REG - Aberdeen Asia Focus - Annual Financial Report
23/10/2025 07:00
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RNS Number : 4699E Aberdeen Asia Focus plc 23 October 2025
Aberdeen Asia Focus PLC (formerly abrdn Asia Focus plc)
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 31 JULY 2025
Legal Entity Identifier (LEI): 5493000FBZP1J92OQY70
Aberdeen Asia Focus PLC (the "Company" or "AAS") which invests in a
diversified portfolio of quoted smaller companies with strong growth prospects
across a range of Asian industries and economies, is pleased to report a
strong set of full year results, in the year of our 30(th) anniversary, and
entry into the FTSE 250.
Highlights:
· Net assets increased to £558.6 million (2024: £502.3 million).
· During the period the Company delivered a NAV total return of
20.3% and a share price total return of 26.6% (MSCI AC Asia ex Japan Small Cap
Index returned 7.6%).
· Examples of holdings that contributed to the strong performance
in the period included:
o Precision Tsugami China, which makes high-precision machine tools, did
well on the back of earnings improvements and a solid order pipeline including
early orders in robotics and AI;
o Within the technology sector, Choma ATE and Taiwan Union Technology
significantly outperformed, with their share prices rising 90.8% and 56.5%
during the period, respectively;
o In India, Bharti Hexacom demonstrated strong earnings defensiveness
supported by rising industry pricing and good revenue per user growth;
o In South Korea, Korea Shipbuilding & Offshore Engineering, and ship
servicing company Hyundai Marine Solution performed well on the back of a
robust outlook for the sector.
· Four interim dividends have been declared in respect of the
financial year ended 31 July 2025 amounting to 6.43p per Ordinary 5p share
(2024: 6.42p). This represents a yield of 1.8% based upon the share price at
the time of writing of 363p.
· AAS joined the FTSE 250 in June 2025.
Krishna Shanmuganathan, the Company's Chair commented:
"Long term outperformance, with a keen eye to optimising shareholder returns,
has always been this Company's goal. Since our inception in 1995, our NAV
total return of +2995.6% equates to an annualised 12.2% rise compared to the
benchmark index's 5.1% annualised return since inception.
"The long-term outperformance reflects our unique approach to portfolio
composition and management. Smaller companies, which in the Asian context
means companies with market capitalisations below £5 billion, are often
under-researched and overlooked by mainstream analysts. Our deeply researched,
high conviction portfolio, which is 96% different from the benchmark, means
that we can identify hidden gems and future winners with strong structural
growth drivers, offering a differentiated proposition for investors.
In a period of significant volatility, Asian economies have remained
resilient. The region's structural long-term growth drivers, such as
urbanisation, digitalisation, consumer market growth, and the green
transition, remain intact. We look to the future with confidence."
For further information please contact:
Ben Heatley, Aberdeen +44 (0) 20 7156 2382
Performance Highlights
Net asset value total return (diluted)(AB) Net asset value per share (diluted)
+20.3% 381.7p
2024 +7.9% 2024 324.3p
Net asset value total return since inception (diluted)(AB) Annualised Net asset value total return since inception (diluted)(AB)
+2995.6% +12.2%
2024 +2472.6% 2024 +11.9%
Share price total return(A) Share price
+26.6% 343.0p
2024 +8.8% 2024 278.0p
Annualised share price total return since inception(A) Discount to net asset value(AB)
+12.2% 10.1%
2024 +11.8% 2024 14.3%
MSCI AC Asia ex Japan Small Cap Index total return(C) Active share
+7.6% 96.5%
2024 +14.1% 2024 96.7%
Ongoing charges ratio(A) Dividends per share(D)
0.91% 6.43p
2024 0.89% 2024 7.42p
(A) Alternative Performance Measure.
(B) 2024 presented on a diluted basis as the Convertible Unsecured Loan Stock
("CULS") were "in the money".
(C) Currency adjusted, capital gains basis.
(D) Dividends include special dividends of nil for 2025 (2024 - 1.00p).
Chair's Statement
It brings me great pleasure to present another set of strong results in this
the Company's 30(th) anniversary year. Our net assets grew to £558.6 million,
and we joined the FTSE 250 Index in June 2025. The Company was also recognised
by the Association of Investment Companies (AIC) as a double 'ISA Millionaire'
Trust, having returned over £2 million to ISA savers who invested their full
annual allowances since ISAs were introduced, the highest return of any
Asia-focused trust in the AIC's analysis.
In order to reflect recent changes to our Manager's branding, the Board has
resolved, with effect from 14 October 2025, to change the Company's name to
"Aberdeen Asia Focus PLC".
Your Company will continue to target a diverse and attractive range of smaller
companies in Asia. It is important to clarify that though relatively small in
Asia, many of these companies would be large enough to be part of the FTSE100
in London. Since these businesses are often under-researched and less widely
owned, your Manager is able to uncover hidden gems, the next generation of
market leaders capitalising on structural growth trends in economies which are
themselves growing at pace. Thus, we provide access to a compelling and
diversified portfolio created by expert, bottom-up stock selection that looks
very different to any reference benchmark.
Investment Performance
Your Company's share price delivered a +26.6% return while the net asset value
('NAV') grew by 20.3% in sterling terms, both on a total return basis
including the reinvestment of dividends. This compared very well with the MSCI
AC Asia ex Japan Small Cap Index's total return of 7.6% and the larger cap
MSCI AC Asia ex Japan Index's 15.3% in sterling terms.
This outperformance reflects your Manager's unwavering commitment to investing
in quality and resilience with long-term growth prospects amongst Asia's next
generation of market leaders, and their expertise, based on an on-the-ground
presence with 39 analysts and investment managers operating around the region,
providing bottom-up research and local intelligence.
Over the longer term, your Company's NAV total return per share has returned
an outstanding 2995.6% in absolute terms since inception in 1995, equating to
12.2% per annum, reflecting your Manager's excellent investment track record
of delivering sustained returns to Shareholders. This compares very favourably
against returns of 593.6% for the large-cap benchmark (MSCI AC Asia Pacific ex
Japan Index), and 343.5% for the blended small-cap benchmark index.
Dividends and Reserves
The Board continues to recognise the importance of your Company's dividend
income for many shareholders. As such, the income generation of the portfolio
has been robust and supportive of the progressive dividend policy approved by
shareholders in 2022. Your Company has maintained or raised the Ordinary
dividend every year since 1998 and is expected to be named as one of the AIC's
Next Generation of 'Dividend Heroes' in the near future.
In total, four interim dividends have been declared in respect of the
financial year ended 31 July 2025 amounting to 6.43p per Ordinary 5p share
(2024: 6.42p). This represents a yield of 1.8% based upon the share price at
the time of writing of 363p. It is pleasing to note that there remains over
13.6p per share in revenue reserves at the year end which is significantly in
excess of a year's worth of cover for the annual dividend.
Gearing - CULS conversion
On 31 May 2025 the £36.5m of outstanding Convertible Unsecured Loan Stock
2025 ("CULS") matured with approximately £5.5m being redeemed by CULS holders
for cash and the balance of £31m electing to convert into new Ordinary shares
resulting in the issue of 10,562,933 new Ordinary shares.
Having reviewed the gearing options available, the Company entered into a new,
secured, two-year multi-currency revolving credit facility (the "Facility") of
£35 million with The Bank of Nova Scotia, London Branch (the "Lender") which
will expire on 28 May 2027.
Under the terms of the Facility, the Company also has the option to increase
the level of the commitment to £50 million, subject to the Lender's credit
approval. £35 million has been drawn down under the new Facility and was used
to finance the part redemption of the CULS with the balance having been
invested by the Investment Manager in accordance with the Company's investment
policy.
As at 31 July 2025, the net gearing stood at 10.2% (2024: 10.4%).
Protecting Shareholders' Interests
As you will recall, your Board took proactive steps as part of the strategic
review in 2021 to further promote shareholders' interests, in particular the
introduction of a five-year conditional tender opportunity, the linking of
investment management fees to market cap rather than NAV and the move to
progressive and more frequent dividends.
We are pleased that performance remains well ahead of the benchmark since 1
August 2021, the start date for the five-year conditional tender monitoring
period, with the portfolio's NAV total return per share being 36.9% versus the
benchmark return of 25.9% as at 31 July 2025.
As a measure of our continued commitment to Shareholders' interests, and
underlining your Board's belief that your Company's share price discount to
NAV does not accurately reflect the strength of the portfolio and future
prospects, we have significantly stepped-up share buybacks over the past 12
months, not only to provide additional liquidity but also to limit share price
volatility for Shareholders.
Over the year the Ordinary shares have traded at an average discount of 15.8%
and we have bought back 17.9m Ordinary shares (11.6% of issued share capital)
in the market at a discount to the prevailing NAV per share (2024: 1.8% of
issued share capital), ending the period on a discount of 10.1% (2024: 14.3%).
These buybacks have resulted in an uplift to NAV of 1.6% or 5.5p per share.
Value for Money
We strive to keep the cost of investing low so that our shareholders can
retain as much of the return on their investment as possible. Ongoing charges
for the year were 0.91% (2024: 0.89%), primarily made up of the management
fee. Your Company is one of the very few to have linked the management fee to
the market capitalisation rather than the NAV of the Company, further aligning
the Investment Manager with you, the Shareholders.
Your Board continues to keep all costs under review but believes that, given
the breadth and depth of on-the-ground research by your Manager, the very
selective stock picking (your Company's portfolio has an active share of 96.5%
at year end) and the long-term outperformance, the current fees constitute
good value for money.
Your Investment Manager
In a challenging environment for active managers, your Manager continues to
invest in talent and research, adding depth to its smaller company research
capabilities in Asia, with two new research analysts having joined the team in
the year, one with a primary focus on small and mid-cap companies in India and
the other a senior technology analyst. Given these new additions in areas of
growing importance, your Board and I remain encouraged by your Manager's firm
commitment to Asia, where it is well known for its expertise.
Your Manager is also focused on enhancing its investment process in three key
ways. First, the sharpening of research with updated guidelines for stock
notes and sector reviews and a streamlined peer review process to improve
consistency and efficiency. Fundamental analysis workshops and the use of AI
are also helping boost productivity.
Second, an evolution of the team's structure for improved clarity and focus,
separating portfolio management from research. Your Manager now has pure
research analysts covering all core sectors, having made some experienced
hires, which will help consolidate Aberdeen's comprehensive research platform.
This adjustment increases individual accountability and means research
insights can flow through faster while portfolio managers, such as your
Company's, can concentrate on performance.
Finally, the improving of portfolio construction, where the greater use of
technology and closer collaboration with risk teams are supporting more
effective decision-making.
Notably, senior and experienced hires and the promotion of Pruksa
Iamthongthong, who will lead the Aberdeen Asian equity franchise as Flavia
Cheong retires, signal a strong bench of talent within the Manager's ranks.
Whilst we reiterate our thanks to Flavia Cheong after over 30 years of Asian
equity investing with Aberdeen, Gabriel Sacks continues as lead manager on the
Company's investment portfolio, ably supported by Xin-Yao Ng. Both are
supported by the wider Aberdeen Asia Pacific equity team of analysts and
investment managers based in the region.
Promoting your Company
The Board maintains its view that many investors are still underestimating the
benefits of allocating part of their capital to Asian smaller companies, which
have proven to be less correlated to mainstream equities and have offered
superior returns compared with Asian large caps. As a result, we are
actively working to promote the Company further, to bring the success of your
Company to new shareholders, using a suite of modern and traditional public
relations tools from social media to the financial press.
Annual General Meeting
The Company's Annual General Meeting is scheduled for 12:30 p.m. on 8 December
2025. In line with best practice the voting on all business at the AGM will be
conducted by way of a poll which will be administered on the day by the
Company's registrar.
The AGM will be preceded by a short presentation from the management team and
following the formal business there will be a light shareholder buffet lunch
alongside the opportunity to meet the Directors and Manager. 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 by Shareholders of the online presentation
held in 2024, 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 1 December 2025. During the presentation, Shareholders will receive updates
from myself and the Investment Manager and there will be the opportunity for
an interactive question and answer session where we will endeavour to answer
as many questions as time allows. Following the online presentation,
Shareholders will still have time to submit their proxy votes prior to the AGM
and as a Board we encourage all Shareholders to lodge their votes in advance
in this manner. Full registration details can be found at: asia-focus.co.uk.
Outlook
In a period of significant volatility, economies across much of Asia have been
resilient. Corporate earnings are holding up. The region's structural
long-term growth drivers, such as urbanisation, digitalisation, consumer
market growth, and the green transition, remain intact.
Meanwhile, potential US interest rate cuts and a weaker US dollar would
further ease financial conditions in Asia, support local currencies and
improve the relative appeal of Asian equities, including Asian smaller
companies which are more sensitive to liquidity cycles and more agile in
deploying capital for growth.
Aside from greater agility versus larger caps, Asian smaller companies are
less correlated to global indexes and more tied to domestic consumption and
innovation. The smaller company universe is inherently less efficient and
poorly researched, making it ideal for active stock picking. Here, your
Investment Manager's on-the-ground presence and long track record in Asia
provides a distinct competitive edge.
Your Investment Manager has invested in companies that tend to be local or
global leaders with unique products and/or critical services, ranging from
precision manufacturing to healthcare diagnostics, meaning that these
businesses are extremely resilient even in volatile markets.
In this age of noise and uncertainty, your Manager's ability to uncover
quality businesses should, as in the past, serve your Company well. Your Board
and I remain confident in your Manager's ability to continue delivering
disciplined, bottom-up outperformance and, with that, sustainable returns and
growth over the long term.
Krishna Shanmuganathan
Chair
22 October 2025
Investment Manager's Review
Performance Review
Despite an uncertain backdrop, the MSCI AC Asia Ex Japan Small Cap Index (the
"benchmark") gained 7.6% in sterling terms. This compares to the Company's net
asset value ("NAV") and share price which both significantly outperformed,
delivering 20.3% and 26.6%, respectively, on a total return basis. This strong
performance vindicates our long-standing approach of uncovering and investing
in high-quality Asian smaller companies with strong growth prospects, capable
management, solid balance sheets and steady cash flows.
Notably, the portfolio's outperformance against its benchmark was driven
mainly by positive stock selection. Among the key macro performance drivers,
we would highlight the portfolio's exposure to Hong Kong and China, which were
among the best performing markets over the year.
The year under review was extremely challenging for investors, not just in
Asia but also globally. In the aftermath of Donald Trump's US presidential win
in November 2024, investor sentiment was impacted by global growth concerns,
rising geopolitical tensions, tariff risks and uncertainty about US monetary
policy direction. In addition, some Asian markets were further weighed down by
domestic turmoil, such as South Korea, which briefly came under martial law.
In the second half of this reporting season, markets became more volatile. The
emergence of China's AI start-up DeepSeek led to mainland markets rallying on
optimism around AI applications, but it also had investors scrambling to
adjust expectations around AI, datacentre capex, and technology hardware
demand. Meanwhile, President Trump announced reciprocal tariffs that were much
higher than expected, sparking a sharp sell-off across many already nervous
markets. Subsequently, however, fresh trade accords between the US and several
countries brought some policy clarity and investor relief, as President
Trump's actions proved less severe than his rhetoric. While tensions in the
Middle East persisted, the lower probability of a broader regional conflict
with Iran, along with US inflation and dovish Federal Reserve comments, also
helped lift sentiment.
Hong Kong rallied on significant inflows from mainland Chinese investors. This
spike in buying interest was amplified for smaller companies, where trading is
typically thin. Easing local funding conditions and lower interbank rates
earlier in the year also supported risk appetite. Aside from our country
allocation, our holdings also boosted performance. Two stocks stood out.
Precision Tsugami China, which makes high-precision machine tools, did well on
the back of earnings improvements and a solid order pipeline. It is also
seeing early orders in robotics and AI, two areas of structural growth, which
has piqued investors' interest in the company. Dah Sing Financial delivered
solid results, supported by a resilient net interest margin and a stronger
contribution from its insurance partnership. We decided to exit the position
on the back of price strength witnessed in July 2025, as our investment thesis
played out, and also trimmed exposure to Precision Tsugami given its strong
run as its share price more than doubled with a gain of 131.7%.
Among our mainland holdings, gear and reducer manufacturer Zhejiang Shuanghuan
Driveline rallied on the back of healthy earnings and anticipation that it
will be a key beneficiary of demand from humanoid robotics. Software developer
Kingdee, a newly initiated stock, climbed as the company continued to deliver
better results than its peers and is expected to gain from the rising adoption
of Agentic AI in its enterprise resource planning tools.
Elsewhere, our Taiwan exposure added to performance. Taiwan is our second
biggest country exposure after India, albeit our allocation is still lower
than the benchmark. This worked in our favour during a year when Taiwan was a
relative laggard. Our core technology holdings, such as Choma ATE and Taiwan
Union Technology significantly outperformed, with their share prices rising
90.8% and 56.5% during the period, respectively. Chroma ATE benefited from
rising complexity in chip testing, driving growth in its expanding
semiconductor testing business. Taiwan Union saw stronger demand for its
higher-end copper-clad laminates, a key component in printed circuit boards,
as customers continued upgrading to higher-end products. In contrast, textile
group Makalot lagged as orders from US clients slowed amid the tariff
uncertainty.
Turning to India, similarly, our underweight to the market proved positive for
performance. The market was weighed down by a confluence of both domestic and
external headwinds, including near-term growth concerns and weaker corporate
earnings. Adding to the uncertainty were foreign institutional outflows,
uncertainties around tariffs and volatile oil prices. However, the sell-off is
helping to ease valuation concerns, taking some of the excessive froth
witnessed out of the market. Stock selection also contributed positively.
