Half Yearly Report

RNS Number : 6146P

Aberdeen Asian Smaller Co's Inv Tst

27 March 2009

 



ABERDEEN ASIAN SMALLER COMPANIES INVESTMENT TRUST PLC

ANNOUNCEMENT OF UNAUDITED HALF YEARLY RESULTS

for the six months ended 31 January 2009

Highlights

• Diluted NAV total return -6.6%
• MSCI AC Asia Pacific Free ex Japan Index total return -23.5%
• MSCI AC Asia Pacific Free ex Japan Small Cap Index total return -32.8%

INTERIM BOARD REPORT

Background

During the six months to 31 January 2009, the Company's share price and diluted net asset value fell by 6.6% and 10.8% (in total return terms) respectively. In the same period, the MSCI Asia Pacific ex-Japan Index fell 23.5% and the MSCI Asia Pacific ex-Japan Small Cap Index fell 32.8%. Although there has been an absolute fall in the value of the Company, it is a testament to the investment philosophy of Hugh Young and his team at Aberdeen that they managed to outperform both the indices against which we compare our performance by a comfortable margin.

I would like to reiterate that your Company's investment objective is to maximise total returns to shareholders over the long term. This is achieved through detailed and rigorous research to identify companies that are well managed, have good prospects and strong balance sheets. While the current economic turbulence has caused a great deal of corporate stress everywhere and will likely continue to do so, your Manager is confident that your Company's holdings will be able to ride out this storm and, in due course, prosper as weaker rivals struggle. 

Overview

Asian equities remained under pressure for the six months under review. In September, the credit crunch, which had started in the US, turned into a full-blown financial crisis, triggering the failure of several large Western financial institutions. Panic and forced selling were evident worldwide, reaching a peak in October. Governments have responded with a series of multi-billion dollar bailouts and stabilisation measures, and the leading central banks have coordinated interest rate cuts, injected fresh liquidity and guaranteed loans to ease the squeeze on credit. 

However, while these measures may have saved the financial system, the global recession has worsened. Policymakers have resorted to various stimulus measures to spur growth - the US has recently approved an ambitious US$787 billion package, the biggest economic stimulus in history. Meanwhile, interest rates have continued to fall across the world, thanks to the rapid retreat of inflation as commodity prices have tumbled. 

Asia has also been affected by the global financial contagion. While it had been widely hoped that strong intra-Asian trade would insulate the region from the synchronised contraction in the US and Europe, this did not happen, as final demand for Asian goods comes ultimately from the West. Evidence of this vulnerability materialised most clearly in the marked slowdown of export-dependent economies. By January, Japan, Hong Kong and Singapore had slid into recession. A shortage of trade finance has hit all aspects of commercial life hard. That said, Asia's financial system is more robust than that of the West with banks having limited exposure to toxic assets. 

Almost every government in the region has announced a fiscal stimulus and cut interest rates. The biggest response came from China, which will spend US$586 billion over two years on a stimulus package. China also pared rates four times over the period, having not cut interest rates in more than six years. Such stimulatory measures revived distressed markets temporarily in December. The rally, however, proved short-lived. As economic data and corporate earnings continued to disappoint, markets resumed their slide.

Some problems have been homemade. The political crises in Malaysia and Thailand and the terror attacks in India's financial hub of Mumbai have undermined investor confidence in the region. Policymakers, having cited inflation as their chief threat only months earlier, found themselves taken by surprise at the speed of the downturn. Consumers had already cut back on spending before the effects of interest cuts were apparent. 

Share Capital and Gearing

During the period, the Company's Ordinary shares continued to trade at a discount but this narrowed from 15.8% to 12.1%. 662,210 Ordinary shares were purchased for Treasury at discounts in excess of 13% and 229,063 Warrants were exercised resulting in the issue of 229,063 new Ordinary shares in December. Your Board will continue to monitor the Company's discount and to purchase shares and warrants when it is deemed beneficial to do so in order to improve NAV and to manage the level of the discount to NAV.

