05 April 2023, 07:00

Source - LSE Regulatory

RNS Number : 3725V

abrdn Asian Income Fund Limited

05 April 2023

ABRDN ASIAN INCOME FUND LIMITED

Legal Entity Identifier (LEI): 549300U76MLZF5F8MN87

ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2022

PERFORMANCE HIGHLIGHTS

The NAV total return of -3.6% for the year ended 31 December 2022 was ahead of the Index, which fell by 6.8% on a total return basis. The dividend per Ordinary share increased by 5.3%, from 9.5p to 10.0p, providing a dividend yield of 4.7%.

Dividend per Ordinary share	Dividend yield ^ACD
2022 10.0p	2022 4.7%
2021 9.5p	2021 4.1%

Net asset value total return ^AB	Ordinary share price total return ^AB
2022 -3.6%	2022 -2.7%
2021 11.0%	2021 5.2%

MSCI AC Asia Pacific ex Japan Index total return (currency adjusted) ^B	MSCI AC Asia Pacific ex Japan High Dividend Yield Index total return (currency adjusted) ^B
2022 -6.8%	2022 3.2%
2021 -1.8%	2021 8.1%

Earnings per Ordinary share - basic (revenue)	Discount to net asset value per Ordinary share ^AC
2022 10.23p	2022 11.7%
2021 8.95p	2021 12.1%

Ongoing charges ^AE	Net gearing ^AC
2022 1.01%	2022 8.1%
2021 1.01%	2021 9.6%

^A Alternative Performance Measure.

^B Total return represents the capital return plus dividends reinvested.

^C As at 31 December.

^D Yield is calculated as the dividend per Ordinary share divided by the share price per Ordinary share expressed as a percentage.

^E Calculated in accordance with the latest AIC guidance issued in October 2020 to increase the scope of reporting the look-through costs of holdings in investment companies

SUMMARY OF RESULTS

Financial Highlights

	31 December 2022	31 December 2021	% change
Net asset value total returnA	-3.6%	+11.0%
Share price (Ordinary) total returnA	-2.7%	+5.2%
MSCI AC Asia Pacific ex Japan Index total return (currency adjusted)	-6.8%	-1.8%
MSCI AC Asia Pacific ex Japan High Dividend Yield Index total return (currency adjusted)	+3.2%	+8.1%
Market capitalisation (£million)	£365.1	£396.3	-7.9
Discount to net asset value per Ordinary shareA	11.7%	12.1%
Ongoing charges ratioA	1.01%	1.01%
Dividends and earnings
Total return per Ordinary shareB	(10.01)p	25.88p	n/a
Earnings per Ordinary share - basic (revenue)B	10.23p	8.95p	+14.3
Dividends per Ordinary shareC	10.00p	9.50p	+5.3
Dividend cover per Ordinary shareA	1.02	0.94	+8.6
Revenue reserves (£million)D	£7.3	£6.9
Dividend yieldA	4.7%	4.1%

^A Considered to be an Alternative Performance Measure.

^B Measures the relevant earnings for the year divided by the weighted average number of Ordinary shares in issue (see note 10).

^C The figure for dividends reflects the years in which they were earned (see note 9).

^D The revenue reserves figure takes account of the fourth interim dividend amounting to £5,263,000 (2021 - fourth interim amounting to £4,712,000).

Capital Performance to 31 December 2022

	31 December 2022	31 December 2021	% change
Total assets (£million)	£454.4	£497.5	-8.7
Total equity shareholders' funds (net assets) (£million)	£413.4	£450.8	-8.3
Net asset value per Ordinary share	243.44p	262.76p	-7.4
Ordinary share price	215.00p	231.00p	-6.9

Long Term Total Return Performance to 31 December 2022

	1 year % return	3 year % return	5 year % return	Since launch^B % return
Net asset value^A	-3.6	+20.8	+26.1	+376.1
Share price (Ordinary)^A	-2.7	+14.8	+23.0	+325.4
MSCI AC Asia Pacific ex Japan Index (currency adjusted)	-6.8	+9.0	+14.8	+302.2
MSCI AC Asia Pacific ex Japan High Dividend Yield Index (currency adjusted)	+3.2	+10.0	+17.4	+347.4
^A Considered to be an Alternative Performance Measure. ^B Launch date being 20 December 2005.

CHAIRMAN'S STATEMENT

Highlights

- Performance ahead of the MSCI AC Asia Pacific ex Japan Index (the "Index") in the year; NAV per share was -down 3.6% on a total return basis compared to a fall of 6.8% in the Index.

- NAV total return out-performed the Index over one, three and five years.

- 5.3% increase in total dividends paid, from 9.5p to 10.0p, providing a dividend yield of 4.7%.

- Revenue earnings per share were 10.2p for the year, an increase of 14.3% compared to the previous year.

Background and Overview

The year under review was an unsettling period for investors in Asian markets. Optimism for a return to growth was tempered by global concerns over rising inflation, recession fears and the impact of the conflict in Ukraine.

Your company has not been immune to these factors. For the year ended 31 December 2022, on a total return basis, the net asset value ("NAV") per share was down 3.6%. However, as a result of the Investment Manager's thorough approach to stock selection, investing in companies with strong balance sheets, performance was still ahead of the Index, which fell by 6.8% over the year (currency adjusted, on a total return basis). Over the longer term, the Company's performance continues to look healthy, with NAV total returns of 20.8% over three years and 26.1% over five years, compared to 9.0% and 14.8% respectively from the Index.

In some respects, the global situation is similar to the environment I described in the Half Yearly Report last year. Russia's invasion of Ukraine - Europe's biggest conflict since World War II - has led to a sharp increase in commodity prices and heightened fears about the potential impact on corporate profit margins. Meanwhile, soaring inflation means that investors are increasingly dwelling on the possibility of a recession, as central banks look to mitigate the impact of inflation.

Having said that, inflation in Asia, while rising, is still not as acute as it is in the West (compare Singapore's 7.7%, among the highest in the region at the end of 2022, with the UK's rate of inflation of 10.5% in December). As a result, the region has not been subject to the same level of interest rate increases. Clearly, however, the risk now for Asia is whether this trend of rising prices will catch up, or whether the higher levels of GDP growth will compensate.

One key shift towards the end of the year was China's approach to containing the Covid-19 pandemic. In December, the country started the process of moving away from its strict zero- Covid approach, which had led to lengthy lockdowns. China's re-opening should lead to improved tourism and consumer spending due to pent-up demand on the mainland and further afield. Meanwhile, China's government has also taken action to improve regulation and ease the burden on its debt-laden real estate sector.

In terms of currency impact, despite the US Federal Reserve (the "Fed") taking aggressive action on interest rate increases to avoid inflation, Asian currencies largely did better than our base currency, Sterling, over the year - the weaker British pound resulting in part from the well documented political instability in the UK. Currency movements had a positive impact on the portfolio over the period, with the Singapore Dollar gaining the most and the Thai Baht also fairly strong.

Performance

As stated above, the NAV total return of -3.6% for the year was ahead of the Index, which fell by 6.8% on a total return basis, but was behind the MSCI AC Asia Pacific ex Japan High Dividend Yield Index (the "High Yield Index"), which produced a total return of 3.2%.

The share price total return for the 12 months was -2.7%, reflecting a narrowing of the discount at which the shares trade, from 12.1% to 11.7% at the year end. At the time of writing the Ordinary shares are trading at a discount of 12.3% to the prevailing NAV.

As I set out in the Half Yearly Report, the portfolio fared well in the first five months of the year, only for those gains to be eroded in June by a rebound in China, where the Company is underweight. However, the portfolio staged a good recovery over the second half of the year, with particularly strong performance in November and December.

One of the prevailing themes over the year was weakness in the technology sector, as investors considered how consumer demand would stand up to a global recession. However, the Company has benefited from being underweight to some of the expensive growth areas and Chinese internet companies which underperformed over the course of the year.

Conversely, relative to the High Yield Index, the Company's performance lagged over the period on account of the index's heavier allocation to Chinese banks, a sector which held up relatively well on hopes of a recovery in credit growth.

The end of the year saw stronger performance from two notable areas of the portfolio: Australian mining and commodity companies, which benefited from positive sentiment in China and higher prices for commodities such as iron ore (which returned to more than US$100 per tonne in November); and Singapore banks, which have benefited from higher interest rates and the growing economy. Singapore's biggest banks have all reported record profits with growing net interest margins. As the Investment Manager looks to increase exposure to dividend-paying companies, this has included topping up the portfolio's weighting to financials, including Singapore banks.

Further information on performance and portfolio activity during the year is contained in the Investment Manager's Review.

Revenue and Dividends

Revenue earnings per share were 10.2p for the year ended 31 December 2022, an increase of 14.3% compared to the previous year. The Company has continued to benefit from the Investment Manager's focus on high-yielding companies with strong fundamentals, where it believes there is room for significant increases in dividend receipts over the next couple of years, given low distribution ratios by companies and healthy free cash flow generation.

Four quarterly dividends were declared over 2022. The first three dividends were paid at a rate of 2.3p with a fourth interim dividend of 3.1p, representing a 5.3% increase in total dividends for the year, from 9.5p to 10.0p. This increase maintains the trend that has been established over each of the last 14 years and means that the Company continues to be a "next generation dividend hero" as recognised by the Association of Investment Companies. It is very much our intention to continue to extend this record.

Based upon the Ordinary share price of 215p, the shares were yielding 4.7% at the year end. The Board is very aware of the importance of dividends to shareholders and is pleased to confirm that, in the absence of unforeseen circumstances, it is our intention to declare a total dividend of at least 10.5p per Ordinary share in respect of the year to 31 December 2023.

Over the forthcoming year, the Investment Manager will be researching further dividend-paying companies that could be added to the portfolio. As Asia's economies continue to re-open and recover from the shock of the pandemic, the Investment Manager expects to see strong earnings growth in Asia relative to Western markets, which should translate into increasing dividend receipts. The Board hopes that this will provide it with an opportunity to accelerate the rate of dividend growth in future years.

Although not required this year, the Company continues to have the ability to use some of its accumulated revenue reserves, which have been built up since the launch of the Company, with the aim of smoothing the impact on dividend payments to shareholders. Having these revenue reserves as well as the ability to use its capital reserves in support of dividend payments from time to time, provides an added level of comfort to your company's ability to pay dividends and is a significant benefit of the closed end investment company structure.

Share Capital Management

In line with the Board's policy to buy back shares when the discount at which the Company's shares trade exceeds 5% to the underlying NAV (exclusive of income), the Company bought back 1.7 million shares during the year to be held in treasury (2021: 4.3 million shares). Subsequent to the year end we have continued to buy back shares and a total of 499,669 further shares have been acquired.

These buybacks provide an enhancement to the Company's NAV and benefit all shareholders. The Company will continue selectively to buy back shares in the market, in normal market conditions and at the discretion of the Board.

Gearing

The Company has a £10 million fixed rate term loan and a £40 million revolving credit facility, both of which mature in March 2024. At the year end, £31 million of the revolving credit facility was drawn down, resulting in total borrowings of £41 million and gearing (net of cash) of 8.1% (2021: 9.6%).

Environmental, Social and Governance ("ESG") Investing

The Board continues its ESG-focused dialogue with the Investment Manager in the belief that companies with good ESG practices will be the winners over the longer term, whilst benefitting society.

Annual General Meeting ("AGM") and Online Shareholder Presentation AGM

The AGM will be held at 10:30 a.m. on 10 May 2023 at Wallacespace Spitalfields, 15-25 Artillery Lane, London E1 7HA.There will be a short presentation by videoconference from the Investment Manager followed by tea and coffee. We very much look forward to meeting and engaging with as many shareholders as possible at the meeting.