Bharti Hexacom demonstrated earnings defensiveness typical of a
telecommunication company, supported by rising industry pricing, strong
average revenue per user growth, and subscriber additions. Vijaya Diagnostic
Centre performed well, reflecting its management's execution ability and an
integrated business model that has kept it ahead of its rivals. On the other
hand, Newgen Software Technology posted lacklustre first-quarter results
indicating a delay in the conversion of its healthy order pipeline into
revenues.
Elsewhere, our holdings in the Korean shipping sector were also strong. Korea
Shipbuilding & Offshore Engineering and ship servicing company Hyundai
Marine Solution performed well on the back of a robust outlook for the sector,
while US restrictions placed on Chinese shipbuilders, their main rivals, have
made them structurally less competitive.
Portfolio Activity
We aim to manage a diversified portfolio of around 50 well-run companies with
industry-leading positions and strong management teams. With that in mind, we
continue to fine-tune the portfolio towards companies with attractive growth
prospects, steady cash flow generation and clearer earnings visibility given
the prevailing global backdrop. Our key trades through the year have reflected
our commitment to staying disciplined, sizing positions with care and rotating
into the best ideas that we can find. While we will not be right all of the
time, we hope to get it right more often than not, and when we are wrong, be
nimble, move quickly and act to rectify our mistakes.
Through the review period, our trading activity underscored the breadth and
depth of the investment universe in Asian smaller companies, across countries
and sectors, with some initiations highlighted below.
In China, we are leaning towards newer large-scale consumption trends, such as
music streaming, travel and leisure, pet food, and internet platforms, and
moving away from traditional staples. A good example is our investment in
Netease Cloud Music, the second-ranked music streaming app in China, which is
popular with younger users. The platform's high user engagement comes from its
personalised playlists and music recommendations, which significantly enhance
the user experience. While most of its users are still on the free tier, there
is substantial potential for revenue growth by converting them to paying
subscribers - a strategy that the company prioritises over raising prices. We
expect the company to deliver double-digit revenue growth and continued margin
improvement. Towards the end of the Company's financial year, we also
introduced Hesai to the portfolio, an exciting business that we expect to be
one of the global leaders in LiDAR sensors, used primarily for autonomous
driving and other industrial applications.
In South Korea, we introduced a new holding in Classys, which makes high-end
medical devices used in clinics and beauty centres for non-invasive treatments
like skin tightening and lifting and body contouring. Such machines use
technologies that are ultrasound or laser-based and do not require surgery.
This industry of medical aesthetics is still in the early stages of growth,
and Classys is well positioned to capitalise on the opportunity leveraging off
Korea's strong R&D capabilities in the medical and cosmetics industries.
We also invested in Capitaland India Trust, a Singapore-listed property trust
that owns income-generating assets in India, including IT parks, logistics
spaces, and industrial facilities, with consistent dividend growth. The trust
is well-positioned to benefit from India's long-term development with a
10-year development pipeline providing growth visibility, especially in tech
business parks and warehousing. Its data centre assets are expected to be a
major growth driver, while occupancy is above market averages and rental
income continues to grow steadily.
Finally in Taiwan, we initiated a position in Chung-Hsin Electric &
Machinery, a domestic-focused business that is well-positioned to benefit from
rising electricity demand in the country, helping to diversify our more
tech-heavy and export-oriented exposure in Taiwan.
Across the portfolio, we are also sizing positions to manage risk and return
thoughtfully. Aside from Dah Sing Financial, we also sold out of India's
Prestige Estates, another holding that had performed very well for the Company
over several years, demonstrating our price discipline. We also exited the
position in Taiwan's Sinbon Electronics after a bounce in the share price
because we disagreed with the market's excitement around its robotics
pipeline; here we preferred to redeploy the capital into companies with better
earnings visibility.
Staying humble and admitting our mistakes early is also an important part of
trying to deliver better returns to the Company's shareholders. Position
sizing also means we do not need a high "hit rate" to outperform, provided our
winners are allowed to compound and our losers are contained.
Here, kitchen appliance maker Hangzhou Robam is a good example of how we acted
quickly when an investment thesis did not materialise as planned. In March, we
invested in Robam, due to its strong brand equity in premium kitchen
appliances, offering exposure to improving consumption trends in China at an
appealing valuation and with a high dividend yield. The company had maintained
healthy margins despite a decline in the construction channel in recent years,
helped by non-construction and home upgrading demand from both online and
offline channels. Also, government subsidies and signs of stabilisation in the
property market, particularly in higher-tier cities where Robam had greater
exposure, suggested upside potential. After our initiation, however, Robam's
revenues and profits weakened as the property market remained soft, given that
its sales are closely tied to new home completions. At the same time, Chinese
consumers began trading down, which led Robam to push lower-margin mass-market
products and its secondary brand "Mingqi", resulting in a dilution in gross
margins and lower than expected earnings growth. The positive impact of
national subsidies and offline retail recovery also started to fade, while
competition in the kitchen appliance sector intensified, forcing Robam to cut
prices. As a result, we decided to cut our losses and exit our small position
in July.
Our approach as investment manager of the trust is to maintain a balanced
portfolio composed of several of Asia's leading business franchises leaning
into secular growth, managing risk with discipline, and focusing on
compounding returns for our shareholders over the long term.
Outlook
Since your Company was launched 30 years ago, we can point to a significant
long term track record of outperformance with an annualised return since
inception of 12.2% against the MSCI AC Asia ex Japan Small Cap index's 5.1%
return. We believe this is because we have consistently uncovered and invested
in high-quality companies that can perform well even in tough times. In
aggregate, the holdings in the portfolio generate over 80% of their revenues
from within Asia, and many are leaders in their fields with critical products
or services. These businesses tend to be resilient, with strong balance
sheets, and well-positioned for future growth with experienced management
teams and prudent capital allocation.
Importantly, many of these opportunities lie within the Asian smaller
companies space, which is often overlooked, under-researched, and
misunderstood. Small-cap equities in Asia have outperformed the broader market
index over the past three, five, and 10 years and, contrary to popular belief,
their volatility has not consistently exceeded that of the broader market.
This challenges the notion that small caps are inherently riskier.
Part of this small-cap resilience comes from better diversification across
countries and sectors, and less concentration in a few mega caps. Many of
these smaller companies are also more closely aligned with powerful secular
growth trends in Asia, including AI, robotics, semiconductors, and renewable
energy. Furthermore, low and weaker research coverage of small caps, as
compared to large caps, means that active managers can uncover undervalued
"hidden gems" and generate alpha through in-depth, on the ground fundamental
research. The lower correlation between small-cap stocks across Asia and with
global equity markets can also help reduce overall portfolio risk.
More broadly, as the dominance of US markets potentially begins to fade,
investors may look to Asia for growth, value, and diversification. The
companies that we seek to invest in are fundamentally sound, supported by low
leverage, strong competitive positioning, and a broadly favourable
macroeconomic environment with limited inflationary pressures. Asian smaller
companies - often overlooked and under researched - can offer compelling
opportunities for those willing to take a closer look. We remain excited about
the growth prospects for the portfolio and believe that it will continue to
thrive and deliver sustainable returns over the long term.
Gabriel Sacks and Xin-Yao Ng
abrdn Asia Limited
22 October 2025
Overview of Strategy
Business Model
The business of the Company is that of an investment company which seeks to
qualify as an investment trust for UK capital gains tax purposes.
Investment Objective
The Company aims to maximise total return to shareholders over the long term
from a portfolio made up predominantly of quoted smaller companies in the
economies of Asia excluding Japan.
Investment Policy
The Company invests in a diversified portfolio of securities (including equity
shares, preference shares, convertible securities, warrants and other
equity-related securities) predominantly issued by quoted smaller companies
spread across a range of industries and economies in the Investment Region.
The Investment Region includes Bangladesh, Cambodia, China, Hong Kong, India,
Indonesia, Korea, Laos, Malaysia, Myanmar, Pakistan, The Philippines,
Singapore, Sri Lanka, Taiwan, Thailand and Vietnam, together with such other
economies in Asia as approved by the Board.
The Company may invest up to 10% of its net assets in collective investment
schemes, and up to 10% of its net assets in unquoted companies, calculated at
the time of investment.
The Company may also invest in companies traded on stock markets outside the
Investment Region provided over 75% of each company's consolidated revenue,
operating income or pre-tax profit is earned from trading in the Investment
Region or the company holds more than 75% of their consolidated net assets in
the Investment Region.
When the Board considers it in shareholders' interests, the Company reserves
the right to participate in rights issues by an investee company.
Risk Diversification
The Company will invest no more than 15% of its gross assets in any single
holding including listed investment companies at the time of investment.
Gearing
The Board is responsible for determining the gearing strategy for the Company.
Gearing is used selectively to leverage the Company's portfolio in order to
enhance returns where and to the extent this is considered appropriate to do
so. Gearing is subject to a maximum gearing level of 25% of NAV at the time of
drawdown.
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 Aberdeen Group Plc.
Delivering the Investment Policy
The Directors are responsible for determining the investment policy and the
investment objective of the Company. Day to day management of the Company's
assets has been delegated, via the AIFM, to the Investment Manager, abrdn
Asia. abrdn Asia invests in a diversified range of companies throughout the
Investment Region in accordance with the investment policy. abrdn Asia follows
a bottom-up investment process based on a disciplined evaluation of companies
through direct visits by its fund managers. Stock selection is the major
source of added value. No stock is bought without the fund managers having
first met management. abrdn Asia estimates a company's worth in two stages,
quality then price. Quality is defined by reference to management, business
focus, the balance sheet and corporate governance. Price is calculated by
reference to key financial ratios, the market, the peer group and business
prospects. Top-down investment factors are secondary in the abrdn Asia's
portfolio construction, with diversification rather than formal controls
guiding stock and sector weights. Whilst the management of the Company's
investments is not undertaken with any specific instructions to exclude
certain asset types or classes, the Investment Manager considers ESG as part
of the research for each asset class during the investment review process. For
the manager, ESG investment is about active engagement, in the belief that the
performance of assets held around the world can be improved over the longer
term.
A detailed description of the investment process and risk controls employed by
the Manager is disclosed on pages 100 and 101 of the published Annual Report
and financial statements for the year ended 31 July 2025. A comprehensive
analysis of the Company's portfolio is disclosed on pages 28 to 37 of the
published Annual Report and financial statements for the year ended 31 July
2025 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 60 holdings.
Benchmark 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.
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 18 of the published Annual
Report and financial statements for the year ended 31 July 2025, 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 15 of the published Annual Report and financial statements
for the year ended 31 July 2025. The activities of the Company are overseen
by the Board of Directors of the Company.
The Board's philosophy is that the Company should operate in a transparent
culture where all parties are treated with respect and provided with the
opportunity to offer practical challenge and participate in positive debate
which is focused on the aim of achieving the expectations of shareholders and
other stakeholders alike. The Board reviews the culture and manner in which
the Manager operates at its regular meetings and receives regular reporting
and feedback from the other key service providers.
Investment trusts, such as the Company, are long-term investment vehicles,
with a recommended holding period of five or more years. Typically,
investment trusts are externally managed, have no employees, and are overseen
by an independent non-executive board of directors. Your Company's Board of
Directors sets the investment mandate, monitors the performance of all service
providers (including the Manager) and is responsible for reviewing strategy on
a regular basis. All this is done with the aim of preserving and, indeed,
enhancing shareholder value over the longer term.
Stakeholders
The Company's main stakeholders have been identified as its shareholders, the
Manager (and Investment Manager), service providers, investee companies and
debt providers. More broadly, the environment and community at large are also
stakeholders in the Company. The Board is responsible for managing the
competing interests of these stakeholders. Ensuring that the Manager
delivers outperformance for Ordinary shareholders over the longer term without
adversely affecting the risk profile of the Company which is known and
understood by the loan note holders. This is achieved by ensuring that the
Manager stays within the agreed investment policy.
Shareholders
Shareholders are key stakeholders in the Company - they look to the Manager to
achieve the investment objective over time. The following table describes
some of the ways we engage with our shareholders:
AGM The AGM normally provides an opportunity for the Directors to engage with
shareholders, answer their questions and meet them informally. The next AGM
will take place on 8 December 2025 in London and voting will be conducted by
way of poll. We encourage shareholders to lodge their vote by proxy on all the
resolutions put forward.
Online Shareholder Presentation In November 2024 the Board held an online shareholder presentation which was
attended by over 75 shareholders and prospective investors. Based on the
success of this event a further online presentation will be held on 1 December
2025 at 11:00 a.m.
Annual Report We publish a full annual report each year that contains a strategic report,
governance section, financial statements and additional information. The
report is available online and in paper format.
Company Announcements We issue announcements for all substantive news relating to the Company. You
can find these announcements on the website.
Results Announcements We release a full set of financial results at the half year and full year
stage. Updated net asset value figures are announced on a daily basis.
Monthly Factsheets The Manager publishes monthly factsheets on the Company's website including
commentary on portfolio and market performance.
Website Our website contains a range of information on the Company and includes a full
monthly portfolio listing of our investments as well as updates from the
investment management team. Details of financial results, the investment
process and Investment can be found at asia-focus.co.uk.
Investor Relations The Company subscribes to the Manager's Investor Relations programme (further
details are on page 21 of the published Annual Report and financial statements
for the year ended 31 July 2025).
Social Media Shareholders can access up to date news on the Company and management team by
following the dedicated Aberdeen Asia Focus PLC page on LinkedIn.
The Manager
The key service provider for the Company is the Alternative Investment Fund
Manager and the performance of the Manager is reviewed in detail at each Board
meeting. The Manager's investment process is outlined on pages 100 and 101
and further information about the Manager is given on page 99 of the published
Annual Report and financial statements for the year ended 31 July 2025.
Shareholders are key stakeholders in the Company - they are looking to the
Manager to achieve the investment objective over time and to maximise total
return to shareholders over the long term from a portfolio made up
predominantly of quoted smaller companies in the economies of Asia excluding
Japan. The Board is available to meet at least annually with shareholders at
the Annual General Meeting and this includes informal meetings with them over
lunch following the formal business of the AGM. This is seen as a very
useful opportunity to understand the needs and views of the shareholders. In
between AGMs, the Directors and Manager also conduct programmes of investor
meetings with larger institutional, private wealth and other shareholders to
ensure that the Company is meeting their needs. Such regular meetings may
take the form of joint presentations with the Investment Manager or meetings
directly with a Director where any matters of concern may be raised
directly.
Other Service Providers
The other key stakeholder group is that of the Company's third party service
providers. The Board is responsible for selecting the most appropriate
outsourced service providers and monitoring the relationships with these
suppliers regularly in order to ensure a constructive working relationship.
Our service providers look to the Company to provide them with a clear
understanding of the Company's needs in order that those requirements can be
delivered efficiently and fairly. The Board, via the Management Engagement
Committee, ensures that the arrangements with service providers are reviewed
at least annually in detail. The aim is to ensure that contractual
arrangements remain in line with best practice, services being offered meet
the requirements and needs of the Company and performance is in line with the
expectations of the Board, Manager, Investment Manager and other relevant
stakeholders. Reviews include those of the Company's depositary and
custodian, share registrar, broker and auditor.
Principal Decisions
Pursuant to the Board's aim of promoting the long-term success of the Company,
the following principal decisions have been taken during the year:
Portfolio The Investment Manager's Review 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.
Gearing At the time of the maturity of the CULS in May 2025 the Board reviewed
the Company's level of gearing together with potential gearing options. In
conjunction with the Manager it was agreed to replace the CULS with a new
£35m two-year bank facility with Nova Scotia Bank.
Marketing and Promotion During the year the Board sought to further improve
the marketing and promotional activities conducted on behalf of the Company
and following a competitive tender Burson Buchanan were appointed to provide
the Manager with further PR support.
Long Term Investment
The Investment Manager's investment process seeks to outperform over the
longer term. The Board has in place the necessary procedures and processes to
continue to promote the long-term success of the Company. The Board will
continue to monitor, evaluate and seek to improve these processes as the
Company continues to grow over time, to ensure that the investment proposition
is delivered to shareholders and other stakeholders in line with their
expectations.
Key Performance Indicators (KPIs)
The Board uses a number of financial performance measures to assess the
Company's success in achieving its objective and to determine the progress of
the Company in pursuing its investment policy. The main KPIs identified by
the Board in relation to the Company, which are considered at each Board
meeting, are as follows:
KPI Description
NAV Return The Board considers the Company's NAV total return figures to be the best
indicator of performance over time and is therefore the main indicator of
performance used by the Board. The figures for this year and for the past 1,
3, 5, 10 years and since inception are set out on page 23 of the published
Annual Report and financial statements for the year ended 31 July 2025.
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
24 and 25 of the published Annual Report and financial statements for the year
ended 31 July 2025. At its regular Board meetings the Board also monitors
share price performance relative to competitor investment trusts over a range
of time periods, taking into consideration the differing investment policies
and objectives employed by those companies.
Share price The Board also monitors the price at which the Company's shares trade relative
(on a total return basis) to the MSCI Asia ex Japan Small Cap Index (sterling adjusted) on a total
return basis over time. A graph showing the total NAV return and the share
price performance against the comparative index is shown on page 25 of the
published Annual Report and financial statements for the year ended 31 July
2025.
Discount/Premium to NAV The discount/premium relative to the NAV per share represented by the share
price is closely monitored by the Board. The objective is to avoid large
fluctuations in the discount relative to similar investment companies
investing in the region by the use of share buy backs subject to market
conditions. A graph showing the share price premium/(discount) relative to
the NAV is also shown on page 25 of the published Annual Report and financial
statements for the year ended 31 July 2025.
