Annual Financial Report

abrdn New Dawn Invest Trust plc
17 August 2023
 


Board Ethnic Background as at 30 April 2023


Number of Board members

Percentage of the Board

Number of senior positions on the Board (CEO, CFO, Chairman and SID)

Number in executive management

Percentage of executive management

White British or other White
(including minority-white groups)

4

80%

n/a

(note 3)

n/a

n/a

Asian

1

(note 2)

20%

Other ethnic group

-

-

Not specified/prefer not to say

-

-

Notes:

1.       Meets target of at least 40% as set out in LR 9.8.6R (9)(a)(i)

2.       Meets target of at least 1 as set out in LR 9.8.6R (9)(a)(iii)

3.       This column is inapplicable as the Company is externally managed and does not have executive management functions, specifically it does not have a CEO or CFO.  The Company considers that the role of Chairman, Senior Independent Director ("SID"), and the chairmen of the Audit and Risk Committee, Nomination Committee and Management Engagement Committee are senior positions.  Of these five senior roles, four are performed by men and one by a women, and all five are held by Directors classified as 'White British or other White (including minority-white groups)'.

Going Concern

As set out in more detail in the Charman's Statement, it is proposed that the Company combines with Asia Dragon Trust plc ("Asia Dragon").  The combination, if approved by each company's shareholders, will be effected by way of a scheme of reconstruction and winding up of the Company under section 110 of the Insolvency Act 1986 and the associated transfer of part of the assets and undertaking of the Company to Asia Dragon in exchange for the issue of new ordinary shares in Asia Dragon (the "Scheme"). The outcome of the general meetings to make the Scheme effective represents a material uncertainty which may cast significant doubt on the Company's ability to continue as a going concern.

Notwithstanding this material uncertainty, the Board has concluded that it remains appropriate to continue to prepare the financial statements on a going concern basis. In reaching this conclusion, the Board has come to the view that, as the Scheme is contingent on shareholder approval and the Company is considered solvent in all other regards, there is no irrevocable path to liquidation and thus going concern remains the most appropriate basis for preparation. In reaching this conclusion, the Board has also given due consideration to the risks associated with the Scheme.  

The Board has also given consideration to the liquidity of the investment portfolio. The Company's assets consist substantially of equity shares in companies listed on recognised stock exchanges and in most circumstances are realisable within a short timescale. The Board regularly reviews income and expenditure projections and has set limits for borrowing and reviews compliance with banking covenants, including the headroom available.

At the year end, the Company's borrowing facilities amounted to £40 million, comprising a fixed rate loan of £20 million, which matures in December 2023, and a £20 million multi-currency revolving loan facility maturing in June 2024. In the event of the Company being unable to renew the facilities on their maturity, it is anticipated that they would be repaid from proceeds of investment sales.

In considering the going concern basis of accounting, the Directors have also taken into account the potential requirement of the Board to propose a resolution to approve the continuation of the Company at future Annual General Meetings. As explained under "Duration" above, this is dependent upon the level of discount in the 90 days preceding the Company's financial year end and there is no requirement for such a resolution to be proposed at the Annual General Meeting . 

Accountability and Audit

Each Director confirms that, so far as he or she is aware, there is no relevant audit information of which the Company's Auditor is unaware, and they have taken all the steps that they could reasonably be expected to have taken as Directors in order to make themselves aware of any relevant audit information and to establish that the Company's Auditor is aware of that information.

Financial Instruments

The financial risk management objectives and policies arising from financial instruments and the exposure of the Company to risk are disclosed in note 17 to the financial statements.

Relations with Shareholders

The Directors place a great deal of importance on communication with shareholders. Shareholders and investors may obtain up to date information on the Company through its website and the Manager's Customer Services Department (see Contact Addresses). 

The Board's policy is to communicate directly with shareholders and their representative bodies without the involvement of the management group (including the Company Secretary or the Manager) in situations where direct communication is required, and representatives from the Board and Manager meet with major shareholders on at least an annual basis in order to gauge their views. In addition, the Company Secretary only acts on behalf of the Board, not the Manager, and there is no filtering of communication.

At each Board meeting the Board receives full details of any communication from shareholders to which the Chairman responds personally as appropriate.

The Company has adopted a nominee code which ensures that, when shares in the Company are held in the name of nominee companies and notification has been received in advance, nominee companies will be provided with copies of shareholder communications for distribution to their investors. Nominee investors may attend and speak at general meetings.

Participants in the abrdn Investment Plan for Children, Investment Trust Share Plan and Investment Trust ISA, whose shares are held in the nominee name of the plan administrator, are given the opportunity to vote at general meetings of the Company by means of a Letter of Direction provided to them. When forwarded to the plan administrator, the voting instructions given in the Letter of Direction will in turn be reflected in the proxy votes lodged by the plan administrator.

Share Buy Backs

The Company bought back 1,706,000 Ordinary shares during the year ended 30 April 2023, representing 1.6% of the issued share capital, with the aim of providing a degree of liquidity to the market at times when the discount to the net asset value per share has widened in normal market conditions. It is the view of the Board that the Company's share buy back policy is in the interests of all shareholders. The Board closely monitors the discount and reviews the operation of the share buy back policy at each Board meeting as well as considering other options for managing the discount.

Treasury Shares

As part of its liquidity management policy, the Company currently has powers to buy back its own shares at a discount to the net asset value per share and to hold them in treasury (instead of cancelling them) as well as to sell treasury shares at a premium to the net asset value
per share. 

It is the Company's policy that, in the event that the number of treasury shares represents more than 10% of the Company's issued share capital (excluding treasury shares) at the end of any financial year, the Company will cancel a proportion of its treasury shares such that the remaining balance will equal 7.5% of the issued share capital (excluding treasury shares). Accordingly, 4,233,350 treasury shares were cancelled on 30 April 2023. Shares remaining in treasury may be held indefinitely. No dividends will be paid on treasury shares, and no voting rights attach to them. No treasury shares were cancelled during the year.

By order of the Board
abrdn Holdings Limited

Company Secretary
16 August 2023



Statement of Directors' Responsibilities

The Directors are responsible for preparing the Annual Report and 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 the Directors are required to prepare the financial statements in accordance with UK accounting standards, including FRS 102 'The Financial Reporting Standard Applicable in the UK and Republic
of Ireland'. 

