Aberdeen Small Cap Fund

Transcription

1 Aberdeen Small Cap Fund Annual Report January 1, 2017 to December 31, 2017 Please study product s features, conditions and relevant risks before making investment decision. Aberdeen Asset Management Company Limited - Certified by CAC/Under supervision by the parent company to comply with law. 73

2 About the Fund Investment Policy The Fund will invest, with net exposure at least 80% of its NAV, in average, in any accounting period, in equity or equity related securities or assets of potential high growth or good fundamental companies for medium to long-term investment. The Fund will invest in shares of listed companies, in particular companies with market capitalization not exceeding Baht 20,000 million or an equivalent of USD 500 million (on the first investment date) whereby the rest will be invested in other financial instruments according to the SEC or the Office of the SEC notifications. Dividend Policy No dividend payout, income will be reinvested. 74

3 Mutual Fund Supervisor Report To: Unit holders of the Aberdeen Small Cap Fund Whereas Citibank, N.A. Bangkok, the Mutual Fund Supervisor of the Aberdeen Small Cap Fund which is managed by Aberdeen Asset Management Company Limited, has performed duties as the Mutual Fund Supervisor for the period beginning 1 January 2017 to 31 December We have prepared this report base on given sources of information as of the date hereof and believed by us to be reliable, but we does not warrant the accuracy or completeness of the same and expressly disclaims liability for any error or omission (including any third party liability). There can be no assurance that future event or results will be consistent with any such report. Neither us nor any of its directors, employees or agents guarantees the repayment of capital, the performance or the distribution of the funds and be liable for any loss as any action or omission made in reliance of this report. In our opinion, Aberdeen Asset Management Company Limited has performed its duties in managing the Fund correctly and appropriately according to the objectives specified in the Fund management project, which was approved by the Office of the Securities and Exchange Commission and under the Securities Exchange Act B.E Citibank, N.A. - Bangkok (Kris Antakorn) (Joedjun Sunantapongsak) Citibank, N.A. Mutual Fund Supervisor Citibank, N.A Bangkok. 24 January

4 Fund Performance As of December 29, 2017 Net Asset Value 8,493,752, Baht NAV per unit Baht Period Return SET TRI Fund Standard Deviation Benchmark Standard Deviation Year to date 13.48% 17.35% 6.28% 6.29% 3 Months 2.12% 5.02% 0.53% 0.47% 6 Months 5.76% 12.66% 0.45% 0.43% 12 Months 13.48% 17.35% 6.28% 6.29% 3 Years 6.89% 6.51% 6.98% 9.89% 5 Years 8.57% 5.39% 11.19% 12.12% 10 Years 13.25% 7.74% 17.14% 19.90% Since Inception (2 Jun 05) 14.15% 8.18% 16.15% 19.31% Annualized return for the period from 1 year Prior to January 2017, the official benchmark was the SET CR Index. The SET Index is a capital return benchmark that does not include the effect of reinvested dividends. Over the same period, the fund performance shown is a total return calculation that includes reinvested dividends and comparison between the fund and the SET Index must take into consideration the relative differences in their calculations. If the fund and benchmark were measured on the same basis for periods before 1 January 2017 the relative performance would be less. Source: Aberdeen Asset Management Company Limited Note: Past performance/performance comparison relating to a capital market product is not a guarantee of future results. The fund performance document is prepared in accordance with AIMC standards. Please study product s features, conditions and relevant risks before making investment decision. 76

5 Fund s Direct Expenses7 For the period from January 1, 2017 to December 31, 2017 Fund's Direct Expenses Amount (Baht) % of Net Asset Value** Management Fee 132,484, Trustee Fee 2,271, Registrar Fee 8,327, Advisory Fee Other Expenses 585, Total* 143,668, * Excluding brokerage and other fees incurred from trading securities but inclusive of Value Added tax. ** Average Net Asset Value 7,078,086, Baht Brokerage Fee For the period from January 1, 2017 to December 31, 2017 Broker Amount (Baht) % of Total Brokerage Fee CLSA Securities (Thailand) Ltd. 1,032, Phatra Securities PCL 1,010, Credit Suisse Securities (Thailand) Ltd. 982, SCB SECURITIES CO LTD 873, UBS Securities (Thailand) Ltd. 455, Capital Nomura Securities PCL 334, Macquarie Securities (Thailand) Ltd. 233, Thanachart Securities PLC 55, TISCO Securities Co.Ltd. 31, Total 5,009,

