ABRDN ASIA FOCUS PLC

Legal Entity Identifier (LEI):  5493000FBZP1J92OQY70

 

ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 31 JULY 2022

 

STRATEGIC REPORT - COMPANY SUMMARY AND FINANCIAL HIGHLIGHTS

 

Performance Highlights

 

Net asset value total return (diluted)AB			Net asset value per share (diluted)
-2.0%			295.3p
2021	+41.9%		2021	309.02p
Share price total returnA			Share price
-1.7%			254.0p
2021	+38.2%		2021	266.00p
MSCI AC Asia ex Japan Small Cap Index total returnC			Discount to net asset valueAB
-5.1%			14.0%
2021	+39.6%		2021	13.9%
Ongoing charges ratioA			Dividend increase/(decrease)D
0.88%			150.0%
2021	1.10%		2021	-15.8%
A Alternative Performance Measure (see below).
B Presented on a diluted basis as the Convertible Unsecured Loan Stock ("CULS") is "in the money" (2021 - same).
C Currency adjusted, capital gains basis.
D Dividends include special dividends of 1.6p for 2022 (2021 - 0.2p).
E Figures for 2021 have been restated to reflect the 5:1 sub-division as disclosed in note 14.

 

 

Financial Calendar, Dividends and Highlights

 

Financial year end	31 July
Announcement of results for year ended 31 July 2022	17 October 2022
Online Shareholder Presentation	16 November 2022
Annual General Meeting	30 November 2022
CULS Conversion Date	30 November 2022
Payment date of first interim for 2022/2023 and special dividend for 2021/2022	20 December 2022
Payment date of second interim dividend for 2022/2023	21 March 2023
CULS Conversion Date	31 May 2023
Payment date of third interim dividend for 2022/2023	23 June 2023
Payment date of fourth interim dividend for 2022/2023	20 September 2023

Dividends

	Rate	xd date	Record date	Payment date
Interim 2022	3.20p	24 February 2022	25 February 2022	21 March 2022
Interim 2022	1.60p	26 May 2022	27 May 2022	17 June 2022
Interim 2022	1.60p	25 August 2022	26 August 2022	16 September 2022
Special 2022	1.60p	24 November 2022	25 November 2022	20 December 2022
	8.00p
Final 2021A	3.00p	6 January 2022	7 January 2022	2 February 2022
Special 2021A	0.20p	6 January 2022	7 January 2022	2 February 2022
	3.20p
AFigures have been restated to reflect the 5:1 sub-division as disclosed in note 14.

 

	31/07/2022	31/07/2021	% change
Total assets	£532,912,000	£557,183,000	-4.4
Total equity shareholders' funds (net assets)	£464,396,000	£487,958,000	-4.8
Net asset value per share (basic)A	295.88p	310.90p	-4.8
Net asset value per share (diluted)A	295.25p	309.02p
Share price (mid market)A	254.00p	266.00p	-4.5
Market capitalisation	£398,662,000	£417,483,000	-4.5
Discount to net asset value (basic)B	14.2%	14.4%
Discount to net asset value (diluted)B	14.0%	13.9%
MSCI AC Asia ex Japan Small Cap Index (currency adjusted, capital gains basis)	1,888.43	2,052.64	-8.0
Net gearingB	12.1%	10.0%
Dividends and earnings
Total return per share (basic)AC	(7.02)p	92.34p
Revenue return per share (basic)AD	9.34p	1.66p	+462.7
Dividends per shareAE	8.00p	3.20p	+150.0
Dividend coverB	1.17	0.52
Revenue reservesDF	£14,964,000	£12,868,000	+16.3
Operating costs
Ongoing charges ratioB	0.88%	1.10%
A Figures for 2021 have been restated to reflect the 5:1 sub-division as disclosed in note 14.
B Considered to be an Alternative Performance Measure. See below.
C Measures the total earnings for the year divided by the weighted average number of Ordinary shares in issue (see note 9).
D Prior year restatement as disclosed in note 22.
E The figures for dividends per share reflect the dividends for the year in which they were earned.
F Prior to payment of final and special dividends.

 

Strategic Report

Chairman's Statement

Results

The past year has been difficult for financial markets as the world emerges unevenly from the pandemic, with global stock markets suffering from bouts of weakness as investors digest the implications of a European war while facing inflation and the rising prospects of a global recession. But amidst this, some of the stock markets of Asia, in particular those not under the direct influence of China, have been relatively resilient; India being an example where headline indices remain relatively unchanged.

In addition, inflation in most parts of Asia has been mild compared with elsewhere in the world with Asian Central Banks being more accommodating; commodity prices, with the exception of coal, have retreated from the highs of earlier in the year and wage inflationary pressures in Asia are not as great as those anticipated in Europe. However, Asia has not been immune to the fallout from Covid, with parts of the Chinese economy still suffering from lockdowns and there remain pressures in global supply-chains.

During the period, there was also a significant rotation from growth to value stocks in Asian markets, as tightening US monetary policy drove a de-rating in expensive growth stocks with longer-dated cash-flows. The market volatility was evident in both smaller companies and their larger counterparts, with, over the period, the MSCI Asia ex Japan Small Cap index broadly tracking the larger capitalisation MSCI Asia ex Japan index.

In this environment, your Company's net asset value (NAV) total return declined 2.0% over the 12 months to 31 July 2022. While this was a drop in absolute terms, it was ahead of the MSCI Asia ex Japan Small Cap Index which fell 5.1%.  It is also important to point out that the performance has also benefitted from the weakness of sterling relative to many Asian currencies and particularly the US dollar.  The share price ended the period at 254p, with the discount to NAV per share to 14.0%.

One of the advantages of serving as Chairman for over a quarter of a century, is to see how these periodical seismic events might affect the future prospects of this company- I believe this is the sixth during my tenure. In this regard, I think the following points are worth making:

-      As we have identified in previous statements and the reports we published to celebrate our 20th and 25th anniversaries (available on the website), Asia is the great engine of growth over the next 25 years and these events will, over time, only be a blip in that cycle;

-      From an Asian perspective, a war in Europe is a long way off and while it will affect global trade, its impact on domestic markets and in particularly small companies where we invest, will have a more limited impact; and

-      In times like these, opportunities to rotate out of mature, well managed businesses into ones where opportunities exist to make investments with higher growth potential at more attractive valuations occur and again this time, it is no different. The greater flexibility we granted the Managers with the lifting of market cap limit last year has widened the opportunity.

Since Hugh Young, Martin Gilbert and myself started, in 1995, as the first Directors of the Company with abrdn as the Manager, it has been immensely rewarding and satisfying to see the Company capitalise on the growth and dynamism of the Far East's diverse small-cap companies and economies, growing assets under management (AUM) from £34.0 million at the time of launch in 1995 to £532.9 million (as at 31 July 2022). We have seen the dividends grow during that period from a low of 0.11p in 1998 to 8.0p, after the share split, in the year on which we are reporting. I believe this record on both investment performance and dividend growth is amongst the best for investment companies quoted on the London Stock Exchange.

This, in particular, is thanks to Hugh Young. As the inspired Manager of the Trust since its inception, he has been the key to shaping the abrdn Far Eastern investment team into one of Asia's leading on-the-ground investors with exceptional access to companies, business leaders and policymakers across the region. In the last few years, he has been ably assisted by Gabriel Sacks and since last year, with the addition of Flavia Cheong and Neil Sun, this has further bolstered an already-impressive team.

As I have said, more often than not, in the fifty-three Chairman's Statements made to shareholders, the key to our success has been to only invest in companies with strong balance sheets, good management and excellent prospects. To identify these companies needs dedication from the Managers to seek out these investment nuggets; and the performance of the Company bears out the hard work they have done and continue to do.

It is also easy to forget the multitude of administrative matters that need attending to on a daily basis to ensure the smooth running of the Company. Over the years, the staff at abrdn have provided a seamless and efficient service and I would like to thank Charles Mearns, who has acted as Company Secretary for over 20 years and William Hemmings, who as head of Investment Trusts for 18 years has been a source of valuable advice together with my thanks to all the support staff in London, Aberdeen and Singapore both past and present.

In my last Annual Report as Chairman before stepping down in November, I am pleased to see the Trust has in place the necessary measures to take it to even greater strengths in the next 25 years and beyond.

Overview

Volatility was already creeping into global markets even before the onset of Russia's war in Ukraine. In 2022, central banks have been preoccupied with the prospect of recession and fending off inflation caused by rising commodity prices. Asian markets have proved more resilient during this unsettling period compared with other emerging markets. Inflation has been more moderate and, with post-Covid restrictions lifting, returning tourists and increased consumer spending from pent-up demand have led to a notable recovery in Southeast Asia, for example.

China was an exception. The country's 'zero-Covid' policy meant lockdowns continued to be imposed as authorities tried to contain new virus outbreaks. This dampened domestic activity and put further pressure on an economy that was already slowing as a result of a weak property market and tight regulatory conditions. As a result, China was among the region's worst performing markets during the period. It will be interesting to see if the much heralded 20th Communist Party Congress at the end of this month, besides extending the term of office of President Xi, signals any significant changes in policy; there have been hints of Central Bank easing of policy which the team in Singapore will be monitoring closely.

The Company's relatively light exposure to China buoyed performance relative to the index, but we believe the country remains a great opportunity for diligent stock pickers. With an indiscriminate sell-off in the market, your Manager added two new holdings, capitalising on more attractive valuations and reflecting a desire to gradually increase the Company's exposure to China (you can read more about this in the Investment Manager's Review section of this report).

Two changes implemented to your Company this year will help in this regard. The first is the removal of the US$1.5 billion market cap limit (at the time of initiation), which was agreed at the General Meeting in January 2022. This limit was proving a little restrictive in larger markets - especially China - and the Board believes that the removal of the cap will give your Manager greater flexibility to invest in the most compelling smaller companies in the region.

Secondly, and as referred to above, we have strengthened the investment team. During the period, we welcomed Flavia Cheong, abrdn's Head of Equities - Asia Pacific, as joint Manager alongside Hugh Young and Gabriel Sacks, and Neil Sun, who joins as an investment manager. These additions add depth and experience to your Company and will be beneficial as the team considers a potential increase in allocation to North Asia, leveraging off abrdn's deeper insights on Chinese small caps built over the past few years.

Looking elsewhere across the portfolio, there was strong share-price performance from commodity-related businesses or markets, such as those in Indonesia, or those more positively impacted by rising inflation, such as the shipping industry. Nevertheless, more export-oriented markets fared poorly, especially those associated with the tech supply-chain, such as Taiwan. Despite the marked correction in a few of the Trust's holdings, your Manager remains convinced of the structural growth for these businesses and would argue that the sell-off has thrown up opportunities to buy high-quality companies in this space.