Dividend In 2022 the Board introduced a target dividend of 6.4p per share and the aim
is to maintain a progressive Ordinary dividend so that shareholders can rely
on a consistent stream of income. Dividends paid over the past 10 years are
set out on page 23 of the published Annual Report and financial statements for
the year ended 31 July 2025.
Principal Risks and Uncertainties
There are a number of risks which, if realised, could have a material adverse
effect on the Company and its financial condition, performance and prospects.
Risks are identified and documented through a risk management framework and
further details on the risk matrix are provided in the Directors' Report.
The Board, through the Audit Committee, has undertaken a robust review of the
principal risks and uncertainties facing the Company including those that
would threaten its business model, future performance, solvency or liquidity.
Those principal risks are disclosed in the table below together with a
description of the mitigating actions taken by the Board. The principal risks
associated with an investment in the Company's Shares are published monthly on
the Company's factsheet or they can be found in the pre-investment disclosure
document published by the Manager, both of which are available on the
Company's website.
The Board also has a process to review longer term risks and consider emerging
risks and if any of these are deemed to be significant these risks are
categorised, rated and added to the risk matrix.
Macroeconomic risks arising from geopolitical risks such as the ongoing
conflicts in Ukraine and the Middle East together with tensions in East Asia
as well as the imposition of trade tariffs by the US continue to present
significant uncertainty to world markets. In addition to the risks listed
below, the Board is also very conscious of the risks emanating from increased
environmental, social and governance challenges. As climate change pressures
mount, the Board continues to monitor, through its Manager, the potential risk
that investee companies may fail to keep pace with the appropriate rates of
change and adaption.
The Board does not consider that the principal risks and uncertainties
identified have changed significantly during the year or since the date of
this Annual Report and are not expected to change materially for the current
financial year.
Description Mitigating Action
Shareholder and Stakeholder Risk The Company's strategy and objectives are regularly reviewed to ensure that
they remain appropriate and effective. The Board monitors the discount level
Overall Risk Unchanged during Year of the Company's shares and has in place a buyback mechanism whereby the
Manager is authorised to buy back shares within certain limits. The
macroeconomic and geopolitical challenges continue to cause volatility in
equity markets and the Company's share price discount to NAV. The Company buys
back shares into treasury seeking to limit volatility. The Broker and Manager
communicate with major shareholders regularly to gauge their views on the
Company, including discount volatility. There are additional direct meetings
undertaken by the Chair and other Directors. The Board monitors shareholder
and market reaction to Company news flow and notes that strong performance
over the year combined with pro-active Board activity has helped to mitigate
the impact of this risk.
Whilst the Board rates this risk overall as stable, the risks associated with
certain constituent parts of this risk have changed over the last 12 months
and remain the subject of continued scrutiny.
Investment Risk The Board sets, and monitors, its investment restrictions and guidelines, and
receives regular board reports which include performance reporting on the
Overall Risk Unchanged during Year implementation of the investment policy, the investment process and
application of the guidelines and concentration/liquidity analysis of the
portfolio. Aberdeen Group provides a team of experienced portfolio managers
with detailed knowledge of the Asian markets. The Investment Manager is in
attendance at all Board meetings. The Board also monitors the Company's share
price relative to the NAV.
The Board recognises that investing in unlisted securities carries a higher
risk/reward profile. Accordingly, it seeks to mitigate this risk by limiting
investment into such securities to 10% of the Company's net assets (calculated
at the time of investment). For the year ended 31 July 2025 no unlisted
investments were made.
The Manager's risk department reviews investment risk and a review of credit
worthiness of counterparties is undertaken by its Counterparty Credit Risk
team. The Company does not hedge foreign currency exposure but it may, from
time to time, partially mitigate it by borrowing in foreign currencies.
Gearing is currently provided at attractive rates, the Board and Manager
monitor gearing levels regularly and covenant reports are provided to lenders.
The Investment Manager includes responsible investing in its assessment of
investee companies together with the impact of climate as part of the
investment process. Responsible investment is about active engagement, in the
belief that the performance of assets held around the world can be improved
over the longer term.
Operational Risk The Board receives reports from the Manager on internal controls and risk
management at each Board meeting. It receives assurances from all its
Overall Risk Unchanged during Year significant service providers, as well as back-to-back assurances where
activities are themselves sub-delegated to other third-party providers with
which the Company has no direct contractual relationship eg accounting. The
assurance reports include an independent assessment of the effectiveness of
risks and internal controls at the service providers including their planning
for business continuity and disaster recovery scenarios, together with their
policies and procedures designed to address the risks posed to the Company's
operations by cyber-crime. Further details of the internal controls which are
in place are set out in the Directors' Report on pages 47 and 48 of the
published Annual Report and financial statements for the year ended 31 July
2025.
The Manager has documented succession planning in place for key personnel.
There is a team approach to portfolio management of the Company and this has
been clearly communicated to shareholders
Governance & Regulatory Risk The Board receives assurance from the Manager and Company Secretary and
third-party service providers on all aspects of regulatory compliance as well
Overall Risk Unchanged during Year as drawing upon the significant experience of individual Directors. Upon
appointment Directors receive a detailed induction covering relevant
regulatory matters such as Corporate Governance, the Companies Act and Listing
Rules and further training is available if required.
Major Events & Geopolitical Risk 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
Overall Risk Rising during Year the underlying investee companies in order to navigate and guide the Company
through macroeconomic and geopolitical risks. The Manager continues to assess
and review legacy pandemic risks as well as investment risks arising from the
impact of events such as the Invasion of Ukraine and increased military
tension in East Asia on companies in the portfolio and takes the necessary
investment decisions. The Manager monitors the potential impact of potential
regional conflict and the risk of sanctions being imposed which limit the free
flow of trade. In addition, the Board has discussed with the Manager options
that would be available to reduce the impact of conflict on the portfolio.
Promoting the Company
The Board recognises the importance of promoting the Company to prospective
investors both for improving liquidity and enhancing the value and rating of
the Company's shares. The Board believes an effective way to achieve this is
through subscription to and participation in the promotional programme run by
the Manager on behalf of a number of investment trusts under its management.
The Company's financial contribution to the programme is matched by the
Manager. The Manager reports quarterly to the Board giving analysis of the
promotional activities as well as updates on the shareholder register and any
changes in the make-up of that register.
The purpose of the programme is both to communicate effectively with existing
shareholders and to gain new shareholders with the aim of improving liquidity
and enhancing the value and rating of the Company's shares. Communicating the
long-term attractions of your Company is key and therefore the Company also
supports the Manager's investor relations programme which involves regional
roadshows, promotional and public relations campaigns.
Board Diversity
The Board recognises the importance of having a range of skilled, experienced
individuals with the right knowledge represented on the Board in order to
allow the Board to fulfil its obligations. The Board also recognises the
benefits and is supportive of the principle of diversity in its recruitment of
new Board members. The Board will not display any bias for age, gender,
race, sexual orientation, religion, ethnic or national origins, or disability
in considering the appointment of its Directors. Although the Board does not
set diversity targets, it is mindful of best practice in this area. At 31
July 2025, there were three male Directors and three female Directors on the
Board and the Company is compliant with the diversity and inclusion targets
set out in Chapter 6 of the FCA's Listing Rules. Further details are
disclosed in the Directors' Report on page 45 of the published Annual Report
and financial statements for the year ended 31 July 2025.
The UK Stewardship Code and Proxy Voting
The Company supports the UK Stewardship Code 2020 and seeks to play its role
in supporting good stewardship of the companies in which it invests.
Responsibility for actively monitoring the activities of portfolio companies
has been delegated by the Board to the Manager.
The Manager is a signatory of the UK Stewardship Code 2020 which aims to
enhance the quality of engagement by investors with investee companies in
order to improve their socially responsible performance and the long-term
investment return to shareholders. The Manager's Annual Stewardship Report for
2024 may be found at aberdeenplc.com. While delivery of stewardship activities
has been delegated to the Manager, the Board acknowledges its role in setting
the tone for the effective delivery of stewardship on the Company's behalf.
The Board has also given discretionary powers to the Manager to exercise
voting rights on resolutions proposed by the investee companies within the
Company's portfolio. The Manager reports to the Board on a six-monthly basis
on stewardship (including voting) issues and additional information may be
found on pages 102 to 105 of the published Annual Report and financial
statements for the year ended 31 July 2025.
Global Greenhouse Gas Emissions and Streamlined Energy and Carbon Reporting
("SECR")
All of the Company's activities are outsourced to third parties. The Company
therefore has no greenhouse gas emissions to report from the operations of its
business, nor does it have responsibility for any other emissions producing
sources under the Companies Act 2006 (Strategic Report and Directors' Reports)
Regulations 2013. For the same reason as set out above, the Company
considers itself to be a low energy user under the SECR regulations and
therefore is not required to disclose energy and carbon information. Further
information on the Manager's obligatory disclosures under the Taskforce on
Climate-related Financial Disclosures ("TCFD") may be found on the Company's
website.
Environmental, Community, Social and Human Rights Issues
The Company has no employees and, accordingly, there are no disclosures to be
made in respect of employees. In relation to the investment portfolio, the
Board has delegated assessment of these issues to the Investment Manager,
responsibility and further information may be found on pages 102 to 105 of the
published Annual Report and financial statements for the year ended 31 July
2025.
Modern Slavery Act
Due to the nature of its business, being a Company that does not offer goods
and services to customers, the Board considers that the Company is not within
the scope of the Modern Slavery Act 2015 because it has no turnover. The
Company is therefore not required to make a slavery and human trafficking
statement. The Board considers the Company's supply chains, dealing
predominantly with professional advisers and service providers in the
financial services industry, to be low risk in relation to this matter.
Viability Statement
The Company does not have a formal fixed period strategic plan but the Board
formally considers risks and strategy at least annually. The Board considers
the Company, with no fixed life, to be a long-term investment vehicle, but for
the purposes of this viability statement has decided that a period of three
years is an appropriate period over which to report. The Board considers that
this period reflects a balance between looking out over a long-term horizon
and the inherent uncertainties of looking out further than three years.
In assessing the viability of the Company over the review period the Directors
have conducted a robust review of the principal risks, focusing upon the
following factors:
- The principal risks detailed in the Strategic Report;
- The ongoing relevance of the Company's investment objective in the current
environment;
- The demand for the Company's Shares evidenced by the historical level of
premium and or discount; and
- The level of income generated by the Company.
In the event of triggering the conditional Tender Offer in 2026, the liquidity
of the Company's portfolio has been carefully considered including the results
of stress test analysis performed by the Manager under a wide number of market
scenarios.
In making this assessment, the Board has examined scenario analysis covering
the impact of significant historical market shocks such as the 2008 Global
Financial Crisis, Covid-19 and the Chinese Devaluation on the liquidity of the
portfolio, as well as future scenarios such as geo-political tensions in East
Asia, and how these factors might affect the Company's prospects and viability
in the future.
Accordingly, taking into account the Company's current position, the fact that
the Company's investments are mostly liquid and the potential impact of its
principal risks and uncertainties, the Directors have a reasonable expectation
that the Company will be able to continue in operation and meet its
liabilities as they fall due for a period of three years from the date of this
Report. In making this assessment, the Board has considered that matters such
as significant economic or stock market volatility, a substantial reduction in
the liquidity of the portfolio or changes in investor sentiment could have an
impact on its assessment of the Company's prospects and viability in the
future.
Future
The Board's view on the general outlook for the Company can be found in my
Chair's Statement on page 11 of the published Annual Report and financial
statements for the year ended 31 July 2025 whilst the Investment Manager's
views on the outlook for the portfolio are included on page 14 of the
published Annual Report and financial statements for the year ended 31 July
2025.
The Strategic Report has been approved by the Board and signed on its behalf
by:
Krishna Shanmuganathan,
Chair
22 October 2025
Results
Performance (total return)
1 year 3 year 4 year 5 year 10 year % return % pa return
% return % return % return(B) % return % return since inception since inception
Share price(A) +26.6 +47.8 +45.4 +101.0 +170.4 +3011.8 +12.2
Net asset value per Ordinary share - diluted(A) +20.3 +39.7 +37.0 +94.4 +157.3 +2995.6 +12.2
MSCI AC Asia ex Japan Small Cap Index (currency adjusted) +7.6 +32.6 +25.9 +75.7 +130.9 +343.5 +5.1
(A) Considered to be an Alternative Performance Measure.
(B) Represents the period, following the commencement of monitoring
performance with effect from 31 July 2021 to determine whether a tender offer
for the Ordinary shares of the Company should be undertaken after five
years.
Source: Aberdeen Group, Morningstar, Lipper & MSCI
Ten Largest Investments
As at 31 July 2025
Taiwan Union Chroma ATE
3.9% 3.7%
Total assets Total assets
Taiwan Union Technology Corp is a leading maker of copper clad laminate (CCL), Chroma ATE is a leading provider of precision test and measurement
a key base material used to make printed circuit boards. With a strong instruments. The company has a strong market position due to its innovative
commitment to R&D, it has moved up the value chain through the years. products and solutions, which are widely used in various industries such as
electronics, automotive, and renewable energy.
Affle India Precision Tsugami China
2.8% 2.8%
Total assets Total assets
Affle India operates a data platform that helps direct digital advertising. It The company is an established maker of high precision machine tools and its
is dominant in India where digitalisation has reached an inflection point. The emphasis on innovation and quality, along with its strong customer
company has also pursued a broader emerging markets growth strategy and now relationships, positions it well for sustained growth in the Chinese market.
has a meaningful presence in Southeast Asia and Latin America.
Classys Asian Terminals
2.7% 2.6%
Total assets Total assets
Korea's Classys is a leading global aesthetic device maker in an exciting Asian Terminals is an operator, developer and investor of port terminals in
fast-growing segment, with a superior brand image, a cost advantage versus the Philippines. It has facilities in both Manila South Harbour and the Port
peers, and a long growth runway in overseas markets. of Batangas, capturing the economic activity of its hinterland which arguably
is the epi-centre of trade in the Philippines.
Zhejiang Shuanghuan Driveline Park Systems Corporation
2.6% 2.5%
Total assets Total assets
Zhejiang Shuanghuan is a leading manufacturer of gears and other transmission The Korean company is the leading developer
systems. Its strong engineering capabilities and commitment to quality have
earned it a solid reputation in the market where it is the leading supplier to of atomic force microscopes, a nascent technology that could have broad
China's electric vehicle industry. industrial application in sectors such as chip-making and biotechnology.
NetEase Cloud Music J.B. Chemicals & Pharmaceuticals
2.5% Netease Cloud Music is the third-ranked music-streaming app in China which is 2.5%
popular with the younger demographic. The platform's high user stickiness is
Total assets attributed to its personalised playlists and music recommendations. The Total assets
company is profitable, generates positive cash flow, and boasts a strong net
cash position.
JB Chemicals is one of the top pharmaceutical companies in India by sales,
with a strong contract manufacturing business. The company has an attractive
financial profile, an experienced and capable management team, and is pursuing
multiple growth opportunities on which it is executing well.
Taiwan Union
3.7%
Total assets
Chroma ATE
Taiwan Union Technology Corp is a leading maker of copper clad laminate (CCL),
a key base material used to make printed circuit boards. With a strong
commitment to R&D, it has moved up the value chain through the years.
Chroma ATE is a leading provider of precision test and measurement
instruments. The company has a strong market position due to its innovative
products and solutions, which are widely used in various industries such as
electronics, automotive, and renewable energy.
2.8%
Total assets
Affle India
2.8%
Total assets
Precision Tsugami China
Affle India operates a data platform that helps direct digital advertising. It
is dominant in India where digitalisation has reached an inflection point. The
company has also pursued a broader emerging markets growth strategy and now
has a meaningful presence in Southeast Asia and Latin America.
The company is an established maker of high precision machine tools and its
emphasis on innovation and quality, along with its strong customer
relationships, positions it well for sustained growth in the Chinese market.
2.7%
Total assets
Classys
2.6%
Total assets
Asian Terminals
Korea's Classys is a leading global aesthetic device maker in an exciting
fast-growing segment, with a superior brand image, a cost advantage versus
peers, and a long growth runway in overseas markets.
Asian Terminals is an operator, developer and investor of port terminals in
the Philippines. It has facilities in both Manila South Harbour and the Port
of Batangas, capturing the economic activity of its hinterland which arguably
is the epi-centre of trade in the Philippines.
2.6%
Total assets
Zhejiang Shuanghuan Driveline
2.5%
Total assets
Park Systems Corporation
Zhejiang Shuanghuan is a leading manufacturer of gears and other transmission
systems. Its strong engineering capabilities and commitment to quality have
earned it a solid reputation in the market where it is the leading supplier to
China's electric vehicle industry.
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.
2.5%
Total assets
NetEase Cloud Music
Netease Cloud Music is the third-ranked music-streaming app in China which is
popular with the younger demographic. The platform's high user stickiness is
attributed to its personalised playlists and music recommendations. The
company is profitable, generates positive cash flow, and boasts a strong net
cash position.
2.5%
Total assets
J.B. Chemicals & Pharmaceuticals
JB Chemicals is one of the top pharmaceutical companies in India by sales,
with a strong contract manufacturing business. The company has an attractive
financial profile, an experienced and capable management team, and is pursuing
multiple growth opportunities on which it is executing well.
