Half Yearly Results

RNS Number : 0200W

Aberdeen Asian Income Fund Limited

13 August 2015

ABERDEEN ASIAN INCOME FUND LIMITED

UNAUDITED HALF YEARLY REPORT

FOR THE SIX MONTHS ENDED 30 JUNE 2015

Interim Board Report - Chairman's Statement

Background

I am disappointed to report that the Company's net asset value total return fell 2.4% in sterling terms over the six months to 30 June 2015, compared with the MSCI AC Asia Pacific ex Japan Index (the "Index"), which returned 2.6%. Against this backdrop, the Ordinary share price total return fell by 2.1% with the premium over net asset value per Ordinary share widening slightly from 1.0% at the start of the year to 1.3% at the period end. At the time of writing there is a small discount of 1.25%. Over the longer term performance is better; for the last five years, your Company's NAV total return was 57.2% versus the Index return of 38.9%.

Overview

It was a challenging first half for Asian equities against the backdrop of slowing economic activity in the region. Headlines were dominated by developments in China, where a sizzling rally in domestic A-shares had a spill-over effect on mainland stocks listed on the Hong Kong exchange. Despite large market swings towards the period-end, Chinese and Hong Kong equities far outstripped their peers in the rest of Asia. Initially, sentiment was lifted by hopes of further stimulus and prospects of increased fund flows following various initiatives to improve investment links across the border. Beijing continued to lower benchmark rates and lenders' reserve ratios, after its economic growth missed official targets for the first time in nearly two decades. However, stocks later retreated amid a crackdown on margin trading. On the other hand, Indonesia was one of the worst-performing markets, falling sharply as slow progress over reform, coupled with high borrowing costs, sluggish commodities demand and currency weakness, weighed on local equities. Other commodity exporters, including Australia and Malaysia, saw their currencies decline to multi-year lows against sterling as crude oil and iron ore prices continued to languish. The weakness of the ringgit had an especially adverse effect on relative performance, given the Company's larger-than-benchmark exposure to Malaysia.

The evolving expectations surrounding the timing of a US Federal Reserve interest rate hike also continued to be a key driver of sentiment. At the beginning of the year, weaker-than-expected economic growth in the US pushed back expectations of the rate hike. But at the time of writing, growth appears to be back on track, and there is now a greater probability that the Fed will act to normalise monetary policy in the second half of the year. In Asia, cheaper crude oil and receding inflation allowed central banks to continue loosening policy, resulting in a string of regional interest rate cuts in response to still-soft economic data. In Japan, a slew of government stimulus measures, along with hopes of better corporate earnings, led the stock market to 15-year highs despite a still-sputtering economy. However, the weak yen, caused in part by central bank engineering, eroded returns in sterling terms. Towards the period-end, jitters intensified over the Greek debt talks, as the nation closed its banks and imposed capital controls after negotiations with its creditors collapsed.

Performance Review

The Company's small exposure to China, which makes up almost a quarter of the Index, was the key driver of underperformance over the period, as overseas-listed Chinese stocks were buoyed by the tide of speculative retail buying in the A-share market. Your Investment Manager maintained the underweight position, on the conviction that market gains were liquidity-driven and unsupported by improved corporate and economic fundamentals. The Chinese stock market plunge towards the end of the period appeared to vindicate this view. At the time of writing, Beijing has responded to the rout by cutting interest rates, relaxing margin lending rules, and banning major shareholders from reducing their stakes in listed companies. The country's largest state-owned banks have reportedly provided over US$200 billion to stem market declines. Despite these heavy-handed measures, stocks have continued to slide: notably, major indices saw their biggest one-day drop in more than eight years in late July. Your Investment Manager views the recent sell-off as healthy in the light of the overheated market, and remains focused on investing in financially sound companies with solid fundamentals and a commitment to shareholder value, regardless of market gyrations.

The large exposure to Singapore, which underperformed its Asian peers owing to disappointing economic growth and rising cost pressures, was another detractor from relative return. The stagnating property market, which is a large Index constituent, is not expected to recover until the government relaxes its hard-hitting property cooling measures. The financial sector, which the Company is exposed to via its holdings in lenders DBS Group, Bank OCBC and United Overseas Bank, also lagged on the back of concerns over slowing loan growth. The banks' regional exposure proved a drag, given the rising credit costs in Asia. However, all three lenders are well-capitalised, conservatively managed, and poised to benefit from rising interest rates.

