Annual Financial Report

RNS Number : 9461A

Aberdeen Asian Income Fund Limited

30 March 2017

 

ABERDEEN ASIAN INCOME FUND LIMITED

ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2016

STRATEGIC REPORT - COMPANY SUMMARY AND FINANCIAL HIGHLIGHTS

The Company

Launched in December 2005, Aberdeen Asian Income Fund Limited (the "Company") is registered with limited liability in Jersey as a closed-end investment company under the Companies (Jersey) Law 1991 with registered number 91671.  The Company's Ordinary Shares are listed on the premium segment of the London Stock Exchange.

Investment Objective

The investment objective of the Company is to provide investors with a total return primarily through investing in Asian Pacific securities, including those with an above average yield.  Within its overall investment objective, the Company aims to grow its dividends over time.

Management

The investment management of the Company has been delegated by Aberdeen Private Wealth Management Limited (the "Manager", the "Alternative Investment Fund Manager" or "AIFM") to Aberdeen Asset Management Asia Limited ("AAM Asia" or the "Investment Manager"). AAM Asia is based in Singapore and is the Asia Pacific headquarters, of Aberdeen Asset Management PLC (the "Aberdeen Group"), a publicly-quoted company on the London Stock Exchange. AAM Asia and APWML are wholly-owned subsidiaries of the Aberdeen Group.

Website

Up-to-date information can be found on the Company's website asian-income.co.uk.

FINANCIAL HIGHLIGHTS

Dividend per Ordinary share		Earnings per Ordinary share - basic (revenue)
2016	8.75p	2016	9.15p
2015	8.50p	2015	9.11p
Ordinary share price total return{A}		Net asset value total return{A} - 2016
2016	+28.4%	2016	+29.9%
2015	-16.8%	2015	-9.9%
{A}1 year return		{A} 1 year return
MSCI AC Asia Pacific ex Japan Index total return (currency adjusted){A}		(Discount)/premium to net asset value per Ordinary share
2016	+27.7%	2016	-8.3%
2015	-3.9%	2015	-6.8%
{A}1 year return
Ongoing charges
2016	1.19%
2015	1.25%

STRATEGIC REPORT - OVERVIEW OF STRATEGY

Business Model

The Company aims to attract long term private and institutional investors wanting to benefit from the growth prospects of Asian companies including those with above average dividend yields.

The business of the Company is that of an investment company and the Directors do not envisage any change in this activity in the foreseeable future. 

Investment Policy

Asset Allocation

The Company primarily invests in the Asia Pacific region through investment in:

-         companies listed on stock exchanges in the Asia Pacific region;

-         Asia Pacific securities, such as global depositary receipts (GDRs), listed on other international stock exchanges;

-         companies listed on other international exchanges that derive significant revenues or profits from the Asia Pacific region; and

-         debt issued by governments or companies in the Asia Pacific region or denominated in Asia Pacific currencies.

The Company's investment policy is flexible, enabling it to invest in all types of securities, including equity shares, preference shares, debt, convertible securities, warrants and other equity-related securities.

The Company is free to invest in any particular market segments or any particular countries in the Asia Pacific region.

The Company invests in small, mid and large capitalisation companies. The Company's policy is not to acquire securities that are unquoted or unlisted at the time of investment (with the exception of securities which are about to be listed or traded on a stock exchange). However, the Company may continue to hold securities that cease to be quoted or listed if the Investment Manager considers this to be appropriate.

Typically, the portfolio will comprise around 50 holdings (but without restricting the Company from holding a more or less concentrated portfolio in the future). At 31 December 2016 there were 56 holdings in the portfolio (2015 - 56). 

Risk Diversification

The Company will not invest more than 10%, in aggregate, of the value of its Total Assets in investment trusts or investment companies admitted to the Official List, provided that this restriction does not apply to investments in any such investment trusts or investment companies which themselves have stated investment policies to invest no more than 15% of their Total Assets in other investment trusts or investment companies admitted to the Official List. In any event, the Company will not invest more than 15% of its Total Assets in other investment trusts or investment companies admitted to the Official List.

In addition, the Company will not:

-         invest, either directly or indirectly, or lend more than 20% of its Total Assets to any single underlying issuer (including the underlying issuer's subsidiaries or affiliates), provided that this restriction does not apply to cash deposits awaiting investment;

-         invest more than 20% of its Total Assets in other collective investment undertakings (open-ended or closed-ended);

-         expose more than 20% of its Total Assets to the creditworthiness or solvency of any one counterparty (including the counterparty's subsidiaries or affiliates);

-         invest in physical commodities;

-         enter into derivative transactions for speculative purposes;

-         take legal or management control of any of its investee companies; or

-         conduct any significant trading activity.

The Company may invest in derivatives, financial instruments, money market instruments and currencies solely for the purpose of efficient portfolio management (i.e. solely for the purpose of reducing, transferring or eliminating investment risk in the Company's investments, including any technique or instrument used to provide protection against foreign exchange and credit risks).

The Investment Manager expects the Company's assets will normally be fully invested. However, during periods in which changes in economic conditions or other factors so warrant, the Company may reduce its exposure to securities and increase its position in cash and money market instruments.

Gearing Policy

The Board is responsible for determining the gearing strategy for the Company. The Board has restricted the maximum level of gearing to 25% of net assets although, in normal market conditions, the Company is unlikely to take out gearing in excess of 15% of net assets. Gearing is used selectively to leverage the Company's portfolio in order to enhance returns where this is considered appropriate. Borrowings are generally short term, but the Board may from time to time determine to incur longer term borrowings where it is believed to be in the Company's best interests to do so.  Particular care is taken to ensure that any bank covenants permit maximum flexibility of investment policy.

The percentage investment and gearing limits set out under this sub-heading "Investment Policy" are only applied at the time that the relevant investment is made or borrowing is incurred.

In the event of any breach of the Company's investment policy, shareholders will be informed of the actions to be taken by the Investment Manager by an announcement issued through a Regulatory Information Service or a notice sent to shareholders at their registered addresses in accordance with the Articles of Association.

The Company may only make material changes to its investment policy (including the level of gearing set by the Board) with the approval of shareholders (in the form of an ordinary resolution). In addition, any changes to the Company's investment objective or policy will require the prior consent of the Jersey Financial Services Commission ("JFSC") to the extent that they materially affect the import of the information previously supplied in connection with its approval under Jersey Funds Law or are contrary to the terms of the Jersey Collective Investment Funds laws.

Duration

The Company does not have a fixed life.

MSCI AC Asia Pacific (ex Japan) Index

The Company's portfolio is constructed without reference to any stockmarket index. It is likely, therefore, that there will be periods when the Company's performance will be quite unlike that of any index and there can be no assurance that such divergence will be wholly or even primarily to the Company's advantage.  The Company compares its performance against the currency-adjusted MSCI AC Asia Pacific (ex Japan) Index.

Key Performance Indicators (KPIs)

The Board uses a number of financial performance measures to assess the Company's success in achieving its objective and determine the progress of the Company in pursuing its investment policy.  The main KPIs identified by the Board in relation to the Company which are considered at each Board meeting are as follows:

KPI	Description
Dividend Payments per Ordinary Share	The Board's aim is to seek to grow the Company's dividends over time. Dividends paid over the past 10 years are set out in the published Annual Report.
Performance and NAV	The Board considers the Company's NAV total return figures to be the best indicator of performance over time and these are therefore the main indicators of performance used by the Board. A graph showing the total NAV return against the MSCI AC Asia Pac. (ex Japan) Index is shown in the published Annual Report.
Performance against MSCI AC Asia Pac. (ex Japan) Index	The Board measures Share Price and NAV performance against the MSCI AC Asia Pac. (ex Japan) Index on a total return basis. Graphs showing performance are shown in the published Annual Report.  The Board also monitors performance relative to competitor investment companies over a range of time periods, taking into consideration the differing investment policies and objectives of those companies.
Discount/Premium to NAV	The discount/premium relative to the NAV per share represented by the share price is closely monitored by the Board. The objective is to avoid large fluctuations in the discount/premium relative to similar investment companies investing in the region by the use of share buy backs or the issuance of new shares, subject to market conditions.  A graph showing the share price premium/(discount) relative to the NAV is also shown in the published Annual Report.
Ongoing Charges Ratio	The Board monitors the Company's operating costs carefully. Ongoing charges for the year and previous year are disclosed in the published Annual Report.
Gearing	The Board ensures that gearing is kept within the Board's guidelines to the Manager.

Risk Management

There are a number of risks which, if realised, could have a material adverse effect on the Company and its financial condition, performance and prospects. The Board has undertaken a robust review of the principal risks and uncertainties facing the Company including those that would threaten its business model, future performance, solvency or liquidity.  Those principal risks are disclosed in the table below together with a description of the mitigating actions taken by the Board.  The principal risks associated with an investment in the Company's Shares are published monthly on the Company's factsheet or they can be found in the pre-investment disclosure document published by the Manager, both of which are available on the Company's website. The Board reviews the risks and uncertainties faced by the Company in the form of a risk matrix and heat map at its Audit Committee meetings and a summary of the principal risks are set out below.

Description	Mitigating Action
Investment strategy and objectives - the setting of an unattractive strategic proposition to the market and the failure to adapt to changes in investor demand may lead to the Company becoming unattractive to investors, a decreased demand for shares and a widening discount.	The Board keeps the investment objective and policy as well as the level of discount and/or premium at which the Company's Ordinary Shares trade under review. In particular there are periodic strategy discussions where the Board reviews the Investment Manager's investment processes, analyses the work of the Investment Manager's investor relations team and receives reports on the market from the Broker. In particular, the Board is updated at each Board meeting on the make up of and any movements in the shareholder register.  Details of the Company's discount control mechanism are disclosed in the published Annual Report.
Investment portfolio, investment management - investing outside of the investment restrictions and guidelines set by the Board could result in poor performance and an inability to meet the Company's objectives.	The Board sets, and monitors, its investment restrictions and guidelines, and receives regular reports which include performance reporting on the implementation of the investment policy, the investment process and application of the Board guidelines. The Investment Manager is represented at all Board meetings.
Financial obligations - the ability of the Company to meet its financial obligations, or increasing the level of gearing, could result in the Company becoming over-geared or unable to take advantage of potential opportunities and result in a loss of value to the Company's Ordinary Shares.	The Board sets a gearing limit and receives regular updates on the actual gearing levels the Company has reached from the Investment Manager together with the assets and liabilities of the Company and reviews these at each Board meeting.
Financial and regulatory - the financial risks associated with the portfolio could result in losses to the Company. In addition, failure to comply with relevant regulation (including Jersey Company Law, the Financial Services and Markets Act, the Alternative Investment Fund Managers Directive, Accounting Standards and the FCA's Listing Rules, Disclosure Guidance and Transparency Rules and Prospectus Rules) may have an impact on the Company.	The financial risks associated with the Company include market risk, liquidity risk and credit risk, all of which are mitigated in conjunction with the Investment Manager. Further details of the steps taken to mitigate the financial risks associated with the portfolio are set out in note 16 to the financial statements. The Board relies upon the Aberdeen Group to ensure the Company's compliance with applicable law and regulations and from time to time employs external advisers to advise on specific concerns.
Operational - the Company is dependent on third parties  for the provision of all systems and services (in particular, those of the Aberdeen Group) and any control failures and gaps in these systems and services could result in a loss or damage to the Company.	The Board monitors operational risk and as such receives internal controls and risk management reports from the Investment Manager at each Board meeting.  It also receives assurances from all its significant service providers, as well as back to back assurance from the Investment Manager at least annually. Further details of the internal controls which are in place are set out in the published Annual Report.
Income and dividend risk - there is a risk that the portfolio could fail to generate sufficient income to meet the level of the annual dividend, thereby drawing upon, rather than replenishing, its revenue and/or capital reserves.	The Board monitors this risk through the review of income forecasts, provided by the Investment Manager, at each Board meeting.

Promoting the Company

The Board recognises the importance of communicating the long-term attractions of the Company to prospective investors both for improving liquidity and enhancing the value and rating of the Company's Ordinary Shares.  The Board believes an effective way to achieve this is through subscription to and participation in the promotional programme run by the Aberdeen Group on behalf of a number of investment companies under its management. The Company also supports the Aberdeen Group's investor relations programme which involves regional roadshows and promotional and public relations campaigns. The purpose of these initiatives is both to communicate effectively with existing shareholders and to gain new shareholders with the aim of improving liquidity and enhancing the value and rating of the Company's Shares. The Company's financial contribution to the programmes is matched by the Aberdeen Group.  The Aberdeen Group Head of Brand reports quarterly to the Board giving analysis of the promotional activities as well as updates on the shareholder register and any changes in the make up of that register.

Board Diversity

The Board recognises the importance of having a range of skilled, experienced individuals with the right knowledge in order to allow the Board to fulfill its obligations.  When Board positions become available as a result of retirement or resignation, the Company ensures that a diverse group of candidates is considered.  At 31 December 2016, in respect of gender diversity specifically there were five male Directors and one female Director. The Company has no employees.

Environmental, Social and Human Rights Issues

The Company has no employees as management of the assets is delegated to Aberdeen Private Wealth Management Limited. There are therefore no disclosures to be made in respect of employees.

Global Greenhouse Gas Emissions

The Company has no greenhouse gas emissions to report from the operations of its business, nor does it have direct responsibility for any other emissions producing sources.

Due to the nature of the Company's business, being a Company that does not offer goods and services to customers, the Board considers that it is not within the scope of the UK's Modern Slavery Act 2015 because it has no turnover.  The Company is therefore not required to make a slavery and human trafficking statement.

Viability Statement

The Company does not have a formal fixed period strategic plan but the Board formally considers risks and strategy at least annually. The Board considers the Company, with no fixed life, to be a long term investment vehicle, but for the purposes of this viability statement has decided that a period of three years is an appropriate period over which to report. The Board considers that this period reflects a balance between looking out over a long term horizon and the inherent uncertainties of looking out further than three years.  In assessing the viability of the Company over the review period the Directors have focussed upon the following factors:

-   The principal risks detailed in the Strategic Report;

-   The ongoing relevance of the Company's investment objective in the current environment;

-   The demand for the Company's Shares evidenced by the historical level of premium and/or discount;

-   The level of income generated by the Company;

-   The liquidity of the Company's portfolio; and,

-   The flexibility of the Company's £30m and £10m loan facilities maturing in April 2017 and March 2018, including the related covenants and the Company successfully renegotiating loan terms over this time horizon.

Accordingly, taking into account the Company's current position, the fact that the Company's investments are mostly liquid and the potential impact of its principal risks and uncertainties, the Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due for a period of three years from the date of this Report. In making this assessment, the Board has considered that matters such as significant economic or stock market volatility, a substantial reduction in the liquidity of the portfolio, or changes in investor sentiment could have an impact on its assessment of the Company's prospects and viability in the future.

Future

Many of the non-performance related trends likely to affect the Company in the future are common across all closed ended investment companies, such as the attractiveness of investment companies as investment vehicles, the impact of regulatory changes (including MiFID II and Packaged Retail Investment and Insurance Products) and the recent changes to the pensions and savings market in the UK.  These factors need to be viewed alongside the outlook for the Company, both generally and specifically, in relation to the portfolio. The Board's view on the general outlook for the Company can be found in my Chairman's statement whilst the Investment Manager's views on the outlook for the portfolio are included in the Investment Manager's Review.

Peter Arthur

Chairman

29 March 2017

STRATEGIC REPORT - CHAIRMAN'S STATEMENT

Background and Overview

Following a difficult 2015, I am pleased to report that your Company made good progress last year.  Assets grew and the dividend was increased, both of which are long-term goals of the Fund.