We have also benefitted from a low exposure to Chinese domestic companies. While these have suffered in the pull back of markets, there will be considerable opportunities in the growing Chinese markets and this current reduction in values will present opportunities which will bear fruit in future years.

For a more detailed report of the Company's performance and portfolio changes, please read the Investment Manager's Review.

Dividend

In accordance with the enhanced dividend policy approved by shareholders, the Board has achieved the target dividend of 6.4p per Ordinary Share for the financial year ended 31 July 2022 (adjusted for the five for one share split that occurred on 4 February 2022) (2021 equivalent full-year dividend 3.2p after adjustment for the five for one share split) representing a 100% increase on the level of dividend paid in 2021.  Dividends of 3.2p, 1.6p and 1.6p were paid in March, June and September 2022.  Furthermore, I am very pleased to report that the 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 2022 of 1.6p per Ordinary share which will be paid on 20 December 2022 to shareholders on the register on the record date of 25 November 2022 (ex dividend 24 November 2022).

I believe that, in difficult times, this total dividend of 8.0p per share will be welcomed by shareholders especially as it is 25% higher than the annual target dividend.

The Board's policy 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.

Share Capital and Gearing

A five for one Share split was approved by shareholders on 27 January 2022 and, with effect from 4 February 2022, each Ordinary share of 25p was sub-divided into five Ordinary shares of 5p each.

During the period we have not bought back any Ordinary shares in the market. The Board will continue to consider the use of share buy backs to both reduce the volatility of any discount and to modestly enhance the NAV for shareholders.

The Company's net gearing at 31 July 2022 was 12.1% with the majority of the debt provided by the Loan Notes. Gearing is also provided by the Convertible Unsecured Loan Stock redeemable in 2025, of which approximately £36.6m million remains outstanding.  As at 14 October 2022, the latest practicable date, the net gearing stood at 14.0%.

Directorate

One of the important duties of the Board is to see that the members have the necessary skills to ensure that it is able to both monitor the existing mandate, but also make any necessary changes to that mandate to reflect the demands of a constantly shifting investment world. It is therefore my great pleasure to recommend the finalisation of the following appointments to the Board. Mr Lindsay Cooper joined on 15 June 2022 and Mr Alex Finn joined on 13 July 2022.

Mr Cooper brings a significant amount of Asian investment and small cap expertise to the Board and, being based in Singapore, is perfectly placed to assist in overseeing the execution of the Company's expanded investment mandate that was approved by shareholders in January 2022.   After working in corporate finance in Hong Kong in the early 1990s, Lindsay co-founded Arisaig Partners in 1996, an independent Investment Management business where he had investment responsibility for the Arisaig Asia Consumer Fund. Since stepping down from day to day investment responsibility at Arisaig, Lindsay founded Chic & Unique Pte Ltd, a boutique hotels and hospitality business with operations in Asia and Europe and, more recently, founded Chi Tree Health, a preventative healthcare enterprise in Singapore.

Mr Finn brings significant accounting expertise and international business experience to the Board. He has been appointed Chairman of the Audit Committee and was a partner for twenty seven years in PwC's global financial services practice, retiring on 30 June 2022. During his career at PwC Mr Finn was responsible for the services that PwC provided internationally to a number of its largest global clients, all of which had extensive operations in Asia.  He was also responsible for supporting clients in large scale accounting and financial change programmes, was PwC's EMEA insurance leader, sat on its EMEA FS leadership team and led a number of PwC's largest global audit engagements.  The Board has reviewed the independence of Mr Finn and is satisfied that, following his retirement from PwC where he had no involvement in any direct or indirect work for the Company or the Management Company, Mr Finn is fully independent.

The appointment process for both new Directors was conducted using the services and expertise of Fletcher Jones, an independent recruitment consultant.

I would also like to thank Debby Guthrie who resigned from the Board on 13 April 2022, for her contribution to not only the Board but also as Chairman of the Audit Committee.

As previously indicated, I will retire from the Board at the conclusion of the AGM on 30 November 2022. I am pleased to advise that Krishna Shanmuganathan has accepted an invitation from the other Directors to succeed me as independent Chairman from the conclusion of the AGM in November. Krishna's deep ties to Asia and his experience at the Foreign and Commonwealth Office, Fidelity International and then subsequently as Managing Partner of Hakluyt Asia, based in Singapore, will bring considerable knowledge and benefit to the Board deliberation and I wish him personally, and on your behalf, every success in his new role. 

The Board succession planning will continue in 2023.

Annual General Meeting

The Company's Annual General Meeting is scheduled for 12:30 p.m. on 30 November 2022 and the intention is for it to be held in person in London. The AGM will be preceded by a short presentation from the management team and following the formal business there will be a 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 January 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 16 November 2022.  At the presentation, shareholders will receive updates from the Chairman 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: https://www.workcast.com/register?cpak=4646856687011531.

Outlook

As we look forward, investing in Asia has advantages over both the short and long term. The region is proving to be less vulnerable to the current environment than other emerging markets - inflation is less of an issue, while current account and fiscal discipline has been more resilient to the deep downturns. In the longer term, there are several strong trends that should support economic growth, notably rising affluence, increased urbanisation, growing infrastructure demand and commitment from policymakers to a greener and lower-carbon future. Geopolitics, on the other hand, remain a thorny issue, but diversification might be investors' best hedge against a polarising world.

Valuations currently appear attractive, with the MSCI AC Asia ex Japan trading at a forward price-to-earnings ratio of 12.4x (below its five-year average), with the portfolio trading at similar multiples. At these levels, your Manager believes many of the prevailing risks, such as slower growth and higher inflation, could be largely priced in.

Looking specifically at the Trust's niche, we believe that Asia's rapidly developing economies continue to provide fertile ground for quality smaller companies. Asia is home to a wealth of under-researched yet high-performing companies which are often family-run, conservative businesses with low debt levels. For the most part, these companies are leaders in their field, and have growth rates that can be divorced from global macro conditions. Over the years, your Manager's strength has been the ability to select quality companies at a reasonable price; with a focus on balance sheet resilience and sustainable earnings prospects. I believe this positions it well to continue delivering healthy returns for shareholders in these challenging times.

On a personal note, I would like to say what an honour and delight it has been to serve as your Chairman over so long a period. It has been a source of great inspiration to not only see the developments in Asia during this period but also to see the enormous achievements that this Company has enjoyed. £1,000 invested in 1995 is now worth £21,052 with dividends reinvested. I can only wish everyone associated with the Company many thanks for the huge support they have given me and great success in the future.

 

Nigel Cayzer
Chairman
14 October 2022

 

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

From 27 January 2022:

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.

Up to 27 January 2022:

The Company aimed to maximise total return to shareholders over the long term from a portfolio made up predominantly of smaller quoted companies (with a market capitalisation of up to approximately US$1.5 billion at the time of investment) in the economies of Asia and Australasia, excluding Japan, by following the investment policy. When it was in shareholders' interests to do so, the Company reserved the right to participate in the rights issue of an investee company notwithstanding that the market capitalisation of that investee may exceed the stated ceiling.

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.

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.

A detailed description of the investment process and risk controls employed by abrdn Asia is disclosed on pages 106 to 108 of the published Annual Report and financial statements for the year ended 31 July 2022.  A comprehensive analysis of the Company's portfolio is disclosed on pages 30 to 37 of the published Annual Report and financial statements for the year ended 31 July 2022 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.

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.

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 on page 12 of the published Annual Report and financial statements for the year ended 31 July 2022.  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 30 November 2022 in London. We encourage shareholders to lodge their vote by proxy on all the resolutions put forward.
Online Shareholder Presentation	In January 2022 the Board held an online shareholder presentation which was attended by over 250 shareholders and prospective investors.
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 asia-focus.co.uk
Investor Relations	The Company subscribes to the Manager's Investor Relations programme (further details are provided under 'Promoting the Company' below).

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 106 to 108 and further information about the Manager is given on page 105 of the published Annual Report and financial statements for the year ended 31 July 2022.  Shareholders are key stakeholders in the Company - they are looking to the Manager to achieve the investment objective over time and to deliver a regular growing income together with some capital growth.  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. 

Board Investment Review During the year the Board concluded its comprehensive investment review which culminated in the following changes which were all approved by shareholders at the General Meeting held on 27 January 2022:

1.    amend the Company's Investment Policy;

2.    adopt the Company's enhanced New Dividend Policy;

3.    amend the Company's Articles in order to provide flexibility to pay dividends out of capital profits in the future, and refresh the Articles more generally, including in connection with the running of Shareholder meetings following the recent pandemic;

4.    enact a five for one Share split; and

5.    introduce a new five year performance-linked tender.

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 2022.
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 26 and 27 of the published Annual Report and financial statements for the year ended 31 July 2022.  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 26 and 27 of the published Annual Report and financial statements for the year ended 31 July 2022.
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 2022.
Dividend	The Board has set a target dividend of 6.4p per share and the aim is to maintain or increase the 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 2022.

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 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.

The Board notes that there are a number of contingent risks stemming from the Covid-19 pandemic and the conflict in Ukraine that may impact the operation of the Company. These include investment risks surrounding the companies in the portfolio such as employee absence, reduced demand, reduced turnover and global supply chain breakdowns. The Investment Manager will continue to review carefully the composition of the Company's portfolio and to be pro-active in taking investment decisions where necessary. Operationally, third party services have continued to be supplied seamlessly to the Company throughout the Covid-19 pandemic and the Board will continue to monitor arrangements in the form of periodic updates from the Manager and Investment Manager.

In addition to the risks listed below, the Board is also very conscious of the risks emanating from increased environmental, social and governance challenges. The recent scrutiny by western governments of human rights violations in Xinjiang is an example of the need for continued vigilance regarding the supply chain exposure of investee companies and the fair and humane treatment of workers. Likewise, 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.

In all other respects, the Company's principal risks and uncertainties have not changed materially since the date of this Annual Report and are not expected to change materially for the current financial year.

