Annual Financial Report

abrdn Asia Focus plc

20 October 2023

ABRDN ASIA FOCUS PLC

Legal Entity Identifier (LEI): 5493000FBZP1J92OQY70

ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 31 JULY 2023

· Net Asset Value (total return): +7.6% compared to the Company's benchmark return, the MSCI AC Asia ex-Japan Small Cap Index, of +8.0%;

· Share price (total return basis): +7.3%;

· Since inception (1995):

o Net Asset Value: +2283.6%;

o Share price: +2158.4%;

o Benchmark return, the MSCI AC Asia ex-Japan Small Cap Index: +261.3%.

· Dividends: Dividends totalling 6.41p (2022 - Ordinary dividend 6.4p) have been paid, with a further special dividend of 2.25p, bringing the total distribution for the year to 8.66p (2022 - 8.0p);

· AIC ISA millionaire: abrdn Asia Focus is one of the top 5 companies that would have made investors £1,000,000 if they had invested their full isa allowance from 1999 to 2023

· Succession planning of investment managers confirmed: Hugh Young has confirmed he will be retiring on 31 December 2023. abrdn Asia Focus's management remains in the experienced hands of Flavia Cheong, abrdn's Head of Equities, Asia Pacific, Gabriel Sacks and Xin-Yao Ng.

Performance Highlights

Net asset value total return (diluted)^AB			Net asset value per share (diluted)
+7.6%			308.9p
2022	-2.0%		2022		295.3p

Net asset value total return since inception (diluted)^AB			Annualised Net asset value total return since inception (diluted)^AB
+2283.6%			+12.1%
2022		+2115.6%	2022	+12.3%

Share price total return^A			Share price
+7.3%			264.0p
2022	-1.7%		2022		254.0p

MSCI AC Asia ex Japan Small Cap Index total return^C			Discount to net asset value^AB
+8.0%			14.5%
2022	-5.1%		2022		14.0%

Ongoing charges ratio^A			Dividends per share^D
0.92%			8.66p
2022	0.88%		2022		8.00p
^A Alternative Performance Measure (see definition below).
^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).

Strategic Report

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 below.

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 initiation), allowing your Manager greater flexibility in picking companies in larger markets such as China.

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 Flavia Cheong, abrdn'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.

I can now confirm that Hugh will be retiring on 31 December 2023, the same point at which he retires from the Manager. Hugh has worked tirelessly on behalf of the Company since its launch and, both personally and on behalf of the Board, I would like to thank him and wish him the very best for his well-earned retirement. The cumulative long term performance disclosed on page 27 of the published Annual Report and Financial Statements for the year ended 31 July 2023 is testament to Hugh's skill, dedication and methodology that he has handed down to the management team over the years. While Hugh leaves us in good hands with a high-quality team across Asia (over 40 investment personnel across six countries) continuing the vital on-the-ground research as part of your Company's investment process, he will be much missed.

I know Hugh still views Asia's rapidly developing economies as providing a fertile ground for smaller companies. Your Manager continues to explore opportunities across the region to produce a genuinely diversified portfolio not reliant on any one market, looking for businesses with strong balance sheets, exceptional business models and demonstrating resilience to macro concerns.

Responsible Investment

Your Manager has long been at the forefront of including environmental, social and governance assessment in their investment research. Whilst your Company is not a 'sustainable fund', we have long acknowledged that the best companies are sustainable companies, and that is very much your Company's investment philosophy. Although the portfolio's MSCI ESG rating of 'BB' is in line with that of the benchmark it is pleasing to note that the Company's portfolio Economic Emission Intensity is only 13.6% of the benchmark. Further detailed information can be found in the ESG report on page 106 of the published Annual Report and Financial Statements for the year ended 31 July 2023.

Active engagement with your investee companies is also a hallmark of your Manager's long experience of investing in smaller companies in Asia. You can read more detail on company-level engagement and responsible investing on page 37 of the published Annual Report and Financial Statements for the year ended 31 July 2023.

The task force on climate-related financial disclosures (referred to as "TCFD") is now a global standard for reporting climate risks and opportunities. As a listed investment company, the Company is not subject to the FCA Listing Rule requirement to comply with TCFD reporting. However, the Board is a keen supporter of the ambitions of TCFD, as it believes it will improve disclosure of climate related risks. This in turn will help the Investment Manager and other stakeholders better assess the risks which will support sound investment decisions. Your Manager is subject to mandatory requirements to report on the Company as one of its products and the first abrdn Asia Focus plc TCFD Report, for the year ended 31 December 2022, is available under the 'Literature' section at asia-focus.co.uk.

Board Succession

As I indicated at the half-year stage, as part of the Board's succession plan, Randal McDonnell, the Earl of Antrim, will be stepping down at this year's AGM having completed his service. I'd like to thank Randal for his service to the Company. It has been a pleasure to have him on the Board and his wise contributions will be much missed.

Following a review of the Board's skills, background and experience, and with the support of Fletcher Jones, an independent specialist investment trust recruitment consultant, I am pleased to announce the appointment of Lucy Macdonald as his replacement who will be joining the Board immediately following the close of business of the AGM on 5 December 2023. Lucy has enjoyed a successful career in asset management and was, until 2020, managing director, CIO global equities at Allianz Global Investors. Lucy will bring significant investment experience to the Board. She is an experienced board director and is currently a member of the investment committee of the RNLI, a non-executive council member of the Duchy of Lancaster and senior independent director of JPMorgan Global Emerging Markets Income Trust 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 of the published Annual Report and Financial Statements for the year ended 31 July 2023) 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.

In light of the significant take up from shareholders at the online presentation held in November 2022, in advance of the AGM, the Board has decided to hold another interactive Online Shareholder Presentation which will be held at 11:00 a.m. on 21 November 2023. At the presentation, shareholders will receive updates from the Chair and Manager and there will be the opportunity for an interactive question and answer session. Following the online presentation, shareholders will still have time to submit their proxy votes prior to the AGM and I would encourage all shareholders to lodge their votes in advance in this manner. Full registration details can be found at: asia-focus.co.uk.

Outlook

While it has been a tough period for small caps elsewhere, Asia's domestic growth story means that the region's diverse and fast-growing small companies are outpacing larger rivals. Asia is forecast to contribute around 70% of global growth for 2023, according to the IMF's last World Economic Outlook (published in April). Growth in Asia and the Pacific is set to accelerate to 4.6% this year from 3.8% in 2022.

As I have already referenced, although China's post-Covid 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 investing solely in India or China. Recovery in Southeast Asia continues to gather pace and markets like Vietnam are providing a more positive environment for small-cap investors, notwithstanding significant volatility there during the year.

Stronger GDP growth should benefit the smaller companies targeted by this investment trust over time. But by no means does this measure alone automatically result in strong share-price performance. Pinpointing those businesses that can succeed and are capable of becoming 'multi-baggers' (stocks that deliver returns many times over the original investment), requires a disciplined, bottom-up stock picking approach.

Your Company remains positioned around Asia's long-term structural growth themes, such as greater domestic consumption that comes with Asia's rising affluence, booming infrastructure, the growth of digital, moving to a lower-carbon future, advances in health and wellness technology, and the opportunities offered by the rollout of 5G, big data and digital interconnectivity.

Relatively under-researched and inefficient markets across the whole Asian continent mean there is ample potential for unearthing hidden gems, companies with strong balance sheets and sustainable earnings prospects that can emerge stronger. I am confident that with extensive on-the-ground coverage and a highly experienced management team, your Manager is well positioned to keep finding quality companies among the hugely varied Asian small cap universe.

Krishna Shanmuganathan
Chair
19 October 2023

Investment Manager's Review

Performance review

Asian small caps demonstrated strong performance over the 12-month review period to 31 July 2023, despite the volatility across global markets. The benchmark MSCI AC Asia Ex Japan Small Cap Index returned +8.0% in sterling terms over the review period. The Company's net asset value ("NAV") and share price, both in total return terms, increased by 7.6% and 7.3%, respectively.

As your Chair has highlighted earlier in this report, global markets have faced numerous challenges over the review period, including increasing inflation and interest rates (especially in developed markets), concerns regarding a potential global recession and a slower-than-expected China recovery. Nevertheless, Asian small caps have demonstrated remarkable resilience, outperforming their larger counterparts by a significant margin. Over the past three years, the cumulative outperformance of smaller companies in Asia against the large cap index has amounted to a meaningful 38 percentage points (the MSCI Asia ex Japan Small Cap gained 43% in the three years to 31 July 2023, compared with 4.2% for the MSCI Asia ex Japan). Heightened market volatility and macroeconomic uncertainty means our investment process gains even greater significance and we believe the unwavering rigour in seeking out quality has proven particularly advantageous over the 12-month period.

Our stock selection in India and Indonesia contributed to the positive performance, as both countries enjoyed resilient domestic spending during the review period. India-based engineering and technology solutions company Cyient, has seen a strong recovery in earnings as demand for engineering software and design services bounced-back in the aerospace industry, while margins benefited from management's restructuring efforts over the past few years. Prestige Estates, a property developer, released robust presales figures thanks to new projects and continued industry consolidation as they look to accelerate growth and become a national player. Similarly, Syngene, a contract research organisation working in pharmaceuticals, biotech and other industries, also benefited from a series of positive earnings reports.

