Annual Financial Report

RNS Number : 9189G

Aberdeen All Asia Inv Tst PLC

13 June 2013

 



ABERDEEN ALL ASIA INVESTMENT TRUST PLC

ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 31 MARCH 2013

1.       CHAIRMAN'S STATEMENT

Highlights

· Net Asset Value  +16.7% total return

· Share Price  +22.9% total return

I am pleased to report that your Company has again delivered a good result both in absolute terms and relative to the benchmark, the MSCI All Countries Asia Pacific (including Japan) Index. The net asset value rose by 16.7% in sterling terms on a total return basis, outperforming the 15.9% gain posted by the benchmark, which is the fourth successive year of NAV outperformance. Over the last 5 years, NAV total return has been 73.5% vs the benchmark return of 45.8% which reflects not just robust growth in Asia, but also the Manager's ability to add value across all the Asian markets through sustained investment in companies with good management, strong financials and commitment to shareholder value. This achievement is remarkable against the 5 year backdrop of a largely depressed market in Japan, very high Chinese and Indian growth rates followed by recent weakening, and a patchwork of shifting opportunities and challenges in other Asian markets.

Your Company's share price gained 20.9% to 384.5p during the year, reflecting both the good investment performance and the narrowing of the discount to net asset value from 11.51% at the start of the period to 7.04% at the end. No stock was bought back during the period and the total market value of the company rose to £56.1 million from £34.8 million five years ago.

Performance

Over the review period, the performance of Asian stockmarkets was marked by contrasting halves. In the first six months, sentiment was bruised by Europe's seemingly unending troubles, and continuing uncertainty in the run up to the US election. In Asia meanwhile, China and India, the twin engines of global economic expansion, were suffering a significant moderation in growth. In the latter half of the year global stock markets rose rapidly, driven in part by renewed monetary expansion by central banks, even though macro-economic fundamentals remained stubbornly slow to improve.

In Asia, the Japanese market was sharply re-rated, with the market benchmark gaining about 25% between December and March, triggered by resurgent investor expectations, following the Liberal Democrats' emphatic election victory and assertive promises of monetary easing by the Bank of Japan. It is still too early to be confident how quickly Japan's expansionary policies will work, but the Manager's disciplined bottom-up, stock-picking approach to investing is well suited to capture the value of any sustained recovery in Japan's economy.

The portfolio's performance, across Asia, against this challenging market background was good, despite some of the earlier outperformance being offset in the fourth quarter by the sharp market rise in Japan relative to the rest of Asia.  A more in-depth analysis of portfolio performance during the year is contained within the Manager's review.

Gearing benefited performance and reduced marginally from 10.2% to 9.2% during the year as the portfolio value increased. Given the significant amount of uncertainty in global financial markets borrowing was not increased during the year.

Revenue Account

The revenue return per share for the year under review was 5.13p compared to 6.03p in the previous year. The reduction in the revenue return was largely due to the absence of any stock dividends during the year. Administration expenses rose marginally but are closely controlled and the total expense ratio of 1.39% was only marginally higher than that for the previous year. In order to maintain its investment trust status, the Company is required to pay a final dividend and the Board is proposing a final dividend per share of 4.75p (2012 - 4.75p) payable on 26 July 2013 to shareholders on the register as at close of business on 28 June 2013. The ex-dividend date will be 26 June 2013.

Board

Investment Manager

The Board has reviewed the performance of the Manager. The performance and strengths of the Manager's investment team in the region confirm the Board in its view that the continuing appointment of Aberdeen Asset Management Asia as Manager, on the present terms, is in the interests of shareholders as a whole. The performance in the year to 31 March 2013, with the Net Asset Value of the Company outperforming the Index by 0.8%, means that the Manager has earned a performance fee of £43,000. This is calculated as 15% of the portfolio's outperformance of the benchmark during the period, and is about 0.06% of gross assets at the end of the year.

Regulatory Changes

During the year, the Board has reviewed carefully the impact of current and impending regulatory changes. Notable among these are the introduction of the RDR regime, which we believe has been broadly positive, the impending application of FATCA rules in the UK, which we believe now seem to be manageable for Investment Trusts such as this, and the implementation of the European AIFM Directive in the UK, regulations for which are still under development. Until there is clarity about the AIFMD implementing regulations, it is too early for the Board to decide its response to them, but we are confident that we shall be able to make any changes which are needed in a way which will minimise their impact on our current operations.

Board Composition

In line with its long term succession planning, the Board was pleased to appoint Karen Brade as a non-executive Director with effect from 1 May 2013. Karen brings over 20 years of investment experience in a range of sectors and markets, including equity and debt investing, portfolio management, fund raising and investor development in Asia. She will offer herself for election by shareholders at the forthcoming Annual General Meeting.

Outlook

Global markets remain vulnerable to financial and macroeconomic uncertainties. The signs of recovery in some countries such as US and Japan, are matched by prospects of slower growth in others. In Asia, there are concerns over China's cooling GDP growth and the potential impact of stricter oversight for financial products, as well as tough measures to cool the rampant property market. There is also scepticism over India's ability to follow through with the raft of proposed market-opening reforms initiated by the government. On the geopolitical front, tensions between the two Koreas and the on-and-off territorial spat between Japan and China, both simmer and each could produce further short term uncertainty. Developments in Myanmar also indicate that the balance of power in the region may be shifting.

Your Company has had an excellent performance over many years which compares well with other Asian Trusts and, now that a recovery in Japan appears possible, the overall outlook for the portfolio is improved.  The share price has also recently benefited from a reduction in the historically high, double digit, discount from its NAV though it continues to trade at a discount. However, the liquidity of the Company's shares remains low, the total expense ratio is hard to reduce and we face persistent difficulty in growing the company to a size that will widen its appeal to investors. This is not in the long term interests of the Company or its shareholders and your Board continues to look for ways in which the Company might be further strengthened.

Given the broadly positive longer term investment outlook, combined with the robust focus of the Manager on companies with the capacity to perform well in the face of the short term uncertainties, your Board is confident that the Company can sustain its good investment performance in the future.

Neil Gaskell

Chairman

12 June 2013

2.       MANAGER'S REVIEW

Overview

Despite a difficult macroeconomic backdrop, Asian equities did well during the year under review, with gains generated in the second half of the period offsetting early losses. Markets had started cautiously amid persistent global growth concerns and the Eurozone's worsening debt troubles. As speculation grew over Greece's possible exit from the currency union, risk aversion led to a sharp pullback in May. Rounds of crisis talks followed, with the European Central Bank's pledge to save the euro at all costs instrumental in turning sentiment around. Additional stimulus by other major central banks also bolstered stocks. Notably, the Federal Reserve pressed ahead with a third round of quantitative easing and promised to keep interest rates low until the labour market improved substantially. Japan also expanded its asset purchase programme to rejuvenate the economy. Regional equities maintained a broad uptrend thereafter, aided by evidence that growth, at least in China and the US, was improving. A belated compromise on US budget negotiations provided further impetus to markets. Towards the period-end, however, volatility resurfaced as the poorly managed bank bailout in Cyprus and political uncertainty in Italy reignited contagion fears. Markets slumped at one point, before regaining some ground to end firmer.

