### The Company
The Company is an investment trust and its Ordinary shares and Convertible Unsecured Loan Stock (“CULS”) are listed
on the premium segment of the London Stock Exchange. The Company aims to attract long-term private and
institutional investors wanting to benefit from the growth prospects of Asia’s smaller companies.
### Investment Objective
The Company aims to maximise total return to shareholders over the long term from a portfolio made up predominantly
of quoted smaller companies in the economies of Asia excluding Japan. (On 27 January 2022 shareholders approved an
amended investment objective.)
### Five-Year Performance Linked Tender
On 27 January 2022 shareholders approved the introduction of a performance-linked tender offer, which provides that,
in the event of underperformance of the NAV per Share versus the MSCI AC Asia ex Japan Small Cap Index over a five-
year period commencing 1 August 2021, Shareholders will be offered the opportunity to realise a proportion of their
holding for cash at a level close to NAV less costs of the tender offer. The tender offer would be capped at a maximum of
25% of the issued share capital of the Company at that time.
### Comparative Index
From 1 August 2021 the Manager has utilised the MSCI AC Asia ex Japan Small Cap Index (currency adjusted) as well as
peer group comparisons for Board reporting. For periods prior to 1 August 2021, a composite index is used comprising
the MSCI AC Asia Pacific ex Japan Small Cap Index (currency adjusted) up to 31 July 2021 and the MSCI AC Asia ex
Japan Small Cap Index (currency adjusted) thereafter. It is likely that performance will diverge, possibly quite
dramatically in either direction, from the comparative index. The Manager seeks to minimise risk by using in-depth
research and does not see divergence from an index as risk.
### Investment Manager and Alternate Investment Fund Manager
The Company’s Alternative Investment Fund Manager, appointed as required by EU Directive 2011/61/EU, is abrdn Fund
Managers Limited (“aFML”) which is authorised and regulated by the Financial Conduct Authority. Day to day
management of the portfolio is delegated to abrdn Asia Limited (“abrdn Asia”, the “Manager” or the “Investment
Manager”). aFML and abrdn Asia are wholly owned subsidiaries of abrdn plc (previously known as Standard Life
Aberdeen plc).
## abrdn Asia Focus plc
### A fundamental, high conviction portfolio of well-researched Asian small caps
### Annual Report 31 July 2023
For more information visit
## asia-focus.co.uk
## asia-focus.co.uk
![img-0.jpeg](img-0.jpeg)

![img-1.jpeg](img-1.jpeg)

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。

1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置募集资金进行现金管理的协议》。[{"box_2d": [649, 652, 649, 998], "label": "text", "caption": "1. 2017年，公司与上海浦东发展银行股份有限公司签订了《关于使用部分闲置
“Over the long term, the value of investing in hand-
picked smaller companies in Asia has proved their
worth. £1,000 invested in 1995 is now worth
£22,580 with dividends reinvested”
Krishna Shanmuganathan,
Chair
“We continue to favour quality Asian small-cap
companies with solid balance sheets
and sustainable earnings prospects
that can emerge stronger and position
the portfolio well in tough times”
Gabriel Sacks and Flavia Cheong,
abrdn Asia Limited
Scan the QR code below to register
for regular email updates on the Company
.
abrdn Asia Focus plc 1
## Performance Hi hli hts
AB
### Net asset value total return (diluted) Net asset value per share (diluted)
## +7.6% 308.9
2022 –2.0% 2022 295.3p
### Net asset value total return since Annualised Net asset value total return
AB AB
### inception (diluted) since inception (diluted)
## +2283.6% +12.1%

2022 +2115.6% 2022  +12.3%
 
A
### Share price total return Share price
## +7.3% 264.0
2022 –1.7% 2022 254.0p
AB
### MSCI AC Asia ex Japan Small Cap Index Discount to net asset value
C
### total return
## +8.0% 14.5%
2022 –5.1% 2022 14.0%
A D
### Ongoing charges ratio Dividends per share
## 0.92% 8.66
2022 0.88% 2022 8.00p
A Alternative Performance Measure (see pages 99 to 100).
B Presented on a diluted basis as the Convertible Unsecured Loan Stock (“CULS”) is “in the money” (2022 – same).
C Currency adjusted, capital gains basis.
D Dividends include special dividends of 2.25p for 2023 (2022 – 1.6p).
### Net asset value per share Total dividends per share Mid-market price per share
At 31 July – pence At 31 July – pence At 31 July – pence

| 309.0 |  | 308.9 |  |  | 266.0 |  | 264.0 |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  | 8.66 |  | 254.0 |  |
|  | 295.3 |  | 8.0 |  |  |  |  |

230.0
260.1
221.3 196.0
3.8 3.8
3.2
19 20 21 22 23 19 20 21 22 23 19 20 21 22 23
*Diluted values used for
Final Sp ec ial
2021 to 2023
2 abrdn Asia Focus plc
## g p p p g
## Contents
Overview
“I am confident that with extensive on-the-
Financial Calendar, Dividends and Highlights 4 
ground coverage and a highly experienced
management team, your Manager is well
Strategic Report
positioned to keep finding quality companies Chair’s Statement 8
Investment Managers’ Review 13
among the hugely varied Asian small
Overview of Strategy 16
cap universe”
Results 24
Krishna Shanmuganathan, Performance 25
Chair
Portfolio
Ten Largest Investments 30
Portfolio 31
Sector/Geographical Analysis 34
Currency/Market Performance 36
Investment and ESG Case Studies 37
Governance
Board of Directors 42
Directors’ Report 45
Directors’ Remuneration Report 55
Statement of Directors’ Responsibilities 58
Report of the Audit Committee 59
Financial Statements
Independent auditors’ report to the members of abrdn
Asia Focus plc 64 
Statement of Comprehensive Income 71
Statement of Financial Position 72
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR
Statement of Changes in Equity 73
IMMEDIATE ATTENTION. If you are in any doubt about the
Statement of Cash Flows 74
action you should take, you are recommended to seek your
Notes to the Financial Statements 75
own independent financial advice from your stockbroker,
Alternative Performance Measures (Unaudited) 99
bank manager, solicitor, accountant or other independent
financial adviser authorised under the Financial Services
Corporate Information
and Markets Act 2000 if you are in the United Kingdom or,
Information about the Investment Manager 102
if not, from another appropriately authorised
The Investment Process 103
financial adviser.
ESG Engagement 106
Investor Information 111
If you have sold or otherwise transferred all your Ordinary
Alternative Investment Fund Managers Directive
shares in abrdn Asia Focus plc, please forward this
Disclosures (Unaudited) 114 
document, together with the accompanying documents
immediately to the purchaser or transferee, or to the
General
stockbroker, bank or agent through whom the sale or
Notice of Annual General Meeting 116
transfer was effected for transmission to the purchaser or
Glossary of Terms and Definitions 120
transferee or transferee, or to the stockbroker, bank or
Your Company’s Share Capital History 122
agent through whom the sale or transfer was effected for
Corporate Information 125
transmission to the purchaser or transferee
abrdn Asia Focus plc 3
# Financial Calendar, Dividends and Highlights

|  Financial year end | **31 July**  |
| --- | --- |
|  Announcement of results for year ended 31 July 2023 | **20 October 2023**  |
|  Online Shareholder Presentation (see page 11) | **21 November 2023**  |
|  Annual General Meeting | **5 December 2023**  |
|  CULS Conversion Date | **30 November 2023**  |
|  Payment date of first interim for 2023/2024 and special dividend for 2022/2023 | **20 December 2023**  |
|  Payment date of second interim dividend for 2023/2024 | **21 March 2024**  |
|  CULS Conversion Date | **31 May 2024**  |
|  Payment date of third interim dividend for 2023/2024 | **21 June 2024**  |
|  Payment date of fourth interim dividend for 2023/2024 | **20 September 2024**  |

## Dividends

|   | Rate | xd date | Record date | Payment date  |
| --- | --- | --- | --- | --- |
|  First interim 2023 | 1.60p | 24 November 2022 | 25 November 2022 | 20 December 2022  |
|  Second interim 2023 | 1.60p | 23 February 2023 | 24 February 2023 | 21 March 2023  |
|  Third interim 2023 | 1.60p | 25 May 2023 | 26 May 2023 | 23 June 2023  |
|  Fourth interim 2023 | 1.61p | 24 August 2023 | 25 August 2023 | 20 September 2023  |
|  Special 2023 | 2.25p | 23 November 2023 | 24 November 2023 | 20 December 2023  |
|   | **8.66p** |  |  |   |
|  First interim 2022 | 3.20p | 24 February 2022 | 25 February 2022 | 21 March 2022  |
|  Second interim 2022 | 1.60p | 26 May 2022 | 27 May 2022 | 17 June 2022  |
|  Third interim 2022 | 1.60p | 25 August 2022 | 26 August 2022 | 16 September 2022  |
|  Special 2022 | 1.60p | 24 November 2022 | 25 November 2022 | 20 December 2022  |
|   | **8.00p** |  |  |   |

4

abdn Asia Focus plc
## Financial Highlights

|   | 31/07/2023 | 31/07/2022 | % change  |
| --- | --- | --- | --- |
|  Total assets (see definition on page 121) | £556,466,000 | £532,912,000 | +4.4  |
|  Total equity shareholders' funds (net assets) | £485,784,000 | £464,396,000 | +4.6  |
|  Net asset value per share (basic) | 310.49p | 295.88p | +4.9  |
|  Net asset value per share (diluted) | 308.93p | 295.25p |   |
|  Share price (mid market) | 264.00p | 254.00p | +3.9  |
|  Market capitalisation | £413,049,000 | £398,662,000 | +3.6  |
|  Discount to net asset value (basic)^{a} | 15.0% | 14.2% |   |
|  Discount to net asset value (diluted)^{a} | 14.5% | 14.0% |   |
|  MSCI AC Asia ex Japan Small Cap Index (currency adjusted, capital gains basis) | 1,982.01 | 1,888.43 | +5.0  |
|  Net gearing^{b} | 12.1% | 12.1% |   |

### Dividends and earnings

|  Total return per share (basic)^{b} | 22.43p | (7.02)p |   |
| --- | --- | --- | --- |
|  Revenue return per share (basic) | 10.29p | 9.34p | +10.5  |
|  Ordinary dividends per share^{c} | 6.41p | 6.40p | +0.2  |
|  Special dividend per share^{c} | 2.25p | 1.60p | +40.6  |
|  Dividend cover^{d} | 1.19 | 1.17 |   |
|  Revenue reserves^{e} | £12,533,000 | £9,942,000 | +26.1  |
|  Revenue reserves per share^{e} | 8.01p | 6.33p | +26.5  |

### Operating costs

|  Ongoing charges ratio^{a} | 0.92% | 0.88%  |
| --- | --- | --- |

$^{a}$ Considered to be an Alternative Performance Measure, See pages 99 and 100.

$^{b}$ Measures the total earnings for this year divided by the weighted average number of Ordinary shares in issue (see note 9).

$^{c}$ The figures for dividends per share reflect the dividends for the year in which they were earned.

$^{d}$ After payment of the fourth interim dividend of 1.61p (2022 – third interim dividend of 1.60p) per share amounting to £2,516,000 (2022 – £2,511,000) and the special dividend of 2.25p (2022 – 1.60p) per share amounting to £3,507,000 (2022 – £2,511,000).

abrdn Asia Focus plc

5
## Strategic
## Report
6 abrdn Asia Focus plc
### The Company aims to attract long
### term private and institutional
### investors wanting to benefit from the
### growth prospects of Asian smaller
### companies. It is an investment trust
### and its Ordinary shares and
### Convertible Unsecured Loan Stock
### are listed on the premium section of
### the London Stock Exchange.
abrdn Asia Focus plc 7
# Chair's Statement

This marks my first annual statement for the Company as Chair, following Nigel Cayzer's retirement as a Director of the Company at last year's Annual General Meeting. Once again, the Board and I would like to reiterate our thanks to him for the enormous contribution he made in steering this investment trust forward since its launch.

## Overview

The state of flux in global markets continues. Inflation in Asian economies was more moderate over the review period than elsewhere, and central banks not as aggressive in their rate hikes. Even so, the threat of a possible global recession spilling into the region weighed heavily on investors' minds. As ever, markets have paid close attention to US Federal Reserve (Fed) policy, which has put up rates 11 times since March 2022 (with a combined rise of 525 basis points).

As I referenced in the Half Yearly Report, China easing Covid restrictions raised expectations that a reopening economy would lead to greater demand across several sectors. This recovery has proved to be patchier than anticipated. Struggles in the country's property sector continue and political tensions exacerbated market volatility (once again rising US-China rhetoric was a notable feature).

By contrast, India has shown signs of recovery in urban consumer demand, and has a buoyant housing market. The Reserve Bank of India (RBI) forecasts GDP growth of 6.5% for the 23/24 fiscal year, putting India among the fastest-growing economies. Indonesia's market has also been stronger, with domestic spending particularly resilient.

Meanwhile, the ASEAN region continues to look attractive. Your Manager sees the bloc emerging as a key beneficiary of the shifts in global supply chains amid the evolving geopolitical landscape, especially between China and the US. In particular, corporate initiatives to embark on a China plus 1 or China plus 2 strategy as part of a supply chain diversification move is fuelling investment across ASEAN, with notable beneficiaries such as Vietnam, given its niche in apparel and electronics; Thailand, which is drawing interest from the printed circuit board supply chain because of its developed infrastructure and industrial parks; and Malaysia, for its engineering talent in software design companies. The bloc's supportive policies, cost competitiveness, industrial development, linkages to existing manufacturing hubs and rising middle-income consumers are structural drivers that are not only attracting foreign direct investment but also spurring intra-Asian trade, and in turn, boosting economic growth.

## Investment Performance

Although the weaker global economic environment has continued to be challenging for investors, over the last 12 months, on a total return basis, the Company's net asset value ('NAV') rose +7.6% in sterling terms for the 12 months to the end of July 2023, while the share price return was +7.3% having been impacted by the widening of the NAV discount to 14.5%. By comparison, the MSCI AC Asia ex Japan Small Cap (total return) index returned +8.0% and the MSCI AC Asia ex Japan rose 0.8%. The outperformance of smaller companies in Asia against their large cap peers now stretches several years, with the small cap index outperforming large cap by more than 10% annually over the past 3 years, testament to the benefits of investing in this overlooked segment of the equity market. In addition I am pleased to note that in the two-year period from 1 August 2021 (the date that we set the Company's new Benchmark against the new investment policy), the NAV total return has been 6.1%, the share price total return has been 5.5% and the Benchmark return was 2.5%.

It has been especially satisfying to see the high-quality, cash-generative small companies favoured by your Manager fare well. This was notably the case in countries like India and Indonesia, where structural growth, huge consumer markets and rising adoption of technology led to strong performance from businesses in a variety of sectors, including banking, industrials, IT, and branded consumer products. You can read more detail on company-level performance in the Investment Manager's Report starting on page 13.

While China has proved to be one of the weaker countries in terms of its performance, your Manager has taken advantage of volatility and attractive valuations of certain high-quality smaller companies to add exposure, from a relatively low base. This was aided by the change of mandate approved by shareholders last year (which saw the removal of the limit on company size at inflation), allowing your Manager greater flexibility in picking companies in larger markets such as China.

8

abrdn Asia Focus plc
Asia is more than just China and India, however, and your Company's portfolio is highly diversified across the region, focusing on businesses with healthy balance sheets and strong growth prospects. Stock selection was strong in Korea and Taiwan, where companies involved in cutting-edge technologies and digital services benefitted from a recovery in sentiment towards the IT sector globally, supported by a wave of interest in Artificial Intelligence. Frontier markets such as Vietnam and Sri Lanka also had a pretty volatile ride due to political and economic pressures although ended the period on a much stronger footing, with some of the companies there among the portfolio's strongest performers.

Over the long term, the value of investing in such hand-picked smaller companies in Asia has proved their worth. £1,000 invested in 1995 is now worth £22,580 with dividends reinvested; and your Company is one of the top five among the Association of Investment Companies (AIC)'s ISA millionaires: a company that would have made investors over £1,000,000 had they invested their full ISA allowance from 1999 to 2023.

### Dividend and Reserves

The Board recognises the importance of your Company's dividend income for many shareholders. The Ordinary dividend has been maintained or raised every year since 1998, and your Board is firmly committed to the new enhanced and progressive dividend policy approved by shareholders in 2022.

Three interim dividends of 1.6p and a fourth interim of 1.61p have been paid in March, June, September and December 2023, totalling 6.41p (2022 – Ordinary dividend 6.4p). Furthermore, I am very pleased to report that the continuing strength of dividend generation from the portfolio has allowed the Company to declare a further special interim dividend in respect of the year ended 31 July 2023 of 2.25p per Ordinary share which will be paid on 20 December 2023 to shareholders on the register on the record date of 24 November 2023 (ex dividend 23 November 2023). The special dividend will bring the total distribution for the year to 8.66p (2022 – 8.0p).

The Board's strategy is to maintain the progressive dividend policy of the last 25 years (including with the flexibility to pay dividends out of capital reserves where merited in the future) in order to provide shareholders with a regular level of income alongside capital growth prospects. Following payment of the four interims and special dividend for the year to 31 July 2023, there remains well over a year's worth of reserves to cover the Ordinary dividend.

### Share Capital and Gearing

One of the disappointing aspects of your Company's performance is the continuing discount to NAV. During the period the shares have traded at an average discount of –12.5%, which is higher than its long-term average. This is in line with the Company's immediate peers, at a time when investment trust discounts have moved to historically wide levels.

Your Board is very mindful of the negative impact of large discounts to NAV to shareholders. As a result, we have started to buy back Ordinary shares in the market for treasury. In total 500,000 shares have been purchased in the Company's financial year (2022: nil), 0.3% of the Company's issued shares (excluding Treasury shares). A further 595,000 shares have been purchased since the end of the reporting to date.

We will continue to oversee the judicious use of share buy backs. The shares bought back in this reporting period were at a weighted average discount to NAV of –13.5%, supporting the twin aims of reducing the volatility of any discount whilst modestly enhancing the NAV for shareholders.

The Company's net gearing at 31 July 2023 was 12.1% with the debt provided by the £30m Loan Notes and the £36.6 million Convertible Unsecured Loan Stock redeemable in 2025. As at 18 October 2023, the latest practicable date, the net gearing stood at 10.2%.

### Your Investment Manager

When we announced the amended investment policy in November 2021 (and approved by Shareholders in January 2022) we also introduced a number of other changes: one of which was to deepen the Company's management team, in particular the addition of Flavio Cheong, abn's Head of Equities, Asia Pacific, as joint lead manager alongside Hugh Young and Gabriel Sacks and now Xin-Yao Ng, both of whom have worked alongside Hugh for 15 and 5 years respectively. This was partially in recognition of the fact that the long-term success of your Company can be attributed to the strong teamwork at abrdn and that Hugh Young was nearing retirement.

abrdn Asia Focus plc

9
## Chair’s Statement
### Continued
I can now confirm that Hugh will be retiring on 31 The task force on climate-related financial disclosures
December 2023, the same point at which he retires from (referred to as “TCFD”) is now a global standard for
the Manager. Hugh has worked tirelessly on behalf of the reporting climate risks and opportunities. As a listed
Company since its launch and, both personally and on investment company, the Company is not subject to the
behalf of the Board, I would like to thank him and wish him FCA Listing Rule requirement to comply with TCFD
the very best for his well-earned retirement. The reporting. However, the Board is a keen supporter of the
cumulative long term performance disclosed on page 27 ambitions of TCFD, as it believes it will improve disclosure
is testament to Hugh’s skill, dedication and methodology of climate related risks. This in turn will help the Investment
that he has handed down to the management team over Manager and other stakeholders better assess the risks
the years. While Hugh leaves us in good hands with a high- which will support sound investment decisions. Your
quality team across Asia (over 40 investment personnel Manager is subject to mandatory requirements to report
across six countries) continuing the vital on-the-ground on the Company as one of its products and the first abrdn
research as part of your Company’s investment process, Asia Focus plc TCFD Report, for the year ended 31
he will be much missed. December 2022, is available under the ‘Literature’ section
at asia-focus.co.uk.
I know Hugh still views Asia’s rapidly developing economies
as providing a fertile ground for smaller companies. Your
### Board Succession
Manager continues to explore opportunities across the
As I indicated at the half-year stage, as part of the Board’s
region to produce a genuinely diversified portfolio not
succession plan, Randal McDonnell, the Earl of Antrim, will
reliant on any one market, looking for businesses with
be stepping down at this year’s AGM having completed his
strong balance sheets, exceptional business models and
service. I’d like to thank Randal for his service to the
demonstrating resilience to macro concerns.
Company. It has been a pleasure to have him on the
Board and his wise contributions will be much missed.
### Responsible Investment
Your Manager has long been at the forefront of including Following a review of the Board’s skills, background and
environmental, social and governance assessment in their experience, and with the support of Fletcher Jones, an
investment research. Whilst your Company is not a independent specialist investment trust recruitment
‘sustainable fund’, we have long acknowledged that the consultant, I am pleased to announce the appointment of
best companies are sustainable companies, and that is Lucy Macdonald as his replacement who will be joining the
very much your Company’s investment philosophy. Board immediately following the close of business of the
Although the portfolio’s MSCI ESG rating of ‘BB’ is in line AGM on 5 December 2023. Lucy has enjoyed a successful
with that of the benchmark it is pleasing to note that the career in asset management and was, until 2020,
Company’s portfolio Economic Emission Intensity is only managing director, CIO global equities at Allianz Global
13.6% of the benchmark. Further detailed information can Investors. Lucy will bring significant investment experience
be found in the ESG report on page 106. to the Board. She is an experienced board director and is
currently a member of the investment committee of the
Active engagement with your investee companies is also
RNLI, a non-executive council member of the Duchy of
a hallmark of your Manager’s long experience of investing
Lancaster and senior independent director of JPMorgan
in smaller companies in Asia. You can read more detail on
Global Emerging Markets Income Trust Plc.
company-level engagement and responsible investing in
the Annual Report starting on page 37.
10 abrdn Asia Focus plc
To further diversify the Board's composition and deepen the bench strength on the Board with future Board succession in mind, I am also pleased to announce the appointment of Davina Curling with effect from 1 March 2024. Davina has also enjoyed a successful career in asset management and was formerly managing director, head of European equities at Russell Investments. More recently Davina has consulted on projects for small companies and start-ups in the financial, manufacturing and retail sectors. Davina is a non-executive director of Henderson Opportunities Trust plc and INVESCO Select Trust plc and is a member of the investment committee of St James's Place Wealth management. Davina will become Senior Independent Director upon appointment.

Your Board is cognisant of the FCA's diversity and inclusion Policy Statement PS22/3 and remains committed to corporate governance best practice as recommended in the Hampton-Alexander and Davies reviews. I am pleased to confirm that from 1 March 2024, the Board will be compliant with the new diversity and inclusion targets set out in Chapter 15 of the FCA's Listing Rules.

### Value for Money

We strive to keep the cost of investing low for shareholders to retain as much of the return on their investment as possible. Ongoing charges for the year were 0.92% (2022: 0.88%), primarily made up of the management fee. As you know, the fee was reduced in 2021 to 0.85% for the first £250m, 0.6% for the next £500m and 0.5% for market capitalisation over £750m, to provide even better value for money for shareholders. Importantly, the management fee is tied to the share price of the Company, and not the NAV. This aligns your Manager's fees with shareholder returns, and sets your Company apart from many of its peers.

In addition, in 2022 the Company introduced a performance-linked conditional tender offer for up to 25% of the issued capital. Shareholders will be offered the opportunity to realise a proportion of their holding for cash at a level close to NAV less costs in the event of underperformance against the benchmark in the five year period ending 1 August 2026.

Your Board continues to keep all costs under review but believes that, given the breadth and depth of on-the-ground research by your Manager, the very selective stock picking (your Company's portfolio has an active share of 97.8 at year end) and the long-term outperformance, the current fees constitute good value for money.

### Migration of abrdn Savings Plans to interactive investor ("ii")

The Company's Manager, abrdn, has been reviewing its current service provider for its investment trust share plans (abrdn Savings Plan, Children's Plan and ISA). In May 2022, abrdn completed the acquisition of ii, the UK's second largest, award-winning investment platform for self-directing private investors. Having considered the various options, abrdn has concluded its review and has decided to migrate its share plan customers to ii in December 2023, given the strength of the ii offering, its understanding of and enthusiasm for investment trusts and the strong representation of investment trusts in its customer portfolios. Following completion of the migration, plan participants should contact the Company's registrars, Equiniti (further details on page 111) if they would like to continue to receive hard copies of shareholder reports and communications and they will be added to the Company's mailing list. Plan participants who have queries in respect of the migration should raise them directly with abrdn's investor services team by email at inv.trusts@abrdn.com or by telephone on 0808 500 4000 or 00 44 1268 448 222 (Monday to Friday 9am to 5pm – call charges will vary).

### Shareholder Engagement and Annual General Meeting

The Company's Annual General Meeting is scheduled for 11.00 a.m. on 5 December 2023. The AGM will be preceded by a short presentation from the management team and following the formal business there will be a light shareholder buffet lunch and the opportunity to meet the Directors. In addition to the usual ordinary business being proposed at the AGM, as special business the Board is seeking to renew the authority to issue new shares and sell treasury shares for cash at a premium without pre-emption rules applying and to renew the authority to buy back shares and either hold them in treasury for future resale (at a premium to the prevailing NAV per share) or cancel them. I would encourage all shareholders to support the Company and lodge proxy voting forms in advance of the meeting, regardless of whether they intend to attend in person.