Regional exposure also hampered the performance of Singapore-listed Jardine Cycle & Carriage (JC&C). Its core business, Indonesian conglomerate Astra International, was weighed down by domestic macroeconomic weakness, as well as heightened competition in the vehicle distribution segment. While there are short-term challenges, JC&C's management has been investing for the long term - its recent acquisition of a stake in Siam City Cement will give it access to exciting markets such as Cambodia and Myanmar. JC&C is attractively valued and offers a yield of 3.8%.

On the other hand, we were pleased to see several holdings make good progress turning around their businesses after recent challenges. In Hong Kong, both Giordano and Texwinca posted encouraging results following the restructuring of their Chinese businesses. Giordano was lifted by robust sales growth in mainland China, Hong Kong and Taiwan, while Texwinca's retail segment returned to profitability. Although the retail outlook remains challenging, both companies have cash generative businesses with healthy balance sheets. Texwinca's management proposed to pay out 100% of its earnings as dividends this year, which translates to a yield of 7%, whereas Giordano continues to offer a 6% yield.

Australian insurer QBE also aided performance, as the new management and board brought renewed focus to the company, restructuring its balance sheet, strengthening its capital base and divesting non-core businesses. Management remains committed to addressing the weakness in its North American business, and has flagged a potential uplift in dividends.

Turning to portfolio activity, the Company received shares in miner South32 via an in-specie distribution from its holding in BHP Billiton. Your Investment Manager likes South32 for its diversified commodities exposure, potential to extend the lifespan of its mines, and its cost reduction efforts. While the company is not expected to pay significant dividends in the near term, management appears committed to returning excess cash to shareholders. The small position in the company should contain risk while giving the portfolio access to the upside potential from capital management. Your Investment Manager also added to the position in Yingde Gases bonds, along with Hong Kong's Kingmaker Footwear Holdings, Giordano and Texwinca.

Against this, Singapore Post was sold following a solid run, as its dividend yield no longer appeared attractive. The Investment Manager took profits from China Mobile, which benefited from the rally in the domestic equity market, but continues to face challenges migrating users to its 4G network. Positions in other holdings, such as DFCC Bank Bonds, OCBC, UOB, Taiwan Semiconductor, and POS Malaysia were also pared.

Dividend

On 9 July 2015, your Board declared a second quarterly interim dividend of 2.0p per Ordinary share in respect of the year ending 31 December 2015, which will be paid on 21 August 2015 to shareholders on the register on 17 July 2015. The first two quarterly dividends, covering the six months to 30 June 2015 therefore total 4.0p (2014 - 3.6p). As indicated at the time of the first and second interim dividend announcements, in the absence of unforeseen circumstances, the Board expects to pay three interim dividends of 2.0p followed by a fourth interim dividend of at least 2.0p in respect of the year ending 31 December 2015 (2014: four quarterly dividends paid totalling 8.0p).

Looking ahead, your Investment Manager expects earnings growth to be in the low single-digits this year. While the balance sheets of your Company's holdings remain resilient, and dividend payout ratios are generally being held steady, the muted outlook for earnings growth means we are unlikely to see a significant increase in absolute dividends in the year ahead.

Gearing and Share Issuance

During the period the Company entered into a new three-year £10,000,000 term facility (the "Facility") with Scotiabank Europe PLC ("Scotia"). The Facility is in addition to the existing £30,000,000 multicurrency revolving facility with Scotiabank (Ireland) Limited which is due to mature in April 2017. £10,000,000 has been drawn down under the Facility and fixed for three years to March 2018 at an all-in rate of 2.2175%. The Company's total gearing at the period end amounted to the equivalent of £38.0 million or 7.6% of the net assets.

Your Company's Articles of Association authorise the Directors to allot shares for cash at a premium to NAV and shareholders have authorised the issuance of up to 10% of the Company's issued capital without pre-emption rights applying. No new shares were issued in the six months to 30 June 2015. However, subsequent to the period end a total of 500,000 new Ordinary shares were issued at a premium to NAV per Ordinary share in accordance with the Board's guidelines to the Investment Manager. When issuing shares at a premium, there is a modest uplift in NAV for the existing shareholders and the Directors will continue with share issues as and when there is demand from the market and a premium rating attaching to the shares. There are a number of constraints to such issuance, including the overriding Listing Rule requirement not to issue more than 10% of the outstanding equity in any rolling 12 month period. Therefore, it is possible that there may be periods when the Company is prevented from issuing new shares.

