Annual Financial Report

RNS Number : 6559V

Aberdeen New Dawn Invest Trust PLC

14 July 2009

 



ABERDEEN NEW DAWN INVESTMENT TRUST PLC

ANNUAL FINANCIAL REPORT

for the year ended 30 April 2009

1.  CHAIRMAN'S STATEMENT

Background

During the year to 30 April 2009, the net asset value of your Company fell by 24.6% to 487.12p (excluding dividends reinvested). The share price fell by 22.6% to 441.00p during the period, reflecting a slight narrowing of the discount. This compares with a fall in the Company's benchmark, the MSCI AC Asia Pacific ex-Japan Index, of 23.1% in sterling terms. 

The underperformance was primarily the result of the fund being geared in declining markets, though during the recent run-up in markets since early March, this gearing enhanced performance.

Revenue returns from the portfolio during the year were very strong. As a result of this and in compliance with investment trust rules which require the Company to distribute at least 85% of its income from securities, we are proposing to raise the dividend this year to 8.0p, an increase of 33.3% on last year's level. If approved by shareholders at the Annual General Meeting, the final dividend will be paid on 28 August 2009 to Ordinary shareholders on the register on 7 August 2009. Shareholders should be aware that, as in previous years, the level of future dividends will depend on future receipts from the portfolio. 

Overview 

Asian equities fell sharply during the year, as concerns over credit markets and the subsequent global economic slowdown led to dramatic sell offs. In the latter stages of 2008, a series of measures designed to support financial markets and stimulate economies triggered a number of relief rallies. A more substantial market rally began in early March, reflecting an increasing belief that an end to the economic slump was in sight.

The collapse in export demand pushed Singapore, Hong Kong and Taiwan into recession; less trade-reliant economies also reported significant contractions, as the widespread slowdown undermined consumer confidence. Additional measures were introduced to stimulate domestic demand to counter the sharp deterioration in economic conditions. These included spending on infrastructure, tax breaks to encourage private spending, and aid to key sectors designed to create jobs. Central banks also cut interest rates, pushing them to historical lows as inflation fears subsided.

Towards the period end, tentative signs began to emerge that the worst of the financial crisis may be over. Optimism that both global and regional economic stimulatory efforts would avert a prolonged downturn increased risk appetite for equities, particularly those in emerging Asian markets. Though rises seen in the last two months of the reporting period were rapid, they clawed back only a portion of previous declines. 

The underlying businesses of your Company's holdings generally proved resilient during this challenging period compared with their peers, as should be expected given your Manager's preference for robust, steady companies.

Your Manager has maintained an overweight position in India, as the country has a strong, deep-rooted culture of commercial enterprise, with many well-run, shareholder-focused companies offering good long-term potential in a wide variety of industries. The surprisingly decisive victory for the Congress party-led alliance in the election that concluded after the period end offers hope that much-needed economic and governance reforms will now move forward.

As for China, it may be one of the most exciting growth stories in Asia, but the positive macro environment is not always reflected at the corporate level. As such, your Manager still prefers to gain exposure to China via Hong Kong stocks or Chinese entities listed in Hong Kong, where there is better corporate transparency.

Portfolio transaction activity was very low during the review period. This is what you should expect to see, given your Manager's long investment time horizon.

Gearing

During the year the Company repaid its £12m multi currency facility with AIB and drew down HKD150.1m under a new £20m multi currency credit facility negotiated with the Royal Bank of Scotland (representing £10.9 million at the time of drawing). In September 2008 a further HKD 25.3m was drawn down (representing approximately £1.75m at the time of drawing) and subsequent to the year end, in May, HKD 34.4m was repaid (representing approximately £3m). Accordingly, at the time of writing a total of HKD141m remains drawn (representing approximately £11.3m) under the facility. 

The Board continues to review the gearing position at each meeting in conjunction with the Manager and remains of the belief that the use of gearing will be of benefit to shareholders over the longer term.

AGM Business

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

The Annual General Meeting of the Company will be held on Wednesday 26 August 2009 at 12.30 pm in London and your Board looks forward to meeting as many Shareholders as possible at both the AGM and the subsequent lunch.

Outlook

Despite the recent market rebound, considerable risks remain. Western economies are likely to remain weak for some time as both lenders and borrowers seek to rebuild balance sheets. Thus growth in Asia, which had been driven to a large extent by demand from the West, is unlikely to return any time soon to the high rates seen prior to the crisis.

Asian governments have been proactive, unveiling multi-billion-dollar fiscal stimulus initiatives to compensate for the shortfall from sagging exports, and aggressively cutting interest rates to bolster domestic demand. But investor confidence is still shaky. The global credit system remains fragile, with many banks reluctant, or simply unable, to lend, faced with the prospect of rising non-performing loans. The tough operating environment and funding challenges are likely to put pressure on dividends. Earnings visibility remains poor and forecasts continue to be downgraded.

However, Asia's stronger fundamentals suggest that the region can recover before its counterparts elsewhere. In addition, the region's substantial external reserves, accumulated over a number of years, provide increasing stability to what was considered ten years ago to be the world's weak spot.

Furthermore, the current crisis has presented opportunities for well-managed companies to strengthen their competitive positions amid the ongoing consolidation. The portfolio, which comprises companies with good management teams and sound balance sheets, is well-positioned to withstand the uncertain climate and emerge from the crisis in good shape.

Alan Henderson

Chairman

14 July 2009

2.  MANAGER'S REVIEW

Asian equities fell sharply in the year under review. At first, it was believed that the region would be insulated from the credit problems in the West, as despite foreign portfolio capital outflows, economies remained relatively robust. This supported the belief that the region had decoupled sufficiently from the West and would be able to grow even if key developed markets contracted. However, this optimism dissipated as the year progressed. 

The collapse of Lehman Brothers, followed by a string of near bankruptcies at major US and European financial companies, caused a massive loss of confidence across the globe. As risk aversion heightened, it became clear that Asia was not immune from the problems in the West. In October, global stockmarkets plunged to multi-year lows. Previous years' highflyers, such as China and India, felt the effects of capital flight most acutely.

The upheaval in global credit markets inevitably impacted economic activity. As access to credit became increasingly restricted, Western demand deteriorated. In Asia, export-dependent economies, such as Japan, Hong Kong and Singapore, were the first to slip into recession. This highlighted the fact that while Asia did not have the excessive leverage that characterised much of the developed world, its growth model remained inextricably linked to Western consumption.

Towards the end of the review period, lower interest rates, quantitative easing and stimulatory measures introduced by governments worldwide helped to turn global markets around, as hopes grew that the end of the economic downturn may be in sight. All Asian benchmarks rose sharply in March and April, but not enough to nullify previous losses.

Portfolio Review

The Company lagged its benchmark during the review period, with the NAV total return of -23.8% in sterling terms compared with the benchmark's total return of -20.3%. The underperformance was due principally to the Company's gearing.