Portfolio
As at 31 July 2025
Valuation Total Valuation
2025 assets 2024
Company Industry Country £'000 % £'000
Taiwan Union Technology Corp Electronic Equipment, Instruments & Components Taiwan 23,520 3.9 16,354
Chroma ATE Electronic Equipment, Instruments & Components Taiwan 21,849 3.7 13,474
Affle India Media India 16,863 2.8 14,652
Precision Tsugami China Machinery China 16,639 2.8 12,143
Classys Health Care Equipment & Supplies South Korea 15,912 2.7 -
Asian Terminals Transportation Infrastructure Philippines 15,297 2.6 12,623
Zhejiang Shuanghuan Driveline - A Auto Components China 15,265 2.6 10,012
Park Systems Corporation Electronic Equipment, Instruments & Components South Korea 14,887 2.5 18,070
NetEase Cloud Music Entertainment China 14,876 2.5 -
J.B. Chemicals & Pharmaceuticals Pharmaceuticals India 14,709 2.5 7,489
Top ten investments 169,817 28.6
M.P. Evans Group Food Products United Kingdom 14,247 2.4 14,751
Chung-Hsin Electric & Machinery Electronic Equipment, Instruments & Components Taiwan 14,160 2.4 -
HD Hyundai Marine Solution Industrial Transportation South Korea 14,132 2.4 8,355
AKR Corporindo Oil, Gas & Consumable Fuels Indonesia 14,087 2.4 17,804
Accton Technology Telecommunications Equipment Taiwan 13,437 2.2 -
Yantai China Pet Foods Food Products China 13,184 2.2 -
John Keells Holdings Industrial Conglomerates Sri Lanka 12,573 2.1 13,801
Bharti Hexacom Telecommunications Service Providers India 12,517 2.1 9,327
360 One Wam Capital Markets India 12,407 2.1 12,605
HD Korea Shipbuilding & Offshore Engineering Machinery South Korea 12,130 2.0 8,926
Top twenty investments 302,691 50.9
Vijaya Diagnostic Centre Health Care Providers & Services India 11,878 2.0 13,285
KFin Technologies Capital Markets India 11,573 2.0 13,532
Asia Vital Components Technology Hardware, Storage & Peripherals Taiwan 11,474 1.9 2,486
HD Hyundai Electric Electronic Equipment, Instruments & Components South Korea 11,252 1.9 -
Military Commercial Joint Stock Bank Banks Vietnam 11,012 1.9 7,957
FPT Corporation IT Services Vietnam 10,912 1.8 22,926
Tongcheng Travel Holdings Hotels, Restaurants & Leisure China 10,893 1.8 5,742
United Plantations Food Products Malaysia 10,704 1.8 9,768
Aptus Value Housing Finance Financial Services India 10,016 1.7 7,651
Aegis Logistics Oil, Gas & Consumable Fuels India 9,938 1.7 25,221
Top thirty investments 412,343 69.4
Kingdee International Software Software Hong Kong 9,810 1.6 -
CapitaLand India Trust Real Estate Management & Development Singapore 9,757 1.6 -
Cholamandalam Financial Consumer Finance India 9,675 1.6 -
Atour Lifestyle Hotels, Restaurants & Leisure China 9,632 1.6 -
UNO Minda Auto Components India 9,365 1.6 8,817
ITC Hotels Hotels, Restaurants & Leisure India 9,309 1.6 -
Mobile World Investment Corporation Specialty Retail Vietnam 8,993 1.5 -
Hang Lung Properties Real Estate Management & Development Hong Kong 8,643 1.5 4,383
Makalot Industrial Textiles, Apparel & Luxury Goods Taiwan 8,342 1.4 9,349
Mega Lifesciences (Foreign) Pharmaceuticals Thailand 8,222 1.4 12,507
Top forty investments 504,091 84.8
Parkwaylife Real Estate Real Estate Management & Development Singapore 8,010 1.4 -
Hansol Chemical Chemicals South Korea 7,934 1.3 5,980
Century Pacific Food Food Products Philippines 7,783 1.3 6,390
Hesai Group Auto Components China 7,526 1.3 -
Bank OCBC NISP Banks Indonesia 7,426 1.2 15,361
Newgen Software Technologies Software India 7,230 1.2 -
Poya International Broadline Retail Taiwan 6,926 1.2 -
Sunonwealth Electric Machine Industry Machinery Taiwan 6,806 1.1 7,500
LEENO Industrial Semiconductors & Semiconductor Equipment South Korea 6,415 1.1 12,036
Phoenix Mills Real Estate Management & Development India 6,315 1.1 -
Top fifty investments 576,462 97.0
Chief Telecom Diversified Telecommunication Services Taiwan 5,956 1.0 -
Aegis Vopak Terminals Oil, Gas & Consumable Fuels India 5,864 1.0 -
Hang Lung Group Real Estate Management & Development Hong Kong 5,749 1.0 4,383
Philippine Seven Consumer Staples Distribution Philippines 5,585 0.9 -
Ultrajaya Milk Industry & Trading Food Products Indonesia 5,406 0.9 8,510
Poly Medicure Health Care Equipment & Supplies India 5,279 0.9 -
Humanica (Foreign) Professional Services Thailand 3,883 0.6 5,068
Indosat Wireless Telecommunication Services Indonesia 3,393 0.6 -
KEI Industries Electronic Equipment, Instruments & Components India 3,313 0.6 -
First Sponsor Group (Warrants 21/03/2029) Real Estate Management & Development Singapore 61 - 221
Total investments 620,951 104.5
Net current liabilities (26,610) (4.5)
Total assets(A) 594,341 100.0
(A) Total assets less current liabilities.
Investment Case Studies
NetEase Cloud Music (China)
In which year did we first invest?
February 2025
% Holding:
2.5%
Where is their head office?
Hangzhou, China
What does the company do?
NetEase Cloud Music (NEM) is the second-largest operator in China's music
streaming market, competing head-to-head with Tencent Music.
Why do we like the company?
We are seeing a key shift in the way music platforms are perceived in China.
Previously, these platforms were viewed as pure streaming services that
delivered songs to listeners just like a jukebox. Now, however, the narrative
is shifting. Investors are starting to value these platforms as not just
low-margin distributors but rather community-based eco-systems with multiple
ways of monetising fan engagement, like social media businesses.
Within this context, we decided to invest in NEM, a fast-growing digital music
platform in China. It has carved out a niche by focusing on independent
artists and social engagement, differentiating itself from a pure streaming
platform. NEM also stands out from the crowd for its highly engaged Gen Z user
base, with 90% of its users born after 1990. It is dominant in China's Tier-1
and Tier-2 cities, which are economically active and more likely to pay for
digital content.
Unlike its main rival Tencent Music Entertainment, which splits its user base
across three apps, NEM has a single, unified platform. This gives it a clearer
brand identity and stronger user loyalty. Its personalised playlists and music
recommendations significantly enhance user experience and are popular with
younger users resulting in a customer retention rate of c95%. Over 40% of its
streamed content comes from independent musicians, which is cheaper and more
profitable than licensed music. By June 2025, NEM had more than 819,000
registered independent artists contributing 4.8 million music tracks to its
library.
Although NEM's monetisation is still in its infancy, the company is focused on
growing its user base through subscriptions that are priced below its peers.
This allows room for future price increases and paywall expansion without
losing users. Its partnership with Alibaba also boosts subscriber growth and
long-term stickiness. The company currently has more than 200 million monthly
active users but only 55 million paying subscribers -a ratio of 26% - which
indicates a long runway for revenue growth, alongside improving profitability
given the asset-light nature of the business.
Turning to its finances, NEM is profitable with positive cash flow and a
healthy balance sheet with its net cash position representing almost 20% of
its market capitalisation. Its margins are improving thanks to rising paying
users, better cost control and regulatory changes that have reduced licensing
costs. It is on track to have positive retained earnings by 2028-2029, which
we expect will enable management to do buybacks and pay dividends, boosting
shareholder returns.
How has the company performed since we invested in it?
Since we bought the stock in February 2025, NEM's share price has climbed
48.2% in sterling terms from March to July 2025. This reflects the company's
solid business performance. In the first half of 2025, NEM's monthly active
users (MAUs) kept growing steadily, while its daily‑to‑monthly user ratio
(DAU/MAU) stayed above 30%, showing healthy engagement. Subscription revenue
also rose 15.2% year‑on‑year, mainly thanks to more paying users, though
this was slightly offset by a lower average spend per user due to a changing
subscriber mix. NEM's profitability improved as well. Its gross margin reached
36.4%, up from the same period in 2024, driven by larger scale, better
monetisation of the core music business, and ongoing cost controls driving a
40.8% year-on-year increase in operating profit.
Mobile World (Vietnam)
In which year did we first invest?
March 2025
% Holding:
1.5%
Where is their head office?
Ho Chi Minh City, Vietnam
What does the company do?
Mobile World is a Vietnamese consumer electronics retailer that has branched
out into grocery. It is the biggest domestic grocery retailer with a broad
store network and first mover advantage in a country where informal food
markets are still prevalent.
Why do we like the company?
Most Vietnamese still buy their groceries at traditional wet markets.
According to NielsenIQ Vietnam, traditional trade channels including small
grocery stores and wet markets make up 75-83% of total market sales.
With modern grocery retail so heavily under-penetrated, there is plenty of
room for growth. Here is where we see Mobile World, a leading consumer
electronics retailer, stand out. It has a first-mover advantage in modern
grocery, through its Bach Hoa Xanh (BHX) chain, which operates more than 2,000
minimarts. These marts sell fresh food products, such as meat, fish, and
vegetables, along with other essential consumer goods. BHX has the highest
share of the modern minimart segment and differentiates itself by making fresh
food a core part of its offering, supported by improving cold chain logistics
and disciplined store management. We see BHX as a key beneficiary of the
structural shift towards organised retail in the country.
Beyond groceries, Mobile World is also Vietnam's largest retailer of phones
and electronics. Its core electronics chains - The Gioi Di Dong and Dien May
Xanh - generate strong cash flow. After two tough years, the domestic
electronics market is recovering on the back of lower interest rates and a
product replacement cycle. Mobile World is pushing services like buy now pay
later and 0% instalment options to capture more market share alongside
differentiated logistics offerings.
Another smaller but fast-growing business within the Group is pharmacy, with
Mobile World's An Khang chain having the third highest market share in the
country. The pharmacy retail market in Vietnam is also highly fragmented with
traditional shops accounting for the lion's share of the market. Management
aims to grow revenue and reach breakeven by improving store productivity.
Overall, we view Mobile World as an attractively valued company, backed by
experienced management with a good track record in retail execution. It is
well placed to capitalise on the underpenetrated modern retail and ecommerce
sectors, given the exciting growth dynamics as well as rising wealth levels in
Vietnam.
How has the company performed since we invested in it?
Since we first invested in it in March 2025, Mobile World's share price has
risen by 6.9% (from April to July 2025) in sterling terms. However there has
been broader short-term weakness in the domestic stock market, owing to tariff
concerns, policy uncertainty and mixed economic indicators. We are seeing
signs of a property recovery in the north, but it remains sluggish in the
south. Consumer spending continues to be lacklustre, including in the second
quarter of 2025. We remain confident that Mobile World's fundamentals will
continue to support its longer-term growth outlook.
Korea Shipbuilding & Offshore Engineering (Korea)
In which year did we first invest?
February 2024
% Holding:
2.0%
Where is their head office?
Gyeonggi Province, South Korea
What does the company do?
Korea Shipbuilding & Offshore Engineering (KSOE) is the world's largest
shipbuilder by capacity.
Why do we like the company?
KSOE's transition from a small-cap stock to a large-cap leader epitomises why
we like the company, and
how structural tailwinds have reshaped the
shipbuilding industry.
Founded in a small fishing village in 1972, the company has now grown into a
cash-generating group that controls the world's largest shipbuilding platform
through Hyundai Heavy Industries, Samho Heavy Industry (100%) and Hyundai Mipo
Dockyard. Together they hold about 17% of the global market share.
When we first invested in KSOE in early 2024, our investment case had rested
on strong fundamentals: tight industry supply, superior technology, a deep
order book and improving pricing, all of which are driving higher, more
durable margins and strong free cash flow.
Furthermore, key structural pillars support the outlook for KSOE. First, the
industry is in a long, replacement-led newbuild cycle. Ageing fleets and
tougher emissions rules mean that ship owners are ordering newer and cleaner
ships, lifting dock usage and delivery gains across
KSOE's yards.
Second, KSOE is gaining market share in eco-friendly ships due to its strong
research and development capabilities. It leads in LNG-dual fuel engines,
focusing on X-DF engines, which lower carbon emissions by reducing heavy-fuel
oil usage and are more profitable than fossil fuel engines. Notably, even
Chinese yards, which are KSOE's fiercest rivals, continue to outsource complex
engines to
the company.
Meanwhile, supply chain relocation and tariff uncertainty are pushing some
demand from Chinese to Korean
yards. This has narrowed historic price gaps and reinforced KSOE's win rate,
especially in eco-friendly
ships and containers.
Finally, Korea's Value Up programme to boost corporate governance reform could
prove pivotal in unlocking shareholder value. KSOE is cash-rich and still
trades at a big discount to its net asset value. We see room for the group to
lift its payouts, either by raising dividends and/or conducting share
buybacks, and to manage its capital more efficiently. All this could support a
sustained re-rating of the company.
How has the company performed since we invested in it?
Since we first invested in it in February 2024, KSOE's share price has risen
203.4% (March 2024 to July 2025) in sterling terms. We believe KSOE can
deliver sustainable returns for years to come, supported by quality assets,
industry tailwinds and growing cash payouts.
Directors' Report
The Directors present their Report and the audited financial statements for
the year ended 31 July 2025.
Results and Dividends
Details of the Company's results and proposed dividends are shown on page 23
of the published Annual Report and financial statements for the year ended 31
July 2025.
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 2025 so as to enable it to
comply with the ongoing requirements for investment trust status.
Individual Savings Accounts
The Company has conducted its affairs so as to satisfy the requirements as a
qualifying security for Individual Savings Accounts. The Directors intend that
the Company will continue to conduct its affairs in this manner.
Capital Structure, Buybacks and Issuance
The Company's capital structure is summarised in note 14 to the financial
statements.
At 31 July 2025, there were 146,335,588 fully paid Ordinary shares of 5p each
(2024 - 153,626,718 Ordinary shares of 5p each) in issue with a further
72,964,590 Ordinary shares of 5p held in treasury (2024 - 55,094,590 Ordinary
shares of 5p each held in treasury). During the year 17,870,000 Ordinary
shares were purchased in the market for treasury (2024 - 2,850,000). During
the period and up to the date of this report no new Ordinary shares were
issued for cash and no shares were sold from treasury Subsequent to the period
end, 3,245,000 Ordinary shares were purchased in the market for treasury.
On 13 December 2024, 46,704 units of Convertible Unsecured Loan Stock 2025
("CULS") were converted into 15,937 new Ordinary shares of 5p each. On 31
May 2025 the CULS issue matured and £35,578,398 nominal were redeemed by the
CULS Trustee at £1 per unit with the remaining balance of £30,949,618 units
converted into 10,562,933 new Ordinary shares. In accordance with the terms
of the CULS Issue, (as adjusted to reflect the five for one share subdivision
in February 2022), the conversion price of the CULS for both conversions was
determined at 293.0p nominal of CULS for one Ordinary share of 5p.
Voting Rights
Ordinary shareholders are entitled to vote on all resolutions which are
proposed at general meetings of the Company. The Ordinary shares carry a right
to receive dividends. On a winding up, after meeting the liabilities of the
Company, the surplus assets will be paid to Ordinary shareholders in
proportion to their shareholdings.
Gearing
On 1 December 2020 the Company issued a £30 million Senior Unsecured Loan
Note (the "Loan Note") at an annualised interest rate of 3.05%. The Loan Note
is unsecured, unlisted and denominated in sterling and due to mature in 2035.
The Loan Note ranks pari passu with the Company's other unsecured and
unsubordinated financial indebtedness.
On 31 May 2025 the Company entered into a new, secured, two-year
multi-currency revolving credit facility of £35 million with The Bank of Nova
Scotia, London Branch which will expire on 28 May 2027. Under the terms of
the Facility, the Company also has the option to increase the level of the
commitment to £50 million, subject to the lender's credit approval. £35
million has been drawn down under the new facility.
Management Agreement
The Company has appointed abrdn Fund Managers Limited ("aFML"), a wholly owned
subsidiary of Aberdeen Group Plc ("Aberdeen"), as its alternative investment
fund manager. aFML has been appointed to provide investment management, risk
management, administration and company secretarial services and promotional
activities to the Company. The Company's portfolio is managed by abrdn Asia
Limited ("abrdn Asia") by way of a group delegation agreement in place between
aFML and abrdn Asia. In addition, aFML has sub-delegated administrative and
secretarial services to abrdn Holdings Limited and promotional activities to
abrdn Investments Limited ("aIL").
Management Fee
The annual management fee is based upon the market capitalisation of the
Company and charged at 0.85% for the first £250,000,000, 0.60% for the next
£500,000,000 and 0.50% over £750,000,000. Investment management fees are
charged 25% to revenue and 75% to capital.
The management agreement may be terminated by either the Company or the
Manager on the expiry of three months' written notice. On termination, the
Manager would be entitled to receive fees which would otherwise have been due
to that date.
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 (2024 - nil) and has not made
any charitable donations during the year (2024 - nil).
Risk Management
Details of the financial risk management policies and objectives relative to
the use of financial instruments by the Company are set out in note 19 to the
financial statements.
The Board
The current Directors, C Black, K Shanmuganathan, L Cooper, A Finn, L
Macdonald and D Curling were the only Directors who served during the year.
Pursuant to Principle 23 of the AIC's Code of Corporate Governance which
recommends that all directors should be subject to annual re-election by
shareholders, all the members of the Board will retire at the AGM scheduled
for 8 December 2024 and offer themselves for re-election. Details of each
Director's contribution to the long-term success of the Company are provided
on page 47 of the published Annual Report and financial statements for the
year ended 31 July 2025.