The net asset value (NAV) per Ordinary Share rose by 29.9%, outpacing the 27.7% rise in the MSCI All Country Asia Pacific ex-Japan Index (total return basis). The share price rose by 28.4% on a total return basis to 194.3p, while the discount to NAV per Ordinary Share widened slightly, notwithstanding significant buy-back activity, from 6.8% to 8.3% over the period. Performance was aided by significant currency effects, as sterling fell sharply following the shock outcome of the UK referendum on European Union membership and as Asian currencies posted double-digit gains against the pound over the period under review.

Your Investment Manager's focus on quality companies with robust balance sheets and cash-generating ability contributed to the good performance. Having sound finances enables these companies to invest in future growth and reward their shareholders with steady dividend payouts. The IMF is forecasting global economic growth to increase in the coming year, led by the emerging markets and your Company's underlying holdings are well positioned to benefit from this expected growth.

In 2016, Asian equities overcame market turbulence to deliver solid gains, aided by sterling's weakness. Political shocks in the West roiled markets. First, Britain's June referendum vote to leave the EU caught markets off-guard. Sterling and continental stocks were the worst hit. Then, in November, Donald Trump unexpectedly won the US presidential election. While US equities and the dollar rose on hopes that fiscal spending under President Trump would result in stronger US growth and higher inflation, Asian markets fretted over how his protectionist leanings could affect the trade-dependent region. The uncertainty was exacerbated by a more hawkish US Federal Reserve.

China also proved pivotal in influencing sentiment, which was most evident in early 2016, when a falling yuan and capital outflows sent global markets tumbling. Beijing was later forced to intervene in the currency market and impose soft capital controls. To support growth, the state fell back on fiscal stimulus. It also curbed shadow banking, tightened regulations and cooled the property market.

China's growth support revived commodities, with the prices of oil, coal and iron ore all rebounding strongly. Commodity exporting countries such as Australia and Indonesia were among the best-performing markets and your Company's resources holdings performed well. The commodity recovery raised inflation expectations, while the global outlook appeared rosier with improvements across major economies, including China and the US. Both Europe and Japan resorted to unconventional monetary policy to stimulate growth.

Against this backdrop, your Company's light positions in China and India were positive for performance. The Chinese market was a relative laggard, while the Indian market was hurt by a sudden demonetisation policy, despite substantial reform progress and a smooth leadership change at the central bank. Also benefiting performance was the heavy exposure to Southeast Asia, as several holdings in Indonesia and Singapore performed well in both absolute and relative terms. The Thai market was boosted by foreign inflows, generous stimuli and a smooth royal transition. A disappointment was Malaysia, given alleged impropriety at state investment company 1MDB. The underweight to Taiwan detracted, as the market was buoyed by a re-rating of the technology sector.

Dividends

Four quarterly dividends were declared over 2016. The first three were paid at the rate of 2.0p totalling 6.0p which, when added to the fourth dividend of 2.75p, represented an overall increase of 2.9% for the year to stand at 8.75p. After deducting the payment of the fourth interim dividend, approximately £0.85 million has been transferred to the Company's revenue reserves during the period.  These reserves now amount to £9.3 million, which represents approximately 5.0p per share. In the absence of unforeseen circumstances, it is your Board's intention to declare four quarterly dividends during the current year totalling at least 8.75p per share. 

Your Company's portfolio remains fundamentally robust and well positioned. Across the underlying holdings, company managements have been level headed, keeping a tight rein on costs to safeguard margins. At a time of still-fragile demand, they have also been prudent with capital expenditure to conserve cash. Rio Tinto, for example, continues to improve its asset base, as it offloads non-core businesses such as coal, to strengthen its balance sheet and maintain its dividend pay-out. Consensus estimates signal an earnings recovery for Asia in 2017, led by the more cyclical sectors, with improvements in net income margins. Alongside this, lower capital spending is helping to boost cash flow, providing room for dividend growth.

Share Capital Management and Gearing

During the year the Company bought back 6,158,000 shares for treasury at a discount to the underlying exclusive of income NAV.  Subsequent to the year end we have continued to buy back shares and a total of 1,045,000 further shares have been acquired.  The Company will continue to selectively buy back shares in the market, at the discretion of the Board, when the discount exceeds 5% of the NAV (ex income) over the longer term.  At the time of writing the Ordinary Shares are trading at a discount of 8.5% to the prevailing NAV.

The Company's £30 million multicurrency revolving facility with Scotiabank is due to mature in April 2017 and the Board is in the process of reviewing gearing options for the Company with the aim of agreeing a replacement £40 million three year facility. In addition there is a £10 million fixed facility which expires in March 2018.  The Company's total gearing at the period end amounted to the equivalent of £38.0 million representing net gearing of 8.2% (2015 8.9%).

Directorate

Duncan Baxter retired from the Board following the conclusion of the Annual General Meeting ("AGM") in May 2016 and we welcomed Mr Ian Cadby as a new Director. Ian is based in Jersey, with over 27 years' experience within the hedge fund and derivatives trading industry spanning a number of jurisdictions including Asia, USA, UK and Jersey.  He has extensive experience in board strategy, corporate governance and risk management.

As part of the Board's on-going succession planning, Andrey Berzins has indicated that he intends to retire from the Board at the AGM to be held in May 2017 and will not be seeking re-election.  On behalf of the Board I would like to take this opportunity to thank Andrey for his very significant contribution to the Company since its launch in 2005 as Audit Committee Chairman until 2015 and then subsequently as Senior Independent Director.  I am pleased to report that Charles Clarke has agreed to become Senior Independent Director following the AGM.  In the latter part of the year the Nomination Committee initiated an externally facilitated search for a new Director and I am pleased to advise that Mark Florance, a Singapore resident, has accepted an invitation to join the Board as an independent non executive Director with effect from the conclusion of the AGM on 10 May 2017.  Mark has over 30 years' experience in corporate finance, equity capital markets, and debt restructuring in Asia across most industry sectors, particularly energy, telecoms, resources, banking, media and property. Mark will bring a wealth of Asian experience and knowledge to the Board. Having overseen the refreshment of the independent Board Directors that had been originally appointed at the launch of the Company in 2005, I intend to retire from the Board at the conclusion of the AGM to be held in 2018.

AGM

Your Company's AGM will be held at 10.30 a.m. on 10 May 2017 at the Company's registered office, 1st Floor, Sir Walter Raleigh House, 48 - 50 Esplanade, St Helier, Jersey JE2 3QB and your Board welcomes shareholders attendance .  If you are unable to attend the AGM, I would encourage you to vote by returning your proxy (or letter of directions if you invest via the Aberdeen Savings Plans) which is enclosed with the Annual Report and financial statements.

Aberdeen

The Board notes the announcement of the proposed recommended merger between Aberdeen and Standard Life. This is subject to shareholder and regulatory approvals, but both companies have committed to set up a highly experienced and dedicated integration team, to ensure that our existing management team will remain focussed on looking after the interests of the Company and its shareholders.  The Board will ensure that this remains the case and that excellent client service is maintained.

Outlook

Equity markets have risen on optimism that the US economy would accelerate under President Trump's pro-growth agenda. As US consumers spend more, this may translate into higher demand for goods and services from the rest of the world, including Asia. For your Company's underlying holdings, improvements in revenues could significantly boost earnings, given that they have worked hard to streamline costs and held back on capital expenditure during the recent lean years of weak external demand. Their balance sheets have benefited from strong capital management. A pick up in topline revenues would feed through to earnings and cash generation, enabling these companies to raise payouts and re-invest in future growth.

Your Board remains confident of your Investment Manager's stock-picking ability and the region's strong longer-term prospects. Asia has healthier finances at the personal and corporate levels, compared to most of the developed world, while governments are working to fix structural impediments to domestic-driven growth. The region also has a large and growing consumer base with a growing middle class that will be supportive of long term future demand.

I look forward to reporting to you again with the Half Yearly Report to 30 June 2017, which will be issued to shareholders around the end of August. Those shareholders who wish to keep up to date with the Company's developments between formal reports may wish to view the monthly factsheet and other useful information at asian-income.co.uk.

Peter Arthur

Chairman

29 March 2017

STRATEGIC REPORT - INVESTMENT MANAGER'S REVIEW

Overview

Asian equities rebounded in 2016 despite a difficult start. Fears over the Chinese economy that had dampened sentiment in the prior year faded and corporate fundamentals appeared to improve. Commodity prices stabilised, providing a fillip to cyclical sectors such as energy, materials and technology. Major central banks continued to pursue loose monetary policy.

The review period, nevertheless, will be remembered for two major jolts: the Brexit vote in June and Donald Trump's election victory in November. Understandably, risk appetite waned ahead of these unforeseen political outcomes. However, in the aftermath of the UK referendum, Asian bonds and equities rallied on expectations that central banks would do everything necessary to support financial markets. Record-low yields in developed-market government bonds also drove investors towards better returns found in emerging markets. It was a different scenario after President Trump's win. The prospect of expansionary fiscal policy from the new administration fuelled a reflation rally in US stocks and the dollar but his protectionist rhetoric led to a sell-off in bonds, equities and currencies in trade-reliant Asia.

Towards the year-end, markets struggled to regain momentum. The Federal Reserve doubled down on its December rate increase with a more hawkish outlook for 2017. China fears resurfaced. The weak yuan and accelerating outflows prompted authorities to intensify capital controls. Beijing's attempts to tighten liquidity to encourage deleveraging also weighed on sentiment.

Performance Review

During the review period, Asian stock markets posted double-digit returns that more than compensated for the previous year. Significant sterling weakness helped amplify gains. Overall, Asian equities outperformed their European peers but lagged the US. Against this backdrop, the Company's NAV rose by 29.9% on a total-return basis in sterling terms and the share price rose by 28.4%, compared to the MSCI AC Asia Pacific ex Japan Index's gain of 27.7%.

The portfolio's outperformance over the year was driven in large part by the underweight to China, which lagged the broader region. Concerns surrounding yuan weakness and stricter capital controls resurfaced in the wake of the strengthening US dollar. This weighed on financial stocks, and not holding China Life Insurance and Ping An Insurance proved beneficial. The lack of exposure to India also aided relative performance. Early optimism over the approval of the GST bill and ratification of the bankruptcy law was overshadowed by the demonetisation policy implemented in November despite it being a longer-term positive for the economy. The portfolio's lack of exposure reflects our view that most Indian companies can generate attractive returns by investing to meet growing domestic demand, which they prioritise over paying out dividends. Elsewhere, the overweight to Thailand was positive as the market was one of the best-performing, buoyed by stimulus measures and a smooth royal transition. Our Thai holdings, such as Electricity Generating, Tesco Lotus Retail Growth and Hana Microelectronics, rallied in tandem.

Also boosting relative return was the good performance of our Singapore holdings. Technology services and solutions provider Venture Corp's results continued to exceed expectations on the back of tighter cost controls and solid revenues in high value-added segments such as test and measurement, medical and life sciences. Jardine Cycle & Carriage continued to benefit from its Indonesian subsidiary Astra International, which reported a recovery in automobile sales and rallied in line with the Jakarta stock market. Meanwhile, sentiment towards the Singapore banks, United Overseas Bank, DBS Group and Oversea-Chinese Banking Corp, gradually improved. Concerns over their lending to the energy sector and exposure to China receded as the oil price rebounded and the mainland appeared to stabilise. Further impetus was provided by expectations that profits will be bolstered by higher interest rates following President Trump's win. Although Singapore was a regional laggard over the year, our stance remains that the market offers high-quality companies at good value, and many have diversified their earnings across the higher growth economies within the region.

The rebound in commodity prices benefited several of our holdings, one of them being Indonesian coal producer Indo Tambangraya Megah. Similarly, diversified miners Rio Tinto and South32 saw their share prices rise alongside the sector rebound. All three remain low-cost producers in their respective segments, with good cash flows. Cost-cutting discipline and non-core disposals enabled Rio Tinto to raise its dividend for 2016, while South32 paid its inaugural dividend and linked its future payout policy to earnings growth. Another holding that contributed to relative return was Viva Energy REIT, which operates 425 Shell and Coles Express petrol stations across Australia. Its unique portfolio imbues it with good cash generation that will enhance its ability to pay dividends over time. We built up our exposure to the stock after repurchasing it at a more compelling valuation compared to its August IPO.

Conversely, relative performance was pared by the portfolio's underweight to Taiwan, which was one of the best-performing markets, led by the tech rally. Our view is that the market continues to offer a relatively narrow selection of companies, with the bulk of them in lower-quality cyclical industries lacking market leadership. The exposure to Malaysia also detracted as the local market was pressured by the ongoing 1MDB controversy. At the stock level, BAT Malaysia was a key detractor as its share price was dampened by the fall in cigarette sales, exacerbated by the excise duty hike in November, and loss of market share in the premium segment. Nevertheless, the company offers an attractive yield of around 7%. Earnings have stayed resilient through economic cycles and this has supported dividends.

In Hong Kong, Texwinca faced a difficult global operating environment, with demand weakening in the US, its largest market. However, the textile manufacturer remains committed to dividend payouts, supported by robust cash flows. Swire Pacific underperformed as earnings were hampered by its aviation unit, which is undergoing a major restructuring in response to challenges within the airline industry. Nonetheless, Swire has other businesses, notably its property unit, where we continue to find value. Elsewhere, Thai media company BEC World's share price fell on the back of lower advertising revenues, which were aggravated by the nationwide mourning that followed King Bhumibol's passing. Marketing spending is likely to stay subdued in the near term but the stock retains its attractive yield.

Another detractor was Korea's Samsung Electronics. The underweight position versus the index hurt performance as the share price rallied after the company announced the biggest share buyback in its history, while continuing to grow its dividends. Despite the recall and discontinuation of its Galaxy Note 7 smartphone, the company still posted better-than-expected earnings. We introduced Samsung Electronics to the portfolio over the review period, on the back of its commitment to link shareholder returns to free cash flow generation. The company has made great strides in this regard and we have been encouraged by its improving investor communication that forms the bedrock of its shareholder friendly policies. We believe the company is well placed to weather negative headlines, given its net cash balance sheet, diversified revenue streams and market leadership in precision manufacturing, which help it manage various business cycles.

Portfolio Activity

Besides Samsung Electronics and Viva Energy REIT mentioned above, we introduced several other holdings over the year. One of the initiations was Yum China, which was spun off from Yum Brands. A pure-play Chinese consumer discretionary company, Yum China is one of the largest restaurant chain operators on the mainland. It runs over 7,000 KFC, Pizza Hut, East Dawning and Little Sheep outlets, dwarfing its rivals, and yet still has room for growth, given the low penetration of fast-food chains in China. The company inherited a net cash balance sheet through the spin-off. Coupled with its cash-generative business, this should be supportive of future expansion plans as well as shareholder returns.

Against this, we exited a number of holdings as we grew more circumspect about their ability to pay dividends. One of these was BHP Billiton as we were concerned earlier in 2016 that it would change its progressive dividend policy. The miner eventually slashed its dividend after profits weakened. We also sold Li & Fung and Canon, given their deteriorating business prospects, which we felt would eventually hurt shareholder returns. After much consideration, we also exited QBE Insurance. We had given management time to fix problems in its core Australian business and revive the North American unit but we were disappointed by the pace of progress. Adding to its woes were dimmer prospects at its European business following the Brexit vote.