abrdn Asia Focus plc

11
## Chair’s Statement
### Continued
In light of the significant take up from shareholders at the Stronger GDP growth should benefit the smaller
online presentation held in November 2022, in advance of companies targeted by this investment trust over time. But
the AGM, the Board has decided to hold another by no means does this measure alone automatically result
interactive Online Shareholder Presentation which will be in strong share-price performance. Pinpointing those
held at 11:00 a.m. on 21 November 2023. At the businesses that can succeed and are capable of
presentation, shareholders will receive updates from the becoming ‘multi-baggers’ (stocks that deliver returns
Chair and Manager and there will be the opportunity for many times over the original investment), requires a
an interactive question and answer session. Following the disciplined, bottom-up stock picking approach.
online presentation, shareholders will still have time to
Your Company remains positioned around Asia’s long-
submit their proxy votes prior to the AGM and I would
term structural growth themes, such as greater domestic
encourage all shareholders to lodge their votes in
consumption that comes with Asia’s rising affluence,
advance in this manner. Full registration details can be
booming infrastructure, the growth of digital, moving to a
found at: asia-focus.co.uk.
lower-carbon future, advances in health and wellness
technology, and the opportunities offered by the rollout of
### Outlook
5G, big data and digital interconnectivity.
While it has been a tough period for small caps elsewhere,
Asia’s domestic growth story means that the region’s Relatively under-researched and inefficient markets
diverse and fast-growing small companies are outpacing across the whole Asian continent mean there is ample
larger rivals. Asia is forecast to contribute around 70% of potential for unearthing hidden gems, companies with
global growth for 2023, according to the IMF’s last World strong balance sheets and sustainable earnings prospects
Economic Outlook (published in April). Growth in Asia and that can emerge stronger. I am confident that with
the Pacific is set to accelerate to 4.6% this year from 3.8% extensive on-the-ground coverage and a highly
in 2022. experienced management team, your Manager is well
positioned to keep finding quality companies among the
As I have already referenced, although China’s post-Covid
hugely varied Asian small cap universe.
recovery has thus far failed to take off and there has been
much talk of the ‘Japanification’ of China’s economy,
improved policy messaging from China’s government and
more concrete measures could see an improved
backdrop for companies over the longer term. Meanwhile,
India’s prime minister Narendra Modi continues to make
the bold claim that India will become one of the world’s
top three economies within his third term (should he be re-
elected in 2024).
Importantly your Company is able to invest in excellent
companies spread across Asia and it is not dependent on
Krishna Shanmuganathan
investing solely in India or China. Recovery in Southeast
Asia continues to gather pace and markets like Vietnam Chair
are providing a more positive environment for small-cap 19 October 2023
investors, notwithstanding significant volatility there during
the year.
12 abrdn Asia Focus plc
## Investment Mana ers’ Review
The company's strategic investments to expand capacity
### Performance Review
in biologics manufacturing and discovery services, as well
Asian small caps demonstrated strong performance over
as its solid balance sheet and a low debt profile,
the 12-month review period to 31 July 2023, despite the
contributed to its success over the review period. Shares
volatility across global markets. The benchmark MSCI AC
of Indian downstream oil and gas company Aegis Logistics
Asia Ex Japan Small Cap Index returned +8.0% in sterling
were especially strong in the last month of the period, as
terms over the review period. The Company’s net asset
the company released good quarterly results. In Indonesia,
value (“NAV”) and share price, both in total return terms,
Bank OCBC NISP announced robust first-quarter
increased by 7.6% and 7.3%, respectively.
performance, buoyed by asset growth due to an
As your Chair has highlighted earlier in this report, global improving economic climate. Other standout performers
markets have faced numerous challenges over the review in Indonesia included Ultrajaya Milk Industry, a more
period, including increasing inflation and interest rates consumer-driven business focused on household dairy
(especially in developed markets), concerns regarding a products, and fuel distributor AKR Corporindo.
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
potential global recession and a slower-than-expected
At a sector level, technology, industrials and financials
China recovery. Nevertheless, Asian small caps have
were positives for the portfolio. A stabilising tech sector
demonstrated remarkable resilience, outperforming their
and rising enthusiasm for generative artificial intelligence
larger counterparts by a significant margin. Over the past
(AI) saw strong performance in both Taiwan and Korea.
three years, the cumulative outperformance of smaller
Positive stock selection in both countries aided
companies in Asia against the large cap index has
performance over the 12 months. In Korea, Park Systems,
amounted to a meaningful 38 percentage points (the
manufacturer of atomic force microscopy (AFM) systems,
MSCI Asia ex Japan Small Cap gained 43% in the three
was the leading contributor to relative results over the
years to 31 July 2023, compared with 4.2% for the MSCI
year. AFM has diverse applications in advanced science
Asia ex Japan). Heightened market volatility and
and technology labs, and the size of the addressable
macroeconomic uncertainty means our investment
market should grow over time given it is still a relatively
process gains even greater significance and we believe
new field. Leeno Industrial also generated strong returns,
the unwavering rigour in seeking out quality has proven
with an anticipated recovery in demand driven by AI and
particularly advantageous over the 12-month period.
testing initiatives. Meanwhile, in Taiwan, Sunonwealth
Our stock selection in India and Indonesia contributed to Electric Machine Industry, which manufactures industrial
the positive performance, as both countries enjoyed fans and Taiwan Union Technology, which distributes
resilient domestic spending during the review period. copper-clad laminate, also contributed to relative
India-based engineering and technology solutions performance given an improved outlook for growth. In
company Cyient, has seen a strong recovery in earnings addition, Vietnam’s leading IT group FPT Corporation
as demand for engineering software and design services advanced over the review period on continued strong
bounced-back in the aerospace industry, while margins results with the company reporting a 21% profit jump
benefited from management’s restructuring efforts over in the second quarter, driven by a 29% surge in IT
the past few years. Prestige Estates, a property developer, service revenues.
released robust presales figures thanks to new projects
Elsewhere, our positioning in several other companies also
and continued industry consolidation as they look to
proved advantageous. Shares of Thailand-based TISCO
accelerate growth and become a national player.
Financial Group performed well as its conservative lending
Similarly, Syngene, a contract research organisation
practices over the past few years proved prescient. Sri
working in pharmaceuticals, biotech and other industries,
Lankan conglomerate John Keells Holdings, which
also benefited from a series of positive earnings reports.
operates in sectors including transportation, consumer
goods, retail, leisure, property, and financial services, also
advanced as a beneficiary of a recovery in tourism and
the overall domestic economy in Sri Lanka following the
implementation of significant structural reforms.
abrdn Asia Focus plc 13
## g
## Investment Mana er’s Review
### Continued
On the other side, your Company’s exposure to China and Keeping in line with the Company’s focus on quality, we
Hong Kong, both among the worst-performing markets, purchased shares in Taiwan’s Sinbon Electronics, which
dragged on performance. Consumer-related sectors makes cables and connectors for niche markets. The
bore the brunt of the selling and the property sector company supplies products and applications to sectors
continued to languish. Key detractors in China included including green energy, industrial applications,
JOINN Laboratories., a drug testing business, and Sinoma automotive, medical equipment as well as
Science & Technology, an advanced materials company communication and electronic peripherals. In a highly
focused on green energy solutions. Hong Kong-listed fragmented industry, its competitive edge lies in its
banking group Dah Sing Financial Holdings Limited and dry- capabilities to manufacture highly customised products
bulk shipper Pacific Basin Shipping were also weak. for its diversified customer base, as well as its well-
entrenched partnerships with its suppliers and clients.
Our stock selection and overweight positioning in
Although its shares were under pressure after the release
Singapore also weighed on overall performance. Among
of its 2023 first half results, we view it as a beneficiary of
the main detractors in this market were investment
long-term structural trends such as the Internet of Things,
holding company Yoma Strategic Holdings, a
5G applications and electric vehicles, as well as growing
conglomerate operating in Myanmar, property developer
demand for renewable energy, supported by solid order
Bukit Sembawang Estates and nanotechnology solutions
visibility over the next two to three years. The company
provider Nanofilm. The latter reported weak semi-annual
operates a cost pass-through model which ensures
results due to slowing demand and high operating
healthy margins and cash-flow.
expenses.
Another key purchase was Autohome, a dominant
Other detractors of note mainly included companies in
Chinese auto platform with more than 60 million daily
the consumer discretionary, materials and health care
active users. It trades at attractive valuations, with just the
sectors. Malaysian hotel operator Shangri-La Hotels
cash on its balance sheet representing more than 75% of
Malaysia Bhd., Indonesia-focused M.P. Evans, which
the Group’s total market value, and we see latent potential
produces palm oil, and Thailand-based Mega Lifesciences
for consumer spending to pick up in China as the
PCL came under pressure. In addition, Taiwan-
economy re-opens. Autohome has an asset-light business
headquartered e-commerce operator momo.com
model, delivering comprehensive, independent and
underperformed, in part due to disappointing sales
interactive content to automobile buyers and owners. Its
growth and broader concerns about the lacklustre pace
core business benefits from the powerful network-effect
of digital sales expansion following the easing of
characteristics of a classifieds business and it is the
lockdown measures.
number one player in the market. Its original generated
content drives high-quality user traffic, which in turn
### Portfolio Activity
results in advertising and lead generation. It is also
Much the same as we have said in previous reports,
expanding into new areas of business, such as auto-
market volatility creates price disconnects, which require
related financing for example and used car sales.
managers to focus on fundamentals. We have a long-
term approach to investing and favour businesses with As covered in our interim report, we added other Chinese
clearer earnings visibility and stronger fundamentals, companies to the portfolio including seeds & nuts
focusing on quality companies that are well placed in producer ChaCha Food. With well-established brands, the
structurally growing areas, such as healthcare and company has high potential for growth as the largely
technology. This approach also helps us mitigate fragmented snacks industry in China presents a
downside risks to growth from inflationary pressures. As consolidation opportunity. As an aside, we engaged with
such, over the period we have reduced or exited positions the company over the period to gain visibility on its risk
where we felt there was less certainty in a company’s management policies on key environmental, social and
earnings trajectory or where those earnings could be less governance (ESG) topics, and to encourage the company
resilient to current macro headwinds. to issue its first ESG report. We came away with a positive
impression given ChaCha’s comprehensive ESG practices
in its daily operations, as well as its efforts to improve
14 abrdn Asia Focus plc
## g
disclosure and business integration. We also added Kerry Resource-rich Indonesia has a sizeable and dynamic
Logistics, one of Asia’s largest integrated logistics domestic market with rising post-pandemic consumer
providers. With its diversified customer base, we believe it demand. There is a more limited universe of small caps
is well placed to benefit from supply-chain relocation, e- compared with elsewhere, but we believe the portfolio is
commerce growth and intra-regional trade in Asia. invested in well-run businesses with vast long-term
potential. Vietnam, meanwhile, has become a key player
Against these purchases, we exited Pacific Basin Shipping,
in manufacturing – benefiting from diversification in the
given the lack of visibility and momentum on shipping
global supply chain and numerous free-trade
rates (despite the compelling supply and demand
agreements. The country is on a growth track, and we
dynamic). The industry is likely to enter a significant capex
continue to like the long-term macro story. On the other
cycle, which could also affect shareholder returns.
hand, we do see some near-term political risk in some
Elsewhere, we sold Douzone Bizon, due to concerns over
parts of the region, with political uncertainty in Thailand
execution and an uncertain growth outlook, and divested
and general elections for both India and Indonesia in 2024.
from eCloudvalley Digital Technology, owing to poor Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Outside of Thailand though, we generally expect political
disclosure and a slowdown in growth. Other sales included
stability with a continuity in policy-making which provides
Absolute Clean Energy, IPH, Nazara Technologies and
a positive backdrop for the corporate sector.
Tatva Chintan Pharma; small positions that we didn’t feel
compelled to scale up. In summary, we continue to believe Asian small caps offer
significant value. There are attractive opportunities
### Outlook around the structural themes of aspiration, building Asia,
We expect global market sentiment to remain volatile in digital future, going green, health & wellness and tech
the short term, given concerns regarding global growth, enablers. Overall, we have been nimble, taking the
monetary policies in the US and other developed markets, opportunity to raise the portfolio’s earnings visibility and
as well as developments in China, where macroeconomic reduce exposure to names where this visibility is less
data remains soft. Having said that, at the time of writing certain. As a result, we continue to favour quality Asian
the Chinese government has begun another round of small-cap companies with solid balance sheets and
easing measures which should increase support to the sustainable earnings prospects that can emerge stronger
economy at the margin. While we are yet to see more and position the portfolio well in tough times. While
impactful policy action, there are still good opportunities to performance of small caps in the region can be volatile,
invest in small cap stocks that trade at attractive given our in-house research capabilities, investment
valuations and that provide exposure to pockets of growth management focus and bottom-up analysis, we expect to
within China’s domestic market. deliver for our shareholders in the long run.
Elsewhere, other Asian economies are benefiting from
diversification in global supply chains. Companies are
adding alternative sourcing locations, increasingly
adopting “China plus one” or “plus two” strategies. We
have kept a large allocation to India in the portfolio, where
we have exposure to a diverse set of companies
operating in a number of high-growth industries. India is in
the early stages of a cyclical upswing, and enjoys a
demographic dividend, meaning it is well-placed for
Gabriel Sacks, Flavia Cheong, Xin-Yao Ng & Hugh Young
sustainable long-term growth. The region will also gain
abrdn Asia Limited
from growing demand for AI-related apps and chips,
19 October 2023
especially in the semiconductor and consumer
electronics segments.
abrdn Asia Focus plc 15
## Overview of Strate y
Gearing
### Business Model
The business of the Company is that of an investment The Board is responsible for determining the gearing
company which seeks to qualify as an investment trust for strategy for the Company. Gearing is used selectively to
UK capital gains tax purposes. leverage the Company’s portfolio in order to enhance
returns where and to the extent this is considered
### Investment Objective appropriate to do so. Gearing is subject to a maximum
gearing level of 25% of NAV at the time of draw down.
On 27 January 2022 shareholders approved an amended
investment objective. The Company aims to maximise
### total return to shareholders over the long term from a Investment Manager and Alternate
### portfolio made up predominantly of quoted smaller Investment Fund Manager
companies in the economies of Asia excluding Japan.
The Company’s Alternative Investment Fund Manager,
appointed as required by EU Directive 2011/61/EU, is
### Investment Policy abrdn Fund Managers Limited (“aFML”) (previously known
On 27 January 2022 shareholders approved an amended as Aberdeen Standard Fund Managers Limited) which is
investment policy. The Company may invest in a authorised and regulated by the Financial Conduct
diversified portfolio of securities (including equity shares, Authority. Day to day management of the portfolio is
preference shares, convertible securities, warrants and delegated to abrdn Asia Limited (“abrdn Asia”, the
other equity-related securities) predominantly issued by “Manager” or the “Investment Manager”). aFML and abrdn
quoted smaller companies spread across a range of Asia are wholly owned subsidiaries of abrdn plc.
industries and economies in the Investment Region. The
### Investment Region includes Bangladesh, Cambodia, Delivering the Investment Policy
China, Hong Kong, India, Indonesia, Korea, Laos, Malaysia,
The Directors are responsible for determining the
Myanmar, Pakistan, The Philippines, Singapore, Sri Lanka,
investment policy and the investment objective of the
Taiwan, Thailand and Vietnam, together with such other
Company. Day to day management of the Company’s
economies in Asia as approved by the Board.
assets has been delegated, via the AIFM, to the Investment
Manager, abrdn Asia. abrdn Asia invests in a diversified
The Company may invest up to 10% of its net assets in
range of companies throughout the Investment Region in
collective investment schemes, and up to 10% of its net
accordance with the investment policy. abrdn Asia follows
assets in unquoted companies, calculated at the time
a bottom-up investment process based on a disciplined
of investment.
evaluation of companies through direct visits by its fund
The Company may also invest in companies traded on
managers. Stock selection is the major source of added
stock markets outside the Investment Region provided
value. No stock is bought without the fund managers
over 75% of each company’s consolidated revenue,
having first met management. abrdn Asia estimates a
operating income or pre-tax profit is earned from trading
company’s worth in two stages, quality then price. Quality
in the Investment Region or the company holds more
is defined by reference to management, business focus,
than 75% of their consolidated net assets in the
the balance sheet and corporate governance. Price is
Investment Region.
calculated by reference to key financial ratios, the market,
the peer group and business prospects. Top-down
When the Board considers it in shareholders’ interests, the
investment factors are secondary in the abrdn Asia’s
Company reserves the right to participate in rights issues
portfolio construction, with diversification rather than
by an investee company.
formal controls guiding stock and sector weights. Whilst
the management of the Company’s investments is not
Risk Diversification
undertaken with any specific instructions to exclude
The Company will invest no more than 15% of its gross
certain asset types or classes, the Investment Manager
assets in any single holding including listed investment
embeds ESG into the research of each asset class as part
companies at the time of investment.
of the investment process. For the manager, ESG
investment is about active engagement, in the belief that
the performance of assets held around the world can be
improved over the longer term.
16 abrdn Asia Focus plc
## g
A detailed description of the investment process and risk The Board’s philosophy is that the Company should
controls employed by abrdn Asia is disclosed on pages operate in a transparent culture where all parties are
103 to 105. A comprehensive analysis of the Company’s treated with respect and provided with the opportunity to
portfolio is disclosed on pages 30 to 40 including a offer practical challenge and participate in positive
description of the ten largest investments, the portfolio debate which is focused on the aim of achieving the
investments by value, sector/geographical analysis and expectations of shareholders and other stakeholders alike.
currency/market performance. At the year end the The Board reviews the culture and manner in which the
Company’s portfolio consisted of 62 holdings. Manager operates at its regular meetings and receives
regular reporting and feedback from the other key
### Comparative Indices service providers.
From 1 August 2021 the Manager has utilised the MSCI AC
Investment trusts, such as the Company, are long-term
Asia ex Japan Small Cap Index (currency adjusted) as well
investment vehicles, with a recommended holding period
as peer group comparisons for Board reporting. For Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
of five or more years. Typically, investment trusts are
periods prior to 1 August 2021, a composite index is used
externally managed, have no employees, and are
comprising the MSCI AC Asia Pacific ex Japan Small Cap
overseen by an independent non-executive board of
Index (currency adjusted) up to 31 July 2021 and the MSCI
directors. Your Company’s Board of Directors sets the
AC Asia ex Japan Small Cap Index (currency adjusted)
investment mandate, monitors the performance of all
thereafter. It is likely that performance will diverge,
service providers (including the Manager) and is
possibly quite dramatically in either direction, from the
responsible for reviewing strategy on a regular basis. All
comparative index. The Manager seeks to minimise risk by
this is done with the aim of preserving and, indeed,
using in-depth research and does not see divergence
enhancing shareholder value over the longer term.
from an index as risk.
### Stakeholders
### Promoting the Company’s Success
The Company’s main stakeholders have been identified
In accordance with corporate governance best practice,
as its shareholders, the Manager (and Investment
the Board is now required to describe to the Company’s
Manager), service providers, investee companies and
shareholders how the Directors have discharged their
debt providers. More broadly, the environment and
duties and responsibilities over the course of the financial
community at large are also stakeholders in the
year following the guidelines set out under section 172 (1)
Company. The Board is responsible for managing the
of the Companies Act 2006 (the “s172 Statement”). This
competing interests of these stakeholders. Ensuring that
Statement, from ‘Promoting the Success of the Company’
the Manager delivers out performance for Ordinary
to “Long Term Investment” on page 19, provides an
shareholders over the longer term without adversely
explanation of how the Directors have promoted the
affecting the risk profile of the Company which is known
success of the Company for the benefit of its members as
and understood by the loan note holders and CULS
a whole, taking into account the likely long term
holders. This is achieved by ensuring that the Manager
consequences of decisions, the need to foster
stays within the agreed investment policy.
relationships with all stakeholders and the impact of the
Company’s operations on the environment.
### Shareholders
The purpose of the Company is to act as a vehicle to Shareholders are key stakeholders in the Company – they
provide, over time, financial returns to its shareholders. The look to the Manager to achieve the investment objective
Company’s Investment Objective is disclosed on page 16. over time. The following table describes some of the ways
The activities of the Company are overseen by the Board we engage with our shareholders:
of Directors of the Company.
abrdn Asia Focus plc 17
## Overview of Strate y
### Continued
AGM The AGM normally provides an opportunity for the Directors to engage with shareholders,
answer their questions and meet them informally. The next AGM will take place on 5
December 2023 in London. We encourage shareholders to lodge their vote by proxy on all
the resolutions put forward.
Online Shareholder Presentation In November 2022 the Board held an online shareholder presentation which was attended
by over 250 shareholders and prospective investors. Based on the success of this event a
further online presentation will be held on 21 November 2023 at 11:00 a.m.
Annual Report We publish a full annual report each year that contains a strategic report, governance
section, financial statements and additional information. The report is available online and in
paper format.
Company Announcements We issue announcements for all substantive news relating to the Company. You can find
these announcements on the website.
Results Announcements We release a full set of financial results at the half year and full year stage. Updated net asset
value figures are announced on a daily basis.
Monthly Factsheets The Manager publishes monthly factsheets on the Company’s website including
commentary on portfolio and market performance.
Website Our website contains a range of information on the Company and includes a full monthly
portfolio listing of our investments as well as podcasts by the Investment Manager. Details of
financial results, the investment process and Investment can be found at asia-focus.co.uk
Investor Relations The Company subscribes to the Manager’s Investor Relations programme
(further details are on page 22).
### The Manager
### Other Service Providers
The key service provider for the Company is the
The other key stakeholder group is that of the Company’s
Alternative Investment Fund Manager and the
third party service providers. The Board is responsible for
performance of the Manager is reviewed in detail at each
selecting the most appropriate outsourced service
Board meeting. The Manager’s investment process is
providers and monitoring the relationships with these
outlined on pages 103 to 105 and further information
suppliers regularly in order to ensure a constructive
about the Manager is given on page 102. Shareholders
working relationship. Our service providers look to the
are key stakeholders in the Company – they are looking to
Company to provide them with a clear understanding of
the Manager to achieve the investment objective over
the Company’s needs in order that those requirements
time and to maximise total return to shareholders over the
can be delivered efficiently and fairly. The Board, via the
long term from a portfolio made up predominantly of
Management Engagement Committee, ensures that the
quoted smaller companies in the economies of Asia
arrangements with service providers are reviewed at least
excluding Japan. The Board is available to meet at least
annually in detail. The aim is to ensure that contractual
annually with shareholders at the Annual General Meeting
arrangements remain in line with best practice, services
and this includes informal meetings with them over lunch
being offered meet the requirements and needs of the
following the formal business of the AGM. This is seen as a
Company and performance is in line with the
very useful opportunity to understand the needs and
expectations of the Board, Manager, Investment Manager
views of the shareholders. In between AGMs, the Directors
and other relevant stakeholders. Reviews include those of
and Manager also conduct programmes of investor
the Company’s depositary and custodian, share registrar,
meetings with larger institutional, private wealth and other
broker and auditors.
shareholders to ensure that the Company is meeting their
needs. Such regular meetings may take the form of joint
presentations with the Investment Manager or meetings
directly with a Director where any matters of concern
may be raised directly.
18 abrdn Asia Focus plc
## g
### Principal Decisions Long Term Investment
Pursuant to the Board’s aim of promoting the long term The Investment Manager’s investment process seeks to
success of the Company, the following principal decisions outperform over the longer term. The Board has in place
have been taken during the year: the necessary procedures and processes to continue to
promote the long term success of the Company. The
Portfolio The Investment Manager’s Review on pages 13 to
Board will continue to monitor, evaluate and seek to
15 details the key investment decisions taken during the
improve these processes as the Company continues to
year and subsequently. The Investment Manager has
grow over time, to ensure that the investment proposition
continued to monitor the investment portfolio throughout
is delivered to shareholders and other stakeholders in line
the year under the supervision of the Board. A list of the
with their expectations.
key portfolio changes can be found in the Investment
Manager’s Report.
### Key Performance Indicators (KPIs)
Directorate During the year the Board has initiated a The Board uses a number of financial performance Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
search for a new independent Director as part of the measures to assess the Company’s success in achieving
continuing Board succession plans culminating in the its objective and to determine the progress of the
decision to appoint two new Directors as explained on Company in pursuing its investment policy. The main KPIs
page 10. identified by the Board in relation to the Company, which
are considered at each Board meeting, are as follows:
KPI Description
NAV Return (per share) The Board considers the Company’s NAV total return figures to be the best indicator of
performance over time and is therefore the main indicator of performance used by the Board.
The figures for this year and for the past 1, 3, 5, 10 years and since inception are set out on page 24.
Performance against The Board also measures performance against the MSCI AC Asia ex Japan Small Cap Index
comparative indices (currency adjusted) as well as peer group comparisons for Board reporting. For periods prior to 1
August 2021, a composite index is used comprising the MSCI AC Asia Pacific ex Japan Small Cap
Index (currency adjusted) up to 31 July 2021 and the MSCI AC Asia ex Japan Small Cap Index
(currency adjusted) thereafter. Graphs showing performance are shown on pages 25 to 27. At its
regular Board meetings the Board also monitors share price performance relative to competitor
investment trusts over a range of time periods, taking into consideration the differing investment
policies and objectives employed by those companies.
Share price The Board also monitors the price at which the Company’s shares trade relative to the MSCI Asia
(on a total return basis) ex Japan Small Cap Index (sterling adjusted) on a total return basis over time. A graph showing the
total NAV return and the share price performance against the comparative index is shown on
pages 27 and 56.
Discount/Premium to NAV The discount/premium relative to the NAV per share represented by the share price is closely
monitored by the Board. The objective is to avoid large fluctuations in the discount relative to
similar investment companies investing in the region by the use of share buy backs subject to
market conditions. A graph showing the share price premium/(discount) relative to the NAV is
also shown on page 25.
Dividend In 2022 the Board set a target dividend of 6.4p per share which was achieved for the year ended
31 July 2022. The aim is to maintain a progressive Ordinary dividend so that shareholders can rely
on a consistent stream of income. Dividends paid over the past 10 years are set out on page 24.
abrdn Asia Focus plc 19
## Overview of Strate y
### Continued
### Principal Risks and Uncertainties
There are a number of risks which, if realised, could have a material adverse effect on the Company and its financial
condition, performance and prospects. Risks are identified and documented through a risk management framework
and further details on the risk matrix are provided in the Directors’ Report. The Board, through the Audit Committee, has
undertaken a robust review of the principal risks and uncertainties facing the Company including those that would
threaten its business model, future performance, solvency or liquidity. Those principal risks are disclosed in the table
below together with a description of the mitigating actions taken by the Board. The principal risks associated with an
investment in the Company’s Shares are published monthly on the Company’s factsheet or they can be found in the
pre-investment disclosure document published by the Manager, both of which are available on the Company’s website.
The Board also has a process to review longer term risks and consider emerging risks and if any of these are deemed to
be significant these risks are categorised, rated and added to the risk matrix.
Macroeconomic risks arising from geo political uncertainty has been a significant risk during the year leading to rising
interest rates and higher inflation. In addition to the risks listed below, the Board is also very conscious of the risks
emanating from increased environmental, social and governance challenges. As climate change pressures mount, the
Board continues to monitor, through its Manager, the potential risk that investee companies may fail to keep pace with
the appropriate rates of change and adaption.
The Board does not consider that the principal risks and uncertainties identified have changed during the Year or since
the date of this Annual Report and are not expected to change materially for the current financial year.
Description Mitigating Action
Shareholder and Stakeholder Risk The Company’s strategy and objectives are regularly reviewed to ensure that
Risk Unchanged during Year they remain appropriate and effective. The Board monitors the discount level of
the Company’s shares and has in place a buyback mechanism whereby the
Manager is authorised to buy back shares within certain limits. The
macroeconomic and geopolitical challenges during the year led to volatility in
equity markets and a widening of the Company’s share price discount to NAV.
As a result, the Company has started to buy back shares into treasury. The
Broker and Manager communicate with major shareholders regularly to gauge
their views on the Company, including discount volatility. There are additional
direct meetings undertaken by the Chair and other Directors. The Board
monitors shareholder and market reaction to Company news flow.
Investment Risk The Board sets, and monitors, its investment restrictions and guidelines, and
Risk Unchanged during Year receives regular board reports which include performance reporting on the
implementation of the investment policy, the investment process and
application of the guidelines and concentration/liquidity analysis of the portfolio.
abrdn provides a team of experienced portfolio managers with detailed
knowledge of the Asian markets. The Investment Manager is in attendance at
all Board meetings. The Board also monitors the Company’s share price relative
to the NAV.
The Board recognises that investing in unlisted securities carries a higher
risk/reward profile. Accordingly it seeks to mitigate this risk by limiting
investment into such securities to 10% of the Company’s net assets (calculated
at the time of investment). For the year ended 31 July 2023 no unlisted
investments were made.
20 abrdn Asia Focus plc
## g
Description Mitigating Action
The Manager’s risk department reviews investment risk and a review of credit
worthiness of counterparties is undertaken by its Counterparty Credit Risk
team. The Company does not hedge foreign currency exposure but it may,
from time to time, partially mitigate it by borrowing in foreign currencies.
Gearing is provided at attractive rates, the Board and Manager monitor gearing
levels regularly and covenant reports are provided to lenders bi-monthly.
The Investment Manager embeds ESG and the impact of climate change into
the research of each asset class as part of the investment process. ESG
investment is about active engagement, in the belief that the performance of
assets held around the world can be improved over the longer term.
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Operational Risk The Board receives reports from the Manager on internal controls and risk
Risk Unchanged during Year management at each Board meeting. It receives assurances from all its
significant service providers, as well as back to back assurances where activities
are themselves sub-delegated to other third party providers with which the
Company has no direct contractual relationship eg accounting. The assurance
reports include an independent assessment of the effectiveness of risks and
internal controls at the service providers including their planning for business
continuity and disaster recovery scenarios, together with their policies and
procedures designed to address the risks posed to the Company’s operations
by cyber-crime. Further details of the internal controls which are in place are set
out in the Directors’ Report on page 50.
The Manager has documented succession planning in place for key personnel.
There is a team approach to portfolio management of the Company and this
has been clearly communicated to shareholders
Governance & Regulatory Risk The Board receives assurance from the Manager and Company Secretary and
Risk Unchanged during Year third party service providers on all aspects of regulatory compliance as well as
drawing upon the significant experience of individual Directors. Upon
appointment Directors receive a detailed induction covering relevant
regulatory matters such as Corporate Governance, the Companies Act and
Listing Rules and further training is available if required.
Major Events & Geo Political Risk External risks over which the Company has no control are always a risk. The
Risk Unchanged during Year Manager monitors the Company’s portfolio and is in close communication with
the underlying investee companies in order to navigate and guide the
Company through macroeconomic and geopolitical risks. The Manager
continues to assess and review legacy pandemic risks as well as investment
risks arising from the impact of events such as the Invasion of Ukraine and
increased military tension in East Asia on companies in the portfolio and takes
the necessary investment decisions. The Manager monitors the potential
impact of potential regional conflict and the risk of sanctions being imposed
which limit the free flow of trade.
abrdn Asia Focus plc 21
## Overview of Strate y
### Continued
### Promoting the Company
### Environmental, Social and Governance
The Board recognises the importance of promoting the
### (“ESG”) Engagement
Company to prospective investors both for improving
Whilst the management of the Company’s investments is
liquidity and enhancing the value and rating of the
not undertaken with any specific instructions to exclude
Company’s shares. The Board believes an effective way
certain asset types or classes, the Investment Manager
to achieve this is through subscription to and participation
embeds ESG into the research of each asset class as part
in the promotional programme run by the Manager on
of the investment process. ESG investment is about active
behalf of a number of investment trusts under its
engagement, with the goal of improving the performance
management. The Company’s financial contribution to
of assets held around the world.
the programme is matched by the Manager. The
Manager reports quarterly to the Board giving analysis of The Investment Manager aims to make the best possible
the promotional activities as well as updates on the investments for the Company, by understanding the
shareholder register and any changes in the make-up of whole picture of the investments – before, during and after
that register. an investment is made. That includes understanding the
environmental, social and governance risks and
The purpose of the programme is both to communicate
opportunities they present – and how these could affect
effectively with existing shareholders and to gain new
longer-term performance. Environmental, social and
shareholders with the aim of improving liquidity and
governance considerations underpin all investment
enhancing the value and rating of the Company’s shares.
activities. With 1,000+ investment professionals, the
Communicating the long-term attractions of your
Investment Manager is able to take account of ESG
Company is key and therefore the Company also
factors in its company research, stock selection and
supports the Manager’s investor relations programme
portfolio construction – supported by more than 30 ESG
which involves regional roadshows, promotional and
specialists around the world. Please refer to pages 106 to
public relations campaigns.
110 for further detail on the Investment Manager’s ESG
### Board Diversity policies applicable to the Company.
The Board recognises the importance of having a range
The Company has no employees as the Board has
of skilled, experienced individuals with the right knowledge
delegated day to day management and administrative
represented on the Board in order to allow the Board to
functions to abrdn Fund Managers Limited. There are
fulfil its obligations. The Board also recognises the benefits
therefore no disclosures to be made in respect of
and is supportive of the principle of diversity in its
employees. The Company’s socially responsible
recruitment of new Board members. The Board will not
investment policy is outlined above.
display any bias for age, gender, race, sexual orientation,
religion, ethnic or national origins, or disability in Due to the nature of the Company’s business, being a
considering the appointment of its Directors. Although the company that does not offer goods and services to
Board does not set diversity targets, it is mindful of best customers, the Board considers that it is not within the
practice in this area, and the Board will continue to evolve scope of the Modern Slavery Act 2015 because it has no
in 2023/2024, with the stated aim of improving its diversity. turnover. The Company is therefore not required to make
At 31 July 2023, there were four male Directors and one a slavery and human trafficking statement. The Board
female Director on the Board. Following the appointments considers the Company’s supply chains, dealing
of Lucy Macdonald and Davina Curling the Board will predominantly with professional advisors and service
comprise three male Directors and three female Directors providers in the financial services industry, to be low risk in
and will be compliant with the new diversity and inclusion relation to this matter.
targets set out in Chapter 15 of the FCA’s Listing Rules.
The Company has no greenhouse gas emissions to report
from the operations of its business, nor does it have
responsibility for any other emissions producing sources
under the Companies Act 2006 (Strategic Report and
Directors’ Reports) Regulations 2013.
22 abrdn Asia Focus plc
## g
### Viability Statement
The Company does not have a formal fixed period Accordingly, taking into account the Company’s current
strategic plan but the Board formally considers risks and position, the fact that the Company’s investments are
strategy at least annually. The Board considers the mostly liquid and the potential impact of its principal risks
Company, with no fixed life, to be a long term investment and uncertainties, the Directors have a reasonable
vehicle, but for the purposes of this viability statement has expectation that the Company will be able to continue in
decided that a period of three years is an appropriate operation and meet its liabilities as they fall due for a
period over which to report. The Board considers that this period of three years from the date of this Report. In
period reflects a balance between looking out over a long making this assessment, the Board has considered that
term horizon and the inherent uncertainties of looking out matters such as significant economic or stock market
further than three years. volatility, a substantial reduction in the liquidity of the
portfolio or changes in investor sentiment could have an
In assessing the viability of the Company over the review Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
impact on its assessment of the Company’s prospects
period the Directors have conducted a robust review of
and viability in the future.
the principal risks, focusing upon the following factors:
###  The principal risks detailed in the Strategic Report; Future
The Board’s view on the general outlook for the Company
 The ongoing relevance of the Company’s investment
can be found in my Chair’s Statement on page 12 whilst
objective in the current environment;
the Investment Manager’s views on the outlook for the
 The demand for the Company’s Shares evidenced by
portfolio are included on page 15.
the historical level of premium and or discount;
The Strategic Report has been approved by the Board
 The level of income generated by the Company;
and signed on its behalf by:
 The level of gearing provided by the Company’s Loan
Stock and Loan Notes (including the flexibility afforded
by the additional £35m available for drawing under the
Krishna Shanmuganathan,
Loan Note Facility to repay CULS if required in 2025); and
Chair
 In the event of triggering the conditional Tender Offer in
19 October 2023
2026, the liquidity of the Company’s portfolio including
the results of stress test analysis performed by the
Manager under a wide number of market scenarios.
In making this assessment, the Board has examined
scenario analysis covering the impact of significant
historical market events such as the 2008 Global Financial
Crisis, Covid-19 and the Chinese Devaluation on the
liquidity of the portfolio, as well as future scenarios such as
geo-political tensions in East Asia, and how these factors
might affect the Company’s prospects and viability in
the future.
abrdn Asia Focus plc 23
# Results

## Performance (total return)

|   | 1 year % return | 3 year % return | 5 year % return | 10 year % return | Since inception  |
| --- | --- | --- | --- | --- | --- |
|  Share price^{a} | +7.3 | +45.9 | +41.0 | +59.1 | +2158.4  |
|  Net asset value per Ordinary share – diluted^{b} | +7.6 | +49.6 | +38.5 | +83.7 | +2283.6  |
|  MSCI AC Asia ex Japan Small Cap Index (currency adjusted) | +8.0 | +43.2 | +36.4 | +102.0 | +261.3  |

$^{a}$ Considered to be an Alternative Performance Measure (see page 100 for more information).

$^{b}$ 1 year return calculated on a diluted basis as 0.3.5% in the money. All other returns are calculated on a diluted basis.

Source: Abroth, Morningstar, Upper & MSCI

## Ten Year Financial Record

|  Year to 31 July | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  **Total revenue ($'000)** | 11,427 | 14,746 | 10,992 | 13,896 | 14,673 | 14,632 | 13,595 | 9,624 | 18,071 | **19,984**  |
|  **Per share (p)^{a}** |  |  |  |  |  |  |  |  |  |   |
|  Net revenue return | 2.29 | 3.64 | 1.84 | 3.86 | 3.85 | 4.33 | 4.29 | 1.66 | 9.34 | **10.29**  |
|  Total return | (6.29) | (10.03) | 33.08 | 34.46 | 7.36 | 15.64 | (36.51) | 92.34 | (7.02) | **22.43**  |
|  Net ordinary dividends paid/proposed | 2.00 | 2.10 | 2.10 | 2.40 | 2.60 | 2.80 | 2.90 | 3.00 | 6.40 | **6.41**  |
|  Net special dividends paid/proposed | 0.60 | 0.90 | - | 0.80 | 0.80 | 1.00 | 0.90 | 0.20 | 1.60 | **2.25**  |
|  **Net asset value per share (p)^{a}** |  |  |  |  |  |  |  |  |  |   |
|  Basic | 193.78 | 181.23 | 213.78 | 247.09 | 246.37 | 260.11 | 221.29 | 310.90 | 295.88 | **310.49**  |
|  Diluted | 190.50 | 179.26 | 208.60 | 238.50 | n/a | n/a | n/a | 309.02 | 295.25 | **308.93**  |
|  **Shareholders' funds ($'000)** | 369,118 | 343,967 | 383,735 | 430,105 | 433,706 | 441,010 | 358,956 | 487,958 | 464,396 | **485,784**  |

$^{a}$ Figures for 2014–2021 have been restated to reflect the 0.1 sub-division of each Ordinary Zip share into five Ordinary shares of 5p each which occurred on 7 February 2021.