Overall, the Philippines stockmarket outperformed its regional peers, driven by positive macroeconomic data and decent corporate results; the country's improving fiscal management and strengthening economy helped it earn its first ever investment-grade rating from Fitch. Other markets within Southeast Asia, including Thailand and Indonesia, also saw stellar gains. In Australia, stocks strengthened on signs of economic stabilisation and renewed optimism for reforms in China following the smooth leadership transition; the mainland's demand for iron and coal has helped turn it into Australia's biggest trading partner. India, Korea and Taiwan also rose but recorded smaller returns. India lagged following impressive gains in 2012, as renewed domestic political uncertainty overshadowed initial optimism over the government's reform push, while Korea and Taiwan were hampered by weak external demand.

Also noteworthy was Japan's equity performance during the review period. Stocks there have rallied sharply since the general election was called in November, when it became clear that Shinzo Abe would return as prime minister. Indeed, he won by a landslide even though his previous one-year term was uneventful. His commitment to reforms that aim to pull the economy out of deflation and lower the value of the yen resonated well with investors.

However, the regional market rally belied a muted economic backdrop. Although most Asian economies continued to grow faster than their Western counterparts, the momentum has slowed considerably. In particular, China's economy decelerated after three decades of breakneck expansion. This was partly due to the new government's greater tolerance for slower growth as it rebalances the economy away from investment and exports towards domestic consumption. Tighter curbs on property speculation, including the revival of a 20% capital-gains tax, have also slowed construction. India's growth, too, languished on the back of global uncertainties and domestic constraints such as high inflation and wide deficits. Similarly the more open economies, such as Singapore, Korea and Taiwan, posted subdued growth rates, save for Thailand and the Philippines, which benefited from resilient domestic consumption and robust public spending. Inflation gathered pace across the region, but interest rates were trimmed or held steady as central banks shifted focus towards cushioning economies from global headwinds. Certainly in our meetings with company management, the mood remains cautious.

Portfolio review

Over the 12 months to 31 March 2013, the portfolio's net asset value per share gained 16.7% in sterling terms, outperforming the 15.9% rise in the benchmark MSCI AC Asia Pacific (including Japan) Index.

Notably, our holdings in the Philippines turned in exceptional performances. The stockmarket's rerating benefited our holdings in property developer Ayala Land and Bank of the Philippine Islands, which rose in tandem with the strong domestic market and on the back of solid earnings.

In Korea, our sole holding in Samsung Electronics fared better than the domestic market, which continued to face headwinds in the form of lower revenue and higher provisions for order cancellations or delays. A decent set of results buoyed the company as it gained traction in the global smartphone race. Not holding Hyundai Motor and Kia Motor also helped performance as the carmakers' shares corrected on the back of the strengthening Won. In Taiwan, stock selection was aided by a lack of exposure to electronics contract manufacturer Hon Hai, whose stock price fell on the back of concerns over weaker-than-expected iPhone demand. In addition our core holding, TSMC, gained as fourth-quarter results exceeded management's guidance.

Our Singapore holdings, in particular the more defensive stocks, fared similarly well.  ST Engineering benefited from double-digit profit growth in the first half of the period and enjoyed a good flow of new orders, while local lenders, UOB and OCBC, gained from decent results as non-interest income growth mitigated the pressure on margins from the low interest rate environment.

Against this, stock selection was negative in Australia despite a rebound in QBE Insurance's share price. Its earnings were in line with prior guidance and the new management will focus on cost-cutting and organic growth in the short-term. Mining company Rio Tinto was hurt by a decline in commodity prices and impairment charges arising from earlier acquisitions. While this is not ideal, we continue to like the company for its focus on cost controls as well as its ownership of world-class mines. Not holding any local banks also impeded performance as the lenders performed well on the back of decent results and good yields. Nevertheless, we still prefer our existing financial holdings that provide a greater exposure to economic growth in the region.

In Japan, our holdings Canon and Fanuc did not fully participate in the domestic market rally. Weaker-than-expected results hurt Canon, as lower camera sales outweighed gains in its office equipment business. Fanuc's share price weakened as it faced challenges amid the slowdown in China and Europe; the company subsequently lowered its full-year forecast. The lack of exposure to Japanese banks further impeded performance as they were among the major beneficiaries of the prime minister's new economic stimulus policies.

Several of our holdings in Hong Kong also lagged the broader market. ASM Pacific's share price fell on the back of weak results arising from a fall in assembly and packaging revenue, as the global semiconductor equipment market continued to be tough. However, the company is backed by a robust balance sheet. Hang Lung Group was dragged lower by property tightening measures in China and Hong Kong, while trading house Li & Fung posted poor full-year results due to restructuring efforts in the US. Nevertheless, management is determined to turn around its distribution business there.

Portfolio activity was measured as we divested two holdings to make room for another two. Earlier in the period we introduced Japan Tobacco, which is the third largest global cigarette-maker and leader in the domestic market. The company has been astute in its overseas acquisitions and will benefit from its exposure to emerging markets, supported by steady cash flows. We also established a position in Swiss drugmaker Roche's Japanese subsidiary Chugai Pharmaceutical because of its product pipeline, excellent R&D capabilities and robust balance sheet. Against this, we sold Malaysia-based British American Tobacco on valuation grounds. We also took advantage of a rebound in Hong Kong's Sun Hung Kai Properties share price in the last quarter of the period to exit the company, amid concerns over investigations involving its top executives.

Outlook

Abundant central bank liquidity has boosted Asian equities in recent months, but easy money has created some unwelcome side-effects for asset prices. Some governments have tightened measures in property and other asset classes to moderate the influx in search of higher returns. But another wave of inflows from the Bank of Japan's most recent plan to double the monetary base within two years risks stoking price pressures and inflating new asset bubbles.

Meanwhile, global economic conditions are expected to remain challenging, even if China may provide some support. Europe's debt problems are far from over; bailout fatigue pervades the core economies and fiscal austerity threatens to push the region deeper into recession. Growth in the US, albeit showing signs of a turning point, is still fragile. Geopolitical risks, including Japan's territorial dispute with China, regional tension from North Korea, as well as upcoming elections in Australia and Malaysia, could muddy the outlook further.

In all, the road ahead is expected to remain bumpy, but market volatility should provide opportunities for disciplined stock pickers. Earnings growth is also expected to be marginal in the circumstances. However, our holdings' sound finances and sustainable businesses provide assurance that they will be able to hold up against future challenges.

