asia-focus.co.uk

abrdn Asia Focus plc

A fundamental, high conviction portfolio of well-researched Asian small caps

Annual Report 31 July 2024

For more information visit asia-focus.co.uk

abrdn.com

The Company

The Company is an investment trust and its Ordinary shares and Convertible Unsecured Loan Stock (“CULS”) are

admitted to trading on the main market of London Stock Exchange plc. The Company aims to attract long-term private

and institutional investors wanting to benefit from the growth prospects of Asia’s smaller companies.

Investment Objective

The Company aims to maximise total return to shareholders over the long term from a portfolio made up predominantly

of quoted smaller companies in the economies of Asia excluding Japan. (On 27 January 2022 shareholders approved an

amended investment objective.)

Five-Year Performance Linked Tender

On 27 January 2022 shareholders approved the introduction of a performance-linked tender offer, which provides that,

in the event of underperformance of the NAV per Share versus the MSCI AC Asia ex Japan Small Cap Index over a five-

year period commencing 1 August 2021, Shareholders will be offered the opportunity to realise a proportion of their

holding for cash at a level close to NAV less costs of the tender offer. The tender offer would be capped at a maximum of

25% of the issued share capital of the Company at that time.

Comparative Index

From 1 August 2021 the Manager has utilised the MSCI AC Asia ex Japan Small Cap Index (currency adjusted) as well as

peer group comparisons for Board reporting. For periods prior to 1 August 2021, a composite index is used comprising

the MSCI AC Asia Pacific ex Japan Small Cap Index (currency adjusted) up to 31 July 2021 and the MSCI AC Asia ex

Japan Small Cap Index (currency adjusted) thereafter. It is likely that performance will diverge, possibly quite

dramatically in either direction, from the comparative index. The Manager seeks to minimise risk by using in-depth

research and does not see divergence from an index as risk.

Investment Manager and Alternate Investment Fund Manager

The Company’s Alternative Investment Fund Manager, appointed as required by EU Directive 2011/61/EU, is abrdn Fund

Managers Limited (“aFML”) which is authorised and regulated by the Financial Conduct Authority. Day to day

management of the portfolio is delegated to abrdn Asia Limited (“abrdn Asia”, the “Manager” or the “Investment

Manager”). aFML and abrdn Asia are wholly owned subsidiaries of abrdn plc.

abrdn Asia Focus plc 121

Directors

Krishna Shanmuganathan, Chair

Charlotte Black

Lindsay Cooper

Alex Finn

Lucy Macdonald

Davina Curling

Registered in England as an

Investment Company

Registration Number 03106339

Manager

abrdn Asia Limited

7 Straits View

# 23-04. Marina One East Tower

Singapore 018936

Alternative Investment Fund Manager*

abrdn Fund Managers Limited

280 Bishopsgate

London EC2M 4AG

(

Authorised and regulated by the Financial

Conduct Authority

)

(* appointed as required by EU Directive 2011/61/EU)

Secretaries and Registered Office

abrdn Holdings Limited

280 Bishopsgate

London EC2M 4AG

Registrars

Equiniti

Aspect House

Spencer Road

Lancing

West Sussex BN99 6DA

Telephone enquiries +44 (0) 371 384 2416

Lines open 8.30 a.m. to 5.30 p.m., Monday to Friday

(excluding public holidays in England & Wales)

shareview.co.uk

Stockbrokers

Panmure Liberum

Ropemaker Place, Level 12

25 Ropemaker Street

London EC2Y 9LY

Solicitors

Dentons UK and Middle East LLP

Quartermile One

15 Lauriston Place

Edinburgh EH3 9EP

Independent Auditor

PricewaterhouseCoopers LLP

Atria One

144 Morrison Street

Edinburgh EH3 8EX

CULS Trustee

The Law Debenture Corporation p.l.c.

Fifth Floor

100 Wood Street

London EC2V 7EX

Depositary

BNP Paribas SA London Branch (

formerly BNP Paribas

Trust Corporation UK Limited, until 31 May 2024

)

10 Harewood Avenue

London NW1 6AA

Website

asia-focus.co.uk

asia.focus@abrdn.com

Foreign Account Tax Compliance Act

(“FATCA”) IRS Registration Number (“GIIN”):

5ITCFT.99999.SL.826

Legal Entity Identifier

5493000FBZP1J92OQY70

Corporate Information

abrdn Asia Focus plc 1

“Over the long term, your Company’s Net Asset

Value has averaged annual growth of 11.9% since

inception, an outstanding level of sustained

performance, and reflective of your Manager’s

ability to invest in hand-picked smaller companies in

Asia that are difficult to access for UK investors”

Krishna Shanmuganathan,

Chair

“We aim to find exciting smaller companies that will

benefit from Asia’s expanding middle class, with our

on-the-ground team making the most of

inefficiencies in pricing under-researched smaller

companies across the region”

Gabriel Sacks, Flavia Cheong and Xin-Yao Ng

abrdn Asia Limited

Scan the QR code below to register

for regular email updates on the Company

2 abrdn Asia Focus plc

Net asset value total return (diluted)

Net asset value per share (diluted)

+7.9% 324.3

2023 +7.6% 2023 308.9p

Net asset value total return since inception

(diluted)

Annualised Net asset value total return since

inception (diluted)

+2472.6% +11.9%

2023 +2283.6% 2023 +12.1%

Share price total return

Share price

+8.8% 278.0

2023 +7.3% 2023 264.0p

MSCI AC Asia ex Japan Small Cap Index

total return

Discount to net asset value

+14.1% 14.3%

2023 +8.0% 2023 14.5%

Ongoing charges ratio

Dividends per share

0.89% 7.42

2023 0.92% 2023 8.66p

Alternative Performance Measure (see pages 99 to 100).

Presented on a diluted basis as the Convertible Unsecured Loan Stock (“CULS”) are “in the money” (2023 – same).

Currency adjusted, capital gains basis.

Dividends include special dividends of 1.00p for 2024 (2023 – 2.25p).

Net asset value per share Total dividends per share Mid-market price per share

At 31 July – pence At 31 July – pence At 31 July – pence

221.3

309.0

295.3

308.9

324.3

20 21 22 23 24

*Diluted values used for

2021 to 2024

3.80

3.00

8.00

8.66

.42

20 21 22 23 24

O r din ary Special

196.0

266.0

254.0

264.0

278.0

20 21 22 23 24

Performance Hi

hli

hts

abrdn Asia Focus plc 3

“The Board has decided to hold another

interactive Online Shareholder Presentation

which will be held at 11:00 a.m. on Monday 18

November 2024. During the presentation,

shareholders will receive updates from myself

and the Manager and there will be the

opportunity for an interactive question and

answer session where we will endeavour to

answer as many questions as time allows”

Krishna Shanmuganathan,

Chair

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR

IMMEDIATE ATTENTION. If you are in any doubt about the

action you should take, you are recommended to seek your

own independent financial advice from your stockbroker,

bank manager, solicitor, accountant or other independent

financial adviser authorised under the Financial Services

and Markets Act 2000 if you are in the United Kingdom or,

if not, from another appropriately authorised

financial adviser.

If you have sold or otherwise transferred all your Ordinary

shares in abrdn Asia Focus plc, please forward this

document, together with the accompanying documents

immediately to the purchaser or transferee, or to the

stockbroker, bank or agent through whom the sale or

transfer was effected for transmission to the purchaser or

transferee or transferee, or to the stockbroker, bank or

agent through whom the sale or transfer was effected for

transmission to the purchaser or transferee.

Overview

Financial Calendar, Dividends and Highlights 4

Strategic Report

Chair’s Statement 8

Investment Managers’ Review 12

Overview of Strategy 16

Results 24

Performance 25

Portfolio

Ten Largest Investments 30

Portfolio 31

Sector/Geographical Analysis 34

Currency/Market Performance 36

Investment Case Studies 37

Governance

Board of Directors 42

Directors’ Report 45

Directors’ Remuneration Report 55

Statement of Directors’ Responsibilities 58

Report of the Audit Committee 59

Financial Statements

Independent auditors’ report to the members of abrdn

Asia Focus plc 64

Statement of Comprehensive Income 71

Statement of Financial Position 72

Statement of Changes in Equity 73

Statement of Cash Flows 74

Notes to the Financial Statements 75

Alternative Performance Measures (Unaudited) 99

Corporate Information

Information about the Investment Manager 102

The Investment Process 103

Responsible Investment and Engagement 105

Investor Information 109

Alternative Investment Fund Managers Directive

Disclosures (Unaudited) 112

General

Notice of Annual General Meeting 114

Glossary of Terms and Definitions 118

Your Company’s Share Capital History 120

Corporate Information 121

Contents

4 abrdn Asia Focus plc

Financial year end

31 July

Announcement of results for year ended 31 July 2024

24 October 2024

Online Shareholder Presentation (see page 10)

18 November 2024 at 11:00 a.m.

Annual General Meeting

6 December 2024

CULS Conversion Date

30 November 2024

Payment date of first interim for 2024/2025 and special

dividend for 2023/2024

20 December 2024

Payment date of second interim dividend for 2024/2025

24 March 2025

Final CULS Conversion Date

31 May 2025

Payment date of third interim dividend for 2024/2025

23 June 2025

Payment date of fourth interim dividend for 2024/2025

22 September 2025

Dividends

Rate xd date Record date Payment date

First interim 2024 1.60p 23 November 2023 24 November 2023 20 December 2023

Second interim 2024 1.60p 22 February 2024 23 February 2024 21 March 2024

Third interim 2024 1.60p 23 May 2024 24 May 2024 21 June 2024

Fourth interim 2024 1.62p 22 August 2024 23 August 2024 20 September 2024

Special 2024 1.00p 21 November 2024 22 November 2024 20 December 2024

7.42p

First interim 2023 1.60p 24 November 2022 25 November 2022 20 December 2022

Second interim 2023 1.60p 23 February 2023 24 February 2023 21 March 2023

Third interim 2023 1.60p 25 May 2023 26 May 2023 23 June 2023

Fourth interim 2023 1.61p 24 August 2023 25 August 2023 20 September 2023

Special 2023 2.25p 23 November 2023 24 November 2023 20 December 2023

8.66p

Financial Calendar,

Dividends and Hi

hli

hts

abrdn Asia Focus plc 5

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

Financial Highlights

31/07/2024 31/07/2023 % change

Total assets (see definition on page 119) £542,457,000 £556,466,000 –2.5

Total equity shareholders’ funds (net assets) £502,260,000 £485,784,000 +3.4

Net asset value per share (basic) 326.94p 310.49p +5.3

Net asset value per share (diluted) 324.26p 308.93p +5.0

Share price (mid market) 278.00p 264.00p +5.3

Market capitalisation £427,082,000 £413,049,000 +3.4

Discount to net asset value (basic)

15.0% 15.0%

Discount to net asset value (diluted)

14.3% 14.5%

MSCI AC Asia ex Japan Small Cap Index (currency adjusted, capital gains basis) 2,210.14 1,982.01 +11.5

Net gearing

10.4% 12.1%

Dividends and earnings

Total return per share (basic)

24.12p 22.43p

Revenue return per share (basic) 8.59p 10.29p –16.5

Ordinary dividends per share

6.42p 6.41p +0.2

Special dividend per share

1.00p 2.25p –55.6

Dividend cover

1.16 1.19

Revenue reserves

£14,411,000 £12,538,000 +14.9

Revenue reserves per share

9.38p 8.01p +17.1

Operating costs

Ongoing charges ratio

0.89% 0.92%

Considered to be an Alternative Performance Measure. See pages 99 and 100.

Measures the total earnings for the year divided by the weighted average number of Ordinary shares in issue (see note 9).

The figures for dividends per share reflect the dividends for the year in which they were earned.

After payment of the fourth interim dividend of 1.62p (2023 – 1.61p) per share amounting to £2,488,000 (2023 – £2,515,000) and the special dividend of 1.00p (2023 – 2.25p) per

share amounting to £1,513,000 (2023 – £3,498,000).

6 abrdn Asia Focus plc

Strategic

Report

abrdn Asia Focus plc 7

The Company aims to attract long

term private and institutional

investors wanting to benefit from the

growth prospects of Asian smaller

companies. It is an investment trust

and its Ordinary shares are admitted

to trading on the main market of

London Stock Exchange plc

8 abrdn Asia Focus plc

Overview

Following the market trends referenced in my half-year

report, Asian small caps continued to show their resilience

and outpace their larger peers over the full year despite

turbulent times geopolitically. The MSCI AC Asia ex Japan

Small Cap Index delivered a total return of 14.1% in sterling

terms, outperforming the MSCI AC Asia ex Japan Index,

which rose by 7.6%.

Across small cap markets in Asia, we saw a sharp

divergence in performance. At one end was India (28.1%

of portfolio), the best performer by a large margin. A

buoyant economy, growth in the corporate sector and

substantial foreign capital inflows drove strong gains in the

domestic market. There was an element of election jitters

as Prime Minister Narendra Modi won a third term in office

at the polls but had to settle for a coalition government

with his allies. This proved short-lived, however, with

investors quickly pushing the market to new all-time highs

within days.

Another solid performer was Taiwan (14.4% of portfolio),

as the technology-heavy market benefited from

expectations of a trough in the semiconductor cycle

and the rapid advance of artificial intelligence (AI) and

related applications.

At the other end, however, was China (9.1% of portfolio),

with a sharp fall in domestic markets. The country’s stalled

economy and property woes weighed on investor

sentiment, although the Chinese government stepped in

and increased support with measures to bolster financial

markets and the economy. There are also concerns over

potential US tariffs and sanctions following the outcome of

November’s US presidential election.

Investment Performance

Against this backdrop, on a total return basis, your

Company’s net asset value (NAV) rose 7.9% in sterling

terms for the 12 months ended 31 July 2024, while the

share price rose 8.8%. Over the long term, your

Company’s NAV has averaged annual growth of 11.9%

since inception, an outstanding level of sustained

performance, and reflective of your Manager’s ability to

invest in hand-picked smaller companies in Asia that are

difficult to access for UK investors.

Despite the relative underperformance, absolute returns

have been reasonable relative to a broader peer group of

Asian funds, and your Manager maintains a preference for

more diversified exposure to the region versus the small

cap index which has become increasingly concentrated

across fewer markets. Stock selection has been largely

positive, particularly in markets like India, where your

Company’s holdings across a broad swathe of sectors

have benefited from the healthy economic backdrop and

good management, such as real estate developer

Prestige Estates, energy holding Aegis Logistics and

healthcare group Vijaya Diagnostic Centre.

Your Company’s off-benchmark exposure to Vietnam has

also added value, primarily driven by FPT Corp, a

diversified technology group with a fast-growing software

outsourcing business and led by an entrepreneurial

management team. More broadly, Vietnam is rising up

fast as an alternative supply chain option amid

geopolitical uncertainty, with foreign direct investments

(FDI) pouring into higher technology sectors, especially

automotive and electronics. Less positively, the

Company’s lack of exposure to certain sub-segments of

the Taiwanese technology and utilities space cost

performance in relative terms, as did weaker

performance from a few of the holdings in China and

Singapore. You can read more about this in the

Investment Manager’s Review on page 12.

Dividend and Reserves

The Board recognises the importance of your Company’s

dividend income for many shareholders, and the income

generation of the portfolio has been robust and supportive

of the new enhanced and progressive dividend policy

approved by shareholders in 2022. Your Company has

maintained or raised the Ordinary dividend every year

since 1998. Indeed, your Company anticipates joining the

AIC’s next generation of dividend heroes next year.

In total, four interim dividends have been declared in

respect of the financial year ended 31 July 2024

amounting to 6.42p per Ordinary 5p share (2023: 6.41p). In

addition, continuing strength of dividend generation from

the portfolio has allowed the Board to declare a special

interim dividend of 1.0p (2023: 2.25p) in respect of the year

ended 31 July 2024 which will be paid on 20 December

2024 to shareholders on the register on the record date of

22 November 2024 (ex-dividend date 21 November

2024). This special dividend brings the total distribution

for the year to 7.42p (2023: 8.66p) representing a yield of

2.7% based upon the share price at the time of writing

of 280.0p.

Chair’s Statement

abrdn Asia Focus plc 9

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

The Board’s strategy is to maintain the progressive

dividend policy of the last 25 years (including with the

flexibility to pay dividends out of capital reserves where

merited in the future) in order to provide shareholders with

a regular level of income alongside capital growth

prospects. Following payment of the four interims for the

year to 31 July 2024, there remains well over a year’s

worth of revenue reserve to cover the Ordinary dividend.

Share Capital Management and Gearing

In line with the general trend across the investment trust

sector, the Company’s shares have continued to trade at

a stubbornly wide discount to NAV. The Company’s share

price to NAV discount was flat over the year, opening and

closing at 15%. During the period the shares have traded

at an average discount of 16.1%, which remains higher

than the long-term average. I would note that while the

discount is wide, some of your Company’s peers are

trading at similar discount levels, likely reflecting a more

cautious stance by UK investors towards Asian small

cap equities.

Your Board is very mindful of the negative impact of large

discounts to NAV to shareholders but also share price

volatility. The Board increased the pace of buybacks

during the year, purchasing 2,850,000 shares (2023:

500,000) in total, 1.8% of the Company’s issued shares

(excluding Treasury shares). A further 2,372,500 shares

have been purchased since the end of the financial

year to date.

We will continue to oversee the judicious use of share buy

backs. The shares bought back in this reporting period

were at an average discount to NAV of 15.5%, supporting

the twin aims of reducing the volatility of any discount

whilst modestly enhancing the NAV for continuing

shareholders.

The Company’s net gearing at 31 July 2024 was 10.4%

(2023: 12.1%) with the debt provided by the £30m Loan

Notes and the £36.6 million Convertible Unsecured Loan

Stock (“CULS”), redeemable in 2025. As at 22 October

2024, the latest practicable date, the net gearing stood at

11.9%. As we approach the maturity of the CULS,

scheduled for 31 May 2025 the Board, in conjunction with

the Manager and advisers, is reviewing the current level of

gearing, alongside opportunities for repaying or

converting the CULS, and will update shareholders closer

to the time. In the event that suitable opportunities are not

available the Board expects to repay the CULS using the

proceeds of sales across the portfolio.

Promoting the Company

Your Board and Investment Manager have made

significant efforts to enhance the marketing of your

Company by highlighting the depth of abrdn’s resources

on the ground in Asia. To learn more about the

management team’s travels and the underlying portfolio,

visit abrdn.com/AAS. Here, existing and potential

shareholders can sign up for regular email updates. By

following the dedicated abrdn Asia Focus page on

LinkedIn, you can stay informed about your investments.

You are also invited to join us at the AGM to hear from the

Investment Managers and the Board. Additionally, we hold

a pre-AGM webinar (see below) with the Chair and

Investment Managers, including a Q&A session, which is

open to all. This session is also recorded and available to

watch on demand afterwards.

Board Evolution

In my half-year statement, I had welcomed two new

Board members, Lucy Macdonald who replaced Randal

Dunluce, the Earl of Antrim who stepped down from the

Board at the last AGM in December 2023, and Davina

Curling who joined with effect from 1 March 2024 as

Senior Independent Director.

Lucy has enjoyed a successful career in asset

management and was, until 2020, managing director, CIO

global equities at Allianz Global Investors. Lucy brings

significant investment experience to the Board. She is an

experienced board director and is currently a member of

the investment committee of the RNLI, a non-executive

council member of the Duchy of Lancaster and senior

independent director of JPMorgan Global Emerging

Markets Income Trust Plc. Meanwhile, Davina has also

enjoyed a successful career in asset management and

was formerly managing director, head of European

equities at Russell Investments. More recently Davina has

consulted on projects for small companies and start-ups

in the financial, manufacturing and retail sectors. Davina is

a non-executive director of Henderson Opportunities

Trust plc and INVESCO Global Equity Income Trust plc and

is a member of the investment committee of St James’s

Place Wealth management.

Both Lucy and Davina bring considerable investment

management experience to the Board, and I am glad to

report that both have settled in well and are already

contributing their insights to the Board.

10 abrdn Asia Focus plc

Your Investment Manager

The Board is encouraged by abrdn Group’s commitment

to Asian equities. It hasn’t been the easiest environment for

active managers over the past couple of years, but your

Manager continues to invest in its research platform,

including quantitative tools that can support fund

managers’ fundamental research efforts. The Asian

equities team remains one of the most well-resourced in

the industry with 35 analysts and portfolio managers

spread across the region. Over the past year, there has

been a slight evolution of the team’s structure with a

cleaner delineation of roles between analysts and fund

managers. The idea is to streamline responsibilities and

increase focus, which should be welcome news for

shareholders as Managers Gabriel Sacks and Xin-Yao

Ng’s time will be increasingly aligned to your portfolio. In

addition, the team is bulking up its analyst pool with the

hiring of a senior tech analyst and an Indian small and

mid-cap analyst, with the purpose of improving idea

generation and supporting the role of fund managers.

Value for Money

We strive to keep the cost of investing low for

shareholders to retain as much of the return on their

investment as possible. Ongoing charges for the year

were 0.89% (2023: 0.92%), primarily made up of the

management fee. Your Company is one of the very few to

have linked the management fee to the market

capitalisation rather than the NAV of the Company,

further aligning the Investment Manager with you,

the Shareholders.

Your Board continues to keep all costs under review but

believes that, given the breadth and depth of on-the-

ground research by your Manager, the very selective

stock picking (your Company’s portfolio has an active

share of 96.7 at year end) and the long-term

outperformance, the current fees constitute value

for money.

I would remind shareholders that in 2022 the Company

introduced a performance-linked conditional tender offer

for up to 25% of the issued capital. Shareholders will be

offered the opportunity to realise a proportion of their

holding for cash at a level close to NAV less costs in the

event the Company’s NAV total return underperforms the

benchmark over the five year period measured from 1

August 2021. The latest performance data covering the

period since the introduction of the tender offer to 30

September 2024 shows a NAV total return of 21.7% versus

the benchmark which has returned 19.6%.

Responsible Investing

One of the key benefits of having an extensive on-the-

ground team in Asia is your Manager’s ability to actively

engage with companies on environmental, social and

governance matters. Whilst the Company is not a

sustainable fund, it is positive to note that the portfolio’s

MSCI ESG rating of ‘BBB’ is in line with that of the

Benchmark and the Economic Emission Intensity is only

25.6% that of the Benchmark. Further details on

responsible investing are provided on pages 105 to 108.

Shareholder Engagement and Annual

General Meeting

The Company's Annual General Meeting is scheduled for

11:00 a.m. on 6 December 2024. In line with best practice

the voting on all business at the AGM will be conducted by

way of a poll which will be administered on the day by the

Company’s registrar. The AGM will be preceded by a short

presentation from the management team and following

the formal business there will be a light shareholder buffet

lunch and the opportunity to meet the Directors. In

addition to the usual ordinary business being proposed at

the AGM, as special business the Board is seeking to renew

the authority to issue new shares and sell treasury shares

for cash at a premium without pre-emption rules applying

and to renew the authority to buy back shares and either

hold them in treasury for future resale (at a premium to

the prevailing NAV per share) or cancel them. I would

encourage all shareholders to support the Company and

lodge proxy voting forms in advance of the meeting,

regardless of whether they intend to attend in person.

In light of the significant take up from shareholders at the

online presentation held in November 2023, 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 Monday 18 November 2024. During

the presentation, shareholders will receive updates from

myself and the Manager and there will be the opportunity

for an interactive question and answer session where we

will endeavour to answer as many questions as time

allows. Following the online presentation, shareholders will

still have time to submit their proxy votes prior to the AGM

and I would encourage all shareholders to lodge their

votes in advance in this manner. Full registration details

can be found at: asia-focus.co.uk.

Chair’s Statement

Continued

abrdn Asia Focus plc 11

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

Outlook

Despite the ongoing global geopolitical and

macroeconomic uncertainty, Asian small cap companies

remain replete with opportunities for discovering high

quality companies that are often overlooked.

Economic, political, and monetary policy news in the US

will be significant. Expectations of US rate cuts are rising,

which typically lead to US dollar weakness. This supports

currencies and equities in Asia as the US-Asia yield

differential narrows. In addition, lower US interest rates

generally result in lower borrowing costs globally. In Asia,

smaller companies have historically benefited more than

larger ones from such a rate-cutting cycle as risk appetite

returns to equities and the region, while companies have

more room to borrow to expand and invest in their

businesses. These investments help support corporate

earnings and share prices.

The two largest economies in Asia will remain in the

spotlight due to their diverging fortunes. China’s economy

is under pressure with key pain points in consumer

spending and the property sector. However, the central

government has adopted a calibrated approach to avoid

the problems of excess liquidity but still has considerable

fiscal power to support growth. India, in contrast, is well-

positioned for continued growth with a positive macro

outlook, buoyant property sector, strong urban

consumption and a robust infrastructure investment

cycle. This in turn is reviving private capital expenditure.

These factors should support economic and earnings

growth over the long term. As far as abrdn Asia Focus is

concerned, your Company’s portfolio is geared towards a

broader set of markets across the region, with roughly

85% of the portfolio invested outside of China and Hong

Kong in companies that exhibit strong quality

characteristics and healthy levels of growth.

At this juncture, it is worth reiterating why I believe that

small caps continue to offer immense potential and

unique opportunities to capitalise on the dynamic and

rapidly evolving economies of Asia. Asian small caps

provide very different exposures compared to the large

caps in the region, both in terms of markets and sectors,

together with being companies that are inherently more

agile and exhibiting faster growth due to the early stage of

their corporate lifecycle. These smaller companies

operate in diverse industries, especially in niche areas like

technology and healthcare, and are often

at the forefront of innovation. Most importantly, they can

be more direct beneficiaries of Asia's structural growth

and long-term trends. The region boasts some of the

world's fastest-growing economies and a rising middle

class. Asia is a key hub for semiconductor supply chains,

especially with booming AI demand, and is heavily

investing in the green transition. Supply chains continue to

move from China to other low-cost Asian markets such as

Indonesia, India and Vietnam. This diversification is

expected to boost growth through increased foreign

investments and manufacturing, supporting

domestic earnings.

With all of this in mind, I and the Board remain confident in

your Manager, who is committed to carefully selecting

high-quality smaller companies with sound fundamentals

that can capitalise on the growth potential of this dynamic

region and achieve sustainable long-term returns. The

small cap universe is fertile ground for active stock picking

because it is a less efficient market that is often poorly

researched. Here, your Manager’s extensive on-the-

ground presence and long track record investing in Asia

will enable it to make the most of inefficiencies in pricing

smaller companies and unearthing hidden gems across

the rich and diverse small cap universe. Investment trusts

such as abrdn Asia Focus offer UK investors access to

businesses that are otherwise inaccessible via

mainstream funds and passive investments.

I remain confident that Asian smaller companies will

continue to thrive and flourish over the longer term and

that your Company continues to be well-positioned to

unlock this potential and, with it, very welcome sustainable

long-term returns.

Krishna Shanmuganathan

Chair

23 October 2024

12 abrdn Asia Focus plc

Performance Review

Over the 12-month period to 31 July 2024 it has been a

tale of two halves for Asian small caps as they traded

within a narrow range in the first six months before

gathering pace to finish the year on a strong note. The

MSCI AC Asia Ex Japan Small Cap Index (the

“benchmark”) returned 14.1% in sterling terms over the

period whilst your Company’s net asset value (“NAV”) and

share price, both in total return terms, increased by 7.9%

and 8.8%, respectively.

As your Chair has highlighted, various key

macroeconomic and political themes influenced investor

sentiment and market movements, such as China’s

slowdown, global recession concerns, US monetary policy

and geopolitics, including the conflict in the Middle East.

Through the uncertainty and volatility witnessed, your

Company’s portfolio posted positive absolute returns, a

testament to the quality and resilience of the underlying

holdings. The initial months proved challenging, due to

unfavourable country allocation effects, but performance

saw a significant improvement in the second half, led

primarily by strong stock selection in India.

Looking at the key drivers of performance, we would

naturally highlight India, where the small cap market was

exceptionally buoyant, rising by 50% over the year. This

market strength came at a time when the stars appeared

to have aligned for the country. GDP growth has been

averaging 6-7% annually. The government’s focus on

structural reforms, particularly in infrastructure and the

supply side of the economy, has boosted investor and

corporate confidence. Also drawing in capital investment

flows was the inclusion of Indian government bonds in JP

Morgan's emerging market indices in June 2024.