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 its profit or loss for that period. 

In preparing these financial statements, the Directors are required to: 

-       select suitable accounting policies and then apply them consistently; 

-       make judgements 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;

-       assess the Company's ability to continue as a going concern disclosing, as applicable, matters related to going concern; and 

-       use the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so. 

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 are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and 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 Strategic Report, Directors' Report, Directors' Remuneration Report and Statement of Corporate Governance that comply with that law and those regulations. 

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website, but not for the content of any information included on the website that has been prepared or issued by third parties. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

The Board confirms that to the best of its knowledge:

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

-       the Strategic Report and Directors' Report include 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 it faces; and 

-       the Annual Report and financial statements taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's position and performance, business model and strategy.

On behalf of the Board
Donald Workman

Chairman
16 August 2023



Statement of Comprehensive Income

Year ended 30 April 2023

Year ended 30 April 2022

Revenue

Capital

Total

Revenue

Capital

Total

Notes

£'000

£'000

£'000

£'000

£'000

£'000

Losses on investments

10

-

(27,046)

(27,046)

-

(46,172)

(46,172)

Income

3

7,612

-

7,612

6,670

-

6,670

Management fee

4

(945)

(945)

(1,890)

(1,170)

(1,170)

(2,340)

Administrative expenses

5

(747)

-

(747)

(723)

-

(723)

Exchange losses

-

(139)

(139)

-

(640)

(640)

Net return before finance costs and taxation

5,920

(28,130)

(22,210)

4,777

(47,982)

(43,205)

Finance costs

6

(473)

(473)

(946)

(406)

(406)

(812)

Return before taxation

5,447

(28,603)

(23,156)

4,371

(48,388)

(44,017)

Taxation

7

(342)

-

(342)

(366)

-

(366)

Return after taxation

5,105

(28,603)

(23,498)

4,005

(48,388)

(44,383)

Return per Ordinary share (pence)

9

4.82

(27.00)

(22.18)

3.71

(44.81)

(41.10)

The total column of this statement represents the profit and loss account of the Company.

The Company does not have any income or expense that is not included in "Return after taxation" and therefore this represents the "Total comprehensive income for the year".

All revenue and capital items are derived from continuing operations.

The accompanying notes are an integral part of the financial statements.



Statement of Financial Position

As at

As at

30 April 2023

30 April 2022

Notes

£'000

£'000

Fixed assets

Investments at fair value through profit or loss

10

340,599

373,697

Current assets

Debtors

11

729

1,907

Cash and short-term deposits

2,166

7,824

2,895

9,731

Creditors: amounts falling due within one year

12

Loans

(28,632)

(13,504)

Other creditors

(729)

(2,994)

(29,361)

(16,498)

Net current liabilities

(26,466)

(6,767)

Total assets less current liabilities

314,133

366,930

Non-current creditors

12

Loans

-

(19,978)

Net assets

314,133

346,952

Share capital and reserves

Share capital

13

5,643

5,855

Share premium account

17,955

17,955

Capital redemption reserve

10,911

10,699

Capital reserve

14

266,379

299,738

Revenue reserve

13,245

12,705

Equity shareholders' funds

314,133

346,952

Net asset value per Ordinary share (pence)

15

299.20

325.17

The financial statements were approved by the Board of Directors and authorised for issue on 16 August 2023 and were signed on its behalf by:

Donald Workman

Chairman

The accompanying notes are an integral part of the financial statements.



Statement of Changes in Equity

For the year ended 30 April 2023 

Share

Capital

Share

premium

redemption

Capital

Revenue

capital

account

reserve

reserve

reserve

Total

Notes

£'000

£'000

£'000

£'000

£'000

£'000

Balance at 30 April 2022

5,855

17,955

10,699

299,738

12,705

346,952

Buy back of Ordinary shares for treasury

-

-

-

(4,756)

-

(4,756)

Cancellation of Ordinary shares held in treasury

(212)

-

212

-

-

-

Return after taxation

-

-

-

(28,603)

5,105

(23,498)

Dividends paid

8

-

-

-

-

(4,565)

(4,565)

Balance at 30 April 2023

5,643

17,955

10,911

266,379

13,245

314,133

For the year ended 30 April 2022

Share

Capital

Share

premium

redemption

Capital

Revenue

capital

account

reserve

reserve

reserve

Total

£'000

£'000

£'000

£'000

£'000

£'000

Balance at 30 April 2021

5,855

17,955

10,699

355,134

13,362

403,005

Buy back of Ordinary shares for treasury

-

-

-

(7,008)

-

(7,008)

Return after taxation

-

-

-

(48,388)

4,005

(44,383)

Dividends paid

8

-

-

-

-

(4,662)

(4,662)

Balance at 30 April 2022

5,855

17,955

10,699

299,738

12,705

346,952

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.



Statement of Cash Flows

Year ended

Year ended

30 April 2023

30 April 2022

 Notes

£'000

£'000

Operating activities

Net return before finance costs and taxation

(22,210)

(43,205)

Adjustment for:

Losses on investments

27,046

46,172

Currency losses

139

640

Dividend income

(7,540)

(6,667)

Dividend income received

7,502

7,112

Interest income

(72)

(3)

Interest income received

64

2

Increase in other debtors

(5)

(9)

Decrease in other creditors

(12)

(30)

Stock dividends included in investment income

-

(152)

Overseas withholding tax

(253)

(484)

Net cash flow from operating activities

4,659

3,376

Investing activities

Purchases of investments

(71,965)

(81,473)

Sales of investments

76,921

95,767

Net cash from investing activities

4,956

14,294

Financing activities

Equity dividends paid

           8

(4,565)

(4,662)

Interest paid

(915)

(799)

Buy back of Ordinary shares for treasury

(4,790)

(6,882)

Loan repayment

(4,814)

-

Net cash used in financing activities

(15,084)

(12,343)

(Decrease)/increase in cash

(5,469)

5,327

Analysis of changes in cash during the year

Opening balance

7,824

2,364

Effect of exchange rate fluctuations on cash held

(189)

133

(Decrease)/increase in cash as above

(5,469)

5,327

Closing balance

2,166

7,824

The accompanying notes are an integral part of the financial statements.



