Annual Financial Report Announcement

RNS Number : 9464D

Aberdeen Asian Income Fund Limited

30 March 2011

ABERDEEN ASIAN INCOME FUND LIMITED

ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2010

1. CHAIRMAN'S STATEMENT

Highlights

- Total dividend increased by 20% to 6p (2009 - 5p) and payments moved to quarterly

- Diluted net asset value per Ordinary share ("NAV") total return 28.3%

- Share price up 24.7% (30.8% with dividends re-invested)

- Healthy carried forward revenue reserves of £4.4 million, 3.7p per share

- 7.2 million new shares issued at a premium to NAV

Background and Overview

I am pleased to report that your Company delivered a strong performance for the year to 31 December 2010. The diluted NAV total return was 28.3 %, compared to a 22.1% rise in the benchmark, the MSCI All Country Asia Pacific ex-Japan Free Index. The share price gained 24.7% to 170.3p (total return of 30.8%), representing a shift from a discount to NAV of 0.5% to a premium of 1.4% at the period end. As a result, we were able to issue 7.2 million shares at a premium to the prevailing NAV.

The outperformance against the benchmark was attributable to both positive stock selection and asset allocation, which is driven by where your Manager finds quality companies with attractive valuations. Your Company's greater exposure to Southeast Asian markets, with their broadly higher dividend payout ratios, proved particularly beneficial. However, the strong absolute performance should also be taken in the context of a weak sterling relative to more buoyant Asian currencies, which underscores the effects of currency movements on returns. Over the year, most Asian currencies strengthened as investors gravitated towards the region's vibrant economies and higher-yielding currencies. Here, I would like to reiterate that your Manager's policy is to assess the direct impact of currencies on companies, and not to hedge the portfolio currency exposure. On the whole, your Manager sees favourable economic fundamentals as being generally supportive of Asian currencies over the longer term.

In sum, 2010 was another good year for Asian equity markets with a second straight year of double-digit gains, though the returns were less spectacular than 2009. The region's economic upturn also stayed on track, with growth gradually becoming more broadly based. That said, Asia's brisk expansion was not without challenges and I highlighted this in the Half Yearly Report. The prime concern remained inflation, driven primarily by politically sensitive food prices. One conundrum for policymakers is that interest rate hikes to counter upward price pressures could attract more money from yield-chasing investors, thus aggravating inflation. A related worry is that increased capital inflows inflate currencies and make exports less competitive. Nevertheless, with inflationary pressures building, many central bankers ratcheted up the pace of tightening as the year progressed.

At the corporate level, Asia continued to make encouraging progress. Not only did earnings grow, but improved corporate cash flow was also paid out to shareholders as higher dividends. Indeed, your Company's total revenue for the year increased thanks to currency movements, as mentioned earlier, as well as dividends from your Company's investments, which matched or surpassed expectations. The Board remains confident in your Manager's conservative, value-driven investment style, which has served the portfolio well. A more detailed analysis of the fund's performance is contained in the Manager's Review. Your Manager has also highlighted the introduction of your Company's first investment in Japan - Takeda Pharmaceutical, a leading drug maker with a relatively high dividend yield. Thankfully, the company has remained relatively unaffected by the country's recent earthquake and tsunami.

Dividends

The year marked the switch from semi-annual to quarterly dividends. Four quarterly interim dividends were declared. The first two, which were noted in the Half Yearly Report, each of 1.25p, totalled 2.5p, compared to an interim dividend declared covering the six months to 30 June 2009 of 2.0p. On 19 October 2010 the Board declared a third quarterly interim dividend of 1.25p per Ordinary share in respect of the year ended 31 December 2010, which was paid on 19 November 2010 to shareholders on the register on 29 October 2010. A fourth quarterly interim dividend of 2.25p per Ordinary share was announced on 13 January 2011 and was paid on 18 February 2011 to shareholders on the register on 21 January 2011. The third and fourth quarterly interim dividends total 3.5p, compared to the 3.0p interim dividend declared covering the six months to 31 December 2009. The total dividend for the year was therefore 6.0p, a substantial increase of 20% on the previous year. Following the payment of the fourth quarterly interim dividend, the Company's revenue reserves carried forward were £4.4m (which represents approximately 3.7p per share).

Looking ahead, your Manager remains sanguine about the prospects for corporate earnings, which they expect to be reflected in steady dividend payouts. Having said that, the rate of growth should moderate in light of the rebound in earnings in 2010 after a difficult period in 2009.

Share Issuance and Gearing

During the year, the Company issued 7.2 million new Ordinary shares at a premium to the prevailing NAV and in response to on-going demand from the market. Such issues enhance the NAV, albeit marginally, for existing shareholders. Subsequent to the year end a further 775,000 Ordinary shares have been issued for cash. A further 1.05 million shares were issued following the exercise of Warrants to subscribe for Ordinary shares in May and October last year. There is a separate notice accompanying the Annual Report confirming that the next Warrant subscription date will be 10 May 2011. Warrrantholders are reminded that there is a bi-annual right to exercise Warrants up to the final exercise date which will be in May 2013.

During the year the value of short term borrowings under the Company's loan facility increased marginally from £10.6 million to £10.9 million largely as a result of currency movements. On 31 March 2010 the Company's bank facility with Barclays Bank was repaid and replaced with a new £15 million 12 month multicurrency facility with Scotia Bank. Your Board is responsible for establishing and implementing the Company's gearing strategy as advised by your Manager and will continue to have a close regard to the level of gearing in the context of the current uncertainty in stockmarket conditions. At the time of writing bank borrowings represent approximately 4.6% of the Company's net assets. On 22 March 2011 the Company's £15 million senior secured multicurrency revolving bank facility with Scotia Bank was extended for a further 12 month period through to March 2012.

Outlook

The economic outlook for Asia continues to remain bright. This statement comes with caveats, however. For many countries, increased domestic demand is reducing a traditional dependence on exports, but Asia is still vulnerable to shocks from the West. Managing inflation and asset bubbles also pose a big challenge regionally. In particular, sharply rising oil prices on the back of unrest in the Middle East and North Africa have reinforced inflation fears. Despite the recent tightening, monetary policy remains generally loose with real interest rates negative in some countries. Many central bankers are keen to keep currencies competitive but a stronger currency could cushion import costs and prompt businesses to become more competitive. Simply put, tightening in Asia should be viewed positively, with interest rate increases seen as a normalisation of policy. While this could mean more modest growth in the near term, the slower pace could present benefits - more manageable inflation and the prevention of asset bubbles. Longer term, Asia still looks in good shape.

A policy tightening environment, meanwhile, could translate to greater stockmarket volatility in 2011. More recently, Japan's disaster and its unfolding nuclear crisis have buffeted equity markets. Some effects, notably supply chain disruptions, are already evident but it is too soon to gauge the full impact on Asia's economies. Still, your Board is cautiously optimistic about the outlook for Asia's stockmarkets; we concur with your Manager's firmly held view that it is fundamentals that drive stock prices over the longer term. Our confidence also rests on the conduct of companies. Many, particularly your Company's investments, are maintaining balance sheet discipline while improving governance and shareholder value. And stocks, while not cheap, still offer attractive opportunities over the long run.

Annual General Meeting

The Company's Annual General Meeting ("AGM") will be held at 9.30 a.m. on Thursday 12 May 2011 at No.1 Seaton Place, St Helier, Jersey and your Board looks forward to meeting as many shareholders as possible. Your Company will also be holding an informal shareholder presentation in London at 10.00 a.m. on Friday 13 May 2011 at Bow Bells House, 1 Bread Street, London EC4M 9HH for those shareholders who are unable to travel to Jersey for the AGM. The presentation will be followed by tea and coffee and will provide shareholders with an opportunity to meet representatives from the management team and to receive a general update on the Company and the markets in Asia. The meeting in London will not constitute a formal meeting of the Company and there will not be any resolutions to vote upon. Accordingly, if you are unable to attend the AGM, I would encourage you to vote by returning your proxy (or letter of directions if you invest via the Aberdeen ISA or Savings Plan) which is enclosed with the Annual Report and Accounts. If you intend to attend either of the meetings, I would also be grateful if you would tick the relevant box when voting.

I look forward to reporting to you again with the Half Yearly Report to 30 June 2011, which will be issued to shareholders at the end of August 2011. Those shareholders who wish to keep up to date with developments between formal reports may wish to view the monthly factsheet at
http://www.asian-income.co.uk/doc.nsf/Lit/FactsheetUKClosedAAIF.

Peter Arthur

Chairman

30 March 2011

2. MANAGER'S REVIEW

Overview

Most Asian markets ended 2010 with solid gains, reflecting confidence in the region's prospects despite persistent concerns over anaemic demand in the West. Overall, stockmarkets in Asia (excluding Japan) outpaced those in the US and Europe. Initially, solid economic growth and corporate earnings underpinned sentiment despite fears over policy tightening in China. However, in May, markets fell sharply as Europe's sovereign debt crisis culminated in a bailout for Greece. Exacerbating market volatility were policymakers' efforts to tackle heavy capital inflows, as investors were attracted by Asia's more upbeat prospects relative to that of its Western counterparts. Korea, Taiwan and Thailand re-imposed taxes on foreign holdings of government bonds, whereas Singapore allowed its currency to strengthen. Others, like Australia, allowed market forces to operate unhindered and saw their export competitiveness hurt by the strength of their currencies.