We encourage all shareholders to complete and return the Proxy Form enclosed with the Annual Report so as to ensure that your votes are represented at the meeting. If you hold your shares in the Company via a share plan or a platform and would like to attend and / or vote at the AGM, then you will need to make arrangements with the administrator of your share plan or platform. For this purpose, investors who hold their shares in the Company via one of the abrdn savings plans will find a Letter of Direction enclosed. Shareholders are encouraged to complete and return their Proxy Forms / Letters of Direction in accordance with the instructions.

Online Shareholder Presentation

In order to encourage as much interaction as possible with our shareholders, and especially for those who are unable to attend the AGM, we will also be hosting an Online Shareholder Presentation, which will be held at 10.00 a.m. on Wednesday 26 April 2023. At this event you will receive a presentation from the Investment Manager and have the opportunity to ask live questions of the Chairman and the Investment Manager. The online presentation is being held ahead of the AGM to allow shareholders who attend to submit their proxy votes for the AGM after the presentation.

Full details on how to register for the online event can be found at: bit.ly/abrdn-asia-income

Details are also contained on the Company's website.

Board Composition

Having been a Director since the launch of the Company in 2005, Hugh Young has decided to retire at this year's AGM. Over the years, the Company has benefited hugely from Hugh's vast investment experience and insight of the Asian region. On behalf of the Board I would like to thank Hugh for his significant contribution over this time.

Jersey Administrator

The Board wishes to confirm that, notwithstanding this proposed sale, the investment management of the Company's portfolio will continue to be carried out by abrdn via its Singapore based Asian Equity team.

The Board will of course fulfil its own duty to review carefully any new Jersey regulatory arrangements that abrdn proposes to put in place, to ensure that such arrangements remain in the best interests of the Company's shareholders.

Outlook

While growth prospects in Asia may have moderated slightly (the Asian Development Bank has reduced its 2023 outlook for GDP expansion to 4.6%), economic growth is still forecast to be ahead of many other parts of the world. The question now is whether the region's growth prospects outweigh the potential for higher inflation creeping into Asian economies. Investors will also keenly watch the Fed's monetary policy, with many Asian currencies pegged to the US Dollar, and China's emergence from its zero-Covid policy, alongside other economies that continue to re-open, which is a positive sign for the region.

The Asia investment story remains as compelling as ever for investors. Long-term drivers of rising affluence, green energy and technology adoption provide opportunities for companies that have the ability to generate steady cash flow and pay stable dividends.

With a long heritage in Asia, the Investment Manager has a strong record of finding those proven, quality companies that benefit from structural trends while generating healthy income and capital growth for investors. The Board remains confident this will be to the benefit of shareholders over the long term.

Ian Cadby

Chairman

4 April 2023

INVESTMENT MANAGER'S REVIEW

1. How did abrdn Asian Income Fund do in 2022?

An overarching theme that shaped markets in 2022 was the global pivot towards monetary tightening, as central banks raced to contain an inflation surge which had been inflamed by the commodity crisis following Russia's invasion of Ukraine. Rising borrowing costs ignited recession fears and took the shine off growth stocks, where frothy valuations based on sentiment rather than fundamentals were particularly sensitive to interest rates. Instead, investors rotated towards value stocks, which looked relatively cheap and offered better shareholder returns.

With its income focus, the Company benefited from this change in sentiment. The Company's net asset value ("NAV") fell by 3.6% on a total return basis in sterling terms, outperforming the MSCI AC Asia Pacific ex Japan Index's loss of 6.8%. The Company's holdings in Singapore outpaced the broader markets, led by the banks which resumed dividend payments after the pandemic-related regulatory restrictions were removed. The portfolio also benefited from having less exposure to China, where dividend yields are lower than the regional average, as sentiment there was weighed down by regulatory uncertainty, a property slump and disruptive Covid-19 lockdowns. In comparison, the Company trailed the MSCI AC Asia Pacific ex Japan High Dividend Yield Index, which returned 3.2%. This index includes state-owned financial and power companies, which we have chosen not to hold as we find better managed peers with more sustainable outlooks elsewhere in the region.

Information technology was the weakest performing sector as valuations of technology companies corrected, having been consistent outperformers over the previous years. However, the Company's holdings in this sector are technology leaders with strong balance sheets. They have been resilient relative to their peers and continue to offer attractive medium-term total returns and growth prospects.

2. How were the Company's holding able to remain resilient in the tough macro environment?

One of the ways we try to mitigate the impact of macro- economic events on the portfolio is by knowing the holdings inside out, through disciplined analysis, and investing only in quality companies that we believe will be winners in the long run. In our view, company fundamentals are the ultimate drivers of share prices. Specifically, the Company targets the income and growth potential of Asia's most compelling and sustainable firms. Our focus is therefore on finding high-quality, dividend- paying companies that offer capital appreciation alongside growing dividends.

We form our expectations of a company's growth potential and dividend-paying ability via rigorous, first-hand research, drawing on the knowledge of approximately 40 investment professionals on the ground in Asia. We meet companies before making any investments and continue monitoring them regularly after they are added to the portfolio. Among the key attributes we look for are proven management teams with good track records, healthy balance sheets and sustainable cash-generative operations that can support dividends. This is particularly important in the current higher interest rate environment, as heavily debt-laden businesses could face financial pressure which may result in withheld or reduced dividends.

We also prefer companies with robust business models and enduring competitive advantages. These qualities can improve their pricing power, allowing them to protect market share and profitability by passing on higher costs - an important consideration in today's inflationary environment. The output of this process is a portfolio of companies that exhibits stronger profitability, a better return on equity and a higher dividend yield compared to the Index.

Another way we enhance returns and mitigate portfolio risk is by integrating environmental, social and governance ("ESG") analysis into our investment process. In our opinion, informed and constructive engagement helps foster better corporate practices, and that in turn can protect and increase the value of the Company's investments. Moreover, active engagement is particularly pertinent in Asia, where an ESG culture has been slow to emerge relative to Europe and the US. Many companies in the region are beginning to understand the significance of ESG reporting and the potential impact on share prices from having a clear and transparent ESG policy.

That is why we regularly engage with the companies we invest in, to share and encourage better ESG practices, while ensuring we fully understand their future direction from a risk and an ESG perspective. Our regular dialogues with managements cover varied topics such as climate change risks, management turnover, data security and gender diversity. Notably, the Company's portfolio is rated A by MSCI for ESG, has maintained its above- benchmark ESG quality score and continues to enjoy a similar or better E, S and G score relative to the Index.

3. What contributed to the Company's performance over the year?

The Company's investments in Singapore, the portfolio's biggest single country exposure, delivered strong gains. As bottom-up stock pickers, we select the best companies regardless of the country they are based in. We like Singapore for its diversity of well-governed businesses with a prudent attitude towards balance sheet gearing, many of which have expanded their earnings across the higher-growth economies in the region.

Among the Singapore holdings, well-capitalised lenders DBS Group, Oversea-Chinese Banking Group ("OCBC") and United Overseas Bank ("UOB") performed well as rising interest rates pushed up their net interest margins, which had been suppressed by several years of very-low rates. All three banks emerged from the pandemic with their asset qualities intact. In addition, they have reported a sharp increase in earnings and rewarded shareholders by resuming dividend payments once the local regulator removed pandemic- related dividend restrictions. Keppel Infrastructure Trust fared similarly well, deriving steady and predictable cash flows from diversified assets that supported stable distributions.The Company also benefited from special dividends from Singapore Telecommunications, a telecom operator with regional franchises that capture growth in Asia's emerging markets.

China was once again a swing factor for performance. Our active decision to avoid holding large, non-dividend paying Chinese internet companies was favourable as their share prices have come under intense pressure since late 2020 on the back of sweeping regulatory changes. In addition, stock selection in China was positive.

For example, property company China Resources Land ("CR Land") was boosted by market-friendly policy announcements as the authorities stepped up measures to support the housing market. The country's swift re-opening provided another welcome fillip for the sector. Shares of the high-quality property developer have risen over each of the past two years - no small feat considering the Chinese market's double-digit losses over those periods. It is not just that the company has a low cost of capital and a good execution track record. CR Land's portfolio of investment properties is an additional liquidity source that provides it with steady cash flow and helps keep its balance sheet modestly geared. This is in stark contrast to many of its heavily indebted domestic rivals.

Elsewhere, Australian commodity companies stood out. Mining giants Rio Tinto and BHP Group rallied on strong iron ore prices, which received a further boost towards the year-end on optimism over Chinese demand. In addition, BHP declared a record dividend following stellar full-year results. Rio Tinto reduced its special dividend as part of its regular shareholder returns management policy, but it remains a large dividend payer with a yield of around 9%. At the time of writing, both companies have reported strong production and higher iron ore shipments. We continue to like the diversified miners, which have solid assets and balance sheets, and provide a good proxy for growth in China and other emerging markets.

In neighbouring New Zealand, Spark New Zealand was another outstanding performer. The telecom operator's active portfolio management strategy has been instrumental in supporting its solid growing dividend profile.

4. What changes have you made to the portfolio?

We have been increasing the weighting to financials, which we believe are beneficiaries of rising interest rates and re- opening economies, and of an increase in dividend growth as domestic regulators lift distribution restrictions following the pandemic. Earlier in the year, we introduced Thailand-based Kasikornbank, a leader on the digitalisation, technology and ESG fronts. The lender's promising prospects are backed by its solid balance sheet, strong branch network and measured approach in digital transformation. We also added attractively valued Dah Sing Financial, which offers banking, insurance and other financial-related services mainly in Hong Kong, Macau and mainland China. The group's business fundamentals are improving, aided by the continued economic recovery in Hong Kong and China.

Conversely, we reduced the portfolio's technology exposure given the weak global demand environment as we suspect there will come a time when we can invest back into these quality companies at lower prices. That said, we did take advantage of bouts of market weakness to initiate some positions in quality technology companies with compelling valuations. As highlighted in the Half-Yearly Report, two such purchases were MediaTek and Taiwan Union Technology ("TUC"), which are both based in Taiwan. Fabless integrated-circuit design house MediaTek has committed to returning capital to shareholders via a special dividend over at least the next couple of years, on top of its regular dividend based on an 80%-85% distribution ratio. TUC is a leading maker of copper clad laminate, which is an integral part of the structural growth in capital expenditure in data centres, base stations and servers in the 5G infrastructure rollout and connectivity such as industrial automation, internet of things and autonomous cars. The company's first mover advantage and focus on product innovation have kept it ahead of the competition. In addition,

we established a small position in Singapore-based AEM Holding in the second half of the year, given its dividend track record and business outlook. AEM has embedded itself in chipmaker Intel's global supply chain due to its patented test and handling technology. Its growth profile could become more diverse as Intel seeks to move into system-level testing equipment to bring more chip manufacturing in-house.

The purchases were funded with the sale of China Mobile, CNOOC, SP Setia and Waypoint REIT. Proceeds from the takeover of AusNet Services were also invested across holdings with high dividend yields.

5. What key areas are you monitoring closely this year?

Inflation and interest rate concerns remain front and centre for investors. Key central banks have retained their hawkish language, though moderating price increases have raised hopes of a slower pace of interest rate rises. At the same time, the world economy is still fragile, while geopolitical risks remain, with continued conflict between Russia and Ukraine.

Developments in China, meanwhile, continue to take centre stage. We believe the country's re-opening is broadly positive for Asia's prospects. A revival in domestic consumption and industrial conditions should benefit the region, as demand for exports, services and trade rebounds. The lifting of border constraints is likely to boost tourism revenues in South-East Asia, particularly as China accounted for the bulk of tourist arrivals pre-pandemic. In our view, China's recovery is sustainable, as domestic demand over the medium and longer term will be underpinned by broader economic improvement alongside excess household savings and disposable income accumulated during the pandemic years.