6 Aberdeen Small Cap Fund Investment Portfolio As of 31 December 2017 NO. OF UNITS FAIR VALUE % OF NAV COMMON SHARE Agro & Food Industry Food and Beverage Haad Thip PCL 12,284, ,155, Minor International PCL 8,142, ,240, Consumer Products Personal Products & Pharmaceuticals Thai Optical Group PLC 19,360, ,915, Financials Banking Tisco Financial Group PCL 5,910, ,051, Finance and Securities AEON Thana Sinsap (Thailand) PCL 5,264, ,886, Krungthai Car Rent and Lease PCL 18,844, ,980, MFC Asset Management PCL 1,965,600 31,842, Insurance Bangkok Insurance PCL 1,838, ,183, Muang Thai Insurance PCL 2,473, ,317, Thai Reinsurance PCL 115,006, ,711, Thaire Life Assurance PCL 23,094, ,040, Industrials Automotive Goodyear (Thailand) PCL 6,000 2,448, Interhides PCL 17,669, ,456, Thai Stanley Electric PCL 2,132, ,370, Packaging Alucon PCL 462, ,172, Property & Construction Construction Materials Dynasty Ceramic PCL 139,739, ,499, Property Development Central Pattana PCL 4,709, ,476, L.P.N. Development PCL 20,237, ,131, Sammakorn PCL 37,273, ,111,

7 Aberdeen Small Cap Fund Investment Portfolio (Cont d) As of 31 December 2017 NO. OF UNITS FAIR VALUE % OF NAV Resources Energy & Utilities Eastern Water Resources Development and Management PCL 39,827, ,863, Services Commerce Home Product Center PCL 36,641, ,011, MC GROUP PUBLIC CO LTD 10,696, ,003, Mega Lifesciences PCL 10,847, ,307, Health Care Services Bumrungrad Hospital PCL 1,883, ,038, Technology Electronic Components Hana Microelectronics PCL 8,480, ,386, TOTAL COMMON SHARE 7,989,601, SAVING DEPOSITS Citibank N.A. - Gold Saving 131,332, TOTAL SAVING DEPOSITS 131,332, OPERATING DEPOSITS Citibank N.A. - Trustee Account 426,871, TOTAL OPERATING DEPOSITS 426,871, OTHER ASSETS 32,860, OTHER LIABILITIES (87,862,120.41) (1.03) TOTAL NET ASSET VALUE 8,492,804, Issuer Rating of Deposit Bank International Rating Local Rating Bangkok Bank PCL Baa1(Moody s)/ BBB+(S&P)/ BBB+(Fitch) AA+(Fitch) TISCO Bank PCL - A(Tris) The Siam Commercial Bank PCL Baa1(Moody s)/ BBB+(S&P)/ BBB+(Fitch) AA+(Fitch) Citibank, N.A. (U.S.) A1(Moody s)/ A+(S&P)/ A+(Fitch) - United Overseas Bank (Thai) PCL Baa1(Moody s)/ A-(Fitch) AAA(Fitch) As of December 31,

8 ABERDEEN SMALL CAP FUND FINANCIAL STATEMENTS AND AUDITOR S REPORT FOR EACH OF THE YEARS ENDED DECEMBER 31,

9 Auditor s Report To the Unitholders of Aberdeen Small Cap Fund Opinion I have audited the financial statements of Aberdeen Small Cap Fund ( the Fund ), which comprise the balance sheet and the details of investments as at December 31, 2017, and the statement of income, statement of changes in net assets, statement of cash flows and significant financial information for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In my opinion, the financial statements present fairly, in all material respects, the financial position of Aberdeen Small Cap Fund as at December 31, 2017, and its financial performance, changes in its net assets, cash flows and significant financial information for the year then ended in accordance with Thai Financial Reporting Standards. Basis for Opinion I conducted my audit in accordance with Thai Standards on Auditing. My responsibilities under those standards are further described in the Auditor s Responsibilities for the Audit of the Financial Statements section of my report. I am independent of the Fund in accordance with the Federation of Accounting Professions under the Royal Patronage of his Majesty the King s Code of Ethics for Professional Accountants together with the ethical requirements that are relevant to my audit of the financial statements, and I have fulfilled my other ethical responsibilities in accordance with these requirements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion. Other Information Management is responsible for the other information. The other information comprises information including in annual report but does not include the financial statements and my auditor s report thereon, which is expected to be made available to me after that date. My opinion on the financial statements does not cover the other information and I do not and will not express any form of assurance conclusion thereon. In connection with my audit of the financial statements, my responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or my knowledge obtained in the audit, or otherwise appears to materially misstated. When I read the annual report, if I conclude that there is a material misstatement therein, I am required to communicate the matter to management to make correction the misstatement. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with Thai Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatements, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Fund s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Fund or to cease operations, or has no realistic alternative but to do so. Auditor s Responsibilities for the Audit of the Financial Statements My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Thai Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from 81

