HFL – Results for the half-year ended 28 February 2022

Page 1 of 17

LEGAL ENTITY IDENTIFIER: 2138008DIQREOD38O596

HENDERSON FAR EAST INCOME LIMITED
Unaudited results for the half-year ended 28 February 2022

This announcement contains regulated information


INVESTMENT OBJECTIVE
The Company seeks to provide shareholders with a growing total annual dividend per share, as well as capital
appreciation, from a diversified portfolio of investments from the Asia Pacific region.

PERFORMANCE
Total return performance
(including dividends reinvested and excluding transaction costs)
6 months
%
1 year
%
3 years
%
5 years
%
10 years
%
NAV
1
-0.1 -0.3 6.3 14.4 76.7
Share price
2
-0.7 -3.0 3.7 13.7 76.5
AIC sector
6
average NAV -1.5 -1.8 25.4 39.9 133.3
FTSE All-World Asia Pacific ex Japan Index* -6.3 -6.5 25.2 36.6 113.0
MSCI AC Pacific ex Japan High Dividend Yield Index* 3.1
6.6 16.0 22.9 88.2


Financial highlights
at
28 February 2022
at
31 August 2021
NAV per ordinary share
287.40p 299.58p
Share price 288.00p 301.50p
Net assets £435,607,000 £452,644,000
Premium
3
0.2% 0.6%
Dividend yield 8.2%
4
7.8%
5



*The Company does not have a formal benchmark. It uses the FTSE All-World Asia Pacific ex Japan and MSCI AC Asia Pacific
ex Japan High Dividend Yield indices (sterling adjusted with dividends reinvested) for reference purposes only.


1. Net asset value per ordinary share total return.
2. Share price total return using mid-market closing price.
3. The premium expresses, as a percentage, the difference between the closing mid-market share price and net asset value, including current year
revenue, as at the period end date.
4. Dividend yield based on a share price of 288.00p and dividends for the twelve months to 28 February 2022 totalling 23.60p per ordinary share.
5. Dividend yield based on a share price of 301.50p and dividends for the twelve months to 31 August 2022 totalling 23.40p per ordinary share.
6. The AIC sector is the Asia Pacific Equity Income sector.

Sources: Morningstar Direct, Refinitiv Datastream

Page 2 of 17

INTERIM MANAGEMENT REPORT

CHAIRMAN’S STATEMENT

Performance
Performance for the six months to 28 February 2022 was mixed, with NAV total return performance negative 0.1%,
which was markedly better than the FTSE World Asia Pacific ex Japan Index of negative 6.3%, but behind the MSCI
AC Asia Pacific ex Japan High Dividend Yield Index of 3.1%. This reflected the rotation from growth to value,
alongside the portfolio’s increased allocation to the financials, materials and energy sectors. The underperformance of
the high yield index was predominantly down to the oversized weighting of BHP following the consolidation of the UK
stock line into the Australian listing.

Dividends
The first and second interim dividends for the current financial year have been declared in the amount of 5.90p per
ordinary share each. This represents a 1.7% increase on the dividends paid or payable for the same period last year.
The period saw the Company’s dividend yield finish at 8.2%.

Outlook
Investors always face challenges, but it is even more difficult to remain focused when in the midst of a humanitarian
crisis. Volatility is high and likely to remain so. The consequences of the war in Ukraine are largely unknowable. These
shocking events tend to draw attention away from personal considerations in sympathy for those in severe distress.

We cannot ignore, however, the risks and opportunities we are now exposed to. This crisis coming so close to the
pandemic is a further serious blow to global growth. The OECD recently noted ‘The moves in commodity prices and
financial markets seen since the outbreak of the war could, if sustained, reduce global GDP growth by over 1
percentage point in the first year, with a deep recession in Russia, and push up global consumer price inflation by
approximately 2.5 percentage points’*.

The impact of these developments will be felt unevenly throughout the world. Weak global growth is a negative for
exporting countries, significantly higher commodity prices a negative for importers, and lower disposable incomes and
uncertainties negative for consumption levels and tourism. Rising rates of inflation will be a problem for everybody.

We are investors in the Asia Pacific region and what does it mean for us? The role of Russia and Ukraine in the global
economy is small accounting for only about 2% of global GDP. However, they are major suppliers of commodities to
the world and supply disruption will cause some severe problems. Russia and Ukraine together account for about 30%
of global exports of wheat, 20% for corn, mineral fertilisers and natural gas and 11% for oil. Indonesia and the
Philippines are dependent on wheat imports and Vietnam is dependent on corn. The impact on the Middle East will be
severe as well. Farmers everywhere will be impacted by much higher fertilizer prices and supply disruption.

A bleak picture indeed. However, there are some bright spots. China adopted more restrictive monetary and fiscal
policies in late 2020 but is now easing policies and while credit growth has been falling it now appears to be bottoming
out. This will support growth in China and should have a cushioning effect on the region and on the rest of the world.
China provided significant support to the global economy during the 2008 financial crisis and played an important part
in helping to avoid a global depression. It seems it could play a similar role today, although the recent lockdowns
following Covid-19 outbreaks may delay this.