Singapore's export-dependent economy was one of the worst hit in the region amid declining Western demand, but our Singapore holdings benefited from the extreme market volatility as investors switched from higher risk assets to conservative, well-run companies. These include ST Engineering, Oversea-Chinese Banking Corporation (OCBC) and Singapore Airlines (SIA). In particular, OCBC, which possesses the highest tier-one capital ratios among Singapore lenders, was the best-performing local bank during the review period. SIA outperformed the local market benchmark; its strong branding and sound financial position should allow it to consolidate its leading market position amid the downturn. As for ST Engineering, despite the downturn in the key aviation sector, its business has remained steady while those of its rivals have struggled. The company's solid fundamentals and stable long-term growth prospects are underpinned by diversified revenue streams, evidenced by an order book that stood at a record S$11 billion at the end of the first quarter of 2009. 

Although its economy is not as exposed to exports as Singapore and should see reasonable growth this year, the Indian stockmarket fell sharply as well, as capital outflow intensified and foreign investment declined. But our underlying Indian holdings, in particular, the consumer-related companies, such as Hindustan Unilever and Godrej Consumer Products, proved resilient. Their balance sheets remain strong, with net-cash positions. Meanwhile, Hero Honda posted better-than-expected fourth-quarter profits on the back of robust rural demand and lower raw material prices. In addition, healthcare firm GlaxoSmithKline continued to benefit from its recognisable brand name, broad pipeline of products and wide distribution network. 

Stock selection in Indonesia was also a positive contributor to relative performance, with our largest holding, Unilever Indonesia, outperforming the local market significantly. It is the largest fast-moving consumer goods firm in a country with a sizeable population and rising purchasing power, and has demonstrated excellent earnings resilience during the slowdown. It is a company we are very comfortable holding for the long term. 

In Korea, Busan Bank and Daegu Bank underperformed the local market amid concerns over worsening asset quality; both lenders' first-quarter earnings were hurt by higher provisions and lower net interest margins. Nevertheless, the Company continues to hold them because they are well-managed and have sufficient capital to deal with debt write-downs. Samsung Electronics also underperformed the local market. The leading Korean semiconductor company saw a steep drop in first-quarter net profits on the back of weak chip prices. However, we remain comfortable with the holding as its strong balance sheet and improving technological competitiveness bodes well for the company in the longer term.

The Company remains underweight to Korea, however, as it is a relatively mature economy dominated by sprawling conglomerates; progress in improving corporate governance has also been disappointing in general.

The underweight to Taiwan detracted from performance as the market fell less than its peers. However, the Company's Taiwan holdings rose over the review period. Taiwan Mobile's first-quarter earnings were better than expected because of effective cost control; it also remains committed to its dividend policy. Meanwhile, Taiwan Semiconductor Manufacturing Co surprised the market by posting robust results, despite having guided for a first-quarter loss; investment in research and development has given the world's largest dedicated semiconductor foundry a significant technological edge over its competitors. 

On the mainland, China Mobile disappointed as it failed to raise its dividend payout ratio despite a healthy balance sheet. In addition, the company continued to face increasing competition with the government-enforced industry restructuring; the impending issue of 3G licences is expected to intensify this competition further. However, it is the undisputed leader in what is the world's largest telecommunications market and continues to add new subscribers every month, particularly in rural areas.

In Hong Kong, mid-tier banks, such as Wing Hang Bank and Dah Sing Financial, which tend to have a higher exposure to small and medium-sized enterprises and unsecured lending, underperformed the local benchmark amid worries over asset deterioration.

As for portfolio transaction activity, we introduced Hong Kong Exchanges and Clearing, a well-run business, which now derives the bulk of its turnover from the trading of Chinese companies listed in Hong Kong. We later sold our position following a strong run-up in its share price, but may look to reinitiate a position should the stock's valuation return to more reasonable levels.

We exited our positions in Australia's Tabcorp and Leighton Holdings, Korea's Hyundai Motor and Kookmin Bank, Taiwan's Fubon Financial and China's Zhejiang Expressway. We had grown increasingly concerned over the business outlook for Fubon and Zhejiang. As for Kookmin, we accepted the lender's repurchase offer after becoming sceptical about its restructuring efforts, while Hyundai's prospects had deteriorated in line with the slowdown in the auto sector. Meanwhile, Leighton's valuation had become stretched and we had grown concerned that its business expansion was becoming too aggressive. Despite the cash-generative nature of the gaming business, Tabcorp fell victim to regulatory changes in Victoria. With more gaming licences being issued and an increase in levies, Tabcorp's profits and outlook were negatively impacted. 

We also top-sliced holdings that had seen a strong run-up or had proved relatively resilient in the sell-off. These included Korea's Shinsegae, TSMC, Taiwan Mobile, Unilever Indonesia, Malaysia's Public Bank and Australia's QBE Insurance. With the proceeds, we added to a number of existing holdings whose valuations had fallen to more attractive levels, including Rio Tinto, Standard Chartered Bank, China Mobile, Singapore's City Developments and Thailand's PTT Exploration & Production.

Outlook

Asian markets are likely to remain volatile in the months ahead. The recent rally in equities worldwide may be unsustainable as it appears at odds with poor economic data and a lack of visibility in corporate earnings. Much has been said about Asia, in particular China and India, leading the world's economic recovery. While domestic demand potential is undeniable, a large part of the region's output is still destined for US and European shores, where we expect demand to remain weak for some time. Reducing this export dependency will take time, given Asians' propensity to save. 

That said, the long-term growth potential for Asia remains exciting and we believe the region's fundamentals are stronger than those of the developed world. Generally, it has huge foreign reserves, high savings rates and low debt, affording governments the ability to pump prime to help revive growth. At the stock level, we remain very confident of the health of the companies in which we are invested.  

Aberdeen Asset Management Asia Limited

14 July 2009

3.  RESULTS

Highlights
	30 April 2009	30 April 2008	% change
Total Assets	£136,798,000	£170,852,000	-19.9
Total Equity Shareholders' funds (Net Assets)	£121,339,000	£160,993,000	-24.6
Share price (mid market)	441.00p	570.00p	-22.6
Net Asset Value per share	487.12p	646.31p	-24.6
Discount to Net Asset Value	9.5%	11.8%
MSCI AC Asia Pacific ex Japan Index (currency adjusted, capital gains basis)	356.53	463.91	-23.1
Potential gearing	1.13	1.06
Dividend and earnings
Revenue return per share{A}	10.48p	8.14p	+28.8
Proposed final dividend per share{B}	8.00p	6.00p	+33.3
Dividend cover	1.31	1.36
Revenue reserves{C}	£7,171,000	£6,055,000
Operating costs
Total expense ratio	1.28%	1.24%
{A}     Measures the total earnings for the year divided by the weighted average number of Ordinary shares in issue (see Income Statement).
{B}     The figures for dividends still reflect the years in which they were earned (see note 7) and have not been restated.
{C}     Prior to payment of proposed final dividend.

