Annual Financial Report

RNS Number : 9154O

Aberdeen New Dawn Invest Trust PLC

06 July 2010

 



ABERDEEN NEW DAWN INVESTMENT TRUST PLC

ANNUAL FINANCIAL REPORT

for the year ended 30 April 2010

1.  CHAIRMAN'S STATEMENT

Background

During the year to 30 April 2010, your Company's net asset value rose by 68.7% to 810.8p, while its share price appreciated 66.4% to 723.5p (both on a total return basis). The benchmark MSCI AC Asia Pacific ex-Japan Index, by comparison, advanced 50.9%. The gains more than made up for the losses recorded during the previous year, with the share price 18.7% above its 2008 all-time high at the time of writing.

The exceptional performance relative to the benchmark was attributable to both stock selection and country allocation. In other words, not only did the Company's investments outperform their respective country indices, but the portfolio was also more heavily weighted towards those markets which performed better. For example, in Thailand, where your Company was overweight relative to the benchmark throughout the period under review, our holdings outperformed the Thai index by 26%, which in turn outpaced the regional index by 17%. The Company's borrowings (net gearing of 3.5% as at 30 April 2010) also enhanced the Company's net asset value, given the strong rise in markets.

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 10p, an increase of 25% on last year's level. If approved by shareholders at the Annual General Meeting, the final dividend will be paid on 27 August 2010 to Ordinary shareholders on the register on 6 August 2010. 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 staged a remarkable rebound over the year, as low interest rates, quantitative easing and loose fiscal policy helped the world economy avoid a repeat of the Great Depression. Asian countries came out of recession one by one, though it should be noted that some never saw their economies contract. However, the sustainability of the recovery remains questionable. In the West, final private demand is still weak and, if governments there are forced to raise taxes to address huge deficits, economies could relapse. In Asia, recovery looks sounder, with both private consumption and investment generally rising at a decent pace. It seems that Asia has been able to grow quickly, even in the absence of a convincing recovery in developed economies.

Nevertheless, the gains belied the global debt imbalances that had first caused markets to crash in the previous year. Fresh fears over credit defaults soon emerged outside the US and Western Europe. Debt problems in Dubai and, more recently, in Greece and the peripheral European economies sparked brief periods of panic selling during the period, underlining how large parts of the global economy were still far from a real recovery. Gains achieved thus far may in due course prove illusory, at least for weaker developed markets.

In Asia, the pace of growth has been positive if a little uneven. India, China and Indonesia skirted the recession and grew unabated, partly supported by large domestic populations in the early stages of development. Elsewhere, major export-focused countries, such as Singapore, Korea and Taiwan, started expanding again, but only after navigating through severe contractions. Inflationary pressures, largely benign at first, became more pronounced in the latter six months, prompting policymakers in certain countries to start tightening credit. China, Singapore and Hong Kong also acted to contain their frothing property markets.

Your Company's holdings performed well during the past year, with many, thanks to strong balance sheets, able to take advantage of the crisis. Your Manager's investment strategy of selecting holdings on the basis of strong financial positions, experienced management, sound business models and long-term growth prospects has not changed. The outperformance has served to highlight the judiciousness of this bottom-up approach.

Country allocations result from stock choices. In this respect, the Company remains overweight to Singapore and India. It is your Manager's view that Singapore is the best-managed economy in Asia and thus offers a good selection of well-run companies that derive a large part of their business from regional growth. Many companies are widely considered among the best in their class, Singapore Airlines being a good example. India's growth, meanwhile, was buttressed by accommodative government policy and a strong domestic-focused economy. At the corporate level, the country continues to offer well-managed companies in a wide range of industries that are shareholder friendly and with proven track records.

In the case of China, where we are underweight, your Manager continues to favour Hong Kong entities, as they offer exposure to the mainland while providing the comfort of having longer track records; in some cases well over 100 years. It should be noted that since the early 1990s, the MSCI China Index has fallen by 40% despite the mainland's nominal GDP having risen around ten times. India's economy, on the other hand, may have expanded only fivefold, but its stockmarket has kept pace, rising around six times. This demonstrates how strong economic growth does not always translate into good investment returns.

Gearing

During February 2010, the Company repaid HKD 12.5m of its £20m multi-currency credit facility negotiated with the Royal Bank of Scotland.  At the year-end [and at the time of writing], a total of HKD128.5m remains drawn (representing approximately £10.8m) 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.

Annual General Meeting

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

The law in relation to companies has undergone a number of changes following the introduction of new legislation in the UK under the Companies Act 2006. The changes have been implemented in stages, and the final parts were implemented in October 2009. A special resolution will be proposed at the AGM to update the Articles of Association in order to reflect the latest provisions of the Act.

The AGM of the Company will be held on Wednesday 25 August 2010 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.

Board

Following a comprehensive search process undertaken by a firm of headhunters on the Board's behalf, Nicholas George and John Lorimer were appointed to the Board on 1 January 2010.

Nicholas is a chartered accountant and had held a number of directorships within the financial services sector before co-founding an Asian fund of alternative funds. Currently, he is a director of LGT Capital Partners (UK) Limited, a leading alternative investment manager.

John had been group head of finance and latterly group head of compliance and regulatory risk for Standard Chartered Bank until he retired in 2009. He has a degree in accounting and management, and over 22 years of commercial banking experience.

Both Nicholas and John will be standing for election at the Annual General Meeting.

Richard Bradley, chairman of the Nomination Committee, will be retiring from the Board at the conclusion of the AGM on 25 August 2010, having served as a Director of the Company for 11 years. I should like to thank Richard for his considerable contribution to the Company over that period, and to wish him well for the future. He will be succeeded in his role as Chairman of the Nomination Committee by Nicholas George.

Outlook

Despite the past year's rebound, sentiment in global markets remains shaky. The debt repayment difficulties in Greece and other Eurozone countries have underscored the threat of a systemic sovereign credit crisis in the Western world, and have shown that the developed economies of Europe and the US may not be able to recover as quickly as was earlier hoped. In Europe, divergent official views on how best to resolve the debt problems and rising public anger over enforced austerity measures could aggravate the already precarious political climate. 