Political stability counts, too. While the result of the general

election in India came as a surprise to many, Prime

Minister Narendra Modi secured a third term in office, this

time with a coalition government. The new government’s

first budget presented in July showed that fiscal prudence

was high on the agenda, with a continued focus on

infrastructure development, albeit with some moderation

in the pace of growth. There also appeared to be efforts to

plug gaps in the economy around consumption, rural

demand and employment – all of which was generally

well received. Such a supportive economic and policy

environment was reflected in strength at the corporate

level, with solid earnings results especially in sectors like

power and industrials. This generally upbeat mood has

been supported by a domestic investor boom, with

locals increasingly channelling their savings into the

equity market.

We remain positive on India, as we have been since the

inception of the Company almost 30 years ago, with the

country representing a sizeable 27% of the portfolio at

year-end, our highest country weighting. The small-cap

benchmark, however, has an even higher allocation to

India at 34%. While our relatively lighter exposure to India

proved costly, this was more than compensated for by the

strong performance of our holdings across a range of

sectors. Notably, six of the portfolio’s top ten stock

performers this year came from India. The best performer

was Prestige Estates, which we believe is well positioned as

one of the few quality, listed operators in the Indian

property space. It has benefited from the ongoing upcycle

in residential property. In the energy sector, Aegis Logistics

continued to benefit from India’s shift away from fossil

fuels towards cleaner energy, with demand for liquefied

petroleum gas bolstered by its cost competitiveness

relative to other gas alternatives. Elsewhere, in the

healthcare sector, Vijaya Diagnostic Centre reported

consistently good results, with organic growth that

continued to be well ahead of industry peers. Organic

growth was a result of a combination of existing centres

continuing to grow as well as from new centres that were

opened over the last two years.

The other key country to highlight is Taiwan, a market that

is well represented in the small cap index. With global

equity investors fixated on Nvidia and the rise of artificial

intelligence (AI), this technology-heavy market did well.

Indeed, Taiwanese corporates have benefited from both

a cyclical upturn in semiconductor pricing and strong

incremental demand for advanced chips. Throughout this,

we have been bullish on technology, and the

semiconductor sector specifically, although we have been

highly selective, focusing our interest on businesses that

we feel are true leaders in their field with clear and

defensible business moats. As a result, we have averaged

a significantly lower allocation to Taiwan over the year

compared to the small-cap benchmark, which weighed

on relative performance. In addition, several of our stocks

lagged the benchmark’s rise despite still posting

reasonable returns. Despite our underweight position, and

the recent sell-off in technology stocks that we have

witnessed since the end of the Company’s fiscal year-end,

we continue to be confident in the prospects for high-

quality technology and semiconductor stocks in the

region. As evidence of this, we invested in Chroma Ate

during the year, a company that is one of the top test

equipment businesses globally, specialising in power

testing across a range of industries, but also increasingly

involved in system-level testing for semiconductors. We

expect Chroma to be in a prime position to benefit from

Investment Mana

ers’ Review

abrdn Asia Focus plc 13

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

the structural growth trend in advanced semiconductor

manufacturing.

Elsewhere, we also saw gains from the off-benchmark

exposure that the Company has to Vietnam, which was

about 7% of the portfolio as of end-July 2024. The country

is seeing foreign direct investments pour into higher

technology sectors, especially automotive and electronics

as some multinational corporations seek to reduce their

reliance on China and mitigate geopolitical risks. Here, the

software service company, FPT, continued to deliver

impressive earnings. Despite its share price gains over the

year, we believe the company is still trading at an

attractive valuation.

In South Korea, our lighter than benchmark exposure and

stock picks were positive for performance. The domestic

market lagged the region, as weak export demand and

disappointing domestic economic growth weighed on

capex and corporate earnings. In terms of our holdings,

Korea Shipbuilding & Offshore Engineering (KSOE), which

we had initiated during the year, performed well. We feel it

is well placed to benefit from the industry’s long-term

cycle of vessel newbuilds, due to the need to replace

ageing ships and comply with emissions regulation. This

offset weakness witnessed in Park Systems, a leading

manufacturer of atomic force microscopy systems for

scientific research, which lagged the broader strength in

the technology sector and posted slightly lower than

expected results.

In contrast, parts of Southeast Asia weighed on

performance. Our overweight to Indonesia was a drag

despite good stock selection. The market was weak on the

back of a lack of catalysts and soft corporate earnings for

the second quarter of 2024. Furthermore, the

government's budget plan for 2025 aimed to maintain

economic growth above 5%, but the cut in infrastructure

spending pulled down infrastructure-linked stocks and

sectors, which together with a surprise interest rate

increase by the central bank, worsened the overall

market sentiment.

Another key detractor was Singapore’s AEM Holdings, a

business that has lots of potential but saw its shares sell off

on concerns over a shortfall in inventory, the resignation of

its CEO and results that missed market expectations. On

the back of these developments, we decided to exit our

position to focus on higher conviction technology holdings

elsewhere in the region.

Portfolio Activity

We have continued to focus on earnings visibility and

cashflow generation to ensure that the portfolio remains

fundamentally strong and resilient amid the challenging

environment, with very disparate performance across

markets and sectors.

In China, for instance, we have shifted our exposure

towards more consumer-oriented stocks which we

believe have a positive long-term growth outlook despite

subdued consumer spending at this point in time. This

included introducing Proya Cosmetics and Tongcheng

Travel to the portfolio. Proya Cosmetics, a leading

domestic beauty and skincare company, is known for its

innovative products and strong market presence. The

company is enhancing operational efficiency and

marketing efforts, especially on digital platforms like

Douyin (TikTok) and Alibaba, and is set to benefit from

continued ‘localisation’ as consumers shift from expensive

foreign brands towards more affordable local offerings.

Tongcheng Travel, the largest online travel agency in

China by monthly active users, offers air, train, and bus

tickets, as well as hotel bookings. It has strong backing

from Tencent and Trip.com, its largest shareholders, and

enjoys strong margins. We believe Tongcheng Travel is

well positioned to benefit from increasing domestic travel

among Chinese residents in lower-tier cities. To fund these

new positions, we exited other mainland holdings with

more challenged earnings, such as Joinn Laboratories and

Sinoma Science & Technology. Overall, our China weighting

has remained relatively stable compared to the

benchmark, with a slight underweight due to our cautious

outlook on China.

14 abrdn Asia Focus plc

Elsewhere, in India, we have increased our country

exposure as a result of strong idea generation from the

team and a positive outlook for growth. We participated in

the IPO of Bharti Hexacom, a subsidiary of Bharti Airtel, as it

is a pure domestic player in the Indian telecom sector with

operations in Rajasthan and the North-East region. The

market is close to a duopoly, with Bharti Hexacom holding

a 43.5% market share. These markets have grown faster

than the rest of the country over the past five years, and

we expect future growth from rising penetration and the

5G transition. We also invested in JB Chemicals and

Pharma, a top pharmaceutical company in India with a

strong contract manufacturing business, attractive

financial profile and capable management team.

Additionally, we invested in 360 One WAM, the leading

wealth manager for ultra-high net worth individuals in

India, which has been growing rapidly due to buoyant

capital markets and an acceleration in stake sales by

India’s entrepreneurial promoters. Management highlights

their focus and superior service levels as key competitive

advantages, along with a strong technology platform,

brand and people.

Meanwhile, we introduced a new holding in Korea that is

well placed to ride on the decarbonisation trend in the

shipping industry. Korea Shipbuilding & Offshore

Engineering (KSOE) owns Hyundai Heavy Industry (80%),

Samho Heavy Industry (100%), and Hyundai Mipo

Dockyard (43%). Together, they form the world’s largest

shipbuilding company with a 17% global market share.

KSOE's prospects are supported by two key pillars. First,

the industry is in a long-term cycle of vessel newbuilds due

to the need to replace aging ships and comply with

emissions regulations, leading to a profit upturn from

increased dock use and delivery gains. Second, KSOE is

gaining market share in eco-friendly ships due to its strong

R&D capabilities. It is a leader in eco-friendly technologies

and could play a critical role in the industry's

decarbonisation. KSOE is a market leader in LNG-dual fuel

engines, focusing on X-DF engines, which lower carbon

emissions by reducing heavy-fuel oil usage and are more

profitable than fossil fuel engines.

We also added a new consumer holding in the Philippines,

a large market with an improving economy as inflation

stabilises and global interest rates drop. Century Pacific

Food, the largest canned food company locally, caters to

mass and premium markets across marine, meat, plant-

based, and milk segments. The Po family, who are well-

regarded, run the company. Century Pacific has a strong

brand presence in tuna and is growing in meat and milk.

The company benefits from resilient demand in its core

categories and a product diversification strategy that

should enhance margins over time. It has a good track

record of growing new brands and product categories.

We funded the above by reducing smaller and more

illiquid positions in which we had lower confidence. These

were mostly in Southeast Asia including Singapore (Bukit

Sembawang Estates and Yoma Holdings), Malaysia

(Oriental Holdings and Shangri-La Hotels), Thailand (Tisco

Financial and Hana Microelectronics) and the Philippines,

where Cebu Holdings finally consummated its merger with

Ayala Land.

Outlook

Recent volatility across markets reinforces the extent to

which macroeconomic, political and policy concerns

continue to affect investor sentiment. Technology stocks

are among those which have borne the brunt of the

volatility, although investor hopes appear to wax and

wane based mostly on Nvidia’s announcements. Global

recession fears persist amid worries over whether the US

Federal Reserve can engineer a soft landing for the US

economy, while the consumer outlook remains weak in

China. Geopolitics simmer in the background, with the

upcoming presidential election in the US still deadlocked

and tensions in the Middle East escalating.

In such a still-uncertain backdrop, there are some

potential tailwinds. In September, the Federal Reserve cut

interest rates by 50 basis points, suggesting a turning point

in global monetary conditions. With the West leading in

policy easing, we are moving into a rate cutting cycle in

Asia too, that is likely to boost Asian currencies and allow

more room for governments to support economic growth.

This will benefit smaller companies because of their more

domestic exposure. A lower rate environment also means

lower funding costs for smaller companies, allowing them

to pursue growth more efficiently.

Investment Mana

ers’ Review

Continued

abrdn Asia Focus plc 15

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

Looking ahead, Asian smaller companies are forecast to

deliver outsized earnings growth of around 41% in 2024,

bouncing back strongly from a negative 2023. This growth

significantly outpaces their larger counterparts, with large

caps expected to see about 19% earnings growth and

world equities around 7%. It is noteworthy that small cap

companies are not only delivering earnings but are

forecast to lead in earnings growth until 2025. Valuations

are also on our side, with Asian smaller companies still

cheap relative to their US counterparts, trading at a

relative discount of about 24% to US small caps.

More broadly, micro, small, and medium-sized enterprises

(MSMEs) remain important drivers of growth across

developing Asia, accounting for an average 97% of all

enterprises, 56% of the workforce, and 28% of a country’s

economic output. In effect, these companies are the

backbone of Asian economies.

As a result, we see much potential in Asian smaller

companies, and our portfolio of well-researched Asian

small caps offers a unique investing opportunity. The

portfolio is concentrated, high-conviction and highly

differentiated, with an active share of close to 97%. We

bring considerable expertise to the table, given our long

track record in Asia with a deep and experienced team of

around 35 analysts and portfolio managers. We aim to

find exciting smaller companies that will benefit from

Asia’s expanding middle class, with our on-the-ground

team making the most of inefficiencies in pricing under-

researched smaller companies across the region.

Gabriel Sacks, Flavia Cheong and Xin-Yao Ng

abrdn Asia Limited

23 October 2024

16 abrdn Asia Focus plc

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

The Company aims to maximise total return to

shareholders over the long term from a portfolio made up

predominantly of quoted smaller companies in the

economies of Asia excluding Japan.

Investment Policy

The Company invests in a diversified portfolio of securities

(including equity shares, preference shares, convertible

securities, warrants and other equity-related securities)

predominantly issued by quoted smaller companies

spread across a range of industries and economies in the

Investment Region. The Investment Region includes

Bangladesh, Cambodia, China, Hong Kong, India,

Indonesia, Korea, Laos, Malaysia, Myanmar, Pakistan, The

Philippines, Singapore, Sri Lanka, Taiwan, Thailand and

Vietnam, together with such other economies in Asia as

approved by the Board.

The Company may invest up to 10% of its net assets in

collective investment schemes, and up to 10% of its net

assets in unquoted companies, calculated at the time

of investment.

The Company may also invest in companies traded on

stock markets outside the Investment Region provided

over 75% of each company’s consolidated revenue,

operating income or pre-tax profit is earned from trading

in the Investment Region or the company holds more

than 75% of their consolidated net assets in the

Investment Region.

When the Board considers it in shareholders’ interests, the

Company reserves the right to participate in rights issues

by an investee company.

Risk Diversification

The Company will invest no more than 15% of its gross

assets in any single holding including listed investment

companies at the time of investment.

Gearing

The Board is responsible for determining the gearing

strategy for the Company. Gearing is used selectively to

leverage the Company’s portfolio in order to enhance

returns where and to the extent this is considered

appropriate to do so. Gearing is subject to a maximum

gearing level of 25% of NAV at the time of draw down.

Investment Manager and Alternate

Investment Fund Manager

The Company’s Alternative Investment Fund Manager,

appointed as required by EU Directive 2011/61/EU, is

abrdn Fund Managers Limited (“aFML”) which is

authorised and regulated by the Financial Conduct

Authority. Day to day management of the portfolio is

delegated to abrdn Asia Limited (“abrdn Asia”, the

“Manager” or the “Investment Manager”). aFML and abrdn

Asia are wholly owned subsidiaries of abrdn plc.

Delivering the Investment Policy

The Directors are responsible for determining the

investment policy and the investment objective of the

Company. Day to day management of the Company’s

assets has been delegated, via the AIFM, to the Investment

Manager, abrdn Asia. abrdn Asia invests in a diversified

range of companies throughout the Investment Region in

accordance with the investment policy. abrdn Asia follows

a bottom-up investment process based on a disciplined

evaluation of companies through direct visits by its fund

managers. Stock selection is the major source of added

value. No stock is bought without the fund managers

having first met management. abrdn Asia estimates a

company’s worth in two stages, quality then price. Quality

is defined by reference to management, business focus,

the balance sheet and corporate governance. Price is

calculated by reference to key financial ratios, the market,

the peer group and business prospects. Top-down

investment factors are secondary in the abrdn Asia’s

portfolio construction, with diversification rather than

formal controls guiding stock and sector weights. Whilst

the management of the Company’s investments is not

undertaken with any specific instructions to exclude

certain asset types or classes, the Investment Manager

considers ESG as part of the research for each asset class

during the investment review process. For the manager,

ESG investment is about active engagement, in the belief

that the performance of assets held around the world can

be improved over the longer term.

Overview of Strate

abrdn Asia Focus plc 17

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

A detailed description of the investment process and risk

controls employed by abrdn Asia is disclosed on pages

103 and 104. A comprehensive analysis of the Company’s

portfolio is disclosed on pages 28 to 36 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 59 holdings.

Comparative Indices

From 1 August 2021 the Manager has utilised the MSCI AC

Asia ex Japan Small Cap Index (currency adjusted) as well

as peer group comparisons for Board reporting. For

periods prior to 1 August 2021, a composite index is used

comprising the MSCI AC Asia Pacific ex Japan Small Cap

Index (currency adjusted) up to 31 July 2021 and the MSCI

AC Asia ex Japan Small Cap Index (currency adjusted)

thereafter. It is likely that performance will diverge,

possibly quite dramatically in either direction, from the

comparative index. The Manager seeks to minimise risk by

using in-depth research and does not see divergence

from an index as risk.

Promoting the Company’s Success

In accordance with corporate governance best practice,

the Board is now required to describe to the Company’s

shareholders how the Directors have discharged their

duties and responsibilities over the course of the financial

year following the guidelines set out under section 172 (1)

of the Companies Act 2006 (the “s172 Statement”). This

Statement, from ‘Promoting the Success of the Company’

to “Long Term Investment” on page 19, 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 19.

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 outperformance 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:

18 abrdn Asia Focus plc

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 6

December 2024 in London. We encourage shareholders to lodge their vote by proxy on all

the resolutions put forward.

Online Shareholder Presentation In November 2023 the Board held an online shareholder presentation which was attended

by over 200 shareholders and prospective investors. Based on the success of this event a

further online presentation will be held on Monday 18 November 2024 at 11:00 a.m.

Annual Report We publish a full annual report each year that contains a strategic report, governance

section, financial statements and additional information. The report is available online and in

paper format.

Company Announcements We issue announcements for all substantive news relating to the Company. You can find

these announcements on the website.

Results Announcements We release a full set of financial results at the half year and full year stage. Updated net asset

value figures are announced on a daily basis.

Monthly Factsheets The Manager publishes monthly factsheets on the Company’s website including

commentary on portfolio and market performance.

Website Our website contains a range of information on the Company and includes a full monthly

portfolio listing of our investments as well as updates from the investment management

team. Details of financial results, the investment process and Investment can be found at

asia-focus.co.uk

Investor Relations The Company subscribes to the Manager’s Investor Relations programme (further details

are on page 22).

Social Media Shareholders can access up to date news on the Company and management team by

following the dedicated abrdn Asia Focus page on LinkedIn.

The Manager

The key service provider for the Company is the

Alternative Investment Fund Manager and the

performance of the Manager is reviewed in detail at each

Board meeting. The Manager’s investment process is

outlined on pages 103 and 104 and further information

about the Manager is given on page 102. Shareholders

are key stakeholders in the Company – they are looking to

the Manager to achieve the investment objective over

time and to maximise total return to shareholders over the

long term from a portfolio made up predominantly of

quoted smaller companies in the economies of Asia

excluding Japan. The Board is available to meet at least

annually with shareholders at the Annual General Meeting

and this includes informal meetings with them over lunch

following the formal business of the AGM. This is seen as a

very useful opportunity to understand the needs and

views of the shareholders. In between AGMs, the Directors

and Manager also conduct programmes of investor

meetings with larger institutional, private wealth and other

shareholders to ensure that the Company is meeting their

needs. Such regular meetings may take the form of joint

presentations with the Investment Manager or meetings

directly with a Director where any matters of concern

may be raised directly.

Other Service Providers

The other key stakeholder group is that of the Company’s

third party service providers. The Board is responsible for

selecting the most appropriate outsourced service

providers and monitoring the relationships with these

suppliers regularly in order to ensure a constructive

working relationship. Our service providers look to the

Company to provide them with a clear understanding of

the Company’s needs in order that those requirements

can be delivered efficiently and fairly. The Board, via the

Management Engagement Committee, ensures that the

arrangements with service providers are reviewed at least

annually in detail. The aim is to ensure that contractual

arrangements remain in line with best practice, services

being offered meet the requirements and needs of the

Company and performance is in line with the

expectations of the Board, Manager, Investment Manager

and other relevant stakeholders. Reviews include those of

Overview of Strate

Continued

abrdn Asia Focus plc 19

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

the Company’s depositary and custodian, share registrar,

broker and auditor.

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 on pages 12 to

15 details the key investment decisions taken during the

year and subsequently. The Investment Manager has

continued to monitor the investment portfolio throughout

the year under the supervision of the Board. A list of the

key portfolio changes can be found in the Investment

Manager’s Report.

Directorate During the year the Board concluded its

search for two new independent Directors as part of the

Board succession plans as explained on page 49.

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 The Board considers the Company’s NAV total return figures to be the best indicator of

performance over time and is therefore the main indicator of performance used by the Board.

The figures for this year and for the past 1, 3, 5, 10 years and since inception are set out on page 24.

Performance against

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. 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

page 27.

Discount/Premium to NAV The discount/premium relative to the NAV per share represented by the share price is closely

monitored by the Board. The objective is to avoid large fluctuations in the discount relative to

similar investment companies investing in the region by the use of share buy backs subject to

market conditions. A graph showing the share price premium/(discount) relative to the NAV is

also shown on page 25.

Dividend In 2022 the Board introduced a target dividend of 6.4p per share and the aim is to maintain a

progressive Ordinary dividend so that shareholders can rely on a consistent stream of income.

Dividends paid over the past 10 years are set out on page 24.

20 abrdn Asia Focus plc

Principal Risks and Uncertainties

There are a number of risks which, if realised, could have a material adverse effect on the Company and its financial

condition, performance and prospects. Risks are identified and documented through a risk management framework

and further details on the risk matrix are provided in the Directors’ Report. The Board, through the Audit Committee, has

undertaken a robust review of the principal risks and uncertainties facing the Company including those that would

threaten its business model, future performance, solvency or liquidity. Those principal risks are disclosed in the table

below together with a description of the mitigating actions taken by the Board. The principal risks associated with an

investment in the Company’s Shares are published monthly on the Company’s factsheet or they can be found in the

pre-investment disclosure document published by the Manager, both of which are available on the Company’s website.

The Board also has a process to review longer term risks and consider emerging risks and if any of these are deemed to

be significant these risks are categorised, rated and added to the risk matrix.

Macroeconomic risks arising from geo political uncertainty such as the ongoing conflicts in Ukraine and the Middle East

continue to present a significant risk to world markets. In addition to the risks listed below, the Board is also very conscious

of the risks emanating from increased environmental, social and governance challenges. As climate change pressures

mount, the Board continues to monitor, through its Manager, the potential risk that investee companies may fail to keep

pace with the appropriate rates of change and adaption.

The Board does not consider that the principal risks and uncertainties identified have changed significantly during the

year or since the date of this Annual Report and are not expected to change materially for the current financial year.

Description Mitigating Action

Shareholder and Stakeholder Risk

Risk Unchanged during Year

The Company’s strategy and objectives are regularly reviewed to ensure that

they remain appropriate and effective. The Board monitors the discount level of

the Company’s shares and has in place a buyback mechanism whereby the

Manager is authorised to buy back shares within certain limits. The

macroeconomic and geopolitical challenges continue to cause volatility in

equity markets and the Company’s share price discount to NAV. The Company

buys back shares into treasury seeking to limit volatility. The Broker and

Manager communicate with major shareholders regularly to gauge their views

on the Company, including discount volatility. There are additional direct

meetings undertaken by the Chair and other Directors. The Board monitors

shareholder and market reaction to Company news flow.

Whilst the Board rates this risk overall as stable, the risks associated with certain

constituent parts of this risk, such as Board dependence on the Manager are

rising and will be the subject of continued scrutiny.

Investment Risk

Risk Unchanged during Year

The Board sets, and monitors, its investment restrictions and guidelines, and

receives regular board reports which include performance reporting on the

implementation of the investment policy, the investment process and

application of the guidelines and concentration/liquidity analysis of the portfolio.

abrdn Group provides a team of experienced portfolio managers with detailed

knowledge of the Asian markets. The Investment Manager is in attendance at

all Board meetings. The Board also monitors the Company’s share price relative

to the NAV.

The Board recognises that investing in unlisted securities carries a higher

risk/reward profile. Accordingly it seeks to mitigate this risk by limiting

investment into such securities to 10% of the Company’s net assets (calculated

at the time of investment). For the year ended 31 July 2024 no unlisted

investments were made.

Overview of Strate

Continued

abrdn Asia Focus plc 21

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

Description Mitigating Action

The Manager’s risk department reviews investment risk and a review of credit

worthiness of counterparties is undertaken by its Counterparty Credit Risk

team. The Company does not hedge foreign currency exposure but it may,

from time to time, partially mitigate it by borrowing in foreign currencies.

Gearing is currently provided at attractive rates, the Board and Manager

monitor gearing levels regularly and covenant reports are provided to lenders

bi-monthly.

The Investment Manager includes responsible investing in its assessment of

investee companies together with the impact of climate as part of the

investment process. Responsible investment is about active engagement, in the

belief that the performance of assets held around the world can be improved

over the longer term.

Operational Risk

Risk Unchanged during Year

The Board receives reports from the Manager on internal controls and risk

management at each Board meeting. It receives assurances from all its

significant service providers, as well as back to back assurances where activities

are themselves sub-delegated to other third party providers with which the

Company has no direct contractual relationship eg accounting. The assurance

reports include an independent assessment of the effectiveness of risks and

internal controls at the service providers including their planning for business

continuity and disaster recovery scenarios, together with their policies and

procedures designed to address the risks posed to the Company’s operations

by cyber-crime. Further details of the internal controls which are in place are set

out in the Directors’ Report on pages 49 and 50.

The Manager has documented succession planning in place for key personnel.

There is a team approach to portfolio management of the Company and this

has been clearly communicated to shareholders

Governance & Regulatory Risk

Risk Unchanged during Year

The Board receives assurance from the Manager and Company Secretary and

third party service providers on all aspects of regulatory compliance as well as

drawing upon the significant experience of individual Directors. Upon

appointment Directors receive a detailed induction covering relevant

regulatory matters such as Corporate Governance, the Companies Act and

Listing Rules and further training is available if required.

Major Events & Geo Political Risk

Risk Unchanged during Year

External risks over which the Company has no control are always a risk. The

Manager monitors the Company’s portfolio and is in close communication with

the underlying investee companies in order to navigate and guide the

Company through macroeconomic and geopolitical risks. The Manager

continues to assess and review legacy pandemic risks as well as investment

risks arising from the impact of events such as the Invasion of Ukraine and

increased military tension in East Asia on companies in the portfolio and takes

the necessary investment decisions. The Manager monitors the potential

impact of potential regional conflict and the risk of sanctions being imposed

which limit the free flow of trade. In addition the Board has discussed with the

Manager options that would be available to reduce the impact of conflict on

the portfolio.

22 abrdn Asia Focus plc

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. At 31 July 2024, there were three

male Directors and three female Directors on the Board

and the Company is compliant with the diversity and

inclusion targets set out in Chapter 6 of the FCA’s Listing

Rules. Further details are disclosed in the Directors’ Report

on page 47.

The UK Stewardship Code and Proxy Voting

The Company supports the UK Stewardship Code 2020,

and seeks to play its role in supporting good stewardship

of the companies in which it invests. Responsibility for

actively monitoring the activities of portfolio companies

has been delegated by the Board to the Manager.

The Manager is a tier 1 signatory of the UK Stewardship

Code 2020 which aims to enhance the quality of

engagement by investors with investee companies in

order to improve their socially responsible performance

and the long term investment return to shareholders. The

Manager’s Annual Stewardship Report for 2023 may be

found at abrdn.com. While delivery of stewardship

activities has been delegated to the Manager, the Board

acknowledges its role in setting the tone for the effective

delivery of stewardship on the Company’s behalf.

The Board has also given discretionary powers to the

Manager to exercise voting rights on resolutions proposed

by the investee companies within the Company’s portfolio.

The Manager reports to the Board on a six monthly basis

on stewardship (including voting) issues and additional

information may be found on pages 105 to 108.

Global Greenhouse Gas Emissions and

Streamlined Energy and Carbon Reporting

(“SECR”)

All of the Company’s activities are outsourced to third

parties. The Company therefore 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. For the same reason as set out above, the

Company considers itself to be a low energy user under

the SECR regulations and therefore is not required to

disclose energy and carbon information. Further

information on the Manager’s obligatory disclosures under

the Taskforce on Climate-related Financial Disclosures

(“TCFD”) may be found on the Company’s website.

Environmental, Community, Social and

Human Rights Issues

The Company has no employees and, accordingly, there

are no disclosures to be made in respect of employees. In

relation to the investment portfolio, the Board has

delegated assessment of these issues to the Investment

Manager, responsibility and further information may be

found on page 105 to 108.

Overview of Strate

Continued

abrdn Asia Focus plc 23

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

Modern Slavery Act

Due to the nature of its business, being a Company that

does not offer goods and services to customers, the Board

considers that the Company 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 advisers and service providers in the financial

services industry, to be low risk in relation to this matter.

Viability Statement

The Company does not have a formal fixed period

strategic plan but the Board formally considers risks and

strategy at least annually. The Board considers the

Company, with no fixed life, to be a long term investment

vehicle, but for the purposes of this viability statement has

decided that a period of three years is an appropriate

period over which to report. The Board considers that this

period reflects a balance between looking out over a long

term horizon and the inherent uncertainties of looking out

further than three years.

In assessing the viability of the Company over the review

period the Directors have conducted a robust review of

the principal risks, focusing upon the following factors:

· The principal risks detailed in the Strategic Report;

· The ongoing relevance of the Company’s investment

objective in the current environment;

· The demand for the Company’s Shares evidenced by

the historical level of premium and or discount;

· The level of income generated by the Company;

· The level of gearing provided by the Company’s Loan

Stock and Loan Notes (including the flexibility afforded

by the additional £35m available for drawing under the

Loan Note Facility (uncommitted and subject to lender

credit committee approval) to repay CULS if required in

2025); and

In the event of triggering the conditional Tender Offer in

2026, the liquidity of the Company’s portfolio including the

results of stress test analysis performed by the Manager

under a wide number of market scenarios.