Performance (total return)
	1 year return	3 year return	5 year return
	%	%	%
Share price	-21.7	-11.7	+63.3
Net Asset Value	-23.8	-0.2	+69.3
MSCI AC Asia Pacific ex Japan Index (currency adjusted)	-20.3	+7.4	+79.4

	Rate	xd date	Record date	Payment date
Proposed final 2009	8.00p	5 August 2009	7 August 2009	28 August 2009
Final 2008	6.00p	6 August 2008	8 August 2008	1 September 2008

Financial Record
Ten years to 30 April 2009
Year to 30 April	2000	2001	2002	2003	2004	2005	2006	2007	2008	2009
Total revenue (£'000)	1,539	2,075	2,035	2,447	2,404	3,188	3,345	4,027	4,301	4,734
	______	______	______	______	______	______	______	______	______	______
Per share
Net revenue return (p)	1.73	3.54	3.76	5.10	4.83	6.84	6.58	7.63	8.14	10.48
Total return (p)	61.42	(29.87)	50.59	48.01	103.41	30.35	175.78	50.04	101.51	(153.19)
Net dividends paid/proposed (p){A}	1.65	2.65	3.00	3.80	3.80	5.00	5.00	5.55	6.00	8.00
Net asset value per share (p)	236.78	205.84	253.47	201.66	301.27	330.42	503.83	548.87	646.31	487.12
	______	______	______	______	______	______	______	______	______	______
Equity Shareholders' funds (£'000)	58,203	47,945	58,975	46,920	70,097	77,341	127,907	139,342	160,993	121,339
	______	______	______	______	______	______	______	______	______	______
{A} The figures for dividends have not been restated and still reflect the dividend for the years in which it was earned. The 2005 figure includes a 1.0p Special.

4.  INVESTMENT PORTFOLIO

Investment Portfolio
As at 30 April 2009
			Valuation	Total	Valuation
			2009	assets	2008
Company	Sector	Country	£'000	%	£'000
Aberdeen Global-India Opportunities Fund			16,925	12.4	21,483
A tax-efficient pooled India fund with a long-term investment approach managed by the same team managing the Company. There is no double-charging of management fees.	Collective Investment Scheme	India
Oversea-Chinese Banking Corporation			5,345	3.9	6,411
A well-run Singaporean bancassurance company seeking to generate additional value for shareholders by restructuring assets and via regional expansion.	Commercial Banks	Singapore
Samsung Electronics Pref			4,890	3.6	7,795
A leading semiconductor company which is also a major player in mobile phones and TFT-LCDs. The Company owns the preferred shares, which trade at a discount to the ordinary shares.	Semiconductors & Semiconductor Equipment	South Korea
Jardine Strategic Holdings			4,887	3.6	4,813
A Singapore-listed conglomerate with interests across the region spanning property, hotels and consumer products.	Industrial Conglomerates	Singapore
QBE Insurance Group			4,839	3.5	5,415
A leading Australian general insurance and reinsurance firm that is geographically diversified, and has a track record of generating good shareholder returns.	Insurance	Australia
Swire Pacific 'B'			4,773	3.5	5,305
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
Standard Chartered			4,713	3.4	3,588
A Hong Kong-listed lender with significant operations in the emerging markets.	Commercial Banks	Hong Kong
Taiwan Semiconductor Manufacturing Company			4,371	3.2	5,089
The world's largest dedicated semiconductor foundry. TSMC provides wafer manufacturing, wafer probing, assembly and testing, mask production and design services.	Semiconductors & Semiconductor Equipment	Taiwan
Singapore Technologies Engineering			4,363	3.2	3,293
Defence contractor with capabilities in aerospace, electronics, land systems and marine.	Aerospace & Defence	Singapore
Petrochina			4,318	3.2	3,194
China's largest onshore oil & gas production company. The stock is both a restructuring story and a play on the long-term growth potential of the local oil and gas industry.	Oil, Gas & Consumable Fuels	China
Top ten investments			59,424	43.5

Investment Portfolio
As at 30 April 2009
			Valuation	Total	Valuation
			2009	assets	2008
Company	Sector	Country	£'000	%	£'000
Rio Tinto	Metals & Mining	Australia	4,300	3.1	5,911
United Overseas Bank	Commercial Banks	Singapore	4,293	3.1	6,221
Singapore Telecommunications	Diversified Telecommunication Services	Singapore	4,165	3.0	4,594
China Mobile	Wireless Telecommunication Services	China	4,088	3.0	4,805
City Developments	Real Estate Management & Development	Singapore	3,831	2.8	4,432
PTT Exploration & Production	Oil, Gas & Consumable Fuels	Thailand	3,430	2.5	4,229
Ayala Land	Real Estate Management & Development	Philippines	2,857	2.1	3,161
Dairy Farm International	Food & Staples Retailing	Hong Kong	2,686	2.0	1,979
Sun Hung Kai Properties	Real Estate Management & Development	Hong Kong	2,669	1.9	3,761
Siam Cement	Construction Materials	Thailand	2,618	1.9	3,241
Top twenty investments			94,361	68.9
Public Bank Berhad	Commercial Banks	Malaysia	2,518	1.8	2,847
Singapore Airlines	Airlines	Singapore	2,441	1.8	2,973
Unilever Indonesia	Household Products	Indonesia	2,416	1.8	2,891
Hang Lung Properties	Real Estate Management & Development	Hong Kong	2,400	1.8	2,571
Aberdeen Asian Smaller Companies Inv. Trust	Investment/Unit Trusts	Other Asia	2,245	1.6	2,740
Taiwan Mobile	Wireless Telecommunication Services	Taiwan	2,191	1.6	2,842
Hang Lung Group	Real Estate Management & Development	Hong Kong	2,165	1.6	1,330
Shinsegae Company	Food & Staples Retailing	South Korea	1,931	1.4	3,546
Venture Corp	Electronic Equipment & Instruments	Singapore	1,906	1.4	2,374
ASM Pacific Technologies	Semiconductors & Semiconductor Equipment	Hong Kong	1,884	1.4	1,721
Top thirty investments			116,458	85.1
Fraser & Neave Limited	Industrial Conglomerates	Singapore	1,841	1.3	2,578
Bumiputra Commerce	Commercial Banks	Malaysia	1,709	1.2	2,057
M.P. Evans Group	Food Products	Indonesia	1,654	1.2	2,747
Wing Hang Bank	Commercial Banks	Hong Kong	1,615	1.2	2,526
POS Malaysia Berhad	Air Freight & Logistics	Malaysia	1,473	1.1	1,249
New India Inv. Trust	Investment/Unit Trusts	India	1,466	1.1	-
Dah Sing Financial	Commercial Banks	Hong Kong	984	0.7	1,613
Busan Bank	Commercial Banks	South Korea	901	0.7	1,627
Multi Bintang Indonesia	Beverages	Indonesia	825	0.6	468
Aitken Spence & Co.	Industrial Conglomerates	Sri Lanka	557	0.4	710
Top forty investments			129,483	94.6
Daegu Bank	Commercial Banks	South Korea	556	0.4	961
Giordano International	Speciality Retail	Hong Kong	554	0.4	878
Hong Kong Exchanges & Clearing	Financial Services	Hong Kong	536	0.4	-
DFCC Bank	Commercial Banks	Sri Lanka	417	0.3	523
BOC Pakistan	Chemicals	Pakistan	378	0.3	881
John Keells Holdings	Industrial Conglomerates	Sri Lanka	367	0.3	524
National Development Bank	Commercial Banks	Sri Lanka	233	0.2	343
Total investments			132,524	96.9
Net current assets{A}			4,274	3.1
Total assets			136,798	100.0
{A} Excluding bank loan of £15,273,000. Note: Unless otherwise stated, foreign stock is held and all investments are equity holdings.