In Asia, a growing impetus to normalise monetary conditions in order to curb rising inflation should be welcomed as a sign of sensible policy, though this may, in the short term, hold back stockmarkets. In addition, a gradual revaluation of the renminbi should be expected at some point, the outcome of which is likely to alter the dynamics of global trade. Exogenous factors have also surfaced. The political standoff between the two Koreas, as well as the bloody anti-government protests in Thailand, the worst in the country's recent history and which brought the domestic market to a temporary standstill, serve to highlight how sensitive the region remains to short-term shocks. On the subject of Thailand, you Manager is sanguine. Your Company's investments there are in segments of the economy which were unaffected by the recent protests, namely, the export sector. Indeed, should the renminbi begin to appreciate at some point, as is widely anticipated, the relative competitiveness of Thailand's exporters will be further enhanced.

Longer term, however, Asia remains attractive, with potential for high, sustainable growth. The region's finances were strengthened following the financial crisis of the late 1990s, and now provide a good foundation on which to build. Corporate, public and personal debt levels are low, precisely what is required for solid growth in final private demand. The region is still in the early stages of development, and its population is around five times larger than that of the US and Eurozone combined. All this has helped Asia build up intra-regional trade as dependence on Western demand lessens. This backdrop, together with your Manager's strategy of investing in holdings with strong balance sheets, proven management and sound businesses, will ensure the Company stays in good shape to weather any short-term headwinds.

Alan Henderson

Chairman

6 July 2010

2.  MANAGER'S REVIEW

Asian stockmarkets rose strongly during the year under review, driven by stimulatory monetary and fiscal policy globally, as well as the realisation that Asian economies were in better shape than their Western counterparts and would thus recover more quickly. Greater China markets (Taiwan, Hong Kong and China) lagged as fears grew of overheating in the mainland's economy, while the large domestically-driven economies of India and Indonesia saw their stock markets surge ahead.

On the economic front, these less export-dependent nations, along with China performed best. Indeed these countries at no point entered recession. The more export-oriented economies that had contracted rapidly in the first half of the review period, such as Singapore, Korea and Taiwan, emerged from recession just as quickly, helped by growing intra-regional trade. By the end of 2009, the International Monetary Fund upgraded its growth forecasts for Asia, predicting that the region would lead the recovery.

However, the strong economic growth in Asia, combined with loose monetary conditions designed to keep exchange rates competitive, has resulted in rising inflation. Australia's central bank was among the more hawkish, raising its policy rate from 3.5% to 4.5%. However, the move was not so much a tightening as it was a normalisation of conditions, after a period of unusually low rates. Other central banks also started to tighten as price pressures built. Some raised rates, some increased banks' reserve requirement ratio, and some used more direct measures such as those employed by China, Hong Kong and Singapore to cool their property markets.

Towards the end of the review period, market sentiment began to waver as investors worried about the impact of China's cooling measures on the rest of Asia, as well as possible contagion of sovereign debt risk in Europe.

Portfolio Review

The portfolio's net asset value outperformed its benchmark during the review period, rising 68.7% in sterling terms compared with the benchmark's gain of 50.9%. The Company's gearing boosted performance, as the additional funds borrowed reaped high returns from both the strong markets and the strength of Asian currencies relative to sterling.

India and Singapore, where the portfolio is heavy relative to benchmark, were the largest contributors to overall performance, along with Sri Lanka, in which the portfolio holds a non-benchmark exposure.

The Indian economy navigated its way through the global crisis without being impacted significantly. This was largely because the country's export dependency is low and, where it does export, the focus is in less cyclical areas such as pharmaceuticals and IT maintenance services. Indeed, the reason for the overweight position is that India is a rich hunting ground for strong, well-managed companies in steady-growth industries. Many of these well-run companies can be found within our holding in the Aberdeen Global - Indian Equity Fund, which was a big contributor to performance. The fund's core holdings include companies such as Housing Development Finance Corporation and ICICI Bank, which outperformed the country benchmark on expectations of healthy loan growth and improving asset quality.

In contrast, Singapore's reliance on exports caused its economy to be one of the worst hit early in the period, yet the subsequent rebound saw many of the country's companies bounce back very strongly. We feel very comfortable with a heavy position in Singapore as its economy is particularly soundly managed. It is also home to some of the best companies in Asia, with superb management, excellent levels of transparency, and businesses with regional and in some cases global scope. Prime examples include our bank holdings, United Overseas Bank (UOB) and Oversea-Chinese Banking Corporation (OCBC). In their results for the first quarter of 2010, lower provisions boosted both UOB, which also benefited from the sale of its life assurance business, as well as OCBC, which posted the best loan growth among its domestic peers. We also view the latter's acquisition of ING Group's Asian private banking arm positively, as it will more than triple its wealth management assets.

The Sri Lankan market was the region's best performer, posting a triple-digit return on the back of hopes that the end of the 25-year-long civil war would usher in a new era of stability. We have a non-benchmark exposure to the market through holdings such as Aitken Spence, DFCC Bank and Keells (John) Holdings and view the market rise as a re-rating towards fair value, having been depressed for so long by political strife.

Meanwhile, China, where we have consistently maintained an underweight position, also contributed to relative performance as the market underperformed the region. Having rebounded before others in late 2008, sentiment towards the mainland market began to sour in the third quarter of 2009, even as most other markets continued to rise. It was feared the government would at some point have to cool the hot property market - no doubt impacting share prices - which had resulted from the earlier bank lending binge. Although the country appears interesting from a top-down perspective, the positive macroeconomic environment is not always reflected in companies' profits. As such, we will continue to prefer to gain exposure to China via well-established Hong Kong entities that do business in China. In addition, many of the companies elsewhere within the portfolio have varying degrees of business exposure to China, either using China as a production base or, in the case of Rio Tinto and BHP Billiton, being key suppliers of resources to fuel China's growth.

Other notable contributors to performance at the stock level include Thailand's Siam Cement, a beneficiary of stimulus-led demand for cement and the strong cyclical recovery in its petrochemicals business, and property developer Ayala Land in the Philippines, which did well on the back of the economic recovery and expectations of continued low interest rates.