The outlook for us is quite encouraging. We have a large number of companies in a diverse geographical setting to
choose from. To achieve our dividend objective, we invest largely in value shares paying significant levels of dividend;
this has been something of a negative for our NAV total return performance in the past two years as investor
preferences largely concentrated on growth shares with low dividend payouts. In a rising inflation environment value
and income become much more to the fore in meeting investor needs. Our concentration on value is now working in
our favour. Since the beginning of the 2022 calendar year, the NAV total return has risen to 4.9% and the dividend
income generated by the portfolio has risen 14.7% compared to the same period last year.

As noted by the Fund Managers, we have significant holdings in industrial metals and energy. Prices of copper,
aluminum, nickel, steel and others have risen sharply on the back of strong demand and constrained supply. Demand
levels reflect increased global fiscal stimulus via infrastructure spending and long-term structural growth from the
transition to a low carbon world. An example of this was demonstrated by a recent report from Blackrock World Mining.
The report compared the resources to build a 100MW natural gas fired turbine with a wind farm equivalent. Twenty
wind turbines would need to be installed requiring 100 times more iron ore, 25 times more concrete and 10 times more
specialty metals including copper. This is a measure of the challenge confronting the world and the strength of demand
for industrial metals.

The supply of industrial metals has been constrained by significant underinvestment in recent years. Short supply and
high demand will support rising prices for some time and mining companies are experiencing high levels of free cash
flow which they are paying back to shareholders in the form of higher dividends and/or share buy backs. This is
welcome news to us.

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In summary, we are in an environment that supports our investment strategy of producing attractive levels of income
for our shareholders with an enhanced prospect of sound capital performance. The recent shift towards more value
oriented investments should be a positive factor in portfolio returns as we look ahead to the balance of our financial
year.



John Russell
Chairman
27 April 2022


*Economic and Social Impacts and Policy Implications of the War in Ukraine, March 2022

Page 4 of 17


FUND MANAGERS’ REPORT

Review
Despite another extraordinary period, global equity markets, with a few exceptions, have proved to be remarkably
resilient. Over the six months to 28 February 2022, the MSCI World index is down almost 2% in sterling terms, the S&P
is practically unchanged, while the FTSE 100 is up just over 6%. In contrast, Asia Pacific was less resilient with the
FTSE All World Asia Pacific ex Japan Index falling 6.3%.

For most of the last six months equity markets have been struggling with the expectation of rising interest rates, a
reversal of central bank asset purchases and inflation which has moved from being transitory to something more long
lasting in nature. Although most of the world is now learning to live with Covid-19, the impact on supply chains through
worker absence and logistics disruptions has compounded the impact on prices with effects likely to last well into 2022
and possibly beyond. The Russian invasion of Ukraine in February this year has taken these constraints to another
level with spikes in prices of oil, gas, industrial metals and agricultural products putting further pressure on the cost of
living, especially in Europe, the UK and the US. The resilience of equity markets is most likely a function of excess
liquidity and the diminishing attractiveness of bonds and cash in an increasingly negative interest rate environment. It
remains to be seen whether this resilience will continue as rates rise and liquidity is withdrawn.

As a net importer of most of these products, Asia is not immune to inflationary pressures from rising energy, metals
and food prices but in most cases core inflation remains some way below the levels in developed markets. Although
this will most likely rise in the region, real rates will remain close to positive while the constraints in terms of labour,
logistics and asset prices are not nearly as acute as elsewhere.

The best performing markets over the period were in South Asia as the gradual easing of Covid-19 restrictions spurred
expectations of the long-awaited re-opening. Thailand, the Philippines and Malaysia all posted positive returns while
Indonesia rose almost 20% in sterling terms as the rise in demand for fossil fuels boosted coal prices – one of the
country’s major exports. The performance of North Asia was much weaker as China and Korea fell by 14.6% and
13.8% respectively while Taiwan posted a small gain. At the sector level, only energy, financials and utilities posted
positive returns with consumer and health care down over 20%.

The weakness in China continues to dominate the region. From its peak in February 2021 the MSCI China Index has
fallen 34% in US dollar terms while the S&P Index by comparison has risen 13%. The combination of regulatory
uncertainty, property defaults, Covid-19 disruptions and a slowing economy have combined to undermine investors
faith in Chinese equities. While the government has now moved to a stimulatory footing, the zero tolerance to Covid-19
and ongoing lockdowns are stifling recovery. The confirmation of a target GDP growth of 5.5% for 2022 looks
increasingly unlikely unless restrictions are eased and stimulus accelerated.

Performance
The NAV total return declined 0.1% in sterling terms over the period, outperforming the FTSE All World Asia Pacific ex
Japan Index which fell 6.3%. The MSCI AC Asia Pacific ex Japan High Dividend Yield Index rose 3.1%, boosted by an
oversize weighting of BHP as the UK shares switched to the Australian line and a greater exposure to the Taiwanese
technology sector.

The switch from growth to value as a driver of returns was beneficial for the Company’s portfolio while allocation to
financials, materials and energy added value. At the country level, the reduction in the weighting to China in favour of
Australia was positive for absolute and relative performance.

At the stock level the most significant contributors to performance were from the financials and energy sectors. CTBC
in Taiwan, United Overseas Bank in Singapore, and KB Financial in Korea rose 20%, 19% and 12% respectively, but
the star of the show was Australian oil and gas company Woodside Petroleum which rose 48%. Detractors from
performance were Chinese mid-caps that were caught up in the issues described earlier.

