Annual Financial Report/Results
ABERDEEN ASIAN INCOME FUND LIMITED
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2011
1. CHAIRMAN'S STATEMENT
Background and Overview
I am pleased to report that your Company performed commendably in what was a volatile period for global financial markets. Over the year to 31 December 2011, the Company's diluted NAV total return was 2.2%, in sharp contrast to the 14.8% decline posted by the MSCI All Country Asia Pacific ex-Japan Index. The share price total return was 2.7% reflecting an increase in the premium to NAV from 1.4% to 2.0% with the share price ending the year at 168.1p. Significantly, we have increased the dividend for the year by 12.5% to 6.75p.
The Company's resilience reflects not only your Manager's approach to investing in well-run, cash-generating businesses but also the heightened risk aversion which turned investor attention back to high-quality, dividend-paying stocks. Many of your Company's holdings, which are defensive businesses with high dividend yields, therefore, did well in relative terms. Remarkably, almost half recorded positive absolute returns.
Specifically, your Company's investments in the Southeast Asian markets of Malaysia and Thailand, where dividend payout ratios tend to be higher, proved very rewarding. The holdings in Taiwan, too, put in solid performances, supported by their stable cash flows and attractive dividend yields. A more detailed analysis of performance is set out in the Manager's Review.
Overall, 2011 was a difficult year for Asia's stock markets. After two consecutive years of double-digit gains, equities suffered broad declines, hit by fiscal woes in Europe and the US. Sluggish activity in these economies clouded prospects for Asia's export-dependent markets in turn. Complicating the picture was China, the world's key growth engine. Its weaker growth momentum - largely a result of tighter policies to bring down inflation - deterred investors wary of a 'hard landing'. Last year I touched upon the risks posed by inflationary pressures but as the year under review progressed, policymakers shifted their priorities from controlling prices to supporting growth amid a deteriorating global outlook. While inflation has broadly subsided, it remains a concern in some countries, most notably in India, although your Company has no direct exposure there.
Companies, meanwhile, understandably turned cautious as the operating environment became more uncertain. Earnings growth was downgraded accordingly. But corporate fundamentals remain firm. As I have mentioned on previous occasions, Asian companies have over the years made considerable progress in reducing debt and strengthening their balance sheets, improving shareholder value in the process. Surplus cash is being returned to shareholders in the form of higher dividends. Certainly your Company's investments have generally continued to maintain their dividend payouts. Dividends received in 2011 exceeded that of 2010, a reflection of the underlying holdings' strong financials and regard for the interests of shareholders.
Dividends
Four quarterly interim dividends were declared over 2011. The first three dividends were paid at the rate of 1.5p totalling 4.5p (2010 - 3.75p) which, when added to the fourth interim dividend of 2.25p (2010 - 2.25p), represented an overall increase of 12.5% for the year. Following the payment of the fourth interim dividend, the Company's revenue reserves were £5.0m (which represents approximately 3.5p per share).
Your Manager is cautious about the prospects for corporate earnings in light of the uncertain economic environment. It is anticipated, however, that the majority of the portfolio's holdings, given their healthy cash flows, strong balance sheets and focus on shareholder value, will strive to maintain their dividend payouts in the current year.
Share Issuance and Gearing
During the year, the Company issued 6.25 million new Ordinary shares at a premium to the prevailing NAV and in response to on-going demand from the market. Such issues enhance the NAV (albeit marginally) for existing shareholders. Subsequent to the year end an additional 4.2 million Ordinary shares have been issued for cash. A further 14.8 million shares were issued following the exercise of Warrants to subscribe for Ordinary shares in May and October last year. There is a separate notice accompanying the Annual Report confirming that the next Warrant subscription date will be 11 May 2012. Warrantholders are reminded that there is a bi-annual right to exercise Warrants up to the final exercise date which will be in May 2013.
During the year the value of short term borrowings under the Company's loan facility increased marginally from £10.9 million to £11.0 million as a result of currency movements. On 20 March 2012 the Company's £15 million senior secured multicurrency revolving bank facility with Scotia Bank was extended for two years.
Outlook
Global stock markets entered the new year on a somewhat more positive note. The US economy appears to be showing signs of life. And there are hopes that the European Central Bank's loans to banks may have helped avert a severe credit crunch. But there is still much to be cautious about in the near term. Europe's debt concerns remain at the fore. The US, too, could continue to face a period of policy stasis, given the coming presidential election.
How concerning is all this? For one, the onset of recession in Europe and below-trend growth in the US is already being felt by Asian economies, particularly its exporters. For the most part, however, Asian governments have the wherewithal - both fiscal and monetary - to prop up growth more aggressively. But there is a downside. Stimulatory measures could worsen existing economic imbalances, most notably in China. Authorities there will be reluctant to overstimulate the economy again for fear of re-igniting inflation. With growth expected at around 7.5% in 2012, however, the mainland should continue to underpin Asia's growth. Most of all, while governments have scaled back growth forecasts in the face of a widely anticipated global economic slowdown, Asia is still on course to be the world's fastest-growing region this year.
Directorate
Martyn Chambers has indicated that he does not intend to seek re-election as a Director following his retirement by rotation at the Annual General Meeting on 16 May 2012. I would like to take this opportunity on behalf of the Board to thank Martyn for his support and input since the launch of the Company in 2005. We will miss his wise counsel. The Nomination Committee has undertaken a detailed process to identify a new non executive Director using the services of external consultants and I am pleased to advise that Charles Clarke has accepted an invitation to join the Board as an independent non executive Director with effect from 29 March 2012. Charles is a Jersey resident and was formerly Channel Island senior partner at KPMG having also worked for KPMG in Kuala Lumpur and will bring a wealth of international business experience to the Board. Charles is a non-executive director of a number of companies including SG Hambros Bank Limited where he is chairman of the audit committee and Phoenix Group Holdings where he is a member of the audit and investment committees.
Annual General Meeting
The Company's Annual General Meeting ("AGM") will be held at 9.30 a.m. on Wednesday 16 May 2012 at No.1 Seaton Place, St Helier, Jersey and your Board looks forward to meeting as many shareholders as possible. We have decided not to hold a London shareholder presentation this year, but will keep under review the merits of reinstating this event in the future. If you are unable to attend the AGM, I would encourage you to vote by returning your proxy (or letter of directions if you invest via the Aberdeen Savings Plans) which is enclosed with the Annual Report and Accounts. If you intend to attend the AGM, I would also be grateful if you would tick the relevant box when voting.
I look forward to reporting to you again with the Half Yearly Report to 30 June 2012, which will be issued to shareholders at the end of August 2012. Those shareholders who wish to keep up to date with developments between formal reports may wish to view the monthly factsheet at ttp://www.asian-income.co.uk/doc.nsf/Lit/FactsheetUKClosedAAIF.
Peter Arthur
Chairman
27 March 2012
2. MANAGER'S REVIEW
Overview
Asian stock markets declined sharply in 2011 amid much volatility, symptomatic of widespread anxiety. Sentiment was shaken by several significant events. Political upheaval in the Middle East and North Africa caused crude oil prices to rise above US$100 a barrel, which worsened inflation fears. Natural catastrophes in the region - the earthquake, tsunami and nuclear crisis in Japan and severe flooding in Australia, Thailand and the Philippines - also hurt confidence. The deepening Eurozone debt crisis, which appeared to be spreading to the core economies, as well as US economic woes further accentuated share price fluctuations. In previous years, markets had been cushioned by two rounds of quantitative easing in the US. But the end of the second round in the middle of 2011 caused market declines, though losses were pared following the European Central Bank's massive liquidity injection into the banking system at the end of the year. Overall, stock markets in Asia underperformed markets worldwide.
While most Asian economies fared better than their developed peers in 2011, growth eased. China, the region's bellwether, was not spared from the slowdown. The mainland's expansion rate moderated to 8.9% in the fourth quarter, its slowest pace in more than two years, as lower exports and property cooling measures took their toll. Still, growth was better than expected and concerns of a hard landing receded.
Nevertheless, growth prospects in Asia appeared less positive and gradually outweighed concerns over persistent price pressures, albeit inflation remains a bugbear. Initially, escalating consumer prices had prompted several central banks, particularly India's, to hike interest rates, while China raised the reserve requirement ratio five times from 19% to 21.5%. But policymakers reversed policy towards the end of the period, embarking on loosening monetary policy or holding rates steady to support their economies. Notably, China lowered the reserve requirement ratio for lenders in November for the first time in three years, while India, which had been aggressively hiking benchmark rates until October, paused monetary tightening.
Performance Review
The fund's diluted net asset value total return was 2.2% over the period and the share price total return was 2.7%. This compares with the MSCI AC Asia Pacific ex Japan Index's total return of a negative14.8%. In view of the severe volatility in global financial markets, more defensive, consumer-oriented stocks, especially those with strong cash flow generation and decent yields, outperformed. With respect to this trend, the overweight to the Southeast Asian countries of Malaysia and Thailand were the key contributors to the outperformance. In particular, our consumer and telecommunications holdings in these countries were among the top contributors to relative return.
In Malaysia, DiGi.Com, Guinness Anchor and British American Tobacco's (BAT) strong cash flows and decent dividend payouts appealed to investors. DiGi.Com's results also met forecasts with profits supported by top-line growth and better cost control. Guinness Anchor and BAT were aided by Malaysia's decision to leave the excise duty unchanged, contrary to expectations. It is worth noting that BAT's dividend payout ratio exceeded 90%. In Thailand, mobile phone operator Advanced Info Services posted solid earnings thanks to service revenue growth and lower operating expenses. Rising local consumption also boosted retailer Siam Makro's top-line growth, while healthy advertising expenditure lifted free-to-air TV broadcaster BEC World.
The underweight to both Taiwan and China also contributed to relative performance. Taiwan is a cyclical market dominated by financial companies. We do not hold any Taiwanese financial companies, preferring exposure to companies with healthy balance sheets such as Taiwan Semiconductor Manufacturing. Meanwhile, our holding in Taiwan Mobile rallied on the back of positive results because of growth in data revenue as penetration of smartphones increased. In China, our underweight position reflects a lack of exposure to financials, which constitutes about 20% of the local index. Mainland banks were among the weakest performers during the year and, as such, not holding them helped performance.
The lack of exposure to India also aided the portfolio, as the domestic market lagged on the back of persistently high inflation, elevated funding costs and policy stasis, which weighed on the economy. These factors led to increased foreign outflows and weakened the rupee, Asia's worst performing currency in 2011, which in turn exacerbated concerns over corporate profits and US-dollar denominated debt. We do not hold any Indian companies as their dividend yields are relatively unappealing.
On the other hand, not having any equity holdings in Indonesia and Korea detracted from relative performance. In Indonesia, companies with good dividend yields tend to be concentrated in the telecommunications sector, which is a highly competitive market where pricing can be irrational. With regards to Korea, our concerns lie in its lax corporate governance and companies which do not have a culture of paying out attractive dividends. We remain comfortable avoiding these countries.
Portfolio Activity
The review period saw the disposal of a few financial holdings, including Hong Leong Bank as it no longer offered an attractive yield, as well as the Bank of the Philippine Islands and AIA Group in view of better opportunities elsewhere. In the telecommunications sector, we sold Telekomunikasi Indonesia in favour of a new position in China Mobile, which has a debt-free balance sheet, higher yield and better business prospects.
Other introductions included Hong Kong-listed lender HSBC Holdings, given its strong Asian franchise and solid capital base. HSBC was trading at a small premium to book value, which compared favourably to most of its regional peers. Further, its dividend payout is close to 50% of net revenue attributable to shareholders. We also initiated a position in Australian property trust Westfield Group, which owns and manages retail shopping centres in Australia, the US and UK, because of its relatively attractive income yield. As well, we bought Singapore-headquartered conglomerate Keppel Corporation, which has a growing pipeline of businesses in its key offshore and marine division. We also purchased Hong Kong bulk shipping company Pacific Basin, which has one of the strongest balance sheets in its industry. Despite the cyclicality of its business, it still posted healthy profits and offered a very attractive dividend yield of about 7%. Elsewhere, a new position was established in New Zealand telecommunications utility Chorus, which we received as an in specie distribution from Telecom New Zealand.
Subsequent to the period end the credit linked note issued by Deutsche Bank linked to the Indonesia Government Bond 10% 07/17 was sold entirely following excellent performance.
Outlook
Despite an apparent improvement in risk appetite, the sustainability of the rally in global markets remains uncertain. With no permanent resolution to the European debt crisis, markets are likely to witness further volatility. The IMF has cut its global growth forecast for 2012 and warned of a more intense downturn if Europe does not take stronger action to resolve its problems. The US, which is lacking a plan to contain its huge deficit, may also face another rating downgrade by Standard & Poor's. But Asia's growth is expected to be more resilient than the West, thanks to robust domestic demand and better flexibility with respect to fiscal and monetary policies.
