Annual Financial Report

RNS Number : 9148J

Aberdeen New Dawn Invest Trust PLC

06 July 2011

 



ABERDEEN NEW DAWN INVESTMENT TRUST PLC

ANNUAL FINANCIAL REPORT

for the year ended 30 April 2011

1.  CHAIRMAN'S STATEMENT

Background

I am pleased to report that during the year under review, your Company's net asset value rose by 16.5% to 933.01p, while its share price appreciated 23% to 878.3p (both on a total return basis). These figures compare very favourably with the benchmark MSCI AC Asia Pacific ex-Japan Index, which advanced 11.8%. Despite rising fears relating to sovereign creditworthiness in the developed world and inflation in the emerging world, equity markets in Asia managed to build upon previous gains, driven by continued accommodative monetary policy.

As for the outperformance of the benchmark by your Company's portfolio, this was due both to good stock selection and asset allocation. For example, the portfolio was overweight to Hong Kong (as of 30 April 2011 19.3% of portfolio versus 8.1% of benchmark). Not only did the Hong Kong market as a whole rise by 15.5% compared with 11.8% for the benchmark, but the portfolio's holdings outperformed their market, rising by 20.8%. It should, however, be noted that your Manager's style is "bottom up", meaning that the decision to overweight Hong Kong was the result of finding more companies there with which it is comfortable than in markets elsewhere.

Meanwhile, borrowings also continued to benefit the Company's net asset value (gearing added 0.89 percentage points to performance as of 30 April 2011) as stockmarkets continued their ascent.

Revenue and Dividend

Revenue returns from the portfolio during the year were very strong. As a result of this, and in compliance with investment trust rules which require the Company to distribute at least 85% of its income from securities, we are proposing to raise the dividend this year to 12.50p, an increase of 25% on last year's level. If approved by shareholders at the Annual General Meeting, the final dividend will be paid on 26 August 2011 to Ordinary shareholders on the register on 5 August 2011. Shareholders should be aware that, as in previous years, the level of future dividends will depend on future receipts from the portfolio.

Overview

Asian stockmarkets rose in the year under review, building on the previous term's exceptional gains. Markets continued to attain new heights, though the bulk of the gains were achieved in the first half of the reporting period. Notably, very low interest rates in developed countries combined with the US Federal Reserve's second round of quantitative easing buoyed asset prices. This was despite market sentiment facing various headwinds that included the simmering sovereign debt crisis plaguing Europe's periphery and accelerating inflation, primarily in the emerging world. The latter was cited as a key factor in the reversal of fund flows from emerging to advanced markets in the second half of the review period.

Despite the shift in market sentiment, economies in Asia maintained their growth trajectories. Asia's twin economic engines of China and India expanded briskly, posting full-year GDP growth rates of 10.3% and 8.7% respectively. But this robust expansion was accompanied by rising inflationary pressures and fears of the need for remedial central bank action, causing their respective stockmarkets to post the worst performances in the region. India's torrid performance was further exacerbated by corruption scandals surrounding the issuance of 2G telecom licences.

The rest of the region grew steadily as well, recording full-year GDP growth rates of between 6% and 14% for 2010. China was the key driver of intra regional trade, which was particularly significant given continued weakness in Asia's traditional export markets in the developed world. And although Japan suffered a devastating combination of natural disasters that threatened the global supply chain, the impact of this on the rest of Asia has thus far been limited. Symbolically, the Chinese economy overtook Japan as the second largest world economy in the third quarter of 2010.

Asia's fast pace of economic expansion came at a cost: rising inflation. This was driven both by demand pull factors - the region's economies were operating close to full capacity - as well as cost push factors - exceptionally loose monetary policy, political upheaval across the Arab world and extreme weather had boosted the prices of many commodities. Oil prices spiked amid fears that popular uprising in the Middle East and North Africa would disrupt supply, whereas the production of food and commodities was hurt by drought or flood that afflicted the breadth of the region, from Central Asia to Australasia.

At first, most central banks seemed reluctant to act, fearing that higher interest rates would damage economies still recovering from the 2008/2009 crisis. But by the third quarter of 2010 even Beijing, which had not raised interest rates for three years, joined ranks with others in the region. China's rate increase caused shockwaves to ripple across equity markets, as investors dwelt on the implications of what a slowdown in the mainland might mean for the rest of Asia.

Against this backdrop, your Company's holdings, on average, outperformed the regional benchmark by a decent margin. Yet again, your Manager's bottom-up investment approach of holding for the long term good quality companies with strong balance sheets and experienced management has proved itself. At the same time, country allocations, which are the result of your Manager's stock choices, also contributed to the outperformance.

Your Manager remains cautious about China where there is a dichotomy between the economy, which continues its unrelenting expansion, and the stockmarket, where cashflow does not always end up in the hands of minority shareholders. Your Company holds just two Chinese companies, with your Manager preferring instead to get exposure to the mainland via Hong Kong companies that tend to have a more prudent approach to expansion, longer track records, better corporate governance and greater transparency.

Also making significant contributions to performance were the Company's positions in Sri Lanka and Thailand. These markets did well having emerged from prolonged periods of political instability to reap "peace dividends", as stock prices played catch up with their regional peers. In addition, there have been structural improvements, such as in the Thai market where corporate governance standards have advanced markedly, earning it fourth place in a regional ranking, behind Singapore, Hong Kong and Japan.

Annual General Meeting

As special business at the Annual General Meeting ("AGM") we are proposing to renew the authority to allot up to 10% of the Company's issued share capital without pre-emption rights applying, and the authority to buy in shares, and either hold them in treasury for future resale (at net asset value or above) or cancel them. We have not bought any shares in or issued any new shares during the year under review, however, your Board believes that it is appropriate to retain maximum flexibility in this regard. We are also proposing to increase the cap

on Directors' fees in the Company's Articles, which we believe to be prudent in order to enable us to keep Directors' remuneration at or around market levels, and to provide flexibility when recruiting new Directors. The cap was last increased in 1997. Accordingly the Board encourages shareholders to vote in favour of these resolutions.

The AGM of the Company will be held on Wednesday 22 August 2011 at 12.00 pm in London, and your Board looks forward to meeting as many shareholders as possible at both the AGM and the subsequent lunch.

Outlook

In the near term, Asian stockmarkets are likely to continue to be buffeted by issues threatening the region's growth prospects, most notably inflation, as commodity prices remain elevated, exacerbated by rapid economic expansion. While governments can attempt to alleviate the impact of rising prices on the consumer via subsidies and other fiscal policies, it is clear that further monetary tightening may well be needed. Given the low growth rates in most advanced economies, the region's short-term macroeconomic picture appears somewhat clouded. Asia's long-term prospects, however, remain compelling. Its favourable demographics and obvious growth potential still make it one of the most attractive investment destinations.  Rising consumerism can only bode well for companies operating in Asia for decades to come.