We are keeping a watchful eye on the shifting landscape and continuing our dialogue with the Company's underlying holdings, closely monitoring their operational performance and the impact of lower demand. As noted earlier, higher borrowing costs will impair the dividend-paying ability of debt- saddled firms, while those unable to pass on rising input costs could fall by the wayside. Encouragingly, the portfolio's quality holdings, with their robust balance sheets, are less reliant on debt financing and continue to display financial strength. Their durable competitive advantages have also been pivotal in preserving their margins and supporting their ability to pay out dividends, even in the face of elevated inflation.

Overall, Asia is starting the year in a relatively better position compared to other global regions. Manageable price pressures have allowed central banks to take a more deliberate approach to interest rate rises. Government finances and corporate balance sheets have, on average, remained solid. Asia is also growing faster than any other region in the world as it emerges from the effects of the pandemic. The gathering economic momentum should support earnings growth. We will remain alert and adapt alongside changing circumstances.

6. Where do the most attractive opportunities lie in Asia?

Quality income ideas are spread across multiple themes in Asia, where we can find companies offering good long-term total return opportunities across a variety of countries and sectors.

The accelerating transition to clean energy, for instance, is a game-changer. Among the quality holdings in the portfolio that offer dividends and growth in the green space are South Korea's LG Chem and Taiwan-based Hon Hai Precision Industry. The former is increasingly dominant in the electric vehicle ("EV") battery supply chain, while the latter is gaining a foothold in the EV market. Electric power transmission utility Power Grid Corp of India, too, is poised to play a decisive role in India's long-term decarbonisation efforts.

Elsewhere, technology enablers are fundamental for a digital future. The Company has exposure via its two largest positions in Taiwan Semiconductor Manufacturing Company and Samsung Electronics. Both are world-leading chip makers with sturdy balance sheets and good cash flow generation, and have considerable experience navigating the ups and downs of the industry cycle. The financial holdings, such as Kasikornbank and DBS, which are ramping up their digital capabilities, also offer exposure to the digital future theme. Furthermore, they are beneficiaries of Asia's rising affluence, which has created new opportunities for wealth solutions and services. Insurer AIA Group is a case in point.

Another of our preferred themes is the urbanisation and infrastructure expansion that is set to bolster property developers and material producers, such as the holdings in diversified miners BHP Group and Rio Tinto as well as property developer CR Land.

7. What is the outlook for dividends in the region?

We remain optimistic. Asia - long associated with growth - has often been considered a less obvious choice for investors in search of yield. In fact, dividend contribution in Asia has been on a steady upward path, helped by greater capital discipline and shareholder-friendly reforms. Dividends now comprise close to half of total returns to shareholders.

The source of these dividends is also broadening across countries and sectors. In addition to traditional high-yielding markets such as Australia, Singapore and Taiwan, we are starting to see dividend growth and better yields in emerging markets and countries not traditionally known for a dividend- paying business culture. India is a classic example, as companies have historically prioritised re-investing capital back into future growth. Increasingly, we are finding companies that can offer both earnings and dividend growth. Power Grid Corp of India, for example, offers a healthy yield of around 6%,

while delivering earnings growth and investing in renewables generation. Opportunities are also spread across sectors ranging from banks and mining to technology and businesses exposed to the region's growing consumer market. That said, persistent near-term macroeconomic uncertainty and Asia's wide-ranging stock universe underline the value of fundamental analysis and stock picking.

Overall, Asian companies have stronger balance sheets relative to global peers, as is evident from the chart below. This puts them in a favourable position of being able to choose to invest in growth or improve returns to shareholders. We believe Asian companies are in a better position financially to raise dividends and our quality process enables us to filter this list down to companies that are more willing to increase total returns. Asian markets are also trading at lower price-earnings multiples relative to historical standards as well as world indices.

We are convinced that Asia continues to provide huge potential in both income and capital growth. We will remain discriminating in our selection of well-run and financially sound sustainable businesses with a long runway of growth.

Yoojeong Oh

Investment Director

abrdn Asia Limited,

4 April 2023

OVERVIEW OF STRATEGY

Launched in December 2005, abrdn Asian Income Fund Limited (the "Company") is registered with limited liability in Jersey as a closed-end investment company under the Companies (Jersey) Law 1991 with registered number 91671. The Company's Ordinary shares are listed on the premium segment of the London Stock Exchange.

Change of Name

On 1 January 2022, the Company changed its name from Aberdeen Asian Income Fund Limited to abrdn Asian Income Fund Limited.

Change of Tax Residency

Following shareholder approval at the Extraordinary General Meeting held on 8 September 2021, with effect from 1 January 2022 the Company migrated its tax residency to the UK from Jersey and elected to join the UK's investment trust regime. The Company continues to be registered with limited liability in Jersey as a closed-end investment company under the Companies (Jersey) Law 1991.

Investment Objective

To provide investors with a total return primarily through investing in Asia Pacific securities, including those with an above average yield. Within its overall investment objective, the Company aims to grow its dividends over time.

Business Model

The Company aims to attract long term private and institutional investors wanting to benefit from the growth prospects of Asian companies including those with above average dividend yields.

The business of the Company is that of an investment company and the Directors do not envisage any change in this activity in the foreseeable future.

Investment Policy

Asset Allocation

The Company primarily invests in the Asia Pacific region through investment in:

- companies listed on stock exchanges in the Asia Pacific region;

- Asia Pacific securities, such as global depositary receipts (GDRs), listed on other international stock -exchanges;

- companies listed on other international exchanges that derive significant revenues or profits from the Asia Pacific region; and

- debt issued by governments or companies in the Asia Pacific region or denominated in Asia Pacific currencies.

The Company's investment policy is flexible, enabling it to invest in all types of securities, including equity shares, preference shares, debt, convertible securities, warrants and other equity-related securities. The Company is free to invest in any market segments or any countries in the Asia Pacific region. The Company may use derivatives to enhance income generation.

The Company invests in small, mid and large capitalisation companies. The Company's policy is not to acquire securities that are unquoted or unlisted at the time of investment (with the exception of securities which are about to be listed or traded on a stock exchange). However, the Company may continue to hold securities that cease to be quoted or listed if the Investment Manager considers this to be appropriate. The Company may also enter into stock lending contracts for the purpose of enhancing income returns.

Typically, the portfolio will comprise of between 40 and 70 holdings (but without restricting the Company from holding a more or less concentrated portfolio in the future).

Risk Diversification

The Company will not invest more than 10%, in aggregate, of the value of its total assets in investment trusts or investment companies admitted to the Official List, provided that this restriction does not apply to investments in any such investment trusts or investment companies which themselves have stated investment policies to invest no more than 15% of their total assets in other investment trusts or investment companies admitted to the Official List. In any event, the Company will not invest more than 15% of its total assets in other investment trusts or investment companies admitted to the Official List.

In addition, the Company will not:

- invest, either directly or indirectly, or lend more than 20% of its total assets to any single underlying issuer (including the underlying issuer's subsidiaries or affiliates), provided that this restriction does not apply to cash deposits awaiting investment;

- invest more than 20% of its total assets in other collective investment undertakings (open-ended or closed-ended);

- expose more than 20% of its total assets to the creditworthiness or solvency of any one counterparty (including the counterparty's subsidiaries or affiliates);

- invest in physical commodities;

- take legal or management control of any of its investee companies; or

- conduct any significant trading activity.

The Company may invest in derivatives, financial instruments, money market instruments and currencies for investment purposes (including the writing of put and call options for non-speculative purposes to enhance investment returns) as well as for the purpose of efficient portfolio management (i.e. for the purpose of reducing, transferring or eliminating investment risk in the Company's investments, including any technique or instrument used to provide protection against foreign exchange and credit risks). For the avoidance of doubt, in line with the risk parameters outlined above, any investment in derivative securities will be covered.

The Investment Manager expects the Company's assets will normally be fully invested. However, during periods in which changes in economic conditions or other factors so warrant, the Company may reduce its exposure to securities and increase its position in cash and money market instruments.

Gearing Policy

The Board is responsible for determining the gearing strategy for the Company. The Board has restricted the maximum level of gearing to 25% of net assets although, in normal market conditions, the Company is unlikely to take out gearing in excess of 15% of net assets. Gearing is used selectively to leverage the Company's portfolio in order to enhance returns where this is considered appropriate. Borrowings are generally shorter term, but the Board may from time to time take out longer term borrowings where it is believed to be in the Company's best interests to do so. Particular care is taken to ensure that any bank covenants permit maximum flexibility of investment policy.

The percentage investment and gearing limits set out under this sub-heading "Investment Policy" are only applied at the time that the relevant investment is made or borrowing is incurred.

In the event of any breach of the Company's investment policy, shareholders will be informed of the actions to be taken by the Investment Manager by an announcement issued through a Regulatory Information Service or a notice sent to shareholders at their registered addresses.

The Company may only make material changes to its investment policy (including the level of gearing set by the Board) with the approval of shareholders (in the form of an ordinary resolution). In addition, any changes to the Company's investment objective or policy will require the prior approval of the Financial Conduct Authority as well as prior consent of the Jersey Financial Services Commission ("JFSC") to the extent that the changes materially affect the import of the information previously supplied in connection with its approval under Jersey Funds Law or are contrary to the terms of the Jersey Collective Investment Funds laws.

Duration

The Company does not have a fixed life.

Comparative Indices

The Company's portfolio is constructed without reference to any stockmarket index. It is likely, therefore, that there will be periods when the Company's performance will be quite unlike that of any index and there can be no assurance that such divergence will be wholly or even primarily to the Company's advantage. The Company compares its performance against the currency-adjusted MSCI AC Asia Pacific ex Japan Index and the currency-adjusted MSCI AC Asia Pacific ex Japan High Dividend Yield Index.

Promoting the Success of the Company

In accordance with corporate governance best practice, the Board is 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 in the UK under section 172 (1) of the Companies Act 2006 (the "s172 Statement"). This Statement, from "Promoting the Success of the Company" to "Long Term Investment" provides an explanation of how the Directors have promoted the success of the Company for the benefit of its members as a whole, taking into account, among other things, 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 (both income and capital) to its shareholders. The Company's investment objective is disclosed above. The activities of the Company are overseen by the Board of Directors of the Company. The Board's philosophy is that the Company should operate in a transparent culture where all parties are treated with respect and provided with the opportunity to offer practical challenge and participate in positive debate which is focused on the aim of achieving the expectations of shareholders and other stakeholders alike. At its regular meetings, the Board reviews the culture and manner in which the Manager operates and receives regular reporting and feedback from the other key service providers.

Investment companies, such as the Company, are long-term investment vehicles, with a recommended holding period of five or more years. Typically, investment companies are externally managed, have no employees, and are overseen by an independent non-executive board of directors. The Company's Board of Directors sets the investment mandate, monitors the performance of all service providers (including the Manager and Investment 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.

Shareholder Engagement

The following table describes some of the ways the Board engages with the Company's shareholders:

Annual General Meeting ("AGM") and Online Shareholder Presentation

The AGM provides an opportunity for the Directors to engage with shareholders, answer their questions and meet them informally. The next AGM will take place at 10:30 a.m. on 10 May 2023 in London. Shareholders who are unable to attend are encouraged to lodge their votes by proxy on all the resolutions put forward.

As explained in the Chairman's Statement, the Company will hold an online shareholder presentation in advance of the AGM this year including the opportunity for an interactive question and answer session.

Annual Report

The Company publishes 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

The Company issues announcements for all substantive news relating to it. These can be found on the Company's website and the London Stock Exchange's website.