Notes to the Financial Statements

For the year ended 30 April 2023

1.

Principal activity

The Company is a closed-end investment company, registered in England & Wales No 02377879, with its Ordinary shares being listed on the London Stock Exchange.

 

2.

Accounting policies

(a)

Basis of accounting. The financial statements have been prepared in accordance with Financial Reporting Standard 102 and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' (the "SORP") issued in July 2022. The financial statements are prepared in Sterling which is the functional currency of the Company and rounded to the nearest £'000. They have also been prepared on the assumption that approval as an investment trust will continue to be granted by HMRC.

Going concern with a Material Uncertainty. As set out in more detail in the Charman's Statement, it is proposed that the Company combines with Asia Dragon Trust plc ("Asia Dragon"). The combination, if approved by each company's shareholders, will be effected by way of a scheme of reconstruction and winding up of the Company under section 110 of the Insolvency Act 1986 and the associated transfer of part of the assets and undertaking of the Company to Asia Dragon in exchange for the issue of new ordinary shares in Asia Dragon (the "Scheme"). The outcome of the general meetings to make the Scheme effective represents a material uncertainty which may cast significant doubt on the Company's ability to continue as a going concern.

Notwithstanding this material uncertainty, the Board has concluded that it remains appropriate to continue to prepare the financial statements on a going concern basis. In reaching this conclusion, the Board has come to the view that, as the Scheme is contingent on shareholder approval and the Company is considered solvent in all other regards, there is no irrevocable path to liquidation and thus going concern remains the most appropriate basis for preparation. In reaching this conclusion, the Board has also given due consideration to the risks associated with the Scheme.

The Board has also given consideration to the liquidity of the investment portfolio. The Company's assets consist substantially of equity shares in companies listed on recognised stock exchanges and in most circumstances are realisable within a short timescale. The Board regularly reviews income and expenditure projections and has set limits for borrowing and reviews compliance with banking covenants, including the headroom available.

At the year end, the Company's borrowing facilities amounted to £40 million, comprising a fixed rate loan of £20 million, which matures in December 2023, and a £20 million multi-currency revolving loan facility maturing in June 2024. In the event of the Company being unable to renew the facilities on their maturity, it is anticipated that they would be repaid from proceeds of investment sales.

In considering the going concern basis of accounting, the Directors have also taken into account the potential requirement of the Board to propose a resolution to approve the continuation of the Company at future Annual General Meetings. As explained under "Duration" above, this is dependent upon the level of discount in the 90 days preceding the Company's financial year end and there is no requirement for such a resolution to be proposed at the Annual General Meeting.

The Company's investments and borrowings are made in a number of currencies, however the Board considers the Company's functional currency to be Sterling. In arriving at this conclusion, the Board considered that the shares of the Company are listed on the London Stock Exchange, it is regulated in the United Kingdom, principally having its shareholder base in the United Kingdom, pays dividends and expenses in Sterling. Consequently, the Board also considers the Company's presentational currency to be Sterling. At the year end, the Company's borrowing facilities amounted to £40 million, comprising a fixed rate loan of £20 million, which matures in December 2023, and a £20 million multi-currency revolving loan facility maturing in June 2024.

Significant accounting judgements, estimates and assumptions. The preparation of financial statements requires the consideration of certain significant accounting judgements, estimates and assumptions when management may need to exercise its judgement in the process of applying the accounting policies and these are continually evaluated. The Directors consider the material uncertainty present for the Company to continue as a going concern and the use of Sterling as its functional currency to be significant accounting judgements.

(b)

Valuation of investments. The Company has applied the recognition and measurement provisions of FRS 102 and investments have been designated upon initial recognition at fair value through profit or loss. This is done because all investments are considered to form part of a group of financial assets which is evaluated on a fair value basis, in accordance with the Company's documented investment strategy, and information about the grouping is provided internally on that basis. Listed investments have been measured 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. The fair value of the Company's investments in collective investment schemes has been determined by reference to their quoted net asset values. Gains and losses arising from changes in fair value are included as a capital item in the Statement of Comprehensive Income and are ultimately recognised in the capital reserve.

(c)

Income. 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 are 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. Other returns on non-equity shares are recognised when the right to return is established. 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 revenue. Any excess in the value of the shares received over the amount of the cash dividend is recognised as capital. 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 Statement of Comprehensive Income except as follows:

- expenses directly relating to the acquisition or disposal of an investment, which are charged to the capital column of the Statement of Comprehensive Income and are separately identified and disclosed in note 10; and

- the Company charges 50% of investment management fees and finance costs to the capital column of the Statement of Comprehensive Income, 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)

Taxation. The tax payable is based on the taxable profit for the year. Taxable profit differs from net profit as reported in the  Statement of Comprehensive Income because it excludes items of income or expenditure that are taxable or deductible in other years and it further excludes items that are never taxable or deductible (see note 7 for a more detailed explanation).

Deferred taxation is provided on all timing differences, that have originated but not reversed at the Statement of Financial Position 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 Statement of Financial Position 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)

Foreign currencies. Assets and liabilities in foreign currencies are translated at the rates of exchange ruling on the Statement of Financial Position 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 Statement of Comprehensive Income as capital or revenue, depending upon their nature.

(g)

Dividends payable. Final dividends are recognised from the date on which they are declared and approved by shareholders. Interim dividends are recognised when paid.

 

(h)

Nature and purpose of capital and reserves

Called up share capital. The Ordinary share capital on the Statement of Financial Position relates to the number of shares in issue and in treasury. Only when the shares are cancelled, either from treasury or directly, is a transfer made to the capital redemption reserve.

Share premium account. The balance classified as share premium includes the premium above nominal value from the proceeds on issue of any equity share capital comprising Ordinary shares of 5p. This reserve is not distributable.

Capital redemption reserve. The capital redemption reserve is used to record the amount equivalent to the nominal value of any of the Company's own shares purchased and cancelled in order to maintain the Company's capital. This reserve is not distributable.

Capital reserve. Gains or losses on disposal of investments and changes in fair values of investments are transferred to the capital reserve. The capital element of the management fee and relevant finance costs are charged to this reserve. Any associated tax relief is also credited to this reserve. The costs of share buybacks to be held in treasury have also been deducted from this reserve. This reserve is not distributable.