The company's strategic investments to expand capacity in biologics manufacturing and discovery services, as well as its solid balance sheet and a low debt profile, contributed to its success over the review period. Shares of Indian downstream oil and gas company Aegis Logistics were especially strong in the last month of the period, as the company released good quarterly results. In Indonesia, Bank OCBC NISP announced robust first-quarter performance, buoyed by asset growth due to an improving economic climate. Other standout performers in Indonesia included Ultrajaya Milk Industry, a more consumer-driven business focused on household dairy products, and fuel distributor AKR Corporindo.

At a sector level, technology, industrials and financials were positives for the portfolio. A stabilising tech sector and rising enthusiasm for generative artificial intelligence (AI) saw strong performance in both Taiwan and Korea. Positive stock selection in both countries aided performance over the 12 months. In Korea, Park Systems, manufacturer of atomic force microscopy (AFM) systems, was the leading contributor to relative results over the year. AFM has diverse applications in advanced science and technology labs, and the size of the addressable market should grow over time given it is still a relatively new field. Leeno Industrial also generated strong returns, with an anticipated recovery in demand driven by AI and testing initiatives. Meanwhile, in Taiwan, Sunonwealth Electric Machine Industry, which manufactures industrial fans and Taiwan Union Technology, which distributes copper-clad laminate, also contributed to relative performance given an improved outlook for growth. In addition, Vietnam's leading IT group FPT Corporation advanced over the review period on continued strong results with the company reporting a 21% profit jump in the second quarter, driven by a 29% surge in IT service revenues.

Elsewhere, our positioning in several other companies also proved advantageous. Shares of Thailand-based TISCO Financial Group performed well as its conservative lending practices over the past few years proved prescient. Sri Lankan conglomerate John Keells Holdings, which 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.

On the other side, your Company's exposure to China and Hong Kong, both among the worst-performing markets, dragged on performance. Consumer-related sectors bore the brunt of the selling and the property sector continued to languish. Key detractors in China included JOINN Laboratories., a drug testing business, and Sinoma Science & Technology, an advanced materials company focused on green energy solutions. Hong Kong-listed banking group Dah Sing Financial Holdings Limited and dry-bulk shipper Pacific Basin Shipping were also weak.

Our stock selection and overweight positioning in Singapore also weighed on overall performance. Among the main detractors in this market were investment holding company Yoma Strategic Holdings, a conglomerate operating in Myanmar, property developer Bukit Sembawang Estates and nanotechnology solutions provider Nanofilm. The latter reported weak semi-annual results due to slowing demand and high operating expenses.

Other detractors of note mainly included companies in the consumer discretionary, materials and health care sectors. Malaysian hotel operator Shangri-La Hotels Malaysia Bhd., Indonesia-focused M.P. Evans, which produces palm oil, and Thailand-based Mega Lifesciences PCL came under pressure. In addition, Taiwan-headquartered e-commerce operator momo.com underperformed, in part due to disappointing sales growth and broader concerns about the lacklustre pace of digital sales expansion following the easing of lockdown measures.

Portfolio Activity

Much the same as we have said in previous reports, market volatility creates price disconnects, which require managers to focus on fundamentals. We have a long-term approach to investing and favour businesses with clearer earnings visibility and stronger fundamentals, focusing on quality companies that are well placed in structurally growing areas, such as healthcare and technology. This approach also helps us mitigate downside risks to growth from inflationary pressures. As such, over the period we have reduced or exited positions where we felt there was less certainty in a company's earnings trajectory or where those earnings could be less resilient to current macro headwinds.

Keeping in line with the Company's focus on quality, we purchased shares in Taiwan's Sinbon Electronics, which makes cables and connectors for niche markets. The company supplies products and applications to sectors including green energy, industrial applications, automotive, medical equipment as well as communication and electronic peripherals. In a highly fragmented industry, its competitive edge lies in its capabilities to manufacture highly customised products for its diversified customer base, as well as its well-entrenched partnerships with its suppliers and clients. Although its shares were under pressure after the release of its 2023 first half results, we view it as a beneficiary of long-term structural trends such as the Internet of Things, 5G applications and electric vehicles, as well as growing demand for renewable energy, supported by solid order visibility over the next two to three years. The company operates a cost pass-through model which ensures healthy margins and cash-flow.

Another key purchase was Autohome, a dominant Chinese auto platform with more than 60 million daily active users. It trades at attractive valuations, with just the cash on its balance sheet representing more than 75% of the Group's total market value, and we see latent potential for consumer spending to pick up in China as the economy re-opens. Autohome has an asset-light business model, delivering comprehensive, independent and interactive content to automobile buyers and owners. Its core business benefits from the powerful network-effect characteristics of a classifieds business and it is the number one player in the market. Its original generated content drives high-quality user traffic, which in turn results in advertising and lead generation. It is also expanding into new areas of business, such as auto-related financing for example and used car sales.

As covered in our interim report, we added other Chinese companies to the portfolio including seeds & nuts producer ChaCha Food. With well-established brands, the company has high potential for growth as the largely fragmented snacks industry in China presents a consolidation opportunity. As an aside, we engaged with the company over the period to gain visibility on its risk management policies on key environmental, social and governance (ESG) topics, and to encourage the company 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 disclosure and business integration. We also added Kerry Logistics, one of Asia's largest integrated logistics providers. With its diversified customer base, we believe it is well placed to benefit from supply-chain relocation, e-commerce growth and intra-regional trade in Asia.

Against these purchases, we exited Pacific Basin Shipping, given the lack of visibility and momentum on shipping rates (despite the compelling supply and demand dynamic). The industry is likely to enter a significant capex cycle, which could also affect shareholder returns. Elsewhere, we sold Douzone Bizon, due to concerns over execution and an uncertain growth outlook, and divested from eCloudvalley Digital Technology, owing to poor disclosure and a slowdown in growth. Other sales included Absolute Clean Energy, IPH, Nazara Technologies and Tatva Chintan Pharma; small positions that we didn't feel compelled to scale up.

Outlook

We expect global market sentiment to remain volatile in the short term, given concerns regarding global growth, monetary policies in the US and other developed markets, as well as developments in China, where macroeconomic data remains soft. Having said that, at the time of writing the Chinese government has begun another round of easing measures which should increase support to the economy at the margin. While we are yet to see more impactful policy action, there are still good opportunities to invest in small cap stocks that trade at attractive valuations and that provide exposure to pockets of growth within China's domestic market.

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 sustainable long-term growth. The region will also gain from growing demand for AI-related apps and chips, especially in the semiconductor and consumer electronics segments.

Resource-rich Indonesia has a sizeable and dynamic domestic market with rising post-pandemic consumer demand. There is a more limited universe of small caps compared with elsewhere, but we believe the portfolio is invested in well-run businesses with vast long-term potential. Vietnam, meanwhile, has become a key player in manufacturing - benefiting from diversification in the global supply chain and numerous free-trade agreements. The country is on a growth track, and we continue to like the long-term macro story. On the other hand, we do see some near-term political risk in some parts of the region, with political uncertainty in Thailand and general elections for both India and Indonesia in 2024. Outside of Thailand though, we generally expect political stability with a continuity in policy-making which provides a positive backdrop for the corporate sector.

In summary, we continue to believe Asian small caps offer significant value. There are attractive opportunities around the structural themes of aspiration, building Asia, digital future, going green, health & wellness and tech enablers. Overall, we have been nimble, taking the opportunity to raise the portfolio's earnings visibility and reduce exposure to names where this visibility is less certain. As a result, 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. While performance of small caps in the region can be volatile, given our in-house research capabilities, investment management focus and bottom-up analysis, we expect to deliver for our shareholders in the long run.

Gabriel Sacks, Flavia Cheong, Xin-Yao Ng & Hugh Young
abrdn Asia Limited
19 October 2023

Overview of Strategy

Business Model

The business of the Company is that of an investment company which seeks to qualify as an investment trust for UK capital gains tax purposes.

Investment Objective

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 portfolio made up predominantly of quoted smaller companies in the economies of Asia excluding Japan.

Investment Policy

On 27 January 2022 shareholders approved an amended investment policy. The Company may invest in a diversified portfolio of securities (including equity shares, preference shares, convertible securities, warrants and other equity-related securities) predominantly issued by quoted smaller companies spread across a range of industries and economies in the Investment Region. The Investment Region includes Bangladesh, Cambodia, China, Hong Kong, India, Indonesia, Korea, Laos, Malaysia, Myanmar, Pakistan, The Philippines, Singapore, Sri Lanka, Taiwan, Thailand and Vietnam, together with such other economies in Asia as approved by the Board.

The Company may invest up to 10% of its net assets in collective investment schemes, and up to 10% of its net assets in unquoted companies, calculated at the time of investment.

The Company may also invest in companies traded on stock markets outside the Investment Region provided over 75% of each company's consolidated revenue, operating income or pre-tax profit is earned from trading in the Investment Region or the company holds more than 75% of their consolidated net assets in the Investment Region.

When the Board considers it in shareholders' interests, the Company reserves the right to participate in rights issues by an investee company.

Risk Diversification

The Company will invest no more than 15% of its gross assets in any single holding including listed investment companies at the time of investment.