Description	Mitigating Action
Investment strategy and objectives - the setting of an unattractive strategic proposition to the market and the failure to adapt to changes in investor demand may lead to the Company becoming unattractive to investors, a decreased demand for shares and a widening discount.   Risk Unchanged during Year	The Board keeps the level of discount at which the Company's shares trade as well as the investment objective and policy under review and in particular holds an annual strategy meeting where the Board reviews updates from the Investment Manager, investor relations reports and the Broker on the market. In particular, the Board is updated at each Board meeting on the make-up of and any movements in the shareholder register.
Investment portfolio and investment management:  investing outside of the investment restrictions and guidelines set by the Board could result in poor performance and inability to meet the Company's objectives, as well as a weakening discount.   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. The Investment Manager is in attendance at all Board meetings. The Board also monitors the Company's share price relative to the NAV.
Financial obligations (Gearing): the requirement for the Company to meet its financial obligations, or increasing the level of gearing, could result in the Company becoming over-geared or unable to take advantage of potential opportunities and result in a loss of value to the Company's shares. It could also result in the Company being unable to meet the interest repayments due on the CULS and Loan Note holders.   Risk Unchanged during Year	The Board sets a gearing limit and receives regular updates on the actual gearing levels the Company has reached from the Investment Manager together with the assets and liabilities of the Company and reviews these at each Board meeting. In addition, abrdn Fund Managers Limited, as alternative investment fund manager, has set an overall leverage limit of 2x on a commitment basis (2.5x on a gross notional basis) and includes updates in its reports to the Board.
Financial and regulatory: the financial risks associated with the portfolio could result in losses to the Company. In addition, failure to comply with relevant regulation (including the Companies Act, the Financial Services and Markets Act, the Alternative Investment Fund Managers Directive, Accounting Standards and the listing rules, disclosure and prospectus rules) may have an impact on the Company.    Risk Unchanged during Year	The financial risks associated with the Company include market risk, liquidity risk and credit risk, all of which are mitigated by the Investment Manager. Further details of the steps taken to mitigate the financial risks associated with the portfolio are set out in note 19 to the financial statements. The Board relies upon the abrdn Group to ensure the Company's compliance with applicable regulations and from time to time employs external advisors to advise on specific concerns.
Operational: the Company is dependent on third parties for the provision of all systems and services (in particular, those of abrdn) and any control failures and gaps in these systems and services could result in a loss or damage to the Company.   Disruption, including that caused by information technology breakdown or another cyber-related issue, could prevent, for example, the functioning of the Company; accurate reporting to the Board or shareholders; or payment of dividends in accordance with the announced timetable   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.  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.
Investing in unlisted securities: the Company has the ability to invest in unlisted securities, although no such investments have been made to date.  Unquoted investments are long-term in nature and they may take a considerable period to be realised. Unquoted investments are less readily realisable than quoted securities. Such investments may therefore carry a higher degree of risk than quoted securities. In valuing investments the Company may rely to a significant extent on the accuracy of financial and other information provided to the Manager as well as the performance of listed peer multiples which may impact unquoted valuations negatively.   Risk Unchanged during Year	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 2022 no unlisted investments were made.
Market and F/X: insufficient oversight or controls over financial risks, including market risk, foreign currency risk, liquidity risk and credit risk could result in a loss to the Company.   Risk Increased during Year	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.
Major market event or geo-political risk - The Company is exposed to stockmarket volatility or illiquidity as a result of a major market shock due to a national or global crisis.  The impact of such risks, associated with the portfolio or the Company itself, could result in disruption to the operations of the Company and losses.   Risk Increased 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 the investment risks arising from the resurgence of Covid-19 and the impact of events in Ukraine on companies in the portfolio and takes the necessary investment decisions. The Manager monitors the potential for increased military tensions in East Asia, and other potential regional conflict.

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, with the stated aim of improving its diversity.  At 31 July 2022, there were five male Directors and one female Director on the Board.

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 40 ESG specialists around the world.  Please refer to pages 109 to 111 of the published Annual Report and financial statements for the year ended 31 July 2022 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 and flexibility of the Company's Loan Stock and Loan Notes; and

-      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 showing the impact of historic large economic shocks on the value and level of liquidity of the portfolio. This included modelling a further global pandemic and the global financial crisis of 2008 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 the Chairman'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:

 

Nigel Cayzer,
Chairman
14 October 2022

Investment Manager's Review

Performance review

Asian equities fared well during the first half of the period as vaccine programmes led to an easing of lockdown restrictions and an economic recovery. However, there has been a pronounced risk-off trade in place since the turn of the year, with investors rattled by disruption to global supply chains, soaring inflation, rising interest rates and Russia's invasion of Ukraine. This has manifested itself in investors rotating away from more expensive areas of the market − such as high-growth companies − towards value. When market conditions are as volatile and the macroeconomic backdrop as uncertain as they are currently, sticking to our investment process becomes even more important. The rigour that is central to our process has stood us in good stead this year, enabling us to deliver solid outperformance for shareholders.

Your Company benefitted from being overweight Indonesia, as the market was among the strongest in the Asian region. The Indonesian economy rebounded as the country emerged from Covid-related restrictions and commodity prices surged. Further, stock selection was good, with AKR Corporindo among the standouts after announcing consecutive record quarters for earnings. This was thanks to lower expenses and sustained strength in margins in its transmission and distribution division. The company is a beneficiary of a commodity upcycle, as it provides a boost to fuel sales and chemical-price inflation improves profitability as the company has fixed-percentage distribution margins. Medikaloka Hermina's share price also fared well. The company is rapidly increasing its network of hospitals to meet growing demand for medical services across the country, and profits more than doubled in 2021. The stock was also supported in the latter part of the period by major Indonesian conglomerate Astra International raising its stake in the company.

Elsewhere in Southeast Asia, stock selection in Malaysia and our exposure to Vietnam further contributed to performance. In Vietnam, IT-services business FPT Corp benefitted from the continued need for corporates to transition to the cloud and adapt their systems to newer technologies. Property developer Nam Long benefitted from a period of relatively loose monetary policy as well as from a housing recovery - although inflation pressure in recent months has turned Vietnam's central bank more cautious. Turning to North Asia, the fund's underweight to China served us well, given the raft of headwinds facing companies there, including macro and regulatory challenges, Beijing's zero-Covid policy and accumulated stress in the property sector. Chinese equities sold-off further this year in response to China's temporary lockdown of major cities like Shanghai to curb the spread of Covid-19.

Hong Kong-listed dry-bulk shipper Pacific Basin, on the other hand, was among the top contributors to performance. The company continues to enjoy a period of higher profits and better earnings visibility, given tight industry supply, resulting in large dividend payouts that have significantly enhanced shareholder returns. Elsewhere, shares in M.P. Evans, which operates plantations in Indonesia, traded higher due to the sharp rise in palm-oil prices, while Indian digital-advertising business Affle rose as revenue growth continues to exceed expectations. In addition, the firm is well positioned to increase profitability in other emerging markets, as underlined by its recent acquisition in Latin America. 

Your Company's exposure elsewhere in India dragged on performance. Elevated energy and commodity prices earlier this year contributed to inflation pressure that prompted the Reserve Bank of India to embark on raising interest rates. Higher prices combined with wavering outlook for global growth weighed on shares. Towards the end of the review period, Indian equities rebounded sharply, but the fund's underweight position relative to the comparative index proved costly. The Trust's holding in Vijaya Diagnostic Centre sold off amid growing concerns over competition in the diagnostics sector. In our view, the market has overestimated the importance of price and underappreciated more important business drivers such as branding, trust and service quality. Godrej Agrovet also lagged and we decided to divest the position to pursue other investments with greater earnings visibility

Further, the rotation away from technology stocks impacted the Trust's performance, with holdings in the tech-heavy markets of Taiwan and South Korea not immune from the broader sell-off in the sector globally. This included the likes of Taiwan Union Technology, Park Systems, Koh Young Technology and Douzone Bizon. Also in Taiwan, momo.com underperformed after a strong period of outperformance, as investors gravitated away from high-growth companies, despite the company reporting strong quarterly results. 

Your Company's exposure to Sri Lanka, through its holding in conglomerate John Keells, hurt performance given the country's turbulent economic and political backdrop. This manifested itself primarily via a devaluation of the currency, as the company's operations continue to recover from Covid-induced challenges and the share price in local currency terms has been relatively stable. Despite the undoubted challenges Sri Lanka faces, we believe there is value in John Keell's shares and feel the company is in a comfortable enough position to continue investing in its businesses, which is likely to strengthen its competitive moat over the long-term.

Portfolio activity

We think market volatility has created a price disconnect that is best exploited through a focus on company fundamentals. In line with this view, we took the opportunity to introduce some quality businesses that are well placed to ride on structurally growing themes, such as health care and technology. This should also help us mitigate the downside risks to growth from inflation. In a similar vein, we sold-out of some companies where we were less convinced of their long-term prospects, either due to disappointing execution or as a result of a rapidly changing macroeconomic environment.

As referenced in the Chairman's statement, we decided to increase the Trust's exposure to China following a sharp pullback in valuations This included introducing Sinoma Science and Technology, one of the largest wind-turbine blade producers in China and the third largest battery separator maker. Sinoma operates with the entrepreneurial culture of a private enterprise but, as a state-owned enterprise, has better access to resources, capital and research and development capabilities. We view the stock as a proxy for rising demand for renewable energy, including both wind and lithium batteries. Therefore, as well as being a high-quality operator, it has strong ESG credentials. We also added Joinn Laboratories, which offers drug safety assessment services on the mainland. Being an early mover in innovative drugs, Joinn has a solid track record, while its services cover the discovery, pre-clinical and clinical trial stages, underpinned by research excellence and experienced management.

We also purchased shares in South Korea's Leeno Industrial, which designs and manufactures equipment that is vital in the testing process of most electronic products. It is the global market leader in an industry where barriers to entry are high due to the considerable upfront investment required. Leeno supplies the largest semiconductor manufacturers globally and has a well-diversified customer base, spanning over a thousand clients. We are also positive about its longer-term prospects thanks to strong growth in end markets driven by 5G, artificial intelligence, medical devices and autonomous driving and electric vehicles. This is all backed by excellent financials. Its healthy free cash flow and net-cash balance sheet enables it to fund its capex and working capital internally and it consistently generates a return on equity in the high teens. Other additions to the Trust during the period include Andes Technology, MapmyIndia, IPH and Vijaya Diagnostic Centre.

Meanwhile, we divested the position in Singapore's Raffles Medical Group. Despite the firm announcing a good full-year result in February, we were concerned about the sustainability of Covid-related revenue and expect the business to see earnings recede for a period of time. Other exits include Aeon Credit Service Asia, Aeon Thana Sinsap, Goodyear, Orix Leasing, Ujjivan Financial Services, Yantai China Pet Foods and YNH Property.