Alan Henderson

Chairman

6 July 2011

2.  MANAGER'S REVIEW

Asian equities rose during the 12 months under review, following an excellent performance the previous year. Markets had a tentative start as investors weighed the impact of Europe's worsening debt crisis on the global economy. But caution soon gave way to greater risk appetite given Asia's robust economies and low interest rates in the West. The regional benchmark climbed to the highest level in two-and-a-half years by the end of calendar 2010. However, gains were later pared by a bout of profit-taking as inflationary pressures escalated. Sentiment was further depressed by the March earthquake, tsunami and ensuing nuclear crisis in Japan, which dampened the region's recovery outlook.

On the economic front, growth remained solid for the large powerhouses of China and India as well as the smaller, export-focused countries of Hong Kong, Singapore, Korea and Taiwan. Notably, China surpassed Japan as the world's second largest economy. Chinese demand in turn benefited Australia and other resource-rich economies, which helped boost intra-regional trade as exports to the developed world slowed.

The corollary to the region's strong growth was rising inflation, exacerbated by ongoing quantitative easing in the US and a sustained rise in the oil price - Brent rose to around US$125 a barrel in early April from US$89 at the start of the review period - on the back of geopolitical tensions in the Arab world. At first, most Asian central banks chose to focus on economic growth but eventually raised interest rates and lenders' reserve requirements as price pressures intensified. India's central bank, the region's most proactive, hiked rates five times. Only Sri Lanka cut rates to spur expansion. Meanwhile, the surfeit of liquidity also led to an overheating property sector and stronger currencies in Asia, compelling several countries to curb lending and speculative inflows. By the end of the review period, these measures appeared to have taken effect as signs of a moderation in economic growth emerged.

Portfolio Review

The portfolio's net asset value rose 16.5% in sterling terms, outperforming the benchmark MSCI AC Asia Pacific ex Japan Index's total return of 11.8%. Overall, our positions in Hong Kong, China, Sri Lanka and Thailand were notable contributors to relative return whereas Korea and Singapore were key detractors.

The heavy weighting in Hong Kong served the portfolio well as the domestic market outpaced the regional index on the back of encouraging economic data. Stock selection too was favourable. Jardine Strategic's share price was buoyed by solid profit growth across its underlying companies, especially Indonesian conglomerate Astra International which continues to benefit from rising domestic personal purchasing power. Swire Pacific, Hang Lung Group and Hang Lung Properties also did well, highlighting the resilience of our real estate holdings. These companies gained from buoyant Chinese demand and strong occupancy despite property tightening measures in the latter part of the year. However, the currency impact from Hong Kong, which is the result of our stock picks, pared gains given the local currency's strict peg to what was a weak US dollar.

The positive contribution from Hong Kong reinforces its attractiveness as a market that offers a diversified range of companies with prudent management and very long track records, framed by a stringent regulatory framework and strong shareholder culture. For this reason, we like to gain exposure to China through well-established Hong Kong-domiciled companies that do business on the mainland. Working to our advantage was the portfolio's light exposure to China as it trailed the region, weighed down by fears that tightening measures would hurt growth. Nevertheless, one of our core Chinese holdings, PetroChina, aided performance as it benefited from the rise in oil and commodity prices that occurred towards the end of the year.

The overweight to Sri Lanka and Thailand also helped performance as these markets outpaced their peers by a wide margin. At the stock level, Thailand's Siam Cement was a top contributor as its share price was lifted by solid results in its paper division and the resumption of its downstream chemicals operations at Map Ta Phut, which had earlier been halted over environmental concerns. In Sri Lanka, our holdings, such as Aitken Spence, DFCC Bank and John Keells Holdings, rallied in line with the domestic market as the end of civil war marked a new period of stability and growth.

India and Australia also boosted the portfolio's return over the year. Our holding in the Aberdeen Global - Indian Equity Fund continues to provide exposure to many solid, well-managed Indian companies operating in steady-growth industries. The stock prices of many of these companies, such as ICICI Bank, Housing Development Finance Corporation, Sun Pharmaceutical, Tata Consultancy Services, Nestle India, ITC and Godrej Consumer Products, outperformed the market during the year. None of the holdings were tainted directly by the corruption scandals in the banking and telecommunication sectors.

In Australia, the underweight position boosted relative performance as the market lagged most of its regional peers over the period. At the stock level, miner Rio Tinto, like PetroChina, benefited from rising commodity prices. In this case, it was the strong demand for iron ore, particularly from China, that drove performance. Not holding domestic banks, such as Westpac Banking and Commonwealth Bank of Australia, also helped. In principle, we think that banks can be a good way to capture excess returns on capital but prefer the likes of Standard Chartered, Oversea-Chinese Banking Corporation and United Overseas Bank, which have broader regional exposure, stronger balance sheets and thus greater capacity to grow. However, the currency impact from Australia proved negative because of the strength of the Australian dollar.

Other holdings that bolstered returns over the year included the technology companies Taiwan Semiconductor Manufacturing Company and Hong Kong's ASM Pacific Technology. TSMC's quarterly earnings surpassed expectations owing to better capacity utilisation and faster-than-expected demand for new products while ASM's order book rebounded, reflecting good global demand.

On the other hand, the relatively small exposure to Korea hurt relative returns as its market performed strongly, led in particular by consumer discretionary and cyclical stocks. As a result, our lack of exposure to Korean auto companies, such as Hyundai Motor and Kia Motors, as well as companies in heavy industries, such as Hyundai Heavy Industries, detracted from performance. However, our view of Korea has not changed. It has well-known, global brands but the dominance of the chaebols, the Korean cross shareholding structures, has created a less transparent corporate sector when compared with other Asian markets.

Our continued large exposure to Singapore held back performance over the year as this market lagged its peers. While most of our holdings delivered positive returns, some faced strong headwinds. Singapore Airlines was hurt by concerns over higher fuel costs while Singapore Telecommunications' overseas operations faced intensifying competition. Meanwhile, UOB's share price consolidated after the previous year's outperformance. On a brighter note, OCBC boosted the portfolio's return as its share price strengthened on the back of good full-year results while City Developments gained from robust property demand in Singapore. We will maintain the overweight in Singapore as we feel it has a consistent, rational economic policy, a high degree of transparency while being home to some of the best companies in Asia with diversified, regional businesses.

Core holding Standard Chartered is also worthy of comment. While its share price performed well through to the end of calendar 2010, gains were pared in early 2011 as investors took the chance to take profits amid the rising interest rate environment and concerns over the political crisis in the Middle East. However, we continue to like the company as it remains fundamentally strong, reported an eighth consecutive year of record profits and continues to expand in emerging markets.