Outlook

President Trump's pledge to reboot the US economy bodes well for Asian exporters over the long term, as does rising intra-regional trade. Prospects look brighter for companies that have acted prudently during the difficult operating environment of the previous years. The portfolio's underlying holdings have streamlined operations, cut costs and controlled spending, preparing themselves for a recovery in domestic demand growth. A potential recovery in sales and earnings, coupled with healthy balance sheets and good cash flow generation, will continue to be supportive of dividend growth in the region. With valuations in Asia at a significant discount relative to Western markets, any volatility could present opportunities to add to our favoured positions.

Aberdeen Asset Management Asia Limited

29 March 2017

STRATEGIC REPORT - RESULTS

FINANCIAL HIGHLIGHTS

	31 December 2016	31 December 2015	% change
Total assets	£434,002,000	£369,285,000	+17.5
Total equity shareholders' funds (net assets)	£396,028,000	£329,432,000	+20.2
Market capitalisation	£363,186,000	£307,071,000
Share price per Ordinary share (mid market)	194.25p	159.00p	+22.2
Net asset value per Ordinary share	211.82p	170.58p	+24.2
Discount to net asset value per Ordinary share	(8.3%)	(6.8%)
MSCI AC Asia Pacific ex Japan Index (currency adjusted, capital gains basis)	646.06	522.13	+23.7
Net gearing{A}	8.2%	8.9%
Dividend and earnings
Total return per Ordinary share{B}	49.12p	(18.86p)
Revenue return per Ordinary share{B}	9.15p	9.11p	+0.4
Dividends per Ordinary share{C}	8.75p	8.50p	+2.9
Dividend cover per Ordinary share	1.05	1.07
Revenue reserves{D}	£9.35m	£8.49m
Ongoing charges{E}
Ongoing charges ratio	1.19%	1.25%
{A}         Calculated in accordance with AIC guidance "Gearing Disclosures post RDR"
{B}         Measures the relevant earnings for the year divided by the weighted average number of Ordinary shares in issue (see Statement of Comprehensive Income).
{C}         The figure for dividends reflects the years in which they were earned (see note 8 to the financial statements).
{D}         The revenue reserves figure takes account of the fourth interim dividend amounting to £5,136,000 (2015 - fourth interim amounting to £4,812,000).
{E}         Ongoing charges have been calculated in accordance with guidance issued by the AIC as the total of investment management fees and administrative expenses divided by the average cum income net asset value throughout the year.

PERFORMANCE (TOTAL RETURN)

	1 year	3 year	5 year	Since launch{A}
	% return	% return	% return	% return
Share price (Ordinary)	+28.4	+14.0	+42.0	+194.6
Net asset value	+29.9	+26.0	+57.8	+226.4
MSCI AC Asia Pacific ex Japan Index (currency adjusted)	+27.7	+34.5	+60.4	+179.4
Total return represents the capital return plus dividends reinvested. Data to support the returns can be found in the published Annual Report.
{A} Launch being 20 December 2005.

DIVIDENDS PER ORDINARY SHARE

	Rate	xd date	Record date	Payment date
First interim 2016	2.00p	21 April 2016	22 April 2016	23 May 2016
Second interim 2016	2.00p	21 July 2016	22 July 2016	19 August 2016
Third interim 2016	2.00p	20 October 2016	21 October 2016	17 November 2016
Fourth interim 2016	2.75p	19 January 2017	20 January 2017	20 February 2017
	______
2016	8.75p
	______
First interim 2015	2.00p	30 April 2015	1 May 2015	22 May 2015
Second interim 2015	2.00p	16 July 2015	17 July 2015	21 August 2015
Third interim 2015	2.00p	22 October 2015	23 October 2015	17 November 2015
Fourth interim 2015	2.50p	21 January 2016	22 January 2016	18 February 2016
	______
2015	8.50p
	______

DIRECTORS' REPORT

Introduction

The Directors present their Report and the audited financial statements for the year ended 31 December 2016.

Results and Dividends

Details of the Company's results and dividends are shown in the Strategic Report and in note 8 to the Financial Statements. Interim dividends were paid on a quarterly basis in May, August and November 2016 and February 2017. As at 31 December 2016 the Company's revenue reserves (adjusted for the payment of the fourth interim dividend) amounted to £9.3 million (approximately 5.0p per Ordinary Share).

Status

The Company is registered with limited liability in Jersey as a closed-end investment company under the Companies (Jersey) Law 1991 with registered number 91671.  In addition, the Company constitutes and is regulated as a collective investment fund under the Collective Investment Funds (Jersey) Law 1988 and is an Alternative Investment Fund (within the meaning of Regulation 3 of the Alternative Investment Fund Regulations).  The Company has no employees and makes no political donations. The Ordinary Shares are admitted to the Official List in the premium segment and are traded on the London Stock Exchange's Main Market.

The Company is a member of the Association of Investment Companies ("AIC").

Individual Savings Accounts

The Company has conducted its affairs so as to satisfy the requirements as a qualifying security for Individual Savings Accounts. The Directors intend that the Company will continue to conduct its affairs in this manner.

Capital Structure, Issuance and Buybacks

The Company's capital structure is summarised in note 13 to the financial statements.  At 31 December 2016, there were 186,968,389 fully paid Ordinary shares of no par value (2015 - 193,126,389 Ordinary shares) in issue.  At the year end there were 7,965,000 Ordinary shares held in treasury (2015 - 1,807,000).

During the year 6,158,000 Ordinary shares were purchased in the market for treasury and no Ordinary shares were issued or sold from treasury.

Subsequent to the period end 1,045,000 Ordinary Shares have been purchased in the market at a discount for treasury.

Voting Rights

Each Ordinary share holds one voting right and shareholders are entitled to vote on all resolutions which are proposed at general meetings of the Company. The Ordinary Shares, excluding treasury shares, carry a right to receive dividends. On a winding up or other return of capital, after meeting the liabilities of the Company, the surplus assets will be paid to Ordinary shareholders in proportion to their shareholdings. There are no restrictions on the transfer of Ordinary Shares in the Company other than certain restrictions which may be applied from time to time by law.

Borrowings

The Company has a fully drawn three year £10,000,000 term facility (the "Facility") with Scotiabank Europe PLC ("Scotia") together with a £30,000,000 multicurrency revolving facility with Scotiabank (Ireland) Limited.  The revolving facility is due to mature in April 2017. The Company's total gearing at the year end amounted to the equivalent of £38.0 million representing net gearing of 8.2%.

Management Arrangements

Under the terms of a revised Management Agreement dated 21 March 2017, management services are provided by Aberdeen Private Wealth Management Limited. Further details of which are shown in notes 5 and 6 to the financial statements.  During the period the management fee was amended and with effect from 1 June 2016 the Manager has been entitled to a management fee payable quarterly in arrears based on an annual amount of 0.85% (previously 1.0%) of the rolling monthly average NAV of the Company over the previous six months.   Also from that date the annual RPI uplift applicable on the company secretarial and administration fee was discontinued. Termination of the Management Agreement remains subject to six months' notice.

The Directors review the terms of the Management Agreement on a regular basis and have confirmed that, due to the investment skills, experience and commitment of the Investment Manager, in their opinion the continuing appointment of Aberdeen Private Wealth Management Limited with the delegation arrangements to the Investment Manager, on the terms agreed, is in the interests of shareholders as a whole.

Risk Management

Details of the financial risk management policies and objectives relative to the use of financial instruments by the Company are set out in note 16 to the financial statements.

Substantial Interests

The Board has been advised that the following shareholders owned 3% or more of the issued Ordinary share capital of the Company at 31 December 2016:

Shareholder	No. of Ordinary Shares held	% held
Speirs & Jeffrey	14,130,068	7.6
Investec Wealth & Investment	11,113,549	5.9
Brewin Dolphin	10,435,603	5.6
Charles Stanley	10,065,094	5.4
Quilter Cheviot Investment Management	8,951,471	4.8
Hargeaves Lansdown A	8,639,081	4.6
Rathbones	7,568,275	4.1
Aberdeen Retail Plans A	6,935,155	3.7
Alliance Trust Savings A	6,817,107	3.6
Adam & Co Investment Management	5,664,033	3.0

^A Non-beneficial interests

There have been no changes notified in respect of the above holdings in the period from 31 December 2016 to 29 March 2017.

Directors

The Board currently consists of six non-executive Directors.  Messrs Peter Arthur, Andrey Berzins, Charles Clarke, Hugh Young and Ms Krystyna Nowak all held office throughout the year and together with Ian Cadby (appointed 11 May 2016) and, Duncan Baxter (retired 11 May 2016), were the only Directors in office during the year.

The names and biographies of each of the six current Directors are disclosed above with their range of experience as well as length of service detailed in the published Annual Report. Mr Arthur and Mr Young have each served on the Board for more than nine years and, in accordance with corporate governance best practice, will retire at the Annual General Meeting on 10 May 2017 ("AGM") and, being eligible, offer themselves for re-election.  Mr Cadby was appointed to the Board during the year and in accordance with the Articles of Association will retire at the first AGM following his appointment and submit himself for election.  Mr Berzins has indicated that he will retire from the Board at the conclusion of the AGM and does not intend to seek re-election. The Directors have undertaken an externally facilitated search for a new independent non executive Director and Mr Mark Florance will be appointed to the Board with effect from the conclusion of the AGM.  Further details relating to Mr Florance are disclosed in the Chairman's Statement.

Mr Clarke has agreed to become Senior Independent Director with effect from the retirement of Mr Berzins. The Board considers that there is a balance of skills and experience within the Board relevant to the leadership and direction of the Company and that all the Directors contribute effectively.  The Board has no hesitation in recommending the re-election of Mr Arthur and Mr Young and the election of Mr Cadby at the AGM.

In common with most investment companies, the Company has no employees. Directors' & Officers' liability insurance cover has been maintained throughout the year at the expense of the Company. 

Policy on Tenure

Directors are not currently required to serve on the Board for a limited period of time only. The Board does not consider that the length of service of a Director is as important as the contribution he or she has to make, and therefore the length of service will be determined on a case-by-case basis. In accordance with corporate governance best practice, Directors who have served for more than nine years or who are non-independent voluntarily offer themselves for re-election on an annual basis.  Having overseen the refreshment of the independent Board of Directors that had been originally appointed at the launch of the Company in 2005, Mr Arthur has indicated that he intends to retire from the Board at the conclusion of the AGM to be held in 2018.

Corporate Governance

The Company is committed to high standards of corporate governance. The Board is accountable to the Company's shareholders for good governance and, as required by the Listing Rules of the UK Listing Authority, has applied the principles identified in the UK Corporate Governance Code (published in September 2014) (the "UK Code") for the year ended 31 December 2016. The UK Code is available on the Financial Reporting Council's website: frc.org.uk.

The Board has considered the principles and recommendations of the AIC Code of Corporate Governance for Jersey-domiciled member companies as published in February 2015 (AIC Code) by reference to the AIC Corporate Governance Guide for Investment Companies (AIC Guide). The AIC Code, as explained by the AIC Guide, addresses all the principles set out in the UK Corporate Governance Code, as well as setting out additional principles and recommendations on issues which are of specific relevance to the Company. Both the AIC Code and the AIC Guide are available on the AIC's website: theaic.co.uk.

The Company has complied throughout the accounting period with the relevant provisions contained within the AIC Code and the relevant provisions of the UK Code except as set out below.

The UK Code includes provisions relating to:

-   the role of the chief executive (A.2.1);

-   executive directors' remuneration (D.1.1 and D.1.2); and,

-   and the need for an internal audit function (C.3.6).

For the reasons set out in the AIC Code, and as explained in the UK Code, the Board considers that these provisions are not relevant to the position of the Company, being an externally-managed investment company. In particular, all of the Company's day-to-day management and administrative functions are outsourced to third parties. As a result, the Company has no executive directors, employees or internal operations. The Company has therefore not reported further in respect of these provisions. The full text of the Company's Corporate Governance Statement can be found on the Company's website, asian-income.co.uk.

Directors have attended Board and Committee meetings during the year ended 31 December 2016 as follows (with their eligibility to attend the relevant meeting in brackets):

	Board	Ad Hoc Board and Committee	Audit	MEC and Nom
Total Meetings	4	7	2	3
P Arthur A	4 (4)	3 (7)	n/a	3 (3)
A Berzins	4 (4)	5 (7)	2 (2)	3 (3)
I. Cadby B	2 (2)	2 (3)	1 (1)	1 (1)
C Clarke	4 (4)	6 (7)	2 (2)	3 (3)
K Nowak	4 (4)	6 (7)	2 (2)	3 (3)
H Young C	4 (4)	4 (7)	n/a	2 (2)
D Baxter D	2 (2)	3 (4)	1 (1)	2 (2)

^A Mr Arthur is not a member of the Audit Committee

^B Mr Cadby was appointed to the Board on 11 May 2016

^C Mr Young is not a member of the Audit or Management Engagement Committees

^D Mr Baxter retired from the Board on 11 May 2016

The Board has a schedule of matters reserved to it for decision and the requirement for Board approval on these matters is communicated directly to the senior staff of the Investment Manager. Such matters include strategy, gearing, treasury and dividend policy. Full and timely information is provided to the Board to enable the Directors to function effectively and to discharge their responsibilities. The Board also reviews the financial statements, performance and revenue budgets.

Board Committees

The Directors have appointed a number of Committees as set out below. Copies of their terms of reference, which clearly define the responsibilities and duties of each Committee, are on the Company's website. The terms of reference of each of the Committees are reviewed and re-assessed by the Board for their adequacy on an ongoing basis.

Audit Committee

The Audit Committee Report is contained in the published Annual Report.

Management Engagement Committee

The Management Engagement Committee comprises all of the Directors except Mr Young. Mr Arthur is the Chairman. The Committee reviews the performance of the Investment Manager and its compliance with the terms of the management and secretarial agreement. The terms and conditions of the Investment Manager's appointment, including an evaluation of fees, are reviewed by the Committee on an annual basis. The Committee believes that the continuing appointment of the Manager on the terms agreed is in the interests of shareholders as a whole.

Nomination Committee

All appointments to the Board of Directors are considered by the Nomination Committee which comprises the entire Board and is chaired by Mr Arthur. Possible new Directors are identified against the requirements of the Company's business and the need to have a balanced Board.  Every Director is entitled to receive appropriate training as deemed necessary. A Director appointed during the year is required, under the provisions of the Company's Articles of Association, to retire and seek election by shareholders at the next Annual General Meeting. The Articles of Association require that one third of the Directors retire by rotation at each Annual General Meeting.  The Board's policy is that Directors who have served more than nine years will submit themselves for annual re-election on a voluntary basis.

During the year the Nomination Committee undertook a search for a new Director.  The Committee decided to use its own expertise to create a long list of potential candidates by identifying a specification for the new Director, including the requisite skills and experience that would complement the existing Directors and having due regard for the benefits of diversity on the Board. Having reviewed the individuals and interviewed a short list of possible candidates, half of whom were female, Mr Ian Cadby was appointed to the Board on 11 May 2016. 

At the end of the year the Committee initiated a further search for a new Director, ahead of the planned retirement of Mr Berzins at the AGM in May 2017. The Committee used the services of Fletcher Jones, an independent specialist recruitment consultant and, having reviewed a diverse long list and interviewed a short list of possible candidates Mr Mark Florance will be appointed to the Board with effect from the close of business at the AGM on 10 May 2017.

The Company has put in place the necessary procedures to conduct, on an annual basis, an appraisal of the Chairman of the Board, Directors' individual self evaluation and a performance evaluation of the Board as a whole.  The appraisal process concluded that the Board continues to have a good balance of experience and considerable knowledge of Asian markets and works in a collegiate, efficient and effective manner under the leadership of an experienced and well regarded Chairman.  The Board also reviewed the Chairman's and Directors' other commitments and is satisfied that the Chairman and other Directors are capable of devoting sufficient time to the Company.  Accordingly, the Board has no hesitation in recommending to Shareholders the reappointment of Mr Arthur and Mr Young who are each due to retire at the forthcoming AGM and submit themselves for re-election and the election of Mr Cadby who was appointed during the year.