During the period, the Company's net gearing has been in the range of approximately 4.0% to 14.3% (gross assets divided by shareholders' funds). At the period end the level of debt stood at the equivalent of £12.5 million or 13.3%. As of the time of writing, gearing stands at £9.3 million drawn in US Dollars.  

Portfolio

Smaller companies generally lack pricing power, which makes them vulnerable to declining demand and less able to access borrowing during a slowdown. However a feature of the companies within the portfolio is that they are strongly cash generative and have either low gearing or are in a net cash position. 

Notably, the Company's bias towards consumer-related businesses - a reflection of our confidence in Asia's secular growth in domestic demand - boosted relative performance. Consumer stocks proved defensive, unlike industrials, which were dragged down by a collapse in external demand. Furthermore, the low weighting in financials shielded the portfolio from the financial meltdown. 

Among the period's strong performers were India's Godrej Consumer Products, which manufactures and distributes personal care products domestically, and Castrol India, the well-managed Indian subsidiary of Castrol, which proved resilient amid the volatility in oil prices, thanks to its strong brand and effective distribution network. Fast-food restaurant chain Jollibee Foods in the Philippines, which has been expanding operations overseas, was also defensive. Café de Coral, one of the largest listed restaurant groups in Hong Kong with operations in China and North America, and Malaysia's Guinness Anchor also did well. The former was boosted by good results, while the latter has strengthened its market position. Another outperformer was Singapore Food Industries, which rose after Singapore Airport Terminals said it would acquire the business to strengthen its food services capability and improve its global presence. 

On the other hand, we were disappointed with Singapore's FJ Benjamin and Bukit Sembawang Estates, which faced escalating costs and sluggish sales. Retailer FJ Benjamin was hit by rising rental rates, after opening several new stores in the region. Its robust balance sheet and positive cash flow, however, remain key strengths. Bukit Sembawang Estates, a property developer which is diversifying into condominium development, was slow to develop and launch projects, and is exposed to a now weak domestic property market, though it continues to boast an extensive land bank. Korean lender Daegu Bank also fell sharply, despite being one of the best-run local banks. 

At the country level, the lack of exposure to China and Taiwan worked in the portfolio's favour. Untried management teams, coupled with poor transparency and standards of accounting, have hindered stock choice in China. As such, we prefer to invest directly in Hong Kong stocks or through Chinese entities listed in Hong Kong. The Company has also avoided Taiwan, where many companies are involved in cyclical and export-oriented industries. 

Turning to portfolio activity, your Manager introduced CDL Hospitality Trusts, a Singapore-listed real estate investment trust with a solid asset base, Integrated Distribution Services, a contract manufacturing and services provider to multinational corporations, and Public Financial in Hong Kong, a subsidiary of Malaysia's Public Bank. Among the disposals were Korean Reinsurance, because of deteriorating results and increased risks in overseas expansion, and Sri Lanka's Distilleries, owing to concerns over its corporate structure. 

Outlook

Asian economies' hitherto exceptional growth is likely to slip in the near term - though this is not necessarily a bad thing, since many of them were overheating. The region has cause for optimism: most Asian households and firms have high savings and modest debt, which could help them recover fairly quickly. Massive fiscal pump-priming, made possible by the vast reserves built up in the past, should help spur economic recovery in due course. 

In addition, domestic demand - a more sustainable growth engine - is expected to gain in prominence over exports in the long term, which will benefit our portfolio, with its bias towards companies focused on home markets. Falling food and energy costs, which account for a large proportion of Asian household budgets, should also boost consumers' purchasing power and provide relief to big and small businesses.

All told, Asia still has the key ingredients of growth, which should help it remain the fastest-growing region in the world. As such, your Manager continues to be optimistic about Asia's long-term prospects and is confident that the portfolio, which comprises conservative, well-run businesses with solid balance sheets, will hold up well in the downturn and be well positioned when the outlook improves.

