asia-focus.com

abrdn Asia Focus plc

(

formerly Aberdeen Standard Asia Focus PLC

)

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

Annual Report 31 July 2022

The cover picture depicts the Bandra Worli Sea link

abrdn Asia Focus plc 1

“In my last Annual Report as Chairman before

stepping down in November, I am pleased to

see the Trust has in place the necessary measures

to take it to even greater strengths in the next 25

years and beyond”

Nigel Cayzer,

Chairman

“Despite the more uncertain near-term outlook, our

confidence in the long-term growth prospects

for the Asian region remains undimmed. The

opportunities for growth are plentiful, especially

within the smaller companies’ space, and we

remain positioned around structural growth

themes like domestic consumption,

technology and green energy”

Hugh Young,

abrdn Asia Limited

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.

2 abrdn Asia Focus plc

Net asset value total return (diluted)

Net asset value per share (diluted)

–2.0% 295.3

2021 +41.9% 2021 309.02p

Share price total return

Share price

–1.7% 254.0

2021 +38.2% 2021 266.00p

MSCI AC Asia ex Japan Small Cap

Index total return

Discount to net

asset value

–5.1% 14.0%

2021 +39.6% 2021 13.9%

Ongoing charges ratio

Dividend increase/(decrease)

0.88% 150.0%

2021 1.10% 2021 –15.8%

Alternative Performance Measure (see pages 101 to 103).

Presented on a diluted basis as the Convertible Unsecured Loan Stock (“CULS”) is “in the money” (2021 - same).

Currency adjusted, capital gains basis.

Dividends include special dividends of 1.6p for 2022 (2021 – 0.2p).

Figures for 2021 have been restated to reflect the 5:1 sub-division as disclosed in note 14.

Net asset value per share Dividends per share Mid-market price per share

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

246.4

260.1

221.3

309.0

295.3

18 19 20 21 22

*Diluted values used for

2021 and 2022

3.4

3.8

3.2

8.0

18 19 20 21 22

Final Special

210.0

230.0

196.0

266.0

254.0

18 19 20 21 22

Figures in the above charts for the years 2018-2021 have been restated to reflect the 5:1 sub-division as disclosed in

note 14.

Performance Hi

hli

hts

abrdn Asia Focus plc 3

“In accordance with the enhanced dividend

policy approved by shareholders, the Board has

achieved the target dividend of 6.4p per

Ordinary Share for the financial year ended 31

July 2022 representing a 100% increase on the

level of dividend paid in 2021. Furthermore, I am

very pleased to report that the strength of

dividend generation from the portfolio has

allowed the Company to declare a further

special interim dividend in respect of the year

ended 31 July 2022 of 1.6p per Ordinary share

which is 25% higher than the originally

anticipated level of target dividend.”

Nigel Cayzer,

Chairman

Overview

Financial Calendar, Dividends and Highlights 4

Strategic Report

Chairman’s Statement 8

Overview of Strategy 12

Investment Manager’s Review 21

Results 24

Performance 25

Portfolio

Ten Largest Investments 30

Portfolio 31

Sector/Geographical Analysis 35

Currency/Market Performance 37

Investment and ESG Case Studies 38

Governance

Board of Directors 44

Directors’ Report 47

Directors’ Remuneration Report 56

Statement of Directors’ Responsibilities 60

Report of the Audit Committee 61

Financial Statements

Independent auditors’ report to the members of

abrdn Asia Focus plc (formerly Aberdeen

Standard Asia Focus PLC) 66

Statement of Comprehensive Income 73

Statement of Financial Position 74

Statement of Changes in Equity 75

Statement of Cash Flows 76

Notes to the Financial Statements 77

Alternative Performance Measures 101

Corporate Information

Information about the Manager 105

The Investment Process 106

ESG Engagement 109

Investor Information 112

Alternative Investment Fund Managers Directive

Disclosures (Unaudited) 115

General

Notice of Annual General Meeting 117

Glossary of Terms and Definitions 121

Your Company’s Share Capital History 123

Corporate Information 125

Contents

4 abrdn Asia Focus plc

Financial year end

31 July

Announcement of results for year ended 31 July 2022

17 October 2022

Online Shareholder Presentation (see page 11)

16 November 2022

Annual General Meeting

30 November 2022

CULS Conversion Date

30 November 2022

Payment date of first interim for 2022/2023 and special

dividend for 2021/2022

20 December 2022

Payment date of second interim dividend for 2022/2023

21 March 2023

CULS Conversion Date

31 May 2023

Payment date of third interim dividend for 2022/2023

23 June 2023

Payment date of fourth interim dividend for 2022/2023

20 September 2023

Dividends

Rate xd date Record date Payment date

Interim 2022 3.20p 24 February 2022 25 February 2022 21 March 2022

Interim 2022 1.60p 26 May 2022 27 May 2022 17 June 2022

Interim 2022 1.60p 25 August 2022 26 August 2022 16 September 2022

Special 2022 1.60p 24 November 2022 25 November 2022 20 December 2022

8.00p

Final 2021

3.00p 6 January 2022 7 January 2022 2 February 2022

Special 2021

0.20p 6 January 2022 7 January 2022 2 February 2022

3.20p

Figures have been restated to reflect the 5:1 sub-division as disclosed in note 14.

Financial Calendar,

Dividends and Hi

hli

hts

abrdn Asia Focus plc 5

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

31/07/2022 31/07/2021 % change

Total assets (see definition on page 122) £532,912,000 £557,183,000 -4.4

Total equity shareholders’ funds (net assets) £464,396,000 £487,958,000 -4.8

Net asset value per share (basic)

295.88p 310.90p -4.8

Net asset value per share (diluted)

295.25p 309.02p

Share price (mid market)

254.00p 266.00p -4.5

Market capitalisation £398,662,000 £417,483,000 -4.5

Discount to net asset value (basic)

14.2% 14.4%

Discount to net asset value (diluted)

14.0% 13.9%

MSCI AC Asia ex Japan Small Cap Index (currency adjusted, capital gains basis) 1,888.43 2,052.64 -8.0

Net gearing

12.1% 10.0%

Dividends and earnings

Total return per share (basic)

(7.02)p 92.34p

Revenue return per share (basic)

9.34p 1.66p +462.7

Dividends per share

8.00p 3.20p +150.0

Dividend cover

1.17 0.52

Revenue reserves

£14,964,000 £12,868,000 +16.3

Operating costs

Ongoing charges ratio

0.88% 1.10%

Figures for 2021 have been restated to reflect the 5:1 sub-division as disclosed in note 14.

Considered to be an Alternative Performance Measure. See pages 101 and 102.

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

Prior year restatement as disclosed in note 22.

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

Prior to payment of final and special dividends.

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 and

Convertible Unsecured Loan Stock

are listed on the premium section of

the London Stock Exchange.

8 abrdn Asia Focus plc

Results

The past year has been difficult for financial markets as

the world emerges unevenly from the pandemic, with

global stock markets suffering from bouts of weakness as

investors digest the implications of a European war while

facing inflation and the rising prospects of a global

recession. But amidst this, some of the stock markets of

Asia, in particular those not under the direct influence of

China, have been relatively resilient; India being an

example where headline indices remain relatively

unchanged.

In addition, inflation in most parts of Asia has been mild

compared with elsewhere in the world with Asian Central

Banks being more accommodating; commodity prices,

with the exception of coal, have retreated from the highs

of earlier in the year and wage inflationary pressures in

Asia are not as great as those anticipated in Europe.

However, Asia has not been immune to the fallout from

Covid, with parts of the Chinese economy still suffering

from lockdowns and there remain pressures in global

supply-chains.

During the period, there was also a significant rotation

from growth to value stocks in Asian markets, as

tightening US monetary policy drove a de-rating in

expensive growth stocks with longer-dated cash-flows.

The market volatility was evident in both smaller

companies and their larger counterparts, with, over

the period, the MSCI Asia ex Japan Small Cap index

broadly tracking the larger capitalisation MSCI Asia

ex Japan index.

In this environment, your Company’s net asset value

(NAV) total return declined 2.0% over the 12 months to 31

July 2022. While this was a drop in absolute terms, it was

ahead of the MSCI Asia ex Japan Small Cap Index which

fell 5.1%. It is also important to point out that the

performance has also benefitted from the weakness of

sterling relative to many Asian currencies and particularly

the US dollar. The share price ended the period at 254p,

with the discount to NAV per share to 14.0%.

One of the advantages of serving as Chairman for over a

quarter of a century, is to see how these periodical seismic

events might affect the future prospects of this company-

I believe this is the sixth during my tenure. In this regard, I

think the following points are worth making:

· As we have identified in previous statements and the

reports we published to celebrate our 20th and 25th

anniversaries (available on the website), Asia is the

great engine of growth over the next 25 years and these

events will, over time, only be a blip in that cycle;

· From an Asian perspective, a war in Europe is a long way

off and while it will affect global trade, its impact on

domestic markets and in particularly small companies

where we invest, will have a more limited impact; and

· In times like these, opportunities to rotate out of mature,

well managed businesses into ones where opportunities

exist to make investments with higher growth potential

at more attractive valuations occur and again this time,

it is no different. The greater flexibility we granted the

Managers with the lifting of market cap limit last year

has widened the opportunity.

Since Hugh Young, Martin Gilbert and myself started, in

1995, as the first Directors of the Company with abrdn as

the Manager, it has been immensely rewarding and

satisfying to see the Company capitalise on the growth

and dynamism of the Far East’s diverse small-cap

companies and economies, growing assets under

management (AUM) from £34.0 million at the time of

launch in 1995 to £532.9 million (as at 31 July 2022). We

have seen the dividends grow during that period from a

low of 0.11p in 1998 to 8.0p, after the share split, in the year

on which we are reporting. I believe this record on both

investment performance and dividend growth is amongst

the best for investment companies quoted on the London

Stock Exchange.

This, in particular, is thanks to Hugh Young. As the inspired

Manager of the Trust since its inception, he has been the

key to shaping the abrdn Far Eastern investment team

into one of Asia’s leading on-the-ground investors with

exceptional access to companies, business leaders and

policymakers across the region. In the last few years, he

has been ably assisted by Gabriel Sacks and since last

year, with the addition of Flavia Cheong and Neil Sun, this

has further bolstered an already-impressive team.

As I have said, more often than not, in the fifty-three

Chairman’s Statements made to shareholders, the key to

our success has been to only invest in companies with

strong balance sheets, good management and excellent

prospects. To identify these companies needs dedication

from the Managers to seek out these investment nuggets;

and the performance of the Company bears out the hard

work they have done and continue to do.

Chairman’s Statement

abrdn Asia Focus plc 9

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

It is also easy to forget the multitude of administrative

matters that need attending to on a daily basis to ensure

the smooth running of the Company. Over the years, the

staff at abrdn have provided a seamless and efficient

service and I would like to thank Charles Mearns, who has

acted as Company Secretary for over 20 years and

William Hemmings, who as head of Investment Trusts for

18 years has been a source of valuable advice together

with my thanks to all the support staff in London, Aberdeen

and Singapore both past and present.

In my last Annual Report as Chairman before stepping

down in November, I am pleased to see the Trust has in

place the necessary measures to take it to even greater

strengths in the next 25 years and beyond.

Overview

Volatility was already creeping into global markets even

before the onset of Russia’s war in Ukraine. In 2022, central

banks have been preoccupied with the prospect of

recession and fending off inflation caused by rising

commodity prices. Asian markets have proved more

resilient during this unsettling period compared with other

emerging markets. Inflation has been more moderate

and, with post-Covid restrictions lifting, returning tourists

and increased consumer spending from pent-up

demand have led to a notable recovery in Southeast

Asia, for example.

China was an exception. The country’s ‘zero-Covid’ policy

meant lockdowns continued to be imposed as authorities

tried to contain new virus outbreaks. This dampened

domestic activity and put further pressure on an economy

that was already slowing as a result of a weak property

market and tight regulatory conditions. As a result, China

was among the region’s worst performing markets during

the period. It will be interesting to see if the much heralded

20th Communist Party Congress at the end of this month,

besides extending the term of office of President Xi, signals

any significant changes in policy; there have been hints of

Central Bank easing of policy which the team in Singapore

will be monitoring closely.

The Company’s relatively light exposure to China buoyed

performance relative to the index, but we believe the

country remains a great opportunity for diligent stock

pickers. With an indiscriminate sell-off in the market, your

Manager added two new holdings, capitalising on more

attractive valuations and reflecting a desire to gradually

increase the Company’s exposure to China (you can read

more about this in the Investment Manager’s Review

section of this report).

Two changes implemented to your Company this year will

help in this regard. The first is the removal of the US$1.5

billion market cap limit (at the time of initiation), which was

agreed at the General Meeting in January 2022. This limit

was proving a little restrictive in larger markets – especially

China – and the Board believes that the removal of the

cap will give your Manager greater flexibility to invest in

the most compelling smaller companies in the region.

Secondly, and as referred to above, we have

strengthened the investment team. During the period, we

welcomed Flavia Cheong, abrdn’s Head of Equities – Asia

Pacific, as joint Manager alongside Hugh Young and

Gabriel Sacks, and Neil Sun, who joins as an investment

manager. These additions add depth and experience to

your Company and will be beneficial as the team

considers a potential increase in allocation to North Asia,

leveraging off abrdn’s deeper insights on Chinese small

caps built over the past few years.

Looking elsewhere across the portfolio, there was strong

share-price performance from commodity-related

businesses or markets, such as those in Indonesia, or those

more positively impacted by rising inflation, such as the

shipping industry. Nevertheless, more export-oriented

markets fared poorly, especially those associated with the

tech supply-chain, such as Taiwan. Despite the marked

correction in a few of the Trust’s holdings, your Manager

remains convinced of the structural growth for these

businesses and would argue that the sell-off has thrown

up opportunities to buy high-quality companies in

this space.

We have also benefitted from a low exposure to Chinese

domestic companies. While these have suffered in the pull

back of markets, there will be considerable opportunities

in the growing Chinese markets and this current reduction

in values will present opportunities which will bear fruit in

future years.

For a more detailed report of the Company’s

performance and portfolio changes, please read the

Investment Manager’s Review.

Dividend

In accordance with the enhanced dividend policy

approved by shareholders, the Board has achieved the

target dividend of 6.4p per Ordinary Share for the financial

year ended 31 July 2022 (adjusted for the five for one

share split that occurred on 4 February 2022) (2021

equivalent full-year dividend 3.2p after adjustment for the

five for one share split) representing a 100% increase on

the level of dividend paid in 2021. Dividends of 3.2p, 1.6p

and 1.6p were paid in March, June and September 2022.

10 abrdn Asia Focus plc

Furthermore, I am very pleased to report that the strength

of dividend generation from the portfolio has allowed the

Company to declare a further special interim dividend in

respect of the year ended 31 July 2022 of 1.6p per

Ordinary share which will be paid on 20 December 2022 to

shareholders on the register on the record date of 25

November 2022 (ex dividend 24 November 2022).

I believe that, in difficult times, this total dividend of 8.0p per

share will be welcomed by shareholders especially as it is

25% higher than the annual target dividend.

The Board’s policy is to maintain the progressive dividend

policy of the last 25 years (including with the flexibility to

pay dividends out of capital reserves where merited in the

future) in order to provide shareholders with a regular

level of income alongside capital growth prospects.

Share Capital and Gearing

A five for one Share split was approved by shareholders on

27 January 2022 and, with effect from 4 February 2022,

each Ordinary share of 25p was sub-divided into five

Ordinary shares of 5p each.

During the period we have not bought back any Ordinary

shares in the market. The Board will continue to consider

the use of share buy backs to both reduce the volatility

of any discount and to modestly enhance the NAV

for shareholders.

The Company’s net gearing at 31 July 2022 was 12.1%

with the majority of the debt provided by the Loan Notes.

Gearing is also provided by the Convertible Unsecured

Loan Stock redeemable in 2025, of which approximately

£36.6m million remains outstanding. As at 14 October

2022, the latest practicable date, the net gearing stood

at 14.0%.

Directorate

One of the important duties of the Board is to see that the

members have the necessary skills to ensure that it is able

to both monitor the existing mandate, but also make any

necessary changes to that mandate to reflect the

demands of a constantly shifting investment world. It is

therefore my great pleasure to recommend the

finalisation of the following appointments to the Board. Mr

Lindsay Cooper joined on 15 June 2022 and Mr Alex Finn

joined on 13 July 2022.

Mr Cooper brings a significant amount of Asian

investment and small cap expertise to the Board and,

being based in Singapore, is perfectly placed to assist in

overseeing the execution of the Company's expanded

investment mandate that was approved by shareholders

in January 2022. After working in corporate finance in

Hong Kong in the early 1990s, Lindsay co-founded Arisaig

Partners in 1996, an independent Investment

Management business where he had investment

responsibility for the Arisaig Asia Consumer Fund. Since

stepping down from day to day investment responsibility

at Arisaig, Lindsay founded Chic & Unique Pte Ltd, a

boutique hotels and hospitality business with operations in

Asia and Europe and, more recently, founded Chi Tree

Health, a preventative healthcare enterprise in Singapore.

Mr Finn brings significant accounting expertise and

international business experience to the Board. He has

been appointed Chairman of the Audit Committee and

was a partner for twenty seven years in PwC's global

financial services practice, retiring on 30 June 2022. During

his career at PwC Mr Finn was responsible for the services

that PwC provided internationally to a number of its

largest global clients, all of which had extensive operations

in Asia. He was also responsible for supporting clients in

large scale accounting and financial change

programmes, was PwC's EMEA insurance leader, sat on its

EMEA FS leadership team and led a number of PwC's

largest global audit engagements. The Board has

reviewed the independence of Mr Finn and is satisfied that,

following his retirement from PwC where he had no

involvement in any direct or indirect work for the

Company or the Management Company, Mr Finn is

fully independent.

The appointment process for both new Directors was

conducted using the services and expertise of Fletcher

Jones, an independent recruitment consultant.

I would also like to thank Debby Guthrie who resigned

from the Board on 13 April 2022, for her contribution

to not only the Board but also as Chairman of the

Audit Committee.

As previously indicated, I will retire from the Board at the

conclusion of the AGM on 30 November 2022. I am

pleased to advise that Krishna Shanmuganathan has

accepted an invitation from the other Directors to

succeed me as independent Chairman from the

conclusion of the AGM in November. Krishna’s deep ties to

Asia and his experience at the Foreign and

Commonwealth Office, Fidelity International and then

subsequently as Managing Partner of Hakluyt Asia, based

in Singapore, will bring considerable knowledge and

benefit to the Board deliberation and I wish him personally,

and on your behalf, every success in his new role.

The Board succession planning will continue in 2023.

Chairman’s Statement

Continued

abrdn Asia Focus plc 11

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

Annual General Meeting

The Company's Annual General Meeting is scheduled for

12:30 p.m. on 30 November 2022 and the intention is for it

to be held in person in London. The AGM will be preceded

by a short presentation from the management team and

following the formal business there will be a shareholder

buffet lunch and the opportunity to meet the Directors. In

addition to the usual ordinary business being proposed at

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

the authority to issue new shares and sell treasury shares

for cash at a premium without pre-emption rules applying

and to renew the authority to buy back shares and either

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

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

encourage all shareholders to support the Company and

lodge proxy voting forms in advance of the meeting,

regardless of whether they intend to attend in person.

In light of the significant take up from shareholders at the

online presentation held in January 2022, in advance of

the AGM, the Board has decided to hold another

interactive Online Shareholder Presentation which will be

held at 11:00 a.m. on 16 November 2022. At the

presentation, shareholders will receive updates from the

Chairman and Manager and there will be the opportunity

for an interactive question and answer session. Following

the online presentation, shareholders will still have time to

submit their proxy votes prior to the AGM and I would

encourage all shareholders to lodge their votes in

advance in this manner. Full registration details can be

found at: https://www.workcast.com/register?cpak=

4646856687011531.

Outlook

As we look forward, investing in Asia has advantages over

both the short and long term. The region is proving to be

less vulnerable to the current environment than other

emerging markets – inflation is less of an issue, while

current account and fiscal discipline has been more

resilient to the deep downturns. In the longer term, there

are several strong trends that should support economic

growth, notably rising affluence, increased urbanisation,

growing infrastructure demand and commitment from

policymakers to a greener and lower-carbon future.

Geopolitics, on the other hand, remain a thorny issue, but

diversification might be investors’ best hedge against a

polarising world.

Valuations currently appear attractive, with the MSCI AC

Asia ex Japan trading at a forward price-to-earnings ratio

of 12.4x (below its five-year average), with the portfolio

trading at similar multiples. At these levels, your Manager

believes many of the prevailing risks, such as slower

growth and higher inflation, could be largely priced in.

Looking specifically at the Trust’s niche, we believe that

Asia’s rapidly developing economies continue to provide

fertile ground for quality smaller companies. Asia is home

to a wealth of under-researched yet high-performing

companies which are often family-run, conservative

businesses with low debt levels. For the most part, these

companies are leaders in their field, and have growth

rates that can be divorced from global macro conditions.

Over the years, your Manager’s strength has been the

ability to select quality companies at a reasonable price;

with a focus on balance sheet resilience and sustainable

earnings prospects. I believe this positions it well to

continue delivering healthy returns for shareholders in

these challenging times.

On a personal note, I would like to say what an honour and

delight it has been to serve as your Chairman over so long

a period. It has been a source of great inspiration to not

only see the developments in Asia during this period but

also to see the enormous achievements that this

Company has enjoyed. £1,000 invested in 1995 is now

worth £21,052 with dividends reinvested. I can only wish

everyone associated with the Company many thanks for

the huge support they have given me and great success in

the future.

Nigel Cayzer

Chairman

14 October 2022

12 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

From 27 January 2022:

On 27 January 2022 shareholders approved an amended

investment objective. The Company aims to maximise

total return to shareholders over the long term from a

portfolio made up predominantly of quoted smaller

companies in the economies of Asia excluding Japan.

Up to 27 January 2022:

The Company aimed to maximise total return to

shareholders over the long term from a portfolio made up

predominantly of smaller quoted companies (with a

market capitalisation of up to approximately US$1.5 billion

at the time of investment) in the economies of Asia and

Australasia, excluding Japan, by following the investment

policy. When it was in shareholders’ interests to do so, the

Company reserved the right to participate in the rights

issue of an investee company notwithstanding that the

market capitalisation of that investee may exceed the

stated ceiling.

Investment Policy

On 27 January 2022 shareholders approved an amended

investment policy. The Company may invest in a

diversified portfolio of securities (including equity shares,

preference shares, convertible securities, warrants and

other equity-related securities) predominantly issued by

quoted smaller companies spread across a range of

industries and economies in the Investment Region. The

Investment Region includes Bangladesh, Cambodia,

China, Hong Kong, India, Indonesia, Korea, Laos, Malaysia,

Myanmar, Pakistan, The Philippines, Singapore, Sri Lanka,

Taiwan, Thailand and Vietnam, together with such other

economies in Asia as approved by the Board.

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

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

assets in unquoted companies, calculated at the time

of investment.

The Company may also invest in companies traded on

stock markets outside the Investment Region provided

over 75% of each company’s consolidated revenue,

operating income or pre-tax profit is earned from trading

in the Investment Region or the company holds more

than 75% of their consolidated net assets in the

Investment Region.

When the Board considers it in shareholders’ interests, the

Company reserves the right to participate in rights issues

by an investee company.

Risk Diversification

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

assets in any single holding including listed investment

companies at the time of investment.

Gearing

The Board is responsible for determining the gearing

strategy for the Company. Gearing is used selectively to

leverage the Company’s portfolio in order to enhance

returns where and to the extent this is considered

appropriate to do so. Gearing is subject to a maximum

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

Delivering the Investment Policy

The Directors are responsible for determining the

investment policy and the investment objective of the

Company. Day to day management of the Company’s

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

Manager, abrdn Asia. abrdn Asia invests in a diversified

range of companies throughout the Investment Region in

accordance with the investment policy. abrdn Asia follows

a bottom-up investment process based on a disciplined

evaluation of companies through direct visits by its fund

managers. Stock selection is the major source of added

value. No stock is bought without the fund managers

having first met management. abrdn Asia estimates a

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

is defined by reference to management, business focus,

the balance sheet and corporate governance. Price is

calculated by reference to key financial ratios, the market,

the peer group and business prospects. Top-down

investment factors are secondary in the abrdn Asia’s

portfolio construction, with diversification rather than

formal controls guiding stock and sector weights.

A detailed description of the investment process and risk

controls employed by abrdn Asia is disclosed on pages

106 to 108. A comprehensive analysis of the Company’s

portfolio is disclosed on pages 30 to 37 including a

description of the ten largest investments, the portfolio

investments by value, sector/geographical analysis and

currency/market performance. At the year end the

Company’s portfolio consisted of 62 holdings.

Overview of Strate

abrdn Asia Focus plc 13

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

Investment Manager and Alternate

Investment Fund Manager

The Company’s Alternative Investment Fund Manager,

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

abrdn Fund Managers Limited (“aFML”) (previously known

as Aberdeen Standard Fund Managers Limited) which is

authorised and regulated by the Financial Conduct

Authority. Day to day management of the portfolio is

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

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

Asia are wholly owned subsidiaries of abrdn plc.

Comparative Indices

From 1 August 2021 the Manager has utilised the MSCI AC

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

as peer group comparisons for Board reporting. For

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

comprising the MSCI AC Asia Pacific ex Japan Small Cap

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

AC Asia ex Japan Small Cap Index (currency adjusted)

thereafter. It is likely that performance will diverge,

possibly quite dramatically in either direction, from the

comparative index. The Manager seeks to minimise risk by

using in-depth research and does not see divergence

from an index as risk.

