Half Yearly Results

RNS Number : 3165P
Aberdeen Asian Income Fund Limited
18 August 2014
 



ABERDEEN ASIAN INCOME FUND LIMITED

UNAUDITED HALF YEARLY REPORT

FOR THE SIX MONTHS ENDED 30 JUNE 2014

 

Interim Board Report - Chairman's Statement

 

Background

The Company's net asset value returned 3.8% in sterling terms over the six months to 30 June 2014, in line with the MSCI AC Asia Pacific ex Japan Index, which returned 3.9%. A key development over the period was the stabilisation of emerging markets, including Asia, following the wave of sell-offs last year. Many economies, in particular those deemed vulnerable to shifts in global liquidity, have improved their current accounts, paving the way for a cyclical recovery. Against this backdrop, the Ordinary Share price total return was 5.4% and the premium over net asset value per Ordinary share widened from 1.8% at the start of the year to 3.3%. At the time of writing there is a premium of 1.0%.

 

Overview

Asian equities rebounded with modest gains after a challenging 2013. A major factor propping up stockmarkets has been the continued monetary stimulus from major central banks outside the US. The European Central Bank brought real interest rates into negative territory while the Bank of Japan continued to increase the money supply to revitalise the economy. China's central bank, too, provided support by injecting cash into financial markets and targeted credit easing. Meanwhile, the US Federal Reserve has signalled that it would keep interest rates low for longer, even as it slows its asset purchases.

 

On the whole, markets that had sold off sharply previously made the strongest comeback. Conversely, the ones that fared better last year lagged over the first six months of the year. Notably the biggest advances were seen in India and Indonesia although your Company has no direct exposure there due to the high valuations and low yields.  Thailand has been remarkably strong, despite the political turmoil. The military coup may have provided a short-term respite from the political impasse as legislative backlogs are cleared and measures are being drawn up to stimulate investment. Local data appears to bear this out: consumer confidence returned after a year-long decline, as stalled investment projects and the infrastructure budget were approved, while the central bank upgraded its 2015 GDP growth forecast on the resumption of fiscal spending. That said, the army's legitimacy will be questioned if it stays in power for too long; elections have been delayed until next year, during which the junta will oversee the appointment of a government and attempt to mediate opposing groups.

 

Market performance outside Southeast Asia was lacklustre. Concerns over a slower economy and a cooling property market hampered Chinese and Hong Kong equities. Investors, however, were reassured after support measures were subsequently unveiled. Although smaller than the previous stimulus packages, these initiatives were partly intended to fund fixed asset investment. In Japan, the market rally petered out as prime-minister Shinzo Abe's first attempt at structural overhaul fell short of expectations; further details were unveiled towards the period-end. But while the scale of what he has put forward - corporate tax cuts, the liberalisation of the labour market and enhancements to corporate governance, among others - is more extensive than before, the broader effects for these proposals remain unclear.

 

Performance Review

The Company's performance was driven by stock selection, most notably in Singapore and Australia. The holding in Singapore Post, the city-state's main postal service, was the single largest positive contributor. Its announcement that Alibaba, the Chinese e-commerce giant, is taking a strategic stake to capitalise on its logistics capabilities within Southeast Asia lifted its share price. Both also agreed to form a joint venture to provide logistics services. Jardine Cycle & Carriage, a recent addition to the portfolio, rose on the back of pre-election enthusiasm in Indonesia. Its earnings are driven by Astra International, which has solid businesses across the automotive distribution, palm oil plantation and coal-mining contracting sectors in Indonesia. The stock is attractively valued given the price weakness last year and offers a yield of about 3%.

 

In Australia, Scentre Group, spun off from the restructure of Westfield Retail Trust and Westfield Group, rose after its debut in June. The new entity owns Westfield Trust's Australian and New Zealand operations after the demerger, while Westfield Group was renamed Westfield Corporation and holds the international businesses. The reorganisation has resulted in a clearer separation of the founding family's assets and a more focused portfolio within each vehicle. It also enables Scentre Group to undertake development projects in Australia and New Zealand without being hampered by borrowing constraints under the previous trust structure. Meanwhile financial holdings, Australia & New Zealand Banking and Commonwealth Bank of Australia benefited from good interim earnings, which surpassed expectations despite muted demand for credit.