Outlook

We expect Asian markets to remain volatile as the prevailing stress points of rising inflation - aggravated by the Ukraine conflict − and monetary policy normalisation continue to raise the probability of a global economic recession. China's economy also remains weak and although Beijing has adopted a more pro-growth stance of late, continued monetary and fiscal support will be required to revive economic activity and much will depend on the extent to which the government decides to loosen its 'zero-Covid' measures. Elsewhere across the region, the recovery in Southeast Asia is gathering pace amid further progress in the reopening of economies.

Despite serious macroeconomic and geopolitical pressures, we have yet to see significant deterioration in company fundamentals across the region, and the operating performance of the Trust's holdings has proven to be resilient. Corporate Asia will continue to battle the twin challenges of higher input costs and rising interest rates, but we remain encouraged about your companies' pricing power and debt-free balance sheets.

Despite the more uncertain near-term outlook, our confidence in the long-term growth prospects for the Asian region remains undimmed. The opportunities for growth are plentiful, especially within the smaller companies' space, and we remain positioned around structural growth themes like domestic consumption, technology and green energy. Indeed, the turbulence in markets has resulted in more palatable valuations, creating enticing opportunities for investors like us who are here for the long run.

 

Flavia Cheong, Gabriel Sacks, Neil Sun & Hugh Young
abrdn Asia Limited
14 October 2022

 

Results

Performance (total return)

	1 year	3 year	5 year	10 year	Since
	% return	% return	% return	% return	inception
Share priceA	-1.7	+18.0	+31.9	+102.8	+2005.2
Net asset value per Ordinary share - dilutedAB	-2.0	+20.2	+34.8	+130.6	+2115.6
MSCI AC Asia ex Japan Small Cap Index (currency adjusted)	-5.1	+31.9	+32.6	+125.3	n/a
A Considered to be an Alternative Performance Measure (see 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 Year Financial Record

Year to 31 July	2013	2014	2015	2016	2017	2018	2019	2020	2021	2022
Total revenue (£'000)	11,512	11,427	14,746	10,992	13,896	14,673	14,632	13,595	9,624	18,071
Per share (p)A
Net revenue returnB	2.77	2.29	3.64	1.84	3.86	3.85	4.33	4.29	1.66	9.34
Total return	55.09	(6.29)	(10.03)	33.08	34.46	7.36	15.64	(36.51)	92.34	(7.02)
Net ordinary dividends paid/proposed	2.00	2.00	2.10	2.10	2.40	2.60	2.80	2.90	3.00	6.40
Net special dividends paid/proposed	0.60	0.60	0.90	-	0.80	0.80	1.00	0.90	0.20	1.60
Net asset value per share (p)A
Basic	202.76	193.78	181.23	213.78	247.09	246.37	260.11	221.29	310.90	295.88
Diluted	198.56	190.50	179.26	208.60	238.50	n/a	n/a	n/a	309.02	295.25
Shareholders' funds (£'000)	382,932	369,118	343,967	383,735	430,105	433,706	441,010	358,956	487,958	464,396
A Figures for 2013-2021 have been restated to reflect the 5:1 sub-division as disclosed in note 14.
B Figure for 2021 adjusted as disclosed in note 22.

 

Ten Largest Investments

As at 31 July 2022

3.5% Total assets	Affle India		3.5% Total assets	AKR Corporindo
	A consumer technology business operating a data platform that helps direct digital advertising.  It is dominant in India where digitalisation has reached an inflection point. This should support growth for several years.			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.
3.3% Total assets	AEM Holdings		3.2% Total assets	Park Systems Corporation
	A Singapore-based provider of advanced semiconductor chip testing services that has embedded itself in chipmaker Intel's global supply chain.			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. The company's financials are sound, despite significant upfront sales and distribution costs. This provides a solid base for earnings to grow when orders return.
3.2% Total assets	Pacific Basin Shipping		3.0% Total assets	MOMO.com
	Pacific Basin is a Hong Kong-based dry bulk shipping group with a favourable demand outlook, supported by an improving global economy and reopening prospects.			Momo, the largest online retailer in Taiwan, serves as a nice proxy for consumer growth in the country, as it is benefiting from the shift to online from both consumers and vendors.
3.0% Total assets	Sinoma Science & Technology - A		2.9% Total assets	FPT Corporation
	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. We view the stock as a proxy for the growth of wind energy.			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. We are upbeat about the profitability prospects of the various segments, given its entrepreneurial management.
2.8% Total assets	Nam Long Invst Corporation		2.8% Total assets	Medikaloka Hermina
	A reputable Vietnamese developer in Ho Chi Minh City that focuses on the  affordable housing segment, with decent land bank and promising project pipeline.			Medikaloka Hermina is the leading hospital chain in Indonesia built for the mass market, being the lowest cost operator that has been able to make decent margins at lower charges. It is well positioned for the growing penetration and awareness of health care in the country.

 

Portfolio

 

As at 31 July 2022
			Valuation	Total	Valuation
			2022	assets	2021
Company	Industry	Country	£'000	%	£'000
Affle India	Media	India	18,847	3.5	17,554
AKR Corporindo	Oil, Gas & Consumable Fuels	Indonesia	18,389	3.5	9,589
AEM Holdings	Semiconductors & Semiconductor Equipment	Singapore	17,802	3.3	14,267
Park Systems Corporation	Electronic Equipment, Instruments & Components	South Korea	17,120	3.2	21,736
Pacific Basin Shipping	Marine	Hong Kong	17,104	3.2	24,170
MOMO.com	Internet & Direct Marketing Retail	Taiwan	16,160	3.0	33,767
Sinoma Science & Technology - A	Chemicals	China	15,756	3.0	-
FPT Corporation	IT Services	Vietnam	15,444	2.9	12,894
Nam Long Invest Corporation	Real Estate Management & Development	Vietnam	15,030	2.8	15,279
Medikaloka Hermina	Health Care Providers & Services	Indonesia	14,656	2.8	11,704
Top ten investments			166,308	31.2
Cyient	Software	India	14,016	2.6	17,445
M.P. Evans Group	Food Products	United Kingdom	13,857	2.6	11,660
Aegis Logistics	Oil, Gas & Consumable Fuels	India	13,716	2.6	13,799
Dah Sing Financial Holdings	Banks	Hong Kong	13,682	2.6	11,709
Mega Lifesciences (Foreign)	Pharmaceuticals	Thailand	13,524	2.6	10,578
Bank OCBC NISP	Banks	Indonesia	13,356	2.5	13,593
Joinn Laboratories China	Life Sciences Tools & Services	China	12,745	2.4	-
UIE	Food Products	Denmark	12,352	2.3	10,157
Oriental Holdings	Automobiles	Malaysia	12,281	2.3	8,792
Precision Tsugami China Corporation	Machinery	China	11,973	2.2	12,403
Top twenty investments			297,810	55.9
Sunonwealth Electric Machinery Industry	Machinery	Taiwan	11,071	2.1	10,423
Asian Terminals	Transportation Infrastructure	Philippines	10,161	1.9	9,852
Millennium & Copthorne Hotels New ZealandA	Hotels, Restaurants & Leisure	New Zealand	9,808	1.8	10,626
AEON Credit Service (M)	Consumer Finance	Malaysia	9,701	1.8	7,553
Cebu Holdings	Real Estate Management & Development	Philippines	9,664	1.8	12,069
Bukit Sembawang Estates	Real Estate Management & Development	Singapore	9,322	1.7	9,186
Sporton International	Professional Services	Taiwan	9,123	1.7	9,619
Ultrajaya Milk Industry & Trading	Food Products	Indonesia	9,030	1.7	8,525
Hana Microelectronics (Foreign)	Electronic Equipment, Instruments & Components	Thailand	8,736	1.7	14,304
IPH	Professional Services	Australia	7,940	1.5	-
Top thirty investments			392,366	73.6
John Keells Holdings	Industrial Conglomerates	Sri Lanka	7,640	1.4	13,941
Prestige Estates Projects	Real Estate Management & Development	India	7,162	1.3	5,521
Sanofi India	Pharmaceuticals	India	6,770	1.3	9,243
Syngene International	Life Sciences Tools & Services	India	6,521	1.2	3,976
LEENO Industrial	Semiconductors & Semiconductor Equipment	South Korea	6,322	1.2	-
Yoma Strategic Holdings	Real Estate Management & Development	Myanmar	5,943	1.1	5,392
Shangri-La Hotels Malaysia	Hotels, Restaurants & Leisure	Malaysia	5,867	1.1	5,740
United Plantations	Food Products	Malaysia	5,815	1.1	5,097
Taiwan Union	Electronic Equipment, Instruments & Components	Taiwan	5,778	1.1	10,693
Vijaya Diagnostic Centre	Health Care Providers & Services	India	5,645	1.1	-
Top forty investments			455,829	85.5
Absolute Clean Energy (Foreign)	Independent Power and Renewable Electricity Producers	Thailand	5,115	1.0	7,313
Koh Young Technology	Semiconductors & Semiconductor Equipment	South Korea	4,879	0.9	8,347
Nanofilm Technologies International	Chemicals	Singapore	4,856	0.9	13,347
Pentamaster International	Semiconductors & Semiconductor Equipment	Malaysia	4,850	0.9	4,271
Tisco Financial Group (Foreign)	Banks	Thailand	4,827	0.9	5,154
KMC Kuei Meng International	Leisure Products	Taiwan	4,560	0.9	3,315
Convenience Retail Asia	Food & Staples Retailing	Hong Kong	4,314	0.8	3,467
NZX	Capital Markets	New Zealand	4,253	0.8	6,427
Aspeed Technology	Semiconductors & Semiconductor Equipment	Taiwan	3,652	0.7	5,543
Tatva Chintan Pharma	Chemicals	India	3,565	0.7	2,132
Top fifty investments			500,700	94.0
Andes Technology	Semiconductors & Semiconductor Equipment	Taiwan	3,470	0.6	-
Nazara Technologies	Entertainment	India	3,434	0.6	5,583
Credit Bureau Asia	Professional Services	Singapore	3,228	0.6	3,778
Ecloudvalley Digital Technology	IT Services	Taiwan	3,180	0.6	5,142
Douzone Bizon	Software	South Korea	3,108	0.6	4,157
Thai Stanley Electric (Foreign)	Auto Components	Thailand	2,912	0.5	4,680
CE Info Systems	Software	India	2,421	0.5	-
Manulife Holdings	Insurance	Malaysia	1,675	0.3	1,561
AEON Stores Hong Kong	Multiline Retail	Hong Kong	279	0.1	473
First Sponsor Group (Warrants 21/03/2029)	Real Estate Management & Development	Singapore	276	0.1	303
Top sixty investments			524,683	98.5
First Sponsor Group (Warrants 30/05/2024)	Real Estate Management & Development	Singapore	158	-	32
G3 Exploration	Oil, Gas & Consumable Fuels	China	-	-	-
Total investments			524,841	98.5
Net current assets			8,071	1.5
Total assetsB			532,912	100.0
A Holding includes investment in both common and preference lines.
B Total assets less current liabilities.