In making this assessment, the Board has examined

scenario analysis covering the impact of significant

historical market events such as the 2008 Global Financial

Crisis, Covid-19 and the Chinese Devaluation on the

liquidity of the portfolio, as well as future scenarios such as

geo-political tensions in East Asia, and how these factors

might affect the Company’s prospects and viability in the

future.

Accordingly, taking into account the Company’s current

position, the fact that the Company’s investments are

mostly liquid and the potential impact of its principal risks

and uncertainties, the Directors have a reasonable

expectation that the Company will be able to continue in

operation and meet its liabilities as they fall due for a

period of three years from the date of this Report. In

making this assessment, the Board has considered that

matters such as significant economic or stock market

volatility, a substantial reduction in the liquidity of the

portfolio or changes in investor sentiment could have an

impact on its assessment of the Company’s prospects

and viability in the future.

Future

The Board’s view on the general outlook for the Company

can be found in my Chair’s Statement on page 11 whilst

the Investment Manager’s views on the outlook for the

portfolio are included on pages 14 and 15.

The Strategic Report has been approved by the Board

and signed on its behalf by:

Krishna Shanmuganathan,

Chair

23 October 2024

24 abrdn Asia Focus plc

Performance (total return)

1 year 3 year 5 year 10 year Since

% return

% return % return inception

Share price

+8.8 +14.8 +37.7 +80.7 +2357.6

Net asset value per Ordinary share – diluted

+7.9 +13.8 +39.6 +103.9 +2472.6

MSCI AC Asia ex Japan Small Cap Index (currency adjusted) +14.1 +17.0 +62.6 +120.5 +312.2

Considered to be an Alternative Performance Measure (see page 100 for more information).

1 year return calculated on a diluted basis as CULS is “in the money”. All other returns are calculated on a diluted basis.

Also represents the period, following the commencement of monitoring performance with effect from 31 July 2021 to determine whether a tender offer for the Ordinary shares

of the Company should be undertaken after five years.

Source: abrdn, Morningstar, Lipper & MSCI

Ten Year Financial Record

Year to 31 July 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Total revenue (£’000) 14,746 10,992 13,896 14,673 14,632 13,595 9,624 18,071 19,984 17,272

Per share (p)

Net revenue return 3.64 1.84 3.86 3.85 4.33 4.29 1.66 9.34 10.29 8.59

Total return (10.03) 33.08 34.46 7.36 15.64 (36.51) 92.34 (7.02) 22.43 24.12

Net ordinary dividends

paid/proposed

2.10 2.10 2.40 2.60 2.80 2.90 3.00 6.40 6.41 6.42

Net special dividends

paid/proposed

0.90 – 0.80 0.80 1.00 0.90 0.20 1.60 2.25 1.00

Net asset value per share (p)

Basic 181.23 213.78 247.09 246.37 260.11 221.29 310.90 295.88 310.49 326.94

Diluted 179.26 208.60 238.50 n/a n/a n/a 309.02 295.25 308.93 324.26

Shareholders’ funds (£’000) 343,967 383,735 430,105 433,706 441,010 358,956 487,958 464,396 485,784 502,260

Figures for 2015-2021 have been restated to reflect the 5:1 sub-division of each Ordinary 25p share into five Ordinary shares of 5p each which occurred on 7 February 2022.

Results

abrdn Asia Focus plc 25

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

Share Price Discount to Diluted Net Asset Value

Five years to 31 July 2024

-20%

-18%

-16%

-14%

-12%

-10%

-8%

-6%

-4%

-2%

31/07/19 31/07/20 31/07/21 31/ 07/22 31/ 07/23 31/07/24

Performance

26 abrdn Asia Focus plc

Capital Return of Diluted NAV and Share Price vs MSCI AC Asia ex Japan Small Cap Index

(sterling adjusted) and MSCI AC Asia Pacific ex Japan Index (sterling adjusted) and

Five years to 31 July 2024 (rebased to 100 as at 31/07/19)

100

110

120

130

140

150

31/07/2019 31/07/2020 31/07/2021 31/07/2022 31/07/2023 31/07/2024

Share Price Diluted NAV MSCI AC Asia ex Japan Small Cap I ndex MSCI AC Asia Pacific ex Japan Index

Continued

Performance

abrdn Asia Focus plc 27

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

Diluted NAV Total Return Since Inception vs MSCI AC Asia Pacific ex Japan Index

(sterling adjusted)

19 October 1995 to 31 July 2024 (rebased to 100 as at 19/10/95)

100

200

300

400

500

600

700

800

900

1000

1100

1200

1300

1400

1500

1600

1700

1800

1900

2000

2100

2200

2300

2400

2500

2600

19/10/95 31/07/2000 31/07/2006 31/07/2012 31/07/2018 31/07/2024

Diluted NAV MSCI AC Asia Pacific ex Japan Index

28 abrdn Asia Focus plc

Portfolio

abrdn Asia Focus plc 29

For the Managers comparative

indices are used as tools for

measurement and not for portfolio

construction. abrdn Asia are buy-

and-hold investors, meaning in

theory a good company is one they

may hold forever. They invest in

companies that they believe they

understand and can value.

Companies in the portfolio are held

for the longer term.

30 abrdn Asia Focus plc

As at 31 July 2024

4.7%

Total assets

Aegis Logistics

4.2%

Total assets

FPT Corporation

A strong and conservative player in India's gas

and liquids logistics sector, with a first mover

advantage in key ports and a fair amount of

capacity expansion to come. The government's

push for the adoption of cleaner energy is also

boosting its liquefied natural gas business.

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.

3.3%

Total assets

Park Systems Corporation

3.3%

Total assets

AKR Corporindo

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.

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.

3.2%

Total assets

Prestige Estates Projects

3.0%

Total assets

Taiwan Union

Prestige Estates is a leading South Indian

developer with a good reputation for executing

and completing projects. It is well-placed to

benefit from ongoing reforms in the real estate

industry, and the recovery of the Bangalore

property market.

Taiwan Union Technology Corp is a leading

maker of copper clad laminate (CCL), a key

base material used to make printed circuit

boards. With a strong commitment to R&D,

it has moved up the value chain through

the years.

2.8%

Total assets

Bank OCBC NISP

2.7%

Total assets

M. P. Evans Group

An Indonesian listed banking and financial

services company, which is a steady consistent

performer backed by healthy asset quality.

M.P. Evans is an Indonesian producer of

sustainable crude palm oil (CPO) with

plantations in five Indonesian provinces.

We expect appreciation for the group to

improve over time with the delivery and

realisation of its estates' value and cashflow

generating potential.

2.7%

Total assets

Affle India

Affle India operates a data platform that helps

direct digital advertising. It is dominant in India

where digitalisation has reached an inflection

point. The company has also pursued a broader

emerging markets growth strategy and now

has some positions in Southeast Asia and

Latin America.

2.6%

Total assets

John Keells Holdings

A respected and reputable Sri Lanka

conglomerate with a healthy balance

sheet and good execution, John Keells has a

hotels and leisure segment that includes

properties in the Maldives. It has other

interests in consumer, transportation and

financial services.

Ten Lar

est Investments

abrdn Asia Focus plc 31

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

As at 31 July 2024

Valuation Total Valuation

2024 assets 2023

Company Industry Country £’000 % £’000

Aegis Logistics Oil, Gas & Consumable Fuels India 25,221 4.7 16,974

FPT Corporation IT Services Vietnam 22,926 4.2 16,849

Park Systems Corporation Electronic Equipment, Instruments &

Components

South Korea 18,070 3.3 28,924

AKR Corporindo Oil, Gas & Consumable Fuels Indonesia 17,804 3.3 16,518

Prestige Estates Projects Real Estate Management &

Development

India 17,104 3.2 10,887

Taiwan Union Technology

Corp

Electronic Equipment, Instruments &

Components

Taiwan 16,354 3.0 14,928

Bank OCBC NISP Banks Indonesia 15,361 2.8 23,675

M.P. Evans Group Food Products United Kingdom 14,751 2.7 12,293

Affle India Media India 14,652 2.7 13,612

John Keells Holdings Industrial Conglomerates Sri Lanka 13,801 2.6 14,586

Top ten investments 176,044 32.5

KFin Technologies Capital Markets India 13,532 2.5 –

Chroma ATE Electronic Equipment, Instruments &

Components

Taiwan 13,474 2.5 –

Vijaya Diagnostic Centre Health Care Providers & Services India 13,285 2.5 8,027

Asian Terminals Transportation Infrastructure Philippines 12,623 2.3 10,329

360 One Wam Capital Markets India 12,605 2.3 –

Mega Lifesciences (Foreign) Pharmaceuticals Thailand 12,507 2.3 13,715

Precision Tsugami China Machinery China 12,143 2.2 10,931

LEENO Industrial Semiconductors & Semiconductor

Equipment

South Korea 12,036 2.2 11,610

Dah Sing Financial Banks Hong Kong 12,010 2.2 12,225

Medikaloka Hermina Health Care Providers & Services Indonesia 11,877 2.2 12,728

Top twenty investments 302,136 55.7

Portfolio

32 abrdn Asia Focus plc

Portfolio

Continued

As at 31 July 2024

Valuation Total Valuation

2024 assets 2023

Company Industry Country £’000 % £’000

Sporton International Professional Services Taiwan 11,869 2.2 13,280

Autohome – ADR Interactive Media & Services China 10,072 1.8 11,462

Zhejiang Shuanghuan

Driveline – A

Auto Components China 10,012 1.8 –

United Plantations Food Products Malaysia 9,768 1.8 6,067

CE Info Systems Software India 9,651 1.8 4,774

Apar Industries Industrial Conglomerates India 9,576 1.8 –

Nam Long Invest

Corporation

Real Estate Management &

Development

Vietnam 9,548 1.8 14,312

Makalot Industrial Textiles, Apparel & Luxury Goods Taiwan 9,349 1.7 –

Bharti Hexacom Telecommunications Service

Providers

India 9,327 1.7 –

AEON Credit Service (M) Consumer Finance Malaysia 9,016 1.7 7,677

Top thirty investments 400,324 73.8

HD Korea Shipbuilding &

Offshore Engineering

Machinery South Korea 8,926 1.6 –

UNO Minda Auto Components India 8,817 1.6 –

SINBON Electronics Electronic Equipment, Instruments &

Components

Taiwan 8,688 1.6 6,824

Ultrajaya Milk Industry &

Trading

Food Products Indonesia 8,510 1.6 11,124

HD Hyundai Marine Solution Industiral Transportation South Korea 8,355 1.5 –

Proya Cosmetics – A Personal Care Products China 8,000 1.5 –

Military Commercial Joint

Stock Bank

Banks Vietnam 7,957 1.5 –

Aptus Value Housing Finance Financial Services India 7,651 1.4 –

Sunonwealth Electric

Machine Industry

Machinery Taiwan 7,500 1.4 10,029

J.B. Chemicals &

Pharmaceuticals

Pharmaceuticals India 7,489 1.4 –

Top forty investments 482,217 88.9

abrdn Asia Focus plc 33

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

As at 31 July 2024

Valuation Total Valuation

2024 assets 2023

Company Industry Country £’000 % £’000

Millenium & Copthorne

Hotels New Zealand (A)

Hotels, Restaurants & Leisure New Zealand 6,727 1.2 8,546

Cyient IT Services India 6,724 1.2 19,980

Century Pacific Food Food Products Philippines 6,390 1.2 –

Alchip Technologies Semiconductors & Semiconductor

Equipment

Taiwan 6,194 1.1 –

Hansol Chemical Chemicals South Korea 5,980 1.1 –

Tongcheng Travel Holdings Hotels, Restaurants & Leisure China 5,742 1.1 –

Chacha Food – A Food Products China 5,642 1.1 7,903

MOMO.com Internet & Direct Marketing Retail Taiwan 5,520 1.0 9,222

Humanica (Foreign) Professional Services Thailand 5,068 0.9 –

ASMPT Ltd Semiconductors & Semiconductor

Equipment

Hong Kong 4,804 0.9 –

Top fifty investments 541,008 99.7

Bangkok Chain Hospital Health Care Providers & Services Thailand 4,772 0.9 –

Pentamaster International Semiconductors & Semiconductor

Equipment

Malaysia 4,405 0.8 6,782

Hang Lung Properties Real Estate Management &

Development

Hong Kong 4,383 0.8 –

Global Health Health Care Providers & Services India 3,377 0.6 –

Asia Vital Components Technology Hardware, Storage &

Peripherals

Taiwan 2,486 0.5 –

Convenience Retail Asia Consumer Staples Distribution Hong Kong 2,077 0.4 4,013

Credit Bureau Asia Professional Services Singapore 2,068 0.4 2,953

First Sponsor Group

(Warrants 21/03/2029)

Real Estate Management &

Development

Singapore 221 – 247

G3 Exploration Oil, Gas & Consumable Fuels China – – –

Total investments 564,797 104.1

Net current assets (22,340) (4.1)

Total assets

542,457 100.0

Holding includes investment in both common and preference lines.

Total assets less current liabilities.

34 abrdn Asia Focus plc

As at 31 July 2024

Sector Breakdown

0% 2% 4% 6% 8% 10% 12%

Air Freight & Logistics

Auto Components

A uto mo biles

Banks

Capital Markets

Ch emicals

Computers & Peripherals

Consumer Finance

Consu mer Staples Distribution

Electronic Equipment, Instruments & Components

Financial Services

Food & Staples Retailing

Food Products

Health Care Providers & Services

Hotels, R estaurants & Leisu re

Industiral Transportation

Industrial Conglom erates

Insurance

Inte rac tiv e Media & Serv ic es

Internet & Direct Marketing Retail

IT Se rvice s

Le isur e Pr o duc ts

Life Sciences Tools & Services

Mac hin er y

Media

Oil, Gas & Consumable Fuels

Personal Care Products

Pharmaceuticals

Professional Services

Real Estate Management & Development

Semiconductors & Semiconductor Equipment

Software

Telecomm unications Service Providers

Textiles, Apparel & Luxury Goods

Transportation Infrastructure

20 24

20 23

Sector/Geo

raphical Analysis

abrdn Asia Focus plc 35

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

Geographic Breakdown

28.2%

14.4%

9.5%

9.4%

9.1%

7.2%

4.1%

4.0%

3.4%

2.6%

2.4%

1.2%

0.4%

Country allocation - 2024

India -28.2%

Taiwan - 14.4%

Indonesia - 9.5%

South Korea - 9.4%

Ch i n a - 9. 1%

Vietnam - 7.2%

Hong Kong - 4.1%

Malaysia - 4.1%

Thailand - 4.0%

Philippines - 3.4%

UK - 2.6%

Sri Lanka - 2.4%

New Zealand - 1.2%

Singapore - 0.4%

16.3%

12.6%

11.6%

9.9%8.4%

6.8%

5.9%

5.7%

5.3%

3.8%

3.7%

2.7%

2.3%

2.2%

2.0%

0.8%

Country allocation - 2023

India -16.3%

Taiwan - 12.6%

Indonesia - 11.6%

Ch i n a - 9. 9%

South Korea - 8.4%

Malaysia - 6.8%

Thailand - 5.9%

Vietnam - 5.7%

Singapore - 5.3%

Hong Kong - 3.8%

Philippines - 3.7%

Sri Lanka - 2.7%

New Zealand - 2.3%

UK - 2.2%

Denmark - 2.0%

Myanmar - 0.8%

36 abrdn Asia Focus plc

Year to 31 July 2024

Currency Returns (in Sterling Terms)

-8% -6% -4% -2% 0% 2% 4% 6% 8% 10%

Australian Dollar

China Renminbi

Hong Kong Dollar

Indian Rupee

Indonesian Rupiah

Malaysian Ringgit

New Zealand Dollar

Philippines Peso

Singapore Dollar

South Korean Won

Sri Lanka Rupee

Taiwan Dollar

Thailand Baht

MSCI Country Index Total Returns (in Sterling Terms)

-20% -10% 0% 10% 20% 30% 40%

Australia

China

Hong Kong

India

Indonesia

South Korea

Malaysia

New Zealand

Philippines

Singapore

Taiwan

Thailand

Currency/Market Performance

abrdn Asia Focus plc 37

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

Zhejiang Shuanghuan Driveline

In which year did we first invest?

2023

% Holding:

1.8%

Where is its head office?

Hangzhou, China

What does Zhejiang Shuanghuan

Driveline do?

The Chinese company has been making transmission

gears for more than 40 years. Its gears are used widely

in the automotive, construction machinery and power

tool industries.

Why do we like the company?

Shuanghuan is a leading supplier of high-precision gears

for electric vehicle (EV) manufacturers in China,

benefiting from its expertise in gear design and

manufacturing. Its strong research and development

capabilities and commitment to innovation and quality are

evident in its top-tier customer base. We see the company

as well placed to capitalise on the growing outsourcing

trend among original equipment manufacturers (OEMs)

and increasing EV penetration, with the company

commanding over 50% market share in gears for Chinese

EVs. Areas of growth would include smart plastic gears,

which are penetrating into various applications including

smart home devices and vehicles, as well as industrial

robots. The company’s overseas expansion is also ahead

of schedule, with a new factory in Hungary set to open in

the fourth quarter of this year.

When did we engage the company on ESG?

We last met the company as a priority engagement effort

in November 2022, in addition to our regular meetings with

the company since then.

What were the key areas of engagement?

We sent an engagement letter to the board secretary to

suggest that the company take proactive actions to

identify potential ESG risks and improve disclosures on

corporate governance, carbon emission, labour safety

and product quality. We also shared a few ESG reports in

the automobile industry with the company, and explained

to management why we feel these some of these issues

can be financially material.

What efforts have the company made

on the ESG front?

We have a favorable view of the company’s culture and

governance standards. The staff is relatively diverse for an

industrial company in China, with many women working

on the factory floor. Employees are incentivized and

aligned with the controllers via stock options. As an

enabler of further EV penetration globally, the company’s

operations support decarbonization efforts by auto OEMs.

The company has set up an ESG committee at the board

level to formulate ESG goals, oversee operations, conduct

research, and provide insights on enhancing ESG

performance. This committee reports to the board.

Furthermore, the company has also established an ESG

working group, which promotes ESG and submits

proposals to the ESG committee, to enhance the group’s

overall risk framework. The company published its first

ever ESG report in 2022.

When do we next meet the company

and what will be on the agenda?

We would look to engage the company over the next six

months to check on its progress in engaging with rating

agency MSCI because the company is a small-cap stock

and has yet to be rated by MSCI for its ESG efforts.

From an operational perspective, we are likely to question

management on the profile of its order book, any changes

to the demand outlook domestically and overseas, and

progress on its overseas expansion. We would also want

to drill down into the company’s individual segments to

check on opportunities and risks, and get an update on

any changes to the long-term strategic plans.

Investment Case Studies

38 abrdn Asia Focus plc

KFin Technologies

In which year did we first invest?

2023

% Holding:

2.5%

Where is its head office?

Hyderabad, India

What does KFin do?

KFin is a digital platform business that serves the asset

management industry in India, by providing services that

help manage investments. For instance, KFIn acts as a

registrar and transfer agent (RTA) for domestic mutual

funds, handling the administrative tasks related to

managing these funds.

Why do we like the company?

We see the company as a key beneficiary of India's

growing wealth accumulation trend, with more people

turning to financial markets for savings. The industry is

attractive due to a duopoly structure in the core RTA

business, a loyal customer base, and high entry barriers

from its low-cost operating model. The market is growing

rapidly, and the company is successfully diversifying its

revenue by product line and geography. We are

impressed by KFin’s management and the CEO’s growth

ambitions, with future acquisitions likely to accelerate its

international expansion. This is an exciting growth

company with a highly recurring core business, strong

financials, a high operating margin of over 40%, healthy

cash flow, and a solid balance sheet.

When did we engage the company on ESG?

We last discussed ESG issues with the company in March

2024.

What were the key areas of engagement?

We have been engaging the company on regulatory risks,

data privacy and cybersecurity, operational risks such as

fraud and money laundering, as well as talent retention.

What efforts have the company made

on the ESG front?

Regulatory risks are significant in the industry, but KFin has

a commendable track record with no material client

errors or issues with the Reserve Bank of India. The

company also has a robust code of conduct to ensure

compliance with regulatory standards, particularly

concerning insider trading. o address staff attrition, KFin

has implemented long-term incentives and employee

stock ownership plans to help retain talent. Additionally,

the company focuses on user consent, data security, and

transparency, aligning with best practices in data privacy

management.

When do we next meet the company and

what will be on the agenda?

We plan to meet the company before the end of 2024 to

discuss key issues such as regulatory trends and labour

management, especially staff attrition rates and talent

retention. We also want to hear management’s thoughts

on the ramp-up of its RTA business in Southeast Asia, their

capital allocation priorities, and the most exciting growth

opportunities. Finally, we will touch base on key customer

relationships and any potential fee pressures, which we do

not believe to be the case.

Investment Case Studies

Continued

abrdn Asia Focus plc 39

Humanica

In which year did we first invest?

2024

% Holding:

0.9%

Where is its head office?

Bangkok, Thailand

What does Humanica do?

Humanica is a leading provider of HR technology and

outsourcing services, such as employee data

management, benefits administration, payroll processing,

and reporting, across Southeast Asia.

Why do we like the company?

We see room for growth in this industry with Humanica’s

prospects enhanced by its merger with DataOn Group,

the largest provider of HR solutions in Indonesia in May

2022. This merger combined the strengths of both

companies' software developers, resulting in the creation

of a new flagship software called Workplaze, completed

in March 2023. Workplaze is a strong competitor to

international human resource management software

because of its lower pricing and localised features tailored

to each country; elements that are often missing in

globally renowned software products. It is gaining

momentum across markets in Southeast Asia. Following

the merger, Humanica’s management team remains

strong and intact. Its financials have improved significantly

due to post-acquisition benefits and the higher average

selling price of Workplaze compared to its flagship

software Humatrix is likely to expand margins over time.

The company continues to target the premium-mass

segment, which still offers plenty room for growth over the

long term.

When did we engage Humanica on ESG?

We last met the company in April 2024.

What were the key areas of engagement?

Our key areas of engagement with the company have

been on data security and the sustainability of research

and development that help prevent its software from

becoming obsolete.

What efforts have the company made

on the ESG front?

On data security, Humanica plans to apply for ISO 27001

by 2025 and ISO 27701 by 2024. They have set up a

committee to oversee information security and personal

data protection. The company has allocated 100 million

baht per year for upgrading its human resource

management and digital healthcare software, developing

new applications, and seeking new partners.

When do we next meet the company

and what will be on the agenda?

We plan to meet the company in the second half of 2024

to discuss its progress on ISO licences and updates on key

ESG areas, including data security and corporate

governance.

In addition, we need to monitor Humanica’s progress in

acquiring new customers across its key markets, retaining

them, and cross-selling new software. As with any

software business, it is important that we track the glide

path towards higher profitability as the company gains

scale and how management balances this with

investments in sales and marketing, R&D and other

business development opportunities.

40 abrdn Asia Focus plc

Governance

abrdn Asia Focus plc 41

The business of the Company is that of an investment trust

investing in the economies of Asia excluding Japan. The

Directors do not envisage any change in this activity in the

foreseeable future. The Company is registered as a public

limited company in England and Wales and is an investment

company as defined by Section 833 of the Companies Act

2006. The Company is also a member of the Association of

Investment Companies

42 abrdn Asia Focus plc

Krishna Shanmuganathan

Independent Non-Executive Director

Experience:

Mr Shanmuganathan has had a varied and successful

career in diplomacy, asset management, consulting and

corporate advisory, with a particular focus on Asia. He

now sits on a number of boards and is chair of Weiss

Korea Opportunities Fund.

Length of service:

4 years, appointed a Director on 3 June 2020

Last re-elected to the Board:

5 December 2023

Committee membership:

Management Engagement Committee and Nomination

Committee

Remuneration:

£42,000 per annum

All other public company directorships:

Weiss Korea Opportunity Fund (Chair)

Other connections with Trust or Manager:

None

Shareholding in Company:

9,047 Ordinary shares

Charlotte Black

Independent Non-Executive Director

Experience:

A Fellow of the Chartered Institute for Securities &

Investment, she was until 2015 director, corporate affairs

at Brewin Dolphin Holdings PLC, having previously served

within that company as marketing director and in

investment management roles. She has served on the

boards of a number of industry related entities including

The Wealth Management Association, The Chartered

Institute for Securities & Investment and Euroclear PLC.

Charlotte is a founder Director of Artclear Ltd – a financial

infrastructure platform for the art industry.

Length of service:

5 years 10 Months, appointed a Director on

16 January 2019

Last re-elected to the Board:

5 December 2023

Committee membership:

Audit Committee, Management Engagement Committee

and Nomination Committee

Remuneration:

£30,000 per annum

All other public company directorships:

None

Other connections with Trust or Manager:

None

Shareholding in Company:

4,790 Ordinary shares

Board of Directors

abrdn Asia Focus plc 43

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

Lindsay Cooper

Independent Non-Executive Director

Experience:

A Singapore permanent resident and member of the

Institute of Chartered Accountants of Scotland. Mr Cooper

co-founded Arisaig Partners in 1996, an independent

Investment Management business where, for 20 years, he

had investment responsibility for the Arisaig Asia

Consumer Fund. Following semi-retirement Mr Cooper

founded Chic & Unique Pte Ltd, a boutique hotels and

hospitality business in Asia and Europe and, more recently,

founded Chi Tree Health, in Singapore. Mr Cooper is also

involved in two charities, Magic Bus Global and Angkor

Hospital for Children (AHC) in Cambodia.

Length of service:

2 years, appointed a Director on 15 June 2022

Last re-elected to the Board:

5 December 2023

Committee membership:

Audit Committee, Management Engagement Committee

and Nomination Committee

Remuneration:

£30,000 per annum

All other public company directorships:

Nil

Other connections with Trust or Manager:

None

Shareholding in Company:

Nil

Alex Finn

Independent Non-Executive Director

Experience:

A partner for 27 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.

Length of service:

2 years, appointed a Director on 13 July 2022

Last re-elected to the Board:

5 December 2023

Committee membership:

Audit Committee (Chairman), Management Engagement

Committee (Chairman) and Nomination Committee

Remuneration:

£34,000 per annum

All other public company directorships:

Nil

Other connections with Trust or Manager:

None

Shareholding in Company:

Nil

44 abrdn Asia Focus plc

Lucy Macdonald

Independent Non-Executive Director

Experience:

Ms Macdonald was, until 2020, managing director, CIO

global equities at Allianz Global Investors. She is an

experienced board director and is currently a member of

the investment committee of the RNLI, a non-executive

council member of the Duchy of Lancaster and senior

independent director of JPMorgan Global Emerging

Markets Income Trust Plc.

Length of service:

Appointed a Director on 5 December 2023

Last re-elected to the Board:

Proposed for election on 6 December 2024

Committee membership:

Management Engagement Committee, Nomination

Committee and Audit Committee

Remuneration:

£30,000 per annum

All other public company directorships:

JPMorgan Global Emerging Markets Income Trust Plc

Other connections with Trust or Manager:

None

Shareholding in Company:

12,000 Ordinary shares

Davina Curling

Senior Independent Non-Executive Director

Experience:

Ms Curling was formerly managing director, head of

European equities at Russell Investments. More recently

she has consulted on projects for small companies and

start-ups in the financial, manufacturing and retail sectors.

She is a non-executive director of Henderson

Opportunities Trust plc and Baillie Gifford European

Growth Trust plc (

from 1 November 2024

). She is also

senior independent director of INVESCO Global Equity

Income Trust plc and an independent member of the

investment committee of St James’s Place Wealth

management.

Length of service:

Appointed a Director on 1 March 2024

Last re-elected to the Board:

Proposed for election on 6 December 2024

Committee membership:

Management Engagement Committee, Nomination

Committee and Audit Committee

Remuneration:

£30,000 per annum

All other public company directorships:

Henderson Opportunities Trust plc

INVESCO Global Equity Income Trust plc

Baillie Gifford European Growth Trust plc (

from 1

November 2024

)

Other connections with Trust or Manager:

None

Shareholding in Company:

Nil

Board of Directors

Continued

abrdn Asia Focus plc 45

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

The Directors present their Report and the audited

financial statements for the year ended 31 July 2024.

Results and Dividends

Details of the Company’s results and proposed dividends

are shown on page 24 of this Report.

Investment Trust Status

The Company (registered in England & Wales No.

03106339) has been accepted by HM Revenue & Customs

as an investment trust subject to the Company continuing

to meet the relevant eligibility conditions of Section 1158 of

the Corporation Tax Act 2010 and the ongoing

requirements of Part 2 Chapter 3 Statutory Instrument

2011/2999 for all financial years commencing on or after

1 August 2012. The Directors are of the opinion that the

Company has conducted its affairs for the year ended 31

July 2024 so as to enable it to comply with the ongoing

requirements for investment trust status.