Directorate

As part of the Board's on-going plans for orderly succession we were delighted to appoint Ms Krystyna Nowak as an independent non-executive Director of the Company with effect from the conclusion of the Annual General Meeting on 7 May 2015. Krystyna is Managing Director of the Board Practice and a Member of the Executive Management Team at Norman Broadbent and will bring useful international and board governance experience. On the same date Dr Ana Armstrong retired from the Board and I would like to take this opportunity to reiterate the Board's thanks to Ana for her considerable contribution to the Company since its launch in 2005.

Outlook

The impending US interest rate hike continues to loom large, especially because dividend-paying stocks may find less favour with investors as a result. Higher-yielding stocks have undeniably lost some of their lustre compared to a few years ago, when it appeared that near-zero interest rates would be part of the financial landscape indefinitely. However, the normalisation of monetary policy should lead to a long-overdue realignment between company fundamentals and asset prices. This is never a bad thing: China is a case in point.

Forecasts for Asian economic growth have continued to slide lower, amid slowing demand from China, sluggish exports and rising household debt. That said, the region is still expected to be the engine of global growth in the years to come, with economic expansion underpinned by young populations with increasing wealth. Improving government finances mean that Asia is better placed to withstand any short-term turmoil. While corporate earnings growth in the region is likely to remain muted in the near term, your Company's holdings, selected for their solid balance sheets, sustainable businesses and commitment to shareholder value over the longer term, position them to produce good dividend growth regardless of the interest rate environment.

I look forward to reporting to you again with the Annual Report for the year to 31 December 2015, which will be issued in April 2016. In the meantime, shareholders can find regular updates from your Investment Manager, and copies of all Stock Exchange announcements on your Company's website www.asian-income.co.uk. Also on the website there are NAV and share price feeds which are updated on a daily basis.

Peter Arthur

Chairman

13 August 2015

Interim Board Report - Disclosures

Principal Risk Factors

The principal risks and uncertainties affecting the Company are set out in detail on pages 3 and 4 of the Annual Report and Financial Statements for the year ended 31 December 2014 and have not changed.

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

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

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

The risks can be summarised under the following headings:

Investment Risk
Income and Dividend Risk
Discount Volatility
Foreign Exchange Risk
Operational Risk
Regulatory Risk

An explanation of other risks relating to the Company's investment activities, specifically market price, liquidity and credit risk, and a note of how these risks are managed, are contained in note 16 on pages 51 to 57 of the Annual Report for the year ended 31 December 2014.

Going Concern

In accordance with the Financial Reporting Council's Guidance on Risk Management, Internal Control and Related Financial and Business Reporting issued in September 2014, the Directors have undertaken a rigorous review and consider both that there are no material uncertainties and that the adoption of the going concern basis of accounting is appropriate. The Company's assets consist primarily of a diverse portfolio of listed securities which, in most circumstances, are realisable within a very short timescale. Therefore, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the Half Yearly Report.

Directors' Responsibility Statement

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

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

the Interim Board Report includes a fair review of the information required by 4.2.7R and 4.2.8R of the Financial Conduct Authority's Disclosure and Transparency Rules;

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

Peter Arthur

Chairman

13 August 2015

Condensed Statement of Comprehensive Income

Six months ended

Year ended

30 June 2015

30 June 2014

31 December 2014

(unaudited)

(audited)

Revenue

Capital

Total

Revenue

Capital

Total

Revenue

Capital

Total

£'000

Dividend income

9,967

9,259

17,254

Bond interest

1,562

953

2,072

Deposit interest

(Losses)/gains on financial assets at fair value through profit or loss

(17,400)

6,213

15,582

Currency gains/(losses)

______

442

______

442

______

452

______

452

______

(1,631)

______

(1,631)

______

11,534

______

(16,958)

______

(5,424)

______

10,214

______

6,665

______

16,879

______

19,333

______

13,951

______

33,284

______

Expenses

Investment management fee (note 10)

(777)

(1,166)

(1,943)

(726)

(1,088)

(1,814)

(1,506)

(2,259)

(3,765)

Other operating expenses (note 5)

(515)

______

(9)

______

(524)

______

(549)

______

(549)

______

(994)

______

(994)

______

Profit/(loss) before finance items and taxation

10,242

(18,133)

(7,891)

8,939

5,577

14,516

16,833

11,692

28,525

Finance items

Finance costs

(100)

______

(150)

______

(250)

______

(49)

______

(74)

______

(123)

______

(112)

______

(169)