On the flip side, Australia hurt relative performance, albeit, in a large part, due to the sharp appreciation of its currency. Our underweight position there reflects our view that, vis-à-vis the rest of Asia, the country's mature economy has limited long-term upside. This is a key reason for not holding Australian lenders, whose capital ratios are weaker than those of their counterparts elsewhere in Asia. But this lack of exposure to major local banks such as Westpac Corporation, ANZ Bank and Commonwealth Bank of Australia proved costly, temporarily we believe. During the period under review, they outperformed their financial sector peers, as well as the broader market, which itself posted better returns than the regional benchmark. We believe strongly that there are better alternatives elsewhere in the region, such as the aforementioned Singapore banks, as well as Standard Chartered, with its Asian- and emerging market-focused business. The UK-domiciled lender has emerged from the credit crisis in excellent shape, having in fact strengthened its market position over the last two years at the expense of weaker rivals. This performance was clearly indicated by its record 2009 profits.

Our holding in QBE Insurance Group also hurt relative performance. The Australian insurer posted full-year profits that fell short of expectations and revealed a less-than-rosy outlook, forecasting difficult conditions in the current year. Yet, we remain comfortable with our holding because it is one of the country's leading general insurance and reinsurance companies, with a geographically diversified business. Furthermore, it boasts an excellent long-term track record of generating good shareholder returns.

In portfolio activity, we introduced Australian diversified miner BHP Billiton, whose London-listed shares trade at a discount to its domestic listing. The company's most recent results were encouraging and underscored its solid balance sheet, diversified resource base and low operating costs. We also initiated a holding in Woolworths, a leading Australian supermarket operator. Its management has a successful track record and plans to continue to transform the business.

Against this, we divested Hong Kong Exchanges and Clearing after a strong run-up in its share price, as well as Pos Malaysia and Hong Kong fashion retailer Giordano, two long-term holdings that had not lived up to expectations. We also sold Singapore-listed conglomerate Fraser & Neave after the much-anticipated rationalisation of its businesses failed to materialise, and exited Indonesia's Multi-Bintang, when a transfer in ownership resulted in the company making a generous mandatory offer that we happily accepted.

Outlook

Looking ahead, investors have been shaken by fears that Europe's sovereign debt problems may possibly trigger a relapse in the global economy. In Asia, there are worries that China's moves to cool its property market may dampen the broader economy and thus other countries in the region. Furthermore, political instability has been exacerbated by the escalating row between the two Koreas. As such, market volatility has spiked, accompanied by near-record outflows in May of foreign funds from the region.

Over the short term, we remain cautious as rising input prices, in combination with stagnating top line growth, threaten to hurt profits. There is also uncertainty about the sustainability of the global recovery once stimulus measures are removed, whether by choice or otherwise. Adding to the uncertainty was China's move to de-peg its currency from the US dollar in June. Though the move is broadly positive, the extent to which the renminbi will be allowed to appreciate, or, indeed, whether it will appreciate at all, remains to be seen, particularly given recent signs of slowdown in the economy. For the rest of Asia, policymakers will likely provide more leeway for their currencies to appreciate, an indication of growing confidence in the region's prospects. Additionally, Asia's strong fiscal position allows governments more flexibility policy-wise, while rising intra-regional trade and domestic consumption should continue to drive growth, even if developed economies remain weak.

Aberdeen Asset Management Asia Limited

6 July 2010

3.  BUSINESS REVIEW

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

Investment Objective 

The investment objective of the Company is to provide shareholders with a high level of capital growth through equity investment in the Asia Pacific countries ex Japan.

Benchmark

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

Investment Policy

The Company's assets are invested in a diversified portfolio of securities in quoted companies spread across a range of industries and economies in the Asia Pacific region excluding Japan. Investments may also be made through collective investment schemes and in companies traded on stock markets outside the Asia Pacific investment region provided that over 75 per cent. of their consolidated revenue is earned from trading in the investment region or they hold more than 75 per cent. of their consolidated net assets in the Asia Pacific investment region.

The Board is responsible for determining the gearing strategy for the Company. Gearing is used selectively to leverage the Company's portfolio in order to enhance returns where and to the extent this is considered appropriate to do so. At the year end there was potential gearing of 5 per cent. which compares with a current maximum limit set by the Board of 25 per cent. Borrowings are short term and particular care is taken to ensure that any bank covenants permit maximum flexibility of investment policy.

In addition, it is the investment policy of the Company to invest no more than 15 per cent. of its gross assets in other listed investment companies (including listed investment trusts). As at 30 April 2010, 3.06 per cent. of the Company's portfolio was invested in investment trust companies.

Capital Structure

At 30 April 2010 the Company had a capital structure comprising 24,909,402 Ordinary shares of 25p (with a further 477,731 shares being held in treasury at that date). The Company also had bank borrowings of £10.8 million which rank for repayment ahead of any capital return to shareholders.

Total Assets and Net Asset Value

The Company had total assets of £212.8 million and a net asset value of 810.81 pence per Ordinary share at 30 April 2010.

Duration

The Company does not have a fixed life. However, under the Articles of Association, if in the 12 weeks preceding the Company's financial year end (30 April) the Ordinary shares have been trading, on average, at a discount in excess of 15% to the underlying net asset value over the same period, notice will be given of a special resolution to be proposed at the following Annual General Meeting that the Company be put into voluntary liquidation. In the 12 weeks to 30 April 2010 the average discount to underlying net asset value of the Ordinary shares was 8.3%, therefore no special resolution will be put to the Company's shareholders.

Risk

Investment in Far East securities 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.

-       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. At the year end the Company's borrowings were entirely in Hong Kong dollars.  At the same point the value of the Company's investments priced in Hong Kong dollars exceeded the value of the borrowings, thereby creating a natural hedge against currency fluctuations of the borrowings.

-       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.

Internal Control

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

4.  STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors are responsible for preparing the Annual Report and 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.