Promoting the Company’s Success

In accordance with corporate governance best practice,

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

shareholders how the Directors have discharged their

duties and responsibilities over the course of the financial

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

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

Statement, from ‘Promoting the Success of the Company’

to “Long Term Investment” on page 15, provides an

explanation of how the Directors have promoted the

success of the Company for the benefit of its members as

a whole, taking into account the likely long term

consequences of decisions, the need to foster

relationships with all stakeholders and the impact of the

Company’s operations on the environment.

The purpose of the Company is to act as a vehicle to

provide, over time, financial returns to its shareholders. The

Company’s Investment Objective is disclosed on page 12.

The activities of the Company are overseen by the Board

of Directors of the Company.

The Board’s philosophy is that the Company should

operate in a transparent culture where all parties are

treated with respect and provided with the opportunity to

offer practical challenge and participate in positive

debate which is focused on the aim of achieving the

expectations of shareholders and other stakeholders alike.

The Board reviews the culture and manner in which the

Manager operates at its regular meetings and receives

regular reporting and feedback from the other key

service providers.

Investment trusts, such as the Company, are long-term

investment vehicles, with a recommended holding period

of five or more years. Typically, investment trusts are

externally managed, have no employees, and are

overseen by an independent non-executive board of

directors. Your Company’s Board of Directors sets the

investment mandate, monitors the performance of all

service providers (including the Manager) and is

responsible for reviewing strategy on a regular basis. All

this is done with the aim of preserving and, indeed,

enhancing shareholder value over the longer term.

Stakeholders

The Company’s main stakeholders have been identified

as its shareholders, the Manager (and Investment

Manager), service providers, investee companies and

debt providers. More broadly, the environment and

community at large are also stakeholders in the

Company. The Board is responsible for managing the

competing interests of these stakeholders. Ensuring that

the Manager delivers out performance for Ordinary

shareholders over the longer term without adversely

affecting the risk profile of the Company which is known

and understood by the loan note holders and CULS

holders. This is achieved by ensuring that the Manager

stays within the agreed investment policy.

Shareholders

Shareholders are key stakeholders in the Company – they

look to the Manager to achieve the investment objective

over time. The following table describes some of the ways

we engage with our shareholders:

14 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 30

November 2022 in London. We encourage shareholders to lodge their vote by proxy on all

the resolutions put forward.

Online Shareholder Presentation In January 2022 the Board held an online shareholder presentation which was attended by

over 250 shareholders and prospective investors.

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

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

paper format.

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

these announcements on the website.

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

value figures are announced on a daily basis.

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

commentary on portfolio and market performance.

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

portfolio listing of our investments as well as podcasts by the Investment Manager. Details of

financial results, the investment process and Investment asia-focus.co.uk

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

are on page 18).

The Manager

The key service provider for the Company is the

Alternative Investment Fund Manager and the

performance of the Manager is reviewed in detail at each

Board meeting. The Manager’s investment process is

outlined on pages 106 to 108 and further information

about the Manager is given on page 105. Shareholders

are key stakeholders in the Company – they are looking to

the Manager to achieve the investment objective over

time and to deliver a regular growing income together

with some capital growth. The Board is available to meet

at least annually with shareholders at the Annual General

Meeting and this includes informal meetings with them

over lunch following the formal business of the AGM. This

is seen as a very useful opportunity to understand the

needs and views of the shareholders. In between AGMs,

the Directors and Manager also conduct programmes of

investor meetings with larger institutional, private wealth

and other shareholders to ensure that the Company is

meeting their needs. Such regular meetings may take the

form of joint presentations with the Investment Manager

or meetings directly with a Director where any matters of

concern may be raised directly.

Other Service Providers

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

third party service providers. The Board is responsible for

selecting the most appropriate outsourced service

providers and monitoring the relationships with these

suppliers regularly in order to ensure a constructive

working relationship. Our service providers look to the

Company to provide them with a clear understanding of

the Company’s needs in order that those requirements

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

Management Engagement Committee, ensures that the

arrangements with service providers are reviewed at least

annually in detail. The aim is to ensure that contractual

arrangements remain in line with best practice, services

being offered meet the requirements and needs of the

Company and performance is in line with the

expectations of the Board, Manager, Investment Manager

and other relevant stakeholders. Reviews include those of

the Company’s depositary and custodian, share registrar,

broker and auditors.

Overview of Strate

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Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

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 21 to

23 details the key investment decisions taken during the

year and subsequently. The Investment Manager has

continued to monitor the investment portfolio throughout

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

key portfolio changes can be found in the Investment

Manager’s Report.

Board Investment Review During the year the Board

concluded its comprehensive investment review which

culminated in the following changes which were all

approved by shareholders at the General Meeting held on

27 January 2022:

1. amend the Company's Investment Policy;

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

3. amend the Company's Articles in order to provide

flexibility to pay dividends out of capital profits in the

future, and refresh the Articles more generally,

including in connection with the running of

Shareholder meetings following the recent pandemic;

4. enact a five for one Share split; and

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

Long Term Investment

The Investment Manager’s investment process seeks to

outperform over the longer term. The Board has in place

the necessary procedures and processes to continue to

promote the long term success of the Company. The

Board will continue to monitor, evaluate and seek to

improve these processes as the Company continues to

grow over time, to ensure that the investment proposition

is delivered to shareholders and other stakeholders in line

with their expectations.

Key Performance Indicators (KPIs)

The Board uses a number of financial performance

measures to assess the Company’s success in achieving

its objective and to determine the progress of the

Company in pursuing its investment policy. The main KPIs

identified by the Board in relation to the Company, which

are considered at each Board meeting, are as follows:

KPI Description

NAV Return (per share) The Board considers the Company’s NAV total return figures to be the best indicator of

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

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

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

pages 26 and 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.

16 abrdn Asia Focus plc

KPI Description

Dividend The Board has set a target dividend of 6.4p per share and the aim is to maintain or increase the

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

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

Principal Risks and Uncertainties

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

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

and further details on the risk matrix are provided in the Directors’ Report. The Board has undertaken a robust review of

the principal risks and uncertainties facing the Company including those that would threaten its business model, future

performance, solvency or liquidity. Those principal risks are disclosed in the table below together with a description of the

mitigating actions taken by the Board. The principal risks associated with an investment in the Company’s Shares are

published monthly on the Company’s factsheet or they can be found in the pre-investment disclosure document

published by the Manager, both of which are available on the Company’s website.

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

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

The Board notes that there are a number of contingent risks stemming from the Covid-19 pandemic and the conflict in

Ukraine that may impact the operation of the Company. These include investment risks surrounding the companies in

the portfolio such as employee absence, reduced demand, reduced turnover and global supply chain breakdowns. The

Investment Manager will continue to review carefully the composition of the Company’s portfolio and to be pro-active in

taking investment decisions where necessary. Operationally, third party services have continued to be supplied

seamlessly to the Company throughout the Covid-19 pandemic and the Board will continue to monitor arrangements in

the form of periodic updates from the Manager and Investment Manager.

In addition to the risks listed below, the Board is also very conscious of the risks emanating from increased environmental,

social and governance challenges. The recent scrutiny by western governments of human rights violations in Xinjiang is

an example of the need for continued vigilance regarding the supply chain exposure of investee companies and the fair

and humane treatment of workers. Likewise, as climate change pressures mount, the Board continues to monitor,

through its Manager, the potential risk that investee companies may fail to keep pace with the appropriate rates of

change and adaption.

In all other respects, the Company’s principal risks and uncertainties have not changed materially since the date of this

Annual Report and are not expected to change materially for the current financial year.

Description Mitigating Action

Investment strategy and objectives – the setting of an

unattractive strategic proposition to the market and the failure

to adapt to changes in investor demand may lead to the

Company becoming unattractive to investors, a decreased

demand for shares and a widening discount.

Risk Unchanged during Year

The Board keeps the level of discount at which the Company’s

shares trade as well as the investment objective and policy under

review and in particular holds an annual strategy meeting where

the Board reviews updates from the Investment Manager,

investor relations reports and the Broker on the market. In

particular, the Board is updated at each Board meeting on the

make-up of and any movements in the shareholder register.

Overview of Strate

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Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

Description Mitigating Action

Investment portfolio and investment management: investing

outside of the investment restrictions and guidelines set by the

Board could result in poor performance and inability to meet the

Company’s objectives, as well as a weakening discount.

Risk Unchanged during Year

The Board sets, and monitors, its investment restrictions and

guidelines, and receives regular board reports which include

performance reporting on the implementation of the investment

policy, the investment process and application of the guidelines.

The Investment Manager is in attendance at all Board meetings.

The Board also monitors the Company’s share price relative to

the NAV.

Financial obligations (Gearing): the requirement for the

Company to meet its financial obligations, or increasing the level

of gearing, could result in the Company becoming over-geared

or unable to take advantage of potential opportunities and result

in a loss of value to the Company’s shares. It could also result in

the Company being unable to meet the interest repayments

due on the CULS and Loan Note holders.

Risk Unchanged during Year

The Board sets a gearing limit and receives regular updates on

the actual gearing levels the Company has reached from the

Investment Manager together with the assets and liabilities of the

Company and reviews these at each Board meeting. In addition,

abrdn Fund Managers Limited, as alternative investment fund

manager, has set an overall leverage limit of 2x on a

commitment basis (2.5x on a gross notional basis) and includes

updates in its reports to the Board.

Financial and regulatory: the financial risks associated with the

portfolio could result in losses to the Company. In addition, failure

to comply with relevant regulation (including the Companies

Act, the Financial Services and Markets Act, the Alternative

Investment Fund Managers Directive, Accounting Standards and

the listing rules, disclosure and prospectus rules) may have an

impact on the Company.

Risk Unchanged during Year

The financial risks associated with the Company include market

risk, liquidity risk and credit risk, all of which are mitigated by the

Investment Manager. Further details of the steps taken to

mitigate the financial risks associated with the portfolio are set

out in note 19 to the financial statements. The Board relies upon

the abrdn Group to ensure the Company’s compliance with

applicable regulations and from time to time employs external

advisors to advise on specific concerns.

Operational: the Company is dependent on third parties for the

provision of all systems and services (in particular, those of

abrdn) and any control failures and gaps in these systems and

services could result in a loss or damage to the Company.

Disruption, including that caused by information technology

breakdown or another cyber-related issue, could prevent, for

example, the functioning of the Company; accurate reporting to

the Board or shareholders; or payment of dividends in

accordance with the announced timetable

Risk Unchanged during Year

The Board receives reports from the Manager on internal

controls and risk management at each Board meeting. It

receives assurances from all its significant service providers, as

well as back to back assurances where activities are themselves

sub-delegated to other third party providers with which the

Company has no direct contractual relationship. The assurance

reports include an independent assessment of the effectiveness

of risks and internal controls at the service providers including

their planning for business continuity and disaster recovery

scenarios, together with their policies and procedures designed

to address the risks posed to the Company’s operations by

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

place are set out in the Directors’ Report on pages 51 and 52.

18 abrdn Asia Focus plc

Description Mitigating Action

Investing in unlisted securities: the Company has the ability to

invest in unlisted securities, although no such investments have

been made to date. Unquoted investments are long-term in

nature and they may take a considerable period to be realised.

Unquoted investments are less readily realisable than quoted

securities. Such investments may therefore carry a higher

degree of risk than quoted securities. In valuing investments the

Company may rely to a significant extent on the accuracy of

financial and other information provided to the Manager as well

as the performance of listed peer multiples which may impact

unquoted valuations negatively.

Risk Unchanged during Year

The Board recognises that investing in unlisted securities carries

a higher risk/reward profile. Accordingly it seeks to mitigate this

risk by limiting investment into such securities to 10% of the

Company’s net assets (calculated at the time of investment). For

the year ended 31 July 2022 no unlisted investments were made.

Market and F/X: insufficient oversight or controls over financial

risks, including market risk, foreign currency risk, liquidity risk and

credit risk could result in a loss to the Company.

Risk Increased during Year

The Manager’s risk department reviews investment risk and a

review of credit worthiness of counterparties is undertaken by its

Counterparty Credit Risk team. The Company does not hedge

foreign currency exposure but it may, from time to time, partially

mitigate it by borrowing in foreign currencies.

Major market event or geo-political risk - The Company is

exposed to stockmarket volatility or illiquidity as a result of a

major market shock due to a national or global crisis. The impact

of such risks, associated with the portfolio or the Company itself,

could result in disruption to the operations of the Company

and losses.

Risk Increased during Year

External risks over which the Company has no control are always

a risk. The Manager monitors the Company’s portfolio and is in

close communication with the underlying investee companies in

order to navigate and guide the Company through

macroeconomic and geopolitical risks. The Manager continues

to assess and review the investment risks arising from the

resurgence of Covid-19 and the impact of events in Ukraine on

companies in the portfolio and takes the necessary investment

decisions. The Manager monitors the potential for increased

military tensions in East Asia, and other potential regional conflict.

Promoting the Company

The Board recognises the importance of promoting the

Company to prospective investors both for improving

liquidity and enhancing the value and rating of the

Company’s shares. The Board believes an effective way

to achieve this is through subscription to and participation

in the promotional programme run by the Manager on

behalf of a number of investment trusts under its

management. The Company’s financial contribution to

the programme is matched by the Manager. The

Manager reports quarterly to the Board giving analysis of

the promotional activities as well as updates on the

shareholder register and any changes in the make-up of

that register.

The purpose of the programme is both to communicate

effectively with existing shareholders and to gain new

shareholders with the aim of improving liquidity and

enhancing the value and rating of the Company’s shares.

Communicating the long-term attractions of your

Company is key and therefore the Company also

supports the Manager’s investor relations programme

which involves regional roadshows, promotional and

public relations campaigns.

Overview of Strate

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Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

Board Diversity

The Board recognises the importance of having a range

of skilled, experienced individuals with the right knowledge

represented on the Board in order to allow the Board to

fulfil its obligations. The Board also recognises the benefits

and is supportive of the principle of diversity in its

recruitment of new Board members. The Board will not

display any bias for age, gender, race, sexual orientation,

religion, ethnic or national origins, or disability in

considering the appointment of its Directors. Although the

Board does not set diversity targets, it is mindful of best

practice in this area, and the Board will continue to evolve

in 2023, with the stated aim of improving its diversity. At 31

July 2022, there were five male Directors and one female

Director on the Board.

Environmental, Social and Governance

(“ESG”) Engagement

Whilst the management of the Company’s investments is

not undertaken with any specific instructions to exclude

certain asset types or classes, the Investment Manager

embeds ESG into the research of each asset class as part

of the investment process. ESG investment is about active

engagement, with the goal of improving the performance

of assets held around the world.

The Investment Manager aims to make the best possible

investments for the Company, by understanding the

whole picture of the investments – before, during and after

an investment is made. That includes understanding the

environmental, social and governance risks and

opportunities they present – and how these could affect

longer-term performance. Environmental, social and

governance considerations underpin all investment

activities. With 1,000+ investment professionals, the

Investment Manager is able to take account of ESG

factors in its company research, stock selection and

portfolio construction – supported by more than 40 ESG

specialists around the world. Please refer to pages 109 to

111 for further detail on the Investment Manager’s ESG

policies applicable to the Company.

The Company has no employees as the Board has

delegated day to day management and administrative

functions to abrdn Fund Managers Limited. There are

therefore no disclosures to be made in respect of

employees. The Company’s socially responsible

investment policy is outlined above.

Due to the nature of the Company’s business, being a

company that does not offer goods and services to

customers, the Board considers that it is not within the

scope of the Modern Slavery Act 2015 because it has no

turnover. The Company is therefore not required to make

a slavery and human trafficking statement. The Board

considers the Company’s supply chains, dealing

predominantly with professional advisors and service

providers in the financial services industry, to be low risk in

relation to this matter.

The Company has no greenhouse gas emissions to report

from the operations of its business, nor does it have

responsibility for any other emissions producing sources

under the Companies Act 2006 (Strategic Report and

Directors’ Reports) Regulations 2013.

Viability Statement

The Company does not have a formal fixed period

strategic plan but the Board formally considers risks and

strategy at least annually. The Board considers the

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

vehicle, but for the purposes of this viability statement has

decided that a period of three years is an appropriate

period over which to report. The Board considers that this

period reflects a balance between looking out over a long

term horizon and the inherent uncertainties of looking out

further than three years.

In assessing the viability of the Company over the review

period the Directors have conducted a robust review of

the principal risks, focusing upon the following factors:

· The principal risks detailed in the Strategic Report;

· The ongoing relevance of the Company’s investment

objective in the current environment;

· The demand for the Company’s Shares evidenced by

the historical level of premium and or discount;

· The level of income generated by the Company;

· The level of gearing and flexibility of the Company’s

Loan Stock and Loan Notes; and

· The liquidity of the Company’s portfolio including the

results of stress test analysis performed by the Manager

under a wide number of market scenarios.

In making this assessment, the Board has examined

scenario analysis showing the impact of historic large

economic shocks on the value and level of liquidity of the

portfolio. This included modelling a further global

pandemic and the global financial crisis of 2008 and how

these factors might affect the Company’s prospects and

viability in the future.

20 abrdn Asia Focus plc

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 Chairman’s Statement on page 11

whilst the Investment Manager’s views on the outlook for

the portfolio are included on page 23.

The Strategic Report has been approved by the Board

and signed on its behalf by:

Nigel Cayzer,

Chairman

14 October 2022

Overview of Strate

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Performance review

Asian equities fared well during the first half of the period

as vaccine programmes led to an easing of lockdown

restrictions and an economic recovery. However, there

has been a pronounced risk-off trade in place since the

turn of the year, with investors rattled by disruption to

global supply chains, soaring inflation, rising interest rates

and Russia's invasion of Ukraine. This has manifested itself

in investors rotating away from more expensive areas of

the market − such as high-growth companies − towards

value. When market conditions are as volatile and the

macroeconomic backdrop as uncertain as they are

currently, sticking to our investment process becomes

even more important. The rigour that is central to our

process has stood us in good stead this year, enabling us

to deliver solid outperformance for shareholders.

Your Company benefitted from being overweight

Indonesia, as the market was among the strongest in the

Asian region. The Indonesian economy rebounded as the

country emerged from Covid-related restrictions and

commodity prices surged. Further, stock selection was

good, with AKR Corporindo among the standouts after

announcing consecutive record quarters for earnings. This

was thanks to lower expenses and sustained strength in

margins in its transmission and distribution division. The

company is a beneficiary of a commodity upcycle, as it

provides a boost to fuel sales and chemical-price inflation

improves profitability as the company has fixed-

percentage distribution margins. Medikaloka Hermina’s

share price also fared well. The company is rapidly

increasing its network of hospitals to meet growing

demand for medical services across the country, and

profits more than doubled in 2021. The stock was also

supported in the latter part of the period by major

Indonesian conglomerate Astra International raising its

stake in the company.

Elsewhere in Southeast Asia, stock selection in Malaysia

and our exposure to Vietnam further contributed to

performance. In Vietnam, IT-services business FPT Corp

benefitted from the continued need for corporates to

transition to the cloud and adapt their systems to newer

technologies. Property developer Nam Long benefitted

from a period of relatively loose monetary policy as well as

from a housing recovery – although inflation pressure in

recent months has turned Vietnam’s central bank more

cautious. Turning to North Asia, the fund’s underweight to

China served us well, given the raft of headwinds facing

companies there, including macro and regulatory

challenges, Beijing’s zero-Covid policy and accumulated

stress in the property sector. Chinese equities sold-off

further this year in response to China’s temporary

lockdown of major cities like Shanghai to curb the spread

of Covid-19.

Hong Kong-listed dry-bulk shipper Pacific Basin, on the

other hand, was among the top contributors to

performance. The company continues to enjoy a period of

higher profits and better earnings visibility, given tight

industry supply, resulting in large dividend payouts that

have significantly enhanced shareholder returns.

Elsewhere, shares in M.P. Evans, which operates

plantations in Indonesia, traded higher due to the sharp

rise in palm-oil prices, while Indian digital-advertising

business Affle rose as revenue growth continues to

exceed expectations. In addition, the firm is well positioned

to increase profitability in other emerging markets, as

underlined by its recent acquisition in Latin America.

Your Company’s exposure elsewhere in India dragged on

performance. Elevated energy and commodity prices

earlier this year contributed to inflation pressure that

prompted the Reserve Bank of India to embark on raising

interest rates. Higher prices combined with wavering

outlook for global growth weighed on shares. Towards the

end of the review period, Indian equities rebounded

sharply, but the fund’s underweight position relative to the

comparative index proved costly. The Trust’s holding in

Vijaya Diagnostic Centre sold off amid growing concerns

over competition in the diagnostics sector. In our view, the

market has overestimated the importance of price and

underappreciated more important business drivers such

as branding, trust and service quality. Godrej Agrovet also

lagged and we decided to divest the position to pursue

other investments with greater earnings visibility.

Investment Mana

er’s Review

22 abrdn Asia Focus plc

Further, the rotation away from technology stocks

impacted the Trust’s performance, with holdings in the

tech-heavy markets of Taiwan and South Korea not

immune from the broader sell-off in the sector globally.

This included the likes of Taiwan Union Technology, Park

Systems, Koh Young Technology and Douzone Bizon. Also in

Taiwan, momo.com underperformed after a strong period

of outperformance, as investors gravitated away from

high-growth companies, despite the company reporting

strong quarterly results.

Your Company’s exposure to Sri Lanka, through its holding

in conglomerate John Keells, hurt performance given the

country’s turbulent economic and political backdrop. This

manifested itself primarily via a devaluation of the

currency, as the company’s operations continue to

recover from Covid-induced challenges and the share

price in local currency terms has been relatively stable.

Despite the undoubted challenges Sri Lanka faces, we

believe there is value in John Keell’s shares and feel the

company is in a comfortable enough position to continue

investing in its businesses, which is likely to strengthen its

competitive moat over the long-term.

Portfolio activity

We think market volatility has created a price disconnect

that is best exploited through a focus on company

fundamentals. In line with this view, we took the

opportunity to introduce some quality businesses that are

well placed to ride on structurally growing themes, such as

health care and technology. This should also help us

mitigate the downside risks to growth from inflation. In a

similar vein, we sold-out of some companies where we

were less convinced of their long-term prospects, either

due to disappointing execution or as a result of a rapidly

changing macroeconomic environment.

As referenced in the Chairman’s statement, we decided

to increase the Trust’s exposure to China following a sharp

pullback in valuations This included introducing Sinoma

Science and Technology, one of the largest wind-turbine

blade producers in China and the third largest battery

separator maker. Sinoma operates with the

entrepreneurial culture of a private enterprise but, as a

state-owned enterprise, has better access to resources,

capital and research and development capabilities. We

view the stock as a proxy for rising demand for renewable

energy, including both wind and lithium batteries.

Therefore, as well as being a high-quality operator, it has

strong ESG credentials. We also added Joinn Laboratories,

which offers drug safety assessment services on the

mainland. Being an early mover in innovative drugs,

Joinn has a solid track record, while its services cover

the discovery, pre-clinical and clinical trial stages,

underpinned by research excellence and

experienced management.

We also purchased shares in South Korea’s Leeno

Industrial, which designs and manufactures equipment

that is vital in the testing process of most electronic

products. It is the global market leader in an industry

where barriers to entry are high due to the considerable

upfront investment required. Leeno supplies the largest

semiconductor manufacturers globally and has a well-

diversified customer base, spanning over a thousand

clients. We are also positive about its longer-term

prospects thanks to strong growth in end markets driven

by 5G, artificial intelligence, medical devices and

autonomous driving and electric vehicles. This is all backed

by excellent financials. Its healthy free cash flow and net-

cash balance sheet enables it to fund its capex and

working capital internally and it consistently generates a

return on equity in the high teens. Other additions to the

Trust during the period include Andes Technology,

MapmyIndia, IPH and Vijaya Diagnostic Centre.

Meanwhile, we divested the position in Singapore’s Raffles

Medical Group. Despite the firm announcing a good full-

year result in February, we were concerned about the

sustainability of Covid-related revenue and expect the

business to see earnings recede for a period of time. Other

exits include Aeon Credit Service Asia, Aeon Thana Sinsap,

Goodyear, Orix Leasing, Ujjivan Financial Services, Yantai

China Pet Foods and YNH Property.

Investment Mana

er’s Review

Continued

abrdn Asia Focus plc 23

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

Outlook

We expect Asian markets to remain volatile as the

prevailing stress points of rising inflation – aggravated by

the Ukraine conflict − and monetary policy normalisation

continue to raise the probability of a global economic

recession. China’s economy also remains weak and

although Beijing has adopted a more pro-growth stance

of late, continued monetary and fiscal support will be

required to revive economic activity and much will depend

on the extent to which the government decides to loosen

its ‘zero-Covid’ measures. Elsewhere across the region,

the recovery in Southeast Asia is gathering pace amid

further progress in the reopening of economies.

Despite serious macroeconomic and geopolitical

pressures, we have yet to see significant deterioration in

company fundamentals across the region, and the

operating performance of the Trust’s holdings has proven

to be resilient. Corporate Asia will continue to battle the

twin challenges of higher input costs and rising interest

rates, but we remain encouraged about your companies’

pricing power and debt-free balance sheets.

Despite the more uncertain near-term outlook, our

confidence in the long-term growth prospects for the

Asian region remains undimmed. The opportunities for

growth are plentiful, especially within the smaller

companies’ space, and we remain positioned around

structural growth themes like domestic consumption,

technology and green energy. Indeed, the turbulence in

markets has resulted in more palatable valuations,

creating enticing opportunities for investors like us who

are here for the long run.