Results Announcements

The Company releases 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 the portfolio and market performance.

Website

The Company's website contains a range of information and includes a full monthly portfolio listing of the Company's investments as well as podcasts by the Investment Manager. Details of financial results, the investment process and Investment Manager together with Company announcements and contact details can be found here: asian-income.co.uk.

Investor Relations

The Company subscribes to the Manager's Promotional and Investor Relations programme.

The Manager and Investment Manager

The key service providers for the Company are the Manager, abrdn Capital International Limited, and the Investment Manager, abrdn Asia Limited, and the performance of both is reviewed in detail at each Board meeting.

Key Stakeholders - Shareholders

Shareholders are key stakeholders in the Company - they are looking to the Manager and Investment Manager to achieve the investment objective over time and to deliver a regular growing income together with some capital growth. The Board is available to meet at least annually with shareholders at the AGM. This is seen as a very useful opportunity to understand the needs and views of the shareholders. In between AGMs, the Directors and Investment 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 Stakeholders - 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. The service providers look to the Company to provide them with a clear understanding of its 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 in detail at least annually. The aim is to ensure that contractual arrangements remain competitively priced 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 Custodian, 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 were 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.

During the year, the Board confirmed that the continuing appointment of the Manager with the delegation arrangements to the Investment Manager, on the terms agreed, is in the interests of shareholders as a whole.

Gearing

The Company utilises gearing in the form of bank debt with the aim of enhancing shareholder returns over the longer term. The Company has a £40 million revolving credit facility and a £10 million fixed rate loan both scheduled to mature in March 2024. The Board reviews the level of gearing at each Board meeting.

Share Buybacks

During the year, the Board continued to buy back Ordinary shares opportunistically in order to provide liquidity to the market.

ESG

The Board is responsible for overseeing the work of the Investment Manager and this is not limited solely to the investment performance of the portfolio companies. The Board also has regard for environmental, social and governance ("ESG") matters that subsist within the portfolio companies. During the year, the Board conducted regular meetings and met with the Investment Manager's ESG team in Singapore in order to discuss the Investment Manager's principles and policies. The Board is supportive of, and encourages, the Investment Manager's pro-active approach to ESG engagement.

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 continues 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.

Online Shareholder Presentation

To encourage and promote stronger interaction and engagement with the Company's shareholders, the Board will hold an interactive online shareholder presentation which will be held at 10.00 a.m. on Wednesday 26 April 2023. At the presentation, shareholders will receive updates from the Chairman and Investment Manager and there will be the opportunity for an interactive question and answer session. The online presentation is being held ahead of the AGM to allow shareholders to submit their proxy votes prior to the meeting.

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
Dividend Payments per Ordinary share	The Board aims to grow the Company's dividends over time. Dividends paid over the past 10 years are set out above.
Performance	Absolute Performance: The Board monitors the Company's NAV total return performance in absolute terms.
	Relative Performance: The Board also measures performance against the MSCI AC Asia Pacific ex Japan Index (currency adjusted) and the MSCI AC Asia Pacific ex Japan High Dividend Yield Index (currency adjusted) and performance relative to other investment companies within the Company's peer group over a range of time periods, taking into consideration the differing investment policies and objectives employed by those companies.
	Share Price Performance: The Board also monitors the price at which the Company's shares trade relative to the MSCI AC Asia Pacific ex Japan Index (currency adjusted) and the MSCI AC Asia Pacific ex Japan High Dividend Yield Index (currency adjusted) on a total return basis over time. The Board measures performance over a time horizon of at least five years.
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 twofold: (i) to maintain the price at which the Ordinary shares trade, relative to the exclusive of current period income NAV, at a discount of no more than 5% in normal market conditions; and (ii) to avoid large fluctuations in the discount/premium, relative to similar investment companies investing in the region, by the use of share buy backs or the issuance of new shares, subject to market conditions.
Ongoing Charges Ratio	The Board monitors the Company's operating costs carefully. Ongoing charges for the year and previous year are disclosed above.
Gearing	The Board ensures that gearing is kept within the Board's guidelines to the Manager.

Risk Management

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. The Board has undertaken a robust review of the principal and emerging 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 reviews the risks and uncertainties faced by the Company in the form of a risk matrix and heat map at its Audit Committee meetings and a summary of the principal risks are set out below. The Board also has a process to consider emerging risks and if any of these are deemed to be significant they are categorised, rated and added to the risk matrix for closer monitoring.

The Board considers that a number of contingent risks stemming from the Covid-19 pandemic may continue to linger, which may impact the operation of the Company. These include investment risks surrounding the companies in the portfolio such as employee absence, reduced demand, reduced turnover and supply chain breakdowns. In addition, the Russian military offensive against Ukraine has resulted in heightened security and cyber threats across the globe as well as market disruption and heightened geo-political uncertainty. Whilst the Company has no holdings in Ukraine or Russia, these contingent and emerging risks from the conflict may have a global impact for some time and may affect the portfolio in the form of higher energy prices as well as increased volatility. The Investment Manager will continue to review carefully the composition of the Company's portfolio and to be pro-active in taking investment decisions where necessary.

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

Risk Management	Mitigating Action
Investment strategy and objectives - the setting of an unattractive strategic proposition to the market and the failure to adapt to changes in investor demand may lead to poor performance, the Company becoming unattractive to investors, a decreased demand for shares and a widening discount.	The Board keeps the investment objective and policy as well as the level of discount and/or premium at which the Company's Ordinary shares trade under review. In particular, there are periodic strategy discussions where the Board reviews the Investment Manager's investment processes, analyses the work of the Manager's Promotional and Investor Relations teams and receives reports on the market from the Broker. In addition, the Board is updated at each Board meeting on the make-up of and any movements in the shareholder register.
Investment portfolio, investment management - investing outside of the investment restrictions and guidelines set by the Board could result in poor performance and an inability to meet the Company's objectives or a regulatory breach.	The Board sets, and monitors, its investment restrictions and guidelines, and receives regular reports which include performance reporting on the implementation of the investment policy, the investment process and application of the Board guidelines. The Investment Manager is represented at all Board meetings.
Financial obligations - the ability of the Company to meet its financial obligations, or increasing the level of gearing, could result in the Company becoming over-geared or unable to take advantage of potential opportunities and result in a loss of value to the Company's Ordinary shares.	The Board sets a gearing limit and receives regular updates on the actual gearing levels the Company has reached from the Investment Manager together with the assets and liabilities of the Company and reviews these at each Board meeting.
Financial - the financial risks associated with the portfolio could result in losses to the Company.	The financial risks associated with the Company include market risk, liquidity risk and credit risk, all of which are mitigated in conjunction with the Investment Manager. Further details of the steps taken to mitigate the financial risks associated with the portfolio are set out in note 18 to the financial statements.
Regulatory - failure to comply with relevant regulation (including Jersey Company Law and Regulations, the Financial Services and Markets Act, The Packaged Retail and Insurance-based Investment Products (PRIIPS) Regulation, the Alternative Investment Fund Managers Directive, Accounting Standards, the UK Corporation Tax Act 2010 and the FCA's Listing Rules, Disclosure Guidance and Transparency Rules and Prospectus Rules) may have an impact on the Company.	The Board relies upon the abrdn Group to ensure the Company's compliance with applicable law and regulations and from time to time employs external advisers to advise on specific concerns. The Board also reviews the Manager's compliance manual and compliance monitoring plan.
Operational - the Company is dependent on third parties for the provision of all systems and services (in particular, those of the abrdn Group) and any control failures and gaps in these systems and services could result in a loss or damage to the Company.	The Board monitors operational risk and as such receives internal controls and risk management reports from the Investment Manager at each Board meeting. It also receives assurances from all its significant service providers, as well as back to back assurance from the Manager at least annually. Further details of the internal controls which are in place are set out in the Directors' Report.
Income and dividend risk - there is a risk that the portfolio could fail to generate sufficient income to meet the level of the annual dividend, thereby drawing upon, rather than replenishing, its revenue and/or capital reserves.	The Board monitors this risk through the review of income forecasts, provided by the Investment Manager, at each Board meeting.

Promoting the Company

The Board recognises the importance of communicating the long-term attractions of the Company to prospective investors both for improving liquidity and enhancing the value and rating of the Company's Ordinary shares. The Board believes an effective way to achieve this is through subscription to and participation in the promotional programme run by the abrdn Group on behalf of a number of investment companies under its management. The Company also supports the abrdn investor relations programme which involves regional roadshows and promotional and public relations campaigns. The purpose of these initiatives 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. The Company's financial contribution to the programmes is matched by the Manager. abrdn's closed end fund sales and promotional teams report 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 Company, through the Manager, has also commissioned independent paid-for research which has been undertaken by Edison Investment Research Limited and a copy of the latest research is available for download from the Company's website.

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, the principle of diversity in its recruitment of new Board members, including diversity of thought, location and background. 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. At 31 December 2022, the Company did not have any employees and there were four male Directors and two female Directors on the Board. There are two Directors based in Singapore, two Directors based in Jersey and two Directors based in the UK.

Environmental, Social and Human Rights Issues

The Company has no employees as management of the assets is delegated to the Manager and sub-delegated to the Investment Manager. There are therefore no disclosures to be made in respect of employees.

Due to the nature of the Company's business, being a Company that does not offer goods and services to customers, the Board considers that it is not within the scope of the UK's Modern Slavery Act 2015 because it has no turnover. The Company, therefore, is not required to make a slavery and human trafficking statement.

Global Greenhouse Gas Emissions

The Company has no greenhouse gas emissions to report from the operations of its business, nor does it have direct responsibility for any other emissions producing sources.

Under Listing Rule 15.4.29(R), the Company, as a closed ended investment company, is exempt from complying with the Task Force on Climate Change-related financial disclosures.

Socially Responsible Investment Policy

The Company supports the UK's Stewardship Code, and seeks to play its role in supporting good stewardship of the companies in which it invests. While the 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.

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 focused upon the following factors:

- The principal risks detailed in the Strategic Report;

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

- The demand for the Company's shares evidenced by the historical level of premium and/or discount;

- The level of income generated by the Company;

- Current market conditions caused by the global impact of Covid-19 and the conflict in Ukraine;

- The liquidity of the Company's portfolio; and,

- The flexibility and certainty provided by the £40 million revolving credit facility and £10 million fixed term loan which do not expire until March 2024.

Accordingly, taking into account the Company's current position, the fact that its 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 its assessment, the Board is also aware that there are other matters that could have an impact on the Company's prospects or viability in the future, including the long-term impact of the war in Ukraine, significant stock market volatility, and changes in regulation or investor sentiment.

Future

Many of the non-performance related trends likely to affect the Company in the future are common across all closed- end investment companies, such as the attractiveness of investment companies as investment vehicles, the increased focus on ESG factors when making investment decisions, the impact of regulatory changes and the effects of changes to the pensions and savings market in the UK in recent years.These factors need to be viewed alongside the outlook for the Company, both generally and specifically, in relation to the portfolio. The Board's view on the general outlook for the Company can be found in the Chairman's Statement whilst the Investment Manager's views on the outlook for the portfolio are included in its statement.