Gearing

The Board is responsible for determining the gearing strategy for the Company. Gearing is used selectively to leverage the Company's portfolio in order to enhance returns where and to the extent this is considered appropriate to do so. Gearing is subject to a maximum gearing level of 25% of NAV at the time of draw down.

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") (previously known as Aberdeen Standard Fund Managers Limited) 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.

Delivering the Investment Policy

The Directors are responsible for determining the investment policy and the investment objective of the Company. Day to day management of the Company's assets has been delegated, via the AIFM, to the Investment Manager, abrdn Asia. abrdn Asia invests in a diversified range of companies throughout the Investment Region in accordance with the investment policy. abrdn Asia follows a bottom-up investment process based on a disciplined evaluation of companies through direct visits by its fund managers. Stock selection is the major source of added value. No stock is bought without the fund managers having first met management. abrdn Asia estimates a company's worth in two stages, quality then price. Quality is defined by reference to management, business focus, the balance sheet and corporate governance. Price is calculated by reference to key financial ratios, the market, the peer group and business prospects. Top-down investment factors are secondary in the abrdn Asia's portfolio construction, with diversification rather than formal controls guiding stock and sector weights. Whilst the management of the Company's investments is not undertaken with any specific instructions to exclude certain asset types or classes, the Investment Manager embeds ESG into the research of each asset class as part 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.

A detailed description of the investment process and risk controls employed by abrdn Asia is disclosed on pages 103 to 105 of the published Annual Report and Financial Statements for the year ended 31 July 2023. A comprehensive analysis of the Company's portfolio is disclosed on pages 30 to 40 of the published Annual Report and Financial Statements for the year ended 31 July 2023 including a description of the ten largest investments, the portfolio investments by value, sector/geographical analysis and currency/market performance. At the year end the Company's portfolio consisted of 62 holdings.

Comparative Indices

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.

Promoting the Company's Success

In accordance with corporate governance best practice, the Board is now required to describe to the Company's shareholders how the Directors have discharged their duties and responsibilities over the course of the financial year following the guidelines set out under section 172 (1) of the Companies Act 2006 (the "s172 Statement"). This Statement, from 'Promoting the Success of the Company' to "Long Term Investment", provides an explanation of how the Directors have promoted the success of the Company for the benefit of its members as a whole, taking into account the likely long term consequences of decisions, the need to foster relationships with all stakeholders and the impact of the Company's operations on the environment.

The purpose of the Company is to act as a vehicle to provide, over time, financial returns to its shareholders. The Company's Investment Objective is disclosed above. The activities of the Company are overseen by the Board of Directors of the Company.

The Board's philosophy is that the Company should operate in a transparent culture where all parties are treated with respect and provided with the opportunity to offer practical challenge and participate in positive debate which is focused on the aim of achieving the expectations of shareholders and other stakeholders alike. The Board reviews the culture and manner in which the Manager operates at its regular meetings and receives regular reporting and feedback from the other key service providers.

Investment trusts, such as the Company, are long-term investment vehicles, with a recommended holding period of five or more years. Typically, investment trusts are externally managed, have no employees, and are overseen by an independent non-executive board of directors. Your Company's Board of Directors sets the investment mandate, monitors the performance of all service providers (including the Manager) and is responsible for reviewing strategy on a regular basis. All this is done with the aim of preserving and, indeed, enhancing shareholder value over the longer term.

Stakeholders

The Company's main stakeholders have been identified as its shareholders, the Manager (and Investment Manager), service providers, investee companies and debt providers. More broadly, the environment and community at large are also stakeholders in the Company. The Board is responsible for managing the competing interests of these stakeholders. Ensuring that the Manager delivers out performance for Ordinary shareholders over the longer term without adversely affecting the risk profile of the Company which is known and understood by the loan note holders and CULS holders. This is achieved by ensuring that the Manager stays within the agreed investment policy.

Shareholders

Shareholders are key stakeholders in the Company - they look to the Manager to achieve the investment objective over time. The following table describes some of the ways we engage with our shareholders:

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 of the published Annual Report and Financial Statements for the year ended 31 July 2023).

The Manager

The key service provider for the Company is the Alternative Investment Fund Manager and the performance of the Manager is reviewed in detail at each Board meeting. The Manager's investment process is outlined on pages 103 to 105 and further information about the Manager is given on page 102 of the published Annual Report and Financial Statements for the year ended 31 July 2023. Shareholders are key stakeholders in the Company - they are looking to the Manager to achieve the investment objective over time and 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. The Board is available to meet at least annually with shareholders at the Annual General Meeting and this includes informal meetings with them over lunch following the formal business of the AGM. This is seen as a very useful opportunity to understand the needs and views of the shareholders. In between AGMs, the Directors and Manager also conduct programmes of investor meetings with larger institutional, private wealth and other 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.

Other Service Providers

The other key stakeholder group is that of the Company's third party service providers. The Board is responsible for selecting the most appropriate outsourced service providers and monitoring the relationships with these suppliers regularly in order to ensure a constructive working relationship. Our service providers look to the Company to provide them with a clear understanding of the Company's needs in order that those requirements can be delivered efficiently and fairly. The Board, via the Management Engagement Committee, ensures that the arrangements with service providers are reviewed at least annually in detail. The aim is to ensure that contractual arrangements remain in line with best practice, services being offered meet the requirements and needs of the Company and performance is in line with the expectations of the Board, Manager, Investment Manager and other relevant stakeholders. Reviews include those of the Company's depositary and custodian, share registrar, broker and auditors.

Principal Decisions

Pursuant to the Board's aim of promoting the long term success of the Company, the following principal decisions have been taken during the year:

Portfolio The Investment Manager's Review details the key investment decisions taken during the year and subsequently. The Investment Manager has continued to monitor the investment portfolio throughout the year under the supervision of the Board. A list of the key portfolio changes can be found in the Investment Manager's Report.

Directorate During the year the Board has initiated a search for a new independent Director as part of the continuing Board succession plans culminating in the decision to appoint two new Directors as explained in the Chair's Statement above.

Long Term Investment

The Investment Manager's investment process seeks to outperform over the longer term. The Board has in place the necessary procedures and processes to continue to promote the long term success of the Company. The Board will continue to monitor, evaluate and seek to improve these processes as the Company continues to grow over time, to ensure that the investment proposition is delivered to shareholders and other stakeholders in line with their expectations.

Key Performance Indicators (KPIs)

The Board uses a number of financial performance measures to assess the Company's success in achieving its objective and to determine the progress of the Company in pursuing its investment policy. The main KPIs 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 of the published Annual Report and Financial Statements for the year ended 31 July 2023.
Performance against comparative indices	The Board also measures performance against 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. Graphs showing performance are shown on pages 25 to 27 of the published Annual Report and Financial Statements for the year ended 31 July 2023. 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 (on a total return basis)	The Board also monitors the price at which the Company's shares trade relative to the MSCI Asia 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 of the published Annual Report and Financial Statements for the year ended 31 July 2023.
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 of the published Annual Report and Financial Statements for the year ended 31 July 2023.
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 of the published Annual Report and Financial Statements for the year ended 31 July 2023.

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 Risk Unchanged during Year	The Company's strategy and objectives are regularly reviewed to ensure that 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 Risk Unchanged during Year	The Board sets, and monitors, its investment restrictions and guidelines, and 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. 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.
Operational Risk Risk Unchanged during Year	The Board receives reports from the Manager on internal controls and risk 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 of the published Annual Report and Financial Statements for the year ended 31 July 2023. 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 Risk Unchanged during Year	The Board receives assurance from the Manager and Company Secretary and 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 Risk Unchanged during Year	External risks over which the Company has no control are always a risk. The 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.

Promoting the Company

The Board recognises the importance of promoting the Company to prospective investors both for improving liquidity and enhancing the value and rating of the Company's shares. The Board believes an effective way to achieve this is through subscription to and participation in the promotional programme run by the Manager on behalf of a number of investment trusts under its management. The Company's financial contribution to the programme is matched by the Manager. The Manager reports quarterly to the Board giving analysis of the promotional activities as well as updates on the shareholder register and any changes in the make-up of that register.

The purpose of the programme is both to communicate effectively with existing shareholders and to gain new shareholders with the aim of improving liquidity and enhancing the value and rating of the Company's shares. Communicating the long-term attractions of your Company is key and therefore the Company also supports the Manager's investor relations programme which involves regional roadshows, promotional and public relations campaigns.

Board Diversity

The Board recognises the importance of having a range of skilled, experienced individuals with the right knowledge represented on the Board in order to allow the Board to fulfil its obligations. The Board also recognises the benefits and is supportive of the principle of diversity in its recruitment of new Board members. The Board will not display any bias for age, gender, race, sexual orientation, religion, ethnic or national origins, or disability in considering the appointment of its Directors. Although the Board does not set diversity targets, it is mindful of best practice in this area, and the Board will continue to evolve in 2023/2024, with the stated aim of improving its diversity. At 31 July 2023, there were four male Directors and one female Director on the Board. Following the appointments of Lucy Macdonald and Davina Curling the Board will comprise three male Directors and three female Directors and will be compliant with the new diversity and inclusion targets set out in Chapter 15 of the FCA's Listing Rules.