Individual Savings Accounts

The Company has conducted its affairs so as to satisfy the

requirements as a qualifying security for Individual Savings

Accounts. The Directors intend that the Company will

continue to conduct its affairs in this manner.

Capital Structure, Buybacks and Issuance

The Company’s capital structure is summarised in note 14

to the financial statements.

At 31 July 2024, there were 153,626,718 fully paid Ordinary

shares of 5p each (2023 – 156,457,978 Ordinary shares of

5p each) in issue with a further 55,094,590 Ordinary shares

of 5p held in treasury (2023 – 52,244,590 Ordinary shares

of 5p each held in treasury). During the year 2,850,000

Ordinary shares were purchased in the market for

treasury (2023 – 500,000). 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 treasury Subsequent

to the period end, 2,372,500 Ordinary shares were

purchased in the market for treasury.

On 14 December 2023, 24,012 units of Convertible

Unsecured Loan Stock 2025 were converted into 8,191

new Ordinary shares of 5p each. On 14 June 2024 30,927

units of Convertible Unsecured Loan Stock 2025 were

converted into 10,549 new Ordinary shares of 5p each. In

accordance with the terms of the CULS Issue, (as adjusted

to reflect the five for one share subdivision in February

2022), the conversion price of the CULS for both

conversions was determined at 293.0p nominal of CULS

for one Ordinary share of 5p.

Voting Rights

Ordinary shareholders are entitled to vote on all

resolutions which are proposed at general meetings of the

Company. The Ordinary shares carry a right to receive

dividends. On a winding up, after meeting the liabilities of

the Company, the surplus assets will be paid to Ordinary

shareholders in proportion to their shareholdings.

CULS holders have the right to attend but not vote at

general meetings of the Company. A separate resolution

of CULS holders would be required to be passed before

any modification or compromise of the rights attaching to

the CULS can be made.

Gearing

On 1 December 2020 the Company issued a £30 million

Senior Unsecured Loan Note (the “Loan Note”) at an

annualised interest rate of 3.05%. The Loan Note is

unsecured, unlisted and denominated in sterling and due

to mature in 2035. The Loan Note ranks pari passu with the

Company’s other unsecured and unsubordinated

financial indebtedness.

Management Agreement

The Company has appointed abrdn Fund Managers

Limited (“aFML”), a wholly owned subsidiary of abrdn plc

(“abrdn Group”), as its alternative investment fund

manager. aFML has been appointed to provide

investment management, risk management,

administration and company secretarial services and

promotional activities to the Company. The Company’s

portfolio is managed by abrdn Asia Limited (“abrdn Asia”)

by way of a group delegation agreement in place

between aFML and abrdn Asia. In addition, aFML has sub-

delegated administrative and secretarial services to

abrdn Holdings Limited and promotional activities to

abrdn Investments Limited (“aIL”).

Management Fee

The annual management fee is based upon the market

capitalisation of the Company and charged at 0.85% for

the first £250,000,000, 0.60% for the next £500,000,000 and

0.50% over £750,000,000. Investment management fees

are charged 25% to revenue and 75% to capital.

The management agreement may be terminated by

either the Company or the Manager on the expiry of three

months’ written notice. On termination, the Manager

would be entitled to receive fees which would otherwise

have been due to that date.

Directors’ Report

46 abrdn Asia Focus plc

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 (2023 -

nil) and has not made any charitable donations during the

year (2023 – 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, C Black, K Shanmuganathan, L

Cooper, A Finn, L Macdonald (appointed 5 December

2023) and D Curling (appointed 1 March 2024), together

with Randal Dunluce (The Earl of Antrim), who retired on 5

December 2023, were the only Directors who served

during the year. Pursuant to Principle 23 of the AIC’s Code

of Corporate Governance which recommends that all

directors should be subject to annual re-election by

shareholders, all the members of the Board will retire at

the AGM scheduled for 6 December 2024 and, with the

exception of the Earl of Antrim, will offer themselves for re-

election. Details of each Director’s contribution to the long

term success of the Company are provided on page 49.

The Board considers that there is a balance of skills and

experience within the Board relevant to the leadership

and direction of the Company and that all the Directors

contribute effectively.

In common with most investment trusts, the Company has

no employees. Directors’ & Officers’ liability insurance

cover has been maintained throughout the year at the

expense of the Company.

The Role of the Chair

The Chair is responsible for providing effective leadership

to the Board, by setting the tone of the Company,

demonstrating objective judgement and promoting a

culture of openness and debate. The Chair facilitates the

effective contribution, and encourages active

engagement, by each Director. In conjunction with the

Company Secretary, the Chair ensures that Directors

receive accurate, timely and clear information to assist

them with effective decision-making. The Chair leads the

evaluation of the Board and individual Directors, and acts

upon the results of the evaluation process by recognising

strengths and addressing any weaknesses. The Chair also

engages with major shareholders and ensures that all

Directors understand shareholder views.

Davina Curling has been appointed Senior Independent

Director, acting as a sounding board for the Chair and

acting as an intermediary for other Directors as

applicable. The Audit Committee Chairman and Senior

Independent Director are both available to shareholders

to discuss any concerns they may have.

Board Diversity

The Board recognises the importance of having a range

of skilled, experienced individuals with the right knowledge

represented on the Board in order to allow it to fulfil its

obligations. The Board also recognises the benefits and is

supportive of, and will give due regard to, the principle of

diversity in its recruitment of new Board members. The

Board will not display any bias for age, gender, race,

sexual orientation, socio-economic background, religion,

ethnic or national origins or disability in considering the

appointment of Directors. The Board will continue to

ensure that all appointments are made on the basis of

merit against the specification prepared for each

appointment whilst also taking account of the targets set

out in the FCA’s Listing Rules, which are set out overleaf.

The Board has resolved that the Company’s year-end

date is the most appropriate date for disclosure purposes.

The following information has been provided by each

Director through the completion of questionnaires.

Directors’ Report

Continued

abrdn Asia Focus plc 47

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

Table for reporting on gender as at 31 July 2024

Number of

board

members

Percentage of

the board

Number of

senior

positions

on the board

(CEO, CFO,

Chair and SID)

Number in

executive

management

Percentage of

executive

management

Men 3 50% 2

n/a

(note 4)

n/a

(note 4)

Women 3 50%

(note 1)

(note 3)

Not specified/prefer not to say - - -

Table for reporting on ethnic background as at 31 July 2024

Number of

board

members

Percentage of

the board

Number of

senior

positions

on the board

(CEO, CFO,

Chair and SID)

Number in

executive

management

Percentage of

executive

management

White British or other White

(including minority-white groups)

5 80% 2

(note 3) n/a

(note 4)

n/a

(note 4)

Mixed / Multiple Ethnic Groups - - -

Asian/Asian British 1 20%

(note 2)

Black/African/Caribbean/Black

British

- - -

Other ethnic group, including Arab - - -

Not specified/prefer not to say - - -

Notes:

1. The Company meets the target that at least 40% of Directors are women as set out in LR 6.6.6R (9)(a)(i) for the year ended 31 July 2024.

2. The Company meets the target that at least one Director is from a minority ethnic background as set out in LR 6.6.6R (9)(a)(iii).

3. The Company meets the target that at least one of the senior positions is filled by a woman set out in LR 6.6.6R(a)(ii), for the year to 31 July 2024 as Ms Davina Curling is Senior

independent Director. The Company is externally managed and does not have any executive staff specifically it does not have either a CEO or CFO. The Board believes that it

is appropriate and reasonable that the role of Audit Committee Chairman on an investment trust that has no executive staff should also be considered to be a senior position.

4. This column is not applicable as the Company is externally managed and does not have any executive staff.

48 abrdn Asia Focus plc

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); and

4. executive directors’ remuneration

(provisions 33 and 36 to 40).

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

full text of the Company’s Corporate Governance

Statement can be found on the Company’s website:

asia-focus.co.uk.

The Board is cognisant of the FRC’s new Corporate

Governance Code 2024 provisions effective for financial

years commencing on 1 January 2025 and is in the

process of assessing any consequential changes to be

made to operations and governance.

During the year ended 31 July 2024, the Board had five

scheduled meetings. In addition, the Audit Committee met

twice and the Management Engagement Committee met

once and there has been a number of ad hoc Board

meetings. Between meetings the Board maintains regular

contact with the Manager. Directors have attended the

following scheduled Board meetings and Committee

meetings during the year ended 31 July 2024 (with their

eligibility to attend the relevant meeting in brackets):

Director Board Audit

Committee

Nomination

Committee

Management

Engagement

Committee

K Shanmuganathan

5 (5) n/a 1 (1) 1 (1)

C Black 5 (5) 2 (2) 1 (1) 1 (1)

L. Cooper 5 (5) 2 (2) 1 (1) 1 (1)

A Finn

5 (5) 2 (2) 1 (1) 1 (1)

L Macdonald

3 (3) 1 (1) 1 (1) 0 (0)

D Curling

3 (3) 1 (1) 1 (1) 0 (0)

Earl of Antrim

2 (2) 1 (1) 0 (0) 1 (1)

Ms Macdonald was appointed to the Board on 5 December 2023.

Ms Curling was appointed to the Board on 1 March 2024.

The Earl of Antrim retired on 5 December 2023.

The Chair is not a member of the Audit Committee but typically attends each meeting

by invitation.

Directors’ Report

Continued

abrdn Asia Focus plc 49

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

Policy on Tenure

In compliance with the provisions of the AIC Code, it is

expected that Directors will serve in accordance with the

nine-year time limits laid down by the AIC Code.

Board Committees

Audit Committee

The Audit Committee Report is on pages 59 to 61 of this

Annual Report.

Nomination Committee

All appointments to the Board of Directors are considered

by the Nomination Committee which comprises all of the

Directors. The Board’s overriding priority in appointing new

Directors to the Board is to identify the candidate with the

best range of skills and experience to complement

existing Directors. The Board also recognises the benefits

of diversity and its policy on diversity is referred to in the

Strategic Report on page 22.

During the year the Nomination Committee completed a

search for two new independent 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 decision to appoint Ms Lucy Macdonald and Ms Davina

Curling as independent non-executive Directors with

effect from 5 December 2023 and 1 March 2024.

The Board undertakes an annual evaluation of the Board,

Directors, the Chair and the Audit Committee which is

conducted by questionnaires. In light of a number of

changes to Board composition during the year, the Board

is in the process of agreeing the terms and remit of the

2024 Board evaluation which will be an externally

facilitated evaluation overseen by an independent

specialist firm.

The Nomination Committee has reviewed the

contributions of each Director ahead of their proposed re-

elections at the AGM on 6 December 2024. Ms Black has

continued to bring significant financial promotion,

marketing and communications expertise to the Board

and has been closely involved in the ongoing development

of the Company’s website; Mr Shanmuganathan has

continued to bring his deep experience of Asia and has

seamlessly assumed the role of Chair during the year to

great effect; Mr Cooper has brought the weight of his

significant local Asian market experience to the Board’s

discussions; and Mr Finn has brought relevant and recent

accounting and financial experience to the board and has

led the Audit Committee with expertise. Ms Macdonald

and Ms Curling were appointed during the year and have

both been on the Board for a relatively short time but each

has already contributed significantly to Board discussions

in areas such as portfolio management and performance

reporting. For the foregoing reasons, the independent

members of the Nomination Committee have no

hesitation in recommending the re-election of each

Director who will be submitting themselves for re-election

at the AGM on 6 December 2024.

Management Engagement Committee

The Management Engagement Committee comprises all

the Directors and is chaired by Mr Finn. The Committee is

responsible for reviewing the performance of the

Investment Manager and its compliance with the terms of

the management and secretarial agreement. The terms

and conditions of the Investment Manager’s appointment,

including an evaluation of fees, are reviewed by the

Committee on an annual basis. The Committee believes

that the continuing appointment of the Manager on the

terms agreed is in the interests of shareholders as a whole.

Remuneration Committee

Under the UK Listing Authority rules, where an investment

trust has only non-executive directors, the Code principles

relating to directors’ remuneration do not apply.

Accordingly, matters relating to remuneration are dealt

with by the full Board, which acts as the Remuneration

Committee, and is chaired by the Chair.

The Company’s remuneration policy is to set

remuneration at a level to attract individuals of a calibre

appropriate to the Company's future development.

Further information on remuneration is disclosed in the

Directors’ Remuneration Report on pages 55 to 57.

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

50 abrdn Asia Focus plc

Statements. It is regularly reviewed by the Board and

accords with the FRC Guidance.

The Board has reviewed the effectiveness of the system of

internal control. In particular, it has reviewed and updated

the process for identifying and evaluating the significant

risks affecting the Company and policies by which these

risks are managed.

The Directors have delegated the investment

management of the Company’s assets to the abrdn

Group within overall guidelines, and this embraces

implementation of the system of internal control, including

financial, operational and compliance controls and risk

management. Internal control systems are monitored and

supported by the abrdn Group’s internal audit function

which undertakes periodic examination of business

processes, including compliance with the terms of the

management agreement, and ensures that

recommendations to improve controls are implemented.

Risks are identified and documented through a risk

management framework by each function within the

abrdn Group’s activities. Risk includes financial, regulatory,

market, operational and reputational risk. This helps the

internal audit risk assessment model identify those

functions for review. Any weaknesses identified are

reported to the Board, and timetables are agreed for

implementing improvements to systems. The

implementation of any remedial action required is

monitored and feedback provided to the Board.

The significant risks faced by the Company have been

identified as being financial; operational; and

compliance related.

The key components of the process designed by the

Directors to provide effective internal control are outlined

below:

· the Manager prepares forecasts and management

accounts which allow the Board to assess the

Company’s activities and review its performance;

· the Board and Manager have agreed clearly defined

investment criteria, specified levels of authority and

exposure limits. Reports on these issues, including

performance statistics and investment valuations, are

regularly submitted to the Board and there are

meetings with the Manager and Investment Manager

as appropriate;

· as a matter of course the Manager’s compliance

department continually reviews abrdn’s operations and

reports to the Board on a six monthly basis;

· written agreements are in place which specifically

define the roles and responsibilities of the Manager and

other third-party service providers and, where relevant,

ISAE3402 Reports, a global assurance standard for

reporting on internal controls for service organisations,

or their equivalents are reviewed;

· the Board has considered the need for an internal audit

function but, because of the compliance and internal

control systems in place within abrdn, has decided to

place reliance on the Manager’s systems and internal

audit procedures; and

· at its October 2024 meeting, the Audit Committee

carried out an annual assessment of internal controls for

the year ended 31 July 2024 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 2024. 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 is mindful that the Convertible Unsecured Loan

Stock 2025 (“CULS”) is due to mature on 31 May 2025. The

Board expects to be able to refinance the CULS if desired,

by arranging a new bank facility, drawing down under the

Loan Note Shelf Facility (which is uncommitted and

subject to lender credit committee approval) or by

arranging alternative finance. In the event that the Board

chooses not to refinance the maturing CULS the

Company will repay the CULS from portfolio sales. To this

end the Manager has conducted stress testing on the

portfolio covering reasonably possible downside market

Directors’ Report

Continued

abrdn Asia Focus plc 51

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

scenarios with attention on the resulting liquidity of the

portfolio. The plausible downside scenarios modelled

include historical market events including the Chinese

Devaluation, COVID-19 and other similar shocks and

resulted in a reduction in portfolio valuation of up to

27.5% in the worst case which would not impact any

future plans to redeem of the CULS or the business

model of the Company.

The Directors are mindful of the Principal Risks and

Uncertainties disclosed in the Strategic Report on pages

20 and 21 and they believe that the Company has

adequate financial resources to continue its operational

existence for a period of 12 months from the date of

approval of this Annual Report. They have arrived at this

conclusion having confirmed that the Company’s

diversified portfolio of realisable securities is sufficiently

liquid and could be used to meet short-term funding

requirements were they to arise, including in potentially

less favourable market conditions. The Directors have also

reviewed the revenue and ongoing expenses forecasts for

the coming year and considered the Company's

Statement of Financial Position as at 31 July 2024 which

shows net current liabilities of £22.3 million at that date,

and do not consider this to be a concern due to the

liquidity of the portfolio which would enable the Company

to meet any short term liabilities if required. 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 its business in an honest and ethical manner. The Board

takes a zero-tolerance approach to facilitation of tax

evasion, whether under UK law or under the law of any

foreign country.

Accountability and Audit

The respective responsibilities of the Directors and the

auditors in connection with the financial statements are

set out on pages 58 and 69 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 December 2023 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.

52 abrdn Asia Focus plc

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 2024:

Shareholder No. of Ordinary

shares held

% held

City of London Investment

Management Company

36,485,774 23.75

Interactive Investor (non-beneficial) 20,097,651 13.1

Allspring Global Investments 19,541,334 12.7

Hargreaves Lansdown (non-beneficial) 10,950,336 7.1

Funds managed by abrdn plc 6,051,791 3.9

1607 Capital Partners 5,261,928 3.4

Charles Stanley 4,704,334 3.1

On 23 August 2024 Allspring Global Investments notified a

change in holding to 19,916,065 (12.97%) Ordinary shares;

on 17 October 2024 abrdn plc notified a change in holding

to 9,033,837 (6.0%) Ordinary shares; and on 21 October

2024 City of London Investment Management notified a

change in holding to 32,692,372 (21.6%) Ordinary shares.

There have been no other significant changes notified in

respect of the above holdings between 31 July 2024 and

23 October 2024.

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 Chair, often in conjunction with another

Director, meets with the largest shareholders at

least annually.

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 to gauge their views.

The Notice of the Annual General Meeting, included within

the Annual Report and financial statements, is sent out at

least 20 working days in advance of the meeting. All

shareholders have the opportunity to put questions to the

Board or the Manager, either formally at the Company’s

Annual General Meeting or, where possible, at the

subsequent buffet luncheon for shareholders. The

Company Secretary is available to answer general

shareholder queries at any time throughout the year.

Consumer Duty

The FCA’s Consumer Duty rules were published in July

2022. The rules comprise a fundamental component of

the FCA’s consumer protection strategy and aim to

improve outcomes for retail customers across the entire

financial services industry through the assessment of

various outcomes, one of which is an assessment of

whether a product provides value. Under the Consumer

Duty, the Manager is the product ‘manufacturer’ of the

Company and therefore the Manager was required to

publish its assessment of value from April 2023. Using a

newly developed assessment methodology, the Manager

assessed the Company as 'expected to provide fair value

for the reasonably foreseeable future'. During 2023 the

Board has gained an understanding of the Manager's

basis of assessment and no concerns were identified

with either the assessment method or the outcome of

the assessment.

Special Business at the Annual

General Meeting

Directors’ Authority to Allot Relevant Securities

Approval is sought in Resolution 11, 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 11 is to authorise the

Directors to allot up to a maximum of 102.19 million shares

in total (representing approximately 2/3 of the existing

issued capital of the Company), of which a maximum of

51.09 million 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

Directors’ Report

Continued

abrdn Asia Focus plc 53

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

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 12 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 12 and

subject to the authority to be conferred by Resolution 11

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 13 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 13 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 12 above, may

be held in treasury. During the year the Company has not

bought back any Ordinary shares for Treasury.

If Resolutions 11 to 13 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 14 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 2025. 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 14 in limited and

time sensitive circumstances.

54 abrdn Asia Focus plc

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 11 to 14 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 11 to 14 to be

proposed at the AGM, as they intend to do in respect of

their own beneficial shareholdings amounting to 29,837

Ordinary shares.

By order of the Board

abrdn Holdings Limited -Secretaries

280 Bishopsgate

London EC2M 4AG

23 October 2024

Directors’ Report

Continued

abrdn Asia Focus plc 55

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

The Board has prepared this report in accordance with

the regulations governing the disclosure and approval of

Directors’ remuneration. This Directors’ Remuneration

Report comprises three parts:

1. Remuneration Policy which is subject to a binding

shareholder vote every three years (or sooner if

varied during this interval) – most recently voted on at

the AGM on 1 December 2020;

2. Implementation Report which provides information

on how the Remuneration Policy has been applied

during the year and which is subject to an advisory

vote on the level of remuneration paid during the

year; and

3. Annual Statement.

The law requires the Company’s auditors to audit certain

of the disclosures provided. Where disclosures have been

audited, they are indicated as such. The auditors’ opinion is

included in the report on page 64.

Remuneration Policy

The Directors’ Remuneration Policy takes into

consideration the principles of UK Corporate Governance

and there have been no changes to the policy during the

period of this Report nor are there any proposals for the

foreseeable future.

As the Company has no employees and the Board is

comprised wholly of non-executive Directors and, given

the size and nature of the Company, the Board has not

established a separate Remuneration Committee.

Directors’ remuneration is determined by the Board

as a whole.

The Directors are non-executive and the Company’s

Articles of Association limit the annual aggregate fees

payable to the Board of Directors to £275,000 per annum.

This cap may be increased by shareholder resolution from

time to time and was last increased at the General

Meeting held in January 2022.

31 July 2024

31 July 2023

Chair 42,000 37,500

Chairman of Audit Committee 34,000 32,000

Director 30,000 28,500

Subject to this overall limit, the Board’s policy is that the

remuneration of non-executive Directors should reflect

the nature of their duties, responsibilities and the value

of their time spent and be fair and comparable to that

of other investment trusts that are similar in size, have

a similar capital structure and have a similar

investment objective.

Appointment

· The Company only intends to appoint non-executive

Directors.

· All the Directors are non-executive appointed under the

terms of Letters of Appointment.

· Directors must retire and be subject to re-election at the

first AGM after their appointment, and at least every

three years thereafter.

· New appointments to the Board will be placed on the

fee applicable to all Directors at the time of appointment

(currently £30,000 per annum).

· No incentive or introductory fees will be paid to

encourage a Directorship.

· The Directors are not eligible for bonuses, pension

benefits, share options, long term incentive schemes or

other benefits.

· Directors are entitled to re-imbursement of out-of-

pocket expenses incurred in connection with the

performance of their duties, including travel expenses.

· The Company indemnifies its Directors for all costs,

charges, losses, expenses and liabilities which may be

incurred in the discharge of duties, as a Director of

the Company.

Performance, Service Contracts, Compensation

and Loss of Office

· The Directors’ remuneration is not subject to any

performance-related fee.

· No Director has a service contract.

· No Director has an interest in any contracts with the

Company during the period or subsequently.

· The terms of appointment provide that a Director may

be removed upon three months’ notice.

· Compensation will not be due upon leaving office.

· No Director is entitled to any other monetary payment

or to any assets of the Company.

Directors’ Remuneration Report

56 abrdn Asia Focus plc

Directors’ and Officers’ liability insurance cover is

maintained by the Company on behalf of the Directors.

Under the Articles, the Company indemnifies each of the

Directors out of the assets of the Company against any

liability incurred by them as a Director in defending

proceedings or in connection with any application to the

Court in which relief is granted and separate deeds of

indemnity exist in this regard between the Company and

each Director.

Implementation Report

Directors’ Fees

During the year the Board carried out its annual review of

the level of fees payable to Directors including a review of

comparable peer group directors’ fees and the impact of

inflation. Following the review, it was concluded that the

fees should be increased from £37,500 to £42,000 for the

Chair, from £32,000 to £34,000 for the Audit Committee

Chairman and from £28,500 to £30,000 for other Directors,

with effect from 1 February 2024. Prior to this change, the

Directors’ fees were last increased in February 2023.

There are no further fees to disclose as the Company has

no employees, chief executive or executive directors.

Company Performance

The following chart illustrates the total shareholder return

(including reinvested dividends) for a holding in the

Company’s shares as compared to the MSCI AC Asia ex

Japan Small Cap Index (in Sterling terms) for the ten-year

period to 31 July 2024 (rebased to 100 at 31 July 2014).

Given the absence of any meaningful index with which to

compare performance, this index is deemed to be the

most appropriate one against which to measure the

Company’s performance.

100

120

140

160

180

200

220

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Share Price

MSCI AC e x Japa n Sma ll Cap I ndex

Statement of Voting at General Meeting

At the Company’s last Annual General Meeting, held on 5

December 2023, shareholders approved the Directors’

Remuneration Report in respect of the year ended 31 July

2023 and the following proxy votes were received on the

resolutions:

Resolution For

Against Withheld

(2) Receive and Adopt Directors’

Remuneration Report

90.7m

(99.8%)

183,423

(0.2%)

141,912

(3) To approve the Directors’

Remuneration Policy

90.6m

(99.8%)

213,387

(0.2%)

158,4890

Including discretionary votes.

Approved at the AGM held on 5 December 2023.

Spend on Pay

As the Company has no employees, the Directors do not

consider it appropriate to present a table comparing

remuneration paid to Directors with distributions to

shareholders. However, for ease of reference, the total

fees paid to Directors is shown in the table below, the

dividends paid to shareholders are set out in note 8 and

the shares bought back for treasury are disclosed in

note 14.

Audited Information

Directors’ Remuneration Table (audited)

The Directors who served in the year received the

following fixed fees which exclude employers’ NI and any

VAT payable:

Director 2024

2023

K Shanmuganathan (Chair and highest paid

Director)

39,750 33,833

C Black 29,250 28,000

L Cooper

29,326 27,963

A Finn 33,000 31,250

L Macdonald

19,367 -

D Curling

12,500 -

The Earl of Antrim

9,883 28,000

N K Cayzer

- 11,833

Total 173,076 160,879

Ms Macdonald was appointed to the Board on 5 December 2023.

Ms Curling was appointed to the Board on 1 March 2024.

The Earl of Antrim retired on 5 December 2023.

Mr Cayzer retired from the Board on 30 November 2022.

Directors’ Remuneration Report

Continued

abrdn Asia Focus plc 57

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

No taxable benefits were paid to Directors during the year

(2023: nil).

Annual Percentage Change in Directors’

Remuneration

The table below sets out the annual percentage change in

Directors’ fees for the past four years.

Director

2024

2023

2022

2021

2020

K Shanmuganathan (Chair

and highest paid Director)

17.4 23.0 0.8 84.1 n/a

C Black 4.5 1.8 0.8 1.1 45.7

L Cooper

4.9 n/a n/a n/a n/a

A Finn

5.6 n/a n/a n/a n/a

L Macdonald

- n/a n/a n/a n/a

D Curling

- n/a n/a n/a n/a

Mr Shanmuganathan was appointed to the Board on 3 June 2020.

Mr Cooper was appointed to the Board on 15 June 2022.

Mr Finn was appointed to the Board on 13 July 2022.

Ms Macdonald was appointed to the Board on 5 December 2023.

Ms Curling was appointed to the Board on 1 March 2024.

Sums Paid to Third Parties

None of the fees disclosed above were payable to third

parties in respect of making available the services of

Directors. The amounts paid by the Company to the

Directors were for services as non-executive Directors.

Sums Paid to Former Directors

In accordance with the disclosure requirements of

paragraph 15 of Schedule 8 to the Large and Medium-

sized Companies and Groups (Accounts and Reports)

Regulations 2008/410, no fees were paid to former

Directors in the year ended 31 July 2024 (2023: a fee of

£75,000 plus VAT was paid to Mr Martin Gilbert, a former

Director of the Company who retired in November 2019,

in respect of independent consultancy services provided

to the Company in the three year period ending

31 July 2023).

Directors’ Interests in the Company

(audited)

The Directors are not required to have a shareholding in

the Company. The Directors’ interests in contractual

arrangements with the Company are as shown in note 18

to the financial statements. The Directors (including

connected persons) at 31 July 2024 and 31 July 2023, had

no interest in the share capital of the Company other than

those interests, all of which are beneficial interests, shown

in the following table.

31 July 2024

31 July 2023

Ordinary shares Ordinary shares

K Shanmuganathan 9,047 5,270

C Black 4,790 4,790

L Cooper - -

A Finn - -

L Macdonald 12,000 -

D Curling - -

Earl of Antrim

4,000 4,000

or date of resignation, if earlier.

The Earl of Antrim retired from the Board on 5 December 2023.

The above interests are unchanged at 23 October 2024,

being the nearest practicable date prior to the signing of

this Report.

Annual Statement

On behalf of the Board and in accordance with Part 2 of

Schedule 8 of the Large and Medium-sized Companies

and Groups (Accounts and Reports) (Amendment)

Regulations 2013, I confirm that the above Report on

Remuneration Policy and Remuneration Implementation

summarises, as applicable, for the year ended

31 July 2024:

· the major decisions on Directors’ remuneration;

· any substantial changes relating to Directors’

remuneration made during the year; and

· the context in which the changes occurred and in which

decisions have been taken.

Krishna Shanmuganathan,

Chair

23 October 2024

58 abrdn Asia Focus plc

The Directors are responsible for preparing the Annual

Report and financial statements, in accordance with

applicable law and regulations.