5.  Principal Risks and Uncertainties

Investment in Far East equities or those of companies that derive significant revenue or profit from the Far East involves a greater degree of risk than that usually associated with investment in the securities in major securities markets. The securities that the Company owns may be considered speculative because of this higher degree of risk. Further details of the risks attaching to the Company's shares are provided in note 19 to the financial statements. These risks include:

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. 

Dividends

The Company will only pay dividends on the Ordinary shares to the extent that it has profits available for that purpose. The ability of the Company to pay any dividends in respect of the Ordinary shares will depend primarily on the level of income received from its investments. Accordingly, the amount of the dividends paid to Shareholders may 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 Company's investments are subject to normal market fluctuations and the risks inherent in the purchase, holding or selling of securities, and there can be no assurance that appreciation in the value of those investments will occur. 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.

Political Risks

In common with stockmarkets in other emerging and less developed countries, investments in Asia are subject to a greater degree of political risk than that with which investors might be familiar with.

Foreign Exchange Risks

The Company accounts for its activities and reports its results in sterling while investments are made and realised in other currencies. It is not the Company's present intention to engage in currency hedging, although it reserves the right to do so. Accordingly, the movement of exchange rates between sterling and the other currencies in which the Company's investments are denominated or its borrowings are drawn down may have a material effect, unfavourable as well as favourable, on the returns otherwise experienced on the investments made by the Company.

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.

6.  STATEMENT OF DIRECTORS' RESPONSIBILITIES

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

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

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

-    select suitable accounting policies and then apply them consistently;

-    make judgments and estimates that are reasonable and prudent;

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

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

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

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

The financial statements are published on www.newdawn-trust.co.uk which is a website maintained by the Company's Manager. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

The Directors confirm that to the best of our knowledge:

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

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

For Aberdeen New Dawn Investment Trust PLC

Alan Henderson

Chairman

14 July 2009

  7.  INCOME STATEMENT 

		Year ended 30 April 2009			Year ended 30 April 2008
		Revenue	Capital	Total	Revenue	Capital	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000
(Losses)/gains on investments held at fair value through profit or loss	9	-	(36,267)	(36,267)	-	24,288	24,288
Income	2	4,734	-	4,734	4,301	-	4,301
Investment management fee	3	(507)	(507)	(1,014)	(652)	(652)	(1,304)
Administrative expenses	4	(533)	-	(533)	(611)	-	(611)
Exchange losses		-	(4,031)	(4,031)	-	(169)	(169)
		_______	_______	_______	_______	_______	______
Net return on ordinary activities before finance costs and taxation		3,694	(40,805)	(37,111)	3,038	23,467	26,505
Interest payable and similar charges	5	(149)	(149)	(298)	(189)	(189)	(378)
		_______	_______	_______	_______	_______	______
Return on ordinary activities before taxation		3,545	(40,954)	(37,409)	2,849	23,278	26,127
Taxation	6	(934)	184	(750)	(797)	251	(546)
		_______	_______	_______	_______	_______	______
Return on ordinary activities after taxation		2,611	(40,770)	(38,159)	2,052	23,529	25,581
		_______	_______	_______	_______	_______	______
Return per Ordinary share (pence)	8	10.48	(163.67)	(153.19)	8.14	93.37	101.51
		_______	_______	_______	_______	_______	______
The total column of this statement represents the profit and loss account of the Company.
A Statement of Total Recognised Gains and Losses has not been prepared as all gains and losses are recognised in the Income Statement.
All revenue and capital items are derived from continuing operations.
The accompanying notes are an integral part of the financial statements.

8.  BALANCE SHEET

		As at	As at
		30 April 2009	30 April 2008
	Notes	£'000	£'000
Non-current assets
Investments at fair value through profit or loss	9	132,524	165,212
Current assets
Loans and receivables	10	1,085	797
Cash at bank and in hand		3,722	5,353
		4,807	6,150
Creditors: amounts falling due within one year	11
Foreign currency loans		(15,273)	(9,723)
Other creditors		(533)	(510)
		____________	____________
		(15,806)	(10,233)
		____________	____________
Net current liabilities		(10,999)	(4,083)
		____________	____________
Total assets less current liabilities		121,525	161,129
Provision for liabilities and charges	12	(186)	(136)
		____________	____________
Net assets		121,339	160,993
		____________	____________
Share capital and reserves
Called-up share capital	13	6,347	6,347
Share premium account		17,955	17,955
Special reserve		11,617	11,617
Capital redemption reserve		10,207	10,207
Capital reserve	14	68,042	108,812
Revenue reserve		7,171	6,055
		____________	____________
Equity Shareholders' funds		121,339	160,993
		____________	____________
Net asset value per Ordinary share (pence)	15	487.12	646.31
		____________	____________

  9.  RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS

For the year ended 30 April 2009
			Share		Capital
	Share		premium	Special	redemption	Capital	Revenue
	capital		account	reserve	reserve	reserve	reserve	Total
	£'000		£'000	£'000	£'000	£'000	£'000	£'000
Balance at 30 April 2008	6,347		17,955	11,617	10,207	108,812	6,055	160,993
Return on ordinary activities after taxation	-		-	-	-	(40,770)	2,611	(38,159)
Dividend paid (see note 7)	-		-	-	-	-	(1,495)	(1,495)
	_______		_______	_______	_______	_______	_______	_______
Balance at 30 April 2009	6,347		17,955	11,617	10,207	68,042	7,171	121,339
	_______		_______	_______	_______	_______	_______	_______
For the year ended 30 April 2008
		Share			Capital
	Share	premium		Special	redemption	Capital	Revenue
	capital	account		reserve	reserve	reserve	reserve	Total
	£'000	£'000		£'000	£'000	£'000	£'000	£'000
Balance at 30 April 2007	6,347	17,955		14,138	10,207	85,283	5,412	139,342
Return on ordinary activities after taxation	-	-		-	-	23,529	2,052	25,581
Purchase of own shares	-	-		(2,521)	-	-	-	(2,521)
Dividend paid (see note 7)	-	-		-	-	-	(1,409)	(1,409)
	_______	_______		_______	_______	_______	_______	_______
Balance at 30 April 2008	6,347	17,955		11,617	10,207	108,812	6,055	160,993
	_______	_______		_______	_______	_______	_______	_______
The revenue reserve represents the amount of the Company's reserves distributable by way of dividend. The accompanying notes are an integral part of the financial statements.