______

(281)

______

Profit/(loss) before tax

10,142

(18,283)

(8,141)

8,890

5,503

14,393

16,721

11,523

28,244

Tax expense

(458)

______

(14)

______

(472)

______

(403)

______

(403)

______

(737)

______

(17)

______

(754)

______

Profit/(loss) for the period (note 3)

9,684

______

(18,297)

______

(8,613)

______

8,487

______

5,503

______

13,990

_____

15,984

______

11,506

______

27,490

______

Earnings per Ordinary share (pence) (note 3)

4.98

______

(9.41)

______

(4.43)

______

4.38

______

2.84

______

7.22

_____

8.24

______

5.93

______

14.17

______

The Company does not have any income or expense that is not included in profit/(loss) for the period, and therefore the "Profit/(loss) for the period" is also the "Total comprehensive income for the period".

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

All of the profit/(loss) and total comprehensive income is attributable to the equity holders of Aberdeen Asian Income Fund Limited. There are no non-controlling interests.

Condensed Balance Sheet

		As at	As at	As at
		30 June 2015	31 December 2014	30 June 2014
		(unaudited)	(audited)	(unaudited)
	Notes	£'000	£'000	£'000
Non-current assets
Investments held at fair value through profit or loss		402,431 ______	410,259 ______	388,117 ______

Current assets
Cash and cash equivalents		2,266	3,671	3,774
Other receivables		2,090 ______	1,196 ______	1,808 ______
		4,356 ______	4,867 ______	5,582 ______

Current liabilities
Bank loans	8	(27,987)	(29,670)	(15,481)
Other payables		(1,494) ______	(588) ______	(556) ______
		(29,481) ______	(30,258) ______	(16,037) ______
Net current liabilities		(25,125)	(25,391)	(10,455)

Non-current liabilities
Bank loan	8	(10,000) ______	- ______	- ______
Net assets		367,306 ______	384,868 ______	377,662 ______


Stated capital and reserves
Stated capital	9	194,533	194,533	194,183
Capital redemption reserve		1,560	1,560	1,560
Capital reserve		158,166	176,463	170,114
Revenue reserve		13,047 ______	12,312 ______	11,805 ______
Equity shareholders' funds		367,306 ______	384,868 ______	377,662 ______


Net asset value per Ordinary share (pence)	4	188.81 ______	197.84 ______	194.49 ______

Condensed Statement of Changes in Equity

Six months ended 30 June 2015 (unaudited)
		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
Loss for the period	-	-	-	-	(8,613)	(8,613)
Transferred to retained earnings from capital reserve [A]	-	-	(18,297)	-	18,297	-
Transferred from retained earnings to revenue reserve	-	-	-	9,684	(9,684)	-
Dividends paid (note 6)	- ______	- ______	- ______	(8,949) ______	- ______	(8,949) ______
Balance at 30 June 2015	194,533 ______	1,560 ______	158,166 ______	13,047 ______	- ______	367,306 ______

Six months ended 30 June 2014 (unaudited)
		Capital
	Stated	redemption	Capital	Revenue	Retained
	capital	reserve	reserve	reserve	earnings	Total
	£'000	£'000	£'000	£'000	£'000	£'000

Opening balance	193,733	1,560	164,176	11,648	-	371,117
Issue of Ordinary shares (note 9)	450	-	435	-	-	885
Profit for the period	-	-	-	-	13,990	13,990
Transferred from retained earnings to capital reserve [A]	-	-	5,503	-	(5,503)	-
Transferred from retained earnings to revenue reserve	-	-	-	8,487	(8,487)	-
Dividends paid (note 6)	- ______	- ______	- ______	(8,330) ______	- ______	(8,330) ______
Balance at 30 June 2014	194,183 ______	1,560 ______	170,114 ______	11,805 ______	- ______	377,662 ______

Year ended 31 December 2014 (audited)
		Capital
	Stated	redemption	Capital	Revenue	Retained
	capital	reserve	reserve	reserve	earnings		Total
	£'000	£'000	£'000	£'000	£'000		£'000

Opening balance	193,733	1,560	164,176	11,648	-		371,117
Issue of Ordinary shares (note 9)	800	-	781	-	-		1,581
Profit for the year	-	-	-	-	27,490		27,490
Transferred from retained earnings to capital reserve [A]	-	-	11,506	-	(11,506)		-
Transferred from retained earnings to revenue reserve	-	-	-	15,984	(15,984)		-
Dividends paid (note 6)	- ______	- ______	- ______	(15,320) ______	- ______		(15,320) ______
Balance at 31 December 2014	194,533 ______	1,560 ______	176,463 ______	12,312 ______	- ______		384,868 ______
[A] Represents the capital profit/(loss) attributable to equity shareholders per the Condensed Statement of Comprehensive Income.
The stated capital in accordance with Companies (Jersey) Law 1991 Article 39A is £259,877,000 (30 June 2014 - £259,181,000; 31 December 2014 - £259,877,000).