24

abroth Asia Focus plc
## Performance
### Share Price Discount to Diluted Net Asset Value
Five years to 31 July 2023
0%
-2%
-4%
-6%
-8%
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
-10%
-12%
-14%
-16%
-18%
31/ 07/18 31/07/19 31/ 07/20 31/07/21 31/07/22 31/ 07/23
abrdn Asia Focus plc 25
## Performance
### Continued
### Capital Return of Diluted NAV and Share Price vs MSCI AC Asia ex Japan Small Cap Index
### (sterling adjusted) and MSCI AC Asia Pacific ex Japan Index (sterling adjusted) and
Five years to 31 July 2023 (rebased to 100 as at 31/07/18)
150
140
130
120
110
100
90
80
70
60
31/07/2018 31/07/2019 31/07/2020 31/07/2021 31/07/2022 31/07/2023
Share Price Dil uted NAV MSCI AC Asia ex Japan Small Cap Index MSCI AC Asia Pacific ex Japan Index
26 abrdn Asia Focus plc
# Diluted NAV Total Return Since Inception vs MSCI AC Asia Pacific ex Japan Index (sterling adjusted)

19 October 1995 to 31 July 2023 (rebased to 100 as at 19/10/95)

![img-2.jpeg](img-2.jpeg)

abrdn Asia Focus plc

27
## Portfolio
28 abrdn Asia Focus plc
### For the Managers comparative
### indices are used as tools for
### measurement and not for portfolio
### construction. abrdn are buy-and-
### hold investors, meaning in theory a
### good company is one they may hold
### forever. They invest in companies
### that they believe they understand
### and can value. Companies in the
### portfolio are held for the longer term.
abrdn Asia Focus plc 29
## Ten Lar est Investments
### As at 31 July 2023

|  | Park Systems Corporation |  | Bank OCBC NISP |
| --- | --- | --- | --- |
|  | The Korean company is the leading developer of |  | An Indonesian listed banking and financial |
|  | atomic force microscopes, a nascent |  | services company, which is a steady |
|  | technology that could have broad industrial |  | consistent performer backed by healthy |
|  | application in sectors such as chip-making |  | asset quality. |
| 5.2% |  | 4.2% |  |

and biotechnology.
Total assets Total assets

|  | Cyient |  | Aegis Logistics |
| --- | --- | --- | --- |
|  | The Indian company provides engineering and |  | A strong and conservative player in India's gas |
|  | IT services to clients in developed markets, |  | and liquids logistics sector, with a first mover |
|  | competing primarily on quality of service and |  | advantage in key ports and a fair amount of |
|  | cost of delivery. |  | capacity expansion to come. The |
| 3.6% |  | 3.1% |  |

government's push for the adoption of
Total assets Total assets cleaner energy is also boosting its liquefied
natural gas business.
### FPT Corporation AKR Corporindo
FPT is a diversified technology group with a fast- AKR is one of the main players in industrial fuel
growing software outsourcing business. It also in Indonesia, which has a high entry barrier. Its

|  | owns a telecoms unit, an electronics retailing |  | key strength is its extensive infrastructure and |
| --- | --- | --- | --- |
|  | company, and has interests in other sectors, |  | logistic facilities throughout the country. |
| 3.0% |  | 3.0% |  |

such as education.
Total assets Total assets

|  | AEM Holdings |  | Taiwan Union |
| --- | --- | --- | --- |
|  | A Singapore-based provider of advanced |  | Taiwan Union Technology Corp is a leading |
|  | semiconductor chip testing services that has |  | maker of copper clad laminate (CCL), a key |
|  | embedded itself in chipmaker Intel's global |  | base material used to make printed circuit |
|  | supply chain. |  | boards. With a strong commitment to R&D, |
| 2.7% |  | 2.7% |  |

it has moved up the value chain through
Total assets Total assets the years..
### John Keells Holdings Nam Long Invest
### A respected and reputable Sri Lanka Corporation
conglomerate with a healthy balance sheet and
A reputable Vietnamese developer in Ho Chi
good execution, John Keells has a hotels and
Minh City that focuses on the affordable
## 2.6% leisure segment that includes properties in the 2.6%
housing segment, with decent land bank and
Maldives. It has other interests in consumer,
Total assets Total assets promising project pipeline.
transportation and financial services.
30 abrdn Asia Focus plc
## g
# Portfolio

As at 31 July 2023

|  Company | Industry | Country | Valuation 2023 £'000 | Total assets % | Valuation 2022 £'000  |
| --- | --- | --- | --- | --- | --- |
|  Pork Systems Corporation | Electronic Equipment, Instruments & Components | South Korea | 28,924 | 5.2 | 17,120  |
|  Bank OCBC NISP | Banks | Indonesia | 23,675 | 4.2 | 13,356  |
|  Cylent | Software | India | 19,980 | 3.6 | 14,016  |
|  Aegis Logistics | Oil, Gas & Consumable Fuels | India | 16,974 | 3.1 | 13,716  |
|  FPT Corporation | IT Services | Vietnam | 16,849 | 3.0 | 15,444  |
|  AKR Corporindo | Oil, Gas & Consumable Fuels | Indonesia | 16,518 | 3.0 | 18,389  |
|  AEM Holdings | Semiconductors & Semiconductor Equipment | Singapore | 15,213 | 2.7 | 17,802  |
|  Taiwan Union | Electronic Equipment, Instruments & Components | Taiwan | 14,928 | 2.7 | 5,778  |
|  John Keells | Industrial Conglomerates | Sri Lanka | 14,586 | 2.6 | 7,640  |
|  Nam Long Invest Corporation | Real Estate Management & Development | Vietnam | 14,312 | 2.6 | 15,030  |
|  **Top ten investments** |  |  | **181,959** | **32.7** |   |
|  Sinomo Science & Technology - A | Chemicals | China | 13,936 | 2.5 | 15,756  |
|  Mega Lifesciences (Foreign) | Pharmaceuticals | Thailand | 13,715 | 2.5 | 13,524  |
|  Affle India | Media | India | 13,612 | 2.4 | 18,847  |
|  Sporton International | Professional Services | Taiwan | 13,280 | 2.4 | 9,123  |
|  Medikaloka Hermina | Health Care Providers & Services | Indonesia | 12,728 | 2.3 | 14,656  |
|  M.P. Evans Group | Food Products | United Kingdom | 12,293 | 2.2 | 13,857  |
|  Dah Sing Financial | Banks | Hong Kong | 12,225 | 2.2 | 13,682  |
|  LEEND Industrial | Semiconductors & Semiconductor Equipment | South Korea | 11,610 | 2.1 | 6,322  |
|  Autohome - ADR | Interactive Media & Services | China | 11,462 | 2.1 | -  |
|  Oriental Holdings | Automobiles | Malaysia | 11,202 | 2.0 | 12,281  |
|  **Top twenty investments** |  |  | **308,022** | **55.4** |   |

abndn Asia Focus plc

31
# Portfolio

Continued

As at 31 July 2023

|  Company | Industry | Country | Valuation 2023 £'000 | Total assets % | Valuation 2022 £'000  |
| --- | --- | --- | --- | --- | --- |
|  Ultrapay-Milk Industry & Trading | Food Products | Indonesia | 11,124 | 2.0 | 9,030  |
|  UIE | Food Products | Denmark | 10,937 | 2.0 | 12,352  |
|  Precision Tsugami China | Machinery | China | 10,931 | 2.0 | 11,973  |
|  Prestige Estates Projects | Real Estate Management & Development | India | 10,887 | 1.9 | 7,162  |
|  John Laboratories China - H | Life Sciences Tools & Services | China | 10,472 | 1.9 | 12,745  |
|  Asian Terminals | Transportation Infrastructure | Philippines | 10,329 | 1.8 | 10,161  |
|  Sunonwealth Electric Machinery Industry | Machinery | Taiwan | 10,029 | 1.8 | 11,071  |
|  Cebu | Real Estate Management & Development | Philippines | 9,958 | 1.8 | 9,664  |
|  Hana Microelectronics (Foreign) | Electronic Equipment, Instruments & Components | Thailand | 9,911 | 1.8 | 8,736  |
|  MOMO.com | Internet & Direct Marketing Retail | Taiwan | 9,222 | 1.6 | 16,160  |
|  **Top thirty investments** |  |  | **411,822** | **74.0** |   |
|  Millenium & Copthorne Hotels New Zealand (A) | Hotels, Restaurants & Leisure | New Zealand | 8,546 | 1.5 | 9,808  |
|  Syngene International | Life Sciences Tools & Services | India | 8,333 | 1.5 | 6,521  |
|  Vijaya Diagnostic Centre | Health Care Providers & Services | India | 8,027 | 1.5 | 5,645  |
|  ChaCha Food - A | Food Products | China | 7,903 | 1.4 | -  |
|  AEON Credit Service (M) | Consumer Finance | Malaysia | 7,677 | 1.4 | 9,701  |
|  Bukit Sembawang Estates | Real Estate Management & Development | Singapore | 7,541 | 1.4 | 9,322  |
|  SINBON Electronics | Electronic Equipment, Instruments & Components | Taiwan | 6,824 | 1.2 | -  |
|  Sonof India | Pharmaceuticals | India | 6,823 | 1.2 | 6,770  |
|  Pentamaster International | Semiconductors & Semiconductor Equipment | Malaysia | 6,782 | 1.2 | 4,850  |
|  KMC Kuei Meng International | Leisure Products | Taiwan | 6,236 | 1.1 | 4,560  |
|  **Top forty investments** |  |  | **486,514** | **87.4** |   |

32

abrdn Asia Focus plc
### As at 31 July 2023
Valuation Total Valuation
2023 assets 2022
Company Industry Country £’000 % £’000
United Plantations Food Products Malaysia 6,067 1.1 5,815
Koh Young Technology Semiconductors & Semiconductor South Korea 5,697 1.0 4,879
Equipment
Tisco Financial (Foreign) Banks Thailand 5,547 1.0 4,827
CE Info Systems Software India 4,774 0.9 2,421
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Kerry Logistics Air Freight & Logistics Hong Kong 4,544 0.8 –
Shangri-La Hotels Malaysia Hotels, Restaurants & Leisure Malaysia 4,542 0.8 5,867
Andes Technology Semiconductors & Semiconductor Taiwan 4,513 0.8 3,470
Equipment
Yoma Strategic Real Estate Management & Myanmar 4,282 0.8 5,943
Development
NZX Capital Markets New Zealand 4,059 0.8 4,253
Convenience Retail Asia Food & Staples Retailing Hong Kong 4,013 0.7 4,314
Top fifty investments 534,552 96.1
Aspeed Technology Semiconductors & Semiconductor Taiwan 3,976 0.6 3,652
Equipment
Thai Stanley Electric (Foreign) Auto Components Thailand 3,470 0.6 2,912
Credit Bureau Asia Professional Services Singapore 2,953 0.6 3,228
Nanofilm Technologies International Chemicals Singapore 2,868 0.5 4,856
Manulife Insurance Malaysia 1,339 0.3 1,675
First Sponsor Group (Warrants Real Estate Management & Singapore 247 0.1 276
21/03/2029) Development
AEON Stores Hong Kong Multiline Retail Hong Kong 150 – 279
First Sponsor Group (Warrants Real Estate Management & Singapore 117 – 158
30/05/2024) Development
Total investments 549,672 98.8
Net current assets 6,794 1.2
B

| Total assets | 556,466 100.0 |
| --- | --- |
| A Holding includes investment in both common and preference lines. |  |
| B Total assets less current liabilities. |  |

abrdn Asia Focus plc 33
## Sector/Geo raphical Analysis
### As at 31 July 2023
Sector Breakdown
Air Freight & Logistics
2023
Auto Components
2022
Automobiles
Banks
Capital Markets
Chemicals
Consumer Finance
Electronic Equipment, Instruments & Components
Entertainment
Food & Staples Retailing
Food Products
Health Care Providers & Services
Hotels, Restaurants & Leisure
Independent Power and Renewable Electricity Producers
Industrial Conglomerates
Insurance
Interactive Media & Services
Internet & Direct Marketing Retail
IT Services
Leisure Products
Life Sciences Tools & Services
Machinery
Marine
Media
Multiline Retail
Oil, Gas & Consumable Fuels
Pharmaceuticals
Professional Services
Real Estate Management & Development
Semiconductors & Semiconductor Equipment
Software
Transportation Infrastructure
0% 2% 4% 6% 8% 10% 12%
34 abrdn Asia Focus plc
## g
### Geographic Breakdown
0.8%
2.0% Country allocation - 2023
2.2%
2.3%
2.7% 16.3%
3.7% India -16.3%
Taiwan - 12.6%
3.8%
Indonesia - 11.6%
China - 9.9%
5.3% South Korea - 8.4%
12.6% Malaysia - 6.8%
Thailand - 5.9%
5.7%
Vietnam - 5.7%
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Singapore - 5.3%
Hong Kong - 3.8%
5.9%
Philippines - 3.7%
11.6% Sri Lanka - 2.7%
New Zealand - 2.3%
6.8%
UK - 2.2%
Denmark - 2.0%
8.4% 9.9%
Myanmar - 0.8%
1.5%
1.5% 1.1% Country allocation - 2022
2.3% 15.6%
2.6%
2.7%
India -15.6%
3.8%
Taiwan - 10.9%
Indonesia - 10.6%
5.8% China - 7.7%
Malaysia - 7.7%
10.9%
Singapore - 6.8%
6.0% Hong Kong - 6.7%
Thailand - 6.7%
South Korea - 6.0%
6.7% Vietnam - 5.8%
Philippines - 3.8%
10.6%
New Zealand 2.7%
UK -2.6%
6.7%
Denmark - 2.3%
Australia - 1.5%
7.7%
6.8%
Sri Lanka - 1.5%
7.7%
Myanmar - 1.1%
abrdn Asia Focus plc 35
## Currency/Market Performance
Year to 31 July 2023
### Currency Returns (in Sterling Terms)
China Renminbi
Hong Kong Dollar
Ind ian Rupee
Indonesian Rupiah
Malaysian Ringgit
Philippines Peso
Singapore Dollar
South Korean Won
Sri Lanka Rupee
Taiwan Dollar
Thailand Baht
-12% -10% -8% -6% -4% -2% 0% 2% 4% 6%
### MSCI Country Index Total Returns (in Sterling terms)
China
Hong Kong
Ind ia
Ind ones ia
Korea
Mala ysia
Philippines
Sing apore
Taiwan
Thailand
-10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10%
36 abrdn Asia Focus plc
## Investment and ESG Case Studies
As a result, the company is now the largest wind blade
### Sinoma Science
producer, second-largest fibreglass maker and the No.3
separator maker in China. It also has a large trove of new
In which year did we first invest?
materials waiting to be commercialised including
2022
hydrogen storage tanks. The hydrogen storage tank
% Holding: segment is a small but rapidly growing business, with
2.5% potential for growth. The industry has policy support
because it is a key development area for the
Where is their head office?
central government.
Beijing, China
When did we engage Sinoma on ESG?
What is their web address?
We last met Sinoma in November 2022.
www.sinomatech.com/en/p_s/
What were the key areas of engagement?
What does the company do? Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
We have engaged Sinoma mostly around climate change,
Sinoma is one of the largest wind turbine blade producers
especially on disclosure of its ESG efforts. Its disclosure
in China and the third largest battery separator maker,
around water management and carbon emission given its
which is backed by strong R&D capability and support
exposure in fibreglass production is still subpar. However,
from its parent group.
we expect further ESG improvements ahead because of
Why do we like the investment? the parent group’s consolidation of its wind turbine blade
We view the stock as a proxy for growth of wind energy. business into Sinoma. Also, as its revenue contribution from
Sinoma is also one of the best state-owned enterprises the separator business increases, this should also enhance
(SOEs) in China focusing on the development of its ESG credentials.
new materials.
The company has also demonstrated leadership in wind
Among the company’s key strengths is its research and turbine blade disposal by forming an alliance which it
development (R&D) capability. Upon its Shenzhen listing in leads with its largest customer Goldwind to collect
2006, Sinoma had inherited a few R&D institutes, including decommissioned wind turbine blades. Owing to
a national laboratory that was focused on developing technology constraints, the current blade recycle rate
fibreglass materials. The company has continued to build is low (less than 10%), but Sinoma is well positioned to
on its solid R&D foundation. take on future opportunities as and when the right
technology emerges.
Sinoma’s capable management deserves mention. It has
demonstrated strong entrepreneurship in developing On the fibreglass front, the company believes its carbon
downstream applications including wind turbine blades emissions per tonne for this business is at least 20% lower
and battery separators. The team has also been stable than peers, thus it believes that it can gain market share
and runs the company like a privately owned enterprise once clients start to focus more on ESG.
despite its SOE roots.
What is the result of our engagement?
We continue our ongoing engagement with Sinoma and
encouragingly, MSCI upgraded the company’s ESG rating
from B to BB in August 2022, citing its increasing
involvement in clean tech and peer-leading R&D
investment. MSCI also highlighted improvements in
Sinoma’s carbon mitigation practices, including use of
renewable energy.
When do we next meet the company and what
will be on the ESG agenda?
We recently met Sinoma during a research trip to China
and we will look to engage the company in December to
discuss the restructuring of its glass fibre business,
including the timeline and impact on its operations from
an ESG perspective, including carbon emissions and water
usage and management.
abrdn Asia Focus plc 37
## Investment and ESG Case Studies
### Continued
carbon emissions, given that power is mostly generated
### Medikaloka Hermina
from coal.
In which year did we first invest? We also track its progress in terms of alignment with the
2021 UN SDGs, in particular, SDG 3.8, achieve universal health
coverage, including financial risk protection, access to
% Holding:
quality essential healthcare services and access to safe,
2.3%
effective, quality, and affordable essential medicines and
Where is their head office? vaccines for all.
Jakarta, Indonesia
Being the lowest cost operator, Hermina is in a good
What is their web address? position to make healthcare affordable to the masses in a
https://herminahospitals.com/en country where a large proportion of the population is still
relatively poor.
What does Medikaloka Hermina do?
The Indonesian hospital operator started out as a What is the result of our engagement?
maternity clinic with seven inpatient beds in east Jakarta in Hermina is making an effort to disclose more around
1985. Since then, it has grown into the country’s largest sustainability in its annual reports. It has publicised its
private hospital group by number of operational beds, with efforts in the following areas.
45 hospitals across 31 cities.
On the environmental front, all its hospitals have
Why do we like the company? implemented the green hospital concept, leading to a
Hermina is the lowest-cost hospital operator in Indonesia, significant reduction in its environmental footprint (e.g.,
best positioned to provide healthcare coverage for the waste, energy use, water use, and greenhouse gas
masses in the country, that benefits from the roll-out of emissions). Recently, it introduced solar energy to two of
BJPS (Indo’s universal healthcare scheme) and structural its hospitals, in Depok and Bogor.
rise in healthcare demand.
In terms of social impact, Hermina focuses on public
It is very clear in their positioning, targeting the mass health efforts and assisting underprivileged local
market, and has a key competitive strength in cost communities around its hospitals. It routinely conducts
leadership to serve this target customer segment. Of the events to provide free medical services.
company’s founding members, some continue to run the
On governance, it has created a unique and favourable
hospital and have executed well on the strategy.
structure, where the shareholders, management and key
Hermina’s core strength is in women’s and children’s doctors are incentivised and aligned to minority interests.
health-care services, given its beginnings in maternity
We view Hermina as one of the investments whereby
services. It has strong brand equity in obstetrics,
business and social good come together well. We have
gynaecology and paediatrics. More than 73,000 babies
been invested in Hermina for years for abrdn portfolios
are born in Hermina hospitals every year.
well before it turned profitable, and we have been
Interests are generally aligned, with management owning engaging the company consistently on its performance
shares and key doctors incentivised by a partner-model, delivery. If Hermina does well, it will contribute to the
where they own shares in the hospitals they work in. greater good of society in Indonesia in the end.
Overall, we regard Hermina as a good quality operator When do we next meet the company and what will be on
in its field. the ESG agenda?
We are planning to meet the company in January 2024
When did we engage Medikaloka Hermina on ESG?
and get an update on potential health-care policy
We last met Hermina in May 2023.
changes, tariffs as well as the roll-out of JKN (National
What were the key areas of engagement? Health Insurance) programme, given that these areas
Our focus remains on engaging Hermina to disclose more would drive mass health-care penetration.
around its sustainability efforts, especially around carbon
emissions with the company having a high weighted
average carbon intensity due to its geographic spread
across Indonesia. We have discussed electricity usage,
which is the main way that the company contributes to
38 abrdn Asia Focus plc
reporting of alignment with the United Nations’ Sustainable
### Vijaya Diagnostic Centre
Development Goals (SDGs) by companies, given this is an
area of increasing investor interest. In particular, UN SDG 3,
In which year did we first invest?
which focuses on ensuring healthy lives and promoting
2021
well-being for all at all ages. Medical diagnostics testing is
% Holding: an essential part of healthcare, which drives better
1.5% outcomes for patients. Despite this, access to diagnostics
across India remains mixed.
Where is their head office?
Hyderabad, India One of the focus areas for Vijaya is in making diagnostic
services affordable for Indians who have historically
What is their web address?
underspent on medical care, for a range of reasons,
https://www.vijayadiagnostic.com/
including affordability. This runs parallel to their aim of
What does Vijaya Diagnostic Centre do? expanding into India’s Tier 2 and Tier 3 cities that have a Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Founded in 1981, Vijaya Diagnostic Centre has grown to longer runway for growth and expansion compared to the
become the largest diagnostics provider in South India. metropolises, which they expect to be at least 50% of their
capital expenditure for the next 3 years. For example, in a
Why do we like the company?
previous meeting, the company explained how it has
Vijaya has a long growth runway ahead despite its
acquired high-end CT scan machines that cost
regional market leadership in South India. A large part of
significantly more than the standard models to do
this is due to a structural change seen in India: Historically,
mammography tests without compromising patients’
the country has underspent in healthcare, resulting in
health. Vijaya is not charging a premium for this
under penetration of essential medical diagnostics
service, rather it is relying on higher rate of utilisation
services. Now, with an expanding and increasingly more
to make money.
affluent middle class, demand for healthcare services is
rising alongside greater insurance penetration. Vijaya is In encouraging the company to do more around its
well-placed to benefit as medical services become better disclosures so that the market can recognise the
developed across the board, and costs turn more company’s efforts and understand its role in delivery
affordable for the masses. diagnostics, we engaged Vijaya and provided a summary
of disclosures that we would like them to make in their
Compared to its peers, the company draws 95% of
forthcoming sustainability report. This included a range of
revenue from the end consumer segment (patients),
granular disclosures, as well as the company’s alignment
which is typically less price sensitive and more driven by
with UN SDG 3. On the environment front, we have also
brand strength. Also, Vijaya’s one-stop shop model, with
sought to assess the company’s impact in terms of carbon
radiology and pathology in every centre, makes it more
emissions impact, mainly through checking on its energy
convenient for patients and increases the barrier to entry
and electricity usage.
for competitors, including the new-age digital disrupters –
as the capital requirement for radiology machines is What is the result of our engagement?
relatively high. Vijaya is free-cash-flow generative and has In response, the company told us it has started taking
a business model that looks as good as its peers, with steps to engage an agency to help Vijaya capture the
nationwide reach. necessary data that we have suggested through our
engagement. We will continue to monitor and engage
When did we engage Vijaya on ESG?
with Vijaya once the sustainability report is made available
We last met Vijaya in April 2023.
to explore ways to further improve disclosures around
What were the key areas of engagement? ESG and sustainability such that it is recognised by the
Since its initial public offering in 2021, there has not been market and external ratings agencies.
much in terms of disclosures around ESG and
When do we next meet the company and what will be on
sustainability from the company. So, in the April meeting,
the ESG agenda?
our key topics of discussion included labour management,
We would look to meet the company in February 2024
especially around employee engagement, training and
and follow up on issues such as employee engagement,
turnover, corporate behaviour as well as corporate
turnover and corporate behaviour.
governance and disclosure. In particular, we are
keen to encourage Vijaya on greater
abrdn Asia Focus plc 39
# Investment and ESG Case Studies

Continued

# John Keells

In which year did we first invest?

1997

% Holding:

2.6%

Where is their head office?

Colombo, Sri Lanka

What is their web address?

https://www.keells.com

What does the company do?

John Keells (JKH) has been in business for 153 years. It is Sri Lanka's largest conglomerate operating in several sectors including leisure (hotels & resorts in Sri Lanka and Maldives), transportation (ports and logistics infrastructure), consumer foods (beverages and ice cream), retail (supermarket chain) and property and financial services (banking and insurance).

Why do we like the investment?

JKH is a diversified group with high-quality assets that serves as a good proxy for the Sri Lankan economy. It is essentially a large company operating in a small market. Management have executed well and the group has been able to attract the best talent locally which should ensure that it continues to thrive over the long term, especially given the exciting potential for Sri Lanka in areas such as tourism and transhipment.

Many of John Keells' businesses are capital-intensive and the group is nearing the tail end of a long investment cycle. In particular, Cinnamon Life Integrated Resort in Colombo (pictured below) is costing about US$1 billion, with just US$100 million to go, versus its market capitalisation of around US$600 million. It is the first integrated resort in Sri Lanka and the largest private investment project. This big project is finally in the harvesting stage, with revenues from most of the residential units sold already recognised in FY2021. From FY2024 onwards, we expect the mall and casino to start operating, which is likely to contribute substantially to the group.

More broadly, the group has also been able to ride through Sri Lanka's debt crisis because a large part of its business is earned in overseas currencies, especially the US dollar. As a result, the group was not overly affected by the depreciation of the Sri Lankan rupee, while its businesses that were more exposed to overseas customers, such as ports and its hospitality segment in the

Maldives, held up well, mitigating the impact from the domestic uncertainty on its local operations. Now, the economy is off from its trough and so John Keells' domestic business is stabilising as well. The currency is fluid again and tourism should slowly recover, which bodes well for spending at the hotels, mall and casino at its integrated resort.

How do we assess John Keells on its ESG efforts?

We view John Keells as one of the best governed groups in Sri Lanka with good disclosures on the environmental and social aspects, although the group is not rated by MSCI. Domestically, John Keells was ranked first in the Transparency in Corporate Reporting (TRAC) Assessment by Transparency International Sri Lanka (TISL) for the third consecutive year, with a 100% score for transparency in disclosure practices.

As a part of the group's ongoing efforts towards increasing emphasis on its ESG aspects, John Keells reformulated its ESG framework in collaboration with an international third-party consulting firm, by setting revised group-wide ESG ambitions and translating such ambitions to ESG-related targets.

A key area of focus has been the environmental impact. For FY2022/23, the group's carbon footprint per million rupees of revenue decreased by 29% and water withdrawn per million rupees of revenue decreased by 31%, respectively compared to the previous year. A project to highlight would be 'Plasticcycle', its initiative to reduce usage of single-use plastics, support responsible disposal, and promote recycling initiatives and innovation to support a circular economy. Despite the challenges posed by the economic crisis, 'Plasticcycle' has collected 127,000 kg of recyclable plastic waste since its inception in 2017/18.

When do we next meet the company and what will be on the ESG agenda?

We have been engaging with John Keells on material ESG risks, specifically around anti-money laundering (AML) controls and counter-terrorism financing. Looking ahead, we will continue to engage with John Keells on these fronts. With the casino set to start operating in FY2024, we plan to meet the company early in the new year to focus on the selection process for the casino operator and that operator's credibility, as well as their stance towards AML practices and counter-terrorism financing.

![img-3.jpeg](img-3.jpeg)

abrdn Asia Focus plc
## Governance
### The business of the Company is that of an investment trust
### investing in the economies of Asia excluding Japan. The
### Directors do not envisage any change in this activity in the
### foreseeable future. The Company is registered as a public
### limited company in England and Wales and is an investment
### company as defined by Section 833 of the Companies Act
### 2006. The Company is also a member of the Association of
### Investment Companies
abrdn Asia Focus plc 41
## Board of Directors
### Krishna Shanmuganathan
### Charlotte Black
Independent Non-Executive Director
Independent Non-Executive Director
Experience:
Experience:
Mr Shanmuganathan has had a varied and successful
A Fellow of the Chartered Institute for Securities &
career in diplomacy, asset management, consulting and
Investment, she was until 2015 director, corporate affairs
corporate advisory, with a particular focus on Asia. He
at Brewin Dolphin Holdings PLC, having previously served
now sits on a number of boards and is chair of Weiss
within that company as marketing director and in
Korea Opportunities Fund.
investment management roles. She has served on the
boards of a number of industry related entities including
Length of service:
The Wealth Management Association, The Chartered
3 years, appointed a Director on 3 June 2020
Institute for Securities & Investment and Euroclear PLC.
Charlotte is a founder Director of Artclear Ltd – a financial
Last re-elected to the Board:
infrastructure platform for the art industry.
30 November 2022
Length of service:
Committee membership:
4 years 10 Months, appointed a Director on
Management Engagement Committee and Nomination 16 January 2019
Committee
Last re-elected to the Board:
Remuneration: 30 November 2022
£37,500 per annum
Committee membership:
All other public company directorships: Audit Committee, Management Engagement Committee
Weiss Korea Opportunity Fund and Nomination Committee
Other connections with Trust or Manager: Remuneration:
None £28,500 per annum
Shareholding in Company: All other public company directorships:
5,270 Ordinary shares None
Other connections with Trust or Manager:
None
Shareholding in Company:
4,790 Ordinary shares
42 abrdn Asia Focus plc
### Lindsay Cooper Alex Finn
Independent Non-Executive Director Independent Non-Executive Director
Experience: Experience: Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
A Singapore permanent resident and member of the A partner for 27 years in PwC's global financial services
Institute of Chartered Accountants of Scotland. Mr Cooper practice, retiring on 30 June 2022. During his career at
co-founded Arisaig Partners in 1996, an independent PwC Mr Finn was responsible for the services that PwC
Investment Management business where, for 20 years, he provided internationally to a number of its largest global
had investment responsibility for the Arisaig Asia clients, all of which had extensive operations in Asia. He
Consumer Fund. Following semi-retirement Mr Cooper was also responsible for supporting clients in large scale
founded Chic & Unique Pte Ltd, a boutique hotels and accounting and financial change programmes, was
hospitality business in Asia and Europe and, more recently, PwC's EMEA insurance leader, sat on its EMEA FS
founded Chi Tree Health, in Singapore. Mr Cooper is also leadership team and led a number of PwC's largest global
involved in two charities, Magic Bus Global and Angkor audit engagements.
Hospital for Children (AHC) in Cambodia.
Length of service:
Length of service: Appointed a Director on 13 July 2022
Appointed a Director on 15 June 2022
Last re-elected to the Board:
Last re-elected to the Board: Elected on 30 November 2022
Elected on 30 November 2022
Committee membership:
Committee membership: Audit Committee (Chairman), Management Engagement
Audit Committee, Management Engagement Committee Committee (Chairman) and Nomination Committee
and Nomination Committee
Remuneration:
Remuneration: £32,000 per annum
£28,500 per annum
All other public company directorships:
All other public company directorships: Cembra Money Bank AG
Nil
Other connections with Trust or Manager:
Other connections with Trust or Manager: None
None
Shareholding in Company:
Shareholding in Company: Nil
Nil
abrdn Asia Focus plc 43
## Board of Directors
### Continued
### Randal Alexander McDonnell,
### Earl of Antrim
Independent Non-Executive Director
Experience:
A partner of Sarasin & Partners LLP responsible for the
management of private client and charity portfolios as
well as self-invested personal pension schemes. He is
chairman of Sarasin’s London partnership. He is also
a non–executive director of a number of other
private companies.
Length of service:
10 years, appointed a Director on 1 July 2013
Last re-elected to the Board:
30 November 2022
Committee membership:
Management Engagement Committee, Nomination
Committee and Audit Committee
Remuneration:
£28,500 per annum
All other public company directorships:
None
Other connections with Trust or Manager:
None
Shareholding in Company:
4,000 Ordinary shares
44 abrdn Asia Focus plc
# Directors' Report

The Directors present their Report and the audited financial statements for the year ended 31 July 2023.

## Results and Dividends

Details of the Company's results and proposed dividends are shown on pages 24 of this Report.

## Investment Trust Status

The Company (registered in England & Wales No. 03106339) has been accepted by HM Revenue & Customs as an investment trust subject to the Company continuing to meet the relevant eligibility conditions of Section 1158 of the Corporation Tax Act 2010 and the ongoing requirements of Part 2 Chapter 3 Statutory Instrument 2011/2999 for all financial years commencing on or after 1 August 2012. The Directors are of the opinion that the Company has conducted its affairs for the year ended 31 July 2023 so as to enable it to comply with the ongoing requirements for investment trust status.

## Individual Savings Accounts

The Company has conducted its affairs so as to satisfy the requirements as a qualifying security for Individual Savings Accounts. The Directors intend that the Company will continue to conduct its affairs in this manner.

## Capital Structure, Buybacks and Issuance

The Company's capital structure is summarised in note 14 to the financial statements.

At 31 July 2023, there were 156,457,978 fully paid Ordinary shares of 5p each (2022 - 156,953,631 Ordinary shares of 5p each) in issue with a further 52,244,590 Ordinary shares of 5p held in treasury (2022 - 51,744,590 Ordinary shares of 5p each held in treasury). During the year 500,000 Ordinary shares were purchased in the market for treasury (2022 - nil). During the period and up to the date of this report no Ordinary shares were issued for cash and no shares were sold from or purchased into treasury.

On 14 December 2022, 6,334 units of Convertible Unsecured Loan Stock 2025 were converted into 2,158 new Ordinary shares of 5p each. On 14 June 2023 6,419 units of Convertible Unsecured Loan Stock 2025 were converted into 2,189 new Ordinary shares of 5p each. In accordance with the terms of the CULS Issue (as adjusted to reflect the five for one share subdivision in February 2022), the conversion price of the CULS for both conversions was determined at 293.0p nominal of CULS for one Ordinary share of 5p.

## Voting Rights

Ordinary shareholders are entitled to vote on all resolutions which are proposed at general meetings of the Company. The Ordinary shares carry a right to receive dividends. On a winding up, after meeting the liabilities of the Company, the surplus assets will be paid to Ordinary shareholders in proportion to their shareholdings.

CULS holders have the right to attend but not vote at general meetings of the Company. A separate resolution of CULS holders would be required to be passed before any modification or compromise of the rights attaching to the CULS can be made.

## Gearing

On 1 December 2020 the Company issued a £30 million Senior Unsecured Loan Note (the "Loan Note") at an annualised interest rate of 3.05%. The Loan Note is unsecured, unlisted and denominated in sterling and due to mature in 2035. The Loan Note ranks pari passu with the Company's other unsecured and unsubordinated financial indebtedness.

## Management Agreement

The Company has appointed abrdn Fund Managers Limited ("aFML"), a wholly owned subsidiary of abrdn plc, as its alternative investment fund manager. aFML has been appointed to provide investment management, risk management, administration and company secretarial services and promotional activities to the Company. The Company's portfolio is managed by abrdn Asia Limited ("abrdn Asia") by way of a group delegation agreement in place between aFML and abrdn Asia. In addition, aFML has sub-delegated administrative and secretarial services to abrdn Holdings Limited and promotional activities to abrdn Investments Limited ("aIL").

## Management Fee

With effect from 1 August 2021 the annual management fee has been charged at 0.85% for the first £250,000,000, 0.60% for the next £500,000,000 and 0.50% over £750,000,000. Investment management fees are charged 25% to revenue and 75% to capital.