Aberdeen Asset Management Asia Limited

Manager

12 June 2013

3.    RESULTS

Financial Highlights

	31 March 2013	31 March 2012	% change
Total assets	£66,447,000	£58,695,000	+13.2
Total equity shareholders' funds (net assets)	£60,352,000	£52,439,000	+15.1
Share price (mid market)	384.50p	318.00p	+20.9
Net asset value per share	413.61p	359.38p	+15.1
Discount to net asset value	7.0%	11.5%
MSCI AC Asia Pacific (including Japan) Index (in Sterling terms) {B}	89.28	79.24	+12.7
Net gearing {A}	9.2%	10.2%
Operating costs
Ongoing charges ratio - excluding performance fee {C}	1.39%	1.33%
Ongoing charges ratio - including performance fee {C}	1.47%	2.16%
Earnings
Total return per share	58.98p	12.05p
Revenue return per share	5.13p	6.03p
Proposed final dividend per share	4.75p	4.75p
Revenue reserves (prior to payment of proposed final dividend)	£1,489,000	£1,434,000
{A}    Calculated in accordance with AIC guidance "Gearing Disclosures post RDR".
{B}    Index figures stated on a capital only basis.
{C}    Ongoing charges ratio calculated in accordance with guidance issued by the AIC as the total of the investment management fee and administrative expenses divided by the average cum income net asset value throughout the year. The figures for 2012 have been restated in accordance with AIC guidance.

Performance (total return) {A}

	1 year % return	3 year % return	5 year % return
Share price	+22.9%	+40.3%	+88.0%
Net asset value	+16.7%	+34.5%	+73.5%
MSCI AC Asia Pacific (including Japan) Index (in Sterling terms)	+15.9%	+17.7%	+45.8%
Source: Aberdeen Asset Management, Factset & Morningstar.
{A}Total return represents capital return plus dividends reinvested.

Dividends

	Rate	Ex-dividend date	Record date	Payment date
Proposed final dividend 2013	4.75p	26 June 2013	28 June 2013	26 July 2013
Final dividend 2012	4.75p	27 June 2012	29 June 2012	27 July 2012

.

4.       INVESTMENT PORTFOLIO

Top Ten Investments

As at 31 March 2013
			Valuation	Total	Valuation
			2013	assets	2012
Company	Sector	Country	£'000	%	£'000
Oversea-Chinese Banking Corporation
A well-run, conservative Singaporean bancassurance company seeking to generate additional value for shareholders via regional expansion.	Commercial Banks	Singapore	2,636	4.0	2,188
Samsung Electronics Pref
The leading semiconductor company that is also a major player in mobile phones and TFT-LCDs. We own the preferred shares, which trade at a discount to the ordinaries.	Semiconductors & Semiconductor Equipment	South Korea	2,377	3.6	2,171
Jardine Strategic Holdings
A holding company with its principal interests in Jardine Matheson, Hongkong Land, Dairy Farm, Mandarin Oriental, Jardine Cycle & Carriage and Astra International.	Industrial Conglomerates	Hong Kong	2,372	3.6	1,852
Shin-Etsu Chemical Company
Despite the challenging environment, the Japanese maker of specialised chemicals remains a leader in its industry, due to its technological edge and a greater focus on profits than most rivals.	Chemicals	Japan	2,295	3.5	2,011
Standard Chartered Bank (London listing)
Emerging market-focused bank with wholesale and consumer divisions. The company has emerged stronger from the global economic crisis relative to its peers and indeed posted record profits in 2009.	Commercial Banks	UK	2,285	3.4	1,902
QBE Insurance Group
A leading Australian general insurance and reinsurance firm that is geographically diversified and has a track record of generating good shareholder returns.	Insurance	Australia	2,134	3.2	2,066
Canon
A world leader in imaging products, printers and cameras and one of the best-performing companies in Japan. Canon has benefited from strong digital camera sales, particularly in the high-end SLR segment. Its prospects are strong, and valuations attractive.	Office Electronics	Japan	2,120	3.2	2,177
AIA Group
The Group offers life insurance, accident insurance, health insurance and wealth management solutions to individuals and businesses in the Asia Pacific region.	Insurance	Hong Kong	2,033	3.1	1,621
Taiwan Semiconductor Manufacturing Co
The world's largest dedicated semiconductor foundry, it provides wafer manufacturing, wafer probing, assembly and testing, mask production and design services.	Semiconductors & Semiconductor Equipment	Taiwan	1,860	2.8	1,512
HSBC Holdings
One of the world's largest banking and financial services institutions. Its international network comprises more than 5,000 offices in 80 countries and territories, operating in the Asia Pacific region, Europe, the Americas, the Middle East and Africa. The diversity of HSBC's business and exposure to faster growing regions of the world should enable it to deliver superior long-term growth.	Commercial Banks	Hong Kong	1,839	2.8	1,457
Top ten investments			21,951	33.2