10 fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with Thai Standards on Auditing, I exercise professional judgment and maintain professional skepticism throughout the audit. I also: Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund s internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. Conclude on the appropriateness of management s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Fund s ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my auditor s report. However, future events or conditions may cause the Fund to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. I communicate with management regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit. The engagement partner responsible for the audit resulting in this auditor s report is Chutima Wongsaraphanchai. Chutima Wongsaraphanchai Certified Public Accountant Registration Number 9622 PV Audit Co., Ltd. Bangkok, 8 February

11 ABERDEEN SMALL CAP FUND BALANCE SHEET AS AT 31 DECEMBER 2017 Baht Note ASSETS Investments at fair value (at cost: Baht 6,659,376, in 2017 and Baht 4,887,372, in 2016) 3, 7 7,989,601, ,494,135, Cash at banks 6 558,204, ,807, Accounts receivable From interest 353, , From sales of investment units 32,497, ,145, Total Assets 8,580,656, ,813,345, LIABILITIES Accounts payable From purchases of investments - 2,683, From redemption of investment units 72,244, ,352, Accrued expenses 8 15,180, ,881, Other liabilities 426, , Total Liabilities 87,851, ,179, NET ASSETS 8,492,804, ,773,165, NET ASSETS : Capital received from unitholders 1,606,175, ,238,471, Retained earnings Equalization account 4,654,813, ,182,690, Retained earnings from operations 4 2,231,815, ,352,003, Net Assets 8,492,804, ,773,165, Net asset value per unit Investment units sold at the end of the year (units) 160,617, ,847, The accompanying notes are an integral part of these financial statements. 83

12 ABERDEEN SMALL CAP FUND THE DETAILS OF INVESTMENTS AS AT 31 DECEMBER 2017 Details of investments are classified by type of industrial sectors. Security name Units Fair value (Baht) Percent of investment LISTED SECURITIES COMMON STOCKS Agro & Food Industry Food & Beverage 604,395, Haad Thip PCL. 12,284, ,155, Minor International PCL 8,142, ,240, Financials Banking 523,051, TISCO Financial Group PCL 5,910, ,051, Finance & Securities 870,709, AEON Thana Sinsap (Thailand) PCL 5,264, ,886, Krungthai Car Rent and Lease PCL 18,844, ,980, MFC Asset Management PCL 1,965,600 31,842, Insurance 1,463,252, Bangkok Insurance PCL 1,838, ,183, Muang Thai Insurance PCL 2,473, ,317, Thai Reinsurance PCL 115,006, ,711, Thaire Life Assurance PCL 23,094, ,040, Industrials Automotive 654,275, Goodyear (Thailand) PCL 6,000 2,448, Interhides PCL 17,669, ,456, Thai Stanley Electric PCL 2,132, ,370, Packaging 120,172, Alucon PCL 462, ,172, Property & Construction Construction Materials 483,499, Dynasty Ceramic PCL 139,739, ,499, Property Development 773,719, Central Pattana PCL 4,709, ,476, L.P.N. Development PCL 20,237, ,131, Sammakorn PCL 37,273, ,111, The accompanying notes are an integral part of these financial statements. 84

13 ABERDEEN SMALL CAP FUND THE DETAILS OF INVESTMENTS (Cont d) AS AT 31 DECEMBER 2017 Details of investments are classified by type of industrial sectors. Security name Units Fair value (Baht) Percent of investment Resources Energy & Utilities 493,863, Eastern Water Resources Development and Management PCL 39,827, ,863, Services Commerce 1,115,322, Home Product Center PCL 36,641, ,011, MC Group PCL 10,696, ,003, Mega Lifesciences PCL 10,847, ,307, Health Care Services 356,038, Bumrungrad Hospital PCL 1,883, ,038, Technology Electronic Components 377,386, Hana Microelectronics PCL 8,480, ,386, Consumer Products Personal Products & Pharmaceuticals 153,915, Thai Optical Group PCL 19,360, ,915, TOTAL COMMON STOCKS 7,989,601, TOTAL INVESTMENTS (cost at Baht 6,659,376,857.44) 7,989,601, The accompanying notes are an integral part of these financial statements. 85

14 ABERDEEN SMALL CAP FUND THE DETAILS OF INVESTMENTS AS AT DECEMBER 31, 2016 Details of investments are classified by type of investments and industrial sectors. Security name Units Fair value (Baht) Percent of investment LISTED SECURITIES COMMON STOCKS Agro & Food Industry Food & Beverage 364,848, Haad Thip PCL 9,435, ,265, Minor International PCL 5,191, ,583, Financials Banking 343,809, TISCO Financial Group PCL 5,706, ,809, Finance & Securities 599,981, AEON Thana Sinsap (Thailand) PCL 3,681, ,014, Krungthai Car Rent and Lease PCL 14,259, ,396, MFC Asset Management PCL 1,989,500 43,570, Insurance 1,054,819, Bangkok Insurance PCL 1,306, ,264, Muang Thai Insurance PCL 1,736, ,573, Thai Reinsurance PCL 106,642, ,949, Thaire Life Assurance PCL 14,614, ,032, Industrials Automotive 374,028, Goodyear (Thailand) PCL 6,000 2,616, Thai Stanley Electric PCL 1,975, ,412, Package 115,076, Alucon PCL 442, ,076, Property & Construction Construction Materials 335,251, Dynasty Ceramic PCL 75,507, ,251, Property Development 521,179, Central Pattana PCL 3,652, ,290, L.P.N. Development PCL 17,464, ,325, Sammakorn PCL 30,524, ,563,