Principal Risks and Uncertainties

The principal risks and uncertainties faced by the Company fall into six broad categories: (i) Ordinary share market risk, (ii) Dividends, (iii) Borrowings, (iv) Market risk, (v) Foreign exchange risk, and (vi) taxation and exchange controls. Information on each of these areas is given in the Directors' Report within the Annual Report and Accounts for the year ended 31 July 2008. The principal risks and uncertainties have not changed in the period from 31 July 2008 to 27 March 2009.

Directors' Responsibility Statement

The Directors are responsible for preparing this half-yearly financial report in accordance with applicable law and regulations. The Directors confirm that to the best of their knowledge:

• the condensed set of financial statements contained within the half-yearly financial report has been prepared in accordance with the Accounting Standards Board's Statement "Half Yearly Financial Reports";

• the Interim Board Report (constituting the interim management report) includes a fair review of the information required by rule 4.2.7R of the UK Listing Authority Disclosure and Transparency Rules (being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements and a description of the principal risks and uncertainties for the remaining six months of the financial year) and 4.2.8R (being related party transactions that have taken place during the first six months of the financial year and that have materially affected the financial position of the Company during that period; and any changes in the related party transactions described in the last Annual Report that could so do).

For and on behalf of the Board of Aberdeen Asian Smaller Companies Investment Trust PLC

Nigel Cayzer

Chairman

27 March 2009

  Aberdeen Asian Smaller Companies Investment Trust PLC

Income Statement (unaudited)

	Six months ended			Six months ended
	31 January 2009			31 January 2008
	(unaudited)			(unaudited)
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Losses on investments	-	(10,682)	(10,682)	-	(2,802)	(2,802)
Income (note 3)	1,768	-	1,768	2,024	-	2,024
Investment management fees (note 8)	(764)	-	(764)	(730)	-	(730)
Administrative expenses	(315)	-	(315)	(316)	-	(316)
Exchange (losses)/gains	-	(2,680)	(2,680)	-	73	73
	_______	_______	_______	_______	_______	_______
Net return on ordinary activities before finance costs and taxation	689	(13,362)	(12,673)	978	(2,729)	(1,751)
Finance costs	(128)	-	(128)	(172)	-	(172)
	_______	_______	_______	_______	_______	_______
Net return on ordinary activities before taxation	561	(13,362)	(12,801)	806	(2,729)	(1,923)
Taxation	(161)	-	(161)	(227)	(271)	(498)
	_______	_______	_______	_______	_______	_______
Net return on ordinary activities after taxation	400	(13,362)	(12,962)	579	(3,000)	(2,421)
	_______	_______	_______	_______	_______	_______
Return per Ordinary share (pence):
Basic	1.28	(42.76)	(41.48)	1.79	(9.26)	(7.47)
	_______	_______	_______	_______	_______	_______
Diluted	1.18	(39.51)	(38.33)	1.63	(8.43)	(6.80)
	_______	_______	_______	_______	_______	_______
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 presented as all gains and losses are recognised in the Income Statement. All revenue and capital items are derived from continuing operations.

  Aberdeen Asian Smaller Companies Investment Trust PLC

Income Statement (audited)

	Year ended
	31 July 2008
	(audited)
	Revenue	Capital	Total
	£'000	£'000	£'000
Losses on investments	-	(17,988)	(17,988)
Income (note 3)	5,021	-	5,021
Investment management fees (note 8)	(1,493)	-	(1,493)
Administrative expenses	(640)	-	(640)
Exchange (losses)/gains	-	48	48
	________	________	________
Net return on ordinary activities before finance costs and taxation	2,888	(17,940)	(15,052)
Finance costs	(237)	-	(237)
	________	________	________
Net return on ordinary activities before taxation	2,651	(17,940)	(15,289)
Taxation	(761)	(271)	(1,032)
	________	________	________
Net return on ordinary activities after taxation	1,890	(18,211)	(16,321)
	________	________	________
Return per Ordinary share (pence):
Basic	5.88	(56.68)	(50.80)
	________	________	________
Diluted	5.36	(51.68)	(46.32)
	________	________	________