Company law requires the Directors to prepare financial

statements for each financial year. Under that law the

Directors have prepared the financial statements in

accordance with United Kingdom Generally Accepted

Accounting Practice (United Kingdom Accounting

Standards, comprising FRS 102 “The Financial Reporting

Standard applicable in the UK and Republic of Ireland”, and

applicable law).

Under Company law the Directors must not approve the

financial statements unless they are satisfied that they

give a true and fair view of the state of affairs of the

Company and of the profit or loss of the Company for

that period.

In preparing these financial statements, the Directors are

required to:

· select suitable accounting policies and then apply them

consistently;

· make judgments and estimates that are reasonable

and prudent;

· state whether applicable UK Accounting Standards

comprising FRS 102 have been followed, subject to any

material departures disclosed and explained in the

financial statements; and

· prepare the financial statements on the going concern

basis unless it is inappropriate to presume that the

company will continue in business.

The Directors are responsible for keeping proper

accounting records that are sufficient to show and explain

the Company’s transactions and which disclose with

reasonable accuracy at any time the financial position of

the Company and enable them to ensure that its financial

statements comply with the Companies Act 2006. They

are also responsible for taking such steps as are

reasonably open to them to safeguard the assets of

the Company and to prevent and detect fraud and

other irregularities.

Under applicable law and regulations, the Directors are

also responsible for preparing a Directors’ Report

including Strategic Report, Business Review, Directors’

Remuneration Report and Statement of Corporate

Governance that comply with that law and

those regulations.

The financial statements are published on asia-focus.co.uk

which is a website maintained by the Company’s

Manager. The Directors are responsible for the

maintenance and integrity of the corporate and financial

information included on the Company’s website.

Legislation in the UK governing the preparation and

dissemination of financial statements may differ from

legislation in other jurisdictions.

The Directors listed on pages 42 to 44, being the persons

responsible, hereby confirm to the best of their

knowledge that:

· the financial statements, prepared in accordance with

United Kingdom Accounting Standards, comprising FRS

102, give a true and fair view of the assets, liabilities,

financial position and net return of the Company;

· that in the opinion of the Directors, the Annual Report

and financial statements taken as a whole, is fair,

balanced and understandable and it provides the

information necessary to assess the Company’s

performance, business model and strategy. In reaching

this conclusion the Board has assumed that the reader

of the Annual Report and financial statements would

have a reasonable level of general investment

knowledge, and in particular, of investment trusts; and

· the Strategic Report and Directors’ Report include a fair

review of the development and performance of the

business and the position of the Company, together with

a description of the principal risks and uncertainties that

the Company faces.

For abrdn Asia Focus plc

Krishna Shanmuganathan,

Chair

23 October 2024

Statement of Directors’ Responsibilities

abrdn Asia Focus plc 59

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

I am pleased to present the report of the Audit Committee

for the year ended 31 July 2024 which has been prepared

in compliance with applicable legislation.

Committee Composition

The Audit Committee comprises of five independent

Directors at the year end; Charlotte Black, Lindsay

Cooper, Lucy Macdonald, Davina Curling and myself (Alex

Finn), as Chairman. The Directors have satisfied

themselves that at least one of the Committee’s members

has recent and relevant financial experience and I confirm

that the Audit Committee as a whole has competence

relevant to the investment trust sector.

The Audit Committee continues to believe that the

Company does not require an internal audit function of its

own as it delegates its day-to-day operations to third

parties from whom it receives internal controls reports.

Functions of the Committee

The principal function of the Committee is to assist the

Board in relation to the reporting of financial information,

the review of financial controls and the management of

risk. The Committee has defined terms of reference

which are reviewed and re-assessed for their adequacy

on an annual basis. Copies of the terms of reference are

published on the Company's website.

The Committee’s main audit review functions are

listed below:

· to review and monitor the internal control systems and

risk management systems (including those relating to

non-financial risks) on which the Company is reliant;

· to consider annually whether there is a need for the

Company to have its own internal audit function;

· to monitor the integrity of the half-yearly and annual

financial statements of the Company by reviewing, and

challenging where necessary, the actions and

judgements of the Manager;

· to review, and report to the Board on, the significant

financial reporting issues and judgements made in

connection with the preparation of the Company’s

financial statements, interim reports, announcements

and related formal statements;

· to review the content of the Annual Report and Financial

Statements and advise the Board on whether, taken as

a whole, it is fair, balanced and understandable and

provides the information necessary for shareholders to

assess the Company’s performance, business model

and strategy;

· to meet with the auditors to review their proposed audit

programme of work and the findings of the auditors. The

Committee shall also use this as an opportunity to

assess the effectiveness of the audit process;

· to review a statement from the Manager detailing the

arrangements in place within the Manager whereby the

Manager’s staff may, in confidence, escalate concerns

about possible improprieties in matters of financial

reporting or other matters (“whistleblowing”);

· to make recommendations in relation to the

appointment of the auditors and to approve the

remuneration and terms of engagement of the auditors;

· to monitor and review annually the auditors’

independence, objectivity, effectiveness, resources and

qualification; and

· to investigate, when an auditor resigns, the reasons

giving rise to such resignation and consider whether any

action is required.

Activities During the Year

The Audit Committee met twice during the year when it

considered the Annual Report and the Half Yearly Report

in detail. Representatives of the abrdn Group internal

audit, risk and compliance departments reported to the

Committee at these meetings on matters such as internal

control systems, risk and the conduct of the business in the

context of its regulatory environment.

The Committee also undertook a further deep-dive

review of the Company’s Risk Register in order to ensure

that it was functional and fit for purpose.

Review of Internal Control Systems and Risk

The Committee considers the internal control systems

and a matrix of risks at each of its meetings. There is

more detail on the process of these reviews in the

Strategic Report.

Report of the Audit Committee

60 abrdn Asia Focus plc

Financial Statements and Significant Issues

During its review of the Company’s financial statements

for the year ended 31 July 2024, the Audit Committee

considered the following significant issues, including, in

particular, those communicated by the auditors as key

areas of audit emphasis during their planning and

reporting of the year end audit.

Valuation and Existence of Investments

How the issue was addressed - The valuation of

investments is undertaken in accordance with the

accounting policies, disclosed in note 2(b)to the financial

statements on page 76. All investments are listed and

99.6% of the portfolio is considered liquid and quoted in

active markets and have been categorised as Level 1

within the FRS 102 fair value hierarchy and can be verified

against daily market prices. The portfolio holdings and

their pricing are reviewed and verified by the Manager on

a regular basis and management accounts, including a full

portfolio listing, are prepared each month and circulated

to the Board. The portfolio is also reviewed annually by the

auditors and all prices are checked to independent

sources by the auditors. The Company used the services

of an independent Depositary (BNP Paribas SA London

Branch) during the year under review to hold the assets of

the Company. The investment portfolio is reconciled

regularly by the Manager to the depositary/custodian

records and further corroboration is received from the

depositary which confirmed that the accounting records

correctly reflected all investee holdings and that these

agreed to custodian records.

Recognition of Investment Income

How the issue was addressed – The recognition of

investment income is undertaken in accordance with

accounting policy note 2(d) to the financial statements on

page 76. Special dividends are allocated to the capital or

revenue accounts according to the nature of the payment

and the intention of the underlying company. The

Directors review monthly revenue forecasts and dividend

comparisons and the Manager provides monthly internal

control reports to the Board.

Correct Calculation of Management Fees

How the issue was addressed - The management fees

are calculated by the Manager and reviewed periodically

by the Board.

Review of Financial Statements

The Committee is responsible for the preparation of the

Company’s Annual Report. The process is extensive,

requiring input from a number of different third-party

service providers. The Committee reports to the Board on

whether, taken as a whole, the Annual Report and

financial statements are fair, balanced and

understandable. In so doing, the Committee has

considered the following matters:

· the existence of a comprehensive control framework

surrounding the production of the Annual Report and

financial statements which includes a number of

different checking processes;

· the existence of extensive levels of reviews as part of the

production process involving the depositary, the

Manager, the Company Secretary and the auditors

taken together as well as the Committee’s own

expertise;

· the controls in place within the various third-party

service providers to ensure the completeness and

accuracy of the financial records and the security of the

Company’s assets; and

· the externally audited internal control reports of the

Manager, Depositary and related service providers.

The Committee has reviewed the Annual Report and the

work undertaken by the third-party service providers and

is satisfied that, taken as a whole, the Annual Report and

financial statements is fair balanced and understandable.

In reaching this conclusion, the Committee has assumed

that the reader of the Annual Report would have a

reasonable level of knowledge of the investment trust

industry in general and of investment trusts in particular.

The Committee has reported its findings to the Board

which in turn has made its own statement in this regard in

the Directors’ Responsibility Statement on page 58.

Provision of Non-Audit Services

The Committee has put in place a policy on the supply of

non-audit services provided by the auditor. Such services

are considered on a case-by-case basis and may only be

provided if the service is at a reasonable and competitive

cost and does not constitute a conflict of interest or

potential conflict of interest or prevent the auditor from

remaining objective and independent. All non-audit

services require the pre-approval of the Committee. No

non-audit fees were paid to the auditor during the Year

(2023 - nil). The Committee confirms that it has complied

with Part 5.1 of the Competitions and Market Authority’s

Order 2014.

Report of the Audit Committee

Continued

abrdn Asia Focus plc 61

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

Review of Auditors

The Audit Committee has reviewed the effectiveness of

the auditors including:

· Independence: the auditors discuss with the Audit

Committee, at least annually, the steps taken to ensure

their independence and objectivity and make the

Committee aware of any potential issues, explaining all

relevant safeguards;

· Quality of audit work in terms of: (i) the ability to work in

a collegiate manner with the Board and Manager,

addressing queries and issues in a timely manner – 2024

represents the fourth year for PwC and the Audit

Committee is confident that identified queries and

issues have been satisfactorily and promptly resolved;

(ii) its communications/ presentation of outputs – the

Audit Committee is satisfied that the explanation of the

audit plan, any deviations from it and the subsequent

audit findings are comprehensive and comprehensible;

and (iii) the working relationship with management - the

Audit Committee is satisfied that the auditors have

already developed a very constructive working

relationship with the Manager; and,

· Quality of people and service including continuity and

succession plans: the Audit Committee is satisfied that

the audit team is made up of sufficient, suitably

experienced staff with provision made for knowledge of

the investment trust sector and retention on rotation of

the partner.

In 2020 the Audit Committee undertook a tender for the

Company’s external audit services and

PricewaterhouseCoopers LLP (“PwC”) were chosen as the

Company’s independent auditor, with the appointment

having been approved by shareholders at the AGM held

on 1 December 2020.

In accordance with present professional guidelines the

Senior Statutory Auditor is rotated after no more than five

years and the year ended 31 July 2024 will be the fourth

year for which the present Senior Statutory Auditor, Ms

Gillian Alexander, has served. The Committee considers

PwC, the Company’s auditor, to be independent of

the Company.

Alex Finn

Audit Committee Chairman

23 October 2024

62 abrdn Asia Focus plc

Financial

Statements

abrdn Asia Focus plc 63

Three interim dividends of 1.6p and a fourth interim of 1.62p have been

paid in March, June, September and December 2024 totalling 6.42p

(2023 – Ordinary dividend 6.41p); together with a further special

interim dividend in respect of the year ended 31 July 2024 of 1.0p

per Ordinary share which will be paid on 20 December 2024.

The special dividend will bring the total distribution for the year

to 7.42p (2023 – 8.66p)

64 abrdn Asia Focus plc

Report on the audit of the financial statements

Opinion

In our opinion, abrdn Asia Focus plc’s financial statements:

· give a true and fair view of the state of the Company’s affairs as at 31 July 2024 and of its net return and cash flows for

the year then ended;

· have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United

Kingdom Accounting Standards, including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic

of Ireland”, and applicable law); and

· have been prepared in accordance with the requirements of the Companies Act 2006.

We have audited the financial statements, included within the Annual Report, which comprise: the Statement of Financial

Position as at 31 July 2024; the Statement of Comprehensive Income, the Statement of Changes in Equity and the

Statement of Cash Flows for the year then ended; and the notes to the financial statements, which include a description

of the significant accounting policies.

Our opinion is consistent with our reporting to the Audit Committee.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.

Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial

statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to

provide a basis for our opinion.

Independence

We remained independent of the Company in accordance with the ethical requirements that are relevant to our audit

of the financial statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed public interest

entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard

were not provided.

We have provided no non-audit services to the Company in the period under audit.

Our audit approach

Context

The Company is a standalone Investment Trust Company and engages abrdn Fund Managers Limited (the “AIFM”) to

manage its assets.

Overview

Audit scope

· We conducted our audit of the financial statements using information from the AIFM to whom the Directors have

delegated the provision of all administrative functions.

· We tailored the scope of our audit taking into account the types of investments within the Company, the involvement

of the AIFM referred to above, the accounting processes and controls, and the industry in which the Company

operates.

· We obtained an understanding of the control environment in place at the AIFM and adopted a fully substantive testing

approach using reports obtained from the AIFM.

Independent auditors’ report to the members of

abrdn Asia Focus plc

abrdn Asia Focus plc 65

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

Key audit matters

· Income from investments.

· Valuation and existence of listed investments.

Materiality

· Overall materiality: £5,022,000 (2023: £4,857,000) based on approximately 1% of Net Assets.

· Performance materiality: £3,766,500 (2023: £3,642,000).

The scope of our audit

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the

financial statements.

Key audit matters

Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit

of the financial statements of the current period and include the most significant assessed risks of material misstatement

(whether or not due to fraud) identified by the auditors, including those which had the greatest effect on: the overall

audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters,

and any comments we make on the results of our procedures thereon, were addressed in the context of our audit of the

financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these

matters.

This is not a complete list of all risks identified by our audit.

The key audit matters below are consistent with last year.

Key audit matter How our audit addressed the key audit matter

Income from investments

Refer to the Report of the Audit Committee,

Accounting Policies and the Notes to the Financial

Statements.

We focused on the accuracy, completeness and

occurrence of dividend income recognition as

incomplete or inaccurate income could have a

material impact on the Company’s net asset value

and dividend cover.

We also focused on the accounting policy for

investment income recognition and its presentation

in the Statement of Comprehensive Income for

compliance with the requirements of The

Association of Investment Companies Statement of

Recommended Practice (the “AIC SORP”) as

incorrect application could indicate a misstatement

in income recognition.

We assessed the accounting policy for income recognition for compliance

with accounting standards and the AIC SORP and performed testing to

confirm that income had been accounted for in accordance with this stated

accounting policy. We found that the accounting policies implemented were

in accordance with accounting standards and the AIC SORP, and that income

has been accounted for in accordance with the stated accounting policy.

We understood and assessed the design and implementation of key controls

surrounding income recognition.

We tested the accuracy of all dividend receipts by agreeing the dividend

rates for investments to independent market data.

We tested occurrence by testing that all dividends recorded in the year had

been declared in the market by investment holdings, and we traced a sample

of dividends received to bank statements.

To test for completeness, we tested, for all investment holdings in the portfolio,

that all dividends declared in the market for investment holdings had been

recorded.

We tested the allocation and presentation of dividend income between the

revenue and capital return columns of the Statement of Comprehensive

Income in line with the requirements set out in the AIC SORP by determining

the reasons behind dividend distributions.

Based on the audit procedures performed and evidence obtained, we

concluded that income from investments was not materially misstated.

66 abrdn Asia Focus plc

Key audit matter How our audit addressed the key audit matter

Valuation and existence of listed investments

Refer to the Report of the Audit Committee,

Accounting Policies and the Notes to the Financial

Statements.

The investment portfolio at 31 July 2024 comprised

quoted investments of £565 million. We focused on

the valuation and existence of investments

because investments represent the principal

element of the net asset value as disclosed in the

Statement of Financial Position in the financial

statements.

We tested the valuation of the listed investments by agreeing the prices used

in the valuation to independent third party sources.

We tested the existence of listed investments by agreeing the holdings to an

independent confirmation from the Depositary, BNP Paribas SA, London

Branch, as at 31 July 2024.

No material misstatements were identified from this testing.

How we tailored the audit scope

We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the

financial statements as a whole, taking into account the structure of the Company, the accounting processes and

controls, and the industry in which it operates.

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial

statements. In particular, we looked at where subjective judgements are made, for example in respect of classification of

special dividends as revenue or capital.

The impact of climate risk on our audit

In planning our audit, we made enquiries of the Directors to understand the extent of the potential impact of climate

change risk on the Company’s financial statements. The Directors concluded that the impact on the measurement and

disclosures within the financial statements is not material because majority of Company’s investment portfolio is made

up of level 1 quoted securities which are valued at fair value based on market prices. We found this to be consistent with

our understanding of the Company’s investment activities. We also considered the consistency of the climate change

disclosures included in the Strategic Report with the financial statements and our knowledge from our audit.

Materiality

The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for

materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the

nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and in

evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole.

Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:

Overall Company materiality £5,022,000 (2023: £4,857,000).

How we determined it Approximately 1% of Net Assets.

Rationale for benchmark applied We believe that net assets is the primary measure used by the shareholders in assessing the

performance of the entity, and is a generally accepted auditing benchmark. This benchmark

provides an appropriate and consistent year on year basis.

Independent auditors’ report to the members of

abrdn Asia Focus plc

Continued

abrdn Asia Focus plc 67

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

We use performance materiality to reduce to an appropriately low level the probability that the aggregate of

uncorrected and undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in

determining the scope of our audit and the nature and extent of our testing of account balances, classes of transactions

and disclosures, for example in determining sample sizes. Our performance materiality was 75% (2023: 75%) of overall

materiality, amounting to £3,766,500 (2023: £3,642,000) for the Company financial statements.

In determining the performance materiality, we considered a number of factors - the history of misstatements, risk

assessment and aggregation risk and the effectiveness of controls - and concluded that an amount at the upper end of

our normal range was appropriate.

We agreed with the Audit Committee that we would report to them misstatements identified during our audit above

£251,100 (2023: £242,000) as well as misstatements below that amount that, in our view, warranted reporting for

qualitative reasons.

Conclusions relating to going concern

Our evaluation of the Directors’ assessment of the Company’s ability to continue to adopt the going concern basis of

accounting included:

· evaluating the Directors’ updated risk assessment and considering whether it addressed relevant threats, including the

wider macroeconomic uncertainty;

· evaluating the Directors' assessment of potential operational impacts, considering their consistency with other

available information and our understanding of the business and assessed the potential impact on the financial

statements;

· reviewing the Directors' assessment of the Company's financial position in the context of its ability to meet future

expected operating expenses and debt repayments, their assessment of liquidity as well as their review of the

operational resilience of the Company and oversight of key third-party service providers; and

· assessing the implication of significant reductions in Net Asset Value (NAV) as a result of market performance on the

ongoing ability of the Company to operate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions

that, individually or collectively, may cast significant doubt on the Company’s ability to continue as a going concern for a

period of at least twelve months from when the financial statements are authorised for issue.

In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting

in the preparation of the financial statements is appropriate.

However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the

Company's ability to continue as a going concern.

In relation to the Directors’ reporting on how they have applied the UK Corporate Governance Code, we have nothing

material to add or draw attention to in relation to the Directors’ statement in the financial statements about whether the

Directors considered it appropriate to adopt the going concern basis of accounting.

Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant

sections of this report.

Reporting on other information

The other information comprises all of the information in the Annual Report other than the financial statements and our

auditors’ report thereon. The Directors are responsible for the other information. Our opinion on the financial statements

does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent

otherwise explicitly stated in this report, any form of assurance thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so,

consider whether the other information is materially inconsistent with the financial statements or our knowledge

obtained in the audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency

68 abrdn Asia Focus plc

or material misstatement, we are required to perform procedures to conclude whether there is a material misstatement

of the financial statements or a material misstatement of the other information. If, based on the work we have

performed, we conclude that there is a material misstatement of this other information, we are required to report that

fact. We have nothing to report based on these responsibilities.

With respect to the Strategic Report and Directors' Report, we also considered whether the disclosures required by the

UK Companies Act 2006 have been included.

Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain

opinions and matters as described below.

Strategic report and Directors' Report

In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic Report and

Directors' Report for the year ended 31 July 2024 is consistent with the financial statements and has been prepared in

accordance with applicable legal requirements.

In light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we

did not identify any material misstatements in the Strategic Report and Directors' Report.

Directors’ Remuneration

In our opinion, the part of the Directors' Remuneration Report to be audited has been properly prepared in accordance

with the Companies Act 2006.

Corporate governance statement

The Listing Rules require us to review the Directors’ statements in relation to going concern, longer-term viability and that

part of the corporate governance statement relating to the Company’s compliance with the provisions of the UK

Corporate Governance Code specified for our review. Our additional responsibilities with respect to the corporate

governance statement as other information are described in the Reporting on other information section of this report.

Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the

corporate governance statement, included within the Corporate Governance section within the Directors’ Report is

materially consistent with the financial statements and our knowledge obtained during the audit, and we have nothing

material to add or draw attention to in relation to:

· The Directors’ confirmation that they have carried out a robust assessment of the emerging and principal risks;

· The disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify

emerging risks and an explanation of how these are being managed or mitigated;

· The Directors’ statement in the financial statements about whether they considered it appropriate to adopt the going

concern basis of accounting in preparing them, and their identification of any material uncertainties to the Company’s

ability to continue to do so over a period of at least twelve months from the date of approval of the financial

statements;

· The Directors’ explanation as to their assessment of the Company’s prospects, the period this assessment covers and

why the period is appropriate; and

· The Directors’ statement as to whether they have a reasonable expectation that the Company will be able to continue

in operation and meet its liabilities as they fall due over the period of its assessment, including any related disclosures

drawing attention to any necessary qualifications or assumptions.

Our review of the Directors’ statement regarding the longer-term viability of the Company was substantially less in

scope than an audit and only consisted of making inquiries and considering the Directors’ process supporting their

statement; checking that the statement is in alignment with the relevant provisions of the UK Corporate Governance

Code; and considering whether the statement is consistent with the financial statements and our knowledge and

understanding of the Company and its environment obtained in the course of the audit.

Independent auditors’ report to the members of

abrdn Asia Focus plc

Continued

abrdn Asia Focus plc 69

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

In addition, based on the work undertaken as part of our audit, we have concluded that each of the following elements of

the corporate governance statement is materially consistent with the financial statements and our knowledge obtained

during the audit:

· The Directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and understandable,

and provides the information necessary for the members to assess the Company's position, performance, business

model and strategy;

· The section of the Annual Report that describes the review of effectiveness of risk management and internal control

systems; and

· The section of the Annual Report describing the work of the Audit Committee.

We have nothing to report in respect of our responsibility to report when the Directors’ statement relating to the

Company’s compliance with the Code does not properly disclose a departure from a relevant provision of the Code

specified under the Listing Rules for review by the auditors.

Responsibilities for the financial statements and the audit

Responsibilities of the Directors for the financial statements

As explained more fully in the Statement of Directors' Responsibilities, the Directors are responsible for the preparation of

the financial statements in accordance with the applicable framework and for being satisfied that they give a true and

fair view. The Directors are also responsible for such internal control as they determine is necessary to enable the

preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Directors are responsible for assessing the Company’s ability to continue as a

going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of

accounting unless the Directors either intend to liquidate the Company or to cease operations, or have no realistic

alternative but to do so.

Auditors’ responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from

material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with

ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are

considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic

decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line

with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The

extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Based on our understanding of the Company and industry, we identified that the principal risks of non-compliance with

laws and regulations related to breaches of section 1158 of the Corporation Tax Act 2010, and we considered the extent

to which non-compliance might have a material effect on the financial statements. We also considered those laws and

regulations that have a direct impact on the financial statements such as the Companies Act 2006. We evaluated

management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of

override of controls), and determined that the principal risks were related to posting inappropriate journal entries to

increase revenue (investment income and capital gains) or to increase net asset value. Audit procedures performed by

the engagement team included:

70 abrdn Asia Focus plc

· discussions with the AIFM and the Audit Committee, including specific enquiry of known or suspected instances of non-

compliance with laws and regulation and fraud where applicable;

· reviewing relevant meeting minutes, including those of the Audit Committee and the Board of Directors;

· assessment of the Company’s compliance with the requirements of section 1158 of the Corporation Tax Act 2010;

· identifying and testing year-end journal entries, in particular any material or revenue-impacting manual journal entries

posted as part of the Annual Report preparation process; and

· designed audit procedures to incorporate unpredictability around the nature, timing or extent of our testing.

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances

of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the

financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not

detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional

misrepresentations, or through collusion.

Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing

techniques. However, it typically involves selecting a limited number of items for testing, rather than testing complete

populations. We will often seek to target particular items for testing based on their size or risk characteristics. In other cases, we

will use audit sampling to enable us to draw a conclusion about the population from which the sample is selected.

A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:

www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.

Use of this report

This report, including the opinions, has been prepared for and only for the Company’s members as a body in

accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these

opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or

into whose hands it may come save where expressly agreed by our prior consent in writing.

Other required reporting

Companies Act 2006 exception reporting

Under the Companies Act 2006 we are required to report to you if, in our opinion:

· we have not obtained all the information and explanations we require for our audit; or

· adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been

received from branches not visited by us; or

· certain disclosures of Directors’ remuneration specified by law are not made; or

· the financial statements and the part of the Directors' Remuneration Report to be audited are not in agreement with

the accounting records and returns.

We have no exceptions to report arising from this responsibility.

Appointment

Following the recommendation of the Audit Committee, we were appointed by the members on 1 December 2020 to

audit the financial statements for the year ended 31 July 2021 and subsequent financial periods. The period of total

uninterrupted engagement is four years, covering the years ended 31 July 2021 to 31 July 2024.

Gillian Alexander (Senior Statutory Auditor)

for and on behalf of PricewaterhouseCoopers LLP

Chartered Accountants and Statutory Auditors

Edinburgh

23 October 2024

Continued

Independent auditors’ report to the members of

abrdn Asia Focus plc

abrdn Asia Focus plc 71

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

Year ended 31 July 2024 Year ended 31 July 2023

Revenue Capital Total Revenue Capital Total

Notes £’000 £’000 £’000 £’000 £’000 £’000

Gains on investments 10 – 39,271 39,271 – 25,318 25,318

Income 3 17,272 – 17,272 19,984 – 19,984

Exchange losses – (1,052) (1,052) – (384) (384)

Investment management fees 4 (769) (2,307) (3,076) (753) (2,259) (3,012)

Administrative expenses 5 (1,306) – (1,306) (1,312) (16) (1,328)

Net return before finance costs and taxation 15,197 35,912 51,109 17,919 22,659 40,578

Finance costs 6 (501) (1,504) (2,005) (501) (1,502) (2,003)

Net return before taxation 14,696 34,408 49,104 17,418 21,157 38,575

Taxation 7 (1,407) (10,372) (11,779) (1,279) (2,107) (3,386)

Net return after taxation 13,289 24,036 37,325 16,139 19,050 35,189

Return per share (pence): 9

Basic 8.59 15.53 24.12 10.29 12.14 22.43

Diluted 8.08 14.77 22.85 9.66 11.65 21.31

For the year ended 31 July 2024 the conversion option for potential Ordinary shares within the Convertible Unsecured Loan Stock was

dilutive to the revenue and capital return per Ordinary share (2023 – dilutive to revenue and capital return).