Environmental, Social and Governance ("ESG") Engagement

Whilst the management of the Company's investments is not undertaken with any specific instructions to exclude certain asset types or classes, the Investment Manager embeds ESG into the research of each asset class as part of the investment process. ESG investment is about active engagement, with the goal of improving the performance of assets held around the world.

The Investment Manager aims to make the best possible investments for the Company, by understanding the whole picture of the investments - before, during and after an investment is made. That includes understanding the environmental, social and governance risks and opportunities they present - and how these could affect longer-term performance. Environmental, social and governance considerations underpin all investment activities. With 1,000+ investment professionals, the Investment Manager is able to take account of ESG factors in its company research, stock selection and portfolio construction - supported by more than 30 ESG specialists around the world. Please refer to pages 106 to 110 of the published Annual Report and Financial Statements for the year ended 31 July 2023 for further detail on the Investment Manager's ESG policies applicable to the Company.

The Company has no employees as the Board has delegated day to day management and administrative functions to abrdn Fund Managers Limited. There are therefore no disclosures to be made in respect of employees. The Company's socially responsible investment policy is outlined above.

Due to the nature of the Company's business, being a company that does not offer goods and services to customers, the Board considers that it is not within the scope of the Modern Slavery Act 2015 because it has no turnover. The Company is therefore not required to make a slavery and human trafficking statement. The Board considers the Company's supply chains, dealing predominantly with professional advisors and service providers in the financial services industry, to be low risk in relation to this matter.

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.

Viability Statement

The Company does not have a formal fixed period strategic plan but the Board formally considers risks and strategy at least annually. The Board considers the Company, with no fixed life, to be a long term investment vehicle, but for the purposes of this viability statement has decided that a period of three years is an appropriate period over which to report. The Board considers that this period reflects a balance between looking out over a long term horizon and the inherent uncertainties of looking out further than three years.

· In assessing the viability of the Company over the review period the Directors have conducted a robust review of the principal risks, focusing upon the following factors:

· The principal risks detailed in the Strategic Report;

· The ongoing relevance of the Company's investment objective in the current environment;

· The demand for the Company's Shares evidenced by the historical level of premium and or discount;

· The level of income generated by the Company;

· 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 Loan Note Facility to repay CULS if required in 2025); and

· In the event of triggering the conditional Tender Offer in 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.

Accordingly, taking into account the Company's current position, the fact that the Company's investments are mostly liquid and the potential impact of its principal risks and uncertainties, the Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due for a period of three years from the date of this Report. In making this assessment, the Board has considered that matters such as significant economic or stock market volatility, a substantial reduction in the liquidity of the portfolio or changes in investor sentiment could have an impact on its assessment of the Company's prospects and viability in the future.

Future

The Board's view on the general outlook for the Company can be found in my Chair's Statement whilst the Investment Manager's views on the outlook for the portfolio are included in the Investment Manager's Review.

The Strategic Report has been approved by the Board and signed on its behalf by:

Krishna Shanmuganathan,
Chair
19 October 2023

Results

Performance (total return)

	1 year	3 year	5 year	10 year	Since
	% return	% return	% return	% return	inception
Share price^A	+7.3	+45.9	+41.0	+59.1	+2158.4
Net asset value per Ordinary share - diluted^AB	+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 definition below for more information).
^B 1 year return calculated on a diluted basis as CULS is "in the money". All other returns are calculated on a diluted basis.
Source: abrdn, Morningstar, Lipper & MSCI

Ten Largest Investments

As at 31 July 2023

5.2%

Total assets

Park Systems Corporation

4.2%

Total assets

Bank OCBC NISP

The Korean company is the leading developer of atomic force microscopes, a nascent technology that could have broad industrial application in sectors such as chip-making and biotechnology.

An Indonesian listed banking and financial services company, which is a steady consistent performer backed by healthy asset quality.

3.6%

Total assets

Cyient

3.1%

Total assets

Aegis Logistics

The Indian company provides engineering and IT services to clients in developed markets, competing primarily on quality of service and cost of delivery.

A strong and conservative player in India's gas and liquids logistics sector, with a first mover advantage in key ports and a fair amount of capacity expansion to come. The government's push for the adoption of cleaner energy is also boosting its liquefied natural gas business.

3.0%

Total assets

FPT Corporation

3.0%

Total assets

AKR Corporindo

FPT is a diversified technology group with a fast-growing software outsourcing business. It also owns a telecoms unit, an electronics retailing company, and has interests in other sectors, such as education.

AKR is one of the main players in industrial fuel in Indonesia, which has a high entry barrier. Its key strength is its extensive infrastructure and logistic facilities throughout the country.

2.7%

Total assets

AEM Holdings

2.7%

Total assets

Taiwan Union

A Singapore-based provider of advanced semiconductor chip testing services that has embedded itself in chipmaker Intel's global supply chain.

Taiwan Union Technology Corp is a leading maker of copper clad laminate (CCL), a key base material used to make printed circuit boards. With a strong commitment to R&D, it has moved up the value chain through the years..

2.6%

Total assets

John Keells Holdings

A respected and reputable Sri Lanka conglomerate with a healthy balance sheet and good execution, John Keells has a hotels and leisure segment that includes properties in the Maldives. It has other interests in consumer, transportation and financial services.

2.6%

Total assets

Nam Long Invest Corporation

A reputable Vietnamese developer in Ho Chi Minh City that focuses on the affordable housing segment, with decent land bank and promising project pipeline.

Portfolio

As at 31 July 2023
			Valuation	Total	Valuation
			2023	assets	2022
Company	Industry	Country	£'000	%	£'000
Park 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
Cyient	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
Sinoma 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
LEENO 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
Ultrajaya 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
Joinn 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	-
Sanofi 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
United Plantations	Food Products	Malaysia	6,067	1.1	5,815
Koh Young Technology	Semiconductors & Semiconductor Equipment	South Korea	5,697	1.0	4,879
Tisco Financial (Foreign)	Banks	Thailand	5,547	1.0	4,827
CE Info Systems	Software	India	4,774	0.9	2,421
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 Equipment	Taiwan	4,513	0.8	3,470
Yoma Strategic	Real Estate Management & Development	Myanmar	4,282	0.8	5,943
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 Equipment	Taiwan	3,976	0.6	3,652
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 21/03/2029)	Real Estate Management & Development	Singapore	247	0.1	276
AEON Stores Hong Kong	Multiline Retail	Hong Kong	150	-	279
First Sponsor Group (Warrants 30/05/2024)	Real Estate Management & Development	Singapore	117	-	158
Total investments			549,672	98.8
Net current assets			6,794	1.2
Total assets^B			556,466	100.0
^A Holding includes investment in both common and preference lines.
^B Total assets less current liabilities.

Investment and ESG Case Studies

Sinoma Science

In which year did we first invest?

2022

% Holding:

2.5%

Where is their head office?
Beijing, China

What is their web address?
www.sinomatech.com/en/p_s/

What does the company do?

Sinoma is one of the largest wind turbine blade producers in China and the third largest battery separator maker, which is backed by strong R&D capability and support from its parent group.

Why do we like the investment?

We view the stock as a proxy for growth of wind energy. Sinoma is also one of the best state-owned enterprises (SOEs) in China focusing on the development of
new materials.

Among the company's key strengths is its research and development (R&D) capability. Upon its Shenzhen listing in 2006, Sinoma had inherited a few R&D institutes, including a national laboratory that was focused on developing fibreglass materials. The company has continued to build on its solid R&D foundation.

Sinoma's capable management deserves mention. It has demonstrated strong entrepreneurship in developing downstream applications including wind turbine blades and battery separators. The team has also been stable and runs the company like a privately owned enterprise despite its SOE roots.

As a result, the company is now the largest wind blade producer, second-largest fibreglass maker and the No.3 separator maker in China. It also has a large trove of new materials waiting to be commercialised including hydrogen storage tanks. The hydrogen storage tank segment is a small but rapidly growing business, with potential for growth. The industry has policy support because it is a key development area for the
central government.

When did we engage Sinoma on ESG?

We last met Sinoma in November 2022.

What were the key areas of engagement?

We have engaged Sinoma mostly around climate change, especially on disclosure of its ESG efforts. Its disclosure around water management and carbon emission given its exposure in fibreglass production is still subpar. However, we expect further ESG improvements ahead because of the parent group's consolidation of its wind turbine blade business into Sinoma. Also, as its revenue contribution from the separator business increases, this should also enhance its ESG credentials.

The company has also demonstrated leadership in wind turbine blade disposal by forming an alliance which it leads with its largest customer Goldwind to collect decommissioned wind turbine blades. Owing to technology constraints, the current blade recycle rate
is low (less than 10%), but Sinoma is well positioned to
take on future opportunities as and when the right technology emerges.

On the fibreglass front, the company believes its carbon emissions per tonne for this business is at least 20% lower than peers, thus it believes that it can gain market share once clients start to focus more on ESG.

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.

Medikaloka Hermina

In which year did we first invest?

2021

% Holding:

2.3%

Where is their head office?

Jakarta, Indonesia

What is their web address?

https://herminahospitals.com/en

What does Medikaloka Hermina do?