Remuneration Committee

As the Company only has non-executive Directors the Board has not established a separate Remuneration Committee and Directors' remuneration is determined by the Board as a whole.

The Company's policy on Directors' remuneration, together with details of the remuneration of each Director, is set out in the Directors' Remuneration Report in the published Annual Report.

Management of Conflicts of Interests

The Board has a procedure in place to deal with a situation where a Director has a conflict of interest. As part of this process, the Directors are required to disclose other positions held and all other conflict situations that may need to be authorised either in relation to the Director concerned or his or her connected persons. The Board considers each Director's situation and decides whether to approve any conflict, taking into consideration what is in the best interests of the Company and whether the Director's ability to act in accordance with his or her wider duties is affected. Each Director is required to notify the Company Secretary of any potential or actual conflict situations that will need authorising by the Board. Authorisations given by the Board are reviewed at each Board meeting.

No Director has a service contract with the Company although Directors are issued with letters of appointment upon appointment. The Directors' interests in contractual arrangements with the Company are as shown in note 18 to the financial statements. No other Directors had any interest in contracts with the Company during the period or subsequently.

The Company has a policy of conducting its business in an honest and ethical manner. The Company takes a zero tolerance approach to bribery and corruption and has procedures in place that are proportionate to the Company's circumstances to prevent them. The Aberdeen Group also adopts a group-wide zero tolerance approach and has its own detailed policy and procedures in place to prevent bribery and corruption. Copies of the Aberdeen Group's anti-bribery and corruption policies are available on its website aberdeen-asset.com.

Going Concern

The Directors have undertaken a robust review of the Company's viability (refer to statement in Strategic Report) and ability to continue as a going concern.  The Company's assets consist primarily of a diverse portfolio of listed equity shares which in most circumstances are realisable within a very short timescale.

The Company has a £30 million loan facility with Scotia Bank which is due to mature in April 2017.  The Directors are currently reviewing options to replace the facility. However, at this stage it is too early to confirm that the facility will be renewed. If acceptable terms are available from the existing bankers, or any alternative, the Company expects to continue to access a facility of at least £30 million. However, should the Board decide not to replace the facility any maturing debt would be repaid through the proceeds of equity and/or bond sales.

The Directors are mindful of the principal risks and uncertainties disclosed in the Strategic Report and have reviewed forecasts detailing revenue and liabilities and the Directors believe that the Company has adequate financial resources to continue its operational existence for the foreseeable future and at least 12 months from the date of this Annual Report. Accordingly, the Directors continue to adopt the going concern basis in preparing these financial statements.

Accountability and Audit

Each Director confirms that, so far as he or she is aware, there is no relevant audit information of which the Company's Auditor is unaware, and he or she has taken all the steps that they ought to have taken as a Director in order to make themselves aware of any relevant audit information and to establish that the Company's Auditor is aware of that information.

Independent Auditor

The Company's independent Auditor, EY, has expressed its willingness to continue in office and a Resolution to re-appoint EY as the Company's Auditor and to authorise the Directors to fix the Auditor's remuneration will be put to shareholders at the AGM.

Internal Controls and Risk Management

The Board of Directors is ultimately responsible for the Company's system of internal control and for reviewing its effectiveness. Following the Financial Reporting Council's publication of "Guidance on Risk Management, Internal Controls and Related Financial and Business Reporting" (the "FRC Guidance"), the Directors confirm that there is an ongoing process for identifying, evaluating and managing the significant risks faced by the Company. This process has been in place for the full year under review and up to the date of approval of the financial statements, and this process is regularly reviewed by the Board and accords with the FRC Guidance.

The design, implementation and maintenance of controls and procedures to safeguard the assets of the Company and to manage its affairs properly extends to operational and compliance controls and risk management. The Board has prepared its own risk register which identifies potential risks relating to strategy, investment management, shareholders, marketing, gearing, regulatory and financial obligations, third party service providers and the Board.  The Board considers the potential cause and possible impact of these risks as well as reviewing the controls in place to mitigate these potential risks. A risk is rated by having a likelihood and an impact rating and the residual risk is plotted on a "heat map" and is reviewed regularly.

The Board has reviewed the effectiveness of the system of internal control and, in particular, it has reviewed the process for identifying and evaluating the significant risks faced by the Company and the policies and procedures by which these risks are managed.

The Directors have delegated the investment management of the Company's assets to the Manager which has, in turn, delegated the responsibility to the Investment Manager within overall guidelines. This embraces implementation of the system of internal control, including financial, operational and compliance controls and risk management. Internal control systems are monitored and supported by the Aberdeen Group's internal audit function which undertakes periodic examination of business processes, including compliance with the terms of the management agreement, and ensures that recommendations to improve controls are implemented.

Risks are identified and documented through a risk management framework by each function within the Manager's activities. Risk is considered in the context of the FRC Guidance and includes financial, regulatory, market, operational and reputational risk. This helps the internal audit risk assessment model identify those functions for review. Any relevant weaknesses identified are reported to the Board and timetables are agreed for implementing improvements to systems. The implementation of any remedial action required is monitored and feedback provided to the Board.

The key components designed to provide effective internal control for the year under review and up to the date of this Report are outlined below:

-         the Investment Manager prepares forecasts and management accounts which allow the Board to assess the Company's activities and review its investment performance;

-         the Board and Investment Manager have agreed clearly defined investment criteria;

-         there are specified levels of authority and exposure limits. Reports on these issues, including performance statistics and investment valuations, are regularly submitted to the Board. The Investment Manager's investment process and financial analysis of the companies concerned include detailed appraisal and due diligence;

-         as a matter of course the compliance department of APWML continually reviews the Investment Manager's operations;

-         written agreements are in place which specifically define the roles and responsibilities of the Manager and other third-party service providers and the Committee reviews, where relevant, ISAE3402 Reports, a global assurance standard for reporting on internal controls for service organisations; The Board has reviewed the exceptions arising from the Manager's ISAE3402 for the year to 30 June 2016, none of which were judged to be of direct relevance to the Company;

-         the Board has considered the need for an internal audit function but, because of the compliance and internal control systems in place at the Investment Manager, has decided to place reliance on the Investment Manager's systems and internal audit procedures; and

-         twice a year, at its Board meetings, the Board carries out an assessment of internal controls by considering documentation from the Investment Manager, including its internal audit and compliance functions and taking account of events since the relevant period end.

In addition, the Investment Manager ensures that clearly documented contractual arrangements exist in respect of any activities that have been delegated to external professional organisations.  The Board meets periodically with representatives from BNP Paribas and receives control reports covering the activities of the custodian. 

Representatives from the Internal Audit department of the Investment Manager report six monthly to the Audit Committee of the Company and has direct access to the Directors at any time.

The internal control systems are designed to meet the Company's particular needs and the risks to which it is exposed. Accordingly, the internal control systems are designed to manage rather than eliminate the risk of failure to achieve business objectives and, by their nature, can provide reasonable but not absolute assurance against material misstatement or loss.

The UK Stewardship Code and Proxy Voting

Responsibility for actively monitoring the activities of portfolio companies has been delegated by the Board to the AIFM which has sub-delegated that authority to the Investment Manager.

The full text of the Company's response to the Stewardship Code may be found on the Company's website.

Relations with Shareholders

The Directors place a great deal of importance on communication with shareholders. The Chairman welcomes feedback from all shareholders and meets periodically with the largest shareholders to discuss the Company. The Annual Report and financial statements are available on the Company's website and are widely distributed to other parties who have an interest in the Company's performance.  Shareholders and investors may obtain up to date information on the Company through the Investment Manager's freephone information service and the Company's website (asian-income.co.uk).

The Notice of the Annual General Meeting included within the Annual Report and financial statements is ordinarily sent out at least 20 working days in advance of the meeting. All shareholders have the opportunity to put questions to the Board or Investment Manager, either formally at the Company's Annual General Meeting or informally following the meeting. The Company Secretary is available to answer general shareholder queries at any time throughout the year.  The Directors are keen to encourage dialogue with shareholders and the Chairman welcomes direct contact from shareholders. 

The Board's policy is to communicate directly with shareholders and their representative bodies without the involvement of the management group (either the Company Secretary, the Manager or the Investment Manager) in situations where direct communication is required and usually a representative from the Board meets with major shareholders on an annual basis in order to gauge their views.

Responsible Investment

The Board is aware of its duty to act in the interests of the Company. The Board acknowledges that there are risks associated with investment in companies which fail to conduct business in a socially responsible manner. The Manager considers social, environmental and ethical factors which may affect the performance or value of the Company's investments. The Directors, through the Company's Manager, encourage companies in which investments are made to adhere to best practice in the area of Corporate Governance. They believe that this can best be achieved by entering into a dialogue with company management to encourage them, where necessary, to improve their policies in this area. The Company's ultimate objective however is to deliver superior investment returns for its shareholders. Accordingly, whilst the Manager will seek to favour companies which pursue best practice in the above areas, this must not be to the detriment of the return on the investment portfolio.

Alternative Investment Fund Managers Directive ("AIFMD")

In accordance with the Alternative Investment Funds (Jersey) Regulations 2012, the Jersey Financial Services Commission ("JFSC") has granted its permission for the Company to be marketed within any EU Member State or other EU State to which the AIFMD applies. The Company's registration certificate with the JFSC mandates that the Company "must comply with the applicable sections of the Codes of Practice for Alternative Investment Funds and AIF Services Business".

APWM, as the Company's non-EEA alternative investment fund manager, has notified the UK Financial Conduct Authority in accordance with the requirements of the UK National Private Placement Regime of its intention to market the Company (as a non-EEA AIF under the AIFMD) in the UK.

In addition, in accordance with Article 23 of the AIFMD and Rule 3.2.2 of the Financial Conduct Authority ("FCA") Fund Sourcebook, APWM is required to make available certain disclosures for potential investors in the Company. These disclosures, in the form of a Pre-Investment Disclosure Document ("PIDD"), are available on the Company's website: asian-income.co.uk.

Annual General Meeting

The AGM will be held at 10.30 a.m. on 10 May 2017 at the Company's registered office, 1^st Floor, Sir Walter Raleigh House, 48 - 50 Esplanade, St Helier, Jersey JE2 3QB.  Resolutions including the following business will be proposed:

Authority to Purchase the Company's Shares

The Directors aim to operate an active discount management policy through the use of Ordinary Share buy backs, should the Company's Shares trade at a significant discount. The objective being to maintain the price at which the Ordinary Shares trade relative to the exclusive of income NAV at a discount of no more than 5%.  Purchases of Ordinary Shares will only be made through the market for cash at prices below the prevailing exclusive of income NAV (which, subject to shareholder approval at the AGM will be the latest estimated NAV) where the Directors believe such purchases will enhance shareholder value and are likely to assist in narrowing any discount to NAV at which the Ordinary Shares may trade. Subsequent to the period end the Company has purchased for treasury 1,045,000 Ordinary shares and at the time of writing the Ordinary Shares are trading at a discount of 8.5% to the prevailing exclusive of income NAV.

Resolution 8, a Special Resolution, will be proposed to renew the Directors' authority to make market purchases of the Company's Ordinary Shares in accordance with the provisions of the Listing Rules of the Financial Conduct Authority. Accordingly, the Company will seek authority to purchase up to a maximum of 27,869,916 Ordinary Shares (or, if less, 14.99% of the issued Ordinary Share capital as at the date of passing of the resolution). The authority being sought will expire on the earlier of 18 months from the date of the resolution or at the conclusion of the Annual General Meeting to be held in 2018 unless such authority is renewed prior to such time. Any Ordinary Shares purchased in this way will be cancelled and the number of Ordinary Shares will be reduced accordingly, or the Ordinary Shares will be held in treasury. 

Under Jersey company law, Jersey companies can either cancel shares or hold them in treasury following a buy-back of shares.  Repurchased shares will only be held in treasury if the Board considers that it will be in the interest of the Company and for the benefit of all shareholders.  Any future sales of Ordinary Shares from treasury will only be undertaken at a premium to the prevailing NAV.

Authority to Allot the Company's Shares

There are no provisions under Jersey law which confer rights of pre-emption upon the issue or sale of any class of shares in the Company.  However, the Company has a premium listing on the London Stock Exchange and is required to offer pre-emption rights to its shareholders. Accordingly, the Articles of Association contain pre-emption provisions similar to those found under UK law in satisfaction of the Listing Rules requirements.  Ordinary Shares will only be issued at a premium to the prevailing NAV and, therefore, will not be disadvantageous to existing shareholders. Any future issues of Ordinary Shares will be carried out in accordance with the Listing Rules. 

Unless previously disapplied by special resolution, in accordance with the Listing Rules, the Company is required to first offer any new Ordinary Shares or securities (or rights to subscribe for, or to convert or exchange into, Ordinary Shares) proposed to be issued for cash to shareholders in proportion to their holdings in the Company.  In order to continue with such Ordinary Share issues, as in previous years, your Board is also proposing that its annual disapplication of the pre-emption rights is renewed so that the Company may continue to issue Ordinary Shares as and when appropriate. Accordingly, Resolution 9, a Special Resolution, proposes a disapplication of the pre-emption rights in respect of 10% of the Ordinary Shares in issue at the date of the passing of the resolution, set to expire on the earlier of 18 months from the date of the resolution or at the conclusion of the Annual General Meeting to be held in 2018.

Recommendation

Your Board considers Resolutions 8 and 9 to be in the best interests of the Company and its members as a whole.  Accordingly, your Board recommends that shareholders should vote in favour of Resolutions 8 and 9 to be proposed at the Annual General Meeting, as they intend to do in respect of their own beneficial shareholdings which amount to 211,086 Ordinary Shares.

Peter Arthur

Chairman

29 March 2017

1^st Floor, Sir Walter Raleigh House

48 - 50 Esplanade

Jersey JE2 3QB

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Jersey Company law requires the Directors to prepare financial statements for each financial period in accordance with any generally accepted accounting principles.  The financial statements of the Company are required by law to give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.  In preparing these financial statements, the Directors should:

-         select suitable accounting policies and then apply them consistently;

-         make judgments and estimates that are reasonable and prudent;

-         specify which generally accepted accounting principles have been adopted in their preparation;

-         prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business; and,

-         assess whether the Annual Report and financial statements, taken as a whole, is 'fair, balanced and understandable'.

The Directors are responsible for keeping accounting records which are sufficient to show and explain its transactions and are such as to disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements prepared by the Company comply with the requirements of the Companies (Jersey) Law 1991.  They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Declaration

The Directors listed above in the Directors' Report, being the persons responsible, hereby confirm to the best of their knowledge:

-         that the financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board ("IASB"), and give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company;

-         that in the opinion of the Directors, the Annual Report and financial statements taken as a whole, is fair, balanced and understandable and it provides the information necessary to assess the Company's performance, business model and strategy; and

-         the Strategic Report, including the Chairman's Statement and the Investment Manager's Review, include a fair review of the development and performance of the business and the position of the Company together with a description of the principal risks and uncertainties that the Company faces.

