REG - Aberdeen New Dawn IT - Annual Financial Report <Origin Href="QuoteRef">ABD.L</Origin> - Part 4
20/06/2017 07:05
- Part 4: For the preceding part double click ID:nRST5229Ic
_______ _______ _______
Closing book cost 133,772 23,661 157,433
Closing fair value gains on investments held 148,516 7,581 156,097
_______ _______ _______
282,288 31,242 313,530
_______ _______ _______
2017 2016
£'000 £'000
Investments listed on an overseas investment exchange 282,288 212,782
Investments listed on the UK investment exchange 31,242 27,127
_______ _______
313,530 239,909
_______ _______
2017 2016
Gains/(losses) on investments held at fair value through profit or loss £'000 £'000
Realised gains on sales 14,141 4,701
Increase/(decrease) in fair value gains on investments held 66,061 (50,330)
_______ _______
80,202 (45,629)
_______ _______
Transaction costs
During the year expenses were incurred in acquiring or disposing of investments classified as fair value through profit or loss. These have been expensed through capital and are included within gains/(losses) on investments held at fair value through profit or loss in the Statement of Comprehensive Income. The total costs were as follows:
2017 2016
£'000 £'000
Purchases 46 32
Sales 85 34
_______ _______
131 66
_______ _______
2017 2016
11. Debtors £'000 £'000
Prepayments and accrued income 980 1,244
Other loans and receivables 72 75
_______ _______
1,052 1,319
_______ _______
2017 2016
12. Creditors £'000 £'000
Amounts falling due within one year:
a) Loans
Foreign currency loans 22,024 19,486
Sterling loan 2,500 2,500
_______ _______
24,524 21,986
_______ _______
2017 2016
b) Other £'000 £'000
Amounts due to brokers 117 63
Other creditors 469 305
_______ _______
586 368
_______ _______
2017 2016
Non-current creditors: £'000 £'000
Sterling loan 5,000 5,000
_______ _______
At the year end the Company's secured floating rate bank loans of
HK$154,100,000 (2016 - HK$154,100,000), equivalent to £15,315,000 (2016 -
£13,561,000), US$8,680,000 (2016 - US$8,680,000), equivalent to
£6,709,000 (2016 - £5,925,000), £2,500,000 (2016 - £2,500,000), with a
maturity date of 24 May 2017 (2016 - 25 May 2016), and fixed rate bank
loan of £5,000,000 (2016 - £5,000,000), were drawn down from the
£35,000,000 facility with The Royal Bank of Scotland at interest rates of
1.41%, 1.99%, 1.26% and 2.75% (2016 - 1.23%, 1.44%, 1.51% and 2.75%)
respectively.
As of the latest date prior to the signing of this Report the
HK$154,100,000, US$8,680,000 and £2,500,000 loans had been drawn down to
23 June 2017 at interest rates of 2.02004%, 1.36339% and 1.25101%
respectively.
The terms of the bank loan with The Royal Bank of Scotland 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.)
- the facility, under which the loans are made, will expire on 7
October 2019.
The Company has met all financial covenants throughout the period and up
to the date of this Report.
2017 2016
13. Called-up share capital £'000 £'000
Allotted, called up and fully paid:
116,862,098 (2016 - 120,519,010) Ordinary shares of 5p each 5,843 6,026
Held in treasury:
10,073,567 (2016 - 6,416,655) Ordinary shares of 5p each 504 321
_______ _______
6,347 6,347
_______ _______
During the year 3,656,912 (2016 - 3,814,000) Ordinary shares of 5p each were repurchased by the Company at a total cost, including transaction costs, of £6,875,000 (2016 - £5,807,000). All of the shares were placed in treasury. Shares held in treasury represent 8.62% of the Company's total issued share capital at 30 April 2017. 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 565,000 Ordinary shares for a total consideration of £1,238,000.
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.