Investment Portfolio - Other Investments

As at 31 March 2013
			Valuation	Total	Valuation
			2013	assets	2012
Company	Sector	Country	£'000	%	£'000
Honda Motor	Automobiles	Japan	1,701	2.6	1,488
Swire Pacific 'B'	Real Estate Management & Development	Hong Kong	1,692	2.6	1,449
Singapore Technologies Engineering	Aerospace & Defence	Singapore	1,685	2.5	1,330
Housing Development Finance Corporation	Thrifts and Mortgage Finance	India	1,677	2.5	1,393
Rio Tinto (London listing)	Metals & Mining	Australia	1,672	2.5	1,730
Toyota Motor Corporation	Automobiles	Japan	1,629	2.5	1,297
United Overseas Bank	Commercial Banks	Singapore	1,611	2.4	1,359
Takeda Pharmaceutical	Pharmaceuticals	Japan	1,494	2.2	1,589
China Mobile	Wireless Telecommunication Services	China	1,449	2.2	1,433
Unicharm	Household Products	Japan	1,442	2.2	1,465
Top twenty investments			38,003	57.4
Seven & I Holdings	Food & Staples Retailing	Japan	1,416	2.2	1,328
Infosys Limited	IT Services	India	1,409	2.1	1,222
City Developments	Real Estate Management & Development	Singapore	1,346	2.0	1,269
PetroChina	Oil, Gas & Consumable Fuels	China	1,333	2.0	1,240
BHP Billiton (London listing)	Metals & Mining	Australia	1,327	2.0	1,322
Siam Cement (Alien Mkt)	Construction Materials	Thailand	1,317	2.0	995
Singapore Telecommunications	Diversified Telecommunication Services	Singapore	1,288	1.9	1,057
Fanuc	Machinery	Japan	1,287	1.9	1,549
Ayala Land	Real Estate Management & Development	Philippines	1,072	1.6	726
PTT Exploration & Production (Alien Mkt)	Oil, Gas & Consumable Fuels	Thailand	1,032	1.6	1,097
Top thirty investments			50,830	76.7
Dairy Farm International	Food & Staples Retailing	Hong Kong	1,011	1.5	827
Keppel Corporation	Industrial Conglomerates	Singapore	987	1.5	299
Bank of Philippine Islands	Commercial Banks	Philippines	953	1.4	577
Taiwan Mobile	Wireless Telecommunication Services	Taiwan	939	1.4	940
Woolworths	Food & Staples Retailing	Australia	937	1.4	851
Chugai Pharmaceutical	Pharmaceuticals	Japan	926	1.4	-
Japan Tobacco	Tobacco	Japan	897	1.3	-
John Keells Holdings	Industrial Conglomerates	Sri Lanka	834	1.3	650
ICICI Bank	Commercial Banks	India	823	1.2	705
ASM Pacific Technology	Semiconductors & Semiconductor Equipment	Hong Kong	755	1.1	956
Top forty investments			59,892	90.2
Grasim Industries	Construction Materials	India	714	1.1	672
Hang Lung Group	Real Estate Management & Development	Hong Kong	683	1.0	740
Singapore Airlines	Airlines	Singapore	677	1.0	628
Venture Corporation	Electronic Equipment Instruments & Components	Singapore	598	0.9	551
CIMB Group Holdings	Commercial Banks	Malaysia	594	0.9	722
Li & Fung	Distributors	Hong Kong	554	0.8	571
Hang Lung Properties	Real Estate Management & Development	Hong Kong	509	0.8	475
Unilever Indonesia	Household Products	Indonesia	496	0.7	598
Public Bank Berhad (Alien Mkt)	Commercial Banks	Malaysia	467	0.7	456
Swire Properties	Real Estate Management & Development	Hong Kong	344	0.5	231
Ultratech Cement	Construction Materials	India	272	0.4	220
Total investments			65,800	99.0
Net current assets{A}			647	1.0
Total assets			66,447	100.0
{A} Excludes bank loans of £6,095,000.
Unless otherwise stated, foreign stock is held and all investments are equity holdings.
In the 2012 valuation column "-" denotes stock not held at last year end.

5.       BUSINESS REVIEW

The Business Review, in conjunction with the Annual Report and Financial Statements, including the Chairman's Statement and the Manager's Review, is intended to provide shareholders with the information and measures that the Directors use to assess, direct and oversee the Manager in the management of the Company's portfolio.

The portfolio at the year end, which contained 51 companies, is shown above.

The Board regularly reviews net gearing (as a proportion of total assets), which was 9.2% at 31 March 2013 (31 March 2012 - 10.2%). 

Performance

During the year ended 31 March 2013, the Company's net asset value per share rose 16.7%, which was ahead of its benchmark, the MSCI AC Asia Pacific (including Japan) Index, which rose 15.9% over the same period (all figures in Sterling total return terms).

Oversight and Review of Performance

The Board meets at least five times a year to review performance with the Manager. As well as carrying out the matters set out in the Statement of Corporate Governance, the Board receives, for each meeting, a detailed portfolio report and an analysis of economic indicators. The Board discusses performance and strategy, considering perceived regional risks and economic conditions and using such measures as attribution analysis against the benchmark, active weights and valuation matrices to assess the Company's success in achieving its objectives. The key performance indicators (KPIs) are established industry measures, and are as follows:

· net asset value (total return) relative to the Company's benchmark;

· share price (total return); and

· discount or premium of the share price to net asset value.

A record of these measures is disclosed in the Results. Performance is compared against the Company's benchmark and selected peer companies but, in view of the Manager's style of investing, there can be, in the short-term, considerable divergence from both comparators. 

Future Trends

The region's economies are growing, generally have strong trade and fiscal surpluses and developing capital markets. Nevertheless the past has demonstrated regional risks and the Board's view of the outlook is provided in the Chairman's Statement.

Principal Risks and Uncertainties

The Board regularly reviews major strategic risks and sets out delegated controls designed to manage those risks. 

Aside from the risks associated with investment in Asia, the key risks related to investment strategy, including inappropriate gearing, are managed through a defined investment policy, specific guidelines and restrictions and by the process of oversight at each Board meeting as outlined above.

Operational disruption, accounting and legal risks are also covered at least annually and regulatory compliance is reviewed at each Board meeting.

The major risks associated with the Company are:

· Resource risk: like most other investment trusts, the Company has no employees. The Company therefore relies on services provided by third parties, including, in particular, the Manager, to whom responsibility for the management of the Company's portfolio has been delegated under an investment management agreement (the "Agreement"). The Board reviews the performance of the Manager and third parties on a regular basis, and their compliance with their agreements formally on an annual basis.

· Investment and market risk: the Board continually monitors the investment policy of the Company, taking account of stockmarket factors, and reviews the Company's performance compared to its benchmark index. Further details on other risks relating to the Company's investment activities, including market price, interest rate, liquidity and foreign currency risks, are disclosed in Note 18 to the Financial Statements.

· Operational disruption risk: events beyond the control of the Company, such as natural disasters, could cause disruption to the Manager's business.  The Manager has a comprehensive business continuity plan in place in the event of a service disruption.

· Gearing risk: the Company currently uses gearing in the form of bank loans of US$7,440,000 (equivalent to approximately £4,900,000) and JPY170,622,000 (equivalent to approximately £1,195,000) under its loan facility of £10,000,000.

· Regulatory risk: the Company operates in a complex regulatory environment and faces a number of regulatory risks. Serious breaches of applicable regulations could lead to a number of detrimental outcomes and reputational damage. The Audit Committee monitors compliance with regulations by reviewing internal control reports from the Manager.  The Board regularly reviews the potential impact of new regulation and develops plans to respond in a timely manner. 

The particular risks of investment in Asia include:

     Investing in emerging markets may involve a higher element of risk due to political and economic instability and underdeveloped markets and systems, and may be illiquid.

     National policies may restrict investment opportunities, including restrictions on investing in issuers or industries deemed sensitive to national interests.

     Exchange rate fluctuations may cause the value of underlying overseas investments to be volatile affecting the value of the Company's investments and the income derived therefrom.

     Investment trusts may utilise gearing which will exaggerate market movements both down and up which could mean sudden and large falls in value.