The Indonesian hospital operator started out as a maternity clinic with seven inpatient beds in east Jakarta in 1985. Since then, it has grown into the country's largest private hospital group by number of operational beds, with 45 hospitals across 31 cities.

Why do we like the company?

Hermina is the lowest-cost hospital operator in Indonesia, best positioned to provide healthcare coverage for the masses in the country, that benefits from the roll-out of BJPS (Indo's universal healthcare scheme) and structural rise in healthcare demand.

It is very clear in their positioning, targeting the mass market, and has a key competitive strength in cost leadership to serve this target customer segment. Of the company's founding members, some continue to run the hospital and have executed well on the strategy.

Hermina's core strength is in women's and children's health-care services, given its beginnings in maternity services. It has strong brand equity in obstetrics, gynaecology and paediatrics. More than 73,000 babies are born in Hermina hospitals every year.

Interests are generally aligned, with management owning shares and key doctors incentivised by a partner-model, where they own shares in the hospitals they work in.

Overall, we regard Hermina as a good quality operator in its field.

When did we engage Medikaloka Hermina on ESG?

We last met Hermina in May 2023.

What were the key areas of engagement?

Our focus remains on engaging Hermina to disclose more 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 carbon emissions, given that power is mostly generated from coal.

We also track its progress in terms of alignment with the UN SDGs, in particular, SDG 3.8, achieve universal health coverage, including financial risk protection, access to quality essential healthcare services and access to safe, effective, quality, and affordable essential medicines and vaccines for all.

Being the lowest cost operator, Hermina is in a good position to make healthcare affordable to the masses in a country where a large proportion of the population is still relatively poor.

What is the result of our engagement?

Hermina is making an effort to disclose more around sustainability in its annual reports. It has publicised its efforts in the following areas.

On the environmental front, all its hospitals have implemented the green hospital concept, leading to a significant reduction in its environmental footprint (e.g., waste, energy use, water use, and greenhouse gas emissions). Recently, it introduced solar energy to two of its hospitals, in Depok and Bogor.

In terms of social impact, Hermina focuses on public health efforts and assisting underprivileged local communities around its hospitals. It routinely conducts events to provide free medical services.

On governance, it has created a unique and favourable structure, where the shareholders, management and key doctors are incentivised and aligned to minority interests.

We view Hermina as one of the investments whereby business and social good come together well. We have been invested in Hermina for years for abrdn portfolios well before it turned profitable, and we have been engaging the company consistently on its performance delivery. If Hermina does well, it will contribute to the greater good of society in Indonesia in the end.

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

We are planning to meet the company in January 2024 and get an update on potential health-care policy changes, tariffs as well as the roll-out of JKN (National Health Insurance) programme, given that these areas would drive mass health-care penetration.

Vijaya Diagnostic Centre

In which year did we first invest?

2021

% Holding:

1.5%

Where is their head office?

Hyderabad, India

What is their web address?

https://www.vijayadiagnostic.com/

What does Vijaya Diagnostic Centre do?

Founded in 1981, Vijaya Diagnostic Centre has grown to become the largest diagnostics provider in South India.

Why do we like the company?

Vijaya has a long growth runway ahead despite its regional market leadership in South India. A large part of this is due to a structural change seen in India: Historically, the country has underspent in healthcare, resulting in under penetration of essential medical diagnostics services. Now, with an expanding and increasingly more affluent middle class, demand for healthcare services is rising alongside greater insurance penetration. Vijaya is well-placed to benefit as medical services become better developed across the board, and costs turn more affordable for the masses.

Compared to its peers, the company draws 95% of revenue from the end consumer segment (patients), which is typically less price sensitive and more driven by brand strength. Also, Vijaya's one-stop shop model, with radiology and pathology in every centre, makes it more convenient for patients and increases the barrier to entry for competitors, including the new-age digital disrupters - as the capital requirement for radiology machines is relatively high. Vijaya is free-cash-flow generative and has a business model that looks as good as its peers, with nationwide reach.

When did we engage Vijaya on ESG?

We last met Vijaya in April 2023.

What were the key areas of engagement?

Since its initial public offering in 2021, there has not been much in terms of disclosures around ESG and sustainability from the company. So, in the April meeting, our key topics of discussion included labour management, especially around employee engagement, training and turnover, corporate behaviour as well as corporate governance and disclosure. In particular, we are keen to encourage Vijaya on greater reporting of alignment with the United Nations' Sustainable Development Goals (SDGs) by companies, given this is an area of increasing investor interest. In particular, UN SDG 3, which focuses on ensuring healthy lives and promoting well-being for all at all ages. Medical diagnostics testing is an essential part of healthcare, which drives better outcomes for patients. Despite this, access to diagnostics across India remains mixed.

One of the focus areas for Vijaya is in making diagnostic services affordable for Indians who have historically underspent on medical care, for a range of reasons, including affordability. This runs parallel to their aim of expanding into India's Tier 2 and Tier 3 cities that have a longer runway for growth and expansion compared to the metropolises, which they expect to be at least 50% of their capital expenditure for the next 3 years. For example, in a previous meeting, the company explained how it has acquired high-end CT scan machines that cost significantly more than the standard models to do mammography tests without compromising patients' health. Vijaya is not charging a premium for this service, rather it is relying on higher rate of utilisation to make money.

In encouraging the company to do more around its disclosures so that the market can recognise the company's efforts and understand its role in delivery diagnostics, we engaged Vijaya and provided a summary of disclosures that we would like them to make in their forthcoming sustainability report. This included a range of granular disclosures, as well as the company's alignment with UN SDG 3. On the environment front, we have also sought to assess the company's impact in terms of carbon emissions impact, mainly through checking on its energy and electricity usage.

What is the result of our engagement?

In response, the company told us it has started taking steps to engage an agency to help Vijaya capture the necessary data that we have suggested through our engagement. We will continue to monitor and engage with Vijaya once the sustainability report is made available to explore ways to further improve disclosures around ESG and sustainability such that it is recognised by the market and external ratings agencies.

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

We would look to follow up on issues such as employee engagement, turnover and corporate behaviour.

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 "Plasticcyle", 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.

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 above.

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.

The Management Engagement Committee reviews the terms of the management agreement on a regular basis and have confirmed that, due to the long-term relative performance, investment skills, experience and commitment of the investment management team, in their opinion the continuing appointment of aFML and abrdn Asia is in the interests of shareholders as a whole.

Political and Charitable Donations

The Company does not make political donations (2022 - nil) and has not made any charitable donations during the year (2022 - nil).

Risk Management

Details of the financial risk management policies and objectives relative to the use of financial instruments by the Company are set out in note 19 to the financial statements.

The Board

The current Directors, Randal Dunluce (The Earl of Antrim), C Black, K Shanmuganathan, L Cooper and A Finn, together with N Cayzer who retired on 30 November 2022, were the only Directors who served during the year. Pursuant to Principle 23 of the AIC's Code of Corporate Governance which recommends that all directors should be subject to annual re-election by shareholders, all the members of the Board will retire at the AGM scheduled for 5 December 2022 and, with the exception of the Earl of Antrim, will offer themselves for re-election. Details of each Director's contribution to the long term success of the Company are provided on page 49 of the published Annual Report and Financial Statements for the year ended 31 July 2023.

The Board considers that there is a balance of skills and experience within the Board relevant to the leadership and direction of the Company and that all the Directors contribute effectively.

In common with most investment trusts, the Company has no employees. Directors' & Officers' liability insurance cover has been maintained throughout the year at the expense of the Company.

The Role of the Chair

The Chair is responsible for providing effective leadership to the Board, by setting the tone of the Company, demonstrating objective judgement and promoting a culture of openness and debate. The Chair facilitates the effective contribution, and encourages active engagement, by each Director. In conjunction with the Company Secretary, the Chair ensures that Directors receive accurate, timely and clear information to assist them with effective decision-making. The Chair leads the evaluation of the Board and individual Directors, and acts upon the results of the evaluation process by recognising strengths and addressing any weaknesses. The Chair also engages with major shareholders and ensures that all Directors understand shareholder views.

The Company has announced that Davina Curling will become Senior Independent Director with effect from her appointment to the Board on 1 March 2024. Prior to then the Audit Committee Chairman in combination with the other independent Directors will continue to fulfil the duties of the senior independent director, acting as a sounding board for the Chair and acting as an intermediary for other Directors as applicable. The Audit Committee Chairman and, following appointment, Senior Independent Director are both available to shareholders to discuss any concerns they may have.

Board Diversity

The Board recognises the importance of having a range of skilled, experienced individuals with the right knowledge represented on the Board in order to allow it to fulfil its obligations. The Board also recognises the benefits and is supportive of, and will give due regard to, the principle of diversity in its recruitment of new Board members. The Board will not display any bias for age, gender, race, sexual orientation, socio-economic background, religion, ethnic or national origins or disability in considering the appointment of Directors. The Board will continue to ensure that all appointments are made on the basis of 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.

Table for reporting on gender as at 31 July 2023

	Number of board members	Percentage of the board	Number of senior positions on the board (CEO, CFO, Chair and SID)	Number in executive management	Percentage of executive management
Men	4	80%	n/a (note 3)	n/a (note 4)	n/a (note 4)
Women	1	20% (note 1)
Not specified/prefer not to say	-	-

Table for reporting on ethnic background as at 31 July 2023

	Number of board members	Percentage of the board	Number of senior positions on the board (CEO, CFO, Chair and SID)	Number in executive management	Percentage of executive management
White British or other White (including minority-white groups)	4	80%	n/a (note 3)	n/a (note 4)	n/a (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.