Nevertheless, this confluence of external and domestic influences presents an opportune time to invest in dividend yielding stocks in Asia. Yields offered by many Asian companies, including the portfolio's holdings, are higher than those of local government bonds. As such, dividend stocks offer a competitive income alternative.
Although the operating environment remains uncertain, the companies we hold have robust balance sheets and good corporate governance. These qualities enable them to be committed to long-term dividend growth. Encouragingly, the dividend outlook for the Company's portfolio is expected to be decent this year. We maintain our view that investing in stocks with good dividend payouts is a defensive strategy in this current market climate and one which can generate healthy returns in the long run.
Aberdeen Asset Management Asia Limited
27 March 2012
3. STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Jersey Company law requires the Directors to prepare financial statements for each financial period in accordance with any generally accepted accounting principles. The financial statements of the Company are required by law to 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 should:
• select suitable accounting policies and then apply them consistently;
• make judgments and estimates that are reasonable and prudent; and,
• specify which generally accepted accounting principles have been adopted in their preparation.
The Directors are responsible for keeping accounting records which are sufficient to show and explain its transactions and are such as to disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements prepared by the Company comply with the requirements of the Companies (Jersey) Law 1991. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors confirm that to the best of their knowledge:
• the financial statements, prepared in accordance with IFRS, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and
• the Annual 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 Asian Income Fund Limited
P A K Arthur
Chairman
27 March 2012
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website. Legislation in Jersey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions
4. BUSINESS REVIEW
A review of the activities of Aberdeen Asian Income Fund Limited (the "Company") is given below and in the Chairman's Statement and the Manager's Review. This includes a review of the business of the Company and its principal activities, likely future developments of the business, dividends declared and details of the issue of shares during the year by the Company. The principal risks associated with the Company are detailed below and in note 16 to the financial statements. The Key Performance Indicators for the Company including NAV performance, share price performance and the performance of the MSCI AC Asia Pacific (ex Japan) Index are detailed under Financial Highlights below.
The Company
The Company is a Jersey-incorporated, closed-end investment company and its shares are listed on the London Stock Exchange. The Company is a member of the Association of Investment Companies.
Investment Objective
The investment objective of the Company is to provide investors with a total return primarily through investing in Asian Pacific securities, including those with an above average yield.
Status
The Company is registered with limited liability in Jersey as a closed-end investment company under the Companies (Jersey) Law 1991 with registered number 91671. In addition, the Company constitutes and is regulated as a collective investment fund under the Collective Investment Funds (Jersey) Law 1988. The Ordinary shares are admitted to the Official List in the premium segment and are traded on the London Stock Exchange's Main Market.
Principal Risk Factors
Ordinary shares
The market price and the realisable value of the Ordinary shares, as well as being affected by their underlying net asset value, also take into account supply and demand for the Ordinary shares, market conditions and general investor sentiment. As such, the market value and the realisable value of the Ordinary shares may fluctuate and vary considerably from the net asset value of the Ordinary shares and investors may not be able to realise the value of their original investment. There is no guarantee that the Board's discount management policy will achieve its objective.
Warrants
Warrants represent a geared investment, so a relatively small movement in the market price of the Ordinary shares may result in a disproportionately large movement, unfavourable as well as favourable, in the market price of the Warrants.
Dividends
The Company will only pay dividends on the Ordinary shares to the extent that it has profits (current year or brought forward) available for that purpose. The ability of the Company to pay any dividends in respect of the Ordinary shares and any future dividend growth will depend primarily on the level of income received from its investments. The Company's income is derived from ordinary and special dividends and the level of these dividends received in any year is liable to fluctuation. Accordingly, the amount of the dividends paid to shareholders may also fluctuate.
Borrowings
Whilst the use of borrowings should enhance the total return on the Ordinary shares where the return on the Company's underlying assets is rising and exceeds the cost of borrowing, it will have the opposite effect where the underlying return is less than the cost of borrowing, further reducing the total return on the Ordinary shares.
Market Risks
The fair value or future cash flows of a financial instrument held by the Company may fluctuate because of changes in market prices. Market risk comprises three elements, interest rate risk, currency risk and equity price risk. Further details of these risks are disclosed in note 16 to the financial statements. Investment in emerging securities markets in the Asia Pacific region involves a greater degree of risk than that usually associated with investment in more developed securities markets, including the risk of social, economic and political instability which may have an adverse effect on economic returns or restrict investment opportunities.
General
The Company does not have a fixed winding-up date and, therefore, unless shareholders vote to wind up the Company, shareholders will only be able to realise their investment through the market.
Taxation and Exchange Controls
Any change in the Company's tax status or in taxation legislation (including the tax treatment of dividends or other investment income received by the Company) could affect the value of the investments held by the Company, affect the Company's ability to provide returns to shareholders or alter the post-tax returns to shareholders.
The Company may purchase investments that may be subject to exchange controls or withholding taxes in various jurisdictions. In the event that exchange controls or withholding taxes are imposed with respect to any of the Company's investments, the effect will generally be to reduce the income received by the Company on its investments and the capital value of the affected investments.
Management Agreement
The Company has an agreement with Aberdeen Private Wealth Management Limited for the provision of management services, details of which are shown in note 5 to the financial statements. The Management Agreement provides for an investment management fee of 1.0 per cent. per annum of the Company's net assets, payable monthly in arrears. The Management Agreement also provides for a company secretarial and administration fee of £118,000 per annum, payable quarterly in arrears, which will be increased annually in line with any increases in RPI. The Management Agreement is terminable by either the Company or the Manager giving the other not less than six months' notice.
The Directors review the terms of the Management Agreement on a regular basis and have confirmed that, due to the investment skills, experience and commitment of the Investment Manager, in their opinion the continuing appointment of Aberdeen Private Wealth Management Limited, on the terms agreed, is in the interests of shareholders as a whole.
5. STATEMENT OF COMPREHENSIVE INCOME
|
|
|
Year ended |
Year ended |
||||
|
|
|
31 December 2011 |
31 December 2010 |
||||
|
|
|
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
|
|
Notes |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Investment income |
4 |
|
|
|
|
|
|
|
Dividend income |
|
10,887 |
52 |
10,939 |
9,280 |
13 |
9,293 |
|
Interest income |
|
991 |
- |
991 |
1,005 |
- |
1,005 |
|
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
______ |
|
Total revenue |
|
11,878 |
52 |
11,930 |
10,285 |
13 |
10,298 |
|
(Losses)/gains on financial assets at fair value through profit or loss |
10 |
- |
(3,891) |
(3,891) |
- |
42,609 |
42,609 |
|
Net currency losses |
14 |
- |
(48) |
(48) |
- |
(532) |
(532) |
|
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
______ |
|
|
|
11,878 |
(3,887) |
7,991 |
10,285 |
42,090 |
52,375 |
|
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
______ |
|
Expenses |
|
|
|
|
|
|
|
|
Investment management fee |
5 |
(859) |
(1,288) |
(2,147) |
(677) |
(1,016) |
(1,693) |
|
Other operating expenses |
6 |
(841) |
(4) |
(845) |
(748) |
(39) |
(787) |
|
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
______ |
|
Profit before finance costs and tax |
|
10,178 |
(5,179) |
4,999 |
8,860 |
41,035 |
49,895 |
|
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
______ |
|
Finance costs |
7 |
(75) |
(112) |
(187) |
(94) |
(142) |
(236) |
|
Profit before tax |
|
10,103 |
(5,291) |
4,812 |
8,766 |
40,893 |
49,659 |
|
|
|
|
|
|
|
|
|
|
Tax expense |
|
(459) |
- |
(459) |
(509) |
- |
(509) |
|
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
______ |
|
Profit/(loss) for the year attributable to equity shareholders |
|
9,644 |
(5,291) |
4,353 |
8,257 |
40,893 |
49,150 |
|
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
______ |
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|
|
|
|
|
|
|
|
|
Earnings per Ordinary share (pence): |
9 |
|
|
|
|
|
|
|
Basic |
|
7.44 |
(4.08) |
3.36 |
7.31 |
36.21 |
43.52 |
|
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
______ |
|
Diluted |
|
7.26 |
(3.98) |
3.28 |
7.03 |
34.84 |
41.87 |
|
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
______ |
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|
|
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|
The Company does not have any income or expense that is not included in profit/(loss) for the year, and therefore the "Profit/(loss) for the year" is also the "Total comprehensive income for the year", as defined in IAS 1 (revised). |
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All of the profit/(loss) and total comprehensive income is attributable to the equity holders of Aberdeen Asian Income Fund Limited. There are no minority interests. |
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The total column of this statement represents the Statement of Comprehensive Income of the Company, prepared in accordance with IFRS. The revenue and capital columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies. All items in the above statement derive from continuing operations. |
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The accompanying notes are an integral part of the financial statements. |
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6. BALANCE SHEET
|
|
|
As at |
As at |
|
|
|
31 December |
31 December |
|
|
|
2011 |
2010 |
|
|
Notes |
£'000 |
£'000 |
|
Non-current assets |
|
|
|
|
Investments designated at fair value through profit or loss |
10 |
236,609 |
216,933 |
|
|
|
_________ |
_________ |
|
Current assets |
|
|
|
|
Cash and cash equivalents |
|
5,930 |
1,380 |
|
Other receivables |
11 |
738 |
1,198 |
|
|
|
_________ |
_________ |
|
|
|
6,668 |
2,578 |
|
|
|
_________ |
_________ |
|
Current liabilities |
|
|
|
|
Bank loans |
12 |
(11,000) |
(10,913) |
|
Other payables |
12 |
(331) |
(444) |
|
|
|
_________ |
_________ |
|
|
|
(11,331) |
(11,357) |
|
|
|
_________ |
_________ |
|
Net current liabilities |
|
(4,663) |
(8,779) |
|
|
|
_________ |
_________ |
|
Net assets |
|
231,946 |
208,154 |
|
|
|
_________ |
_________ |
|
Stated capital and reserves |
|
|
|
|
Stated capital |
13 |
139,084 |
118,035 |
|
Warrant reserve |
|
615 |
2,095 |
|
Capital redemption reserve |
|
1,560 |
1,560 |
|
Capital reserve |
14 |
82,523 |
79,427 |
|
Revenue reserve |
14 |
8,164 |
7,037 |
|
|
|
_________ |
_________ |
|
Equity shareholders' funds |
|
231,946 |
208,154 |
|
|
|
_________ |
_________ |
|
|
|
|
|
|
Net asset value per Ordinary share (pence): |
15 |
|
|
|
Basic |
|
166.77 |
176.35 |
|
|
|
_________ |
_________ |
|
Diluted |
|
164.78 |
167.85 |
|
|
|
