Final Results

Henderson Far East Income Limited 30 October 2007 Page 1 of 12 30 October 2007 HENDERSON FAR EAST INCOME LIMITED Unaudited Preliminary Group Results for the period ended 31 August 2007 Extracts from the Chairman's Statement I am pleased to report that since the transfer of the assets of Henderson Far East Income Trust plc to your Company on 18 December 2006, we have utilised our additional investment flexibility and successfully increased the amount of distributable income generated by our portfolio. This vindicates the decision to move your Company's domicile to Jersey and gives us the opportunity not only to forecast an increase in dividends of 9.1% in the coming financial year, but also to position the portfolio for a higher total return. Performance The performance of your Company has been strong, and since 18 December 2006 it has achieved a net asset value total return of 16.0% and a share price total return of 15.9%. When combined with the performance data for the previous company , the results reveal a total increase of 28.6% in net asset value total return and a 35.2% increase in share price total return over the twelve month period since 1 September 2006. Dividends The first financial period for your Company is the ten months to 31 August 2007 and therefore only three interim dividends will be paid in respect of this financial period. Your Company paid a first interim dividend of 2.75p on 31 May 2007, a second interim dividend of 2.75p on 31 August 2007 and has declared a third interim dividend of 2.75p which will be paid on 30 November 2007. This makes a total for the period of 8.25p, compared to 6.30p for the equivalent period last year in the previous company, and represents an increase of 30.9%. Your Board is confident that in the coming full financial year it will be able to pay a quarterly dividend of at least 3.0p, which is an increase of 9.1% on the current quarterly rate of 2.75p, making total dividends for the year of at least 12.0p. Outlook We have maintained our cautious stance as we continue to believe that Asian stock markets will experience increased volatility in the short term. A slow down in the US will not only impact Asia's exports and slow GDP growth but could also lead to an outflow of investment from the region as investors become more risk averse. However, such corrections will provide buying opportunities and we shall take advantage of any weakness. Our medium to long term view of the Asian markets remains extremely positive. -MORE- Page 2 of 12 HENDERSON FAR EAST INCOME LIMITED Unaudited Preliminary Group Results for the period ended 31 August 2007 Extracts from the Chairman's Statement, continued Savings Your Company aims to be an investment of choice for those looking to build a diversified income portfolio. Investments can be made cost effectively through Itshenderson, our Manager's investment service for private investors. Annual General Meeting The Annual General Meeting will be held at 12.00 noon on Tuesday 11 December 2007 at BNP House, Anley Street, St Helier, Jersey and shareholders are most welcome to attend. Your Board recognises that this meeting may be difficult for investors based on the UK mainland to attend. Accordingly an open presentation to shareholders will be held at 3pm on 13 December 2007 at 4 Broadgate, London EC2M 2DA where the Manager will make an investment presentation and I shall be happy to answer questions. If you would like to attend please complete and return the invitation enclosed with this report. John Russell Chairman 30 October 2007 -MORE- Page 3 of 12 HENDERSON FAR EAST INCOME LIMITED Unaudited Preliminary Group Results for the period ended 31 August 2007 Consolidated Income Statement for the period 6 November 2006 to 31 August 2007 Revenue Capital return return Total Â£'000 Â£'000 Â£'000 Investment income (note 2) 11,808 - 11,808 Other income (note 3) 434 - 434 Gains on investments held at fair value through profit or loss - 23,330 23,330 --------- ---------- ----------- Total income 12,242 23,330 35,572 Expenses Management fees (599) (599) (1,198) Other operating expenses (206) (169) (375) --------- ---------- ---------- Profit before finance costs and taxation 11,437 22,562 33,999 Finance costs (79) (66) (145) --------- -------- --------- Profit before taxation 11,358 22,496 33,854 Taxation (note 4) (1,282) (36) (1,318) --------- --------- ---------- Profit for the period 10,076 22,460 32,536 ========= ========= ========== Earnings per ordinary share (note 5) 12.98p 28.94p 41.92p ========= ========= ========== The total column of this statement