  10.  CASH FLOW STATEMENT

		Year ended		Year ended
		30 April 2009		30 April 2008
	Notes	£'000	£'000	£'000	£'000
Net cash inflow from operating activities	16		3,088		2,463
Servicing of finance
Bank and loan interest paid			(299)		(364)
Taxation
Net tax paid			(615)		(564)
Financial investment
Purchases of investments		(17,046)		(15,297)
Sales of investments		13,217		18,968
		________	________	________	________
Net cash (outflow)/inflow from financial investment			(3,829)		3,671
Equity dividend paid			(1,495)		(1,409)
			________		________
Net cash (outflow)/inflow before financing			(3,150)		3,797
Financing
Purchase of own shares			-		(2,521)
Loans drawn down			12,664		2,419
Loans repaid			(10,881)		-
			________		________
Net cash inflow/(outflow) from financing			1,783		(102)
			________		________
(Decrease)/increase in cash	17		(1,367)		3,695
			________		________
Reconciliation of net cash flow to movements in net debt
(Decrease)/increase in cash as above			(1,367)		3,695
Drawdown of loan			(12,664)		(2,419)
Repayment of loan			10,881		-
Exchange movements			(4,031)		(169)
			________		________
Movement in net debt in the year			(7,181)		1,107
Opening net debt			(4,370)		(5,477)
			________		________
Closing net debt	17		(11,551)		(4,370)
			________		________

  11.  NOTES TO THE FINANCIAL STATEMENTS:

1.	Accounting policies
	(a)	Basis of accounting
		The financial statements have been prepared under the historical cost convention, as modified to include the revaluation of investments and in accordance with the applicable UK Accounting Standards and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' (issued in January 2009 and adopted early). The early adoption of the January 2009 SORP had no effect on the financial statements of the Company, other than the requirement to separately disclose capital reserves that relate to the revaluation of investments held at the reporting date. These are disclosed in note 14. This new requirement replaces the previous requirement to disclose the value of the capital reserve that was unrealised. They have also been prepared on the assumption that approval as an investment trust will continue to be granted. The financial statements have been prepared on a going concern basis. The Directors believe this is appropriate for the reasons outlined in the Directors' Report in the Annual Report.
		The financial statements, and the net asset value per share figures, have been prepared in accordance with UK Generally Accepted Accounting Practice ('UK GAAP').
		During the year the Company adopted FRS 29 'Financial Instruments: Disclosures'. This standard primarily concerns the disclosure of financial instruments and risks. These disclosures can be found primarily in note 19.
	(b)	Valuation of investments
		Listed investments have been designated upon initial recognition as fair value through profit or loss. Investments are recognised and de-recognised on the trade date at cost. Subsequent to initial recognition, investments are valued at fair value which for listed investments is deemed to be bid market prices or closing prices for SETS stocks, sourced from the London Stock Exchange. Gains and losses arising from changes in fair value are included as a capital item in the Income Statement and are ultimately recognised in the capital reserve.
	(c)	Income
		Dividends (other than special dividends), including taxes deducted at source, are included in revenue by reference to the date on which the investment is quoted ex-dividend. Special dividends are reviewed on a case-by-case basis and may be credited to capital, if circumstances dictate. Dividends receivable on equity shares where no ex-dividend date is quoted are brought into account when the Company's right to receive payment is established. Fixed returns on non-equity shares are recognised on a time apportioned basis so as to reflect the effective yield on shares. Other returns on non-equity shares are recognised when the right to return is established. The fixed return on a debt security, if material, is recognised on a time apportioned basis so as to reflect the effective yield on each security. Where the Company has elected to receive its dividends in the form of additional shares rather than cash, the amount of the cash dividend is recognised as income. Any excess in the value of the shares received over the amount of the cash dividend is recognised in capital reserves. Interest receivable on bank balances is dealt with on an accruals basis.
	(d)	Expenses
		All expenses are accounted for on an accruals basis. Expenses are charged through the revenue column of the Income Statement except as follows:
		expenses directly relating to the acquisition or disposal of an investment, in which case, they are added to the cost of the investment or deducted from the sale proceeds. Such transaction costs are disclosed in accordance with the SORP. These expenses are charged to the capital column of the Income Statement and are separately identified and disclosed in note 9; and
		the Company charges 50% of investment management fees and finance costs to the capital column of the Income Statement, in accordance with the Board's expected long term return in the form of capital gains and income respectively from the investment portfolio of the Company.
	(e)	Deferred taxation
		Deferred taxation is provided on all timing differences, that have originated but not reversed at the Balance Sheet date, where transactions or events that result in an obligation to pay more or a right to pay less tax in future have occurred at the Balance Sheet date, measured on an undiscounted basis and based on enacted tax rates. This is subject to deferred tax assets only being recognised if it is considered more likely than not that there will be suitable profits from which the future reversal of the underlying timing differences can be deducted. Timing differences are differences arising between the Company's taxable profits and its results as stated in the accounts which are capable of reversal in one or more subsequent periods. Due to the Company's status as an investment trust company, and the intention to continue to meet the conditions required to obtain approval for the foreseeable future, the Company has not provided deferred tax on any capital gains and losses arising on the revaluation or disposal of investments.
	(f)	Capital reserves
		Gains and losses on realisation of investments and changes in fair values of investments which are readily convertible to cash, without accepting adverse terms, are transferred to the capital reserve.
	(g)	Foreign currencies
		Assets and liabilities in foreign currencies are translated at the rates of exchange ruling on the Balance Sheet date. Transactions involving foreign currencies are converted at the rate ruling on the date of the transaction. Gains and losses on the realisation of foreign currencies are recognised in the Income Statement and are then transferred to the realised capital reserve.
	(h)	Dividends payable
		Final dividends are dealt with in the period in which they are paid.

		2009	2008
2.	Income	£'000	£'000
	Income from investments
	UK dividend income	372	255
	Overseas dividends	4,209	3,871
	Scrip dividends	4	3
		___________	___________
		4,585	4,129
		___________	___________
	Other income
	Deposit interest	111	114
	Stock lending income	30	58
	Underwriting commission	8	-
		___________	___________
		149	172
		___________	___________
	Total income	4,734	4,301
		___________	___________

		2009			2008
		Revenue	Capital	Total	Revenue	Capital	Total
3.	Investment management fee	£'000	£'000	£'000	£'000	£'000	£'000
	Investment management fee	507	507	1,014	652	652	1,304
		_______	_______	_______	_______	_______	_______
	The Company has an agreement with Aberdeen Asset Management Asia Limited ('AAM Asia') for the provision of management services.
	During the year the management fee was payable monthly in arrears and was based on an annual amount of 1% of the net asset value of the Company valued monthly. The agreement is terminable on one year's notice. The balance due to AAM Asia at the year end was £158,000 (2008 - £220,000). The Company's investments in Aberdeen Global-India Opportunities Fund, Aberdeen Asian Smaller Companies Investment Trust and New India Investment Trust are excluded from the calculation of the investment management fee. The total value of such commonly managed funds, on a mid basis (basis on which management fee is calculated), at the year end was £20,648,000 (2008 - £24,223,000).

		2009	2008
4.	Administrative expenses	£'000	£'000
	Share Plan marketing contribution	112	105
	Directors' fees	107	119
	Safe custody fees	113	159
	Auditors' remuneration:
	-     Fees payable to the Company's auditor for the audit of the Company's annual accounts	15	13
	-     Fees payable to the Company's auditor and its associates for other services:
	-     Other fees pursuant to legislation	4	5
	Other	182	210
		_________	_________
		533	611
		_________	_________
	The Company has an agreement with Aberdeen Asset Managers Limited ('AAM') for the provision of marketing services in relation to the Company's participation in the Aberdeen Investment Trust Share Plan and ISA. The total fees paid and payable under the agreement were £112,000 (2008 - £105,000) and the sum due to AAM at the year end was £7,000 (2008 - £18,000). No pension contributions were made in respect of any of the Directors. The Company does not have any employees.