Flavia Cheong, Gabriel Sacks, Neil Sun & Hugh Young

abrdn Asia Limited

14 October 2022

24 abrdn Asia Focus plc

Performance (total return)

1 year 3 year 5 year 10 year Since

% return % return % return % return inception

Share price

–1.7 +18.0 +31.9 +102.8 +2005.2

Net asset value per Ordinary share - diluted

–2.0 +20.2 +34.8 +130.6 +2115.6

MSCI AC Asia ex Japan Small Cap Index (currency adjusted) –5.1 +31.9 +32.6 +125.3 n/a

Considered to be an Alternative Performance Measure (see page 103 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.

Source: abrdn, Morningstar, Lipper & MSCI

Ten Year Financial Record

Year to 31 July 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Total revenue (£’000) 11,512 11,427 14,746 10,992 13,896 14,673 14,632 13,595 9,624 18,071

Per share (p)

Net revenue return

2.77 2.29 3.64 1.84 3.86 3.85 4.33 4.29 1.66 9.34

Total return 55.09 (6.29) (10.03) 33.08 34.46 7.36 15.64 (36.51) 92.34 (7.02)

Net ordinary dividends

paid/proposed

2.00 2.00 2.10 2.10 2.40 2.60 2.80 2.90 3.00 6.40

Net special dividends

paid/proposed

0.60 0.60 0.90 - 0.80 0.80 1.00 0.90 0.20 1.60

Net asset value per share (p)

Basic 202.76 193.78 181.23 213.78 247.09 246.37 260.11 221.29 310.90 295.88

Diluted 198.56 190.50 179.26 208.60 238.50 n/a n/a n/a 309.02 295.25

Shareholders’ funds (£’000) 382,932 369,118 343,967 383,735 430,105 433,706 441,010 358,956 487,958 464,396

Figures for 2013-2021 have been restated to reflect the 5:1 sub-division as disclosed in note 14.

Figure for 2021 adjusted as disclosed in note 22.

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 2022

-18%

-16%

-14%

-12%

-10%

-8%

-6%

-4%

-2%

31/07/17 31/07/18 31/07/19 31/07/20 31/07/21 31/07/22

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 2022 (rebased to 100 as at 31/07/17)

100

110

120

130

140

150

31/07/2017 31/07/2018 31/07/2019 31/07/2020 31/07/2021 31/07/2022

Share Price Diluted NAV

MSCI AC Asia ex Japan Small Cap Index MSCI AC Asia Pacific ex Japan Index

Performance

Continued

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 2022 (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

19/10/95 31/07/98 31/07/01 31/07/04 31/07/07 31/07/10 31/07/13 31/07/16 31/07/19 31/07/22

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 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 2022

3.5%

Total assets

Affle India

3.5%

Total assets

AKR Corporindo

A consumer technology business operating a

data platform that helps direct digital

advertising. It is dominant in India where

digitalisation has reached an inflection point. This

should support growth for several years.

AKR is one of the main players in industrial fuel

in Indonesia, which has a high entry barrier. Its

key strength is its extensive infrastructure and

logistic facilities throughout the country.

3.3%

Total assets

AEM Holdings

3.2%

Total assets

Park Systems Corporation

A Singapore-based provider of advanced

semiconductor chip testing services that has

embedded itself in chipmaker Intel's global

supply chain.

The Korean company is the leading developer

of atomic force microscopes, a nascent

technology that could have broad industrial

application in sectors such as chip-making

and biotechnology. The company's financials

are sound, despite significant upfront sales

and distribution costs. This provides a solid

base for earnings to grow when orders return.

3.2%

Total assets

Pacific Basin Shipping

3.0%

Total assets

MOMO.com

Pacific Basin is a Hong Kong-based dry bulk

shipping group with a favourable demand

outlook, supported by an improving global

economy and reopening prospects.

Momo, the largest online retailer in Taiwan,

serves as a nice proxy for consumer growth in

the country, as it is benefiting from the shift to

online from both consumers and vendors.

3.0%

Total assets

Sinoma Science &

Technology - A

2.9%

Total assets

FPT Corporation

One of the largest wind turbine blade producers

in China and the third largest battery separator

maker, which is backed by strong R&D capability

and support from its parent group. We view the

stock as a proxy for the growth of wind energy.

FPT is a diversified technology group with a

fast-growing software outsourcing business. It

also owns a telecoms unit, an electronics

retailing company, and has interests in other

sectors, such as education. We are upbeat

about the profitability prospects of the various

segments, given its entrepreneurial

management.

2.8%

Total assets

Nam Long Invst Corporation

2.8%

Total assets

Medikaloka Hermina

A reputable Vietnamese developer in Ho Chi Minh

City that focuses on the affordable housing

segment, with decent land bank and promising

project pipeline.

Medikaloka Hermina is the leading hospital

chain in Indonesia built for the mass market,

being the lowest cost operator that has been

able to make decent margins at lower

charges. It is well positioned for the growing

penetration and awareness of health care in

the country.

Ten Lar

est Investments

abrdn Asia Focus plc 31

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

As at 31 July 2022

Valuation Total Valuation

2022 assets 2021

Company Industry Country £’000 % £’000

Affle India Media India 18,847 3.5 17,554

AKR Corporindo Oil, Gas & Consumable Fuels Indonesia 18,389 3.5 9,589

AEM Holdings Semiconductors &

Semiconductor Equipment

Singapore 17,802 3.3 14,267

Park Systems Corporation Electronic Equipment,

Instruments & Components

South Korea 17,120 3.2 21,736

Pacific Basin Shipping Marine Hong Kong 17,104 3.2 24,170

MOMO.com Internet & Direct Marketing Retail Taiwan 16,160 3.0 33,767

Sinoma Science & Technology – A Chemicals China 15,756 3.0 -

FPT Corporation IT Services Vietnam 15,444 2.9 12,894

Nam Long Invest Corporation Real Estate Management &

Development

Vietnam 15,030 2.8 15,279

Medikaloka Hermina Health Care Providers & Services Indonesia 14,656 2.8 11,704

Top ten investments 166,308 31.2

Cyient Software India 14,016 2.6 17,445

M.P. Evans Group Food Products United Kingdom 13,857 2.6 11,660

Aegis Logistics Oil, Gas & Consumable Fuels India 13,716 2.6 13,799

Dah Sing Financial Holdings Banks Hong Kong 13,682 2.6 11,709

Mega Lifesciences (Foreign) Pharmaceuticals Thailand 13,524 2.6 10,578

Bank OCBC NISP Banks Indonesia 13,356 2.5 13,593

Joinn Laboratories China Life Sciences Tools & Services China 12,745 2.4 -

UIE Food Products Denmark 12,352 2.3 10,157

Oriental Holdings Automobiles Malaysia 12,281 2.3 8,792

Precision Tsugami China Corporation Machinery China 11,973 2.2 12,403

Top twenty investments 297,810 55.9

Portfolio

32 abrdn Asia Focus plc

Portfolio

Continued

As at 31 July 2022

Valuation Total Valuation

2022 assets 2021

Company Industry Country £’000 % £’000

Sunonwealth Electric

Machinery Industry

Machinery Taiwan 11,071 2.1 10,423

Asian Terminals Transportation Infrastructure Philippines 10,161 1.9 9,852

Millennium & Copthorne Hotels

New Zealand

Hotels, Restaurants & Leisure New Zealand 9,808 1.8 10,626

AEON Credit Service (M) Consumer Finance Malaysia 9,701 1.8 7,553

Cebu Holdings Real Estate Management &

Development

Philippines 9,664 1.8 12,069

Bukit Sembawang Estates Real Estate Management &

Development

Singapore 9,322 1.7 9,186

Sporton International Professional Services Taiwan 9,123 1.7 9,619

Ultrajaya Milk Industry & Trading Food Products Indonesia 9,030 1.7 8,525

Hana Microelectronics (Foreign) Electronic Equipment,

Instruments & Components

Thailand 8,736 1.7 14,304

IPH Professional Services Australia 7,940 1.5 -

Top thirty investments 392,366 73.6

John Keells Holdings Industrial Conglomerates Sri Lanka 7,640 1.4 13,941

Prestige Estates Projects Real Estate Management &

Development

India 7,162 1.3 5,521

Sanofi India Pharmaceuticals India 6,770 1.3 9,243

Syngene International Life Sciences Tools & Services India 6,521 1.2 3,976

LEENO Industrial Semiconductors &

Semiconductor Equipment

South Korea 6,322 1.2 -

Yoma Strategic Holdings Real Estate Management &

Development

Myanmar 5,943 1.1 5,392

Shangri-La Hotels Malaysia Hotels, Restaurants & Leisure Malaysia 5,867 1.1 5,740

United Plantations Food Products Malaysia 5,815 1.1 5,097

Taiwan Union Electronic Equipment,

Instruments & Components

Taiwan 5,778 1.1 10,693

Vijaya Diagnostic Centre Health Care Providers & Services India 5,645 1.1 -

Top forty investments 455,829 85.5

abrdn Asia Focus plc 33

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

As at 31 July 2022

Valuation Total Valuation

2022 assets 2021

Company Industry Country £’000 % £’000

Absolute Clean Energy (Foreign) Independent Power and

Renewable Electricity Producers

Thailand 5,115 1.0 7,313

Koh Young Technology Semiconductors &

Semiconductor Equipment

South Korea 4,879 0.9 8,347

Nanofilm Technologies International Chemicals Singapore 4,856 0.9 13,347

Pentamaster International Semiconductors &

Semiconductor Equipment

Malaysia 4,850 0.9 4,271

Tisco Financial Group (Foreign) Banks Thailand 4,827 0.9 5,154

KMC Kuei Meng International Leisure Products Taiwan 4,560 0.9 3,315

Convenience Retail Asia Food & Staples Retailing Hong Kong 4,314 0.8 3,467

NZX Capital Markets New Zealand 4,253 0.8 6,427

Aspeed Technology Semiconductors &

Semiconductor Equipment

Taiwan 3,652 0.7 5,543

Tatva Chintan Pharma Chemicals India 3,565 0.7 2,132

Top fifty investments 500,700 94.0

Andes Technology Semiconductors &

Semiconductor Equipment

Taiwan 3,470 0.6 -

Nazara Technologies Entertainment India 3,434 0.6 5,583

Credit Bureau Asia Professional Services Singapore 3,228 0.6 3,778

Ecloudvalley Digital Technology IT Services Taiwan 3,180 0.6 5,142

Douzone Bizon Software South Korea 3,108 0.6 4,157

Thai Stanley Electric (Foreign) Auto Components Thailand 2,912 0.5 4,680

CE Info Systems Software India 2,421 0.5 -

Manulife Holdings Insurance Malaysia 1,675 0.3 1,561

AEON Stores Hong Kong Multiline Retail Hong Kong 279 0.1 473

First Sponsor Group (Warrants

21/03/2029)

Real Estate Management &

Development

Singapore 276 0.1 303

Top sixty investments 524,683 98.5

34 abrdn Asia Focus plc

Portfolio

Continued

As at 31 July 2022

Valuation Total Valuation

2022 assets 2021

Company Industry Country £’000 % £’000

First Sponsor Group

(Warrants 30/05/2024)

Real Estate Management

& Development

Singapore 158 – 32

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

Total investments 524,841 98.5

Net current assets 8,071 1.5

Total assets

532,912 100.0

Holding includes investment in both common and preference lines.

Total assets less current liabilities.

abrdn Asia Focus plc 35

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

As at 31 July 2022

Sector Breakdown

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

Auto Components

Automobiles

Banks

Capital Markets

Chemicals

Consumer Finance

Electronic Equipment, Instruments & Components

Entertainment

Food & Staples Retailing

Food Products

Health Care Providers & Services

Hotels, Restaurants & Leisure

Independent Power and Renewable Electricity Producers

Industrial Conglomerates

Insurance

Internet & Direct Marketing Retail

IT Services

Leisure Products

Life Sciences Tools & Services

Machinery

Marine

Media

Multiline Retail

Oil, Gas & Consumable Fuels

Pharmaceuticals

Professional Services

Real Estate Management & Development

Semiconductors & Semiconductor Equipment

Software

Transportation Infrastructure

2022

2021

Sector/Geo

raphical Analysis

36 abrdn Asia Focus plc

Geographic Breakdown

15.6%

10.9%

10.6%

7.7%

6.8%

6.7%

6.0%

5.8%

3.8%

2.7%

2.6%

2.3%

1.5%

1.1%

Country allocation - 2022

India -15.6%

Taiwan - 10.9%

Indonesia - 10.6%

China - 7.7%

Malaysia - 7.7%

Singapore - 6.8%

Hong Kong - 6.7%

Thailand - 6.7%

South Korea - 6.0%

Vietnam - 5.8%

Philippines - 3.8%

New Zealand 2.7%

UK -2.6%

Denmark - 2.3%

Australia - 1.5%

Sri Lanka - 1.4%

Myanmar - 1.1%

16.7%

14.4%

9.2%

8.2%

8.0%

7.6%

6.3%

6.2%

5.2%

4.1%

3.1%

2.6%

2.2%

1.9%

1.0%

0.2%

Country allocation - 2021

India - 16.7%

Taiwan - 14.4%

Singapore - 9.2%

Thailand - 8.2%

Indonesia - 8.0%

Hong Kong - 7.6%

South Korea - 6.3%

Malaysia - 6.2%

Vietnam - 5.2%

Philippines - 4.1%

New Zealand - 3.1%

China - 3.1%

Sri Lanka - 2.6%

UK - 2.2%

Denmark - 1.9%

Myanmar - 1.0%

Pakistan - 0.2%

Reflects country of listing.

Sector/Geo

raphical Analysis

Continued

abrdn Asia Focus plc 37

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

Year to 31 July 2022

Currency Returns (in Sterling Terms)

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

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)

-30% -20% -10% 0% 10% 20% 30% 40% 50%

Australia

China

Hong Kong

India

Indonesia

Malaysia

New Zealand

Philippines

Singapore

South Korea

Taiwan

Thailand

Currency/Market Performance

38 abrdn Asia Focus plc

AKR Coporindo

In which year did we first invest?

2019

% Holding:

3.65%

Where is their head office?

Jakarta, Indonesia

What is their web address?

www.akr.co.id

What does the company do?

Founded as a small chemical trading business in Surabaya

and established as Aneka Kimia Raya in 1977, AKR is now a

leading distributor of chemicals, fuel and lubricants across

Indonesia. It also offers logistics and transport services.

Why do we like the investment?

We view AKR as a good proxy for the growth of Indonesia,

which is rich in natural resources and has a young and

expanding workforce as well as a large domestic market.

AKR’s fundamentals also impress us. Its core petroleum

and chemicals-distribution businesses are growing

steadily, benefitting from increased mining activity and

volumes in the current commodity cycle. On top of that, its

retail fuel business with BP is progressing on track. AKR is

among the main players in an industry with high entry

barriers, with its competitive edge enhanced by extensive

infrastructure and logistics facilities across the country.

With all this, AKR generates robust free cash flow and has

a solid balance sheet, which help sustain a decent

dividend yield of around 4%. Management is open to using

its strong cash position to pay down debt, finance capex

and increase its dividend payments in future.

Looking ahead, a key growth driver would be the

unlocking of value via land sales at its Jakarta Integrated

Industrial Port Estate (JIIPE), a joint venture with Pelindo.

JIIPE sprawls across 1,800 hectares of land, including a

400-hectare port, in Gresik, East Java. It is one of the few

integrated industrial estates in Indonesia with dedicated

deep-sea port access and utilities support, such as power,

water, gas piping waste treatment and

telecommunication facilities. It also has direct toll road and

railway connections. Furthermore, in mid-2021, JIIPE was

designated a special economic zone for the technology

and manufacturing sectors.

To date, most of the investments in JIIPE have been

completed, and the industrial estate is now entering its

monetisation phase with its portion of group profits on the

rise. JIIPE has already booked 3.5 hectares of land sales in

the first half of 2022, with another 37 hectares expected to

be booked in the second half. Management expects JIIPE

to deliver 60 hectares of land sales in 2023, given keen

interest from potential buyers. Aside from land sales, the

company has also started to book rental income for

laydown areas assigned to smelter construction.

On the ESG front, AKR’s increasing focus on sustainability is

reflected in its green initiatives. At JIIPE, for example, the

use of sensors and timers help reduce energy

consumption, while most of the street lighting is powered

by solar panels. As for carbon emissions, management is

working on a 10-year plan to invest in its fleet and

technology in order to reduce scope 1 and 2 emissions

and achieve net-zero status. Meanwhile, on the social

aspect, the company emphasises equal opportunity. Its

board of directors, for instance, has three women among

the eight directors.

Photo: AKR Corporindo

Investment and ESG Case Studies

abrdn Asia Focus plc 39

Cyient

In which year did we first invest?

2018

% Holding:

2.77%

Where is their head office?

Hyderabad, India

What is their web address?

www.cyient.com

What does the company do?

Cyient provides engineering and IT services to clients

mainly in developed markets, in areas such as automation,

innovation and manufacturing among others. Its core

business is engineering research and development, which

has plenty in common with the software outsourcing

industry. More companies are outsourcing high-end,

complex engineering work to places like India, where

there is an abundant availability of skilled engineers at

comparatively lower costs, benefitting service providers

like Cyient. Founded in 1991, Cyient won its first major

foreign contract in 1999, worth about US$5.5 million. Its

key verticals include transportation, communications

and utilities.

Why do we like the investment?

We think Cyient is a good value play in the Indian

engineering research and development services sector.

Specifically, we like Cyient because of its strong financials

– the business is able to generate free cash flow with very

healthy yields. Margins have also steadily recovered post

Covid, driven by operating leverage, increased offshoring

and higher utilisation of capacity.

The company is taking the right steps towards delivering

more consistent and profitable growth by focusing on a

few key industry segments as well as new leadership and

organisational changes. Its venture into the automotive

industry is promising, given it is one of the fastest growing

verticals for the sector. Consistent performance and

delivery leave the door open for significant re-rating

potential for the company.

On the leadership front, Cyient hired a new Chief

Operating Officer in 2020 who introduced a slew of

changes, including some internal restructuring and

quarterly reviews for performance accountability. So far,

the progress has been encouraging, with order intakes

improving towards pre-pandemic levels and reducing the

company's reliance on top clients to drive growth. The

number of larger accounts won – those in the range of

US$1 million-US$20 million – has also gone up steadily,

while order inflows continue to look robust, with a

generally upbeat outlook across most verticals.

Broadly, firms in this industry are expected to see strong

demand due to an accelerated shift towards digital

engineering, as the world progressively moves towards

smart and connected products. India's share of

engineering, research & development offshore

penetration is expected to rise over the next decade,

playing catch up to IT services where the country is a

global leader. Due to talent scarcity globally for niche

digital skills, Indian companies are expected to benefit

from increased offshoring of projects given its strong

engineering talent base.

On the ESG front, there have been concerns over Cyient’s

defence-related businesses, but the company has de-

emphasised its past work in the defence industry. It has

indicated further that it currently does minimal work for

the Indian government. While Cyient does not have a

formal ESG rating from MSCI, a controversy report from

MSCI did not identify any major issues.

Cyient has a dedicated annual sustainability report to

showcase the company’s ESG initiatives – the board of

directors provides leadership for Cyient’s sustainability

agenda and is supported by a committee and a working

group that acts as a bridge with the implementation team.

For example, in its latest sustainability report

the company

disclosed an initiative to install rooftop solar panels at

three of its facilities in India. The project resulted in an

additional power supply of 400 kilowatts to replace the use

of grid electricity.

40 abrdn Asia Focus plc

MP Evans

In which year did we first invest?

2006

% Holding:

2.74%

Where is their head office?

Kent, UK

What is their web address?

www.mpevans.co.uk

What is the attraction of M.P. Evans?

M.P. Evans is an Indonesian producer of sustainable crude

palm oil (CPO), with one of the healthiest production

profiles in the industry. It has roughly 40,000 hectares of oil

palm tree planted areas that are spread across seven

different locations in Sumatra and Kalimantan, with an

average tree age of about nine years.

The company has a strong balance sheet, driven by

stronger average selling prices and manageable levels of

cost, as well as relatively low capital expenditure due to its

young tree profile. Above-average productivity and

relatively low operating cost track record suggest that

management has successfully established the right

planting blueprint, infrastructure and ecosystem for its

estates, and enhances our confidence in the

company’s ability.

What have our engagement efforts been focused on?

We have discussed with the company the benefit of

better visibility and public perception around M.P. Evans’

ESG commitments and ways that can be done. For

example, the company commissioned University of

Indonesia to do a baseline study of some of its newer

plantations, from which it can monitor impact over time.

Further, we have provided inputs on the 2020 sustainability

report the firm produced, where we encouraged it to

report alignment on its operations with respect to the

United Nations’ Sustainable Development Goals and the

company did so.

As an example, M.P. Evans outlined its policies and

guidelines around forest protection and reducing

greenhouse gas emissions that are not only aligned to the

UN SDGs, but stand out in an industry that is associated

with cutting down tropical rainforests and destroying

habitats of endangered species.

The company trains workers to respond quickly to any

fires on the plantations; it raises awareness in areas like

habitat preservation, bans hunting on all estates and high

conservation value areas as well as expanding its biogas

capacity to reduce the carbon footprint. New

developments take place in heavily degraded areas that

are not forested or suitable for habitats, while burning of

vegetation and old palms to clear land is prohibited. In

addition, the company has policies in place to prevent any

forms of forced labour or child labour – another issue that

has blighted some of M.P. Evans’ peers in recent years.

Moreover, M.P. Evans is a member of the Roundtable on

Sustainable Palm Oil (RSPO) and has helped to develop a

framework to produce Certified Sustainable Palm Oil

(CSPO). All of the company’s existing mills are certified

and company policy dictates new mills have to achieve

RSPO certification as soon as possible after commencing

operations. M.P. Evans also has policies in place to

promote zero waste and to support smallholder

communities and co-operatives – including by persuading

independent smallholders to commit to producing

their crop in line with the RSPO Independent

Smallholder standard.

We also often discuss the board of directors and its

refreshment, and this is playing out. For example, on

August 1, 2022, the company appointed a new director to

the board with extensive experience working in ESG roles.

How do we rate M.P. Evans’ ESG capabilities?

Even though M.P. Evans is not rated by MSCI, its ESG

practices and disclosures are comparable – and in many

ways ahead of – its larger peers. Though the group last

published its sustainability report in 2020, we note that it is

relatively proactive in the management of ESG risks, led by

the CEO personally, disclosing unresolved grievances,

issues as well as progress of its ESG metrics on its website.

We will continue to engage with the company to

improve disclosures.

Investment and ESG Case Studies

Continued

abrdn Asia Focus plc 41

Absolute Clean Energy

In which year did we first invest?

2019

% Holding:

1.02%

Where is their head office?

Bangkok, Thailand

What is their web address?

www.ace-energy.co.th

What is the attraction of ACE?

ACE produces bio-waste energy and has a good track

record in operating 13 power plants, with another 20 in the

pipeline. Furthermore, government measures to promote

renewable energy support its ambitious growth plans, and

we are impressed by management’s focus and technical

know-how.

What have our engagement efforts been focused on?

We have focused mainly on the environmental and

governance pillars through our regular engagement with

ACE. We are monitoring the environmental impact of

ACE’s various power plants and how the company

handles waste and exhaust from its plants. On

governance, we have been looking at supply-chain

management and innovation through its operations, as

well as the handling of government relations given this is a

family-controlled business.

How do we rate ACE’s ESG capabilities?

Despite being in the utilities sector – which has relatively

higher carbon emissions – we think ACE has done well on

mitigating its environmental impact and managing its

greenhouse-gas emissions efficiently through technology.

The company has prioritised the environmental pillar in its

sustainability matrix, reflecting its close attention to this

area. So far, ACE has made good progress on improving

its biomass and waste-to-energy (WTE) plant efficiency,

using carbon capture technology to limit carbon

emissions. The company treats water from waste in its

waste-water treatment facilities located in its plants and

reuses the water as part of its steam-cooling system. In

addition, ACE’s sophisticated know-how in biomass plants

and more efficient power generation also help reduce

feedstock usage and its environmental footprint.

In terms of stakeholder relationships, ACE emphasises

transparency in its dealings with its feedstock suppliers

and avoids being overly dependent on any one supplier.

The company is also focused on minimising the impact of

its plants on local communities, with the only plant exhaust

being controlled-temperature steam cooled by re-using

treated waste water. ACE also carries out research and

development on energy-rich wood and the cloning of

fuel-efficient plants to support farmers across the country.

42 abrdn Asia Focus plc

Governance

abrdn Asia Focus plc 43

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

44 abrdn Asia Focus plc

Nigel Cayzer

Independent Non-Executive Chairman

Experience:

Chairman of Oryx International Growth Fund Limited and

a director of a number of other companies.

Length of service:

27 years, appointed Chairman on 28 September 1995

Last re-elected to the Board:

27 January 2022

Committee membership:

Nomination Committee (Chairman) and Management

Engagement Committee

Remuneration:

£35,500 per annum

All other public company directorships:

Oryx International Growth Fund Limited

Employment by the Manager:

None

Other connections with Trust or Manager:

None

Shareholding in Company:

Nil

Charlotte Black

Independent Non-Executive Director

Experience:

A Fellow of the Chartered Institute for Securities &

Investment and an independent public affairs consultant.

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.