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 presented 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 2009	31 January 2008	31 July 2008
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
Non-current assets
Investments at fair value through profit or loss	104,961	126,662	113,089
	____________	____________	____________
Current assets
Loans and receivables	164	352	523
Cash at bank and in hand	1,749	3,110	1,387
	____________	____________	____________
	1,913	3,462	1,910
	____________	____________	____________
Creditors: amounts falling due within one year
Bank loan (note 9)	(12,463)	(4,132)	(4,173)
Other creditors	(439)	(1,092)	(960)
	____________	____________	____________
	(12,902)	(5,224)	(5,133)
	____________	____________	____________
Net current liabilities	(10,989)	(1,762)	(3,223)
	____________	____________	____________
Total assets less current liabilities	93,972	124,900	109,866
Provision for liabilities and charges	(23)	(29)	(37)
	____________	____________	____________
Net assets	93,949	124,871	109,829
	____________	____________	____________
Capital and reserves
Called-up share capital (note 10)	8,220	8,163	8,163
Share premium account	11,312	11,140	11,140
Special reserve	10,386	12,875	11,975
Warrant reserve	1,387	1,502	1,461
Capital redemption reserve	2,062	2,062	2,062
Capital reserve	58,589	87,289	71,877
Revenue reserve	1,993	1,840	3,151
	____________	____________	____________
Equity Shareholders' funds	93,949	124,871	109,829
	____________	____________	____________
Net asset value per Ordinary share (pence):
Basic	301.16	390.92	347.24
	____________	____________	____________
Diluted	276.96	354.16	316.46
	____________	____________	____________

  Reconciliation of Movements in Shareholders' Funds

Six months ended 31 January 2009 (unaudited)
		Share			Capital
	Share	premium	Special	Warrant	redemption	Capital	Revenue
	capital	account	reserve	reserve	reserve	reserve	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 31 July 2008	8,163	11,140	11,975	1,461	2,062	71,877	3,151	109,829
Net return on ordinary activities after taxation	-	-	-	-	-	(13,362)	400	(12,962)
Dividends paid (note 2)	-	-	-	-	-	-	(1,558)	(1,558)
Purchase of own shares (note 10)	-	-	(1,589)	-	-	-	-	(1,589)
Exercise of Warrants (note 10)	57	172	-	(74)	-	74	-	229
	_____	_______	_______	_______	_______	_______	_______	_______
Balance at 31 January 2009	8,220	11,312	10,386	1,387	2,062	58,589	1,993	93,949
	_____	_______	_______	_______	_______	_______	_______	_______
Six months ended 31 January 2008 (unaudited)
		Share			Capital
	Share	premium	Special	Warrant	redemption	Capital	Revenue
	capital	account	reserve	reserve	reserve	reserve	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 31 July 2007	8,145	11,087	14,990	1,576	2,062	90,554	3,265	131,679
Net return on ordinary activities after taxation	-	-	-	-	-	(3,000)	579	(2,421)
Dividends paid (note 2)	-	-	-	-	-	-	(2,004)	(2,004)
Purchase of own shares (note 10)	-	-	(2,115)	-	-	-	-	(2,115)
Exercise of Warrants (note 10)	18	53	-	(23)	-	23	-	71
Buyback of Warrants	-	-	-	(51)	-	(288)	-	(339)
	_____	_______	_______	_______	_______	_______	_______	_______
Balance at 31 January 2008	8,163	11,140	12,875	1,502	2,062	87,289	1,840	124,871
	_____	_______	_______	_______	_______	_______	_______	_______
Year ended 31 July 2008 (audited)
		Share			Capital
	Share	premium	Special	Warrant	redemption	Capital	Revenue
	capital	account	reserve	reserve	reserve	reserve	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 31 July 2007	8,145	11,087	14,990	1,576	2,062	90,554	3,265	131,679
Net return on ordinary activities after taxation	-	-	-	-	-	(18,211)	1,890	(16,321)
Dividends paid (note 2)	-	-	-	-	-	-	(2,004)	(2,004)
Purchase of own shares (note 10)	-	-	(3,015)	-	-	-	-	(3,015)
Exercise of Warrants (note 10)	18	53	-	(23)	-	23	-	71
Buyback of Warrants	-	-	-	(92)	-	(489)	-	(581)
	_____	_______	_______	_______	_______	_______	_______	_______
Balance at 31 July 2008	8,163	11,140	11,975	1,461	2,062	71,877	3,151	109,829
	_____	_______	_______	_______	_______	_______	_______	_______