2017 2016
14. Capital reserve £'000 £'000
At 1 May 2016 163,906 211,550
Movement in fair value gains/(losses) 80,202 (45,629)
Foreign exchange movement (2,477) (959)
Buy back of Ordinary shares for treasury (1,464) -
Expenses allocated to capital (1,067) (1,056)
_______ _______
At 30 April 2017 239,100 163,906
_______ _______
The capital reserve includes investment holding gains amounting to £156,097,000 (2016 - £90,036,000), 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:
2017 2016
Net assets attributable (£'000) 286,191 216,243
Number of Ordinary shares in issue (excluding shares held in treasury) 116,862,098 120,519,010
Net asset value per share (p) 244.90 179.43
16. 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 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 Aberdeen Fund Managers
Limited 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
Aberdeen Group, which provides a variety of
services and support to AFML in the conduct of
its business activities, including in the
oversight of the risk management framework for
the Company. The AIFM has delegated the day to
day administration of the investment policy to
Aberdeen Asset Management 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, Risk Management
and Legal. The team is headed up by the
Group's Head of Risk, who reports to the Chief
Executive Officer of the Group. The Risk
Division achieves its objective through
embedding the Risk Management Framework
throughout the organisation using the Group's
operational risk management system ("SWORD").
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 of Aberdeen, 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 2017 Years % £'000 £'000
Assets
Sterling - - - 1,652
Taiwan Dollar - - - 5
US Dollar - - - 56
Vietnam Dong - - - 6
_______ _______
- 1,719
_______ _______
Weighted average Weighted
period for which average Fixed Floating
rate is fixed interest rate rate rate
Years % £'000 £'000
Liabilities
Bank loan - £2,500,000 0.08 1.26 2,500 -
Bank loan - £5,000,000 2.44 2.75 5,000 -
Bank loan - HK$154,100,000 0.08 1.41 15,315 -
Bank loan - US$8,680,000 0.08 1.99 6,709 -
_______
29,524 -
_______
Weighted average Weighted
period for which average Fixed Floating
rate is fixed interest rate rate rate
At 30 April 2016 Years % £'000 £'000
Assets
Indonesian Rupiah - - - 15
Sterling - 0.20 - 2,351
Taiwan Dollar - - - 3
_______ _______
- 2,369
_______ _______
Weighted average Weighted
period for which average Fixed Floating
rate is fixed interest rate rate rate
Years % £'000 £'000
Liabilities
Bank loan - £2,500,000 0.08 1.51 2,500 -
Bank loan - £5,000,000 3.44 2.75 5,000 -
Bank loan - HK$154,000,000 0.08 1.23 13,561 -
Bank loan - US$8,680,000 0.08 1.44 5,925 -
_______
26,986 -
_______ _______
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
All of the Company's investment portfolio is
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 also in foreign
currency.
The revenue account is subject to currency
fluctuation arising on dividends paid in
foreign currencies. The Company does not hedge
this currency risk.
Foreign currency exposure by currency of
denomination:
30 April 2017 30 April 2016
Net Total Net Total
monetary currency monetary currency
Investments assets exposure Investments assets exposure
£'000 £'000 £'000 £'000 £'000 £'000
Australian Dollar 9,173 - 9,173 12,040 - 12,040
Hong Kong Dollar 57,463 (15,315) 42,148 48,161 (13,561) 34,600
Indonesian Rupiah 11,839 - 11,839 6,196 15 6,211
Malaysian Ringgit 5,726 - 5,726 4,772 - 4,772
Philippine Peso 9,447 - 9,447 8,233 - 8,233
Singapore Dollar 54,882 - 54,882 48,569 - 48,569
South Korean Won 26,925 - 26,925 18,114 - 18,114
Sri Lankan Rupee 5,469 - 5,469 6,175 - 6,175
Sterling 70,406 (5,848) 64,558 51,801 (5,149) 46,652
Taiwanese Dollar 16,387 5 16,392 13,164 3 13,167
Thailand Baht 8,451 - 8,451 7,725 - 7,725
US Dollar 33,956 (6,653) 27,303 13,911 (5,925) 7,986
Vietnam Dong 3,406 6 3,412 1,048 - 1,048
_______ _______ _______ _______ _______ _______
Total 313,530 (27,805) 285,725 239,909 (24,617) 215,292
_______ _______ _______ _______ _______ _______
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.
2017 2016
£'000 £'000
Australian Dollar 917 1,204
Hong Kong Dollar 4,215 3,460
Indonesian Rupiah 1,184 621
Malaysian Ringgit 573 477
Philippine Peso 945 823
Singapore Dollar 5,488 4,857
South Korean Won 2,693 1,811
Sri Lankan Rupee 547 618
Taiwanese Dollar 1,639 1,317
Thailand Baht 845 773
US Dollar 2,730 799
Vietnam Dong 341 105
_______ _______
22,117 16,865
_______ _______
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
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