		2009			2008
5.	Interest payable and similar charges	Revenue	Capital	Total	Revenue	Capital	Total
		£'000	£'000	£'000	£'000	£'000	£'000
	On bank loans and overdrafts	149	149	298	189	189	378

			2009			2008
			Revenue	Capital	Total	Revenue		Capital	Total
6.	Tax on ordinary activities		£'000	£'000	£'000	£'000		£'000	£'000
	(a)	Analysis of charge for the year
		Corporation tax	838	(184)	654	787		(251)	536
		Overseas taxation	158	-	158	189		-	189
		Relief for overseas taxation	(112)	-	(112)	(164)		-	(164)
			_______	______	______	______		______	______
		Current taxation	884	(184)	700	812		(251)	561
		Deferred taxation	50	-	50	(15)		-	(15)
			_______	______	______	______		______	______
		Total tax	934	(184)	750	797		(251)	546
			_______	______	______	______		______	______
	(b)	Factors affecting current tax charge for the year  The tax assessed for the year is lower than the standard rate of corporation tax in the UK.
								2009	2008
								£'000	£'000
		Return on ordinary activities before taxation						(37,409)	26,127
								______	______
							2009		2008
							£'000		£'000
		Return on ordinary activities multiplied by standard rate of corporation tax in the UK of 28% (2008 - 29.83%)					(10,475)		7,794
		Effects of:
		UK dividend income					(104)		(76)
		Losses/(gains) on investments not taxable					10,155		(7,245)
		Currency losses not taxable					1,129		50
		Overseas tax charge					158		189
		Relief for overseas taxation					(112)		(164)
		Deferred tax					(50)		14
		Scrip dividend receipts not chargeable to corporation tax					(1)		(1)
							______		______
		Current tax charge for the year					700		561
							______		______
		The taxation charge for the year ended 30 April 2008 was calculated at an effective annual tax rate of 29.83%. This was above the corporation tax rate of 28% due to the change in the corporation tax rate from 30% to 28% on 31 March 2008.

		2009	2008
7.	Dividends	£'000	£'000
	Amounts recognised as distributions to equity holders in the period:
	Final dividend for 2008 - 6.00p (2007 - 5.55p)	1,495	1,409
		______	______
	The proposed final dividend for 2009 is subject to approval by Shareholders at the Annual General Meeting and has not been included as a liability in these financial statements.
	The table below sets out the final dividend proposed in respect of the financial year, which is the basis on which the requirements of Section 842 of the Income and Corporation Taxes Act 1988 are considered. The revenue available for distribution by way of dividend for the year is £2,611,000 (2008 - £2,052,000).
		2009	2008
		£'000	£'000
	Proposed final dividend for 2009 - 8.00p (2008 - 6.00p)	1,993	1,495

		2009		2008
8.	Return per Ordinary share	£'000	p	£'000	p
	Revenue return	2,611	10.48	2,052	8.14
	Capital return	(40,770)	(163.67)	23,529	93.37
		________	________	________	________
	Total return	(38,159)	(153.19)	25,581	101.51
		________	________	________	________
	Weighted average number of Ordinary shares in issue{A}		24,909,402		25,200,610
			_________		_________
	{A} Calculated excluding shares held in treasury.

				Listed	Unlisted	Listed
				overseas	overseas	in UK	Total
9.	Investments			£'000	£'000	£'000	£'000
	Fair value through profit or loss:
	Opening book cost			75,251	611	6,639	82,501
	Opening fair value gains/(losses) on investments held			74,540	(176)	8,347	82,711
				________	________	________	________
	Opening valuation			149,791	435	14,986	165,212
	Movements in the year:
	Purchases at cost			11,247	-	5,803	17,050
	Sales	-	proceeds	(13,391)	-	(80)	(13,471)
		-	realised gains on sales	2,729	-	49	2,778
	Current year fair value (losses)/gains on investments held			(32,997)	332	(6,380)	(39,045)
				________	________	________	________
	Closing valuation			117,379	767	14,378	132,524
				________	________	________	________
	Closing book cost			75,836	611	12,411	88,858
	Closing fair value gains on investments held			41,543	156	1,967	43,666
				________	________	________	________
				117,379	767	14,378	132,524
				________	________	________	________
						2009	2008
						£'000	£'000
	Investments listed on a recognised investment exchange					131,757	164,777
	Investments not listed on a recognised investment exchange					767	435
						________	________
						132,524	165,212
						________	________
						2009	2008
	(Losses)/gains on investments held at fair value through profit or loss					£'000	£'000
	Realised gains on sales					2,778	11,222
	(Decrease)/increase in fair value gains on investments held					(39,045)	13,066
						________	________
						(36,267)	24,288
						________	________
	Transaction cost
	During the year expenses were incurred in acquiring or disposing of investments classified as fair value through profit or loss. These have been expensed through capital and are included within gains on investments held at fair value through profit or loss in the Income Statement. The total costs were as follows:
						2009	2008
						£'000	£'000
	Purchases					63	40
	Sales					46	31
						________	________
						109	71
						________	________
						2009	2008
	Stock lending details					£'000	£'000
	Aggregate value of securities on loan at the year end					-	27,764
	Maximum aggregate value of securities on loan during the year					46,836	49,468
	Fee income (gross) from stock lending during the year					30	58
						________	________
	All stocks lent under these arrangements were fully secured against collateral. The value of the collateral held at 30 April 2009 was £nil (2008 - £29,152,000 which comprised corporate bonds). Stock lending arrangements were suspended during the year due to the severe dislocation in the market and inherent counterparty risks.

		2009	2008
10.	Loans and receivables	£'000	£'000
	Prepayments and accrued income	828	789
	Amounts due from brokers	254	-
	Other loans and receivables	3	8
		________	________
		1,085	797
		________	________

			2009	2008
11.	Creditors: amounts falling due within one year		£'000	£'000
	(a)	Foreign currency loans	15,273	9,723
			________	________
		At the year end HK$175,400,000 (2008 - HK$150,100,000), equivalent to £15,273,000 (2008 - £9,723,000), was drawn down from the £20,000,000 facility with The Royal Bank of Scotland at an interest rate of 1.17%. Subsequent to the year end HK$141,000,000 was rolled over to 3 August 2009 at an interest rate of 0.90%. The terms of the bank loan with The Royal Bank of Scotland state that the ratio of gross borrowings to adjusted assets must be less than 25% at all times (adjusted assets are total gross assets less (i) the value in excess of 10% of total gross assets invested in the largest single security or asset; and (ii) the value in excess of 60% of total gross assets invested in the top twenty largest investments; and (iii) the value of all unlisted investments). The Company has met this covenant throughout the period and up to the date of this Report.
			2009	2008
	(b)	Other	£'000	£'000
		Tax payable	261	157
		Other creditors	272	353
			________	________
			533	510
			________	________