On the macroeconomic front, Asia ex-Japan continued to lead the rest of the world in growth, although signs of moderation emerged as the year progressed. Intra-regional trade compensated for sluggish demand from developed countries to some degree. Domestic consumption underpinned expansion in China, India and Indonesia, while an export rebound boosted Singapore and Hong Kong. But there was deceleration in Malaysia, Thailand and the Philippines, as their third-quarter GDP growth slowed.

Inflationary pressures led several central banks to resume policy normalisation. This in many cases meant interest rate hikes, which hurt market sentiment. Market momentum swung sharply upwards from late August, buoyed by a fresh round of US quantitative easing despite renewed Eurozone fears.

Performance Review

The fund's diluted net asset value total return was 28.3% over the period and the share price total return was 30.8%, compared to the benchmark MSCI AC Asia Pacific (excluding Japan) Index's total return of 22.1%. The outperformance was due to our heavy exposure to South-east Asia, in particular Thailand and Malaysia, and our holdings in those countries, which on the whole performed well. Our underweight to Chinese companies in favour of Hong Kong ones also benefited the portfolio.

Over the year, stockmarkets in South-east Asian countries more geared towards domestic demand, such as Thailand and Malaysia, were among the top performers. The trend was also evident at the sector level, where consumer-related sectors led gains. Other sectors that did well were industrials, buoyed by a recovery in capital expenditure, as well as energy and materials, given the steep price gains for both soft and hard commodities.

In Thailand, the resilient economy supported sentiment despite political unrest. Among our consumer holdings, wholesale retailer Siam Makro delivered healthy profits. In absolute terms, it was the best performer, posting triple-digit returns. The company boasts a net-cash balance sheet. Separately, petrochemicals and cement group Siam Cement, viewed as a proxy for the economy, was buoyed by better GDP growth and news that lawmakers would allow most projects in the Map Ta Phut industrial area to resume operations.

As for Malaysia, a stimulatory budget and ambitious government plans to restructure the economy to raise the country to developed-nation status gave impetus to market momentum. Growth data were supportive, while bilateral relations with Singapore also warmed. The fund's holdings there outperformed, in particular, Guinness Anchor and Pos Malaysia. Consumer holding Guinness Anchor, which brews Guinness, Heineken and Tiger beer, recorded solid top-line growth. Its operating margins also increased as the ringgit's strength mitigated the impact of pricier raw materials. Although commodity prices have been rising, we expect Guinness to be able to pass on cost increases to consumers because of its pricing power. The business is highly cash-generative, enabling dividend payouts of almost 90% of earnings. Meanwhile, Pos Malaysia's share price rose sharply on the pending sale of a controlling stake - most likely to a strategic investor - by government investment arm Khazanah Nasional. Investors hoped that a new shareholder could enhance or unlock value through a possible restructuring.

China, where the fund is underweight, was among the fastest-growing economies in 2010. Its stockmarket, however, was the worst performer in Asia, as Beijing's tightening measures depressed sentiment. We remain cautious about China. While its growth prospects are undeniably rosy, we have found it challenging to find companies that satisfy both our quality and value criteria, preferring to gain exposure via well-established Hong Kong-domiciled companies that do business on the mainland, given the city's more stringent regulatory framework and stronger corporate culture. Valuations remain high in the most desirable sectors despite the market underperformance.

Among our Hong Kong holdings, Swire Pacific was bolstered by its property and aviation interests. Airline subsidiary Cathay Pacific forecast a near tripling of full-year profits, while Swire's investment property portfolio was resilient because of strong occupancy and constrained supply of prime space in Hong Kong. Casual wear retailer Giordano's share price doubled over the year. Its margins improved as management kept a tight rein on costs. As well, its strong cash position and prudent capital spending should help sustain dividend payouts, which reached over 80% of earnings in the latest financial year.

In contrast, Australian insurer QBE disappointed because of some large claims arising from natural disasters and low investment yields given loose monetary policy in major developed economies. The Australian dollar's strength also hurt its income, given the significant overseas contributions. That said, QBE's management has proven its ability to manage policy pricing and risk exposure well over the insurance cycle.

Portfolio Activity

During the year, the share prices of some holdings rose sharply, making their dividend yields less compelling. To meet your Company's objective of dividend growth along with some capital appreciation, we introduced eight companies within Aberdeen's investment universe that offered attractive yields and good prospects. We topsliced some relatively strong performers, such as Siam Cement and Australian bank ANZ, to fund the purchases.

During the year, we sold Thai oil exploration company PTTEP and introduced Australian mining group BHP Billiton, as the latter, a more diversified business, offered a higher sustainable yield. Other Australian transactions were the introduction of Woolworths and the reinitiation of a position in SP Ausnet.

Another addition was the portfolio's first holding in Japan - Takeda Pharmaceutical, the country's largest drugmaker in terms of sales. It has a robust balance sheet and delivers consistent dividend payouts. We also introduced Malaysia's Lafarge Malayan Cement, the largest domestic cement maker by market share which enjoys firm backing from its European parent, and Thai broadcaster BEC World, which is debt-free and generates steady cash flows.

Other initiations were Singapore-based electronics manufacturer Venture Corp, which is making good progress in its move up the value chain from a contract manufacturer to a higher-margin original design manufacturer, and Hong Kong-listed insurer AIA, given its established distribution networks and a sizable presence in many Asian markets.

Outlook

We expect Asia to continue to lead the global economic recovery, although the growth pace is likely to moderate. Global stockmarkets have turned more volatile recently, following Japan's earthquake and tsunami, which triggered a nuclear crisis, and an unprecedented wave of revolts against authoritarian regimes in the Middle East and North Africa. The fragile US recovery and Europe's sovereign debt crisis have also increased risk aversion. In Asia, a major concern has been the short-term impact of Japan's disasters on other regional economies. But we think this will be more than compensated for by the significant boost from the country's multi-billion-dollar reconstruction. Apart from these uncertainties, the region is also vulnerable to inadequate policy responses to rising inflation. We view any resulting market correction as an opportune time to buy quality stocks at attractive valuations.

Given the above, we think the robust levels of economic growth and corporate earnings of 2010 are unlikely to be sustainable over the short term. That said, we are confident of the ability of our companies to deliver steady long-term growth, given their high quality and strong balance sheets. We maintain our preference for companies exposed to domestic growth. There is huge potential for private consumption in Asia and other emerging markets, given their favourable demographics. We are also confident that our holdings' sturdy fundamentals will leave them well placed to generate the earnings necessary for meaningful dividend payouts, and to cope with economic and fiscal headwinds.

Aberdeen Asset Management Asia Limited

30 March 2011

3. STATEMENT OF DIRECTORS' RESPONSIBILITIES

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

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

- select suitable accounting policies and then apply them consistently;

- make judgments and estimates that are reasonable and prudent; and,

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

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

The Directors confirm that to the best of their knowledge:

- the financial statements, prepared in accordance with IFRS, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and

- the Annual Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that the Company faces.

For Aberdeen Asian Income Fund Limited

P A K Arthur

Chairman

30 March 2011

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

4. BUSINESS REVIEW

A review of the Company's activities is given in the Chairman's Statement and Manager's Review. This includes a review of the business of the Company and its principal activities, likely future developments of the business, dividends declared and details of the issue of shares during the year by the Company. The principal risks associated with the Company are detailed below and in note 16 to the financial statements. The Key Performance Indicators for the Company including NAV performance, share price performance and benchmark performance are detailed under item 11 Results, below.

The current Directors, Messrs P Arthur, D Baxter, A Berzins, M Chambers, H Young and Dr A Cukic Armstrong were the only Directors in office during the year.

Results and Dividends

Details of the Company's results and dividends are shown under item 11 Results below and in note 8 to the Financial Statements. With effect from 1 January 2010 interim dividends have been paid on a quarterly basis in May, August, November and February 2011. Dividends are paid to the extent that they are covered by the income received from the Company's underlying investments. As at 31 December 2010 the Company's brought forward revenue reserves amounted to £4.4m (3.7p per share) after the payment of the fourth interim dividend.

Principal Activity

The business of the Company is that of an investment company investing in the Asia Pacific region.

Status

The Company is registered with limited liability in Jersey as a closed-end investment company under the Companies (Jersey) Law 1991 with registered number 91671. In addition, the Company constitutes and is regulated as a collective investment fund under the Collective Investment Funds (Jersey) Law 1988.

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

The Company intends to manage its affairs so as to be a qualifying investment for inclusion in the stocks and shares component of an Individual Savings Account ('ISA') and it is the Directors' intention that the Company should continue to be a qualifying trust.

Share Capital

As at 31 December 2010 there were 118,035,062 Ordinary shares and 20,953,939 Warrants in issue. During the year the Company issued a total of 7.2 million new Ordinary shares for cash at a premium to the prevailing NAV at the time of issue. Subsequent to the year end a further 775,000 new Ordinary shares were issued for cash. In May and October Warrantholders elected to convert a total of 1,046,061 Warrants in to new Ordinary shares of no par value at 120p per Warrant.

Principal Risk Factors

Ordinary shares

The market price and the realisable value of the Ordinary shares, as well as being affected by their underlying net asset value, also take into account supply and demand for the Ordinary shares, market conditions and general investor sentiment. As such, the market value and the realisable value of the Ordinary shares may fluctuate and vary considerably from the net asset value of the Ordinary shares and investors may not be able to realise the value of their original investment. There is no guarantee that the Board's discount management policy will achieve its objective.

Warrants

Warrants represent a geared investment, so a relatively small movement in the market price of the Ordinary shares may result in a disproportionately large movement, unfavourable as well as favourable, in the market price of the Warrants.