15 ABERDEEN SMALL CAP FUND THE DETAILS OF INVESTMENTS (Cont d) AS AT DECEMBER 31, 2016 Details of investments are classified by type of investments and industrial sectors. Security name Units Fair value (Baht) Percent of investment Resources Energy & Utilities 282,694, Eastern Water Resources Development and Management PCL 23,957, ,694, Services Commerce 875,845, Big C Supercenter PCL 1,451, ,794, Home Product Center PCL 23,585, ,568, MC Group PCL 7,056, ,545, Mega Lifesciences PCL 8,868, ,937, Health Care Services 183,334, Bumrungrad Hospital PCL 1,012, ,334, Technology Electronic Components 345,704, Hana Microelectronics PCL 8,752, ,704, Consumer Products Personal Products & Pharmaceuticals 93,377, Thai Optical Group PCL 11,116,400 93,377, TOTAL COMMON STOCKS 5,489,951, WARRANTS MFC Asset Management PCL 994,750 3,043, Minor International PCL 265,119 1,140, TOTAL WARRANTS 4,183, TOTAL INVESTMENTS (cost at Baht 4,887,372,317.91) 5,494,135, The accompanying notes are an integral part of these financial statements. 87

16 ABERDEEN SMALL CAP FUND STATEMENT OF INCOME FOR THE YEAR ENDED 31 DECEMBER 2017 Baht Note INVESTMENT INCOMES 3 Dividend income 216,184, ,948, Interest income 927, , Other income 25, , Total income 217,137, ,923, EXPENSES 3 Management fee 5, 8 132,484, ,412, Trustee fee 5 2,271, ,841, Registrar fee 5, 8 8,327, ,751, Audit fee 71, , Other expenses 513, , Total expenses 143,668, ,536, Net income from investments 73,469, ,387, Net gain on investments 3 Net realized gain on investments 82,880, ,153, Net unrealized gain on investments 723,461, ,462, Total net realized and unrealized gain on investments 806,342, ,616, Increase in net assets resulting from operations 879,811, ,003, The accompanying notes are an integral part of these financial statements. 88

17 ABERDEEN SMALL CAP FUND STATEMENT OF CHANGES IN NET ASSETS FOR THE YEAR ENDED 31 DECEMBER 2017 Baht Increase in net assets from operations during the year Net income from investments 73,469, ,387, Net realized gain on investments 82,880, ,153, Net unrealized gain on investments 723,461, ,462, Net increase in net assets resulting from operations 879,811, ,003, Net increase (decrease) in capital received from unitholders during the year Issuance of investment units during the year 4,952,010, ,023,438, Redemption of investment units during the year (3,112,182,996.03) (2,608,415,099.74) Net increase (decrease) in capital received from unitholders 1,839,827, (584,976,937.34) Increase (decrease) in net assets during the year 2,719,638, (74,973,320.74) Net assets at the beginning of the year 5,773,165, ,848,138, Net assets at the end of the year 8,492,804, ,773,165, Units Changes of investment units (at Baht 10 each) Investment units at the beginning of the year 123,847, ,811, Add: Investment units sold during the year 98,820, ,731, Less: Investment units redeemed during the year (62,050, ) (58,695, ) Investment units at the end of the year 160,617, ,847, The accompanying notes are an integral part of these financial statements. 89

18 ABERDEEN SMALL CAP FUND STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2017 Baht Cash flows from operating activities Increase in net assets from operations 879,811, ,003, Adjustments to reconcile the increase in net assets from operations to net cash provided by (used in) operating activities Purchases of investments (2,297,552,886.13) (412,264,650.36) Sales of investments 608,429, ,526, Increase in accounts receivable from interest (95,684.05) (1,199.55) Increase in accounts receivable from sales of investment units (22,352,443.84) (1,422,588.16) Decrease in accounts payable from purchases of investments (2,683,528.67) (2,551,239.10) Increase in accounts payable from redemption of investment units 44,891, ,272, Increase (decrease) in accrued expenses 5,298, (40,040.51) Increase (decrease) in other liabilities 165, (21,733.96) Net realized gain on investments (82,880,761.76) (63,153,730.54) Net unrealized gain on investments (723,461,637.20) (359,462,841.56) Net cash provided by (used in) operating activities (1,590,430,328.32) 578,884, Cash flows from financing activities Proceeds from issuance of investment units during the year 4,952,010, ,023,438, Payments for redemption of investment units during the year (3,112,182,996.03) (2,608,415,099.74) Net cash provided by (used in) financing activities 1,839,827, (584,976,937.34) Net increase (decrease) in cash at banks 249,397, (6,092,694.71) Cash at banks at the beginning of the year 308,807, ,900, Cash at banks at the end of the year 558,204, ,807, The accompanying notes are an integral part of these financial statements. 90