Ian Cadby

Chairman

4 April 2023

1st Floor, Sir Walter Raleigh House

48 - 50 Esplanade

St Helier

Jersey JE2 3QB

DIVIDENDS AND TEN YEAR FINANCIAL RECORD

Dividends

	Rate	Ex-dividend date	Record date	Payment date
First interim 2022	2.30p	21 April 2022	22 April 2022	23 May 2022
Second interim 2022	2.30p	28 July 2022	29 July 2022	22 August 2022
Third interim 2022	2.30p	27 October 2022	28 October 2022	18 November 2022
Fourth interim 2022	3.10p	19 January 2023	20 January 2023	17 February 2023
2022	10.00p
First interim 2021	2.25p	22 April 2021	23 April 2021	21 May 2021
Second interim 2021	2.25p	29 July 2021	30 July 2021	20 August 2021
Third interim 2021	2.25p	21 October 2021	22 October 2021	18 November 2021
Fourth interim 2021	2.75p	20 January 2022	21 January 2022	17 February 2022
2021	9.50p

Ten Year Financial Record

	2013	2014	2015	2016	2017	2018	2019	2020	2021	2022

Total revenue (£'000)	18,736	19,333	21,216	20,947	21,758	21,056	20,996	16,942	20,198	21,841
Per Ordinary share (p)
Revenue return	8.23	8.24	9.11	9.15	9.58	9.25	9.42	7.41	8.95	10.23
Total return	(6.69)	14.17	(18.86)	49.12	33.14	(13.17)	22.29	27.10	25.88	(10.01)
Dividends payable	7.90	8.00	8.50	8.75	9.00	9.15	9.25	9.30	9.50	10.00
Net asset value per Ordinary share (p)	191.56	197.84	170.58	211.82	235.63	213.96	227.15	245.40	262.76	243.44
Share price per Ordinary share (p)	195.00	199.88	159.00	194.25	218.00	195.75	214.00	228.50	231.00	215.00
Equity shareholders' funds (£'000)	371,117	384,868	329,432	396,028	431,869	382,199	403,403	431,476	450,790	413,447

LIST OF INVESTMENTS

As at 31 December 2022
			Valuation	Total	Valuation
			2022	assets^A	2021^B
Company		Country	£'000	%	£'000
	Taiwan Semiconductor Manufacturing Company	Taiwan	26,538	5.8	39,135
	Samsung Electronics (Pref)	South Korea	21,308	4.7	36,025
	DBS Group	Singapore	19,925	4.4	16,951
	BHP Group	Australia	18,860	4.1	14,155
	Oversea-Chinese Banking Corporation	Singapore	14,722	3.2	16,699
	Venture Corporation	Singapore	14,555	3.2	15,056
	China Resources Land	China	11,804	2.6	9,629
	United Overseas Bank	Singapore	11,688	2.6	8,165
	Rio Tinto^C	Australia	11,480	2.5	9,197
	LG Chem (Pref)	South Korea	11,477	2.5	8,821
	Top ten investments		162,357	35.6
	AIA Group	Hong Kong	10,789	2.4	7,638
	Taiwan Mobile	Taiwan	10,126	2.2	10,561
	Power Grid Corp of India	India	9,803	2.2	10,021
	National Australia Bank	Australia	9,073	2.0	4,411
	Spark New Zealand	New Zealand	8,705	1.9	7,886
	Keppel Infrastructure Trust	Singapore	8,534	1.9	5,026
	Hon Hai Precision Industry	Taiwan	8,441	1.9	8,670
	Commonwealth Bank of Australia	Australia	8,356	1.8	8,923
	Tisco Financial Group Foreign	Thailand	8,064	1.8	8,835
	Charter Hall Long Wale REIT	Australia	8,035	1.7	8,598
	Top twenty investments		252,283	55.4
	Singapore Telecommunications	Singapore	7,926	1.7	4,670
	Region RE	Australia	7,874	1.7	7,991
	Momo.com Inc	Taiwan	7,242	1.6	15,095
	Infosys	India	6,715	1.5	12,594
	Centuria Industries REIT	Australia	6,702	1.5	8,238
	China Merchants Bank 'A'	China	6,692	1.5	7,868
	Hang Lung Properties	Hong Kong	6,685	1.5	4,723
	Auckland International Airport	New Zealand	6,492	1.4	7,085
	Hong Kong Exchanges & Clearing	Hong Kong	6,461	1.4	5,606
	Bank Rakyat	Indonesia	6,236	1.3	5,031
	Top thirty investments		321,308	70.5
	Capitaland Investment	Singapore	6,040	1.3	4,931
	Singapore Technologies Engineering	Singapore	5,923	1.3	5,858
	ASX	Australia	5,898	1.3	7,712
	Hana Microelectronics (Foreign)	Thailand	5,776	1.3	9,139
	China Vanke (H shares)	China	5,727	1.2	3,432
	Siam Cement ^D	Thailand	5,696	1.2	5,920
	SAIC Motor 'A'	China	5,599	1.2	7,745
	Okinawa Cellular Telephone	Japan	5,308	1.2	4,741
	Accton Technology	Taiwan	5,182	1.1	5,669
	Capitaland India Trust	Singapore	5,006	1.1	4,835
	Top forty investments		377,463	82.7
	Sunonwealth Electric Machine	Taiwan	4,967	1.1	5,090
	NZX	New Zealand	4,871	1.1	6,093
	Tata Consultancy Services	India	4,550	1.0	7,794
	Kasikornbank Bank PCL (Foreign)	Thailand	4,529	1.0	-
	Midea Group 'A'	China	4,187	0.9	5,765
	Land & Houses Foreign	Thailand	4,166	0.9	3,410
	Lotus's Retail Growth Freehold And Leasehold Property Fund (Foreign)	Thailand	4,142	0.9	4,571
	GlobalWafers	Taiwan	4,024	0.9	9,834
	Dah Sing Financial Holding	Hong Kong	3,755	0.9	-
	ICICI Bank E	India	3,596	0.8	3,761
	Top fifty investments		420,250	92.2
	KMC Kui Meng	Taiwan	3,514	0.8	4,879
	Convenience Retail Asia	Hong Kong	3,425	0.8	2,779
	Medibank Private	Australia	3,418	0.8	3,695
	Amada Co	Japan	3,344	0.7	3,752
	Macquarie Group	Australia	3,271	0.7	2,125
	MediaTek	Taiwan	2,789	0.6	-
	Digital Core REIT	Singapore	2,590	0.6	4,851
	AEM Holding	Singapore	2,120	0.5	-
	China Resources Gas	China	1,975	0.4	2,645
	Taiwan Union Technology	Taiwan	1,627	0.3	-
	Top sixty investments		448,323	98.4

	G3 Exploration^E	China	-	-	-
	Total value of investments		448,323	98.4
	Net current assets^F		7.215	1.6
	Total assetsA		455,538	100.0

^A Net assets excluding borrowings.

^B Purchases and/or sales effected during the year may result in 2022 and 2021 values not being directly comparable.

^C Incorporated in and listing held in United Kingdom.

^D Holding includes investment in common (£3,808,000) and non-voting depositary receipt (£1,888,000) lines.

^E Corporate bonds.

^F Excludes bank loans of £40,967,000

DIRECTORS' REPORT (EXTRACT)

Introduction

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

Results and Dividends

The financial statements for the year ended 31 December 2022 are contained below. The Company's dividend policy is to pay interim dividends on a quarterly basis and for the year to 31 December 2022 dividends were paid on 23 May, 22 August and 18 November 2022 and 17 February 2023. As at 31 December 2022 the Company's revenue reserves (adjusted for the payment of the fourth interim dividend) amounted to £7.3 million (approximately 4.3p per Ordinary share).

Status

The Company is registered with limited liability in Jersey as a closed-end investment company under the Companies (Jersey) Law 1991 with registered number 91671 and regulated as an Alternative Investment Fund by the Jersey Financial Services Commission. In addition, the Company constitutes and is regulated as a collective investment fund under the Collective Investment Funds (Jersey) Law 1988 and is an Alternative Investment Fund (within the meaning of Regulation 3 of the Alternative Investment Fund Regulations). The Company has no employees and makes no political donations. The Ordinary shares are admitted to the Official List in the premium segment and are traded on the London Stock Exchange's Main Market.

With effect from 1 January 2022 the Company applied to HM Revenue & Customs to become 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 January 2022. The Directors are of the opinion that the Company has conducted its affairs for the period from 1 January 2022 so as to enable it to comply with the ongoing requirements for investment trust status.

The Company is a member of the Association of Investment Companies ("AIC").

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, Issuance and Buybacks

The Company's capital structure is summarised in note 15 to the financial statements. At 31 December 2022, there were 169,832,401 fully paid Ordinary shares of no par value (2021 - 171,558,896) Ordinary shares in issue. At the year end there were 25,100,988 Ordinary shares held in treasury (2021 - 23,374,493).

During the year 1,726,495 Ordinary shares were purchased in the market for treasury (2021 - 4,265,587) and no Ordinary shares were issued or sold from treasury.

Subsequent to the year end 499,669 Ordinary shares have been purchased in the market at a discount for treasury.

Voting Rights

Each Ordinary share holds one voting right and shareholders are entitled to vote on all resolutions which are proposed at general meetings of the Company. The Ordinary shares, excluding treasury shares, carry a right to receive dividends. On a winding up or other return of capital, after meeting the liabilities of the Company, the surplus assets will be paid to Ordinary shareholders in proportion to their shareholdings. There are no restrictions on the transfer of Ordinary shares in the Company other than certain restrictions which may be applied from time to time by law.

Borrowings

The Company has a three-year £10 million term facility and a £40 million revolving credit facility with Bank of Nova Scotia, London Branch on an unsecured basis, both maturing in March 2024. £10 million has been drawn down under the term facility and fixed for three years at an all-in rate of 1.53%. Under the revolving credit facility, HKD 73.5 million, US$ 8.85 million and £15.8 million is currently drawn at the prevailing Sterling Overnight Index Average (SONIA) plus the margin of 1.2%. Under the terms of the revolving credit facility, the Company also has the option to increase the level of the commitment from £40 million to £60 million at any time, subject to the identification by the Investment Manager of suitable investment opportunities and the lender's credit approval.

Management Arrangements

abrdn Capital International Limited ("aCIL") is the Company's Manager and Company Secretary. aCIL is a wholly owned subsidiary of abrdn plc.

The investment management of the Company is delegated from aCIL to abrdn Asia Limited.

Management Fee

Under the terms of the management agreement dated 21 March 2017, management services are provided by aCIL.

Further details are provided in note 5 to the financial statements. In 2021, the Directors negotiated a new, lower, level of management fee with the Manager and with effect from

1 January 2022 the management fee has been calculated on the following tiered basis:

i. Average Value up to £350 million - 0.8% per annum; and

ii. Average Value in excess of £350 million - 0.6% per annum.

iii. The management fee is calculated and accrued on a monthly basis (being 1/12th of the value resulting from the sum of (i) plus (ii) above) and is payable quarterly in arrears.

Termination of the management agreement is subject to six months' notice.

The Directors review the terms of the management agreement on a regular basis and have confirmed that, due to the investment skills, experience and commitment of the Manager, in their opinion the continuing appointment of aCIL with the delegation arrangements to the Investment Manager, on the terms agreed, is in the interests of shareholders as a whole.

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 18 to the financial statements.

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 December 2022:

Shareholder	No of Shares Held	%held
1607 Capital Partners	18,520,986	10.9
Rathbones	15,679,419	9.2
Hargreaves Lansdown ^A	13,035,528	7.7
Interactive Investor ^A	12,001,513	7.1
City of London Inv. Management	8,981,655	5.3
abrdn Retail Plans ^A	8,492,715	5.0
Allspring Global Investors	7,129,953	4.2
RBC Brewin Dolphin	6,773,357	4.0
Charles Stanley	6,293,472	3.7
AJ Bell ^A	5,247,986	3.1
^A Non-beneficial interests

There have been no changes notified in respect of these holdings in the period from 31 December 2022 to 4 April 2023.

Directors

The Board currently consists of six non-executive Directors, Robert Kirkby, Mark Florance, Ian Cadby, Nicky McCabe, Krystyna Nowak and Hugh Young who each held office throughout the year.