Dividends

The Company will only pay dividends on the Ordinary shares to the extent that it has profits (current year or brought forward) available for that purpose. The ability of the Company to pay any dividends in respect of the Ordinary shares and any future dividend growth will depend primarily on the level of income received from its investments. The Company's income is derived from ordinary and special dividends and the level of these dividends received in any year is liable to fluctuation. Accordingly, the amount of the dividends paid to shareholders may also fluctuate.

Borrowings

Whilst the use of borrowings should enhance the total return on the Ordinary shares where the return on the Company's underlying assets is rising and exceeds the cost of borrowing, it will have the opposite effect where the underlying return is less than the cost of borrowing, further reducing the total return on the Ordinary shares.

Market Risks

The fair value or future cash flows of a financial instrument held by the Company may fluctuate because of changes in market prices. Market risk comprises three elements, interest rate risk, currency risk and equity price risk. Further details of these risks are disclosed in note 16 to the financial statements. Investment in emerging securities markets in the Asia Pacific region involves a greater degree of risk than that usually associated with investment in more developed securities markets, including the risk of social, economic and political instability which may have an adverse effect on economic returns or restrict investment opportunities.

General

The Company does not have a fixed winding-up date and, therefore, unless shareholders vote to wind up the Company, shareholders will only be able to realise their investment through the market.

Taxation and Exchange Controls

Any change in the Company's tax status or in taxation legislation (including the tax treatment of dividends or other investment income received by the Company) could affect the value of the investments held by the Company, affect the Company's ability to provide returns to shareholders or alter the post-tax returns to shareholders.

The Company may purchase investments that may be subject to exchange controls or withholding taxes in various jurisdictions. In the event that exchange controls or withholding taxes are imposed with respect to any of the Company's investments, the effect will generally be to reduce the income received by the Company on its investments and the capital value of the affected investments.

5. STATEMENT OF COMPREHENSIVE INCOME

		Year ended			Year ended
		31 December 2010			31 December 2009
		Revenue	Capital	Total	Revenue	Capital	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000
Investment income	4
Dividend income		9,280	13	9,293	6,793	-	6,793
Interest income		1,005	-	1,005	887	-	887
		_______	_______	_______	_______	_______	_______
Total revenue		10,285	13	10,298	7,680	-	7,680
Gains on financial assets at fair value through profit or loss	10	-	42,609	42,609	-	34,151	34,151
Currency (losses)/gains	14	-	(532)	(532)	-	1,654	1,654
		_______	_______	_______	_______	_______	_______
		10,285	42,090	52,375	7,680	35,805	43,485
		_______	_______	_______	_______	_______	_______
Expenses
Investment management fee	5	(677)	(1,016)	(1,693)	(487)	(730)	(1,217)
Other operating expenses	6	(748)	(39)	(787)	(614)	-	(614)
		_______	_______	_______	_______	_______	_______
Profit before finance costs and tax		8,860	41,035	49,895	6,579	35,075	41,654
		_______	_______	_______	_______	_______	_______
Finance costs	7	(94)	(142)	(236)	(172)	(259)	(431)
Profit before tax		8,766	40,893	49,659	6,407	34,816	41,223

Tax expense		(509)	-	(509)	(363)	-	(363)
		_______	_______	_______	_______	_______	_______
Profit for the year attributable to equity shareholders		8,257	40,893	49,150	6,044	34,816	40,860
		_______	_______	_______	_______	_______	_______

Earnings per Ordinary share (pence):	9
Basic		7.31	36.21	43.52	5.54	31.93	37.47
		_______	_______	_______	_______	_______	_______
Diluted		7.03	34.84	41.87	5.54	31.93	37.47
								_______	_______	_______	_______	_______	_______
All of the profit and total comprehensive income is attributable to the equity holders of Aberdeen Asian Income Fund Limited. There are no minority interests.
The total column of this statement represents the Statement of Comprehensive Income of the Company, prepared in accordance with IFRS. The revenue and capital columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies. All items in the above statement derive from continuing operations.
In accordance with the undertaking provided by the Board in the launch Prospectus, dividends may only be paid out of the Company's distributable reserves.
The accompanying notes are an integral part of the financial statements.

6. BALANCE SHEET

		As at	As at
		31 December	31 December
		2010	2009
	Notes	£'000	£'000
Non-current assets
Investments held at fair value through profit or loss	10	216,933	160,413
		_________	_________
Current assets
Cash and cash equivalents		1,380	4,165
Other receivables	11	1,198	662
		_________	_________
		2,578	4,827
		_________	_________
Current liabilities
Bank loans	12	(10,913)	(10,558)
Other payables	12	(444)	(284)
		_________	_________
		(11,357)	(10,842)
		_________	_________
Net current liabilities		(8,779)	(6,015)
		_________	_________
Net assets		208,154	154,398
		_________	_________
Share capital and reserves
Ordinary share capital	13	118,035	109,790
Warrant reserve		2,095	2,200
Capital redemption reserve		1,560	1,560
Capital reserve	14	79,427	34,528
Revenue reserve	14	7,037	6,320
		_________	_________
Equity shareholders' funds		208,154	154,398
		_________	_________
Net asset value per Ordinary share (pence):	15
Basic		176.35	140.63
		_________	_________
Diluted		167.85	137.19
		_________	_________

7. STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2010
			Capital
	Share	Warrant	redemption	Capital	Revenue	Retained
	capital	reserve	reserve	reserve	reserve	earnings	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Opening balance	109,790	2,200	1,560	34,528	6,320	-	154,398
Issue of own shares	7,199	-	-	3,692	-	-	10,891
Exercise of warrants	1,046	(105)	-	314	-	-	1,255
Profit for the year	-	-	-	-	-	49,150	49,150
Transferred from retained earnings to capital reserve{A}	-	-	-	40,893	-	(40,893)	-
Transferred from retained earnings to revenue reserve	-	-	-	-	8,257	(8,257)	-
Dividends paid	-	-	-	-	(7,540)	-	(7,540)
	_______	______	________	_______	______	______	_______
Balance at 31 December 2010	118,035	2,095	1,560	79,427	7,037	-	208,154
	_______	______	________	_______	______	______	_______

For the year ended 31 December 2009
			Capital
	Share	Warrant	redemption	Capital	Revenue	Retained
	capital	reserve	reserve	reserve	reserve	earnings	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Opening balance	108,440	2,200	1,560	(513)	5,442	-	117,129
Issue of own shares	1,350	-	-	225	-	-	1,575
Loss for the year	-	-	-	-	-	40,860	40,860
Transferred from retained earnings to capital reserve{A}	-	-	-	34,816	-	(34,816)	-
Transferred from retained earnings to revenue reserve	-	-	-	-	6,044	(6,044)	-
Dividends paid	-	-	-	-	(5,166)	-	(5,166)
	_______	______	________	_______	______	______	_______
Balance at 31 December 2009	109,790	2,200	1,560	34,528	6,320	-	154,398
	_______	______	________	_______	______	______	_______

{A}Represents the capital profit attributable to equity shareholders per the Statement of Comprehensive Income.
The revenue reserve represents the amount of the Company's reserves distributable by way of dividend.
The accompanying notes are an integral part of the financial statements.

8. CASH FLOW STATEMENT

		Year ended		Year ended
		31 December 2010		31 December 2009
	Notes	£'000	£'000	£'000	£'000
Profit for the year			49,150		40,860
Add back finance costs	7		236		431
Add back taxation paid			509		363
Gains on investments held at fair value through profit or loss	10		(42,609)		(34,151)
Net currency losses/(gains)	14		532		(1,654)
Increase in interest receivable			-		(9)
(Increase)/decrease in other receivables			(537)		20
Increase/(decrease) in other payables			200		(47)
			_______		_______
Net cash inflow from operating activities before finance costs and tax^{A}			7,481		5,813

Bank and loan interest paid			(276)		(416)

Overseas taxation paid			(509)		(363)
			_______		_______
Net cash inflow from operating activities			6,696		5,034

Investing activities
Purchases of investments		(35,366)		(3,334)
Sales of investments		21,455		4,562
		_______		_______
Net cash (outflow)/inflow from investing activities			(13,911)		1,228
			_______		_______
Financing activities
Issue of own shares	13,14	10,891		1,575
Exercise of warrants	13,14	1,255		-
Dividends paid	8	(7,540)		(5,166)
Loans drawn down/(repaid)		42		(3,487)
		_______		_______
Net cash inflow/(outflow) from financing activities			4,648		(7,078)
Net decrease in cash and cash equivalent			(2,567)		(816)
Cash and cash equivalents of the start of the year			4,165		4,968
Effect of foreign exchange rate changes			(218)		13
			_______		_______
Cash and cash equivalents at the end of the year	2, 16		1,380		4,165
			_______		_______

{A}Includes income from dividends of £8,807,000 gross (2009 - £6,812,000 gross) and interest income of £969,000 (2009 - £874,000).
The accompanying notes are an integral part of the financial statements.

9. NOTES TO THE FINANCIAL STATEMENTS

Additional Notes to the Annual Financial Report:

1.	Principal activity
	The Company is a closed-end investment company incorporated in Jersey, with its shares being listed on the London Stock Exchange.

2.	Accounting policies
	The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the International Accounting Standards Board (IASB), and interpretations issued by the International Reporting Interpretations Committee of the IASB (IFRIC).