19 ABERDEEN SMALL CAP FUND SIGNIFICANT FINANCIAL INFORMATION FOR THE YEAR ENDED 31 DECEMBER 2017 Baht Information on results from operations (per unit) Net asset value at the beginning of the year Income (loss) from investing activities Net income from investments* Net realized gain (loss) on investments** (0.5128) Net unrealized gain (loss) on investments** (1.4018) Total income (loss) from investing activities (0.5527) Net asset value at the end of the year Ratio of net profit (loss) to average net asset value during the year (%) (1.40) (6.85) Significant financial ratios and additional information Net asset value at the end of the year (Thousand Baht) 8,492,805 5,773,166 5,848,139 5,343,601 3,551,478 1,564,332 Ratio of total expenses to average net asset value during the year (%) Ratio of total income from investments to average net asset value during the year (%)*** Ratio of weighted average investment turnover to average net asset value during the year (%)**** Supplemental information * Based on average investment units outstanding throughout each year. ** The amounts reported may not accord with the change in aggregate gains and losses in securities during the year because of the timing of sales and purchases investment units in relation to fluctuating market values during the year. *** Income from investments consists of investment income and net realized gain (loss) from sales of investments. **** This is not included cash at bank and investment in promissory notes and trading investments should be the independent trading transactions which are not included repurchase agreements or resale agreements. The accompanying notes are an integral part of these financial statements. 91

20 1. NATURE OF ABERDEEN SMALL CAP FUND ABERDEEN SMALL CAP FUND NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017 Aberdeen Small Cap Fund ( the Fund ) was registered with the Office of the Securities and Exchange Commission ( SEC ) on 2 June At present, the Fund has the registered value of Baht 3,000 million (divided into 300 million investment units at Baht 10 each). Aberdeen Asset Management Company Limited ( the Management Company ) serves as the Fund s Manager and Investment Unit Registrar, Citibank, N.A. Bangkok Branch serves as the Fund s Trustee. The Fund is an open-ended fund with no project life stipulated. The Fund has to invest in equity securities at average in each accounting period not less than 80% of fund s net asset value. The Fund's policy is not to pay dividends to unitholders. 2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS The financial statements of the Fund are prepared in accordance with Thai Financial Reporting Standards ( TFRS ) including related interpretations and accounting guidance promulgated by the Federation of Accounting Professions in accordance with generally accepted accounting principles in Thailand. In addition, the financial statements have been prepared in accordance with Thai Accounting Standard No. 106 Accounting for Investment Companies. The financial statements of the Fund have been prepared in the Thai language and expressed in Thai Baht. Such financial statements have been prepared for domestic reporting purposes. For the convenience of the readers not conversant with the Thai language, an English version of the financial statements has been provided by translating from the Thai version of the financial statements. Adoption of New and Revised Thai Financial Reporting Standards 1. Financial reporting standards that became effective in the current year During the year, the Fund has adopted the revised (revised 2016) and new Thai Accounting Standards, Thai Financial Reporting Standards, Thai Standard Interpretations, Thai Financial Reporting Interpretations and accounting guidance issued by the Federation of Accounting Professions which become effective for fiscal year beginning on or after 1 January These financial reporting standards were aimed at alignment with the corresponding International Financial Reporting Standards, with most of the changes directed towards revision of wording and terminology, and provision of interpretations and accounting guidance to users of standards. The adoption of these financial reporting standards does not have any significant impact on the Fund s financial statements. 2. Financial reporting standards that will become effective in the future During the year, the Federation of Accounting Professions issued a number of the revised (revised 2017) Thai Accounting Standards, Thai Financial Reporting Standards, Thai Standard Interpretations and Thai Financial Reporting Interpretations which are effective for fiscal year beginning on or after 1 January These financial reporting standards were aimed at alignment with the corresponding International Financial Reporting Standards with most of the changes directed towards revision of wording and terminology, and provision of interpretations and accounting guidance to users of standards. The management of the Fund has assessed the effects of these revised Thai Accounting Standards, Thai Financial Reporting Standards, Thai Standard Interpretations and Thai Financial Reporting Interpretations and believes that they will not have any significant impact on the financial statements for the year in which they are initially applied. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Investment Measurement Investment is recognized as assets with the cost of investments at the date on which the Fund has the right on investments. The costs of investments are comprised with the purchase price and all direct expenses which the Fund paid to get those investments. - Listed equity securities traded in active market are presented at fair value, using the latest closing price on the date of valuation. 92