The Board considers that there is a balance of skills and experience within
the Board relevant to the leadership and direction of the Company and that all
the Directors contribute effectively.
In common with most investment trusts, the Company has no employees.
Directors' & Officers' liability insurance cover has been maintained
throughout the year at the expense of the Company.
The Role of the Chair
The Chair is responsible for providing effective leadership to the Board, by
setting the tone of the Company, demonstrating objective judgement and
promoting a culture of openness and debate. The Chair facilitates the
effective contribution, and encourages active engagement, by each Director. In
conjunction with the Company Secretary, the Chair ensures that Directors
receive accurate, timely and clear information to assist them with effective
decision-making. The Chair leads the evaluation of the Board and individual
Directors, and acts upon the results of the evaluation process by recognising
strengths and addressing any weaknesses. The Chair also engages with major
shareholders and ensures that all Directors understand shareholder views.
Davina Curling has been appointed Senior Independent Director, acting as a
sounding board for the Chair and acting as an intermediary for other Directors
as applicable. The Audit Committee Chairman and Senior Independent Director
are both available to shareholders to discuss any concerns they may have.
Board Diversity
The Board recognises the importance of having a range of skilled, experienced
individuals with the right knowledge represented on the Board in order to
allow it to fulfil its obligations. The Board also recognises the benefits and
is supportive of, and will give due regard to, the principle of diversity in
its recruitment of new Board members. The Board will not display any bias for
age, gender, race, sexual orientation, socio-economic background, religion,
ethnic or national origins or disability in considering the appointment of
Directors. The Board will continue to ensure that all appointments are made on
the basis of merit against the specification prepared for each appointment
whilst also taking account of the targets set out in the FCA's Listing Rules,
which are set out overleaf.
The Board has resolved that the Company's year-end date is the most
appropriate date for disclosure purposes. The following information has been
provided by each Director through the completion of questionnaires.
Table for reporting on gender as at 31 July 2025
Number of board members Percentage of the board Number of senior positions Number in executive management Percentage of executive management
on the board
(CEO, CFO, Chair and SID)
Men 3 50% 2 n/a n/a
(note 4) (note 4)
Women 3 50% 1
(note 1) (note 3)
Not specified/prefer not to say - - -
Table for reporting on ethnic background as at 31 July 2025
Number of board members Percentage of the board Number of senior positions Number in executive management Percentage of executive management
on the board
(CEO, CFO, Chair and SID)
White British or other White 5 80% 2 n/a n/a
(including minority-white groups)
(note 3) (note 4) (note 4)
Mixed / Multiple Ethnic Groups - - -
Asian/Asian British 1 20% 1
(note 2)
Black/African/Caribbean/Black British - - -
Other ethnic group, including Arab - - -
Not specified/prefer not to say - - -
Notes:
1. The Company meets the target that at least 40% of Directors
are women as set out in LR 6.6.6R (9)(a)(i) for the year ended 31 July 2025.
2. The Company meets the target that at least one Director is
from a minority ethnic background as set out in LR 6.6.6R (9)(a)(iii).
3. The Company meets the target that at least one of the
senior positions is filled by a woman set out in LR 6.6.6R(a)(ii), for the
year to 31 July 2025 as Ms Davina Curling is Senior independent Director. The
Company is externally managed and does not have any executive staff
specifically it does not have either a CEO or CFO. The Board believes that
it is appropriate and reasonable that the role of Audit Committee Chairman on
an investment trust that has no executive staff should also be considered to
be a senior position.
4. This column is not applicable as the Company is externally
managed and does not have any executive staff.
Corporate Governance
The Company is committed to high standards of corporate governance. The Board
is accountable to the Company's shareholders for good governance and this
statement describes how the Company has applied the principles identified in
the UK Corporate Governance Code as published in July 2018 (the "UK Code"),
which is available on the Financial Reporting Council's (the "FRC") website:
frc.org.uk.
The Board has also considered the principles and provisions of the AIC Code of
Corporate Governance as published in February 2019 (the "AIC Code"). The AIC
Code addresses the principles and provisions set out in the UK Code, as well
as setting out additional provisions on issues that are of specific relevance
to the Company. The AIC Code is available on the AIC's website: theaic.co.uk.
The Board considers that reporting against the principles and provisions of
the AIC Code, which has been endorsed by the FRC provides more relevant
information to shareholders.
The Board confirms that, during the year, the Company complied with the
principles and provisions of the AIC Code and the relevant provisions of the
UK Code, except as set out below.
1. Interaction with the workforce (provisions 2, 5 and 6);
2. the role and responsibility of the chief executive (provisions 9
and 14);
3. previous experience of the chairman of a remuneration committee
(provision 32); and
4. executive directors' remuneration (provisions 33 and 36 to 40).
For the reasons set out in the AIC Code, and as explained in the UK Corporate
Governance Code, the Board considers that provisions 1 to 4 above are not
relevant to the position of the Company, being an externally managed
investment company. In particular, all of the Company's day-to-day management
and administrative functions are outsourced to third parties. As a result, the
Company has no executive directors, employees or internal operations. The
Company has therefore not reported further in respect of provisions 1 to 4
above. The full text of the Company's Corporate Governance Statement can be
found on the Company's website:
asia-focus.co.uk.
The Board is cognisant of the FRC's new Corporate Governance Code 2024
provisions effective for financial years commencing on 1 January 2025 and
expects to be in compliance with the relevant elements of this Code for the
year ending 31 July 2026.
During the year ended 31 July 2025, the Board had five scheduled meetings. In
addition, the Audit Committee met twice, and the Management Engagement
Committee met once and there has been a number of ad hoc Board meetings.
Between meetings the Board maintains regular contact with the Manager.
Directors have attended the following scheduled Board meetings and Committee
meetings during the year ended 31 July 2025 (with their eligibility to attend
the relevant meeting in brackets):
Director Board Audit Nomination Management Engagement
Committee
Committee
Committee
K Shanmuganathan (A) 5 (5) n/a 2 (2) 1 (1)
C Black 5 (5) 2 (2) 2 (2) 1 (1)
L. Cooper 5 (5) 2 (2) 2 (2) 1 (1)
A Finn 5 (5) 2 (2) 2 (2) 1 (1)
L Macdonald 3 (3) 2 (2) 2 (2) 1 (1)
D Curling 3 (3) 2 (2) 2 (2) 1 (1)
(A) The Chair is not a member of the Audit Committee but typically attends
each meeting by invitation.
Policy on Tenure
In compliance with the provisions of the AIC Code, it is expected that
Directors will serve in accordance with the nine-year time limits laid down by
the AIC Code.
Board Committees
Audit Committee
The Audit Committee Report is on pages 57 to 59 of the published Annual Report
and financial statements for the year ended 31 July 2025.
Nomination Committee
All appointments to the Board of Directors are considered by the Nomination
Committee which comprises all of the Directors. The Board's overriding
priority in appointing new Directors to the Board is to identify the candidate
with the best range of skills and experience to complement existing Directors.
The Board also recognises the benefits of diversity and its policy on
diversity is referred to in the Strategic Report on page 21 of the published
Annual Report and financial statements for the year ended 31 July 2025.
In March 2025 the Board undertook its annual evaluation of the Board,
Directors, the Chair and the Audit Committee which was conducted by
questionnaires facilitated by an independent external evaluation service
provider, Board Forms. Following the evaluation process, the Board noted
certain minor action points and concluded that, overall, it operates
effectively to promote the success of the Company and that each Director makes
an effective contribution to the collective actions of the Board.
The Nomination Committee has reviewed the contributions of each Director ahead
of their proposed re-elections at the AGM on 8 December 2025 Ms Black has
continued to bring significant financial promotion, marketing and
communications expertise to the Board and has been closely involved in the
appointment of external PR consultants during the year; Mr Shanmuganathan has
continued to bring his deep experience of Asia and has chaired all meetings
effectively; Mr Cooper has brought the weight of his significant local and up
to date Asian market experience to the Board's discussions; Mr Finn has
brought relevant and recent accounting and financial experience to the board
and has led the Audit Committee with expertise; Ms Macdonald has contributed
significantly to the regular investment discussions and Ms Curling has
contributed bringing her significant investment trust expertise to Board
discussions. For the foregoing reasons, the independent members of the
Nomination Committee have no hesitation in recommending the re-election of
each Director who will be submitting themselves for re-election at the AGM on
8 December 2025.
Management Engagement Committee
The Management Engagement Committee comprises all the Directors and is chaired
by Mr Finn. The Committee is responsible for reviewing the performance of the
Investment Manager and its compliance with the terms of the management and
secretarial agreement. The terms and conditions of the Investment Manager's
appointment, including an evaluation of fees, are reviewed by the Committee on
an annual basis. The Committee believes that the continuing appointment of the
Manager on the terms agreed is in the interests of shareholders as a whole.
Remuneration Committee
Under the UK Listing Authority rules, where an investment trust has only
non-executive directors, the Code principles relating to directors'
remuneration do not apply. Accordingly, matters relating to remuneration are
dealt with by the full Board, which acts as the Remuneration Committee, and is
chaired by the Chair.
The Company's remuneration policy is to set remuneration at a level to attract
individuals of a calibre appropriate to the Company's future development.
Further information on remuneration is disclosed in the Directors'
Remuneration Report on pages 53 to 55 of the published Annual Report and
financial statements for the year ended 31 July 2025.
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 Aberdeen 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 Aberdeen 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 Aberdeen 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 Aberdeen's operations and reports to the Board on a six monthly basis;
- written agreements are in place which specifically define the roles and
responsibilities of the Manager and other third-party service providers and,
where relevant, ISAE3402 Reports, a global assurance standard for reporting on
internal controls for service organisations, or their equivalents are
reviewed;
- the Board has considered the need for an internal audit function but,
because of the compliance and internal control systems in place within
Aberdeen, has decided to place reliance on the Manager's systems and internal
audit procedures; and
- at its October 2025 meeting, the Audit Committee carried out an annual
assessment of internal controls for the year ended 31 July 2025 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 2025. 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 reviewed stress testing on the portfolio covering reasonably
possible downside market scenarios with attention on the resulting liquidity
of the portfolio. The plausible downside scenarios modelled include
historical market events including the Global Financial crisis in 2008,
COVID-19 and other similar shocks and resulted in a reduction in portfolio
valuation of up to 26.1% in the worst case.
The Directors are mindful of the Principal Risks and Uncertainties disclosed
in the Strategic Report on pages 19 and 20 of the published Annual Report and
financial statements for the year ended 31 July 2025and they believe that the
Company has adequate financial resources to continue its operational existence
for a period of 12 months from the date of approval of this Annual Report.
They have arrived at this conclusion having confirmed that the Company's
diversified portfolio of realisable securities is sufficiently liquid and
could be used to meet short-term funding requirements were they to arise,
including in potentially less favourable market conditions. The Directors have
also reviewed the revenue and ongoing expenses forecasts for the coming year
and considered the Company's Statement of Financial Position as at 31 July
2025 which shows net current liabilities of £26.6 million at that date, and
do not consider this to be a concern due to the liquidity of the portfolio
which would enable the Company to meet any short term liabilities if required.
Accordingly, the Directors believe that it is appropriate to continue to adopt
the going concern basis in preparing the financial statements.
Management of Conflicts of Interest
The Board has a procedure in place to deal with a situation where a Director
has a conflict of interest. As part of this process, the Directors prepare a
list of other positions held and all other conflict situations that may need
to be authorised either in relation to the Director concerned or his connected
persons. The Board considers each Director's situation and decides whether to
approve any conflict, taking into consideration what is in the best interests
of the Company and whether the Director's ability to act in accordance with
his or her wider duties is affected. Each Director is required to notify the
Company Secretary of any potential, or actual, conflict situations that will
need authorising by the Board. Authorisations given by the Board are reviewed
at each Board meeting.
No Director has a service contract with the Company although Directors are
issued with letters of appointment upon appointment. The Directors' interests
in contractual arrangements with the Company are as shown in note 18 to the
financial statements. No other Directors had any interest in contracts with
the Company during the period or subsequently.
The Board has adopted appropriate procedures designed to prevent bribery.
The Company receives periodic reports from its service providers on the
anti-bribery policies of these third parties. It also receives regular
compliance reports from the Manager.
The Criminal Finances Act 2017 introduced a new corporate criminal offence of
"failing to take reasonable steps to prevent the facilitation of tax
evasion". The Board has confirmed that it is the Company's policy to conduct
all its business in an honest and ethical manner. The Board takes a
zero-tolerance approach to facilitation of tax evasion, whether under UK law
or under the law of any foreign country.
Accountability and Audit
The respective responsibilities of the Directors and the auditors in
connection with the financial statements are set out on pages 56 and 67
respectively of the published Annual Report and financial statements for the
year ended 31 July 2025.
Each Director confirms that:
- so far as he or she is aware, there is no relevant audit information of
which the Company's auditors are unaware; and,
- each Director has taken all the steps that they could reasonably be
expected to have taken as a Director in order to make themselves aware of any
relevant audit information and to establish that the Company's auditors are
aware of that information.
Additionally, there have been no important events since the year end that
impact this Annual Report.
The Directors have reviewed the independent auditors' procedures in connection
with the provision of non-audit services. No non-audit services were
provided by the independent auditors during the year and the Directors remain
satisfied that the auditors' objectivity and independence has been
safeguarded.
Independent Auditors
At the December 2024 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 2025:
Shareholder No. of Ordinary shares held % held
City of London Investment 27,423,247 18.7
Management Company
Interactive Investor (non-beneficial) 18,944,512 12.9
Allspring Global Investments 15,468,767 10.6
Hargreaves Lansdown (non-beneficial) 10,456,605 7.1
Funds managed by Aberdeen 12,208,249 8.3
Lazard Asset Management 6,217,814 4.2
Charles Stanley 4,359,108 3.0
On 18 September 2025 City of London Investment Management Company notified a
change in holding to 24,511,466 (16.9%) Ordinary shares. There have been no
other significant changes notified in respect of the above holdings between 31
July 2025 and 22 October 2025.
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 follows the UK Stewardship Code which aims to enhance the quality
of engagement by investors with investee companies in order to improve their
socially responsible performance.
Relations with Shareholders
The Directors place a great deal of importance on communication with
shareholders. The Annual Report is widely distributed to other parties who
have an interest in the Company's performance. Shareholders and investors may
obtain up to date information on the Company through the Manager's freephone
information service and the Company's website asia-focus.co.uk. The Company
responds to letters from shareholders on a wide range of issues. The Chair,
often in conjunction with another Director, meets with the largest
shareholders at least annually.
The Board's policy is to communicate directly with shareholders and their
representative bodies without the involvement of the Aberdeen Group (either
the Company Secretary or the Manager) in situations where direct communication
is required and usually a representative from the Board meets with major
shareholders on an annual basis to gauge their views.
The Notice of the Annual General Meeting, included within the Annual Report
and financial statements, is sent out at least 20 working days in advance of
the meeting. All shareholders have the opportunity to put questions to the
Board or the Manager, either formally at the Company's Annual General Meeting
or, where possible, at the subsequent buffet luncheon for shareholders. The
Company Secretary is available to answer general shareholder queries at any
time throughout the year.
Consumer Duty
The FCA's Consumer Duty rules were published in July 2022. The rules comprise
a fundamental component of the FCA's consumer protection strategy and aim to
improve outcomes for retail customers across the entire financial services
industry through the assessment of various outcomes, one of which is an
assessment of whether a product provides value. Under the Consumer Duty, the
Manager is the product 'manufacturer' of the Company and therefore the Manager
was required to publish its assessment of value from April 2023. Using a
specially developed assessment methodology, the Manager assessed the Company
as 'expected to provide fair value for the reasonably foreseeable future'. The
Board reviews the Manager's annual assessment in order to better understand
the Manager's basis of assessment and no concerns were identified with either
the assessment method or the outcome of the assessment.
Special Business at the Annual General Meeting
Directors' Authority to Allot Relevant Securities
Approval is sought in Resolution 11, an ordinary resolution, to renew the
Directors' existing general power to allot securities but will also, provide a
further authority (subject to certain limits), to allot shares under a fully
pre-emptive rights issue. The effect of Resolution 11 is to authorise the
Directors to allot up to a maximum of 95.5 million shares in total
(representing approximately 2/3 of the existing issued capital of the
Company), of which a maximum of 47.7 million shares (approximately 1/3 of the
existing issued share capital) may only be applied to fully pre-emptive rights
issues. This authority is renewable annually and will expire at the conclusion
of the next Annual General Meeting. The Board has no present intention to
utilise this authority.
Disapplication of Pre-emption Rights
Resolution 12 is a special resolution that seeks to renew the Directors'
existing authority until the conclusion of the next Annual General Meeting to
make limited allotments of shares for cash of up to 10% of the issued share
capital other than according to the statutory pre-emption rights which require
all shares issued for cash to be offered first to all existing shareholders.
This authority includes the ability to sell shares that have been held in
treasury (if any), having previously been bought back by the Company. The
Board has established guidelines for treasury shares and will only consider
buying in shares for treasury at a discount to their prevailing NAV and
selling them from treasury at or above the then prevailing NAV.
New shares issued in accordance with Resolution 12 and subject to the
authority to be conferred by Resolution 11 will always be issued at a premium
to the NAV per Ordinary share at the time of issue. The Board will issue new
Ordinary shares or sell Ordinary shares from treasury for cash when it is
appropriate to do so, in accordance with its current policy. It is therefore
possible that the issued share capital of the Company may change between the
date of this document and the Annual General Meeting and therefore the
authority sought will be in respect of 10% of the issued share capital as at
the date of the Annual General Meeting rather than the date of this document.