Condensed Cash Flow Statement

	Six months ended	Six months ended	Year ended
	30 June 2015	30 June 2014	31 December 2014
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
Operating activities
(Loss)/profit for the period	(8,613)	13,990	27,490
Add back finance costs	250	123	281
Add back taxation suffered	472	403	754
Non cash stock dividends	(1,077)	-	(1,643)
Losses/(gains) on investments held at fair value through profit or loss	17,400	(6,213)	(15,582)
Net currency (gains)/losses	(442)	(452)	1,631
Increase in other receivables	(893)	(775)	(228)
Increase/(decrease) in other payables	308 ______	(300) ______	(263) ______
Net cash inflow from operating activities before finance items and taxation	7,405	6,776	12,440
Loan interest paid	(235)	(130)	(294)
Overseas taxation suffered	(472) ______	(453) ______	(739) ______
Net cash inflow from operating activities	6,698	6,193	11,407
Investing activities
Purchases of investments	(20,257)	(20,356)	(56,266)
Sales of investments	12,579 ______	19,005 ______	43,786 ______
Net cash outflow from investing activities	(7,678) ______	(1,351) ______	(12,480) ______
Financing activities
Proceeds from issue of Ordinary shares	-	885	1,581
Dividends paid	(8,949)	(8,330)	(15,320)
Loans repaid	(1,450)	-	-
Loans drawn down	10,000 ______	2,965 ______	14,927 ______
Net cash (outflow)/inflow from financing activities	(399) ______	(4,480) ______	1,188 ______
Net (decrease)/increase in cash and cash equivalents	(1,379) ______	362 ______	115 ______

Analysis of changes in cash during the period
Opening balance	3,671	3,463	3,463
(Decrease)/increase in cash as above	(1,379)	362	115
Effect of foreign currency exchange rate changes	(26) ______	(51) ______	93 ______
Cash and cash equivalents at the end of the period	2,266 ______	3,774 ______	3,671 ______

Notes to the Financial Statements

For the period ended 30 June 2015

1.	Accounting policies - basis of preparation
	The Annual Report is prepared in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB), and interpretations issued by the International Financial Reporting Interpretations Committee of the IASB (IFRIC). The condensed Half Yearly Report has been prepared in accordance with International Accounting Standards (IAS) 34 - 'Interim Financial Reporting'. It has also been prepared using the same accounting policies applied for the year ended 31 December 2014.

	At the date of authorisation of these financial statements, the following Standard was in issue but not yet effective:
	IFRS 9 - Financial Instruments: Classification and Measurement (current proposed effective date for implementation 1 January 2018).

	The Directors do not anticipate that the adoption of the above Standard will have a material impact on the financial statements of the Company.

	The financial statements have been prepared on a going concern basis. In accordance with the Financial Reporting Council's guidance on 'Going Concern and Liquidity Risk' the Directors have undertaken a review of the Company's assets which primarily consist of a diverse portfolio of listed equity shares which, in most circumstances, are realisable within a very short timescale.

	Financial instruments
	Under IFRS 13 the fair value is the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants at the measurement date.
	Investments held at fair value through profit or loss are valued at their quoted bid prices.

Segment information

For management purposes, 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.

		Six months ended	Six months ended	Year ended
		30 June 2015	30 June 2014	31 December 2014
3.	Earnings per Ordinary share	(unaudited)	(unaudited)	(audited)
		p	p	p
	Revenue return	4.98	4.38	8.24
	Capital return	(9.41) ______	2.84 ______	5.93 ______
	Total return	(4.43) ______	7.22 ______	14.17 ______

	The figures above are based on the following:

		Six months ended	Six months ended	Year ended
		30 June 2015	30 June 2014	31 December 2014
		(unaudited)	(unaudited)	(audited)
		£'000	£'000	£'000
	Revenue return	9,684	8,487	15,984
	Capital return	(18,297) ______	5,503 ______	11,506 ______
	Total return	(8,613) ______	13,990 ______	27,490 ______