 

Favourable positioning in China and Thailand also enhanced performance. The underweight to China benefited your Company, as the market was dragged down for the reasons mentioned earlier. Meanwhile, the holding in PetroChina rebounded strongly, partly aided by steady first-quarter results. It is poised to benefit from reforms that would allow market forces to play a greater role in the economy. The company also appears to be exploring options to monetise assets that could potentially increase shareholder returns. For a start, it is divesting part of its West-East pipeline to optimise its financing further. The lack of exposure to several mainland-listed financial services firms also added value. In Thailand, the overweight contributed to performance, given its resilience in weathering political uncertainty. Among the Company's Thai holdings, Hana Microelectronics impressed with a surge in profits, thanks to a recovering electronics cycle and the soft baht.

 

Turning to portfolio activity, the Manager took advantage of opportunities created by last year's sell-off to add to better yielding and more defensive holdings. Among the more significant transactions were the top-ups in China Mobile, Hong Kong fashion retailer Giordano and Far East Hospitality Trust. Although their share prices were weak, these companies remain cash flow generative, enabling them to offer attractive dividend yields relative to their peers. The top-ups were funded with proceeds from the sale of Japanese pharmaceutical company Takeda and media group Singapore Press Holdings (SPH). Various headwinds facing Takeda, including longer-term concerns over its drug pipeline, as well as existing challenges of integrating its acquisitions and expanding its presence in emerging markets, prompted the Manager to divest Takeda. For SPH, the sale was driven by concerns over its business prospects, mainly in its core newspaper business, which has been in gradual decline. In addition, the hidden value in the property business has largely been realised after being spun off and proceeds returned to shareholders through a special dividend. The Manager also pared the holding in Taiwan Semiconductor Manufacturing, as the run-up in its share price made its yield less attractive.

 

Dividend

On 8 July 2014, your Board declared a second quarterly interim dividend of 1.8p per Ordinary share in respect of the year ending 31 December 2014, which will be paid on 22 August 2014 to shareholders on the register on 18 July 2014. The first two quarterly dividends, covering the six months to 30 June 2014 therefore total 3.6p (2013 - 3.6p). Many of the Company's holdings have provided a steady dividend payout and their robust cash flows should sustain cash generation and continue to maintain good dividend yields on your Company's investment portfolio.

 

Gearing and Share Issuance

Your Company entered into a new unsecured three year £30 million multi currency revolving facility agreement with Scotiabank (Ireland) Limited which replaced a £15 million secured facility that matured in April 2014.  At the period end approximately £15.5 million was drawn down under the facility (USD11.0 million and HKD119.8 million) representing a gearing level of 4.1% of net assets which overall has been beneficial to the net asset value performance over the period under review.

 

Your Company's Articles of Association authorise the Directors to allot shares for cash at a premium to NAV and shareholders have authorised the issuance of up to 10% of the Company's issued capital without pre-emption rights applying. In the six months to 30 June 2014 a total of 450,000 new Ordinary shares were issued at a premium to NAV per Ordinary share in accordance with the Board's guidelines to the Manager. When issuing shares at a premium, there is a modest uplift in NAV for the existing shareholders and the Directors will continue with share issues as and when there is demand from the markets and a premium rating attaching to the shares. There are a number of constraints to such issuance, including the overriding Listing Rule requirement not to issue more than 10% of the outstanding equity in any rolling 12 month period.  Therefore it is possible that there may be periods when the Company is prevented from issuing new shares. Following the implementation of the Alternative Investment Fund Managers Directive, the Company has taken the necessary steps to allow it to continue to market its shares, including the issue of new shares for cash, within the UK under the UK National Private Placement Regime.

 

Outlook

Easy monetary conditions have supported stockmarkets, while many developing economies continue to adjust to the consequences of the US Fed's tapering. In China, recent economic data point to a stabilisation of growth. The new reform agenda provides further grounds for optimism. Although the transition away from an export to a domestic demand-led economy could take some time and may slow growth as a result, this would lead to greater economic resilience over the longer term.

