This is a financial report for Asia Dragon Trust PLC, a UK-based investment trust company. The report covers the fiscal year ending August 31, 2024, and provides an overview of the companys financial performance, strategic decisions, and future plans. Here is a summary of the key points
## Performance Highlights
The companys net asset value (NAV) total return increased by 9.3%, while the share price total return rose by 16.7%.
The net asset value per share was £0.45293, up from £0.42126 in the previous year.
The share price was £0.404, an increase from £0.353 in the previous year.
The benchmark total return in sterling terms was 12.0%.
The ongoing charges ratio was 0.75%, down from 0.91% in the previous year.
## Dividends and Highlights
An interim dividend of £0.066 per share was declared for 2024, payable on December 31, 2024.
The company completed a strategic review and proposed a combination with Invesco Asia Trust PLC, subject to shareholder approval.
The combination is expected to provide a partial capital return and continued investment in a well-performing, scaled vehicle with a diversified shareholder base.
The discount to net asset value improved from 16.2% in the previous year to 10.8%.
## Chairmans Statement
The Chairman highlights the performance of the company and the impact of the combination with abrdn New Dawn Investment Trust PLC in November 2023.
The Board conducted a strategic review of the companys future, including investment management arrangements, and concluded a proposal to combine with Invesco Asia Trust PLC.
The Board believes this proposal will benefit shareholders by providing a partial capital return and continued investment in a well-performing, scaled vehicle.
The Chairman also discusses the US monetary policy easing cycle, its impact on Asia, and the election of Donald Trump and its potential implications for the region.
## Investment Managers Review
The Investment Manager highlights the impact of macro factors, such as a slowing China, US monetary policy, and geopolitical uncertainty, on the performance of the region.
The portfolio posted mixed returns, with a weak start but stabilizing performance towards the end of the financial year.
Key performance drivers included China and Hong Kong, technology, and India.
The Investment Manager discusses their investment approach, focusing on quality companies, and provides an outlook for the future.
## Overview of Strategy
The companys business model is to operate as an investment trust, and the Board believes it has conducted its affairs to comply with the eligibility conditions for investment trust status.
The company completed a combination with abrdn New Dawn Investment Trust PLC in November 2023, acquiring approximately £214.7 million of net assets.
The companys investment policy was amended to include Australasia following the combination.
The Board believes that the sensible use of modest financial gearing enhances returns over the long term.
## Results
The companys revenue return per share was £0.067 for the year, and an interim dividend of £0.066 per share was declared for 2024.
The Board intends to align the Annual General Meeting with the dates for the general meetings required to implement the combination with Invesco Asia Trust PLC.
## Composition of the Board
The Board underwent changes during the year, with new Directors joining and some retiring.
## Outlook
The Board remains positive about the outlook for Asian equities, highlighting the strong corporate outlook and growth opportunities beyond China.
The US monetary policy easing cycle is expected to boost companies and economies across Asia.
The Board highlights the diversity of the Asian region and the growth opportunities it presents for active stock pickers.
## abrdns Approach to ESG
abrdn, the Investment Manager, provides an overview of their approach to Environmental, Social, and Governance (ESG) considerations.
They believe that ESG factors can impact a companys performance and that engagement with companies is an important part of their investment process.
abrdn has a dedicated ESG team and integrates ESG analysis into their investment process.
They also discuss their approach to climate change and how they assess the carbon footprint of their investments.
## Results
The company provides key performance indicators, including net asset value, share price, performance against the benchmark, and discount/premium to net asset value.
The Board monitors these indicators to assess the companys success in achieving its objectives.
## Promoting the Success of the Company
The Board provides a statement on how they have discharged their duties under section 172 of the Companies Act 2006.
They highlight their focus on the interests of shareholders and potential investors and their engagement with major shareholders.
The Board also discusses their oversight of the Investment Manager and their assessment of the companys investment performance.
## Duration
The Board notes that the combination with Invesco Asia Trust PLC, if approved, will trigger the liquidation of the company.
Shareholders are given the opportunity to vote on the continuation of the company at every fifth Annual General Meeting.
## Board Diversity
The Board provides a statement on diversity, noting that it meets the target for minority ethnic background representation.
## EnvironmentalSocialand Human Rights Issues
The company has no employees, so no specific disclosures are required. However, the report includes information on socially responsible investment.
## Viability Statement
The Board provides a viability statement, noting the proposal to combine with Invesco Asia Trust PLC and the impact on the companys future.
They assess the companys viability over a five-year period, considering various factors and risks.
## Results
The company provides a ten-year financial record, detailing net asset value, revenue, dividend, expenses, and equity shareholders funds.
It also lists the ten largest investments and provides an investment portfolio overview.
## Changes in Asset Distribution
The report details the changes in asset distribution over the year, including purchases, sales, gains, and losses.
## Investment Case Studies
The report includes investment case studies for Bharti Airtel and Tencent, highlighting their performance and growth prospects.
## Directors Report
The report covers capital structure, directors and officers liability insurance, dividends, management agreement, reduction in management fee, borrowings, corporate governance, going concern, substantial share interests, accountability and audit, and other information.
## Statement of Directors Responsibilities
The Directors provide a statement on their responsibilities in preparing the annual report and financial statements.
## Statement of Comprehensive Income
The statement presents the companys revenue, capital, and total returns for the year.
## Statement of Financial Position
The statement presents the companys non-current assets, current assets, current liabilities, and net assets.
## Statement of Changes in Equity
The statement details the changes in share capital, share premium account, capital redemption reserve, capital reserve, and revenue reserve over the year.
## Statement of Cash Flows
The statement presents the companys cash flows from operating, investing, and financing activities.
## Notes to the Financial Statements
The notes provide additional information and disclosures related to the financial statements.
## Alternative Performance Measures (Unaudited)
The report includes alternative performance measures, such as discount to net asset value per share, net gearing, ongoing charges, and total return.