	Weighted average number of Ordinary shares in issue	194,533,389 ______	193,824,825 ______	194,024,759 ______

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

		As at	As at	As at
		30 June 2015	30 June 2014	31 December 2014
	Basic	(unaudited)	(unaudited)	(audited)
	Attributable net assets (£'000)	367,306	377,662	377,662
	Number of Ordinary shares in issue	194,533,389	194,183,389	194,533,389
	Net asset value per Ordinary share (p)	188.81	194.49	194.14

		Six months ended	Six months ended	Year ended
		30 June 2015	30 June 2014	31 December 2014
		(unaudited)	(unaudited)	(audited)
5.	Other operating expenses (revenue)	£'000	£'000	£'000
	Directors' fees	80	80	160
	Secretarial and administration fees	66	65	131
	Promotional activities	116	116	224
	Auditor's remuneration
	- statutory audit	13	16	29
	- interim accounts review	5	5	5
	Custodian charges	74	60	125
	Other	161 ______	207 ______	320 ______
		515 ______	549 ______	994 ______

	During the period £9,000 was also charged to capital in respect of 60% of the costs incurred in fees associated with the new bank loan facility, in accordance with the Company's allocation policy for finance costs.

		Six months ended	Six months ended	Year ended
		30 June 2015	30 June 2014	31 December 2014
		(unaudited)	(unaudited)	(audited)
6.	Dividends on equity shares	£'000	£'000	£'000
	Amounts recognised as distributions to equity holders in the period:
	Second interim dividend for 2014 - 1.80p	-	-	3,495
	Third interim dividend for 2014 - 1.80p	-	-	3,495
	Fourth interim dividend for 2014 - 2.60p (2013 - 2.50p)	5,058	4,843	4,843
	First interim dividend for 2015 - 2.00p (2014 - 1.80p)	3,891 ______	3,487 ______	3,487 ______
		8,949 ______	8,330 ______	15,320 ______

	A second interim dividend of 2.00p for the year to 31 December 2015 will be paid on 21 August 2015 to shareholders on the register on 17 July 2015. The ex-dividend date was 16 July 2015.

7.	Transaction costs
	During the period expenses were incurred in acquiring or disposing of investments classified as fair value through profit or loss. These have been expensed through capital and are included within (losses)/gains on financial assets at fair value through profit or loss in the Condensed Statement of Comprehensive Income. The total costs were as follows:

		Six months ended	Six months ended	Year ended
		30 June 2015	30 June 2014	31 December 2014
		(unaudited)	(unaudited)	(audited)
		£'000	£'000	£'000
	Purchases	20	24	122
	Sales	21 ______	36 ______	66 ______
		41 ______	60 ______	188 ______

8.	Bank loans
	In April 2014, the Company entered into an unsecured three year £30 million multi currency facility agreement with Scotiabank (Ireland) Limited which replaced a £15 million secured facility. At the period end approximately USD 11.0 million, HKD 252.8 million and £250,000 equivalent to £28.0 million was drawn down from the £30 million facility. The interest rates attributed to the USD, HKD and sterling loans at the period end were 1.137%, 1.188% and 1.460% respectively.

	In March 2015, the Company entered into a new fixed three year £10 million credit facility with Scotiabank Europe PLC at an all-in interest rate of 2.2175% which will mature on 2 March 2018.

		30 June 2015		30 June 2014		31 December 2014
9.	Stated capital	Number	£'000	Number	£'000	Number	£'000
	Ordinary shares of no par value
	Authorised	Unlimited	Unlimited	Unlimited	Unlimited	Unlimited	Unlimited

	Issued and fully paid
	Balance brought forward	194,533,389	194,533	193,733,389	193,733	193,733,389	193,733
	Shares issued in the period	- ______	- ______	450,000 ______	450 ______	800,000 ______	800 ______
		194,533,389 ______	194,533 ______	194,183,389 ______	194,183 ______	194,533,389 ______	194,533 ______

	No shares were issued during the period (30 June 2014 - 450,000 shares for a net receipt of £885,000; 31 December 2014 - 800,000 shares for a net receipt of £1,581,000).

	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.

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

	The management fee is payable monthly in arrears based on an annual amount of 1% of the net asset value of the Company valued monthly. During the period £1,943,000 (30 June 2014 - £1,814,000; 31 December 2014 - £3,765,000) of management fees were paid and payable, with a balance of £637,000 (30 June 2014 - £309,000; 31 December 2014 - £322,000) being payable to AAM Asia at the period end.