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 Comprehensive Income

72 abrdn Asia Focus plc

As at As at

31 July 2024 31 July 2023

Notes £’000 £’000

Non-current assets

Investments at fair value through profit or loss 10 564,797 549,672

Current assets

Debtors and prepayments 11 3,808 2,237

Cash and cash equivalents 12,703 5,807

16,511 8,044

Creditors: amounts falling due within one year

Other creditors 12 (2,483) (1,250)

2.25% Convertible Unsecured Loan Stock 2025 12 (36,368) –

(38,851) (1,250)

Net current (liabilities)/assets (22,340) 6,794

Total assets less current liabilities 542,457 556,466

Non-current liabilities

Creditors: amounts falling due after more than one year

2.25% Convertible Unsecured Loan Stock 2025 13 – (36,175)

3.05% Senior Unsecured Loan Note 2035 13 (29,906) (29,898)

Deferred tax liability on Indian capital gains 13 (10,291) (4,609)

(40,197) (70,682)

Net assets 502,260 485,784

Capital and reserves

Called up share capital 14 10,436 10,435

Capital redemption reserve 2,062 2,062

Share premium account 60,495 60,441

Equity component of 2.25% Convertible Unsecured Loan Stock 2025 13 1,057 1,057

Capital reserve 15 409,798 393,238

Revenue reserve 18,412 18,551

Total shareholders’ funds 502,260 485,784

Net asset value per share (pence):

Basic 16 326.94 310.49

Diluted 16 324.26 308.93

The financial statements were approved by the Board of Directors and authorised for issue on 23 October 2024 and were signed on

behalf of the Board by:

Krishna Shanmuganathan

Chair

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

Statement of Financial Position

abrdn Asia Focus plc 73

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

For the year ended 31 July 2024

Capital Share Equity

Share redemption premium Component Capital Revenue

capital reserve account CULS 2025 reserve reserve Total

Note £’000 £’000 £’000 £’000 £’000 £’000 £’000

Balance at 1 August 2023 10,435 2,062 60,441 1,057 393,238 18,551 485,784

Conversion of 2.25% CULS 2025 12, 13 1 – 54 – – – 55

Purchase of own shares to treasury 14 – – – – (7,476) – (7,476)

Net return after taxation – – – – 24,036 13,289 37,325

Dividends paid 8 – – – – – (13,428) (13,428)

Balance at 31 July 2024 10,436 2,062 60,495 1,057 409,798 18,412 502,260

For the year ended 31 July 2023

Capital Share Equity

Share redemption premium Component Capital Revenue

capital reserve account CULS 2025 reserve reserve Total

Note £’000 £’000 £’000 £’000 £’000 £’000 £’000

Balance at 1 August 2022 10,435 2,062 60,428 1,057 375,450 14,964 464,396

Conversion of 2.25% CULS 2025 13 – – 13 – – – 13

Purchase of own shares to treasury 14 – – – – (1,262) – (1,262)

Net return after taxation – – – – 19,050 16,139 35,189

Dividends paid 8 – – – – – (12,552) (12,552)

Balance at 31 July 2023 10,435 2,062 60,441 1,057 393,238 18,551 485,784

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

Statement of Chan

es in Equity

74 abrdn Asia Focus plc

Year ended Year ended

31 July 2024 31 July 2023

Notes £’000 £’000

Cash flows from operating activities

Net return before finance costs and tax 51,109 40,578

Adjustments for:

Dividend income 3 (16,802) (19,798)

Interest income 3 (470) (186)

Dividends received 16,561 20,094

Interest received 459 169

Interest paid (1,758) (1,743)

Gains on investments 10 (39,271) (25,318)

Foreign exchange movements 1,052 384

Decrease/(increase) in prepayments 3 (5)

Increase in other debtors (2) (15)

Increase/(decrease) in other creditors 31 (1,621)

Stock dividends included in investment income – (25)

Overseas withholding tax suffered 7 (1,509) (1,432)

Net cash inflow from operating activities 9,403 11,082

Cash flows from investing activities

Purchase of investments (199,205) (76,870)

Sales of investments 223,289 76,321

Capital (losses)/gains tax on sales (4,690) –

Net cash inflow/(outflow) from investing activities 19,394 (549)

Cash flows from financing activities

Purchase of own shares for treasury (7,421) (1,261)

Equity dividends paid 8 (13,428) (12,552)

Net cash outflow from financing activities (20,849) (13,813)

Increase/(decrease) in cash and cash equivalents 7,948 (3,280)

Analysis of changes in cash and short term deposits

Opening balance 5,807 9,471

Increase/(decrease) in cash and short term deposits 7,948 (3,280)

Foreign exchange movements (1,052) (384)

Closing balance 12,703 5,807

Represented by:

Money market funds 8,486 –

Cash and short term deposits 4,217 5,807

12,703 5,807

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

Statement of Cash Flows

abrdn Asia Focus plc 75

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

1. Principal activity

The Company is a closed-end investment company, registered in England & Wales No 03106339, with its Ordinary shares

being listed on the London Stock Exchange.

2. Accounting policies

(a) Basis of preparation. The financial statements have been prepared in accordance with Financial Reporting Standard

102, the Companies Act 2006 and the AIC’s Statement of Recommended Practice ‘Financial Statements of Investment

Trust Companies and Venture Capital Trusts’ issued in July 2022. The financial statements are prepared in Sterling which

is the functional currency of the Company and rounded to the nearest £’000. They have also been prepared on a going

concern basis and on the assumption that approval as an investment trust will continue to be granted by HMRC.

Going concern. In accordance with the Financial Reporting Council’s guidance the Directors have undertaken a rigorous

review of the Company’s ability to continue as a going concern. The Company’s assets consist of equity shares in

companies listed on recognised stock exchanges and are considered by the Board to be realisable within a relatively

short timescale under normal market conditions. The Board has set overall limits for borrowing and reviews regularly the

Company’s level of gearing, cash flow projections and compliance with banking covenants.

The Board is mindful that the Convertible Unsecured Loan Stock 2025 (“CULS”) is due to mature on 31 May 2025. The

Board expects to be able to refinance the CULS if desired, by arranging a new bank facility, drawing down under the

Loan Note Shelf Facility or by arranging alternative finance. In the event that the Board chooses not to refinance the

maturing CULS the Board and Manager will repay the CULS from portfolio sales. To this end the Manager has conducted

stress testing on the portfolio covering reasonably possible downside market scenarios with attention on the resulting

liquidity of the portfolio. The plausible downside scenarios modelled include historical market events including the

Chinese Devaluation, COVID-19 and other similar shocks and resulted in a reduction in portfolio valuation of up to

27.5% in the worst case which would not impact any future plans to redeem of the CULS or the business model of

the Company.

The Directors are mindful of the Principal Risks and Uncertainties disclosed in the Strategic Report on pages 20 and 21

and they believe that the Company has adequate financial resources to continue its operational existence for a period

of 12 months from the date of approval of this Annual Report. They have arrived at this conclusion having confirmed that

the Company’s diversified portfolio of realisable securities is sufficiently liquid and could be used to meet short-term

funding requirements were they to arise, including in potentially less favourable market conditions. The Directors have

also reviewed the revenue and ongoing expenses forecasts for the coming year and considered the Company’s

Statement of Financial Position as at 31 July 2024 which shows net current liabilities of £22.3 million at that date, and do

not consider this to be a concern due to the liquidity of the portfolio which would enable the Company to meet any short

term liabilities if required. 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.

Notes to the Financial Statements

For the year ended 31 July 2024

76 abrdn Asia Focus plc

(b) Valuation of investments. The Company has chosen to apply the recognition and measurement provisions of IAS 39

Financial Instruments: Recognition and Measurement and investments have been designated upon initial recognition at

fair value through profit or loss. Investments are recognised and de–recognised at trade date where a purchase or sale

is under a contract whose terms require delivery within the time frame established by the market concerned, and are

initially measured at fair value. Subsequent to initial recognition, investments are measured at fair value. For listed

investments, this is deemed to be bid market prices. Gains and losses arising from changes in fair value and disposals are

included as a capital item in the Statement of Comprehensive Income and are ultimately recognised in the

capital reserve.

(c) Borrowings. Bank loans are initially recognised at cost, being the fair value of the consideration received, net of any issue

expenses. Subsequently, they are measured at amortised cost using the effective interest method. Finance charges are

accounted for on an accruals basis using the effective interest rate method. The Company charges 25% of finance

charges to revenue and 75% to capital.

(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

– 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.

(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.

Notes to the Financial Statements

Continued

abrdn Asia Focus plc 77

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

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.

Gains and losses on sale of investments purchased and sold in India after 1 April 2017 are liable to capital gains tax in

India. At each year end date, a provision for capital gains tax is calculated based upon the Company’s realised and

unrealised gains and losses. There are two rates of tax: short-term and long-term. The short-term rate of tax is

applicable to investments held for less than 12 months and the long-term rate of tax is applicable to investments held for

more than twelve months. The provision is recognised in the Statement of Financial Position and the year-on-year

movement in the provision is recognised in the Statement of Comprehensive Income.

(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 (2023 – 5p). This is not a distributable

reserve.

Capital reserve. This reserve reflects any gains or losses on investments realised in the period along with any movement

in the fair value of investments held that have been recognised in the Statement of Comprehensive Income. These

include gains and losses from foreign currency exchange differences arising on monetary assets and liabilities except

for dividend income receivable. Share buybacks to be held in treasury, which is considered to be a distribution to

shareholders, is also deducted from this reserve. The realised gains part of this reserve is also distributable for the

purpose of funding dividends.

78 abrdn Asia Focus plc

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 2024 may not be available at the time of any future distribution due to movements

between 31 July 2024 and the date of distribution.

(k) Treasury shares. When the Company purchases the Company’s equity share capital as treasury shares, the amount of

the consideration paid, which includes directly attributable costs is recognised as a deduction from equity. When these

shares are sold or reissued subsequently, the amount received is recognised as an increase in equity, and the resulting

surplus or deficit on the transaction is transferred to or from the capital reserve.

(l) Dividends payable. Final dividends are recognised in the financial statements in the period in which Shareholders

approve them.

(m) Segmental reporting. The Directors are of the opinion that the Company is engaged in a single segment of business

activity, being investment business. Consequently, no business segmental analysis is provided however an analysis of the

geographic exposure of the Company’s investments is provided on page 35.

3. Income

2024 2023

£’000 £’000

Income from investments

Overseas dividends 16,007 19,055

UK dividend income 795 718

Stock dividends - 25

16,802 19,798

Other income

Deposit interest 150 186

Interest from money market funds 320 -

470 186

Total income 17,272 19,984

Notes to the Financial Statements

Continued

abrdn Asia Focus plc 79

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

4. Investment management fees

2024 2023

Revenue Capital Total Revenue Capital Total

£’000 £’000 £’000 £’000 £’000 £’000

Investment management fees 769 2,307 3,076 753 2,259 3,012

The Company has an agreement with abrdn Fund Managers Limited (“aFML”) for the provision of management services,

under which investment management services have been delegated to abrdn Asia Limited (“abrdn Asia”).

The management fee is payable monthly in arrears, on a tiered basis, exclusive of VAT where applicable, based on market

capitalisation at an annual rate of 0.85% for the first £250 million, 0.6% for the next £500 million and 0.5% thereafter. Market

capitalisation is defined as the Company’s closing Ordinary share price quoted on the London Stock Exchange multiplied by

the number of Ordinary shares in issue (excluding those held in Treasury), as determined on the last business day of the

calendar month to which the remuneration relates. The balance due to the Manager at the year end was £534,000 (2023 -

£506,000) which represents two months’ fees (2023 - 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.

5. Administrative expenses

2024 2023

£’000 £’000

Administration fees

119 112

Directors’ fees

173 161

Promotional activities

210 219

Auditors’ remuneration

- fees payable to the auditors for the audit of the annual financial statements 52 48

Custodian charges 364 278

Depositary fees 49 46

Registrar fees 43 55

Legal and professional fees 57 93

Other expenses 239 300

1,306 1,312

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 £60,000 (2023 – £86,000). The agreement is terminable on six

months’ notice.

No pension contributions were made in respect of any of the Directors.

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 £210,000 (2023 – £219,000). There was a £173,000 (2023 – £73,000) balance due to abrdn plc at the year end.

There are no non-audit fees charged.

80 abrdn Asia Focus plc

6. Finance costs

2024 2023

Revenue Capital Total Revenue Capital Total

£’000 £’000 £’000 £’000 £’000 £’000

Bank interest paid 5 15 20 1 2 3

Interest on 3.05% Senior Unsecured Loan Note

2035

231 692 923 230 691 921

Interest on 2.25% CULS 2025 203 611 814 208 623 831

Notional interest on 2.25% CULS 2025 39 115 154 39 115 154

Amortisation of 2.25% CULS 2025 issue expenses 23 71 94 23 71 94

501 1,504 2,005 501 1,502 2,003

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

7. Taxation

2024 2023

Revenue Capital Total Revenue Capital Total

£’000 £’000 £’000 £’000 £’000 £’000

(a) Analysis of charge for the year

Indian capital gains tax charge on sales – 4,690 4,690 – – –

Overseas taxation 1,407 – 1,407 1,279 182 1,461

Total current tax charge for the year 1,407 4,690 6,097 1,279 182 1,461

Deferred tax charge on Indian capital gains – 5,682 5,682 – 1,925 1,925

Total tax charge for the year 1,407 10,372 11,779 1,279 2,107 3,386

The Company has recognised a deferred tax liability of £10,291,000 (2023 – £4,609,000) on capital gains which may

arise if Indian investments are sold. The Company has not provided for UK deferred tax on any realised and unrealised

gains or losses of investments as it is exempt from UK tax on these items due to its status as an investment trust

company.

At 31 July 2024 the Company had surplus management expenses and loan relationship deficits of £82,534,000 (2023 –

£76,652,000) 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 £20,634,000 (2023 – £19,163,000).

Notes to the Financial Statements

Continued

abrdn Asia Focus plc 81

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

(b) Factors affecting the tax charge for the year. The tax assessed for the year is the current standard rate of corporation

tax in the UK for a large company of 25% (2023 – lower). The differences are explained below:

2024 2023

Revenue Capital Total Revenue Capital Total

£’000 £’000 £’000 £’000 £’000 £’000

Return before taxation 14,696 34,408 49,104 17,418 21,157 38,575

Return multiplied by the standard tax rate of

corporation tax of 25% (2023 – effective

rate of 21%)

3,674 8,602 12,276 3,658 4,443 8,101

Effects of:

Gains on investments not taxable – (9,818) (9,818) – (5,317) (5,317)

Exchange losses – 263 263 – 81 81

Overseas tax 1,407 – 1,407 1,279 182 1,461

Movement in deferred tax liability on Indian

capital gains

– 5,682 5,682 – 1,925 1,925

Indian capital gains tax charged on sales – 4,690 4,690 – – –

UK dividend income (199) – (199) (151) – (151)

Non-taxable dividend income (4,002) – (4,002) (4,007) – (4,007)

Expenses not deductible for tax purposes 9 – 9 4 3 7

Movement in unutilised management

expenses

634 577 1,211 391 474 865

Movement in unutilised loan relationship

deficits

(116) 376 260 105 316 421

Total tax charge for the year 1,407 10,372 11,779 1,279 2,107 3,386

82 abrdn Asia Focus plc

8. Dividends

2024 2023

£’000 £’000

Third interim dividend for 2023 – 1.6p (2022 – 1.6p) – 2,511

Fourth interim dividend for 2023 – 1.61p (2022 – nil) 2,515 –

Special dividend for 2023 – 2.25p (2022 – 1.6p) 3,498 2,511

First interim dividend for 2024 – 1.6p (2023 – 1.6p) 2,488 2,511

Second interim dividend for 2024 – 1.6p (2023 – 1.6p) 2,466 2,511

Third interim dividend for 2024 – 1.6p (2023 – 1.6p) 2,461 2,508

13,428 12,552

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

We set out below the total dividends paid and proposed in respect of the financial year, which is the basis on which the

requirements of Sections 1158 – 1159 of the Corporation Tax Act 2010 are considered. The revenue available for distribution

by way of dividend for the current year is £13,289,000 (2023- £16,139,000).

2024 2023

£’000 £’000

First interim dividend for 2024 – 1.6p (2023 – 1.6p) 2,488 2,511

Second interim dividend for 2024 – 1.6p (2023 – 1.6p) 2,466 2,511

Third interim dividend for 2024 – 1.6p (2023 – 1.6p) 2,461 2,508

Fourth interim dividend for 2024 – 1.62p (2023 – 1.61p) 2,488 2,515

Proposed special dividend for 2024 – 1.00p (2023 – 2.25p) 1,513 3,498

11,416 13,543

The amount reflected above for the cost of the special dividend for 2024 is based on 151,254,218 Ordinary shares, being the

number of Ordinary shares in issue excluding shares held in treasury at the date of this Report.

Notes to the Financial Statements

Continued

abrdn Asia Focus plc 83

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

9. Return per share

2024 2023

Revenue Capital Total Revenue Capital Total

Basic

Net return after taxation (£’000) 13,289 24,036 37,325 16,139 19,050 35,189

Weighted average number of shares in issue

154,769,839 156,862,299

Return per share (p) 8.59 15.53 24.12 10.29 12.14 22.43

2024 2023

Diluted Revenue Capital Total Revenue Capital Total

Net return after taxation (£’000) 13,511 24,704 38,215 16,366 19,730 36,096

Weighted average number of shares in issue

167,264,923 169,366,591

Return per share (p) 8.08 14.77 22.85 9.66 11.65 21.31

Calculated excluding shares held in treasury.

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 12,495,085 (2023 - 12,504,292) to

167,264,923 (2023 - 169,366,591) Ordinary shares.

For the year ended 31 July 2024 the assumed conversion for potential Ordinary shares was dilutive to the revenue and the

capital return per Ordinary share (2023 - dilutive to the revenue return and the capital return). Where dilution occurs, the net

returns are adjusted for interest charges and issue expenses relating to the CULS (2024 - £890,000; 2023 - £907,000). Total

earnings for the period are tested for dilution. Once dilution has been determined individual revenue and capital earnings

are adjusted.

84 abrdn Asia Focus plc

10. Investments at fair value through profit or loss

2024 2023

£’000 £’000

Opening book cost 397,237 377,733

Opening investment holding gains 152,435 147,108

Opening fair value 549,672 524,841

Analysis of transactions made during the year

Purchases at cost 200,360 76,896

Sales proceeds received (224,506) (77,383)

Gains on investments 39,271 25,318

Closing fair value 564,797 549,672

Closing book cost 407,225 397,237

Closing investment gains 157,572 152,435

Closing fair value 564,797 549,672

2024 2023

£’000 £’000

Investments listed on an overseas investment exchange 550,046 537,379

Investments listed on the UK investment exchange 14,751 12,293

564,797 549,672

The Company received £224,506,000 (2023 - £77,383,000) from investments sold in the period. The book cost of these

investments when they were purchased was £190,372,000 (2023 - £57,392,000). These investments have been revalued over

time and until they were sold any unrealised gains/losses were included in the fair value of the investments.

Transaction costs. During the year expenses were incurred in acquiring or disposing of investments classified as fair value

through profit or loss. These have been expensed through capital and are included within gains/(losses) on investments in the

Statement of Comprehensive Income. The total costs were as follows:

2024 2023

£’000 £’000

Purchases 257 95

Sales 446 159

703 254

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.

Notes to the Financial Statements

Continued

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Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

11. Debtors: amounts falling due within one year

2024 2023

£’000 £’000

Amounts due from brokers for sales 2,560 1,343

Other debtors 897 754

Prepayments and accrued income 351 140

3,808 2,237

None of the above amounts is past their due date or impaired (2023 – same).

12. Creditors: amounts falling due within one year

2024 2023

(a) Other creditors £’000 £’000

Amounts due to brokers for purchases 1,155 –

Amounts due for the purchase of own shares to treasury 56 –

Other creditors 1,272 1,250

2,483 1,250

2024 2023

Number of Liability Equity Number of Liability Equity

units component component units component component

(b) 2.25% CULS 2025 £’000 £’000 £’000 £’000 £’000 £’000

Balance at beginning of year 36,629 36,175 1,057 – – –

Conversion of 2.25% CULS 2025 (55) (55) – – – –

Notional interest on CULS transferred to

revenue reserve

– 154 – – – –

Amortisation and issue expenses – 94 – – – –

Balance at end of year 36,574 36,368 1,057 – – –

The 2.25% CULS 2025 can be converted at the election of holders into Ordinary shares during the months of May and

November each year throughout their life, commencing 30 November 2018 to 31 May 2025 at a rate of 1 Ordinary share

for every 293.0p (2023 – 293.0p) nominal of CULS. Interest is payable on the CULS on 31 May and 30 November each

year, commencing on 30 November 2018.

86 abrdn Asia Focus plc

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 2024 the Company received elections from CULS holders to convert £54,939 (2023 – £12,753) nominal amount of

CULS into 18,740 (2023 – 4,347) Ordinary shares.

The fair value of the 2025 CULS at 31 July 2024 was £35,441,000 (2023 – £34,890,000).

13. Non-current liabilities

2024 2023

Number of Liability Equity Number of Liability Equity

units component component units component component

(a) 2.25% CULS 2025 £’000 £’000 £’000 £’000 £’000 £’000

Balance at beginning of year – – – 36,642 35,940 1,057

Conversion of 2.25% CULS 2025 – – – (13) (13) –

Notional interest on CULS

transferred to revenue reserve

– – – – 154 –

Amortisation and issue expenses – – – – 94 –

Balance at end of year – – – 36,629 36,175 1,057

The 2.25% CULS 2025 can be converted at the election of holders into Ordinary shares during the months of May and

November each year throughout their life, commencing 30 November 2018 to 31 May 2025 at a rate of 1 Ordinary share

for every 293.0p (2023 – 293.0p) nominal of CULS. Interest is payable on the CULS on 31 May and 30 November each

year, commencing on 30 November 2018.

The 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 2024 the Company received elections from CULS holders to convert £54,939 (2023 – £12,753) nominal amount of CULS

into 18,740 (2023 – 4,347) Ordinary shares.

The fair value of the 2025 CULS at 31 July 2024 was £35,441,000 (2023 – £34,890,000).

Notes to the Financial Statements

Continued

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Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

2024 2023

(b) Loan Note £’000 £’000

3.05% Senior Unsecured Loan Note 2035 30,000 30,000

Unamortised Loan Note issue expenses (94) (102)

29,906 29,898

On 1 December 2020 the Company issued £30,000,000 of a 15 year loan note at a fixed rate of 3.05%. Interest is payable

in half yearly instalments in June and December and the Loan Note is due to be redeemed at par on 1 December 2035.

The issue costs of £118,000 will be amortised over the life of the loan note. There is also a shelf facility of £35,000,000

available to the Company for the purpose of repaying the CULS, which has not been unutilised. The shelf facility is

uncommitted and subject to credit committee approval in advance of any drawing. 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 2024 was £27,112,000 (2023 – £26,603,000), the value

being based on a comparable quoted debt security.

2024 2023

£’000 £’000

14. Called up share capital

2024 2023

£’000 £’000

Allotted, called-up and fully paid

Ordinary shares of 5p (2023 – 5p) 7,681 7,823

Treasury shares 2,755 2,612

10,436 10,435

Ordinary Treasury Total

shares shares shares

Number Number Number

At 31 July 2023 156,457,978 52,244,590 208,702,568

Conversion of CULS 18,740 – 18,740

Buyback of own shares (2,850,000) 2,850,000 –

At 31 July 2024 153,626,718 55,094,590 208,721,308

88 abrdn Asia Focus plc

During the year 2,850,000 Ordinary shares of 5p were purchased (2023 – 500,000 Ordinary shares of 5p were purchased) by

the Company at a total cost of £7,476,000 (2023 – total cost of £1,262,000), all of which were held in treasury. At the year end

55,094,590 (2023 – 52,244,590) shares were held in treasury, which represents 26.40% (2023 – 25.03%) of the Company’s total

issued share capital at 31 July 2024. During the year there were a further 18,740 (2023 – 4,347) Ordinary shares issued as a

result of CULS conversions.

Since the year end the Company bought back for treasury a further 2,372,500 Ordinary shares for a total consideration of

£6,809,000.

15. Reserves

2024 2023

£’000 £’000

Capital reserve

At 31 July 2023 393,238 375,450

Movement in investment holdings fair value 5,137 5,327

Gains on realisation of investments at fair value 34,134 19,991

Purchase of own shares to treasury (7,476) (1,262)

Movement in deferred liability on Indian capital gains (5,682) (1,925)

Capital gains tax on sales – (182)

Foreign exchange movement (1,052) (384)

Capital expenses (3,811) (3,777)

At 31 July 2024 414,488 393,238

The capital reserve includes investment holding gains amounting to £157,572,000 (2023 – £152,435,000) 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

2024 2023

Basic

Net assets attributable £502,260,000 £485,784,000

Number of shares in issue

153,626,718 156,457,978

Net asset value per share 326.94p 310.49p

Notes to the Financial Statements

Continued

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Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

2024 2023

Diluted

Net assets attributable £538,628,000 £521,959,000

Number of shares in issue

166,109,558 168,959,568

Net asset value per share

324.26p 308.93p

Calculated excluding shares held in treasury.

The diluted net asset value per share has been calculated on the assumption that £36,574,720 (2023 - £36,629,659) 2.25% Convertible Unsecured Loan Stock 2025

(“CULS”) is converted at 293.0p (2023 - 293.0p) per share, giving a total of 166,109,558 (2023 - 168,959,568) 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 (2023 - 293.0p) per share. In such

circumstances a net asset value is produced and disclosed assuming the convertible debt is fully converted. At 31 July 2024 the cum income NAV was 326.94p (2023 -

310.49p) and thus the CULS were ‘in the money’ (2023 - same).

17. Analysis of changes in net debt

At At

31 July Currency Cash Non-cash 31 July

2023 differences flows movements 2024

£’000 £’000 £’000 £’000 £’000

Cash and short term deposits 5,807 (1,052) 7,948 - 12,703

Debt due within one year - - - (36,368) (36,368)

Debt due after more than one year (70,682) - - 30,485 (40,197)

(64,875) (1,052) 7,948 (5,883) (63,862)

At At

31 July Currency Cash Non-cash 31 July

2022 differences flows movements 2023

£’000 £’000 £’000 £’000 £’000

Cash and short term deposits 9,471 (384) (3,280) - 5,807

Debt due after more than one year (68,516) - - (2,166) (70,682)

(59,045) (384) (3,280) (2,166) (64,875)

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.

90 abrdn Asia Focus plc

18. Related party transactions and transactions with the Manager

Fees payable during the year to the Directors and their interests in shares of the Company are considered to be related party

transactions and are disclosed within the Directors’ Remuneration Report on pages 56 and 57. The balance of fees due to

Directors at the year end was £nil (2023 – £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.

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.

Notes to the Financial Statements

Continued

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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 2024 Years % £’000 £’000

Assets

Sterling - - - 11,295

Chinese Renminbi - - - 985

Vietnam Dong - - - 247

New Taiwan Dollar 155

Indian Rupee - - - 20

US Dollar - - - 1

- - - 12,703

Liabilities

2.25% Convertible Unsecured Loan Stock 2025 0.83 2.3 36,368 -

3.05% Senior Unsecured Loan Note 2035 11.34 3.1 29,906 -

- - 66,274 -

92 abrdn Asia Focus plc

Weighted average Weighted

period for which average Fixed Floating

rate is fixed interest rate rate rate

At 31 July 2023 Years % £’000 £’000

Assets

Sterling - - - 4,664

Chinese Renminbi - - - 775

Vietnam Dong - - - 361

Thailand Baht - - - 4

US Dollar - - - 3

- - - 5,807

Liabilities

2.25% Convertible Unsecured Loan Stock 2025 1.83 2.3 36,175 -

3.05% Senior Unsecured Loan Note 2035 12.35 3.1 29,898 -

- - 66,073 -

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.

Notes to the Financial Statements

Continued

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Foreign currency risk exposure by currency of denomination:

31 July 2024 31 July 2023

Net monetary Total Net monetary Total

Overseas assets/ currency Overseas assets/ currency

investments (liabilities) exposure Investments (liabilities) exposure

£’000 £’000 £’000 £’000 £’000 £’000

Chinese Renminbi 23,653 985 24,638 21,839 775 22,614

Danish Krona – – 10,937 – 10,937

Hong Kong Dollar 45,564 – 45,564 49,118 – 49,118

Indian Rupee 159,012 20 159,032 89,410 – 89,410

Indonesian Rupiah 53,552 – 53,552 64,045 – 64,045

Korean Won 53,366 – 53,366 46,231 – 46,231

Malaysian Ringgit 18,784 – 18,784 30,827 – 30,827

New Taiwan Dollar 81,434 155 81,589 69,008 – 69,008

New Zealand Dollar 6,727 – 6,727 12,605 – 12,605

Philippine Peso 19,012 – 19,012 20,287 – 20,287

Singapore Dollar 2,290 – 2,290 33,221 – 33,221

Sri Lankan Rupee 13,801 – 13,801 14,586 – 14,586

Thailand Baht 22,347 – 22,347 32,643 4 32,647

US Dollar 10,073 1 10,074 11,461 3 11,464

Vietnamese Dong 40,431 247 40,678 31,161 361 31,522

550,046 1,408 551,454 537,379 1,143 538,522

Sterling 14,751 (54,979) (40,228) 12,293 (61,409) (49,116)

Total 564,797 (53,571) 511,226 549,672 (60,266) 489,406

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.

94 abrdn Asia Focus plc

Investment in Far East equities or those of companies that derive significant revenue or profit from the Far East involves a

greater degree of risk than that usually associated with investment in the securities in major securities markets. The securities

that the Company owns may be considered speculative because of this higher degree of risk. It is the Board’s policy to hold an

appropriate spread of investments in the portfolio in order to reduce the risk arising from factors specific to a particular

country or sector. Both the allocation of assets and the stock selection process, as detailed on pages 103 and 104, 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% (2023 – 20%) higher or lower while all other

variables remained constant, the return attributable to Ordinary shareholders for the year ended 31 July 2024 would have

increased/(decreased) by £112,959,000 (2023 – increased/(decreased) by £109,934,000) 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 2024 are shown in note 13.