	(a)	Basis of preparation
		The financial statements are prepared on a historical cost basis, except for financial assets that have been measured at fair value through profit or loss.
		The accounting policies which follow set out those policies which apply in preparing the financial statements for the year ended 31 December 2010.
		The financial statements are presented in sterling and all values are rounded to the nearest thousand (£'000) except when otherwise indicated.
		Where guidance set out in the Statement of Recommended Practice ("SORP") for investment trusts issued by the Association of Investment Companies ("AIC") is consistent with the requirement of IFRS, the Directors have sought to prepare the financial statements on a basis compliant with the recommendations of the SORP.
		Changes in accounting policy and disclosures
		At the date of authorisation of these financial statements, the following Standards and Interpretations were in issue but not yet effective:
		-	Amendments to IFRS 1 - First time adoption - Financial Instrument Disclosures (effective for annual periods beginning on or after 1 July 2010).
		-	Amendments to IFRS 7 - Financial Instruments: Disclosures on Derecognition 2011 (effective for annual periods beginning on or after 1 July 2011).
		-	IFRS 9 - Financial Instruments: Classification and Measurement (effective for annual periods beginning on or after 1 January 2013).
		-	Amendments to IAS 1 - First time adoption - narrow scope amendment (effective for annual periods beginning on or after 1 July 2011).
		-	Amendments to IAS 12 - Income taxes - deferred tax amendment (effective for annual periods beginning on or after 1 January 2012).
		-	Amendments to IAS 24 - Related Party Disclosures (effective for annual periods beginning on or after 1 January 2011).
		-	Amendments to IAS 32 - Classification of Rights Issues (effective for annual periods beginning on or after 1 February 2010).
		-	IFRIC 19 - Extinguishing Financial Liabilities with Equity Instruments (effective for annual periods beginning on or after 1 July 2010).
		-	Amendments to IFRIC 14 - Prepayments of a Minimum Funding Requirement (effective for annual periods beginning on or after 1 January 2011).

		The Directors anticipate that the adoption of these Standards and Interpretations in future periods will have no material financial impact on the financial statements of the Company. The Company concludes however that certain additional disclosures may be necessary and will be considered on their application.

	(b)	Income
		Dividends receivable on equity shares (other than special dividends) are brought into account on the ex-dividend date. Dividends receivable on equity shares where no ex-dividend date is quoted are brought into account when the Company's right to receive payment is established. Where the Company has elected to receive dividends in the form of additional shares rather than in cash, the amount of the cash dividend foregone is recognised as income. Special dividends are credited to capital or revenue according to their circumstances. Dividend revenue is presented gross of any non-recoverable withholding taxes, which are disclosed separately in the Statement of Comprehensive Income.

		The fixed returns on debt securities and non-equity shares are recognised using the effective interest rate method.

		Interest receivable from cash and short-term deposits is accrued to the end of the financial period.

	(c)	Expenses
		All expenses, with the exception of interest expenses, which are recognised using the effective interest method, are accounted for on an accruals basis. Expenses are charged through the revenue column of the Statement of Comprehensive Income except as follows:
		-	expenses which are incidental to the acquisition or disposal of an investment are treated as capital and separately identified and disclosed in note 10;
		-	expenses (including share issue costs) are treated as capital where a connection with the maintenance or enhancement of the value of the investments can be demonstrated; and
		-	the Company charges 60% of investment management fees and finance costs to capital, in accordance with the Board's expected long term return in the form of capital gains and income respectively from the investment portfolio of the Company.

	(d)	Taxation
		With effect from the 2009 year of assessment Jersey abolished the exempt company regime for existing companies. Profits arising in the Company for the 2010 year of assessment will be subject to tax at the rate of 0% (2009 - 0%).

		However, in some jurisdictions, investment income and capital gains are subject to withholding tax deducted at the source of the income. The Company presents the withholding tax separately from the gross investment income in the Statement of Comprehensive Income. For the purpose of the Cash Flow Statement, cash inflows from investments are presented net of withholding taxes, when applicable.

	(e)	Investments
		All investments have been designated upon initial recognition as fair value through profit or loss. This is done because all investments are considered to form part of a group of financial assets which is evaluated on a fair value basis, in accordance with the Company's documented investment strategy, and information about the grouping is provided internally on that basis.

		Purchases of investments are recognised on a trade date basis and designated upon initial recognition at fair value through the profit or loss. Sales of assets are also recognised on a trade date basis. Proceeds are measured at fair value, which are regarded as the proceeds of sale less any transaction costs.

		The fair value of the financial assets is based on their quoted bid price at the reporting date, without deduction for any estimated future selling costs. Unquoted investments would be valued by the Directors using primary valuation techniques such as earnings multiples, recent transactions and net assets.

		Changes in the value of investments held at fair value through profit or loss and gains and losses on disposal are recognised in the Statement of Comprehensive Income as "Gains on financial assets at fair value through profit or loss". Also included within this caption are transaction costs in relation to the purchase or sale of investments, including the difference between the purchase price of an investment and its bid price at the date of purchase.

	(f)	Cash and cash equivalents
		Cash comprises cash in hand and at banks. Cash equivalents are short-term highly liquid investments that are readily convertible to known amounts of cash and that are subject to an insignificant risk of changes in values.

		For the purposes of the Cash Flow Statement, cash and cash equivalents comprise cash at bank net of outstanding bank overdrafts.

	(g)	Other receivables and payables
		Other receivables do not carry any interest and are short-term in nature and are accordingly stated at their recoverable amount. Other payables are non interest bearing and are stated at their payable amount.

	(h)	Dividends payable
		Dividends are recognised in the financial statements in the period in which they are paid.

	(i)	Nature and purpose of reserves
		Warrant reserve
		The Warrant reserve was created on the issue of 22,000,000 Warrants at the launch of the Company. Each Warrant issued entitles the holder to subscribe in cash for one Ordinary share on the terms contained in note 13. The reserve reflects the issue price of unexercised Warrants.

		Capital redemption reserve
		The capital redemption reserve arose when Ordinary shares were redeemed, at which point an amount equal to the par value of the Ordinary share capital was transferred from the Statement of Comprehensive Income to the capital redemption reserve. Following a law amendment in 2008, the Company is no longer required to transfer the par value of the Ordinary share capital. Although the transfer from the Statement of Comprehensive Income is no longer required, the amount remaining in the capital redemption reserve is not distributable in accordance with the undertaking provided by the Board in the launch Prospectus.

		Capital reserve (see note 14 to the financial statements)
		This reserve reflects any gains or losses on investments realised in the period along with any increases and decreases in the fair value of investments held that have been recognised in the Statement of Comprehensive Income.

		Revenue reserve
		This reserve reflects all income and costs which are recognised in the revenue column of the Statement of Comprehensive Income. The revenue reserve represents the amount of the Company's reserves distributable by way of dividend.

	(j)	Foreign currency
		Monetary assets and liabilities denominated in foreign currencies are converted into sterling at the rate of exchange ruling at the reporting date. The financial statements are presented in sterling, which is the Company's functional and presentational currency. The Company's performance is evaluated and its liquidity is managed in sterling. Therefore sterling is considered as the currency that most faithfully represents the economic effects of the underlying transactions, events and conditions. Transactions during the year involving foreign currencies are converted at the rate of exchange ruling at the transaction date. Gains or losses arising from a change in exchange rates subsequent to the date of a transaction is included as an exchange gain or loss in revenue or capital in the Statement of Comprehensive Income, depending on whether the gain or loss is of a revenue or capital nature.

	(k)	Borrowings
		Monies borrowed to finance the investment objectives of the Company are stated at the amount of the net proceeds immediately after the issue plus cumulative finance costs less cumulative payments made in respect of the debt. The finance cost of such borrowings are allocated to years over the term of the debt at a constant rate on the carrying amount and, as per the Prospectus, are charged 40% to revenue and 60% to capital reserves to reflect the Company's investment policy and prospective income and capital growth.

		Borrowings are held at amortised cost using the effective interest rate method.
	(l)	Share Capital
		The Company's ordinary shares are classified as equity as the Company has full discretion on repurchasing the shares and on dividend distributions.

		Issuance, acquisition and resale of Ordinary shares are accounted for as equity transactions. Upon issuance of shares, the consideration received is included in equity.

		Transaction costs incurred by the Company in acquiring or selling its own equity instruments are accounted for as a deduction from equity to the extent that they are incremental costs directly attributable to the equity transaction that otherwise would have been avoided.

		Own equity instruments which are acquired (treasury shares) are deducted from equity and accounted for at amounts equal to the consideration paid, including any directly attributable incremental costs.

		No gain or loss is recognised in the Statement of Comprehensive Income on the purchase, sale issuance or cancellation of the Company's own instruments.

3.	Segment information
	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.

	The following table analyses the Company's operating income per geographical location. The basis for attributing the operating income is the place of incorporation of the instrument's counterparty.

		Year ended	Year ended
		31 December 2010	31 December 2009
		£'000	£'000
	Asia Pacific region	10,189	7,657
	United Kingdom	96	23
		_________	_________
		10,285	7,680
		_________	_________

		Year ended	Year ended
		31 December 2010	31 December 2009
4.	Income	£'000	£'000
	Income from investments
	Overseas dividends	9,192	6,793
	Franked income	88	-
		_________	_________
		9,280	6,793
	Interest income
	Bond interest	996	864
	Deposit interest	9	23
		_________	_________
		1,005	887
		_________	_________
	Total income	10,285	7,680
		_________	_________

		Year ended			Year ended
		31 December 2010			31 December 2009
		Revenue	Capital	Total	Revenue	Capital	Total
5.	Investment management fee	£'000	£'000	£'000	£'000	£'000	£'000
	Investment management fee	677	1,016	1,693	487	730	1,217
		_______	_______	_______	_______	_______	_______

	The Company has an agreement with Aberdeen Private Wealth Management (APWM) for the provision of management services. This agreement has been sub-delegated to Aberdeen Asset Management Asia Limited (AAM Asia).