For and on behalf of the Board

Peter Arthur

Chairman

29 March 2017

1^st Floor, Sir Walter Raleigh House

48 - 50 Esplanade

Jersey JE2 3QB

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website.  Legislation in Jersey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions

STATEMENT OF COMPREHENSIVE INCOME

		Year ended			Year ended
		31 December 2016			31 December 2015
		Revenue	Capital	Total	Revenue	Capital	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000
Investment income	4
Dividend income		18,203	-	18,203	18,233	-	18,233
Interest income		2,744	-	2,744	2,983	-	2,983
		_______	______	______	_______	_______	______
Total revenue		20,947	-	20,947	21,216	-	21,216
Gains/(losses) on investments designated at fair value through profit or loss	10	-	83,483	83,483	-	(50,175)	(50,175)
Net currency losses		-	(5,596)	(5,596)	-	(1,722)	(1,722)
		_______	______	______	_______	_______	______
		20,947	77,887	98,834	21,216	(51,897)	(30,681)
		_______	______	______	_______	_______	______
Expenses
Investment management fee	5	(1,308)	(1,962)	(3,270)	(1,443)	(2,164)	(3,607)
Other operating expenses	6	(1,049)	-	(1,049)	(969)	-	(969)
		_______	______	______	_______	_______	______
Profit/(loss) before finance costs and tax		18,590	75,925	94,515	18,804	(54,061)	(35,257)
		_______	______	______	_______	_______	______
Finance costs	7	(238)	(358)	(596)	(220)	(331)	(551)
		_______	______	______	_______	_______	______
Profit/(loss) before tax		18,352	75,567	93,919	18,584	(54,392)	(35,808)
Tax expense	2(d)	(1,045)	-	(1,045)	(855)	(49)	(904)
		_______	______	______	_______	_______	______
Profit/(loss) for the year		17,307	75,567	92,874	17,729	(54,441)	(36,712)
		_______	______	______	_______	_______	______
Earnings per Ordinary share (pence):	9	9.15	39.97	49.12	9.11	(27.97)	(18.86)
		_______	______	______	_______	_______	______
The Company does not have any income or expense that is not included in profit/(loss) for the year, and therefore the "Profit/(loss) for the year" is also the "Total comprehensive income for the year", as defined in IAS 1 (revised).
All of the profit/(loss) and total comprehensive income is attributable to the equity holders of Aberdeen Asian Income Fund Limited.  There are no non-controlling interests.
The total column of this statement represents the Statement of Comprehensive Income of the Company, 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.
The accompanying notes are an integral part of the financial statements.

BALANCE SHEET

		As at	As at
		31 December	31 December
		2016	2015
	Notes	£'000	£'000
Non-current assets
Investments designated at fair value through profit or loss	10	428,908	356,939
		_______	______
Current assets
Cash and cash equivalents		5,314	10,504
Other receivables	11	1,440	2,616
		_______	______
		6,754	13,120
		_______	______
Creditors:  amounts falling due within one year
Bank loans	12	(27,974)	(29,853)
Other payables	12	(1,660)	(774)
		_______	______
		(29,634)	(30,627)
		_______	______
Net current liabilities		(22,880)	(17,507)
		_______	______
Total assets less current liabilities		406,028	339,432
Creditors:  amounts falling due after more than one year
Bank loans	12	(10,000)	(10,000)
		_______	______
Net assets		396,028	329,432
		_______	______
Stated capital and reserves
Stated capital	13	194,933	194,933
Capital redemption reserve		1,560	1,560
Capital reserve	14	185,050	119,637
Revenue reserve	14	14,485	13,302
		_______	______
Equity shareholders' funds		396,028	329,432
		_______	______
Net asset value per Ordinary share (pence):	15	211.82	170.58
		_______	______

STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2016
		Capital
	Stated	redemption	Capital	Revenue	Retained
	capital	reserve	reserve	reserve	earnings	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Opening balance	194,933	1,560	119,637	13,302	-	329,432
Buyback of Ordinary shares for holding in treasury	-	-	(10,154)	-	-	(10,154)
Profit for the year	-	-	-	-	92,874	92,874
Transferred from retained earnings to capital reserve{A}	-	-	75,567	-	(75,567)	-
Transferred from retained earnings to revenue reserve	-	-	-	17,307	(17,307)	-
Dividends paid	-	-	-	(16,124)	-	(16,124)
	______	______	______	_______	______	______
Balance at 31 December 2016	194,933	1,560	185,050	14,485	-	396,028
	______	______	______	_______	______	______
For the year ended 31 December 2015
		Capital
	Stated	redemption	Capital	Revenue	Retained
	capital	reserve	reserve	reserve	earnings	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Opening balance	194,533	1,560	176,463	12,312	-	384,868
Issue of Ordinary shares	500	-	445	-	-	945
Buyback of Ordinary shares for cancellation	(100)	-	(50)	-	-	(150)
Buyback of Ordinary shares for holding in treasury	-	-	(2,780)	-	-	(2,780)
Loss for the year	-	-	-	-	(36,712)	(36,712)
Transferred from retained earnings to capital reserve{A}	-	-	(54,441)	-	54,441	-
Transferred from retained earnings to revenue reserve	-	-	-	17,729	(17,729)	-
Dividends paid	-	-	-	(16,739)	-	(16,739)
	______	______	______	_______	______	______
Balance at 31 December 2015	194,933	1,560	119,637	13,302	-	329,432
	______	______	______	_______	______	______
{A} Represents the capital profit attributable to equity shareholders per the Statement of Comprehensive Income.
The revenue reserve represents the amount of the Company's reserves distributable by way of dividend.
The stated capital in accordance with Companies (Jersey) Law 1991 Article 39A is £260,822,000 (2015 - £260,822,000). These amounts include proceeds arising from the issue of shares by the Company but excludes the cost of shares purchased for cancellation or treasury by the Company.
The accompanying notes are an integral part of the financial statements.

CASH FLOW STATEMENT

		Year ended		Year ended
		31 December 2016		31 December 2015
	Notes	£'000	£'000	£'000	£'000
Cash flows from operating activities
Dividend income received			16,996		16,662
Interest income received			2,881		2,954
Investment management fee paid			(2,433)		(3,658)
Other cash expenses			(954)		(1,008)
Cash generated from operations			16,490		14,950
Interest paid			(592)		(490)
Overseas taxation paid			(1,045)		(904)
			_______		_______
Net cash inflows from operating activities			14,853		13,556
Cash flows from investing activities
Purchases of investments		(56,400)		(29,227)
Sales of investments		70,158		32,553
		_______		_______
Net cash inflow from investing activities			13,758		3,326
Cash flows from financing activities
Proceeds from issue of Ordinary shares	13	-		945
Purchase of own shares for treasury	13	(10,203)		(2,566)
Purchase of own shares for cancellation	13	-		(150)
Dividends paid	8	(16,124)		(16,739)
Loan drawn down		-		10,000
Loans repaid		(6,773)		(1,450)
		_______		_______
Net cash outflow from financing activities			(33,100)		(9,960)
			_______		_______
Net (decrease)/increase in cash and cash equivalents			(4,489)		6,922
Cash and cash equivalents of the start of the year			10,504		3,671
Foreign exchange			(701)		(89)
			_______		_______
Cash and cash equivalents at the end of the year	2,16		5,314		10,504
			_______		_______

NOTES TO THE FINANCIAL STATEMENTS

1.	Principal activity
	The Company is a closed-end investment company incorporated in Jersey, with its Ordinary shares being listed on the London Stock Exchange. The Company's principle activity is investing in securities in the Asia Pacific region.

2.	Accounting policies
	(a)	Basis of preparation
		The financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS"), as adopted by the International Accounting Standards Board ("IASB"), and interpretations issued by the International Reporting Interpretations Committee of the IASB ("IFRIC"). All of the IFRS which took effect during the year were adopted by the Company and did not have a material impact on the financial results.
		The Company's assets consist substantially of equity shares in companies listed on recognised stock exchanges and in most circumstances are realisable within a short timescale. The Board has set limits for borrowing and regularly reviews actual exposures, cash flow projections and compliance with banking covenants. The Directors believe that the Company has adequate resources to continue in operational existence for the foreseeable future and, for the above reasons, they continue to adopt the going concern basis in preparing the financial statements.
		The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates which requires management to exercise its judgement in the process of applying the accounting policies. These judgements include but are not limited to the assessment of the Company's ability to continue as a going concern. Estimates include but are not limited to the measurement of fair value of financial instruments and the corresponding classification in the fair value hierarchy as well as the impairment of any assets and the recognition and measurement of any provisions and contingent liabilities under IAS 37. Actual results may differ from these estimates.
		The financial statements are prepared on a historical cost basis, except for investments that have been measured at fair value through profit or loss and financial liabilities that have been measured at amortised cost.
		The accounting policies which follow set out those policies which apply in preparing the financial statements for the year ended 31 December 2016.
		The financial statements are presented in sterling and all values are rounded to the nearest thousand (£'000) except when otherwise indicated.
		Where guidance set out in the Statement of Recommended Practice ("SORP") for investment trusts issued by the Association of Investment Companies ("AIC") is consistent with the requirement of IFRS, the Directors have sought to prepare the financial statements on a basis compliant with the recommendations of the SORP.
		Changes in accounting policy and disclosures
		At the date of authorisation of these financial statements, the following amendments to Standards were assessed to be relevant and are all effective for annual periods beginning on or after 1 January 2017:
		-	IAS 7 Amendment - Disclosure Initiative
		-	IAS 12 Amendment - Recognition of Deferred Tax Assets for Unrealised Losses
		-	IFRS 12 Amendment (AI 2014-16) - Clarification of the scope of the Standard
		At the date of authorisation of these financial statements, the following Standards and Interpretations were assessed to be relevant and are effective for annual periods beginning on or after 1 January 2018:
		-	IFRS 9 - Financial Instruments
		-	IFRIC 22 - Foreign Currency Transactions and Advance Consideration
		In addition, under the Annual Improvements to IFRSs 2012 - 2014 Cycle, a number of Standards are included for annual periods beginning on or after 1 January 2017.
		The Company intends to adopt the Standards and Interpretations in the reporting period when they become effective and the Board does not anticipate that the adoption of these Standards and Interpretations in future periods will materially impact the Company's financial results in the period of initial application although there will be revised presentations to the Financial Statements and additional disclosures. In forming this opinion the Board specifically notes the fundamental rewrite of accounting rules for financial instruments under IFRS 9 and introduces a new classification model for financial assets that is more principles-based than the current requirements under IAS 39 Financial Instruments: Recognition and Measurement. Financial assets are classified according to their contractual cash flow characteristics and the business models under which they are held. Instruments will be classified either at amortised cost, the newly established measurement category fair value through other comprehensive income or fair value through profit of loss. The Company's portfolio includes a relatively small exposure to corporate bonds, which have contractual cash flows and the Board have determined it will be appropriate to continue to classify these securities at fair value through profit or loss as even though the Company will collect contractual cash flows while it holds these securities as it is only incidental and not integral to achieving the investment objective, which is to provide investors with a total return. In further considering the business model, the Board is mindful that the Manager manages and evaluates the performance of the Company on a fair value basis and is compensated based on the fair value of assets managed rather than contractual cash flows collected.
	(b)	Income
		Dividend income receivable on equity shares is recognised on the ex-dividend date. Dividend income on equity shares where no ex-dividend date is quoted are brought into account when the Company's right to receive payment is established. Where the Company has elected to receive dividends in the form of additional shares rather than in cash, the amount of the cash dividend foregone is recognised as income. Special dividends are credited to capital or revenue according to their circumstances. Dividend income is presented gross of any non-recoverable withholding taxes, which are disclosed separately in the Statement of Comprehensive Income.
		The fixed returns on debt securities and non-equity shares are recognised using the effective interest rate method.
		Interest receivable from cash and short-term deposits is recognised on an accruals basis.
	(c)	Expenses
		All expenses, with the exception of interest expenses, which are recognised using the effective interest method, are accounted for on an accruals basis. Expenses are charged through the revenue column of the Statement of Comprehensive Income except as follows:
		-	expenses which are incidental to the acquisition or disposal of an investment are treated as capital and separately identified and disclosed in note 10;
		-	expenses (including share issue costs) are treated as capital where a connection with the maintenance or enhancement of the value of the investments can be demonstrated; and
		-	the Company charges 60% of investment management fees and finance costs to capital, in accordance with the Board's expected long term return in the form of capital gains and income respectively from the investment portfolio of the Company.
	(d)	Taxation
		Profits arising in the Company for the year ended 31 December 2016 will be subject to Jersey income tax at the rate of 0% (2015 - 0%).
		However, in some jurisdictions, investment income and capital gains are subject to withholding tax deducted at the source of the income. The Company presents the withholding tax separately from the gross investment income in the Statement of Comprehensive Income. For the purpose of the Cash Flow Statement, cash inflows from investments are presented gross of withholding taxes, when applicable.
	(e)	Investments
		All investments have been designated upon initial recognition at fair value through profit or loss as all investments are considered to form part of a group of financial assets which is evaluated on a fair value basis, in accordance with the Company's documented investment strategy.
		Purchases and sales of investments are recognised on a trade date basis. Proceeds are measured at fair value, which are regarded as the proceeds of sale less any transaction costs.
		The fair value of the financial assets is based on their quoted bid price at the reporting date, without deduction for any estimated future selling costs.
		Changes in the value of investments held at fair value through profit or loss and gains and losses on disposal are recognised in the Statement of Comprehensive Income as "Gains/(losses) on investments designated 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.
	(f)	Cash and cash equivalents
		Cash comprises cash held at banks. Cash equivalents are short-term highly liquid investments that are readily convertible to known amounts of cash and that are subject to an insignificant risk of changes in values.
		For the purposes of the Cash Flow Statement, cash and cash equivalents comprise cash at bank net of any outstanding bank overdrafts.
	(g)	Other receivables and payables
		Other receivables do not carry any interest and are short-term in nature and are accordingly stated at their recoverable amount. Other payables are non interest bearing and are stated at their payable amount.
	(h)	Dividends payable
		Dividends payable are recognised in the financial statements in the period in which they are declared.
	(i)	Nature and purpose of reserves
		Capital redemption reserve
		The capital redemption reserve arose when Ordinary shares were redeemed, at which point an amount equal to £1 per share of the Ordinary share capital was transferred from the Statement of Comprehensive Income to the capital redemption reserve. Following a law amendment in 2008, the Company is no longer required to make a transfer. Although the transfer from the Statement of Comprehensive Income is no longer required, the amount remaining in the capital redemption reserve is not distributable in accordance with the undertaking provided by the Board in the launch Prospectus.
		Capital reserve
		This reserve reflects any gains or losses on investments realised in the period along with any increases and decreases in the fair value of investments held that have been recognised in the Statement of Comprehensive Income. This reserve also reflects any gains realised when Ordinary shares are issued at a premium to £1 per share and any losses suffered on the redemption of Ordinary shares for cancellation at a value higher than £1 per share.
		When the Company purchases its Ordinary shares to be held in treasury, the amount of the consideration paid, which includes directly attributable costs, is recognised as a deduction from the capital reserve. Should these shares be sold subsequently, the amount received is recognised in the capital reserve and the resulting surplus or deficit on the transaction remains in the capital reserve.
		Revenue reserve
		This reserve reflects all income and costs which are recognised in the revenue column of the Statement of Comprehensive Income. The revenue reserve is the principal reserve which is utilised to fund dividend payments to shareholders.
	(j)	Foreign currency
		Monetary assets and liabilities denominated in foreign currencies are converted into sterling at the rate of exchange ruling at the reporting date. The financial statements are presented in sterling, which is the Company's functional and presentation currency. The Company's performance is evaluated and its liquidity is managed in sterling. Therefore sterling is considered as the currency that most faithfully represents the economic effects of the underlying transactions, events and conditions. Transactions during the year involving foreign currencies are converted at the rate of exchange ruling at the transaction date. Gains or losses arising from a change in exchange rates subsequent to the date of a transaction are included as a currency gain or loss in revenue or capital in the Statement of Comprehensive Income, depending on whether the gain or loss is of a revenue or capital nature.
	(k)	Borrowings
		Borrowings are stated at the amount of the net proceeds immediately after draw down plus cumulative finance costs less cumulative payments. The finance cost of borrowings is allocated to years over the term of the debt at a constant rate on the carrying amount and charged 40% to revenue and 60% to capital to reflect the Company's investment policy and prospective revenue and capital growth.
		Borrowings are measured at amortised cost using the effective interest rate method.
	(l)	Share capital
		The Company's Ordinary shares are classified as equity as the Company has full discretion on repurchasing the Ordinary shares and on dividend distributions.
		Issuance, acquisition and resale of Ordinary shares are accounted for as equity transactions. Upon issuance of Ordinary shares, the consideration received is included in equity.
		Transaction costs incurred by the Company in acquiring or selling its own equity instruments are accounted for as a deduction from equity to the extent that they are incremental costs directly attributable to the equity transaction that otherwise would have been avoided.
		Own equity instruments which are acquired (treasury shares) are deducted from equity and accounted for at amounts equal to the consideration paid, including any directly attributable incremental costs.
		No gain or loss is recognised in the Statement of Comprehensive Income on the purchase, sale, issuance or cancellation of the Company's own instruments.