21 Net unrealized gains or losses arising from their revaluation of investments to be fair value are reflected in the statement of income on the measurement date. The weighted average method is used to determine the cost of each security at the time of sales. Revenues and Expenses Recognition Dividend income is recognized on date of declaration and having the right to receive the dividend. Interest income is recognized as interest accrues, based on the effective rate method. Other income and expenses are recognized on an accrual basis. Gain or loss on trading of securities is recorded as revenues or expenses on trade date. Use of Accounting Judgments and Estimates Preparation of financial statements in conformity with generally accepted accounting principles requires management to make judgments and estimates that affect the reported amounts of assets, liabilities, revenues, expenses and disclosure of contingent assets and liabilities. Actual results may differ from those estimates. The judgments and estimates are reviewed on an ongoing basis. Revisions to accounting estimates are recognized prospectively. 4. RETAINED EARNINGS AT THE BEGINNING OF THE YEAR Baht Accumulated net investment income (accumulated since 2 June 2005) 282,067, ,680, Accumulated net realized gain on investments (accumulated since 2 June 2005) 463,173, ,019, Accumulated net unrealized gain on investments (accumulated since 2 June 2005) 606,762, ,299, Retained earnings at the beginning of the year 1,352,003, ,000, MANAGEMENT, TRUSTEE AND REGISTRAR FEES Expenses Management fee Trustee fee Registrar fee Percentage Not more than 1.75 percent per annum of the Fund s net assets. Not more than 0.05 percent per annum of the Fund s net assets. Not more than 0.11 percent per annum of the Fund s net assets. 6. CASH AT BANKS Baht Interest Rate (%) Bank Citibank, N.A. Bangkok Branch 426,871, ,203, Citibank, N.A. Bangkok Branch 131,332, ,604, Total cash at banks 558,204, ,807, INVESTMENT TRADING INFORMATION The Fund had investment trading transactions during the year ended 31 December 2017 excluding investments in promissory notes amounted of Baht 2, million (Year 2016 : Baht 1, million) which is percent (Year 2016 : percent) of the average net asset value during the year. 93

22 8. RELATED PARTY TRANSACTIONS During the year, the Fund had business transactions with the Management Company and other enterprises, which have the same shareholders and/or directors as the Management Company and the Fund. Such transactions for the years ended 31 December 2017 and 2016 were summarized as follows: Aberdeen Asset Management Company Limited Baht Pricing policy Management fee 132,484, ,412, The basis stated in the prospectus Registrar fee 8,327, ,751, The basis stated in the prospectus As at 31 December 2017 and 2016 the Fund had the significant outstanding balances with the related company as follows: Aberdeen Asset Management Company Limited Baht Accrued management fee 13,986, ,080, Accrued registrar fee 879, , DISCLOSURE OF FINANCIAL INSTRUMENTS The Fund does not speculate in or engage in the trading of any derivative financial instruments. Fair Value As the majority of financial assets and financial liabilities are short-term, and most financial assets are marketable securities, which are presented at fair value based on their quoted market prices, the Fund believes that their carrying value does not materially differ from their fair value. Interest Rate Risk As the Fund invests in equity instruments, the risks from market interest rate fluctuations do not affect the Fund. Credit Risk The Fund is exposed to the risk of breach of the financial instruments obligations by counterparties since the Fund has accounts receivable. However, such financial assets are due in the short-term, so the Fund does not anticipate material losses from its debt collection. Foreign Currency Risk The Fund has no financial assets and liabilities in foreign currency, so there is no foreign currency risk. Market Risk The Fund is exposed to the risk from changes in market prices with respect to its investments in equity instruments. The returns on investment fluctuate depending on the economic and political situation including the status of capital and financial markets. The mentioned situations may effect the operation of the financial instruments issuer in a positive or negative way depending on the kind of business of those issuers and how they related with fluctuating market, which may arise to an increase or decrease of financial instruments market price. Risk Management The Fund manages risks which may arise from investments by establishing its risk management policy to cover risks on investments such as diversifying its investments and analyzing the status of those entities invested by the Fund. 10. APPROVAL OF THE FINANCIAL STATEMENTS These financial statements have been approved for issue by the authorized persons of the Fund on 9 February

23 List of Connected Person with transaction Aberdeen Small Cap Fund None Period of January 1 to December 31, 2017 Report on holding exceeding one-third of retail fund Aberdeen Small Cap Fund has no one group of person holding exceeding one-third of fund Data as of December 31, 2017 Portfolio Turnover Ratio (PTR) Portfolio Turnover Ratio 8.46% Period of January 1 to December 31, 2017 Report on non-compliance of investment limit None Period of January 1 to December 31, 2017 For more information, investors can find out the list of connected person with transaction and report on holding exceeding one-third of retail fund directly with Aberdeen Asset Management Company Limited or through company s website at 95