The management agreement may be terminated by either the Company or the Manager on the expiry of three months' written notice. On termination, the Manager would be entitled to receive fees which would otherwise have been due to that date.

abrdn Asia Focus plc

45
## Directors’ Report
### Continued
The Management Engagement Committee reviews the
### The Role of the Chair
terms of the management agreement on a regular basis
The Chair is responsible for providing effective leadership
and have confirmed that, due to the long-term relative
to the Board, by setting the tone of the Company,
performance, investment skills, experience and
demonstrating objective judgement and promoting a
commitment of the investment management team, in
culture of openness and debate. The Chair facilitates the
their opinion the continuing appointment of aFML and
effective contribution, and encourages active
abrdn Asia is in the interests of shareholders as a whole.
engagement, by each Director. In conjunction with the
Company Secretary, the Chair ensures that Directors
### Political and Charitable Donations
receive accurate, timely and clear information to assist
The Company does not make political donations (2022 - them with effective decision-making. The Chair leads the
nil) and has not made any charitable donations during the evaluation of the Board and individual Directors, and acts
year (2022 – nil). upon the results of the evaluation process by recognising
strengths and addressing any weaknesses. The Chair
### Risk Management also engages with major shareholders and ensures that all
Details of the financial risk management policies and Directors understand shareholder views.
objectives relative to the use of financial instruments by
The Company has announced that Davina Curling will
the Company are set out in note 19 to the financial
become Senior Independent Director with effect from her
statements.
appointment to the Board on 1 March 2024. Prior to then
the Audit Committee Chairman in combination with the
### The Board
other independent Directors will continue to fulfil the duties
The current Directors, Randal Dunluce (The Earl of Antrim),
of the senior independent director, acting as a sounding
C Black, K Shanmuganathan, L Cooper and A Finn,
board for the Chair and acting as an intermediary for
together with N Cayzer who retired on 30 November
other Directors as applicable. The Audit Committee
2022, were the only Directors who served during the year.
Chairman and, following appointment, Senior
Pursuant to Principle 23 of the AIC’s Code of Corporate
Independent Director are both available to shareholders
Governance which recommends that all directors should
to discuss any concerns they may have.
be subject to annual re-election by shareholders, all the
members of the Board will retire at the AGM scheduled for
Board Diversity
5 December 2022 and, with the exception of the Earl of
Antrim, will offer themselves for re-election. Details of The Board recognises the importance of having a range
each Director’s contribution to the long term success of of skilled, experienced individuals with the right knowledge
the Company are provided on page 49. represented on the Board in order to allow it to fulfil its
obligations. The Board also recognises the benefits and is
The Board considers that there is a balance of skills and
supportive of, and will give due regard to, the principle of
experience within the Board relevant to the leadership
diversity in its recruitment of new Board members. The
and direction of the Company and that all the Directors
Board will not display any bias for age, gender, race,
contribute effectively.
sexual orientation, socio-economic background, religion,
In common with most investment trusts, the Company has ethnic or national origins or disability in considering the
no employees. Directors’ & Officers’ liability insurance appointment of Directors. The Board will continue to
cover has been maintained throughout the year at the ensure that all appointments are made on the basis of
expense of the Company. merit against the specification prepared for each
appointment. The Board will take account of the targets
set out in the FCA’s Listing Rules, which are set out overleaf.
The Board has resolved that the Company’s year-end
date is the most appropriate date for disclosure purposes.
The following information has been provided by each
Director through the completion of questionnaires.
46 abrdn Asia Focus plc
### Table for reporting on gender as at 31 July 2023
Number of Percentage of Number of senior Number in Percentage of
board the board positions executive executive
members on the board management management
(CEO, CFO, Chair and
SID)
Men 4 80%
n/a n/a n/a
Women 1 20% (note 3) (note 4) (note 4)
(note 1)
Not specified/prefer not to say - -
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
### Table for reporting on ethnic background as at 31 July 2023
Number of Percentage of Number of senior Number in Percentage of
board the board positions executive executive
members on the board management management
(CEO, CFO, Chair and
SID)

| White British or other White | 4 80% |  |  |  |
| --- | --- | --- | --- | --- |
| (including minority-white groups) |  | n/a | n/a | n/a |
|  |  | (note 3) | (note 4) | (note 4) |

Mixed / Multiple Ethnic Groups - -
Asian/Asian British 1 20%
Black/African/Caribbean/Black - -
British
Other ethnic group, including Arab - -
Not specified/prefer not to say - -
Notes:
1. The Company did not meet the target that at least 40% of Directors are women as set out in LR 9.8.6R (9)(a)(i) for the year ended 31 July 2023.
However, following the appointments of Ms Macdonald and Ms Curling on 5 December 2023 and 1 March 2024 the Board expects to be
compliant for the year ending 31 July 2024.
2. The Company meets the target that at least one Director is from a minority ethnic background as set out in LR 9.8.6R (9)(a)(iii)
3. The Company does not meet the target for the year to 31 July 2023 as the Chair is not a woman and the Company did not have a Senior
Independent Director. However, with effect from 1 March 2024, Ms Davina Curling will join the Board as an independent non executive Director
and as Senior independent Director and the Company will therefore be compliant for the year ending 31 July 2024. The Company is externally
managed and does not have any executive staff specifically it does not have either a CEO or CFO.
4. This column is not applicable as the Company is externally managed and does not have any executive staff .
abrdn Asia Focus plc 47
## Directors’ Report
### Continued
For the reasons set out in the AIC Code, and as explained
### Corporate Governance
in the UK Corporate Governance Code, the Board
The Company is committed to high standards of
considers that provisions 1 to 4 above are not relevant to
corporate governance. The Board is accountable to the
the position of the Company, being an externally-
Company’s shareholders for good governance and this
managed investment company. In particular, all of the
statement describes how the Company has applied the
Company’s day-to-day management and administrative
principles identified in the UK Corporate Governance
functions are outsourced to third parties. As a result, the
Code as published in July 2018 (the “UK Code”), which is
Company has no executive directors, employees or
available on the Financial Reporting Council’s (the “FRC”)
internal operations. The Company has therefore not
website: frc.org.uk.
reported further in respect of provisions 1 to 4 above. See
The Board has also considered the principles and ‘Nomination Committee’ below for further details on the
provisions of the AIC Code of Corporate Governance as appointment of a new Senior Independent Director. The
published in February 2019 (the “AIC Code”). The AIC full text of the Company’s Corporate Governance
Code addresses the principles and provisions set out in the Statement can be found on the Company’s website:
UK Code, as well as setting out additional provisions on asia-focus.co.uk.
issues that are of specific relevance to the Company. The
During the year ended 31 July 2023, the Board had five
AIC Code is available on the AIC’s website: theaic.co.uk.
scheduled meetings. In addition, the Audit Committee met
The Board considers that reporting against the principles twice and the Management Engagement Committee met
and provisions of the AIC Code, which has been endorsed once and there has been a number of ad hoc Board
by the FRC provides more relevant information to meetings. Between meetings the Board maintains regular
shareholders. contact with the Manager. Directors have attended the
following scheduled Board meetings and Committee
The Board confirms that, during the year, the Company
meetings during the year ended 31 July 2023 (with their
complied with the principles and provisions of the AIC
eligibility to attend the relevant meeting in brackets):
Code and the relevant provisions of the UK Code, except
as set out below.
Director Board Audit Nomination Management
1. Interaction with the workforce (provisions 2, 5 and 6); Committee Committee Engagement
Committee
2. the role and responsibility of the chief executive
B
K Shanmuganathan 5 (5) 1 (1) 4 (4) 1 (1)
(provisions 9 and 14);
Earl of Antrim 5 (5) 2 (2) 4 (4) 1 (1)
3. previous experience of the chairman of a
C Black 5 (5) 2 (2) 4 (4) 1 (1)
remuneration committee (provision 32);
L. Cooper 5 (5) 2 (2) 4 (4) 1 (1)
4. executive directors’ remuneration
A Finn 5 (5) 2 (2) 4 (4) 1 (1)
(provisions 33 and 36 to 40); and
A
N Cayzer 2 (2) n/a 1 (1) 1 (1)
5. senior independent director (provision 12)
A Mr Cayzer retired on 30 November 2022
(see below);
B Mr Shanmuganathan was appointed Chair on 30 November 2022 and resigned from
membership of the Audit Committee from that date
48 abrdn Asia Focus plc
The Nomination Committee has reviewed the
### Policy on Tenure
contributions of each Director ahead of their proposed re-
In compliance with the provisions of the AIC Code, it is
elections at the AGM on 5 December 2023. Ms Black has
expected that Directors will serve in accordance with the
continued to bring significant financial promotion,
nine year time limits laid down by the AIC Code.
marketing and communications expertise to the Board
and has been closely involved in the ongoing development
### Board Committees
of the Company’s website; Mr Shanmuganathan has
continued to bring his deep experience of Asia and has
Audit Committee
seamlessly assumed the role of Chair during the year to
The Audit Committee Report is on pages 59 to 61 of this
great effect; Mr Cooper has brought the weight of his
Annual Report.
significant local Asian market experience to the Board’s
discussions; and Mr Finn has brought relevant and recent
Nomination Committee
accounting and financial experience to the board and has
All appointments to the Board of Directors are considered Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
led the Audit Committee with expertise. For the foregoing
by the Nomination Committee which comprises all of the
reasons, with the exception of the Earl of Antrim who will
Directors. The Board’s overriding priority in appointing new
be retiring from the Board at the forthcoming AGM, the
Directors to the Board is to identify the candidate with the
independent members of the Nomination Committee
best range of skills and experience to complement
have no hesitation in recommending the re-election of
existing Directors. The Board also recognises the benefits
each Director who will be submitting themselves for re-
of diversity and its policy on diversity is referred to in the
election at the AGM on 5 December 2023.
Strategic Report on page 22.
Management Engagement Committee
As part of the continuing Board succession and
The Management Engagement Committee comprises all
refreshment plans, the Earl of Antrim will be retiring from
of the Directors and is chaired by Mr Finn. The Committee
the Board at the AGM to be held on 5 December 2023.
is responsible for reviewing the performance of the
Therefore, during the year the Nomination Committee
Investment Manager and its compliance with the terms of
commenced a search for a new independent non
the management and secretarial agreement. The terms
executive Director using the services of Fletcher Jones
and conditions of the Investment Manager’s appointment,
Limited, an independent recruitment consultant. As part
including an evaluation of fees, are reviewed by the
of the search a specification of desired attributes and
Committee on an annual basis. The Committee believes
qualities was prepared and the recruitment process
that the continuing appointment of the Manager on the
culminated in the decision to appoint Ms Lucy Macdonald
terms agreed is in the interests of shareholders as a whole.
and Ms Davina Curling as independent non-executive
Directors with effect from the close of business of the AGM Remuneration Committee
on 5 December 2023 and 1 March 2024, respectively and Under the UK Listing Authority rules, where an investment
Ms Curling has agreed to become Senior Independent trust has only non-executive directors, the Code principles
Director. relating to directors’ remuneration do not apply.
Accordingly, matters relating to remuneration are dealt
The Board undertakes an annual evaluation of the Board,
with by the full Board, which acts as the Remuneration
Directors, the Chair and the Audit Committee which is
Committee, and is chaired by the Chair.
conducted by questionnaires. The 2023 evaluation was
conducted using questionnaires and highlighted certain The Company’s remuneration policy is to set
areas of further focus such as continuing professional remuneration at a level to attract individuals of a calibre
development which will be addressed with input where appropriate to the Company's future development.
necessary from the Company’s advisors. Overall, the Further information on remuneration is disclosed in the
Committee has concluded that the Board has an Directors’ Remuneration Report on pages 55 to 57.
excellent balance of experience, knowledge of
Terms of Reference
investment markets, legal regulation and financial
The terms of reference of all the Board Committees may
accounting and continues to work in a collegiate and
be found on the Company’s website asia-focus.co.uk and
effective manner.
copies are available from the Company Secretary upon
request. The terms of reference are reviewed and re-
assessed by the Board for their adequacy on an
annual basis.
abrdn Asia Focus plc 49
## Directors’ Report
### Continued
 the Board and Manager have agreed clearly defined
### Internal Control
investment criteria, specified levels of authority and
In accordance with the Disclosure and Transparency
exposure limits. Reports on these issues, including
Rules (DTR 7.2.5), the Board is ultimately responsible for
performance statistics and investment valuations, are
the Company’s system of internal control and for
regularly submitted to the Board and there are
reviewing its effectiveness and confirms that there is an
meetings with the Manager and Investment Manager
ongoing process for identifying, evaluating and managing
as appropriate;
the significant risks faced by the Company. This process
has been in place for the year under review and up to the  as a matter of course the Manager’s compliance
date of approval of this Annual Report and Financial department continually reviews abrdn’s operations and
Statements. It is regularly reviewed by the Board and reports to the Board on a six monthly basis;
accords with the FRC Guidance.  written agreements are in place which specifically
define the roles and responsibilities of the Manager and
The Board has reviewed the effectiveness of the system of
other third party service providers and, where relevant,
internal control. In particular, it has reviewed and updated
ISAE3402 Reports, a global assurance standard for
the process for identifying and evaluating the significant
reporting on internal controls for service organisations,
risks affecting the Company and policies by which these
or their equivalents are reviewed;
risks are managed.
 the Board has considered the need for an internal audit
The Directors have delegated the investment
function but, because of the compliance and internal
management of the Company’s assets to the abrdn
control systems in place within abrdn, has decided to
Group within overall guidelines, and this embraces
place reliance on the Manager’s systems and internal
implementation of the system of internal control, including
audit procedures; and
financial, operational and compliance controls and risk
 at its October 2023 meeting, the Audit Committee
management. Internal control systems are monitored and
carried out an annual assessment of internal controls for
supported by the abrdn Group’s internal audit function
the year ended 31 July 2023 by considering
which undertakes periodic examination of business
documentation from the Manager, Investment Manager
processes, including compliance with the terms of the
and the Depositary, including the internal audit and
management agreement, and ensures that
compliance functions and taking account of events
recommendations to improve controls are implemented.
since 31 July 2023. The results of the assessment, that
Risks are identified and documented through a risk internal controls are satisfactory, were then reported to
management framework by each function within the the Board at the next Board meeting.
abrdn Group’s activities. Risk includes financial, regulatory,
market, operational and reputational risk. This helps the Internal control systems are designed to meet the
internal audit risk assessment model identify those Company’s particular needs and the risks to which it is
functions for review. Any weaknesses identified are exposed. Accordingly, the internal control systems are
reported to the Board, and timetables are agreed for designed to manage rather than eliminate the risk of
implementing improvements to systems. The failure to achieve business objectives and by their nature
implementation of any remedial action required is can only provide reasonable and not absolute assurance
monitored and feedback provided to the Board. against mis-statement and loss.
The significant risks faced by the Company have been
### Going Concern
identified as being financial; operational; and
compliance-related. In accordance with the Financial Reporting Council's
guidance the Directors have undertaken a rigorous review
The key components of the process designed by the
of the Company's ability to continue as a going concern.
Directors to provide effective internal control are
The Company’s assets consist of equity shares in
outlined below:
companies listed on recognised stock exchanges and are
 the Manager prepares forecasts and management considered by the Board to be realisable within a relatively
accounts which allow the Board to assess the short timescale under normal market conditions. The
Company’s activities and review its performance; Board has set overall limits for borrowing and reviews
regularly the Company’s level of gearing, cash flow
50 abrdn Asia Focus plc
projections and compliance with banking covenants. The The Criminal Finances Act 2017 introduced a new
Board has also reviewed stress testing and liquidity corporate criminal offence of “failing to take reasonable
analysis to ensure that even in significant negative steps to prevent the facilitation of tax evasion”. The Board
markets the Company would still be able to raise sufficient has confirmed that it is the Company’s policy to conduct
capital to repay its liabilities. all of its business in an honest and ethical manner. The
Board takes a zero-tolerance approach to facilitation of
The Directors are mindful of the Principal Risks and
tax evasion, whether under UK law or under the law of any
Uncertainties disclosed in the Strategic Report on pages
foreign country.
20 and 21 and they believe that the Company has
adequate financial resources to continue its operational
### Accountability and Audit
existence for a period of 12 months from the date of
The respective responsibilities of the Directors and the
approval of this Annual Report. They have arrived at this
auditors in connection with the financial statements are
conclusion having confirmed that the Company’s
set out on pages 58 and 69 respectively.
diversified portfolio of realisable securities is sufficiently Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
liquid and could be used to meet short-term funding Each Director confirms that:
requirements were they to arise, including in potentially
 so far as he or she is aware, there is no relevant audit
less favourable market conditions. The Directors have also
information of which the Company’s auditors are
reviewed the revenue and ongoing expenses forecasts for
unaware; and,
the coming year. Accordingly, the Directors believe that it
 each Director has taken all the steps that they could
is appropriate to continue to adopt the going concern
reasonably be expected to have taken as a Director in
basis in preparing the financial statements.
order to make themselves aware of any relevant audit
### Management of Conflicts of Interest information and to establish that the Company’s
auditors are aware of that information.
The Board has a procedure in place to deal with a
situation where a Director has a conflict of interest. As part
Additionally there have been no important events since
of this process, the Directors prepare a list of other
the year end that impact this Annual Report.
positions held and all other conflict situations that may
need to be authorised either in relation to the Director
The Directors have reviewed the independent auditors’
concerned or his connected persons. The Board considers
procedures in connection with the provision of non-audit
each Director’s situation and decides whether to approve
services. No non-audit services were provided by the
any conflict, taking into consideration what is in the best
independent auditors during the year and the Directors
interests of the Company and whether the Director’s
remain satisfied that the auditors’ objectivity and
ability to act in accordance with his or her wider duties is
independence has been safeguarded.
affected. Each Director is required to notify the Company
Secretary of any potential, or actual, conflict situations
### Independent Auditors
that will need authorising by the Board. Authorisations
At the November 2022 AGM shareholders approved the
given by the Board are reviewed at each Board meeting.
re-appointment of PricewaterhouseCoopers LLP (“PwC”)
No Director has a service contract with the Company as independent auditors to the Company. PwC has
although Directors are issued with letters of appointment expressed its willingness to continue to be the Company’s
upon appointment. The Directors’ interests in contractual auditors and a Resolution to re-appoint PwC as the
arrangements with the Company are as shown in note 18 Company’s auditors and to authorise the Directors to fix
to the financial statements. No other Directors had any the auditors’ remuneration will be put to the forthcoming
interest in contracts with the Company during the period Annual General Meeting.
or subsequently.
The Board has adopted appropriate procedures designed
to prevent bribery. The Company receives periodic
reports from its service providers on the anti-bribery
policies of these third parties. It also receives regular
compliance reports from the Manager.
abrdn Asia Focus plc 51
## Directors’ Report
### Continued
The Notice of the Annual General Meeting, included within
### Substantial Interests
the Annual Report and financial statements, is sent out at
The Board has been advised that the following
least 20 working days in advance of the meeting. All
shareholders owned 3% or more of the issued Ordinary
shareholders have the opportunity to put questions to the
share capital of the Company at 31 July 2023:
Board or the Manager, either formally at the Company’s

| Shareholder No. of Ordinary |  | % held | Annual General Meeting or, where possible, at the |
| --- | --- | --- | --- |
|  | shares held |  | subsequent buffet luncheon for shareholders. The |
| City of London Investment | 37,115,489 23.7 |  | Company Secretary is available to answer general |
| Management Company |  |  | shareholder queries at any time throughout the year. |

AllSpring Global Investments 20,431,685 13.1
### Consumer Duty
Interactive Investor (non-beneficial) 12,756,311 8.2
The FCA’s Consumer Duty rules were published in July
abrdn Savings Scheme (non-beneficial) 11,586,710 7.4 2022. The rules comprise a fundamental component of
the FCA’s consumer protection strategy and aim to
Hargreaves Lansdown (non-beneficial) 11,010,815 7.0
improve outcomes for retail customers across the entire
Funds managed by abrdn 5,523,368 3.5
financial services industry through the assessment of
1607 Capital Partners 5,340,300 3.4 various outcomes, one of which is an assessment of
whether a product provides value. Under the Consumer
Charles Stanley 5,060,341 3.2
Duty, the Manager is the product ‘manufacturer’ of the
Company and therefore the Manager was required to
There have been no significant changes notified in
publish its assessment of value from April 2023. Using a
respect of the above holdings between 31 July 2023
newly developed assessment methodology, the Manager
and 19 October 2023.
assessed the Company as 'expected to provide fair value
for the reasonably foreseeable future'. As this was the first
### The UK Stewardship Code and Proxy Voting
year of assessment, the Board gained an understanding
Responsibility for actively monitoring the activities of
of the Manager's basis of assessment and no concerns
portfolio companies has been delegated by the Board to
were identified with either the assessment method or the
the AIFM which has sub-delegated that authority to the
outcome of the assessment.
Manager.
### The Manager is a tier 1 signatory of the UK Stewardship Special Business at the Annual
Code which aims to enhance the quality of engagement
### General Meeting
by investors with investee companies in order to improve
their socially responsible performance.
Directors’ Authority to Allot Relevant Securities
Approval is sought in Resolution 10, an ordinary resolution,
### Relations with Shareholders
to renew the Directors’ existing general power to allot
The Directors place a great deal of importance on
securities but will also, provide a further authority (subject
communication with shareholders. The Annual Report is
to certain limits), to allot shares under a fully pre-emptive
widely distributed to other parties who have an interest in
rights issue. The effect of Resolution 10 is to authorise the
the Company’s performance. Shareholders and investors
Directors to allot up to a maximum of 103.9 million shares
may obtain up to date information on the Company
in total (representing approximately 2/3 of the existing
through the Manager’s freephone information service and
issued capital of the Company), of which a maximum of
the Company’s website asia-focus.co.uk. The Company
51.9 million shares (approximately 1/3 of the existing
responds to letters from shareholders on a wide range
issued share capital) may only be applied to fully pre-
of issues.
emptive rights issues. This authority is renewable annually
The Board’s policy is to communicate directly with and will expire at the conclusion of the next Annual
shareholders and their representative bodies without the General Meeting. The Board has no present intention to
involvement of the abrdn Group (either the Company utilise this authority.
Secretary or the Manager) in situations where direct
communication is required and usually a representative
from the Board meets with major shareholders on an
annual basis in order to gauge their views.
52 abrdn Asia Focus plc
The Directors do not intend to use this authority to
Disapplication of Pre-emption Rights
purchase the Company’s Ordinary shares unless to do so
Resolution 11 is a special resolution that seeks to renew
would result in an increase in NAV per share and would be
the Directors’ existing authority until the conclusion of the
in the interests of shareholders generally. The authority
next Annual General Meeting to make limited allotments
sought will be in respect of 14.99% of the issued share
of shares for cash of up to 10% of the issued share capital
capital as at the date of the Annual General Meeting
other than according to the statutory pre-emption rights
rather than the date of this document.
which require all shares issued for cash to be offered first
The authority being sought in Resolution 12 will expire at
to all existing shareholders. This authority includes the
the conclusion of the next Annual General Meeting unless
ability to sell shares that have been held in treasury (if
it is renewed before that date. Any Ordinary shares
any), having previously been bought back by the
purchased in this way will either be cancelled and the
Company. The Board has established guidelines for
number of Ordinary shares will be reduced accordingly or
treasury shares and will only consider buying in shares for
under the authority granted in Resolution 11 above, may Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
treasury at a discount to their prevailing NAV and selling
be held in treasury. During the year the Company has not
them from treasury at or above the then prevailing NAV.
bought back any Ordinary shares for Treasury.
New shares issued in accordance with Resolution 11 and
If Resolutions 10 to 12 are passed then an announcement
subject to the authority to be conferred by Resolution 10
will be made on the date of the Annual General Meeting
will always be issued at a premium to the NAV per
which will detail the exact number of Ordinary shares to
Ordinary share at the time of issue. The Board will issue
which each of these authorities relate.
new Ordinary shares or sell Ordinary shares from treasury
for cash when it is appropriate to do so, in accordance
These powers will give the Directors additional flexibility
with its current policy. It is therefore possible that the
going forward and the Board considers that it will be in the
issued share capital of the Company may change
interests of the Company that such powers be available.
between the date of this document and the Annual
Such powers will only be implemented when, in the view of
General Meeting and therefore the authority sought will
the Directors, to do so will be to the benefit of shareholders
be in respect of 10% of the issued share capital as at the
as a whole.
date of the Annual General Meeting rather than the date
of this document.
### Notice of Meetings
Resolution 13 is a special resolution seeking to authorise
Purchase of the Company’s Shares
the Directors to call general meetings of the Company
Resolution 12 is a special resolution proposing to renew (other than Annual General Meetings) on 14 days’ notice.
the Directors’ authority to make market purchases of the This approval will be effective until the Company’s next
Company’s shares in accordance with the provisions Annual General Meeting in 2024. In order to utilise this
contained in the Companies Act 2006 and the Listing Rules shorter notice period, the Company is required to ensure
of the Financial Conduct Authority. The minimum price to that shareholders are able to vote electronically at the
be paid per Ordinary share by the Company will not be general meeting called on such short notice. The Directors
less than 5p per share (being the nominal value) and the confirm that, in the event that a general meeting is called,
maximum price should not be more than the higher of (i) they will give as much notice as practicable and will only
5% above the average of the middle market quotations utilise the authority granted by Resolution 13 in limited and
for the shares for the preceding five business days; and (ii) time sensitive circumstances.
the higher of the last independent trade and the current
highest independent bid on the trading venue where the
purchase is carried out.
abrdn Asia Focus plc 53
## Directors’ Report
### Continued
### Dividend Policy
As a result of the timing of the payment of the Company’s
quarterly dividends, the Company’s Shareholders are
unable to approve a final dividend each year. In line with
good corporate governance, the Board therefore
proposes to put the Company’s dividend policy to
Shareholders for approval at the Annual General Meeting
and on an annual basis thereafter.
The Company’s dividend policy shall be that dividends on
the Ordinary Shares are payable quarterly in relation to
periods ending October, January, April and July. It is
intended that the Company will pay quarterly dividends
consistent with the expected annual underlying portfolio
yield. The Company has the flexibility in accordance with
its Articles to make distributions from capital. Resolution 4,
an ordinary resolution, will seek shareholder approval for
the dividend policy.
### Recommendation
Your Board considers Resolutions 10 to 13 to be in the best
interests of the Company and its members as a whole and
most likely to promote the success of the Company for the
benefit of its members as a whole. Accordingly, your
Board unanimously recommends that shareholders
should vote in favour of Resolutions 10 to 13 to be
proposed at the AGM, as they intend to do in respect of
their own beneficial shareholdings amounting to 14,060
Ordinary shares.
By order of the Board
abrdn Holdings Limited -Secretaries
280 Bishopsgate
London EC2M 4AG
19 October 2023
54 abrdn Asia Focus plc
# Directors' Remuneration Report

The Board has prepared this report in accordance with the regulations governing the disclosure and approval of Directors' remuneration. This Directors' Remuneration Report comprises three parts:

1. Remuneration Policy which is subject to a binding shareholder vote every three years (or sooner if varied during this interval) - most recently voted on at the AGM on 1 December 2020;
2. Implementation Report which provides information on how the Remuneration Policy has been applied during the year and which is subject to an advisory vote on the level of remuneration paid during the year; and
3. Annual Statement.

The law requires the Company's auditors to audit certain of the disclosures provided. Where disclosures have been audited, they are indicated as such. The auditors' opinion is included in the report on page 64.

## Remuneration Policy

The Directors' Remuneration Policy takes into consideration the principles of UK Corporate Governance and there have been no changes to the policy during the period of this Report nor are there any proposals for the foreseeable future.

As the Company has no employees and the Board is comprised wholly of non-executive Directors and, given the size and nature of the Company, the Board has not established a separate Remuneration Committee. Directors' remuneration is determined by the Board as a whole.

The Directors are non-executive and the Company's Articles of Association limit the annual aggregate fees payable to the Board of Directors to £275,000 per annum. This cap may be increased by shareholder resolution from time to time and was last increased at the General Meeting held in January 2022.

|   | 31 July 2023 £ | 31 July 2022 £  |
| --- | --- | --- |
|  Chair | 37,500 | 35,500  |
|  Chairman of Audit Committee | 32,000 | 30,500  |
|  Director | 28,500 | 27,500  |

Subject to this overall limit, the Board's policy is that the remuneration of non-executive Directors should reflect the nature of their duties, responsibilities and the value of their time spent and be fair and comparable to that of other investment trusts that are similar in size, have a similar capital structure and have a similar investment objective.

## Appointment

- The Company only intends to appoint non-executive Directors.
- All the Directors are non-executive appointed under the terms of Letters of Appointment.
- Directors must retire and be subject to re-election at the first AGM after their appointment, and at least every three years thereafter.
- New appointments to the Board will be placed on the fee applicable to all Directors at the time of appointment (currently £28,500 per annum).
- No incentive or introductory fees will be paid to encourage a Directorship.
- The Directors are not eligible for bonuses, pension benefits, share options, long term incentive schemes or other benefits.
- Directors are entitled to re-imbursement of out-of-pocket expenses incurred in connection with the performance of their duties, including travel expenses.
- The Company indemnifies its Directors for all costs, charges, losses, expenses and liabilities which may be incurred in the discharge of duties, as a Director of the Company.

## Performance, Service Contracts, Compensation and Loss of Office

- The Directors' remuneration is not subject to any performance-related fee.
- No Director has a service contract.
- No Director has an interest in any contracts with the Company during the period or subsequently.
- The terms of appointment provide that a Director may be removed upon three months' notice.
- Compensation will not be due upon leaving office.
- No Director is entitled to any other monetary payment or to any assets of the Company.

abndn Asia Focus plc

55
## Directors’ Remuneration Report
### Continued
Directors’ and Officers’ liability insurance cover is
### Statement of Voting at General Meeting
maintained by the Company on behalf of the Directors.
Under the Articles, the Company indemnifies each of the At the Company’s last Annual General Meeting, held on 30
Directors out of the assets of the Company against any November 2022, shareholders approved the Directors’
liability incurred by them as a Director in defending Remuneration Report in respect of the year ended 31 July
proceedings or in connection with any application 2022 and the following proxy votes were received on the
resolutions:
to the Court in which relief is granted and separate deeds
A
of indemnity exist in this regard between the Company Resolution For Against Withheld
and each Director.
(2) Receive and Adopt Directors’ 88.0m 17,065 32,554
Remuneration Report (99.9%) (0.02%)
### Implementation Report
(3) To approve the Directors’ 17.4m 37,646 44,790
B
Remuneration Policy (99.8%) (0.2%)
Directors’ Fees
A Including discretionary votes
B Approved at the AGM held on 1 December 2020
During the year the Board carried out its annual review of
the level of fees payable to Directors including a review of
### comparable peer group directors’ fees. Following the Spend on Pay
review it was concluded that the fees should be increased
As the Company has no employees, the Directors do not
to £37,500 for the Chair, £32,000 for the Audit Committee
consider it appropriate to present a table comparing
Chairman and £28,500 for other Directors, with effect
remuneration paid to Directors with distributions to
from 1 February 2023. The Directors’ fees were last
shareholders. However, for ease of reference, the total
increased in January 2021. There are no further fees to
fees paid to Directors is shown in the table below, the
disclose as the Company has no employees, chief
dividends paid to shareholders are set out in note 8 and
executive or executive directors.
the shares bought back for treasury are disclosed in
note 14.
Company Performance
### Audited Information
The following chart illustrates the total shareholder return
(including reinvested dividends) for a holding in the
Company’s shares as compared to the MSCI AC Asia ex Fees Payable
Japan Small Cap Index (in Sterling terms) for the ten year The Directors who served in the year received the
period to 31 July 2023 (rebased to 100 at 31 July 2013). following fixed fees which exclude employers’ NI and any
Given the absence of any meaningful index with which to VAT payable:
compare performance, this index is deemed to be the
most appropriate one against which to measure the

|  | Director 2023 |  | 2022 |
| --- | --- | --- | --- |
| Company’s performance. |  | £ | £ |
|  | K Shanmuganathan (Chair and highest paid | 33,833 27,500 |  |

A

| 220 | Director) |
| --- | --- |
| 200 | The Earl of Antrim 28,000 27,500 |
| 180 | C Black 28,000 27,500 |

160
L Cooper 27,963 3,474
140
A Finn 31,250 1,558
120
B
D Guthrie - 21,435
100
C
N K Cayzer 11,833 35,500
80

| 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 |  | Total 160,879 144,467 |
| --- | --- | --- |
|  |  | A Mr Shanmuganathan was appointed Chair on 30 November 2022 |
|  | Share Price | B |

Ms Guthrie retired from the Board on 13 April 2022
MSCI AC Asia Pacific e x Japan Small Cap I ndex C
Mr Cayzer retired from the Board on 30 November 2022
56 abrdn Asia Focus plc

| No taxable benefits were paid to Directors during the year |  | A |
| --- | --- | --- |
|  | 31 July 2023 | 31 July 2022 |
| (2022: nil). | Ordinary shares Ordinary shares |  |

K Shanmuganathan 5,270 5,270
### Annual Percentage Change in
Earl of Antrim 4,000 4,000
### Directors’ Remuneration
C Black 4,790 4,790
The table below sets out the annual percentage change in
Directors’ fees for the past four years. L Cooper - -
A Finn - -

|  | 2023 | 2022 | 2021 | 2020 |  | B |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  | N K Cayzer | - - |
| Director | % | % | % | % |  |  |
|  |  |  |  |  | A or date of resignation, if earlier |  |
| K Shanmuganathan (Chair and | 23.0 0.8 84.1 n/a |  |  |  | B Mr Cayzer retired from the Board on 30 November 2022 |  |