Revenue reserve. This reserve reflects all income and costs which are recognised in the revenue column of the Statement of Comprehensive Income. The revenue is distributable, including by way of dividend.

(i)

Borrowings. Bank loans are initially recognised at cost, being the fair value of the consideration received, net of any issue expenses. Subsequently, they are measured at amortised cost using the effective interest method.  Finance charges are accounted for on an accruals basis using the effective interest rate method and are charged 50% to revenue and
50% to capital.

 

3.

Income

2023

2022

£'000

£'000

Income from investments

UK dividend income

729

1,973

Overseas dividends

6,811

4,542

Stock dividends

-

152

7,540

6,667

Other income

Deposit interest

72

3

Total income

7,612

6,670

 

4.

Management fee

2023

2022

Revenue

Capital

Total

Revenue

Capital

Total

£'000

£'000

£'000

£'000

£'000

£'000

Management fee

945

945

1,890

1,170

1,170

2,340

Management services are provided by abrdn Fund Managers Limited ("aFML").

With effect from 1 May 2022, the management fee has been payable monthly in arrears based on an annual amount of 0.85% up to £350 million and 0.50% thereafter of the net asset value of the Company valued monthly, previously 0.85% of net assets, with the following provisions for commonly managed funds:

- the Company's investments in Aberdeen Standard SICAV - Indian Equity Fund, abrdn Asia Focus PLC and abrdn New India Investment Trust PLC are excluded from the calculation of the investment management fee. The total value of such commonly managed funds, on a bid price basis (basis on which the management fee is calculated), at the year end was £58,292,000 (2022 - bid basis - £59,390,000).

- the Company receives a rebate from the Manager for the amount of fees in excess of the above rates charged by the Manager for any commonly managed fund.

The balance due to aFML at the year end, net of any rebates, was £303,000 (2022 - £344,000).

The agreement is terminable by either party on not less than twelve months' notice to the other. In the event of termination
by the Company on less than the agreed notice period, compensation is payable to the Manager in lieu of the unexpired
notice period.

 

5.

Administrative expenses

2023

2022

£'000

£'000

Promotional activities

185

177

Directors' fees

126

122

Safe custody fees

111

129

Depositary fees

34

39

Auditor's remuneration:

- fees payable for the audit of the Company's annual financial statements

30

29

Registrar's fees

62

67

Legal and professional fees

55

28

Other expenses

144

132

747

723

The Company has an agreement with aFML for the provision of promotional activities. The total fees payable during the year were £185,000 (2022 - £177,000) and the sum due to aFML at the year end was £54,000 (2022 - £65,000).

The Company does not have any employees and no pension contributions were made in respect of any of the Directors.

With the exception of Auditor's remuneration, all of the expenses above include irrecoverable VAT where applicable.

 

6.

Finance costs

2023

2022

Revenue

Capital

Total

Revenue

Capital

Total

£'000

£'000

£'000

£'000

£'000

£'000

Bank loans and overdraft interest

473

473

946

406

406

812

 

7.

Taxation

2023

2022

Revenue

Capital

Total

Revenue

Capital

Total

£'000

£'000

£'000

£'000

£'000

£'000

(a)

Analysis of charge for the year

Overseas tax

416

-

416

444

-

444

Overseas tax reclaimable

(74)

-

(74)

(78)

-

(78)

Total tax charge for the year

342

-

342

366

-

366

(b)

Factors affecting the tax charge for the year. The UK corporation tax rate is 25% (2022 - 19%).The tax assessed for the year is higher (2022 -higher) than the standard rate of corporation tax in the UK. The differences are explained below:

2023

2022

Revenue

Capital

Total

Revenue

Capital

Total

£'000

£'000

£'000

£'000

£'000

£'000

Net return before taxation

5,447

(28,603)

(23,156)

4,371

(48,388)

(44,017)

Corporation tax at effective rate of 19.5% (2022 - standard rate of 19%)

1,062

(5,578)

(4,516)

830

(9,194)

(8,364)

Effects of:

-

Non-taxable UK dividend income

(142)

-

(142)

(375)

-

(375)

Non-taxable overseas dividends

(1,328)

-

(1,328)

(892)

-

(892)

Overseas tax suffered

342

-

342

366

-

366

Expenses not deductible for tax purposes

3

-

3

4

-

4

Surplus management expenses and loan relationship deficits not relieved

405

277

682

433

299

732

Non-taxable exchange losses

-

27

27

-

122

122

Non-deductible losses

-

5,274

5,274

-

8,773

8,773

Total tax charge

342

-

342

366

-

366

(c)

Provision for deferred taxation. No provision for deferred taxation has been made in the current year or in the prior year. At 30 April 2023 the Company had surplus management expenses and loan relationship debits with a tax value of £10,395,000 (2022 - £9,522,000) in respect of which a deferred tax asset has not been recognised. This is because the Company is not expected to generate taxable income in a future period in excess of the deductible expenses of that future period and, accordingly, it is unlikely that the Company will be able to reduce future tax liabilities through the use of existing surplus expenses.

 

8.

Dividends

2023

2022

£'000

£'000

Amounts recognised as distributions to equity holders in the period:

Final dividend for 2022 - 3.3p (2021 - 3.3p)

3,507

3,587

Interim dividend for 2023 - 1.0p (2022 - 1.0p)

1,058

1,075

4,565

4,662

The second interim dividend in respect of the year ended 30 April 2023 has not been included as a liability in these financial statements.

The table below sets out the dividends 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 £5,105,000 (2022 - £4,005,000).

2023

2022

£'000

£'000

First interim dividend for 2023 - 1.0p

1,058

-

Second interim dividend for 2023 - 3.3p

3,451

-

Interim dividend for 2022 - 1.0p

-

1,075

Final dividend for 2022 - 3.3p

-

3,511

4,509

4,586

Subsequent to the year end the Company and up to the record date of the second interim dividend for 2023 a further 420,000 Ordinary shares were purchased for treasury. Therefore the amounts reflected above for the cost of the second interim dividend for 2023 are based on 104,571,348 Ordinary shares, being the number of Ordinary shares in issue excluding those held in treasury at the date of this Report.

 

9.