Length of service:

3 years 10 Months, appointed a Director on

16 January 2019

Last re-elected to the Board:

27 January 2022

Committee membership:

Audit Committee, Management Engagement Committee

and Nomination Committee

Remuneration:

£27,500 per annum

All other public company directorships:

None

Employment by the Manager:

None

Other connections with Trust or Manager:

None

Shareholding in Company:

4,790 Ordinary shares

Board of Directors

abrdn Asia Focus plc 45

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:

Appointed a Director on 15 June 2022

Last re-elected to the Board:

To be elected at AGM on 30 November 2022

Committee membership:

Audit Committee, Management Engagement Committee

and Nomination Committee

Remuneration:

£27,500 per annum

All other public company directorships:

Nil

Employment by the Manager:

None

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:

Appointed a Director on 13 July 2022

Last re-elected to the Board:

To be elected at AGM on 30 November 2022

Committee membership:

Audit Committee (Chairman), Management Engagement

Committee (Chairman) and Nomination Committee

Remuneration:

£30,500 per annum

All other public company directorships:

Cembra Money Bank AG

Employment by the Manager:

None

Other connections with Trust or Manager:

None

Shareholding in Company:

Nil

46 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, including Weiss Korea

Opportunities Fund and St Judes India ChildCare

Centres UK.

Length of service:

2 years, appointed a Director on 3 June 2020

Last re-elected to the Board:

Elected on 27 January 2022

Committee membership:

Audit Committee, Management Engagement Committee

and Nomination Committee

Remuneration:

£27,500 per annum

All other public company directorships:

Weiss Korea Opportunity Fund

Employment by the Manager:

None

Other connections with Trust or Manager:

None

Shareholding in Company:

5,270 Ordinary shares

Randal Alexander McDonnell,

Earl of Antrim

Independent Non-Executive Director

Experience:

A partner of Sarasin & Partners LLP responsible for the

management of private client and charity portfolios as

well as self-invested personal pension schemes. He is

chairman of Sarasin’s London partnership. He is also

a non–executive director of a number of other

private companies.

Length of service:

9 years, appointed a Director on 1 July 2013

Last re-elected to the Board:

27 January 2022

Committee membership:

Management Engagement Committee, Nomination

Committee and Audit Committee

Remuneration:

£27,500 per annum

All other public company directorships:

None

Employment by the Manager:

None

Other connections with Trust or Manager:

None

Shareholding in Company:

4,000 Ordinary shares

Board of Directors

Continued

abrdn Asia Focus plc 47

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 2022.

Change of Name

On 4 April 2022 the Company changed its name

from Aberdeen Standard Asia Focus PLC to abrdn

Asia Focus plc.

Results and Dividends

Details of the Company’s results and proposed dividends

are shown on pages 4 and 5 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 2022 so as to enable it to comply with the ongoing

requirements for investment trust status.

Individual Savings Accounts

The Company has conducted its affairs so as to satisfy the

requirements as a qualifying security for Individual Savings

Accounts. The Directors intend that the Company will

continue to conduct its affairs in this manner.

Capital Structure, Buybacks and Issuance

The Company’s capital structure is summarised in note 14

to the financial statements. On 4 February 2022 the

Company completed a five for one share split and

shareholders received five New Ordinary Shares of 5p

each in exchange for each existing Ordinary Share of 25p

held as at the close of business on 3 February 2022. The

new Ordinary shares of 5p each retained the Stock

Exchange ticker (AAS) but were assigned a new ISIN and

SEDOL as follows:

New ISIN: GB00BMF19B58

New SEDOL: BMF19B5

At 31 July 2022, there were 156,953,631 fully paid Ordinary

shares of 5p each (2021 – 31,189,684 Ordinary shares of

25p each) in issue with a further 51,744,590 Ordinary

shares of 5p held in treasury (2021 – 10,348,918 Ordinary

shares of 25p each held in treasury). During the year no

Ordinary shares were purchased in the market for

treasury (2021 – 1,055,000 Ordinary shares of 25p each

purchased for treasury). During the period and up to the

date of this report no new Ordinary shares were issued for

cash and no shares were sold from or purchased

into treasury.

On 14 December 2021, 13,764 units of Convertible

Unsecured Loan Stock 2025 were converted into 935 new

Ordinary shares of 25p each. On 14 June 2022 1,579 units

of Convertible Unsecured Loan Stock 2025 were

converted into 536 new Ordinary shares of 5p each. In

accordance with the terms of the CULS Issue,

(subsequently adjusted to reflect the share split in

February 2022), the conversion price of the CULS for the

December conversion was determined at 1465.0p

nominal of CULS for one Ordinary share of 25p and the

conversion price for the June conversion was determined

at 293.0p nominal of CULS for one Ordinary share of 5p.

Voting Rights

Ordinary shareholders are entitled to vote on all

resolutions which are proposed at general meetings of the

Company. The Ordinary shares carry a right to receive

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

the Company, the surplus assets will be paid to Ordinary

shareholders in proportion to their shareholdings.

CULS holders have the right to attend but not vote at

general meetings of the Company. A separate resolution

of CULS holders would be required to be passed before

any modification or compromise of the rights attaching to

the CULS can be made.

Gearing

On 1 December 2020 the Company issued a £30 million 15

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

annualised interest rate of 3.05%. The Loan Note is

unsecured, unlisted and denominated in sterling. The Loan

Note ranks pari passu with the Company’s other

unsecured and unsubordinated financial indebtedness.

The Company used the proceeds of the Loan Note issue

to repay, and cancel in full, the Company’s loan facility

with RBS and the remainder was invested in the portfolio

by the Investment Manager.

Directors’ Report

48 abrdn Asia Focus plc

Management Agreement

The Company has appointed abrdn Fund Managers

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

as its alternative investment fund manager. aFML has

been appointed to provide investment management, risk

management, administration and company secretarial

services and promotional activities to the Company. The

Company’s portfolio is managed by abrdn Asia Limited

(“abrdn Asia”) by way of a group delegation agreement in

place between aFML and abrdn Asia. In addition, aFML has

sub-delegated administrative and secretarial services to

Aberdeen Asset Management PLC and promotional

activities to Aberdeen Asset Managers Limited (“AAML”).

Management Fee

With effect from 1 August 2021 the annual management

fee has been charged at 0.85% for the first £250,000,000,

0.60% for the next £500,000,000 and 0.50% over

£750,000,000 . Previously, the monthly management fee

was charged at 0.08%. Investment management fees are

charged 25% to revenue and 75% to capital.

The management agreement may be terminated by

either the Company or the Manager on the expiry of three

months’ written notice (reduced from 12 months). On

termination, the Manager would be entitled to receive fees

which would otherwise have been due to that date.

The Management Engagement Committee reviews the

terms of the management agreement on a regular basis

and have confirmed that, due to the long-term relative

performance, investment skills, experience and

commitment of the investment management team, in

their opinion the continuing appointment of aFML and

abrdn Asia is in the interests of shareholders as a whole.

Political and Charitable Donations

The Company does not make political donations (2021 -

nil) and has not made any charitable donations during the

year (2021 – nil).

Risk Management

Details of the financial risk management policies and

objectives relative to the use of financial instruments by

the Company are set out in note 19 to the financial

statements.

The Board

The current Directors, N K Cayzer, Randal Dunluce (The

Earl of Antrim), C Black, K Shanmuganathan, L Cooper

(appointed 15 June 2022) and A Finn (appointed 13 July

2022), together with D Guthrie who resigned on 13 April

2022, were the only Directors who served during the year.

During the period Viscount Dunluce succeeded to the title

Earl of Antrim following the death of his father. Pursuant to

Principle 23 of the AIC’s Code of Corporate Governance

which recommends that all directors should be subject to

annual re-election by shareholders, all the members of

the Board will retire at the AGM scheduled for 30

November 2022 and will offer themselves for re-election.

Details of each Director’s contribution to the long term

success of the Company are provided on page 50.

The Board considers that there is a balance of skills and

experience within the Board relevant to the leadership

and direction of the Company and that all the Directors

contribute effectively.

In common with most investment trusts, the Company has

no employees. Directors’ & Officers’ liability insurance

cover has been maintained throughout the year at the

expense of the Company.

The Role of the Chairman

The Chairman is responsible for providing effective

leadership to the Board, by setting the tone of the

Company, demonstrating objective judgement and

promoting a culture of openness and debate. The

Chairman facilitates the effective contribution, and

encourages active engagement, by each Director. In

conjunction with the Company Secretary, the Chairman

ensures that Directors receive accurate, timely and clear

information to assist them with effective decision-making.

The Chairman leads the evaluation of the Board and

individual Directors, and acts upon the results of the

evaluation process by recognising strengths and

addressing any weaknesses. The Chairman also engages

with major shareholders and ensures that all Directors

understand shareholder views.

The Company has not appointed a senior independent

director. Accordingly the Audit Committee Chairman in

combination with the other independent Directors fulfils

the duties of the senior independent director, acting as a

sounding board for the Chairman and acting as an

intermediary for other directors as applicable. The Audit

Committee Chairman is also available to shareholders to

discuss any concerns they may have.

Directors’ Report

Continued

abrdn Asia Focus plc 49

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

Corporate Governance

The Company is committed to high standards of

corporate governance. The Board is accountable to the

Company’s shareholders for good governance and this

statement describes how the Company has applied the

principles identified in the UK Corporate Governance

Code as published in July 2018 (the “UK Code”), which is

available on the Financial Reporting Council’s (the “FRC”)

website:

frc.org.uk.

The Board has also considered the principles and

provisions of the AIC Code of Corporate Governance as

published in February 2019 (the “AIC Code”). The AIC

Code addresses the principles and provisions set out in the

UK Code, as well as setting out additional provisions on

issues that are of specific relevance to the Company. The

AIC Code is available on the AIC’s website: theaic.co.uk.

The Board considers that reporting against the

principles and provisions of the AIC Code, which has

been endorsed by the FRC provides more relevant

information to shareholders.

The Board confirms that, during the year, the Company

complied with the principles and provisions of the AIC

Code and the relevant provisions of the UK Code, except

as set out below.

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

2. the role and responsibility of the chief executive

(provisions 9 and 14);

3. previous experience of the chairman of a

remuneration committee (provision 32);

4. executive directors’ remuneration

(provisions 33 and 36 to 40);

5. senior independent director (provision 12); and

6. tenure of the Chairman (provision 19).

For the reasons set out in the AIC Code, and as explained

in the UK Corporate Governance Code, the Board

considers that provisions 1 to 4 above are not relevant to

the position of the Company, being an externally-

managed investment company. In particular, all of the

Company’s day-to-day management and administrative

functions are outsourced to third parties. As a result, the

Company has no executive directors, employees or

internal operations. The Company has therefore not

reported further in respect of provisions 1 to 4 above. The

tenure of the Chairman is discussed further under ‘Policy

on Tenure’, below. The full text of the Company’s

Corporate Governance Statement can be found on the

Company’s website: asia-focus.co.uk.

During the year ended 31 July 2022, the Board had six

scheduled meetings. In addition, the Audit Committee met

twice and the Management Engagement Committee met

once and there has been a number of ad hoc Board

meetings to discuss investment strategy. Between

meetings the Board maintains regular contact with the

Manager. Directors have attended the following

scheduled Board meetings and Committee meetings

during the year ended 31 July 2022 (with their eligibility to

attend the relevant meeting in brackets):

Director Board Audit Com Nomination

Com

Management

Engagement

Com

N Cayzer

6 (6) n/a 3 (3) 1 (1)

C Black 6 (6) 2 (2) 3 (3) 1 (1)

Earl of Antrim 6 (6) 2 (2) 3 (3) 1 (1)

D Guthrie

4 (4) 2 (2) 2 (2) 1 (1)

K Shanmuganathan 5 (5) 2 (2) 3 (3) 1 (1)

L. Cooper

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

A Finn

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

Mr Cayzer is not a member of the Audit Committee

Ms Guthrie resigned from the Board on 13 April 2022

Mr Cooper was appointed to the Board on 15 June 2022

Mr Finn was appointed to the Board on 13 July 2022

50 abrdn Asia Focus plc

Policy on Tenure - Chairman

The Company’s policy, which is kept under very regular

review, is in line with the Listing Rules, the Chairman must

remain independent of the Manager and the Company.

The independent Directors believe that the independence

of the Chairman should be judged by the degree to which

the interests of the shareholders and stakeholders as a

whole are being served. The Directors note that Mr

Cayzer will be retiring from the Board at the conclusion of

the Annual General Meeting on 30 November 2022 and Mr

Shanmuganathan has accepted the Board’s invitation to

become Chairman from that date.

Policy on Tenure - Directors

The Board’s policy on tenure is that Directors need not

serve on the Board for a limited period of time only. The

Board does not consider that the length of service of a

Director is as important as the contribution he or she has

to make, and therefore the length of service will be

determined on a case-by-case basis. In accordance with

corporate governance best practice, all Directors,

including those who have served for more than nine years

or who are non-independent, voluntarily offer themselves

for re-election on an annual basis.

Board Committees

Audit Committee

The Audit Committee Report is on pages 61 to 63 of 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 pages 18 and 19.

During the year the Nomination Committee conducted a

search for two new non executive Directors using the

services of Fletcher Jones Limited, an independent

recruitment consultant. As part of the search a

specification of desired attributes and qualities was

prepared and the recruitment process culminated in the

appointment of Mr Lindsay Cooper on 15 June 2022 and

the appointment of Mr Alex Finn on 13 July 2022.

The Board undertakes an annual evaluation of the Board,

Directors, the Chairman and the Audit Committee which is

conducted by questionnaires. The 2022 evaluation

highlighted certain areas of further focus such as

continuing professional development which will be

addressed with input where necessary from the

Company’s advisors. Overall, the Committee has

concluded that the Board has an excellent balance of

experience, knowledge of investment markets, legal

regulation and financial accounting and continues to work

in a collegiate and effective manner.

The Nomination Committee has reviewed the

contributions of each Director ahead of their proposed

election and re-elections at the AGM on 30 November

2022. Notwithstanding that Mr Cayzer intends to retire

from the Board at the AGM on 30 November 2022, the

Committee wishes to reiterate its belief that Mr Cayzer

remains independent of the Manager. Ms Black has

brought significant financial promotion and marketing

expertise to the Board and has been closely involved in the

redevelopment of the Company’s website during the year;

the Earl of Antrim has continued to bring detailed wealth

management investment experience and insight to the

Board; and Mr Shanmuganathan has continued to bring

his deep experience of Asia as well as significant strategic

and financial vision to the Board. Although Mr Cooper and

Mr Finn were appointed to the Board immediately prior to

the Company’s year end they have already settled into

their roles seamlessly and, respectively, are bringing

excellent regional/investment experience and expert

relevant and recent accounting and financial experience

to the Board. For the foregoing reasons, the independent

members of the Nomination Committee have no

hesitation in recommending the election/re-election of

each Director who will be submitting themselves for re-

election at the AGM on 30 November 2022.

Directors’ Report

Continued

abrdn Asia Focus plc 51

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

Management Engagement Committee

The Management Engagement Committee comprises all

of the Directors and was chaired by Ms Guthrie up to her

resignation in April 2022 and subsequently by the

Chairman. The Committee is now chaired by Mr Finn

following his appointment to the Board on 13 July 2022.

The Committee is responsible for reviewing the

performance of the Investment Manager and its

compliance with the terms of the management and

secretarial agreement. The terms and conditions of the

Investment Manager’s appointment, including an

evaluation of fees, are reviewed by the Committee on an

annual basis. The Committee believes that the continuing

appointment of the Manager on the terms agreed is in the

interests of shareholders as a whole.

Remuneration Committee

Under the UK Listing Authority rules, where an investment

trust has only non-executive directors, the Code principles

relating to directors’ remuneration do not apply.

Accordingly, matters relating to remuneration are dealt

with by the full Board, which acts as the Remuneration

Committee, and is chaired by the Chairman.

The Company’s remuneration policy is to set

remuneration at a level to attract individuals of a calibre

appropriate to the Company's future development.

Further information on remuneration is disclosed in the

Directors’ Remuneration Report on pages 56 to 59.

Terms of Reference

The terms of reference of all the Board Committees may

be found on the Company’s website asia-focus.co.uk and

copies are available from the Company Secretary upon

request. The terms of reference are reviewed and

re-assessed by the Board for their adequacy on an

annual basis.

Internal Control

In accordance with the Disclosure and Transparency

Rules (DTR 7.2.5), the Board is ultimately responsible for

the Company’s system of internal control and for

reviewing its effectiveness and confirms that there is an

ongoing process for identifying, evaluating and managing

the significant risks faced by the Company. This process

has been in place for the year under review and up to the

date of approval of this Annual Report and Financial

Statements. It is regularly reviewed by the Board and

accords with the FRC Guidance.

The Board has reviewed the effectiveness of the system of

internal control. In particular, it has reviewed and updated

the process for identifying and evaluating the significant

risks affecting the Company and policies by which these

risks are managed.

The Directors have delegated the investment

management of the Company’s assets to the abrdn

Group within overall guidelines, and this embraces

implementation of the system of internal control, including

financial, operational and compliance controls and risk

management. Internal control systems are monitored and

supported by the abrdn Group’s internal audit function

which undertakes periodic examination of business

processes, including compliance with the terms of the

management agreement, and ensures that

recommendations to improve controls are implemented.

Risks are identified and documented through a risk

management framework by each function within the

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

market, operational and reputational risk. This helps the

internal audit risk assessment model identify those

functions for review. Any weaknesses identified are

reported to the Board, and timetables are agreed for

implementing improvements to systems. The

implementation of any remedial action required is

monitored and feedback provided to the Board.

The significant risks faced by the Company have been

identified as being financial; operational; and

compliance-related.

The key components of the process designed by the

Directors to provide effective internal control are

outlined below:

· the Manager prepares forecasts and management

accounts which allow the Board to assess the

Company’s activities and review its performance;

· the Board and Manager have agreed clearly defined

investment criteria, specified levels of authority and

exposure limits. Reports on these issues, including

performance statistics and investment valuations, are

regularly submitted to the Board and there are

meetings with the Manager and Investment Manager

as appropriate;

· as a matter of course the Manager’s compliance

department continually reviews abrdn’s operations and

reports to the Board on a six monthly basis;

52 abrdn Asia Focus plc

· written agreements are in place which specifically

define the roles and responsibilities of the Manager and

other third party service providers and, where relevant,

ISAE3402 Reports, a global assurance standard for

reporting on internal controls for service organisations,

or their equivalents are reviewed;

· the Board has considered the need for an internal audit

function but, because of the compliance and internal

control systems in place within abrdn, has decided to

place reliance on the Manager’s systems and internal

audit procedures; and

· at its September 2022 meeting, the Audit Committee

carried out an annual assessment of internal controls for

the year ended 31 July 2022 by considering

documentation from the Manager, Investment Manager

and the Depositary, including the internal audit and

compliance functions and taking account of events

since 31 July 2022. The results of the assessment, that

internal controls are satisfactory, were then reported to

the Board at the next Board meeting.

Internal control systems are designed to meet the

Company’s particular needs and the risks to which it is

exposed. Accordingly, the internal control systems are

designed to manage rather than eliminate the risk of

failure to achieve business objectives and by their nature

can only provide reasonable and not absolute assurance

against mis-statement and loss.

Going Concern

In accordance with the Financial Reporting Council's

guidance the Directors have undertaken a rigorous review

of the Company's ability to continue as a going concern.

The Company’s assets consist of equity shares in

companies listed on recognised stock exchanges and are

considered by the Board to be realisable within a relatively

short timescale under normal market conditions. The

Board has set overall limits for borrowing and reviews

regularly the Company’s level of gearing, cash flow

projections and compliance with banking covenants. The

Board has also reviewed stress testing and liquidity

analysis covering the impact of significant historical

market events such as the 1997 Asian Crisis and 2008

Global Financial Crisis on the liquidity of the portfolio to

ensure that even in significant negative markets the

Company would still be able to raise sufficient capital to

repay its liabilities.

The Directors are mindful of the Principal Risks and

Uncertainties disclosed in the Strategic Report on pages

16 to 18 and they believe that the Company has adequate

financial resources to continue its operational existence

for a period of not less than 12 months from the date of

approval of this Annual Report. They have arrived at this

conclusion having confirmed that the Company’s

diversified portfolio of realisable securities is sufficiently

liquid and could be used to meet short-term funding

requirements were they to arise, including in current

market conditions caused by the Covid-19 pandemic and

the conflict in Ukraine. The Directors have also reviewed

the revenue and ongoing expenses forecasts for the

coming year. Accordingly, the Directors believe that it is

appropriate to continue to adopt the going concern basis

in preparing the financial statements.

Management of Conflicts of Interest

The Board has a procedure in place to deal with a

situation where a Director has a conflict of interest. As part

of this process, the Directors prepare a list of other

positions held and all other conflict situations that may

need to be authorised either in relation to the Director

concerned or his connected persons. The Board considers

each Director’s situation and decides whether to approve

any conflict, taking into consideration what is in the best

interests of the Company and whether the Director’s

ability to act in accordance with his or her wider duties is

affected. Each Director is required to notify the Company

Secretary of any potential, or actual, conflict situations

that will need authorising by the Board. Authorisations

given by the Board are reviewed at each Board meeting.

No Director has a service contract with the Company

although Directors are issued with letters of appointment

upon appointment. The Directors’ interests in contractual

arrangements with the Company are as shown in note 18

to the financial statements. No other Directors had any

interest in contracts with the Company during the period

or subsequently.

The Board has adopted appropriate procedures designed

to prevent bribery. The Company receives periodic

reports from its service providers on the anti-bribery

policies of these third parties. It also receives regular

compliance reports from the Manager.

Directors’ Report

Continued

abrdn Asia Focus plc 53

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

The Criminal Finances Act 2017 introduced a new

corporate criminal offence of “failing to take reasonable

steps to prevent the facilitation of tax evasion”. The Board

has confirmed that it is the Company’s policy to conduct

all of its business in an honest and ethical manner. The

Board takes a zero-tolerance approach to facilitation of

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

foreign country.

Accountability and Audit

The respective responsibilities of the Directors and the

auditors in connection with the financial statements are

set out on pages 60 and 71 respectively.

Each Director confirms that:

· so far as he or she is aware, there is no relevant audit

information of which the Company’s auditors are

unaware; and,

· each Director has taken all the steps that they could

reasonably be expected to have taken as a Director in

order to make themselves aware of any relevant audit

information and to establish that the Company’s

auditors are aware of that information.

Additionally there have been no important events since

the year end that impact this Annual Report.

The Directors have reviewed the independent auditors’

procedures in connection with the provision of non-audit

services. No non audit services were provided by the

independent auditors during the year and the Directors

remain satisfied that the auditors’ objectivity and

independence has been safeguarded.

Independent Auditors

At the January 2022 AGM shareholders approved the re-

appointment of PricewaterhouseCoopers LLP (“PwC”) as

independent auditors to the Company. PwC has

expressed its willingness to continue to be the Company’s

auditors and a Resolution to re-appoint PwC as the

Company’s auditors and to authorise the Directors to fix

the auditors’ remuneration will be put to the forthcoming

Annual General Meeting.

Substantial Interests

The Board has been advised that the following

shareholders owned 3% or more of the issued Ordinary

share capital of the Company at 31 July 2022:

Shareholder No. of Ordinary

shares held

% held

City of London Investment

Management Company

35,545,725 22.7

Allspring Global Investments 17,499,145 11.2

Interactive Investor (non-beneficial) 12,730,109 8.1

abrdn Savings Scheme (non-beneficial) 12,603,327 8.0

Hargreaves Lansdown (non-beneficial) 11,495,052 7.3

Funds managed by abrdn 6,506,327 4.2

Charles Stanley 5,643,336 3.6

1607 Capital Partners 5,139,291 3.3

On 16 September 2022 the Company received notice that

City of London Investment Management Company had

increased its interest to 36,113,225 Ordinary shares,

representing 23.0% of the issued capital. There have

been no other significant changes notified in respect

of the above holdings between 31 July 2022 and

14 October 2022.

The UK Stewardship Code and Proxy Voting

Responsibility for actively monitoring the activities of

portfolio companies has been delegated by the Board

to the AIFM which has sub-delegated that authority to

the Manager.

The Manager is a tier 1 signatory of the UK Stewardship

Code which aims to enhance the quality of engagement

by investors with investee companies in order to improve

their socially responsible performance.

Relations with Shareholders

The Directors place a great deal of importance on

communication with shareholders. The Annual Report is

widely distributed to other parties who have an interest in

the Company’s performance. Shareholders and investors

may obtain up to date information on the Company

through the Manager’s freephone information service and

the Company’s website asia-focus.co.uk. The Company

responds to letters from shareholders on a wide range

of issues.

54 abrdn Asia Focus plc

The Board’s policy is to communicate directly with

shareholders and their representative bodies without the

involvement of the abrdn Group (either the Company

Secretary or the Manager) in situations where direct

communication is required and usually a representative

from the Board meets with major shareholders on an

annual basis in order to gauge their views.

The Notice of the Annual General Meeting, included within

the Annual Report and financial statements, is sent out at

least 20 working days in advance of the meeting. All

shareholders have the opportunity to put questions to the

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

Annual General Meeting or, where possible, at the

subsequent buffet luncheon for shareholders. The

Company Secretary is available to answer general

shareholder queries at any time throughout the year.

Special Business at the Annual

General Meeting

Directors’ Authority to Allot Relevant Securities

Approval is sought in Resolution 10, an ordinary resolution,

to renew the Directors’ existing general power to allot

securities but will also, provide a further authority (subject

to certain limits), to allot shares under a fully pre-emptive

rights issue. The effect of Resolution 10 is to authorise the

Directors to allot up to a maximum of 104,635,754 shares

in total (representing approximately 2/3 of the existing

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

52,317,877 shares (approximately 1/3 of the existing

issued share capital) may only be applied to fully pre-

emptive rights issues. This authority is renewable annually

and will expire at the conclusion of the next Annual

General Meeting. The Board has no present intention to

utilise this authority.