For Aberdeen New Dawn Investment Trust PLC

Alan Henderson

Chairman

6 July 2010

5.  RESULTS

Highlights

	30 April 2010	30 April 2009	% change
Total assets (see definition on page 52)	£212,782,000	£136,798,000	+55.5
Total equity shareholders' funds (net assets)	£201,969,000	£121,339,000	+66.5
Share price (mid market)	723.50p	441.00p	+64.1
Net asset value per share	810.81p	487.12p	+66.5
Discount to net asset value	10.8%	9.5%
MSCI AC Asia Pacific ex Japan Index (currency adjusted, capital gains basis)	522.91	356.53	+46.7
Potential gearing (see definition on page 52)	1.05	1.13
Dividend and earnings
Revenue return per share{A}	11.87p	10.48p	+13.2
Proposed final dividend per share{B}	10.00p	8.00p	+25.0
Dividend cover	1.19	1.31
Revenue reserves{C}	£8,135,000	£7,171,000
Operating costs
Total expense ratio	1.18%	1.28%
{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	66.4%	45.9%	149.1%
Net Asset Value	68.7%	52.8%	160.0%
MSCI AC Asia Pacific ex Japan Index	50.9%	43.2%	139.1%

	Rate	xd date	Record date	Payment date
Proposed final 2010	10.00p	4 August 2010	6 August 2010	27 August 2010
Final 2009	8.00p	5 August 2009	7 August 2009	28 August 2009

	Financial Record
Year to 30 April		2001	2002	2003	2004	2005	2006	2007	2008	2009	2010
Total revenue (£'000)		2,075	2,035	2,447	2,404	3,188	3,345	4,027	4,301	4,734	4,372
Per share
Net revenue return (p)		3.54	3.76	5.10	4.83	6.84	6.58	7.63	8.14	10.48	11.87
Total return (p)		(29.87)	50.59	48.01	103.41	30.35	175.78	50.04	101.51	(153.19)	331.69
Net dividends paid/proposed (p){A}		2.65	3.00	3.80	3.80	5.00	5.00	5.55	6.00	8.00	10.00
Net asset value per share (p)		205.84	253.47	201.66	301.27	330.42	503.83	548.87	646.31	487.12	810.82
		_____	_____	_____	_____	_____	_____	_____	_____	_____	_____
Equity shareholders' funds (£'000)		47,945	58,975	46,920	70,097	77,341	127,907	139,342	160,993	121,339	201,969
		_____	_____	_____	_____	_____	_____	_____	_____	_____	_____
{A} The figures for dividends have not been restated and still reflect the dividend for the years in which it was earned. The 2005 figure includes a 1.0p Special.

6.  INVESTMENT PORTFOLIO

Investment Portfolio
As at 30 April 2010
			Valuation	Total	Valuation
			2010	assets	2009
Company	Sector	Country	£'000	%	£'000
Aberdeen Global - Indian Equity Fund			30,901	14.5	16,925
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
Jardine Strategic Holdings			8,987	4.2	4,887
A Singapore-listed conglomerate with interests across the region spanning property, hotels and consumer products.	Industrial Conglomerates	Singapore
Oversea-Chinese Banking Corporation			8,795	4.1	5,345
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			8,698	4.1	4,890
Asia's leading electronics firm that makes consumer electronics, semiconductors, telecom equipment and TFT LCD screens.	Semiconductors & Semiconductor Equipment	South Korea
Rio Tinto			7,987	3.8	4,300
An Anglo-Australian mining company with a diverse portfolio of world-class interests in aluminium, copper, diamonds, gold, coal, iron ore and industrial metals.	Metals & Mining	Australia
Standard Chartered			7,826	3.7	4,713
A Hong Kong-listed lender with significant operations in the emerging markets.	Commercial Banks	Hong Kong
QBE Insurance Group			7,294	3.4	4,839
A leading Australian general insurance and reinsurance firm that is geographically diversified, and has a track record of generating good shareholder returns.	Insurance	Australia
United Overseas Bank			6,968	3.3	4,293
Singapore's second largest bank, primarily focused on SMEs and consumers, with its core market in Singapore and the balance predominantly in southeast Asia	Commercial Banks	Singapore
Swire Pacific 'B'			6,681	3.1	4,773
Hong Kong listed conglomerate, with interests in aviation (via Cathay Pacific), property, beverages, marine services and industrial activities.	Real Estate Management & Development	Hong Kong
Singapore Telecommunication			6,087	2.9	4,165
Singapore Telecom is a regional telecommunications company, with a combined mobile subscriber of more than 285 million customers from its own operations in Singapore and Australia, and regional associates in India, Philippines, Thailand, Indonesia, Pakistan and Bangladesh.	Diversified Telecommunication Services	Singapore
Top ten investments			100,224	47.1