In line with our buy-and-hold investment philosophy, portfolio turnover was low during the year as should be expected. There were only three new additions to the portfolio, all Hong Kong-listed. In the first half of the review period, we introduced Li & Fung, a well-run trading company with sound financials, tremendous economies of scale and well-regarded management; and AIA, the Asian arm of US insurer AIG, which has an unrivalled Asian footprint, strong brand and is expected to continue benefiting from rising demand for life insurance products. In the latter part of the period, we introduced HSBC Holdings, a lender with a strong Asian franchise and robust capital position. Trading at a small premium to book value, it compares well to its regional peers. We funded this purchase by paring Public Bank. The Malaysian lender's results have been first rate but current valuations reflect this, which led us to reduce the position.

Outlook

Despite the recent correction in oil prices, inflation remains a concern in Asia. Supply bottlenecks brought on by inclement weather, in China for example, as well as the still unfolding political crisis in the Arab world could keep price pressures elevated for some time. This would suggest the need for further interest rate hikes, particularly if real rates remain negative. Separately, while the portfolio does not have exposure to Japan, the recent earthquake and tsunami could hurt Asian manufacturers dependent on Japanese part supplies. Already, Japan's trade balance has fallen into deficit after a sharp drop in exports, suggesting that disruptions to supply chains have hurt overseas shipments. Against such headwinds, we expect regional economic growth to moderate, with markets remaining vulnerable to renewed profit-taking in the near term.

Aberdeen Asset Management Asia Limited

6 July 2011

3.  BUSINESS REVIEW

A review of the Company's activities is given in the Chairman's Statement and the Manager's Review.

Investment Objective 

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.

Benchmark

The Company compares its performance to the currency-adjusted MSCI AC Asia Pacific ex Japan Index.

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 investment region provided that over 75 per cent. of their consolidated revenue is earned from trading in the investment region or they hold more than 75 per cent. of their consolidated net assets in the Asia Pacific investment region.

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 there was potential gearing of 5 per cent. which compares with a current maximum limit set by the Board of 25 per cent. Borrowings are short term and particular care is taken to ensure that any bank covenants permit maximum flexibility of investment policy.

In addition, it is the investment policy of the Company to invest no more than 15 per cent. of its gross assets in other listed investment companies (including listed investment trusts). As at 30 April 2011, 5.9 per cent. of the Company's portfolio was invested in investment trust companies.

Capital Structure

At 30 April 2011 the Company had a capital structure comprising 24,909,402 Ordinary shares of 25p (with a further 477,731 shares being held in treasury at that date). The Company also had bank borrowings, at 30 April 2011, of HKD 128,500,000 (equivalent to approximately £9,918,000) and £1,500,000, which rank for repayment ahead of any capital return to shareholders.

Total Assets and Net Asset Value

The Company had total assets of £243.8 million and a net asset value of 933.01 pence per Ordinary share at 30 April 2011.

Duration

The Company does not have a fixed life. However, under the Articles of Association, if in the 12 weeks 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 net asset value over the same period, notice will be given of a special resolution to be proposed at the following Annual General Meeting that the Company be put into voluntary liquidation. In the 12 weeks to 30 April 2011 the average discount to underlying net asset value of the Ordinary shares was 5.9%, therefore no special resolution will be put to the Company's shareholders.

Risk

Investment in Asia-Pacific securities or those of 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 major securities markets, including the risk of social, economic or political instability, which may have an adverse effect on economic returns or restrict investment opportunities.   

The Company currently utilises gearing in the form of bank borrowings (see 'Capital Structure' above and note 11 to the Financial Statements). Gearing magnifies the effect of market movements on the net asset value of the Company.

The major risks associated with the Company are:

· Resource risk: like most other investment trusts, the Company has no employees. The Company therefore relies on services provided by third parties, including, in particular, the Manager, to whom responsibility for the management of the Company's portfolio has been delegated under an investment management agreement (the "Agreement"). The terms of the Agreement cover the necessary duties and conditions expected of the Manager. The Board reviews the performance of the Manager on a regular basis, and their compliance with the Agreement formally on an annual basis.

· Investment and market risk: the Board continually monitors the investment policy of the Company, taking account of stockmarket factors, and reviews the Company's performance compared to its benchmark index. Further details on other risks relating to the Company's investment activities, including market price, interest rate, liquidity and foreign currency risks, are disclosed in Note 18 to the Financial Statements.

· Gearing risk: the Company currently uses gearing in the form of bank loans of HKD128,500,000, equivalent to approximately £9,918,000, and £1,500,000, under its loan facility of £20,000,000.

· Regulatory risk: the Company operates in a complex regulatory environment and faces a number of regulatory risks. Serious breaches of applicable regulations could lead to a number of detrimental outcomes and reputational damage. The Audit Committee monitors compliance with regulations by reviewing internal control reports from the Manager.

The particular risks of investment in Asia 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.

Internal Control

The Board is ultimately responsible for the Company's system of internal control and for reviewing its effectiveness. Following publication of the Financial Reporting Council's "Internal Control: Revised Guidance for Directors on the Combined Code" (the FRC Guidance), the Board confirms that there is an ongoing process for identifying, evaluating and managing the significant risks faced by the Company. This process has been in place for the year under review and up to the date of approval of this Annual Financial Report, and is regularly reviewed by the Board and accords with the FRC Guidance. The Board has reviewed the effectiveness of the system of internal control. In particular, it has reviewed and updated the process for identifying and evaluating the significant risks affecting the Company and policies by which these risks are managed.

4.  STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors are responsible for preparing the Annual Report and Accounts in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law they have elected to prepare the financial statements in accordance with UK Accounting Standards and applicable law (UK Generally Accepted Accounting Practice).

Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements, the Directors are required to:

-     select suitable accounting policies and then apply them consistently;

-     make judgments and estimates that are reasonable and prudent;

-     state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

-     prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible for preparing a Directors' Report, Directors' Remuneration Report and Corporate Governance Statement that complies with that law and those regulations.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

The Directors confirm that to the best of their knowledge:

-     the financial statements, prepared in accordance with the applicable accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and

-     the Directors' Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that the Company faces.

For Aberdeen New Dawn Investment Trust PLC

Alan Henderson

Chairman

6 July 2011

5.  RESULTS

Highlights

	30 April 2011	30 April 2010	% change
Total assets	£243,824,000	£212,782,000	+14.6
Total equity shareholders' funds (net assets)	£232,406,000	£201,969,000	+15.1
Share price (mid market)	878.25p	723.50p	+21.4
Net asset value per share	933.01p	810.81p	+15.1
Discount to net asset value	5.9%	10.8%
MSCI AC Asia Pacific ex Japan Index (currency adjusted, capital gains basis)	567.86	522.91	+8.6
Potential gearing	1.05	1.05
Dividend and earnings
Revenue return per share{A}	15.86p	11.87p	+33.6
Proposed final dividend per share{B}	12.50p	10.00p	+25.0
Dividend cover	1.27	1.19
Revenue reserves{C}	£9,595,000	£8,135,000
Operating costs
Total expense ratio	1.03%	1.18%
{A} Measures the total earnings for the year divided by the weighted average number of Ordinary shares in issue (see Income Statement).
{B} The figures for dividends still reflect the years in which they were earned (see note 7) and have not been restated.
{C} Prior to payment of proposed final dividend.