Governance

The names of each of the six current Directors are disclosed above. As explained in more detail in the Chairman's Statement, Mr Young, who was appointed to the Board as a non-independent Director at the launch of the Company in 2005, will retire at the Annual General Meeting ("AGM") and will not seek re-election. In accordance with the AIC's Code of Corporate Governance, which recommends that all Directors should be subject to annual re-election by shareholders, all the other members of the Board will retire at the AGM and will offer themselves for re-election.

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. The Board has reviewed each of the proposed re-elections and concluded that each of the Directors has the requisite high level and range of business and financial experience and recommends their re-election at the forthcoming AGM.

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

Policy on Tenure

Directors are not currently required to serve on the Board for a limited period of time only. However, the Board's intention is to follow best practice in this area and for the independent Directors, including the Chairman, to serve for up to a maximum of nine years on the Board.

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.

The UK Code includes provisions relating to:

- interaction with the workforce (provisions 2, 5 and 6);

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

- previous experience of the chairman of a remuneration committee (provision 32); and

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

The Board considers that these provisions 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 these provisions.

Full details of the Company's compliance with the AIC Code of Corporate Governance can be found on its website.

Directors attended the following scheduled Board and Committee meetings during the year ended 31 December 2022 (with their eligibility to attend the relevant meeting in brackets):

	Board	Audit	MEC	Nom
Total Meetings	4	2	1	1
I Cadby ^A	4 (4)	2 (2)	1 (1)	1 (1)
M Florance	4 (4)	2 (2)	1 (1)	1 (1)
R Kirkby	4 (4)	2 (2)	1 (1)	1 (1)
N McCabe	4 (4)	2 (2)	1 (1)	1 (1)
K Nowak	4 (4)	2 (2)	1 (1)	1 (1)
H Young ^B	3 (4)	n/a	n/a	- (1)

^A Mr Cadby is not a member of the Audit Committee but attended both meetings by invitation.

^B Mr Young is not a member of the Audit or Management Engagement Committees.

In addition to the above meetings there have been a number of ad hoc Board Meetings to review and approve dividends and other operational matters.

The Board has a schedule of matters reserved to it for decision and the requirement for Board approval on these matters is communicated directly to the senior staff of the Manager. Such matters include strategy, gearing, treasury and dividend policy. Full and timely information is provided to the Board to enable the Directors to function effectively and to discharge their responsibilities. The Board also reviews the financial statements, performance and revenue budgets.

The Role of the Chairman and Senior Independent Director

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

The Senior Independent Director acts as a sounding board for the Chairman and acts as an intermediary for other Directors, when necessary. Working closely with the Nomination and Remuneration Committee, the Senior Independent Director takes responsibility for an orderly succession process for the Chairman, and leads the annual appraisal of the Chairman's performance. The Senior Independent Director is also available to shareholders to discuss any concerns they may have.

Management of Conflicts of Interests

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 are required to disclose other positions held and all other conflict situations that may need to be authorised either in relation to the Director concerned or his or her 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 20 to the financial statements. No other Directors had any interest in contracts with the Company during the period or subsequently.

The Company has a policy of conducting its business in an honest and ethical manner. The Company takes a zero tolerance approach to bribery and corruption and has procedures in place that are proportionate to the Company's circumstances to prevent them. The abrdn Group also adopts a group-wide zero tolerance approach and has its own detailed policy and procedures in place to prevent bribery and corruption. Copies of the abrdn Group's anti-bribery and corruption policies are available on its website: abrdn.com.

Going Concern

The Directors have undertaken a robust review of the Company's viability and ability to continue as a going concern. The Company's assets consist primarily of a diverse portfolio of listed equity shares which in most circumstances are realisable within a very short timescale.

In assessing the Company's ability to continue as a going concern, the Board has also taken into account progress made in relation to appointing a new administrator in Jersey (see Chairman's Statement).

to continue its operational existence for the foreseeable future and at least 12 months from the date of this Annual Report.

Accordingly, the Directors continue to adopt the going concern basis in preparing these financial statements.

Accountability and Audit

Each Director confirms that, so far as he or she is aware, there is no relevant audit information of which the Company's Auditor is unaware, and he or she has taken all the steps that they ought to have taken as a Director in order to make themselves aware of any relevant audit information and to establish that the Company's Auditor is aware of that information.

Independent Auditor

Shareholders approved the re-appointment of KPMG Channel Islands Limited as independent Auditor at the AGM held on 11 May 2022 and a resolution to re-appoint KPMG Channel Islands Limited as the Company's Auditor and to authorise the Directors to fix the Auditor's remuneration will be put to shareholders at the AGM to be held on 10 May 2023.

Principal Risks and Internal Control

The Principal Risks and Uncertainties facing the Company are detailed above. The Board of Directors is ultimately responsible for the Company's system of internal control and for reviewing its effectiveness.

Following the Financial Reporting Council's publication of "Guidance on Risk Management, Internal Controls and Related Financial and Business Reporting" (the "FRC Guidance"), the Directors confirm that there is an ongoing process for identifying, evaluating and managing the principal risks faced by the Company. This process has been in place for the full year under review and up to the date of approval of the financial statements, and this process is regularly reviewed by the Board and accords with the FRC Guidance.

The design, implementation and maintenance of controls and procedures to safeguard the assets of the Company and to manage its affairs properly extends to operational and compliance controls and risk management. The Board has prepared its own risk register which identifies potential risks relating to strategy, investment management, shareholders, marketing, gearing, regulatory and financial obligations, third party service providers and the Board. The Board considers the potential cause and possible impact of these risks as well as reviewing the controls in place to mitigate these potential risks. A risk is rated by having a likelihood and an impact rating and the residual risk is plotted on a "heat map" and is reviewed regularly.

The Board has reviewed the effectiveness of the system of internal control and, in particular, it has reviewed the process for identifying and evaluating the principal risks faced by the Company and the policies and procedures by which these risks are managed.

The Directors have delegated the investment management of the Company's assets to the Manager which has, in turn, delegated the responsibility to the Investment Manager within overall guidelines. 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 Manager'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 Manager's activities. Risk is considered in the context of the FRC Guidance and includes financial, regulatory, market, operational and reputational risk. This helps the internal audit risk assessment model identify those functions for review. Any relevant 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 key components designed to provide effective internal control for the year under review and up to the date of this Report are outlined below:

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

- the Board and Manager have agreed clearly defined investment criteria;

- there are specified levels of authority and exposure limits. Reports on these issues, including performance statistics and investment valuations, are regularly submitted to the Board. The Investment Manager's investment process and financial analysis of the companies concerned include detailed appraisal and due diligence;

- as a matter of course the compliance department of aCIL continually reviews the Investment Manager's operations;

- written agreements are in place which specifically define the roles and responsibilities of the Manager, Investment Manager and other third-party service providers and the Audit Committee reviews, where relevant, ISAE3402 Reports, a global assurance standard for reporting on internal controls for service organisations. The Board has reviewed the exceptions arising from the abrdn Group's Investment Vector ISAE3402 for the year to 30 September 2022, none of which were judged to be of direct relevance to the Company;

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

- twice a year, at its meetings, the Audit Committee carries out an assessment of internal controls by considering documentation from the Manager, including its internal audit and compliance functions and taking account of events since the relevant period end.

In addition, the Manager and Investment Manager ensure that clearly documented contractual arrangements exist in respect of any activities that have been delegated to external professional organisations. The Board meets periodically with representatives from the Custodian, BNP Paribas Securities

Services, London Branch, and receives control reports covering its activities.

Representatives from the Manager's internal audit department report six monthly to the Audit Committee of the Company and have direct access to the Directors at any time.

The 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 provide reasonable but not absolute assurance against material misstatement or loss.

The UK Stewardship Code and Proxy Voting

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

abrdn plc is a tier 1 signatory of the UK Stewardship Code which aims to enhance the quality of engagement by investors with investee companies in order to improve their socially responsible performance and the long term investment return to shareholders.

Relations with Shareholders

The Directors place a great deal of importance on communication with shareholders. The Chairman welcomes feedback from all shareholders and meets periodically with the largest shareholders to discuss the Company. The Annual Report and financial statements are available on the Company's website and are 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.

The Notice of the Annual General Meeting included within the Annual Report and financial statements is ordinarily sent out at least 20 working days in advance of the meeting. All shareholders have the opportunity to put questions to the Board or Manager, either formally at the Company's Annual General Meeting or informally following the meeting. As explained in the Chairman's Statement, the Company will hold an online shareholder presentation in advance of the Annual General Meeting this year, which will include an interactive question and answer session.

The Company Secretary is available to answer general shareholder queries at any time throughout the year. The Directors are keen to encourage dialogue with shareholders and the Chairman welcomes direct contact from shareholders.

The Board's policy is to communicate directly with shareholders and their representative bodies without the involvement of the management group (either the Company Secretary, the Manager or the Investment Manager) in situations where direct communication is required and usually a representative from the Board meets with major shareholders on an annual basis in order to gauge their views.

Alternative Investment Fund Managers Directive ("AIFMD")

In accordance with the Alternative Investment Funds (Jersey) Regulations 2012, the Jersey Financial Services Commission ("JFSC") has granted its permission for the Company to be marketed within any EU Member State or other EU State to which the AIFMD applies. The Company's registration certificate with the JFSC mandates that the Company "must comply with the applicable sections of the Codes of Practice for Alternative Investment Funds and AIF Services Business".

aCIL, as the Company's non-EEA alternative investment fund manager, has notified the UK Financial Conduct Authority in accordance with the requirements of the UK National Private Placement Regime of its intention to market the Company (as a non-EEA AIF under the AIFMD) in the UK.

In addition, in accordance with Article 23 of the AIFMD and Rule 3.2.2 of the Financial Conduct Authority ("FCA") Fund Sourcebook, aCIL is required to make available certain disclosures for potential investors in the Company. These disclosures, in the form of a Pre-Investment Disclosure Document ("PIDD"), are available on the Company's website.

Annual General Meeting

The AGM will be held at 10:30 a.m. on 10 May 2023 at Wallacespace Spitalfields, 15-25 Artillery Lane, London E1 7HA.

Ian Cadby

Chairman

4 April 2023

1st Floor, Sir Walter Raleigh House

48 - 50 Esplanade

St Helier

Jersey JE2 3QB

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors are responsible for preparing the Annual Report and financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law they are required to prepare the financial statements in accordance with International Financial Reporting Standards as issued by the IASB and applicable law.

Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of its profit or loss for that period. In preparing these financial statements, the Directors are required to:

- select suitable accounting policies and then apply them consistently;

- make judgements and estimates that are reasonable, relevant and reliable;

- state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;

- assess the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and

- use the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations or have no realistic alternative but to do so.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at

any time the financial position of the Company and enable them to ensure that its financial statements comply with the Companies (Jersey) Law 1991. They are responsible for such internal controls as they determine are necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website. Legislation in the Jersey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

The Directors who hold office at the date of approval of this Director's Report confirm that, so far as they are aware, there is no relevant audit information of which the Company's Auditor is unaware, and that each Director has taken all the steps he or she ought to have taken as a Director to make himself or herself aware of any relevant audit information and to establish that the Company's Auditor is aware of that information.

Responsibility Statement of the Directors in Respect of the Annual Financial Report

We confirm that to the best of our knowledge:

- the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and

- the Strategic Report and Directors' Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.

The Directors consider the Annual Report and financial statements, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's position and performance, business model and strategy.