Revenue
Despite a difficult period for income in 2020, the recovery in 2021 and into 2022 has been impressive. With Covid-19
disruptions generally easing, companies are feeling more confident on committing to dividend increases. This is
especially true of the energy and material sectors which were already benefiting from tight supply and increased pricing
prior to the Russian invasion of Ukraine. Banks are also returning to more progressive pay-out policies notably in
Australia, Korea and Singapore while we have been pleasantly surprised by some significant uplift in pay-out ratios in
China and Taiwan.

Dividend income from the portfolio rose 14.7% compared to the same period last year while total income rose 11.9%
as the contribution from option income was 10.6% lower as less options were written. Revenue per share rose 15.3%
reflecting a lower tax charge and a reduced management fee despite a modest increase in shares in issue.

Strategy
Throughout the period we have added exposure to the energy, financials and materials sectors and reduced exposure
to China and real estate. The case for energy and materials is not based on demand, but in how the lack of investment

Page 5 of 17

in recent years would lead to supply shortages, rising prices, abundant cash flow and higher dividends. These trends
were beginning to materialise with oil prices moving to US$80 a barrel but have been brought more into focus following
the Russian invasion of Ukraine. Our preference in this area is for gas companies rather than oil and miners of the
industrial metals, such as copper, that will be in great demand in the transition towards more energy efficient power
production and transportation. We own BHP Group Limited, Rio Tinto Limited, Woodside Petroleum, Santos and OZ
Minerals in Australia, Zijin Mining in China as well as ONGC and Hindustan Petroleum in India which are exposed to
these themes.

Throughout most of 2020 and 2021, banks globally have been impacted by low interest rates and a fairly benign
economic recovery. With inflation rising and economies re-opening the pressure on interest rates to rise is becoming
more intense. At the end of 2021 we added to our positions in banks in Korea, Taiwan, Singapore and Australia in
order to benefit from these improving trends in profitability. We added KB Financial in Korea, CTBC and Yuanta in
Taiwan, UOB in Singapore and ANZ in Australia.

With input prices likely to remain elevated for some considerable time, we continue to prefer price makers rather than
price takers. This leads us to favour upstream producers while remaining cautious of manufacturers and consumer
facing companies that don’t have pricing power. Our high weights in energy and materials and low weights in consumer
sectors and industrials, reflect these views.

While interest rate increases are positive for banks, they are less so for real estate leading to the sale of Stockland in
Australia and reduced exposure to REITS in Singapore. Over the period, we also reduced exposure to China by selling
Venustech, China Construction Bank and Topsports as it became increasingly clear that recovery in China would take
longer than originally expected.

Outlook
We are cautiously optimistic on the outlook for Asia Pacific equities. Following a period of underperformance Asia looks
cheap compared to its peers while earnings look to be well underpinned by fundamentals. Dividends remain the ‘bright
spot’ with dividend growth likely to exceed expectations as companies regain some confidence following an uncertain
couple of years.

China remains key for the region’s success. At some point in 2022, once the Covid-19 outbreak has been contained,
the Chinese authorities will embark on a concerted effort to revive the economy. This will be focused on incentivising
consumption, promoting innovation alongside the more traditional means of infrastructure spending. Following the
period of underperformance, there is a lot of value in the Chinese equity market and once there is greater clarity on
policy, especially regarding regulations, property market solvency and living with Covid-19, we will look to add
exposure to the only major economy that is likely to be loosening economic conditions in 2022.

We are also positive on the outlook for yield as an investment style. The last few years have been difficult with the
focus clearly on thematics and growth at the expense of fundamentals. The spike in inflation and the impending rise in
interest rates has prompted a change in perception as expensive growth stocks become more difficult to justify and
new areas of investment lose their lustre. We expect dividend yield as a style to perform better as we go through the
year as inflation erodes the returns available to savers. The spread of dividend yield over cash and bonds is still wide
and attractive for pension funds, insurance companies and individual investors alike. The demand from aging
populations should be positive for the share prices of high and sustainable yielding companies which make up a large
part of the portfolio.


Mike Kerley and Sat Duhra
Fund Managers
27 April 2022

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PRINCIPAL RISKS AND UNCERTAINTIES
The principal risks and uncertainties associated with the Company’s business can be divided into the following main
areas:

• Investment and strategy – adopting an inappropriate investment strategy or underperformance for an
extended period leading to a wide discount and hostile shareholders;
• Accounting, legal and regulatory – failure to maintain accurate accounting records or a breach of legal or
regulatory requirements resulting in financial or reputational loss;
• Operational – disruption to or failure of a third-party service provider leading to loss of shareholder value or
reputational damage;
• Financial – changes in market prices, currency exchange rates, interest rates or poor liquidity or counterparty
management leading to a loss of shareholder value.

Further information on these risks and how they are managed is given in the annual report for the year ended 31
August 2021. In the view of the Board these principal risks and uncertainties are as applicable to the remaining six
months of the financial year as they were to the six months under review.



DIRECTORS’ RESPONSIBILITY STATEMENT
The directors (listed in note 14) confirm that, to the best of their knowledge:

• the unaudited condensed set of financial statements has been prepared in accordance with IAS 34 – Interim
Financial Reporting (‘IAS 34’) and gives a true and fair view of the assets, liabilities, financial position and profit or
loss of the Company as required by Disclosure Guidance and Transparency Rule (‘DTR’) 4.2.4R;

• the interim management report includes a fair review of the information required:

− by DTR 4.2.7R (indication of important events during the first six months of the financial year, and their impact
on the unaudited condensed set of financial statements, and a description of principal risks and uncertainties
for the remaining six months of the year); and

− by DTR 4.2.8R (disclosure of related party transactions that have taken place in the first six months of the
current financial year and that have materially affected the financial position or the performance of the
Company during the period; and any changes in related party transactions described in the latest annual report
that could have an impact in the first six months of the current financial year).