	Performance (total return)
		1 year return	3 year return	5 year return
		%	%	%
Share price		+23.0	+60.2	+80.8
Net asset value		+16.5	+49.7	+96.0
MSCI AC Asia Pacific ex Japan Index (currency adjusted)		+11.8	+34.5	+81.3

	Rate	xd date	Record date	Payment date
Proposed final 2011	12.50p	3 August 2011	5 August 2011	26 August 2011
Final 2010	10.00p	4 August 2010	6 August 2010	27 August 2010

	Financial Record
Year to 30 April		2002	2003	2004	2005	2006	2007	2008	2009	2010	2011
Total revenue (£'000)		2,035	2,447	2,404	3,188	3,345	4,027	4,301	4,734	4,372	5,752
Per share (p)
Net revenue return		3.76	5.10	4.83	6.84	6.58	7.63	8.14	10.48	11.87	15.86
Total return		50.59	48.01	103.41	30.35	175.78	50.04	101.51	(153.19)	331.69	132.19
Net dividends paid/proposed{A}		3.00	3.80	3.80	5.00	5.00	5.55	6.00	8.00	10.00	12.50
Net asset value per share		253.47	201.66	301.27	330.42	503.83	548.87	646.31	487.12	810.81	933.01
Equity shareholders' funds (£'000)		58,975	46,920	70,097	77,341	127,907	139,342	160,993	121,339	201,969	232,406
{A} The figures for dividends have not been restated and still reflect the dividend for the years in which it was earned. The 2005 figure includes a 1.0p Special.

6.  INVESTMENT PORTFOLIO

Investment Portfolio
As at 30 April 2011
			Valuation	Total	Valuation
			2011	assets	2010
Company	Sector	Country	£'000	%	£'000
Aberdeen Global - Indian Equity Fund			32,113	13.2	30,901
A tax-efficient pooled India fund with a long-term investment approach managed by the same team managing the Company. There is no double-charging of management fees.	Collective Investment Scheme	India
Rio Tinto			10,306	4.2	7,987
An Anglo-Australian mining company with a diverse portfolio of world-class interests in aluminium, copper, diamonds, gold, coal, iron ore and industrial metals.	Metals & Mining	Australia
Oversea-Chinese Banking Corporation			10,143	4.2	8,795
A well-run Singaporean bancassurance company seeking to generate additional value for shareholders by restructuring assets and via regional expansion.	Commercial Banks	Singapore
Jardine Strategic Holdings			9,629	3.9	8,987
A Singapore-listed conglomerate with interests across the region spanning property, hotels and consumer products.	Industrial Conglomerates	Hong Kong
Samsung Electronics Pref			9,471	3.9	8,698
Asia's leading electronics firm that makes consumer electronics, semiconductors, telecom equipment and TFT LCD screens.	Semiconductors & Semiconductor Equipment	South Korea
Standard Chartered			8,314	3.4	7,826
A Hong Kong-listed lender with significant operations in the emerging markets.	Commercial Banks	Hong Kong
Swire Pacific 'B'			8,299	3.4	6,681
Hong Kong listed conglomerate, with interests in aviation (via Cathay Pacific), property, beverages, marine services and industrial activities.	Real Estate Management & Development	Hong Kong
Taiwan Semiconductor Manufacturing Company			7,923	3.2	5,025
The world's largest dedicated semiconductor foundry, it provides wafer manufacturing, wafer probing, assembly and testing, mask production and design services.	Semiconductors & Semiconductor Equipment	Taiwan
QBE Insurance Group			7,779	3.2	7,294
A leading Australian general insurance and reinsurance firm that is geographically diversified, and has a track record of generating good shareholder returns.	Insurance	Australia
United Overseas Bank			7,164	2.9	6,968
Singapore's second largest bank, primarily focused on SMEs and consumers, with its core market in Singapore and the balance predominantly in southeast Asia.	Commercial Banks	Singapore
Top ten investments			111,141	45.5

			Valuation	Total	Valuation
			2011	assets	2010
Company	Sector	Country	£'000	%	£'000
Singapore Telecommunication	Diversified Telecommunication Services	Singapore	6,865	2.8	6,087
City Developments	Real Estate Management & Development	Singapore	6,425	2.6	5,996
Siam Cement	Construction Materials	Thailand	6,407	2.6	5,477
PetroChina	Oil, Gas & Consumable Fuels	China	6,223	2.6	5,545
Singapore Technologies	Aerospace & Defence	Singapore	6,161	2.5	6,045
BHP Billiton	Metals & Mining	Australia	6,059	2.5	3,099
PTT Exploration & Production	Oil, Gas & Consumable Fuels	Thailand	5,999	2.5	5,321
Aberdeen Asian Smaller Companies Inv. Trust	Investment/Unit Trusts	Other Asia	5,693	2.3	3,974
Ayala Land	Real Estate Management & Development	Philippines	4,599	1.9	5,051
ASM Pacific Technologies	Semiconductors & Semiconductor Equipment	Hong Kong	4,267	1.8	3,305
Top twenty investments			169,839	69.6
Aitken Spence & Co.	Industrial Conglomerates	Sri Lanka	3,992	1.6	2,496
Woolworths	Food & Drugs Retailer	Australia	3,947	1.6	2,883
Dairy Farm International	Food & Staples Retailing	Hong Kong	3,894	1.6	3,336
Taiwan Mobile	Wireless Telecommunication Services	Taiwan	3,845	1.6	3,127
China Mobile	Wireless Telecommunication Services	China	3,822	1.6	4,523
AIA Group	Insurance	Hong Kong	3,816	1.5	-
CIMB Group	Commercial Banks	Malaysia	3,709	1.5	3,254
Sun Hung Kai Properties	Real Estate Management & Development	Hong Kong	3,558	1.5	3,505
Hang Lung Group	Real Estate Management & Development	Hong Kong	3,552	1.5	2,851
Venture Corp	Electronic Equipment & Instruments	Singapore	3,307	1.4	3,297
Top thirty investments			207,281	85.0
Singapore Airlines	Airlines	Singapore	2,899	1.2	3,046
New India Inv. Trust	Investment/Unit Trusts	India	2,806	1.2	2,530
Wing Hang Bank	Commercial Banks	Hong Kong	2,707	1.1	2,713
Unilever Indonesia	Household Products	Indonesia	2,607	1.1	3,714
M.P. Evans Group	Food Products	Indonesia	2,483	1.0	1,951
Shinsegae Company	Food & Staples Retailing	South Korea	2,432	1.0	2,415
Public Bank Berhad	Commercial Banks	Malaysia	2,283	0.9	3,847
Hang Lung Properties	Real Estate Management & Development	Hong Kong	2,248	0.9	2,707
BS Financial Group	Commercial Banks	South Korea	2,119	0.9	-
HSBC Holdings	Commercial Banks	Hong Kong	1,849	0.7	-
Top forty investments			231,714	95.0
Dah Sing Financial	Commercial Banks	Hong Kong	1,763	0.7	1,580
DFCC Bank	Commercial Banks	Sri Lanka	1,665	0.7	1,053
Li & Fung	Distribution	Hong Kong	1,418	0.6	-
John Keells Holdings	Industrial Conglomerates	Sri Lanka	1,398	0.6	968
Daegu Bank	Commercial Banks	South Korea	1,344	0.6	1,047
National Development Bank	Commercial Banks	Sri Lanka	811	0.3	565
BOC Pakistan	Chemicals	Pakistan	269	0.1	301
Total investments			240,382	98.6
Net current assets{A}			3,442	1.4
Total assets			243,824	100.0
{A} Excluding bank loan of £11,418,000.
Note: Unless otherwise stated, foreign stock is held and all investments are equity holdings.