		Deferred
		taxation on
		accrued income
12.	Provision for liabilities and charges	£'000
	At 1 May 2008	136
	Movement in year	50
		________
	At 30 April 2009	186
		________

		2009	2008
13.	Called-up share capital	£'000	£'000
	Authorised:
	71,150,100 (2008 - 75,150,100) Ordinary shares of 25p shares	17,788	17,788
		________	________
	Allotted, called up and fully paid:
	24,909,402 (2008 - 24,909,402) Ordinary shares of 25p each	6,227	6,227
	Held in treasury:
	477,731 (2008 - 477,731) Ordinary shares of 25p each	120	120
		________	________
		6,347	6,347
		________	________
	Shares held in treasury represent 1.88% of the Company's total issued share capital at 30 April 2009.
	Further details of the share repurchases are contained in the Directors' Report.
	The investment objective of the Company is to provide Shareholders with a high level of capital growth through equity investment in the Asia Pacific countries ex Japan.
	The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the return to Shareholders through the optimisation of the debt and equity balance.
	The Board monitors and reviews the broad structure of the Company's capital on an ongoing basis. This review includes:
	- the planned level of gearing which takes account of the Investment Manager's views on the market;
	- the level of equity shares in issue; and,
	- the extent to which revenue in excess of that which is required to be distributed should be retained.
	The Company's objectives, policies and processes for managing capital are unchanged from the preceding accounting period.
	The Company does not have any externally imposed capital requirements.

		2009	2008
14.	Capital reserve	£'000	£'000
	At 1 May	108,812	85,283
	Movement in fair value gains	(36,267)	24,288
	Foreign exchange movement	(4,031)	(169)
	Expenses taken to capital	(472)	(590)
		________	________
	At 30 April	68,042	108,812
		________	________
	The capital reserve includes investment holding gains amounting to £43,666,000 (2008 - £82,711,000), as disclosed in note 9.

15.	Net asset value per share
	The net asset value per share and the net asset values attributable to Ordinary Shareholders at the year end calculated in accordance with the Articles of Association were as follows:
		2009	2008
	Net assets attributable (£'000)	121,339	160,993
	Number of Ordinary shares in issue (excluding shares held in treasury)	24,909,402	24,909,402
	Net asset value per share (p)	487.12	646.31

16.	Reconciliation of net return on ordinary activities before finance	2009	2008
	costs and taxation to net cash inflow from operating activities	£'000	£'000
	Net return on ordinary activities before finance costs and taxation	(37,111)	26,505
	Adjustment for:
	Losses/(gains) on investments held at fair value through profit or loss	36,267	(24,288)
	Exchange losses charged to capital	4,031	169
	(Increase)/decrease in accrued income	(34)	62
	Decrease in other debtors	18	23
	Decrease in other creditors	(79)	(5)
	Scrip dividends included in investment income	(4)	(3)
		________	________
	Net cash inflow from operating activities	3,088	2,463
		________	________

		1 May	Cash	Exchange	30 April
		2008	flow	movements	2009
17.	Analysis of changes in net debt	£'000	£'000	£'000	£'000
	Cash at bank	5,353	(1,367)	(264)	3,722
	Debts falling due within one year	(9,723)	(1,783)	(3,767)	(15,273)
		________	________	________	________
	Net debt	(4,370)	(3,150)	(4,031)	(11,551)
		________	________	________	________

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

19.	Financial instruments
	Risk management
	The Company's financial instruments comprise securities and other investments, cash balances, loans and debtors and creditors that arise directly from its operations; for example, in respect of sales and purchases awaiting settlement, and debtors for accrued income.
	The Manager has a dedicated investment management process, which ensures that the investment policy explained in the Annual Report is followed. Stock selection procedures are in place based on the active portfolio management and identification of stocks. The portfolio is reviewed on a periodic basis by a Senior Investment Manager and also by the Manager's Investment Committee.
	The Company's Manager has an independent investment risk department for reviewing the investment risk parameters of the Company's portfolio on a regular basis. The department reports to the Manager's performance review committee which is chaired by the Manager's chief investment officer. The department's responsibility is to review and monitor ex-ante (predicted) portfolio risk and style characteristics using best practice, industry standard multi-factor models.
	Additionally, the Manager's Compliance department continually monitors the Company's investment and borrowing powers and reports to the Manager's risk management committee.
	The main financial risks that the Company faces from its financial instruments are market price risk (comprising interest rate risk, currency risk and other price risk), liquidity risk and credit risk.
	The Board regularly reviews and agrees policies for managing each of these risks. The Manager's policies for managing these risks are summarised below and have been applied throughout the year. The numerical disclosures exclude short-term debtors and creditors.
	Market price risk
	The fair value of, or future cash flows from a financial instrument held by the Company may fluctuate because of changes in market prices. This market risk comprises three elements - interest rate risk, foreign currency risk and other price risk.
	Interest rate risk
	Interest rate movements may affect:
	-	the level of income receivable on cash deposits; and,
	-	interest payable on the Company's variable rate borrowings.
	The possible effects on fair value and cash flows that could arise as a result of changes in interest rates are taken into account when making investment and borrowing decisions.
	Interest risk profile
	The interest rate risk profile of the portfolio of the Company's financial assets and liabilities, excluding equity holdings which are all non-interest bearing, at the Balance Sheet date was as follows:

		Weighted average	Weighted
		period for which	average	Fixed	Floating
		rate is fixed	interest rate	rate	rate
	At 30 April 2009	Years	%	£'000	£'000
	Assets
	Hong Kong Dollar	-	-	-	3,011
	Sterling	-	0.31	-	668
	Sri Lankan Rupee	-	-	-	26
	Taiwan Dollar	-	-	-	16
	Korean Won	-	-	-	1
		_________	_________	_________	_________
		n/a	n/a	-	3,722
		_________	_________	_________	_________
	Liabilities
	Bank loan - HK Dollar	0.09	1.17	(15,273)	-
		_________	_________	_________	_________
		Weighted average	Weighted
		period for which	average	Fixed	Floating
		rate is fixed	interest rate	rate	rate
	At 30 April 2008	Years	%	£'000	£'000
	Assets
	Sterling	-	4.99	-	3,739
	Taiwan Dollar	-	-	-	1,583
	Australian Dollar	-	0.75	-	30
	Hong Kong Dollar	-	0.10	-	1
		_________	_________	_________	_________
		n/a	n/a	-	5,353
		_________	_________	_________	_________
	Liabilities
	Bank loan - HK Dollar	0.45	2.60	(9,273)	-
		_________	_________	_________	_________