 

That said, markets could face a few headwinds in the months ahead. A key worry is the prospect of higher interest rates. A premature rate hike, particularly by the Fed, would be unsettling. Global economic growth is still uneven, despite early indications of a recovery. Territorial disputes between China and its neighbours, Western sanctions on Russia over its involvement in Ukraine as well as the on-going tensions in the Middle East could also test markets if relations deteriorate. Caution is merited in view of these uncertainties, while earnings growth could remain muted. But your Company's holdings, with their prudent management, sound financial health, strong operating cash flow and decent dividend policies, should be able to weather these headwinds and continue tapping the region's growth potential over the long term.

 

I look forward to reporting to you again with the Annual Report for the year to 31 December 2014, which will be issued in April 2015. In the meantime, shareholders can find regular updates from your Manager, and copies of all Stock Exchange announcements on your Company's website www.asian-income.co.uk. Also on the website there are NAV and share price feeds which are updated on a daily basis.

 

 

Peter Arthur

Chairman

15 August 2014

 

 

Principal Risk Factors

The principal risks and uncertainties affecting the Company are set out in detail on pages 3 to 7 of the Annual Report and Financial Statements for the year ended 31 December 2013 and have not changed.

 

An investment in the Ordinary shares is only suitable for investors capable of evaluating the risks (including the potential risk of capital loss) and merits of such investment and who have sufficient resources to bear any loss which may result from such investment. Furthermore, an investment in the Ordinary shares should constitute part of a diversified investment portfolio.

 

The risks outlined below are those risks that the Directors considered at the date of this Half Yearly Report to be material but are not the only risks relating to the Company or its shares. If any of the adverse events described below actually occur, the Company's financial condition, performance and prospects and the price of its shares could be materially adversely affected and shareholders may lose all or part of their investment. Additional risks which were not known to the Directors at the date of this Half Yearly Report, or that the Directors considered at the date of this Report to be immaterial, may also have an effect on the Company's financial condition, performance and prospects and the price of the shares.

 

If shareholders are in any doubt as to the consequences of their acquiring, holding or disposing of shares in the Company or whether an investment in the Company is suitable for them, they should consult their stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised under the Financial Securities and Markets Act 2000 (as amended by the Financial Services Act 2012) or, in the case of prospective investors outside the United Kingdom, another appropriately authorised independent financial adviser.

 

The risks can be summarised under the following headings:

 

-    Investment Objective Risks

-    Ordinary Shares

-    General Risks

-    Dividends

-    Investment Risks

-    General Market Risks

-    Emerging Market Risks

-    Debt Securities Risks

-    Cash and Cash-equivalent Investments Risks

-    Illiquid Securities Risks

-    Borrowings Risks

-    Foreign Exchange Risks

-    Taxation and Exchange Control Risks

-    Accounting Practices and Policies Risks

-    Reliance on Third-party Service Providers Risks

-    Potential Conflicts of Interest Risks

-    Past Performance Risks

-    Alternative Investment Fund Managers Directive Provisions

-    Foreign Account Tax Compliance Act Provisions

 

Going Concern

The Company's assets consist primarily of a diverse portfolio of listed equities which, in most circumstances, are realisable within a very short timescale. Therefore, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the Half Yearly Report.

 

Directors' Responsibility Statement

The Directors are responsible for preparing this Half Yearly Financial Report in accordance with applicable law and regulations. The Directors confirm that to the best of their knowledge:

 

-    the condensed set of interim financial statements contained within the Half Yearly Financial Report which have been prepared in accordance with IAS 34 "Interim Financial Reporting", give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company;

-    the Interim Board Report includes a fair review of the information required by 4.2.7R and 4.2.8R of the FCA's Disclosure and Transparency Rules; and,

-    the Half Yearly Report includes a fair review of the information required on material transactions with related parties and changes since the Annual Report.