A
highest paid Director)
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
The above interests are unchanged at 19 October 2023,
The Earl of Antrim 1.8 0.8 1.1 0
being the nearest practicable date prior to the signing of
B
C Black 1.8 0.8 1.1 45.7
this Report.
C
L. Cooper 799.5 n/a n/a n/a
### Annual Statement
D
A Finn 1694 n/a n/a n/a
On behalf of the Board and in accordance with Part 2 of
A Mr Shanmuganathan was appointed to the Board on 3 June 2020 and
Schedule 8 of the Large and Medium-sized Companies
became Chair on 30 November 2022
B Ms Black was appointed to the Board in January 2019 and Groups (Accounts and Reports) (Amendment)
C Mr Cooper was appointed to the Board on 15 June 2022
Regulations 2013, I confirm that the above Report on
D Mr Finn was appointed to the Board on 13 July 2022
Remuneration Policy and Remuneration Implementation
summarises, as applicable, for the year ended 31 July
### Sums Paid to Third Parties
2023:
None of the fees disclosed above were payable to third
 the major decisions on Directors’ remuneration;
parties in respect of making available the services of
Directors. The amounts paid by the Company to the  any substantial changes relating to Directors’
Directors were for services as non-executive Directors. remuneration made during the year; and
 the context in which the changes occurred and in which
### Sums Paid to Former Directors decisions have been taken.
In accordance with the disclosure requirements of
paragraph 15 of Schedule 8 to the Large and Medium- Krishna Shanmuganathan,
sized Companies and Groups (Accounts and Reports) Chair
Regulations 2008/410, a fee of £75,000 plus VAT has been 19 October 2023
paid to Mr Martin Gilbert, a former Director of the
Company who retired in November 2019, in respect of
independent consultancy services provided to the
Company in the three year period ending 31 July 2023.
### Directors’ Interests in the Company
The Directors are not required to have a shareholding in
the Company. The Directors’ interests in contractual
arrangements with the Company are as shown in note 18
to the financial statements. The Directors (including
connected persons) at 31 July 2023 and 31 July 2022, had
no interest in the share capital of the Company other than
those interests, all of which are beneficial interests, shown
in the following table.
abrdn Asia Focus plc 57
## Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Annual The Directors listed on pages 42 to 44, being the
Report and financial statements, in accordance with persons responsible, hereby confirm to the best of their
applicable law and regulations. knowledge that:
Company law requires the Directors to prepare financial  the financial statements, prepared in accordance with
statements for each financial year. Under that law the the applicable accounting standards, give a true and fair
Directors have elected to prepare the financial view of the assets, liabilities, financial position and profit
statements in accordance with United Kingdom Generally or loss of the Company;
Accepted Accounting Practice (United Kingdom
 that in the opinion of the Directors, the Annual Report
Accounting Standards and applicable law).
and financial statements taken as a whole, is fair,
balanced and understandable and it provides the
Under Company law the Directors must not approve the
information necessary to assess the Company’s
financial statements unless they are satisfied that they
performance, business model and strategy. In reaching
give a true and fair view of the state of affairs of the
this conclusion the Board has assumed that the reader
Company and of the profit or loss of the Company for
of the Annual Report and financial statements would
that period.
have a reasonable level of general investment
In preparing these financial statements, the Directors are
knowledge, and in particular, of investment trusts; and
required to:
 the Strategic Report and Directors’ Report include a fair
 select suitable accounting policies and then apply review of the development and performance of the
them consistently; business and the position of the Company, together with
a description of the principal risks and uncertainties that
 make judgments and estimates that are reasonable
the Company faces.
and prudent; and
 state whether applicable UK Accounting Standards
have been followed, subject to any material departures For abrdn Asia Focus plc
disclosed and explained in the financial statements. Krishna Shanmuganathan,
Chair
The Directors are responsible for keeping proper 19 October 2023
accounting records that are sufficient to show and explain
the Company’s transactions and which disclose with
reasonable accuracy at any time the financial position of
the Company and enable them to ensure that its financial
statements comply with the Companies Act 2006. They
are also responsible for taking such steps as are
reasonably open to them to safeguard the assets of
the Company and to prevent and detect fraud and
other irregularities.
Under applicable law and regulations, the Directors are
also responsible for preparing a Directors’ Report
including Strategic Report, Business Review, Directors’
Remuneration Report and Statement of Corporate
Governance that comply with that law and
those regulations.
The financial statements are published on asia-focus.co.uk
which is a website maintained by the Company’s
Manager. The Directors are responsible for the
maintenance and integrity of the corporate and financial
information included on the Company’s website.
Legislation in the UK governing the preparation and
dissemination of financial statements may differ from
legislation in other jurisdictions.
58 abrdn Asia Focus plc
## Report of the Audit Committee
I am pleased to present the report of the Audit Committee  to review the content of the Annual Report and Financial
for the year ended 31 July 2023 which has been prepared Statements and advise the Board on whether, taken as
in compliance with applicable legislation. a whole, it is fair, balanced and understandable and
provides the information necessary for shareholders to
### Committee Composition assess the Company’s performance, business model
The Audit Committee comprises four independent and strategy;
Directors at the year end; the Earl of Antrim, Charlotte  to meet with the auditors to review their proposed audit
Black, Lindsay Cooper and myself (Alex Finn), as programme of work and the findings of the auditors. The
Chairman. The Directors have satisfied themselves that at Committee shall also use this as an opportunity to
least one of the Committee’s members has recent and assess the effectiveness of the audit process;
relevant financial experience and I confirm that the Audit
 to review a statement from the Manager detailing the
Committee as a whole has competence relevant to the
arrangements in place within the Manager whereby the
investment trust sector. Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Manager’s staff may, in confidence, escalate concerns
The Audit Committee continues to believe that the about possible improprieties in matters of financial
Company does not require an internal audit function of its reporting or other matters (“whistleblowing”);
own as it delegates its day to day operations to third  to make recommendations in relation to the
parties from whom it receives internal controls reports. appointment of the auditors and to approve the
remuneration and terms of engagement of the auditors;
### Functions of the Committee
 to monitor and review annually the auditors’
The principal function of the Committee is to assist the independence, objectivity, effectiveness, resources and
Board in relation to the reporting of financial information, qualification; and
the review of financial controls and the management of
 to investigate, when an auditor resigns, the reasons
risk. The Committee has defined terms of reference
giving rise to such resignation and consider whether any
which are reviewed and re-assessed for their adequacy
action is required.
on an annual basis. Copies of the terms of reference are
published on the Company's website.
### Activities During the Year
The Committee’s main audit review functions are
The Audit Committee met twice during the year when it
listed below:
considered the Annual Report and the Half Yearly Report
in detail. Representatives of the abrdn internal audit, risk
 to review and monitor the internal control systems and
and compliance departments reported to the Committee
risk management systems (including those relating to
at these meetings on matters such as internal control
non-financial risks) on which the Company is reliant;
systems, risk and the conduct of the business in the
 to consider annually whether there is a need for the
context of its regulatory environment.
Company to have its own internal audit function;
The Committee also undertook a deep-dive review of the
 to monitor the integrity of the half-yearly and annual
Company’s Risk Register in order to ensure that it was
financial statements of the Company by reviewing, and
functional and fit for purpose.
challenging where necessary, the actions and
judgements of the Manager;
### Review of Internal Control Systems and Risk
 to review, and report to the Board on, the significant
The Committee considers the internal control systems
financial reporting issues and judgements made in
and a matrix of risks at each of its meetings. There is
connection with the preparation of the Company’s
more detail on the process of these reviews in the
financial statements, interim reports, announcements
Strategic Report.
and related formal statements;
abrdn Asia Focus plc 59
## Report of the Audit Committee
### Continued
### Financial Statements and Significant Issues Review of Financial Statements
During its review of the Company’s financial statements The Committee is responsible for the preparation of the
for the year ended 31 July 2023, the Audit Committee Company’s Annual Report. The process is extensive,
considered the following significant issues, including, in requiring input from a number of different third party
particular, those communicated by the auditors as key service providers. The Committee reports to the Board on
areas of audit emphasis during their planning and whether, taken as a whole, the Annual Report and
reporting of the year end audit. financial statements are fair, balanced and
understandable. In so doing, the Committee has
### Valuation and Existence of Investments considered the following matters:
How the issue was addressed - The valuation of
 the existence of a comprehensive control framework
investments is undertaken in accordance with the
surrounding the production of the Annual Report and
accounting policies, disclosed in note 2(b) to the financial
financial statements which includes a number of
statements on page 75. All investments are listed and
different checking processes;
97.6% of the portfolio is considered liquid and quoted in
 the existence of extensive levels of reviews as part of the
active markets and have been categorised as Level 1
production process involving the depositary, the
within the FRS 102 fair value hierarchy and can be verified
Manager, the Company Secretary and the auditors
against daily market prices. The portfolio holdings and
taken together as well as the Committee’s own
their pricing are reviewed and verified by the Manager on
expertise;
a regular basis and management accounts, including a full
portfolio listing, are prepared each month and circulated  the controls in place within the various third party
to the Board. The portfolio is also reviewed annually by the service providers to ensure the completeness and
auditors and all prices are checked to independent accuracy of the financial records and the security of the
sources by the auditors. The Company used the services Company’s assets; and
of an independent Depositary (BNP Paribas Trust  the externally audited internal control reports of the
Corporation UK Limited) during the year under review to Manager, Depositary and related service providers.
hold the assets of the Company. The investment portfolio
is reconciled regularly by the Manager to the The Committee has reviewed the Annual Report and the
depositary/custodian records and further corroboration is work undertaken by the third party service providers and
received from the audit which includes independent is satisfied that, taken as a whole, the Annual Report and
confirmation of the existence of all investments at the financial statements is fair balanced and understandable.
year end. In reaching this conclusion, the Committee has assumed
that the reader of the Annual Report would have a
### Recognition of Investment Income reasonable level of knowledge of the investment trust
How the issue was addressed – The recognition of industry in general and of investment trusts in particular.
investment income is undertaken in accordance with The Committee has reported its findings to the Board
accounting policy note 2(d) to the financial statements on which in turn has made its own statement in this regard in
page 76. Special dividends are allocated to the capital or the Directors’ Responsibility Statement on page 58.
revenue accounts according to the nature of the payment
### and the intention of the underlying company. The Provision of Non-Audit Services
Directors review monthly revenue forecasts and dividend The Committee has put in place a policy on the supply of
comparisons and the Manager provides monthly internal non-audit services provided by the auditor. Such services
control reports to the Board. are considered on a case-by-case basis and may only be
provided if the service is at a reasonable and competitive
### Correct Calculation of Management Fees cost and does not constitute a conflict of interest or
How the issue was addressed - The management fees potential conflict of interest or prevent the auditor from
are calculated by the Manager and reviewed periodically remaining objective and independent. All non-audit
by the Board. services require the pre-approval of the Committee. No
non-audit fees were paid to the auditor during the Year
(2022 - nil). The Committee confirms that it has complied
with Part 5.1 of the Competitions and Market Authority’s
Order 2014.
60 abrdn Asia Focus plc
### Review of Auditors
The Audit Committee has reviewed the effectiveness of
the auditors including:
 Independence: the auditors discuss with the Audit
Committee, at least annually, the steps taken to ensure
their independence and objectivity and make the
Committee aware of any potential issues, explaining all
relevant safeguards;
 Quality of audit work in terms of: (i) the ability to work in
a collegiate manner with the Board and Manager,
addressing queries and issues in a timely manner – 2023
represents the third year for PwC and the Audit
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Committee is confident that identified queries and
issues have been satisfactorily and promptly resolved;
(ii) its communications/ presentation of outputs – the
Audit Committee is satisfied that the explanation of the
audit plan, any deviations from it and the subsequent
audit findings are comprehensive and comprehensible;
and (iii) the working relationship with management - the
Audit Committee is satisfied that the auditors have
already developed a very constructive working
relationship with the Manager; and,
 Quality of people and service including continuity and
succession plans: the Audit Committee is satisfied that
the audit team is made up of sufficient, suitably
experienced staff with provision made for knowledge of
the investment trust sector and retention on rotation of
the partner.
In 2020 the Audit Committee undertook a tender for the
Company’s external audit services and
PricewaterhouseCoopers LLP (“PwC”) were chosen as the
Company’s independent auditors, with the appointment
having been approved by shareholders at the AGM held
on 1 December 2020.
In accordance with present professional guidelines the
Senior Statutory Auditor is rotated after no more than five
years and the year ended 31 July 2023 will be the third
year for which the present Senior Statutory Auditor, Ms
Gillian Alexander, has served. The Committee considers
PwC, the Company’s auditors, to be independent of the
Company.
Alex Finn
Audit Committee Chairman
19 October 2023
abrdn Asia Focus plc 61
## Financial
## Statements
62 abrdn Asia Focus plc
Three interim dividends of 1.6p and a fourth interim of 1.61p have been paid in March, June, September and December 2023, totalling 6.41p (2022 – Ordinary dividend 6.4p); together with a further special interim dividend in respect of the year ended 31 July 2023 of 2.25p per Ordinary share which will be paid on 20 December 2023. The special dividend will bring the total distribution for the year to 8.66p (2022 – 8.0p)

dorth Asia Focus plc

63
## Independent auditors’ report to the members of
## abrdn Asia Focus plc
### Report on the audit of the financial statements
### Opinion
In our opinion, abrdn Asia Focus plc’s financial statements:
 give a true and fair view of the state of the company’s affairs as at 31 July 2023 and of its net return and cash flows for
the year then ended;
 have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards, including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic
of Ireland”, and applicable law); and
 have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual Report, which comprise: the Statement of Financial
Position as at 31 July 2023; the Statement of Comprehensive Income, the Statement of Changes in Equity and the
Statement of Cash Flows for the year then ended; and the notes to the financial statements, which include a description
of the significant accounting policies.
Our opinion is consistent with our reporting to the Audit Committee.
### Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.
Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial
statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Independence
We remained independent of the company in accordance with the ethical requirements that are relevant to our audit of
the financial statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed public interest
entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard
were not provided.
We have provided no non-audit services to the company in the period under audit.
### Our audit approach
Context
The Company is a standalone Investment Trust Company and engages abrdn Fund Managers Limited (the “AIFM”) to
manage its assets.
Overview
Audit scope
 We conducted our audit of the financial statements using information from the AIFM to whom the Directors have
delegated the provision of all administrative functions.
 We tailored the scope of our audit taking into account the types of investments within the Company, the involvement
of the AIFM referred to above, the accounting processes and controls, and the industry in which the Company
operates.
 We obtained an understanding of the control environment in place at the AIFM and adopted a fully substantive testing
approach using reports obtained from the AIFM.
64 abrdn Asia Focus plc
Key audit matters
 Income from investments.
 Valuation and existence of listed investments.
Materiality
 Overall materiality: £4,857,000 (2022: £4,643,000) based on approximately 1% of Net Assets.
 Performance materiality: £3,642,000 (2022: £3,482,000).
### The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the
financial statements.
### Key audit matters
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit
of the financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) identified by the auditors, including those which had the greatest effect on: the overall
audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters,
and any comments we make on the results of our procedures thereon, were addressed in the context of our audit of
the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
This is not a complete list of all risks identified by our audit.
The key audit matters below are consistent with last year.
Key audit matter How our audit addressed the key audit matter
Income from investments We assessed the accounting policy for income recognition for
Refer to page 59 (Report of the Audit Committee), page 78 compliance with accounting standards and the AIC SORP and
(Accounting Policies) and page 75 (Notes to the performed testing to confirm that income had been accounted for
Financial Statements). in accordance with this stated accounting policy. We found that the
accounting policies implemented were in accordance with
accounting standards and the AIC SORP, and that income has been
accounted for in accordance with the stated accounting policy.
In addition, the Directors are required to exercise judgement in We understood and assessed the design and implementation of
determining whether income in the form of special dividends key controls surrounding income recognition.
should be classified as ‘revenue’ or ‘capital’ in the Statement of
Comprehensive Income.
As such, we focused on the accuracy, completeness and We tested the accuracy of all dividend receipts by agreeing the
occurrence of income from investments recognition and its dividend rates for investments to independent market data.
presentation in the Statement of Comprehensive Income as set
out in the requirements of The Association of Investment We tested occurrence by testing that all dividends recorded in the
Companies’ Statement of Recommended Practice year had been declared in the market by investment holdings, and
(the “AIC SORP”). we traced a sample of dividends received to bank statements.
We tested the allocation and presentation of dividend income
between the revenue and capital return columns of the
Statement of Comprehensive Income in line with the
requirements set out in the AIC SORP by determining the reasons
behind dividend distributions.
abrdn Asia Focus plc 65
## Independent auditors’ report to the members of
## abrdn Asia Focus plc
### Continued
Key audit matter How our audit addressed the key audit matter
Based on the audit procedures performed and evidence
obtained, we concluded that income from investments was not
materially misstated.
Valuation and existence of listed investments
Refer to page 59 (Report of the Audit Committee), page 75 We tested the valuation of all the listed investments by agreeing
(Accounting Policies) and page 84 (Notes to the Financial the prices used in the valuation to independent third party
Statements). sources.
The investment portfolio at 31 July 2023 comprised listed equity We tested the existence of listed investments by agreeing the
investments of £550 million. We focused on the valuation and holdings to an independent confirmation from the Depositary,
existence of investments because investments represent the BNP Paribas Trust Corporation UK Limited as at 31 July 2023.
principal element of the net asset value as disclosed in the
No material misstatements were identified from this testing.
Statement of Financial Position in the financial statements.
### How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the
financial statements as a whole, taking into account the structure of the company, the accounting processes and
controls, and the industry in which it operates.
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial
statements. In particular, we looked at where subjective judgements are made, for example in respect of classification of
special dividends as revenue or capital.
### The impact of climate risk on our audit
In planning our audit, we made enquiries of the Directors to understand the extent of the potential impact of climate
change risk on the company’s financial statements. The Directors concluded that the impact on the measurement and
disclosures within the financial statements is not material because majority of company’s investment portfolio is made
up of level 1 quoted securities which are valued at fair value based on market prices. We found this to be consistent with
our understanding of the company’s investment activities. We also considered the consistency of the climate change
disclosures included in the Strategic Report with the financial statements and our knowledge from our audit.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the
nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and in
evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall Company materiality £4,857,000 (2022: £4,643,000).
How we determined it Approximately 1% of Net Assets.
Rationale for benchmark applied We believe that net assets is the primary measure used by the shareholders in assessing the
performance of the entity, and is a generally accepted auditing benchmark. This benchmark
provides an appropriate and consistent year on year basis.
66 abrdn Asia Focus plc
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of
uncorrected and undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in
determining the scope of our audit and the nature and extent of our testing of account balances, classes of transactions
and disclosures, for example in determining sample sizes. Our performance materiality was 75% (2022: 75%) of overall
materiality, amounting to £3,642,000 (2022: £3,482,000) for the company financial statements.
In determining the performance materiality, we considered a number of factors - the history of misstatements, risk
assessment and aggregation risk and the effectiveness of controls - and concluded that an amount at the upper end of
our normal range was appropriate.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above
£242,000 (2022: £232,000) as well as misstatements below that amount that, in our view, warranted reporting for
qualitative reasons
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
### Conclusions relating to going concern
Our evaluation of the Directors’ assessment of the company’s ability to continue to adopt the going concern basis of
accounting included:
 evaluating the Directors’ updated risk assessment and considering whether it addressed relevant threats;
 evaluating the Directors' assessment of potential operational impacts, considering their consistency with other
available information and our understanding of the business and assessed the potential impact on the financial
statements;
 reviewing the Directors' assessment of the Company's financial position in the context of its ability to meet future
expected operating expenses and debt repayments, their assessment of liquidity as well as their review of the
operational resilience of the Company and oversight of key third-party service providers; and
 assessing the implication of significant reductions in Net Asset Value (NAV) as a result of market performance on the
ongoing ability of the Company to operate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on the company’s ability to continue as a going concern for a
period of at least twelve months from when the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the
company's ability to continue as a going concern.
In relation to the Directors’ reporting on how they have applied the UK Corporate Governance Code, we have nothing
material to add or draw attention to in relation to the Directors’ statement in the financial statements about whether the
Directors considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant
sections of this report.
### Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our
auditors’ report thereon. The Directors are responsible for the other information. Our opinion on the financial statements
does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent
otherwise explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial statements or our knowledge
obtained in the audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency
or material misstatement, we are required to perform procedures to conclude whether there is a material misstatement
of the financial statements or a material misstatement of the other information. If, based on the work we have
abrdn Asia Focus plc 67
## Independent auditors’ report to the members of
## abrdn Asia Focus plc
### Continued
performed, we conclude that there is a material misstatement of this other information, we are required to report that
fact. We have nothing to report based on these responsibilities.
With respect to the Strategic report and Directors' Report, we also considered whether the disclosures required by the
UK Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain
opinions and matters as described below.
Strategic report and Directors' Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and
Directors' Report for the year ended 31 July 2023 is consistent with the financial statements and has been prepared in
accordance with applicable legal requirements.
In light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we
did not identify any material misstatements in the Strategic report and Directors' Report.
Directors’ Remuneration
In our opinion, the part of the Directors' Remuneration Report to be audited has been properly prepared in accordance
with the Companies Act 2006.
### Corporate governance statement
The Listing Rules require us to review the Directors’ statements in relation to going concern, longer-term viability and that
part of the corporate governance statement relating to the company’s compliance with the provisions of the UK
Corporate Governance Code specified for our review. Our additional responsibilities with respect to the corporate
governance statement as other information are described in the Reporting on other information section of this report.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the
corporate governance statement, included within the Governance section is materially consistent with the financial
statements and our knowledge obtained during the audit, and we have nothing material to add or draw attention to in
relation to:
 The Directors’ confirmation that they have carried out a robust assessment of the emerging and principal risks;
 The disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify
emerging risks and an explanation of how these are being managed or mitigated;
 The Directors’ statement in the financial statements about whether they considered it appropriate to adopt the going
concern basis of accounting in preparing them, and their identification of any material uncertainties to the company’s
ability to continue to do so over a period of at least twelve months from the date of approval of the financial
statements;
 The Directors’ explanation as to their assessment of the company’s prospects, the period this assessment covers and
why the period is appropriate; and
 The Directors’ statement as to whether they have a reasonable expectation that the company will be able to continue
in operation and meet its liabilities as they fall due over the period of its assessment, including any related disclosures
drawing attention to any necessary qualifications or assumptions.
Our review of the Directors’ statement regarding the longer-term viability of the company was substantially less in scope
than an audit and only consisted of making inquiries and considering the Directors’ process supporting their statement;
checking that the statement is in alignment with the relevant provisions of the UK Corporate Governance Code; and
considering whether the statement is consistent with the financial statements and our knowledge and understanding of
the company and its environment obtained in the course of the audit.
In addition, based on the work undertaken as part of our audit, we have concluded that each of the following elements of
the corporate governance statement is materially consistent with the financial statements and our knowledge obtained
during the audit:
68 abrdn Asia Focus plc
 The Directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and understandable,
and provides the information necessary for the members to assess the company's position, performance, business
model and strategy;
 The section of the Annual Report that describes the review of effectiveness of risk management and internal control
systems; and
 The section of the Annual Report describing the work of the Audit Committee.
We have nothing to report in respect of our responsibility to report when the Directors’ statement relating to the
Company’s compliance with the Code does not properly disclose a departure from a relevant provision of the Code
specified under the Listing Rules for review by the auditors.
### Responsibilities for the financial statements and the audit
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Responsibilities of the Directors for the financial statements
As explained more fully in the Statement of Directors' Responsibilities, the Directors are responsible for the preparation of
the financial statements in accordance with the applicable framework and for being satisfied that they give a true and
fair view. The Directors are also responsible for such internal control as they determine is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the company’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the company or to cease operations, or have no realistic
alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line
with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The
extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with
laws and regulations related to breaches of section 1158 of the Corporation Tax Act 2010, and we considered the extent
to which non-compliance might have a material effect on the financial statements. We also considered those laws and
regulations that have a direct impact on the financial statements such as the Companies Act 2006. We evaluated
management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of
override of controls), and determined that the principal risks were related to posting inappropriate journal entries to
increase revenue (investment income and capital gains) or to increase net asset value. Audit procedures performed by
the engagement team included:
 discussions with the AIFM and the Audit Committee, including specific enquiry of known or suspected instances of non-
compliance with laws and regulation and fraud where applicable;
 reviewing relevant meeting minutes, including those of the Audit Committee;
 assessment of the Company’s compliance with the requirements of section 1158 of the Corporation Tax Act 2010;
 identifying and testing year-end journal entries, in particular any material or revenue-impacting manual journal entries
posted as part of the Annual Report preparation process; and
 designed audit procedures to incorporate unpredictability around the nature, timing or extent of our testing.
abrdn Asia Focus plc 69
## Independent auditors’ report to the members of
## abrdn Asia Focus plc
### Continued
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances
of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the
financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not
detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data
auditing techniques. However, it typically involves selecting a limited number of items for testing, rather than testing
complete populations. We will often seek to target particular items for testing based on their size or risk characteristics. In
other cases, we will use audit sampling to enable us to draw a conclusion about the population from which the sample is
selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance
with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions,
accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose
hands it may come save where expressly agreed by our prior consent in writing.
### Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
 we have not obtained all the information and explanations we require for our audit; or
 adequate accounting records have not been kept by the company, or returns adequate for our audit have not been
received from branches not visited by us; or
 certain disclosures of Directors’ remuneration specified by law are not made; or
 the financial statements and the part of the Directors' Remuneration Report to be audited are not in agreement with
the accounting records and returns.
We have no exceptions to report arising from this responsibility.
### Appointment
Following the recommendation of the Audit Committee, we were appointed by the members on 1 December 2020 to
audit the financial statements for the year ended 31 July 2021 and subsequent financial periods. The period of total
uninterrupted engagement is three years, covering the years ended 31 July 2021 to 31 July 2023.
Gillian Alexander (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Edinburgh
19 October 2023
70 abrdn Asia Focus plc
# Statement of Comprehensive Income

|   | Notes | Year ended 31 July 2023 |   |   | Year ended 31 July 2022  |   |   |
| --- | --- | --- | --- | --- | --- | --- | --- |
|   |   |  Revenue £'000 | Capital £'000 | Total £'000 | Revenue £'000 | Capital £'000 | Total £'000  |
|  Gains/(losses) on investments | 10 | - | 25,318 | 25,318 | - | (22,324) | (22,324)  |
|  Income | 3 | 19,984 | - | 19,984 | 18,071 | - | 18,071  |
|  Exchange (losses)/gains |  | - | (384) | (384) | - | 72 | 72  |
|  Investment management fees | 4 | (753) | (2,259) | (3,012) | (801) | (2,403) | (3,204)  |
|  Administrative expenses | 5 | (1,312) | (16) | (1,328) | (1,163) | (398) | (1,561)  |
|  **Net return/(loss) before finance costs and taxation** |  | **17,919** | **22,659** | **40,578** | **16,107** | **(25,053)** | **(8,946)**  |
|  Finance costs | 6 | (501) | (1,502) | (2,003) | (499) | (1,497) | (1,996)  |
|  **Net return/(loss) before taxation** |  | **17,418** | **21,157** | **38,575** | **15,608** | **(26,550)** | **(10,942)**  |
|  Taxation | 7 | (1,279) | (2,107) | (3,386) | (956) | 876 | (80)  |
|  **Net return/(loss) after taxation** |  | **16,139** | **19,050** | **35,189** | **14,652** | **(25,674)** | **(11,022)**  |
|  **Return/(loss) per share (pence):** | 9 |  |  |  |  |  |   |
|  **Basic** |  | **10.29** | **12.14** | **22.43** | **9.34** | **(16.36)** | **(7.02)**  |
|  **Diluted** |  | **9.66** | **11.65** | **21.31** | **8.75** | **n/a** | **n/a**  |

For the year ended 31 July 2023 the conversion option for potential Ordinary shares within the Convertible Unsecured Loan Stock was dilutive to the revenue and capital return per Ordinary share (2022 - dilutive to revenue but non-dilutive to capital).

The total column of this statement represents the profit and loss account of the Company. There is no other comprehensive income and therefore the net return after taxation is also the total comprehensive income for the year.

All revenue and capital items in the above statement derive from continuing operations.

The accompanying notes are an integral part of the financial statements.

abrdn Asia Focus plc

71
# Statement of Financial Position

|   | Notes | As at 31 July 2023 £'000 | As at 31 July 2022 £'000  |
| --- | --- | --- | --- |
|  **Fixed assets**  |   |   |   |
|  Investments at fair value through profit or loss | 10 | 549,672 | 524,841  |
|  **Current assets**  |   |   |   |
|  Debtors and prepayments | 11 | 2,237 | 1,464  |
|  Cash and short term deposits |  | 5,807 | 9,471  |
|   |  | 8,044 | 10,935  |
|  **Creditors: amounts falling due within one year**  |   |   |   |
|  Other creditors | 12 | (1,250) | (2,864)  |
|  **Net current assets** |  | **6,794** | **8,071**  |
|  **Total assets less current liabilities** |  | **556,466** | **532,912**  |
|  **Non-current liabilities**  |   |   |   |
|  2.25% Convertible Unsecured Loan Stock 2025 | 13 | (36,175) | (35,940)  |
|  3.05% Senior Unsecured Loan Note 2035 | 13 | (29,898) | (29,892)  |
|  Deferred tax liability on Indian capital gains | 13 | (4,609) | (2,684)  |
|   |  | (70,682) | (68,516)  |
|  **Net assets** |  | **485,784** | **464,396**  |
|  **Capital and reserves**  |   |   |   |
|  Called up share capital | 14 | 10,435 | 10,435  |
|  Capital redemption reserve |  | 2,062 | 2,062  |
|  Share premium account |  | 60,441 | 60,428  |
|  Equity component of 2.25% Convertible Unsecured Loan Stock 2025 | 13 | 1,057 | 1,057  |
|  Capital reserve | 15 | 393,238 | 375,450  |
|  Revenue reserve |  | 18,551 | 14,964  |
|  **Total shareholders' funds** |  | **485,784** | **464,396**  |
|  **Net asset value per share (pence):**  |   |   |   |
|  Basic | 16 | 310.49 | 295.88  |
|  Diluted | 16 | 308.93 | 295.25  |

The financial statements were approved by the Board of Directors and authorised for issue on 19 October 2023 and were signed on behalf of the Board by:

Krishna Shanmuganathan
Chair

The accompanying notes are an integral part of the financial statements.

72

abrdn AsioFocus plc
# Statement of Changes in Equity

## For the year ended 31 July 2023

|   | Note | Share capital £'000 | Capital redemption reserve £'000 | Share premium account £'000 | Equity Component CULS 2025 £'000 | Capital reserve £'000 | Revenue reserve £'000 | Total £'000  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  Balance at 1 August 2022 |  | 10,435 | 2,062 | 60,428 | 1,057 | 375,450 | 14,964 | 464,396  |
|  Conversion of 2.25% CULS 2025 | 13 | - | - | 13 | - | - | - | 13  |
|  Purchase of own shares to treasury | 14 | - | - | - | - | (1,262) | - | (1,262)  |
|  Net return after taxation |  | - | - | - | - | 19,050 | 16,139 | 35,189  |
|  Dividends paid | 8 | - | - | - | - | - | (12,552) | (12,552)  |
|  **Balance at 31 July 2023** |  | **10,435** | **2,062** | **60,441** | **1,057** | **393,238** | **18,551** | **485,784**  |

## For the year ended 31 July 2022

|   | Note | Share capital £'000 | Capital redemption reserve £'000 | Share premium account £'000 | Equity Component CULS 2025 £'000 | Capital reserve £'000 | Revenue reserve £'000 | Total £'000  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  Balance at 1 August 2021 |  | 10,435 | 2,062 | 60,412 | 1,057 | 401,124 | 12,868 | 487,958  |
|  Conversion of 2.25% CULS 2025 | 13 | - | - | 16 | - | - | - | 16  |
|  Net return/(loss) after taxation |  | - | - | - | - | (25,674) | 14,652 | (11,022)  |
|  Dividends paid | 8 | - | - | - | - | - | (12,556) | (12,556)  |
|  **Balance at 31 July 2022** |  | **10,435** | **2,062** | **60,428** | **1,057** | **375,450** | **14,964** | **464,396**  |

The accompanying notes are an integral part of the financial statements.

abrdn Asia Focus plc

73
# Statement of Cash Flows

|   | Notes | Year ended 31 July 2023 £'000 | Year ended 31 July 2022 £'000  |
| --- | --- | --- | --- |
|  **Cash flows from operating activities**  |   |   |   |
|  Net return/(loss) before finance costs and tax |  | 40,578 | (8,946)  |
|  Adjustments for: |  |  |   |
|  Dividend income | 3 | (19,798) | (18,057)  |
|  Interest income | 3 | (186) | (14)  |
|  Dividends received |  | 20,094 | 18,307  |
|  Interest received |  | 169 | 10  |
|  Interest paid |  | (1,743) | (1,742)  |
|  (Gains)/losses on investments | 10 | (25,318) | 22,324  |
|  Foreign exchange movements |  | 384 | (72)  |
|  (Increase)/decrease in prepayments |  | (5) | 18  |
|  (Increase)/decrease in other debtors |  | (15) | 11  |
|  (Decrease)/increase in other creditors |  | (1,621) | 1,439  |
|  Stock dividends included in investment income |  | (25) | (174)  |
|  Overseas withholding tax suffered | 7 | (1,432) | (1,439)  |
|  **Net cash inflow from operating activities** |  | **11,082** | **11,665**  |
|  **Cash flows from investing activities**  |   |   |   |
|  Purchase of investments |  | (76,870) | (81,319)  |
|  Sales of investments |  | 76,321 | 77,032  |
|  **Net cash outflow from investing activities** |  | **(549)** | **(4,287)**  |
|  **Cash flows from financing activities**  |   |   |   |
|  Purchase of own shares for treasury |  | (1,261) | -  |
|  Equity dividends paid | 8 | (12,552) | (12,556)  |
|  **Net cash outflow from financing activities** |  | **(13,813)** | **(12,556)**  |
|  **Decrease in cash and cash equivalents** |  | **(3,280)** | **(5,178)**  |
|  **Analysis of changes in cash and short term deposits**  |   |   |   |
|  Opening balance |  | 9,471 | 14,577  |
|  Decrease in cash and short term deposits |  | (3,280) | (5,178)  |
|  Foreign exchange movements |  | (384) | 72  |
|  **Closing balance** |  | **5,807** | **9,471**  |

The accompanying notes are an integral part of the financial statements.

74

abrdh Asia Focus plc
## Notes to the Financial Statements
### For the year ended 31 July 2023
### 1. Principal activity
The Company is a closed-end investment company, registered in England & Wales No 03106339, with its Ordinary shares
being listed on the London Stock Exchange.
### 2. Accounting policies
(a) Basis of preparation. The financial statements have been prepared in accordance with Financial Reporting Standard 102,
the Companies Act 2006 and the AIC’s Statement of Recommended Practice ‘Financial Statements of Investment Trust
Companies and Venture Capital Trusts’ issued in July 2022. The financial statements are prepared in Sterling which is the
functional currency of the Company and rounded to the nearest £’000. They have also been prepared on a going
concern basis and on the assumption that approval as an investment trust will continue to be granted by HMRC.
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Going concern. In accordance with the Financial Reporting Council’s guidance the Directors have undertaken a rigorous
review of the Company’s ability to continue as a going concern. The Company’s assets consist of equity shares in
companies listed on recognised stock exchanges and are considered by the Board to be realisable within a relatively
short timescale under normal market conditions. The Board has set overall limits for borrowing and reviews regularly the
Company’s level of gearing, cash flow projections and compliance with banking covenants. The Board has also reviewed
stress testing and liquidity analysis covering the impact of significant historical market events such as the 2008 Global
Financial Crisis, Covid-19 and the Chinese Devaluation on the liquidity of the portfolio to ensure that even in significant
negative markets the Company would still be able to raise sufficient capital to repay its liabilities.
The Directors are mindful of the Principal Risks and Uncertainties disclosed in the Strategic Report on pages 20 and 21 and
they believe that the Company has adequate financial resources to continue its operational existence for a period of 12
months from the date of approval of this Annual Report. They have arrived at this conclusion having confirmed that the
Company’s diversified portfolio of realisable securities is sufficiently liquid and could be used to meet short-term funding
requirements were they to arise, including in potentially less favourable market conditions. The Directors have also
reviewed the revenue and ongoing expenses forecasts for the coming year. Accordingly, the Directors believe that it is
appropriate to continue to adopt the going concern basis in preparing the financial statements.
Significant accounting judgements, estimates and assumptions. The preparation of financial statements requires the use of
certain significant accounting judgements, estimates and assumptions which requires management to exercise its
judgement in the process of applying the accounting policies and are continually evaluated. Special dividends are
assessed and credited to capital or revenue according to their circumstances and are considered to require significant
judgement. The Directors do not consider there to be any significant estimates within the financial statements.
(b) Valuation of investments. The Company has chosen to apply the recognition and measurement provisions of IAS 39
Financial Instruments: Recognition and Measurement and investments have been designated upon initial recognition at
fair value through profit or loss. Investments are recognised and de–recognised at trade date where a purchase or sale is
under a contract whose terms require delivery within the time frame established by the market concerned, and are
initially measured at fair value. Subsequent to initial recognition, investments are measured at fair value. For listed
investments, this is deemed to be bid market prices. Gains and losses arising from changes in fair value and disposals are
included as a capital item in the Statement of Comprehensive Income and are ultimately recognised in the capital
reserve.
(c) Borrowings. Bank loans are initially recognised at cost, being the fair value of the consideration received, net of any issue
expenses. Subsequently, they are measured at amortised cost using the effective interest method. Finance charges are
accounted for on an accruals basis using the effective interest rate method. The Company charges 25% of finance
charges to revenue and 75% to capital (previously 100% to revenue).
abrdn Asia Focus plc 75
## Notes to the Financial Statements
### Continued
(d) Income. Dividends, including taxes deducted at source, are included in revenue by reference to the date on which the
investment is quoted ex-dividend. Special dividends are reviewed on a case-by-case basis and may be credited to
capital, if circumstances dictate. 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. Fixed returns on non-equity shares are
recognised on a time apportioned basis so as to reflect the effective yield on shares. Other returns on non-equity shares
are recognised when the right to return is established. Where the Company has elected to receive its dividends in the form
of additional shares rather than cash, the amount of the cash dividend is recognised as income. Any excess in the value of
the shares received over the amount of the cash dividend is recognised in capital reserves. Interest receivable on bank
balances is dealt with on an accruals basis.
(e) Expenses. Expenses are accounted for on an accruals basis. Expenses are charged through the revenue column of the
Statement of Comprehensive Income except as follows:
– expenses directly relating to the acquisition or disposal of an investment, which are charged to the capital column of the
Statement of Comprehensive Income and are separately identified and disclosed in note 10; and
– with effect from 1 August 2021, the Company charges 25% of investment management fees and finance costs to the
revenue column and 75% to the capital column of the Statement of Comprehensive Income, in accordance with the
Board’s expected long term return in the form of revenue and capital gains respectively from the investment portfolio of
the Company. Previously the allocation was 100% to revenue.
(f) Taxation. The tax expense represents the sum of tax currently payable and deferred tax. Any tax payable is based on the
taxable profit for the year. Taxable profit differs from net profit as reported in the Statement of Comprehensive Income
because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items
that are never taxable or deductible. The Company’s liability for current tax is calculated using tax rates that were
applicable at the Statement of Financial Position date.
Deferred taxation is recognised in respect of all timing differences that have originated but not reversed at the Statement
of Financial Position date, where transactions or events that result in an obligation to pay more tax in the future or right to
pay less tax in the future have occurred at the Statement of Financial Position date. This is subject to deferred tax assets
only being recognised if it is considered more likely than not that there will be suitable profits from which the future reversal
of the underlying timing differences can be deducted. Timing differences are differences arising between the Company’s
taxable profits and its results as stated in the financial statements which are capable of reversal in one or more
subsequent periods. Deferred tax is measured on a non-discounted basis at the tax rates that are expected to apply in the
periods in which timing differences are expected to reverse, based on tax rates and laws enacted or substantively
enacted at the Statement of Financial Position date.
The tax effect of different items of income/gain and expenditure/loss is allocated between capital and revenue within the
Statement of Comprehensive Income on the same basis as the particular item to which it relates using the Company’s
effective rate of tax for the year, based on the marginal basis.
(g) Foreign currency. Assets and liabilities in foreign currencies are translated at the rates of exchange ruling on the Statement
of Financial Position date. Transactions involving foreign currencies are converted at the rate ruling on the date of the
transaction. Gains and losses on dividends receivable are recognised in the Statement of Comprehensive Income and are
reflected in the revenue reserve. Gains and losses on the realisation of investments in foreign currencies and unrealised
gains and losses on investments in foreign currencies are recognised in the Statement of Comprehensive Income and are
then transferred to the capital reserve.
76 abrdn Asia Focus plc
(h) Convertible Unsecured Loan Stock. Convertible Unsecured Loan Stock (“CULS”) issued by the Company is regarded as a
compound instrument, comprising of a liability component and an equity component. At the date of issue, the fair value of
the liability component of the 2.25% CULS 2025 was estimated by assuming that an equivalent non-convertible obligation
of the Company would have an effective interest rate of 3.063%. The fair value of the equity component, representing the
option to convert liability into equity, is derived from the difference between the issue proceeds of the CULS and the fair
value assigned to the liability. The liability component is subsequently measured at amortised cost using the effective
interest rate and the equity component remains unchanged.
Direct expenses associated with the CULS issue are allocated to the liability and equity components in proportion to the
split of the proceeds of the issue. Expenses allocated to the liability component are amortised over the life of the
instrument using the effective interest rate.
(i) Cash and cash equivalents. Cash comprises cash in hand and short term deposits. Cash equivalents includes bank Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
overdrafts repayable on demand and short term, highly liquid investments, that are readily convertible to known amounts
of cash and that are subject to an insignificant risk of change in value.
(j) Nature and purpose of reserves
Capital redemption reserve. The capital redemption reserve arose when Ordinary shares were redeemed and cancelled,
at which point an amount equal to the par value of the Ordinary share capital was transferred from the share capital
account to the capital redemption reserve. This is not a distributable reserve.
Share premium account. The balance classified as share premium includes the premium above nominal value from the
proceeds on issue of any equity share capital comprising Ordinary shares of 5p (2022 – 5p). This is not a distributable
reserve.
Capital reserve. This reserve reflects any gains or losses on investments realised in the period along with any movement in
the fair value of investments held that have been recognised in the Statement of Comprehensive Income. These include
gains and losses from foreign currency exchange differences arising on monetary assets and liabilities except for dividend
income receivable. Share buybacks to be held in treasury, which is considered to be a distribution to shareholders, is also
deducted from this reserve. The realised gains part of this reserve is also distributable for the purpose of funding dividends.
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 is distributable by way of dividend. The amount of the revenue reserve as
at 31 July 2023 may not be available at the time of any future distribution due to movements between 31 July 2023 and
the date of distribution.
(k) Treasury shares. When the Company purchases the Company’s equity share capital as treasury shares, the amount of
the consideration paid, which includes directly attributable costs is recognised as a deduction from equity. When these
shares are sold or reissued subsequently, the amount received is recognised as an increase in equity, and the resulting
surplus or deficit on the transaction is transferred to or from the capital reserve.
(l) Dividends payable. Final dividends are recognised in the financial statements in the period in which Shareholders
approve them.
(m) Segmental reporting. The Directors are of the opinion that the Company is engaged in a single segment of business
activity, being investment business. Consequently, no business segmental analysis is provided however an analysis of the
geographic exposure of the Company’s investments is provided on page 35.
abrdn Asia Focus plc 77
# Notes to the Financial Statements

Continued

## 3. Income

|   | 2023 £'000 | 2022 £'000  |
| --- | --- | --- |
|  **Income from investments**  |   |   |
|  Overseas dividends | 19,055 | 17,292  |
|  UK dividend income | 718 | 591  |
|  Stock dividends | 25 | 174  |
|   | **19,798** | **18,057**  |
|  **Other income**  |   |   |
|  Deposit interest | 186 | 14  |
|  **Total income** | **19,984** | **18,071**  |

## 4. Investment management fees

|   | 2023 |   |   | 2022  |   |   |
| --- | --- | --- | --- | --- | --- | --- |
|   |  Revenue £'000 | Capital £'000 | Total £'000 | Revenue £'000 | Capital £'000 | Total £'000  |
|  Investment management fees | 753 | 2,259 | 3,012 | 801 | 2,403 | 3,204  |

The Company has an agreement with abrdn Fund Managers Limited ("aFML") for the provision of management services, under which investment management services have been delegated to abrdn Asia Limited ("abrdn Asia").