represents the Consolidated Income Statement, prepared in accordance with International Financial Reporting Standards. The revenue return and capital return 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 income is attributable to the equity holders of Henderson Far East Income Limited. There are no minority interests. -MORE- Page 4 of 12 HENDERSON FAR EAST INCOME LIMITED Unaudited Preliminary Group Results for the period ended 31 August 2007 Consolidated and Parent Company Statement of Changes in Equity for the period 6 November 2006 to 31 August 2007 Consolidated Period 6 November 2006 to 31 August 2007 Stated Distributable Other capital Revenue capital reserve reserves reserve Total Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Opening balance - - - - - Issue of shares 180,982 - - - 180,982 Share issue costs (499) (12) - - (511) Transfer to distributable reserves (180,483) 180,483 - - - Net profit from ordinary activities after taxation - - 22,460 10,076 32,536 Ordinary dividends paid (note - - - (4,270) (4,270) 8) ---------- ---------- --------- --------- ---------- At 31 August 2007 - 180,471 22,460 5,806 208,737 ========== ========== ========= ========= ========== Company Period 6 November 2006 to 31 August 2007 Stated Distributable Other capital Revenue capital reserve reserves reserve Total Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Opening balance - - - - - Issue of shares 180,982 - - - 180,982 Share issue costs (499) (12) - - (511) Transfer to distributable reserves (180,483) 180,483 - - - Net profit from ordinary activities after taxation - - 24,098 8,438 32,536 Ordinary dividends paid - - - (4,270) (4,270) (note 8) ---------- ---------- --------- --------- ---------- At 31 August 2007 - 180,471 24,098 4,168 208,737 ========== ========== ========= ========= ========== - MORE- Page 5 of 12 HENDERSON FAR EAST INCOME LIMITED Unaudited Preliminary Group Results for the period ended 31 August 2007 Consolidated and Parent Company Balance Sheet at 31 August 2007 Consolidated Company 2007 2007 Â£'000 Â£'000 Non current assets Investments held at fair value through profit or loss 199,414 143,433 ----------- ----------- Current assets Other receivables 6,722 61,262 Deferred tax asset 152 - Cash and cash equivalents 17,657 16,614 ---------- ---------- 24,531 77,876 ---------- --------- Total assets 223,945 221,309 ---------- ---------- Current liabilities Other payables (10,147) (7,733) Bank loans and overdrafts (5,061) (4,839) ---------- ---------- (15,208) (12,572) ---------- ---------- Net assets 208,737 208,737 ========== ========== Equity attributable to equity shareholders Stated capital - - Distributable reserve 180,471 180,471 Retained earnings: Other capital reserves 22,460 24,098 Revenue reserve 5,806 4,168 ---------- ----------- Total equity 208,737 208,737 ========== ========== Net asset value per ordinary share (note 7) 268.91p 268.91p ========== ========== -MORE- Page 6 of 12 HENDERSON FAR EAST INCOME LIMITED Unaudited Preliminary Group Results for the period ended 31 August 2007 Consolidated and Parent Company Cash Flow Statement for the period 6 November 2006 to 31 August 2007 Consolidated Company Â£'000 Â£'000 Operating activities Profit before taxation 33,854 32,816 Add back interest paid 139 126 Less gains on investments held at fair value through profit or loss (23,330) (24,556) Less net purchases of investments held at fair value through profit or loss (175,534) (118,520) In specie transfer of securities in consideration for shares issued 178,200 178,200 Increase in other receivables (1,942) (4,649) Increase in amounts due from brokers (4,072) (4,072) Increase in other payables 451 436 Unrealised tax on forward exchange contracts 47 23 Increase in amounts due to brokers 9,034 7,223 Scrip dividends included in investment income (303) (303) ---------- --------- Net cash inflow from operating activities before interest and taxation 16,544 66,724 Interest paid (139) (126) Taxation on investment income (1,332) (612) ---------- ---------- Net cash inflow from operating activities 15,073 65,986 ========== ========== Financing activities Equity dividends paid (4,270) (4,270) Drawdown of loan 2,236 2,236 Issue proceeds 2,544 2,544 Issue costs (504) (504) Increase in inter-company loan - (51,927) ---------- ---------- Net cash inflow/(outflow) from financing 6 (51,921) ========== ========== Increase in cash and cash equivalents 15,079 14,065 Cash and cash equivalents at the start of the period - - Exchange movements (247) (54) ---------- ---------- Cash and cash equivalents at the end of the year (including bank overdrafts of Â£2,825 and Â£2,603 respectively) 14,832 14,011 ========== ========== -MORE- Page 7 of 12 HENDERSON FAR EAST INCOME LIMITED Unaudited Preliminary Group Results for the period ended 31 August 2007 Notes to the Financial Statements 1. General Information The entity is a closed-end company, registered as a no par value company under the Companies (Jersey) Law 1991, with its shares listed on the London and New Zealand Stock Exchanges. The Company was incorporated on 6 November 2006. Accordingly the accounting period runs from 6 November 2006 to 31 August 2007, and there are no comparative figures. 