	The company secretarial and administration fee is based on an annual amount of £133,000 (30 June 2014 - £131,000; 31 December 2014 - £131,000), increased annually in line with any increases in RPI, payable quarterly in arrears. During the period £66,000 (30 June 2014 - £65,000; 31 December 2014 - £131,000) of fees were paid and payable, with a balance of £33,000 (30 June 2014 - £33,000; 31 December 2014 - £33,000) being payable to APWM at the period end.

	The promotional activities fee is based on a current annual amount of £250,000 (30 June 2014 - £215,000), payable quarterly in arrears. During the period £116,000 (30 June 2014 - £116,000) of fees were earned, with a balance of £63,000 (30 June 2014 - £54,000) being payable to APWML at the period end.

11.	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 (i.e. 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 Condensed Balance Sheet are grouped into the fair value hierarchy as follows:

			Level 1	Level 2	Level 3	Total
	At 30 June 2015 (unaudited)	Note	£'000	£'000	£'000	£'000
	Financial assets at fair value through profit or loss
	Quoted equities	a)	371,774	-	-	371,774
	Quoted bonds	b)	30,657 ______	- ______	- ______	30,657 ______
	Total assets		402,431 ______	- ______	- ______	402,431 ______

			Level 1	Level 2	Level 3	Total
	At 30 June 2014 (unaudited)	Note	£'000	£'000	£'000	£'000
	Financial assets at fair value through profit or loss
	Quoted equities	a)	368,886	-	-	368,886
	Quoted bonds	b)	19,231 ______	- ______	- ______	19,231 ______
	Total assets		388,117 ______	- ______	- ______	388,117 ______

			Level 1	Level 2	Level 3	Total
	At 31 December 2014 (audited)	Note	£'000	£'000	£'000	£'000
	Financial assets at fair value through profit or loss
	Quoted equities	a)	384,972	-	-	384,972
	Quoted bonds	b)	25,287 ______	- ______	- ______	25,287 ______
	Total assets		410,259 ______	- ______	- ______	410,259 ______
	a) Quoted equities
	The fair value of the Company's investments in quoted equities have 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 corporate quoted bonds have been determined by reference to their quoted bid prices at the reporting date. Quoted corporate bonds included in Fair Value Level 1 are actively traded on recognised stock exchanges.

	c) Financial liabilities at amortised cost
	The fair value of the loan 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.

	The fair value of borrowings as at 30 June 2015 has been estimated at £38,049,000. At 30 June 2014 and 31 December 2014 the fair value was £15,481,000 and £29,670,000 respectively which was the same as the carrying values due to the short-term nature of the loans. These borrowings can be classified as Level 2 inputs.

12.	Events after the reporting period
	A further 500,000 Ordinary shares have been issued by the Company subsequent to the reporting period end at a consideration received, including transaction costs of £945,000. Following the share issue there were 195,033,389 Ordinary shares in issue.

13.	Half Yearly Financial Report
	The financial information for the six months ended 30 June 2015 and 30 June 2014 has not been audited.

14.	Approval
	This Half Yearly Financial Report was approved by the Board on 13 August 2015.

The Half Year Report will be posted to shareholders in late August 2015 and copies will be available on the Company's website (www.asian-income.co.uk*) or in hard copy format from the Company's registered office, Sir Walter Raleigh House, 48 - 50 Esplanade, St Helier, Jersey JE2 3QB.

*Neither the Company's website nor the content of any website accessible from hyperlinks on that website (or any other website) is (or is deemed to be) incorporated into, or forms (or is deemed to form) part of this announcement

Aberdeen Private Wealth Management Limited

Company Secretary

13 August 2015

Independent Review Report to Aberdeen Asian Income Fund Limited

Introduction

We have been engaged by the Company to review the condensed set of financial statements in the Half Yearly Financial Report for the six months ended 30 June 2015 which comprises the Condensed Statement of Comprehensive Income, the Condensed Balance Sheet, the Condensed Statement of Changes in Equity, the Condensed Cash Flow Statement and the related explanatory notes 1 to 14. We have read the other information contained in the Half Yearly Financial Report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

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

Directors' Responsibilities

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

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

Our Responsibility

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

Scope of Review

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

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the Half Yearly Financial Report for the six months ended 30 June 2015 is not prepared, in all material respects, in accordance with International Accounting Standard 34 and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Ernst & Young LLP

