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:

 

  1.    Investment Risk
  2.    Income and Dividend Risk
  3.    Discount Volatility
  4.    Foreign Exchange Risk
  5.    Operational Risk
  6.    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 ​​

Six months ended ​​

Year ended ​​

​

30 June 2015 ​​

30 June 2014 ​​

31 December 2014 ​​

​

(unaudited) ​​

(unaudited) ​​

(audited) ​​

​

Revenue

Capital

Total

Revenue

Capital

Total

Revenue

Capital

Total

​

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

Dividend income

9,967

-

9,967

9,259

-

9,259

17,254

-

17,254

Bond interest

1,562

-

1,562

953

-

953

2,072

-

2,072

Deposit interest

5

-

5

2

-

2

7

-

7

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

-

(17,400)

(17,400)

-

6,213

6,213

-

15,582

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

 

Condensed Cash Flow Statement

 

 

 

 

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.

 

 

 

 

​

​

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

______

 

 

 

 

​

​

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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