2. Accounting Policies (a) Basis of preparation The consolidated financial information for the period ended 31 August 2007 has been prepared in accordance with International Financial Reporting Standards ('IFRS'). These comprise standards and interpretations approved by the International Accounting Standards Board ('IASB'), together with interpretations of the International Accounting Standards and Standing Interpretations Committee approved by the International Accounting Standards Committee ('IASC') that remain in effect, to the extent that IFRS have been adopted by the European Union. The principal accounting policies adopted are set out below. Where consistent with International Financial Reporting Standards ('IFRS') the financial statements have also been prepared in accordance with the guidance set out in the Statement of Recommended Practice ('SORP') for Investment Trusts issued by the Association of Investment Companies ('AIC') as revised in December 2005. The Company has not applied the following IFRS and International Financial Reporting Interpretations Committee (IFRIC) interpretations that have been issued but are not yet effective: IFRS 6 - Exploration for and evaluation of mineral resources (effective for financial years beginning on or after 1 January 2007). This standard is not applicable to the Company's operations. IFRS 7 - Financial Instruments - Disclosures (effective for financial years beginning on or after 1 January 2007). This standard supersedes the disclosure requirements of IAS 32 and will result in additional disclosures in the Company's financial statements. IFRS 8 - Operating Segments (effective for financial years beginning on or after 1 January 2009). IFRS 8 is not relevant to the Company's operations. A complementary amendment to IAS 1 - Presentation of Financial Statements - Capital Disclosures (effective for financial years beginning on or after 1 January 2007). The Company assessed the impact and concluded that certain additional disclosures would be necessary upon their application. IFRIC 11, IFRS 2 - Group and Treasury Share Transactions (effective for financial years beginning on or after 1 March 2007). IFRIC 11 is not relevant to the Company's operations. IFRIC 12 - Service Concession Arrangements (effective for financial years beginning on or after 1 January 2008). IFRIC 12 is not relevant to the Company's operations. -MORE- Page 8 of 12 HENDERSON FAR EAST INCOME LIMITED Unaudited Preliminary Group Results for the period ended 31 August 2007 Notes to the Financial Statements, continued (b) Basis of Consolidation The consolidated financial information comprises the financial information of Henderson Far East Income Limited ('the Company') and its subsidiary undertaking, Henderson Far East (Malta) Limited ('the Subsidiary'). All intra-group balances, transactions, income and expenses and profits and losses resulting from intra-group transactions that are recognised as assets, are eliminated in full. The Subsidiary is fully consolidated from the date of inception, being the date on which the group obtains control, and continue to be consolidated until the date that such control ceases. (c) Investments Held at Fair Value Through Profit or Loss All investments are designated upon initial recognition as held at fair value through profit or loss. Assets are de-recognised at the trade date of the disposal. Proceeds will be measured at fair value, which will be regarded as the proceeds of sale less any transaction costs. The fair value of the financial instruments is based on their quoted bid price at the balance sheet date, without deduction of the estimated future selling costs. Changes in the fair value of investments held at fair value through profit or loss and gains and losses on disposal are recognised in the Consolidated Income Statement as 'Gains or losses on investments held at fair value through profit or loss'. Also included within this caption are transaction costs in relation to the