 

For and on behalf of the Board of Aberdeen Asian Income Fund Limited

 

 

Peter Arthur

Chairman

15 August 2014

 

 

Condensed Statement of Comprehensive Income

 

 

  Six months ended 


  30 June 2014


 (unaudited)


 Revenue

 Capital

 Total


 £'000

 £'000

 £'000

Dividend income

9,259

-

9,259

Bond interest

953

-

953

Deposit interest

2

-

2

Gains/(losses) on financial assets at fair value through profit or loss

-

6,213

6,213

Currency gains/(losses)

-

452

452


_______

_______

_______


10,214

6,665

16,879


_______

_______

_______





Expenses




Investment management fee (note 9)

(726)

(1,088)

(1,814)

Other operating expenses (note 4)

(549)

-

(549)


_______

_______

_______

Profit/(loss) before finance items and taxation

8,939

5,577

14,516





Finance items




Finance costs

(49)

(74)

(123)


_______

_______

_______

Profit/(loss) before tax

8,890

5,503

14,393





Tax expense

(403)

-

(403)


_______

_______

_______

Profit/(loss) for the period (note 2)

8,487

5,503

13,990


_______

_______

_______

Profit/(loss) for the period analysed as follows:




Attributable to equity shareholders

8,487

5,503

13,990


_______

_______

_______

Attributable to C shares

 -

 -

 -


_______

_______

_______

Total

8,487

5,503

13,990


_______

_______

_______





Earnings per share (pence)(note 2):




Ordinary share




Basic and diluted

4.38

2.84

7.22


_______

_______

_______

C share




Basic and diluted

n/a

n/a

n/a


_______

_______

_______


The Company does not have any income or expense that is not included in profit for the period, and therefore the "Profit for the period" is also the "Total comprehensive income for the period", as defined in International Accounting Standard 1 (revised).

The total columns of this statement represent the Statement of Comprehensive Income, prepared in accordance with IFRS. The revenue and capital columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies. All items in the above statement derive from continuing operations.

All of the profit and total comprehensive income is attributable to the equity holders of Aberdeen Asian Income Fund Limited.

Figures for the six months ended 30 June 2013 have been restated to reflect the gain on investments held by C shareholders prior to conversion.

 

 

 Six months ended


  30 June 2013


 (unaudited)


 Revenue

 Capital

 Total


 £'000

 £'000

 £'000

Dividend income

8,546

-

8,546

Bond interest

516

-

516

Deposit interest

3

-

3

Gains/(losses) on financial assets at fair value through profit or loss

-

19,267

19,267

Currency gains/(losses)

-

(929)

(929)


_______

_______

_______


9,065

18,338

27,403


_______

_______

_______





Expenses




Investment management fee (note 9)

(791)

(1,187)

(1,978)

Other operating expenses (note 4)

(506)

-

(506)


_______

_______

_______

Profit/(loss) before finance items and taxation

7,768

17,151

24,919





Finance items




Finance costs

(45)

(67)

(112)


_______

_______

_______

Profit/(loss) before tax

7,723

17,084

24,807





Tax expense

(322)

-

(322)


_______

_______

_______

Profit/(loss) for the period (note 2)

7,401

17,084

24,485


_______

_______

_______

Profit/(loss) for the period analysed as follows:




Attributable to equity shareholders

7,401

15,720

23,121


_______

_______

_______

Attributable to C shares

 -

1,364

1,364


_______

_______

_______

Total

7,401

17,084

24,485


_______

_______

_______





Earnings per share (pence)(note 2):




Ordinary share




Basic and diluted

4.13

8.77

12.90


_______

_______

_______

C share




Basic and diluted

n/a

2.27

2.27


_______

_______

_______

 

 

Condensed Statement of Comprehensive Income (Cont'd)

 

 Year ended


 31 December 2013


 (audited)


 Revenue

 Capital

 Total


 £'000

 £'000

 £'000

Dividend income

17,544

-

17,544

Bond interest

1,184

-

1,184

Deposit interest

8

-

8

Gains/(losses) on financial assets at fair value through profit or loss

-

(23,927)

(23,927)

Currency gains/(losses)

-

98

98


_______

_______

_______


18,736

(23,829)

(5,093)


_______

_______

_______





Expenses




Investment management fee (note 9)

(1,578)

(2,368)

(3,946)

Other operating expenses (note 4)