 

Directors' Report

 

The Directors present their Report and the audited financial statements for the year ended 31 July 2022.

Change of Name

On 4 April 2022 the Company changed its name from Aberdeen Standard Asia Focus PLC to abrdn Asia Focus plc.

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 2022 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.  On 4 February 2022 the Company completed a five for one share split and shareholders received five New Ordinary Shares of 5p each in exchange for each existing Ordinary Share of 25p held as at the close of business on 3 February 2022. The new Ordinary shares of 5p each retained the Stock Exchange ticker (AAS) but were assigned a new ISIN and SEDOL as follows:

New ISIN: GB00BMF19B58

New SEDOL: BMF19B5

At 31 July 2022, there were 156,953,631 fully paid Ordinary shares of 5p each (2021 - 31,189,684 Ordinary shares of 25p each) in issue with a further 51,744,590 Ordinary shares of 5p held in treasury (2021 - 10,348,918 Ordinary shares of 25p each held in treasury). During the year no Ordinary shares were purchased in the market for treasury (2021 - 1,055,000 Ordinary shares of 25p each purchased for treasury).  During the period and up to the date of this report no new Ordinary shares were issued for cash and no shares were sold from or purchased into treasury.

On 14 December 2021, 13,764 units of Convertible Unsecured Loan Stock 2025 were converted into 935 new Ordinary shares of 25p each.  On 14 June 2022 1,579 units of Convertible Unsecured Loan Stock 2025 were converted into 536 new Ordinary shares of 5p each.  In accordance with the terms of the CULS Issue, (subsequently adjusted to reflect the share split in February 2022), the conversion price of the CULS for the December conversion was determined at 1465.0p nominal of CULS for one Ordinary share of 25p and the conversion price for the June conversion 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 15 year 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. The Loan Note ranks pari passu with the Company's other unsecured and unsubordinated financial indebtedness. The Company used the proceeds of the Loan Note issue to repay, and cancel in full, the Company's loan facility with RBS and the remainder was invested in the portfolio by the Investment Manager. 

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 Aberdeen Asset Management PLC and promotional activities to Aberdeen Asset Managers Limited ("AAML"). 

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 . Previously, the monthly management fee was charged at 0.08%. 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 (reduced from 12 months). 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 (2021 - nil) and has not made any charitable donations during the year (2021 - 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, N K Cayzer, Randal Dunluce (The Earl of Antrim), C Black, K Shanmuganathan, L Cooper (appointed 15 June 2022) and A Finn (appointed 13 July 2022), together with D Guthrie who resigned on 13 April 2022, were the only Directors who served during the year. During the period Viscount Dunluce succeeded to the title Earl of Antrim following the death of his father. 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 30 November 2022 and will offer themselves for re-election.  Details of each Director's contribution to the long term success of the Company are provided on page 50 of the published Annual Report and financial statements for the year ended 31 July 2022.

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 Chairman

The Chairman 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 Chairman facilitates the effective contribution, and encourages active engagement, by each Director. In conjunction with the Company Secretary, the Chairman ensures that Directors receive accurate, timely and clear information to assist them with effective decision-making. The Chairman 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 Chairman also engages with major shareholders and ensures that all Directors understand shareholder views.

The Company has not appointed a senior independent director. Accordingly the Audit Committee Chairman in combination with the other independent Directors fulfils the duties of the senior independent director, acting as a sounding board for the Chairman and acting as an intermediary for other directors as applicable. The Audit Committee Chairman is also available to shareholders to discuss any concerns they may have.

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);

5.     senior independent director (provision 12); and

6.     tenure of the Chairman (provision 19).

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. The tenure of the Chairman is discussed further under 'Policy on Tenure', below.  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 2022, the Board had six 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 to discuss investment strategy. 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 2022 (with their eligibility to attend the relevant meeting in brackets):

Director	Board	Audit Com	Nomination Com	Management Engagement Com
N Cayzer A	6 (6)	n/a	3 (3)	1 (1)
C Black	6 (6)	2 (2)	3 (3)	1 (1)
Earl of Antrim	6 (6)	2 (2)	3 (3)	1 (1)
D Guthrie B	4 (4)	2 (2)	2 (2)	1 (1)
K Shanmuganathan	5 (5)	2 (2)	3 (3)	1 (1)
L. Cooper C	1 (1)	0 (0)	1 (1)	0 (0)
A Finn D	1 (1)	0 (0)	0 (0)	0 (0)
A Mr Cayzer is not a member of the Audit Committee
B Ms Guthrie resigned from the Board on 13 April 2022
C Mr Cooper was appointed to the Board on 15 June 2022 D Mr Finn was appointed to the Board on 13 July 2022

Policy on Tenure - Chairman

The Company's policy, which is kept under very regular review, is in line with the Listing Rules, the Chairman must remain independent of the Manager and the Company.  The independent Directors believe that the independence of the Chairman should be judged by the degree to which the interests of the shareholders and stakeholders as a whole are being served.  The Directors note that Mr Cayzer will be retiring from the Board at the conclusion of the Annual General Meeting on 30 November 2022 and Mr Shanmuganathan has accepted the Board's invitation to become Chairman from that date.

Policy on Tenure - Directors

The Board's policy on tenure is that Directors need not serve on the Board for a limited period of time only. The Board does not consider that the length of service of a Director is as important as the contribution he or she has to make, and therefore the length of service will be determined on a case-by-case basis. In accordance with corporate governance best practice, all Directors, including those who have served for more than nine years or who are non-independent, voluntarily offer themselves for re-election on an annual basis. 

Board Committees

Audit Committee

The Audit Committee Report is on pages 61 to 63 of of the published Annual Report and financial statements for the year ended 31 July 2022.

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.

During the year the Nomination Committee conducted a search for two new non executive Directors 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 appointment of Mr Lindsay Cooper on 15 June 2022 and the appointment of Mr Alex Finn on 13 July 2022.

The Board undertakes an annual evaluation of the Board, Directors, the Chairman and the Audit Committee which is conducted by questionnaires.  The 2022 evaluation 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 election and re-elections at the AGM on 30 November 2022. Notwithstanding that Mr Cayzer intends to retire from the Board at the AGM on 30 November 2022, the Committee wishes to reiterate its belief that Mr Cayzer remains independent of the Manager.  Ms Black has brought significant financial promotion and marketing expertise to the Board and has been closely involved in the redevelopment of the Company's website during the year; the Earl of Antrim has continued to bring detailed wealth management investment experience and insight to the Board; and Mr Shanmuganathan has continued to bring his deep experience of Asia as well as significant strategic and financial vision to the Board. Although Mr Cooper and Mr Finn were appointed to the Board immediately prior to the Company's year end they have already settled into their roles seamlessly and, respectively, are bringing excellent regional/investment experience and expert relevant and recent accounting and financial experience to the Board. For the foregoing reasons, the independent members of the Nomination Committee have no hesitation in recommending the election/re-election of each Director who will be submitting themselves for re-election at the AGM on 30 November 2022.

Management Engagement Committee

The Management Engagement Committee comprises all of the Directors and was chaired by Ms Guthrie up to her resignation in April 2022 and subsequently by the Chairman.  The Committee is now chaired by Mr Finn following his appointment to the Board on 13 July 2022. 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 Chairman.

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 56 to 59 of the published Annual Report and financial statements for the year ended 31 July 2022.

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 September 2022 meeting, the Audit Committee carried out an annual assessment of internal controls for the year ended 31 July 2022 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 2022. 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 covering the impact of significant historical market events such as the 1997 Asian Crisis and 2008 Global Financial Crisis 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 and they believe that the Company has adequate financial resources to continue its operational existence for a period of not less than 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 current market conditions caused by the Covid-19 pandemic and the conflict in Ukraine. 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 60 and 71 of the published Annual Report and financial statements for the year ended 31 July 2022, respectively.

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 January 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 2022:

Shareholder	No. of Ordinary shares held	% held
City of London Investment Management Company	35,545,725	22.7
Allspring Global Investments	17,499,145	11.2
Interactive Investor (non-beneficial)	12,730,109	8.1
abrdn Savings Scheme (non-beneficial)	12,603,327	8.0
Hargreaves Lansdown (non-beneficial)	11,495,052	7.3
Funds managed by abrdn	6,506,327	4.2
Charles Stanley	5,643,336	3.6
1607 Capital Partners	5,139,291	3.3

On 16 September 2022 the Company received notice that City of London Investment Management Company had increased its interest to 36,113,225 Ordinary shares, representing 23.0% of the issued capital. There have been no other significant changes notified in respect of the above holdings between 31 July 2022 and 14 October 2022.

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.