purchase or sale of investments, including the difference between the purchase price of an investment and its bid price at the date of purchase. (d) Income Dividends receivable on equity shares are recognised as revenue for the period on an ex-dividend basis. Special dividends are treated as revenue return or as capital return, depending on the facts of each individual case. Income from fixed interest debt securities is recognised using the effective interest rate method. Bank interest is accounted for on an accruals basis. Premia on written options are recognised as income. (e) Expenses All administration expenses and interest payable are accounted for on an accruals basis. Expenses which are incidental to the purchase or sale of an investment are charged to the capital column of the Consolidated Income Statement and allocated to other capital reserves. On the basis of the Board's long term split of returns equally between capital gains and income, the company charges 50% of its operating expenses to capital. Purchase and sale transaction costs for the year ended 31 August 2007 were Â£435,000 and Â£544,000 respectively. These comprise mainly stamp duty and commission. -MORE- Page 9 of 12 HENDERSON FAR EAST INCOME LIMITED Unaudited Preliminary Group Results for the period ended 31 August 2007 Notes to the Financial Statements, continued (f) Taxation Under Article 123A of the Income Tax (Jersey) Law 1961, as amended, the Company has obtained Jersey exempt company status for the period and is therefore exempt from Jersey income tax on non-Jersey source income and bank interest (by concession). A Â£600 annual exempt company fee is payable by the Company. Current income tax relating to items recognised directly in equity is recognised in equity and not in the Consolidated Income Statement. Deferred tax is accounted for within provisions for liabilities and charges and is provided on all taxable temporary differences that have originated but not reversed by the balance sheet date, other than those differences regarded as permanent. Any liability to deferred tax is provided at the average rate of tax expected to apply, based on tax law that had been enacted or substantially enacted by the balance sheet date. A deferred tax asset is recognised only to the extent that it is considered probable that sufficient taxable profits will be available to allow the deferred tax benefit of that asset to be utilised. Deferred tax assets and liabilities are not discounted to reflect the time value of money. Maltese Income Tax Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance sheet date. (g) Foreign Currency For the purposes of the consolidated financial information, the results and financial position of each entity is expressed in pounds sterling, which is the functional currency of the company and the presentational currency of the group. Sterling is the functional currency because it is the currency of the primary economic environment in which the group operates. The Company is a closed-end investment company, incorporated in Jersey, with its shares listed on the London Stock Exchange. Sterling is the currency by which dividends are returned to shareholders, share buy-backs and share issues are conducted and is the cost base of the company. Transactions recorded in overseas currencies during the year are translated into sterling at the appropriate daily exchange rates. Assets and liabilities denominated in overseas currencies at the balance sheet date are translated into sterling at the exchange rates ruling at that date. (h) Cash and Cash Equivalents Cash comprises cash in hand and demand deposits. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and that are subject to insignificant risks of changes in value. (i) Bank Borrowings Interest-bearing bank loans and overdrafts are recorded as the proceeds received, net of direct issue costs. Finance charges, including premiums payable on settlement or redemption and direct issue costs, are accounted for on an accruals basis in the Consolidated Income Statement using the effective interest rate method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise. -MORE- Page 10 of 12 HENDERSON FAR EAST INCOME LIMITED Unaudited Preliminary Group Results for the period ended 31 August 2007 Notes to the Financial Statements, continued (j) Segmental Reporting The directors are of the opinion that the Group is engaged in a single segment of business, being investment business. Period 6 November 2006 to 31 August 2007 2. Investment Income Â£'000 Income from investments Overseas dividends 11,465 --------- Interest income 