_________ |
_________ |
7. STATEMENT OF CHANGES IN EQUITY
|
For the year ended 31 December 2011 |
|
|
|
|
|
|
|
|
|
|
|
Capital |
|
|
|
|
|
|
Stated |
Warrant |
redemption |
Capital |
Revenue |
Retained |
|
|
|
capital |
reserve |
reserve |
reserve |
reserve |
earnings |
Total |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Opening balance |
118,035 |
2,095 |
1,560 |
79,427 |
7,037 |
- |
208,154 |
|
Issue of own shares |
6,250 |
- |
- |
3,947 |
- |
- |
10,197 |
|
Exercise of warrants |
14,799 |
(1,480) |
- |
4,440 |
- |
- |
17,759 |
|
Profit for the year |
- |
- |
- |
- |
- |
4,353 |
4,353 |
|
Transferred from retained earnings to capital reserve{A} |
- |
- |
- |
(5,291) |
- |
5,291 |
- |
|
Transferred from retained earnings to revenue reserve |
- |
- |
- |
- |
9,644 |
(9,644) |
- |
|
Dividends paid |
- |
- |
- |
- |
(8,517) |
- |
(8,517) |
|
|
_______ |
______ |
________ |
_______ |
______ |
______ |
_______ |
|
Balance at 31 December 2011 |
139,084 |
615 |
1,560 |
82,523 |
8,164 |
- |
231,946 |
|
|
_______ |
______ |
________ |
_______ |
______ |
______ |
_______ |
|
|
|
|
|
|
|
|
|
|
For the year ended 31 December 2010 |
|
|
|
|
|
|
|
|
|
|
|
Capital |
|
|
|
|
|
|
Stated |
Warrant |
redemption |
Capital |
Revenue |
Retained |
|
|
|
capital |
reserve |
reserve |
reserve |
reserve |
earnings |
Total |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Opening balance |
109,790 |
2,200 |
1,560 |
34,528 |
6,320 |
- |
154,398 |
|
Issue of own shares |
7,199 |
- |
- |
3,692 |
- |
- |
10,891 |
|
Exercise of warrants |
1,046 |
(105) |
- |
314 |
- |
- |
1,255 |
|
Profit for the year |
- |
- |
- |
- |
- |
49,150 |
49,150 |
|
Transferred from retained earnings to capital reserve{A} |
- |
- |
- |
40,893 |
- |
(40,893) |
- |
|
Transferred from retained earnings to revenue reserve |
- |
- |
- |
- |
8,257 |
(8,257) |
- |
|
Dividends paid |
- |
- |
- |
- |
(7,540) |
- |
(7,540) |
|
|
_______ |
______ |
________ |
_______ |
______ |
______ |
_______ |
|
Balance at 31 December 2010 |
118,035 |
2,095 |
1,560 |
79,427 |
7,037 |
- |
208,154 |
|
|
_______ |
______ |
________ |
_______ |
______ |
______ |
_______ |
|
|
|
|
|
||||
|
{A} Represents the capital profit attributable to equity shareholders per the Statement of Comprehensive Income. |
|||||||
|
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. |
|||||||
8. CASH FLOW STATEMENT
|
|
|
Year ended |
Year ended |
||
|
|
|
31 December 2011 |
31 December 2010 |
||
|
|
Notes |
£'000 |
£'000 |
£'000 |
£'000 |
|
Profit for the year |
|
|
4,353 |
|
49,150 |
|
Add back finance costs |
7 |
|
187 |
|
236 |
|
Add back taxation paid |
|
|
459 |
|
509 |
|
Losses/(gains) on investments held at fair value through profit or loss |
10 |
|
3,891 |
|
(42,609) |
|
Net currency losses |
14 |
|
48 |
|
532 |
|
Decrease/(increase) in other receivables |
|
|
460 |
|
(537) |
|
(Decrease)/increase in other payables |
|
|
(113) |
|
200 |
|
|
|
|
_______ |
|
_______ |
|
Net cash inflow from operating activities before finance costs and tax{A} |
|
|
9,285 |
|
7,481 |
|
|
|
|
|
|
|
|
Bank and loan interest paid |
|
|
(188) |
|
(276) |
|
|
|
|
|
|
|
|
Overseas taxation paid |
|
|
(459) |
|
(509) |
|
|
|
|
_______ |
|
_______ |
|
Net cash inflow from operating activities |
|
|
8,638 |
|
6,696 |
|
|
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
|
Purchases of investments |
|
(48,529) |
|
(35,366) |
|
|
Sales of investments |
|
24,962 |
|
21,455 |
|
|
|
|
_______ |
|
_______ |
|
|
Net cash outflow from investing activities |
|
|
(23,567) |
|
(13,911) |
|
|
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
|
Issue of own shares |
13 |
10,197 |
|
10,891 |
|
|
Exercise of warrants |
13 |
17,759 |
|
1,255 |
|
|
Dividends paid |
8 |
(8,517) |
|
(7,540) |
|
|
Loans drawn down |
|
- |
|
42 |
|
|
|
|
|
_______ |
|
_______ |
|
Net cash inflow from financing activities |
|
|
19,439 |
|
4,648 |
|
|
|
|
_______ |
|
_______ |
|
Net increase/(decrease) in cash and cash equivalent |
|
|
4,510 |
|
(2,567) |
|
Cash and cash equivalents of the start of the year |
|
|
1,380 |
|
4,165 |
|
Effect of foreign exchange rate changes |
|
|
40 |
|
(218) |
|
|
|
|
_______ |
|
_______ |
|
Cash and cash equivalents at the end of the year |
2,16 |
|
5,930 |
|
1,380 |
|
|
|
|
_______ |
|
_______ |
|
|
|
||||
|
{A}Includes income from dividends of £11,230,000 gross (2010 - £8,807,000 gross) and interest income of £990,000 (2010 - £969,000). |
|||||
9. NOTES TO THE FINANCIAL STATEMENTS
Additional Notes to the Annual Financial Report:
|
For the year ended 31 December 2011 |
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|
|
|
|
|
1. |
Principal activity |
|
|
|
The Company is a closed-end investment company incorporated in Jersey, with its shares being listed on the London Stock Exchange. |
|
|
|
|
|
|
2. |
Accounting Policies |
|
|
|
The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the International Accounting Standards Board (IASB), and interpretations issued by the International Reporting Interpretations Committee of the IASB (IFRIC). |
|
|
|
|
|
|
|
(a) |
Basis of preparation |
|
|
|
The financial statements are prepared on a historical cost basis, except for financial assets that have been measured at fair value through profit or loss. |
|
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|
|
|
|
|
The accounting policies which follow set out those policies which apply in preparing the financial statements for the year ended 31 December 2011. |
|
|
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|
|
The financial statements are presented in sterling and all values are rounded to the nearest thousand (£'000) except when otherwise indicated. |
|
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|
|
Where guidance set out in the Statement of Recommended Practice ("SORP") for investment trusts issued by the Association of Investment Companies ("AIC") is consistent with the requirement of IFRS, the Directors have sought to prepare the financial statements on a basis compliant with the recommendations of the SORP. |
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|
|
Changes in accounting policy and disclosures |
|
|
|
At the date of authorisation of these financial statements, the following Standards and Interpretations were in issue but not yet effective: |
|
|
|
Amendments to IFRS 1 - Severe Hyperinflation and Removal of Fixed Dates for First Time Adopters (effective for annual periods beginning on or after 1 July 2011). |
|
|
|
Amendments to IFRS 7 - Financial Instruments: Transfers of Financial Assets Disclosures (effective for annual periods beginning on or after 1 July 2011). |
|
|
|
IFRS 9 - Financial Instruments: Classification and Measurement (effective for annual periods beginning on or after 1 January 2015). |
|
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|
IFRS 10 - Consolidated Financial Statements (early adoption permitted) (effective for annual periods beginning on or after 1 January 2013). |
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|
IFRS 11 - Joint Arrangements (early adoption permitted) (effective for annual periods beginning on or after 1 January 2013). |
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|
IFRS 12 - Disclosure of Interests in Other Entities (early adoption permitted) (effective for annual periods beginning on or after 1 January 2013). |
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|
|
IFRS 13 - Fair Value Measurement (effective for annual periods beginning on or after 1 January 2013). |
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|
|
Amendments to IAS 1 - Presentation of Items of Other Comprehensive Income (effective for annual periods beginning on or after 1 July 2012) |
|
|
|
Amendments to IAS 12 - Income Taxes - Deferred Tax Amendment (effective for annual periods beginning on or after 1 January 2012). |
|
|
|
Amendments to IAS 19 - Employee Benefits (effective for annual periods on or after 1 January 2013). |
|
|
|
IAS 27 - Separate Financial Statements (early adoption permitted) (effective for annual periods beginning on or after 1 January 2013). |
|
|
|
IAS 28 - Investments in Associates and Joint Ventures (early adoption permitted) (effective 1 January 2013). |
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|
|
The Directors do not anticipate that the adoption of these Standards and Interpretations in future periods will materially impact the Company's financial results in the period of initial application although there will be revised presentations to the Primary Financial Statements and additional disclosures. The Company intends to adopt the Standards in the reporting period when they become effective. |
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|
(b) |
Income |
|
|
|
Dividends receivable on equity shares (other than special dividends) are brought into account on the ex-dividend date. 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. Where the Company has elected to receive dividends in the form of additional shares rather than in cash, the amount of the cash dividend foregone is recognised as income. Special dividends are credited to capital or revenue according to their circumstances. Dividend revenue is presented gross of any non-recoverable withholding taxes, which are disclosed separately in the Statement of Comprehensive Income. |
|
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|
|
|
|
|
The fixed returns on debt securities and non-equity shares are recognised using the effective interest rate method. |
|
|
|
|
|
|
|
Interest receivable from cash and short-term deposits is accrued to the end of the financial period. |
|
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|
|
|
|
(c) |
Expenses |
|
|
|
All expenses, with the exception of interest expenses, which are recognised using the effective interest method, are accounted for on an accruals basis. Expenses are charged through the revenue column of the Statement of Comprehensive Income except as follows: |
|
|
|
expenses which are incidental to the acquisition or disposal of an investment are treated as capital and separately identified and disclosed in note 10; |
|
|
|
expenses (including share issue costs) are treated as capital where a connection with the maintenance or enhancement of the value of the investments can be demonstrated; and |
|
|
|
the Company charges 60% of investment management fees and finance costs to capital, 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. |
|
|
|
|
|
|
(d) |
Taxation |
|
|
|
Profits arising in the Company for the 2011 year of assessment will be subject to tax at the rate of 0% (2010 - 0%). |
|
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|
|
|
|
|
However, in some jurisdictions, investment income and capital gains are subject to withholding tax deducted at the source of the income. The Company presents the withholding tax separately from the gross investment income in the Statement of Comprehensive Income. For the purpose of the Cash Flow Statement, cash inflows from investments are presented net of withholding taxes, when applicable. |
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|
|
|
(e) |
Investments |
|
|
|
All investments have been designated upon initial recognition as fair value through profit or loss. This is done because all investments are considered to form part of a group of financial assets which is evaluated on a fair value basis, in accordance with the Company's documented investment strategy, and information about the grouping is provided internally on that basis. |
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|
Purchases of investments are recognised on a trade date basis and designated upon initial recognition at fair value through profit or loss. Sales of assets are also recognised on a trade date basis. Proceeds are measured at fair value, which are regarded as the proceeds of sale less any transaction costs. |
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|
|
The fair value of the financial assets is based on their quoted bid price at the reporting date, without deduction for any estimated future selling costs. Unquoted investments would be valued by the Directors using primary valuation techniques such as earnings multiples, recent transactions and net assets. |
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|
|
Changes in the value of investments held at fair value through profit or loss and gains and losses on disposal are recognised in the Statement of Comprehensive Income as "Gains on financial assets at fair value through profit or loss". Also included within this caption are transaction costs in relation to the purchase or sale of investments, including the difference between the purchase price of an investment and its bid price at the date of purchase. |
|
|
|
|
|
|
(f) |
Cash and cash equivalents |
|
|
|