(995)

-

(995)


_______

_______

_______

Profit/(loss) before finance items and taxation

16,163

(26,197)

(10,034)





Finance items




Finance costs

(88)

(133)

(221)


_______

_______

_______

Profit/(loss) before tax

16,075

(26,330)

(10,255)





Tax expense

(805)

(2)

(807)


_______

_______

_______

Profit/(loss) for the period (note 2)

15,270

(26,332)

(11,062)


_______

_______

_______

Profit/(loss) for the period analysed as follows:




Attributable to equity shareholders

15,270

(27,696)

(12,426)


_______

_______

_______

Attributable to C shares

 -

1,364

1,364


_______

_______

_______

Total

15,270

(26,332)

(11,062)


_______

_______

_______





Earnings per share (pence)(note 2):




Ordinary share




Basic and diluted

8.23

(14.92)

(6.69)


_______

_______

_______

C share




Basic and diluted

n/a

2.27

2.27


_______

_______

_______

 

 

Condensed Balance Sheet

 


As at

As at

As at



 30 June 2014

 30 June 2013

 31 December 2013



(unaudited)

(unaudited)

(audited)


Notes

£'000

£'000

£'000

Non-current assets





Investments held at fair value through profit or loss


388,117

413,505

380,554



_______

_______

_______

Current assets





Cash and cash equivalents


3,774

6,290

3,463

Other receivables


1,808

2,339

983



_______

_______

_______



5,582

8,629

4,446



_______

_______

_______






Current liabilities





Bank loans

7

(15,481)

(14,215)

(13,019)

Other payables


(556)

(540)

(864)



_______

_______

_______



(16,037)

(14,755)

(13,883)



_______

_______

_______

Net current liabilities


(10,455)

(6,126)

(9,437)



_______

_______

_______

Net assets


377,662

407,379

371,117



_______

_______

_______






Stated capital and reserves





Stated capital

8

194,183

190,808

193,733

Capital redemption reserve


1,560

1,560

1,560

Capital reserve


170,114

204,350

164,176

Revenue reserve


11,805

10,661

11,648



_______

_______

_______

Equity shareholders' funds


377,662

407,379

371,117



_______

_______

_______

Net asset value per share (pence):

3




Ordinary share





Basic


194.49

213.50

191.56



_______

_______

_______

 

 

 

 

Condensed Statement of Changes in Equity

 

 

 

Condensed Cash Flow Statement

 

 

Six months ended

Six months ended

Year ended


 30 June 2014

 30 June 2013

 31 December 2013


(unaudited)

(unaudited)

(audited)


£'000

£'000

£'000

Operating activities




Profit/(loss) for the period

13,990

24,485

(11,062)

Add back finance costs

123

112

221

Add back taxation paid

403

322

807

(Gains)/losses on investments held at fair value through profit or loss

(6,213)

(19,267)

23,927

Net currency (gains)/losses

(452)

929

(98)

Increase in other receivables

(775)

(271)

(84)

(Decrease)/increase in other payables

(300)

14

303


_________

_________

_________

Net cash inflow from operating activities before finance items and taxation

6,776

6,324

14,014





Loan interest paid

(130)

(129)

(220)





Overseas taxation paid

(453)

(339)

(822)


_________

_________

_________

Net cash inflow from operating activities

6,193

5,856

12,972





Investing activities




Purchases of investments

(20,356)

(23,381)

(41,544)

Sales of investments

19,005

9,300

18,404


_________

_________

_________

Net cash outflow from investing activities

(1,351)

(14,081)

(23,140)


_________

_________

_________





Financing activities




Issue of own shares

885

12,775

18,942

Exercise of warrants

-

4,289

4,289

Dividends paid

(8,330)

(7,098)

(13,980)

Loans drawn down

2,965

-

-


_________

_________

_________

Net cash (outflow)/inflow from financing activities

(4,480)

9,966

9,251


_________

_________

_________

Net increase/(decrease) in cash and cash equivalents

362

1,741

(917)


_________

_________

_________

Analysis of changes in cash during the period




Opening balance

3,463

4,532

4,532

Increase/(decrease) in cash as above

362

1,741

(917)

Effect of foreign currency exchange rate changes

(51)

17

(152)


_________

_________

_________

Cash and cash equivalents at the end of the period

3,774

6,290

3,463


_________

_________

_________

 

 

Notes to the Financial Statements

For the period ended 30 June 2014

 

1.