3.	Segment information
	The Company is organised into one main operating segment, which invests in equity securities and debt instruments. All of the Company's activities are interrelated, and each activity is dependent on the others. Accordingly, all significant operating decisions are based upon analysis of the Company as one segment. The financial results from this segment are equivalent to the financial statements of the Company as a whole.
	The following table analyses the Company's operating income by each geographical location. The basis for attributing the operating income is the place of incorporation of the instrument's counterparty.
		Year ended	Year ended
		31 December 2016	31 December 2015
		£'000	£'000
	Asia Pacific region	19,797	19,407
	United Kingdom	1,150	1,809
		_______	_______
		20,947	21,216
		_______	_______

		Year ended	Year ended
		31 December 2016	31 December 2015
4.	Income	£'000	£'000
	Income from investments
	Overseas dividends	16,142	15,635
	UK dividend income	761	1,280
	Stock dividends	1,300	1,318
		_______	_______
		18,203	18,233
		_______	_______
	Interest income
	Bond interest	2,737	2,971
	Deposit interest	7	12
		_______	_______
		2,744	2,983
		_______	_______
	Total income	20,947	21,216
		_______	_______

		Year ended			Year ended
		31 December 2016			31 December 2015
		Revenue	Capital	Total	Revenue	Capital	Total
5.	Investment management fee	£'000	£'000	£'000	£'000	£'000	£'000
	Investment management fee	1,308	1,962	3,270	1,443	2,164	3,607
		_______	_______	_______	_______	_______	_______
	The Company has an agreement with Aberdeen Private Wealth Management Limited ("APWM") for the provision of management services. This agreement has been sub-delegated to Aberdeen Asset Management Asia Limited ("AAM Asia").
	From 1 January 2016 to 31 May 2016, the investment management fee was payable monthly in arrears and was based on an annual amount of 1% of the net asset value of the Company valued monthly. From 1 June, 2016, following a review of arrangements, the investment management fee is payable quarterly in arrears and is based on an annual amount of 0.85% of the net asset value of the Company valued monthly and on the average of the previous five monthly valuation points. The balance due to APWM at the year end was £1,108,000 (2015 - £271,000). The investment management fees are charged 40% to revenue and 60% to capital in line with the Board's expected long term returns.

		Year ended	Year ended
		31 December 2016	31 December 2015
6.	Other operating expenses	£'000	£'000
	Directors' fees	165	160
	Promotional activities	250	241
	Auditor's remuneration:
	- statutory audit	39	31
	- interim accounts review	6	6
	- tax services	11	4
	Custodian charges	155	144
	Secretarial and administration fee	134	133
	Other	289	250
		_______	_______
		1,049	969
		_______	_______
	The Company has an agreement with Aberdeen Asset Managers Limited ("AAM") for the provision of promotional activities in relation to the Company's participation in the Aberdeen Investment Trust share plan and ISA. The total fees paid are based on an annual rate of £250,000 (2015 - £250,000). An amount of £63,000 (2015 - £63,000) was payable to AAM at the year end.
	In addition, APWM is entitled to an annual company secretarial and administration fee of £134,000 (2015 - £133,000). The link to increase the fee in line with increases in the Retail Price Index was discontinued with effect from 1 June 2016 following a review of arrangements. An amount of £101,000 (2015 - £34,000) was payable to APWM at the year end.
	No fees have been paid to Ernst & Young during the period other than those reflected in the table above.

		Year ended			Year ended
		31 December 2016			31 December 2015
		Revenue	Capital	Total	Revenue	Capital	Total
7.	Finance costs	£'000	£'000	£'000	£'000	£'000	£'000
	Interest on bank loans	238	358	596	220	331	551
		_______	_______	_______	_______	_______	_______
	Finance costs are charged 40% to revenue and 60% to capital as disclosed in the accounting policies.

			Year ended		Year ended
			31 December 2016		31 December 2015
8.	Dividends on Ordinary equity shares		£'000		£'000
	Amounts recognised as distributions to equity holders in the year:
	Fourth interim dividend 2015 - 2.50p per Ordinary share (2014 - 2.60p)		4,812		5,058
	First interim dividend 2016 - 2.00p per Ordinary share (2015 - 2.00p)		3,784		3,891
	Second interim dividend 2016 - 2.00p per Ordinary share (2015 - 2.00p)		3,771		3,891
	Third interim dividend 2016 - 2.00p per Ordinary share (2015 - 2.00p)		3,757		3,899
			_______		_______
			16,124		16,739
			_______		_______
	The table below sets out the total dividends declared in respect of the financial year. The revenue available for distribution by way of dividend for the year is £17,307,000 (2015 - £17,729,000).
		2016		2015
		£'000		£'000
	First interim dividend 2016 - 2.00p per Ordinary share (2015 - 2.00p)	3,784		3,891
	Second interim dividend 2016 - 2.00p per Ordinary share (2015 - 2.00p)	3,771		3,891
	Third interim dividend 2016 - 2.00p per Ordinary share (2015 - 2.00p)	3,757		3,899
	Fourth interim dividend 2016 - 2.75p per Ordinary share (2015 - 2.50p)	5,136		4,812
		_______		_______
		16,448		16,493
		_______		_______
	The fourth interim dividend for 2016, amounting to £5,136,000 (2015 - fourth interim dividend of £4,812,000), has not been included as a liability in these financial statements as it was announced and paid after 31 December 2016.

9.	Earnings per share
	Ordinary shares
	The earnings per Ordinary share is based on the profit after taxation of £92,874,000 (2015 - loss of £36,712,000) and on 189,072,288 (2015 - 194,614,403) Ordinary shares, being the weighted average number of Ordinary shares in issue during the year excluding Ordinary shares held in treasury.
	The earnings per Ordinary share detailed above can be further analysed between revenue and capital as follows:
		Year ended			Year ended
		31 December 2016			31 December 2015
		Revenue	Capital	Total	Revenue	Capital	Total
	Net profit/(loss) (£'000)	17,307	75,567	92,874	17,729	(54,441)	(36,712)
	Weighted average number of Ordinary shares in issue{A}			189,072,288			194,614,403
	Return per Ordinary share (pence)	9.15	39.97	49.12	9.11	(27.97)	(18.86)
	{A} Calculated excluding shares held in treasury.

		Year ended	Year ended
		31 December 2016	31 December 2015
10.	Investments designated at fair value through profit or loss	£'000	£'000
	Opening valuation	356,939	410,259
	Movements in the year:
	Purchases at cost	57,700	30,545
	Sales - proceeds	(69,214)	(33,690)
	Sales - realised losses	(5,569)	(4,090)
	Increase/(decrease) in investment holdings fair value	89,052	(46,085)
		_______	_______
	Closing valuation at 31 December	428,908	356,939
		_______	_______
		£'000	£'000
	Closing book cost	317,032	334,115
	Unrealised gains on investments	111,876	22,824
		_______	_______
	Closing valuation at 31 December	428,908	356,939
		_______	_______
		Year ended	Year ended
		31 December 2016	31 December 2015
	The portfolio valuation	£'000	£'000
	Listed on recognised stock exchanges at market valuation:
	Equities - UK	15,917	10,616
	Equities - overseas	389,532	317,585
	Bonds - overseas	23,459	28,738
		_______	_______
	Total	428,908	356,939
		_______	_______
		Year ended	Year ended
	Gains/(losses) on investments designated at fair value	31 December 2016	31 December 2015
	through profit or loss	£'000	£'000
	Realised losses on sales of investments	(5,569)	(4,090)
	Unrealised gains/(losses) on investments	89,052	(46,085)
		_______	_______
		83,483	(50,175)
		_______	_______
	All investments are categorised as held at fair value through profit or loss.
	Transaction costs
	During the year 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/(losses) on financial assets designated at fair value through profit or loss in the Statement of Comprehensive Income. The total costs were as follows:
		Year ended		Year ended
		31 December 2016		31 December 2015
		£'000		£'000
	Purchases	49		35
	Sales	64		44
		_______		_______
		113		79
		_______		_______

		2016	2015
11.	Debtors: amounts falling due within one year	£'000	£'000
	Amounts due from brokers	192	1,137
	Prepayments and accrued income	1,248	1,479
		_______	_______
		1,440	2,616
		_______	_______
	None of the above assets are past their due date or impaired.

12.	Creditors: amounts falling due within one year
	(a)	Bank loans
		At the year end, the Company had the following unsecured bank loans:
			2016			2015
				Local			Local
				currency	Carrying		currency		Carrying
			Interest	principal	amount	Interest	principal		amount
			rate	amount	£'000	rate	amount		£'000
		Unsecured bank loans repayable within one year:
		Hong Kong Dollar	1.467	212,500,000	22,181	1.236	252,842,000		22,135
		United States Dollar	1.670	7,158,000	5,793	1.253	11,008,000		7,468
		Sterling	-	-	-	1.486	250,000		250
					_______				_______
		Total			27,974				29,853
					_______				_______
		Unsecured bank loans repayable in more than one year but no more than five years:
		Sterling	2.218	10,000,000	10,000	2	10,000,000		10,000
				_______	_______	_______	_______		_______
		For the short term loans, which are due to mature on 25 January 2017, the fair value of borrowings is deemed to be the same as the carrying value. The fair value of the long term loan, which is due to mature on 3 March 2018, is disclosed in note 20 and is determined by aggregating the expected future cash flows for the loan discounted at a rate comprising the borrower's margin plus an average of market rates applicable to loans of a similar period of time and currency. At the date of signing this report, short term loans of HK$212,500,000 and US$7,158,000 were rolled forward to 13 April 2017 at fixed interest rates of 1.57535% and 1.77783% respectively. Financial covenants contained within the relevant loan agreements provide, inter alia, that the Company's NAV shall at no time be less than £185 million and that adjusted NAV coverage shall at no time be less than 4.0 to 1.0. At 31 December 2016 net assets were £396 million and borrowings were 9.6% thereof. The Company has complied with all financial covenants throughout the year.
							2016	2015
	(b)	Other payables					£'000	£'000
		Amounts due to brokers for purchase of shares into treasury					165	214
		Investment management fees					1,108	271
		Other amounts due					387	289
							_______	_______
							1,660	774
							_______	_______

		2016		2015
13.	Stated capital	Number	£'000	Number	£'000
	Ordinary shares of no par value
	Authorised	Unlimited	Unlimited	Unlimited	Unlimited
	Issued and fully paid
	Balance brought forward	194,933,389	194,933	194,533,389	194,533
	Ordinary shares issued	-	-	500,000	500
	Ordinary shares bought back for cancellation	-	-	(100,000)	(100)
		_______	_______	_______	_______
	At 31 December	194,933,389	194,933	194,933,389	194,933
		_______	_______	_______	_______
	During the year no (2015 - 500,000) Ordinary shares were issued by the Company for a total consideration, including transaction costs, of £nil (2015 - £945,000). During the year no Ordinary shares were bought back by the Company for cancellation (2015 - 100,000) for a total cost of £nil (2015 - £150,000) and 6,158,000 (2015 - 1,807,000) Ordinary shares were bought back by the Company for holding in treasury at a total cost of £10,154,000 (2015 - £2,780,000). At the year end 7,965,000 (2015 - 1,807,000) Ordinary shares were held in treasury, which represents 4.09% (2015 - 0.93%) of the Company's total issued share capital at 31 December 2016.
	For each Ordinary share issued £1 is allocated to stated capital, with the balance taken to the capital reserve.
	The Ordinary shares give shareholders the entitlement to all of the capital growth in the Company's assets and to all the income from the Company that is resolved to be distributed.
	Since the year end a further 1,045,000 shares have been bought back for holding in treasury at a cost of £2,146,000.
	Voting and other rights
	In accordance with the Articles of Association of the Company, on a show of hands, every member (or duly appointed proxy) present at a general meeting of the Company has one vote; and, on a poll, every member present in person or by proxy shall have one vote for each Ordinary share held.
	The Ordinary shares carry the right to receive all dividends declared by the Company or the Directors.
	On a winding-up, provided the Company has satisfied all of its liabilities, holders of Ordinary shares are entitled to all of the surplus assets of the Company.

		2016	2015
14.	Retained earnings	£'000	£'000
	Capital reserve
	At 1 January	119,637	176,463
	Net currency losses	(5,596)	(1,722)
	Movement in unrealised fair value	89,052	(46,085)
	Loss on realisation of investments	(5,569)	(4,090)
	Costs charged to capital	(2,320)	(2,544)
	Issue of Ordinary shares	-	445
	Buyback of Ordinary shares for cancellation	-	(50)
	Buyback of Ordinary shares for holding in treasury	(10,154)	(2,780)
		_______	_______
	At 31 December	185,050	119,637
		_______	_______
	Revenue reserve
	At 1 January	13,302	12,312
	Revenue profit for the year	17,307	17,729
	Dividends paid	(16,124)	(16,739)
		_______	_______
	At 31 December	14,485	13,302
		_______	_______

15.	Net asset value per share
	Ordinary shares
	The net asset value per Ordinary share and the net asset values attributable to Ordinary shareholders at the year end calculated in accordance with the Articles of Association were as follows:
		Net asset value	Net asset values	Net asset value	Net asset values
		per share	attributable	per share	attributable
		2016	2016	2015	2015
		p	£'000	p	£'000
	Ordinary shares	211.82	396,028	170.58	329,432
		_______	_______	_______	_______
	The net asset value per Ordinary share is based on 186,968,389 (2015 - 193,126,389) Ordinary shares, being the number of Ordinary shares in issue at the year end excluding Ordinary shares held in treasury.