Cash comprises cash in hand and at banks. Cash equivalents are short-term highly liquid investments that are readily convertible to known amounts of cash and that are subject to an insignificant risk of changes in values. |
|
|
|
|
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|
|
For the purposes of the Cash Flow Statement, cash and cash equivalents comprise cash at bank net of outstanding bank overdrafts. |
|
|
|
|
|
|
(g) |
Other receivables and payables |
|
|
|
Other receivables do not carry any interest and are short-term in nature and are accordingly stated at their recoverable amount. Other payables are non interest bearing and are stated at their payable amount. |
|
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|
|
|
|
(h) |
Dividends payable |
|
|
|
Dividends are recognised in the financial statements in the period in which they are paid. |
|
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|
|
(i) |
Nature and purpose of reserves |
|
|
|
Warrant reserve |
|
|
|
The Warrant reserve was created on the issue of 22,000,000 Warrants at the launch of the Company. Each Warrant issued entitles the holder to subscribe in cash for one Ordinary share on the terms contained in note 13. The reserve reflects the issue price of unexercised Warrants. |
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|
|
|
|
|
|
Capital redemption reserve |
|
|
|
The capital redemption reserve arose when Ordinary shares were redeemed, at which point an amount equal to the par value of the Ordinary share capital was transferred from the Statement of Comprehensive Income to the capital redemption reserve. Following a law amendment in 2008, the Company is no longer required to transfer the par value of the Ordinary share capital. Although the transfer from the Statement of Comprehensive Income is no longer required, the amount remaining in the capital redemption reserve is not distributable in accordance with the undertaking provided by the Board in the launch Prospectus. |
|
|
|
|
|
|
|
Capital reserve (see note 14 to the financial statements) |
|
|
|
This reserve reflects any gains or losses on investments realised in the period along with any increases and decreases in the fair value of investments held that have been recognised in the Statement of Comprehensive Income. |
|
|
|
|
|
|
|
Revenue reserve |
|
|
|
This reserve reflects all income and costs which are recognised in the revenue column of the Statement of Comprehensive Income. The revenue reserve represents the amount of the Company's reserves distributable by way of dividend. |
|
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|
|
|
|
(j) |
Foreign currency |
|
|
|
Monetary assets and liabilities denominated in foreign currencies are converted into sterling at the rate of exchange ruling at the reporting date. The financial statements are presented in sterling, which is the Company's functional and presentation currency. The Company's performance is evaluated and its liquidity is managed in sterling. Therefore sterling is considered as the currency that most faithfully represents the economic effects of the underlying transactions, events and conditions. Transactions during the year involving foreign currencies are converted at the rate of exchange ruling at the transaction date. Gains or losses arising from a change in exchange rates subsequent to the date of a transaction is included as an exchange gain or loss in revenue or capital in the Statement of Comprehensive Income, depending on whether the gain or loss is of a revenue or capital nature. |
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|
|
|
|
|
(k) |
Borrowings |
|
|
|
Monies borrowed to finance the investment objectives of the Company are stated at the amount of the net proceeds immediately after the issue plus cumulative finance costs less cumulative payments made in respect of the debt. The finance cost of such borrowings is allocated to years over the term of the debt at a constant rate on the carrying amount and, as per the Prospectus, are charged 40% to revenue and 60% to capital reserves to reflect the Company's investment policy and prospective income and capital growth. |
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|
|
Borrowings are held at amortised cost using the effective interest rate method. |
|
|
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|
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(l) |
Share capital |
|
|
|
The Company's ordinary shares are classified as equity as the Company has full discretion on repurchasing the shares and on dividend distributions. |
|
|
|
|
|
|
|
Issuance, acquisition and resale of Ordinary shares are accounted for as equity transactions. Upon issuance of shares, the consideration received is included in equity. |
|
|
|
|
|
|
|
Transaction costs incurred by the Company in acquiring or selling its own equity instruments are accounted for as a deduction from equity to the extent that they are incremental costs directly attributable to the equity transaction that otherwise would have been avoided. |
|
|
|
|
|
|
|
Own equity instruments which are acquired (treasury shares) are deducted from equity and accounted for at amounts equal to the consideration paid, including any directly attributable incremental costs. |
|
|
|
|
|
|
|
No gain or loss is recognised in the Statement of Comprehensive Income on the purchase, sale issuance or cancellation of the Company's own instruments. |
|
3. |
Segment information |
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|
|
For management purposes, the Company is organised into one main operating segment, which invests in equity securities and debt instruments. All of the Company's activities are interrelated, and each activity is dependent on the others. Accordingly, all significant operating decisions are based upon analysis of the Company as one segment. The financial results from this segment are equivalent to the financial statements of the Company as a whole. |
||
|
|
|
||
|
|
The following table analyses the Company's operating income per geographical location. The basis for attributing the operating income is the place of incorporation of the instrument's counterparty. |
||
|
|
|
|
|
|
|
|
Year ended |
Year ended |
|
|
|
31 December 2011 |
31 December 2010 |
|
|
|
£'000 |
£'000 |
|
|
Asia Pacific region |
11,492 |
10,189 |
|
|
United Kingdom |
386 |
96 |
|
|
|
_________ |
_________ |
|
|
|
11,878 |
10,285 |
|
|
|
_________ |
_________ |
|
|
|
Year ended |
Year ended |
|
|
|
31 December 2011 |
31 December 2010 |
|
4. |
Income |
£'000 |
£'000 |
|
|
Income from investments |
|
|
|
|
Overseas dividends |
10,352 |
9,192 |
|
|
Franked income |
385 |
88 |
|
|
Stock dividends |
150 |
- |
|
|
|
_________ |
_________ |
|
|
|
10,887 |
9,280 |
|
|
|
_________ |
_________ |
|
|
|
|
|
|
|
|
Year ended |
Year ended |
|
|
|
31 December 2011 |
31 December 2010 |
|
|
|
£'000 |
£'000 |
|
|
Interest income |
|
|
|
|
Bond interest |
990 |
996 |
|
|
Deposit interest |
1 |
9 |
|
|
|
_________ |
_________ |
|
|
|
991 |
1,005 |
|
|
|
_________ |
_________ |
|
|
Total income |
11,878 |
10,285 |
|
|
|
_________ |
_________ |
|
|
|
Year ended |
Year ended |
||||
|
|
|
31 December 2011 |
31 December 2010 |
||||
|
|
|
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
|
5. |
Investment management fee |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
Investment management fee |
859 |
1,288 |
2,147 |
677 |
1,016 |
1,693 |
|
|
|
________ |
_________ |
________ |
________ |
________ |
________ |
|
|
|
|
|
|
|
|
|
|
|
The Company has an agreement with Aberdeen Private Wealth Management (APWM) for the provision of management services. This agreement has been sub-delegated to Aberdeen Asset Management Asia Limited (AAM Asia). |
||||||
|
|
|
||||||
|
|
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. The balance due to APWM at the year end was £192,000 (2010 - £328,000). The investment management fees are charged 40% to revenue and 60% to capital. |
||||||
|
|
|
Year ended |
Year ended |
||||
|
|
|
31 December 2011 |
31 December 2010 |
||||
|
|
|
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
|
6. |
Other operating expenses |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
Directors' fees |
139 |
- |
139 |
115 |
- |
115 |
|
|
Marketing contribution |
154 |
- |
154 |
122 |
- |
122 |
|
|
Auditors' remuneration: |
|
|
|
|
|
|
|
|
statutory audit |
22 |
- |
22 |
22 |
- |
22 |
|
|
interim accounts review |
5 |
- |
5 |
5 |
- |
5 |
|
|
Custodian charges |
86 |
- |
86 |
113 |
- |
113 |
|
|
Secretarial and administration fee |
118 |
- |
118 |
112 |
- |
112 |
|
|
Other |
317 |
4 |
321 |
259 |
39 |
298 |
|
|
|
________ |
________ |
_______ |
_______ |
_______ |
_______ |
|
|
|
841 |
4 |
845 |
748 |
39 |
787 |
|
|
|
________ |
________ |
_______ |
_______ |
_______ |
_______ |
|
|
|
||||||
|
|
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 are based on an annual rate of £161,000 (2010 - £133,000). There was no sum due to AAM at the year end (2010 - £nil). |
||||||
|
|
|
||||||
|
|
In addition, Aberdeen Private Wealth Management Limited (APWM) is entitled to an annual company secretarial and administration fee of £118,000 (2010 - £112,000), which increases annually in line with any increases in RPI. A balance of £30,000 (2010 - £28,000) was payable to APWM at the year end. |
||||||
|
|
|
Year ended |
Year ended |
||||
|
|
|
31 December 2011 |
31 December 2010 |
||||
|
|
|
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
|
7. |
Finance costs |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
On bank loans and overdrafts |
75 |
112 |
187 |
94 |
142 |
236 |
|
|
|
________ |
________ |
_______ |
_______ |
_______ |
_______ |
|
|
|
||||||
|
|
Finance costs are charged 40% to revenue and 60% to capital as disclosed in the accounting policies. |
||||||
|
|
|
Year ended |
Year ended |
|
|
|
31 December 2011 |
31 December 2010 |
|
8. |
Dividends on equity shares |
£'000 |
£'000 |
|
|
Amounts recognised as distributions to equity holders in the year: |
|
|
|
|
Second interim dividend for 2009 - 3.0p per share |
- |
3,294 |
|
|
Fourth interim dividend for 2010 - 2.25p per share (2009 - n/a) |
2,656 |
- |
|
|
First interim dividend for 2011 - 1.5p per share (2010 - 1.25p) |
1,782 |
1,387 |
|
|
Second interim dividend for 2011 - 1.5p per share (2010 - 1.25p) |
2,010 |
1,403 |
|
|
Third interim dividend for 2011 - 1.5p per share (2010 - 1.25p) |
2,069 |
1,456 |
|
|
|
_________ |
_________ |
|
|
|
8,517 |
7,540 |
|
|
|
_________ |
_________ |
|
|
|
|
|
|
|
The fourth interim dividend for 2011, amounting to £3,138,000 (2010 - fourth interim dividend of £2,656,000), has not been included as a liability in these financial statements as it was announced and paid after 31 December 2011. |
||
|
|
|
||
|
|
The table below sets out the total dividends paid in respect of the financial year. The revenue available for distribution by way of dividend for the year is £9,644,000 (2010 - £8,257,000). |
||
|
|
|
|
|
|
|
|
2011 |
2010 |
|
|
|
£'000 |
£'000 |
|
|
First interim dividend for 2011 - 1.5p per share (2010 - 1.25p) |
1,782 |
1,387 |
|
|
Second interim dividend for 2011 - 1.5p per share (2010 - 1.25p) |
2,010 |
1,403 |
|
|
Third interim dividend for 2011 - 1.5p per share (2010 - 1.25p) |
2,069 |
1,456 |
|
|
Fourth interim dividend for 2011 - 2.25p per share (2010 - 2.25p) |
3,138 |
2,656 |
|
|
|
_________ |
_________ |
|
|
|
8,999 |
6,902 |
|
|
|
_________ |
_________ |
|
9. |
Earnings per share |
||||||
|
|
Basic |
||||||
|
|
The earnings per Ordinary share is based on the net profit after taxation of £4,353,000 (2010 - profit of £49,150,000) and on 129,577,283 (2010 - 112,948,965) Ordinary shares, being the weighted average number of Ordinary shares in issue during the year. |
||||||
|
|
|
||||||
|
|
The earnings per Ordinary share detailed above can be further analysed between revenue and capital as follows: |
||||||
|
|
|
|
|||||
|
|
|
Year ended |
Year ended |
||||
|
|
|
31 December 2011 |
31 December 2010 |
||||
|
|
|
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
|
|
Net profit (£'000) |
9,644 |
(5,291) |
4,353 |
8,257 |
40,893 |
49,150 |
|
|
Weighted average number of Ordinary shares in issue |
|
|
129,577,283 |
|
|
112,948,965 |
|
|
|
|
|
__________ |
|
|
__________ |
|
|
Return per Ordinary share (pence) |
7.44 |
(4.08) |
3.36 |
7.31 |
36.21 |
43.52 |
|
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
|
|
|
|
|
|
Net profit (£'000) |
9,644 |
(5,291) |
4,353 |
8,257 |
40,893 |
49,150 |
|
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
|
|
Weighted average number of Ordinary shares in issue if Warrants converted |
|
|
132,885,550 |
|
|
117,382,806 |
|
|
|
|
|
__________ |
|
|
__________ |
|
|
Return per Ordinary share (pence) |
7.26 |
(3.98) |
3.28 |
7.03 |
34.84 |
41.87 |
|
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
|
|
|
|
|
|
|
|
|