6.       STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors are responsible for preparing the Directors' 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 the Directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable laws). 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 and 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 are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

To the best of my knowledge:

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

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

Neil Gaskell

Chairman

12 June 2013

INCOME STATEMENT

		Year ended 31 March 2013			Year ended 31 March 2012
		Revenue	Capital	Total	Revenue	Capital	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000
Gains on investments	9	-	8,072	8,072	-	1,425	1,425
Income	2	1,604	-	1,604	1,788	-	1,788
Exchange losses	16	-	(161)	(161)	-	(37)	(37)
Investment management fee	3	(446)	-	(446)	(435)	-	(435)
Performance fee	3	-	(43)	(43)	-	(426)	(426)
Administrative expenses	4	(292)	(10)	(302)	(253)	(32)	(285)
		_____	_____	_______	______	______	_____
Net return before finance costs and taxation		866	7,858	8,724	1,100	930	2,030
Finance costs	5	(109)	-	(109)	(102)	-	(102)
		_____	_____	_______	______	______	_____
Net return on ordinary activities before taxation		757	7,858	8,615	998	930	1,928
Taxation on ordinary activities	6	(9)	-	(9)	(72)	(6)	(78)
		_____	_____	_______	______	______	_____
Net return on ordinary activities after taxation		748	7,858	8,606	926	924	1,850
		_____	_____	_______	______	______	_____
Return per Ordinary share (pence)	8	5.13	53.85	58.98	6.03	6.02	12.05
		_____	_____	_______	______	______	_____
The total column of this statement represents the profit and loss account of the Company.
No Statement of Total Recognised Gains and Losses has been prepared as all gains and losses have been reflected in the Income Statement.
All revenue and capital items in the above statement derive from continuing operations.
The accompanying notes are an integral part of the financial statements.

BALANCE SHEET

		As at	As at
		31 March 2013	31 March 2012
	Notes	£'000	£'000
Fixed assets
Investments designated at fair value through profit or loss	9	65,800	58,048
		___________	___________
Current assets
Debtors	10	363	330
Cash at bank and in hand		513	913
		___________	___________
		876	1,243
		___________	___________
Creditors: amounts falling due within one year	11
Foreign currency bank loans		(6,095)	(6,256)
Other creditors		(229)	(596)
		___________	___________
		(6,324)	(6,852)
		___________	___________
Net current liabilities		(5,448)	(5,609)
		___________	___________
Net assets		60,352	52,439
		___________	___________
Share capital and reserves
Called-up share capital	12	1,459	1,529
Capital redemption reserve		2,273	2,203
Capital reserve	13	55,131	47,273
Revenue reserve		1,489	1,434
		___________	___________
Equity shareholders' funds		60,352	52,439
		___________	___________
Net asset value per Ordinary share (pence)	14	413.61	359.38
		___________	___________

RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS

For the year ended 31 March 2013
			Capital
		Share	redemption	Capital	Revenue
		capital	reserve	reserve	reserve	Total
		£'000	£'000	£'000	£'000	£'000
Balance at 31 March 2012		1,529	2,203	47,273	1,434	52,439
Treasury shares cancelled		(70)	70	-	-	-
Return on ordinary activities after taxation		-	-	7,858	748	8,606
Dividend paid (note 7)		-	-	-	(693)	(693)
		_____	_____	_______	______	______
Balance at  31 March 2013		1,459	2,273	55,131	1,489	60,352
		_____	_____	_______	______	______
For the year ended 31 March 2012
			Capital
	Share	Special	redemption	Capital	Revenue
	capital	reserve	reserve	reserve	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 31 March 2011	1,549	398	2,183	48,663	1,012	53,805
Purchase of own shares for cancellation	(6)	(102)	6	(79)	-	(181)
Purchase of own shares to be held in treasury	-	(296)	-	(2,235)	-	(2,531)
Treasury shares cancelled	(14)	-	14	-	-	-
Return on ordinary activities after taxation	-	-	-	924	926	1,850
Dividend paid (note 7)	-	-	-	-	(504)	(504)
	_____	_____	_______	______	______	______
Balance at  31 March 2012	1,529	-	2,203	47,273	1,434	52,439
	_____	_____	_______	______	______	______

CASHFLOW STATEMENT

		Year ended		Year ended
		31 March 2013		31 March 2012
	Notes	£'000	£'000	£'000	£'000
Net cash inflow from operating activities	15		474		353
Servicing of finance
Bank and loan interest paid			(109)		(114)
Taxation
Capital gains tax on sale of Indian shares			-		(6)
Financial investment
Purchases of investments		(3,552)		(5,400)
Sales of investments		3,804		8,038
Expenses allocated to capital		(2)		(6)
		______		______
Net cash inflow from financial investment			250		2,632
Equity dividends paid			(693)		(504)
			______		______
Net cash (outflow)/inflow before financing			(78)		2,361
Financing
Purchase of Ordinary share capital		-		(2,712)
Loan (repaid)/drawn down		(302)		477
		______		______
Net cash outflow from financing			(302)		(2,235)
			______		______
(Decrease)/increase in cash	16		(380)		126
			______		______
Reconciliation of net cash flow to movements in net debt
(Decrease)/increase in cash as above			(380)		126
Decrease/(increase) in borrowings			302		(477)
			______		______
Change in net debt resulting from cash flows			(78)		(351)
Exchange movements			(161)		(37)
			______		______
Movement in net debt in the year			(239)		(388)
Opening net debt			(5,343)		(4,955)
			______		______
Closing net debt	16		(5,582)		(5,343)
			______		______

NOTES :

Notes to the Financial Statements
For the year ended 31 March 2013
1.	Accounting policies
	(a)	Basis of accounting and going concern
		The financial statements have been prepared under the historical cost convention, except for the measurement at fair value 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.
	(b)	Valuation of investments
		The Company's business is investing in financial assets with a view to profiting from their total return in the form of income and capital growth. This portfolio of financial assets is managed and its performance evaluated on a fair value basis, in accordance with a documented investment strategy, and information about the portfolio is provided internally on that basis to the Company's Board of Directors. Accordingly, upon initial recognition the Company designates the investments 'at fair value through profit or loss'. Fair value is taken to be the investment's cost at the trade date (excluding expenses incidental to the acquisition which are written off in the Income Statement, and allocated to 'capital' at the time of acquisition).
		Subsequent to initial recognition, investments continue to be designated at fair value through profit or loss, which is deemed to be bid prices, where the bid price is available, or otherwise at fair value based on published price quotations.
	(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 interest rate on shares. 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 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.
		Where applicable the dividend income is disclosed net of irrecoverable Malaysian and Singaporean taxes deducted at source. UK dividend income is recorded net of tax credits.
	(d)	Expenses
		All expenses are accounted for on an accruals basis. Expenses are allocated to revenue in the Income Statement except as follows:
		expenses which are incidental to the acquisition or disposal of an investment are allocated to capital in the Income Statement and separately identified and disclosed in note 9; and
		expenses are allocated and borne by capital where a connection with the maintenance or enhancement of the value of the investments can be demonstrated. In this respect performance fees are charged 100% to the capital reserve.
	(e)	Taxation
		The charge for taxation is based on the revenue return for the financial period.
		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 reserve
		Gains and losses on realisation of investments and changes in fair values of investments are transferred to the capital reserve.
	(g)	Foreign currencies
		Transactions involving foreign currencies are converted at the rate ruling at the date of the transaction.
		Foreign currency asset and liability balances are translated to Sterling at the middle rate of exchange at the year end. Differences arising from translation are treated as capital gain or loss to capital or revenue within the Income Statement depending upon the nature of the gain or loss.
	(h)	Dividends payable
		Final dividends are recognised in the financial statements in the period in which they are paid.
	(i)	Borrowings
		All secured borrowings are initially recognised at cost, being the fair value of the consideration received, less issue costs where applicable, after initial recognition, all interest bearing borrowings are subsequently measured at amortised cost.