7.  INCOME STATEMENT

		Year ended 30 April 2011			Year ended 30 April 2010
		Revenue	Capital	Total	Revenue	Capital	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000
Gains on investments held at fair value through profit or loss	9	-	28,879	28,879	-	80,079	80,079
Income	2	5,752	-	5,752	4,372	-	4,372
Investment management fee	3	(781)	(781)	(1,562)	(693)	(693)	(1,386)
Administrative expenses	4	(708)	-	(708)	(597)	-	(597)
Exchange gains		-	948	948	-	352	352
		_______	_______	_______	_______	_______	_______
Net return on ordinary activities before finance costs and taxation		4,263	29,046	33,309	3,082	79,738	82,820
Interest payable and similar charges	5	(69)	(69)	(138)	(72)	(72)	(144)
		_______	_______	_______	_______	_______	_______
Return on ordinary activities before taxation		4,194	28,977	33,171	3,010	79,666	82,676
Taxation	6	(243)	-	(243)	(53)	-	(53)
		_______	_______	_______	_______	_______	_______
Return on ordinary activities after taxation		3,951	28,977	32,928	2,957	79,666	82,623
		_______	_______	_______	_______	_______	_______
Return per Ordinary share (pence)	8	15.86	116.33	132.19	11.87	319.82	331.69
		_______	_______	_______	_______	_______	_______
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.
The accompanying notes are an integral part of the financial statements.

8.  BALANCE SHEET

		As at	As at
		30 April 2011	30 April 2010
	Notes	£'000	£'000
Non-current assets
Investments at fair value through profit or loss	9	240,382	208,487
		_________	_________
Current assets
Loans and receivables	10	958	965
Cash at bank and in hand		2,982	3,721
		_________	_________
		3,940	4,686
		_________	_________
Creditors: amounts falling due within one year	11
Loans		(11,418)	(10,813)
Other creditors		(498)	(391)
		_________	_________
		(11,916)	(11,204)
		_________	_________
Net current liabilities		(7,976)	(6,518)
		_________	_________
Net assets		232,406	201,969
		_________	_________
Share capital and reserves
Called-up share capital	12	6,347	6,347
Share premium account		17,955	17,955
Special reserve		11,617	11,617
Capital redemption reserve		10,207	10,207
Capital reserve	13	176,685	147,708
Revenue reserve		9,595	8,135
		_________	_________
Equity shareholders' funds		232,406	201,969
		_________	_________
Net asset value per Ordinary share (pence)	14	933.01	810.81
		_________	_________

9.  RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS

For the year ended 30 April 2011
		Share		Capital
	Share	premium	Special	redemption	Capital	Revenue
	capital	account	reserve	reserve	reserve	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 30 April 2010	6,347	17,955	11,617	10,207	147,708	8,135	201,969
Return on ordinary activities after taxation	-	-	-	-	28,977	3,951	32,928
Dividend paid (see note 7)	-	-	-	-	-	(2,491)	(2,491)
	______	______	______	______	______	______	______
Balance at 30 April 2011	6,347	17,955	11,617	10,207	176,685	9,595	232,406
	______	______	______	______	______	______	______
For the year ended 30 April 2010
		Share		Capital
	Share	premium	Special	redemption	Capital	Revenue
	capital	account	reserve	reserve	reserve	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 30 April 2009	6,347	17,955	11,617	10,207	68,042	7,171	121,339
Return on ordinary activities after taxation	-	-	-	-	79,666	2,957	82,623
Dividend paid (see note 7)	-	-	-	-	-	(1,993)	(1,993)
	______	______	______	______	______	______	______
Balance at 30 April 2010	6,347	17,955	11,617	10,207	147,708	8,135	201,969
	______	______	______	______	______	______	______
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.

10.  CASH FLOW STATEMENT

		Year ended		Year ended
		30 April 2011		30 April 2010
	Notes	£'000	£'000	£'000	£'000
Net cash inflow from operating activities	15		2,575		2,409
Servicing of finance
Bank and loan interest paid			(138)		(149)
Taxation
Net tax paid			(243)		(500)
Financial investment
Purchases of investments		(13,165)		(9,765)
Sales of investments		11,170		14,105
		_______	_______	_______
Net cash (outflow)/inflow from financial investment			(1,995)		4,340
Equity dividend paid			(2,491)		(1,993)
			_______		_______
Net cash (outflow)/inflow before financing			(2,292)		4,107
Financing
Loans drawdown/(repaid)			1,500		(2,954)
			_______		_______
Net cash inflow/(outflow) from financing			1,500		(2,954)
			_______		_______
(Decrease)/increase in cash	16		(792)		1,153
			_______		_______
Reconciliation of net cash flow to movements in net debt
(Decrease)/increase in cash as above			(792)		1,153
(Drawdown)/repayment of loan			(1,500)		2,954
Exchange movements			948		352
			_______		_______
Movement in net debt in the year			(1,344)		4,459
Opening net debt			(7,092)		(11,551)
			_______		_______
Closing net debt	16		(8,436)		(7,092)
			_______		_______

11.  NOTES TO THE FINANCIAL STATEMENTS:

1.	Accounting policies
	(a)	Basis of accounting
		The financial statements have been prepared under the historical cost convention, as modified to include the revaluation of investments and in accordance with the applicable UK Accounting Standards and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' (issued in January 2009). They have also been prepared on the assumption that approval as an investment trust will continue to be granted. The financial statements have been prepared on a going concern basis. The Directors believe this is appropriate.
		The financial statements, and the net asset value per share figures, have been prepared in accordance with UK Generally Accepted Accounting Practice ('UK GAAP').
	(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 or closing prices for SETS stocks, sourced from the London Stock Exchange. Gains and losses arising from changes in fair value are included as a capital item in the Income Statement and are ultimately recognised in the capital reserve.
	(c)	Income
		Dividends (other than special 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. The fixed return on a debt security, if material, is recognised on a time apportioned basis so as to reflect the effective yield on each security. Where the Company has elected to receive its dividends in the form of additional shares rather than cash, the amount of the cash 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 Income Statement 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 Income Statement 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 Income Statement, 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)	Deferred taxation
		Deferred taxation is provided on all timing differences, that have originated but not reversed at the Balance Sheet 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 Balance Sheet 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)	Capital reserves
		Gains and losses on realisation of investments and changes in fair values of investments which are readily convertible to cash, without accepting adverse terms, are transferred to the capital reserve.
	(g)	Foreign currencies
		Assets and liabilities in foreign currencies are translated at the rates of exchange ruling on the Balance Sheet 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 Income Statement and are then transferred to the realised capital reserve.
	(h)	Dividends payable
		Final dividends are dealt with in the period in which they are paid.