	The weighted average interest rate is based on the current yield of each asset, weighted by its market value. The weighted average interest rate on bank loans is based on the interest rate payable, weighted by the total value of the loans. The maturity date of the Company's loan is shown in note 11.
	The floating rate assets consist of cash deposits on call earning interest at prevailing market rates.
	The Company's equity portfolio and short-term debtors and creditors (excluding bank loans) have been excluded from the above tables.
	Interest rate sensitivity
	Movements in interest rates would not significantly affect net assets attributable to the Company's Shareholders and total profit.
	Foreign currency risk
	All of the Company's investment portfolio is invested in overseas securities and the Balance Sheet, therefore, can be significantly affected by movements in foreign exchange rates. It is not the Company's policy to hedge this risk on a continuing basis but the Company may, from time to time, match specific overseas investment with foreign currency borrowings. The Company's borrowings, as detailed in note 11, are also in foreign currency.
	The revenue account is subject to currency fluctuation arising on dividends paid in foreign currencies. The Company does not hedge this currency risk.
	Foreign currency risk exposure by currency of denomination:

		30 April 2009					30 April 2008
			Net		Total				Net		Total
		Overseas	monetary		currency		Overseas		monetary		currency
		investments	assets		exposure		investments		assets		exposure
		£'000	£'000		£'000		£'000		£'000		£'000
Australian Dollar		4,839	-		4,839		7,519		30		7,549
Hong Kong Dollar		25,986	(12,008)		13,978		29,051		(9,722)		19,329
Indonesian Rupiah		3,241	-		3,241		3,358		-		3,358
Korean Won		8,278	1		8,279		18,322		-		18,322
Malaysian Ringgit		5,700	-		5,700		6,153		-		6,153
Pakistan Rupee		378	-		378		881		-		881
Philippine Peso		2,857	-		2,857		3,161		-		3,161
Singapore Dollar		28,185	-		28,185		32,875		-		32,875
Sri Lankan Rupee		1,574	26		1,600		2,100		-		2,100
Sterling		31,303	668		31,971		36,470		3,739		40,209
Taiwanese Dollar		6,562	16		6,578		11,060		1,583		12,643
Thailand Baht		6,048	-		6,048		7,470		-		7,470
US Dollar		7,573	-		7,573		6,792		-		6,792
		________	________		________		________		________		________
Total		132,524	(11,297)		121,227		165,212		(4,370)		160,842
		________	________		________		________		________		________
Foreign currency sensitivity
There is no sensitivity analysis included as the Company's significant foreign currency financial instruments are in the form of equity investments, which have been included within the other price risk sensitivity analysis so as to show the overall level of exposure.
Other price risk
Other price risks (ie changes in market prices other than those arising from interest rate or currency risk) may affect the value of the quoted investments.
It is the Board's policy to hold an appropriate spread of investments in the portfolio in order to reduce the risk arising from factors specific to a particular country or sector. Both the allocation of assets and the stock selection process, as detailed in the Annual Report, act to reduce market risk. The Manager actively monitors market prices throughout the year and reports to the Board, which meets regularly in order to review investment strategy. The investments held by the Company are listed on various stock exchanges worldwide.
Other price risk sensitivity
If market prices at the Balance Sheet date had been 10% higher or lower while all other variables remained constant, the return attributable to Ordinary Shareholders for the year ended 30 April 2009 would have increased/(decreased) by £13,252,000 (2008 increased/(decreased) by £16,521,000) and equity reserves would have increased/(decreased) by the same amount.
Liquidity risk
This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities.
The Board imposes borrowing limits to ensure gearing levels are appropriate to market conditions and reviews these on a regular basis. Borrowings comprise a revolving multi-currency credit facility. The Board has imposed a maximum gearing level, measured on the most stringent basis of calculation after netting off cash equivalents, of 25%. Details of borrowings at 30 April 2009 are shown in note 11.
Liquidity risk is not considered to be significant as the Company's assets comprise mainly readily realisable securities, which can be sold to meet funding commitments if necessary. Short-term flexibility is achieved through the use of the loan facility, details of which can be found in note 11. Under the terms of the loan facility, the Manager provides the lender with loan covenant reports on a monthly basis, to provide the lender with assurance that the terms of the facility are not being breached. The Manager will also review the credit rating of a lender on a regular basis. Details of the Board's policy on gearing are shown in the interest rate risk section of this note.
Liquidity risk exposure
At 30 April 2009 and 30 April 2008 the Company's bank loan, amounting to £15,273,000 and £9,723,000, were due for repayment or roll-over within 1 month and five months respectively.
Credit risk
This is the risk of failure of the counterparty to a transaction to discharge its obligations under that transaction that could result in the Company suffering a loss.
The risk is not considered to be significant, and is actively managed as follows:
-	investment transactions are carried out with a large number of brokers, whose credit-standing is reviewed periodically by the Investment Manager, and limits are set on the amount that may be due from any one broker;
-	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 monthly basis. In addition, the Custodian carries out a stock reconciliation to third party administrators' records on a monthly basis to ensure discrepancies are picked up 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. This review will also include checks on the maintenance and security of investments held; and,
-	cash is held only with reputable banks with high quality external credit enhancements.
The risk of counterparty exposure due to stock lending (as detailed in note 9) is mitigated by the review of collateral positions provided daily by the various counterparties involved.
Credit risk exposure
In summary, compared to the amounts in the Balance Sheet, the maximum exposure to credit risk at 30 April was as follows:
				2009				2008
				Balance		Maximum		Balance		Maximum
				Sheet		exposure		Sheet		exposure
				£'000		£'000		£'000		£'000
Non-current assets
Investments at fair value through profit or loss				132,524		132,524		165,212		165,212
Current assets
Loans and receivables				1,085		1,085		797		797
Cash at bank and in hand				3,722		3,722		5,353		5,353
				_________		_________		_________		_________
				137,331		137,331		171,362		171,362
				_________		_________		_________		_________
None of the Company's financial assets is past due or impaired.
Fair values of financial assets and financial liabilities
For the HK$ loan, the fair value of borrowings has been calculated at £15,283,000 as at 30 April 2009 (2008 - £9,748,000) compared to an accounts value in the financial statements of £15,273,000 (2008 - £9,723,000) (note 11). The fair value of each loan is determined by aggregating the expected future cash flows for that loan discounted at a rate comprising the borrower's margin plus an average of market rates applicable to loans of a similar period of time and currency. All other assets and liabilities of the Company are included in the Balance Sheet at fair value.

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.

The Annual Financial Report Announcement is not the Company's statutory accounts. The above results for the year ended 30 April 2009 have been agreed with the auditors and are an abridged version of the Company's full accounts, which have been approved and audited with an unqualified report. The 2008 and 2009 statutory accounts received unqualified reports from the Company's auditors and did not include any reference to matters to which the auditors drew attention by way of emphasis without qualifying the reports, and did not contain a statement under s.498(2) or 498(3) of the Companies Act 2006. The financial information for 2008 is derived from the statutory accounts for 2008 which have been delivered to the Registrar of Companies. The 2009 accounts will be filed with the Registrar of Companies in due course.

The Annual General Meeting of the Company will be held at 12.30 p.m. on 26 August 2009 at One Bow Churchyard, Cheapside, London EC4M 9HH.

The audited Annual Report and Accounts will be posted to shareholders shortly. Copies may be obtained during normal business hours from the Company's Registered Office, One Bow Churchyard, Cheapside, London EC4M 9HH or from the Company's website, www.newdawn-trust.co.uk

By order of the Board

Aberdeen Asset Management PLC - Secretary

14 July 2009

 

END

 

 

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