Disapplication of Pre-emption Rights

Resolution 11 is a special resolution that seeks to renew

the Directors’ existing authority until the conclusion of the

next Annual General Meeting to make limited allotments

of shares for cash of up to 10% of the issued share capital

other than according to the statutory pre-emption rights

which require all shares issued for cash to be offered first

to all existing shareholders. This authority includes the

ability to sell shares that have been held in treasury (if

any), having previously been bought back by the

Company. The Board has established guidelines for

treasury shares and will only consider buying in shares for

treasury at a discount to their prevailing NAV and selling

them from treasury at or above the then prevailing NAV.

New shares issued in accordance with Resolution 11 and

subject to the authority to be conferred by Resolution 10

will always be issued at a premium to the NAV per

Ordinary share at the time of issue. The Board will issue

new Ordinary shares or sell Ordinary shares from treasury

for cash when it is appropriate to do so, in accordance

with its current policy. It is therefore possible that the

issued share capital of the Company may change

between the date of this document and the Annual

General Meeting and therefore the authority sought will

be in respect of 10% of the issued share capital as at the

date of the Annual General Meeting rather than the date

of this document.

Purchase of the Company’s Shares

Resolution 12 is a special resolution proposing to renew

the Directors’ authority to make market purchases of the

Company’s shares in accordance with the provisions

contained in the Companies Act 2006 and the Listing Rules

of the Financial Conduct Authority. The minimum price to

be paid per Ordinary share by the Company will not be

less than 5p per share (being the nominal value) and the

maximum price should not be more than the higher of (i)

5% above the average of the middle market quotations

for the shares for the preceding five business days; and (ii)

the higher of the last independent trade and the current

highest independent bid on the trading venue where the

purchase is carried out.

The Directors do not intend to use this authority to

purchase the Company’s Ordinary shares unless to do so

would result in an increase in NAV per share and would be

in the interests of shareholders generally. The authority

sought will be in respect of 14.99% of the issued share

capital as at the date of the Annual General Meeting

rather than the date of this document.

The authority being sought in Resolution 12 will expire at

the conclusion of the next Annual General Meeting unless

it is renewed before that date. Any Ordinary shares

purchased in this way will either be cancelled and the

number of Ordinary shares will be reduced accordingly or

under the authority granted in Resolution 11 above, may

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

bought back any Ordinary shares for Treasury.

If Resolutions 10 to 12 are passed then an announcement

will be made on the date of the Annual General Meeting

which will detail the exact number of Ordinary shares to

which each of these authorities relate.

Continued

Directors’ Report

abrdn Asia Focus plc 55

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

These powers will give the Directors additional flexibility

going forward and the Board considers that it will be in the

interests of the Company that such powers be available.

Such powers will only be implemented when, in the view of

the Directors, to do so will be to the benefit of shareholders

as a whole.

Notice of Meetings

Resolution 13 is a special resolution seeking to authorise

the Directors to call general meetings of the Company

(other than Annual General Meetings) on 14 days’ notice.

This approval will be effective until the Company’s next

Annual General Meeting in 2023. In order to utilise this

shorter notice period, the Company is required to ensure

that shareholders are able to vote electronically at the

general meeting called on such short notice. The Directors

confirm that, in the event that a general meeting is called,

they will give as much notice as practicable and will only

utilise the authority granted by Resolution 13 in limited and

time sensitive circumstances.

Dividend Policy

As a result of the timing of the payment of the Company’s

quarterly dividends, the Company’s Shareholders are

unable to approve a final dividend each year. In line with

good corporate governance, the Board therefore

proposes to put the Company’s dividend policy to

Shareholders for approval at the Annual General Meeting

and on an annual basis thereafter.

The Company’s dividend policy shall be that dividends on

the Ordinary Shares are payable quarterly in relation to

periods ending October, January, April and July. It is

intended that the Company will pay quarterly dividends

consistent with the expected annual underlying portfolio

yield. The Company has the flexibility in accordance with

its Articles to make distributions from capital. Resolution 3,

an ordinary resolution, will seek shareholder approval for

the dividend policy.

Recommendation

Your Board considers Resolutions 10 to 13 to be in the best

interests of the Company and its members as a whole and

most likely to promote the success of the Company for the

benefit of its members as a whole. Accordingly, your

Board unanimously recommends that shareholders

should vote in favour of Resolutions 10 to 13 to be

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

their own beneficial shareholdings amounting to 14,060

Ordinary shares.

By order of the Board

Aberdeen Asset Management PLC -Secretaries

Bow Bells House, 1 Bread Street

London EC4M 9HH

14 October 2022

56 abrdn Asia Focus plc

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 70.

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 2022

31 July 2021

Chairman 35,500 35,500

Chairman of Audit Committee 30,500 30,500

Director 27,500 27,500

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

remuneration of non-executive Directors should reflect

the nature of their duties, responsibilities and the value of

their time spent and be fair and comparable to that of

other investment trusts that are similar in size, have a

similar capital structure and have a similar investment

objective.

Appointment

· The Company only intends to appoint non-executive

Directors.

· All the Directors are non-executive appointed under the

terms of Letters of Appointment.

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

first AGM after their appointment, and at least every

three years thereafter.

· New appointments to the Board will be placed on the

fee applicable to all Directors at the time of appointment

(currently £27,500 per annum).

· No incentive or introductory fees will be paid to

encourage a Directorship.

· The Directors are not eligible for bonuses, pension

benefits, share options, long term incentive schemes or

other benefits.

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

pocket expenses incurred in connection with the

performance of their duties, including travel expenses.

· The Company indemnifies its Directors for all costs,

charges, losses, expenses and liabilities which may be

incurred in the discharge of duties, as a Director of

the Company.

Directors’ Remuneration Report

abrdn Asia Focus plc 57

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

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’ 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. Following the

review it was concluded that the fees should be

maintained at the current levels. The Directors’ fees were

previously last increased in January 2021. 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 2022 (rebased to 100 at 31 July 2012).

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

240

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Share Price

MSCI AC Asia ex Japan Small Cap Index

Statement of Voting at General Meeting

At the Company’s last Annual General Meeting, held on 27

January 2022, shareholders approved the Directors’

Remuneration Report in respect of the year ended 31 July

2021 and the following proxy votes were received on the

resolutions:

Resolution For

Against Withheld

(2) Receive and Adopt Directors’

Remuneration Report

34.4m

(99.8%)

36,056

(0.2%)

34,647

(3) To approve the Directors’

Remuneration Policy

17.4m

(99.8%)

37,646

(0.2%)

44,790

Including discretionary votes

Approved at the AGM held on 1 December 2020

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 on page 56

while dividends paid to shareholders are set out in note 8.

The total fees paid to Directors are shown overleaf.

58 abrdn Asia Focus plc

Audited Information

Fees Payable

The Directors who served in the year received the

following fixed fees which exclude employers’ NI and any

VAT payable:

Director 2022

2021

N K Cayzer (Chairman and highest paid Director) 35,500 35,292

The Earl of Antrim 27,500 27,292

K Shanmuganathan 27,500 27,292

C Black 27,500 27,292

L Cooper

3,474 -

A Finn

1,558 -

D Guthrie

21,435 29,292

P Yea

- 10,081

Total 144,467 156,541

Mr Cooper was appointed to the Board on 15 June 2022

Mr Finn was appointed to the Board on 13 July 2022

Ms Guthrie resigned from the Board on 13 April 2022

Mr Yea retired from the Board on 1 December 2020

No taxable benefits were paid to Directors during the year

(2021: nil).

Annual Percentage Change in

Directors’ Remuneration

The table below sets out the annual percentage change in

Directors’ fees for the past three years.

Director

2022

2021

2020

N K Cayzer (Chairman and highest paid

Director)

0.6 0.8 0

The Earl of Antrim 0.8 1.1 0

K Shanmuganathan

0.8 84.1 n/a

C Black

0.8 1.1 45.7

L. Cooper

n/a n/a n/a

A Finn

n/a n/a n/a

D Guthrie

n/a 1.1 45.7

Mr Shanmuganathan was appointed to the Board on 3 June 2020

Ms Black was appointed to the Board in January 2019

Mr Cooper was appointed to the Board on 15 June 2022

Mr Finn was appointed to the Board on 13 July 2022

Ms Guthrie resigned from the Board on 13 April 2022

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.

Directors’ Interests in the Company

The Directors are not required to have a shareholding in

the Company. The Directors’ interests in contractual

arrangements with the Company are as shown in note 18

to the financial statements. The Directors (including

connected persons) at 31 July 2022 and 31 July 2021, 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 2022

31 July 2021

Ordinary shares Ordinary shares

N K Cayzer - -

Earl of Antrim 4,000 800

K Shanmuganathan 5,270 1,054

C Black 4,790 958

D Guthrie 23,450 4,690

L Cooper - n/a

A Finn - n/a

or date of resignation, if earlier

the shareholdings for 2021 have not been restated following the five for one share

split effective in February 2022

The above interests are unchanged at 14 October 2022,

being the nearest practicable date prior to the signing of

this Report.

Directors’ Remuneration Report

Continued

abrdn Asia Focus plc 59

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

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 2022:

· 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.

Nigel Cayzer,

Chairman

14 October 2022

60 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 elected to prepare the financial

statements in accordance with United Kingdom Generally

Accepted Accounting Practice (United Kingdom

Accounting Standards 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; and

· state whether applicable UK Accounting Standards

have been followed, subject to any material departures

disclosed and explained in the financial statements.

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 44 to 46, being the

persons responsible, hereby confirm to the best of their

knowledge that:

· the financial statements, prepared in accordance with

the applicable accounting standards, give a true and fair

view of the assets, liabilities, financial position and profit

or loss 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

Nigel Cayzer,

Chairman

14 October 2022

Statement of Directors’ Responsibilities

abrdn Asia Focus plc 61

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

I am pleased to present my first report of the Audit

Committee for the year ended 31 July 2022 which has

been prepared in compliance with applicable legislation.

Committee Composition

The Audit Committee comprises four independent

Directors at the year end; the Earl of Antrim, Charlotte

Black, Krishna Shanmuganathan, Lindsay Cooper and

myself (Alex Finn), as Chairman. I was appointed to the

Board on 13 July 2022 and became Audit Committee

Chairman from that date and, on behalf of my fellow

Directors, I would like to thank my predecessor, Debby

Guthrie for excellent stewardship of the Audit Committee.

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 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 considered the implications for the

Company as a result of the Covid-19 pandemic, including

the resilience of the reporting and control systems in place

for both the Manager and other service providers.

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

62 abrdn Asia Focus plc

Financial Statements and Significant Issues

During its review of the Company’s financial statements

for the year ended 31 July 2022, 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 77. All investments are 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 Trust Corporation

UK Limited) 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 audit which includes independent

confirmation of the existence of all investments at the

year end.

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 78. 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 60.

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

(2021 - 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 63

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 – 2022

represents the second 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 auditors, with the appointment

having been approved by shareholders at the AGM held

on 1 December 2020.

In accordance with present professional guidelines the

Senior Statutory Auditor is rotated after no more than five

years and the year ended 31 July 2022 will be the second

year for which the present Senior Statutory Auditor, Ms

Gillian Alexander, has served. The Committee considers

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

Company.

Alex Finn,

Audit Committee Chairman

14 October 2022

64 abrdn Asia Focus plc

Financial

Statements

abrdn Asia Focus plc 65

“Asian equities fared well during the first half of the period as vaccine

programmes led to an easing of lockdown restrictions and an economic

recovery. However, there has been a pronounced risk-off trade in place since

the turn of the year, with investors rattled by disruption to global supply

chains, soaring inflation, rising interest rates and Russia's invasion of Ukraine.

This has manifested itself in investors rotating away from more expensive

areas of the market − such as high-growth companies − towards value.”

66 abrdn Asia Focus plc

Report on the audit of the financial statements

Opinion

In our opinion, abrdn Asia Focus PLC (formerly Aberdeen Standard Asia Focus PLC)’s financial statements:

· give a true and fair view of the state of the Company’s affairs as at 31 July 2022 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, comprising 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 2022; 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

Overview

Audit scope

· The Company is a standalone Investment Trust Company and engages abrdn Standard Fund Managers Limited

(the “AIFM”) to manage its assets.

· We conducted our audit of the financial statements using information from the AIFM and BNP Paribas Trust

Corporation UK to whom the AIFM 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, and the industry in which the Company operates.

· We obtained an understanding of the accounting processes and 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

(formerly Aberdeen Standard Asia Focus PLC)

abrdn Asia Focus plc 67

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: £4,643,000 (2021: £4,879,000) based on 1% of Net Assets.

· Performance materiality: £3,482,000 (2021: £3,659,000).

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 page 62 (Report of the Audit Committee), page 78

(Accounting Policies) and page 80 (Notes to the

Financial Statements).

ISAs (UK) presume there is a risk of fraud in income recognition

because of the pressure management may feel to achieve a

certain objective. In this instance, we consider that ‘income’

refers to all the Company’s income streams, both revenue and

capital (including gains and losses on investments).

As the Company has an Income objective, there may be an

incentive to overstate income. As such, we focussed this risk on

the occurrence of revenue from investments, and its

presentation in the Income Statement as set out in the

requirements of The Association of Investment Companies’

Statement of Recommended Practice (the “AIC SORP”).

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.

The gains and losses on investments held at fair value comprise

realised and unrealised gains and losses. For unrealised gains

and losses, we tested the valuation of the portfolio at the year-

end (see Valuation and existence of listed investments Key Audit

Matter), together with testing of the reconciliation of opening

and closing investments and agreeing the year end holdings to

independent confirmation. For realised gains and losses, we

tested a sample of disposal proceeds by agreeing the proceeds

to bank statements.

68 abrdn Asia Focus plc

Key audit matter How our audit addressed the key audit matter

We tested the accuracy of dividend receipts by agreeing the

dividend rates from 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.

We tested the allocation and presentation of dividend income

between the revenue and capital return columns of the Income

Statement 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.

Valuation and existence of listed investments

Refer to page 62 (Report of the Audit Committee), page 77

(Accounting Policies) and page 85 (Notes to the

Financial Statements).

The investment portfolio at 31 July 2022 comprised listed equity

investments of £525 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 all listed investments by agreeing the

prices used in the valuation to independent third party sources.

We tested the existence of all listed investments by agreeing the

holdings to an independent confirmation from the Depository,

BNP Paribas Trust Corporation UK as at 31 July 2022. 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.

Materiality

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

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

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

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

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

Overall Company materiality £4,643,000 (2021: £4,879,000).

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

(formerly Aberdeen Standard Asia Focus PLC)

Continued

abrdn Asia Focus plc 69

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% (2021: 75%) of overall

materiality, amounting to £3,482,000 (2021: £3,659,000) 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

£232,000 (2021: £243,000) 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

those presented by COVID-19, rising inflation, Russia's Invasion of Ukraine, and the subsequent economic 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 NAV as a result of market performance on the ongoing ability of

the Company to operate.

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

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

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

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

in the preparation of the financial statements is appropriate.

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

Company's ability to continue as a going concern.

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

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

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

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

sections of this report.

Reporting on other information

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

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

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

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

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

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

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

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

70 abrdn Asia Focus plc

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 2022 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 is materially consistent with the financial statements and our knowledge obtained

during the audit, and we have nothing material to add or draw attention to in relation to:

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

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

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

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

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

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

statements;

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

why the period is appropriate; and

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

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

drawing attention to any necessary qualifications or assumptions.

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

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

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

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

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

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

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

during the audit:

Independent auditors’ report to the members of

abrdn Asia Focus plc

(formerly Aberdeen Standard Asia Focus PLC)

Continued

abrdn Asia Focus plc 71

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

· 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 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 capital gains or to increase net asset value. Audit procedures performed by the engagement team included:

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

compliance with laws and regulation and fraud where applicable;

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

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

· identified and tested journal entries, in particular year end journal entries posted during the preparation of the annual

report; and

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

example, targeting transactions that otherwise would be immaterial.

72 abrdn Asia Focus plc

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 two years, covering the years ended 31 July 2021 to 31 July 2022.

Gillian Alexander (Senior Statutory Auditor)

for and on behalf of PricewaterhouseCoopers LLP

Chartered Accountants and Statutory Auditors

Edinburgh

14 October 2022

Independent auditors’ report to the members of

abrdn Asia Focus plc

(formerly Aberdeen Standard Asia Focus PLC)

Continued

abrdn Asia Focus plc 73

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

Year ended 31 July 2022 Year ended 31 July 2021

(*Restated) (*Restated)

Revenue Capital Total Revenue Capital Total

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

(Losses)/gains on investments 10 - (22,324) (22,324) - 148,078 148,078

Income 3 18,071 - 18,071 9,624 - 9,624

Exchange gains/(losses) - 72 72 - (425) (425)

Investment management fees 4 (801) (2,403) (3,204) (3,570) - (3,570)

Administrative expenses

5,22 (1,163) (398) (1,561) (1,136) (250) (1,386)

Net return before finance costs and taxation 16,107 (25,053) (8,946) 4,918 147,403 152,321

Finance costs 6 (499) (1,497) (1,996) (1,732) - (1,732)

Net return before taxation 15,608 (26,550) (10,942) 3,186 147,403 150,589

Taxation 7 (956) 876 (80) (550) (3,556) (4,106)

Net return after taxation 14,652 (25,674) (11,022) 2,636 143,847 146,483

Return per share (pence)

: 9

Basic 9.34 (16.36) (7.02) 1.66 90.68 92.34

Diluted 8.75 n/a n/a n/a 84.04 85.95

Further details of the restatement can be found in note 22 on page 100.

Figures for 2021 have been restated to reflect the 5:1 sub-division as disclosed in note 14 on page 88.

For the year ended 31 July 2022 the conversion option for potential Ordinary shares within the Convertible Unsecured Loan Stock was

dilutive to the revenue return per Ordinary share but non-dilutive to the capital return per Ordinary share (2021 - non-dilutive to

revenue but dilutive to capital).

The total column of this statement represents the profit and loss account of the Company. There is no other comprehensive income

and therefore the net return after taxation is also the total comprehensive income for the year.

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

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

Statement of Comprehensive Income

74 abrdn Asia Focus plc

As at

As at 31 July 2021

31 July 2022 (*Restated)

Notes £’000 £’000

Fixed assets

Investments at fair value through profit or loss 10 524,841 540,921

Current assets

Debtors and prepayments 11 1,464 5,107

Cash and short term deposits 9,471 14,577

10,935 19,684

Creditors: amounts falling due within one year

Other creditors 12 (2,864) (3,422)

Net current assets 8,071 16,262

Total assets less current liabilities 532,912 557,183

Non-current liabilities

2.25% Convertible Unsecured Loan Stock 2025 13 (35,940) (35,708)

3.05% Senior Unsecured Loan Note 2035 13 (29,892) (29,886)

Deferred tax liability on Indian capital gains 13 (2,684) (3,631)

(68,516) (69,225)

Net assets 464,396 487,958

Capital and reserves

Called up share capital 14 10,435 10,435

Capital redemption reserve 2,062 2,062

Share premium account 60,428 60,412

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

Capital reserve (*restated)

15,22 375,450 401,124

Revenue reserve (*restated)

22 14,964 12,868

Total shareholders’ funds 464,396 487,958

Net asset value per share (pence)

Basic 16 295.88 310.90

Diluted 16 295.25 309.02

Further details of the restatement can be found in note 22 on page 100.

Figures for 2021 have been restated to reflect the 5:1 sub-division as disclosed in note 14 on page 88.

The financial statements were approved by the Board of Directors and authorised for issue on 14 October 2022 and were signed on

behalf of the Board by:

Nigel Cayzer

Chairman

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

Statement of Financial Position

abrdn Asia Focus plc 75

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

For the year ended 31 July 2022

Capital Share Equity Capital Revenue

Share redemption premium Component reserve reserve

capital reserve account CULS 2025 (*Restated) (*Restated) Total

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

Balance at 1 August 2021 (*restated) 22 10,435 2,062 60,412 1,057 401,124 12,868 487,958

Conversion of 2.25% CULS 2025 13 - - 16 - - - 16

Return after taxation - - - - (25,674) 14,652 (11,022)

Dividends paid 8 - - - - - (12,556) (12,556)

Balance at 31 July 2022 10,435 2,062 60,428 1,057 375,450 14,964 464,396

For the year ended 31 July 2021

Capital Share Equity Capital Revenue

Share redemption premium Component reserve reserve

capital reserve account CULS 2025 (*Restated) (*Restated) Total

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

Balance at 1 August 2020 10,434 2,062 60,377 1,057 268,750 16,276 358,956

Conversion of 2.25% CULS 2025 13 1 - 35 - - - 36

Purchase of own shares to treasury 14 - - - - (11,473) - (11,473)

Return after taxation (*restated)

22 - - - - 143,847 2,636 146,483

Dividends paid 8 - - - - - (6,044) (6,044)

Balance at 31 July 2021 10,435 2,062 60,412 1,057 401,124 12,868 487,958

Further details of the restatement can be found in note 22 on page 100.

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

Statement of Chan

es in Equity

76 abrdn Asia Focus plc

Year ended Year ended

31 July 2022 31 July 2021

Notes £’000 £’000

Cash flows from operating activities

Return before finance costs and tax (8,946) 152,321

Adjustments for:

Dividend income 3 (18,057) (9,620)

Interest income 3 (14) -

Dividends received 18,307 9,880

Interest received 10 -

Interest paid (1,742) (1,346)

Losses/(gains) on investments 10 22,324 (148,078)

Foreign exchange movements (72) 425

Decrease/(increase) in prepayments 18 (20)

Decrease in other debtors 11 5

Increase in other creditors 1,439 113

Stock dividends included in investment income (174) (233)

Overseas withholding tax suffered 7 (1,439) (690)

Net cash inflow from operating activities 11,665 2,757

Cash flows from investing activities

Purchase of investments (81,319) (81,406)

Sales of investments 77,032 81,562

Indian capital gains tax rebate on sales - 101

Net cash (outflow)/inflow from investing activities (4,287) 257

Cash flows from financing activities

Purchase of own shares for treasury - (11,570)

Repayment of loan - (11,200)

Drawdown of 3.05% Senior Unsecured Loan Note 2035 13 - 29,882

Equity dividends paid 8 (12,556) (6,043)

Net cash (outflow)/inflow from financing activities (12,556) 1,069

(Decrease)/increase in cash and cash equivalents (5,178) 4,083

Analysis of changes in cash and short term deposits

Opening balance 14,577 10,919

(Decrease)/increase in cash and short term deposits (5,178) 4,083

Foreign exchange movements 72 (425)

Closing balance 9,471 14,577

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

Statement of Cash Flows

abrdn Asia Focus plc 77

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. Accountin

olicies

(a) Basis of preparation and going concern. The financial statements have been prepared in accordance with Financial

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

Statements of Investment Trust Companies and Venture Capital Trusts’ issued in April 2021. The financial statements

are prepared in Sterling which is the functional currency of the Company and rounded to the nearest £’000. They

have also been prepared on a going concern basis and on the assumption that approval as an investment trust will

continue to be granted by HMRC.

In accordance with the Financial Reporting Council’s guidance the Directors have undertaken a rigorous review of

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

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

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

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

reviewed stress testing and liquidity analysis covering the impact of significant historical market events such as the

1997 Asian Crisis and 2008 Global Financial Crisis on the liquidity of the portfolio to ensure that even in significant

negative markets the Company would still be able to raise sufficient capital to repay its liabilities.

The Directors are mindful of the Principal Risks and Uncertainties disclosed in the Strategic Report on pages 16 to 18

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

period of not less than 12 months from the date of approval of this Annual Report. They have arrived at this conclusion

having confirmed that the Company’s diversified portfolio of realisable securities is sufficiently liquid and could be

used to meet short-term funding requirements were they to arise, including in current market conditions caused by

the Covid-19 pandemic and the conflict in Ukraine. The Directors have also reviewed the revenue and ongoing

expenses forecasts for the coming year. Accordingly, the Directors believe that it is appropriate to continue to adopt

the going concern basis in preparing the financial statements.

Significant accounting judgements, estimates and assumptions. The preparation of financial statements requires the

use of certain significant accounting judgements, estimates and assumptions which requires management to

exercise its judgement in the process of applying the accounting policies and are continually evaluated. Special

dividends are assessed and credited to capital or revenue according to their circumstances and are considered to

require significant judgement. The Directors do not consider there to be any significant estimates within the financial

statements.

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

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

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

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

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

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

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

the capital reserve.

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

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

charges are accounted for on an accruals basis using the effective interest rate method. With effect from 1 August

2021, the Company charges 25% of finance charges to revenue and 75% to capital (previously 100% to revenue).

Notes to the Financial Statements

For the year ended 31 July 2022

78 abrdn Asia Focus plc

(d) Income. Dividends, including taxes deducted at source, are included in revenue by reference to the date on which the

investment is quoted ex-dividend. Special dividends are reviewed on a case-by-case basis and may be credited to

capital, if circumstances dictate. Dividends receivable on equity shares where no ex-dividend date is quoted are

brought into account when the Company’s right to receive payment is established. Fixed returns on non-equity

shares are recognised on a time apportioned basis so as to reflect the effective yield on shares. Other returns on non-

equity shares are recognised when the right to return is established. Where the Company has elected to receive its

dividends in the form of additional shares rather than cash, the amount of the cash dividend is recognised as income.

Any excess in the value of the shares received over the amount of the cash dividend is recognised in capital reserves.

Interest receivable on bank balances is dealt with on an accruals basis.