  Cash Flow Statement

	Six months  ended	Six months  ended	Year  ended
	31 January 2009	31 January 2008	31 July 2008
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
Return on ordinary activities before finance costs and taxation	(12,673)	(1,751)	(15,052)
Adjustments for:
Losses on investments	10,682	2,802	17,988
Effect of foreign exchange rate movements	2,680	(73)	(48)
Decrease in accrued income	43	179	242
Increase in other debtors	(12)	(41)	(4)
Decrease in other creditors	(9)	(145)	(178)
Overseas withholding tax suffered	(72)	(4)	(204)
Stock dividend included in investment income	(15)	-	(56)
	___________	___________	___________
Net cash inflow from operating activities	624	967	2,688
Net cash outflow from servicing of finance	(130)	(269)	(348)
Net tax paid	(499)	(334)	(748)
Net cash (outflow)/inflow from financial investment	(2,325)	4,382	2,557
Equity dividends paid (note 2)	(1,558)	(2,004)	(2,004)
	___________	___________	___________
Net cash (outflow)/inflow before financing	(3,888)	2,742	2,145
Financing
Purchase of own shares	(1,589)	(2,115)	(3,015)
Exercise of Warrants	229	71	71
Buyback of Warrants	-	(339)	(581)
Drawdown/(repayment) of loan	8,065	(3,206)	(3,389)
	___________	___________	___________
Net cash inflow/(outflow) from financing activities	6,705	(5,589)	(6,914)
	___________	___________	___________
Increase/(decrease) in cash	2,817	(2,847)	(4,769)
	___________	___________	___________
Reconciliation of net cash flow to movements in net debt
Increase/(decrease) in cash	2,817	(2,847)	(4,769)
Effect of foreign exchange rate movements	(2,680)	73	48
(Drawdown)/repayment of loan	(8,065)	3,206	3,389
	___________	___________	___________
Movement in net debt in the period	(7,928)	432	(1,332)
Net debt at start of period	(2,786)	(1,454)	(1,454)
	___________	___________	___________
Net debt at end of period	(10,714)	(1,022)	(2,786)
	___________	___________	___________
Represented by:
Cash	1,749	3,110	1,387
Debt due within one year	(12,463)	(4,132)	(4,173)
	___________	___________	___________
	(10,714)	(1,022)	(2,786)
	___________	___________	___________

Notes to the Financial Statements

1.	Accounting policies
	(a)	Basis of Accounting
		The accounts have been prepared in accordance with applicable UK Accounting Standards, with pronouncements on half-yearly reporting issued by the Accounting Standards Board and with the Statement of Recommended Practice for 'Financial Statements of Investments Trust Companies' (December 2005). They have also been prepared on the assumption that approval as an investment trust will continue to be granted.
		The financial statements and the net asset value per share figures have been prepared in accordance with UK Generally Accepted Accounting Practice ('UK GAAP').
		The same accounting policies used for the year ended 31 July 2008 have been applied.
	(b)	Dividends payable
		Dividends are recognised in the period in which they are paid.