Accounting policies - basis of preparation


The Annual Report is prepared in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB), and interpretations issued by the International Financial Reporting Interpretations Committee of the IASB (IFRIC). The condensed Half Yearly Report has been prepared in accordance with International Accounting Standards (IAS) 34 - 'Interim Financial Reporting'. It has also been prepared using the same accounting policies applied for the year ended 31 December 2013 except for accounting policy changes made after 31 December 2013 that are to be reflected in the annual financial statements of 31 December 2014. Several new standards and amendments as listed below apply for the first time in 2014. However, these do not impact the interim financial statements of the Company.


Offsetting Financial Assets and Financial Liabilities - Amendments to IAS 32


Novation of Derivatives and Continuation of Hedge Accounting - Amendments to IAS 39


Recoverable Amount Disclosures for non_Financial Assets - Amendments to IAS 36


Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27)


IFRIC 21 Levies




At the date of authorisation of these financial statements, various other Standards, amendments to Standards and Interpretations which have not been applied to these financial statements, were in issue but were not yet effective.


IFRS 9 - Financial Instruments: Classification and Measurement (current proposed effective date for implementation 1 January 2018).




The financial statements have been prepared on a going concern basis. In accordance with the Financial Reporting Council's guidance on 'Going Concern and Liquidity Risk' the Directors have undertaken a review of the Company's assets which primarily consist of a diverse portfolio of listed equity shares which, in most circumstances, are realisable within a very short timescale. They have also been prepared on the assumption that approval as an investment trust will continue to be granted.




Financial instruments


The fair value of the financial assets and liabilities is the amount at which the asset could be sold or the liability transferred in a current transaction between market participants, other than in a forced or liquidation sale.


Investments held at fair value through profit or loss are valued at their quoted bid prices.


The fair value of borrowings as at 30 June 2014 has been estimated at £15,481,000 which is the same as the carrying value due to their short term nature. At 30 June 2013 and 31 December 2013 the fair value was £14,215,000 and £13,019,000 respectively which was the same as the carrying values.

 

 

3.

Net asset value per share


Ordinary shares


The basic net asset value per Ordinary share and the net asset values attributable to Ordinary shareholders at the period end calculated in accordance with the Articles of Association were as follows:








As at

As at

As at



 30 June
2014

 30 June
2013

 31 December 2013


Basic

(unaudited)

(unaudited)

(audited)


Attributable net assets (£'000)

377,662

407,379

371,117


Number of Ordinary shares in issue

194,183,389

190,808,389

193,733,389


Net asset value per Ordinary share (p)

194.49

213.50

191.56



_________

_________

_________




The calculation of the diluted net asset value per Ordinary share is no longer required as all of the remaining warrants were exercised on 17 May 2013 at 120p per share, giving rise to an additional 3,574,043 Ordinary shares in issue.

 


Six months ended

 Six months ended

 Year
ended



 30 June
2014

 30 June
2013

 31 December 2013



(unaudited)

(unaudited)

(audited)

4.

Other operating expenses (revenue)

£'000

£'000

£'000


Directors' fees

80

80

160


Secretarial and administration fees

65

63

127


Marketing contribution

116

114

239


Auditor's remuneration

21

16

31


Custodian charges

60

69

134


Other

207

164

304



_________

_________

_________



549

506

995



_________

_________

_________

 


Six months ended

Six months ended

Year
ended



 30 June
2014

 30 June
2013

 31 December 2013



(unaudited)

(unaudited)

(audited)

5.