Ian Cadby

Chairman

4 April 2023

1st Floor, Sir Walter Raleigh House

48 - 50 Esplanade

St Helier

Jersey JE2 3QB

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website, but not the content of any information included on the website that has been prepared or issued by third parties. Legislation in Jersey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

STATEMENT OF COMPREHENSIVE INCOME

		Year ended			Year ended
		31 December 2022			31 December 2021
		Revenue	Capital	Total	Revenue	Capital		Total
	Notes	£'000	£'000	£'000	£'000	£'000		£'000
Investment income	4
Dividend income		21,423	-	21,423	19,869	-	19,869
Interest income		371	-	371	294	-	294
Stock lending income		-	-	-	2	-	2
Traded option premiums		47	-	47	33	-	33
Total revenue	3	21,841	-	21,841	20,198	-	20,198
(Losses)/gains on investments held at fair value through profit or loss	11	-	(29,033)	(29,033)	-	33,354	33,354
Net currency (losses)/gains		-	(3,204)	(3,204)	-	(266)	(266)
		21,841	(32,237)	(10,396)	20,198	33,088	53,286
Expenses
Investment management fee	5	(1,308)	(1,962)	(3,270)	(1,411)	(2,116)	(3,527)
Other operating expenses	6	(939)	-	(939)	(862)	-	(862)
Profit/(loss) before finance costs and tax		19,594	(34,199)	(14,605)	17,925	30,972	48,897

Finance costs	7	(470)	(704)	(1,174)	(238)	(357)	(595)
Profit/(loss) before tax		19,124	(34,903)	(15,779)	17,687	30,615	48,302

Tax expense	2(d), 8	(1,695)	408	(1,287)	(2,024)	(967)	(2,991)
Profit/(loss) for the year		17,429	(34,495)	(17,066)	15,663	29,648	45,311
Earnings per Ordinary share (pence)	10	10.23	(20.24)	(10.01)	8.95	16.93	25.88

The Company does not have any income or expense that is not included in profit/(loss) for the year, and therefore the "Profit/(loss) for the year" is also the "Total comprehensive income for the year".

All of the profit/(loss) and total comprehensive income is attributable to the equity holders of abrdn Asian Income Fund Limited. There are no non-controlling interests.

The total column of this statement represents the Statement of Comprehensive Income of the Company, prepared in accordance with IFRS. The revenue and capital columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies. All items in the above statement derive from continuing operations.

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

BALANCE SHEET

		As at	As at
		31 December 2021	31 December 2020
	Notes	£'000	£'000
Non-current assets
Investments held at fair value through profit or loss 11		448,323	497,370
Current assets
Cash and cash equivalents		7,328	3,268
Other receivables	12	1,175	1,438
		8,503	4,706
Creditors: amounts falling due within one year
Bank loans	13(a)	(30,986)	(36,788)
Other payables	13(b)	(1,288)	(2,917)
		(32,274)	(39,705)
Net current liabilities		(23,771)	(34,999)
Total assets less current liabilities		424,552	462,371

Creditors: amounts falling due after more than one year
Bank loans	13(a)	(9,981)	(9,965)
Deferred tax liability on Indian capital gains	13(c)	(1,124)	(1,616)
		(11,105)	(11,581)
Net assets		413,447	450,790
Stated capital and reserves
Stated capital	15	194,933	194,933
Capital redemption reserve		1,560	1,560
Capital reserve	16	204,414	242,727
Revenue reserve		12,540	11,570
Equity shareholders' funds		413,447	450,790

Net asset value per Ordinary share (pence)	17	243.44	262.76

The financial statements were approved by the Board of Directors and authorised for issue on 4 April 2023 and were signed on its behalf by:

Ian Cadby

Chairman

The accompanying notes are an integral part of the financial statements

STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2022
				Capital
			Stated	redemption	Capital	Revenue	Retained
			capital	reserve	reserve	reserve	earnings	Total
		Note	£'000	£'000	£'000	£'000	£'000	£'000
	Opening balance		194,933	1,560	242,727	11,570	-		450,790
	Buyback of Ordinary shares for treasury	15	-	-	(3,818)	-	-		(3,818)
	Loss for the year		-	-	-	-	(17,066)		(17,066)
	Transferred from retained earnings to capital reserveA		-	-	(34,495)	-	34,495		-
	Transferred from retained earnings to revenue reserve		-	-	-	17,429	(17,429)		-
	Dividends paid	9	-	-	-	(16,459)	-		(16,459)
	Balance at 31 December 2022		194,933	1,560	204,414	12,540	-		413,447

For the year ended 31 December 2021
		Stated	Capital redemption	Capital	Revenue	Retained
		capital	reserve	reserve	reserve	earnings	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000
Opening balance		194,933	1,560	222,751	12,232	-	431,476
Buyback of Ordinary shares for treasury	15	-	-	(9,672)	-	-	(9,672)
Profit for the year		-	-	-	-	45,311	45,311
Transferred from retained earnings to capital reserveA		-	-	29,648	-	(29,648)	-
Transferred from retained earnings to revenue reserve		-	-	-	15,663	(15,663)	-
Dividends paid	9	-	-	-	(16,325)	-	(16,325)
Balance at 31 December 2021		194,933	1,560	242,727	11,570	-	450,790

A Represents the capital profit/(loss) attributable to equity shareholders per the Statement of Comprehensive Income.

The revenue reserve represents the amount of the Company's reserves distributable by way of dividend.

The stated capital in accordance with Companies (Jersey) Law 1991 Article 39A is £260,822,000 (2021 - £260,822,000). These amounts include proceeds arising from the issue of shares by the Company but exclude the cost of shares purchased for cancellation or treasury by the Company.

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

CASH FLOW STATEMENT

		Year ended	Year ended
		31 December 2022	31 December 2021
	Notes	£'000	£'000
Cash flows from operating activities
Dividend income received		21,140	18,432
Interest income received		354	298
Derivative income received		47	33
Investment management fee paid		(5,169)	(3,148)
Other cash expenses		(801)	(860)
Net cash generated from operating activities before interest paid and tax		15,571	14,755
Interest paid		(1,041)	(557)
Overseas taxation paid		(1,712)	(2,009)
Net cash inflows from operating activities		12,818	12,189

Cash flows from investing activities
Purchases of investments		(55,017)	(98,164)
Sales of investments		75,625	98,324
Indian capital gains tax on sales		(83)	-
Net cash inflow from investing activities		20,525	160

Cash flows from financing activities
Purchase of own shares for treasury 15		(3,818)	(9,672)
Dividends paid 9		(16,459)	(16,325)
Loan arrangement expense paid		-	(49)
Drawdown of loans		-	25,800
Repayment of loans		(8,948)	(14,900)
Net cash outflow from financing activities		(29,225)	(15,146)
Net increase/(decrease) cash and cash equivalents		4,118	(2,797)
Cash and cash equivalents at the start of the year		3,268	6,177
Effect of foreign exchange on cash and cash equivalents		(58)	(112)
Cash and cash equivalents at the end of the year 2(f)		7,328	3,268

Non-cash transactions during the year comprised stock dividends of £616,000 (2021 - £1,373,000) (Note 4). The accompanying notes are an integral part of the financial statements.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2022

1. Principal activity

The Company is a closed-end investment company incorporated in Jersey, with its Ordinary shares being listed on the London Stock Exchange. The Company's principal activity is investing in securities in the Asia Pacific region.

2. Accounting policies

a) Basis of preparation. The financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS"), as adopted by the International Accounting Standards Board ("IASB"), and interpretations issued by the International Reporting Committee of the IASB ("IFRIC").

The financial statements have also been prepared in accordance with the Statement of Recommended Practice (SORP), 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' issued in July 2022 to the extent they are consistent with IFRS.

The Company had net current liabilities at the year end. The Directors have undertaken a robust review of the Company's viability (refer to statement on page 24) and ability to continue as a going concern. The Company's assets consist primarily of a diverse portfolio of listed equity shares which in most circumstances are realisable within a very short timescale.

Since the end of the year, the Board has noted the announcement made by abrdn plc ("abrdn") of the proposed sale of its discretionary fund management business in Jersey, which currently provides a Jersey regulatory function to the Company. The Board wishes to confirm that, notwithstanding this proposed sale, the investment management of the Company's portfolio will continue to be carried out by abrdn via its Singapore based Asian Equity team. The Board will fulfil its own duty to review carefully any new Jersey regulatory arrangements that abrdn proposes to put in place, to ensure that such arrangements remain in the best interests of the Company's shareholders. In assessing the Company's ability to continue as a going concern, the Board has taken into account progress made in relation to appointing a new administrator in Jersey.

The Directors have reviewed forecasts detailing revenue and liabilities, have set limits for borrowing and reviewed compliance with banking covenants, including the headroom available. Having taken these factors into account, the Directors believe that the Company has adequate financial resources to continue its operational existence for the foreseeable future and at least 12 months from the date of this Annual Report. Accordingly, the Directors continue to adopt the going concern basis in preparing these financial statements.

Significant accounting judgements and estimates.

The preparation of financial statements in conformity with IFRS requires the use of certain significant accounting judgements and estimates which requires management to exercise its judgement in the process of applying the accounting policies and are continually evaluated. These judgements include the assessment of the Company's ability to continue as a going concern. One area requiring significant judgement and assumption in the financial statements is the determination of the fair value hierarchy classification of quoted bonds which have been assessed as being Level 2 due to not being considered to trade in active markets. In addition, significant judgement is required to determine the fair value hierarchy classification of Thai securities held on foreign markets whose pricing is based on the local market and have been assessed as Level 1 as the local securities are considered to be identical assets in line with IFRS 13 guidance. Another area of judgement includes the assessment of whether special dividends should be allocated to revenue or capital based on their individual merits. Examples of where special dividends are allocated to capital include events such as the disposal of capital assets and capital restructuring.

Furthermore, the Board of Directors has a policy to write down the value of investments in the financial statements where there are concerns over liquidity, credit worthiness, exit opportunities and the timing of any potential receipts. The Directors believe there are no significant estimates contained within the financial statements as all investments are valued at quoted bid price and all other assets and liabilities are valued at amortised cost.

The financial statements are prepared on a historical cost basis, except for investments that have been measured at fair value through profit or loss ("FVTPL").

The accounting policies which follow set out those policies which apply in preparing the financial statements for the year ended 31 December 2022.

The financial statements are presented in sterling and all values are rounded to the nearest thousand (£'000) except when otherwise indicated.

New and amended accounting standards and interpretations.

There were no new and amended accounting standards and interpretations applied to the financial statements of the Company during the year.

Future amendments to standards and interpretations.

At the date of authorisation of these financial statements, the following amendments to Standards and Interpretations were assessed to be relevant and are all effective for annual periods beginning on or after 1 January 2023:

Standards

IAS 1 Amendments	Classification of Liabilities as Current or Non-Current (effective from 1 January 2023)
IAS 1 Amendments	Disclosure of Accounting Policies (effective from 1 January 2023)
IAS 1 Amendments	Non-current Liabilities with Covenants (effective from 1 January 2023)
IAS 8 Amendments	Definition of Accounting Estimates (effective from 1 January 2023)
IAS 12 Amendments	Deferred Tax related to Assets and Liabilities arising from a Single Transaction (effective from 1 January 2023)

The Company intends to adopt the Standards and Interpretations in the reporting period when they become effective and the Board does not anticipate that the adoption of these Standards and Interpretations in future periods will materially impact the Company's financial results in the period of initial application although there may be revised presentations to the Financial Statements and additional disclosures.

b) Income. Dividend income receivable on equity shares is recognised on the ex-dividend date. Dividend income on equity shares where no ex-dividend date is quoted is brought into account when the Company's right to receive payment is established. Where the Company has elected to receive dividends in the form of additional shares rather than in cash, the amount of the cash dividend foregone is recognised as income. Special dividends are an area of significant accounting judgement and are credited to capital or revenue according to their circumstances. Dividend income is presented gross of any non-recoverable withholding taxes, which are disclosed separately in the Statement of Comprehensive Income.