Purchase of the Company's Shares
Resolution 13 is a special resolution proposing to renew the Directors'
authority to make market purchases of the Company's shares in accordance with
the provisions contained in the Companies Act 2006 and the Listing Rules of
the Financial Conduct Authority. The minimum price to be paid per Ordinary
share by the Company will not be less than 5p per share (being the nominal
value) and the maximum price should not be more than the higher of (i) 5%
above the average of the middle market quotations for the shares for the
preceding five business days; and (ii) the higher of the last independent
trade and the current highest independent bid on the trading venue where the
purchase is carried out.
The Directors do not intend to use this authority to purchase the Company's
Ordinary shares unless to do so would result in an increase in NAV per share
and would be in the interests of shareholders generally. The authority sought
will be in respect of 14.99% of the issued share capital as at the date of the
Annual General Meeting rather than the date of this document.
The authority being sought in Resolution 13 will expire at the conclusion of
the next Annual General Meeting unless it is renewed before that date. Any
Ordinary shares purchased in this way will either be cancelled and the number
of Ordinary shares will be reduced accordingly or under the authority granted
in Resolution 12 above, may be held in treasury. During the year the Company
has not bought back any Ordinary shares for Treasury.
If Resolutions 11 to 13 are passed, then an announcement will be made on the
date of the Annual General Meeting which will detail the exact number of
Ordinary shares to which each of these authorities relate.
These powers will give the Directors additional flexibility going forward and
the Board considers that it will be in the interests of the Company that such
powers be available. Such powers will only be implemented when, in the view of
the Directors, to do so will be to the benefit of shareholders as a whole.
Notice of Meetings
Resolution 14 is a special resolution seeking to authorise the Directors to
call general meetings of the Company (other than Annual General Meetings) on
14 days' notice. This approval will be effective until the Company's next
Annual General Meeting in 2026. In order to utilise this shorter notice
period, the Company is required to ensure that shareholders are able to vote
electronically at the general meeting called on such short notice. The
Directors confirm that, in the event that a general meeting is called, they
will give as much notice as practicable and will only utilise the authority
granted by Resolution 14 in limited and time sensitive circumstances.
Dividend Policy
As a result of the timing of the payment of the Company's quarterly dividends,
the Company's Shareholders are unable to approve a final dividend each year.
In line with good corporate governance, the Board therefore proposes to put
the Company's dividend policy to Shareholders for approval at the Annual
General Meeting and on an annual basis thereafter.
The Company's dividend policy shall be that dividends on the Ordinary Shares
are payable quarterly in relation to periods ending October, January, April
and July. It is intended that the Company will pay quarterly dividends
consistent with the expected annual underlying portfolio yield. The Company
has the flexibility in accordance with its Articles to make distributions from
capital. Resolution 3, an ordinary resolution, will seek shareholder approval
for the dividend policy.
Recommendation
Your Board considers Resolutions 11 to 14 to be in the best interests of the
Company and its members as a whole and most likely to promote the success of
the Company for the benefit of its members as a whole. Accordingly, your
Board unanimously recommends that shareholders should vote in favour of
Resolutions 11 to 14 to be proposed at the AGM, as they intend to do in
respect of their own beneficial shareholdings amounting to 41,947 Ordinary
shares.
By order of the Board
abrdn Holdings Limited -Secretaries
280 Bishopsgate
London EC2M 4AG
22 October 2025
Statement of Comprehensive Income
Year ended 31 July 2025 Year ended 31 July 2024
Revenue Capital Total Revenue Capital Total
Notes £'000 £'000 £'000 £'000 £'000 £'000
Gains on investments 10 - 83,832 83,832 - 39,271 39,271
Income 3 15,203 - 15,203 17,272 - 17,272
Exchange losses - (969) (969) - (1,052) (1,052)
Investment management fees 4 (819) (2,457) (3,276) (769) (2,307) (3,076)
Administrative expenses 5 (1,505) (77) (1,582) (1,306) - (1,306)
Net return before finance costs and taxation 12,879 80,329 93,208 15,197 35,912 51,109
Finance costs 6 (543) (1,630) (2,173) (501) (1,504) (2,005)
Net return before taxation 12,336 78,699 91,035 14,696 34,408 49,104
Taxation 7 (1,235) 135 (1,100) (1,407) (10,372) (11,779)
Net return after taxation 11,101 78,834 89,935 13,289 24,036 37,325
Return per share (pence): 9
Basic 7.44 52.82 60.26 8.59 15.53 24.12
Diluted 7.16 50.32 57.48 8.08 14.77 22.85
For the period applicable before the repayment of Convertible Unsecured Loan
stock during the year ended 31 July 2025 the conversion option for potential
Ordinary shares within the Convertible Unsecured Loan Stock was dilutive to
the revenue and capital return per Ordinary share (2024 - dilutive to revenue
and capital return).
The total column of this statement represents the profit and loss account of
the Company. There is no other comprehensive income and therefore the net
return after taxation is also the total comprehensive income for the year.
All revenue and capital items in the above statement derive from continuing
operations.
The accompanying notes are an integral part of the financial statements.
Statement of Financial Position
As at As at
31 July 2025 31 July 2024
Notes £'000 £'000
Non-current assets
Investments at fair value through profit or loss 10 620,951 564,797
Current assets
Debtors and prepayments 11 5,728 3,808
Cash and cash equivalents 12,512 12,703
18,240 16,511
Creditors: amounts falling due within one year
Other creditors 12 (9,979) (2,483)
Bank Loan 12 (34,871) -
2.25% Convertible Unsecured Loan Stock 2025 12 - (36,368)
(44,850) (38,851)
Net current liabilities (26,610) (22,340)
Total assets less current liabilities 594,341 542,457
Non-current liabilities
Creditors: amounts falling due after more than one year
3.05% Senior Unsecured Loan Note 2035 13 (29,913) (29,906)
Deferred tax liability on Indian capital gains 13 (5,835) (10,291)
(35,748) (40,197)
Net assets 558,593 502,260
Capital and reserves
Called up share capital 14 10,965 10,436
Capital redemption reserve 2,062 2,062
Share premium account 90,962 60,495
Equity component of 2.25% Convertible Unsecured Loan Stock 2025 13 - 1,057
Capital reserve 15 435,081 409,798
Revenue reserve 19,523 18,412
Total shareholders' funds 558,593 502,260
Net asset value per share (pence):
Basic 16 381.72 326.94
Diluted 16 381.72 324.26
The financial statements were approved by the Board of Directors and
authorised for issue on 22 October 2025 and were signed on behalf of the Board
by:
Krishna Shanmuganathan
Chair
The accompanying notes are an integral part of the financial statements.
Statement of Changes in Equity
For the year ended 31 July 2025
Capital Share Equity
Share redemption premium Component Capital Revenue
capital reserve account CULS 2025 reserve reserve Total
Note £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 August 2024 10,436 2,062 60,495 1,057 409,798 18,412 502,260
Issue of Ordinary shares following conversion of 2.25% CULS 2025 12 529 - 30,467 (1,057) - 1,057 30,996
Purchase of own shares to treasury 14 - - - - (53,551) - (53,551)
Net return after taxation - - - - 78,834 11,101 89,935
Dividends paid 8 - - - - - (11,047) (11,047)
Balance at 31 July 2025 10,965 2,062 90,962 - 435,081 19,523 558,593
For the year ended 31 July 2024
Capital Share Equity
Share redemption premium Component Capital Revenue
capital reserve account CULS 2025 reserve reserve Total
Note £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 August 2023 10,435 2,062 60,441 1,057 393,238 18,551 485,784
Issue of Ordinary shares following conversion of 2.25% CULS 2025 12 1 - 54 - - - 55
Purchase of own shares to treasury 14 - - - - (7,476) - (7,476)
Net return after taxation - - - - 24,036 13,289 37,325
Dividends paid 8 - - - - - (13,428) (13,428)
Balance at 31 July 2024 10,436 2,062 60,495 1,057 409,798 18,412 502,260
The accompanying notes are an integral part of the financial statements.
Statement of Cash Flows
Year ended Year ended
31 July 2025 31 July 2024
Notes £'000 £'000
Cash flows from operating activities
Net return before finance costs and tax 93,208 51,109
Adjustments for:
Dividend income 3 (14,715) (16,802)
Interest income 3 (488) (470)
Dividends received 13,849 16,561
Interest received 463 459
Interest paid (2,060) (1,758)
Gains on investments 10 (83,832) (39,271)
Foreign exchange movements 969 1,052
(Increase)/decrease in prepayments (31) 3
(Increase) in other debtors - (2)
Increase in other creditors 21 31
Overseas withholding tax suffered 7 (658) (1,509)
Net cash inflow from operating activities 6,726 9,403
Cash flows from investing activities
Purchase of investments (277,566) (199,205)
Sales of investments 311,306 223,289
Capital gains tax on sales (4,321) (4,690)
Net cash inflow from investing activities 29,419 19,394
Cash flows from financing activities
Purchase of own shares for treasury (53,601) (7,421)
Redemption of 2.25% Convertible Unsecured Loan Stock 2025 (5,578) -
Drawdown of Loan 35,000 -
Loan arrangement fees (141) -
Equity dividends paid 8 (11,047) (13,428)
Net cash outflow from financing activities (35,367) (20,849)
Increase in cash and cash equivalents 778 7,948
Analysis of changes in cash and cash equivalents
Opening balance 12,703 5,807
Increase in cash and short term deposits 778 7,948
Foreign exchange movements (969) (1,052)
Closing balance 12,512 12,703
Represented by:
Money market funds 8,721 8,486
Cash and short term deposits 3,791 4,217
12,512 12,703
The accompanying notes are an integral part of the financial statements.
Notes to the Financial Statements
For the year ended 31 July 2025
1. Principal activity
The Company is a closed-end investment company, registered in England &
Wales No 03106339, with its Ordinary shares being listed on the London Stock
Exchange.
2. Accounting policies
(a) Basis of preparation. The financial statements have been prepared in
accordance with Financial Reporting Standard 102, the Companies Act 2006 and
the AIC's Statement of Recommended Practice 'Financial Statements of
Investment Trust Companies and Venture Capital Trusts' issued in July 2022.
The financial statements are prepared in Sterling which is the functional
currency of the Company and rounded to the nearest £'000. They have also been
prepared on a going concern basis and on the assumption that approval as an
investment trust will continue to be granted by HMRC.
Going concern. In accordance with the Financial Reporting Council's guidance
the Directors have undertaken a rigorous review of the Company's ability to
continue as a going concern. The Company's assets consist of equity shares in
companies listed on recognised stock exchanges and are considered by the Board
to be realisable within a relatively short timescale under normal market
conditions. The Board has set overall limits for borrowing and reviews
regularly the Company's level of gearing, cash flow projections and compliance
with banking covenants.
The Directors are mindful of the Principal Risks and Uncertainties disclosed
in the Strategic Report on pages 19 and 20 of the published Annual Report and
financial statements for the year ended 31 July 2025 and they believe that the
Company has adequate financial resources to continue its operational existence
for a period of 12 months from the date of approval of this Annual Report.
They have arrived at this conclusion having confirmed that the Company's
diversified portfolio of realisable securities is sufficiently liquid and
could be used to meet short-term funding requirements were they to arise,
including in potentially less favourable market conditions. The Directors have
also reviewed the revenue and ongoing expenses forecasts for the coming year
and considered the Company's Statement of Financial Position as at 31 July
2025 which shows net current liabilities of £26.6 million at that date, and
do not consider this to be a concern due to the liquidity of the portfolio
which would enable the Company to meet any short term liabilities if required.
Accordingly, the Directors believe that it is appropriate to continue to adopt
the going concern basis in preparing the financial statements.
The Company introduced a performance-linked conditional tender offer for up to
25% of the issued share capital in 2022. Shareholders will be offered the
opportunity to realise a proportion of their holding for cash at a level close
to NAV less costs in the event the Company's NAV total return underperforms
the benchmark over the five year period measured from 1 August 2021. The
latest performance data covering the period since the introduction of the
tender offer to 31 July 2025 shows a NAV total return of 37.0% versus the
benchmark which has returned 25.9%.
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 at close of business. Gains and losses
arising from changes in fair value and disposals are included as a capital
item in the Statement of Comprehensive Income and are ultimately recognised in
the capital reserve.
(c) Borrowings. Bank loans are initially recognised at cost, being the fair value
of the consideration received, net of any issue expenses. Subsequently, they
are measured at amortised cost using the effective interest method. Finance
charges are accounted for on an accruals basis using the effective interest
rate method. The Company charges 25% of finance charges to revenue and 75% to
capital.
(d) Income. Dividends, including taxes deducted at source, are included in revenue
by reference to the date on which the investment is quoted ex-dividend.
Special dividends are reviewed on a case-by-case basis and may be credited to
capital, if circumstances dictate. Dividends receivable on equity shares where
no ex-dividend date is quoted are brought into account when the Company's
right to receive payment is established. Fixed returns on non-equity shares
are recognised on a time apportioned basis so as to reflect the effective
yield on shares. Other returns on non-equity shares are recognised when the
right to return is established. Where the Company has elected to receive its
dividends in the form of additional shares rather than cash, the amount of the
cash dividend is recognised as income. Any excess in the value of the shares
received over the amount of the cash dividend is recognised in capital
reserves. Interest receivable on bank balances is dealt with on an accruals
basis.
(e) Expenses. Expenses are accounted for on an accruals basis. Expenses are
charged through the revenue column of the Statement of Comprehensive Income
except as follows:
- expenses directly relating to the acquisition or disposal of an investment,
which are charged to the capital column of the Statement of Comprehensive
Income and are separately identified and disclosed in note 10; and
- the Company charges 25% of investment management fees and finance costs to
the revenue column and 75% to the capital column of the Statement of
Comprehensive Income, in accordance with the Board's expected long term return
in the form of revenue and capital gains respectively from the investment
portfolio of the Company.
(f) Taxation. The tax expense represents the sum of tax currently payable and
deferred tax. Any tax payable is based on the taxable profit for the year.
Taxable profit differs from net profit as reported in the Statement of
Comprehensive Income because it excludes items of income or expense that are
taxable or deductible in other years and it further excludes items that are
never taxable or deductible. The Company's liability for current tax is
calculated using tax rates that were applicable at the Statement of Financial
Position date.
Deferred taxation is recognised in respect of all timing differences that have
originated but not reversed at the Statement of Financial Position date, where
transactions or events that result in an obligation to pay more tax in the
future or right to pay less tax in the future have occurred at the Statement
of Financial Position date. This is subject to deferred tax assets only being
recognised if it is considered more likely than not that there will be
suitable profits from which the future reversal of the underlying timing
differences can be deducted. Timing differences are differences arising
between the Company's taxable profits and its results as stated in the
financial statements which are capable of reversal in one or more subsequent
periods. Deferred tax is measured on a non-discounted basis at the tax rates
that are expected to apply in the periods in which timing differences are
expected to reverse, based on tax rates and laws enacted or substantively
enacted at the Statement of Financial Position date.
The tax effect of different items of income/gain and expenditure/loss is
allocated between capital and revenue within the Statement of Comprehensive
Income on the same basis as the particular item to which it relates using the
Company's effective rate of tax for the year, based on the marginal basis.
Gains and losses on sale of investments purchased and sold in India after 1
April 2017 are liable to capital gains tax in India. At each year end date, a
provision for capital gains tax is calculated based upon the Company's
realised and unrealised gains and losses. There are two rates of tax:
short-term and long-term. The short-term rate of tax is applicable to
investments held for less than 12 months and the long-term rate of tax is
applicable to investments held for more than twelve months. The provision is
recognised in the Statement of Financial Position and the year-on-year
movement in the provision is recognised in the Statement of Comprehensive
Income.
(g) Foreign currency. Assets and liabilities in foreign currencies are translated
at the rates of exchange ruling on the Statement of Financial Position date.
Transactions involving foreign currencies are converted at the rate ruling on
the date of the transaction. Gains and losses on dividends receivable are
recognised in the Statement of Comprehensive Income and are reflected in the
revenue reserve. Gains and losses on the realisation of investments in foreign
currencies and unrealised gains and losses on investments in foreign
currencies are recognised in the Statement of Comprehensive Income and are
then transferred to the capital reserve.
(h) Convertible Unsecured Loan Stock. Convertible Unsecured Loan Stock ("CULS")
issued by the Company were 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, was
derived from the difference between the issue proceeds of the CULS and the
fair value assigned to the liability. The liability component was subsequently
measured at amortised cost using the effective interest rate and the equity
component remained unchanged.
Direct expenses associated with the CULS issue were allocated to the liability
and equity components in proportion to the split of the proceeds of the issue.
Expenses allocated to the liability component were amortised over the life of
the instrument using the effective interest rate.
On conversion of CULS, equity was issued and the liability component was
derecognised. The original equity component recognised at inception remained
in equity. No gain or loss was recognised on conversion.
On maturity of the remaining CULS on 31 May 2025, equity was issued and the
liability component was derecognised. The original equity component recognised
at inception was removed from equity. All gains and losses were recognised on
maturity.
(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 (2024 - 5p). This is not a
distributable reserve.
Capital reserve. This reserve reflects any gains or losses on investments
realised in the period along with any movement in the fair value of
investments held that have been recognised in the Statement of Comprehensive
Income. These include gains and losses from foreign currency exchange
differences arising on monetary assets and liabilities except for dividend
income receivable. Share buybacks to be held in treasury, which is considered
to be a distribution to shareholders, is also deducted from this reserve. The
realised gains part of this reserve is also distributable for the purpose of
funding dividends.