|
|
The calculation of the diluted earnings per Ordinary shares is based on the average traded share price over the period. The calculations indicate that the exercise of Warrants would result in an increase in the weighted average number of Ordinary shares of 3,308,267 to 132,885,550 Ordinary shares (2010 - increase in the weighted average number of Ordinary shares of 4,433,841 to 117,382,806 Ordinary shares). |
||||||
|
|
|
Year ended |
Year ended |
|
|
|
31 December 2011 |
31 December 2010 |
|
10. |
Investments designated at fair value through profit or loss |
£'000 |
£'000 |
|
|
Opening valuation |
216,933 |
160,413 |
|
|
Movements in the year: |
|
|
|
|
Purchases at cost |
48,529 |
35,366 |
|
|
Sales - proceeds |
(24,962) |
(21,455) |
|
|
Sales - realised gains |
11,679 |
9,922 |
|
|
(Decrease)/increase in investment holdings fair value |
(15,570) |
32,687 |
|
|
|
______________ |
______________ |
|
|
Closing valuation at 31 December 2011 |
236,609 |
216,933 |
|
|
|
______________ |
______________ |
|
|
|
|
|
|
|
|
Year ended |
Year ended |
|
|
|
31 December 2011 |
31 December 2010 |
|
|
|
£'000 |
£'000 |
|
|
Closing book cost |
180,150 |
144,904 |
|
|
Closing investment holdings fair value gains |
56,459 |
72,029 |
|
|
|
______________ |
______________ |
|
|
|
236,609 |
216,933 |
|
|
|
______________ |
______________ |
|
|
|
|
|
|
|
|
Year ended |
Year ended |
|
|
|
31 December 2011 |
31 December 2010 |
|
|
The portfolio valuation |
£'000 |
£'000 |
|
|
Listed on stock exchanges at market valuation: |
|
|
|
|
Overseas: |
|
|
|
|
equities |
224,206 |
205,209 |
|
|
bonds |
12,403 |
11,724 |
|
|
|
______________ |
______________ |
|
|
Total |
236,609 |
216,933 |
|
|
|
______________ |
______________ |
|
|
|
|
|
|
|
(Losses)/gains on held-at-fair-value investments |
£'000 |
£'000 |
|
|
Realised gains on sales of investments |
11,679 |
9,922 |
|
|
(Decrease)/increase in investment holdings fair value |
(15,570) |
32,687 |
|
|
|
______________ |
______________ |
|
|
|
(3,891) |
42,609 |
|
|
|
______________ |
______________ |
|
|
|
|
|
|
|
All investments are categorised as held at fair value through profit or loss. |
||
|
|
|
||
|
|
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 (losses)/gains on financial assets at fair value through profit or loss in the Statement of Comprehensive Income. The total costs were as follows: |
||
|
|
|
Year ended |
Year ended |
|
|
|
31 December 2011 |
31 December 2010 |
|
|
|
£'000 |
£'000 |
|
|
Purchases |
118 |
108 |
|
|
Sales |
89 |
39 |
|
|
|
______________ |
______________ |
|
|
|
207 |
147 |
|
|
|
______________ |
______________ |
|
|
|
2011 |
2010 |
|
11. |
Debtors: amounts falling due within one year |
£'000 |
£'000 |
|
|
Prepayments and accrued income |
738 |
1,191 |
|
|
Other receivables |
- |
7 |
|
|
|
______________ |
______________ |
|
|
|
738 |
1,198 |
|
|
|
______________ |
______________ |
|
|
|
|
|
|
|
None of the above assets are past their due date or impaired. |
||
|
|
|
2011 |
2010 |
|
|
12. |
Creditors: amounts falling due within one year |
£'000 |
£'000 |
|
|
|
(a) |
Bank loans |
11,000 |
10,913 |
|
|
|
|
______________ |
______________ |
|
|
|
|
|
|
|
|
|
At the year end, the Company's secured bank loans of HK$81,842,000 (2010 - HK$81,842,000) and US$6,558,000 (2010 - US$6,558,000) equivalent to £6,780,000 (2010 - £6,724,000) and £4,220,000 (2010 - £4,189,000) respectively were drawn down from the £15,000,000 facility with Scotiabank Europe PLC at fixed interest rates of 1.532% (2010 - 1.501%) and 1.691% (2010 - 1.546%) respectively. |
||
|
|
|
|
||
|
|
|
On 20 March 2012 both bank loans were rolled over. At the signing of this report HK$81,842,000 and US$6,558,000 remained drawn down from the £15,000,000 facility with Scotiabank Europe PLC at fixed interest rates of 1.6618% and 1.59355% respectively. Both are repayable on 20 April 2012. |
||
|
|
|
|
||
|
|
|
The bank loans outstanding at 31 December 2011 are valued at the middle rates of exchange at the year end, resulting in cumulative foreign exchange loss of £98,000 (2010 - loss of £16,000) against the original book cost of these loans. |
||
|
|
|
|
||
|
|
|
|
2011 |
2010 |
|
|
(b) |
Other payables |
£'000 |
£'000 |
|
|
|
Other payables |
331 |
444 |
|
|
|
|
______________ |
______________ |
|
|
|
2011 |
2010 |
||
|
13. |
Stated capital |
Number |
£'000 |
Number |
£'000 |
|
|
Authorised |
|
|
|
|
|
|
Ordinary shares of no par value |
Unlimited |
Unlimited |
Unlimited |
Unlimited |
|
|
|
|
|
|
|
|
|
Issued and fully paid |
|
|
|
|
|
|
Balance brought forward |
118,035,062 |
118,035 |
109,790,000 |
109,790 |
|
|
Shares issued in the year |
6,250,000 |
6,250 |
7,199,001 |
7,199 |
|
|
Warrants exercised |
14,798,809 |
14,799 |
1,046,061 |
1,046 |
|
|
|
__________ |
__________ |
__________ |
__________ |
|
|
At 31 December 2011 |
139,083,871 |
139,084 |
118,035,062 |
118,035 |
|
|
|
__________ |
__________ |
__________ |
__________ |
|
|
|
|
|
|
|
|
|
During the year 6,250,000 (2010 - 7,199,001) Ordinary shares were issued by the Company at a total consideration received, including transaction costs, of £10,197,000 (2010 - receipt of £10,891,000). |
||||
|
|
|
||||
|
|
The Ordinary shares give shareholders the entitlement to all of the capital growth in the Company's assets and to all the income from the Company that is resolved to be distributed. |
||||
|
|
|
||||
|
|
During the year 14,798,809 Warrants were exercised into Ordinary shares (2010 - 1,046,061) at a total consideration received of £17,759,000 (2010 - £1,255,000). At 31 December 2011 there were 6,155,130 (2010 - 20,953,939) Warrants in issue. The warrantholders are entitled to subscribe in cash for one Ordinary share at 120p on the subscription date, which is the twentieth business day after the dispatch to Ordinary shareholders of the Company's Annual Report and Accounts or Half-Yearly report for each year, commencing with the twentieth business day after the dispatch to Ordinary shareholders of the Company's Annual Report and Accounts for the year ending 31 December 2011 and ending on the twentieth business day after the dispatch to Ordinary shareholders of the Company's Annual Report and Accounts for the year ending 31 December 2012. |
||||
|
|
|
||||
|
|
Following the share issues and warrant exercise 139,083,871 (2010 - 118,035,062) Ordinary shares remain in issue. Further details of the share issues are contained in the Annual Report. |
||||
|
|
|
||||
|
|
Voting rights |
||||
|
|
In accordance with the Articles of Association of the Company, on a show of hands, every member (or duly appointed proxy) present at a general meeting of the Company has one vote; and, on a poll, every member present in person or by proxy shall have one vote for each Ordinary share held. In ordinary circumstances warrantholders do not have the right to attend or vote at General Meetings of the Company. |
||||
|
|
|
||||
|
|
Each of the Company's Warrants confers the right to subscribe in cash for one Ordinary share at a price of 120p on the twentieth business day after despatch of the Company's Annual or Half-Yearly Reports each year ending on the twentieth business day after despatch of the Annual Report for the year ending 31 December 2012. |
||||
|
|
|
2011 |
2010 |
|
14. |
Retained earnings |
£'000 |
£'000 |
|
|
Capital reserve |
|
|
|
|
At 1 January 2011 |
79,427 |
34,528 |
|
|
Loans - movement in unrealised currency gain |
(83) |
208 |
|
|
Currency gain/(loss) |
35 |
(740) |
|
|
Movement in unrealised fair value |
(15,570) |
32,687 |
|
|
Gain on realisation of investments |
11,679 |
9,922 |
|
|
Capital dividend |
52 |
13 |
|
|
Costs charged to capital |
(1,404) |
(1,197) |
|
|
Issue of own shares |
3,947 |
3,692 |
|
|
Warrant exercise |
4,440 |
314 |
|
|
|
_________ |
_________ |
|
|
At 31 December 2011 |
82,523 |
79,427 |
|
|
|
_________ |
_________ |
|
|
Revenue reserve |
|
|
|
|
At 1 January 2011 |
7,037 |
6,320 |
|
|
Revenue |
9,644 |
8,257 |
|
|
Dividends paid |
(8,517) |
(7,540) |
|
|
|
_________ |
_________ |
|
|
At 31 December 2011 |
8,164 |
7,037 |
|
|
|
_________ |
_________ |
|
15. |
Net asset value per share |
||||
|
|
The basic net asset value per Ordinary 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: |
||||
|
|
|
||||
|
|
|
Net asset value |
Net asset values |
Net asset value |
Net asset values |
|
|
|
per share |
attributable |
per share |
attributable |
|
|
|
2011 |
2011 |
2010 |
2010 |
|
|
Basic |
p |
£'000 |
p |
£'000 |
|
|
Ordinary shares |
166.77 |
231,946 |
176.35 |
208,154 |
|
|
|
_________ |
_________ |
_________ |
_________ |
|
|
|
|
|
|
|
|
|
The basic net asset value per Ordinary share is based on 139,083,871 (2010 - 118,035,062) Ordinary shares, being the number of Ordinary shares in issue at the year end. |
||||
|
|
|
|
|
|
|
|
|
|
Net asset value |
Net asset values |
Net asset value |
Net asset values |
|
|
|
per share |
attributable |
per share |
attributable |
|
|
|
2011 |
2011 |
2010 |
2010 |
|
|
Diluted |
p |
£'000 |
p |
£'000 |
|
|
Ordinary shares |
164.78 |
239,332 |
167.85 |
233,299 |
|
|
|
_________ |
_________ |
_________ |
_________ |
|
|
|
|
|
|
|
|
|
The calculation of the diluted net asset value per Ordinary share is based on the total number of Ordinary shares in issue at the year end and on the assumption that those Warrants which are not exercised at the year end, amounting to 6,155,130 Warrants as at 31 December 2011 (31 December 2010 - 20,953,939) were exercised on the first day of the financial year at 120p per share, giving a total of 145,239,001 Ordinary shares (2010 - 138,989,001). |
||||
|
16. |
Financial instruments |
|||||||||
|
|
The Company's financial instruments comprise securities, other investments, cash balances and bank overdrafts. |
|||||||||
|
|
|
|||||||||
|
|
The main risks arising from the Company's financial instruments are (i) market risk (comprising interest rate risk, currency risk and equity price risk), (ii) liquidity risk, (iii) credit risk and (iv) gearing risk. |
|||||||||
|
|
|
|||||||||
|
|
The Board regularly reviews and agrees policies for managing each of these risks. The Manager's policies for managing each of these risks are summarised below and have been applied throughout the year. The numerical disclosures exclude short-term debtors and creditors. |
|||||||||
|
|
|
|||||||||
|
|
(i) Market risk |
|||||||||
|
|
The fair value or future cash flows of a financial instrument held by the Company may fluctuate because of changes in market prices. This market risk comprises three elements - interest rate risk, currency risk and equity price risk. |
|||||||||
|
|
|
|||||||||
|
|
Interest rate risk |
|||||||||
|
|
Interest rate movements may affect: |
|||||||||
|
|
- the fair value of the investments in fixed interest rate securities; |
|||||||||
|
|
- the level of income receivable on cash deposits; |
|||||||||
|
|
- interest payable on the Company's variable rate borrowings. |
|||||||||
|
|
|
|||||||||
|
|
Financial assets |
|||||||||
|
|
Although the majority of the Company's financial assets comprise equity shares which neither pay interest nor have a stated maturity date, at the year end the Company had a holding in a fixed rate Indonesian Government Bond, in the form of a Currency Loan Note issued by Deutsche Bank, valued at £12,403,000 (2010 - £11,724,000). Bond prices are determined by market perception as to the appropriate level of yields given the economic background. Key determinants include economic growth prospects, inflation, the Government's fiscal position, short-term interest rates and international market comparisons. The Investment Manager takes all these factors into account when making any investment decisions as well as considering the financial standing of the potential investee entity. |
|||||||||
|
|
|
|||||||||
|
|
Returns from bonds are fixed at the time of purchase, as the fixed coupon payments are known, as are the final redemption proceeds. This means that if a bond is held until its redemption date, the total return achieved is unaltered from its purchase date. However, over the life of a bond the market price at any given time will depend on the market environment at that time. Therefore, a bond sold before its redemption date is likely to have a different price to its purchase level and a profit or loss may be incurred. |
|||||||||
|
|
|
|||||||||
|
|
Financial liabilities |
|||||||||
|
|
The Company primarily finances its operations through use of equity, retained profits and bank borrowings. On 20 March 2012 the credit facility for £15 million was extended until 20 March 2014 and details of the terms and conditions of the loan are disclosed in note 12. At the year end the Company drawdowns from the facility amounted to HK$81,842,000 (2010 - HK$81,842,000), (equivalent to £6,780,000 at 31 December 2011; 2010 - £6,724,000) at an all-in rate of 1.532% (2010 - 1.501%) per annum and US$6,558,000 (2010 - US$6,558,000), (equivalent to £4,220,000 at 31 December 2011; 2010 - £4,189,000) at an all-in rate of 1.691% (2010 - 1.546%) per annum. Both tranches are secured. Interest is due on both tranches at the maturity date, being 20 March 2012 respectively. The loans are included in creditors falling due within one year. |