Legislation in Jersey governing the preparation and dissemination of financial statements may differ from legislation in
other jurisdictions. The directors remain responsible for establishing and controlling the process for doing so, and for
ensuring that the financial statements are complete and unaltered in any way.




For and on behalf of the Board
John Russell
Chairman
27 April 2022

Page 7 of 17

INVESTMENT PORTFOLIO at 28 February 2022


Company
Country of
incorporation Sector
Valuation
£'000
% of
Portfolio
1 Rio Tinto Limited Australia Basic Materials 22,206 4.94
2 Samsung Electronics
1
South Korea Technology 17,403 3.87
3 Macquarie Group Australia Financials 16,355 3.64
4 BHP Group Limited Australia Basic Materials 15,239 3.39
5 Macquarie Korea Infrastructure Fund South Korea Financials 15,209 3.39
6 Telekom Indonesia Persero Indonesia Telecommunications 14,835 3.30
7 Woodside Petroleum Australia Energy 14,233 3.17
8 Santos Australia Energy 13,712 3.05
9 VinaCapital Vietnam Opportunity Fund Vietnam Financials 13,690 3.05
10
Digital Telecommunications Infrastructure
Fund
Thailand Telecommunications 13,676 3.04

Top Ten Investments

156,558 34.84


11 Taiwan Semiconductor Manufacturing
2
Taiwan Technology 13,455 2.99
12 KB Financial South Korea Financials 12,807 2.85
13 Spark New Zealand New Zealand Telecommunications 12,423 2.77
14 United Overseas Bank Singapore Financials 12,348 2.75
15 HKT Trust & HKT Hong Kong Telecommunications 11,676 2.60
16 Quanta Computers Taiwan Technology 11,528 2.57
17 LG Corp South Korea Industrials 10,889 2.42
18 CTBC Financial Holdings Taiwan Financials 10,882 2.42
19 CITIC Securities China Financials 10,654 2.37
20 SK Telekom
2
South Korea Telecommunications 10,588 2.36

Top Twenty Investments

273,808 60.94


21 Oil & Natural Gas Corporation India Energy 10,341 2.30
22 Industrial Bank Co China Financials 9,832 2.19
23 Singapore Telecommunications Singapore Telecommunications 9,721 2.16
24 KT Corp South Korea Telecommunications 9,411 2.10
25 Yuanta Financial Taiwan Financials 9,367 2.09
26 OZ Minerals Australia Basic Materials 9,150 2.04
27 Taiwan Cement Taiwan Industrials 9,085 2.02
28 Zijin Mining China Basic Materials 9,004 2.00
29 China National Building Material Group China Industrials 8,792 1.96
30 Ascendas REIT Singapore Real Estate 8,728 1.94

Top Thirty Investments

367,239 81.74


31 Yageo Taiwan Technology 8,692 1.93
32 Australia and New Zealand Banking Corp Australia Financials 8,665 1.93
33 Dexus Australia Real Estate 8,393 1.87
34 JD.com China Consumer Discretionary 7,972 1.77
35 Mapletree Logistics Singapore Real Estate 7,685 1.71
36 Chinasoft China Technology 7,551 1.68
37 China Yongda Automobiles China Consumer Discretionary 7,288 1.62
38 AIA Group Hong Kong Financials 6,626 1.48
39 Guangdong Investments Hong Kong Utilities 6,575 1.46
40 Sun Hung Kai Properties Hong Kong Real Estate 6,312 1.41

Top Forty Investments

442,998 98.60


41 Hindustran Petroleum India Energy 6,291 1.40
42 China Forestry Holdings China Basic Materials - -

Total Investments

449,289 100.00

(1) Preferred Shares

(2) American Depositary Receipts

Page 8 of 17


SECTOR AND GEOGRAPHIC EXPOSURE


Geographic exposure
Portfolio at
28 February 2022
%
Portfolio at
31 August 2021
%

Australia 24.0 21.4
South Korea 17.0 14.4
Taiwan 14.0 18.6
China 13.6 15.4
Singapore 8.6 5.9
Hong Kong 6.9 11.8
India
3.7 2.9
Indonesia 3.3 2.5
Vietnam 3.1 3.1
Thailand 3.0 2.0
New Zealand 2.8 2.0
Total
100.0 100.0






Sector exposure
Portfolio at
28 February 2022
%
Portfolio at
31 August 2021
%
Financials 28.2 27.6
Telecommunications 18.3 13.7
Technology 13.0 17.8
Basic Materials
12.4 12.5
Energy 9.9 4.5
Real Estate
6.9 10.6
Industrials 6.4 7.3
Consumer Discretionary
3.4 6.0
Utilities 1.5 -
Total 100.0 100.0

Page 9 of 17

CONDENSED STATEMENT OF COMPREHENSIVE INCOME















Half-year ended
28 February 2022
(Unaudited)
Half-year ended
28 February 2021
(Unaudited)
Year ended
31 August 2021
(Audited)