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 104,635,754 shares in total (representing approximately 2/3 of the existing issued capital of the Company), of which a maximum of 52,317,877 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 2023.  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 3, 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
Aberdeen Asset Management PLC -Secretaries
Bow Bells House, 1 Bread Street
London EC4M 9HH
14 October 2022

 

Statement of Comprehensive Income

 

		Year ended 31 July 2022			Year ended 31 July 2021
					(*Restated)	(*Restated)
		Revenue	Capital	Total	Revenue	Capital	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000
(Losses)/gains on investments	10	-	(22,324)	(22,324)	-	148,078	148,078
Income	3	18,071	-	18,071	9,624	-	9,624
Exchange gains/(losses)		-	72	72	-	(425)	(425)
Investment management fees	4	(801)	(2,403)	(3,204)	(3,570)	-	(3,570)
Administrative expensesA	5,22	(1,163)	(398)	(1,561)	(1,136)	(250)	(1,386)
Net return before finance costs and taxation		16,107	(25,053)	(8,946)	4,918	147,403	152,321
Finance costs	6	(499)	(1,497)	(1,996)	(1,732)	-	(1,732)
Net return before taxation		15,608	(26,550)	(10,942)	3,186	147,403	150,589
Taxation	7	(956)	876	(80)	(550)	(3,556)	(4,106)
Net return after taxation		14,652	(25,674)	(11,022)	2,636	143,847	146,483
Return per share (pence)B:	9
Basic		9.34	(16.36)	(7.02)	1.66	90.68	92.34
Diluted		8.75	n/a	n/a	n/a	84.04	85.95
A Further details of the restatement can be found in note 22.
B Figures for 2021 have been restated to reflect the 5:1 sub-division as disclosed in note 14.
For the year ended 31 July 2022 the conversion option for potential Ordinary shares within the Convertible Unsecured Loan Stock was dilutive to the revenue return per Ordinary share but non-dilutive to the capital return per Ordinary share (2021 - non-dilutive to revenue but 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 2021
		31 July 2022	(*Restated)
	Notes	£'000	£'000
Fixed assets
Investments at fair value through profit or loss	10	524,841	540,921
Current assets
Debtors and prepayments	11	1,464	5,107
Cash and short term deposits		9,471	14,577
		10,935	19,684
Creditors: amounts falling due within one year
Other creditors	12	(2,864)	(3,422)
Net current assets		8,071	16,262
Total assets less current liabilities		532,912	557,183
Non-current liabilities
2.25% Convertible Unsecured Loan Stock 2025	13	(35,940)	(35,708)
3.05% Senior Unsecured Loan Note 2035	13	(29,892)	(29,886)
Deferred tax liability on Indian capital gains	13	(2,684)	(3,631)
		(68,516)	(69,225)
Net assets		464,396	487,958
Capital and reserves
Called up share capital	14	10,435	10,435
Capital redemption reserve		2,062	2,062
Share premium account		60,428	60,412
Equity component of 2.25% Convertible Unsecured Loan Stock 2025	13	1,057	1,057
Capital reserve (*restated)A	15,22	375,450	401,124
Revenue reserve (*restated)A	22	14,964	12,868
Total shareholders' funds		464,396	487,958
Net asset value per share (pence)B:
Basic	16	295.88	310.90
Diluted	16	295.25	309.02
A Further details of the restatement can be found in note 22.
B Figures for 2021 have been restated to reflect the 5:1 sub-division as disclosed in note 14.
The financial statements were approved by the Board of Directors and authorised for issue on 14 October 2022 and were signed on behalf of the Board by:
Nigel Cayzer
Chairman
The accompanying notes are an integral part of the financial statements.

 

Statement of Changes in Equity

For the year ended 31 July 2022
			Capital	Share	Equity	Capital	Revenue
		Share	redemption	premium	Component	reserve	reserve
		capital	reserve	account	CULS 2025	(*Restated)	(*Restated)	Total
	Note	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 1 August 2021 (*restated)	22	10,435	2,062	60,412	1,057	401,124	12,868	487,958
Conversion of 2.25% CULS 2025	13	-	-	16	-	-	-	16
Return 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
For the year ended 31 July 2021
			Capital	Share	Equity	Capital	Revenue
		Share	redemption	premium	Component	reserve	reserve
		capital	reserve	account	CULS 2025	(*Restated)	(*Restated)	Total
	Note	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 1 August 2020		10,434	2,062	60,377	1,057	268,750	16,276	358,956
Conversion of 2.25% CULS 2025	13	1	-	35	-	-	-	36
Purchase of own shares to treasury	14	-	-	-	-	(11,473)	-	(11,473)
Return after taxation (*restated)A	22	-	-	-	-	143,847	2,636	146,483
Dividends paid	8	-	-	-	-	-	(6,044)	(6,044)
Balance at 31 July 2021		10,435	2,062	60,412	1,057	401,124	12,868	487,958
A Further details of the restatement can be found in note 22.
The accompanying notes are an integral part of the financial statements.

 

Statement of Cash Flows

		Year ended	Year ended
		31 July 2022	31 July 2021
	Notes	£'000	£'000
Cash flows from operating activities
Return before finance costs and tax		(8,946)	152,321
Adjustments for:
Dividend income	3	(18,057)	(9,620)
Interest income	3	(14)	-
Dividends received		18,307	9,880
Interest received		10	-
Interest paid		(1,742)	(1,346)
Losses/(gains) on investments	10	22,324	(148,078)
Foreign exchange movements		(72)	425
Decrease/(increase) in prepayments		18	(20)
Decrease in other debtors		11	5
Increase in other creditors		1,439	113
Stock dividends included in investment income		(174)	(233)
Overseas withholding tax suffered	7	(1,439)	(690)
Net cash inflow from operating activities		11,665	2,757
Cash flows from investing activities
Purchase of investments		(81,319)	(81,406)
Sales of investments		77,032	81,562
Indian capital gains tax rebate on sales		-	101
Net cash (outflow)/inflow from investing activities		(4,287)	257
Cash flows from financing activities
Purchase of own shares for treasury		-	(11,570)
Repayment of loan		-	(11,200)
Drawdown of 3.05% Senior Unsecured Loan Note 2035	13	-	29,882
Equity dividends paid	8	(12,556)	(6,043)
Net cash (outflow)/inflow from financing activities		(12,556)	1,069
(Decrease)/increase in cash and cash equivalents		(5,178)	4,083
Analysis of changes in cash and short term deposits
Opening balance		14,577	10,919
(Decrease)/increase in cash and short term deposits		(5,178)	4,083
Foreign exchange movements		72	(425)
Closing balance		9,471	14,577
The accompanying notes are an integral part of the financial statements.

 

Notes to the Financial Statements

For the year ended 31 July 2022

 

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 and going concern. 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 April 2021. 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.
		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 1997 Asian Crisis and 2008 Global Financial Crisis 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 and they believe that the Company has adequate financial resources to continue its operational existence for a period of not less than 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 current market conditions caused by the Covid-19 pandemic and the conflict in Ukraine. 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. With effect from 1 August 2021, 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 (2021 - 25p). 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 2022 may not be available at the time of any future distribution due to movements between 31 July 2022 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 36 of the published Annual Report and financial statements for the year ended 31 July 2022 .

 

3.	Income
		2022	2021
		£'000	£'000
	Income from investments
	Overseas dividends	17,292	9,015
	UK dividend income	591	372
	Stock dividends	174	233
		18,057	9,620
	Other income
	Deposit interest	14	-
	Other income	-	4
		14	4
	Total income	18,071	9,624

 

4.	Investment management fees
		2022			2021
		Revenue	Capital	Total	Revenue	Capital	Total
		£'000	£'000	£'000	£'000	£'000	£'000
	Investment management fees	801	2,403	3,204	3,570	-	3,570
	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").
	With effect from 1 August 2021, the management fee has been 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. It was previously set at 0.96% per annum of market capitalisation. 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 £2,138,000 (2021 - £663,000) which represents nine months' fees (2021 - two 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.
	With effect from 1 August 2021, management fees are charged 25% to revenue and 75% to capital (previously 100% to revenue).

 

5.	Administrative expenses
			2022	2021
			£'000	£'000
	Administration feesA		103	99
	Directors' feesB		144	157
	Promotional activitiesC		219	219
	Auditors' remuneration:
	- fees payable to the auditors for the audit of the annual financial statements		42	44
	Custodian charges		293	276
	Depositary fees		49	47
	Registrar fees		51	44
	Legal and professional fees D		87	331
	Other expenses		175	169
			1,163	1,386
	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 £52,000 (2021 - £25,000). 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 (2021 - £219,000). There was a £73,000 (2021 - £73,000) balance due to abrdn plc at the year end.
	D As per note 22, the Statement of Comprehensive Income, the Statement of Financial Position and the Statement of Changes in Equity for the year ended 31 July 2021 have been restated to reallocate costs of £250,000 incurred during that period in relation to the long-term investment strategy review from revenue to capital. There has been no change to the overall charge for the year ended 31 July 2021 of £331,000.

 

6.	Finance costs
		2022			2021
		Revenue	Capital	Total	Revenue	Capital	Total
		£'000	£'000	£'000	£'000	£'000	£'000
	Loans repayable in less than one year	-	-	-	50	-	50
	Interest on 3.05% Senior Unsecured Loan Note 2035	230	691	921	611	-	611
	Interest on 2.25% CULS 2025	207	620	827	824	-	824
	Notional interest on 2.25% CULS 2025	39	115	154	153	-	153
	Amortisation of 2.25% CULS 2025 issue expenses	23	71	94	94	-	94
		499	1,497	1,996	1,732	-	1,732
	With effect from 1 August 2021, finance costs have been charged 25% to revenue and 75% to capital (previously 100% to revenue).

 

7.	Taxation
				2022			2021
			Revenue	Capital	Total	Revenue	Capital	Total
			£'000	£'000	£'000	£'000	£'000	£'000
	(a)	Analysis of charge for the year
		Indian capital gains tax rebate on sales	-	-	-	-	(101)	(101)
		Overseas taxation	956	71	1,027	550	26	576
		Total current tax charge for the year	956	71	1,027	550	(75)	475
		Deferred tax charge on Indian capital gains	-	(947)	(947)	-	3,631	3,631
		Total tax charge for the year	956	(876)	80	550	3,556	4,106
		The Company has recognised a deferred tax liability of £2,684,000 (2021 - £3,631,000) on capital gains which may arise if Indian investments are sold.
		At 31 July 2022 the Company had surplus management expenses and loan relationship deficits of £70,420,000 (2021 - £64,205,000) 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 £17,605,000 (2021 - £16,051,000).
	(b)	Factors affecting the tax charge for the year. The tax assessed for the year is higher (2021 - lower) than the current standard rate of corporation tax in the UK for a large company of 19% (2021 - 19%). The differences are explained below:
				2022			2021
						(*Restated)	(*Restated)
			Revenue	Capital	Total	Revenue	Capital	Total
			£'000	£'000	£'000	£'000	£'000	£'000
		Return before taxationA	15,608	(26,550)	(10,942)	3,186	147,403	150,589
		Return multiplied by the standard tax rate of corporation tax of 19%A	2,966	(5,045)	(2,079)	605	28,007	28,612
		Effects of:
		Losses/(gains) on investments not taxable	-	4,242	4,242	-	(28,135)	(28,135)
		Exchange (gains)/losses	-	(14)	(14)	-	81	81
		Overseas tax	956	71	1,027	550	26	576
		Indian capital gains tax rebate on sales	-	-	-	-	(101)	(101)
		Movement in deferred tax liability on Indian capital gains	-	(947)	(947)	-	3,631	3,631
		UK dividend income	(112)	-	(112)	(71)	-	(71)
		Non-taxable dividend income	(3,319)	-	(3,319)	(1,757)	-	(1,757)
		Expenses not deductible for tax purposes	25	76	101	25	-	25
		Movement in unutilised management expensesA	345	457	802	869	47	916
		Movement in unutilised loan relationship deficits	95	284	379	329	-	329
		Total tax charge for the year	956	(876)	80	550	3,556	4,106
		A Further details of the restatement can be found in note 22.