Liquidity risk is not considered to be significant as the Company’s assets comprise mainly readily realisable securities, which

can be sold to meet funding commitments if necessary. Details of the Board’s policy on gearing are shown in the investment

policy section on page 16.

Liquidity risk exposure. At 31 July 2024 the Company had borrowings in the form of the £36,574,000 (2023 – £36,629,000)

nominal of 2.25% Convertible Unsecured Loan Stock 2025 and £29,906,000 (2023 – £29,898,000) in the form of the 3.05%

Senior Unsecured Loan Note 2035.

At 31 July 2024 the amortised cost of the Company’s 3.05% Senior Unsecured Loan Note 2035 was £29,906,000 (2023 –

£29,898,000). The maximum exposure at 31 July 2024 was £29,906,000 (2023 – £29,898,000) and the minimum exposure at 31

July 2024 was £29,898,000 (2023 – £29,892,000).

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 2024 £’000 £’000 £’000 £’000

2.25% Convertible Unsecured Loan Stock 2025 37,053 – 37,053 –

3.05% Senior Unsecured Loan Note 2035 40,523 – 915 39,608

77,576 – 37,968 39,608

Notes to the Financial Statements

Continued

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Due

Due between

Expected within 3 months Due after

cashflows 3 months and 1 year 1 year

31 July 2023 £’000 £’000 £’000 £’000

2.25% Convertible Unsecured Loan Stock 2025 37,691 – 827 36,864

3.05% Senior Unsecured Loan Note 2035 41,438 – 915 40,523

79,129 – 1,742 77,387

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:

2024 2023

Statement Statement

of Financial Maximum of Financial Maximum

Position exposure Position exposure

Current assets £’000 £’000 £’000 £’000

Debtors and prepayments 3,808 3,808 2,237 2,237

Cash and short term deposits 12,703 12,703 5,807 5,807

16,511 16,511 8,044 8,044

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

96 abrdn Asia Focus plc

Fair values of financial assets and financial liabilities. The fair value of the loan note has been calculated at £27,112,000 as at 31

July 2024 (2023 – £26,603,000) compared to a value at amortised cost in the financial statements of £29,906,000 (2023 –

£29,898,000) (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 2024 as follows:

Level 1 Level 2 Level 3 Total

As at 31 July 2024 Note £’000 £’000 £’000 £’000

Financial assets and liabilities at fair value through profit or loss

Quoted equities a) 562,138 – – 562,138

Quoted preference shares b) – – 2,438 2,438

Quoted warrants b) – 221 – 221

Net fair value 562,138 221 2,438 564,797

Level 1 Level 2 Level 3 Total

As at 31 July 2023 Note £’000 £’000 £’000 £’000

Financial assets and liabilities at fair value through profit or loss

Quoted equities a) 536,515 – 9,958 546,473

Quoted preference shares b) – – 2,835 2,835

Quoted warrants b) – 247 117 364

Net fair value 536,515 247 12,910 549,672

Notes to the Financial Statements

Continued

abrdn Asia Focus plc 97

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

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 2024 31 July 2023

Level 3 Financial assets at fair value through profit or loss £’000 £’000

Opening fair value 12,910 9,664

Transfer to level 1 (9,958) –

Transfers from level 2 – 2,952

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 (514) 294

Closing balance 2,438 12,910

The Company’s investee, CEBU Holdings received final regulatory approval to merge with another company, Ayala Land,

during the year and new shares were issued in Ayala Land to satisfy the transaction by a share conversion. The valuation

methodology previously employed was based on the underlying quoted price of Ayala Land and the implied conversion ratio

providing a value of £9,958,000 at the previous year end, 31 July 2023. As a result, a transfer of £9,958,000 has been made

from level 3 to level 1.

Transfers from level 2 during 2023 comprise Millennium & Copthorne preference shares of £2,835,000 to reflect the absence

of a consistent market quote. These have been priced in line with their Ordinary shares and valued at £2,438,000 at the

current year end. In addition First Sponsor Group warrants of £117,000 have been classified as level 3 to reflect their illiquidity.

Their fair value has been based on a trade executed in February 2023 and the holding was sold during the year.

98 abrdn Asia Focus plc

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:

2024 2023

£’000 £’000

Equity

Equity share capital 10,436 10,435

Reserves 491,824 475,349

Liabilities

3.05% Senior Unsecured Loan Note 2035 29,906 29,898

2.25% Convertible Unsecured Loan Stock 2025 36,368 36,175

568,534 551,857

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.

2024 2023

£’000 £’000

Investments at fair value through profit or loss 564,797 549,672

Current assets excluding cash and cash equivalents 1,248 894

Current liabilities (1,328) (1,250)

Deferred tax liability on Indian capital gains (10,291) (4,609)

554,426 544,707

Shareholders’ funds 502,260 485,784

Gearing (%) 10.4 12.1

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

– the planned level of gearing which takes account of the Manager’s views on the market;

– the level of equity shares in issue;

– the extent to which revenue in excess of that which is required to be distributed should be retained.

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

period.

The Company does not have any externally imposed capital requirements.

Notes to the Financial Statements

Continued

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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. 2024 has been presented on a diluted basis as the Convertible Unsecured Loan Stock (“CULS”) is “in the money”

(2023 – same).

As at As at

31 July 2024 31 July 2023

NAV per Ordinary share (p) a 324.26 308.93

Share price (p) b 278.00 264.00

Discount (a-b)/a 14.3% 14.5%

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 2024 31 July 2023

Revenue return per Ordinary share (p) a 8.59 10.29

Dividends declared (p) b 6.42 8.66

Dividend cover a/b 1.34 1.19

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 2024 31 July 2023

Borrowings (£’000) a 66,274 66,073

Cash and short term deposits (£’000) b 12,703 5,807

Amounts due to brokers (£’000) c 1,155 –

Amounts due from brokers (£’000) d 2,560 1,343

Shareholders’ funds (£’000) e 502,260 485,784

Net gearing (a-b+c-d)/e 10.4% 12.1%

Alternative Performance Measures

(

Unaudited

)

100 abrdn Asia Focus plc

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.

2024 2023

Investment management fees (£’000) 3,076 3,012

Administrative expenses (£’000) 1,306 1,328

Less: non-recurring charges

(£’000) (32) (67)

Ongoing charges (£’000) 4,350 4,273

Average net assets (£’000) 488,772 462,127

Ongoing charges ratio 0.89% 0.92%

Professional fees comprising corporate and legal fees considered unlikely to recur.

The ongoing charges ratio provided in the Company’s Key Information Document is calculated in line with the PRIIPs regulations, which

includes finance costs and transaction charges.

Total return

NAV and share price total returns show how the NAV and share price has performed over a period of time in percentage terms, taking

into account both capital returns and dividends paid to shareholders. NAV and share price total returns are monitored against open-

ended and closed-ended competitors, and the Reference Index, respectively.

Year ended 31 July 2024 NAV Price

Opening at 1 August 2023 a 308.93p 264.00p

Closing at 31 July 2024 b 324.26p 278.00p

Price movements c=(b/a)-1 5.0% 5.3%

Dividend reinvestment

d 2.9% 3.5%

Total return c+d +7.9% +8.8%

Year ended 31 July 2023 NAV Price

Opening at 1 August 2022 a 295.25p 254.00p

Closing at 31 July 2023 b 308.93p 264.00p

Price movements c=(b/a)-1 4.6% 3.9%

Dividend reinvestment

d 3.0% 3.4%

Total return c+d +7.6% +7.3%

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.

Alternative Performance Measures

(

Unaudited

)

Continued

abrdn Asia Focus plc 101

Corporate

Information

The Company’s Investment

Manager is abrdn Asia

Limited, a wholly owned

subsidiary of abrdn plc

which has assets under

management and

administration of £505.9

billion as at 30 June 2024

102 abrdn Asia Focus plc

abrdn Asia Limited

abrdn Fund Managers Limited (“aFML”), authorised and

regulated by the Financial Conduct Authority, has been

appointed as alternative investment fund manager to the

Company. aFML has in turn delegated portfolio

management to abrdn Asia Limited (“abrdn Asia”).

The Investment Team Senior Managers

Gabriel Sacks

Investment Director, Equities Asia

Chartered Financial Analyst, MA in Land Economy from

Cambridge University. Joined the abrdn Group in 2008 as

part of the London-based Global Emerging Markets

Equities team and transferred to Asian Equities in 2018.

Flavia Cheong

Head of Equities – Asia Pacific, Asian Equities

CFA Charterholder, Masters in Economics from University

of Auckland. Previously with Investment Company of the

People’s Republic of China and Development Bank of

Singapore. Started investment career in 1987. Joined

abrdn Asia in August 1996.

abrdn

Worldwide, the Manager has a combined £505.9 billion (as

at 30 June 2024) in assets under management and

administration for a range of clients, including individuals

and institutions, through mutual and segregated funds.

abrdn Group has its headquarters in Edinburgh with

principal offices in Aberdeen, London, Singapore,

Philadelphia, Bangkok, Edinburgh, Hong Kong,

Luxembourg, Sao Paulo, Stockholm, Sydney, Taipei,

and Tokyo

Xin-Yao Ng

Investment Director, Equities Asia

CFA Charterholder, BSc in Business from Nanyang

Technological University. Xin-Yao is based in Singapore

and joined the abrdn Group in 2018 from Allard Partners

CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.

Information about the Investment Mana

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Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

Investment Approach and Style

As active equity investors, the Investment Manager believes that deep fundamental research, responsible stewardship

and a disciplined investment process is the best approach to meet our client’s investment needs – now and in the future.

Its approach to equity investing is underpinned by three core investment beliefs.

Fundamental research delivers insights that can be used to exploit market inefficiencies. In the Investment Manager’s

view, company fundamentals ultimately drive share prices but are often valued inefficiently in the shorter term. The

Investment Manager believes that fundamental research is the key to delivering insights that allow us to exploit these

inefficiencies and identify the best investment opportunities for client portfolios.

The Investment Manager places constructive engagement and environmental, social and governance (ESG)

considerations at the heart of company research, ensuring it is a responsible steward of its clients’ assets. The

Investment Manager believes this approach can help to identify and avoid risks

Disciplined, active investment can deliver superior outcomes for our clients. The Investment Manager aims to build

high conviction portfolios where its stock-specific insights drive performance, giving its clients access to the best

investment ideas.

Investment Process

The Investment Process

104 abrdn Asia Focus plc

The investment process has five stages:

1. Idea Generation: Comprehensive coverage of the

broad global universe with a team of analysts

generating investment ideas from company meetings,

combined with corroborating evidence from

competitors, suppliers and customers. We will also use

quant tools to refine coverage.

2. Research The market implicitly embeds a lot of

information in a stock price, and we take time to

understand and interpret this as we build our own

views about the outlook of companies and the way the

market is likely to value them in the future. Our in-depth

analysis of a company’s financials and business

prospects helps us formulate a forward-looking view of

earnings and cash flow trajectories, and we apply a

variety of forward looking multiples in comparing

valuations with competitors and across industries and

markets. To fully leverage the benefits of our

considerable research resource, our equity teams use

a common investment language and research

framework that structures how we express our thinking

on companies. This facilitates the effective and

unambiguous articulation of research insights. External

research is also utilised to gain insight on the consensus

view and supplement proprietary research. ESG

considerations are integrated throughout the research

process with each stock receiving an ESG score

alongside an overall quality score.

3. Stock and sector review:

Buy ideas are peer reviewed

by the Developed Markets equity team, evaluating the

level of conviction and the materiality, corroboration

and correlation of those investment opportunities.

4. Portfolio Construction: Portfolio construction is bottom-

up driven, focused on investing in companies that pass

our rigorous quality assessment, are attractively

valued, and have appealing income characteristics.

The largest component of the fund’s active risk will be

stock-specific with appropriate diversification across a

broad range of countries and sectors. We sell a stock if

it has come to reflect all the upside we expect and now

prices in our view of the fundamentals. We will also sell

if our investment thesis has played out or is proved

wrong, or if we find more interesting opportunities

elsewhere. Continuous monitoring of company

fundamentals and valuation is critical and we use a

variety of proprietary and external quantitative tools to

support portfolio construction. Quality is defined by

reference to factors including management, business

model, balance sheet and ESG considerations.

The Investment Manager believes that good

investment decision making requires clarity of

responsibility for those decisions. Every stock in the

portfolio has a named analyst responsible for its

coverage, and every portfolio has a named fund

manager responsible for its management. The

individual portfolio managers make those decisions

supported and challenged by the team, but

accountability for the final decision is clear.

5. Engagement: The Investment Manager is committed to

regular, ongoing engagement with the companies in

which it invests, to help to maintain and enhance all

areas of their performance including their ESG

standards into the future. As part of the investment

process, the Investment Manager undertakes a

significant number of company meetings each year on

behalf of the Company. These meetings provide an

opportunity to discuss various relevant issues including

board composition, remuneration, audit, climate

change, labour issues, human rights, bribery and

corruption. Companies are strongly encouraged to set

clear targets or key performance indicators on all

material risks, including those that are ESG related. This

engagement is not limited to a company’s

management team. It can include many other

stakeholders such as non-government agencies,

industry and regulatory bodies, as well as activists and

the company’s customers and clients.

The Investment Process

Continued

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ESG considerations

Although the Company does not have sustainability

characteristics as part of its investment objective or policy,

ESG analysis is integrated into each part of the Investment

Manager’s investment process outlined above and is

integral to each investment decision.

At the investment stage, ESG factors and analysis can help

to frame where best to invest by considering material risks

and opportunities alongside other financial metrics. Due

diligence can ascertain whether such risks are being

adequately managed, and whether the market has

understood and priced them accordingly.

abrdn Group has a well-established central sustainability

team which supports investment teams across different

asset classes with its thematic work on areas such as

shareholder engagement, remuneration issues, and

climate change, as well as taking responsibility for voting

policies. abrdn Group believes in active engagement with

its investments and potential investments: from providing

initial guidance on suitable metrics through to holding the

investee company to account for delivering on its

promises. In practice, it is through applying this

sustainability filter that the Investment Manager would be

comfortable investing in, for example, sectors such as

mining and oil and gas, subject to the belief, based on such

engagement and investee companies delivering on their

commitments, that a company is taking the necessary

action to address the energy transition.

The investment process also leverages a wealth of

knowledge, insight and expertise across asset classes and

regions within abrdn. This allows the Investment Manager

to take advantage of equity colleagues across Asia who

are meeting companies and conducting research and

sharing their insights using one common global research

platform. This is invaluable when investing in the Asian

equity market. Corporate level insights are shared with the

credit team which enriches the equity view through an

understanding of the full capital structure of the

businesses invested in. Members of the Investment

Manager’s multi-asset and economics teams regularly

share macro level insights with the Developing Markets

equity team.

Risk Management

The Investment Manager utilises a number of quantitative

risk tools to ensure it is fully aware of and understand all

the risks prevalent in portfolios it manages. These risk

management systems monitor and analyse active risk, the

composition of portfolio positions, as well as contribution

to risk and marginal contribution to risk of the portfolio’s

holdings. The systems break down the risk within the

portfolio by industry and country factors, and highlight the

stocks with the highest marginal contribution to risk and

the largest diversification benefit. Sector, thematic and

geographical positions are a residual of stock selection

decisions, but are monitored to ensure excessive risk is not

taken in any one area. The Investment Manager also

makes use of pre-trade analytics to assess the impact of

any trades on the portfolio risk metrics.

In addition, portfolios are formally reviewed on a regular

basis with the Investment Manager’s Global Head of

Equities, the Portfolio Managers, the Investment Manager’s

Investment Governance & Oversight Team (IGO) and

members of the Manager’s Investment Risk Team. This

third party oversight both monitors portfolio risk and also

oversees operational risk to ensure client objectives

are met.

Responsible Investment and En

ement

106 abrdn Asia Focus plc

Environmental, Social and Governance (“ESG”) Engagement

This section of the Annual Report aims to present more information on the Investment Manager’s approach to

integrating ESG considerations into its investment decision-making and the implications for the Company.

The Board is very conscious of the risks emanating from increased ESG challenges. 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 considers ESG criteria as part of the research process for each asset class and as part of the

investment process. ESG investment is about active engagement that can help us determine how the assets may

perform over the longer term.

Currently, the Company’s portfolio is ESG BBB rated by MSCI, as is the Benchmark. The Company’s portfolio Economic

Emission Intensity is only 25.6% of its benchmark.

BBB 74.4% 68 18.5% 100%

BBB rated by

MSCI ESG

Lower carbon intensity

than the benchmark

Engagements with

portfolio companies

during the year

Average Return On

Equity of portfolio

companies (versus

benchmark average

10.7%)

of researched companies

include integration of ESG

company analysis

The importance of ESG research in

small-cap investing

When it comes to analysing and assessing the ESG of

potential investments, the Investment Manager has an

ESG team and screening process and takes ESG into

consideration as part of its decision making, even though it

is not integral to the Company’s objective. The process

focuses upon careful and rigorous due diligence, rather

than a reliance on publicly disclosed information. Three

factors can be considered as follows:

· Environmental factors relate to how a company

conducts itself with regard to environmental

conservation and sustainability. Types of environmental

risks and opportunities include a company’s energy

consumption, waste disposal, land development and

carbon footprint, among others.

· Social factors pertain to a company’s relationship with

its employees and vendors. Risks and opportunities can

include (but are not limited to) a company’s initiatives on

employee health and well-being, and how supplier

relationships align with corporate values.

· Corporate governance factors can include the

corporate decision-making structure, independence of

board members, the treatment of minority

shareholders, executive compensation and political

contributions, among others.

Many of the companies in which the Company invests are

founder-run. The Investment Manager believes that

investing alongside talented, hard-working and ambitious

founders provides a powerful opportunity for long-term

performance. However, the Investment Manager is also

aware that smaller, founder-led companies tend to have

ESG disclosures that are sometimes less sophisticated

than their larger peers, and so can perform less well than

their large cap peers when it comes to third-party ESG

ratings. Such companies often don’t have experience with

disclosure requirements, or the resources necessary, to

disclose everything that is increasingly expected of them.

This is particularly true in Asia.

Furthermore, many of these third party ratings agencies

tend to score founder-led companies poorly, concerned

about the influence of a single person. Whilst this can

indeed be a risk, the Investment Manager is of the view

that backing a talented, hard-working and ambitious

founder, whilst also ensuring that a strong and

experienced board is in place to provide checks and

balances, is the right course of action. So whilst many see

this founder-led structure as a risk, the Investment

Manager sees an opportunity. Of course, the focus for the

Investment Manager is on choosing the

right

individual,

who will grow the undertaking equitably and sustainably,

and who will treat all shareholders fairly.

Responsible Investment and En

ement

Continued

abrdn Asia Focus plc 107

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When it comes to small-cap investing, much of the box-

ticking approach to ESG undertaken in the public realm is

neither accurate nor helpful when forming a view of the

relative merits of an investment. It is for this reason that the

Investment Manager focusses on an active investment

approach, coupled with deep due diligence and on-the-

ground research. Once invested, the Investment Manager

plays a role in engaging with management to improve

disclosure and support positive change

Importance of Engagement

Engagement is an important part of our investment

process: the Investment Manager sees engagement not

only as a right but as an obligation of investors, as owners

of companies. The Investment Manager engages actively

and regularly with companies in which the Company

invests or may become an investor, and believes that

informed and constructive engagement helps to foster

better companies, enhancing the value of the Company’s

investments.

Active engagement involves regular, candid

communication with management teams (or boards of

directors) of portfolio companies to discuss a broad range

of issues that are material to sustainable long-term

returns, either positively or negatively, including both risks

and opportunities. The Investment Manager’s focus is on

the factors which it believes to have the greatest potential

to enhance or undermine the investment case.

Sometimes the Investment Manager is seeking more

information, exchanging views on specific issues, and

encouraging better disclosure; and at other times,

encouraging change (including either corporate strategy,

capital allocation, or climate change strategy).

Engagements cover a range of issues, including but not

limited to board composition, remuneration, audit, climate

change, labour issues, human rights, bribery and

corruption.

Engagement is not limited to a company’s management

team. It can include many other stakeholders such as

non-government agencies, industry and regulatory

bodies, as well as activists and the company’s customers

and clients. During the period under review the breadth of

issues covered in ESG specific company engagements for

the Company covered Climate Change (including air

quality and energy management), Environment (including

waste and waste management, and supply chain

management), Labour Management (including health

and safety), Human Risk & Stakeholders, Corporate

Behaviour (including Practices and Processes) and

Corporate Governance.

Engagement Activity

The Investment Manager regularly engages with

companies in which the Company invests. The below

shows the engagements that have included responsible

investment themes. This does not include positions the

Investment Manager has sold out of or is considering

investing in. Below are the themes engaged on during

the year.

ESG Category

Climate

Environment

Labour Management, Diversity & Inclusion

Human Rights & Stakeholders

Corporate Behaviour

Corporate Governance

ESG Category % *

Climate 9

Environment 4

Labour Management, Diversity & Inclusion 18

Human Rights & Stakeholders 6

Corporate Behaviour 8

Corporate Governance 23

* a single meeting can have multiple topics

108 abrdn Asia Focus plc

Voting Activity

The Investment Manager draws on expertise across desks

and throughout the firm to vote consistently in line with the

abrdn Group voting policy. Time period referenced is 12

months to 31 August 2024:

Our Voting Activity

Voting Summary Total

How many meetings did you vote at? 86

How many resolutions did you vote on for which you

were eligible?

593

Of the resolutions on which you voted, how many

did you vote with management?

538

Of the resolutions on which you voted, how many

did you vote against management?

Of the resolutions on which you voted, how many

did you abstain from voting?

While abrdn Group will typically vote in line with an

investee board’s voting recommendation, it will vote

against resolutions that are not consistent with the

Company’s best interests. For example, abrdn Group may

vote against resolutions which are not aligned with its

policies or which conflict with local governance guidelines,

such as the Investment Association in the UK. Although the

Investment Manager seeks to vote either ‘in favour’ or

‘against’ a resolution, it does make use of an abstain vote

where this is considered appropriate. The Investment

Manager aims to vote at all eligible meetings unless share

blocking (which can be a feature of voting in non-UK

jurisdictions) makes this unviable

Responsible Investment and En

ement

Continued

abrdn Asia Focus plc 109

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Keeping You Informed

For internet users, detailed data on the Company,

including price, performance information and a monthly

fact sheet is available from the Company’s website

(asia-focus.co.uk) and the TrustNet website

(trustnet.com).

You can also register for regular email updates by visiting

asia-focus.co.uk or by activating the QR Code below using

the camera on your smart phone:

abrdn Group Social Media Accounts

@abrdn Investment Trusts

@abrdnTrusts

Investor Warning

The Board has been made aware by abrdn Group that

some investors have received telephone calls from people

purporting to work for the Manager, or third parties, who

have offered to buy their investment trust shares. These

may be scams which attempt to gain personal

information with which to commit identity fraud or could

be ‘boiler room’ scams where a payment from an investor

is required to release the supposed payment for their

shares. These callers do not work for abrdn Group and

any third party making such offers has no link with abrdn

Group. abrdn Group never makes these types of offers

and does not ‘cold-call’ investors in this way. If investors

have any doubt over the veracity of a caller, they should

not offer any personal information and end the call.

Shareholder Enquiries

In the event of queries regarding their holdings of shares,

lost certificates dividend payments, registered details, etc

shareholders holding their shares in the Company directly

should contact the registrars, Equiniti Limited, Aspect

House, Spencer Road, Lancing West Sussex BN99 6DA Tel:

0371 384 2416 Lines open 8:30am to 5:30pm (UK time),

Monday to Friday, (excluding public holidays in England

and Wales). Calls may be recorded and monitored

randomly for security and training purposes. Changes of

address must be notified to the registrars in writing.

Any general enquiries about the Company should be

directed to the Company Secretary, abrdn Asia Focus plc,

1 George Street, Edinburgh EH2 2LL or by email

CEF.CoSec@abrdn.com.

Suitable for Retail/NMPI Status

The Company’s securities are intended for investors

primarily in the UK (including retail investors), professional-

advised private clients and institutional investors who are

wanting to benefit from the growth prospects of Asian

smaller companies by investment in a relatively risk averse

investment trust and who understand and are willing to

accept the risks of exposure to equities. Investors should

consider consulting a financial adviser who specialises in

advising on the acquisition of shares and other securities

before acquiring shares. Investors should be capable of

evaluating the risks and merits of such an investment and

should have sufficient resources to bear any loss that

may result.

The Company currently conducts its affairs so that its

securities can be recommended by a financial adviser to

ordinary retail investors in accordance with the Financial

Conduct Authority’s (FCA) rules in relation to non-

mainstream pooled investments (NMPIs) and intends to

continue to do so for the foreseeable future. The

Company’s shares are excluded from the FCA’s

restrictions which apply to non-mainstream investment

products because they are shares in an investment trust.

Key Information Document (“KID”)

The KID relating to the Company and published by the

Manager can be found in the ‘Literature Library’ section of

the Company’s website: asia-focus.co.uk.

Investor Information

110 abrdn Asia Focus plc

How to invest in abrdn Asia Focus plc and

other abrdn managed investment trusts

A range of leading investment platforms and share

dealing services let you buy and sell abrdn-managed

investment trusts including abrdn Asia Focus plc.

Many of these platforms operate on an ‘execution-only’

basis. This means they can carry out your instruction to

buy or sell a particular investment trust. But they may not

be able to advise on suitable investments for you. If you

require advice, please speak to a qualified financial

adviser (see below).

A note about the abrdn Investment Trust Savings Plans

(the ‘Plans’)

The abrdn Investment Trusts ISA, Share Plan and

Investment Plan for Children (the “Plans”) closed in

December 2023. All investors with a holding or cash

balance in the Plans at that date transferred to interactive

investor (“ii”), an abrdn Group company. ii communicated

with Plan holders in late November 2023 to set up account

security to ensure that investors would continue to access

their holdings via ii following the closure of the Plans.

Former abrdn Plan holders should contact ii for any

ongoing support with their ii accounts on 0345 646 1366, or

+44 113 346 2309 if calling from outside the UK. Lines are

open 8.00am to 5.00pm Monday to Friday.

Alternatively, Plan holders can access the website at

ii.co.uk/abrdn-welcome.

Platform providers

Platforms featuring abrdn Group managed investment

trusts include:

www.ii.co.uk/investment-trusts

www.ajbell.co.uk/markets/

investment-trusts

www.barclays.co.uk/smart-invest

www.bestinvest.co.uk

www.charles-stanley-direct.co.uk

www.fidelity.co.uk

www.halifax.co.uk/investing

www.hl.co.uk/shares/investment-

trusts

www.wealthtime.com/advisers/

www.transact-online.co.uk

www.abrdn.com/adviser/wrap

The companies above are shown for illustrative purposes

only. Other platform providers are available. The links

above direct you to external websites operated by each

platform provider. abrdn Group is not responsible for the

content and information on these third-party sites.

Flexibility

Many investment platform providers will allow you to buy

and hold abrdn Investment Trust shares within an

Individual Savings Account (ISA), Junior ISA or Self Invested

Personal Pension (SIPP), all of which have potential tax

advantages. Most will also allow you to invest on both a

lump sum and regular savings basis.

Investor Information

Continued

abrdn Asia Focus plc 111

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

Costs and service

It is important to choose the right platform for your needs,

so take time to research what each platform offers before

you make your decision, as well as considering charges.

When it comes to charges, some platforms have flat fee

structures while others levy percentage-based charges.

Typically, you will also pay a fee every time you buy and

sell shares, so you need to bear in mind these transaction

costs if you are trading frequently. There may also be

additional charges for ISA and SIPP investments.

Can I exercise my voting rights if I hold my shares through an

investment platform?

Yes, you should be able to exercise your right to vote by

contacting your platform provider. Procedures differ, but

some platforms will automatically alert you when new

statutory documents are available and then allow you

to vote online. Others will require you to contact them to

vote. Your chosen platform provider will provide further

guidance. The Association of Investment Companies has

provided information on how to vote investment company

shares held on some of the major platforms. This

information can be found at:

www.theaic.co.uk/how-to-vote-your-shares.

Discretionary Private Client Stockbrokers

If you have a large sum to invest, you may wish to contact

a discretionary private client stockbroker. They can

manage your entire portfolio of shares and will advise you

on your investments. To find a private client stockbroker

visit The Personal Investment Management and Financial

Advice Association at pimfa.co.uk.