24 Amendment of the Commitment between unitholders and the Asset Management Company Aberdeen Asset Management Co., Ltd. would like to inform you of the project amendments as made by fast track method and approved by the Office of the SEC on 16 January 2017 with effective as from 16 January 2017 onwards which can be summarized below. Summary of the amendments 1. Revising the fund investment criteria to be in accordance with the Notification of the Capital Market Supervisory Board No. Tor Nor 87/2558 Re: the investment of the fund The amendment is made to the project of all the above mentioned funds except the Aberdeen Long Term Equity Fund 70/30 2. Revising the wording regarding the management of the conflict of interest to be in accordance with the Notification of the Office of the SEC No. Sor Tor 14/2558 Re: the principle of the conflict of interest management. The amendment is made to the project of all the above mentioned funds. 3. Adding the wording regarding the reservation of right to revise the benchmark to be in accordance with the Notification of the Association of Investment Management Companies No. Sor Jor Kor Ror 1/2559 Re: the Standard of the Fund Benchmark Evaluation The amendment is made to the project of the Open Ended Aberdeen Growth Fund, Open Ended Aberdeen Cash Creation Fund, Open Ended Aberdeen Flexible Capital Fund, Open Ended Aberdeen Siam Leaders Fund, Open Ended Aberdeen Long Term Equity Fund, Open Ended Aberdeen Value Fund, Open Ended Aberdeen Thai Equity Dividend Fund, Open Ended Aberdeen Small Cap Fund, Open Ended Aberdeen Smart Income Retirement Mutual Fund, Open Ended Aberdeen Smart Capital Retirement Mutual Fund. 4. Revising the wording regarding the tax benefit conditions to be in accordance with the circulation letter of the Office of the SEC No Kor Lor Tor Kor Nor (Vor).16/2559 Re: Mutual Understanding of the Period Extension for the Long Term Investment Fund The amendment is made to the project of the Aberdeen Long Term Equity Fund. Aberdeen Asset Management Co., Ltd. would like to inform you of the project amendments as made by fast track method and approved by the Office of the SEC on May 19, 2017 with effective as from May 17, 2017 onwards which can be summarized below Summary of the amendments 1. Revising wording regarding the fund investment criteria, e.g. the definitions, the qualifications of Bill of Exchange, Promissory Note and CIS investment unit invested by the fund and revising wording in part of the investment limit to be in accordance with the Notification of the Capital Market Supervisory Board No. Tor Nor 14/2560 Re: the investment of the fund (No.4) The amendment is made to the project of all the above mentioned funds. 2. Adding the wording not for retail investors after the name of the fund to be in accordance with the Notification of the Capital Market Supervisory Board No. Tor Nor 35/2560 Re: The fund establishment for retail investor and non-retail investors and the execution of agreements for management of the private fund The amendment is made to the project of Aberdeen Euro High Yield Bond Fund. 3. Revising wording regarding the settlement period of redemption payment to unitholder which will not include the holiday of the foreign country to be in accordance with the Notification of the Capital Market Supervisory Board No. Tor Nor 87/2558 Re: the investment of the fund The amendment is made to the project of the Open Ended Aberdeen Asia Pacific Equity Fund, Open Ended Aberdeen China Gateway Fund, Open Ended Aberdeen American Growth Fund, Open Ended Aberdeen Euro High Yield Bond Fund, Open Ended Aberdeen World Opportunities Fund, Open Ended Aberdeen European Growth Fund, Open Ended Aberdeen Emerging Opportunities Bond, Open Ended Aberdeen Global Emerging Growth Fund, Open Ended Aberdeen Japan Opportunities Fund, Open Ended Aberdeen Asia Pacific Equity Retirement Mutual Fund, Open Ended Aberdeen India Growth Fund, Open Ended Aberdeen American Growth Smaller Companies Fund. 96

