REG - Edinburgh Dragon Tst - Annual Financial Report <Origin Href="QuoteRef">ABF.L</Origin> <Origin Href="QuoteRef">EDDR.L</Origin> - Part 4
04/11/2014 08:05
- Part 4: For the preceding part double click ID:nRSD0278Wc
Indian Rupee - - - 125
Korean Won - - - 14
Malaysian Ringgit - - - 77
Sterling - 0.10 - 5,236
Taiwanese Dollar - - - 755
US Dollar - - - 2
_________ _________ _______ _______
Total assets n/a n/a - 6,209
_________ _________ _______ _______
Liabilities
3.5% Convertible Unsecured Loan Stock 2018 3.42 3.50 57,614 -
Weighted average Weighted
period for which average Fixed Floating
rate is fixed interest rate rate rate
At 31 August 2013 Years % £'000 £'000
Assets
Hong Kong Dollar - - - 809
Indian Rupee - - - 113
Singapore Dollar - - - 19
Sterling - 0.13 - 3,251
Taiwanese Dollar - - - 6
Thailand Baht - - - 20
US Dollar - - - 6
_________ _________ _______ _______
Total assets n/a n/a - 4,224
_________ _________ _______ _______
Liabilities
3.5% Convertible Unsecured Loan Stock 2018 4.42 3.50 56,990 -
_________ _________ _______ _______
The weighted average interest rate is based on
the current yield of each asset, weighted by
its market value.
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 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 majority of the Company's investment
portfolio is invested in overseas securities
and the Balance Sheet, therefore, can be
significantly affected by movements in foreign
exchange rates. It is not the Company's policy
to hedge this risk on a continuing basis but
the Company may, from time to time, match
specific overseas investments with foreign
currency borrowings.
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 August 2014 31 August 2013
Net Total Net Total
Overseas monetary currency Overseas monetary currency
investments assets exposure investments assets exposure
£'000 £'000 £'000 £'000 £'000 £'000
Hong Kong Dollar 161,360 - 161,360 153,223 809 154,032
Indian Rupee 90,103 125 90,228 67,518 113 67,631
Indonesian Rupiah 4,510 - 4,510 6,446 - 6,446
Korean Won 54,067 14 54,081 52,961 - 52,961
Malaysian Ringgit 23,630 77 23,707 22,058 - 22,058
Philippine Peso 27,389 - 27,389 25,544 - 25,544
Singapore Dollar 137,957 - 137,957 134,802 19 134,821
Sri Lankan Rupee 19,616 - 19,616 14,719 - 14,719
Taiwanese Dollar 40,252 755 41,007 37,221 6 37,227
Thailand Baht 30,832 - 30,832 32,376 20 32,396
US Dollar 40,122 2 40,124 37,764 6 37,770
_________ _______ _______ _________ _______ _______
629,838 973 630,811 584,632 973 585,605
Sterling 16,834 5,236 22,070 18,773 3,251 22,024
_________ _______ _______ _________ _______ _______
Total 646,672 6,209 652,881 603,405 4,224 607,629
_________ _______ _______ _________ _______ _______
Foreign currency sensitivity
There is no sensitivity analysis included, as
the Company's significant foreign currency
financial instruments are in the form of
equity investments, which have been included
within the other price risk sensitivity
analysis, so as to show the overall level of
exposure.
Other price risk
Other price risks (ie changes in market prices
other than those arising from interest rate or
currency risk) may affect the value of the
quoted investments.
It is the Board's policy to hold an
appropriate spread of investments in the
portfolio in order to reduce the risk arising
from factors specific to a particular country
or sector. Both the allocation of assets and
the stock selection process, as detailed on
page 53 of the 2014 Annual Report and
Accounts¹ act to reduce market risk. The
Manager actively monitors market prices
throughout the year and reports to the Board,
which meets regularly in order to review
investment strategy. The investments held by
the Company are listed on various stock
exchanges worldwide.
Other price risk sensitivity
If market prices at the Balance Sheet date had
been 10% higher or lower while all other
variables remained constant, the return
attributable to Ordinary shareholders for the
year ended 31 August 2014 would have
increased/decreased by £64,667,000 (2013 -
increased/decreased by £60,341,000) and equity
reserves would have increased/decreased by the
same amount.
Liquidity risk
This is the risk that the Company will
encounter difficulty in meeting obligations
associated with financial liabilities.
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. In order to monitor the
concentration of Dragon's investee companies
with Aberdeen, the total percentage holdings
of those securities owned by Aberdeen-managed
funds is reviewed by the Board.