The management fee is payable monthly in arrears, on a tiered basis, exclusive of VAT where applicable, based on market capitalisation at an annual rate of 0.85% for the first £250 million, 0.6% for the next £500 million and 0.5% thereafter. Market capitalisation is defined as the Company's closing Ordinary share price quoted on the London Stock Exchange multiplied by the number of Ordinary shares in issue (excluding those held in Treasury), as determined on the last business day of the calendar month to which the remuneration relates. The balance due to the Manager at the year end was £506,000 (2022 - £2,138,000) which represents two months' fees (2022 - nine months).

The management agreement may be terminated by either the Company or the Manager on the expiry of three months' written notice. On termination, the Manager would be entitled to receive fees which would otherwise have been due to that date.

78

abrdn Asia Focus plc
## 5. Administrative expenses

|   | 2023 £'000 | 2022 £'000  |
| --- | --- | --- |
|  Administration fees^{4} | 112 | 103  |
|  Directors' fees^{5} | 161 | 144  |
|  Promotional activities^{6} | 219 | 219  |
|  Auditors' remuneration^{7} |  |   |
|  - fees payable to the auditors for the audit of the annual financial statements | 48 | 42  |
|  Custodian charges | 278 | 293  |
|  Depository fees | 46 | 49  |
|  Registrar fees | 55 | 51  |
|  Legal and professional fees | 93 | 87  |
|  Other expenses | 300 | 175  |
|   | **1,312** | **1,163**  |

$^{4}$ The Company has an agreement with a PPL for the provision of administration services. The administration fee is payable quarterly in advance and is adjusted annually to reflect the movement in the Retail Prices Index. The balance due to a PPL at the year end was £86,000 (2022 - £52,000). The agreement is terminable on six months' notice.

$^{5}$ No pension contributions were made in respect of any of the Directors.

$^{6}$ Under the management agreement, the Company has also appointed a PPL to provide promotional activities to the Company by way of its participation in the admin investment Trust Share Plan and ISA. A PPL has delegated this role to distribute. The total fee paid and payable under the agreement in relation to promotional activities was £221,000 (2022 - £219,000). There was a £73,000 (2022 - £73,000) balance due to distribute at the year end.

$^{7}$ There are no non-audit fees charged.

## 6. Finance costs

|   | 2023 |   |   | 2022  |   |   |
| --- | --- | --- | --- | --- | --- | --- |
|   |  Revenue £'000 | Capital £'000 | Total £'000 | Revenue £'000 | Capital £'000 | Total £'000  |
|  Bank interest paid | 1 | 2 | 3 | - | - | -  |
|  Interest on 3.05% Senior Unsecured Loan Note 2035 | 230 | 691 | 921 | 230 | 691 | 921  |
|  Interest on 2.25% CULS 2025 | 208 | 623 | 831 | 207 | 620 | 827  |
|  Notional interest on 2.25% CULS 2025 | 39 | 115 | 154 | 39 | 115 | 154  |
|  Amortisation of 2.25% CULS 2025 issue expenses | 23 | 71 | 94 | 23 | 71 | 94  |
|   | **501** | **1,502** | **2,003** | **499** | **1,497** | **1,996**  |

Finance costs have been charged 25% to revenue and 75% to capital.

abdn Asia Focus plc

79
# Notes to the Financial Statements

Continued

## 7. Taxation

|   | 2023 |   |   | 2022  |   |   |
| --- | --- | --- | --- | --- | --- | --- |
|   | Revenue £'000 | Capital £'000 | Total £'000 | Revenue £'000 | Capital £'000 | Total £'000  |
|  **(a) Analysis of charge for the year**  |   |   |   |   |   |   |
|  Overseas taxation | 1,279 | 182 | 1,461 | 956 | 71 | 1,027  |
|  **Total current tax charge for the year** | **1,279** | **182** | **1,461** | **956** | **71** | **1,027**  |
|  Deferred tax charge on Indian capital gains | - | 1,925 | 1,925 | - | (947) | (947)  |
|  **Total tax charge for the year** | **1,279** | **2,107** | **3,386** | **956** | **(876)** | **80**  |

The Company has recognised a deferred tax liability of £4,609,000 (2022 - £2,684,000) on capital gains which may arise if Indian investments are sold.

At 31 July 2023 the Company had surplus management expenses and loan relationship deficits of £76,652,000 (2022 - £70,420,000) in respect of which a deferred tax asset has not been recognised. This is due to the Company having sufficient excess management expenses available to cover the potential liability and the Company is not expected to generate taxable income in the future in excess of deductible expenses. The Finance Act 2021 received Royal Assent on 10 June 2021 and the rate of Corporation Tax of 25% effective from 1 April 2023 has been used to calculate the potential deferred tax asset of £19,163,000 (2022 - £17,605,000).

80

abrdn Asia Focus plc
(b) Factors affecting the tax charge for the year. The tax assessed for the year is lower (2022 - higher) than the current standard rate of corporation tax in the UK for a large company of 25% (2022 - 19%). The differences are explained below:

|   | 2023 |   |   | 2022  |   |   |
| --- | --- | --- | --- | --- | --- | --- |
|   | Revenue £'000 | Capital £'000 | Total £'000 | Revenue £'000 | Capital £'000 | Total £'000  |
|  Return before taxation | 17,418 | 21,157 | 38,575 | 15,608 | (26,550) | (10,942)  |
|  Return multiplied by the effective tax rate of corporation tax of 21% (2022 - standard rate of 19%) | 3,658 | 4,443 | 8,101 | 2,966 | (5,045) | (2,079)  |
|  Effects of: |  |  |  |  |  |   |
|  (Gains)/losses on investments not taxable | - | (5,317) | (5,317) | - | 4,242 | 4,242  |
|  Exchange losses/(gains) | - | 81 | 81 | - | (14) | (14)  |
|  Overseas tax | 1,279 | 182 | 1,461 | 956 | 71 | 1,027  |
|  Movement in deferred tax liability on Indian capital gains | - | 1,925 | 1,925 | - | (947) | (947)  |
|  UK dividend income | (151) | - | (151) | (112) | - | (112)  |
|  Non-taxable dividend income | (4,007) | - | (4,007) | (3,319) | - | (3,319)  |
|  Expenses not deductible for tax purposes | 4 | 3 | 7 | 25 | 76 | 101  |
|  Movement in unutilised management expenses | 391 | 474 | 865 | 345 | 457 | 802  |
|  Movement in unutilised loan relationship deficits | 105 | 316 | 421 | 95 | 284 | 379  |
|  **Total tax charge for the year** | **1,279** | **2,107** | **3,386** | **956** | **(876)** | **80**  |

Source:

Source:

Source:

Source:

Source:

Source:

Source:

abrdn Asia Focus plc

81
# Notes to the Financial Statements

Continued

## 8. Dividends

|   | 2023 £'000 | 2022 £'000  |
| --- | --- | --- |
|  Third interim dividend for 2022 – 1.6p (2021 – nil) | 2,511 | –  |
|  First dividend for 2022 – nil (2021 – 3.0p) | – | 4,708  |
|  Special dividend for 2022 – 1.6p (2021 – 0.2p) | 2,511 | 314  |
|  First interim dividend for 2023 – 1.6p (2022 – 3.2p) | 2,511 | 5,023  |
|  Second interim dividend for 2023 – 1.6p (2022 – 1.6p) | 2,511 | 2,511  |
|  Third interim dividend for 2023 – 1.6p (2022 – nil) | 2,508 | –  |
|   | 12,552 | 12,556  |

Dividends declared and paid subsequent to the year end are not included as a liability in the financial statements.

We set out below the total dividends paid and proposed in respect of the financial year, which is the basis on which the requirements of Sections 1158 – 1159 of the Corporation Tax Act 2010 are considered. The revenue available for distribution by way of dividend for the current year is £16,139,000 (2022 – £14,652,000).

|   | 2023 £'000 | 2022 £'000  |
| --- | --- | --- |
|  First interim dividend for 2023 – 1.6p (2022 – 3.2p) | 2,511 | 5,023  |
|  Second interim dividend for 2023 – 1.6p (2022 – 1.6p) | 2,511 | 2,511  |
|  Third interim dividend for 2023 – 1.6p (2022 – 1.6p) | 2,508 | 2,511  |
|  Fourth interim dividend for 2023 – 1.6p (2022 – nil) | 2,516 | –  |
|  Proposed special dividend for 2023 – 2.25p (2022 – 1.6p) | 3,507 | 2,511  |
|   | 13,553 | 12,556  |

The amount reflected above for the cost of the special dividend for 2023 is based on 155,862,978 Ordinary shares, being the number of Ordinary shares in issue excluding shares held in treasury at the date of this Report.

82

abrdn Asia Focus plc
## 9. Return per share

|   | 2023 |   |   | 2022  |   |   |
| --- | --- | --- | --- | --- | --- | --- |
|   | Revenue | Capital | Total | Revenue | Capital | Total  |
|  **Basic**  |   |   |   |   |   |   |
|  Net return/(loss) after taxation (£'000) | 16,139 | 19,050 | 35,189 | 14,652 | (25,674) | (11,022)  |
|  Weighted average number of shares in issue^{1} |  |  | 156,862,299 |  |  | 156,951,436  |
|  Return per share (p) | 10.29 | 12.14 | 22.43 | 9.34 | (16.36) | (7.02)  |

|   | 2023 |   |   | 2022  |   |   |
| --- | --- | --- | --- | --- | --- | --- |
|   | Revenue | Capital | Total | Revenue | Capital | Total  |
|  Diluted |  |  |  |  |  |   |
|  Net return/(loss) after taxation (£'000) | 16,366 | 19,730 | 36,096 | 14,831 | (25,139) | (10,308)  |
|  Weighted average number of shares in issue^{1,2} |  |  | 169,366,591 |  |  | 169,459,584  |
|  Return per share (p) | 9.66 | 11.65 | 21.31 | 8.75 | n/a | n/a  |

$^{1}$ Calculated excluding shares held in treasury.

$^{2}$ The calculation of the diluted total revenue and capital return per Ordinary share is carried out in accordance with AG 33, 'Earnings per Share'. For the purpose of calculating total revenue and capital return per Ordinary share, the number of Ordinary shares used in the weighted average number used in the basic calculation plus the number of Ordinary shares deemed to be issued for no consideration on exercise of all 2,258 Convertible Unsecured Loan Stock 2025 ("CULS"). The calculations indicate that the exercise of CULS would result in an increase in the weighted average number of Ordinary shares of 12,504,792 (2023 - 12,508,148) to 169,366,591 (2022 - 169,459,584) Ordinary shares.

For the year ended 31 July 2023 the assumed conversion for potential Ordinary shares was dilutive to the revenue and the capital return per Ordinary share (2022 - dilutive to the revenue return but non-dilutive to the capital return). Where dilution occurs, the net returns are adjusted for interest charges and issue expenses relating to the CULS (2023 - £907,000; 2022 - £714,000). Total earnings for the period are tested for dilution. Once dilution has been determined individual revenue and capital earnings are adjusted.

abrdn Asia Focus plc

83
# Notes to the Financial Statements

Continued

## 10. Investments at fair value through profit or loss

|   | 2023 £'000 | 2022 £'000  |
| --- | --- | --- |
|  Opening book cost | 377,733 | 346,431  |
|  Opening investment holding gains | 147,108 | 194,490  |
|  Opening fair value | 524,841 | 540,921  |
|  **Analysis of transactions made during the year**  |   |   |
|  Purchases at cost | 76,896 | 79,496  |
|  Sales proceeds received | (77,383) | (73,252)  |
|  Gains/(losses) on investments | 25,318 | (22,324)  |
|  **Closing fair value** | **549,672** | **524,841**  |
|  Closing book cost | 397,237 | 377,733  |
|  Closing investment gains | 152,435 | 147,108  |
|  **Closing fair value** | **549,672** | **524,841**  |

|   | 2023 £'000 | 2022 £'000  |
| --- | --- | --- |
|  Investments listed on an overseas investment exchange | 537,379 | 510,984  |
|  Investments listed on the UK investment exchange | 12,293 | 13,857  |
|   | **549,672** | **524,841**  |

The Company received £77,383,000 (2022 - £73,252,000) from investments sold in the period. The book cost of these investments when they were purchased was £57,392,000 (2022 - £48,194,000). These investments have been revalued over time and until they were sold any unrealised gains/losses were included in the fair value of the investments.

**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/(losses) on investments in the Statement of Comprehensive Income. The total costs were as follows:

|   | 2023 £'000 | 2022 £'000  |
| --- | --- | --- |
|  Purchases | 95 | 91  |
|  Sales | 159 | 147  |
|   | **254** | **238**  |

The above transaction costs are calculated in line with the AIC SORP. The transaction costs in the Company's Key Information Document are calculated on a different basis and in line with the PRIIPs regulations.

84

abrdn AsiaFocus plc
## 11. Debtors: amounts falling due within one year

|   | 2023 £'000 | 2022 £'000  |
| --- | --- | --- |
|  Amounts due from brokers | 1,343 | 280  |
|  Other debtors | 754 | 766  |
|  Prepayments and accrued income | 140 | 418  |
|   | **2,237** | **1,464**  |

None of the above amounts is past their due date or impaired (2022 – same).

## 12. Creditors

|   | 2023 £'000 | 2022 £'000  |
| --- | --- | --- |
|  Amounts falling due within one year |  |   |
|  Other creditors | 1,250 | 2,864  |
|   | **1,250** | **2,864**  |

## 13. Non-current liabilities

|  (a) CULS | 2023 |   |   | 2022  |   |   |
| --- | --- | --- | --- | --- | --- | --- |
|   |  Number of units £'000 | Liability component £'000 | Equity component £'000 | Number of units £'000 | Liability component £'000 | Equity component £'000  |
|  2.25% CULS 2025 |  |  |  |  |  |   |
|  Balance at beginning of year | 36,642 | 35,940 | 1,057 | 36,658 | 35,708 | 1,057  |
|  Conversion of 2.25% CULS 2025 | (13) | (13) | - | (16) | (16) | -  |
|  National interest on CULS transferred to revenue reserve | - | 154 | - | - | 154 | -  |
|  Amortisation and issue expenses | - | 94 | - | - | 94 | -  |
|  **Balance at end of year** | **36,629** | **36,175** | **1,057** | **36,642** | **35,940** | **1,057**  |

The 2.25% CULS 2025 can be converted at the election of holders into Ordinary shares during the months of May and November each year throughout their life, commencing 30 November 2018 to 31 May 2025 at a rate of 1 Ordinary share for every 2930p (2022 – 2930p) nominal of CULS. Interest is payable on the CULS on 31 May and 30 November each year, commencing on 30 November 2018. The interest is charged 25% to revenue and 75% to capital, in line with the Board's expected long-term split of returns from the investment portfolio of the Company.

abrdn Asia Focus plc

65
# Notes to the Financial Statements

## Continued

The OULS has been constituted as an unsecured subordinated obligation of the Company by the Trust Deed between the Company and the Trustee, the Low Debenture Trust Corporation p.l.c., dated 23 May 2018. The Trust Deed details the 2025 OULS holders' rights and the Company's obligations to the OULS holders and the Trustee oversees the operation of the Trust Deed. In the event of a winding-up of the Company the rights and claims of the Trustee and OULS holders would be subordinate to the claims of all creditors in respect of the Company's secured and unsecured borrowings, under the terms of the Trust Deed.

In 2023 the Company received elections from OULS holders to convert £12,753 (2022 – £15,343) nominal amount of OULS into 4,347 (2022 – 5,211) Ordinary shares.

The fair value of the 2025 OULS at 31 July 2023 was £34,890,000 (2022 – £37,009,000).

|   | 2023 £'000 | 2022 £'000  |
| --- | --- | --- |
|  (b) Loan Note |  |   |
|  3.05% Senior Unsecured Loan Note 2035 | 30,000 | 30,000  |
|  Unamortised Loan Note issue expenses | (102) | (108)  |
|   | 29,898 | 29,892  |

On 1 December 2020 the Company issued £30,000,000 of a 15 year loan note at a fixed rate of 3.05%. Interest is payable in half yearly instalments in June and December and the Loan Note is due to be redeemed at par on 1 December 2035. The issue costs of £118,000 will be amortised over the life of the loan note. There is also a shelf facility of £35,000,000 available the Company for the purpose of repaying the OULS, which has not been unutilised. The Company has complied with the Note Purchase Agreement that the ratio of total borrowings to adjusted net assets will not exceed 0.20 to 1.00, that the ratio of total borrowings to adjusted net liquid assets will not exceed 0.60 to 1.00, that net tangible assets will not be less than £225,000,000 and that the minimum number of listed assets will not be less than 40.

The fair value of the Senior Unsecured Loan Note as at 31 July 2023 was £26,603,000 (2022 – £28,804,000), the value being based on a comparable quoted debt security.

|   | 2023 £'000 | 2022 £'000  |
| --- | --- | --- |
|  (c) Deferred tax liability on Indian capital gains | 4,609 | 2,684  |

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#### 14. Called up share capital

|   | 2023 £'000 | 2022 £'000  |
| --- | --- | --- |
|  **Allotted, called-up and fully paid**  |   |   |
|  Ordinary shares of Sp (2022 - Sp) | 7,823 | 7,848  |
|  Treasury shares | 2,612 | 2,587  |
|   | **10,435** | **10,435**  |

|   | Ordinary shares Number | Treasury shares Number | Total shares Number  |
| --- | --- | --- | --- |
|  At 31 July 2022 | 156,953,631 | 51,744,590 | 208,698,221  |
|  Conversion of CULS | 4,347 | - | 4,347  |
|  Buyback of own shares | (500,000) | 500,000 | -  |
|  **At 31 July 2023** | **156,457,978** | **52,244,590** | **208,702,568**  |

During the year 500,000 Ordinary shares of Sp were purchased (2022 - no Ordinary shares of Sp were purchased) by the Company at a total cost of £1,262,000 (2022 - total cost of £nil), all of which were held in treasury. At the year end 52,244,590 (2022 - 51,744,590) shares were held in treasury, which represents 25.03% (2022 - 24.79%) of the Company's total issued share capital at 31 July 2023. During the year there were a further 4,347 (2022 - 5,211) Ordinary shares issued as a result of CULS conversions.

Since the year end the Company bought back for treasury a further 595,000 Ordinary shares for a total consideration of £1,543,000.

abrdn Asia Focus plc

87
## Notes to the Financial Statements
### Continued
### 15. Reserves
2023 2022
£’000 £’000
Capital reserve
At 31 July 2022 375,450 401,124
Movement in investment holdings fair value 5,327 (47,382)
Gains on realisation of investments at fair value 19,991 25,058
Purchase of own shares to treasury (1,262) -
Movement in deferred liability on Indian capital gains (1,925) 947
Withholding tax charged on capital dividends (182) (71)
Foreign exchange movement (384) 72
Capital expenses (3,777) (4,298)
At 31 July 2023 393,238 375,450
The capital reserve includes investment holding gains amounting to £152,435,000 (2022 - £147,108,000) as disclosed in note 10.
The above split in capital reserve is shown in accordance with provisions of the Statement of Recommended Practice ‘Financial
Statements Of Investment Trust Companies and Venture Capital Trusts’.
### 16. Net asset value per share
2023 2022
Basic
Net assets attributable £485,784,000 £464,396,000
A
Number of shares in issue 156,457,978 156,953,631
Net asset value per share 310.49p 295.88p
2023 2022
Diluted
Net assets attributable £521,959,000 £500,336,000
A
Number of shares in issue 168,959,568 169,459,574
B

| Net asset value per share |  | 308.93p 295.25p |
| --- | --- | --- |
|  | A Calculated excluding shares held in treasury. |  |
|  | B The diluted net asset value per share has been calculated on the assumption that £36,629,659 (2022 - £36,642,412) 2.25% Convertible Unsecured Loan Stock 2025 |  |

(“CULS”) is converted at 293.0p (2022 - 293.0p) per share, giving a total of 168,959,568 (2022- 169,459,574) shares. Where dilution occurs, the net assets are adjusted for
items relating to the CULS.
88 abrdn Asia Focus plc
**Net asset value per share - debt converted.** In accordance with the Company's understanding of the current methodology adopted by the AIC, convertible financial instruments are deemed to be "in the money" if the cum income net asset value ("NAV") exceeds the conversion price of 293.0p (2022 - 293.0p) per share. In such circumstances a net asset value is produced and disclosed assuming the convertible debt is fully converted. At 31 July 2023 the cum income NAV was 318.49p (2022 - 295.88p) and thus the CULS were 'in the money' (2022 - same).

## 17. Analysis of changes in net debt

|   | At 31 July 2022 £'000 | Currency differences £'000 | Cash flows £'000 | Non-cash movements £'000 | At 31 July 2023 £'000  |
| --- | --- | --- | --- | --- | --- |
|  Cash and short term deposits | 9,471 | (384) | (3,280) | - | 5,807  |
|  Debt due after more than one year | (68,516) | - | - | (2,166) | (70,682)  |
|   | (59,045) | (384) | (3,280) | (2,166) | (64,875)  |

|   | At 31 July 2021 £'000 | Currency differences £'000 | Cash flows £'000 | Non-cash movements £'000 | At 31 July 2022 £'000  |
| --- | --- | --- | --- | --- | --- |
|  Cash and short term deposits | 14,577 | 72 | (5,178) | - | 9,471  |
|  Debt due after more than one year | (69,225) | - | - | 709 | (68,516)  |
|   | (54,648) | 72 | (5,178) | 709 | (59,045)  |

A statement reconciling the movement in net funds to the net cash flow has not been presented as there are no differences from the above analysis.

## 18. Related party transactions and transactions with the Manager

Fees payable during the year to the Directors and their interests in shares of the Company are considered to be related party transactions and are disclosed within the Directors' Remuneration Report on pages 56 and 57. The balance of fees due to Directors at the year end was £nil (2022 - £nil).

During the year a fee of £75,000 plus VAT has been paid to Mr Martin Gilbert, a former Director of the Company who retired in November 2019. In respect of independent consultancy services provided to the Company in the three year period ending 31 July 2023.

The Company's Investment Manager, abrdn Asia, is a wholly-owned subsidiary of abrdn plc, which has been delegated, under an agreement with aIFML to provide management services to the Company, the terms of which are outlined in notes 4 and 5 along with details of transactions during the year and balances outstanding at the year end.

abrdn Asia Focus plc

69
## Notes to the Financial Statements
### Continued
### 19. Financial instruments
Risk management. The Company’s investment activities expose it to various types of financial risk associated with the financial
instruments and markets in which it invests. The Company’s financial instruments comprise equities and other investments,
cash balances, loans and debtors and creditors that arise directly from its operations; for example, in respect of sales and
purchases awaiting settlement, and debtors for accrued income.
The Board has delegated the risk management function to aFML under the terms of its management agreement with aFML
(further details of which are included under note 4 and in the Directors’ Report) however, it remains responsible for the risk and
control framework and operation of third parties. The Board regularly reviews and agrees policies for managing each of the
key financial risks identified with the Manager. The types of risk and the Manager’s approach to the management of each type
of risk, are summarised below. Such approach has been applied throughout the year and has not changed since the previous
accounting period. The numerical disclosures exclude short-term debtors and creditors.
Risk management framework. The directors of aFML collectively assume responsibility for aFML’s obligations under the AIFMD
including reviewing investment performance and monitoring the Company’s risk profile during the year.
aFML is a fully integrated member of the abrdn Group (“the Group”), which provides a variety of services and support to aFML
in the conduct of its business activities, including in the oversight of the risk management framework for the Company. The
AIFM has delegated the day to day administration of the investment policy to abrdn Asia, which is responsible for ensuring that
the Company is managed within the terms of its investment guidelines and the limits set out in its pre-investment disclosures to
investors (details of which can be found on the Company’s website). The AIFM has retained responsibility for monitoring and
oversight of investment performance, product risk and regulatory and operational risk for the Company.
The Group’s Internal Audit Department is independent of the Risk Division and reports directly to the Group CEO and to the
Audit Committee of the Group’s Board of Directors. The Internal Audit Department is responsible for providing an independent
assessment of the Group’s control environment.
The Manager conducts its risk oversight function through the operation of the Group’s risk management processes and
systems which are embedded within the Group’s operations. The Group’s Risk Division supports management in the
identification and mitigation of risks and provides independent monitoring of the business. The Division includes Compliance,
Business Risk, Market Risk, Risk Management and Legal. The team is headed up by the Group’s Chief Risk Officer, who reports to
the CEO of the Group. The Risk Division achieves its objective through embedding the Risk Management Framework
throughout the organisation using the Group’s operational risk management system (“SHIELD”).
The Group’s corporate governance structure is supported by several committees to assist the board of directors, its
subsidiaries and the Company to fulfil their roles and responsibilities. The Group’s Risk Division is represented on all committees,
with the exception of those committees that deal with investment recommendations. The specific goals and guidelines on the
functioning of those committees are described in the committees’ terms of reference.
Risk management. The main risks the Company faces from these financial instruments are (i) market risk (comprising interest
rate, foreign currency and other price risk), (ii) liquidity risk and (iii) credit risk.
Market risk. The fair value of or future cash flows from 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 other price risk.
Interest rate risk. Interest rate movements may affect:
- the level of income receivable on cash deposits;
- valuation of debt securities in the portfolio.
90 abrdn Asia Focus plc
Management of the risk. The possible effects on fair value and cash flows that could arise as a result of changes in interest rates
are taken into account when making investment and borrowing decisions. When drawn down, interest rates are fixed on
borrowings.
Interest rate risk profile. The interest rate risk profile of the Company’s financial assets and liabilities, excluding equity holdings
which are all non-interest bearing, at the reporting date was as follows:
Weighted average Weighted
period for which average Fixed Floating
rate is fixed interest rate rate rate
At 31 July 2023 Years % £’000 £’000
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Assets
Sterling - - - 4,664
Chinese Renminbi - - - 775
Vietnam Dong - - - 361
Thailand Baht - - - 4
US Dollar - - - 3
- - - 5,807
Liabilities
2.25% Convertible Unsecured Loan Stock 2025 1.83 2.3 36,175 -
3.05% Senior Unsecured Loan Note 2035 12.35 3.1 29,898 -
- - 66,073 -
abrdn Asia Focus plc 91
# Notes to the Financial Statements

## Continued

|  At 31 July 2022 | Weighted average period for which rate is fixed Years | Weighted average interest rate % | Fixed rate £'000 | Floating rate £'000  |
| --- | --- | --- | --- | --- |
|  **Assets**  |   |   |   |   |
|  Sterling | - | - | - | 8,585  |
|  Taiwan Dollar | - | - | - | 458  |
|  Vietnam Dong | - | - | - | 371  |
|  Sri Lanka Rupee | - | - | - | 32  |
|  Pakistan Rupee | - | - | - | 11  |
|  Indian Rupee | - | - | - | 9  |
|  Thailand Baht | - | - | - | 3  |
|  Malaysian Ringgit | - | - | - | 2  |
|   | - | - | - | 9,471  |
|  **Liabilities**  |   |   |   |   |
|  2.25% Convertible Unsecured Loan Stock 2025 | 2.83 | 2.3 | 35,940 | -  |
|  3.05% Senior Unsecured Loan Note 2035 | 13.35 | 3.1 | 29,892 | -  |
|   | - | - | 65,832 | -  |

The weighted average interest rate is based on the current yield of each asset or liability, weighted by its market value.

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

The Company's equity portfolio and short term debtors and creditors have been excluded from the above tables.

**Interest rate sensitivity.** Movements in interest rates would not significantly affect net assets attributable to the Company's shareholders and total return.

**Foreign currency risk.** Most of the Company's investment portfolio is invested in overseas securities and the Statement of Financial Position, therefore, can be significantly affected by movements in foreign exchange rates.

**Management of the risk.** It is not the Company's policy to hedge this risk on a continuing basis but the Company may, from time to time, match specific overseas investment with foreign currency borrowings.

The revenue account is subject to currency fluctuations arising on dividends receivable in foreign currencies and, indirectly, due to the impact of foreign exchange rates upon the profits of investee companies. It is not the Company's policy to hedge this currency risk but the Board keeps under review the currency returns in both capital and income.

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Foreign currency risk exposure by currency of denomination:

|   | 31 July 2023 |   |   | 31 July 2022  |   |   |
| --- | --- | --- | --- | --- | --- | --- |
|   | Overseas investments £'000 | Net monetary assets/ (liabilities) £'000 | Total currency exposure £'000 | Overseas investments £'000 | Net monetary assets/ (liabilities) £'000 | Total currency exposure £'000  |
|  Australian Dollar | - | - | - | 7,940 | - | 7,940  |
|  Chinese Renminbi | 21,839 | 775 | 22,614 | 15,756 | - | 15,756  |
|  Danish Krona | 10,937 | - | 10,937 | 12,352 | - | 12,352  |
|  Hong Kong Dollar | 49,118 | - | 49,118 | 64,947 | - | 64,947  |
|  Indian Rupee | 89,410 | - | 89,410 | 82,097 | 9 | 82,106  |
|  Indonesian Rupiah | 64,045 | - | 64,045 | 55,431 | - | 55,431  |
|  Korean Won | 46,231 | - | 46,231 | 31,429 | - | 31,429  |
|  Malaysian Ringgit | 30,827 | - | 30,827 | 35,339 | 2 | 35,341  |
|  Taiwan Dollar | 69,008 | - | 69,008 | 56,994 | 458 | 57,452  |
|  New Zealand Dollar | 12,605 | - | 12,605 | 14,061 | - | 14,061  |
|  Pakistan Rupee | - | - | - | - | 11 | 11  |
|  Philippine Peso | 20,287 | - | 20,287 | 19,825 | - | 19,825  |
|  Singapore Dollar | 33,221 | - | 33,221 | 41,585 | - | 41,585  |
|  Sri Lankan Rupee | 14,586 | - | 14,586 | 7,640 | 32 | 7,672  |
|  Thailand Baht | 32,643 | 4 | 32,647 | 35,114 | 3 | 35,117  |
|  US Dollar | 11,461 | 3 | 11,464 | - | - | -  |
|  Vietnamese Dong | 31,161 | 361 | 31,522 | 30,474 | 371 | 30,845  |
|   | 537,379 | 1,143 | 538,522 | 510,984 | 886 | 511,870  |
|  Sterling | 12,293 | (61,409) | (49,116) | 13,857 | (57,247) | (43,390)  |
|  **Total** | **549,672** | **(60,266)** | **489,406** | **524,841** | **(56,361)** | **468,480**  |

**Foreign currency sensitivity.** The Company's foreign currency financial instruments are in the form of equity investments, fixed interest investments, cash and bank loans. The sensitivity of the former has been included within other price risk sensitivity analysis so as to show the overall level of exposure. Due consideration is paid to foreign currency risk throughout the investment process.

