inflow from operating activities 1,714 1,770 Net cash outflow from servicing of finance (108) (218) Net tax paid (433) (292) Net cash outflow from financial investment (419) (4,713) Equity dividends paid (1,979) (998) _____________ _____________ Net cash outflow before financing (1,225) (4,451) Issue of shares 926 4,319 _____________ _____________ Decrease in cash (299) (132) _____________ _____________ Reconciliation of net cash flow to movements in net debt Decrease in cash as above (299) (132) Exchange movements 384 49 _____________ _____________ Movement in net debt in the period 85 (83) Net debt at start of period (4,042) (7,364) _____________ _____________ Net debt at end of period (3,957) (7,447) _____________ _____________ Represented by: Cash 3,669 1,007 Debt due within one year (7,626) (8,454) _____________ _____________ (3,957) (7,447) _____________ _____________ Notes to the Financial Statements 1. Accounting policies The accounts have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice (UK GAAP) and with the Statement of Recommended Practice for 'Financial Statements of Investment Trust Companies' issued in December 2005. They have also been prepared on the assumption that approval as an investment trust will continue to be granted. The same accounting policies used for the year ended 31 July 2006 have been applied. Six months ended Six months ended 31 January 2007 31 January 2006 (unaudited) (unaudited) 2. Dividends £'000 £'000 Final dividend for 2006 - 3.45p (2005 - 3.45p) 1,110 999 Special dividend for 2006 - 2.70p (2005 - nil) 869 - _____________ _____________ 1,979 999 _____________ _____________ Six months ended Six months ended 31 January 2007 31 January 2006 (unaudited) (unaudited) 3. Income £'000 £'000 Income from investments UK dividend income 34 34 Overseas dividends 2,538 1,544 _____________ _____________ 2,572 1,578 _____________ _____________ Other income Deposit interest 71 42 _____________ _____________ Total income 2,643 1,620 _____________ _____________ Six months ended 31 January 2007 Six months ended 31 January 2006 (unaudited) (unaudited) 4. Return per Ordinary share Revenue Capital Total Revenue Capital Total Basic Net revenue on ordinary activities after 1,080 18,763 19,843 495 12,230 12,725 taxation (£'000) ________ ________ ________ ________ ________ ________ Weighted average number of shares in issue 32,293,727 32,293,727 32,293,727 29,682,118 29,682,118 29,682,118 ________ ________ ________ ________ ________ ________ Basic return per share (p) 3.34 58.10 61.44 1.67 41.20 42.87 ________ ________ ________ ________ ________ ________ Diluted Number of dilutive shares 3,575,507 3,575,507 3,575,507 4,135,719 4,135,719 4,135,719 ________ ________ ________ ________ ________ ________ Diluted shares in issue 35,869,234 35,869,234 35,869,234 33,817,837 33,817,837 33,817,837 ________ ________ ________ ________ ________ ________ Diluted return per share (p) 3.01 52.31 55.32 1.46 36.16 37.62 ________ ________ ________ ________ ________ ________ The calculation of the diluted revenue and capital returns per Ordinary share are carried out in accordance with Financial Reporting Standard No. 22, "Earnings per Share". For the purposes of calculating diluted total, revenue and capital returns per Ordinary share, the number of Ordinary shares is the weighted average used in the basic calculation plus the number of Ordinary shares deemed to be issued for no consideration on exercise of all Warrants by reference to the average share price of the Ordinary shares during the period. The calculations indicate that the exercise of Warrants would result in an increase in the weighted average number of Ordinary shares of 3,575,507 (2006 - 4,135,719) to 35,869,234 (2006 - 33,817,837) Ordinary shares. As at As at As at 31 January 2007 31 July 2006 31 January 2006 (unaudited) (audited) (unaudited) 5. Net asset value Attributable net assets (£'000) 117,459 98,669 99,129 Number of Ordinary shares in issue 32,579,597 32,186,208 31,386,208 Net asset value per Ordinary share (p): Basic 360.53 306.56 315.84 _____________ _____________ _____________ Diluted 323.79 276.45 283.69 _____________ _____________ _____________ The diluted net asset value per Ordinary share has been calculated on the assumption that 5,348,903 (31 January 2006 and 31 July 2006 - 5,492,292) Warrants in issue were exercised on the first day of the financial year at 100p per share, giving a total of 37,928,500 (31 January 2006 - 36,878,500; 31 July 2006 - 37,678,500) Ordinary shares. 6. Transaction costs During the period expenses were incurred in acquiring or disposing of investments classified as fair value though profit or loss. These have been expensed through capital and are included within gains on investments in the Income Statement. The total costs were as follows: Six months ended Six months ended 31 January 2007 31 January 2006 (unaudited) (unaudited) £'000 £'000 Purchases 21 24 Sales 27 21 _____________ _____________ 48 45 _____________ _____________ 7. The financial information for the six months ended 31 January 2007 and 31 January 2006 comprises non-statutory accounts within the meaning of Section 240 of the Companies Act 1985. The financial information for the year ended 31 July 2006 has been extracted from published accounts that have been delivered to the Registrar of Companies and on which the report of the auditors was unqualified and did not contain a statement under either Section 237(2) or 238(3) of the Companies Act 1985. The interim accounts have been prepared on the same basis as the preceding annual accounts. Copies of the Interim Report will be posted to Shareholders in April and further copies will be available from the registered Office of the Company, One Bow Churchyard, Cheapside, London EC4M 9HH Aberdeen Asset Management PLC Secretaries 11 April 2007 Independent Review Report to Aberdeen Asian Smaller Companies Investment Trust PLC Introduction We have been instructed by the Company to review the financial information for the six months ended 31 January 2007 which comprises the Income Statement, Balance Sheet, Reconciliation of Movements in Shareholders' Funds, Cash Flow Statement and the related notes 1 to 7. We have read the other information contained in the Interim Report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. This report is made solely to the Company in accordance with guidance contained in Bulletin 1999/4 'Review of interim financial information' issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our work, for this report, or for the conclusions we have formed. Directors' responsibilities The Interim Report, including the financial information held therein, is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the Interim Report in accordance with the Listing Rules of the Financial Services Authority which require that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4 'Review of interim financial information' issued by the Auditing Practices Board for use in the United Kingdom. A review consists principally of making enquiries of management and applying analytical procedures to the financial information and underlying financial data, and based thereon, assessing whether the accounting policies and presentation have been consistently applied, unless otherwise disclosed. A review is substantially less in scope than an audit performed in accordance with United Kingdom Auditing Standards and therefore provides a lower level of assurance than an audit. Accordingly we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 31 January 2007. Ernst & Young LLP 11 April 2007 This information is provided by RNS The company news service from the London Stock Exchange D IR FFLFFDZBZBBZ

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