Return per Ordinary share

2023

2022

£'000

p

£'000

p

Revenue return

5,105

4.82

4,005

3.71

Capital return

(28,603)

(27.00)

(48,388)

(44.81)

Total return

(23,498)

(22.18)

(44,383)

(41.10)

Weighted average number of Ordinary shares in issueA

105,932,290

107,976,263

A Calculated excluding shares held in treasury.

 

10.

Investments at fair value through profit or loss

2023

2022

£'000

£'000

Opening book cost

253,386

243,269

Opening investment holding gains

120,311

188,217

Opening fair value

373,697

431,486

Analysis of transactions made during the year

Purchases at cost

69,728

82,957

Sales proceeds received

(75,780)

(94,574)

Losses on investments

(27,046)

(46,172)

Closing fair value

340,599

373,697

Closing book cost

264,474

253,386

Closing investment gains

76,125

120,311

Closing fair value

340,599

373,697

2023

2022

£'000

£'000

Investments listed on an overseas investment exchange

322,007

340,908

Investments listed on the UK investment exchange

18,592

32,789

340,599

373,697

The Company received £75,780,000 (2022 - £94,574,000) from investments sold in the period. The book cost of these investments when they were purchased was £58,640,000 (2022 - £72,840,000). These investments have been revalued over time and until they were sold any unrealised gains/(losses) were included in the fair value of the investments.

Transaction costs. During the year expenses were incurred in acquiring or disposing of investments classified as fair value through profit or loss. These have been expensed through capital and are included within losses on investments in the Statement of Comprehensive Income. The total costs were as follows:

2023

2022

£'000

£'000

Purchases

86

91

Sales

119

140

205

231

The above transaction costs are calculated in line with the AIC SORP. The transaction costs in the Company's Key Information Document are calculated on a different basis and in line with the PRIIPs regulations.

 

11.

Debtors

2023

2022

£'000

£'000

Prepayments and accrued income

348

308

Amounts due from brokers

-

1,141

Other loans and receivables

381

458

729

1,907

 

12.

Creditors

Amounts falling due within one year:

2023

2022

a)

Loans

£'000

£'000

Foreign currency loans

3,640

8,504

Sterling loans

24,992

5,000

28,632

13,504

2023

2022

b)

Other

£'000

£'000

Amounts due to brokers

92

2,363

Other creditors

637

631

729

2,994

2023

2022

Non-current creditors:

£'000

£'000

Sterling loan

-

19,978

At the year end the Company had drawn down HK$21,000,000 (2022 - HK$21,00,000), equivalent to £2,128,000 (2022 - £2,132,000), with a maturity date of 19 May 2023 (2022 - 25 May 2022), US$1,900,000 (2022 - US$8,000,000), equivalent to £1,512,000 (2022 - £6,372,000), with a maturity date of 19 May 2023 (2022 - 25 May 2022) and £5,000,000 (2022 - £5,000,000), with a maturity date of 19 May 2023 (2022 - 25 May 2022), and a fixed rate bank loan of £20,000,000 (2022 - £20,000,000), under the £40,000,000 multi-currency credit facility with The Royal Bank of Scotland International Limited at interest rates of 2.760%, 6.216%, 5.577% and 2.626% (2022 - 1.58839%, 2.06786%, 2.0905% and 2.626%) respectively.

As of the latest date prior to the signing of this Report the HK$21,000,000 loan had been drawn down to 18 August 2023 at an interest rate of 6.359%, the US$1,900,000 loan had been drawn down to 18 August 2023 at an interest rate of 6.45% and the £5,000,000 loan had been drawn down to 18 August 2023 at an estimated interest rate of 6.33%.

The terms of the bank loan with The Royal Bank of Scotland International Limited state that:

- the net tangible assets of the Company must be not less than £125 million at all times;

- 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 of any unlisted investment; (ii) the value in excess of 10% of total gross assets invested in the largest single security or asset; (iii) the value of any single security or asset (other than the largest security or asset referred to above) exceeds 5% of gross assets; (iv) the value in excess of 60% of total gross assets invested in the top twenty largest investments; (v) the extent to which the value of securities in collective investment schemes exceeds 30% of gross assets; and (vi) the extent to which the aggregated value of securities or assets in countries with a Standard and Poor's foreign sovereign debt rating lower than BBB exceeds 30% of gross assets.); and

- the facility, under which the loans are made, is split into two tranches, a £20,000,000 fixed rate facility which will expire on 14 December 2023 and a £20,000,000 revolving credit facility which will expire on 28 June 2024.

The Company has met all financial covenants throughout the period and up to the date of this Report.

 

13.

Share capital

2023

2022

£'000

£'000

Allotted, called up and fully paid:

104,991,348 (2022 - 106,697,348) Ordinary shares of 5p each

5,249

5,335

Held in treasury:

7,874,351 (2022 - 10,401,701) Ordinary shares of 5p each

394

520

5,643

5,855

During the year 1,706,000 (2022 - 2,232,000) Ordinary shares of 5p each were repurchased by the Company at a total cost, including transaction costs, of £4,756,000 (2022 - £7,008,000). All of the shares were placed in treasury. On 30 April 2023 4,233,350 Ordinary shares held in treasury were cancelled. Shares held in treasury represent 7.0% (2022 - 8.9%) of the Company's total issued share capital of 112,865,699 Ordinary shares of 5p each at 30 April 2023. Shares held in treasury do not carry a right to receive dividends.

Subsequent to the year end the Company bought back for treasury a further 420,000 Ordinary shares for a total consideration of £1,253,000.

 

14.

Capital reserve

2023

2022

£'000

£'000

At 1 May 2022

299,738

355,134

Movement in fair value gains

(27,046)

(46,172)

Foreign exchange movement

(139)

(640)

Buy back of Ordinary shares for treasury

(4,756)

(7,008)

Expenses allocated to capital

(1,418)

(1,576)

At 30 April 2023

266,379

299,738

The capital reserve includes investment holding gains amounting to £76,125,000 (2022 - £120,311,000), as disclosed in note 10.

 

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:

2023

2022

Net assets attributable

£314,133,000

£346,952,000

Number of Ordinary shares in issue (excluding shares held in treasury)

104,991,348

106,697,348

Net asset value per share

299.20p

325.17p

 

16.

