Interim Results

Henderson Far East Income Limited 02 May 2007 Page 1 of 10 2 May 2007 HENDERSON FAR EAST INCOME LIMITED Unaudited Results for the period ended 28 February 2007 Extracts from the Chairman's Statement This is my first statement as Chairman of your Company following the transfer of the assets of Henderson Far East Income Trust plc to this Company on 18 December 2006. This exercise was undertaken in order to increase the amount of distributable income and to improve investment flexibility. Shareholders hold the same number of shares in this Company as they did the former company. For legal reasons, the financial accounts can only show the activities of this Company since incorporation on 6 November 2006; however, performance figures show data since 31 August 2006, the last financial year end of the old company, thereby providing shareholders with a full comparison. Performance I am pleased to report that the performance of your Company has been strong. In the six months since 31 August 2006, your Company has produced a net asset value total return of 18.0% and a share price total return of 20.5%. This compares favourably with the FTSE All World Asia Pacific ex Japan Index which returned 15.2%. Dividends As explained in the Proposals Document relating to the transfer of assets to this Company, the cycle of dividends has changed. On 14 December 2006, the former Company paid a fourth interim dividend of 2.3p in respect of the year ended 31 August 2006 plus a special dividend of 8.5p per share, representing the accumulated undistributed revenue reserves and the aggregate distributable net revenue for the period from 1 September 2006 to 15 December 2006. Consequently, the first financial period for your Company is the ten months to 31 August 2007 and therefore only three interim dividends will be declared and these will be paid at the end of May, August and November 2007. Your Board has declared a first interim dividend of 2.75p, which is payable on 31 May 2007, and remains confident that it will be able to declare two further interim dividends of 2.75p each making a total for the nine month period of 8.25p, which is consistent with the forecast in the Proposals Document. - MORE - Page 2 of 10 HENDERSON FAR EAST INCOME LIMITED Unaudited Results for the period ended 28 February 2007 Board Sir Victor Garland, the Chairman of the former company, retired from the Board with the transfer of assets to the new company after 22 years' service. His contribution to the development of your company has been immense and we shall miss his guidance and wise counsel. Giles Weaver and Garth Milne also left the Board and their contributions will be equally missed. In their place I am pleased to welcome Chris Spencer, Richard Povey and David Mashiter, all of whom are Channel Island residents and have varied but relevant business backgrounds. Management Michael Watt, who managed the portfolio since 1990, stood down from the Board in December 2006 and as Portfolio Manager on his retirement from Henderson Global Investors on 2 February 2007. I am pleased to report that he has agreed to stay on as a Consultant to the Board. In his place, I am delighted to welcome Michael Kerley, who has been working with Michael Watt on the portfolio over the last two years. Savings Your Company aims to be an investment of choice for those looking to build an income portfolio. Investments can be made through Itshenderson, our Manager's investment service for private investors. Outlook We have adopted a cautious stance as we believe that Asian stock markets could experience increased volatility in the short term due to excess liquidity in the global financial markets. Any significant sell off would however represent an attractive buying opportunity particularly in sectors exposed to growth in domestic economies. We shall take advantage of these opportunities, if as we anticipate, the peak in the US interest rate cycle is reached and global growth slows in 2007. John Russell Chairman 1 May 2007 - MORE - Page 3 of 10 HENDERSON FAR EAST INCOME LIMITED Unaudited Results for the period ended 28 February 2007 Condensed Consolidated Income Statement for the period 6 November 2006 to 28 February 2007 (Unaudited) Period 6 November 2006 to 28 February 2007 Revenue Capital Total Note £'000 £'000 £'000 Investment income 2,926 - 2,926 Other income 235 - 235 Gains on investments held at fair value through profit or loss - 4,679 4,679 --------- --------- --------- Total income 3,161 4,679 7,840 Expenses Management fees (150) (150) (300) Other expenses (71) (71) (142) --------- --------- --------- Profit before finance costs and taxation 2,940 4,458 7,398 Finance costs (12) (12) (24) --------- --------- --------- Profit before taxation 2,928 4,446 7,374 Taxation (316) - (316) --------- --------- --------- Profit for the period 2,612 4,446 7,058 ====== ====== ====== Earnings per ordinary share (pence) 3 3.36 5.73 9.09 ====== ====== ====== The total column of this statement represents the total returns of the Group, 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 ('AIC'). All items in the above statement derive from continuing operations. All income is attributable to the equity holders of Henderson Far East Income Limited. There are no minority interests. The notes on pages 7 to 9 form an integral part of this condensed interim financial information. - MORE - Page 4 of 10 HENDERSON FAR EAST INCOME LIMITED Unaudited Results for the period ended 28 February 2007 Condensed Consolidated Statement of Changes in Equity for the period 6 November 2006 to 28 February 2007 (Unaudited) Period 6 November 2006 to 28 February 2007 Stated Capital Other Revenue Capital Capital Account Reserves Reserves Total £'000 £'000 £'000 £'000 £'000 Opening balance - - - - - Issue of shares 180,982 - - - 180,982 Issue share costs (499) - - - (499) Transfer to Distributable Reserves (180,483) 180,483 - - - Net profit from ordinary activities - - 4,446 2,612 7,058 ---------- ---------- --------- ---------- ----------- At 28 February 2007 - 180,483 4,446 2,612 187,541 ====== ====== ====== ====== ====== The notes on pages 7 to 9 form an integral part of this condensed interim financial information. - MORE - Page 5 of 10 HENDERSON FAR EAST INCOME LIMITED Unaudited Results for the period ended 28 February 2007 Condensed Consolidated Balance Sheet at 28 February 2007 (Unaudited) 28 February 2007 Note £'000 Non-current assets Investments held at fair value through profit or loss 178,528 Current assets Debtors 6,780 Cash 5,058 ----------- 11,838 ----------- Total assets 190,366 ----------- Current liabilities Bank overdraft 1,463 Other creditors 1,362 ----------- 2,825 ----------- Net assets 187,541 ====== Capital and reserves Stated Capital - Distributable reserve 6 180,483 Retained earnings: Other capital reserves 4,446 Revenue reserve 2,612 ----------- Total equity 187,541 ====== Net asset value per ordinary share (pence) 4 241.61 ====== The notes on pages 7 to 9 form an integral part of this condensed interim financial information. - MORE - Page 6 of 10 HENDERSON FAR EAST INCOME LIMITED Unaudited Results for the period ended 28 February 2007 Condensed Consolidated Cash Flow Statement for the period 6 November 2006 to 28 February 2007 (Unaudited) Period 6 November 2006 to 28 February 2007 £'000 Net cash inflow from operating activities 1,787 --------- Net cash inflow before use of financing 1,787 Net cash inflow from financing activities 2,061 --------- Increase in cash and cash equivalents 3,848 Exchange movements (253) --------- Cash and cash equivalents at the period end 3,595 ====== The notes on pages 7 to 9 form an integral part of this condensed interim financial information. - MORE - Page 7 of 10 HENDERSON FAR EAST INCOME LIMITED Unaudited Results for the period ended 28 February 2007 Notes to Condensed Consolidated Interim Financial Information: 1. General Information The entity is a closed ended company, registered as a no par value company under the Companies (Jersey) Law 1991. The Company was incorporated on 6 November 2006. Accordingly, the interim accounting period runs from 6 November 2006 to 28 February 2007 and there are no comparative figures. 2. Principal Accounting Policies a Basis of Preparation The condensed interim financial information for the period ended 28 February 2007 has been prepared in accordance with International Accounting Standards ('IAS') 34 'Interim Financial Reporting'. This condensed interim financial information where consistent with International Financial Reporting Standards ('IFRS') has also been prepared in accordance with the guidance set out in the Statement of Recommended Practice ('SORP') for Investment Trusts issued by the Association of Investment Companies ('AIC') as revised in December 2005. The principal accounting policies adopted are set out below. b Basis of Consolidation The condensed consolidated financial information comprise the financial information of Henderson Far East Income Limited ('the Company') and its subsidiary undertaking, Henderson Far East (Malta) Limited ('the Group'). All intra-group balances, transactions, income and expenses and profits and losses resulting from intra-group transactions that are recognised in assets, are eliminated in full. Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. c Investments held at Fair Value through Profit or Loss All investments are designated upon initial recognition as held at fair value through profit or loss. Assets are de-recognised at the trade date of the disposal. Proceeds will be measured at fair value, which will be regarded as the proceeds of sale less any transaction costs. The fair value of the financial instruments is based on their quoted bid price at the balance sheet date, without deduction of the estimated future selling costs. - MORE - Page 8 of 10 HENDERSON FAR EAST INCOME LIMITED Unaudited Results for the period ended 28 February 2007 Changes in the fair value of investments held at fair value through profit or loss and gains and losses on disposal are recognised in the Consolidated Income Statement as 'Gains or losses on investments held at fair value through profit or loss'. Also included within this caption are transaction costs in relation to the purchase or sale of investments, including the difference between the purchase price of an investment and its bid price at the date of purchase. d Income Dividends receivable on equity shares are recognised as revenue for the period on an ex-dividend basis. Special dividends are treated as revenue return or as capital return, depending on the facts of each individual case. Income from fixed interest debt securities is recognised using the effective interest rate method. e Expenses All administration expenses and interest payable are accounted for on an accruals basis. Expenses which are incidental to the purchase or sale of an investment are charged to the capital column of the Consolidated Income Statement and allocated to other capital reserves. On the basis of the Board's expected long term split of returns equally between capital gains and income, the company charges 50% of operating expenses to capital. f Taxation Deferred taxation