Revenue
return
£’000
Capital
return
£’000

Total
return
£’000
Revenue
return
£’000
Capital
return
£’000

Total
return
£’000
Revenue
return
£’000
Capital
return
£’000

Total
return
£’000
Investment income 10,895 - 10,895 9,492 - 9,492 37,236 - 37,236
Other income 1,093 - 1,093 1,223 - 1,223 3,103 - 3,103
(Losses)/gains on
investments held at
fair value through
profit or loss - (8,841) (8,841) - 23,328 23,328 - (1,791) (1,791)
Net foreign
exchange
(losses)/gains
excluding foreign
exchange
(losses)/gains on
investments - (509) (509) - 670 670 - (216) (216)
--------- ----------- -------- --------- --------- ---------- --------- ---------- ---------
Total income 11,988 (9,350) 2,638 10,715 23,998 34,713 40,339 (2,007) 38,332
--------- ----------- -------- --------- --------- ---------- --------- ---------- ---------
Expenses
Management fees (853) (853) (1,706) (988) (988) (1,976) (2,022) (2,023) (4,045)
Other expenses (301) (301) (602) (232) (232) (464) (469) (469) (938)
-------- -------- --------- -------- -------- --------- --------- ---------- ----------
Profit/(loss) before
finance costs and
taxation 10,834 (10,504) 330 9,495 22,778 32,273 37,848 (4,499) 33,349
Finance costs (52) (52) (104) (28) (28) (56) (87) (87) (174)
-------- ----------- ----------- -------- ---------- ---------- --------- -------- ---------
Profit/(loss) before
taxation 10,782 (10,556) 226 9,467 22,750 32,217 37,761 (4,586) 33,175
Taxation (875) 45 (830) (1,367) 237 (1,130) (3,988) 490 (3,498)
-------- ----------- ----------- -------- ---------- ---------- -------- --------- ----------
Profit/(loss) for the
period and total
comprehensive
income 9,907 (10,511) (604) 8,100 22,987 31,087 33,773 (4,096) 29,677
-------- ----------- -------- -------- ---------- ---------- --------- --------- ----------
Earnings/(losses)
per ordinary share
basic and diluted
(note 2) 6.55p (6.95p) (0.40p) 5.68p 16.12p 21.80p 23.22p (2.82p) 20.40p
===== ====== ====== ===== ===== ====== ===== ===== =====

The total column of this statement represents the Condensed Statement of Comprehensive Income of the Company, prepared in accordance with
IAS 34.

The revenue return and capital return columns are supplementary to this and are prepared under guidance published by the Association of Investment
Companies. All items in the above statement derive from continuing operations.

All income is attributable to the equity shareholders of the Company. There are no minority interests.

Page 10 of 17

CONDENSED STATEMENT OF CHANGES IN EQUITY







Half-year ended 28 February 2022 (Unaudited)

Stated
capital
£’000

Distributable
reserve
£’000

Capital
reserves
£’000

Revenue
reserve
£’000


Total
£’000

Total equity at 31 August 2021 235,955 180,471 10,557 25,661 452,644
Total comprehensive income:
(Loss)/profit for the period - - (10,511) 9,907 (604)
Transaction with owners,
recorded directly to equity:

Dividends paid - - - (17,845) (17,845)
Shares issued 1,415 - - - 1,415
Share issue costs (3) - - - (3)
------------- ------------- ------------- ------------- -------------
Total equity at 28 February 2022 237,367 180,471 46 17,723 435,607
======= ======= ======= ======= =======



Half-year ended 28 February 2021 (Unaudited)

Stated
capital
£’000

Distributable
reserve
£’000

Capital
reserves
£’000

Revenue
reserve
£’000


Total
£’000

Total equity at 31 August 2020 204,875 180,471 14,653 25,928 425,927
Total comprehensive income:
Profit for the period - - 22,987 8,100 31,087
Transaction with owners,
recorded directly to equity:

Dividends paid - - - (16,580) (16,580)
Shares issued 9,089 - - - 9,089
Share issue costs (18) - - - (18)
------------- ------------- ------------- ------------- -------------
Total equity at 28 February 2021 213,946 180,471 37,640 17,448 449,505
======= ======= ======= ======= =======



Year ended 31 August 2021 (Audited)

Stated
capital
£’000

Distributable
reserve
£’000

Capital
reserves
£’000

Revenue
reserve
£’000


Total
£’000

Total equity at 31 August 2020 204,875 180,471 14,653 25,928 425,927
Total comprehensive income:
(Loss)/profit for the year - - (4,096) 33,773 29,677
Transaction with owners,
recorded directly to equity:
Dividends paid - - - (34,040) (34,040)
Shares issued 31,188 - - - 31,188
Share issue costs (108) - - - (108)

---------- ---------- ---------- ---------- ----------
Total equity at 31 August 2021 235,955 180,471 10,557 25,661 452,644
====== ====== ====== ====== ======

Page 11 of 17

CONDENSED BALANCE SHEET


28 February 2022
(Unaudited)
£’000
28 February 2021
(Unaudited)
£’000
31 August 2021
(Audited)
£’000

Non-current assets
Investments held at fair value through profit or
loss (note 8) 449,289 472,644 462,525
----------- ----------- -----------