Investment Portfolio
As at 30 April 2010
			Valuation	Total	Valuation
			2010	assets	2009
Company	Sector	Country	£'000	%	£'000
Singapore Technologies	Aerospace & Defence	Singapore	6,045	2.8	4,363
City Developments	Real Estate Management & Development	Singapore	5,996	2.8	3,831
Petrochina	Oil, Gas & Consumable Fuels	China	5,545	2.6	4,318
Siam Cement	Construction Materials	Thailand	5,477	2.6	2,618
PTT Exploration & Production	Oil, Gas & Consumable Fuels	Thailand	5,321	2.5	3,430
Ayala Land	Real Estate Management & Development	Philippines	5,051	2.4	2,857
Taiwan Semiconductor Manufacturing Company	Semiconductors & Semiconductor Equipment	Taiwan	5,025	2.4	4,371
China Mobile	Wireless Telecommunication Services	China	4,523	2.1	4,088
Aberdeen Asian Smaller Companies Inv. Trust	Investment/Unit Trusts	Other Asia	3,974	1.9	2,245
Public Bank Berhad	Commercial Banks	Malaysia	3,847	1.8	2,518
Top twenty investments			151,028	71.0
Unilever Indonesia	Household Products	Indonesia	3,714	1.7	2,416
Sun Hung Kai Properties	Real Estate Management & Development	Hong Kong	3,505	1.6	2,669
Dairy Farm International	Food & Staples Retailing	Hong Kong	3,336	1.6	2,686
ASM Pacific Technologies	Semiconductors & Semiconductor Equipment	Hong Kong	3,305	1.6	1,884
Venture Corp	Electronic Equipment & Instruments	Singapore	3,297	1.5	1,906
CIMB Group	Commercial Banks	Malaysia	3,254	1.5	-
Taiwan Mobile	Wireless Telecommunication Services	Taiwan	3,127	1.5	2,191
BHP Billiton	Metals & Mining	Australia	3,099	1.5	-
Singapore Airlines	Airlines	Singapore	3,046	1.4	2,441
Woolworths	Food & Drugs Retailer	Australia	2,883	1.4	-
Top thirty investments			183,594	86.3
Hang Lung Group	Real Estate Management & Development	Hong Kong	2,851	1.3	2,165
Wing Hang Bank	Commercial Banks	Hong Kong	2,713	1.3	1,615
Hang Lung Properties	Real Estate Management & Development	Hong Kong	2,707	1.3	2,400
New India Inv. Trust	Investment/Unit Trusts	India	2,530	1.2	1,466
Aitken Spence & Co.	Industrial Conglomerates	Sri Lanka	2,496	1.2	557
Shinsegae Company	Food & Staples Retailing	South Korea	2,415	1.1	1,931
M.P. Evans Group	Food Products	Indonesia	1,951	0.9	1,654
Busan Bank	Commercial Banks	South Korea	1,716	0.8	901
Dah Sing Financial	Commercial Banks	Hong Kong	1,580	0.7	984
DFCC Bank	Commercial Banks	Sri Lanka	1,053	0.5	417
Top forty investments			205,606	96.6
Daegu Bank	Commercial Banks	South Korea	1,047	0.5	556
John Keells Holdings	Industrial Conglomerates	Sri Lanka	968	0.5	367
National Development Bank	Commercial Banks	Sri Lanka	565	0.3	233
BOC Pakistan	Chemicals	Pakistan	301	0.1	378
Total investments			208,487	98.0
Net current assets{A}			4,295	2.0
Total assets			212,782	100.0
{A} Excluding bank loan of £10,813,000.
Note: Unless otherwise stated, foreign stock is held and all investments are equity holdings.

7.  INCOME STATEMENT

		Year ended 30 April 2010			Year ended 30 April 2009
		Revenue	Capital	Total	Revenue	Capital	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000
Gains/(losses) on investments held at fair value through profit or loss	9	-	80,079	80,079	-	(36,267)	(36,267)
Income	2	4,372	-	4,372	4,734	-	4,734
Investment management fee	3	(693)	(693)	(1,386)	(507)	(507)	(1,014)
Administrative expenses	4	(597)	-	(597)	(533)	-	(533)
Exchange gains/(losses)		-	352	352	-	(4,031)	(4,031)
		_______	_______	_______	_______	_______	_______
Net return on ordinary activities before finance costs and taxation		3,082	79,738	82,820	3,694	(40,805)	(37,111)
Interest payable and similar charges	5	(72)	(72)	(144)	(149)	(149)	(298)
		_______	_______	_______	_______	_______	_______
Return on ordinary activities before taxation		3,010	79,666	82,676	3,545	(40,954)	(37,409)
Taxation	6	(53)	-	(53)	(934)	184	(750)
		_______	_______	_______	_______	_______	_______
Return on ordinary activities after taxation		2,957	79,666	82,623	2,611	(40,770)	(38,159)
		_______	_______	_______	_______	_______	_______
Return per Ordinary share (pence)	8	11.87	319.82	331.69	10.48	(163.67)	(153.19)
		_______	_______	_______	_______	_______	_______
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 2010	30 April 2009
	Notes	£'000	£'000
Non-current assets
Investments at fair value through profit or loss	9	208,487	132,524
		_________	_________
Current assets
Loans and receivables	10	965	1,085
Cash at bank and in hand		3,721	3,722
		_________	_________
		4,686	4,807
		_________	_________
Creditors: amounts falling due within one year	11
Foreign currency loans		(10,813)	(15,273)
Other creditors		(391)	(533)
		_________	_________
		(11,204)	(15,806)
		_________	_________
Net current liabilities		(6,518)	(10,999)
		_________	_________
Total assets less current liabilities		201,969	121,525
Provision for liabilities and charges	12	-	(186)
		_________	_________
Net assets		201,969	121,339
		_________	_________
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	147,708	68,042
Revenue reserve		8,135	7,171
		_________	_________
Equity shareholders' funds		201,969	121,339
		_________	_________
Net asset value per Ordinary share (pence)	15	810.82	487.12
		_________	_________

9.  RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS

For the year ended 30 April 2010
		Share		Capital
	Share	premium	Special	redemption	Capital	Revenue
	capital	account	reserve	reserve	reserve	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 30 April 2009	6,347	17,955	11,617	10,207	68,042	7,171	121,339
Return on ordinary activities after taxation	-	-	-	-	79,666	2,957	82,623
Dividend paid (see note 7)	-	-	-	-	-	(1,993)	(1,993)
	______	______	______	______	______	______	______
Balance at 30 April 2010	6,347	17,955	11,617	10,207	147,708	8,135	201,969
	______	______	______	______	______	______	______
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
	______	______	______	______	______	______	______
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 2010		30 April 2009
	Notes	£'000	£'000	£'000	£'000
Net cash inflow from operating activities	16		2,409		3,088
Servicing of finance
Bank and loan interest paid			(149)		(299)
Taxation
Net tax paid			(500)		(615)
Financial investment
Purchases of investments		(9,765)		(17,046)
Sales of investments		14,105		13,217
		_______		_______
Net cash inflow/(outflow) from financial investment			4,340		(3,829)
Equity dividend paid			(1,993)		(1,495)
			_______		_______
Net cash inflow/(outflow) before financing			4,107		(3,150)
Financing
Loans drawn down			-		12,664
Loans repaid			(2,954)		(10,881)
			_______		_______
Net cash (outflow)/inflow from financing			(2,954)		1,783
			_______		_______
Increase/(decrease) in cash	17		1,153		(1,367)
			_______		_______
Reconciliation of net cash flow to movements in net debt
Increase/(decrease) in cash as above			1,153		(1,367)
Drawdown of loan			-		(12,664)
Repayment of loan			2,954		10,881
Exchange movements			352		(4,031)
			_______		_______
Movement in net debt in the year			4,459		(7,181)
Opening net debt			(11,551)		(4,370)
			_______		_______
Closing net debt	17		(7,092)		(11,551)
			_______		_______