Corporate Governance

The Company is committed to high standards of corporate governance. The Board is accountable to the Company's shareholders for good governance and this statement describes how the Company has applied the principles identified in the UK Corporate Governance Code as published in July 2018 (the "UK Code"), which is available on the Financial Reporting Council's (the "FRC") website: frc.org.uk.

The Board has also considered the principles and provisions of the AIC Code of Corporate Governance as published in February 2019 (the "AIC Code"). The AIC Code addresses the principles and provisions set out in the UK Code, as well as setting out additional provisions on issues that are of specific relevance to the Company. The AIC Code is available on the AIC's website: theaic.co.uk.

The Board considers that reporting against the principles and provisions of the AIC Code, which has been endorsed by the FRC provides more relevant information to shareholders.

The Board confirms that, during the year, the Company complied with the principles and provisions of the AIC Code and the relevant provisions of the UK Code, except as set out below.

1. Interaction with the workforce (provisions 2, 5 and 6);

2. the role and responsibility of the chief executive (provisions 9 and 14);

3. previous experience of the chairman of a remuneration committee (provision 32);

4. executive directors' remuneration (provisions 33 and 36 to 40); and

5. senior independent director (provision 12) (see below);

For the reasons set out in the AIC Code, and as explained in the UK Corporate Governance Code, the Board considers that provisions 1 to 4 above are not relevant to the position of the Company, being an externally-managed investment company. In particular, all of the Company's day-to-day management and administrative functions are outsourced to third parties. As a result, the Company has no executive directors, employees or internal operations. The Company has therefore not reported further in respect of provisions 1 to 4 above. See 'Nomination Committee' below for further details on the appointment of a new Senior Independent Director. The full text of the Company's Corporate Governance Statement can be found on the Company's website:
asia-focus.co.uk.

During the year ended 31 July 2023, the Board had five scheduled meetings. In addition, the Audit Committee met twice and the Management Engagement Committee met once and there has been a number of ad hoc Board meetings. Between meetings the Board maintains regular contact with the Manager. Directors have attended the following scheduled Board meetings and Committee meetings during the year ended 31 July 2023 (with their eligibility to attend the relevant meeting in brackets):

Director	Board	Audit Committee	Nomination Committee	Management Engagement Committee
K Shanmuganathan ^B	5 (5)	1 (1)	4 (4)	1 (1)
Earl of Antrim	5 (5)	2 (2)	4 (4)	1 (1)
C Black	5 (5)	2 (2)	4 (4)	1 (1)
L. Cooper	5 (5)	2 (2)	4 (4)	1 (1)
A Finn	5 (5)	2 (2)	4 (4)	1 (1)
N Cayzer ^A	2 (2)	n/a	1 (1)	1 (1)
^A Mr Cayzer retired on 30 November 2022
^B Mr Shanmuganathan was appointed Chair on 30 November 2022 and resigned from membership of the Audit Committee from that date

Policy on Tenure

In compliance with the provisions of the AIC Code, it is expected that Directors will serve in accordance with the nine year time limits laid down by the AIC Code.

Board Committees

Audit Committee

The Audit Committee Report is on pages 59 to 61 of the published Annual Report and Financial Statements for the year ended 31 July 2023.

Nomination Committee

All appointments to the Board of Directors are considered by the Nomination Committee which comprises all of the Directors. The Board's overriding priority in appointing new Directors to the Board is to identify the candidate with the best range of skills and experience to complement existing Directors. The Board also recognises the benefits of diversity and its policy on diversity is referred to in the Strategic Report on page 22 of the published Annual Report and Financial Statements for the year ended 31 July 2023.

As part of the continuing Board succession and refreshment plans, the Earl of Antrim will be retiring from the Board at the AGM to be held on 5 December 2023. Therefore, during the year the Nomination Committee commenced a search for a new independent non executive Director using the services of Fletcher Jones Limited, an independent recruitment consultant. As part of the search a specification of desired attributes and qualities was prepared and the recruitment process culminated in the decision to appoint Ms Lucy Macdonald and Ms Davina Curling as independent non-executive Directors with effect from the close of business of the AGM on 5 December 2023 and 1 March 2024, respectively and Ms Curling has agreed to become Senior Independent Director.

The Board undertakes an annual evaluation of the Board, Directors, the Chair and the Audit Committee which is conducted by questionnaires. The 2023 evaluation was conducted using questionnaires and highlighted certain areas of further focus such as continuing professional development which will be addressed with input where necessary from the Company's advisors. Overall, the Committee has concluded that the Board has an excellent balance of experience, knowledge of investment markets, legal regulation and financial accounting and continues to work in a collegiate and effective manner.

The Nomination Committee has reviewed the contributions of each Director ahead of their proposed re-elections at the AGM on 5 December 2023. Ms Black has continued to bring significant financial promotion, marketing and communications expertise to the Board and has been closely involved in the ongoing development of the Company's website; Mr Shanmuganathan has continued to bring his deep experience of Asia and has seamlessly assumed the role of Chair during the year to great effect; Mr Cooper has brought the weight of his significant local Asian market experience to the Board's discussions; and Mr Finn has brought relevant and recent accounting and financial experience to the board and has led the Audit Committee with expertise. For the foregoing reasons, with the exception of the Earl of Antrim who will be retiring from the Board at the forthcoming AGM, the independent members of the Nomination Committee have no hesitation in recommending the re-election of each Director who will be submitting themselves for re-election at the AGM on 5 December 2023.

Management Engagement Committee

The Management Engagement Committee comprises all of the Directors and is chaired by Mr Finn. The Committee is responsible for reviewing the performance of the Investment Manager and its compliance with the terms of the management and secretarial agreement. The terms and conditions of the Investment Manager's appointment, including an evaluation of fees, are reviewed by the Committee on an annual basis. The Committee believes that the continuing appointment of the Manager on the terms agreed is in the interests of shareholders as a whole.

Remuneration Committee

Under the UK Listing Authority rules, where an investment trust has only non-executive directors, the Code principles relating to directors' remuneration do not apply. Accordingly, matters relating to remuneration are dealt with by the full Board, which acts as the Remuneration Committee, and is chaired by the Chair.

The Company's remuneration policy is to set remuneration at a level to attract individuals of a calibre appropriate to the Company's future development. Further information on remuneration is disclosed in the Directors' Remuneration Report on pages 55 to 57 of the published Annual Report and Financial Statements for the year ended 31 July 2023.

Terms of Reference

The terms of reference of all the Board Committees may be found on the Company's website asia-focus.co.uk and 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.

Internal Control

In accordance with the Disclosure and Transparency Rules (DTR 7.2.5), the Board is ultimately responsible for the Company's system of internal control and for reviewing its effectiveness and confirms that there is an ongoing process for identifying, evaluating and managing the significant risks faced by the Company. This process has been in place for the year under review and up to the date of approval of this Annual Report and Financial Statements. It is regularly reviewed by the Board and accords with the FRC Guidance.

The Board has reviewed the effectiveness of the system of internal control. In particular, it has reviewed and updated the process for identifying and evaluating the significant risks affecting the Company and policies by which these risks are managed.

The Directors have delegated the investment management of the Company's assets to the abrdn Group within overall guidelines, and this embraces implementation of the system of internal control, including financial, operational and compliance controls and risk management. Internal control systems are monitored and supported by the abrdn Group's internal audit function which undertakes periodic examination of business processes, including compliance with the terms of the management agreement, and ensures that recommendations to improve controls are implemented.

Risks are identified and documented through a risk management framework by each function within the abrdn Group's activities. Risk includes financial, regulatory, market, operational and reputational risk. This helps the internal audit risk assessment model identify those functions for review. Any weaknesses identified are reported to the Board, and timetables are agreed for implementing improvements to systems. The implementation of any remedial action required is monitored and feedback provided to the Board.

The significant risks faced by the Company have been identified as being financial; operational; and compliance-related.

The key components of the process designed by the Directors to provide effective internal control are
outlined below:

· the Manager prepares forecasts and management accounts which allow the Board to assess the Company's activities and review its performance;

· the Board and Manager have agreed clearly defined investment criteria, specified levels of authority and exposure limits. Reports on these issues, including performance statistics and investment valuations, are regularly submitted to the Board and there are meetings with the Manager and Investment Manager
as appropriate;

· as a matter of course the Manager's compliance department continually reviews abrdn's operations and reports to the Board on a six monthly basis;

· written agreements are in place which specifically define the roles and responsibilities of the Manager and other third party service providers and, where relevant, ISAE3402 Reports, a global assurance standard for reporting on internal controls for service organisations, or their equivalents are reviewed;

· the Board has considered the need for an internal audit function but, because of the compliance and internal control systems in place within abrdn, has decided to place reliance on the Manager's systems and internal audit procedures; and

· at its October 2023 meeting, the Audit Committee carried out an annual assessment of internal controls for the year ended 31 July 2023 by considering documentation from the Manager, Investment Manager and the Depositary, including the internal audit and compliance functions and taking account of events since 31 July 2023. The results of the assessment, that internal controls are satisfactory, were then reported to the Board at the next Board meeting.