 

8.	Dividends
		2022	2021
		£'000	£'000
	Final dividend for 2021 - 3.0p (2020 - 2.9p)	4,708	4,612
	Special dividend for 2021 - 0.2p (2020 - 0.9p)	314	1,431
	Interim dividend for 2022 - 3.2p (2021 - nil)	5,023	-
	Interim dividend for 2022 - 1.6p (2021 - nil)	2,511	-
	Write off 2018 dividend debtor	-	1
		12,556	6,044
	Proposed final and special dividends are subject to approval by shareholders at the Annual General Meeting and 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 £14,652,000 (2021 (*restated- £2,636,000).
		2022	2021
		£'000	£'000
	Interim dividend for 2022 - 3.2p (2021 - nil)	5023	-
	Interim dividend for 2022 - 1.6p (2021 - nil)	2511	-
	Interim dividend for 2022 - 1.6p (2021 - nil)	2511	-
	Proposed final dividend for 2022 - nil (2021 - 3.0p)	-	4,708
	Proposed special dividend for 2022 - 1.6p (2021 - 0.2p)	2,511	314
		12,556	5,022
	The amount reflected above for the cost of the proposed final and special dividend for 2022 is based on 156,953,631 Ordinary shares, being the number of Ordinary shares in issue excluding shares held in treasury at the date of this Report.
	The rates disclosed for prior year has been restated to reflect the 5:1 sub-division as disclosed in note 14.

 

9.	Return per share
			2022			2021
					(*Restated)	(*Restated)
		Revenue	Capital	Total	Revenue	Capital	Total
	Basic
	Return after taxation (£'000)	14,652	(25,674)	(11,022)	2,636	143,847	146,483
	Weighted average number of shares in issueA			156,951,436			158,635,715
	Return per share (p)	9.34	(16.36)	(7.02)	1.66	90.68	92.34
			2022			2021
	Diluted	Revenue	Capital	Total	Revenue	Capital	Total
	Return after taxation (£'000)	14,831	(25,139)	(10,308)	3,253	143,847	147,100
	Weighted average number of shares in issueAB			169,459,584			171,154,920
	Return per share (p)	8.75	n/a	n/a	n/a	84.04	85.95
	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 12,508,148 (2021 (*restated) - 12,519,205) to 169,459,584 (2021 (*restated) - 171,154,920) Ordinary shares.
	For the year ended 31 July 2022 the assumed conversion for potential Ordinary shares was dilutive to the revenue return per Ordinary share but non-dilutive to the capital return per Ordinary share (2021 - non-dilutive to the revenue return but dilutive to the capital return). Where dilution occurs, the net returns are adjusted for interest charges and issue expenses relating to the CULS (2022 - £714,000; 2021 - £617,000). Total earnings for the period are tested for dilution. Once dilution has been determined individual revenue and capital earnings are adjusted.
	The returns per share figures for 2021 have been restated to reflect the 5:1 sub-division as disclosed in note 14.

 

10.	Investments at fair value through profit or loss
		2022	2021
		£'000	£'000
	Opening book cost	346,431	314,306
	Opening investment holding gains	194,490	80,161
	Opening fair value	540,921	394,467
	Analysis of transactions made during the year
	Purchases at cost	79,496	83,636
	Sales proceeds received	(73,252)	(85,260)
	(Losses)/gains on investments	(22,324)	148,078
	Closing fair value	524,841	540,921
	Closing book cost	377,733	346,431
	Closing investment gains	147,108	194,490
	Closing fair value	524,841	540,921
		2022	2021
		£'000	£'000
	Investments listed on an overseas investment exchange	510,984	529,261
	Investments listed on the UK investment exchange	13,857	11,660
		524,841	540,921
	The Company received £73,252,000 (2021 - £85,260,000) from investments sold in the period. The book cost of these investments when they were purchased was £48,194,000 (2021 - £51,511,000). 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 (losses)/gains on investments in the Statement of Comprehensive Income. The total costs were as follows:
		2022	2021
		£'000	£'000
	Purchases	91	173
	Sales	147	152
		238	325
	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
		2022	2021
		£'000	£'000
	Amounts due from brokers	280	4,060
	Other debtors	766	418
	Prepayments and accrued income	418	629
		1,464	5,107
	None of the above amounts is past their due date or impaired (2021 - same).

 

12.	Creditors
		2022	2021
	Amounts falling due within one year	£'000	£'000
	Amounts due to brokers	-	1,997
	Other creditors	2,864	1,425
		2,864	3,422

 

13.	Non-current liabilities
			2022				2021
			Number of		Liability	Equity	Number of	Liability	Equity
			units		component	component	units	component	component
	(a)	CULS	£'000		£'000	£'000	£'000	£'000	£'000
		2.25% Convertible Unsecured Loan Stock 2025
		Balance at beginning of year	36,658		35,708	1,057	36,694	35,497	1,057
		Conversion of 2.25% CULS 2025	(16)		(16)	-	(36)	(36)	-
		Notional interest on CULS transferred to revenue reserve	-		154	-	-	153	-
		Amortisation and issue expenses	-		94	-	-	94	-
		Balance at end of year	36,642		35,940	1,057	36,658	35,708	1,057
		The 2.25% Convertible Unsecured Loan Stock 2025 ("CULS") 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 (2021 - 1,465.0p) nominal of CULS. Interest is payable on the CULS on 31 May and 30 November each year, commencing on 30 November 2018. With effect from 1 August 2021, the interest will be charged 25% to revenue and 75% to capital (previously 100% to revenue), 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 2022 the Company received elections from CULS holders to convert £15,343 (2021 - £36,476) nominal amount of CULS into 5,211 (2021 - 2,475) Ordinary shares.
		The fair value of the 2025 CULS at 31 July 2022 was £37,009,000 (2021 - £37,941,000).
								2022	2021
	(b)	Loan Note						£'000	£'000
		3.05% Senior Unsecured Loan Note 2035						30,000	30,000
		Unamortised Loan Note issue expenses						(108)	(114)
								29,892	29,886
		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. 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 2022 was £28,804,000 (2021 - £30,713,000), the value being based on a comparable quoted debt security.
								2022	2021
								£'000	£'000
	(c)	Deferred tax liability on Indian capital gains						2,684	3,631

 

14.	Called up share capital
			2022	2021
			£'000	£'000
	Allotted, called-up and fully paid
	Ordinary shares of 5p (2021 - 25p)		7,848	7,848
	Treasury shares		2,587	2,587
			10,435	10,435
		Ordinary	Treasury	Total
		shares	shares	shares
		Number	Number	Number
	At 31 July 2021A	156,948,420	51,744,590	208,693,010
	Conversion of CULS	5,211	-	5,211
	At 31 July 2022	156,953,631	51,744,590	208,698,221
	AThe prior year has been restated to reflect the 5:1 sub-division as disclosed below.
	On 7 February 2022 there was a sub-division of each existing Ordinary 25p share into five Ordinary shares of 5p each.
	During the year no Ordinary shares of 5p were purchased (2021 - 1,055,000 Ordinary shares of 25p purchased) by the Company at a total cost of £nil (2021 - total cost of £11,473,000), all of which were held in treasury. At the year end 51,744,590 (2021 (*restated) - 51,744,590) shares were held in treasury, which represents 24.79% (2021 - 24.79%) of the Company's total issued share capital at 31 July 2022. During the year there were a further 5,211 (2021 - 2,475) Ordinary shares issued as a result of CULS conversions.
	Since the year end no further Ordinary shares of 5p have been purchased by the Company.

 

15.	Reserves
			2021
		2022	(*Restated)
		£'000	£'000
	Capital reserve
	At 31 July 2021 (*restated - see note 22)	401,124	268,750
	Movement in investment holdings fair value	(47,382)	114,329
	Gains on realisation of investments at fair value	25,058	33,749
	Purchase of own shares to treasury	-	(11,473)
	Indian capital gains tax rebate on sales	-	101
	Movement in deferred liability on Indian capital gains	947	(3,631)
	Withholding tax charged on capital dividends	(71)	(26)
	Foreign exchange movement	72	(425)
	Capital expenses (*restated - see note 22)	(4,298)	(250)
	At 31 July 2022	375,450	401,124
	The capital reserve includes investment holding gains amounting to £147,108,000 (2021 - £194,490,000) 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
		2022	2021
	Basic
	Net assets attributable	£464,396,000	£487,958,000
	Number of shares in issueAB	156,953,631	156,948,420
	Net asset value per shareB	295.88p	310.90p
		2022	2021
	Diluted
	Net assets attributable	£500,336,000	£523,666,000
	Number of shares in issueAB	169,459,574	169,459,600
	Net asset value per shareBC	295.25p	309.02p
	A Calculated excluding shares held in treasury.
	B Figures for 2021 have been restated to reflect the 5:1 sub-division as disclosed in note 14.
	C The diluted net asset value per share has been calculated on the assumption that £36,642,412 (2021 - £36,657,755) 2.25% Convertible Unsecured Loan Stock 2025 ("CULS")  is converted at 293.0p (2021 - 1,465.0p) per share, giving a total of 169,459,574 (2021 (*restated) - 169,459,600) 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 (2021 - 1,465.0p) per share. In such circumstances a net asset value is produced and disclosed assuming the convertible debt is fully converted. At 31 July 2022 the cum income NAV was 295.88p (2021 (*restated) - 310.90p) and thus the CULS were 'in the money' (2021 - same).

 

17.	Analysis of changes in net debt
		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)
		At				At
		31 July	Currency	Cash	Non-cash	31 July
		2020	differences	flows	movements	2021
		£'000	£'000	£'000	£'000	£'000
	Cash and short term deposits	10,919	(425)	4,083	-	14,577
	Debt due within one year	(11,200)	-	11,200	-	-
	Debt due after more than one year	(35,497)	-	(29,882)	(3,846)	(69,225)
		(35,778)	(425)	(14,599)	(3,846)	(54,648)
	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 to 58 of the published Annual Report and financial statements for the year ended 31 July 2022. The balance of fees due to Directors at the year end was £nil (2021 - £nil).
	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. Up until 27 November 2020 Mr Young, a director of abrdn Asia, was the Alternate Director for Mr Martin Gilbert. Up until 1 December 2020 Mr Yea was a Director of the Company as well as being a director of the Company's registrar, Equiniti Limited.