		2011	2010
2.	Income	£'000	£'000
	Income from investments
	UK dividend income	667	378
	Overseas dividends	4,349	3,708
	Scrip dividends	720	271
		_________	_________
		5,736	4,357
		_________	_________
	Other income
	Deposit interest	5	-
	Stock lending income	-	-
	Underwriting commission	11	15
		_________	_________
		16	15
		_________	_________
	Total income	5,752	4,372
		_________	_________

		2011			2010
		Revenue	Capital	Total	Revenue	Capital	Total
3.	Investment management fee	£'000	£'000	£'000	£'000	£'000	£'000
	Investment management fee	781	781	1,562	693	693	1,386
		______	______	______	______	______	______
	The Company has an agreement with Aberdeen Asset Management Asia Limited ('AAM Asia') for the provision of management services.
	·      During the year the management fee was payable monthly in arrears and was based on an annual amount of 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 and New India Investment Trust are excluded from the calculation of the investment management fee. The total value of such commonly managed funds, on a mid basis (basis on which management fee is calculated), at the year end was £40,612,000 (2010 - £37,428,000).
	From 1 May 2010, the Company will receive a rebate from the Manager for the amount of fees in excess of 1% of net assets charged by the Manager for that commonly managed fund.
	The balance due to AAM Asia at the year end was £277,000 (2010 - £274,000).
	The agreement is terminable on one year's notice.

			2011	2010
4.	Administrative expenses		£'000	£'000
	Share Plan marketing contribution		125	101
	Directors' fees		142	113
	Safe custody fees		184	136
	Auditor's remuneration:
	-	Fees payable to the Company's auditor for the audit of the Company's annual accounts	14	14
	-	Fees payable to the Company's auditor and its associates for other services:
		- interim review	5	4
		- taxation services	1	6
	Other administration expenses		237	223
			_________	_________
			708	597
			_________	_________
	The Company has an agreement with Aberdeen Asset Managers Limited ('AAM') for the provision of marketing services in relation to the Company's participation in the Aberdeen Investment Trust Share Plan and ISA. The total fees paid and payable under the agreement were £125,000 (2010 - £101,000) and the sum due to AAM at the year end was £23,000 (2010 - £11,000).
	No pension contributions were made in respect of any of the Directors.
	The Company does not have any employees.

		2011			2010
		Revenue	Capital	Total	Revenue	Capital	Total
5.	Interest payable and similar charges	£'000	£'000	£'000	£'000	£'000	£'000
	On bank loans and overdrafts	69	69	138	72	72	144
		______	______	______	______	______	______

					2011			2010
					Revenue	Capital	Total	Revenue	Capital	Total
6.	Taxation				£'000	£'000	£'000	£'000	£'000	£'000
	(a)		Analysis of charge for the year
			Corporation tax at effective rate of 27.83% (2010 - 28%)		-	-	-	22	-	22
			Double taxation relief		-	-	-	(22)	-	(22)
			Overseas tax suffered		243	-	243	239	-	239
					______	______	_____	______	______	_____
			Current tax charge for the year		243	-	243	239	-	239
			Deferred taxation		-	-	-	(186)	-	(186)
					______	______	_____	______	______	_____
					243	-	243	53	-	53
					______	______	_____	______	______	_____
	(b)		Factors affecting the tax charge for the year
			The tax assessed for the year is lower than the standard rate of corporation tax in the UK.
			Following changes in the Finance Bill 2009 dividends and other distributions from foreign companies received on or after 1 July 2009 have largely been exempt from UK corporation tax.
					2011			2010
					Revenue	Capital	Total	Revenue	Capital	Total
					£'000	£'000	£'000	£'000	£'000	£'000
				Net profit on ordinary activities before taxation	4,194	28,977	33,171	3,010	79,666	82,676
					______	______	_____	______	______	_____
				Corporation tax at effective rate of 27.83% (2010 - 28%)	1,167	8,064	9,231	843	22,306	23,149
				Effects of:
				Non-taxable UK dividend income	(186)	-	(186)	(106)	-	(106)
				Non-taxable scrip dividends	(200)	-	(200)	(76)	-	(76)
				Non-taxable overseas dividends	(1,020)	-	(1,020)	(500)	-	(500)
				Accrued income not taxable	(190)	-	(190)	(139)	-	(139)
				Overseas tax suffered	243	-	243	239	-	239
				Surplus management expenses and loan relationship deficits not relieved	429	237	666	-	214	214
				Double taxation relief	-	-	-	(22)	-	(22)
				Non-taxable exchange gains	-	(264)	(264)	-	(98)	(98)
				Non-taxable realised gains on investments	-	(8,037)	(8,037)	-	(22,422)	(22,422)
					______	______	_____	______	______	_____
				Current tax charge	243	-	243	239	-	239
					______	______	_____	______	______	_____
		(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
				The Company has not recognised a deferred tax asset £802,000 (2010 - £193,000) 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.