25 Schedule of Commitment Amendment to the Open-ended Aberdeen Small Cap Fund Subject 14. Issuance and Delivery of Unitholder Certificates : Old Conditions for issuing unitholder certificates and delivery periods : 1. After the initial public offering, the Registrar will proceed to register the purchasers who have been allocated fund in the unitholders register book and to issue the unitholder certificates for delivery by post to the unitholders within 15 days from the end of the initial offering period. 2. In the case of the purchase of fund units are done after the first offering, the Registrar will register the purchasers as the unitholders in the register book and proceed to deliver unitholder certificates by post within 5 business days from the date of purchase. 3. If there is an error in the unitholder certificates, unitholders must file a complaint within 7 working days from the date of receiving the unitholder certificates. 4. The Management Company shall proceed to issue unitholder certificates to unitholder every time an order is made to purchase or redeem fund units. Therefore, the Management Company shall hold the remaining balance of fund units listed in the register book and in the unitholder certificates that sent to unitholders at present and accurate. 5. The Management Company, arranged by the Registrar will proceed to issue and deliver update transaction report at the last working day of every month to unitholders as listed in the fund register book on the last working day of every month. New Conditions for issuing unitholder certificates and delivery periods : 1. After the initial public offering, the Registrar will proceed to register the purchasers who have been allocated fund in the unitholders register book and to issue the unitholder certificates for delivery by post to the unitholders within 15 days from the end of the initial offering period. Reason To facilitate the unitholders. 2. In the case of the purchase of fund units are done after the first offering, the Registrar will register the purchasers as the unitholders in the register book and proceed to deliver unitholder certificates by post within 5 business days from the date of purchase. However, the Registrar may change the method of delivery of such documents by electronic mail to the electronic mail address provided by the unitholders, which shall be notified to the unitholders at least 5 days before proceeding unless specified by the unitholders to send by post or unitholders do not provide electronic mail address to the Management Company. 3. If there is an error in the unitholder certificates, unitholders must file a complaint within 7 working days from the date of receiving the unitholder certificates. 4. The Management Company shall proceed to issue unitholder certificates to unitholder every time an order is made to purchase or redeem fund units. Therefore, the Management Company shall hold the remaining balance of fund units listed in the register book and in the unitholder certificates that sent to unitholders at present and accurate. 5. The Management Company, arranged by the Registrar will proceed to issue and deliver update transaction report at the last working day of every month to unitholders as listed in the fund register book on the last working day of every month. Period of January 1, 2017 to December 31,

26 Mutual Fund Manager List of Aberdeen Asset Management Company Limited No. Name / Surname Responsibility Fund Remark Mr. Adithep Vanabriksha Mr. Orsen Karnburisudthi Mr. Pongtharin Sapayanon Ms. Thanya Mahawattanaungkoon Mr. Chalermrat Panjawatanakul** Mr. Pochara Thimasan* Mr. Ana Paepipatmongkol*** * Performing duty as a fund manager until 31 January 2017 ** Performing duty as a fund manager as from 28 March 2017 *** Performing duty as a fund manager as from 22 December 2017 Open-Ended Aberdeen Growth Fund Open-Ended Aberdeen Flexible Capital Fund Open-Ended Aberdeen Siam Leaders Fund Open-Ended Aberdeen Small Cap Fund Open-Ended Aberdeen Thai Equity Dividend Fund Open-Ended Aberdeen Smart Capital-Retirement Mutual Fund Open-Ended Aberdeen Smart Income-Retirement Mutual Fund Open-Ended Aberdeen Asia Pacific Equity -Retirement Mutual Fund Open-Ended Aberdeen Long Term Equity Fund Open-Ended Aberdeen Cash Creation Fund Open-Ended Aberdeen Value Fund Open-Ended Aberdeen Asia Pacific Equity Fund Open-Ended Aberdeen Emerging Opportunities Bond Fund Open-Ended Aberdeen European Growth Fund Open-Ended Aberdeen Global Emerging Growth Fund Open-Ended Aberdeen World Opportunities Fund Open-Ended Aberdeen China Gateway Fund Open-Ended Aberdeen American Growth Fund Open-Ended Aberdeen India Growth Fund Open-Ended Aberdeen Income Creation Fund Open-Ended Aberdeen Japan Opportunities Fund Open-Ended Aberdeen Euro High Yield Bond Fund not for retail investors Open-Ended Aberdeen American Growth Smaller Companies Fund Open-Ended Aberdeen Long Term Equity Fund 70/30 Information during January 1 December 31,

27 List of Soft Commission The Company uses the following research papers from brokerage houses to help with the investment decisions. 1. Bualuang Securities Public Company Limited 2. Capital Nomura Securities Public Company Limited 3. CIMB Securities (Thailand) Company Limited 4. Citicorp Securities (Thailand) Limited 5. CLSA Securities (Thailand) Limited 6. Credit Suisse Securities (Thailand) Limited 7. DBS Vickers Securities (Thailand) Company Limited 8. JPMorgan Securities (Thailand) Limited 9. Kasikorn Securities Public Company Limited 10. KGI Securities (Thailand) Public Company Limited 11. Macquarie Securities (Thailand) Limited 12. Maybank Kim Eng Securities (Thailand) Public Company Limited 13. Phatra Securities Public Company Limited 14. SCB Securities Company Limited 15. Thanachart Securities Public Company Limited 16. TISCO Securities Company Limited 17. UBS Securities (Thailand) Limited Period of January 1 December 31, 2017 Voting right and voting right exercising Investors should guidance right on voting right and voting right exercising via Asset Management website 99