(e) Expenses. Expenses are accounted for on an accruals basis. Expenses are charged through the revenue column of

the Statement of Comprehensive Income except as follows:

- expenses directly relating to the acquisition or disposal of an investment, which are charged to the capital column

of the Statement of Comprehensive Income and are separately identified and disclosed in note 10; and

– with effect from 1 August 2021, the Company charges 25% of investment management fees and finance costs to

the revenue column and 75% to the capital column of the Statement of Comprehensive Income, in accordance with

the Board’s expected long term return in the form of revenue and capital gains respectively from the investment

portfolio of the Company. Previously the allocation was 100% to revenue.

(f) Taxation. The tax expense represents the sum of tax currently payable and deferred tax. Any tax payable is based on

the taxable profit for the year. Taxable profit differs from net profit as reported in the Statement of Comprehensive

Income because it excludes items of income or expense that are taxable or deductible in other years and it further

excludes items that are never taxable or deductible. The Company’s liability for current tax is calculated using tax

rates that were applicable at the Statement of Financial Position date.

Deferred taxation is recognised in respect of all timing differences that have originated but not reversed at the

Statement of Financial Position date, where transactions or events that result in an obligation to pay more tax in the

future or right to pay less tax in the future have occurred at the Statement of Financial Position date. This is subject to

deferred tax assets only being recognised if it is considered more likely than not that there will be suitable profits from

which the future reversal of the underlying timing differences can be deducted. Timing differences are differences

arising between the Company’s taxable profits and its results as stated in the financial statements which are capable

of reversal in one or more subsequent periods. Deferred tax is measured on a non-discounted basis at the tax rates

that are expected to apply in the periods in which timing differences are expected to reverse, based on tax rates and

laws enacted or substantively enacted at the Statement of Financial Position date.

The tax effect of different items of income/gain and expenditure/loss is allocated between capital and revenue

within the Statement of Comprehensive Income on the same basis as the particular item to which it relates using the

Company’s effective rate of tax for the year, based on the marginal basis.

(g) Foreign currency. Assets and liabilities in foreign currencies are translated at the rates of exchange ruling on the

Statement of Financial Position date. Transactions involving foreign currencies are converted at the rate ruling on the

date of the transaction. Gains and losses on dividends receivable are recognised in the Statement of Comprehensive

Income and are reflected in the revenue reserve. Gains and losses on the realisation of investments in foreign

currencies and unrealised gains and losses on investments in foreign currencies are recognised in the Statement of

Comprehensive Income and are then transferred to the capital reserve.

Notes to the Financial Statements

Continued

abrdn Asia Focus plc 79

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

(h) Convertible Unsecured Loan Stock. Convertible Unsecured Loan Stock (“CULS”) issued by the Company is regarded as

a compound instrument, comprising of a liability component and an equity component. At the date of issue, the fair

value of the liability component of the 2.25% CULS 2025 was estimated by assuming that an equivalent non-

convertible obligation of the Company would have an effective interest rate of 3.063%. The fair value of the equity

component, representing the option to convert liability into equity, is derived from the difference between the issue

proceeds of the CULS and the fair value assigned to the liability. The liability component is subsequently measured at

amortised cost using the effective interest rate and the equity component remains unchanged.

Direct expenses associated with the CULS issue are allocated to the liability and equity components in proportion to

the split of the proceeds of the issue. Expenses allocated to the liability component are amortised over the life of the

instrument using the effective interest rate.

(i) Cash and cash equivalents. Cash comprises cash in hand and short term deposits. Cash equivalents includes bank

overdrafts repayable on demand and short term, highly liquid investments, that are readily convertible to known

amounts of cash and that are subject to an insignificant risk of change in value.

(j) Nature and purpose of reserves

Capital redemption reserve. The capital redemption reserve arose when Ordinary shares were redeemed and

cancelled, at which point an amount equal to the par value of the Ordinary share capital was transferred from the

share capital account to the capital redemption reserve. This is not a distributable reserve.

Share premium account. The balance classified as share premium includes the premium above nominal value from

the proceeds on issue of any equity share capital comprising Ordinary shares of 5p (2021 - 25p). This is not a

distributable reserve.

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

movement in the fair value of investments held that have been recognised in the Statement of Comprehensive

Income. These include gains and losses from foreign currency exchange differences arising on monetary assets and

liabilities except for dividend income receivable. Share buybacks to be held in treasury, which is considered to be a

distribution to shareholders, is also deducted from this reserve. The realised gains part of this reserve is also

distributable for the purpose of funding dividends.

Revenue reserve. This reserve reflects all income and costs which are recognised in the revenue column of the

Statement of Comprehensive Income. The revenue reserve is distributable by way of dividend. The amount of the

revenue reserve as at 31 July 2022 may not be available at the time of any future distribution due to movements

between 31 July 2022 and the date of distribution.

(k) Treasury shares. When the Company purchases the Company’s equity share capital as treasury shares, the amount

of the consideration paid, which includes directly attributable costs is recognised as a deduction from equity. When

these shares are sold or reissued subsequently, the amount received is recognised as an increase in equity, and the

resulting surplus or deficit on the transaction is transferred to or from the capital reserve.

(l) Dividends payable. Final dividends are recognised in the financial statements in the period in which Shareholders

approve them.

(m) Segmental reporting. The Directors are of the opinion that the Company is engaged in a single segment of business

activity, being investment business. Consequently, no business segmental analysis is provided however an analysis of

the geographic exposure of the Company’s investments is provided on page 36.

80 abrdn Asia Focus plc

3. Income

2022 2021

£’000 £’000

Income from investments

Overseas dividends 17,292 9,015

UK dividend income 591 372

Stock dividends 174 233

18,057 9,620

Other income

Deposit interest 14 -

Other income - 4

14 4

Total income 18,071 9,624

4. Investment management fees

2022 2021

Revenue Capital Total Revenue Capital Total

£’000 £’000 £’000 £’000 £’000 £’000

Investment management fees 801 2,403 3,204 3,570 - 3,570

The Company has an agreement with abrdn Fund Managers Limited (“aFML”) for the provision of management services,

under which investment management services have been delegated to abrdn Asia Limited (“abrdn Asia”).

With effect from 1 August 2021, the management fee has been payable monthly in arrears, on a tiered basis, exclusive of

VAT where applicable, based on market capitalisation at an annual rate of 0.85% for the first £250 million, 0.6% for the next

£500 million and 0.5% thereafter. It was previously set at 0.96% per annum of market capitalisation. Market capitalisation is

defined as the Company’s closing Ordinary share price quoted on the London Stock Exchange multiplied by the number of

Ordinary shares in issue (excluding those held in Treasury), as determined on the last business day of the calendar month to

which the remuneration relates. The balance due to the Manager at the year end was £2,138,000 (2021 – £663,000) which

represents nine months’ fees (2021 – two months).

The management agreement may be terminated by either the Company or the Manager on the expiry of three months’

written notice. On termination, the Manager would be entitled to receive fees which would otherwise have been due

to that date.

With effect from 1 August 2021, management fees are charged 25% to revenue and 75% to capital (previously

100% to revenue).

Notes to the Financial Statements

Continued

abrdn Asia Focus plc 81

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

5. Administrative expenses

2022 2021

£’000 £’000

Administration fees

103 99

Directors’ fees

144 157

Promotional activities

219 219

Auditors’ remuneration:

– fees payable to the auditors for the audit of the annual financial statements 42 44

Custodian charges 293 276

Depositary fees 49 47

Registrar fees 51 44

Legal and professional fees

87 331

Other expenses 175 169

1,163 1,386

The Company has an agreement with aFML for the provision of administration services. The administration fee is payable quarterly in advance and is adjusted

annually to reflect the movement in the Retail Prices Index. The balance due to aFML at the year end was £52,000 (2021 – £25,000). The agreement is terminable on

six months’ notice.

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 £219,000 (2021 – £219,000). There was a £73,000 (2021 – £73,000) balance due to abrdn plc at the year end.

As per note 22 on page 100, the Statement of Comprehensive Income, the Statement of Financial Position and the Statement of Changes in Equity for the year

ended 31 July 2021 have been restated to reallocate costs of £250,000 incurred during that period in relation to the long-term investment strategy review from

revenue to capital. There has been no change to the overall charge for the year ended 31 July 2021 of £331,000.

6. Finance costs

2022 2021

Revenue Capital Total Revenue Capital Total

£’000 £’000 £’000 £’000 £’000 £’000

Loans repayable in less than one year - - - 50 - 50

Interest on 3.05% Senior Unsecured Loan Note 2035 230 691 921 611 - 611

Interest on 2.25% CULS 2025 207 620 827 824 - 824

Notional interest on 2.25% CULS 2025 39 115 154 153 - 153

Amortisation of 2.25% CULS 2025 issue expenses 23 71 94 94 - 94

499 1,497 1,996 1,732 - 1,732

With effect from 1 August 2021, finance costs have been charged 25% to revenue and 75% to capital

(previously 100% to revenue).

82 abrdn Asia Focus plc

7. Taxation

2022 2021

Revenue Capital Total Revenue Capital Total

£’000 £’000 £’000 £’000 £’000 £’000

(a) Analysis of charge for the year

Indian capital gains tax rebate on sales - - - - (101) (101)

Overseas taxation 956 71 1,027 550 26 576

Total current tax charge for the year 956 71 1,027 550 (75) 475

Deferred tax charge on Indian capital gains - (947) (947) - 3,631 3,631

Total tax charge for the year 956 (876) 80 550 3,556 4,106

The Company has recognised a deferred tax liability of £2,684,000 (2021 - £3,631,000) on capital gains which may

arise if Indian investments are sold.

At 31 July 2022 the Company had surplus management expenses and loan relationship deficits of £70,420,000 (2021 –

£64,205,000) in respect of which a deferred tax asset has not been recognised. This is due to the Company having

sufficient excess management expenses available to cover the potential liability and the Company is not expected to

generate taxable income in the future in excess of deductible expenses. The Finance Act 2021 received Royal Assent

on 10 June 2021 and the rate of Corporation Tax of 25% effective from 1 April 2023 has been used to calculate the

potential deferred tax asset of £17,605,000 (2021 – £16,051,000).

(b) Factors affecting the tax charge for the year. The tax assessed for the year is higher (2021 – lower) than the current

standard rate of corporation tax in the UK for a large company of 19% (2021 – 19%). The differences are explained

below:

Notes to the Financial Statements

Continued

abrdn Asia Focus plc 83

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

2022 2021

(*Restated) (*Restated)

Revenue Capital Total Revenue Capital Total

£’000 £’000 £’000 £’000 £’000 £’000

Return before taxation

15,608 (26,550) (10,942) 3,186 147,403 150,589

Return multiplied by the standard tax rate of

corporation tax of 19%

2,966 (5,045) (2,079) 605 28,007 28,612

Effects of:

Losses/(gains) on investments not taxable - 4,242 4,242 - (28,135) (28,135)

Exchange (gains)/losses - (14) (14) - 81 81

Overseas tax 956 71 1,027 550 26 576

Indian capital gains tax rebate on sales - - - - (101) (101)

Movement in deferred tax liability on Indian

capital gains

- (947) (947) - 3,631 3,631

UK dividend income (112) - (112) (71) - (71)

Non-taxable dividend income (3,319) - (3,319) (1,757) - (1,757)

Expenses not deductible for tax purposes 25 76 101 25 - 25

Movement in unutilised management expenses

345 457 802 869 47 916

Movement in unutilised loan relationship deficits 95 284 379 329 - 329

Total tax charge for the year 956 (876) 80 550 3,556 4,106

Further details of the restatement can be found in note 22 on page 100.

8. Dividends

2022 2021

£’000 £’000

Final dividend for 2021 - 3.0p (2020 - 2.9p) 4,708 4,612

Special dividend for 2021 - 0.2p (2020 - 0.9p) 314 1,431

Interim dividend for 2022 - 3.2p (2021 - nil) 5,023 -

Interim dividend for 2022 - 1.6p (2021 - nil) 2,511 -

Write off 2018 dividend debtor - 1

12,556 6,044

Proposed final and special dividends are subject to approval by shareholders at the Annual General Meeting and are not

included as a liability in the financial statements.

84 abrdn Asia Focus plc

We set out below the total dividends paid and proposed in respect of the financial year, which is the basis on which the

requirements of Sections 1158 – 1159 of the Corporation Tax Act 2010 are considered. The revenue available for

distribution by way of dividend for the current year is £14,652,000 (2021 (*restated- £2,636,000).

2022 2021

£’000 £’000

Interim dividend for 2022 - 3.2p (2021 - nil) 5023 -

Interim dividend for 2022 - 1.6p (2021 - nil) 2511 -

Proposed final dividend for 2022 – nil (2021 – 3.0p) - 4,708

Proposed special dividend for 2022 – 1.6p (2021 – 0.2p) 2,511 314

12,556 5,022

The amount reflected above for the cost of the proposed final and special dividend for 2022 is based on 156,953,631

Ordinary shares, being the number of Ordinary shares in issue excluding shares held in treasury at the date of this Report.

The rates disclosed for prior year has been restated to reflect the 5:1 sub-division as disclosed in note 14.

9. Return per share

2022 2021

(*Restated) (*Restated)

Revenue Capital Total Revenue Capital Total

Basic

Return after taxation (£’000) 14,652 (25,674) (11,022) 2,636 143,847 146,483

Weighted average number of shares

in issue

156,951,436 158,635,715

Return per share (p) 9.34 (16.36) (7.02) 1.66 90.68 92.34

2022 2021

Diluted Revenue Capital Total Revenue Capital Total

Return after taxation (£’000) 14,831 (25,139) (10,308) 3,253 143,847 147,100

Weighted average number of shares

in issue

169,459,584 171,154,920

Return per share (p) 8.75 n/a n/a n/a 84.04 85.95

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 12,508,148 (2021 (*restated) -

12,519,205) to 169,459,584 (2021 (*restated) - 171,154,920) Ordinary shares.

Notes to the Financial Statements

Continued

abrdn Asia Focus plc 85

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

For the year ended 31 July 2022 the assumed conversion for potential Ordinary shares was dilutive to the revenue return

per Ordinary share but non-dilutive to the capital return per Ordinary share (2021 - non-dilutive to the revenue return but

dilutive to the capital return). Where dilution occurs, the net returns are adjusted for interest charges and issue expenses

relating to the CULS (2022 - £714,000; 2021 - £617,000). Total earnings for the period are tested for dilution. Once dilution

has been determined individual revenue and capital earnings are adjusted.

The returns per share figures for 2021 have been restated to reflect the 5:1 sub-division as disclosed in note 14 on page 88.

10. Investments at fair value through profit or loss

2022 2021

£’000 £’000

Opening book cost 346,431 314,306

Opening investment holding gains 194,490 80,161

Opening fair value 540,921 394,467

Analysis of transactions made during the year

Purchases at cost 79,496 83,636

Sales proceeds received (73,252) (85,260)

(Losses)/gains on investments (22,324) 148,078

Closing fair value 524,841 540,921

Closing book cost 377,733 346,431

Closing investment gains 147,108 194,490

Closing fair value 524,841 540,921

2022 2021

£’000 £’000

Investments listed on an overseas investment exchange 510,984 529,261

Investments listed on the UK investment exchange 13,857 11,660

524,841 540,921

The Company received £73,252,000 (2021 - £85,260,000) from investments sold in the period. The book cost of these

investments when they were purchased was £48,194,000 (2021 - £51,511,000). These investments have been revalued

over time and until they were sold any unrealised gains/losses were included in the fair value of the investments.

86 abrdn Asia Focus plc

Transaction costs. During the year expenses were incurred in acquiring or disposing of investments classified as fair value

through profit or loss. These have been expensed through capital and are included within (losses)/gains on investments in

the Statement of Comprehensive Income. The total costs were as follows:

2022 2021

£’000 £’000

Purchases 91 173

Sales 147 152

238 325

The above transaction costs are calculated in line with the AIC SORP. The transaction costs in the Company’s Key

Information Document are calculated on a different basis and in line with the PRIIPs regulations.

11. Debtors: amounts falling due within one year

2022 2021

£’000 £’000

Amounts due from brokers 280 4,060

Other debtors 766 418

Prepayments and accrued income 418 629

1,464 5,107

None of the above amounts is past their due date or impaired (2021 – same).

12. Creditors

2022 2021

Amounts falling due within one year £’000 £’000

Amounts due to brokers - 1,997

Other creditors 2,864 1,425

2,864 3,422

Notes to the Financial Statements

Continued

abrdn Asia Focus plc 87

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

13. Non-current liabilities

2022 2021

Number of Liability Equity Number of Liability Equity

units component component units component component

(a) CULS £’000 £’000 £’000 £’000 £’000 £’000

2.25% Convertible Unsecured Loan

Stock 2025

Balance at beginning of year 36,658 35,708 1,057 36,694 35,497 1,057

Conversion of 2.25% CULS 2025 (16) (16) - (36) (36) -

Notional interest on CULS transferred

to revenue reserve

- 154 - - 153 -

Amortisation and issue expenses - 94 - - 94 -

Balance at end of year 36,642 35,940 1,057 36,658 35,708 1,057

The 2.25% Convertible Unsecured Loan Stock 2025 (“CULS”) can be converted at the election of holders into Ordinary

shares during the months of May and November each year throughout their life, commencing 30 November 2018 to

31 May 2025 at a rate of 1 Ordinary share for every 293.0p (2021 – 1,465.0p) nominal of CULS. Interest is payable on

the CULS on 31 May and 30 November each year, commencing on 30 November 2018. With effect from 1 August

2021, the interest will be charged 25% to revenue and 75% to capital (previously 100% to revenue), in line with the

Board’s expected long-term split of returns from the investment portfolio of the Company.

The CULS has been constituted as an unsecured subordinated obligation of the Company by the Trust Deed

between the Company and the Trustee, the Law Debenture Trust Corporation p.l.c., dated 23 May 2018. The Trust

Deed details the 2025 CULS holders’ rights and the Company’s obligations to the CULS holders and the Trustee

oversees the operation of the Trust Deed. In the event of a winding-up of the Company the rights and claims of the

Trustee and CULS holders would be subordinate to the claims of all creditors in respect of the Company’s secured

and unsecured borrowings, under the terms of the Trust Deed.

In 2022 the Company received elections from CULS holders to convert £15,343 (2021 – £36,476) nominal amount of

CULS into 5,211 (2021 – 2,475) Ordinary shares.

The fair value of the 2025 CULS at 31 July 2022 was £37,009,000 (2021 - £37,941,000).

2022 2021

(b) Loan Note £’000 £’000

3.05% Senior Unsecured Loan Note 2035 30,000 30,000

Unamortised Loan Note issue expenses (108) (114)

29,892 29,886

88 abrdn Asia Focus plc

On 1 December 2020 the Company issued £30,000,000 of a 15 year loan note at a fixed rate of 3.05%. Interest is

payable in half yearly instalments in June and December and the Loan Note is due to be redeemed at par on 1

December 2035. The issue costs of £118,000 will be amortised over the life of the loan note. The Company has

complied with the Note Purchase Agreement that the ratio of total borrowings to adjusted net assets will not exceed

0.20 to 1.00, that the ratio of total borrowings to adjusted net liquid assets will not exceed 0.60 to 1.00, that net tangible

assets will not be less than £225,000,000 and that the minimum number of listed assets will not be less than 40.

The fair value of the Senior Unsecured Loan Note as at 31 July 2022 was £28,804,000 (2021 - £30,713,000), the value

being based on a comparable quoted debt security.

2022 2021

£’000 £’000

14. Called up share capital

2022 2021

£’000 £’000

Allotted, called-up and fully paid

Ordinary shares of 5p (2021 - 25p) 7,848 7,848

Treasury shares 2,587 2,587

10,435 10,435

Ordinary Treasury Total

shares shares shares

Number Number Number

At 31 July 2021

156,948,420 51,744,590 208,693,010

Conversion of CULS 5,211 - 5,211

At 31 July 2022 156,953,631 51,744,590 208,698,221

The prior year has been restated to reflect the 5:1 sub-division as disclosed below.

On 7 February 2022 there was a sub-division of each existing Ordinary 25p share into five Ordinary shares of 5p each.

During the year no Ordinary shares of 5p were purchased (2021 - 1,055,000 Ordinary shares of 25p purchased) by the

Company at a total cost of £nil (2021 - total cost of £11,473,000), all of which were held in treasury. At the year end

51,744,590 (2021 (*restated) - 51,744,590) shares were held in treasury, which represents 24.79% (2021 - 24.79%) of the

Company’s total issued share capital at 31 July 2022. During the year there were a further 5,211 (2021 - 2,475) Ordinary

shares issued as a result of CULS conversions.

Since the year end no further Ordinary shares of 5p have been purchased by the Company.

Notes to the Financial Statements

Continued

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15. Reserves

2021

2022 (*Restated)

£’000 £’000

Capital reserve

At 31 July 2021 (*restated – see note 22) 401,124 268,750

Movement in investment holdings fair value (47,382) 114,329

Gains on realisation of investments at fair value 25,058 33,749

Purchase of own shares to treasury – (11,473)

Indian capital gains tax rebate on sales – 101

Movement in deferred liability on Indian capital gains 947 (3,631)

Withholding tax charged on capital dividends (71) (26)

Foreign exchange movement 72 (425)

Capital expenses (*restated – see note 22) (4,298) (250)

At 31 July 2022 375,450 401,124

The capital reserve includes investment holding gains amounting to £147,108,000 (2021 – £194,490,000) as disclosed in

note 10. The above split in capital reserve is shown in accordance with provisions of the Statement of Recommended

Practice ‘Financial Statements Of Investment Trust Companies and Venture Capital Trusts’.

16. Net asset value per share

2022 2021

Basic

Net assets attributable £464,396,000 £487,958,000

Number of shares in issue

156,953,631 156,948,420

Net asset value per share

295.88p 310.90p

2022 2021

Diluted

Net assets attributable £500,336,000 £523,666,000

Number of shares in issue

169,459,574 169,459,600

Net asset value per share

295.25p 309.02p

Calculated excluding shares held in treasury.

Figures for 2021 have been restated to reflect the 5:1 sub-division as disclosed in note 14 on page 88.

The diluted net asset value per share has been calculated on the assumption that £36,642,412 (2021 – £36,657,755) 2.25% Convertible Unsecured Loan Stock 2025

(“CULS”) is converted at 293.0p (2021 – 1,465.0p) per share, giving a total of 169,459,574 (2021 (*restated) – 169,459,600) shares. Where dilution occurs, the net

assets are adjusted for items relating to the CULS.

90 abrdn Asia Focus plc

Net asset value per share - debt converted. In accordance with the Company’s understanding of the current methodology

adopted by the AIC, convertible financial instruments are deemed to be “in the money” if the cum income net asset value

(“NAV”) exceeds the conversion price of 293.0p (2021 - 1,465.0p) per share. In such circumstances a net asset value is

produced and disclosed assuming the convertible debt is fully converted. At 31 July 2022 the cum income NAV was 295.88p

(2021 (*restated) - 310.90p) and thus the CULS were ‘in the money’ (2021 - same).

17. Analysis of changes in net debt

At At

31 July Currency Cash Non-cash 31 July

2021 differences flows movements 2022

£’000 £’000 £’000 £’000 £’000

Cash and short term deposits 14,577 72 (5,178) - 9,471

Debt due after more than one year (69,225) - - 709 (68,516)

(54,648) 72 (5,178) 709 (59,045)

At At

31 July Currency Cash Non-cash 31 July

2020 differences flows movements 2021

£’000 £’000 £’000 £’000 £’000

Cash and short term deposits 10,919 (425) 4,083 - 14,577

Debt due within one year (11,200) - 11,200 - -

Debt due after more than one year (35,497) - (29,882) (3,846) (69,225)

(35,778) (425) (14,599) (3,846) (54,648)

A statement reconciling the movement in net funds to the net cash flow has not been presented as there are no

differences from the above analysis.

18. Related party transactions and transactions with the Manager

Fees payable during the year to the Directors and their interests in shares of the Company are considered to be related

party transactions and are disclosed within the Directors’ Remuneration Report on pages 56 to 58. The balance of fees due

to Directors at the year end was £nil (2021 – £nil).

The Company’s Investment Manager, abrdn Asia, is a wholly-owned subsidiary of abrdn plc, which has been delegated,

under an agreement with aFML, to provide management services to the Company, the terms of which are outlined in

notes 4 and 5 along with details of transactions during the year and balances outstanding at the year end. Up until 27

November 2020 Mr Young, a director of abrdn Asia, was the Alternate Director for Mr Martin Gilbert. Up until 1 December

2020 Mr Yea was a Director of the Company as well as being a director of the Company’s registrar, Equiniti Limited.

Notes to the Financial Statements

Continued

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19. Financial instruments

Risk management. The Company’s investment activities expose it to various types of financial risk associated with the

financial instruments and markets in which it invests. The Company’s financial instruments comprise equities and other

investments, cash balances, loans and debtors and creditors that arise directly from its operations; for example, in respect

of sales and purchases awaiting settlement, and debtors for accrued income.

The Board has delegated the risk management function to aFML under the terms of its management agreement with

aFML (further details of which are included under note 4 and in the Directors’ Report) however, it remains responsible for

the risk and control framework and operation of third parties. The Board regularly reviews and agrees policies for

managing each of the key financial risks identified with the Manager. The types of risk and the Manager’s approach to the

management of each type of risk, are summarised below. Such approach has been applied throughout the year and has

not changed since the previous accounting period. The numerical disclosures exclude short-term debtors and creditors.