		Six months ended	Six months ended	Year  ended
		31 January  2009	31 January  2008	31 July  2008
2.	Dividends	£'000	£'000	£'000
	Final dividend for 2008 - 4.00p (2007 - 3.45p)	1,246	1,124	1,124
	Special dividend for 2008 - 1.00p (2007 - 2.70p)	312	880	880
		___________	___________	___________
		1,558	2,004	2,004
		___________	___________	___________

		Six months ended	Six months ended	Year  ended
		31 January  2009	31 January  2008	31 July  2008
3.	Income	£'000	£'000	£'000
	Income from investments
	UK dividend income	10	16	42
	Overseas dividends	1,732	1,851	4,730
	Stock dividend	15	-	56
		___________	___________	___________
		1,757	1,867	4,828
	Other income	___________	___________	___________
	Deposit interest	11	157	193
		___________	___________	___________
	Total income	1,768	2,024	5,021
		___________	___________	___________

4.	The taxation charge for the period has been calculated at an expected effective annual tax rate of 28%.

		Six months ended	Six months ended	Year  ended
		31 January 2009	31 January 2008	31 July  2008
5.	Return per Ordinary share	p	p	p
	Basic
	Revenue return	1.28	1.79	5.88
	Capital return	(42.76)	(9.26)	(56.68)
		___________	___________	___________
	Total return	(41.48)	(7.47)	(50.80)
		___________	___________	___________
	The figures above are based on the following:
		£'000	£'000	£'000
	Revenue return	400	579	1,890
	Capital return	(13,362)	(3,000)	(18,211)
		___________	___________	___________
	Total return	(12,962)	(2,421)	(16,321)
		___________	___________	___________
	Weighted average number of shares in issue{A}	31,250,716	32,410,446	32,128,649
	Diluted	p	p	p
	Revenue return	1.18	1.63	5.36
	Capital return	(39.51)	(8.43)	(51.68)
		___________	___________	___________
	Total return	(38.33)	(6.80)	(46.32)
		___________	___________	___________
	Number of dilutive shares{A}	2,566,179	3,194,608	3,109,607
	Diluted shares in issue{A}	33,816,895	35,605,054	35,238,256
	{A}Calculated excluding shares held in treasury
	The calculation of the diluted total, 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.

		As at	As at	As at
6.	Net asset value per equity share	31 January  2009	31 January  2008	31 July  2008
	Basic
	Net assets attributable	£93,949,000	£124,871,000	£109,829,000
	Number of Ordinary shares in issue{A}	31,195,986	31,942,939	31,629,133
	Net asset value per Ordinary share (p):
	Basic	301.16	390.92	347.24
		___________	___________	___________
	Diluted	276.96	354.16	316.46
		___________	___________	___________
	{A}Excludes shares in issue held in treasury.
	The diluted net asset value per Ordinary share has been calculated on the assumption that 4,266,293 (31 January 2008 - 4,620,356 and 31 July 2008 - 4,495,356) Warrants in issue were exercised on the first day of the financial year at 100p per share, giving a total of 35,462,279 (31 January 2008 - 36,563,295 and 31 July 2008 - 36,124,489) Ordinary shares.

7.	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 losses on investments in the Income Statement. The total costs were as follows:
		Six months ended	Six months ended	Year  ended
		31 January  2009	31 January  2008	31 July  2008
		£'000	£'000	£'000
	Purchases	28	13	43
	Sales	30	24	40
		___________	___________	___________
		58	37	83
		___________	___________	___________

8.	Related party transactions
	Mr M J Gilbert is a director of Aberdeen Asset Management PLC and its subsidiary Aberdeen Asset Management (Asia) Ltd ("AAM Asia"). Mr Gilbert is also a director of Aberdeen Asset Managers Ltd ("AAM"). AAM Asia has an agreement to provide management services to the Company and AAM has an agreement to provide both administration and marketing services to the Company.
	The management fee is payable monthly in arrears based on an annual amount of 1.2% calculated on the average net asset value of the Company over a 24 month period, valued monthly. During the period £764,000 (2008 - £730,000) of management fees were paid and payable, with a balance of £252,000 (2008 - £249,000) being payable to AAM Asia at the period end.
	The investment management fees are charged 100% to revenue.
	The administration fee is payable quarterly in advance and is based on a current annual amount of £73,000 (2008 - £69,000). During the period £36,000 (2008 - £35,000) of fees were paid and payable, with a balance of £18,000 (2008 - £17,000) prepaid to AAM at the period end.
	The marketing fee is based on a current annual amount of £103,000 (2008 - £90,000), payable quarterly in arrears. During the period £52,000 (2008 - £45,000) of fees were paid and payable, with a balance of £17,000 (2008 - £8,000 accrual) prepaid to AAM at the period end.