 

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 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	-
		Weighted average	Weighted
		period for which	average	Fixed	Floating
		rate is fixed	interest rate	rate	rate
	At 31 July 2021	Years	%	£'000	£'000
	Assets
	Sterling	-	-	-	13,712
	Indian Rupee	-	-	-	476
	Pakistan Rupee	-	-	-	14
	Thailand Baht	-	-	-	141
	Vietnam Dong	-	-	-	2
	Malaysian Ringgit	-	-	-	2
	Taiwan Dollar	-	-	-	230
		-	-	-	14,577
	Liabilities
	2.25% Convertible Unsecured Loan Stock 2025	3.83	3.1	35,708	-
	3.05% Senior Unsecured Loan Note 2035	14.35	3.1	29,886	-
		-	-	65,594	-
	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 2022			31 July 2021
			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	15,756	-	15,756	4,619	-	4,619
	Danish Krona	12,352	-	12,352	10,157	-	10,157
	Hong Kong Dollar	64,947	-	64,947	57,636	-	57,636
	Indian Rupee	82,097	9	82,106	90,186	476	90,662
	Indonesian Rupiah	55,431	-	55,431	43,412	-	43,412
	Korean Won	31,429	-	31,429	34,240	-	34,240
	Malaysian Ringgit	35,339	2	35,341	29,106	2	29,108
	Taiwan Dollar	56,994	458	57,452	78,501	230	78,731
	New Zealand Dollar	14,061	-	14,061	17,054	-	17,054
	Pakistan Rupee	-	11	11	927	14	941
	Philippine Peso	19,825	-	19,825	21,921	-	21,921
	Singapore Dollar	41,585	-	41,585	55,283	-	55,283
	Sri Lankan Rupee	7,640	32	7,672	13,942	-	13,942
	Thailand Baht	35,114	3	35,117	44,104	141	44,245
	Vietnamese Dong	30,474	371	30,845	28,173	2	28,175
		510,984	886	511,870	529,261	865	530,126
	Sterling	13,857	(57,247)	(43,390)	11,660	(51,882)	(40,222)
	Total	524,841	(56,361)	468,480	540,921	(51,017)	489,904
	Foreign currency sensitivity. The Company's foreign currency financial instruments are in the form of equity investments, fixed interest investments, cash and bank loans. The sensitivity of the former has been included within other price risk sensitivity analysis so as to show the overall level of exposure. Due consideration is paid to foreign currency risk throughout the investment process.
	Other price risk. Other price risks (ie changes in market prices other than those arising from interest rate or currency risk) may affect the value of the quoted investments.
	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 106 to 108 of the published Annual Report and financial statements for the year ended 31 July 2022, 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% (2021 - 20%) higher or lower while all other variables remained constant, the return attributable to Ordinary shareholders for the year ended 31 July 2022 would have increased/(decreased) by £104,968,000 (2021 - increased/(decreased) by £108,184,000) 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 2022 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 12 of the published Annual Report and financial statements for the year ended 31 July 2022.

 

	Liquidity risk exposure. At 31 July 2022 the Company had borrowings in the form of the £36,642,000 (2021 - £36,658,000) nominal of 2.25% Convertible Unsecured Loan Stock 2025 and £29,892,000 (2021 - £29,886,000) in the form of the 3.05% Senior Unsecured Loan Note 2035.
	At 31 July 2022 the amortised cost of the Company's 3.05% Senior Unsecured Loan Note 2035 was £29,892,000 (2021 - £29,886,000). The maximum exposure at 31 July 2022 was £29,892,000 (2021 - £29,886,000) and the minimum exposure at 31 July 2022 was £29,886,000 (2021 - £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 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
						Due
					Due	between
				Expected	within	3 months	Due after
				cashflows	3 months	and 1 year	1 year
	31 July 2021			£'000	£'000	£'000	£'000
	2.25% Convertible Unsecured Loan Stock 2025			39,692	-	826	38,866
	3.05% Senior Unsecured Loan Note 2035			43,268	-	915	42,353
				82,960	-	1,741	81,219
	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:
				2022		2021
				Statement		Statement
				of Financial	Maximum	of Financial	Maximum
				Position	exposure	Position	exposure
	Current assets			£'000	£'000	£'000	£'000
	Debtors and prepayments			1,464	1,464	5,107	5,107
	Cash and short term deposits			9,471	9,471	14,577	14,577
				10,935	10,935	19,684	19,684
	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 £28,804,000 as at 31 July 2022 (2021 - £30,713,000) compared to a value at amortised cost in the financial statements of £29,892,000 (2021 - £29,886,000) (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 2022 as follows:
			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
			Level 1	Level 2		Level 3		Total
	As at 31 July 2021	Note	£'000	£'000		£'000		£'000
	Financial assets and liabilities at fair value through profit or loss
	Quoted equities	a)	536,934	-		-		536,934
	Quoted preference shares	b)	-	3,652		-		3,652
	Quoted warrants	b)	-	335		-		335
	Net fair value		536,934	3,987		-		540,921
	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 2022		31 July 2021
	Level 3 Financial assets at fair value through profit or loss				£'000		£'000
	Opening fair value				-		-
	Transfers from level 1				9,664		-
	Total gains or losses included in losses on investments in the Statement of Comprehensive Income:						-
	- assets disposed of during the year				-		-
	- assets held at the end of the year				-		-
	Closing balance				9,664		-
	During the year, the Company changed the basis for valuing its holding in Cebu Holdings. The investee company has received regulatory approval to merge with another company, Ayala Land, and new shares will be issued in Ayala Land in the near future 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.

 

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:
		2022	2021
		£'000	£'000
	Equity
	Equity share capital	10,435	10,435
	Reserves	453,961	477,523
	Liabilities
	3.05% Senior Unsecured Loan Note 2035	29,892	29,886
	2.25% Convertible Unsecured Loan Stock 2025	35,940	35,708
		530,228	553,552
	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.
		2022	2021
		£'000	£'000
	Investments at fair value through profit or loss	524,841	540,921
	Current assets excluding cash and cash equivalents	1,184	1,047
	Current liabilities	(2,864)	(1,425)
	Deferred tax liability on Indian capital gains	(2,684)	(3,631)
		520,477	536,912
	Net assets	464,396	487,958
	Gearing (%)	12.1	10.0
	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.

 

22.	Prior year restatement
	The Statement of Comprehensive Income, the Statement of Financial Position and the Statement of Changes in Equity for the year ended 31 July 2021 have been restated to reallocate costs of £250,000 incurred during that period in relation to the long-term investment strategy review from revenue to capital. This treatment was changed to align to the presentation in accordance with guidance provided by the AIC's SORP as disclosed in the 2021 annual report as these costs were adjudged by the Board to have been  incurred, wholly or partly, in connection with the maintenance or enhancement of the value of the investments in the portfolio.
	Consequently, in the Statement of Comprehensive Income for the year ended 31 July 2021, administrative expenses allocated to revenue have decreased from £1,386,000 to £1,136,000 and administrative expenses allocated to capital have increased from £nil to £250,000. In the Statement of Financial Position as at 31 July 2021 the capital reserve has decreased from £401,374,000 to £401,124,000 and the revenue reserve has increased from £12,618,000 to £12,868,000. In the Statement of Changes in Equity for the year ended 31 July 2021, the return after taxation allocated to the capital reserve has decreased from a gain of £144,097,000 to a gain of £143,847,000 and the return after taxation allocated to the revenue reserve has increased from £2,386,000 to £2,636,000. In note 7(b) (i) the revenue return before taxation has increased from £2,936,000 to £3,186,000 and the capital return before taxation has decreased from £147,653,000 to £147,403,000 (ii) the revenue return multiplied by the standard rate of corporation tax of 19% has increased from £558,000 to £605,000 and the capita return multiplied by the standard rate of corporation tax of 19% has decreased from £28,054,000 to £28,007,000 and (iii) the movement in unutilised management expenses allocated to revenue has decreased from £916,000 to £869,000 and the movement in unutilised management expenses allocated to capital has increased from £nil to £47,000.

 

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. 2022 has been presented on a diluted basis as the Convertible Unsecured Loan Stock ("CULS") is "in the money" (2021 - same).
			As at
		As at	31 July 2021
		31 July 2022	(*Restated)
NAV per Ordinary share (p)	a	295.25	309.02
Share price (p)	b	254.00	266.00
Discount	(a-b)/a	14.0%	13.9%
* Rates for 2021 have been restated to reflect the 5:1 sub division as disclosed in note14.
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 2021
		31 July 2022	(*Restated)
Revenue return per Ordinary share (p)	a	9.34	1.66
Dividends declared (p)	b	8.00	3.20
Dividend cover	a/b	1.17	0.52
* Rates for 2021 have been restated to reflect the 5:1 sub division as disclosed in note14.
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 2022	31 July 2021
Borrowings (£'000)	a	65,832	65,594
Cash and short term deposits (£'000)	b	9,471	14,577
Amounts due to brokers (£'000)	c	-	1,997
Amounts due from brokers (£'000)	d	280	4,060
Shareholders' funds (£'000)	e	464,396	487,958
Net gearing	(a-b+c-d)/e	12.1%	10.0%
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.
		2022	2021
Investment management fees (£'000)		3,204	3,570
Administrative expenses (£'000)		1,561	1,386
Less: non-recurring chargesA (£'000)		(428)	(297)
Ongoing charges (£'000)		4,337	4,659
Average net assets (£'000)		490,446	422,440
Ongoing charges ratio		0.88%	1.10%
A Professional fees comprising corporate and legal fees associated with proposals approved by shareholders on 27 January 2022.
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 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 reinvestmentA	d	2.5%	2.8%
Total return	c+d	-2.0%	-1.7%
			Share
Year ended 31 July 2021 (*Restated)		NAV	Price
Opening at 1 August 2020	a	221.29p	196.00p
Closing at 31 July 2021	b	309.02p	266.00p
Price movements	c=(b/a)-1	39.6%	35.7%
Dividend reinvestmentA	d	2.3%	2.5%
Total return	c+d	+41.9%	+38.2%
* Rates for 2021 have been restated to reflect the 5:1 sub division as disclosed in note14.
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 12:30 p.m. on 30 November 2022 at Bow Bells House, 1 Bread Street, London EC4M 9HH.

 

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 2022 are an abridged version of the Company's full financial statements, which have been approved and audited with an unqualified report. The 2021 and 2022 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 2021 is derived from the statutory accounts for 2020 which have been delivered to the Registrar of Companies. The 2022 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, Bow Bells House, 1 Bread Street, London EC4M 9HH 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

Aberdeen Asset Management PLC

Secretary

14 October 2022