		2013	2012
2.	Income	£'000	£'000
	From investments designated at fair value through profit and loss:
	UK dividend income	253	184
	Overseas dividends	1,351	1,415
	Scrip dividends	-	189
		______	______
	Total income	1,604	1,788
		______	______

		2013			2012
		Revenue	Capital	Total	Revenue	Capital	Total
3.	Investment management fee	£'000	£'000	£'000	£'000	£'000	£'000
	Investment management fee	446	-	446	435	-	435
	Performance fee	-	43	43	-	426	426
		______	______	_____	______	______	_____
	Total	446	43	489	435	426	861
		______	______	_____	______	______	_____
	During the year the management fee was payable monthly in arrears and was based on an annual amount of 0.75% of total assets less current liabilities of the Company valued monthly. The agreement is terminable on six months' notice. The balance due to AAM Asia at the year end was £83,000 (2012 - £37,000).
	AAM Asia is entitled to a performance related fee of up to 15% of the portfolio's outperformance of the MSCI AC Asia Pacific (including Japan) Index (in Sterling terms) for the year in question.
	In the event that the Company outperforms this benchmark, but the year end net asset value per Ordinary share is less than at the previous year end, the performance fee is capped at 0.3% of year end net asset value. The performance fee is only payable where the final net asset value on which the fee is calculated exceeds the net asset value (adjusted by any change in the benchmark index over the period) on which the last performance fee was paid.
	There was a performance fee due to AAM Asia for the year ended 31 March 2013 in the sum of £43,000 (2012 - £426,000).

			2013			2012
		Revenue	Capital	Total	Revenue	Capital	Total
4.	Administrative expenses	£'000	£'000	£'000	£'000	£'000	£'000
	Investor relations/Marketing initiative	40	-	40	44	-	44
	Directors' fees	70	-	70	70	-	70
	Safe custody fees	23	2	25	21	6	27
	Transaction costs on investment purchases	-	8	8	-	26	26
	Auditors' remuneration:
	audit of the financial statements{A}	20	-	20	20	-	20
	Other	139	-	139	98	-	98
		______	______	_____	______	______	_____
		292	10	302	253	32	285
		______	______	_____	______	______	_____
	{A} Includes work carried out on the Directors' Remuneration Report, Statement of Corporate Governance and Directors' Report.
	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 £40,000 (2012 - £44,000) and the accrual to AAM at the year end was £10,000 (2012 - £2,000).
	No pension contributions were made in respect of any of the Directors.
	The Company does not have any employees.

		2013			2012
		Revenue	Capital	Total	Revenue	Capital	Total
5.	Finance costs	£'000	£'000	£'000	£'000	£'000	£'000
	Bank loans and overdrafts	109	-	109	102	-	102
		______	______	______	______	______	______

			2013			2012
			Revenue	Capital	Total	Revenue	Capital	Total
6.	Taxation on ordinary activities		£'000	£'000	£'000	£'000	£'000	£'000
	(a)	Analysis of charge for the year
		Capital gains tax on sale of Indian shares	-	-	-	-	6	6
		Irrecoverable overseas taxation	74	-	74	72	-	72
		Overseas withholding tax reclaimable	(65)	-	(65)	-	-	-
			______	______	______	______	______	______
		Current taxation	9	-	9	72	6	78
			______	______	______	______	______	______
	(b)	Factors affecting current tax charge for the year
		The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The differences can be explained below:
							2013	2012
							£'000	£'000
		Net return on ordinary activities before taxation					8,615	1,928
							______	______
		Net return on ordinary activities multiplied by standard rate of corporation tax in the UK of 24% (2012 - 26%)					2,068	501
		Effects of:
		UK dividend income					(61)	(48)
		Gains on investments not taxable					(1,937)	(371)
		Currency losses not taxable					39	10
		Tax on capital expenses					13	119
		Capital gains tax on sale of Indian shares					-	6
		Irrecoverable overseas withholding tax suffered					74	72
		Overseas withholding tax reclaimable					(65)	-
		Excess management expenses and loan relationship deficits not utilised in period					202	204
		Non-taxable overseas dividends					(324)	(417)
		Expenses not deductible for tax purposes					-	2
							______	______
		Current tax charge for the year					9	78
							______	______
	(c)	Provision for deferred taxation
		At 31 March 2013 the Company had surplus management expenses and loan relationship debits with a tax value of £1,307,000 (2012 - £1,151,000) 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 the future in excess of 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.

		2013	2012
7.	Dividends	£'000	£'000
	Amounts recognised as distributions to equity holders in the year:
	Final dividend 2012 - 4.75p (2011 - 3.25p)	693	504
		______	______
	In order to comply with the requirements of Sections 1158-1159 of the Corporation Tax Act 2010 the Company is required to make a final dividend distribution.
	The proposed final dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability.
	The table below sets out the total dividends proposed in respect of the financial year, which is the basis on which the requirements of Sections 1158 -1159 are considered. The revenue available for distribution by way of dividend for the year is £1,489,000 (2012 - £1,434,000). Presently, only the revenue reserve can be used for the distribution of dividends.
		2013	2012
		£'000	£'000
	Proposed final dividend for 2013 - 4.75p per Ordinary share (2012 -  4.75p)	693	693
		______	______
	The proposed final dividend will be paid, subject to approval at the Annual General Meeting, on 23 July 2013 to shareholders on the register at the close of business on 28 June 2013.