11.  NOTES TO THE FINANCIAL STATEMENTS:

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

		2010	2009
2.	Income	£'000	£'000
	Income from investments
	UK dividend income	378	372
	Overseas dividends	3,708	4,209
	Scrip dividends	271	4
		________	________
		4,357	4,585
		________	________
	Other income
	Deposit interest	-	111
	Stock lending income	-	30
	Underwriting commission	20	8
		________	________
		15	149
	Total income	4,372	4,734
		________	________

		2010			2009
		Revenue	Capital	Total	Revenue	Capital	Total
3.	Investment management fee	£'000	£'000	£'000	£'000	£'000	£'000
	Investment management fee	693	693	1,386	507	507	1,014
		_______	_______	_______	_______	_______	______
	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 £274,000 (2009 - £158,000). The Company's investments in Aberdeen Global - Indian Equity Fund, Aberdeen Asian Smaller Companies Investment Trust and New India Investment Trust are excluded from the calculation of the investment management fee. The total value of such commonly managed funds, on a mid basis (basis on which management fee is calculated), at the year end was £37,428,000 (2009 - £20,648,000).

			2010	2009
4.	Administrative expenses		£'000	£'000
	Share Plan marketing contribution		101	112
	Directors' fees		113	107
	Safe custody fees		136	113
	Auditors' remuneration:
	-	Fees payable to the Company's auditor for the audit of the Company's annual accounts	14	15
	-	Fees payable to the Company's auditor and its associates for other services:
		- interim review	4	4
		- taxation services	6	-
	Other		223	182
			________	________
			597	533
			________	________
	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 £101,000 (2009 - £112,000) and the sum due to AAM at the year end was £11,000 (2009 - £7,000).
	No pension contributions were made in respect of any of the Directors.
	The Company does not have any employees.

		2010			2009
		Revenue	Capital	Total	Revenue	Capital	Total
5.	Interest payable and similar charges	£'000	£'000	£'000	£'000	£'000	£'000
	On bank loans and overdrafts	72	72	144	149	149	298
		_____	_____	_____	_____	_____	_____

			2010			2009
			Revenue	Capital	Total	Revenue	Capital	Total
6.	Taxation		£'000	£'000	£'000	£'000	£'000	£'000
	(a)	Analysis of charge for the year
		Corporation tax at 28%	22	-	22	838	(184)	654
		Double taxation relief	(22)	-	(22)	(112)	-	(112)
		Overseas tax suffered	239	-	239	158	-	158
			_____	_____	_____	_____	_____	_____
		Current tax charge for the year	239	-	239	884	(184)	700
		Deferred taxation	(186)	-	(186)	50	-	50
			_____	_____	_____	_____	_____	_____
			53	-	53	934	(184)	750
			_____	_____	_____	_____	_____	_____
	(b)	Factors affecting the tax charge for the year
		The tax assessed for the year is lower than the standard rate of corporation tax in the UK.
		Following changes in the Finance Bill 2009 dividends and other distributions from foreign companies received on or after 1 July 2009 have largely been exempt from UK corporation tax.
			2010			2009
			Revenue	Capital	Total	Revenue	Capital	Total
			£'000	£'000	£'000	£'000	£'000	£'000
		Net profit on ordinary activities before taxation	3,010	79,666	82,676	3,545	(40,954)	(37,409)
			_____	_____	_____	_____	_____	_____
		Corporation tax at 28% (2009 - 28%)	843	22,306	23,149	993	(11,468)	(10,475)
		Effects of:
		Non-taxable UK dividend income	(106)	-	(106)	(104)	-	(104)
		Non-taxable scrip dividends	(76)		(76)	(1)		(1)
		Non-taxable overseas dividends	(500)	-	(500)	-	-	-
		Accrued income not taxable	(139)	-	(139)	(50)	-	(50)
		Overseas tax suffered	239	-	239	158	-	158
		Surplus management expenses and loan realationship deficits not relieved	-	214	214	-	-	-
		Double taxation relief	(22)	-	(22)	(112)	-	(112)
		Non-taxable exchange (gains)/losses	-	(98)	(98)	-	1,129	1,129
		Non-taxable realised (gains)/losses on investments	-	(22,422)	(22,422)	-	10,155	10,155
			_____	_____	_____	_____	_____	_____
		Current tax charge	239	-	239	884	(184)	700
			_____	_____	_____	_____	_____	_____
	(c)	Provision for deferred taxation
		No provision for deferred taxation has been made in the current year or in the prior year.
		The Company has not provided for deferred tax on capital gains or losses arising on the revaluation or disposal of investments as it is exempt from tax on these items because of its status as an investment trust company.
	(d)	Factors that may affect future tax charges
		The Company has not recognised a deferred tax asset £193,000 (2009 - £186,000) arising as a result of excess management expenses and non-trade loan relationship deficits. These expenses will only be utilised if the Company has profits chargeable to corporation tax in the future.

		2010	2009
7.	Dividends	£'000	£'000
	Amounts recognised as distributions to equity holders in the period:
	Final dividend for 2009 - 8.00p (2008 - 6.00p)	1,993	1,495
		_______	_______
	The proposed final dividend for 2010 is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements.
	The table below sets out the final dividend proposed in respect of the financial year, which is the basis on which the requirements of Section 1158 of the Corporation Tax Act 2010 are considered. The revenue available for distribution by way of dividend for the year is £2,957,000 (2009 - £2,611,000).
		2010	2009
		£'000	£'000
	Proposed final dividend for 2010 - 10.00p (2009 - 8.00p)	2,491	1,993
		_______	_______