	During the year the management fee was payable monthly in arrears and was based on an annual amount of 1% of the net asset value of the Company valued monthly. The balance due to APWM at the year end was £328,000 (2009 - £124,000). The investment management fees are charged 40% to revenue and 60% to capital.

		Year ended			Year ended
		31 December 2010			31 December 2009
		Revenue	Capital	Total	Revenue	Capital	Total
6.	Other operating expenses	£'000	£'000	£'000	£'000	£'000	£'000
	Directors' fees	115	-	115	115	-	115
	Marketing contribution	122	-	122	93	-	93
	Auditors' remuneration:
	- statutory audit	22	-	22	23	-	23
	- interim accounts review	5	-	5	5	-	5
	Custodian charges	113	-	113	119	-	119
	Secretarial and administration fee	112	-	112	110	-	110
	Other	259	39	298	149	-	149
		_______	_______	_______	_______	_______	_______
		748	39	787	614	-	614
		_______	_______	_______	_______	_______	_______

	The Company has an agreement with Aberdeen Asset Managers Limited (AAM) for the provision of marketing services in relation to the Company's participation in the Aberdeen Investment Trust share plan and ISA. The total fees paid are based on an annual rate of £133,000 (2009 - £90,000). There was no sum due to AAM at the year end (2009 - £nil).

	In addition, Aberdeen Private Wealth Management Limited (APWM) is entitled to an annual company secretarial and administration fee of £112,000, which increases annually in line with any increases in RPI. A balance of £28,000 (2009 - £28,000) was payable to APWM at the year end.

		Year ended			Year ended
		31 December 2010			31 December 2009
		Revenue	Capital	Total	Revenue	Capital	Total
7.	Finance costs	£'000	£'000	£'000	£'000	£'000	£'000
	On bank loans and overdrafts	94	142	236	172	259	431
		_______	_______	_______	_______	_______	_______

	Finance costs are charged 40% to revenue and 60% to capital as disclosed in the accounting policies.

		Year ended	Year ended
		31 December 2010	31 December 2009
8.	Dividends on equity shares	£'000	£'000
	Amounts recognised as distributions to equity holders in the year:
	Second interim dividend for 2009 - 3.0p per share (2008 - 2.75p)	3,294	2,982
	First interim dividend for 2010 - 1.25p per share (2009 - 2.0p)	1,387	2,184
	Second interim dividend for 2010 - 1.25p per share (2009 - n/a)	1,403	-
	Third interim dividend for 2010 - 1.25p per share (2009 - n/a)	1,456	-
		_________	_________
		7,540	5,166
		_________	_________

	The fourth interim dividend for 2010, amounting to £2,656,000 (2009 - second interim dividend of £3,294,000), has not been included as a liability in these financial statements as it was announced and paid after 31 December 2010.

	The table below sets out the total dividends paid in respect of the financial year. The revenue available for distribution by way of dividend for the year is £8,257,000 (2009 - £6,044,000).

		2010		2009
		£'000		£'000
	First interim dividend for 2010 - 1.25p per share (2009 - 2.0p)	1,387		2,184
	Second interim dividend for 2010 - 1.25p per share (2009 - 3.0p)	1,403		3,294
	Third interim dividend for 2010 - 1.25p per share (2009 - n/a)	1,456		-
	Fourth interim dividend for 2010 - 2.25p per share (2009 - n/a)	2,656		-
		_________		_________
		6,902		5,478
		_________		_________

9.	Earnings per share
	Basic
	The earnings per Ordinary share is based on the net profit after taxation of £49,150,000 (2009 - profit of £40,860,000) and on 112,948,965 (2009 - 109,030,411) Ordinary shares, being the weighted average number of Ordinary shares in issue during the year.

	The earnings per Ordinary share detailed above can be further analysed between revenue and capital as follows:

		Year ended			Year ended
		31 December 2010			31 December 2009
		Revenue	Capital	Total	Revenue	Capital	Total
	Net profit (£'000)	8,257	40,893	49,150	6,044	34,816	40,860
	Weighted average number of Ordinary shares in issue			112,948,965			109,030,411
	Return per Ordinary share (pence)	7.31	36.21	43.52	5.54	31.93	37.47

	Diluted
	Net profit (£'000)	8,257	40,893	49,150	6,044	34,816	40,860
	Weighted average number of Ordinary shares in issue if Warrants converted			117,382,806			109,030,411
	Return per Ordinary share (pence)	7.03	34.84	41.87	5.54	31.93	37.47

	Diluted
	The calculation of the diluted earnings per Ordinary shares is based on the average traded share price over the period. The calculations indicate that the exercise of Warrants would result in an increase in the weighted average number of Ordinary shares of 4,433,841 to 117,382,806 Ordinary shares. At 31 December 2009, Warrants that could potentially dilute the earnings per share in the future are not included in the calculations of the diluted earnings per share because they are anti-dilutive for the period.

				Year ended	Year ended
				31 December 2010	31 December 2009
10.	Investments held at fair value through profit or loss			£'000	£'000
	Opening valuation			160,413	127,490
	Movements in the year:
	Purchases at cost			35,366	3,334
	Sales	-	proceeds	(21,455)	(4,562)
		-	realised gains/(losses) on sales	9,922	(1,891)
	Increase in investment holdings fair value			32,687	36,042
				_________	_________
	Closing valuation at 31 December 2010			216,933	160,413
				_________	_________

	Closing book cost			144,904	121,071
	Closing investment holdings fair value gains			72,029	39,342
				_________	_________
				216,933	160,413
				_________	_________

				Year ended	Year ended
				31 December 2010	31 December 2009
	The portfolio valuation			£'000	£'000
	Listed on stock exchanges at market valuation:
	Overseas:
		-	equities	205,209	150,671
		-	bonds	11,724	9,742
				_________	_________
	Total			216,933	160,413
				_________	_________

	Gains on held-at-fair-value investments			£'000	£'000
	Realised gains/(losses) on sales of investments			9,922	(1,891)
	Increase in investment holdings fair value			32,687	36,042
				_________	_________
				42,609	34,151
				_________	_________

	All investments are categorised as held at fair value through profit or loss.

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

				Year ended	Year ended
				31 December 2010	31 December 2009
				£'000	£'000
	Purchases			108	8
	Sales			39	13
				_________	_________
				147	21
				_________	_________

		2010	2009
11.	Debtors: amounts falling due within one year	£'000	£'000
	Prepayments and accrued income	1,191	658
	Other receivables	7	4
		_________	_________
		1,198	662


	None of the above assets are past their due date or impaired.

			2010	2009
12.	Creditors: amounts falling due within one year		£'000	£'000
	(a)	Bank loans	10,913	10,558
			_________	_________

		At the year end, the Company's bank loans of HK$81,842,000 and US$6,558,000 equivalent to £6,724,000 (2009 - £6,511,000) and £4,189,000 (2009 - £4,047,000) respectively were drawn down from the £15,000,000 facility with Scotiabank Europe PLC at fixed interest rates of 1.501% (2009 - 2.30%) and 1.546% (2009 - 1.98%), respectively.

		On 22 March 2011 both bank loans were rolled over. At the signing of this report HK$81,842,000 and US$6,558,000 remained drawn down from the £15,000,000 facility with Scotiabank Europe PLC at fixed interest rates of 1.41144% and 1.4598% respectively. Both are repayable on 27 June 2011.

		The bank loans outstanding at 31 December 2010 are valued at the middle rates of exchange at the year end, resulting in cumulative foreign exchange loss of £16,000 (2009 - loss of £224,000) against the original book cost of these loans.

			2010	2009
	(b)	Other payables	£'000	£'000
			_________	_________
		Other payables	444	284
			_________	_________

		2010		2009
13.	Called-up share capital	Number	£'000	Number	£'000
	Authorised
	Ordinary shares of no par value	Unlimited	Unlimited	Unlimited	Unlimited

	Issued and fully paid
	Balance brought forward	109,790,000	109,790	108,440,000	108,440
	Shares issued in the year	7,199,001	7,199	1,350,000	1,350
	Warrants exercised	1,046,061	1,046	-	-
		_________	_________	_________	_________
	At 31 December 2010	118,035,062	118,035	109,790,000	109,790
		_________	_________	_________	_________

	During the year 7,199,001 (2009 - 1,350,000 shares issued) Ordinary shares were issued by the Company at a total consideration received, including transaction costs, of £10,891,000 (2009 - receipt of £1,575,000).

	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.

	During the year 1,046,061 warrants were exercised and converted into Ordinary shares (2009 - nil) at a total consideration received of £1,255,000 (2009 - nil). At 31 December 2010 there were 20,953,939 (2009 - 22,000,000) Warrants in issue. The warrantholders are entitled to subscribe in cash for one Ordinary share at 120p on the subscription date, which is the twentieth business day after the dispatch to Ordinary shareholders of the Company's Annual Report and Accounts or Half-Yearly report for each year, commencing with the twentieth business day after the dispatch to Ordinary shareholders of the Company's Annual Report and Accounts for the year ending 31 December 2010 and ending on the twentieth business day after the dispatch to Ordinary shareholders of the Company's Annual Report and Accounts for the year ending 31 December 2012.