Risk management framework. The directors of aFML collectively assume responsibility for aFML’s obligations under the

AIFMD including reviewing investment performance and monitoring the Company’s risk profile during the year.

aFML is a fully integrated member of the abrdn Group (“the Group”), which provides a variety of services and support to

aFML in the conduct of its business activities, including in the oversight of the risk management framework for the

Company. The AIFM has delegated the day to day administration of the investment policy to abrdn Asia, which is

responsible for ensuring that the Company is managed within the terms of its investment guidelines and the limits set out in

its pre-investment disclosures to investors (details of which can be found on the Company’s website). The AIFM has

retained responsibility for monitoring and oversight of investment performance, product risk and regulatory and

operational risk for the Company.

The Group’s Internal Audit Department is independent of the Risk Division and reports directly to the Group CEO and to the

Audit Committee of the Group’s Board of Directors. The Internal Audit Department is responsible for providing an

independent assessment of the Group’s control environment.

The Manager conducts its risk oversight function through the operation of the Group’s risk management processes and

systems which are embedded within the Group’s operations. The Group’s Risk Division supports management in the

identification and mitigation of risks and provides independent monitoring of the business. The Division includes

Compliance, Business Risk, Market Risk, Risk Management and Legal. The team is headed up by the Group’s Chief Risk

Officer, who reports to the CEO of the Group. The Risk Division achieves its objective through embedding the Risk

Management Framework throughout the organisation using the Group’s operational risk management system (“SHIELD”).

The Group’s corporate governance structure is supported by several committees to assist the board of directors, its

subsidiaries and the Company to fulfil their roles and responsibilities. The Group’s Risk Division is represented on all

committees, with the exception of those committees that deal with investment recommendations. The specific goals and

guidelines on the functioning of those committees are described in the committees’ terms of reference.

Risk management. The main risks the Company faces from these financial instruments are (i) market risk (comprising

interest rate, foreign currency and other price risk), (ii) liquidity risk and (iii) credit risk.

Market risk. The fair value of or future cash flows from a financial instrument held by the Company may fluctuate

because of changes in market prices. This market risk comprises three elements - interest rate risk, currency risk

and other price risk.

92 abrdn Asia Focus plc

Interest rate risk. Interest rate movements may affect:

- the level of income receivable on cash deposits;

- valuation of debt securities in the portfolio.

Management of the risk. The possible effects on fair value and cash flows that could arise as a result of changes in interest

rates are taken into account when making investment and borrowing decisions. When drawn down, interest rates are

fixed on borrowings.

Interest rate risk profile. The interest rate risk profile of the Company’s financial assets and liabilities, excluding equity

holdings which are all non-interest bearing, at the reporting date was as follows:

Weighted average Weighted

period for which average Fixed Floating

rate is fixed interest rate rate rate

At 31 July 2022 Years % £’000 £’000

Assets

Sterling - - - 8,585

Taiwan Dollar - - - 458

Vietnam Dong - - - 371

Sri Lanka Rupee - - - 32

Pakistan Rupee - - - 11

Indian Rupee - - - 9

Thailand Baht - - - 3

Malaysian Ringgit - - - 2

- - - 9,471

Liabilities

2.25% Convertible Unsecured Loan Stock 2025 2.83 2.3 35,940 -

3.05% Senior Unsecured Loan Note 2035 13.35 3.1 29,892 -

- - 65,832 -

Notes to the Financial Statements

Continued

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Weighted average Weighted

period for which average Fixed Floating

rate is fixed interest rate rate rate

At 31 July 2021 Years % £’000 £’000

Assets

Sterling - - - 13,712

Indian Rupee - - - 476

Pakistan Rupee - - - 14

Thailand Baht - - - 141

Vietnam Dong - - - 2

Malaysian Ringgit - - - 2

Taiwan Dollar - - - 230

- - - 14,577

Liabilities

2.25% Convertible Unsecured Loan Stock 2025 3.83 3.1 35,708 -

3.05% Senior Unsecured Loan Note 2035 14.35 3.1 29,886 -

- - 65,594 -

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

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

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

Interest rate sensitivity. Movements in interest rates would not significantly affect net assets attributable to the Company’s

shareholders and total return.

Foreign currency risk. Most of the Company’s investment portfolio is invested in overseas securities and the Statement of

Financial Position, therefore, can be significantly affected by movements in foreign exchange rates.

Management of the risk. It is not the Company’s policy to hedge this risk on a continuing basis but the Company may, from

time to time, match specific overseas investment with foreign currency borrowings.

The revenue account is subject to currency fluctuations arising on dividends receivable in foreign currencies and, indirectly,

due to the impact of foreign exchange rates upon the profits of investee companies. It is not the Company’s policy to

hedge this currency risk but the Board keeps under review the currency returns in both capital and income.

94 abrdn Asia Focus plc

Foreign currency risk exposure by currency of denomination:

31 July 2022 31 July 2021

Net monetary Total Net monetary Total

Overseas assets/ currency Overseas assets/ currency

investments (liabilities) exposure Investments (liabilities) exposure

£’000 £’000 £’000 £’000 £’000 £’000

Australian Dollar 7,940 - 7,940 - - -

Chinese Renminbi 15,756 - 15,756 4,619 - 4,619

Danish Krona 12,352 - 12,352 10,157 - 10,157

Hong Kong Dollar 64,947 - 64,947 57,636 - 57,636

Indian Rupee 82,097 9 82,106 90,186 476 90,662

Indonesian Rupiah 55,431 - 55,431 43,412 - 43,412

Korean Won 31,429 - 31,429 34,240 - 34,240

Malaysian Ringgit 35,339 2 35,341 29,106 2 29,108

Taiwan Dollar 56,994 458 57,452 78,501 230 78,731

New Zealand Dollar 14,061 - 14,061 17,054 - 17,054

Pakistan Rupee - 11 11 927 14 941

Philippine Peso 19,825 - 19,825 21,921 - 21,921

Singapore Dollar 41,585 - 41,585 55,283 - 55,283

Sri Lankan Rupee 7,640 32 7,672 13,942 - 13,942

Thailand Baht 35,114 3 35,117 44,104 141 44,245

Vietnamese Dong 30,474 371 30,845 28,173 2 28,175

510,984 886 511,870 529,261 865 530,126

Sterling 13,857 (57,247) (43,390) 11,660 (51,882) (40,222)

Total 524,841 (56,361) 468,480 540,921 (51,017) 489,904

Foreign currency sensitivity. The Company’s foreign currency financial instruments are in the form of equity investments,

fixed interest investments, cash and bank loans. The sensitivity of the former has been included within other price risk

sensitivity analysis so as to show the overall level of exposure. Due consideration is paid to foreign currency risk throughout

the investment process.

Other price risk. Other price risks (ie changes in market prices other than those arising from interest rate or currency risk)

may affect the value of the quoted investments.

Notes to the Financial Statements

Continued

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Investment in Far East equities or those of companies that derive significant revenue or profit from the Far East involves a

greater degree of risk than that usually associated with investment in the securities in major securities markets. The

securities that the Company owns may be considered speculative because of this higher degree of risk. It is the Board’s

policy to hold an appropriate spread of investments in the portfolio in order to reduce the risk arising from factors specific

to a particular country or sector. Both the allocation of assets and the stock selection process, as detailed on pages 106 to

108, act to reduce market risk. The Manager actively monitors market prices throughout the year and reports to the Board,

which meets regularly in order to review investment strategy. The investments held by the Company are listed on various

stock exchanges worldwide.

Other price risk sensitivity. If market prices at the reporting date had been 20% (2021 - 20%) higher or lower while all other

variables remained constant, the return attributable to Ordinary shareholders for the year ended 31 July 2022 would have

increased/(decreased) by £104,968,000 (2021 - increased/(decreased) by £108,184,000) and equity reserves would have

increased/(decreased) by the same amount.

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

financial liabilities.

Management of the risk. The Board imposes borrowing limits to ensure gearing levels are appropriate to market conditions

and reviews these on a regular basis. Gearing comprises both senior unsecured loan notes and convertible unsecured loan

stock. The Board has imposed a maximum gearing level, measured on the most stringent basis of calculation after netting

off cash equivalents, of 25%. Details of borrowings at the 31 July 2022 are shown in note 13.

Liquidity risk is not considered to be significant as the Company’s assets comprise mainly readily realisable securities, which

can be sold to meet funding commitments if necessary. Details of the Board’s policy on gearing are shown in the

investment policy section on page 12.

Liquidity risk exposure. At 31 July 2022 the Company had borrowings in the form of the £36,642,000 (2021 – £36,658,000)

nominal of 2.25% Convertible Unsecured Loan Stock 2025 and £29,892,000 (2021 – £29,886,000) in the form of the 3.05%

Senior Unsecured Loan Note 2035.

At 31 July 2022 the amortised cost of the Company’s 3.05% Senior Unsecured Loan Note 2035 was £29,892,000 (2021 –

£29,886,000). The maximum exposure at 31 July 2022 was £29,892,000 (2021 – £29,886,000) and the minimum exposure at

31 July 2022 was £29,886,000 (2021 – £29,886,000).

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

Due

Due between

Expected within 3 months Due after

cashflows 3 months and 1 year 1 year

31 July 2022 £’000 £’000 £’000 £’000

2.25% Convertible Unsecured Loan Stock 2025 38,282 – 827 37,455

3.05% Senior Unsecured Loan Note 2035 42,353 – 915 41,438

80,635 – 1,742 78,893

96 abrdn Asia Focus plc

Due

Due between

Expected within 3 months Due after

cashflows 3 months and 1 year 1 year

31 July 2021 £’000 £’000 £’000 £’000

2.25% Convertible Unsecured Loan Stock 2025 39,692 – 826 38,866

3.05% Senior Unsecured Loan Note 2035 43,268 – 915 42,353

82,960 – 1,741 81,219

Credit risk. This is the risk of failure of the counterparty to a transaction to discharge its obligations under that transaction

that could result in the Company suffering a loss.

Management of the risk. Investment transactions are carried out with a large number of brokers, whose credit-standing is

reviewed periodically by the Investment Manager, and limits are set on the amount that may be due from any one broker.

Settlement of investment transactions are also done on a delivery versus payment basis;

– the risk of counterparty exposure due to failed trades causing a loss to the Company is mitigated by the review of failed

trade reports on a monthly basis. In addition, the third party administrator carries out a stock reconciliation to Custodian

records on a monthly basis to ensure discrepancies are picked up on a timely basis. The Manager’s compliance

department carries out periodic reviews of the Custodian’s operations and reports its finding to the Manager’s risk

management committee. This review will also include checks on the maintenance and security of investments held; and

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

It is the Manager’s policy to trade only with A- and above (Long Term rated) and A-1/P-1 (Short Term rated)

counterparties.

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

Credit risk exposure. In summary, compared to the amounts in the Statement of Financial Position, the maximum exposure

to credit risk at 31 July was as follows:

2022 2021

Statement Statement

of Financial Maximum of Financial Maximum

Position exposure Position exposure

Current assets £’000 £’000 £’000 £’000

Debtors and prepayments 1,464 1,464 5,107 5,107

Cash and short term deposits 9,471 9,471 14,577 14,577

10,935 10,935 19,684 19,684

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

Notes to the Financial Statements

Continued

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Fair values of financial assets and financial liabilities. The fair value of the loan note has been calculated at £28,804,000 as at

31 July 2022 (2021 – £30,713,000) compared to a value at amortised cost in the financial statements of £29,892,000 (2021 –

£29,886,000) (note 13). The fair value of the loan note is determined by aggregating the expected future cash flows for

that loan discounted at a rate comprising the borrower’s margin plus an average of market rates applicable to loans of a

similar period of time and currency. Investments held at fair value through profit or loss are valued at their quoted bid prices

which equate to their fair values. The Directors are of the opinion that the other financial assets and liabilities, excluding

CULS which are held at amortised cost, are stated at fair value in the Statement of Financial Position and considered that

this approximates to the carrying amount.

20. Fair value hierarchy

FRS 102 requires an entity to classify fair value measurements using a fair value hierarchy that reflects the significance of

the inputs used in making the measurements.

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

measurement date.

Level 2: inputs other than quoted prices included within Level 1 that are observable (ie developed using market data) for

the asset or liability, either directly or indirectly.

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

The financial assets measured at fair value in the Statement of Financial Position are grouped into the fair value hierarchy

at 31 July 2022 as follows:

Level 1 Level 2 Level 3 Total

As at 31 July 2022 Note £’000 £’000 £’000 £’000

Financial assets and liabilities at fair value through profit or loss

Quoted equities a) 511,540 – 9,664 521,204

Quoted preference shares b) – 3,203 – 3,203

Quoted warrants b) – 434 – 434

Net fair value 511,540 3,637 9,664 524,841

Level 1 Level 2 Level 3 Total

As at 31 July 2021 Note £’000 £’000 £’000 £’000

Financial assets and liabilities at fair value through profit or loss

Quoted equities a) 536,934 – – 536,934

Quoted preference shares b) – 3,652 – 3,652

Quoted warrants b) – 335 – 335

Net fair value 536,934 3,987 – 540,921

98 abrdn Asia Focus plc

a) Quoted equities. The fair value of the Company’s investments in quoted equities has been determined by reference to

their quoted bid prices at the reporting date. Quoted equities included in Fair Value Level 1 are actively traded on

recognised stock exchanges.

b) Quoted preference shares and quoted warrants. The fair value of the Company’s investments in quoted preference

shares and quoted warrants has been determined by reference to their quoted bid prices at the reporting date.

Investments categorised as Level 2 are not considered to trade as actively as Level 1 assets.

Year ended Year ended

31 July 2022 31 July 2021

Level 3 Financial assets at fair value through profit or loss £’000 £’000

Opening fair value – –

Transfers from level 1 9,664 –

Total gains or losses included in losses on investments in the Statement of

Comprehensive Income:

–

– assets disposed of during the year – –

– assets held at the end of the year – –

Closing balance 9,664 –

During the year, the Company changed the basis for valuing its holding in Cebu Holdings. The investee company has

received regulatory approval to merge with another company, Ayala Land, and new shares will be issued in Ayala Land in

the near future to satisfy the transaction by a share conversion. The valuation methodology employed is based on the

underlying quoted price of Ayala Land and the implied conversion ratio.

21. Capital management policies and procedures

The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the return

to shareholders through the optimisation of the debt (comprising CULS and Loan Note) and equity balance.

The Company’s capital comprises the following:

2022 2021

£’000 £’000

Equity

Equity share capital 10,435 10,435

Reserves 453,961 477,523

Liabilities

3.05% Senior Unsecured Loan Note 2035 29,892 29,886

2.25% Convertible Unsecured Loan Stock 2025 35,940 35,708

530,228 553,552

Notes to the Financial Statements

Continued

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The Board’s policy is to utilise gearing when the Manager believes it appropriate to do so, up to a maximum of 25% geared

at the time of drawdown. Gearing for this purpose is defined as the excess amount above shareholders’ funds of total

assets (including net current assets/liabilities) less cash/cash equivalents, expressed as a percentage of the shareholders’

funds. If the amount so calculated is negative, this is shown as a ‘net cash’ position.

2022 2021

£’000 £’000

Investments at fair value through profit or loss 524,841 540,921

Current assets excluding cash and cash equivalents 1,184 1,047

Current liabilities (2,864) (1,425)

Deferred tax liability on Indian capital gains (2,684) (3,631)

520,477 536,912

Net assets 464,396 487,958

Gearing (%) 12.1 10.0

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

- the planned level of gearing which takes account of the Manager’s views on the market;

- the level of equity shares in issue;

- the extent to which revenue in excess of that which is required to be distributed should be retained.

The Company’s objectives, policies and processes for managing capital are unchanged from the preceding

accounting period.

The Company does not have any externally imposed capital requirements.

100 abrdn Asia Focus plc

22. Prior year restatement

The Statement of Comprehensive Income, the Statement of Financial Position and the Statement of Changes in Equity for

the year ended 31 July 2021 have been restated to reallocate costs of £250,000 incurred during that period in relation to

the long-term investment strategy review from revenue to capital. This treatment was changed to align to the

presentation in accordance with guidance provided by the AIC’s SORP as disclosed in the 2021 annual report as these

costs were adjudged by the Board to have been incurred, wholly or partly, in connection with the maintenance or

enhancement of the value of the investments in the portfolio.

Consequently, in the Statement of Comprehensive Income for the year ended 31 July 2021, administrative expenses

allocated to revenue have decreased from £1,386,000 to £1,136,000 and administrative expenses allocated to capital

have increased from £nil to £250,000. In the Statement of Financial Position as at 31 July 2021 the capital reserve has

decreased from £401,374,000 to £401,124,000 and the revenue reserve has increased from £12,618,000 to £12,868,000. In

the Statement of Changes in Equity for the year ended 31 July 2021, the return after taxation allocated to the capital

reserve has decreased from a gain of £144,097,000 to a gain of £143,847,000 and the return after taxation allocated to the

revenue reserve has increased from £2,386,000 to £2,636,000. In note 7(b) (i) the revenue return before taxation has

increased from £2,936,000 to £3,186,000 and the capital return before taxation has decreased from £147,653,000 to

£147,403,000 (ii) the revenue return multiplied by the standard rate of corporation tax of 19% has increased from £558,000

to £605,000 and the capita return multiplied by the standard rate of corporation tax of 19% has decreased from

£28,054,000 to £28,007,000 and (iii) the movement in unutilised management expenses allocated to revenue has

decreased from £916,000 to £869,000 and the movement in unutilised management expenses allocated to capital has

increased from £nil to £47,000.

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. 2022 has been presented on a diluted basis as the Convertible Unsecured Loan Stock (“CULS”) is “in the money”

(2021 - same).

As at

As at 31 July 2021

31 July 2022 (*Restated)

NAV per Ordinary share (p) a 295.25 309.02

Share price (p) b 254.00 266.00

Discount (a-b)/a 14.0% 13.9%

* Rates for 2021 have been restated to reflect the 5:1 sub division as disclosed in note14.

Dividend cover

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

Year ended

Year ended 31 July 2021

31 July 2022 (*Restated)

Revenue return per Ordinary share (p) a 9.34 1.66

Dividends declared (p) b 8.00 3.20

Dividend cover a/b 1.17 0.52

* Rates for 2021 have been restated to reflect the 5:1 sub division as disclosed in note14.

Alternative Performance Measures

102 abrdn Asia Focus plc

Net gearing

Net gearing measures the total borrowings less cash and cash equivalents divided by shareholders’ funds, expressed as a percentage.

Under AIC reporting guidance cash and cash equivalents includes net amounts due from and to brokers at the year end as well as

cash and short term deposits.

Year ended Year ended

31 July 2022 31 July 2021

Borrowings (£’000) a 65,832 65,594

Cash and short term deposits (£’000) b 9,471 14,577

Amounts due to brokers (£’000) c - 1,997

Amounts due from brokers (£’000) d 280 4,060

Shareholders’ funds (£’000) e 464,396 487,958

Net gearing (a-b+c-d)/e 12.1% 10.0%

Ongoing charges

The ongoing charges ratio has been calculated in accordance with guidance issued by the AIC as the total of investment

management fees and administrative expenses and expressed as a percentage of the average published daily net asset values with

debt at fair value throughout the year.

2022 2021

Investment management fees (£’000) 3,204 3,570

Administrative expenses (£’000) 1,561 1,386

Less: non-recurring charges

(£’000) (428) (297)

Ongoing charges (£’000) 4,337 4,659

Average net assets (£’000) 490,446 422,440

Ongoing charges ratio 0.88% 1.10%

Professional fees comprising corporate and legal fees associated with proposals approved by shareholders on 27 January 2022.

The ongoing charges ratio provided in the Company’s Key Information Document is calculated in line with the PRIIPs regulations, which

includes finance costs and transaction charges.

Alternative Performance Measures

Continued

abrdn Asia Focus plc 103

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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 2022 NAV Price

Opening at 1 August 2021 a 309.02p 266.00p

Closing at 31 July 2022 b 295.25p 254.00p

Price movements c=(b/a)-1 -4.5% -4.5%

Dividend reinvestment

d 2.5% 2.8%

Total return c+d –2.0% –1.7%

Year ended 31 July 2021 (*Restated) NAV Price

Opening at 1 August 2020 a 221.29p 196.00p

Closing at 31 July 2021 b 309.02p 266.00p

Price movements c=(b/a)-1 39.6% 35.7%

Dividend reinvestment

d 2.3% 2.5%

Total return c+d +41.9% +38.2%

* Rates for 2021 have been restated to reflect the 5:1 sub division as disclosed in note14.

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.

104 abrdn Asia Focus plc

Corporate

Information

The Company’s Investment

Manager is abrdn Asia

Limited, a wholly owned

subsidiary of abrdn plc

which has assets under

management and

administration of

£508 billion as at

30 June 2022

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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

Hugh Young

Chairman, Asia Pacific Region

BA in Politics from Exeter University. Started investment

career in 1980. In charge of abrdn Asia’s Far East funds

since 1985.

Gabriel Sacks

Investment Director, Equities Asia

Chartered Financial Analyst, MA in Land Economy from

Cambridge University. Joined abrdn in 2008 as part of the

London-based Global Emerging Markets Equities team

and transferred to Equities Asia in 2018.

abrdn

Worldwide, the Manager has a combined £508 billion (as

at 30 June 2022) in assets under management and

administration for a range of clients, including individuals

and institutions, through mutual and segregated funds.

abrdn has its headquarters in Edinburgh with principal

offices in Aberdeen, London, Singapore, Philadelphia,

Bangkok, Edinburgh, Hong Kong, Luxembourg, Jersey, Sao

Paulo, Stockholm, Sydney, Taipei, and Tokyo

Flavia Cheong

Head of Equities – Asia Pacific, Asian Equities

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.

Neil Sun

Investment Manager, Equities Asia

Joined abrdn’s Asian Equities team in 2018 having

previously worked as a Research Analyst at Deutsche

Bank and prior to that JPMorgan Asset Management. Neil

has passed level II of the CFA Program

Information about the Mana

106 abrdn Asia Focus plc

As active equity investors, the Investment Manager

believes that deep fundamental research, responsible

stewardship with ESG, 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.

ESG assessment and corporate engagement enhance

returns. 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 that this approach can

mitigate risks and enhance returns for its clients, as

companies with robust ESG practices tend to enjoy long-

term financial benefits.

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.

Our Research Drives Performance

The Investment Process

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Research

The Investment Manager has developed a proprietary

research platform used by all its equity, credit and ESG

teams, giving instant access to research globally. The

research is focused on four key areas:

· Foundations – the Investment Manager analyses how

the company makes money, the attractiveness and

characteristics of its industry, and the strength and

sustainability of the economic ‘moat’. This includes a

thorough evaluation of the environmental, social and

governance (ESG) risks and opportunities of the

company. Face-to-face meetings anchor how the

Investment Manager understands and challenges the

key elements of a company’s fundamentals: the

evolution and growth of the business; the sustainable

competitive advantage; management’s track record of

execution and managing risk; past treatment of minority

shareholders; the balance sheet and financials; and ESG

risks and opportunities of the company in question.

· Dynamics – the shorter- and longer-term dynamics of

the business that will be the key determinants of its

corporate value over time. Specifically the Investment

Manager looks for changes in the factors driving the

market price of a stock, identifying the drivers that the

wider market may not be pricing in. Understanding the

dynamics behind these drivers allows the Investment

Manager to focus on the factors that will drive

shareholder returns from a particular stock.

· Financials and Valuation – the Investment Manager

examines the strengths and weaknesses of the

company’s financials including a thorough analysis of

the balance sheet, cash flow and accounting, the

market’s perception of the company’s future prospects

and value, and its own forecasts of future financials and

how the stock should be priced. This includes significant

focus on the dividend paying capability of each

business, the potential for dividend growth and the

sustainability of the payout.

· Investment insight and risk – the Investment Manager

articulates its investment thesis, explaining how it views a

stock differently from the market consensus and how

the Investment Manager expects to crystallise value

from the holding over time.

Integrated ESG Analysis

The detailed analysis of the Investment Manager’s

embedded ESG process is contained on pages 109 to 111.

Idea Generation

Research coverage is organised on a sector basis, with

analysts developing deep expertise which enables them

to identify investment opportunities through fundamental

knowledge at both the sector and stock level. The

Investment Manager also uses quantitative screening

tools and risk tools to help us identify interesting stock

opportunities and the most appropriate coverage

universe.

Peer Review

Having a common investment language facilitates

effective communication and comparison of investment

ideas through peer review which is a critical part of the

process. All investment ideas are subject to rigorous peer

review, both at regular meetings and on an ad hoc basis –

and all team members debate stocks, meet companies

from all industries, and given their dual fund manager /

analyst role are incentivised to fully participate in the

entire process.

Portfolio Construction/Risk Controls

Portfolios are built from the bottom up, prioritising high

conviction stock ideas in a risk aware framework, giving

clients access to the best investment ideas. Portfolio risk

budgets are derived from clients’ investment objectives

and required outcomes. Peer review is an essential

component of the construction process with dedicated

portfolio construction pods (smaller dedicated groups of

senior team members that have clear accountability for

the strategy) debating stock holdings, portfolio structure

and risk profiles.

108 abrdn Asia Focus plc

As an active equity investor the Investment Manager has

adopted a principled portfolio construction process which

actively takes appropriate and intentional risk to drive

return. The largest component of the active risk will be

stock-specific risk, along with appropriate levels of

diversification. Risk systems monitor and analyse risk

exposures across multiple perspectives breaking down

the risk within the portfolio by industry and country factors,

by currency and macro factors, and by other

fundamental factors (quality, momentum, etc.).

Consideration of risk starts at the stock level with the

rigorous company research helping the Investment

Manager to avoid stock specific errors. The Investment

Manager ensures that any sector or country risk is

appropriately sized and managed relative to the overall

objectives of the Company.