16.	Financial instruments
	The Company's investment activities expose it to various types of financial risk associated with the financial instruments and markets in which it invests. The Company's financial instruments comprise securities, other investments, cash balances and bank loans and debtors and creditors that arise directly from its operations; for example, in respect of sales and purchases awaiting settlement, and debtors for accrued income.
	The Board has delegated the risk management function to APWML under the terms of its management agreement with APWML (further details of which are included under note 5). The Board regularly reviews and agrees policies for managing each of the key financial risks identified with the Manager. The types of risk and the Manager's approach to the management of each type of risk, are summarised below. Such approach has been applied throughout the year and has not changed since the previous accounting period. The numerical disclosures exclude short-term debtors and creditors, with the exception of short-term borrowings.
	Risk management framework
	The directors of Aberdeen Private Wealth Managers Limited collectively assume responsibility for APWML's obligations under the AIFMD including reviewing investment performance and monitoring the Company's risk profile during the year.
	APWML is a fully integrated member of the Aberdeen Group, which provides a variety of services and support to APWML in the conduct of its business activities, including in the oversight of the risk management framework for the Company. APWML has delegated the day to day administration of the investment policy to Aberdeen Asset Management Asia Limited, which is responsible for ensuring that the Company is managed within the terms of its investment guidelines and the limits set out in its pre-investment disclosures to investors (details of which can be found on the Company's website). APWML has delegated responsibility for monitoring and oversight of the Investment Manager and other members of the Aberdeen Group which carry out services and support to APWML to Aberdeen Fund Managers Limited.
	The Manager conducts its risk oversight function through the operation of the Group's risk management processes and systems which are embedded within the Group's operations. The Group's Risk Division supports management in the identification and mitigation of risks and provides independent monitoring of the business. The Division includes Compliance, Business Risk, Market Risk, Risk Management and Legal. The team is headed up by the Group's Head of Risk, who reports to the Chief Executive Officer of the Group. The Risk Division achieves its objective through embedding the Risk Management Framework throughout the organisation using the Group's operational risk management system ("SWORD").
	The Group's Internal Audit Department is independent of the Risk Division and reports directly to the Group CEO and to the Audit Committee of the Group's Board of Directors. The Internal Audit Department is responsible for providing an independent assessment of the Group's control environment.
	The Group's corporate governance structure is supported by several committees to assist the board of directors of Aberdeen, its subsidiaries and the Company to fulfil their roles and responsibilities. The Group's Risk Division is represented on all committees, with the exception of those committees that deal with investment recommendations. The specific goals and guidelines on the functioning of those committees are described on the committees' terms of reference.
	Risk management
	The main risks arising from the Company's financial instruments are (i) market risk (comprising interest rate risk, currency risk and equity price risk), (ii) liquidity risk, (iii) credit risk and (iv) gearing risk.
	The Board regularly reviews and agrees policies for managing each of these risks. The Manager's policies for managing each of these risks are summarised below and have been applied throughout the year. The numerical disclosures exclude short-term debtors and creditors.
	(i) Market risk
	The fair value or future cash flows of a financial instrument held by the Company may fluctuate because of changes in market prices. This market risk comprises three elements - interest rate risk, currency risk and equity price risk.
	Interest rate risk
	Interest rate risk is the risk that interest rate movements may affect:
	the fair value of the investments in fixed interest rate securities;
	the level of income receivable on cash deposits;
	interest payable on the Company's variable rate borrowings.
	Management of the risk
	Financial assets
	Although the majority of the Company's financial assets comprise equity shares which neither pay interest nor have a stated maturity date, at the year end the Company had five holdings in fixed rate overseas corporate bonds, Yingde Gases, of £2,551,000, DFCC Bank, of £4,232,000, Green Dragon Gas of £4,916,000, ICICI Bank of £4,549,000 and Bank OCBC NISP of £7,211,000 (2015 - Yanlord Land Group, of £6,888,000, Yingde Gases, of £2,947,000, DFCC Bank, of £4,285,000, Green Dragon Gas of £4,961,000, ICICI Bank of £3,826,000 and Bank OCBC NISP of £5,831,000). Bond prices are determined by market perception as to the appropriate level of yields given the economic background. Key determinants include economic growth prospects, inflation, the Government's fiscal position, short-term interest rates and international market comparisons. The Investment Manager takes all these factors into account when making any investment decisions as well as considering the financial standing of the potential investee entity.
	Returns from bonds are fixed at the time of purchase, as the fixed coupon payments are known, as are the final redemption proceeds. This means that if a bond is held until its redemption date, the total return achieved is unaltered from its purchase date. However, over the life of a bond the market price at any given time will depend on the market environment at that time. Therefore, a bond sold before its redemption date is likely to have a different price to its purchase level and a profit or loss may be incurred.
	Financial liabilities
	The Company primarily finances its operations through use of equity, retained profits and bank borrowings. On 3 March 2015 the Company entered into a new three-year £10 million facility with Scotiabank Europe PLC which was in addition to the existing unsecured three year £30 million multi currency revolving facility with Scotiabank (Ireland) Limited and details of the terms and conditions of the loans are disclosed in note 12. Interest is due on the Scotiabank Europe PLC loan quarterly with the next interest payment being due on 3 March 2017.  The Scotiabank Europe PLC loan is included in creditors falling due after more than one year.  Interest is due on Scotiabank (Ireland) Limited loans at the maturity date, being 25 January 2017 (loans have been subsequently rolled over, see note 12 for further details).  The Scotiabank (Ireland) Limited loans are included in creditors falling due within one year.
	The Board actively monitors its bank borrowings. A decision on whether to roll over its existing borrowings will be made prior to their maturity dates, taking into account the Company's ability to draw down fixed, long-term borrowings.
	The interest rate profile of the Company (excluding short term debtors and creditors but including short term borrowings as stated previously) was as follows:
					Weighted average
					period for which					Weighted average				Floating			Fixed
					rate is fixed					interest rate				rate			rate
	At 31 December 2016				Years					%				£'000			£'000
	Assets
	Chinese Overseas Corporate Bonds				1.27					9.25				-			7,467
	Indian Overseas Corporate Bond				7.61					9.15				-			4,549
	Indonesian Overseas Corporate Bond				0.11					9.40				-			7,211
	Sri Lankan Overseas Corporate Bond				1.83					9.63				-			4,232
	Cash at bank - Sterling				-					-				5,275			-
	Cash at bank - Taiwan Dollar				-					-				39			-
														_______			_______
														5,314			23,459
														_______			_______
					Weighted average
					period for which					Weighted average				Floating			Fixed
					rate is fixed					interest rate				rate			rate
					Years					%				£'000			£'000
	Liabilities
	Bank loan - Hong Kong Dollar				0.07					1.47				-			(22,181)
	Bank loan - US Dollar				0.07					1.67				-			(5,793)
	Bank loans - Sterling				1.17					2.22				-			(10,000)
														_______			_______
														-			(37,974)
														_______			_______
					Weighted average
					period for which					Weighted average				Floating			Fixed
					rate is fixed					interest rate				rate			rate
	At 31 December 2015				Years					%				£'000			£'000
	Assets
	Chinese Overseas Corporate Bonds				2.24					9.87				-			14,796
	Indian Overseas Corporate Bond				8.61					9.15				-			3,826
	Indonesian Overseas Corporate Bond				1.12					9.40				-			5,831
	Sri Lankan Overseas Corporate Bond				2.84					9.63				-			4,285
	Cash at bank - Sterling				-					-				10,207			-
	Cash at bank - Malaysian Ringitt				-					-				280			-
	Cash at bank - Singapore Dollar				-					-				13			-
	Cash at bank - Taiwan Dollar				-					-				3			-
	Cash at bank - Australian Dollar				-					-				1			-
														_______			_______
														10,504			28,738
														_______			_______
					Weighted average
					period for which					Weighted average				Floating			Fixed
					rate is fixed					interest rate				rate			rate
					Years					%				£'000			£'000
	Liabilities
	Bank loan - Hong Kong Dollar				0.07					1.24				-			(22,135)
	Bank loan - US Dollar				0.07					1.25				-			(7,468)
	Bank loans - Sterling				2.12					2.20				-			(10,250)
														_______			_______
														-			(39,853)
														_______			_______
	The weighted average interest rate is based on the current yield of each asset, weighted by its market value. The weighted average interest rate on bank loans is based on the interest rate payable, weighted by the total value of the loans.
	The floating rate assets consist of cash deposits on call earning interest at prevailing market rates.
	All financial liabilities are measured at amortised cost using the effective interest rate method.
	Interest rate sensitivity
	The sensitivity analyses demonstrate the sensitivity of the Company's profit/(loss) for the year to a reasonably possible change in interest rates, with all other variables held constant.
	The sensitivity of the profit/(loss) for the year is the effect of the assumed change in interest rates on:
	the net interest income for one year, based on the floating rate financial assets held at the Balance Sheet date; and
	changes in fair value of investments for the year, based on revaluing fixed rate financial assets at the Balance Sheet date.
	The Directors have considered the potential impact of a 100 basis point movement in interest rates and concluded that it would not be material in the current year (2015 - not material ). This consideration is based on the Company's exposure to interest rates on its floating rate cash balances, fixed interest securities and bank loans.
	Foreign currency risk
	A significant proportion of the Company's investment portfolio is invested in overseas securities and the Balance Sheet can be significantly affected by movements in foreign exchange rates. It is not the Company's policy to hedge this risk on a continuing basis. A significant proportion of the Company's borrowings, as detailed in note 12, is in foreign currency as at 31 December 2016.
	Management of the risk
	The revenue account is subject to currency fluctuation arising on overseas income. The Company does not hedge this currency risk on a continuing basis but the Company may, from time to time, match specific overseas investment with foreign currency borrowings.
	The fair values of the Company's monetary items that have foreign currency exposure at 31 December are shown below. Where the Company's equity investments (which are non monetary items) are priced in a foreign currency, they have been included within the equity price risk sensitivity analysis so as to show the overall level of exposure.
		31 December 2016									31 December 2015
					Net										Net
					monetary			Total							monetary			Total
		Equity			assets			currency			Equity				assets			currency
		investments			/(liabilities)			exposure			investments				/(liabilities)			exposure
		£'000			£'000			£'000			£'000				£'000			£'000
	Australian Dollar	89,181			-			89,181			65,868				1			65,869
	Hong Kong Dollar	60,429			(22,181)			38,248			59,822				(22,135)			37,687
	Indian Rupee	-			4,549			4,549			-				3,826			3,826
	Indonesian Rupiah	5,601			7,211			12,812			1,564				5,831			7,395
	Japanese Yen	15,825			-			15,825			13,119				-			13,119
	Korean Won	7,868			-			7,868			-				-			-
	Malaysian Ringgit	25,719			-			25,719			25,401				280			25,681
	Singapore Dollar	105,579			-			105,579			94,737				13			94,750
	Taiwanese Dollar	26,948			39			26,987			18,683				3			18,686
	Thailand Baht	48,049			-			48,049			38,391				-			38,391
	US Dollar	4,333			5,906			10,239			-				11,613			11,613
		_______			_______			_______			_______				_______			_______
	Total	389,532			(4,476)			385,056			317,585				(568)			317,017
		_______			_______			_______			_______				_______			_______
	The above year end amounts are not representative of the exposure to risk during the year, because the levels of foreign currency exposure change significantly throughout the year.
	Foreign currency sensitivity
	The following table details the impact on the Company's net assets to a 10% decrease (in the context of a 10% increase the figures below should all be read as negative) in sterling against the foreign currencies in which the Company has exposure. The sensitivity analysis includes foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates.
												2016				2015
												£'000				£'000
	Australian Dollar											8,918				6,587
	Hong Kong Dollar											3,825				3,769
	Indian Rupee											455				383
	Indonesian Rupiah											1,281				739
	Japanese Yen											1,583				1,312
	Korean Won											787				-
	Malaysian Ringgit											2,572				2,568
	Singapore Dollar											10,558				9,475
	Taiwanese Dollar											2,698				1,869
	Thailand Baht											4,805				3,839
	US Dollar											1,024				1,161
												_______				_______
	Total											38,506				31,702
												_______				_______
	Equity price risk
	Equity price risk (ie changes in market prices other than those arising from interest rate or currency risk) may affect the value of the Company's quoted equity investments.
	Management of the risk
	It is the Board's policy to hold an appropriate spread of investments in the portfolio in order to reduce the risk arising from factors specific to a particular country or sector. The allocation of assets to international markets and the stock selection process, as detailed in the published Annual Report respectively, both act to reduce market risk. The Manager actively monitors market prices throughout the year and reports to the Board, which meets regularly in order to review investment strategy. The investments held by the Company are listed on recognised stock exchanges.
	Concentration of exposure to equity price risks
	A geographic analysis of the Company's investment portfolio is shown in the published Annual Report, which shows that the majority of the investments' value is in the Asia Pacific region. It should be recognised that an investment's country of domicile or of listing does not necessarily equate to its exposure to the economic conditions in that country.
	Equity price risk sensitivity
	The following table illustrates the sensitivity of the profit after taxation for the year and the equity to an increase or decrease of 10% in the fair values of the Company's equities. This level of change is considered to be reasonably possible based on observation of current market conditions. The sensitivity analysis is based on the Company's equities at each Balance Sheet date, with all other variables held constant.
						2016							2015
						Increase in			Decrease in				Increase in			Decrease in
						fair value			fair value				fair value			fair value
						£'000			£'000				£'000			£'000
	Statement of Comprehensive Income - profit after taxation
	Revenue return - increase /(decrease)					-			-				-			-
	Capital return - increase /(decrease)					40,545			(40,545)				32,820			(32,820)
						_______			_______				_______			_______
	Total profit after taxation - increase /(decrease)					40,545			(40,545)				32,820			(32,820)
						_______			_______				_______			_______
	Equity					40,545			(40,545)				32,820			(32,820)
						_______			_______				_______			_______
	(ii) Liquidity risk
	This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities, which stood at £39,656,000 (2015 - £40,627,000).
	Management of the risk
	Liquidity risk is not considered to be significant as the Company's assets comprise mainly cash and readily realisable securities, which can be sold to meet funding commitments if necessary and these amounted to £5,314,000 and £428,908,000 (2015 - £10,504,000 and £356,939,000 ) at the year end respectively. Short-term flexibility is achieved through the use of loan facilities.
	Maturity profile
	The following table sets out the undiscounted gross cashflows, by maturity, of the Company's significant financial liabilities and cash at the Balance Sheet date:
				Within			Within			Within			More than
				1 year			2-3 years			4-5 years			5 years				Total
	At 31 December 2016			£'000			£'000			£'000			£'000				£'000
	Fixed rate
	Bank loans			(28,266)			(10,053)			-			-				(38,319)
				_______			_______			_______			_______				_______
	Floating rate
	Cash			5,314			-			-			-				5,314
				_______			_______			_______			_______				_______
				Within			Within			Within			More than
				1 year			2-3 years			4-5 years			5 years				Total
	At 31 December 2015			£'000			£'000			£'000			£'000				£'000
	Fixed rate
	Bank loans			(30,139)			(10,275)			-			-				(40,414)
				_______			_______			_______			_______				_______
	Floating rate
	Cash			10,504			-			-			-				10,504
				_______			_______			_______			_______				_______
	(iii) Credit risk
	This is failure of the counter party to a transaction to discharge its obligations under that transaction that could result in the Company suffering a loss.
	Management of the risk
	Where the investment manager makes an investment in a bond, corporate or otherwise, the credit rating of the issuer is taken into account so as to minimise the risk to the Company of default. The Company has the following holdings:
	- a Chinese overseas corporate bond issued by Yingde Gases. The issuers current credit rating at S&P is CC; and
	- a Chinese overseas corporate bond issued by Green Dragon Gas. The issuers current credit rating at S&P is B; and
	- an Indian overseas corporate bond issued by ICICI Bank. The issuers current credit rating at S&P is B; and
	- an Indonesian overseas corporate bond issued by Bank OCBC NISP.  This bond is non-rated.
	- a Sri Lankan overseas corporate bond issued by DFCC Bank. The issuers current credit rating at Moody's is Ba3.
	Investment transactions are carried out with a large number of brokers, whose credit rating is taken into account so as to minimise the risk to the Company of default;
	The risk of counterparty exposure due to failed trades causing a loss to the Company is mitigated by the review of failed trade reports on a daily basis. In addition, both stock and cash reconciliations to the custodian's records are performed on a daily basis to ensure discrepancies are investigated on a timely basis. The Manager's Compliance department carries out periodic reviews of the custodian's operations and reports its finding to the Manager's Risk Management Committee. It is the Manager's policy to trade only with A- and above (Long Term rated) and A-1/P-1 (Short Term rated) counterparties;
	Cash is held only with reputable banks with high quality external credit ratings.
	None of the Company's financial assets are secured by collateral or other credit enhancements.
	Credit risk exposure
	In summary, compared to the amounts included in the Balance Sheet, the maximum exposure to credit risk at 31 December was as follows:
							2016						2015
							Balance			Maximum			Balance				Maximum
							Sheet			exposure			Sheet				exposure
							£'000			£'000			£'000				£'000
	Non-current assets
	Investments designated at fair value through profit or loss						428,908			23,459			356,939				28,738
	Current assets
	Cash at bank						5,314			5,314			10,504				10,504
	Other receivables						1,440			1,440			2,616				2,616
							_______			_______			_______				_______
							435,662			30,213			370,059				41,858
							_______			_______			_______				_______
	None of the Company's financial assets are past due or impaired.
	(iv) Gearing risk
	The Company's policy is to increase its exposure to equity markets through the judicious use of borrowings. When borrowings are invested in such markets, the effect is to magnify the impact on shareholders' funds of changes, both positive and negative, in the value of the portfolio. During the year the Company's borrowings were short-term loans, details of which can be found in note 12. The loans are carried at amortised cost, using the effective interest rate method in the financial statements.
	Management of the risk
	The Board imposes borrowing limits to ensure gearing levels are appropriate to market conditions and reviews these on a regular basis. Borrowings comprise fixed rate, revolving, and uncommitted facilities. The fixed rate facilities are used to finance opportunities at low rates and, the revolving and uncommitted facilities to provide flexibility in the short-term.