40 Stock dividends 303 --------- 11,808 ========= Period 6 November 2006 to 31 August 2007 3. Other Income Â£'000 Bank and other interest 124 Option premium income 310 --------- 434 ========= Period 6 November 2006 to 31 August 2007 Revenue Capital Total 4. Taxation Â£'000 Â£'000 Â£'000 The taxation charge for the period is comprised of the following: Foreign withholding tax suffered 1,282 - 1,282 Current tax expense - 188 188 Deferred tax credit - (152) (152) ------- ------- ------- 1,282 36 1,318 ======= ======= ======= The taxation on profit differs from the theoretical expense that would apply on the Company's profit before taxation using the applicable tax rate in Jersey of 20% as follows: 2007 Â£'000 Profit before taxation 33,854 Theoretical taxation expense at 20% 6,771 Tax effect of: - Jersey exempt tax relief (6,771) - Foreign withholding tax 1,282 - Maltese income tax 36 --------- Tax charge for the period 1,318 ========= -MORE- Page 11 of 12 HENDERSON FAR EAST INCOME LIMITED Unaudited Preliminary Group Results for the period ended 31 August 2007 Notes to the Financial Statements, continued 5. Earnings per Ordinary Share The earnings per ordinary share figure is based on the net gain for the year of Â£32,536,000 and on the weighted average number of ordinary shares in issue during the period of 77,622,621. The earnings per ordinary share figure detailed above can be further analysed between revenue and capital, as below. The company has no securities in issue that could dilute the return per ordinary share. Therefore the basic and diluted earnings per ordinary share are the same. Period 6 November 2006 to 31 August 2007 Â£'000 Net revenue gain 10,076 Net capital gain 22,460 --------- Net total gain 32,536 ========= Weighted average number of ordinary shares in issue during the period 77,622,621 pence Revenue earnings per ordinary share 12.98 Capital earnings per ordinary share 28.94 --------- Total earnings per ordinary share 41.92 ========= 2007 Authorised Issued and fully paid 6. Called-up Share Capital Founder shares of no par value 2 - Ordinary shares of no par value Unlimited 77,622,621 --------------- 77,622,621 =============== On 15 December 2006 the Company issued 77,622,621 ordinary shares of no par value for consideration value of Â£180,982,000 incurring Â£511,000 of issue expenses. 7. Net Asset Value per Share The net asset value per ordinary share of 268.91p is based on the net assets attributable to the ordinary shares of Â£208,737,000 and on the 77,622,621 ordinary shares in issue at 31 August 2007. -MORE- Page 12 of 12 HENDERSON FAR EAST INCOME LIMITED Unaudited Preliminary Group Results for the period ended 31 August 2007 Notes to the Financial Statements, continued Period 6 November 2006 to 31 August 2007 8. Dividends Â£'000 Amounts recognised as distributions to equity shareholders during the period First interim paid 2007 -2.75p per share 2,135 Second interim paid 2007 - 2.75p per share 2,135 --------- 4,270 ========= The third interim dividend has not been included as a liability in these financial statements as it was announced and paid after 31 August 2007. The revenue available for distribution by way of dividend for the period is Â£10,076,000. The proposed third interim dividend of 2.75p per share will be paid on 30 November 2007 to shareholders on the register of members at the close of business on 9 November 2007. The shares will go ex-dividend on 7 November 2007. 9. 2007 Accounts The preliminary figures for the period ended 31 August 2007, which do not constitute statutory accounts, are an extract from the group's draft accounts for the period. These accounts have not yet been delivered to the Registrar of Companies in Jersey, nor have the auditors yet reported on them. 10. Annual Report and AGM The full annual report and accounts will be posted to shareholders in November 2007 and copies will be available thereafter from the Secretary at the Company's Registered Office, BNP House, Anley Street, St Helier, Jersey JE2 3QE. The Annual General Meeting will be held on Tuesday 11 December 2007 at 12 noon, at the Registered Office. -ENDS- For further information please contact: Michael Kerley James de Sausmarez Fund Manager Head of Investment Trusts Henderson Far East Income Limited Henderson Global Investors Telephone: 020 7818 5053 Telephone: 020 7818 3349 Sarah Gibbons-Cook Investor Relations and PR Manager Henderson Global Investors Telephone: 020 7818 3198 This information is provided by RNS The company news service from the London Stock Exchange

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