Current assets
Other receivables 24,908 11,747 5,351
Cash and cash equivalents 7,716 6,974 13,693
----------- ----------- -----------
32,624 18,721 19,044
----------- ----------- -----------
Total assets 481,913 491,365 481,569
----------- ----------- -----------
Current liabilities
Investments held at fair value through profit or
loss - written options (note 8) - (598) (440)
Deferred taxation - (34) (78)
Other payables (12,728) (11,174) (2,953)
Bank loans and overdrafts (33,578) (30,054) (25,454)
----------- ----------- -----------
(46,306) (41,860) (28,925)
----------- ----------- -----------
Net assets 435,607 449,505 452,644
====== ====== ======
Equity attributable to equity shareholders
Stated share capital 237,367 213,946 235,955
Distributable reserve 180,471 180,471 180,471
Retained earnings:
Capital reserves 46 37,640 10,557
Revenue reserve 17,723 17,448 25,661
----------- ----------- -----------
Total equity 435,607 449,505 452,644
====== ====== ======

Net asset value per ordinary share (note 3) 287.40p 311.52p 299.58p
======= ======= =======

Page 12 of 17

CONDENSED STATEMENT OF CASH FLOWS

Half-year ended
28 February 2022
(Unaudited)
£’000
Half-year ended
28 February 2021
(Unaudited)
£’000

Year ended
31 August 2021
(Audited)
£’000
Operating activities
Profit before taxation 226 32,217 33,175
Add back:
Finance costs 104 56 174
Losses/(gains) on investments held at fair value
through profit or loss 8,841 (23,328) 1,791
Net foreign exchange losses/(gains) excluding
foreign exchange losses/(gains) on investments 509 (670) 216
Sales of investments 181,314 197,958 478,991
Purchases of investments (177,359) (224,080) (520,263)
Decrease/(increase) in prepayments and accrued
income 701 11 (1,555)
(Increase)/decrease in amounts due from brokers (20,245) 2,707 10,797
(Decrease)/increase in other payables (1,263) (310) (5,231)
Decrease in amounts due to brokers 11,039 4,129 943
-------------- -------------- --------------
Net cash inflow/(outflow) from operating activities
before interest and taxation 3,867 (11,310) (962)
Interest paid (105) (51) (175)
Increase in corporation tax payable - - (210)
Withholding tax on investment income (921) (1,196) (3,648)
-------------- -------------- --------------
Net cash inflow/(outflow) from operating activities
after interest and taxation 2,841 (12,557) (4,995)
-------------- -------------- --------------

Financing activities
Loan drawdown 48,154 70,550 145,124
Loan repayment (40,304) (47,328) (127,859)
Equity dividends paid (17,845) (16,580) (34,040)
Share issue proceeds 1,415 9,089 31,188
Share issue costs (3) (18) (108)
-------------- -------------- --------------
Net cash (outflow)/inflow from financing (8,583) 15,713 14,305
-------------- -------------- --------------
(Decrease)/increase in cash and cash equivalents (5,742) 3,156 9,310

Cash and cash equivalents at the start of the
period/year 13,693 3,879 3,879
Exchange movements (235) (61) 504
-------------- -------------- --------------
Cash and cash equivalents at the end of the
period / year 7,716 6,974 13,693
======== ======== ========

Net debt
Cash and cash equivalents 7,716 6,974 13,693
Bank loans and overdraft repayable within one year (33,578) (30,054) (25,454)
-------------- -------------- --------------
Net debt (25,862) (23,080) (11,761)
======== ======== ========

Page 13 of 17



Notes to the condensed financial statements

1. Accounting Policies:
(a) Basis of preparation
The condensed interim financial statements have been prepared in accordance with IAS 34 and the Disclosure
Guidance and Transparency Rules of the UK's Financial Conduct Authority.

The annual report and financial statements for the year ended 31 August 2021 were prepared in accordance with
International Financial Reporting Standards (‘IFRS’) as adopted by the European Union. Where presentational guidance
as set out in the Statement of Recommended Practice (the 'SORP') for investment trusts issued by the Association of
Investment Companies (the 'AIC') in April 2021 is consistent with the requirements of IFRS, the directors have sought to
prepare the financial statements on a basis consistent with the recommendations of the SORP. The unaudited results
for the half-year ended 28 February 2022 have been prepared in accordance with the same accounting policies as those
applied in the Company’s financial statements for the year ended 31 August 2021.

There has been no change to the segmental reporting assessment compared to the 31 August 2021 financial statements.

These condensed financial statements do not include all information required for a full set of financial statements. The
figures and financial information for the year ended 31 August 2021 are an extract based on the published financial
statements and should be read in conjunction with them.

The condensed financial statements for the half-years ended 28 February 2022 and 28 February 2021 have not been
audited.

(b) Investments held at fair value through profit or loss
All investments are classified upon initial recognition as held at fair value through profit or loss and are measured initially
and subsequently at fair value. These financial assets are designated on the basis that they are part of a group of financial
assets which are managed and have their performance evaluated on a fair value basis. Financial assets are
recognised/de-recognised at the trade date of the purchase/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 assets is based on their
quoted bid price at the balance sheet date, without deduction of the estimated future selling costs. The fair value of option
contracts is determined by reference to the Black-Scholes model. The fair values of unquoted financial instruments within
the portfolio are based on their last audited net asset values discounted where necessary to arrive at a fair value.

Changes in the fair value of investments held at fair value through profit or loss and gains and losses on disposal,
including exchange gains and losses, are recognised in the Statement of Comprehensive Income as ‘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.