|||||||||
|
|
|
|||||||||
|
|
The Board actively monitors its bank borrowings. A decision on whether to roll over its existing borrowings will be made prior to their maturity dates, taking into account the Company's policy of not having any fixed, long-term borrowings. |
|||||||||
|
|
|
|||||||||
|
|
The interest rate profile of the Company (excluding short term debtors and creditors as stated previously) was as follows: |
|||||||||
|
|
|
|||||||||
|
|
|
Weighted average |
|
|
|
|
||||
|
|
|
period for which |
Weighted average |
Floating |
Fixed |
Non-interest |
||||
|
|
|
rate is fixed |
interest rate |
rate |
rate |
bearing |
||||
|
|
At 31 December 2011 |
Years |
% |
£'000 |
£'000 |
£'000 |
||||
|
|
Assets |
|
|
|
|
|
||||
|
|
Indonesian Government Bond |
5.56 |
10.00 |
- |
12,403 |
- |
||||
|
|
Equities |
- |
- |
- |
- |
224,206 |
||||
|
|
Cash at bank - Sterling |
- |
- |
4,012 |
- |
- |
||||
|
|
Cash at bank - Taiwan Dollar |
- |
- |
1,918 |
- |
- |
||||
|
|
|
________ |
________ |
________ |
________ |
________ |
||||
|
|
|
- |
- |
5,930 |
12,403 |
224,206 |
||||
|
|
|
________ |
________ |
________ |
________ |
________ |
||||
|
|
|
|
|
|
|
|
||||
|
|
|
Weighted average |
|
|
|
|
||||
|
|
|
period for which |
Weighted average |
Floating |
Fixed |
Non-interest |
||||
|
|
|
rate is fixed |
interest rate |
rate |
rate |
bearing |
||||
|
|
|
Years |
% |
£'000 |
£'000 |
£'000 |
||||
|
|
Liabilities |
|
|
|
|
|
||||
|
|
Bank loan - Hong Kong Dollars |
0.22 |
1.53 |
- |
(6,780) |
- |
||||
|
|
Bank loan - US Dollars |
0.22 |
1.69 |
- |
(4,220) |
- |
||||
|
|
|
________ |
________ |
________ |
________ |
________ |
||||
|
|
|
- |
- |
- |
(11,000) |
- |
||||
|
|
|
________ |
________ |
________ |
________ |
________ |
||||
|
|
|
|
|
|
|
|
||||
|
|
|
Weighted average |
|
|
|
|
||||
|
|
|
period for which |
Weighted average |
Floating |
Fixed |
Non-interest |
||||
|
|
|
rate is fixed |
interest rate |
rate |
rate |
bearing |
||||
|
|
At 31 December 2010 |
Years |
% |
£'000 |
£'000 |
£'000 |
||||
|
|
Assets |
|
|
|
|
|
||||
|
|
Indonesian Government Bond |
6.56 |
10.00 |
- |
11,724 |
- |
||||
|
|
Equities |
- |
- |
- |
- |
205,209 |
||||
|
|
Cash at bank - Sterling |
- |
- |
1,292 |
- |
- |
||||
|
|
Cash at bank - Philippine Peso |
- |
- |
33 |
- |
- |
||||
|
|
Cash at bank - Taiwan Dollar |
- |
- |
55 |
- |
- |
||||
|
|
|
________ |
________ |
________ |
________ |
________ |
||||
|
|
|
- |
- |
1,380 |
11,724 |
205,209 |
||||
|
|
|
________ |
________ |
________ |
________ |
________ |
||||
|
|
|
|
|
|
|
|
||||
|
|
|
Weighted average |
|
|
|
|
||||
|
|
|
period for which |
Weighted average |
Floating |
Fixed |
Non-interest |
||||
|
|
|
rate is fixed |
interest rate |
rate |
rate |
bearing |
||||
|
|
|
Years |
% |
£'000 |
£'000 |
£'000 |
||||
|
|
Liabilities |
|
|
|
|
|
||||
|
|
Bank loan - Hong Kong Dollars |
0.16 |
1.50 |
- |
(6,724) |
- |
||||
|
|
Bank loan - US Dollars |
0.16 |
1.55 |
- |
(4,189) |
- |
||||
|
|
|
________ |
________ |
________ |
________ |
________ |
||||
|
|
|
- |
- |
- |
(10,913) |
- |
||||
|
|
|
________ |
________ |
________ |
________ |
________ |
||||
|
|
||||||||||
|
|
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 floating rate assets consist of cash deposits on call earning interest at prevailing market rates. |
|||||||||
|
|
The non-interest bearing assets represent the equity element of the portfolio. |
|||||||||
|
|
All financial liabilities are measured at amortised cost using the effective interest rate method. |
|||||||||
|
|
|
|||||||||
|
|
Maturity profile |
|||||||||
|
|
The following table sets out the carrying amount, by maturity, of the Company's financial instruments that are exposed to interest rate risk at the Balance Sheet date: |
|||||||||
|
|
|
|||||||||
|
|
|
Within |
Within |
Within |
More than |
|
||||
|
|
|
1 year |
2-3 years |
4-5 years |
5 years |
Total |
||||
|
|
At 31 December 2011 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
||||
|
|
Fixed rate |
|
|
|
|
|
||||
|
|
Bonds |
- |
- |
- |
12,403 |
12,403 |
||||
|
|
Bank loans |
(11,000) |
- |
- |
- |
(11,000) |
||||
|
|
|
________ |
________ |
________ |
________ |
________ |
||||
|
|
|
(11,000) |
- |
- |
12,403 |
1,403 |
||||
|
|
|
________ |
________ |
________ |
________ |
________ |
||||
|
|
Floating rate |
|
|
|
|
|
||||
|
|
Cash |
5,930 |
- |
- |
- |
5,930 |
||||
|
|
|
________ |
________ |
________ |
________ |
________ |
||||
|
|
|
|
|
|
|
|
||||
|
|
|
Within |
Within |
Within |
More than |
|
||||
|
|
|
1 year |
2-3 years |
4-5 years |
5 years |
Total |
||||
|
|
At 31 December 2010 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
||||
|
|
Fixed rate |
|
|
|
|
|
||||
|
|
Bonds |
- |
- |
- |
11,724 |
11,724 |
||||
|
|
Bank loans |
(10,913) |
- |
- |
- |
(10,913) |
||||
|
|
|
________ |
________ |
________ |
________ |
________ |
||||
|
|
|
(10,913) |
- |
- |
11,724 |
811 |
||||
|
|
|
________ |
________ |
________ |
________ |
________ |
||||
|
|
Floating rate |
|
|
|
|
|
||||
|
|
Cash |
1,380 |
- |
- |
- |
1,380 |
||||
|
|
|
________ |
________ |
________ |
________ |
________ |
||||
|
|
|
|||||||||
|
|
Interest rate sensitivity |
|||||||||
|
|
The sensitivity analyses demonstrates the sensitivity of the Company's profit/(loss) for the year to a reasonably possible change in interest rates, with all other variables held constant. |
|||||||||
|
|
|
|||||||||
|
|
The sensitivity of the profit/(loss) for the year is the effect of the assumed change in interest rates on: |
|||||||||
|
|
the net interest income for one year, based on the floating rate financial assets held at the Balance Sheet date; and |
|||||||||
|
|
changes in fair value of investments for the year, based on revaluing fixed rate financial assets at the Balance Sheet date. |
|||||||||
|
|
|
|||||||||
|
|
If interest rates had been 100 basis points higher or lower and all other variables were held constant, the Company's: |
|||||||||
|
|
- profit for the year ended 31 December 2011 would decrease / increase by £73,000 (2010 - decrease / increase by £22,000). This is attributable to the Company's exposure to interest rates on its floating rate cash balances, fixed interest securities and bank loans. |
|||||||||
|
|
The Company holds no financial instruments that will have an equity reserve impact. |
|||||||||
|
|
|
|||||||||
|
|
In the opinion of the Directors, the above sensitivity analyses are not representative of the year as a whole, since the level of exposure changes frequently as part of the interest rate risk management process used to meet the Company's objectives. |
|||||||||
|
|
Foreign currency risk |
|||||||||||
|
|
A significant proportion of the Company's investment portfolio is invested in overseas securities and the Balance Sheet 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. All of the Company's borrowings, as detailed in note 12, are in foreign currency as at 31 December 2011. |
|||||||||||
|
|
|
|||||||||||
|
|
The revenue account is subject to currency fluctuation arising on overseas income. The Company does not hedge this currency risk. |
|||||||||||
|
|
|
|||||||||||
|
|
The fair values of the Company's monetary items that have foreign currency exposure at 31 December are shown below. Where the Company's equity investments (which are non monetary items) are priced in a foreign currency, they have been included within the equity price risk sensitivity analysis so as to show the overall level of exposure. |
|||||||||||
|
|
|
|||||||||||
|
|
|
31 December 2011 |
31 December 2010 |
|||||||||
|
|
|
|
Net |
Total |
|
Net |
Total |
|||||
|
|
|
Equity |
Monetary |
currency |
Equity |
Monetary |
currency |
|||||
|
|
|
investments |
assets |
exposure |
investments |
assets |
exposure |
|||||
|
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|||||
|
|
Australian Dollar |
45,659 |
- |
45,659 |
37,458 |
- |
37,458 |
|||||
|
|
Hong Kong Dollar |
35,675 |
(6,781) |
28,894 |
22,179 |
(6,724) |
15,455 |
|||||
|
|
Indonesian Rupiah |
- |
- |
- |
2,473 |
- |
2,473 |
|||||
|
|
Japanese Yen |
5,637 |
- |
5,637 |
3,775 |
- |
3,775 |
|||||
|
|
Malaysian Ringgit |
34,447 |
- |
34,447 |
36,719 |
- |
36,719 |
|||||
|
|
Philippine Peso |
- |
- |
- |
4,258 |
33 |
4,291 |
|||||
|
|
Singapore Dollar |
49,566 |
- |
49,566 |
47,484 |
- |
47,484 |
|||||
|
|
Taiwanese Dollar |
21,661 |
1,918 |
23,579 |
21,415 |
54 |
21,469 |
|||||
|
|
Thailand Baht |
24,500 |
- |
24,500 |
21,794 |
- |
21,794 |
|||||
|
|
US Dollar |
- |
8,184 |
8,184 |
- |
7,536 |
7,536 |
|||||
|
|
|
______ |
______ |
______ |
______ |
______ |
______ |
|||||
|
|
Total |
217,145 |
3,321 |
220,466 |
197,555 |
899 |
198,454 |
|||||
|
|
|
______ |
______ |
______ |
______ |
______ |
______ |
|||||
|
|
|
|
|
|
|
|
|
|||||
|
|
The above year end amounts are not representative of the exposure to risk during the year, because the levels of monetary foreign currency exposure change significantly throughout the year. |
|||||||||||
|
|
|
|||||||||||
|
|
Foreign currency sensitivity |
|||||||||||
|
|
The following table details the Company's sensitivity to a 10% increase and decrease in sterling against the major foreign currencies in which the Company has exposure on its monetary items. Monetary items includes the bond holding which is measured at fair value through profit and loss. 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. |
|||||||||||
|
|
|
|||||||||||
|
|
If sterling had weakened against the currencies shown, this would have had the following effect: |
|||||||||||
|
|
|
|
||||||||||
|
|
|
Statement of Comprehensive Income - |
||||||||||
|
|
|
profit after taxation |
||||||||||
|
|
|
Revenue |
Capital |
|
Revenue |
Capital |
|
|||||
|
|
|
return |
return |
Total |
return |
return |
Total |
|||||
|
|
|
2011 |
2011 |
2011 |
2010 |
2010 |
2010 |
|||||
|
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|||||
|
|
Australian Dollar |
316 |
- |
316 |
223 |
- |
223 |
|||||
|
|
Hong Kong Dollar |
129 |
(753) |
(624) |
81 |
(747) |
(666) |
|||||
|
|
Indonesian Rupiah |
- |
- |
- |
13 |
- |
13 |
|||||
|
|
Japanese Yen |
19 |
- |
19 |
- |
- |
- |
|||||
|
|
Malaysian Ringgit |
188 |
- |
188 |
169 |
- |
169 |
|||||
|
|
New Zealand Dollar |
29 |
- |
29 |
32 |
- |
32 |
|||||
|
|
Philippine Peso |
8 |
- |
8 |
16 |
- |
16 |
|||||
|
|
Singapore Dollar |
258 |
- |
258 |
195 |
- |
195 |
|||||
|
|
Sterling |
2 |
- |
2 |
3 |
- |
3 |
|||||
|
|
Taiwan Dollar |
118 |
- |
118 |
114 |
- |
114 |
|||||
|
|
Thailand Baht |
139 |
- |
139 |
181 |
- |
181 |
|||||
|
|
US Dollar |
107 |
909 |
1,016 |
107 |
837 |
944 |
|||||
|
|
|
______ |
______ |
______ |
______ |
______ |
______ |
|||||
|
|
|
1,313 |
156 |
1,469 |
1,134 |
90 |
1,224 |
|||||
|
|
|
______ |
______ |
______ |
______ |
______ |
______ |
|||||
|
|
|
|
|
|
|
|
|
|||||
|
|
Equity |
1,313 |
156 |
1,469 |
1,134 |
90 |
1,224 |
|||||
|
|
|
______ |
______ |
______ |
______ |
______ |
______ |
|||||
|
|
|
|
|
|
|
|
|
|||||
|
|
If sterling had strengthened against the currencies shown, this would have had the following effect:
|
|||||||||||
|
|
|
|||||||||||
|
|
|
Statement of Comprehensive Income - |
||||||||||
|
|
|
profit after taxation |
||||||||||
|
|
|
Revenue |
Capital |
|
Revenue |
Capital |
|
|||||
|
|
|
return |
return |
Total |
return |
return |
Total |
|||||
|
|
|
2011 |
2011 |
2011 |
2010 |
2010 |
2010 |
|||||
|
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|||||
|
|
Australian Dollar |
(258) |
- |
(258) |
(182) |
- |
(182) |
|||||
|
|
Hong Kong Dollar |
(106) |
616 |
510 |
(66) |
611 |
545 |
|||||
|
|
Indonesian Rupiah |
- |
- |
- |
(10) |
- |
(10) |
|||||
|
|
Japanese Yen |
(16) |
- |
(16) |
- |
- |
- |
|||||
|
|
Malaysian Ringgit |
(154) |
- |
(154) |
(139) |
- |
(139) |
|||||
|
|
New Zealand Dollar |
(24) |
- |
(24) |
(26) |
- |
(26) |
|||||
|
|
Philippine Peso |
(6) |
- |
(6) |
(13) |
- |
(13) |
|||||
|
|
Singapore Dollar |
(212) |
- |
(212) |
(160) |
- |
(160) |
|||||
|
|
Sterling |
(1) |
- |
(1) |
(3) |
- |
(3) |
|||||
|
|
Taiwan Dollar |
(97) |
- |
(97) |
(93) |
- |
(93) |
|||||
|
|
Thailand Baht |
(113) |
- |
(113) |
(148) |
- |
(148) |
|||||
|
|
US Dollar |
(87) |
(744) |
(831) |
(88) |
(685) |
(773) |
|||||
|
|
|
______ |
______ |
______ |
______ |
______ |
______ |
|||||
|
|
|
(1,074) |
(128) |
(1,202) |
(928) |
(74) |
(1,002) |
|||||
|
|
|
______ |
______ |
______ |
______ |
______ |
______ |
|||||
|
|
|
|
|
|
|
|
|
|||||
|
|
Equity |
(1,074) |
(128) |
(1,202) |
(928) |
(74) |
(1,002) |
|||||
|
|
|
______ |
______ |
______ |
______ |
______ |
______ |
|||||
|
|
|
|
|
|
|
|
|