**Other price risk.** Other price risks (ie changes in market prices other than those arising from interest rate or currency risk) may affect the value of the quoted investments.

abdn Asia Focus plc

93
# Notes to the Financial Statements

## Continued

Investment in Far East equities or those of companies that derive significant revenue or profit from the Far East involves a greater degree of risk than that usually associated with investment in the securities in major securities markets. The securities that the Company owns may be considered speculative because of this higher degree of 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. Both the allocation of assets and the stock selection process, as detailed on pages 103 to 105, 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.

**Other price risk sensitivity.** If market prices at the reporting date had been 20% (2022 - 20%) higher or lower while all other variables remained constant, the return attributable to Ordinary shareholders for the year ended 31 July 2023 would have increased/(decreased) by £109,934,000 (2022 - increased/(decreased) by £104,968,000) and equity reserves would have increased/(decreased) by the same amount.

**Liquidity risk.** This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities.

**Management of the risk.** The Board imposes borrowing limits to ensure gearing levels are appropriate to market conditions and reviews these on a regular basis. Gearing comprises both senior unsecured loan notes and convertible unsecured loan stock. The Board has imposed a maximum gearing level, measured on the most stringent basis of calculation after netting off cash equivalents, of 25%. Details of borrowings at the 31 July 2023 are shown in note 13.

Liquidity risk is not considered to be significant as the Company's assets comprise mainly readily realisable securities, which can be sold to meet funding commitments if necessary. Details of the Board's policy on gearing are shown in the investment policy section on page 16.

**Liquidity risk exposure.** At 31 July 2023 the Company had borrowings in the form of the £36,629,000 (2022 - £36,642,000) nominal of 2.25% Convertible Unsecured Loan Stock 2025 and £29,898,000 (2022 - £29,892,000) in the form of the 3.05% Senior Unsecured Loan Note 2035.

At 31 July 2023 the amortised cost of the Company's 3.05% Senior Unsecured Loan Note 2035 was £29,898,000 (2022 - £29,892,000). The maximum exposure at 31 July 2023 was £29,898,000 (2022 - £29,892,000) and the minimum exposure at 31 July 2023 was £29,892,000 (2022 - £29,886,000).

The maturity profile of the Company's existing borrowings is set out below.

|  31 July 2023 | Expected cashflows £'000 | Due within 3 months £'000 | Due between 3 months and 1 year £'000 | Due after 1 year £'000  |
| --- | --- | --- | --- | --- |
|  2.25% Convertible Unsecured Loan Stock 2025 | 37,691 | - | 827 | 36,864  |
|  3.05% Senior Unsecured Loan Note 2035 | 41,438 | - | 915 | 40,523  |
|   | 79,129 | - | 1,742 | 77,387  |

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|  31 July 2022 | Expected cashflows £'000 | Due within 3 months £'000 | Due between 3 months and 1 year £'000 | Due after 1 year £'000  |
| --- | --- | --- | --- | --- |
|  2.25% Convertible Unsecured Loan Stock 2025 | 38,282 | - | 827 | 37,455  |
|  3.05% Senior Unsecured Loan Note 2035 | 42,353 | - | 915 | 41,438  |
|   | 80,635 | - | 1,742 | 78,893  |

**Credit risk.** This is the risk of failure of the counterparty to a transaction to discharge its obligations under that transaction that could result in the Company suffering a loss.

**Management of the risk.** Investment transactions are carried out with a large number of brokers, whose credit-standing is reviewed periodically by the Investment Manager, and limits are set on the amount that may be due from any one broker. Settlement of investment transactions are also done on a delivery versus payment basis:

- 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 third-party administrator carries out a stock reconciliation to Custodian 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. This review will also include checks on the maintenance and security of investments held; and

- cash is held only with reputable banks with high quality external credit ratings.

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.

None of the Company's financial assets is secured by collateral or other credit enhancements.

**Credit risk exposure.** In summary, compared to the amounts in the Statement of Financial Position, the maximum exposure to credit risk at 31 July was as follows:

|  Current assets | 2023 |   | 2022  |   |
| --- | --- | --- | --- | --- |
|   |  Statement of Financial Position £'000 | Maximum exposure £'000 | Statement of Financial Position £'000 | Maximum exposure £'000  |
|  Debtors and prepayments | 2,237 | 2,237 | 1,464 | 1,464  |
|  Cash and short term deposits | 5,807 | 5,807 | 9,471 | 9,471  |
|   | 8,044 | 8,044 | 10,935 | 10,935  |

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

abrdn Asia Focus plc

95
# Notes to the Financial Statements

## Continued

**Fair values of financial assets and financial liabilities.** The fair value of the loan note has been calculated at $26,603,000 as at 31 July 2023 (2022 – $28,804,000) compared to a value at amortised cost in the financial statements of $29,898,000 (2022 – $29,892,000) (note 13). The fair value of the loan note is determined by aggregating the expected future cash flows for that loan discounted at a rate comprising the borrower's margin plus an average of market rates applicable to loans of a similar period of time and currency. 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 other financial assets and liabilities, excluding CULS which are held at amortised cost, are stated at fair value in the Statement of Financial Position and considered that this approximates to the carrying amount.

## 20. Fair value hierarchy

FRS 102 requires an entity to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements.

**Level 1:** unadjusted quoted prices in an active market for identical assets or liabilities that the entity can access at the measurement date.

**Level 2:** inputs other than quoted prices included within Level 1 that are observable (ie developed using market data) for the asset or liability, either directly or indirectly.

**Level 3:** inputs are unobservable (ie for which market data is unavailable) for the asset or liability.

The financial assets measured at fair value in the Statement of Financial Position are grouped into the fair value hierarchy at 31 July 2023 as follows:

|  As at 31 July 2023 | Note | Level 1 £'000 | Level 2 £'000 | Level 3 £'000 | Total £'000  |
| --- | --- | --- | --- | --- | --- |
|  **Financial assets and liabilities at fair value through profit or loss**  |   |   |   |   |   |
|  Quoted equities | a) | 536,515 | – | 9,958 | 546,473  |
|  Quoted preference shares | b) | – | – | 2,835 | 2,835  |
|  Quoted warrants | b) | – | 247 | 117 | 364  |
|  **Net fair value** |  | **536,515** | **247** | **12,910** | **549,672**  |

|  As at 31 July 2022 | Note | Level 1 £'000 | Level 2 £'000 | Level 3 £'000 | Total £'000  |
| --- | --- | --- | --- | --- | --- |
|  **Financial assets and liabilities at fair value through profit or loss**  |   |   |   |   |   |
|  Quoted equities | a) | 511,540 | – | 9,664 | 521,204  |
|  Quoted preference shares | b) | – | 3,203 | – | 3,203  |
|  Quoted warrants | b) | – | 434 | – | 434  |
|  **Net fair value** |  | **511,540** | **3,637** | **9,664** | **524,841**  |

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abrdn Asia Focus plc
**a) Quoted equities.** The fair value of the Company's investments in quoted equities has 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 preference shares and quoted warrants.** The fair value of the Company's investments in quoted preference shares and quoted warrants has been determined by reference to their quoted bid prices at the reporting date. Investments categorised as Level 2 are not considered to trade as actively as Level 1 assets.

|   | Year ended 31 July 2023 £'000 | Year ended 31 July 2022 £'000  |
| --- | --- | --- |
|  **Level 3 Financial assets at fair value through profit or loss** |  |   |
|  Opening fair value | 9,664 | –  |
|  Transfers from level 1 | – | 9,664  |
|  Transfers from level 2 | 2,952 | –  |
|  Total gains or losses included in losses on investments in the Statement of Comprehensive Income: |  |   |
|  – assets held at the end of the year | 294 | –  |
|  **Closing balance** | **12,910** | **9,664**  |

Transfers from level 2 during the year comprise Millennium & Copthorne preference shares of £2,835,000 (2022 – £3,203,000) to reflect the absence of a consistent market quote. These have been priced in line with their Ordinary shares. In addition First Sponsor Group warrants of £117,000 (2022 – £158,000) have been classified as level 3 to reflect their liquidity. Their fair value has been based on a trade executed in February 2023.

The Company's investee, CEBU Holdings is awaiting final regulatory approval to merge with another company, Ayala Land, and new shares are expected to be issued in Ayala Land in due course to satisfy the transaction by a share conversion. The valuation methodology employed is based on the underlying quoted price of Ayala Land and the implied conversion ratio providing a value of £9,958,000 (2022 – £9,664,000).

## 21. Capital management policies and procedures

The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the return to shareholders through the optimisation of the debt (comprising CULS and Loan Note) and equity balance.

abrdn Asia Focus plc

97
# Notes to the Financial Statements

## Continued

The Company's capital comprises the following:

|   | 2023 £'000 | 2022 £'000  |
| --- | --- | --- |
|  **Equity** |  |   |
|  Equity share capital | 10,435 | 10,435  |
|  Reserves | 475,349 | 453,961  |
|  **Liabilities** |  |   |
|  3.05% Senior Unsecured Loan Note 2035 | 29,898 | 29,892  |
|  2.25% Convertible Unsecured Loan Stock 2025 | 36,175 | 35,940  |
|   | 551,857 | 530,228  |

The Board's policy is to utilise gearing when the Manager believes it appropriate to do so, up to a maximum of 25% geared at the time of drawdown. Gearing for this purpose is defined as the excess amount above shareholders' funds of total assets (including net current assets/liabilities) less cash/cash equivalents, expressed as a percentage of the shareholders' funds. If the amount so calculated is negative, this is shown as is 'net cash' position.

|   | 2023 £'000 | 2022 £'000  |
| --- | --- | --- |
|  Investments at fair value through profit or loss | 549,672 | 524,841  |
|  Current assets excluding cash and cash equivalents | 894 | 1,184  |
|  Current liabilities | (1,250) | (2,864)  |
|  Deferred tax liability on Indian capital gains | (4,609) | (2,684)  |
|   | 544,707 | 520,477  |
|  **Net assets** | 485,784 | 464,396  |
|  **Gearing (%)** | 12.1 | 12.1  |

The Board monitors and reviews the broad structure of the Company's capital on an ongoing basis. The review includes:

- the planned level of gearing which takes account of the Manager's views on the market;
- the level of equity shares in issue;
- 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 does not have any externally imposed capital requirements.

98

abrdn Asia Focus plc
# Alternative Performance Measures (Unaudited)

Alternative Performance Measures ("APMs") are numerical measures of the Company's current, historical or future performance, financial position or cash flows, other than financial measures defined or specified in the applicable financial framework. The Company's applicable financial framework includes FRS 102 and the AIC SORP. The Directors assess the Company's performance against a range of criteria which are viewed as particularly relevant for closed-end investment companies.

## Discount to net asset value per Ordinary share

The difference between the share price and the net asset value per Ordinary share expressed as a percentage of the net asset value per Ordinary share. 2023 has been presented on a diluted basis as the Convertible Unsecured Loan Stock ("CULS") is "in the money" (2022 – same).

|   |  | As at 31 July 2023 | As at 31 July 2022  |
| --- | --- | --- | --- |
|  NAV per Ordinary share (p) | a | 308.93 | 295.25  |
|  Share price (p) | b | 264.00 | 254.00  |
|  Discount | (a-b)/a | 14.5% | 14.8%  |

## Dividend cover

Revenue return per Ordinary share divided by dividends declared for the year per Ordinary share expressed as a ratio.

|   |  | Year ended 31 July 2023 | Year ended 31 July 2022  |
| --- | --- | --- | --- |
|  Revenue return per Ordinary share (p) | a | 10.29 | 9.34  |
|  Dividends declared (p) | b | 8.66 | 8.00  |
|  Dividend cover | a/b | 1.19 | 1.17  |

## Net gearing

Net gearing measures the total borrowings less cash and cash equivalents divided by shareholders' funds, expressed as a percentage. Under AIC reporting guidance cash and cash equivalents includes net amounts due from and to brokers at the year end as well as cash and short term deposits.

|   |  | Year ended 31 July 2023 | Year ended 31 July 2022  |
| --- | --- | --- | --- |
|  Borrowings (£'000) | a | 66,073 | 65,832  |
|  Cash and short term deposits (£'000) | b | 5,807 | 9,471  |
|  Amounts due to brokers (£'000) | c | - | -  |
|  Amounts due from brokers (£'000) | d | 1,343 | 280  |
|  Shareholders' funds (£'000) | e | 485,784 | 464,396  |
|  **Net gearing** | (a-b-c-d)/e | **12.1%** | **12.1%**  |

abrdn Asia Focus plc

99
# Alternative Performance Measures

## Continued

### Ongoing charges

The ongoing charges ratio has been calculated in accordance with guidance issued by the AIC as the total of investment management fees and administrative expenses and expressed as a percentage of the average published daily net asset values with debt at fair value throughout the year.

|   | 2023 | 2022  |
| --- | --- | --- |
|  Investment management fees (£'000) | 3,012 | 3,204  |
|  Administrative expenses (£'000) | 1,328 | 1,561  |
|  Less non-recurring charges^{a} (£'000) | (67) | (428)  |
|  **Ongoing charges (£'000)** | **4,273** | **4,337**  |
|  **Average net assets (£'000)** | **462,127** | **490,446**  |
|  **Ongoing charges ratio** | **0.92%** | **0.88%**  |

$^{a}$Professional fees comprising corporate and legal fees considered unlikely to occur.

The ongoing charges ratio provided in the Company's Key Information Document is calculated in line with the PRIIPs regulations, which includes finance costs and transaction charges.

### Total return

NAV and share price total returns show how the NAV and share price has performed over a period of time in percentage terms, taking into account both capital returns and dividends paid to shareholders. NAV and share price total returns are monitored against open-ended and closed-ended competitors, and the Reference Index, respectively.

|  Year ended 31 July 2023 |  | NAV | Share Price  |
| --- | --- | --- | --- |
|  Opening at 1 August 2022 | a | 295.25p | 254.00p  |
|  Closing at 31 July 2023 | b | 308.93p | 264.00p  |
|  Price movements | c=(b/a)-1 | 4.6% | 3.9%  |
|  Dividend reinvestment^{d} | d | 3.0% | 3.4%  |
|  **Total return** | **c=d** | **+7.6%** | **+7.3%**  |

|  Year ended 31 July 2022 |  | NAV | Share Price  |
| --- | --- | --- | --- |
|  Opening at 1 August 2021 | a | 309.02p | 266.00p  |
|  Closing at 31 July 2022 | b | 295.25p | 254.00p  |
|  Price movements | c=(b/a)-1 | -4.5% | -4.5%  |
|  Dividend reinvestment^{d} | d | 2.5% | 2.8%  |
|  **Total return** | **c=d** | **-2.0%** | **-1.7%**  |

$^{a}$NAV total return involves investing the net dividend in the NAV of the Company with debt at fair value on the date on which that dividend goes ex-dividend. Share price total return involves reinvesting the net dividend in the share price of the Company on the date on which that dividend goes ex-dividend.

100

abdn Asia Focus plc
## Corporate
## Information
### The Company’s Investment
### Manager is abrdn Asia
### Limited, a wholly owned
### subsidiary of abrdn plc
### which has assets under
### management and
### administration of £496
### billion as at 30 June 2023
abrdn Asia Focus plc 101
## Information about the Investment Mana er
### abrdn Asia Limited abrdn
abrdn Fund Managers Limited (“aFML”), authorised and Worldwide, the Manager has a combined £496 billion (as
regulated by the Financial Conduct Authority, has been at 30 June 2023) in assets under management and
appointed as alternative investment fund manager to the administration for a range of clients, including individuals
Company. aFML has in turn delegated portfolio and institutions, through mutual and segregated funds.
management to abrdn Asia Limited (“abrdn Asia”).
abrdn has its headquarters in Edinburgh with principal
offices in Aberdeen, London, Singapore, Philadelphia,
Bangkok, Edinburgh, Hong Kong, Luxembourg, Sao Paulo,
Stockholm, Sydney, Taipei, and Tokyo
### The Investment Team Senior Managers
### Hugh Young Flavia Cheong
Chairman, Asia Pacific Region Head of Equities – Asia Pacific, Asian Equities
BA in Politics from Exeter University. Started investment CFA Charterholder, Masters in Economics from University
career in 1980. In charge of abrdn Asia’s Far East funds of Auckland. Previously with Investment Company of the
since 1985. People’s Republic of China and Development Bank of
Singapore. Started investment career in 1987. Joined
abrdn Asia in August 1996.
### Gabriel Sacks Xin-Yao Ng
Investment Director, Equities Asia Investment Manager, Equities Asia
Chartered Financial Analyst, MA in Land Economy from CFA Charterholder, BSc in Business from Nanyang
Cambridge University. Joined abrdn in 2008 as part of the Technological University. Xin-Yao is based in Singapore
London-based Global Emerging Markets Equities team and joined abrdn in 2018 from Allard Partners
and transferred to Asian Equities in 2018.
CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.
102 abrdn Asia Focus plc
## g
## The Investment Process
As active equity investors, the Investment Manager ESG assessment and corporate engagement enhance
believes that deep fundamental research, responsible returns. The Investment Manager places constructive
stewardship with ESG, and a disciplined investment engagement and environmental, social and governance
process is the best approach to meet our client’s (ESG) considerations at the heart of company research,
investment needs – now and in the future. Its approach ensuring it is a responsible steward of its clients’ assets.
to equity investing is underpinned by three core The Investment Manager believes that this approach can
investment beliefs. mitigate risks and enhance returns for its clients, as
companies with robust ESG practices tend to enjoy long-
Fundamental research delivers insights that can be used
term financial benefits.
to exploit market inefficiencies. In the Investment
Manager’s view, company fundamentals ultimately drive Disciplined, active investment can deliver superior
share prices but are often valued inefficiently in the outcomes for our clients. The Investment Manager aims to
shorter term. The Investment Manager believes that build high conviction portfolios where its stock-specific
fundamental research is the key to delivering insights that insights drive performance, giving its clients access to the Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
allow us to exploit these inefficiencies and identify the best best investment ideas.
investment opportunities for client portfolios.
### Our Research Drives Performance
abrdn Asia Focus plc 103
## The Investment Process
### Continued
Valuation. Having understood the foundations of the
### Research
business and how key drivers are changing, we focus on
The Investment Manager has developed a proprietary
valuing the company’s shares. We aim to understand
research platform used by all its equity, credit and ESG
what the equity market is pricing in (both in terms of the
teams, giving instant access to research globally. The
expected earnings trajectory and what valuation multiples
research is focused on three key areas:
reveal about how the market is thinking), and then we
Putting quality first. Face-to-face meetings anchor how build our own assessment of how the stock should be
the Investment Manager understands and challenges the priced based on our fundamental insights. We use a wide
key elements of a company’s fundamentals. We capture range of valuation techniques and metrics in order to
key business fundamentals through the lens of our quality gauge the upside potential, as well as to evaluate potential
assessment, using our five aspects of quality. Here, we look downside scenarios.
to uncover strong business models, clear competitive
Our analysis in these areas comes together to drive
advantages, and industry leaders and innovators. In short,
one investment recommendation for every stock
we establish business quality first. A quality score (‘Q
under coverage.
score’) is given to every company under coverage from
one to five (where a score of one denotes the highest
### Integrated ESG Analysis
quality and a score of five, the lowest), both at an overall
level and on five distinct criteria: The detailed analysis of the Investment Manager’s
embedded ESG process is contained on pages 106 to 110.
 Industry background – how attractive is the industry that
the company operates in?
### Idea Generation
 Business model and moat – how strong is the economic
Research coverage is organised on a sector basis, with
or competitive moat of the business?
analysts developing deep expertise which enables them
 Management – how good is the management team? to identify investment opportunities through fundamental
knowledge at both the sector and stock level. The
 ESG – how significant are the ESG issues that the
Investment Manager also uses quantitative screening
company must manage, including its internal
tools and risk tools to help us identify interesting
governance and remuneration, and how they are
stock opportunities and the most appropriate
addressed?
coverage universe.
 Financials – how do the business’ fundamentals
translate into its financial performance and balance
### Peer Review
sheet strength?
Having a common investment language facilitates
effective communication and comparison of investment
What’s Changing? We aim to understand what lies ahead
ideas through peer review which is a critical part of the
for the business and the factors that will determine
process. All investment ideas are subject to rigorous peer
corporate value over time. By understanding what is
review, both at regular meetings and on an ad hoc basis –
changing, both in terms of a business’ fundamentals and
and all team members debate stocks, meet companies
market sentiment towards it, we ensure we are always
from all industries, and given their dual fund manager /
well positioned for the future. This means we can find
analyst role are incentivised to fully participate in the
opportunities for outperformance where we see a
entire process.
mismatch between consensus and our own analysis. We
resist making any assumptions based on consensus or
### Portfolio Construction/Risk Controls
what has happened in the past – recognising that the
world can change at speed. Portfolios are built from the bottom up, prioritising high
conviction stock ideas in a risk aware framework, giving
clients access to the best investment ideas. Portfolio risk
budgets are derived from clients’ investment objectives
and required outcomes. Peer review is an essential
component of the construction process with dedicated
portfolio construction pods (smaller dedicated groups of
senior team members that have clear accountability for
the strategy) debating stock holdings, portfolio structure
and risk profiles.
104 abrdn Asia Focus plc
As an active equity investor the Investment Manager has
adopted a principled portfolio construction process which
actively takes appropriate and intentional risk to drive
return. The largest component of the active risk will be
stock-specific risk, along with appropriate levels of
diversification. Risk systems monitor and analyse risk
exposures across multiple perspectives breaking down
the risk within the portfolio by industry and country factors,
by currency and macro factors, and by other
fundamental factors (quality, momentum, etc.).
Consideration of risk starts at the stock level with the
rigorous company research helping the Investment
Manager to avoid stock specific errors. The Investment
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Manager ensures that any sector or country risk is
appropriately sized and managed relative to the overall
objectives of the Company.
### Operational Risk and Independent
### Governance Oversight
Risk management is an integral part of the Investment
Manager’s management process and portfolios are
formally reviewed on a regular basis with the Investment
Manager’s Global Head of Equities, the Portfolio Managers,
the Investment Manager’s Investment Governance &
Oversight Team (IGO) and members of the Manager’s
Investment Risk Team. This third party oversight both
monitors portfolio risk and also oversees operational risk to
ensure client objectives are met.
abrdn Asia Focus plc 105
## ESG En a ement
The Board is very conscious of the risks emanating from
### Environmental, Social and Governance
increased ESG challenges. Whilst the management of the
### (“ESG”) Engagement
Company’s investments is not undertaken with any
This section of the Annual Report aims to present more
specific instructions to exclude certain asset types or
information on the Investment Manager’s approach to
classes, the Investment Manager embeds ESG into the
integrating ESG into its investment decision-making and
research of each asset class as part of the investment
the implications for the Company.
process. ESG investment is about active engagement, in
the belief that the performance of assets held around the
world can be improved over the longer term.
Currently, the Company’s portfolio is ESG BB rated
by MSCI, as is the Benchmark. The Company’s
portfolio Economic Emission Intensity is only 13.6%
of its benchmark.
## BB 86.4% 81 27.2% 100%
BB-rated by Lower carbon intensity AGMs / EGMs voted in of AGMs / EGMs with of researched companies
MSCI ESG than the benchmark last twelve months at least one vote cast include integration of ESG
against management company analysis
 Social factors pertain to a company’s relationship with its
### What is ESG, and why do we do it?
employees and vendors. Risks and opportunities can
Environmental, social and governance (ESG)
include (but are not limited to) a company’s initiatives on
considerations have been an integral part of the
employee health and well-being, and how supplier
Investment Manager’s decision-making process for
relationships align with corporate values.
almost 30 years. The Investment Manager believes that
ESG factors are financially material and can meaningfully  Corporate governance factors can include the
affect a company’s performance. Hence, a company’s corporate decision-making structure, independence of
ability to sustainably generate returns for investors board members, the treatment of minority
depends on the management of its environmental impact, shareholders, executive compensation and political
its consideration of the interests of society and contributions, among others.
stakeholders, and on the way it is governed. By putting At the investment stage, ESG factors and analysis help to
ESG factors at the heart of its investment process, the frame where best to invest by considering material risks
Investment Manager aims to generate better outcomes and opportunities alongside other financial metrics. Due
for the Company’s shareholders. diligence can ascertain whether such risks are being
adequately managed, and whether the market has
The three factors can be considered as follows:
understood and priced them accordingly.
 Environmental factors relate to how a company
conducts itself with regard to environmental The Investment Manager is an active owner, voting at
conservation and sustainability. Types of environmental shareholder meetings in a deliberate manner, working
risks and opportunities include a company’s energy with companies to drive positive change, and engaging
consumption, waste disposal, land development and with policymakers on ESG and stewardship matters.
carbon footprint, among others.
106 abrdn Asia Focus plc
## g g
### The importance of ESG research in Can we measure it?
There are elements of ESG that can be quantified, for
### small-cap investing
example the diversity of a board, the carbon footprint of a
When it comes to analysing and assessing the ESG of
company, and the level of employee turnover. While
potential investments, the Investment Manager
diversity can be monitored, measuring inclusion is more of
emphasises careful and rigorous due diligence, rather
a challenge. Although it is possible to measure the level of
than a reliance on publicly disclosed information.
staff turnover, it is more challenging to quantify corporate
Many of the companies in which the Company invests are culture. Relying on calculable metrics alone would
founder-run. The Investment Manager believes that potentially lead to misleading insights. As active managers,
investing alongside talented, hard-working and ambitious quantitative and qualitative assessments are blended to
founders provides a powerful opportunity for long-term better understand the ESG performance of a company. In
performance. However, the Investment Manager is also all cases, careful and rigorous due diligence, coupled with
aware that smaller, founder-led companies tend to have engagement after an investment, are key to deriving ESG Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
ESG disclosures that are sometimes less sophisticated insights.
than their larger peers, and so can perform less well than
The Investment Manager’s analysts consider such factors
their large cap peers when it comes to third-party ESG
in a systematic and globally-applied approach to assess
ratings. Such companies often don’t have experience with
and compare companies consistently on their ESG
disclosure requirements, or the resources necessary, to
credentials, both regionally and against their peer group.
disclose everything that is increasingly expected of them.
Some of the key questions asked of companies include:
This is particularly true in Asia.
 How material are ESG issues for this company, and how
Furthermore, many of these third party ratings agencies
are they being addressed?
tend to score founder-led companies poorly, concerned
about the influence of a single person. Whilst this can  What is the quality of this company’s governance,
indeed be a risk, the Investment Manager is of the view ownership structure and management?
that backing a talented, hard-working and ambitious  Are incentives and key performance indicators aligned
founder, whilst also ensuring that a strong and with the company’s strategy and the interests of
experienced board is in place to provide checks and shareholders?
balances, is the right course of action. So whilst many see
The questions asked differ from company to company;
this founder-led structure as a risk, the Investment
the type of questions poised to a bank would be quite
Manager sees an opportunity. Of course, the focus for the
different from those of a semiconductor manufacturing
Investment Manager is on choosing the right individual,
firm. Having considered the regional universe and peer
who will grow the undertaking equitably and sustainably,
group in which the company operates, an ESG score is
and who will treat all shareholders fairly.
assigned ranging from 1 to 5. This proprietary ESG score is
When it comes to small-cap investing, much of the box- applied to every stock within the Investment Manager’s
ticking approach to ESG undertaken in the public realm is investment universe.
neither accurate nor helpful when forming a view of the
relative merits of an investment. It is for this reason that the
Investment Manager focusses on an active investment
approach, coupled with deep due diligence and on-the-
ground research. Once invested, the Investment Manager
plays a role in engaging with management to improve
disclosure and support positive change.
abrdn Asia Focus plc 107
## ESG En a ement
### Continued
### The ESG Scoring System
After researching and analysing a company, and after meeting senior management, we allocate a company an ESG
score of between one and five. This score of one to five is applied across every stock covered globally. Examples of each
category and a small sample of the criteria used are detailed below:
1. Best in class 2. Leader 3. Average 4. Below average 5. Laggard
ESG considerations are ESG considerations ESG risks are considered Evidence of some Many financially
material part of the not market leading as a part of principal financially material material controversies
company’s core business controversies
Disclosure is good, but Severe governance
business strategy
not best in class Disclosure in line with Poor governance or concerns
Excellent disclosure regulatory requirements limited oversight of key
Governance is Poor treatment of
ESG issues
Makes opportunities generally very good Governance is generally minority shareholders
from strong ESG risk good but some minor Some issues in treating
management concerns minority shareholders
poorly
We joined the Net Zero Asset Management (NZAM)
### Climate Change
initiative to demonstrate our strong support for the global
Climate change is one of the most significant challenges
net zero 2050 goal. The core commitment is to support
of the 21st century and has big implications for investors.
the goal of net zero greenhouse gas (‘GHG’) emissions by
The energy transition is underway in many parts of the
2050, in line with global efforts to limit warming to 1.5°C
world, and policy changes, falling costs of renewable
(‘net zero emissions by 2050 or sooner’). It also commits to
energy, and a change in public perception are happening
support investing aligned with net zero emissions by 2050
at a rapid pace. Assessing the risks and opportunities of
or sooner.
climate change is a core part of the investment process. In
particular, we consider: The Company is focused on real-world decarbonisation
by investing in transition leaders and climate solutions
 Transition risks and opportunities. Governments can
rather than the fast removal of carbon intensive
take robust climate change mitigation action to reduce
companies from our portfolios. We engage with the
emissions and transition to a low-carbon economy. This
highest carbon-emitting companies across the portfolio
is reflected in targets, policies and regulation and can
through a focused priority watchlist, with a focus on clear
have a considerable impact on high-emitting
expectations and outcomes combined with time-bound
companies.
milestones.
 Physical risks and opportunities. Insufficient climate
change mitigation action will lead to more severe and
### Importance of Engagement
frequent physical damage. This results in financial
Engagement is an important part of our investment
implications, including damage to crops and
process: the Investment Manager sees engagement not
infrastructure and the need for physical adaptation
only as a right but as an obligation of investors, as owners
such as flood defences.
of companies. The Investment Manager engages actively
We believe that Climate scenario analysis provides a
and regularly with companies in which the companies
forward looking, quantitative assessment of the financial
invests or may become an investor, and believes that
impact of climate risks and opportunities on the value of
informed and constructive engagement helps to foster
assets under different climate pathways. As a result, we
better companies, enhancing the value of the Company’s
work in partnership with Planetrics to quantify the impact
investments. There are generally two core reasons for
of climate scenarios where a probability weighted view
engagement: to understand more about a company’s
based on a range of off the shelf and bespoke scenarios is
strategy and performance, or encourage best practice
taken. This allows us to model a quantitative financial
and drive change.
impact under 15 different climate risk scenarios at both
the stock level and at the Company level.
108 abrdn Asia Focus plc
## g g
Active engagement involves regular, candid ESG engagements are conducted with consideration of
communication with management teams (or boards of the 10 principles of the United Nations Global Compact
directors) of portfolio companies to discuss a broad range and companies are expected to meet fundamental
of ESG issues that are material to sustainable long-term responsibilities in the areas of human rights, labour, the
returns, either positively or negatively, including both risks environment and anti-corruption.
and opportunities. The Investment Manager’s focus is on
Engagement is not limited to a company’s management
the factors which it believes to have the greatest potential
team. It can include many other stakeholders such as
to enhance or undermine the investment case.
non-government agencies, industry and regulatory
Sometimes the Investment Manager is seeking more
bodies, as well as activists and the company’s customers
information, exchanging views on specific issues, and
and clients. During the period under review the breadth of
encouraging better disclosure; and at other times,
issues covered in ESG specific company engagements for
encouraging change (including either corporate strategy,
the Company covered Climate Change (including air
capital allocation, or climate change strategy).
quality and energy management), Environment (including Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Engagements cover a range of ESG issues, including but
waste and waste management, and supply chain
not limited to board composition, remuneration, audit,
management), Labour Management (including health
climate change, labour issues, human rights, bribery
and safety), Human Risk & Stakeholders, Corporate
and corruption.
Behaviour (including Practices and Processes) and
Corporate Governance.
In terms of resources, on-desk regional ESG specialists,
supported by the Investment Manager’s central ESG
team, work with the Asia Pacific equity team to provide
insight on ESG themes and sectors in local markets.
Furthermore, the abrdn Sustainability Institute was launched in September 2021. Bringing together sustainability experts
from across the firm, the Institute’s objectives are to deliver Asia Pacific-centric sustainability solutions and insights, build
an Asia Pacific sustainable investing knowledge community and contribute to progress in regional sustainable investing.
abrdn Asia Focus plc 109
## ESG En a ement
### Continued
### ESG Engagement
### Voting Activity
The Investment Manager regularly engages with The Investment Manager draws on expertise across desks
companies in which the Company invests. The below and throughout the firm to vote consistently in line with the
shows the engagements that have included ESG topics. abrdn voting policy. Time period referenced is preceding
This does not include positions the Investment Manager 12 months (i.e. 2H22 and 1H23):
has sold out of or are considering investing in. Below are
### the themes engaged on in 2H22 and 1H23. Our Voting Activity
Voting Summary Total

| Climate | How many meetings were you eligible to vote at? 82 |
| --- | --- |
| Environment | How many meetings did you vote at? 81 |
| Labour Management, | How many resolution were you eligible to vote on? 598 |