Revenue reserve. This reserve reflects all income and costs which are
recognised in the revenue column of the Statement of Comprehensive Income. The
revenue reserve is distributable by way of dividend. The amount of the revenue
reserve as at 31 July 2025 may not be available at the time of any future
distribution due to movements between 31 July 2025 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 33
of the published Annual Report and financial statements for the year ended 31
July 2025.
3. Income
2025 2024
£'000 £'000
Income from investments
Overseas dividends 14,012 16,007
UK dividend income 702 795
Stock dividends 1 -
14,715 16,802
Other income
Deposit interest 69 150
Interest from money market funds 419 320
488 470
Total income 15,203 17,272
4. Investment management fees
2025 2024
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Investment management fees 819 2,457 3,276 769 2,307 3,076
The Company has an agreement with abrdn Fund Managers Limited ("aFML") for the
provision of management services, under which investment management services
have been delegated to abrdn Asia Limited ("abrdn Asia").
The management fee is payable monthly in arrears, on a tiered basis, exclusive
of VAT where applicable, based on market capitalisation at an annual rate of
0.85% for the first £250 million, 0.6% for the next £500 million and 0.5%
thereafter. Market capitalisation is defined as the Company's closing Ordinary
share price quoted on the London Stock Exchange multiplied by the number of
Ordinary shares in issue (excluding those held in Treasury), as determined on
the last business day of the calendar month to which the remuneration relates.
The balance due to the Manager at the year end was £595,000 (2024 -
£534,000) which represents two months' fees (2024 - two months).
The management agreement may be terminated by either the Company or the
Manager on the expiry of three months' written notice. On termination, the
Manager would be entitled to receive fees which would otherwise have been due
to that date.
5. Administrative expenses
2025 2024
£'000 £'000
Administration fees(A) 130 119
Directors' fees(B) 209 173
Promotional activities(C) 238 210
Auditors' remuneration(D)
- fees payable to the auditors for the audit of the annual financial 60 52
statements
Custodian charges 393 364
Depositary fees 51 49
Registrar fees 79 43
Legal and professional fees 173 57
Other expenses 172 239
1,505 1,306
(A) The Company has an agreement with aFML for the provision of administration
services. The administration fee is payable quarterly in advance and is
adjusted annually to reflect the movement in the Retail Prices Index. The
balance due to aFML at the year end was £32,000 (2024 - £60,000). The
agreement is terminable on six months' notice.
(B) No pension contributions were made in respect of any of the Directors.
(C) Under the management agreement, the Company has also appointed aFML to
provide promotional activities to the Company by way of its participation in
the Aberdeen Investment Trust Share Plan and ISA. aFML has delegated this role
to Aberdeen Group plc. The total fee paid and payable under the agreement in
relation to promotional activities was £238,000 (2024 - £210,000). There was
a £82,000 (2024 - £173,000) balance due to Aberdeen Group plc at the year
end.
(D) There are no non-audit fees charged.
6. Finance costs
2025 2024
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Interest on Bank Overdraft 4 13 17 5 15 20
Interest on Bank Loans 87 262 349 - - -
Interest on 3.05% Senior Unsecured Loan Note 2035 231 692 923 231 692 923
Interest on 2.25% CULS 2025 169 508 677 203 611 814
Notional interest on 2.25% CULS 2025 32 96 128 39 115 154
Amortisation of 2.25% CULS 2025 issue expenses 20 59 79 23 71 94
543 1,630 2,173 501 1,504 2,005
Finance costs have been charged 25% to revenue and 75% to capital.
7. Taxation
2025 2024
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
(a) Analysis of charge for the year
Indian capital gains tax charge on sales - 4,321 4,321 - 4,690 4,690
Overseas taxation 1,235 - 1,235 1,407 - 1,407
Total current tax charge for the year 1,235 4,321 5,556 1,407 4,690 6,097
Deferred tax charge on Indian capital gains - (4,456) (4,456) - 5,682 5,682
Total tax charge for the year 1,235 (135) 1,100 1,407 10,372 11,779
The Company has recognised a deferred tax liability of £5,835,000 (2024 -
£10,291,000) on capital gains which may arise if Indian investments are sold.
The Company has not provided for UK deferred tax on any realised and
unrealised gains or losses of investments as it is exempt from UK tax on these
items due to its status as an investment trust company.
At 31 July 2025 the Company had surplus management expenses and loan
relationship deficits of £88,979,000 (2024 - £82,534,000) 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
£22,245,000 (2024 - £20,634,000).
(b) Factors affecting the tax charge for the year. The tax assessed for the year
is lower than the current standard rate of corporation tax in the UK for a
large company of 25% (2024 - lower). The differences are explained below:
2025 2024
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Return before taxation 12,336 78,699 91,035 14,696 34,408 49,104
Return multiplied by the standard tax rate of corporation tax of 25% (2024 - 3,084 19,675 22,759 3,674 8,602 12,276
25%)
Effects of:
Gains on investments not taxable - (20,958) (20,958) - (9,818) (9,818)
Exchange losses - 242 242 - 263 263
Overseas tax 1,235 - 1,235 1,407 - 1,407
Movement in deferred tax liability on Indian capital gains - (4,456) (4,456) - 5,682 5,682
Indian capital gains tax charged on sales - 4,321 4,321 - 4,690 4,690
UK dividend income (176) - (176) (199) - (199)
Non-taxable dividend income (3,503) - (3,503) (4,002) - (4,002)
Expenses not deductible for tax purposes 5 19 24 9 - 9
Movement in unutilised management expenses 712 614 1,326 634 577 1,211
Movement in unutilised loan relationship deficits (122) 408 286 (116) 376 260
Total tax charge for the year 1,235 (135) 1,100 1,407 10,372 11,779
8. Dividends
2025 2024
£'000 £'000
Fourth interim dividend for 2024 - 1.62p (2023 - 1.61p) 2,488 2,515
Special dividend for 2024 - 1.00p (2023 - 2.25p) 1,511 3,498
First interim dividend for 2025 - 1.6p (2024 - 1.6p) 2,417 2,488
Second interim dividend for 2025 - 1.6p (2024 - 1.6p) 2,395 2,466
Third interim dividend for 2025 - 1.6p (2024 - 1.6p) 2,236 2,461
11,047 13,428
Dividends declared and paid subsequent to the year end are not included as a
liability in the financial statements.
We set out below the total dividends paid and proposed in respect of the
financial year, which is the basis on which the requirements of Sections 1158
- 1159 of the Corporation Tax Act 2010 are considered. The revenue available
for distribution by way of dividend for the current year is £11,101,000
(2024- £13,289,000).
2025 2024
£'000 £'000
First interim dividend for 2025 - 1.6p (2024 - 1.6p) 2,417 2,488
Second interim dividend for 2025 - 1.6p (2024 - 1.6p) 2,395 2,466
Third interim dividend for 2025 - 1.6p (2024 - 1.6p) 2,236 2,461
Fourth interim dividend for 2025 - 1.63p (2024 - 1.62p) 2,372 2,488
Proposed special dividend for 2025 - nil (2024 -1.00p) - 1,511
9,420 11,414
9. Return per share
2025 2024
Revenue Capital Total Revenue Capital Total
Basic
Net return after taxation (£'000) 11,101 78,834 89,935 13,289 24,036 37,325
Weighted average number of shares in issue(A) 149,238,494 154,769,839
Return per share (p) 7.44 52.82 60.26 8.59 15.53 24.12
2025 2024
Diluted Revenue Capital Total Revenue Capital Total
Net return after taxation (£'000) 11,302 79,438 90,740 13,511 24,704 38,215
Weighted average number of shares in issue(AB) 157,863,004 167,264,923
Return per share (p) 7.16 50.32 57.48 8.08 14.77 22.85
(A) Calculated excluding shares held in treasury.
(B) The calculation of the diluted total, revenue and capital returns per
Ordinary share is carried out in accordance with IAS 33, "Earnings per Share".
For the purpose of calculating total, revenue and capital returns per Ordinary
share, the number of Ordinary shares used is the weighted average number used
in the basic calculation plus the number of Ordinary shares deemed to be
issued for no consideration on exercise of all 2.25% Convertible Unsecured
Loan Stock 2025 ("CULS") pro-rated for the period in which the CULS were
active. The calculations indicate that the exercise of CULS would result in an
increase in the weighted average number of Ordinary shares of 8,624,510 (2024
- 12,495,085) to 157,863,004 (2024 - 167,264,923) Ordinary shares.
For the year ended 31 July 2025 the assumed conversion for potential Ordinary
shares was dilutive to the revenue and the capital return per Ordinary share
(2024 - dilutive to the revenue return and the capital return). Where dilution
occurs, the net returns are adjusted for interest charges and issue expenses
relating to the CULS (2025 - £805,000; 2024 - £890,000). Total earnings for
the period are tested for dilution. Once dilution has been determined
individual revenue and capital earnings are adjusted.
10. Investments at fair value through profit or loss
2025 2024
£'000 £'000
Opening book cost 407,225 397,237
Opening investment holding gains 157,572 152,435
Opening fair value 564,797 549,672
Analysis of transactions made during the year
Purchases at cost 285,202 200,360
Sales proceeds received (312,880) (224,506)
Gains on investments 83,832 39,271
Closing fair value 620,951 564,797
Closing book cost 451,432 407,225
Closing investment gains 169,519 157,572
Closing fair value 620,951 564,797
2025 2024
£'000 £'000
Investments listed on an overseas investment exchange 606,704 550,046
Investments listed on the UK investment exchange 14,247 14,751
620,951 564,797
The Company received £312,880,000 (2024 - £224,506,000) from investments
sold in the period. The book cost of these investments when they were
purchased was £240,995,000 (2024 - £190,372,000). These investments have
been revalued over time and until they were sold any unrealised gains/losses
were included in the fair value of the investments.
Transaction costs. During the year expenses were incurred in acquiring or
disposing of investments classified as fair value through profit or loss.
These have been expensed through capital and are included within
gains/(losses) on investments in the Statement of Comprehensive Income. The
total costs were as follows:
2025 2024
£'000 £'000
Purchases 290 257
Sales 625 446
915 703
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
2025 2024
£'000 £'000
Amounts due from brokers for sales 4,134 2,560
Other debtors 477 897
Prepayments and accrued income 1,117 351
5,728 3,808
None of the above amounts is past their due date or impaired (2024 - same).
12. Creditors: amounts falling due within one year
2025 2024
(a) Other creditors £'000 £'000
Amounts due to brokers for purchases 8,791 1,155
Amounts due for the purchase of own shares to treasury - 56
Other creditors 1,188 1,272
9,979 2,483
2025 2024
(b) Bank Loan £'000 £'000
Bank Loan 35,000 -
Unamortised Bank Loan issue expenses (129) -
34,871 -
On 30 May 2025 the Company entered into a two year, £50 million
multi-currency revolving bank credit facility with the Bank of Nova Scotia,
London Branch. The agreement of this facility incurred costs of £140,000
which will be amortised over the life of the agreement.
At 31 July 2025, the Company had drawn down £35 million at a rate of 5.41%
with a maturity date of 28 August 2025.
2025 2024
Number of Liability Equity Number of Liability Equity
units component component units component component
(c) 2.25% CULS 2025 £'000 £'000 £'000 £'000 £'000 £'000
Balance at beginning of year 36,574 36,368 1,057 36,629 36,175 1,057
Conversion of 2.25% CULS 2025 (30,996) (30,996) - (55) (55) -
Redemption of 2.25% CULS 2025 (5,578) (5,578) (1,057) - - -
Notional interest on CULS transferred to revenue reserve - 128 - - 154 -
Amortisation and issue expenses - 78 - - 94 -
Balance at end of year - - - 36,574 36,368 1,057
As at 31 July 2025, there were £nil (2024 - £36,574,720) nominal amount of
2.25% CULS 2025 in issue. The loan stock was previously 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 (2024 - 293.0p) nominal of CULS.
Interest was payable on the CULS on 31 May and 30 November each year,
commencing on 30 November 2018.
The CULS were 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 detailed
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.
On 13 December 2024, the Company received elections from CULS holders to
convert £46,704 nominal amount of CULS into 15,937 Ordinary shares. On or
before 31 May 2025, being the final conversion date for CULS holders to elect
to convert to Ordinary shares, the Company converted £30,949,618
(£19,749,216 by holders' request and £11,200,402 by request from the
Trustee) nominal amount of CULS into 10,562,933 Ordinary shares (in the year
ended 31 July 2024, £54,939 nominal amount of CULS was converted into 18,740
Ordinary shares). Additionally, on 31 May 2025, £5,578,398 nominal amount of
CULS was redeemed by the Trustee following requests from CULS holders who did
not wish to exercise their conversion right.
The fair value of the 2025 CULS at 31 July 2024 was £35,441,000.
13. Non-current liabilities
2025 2024
(a) Loan Note £'000 £'000
3.05% Senior Unsecured Loan Note 2035 30,000 30,000
Unamortised Loan Note issue expenses (87) (94)
29,913 29,906
On 1 December 2020 the Company issued £30,000,000 of a 15 year loan note at a
fixed rate of 3.05%. Interest is payable in half yearly instalments in June
and December and the Loan Note is due to be redeemed at par on 1 December
2035. The issue costs of £118,000 will be amortised over the life of the loan
note. There is also a shelf facility of £35,000,000, which expires on 1
December 2025 and has not been utilised. The shelf facility is uncommitted and
subject to credit committee approval in advance of any drawing. The Company
has complied with the Note Purchase Agreement that the ratio of total
borrowings to adjusted net assets will not exceed 0.20 to 1.00, that the ratio
of total borrowings to adjusted net liquid assets will not exceed 0.60 to
1.00, that net tangible assets will not be less than £225,000,000 and that
the minimum number of listed assets will not be less than 40.
The fair value of the Senior Unsecured Loan Note as at 31 July 2025 was
£26,829,000 (2024 - £27,112,000), the value being based on a comparable
quoted debt security.
2025 2024
£'000 £'000
(b) Deferred tax liability on Indian capital gains (see note 7) 5,835 10,291
14. Called up share capital
2025 2024
£'000 £'000
Allotted, called-up and fully paid
Ordinary shares of 5p 7,317 7,681
Treasury shares 3,648 2,755
10,965 10,436
Ordinary Treasury Total
shares shares shares
Number Number Number
At 31 July 2024 153,626,718 55,094,590 208,721,308
Conversion of CULS 10,578,870 - 10,578,870
Buyback of own shares (17,870,000) 17,870,000 -
At 31 July 2025 146,335,588 72,964,590 219,300,178
During the year 17,870,000 Ordinary shares of 5p were purchased (2024 -
2,850,000 Ordinary shares of 5p were purchased) by the Company at a total cost
of £53,551,000 (2024 - total cost of £7,476,000), all of which were held in
treasury. At the year end 72,964,590 (2024 - 55,094,590) shares were held in
treasury, which represents 33.27% (2024 - 26.40%) of the Company's total
issued share capital at 31 July 2025. During the year there were a further
10,578,870 (2024 - 18,740) Ordinary shares issued as a result of CULS
conversions.
Since the year end the Company bought back for treasury a further 3,245,000
Ordinary shares for a total consideration of £11,580,000.
15. Reserves
2025 2024
£'000 £'000
Capital reserve
At 31 July 2024 409,798 393,238
Movement in investment holdings fair value 11,947 5,137
Gains on realisation of investments at fair value 71,885 34,134
Purchase of own shares to treasury (53,551) (7,476)
Movement in deferred liability on Indian capital gains 4,456 (5,682)
Capital gains tax on sales (4,321) (4,690)
Foreign exchange movement (969) (1,052)
Capital expenses (4,164) (3,811)
At 31 July 2025 435,081 409,798
The capital reserve includes investment holding gains amounting to
£169,519,000 (2024 - £157,572,000) 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
2025 2024
Basic
Net assets attributable £558,593,000 £502,260,000
Number of shares in issue(A) 146,335,588 153,626,718
Net asset value per share 381.72p 326.94p
2025 2024
Diluted
Net assets attributable £558,593,000 £538,628,000
Number of shares in issue(A) 146,335,588 166,109,558
Net asset value per share(B) 381.72p 324.26p
(A) Calculated excluding shares held in treasury.
(B) The 2024 diluted net asset value per share has been calculated on the
assumption that £36,574,720 2.25% Convertible Unsecured Loan Stock 2025
("CULS") was converted at 293.0p per share, giving a total of 166,109,558
shares. Where dilution occurs, the net assets are adjusted for items relating
to the CULS.
Net asset value per share - debt converted. In accordance with the Company's
understanding of the current methodology adopted by the AIC, convertible
financial instruments are deemed to be "in the money" if the cum income net
asset value ("NAV") exceeds the conversion price of 293.0p (2024 - 293.0p)
per share. In such circumstances a net asset value is produced and disclosed
assuming the convertible debt is fully converted. At 31 July 2024 the cum
income NAV was 326.94p and thus the CULS were 'in the money'.
17. Analysis of changes in net debt
At At
31 July Currency Cash Non-cash 31 July
2024 differences flows movements 2025
£'000 £'000 £'000 £'000 £'000
Cash and short term deposits 12,703 (969) 778 - 12,512
Debt due within one year (36,368) - (29,281) 30,778 (34,871)
Debt due after more than one year (40,197) - - 4,449 (35,748)
(63,862) (969) (28,503) 35,227 (58,107)
At At
31 July Currency Cash Non-cash 31 July
2023 differences flows movements 2024
£'000 £'000 £'000 £'000 £'000
Cash and short term deposits 5,807 (1,052) 7,948 - 12,703
Debt due within one year - - - (36,368) (36,368)
Debt due after more than one year (70,682) - - 30,485 (40,197)
(64,875) (1,052) 7,948 (5,883) (63,862)
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 page 55 of the published Annual
Report and financial statements for the year ended 31 July 2025. The balance
of fees due to Directors at the year end was £nil (2024 - £nil).