|||||
|
|
In the opinion of the Directors, the above sensitivity analyses are not representative of the year as a whole, since the level of exposure changes frequently as part of the currency risk management process used to meet the Company's objectives. |
|||||||||||
|
|
|
|||||||||||
|
|
Equity price risk |
|||||||||||
|
|
Equity price risk (ie changes in market prices other than those arising from interest rate or currency risk) may affect the value of the Company's quoted equity investments. |
|||||||||||
|
|
|
|||||||||||
|
|
Management of the equity risk |
|||||||||||
|
|
It is the Board's policy to hold an appropriate spread of investments in the portfolio in order to reduce the risk arising from factors specific to a particular country or sector. The allocation of assets to international markets and the stock selection process both 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. |
|||||||||||
|
|
|
|||||||||||
|
|
Concentration of exposure to equity price risks |
|||||||||||
|
|
A geographic analysis of the Company's investment portfolio is shown below, which shows that all of the investments' value is in the Asia Pacific region. It should be recognised that an investment's country of domicile or of listing does not necessarily equate to its exposure to the economic conditions in that country. |
|||||||||||
|
|
|
|||||||||||
|
|
Equity price risk sensitivity |
|||||||||||
|
|
The following table illustrates the sensitivity of the profit after taxation for the year and the equity to an increase or decrease of 10% in the fair values of the Company's equities. This level of change is considered to be reasonably possible based on observation of current market conditions. The sensitivity analysis is based on the Company's equities at each Balance Sheet date, with all other variables held constant. |
|||||||||||
|
|
|
|||||||||||
|
|
The equity price risk sensitivity incorporates the equity foreign exchange sensitivity analysis. |
|||||||||||
|
|
|
|||||||||||
|
|
|
2011 |
||||||||||
|
|
|
Increase in |
Decrease in |
|||||||||
|
|
|
fair value |
fair value |
|||||||||
|
|
|
£'000 |
£'000 |
|||||||||
|
|
Statement of Comprehensive Income - profit after taxation |
|
|
|||||||||
|
|
Revenue return - increase /(decrease) |
- |
- |
|||||||||
|
|
Capital return - increase /(decrease) |
22,421 |
(22,421) |
|||||||||
|
|
|
________ |
________ |
|||||||||
|
|
Total profit after taxation - increase /(decrease) |
22,421 |
(22,421) |
|||||||||
|
|
|
________ |
________ |
|||||||||
|
|
Equity |
22,421 |
(22,421) |
|||||||||
|
|
|
________ |
________ |
|||||||||
|
|
|
|
|
|||||||||
|
|
(ii) Liquidity risk |
|
|
|||||||||
|
|
This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities, which stood at £11,331,000 (2010 - £11,357,000) at the year end. |
|||||||||||
|
|
|
|||||||||||
|
|
Liquidity risk is not considered to be significant as the Company's assets comprise mainly cash and readily realisable securities, which can be sold to meet funding commitments if necessary and these amounted to £5,930,000 and £236,609,000 (2010 - £1,380,000 and £216,933,000) at the year end respectively. Short-term flexibility is achieved through the use of loan and overdraft facilities. |
|||||||||||
|
|
|
|||||||||||
|
|
(iii) Credit risk |
|||||||||||
|
|
This is failure of the counter party to a transaction to discharge its obligations under that transaction that could result in the Company suffering a loss. |
|||||||||||
|
|
|
|||||||||||
|
|
The risk is not significant, and is managed as follows: |
|||||||||||
|
|
- where the investment manager makes an investment in a bond, corporate or otherwise, the credit rating of the issuer is taken into account so as to minimise the risk to the Company of default. The Company has a holding in a CLN issued by Deutsche Bank AG. The issuer currently has a credit rating at Moody's of Aa3; |
|||||||||||
|
|
- investment transactions are carried out with a large number of brokers, whose credit rating of which is taken into account so as to minimise the risk to the Company of default; |
|||||||||||
|
|
- the risk of counterparty exposure due to failed trades causing a loss to the Company is mitigated by the review of failed trade reports on a daily basis. In addition, both stock and cash reconciliations to the custodian's records are performed on a daily weekly basis to ensure discrepancies are investigated on a timely basis. The Manager's Compliance department carries out periodic reviews of the custodian's operations and reports its finding to the Manager's Risk Management Committee. It is the Manager's policy to trade only with A- and above (Long Term rated) and A-1/P-1 (Short Term rated) counterparties. |
|||||||||||
|
|
- cash is held only with reputable banks with high quality external credit enhancements; |
|||||||||||
|
|
- none of the Company's financial assets are secured by collateral or other credit enhancements. |
|||||||||||
|
|
|
|||||||||||
|
|
Credit risk exposure |
|||||||||||
|
|
In summary, compared to the amounts included in the Balance Sheet, the maximum exposure to credit risk at 31 December was as follows: |
|||||||||||
|
|
|
|
|
|||||||||
|
|
|
2011 |
||||||||||
|
|
|
Balance |
Maximum |
|||||||||
|
|
|
Sheet |
exposure |
|||||||||
|
|
|
£'000 |
£'000 |
|||||||||
|
|
Non-current assets |
|
|
|||||||||
|
|
Investments designated at fair value through profit or loss |
236,609 |
12,403 |
|||||||||
|
|
|
|
|
|||||||||
|
|
Current assets |
|
|
|||||||||
|
|
Cash at bank |
5,930 |
5,930 |
|||||||||
|
|
|
________ |
________ |
|||||||||
|
|
|
242,539 |
18,333 |
|||||||||
|
|
|
________ |
________ |
|||||||||
|
|
|
|
|
|||||||||
|
|
None of the Company's financial assets are past due or impaired. |
|||||||||||
|
|
|
|||||||||||
|
|
(iv) Gearing risk |
|||||||||||
|
|
The Company's policy is to increase its exposure to equity markets through the judicious use of borrowings. When borrowings are invested in such markets, the effect is to magnify the impact on shareholders' funds of changes, both positive and negative, in the value of the portfolio. |
|||||||||||
|
|
|
|||||||||||
|
|
During the year the Company's borrowings were short-term loans, details of which can be found in note 12. |
|||||||||||
|
|
|
|||||||||||
|
|
The loans are valued at amortised cost, using the effective interest rate method in the financial statements. The Board regulates the overall level of gearing by raising or lowering cash balances. |
|||||||||||
|
|
|
|||||||||||
|
|
Fair value of financial assets |
|||||||||||
|
|
Investments held at fair value through profit or loss are valued at their quoted bid prices which equate to their fair values. The Directors are of the opinion that the financial assets are stated at fair value in the Balance Sheet and considers that this is equal to the carrying amount. |
|||||||||||
|
|
|
|||||||||||
|
|
Fair values of financial liabilities |
|||||||||||
|
|
The fair value of borrowings as at the 31 December 2011 has been estimated at £11,000,000 which is the same as the carrying value due to their short term nature. At 31 December 2010 the fair value was £10,913,000 which was the same as the carrying value. |
|||||||||||
|
17. |
Capital management policies and procedures |
||
|
|
The Company's capital management objectives are: |
||
|
|
- to ensure that the Company will be able to continue as a going concern, and |
||
|
|
- to maximise the income and capital return to its equity shareholders through an appropriate balance of equity capital and debt. The policy is that debt should not exceed 25% of net assets. |
||
|
|
|
|
|
|
|
The Company's capital at 31 December comprises: |
|
|
|
|
|
2011 |
2010 |
|
|
|
£'000 |
£'000 |
|
|
Debt |
|
|
|
|
Borrowings under the multi-currency loan facility |
11,000 |
10,913 |
|
|
|
________ |
________ |
|
|
|
|
|
|
|
|
2011 |
2010 |
|
|
|
£'000 |
£'000 |
|
|
Equity |
|
|
|
|
Equity share capital |
139,084 |
118,035 |
|
|
Retained earnings and other reserves |
92,862 |
90,119 |
|
|
|
________ |
________ |
|
|
|
231,946 |
208,154 |
|
|
|
________ |
________ |
|
|
Debt as a % of net assets |
4.74 |
5.24 |
|
|
|
________ |
________ |
|
|
|
|
|
|
|
The Board, with the assistance of the Investment Manager monitors and reviews the broad structure of the Company's capital on an ongoing basis. This review includes: |
||
|
|
the planned level of gearing, which takes account of the Manager's views on the market; |
||
|
|
the need to buy back equity shares for cancellation, which takes account of the difference between the net asset value per share and the share price (ie the level of share price discount or premium); |
||
|
|
the need for new issues of equity shares; 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 is subject to the following externally imposed capital requirements: |
||
|
|
the bank borrowings under the Company's credit facility with Scotiabank Europe PLC are not to exceed 25% of net assets as measured in accordance with the policies used in the annual financial statements; |
||
|
|
under the Company's Articles of Association borrowings must not exceed an amount equal to the adjusted total of capital and reserves. |
||
|
|
|
||
|
|
These requirements are unchanged since last year, and the Company has complied with them during both the current and prior year. |
||
|
18. |
Related party transaction |
|
|
Mr H Young is a director of Aberdeen Asset Management Asia Limited (AAM Asia) and Aberdeen Asset Management PLC (AAM). AAM Asia is a subsidiary of AAM. Aberdeen Private Wealth Management Limited has an agreement to provide management services to the Company, which it has sub-delegated to AAM Asia. AAM has an agreement to provide administration and company secretarial services to the Company. The terms of these agreements are outlined in notes 5 and 6. |
|
|
|
|
|
During the year AAM exercised its entire holding of Warrants to subscribe for Ordinary shares of no par value amounting to 14,466,640 Warrants. The resultant 14,466,640 Ordinary shares of no par value were subsequently sold by AAM and placed in the market by Aberdeen Asian Income Fund Limited's broker, Canaccord Genuity Limited. |
|
19. |
Controlling party |
|
|
In the opinion of the Directors on the basis of shareholdings advised to them, the Company has no immediate or ultimate controlling party. |
|
20. |
Fair value hierarchy |
|||||
|
|
IFRS 7 'Financial Instruments: Disclosures' requires an entity to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making measurements. The fair value hierarchy has 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). |
|||||
|
|
|
|||||
|
|
The financial assets and liabilities measured at fair value in the Balance Sheet are grouped into the fair value hierarchy at 31 December 2011 as follows: |
|||||
|
|
|
|||||
|
|
|
|
Level 1 |
Level 2 |
Level 3 |
Total |
|
|
|
Note |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
Financial assets at fair value through profit or loss |
|
|
|
|
|
|
|
Quoted equities |
a) |
224,206 |
- |
- |
224,206 |
|
|
Quoted bonds |
b) |
12,403 |
- |
- |
12,403 |
|
|
|
|
______ |
______ |
______ |
______ |
|
|
Net fair value |
|
236,609 |
- |
- |
236,609 |
|
|
|
|
______ |
______ |
______ |
______ |
|
|
|
|
|
|
|
|
|
|
At 31 December 2010 |
|
|
|
|
|
|
|
|
|
Level 1 |
Level 2 |
Level 3 |
Total |
|
|
|
Note |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
Financial assets at fair value through profit or loss |
|
|
|
|
|
|
|
Quoted equities |
a) |
205,209 |
- |
- |
205,209 |
|
|
Quoted bonds |
b) |
11,724 |
- |
- |
11,724 |
|
|
|
|
______ |
______ |
______ |
______ |
|
|
Net fair value |
|
216,933 |
- |
- |
216,933 |
|
|
|
|
______ |
______ |
______ |
______ |
|
|
|
|
|
|
|
|
|
|
a) Quoted equities
|
|||||
|
|
The fair value of the Company's investments in quoted equities have been determined by reference to their quoted bid prices at the reporting date. Quoted equities included in Fair Value Level 1 are actively traded on recognised stock exchanges. |
|||||
|
|
|
|||||
|
|
b) Quoted bonds |
|||||
|
|
The fair value of the Company's investments in corporate quoted bonds have been determined by reference to their quoted bid prices at the reporting date. |
|||||
|
21. |
Events after the reporting period |
|
|
A further 4,200,000 Ordinary shares have been issued by the Company subsequent to the reporting period end at a total consideration received of £7.6 million. Following the share issues 143,283,871 Ordinary shares remain in issue. |
Additional Notes:
The financial information set out above does not constitute the Company's statutory accounts for the year ended 31 December 2011. The annual audited accounts for 2011 will be finalised on the basis of the financial information presented by the Directors in this annual financial report announcement and will be delivered to the Jersey Financial Services Commission in due course.