Analysis of changes in net debt

At

At

30 April

Currency

Cash

Non-cash

30 April

2022

differences

flows

movements

2023

£'000

£'000

£'000

£'000

£'000

Cash and short term deposits

7,824

(189)

(5,469)

-

2,166

Debt due within one year

(13,504)

50

4,814

(19,992)

(28,632)

Debt due after more than one year

(19,978)

-

-

19,978

-

(25,658)

(139)

(655)

(14)

(26,466)

At

At

30 April

Currency

Cash

Non-cash

30 April

2021

differences

flows

movements

2022

£'000

£'000

£'000

£'000

£'000

Cash and short term deposits

2,364

133

5,327

-

7,824

Debt due within one year

(12,731)

(773)

-

-

(13,504)

Debt due after more than one year

(19,965)

-

-

(13)

(19,978)

(30,332)

(640)

5,327

(13)

(25,658)

A statement reconciling the movement in net funds to the net cash flow has not been presented as there are no differences from the above analysis.

 

17.

Financial instruments

Risk management. The Company's investment activities expose it to various types of financial risk associated with the financial instruments and markets in which it invests. 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 Board has delegated the risk management function to abrdn Fund Managers Limited ("aFML") under the terms of its management agreement with aFML (further details of which are included under note 4). The Board regularly reviews and agrees policies for managing each of the key financial risks identified with the Manager. The types of risk and the Manager's approach to the management of each type of risk, are summarised below. Such approach has been applied throughout the year and has not changed since the previous accounting period.

Risk management framework. The directors of aFML collectively assume responsibility for aFML's obligations under the AIFMD including reviewing investment performance and monitoring the Company's risk profile during the year.

aFML is a fully integrated member of the abrdn Group ("the Group"), which provides a variety of services and support to aFML in the conduct of its business activities, including the oversight of the risk management framework for the Company. The AIFM has delegated the day to day administration of the investment policy to abrdn Asia Limited, which is responsible for ensuring that the Company is managed within the terms of its investment guidelines and the limits set out in its pre-investment disclosures to investors (details of which can be found on the Company's website). The AIFM has retained responsibility for monitoring and oversight of investment performance, product risk and regulatory and operational risk for the Company.

The Manager conducts its risk oversight function through the operation of the Group's risk management processes and systems which are embedded within the Group's operations. The Group's Risk Division supports management in the identification and mitigation of risks and provides independent monitoring of the business. The Division includes Compliance, Business Risk, Market Risk and Risk Management. The team is headed up by the Group's Chief Risk Officer, who reports to the Group CEO. The Risk Division achieves its objective through embedding the Risk Management Framework throughout the organisation using the Group's operational risk management system ("SHIELD").

The Group's Internal Audit Department is independent of the Risk Division and reports directly to the Group CEO and to the Audit Committee of the Group's Board of Directors. The Internal Audit Department is responsible for providing an independent assessment of the Group's control environment.

The Group's corporate governance structure is supported by several committees to assist the board of directors, its subsidiaries and the Company to fulfil their roles and responsibilities. The Group's Risk Division is represented on all committees, with the exception of those committees that deal with investment recommendations. The specific goals and guidelines on the functioning of those committees are described on the committees' terms of reference.

Risk management. The main risks the Company faces from its financial instruments are (i) market risk (comprising interest rate risk, currency risk and price risk), (ii) liquidity risk and (iii) credit risk. ​​​​​

(i) Market 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.

Management of the risk. 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.

The Board imposes borrowing limits to ensure gearing levels are appropriate to market conditions and reviews these on a regular basis. Borrowings comprise fixed rate, revolving, and uncommitted facilities. The fixed rate facilities are used to finance opportunities at low rates and, the revolving and uncommitted facilities to provide flexibility in the short-term. Current bank covenant guidelines state that the total borrowings will not exceed 25% of the adjusted net assets of the Company as defined in note 12.

 

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 Statement of Financial Position date was as follows:

Weighted average

Weighted

period for which

average

Fixed

Floating

rate is fixed

interest rate

rate

rate

At 30 April 2023

Years

%

£'000

£'000

Assets:

China Yuan Renminbi

-

-

-

3

Sterling

-

3.18

-

2,134

Vietnam Dong

-

-

-

29

-

2,166

Weighted average

Weighted

period for which

average

Fixed

Floating

rate is fixed

interest rate

rate

rate

Years

%

£'000

£'000

Liabilities:

Bank loan - £20,000,000

0.62

2.63

19,992

-

Bank loan - £5,000,000

0.05

5.58

5,000

-

Bank loan - HK$21,000,000

0.05

2.76

2,128

-

Bank loan - US$1,900,000

0.05

6.22

1,512

-

28,632

-

Weighted average

Weighted

period for which

average

Fixed

Floating

rate is fixed

interest rate

rate

rate

At 30 April 2022

Years

%

£'000

£'000

Assets:

China Yuan Renminbi

-

-

-

3

Euro

-

-

-

1

Sri Lankan Rupee

-

-

-

7

Sterling

-

-

-

7,798

Taiwan Dollar

-

-

-

1

Vietnam Dong

-

-

-

14

-

7,824

Weighted average

Weighted

period for which

average

Fixed

Floating

rate is fixed

interest rate

rate

rate

Years

%

£'000

£'000

Liabilities:

Bank loan - £20,000,000

1.62

2.63

19,978

-

Bank loan - £5,000,000

0.07

2.09

5,000

-

Bank loan - HK$21,000,000

0.07

1.59

2,132

-

Bank loan - US$8,000,000

0.07

2.07

6,372

-

33,482

-

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 loans are shown in note 12.

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. The Company's investment portfolio is primarily invested in overseas securities and the Statement of Financial Position, therefore, can be significantly affected by movements in foreign exchange rates.

Management of the risk. 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 12, are predominantly in sterling.