The Company's Investment Manager, abrdn Asia, is a wholly-owned subsidiary of
Aberdeen Group plc, which has been delegated, under an agreement with aFML, to
provide management services to the Company, the terms of which are outlined in
notes 4 and 5 along with details of transactions during the year and balances
outstanding at the year end.
19. Financial instruments
Risk management. The Company's investment activities expose it to various
types of financial risk associated with the financial instruments and markets
in which it invests. The Company's financial instruments comprise equities and
other investments, cash balances, loans and debtors and creditors that arise
directly from its operations; for example, in respect of sales and purchases
awaiting settlement, and debtors for accrued income.
The Board has delegated the risk management function to aFML under the terms
of its management agreement with aFML (further details of which are included
under note 4 and in the Directors' Report) however, it remains responsible for
the risk and control framework and operation of third parties. The Board
regularly reviews and agrees policies for managing each of the key financial
risks identified with the Manager. The types of risk and the Manager's
approach to the management of each type of risk, are summarised below. Such
approach has been applied throughout the year and has not changed since the
previous accounting period. The numerical disclosures exclude short-term
debtors and creditors.
Risk management framework. The directors of aFML collectively assume
responsibility for aFML's obligations under the AIFMD including reviewing
investment performance and monitoring the Company's risk profile during the
year.
aFML is a fully integrated member of the Aberdeen Group ("the Group"), which
provides a variety of services and support to aFML in the conduct of its
business activities, including in the oversight of the risk management
framework for the Company. The AIFM has delegated the day to day
administration of the investment policy to abrdn Asia, which is responsible
for ensuring that the Company is managed within the terms of its investment
guidelines and the limits set out in its pre-investment disclosures to
investors (details of which can be found on the Company's website). The AIFM
has retained responsibility for monitoring and oversight of investment
performance, product risk and regulatory and operational risk for the Company.
The Group's Internal Audit Department is independent of the Risk Division and
reports directly to the Group CEO and to the Audit Committee of the Group's
Board of Directors. The Internal Audit Department is responsible for providing
an independent assessment of the Group's control environment.
The Manager conducts its risk oversight function through the operation of the
Group's risk management processes and systems which are embedded within the
Group's operations. The Group's Risk Division supports management in the
identification and mitigation of risks and provides independent monitoring of
the business. The Division includes Compliance, Business Risk, Market Risk,
Risk Management and Legal. The team is headed up by the Group's Chief Risk
Officer, who reports to the CEO of the Group. The Risk Division achieves its
objective through embedding the Risk Management Framework throughout the
organisation using the Group's operational risk management system ("SHIELD").
The Group's corporate governance structure is supported by several committees
to assist the board of directors, its subsidiaries and the Company to fulfil
their roles and responsibilities. The Group's Risk Division is represented on
all committees, with the exception of those committees that deal with
investment recommendations. The specific goals and guidelines on the
functioning of those committees are described in the committees' terms of
reference.
Risk management. The main risks the Company faces from these financial
instruments are (i) market risk (comprising interest rate, foreign currency
and other price risk), (ii) liquidity risk and (iii) credit risk.
Market risk. The fair value of or future cash flows from a financial
instrument held by the Company may fluctuate because of changes in market
prices. This market risk comprises three elements - interest rate risk,
currency risk and other price risk.
Interest rate risk. Interest rate movements may affect:
- the level of income receivable on cash deposits;
- valuation of debt securities in the portfolio.
Management of the risk. The possible effects on fair value and cash flows that
could arise as a result of changes in interest rates are taken into account
when making investment and borrowing decisions. When drawn down, interest
rates are fixed on borrowings.
Interest rate risk profile. The interest rate risk profile of the Company's
financial assets and liabilities, excluding equity holdings which are all
non-interest bearing, at the reporting date was as follows:
Weighted average Weighted
period for which average Fixed Floating
rate is fixed interest rate rate rate
At 31 July 2025 Years % £'000 £'000
Assets
Sterling - - - 9,761
Vietnam Dong - - - 1,658
Chinese Renminbi - - - 959
New Taiwan Dollar - - - 124
Indian Rupee - - - 10
- - - 12,512
Liabilities
Bank loan 0.08 5.4 - 34,871
3.05% Senior Unsecured Loan Note 2035 10.34 3.1 29,913 -
- - 29,913 34,871
Weighted average Weighted
period for which average Fixed Floating
rate is fixed interest rate rate rate
At 31 July 2024 Years % £'000 £'000
Assets
Sterling - - - 11,295
Chinese Renminbi - - - 985
Vietnam Dong - - - 247
New Taiwan Dollar 155
Indian Rupee - - - 20
US Dollar - - - 1
- - - 12,703
Liabilities
2.25% Convertible Unsecured Loan Stock 2025 0.83 2.3 36,368 -
3.05% Senior Unsecured Loan Note 2035 11.34 3.1 29,906 -
- - 66,274 -
The weighted average interest rate is based on the current yield of each asset
or liability, weighted by its market value.
The floating rate assets consist of cash deposits on call earning interest at
prevailing market rates.
The Company's equity portfolio and short term debtors and creditors have been
excluded from the above tables.
Interest rate sensitivity. Movements in interest rates would not significantly
affect net assets attributable to the Company's shareholders and total return.
Foreign currency risk. Most of the Company's investment portfolio is invested
in overseas securities and the Statement of Financial Position, therefore, can
be significantly affected by movements in foreign exchange rates.
Management of the risk. It is not the Company's policy to hedge this risk on a
continuing basis but the Company may, from time to time, match specific
overseas investment with foreign currency borrowings.
The revenue account is subject to currency fluctuations arising on dividends
receivable in foreign currencies and, indirectly, due to the impact of foreign
exchange rates upon the profits of investee companies. It is not the Company's
policy to hedge this currency risk but the Board keeps under review the
currency returns in both capital and income.
Foreign currency risk exposure by currency of denomination:
31 July 2025 31 July 2024
Net monetary Total Net monetary Total
Overseas assets/ currency Overseas assets/ currency
investments (liabilities) exposure Investments (liabilities) exposure
£'000 £'000 £'000 £'000 £'000 £'000
Chinese Renminbi 28,449 959 29,408 23,653 985 24,638
Hong Kong Dollar 66,610 - 66,610 45,564 - 45,564
Indian Rupee 156,251 10 156,261 159,012 20 159,032
Indonesian Rupiah 30,313 - 30,313 53,552 - 53,552
Korean Won 82,661 - 82,661 53,366 - 53,366
Malaysian Ringgit 10,704 - 10,704 18,784 - 18,784
New Taiwan Dollar 112,470 124 112,594 81,434 155 81,589
New Zealand Dollar - - - 6,727 - 6,727
Philippine Peso 28,666 - 28,666 19,012 - 19,012
Singapore Dollar 17,828 - 17,828 2,290 - 2,290
Sri Lankan Rupee 12,573 - 12,573 13,801 - 13,801
Thailand Baht 12,104 - 12,104 22,347 - 22,347
US Dollar 17,158 - 17,158 10,073 1 10,074
Vietnamese Dong 30,917 1,658 32,575 40,431 247 40,678
606,704 2,751 609,455 550,046 1,408 551,454
Sterling 14,247 (20,152) (5,905) 14,751 (54,979) (40,228)
Total 620,951 (17,401) 603,550 564,797 (53,571) 511,226
Foreign currency sensitivity. The Company's foreign currency financial
instruments are in the form of equity investments, fixed interest investments,
cash and bank loans. The sensitivity of the former has been included within
other price risk sensitivity analysis so as to show the overall level of
exposure. Due consideration is paid to foreign currency risk throughout the
investment process.
Other price risk. Other price risks (ie changes in market prices other than
those arising from interest rate or currency risk) may affect the value of the
quoted investments.
Investment in Far East equities or those of companies that derive significant
revenue or profit from the Far East involves a greater degree of risk than
that usually associated with investment in the securities in major securities
markets. The securities that the Company owns may be considered speculative
because of this higher degree of risk. It is the Board's policy to hold an
appropriate spread of investments in the portfolio in order to reduce the risk
arising from factors specific to a particular country or sector. Both the
allocation of assets and the stock selection process, as detailed on pages 100
and 101 of the published Annual Report and financial statements for the year
ended 31 July 2025, 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% (2024 - 20%) higher or lower while all other variables remained constant,
the return attributable to Ordinary shareholders for the year ended 31 July
2025 would have increased/(decreased) by £124,190,000 (2024 -
increased/(decreased) by £112,959,000) 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, bank loans 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 2025 are shown
in notes 12 & 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 15 of the published Annual
Report and financial statements for the year ended 31 July 2025.
Liquidity risk exposure. At 31 July 2025 the Company had borrowings of
£29,913,000 (2024 - £29,906,000) in the form of the 3.05% Senior Unsecured
Loan Note 2035 and £34,871,000 (2024 - nil) in the form of a short term bank
loan. The 2.25% Convertible Unsecured Loan Stock 2025 was redeemed during the
year (2024 - £36,368,000).
At 31 July 2025 the amortised cost of the Company's 3.05% Senior Unsecured
Loan Note 2035 was £29,913,000 (2024 - £29,906,000). The maximum exposure at
31 July 2025 was £29,913,000 (2024 - £29,906,000) and the minimum exposure
at 31 July 2025 was £29,906,000 (2024 - £29,898,000).
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 2025 £'000 £'000 £'000 £'000
Bank Loan 35,145 35,145 - -
3.05% Senior Unsecured Loan Note 2035 39,608 - 915 38,693
74,753 35,145 915 38,693
Due
Due between
Expected within 3 months Due after
cashflows 3 months and 1 year 1 year
31 July 2024 £'000 £'000 £'000 £'000
2.25% Convertible Unsecured Loan Stock 2025 37,053 - 37,053 -
3.05% Senior Unsecured Loan Note 2035 40,523 - 915 39,608
77,576 - 37,968 39,608
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:
2025 2024
Statement Statement
of Financial Maximum of Financial Maximum
Position exposure Position exposure
Current assets £'000 £'000 £'000 £'000
Debtors and prepayments 5,728 5,728 3,808 3,808
Cash and short term deposits 12,512 12,512 12,703 12,703
18,240 18,240 16,511 16,511
None of the Company's financial assets is past due or impaired.
Fair values of financial assets and financial liabilities. The fair value of
the loan note has been calculated at £26,829,000 as at 31 July 2025 (2024 -
£27,112,000) compared to a value at amortised cost in the financial
statements of £29,913,000 (2024 - £29,906,000) (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 2025 as follows:
Level 1 Level 2 Level 3 Total
As at 31 July 2025 Note £'000 £'000 £'000 £'000
Financial assets and liabilities at fair value through profit or loss
Quoted equities a) 620,890 - - 620,890
Quoted warrants b) - 61 - 61
Net fair value 620,890 61 - 620,951
Level 1 Level 2 Level 3 Total
As at 31 July 2024 Note £'000 £'000 £'000 £'000
Financial assets and liabilities at fair value through profit or loss
Quoted equities a) 562,138 - - 562,138
Quoted preference shares b) - - 2,438 2,438
Quoted warrants b) - 221 - 221
Net fair value 562,138 221 2,438 564,797
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 2025 31 July 2024
Level 3 Financial assets at fair value through profit or loss £'000 £'000
Opening fair value 2,438 12,910
Transfer to level 1 - (9,958)
Total gains or losses included in losses on investments in the Statement of
Comprehensive Income:
- assets disposed of during the year (2,438) -
- assets held at the end of the year - (514)
Closing balance - 2,438
Level 2 assets comprise First Sponsor Group warrants of £61,000 have been
classified as level 2 to reflect their illiquidity. Their fair value has been
based on a trade executed in August 2024.
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 Bank Loans and Loan Note) and equity
balance.
The Company's capital comprises the following:
2025 2024
£'000 £'000
Equity
Equity share capital 10,965 10,436
Reserves 547,628 491,824
Liabilities
3.05% Senior Unsecured Loan Note 2035 29,913 29,906
Bank loan 34,871 -
2.25% Convertible Unsecured Loan Stock 2025 - 36,368
623,377 568,534
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.
2025 2024
£'000 £'000
Investments at fair value through profit or loss 620,951 564,797
Current assets excluding cash and cash equivalents 1,594 1,248
Current liabilities (1,188) (1,328)
Deferred tax liability on Indian capital gains (5,835) (10,291)
615,522 554,426
Shareholders' funds 558,593 502,260
Gearing (%) 10.2 10.4
The Board monitors and reviews the broad structure of the Company's capital on
an ongoing basis. The review includes:
- the planned level of gearing which takes account of the Manager's views on
the market;
- the level of equity shares in issue;
- the extent to which revenue in excess of that which is required to be
distributed should be retained.
The Company's objectives, policies and processes for managing capital are
unchanged from the preceding accounting period.
The Company does not have any externally imposed capital requirements.
22. Subsequent events
With effect from 14 October 2025, the Company has changed its name to
"Aberdeen Asia Focus PLC".
Alternative Performance Measures (Unaudited)
Alternative Performance Measures ("APMs") are numerical measures of the
Company's current, historical or future performance, financial position or
cash flows, other than financial measures defined or specified in the
applicable financial framework. The Company's applicable financial framework
includes FRS 102 and the AIC SORP. The Directors assess the Company's
performance against a range of criteria which are viewed as particularly
relevant for closed-end investment companies.
Discount to net asset value per Ordinary share
The difference between the share price and the net asset value per Ordinary
share expressed as a percentage of the net asset value per Ordinary share.
2025 has been presented on a diluted basis as the Convertible Unsecured Loan
Stock ("CULS") were "in the money" (2024 - same).
As at As at
31 July 2025 31 July 2024
NAV per Ordinary share (p) a 381.72 324.26
Share price (p) b 343.00 278.00
Discount (a-b)/a 10.1% 14.3%
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 2025 31 July 2024
Revenue return per Ordinary share (p) a 7.44 8.59
Dividends declared (p) b 6.43 6.42
Dividend cover a/b 1.16 1.34
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 2025 31 July 2024
Borrowings (£'000) a 64,784 66,274
Cash and short term deposits (£'000) b 12,512 12,703
Amounts due to brokers (£'000) c 8,791 1,155
Amounts due from brokers (£'000) d 4,134 2,560
Shareholders' funds (£'000) e 558,593 502,260
Net gearing (a-b+c-d)/e 10.2% 10.4%
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.
2025 2024
Investment management fees (£'000) 3,276 3,076
Administrative expenses (£'000) 1,582 1,306
Less: non-recurring charges(A) (£'000) (164) (32)
Ongoing charges (£'000) 4,694 4,350
Average net assets (£'000) 518,389 488,772
Ongoing charges ratio 0.91% 0.89%
(A) Professional fees comprising corporate and legal fees considered unlikely
to recur.
The ongoing charges ratio provided in the Company's Key Information Document
is calculated in line with the PRIIPs regulations, which includes finance
costs and transaction charges.
Total return
NAV and share price total returns show how the NAV and share price has
performed over a period of time in percentage terms, taking into account both
capital returns and dividends paid to shareholders. NAV and share price total
returns are monitored against open-ended and closed-ended competitors, and the
Reference Index, respectively.
Share
Year ended 31 July 2025 NAV Price
Opening at 1 August 2024 a 324.26p 278.00p
Closing at 31 July 2025 b 381.72p 343.00p
Price movements c=(b/a)-1 17.7% 23.4%
Dividend reinvestment(A) d 2.6% 3.2%
Total return c+d +20.3% +26.6%
Share
Year ended 31 July 2024 NAV Price
Opening at 1 August 2023 a 308.93p 264.00p
Closing at 31 July 2024 b 324.26p 278.00p
Price movements c=(b/a)-1 5.0% 5.3%
Dividend reinvestment(A) d 2.9% 3.5%
Total return c+d +7.9% +8.8%
(A) NAV total return involves investing the net dividend in the NAV of the
Company with debt at fair value on the date on which that dividend goes
ex-dividend. Share price total return involves reinvesting the net dividend in
the share price of the Company on the date on which that dividend goes
ex-dividend.
The Annual General Meeting will be held at 18 Bishops Square, London, E1 6EG,
at 12:30 p.m. on 8 December 2025.
Please note that past performance is not necessarily a guide to the future and
that the value of investments and the income from them may fall as well as
rise and may be affected by exchange rate movements. Investors may not get
back the amount they originally invested.
The Annual Financial Report Announcement is not the Company's statutory
accounts. The above results for the year ended 31 July 2025 are an abridged
version of the Company's full financial statements, which have been approved
and audited with an unqualified report. The 2024 and 2025 statutory accounts
received unqualified reports from the Company's auditors and did not include
any reference to matters to which the auditors drew attention by way of
emphasis without qualifying the reports and did not contain a statement under
s.498(2) or 498(3) of the Companies Act 2006. The financial information for
2024 is derived from the statutory accounts for 2021 which have been delivered
to the Registrar of Companies. The 2025 financial statements will be filed
with the Registrar of Companies in due course.
The audited Annual Report and financial statements will be posted to
shareholders in early November. Copies may be obtained during normal business
hours from the Company's Registered Office, 280 Bishopsgate, London EC2M 4AG
or from the Company's website, asia-focus.co.uk*
* Neither the content of the Company's website nor the content of any website
accessible from hyperlinks on the Company's website (or any other website) is
(or is deemed to be) incorporated into, or forms (or is deemed to form) part
of this announcement.
By Order of the Board
abrdn Holdings Limited
Secretary
22 October 2025
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