		2010		2009
8.	Return per Ordinary share	£'000	p	£'000	p
	Revenue return	2,957	11.87	2,611	10.48
	Capital return	79,666	319.82	(40,770)	(163.67)
		_______	_______	_______	_______
	Total return	82,623	331.69	(38,159)	(153.19)
		_______	_______	_______	_______
	Weighted average number of Ordinary shares in issue{A}		24,909,402		24,909,402
	{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	75,836	611	12,411	88,858
	Opening fair value gains on investments held	41,543	156	1,967	43,666
		_______	_______	_______	_______
	Opening valuation	117,379	767	14,378	132,524
	Movements in the year:
	Purchases at cost	6,243	-	3,793	10,036
	Sales -proceeds	(11,756)	(2,396)	-	(14,152)
	-realised gains on sales	3,302	1,785	-	5,087
	Current year fair value gains/(losses) on investments held	65,952	(156)	9,196	74,992
		_______	_______	_______	_______
	Closing valuation	181,120	-	27,367	208,487
		_______	_______	_______	_______
	Closing book cost	73,625	-	16,204	89,829
	Closing fair value gains on investments held	107,495	-	11,163	118,658
		_______	_______	_______	_______
		181,120	-	27,367	208,487
		_______	_______	_______	_______
				2010	2009
				£'000	£'000
	Investments listed on a recognised investment exchange			208,487	131,757
	Investments not listed on a recognised investment exchange			-	767
				_______	_______
				208,487	132,524
				_______	_______
				2010	2009
	Gains/(losses) on investments held at fair value through profit or loss			£'000	£'000
	Realised gains on sales			5,087	2,778
	Increase/(decrease) in fair value gains on investments held			74,992	(39,045)
				_______	_______
				80,079	(36,267)
				_______	_______
	Transaction costs
	During the year expenses were incurred in acquiring or disposing of investments classified as fair value through profit or loss. These have been expensed through capital and are included within gains on investments held at fair value through profit or loss in the Income Statement. The total costs were as follows:
				2010	2009
				£'000	£'000
	Purchases			30	63
	Sales			42	46
				_______	_______
				72	109
				_______	_______
				2010	2009
	Stock lending details			£'000	£'000
	Maximum aggregate value of securities on loan during the year			-	46,836
	Fee income (gross) from stock lending during the year			-	30
				_______	_______
	Stock lending arrangements were suspended during the year ended 30 April 2009 due to the severe dislocation in the market and inherent counterparty risks.

		2010	2009
10.	Loans and receivables	£'000	£'000
	Prepayments and accrued income	650	828
	Amounts due from brokers	301	254
	Other loans and receivables	14	3
		_______	_______
		965	1,085
		_______	_______

			2010	2009
11.	Creditors: amounts falling due within one year		£'000	£'000
	(a)	Foreign currency loans	10,813	15,273
			_______	_______
		At the year end HK$128,500,000 (2009 - HK$175,400,000), equivalent to £10,813,000 (2009 - £15,273,000), was drawn down from the £20,000,000 facility with The Royal Bank of Scotland at an interest rate of 0.85%, with a maturity date of 7 May 2010. Subsequent to the year end HK$128,500,000 was rolled over to 7 July 2010 at an interest rate of 0.85%. 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.
			2010	2009
	(b)	Other	£'000	£'000
		Tax payable	-	261
		Other creditors	391	272
			_______	_______
			391	533
			_______	_______

		Deferred
		taxation on
		accrued income
12.	Provision for liabilities and charges	£'000
	At 1 May 2009	186
	Movement in year	(186)
		_________
	At 30 April 2010	-
		_________

		2010	2009
13.	Called-up share capital	£'000	£'000
	Allotted, called up and fully paid:
	24,909,402 (2009 - 24,909,402) Ordinary shares of 25p each	6,227	6,227
	Held in treasury:
	477,731 (2009 - 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 2010.
	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.

		2010	2009
14.	Capital reserve	£'000	£'000
	At 1 May	68,042	108,812
	Movement in fair value gains	80,079	(36,267)
	Foreign exchange movement	352	(4,031)
	Expenses taken to capital	(765)	(472)
		_______	_______
	At 30 April	147,708	68,042
		_______	_______
	The capital reserve includes investment holding gains amounting to £118,658,000 (2009 - £43,666,000), 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:
		2010	2009
	Net assets attributable (£'000)	201,969	121,339
	Number of Ordinary shares in issue (excluding shares held in treasury)	24,909,402	24,909,402
	Net asset value per share (p)	810.81	487.12

16.	Reconciliation of net return on ordinary activities before finance	2010	2009
	costs and taxation to net cash inflow from operating activities	£'000	£'000
	Net return on ordinary activities before finance costs and taxation	82,820	(37,111)
	Adjustment for:
	(Gains)/losses on investments held at fair value through profit or loss	(80,079)	36,267
	Exchange (gains)/losses charged to capital	(352)	4,031
	Decrease/(increase) in accrued income	178	(34)
	(Increase)/decrease in other debtors	(11)	18
	Increase/(decrease) in other creditors	124	(79)
	Scrip dividends included in investment income	(271)	(4)
		_______	_______
	Net cash inflow from operating activities	2,409	3,088
		_______	_______

		1 May	Cash	Exchange	30 April
		2009	flow	movements	2010
17.	Analysis of changes in net debt	£'000	£'000	£'000	£'000
	Cash at bank	3,722	1,153	(1,154)	3,721
	Debts falling due within one year	(15,273)	2,954	1,506	(10,813)
		_______	_______	_______	_______
	Net debt	(11,551)	4,107	352	(7,092)
		_______	_______	_______	_______