is accounted for within the provision for liabilities and charges and its provided on all taxable temporary differences that have originated but not reversed by the balance sheet date, other than those differences regarded as permanent. Any liability to deferred tax is provided at the average rate of tax expected to apply, based on tax law that had been enacted or substantially enacted by the balance sheet date. A deferred tax asset is recognised only to the extent that it is considered probable that sufficient taxable profits will be available to allow the deferred tax benefit of that asset to be utilised. Deferred tax assets and liabilities are not discounted to reflect the time value of money. g Foreign Currency For the purposes of the condensed consolidated financial information, the results and financial position of each entity is expressed in pounds sterling, which is the functional currency of the Company and the presentational currency of the group. Sterling is the functional currency because it is the currency of the primary economic environment in which the group operates. The Company is a closed-end investment company, incorporated in Jersey, with its shares listed on the London Stock Exchange. Sterling is the currency by which dividends are returned to shareholders, share buy-backs and share issues are conducted and is the cost base of the Company. Transactions recorded in overseas currencies during the year are translated into sterling at the appropriate daily exchange rates. Assets and liabilities denominated in overseas currencies at the balance sheet date are translated into sterling at the exchange rates ruling at that date. - MORE - Page 9 of 10 HENDERSON FAR EAST INCOME LIMITED Unaudited Results for the period ended 28 February 2007 h Cash and Cash Equivalents Cash comprises cash in hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and that are subject to an insignificant risks of changes in value. i Bank Borrowings Interest-bearing bank loans and overdrafts are recorded as the proceeds received, net of direct issue costs. Finance charges, including premiums payable on settlement or redemption and direct issue costs, are accounted for on an accrual basis in the Consolidated Income Statement using the effective interest rate method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise. j Segmental Reporting The directors are of the opinion the Group is engaged in a single segment of business being investment business 3. Earnings per Ordinary Share The earnings per ordinary share is based on the net profit after taxation of £7,058,000 and on 77,622,621 ordinary shares, being the weighted average number of ordinary shares in issue during the period. The earnings per ordinary share detailed above can be further analysed between revenue and capital, as below: For the period 6 November 2006 to 28 February 2007 Revenue Capital Total Net profit (£'000) 2,612 4,446 7,058 Weighted average number of ordinary 77,622,621 77,622,621 77,622,621 shares in issue Earnings per ordinary share (p) 3.36 5.73 9.09 4. Net asset value per Ordinary Share The basic net asset value per ordinary share is based on a net asset value of £187,541,000 and on 77,622,621 ordinary shares, being the number of ordinary shares in issue at the period end. 5. Transaction Costs Purchase transaction costs for the period 6 November 2006 to 28 February 2007 were £80,000, sales transaction costs for the period 6 November 2006 to 28 February 2007 were £149,000. These comprise mainly stamp duty and commission. 6. Launch Details On 15 December 2006 the Company issued 77,622,621 ordinary shares of no par value for a consideration value of £180,983,000, incurring £499,000 of issue expenses. On 21 January 2007, in accordance with Jersey Company law, the Company successfully applied for a reduction in the stated capital account and the creation of a distributable reserve. - MORE - Page 10 of 10 HENDERSON FAR EAST INCOME LIMITED Unaudited Results for the period ended 28 February 2007 Geographical Distribution of Group Investments 28 February 2007 % Australia 30.4 South Korea 16.6 Hong Kong 13.2 Taiwan 12.1 Singapore 8.1 Malaysia 7.8 China 6.2 The Philippines 2.1 Thailand 1.9 New Zealand 1.6 --------- 100.0 ===== Top Twenty Investments as at 28 February 2007 Company Country Value of Investments £'000 Telstra Australia 5,450 Powertech Technology Taiwan 5,020 Posco South Korea 4,723 West Australian Newspapers Australia 4,632 Commonwealth Bank of Australia Australia 4,615 Shenzhen Expressway China 4,546 NWS Holdings Hong Kong 4,344 Hang Lung Properties Hong Kong 4,316 Bumiputra-Commerce Malaysia 4,199 Hang Seng Bank Hong Kong 4,166 Transurban Group Australia 4,088 Macquarie Korea South Korea 4,005 Parkway Holdings Singapore 3,999 Korea Electric Power South Korea 3,965 Singapore Press Singapore 3,889 SP Setia Malaysia 3,885 Lend Lease Australia 3,866 QBE Insurance Group Australia 3,860 IOI Corporation Malaysia 3,795 Publishing & Broadcasting Australia 3,787 Total Top 20 Investments 85,150 Top 20 as a percentage of total investments 47.7% - ENDS - For further information please contact : Michael Kerley, Fund Manager, Telephone: 020 7818 5053 James de Sausmarez Head of Investment Trusts, Henderson Global Investors, Telephone: 020 7818 3349 Sarah Gibbons-Cook Investor Relations and PR Manager, Henderson Global Investors, Telephone: 020 7818 3198 Jeremy Hamon, Company Secretary, Jersey, Telephone: 01534 709108 This information is provided by RNS The company news service from the London Stock Exchange

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