Dividends on equity shares

£'000

£'000

£'000


Amounts recognised as distributions to equity holders in the period:





Second interim dividend for 2013 - 1.80p

-

-

3,434


Third interim dividend for 2013 - 1.80p

-

-

3,448


Fourth interim dividend for 2013 - 2.50p (2012 - 2.50p)

4,843

3,779

3,779


First interim dividend for 2014 - 1.80p (2013 - 1.80p)

3,487

3,319

3,319



_________

_________

_________



8,330

7,098

13,980



_________

_________

_________







A second interim dividend of 1.80p for the year to 31 December 2014 will be paid on 22 August 2014 to shareholders on the register on 18 July 2014. The ex-dividend date was 16 July 2014.

 

6.

Transaction costs


During the period 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 on financial assets at fair value through profit or loss in the Condensed Statement of Comprehensive Income. The total costs were as follows:








Six months ended

Six months ended

Year
ended



 30 June 2014

 30 June 2013

 31 December 2013



(unaudited)

(unaudited)

(audited)



£'000

£'000

£'000


Purchases

24

48

71


Sales

36

12

21



_________

_________

_________



60

60

92



_________

_________

_________

 

7.

Bank loans


In April 2014, the Company entered into a new unsecured three year £30 million multi currency facility agreement with Scotiabank (Ireland) Limited which replaced a £15 million secured facility.  At the period end approximately USD 11.0 million and HKD 120.0 million, equivalent to £15.5 million was drawn down from the £30 million facility. The interest rates attributed to the USD and HKD loans at the period end were 1.102% and 1.160% respectively.

 

 

 

9.

Transactions with the Manager


Mr H Young is a director of Aberdeen Asset Management PLC ("AAM") and its subsidiary Aberdeen Asset Management Asia Limited ("AAM Asia"). Aberdeen Private Wealth Management Limited ('APWM') is also a subsidiary of AAM and it has an agreement to provide management services to the Company, which it has sub-delegated to AAM Asia. APWM has an agreement to provide company secretarial and administration services to the Company.




The management fee is payable monthly in arrears based on an annual amount of 1% of the net asset value of the Company valued monthly. During the period £1,814,000 (30 June 2013 - £1,978,000; 31 December 2013 - £3,946,000) of management fees were paid and payable, with a balance of £309,000 (30 June 2013 - £330,000; 31 December 2013 - £636,000) being payable to AAM Asia at the period end.




The company secretarial and administration fee is based on an annual amount of £131,000 (30 June 2013 - £127,000;  31 December 2013 - £127,000), increased annually in line with any increases in RPI, payable quarterly in arrears. During the period £65,000 (30 June 2013 - £63,000; 31 December 2013 - £127,000) of fees were paid and payable, with a balance of £33,000 (30 June 2013 - £32,000; 31 December 2013 - £32,000) being payable to APWM at the period end.

 

 

11.

Half Yearly Financial Report


The financial information for the six months ended 30 June 2014 and 30 June 2013 has not been audited.

 

12.

This Half Yearly Financial Report was approved by the Board on 15 August 2014.

 

 

The Half Year Report will be posted to shareholders in late August 2014 and copies will be available on the Company's website (www.asian-income.co.uk*) or in hard copy format from the Company's registered office, Sir Walter Raleigh House, 48 - 50 Esplanade, St Helier, Jersey JE2 3QB.

 

*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

 

Aberdeen Private Wealth Management Limited

Company Secretary

15 August 2014

Independent Review Report to Aberdeen Asian Income Fund Limited

 

Introduction

We have been engaged by the Company to review the condensed set of financial statements in the Half Yearly Financial Report for the six months ended 30 June 2014 which comprises the Condensed Statement of Comprehensive Income, the Condensed Balance Sheet, the Condensed Statement of Changes in Equity, the Condensed Cash Flow Statement and the related explanatory notes 1 to 12. We have read the other information contained in the Half Yearly Financial Report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

 

This report is made solely to the Company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK and Ireland) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our work, for this report, or for the conclusions we have formed.

 

Directors' Responsibilities

The Half Yearly Financial Report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the Half Yearly Financial Report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

 

As disclosed in note 1, the annual financial statements of the Company are prepared in accordance with International Financial Reporting Standards (IFRS). The condensed set of financial statements included in this Half Yearly Financial Report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting".

 

Our Responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the Half Yearly Financial Report based on our review.