(c) Significant accounting judgments and estimates
The preparation of the Company’s financial statements requires management to make judgements, estimates and
assumptions that affect the amounts recognised in the financial statements; however, uncertainty abou
t these
assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the
asset or liability affected in the future. As the majority of the Company’s financial assets are quoted securities, in the
opinion of the directors, the amounts included as assets and liabilities in the financial statements are not subject to
significant judgements, estimates or assumptions.

The obligations relating to the options valued at £nil (28 February 2021: £598,000 (liability), 31 August 2021: £440,000
(liability)) are valued by reference to the Black-Scholes model.

2. Earnings per ordinary share
The earnings per ordinary share figure is based on the net loss after taxation of £604,000 (half-year ended 28 February
2021: profit £31,087,000; year ended 31 August 2021: profit £29,677,000) and on 151,168,978 ordinary shares (half-
year ended 28 February 2021: 142,594,393; year ended 31 August 2021: 151,093,564) being the weighted average
number of ordinary shares in issue during each of the periods.

Page 14 of 17

The earnings per ordinary share detailed above can be further analysed between revenue and capital, as below:
Half-year ended
28 February 2022
(Unaudited)

£’000
Half-year ended
28 February 2021
(Unaudited)

£’000
Year ended
31 August 2021
(Audited)
£’000
Net revenue profit 9,907 8,100 33,773
Net capital (loss)/profit (10,511) 22,987 (4,096)
Net total (loss)/profit (604) 31,087 29,677
Weighted average number of ordinary shares
in issue during the period / year

151,168,978 142,594,393 145,462,386



Pence

Pence

Pence
Revenue earnings per ordinary share 6.55 5.68 23.22
Capital (loss)/earnings per ordinary share (6.95) 16.12 (2.82)
Total (loss)/earnings per ordinary share (0.40) 21.80 20.40

The Company does not have any dilutive securities therefore the basic and diluted returns per share are the same.

3. Net asset value per ordinary share
The net asset value per ordinary share is based on a net asset value of £435,607,000 (28 February 2021:
£449,505,000; 31 August 2021: £452,644,000) and on 151,568,564 (28 February 2021: 144,293,564; 31 August 2021:
151,093,564) ordinary shares, being the number of ordinary shares in issue at each period end.

4. Transaction costs
Purchase transaction costs for the half-year ended 28 February 2022 were £180,000 (half-year ended 28 February
2021: £248,000; year ended 31 August 2021: £615,000). Sales transaction costs for the half-year ended 28 February
2022 were £312,000 (half-year ended 28 February 2021: £344,000; year ended 31 August 2021: £888,000).
Transaction costs for both purchases and sales principally consist of commission fees.

5. Share capital
During the six months under review the Company issued a total of 475,000 shares (half-year ended 28 February 2021:
2,800,000; year ended 31 August 2021: 9,600,000) for net proceeds of £1,412,000 (half-year ended 28 February 2021:
£9,071,000; year ended 31 August 2021: £31,080,000) net of costs. No shares have been issued since the period end.

6. Dividends
The Company pays dividends on a quarterly basis. On 26 November 2021, a fourth interim dividend of 5.90p per share
was paid in respect of the year ended 31 August 2021. A first interim dividend, in respect of the year ended 31 August
2022, of 5.90p per share was paid on 25 February 2022. The second interim dividend of 5.90p per share will be paid
on 27 May 2022 to shareholders on the register on 29 April 2022. The Company’s shares will be quoted ex-dividend on
2 April 2022. Based on the number of shares in issue on 27 April 2022, the cost of this dividend will be £8,943,000.

7. Management Fees
With effect from 1 September 2021, management fees are charged in accordance with the terms of the management
agreement at a flat rate of 0.75% of net assets per annum, charged quarterly in arrears.

Prior to this the Management fees were charged at a tiered rate of 0.9% per annum of the first £400,000,000 of net
assets and 0.75% per annum of the balance of net assets greater than £400,000,000.

8. Financial Instruments
At the period end the carrying value of financial assets and financial liabilities approximates their fair value.

Financial instruments carried at fair value
Fair value hierarchy
The table below analyses recurring fair value measurements for financial assets and financial liabilities. These fair
value measurements are categorised into different levels in the fair value hierarchy based on the inputs to valuation
techniques used. The different levels are defined as follows:
• Level 1: inputs are quoted prices in active markets for identical assets or liabilities that the entity can access at the
measurement date.
• Level 2: inputs other than quoted market prices included within Level 1 that are observable for the asset or liability,
either directly or indirectly.
• Level 3: inputs are unobservable inputs for the asset or liability.

Page 15 of 17

Financial assets and financial liabilities at fair value through profit
or loss at 28 February 2022
Level 1
£'000
Level 2
£'000
Level 3
£’000
Total
£’000
Investments including derivatives:
- Equity investments 449,289 - - 449,289
- OTC derivatives (options) - - - -
449,289 - - 449,289

Financial assets and financial liabilities at fair value through profit or
loss at 28 February 2021
Level 1
£'000
Level 2
£'000
Level 3
£’000
Total
£’000
Investments including derivatives:
- Equity investments 472,644 - - 472,644
- OTC derivatives (options) - (598) - (598)
472,644 (598) - 472,046


Financial assets and financial liabilities at fair value through profit or
loss at 31 August 2021
Level 1
£'000
Level 2
£'000
Level 3
£’000
Total
£’000
Investments including derivatives:

- Equity investments 462,525 - - 462,525
- OTC derivatives (options) - (440) - (440)

462,525 (440) - 462,525

Level 3 investments relate to one holding of China Forestry, transferred into Level 3 in 2012, written down to zero
during the year ended 31 August 2014.