The Annual Report will be posted to Shareholders in April and further copies may be obtained from the registered office, No.1 Seaton Place, St Helier, Jersey JE4 8YJ and on the Company's website* www.asian-income.co.uk.
Please note that past performance is not necessarily a guide to the future and that the value of investments and the income from them may fall as well as rise and may be affected by exchange rate movements. Investors may not get back the amount they originally invested.
* Neither the content of the Company's website nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is (or is deemed to be) incorporated into, or forms (or is deemed to form) part of this announcement.
Aberdeen Private Wealth Management Limited
Secretary
27 March 2012
10. INVESTMENT PORTFOLIO - TEN LARGEST INVESTMENTS
|
As at 31 December 2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Valuation |
Total |
Valuation |
|
|
|
Country |
2011 |
assets |
2010 |
|
Company |
Sector |
of activity |
£'000 |
%{B} |
£'000{C} |
|
DB Indo CLN 10% 22/07/17 IDR 'FR28' |
|
|
|
|
|
|
Credit linked note issued by Deutsche Bank and linked to the Indonesia Government Bond 10% 07/17 as the underlying asset. |
Government Securities |
Indonesia |
12,403 |
5.1 |
11,724 |
|
Taiwan Semiconductor |
|
|
|
|
|
|
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 |
11,692 |
4.8 |
11,319 |
|
Guinness Anchor |
|
|
|
|
|
|
The market leader in Malaysia's beer and stout industry, with brand names including Tiger, Guinness and Heineken. |
Beverages |
Malaysia |
10,851 |
4.5 |
7,741 |
|
Taiwan Mobile |
|
|
|
|
|
|
A leading telecommunications company in Taiwan offering mobile, fixed-line, cable TV and broadband services, it has a prudent management and pays a good dividend. |
Wireless Telecommunication Services |
Taiwan |
9,969 |
4.1 |
10,096 |
|
QBE Insurance Group |
|
|
|
|
|
|
One of Australia's leading general insurance and reinsurance companies. Its business is diversified geographically across five locations, and it has a good, long-term track record of generating shareholder returns. |
Insurance |
Australia |
9,315 |
3.8 |
8,838 |
|
British American Tobacco |
|
|
|
|
|
|
Manufacturer & marketer of tobacco products in Malaysia through BAT's international brands such as Dunhill and Lucky Strike. |
Tobacco |
Malaysia |
8,865 |
3.6 |
7,585 |
|
Oversea-Chinese Banking Corporation |
|
|
|
|
|
|
A well-managed Singapore bank with a strong capital base and impressive cost-to-income ratio. It has also embarked on a selective regional expansion. |
Commercial Banks |
Singapore |
8,357 |
3.4 |
9,015 |
|
Swire Pacific (Class A and Class B) |
|
|
|
|
|
|
A Hong Kong-listed conglomerate, with interests in aviation (via Cathay Pacific), property, beverages, marine services and industrial activities |
Real Estate Management & Development |
Hong Kong |
7,876 |
3.2 |
9,369 |
|
Digi Com |
|
|
|
|
|
|
Digi is one of the 3 major telecommunications operators in Malaysia and is the only one that is majority owned by a foreign company. Digi currently has a market share of 26% in terms of mobile subscribers. |
Wireless Telecommunication Services |
Malaysia |
7,580 |
3.1 |
6,599 |
|
Telstra |
|
|
|
|
|
|
Telstra is the largest Australian telecommunications company. The company provides a full suite of telecommunications services to a wide range of domestic and international customers. |
Diversified Telecommunication Services |
Australia |
7,469 |
3.1 |
5,754 |
|
Top ten investments |
|
|
94,377 |
38.7 |
|
INVESTMENT PORTFOLIO - OTHER INVESTMENTS
|
As at 31 December 2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Valuation |
Total |
Valuation |
|
|
|
|
2011 |
assets |
2010 |
|
Company |
Sector |
Country |
£'000 |
%{B} |
£'000{C} |
|
United Overseas Bank |
Commercial Banks |
Singapore |
7,123 |
2.9 |
8,076 |
|
BHP Billiton |
Metals & Mining |
Australia{D} |
7,059 |
2.9 |
7,653 |
|
Venture Corp |
Electronic Equipment, Instruments & Components |
Singapore |
6,615 |
2.7 |
2,909 |
|
HSBC Holdings |
Commercial Banks |
Hong Kong |
6,597 |
2.7 |
- |
|
SP Ausnet |
Electric Utilities |
Australia |
6,449 |
2.7 |
3,759 |
|
China Mobile |
Wireless Telecommunication Services |
China |
6,410 |
2.6 |
- |
|
Siam Makro |
Food & Staples Retailing |
Thailand |
6,337 |
2.6 |
6,265 |
|
Advanced Information Services |
Wireless Telecommunication Services |
Thailand |
6,282 |
2.6 |
4,472 |
|
Commonwealth Bank of Australia |
Commercial Banks |
Australia |
6,007 |
2.5 |
5,650 |
|
Takeda Pharmaceutical |
Pharmaceuticals |
Japan |
5,637 |
2.3 |
3,775 |
|
Top twenty investments |
|
|
158,893 |
65.2 |
|
|
PetroChina |
Oil, Gas & Consumable Fuels |
China |
5,608 |
2.3 |
5,394 |
|
Singapore Telecommunications |
Diversified Telecommunication Services |
Singapore |
5,582 |
2.3 |
5,140 |
|
Siam Cement |
Construction Materials |
Thailand |
5,575 |
2.3 |
5,836 |
|
Australia & New Zealand Bank Group |
Commercial Banks |
Australia |
5,485 |
2.3 |
5,886 |
|
Singapore Technologies Engineering |
Aerospace & Defence |
Singapore |
5,287 |
2.2 |
6,224 |
|
Giordano International |
Speciality Retail |
Hong Kong |
4,983 |
2.0 |
3,964 |
|
Woolworths |
Food & Staples Retailing |
Australia |
4,702 |
1.9 |
4,658 |
|
Singapore Press Holdings |
Media |
Singapore |
4,267 |
1.8 |
4,266 |
|
Singapore Post |
Air Freight & Logistics |
Singapore |
4,167 |
1.7 |
4,283 |
|
BEC World |
Media |
Thailand |
3,879 |
1.6 |
2,837 |
|
Top thirty investments |
|
|
208,428 |
85.6 |
|
|
Pacific Basin Shipping |
Marine |
Hong Kong |
3,339 |
1.4 |
- |
|
Hong Leong Finance |
Consumer Finance |
Singapore |
3,184 |
1.3 |
4,306 |
|
SBS Transit |
Road & Rail |
Singapore |
2,908 |
1.2 |
3,266 |
|
Telecom Corp of New Zealand (Australia Listing) |
Diversified Telecommunication Services |
New Zealand |
2,801 |
1.2 |
2,914 |
|
Public Bank |
Commercial Banks |
Malaysia |
2,631 |
1.1 |
5,014 |
|
Westfield Group |
Real Estate Investment Trusts |
Australia |
2,576 |
1.1 |
- |
|
Lafarge Malayan Cement |
Construction Materials |
Malaysia |
2,466 |
1.0 |
2,527 |
|
Hana Microelectronics |
Electronic Equipment, Instruments & Components |
Thailand |
2,428 |
1.0 |
2,384 |
|
Keppel Corp |
Industrial Conglomerates |
Singapore |
2,077 |
0.9 |
- |
|
Pos Malaysia |
Air Freight & Logistics |
Malaysia |
2,054 |
0.8 |
2,776 |
|
Kingmaker Footwear |
Textiles, Apparel & Luxury Goods |
Hong Kong |
862 |
0.4 |
1,419 |
|
Chorus |
Diversified Telecommunication Services |
New Zealand |
855 |
0.4 |
- |
|
Total value of investments |
|
|
236,609 |
97.4 |
|
|
Net current assets{A} |
|
|
6,337 |
2.6 |
|
|
Total assets{B} |
|
|
242,946 |
100.0 |
|
|
|
|
|
|
|
|
|
{A} Excluding bank loans of £11,000,000. |
|||||
|
{B} Total Assets is defined as total assets less current liabilities (before deducting prior charges) less all cash and fixed interest assets (excluding the DB Indo CLN 10% bond and any convertibles) divided by shareholders' funds. |
|||||
|
{C} Purchases and/or sales effected during the year will result in 2010 and 2011 values not being directly comparable. |
|||||
|
{D} Incorporated in and listing held in United Kingdom |
|||||
11 RESULTS
Financial Highlights
|
|
31 December 2011 |
31 December 2010 |
% |
|
Total assets |
£242,946,000 |
£219,067,000 |
+10.9 |
|
Total equity shareholders' funds (net assets) |
£231,946,000 |
£208,154,000 |
+11.4 |
|
Share price (mid market) |
168.13p |
170.25p |
-1.2 |
|
Net asset value per share (basic) |
166.77p |
176.35p |
-5.4 |
|
Net asset value per share (diluted) |
164.78p |
167.85p |
-1.8 |
|
Premium to diluted net asset value |
2.0% |
1.4% |
|
|
MSCI AC Asia Pacific ex Japan Index (currency adjusted, capital gains basis) |
472.88 |
572.28 |
-17.4 |
|
Actual gearing |
2.2% |
4.6% |
|
|
Potential gearing |
4.7% |
5.2% |
|
|
|
|
|
|
|
Dividend and earnings |
|
|
|
|
Total return per share{A} |
3.36p |
43.52p |
|
|
Revenue return per share{A} |
7.44p |
7.31p |
+1.8 |
|
Dividends per share{B} |
6.75p |
6.00p |
+12.5 |
|
Dividend cover |
1.10 |
1.22 |
|
|
Revenue reserves{C} |
£5.03m |
£4.38m |
|
|
|
|
|
|
|
Operating costs |
|
|
|
|
Total expense ratio |
1.37% |
1.37% |
|
|
|
|||
|
{A} Measures the relevant earnings for the year divided by the weighted average number of Ordinary shares in issue (see Statement of Comprehensive Income). |
|||
|
{B} The figure for dividends reflects the years in which they were earned (see note 8). |
|||
|
{C} The revenue reserves figure takes account of the fourth interim dividend amounting to £3,138,000 (2010 - fourth interim amounting to £2,656,000). |
|||
Performance (total return)
|
|
1 year |
3 year |
5 year |
Since launch{A} |
|
|
% return |
% return |
% return |
% return |
|
Share price |
+2.7 |
+88.1 |
+87.2 |
+107.4 |
|
Net Asset Value (diluted) |
+2.2 |
+74.1 |
+81.8 |
+106.9 |
|
MSCI AC Asia Pacific ex Japan Index (currency adjusted) |
-14.8 |
+61.0 |
+45.4 |
+74.2 |
|
|
||||
|
All figures are for total return and assume re-investment of net dividends. |
||||
|
{A} Launch being 20 December 2005. |
||||
Dividends
|
|
Rate per share |
xd date |
Record date |
Payment date |
|
First interim 2011 |
1.50p |
27 April 2011 |
03 May 2011 |
19 May 2011 |
|
Second interim 2011 |
1.50p |
20 July 2011 |
22 July 2011 |
25 August 2011 |
|
Third interim 2011 |
1.50p |
26 October 2011 |
28 October 2011 |
18 November 2011 |
|
Fourth interim 2011 |
2.25p |
18 January 2012 |
20 January 2012 |
17 February 2012 |
|
2011 |
6.75p |
|
|
|
|
First interim 2010 |
1.25p |
28 April 2010 |
30 April 2010 |
19 May 2010 |
|
Second interim 2010 |
1.25p |
21 July 2010 |
23 July 2010 |
15 August 2010 |
|
Third interim 2010 |
1.25p |
27 October 2010 |
29 October 2010 |
19 November 2010 |
|
Fourth interim 2010 |
2.25p |
19 January 2011 |
21 January 2011 |
18 February 2011 |
|
2010 |
6.00p |
|
|
|
This information is provided by RNS
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