		2013	2013	2012	2012
8.	Return per Ordinary share	p	£'000	p	£'000
	Returns per share are based on the following figures:
	Revenue return	5.13	748	6.03	926
	Capital return	53.85	7,858	6.02	924
		______	______	______	______
	Total return	58.98	8,606	12.05	1,850
		______	______	______	______
	Weighted average Ordinary shares in issue		14,591,572		15,349,072
			_________		_________

		Listed	Listed
		overseas	in UK	Total
9.	Investments designated at fair value through profit or loss	£'000	£'000	£'000
	Opening book cost	37,483	4,031	41,514
	Opening investment holding gains	15,611	923	16,534
		______	______	______
	Opening fair value	53,094	4,954	58,048
	Movements in the year:
	Purchases at cost (excluding transaction costs)	3,176	288	3,464
	Sales - proceeds (net of transaction costs)	(3,784)	-	(3,784)
	Sales - gains on sales	1,317	-	1,317
	Increase in investment holding gains	6,713	42	6,755
		______	______	______
	Closing fair value	60,516	5,284	65,800
		______	______	______
		Listed	Listed
		overseas	in UK	Total
		£'000	£'000	£'000
	Closing book cost	38,192	4,319	42,511
	Closing investment holding gains	22,324	965	23,289
		______	______	______
		60,516	5,284	65,800
		______	______	______
			2013	2012
			£'000	£'000
	Investments listed on a recognised investment exchange		65,800	58,048
			______	______
			2013	2012
	Gains on investments		£'000	£'000
	Gains on sales		1,317	1,434
	Increase/(decrease) in investment holding gains		6,755	(9)
			______	______
			8,072	1,425
			______	______
	Transaction costs
	During the year expenses were incurred in acquiring or disposing of investments designated as fair value through profit or loss. Expenses incurred in acquiring investments have been expensed through capital and are included within administration expenses in the Income Statement, whilst expenses incurred in disposing of investments have been expensed through capital and are included within gains on investments in the Income Statement. The total costs were as follows:
			2013	2012
			£'000	£'000
	Purchases		8	26
	Sales		11	25
			______	______
			19	51
			______	______

		2013	2012
10.	Debtors: amounts falling due within one year	£'000	£'000
	Amounts due from brokers	-	20
	Prepayments and accrued income	295	306
	Withholding tax debtor	66	-
	Other loans and receivables	2	4
		______	______
		363	330
		______	______

			2013	2012
11.	Creditors: amounts falling due within one year		£'000	£'000
	(a)	Foreign currency bank loans	6,095	6,256
			______	______
		In January 2011, the Company entered into a two year £10,000,000 multi-currency revolving credit facility with Standard Chartered Bank, which was extended in January 2013 until 25 January 2014. At the year end, US$7,440,000 (2012 - US$7,820,000) equivalent to £4,900,000 (2012 - £4,895,000) had been drawn down from Standard Chartered Bank at an all-in interest rate of 1.20420% (2012 - 1.67265%) which matured on 25 April 2013. At the year end, JPY170,622,000 (2012 - JPY179,000,000) equivalent to £1,195,000 (2012 - £1,361,000) had been drawn down from Standard Chartered Bank at an all-in interest rate of 1.12429% (2012 - 1.34571%) which matured on 25 April 2013.
		On 25 April 2013, the principal amounts of the loans were rolled forward into loans of US$7,440,000 and JPY170,622,000 at all-in interest rates of 1.20020% and 1.12286% respectively, until maturity on 24 May 2013.
		The terms of the loan facility with Standard Chartered Bank contain a covenant that total borrowings should not exceed 25% of the net asset value of the Company at any time and that the net asset value should not fall below £30,000,000 at any time. The Company met this covenant throughout the period.
			2013	2012
	(b)	Other creditors and accrued expenses	£'000	£'000
		Amounts due to brokers	-	80
		Performance fee	43	426
		Other creditors	186	90
			______	______
			229	596
			______	______

			2013	2012
12.	Called-up share capital		£'000	£'000
	Allotted, called-up and fully paid
	Ordinary shares of 10p each		1,459	1,459
	Treasury shares		-	70
			______	______
			1,459	1,529
			______	______
		Ordinary shares	Treasury shares	Total
		Number	Number	Number
	At 1 April 2012	14,591,572	700,000	15,291,572
	Treasury shares cancelled	-	(700,000)	(700,000)
		________	________	________
	At 31 March 2013	14,591,572	-	14,591,572
		________	________	________
	No Ordinary shares were bought back for cancellation during the year. During the year to 31 March 2012, 900,795 Ordinary shares of 10p each (representing 5.9% of the issued Ordinary share capital at 31 March 2012) were bought back at a total cost of £2,712,000 including expenses. This number includes 840,795 Ordinary shares of 10p each which were placed in treasury. Subsequent to this, 140,795 of these shares were cancelled.
	During the year, the remaining 700,000 shares held in treasury were cancelled.

		2013	2012
13.	Capital reserve	£'000	£'000
	At 1 April 2012	47,273	48,663
	Movement in investment holdings fair value gains/(losses)	6,755	(9)
	Gains on realisation of investments at fair value	1,317	1,434
	Exchange losses	(161)	(37)
	Performance fee	(43)	(426)
	Administrative expenses	(10)	(32)
	Capital gains tax on sale of Indian shares	-	(6)
	Purchase of own shares for cancellation	-	(79)
	Purchase of own shares to be held in treasury	-	(2,235)
		________	________
	At 31 March 2013	55,131	47,273
		________	________
	The capital reserve includes investment holding gains amounting to £23,289,000 (2012 - £16,534,000) as disclosed in note 9.

14.	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:
		Net asset value		Net asset values
		per share		attributable
		2013	2012	2013	2012
		p	p	£'000	£'000
	Ordinary shares	413.61	359.38	60,352	52,439
		________	________	________	________
	The movements during the year of the assets attributable to the Ordinary shares were as follows:
				2013	2012
				£'000	£'000
	Net assets attributable at 1 April			52,439	53,805
	Buyback of Ordinary shares (including expenses)			-	(2,712)
	Capital return for the year			7,858	924
	Revenue on ordinary activities after taxation			748	926
	Dividend paid			(693)	(504)
				________	________
	Net assets attributable at 31 March			60,352	52,439
				________	________
	The net asset value per Ordinary share is based on net assets, and on 14,591,572 (2012 - 14,591,572) Ordinary shares, being the number of Ordinary shares in issue at the year end.

15.	Reconciliation of net return before finance costs and taxation	2013	2012
	to net cash inflow from operating activities	£'000	£'000
	Return on ordinary activities before finance costs and taxation	8,724	2,030
	Adjustments for:
	Gains on investments	(8,072)	(1,425)
	Expenses taken to capital reserve	10	32
	Foreign exchange movements	161	37
	Decrease/(increase) in accrued income	11	(27)
	Increase in other debtors	(64)	(2)
	Increase/(decrease) in other creditors	96	(35)
	(Decrease)/increase in performance fee creditor	(383)	4
	Overseas withholding tax suffered	(9)	(72)
	Scrip dividends included in investment income	-	(189)
		________	________
	Net cash inflow from operating activities	474	353
		________	________

		1 April	Cash	Exchange	31 March
		2012	flow	movements	2013
16.	Analysis of changes in net debt	£'000	£'000	£'000	£'000
	Cash at bank	913	(380)	(20)	513
	Debts falling due within one year	(6,256)	302	(141)	(6,095)
		________	________	________	________
	Net debt	(5,343)	(78)	(161)	(5,582)
		________	________	________	________