Jersey

Channel Islands

13 August 2015

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

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

Investment Portfolio

As at 30 June 2015

		Valuation	Total assets
Company	Country of activity	£'000	%
Oversea-Chinese Banking Corporation	Singapore	14,073	3.5
HSBC Holdings	Hong Kong	13,799	3.4
Singapore Telecommunications	Singapore	13,487	3.3
Venture Corporation	Singapore	11,757	2.9
Swire Pacific (Class A and Class B shares)	Hong Kong	11,205	2.7
Taiwan Mobile	Taiwan	10,497	2.6
China Mobile	China	10,414	2.6
Ausnet Services	Australia	10,252	2.5
Telstra	Australia	10,186	2.5
Canon	Japan	10,031 ______	2.5 ______
Top ten investments		115,701 ______	28.5 ______
United Overseas Bank	Singapore	9,991	2.5
British American Tobacco Malaysia	Malaysia	9,279	2.3
DBS Group	Singapore	8,946	2.2
Singapore Technologies Engineering	Singapore	8,883	2.2
Tesco Lotus Retail Growth	Thailand	8,829	2.2
Guinness Anchor	Malaysia	8,369	2.1
Yanlord Land Group [A]	China	8,324	2.0
Taiwan Semiconductor Manufacturing Corporation	Taiwan	8,302	2.0
Electricity Generating	Thailand	8,036	2.0
Commonwealth Bank of Australia	Australia	7,976 ______	2.0 ______
Top twenty investments		202,636 ______	50.0 ______
Keppel Corporation	Singapore	7,763	1.9
Jardine Cycle & Carriage [B]	Singapore	7,585	1.9
Australia & New Zealand Bank Group	Australia	7,420	1.8
BHP Billiton	Australia [C]	7,382	1.8
QBE Insurance Group	Australia	7,230	1.8
Giordano International	Hong Kong	7,175	1.8
Far East Hospitality Trust	Singapore	6,783	1.7
Woolworths	Australia	6,770	1.7
Advanced Information Services	Thailand	6,749	1.6
Texwinca Holdings	Hong Kong	6,485 ______	1.6 ______
Top thirty investments		273,978 ______	67.6 ______
Standard Chartered	United Kingdom	6,283	1.5
BEC World	Thailand	6,012	1.5
Spark New Zealand	New Zealand	5,942	1.5
Siam Cement [D]	Thailand	5,892	1.5
CDL Hospitality Trust	Singapore	5,890	1.5
Hana Microelectronics	Thailand	5,863	1.4
Bank OCBC NISP [A]	Indonesia	5,690	1.4
Scentre Group	Australia	5,360	1.3
Rio Tinto	Australia [C]	4,967	1.2
PetroChina	China	4,955 ______	1.2 ______
Top forty investments		330,832 ______	81.6 ______
Li & Fung	Hong Kong	4,935	1.2
Green Dragon Gas [A]	China	4,650	1.2
Star Media Group	Malaysia	4,529	1.1
Ascendas Hospitality Trust	Singapore	4,506	1.1
Shopping Centres Australasia	Australia	4,437	1.1
Yingde Gases [A]	China	4,323	1.1
DFCC Bank [A]	Sri Lanka	4,008	1.0
Westfield Corporation	Australia	3,871	1.0
Pos Malaysia	Malaysia	3,715	0.9
Hong Leong Finance	Singapore	3,697 ______	0.9 ______
Top fifty investments		373,503 ______	92.2 ______
CNOOC Ltd	China	3,692	0.9
ICICI Bank [A]	India	3,662	0.9
Keppel REIT	Singapore	3,657	0.9
Ratchaburi Electricity	Thailand	3,648	0.9
Indo Tambangraya Megah	Indonesia	3,401	0.8
South32	Australia [C]	3,260	0.8
Okinawa Cellular Telephone	Japan	3,076	0.8
Lafarge Malaysia	Malaysia	2,481	0.6
Kingmaker Footwear	Hong Kong	2,051 ______	0.5 ______
Total investments		402,431 ______	99.3 ______
Other net assets [E]		2,862 ______	0.7 ______
Total assets		405,293 ______	100.0 ______
A Corporate bonds.
B Holding includes investment in Ordinary shares and Rights.
C Incorporated in and listing held in United Kingdom.
D Holding includes investment in common and non-voting depositary receipt lines.
E Excludes bank loans of £37,987,000.

This information is provided by RNS

The company news service from the London Stock Exchange

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