Internal control systems are designed to meet the Company's particular needs and the risks to which it is exposed. Accordingly, the internal control systems are designed to manage rather than eliminate the risk of failure to achieve business objectives and by their nature can only provide reasonable and not absolute assurance against mis-statement and loss.

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 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 of the published Annual Report and Financial Statements for the year ended 31 July 2023and 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.

Management of Conflicts of Interest

The Board has a procedure in place to deal with a situation where a Director has a conflict of interest. As part of this process, the Directors prepare a list of other positions held and all other conflict situations that may need to be authorised either in relation to the Director concerned or his connected persons. The Board considers each Director's situation and decides whether to approve any conflict, taking into consideration what is in the best interests of the Company and whether the Director's ability to act in accordance with his or her wider duties is affected. Each Director is required to notify the Company Secretary of any potential, or actual, conflict situations that will need authorising by the Board. Authorisations given by the Board are reviewed at each Board meeting.

No Director has a service contract with the Company although Directors are issued with letters of appointment upon appointment. The Directors' interests in contractual arrangements with the Company are as shown in note 18 to the financial statements. No other Directors had any interest in contracts with the Company during the period 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.

The Criminal Finances Act 2017 introduced a new corporate criminal offence of "failing to take reasonable steps to prevent the facilitation of tax evasion". The Board has confirmed that it is the Company's policy to conduct all of its business in an honest and ethical manner. The Board takes a zero-tolerance approach to facilitation of tax evasion, whether under UK law or under the law of any foreign country.

Accountability and Audit

The respective responsibilities of the Directors and the auditors in connection with the financial statements are set out on pages 58 and 69 of the published Annual Report and Financial Statements for the year ended 31 July 2023respectively.

Each Director confirms that:

· so far as he or she is aware, there is no relevant audit information of which the Company's auditors are unaware; and,

· each Director has taken all the steps that they could reasonably be expected to have taken as a Director in order to make themselves aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Additionally there have been no important events since the year end that impact this Annual Report.

The Directors have reviewed the independent auditors' procedures in connection with the provision of non-audit services. No non-audit services were provided by the independent auditors during the year and the Directors remain satisfied that the auditors' objectivity and independence has been safeguarded.

Independent Auditors

At the November 2022 AGM shareholders approved the re-appointment of PricewaterhouseCoopers LLP ("PwC") as independent auditors to the Company. PwC has expressed its willingness to continue to be the Company's auditors and a Resolution to re-appoint PwC as the Company's auditors and to authorise the Directors to fix the auditors' remuneration will be put to the forthcoming Annual General Meeting.

Substantial Interests

The Board has been advised that the following shareholders owned 3% or more of the issued Ordinary share capital of the Company at 31 July 2023:

Shareholder	No. of Ordinary shares held	% held
City of London Investment Management Company	37,115,489	23.7
AllSpring Global Investments	20,431,685	13.1
Interactive Investor (non-beneficial)	12,756,311	8.2
abrdn Savings Scheme (non-beneficial)	11,586,710	7.4
Hargreaves Lansdown (non-beneficial)	11,010,815	7.0
Funds managed by abrdn	5,523,368	3.5
1607 Capital Partners	5,340,300	3.4
Charles Stanley	5,060,341	3.2

There have been no significant changes notified in respect of the above holdings between 31 July 2023 and 19 October 2023.

The UK Stewardship Code and Proxy Voting

Responsibility for actively monitoring the activities of portfolio companies has been delegated by the Board to the AIFM which has sub-delegated that authority to the Manager.

The Manager is a tier 1 signatory of the UK Stewardship Code which aims to enhance the quality of engagement by investors with investee companies in order to improve their socially responsible performance.

Relations with Shareholders

The Directors place a great deal of importance on communication with shareholders. The Annual Report is widely distributed to other parties who have an interest in the Company's performance. Shareholders and investors may obtain up to date information on the Company through the Manager's freephone information service and the Company's website asia-focus.co.uk. The Company responds to letters from shareholders on a wide range
of issues.

The Board's policy is to communicate directly with shareholders and their representative bodies without the involvement of the abrdn Group (either the Company 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.

The Notice of the Annual General Meeting, included within the Annual Report and financial statements, is sent out at least 20 working days in advance of the meeting. All shareholders have the opportunity to put questions to the Board or the Manager, either formally at the Company's Annual General Meeting or, where possible, at the subsequent buffet luncheon for shareholders. The Company Secretary is available to answer general shareholder queries at any time throughout the year.

Consumer Duty

The FCA's Consumer Duty rules were published in July 2022. The rules comprise a fundamental component of the FCA's consumer protection strategy and aim to improve outcomes for retail customers across the entire financial services industry through the assessment of various outcomes, one of which is an assessment of whether a product provides value. Under the Consumer Duty, the Manager is the product 'manufacturer' of the Company and therefore the Manager was required to publish its assessment of value from April 2023. Using a newly developed assessment methodology, the Manager assessed the Company as 'expected to provide fair value for the reasonably foreseeable future'. As this was the first year of assessment, the Board gained an understanding of the Manager's basis of assessment and no concerns were identified with either the assessment method or the outcome of the assessment.

Special Business at the Annual General Meeting

Directors' Authority to Allot Relevant Securities

Approval is sought in Resolution 10, an ordinary resolution, to renew the Directors' existing general power to allot securities but will also, provide a further authority (subject to certain limits), to allot shares under a fully pre-emptive rights issue. The effect of Resolution 10 is to authorise the Directors to allot up to a maximum of 103.9m shares in total (representing approximately 2/3 of the existing issued capital of the Company), of which a maximum of 51.9m shares (approximately 1/3 of the existing issued share capital) may only be applied to fully pre-emptive rights issues. This authority is renewable annually and will expire at the conclusion of the next Annual General Meeting. The Board has no present intention to utilise this authority.

Disapplication of Pre-emption Rights

Resolution 11 is a special resolution that seeks to renew the Directors' existing authority until the conclusion of the next Annual General Meeting to make limited allotments of shares for cash of up to 10% of the issued share capital other than according to the statutory pre-emption rights which require all shares issued for cash to be offered first to all existing shareholders. This authority includes the ability to sell shares that have been held in treasury (if any), having previously been bought back by the Company. The Board has established guidelines for treasury shares and will only consider buying in shares for treasury at a discount to their prevailing NAV and selling them from treasury at or above the then prevailing NAV.

New shares issued in accordance with Resolution 11 and subject to the authority to be conferred by Resolution 10 will always be issued at a premium to the NAV per Ordinary share at the time of issue. The Board will issue new Ordinary shares or sell Ordinary shares from treasury for cash when it is appropriate to do so, in accordance with its current policy. It is therefore possible that the issued share capital of the Company may change between the date of this document and the Annual General Meeting and therefore the authority sought will be in respect of 10% of the issued share capital as at the date of the Annual General Meeting rather than the date of this document.

Purchase of the Company's Shares

Resolution 12 is a special resolution proposing to renew the Directors' authority to make market purchases of the Company's shares in accordance with the provisions contained in the Companies Act 2006 and the Listing Rules of the Financial Conduct Authority. The minimum price to be paid per Ordinary share by the Company will not be less than 5p per share (being the nominal value) and the maximum price should not be more than the higher of (i) 5% above the average of the middle market quotations for the shares for the preceding five business days; and (ii) the higher of the last independent trade and the current highest independent bid on the trading venue where the purchase is carried out.

The Directors do not intend to use this authority to purchase the Company's Ordinary shares unless to do so would result in an increase in NAV per share and would be in the interests of shareholders generally. The authority sought will be in respect of 14.99% of the issued share capital as at the date of the Annual General Meeting rather than the date of this document.

The authority being sought in Resolution 12 will expire at the conclusion of the next Annual General Meeting unless it is renewed before that date. Any Ordinary shares purchased in this way will either be cancelled and the number of Ordinary shares will be reduced accordingly or under the authority granted in Resolution 11 above, may be held in treasury. During the year the Company has not bought back any Ordinary shares for Treasury.

If Resolutions 10 to 12 are passed then an announcement will be made on the date of the Annual General Meeting which will detail the exact number of Ordinary shares to which each of these authorities relate.

These powers will give the Directors additional flexibility going forward and the Board considers that it will be in the interests of the Company that such powers be available. Such powers will only be implemented when, in the view of the Directors, to do so will be to the benefit of shareholders as a whole.

Notice of Meetings

Resolution 13 is a special resolution seeking to authorise the Directors to call general meetings of the Company (other than Annual General Meetings) on 14 days' notice. This approval will be effective until the Company's next Annual General Meeting in 2024. In order to utilise this shorter notice period, the Company is required to ensure that shareholders are able to vote electronically at the general meeting called on such short notice. The Directors confirm that, in the event that a general meeting is called, they will give as much notice as practicable and will only utilise the authority granted by Resolution 13 in limited and time sensitive circumstances.

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

Statement of Comprehensive Income

		Year ended 31 July 2023			Year ended 31 July 2022
		Revenue	Capital	Total	Revenue	Capital	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'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.