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 2023  

 30 April 2022  

Net

Total

Net

Total

monetary

currency

monetary

currency

Investments

assets

exposure

Investments

assets

exposure

£'000

£'000

£'000

£'000

£'000

£'000

Australian Dollar

36,504

-

36,504

31,303

157

31,460

China Yuan Renminbi

37,738

3

37,741

44,103

(747)

43,356

Euro

8,798

-

8,798

7,828

1

7,829

Hong Kong Dollar

88,390

(2,128)

86,262

77,221

(2,132)

75,089

Indonesian Rupiah

15,791

-

15,791

12,821

-

12,821

Philippine Peso

4,909

-

4,909

6,270

-

6,270

Singapore Dollar

16,714

-

16,714

22,576

(838)

21,738

South Korean Won

28,782

-

28,782

41,846

336

42,182

Sri Lankan Rupee

2,011

-

2,011

1,624

7

1,631

Taiwan Dollar

27,125

-

27,125

32,261

1

32,262

Thailand Baht

-

-

-

2,703

-

2,703

US Dollar

-

(1,512)

(1,512)

-

(6,372)

(6,372)

Vietnam Dong

6,897

29

6,926

11,656

14

11,670

Total

273,659

(3,608)

270,051

292,212

(9,573)

282,639

 

 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.

2023

2022

£'000

£'000

Australian Dollar

3,650

3,146

China Yuan Renminbi

3,774

4,336

Euro

880

783

Hong Kong Dollar

8,626

7,509

Indonesian Rupiah

1,579

1,282

Philippine Peso

491

627

Singapore Dollar

1,671

2,174

South Korean Won

2,878

4,218

Sri Lankan Rupee

201

163

Taiwan Dollar

2,713

3,226

Thailand Baht

-

270

US Dollar

(151)

(637)

Vietnam Dong

693

1,167

27,005

28,264

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.

Management of the risk. It is the Board's policy to hold an appropriate spread of investments in the portfolio in order to reduce
the risk arising from factors specific to a particular country or sector. 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.

 

Price risk sensitivity. If market prices at the Statement of Financial Position 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 2023 would have increased/(decreased) by £34,060,000 (2022 - increased/(decreased) by £37,370,000) and equity reserves would have increased/(decreased) by the same amount.  

(ii) Liquidity risk. This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities as they fall due in line with the maturity profile analysed below.

Within

1 year

Total

At 30 April 2023

£'000

£'000

Bank loans

28,632

28,632

Interest cash flows on bank loans

430

430

Cash flows on other creditors

649

649

29,711

29,711

Within

Within

1 year

1-2 years

Total

At 30 April 2022

£'000

£'000

£'000

Bank loans

13,504

20,000

33,504

Interest cash flows on bank loans

548

396

944

Cash flows on other creditors

2,994

-

2,994

17,046

20,396

37,442

Management of the risk. The Board imposes borrowing limits to ensure gearing levels are appropriate to market conditions and reviews these on a regular basis. Borrowings comprise a £20,000,000 fixed rate credit facility, which expires on 14 December 2023 and £20,000,000 revolving multi-currency credit facility, which expires on 28 June 2024. 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 2023 are shown in note 12.

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 12. 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.

(iii) 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.

Management of the risk. Investment transactions are carried out with a large number of brokers, whose credit-standing is reviewed periodically by the Manager, and limits are set on the amount that may be due from any one broker. Cash is held only with reputable banks with high quality external credit enhancements.

Credit risk exposure. In summary, compared to the amounts in the Statement of Financial Position, the maximum exposure to credit risk at 30 April was as follows:

2023

2022

Statement of

Statement of

Financial

Maximum

Financial

Maximum

Position

exposure

Position

exposure

£'000

£'000

£'000

£'000

Current assets

Loans and receivables

729

729

1,907

1,907

Cash at bank and in hand

2,166

2,166

7,824

7,824

2,895

2,895

9,731

9,731

None of the Company's financial assets are past due or impaired.

Fair values of financial assets and financial liabilities. The carrying values of fixed asset investments are stated at their fair values, which have been determined with reference to quoted market prices. For all other short-term debtors and creditors, their book values approximate to fair values because of their short-term maturity. Bank loans are valued at amortised cost in accordance with the Company's stated accounting policy.

 

18.

Fair value hierarchy

FRS 102 requires 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 has the following classifications:

Level 1: unadjusted quoted prices in an active market for identical assets or liabilities that the entity can access at the measurement date.

Level 2: inputs other than quoted prices included within Level 1 that are observable (ie developed using market data) for the asset or liability, either directly or indirectly.

Level 3: inputs are unobservable (ie for which market data is unavailable) for the asset or liability.

The financial assets and liabilities measured at fair value in the Statement of Financial Position are grouped into the fair value hierarchy at the reporting date as follows:

Level 1

Level 2

Level 3

Total

As at 30 April 2023

£'000

£'000

£'000

£'000

Financial assets at fair value through profit or loss

Quoted equities

292,251

-

-

292,251

Collective investment schemes

-

48,348

-

48,348

Total fair value

292,251

48,348

-

340,599

Level 1

Level 2

Level 3

Total

As at 30 April 2022

£'000

£'000

£'000

£'000

Financial assets at fair value through profit or loss

Quoted equities

325,001

-

-

325,001

Collective investment schemes

-

48,696

-

48,696

Total fair value

325,001

48,696

-

373,697

Quoted equities. The fair value of the Company's investments in quoted equities has 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.

Collective investment schemes. The fair value of the Company's investments in collective investment schemes has been determined by reference to their quoted net asset values at the reporting date and hence are categorised in Fair Value Level 2.

 

19.

Related party transactions and transactions with the Manager

Fees payable during the period to the Directors and their interests in shares of the Company are disclosed within the Directors' Remuneration Report.

Mr Young is also a director of the Company's Investment Manager, abrdn Asia Limited, which is a wholly-owned subsidiary of abrdn plc. Management, promotional activities and secretarial and administration services are provided to the Company by abrdn Fund Managers Limited. Details of transactions during the year and balances outstanding at the year end disclosed in notes 4 and 5.

20.

Capital management policies and procedures

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 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. As at 30 April 2023, the Company had net gearing of 8.5% which compares with a current maximum limit set by the Board of 25%.

 

21.