17.	Related party disclosures
	There were no material related party transactions during the year.

18.	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 main financial risks that the Company faces from its financial instruments are market price risk, interest rate risk, liquidity risk and credit risk.
	The Board has established policies for managing each of these risks and reviews regularly their implementation by the Manager. The Company's policies for managing these risks are summarised below and have been applied throughout the year.
	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 two elements - security price risk and currency risk.
	Security price risk
	Changes in market prices for the Company's portfolio of securities directly affect their reported value in the Balance Sheet.
	It is the Board's investment policy for the Company's assets to be invested in a selected portfolio of securities in quoted companies. The Manager has a dedicated investment management process, which ensures that the risk inherent in this investment policy is controlled. Underlying the process is the belief that risk is not that individual stock prices fluctuate in the short term, or that movement in the value of the portfolio deviates from the benchmark but that risk is investment in poorly managed expensive companies which the Manager does not understand. In-depth research and stock selection procedures are in place based on this risk control philosophy. The portfolio is reviewed on a periodic basis by the Manager's Investment Committee and by the Board.
	Security price 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 31 March 2013 would have increased/(decreased) by £6,580,000 (2012 increased/(decreased) by £5,805,000) and equity reserves would have increased/(decreased) by the same amount.
	Foreign currency risk
	All of the Company's investment portfolio is invested in overseas securities or securities which carry out a significant proportion of their activities overseas and the Balance Sheet, therefore, can be significantly affected by movements in foreign exchange rates. It is not the Company's policy to hedge this risk on a continuing basis but the Company may, from time to time, match specific overseas investment with foreign currency borrowings. The Company's borrowings, as detailed in note 11, are also in foreign currency.
	The revenue account is subject to currency fluctuation arising on dividends paid in foreign currencies. The Company does not hedge this currency risk.
	Foreign currency risk exposure by currency of denomination:
		31 March 2013			31 March 2012
			Net	Total		Net	Total
		Overseas	monetary	currency	Overseas	monetary	currency
		investments	assets	exposure	investments	assets	exposure
		£'000	£'000	£'000	£'000	£'000	£'000
	Australian Dollar	3,071	9	3,080	2,917	-	2,917
	Hong Kong Dollar	11,191	-	11,191	10,707	-	10,707
	Indian Rupee	4,895	-	4,895	4,212	-	4,212
	Indonesian Rupiah	496	1	497	598	-	598
	Japanese Yen	15,207	(1,195)	14,012	12,904	(1,361)	11,543
	Korean Won	2,377	-	2,377	2,171	-	2,171
	Malaysian Ringgit	1,061	-	1,061	1,728	-	1,728
	Philippine Peso	2,025	-	2,025	1,303	20	1,323
	Singapore Dollar	10,828	-	10,828	8,681	-	8,681
	Sri Lanka Rupee	834	-	834	650	-	650
	Taiwan Dollar	2,799	72	2,871	2,452	156	2,608
	Thailand Baht	2,349	-	2,349	2,092	-	2,092
	US Dollar	3,383	(4,894)	(1,511)	2,679	(4,792)	(2,113)
		________	________	________	________	________	________
	Total	60,516	(6,007)	54,509	53,094	(5,977)	47,117
		________	________	________	________	________	________

	Foreign currency sensitivity
	There is no sensitivity analysis included as the Company's significant foreign currency financial instruments are in the form of equity investments, which have been included within security price risk sensitivity analysis so as to show the overall level of exposure. Due consideration is paid to foreign currency risk throughout the investment process.
	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 rate sensitivity
	Movements in interest rates would not significantly affect net assets attributable to the Company's shareholders and total profit.
	Liquidity risk
	This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities. Liquidity risk is not considered to be significant as the Company's assets mainly comprise readily realisable securities which can be sold to meet funding requirements if necessary and short-term flexibility is achieved through the use of loan facilities, details of which may be found in note 11.
	Liquidity risk exposure
	At 31 March 2013 and 31 March 2012 the Company's bank loans, amounting to £6,095,000 and £6,256,000, respectively, were both due for repayment or roll-over within six months along with interest due on the amount of the principal at the same time.
	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 significant given the relatively small amounts involved, and is managed as follows:
	investment transactions are carried out with a large number of brokers of good quality credit standing; and
	cash is held only with reputable banks with high quality external credit enhancements.
	In addition, both stock and cash reconciliations to the Custodians' records are performed on a daily basis to ensure discrepancies are investigated on a timely basis.
	None of the Company's financial assets is secured by collateral or other credit enhancements and none are past due or impaired.
	Credit risk exposure
	The amount of cash at bank and in hand of £513,000 (2012 - £913,000) and debtors of £363,000 (2012 - £330,000) in the Balance Sheet represent the maximum exposure to credit risk at 31 March.
	Fair values of financial assets and financial liabilities
	All financial assets and financial liabilities of the Company are included in the Balance Sheet at fair value.

19.	Capital management policies and procedures
	The Company's capital management objectives are:
	to ensure that the Company will be able to continue as a going concern; and
	to maximise the income and capital return to its equity shareholders through an appropriate balance of equity capital and debt. The Board normally seeks to limit gearing to 15% of net assets.
	The Board monitors and reviews the broad structure of the Company's capital on an ongoing basis. This review includes the nature and planned level of gearing, which takes account of the Manager's views on the market 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 and year end positions are presented in the Balance Sheet.

20.	Contingent liabilities
	The Company had no contingent liabilities at 31 March 2013.

21.	Fair value hierarchy
	FRS 29 'Financial Instruments: Disclosures' requires an entity to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels:
	Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
	Level 2: inputs other than quoted prices included within Level 1 that are observable for the assets or liability, either directly (ie as prices) or indirectly (ie derived from prices); and
	Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
	All of the Company's investments are in quoted equities (2012 - same) actively traded on recognised stock exchanges, with their fair value being determined by reference to their quoted bid prices at the reporting date. The total value of the investments (2013 - £65,800,000; 2012 - £58,048,000) have therefore been deemed as Level 1.

22.     Additional notes for Annual Financial Report:

          The final dividend, subject to shareholder approval, will be paid on 26 July 2013 to shareholders on the register at the close of business on 28 June 2013. The ex-dividend date is 26 June 2013.

          This Annual Financial Report announcement is not the Company's statutory accounts.  The statutory accounts for the year ended 31 March 2012 have been delivered to the Registrar of Companies.  The statutory accounts for the years ended 31 March 2012 and 31 March 2013 received an audit report which was unqualified, did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying the report and did not include a statement under section 498(2) or (3) of the Companies Act 2006.  The statutory accounts for the financial year ended 31 March 2012 have been approved by the Board and audited but will not be filed with the Registrar of Companies until after the Company's Annual General Meeting which will be held at 11.00am on 23 July 2013 at Bow Bells House, One Bread Street, London EC4M 9HH.

          The Annual Report will be posted to shareholders in June 2013 and copies will be available from the Manager or from the Company's website (www.all-asia.co.uk*).

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

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

For Aberdeen All Asia Investment Trust PLC

Aberdeen Asset Management PLC, Secretary

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