9.

Bank loan

During the six months ended 31 January 2009 the amounts drawn on a loan facility provided by Barclays Bank increased from US$8,267,226 to US$17,967,226. On 5 February 2009 US$1,467,226 of the loan was repaid, on 12 February 2009 a further US$2,000,000 was repaid and on 12 March 2009 a further US$1,000,000 was repaid. The remaining balance of US$13,500,000 has been rolled over to 9 April 2009 at a rate of 0.964%.

10.	Called-up share capital
	During the six months ended 31 January 2009 the Company repurchased 662,210 Ordinary shares of 25p each (31 January 2008 - 708,205, 31 July 2008 - 1,022,011) at a cost of £1,589,000 (31 January 2008 - £2,115,000, 31 July 2008 - £3,015,000) including expenses. All of these shares were placed in treasury.
	During the six months ended 31 January 2009 an additional 229,063 (31 January 2008 - 71,547, 31 July 2008 - 71,547) Ordinary shares of 25p each were issued after 229,063 (31 January 2008 - 71,547, 31 July 2008 - 71,547) Warrants were exercised at 100p each. The total consideration received was £229,063.

11.	Half-Yearly Report
	The financial information contained in this Half-Yearly Financial Report does not constitute statutory accounts as defined in Sections 434 - 436 of the Companies Act 2006. The financial information for the six months ended 31 January 2009 and 31 January 2008 have not been audited.
	The information for the year ended 31 July 2008 has been extracted from the latest published audited financial statements which have been filed with the Registrar of Companies. The report of the auditors on those accounts contained no qualification or statement under Section 237 (2) or (3) of the Companies Act 1985.
	The auditors have reviewed the financial information for the six months ended 31 January 2009 pursuant to the Auditing Practices Board guidance on Review of Interim Financial Information. The report of the auditors is included below.
12	This Half-Yearly Financial Report was approved by the Board on 27 March 2009. The financial information for the six months ended 31 January 2009 and 31 January 2008 comprises non-statutory accounts within the meaning of Section 240 of the Companies Act 1985. The financial information for the year ended 31 July 2008 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 237(3) of the Companies Act 1985.   The auditors have reviewed the financial information for the six months ended 31 January 2009 pursuant to the Auditing Practices Board guidance on Review of Financial Information. The report of the auditors is contained within this announcement. Copies of the Half Yearly 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

27 March 2009

  Independent Review Report to Aberdeen Asian Smaller Companies Investment Trust PLC

Introduction 

We have been engaged by Aberdeen Asian Smaller Companies Investment Trust PLC ("the Company") to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 January 2009 which comprises the Income Statement, Balance Sheet, Reconciliation of Movements in Shareholders Funds, Cash Flow Statement and the related notes 1 to 12. We have read the other information contained in the half yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements. 

This report is made solely to the Company in accordance with guidance contained in ISRE 2410 (UK and Ireland) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" 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 half-yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority. 

As disclosed in note 1, the annual financial statements of the Company are prepared in accordance with United Kingdom Generally Accepted Accounting Practice. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with the Accounting Standards Board Statement "Half-Yearly Financial Reports". 

Our Responsibility 

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review. 

Scope of Review 

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. 

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 January 2009 is not prepared, in all material respects, in accordance with the Accounting Standards Board Statement "Half-Yearly Financial Reports" and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority. 

Ernst & Young LLP

London

27 March 2009

 

END

 

 

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