Subsequent events

On 21 July 2023 the Board announced that it had agreed heads of terms with the board of Asia Dragon Trust plc ("Asia Dragon") in respect of a proposed combination of the Company with Asia Dragon. The combination, if approved by each company's shareholders, will be effected by way of a scheme of reconstruction and winding up of the Company under section 110 of the Insolvency Act 1986 with the associated transfer of part of the assets and undertaking of the Company to Asia Dragon in exchange for the issue of new ordinary shares in Asia Dragon (the "Scheme"). Under the terms of the Scheme an up to 25% cash exit opportunity will be offered to the Company's shareholders to realise part of their investment in the Company at a 2% discount to the adjusted net asset value.



Alternative Performance Measures

Alternative performance measures are numerical measures of the Company's current, historical or future performance, financial position or cash flows, other than financial measures defined or specified in the applicable financial framework. The Company's applicable financial framework includes FRS 102 and the AIC SORP. 

Dividend cover

Dividend cover is the revenue return per share divided by dividends per share expressed as a ratio.

2023

2022

Revenue return per share

a

4.82p

3.71p

Dividends per share

b

4.30p

4.30p

Dividend cover

a/b

1.12

0.86

Discount to net asset value per Ordinary share (including current year income)

The amount by which the market price per Ordinary share is lower than the net asset value per Ordinary share (including current year income), expressed as a percentage of the net asset value per Ordinary share.

2023

2022

NAV per Ordinary share (p)

a

299.20

325.17

Share price (p)

b

261.00

286.00

Discount

(a-b)/a

12.8%

12.0%

Discount to net asset value per Ordinary share (excluding current year income)

The amount by which the market price per Ordinary share is lower than the net asset value per Ordinary share (excluding current year income), expressed as a percentage of the net asset value per Ordinary share.

2023

2022

Net asset value per Ordinary share (p)

a

295.34

322.43

Share price (p)

b

261.00

286.00

Discount

(a-b)/a

11.6%

11.3%

Net asset value per Ordinary share (excluding current year income)  

The Company also uses net asset value (excluding current year income) per share as an alternative performance measure. This is calculated as follows:  

2023

2022

Net assets attributable (£'000)

314,133

346,952

Less: Revenue return after taxation for the year (£'000)

(5,105)

(4,005)

Add: Dividends paid during the year (£'000)

1,058

1,075

Net assets (ex income) (£'000)

310,086

344,022

Number of Ordinary shares in issue

104,991,348

106,697,348

NAV (ex income) per Ordinary share

295.34p

322.43p

Net gearing

Net gearing measures total borrowings less cash and cash equivalents divided by shareholders' funds, expressed as a percentage. Under AIC reporting guidance cash and cash equivalents includes net amounts due to and from brokers at the period end as well as cash and short-term deposits.  

2023

2022

Borrowings (£'000)

a

28,632

33,482

Cash (£'000)

b

2,166

7,824

Amounts due to brokers (£'000)

c

92

2,363

Amounts due from brokers (£'000)

d

-

1,141

Shareholders' funds (£'000)

e

314,133

346,952

Net gearing

(a-b+c-d)/e

8.5%

7.7%

Ongoing charges

The ongoing charges ratio has been calculated in accordance with guidance issued by the AIC as the total of investment management fees and administrative expenses and expressed as a percentage of the average daily net asset values published throughout the year.

2023

2022

Management fees (£'000)

1,890

2,340

Administrative expenses (£'000)

747

723

Less: non-recurring chargesA (£'000)

(14)

-

Ongoing charges (£'000)

2,623

3,063

Average net assets (£'000)

336,444

383,039

Ongoing charges ratio (excluding look-through costs)

0.78%

0.80%

Look-through costsB

0.35%

0.33%

Ongoing charges ratio (including look-through costs)

1.13%

1.13%

A Legal and professional fees considered unlikely to recur.

B Calculated in accordance with AIC guidance issued in October 2020 to include the Company's share of costs of holdings in investment companies on a look-through basis.

The ongoing charges ratio provided in the Company's Key Information Document is calculated in line with the PRIIPs regulations, which includes amongst other things, the cost of borrowings and transaction costs.

Total return

NAV and share price total returns show how the NAV and share price has performed over a period of time in percentage terms, taking into account both capital returns and dividends paid to shareholders. Share price and NAV total returns are monitored against open-ended and closed-ended competitors, and the Benchmark Index, respectively.  

Share

Year ended 30 April 2023

NAV

Price

Opening at 1 May 2022

a

325.17p

286.00p

Closing at 30 April 2023

b

299.20p

261.00p

Price movements

c=(b/a)-1

-8.0%

-8.7%

Dividend reinvestmentA

d

1.2%

1.4%

Total return

c+d

-6.8%

-7.3%

Share

Year ended 30 April 2022

NAV

Price

Opening at 1 May 2021

a

369.97p

328.50p

Closing at 30 April 2022

b

325.17p

286.00p

Price movements

c=(b/a)-1

-12.1%

-12.9%

Dividend reinvestmentA

d

1.1%

1.1%

Total return

c+d

-11.0%

-11.8%

A NAV total return involves investing the net dividend in the NAV of the Company with debt at fair value on the date on which that dividend goes ex-dividend. Share price total return involves reinvesting the net dividend in the share price of the Company on the date on which that dividend goes ex-dividend.  

 

Additional Notes to the Annual Financial Report

The Annual Financial Report Announcement is not the Company's statutory accounts. The above results for the year ended 30 April 2023 have been agreed with the auditor and are an abridged version of the Company's full accounts, which have been approved and audited with an unqualified report. The 2022 and 2023 statutory accounts received unqualified reports from the Company's auditor and did not include any reference to matters to which the auditor 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 2022 is derived from the statutory accounts for 2021 which have been delivered to the Registrar of Companies. The 2023 accounts will be filed with the Registrar of Companies in due course.

The Annual Report and Accounts will be posted to shareholders in August 2023. Copies will be available during normal business hours from the Secretary, abrdn Holdings Limited, 1 George Street, Edinburgh EH2 2LL or from the Company's website, www.newdawn-trust.co.uk*.

Please note that past performance is not necessarily a guide to the future and that the value of investments and the income from them may fall as well as rise and may be affected by exchange rate movements.  Investors may not get back the amount they originally invested.

 

By order of the Board

abrdn Holdings Limited

Company Secretary

16 August 2023

 

 

* Neither the Company's website nor the content of any website accessible from hyperlinks on it (or any other website) is (or is deemed to be) incorporated into, or forms (or is deemed to form) part of this announcement.

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