Diversity & Inclusion
Human Rights & What % of resolutions did you vote on for which you 98.5%
Stakeholders
were eligible?
Corporate Behaviour

|  | Of the resolutions on which you voted, what % did | 92% |
| --- | --- | --- |
| Corporate Governance | you vote with management? |  |
|  | Of the resolutions on which you voted, what % did | 6.6% |

you vote against management?
ESG Category % * Of the resolutions on which you voted, what % did 1.4%
you abstain from voting?
Climate 44.3
In what % of meeting, for which you did vote, did you 27.2%
Environment 29.1 vote at least once against management?
Labour Management, Diversity & Inclusion 38.0
Human Rights & Stakeholders 12.7
Corporate Behaviour 26.6
Corporate Governance 84.8
* a single meeting can have multiple topics
110 abrdn Asia Focus plc
## g g
## Investor Information
### Keeping You Informed Shareholder Enquiries
For internet users, detailed data on the Company, In the event of queries regarding their holdings of shares,
including price, performance information and a monthly lost certificates dividend payments, registered details, etc
fact sheet is available from the Company’s website shareholders holding their shares in the Company directly
(asia-focus.co.uk) and the TrustNet website should contact the registrars, Equiniti Limited, Aspect
(trustnet.com). Alternatively you can call 0808 500 0040 House, Spencer Road, Lancing West Sussex BN99 6DA Tel:
(free when dialling from a UK landline) for investment 0371 384 2416 Lines open 8:30am to 5:30pm (UK time),
company information. Monday to Friday, (excluding public holidays in England
and Wales). Calls may be recorded and monitored
You can also register for regular email updates by visiting
randomly for security and training purposes. Changes of
asia-focus.co.uk or by activating the QR Code below using
address must be notified to the registrars in writing.
the camera on your smart phone:
Any general enquiries about the Company should be
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
directed to the Company Secretary, abrdn Asia Focus plc,
1 George Street, Edinburgh EH2 2LL or by email
CEF.CoSec@abrdn.com.
If you have any questions about an investment held
through the abrdn Share Plan, ISA or Investment Plan for
Children, please telephone the Manager’s Customer
Services Department on 0808 500 0040. Alternatively,
email inv.trusts@abrdn.com or write to abrdn Investment
### abrdn Social Media Accounts Trusts, PO Box 11020, Chelmsford, Essex CM99 2DB.
Twitter: @abrdnTrusts
### Suitable for Retail/NMPI Status
LinkedIn: abrdn Investment Trusts
The Company’s securities are intended for investors
### Investor Warning primarily in the UK (including retail investors), professional-
The Board has been made aware by abrdn that some advised private clients and institutional investors who are
investors have received telephone calls from people wanting to benefit from the growth prospects of Asian
purporting to work for the Manager, or third parties, who smaller companies by investment in a relatively risk averse
have offered to buy their investment trust shares. These investment trust and who understand and are willing to
may be scams which attempt to gain personal accept the risks of exposure to equities. Investors should
information with which to commit identity fraud or could consider consulting a financial adviser who specialises in
be ‘boiler room’ scams where a payment from an investor advising on the acquisition of shares and other securities
is required to release the supposed payment for their before acquiring shares. Investors should be capable of
shares. These callers do not work for abrdn and any third evaluating the risks and merits of such an investment and
party making such offers has no link with abrdn. abrdn should have sufficient resources to bear any loss that
never makes these types of offers and does not ‘cold-call’ may result.
investors in this way. If investors have any doubt over the
The Company currently conducts its affairs so that its
veracity of a caller, they should not offer any personal
securities can be recommended by a financial adviser to
information, end the call and contact abrdn’s investor
ordinary retail investors in accordance with the Financial
services centre using the details provided below.
Conduct Authority’s (FCA) rules in relation to non-
mainstream pooled investments (NMPIs) and intends to
continue to do so for the foreseeable future. The
Company’s shares are excluded from the FCA’s
restrictions which apply to non-mainstream investment
products because they are shares in an investment trust.
### Key Information Document (“KID”)
The KID relating to the Company and published by the
Manager can be found in the ‘Literature Library’ section of
the Company’s website: asia-focus.co.uk.
abrdn Asia Focus plc 111
## Investor Information
### Continued
### How to invest in abrdn Asia Focus plc and The companies above are shown for illustrative purposes
### other abrdn managed investment trusts only. Other platform providers are available. The links
above direct you to external websites operated by each
A range of leading investment platforms and share
platform provider. abrdn is not responsible for the content
dealing services let you buy and sell abrdn-managed
and information on these third-party sites.
investment trusts including abrdn Asia Focus plc.
Many of these platforms operate on an ‘execution-only’ Flexibility
basis. This means they can carry out your instruction to
Many investment platform providers will allow you to buy
buy or sell a particular investment trust. But they may not
and hold abrdn Investment Trust shares within an
be able to advise on suitable investments for you. If you
Individual Savings Account (ISA), Junior ISA or Self Invested
require advice, please speak to a qualified financial
Personal Pension (SIPP), all of which have potential tax
adviser (see below).
advantages. Most will also allow you to invest on both a
lump sum and regular savings basis.
A note about the abrdn Investment Trust Savings Plans
(the ‘Plans’)
Costs and service
In June 2023, abrdn notified existing investors in the abrdn
It is important to choose the right platform for your needs,
Investment Trusts ISA, Share Plan and Investment Plan for
so take time to research what each platform offers before
Children that these plans will be closing in December 2023.
you make your decision, as well as considering charges.
The Plans are no longer open to new investors. If you are
When it comes to charges, some platforms have flat fee
an existing investor in the Plans and have any queries,
structures while others levy percentage-based charges.
please contact abrdn’s Investor Services department on
Typically, you will also pay a fee every time you buy and
0808 500 4000 or 00 44 1268 448 222 from overseas. The
sell shares, so you need to bear in mind these transaction
lines are open from 9am to 5pm Monday to Friday. Call
costs if you are trading frequently. There may also be
charges will vary. Alternatively, please contact abrdn by
additional charges for ISA and SIPP investments.
email at inv.trusts@abrdn.com. Email is not a secure form
of communication so you should not send any personal or
Can I exercise my voting rights if I hold my shares through an
sensitive information.
investment platform?
Yes, you should be able to exercise your right to vote by
### Platform providers
contacting your platform provider. Procedures differ, but
Platforms featuring abrdn managed investment trusts
some platforms will automatically alert you when new
include:
statutory documents are available and then allow you
interactive investor: to vote online. Others will require you to contact them to
www.ii.co.uk/investment-trusts vote. Your chosen platform provider will provide
AJ Bell: further guidance.
www.ajbell.co.uk/markets/investment-trusts
### Discretionary Private Client Stockbrokers
Barclays Smart Investor:
www.barclays.co.uk/smart-investor If you have a large sum to invest, you may wish to contact
a discretionary private client stockbroker. They can
Charles Stanley Direct:
manage your entire portfolio of shares and will advise you
www.charles-stanley-direct.co.uk
on your investments. To find a private client stockbroker
Fidelity:
visit The Personal Investment Management and Financial
www.fidelity.co.uk
Advice Association at pimfa.co.uk.
Halifax:
www.halifax.co.uk/investing Independent Financial Advisers
Hargreaves Lansdown: To find an adviser who recommends on investment trusts,
www.hl.co.uk/shares/investment-trusts visit unbiased.co.uk.
112 abrdn Asia Focus plc
Regulation of Stockbrokers
Before approaching a stockbroker, always check that
they are regulated by the Financial Conduct Authority:
Tel: 0800 111 6768 or at https://register.fca.org.uk/ or
email: register@fca.org.uk
### Getting advice
abrdn recommends that you seek financial advice prior to
making an investment decision. If you do not currently
have a financial adviser, details of authorised financial
advisers in your area can be found atpimfa.co.uk or
unbiased.co.uk. You will pay a fee for advisory services.
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
### Note
Please remember that past performance is not a guide to
the future. Stock market and currency movements may
cause the value of shares and the income from them to
fall as well as rise and investors may not get back the
amount they originally invested. As with all equity
investments, the value of investment trusts purchased will
immediately be reduced by the difference between the
buying and selling prices of the shares, the market maker’s
spread. Investors should further bear in mind that the
value of any tax relief will depend on the individual
circumstances of the investor and that tax rates and
reliefs, as well as the tax treatment of ISAs may be
changed by future legislation.
The information on pages 111 to 113 has been approved
for the purposes of Section 21 of the Financial Services
and Markets Act 2000 (as amended by the Financial
Services Act 2012) by abrdn Investments Limited which is
authorised and regulated by the Financial Conduct
Authority
abrdn Asia Focus plc 113
## Alternative Investment Fund Managers Directive
## Disclosures Unaudited
abrdn and the Company are required to make certain disclosures available to investors in accordance with the
Alternative Investment Fund Managers Directive ('AIFMD'). Those disclosures that are required to be made pre-
investment are included within a pre-investment disclosure document ('PIDD') which can be found on the Company’s
website asia-focus.co.uk. There have been no material changes to the disclosures contained within the PIDD since
November 2022.
The periodic disclosures as required under the AIFMD to investors are made below:
 Information on the investment strategy, geographic and sector investment focus and principal stock exposures are
included in the Strategic Report.
 None of the Company’s assets are subject to special arrangements arising from their illiquid nature.
 The Strategic Report, note 19 to the Financial Statements and the PIDD together set out the risk profile and risk
management systems in place. There have been no changes to the risk management systems in place in the period
under review and no breaches of any of the risk limits set, with no breach expected.
 There are no new arrangements for managing the liquidity of the Company or any material changes to the liquidity
management systems and procedures employed by aFML.
 All authorised Alternative Investment Fund Managers are required to comply with the AIFMD Remuneration Code. In
accordance with the Remuneration Code, the Company’s AIFM remuneration policy is available from the Company
Secretaries, abrdn Holdings Limited on request (see contact details on page 111) and the numerical remuneration in
the disclosures in respect of the AIFM’s reporting period for the year ended 31 December 2022 are available on the
Company’s website.
### Leverage
The table below sets out the current maximum permitted limit and actual level of leverage for the Company:
Gross method Commitment method
Maximum level of leverage 2.50:1 2.00:1
Actual level at 31 July 2023 1.23:1 1.24:1
There have been no breaches of the maximum level during the period and no changes to the maximum level of
leverage employed by the Company. There is no right of re-use of collateral or any guarantees granted under the
leveraging arrangement. Changes to the information contained either within this Annual Report or the PIDD in relation to
any special arrangements in place, the maximum level of leverage which aFML may employ on behalf of the Company;
the right of use of collateral or any guarantee granted under any leveraging arrangement; or any change to the position
in relation to any discharge of liability by the Depositary will be notified via a regulatory news service without undue delay
in accordance with the AIFMD.
The above information above has been approved for the purposes of Section 21 of the Financial Services and Markets
Act 2000 (as amended by the Financial Services Act 2012) by abrdn Fund Managers Limited which is authorised and
regulated by the Financial Conduct Authority
114 abrdn Asia Focus plc
## ( )
## General
### The AGM will be held at 11:00 a.m. on 5 December 2023 in
### London at which the usual formal business will be proposed.
abrdn Asia Focus plc 115
# Notice of Annual General Meeting

Notice is hereby given that the twenty-eighth Annual General Meeting of abrdn Asia Focus plc will be held at Wailascepaco, 15 Artillery Lane, London, E1 7HA, at 11:00 a.m. on 5 December 2023 for the following purposes:

To consider and if thought fit, pass the following Resolutions of which Resolutions 1 to 10 will be proposed as Ordinary Resolutions and Resolutions 11 to 13 as Special Resolutions:

## Ordinary Business

1. To receive and adopt the Directors' Report and financial statements for the year ended 31 July 2023, together with the auditors' report thereon.
2. To approve the Directors' Remuneration Report for the year ended 31 July 2023 (other than the Directors' Remuneration Policy).
3. To approve the Directors' Remuneration Policy.
4. To approve the Company's Dividend Policy to pay four interim dividends per year.
5. To re-elect Ms C Black as a Director.
6. To re-elect Mr K Shanmuganathan as a Director.
7. To re-elect Mr L Cooper as a Director.
8. To re-elect Mr A Finn as a Director.
9. To re-appoint PricewaterhouseCoopers LLP as auditors and to authorise the Directors to determine their remuneration.

## Special Business

10. THAT in substitution for all existing powers the Directors of the Company be generally and unconditionally authorised for the purposes of Section 551 of the Companies Act 2006 (the "Act"), to allot shares in the Company, and to grant rights ("Relevant Rights") to subscribe for, or to convert any security into, shares in the Company:

(a) up to an aggregate nominal amount of £2,597,716; and

(b) up to a further aggregate nominal amount of £2,597,716 in connection with an offer made by means of a negotiable document to (a) all holders of Ordinary shares of 5p each in the capital of the Company ("Ordinary shares") in proportion (as nearly as may be) to the respective numbers of such Ordinary shares held by them and (b) to holders of other equity securities required by the rights of those securities (but subject to such exclusions, limits or restrictions or other arrangements as the Directors of the Company may consider necessary or appropriate to deal with treasury shares, fractional entitlements, record dates or legal, regulatory or practical problems in or under the laws of any territory, or the requirements of any regulatory body or any stock exchange in any territory or otherwise howsoever); such authorisation to expire at the conclusion of the next Annual General Meeting of the Company to be held in 2024 unless previously renewed, revoked or varied by the Company in general meeting, save that the Company may at any time before the expiry of this authorisation make an offer or enter into an agreement which would or might require shares to be allotted or relevant rights to be granted after the expiry of this authorisation and the Directors of the Company may allot shares or grant relevant rights in pursuance of any such offer or agreement as if the authorisation conferred hereby had not expired.

11. THAT subject to the passing of Resolution numbered 10 above and in substitution for all existing powers the Directors be empowered pursuant to Sections 570 and 573 of the Companies Act 2006 (the "Act") to allot equity securities (within the meaning of Section 560 (1), (2) and (3) of the Act) either pursuant to the authorisation under Section 551 of the Act as conferred by Resolution 10 above or by way of a sale of treasury shares, in each case for cash as if Section 561(1) of the Act did not apply to such allotment, provided that this power shall be limited to:

116

abrdn Asia Focus plc
i. The allotment of equity securities (otherwise than pursuant to sub-paragraph (b) below) up to an aggregate nominal amount of £779,314 which are, or are to be, wholly paid up in cash, at a price representing a premium to the net asset value per share at allotment, as determined by the Directors, and do not exceed up to 10% of the issued share capital (as at the date of the Annual General Meeting convened by this notice); and
ii. the allotment of equity securities in connection with an offer to (a) all holders of Ordinary shares of 5p each in the capital of the Company in proportion (as nearly as may be) to the respective numbers of Ordinary shares held by them and (b) to holders of other equity securities as required by the rights of those securities (but subject in either case to such exclusions limits or restrictions or other arrangements as the Directors may consider necessary or appropriate to deal with treasury shares, fractional entitlements, record dates, legal, regulatory or practical problems in or under the laws of, or requirements of, any regulatory body or any stock exchange in any territory or otherwise howsoever) at a price representing a premium to the net asset value per share at allotment, as determined by the Directors; and

such power shall expire at the conclusion of the next Annual General Meeting of the Company to be held in 2024, but so that this power shall enable the Company to make offers or agreements before such expiry which would or might require equity securities to be allotted after such expiry and the Directors may do so as if such expiry had not occurred.

12. THAT, the Company be generally and unconditionally authorised in accordance with Section 701 of the Companies Act 2006 (the "Act") to make market purchases (within the meaning of Section 693(4) of the Act) of Ordinary shares of 5p each in the capital of the Company ("Ordinary shares"), and to cancel or hold in treasury such shares provided that:

i. the maximum number of Ordinary shares hereby authorised to be purchased is 14.99% of the Ordinary shares in issue as at the date of the passing of this Resolution 12;
ii. the minimum price which may be paid for an Ordinary share is 5p;
iii. the maximum price (exclusive of expenses) which may be paid for an Ordinary share shall not be more than the higher of (i) an amount equal to 5% above the average of the middle market quotations for an Ordinary share taken from the London Stock Exchange Daily Official List for the five business days immediately preceding the date on which the Ordinary share is contracted to be purchased; and (ii) the higher of the price of the last independent trade and the current highest independent bid on the trading venue where the purchase is carried out;
iv. any purchase of shares will be made in the market for cash at prices below the prevailing net asset value per share (as determined by the Directors);
v. the authority hereby conferred shall expire at the conclusion of the Annual General Meeting of the Company to be held in 2024 unless such authority is renewed, revoked or varied prior to such time by the Company in general meeting; and
vi. the Company may make a contract to purchase Ordinary shares under the authority hereby conferred prior to the expiry of such authority which will or may be executed wholly or partly after the expiration of such authority and may make a purchase of Ordinary shares pursuant to any such contract.

13. THAT a general meeting other than an Annual General Meeting may be called on not less than 14 days' notice.

By order of the Board

abrdn Holdings Limited

Company Secretary

19 October 2023

Registered Office

280 Bishopsgate, London EC2M 4AG

abrdn Asia Focus plc

117
## Notice of Annual General Meetin
### Continued
### Notes
i. In accordance with Section 311A of the Companies Act 2006, the contents of this Notice of Meeting, details of the total number of
shares in respect of which members are entitled to exercise voting rights at the AGM and, if applicable, any members’ statements,
members’ resolutions or members’ matters of business received by the Company after the date of this notice will be available on
the Company’s website asia-focus.co.uk.
ii. As a member, you are entitled to appoint a proxy or proxies to exercise all or any of your rights to attend, speak and vote at the
Meeting. A proxy need not be a member of the Company. You may appoint more than one proxy provided each proxy is
appointed to exercise rights attached to different shares. You may not appoint more than one proxy to exercise the rights
attached to any one share. A form of proxy is enclosed.
iii. To be valid, any form of proxy or other instrument of proxy and any power of attorney or other authority, if any, under which they
are signed or a notarially certified copy of that power of attorney or authority should be sent to the Company’s registrars so as to
arrive not less than 48 hours before the time fixed for the meeting. The return of a completed form of proxy or other instrument of
proxy will not prevent you attending the Meeting and voting in person if you wish to do so.
iv. The right to vote at the meeting is determined by reference to the Company’s Register of Members as at 6.30 p.m. on 1 December
2023 or, if this meeting is adjourned, at 6.30 p.m. on the day two business days prior to the adjourned meeting. Changes to the
entries on that Register after that time shall be disregarded in determining the rights of any member to attend and vote at the
meeting.
v. As a member you have the right to put questions at the meeting relating to the business being dealt with at the meeting.
vi. CREST members who wish to appoint a proxy or proxies by utilising the CREST electronic proxy appointment service may do so for
the Meeting and any adjournment(s) thereof by utilising the procedures described in the CREST Manual. CREST Personal Members
or other CREST sponsored members, and those CREST members who have appointed a voting service provider(s), should refer to
their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.
vii. In order for a proxy appointment made by means of CREST to be valid, the appropriate CREST message (a “CREST Proxy
Instruction”) must be properly authenticated in accordance with Euroclear UK & Ireland Limited’s (“EUI”) specifications and must
contain the information required for such instructions, as described in the CREST Manual which can be viewed at euroclear.com.
The message must be transmitted so as to be received by the issuer’s agent (ID RA19) by the latest time(s) for receipt of proxy
appointments specified in the notice of Meeting. For this purpose, the time of receipt will be taken to be the time (as determined by
the timestamp applied to the message by the CREST Applications Host) from which the issuer’s agent is able to retrieve the
message by enquiry to CREST in the manner prescribed by CREST.
viii. CREST members and, where applicable, their CREST sponsors or voting service providers should note that EUI does not make
available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in
relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST
member is a CREST personal member or sponsored member or has appointed a voting service provider(s), to procure that his
CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by
means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST
sponsors or voting service providers are referred, in particular, to those sections of the CREST Manual concerning practical
limitations of the CREST system and timings.
ix. You may also submit your proxy votes via the internet. You can do so by visiting www.sharevote.co.uk. You will require your voting
ID, task ID and Shareholder Reference Number. This information can be found under your name on your form of proxy.
Alternatively, shareholders who have already registered with Equiniti Registrars’ online portfolio service, Shareview, can appo int
their proxy electronically by logging on to their portfolio at www.shareview.co.uk using their user ID and password. Once logged in,
click “view” on the “My Investments” page. Click on the link to vote and follow the on screen instructions.
x. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the
Uncertificated Securities Regulations 2001.
118 abrdn Asia Focus plc
## g
xi. Any person to whom this notice is sent who is a person nominated under Section 146 of the Companies Act 2006 to enjoy information rights (a "Nominated Person") may, under an agreement between them and the member by whom they were nominated, have a right to be appointed (or to have someone else appointed) as a proxy for the Meeting. If a Nominated Person has no such proxy appointment right or does not wish to exercise it, they may, under any such agreement, have a right to give instructions to the member as to the exercise of voting rights. Any person holding 3% of the total voting rights in the Company who appoints a person other than the Chair as his or her proxy(ies) will need to ensure that both he or she and such proxy(ies) comply with their respective disclosure obligations under the UK Disclosure and Transparency Rules.

xii. The statement of the rights of members in relation to the appointment of proxies in paragraphs (ii) and (iii) above does not apply to Nominated Persons. The rights described in these paragraphs can only be exercised by members of the Company.

xiii. As at close of business on 19 October 2023 (being the latest practicable date prior to publication of this document), the Company's issued share capital comprised 155,862,978 Ordinary shares of 5-pence each and there were a further 52,839,590 shares held in treasury. Each Ordinary share carries the right to one vote at a general meeting of the Company and therefore the total number of voting rights in the Company as at close of business on 19 October 2023 is 155,862,978. Treasury shares represent 25.1% of the total issued Ordinary share capital (inclusive of treasury shares).

xiv. No Director has a service contract with the Company, however, copies of Directors' letters of appointment will be available for inspection for at least 15 minutes prior to the meeting and during the meeting.

xv. Under Section 338 of the Companies Act 2006, members may require the Company to give, to members of the Company entitled to receive this Notice of Meeting, notice of a resolution which may properly be moved and is intended to be moved at the Meeting. Under Section 338A of that Act, members may request the Company to include in the business to be dealt with at the Meeting any matter (other than a proposed resolution) which may be properly included in the business.

xvi. Members should note that it is possible that, pursuant to requests made by the members of the Company under Section 527 of the Companies Act 2006, the Company may be required to publish on a website a statement setting out any matter relating to: (i) the audit of the Company's Annual Report and financial statements (including the auditors' report and the conduct of the audit) that are to be laid out before the Meeting; or (ii) any circumstances connected with an auditor of the Company ceasing to hold office since the previous meeting at which the Annual Report and financial statements was laid in accordance with Section 437 of the Companies Act 2006. The Company may not require the members requesting any such website publication to pay its expenses in complying with Sections 527 or 528 of the Companies Act 2006. Where the Company is required to place a statement on a website under Section 527 of the Companies Act 2006, it must forward the statement to the Company's auditors not later than the time when it makes the statement available on the website. The business which may be dealt with at the Meeting includes any statement that the Company has been required under Section 527 of the Companies Act 2006 to publish on the website.

xvii. Pursuant to Section 319A of the Companies Act 2006, the Company must cause to be answered at the AGM any question relating to the business being dealt with at the AGM which is put by a member attending the meeting, except in certain circumstances, including if it is undesirable in the interests of the Company or the good order of the meeting that the question be answered or if to do so would involve the disclosure of confidential information.

xviii. You may not use any electronic address provided either in this Notice of Meeting or any related documents (including the Form of Proxy) to communicate with the Company for any purposes other than those expressly stated.

xix. There are special arrangements for holders of shares through the abrdn Investment Plan for Children, abrdn Share Plan and abrdn Investment Trusts ISA ("Plan Participants"). These are explained in the separate 'Letter of Direction' which Plan Participants will have received with this Annual Reports.

abrdn Asia Focus plc

119
# Glossary of Terms and Definitions

## **abrdn Asia or the Investment Manager**

abrdn Asia Limited is a wholly owned subsidiary of abrdn plc and acts as the Company's investment manager

## **abrdn plc**

abrdn plc was formed by the merger of Aberdeen Asset Management PLC and Standard Life plc on 14 August 2017

## **abrdn Group**

the abrdn group of companies

## **Active Share**

Active Share is a measure of the percentage of stock holdings in the portfolio that differs from the benchmark index

## **aFML or Manager**

abrdn Fund Managers Limited

## **AIC**

Association of Investment Companies

## **AIFM**

the alternative investment fund manager, being aFML

## **AIFMD**

The Alternative Investment Fund Managers Directive

## **Asset Cover**

The value of a company's net assets available to repay a certain security. Asset cover is usually expressed as a multiple and calculated by dividing the net assets available by the amount required to repay the specific security

## **CULS 2025**

The £36.6 million nominal of 2.25% Convertible Unsecured Loan Stock 2025 issued on 29 May 2018

## **CULS Conversion Date**

The CULS is convertible at any time during the periods of 28 days ending on 30 November and 31 May in each year from November 2018 to May 2025 (each such period and any other period during which Conversion Rights may be exercised being a "Conversion Period") conversions requests are to be received by 5.00 p.m. on the last day of the relevant Conversion Period (each such last day being a "Conversion Date" and the Conversion Date falling on 31 May 2025 or Final Repayment Date being the "Final Conversion Date")

## **CULS Conversion Price**

The CULS is convertible semi-annually on the Conversion Date on the basis of 293.0p nominal of CULS for one Ordinary share of 5p (prior to the five for one share split on 4 February 2022 the conversion was based upon 1465.0p of nominal). The Conversion Price was originally calculated based upon a 20% premium to the unaudited NAV per Ordinary share of 25p (including income) on 18 May 2018, rounded down to the nearest 5.0p

## **Dilution**

Dilution is the potential impact of the conversion of CULS to Ordinary shares on the net asset value and share price of the Company

## **Discount**

The amount by which the market price per share of an investment trust is lower than the net asset value per share.

The discount is normally expressed as a percentage of the NAV per share

## **Dividend Cover**

Earnings per share divided by dividends per share expressed as a ratio

## **Dividend Yield**

The annual dividend expressed as a percentage of the share price

## **FRC**

Financial Reporting Council

120

abrdn Asia Focus plc
### Leverage Prior Charges
For the purposes of the Alternative Investment Fund The name given to all borrowings including CULS, long and
Managers (AIFM) Directive, leverage is any method which short term loans and overdrafts that are to be used for
increases the Company’s exposure, including the investment purposes, reciprocal foreign currency loans,
borrowing of cash and the use of derivatives. It is currency facilities to the extent that they are drawn down,
expressed as a ratio between the Company’s exposure index-linked securities, and all types of preference or
and its net asset value and can be calculated on a gross preferred capital and the income shares of split capital
and a commitment method. Under the gross method, trusts, irrespective of the time until repayment
exposure represents the sum of the Company’s positions
### after the deduction of sterling cash balances, without Total Assets
taking into account any hedging and netting Total assets less current liabilities (before deducting prior
arrangements. Under the commitment method, exposure charges as defined above)
is calculated without the deduction of sterling cash Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
balances and after certain hedging and netting positions
### Total Return
are offset against each other
Total return involves reinvesting the net dividend in the
month that the share price goes ex-dividend. The NAV
### Net Asset Value or NAV
total return (including diluted) involves investing the same
The value of total assets less liabilities. Liabilities for this net dividend in the NAV of the trust on the date to which
purpose include current and long-term liabilities. The net that dividend was earned
asset value divided by the number of shares in issue
produces the net asset value per share
### Net Gearing
Net gearing is calculated by dividing total assets (as
defined below) less cash or cash equivalents by
shareholders’ funds expressed as a percentage
### Ongoing Charges
Ratio of expenses as percentage of average daily
shareholders’ funds calculated as per the industry
standard
### PIDD
The pre-investment disclosure document made available
by the AIFM in relation to the Company
### Premium
The amount by which the market price per share of an
investment trust exceeds the net asset value per share.
The premium is normally expressed as a percentage of
the net asset value per share
abrdn Asia Focus plc 121
## Your Company’s Share Capital History
### Issued Share Capital at 31 July 2023
### 156,457,978 52,244,590
Ordinary shares of 5p (excluding treasury shares) Ordinary shares held in treasury
### Capital History
19 October 1995 Year ended 31 July 2017
35,000,000 Ordinary shares of 25p each placed at 100p with 1,091,750 shares purchased for treasury at a discount to NAV;
7,000,000 Warrants attaching, each conferring the right to 2,595 new Ordinary shares issued following conversion of 21,594
subscribe for one Ordinary share of 25p at 100p units of CULS in December 2016; 3,546 new Ordinary shares
issued following conversion of 29,473 units of CULS in June 2017
Year ended 31 July 2010
502,069 shares purchased for treasury at prices ranging from Year ended 31 July 2018
296.7p to 455.0p and 442,698 Ordinary shares issued following the 2,137,138 shares purchased for treasury at a discount to NAV;
exercise of Warrants 323,835 new Ordinary shares issued following conversion of
2,687,937 units of CULS in December 2017. £37 million nominal of
Year ended 31 July 2011
2.25% Convertible Unsecured Loan Stock 2025 issued at 100p per
3,823,595 shares issued following the final exercise of Warrants
unit and 2019 CULS redeemed and/or converted into Ordinary
18 May 2012 shares on 29 May 2018
£35 million nominal of Convertible Unsecured Loan Stock 2019 Year ended 31 July 2019
(“CULS”) issued at 100p per unit
1,302,650 shares purchased for treasury at a discount to NAV;
Year ended 31 July 2013 2,348 new Ordinary shares issued following conversion of 34,482
units of CULS in December 2018; 1,379 new Ordinary shares
23,372 new shares issued following the conversion of 194,182
issued following conversion of 20,286 units of CULS in June 2019.
units of CULS in December 2012 and 182,787 new Ordinary
shares issued following the conversion of 1,517,404 units of CULS Year ended 31 July 2020
in May 2013
1,484,256 shares purchased for treasury at a discount to NAV;
Year ended 31 July 2013 16,302 new Ordinary shares issued following conversion of
238,951 units of CULS in December 2019; 814 new Ordinary
2,605,000 shares issued for cash and sold from treasury at a
shares issued following conversion of 12,050 units of CULS in
premium to NAV
June 2020.
Year ended 31 July 2014
Year ended 31 July 2021
300,000 shares issued for cash at a premium to NAV; 23,228 new
1,055,000 shares purchased for treasury at a discount to NAV;
Ordinary shares issued following the conversion of 192,896 units
1,110 new Ordinary shares issued following conversion of 16,359
of CULS in December 2013; and, 2,210 new Ordinary shares
units of CULS in December 2020; 1,365 new Ordinary shares
issued following the conversion of 18,397 units of CULS in
issued following conversion of 20,117 units of CULS in June 2021.
May 2014
Year ended 31 July 2022
Year ended 31 July 2015
935 new shares issued following conversion of 13,764 units of
142,000 shares purchased for treasury at a discount to NAV; 3,510
CULS in December 2021; on 4 February 2022 a five for one Share
new Ordinary shares issued following conversion of 29,188 units
Split was implemented and the CUL; 536 new Ordinary shares
of CULS in December 2014; 573 new Ordinary shares issued
issued following conversion of 1,579 units of CULS in June 2022
following conversion of 4,790 units of CULS in June 2015
Year ended 31 July 2023
Year ended 31 July 2016
2,059,834 shares purchased for treasury at a discount to NAV; 137 500,000 shares purchased for treasury at a discount to NAV; 2,158
new Ordinary shares issued following conversion of 1,137 units of new Ordinary shares issued following conversion of 6,334 units of
CULS in December 2015; 141 new Ordinary shares issued CULS in December 2022; 2,189 new Ordinary shares issued
following conversion of 1,176 units of CULS in June 2016 following conversion of 6,419 units of CULS in June 2023
122 abrdn Asia Focus plc
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
abrdn Asia Focus plc 123
124 abrdn Asia Focus plc
# Corporate Information

Directors

Krishna Shanmuganathan, Chair
Charlotte Black
Lindsay Cooper
The Earl of Antrim
Alex Finn

Registered in England as an
Investment Company

Registration Number 03106339

Manager

abrdn Asia Limited
21 Church Street
#01-01 Capital Square Two
Singapore 049480

Alternative Investment Fund Manager*

abrdn Fund Managers Limited
280 Bishopsgate
London EC2M 4AG
(Authorised and regulated by the Financial
Conduct Authority)
(* appointed as required by EU Directive 2011/61/EU)

Secretaries and Registered Office

abrdn Holdings Limited
280 Bishopsgate
London EC2M 4AG

Registrars

Equinti
Aspect House
Spencer Road
Lancing
West Sussex BN99 6DA

Telephone enquiries +44 (0) 371 384 2416
Lines open 8.30 a.m. to 5.30 p.m., Monday to Friday
(excluding public holidays in England & Wales)
shareview.co.uk

Stockbrokers

Panmure Gordon & Co
1 New Change
London EC4M 9AF

Solicitors

Dentons UK and Middle East LLP
Quartermile One
15 Lauriston Place
Edinburgh EH3 9EP

Independent Auditor

PricewaterhouseCoopers LLP
Atria One
144 Morrison Street
Edinburgh EH3 8EX

CULS Trustee

The Law Debenture Corporation p.l.c.
Fifth Floor
100 Wood Street
London EC2V 7EX

Depository

BNP Paribas Trust Corporation UK Limited
10 Harewood Avenue
London NW1 6AA

Website

asia-focus.co.uk

Email

asia.focus@abrdn.com

Foreign Account Tax Compliance Act

("FATCA") IRS Registration Number ("GIIN"):

SITCFT.99999.SL.826

Legal Entity Identifier

549300DF82P1J92CQY70

abrdn Asia Focus plc

125
### The Company
The Company is an investment trust and its Ordinary shares and Convertible Unsecured Loan Stock (“CULS”) are listed
on the premium segment of the London Stock Exchange. The Company aims to attract long-term private and
institutional investors wanting to benefit from the growth prospects of Asia’s smaller companies.
### Investment Objective
The Company aims to maximise total return to shareholders over the long term from a portfolio made up predominantly
of quoted smaller companies in the economies of Asia excluding Japan. (On 27 January 2022 shareholders approved an
amended investment objective.)
### Five-Year Performance Linked Tender
On 27 January 2022 shareholders approved the introduction of a performance-linked tender offer, which provides that,
in the event of underperformance of the NAV per Share versus the MSCI AC Asia ex Japan Small Cap Index over a five-
year period commencing 1 August 2021, Shareholders will be offered the opportunity to realise a proportion of their
holding for cash at a level close to NAV less costs of the tender offer. The tender offer would be capped at a maximum of
25% of the issued share capital of the Company at that time.
### Comparative Index
From 1 August 2021 the Manager has utilised the MSCI AC Asia ex Japan Small Cap Index (currency adjusted) as well as
peer group comparisons for Board reporting. For periods prior to 1 August 2021, a composite index is used comprising
the MSCI AC Asia Pacific ex Japan Small Cap Index (currency adjusted) up to 31 July 2021 and the MSCI AC Asia ex
Japan Small Cap Index (currency adjusted) thereafter. It is likely that performance will diverge, possibly quite
dramatically in either direction, from the comparative index. The Manager seeks to minimise risk by using in-depth
research and does not see divergence from an index as risk.
### Investment Manager and Alternate Investment Fund Manager
The Company’s Alternative Investment Fund Manager, appointed as required by EU Directive 2011/61/EU, is abrdn Fund
Managers Limited (“aFML”) which is authorised and regulated by the Financial Conduct Authority. Day to day
management of the portfolio is delegated to abrdn Asia Limited (“abrdn Asia”, the “Manager” or the “Investment
Manager”). aFML and abrdn Asia are wholly owned subsidiaries of abrdn plc (previously known as Standard Life
Aberdeen plc).
## abrdn Asia Focus plc
### A fundamental, high conviction portfolio of well-researched Asian small caps
### Annual Report 31 July 2023
For more information visit
## asia-focus.co.uk
## asia-focus.co.uk