	Following the share issues and warrant exercise 118,035,062 (2009 - 109,790,000) Ordinary shares remain in issue. Further details of the share issues are contained in the Annual Report.

	Voting rights
	In accordance with the Articles of Association of the Company, on a show of hands, every member (or duly appointed proxy) present at a general meeting of the Company has one vote; and, on a poll, every member present in person or by proxy shall have one vote for every 1p nominal amount of Ordinary shares held. In ordinary circumstances warrantholders do not have the right to attend or vote at General Meetings of the Company. Each of the Company's Warrants confers the right to subscribe in cash for one ordinary share at a price of 120p on the twentieth business day after despatch of the Company's Annual or Half-Yearly Reports each year ending on the twentieth business day after despatch of the Annual Report for the year ending 31 December 2012.

		2010	2009
14.	Retained earnings	£'000	£'000
	Capital reserve
	At 1 January 2010	34,528	(513)
	Loans - movement in unrealised currency gain	208	684
	Currency (loss)/gain	(740)	970
	Movement in unrealised fair value	32,687	36,042
	Gain/(loss) on realisation of investments	9,922	(1,891)
	Capital dividend	13	-
	Costs charged to capital	(1,197)	(989)
	Issue of own shares	3,692	225
	Warrant exercise	314	-
		_________	_________
	At 31 December 2010	79,427	34,528
		_________	_________
	Revenue reserve
	At 1 January 2010	6,320	5,442
	Revenue	8,257	6,044
	Dividends paid	(7,540)	(5,166)
		_________	_________
	At 31 December 2010	7,037	6,320
		_________	_________

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

		Net asset value	Net asset values	Net asset value		Net asset values
		per share	attributable	per share		attributable
		2010	2010	2009		2009
	Basic	p	£'000	p		£'000
	Ordinary shares	176.35	208,154	140.63		154,398
		_________	_________	_________		_________

	The basic net asset value per Ordinary share is based on 118,035,062 (2009 - 109,790,000) Ordinary shares, being the number of Ordinary shares in issue at the year end.

		Net asset value	Net asset values		Net asset value		Net asset values
		per share	attributable		per share		attributable
		2010	2010		2009		2009
	Diluted	p	£'000		p		£'000
	Ordinary shares	167.85	233,299		137.19		180,798
		_________	_________		_________		_________

	The calculation of the diluted net asset value per Ordinary share is based on the total number of Ordinary shares in issue at the year end and on the assumption that those Warrants which are not exercised at the year end, amounting to 20,953,939 Warrants as at 31 December 2010 (31 December 2009 - 22,000,000) were exercised on the first day of the financial year at 120p per share, giving a total of 138,989,001 Ordinary shares (2009 - 131,790,000).

16.

Financial instruments

The Company's financial instruments comprise securities, other investments, cash balances and bank overdrafts.

The main risks arising from the Company's financial instruments are (i) market price risk (comprising interest rate risk, currency risk and equity price risk), (ii) liquidity risk, (iii) credit risk and (iv) gearing risk.

The Board regularly reviews and agrees policies for managing each of these risks. The Manager's policies for managing each of these risks are summarised below and have been applied throughout the year. The numerical disclosures exclude short-term debtors and creditors.

(i)

Market price risk

The fair value or future cash flows of a financial instrument held by the Company may fluctuate because of changes in market prices. This market risk comprises three elements - interest rate risk, currency risk and equity price risk.

Interest rate risk

Interest rate movements may affect:

- the fair value of the investments in fixed interest rate securities;

- the level of income receivable on cash deposits;

- interest payable on the Company's variable rate borrowings.

Financial assets

Although the majority of the Company's financial assets comprise equity shares which neither pay interest nor have a stated maturity date, at the year end the Company had a holding in a fixed rate Indonesian Government Bond, in the form of a Currency Loan Note issued by Deutsche Bank, valued at £11,724,000 (2009 - £9,742,000). Bond prices are determined by market perception as to the appropriate level of yields given the economic background. Key determinants include economic growth prospects, inflation, the Government's fiscal position, short-term interest rates and international market comparisons. The Investment Manager takes all these factors into account when making any investment decisions as well as considering the financial standing of the potential investee entity.

Returns from bonds are fixed at the time of purchase, as the fixed coupon payments are known, as are the final redemption proceeds. This means that if a bond is held until its redemption date, the total return achieved is unaltered from its purchase date. However, over the life of a bond the market price at any given time will depend on the market environment at that time. Therefore, a bond sold before its redemption date is likely to have a different price to its purchase level and a profit or loss may be incurred.

Financial liabilities

The Company primarily finances its operations through use of equity, retained profits and bank borrowings. The credit facility for £15 million due to expire on the 31 March 2011 has been extended until 22 March 2012 and details of the terms and conditions of the loan are disclosed in note 12. Current loans drawndown are of HK$81,842,000 (2009 - HK$81,525,000), (equivalent to £6,724,000 at 31 December 2010; 2009 - £6,511,000) were drawn down at an all-in rate of 1.501% (2009 - 2.30%) per annum and US$6,558,000 (2009 - US$6,535,000), (equivalent to £4,189,000 at 31 December 2010; 2009 - £4,047,000) at an all-in rate of 1.546% (2009 - 1.98%) per annum. Both tranches are unsecured. Interest is due on both tranches at the maturity date, being 28 February 2011 respectively. The loans are included in creditors falling due within one year.

The Board actively monitors its bank borrowings. A decision on whether to roll over its existing borrowings will be made prior to their maturity dates, taking into account the Company's policy of not having any fixed, long-term borrowings.

The interest rate profile of the Company (excluding short term debtors and creditors as stated previously) was as follows:

Weighted average

period for which

Weighted average

Floating

Fixed

Non-interest

rate is fixed

interest rate

rate

bearing

At 31 December 2010

Years

£'000

Assets

Indonesian Government Bond

6.56

10.00

11,724

Equities

205,209

Cash at bank - Sterling

1,292

Cash at bank - Philippine Peso

Cash at bank - Taiwan Dollar

_________

________

1,380

11,724

205,209

_________

________

Weighted average

period for which

Weighted average

Floating

Fixed

Non-interest

rate is fixed

interest rate

rate

bearing

Years

£'000

Liabilities

Bank loan - Hong Kong Dollars

0.16

1.50

(6,724)

Bank loan - US Dollars

0.16

1.55

(4,189)

_________

________

(10,913)

_________

________

Weighted average

period for which

Weighted average

Floating

Fixed

Non-interest

rate is fixed

interest rate

rate

bearing

At 31 December 2009

Years

£'000

Assets

Indonesian Government Bond

7.56

10.00

9,742

Equities

150,671

Cash at bank - Sterling

4,165

_________

________

4,165

9,742

150,671

_________

________

Weighted average

period for which

Weighted average

Floating

Fixed

Non-interest

rate is fixed

interest rate

rate

bearing

Years

£'000

Liabilities

Bank loan - Hong Kong Dollars

0.07

2.30

(6,511)

Bank loan - US Dollars

0.07

1.98

(4,047)

_________

________

(10,558)

_________

________

The weighted average interest rate is based on the current yield of each asset, weighted by its market value. The weighted average interest rate on bank loans is based on the interest rate payable, weighted by the total value of the loans.

The floating rate assets consist of cash deposits on call earning interest at prevailing market rates.

The non-interest bearing assets represent the equity element of the portfolio.

All financial liabilities are measured at amortised cost using the effective interest rate method.

Maturity profile

The following table sets out the carrying amount, by maturity, of the Company's financial instruments that are exposed to interest rate risk at the Balance Sheet date:

Within

More than

1 year

2-3 years

4-5 years

5 years

Total

At 31 December 2010

£'000

Fixed rate

Bonds

11,724

Bank loans

(10,913)

_________

________

(10,913)

11,724

811

_________

________

Floating rate

Cash

1,380

_________

________

Within

More than

1 year

2-3 years

4-5 years

5 years

Total

At 31 December 2009

£'000

Fixed rate

Bonds

9,742

Bank loans

(10,558)

_________

________

(10,558)

9,742

(816)

_________

________

Floating rate

Cash

4,165

_________

________

Interest rate sensitivity

The sensitivity analyses demonstrates the sensitivity of the Company's profit/(loss) for the year to a reasonably possible change in interest rates, with all other variables held constant.

The sensitivity of the profit/(loss) for the year is the effect of the assumed change in interest rates on:

- the net interest income for one year, based on the floating rate financial assets held at the Balance Sheet date; and

- changes in fair value of investments for the year, based on revaluing fixed rate financial assets at the Balance Sheet date.

If interest rates had been 100 basis points higher or lower and all other variables were held constant, the Company's:

- profit for the year ended 31 December 2010 would decrease / increase by £22,000 (2009 - decrease / increase by £33,000). This is attributable to the Company's exposure to interest rates on its floating rate cash balances, fixed interest securities and bank loans.

- the Company holds no financial instruments that will have an equity reserve impact.

In the opinion of the Directors, the above sensitivity analyses are not representative of the year as a whole, since the level of exposure changes frequently as part of the interest rate risk management process used to meet the Company's objectives.

Foreign currency risk

A significant proportion of the Company's investment portfolio is invested in overseas securities and the Balance Sheet can be significantly affected by movements in foreign exchange rates. It is not the Company's policy to hedge this risk on a continuing basis. All of the Company's borrowings, as detailed in note 12, are in foreign currency as at 31 December 2010.