Independent Financial Advisers

To find an adviser who recommends on investment trusts,

visit unbiased.co.uk.

Regulation of Stockbrokers

Before approaching a stockbroker, always check that

they are regulated by the Financial Conduct Authority:

Tel: 0800 111 6768 or at https://register.fca.org.uk/ or

email: register@fca.org.uk

Getting advice

abrdn Group recommends that you seek financial advice

prior to making an investment decision. If you do not

currently have a financial adviser, details of authorised

financial advisers in your area can be found atpimfa.co.uk

or unbiased.co.uk. You will pay a fee for advisory services.

Note

Please remember that past performance is not a guide to

the future. Stock market and currency movements may

cause the value of shares and the income from them to

fall as well as rise and investors may not get back the

amount they originally invested. As with all equity

investments, the value of investment trusts purchased will

immediately be reduced by the difference between the

buying and selling prices of the shares, the market maker’s

spread. Investors should further bear in mind that the

value of any tax relief will depend on the individual

circumstances of the investor and that tax rates and

reliefs, as well as the tax treatment of ISAs may be

changed by future legislation.

The information above has been Issued by abrdn

Investments Limited, which is authorised and regulated by

the Financial Conduct Authority in the United Kingdom.

abrdn Investments Limited is entered on the Financial

Services Register under registration number 121891

112 abrdn Asia Focus plc

abrdn Group and the Company are required to make certain disclosures available to investors in accordance with the

Alternative Investment Fund Managers Directive ('AIFMD'). Those disclosures that are required to be made pre-

investment are included within a pre-investment disclosure document ('PIDD') which can be found on the Company’s

website asia-focus.co.uk. There have been no material changes to the disclosures contained within the PIDD since

November 2023.

The periodic disclosures as required under the AIFMD to investors are made below:

· Information on the investment strategy, geographic and sector investment focus and principal stock exposures are

included in the Strategic Report.

· None of the Company’s assets are subject to special arrangements arising from their illiquid nature.

· The Strategic Report, note 19 to the Financial Statements and the PIDD together set out the risk profile and risk

management systems in place. There have been no changes to the risk management systems in place in the period

under review and no breaches of any of the risk limits set, with no breach expected.

· There are no new arrangements for managing the liquidity of the Company or any material changes to the liquidity

management systems and procedures employed by aFML.

· All authorised Alternative Investment Fund Managers are required to comply with the AIFMD Remuneration Code. In

accordance with the Remuneration Code, the Company’s AIFM remuneration policy is available from the Company

Secretaries, abrdn Holdings Limited on request (see contact details on page 121) and the numerical remuneration in

the disclosures in respect of the AIFM’s reporting period for the year ended 31 December 2023 are available on the

Company’s website.

Leverage

The table below sets out the current maximum permitted limit and actual level of leverage for the Company:

Gross method Commitment method

Maximum level of leverage 2.50:1 2.00:1

Actual level at 31 July 2024 1.22:1 1.25:1

There have been no breaches of the maximum level during the period and no changes to the maximum level of

leverage employed by the Company. There is no right of re-use of collateral or any guarantees granted under the

leveraging arrangement. Changes to the information contained either within this Annual Report or the PIDD in relation to

any special arrangements in place, the maximum level of leverage which aFML may employ on behalf of the Company;

the right of use of collateral or any guarantee granted under any leveraging arrangement; or any change to the position

in relation to any discharge of liability by the Depositary will be notified via a regulatory news service without undue delay

in accordance with the AIFMD.

The information above has been Issued by abrdn Investments Limited, which is authorised and regulated by the

Financial Conduct Authority in the United Kingdom. abrdn Investments Limited is entered on the Financial Services

Alternative Investment Fund Managers Directive

Disclosures

(

Unaudited

)

abrdn Asia Focus plc 113

General

The AGM will be held at 11:00 a.m. on 6 December 2024 in

London at which the usual formal business will be proposed.

114 abrdn Asia Focus plc

Notice is hereby given that the twenty-ninth Annual General Meeting of abrdn Asia Focus plc will be held at 18 Bishops

Square, London, E1 6EG, at 11:00 a.m. on 6 December 2024 for the following purposes:

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

Resolutions and Resolutions 12 to 14 as Special Resolutions:

Ordinary Business

1. To receive and adopt the Directors’ Report and financial statements for the year ended 31 July 2024, together with

the auditors’ report thereon.

2. To approve the Directors’ Remuneration Report for the year ended 31 July 2024 (other than the Directors’

Remuneration Policy).

3. To approve the Company’s Dividend Policy to pay four interim dividends per year.

4. To re-elect Ms C Black as a Director.

5. To re-elect Mr K Shanmuganathan as a Director.

6. To re-elect Mr L Cooper as a Director.

7. To re-elect Mr A Finn as a Director.

8. To elect Ms L Macdonald as a Director.

9. To elect Ms D Curling as a Director.

10. To re-appoint PricewaterhouseCoopers LLP as auditors and to authorise the Directors to determine their

remuneration.

Special Business

11. THAT in substitution for all existing powers the Directors of the Company be generally and unconditionally

authorised for the purposes of Section 551 of the Companies Act 2006 (the “Act”), to allot shares in the Company,

and to grant rights (“Relevant Rights”) to subscribe for, or to convert any security into, shares in the Company:

(a) up to an aggregate nominal amount of £2,554,986; and

(b) up to a further aggregate nominal amount of £2,554,986 in connection with an offer made by means of a

negotiable document to (a) all holders of Ordinary shares of 5p each in the capital of the Company (“Ordinary

shares”) in proportion (as nearly as may be) to the respective numbers of such Ordinary shares held by them and

(b) to holders of other equity securities required by the rights of those securities (but subject to such exclusions, limits

or restrictions or other arrangements as the Directors of the Company may consider necessary or appropriate to

deal with treasury shares, fractional entitlements, record dates or legal, regulatory or practical problems in or under

the laws of any territory, or the requirements of any regulatory body or any stock exchange in any territory or

otherwise howsoever); such authorisation to expire at the conclusion of the next Annual General Meeting of the

Company to be held in 2025 unless previously renewed, revoked or varied by the Company in general meeting, save

that the Company may at any time before the expiry of this authorisation make an offer or enter into an agreement

which would or might require shares to be allotted or relevant rights to be granted after the expiry of this

authorisation and the Directors of the Company may allot shares or grant relevant rights in pursuance of any such

offer or agreement as if the authorisation conferred hereby had not expired.

12. THAT subject to the passing of Resolution 11 above and in substitution for all existing powers the Directors be

empowered pursuant to Sections 570 and 573 of the Companies Act 2006 (the “Act”) to allot equity securities

(within the meaning of Section 560 (1), (2) and (3) of the Act) either pursuant to the authorisation under Section 551

of the Act as conferred by Resolution 11 above or by way of a sale of treasury shares, in each case for cash as if

Section 561(1) of the Act did not apply to such allotment, provided that this power shall be limited to:

Notice of Annual General Meetin

abrdn Asia Focus plc 115

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

i. The allotment of equity securities (otherwise than pursuant to sub-paragraph (b) below) up to an aggregate

nominal amount of £766,496 which are, or are to be, wholly paid up in cash, at a price representing a premium to

the net asset value per share at allotment, as determined by the Directors, and do not exceed up to 10% of the

issued share capital (as at the date of the Annual General Meeting convened by this notice); and

ii. the allotment of equity securities in connection with an offer to (a) all holders of Ordinary shares of 5p each in

the capital of the Company in proportion (as nearly as may be) to the respective numbers of Ordinary shares

held by them and (b) to holders of other equity securities as required by the rights of those securities (but

subject in either case to such exclusions limits or restrictions or other arrangements as the Directors may

consider necessary or appropriate to deal with treasury shares, fractional entitlements, record dates, legal,

regulatory or practical problems in or under the laws of, or requirements of, any regulatory body or any stock

exchange in any territory or otherwise howsoever) at a price representing a premium to the net asset value per

share at allotment, as determined by the Directors; and

such power shall expire at the conclusion of the next Annual General Meeting of the Company to be held in 2025,

but so that this power shall enable the Company to make offers or agreements before such expiry which would or

might require equity securities to be allotted after such expiry and the Directors may do so as if such expiry had

not occurred.

13. THAT, the Company be generally and unconditionally authorised in accordance with Section 701 of the Companies

Act 2006 (the “Act”) to make market purchases (within the meaning of Section 693(4) of the Act) of Ordinary shares

of 5p each in the capital of the Company (“Ordinary shares”), and to cancel or hold in treasury such shares

provided that:

i. the maximum number of Ordinary shares hereby authorised to be purchased is 14.99% of the Ordinary shares

in issue as at the date of the passing of this Resolution 13;

ii. the minimum price which may be paid for an Ordinary share is 5p;

iii. the maximum price (exclusive of expenses) which may be paid for an Ordinary share shall not be more than the

higher of (i) an amount equal to 5% above the average of the middle market quotations for an Ordinary share

taken from the London Stock Exchange Daily Official List for the five business days immediately preceding the

date on which the Ordinary share is contracted to be purchased; and (ii) the higher of the price of the last

independent trade and the current highest independent bid on the trading venue where the purchase is

carried out;

iv. any purchase of shares will be made in the market for cash at prices below the prevailing net asset value per

share (as determined by the Directors);

v. the authority hereby conferred shall expire at the conclusion of the Annual General Meeting of the Company to

be held in 2025 unless such authority is renewed, revoked or varied prior to such time by the Company in

general meeting; and

vi. the Company may make a contract to purchase Ordinary shares under the authority hereby conferred prior to

the expiry of such authority which will or may be executed wholly or partly after the expiration of such authority

and may make a purchase of Ordinary shares pursuant to any such contract.

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

By order of the Board

abrdn Holdings Limited

Company Secretary

23 October 2024

Registered Office

280 Bishopsgate, London EC2M 4AG

116 abrdn Asia Focus plc

Notes

i. In accordance with Section 311A of the Companies Act 2006, the contents of this Notice of Meeting, details of the total number of

shares in respect of which members are entitled to exercise voting rights at the AGM and, if applicable, any members’ statements,

members’ resolutions or members’ matters of business received by the Company after the date of this notice will be available on

the Company’s website

asia-focus.co.uk.

ii. As a member, you are entitled to appoint a proxy or proxies to exercise all or any of your rights to attend, speak and vote at the

Meeting. A proxy need not be a member of the Company. You may appoint more than one proxy provided each proxy is

appointed to exercise rights attached to different shares. You may not appoint more than one proxy to exercise the rights

attached to any one share. A form of proxy is enclosed.

iii. To be valid, any form of proxy or other instrument of proxy and any power of attorney or other authority, if any, under which they

are signed or a notarially certified copy of that power of attorney or authority should be sent to the Company’s registrars so as to

arrive not less than 48 hours before the time fixed for the meeting. The return of a completed form of proxy or other instrument of

proxy will not prevent you attending the Meeting and voting in person if you wish to do so.

iv. The right to vote at the meeting is determined by reference to the Company’s Register of Members as at 6.30 p.m. on 4 December

2024 or, if this meeting is adjourned, at 6.30 p.m. on the day two business days prior to the adjourned meeting. Changes to the

entries on that Register after that time shall be disregarded in determining the rights of any member to attend and vote at the

meeting.

v. As a member you have the right to put questions at the meeting relating to the business being dealt with at the meeting.

vi. CREST members who wish to appoint a proxy or proxies by utilising the CREST electronic proxy appointment service may do so for

the Meeting and any adjournment(s) thereof by utilising the procedures described in the CREST Manual. CREST Personal Members

or other CREST sponsored members, and those CREST members who have appointed a voting service provider(s), should refer to

their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.

vii. In order for a proxy appointment made by means of CREST to be valid, the appropriate CREST message (a “CREST Proxy

Instruction”) must be properly authenticated in accordance with Euroclear UK & Ireland Limited’s (“EUI”) specifications and must

contain the information required for such instructions, as described in the CREST Manual which can be viewed at euroclear.com.

The message must be transmitted so as to be received by the issuer’s agent (ID RA19) by the latest time(s) for receipt of proxy

appointments specified in the notice of Meeting. For this purpose, the time of receipt will be taken to be the time (as determined by

the timestamp applied to the message by the CREST Applications Host) from which the issuer’s agent is able to retrieve the

message by enquiry to CREST in the manner prescribed by CREST.

viii. CREST members and, where applicable, their CREST sponsors or voting service providers should note that EUI does not make

available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in

relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST

member is a CREST personal member or sponsored member or has appointed a voting service provider(s), to procure that his

CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by

means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST

sponsors or voting service providers are referred, in particular, to those sections of the CREST Manual concerning practical

limitations of the CREST system and timings.

ix. You may also submit your proxy votes via the internet. It is possible for you to submit your proxy votes online by going to Equiniti's

Shareview website, www.shareview.co.uk, and logging in to your Shareview Portfolio. Once you have logged in, simply click 'View'

on the 'My Investments' page and then click on the link to vote and follow the on-screen instructions. If you have not yet registered

for a Shareview Portfolio, go to www.shareview.co.uk and enter the requested information. It is important that you register for a

Shareview Portfolio with enough time to complete the registration and authentication processes.

x. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the

Uncertificated Securities Regulations 2001.

Notice of Annual General Meetin

Continued

abrdn Asia Focus plc 117

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

xi. Any person to whom this notice is sent who is a person nominated under Section 146 of the Companies Act 2006 to enjoy

information rights (a “Nominated Person”) may, under an agreement between them and the member by whom they were

nominated, have a right to be appointed (or to have someone else appointed) as a proxy for the Meeting. If a Nominated Person

has no such proxy appointment right or does not wish to exercise it, they may, under any such agreement, have a right to give

instructions to the member as to the exercise of voting rights. Any person holding 3% of the total voting rights in the Company who

appoints a person other than the Chair as his or her proxy(ies) will need to ensure that both he or she and such proxy(ies) comply

with their respective disclosure obligations under the UK Disclosure and Transparency Rules.

xii. The statement of the rights of members in relation to the appointment of proxies in paragraphs (ii) and (iii) above does not apply to

Nominated Persons. The rights described in these paragraphs can only be exercised by members of the Company.

xiii. As at close of business on 23 October 2024 (being the latest practicable date prior to publication of this document), the Company’s

issued share capital comprised 151,254,218 Ordinary shares of 5 pence each and there were a further 57,467,090 shares held in

treasury. Each Ordinary share carries the right to one vote at a general meeting of the Company and therefore the total number

of voting rights in the Company as at close of business on 23 October 2024 is 151,254,218. Treasury shares represent 27.5% of the

total issued Ordinary share capital (inclusive of treasury shares).

xiv. No Director has a service contract with the Company, however, copies of Directors’ letters of appointment will be available for

inspection for at least 15 minutes prior to the meeting and during the meeting.

xv. Under Section 338 of the Companies Act 2006, members may require the Company to give, to members of the Company entitled

to receive this Notice of Meeting, notice of a resolution which may properly be moved and is intended to be moved at the Meeting.

Under Section 338A of that Act, members may request the Company to include in the business to be dealt with at the Meeting any

matter (other than a proposed resolution) which may be properly included in the business.

xvi. Members should note that it is possible that, pursuant to requests made by the members of the Company under Section 527 of the

Companies Act 2006, the Company may be required to publish on a website a statement setting out any matter relating to: (i) the

audit of the Company’s Annual Report and financial statements (including the auditors' report and the conduct of the audit) that

are to be laid out before the Meeting; or (ii) any circumstances connected with an auditor of the Company ceasing to hold office

since the previous meeting at which the Annual Report and financial statements was laid in accordance with Section 437 of the

Companies Act 2006. The Company may not require the members requesting any such website publication to pay its expenses in

complying with Sections 527 or 528 of the Companies Act 2006. Where the Company is required to place a statement on a

website under Section 527 of the Companies Act 2006, it must forward the statement to the Company’s auditors not later than the

time when it makes the statement available on the website. The business which may be dealt with at the Meeting includes any

statement that the Company has been required under Section 527 of the Companies Act 2006 to publish on the website.

xvii. Pursuant to Section 319A of the Companies Act 2006, the Company must cause to be answered at the AGM any question relating

to the business being dealt with at the AGM which is put by a member attending the meeting, except in certain circumstances,

including if it is undesirable in the interests of the Company or the good order of the meeting that the question be answered or if to

do so would involve the disclosure of confidential information.

xviii. You may not use any electronic address provided either in this Notice of Meeting or any related documents (including the Form o

Proxy) to communicate with the Company for any purposes other than those expressly stated.

118 abrdn Asia Focus plc

abrdn Asia or the Investment Manager

abrdn Asia Limited is a wholly owned subsidiary of abrdn

plc and acts as the Company’s investment manager

abrdn plc

abrdn plc was formed by the merger of Aberdeen

Asset Management PLC and Standard Life plc on

14 August 2017

abrdn Group

the abrdn group of companies

Active Share

Active Share is a measure of the percentage of stock

holdings in the portfolio that differs from the benchmark

index

aFML or Manager

abrdn Fund Managers Limited

AIC

Association of Investment Companies

AIFM

the alternative investment fund manager, being aFML

AIFMD

The Alternative Investment Fund Managers Directive

Asset Cover

The value of a company’s net assets available to repay a

certain security. Asset cover is usually expressed as a

multiple and calculated by dividing the net assets

available by the amount required to repay the

specific security

CULS 2025

The £36.6 million nominal of 2.25% Convertible Unsecured

Loan Stock 2025 issued on 29 May 2018

CULS Conversion Date

The CULS is convertible at any time during the periods of

28 days ending on 30 November and 31 May in each year

from November 2018 to May 2025 (each such period and

any other period during which Conversion Rights may be

exercised being a “Conversion Period”) conversions

requests are to be received by 5.00 p.m. on the last day of

the relevant Conversion Period (each such last day being

a “Conversion Date” and the Conversion Date falling on 31

May 2025 or Final Repayment Date being the “Final

Conversion Date”)

CULS Conversion Price

The CULS is convertible semi-annually on the Conversion

Date on the basis of 293.0p nominal of CULS for one

Ordinary share of 5p (prior to the five for one share split on

4 February 2022 the conversion was based upon 1465.0p

of nominal). The Conversion Price was originally

calculated based upon a 20% premium to the unaudited

NAV per Ordinary share of 25p (including income) on 18

May 2018, rounded down to the nearest 5.0p

Dilution

Dilution is the potential impact of the conversion of CULS to

Ordinary shares on the net asset value and share price of

the Company

Discount

The amount by which the market price per share of an

investment trust is lower than the net asset value

per share.

The discount is normally expressed as a percentage of the

NAV per share

Dividend Cover

Earnings per share divided by dividends per share

expressed as a ratio

Dividend Yield

The annual dividend expressed as a percentage of the

share price

FRC

Financial Reporting Council

Glossary of Terms and Definitions

abrdn Asia Focus plc 119

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

Leverage

For the purposes of the Alternative Investment Fund

Managers (AIFM) Directive, leverage is any method which

increases the Company’s exposure, including the

borrowing of cash and the use of derivatives. It is

expressed as a ratio between the Company’s exposure

and its net asset value and can be calculated on a gross

and a commitment method. Under the gross method,

exposure represents the sum of the Company’s positions

after the deduction of sterling cash balances, without

taking into account any hedging and netting

arrangements. Under the commitment method, exposure

is calculated without the deduction of sterling cash

balances and after certain hedging and netting positions

are offset against each other

Net Asset Value or NAV

The value of total assets less liabilities. Liabilities for this

purpose include current and long-term liabilities. The net

asset value divided by the number of shares in issue

produces the net asset value per share

Net Gearing

Net gearing is calculated by dividing total assets (as

defined below) less cash or cash equivalents by

shareholders’ funds expressed as a percentage

Ongoing Charges

Ratio of expenses as percentage of average daily

shareholders’ funds calculated as per the industry

standard

PIDD

The pre-investment disclosure document made available

by the AIFM in relation to the Company

Premium

The amount by which the market price per share of an

investment trust exceeds the net asset value per share.

The premium is normally expressed as a percentage of

the net asset value per share

Prior Charges

The name given to all borrowings including CULS, long and

short term loans and overdrafts that are to be used for

investment purposes, reciprocal foreign currency loans,

currency facilities to the extent that they are drawn down,

index-linked securities, and all types of preference or

preferred capital and the income shares of split capital

trusts, irrespective of the time until repayment

Total Assets

Total assets less current liabilities (before deducting prior

charges as defined above)

Total Return

Total return involves reinvesting the net dividend in the

month that the share price goes ex-dividend. The NAV

total return (including diluted) involves investing the same

net dividend in the NAV of the trust on the date to which

that dividend was earned

120 abrdn Asia Focus plc

Issued Share Capital at 31 July 2024

153,626,718

Ordinary shares of 5p (excluding treasury shares)

55,094,590

Ordinary shares held in treasury

Capital History

19 October 1995

35,000,000 Ordinary shares of 25p each placed at 100p with

7,000,000 Warrants attaching, each conferring the right to

subscribe for one Ordinary share of 25p at 100p

Year ended 31 July 2011

3,823,595 shares issued following the final exercise of Warrants

18 May 2012

£35 million nominal of Convertible Unsecured Loan Stock 2019

(“CULS”) issued at 100p per unit

Year ended 31 July 2013

23,372 new shares issued following the conversion of 194,182

units of CULS in December 2012 and 182,787 new Ordinary

shares issued following the conversion of 1,517,404 units of CULS

in May 2013

Year ended 31 July 2013

2,605,000 shares issued for cash and sold from treasury at a

premium to NAV

Year ended 31 July 2014

300,000 shares issued for cash at a premium to NAV; 23,228 new

Ordinary shares issued following the conversion of 192,896 units

of CULS in December 2013; and, 2,210 new Ordinary shares

issued following the conversion of 18,397 units of CULS in

May 2014

Year ended 31 July 2015

142,000 shares purchased for treasury at a discount to NAV; 3,510

new Ordinary shares issued following conversion of 29,188 units

of CULS in December 2014; 573 new Ordinary shares issued

following conversion of 4,790 units of CULS in June 2015

Year ended 31 July 2016

2,059,834 shares purchased for treasury at a discount to NAV; 137

new Ordinary shares issued following conversion of 1,137 units of

CULS in December 2015; 141 new Ordinary shares issued

following conversion of 1,176 units of CULS in June 2016

Year ended 31 July 2017

1,091,750 shares purchased for treasury at a discount to NAV;

2,595 new Ordinary shares issued following conversion of 21,594

units of CULS in December 2016; 3,546 new Ordinary shares

issued following conversion of 29,473 units of CULS in June 2017

Year ended 31 July 2018

2,137,138 shares purchased for treasury at a discount to NAV;

323,835 new Ordinary shares issued following conversion of

2,687,937 units of CULS in December 2017. £37 million nominal of

2.25% Convertible Unsecured Loan Stock 2025 issued at 100p per

unit and 2019 CULS redeemed and/or converted into Ordinary

shares on 29 May 2018

Year ended 31 July 2019

1,302,650 shares purchased for treasury at a discount to NAV;

2,348 new Ordinary shares issued following conversion of 34,482

units of CULS in December 2018; 1,379 new Ordinary shares

issued following conversion of 20,286 units of CULS in June 2019.

Year ended 31 July 2020

1,484,256 shares purchased for treasury at a discount to NAV;

16,302 new Ordinary shares issued following conversion of

238,951 units of CULS in December 2019; 814 new Ordinary

shares issued following conversion of 12,050 units of CULS in

June 2020.

Year ended 31 July 2021

1,055,000 shares purchased for treasury at a discount to NAV;

1,110 new Ordinary shares issued following conversion of 16,359

units of CULS in December 2020; 1,365 new Ordinary shares

issued following conversion of 20,117 units of CULS in June 2021.

Year ended 31 July 2022

935 new shares issued following conversion of 13,764 units of

CULS in December 2021; on 4 February 2022 a five for one Share

Split was implemented and the CUL; 536 new Ordinary shares

issued following conversion of 1,579 units of CULS in June 2022

Year ended 31 July 2023

500,000 shares purchased for treasury at a discount to NAV; 2,158

new Ordinary shares issued following conversion of 6,334 units of

CULS in December 2022; 2,189 new Ordinary shares issued

following conversion of 6,419 units of CULS in June 2023

Year ended 31 July 2024

2.85m shares purchased for treasury at a discount to NAV; 8,191

new Ordinary shares issued following conversion of 24,012 units

of CULS in December 2023; 10,549 new Ordinary shares issued

following conversion of 30,927 units of CULS in June 2024

Your Company’s Share Capital History

abrdn Asia Focus plc 121

Directors

Krishna Shanmuganathan, Chair

Charlotte Black

Lindsay Cooper

Alex Finn

Lucy Macdonald

Davina Curling

Registered in England as an

Investment Company

Registration Number 03106339

Manager

abrdn Asia Limited

7 Straits View

# 23-04. Marina One East Tower

Singapore 018936

Alternative Investment Fund Manager*

abrdn Fund Managers Limited

280 Bishopsgate

London EC2M 4AG

(

Authorised and regulated by the Financial

Conduct Authority

)

(* appointed as required by EU Directive 2011/61/EU)

Secretaries and Registered Office

abrdn Holdings Limited

280 Bishopsgate

London EC2M 4AG

Registrars

Equiniti

Aspect House

Spencer Road

Lancing

West Sussex BN99 6DA

Telephone enquiries +44 (0) 371 384 2416

Lines open 8.30 a.m. to 5.30 p.m., Monday to Friday

(excluding public holidays in England & Wales)

shareview.co.uk

Stockbrokers

Panmure Liberum

Ropemaker Place, Level 12

25 Ropemaker Street

London EC2Y 9LY

Solicitors

Dentons UK and Middle East LLP

Quartermile One

15 Lauriston Place

Edinburgh EH3 9EP

Independent Auditor

PricewaterhouseCoopers LLP

Atria One

144 Morrison Street

Edinburgh EH3 8EX

CULS Trustee

The Law Debenture Corporation p.l.c.

Fifth Floor

100 Wood Street

London EC2V 7EX

Depositary

BNP Paribas SA London Branch (

formerly BNP Paribas

Trust Corporation UK Limited, until 31 May 2024

)

10 Harewood Avenue

London NW1 6AA

Website

asia-focus.co.uk

asia.focus@abrdn.com

Foreign Account Tax Compliance Act

(“FATCA”) IRS Registration Number (“GIIN”):

5ITCFT.99999.SL.826

Legal Entity Identifier

5493000FBZP1J92OQY70

Corporate Information

asia-focus.co.uk

abrdn Asia Focus plc

A fundamental, high conviction portfolio of well-researched Asian small caps

Annual Report 31 July 2024

For more information visit asia-focus.co.uk

abrdn.com

The Company

The Company is an investment trust and its Ordinary shares and Convertible Unsecured Loan Stock (“CULS”) are

admitted to trading on the main market of London Stock Exchange plc. The Company aims to attract long-term private

and institutional investors wanting to benefit from the growth prospects of Asia’s smaller companies.

Investment Objective

The Company aims to maximise total return to shareholders over the long term from a portfolio made up predominantly

of quoted smaller companies in the economies of Asia excluding Japan. (On 27 January 2022 shareholders approved an

amended investment objective.)

Five-Year Performance Linked Tender

On 27 January 2022 shareholders approved the introduction of a performance-linked tender offer, which provides that,

in the event of underperformance of the NAV per Share versus the MSCI AC Asia ex Japan Small Cap Index over a five-

year period commencing 1 August 2021, Shareholders will be offered the opportunity to realise a proportion of their

holding for cash at a level close to NAV less costs of the tender offer. The tender offer would be capped at a maximum of

25% of the issued share capital of the Company at that time.

Comparative Index

From 1 August 2021 the Manager has utilised the MSCI AC Asia ex Japan Small Cap Index (currency adjusted) as well as

peer group comparisons for Board reporting. For periods prior to 1 August 2021, a composite index is used comprising

the MSCI AC Asia Pacific ex Japan Small Cap Index (currency adjusted) up to 31 July 2021 and the MSCI AC Asia ex

Japan Small Cap Index (currency adjusted) thereafter. It is likely that performance will diverge, possibly quite

dramatically in either direction, from the comparative index. The Manager seeks to minimise risk by using in-depth

research and does not see divergence from an index as risk.

Investment Manager and Alternate Investment Fund Manager

The Company’s Alternative Investment Fund Manager, appointed as required by EU Directive 2011/61/EU, is abrdn Fund

Managers Limited (“aFML”) which is authorised and regulated by the Financial Conduct Authority. Day to day

management of the portfolio is delegated to abrdn Asia Limited (“abrdn Asia”, the “Manager” or the “Investment

Manager”). aFML and abrdn Asia are wholly owned subsidiaries of abrdn plc.