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 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 2010		Years				%			£'000		£'000
	Assets
	Sterling		-				0.26			-		3,677
	Sri Lankan Rupee		-				-			-		27
	Taiwan Dollar		-				-			-		16
	Korean Won		-				-			-		1
			_______				_______			_______		_______
			n/a				n/a			-		3,721
			_______				_______			_______		_______
	Liabilities
	Bank loan - HK Dollar		0.02				0.85			(10,813)		-
			_______				_______			_______		_______
			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)		-
			_______				_______			_______		_______
	The weighted average interest rate is based on the current yield of each asset, weighted by its market value. The weighted average interest rate on bank loans is based on the interest rate payable, weighted by the total value of the loans. The maturity date of the Company's loan is shown in note 11.
	The floating rate assets consist of cash deposits on call earning interest at prevailing market rates.
	The Company's equity portfolio and short-term debtors and creditors (excluding bank loans) have been excluded from the above tables.
	Interest rate sensitivity
	Movements in interest rates would not significantly affect net assets attributable to the Company's shareholders and total profit.
	Foreign currency risk
	All of the Company's investment portfolio is invested in overseas securities and the Balance Sheet, therefore, can be significantly affected by movements in foreign exchange rates. It is not the Company's policy to hedge this risk on a continuing basis but the Company may, from time to time, match specific overseas investment with foreign currency borrowings. The Company's borrowings, as detailed in note 11, are also in foreign currency.
	The revenue account is subject to currency fluctuation arising on dividends paid in foreign currencies. The Company does not hedge this currency risk.
	Foreign currency exposure by currency of denomination:
		30 April 2010						30 April 2009
			Net		Total					Net		Total
		Overseas	monetary		currency			Overseas		monetary		currency
		investments	assets		exposure			investments		assets		exposure
		£'000	£'000		£'000			£'000		£'000		£'000
	Australian Dollar	10,177	-		10,177			4,839		-		4,839
	Hong Kong Dollar	33,410	(10,813)		22,597			25,986		(12,008)		13,978
	Indonesian Rupiah	3,714	-		3,714			3,241		-		3,241
	Korean Won	13,876	1		13,877			8,278		1		8,279
	Malaysian Ringgit	7,100	-		7,100			5,700		-		5,700
	Pakistan Rupee	301	-		301			378		-		378
	Philippine Peso	5,052	-		5,052			2,857		-		2,857
	Singapore Dollar	40,234	-		40,234			28,185		-		28,185
	Sri Lankan Rupee	5,082	27		5,109			1,574		26		1,600
	Sterling	58,268	3,677		61,945			31,303		668		31,971
	Taiwanese Dollar	8,152	16		8,168			6,562		16		6,578
	Thailand Baht	10,798	-		10,798			6,048		-		6,048
	US Dollar	12,323	-		12,323			7,573		-		7,573
		_______	_______		_______			_______		_______		_______
	Total	208,487	(7,092)		201,395			132,524		(11,297)		121,227
		_______	_______		_______			_______		_______		_______
	Foreign currency sensitivity
	The following table details the Company's sensitivity to a 10% increase and decrease in sterling against the foreign currencies in which the Company has exposure. The sensitivity analysis includes foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates.
										2010		2009
										£'000		£'000
	Australian Dollar									1,018		484
	Hong Kong Dollar									2,260		1,398
	Indonesian Rupiah									371		324
	Korean Won									1,388		828
	Malaysian Ringgit									710		570
	Pakistan Rupee									30		38
	Philippine Peso									505		286
	Singapore Dollar									4,023		2,819
	Sri Lankan Rupee									511		160
	Taiwanese Dollar									817		658
	Thailand Baht									1,080		605
	US Dollar									1,232		757
										_______		_______
										13,945		8,926
										_______		_______
	Other price risk
	Other price risks (ie changes in market prices other than those arising from interest rate or currency risk) may affect the value of the quoted investments.
	It is the Board's policy to hold an appropriate spread of investments in the portfolio in order to reduce the risk arising from factors specific to a particular country or sector. Both the allocation of assets and the stock selection process act to reduce market risk. The Manager actively monitors market prices throughout the year and reports to the Board, which meets regularly in order to review investment strategy. The investments held by the Company are listed on various stock exchanges worldwide.
	Other price risk sensitivity
	If market prices at the Balance Sheet date had been 10% higher or lower while all other variables remained constant, the return attributable to Ordinary shareholders for the year ended 30 April 2010 would have increased/(decreased) by £20,849,000 (2009 increased/(decreased) by £13,252,000) 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 2010 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 2010 and 30 April 2009 the Company's bank loan, amounting to £10,813,000 and £15,273,000, was due for repayment or roll-over within one month of the year end.
	Credit risk
	This is the risk of failure of the counterparty to a transaction to discharge its obligations under that transaction that could result in the Company suffering a loss.
	The risk is not considered to be significant, and is actively managed as follows:
	-       investment transactions are carried out with a large number of brokers, whose credit-standing is reviewed periodically by the Investment Manager, and limits are set on the amount that may be due from any one broker;
	-       cash is held only with reputable banks with high quality external credit enhancements.
	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:
				2010					2009
				Balance		Maximum			Balance		Maximum
				Sheet		exposure			Sheet		exposure
				£'000		£'000			£'000		£'000
	Non-current assets
	Investments at fair value through profit or loss			208,487		208,487			132,524		132,524
	Current assets
	Loans and receivables			965		965			1,085		1,085
	Cash at bank and in hand			3,721		3,721			3,722		3,722
				_______		_______			_______		_______
				213,173		213,173			137,331		137,331
				_______		_______			_______		_______
	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 £10,818,000 as at 30 April 2010 (2009 - £15,283,000) compared to an accounts value in the financial statements of £10,813,000 (2009 - £15,273,000) (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.

20.	Fair value hierarchy
	The Company adopted the amendments to FRS 29 'Financial Instruments: Disclosures' effective from 1 January 2009. These amendments require an entity to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy shall have the following levels:
	Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
	Level 2: inputs other than quoted prices included within Level 1 that are observable for the assets or liability, either directly (ie as prices) or indirectly (ie derived from prices); and
	Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
	The financial assets and liabilities measured at fair value in the Balance Sheet are grouped into the fair value hierarchy at 30 April 2010 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)	208,487	-	-	208,487
			_______	_______	_______	_______
	Net fair value		208,487	-	-	208,487
			_______	_______	_______	_______
	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.

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 2010 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 2009 and 2010 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 2009 is derived from the statutory accounts for 2008 which have been delivered to the Registrar of Companies. The 2010 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 25 August 2010 at Bow Bells House, One Bread Street, London EC4M 9HH.

The audited Annual Report and Accounts will be posted to shareholders shortly. Copies may be obtained during normal business hours from the Secretary, Aberdeen Asset Management PLC, 40 Princes Street, Edinburgh EH2 2BY or from the Company's website, www.newdawn-trust.co.uk

By order of the Board

Aberdeen Asset Management PLC - Secretary

6 July 2010

 

END

 

 

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