The revenue account is subject to currency fluctuation arising on overseas income. The Company does not hedge this currency risk.

The fair values of the Company's monetary items that have foreign currency exposure at 31 December are shown below. Where the Company's equity investments (which are non monetary items) are priced in a foreign currency, they have been included within the equity price risk sensitivity analysis so as to show the overall level of exposure.

31 December 2010

31 December 2009

US$

HK$

Other

US$

HK$

Other

£'000

Investments at fair value through profit or loss that are monetary items

11,724

9,742

Borrowings under the multi-currency loan facility

(4,189)

(6,724)

(4,047)

(6,511)

_______

______

_______

______

Foreign currency exposure on net monetary items

7,535

(6,724)

5,695

(6,511)

Investments at fair value through profit or loss that are equities

16,785

188,424

10,178

140,493

_______

______

_______

______

Total net foreign currency exposure

7,535

10,061

188,424

5,695

3,667

140,493

_______

______

_______

______

The above year end amounts are not representative of the exposure to risk during the year, because the levels of monetary foreign currency exposure change significantly throughout the year.

Foreign currency sensitivity

The following table details the Company's sensitivity to a 10% increase and decrease in sterling against the major foreign currencies in which the Company has exposure on its monetary items. Monetary items include the bond holding which is measured at fair value through profit and loss. The sensitivity analysis includes foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates.

If sterling had weakened against the currencies shown, this would have had the following effect:

31 December 2010

31 December 2009

US$

HK$

Other

US$

HK$

Other

£'000

Statement of Comprehensive Income - profit after taxation

- Revenue return

107

946

708

- Capital return

837

(747)

633

(723)

_______

______

_______

______

Total profit after taxation for the year

944

(666)

946

725

(682)

708

_______

______

_______

______

Equity

944

(666)

946

725

(682)

708

_______

______

_______

______

If sterling had strengthened against the currencies shown, this would have had the following effect:

31 December 2010

31 December 2009

US$

HK$

Other

US$

HK$

Other

£'000

Statement of Comprehensive Income - profit after taxation

- Revenue return

(88)

(66)

(774)

(75)

(33)

(584)

- Capital return

(685)

611

(518)

592

_______

______

_______

______

Total profit after taxation for the year

(773)

545

(774)

(593)

559

(584)

_______

______

_______

______

Equity

(773)

545

(774)

(593)

559

(584)

_______

______

_______

______

In the opinion of the Directors, the above sensitivity analyses are not representative of the year as a whole, since the level of exposure changes frequently as part of the currency risk management process used to meet the Company's objectives.

Equity price risk

Equity price risk (ie changes in market prices other than those arising from interest rate or currency risk) may affect the value of the Company's quoted equity investments.

Management of the equity risk

It is the Board's policy to hold an appropriate spread of investments in the portfolio in order to reduce the risk arising from factors specific to a particular country or sector. The allocation of assets to international markets and the stock selection process, as detailed in the Annual Report, both act to reduce market risk. The Manager actively monitors market prices throughout the year and reports to the Board, which meets regularly in order to review investment strategy. The investments held by the Company are listed on various stock exchanges worldwide.

Concentration of exposure to equity price risks

A geographic analysis of the Company's investment portfolio is shown below, which shows that all of the investments' value is in the Asia Pacific region. It should be recognised that an investment's country of domicile or of listing does not necessarily equate to its exposure to the economic conditions in that country.

Equity price risk sensitivity

The following table illustrates the sensitivity of the profit after taxation for the year and the equity to an increase or decrease of 10% in the fair values of the Company's equities. This level of change is considered to be reasonably possible based on observation of current market conditions. The sensitivity analysis is based on the Company's equities at each Balance Sheet date, with all other variables held constant.

The equity price risk sensitivity incorporates the equity foreign exchange sensitivity analysis.

2010

2009

Increase in

Decrease in

Increase in

Decrease in

fair value

£'000

Statement of Comprehensive Income - profit after taxation

Revenue return - increase/(decrease)

Capital return - increase/(decrease)

20,521

(20,521)

15,067

(15,067)

________

Total profit after taxation - increase/(decrease)

20,521

(20,521)

15,067

(15,067)

________

Equity

20,521

(20,521)

15,067

(15,067)

________

(ii)

Liquidity risk

This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities, which stood at £11,357,000 at the year end.

Liquidity risk is not considered to be significant as the Company's assets comprise mainly cash and readily realisable securities, which can be sold to meet funding commitments if necessary and these amounted to £1,380,000 and £216,933,000 at the year end respectively. Short-term flexibility is achieved through the use of loan and overdraft facilities.

(iii)

Credit risk

This is failure of the counter party to a transaction to discharge its obligations under that transaction that could result in the Company suffering a loss.

The risk is not significant, and is managed as follows:

- where the investment manager makes an investment in a bond, corporate or otherwise, the credit rating of the issuer is taken into account so as to minimise the risk to the Company of default. The Company has a holding in a CLN issued by Deutsche Bank AG. The issuer currently has a credit rating at Moody's of Aa1;

- investment transactions are carried out with a large number of brokers, whose credit rating of which is taken into account so as to minimise the risk to the Company of default;

- the risk of counterparty exposure due to failed trades causing a loss to the Company is mitigated by the review of failed trade reports on a monthly basis. In addition, the Custodian carries out a stock reconciliation to third party administrators' records on a monthly basis to ensure discrepancies are picked up on a timely basis. The Manager's Compliance department carries out periodic reviews of the Custodian's operations and reports its finding to the Manager's Risk Management Committee. It is the Manager's policy to trade only with A- and above (Long Term rated) and A-1/P-1 (Short Term rated) counterparties.

- cash is held only with reputable banks with high quality external credit enhancements;

- none of the Company's financial assets are secured by collateral or other credit enhancements.

Credit risk exposure

In summary, compared to the amounts included in the Balance Sheet, the maximum exposure to credit risk at 31 December was as follows:

2010

2009

Balance

Maximum

Balance

Maximum

Sheet

exposure

Sheet

exposure

£'000

Non-current assets

Investments at fair value through profit or loss

216,933

11,724

160,413

9,742

Current assets

Cash at bank

1,380

4,165

________

218,313

13,104

164,578

13,907

________

None of the Company's financial assets are past due or impaired.

(iv)

Gearing risk

The Company's policy is to increase its exposure to equity markets through the judicious use of borrowings. When borrowings are invested in such markets, the effect is to magnify the impact on shareholders' funds of changes, both positive and negative, in the value of the portfolio.

During the year the Company's borrowings were short-term loans, details of which can be found in note 12.

The loans are valued at amortised cost, using the effective interest rate method in the financial statements. The Board regulates the overall level of gearing by raising or lowering cash balances.

Fair value of financial assets

Investments held at fair value through profit or loss are valued at their quoted bid prices which equate to their fair values. The Directors are of the opinion that the financial assets are stated at fair value in the Balance Sheet and considers that this is equal to the carrying amount.

Fair values of financial liabilities

The fair value of borrowings as at the 31 December 2010 has been estimated at £10,913,000 which is the same as the carrying value due to their short term nature. At 31 December 2009 the fair value was £10,558,000 which is the same as the carrying value.

17.	Capital management policies and procedures
	The Company's capital management objectives are:
	- to ensure that the Company will be able to continue as a going concern, and
	- to maximise the income and capital return to its equity shareholders through an appropriate balance of equity capital and debt. The policy is that debt should not exceed 25% of net assets.

	The Company's capital at 31 December comprises:
		2010	2009
		£'000	£'000
	Debt
	Borrowings under the multi-currency loan facility	10,913	10,558
		_________	_________

		2010	2009
		£'000	£'000
	Equity
	Equity share capital	118,035	109,790
	Retained earnings and other reserves	90,119	44,608
		_________	_________
		208,154	154,398
		_________	_________
	Debt as a % of net assets	5.24	6.84

	The Board, with the assistance of the Investment Manager monitors and reviews the broad structure of the Company's capital on an ongoing basis. This review includes:
	- the planned level of gearing, which takes account of the Manager's views on the market;
	- the need to buy back equity shares for cancellation, which takes account of the difference between the net asset value per share and the share price (ie the level of share price discount or premium);
	- the need for new issues of equity shares; and
	- the extent to which revenue in excess of that which is required to be distributed should be retained.

	The Company's objectives, policies and processes for managing capital are unchanged from the preceding accounting period.

	The Company is subject to the following externally imposed capital requirements:
	- the bank borrowings under the Company's credit facility with Scotiabank Europe PLC are not to exceed 25% of net assets as measured in accordance with the policies used in the annual financial statements;
	- under the Company's Articles of Association borrowings must not exceed an amount equal to the adjusted total of capital and reserves.

	These requirements are unchanged since last year, and the Company has complied with them during both the current and prior year.

18.	Related party transaction
	Mr H Young is a director of Aberdeen Asset Management Asia Limited (AAM Asia), which is a subsidiary of Aberdeen Asset Management PLC (AAM). Aberdeen Private Wealth Management Limited has an agreement to provide management services to the Company, which it has sub-delegated to AAM Asia. AAM has an agreement to provide administration and company secretarial services to the Company.

	The terms of these agreements are outlined in notes 5 and 6.