		2011	2010
7.	Dividends	£'000	£'000
	Amounts recognised as distributions to equity holders in the period:
	Final dividend for 2010 - 10.00p (2009 - 8.00p)	2,491	1,993
		_________	_________
	The proposed final dividend for 2011 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 final dividend proposed 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 £3,951,000 (2010 - £2,957,000).
		2011	2010
		£'000	£'000
	Proposed final dividend for 2011 - 12.50p (2010 - 10.00p)	3,114	2,491
		_________	_________

		2011		2010
8.	Return per Ordinary share	£'000	p	£'000	p
	Revenue return	3,951	15.86	2,957	11.87
	Capital return	28,977	116.33	79,666	319.82
		_________	_________	_________	_________
	Total return	32,928	132.19	82,623	331.69
		_________	_________	_________	_________
	Weighted average number of Ordinary shares in issue{A}		24,909,402		24,909,402
	{A} Calculated excluding shares held in treasury.		_________		_________

		Listed	Listed
		overseas	in UK	Total
9.	Investments	£'000	£'000	£'000
	Fair value through profit or loss:
	Opening book cost	73,625	16,204	89,829
	Opening fair value gains on investments held	107,495	11,163	118,658
		_________	_________	_________
	Opening valuation	181,120	27,367	208,487
	Movements in the year:
	Purchases at cost	11,532	2,353	13,885
	Sales - proceeds	(10,869)	-	(10,869)
	Sales - realised gains	7,894	-	7,894
	Current year fair value gains on investments held	16,244	4,741	20,985
		_________	_________	_________
	Closing valuation	205,921	34,461	240,382
		_________	_________	_________
	Closing book cost	82,182	18,557	100,739
	Closing fair value gains on investments held	123,739	15,904	139,643
		_________	_________	_________
		205,921	34,461	240,382
		_________	_________	_________
			2011	2010
			£'000	£'000
	Investments listed on an overseas investment exchange		205,921	181,120
	Investments listed on the UK investment exchange		34,461	27,367
			_________	_________
			240,382	208,487
			_________	_________
			2011	2010
	Gains on investments held at fair value through profit or loss		£'000	£'000
	Realised gains on sales		7,894	5,087
	Increase in fair value gains on investments held		20,985	74,992
			_________	_________
			28,879	80,079
			_________	_________
	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 on investments held at fair value through profit or loss in the Income Statement. The total costs were as follows:
			2011	2010
			£'000	£'000
	Purchases		45	30
	Sales		32	42
			_________	_________
			77	72
			_________	_________

		2011	2010
10.	Loans and receivables	£'000	£'000
	Prepayments and accrued income	950	650
	Amounts due from brokers	-	301
	Other loans and receivables	8	14
		_________	_________
		958	965
		_________	_________

			2011	2010
11.	Creditors: amounts falling due within one year		£'000	£'000
	(a)	Loans
		Foreign currency loans	9,918	10,813
		Sterling loans	1,500	-
			_________	_________
			11,418	10,813
			_________	_________
		At the year end HK$128,500,000 (2010 - HK$128,500,000), equivalent to £9,918,000 (2010 - £10,813,000) and £1,500,000 (2010 - Nil), was drawn down from the £20,000,000 facility with The Royal Bank of Scotland at an interest rate of 0.99% and 1.52% respectively, with a maturity date of 10 June 2011 and has subsequently been rolled over to 7 September 2011.
		Subsequent to the year end the HK$128,500,000 and £1,500,000 drawdowns were rolled over to 7 September 2011 at an interest rate of 1.01% and 1.50% respectively.
		The terms of the bank loan with The Royal Bank of Scotland state that 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 in excess of 10% of total gross assets invested in the largest single security or asset; and (ii) the value in excess of 60% of total gross assets invested in the top twenty largest investments; and (iii) the value of all unlisted investments). The Company has met this covenant throughout the period and up to the date of this Report.
			2011	2010
	(b)	Other	£'000	£'000
		Other creditors	498	391
			_________	_________

		2011	2010
12.	Called-up share capital	£'000	£'000
	Allotted, called up and fully paid:
	24,909,402 (2010 - 24,909,402) Ordinary shares of 25p each	6,227	6,227
	Held in treasury:
	477,731 (2010 - 477,731) Ordinary shares of 25p each	120	120
		_________	_________
		6,347	6,347
		_________	_________
	Shares held in treasury represent 1.92% of the Company's total issued share capital at 30 April 2011.
	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 Investment 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.

		2011	2010
13.	Capital reserve	£'000	£'000
	At 1 May	147,708	68,042
	Movement in fair value gains	28,879	80,079
	Foreign exchange movement	948	352
	Expenses taken to capital	(850)	(765)
		_________	_________
	At 30 April	176,685	147,708
		_________	_________
	The capital reserve includes investment holding gains amounting to £139,643,000 (2010 - £118,658,000), as disclosed in note 9.

14.	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:
		2011	2010
	Net assets attributable (£'000)	232,406	201,969
	Number of Ordinary shares in issue (excluding shares held in treasury)	24,909,402	24,909,402
	Net asset value per share (p)	933.01	810.81

15.	Reconciliation of net return on ordinary activities before finance	2011	2010
	costs and taxation to net cash inflow from operating activities	£'000	£'000
	Net return on ordinary activities before finance costs and taxation	33,309	82,820
	Adjustment for:
	Gains on investments held at fair value through profit or loss	(28,879)	(80,079)
	Exchange gains charged to capital	(948)	(352)
	(Increase)/decrease in accrued income	(300)	178
	Decrease/(increase) in other debtors	6	(11)
	Increase in other creditors	107	124
	Scrip dividends included in investment income	(720)	(271)
		_________	_________
	Net cash inflow from operating activities	2,575	2,409
		_________	_________

		1 May	Cash	Exchange	30 April
		2010	flow	movements	2011
16.	Analysis of changes in net debt	£'000	£'000	£'000	£'000
	Cash at bank	3,721	(792)	53	2,982
	Debts falling due within one year	(10,813)	(1,500)	895	(11,418)
		_________	_________	_________	_________
	Net debt	(7,092)	(2,292)	948	(8,436)
		_________	_________	_________	_________

17.	Related party disclosures
	Mr H Young is a director of AAM Asia. AAM Asia has an agreement to provide management services and AAM has an agreement to provide marketing services to the Company, the terms of which are outlined in notes 3 and 4 respectively.
	During the course of the year, the Company has held investments in other funds managed by the same Manager. These holdings are disclosed in note 3.