Statement of Financial Position

		As at	As at
		31 July 2023	31 July 2022
	Notes	£'000	£'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.

Statement of Changes in Equity

For the year ended 31 July 2023
			Capital	Share	Equity
		Share	redemption	premium	Component	Capital	Revenue
		capital	reserve	account	CULS 2025	reserve	reserve	Total
	Note	£'000	£'000	£'000	£'000	£'000	£'000	£'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
			Capital	Share	Equity
		Share	redemption	premium	Component	Capital	Revenue
		capital	reserve	account	CULS 2025	reserve	reserve	Total
	Note	£'000	£'000	£'000	£'000	£'000	£'000	£'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.

Statement of Cash Flows

		Year ended	Year ended
		31 July 2023	31 July 2022
	Notes	£'000	£'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.

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.
		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 of the published Annual Report and Financial Statements for the year ended 31 July 2023 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).
	(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.
	(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 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 of the published Annual Report and Financial Statements for the year ended 31 July 2023.

3.	Income
		2023	2022
		£'000	£'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	Capital	Total	Revenue	Capital	Total
		£'000	£'000	£'000	£'000	£'000	£'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.

5.	Administrative expenses
		2023	2022
		£'000	£'000
	Administration fees^A	112	103
	Directors' fees^B	161	144
	Promotional activities^C	219	219
	Auditors' remuneration^D
	- fees payable to the auditors for the audit of the annual financial statements	48	42
	Custodian charges	278	293
	Depositary fees	46	49
	Registrar fees	55	51
	Legal and professional fees	93	87
	Other expenses	300	175
		1,312	1,163
	^A The Company has an agreement with aFML 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 aFML at the year end was £86,000 (2022 - £52,000). The agreement is terminable on six months' notice.
	^B No pension contributions were made in respect of any of the Directors.
	^C Under the management agreement, the Company has also appointed aFML to provide promotional activities to the Company by way of its participation in the abrdn Investment Trust Share Plan and ISA. aFML has delegated this role to abrdn plc. The total fee paid and payable under the agreement in relation to promotional activities was £219,000 (2022 - £219,000). There was a £73,000 (2022 - £73,000) balance due to abrdn plc at the year end.
	^D There are no non-audit fees charged.

6.	Finance costs
		2023			2022
		Revenue	Capital	Total	Revenue	Capital	Total
		£'000	£'000	£'000	£'000	£'000	£'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.

7.	Taxation
				2023			2022
			Revenue	Capital	Total	Revenue	Capital	Total
			£'000	£'000	£'000	£'000	£'000	£'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).
	(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	Capital	Total	Revenue	Capital	Total
			£'000	£'000	£'000	£'000	£'000	£'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

8.	Dividends
		2023	2022
		£'000	£'000
	Third interim dividend for 2022 - 1.6p (2021 - nil)	2,511	-
	Final 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	2022
		£'000	£'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 - 1.61p (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.

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^A			156,862,299			156,951,436
	Return per share (p)	10.29	12.14	22.43	9.34	(16.36)	(7.02)


			2023			2022
	Diluted	Revenue	Capital	Total	Revenue	Capital	Total
	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^AB			169,366,591			169,459,584
	Return per share (p)	9.66	11.65	21.31	8.75	n/a	n/a
	^A Calculated excluding shares held in treasury.
	^B The calculation of the diluted total, revenue and capital returns per Ordinary share is carried out in accordance with IAS 33, "Earnings per Share". For the purpose of calculating total, revenue and capital returns per Ordinary share, the number of Ordinary shares used is 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 2.25% 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 12,504,292 (2022- 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.

10.	Investments at fair value through profit or loss
		2023	2022
		£'000	£'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	2022
		£'000	£'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	2022
		£'000	£'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.

11.	Debtors: amounts falling due within one year
		2023	2022
		£'000	£'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	2022
	Amounts falling due within one year	£'000	£'000
	Other creditors	1,250	2,864
		1,250	2,864

13.	Non-current liabilities
			2023				2022
			Number of	Liability	Equity		Number of	Liability		Equity
			units	component	component		units	component		component
	(a)	CULS	£'000	£'000	£'000		£'000	£'000		£'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)		-
		Notional 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 293.0p (2022 - 293.0p) 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.
		The CULS has been constituted as an unsecured subordinated obligation of the Company by the Trust Deed between the Company and the Trustee, the Law Debenture Trust Corporation p.l.c., dated 23 May 2018. The Trust Deed details the 2025 CULS holders' rights and the Company's obligations to the CULS 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 CULS 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 CULS holders to convert £12,753 (2022 - £15,343) nominal amount of CULS into 4,347 (2022 - 5,211) Ordinary shares.
		The fair value of the 2025 CULS at 31 July 2023 was £34,890,000 (2022 - £37,009,000).

						2023			2022
	(b)	Loan Note				£'000			£'000
		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 CULS, 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			2022
						£'000			£'000
	(c)	Deferred tax liability on Indian capital gains				4,609			2,684

14.	Called up share capital
			2023	2022
			£'000	£'000
	Allotted, called-up and fully paid
	Ordinary shares of 5p (2022 - 5p)		7,823	7,848
	Treasury shares		2,612	2,587
			10,435	10,435


		Ordinary	Treasury	Total
		shares	shares	shares
		Number	Number	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 5p were purchased (2022 - no Ordinary shares of 5p 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.

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
	Number of shares in issue^A	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
	Number of shares in issue^A	168,959,568	169,459,574
	Net asset value per share^B	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.
	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 310.49p (2022- 295.88p) and thus the CULS were 'in the money' (2022 - same).

17.	Analysis of changes in net debt
		At				At
		31 July	Currency	Cash	Non-cash	31 July
		2022	differences	flows	movements	2023
		£'000	£'000	£'000	£'000	£'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				At
		31 July	Currency	Cash	Non-cash	31 July
		2021	differences	flows	movements	2022
		£'000	£'000	£'000	£'000	£'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 of the published Annual Report and Financial Statements for the year ended 31 July 2023. 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 aFML, 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.

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.
	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
	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	-


	Weighted average	Weighted
	period for which	average	Fixed	Floating
	rate is fixed	interest rate	rate	rate
At 31 July 2022	Years	%	£'000	£'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.

Foreign currency risk exposure by currency of denomination:


	31 July 2023			31 July 2022
		Net monetary	Total		Net monetary	Total
	Overseas	assets/	currency	Overseas	assets/	currency
	investments	(liabilities)	exposure	Investments	(liabilities)	exposure
	£'000	£'000	£'000	£'000	£'000	£'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.

	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, of the published Annual Report and Financial Statements for the year ended 31 July 2023 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 of the published Annual Report and Financial Statements for the year ended 31 July 2023.

	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.


			Due
		Due	between
	Expected	within	3 months	Due after
	cashflows	3 months	and 1 year	1 year
31 July 2023	£'000	£'000	£'000	£'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


			Due
		Due	between
	Expected	within	3 months	Due after
	cashflows	3 months	and 1 year	1 year
31 July 2022	£'000	£'000	£'000	£'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:

	2023		2022
	Statement		Statement
	of Financial	Maximum	of Financial	Maximum
	Position	exposure	Position	exposure
Current assets	£'000	£'000	£'000	£'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.

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:

			Level 1	Level 2	Level 3	Total
	As at 31 July 2023	Note	£'000	£'000	£'000	£'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


			Level 1	Level 2	Level 3	Total
	As at 31 July 2022	Note	£'000	£'000	£'000	£'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

	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		Year ended
			31 July 2023		31 July 2022
	Level 3 Financial assets at fair value through profit or loss		£'000		£'000
	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 illiquidity. 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.
	The Company's capital comprises the following:
		2023	2022
		£'000	£'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 a 'net cash' position.

		2023	2022
		£'000	£'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.

Alternative Performance Measures

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	As at
		31 July 2023	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%	14.0%

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

		Year ended	Year ended
		31 July 2023	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	Year ended
		31 July 2023	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%

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 recur.

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.

			Share
Year ended 31 July 2023		NAV	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^A	d	3.0%	3.4%
Total return	c+d	+7.6%	+7.3%

			Share
Year ended 31 July 2022		NAV	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^A	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.

The Annual General Meeting will be held at 11.00 a.m. on 5 December 2023 at Wallacespace Spitalfields, 15-25 Artillery Lane, London, E1 7HA.

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

The Annual Financial Report Announcement is not the Company's statutory accounts. The above results for the year ended 31 July 2023 are an abridged version of the Company's full financial statements, which have been approved and audited with an unqualified report. The 2022 and 2023 statutory accounts received unqualified reports from the Company's auditors and did not include any reference to matters to which the auditors drew attention by way of emphasis without qualifying the reports and did not contain a statement under s.498(2) or 498(3) of the Companies Act 2006. The financial information for 2022 is derived from the statutory accounts for 2021 which have been delivered to the Registrar of Companies. The 2023 financial statements will be filed with the Registrar of Companies in due course.

The audited Annual Report and financial statements will be posted to shareholders in November. Copies may be obtained during normal business hours from the Company's Registered Office, 280 Bishopsgate, London EC2M 4AG or from the Company's website, asia-focus.co.uk*

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

By Order of the Board

abrdn Holdings Limited

Secretary

19 October 2023

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