Final Results

Acorn Income Fund Ld
20 April 2001

                             CHAIRMAN'S STATEMENT

I am pleased to present to Shareholders the second Annual Report of Acorn
Income Fund Limited for the year ended 31st December, 2000 covering the first
full year of investment activity for the Company.

The Company's investment strategy has continued to be productive with the
objectives of providing Shareholders with a high income and the opportunity
for growth in income and capital being successfully achieved. This has
resulted in an increase in net asset value per share of 3.62% together with an
uplift of over one quarter in the revenue return. Dividends for the year
totalled 11p per share compared with 8.5p for the 46 week period, a like for
like increase of 14.6%.

The year under review saw further fund raising taking place. On the 13th
December, and in response to demand from the market, 2,600,000 ordinary shares
were issued at 133.5p. This, together with a proportionate increase in the
bank term loan facility of £2,279,000, raised an additional £5.691m (net) for
investment. At the balance sheet date the extra cash raised remained largely
on deposit but is now fully invested. It is pleasing to report that the
Company's shares have continued to trade at a premium to their net asset value
for much of the year. As at the 31st March, 2001, the most recent reporting
date, the net asset value per share stood at 130.8p compared to the share
price of 133p on the same date.

The year under review was notable for the stability experienced in UK base
rates which remained unchanged at 6% from February 2000 until the turn of the
year. Despite this background, the period was an extremely difficult one with
much attention focussing on the telecommunications, media and technology
sectors and large fluctuations experienced in the UK stockmarket. Against this
background, the performance of the Company's portfolio has been creditable.

The early months of 2001 have proved equally challenging, with the UK market
falling in common with other world markets, as fears of recession have grown.
While this negative sentiment may hold back the growth of our investments in
the short-term, our portfolio remains well balanced with many of the
underlying companies continuing to trade at satisfactory levels.

I look forward to welcoming Shareholders to our second Annual General Meeting
at 10.00 am on 11th May, 2001 at the Company's registered office at TSB House,
Le Truchot, St Peter Port, Guernsey.


D.M. Bralsford

20th April, 2001


                      10 PRINCIPAL PORTFOLIO INVESTMENTS

                            AS AT 31 DECEMBER 2000
Stock                                 Sector                Portfolio    Market
                                                                          Value

                                                                         £ '000

Guaranteed Exp Finance 12.875% bonds  UK Government Bonds   High Inc      3,904
29/9/2002
Rotork                                Engineering           Smaller       3,774
                                                            Co
Charles Baynes                        Distributors          Smaller       2,585
                                                            Co
Metalrax Group                        Engineering           Smaller       2,464
                                                            Co
Dowding & Mills                       Electronic &          Smaller       2,358
                                      Electrical            Co
Renold                                Engineering           Smaller       2,291
                                                            Co
Elementis                             Chemicals             Smaller       2,220
                                                            Co
Sirdar Group                          Household Goods &     Smaller       2,119
                                      Textiles              Co
Heywood Williams                      Const. & Building     Smaller       2,026
                                      Materials             Co
Pendragon                             Motor Distributors    Smaller       1,859
                                                            Co
                                                                         25,600


                      10 PRINCIPAL PORTFOLIO INVESTMENTS

                            AS AT 31 DECEMBER 1999

Stock                  Sector                      Portfolio       Market Value

                                                                         £ '000

Fine Art Developments  Retailers                   Smaller Co             2,960
Allied Leisure         Leisure                     Smaller Co             2,153
Abacus Polar           Distributors                Smaller Co             2,047
Ash & Lacy             Engineering                 Smaller Co             2,023
Heywood Williams       Const. & Building Materials Smaller Co             1,949
Jove Investment Trust  Investment Trusts           High Inc               1,912
Baynes (Charles)       Distributors                Smaller Co             1,889
Stat-Plus Group        Support Services            Smaller Co             1,865
Metalrax Group         Engineering                 Smaller Co             1,801
Finelist Group         Distributors                Smaller Co             1,767
                                                                         20,366

The 10 principal investments represent 42.9 % of the investment portfolio
(1999: 35.9%).



                          Statement of total return

                    for the year ended 31st December 2000
                                                          Period 11th February
                                                                   to

                                                           31st December 1999*
                                    Revenue Capital Total Revenue Capital Total

                                      £'000   £'000 £'000   £'000   £'000  £'000

Gains on investment                       -   2,521 2,521       -   4,211  4,211
Income                                4,405       - 4,405   1,965       -  1,965
Fund management fees                  (144)   (432) (576)    (68)   (203)  (271)
Other expenses                        (123)   (217) (340)    (85)   (554)  (639)

Net return on ordinary activities     4,138   1,872 6,010   1,812   3,454  5,266
before finance costs
Interest payable                      (449) (1,348)(1,797)  (180)   (538)  (718)

Return on ordinary activities for     3,689     524 4,213   1,632   2,916  4,548
the period
Dividends paid                      (2,970)     -  (2,970)(1,395)      - (1,395)

Transfer to reserve                     719     524 1,243     237   2,916  3,153

Return per Ordinary Share            13.59p   1.93p 15.52p 10.59p  18.92p 29.51p

* 46 week period


                                BALANCE SHEET

                          as at 31st December, 2000

                                                                           31st
                                                                      December,
                                                                           1999
                                                        £'000   £'000     £'000
Fixed assets
Investments listed at market value                             59,680    56,754
Current assets
Debtors                                                 2,068               812
Cash at bank                                            5,136             2,137
                                                        7,204             2,949
Creditors: amounts falling due within one year
Creditors                                             (2,393)           (2,146)
Net current assets                                              4,811       803
Creditors - amounts falling due after more than one
year
Long term bank loan                                           (25,616)  (23,337)
Net asset value                                                38,875    34,220
Share capital and reserves
Share capital                                                   7,400     6,750
Share premium                                                  27,079    24,317
Revenue reserve                                                   956       237
Capital reserve                                                 3,440     2,916
Total equity shareholders' funds                               38,875    34,220
Net asset value per Ordinary Share                            131.33p   126.74p



D.M. Bralsford                                        J.M. McKean

20th April, 2001

                             CASH FLOW STATEMENT

                    for the year ended 31st December, 2000


                                                               £'000     £'000
Net cash inflow from operating activities                      3,267       993
Servicing of finance
Interest paid                                                (1,760)     (438)
Capital expenditure and financial investment
Purchase of investments                                     (44,345)  (68,850)
Sale of investments                                           43,791    16,748
                                                               (554)  (52,102)
Dividends paid                                               (3,645)     (720)
Cash outflow before use of liquid resources and financing    (5,959)  (53,260)
Financing
Issue of ordinary share capital                                3,412    31,067
Loan drawn down                                                2,279    23,337
Movement in net cash                                           2,999     2,137