18.	Financial instruments
	Risk management
	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 Manager has a dedicated investment management process, which ensures that the investment policy is followed. Stock selection procedures are in place based on the active portfolio management and identification of stocks. The portfolio is reviewed on a periodic basis by a Senior Investment Manager and also by the Manager's Investment Committee.
	The Company's Manager has an independent investment risk department for reviewing the investment risk parameters of the Company's portfolio on a regular basis. The department reports to the Manager's performance review committee which is chaired by the Manager's chief investment officer. The department's responsibility is to review and monitor ex-ante (predicted) portfolio risk and style characteristics using best practice, industry standard multi-factor models.
	Additionally, the Manager's Compliance department continually monitors the Company's investment and borrowing powers and reports to the Manager's risk management committee.
	The main financial risks that the Company faces from its financial instruments are market price risk (comprising interest rate risk, currency risk and other price risk), liquidity risk and credit risk.
	The Board regularly reviews and agrees policies for managing each of these risks. The Manager's policies for managing these risks are summarised below and have been applied throughout the year. The numerical disclosures exclude short-term debtors and creditors.
	Market price 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.
	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.
	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 Balance Sheet date was as follows:
				Weighted average				Weighted
				period for which				average				Fixed				Floating
				rate is fixed				interest rate				rate				rate
	At 30 April 2011			Years				%				£'000				£'000
	Assets
	Australian Dollar			-				0.50				-				85
	Sterling			-				0.25				-				2,664
	Sri Lankan Rupee			-				-				-				16
	Taiwan Dollar			-				-				-				104
	Thailand Baht			-				-				-				113
				_________				_________				_________				_______
				n/a				n/a				-				2,982
				_________				_________				_________				_______
	Liabilities
	Bank loan - Sterling			0.25				1.52				1,500				-
	Bank loan - HK Dollar			0.25				0.99				9,918				-
				_________				_________				_________				_______
				n/a				n/a				11,418				-
				_________				_________				_________				_______
				Weighted average				Weighted
				period for which				average				Fixed				Floating
				rate is fixed				interest rate				rate				rate
	At 30 April 2010			Years				%				£'000				£'000
	Assets
	Sterling			-				0.26				-				3,677
	Sri Lankan Rupee			-				-				-				27
	Taiwan Dollar			-				-				-				16
	Korean Won			-				-				-				1
				_________				_________				_________				_______
				n/a				n/a				-				3,721
				_________				_________				_________				_______
	Liabilities
	Bank loan - HK Dollar			0.02				0.85				(10,813)				-
				_________				_________				_________				_______
	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 loan is shown in note 11.
	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 Balance Sheet, therefore, can be significantly affected by movements in foreign exchange rates. 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 11, 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 2011						30 April 2010
					Net	Total							Net		Total
			Overseas		monetary	currency			Overseas				monetary		currency
			investments		assets	exposure			investments				assets		exposure
			£'000		£'000	£'000			£'000				£'000		£'000
	Australian Dollar		11,726		85	11,811			10,177				-		10,177
	Hong Kong Dollar		43,523		(9,918)	33,605			33,410				(10,813)		22,597
	Indonesian Rupiah		2,607		-	2,607			3,714				-		3,714
	Korean Won		15,367		-	15,367			13,876				1		13,877
	Malaysian Ringgit		5,992		-	5,992			7,100				-		7,100
	Pakistan Rupee		269		-	269			301				-		301
	Philippine Peso		4,599		-	4,599			5,052				-		5,052
	Singapore Dollar		42,964		-	42,964			40,234				-		40,234
	Sri Lankan Rupee		7,866		16	7,882			5,082				27		5,109
	Sterling		67,772		1,164	68,936			58,268				3,677		61,945
	Taiwanese Dollar		11,767		104	11,871			8,152				16		8,168
	Thailand Baht		12,407		113	12,520			10,798				-		10,798
	US Dollar		13,523		-	13,523			12,323				-		12,323
			_________		________	________			_______				________		_______
	Total		240,382		(8,436)	231,946			208,487				(7,092)		201,395
			_________		_______	________			_______				________		_______
	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.
										2011				2010
										£'000				£'000
	Australian Dollar									1,181				1,018
	Hong Kong Dollar									3,361				2,260
	Indonesian Rupiah									261				371
	Korean Won									1,537				1,388
	Malaysian Ringgit									599				710
	Pakistan Rupee									27				30
	Philippine Peso									460				505
	Singapore Dollar									4,296				4,023
	Sri Lankan Rupee									788				511
	Taiwanese Dollar									1,187				817
	Thailand Baht									1,252				1,080
	US Dollar									1,352				1,232
										________				_______
										16,301				13,945
										________				_______
	Other 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.
	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.
	Other price risk sensitivity
	If market prices at the Balance Sheet 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 2011 would have increased/(decreased) by £24,038,000 (2010 increased/(decreased) by £20,849,000) and equity reserves would have increased/(decreased) by the same amount.
	Liquidity risk
	This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities.
	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. 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 2011 are shown in note 11.
	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 2011 and 30 April 2010 the Company's bank loan, amounting to £11,418,000 and £10,813,000 respectively, was due for repayment or roll-over within two months of the year end.
	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.
	The risk is not considered to be significant, and is actively managed as follows:
	·      investment transactions are carried out with a large number of brokers, whose credit-standing is reviewed periodically by the Investment 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 Balance Sheet, the maximum exposure to credit risk at 30 April was as follows:
					2011						2010
					Balance		Maximum				Balance			Maximum
					Sheet		exposure				Sheet			exposure
					£'000		£'000				£'000			£'000
	Non-current assets
	Investments at fair value through profit or loss				240,382		240,382				208,487			208,487
	Current assets
	Loans and receivables				958		958				965			965
	Cash at bank and in hand				2,982		2,982				3,721			3,721
					________		_______				________			_______
					244,322		244,322				213,173			213,173
					________		_______				________			_______
	None of the Company's financial assets is past due or impaired.
	Fair values of financial assets and financial liabilities
	For the HK$ loan, the fair value of borrowings has been calculated at £9,928,000 as at 30 April 2011 (2010 - £10,818,000) compared to an accounts value in the financial statements of £9,918,000 (2010 - £10,813,000) (note 11). For the GBP loan, the fair value of borrowings has been calculated at £1,503,000 as at 30 April 2011 (2010 - Nil) compared to an accounts value in the financial statements of £1,500,000 (2010 - Nil) (note 11).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 Balance Sheet at fair value.

19.	Fair value hierarchy
	The Company adopted the amendments to FRS 29 'Financial Instruments: Disclosures' effective from 1 January 2009. These amendments require 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 shall have the following levels:
	Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
	Level 2: inputs other than quoted prices included within Level 1 that are observable for the assets or liability, either directly (ie as prices) or indirectly (ie derived from prices); and
	Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
	All of the Company's investments are in quoted equities (2010 - same) actively traded on recognised stock exchanges, with their fair value being determined by reference to their quoted bid prices at the reporting date. The total value of the investments (2011 - £240,382,000; 2010 - £208,487,000) have therefore been deemed as Level 1.

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.

If approved, the proposed final dividend of 12.50p per share will be paid on 26 August 2011 to holders of Ordinary shares on the register at the close of business on 5 August 2011. The relevant ex-dividend date is 3 August 2011.

The Annual Financial Report Announcement is not the Company's statutory accounts. The above results for the year ended 30 April 2011 have been agreed with the auditors and are an abridged version of the Company's full accounts, which have been approved and audited with an unqualified report. The 2010 and 2011 statutory accounts received unqualified reports from the Company's auditors and did not include any reference to matters to which the auditors 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 2010 is derived from the statutory accounts for 2008 which have been delivered to the Registrar of Companies. The 2011 accounts will be filed with the Registrar of Companies in due course.

The Annual General Meeting of the Company will be held at 12.00 p.m. on 24 August 2011 at Bow Bells House, One Bread Street, London EC4M 9HH.

The audited Annual Report and Accounts will be posted to shareholders shortly. Copies may be obtained 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*.

By order of the Board

Aberdeen Asset Management PLC - Secretary

6 July 2011

* 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.

 

END

 

 

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