17.	Capital management policies and procedures
	The Company's capital management objectives are:
	to ensure that the Company will be able to continue as a going concern; and
	to maximise the income and capital return to its equity shareholders through an appropriate balance of equity capital and debt.  The policy is that debt should not exceed 25% of net assets.
	The Company's capital at 31 December comprises:
		2016	2015
		£'000	£'000
	Debt
	Borrowings under the multi-currency loan facility	27,974	29,853
	Borrowing under the three year loan facility	10,000	10,000
		_______	_______
		37,974	39,853
		_______	_______
		2016	2015
		£'000	£'000
	Equity
	Equity share capital	194,933	194,933
	Retained earnings and other reserves	201,095	134,499
		_______	_______
		396,028	329,432
		_______	_______
	Debt as a % of net assets{A}	9.59	12.10
		_______	_______
	{A} The calculation above differs from the AIC recommended methodology, where debt levels are shown net of cash and cash equivalents held.
	The Board, with the assistance of the Investment Manager monitors and reviews the broad structure of the Company's capital on an ongoing basis.  This review includes:
	the planned level of gearing, which takes account of the Investment Manager's views on the market;
	the need to buy back equity shares for cancellation or for holding in treasury, which takes account of the difference between the net asset value per Ordinary share and the Ordinary share price (ie the level of share price discount);
	the need for new issues of equity shares; and
	the extent to which revenue in excess of that which is required to be distributed should be retained.
	The Company's objectives, policies and processes for managing capital are unchanged from the preceding accounting period.

18.	Related party transactions and transactions with the Manager
	Fees payable during the year to the Directors are disclosed within the Directors' Remuneration Report in the published Annual Report. An amount of £6,750 (2015 - £nil) was payable at the year end in respect of Mr H Young's fees.
	Mr H Young is a director of Aberdeen Asset Management PLC, of which Aberdeen Private Wealth Management Limited ("APWM") is a subsidiary. Management, promotional activities and secretarial and administration services are provided by APWM with details of transactions during the year and balances outstanding at the year end disclosed in notes 5 and 6.
	Following a review during the year, a restructuring of management fee arrangements for the Company was agreed between the Board and the Manager, details of which can be found in note 5.

19.	Controlling party
	In the opinion of the Directors on the basis of shareholdings advised to them, the Company has no immediate or ultimate controlling party.

20.	Fair value hierarchy
	IFRS 13 'Fair Value Measurement' requires an entity to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making measurements. The fair value hierarchy has the following levels:
	Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
	Level 2: inputs other than quoted prices included within Level 1 that are observable for the assets or liability, either directly (ie as prices) or indirectly (ie derived from prices); and
	Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
	The financial assets and liabilities measured at fair value in the Balance Sheet are grouped into the fair value hierarchy as follows:
			Level 1	Level 2	Level 3	Total
	At 31 December 2016	Note	£'000	£'000	£'000	£'000
	Financial assets at fair value through profit or loss
	Quoted equities	a)	405,449	-	-	405,449
	Quoted bonds	b)	-	23,459	-	23,459
			_______	_______	_______	_______
	Net fair value		405,449	23,459	-	428,908
			_______	_______	_______	_______
			Level 1	Level 2	Level 3	Total
	At 31 December 2015	Note	£'000	£'000	£'000	£'000
	Financial assets at fair value through profit or loss
	Quoted equities	a)	328,201	-	-	328,201
	Quoted bonds	b)	-	28,738	-	28,738
			_______	_______	_______	_______
	Net fair value		328,201	28,738	-	356,939
			_______	_______	_______	_______
	a) Quoted equities
	The fair value of the Company's investments in quoted equities has been determined by reference to their quoted bid prices at the reporting date. Quoted equities included in Fair Value Level 1 are actively traded on recognised stock exchanges.
	b) Quoted bonds
	The fair value of the Company's investments in quoted bonds has been determined by reference to their quoted bid prices at the reporting date. Investments in quoted bonds are not considered to trade in active markets and accordingly the Company's holding in quoted bonds as at 31 December 2015 has been reclassified from Level 1 to Level 2.
	Fair value of financial assets
	The Directors are of the opinion that the fair value of other financial assets is equal to the carrying amounts in the Balance Sheet.
	Fair values of financial liabilities
	The fair value of borrowings as at the 31 December 2016 has been estimated at £38,033,000 (carrying value per Balance Sheet - £37,974,000) using a discounted cash flow valuation technique. At 31 December 2015 the fair value was £39,899,000 (carrying value amount per Balance Sheet - £39,853,000) which was the same as the carrying value due to the short term nature of the loans and the low interest rate environment. Under the fair value hierarchy in accordance with IFRS 13, these borrowings can be classified as Level 2.

Additional Notes:

The Annual Financial Report Announcement is not the Company's statutory financial statements. The above results for the year ended 31 December 2016 are an abridged version of the Company's full financial statements, which have been approved and audited with an unqualified report. The 2015 and 2016 statutory financial statements received unqualified reports from the Company's auditor and did not include any reference to matters to which the auditors drew attention by way of emphasis without qualifying the reports.  The financial information for 2015 is derived from the statutory financial statements for 2015 which have been lodged with the JFSC. The 2016 financial statements will be filed with the JFSC in due course.

The Annual Report will be posted to Shareholders in April and further copies may be obtained from the registered office, 1^st Floor, Sir Walter Raleigh House, 48 - 50 Esplanade, St Helier, Jersey JE2 3QB and on the Company's website* asian-income.co.uk.

Please note that past performance is not necessarily a guide to the future and that the value of investments and the income from them may fall as well as rise and may be affected by exchange rate movements.  Investors may not get back the amount they originally invested.

 

* Neither the content of the Company's website nor the content of any website accessible from hyperlinks on the Company's 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

29 March 2017

INVESTMENT PORTFOLIO - TEN LARGEST INVESTMENTS

As at 31 December 2016
			Valuation	Total	Valuation
			2016	assets{A}	2015{B}
Company	Industry	Country	£'000	%	£'000
HSBC Holdings
One of the world's largest banking and financial services institutions with global operations.  Its roots and the majority of its earnings derive from Asia and, after several poor acquisitions in Europe and the USA, it has been refocusing back to its origins.	Banks	Hong Kong	15,998	3.7	12,975
Venture Corporation
Provides contract manufacturing services to electronics companies.  The company's major segments include Printing & Imaging and Networking & Communications and it has been increasing its revenue contribution from Original Design Manufacturing.	Electronic Equipment, Instruments & Components	Singapore	15,438	3.6	12,648
Taiwan Semiconductor Manufacturing
As the world's largest pure-play semiconductor manufacturer, TSMC provides a full range of integrated foundry services for its clients, along with a robust balance sheet and good cash generation that enables it to keep investing in cutting-edge technology and innovation.	Semiconductors & Semiconductor Equipment	Taiwan	14,033	3.2	8,500
Oversea-Chinese Banking Corporation
A well-managed Singapore bank with a strong capital base and impressive cost-to-income ratio, which has recently acquired a mid-sized bank in Hong Kong.  In addition to its core banking activities it has sizeable wealth management and life assurance divisions.	Banks	Singapore	14,013	3.2	12,576
Singapore Telecommunications
A regional telecommunications company, with a combined mobile subscriber base of more than 285 million customers from its own operations in Singapore and Australia, and regional associates in India, Philippines, Thailand, Indonesia, Pakistan and Bangladesh.	Diversified Telecommunication Services	Singapore	13,866	3.2	11,936
Taiwan Mobile
The leading provider of cellular telecommunications services in Taiwan.  Although predominantly a wireless network operator, the company also sells and leases cellular telephony equipment.	Wireless Telecommunication Services	Taiwan	12,915	3.0	10,183
Jardine Cycle & Carriage
While the bulk of its earnings are from its Indonesian unit Astra International, the company has been diversifying in Southeast Asia, with stakes in Thailand's Siam City Cement and Vietnam's REE Corp. Astra International has leading positions in the two- and four-wheeler market, palm oil sector and heavy equipment industry.	Distributors	Singapore	12,857	3.0	8,778
China Mobile
The number one operator in China providing cellular telecommunication services, boasting both a strong balance sheet and healthy cash flows.	Wireless Telecommunication Services	China	11,748	2.7	9,799
Tesco Lotus Retail Growth
Anchored by Thailand's largest hypermarket operator Tesco Lotus, the fund invests in retail malls and holds a solid portfolio, consisting of a majority of freehold assets. It also offers an attractive yield and stands to benefit from the recovery in Thai retail spending.	Equity Real Estate Investment Trusts	Thailand	11,487	2.6	7,498
Commonwealth Bank of Australia
A leading Australian bank with a focus on domestic retail banking, underpinned by solid IT infrastructure which has helped differentiate its products. Its earnings outlook has improved, along with diminished regulatory risk, benign impairment cycle and re-pricing initiatives.	Banks	Australia	11,364	2.6	8,446
Top ten investments			133,719	30.8

CONSOLIDATED INVESTMENT PORTFOLIO - OTHER INVESTMENTS

As at 31 December 2016
			Valuation	Total	Valuation
			2016	assets{A}	2015{B}
Company	Sector	Country	£'000	%	£'000
Spark New Zealand	Diversified Telecommunication Services	New Zealand	10,807	2.5	7,532
Australia & New Zealand Banking Group	Banks	Australia	10,564	2.4	8,167
Swire Pacific (Class A and Class B shares)	Real Estate Management & Development	Hong Kong	10,516	2.4	10,487
AusNet Services	Electric Utilities	Australia	10,390	2.4	10,952
Heineken Malaysia	Beverages	Malaysia	10,276	2.4	-
Singapore Technologies Engineering	Aerospace & Defence	Singapore	10,250	2.4	8,206
Telstra	Diversified Telecommunication Services	Australia	10,142	2.3	9,399
Hana Microelectronics	Electronic Equipment, Instruments & Components	Thailand	9,748	2.2	5,074
Scentre Group	Equity Real Estate Investment Trusts	Australia	9,354	2.2	6,051
DBS Group	Banks	Singapore	9,261	2.1	7,312
Top twenty investments			235,027	54.1
Electricity Generating	Independent Power and Renewable Electricity Producers	Thailand	8,927	2.1	7,969
British American Tobacco Malaysia	Tobacco	Malaysia	8,760	2.0	9,733
United Overseas Bank	Banks	Singapore	8,477	2.0	8,601
Samsung Electronics (Preference share)	Technology Hardware Storage & Peripherals	South Korea	7,868	1.8	-
Bank OCBC NISP{E}	Banks	Indonesia	7,211	1.7	5,831
Amada Holdings	Machinery	Japan	6,956	1.6	-
Siam Cement{C}	Construction Materials	Thailand	6,832	1.6	5,258
Giordano International	Speciality Retail	Hong Kong	6,825	1.6	6,667
Viva Energy REIT	Equity Real Estate Investment Trusts	Australia	6,798	1.6	-
Westpac Banking Corporation	Banks	Australia	6,684	1.5	-
Top thirty investments			310,365	71.6
Rio Tinto{D}	Metals & Mining	Australia	6,633	1.5	4,157
Advanced Information Services	Wireless Telecommunication Services	Thailand	6,585	1.5	4,666
Far East Hospitality Trust	Equity Real Estate Investment Trusts	Singapore	6,229	1.4	5,850
Shopping Centres Australasia	Equity Real Estate Investment Trusts	Australia	6,063	1.4	4,503
Kingmaker Footwear	Textiles, Apparel & Luxury Goods	Hong Kong	5,935	1.4	3,851
Keppel REIT	Equity Real Estate Investment Trusts	Singapore	5,770	1.3	4,343
CDL Hospitality Trusts	Equity Real Estate Investment Trusts	Singapore	5,740	1.3	4,864
Indo Tambangraya Megah	Oil, Gas & Consumable Fuels	Indonesia	5,601	1.3	1,564
Standard Chartered	Banks	United Kingdom	5,261	1.2	4,469
Hang Lung Properties	Real Estate Management & Development	Hong Kong	5,123	1.2	-
Top forty investments			369,305	85.1
Okinawa Cellular Telephone	Wireless Telecommunication Services	Japan	5,006	1.2	3,066
Green Dragon Gas{E}	Oil, Gas & Consumable Fuels	China	4,916	1.1	4,961
ICICI Bank{E}	Banks	India	4,549	1.0	3,826
Star Media	Media	Malaysia	4,469	1.0	4,037
Yum China	Hotels, Restaurants & Leisure	China	4,333	1.0	-
Texwinca	Textiles, Apparel & Luxury Goods	Hong Kong	4,284	1.0	5,744
BEC World	Media	Thailand	4,232	1.0	4,897
DFCC Bank{E}	Banks	Sri Lanka	4,232	1.0	4,285
ASX	Capital Markets	Australia	4,221	1.0	-
South32{D}	Metals & Mining	Australia	4,023	0.9	1,990
Top fifty investments			413,570	95.3
Japan Tobacco	Tobacco	Japan	3,863	0.9	-
Hong Leong Finance	Consumer Finance	Singapore	3,680	0.8	3,406
Westfield Corporation	Equity Real Estate Investment Trusts	Australia	2,794	0.6	4,131
Yingde Gases{E}	Chemicals	China	2,551	0.6	2,947
Lafarge Malaysia	Construction Materials	Malaysia	2,212	0.5	2,437
Ratchaburi Electricity	Independent Power and Renewable Electricity Producers	Thailand	238	0.1	3,029
Total value of investments			428,908	98.8
Net current assets{F}			5,094	1.2
Total assets{A}			434,002	100.0
{A}See definition in published Annual Report.
{B}Purchases and/or sales effected during the year may result in 2015 and 2016 values not being directly comparable.
{C}Holding includes investment in common and non-voting depositary receipt lines.
{D}Incorporated in and listing held in United Kingdom.
{E}Corporate bonds.
{F}Excludes bank loans of £27,974,000.

 

END

 

 

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