There have been no transfers into/out of and no movements in Level 3 investments during the half-year ended 28
February 2022 and 28 February 2021 and the year ended 31 August 2021.

The Company’s holdings in options are included within Level 2.

The valuation techniques used by the Company are explained in note 1(b).

Premiums from written options during the half-year ended 28 February 2022 were £1,223,000 (half-year ended 28
February 2021: £1,223,000; year ended 31 August 2021: £3,102,000) and is included within other income.

9. Going concern
The assets of the Company consist almost entirely of securities that are listed and regularly traded and, accordingly,
the directors believe that the Company has adequate financial resources to continue in operational existence for at
least twelve months from the date of approval of the financial statements. The directors have considered the impact of
Covid-19, including cash flow forecasting, a review of covenant compliance including the headroom above the most
restrictive covenants and an assessment of the liquidity of the portfolio. They have concluded that they are able to
meet their financial obligations, including the repayments of the bank loan, as they fall due for at least twelve months
from the date of this report. Despite the net current liability position as at 28 February 2022, having assessed the above
factors, including the ability of the Company to draw down under the existing bank loan facility, and the principal risks
and other matters discussed in connection with the viability statement, the Board has decided that it is appropriate for
the financial statements to be prepared on a going concern basis.

10. Net debt reconciliation



Bank loans and


Cash and overdraft repayable


cash equivalents within one year Total

£'000 £'000 £'000
Net debt as at 31 August 2021 13,693 (25,454) (11,761)
Cash flows (5,742) (7,850) (13,592)
Exchange movements (235) (274) (509)
Net debt as at 28 February 2022 7,716 (33,578) (25,862)

Page 16 of 17


Cash and cash
equivalents
£'000
Bank loans and overdraft
repayable within one
year

£'000
Total
£'000
Net debt as at 31 August 2020 3,879 (7,469) (3,590)
Cash flows 3,156 (23,222) (20,066)
Exchange movements (61) 637 576
Net debt as at 28 February 2021 6,974 (30,054) (23,080)


Cash and cash
equivalents
£'000
Bank loans and overdraft
repayable within one
year
£'000
Total
£'000
Net debt as at 31 August 2020 3,879 (7,469) (3,590)
Cash flows 9,310 (17,265) (7,955)
Exchange movements 504 (720) (216)
Net debt as at 31 August 2021 13,693 (25,454) (11,761)


11. Related party transactions
The Company’s current related parties are its directors and Janus Henderson. There have been no material
transactions between the Company and its directors during the period and the only amounts paid to them were in
respect of expenses and remuneration, for which there were no outstanding amounts payable at the period end.

In relation to the provision of services by Janus Henderson, other than fees payable by the Company in the ordinary
course of business and the provision of marketing services, there have been no material transactions with Janus
Henderson affecting the financial position of the Company during the period under review.

12. Investor presentation
The Board invites shareholders to attend an investor presentation which will be held at 11.00 am on 8 June 2022 at the
offices of the Company’s investment manager, Janus Henderson, 201 Bishopsgate, London, EC2M 3AE.

13. Half-year report
The half-year report is available on the Company’s website (www.hendersonfareastincome.com). Shareholders will
be sent a copy of the abridged version of the half-year results in early May 2022.

14. General information
a) Company Status
The Company is a Jersey domiciled closed end investment company, number 95064, which was incorporated in 2006
and is listed on the London and New Zealand stock exchanges. The Company became UK tax resident with effect from
1 September 2018.

SEDOL/ISIN number: JE00B1GXH751
London Stock Exchange (TIDM) code: HFEL
New Zealand Stock Exchange code: HFL
Global Intermediary Identification Number (GIIN): NTTIYP.99999.SL.832
Legal Entity Identifier (LEI): 2138008DIQREOD38O596

The Company is a Jersey fund which is regulated by the Jersey Financial Services Commission.

b) Directors, Secretary and Registered Office
The directors of the Company are John Russell (Chairman), Ronald Gould (Chairman designate), Julia Chapman,
Timothy Clissold, Nicholas George and David Mashiter. The Corporate Secretary is Janus Henderson Secretarial
Services UK Limited. The registered office is IFC1, The Esplanade, St Helier, Jersey, JF1 4BP. The principal place of
business is 201 Bishopsgate, London, EC2M 3AE.

c) Website
Details of the Company’s share price and net asset value, together with general information about the Company,
monthly factsheets and data, copies of announcements, reports and details of general meetings can be found at
www.hendersonfareastincome.com

Page 17 of 17

For further information please contact:


Mike Kerley
Fund Manager
Henderson Far East Income Limited
Telephone: 020 7818 5053

Sat Duhra
Fund Manager
Henderson Far East Income Limited
Telephone: +65 6813 1035

James de Sausmarez
Director and Head of Investment Trusts
Henderson Investment Funds Limited
Telephone: 020 7818 3349

Harriet Hall
PR Manager
Janus Henderson Investors
Telephone: 020 7818 2919

Neither the contents of the Company’s website nor the contents of any website accessible from hyperlinks on the Company’s website
(or any other website) are incorporated into, or form part of, this announcement.