19.	Fair value hierarchy
	The Company adopted the amendments to IFRS 7 'Financial Instruments: Disclosures' effective from 1 January 2009. These amendments require 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 shall have the following levels:

	- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
	- Level 2: inputs other than quoted prices included within Level 1 that are observable for the assets or liability, either directly (ie as prices) or indirectly (ie derived from prices); and
	- Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

	The financial assets and liabilities measured at fair value in the Balance Sheet are grouped into the fair value hierarchy at 31 December 2010 as follows:

			Level 1	Level 2	Level 3	Total
		Note	£'000	£'000	£'000	£'000
	Financial assets at fair value through profit or loss
	Quoted equities	a)	205,209	-	-	205,209
	Quoted bonds	b)	11,724	-	-	11,724
			_______	_______	_______	_______
	Net fair value		216,933	-	-	216,933
			_______	_______	_______	_______
	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.

20.	Events after the reporting period
	A further 775,000 Ordinary shares have been issued by the Company subsequent to the reporting period end at a total consideration received, including transaction costs, of £1,276,000. Following the share issues 118,810,062 Ordinary shares remain in issue.

Additional Notes:

The financial information set out above does not constitute the Company's statutory accounts for the year ended 31 December 2010. The annual audited accounts for 2010 will be finalised on the basis of the financial information presented by the Directors in this annual financial report announcement and will be delivered to the Jersey Financial Services Commission in due course.

The Annual Report will be posted to Shareholders in April and further copies may be obtained from the registered office, No.1 Seaton Place, St Helier, Jersey JE4 8YJ and on the Company's website* www.asian-income.co.uk.

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

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

Aberdeen Private Wealth Management Limited

Secretary

30 March 2011

10. INVESTMENT PORTFOLIO - TEN LARGEST INVESTMENTS

As at 31 December 2010

			Valuation	Total	Valuation
		Country	2010	assets	2009
Company	Sector	of activity	£'000	%{B}	£'000{C}
DB Indo CLN 10% 22/07/17 IDR 'FR28'
Credit linked note issued by Deutsche Bank and linked to the Indonesia Government Bond 10% 07/17 as the underlying asset.	Government Securities	Indonesia	11,724	5.4	9,742
Taiwan Semiconductor
The world's largest dedicated semiconductor foundry, it provides wafer manufacturing, wafer probing, assembly and testing, mask production and design services.	Semiconductors & Semiconductor Equipment	Taiwan	11,319	5.2	7,129
Taiwan Mobile
A leading telecommunications company in Taiwan offering mobile, fixed-line, cable TV and broadband services, it has a prudent management and pays a good dividend.	Wireless Telecommunication Services	Taiwan	10,096	4.6	7,988
Swire Pacific
A Hong Kong-listed conglomerate, with interests in aviation (via Cathay Pacific), property, beverages, marine services and industrial activities	Real Estate Management & Development	Hong Kong	9,369	4.3	7,459
Oversea-Chinese Banking Corporation
A well-run Singapore lender seeking to generate additional value for shareholders by restructuring assets and via regional expansion. The bank has weathered the economic downturn well with good asset quality and is positioned for growth, given its high capital adequacy ratio.	Commercial Banks	Singapore	9,015	4.1	7,337
QBE Insurance Group
One of Australia's leading general insurance and reinsurance companies. Its business is diversified geographically across five locations, and it has a good, long-term track record of generating shareholder returns.	Insurance	Australia	8,838	4.0	7,049
United Overseas Bank
A well-managed Singapore bank with a strong capital base and impressive cost-to-income ratio. It has also embarked on a selective regional expansion.	Commercial Banks	Singapore	8,076	3.7	7,725
Guinness Anchor
The market leader in Malaysia's beer and stout industry, with brand names including Tiger, Guinness and Heineken.	Beverages	Malaysia	7,741	3.5	4,651
BHP Billiton
The Australian diversified natural resources company is a top quality mining stock with a solid balance sheet and quality assets.	Metals & Mining	Australia{A}	7,653	3.5	-
British American Tobacco
Manufacturer & marketer of tobacco products in Malaysia through BAT's international brands such as Dunhill and Lucky Strike.	Tobacco	Malaysia	7,585	3.5	6,967

Top ten investments			91,416	41.8

{A}Incorporated in and listing held in United Kingdom

INVESTMENT PORTFOLIO - OTHER INVESTMENTS

As at 31 December 2010			Valuation	Total	Valuation
			2010	assets	2009
Company	Sector	Country	£'000	%	£'000{C}
Digi Com	Infrastructure Project Companies	Malaysia	6,599	3.0	4,266
Siam Makro	Food & Staples Retailing	Thailand	6,265	2.9	2,827
Singapore Technologies Engineering	Aerospace & Defence	Singapore	6,224	2.8	4,859
Australia & New Zealand Banking Group	Commercial Banks	Australia	5,886	2.7	5,731
Siam Cement	Construction Material	Thailand	5,836	2.7	8,656
Telstra	Diversified Telecommunications	Australia	5,754	2.6	4,762
Commonwealth Bank of Australia	Commercial Banks	Australia	5,650	2.6	6,867
PetroChina	Oil, Gas & Consumable Fuels	China	5,394	2.5	4,833
Singapore Telecommunications	Diversified Telecommunications	Singapore	5,140	2.3	4,622
Public Bank	Commercial Banks	Malaysia	5,014	2.3	4,342
Top twenty investments			149,178	68.2
Woolworths	Food & Staples Retailing	Australia	4,658	2.1	-
Hong Leong Bank	Commercial Banks	Malaysia	4,478	2.0	3,438
Advanced Information Services	Wireless Telecommunication Services	Thailand	4,472	2.0	3,978
Hong Leong Finance	Consumer Finance	Singapore	4,306	2.0	3,972
Singapore Post	Air Freight & Logistics	Singapore	4,283	2.0	3,243
Singapore Press Holdings	Media	Singapore	4,266	2.0	4,290
Bank of Philippine Islands	Commercial Banks	Philippines	4,258	1.9	2,291
Giordano International	Speciality Retail	Hong Kong	3,964	1.8	1,969
Takeda Pharmaceutical	Pharmaceutical	Japan	3,775	1.7	-
SP Ausnet	Utilities	Australia	3,759	1.7	-
Top thirty investments			191,397	87.4
SBS Transit	Road & Rail Operator	Singapore	3,266	1.5	2,454
Telecom Corp of New Zealand	Diversified Telecommunications	New Zealand	2,914	1.3	3,047
Venture Corp	Electronic Equipment & Instruments	Singapore	2,909	1.3	-
BEC World	Media	Thailand	2,837	1.3	-
Pos Malaysia	Air Freight & Logistics	Malaysia	2,776	1.3	1,548
Lafarge Malayan Cement	Construction Material	Malaysia	2,527	1.2	-
Telekomunikasi Indonesia	Diversified Telecommunications	Indonesia	2,472	1.1	3,497
Hana Microelectronics	Electronic Equipment & Instruments	Thailand	2,384	1.1	1,739
AIA	Insurance	Hong Kong	2,032	0.9	-
Kingmaker Footwear	Textiles, Apparel & Luxury Goods	Hong Kong	1,419	0.6	750
Total value of investments			216,933	99.0
Net current assets{A}			2,134	1.0
Total assets			219,067	100.0

{A} Excluding bank loans of £10,913,000.
{C} Purchases and/or sales effected during the year will result in 2009 and 2010 values not being directly comparable.

11 RESULTS

Financial Highlights

	31 December 2010	31 December 2009	% change
Total Assets	£219,067,000	£164,956,000	+32.8
Total Equity Shareholders' funds (Net Assets)	£208,154,000	£154,398,000	+34.8
Share price (mid market)	170.25p	136.50p	+24.7
Net Asset Value per share (basic)	176.35p	140.63p	+25.4
Net Asset Value per share (diluted)	167.85p	137.19p	+22.3
Premium/(discount) to diluted Net Asset Value	1.4%	(0.5%)
MSCI AC Asia Pacific ex Japan Index (currency adjusted, capital gains basis)	572.28	482.62	+18.6
Actual gearing	4.6%	4.1%
Potential gearing	5.2%	6.8%

Dividend and earnings
Total return per share^A	43.52p	37.47p
Revenue return per share^A	7.31p	5.54p	+31.9
Dividends per share^B	6.00p	5.00p	+20.0
Dividend cover	1.22	1.11
Revenue reserves^C	£4.38m	£3.03m

Operating costs
Total expense ratio	1.37%	1.44%

^A Measures the relevant earnings for the year divided by the weighted average number of Ordinary shares in issue (see Statement of Comprehensive Income).
^B The figure for dividends reflects the years in which they were earned (see note 8).
^C The revenue reserves figure takes account of the fourth interim dividend amounting to £2,656,000 (2009 - second interim amounting to £3,294,000).

Performance (total return)

	1 year	3 year	Since inception^A
	% return	% return	% return
Share price	+30.8	+77.5	+101.9
Net Asset Value (diluted)	+28.3	+56.1	+102.4
MSCI AC Asia Pacific ex Japan Index (currency adjusted)	+22.1	+26.5	+104.4

^A Inception being 20 December 2005.

Dividends

	Rate per share	xd date	Record date	Payment date
First interim 2010	1.25p	28 April 2010	30 April 2010	19 May 2010
Second interim 2010	1.25p	21 July 2010	23 July 2010	15 August 2010
Third interim 2010	1.25p	27 October 2010	29 October 2010	19 November 2010
Fourth interim 2010	2.25p	19 January 2011	21 January 2011	18 February 2011
2010	6.00p
First interim 2009	2.00p	22 July 2009	24 July 2009	28 August 2009
Second interim 2009	3.00p	20 January 2010	22 January 2010	19 February 2010
2009	5.00p

This information is provided by RNS

The company news service from the London Stock Exchange

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