Operational Risk and Independent

Governance Oversight

Risk management is an integral part of the Investment

Manager’s management process and portfolios are

formally reviewed on a regular basis with the Investment

Manager’s Global Head of Equities, the Portfolio Managers,

the Investment Manager’s Investment Governance &

Oversight Team (IGO) and members of the Manager’s

Investment Risk Team. This third party oversight both

monitors portfolio risk and also oversees operational risk to

ensure client objectives are met.

The Investment Process

Continued

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Environmental, Social and Governance

(“ESG”) Engagement

The Board is very conscious of the risks emanating from

increased ESG challenges. The recent scrutiny by western

governments of human rights violations in Xinjiang is an

example of the need for continued vigilance regarding the

supply chain exposure of investee companies and the fair

and humane treatment of workers. Likewise, as climate

change pressures mount, the Board continues to monitor,

through its Investment Manager, the potential risk that

investee companies may fail to keep pace with the

appropriate rates of change and adaption.

Whilst the management of the Company’s investments is

not undertaken with any specific instructions to exclude

certain asset types or classes, the Investment Manager

embeds ESG into the research of each asset class as

part of the investment process. ESG investment is about

active engagement, in the belief that the performance of

assets held around the world can be improved over the

longer term.

What is ESG, and why do we do it?

Environmental, social and governance (ESG)

considerations have been an integral part of the

Investment Manager’s decision-making process for

almost 30 years. The Investment Manager believes that

ESG factors are financially material and can meaningfully

affect a company’s performance. Hence, a company’s

ability to sustainably generate returns for investors

depends on the management of its environmental impact,

its consideration of the interests of society and

stakeholders, and on the way it is governed. By putting

ESG factors at the heart of its investment process, the

Investment Manager aims to generate better outcomes

for the Company’s shareholders. The 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.

At the investment stage, ESG factors and analysis 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.

The Investment Manager is an active owner, voting at

shareholder meetings in a deliberate manner, working

with companies to drive positive change, and engaging

with policymakers on ESG and stewardship matters.

Can we measure it?

There are elements of ESG that can be quantified, for

example the diversity of a board, the carbon footprint of a

company, and the level of employee turnover. While

diversity can be monitored, measuring inclusion is more of

a challenge. Although it is possible to measure the level of

staff turnover, it is more challenging to quantify corporate

culture. Relying on calculable metrics alone would

potentially lead to misleading insights. As active managers,

quantitative and qualitative assessments are blended to

better understand the ESG performance of a company.

The Investment Manager’s analysts consider such factors

in a systematic and globally-applied approach to assess

and compare companies consistently on their ESG

credentials, both regionally and against their peer group.

Some of the key questions asked of companies include:

· How material are ESG issues for this company, and how

are they being addressed?

· What is the quality of this company’s governance,

ownership structure and management?

· Are incentives and key performance indicators aligned

with the company’s strategy and the interests of

shareholders?

ESG En

ement

110 abrdn Asia Focus plc

The questions asked differ from company to company;

the type of questions poised to a bank would be quite

different from those of a semiconductor manufacturing

firm. Having considered the regional universe and peer

group in which the company operates, an ESG score is

assigned ranging from 1 to 5. This proprietary ESG score is

applied to every stock within the Investment Manager’s

investment universe. Refer to the ESG Investment Case

Studies on pages 40 and 41 for further details and

examples of how portfolio companies address their ESG

requirements.

The ESG Scoring System

Having considered the regional universe and peer group in

which a company operates, the Investment Manager

allocates it an ESG score between one and five. This is

applied across every stock covered globally. Examples of

each category and a small sample of the criteria used are

detailed below:

1. Best in class 2. Leader 3. Average 4. Below average 5. Laggard

ESG considerations are

material part of the

company’s core

business strategy

Excellent disclosure

Makes opportunities

from strong ESG risk

management

ESG considerations

not market leading

Disclosure is good, but

not best in class

Governance is

generally very good

ESG risks are considered

as a part of principal

business

Disclosure in line with

regulatory requirements

Governance is generally

good but some minor

concerns

Evidence of some

financially material

controversies

Poor governance or

limited oversight of key

ESG issues

Some issues in treating

minority shareholders

poorly

Many financially

material controversies

Severe governance

concerns

Poor treatment of

minority shareholders

Climate Change

Climate change is one of the most significant challenges of the 21st century and has big implications for investors. The

energy transition is underway in many parts of the world, and policy changes, falling costs of renewable energy, and a

change in public perception are happening at a rapid pace. Assessing the risks and opportunities of climate change is a

core part of the investment process. In particular, the Investment Manager considers:

· Transition risks and opportunities

Governments could take robust climate change mitigation actions to reduce emissions and transition to a low-carbon

economy. This is reflected in targets, policies and regulation and can have a considerable impact on high-emitting

companies.

· Physical risks and opportunities

Insufficient climate change mitigation action will lead to more severe and frequent physical damage. This results in

financial implications, including damage to crops and infrastructure, and the need for physical adaptation such as

flood defences.

The Investment Manager has aligned its approach with that advocated by the investor agenda of the Principles for

Responsible Investment (PRI) – a United Nations-supported initiative to promote responsible investment as a way of

enhancing returns and better managing risk.

PRI provides an intellectual framework to steer the massive transition of financial capital towards low-carbon

opportunities. It also encourages fund managers to demonstrate climate action across four areas: investments;

corporate engagement; investor disclosure; and policy advocacy as explained below:

ESG En

ement

Continued

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Importance of Engagement

The Investment Manager is committed to regular, ongoing engagement with the companies in which it invests, to help to

maintain and enhance 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. Your Company is supported by on-desk ESG analysts, as well as a well-resourced

specialist ESG Investment team. These meetings provide an opportunity to discuss various relevant ESG 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 ESG risks.

ESG engagements are conducted with consideration of the 10 principles of the United Nations Global Compact, and

companies are expected to meet fundamental responsibilities in the areas of human rights, labour, the environment and

anti-corruption.

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.

112 abrdn Asia Focus plc

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.co.uk). Alternatively you can call 0808 500 0040

(free when dialling from a UK landline) for investment

company information.

Twitter: @abrdnTrusts

LinkedIn: abrdn Investment Trusts

AIFMD

The Company has appointed abrdn Fund Managers

Limited as its alternative investment fund manager and

BNP Paribas Trust Corporation UK as its depositary under

the AIFMD. Details of the leverage and risk policies which

the Company is required to have in place under AIFMD are

published in the Company’s PIDD which can be found on

the website asia-focus.co.uk. The KID relating to the

Company and published by the Manager can be found in

the ‘Literature Library’ section of the Company’s website.

The periodic disclosures required to be made by the AIFM

under the AIFMD are set out on page 115.

Website

Further information on abrdn Asia Focus plc can be found

on its own dedicated website: asia-focus.co.uk. This allows

web users to access information on the Company’s share

price performance, capital structure, stock exchange

announcements and monthly reports.

Investor Warning

abrdn has been made aware that some investors may

have received telephone calls from people purporting to

work for abrdn, 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 and any third party

making such offers has no link with abrdn. abrdn does not

‘cold-call’ investors in this way. If you have any doubt over

the veracity of a caller, do not offer any personal

information, end the call and contact our Customer

Services Department using the details below.

The Financial Conduct Authority provides advice with

respect to share fraud and boiler room scams at:

fca.org.uk/consumers/scams.

Keeping You Informed

For internet users, detailed data on the Company,

including price, performance information and a monthly

fact sheet is available from the Trust’s website: asia-

focus.co.uk and the TrustNet website: trustnet.co.uk.

Alternatively direct private investors can call 0808 500 00

40 (free when dialling from a UK landline) for trust

information. Alternatively, internet users may email abrdn

at inv.trusts@abrdn.com or write to abrdn Investment

Trusts, PO Box 11020, Chelmsford, Essex CM99 2DB.

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.

If you have any questions about an investment held

through the abrdn Share Plan, ISA or Investment Plan for

Children, please telephone the Manager’s Customer

Services Department on 0808 500 0040. Alternatively,

email inv.trusts@abrdn.com or write to abrdn Investment

Trusts, PO Box 11020, Chelmsford, Essex CM99 2DB.

Investor Information

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Direct

Investors can buy and sell shares in the Company directly

through a stockbroker or indirectly through a lawyer,

accountant or other professional adviser. Alternatively

shares can be bought directly through the abrdn

Investment Plan for Children, abrdn Share Plan and abrdn

Investment Trusts ISA.

abrdn Investment Plan for Children

abrdn runs an Investment Plan for Children (the “Children’s

Plan”) which covers a number of investment companies

under its management including the Company. Anyone

can invest in the Children’s Plan, including parents,

grandparents and family friends (subject to the eligibility

criteria as stated within the terms and conditions). All

investments are free of dealing charges on the initial

purchase of shares, although investors will suffer the bid-

offer spread, which can, on some occasions, be a

significant amount. Lump sum investments start at £150

per trust, while regular savers may invest from £30 per

month. Investors simply pay Government Stamp Duty

(currently 0.5%) where applicable on entry. Selling costs

are £10 + VAT. There is no restriction on how long an

investor need invest in the Children’s Plan, and regular

savers can stop or suspend participation by instructing

abrdn in writing at any time. In common with other

schemes of this type, all investments are held in nominee

accounts. Investors have full voting and other rights of

share ownership.

abrdn Share Plan

abrdn runs a Share Plan (the “Plan”) through which shares

in the Company can be purchased. There are no dealing

charges on the initial purchase of shares, although

investors will suffer the bid-offer spread, which can, on

some occasions, be a significant amount. Lump sum

investments start at £250, while regular savers may invest

from £100 per month. Investors simply pay Government

Stamp Duty (currently 0.5%) where applicable on entry.

Selling costs are £10 + VAT. There is no restriction on how

long an investor need invest in a Plan, and regular savers

can stop or suspend participation by instructing abrdn in

writing at any time. In common with other schemes of this

type, all investments are held in nominee accounts.

Investors have full voting and other rights of share

ownership.

abrdn Investment Trusts ISA

abrdn operates an Investment Trust ISA (“ISA”) through

which an investment may be made of up to £20,000 in the

tax year 2022/2023.

There are no brokerage or initial charges for the ISA,

although investors will suffer the bid-offer spread, which

can, on some occasions, be a significant amount. Investors

only pay Government Stamp Duty (currently 0.5%) on

purchases where applicable. Selling costs are £15 + VAT.

The annual ISA administration charge is £24 + VAT,

calculated annually and applied on 31 March (or the last

business day in March) and collected soon thereafter

either by direct debit or, if there is no valid direct debit

mandate in place, from the available cash in the Plan prior

to the distribution or reinvestment of any income, or,

where there is insufficient cash in the Plan, from the sale of

investments held in the Plan. Investors have full voting and

other rights of share ownership. Under current legislation,

investments in ISAs can grow free of capital gains tax.

abrdn Investment Trusts ISA Transfer

You can choose to transfer previous tax year investments

to the abrdn Investment Trusts ISA which can be invested

in the Company while retaining your ISA wrapper. The

minimum lump sum for an ISA transfer is £1,000 and is

subject to a minimum per trust of £250.

Literature Request Service

For literature and information on the Investment Plan for

Children, Share Plan, ISA or ISA Transfer including

application forms for the Company and the Manager’s

investment trust products, please contact:

abrdn Investment Trust Administration

PO Box 11020

Chelmsford

Essex, CM99 2DB

Telephone:

0808 500 00 40

(free when dialling from a UK landline)

Terms and conditions for the abrdn managed savings

products can also be found under the literature section of

invtrusts.co.uk

114 abrdn Asia Focus plc

Online Dealing details

There are a number of other ways in which you can buy

and hold shares in this investment company.

Online dealing

There are a number of online dealing platforms for private

investors that offer share dealing, ISAs and other means to

invest in the company. Real-time execution-only

stockbroking services allow you to trade online, manage

your portfolio and buy UK listed shares. These sites do not

give advice. Some comparison websites also look at

dealing rates and terms. Some well-known online

providers, which can be found through internet search

engines, include: AJ Bell Youinvest; Barclays Smart

Investor; Charles Stanley Direct; Fidelity; Halifax Share

Dealing; Hargreaves Lansdown; Interactive Investor; Novia;

Transact; Standard Life.

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 Advisors

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 visit

https://register.fca.org.uk

Email:

Suitable for Retail/NMPI Status

The Company’s shares are intended for investors,

primarily in the UK, including retail investors, professionally-

advised private clients and institutional investors who are

seeking exposure to smaller companies in Asia, 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, and intends to

continue to do so for the foreseeable future, in order that

the shares issued by abrdn Asia Focus plc can be

recommended by a financial adviser to ordinary retail

investors in accordance with the FCA’s rules in relation to

non-mainstream pooled investments (NMPIs).

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.

Note

Please remember that past performance is not a guide to

the future. Stock market and currency movements may

cause the value of shares and the income from them to

fall as well as rise and investors may not get back the

amount they originally invested.

As with all equity investments, the value of investment

trusts purchased will immediately be reduced by the

difference between the buying and selling prices of the

shares, the market maker’s spread.

Investors should further bear in mind that the value of

any tax relief will depend on the individual circumstances

of the investor and that tax rates and reliefs, as well

as the tax treatment of ISAs may be changed by

future legislation.

The information on pages 112 to 114 has been approved

for the purposes of Section 21 of the Financial Services

and Markets Act 2000 (as amended by the Financial

Services Act 2012) by Aberdeen Asset Managers Limited

which is authorised and regulated by the Financial

Conduct Authority

Investor Information

Continued

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abrdn and the Company are required to make certain disclosures available to investors in accordance with the

Alternative Investment Fund Managers Directive ('AIFMD'). Those disclosures that are required to be made pre-

investment are included within a pre-investment disclosure document ('PIDD') which can be found on the Company’s

website asia-focus.co.uk. There have been no material changes to the disclosures contained within the PIDD since

January 2022.

The periodic disclosures as required under the AIFMD to investors are made below:

· Information on the investment strategy, geographic and sector investment focus and principal stock exposures are

included in the Strategic Report.

· None of the Company’s assets are subject to special arrangements arising from their illiquid nature.

· The Strategic Report, note 18 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, Aberdeen Asset Management PLC on request (see contact details on page 112) and the numerical

remuneration in the disclosures in respect of the AIFM’s reporting period for the year ended 31 December 2021 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 2022 1.23:1 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 above information above has been approved for the purposes of Section 21 of the Financial Services and Markets

Act 2000 (as amended by the Financial Services Act 2012) by abrdn Fund Managers Limited which is authorised and

regulated by the Financial Conduct Authority

Alternative Investment Fund Managers Directive

Disclosures

(

Unaudited

)

116 abrdn Asia Focus plc

General

The AGM will be held at 12:30 p.m. on 30 November 2022 in

London at which the usual formal business will be proposed.

abrdn Asia Focus plc 117

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

Notice is hereby given that the twenty-seventh Annual General Meeting of abrdn Asia Focus plc will be held at Bow Bells

House, 1 Bread Street, London EC4M 9HH, at 12:30 p.m. on 30 November 2022 for the following purposes:

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

Resolutions and Resolutions 11 to 13 as Special Resolutions:

Ordinary Business

1. To receive and adopt the Directors’ Report and financial statements for the year ended 31 July 2022, together with

the auditors’ report thereon.

2. To receive and adopt the Directors’ Remuneration Report for the year ended 31 July 2022 (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 the Earl of Antrim as a Director.

5. To re-elect Ms C Black as a Director.

6. To re-elect Mr K Shanmuganathan as a Director.

7. To elect Mr L Cooper as a Director.

8. To elect Mr A Finn as a Director.

9. To re-appoint PricewaterhouseCoopers LLP as auditors and to authorise the Directors to determine their

remuneration.

Special Business

10. THAT in substitution for all existing powers the Directors of the Company be generally and unconditionally authorised

for the purposes of Section 551 of the Companies Act 2006 (the “Act”), to allot shares in the Company, and to grant

rights (“Relevant Rights”) to subscribe for, or to convert any security into, shares in the Company:

(a) up to an aggregate nominal amount of £2,615,893; and

(b) up to a further aggregate nominal amount of £2,615,893 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 2023 unless previously renewed, revoked or varied by the Company in general meeting, save

that the Company may at any time before the expiry of this authorisation make an offer or enter into an agreement

which would or might require shares to be allotted or relevant rights to be granted after the expiry of this

authorisation and the Directors of the Company may allot shares or grant relevant rights in pursuance of any such

offer or agreement as if the authorisation conferred hereby had not expired.

11. THAT subject to the passing of Resolution numbered 10 above and in substitution for all existing powers the Directors

be empowered pursuant to Sections 570 and 573 of the Companies Act 2006 (the “Act”) to allot equity securities

(within the meaning of Section 560 (1), (2) and (3) of the Act) either pursuant to the authorisation under Section 551

of the Act as conferred by Resolution 10 above or by way of a sale of treasury shares, in each case for cash as if

Section 561(1) of the Act did not apply to such allotment, provided that this power shall be limited to:

Notice of Annual General Meetin

118 abrdn Asia Focus plc

i. The allotment of equity securities (otherwise than pursuant to sub-paragraph (b) below) up to an aggregate

nominal amount of £784,768 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 2023,

but so that this power shall enable the Company to make offers or agreements before such expiry which would or

might require equity securities to be allotted after such expiry and the Directors may do so as if such expiry had

not occurred.

12. THAT, the Company be generally and unconditionally authorised in accordance with Section 701 of the Companies

Act 2006 (the “Act”) to make market purchases (within the meaning of Section 693(4) of the Act) of Ordinary shares

of 5p each in the capital of the Company (“Ordinary shares”), and to cancel or hold in treasury such shares

provided that:

i. the maximum number of Ordinary shares hereby authorised to be purchased is 14.99% of the Ordinary shares

in issue as at the date of the passing of this Resolution 12;

ii. the minimum price which may be paid for an Ordinary share is 5p;

iii. the maximum price (exclusive of expenses) which may be paid for an Ordinary share shall not be more than the

higher of (i) an amount equal to 5% above the average of the middle market quotations for an Ordinary share

taken from the London Stock Exchange Daily Official List for the five business days immediately preceding the

date on which the Ordinary share is contracted to be purchased; and (ii) the higher of the price of the last

independent trade and the current highest independent bid on the trading venue where the purchase is

carried out;

iv. any purchase of shares will be made in the market for cash at prices below the prevailing net asset value per

share (as determined by the Directors);

v. the authority hereby conferred shall expire at the conclusion of the Annual General Meeting of the Company to

be held in 2023 unless such authority is renewed, revoked or varied prior to such time by the Company in

general meeting; and

vi. the Company may make a contract to purchase Ordinary shares under the authority hereby conferred prior to

the expiry of such authority which will or may be executed wholly or partly after the expiration of such authority

and may make a purchase of Ordinary shares pursuant to any such contract.

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

By order of the Board

Aberdeen Asset Management PLC

Company Secretary

14 October 2022

Registered Office

Bow Bells House, 1 Bread Street, London EC4M 9HH

Notice of Annual General Meetin

Continued

abrdn Asia Focus plc 119

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

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 28

November 2022 or, if this meeting is adjourned, at 6.30 p.m. on the day two business days prior to the adjourned meeting. Changes

to the entries on that Register after that time shall be disregarded in determining the rights of any member to attend and vote at

the meeting.

v. As a member you have the right to put questions at the meeting relating to the business being dealt with at the meeting.

vi. CREST members who wish to appoint a proxy or proxies by utilising the CREST electronic proxy appointment service may do so for

the Meeting and any adjournment(s) thereof by utilising the procedures described in the CREST Manual. CREST Personal Members

or other CREST sponsored members, and those CREST members who have appointed a voting service provider(s), should refer to

their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.

vii. In order for a proxy appointment made by means of CREST to be valid, the appropriate CREST message (a “CREST Proxy

Instruction”) must be properly authenticated in accordance with Euroclear UK & Ireland Limited’s (“EUI”) specifications and must

contain the information required for such instructions, as described in the CREST Manual which can be viewed at euroclear.com.

The message must be transmitted so as to be received by the issuer’s agent (ID RA19) by the latest time(s) for receipt of proxy

appointments specified in the notice of Meeting. For this purpose, the time of receipt will be taken to be the time (as determined by

the timestamp applied to the message by the CREST Applications Host) from which the issuer’s agent is able to retrieve the

message by enquiry to CREST in the manner prescribed by CREST.

viii. CREST members and, where applicable, their CREST sponsors or voting service providers should note that EUI does not make

available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in

relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST

member is a CREST personal member or sponsored member or has appointed a voting service provider(s), to procure that his

CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by

means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST

sponsors or voting service providers are referred, in particular, to those sections of the CREST Manual concerning practical

limitations of the CREST system and timings.

ix. You

may also submit your proxy votes via the internet. You can do so by visiting www.sharevote.co.uk. You will require your voting

ID, task ID and Shareholder Reference Number. This information can be found under your name on your form of proxy.

Alternatively, shareholders who have already registered with Equiniti Registrars’ online portfolio service, Shareview, can appoint

their proxy electronically by logging on to their portfolio at www.shareview.co.uk using their user ID and password. Once logged in,

click “view” on the “My Investments” page. Click on the link to vote and follow the on screen instructions.

x. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the

Uncertificated Securities Regulations 2001.

120 abrdn Asia Focus plc

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 Chairman 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 14 October 2022 (being the latest practicable date prior to publication of this document), the Company’s

issued share capital comprised 156,953,631 Ordinary shares of 5 pence each and there were a further 51,744,590 shares held in

treasury. Each Ordinary share carries the right to one vote at a general meeting of the Company and therefore the total number

of voting rights in the Company as at close of business on 14 October 2022 is 156,953,631. Treasury shares represent 24.8% 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

Pro

xy) to communicate with the Company for any purposes other than those expressly stated.

xix. There are special arrangements for holders of shares through the abrdn Investment Plan for Children, abrdn Share Plan and abrdn

Investment Trusts ISA (‘Plan Participants’). These are explained in the separate ‘Letter of Direction’ which Plan Participants will have

received with this Annual Reports.

xx. The Board expects the 2022 AGM to be an in person meeting. However, given the evolving risks posed by Covid-19, should

circumstances change significantly before the date of the AGM, the Company will update shareholders of any changes to the

arrangements via the Company’s website asia-focus.co.uk.

Notice of Annual General Meetin

Continued

abrdn Asia Focus plc 121

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

abrdn Asia or the Investment Manager

abrdn Asia Limited (previously known as Aberdeen

Standard Investments (Asia) Limited) is a wholly owned

subsidiary of abrdn plc (previously known as Standard

Life Aberdeen plc) and acts as the Company’s

investment manager

abrdn plc

abrdn plc (previously known as Standard Life

Aberdeen 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

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 £36.66 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

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

Glossary of Terms and Definitions

122 abrdn Asia Focus plc

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

Continued

Glossary of Terms and Definitions

abrdn Asia Focus plc 123

Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements

Issued Share Capital at 31 July 2022

156,953,631

Ordinary shares of 5p (excluding treasury shares)

51,744,590

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 2010

502,069 shares purchased for treasury at prices ranging from

296.7p to 455.0p and 442,698 Ordinary shares issued following the

exercise of Warrants

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

Your Company’s Share Capital History

124 abrdn Asia Focus plc

abrdn Asia Focus plc 125

Directors

Nigel Cayzer, Chairman

Charlotte Black

Lindsay Cooper (

appointed 15 June 2022

)

The Earl of Antrim (

previously Viscount Dunluce

)

Alex Finn (

appointed 13 July 2022

)

Krishna Shanmuganathan

Registered in England as an

Investment Company

Registration Number 03106339

Manager

abrdn Asia Limited

21 Church Street

#01-01 Capital Square Two

Singapore 049480

Alternative Investment Fund Manager*

abrdn Fund Managers Limited

Authorised and regulated by the Financial

Conduct Authority

Bow Bells House

1 Bread Street

London EC4M 9HH

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

Secretaries and Registered Office

Aberdeen Asset Management PLC

Bow Bells House

1 Bread Street

London EC4M 9HH

Registrars

Equiniti

Aspect House

Spencer Road

Lancing

West Sussex BN99 6DA

Telephone enquiries

0371 384 2416

Overseas helpline number:

+44 (0)121 415 7047

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

(excluding bank holidays)

shareview.co.uk

Stockbrokers

Panmure Gordon & Co

1 New Change

London EC4M 9AF

Solicitors

Dentons UK and Middle East LLP

Quartermile One

15 Lauriston Place

Edinburgh EH3 9EP

Independent Auditor

PricewaterhouseCoopers LLP

Atria One

144 Morrison Street

Edinburgh EH3 8EX

CULS Trustee

The Law Debenture Corporation p.l.c.

Fifth Floor

100 Wood Street

London EC2V 7EX

Depositary

BNP Paribas Trust Corporation UK Limited

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

For more information visit

asia-focus.co.uk

The Company

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

on the premium segment of the London Stock Exchange. The Company aims to attract long-term private and

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

Investment Objective

From 27 January 2022:

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.)

Up to 27 January 2022:

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

predominantly of smaller quoted companies (with a market capitalisation of up to approximately US$1.5 billion at the

time of investment) in the economies of Asia and Australasia, excluding Japan, by following the investment policy. When

it was in shareholders’ interests to do so, the Company reserved the right to participate in the rights issue of an investee

company notwithstanding that the market capitalisation of that investee may exceed the stated ceiling.

Five-Year Performance Linked Tender

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

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

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

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

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

Comparative Index

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

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

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

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

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

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

Investment Manager and Alternate Investment Fund Manager

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

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

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

Manager”). aFML and abrdn Asia are wholly owned subsidiaries of abrdn plc (previously known as Standard Life

Aberdeen plc).

Important Information