The Board imposes borrowing limits to ensure
gearing levels are appropriate to market
conditions, and reviews these on a regular
basis. The Board has imposed a maximum gearing
level, measured on the most stringent basis of
calculation after netting off cash
equivalents, of 20%.
Short-term flexibility can be achieved through
the use of loan and overdraft facilities. At
31 August 2013 and 2014 the Company had no
loan or overdraft facility in place. Details
of the Board's policy on gearing are shown in
the interest rate risk section of this note.
Liquidity risk exposure
At 31 August 2014 the Company had borrowings
in the form of the £59,796,624 (2013 -
£59,821,680) nominal of 3.5% Convertible
Unsecured Loan Stock 2018.
Credit risk
This is the risk of failure of the
counterparty to a transaction to discharge its
obligations under that transaction that could
result in the Company suffering a loss.
The risk is not considered to be significant,
and is actively managed as follows:
investment transactions are carried out with a
large number of brokers, whose credit-standing
is reviewed periodically by the Manager, and
limits are set on the amount that may be due
from any one broker;
the risk of counterparty, including the
custodian, exposure due to failed trades
causing a loss to the Company is mitigated by
the review of failed trade reports on a daily
basis. In addition, the third party
administrators' carries out a stock
reconciliation to the Custodian's records on a
daily basis to ensure discrepancies are picked
up on a timely basis. The Manager's Compliance
department carries out periodic reviews of the
Custodian's operations and reports its finding
to the Manager's Risk Management Committee.
This review will also include checks on the
maintenance and security of investments held;
cash is held only with reputable banks with
high quality external credit enhancements.
None of the Company's financial assets are
secured by collateral or other credit
enhancements.
Credit risk exposure
In summary, compared to the amounts in the
Balance Sheet, the maximum exposure to credit
risk at 31 August was as follows:
2014 2013
Balance Maximum Balance Maximum
Sheet exposure Sheet exposure
Current assets £'000 £'000 £'000 £'000
Loans and receivables 2,850 2,850 2,438 2,438
Cash at bank and in hand 6,209 6,209 4,224 4,224
_________ _________ _________ _________
9,059 9,059 6,662 6,662
_________ _________ _________ _________
None of the Company's financial assets is past
due or impaired.
Maturity of financial liabilities
The maturity profile of the Company's
financial liabilities at 31 August was as
follows:
2014 2013
£'000 £'000
_________ _________
In more than one year 57,614 56,990
_________ _________
At 31 August 2014 the full contractual
liability for the CULS assuming no further
conversions was £67,122,000 (2013 -
£69,076,000).
19. 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 (2013 - 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 (2014 - £646,672,000; 2013 - £603,405,000) have therefore been deemed as
Level 1.
20. Alternative Investment Fund Managers (AIFM) Directive
In accordance with the AIFM Directive, information in relation to the Company's leverage and the remuneration of the Company's
AIFM, Aberdeen Fund Managers Limited, is required to be made available to investors. In accordance with the Directive, the AIFM
remuneration policy is available from the Company's Secretaries, Aberdeen Asset Management PLC on request (see contact details
on page 62 of the 2014 Annual Report and Accounts¹) and the numerical remuneration disclosures in respect of the AIFM's first
relevant reporting period (year ended 30 September 2015) will be made available in due course.
The Company's maximum and actual leverage (see Glossary of Terms on page 57 of the 2014 Annual Report and Accounts¹) levels at
31 August 2014 are shown below:
Leverage exposure Gross Commitment method
method
Maximum limit 2.50:1 2.00:1
Actual 1.12:1 1.14:1
21. The Annual General Meeting will be held on xx December 2014 at 40
Princes Street, Edinburgh.
22. The Annual Financial Report Announcement is not the Company's
statutory accounts. The above results for the year ended 31 August 2014 have
been agreed with the auditors and are an abridged version of the Company's
full accounts, which have been approved and audited with an unqualified
report. The 2014 and 2013 statutory accounts received unqualified reports from
the Company's auditors and did not include any reference to matters to which
the auditors drew attention by way of emphasis without qualifying the reports,
and did not contain a statement under either section 498(2) or 498(3) of the
Companies Act 2006. The financial information for 2013 is derived from the
statutory accounts for 2012 which have been delivered to the Registrar of
Companies. The 2013 accounts will be filed with the Registrar of Companies in
due course.
The annual results are circulated to shareholders in the form of an Annual
Report, copies of which will be available at the Company's registered office,
40 Princes Street, Edinburgh EH2 2BY or on the Company's website
www.edinburghdragon.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
Aberdeen Asset Managers Limited, Secretary
This information is provided by RNS
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