 

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the Half Yearly Financial Report for the six months ended 30 June 2014 is not prepared, in all material respects, in accordance with International Accounting Standard 34 and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

 

 

Ernst & Young LLP

Jersey

Channel Islands

15 August 2014

 

The maintenance and integrity of the Aberdeen Asian Income Fund Limited website is the responsibility of the Directors; the work carried out by the Auditor does not include consideration of these matters and, accordingly, the Auditor accepts no responsibility for any changes that may have occurred to the financial information since it was initially presented on the website.

 

Legislation in Jersey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

 

 

Investment Portfolio

As at 30 June 2014

 


Valuation

Total assets

Company

Country of activity

£'000

%

HSBC Holdings

Hong Kong

13,137

3.3

Singapore Post

Singapore

12,852

3.3

China Mobile

China

12,306

3.1

Singapore Telecommunications

Singapore

12,250

3.1

Oversea-Chinese Banking Corporation

Singapore

11,706

3.0

Venture Corporation

Singapore

11,635

3.0

BHP Billiton

Australia{A}

11,167

2.8

British American Tobacco Malaysia

Malaysia

10,622

2.7

SP Ausnet

Australia

10,381

2.7

United Overseas Bank

Singapore

10,167

2.6

Top ten investments


116,223

29.6

Keppel Corporation

Singapore

10,105

2.6

Swire Pacific (Class A and Class B shares)

Hong Kong

10,096

2.6

Woolworths

Australia

9,993

2.5

Jardine Cycle & Carriage

Singapore

9,842

2.5

Telstra

Australia

9,778

2.5

Canon

Japan

9,223

2.3

Singapore Technologies Engineering

Singapore

9,086

2.3

DFCC Bank{B}

Sri Lanka

9,036

2.3

Taiwan Mobile

Taiwan

8,984

2.3

Pos Malaysia

Malaysia

8,899

2.2

Top twenty investments


211,265

53.7

Australia & New Zealand Bank Group

Australia

8,702

2.2

Commonwealth Bank of Australia

Australia

8,572

2.2

Guinness Anchor

Malaysia

8,323

2.1

Tesco Lotus Retail Growth

Thailand

8,199

2.1

Taiwan Semiconductor Manufacturing Corporation

Taiwan

8,121

2.1

Yanlord Land Group{B}

China

7,968

2.0

Electricity Generating

Thailand

7,862

2.0

Far East Hospitality Trust

Singapore

7,565

1.9

BEC World

Thailand

7,443

1.9

DBS Group

Singapore

7,199

1.9

Top thirty investments


291,219

74.1

Telecom Corp of New Zealand (Australia listing)

New Zealand

6,711

1.7

QBE Insurance Group

Australia

6,497

1.7

Giordano International

Hong Kong

6,393

1.6

CDL Hospitality Trust

Singapore

6,319

1.6

Advanced Information Services

Thailand

5,947

1.5

Shopping Centres Australasia

Australia

5,604

1.4

Li & Fung

Hong Kong

5,525

1.4

Star Publications

Malaysia

5,258

1.4

PetroChina

China

5,166

1.3

Scentre Group

Australia

5,164

1.3

Top forty investments


349,803

89.0

Siam Cement

Thailand

4,951

1.2

Ascendas Hospitality Trust

Singapore

4,731

1.2

Hana Microelectronics

Thailand

4,038

1.0

Keppel REIT

Singapore

4,030

1.0

Hong Leong Finance

Singapore

3,932

1.0

Westfield Corporation

Australia

3,473

0.9

Ratchaburi Electricity

Thailand

3,324

0.8

Lafarge Malaysia

Malaysia

3,084

0.8

Okinawa Cellular Telephone

Japan

2,623

0.7

Yingde Gases{B}

China

2,227

0.6

Top fifty investments


386,216

98.2

Kingmaker Footwear

Hong Kong

1,113

0.3

Texwinca Holdings

Hong Kong

788

0.2

Total investments


388,117

98.7

Net current assets{C}


5,026

1.3

Total assets


393,143

100.0

{A} Incorporated in and listing held in United Kingdom.

{B} Corporate bonds.

{C} Before deduction of bank loans of £15,481,000.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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