Interest is recognised on a time-proportionate basis using the effective interest method. Interest income includes interest from cash and cash equivalents. Interest from financial assets at fair value through profit or loss includes interest from debt securities.

c) Expenses. All expenses, with the exception of interest expenses, which are recognised using the effective interest method, are accounted for on an accruals basis. Expenses are charged through the revenue column of the Statement of Comprehensive Income except as follows:

- expenses which are incidental to the acquisition or disposal of an investment are treated as capital and separately identified and disclosed in note 11;

- expenses (including share issue costs) are treated as capital where a connection with the maintenance or enhancement of the value of the investments can be demonstrated; and

- the Company charges 60% of investment management fees and finance costs to capital, in accordance with the Board's expected long term return in the form of capital gains and income respectively from the investment portfolio of the Company.

d) Taxation. With effect from 1 January 2022 the Company migrated tax residency to the UK from Jersey and elected to join the UK's investment trust regime.

The tax expense for year ended 31 December 2022 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 Balance Sheet date. Profits arising in the Company for the year ended 31 December 2021 were subject to Jersey income tax at the rate of 0%.

Deferred tax is recognised in respect of all temporary differences at the Balance Sheet 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 Balance Sheet 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 temporary differences can be deducted. Deferred tax assets and liabilities are measured at the rates applicable to the legal jurisdictions in which they arise, using tax rates that are expected to apply at the date the deferred tax position is unwound. Deferred tax is charged or credited in the Statement of Comprehensive Income, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

In some jurisdictions, investment income and capital gains are subject to withholding tax deducted at the source of the income. The Company presents the withholding tax separately from the gross investment income in the Statement of Comprehensive Income.

e) Investments. The Company has adopted the classification and measurement provisions of IFRS 9 'Financial Instruments'.

The Company classifies its investments based on their contractual cash flow characteristics and the Company's business model for managing the assets. The business model, which is the determining feature for debt instruments, is such that the portfolio of investments is managed, and performance is evaluated, on a fair value basis. The Manager is also compensated based on the fair value of the Company's assets. Equity instruments are classified as FVTPL because cash flows resulting from such instruments do not represent payments of principal and interest on the principal outstanding, and therefore they fail the contractual cash flows test. Consequently, all investments are measured at FVTPL.

Purchases and sales of investments are recognised on a trade date basis. Proceeds are measured at fair value, which is regarded as the proceeds of sale less any transaction costs.

The fair value of the financial assets is based on their quoted bid price at the reporting date, without deduction for any estimated future selling costs.

Changes in the value of investments held at fair value through profit or loss and gains and losses on disposal are recognised in the Statement of Comprehensive Income as "(Losses)/gains on investments held at fair value through profit or loss" on an average cost basis. Also included within this caption are transaction costs in relation to the purchase or sale of investments, including the difference between the purchase price of an investment and its bid price at the date of purchase.

f) Cash and cash equivalents. Cash comprises cash held at banks. Cash equivalents are short-term highly liquid investments that are readily convertible to known amounts of cash and that are subject to an insignificant risk of changes in values.

For the purposes of the Cash Flow Statement, cash and cash equivalents comprise cash at bank net of any outstanding bank overdrafts.

g) Other receivables. Financial assets previously classified as loans and receivables are held to collect contractual cash flows and give rise to cash flows representing solely payments of principal and interest. As such they are measured at amortised cost. Other receivables do not carry any interest, therefore they have not been assessed for any expected credit losses over their lifetime due to their short-term nature.

h) Other payables. The Company has adopted the simplified approach under IFRS9 which allows entities to recognise lifetime expected losses on all these assets without the need to identify significant increases in credit risk. Other payables are non interest bearing and are stated at amortised cost.

i) Dividends payable. Interim dividends payable to Shareholders are recognised in the financial statements in the period in which they are declared and paid.

j) Nature and purpose of reserves

Capital redemption reserve. The capital redemption reserve arose when Ordinary shares were redeemed, at which point an amount equal to £1 per share of the Ordinary share capital was transferred from the Statement of Comprehensive Income to the capital redemption reserve. Following a law amendment in 2008, the Company is no longer required to make a transfer. Although the transfer from the Statement of Comprehensive Income is no longer required, the amount remaining in the capital redemption reserve is not distributable in accordance with the undertaking provided by the Board in the launch Prospectus.

Capital reserve. This reserve reflects any gains or losses on investments realised in the period along with any increases and decreases in the fair value of investments held that have been recognised in the Statement of Comprehensive Income. This reserve also reflects any gains realised when Ordinary shares are issued at a premium to £1 per share and any losses suffered on the redemption of Ordinary shares for cancellation at a value higher than £1 per share.

When the Company purchases its Ordinary shares to be held in treasury, the amount of the consideration paid, which includes directly attributable costs, is recognised as a deduction from the capital reserve. Should these shares be sold subsequently, the amount received is recognised in the capital reserve and the resulting surplus or deficit on the transaction remains in the capital reserve.

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 the principal reserve which is utilised to fund dividend payments to shareholders.

k) Foreign currency. Monetary assets and liabilities denominated in foreign currencies are converted into sterling at the rate of exchange ruling at the reporting date. The financial statements are presented in sterling, which is the Company's functional and presentation currency. The Company's performance is evaluated and its liquidity is managed in sterling. Therefore sterling is considered as the currency that most faithfully represents the economic effects of the underlying transactions, events and conditions. Transactions during the year involving foreign currencies are converted at the rate of exchange ruling at the transaction date. Gains or losses arising from a change in exchange rates subsequent to the date of a transaction are included as a currency gain or loss in revenue or capital in the Statement of Comprehensive Income, depending on whether the gain or loss is of a revenue or capital nature.

l) Bank loans. The Company has adopted the classification and measurement provisions of IFRS 9 'Financial Instruments'. Bank loans are measured at amortised cost using the effective interest rate method.

Bank loans are stated at the amount of the net proceeds immediately after draw down plus cumulative finance costs less cumulative payments. The finance cost of bank loans is allocated to years over the term of the debt at a constant rate on the carrying amount and charged 40% to revenue and 60% to capital to reflect the Company's investment policy and prospective revenue and capital growth.

m) Share capital. The Company's Ordinary shares are classified as equity as the Company has full discretion on repurchasing the Ordinary shares and on dividend distributions.

Issuance, acquisition and resale of Ordinary shares are accounted for as equity transactions. Upon issuance of Ordinary shares, the consideration received is included in equity.

Transaction costs incurred by the Company in acquiring or selling its own equity instruments are accounted for as a deduction from equity to the extent that they are incremental costs directly attributable to the equity transaction that otherwise would have been avoided.

Own equity instruments which are acquired (treasury shares) are deducted from equity and accounted for at amounts equal to the consideration paid, including any directly attributable incremental costs.

No gain or loss is recognised in the Statement of Comprehensive Income on the purchase, sale, issuance or cancellation of the Company's own instruments.

n) Traded options. The Company may enter into certain derivative contracts (e.g. options) to gain exposure to the market. The option contracts are classified as fair value through profit or loss and accounted for as separate derivative contracts and are therefore shown in other assets or other liabilities at their fair value i.e. market value. The premium received on the open position is recognised over the life of the option in the revenue column of the Statement of Comprehensive Income along with fair value changes in the open position which occur due to the movement in underlying securities. Losses realised on the exercise of the contracts are recorded in the capital column of the Statement of Comprehensive Income as they arise. Where the Company enters into derivative contracts to manage market risk, gains or losses arising on such contracts are recorded in the capital column of the Statement of Comprehensive Income.

3. Segmental information

The Company is organised into one main operating segment, which invests in equity securities, debt instruments and derivatives. All of the Company's activities are interrelated, and each activity is dependent on the others. Accordingly, all significant operating decisions are based upon analysis of the Company as one segment. The financial results from this segment are equivalent to the financial statements of the Company as a whole.

The following table analyses the Company's operating income by each geographical location. The basis for attributing the operating income is the place of incorporation of the instrument's counterparty.

	Year ended 31 December 2022	Year ended 31 December 2021
Asia Pacific region	20,571	17,431
United Kingdom	1,270	2,767
	21,841	20,198

4. Investment income

	Year ended 31 December 2022	Year ended 31 December 2021
Income from investments
Overseas dividend income	19,600	15,729
UK dividend income	1,207	2,767
Stock dividend income	616	1,373
	21,423	19,869
Other income
Bond interest	308	294
Deposit interest	63	-
Stock lending income	-	2
Traded option premiums	47	33
	418	329
Total revenue	21,841	20,198

During the year, the Company was entitled to premiums totalling £47,000 (2021 - £33,000) in exchange for entering into option contracts. At the year end there were no (2021 - nil) open positions. Losses realised on the exercise of derivative transactions are disclosed in note

5. Investment management fee

	Year ended 31 December 2022			Year ended 31 December 2021
Investment management fee	1,308	1,962	3,270	1,411	2,116	3,527

The Company has an agreement with abrdn Capital International Limited ("aCIL") for the provision of management services. With the exception of stocklending activities, the investment management services have been sub-delegated to abrdn Asia Limited ("abrdn Asia"). Any stocklending activity has been sub-delegated to abrdn Investments Limited.

The investment management fee is payable quarterly in arrears and with effect from 1 January 2022 is based on an annual fee of 0.8% of the average net assets of the previous six months up to £350 million and 0.6% per annum thereafter. Prior to this, the annual management fee was charged at 0.85% on the average net assets of the previous six months up to £350 million and 0.65% per annum thereafter. The balance due to aCIL at the year end was £786,000 (2021 - £2,685,000). The investment management fees are charged 40% to revenue and 60% to capital in line with the Board's expected long term returns.

6. Other operating expenses

	Year ended 31 December 2022	Year ended 31 December 2021
Directors' fees	164	166
Promotional activities^A	206	206
Auditor's remuneration:
- statutory audit	52	40
- disbursements	1	-
Custody fees	143	178
Other	373	272
	939	862

^A Promotional activities in relation to the Company's participation in the abrdn Investment Trust savings plans are provided by abrdn Investments Limited. The total fees paid are based on an annual rate of £206,000 (2021 - £206,000). An amount of £103,000 (2021 - £52,000) was payable to abrdn Investments Limited at the year end.

No fees have been paid to the Company's Auditor during the period other than those listed here.

7. Finance costs

	2022			2021
	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
Interest on bank loans	464	694	1,158	232	349	581
Amortisation of loan arrangement expenses	6	10	16	6	8	14
	470	704	1,174	238	357	595

Finance costs are charged 40% to revenue and 60% to capital as disclosed in the accounting policies.

8. Taxation

a) Analysis of tax charge in the year

	2022			2021
	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
Indian capital gains tax on sales	-	34	34	-	45	45
Overseas withholding tax	1,695	50	1,745	2,024	-	2,024
Total current tax charge for the year (note b)	1,695	84	1,779	2,024	45	2,069

Movement of deferred tax liability on Indian capital gains	-	(492)	(492)	-	922	922
Total deferred tax charge for the year (note c)	-	(492)	(492)	-	922	922

Total tax charge for the year	1,695	(408)	1,287	2,024	967	2,991

b) The UK corporation tax rate is 19% (2021 - effective rate of 0% from Jersey residency). The tax charge for the year differs from the corporation tax rate.

	2022			2021
	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
Net profit/(loss) before taxation	19,124	(34,903)	(15,779)	17,687	30,615	48,302

Corporation tax @ 19% (2021 - 0%)	3,633	(6,631)	(2,998)	-	-	-
Effects of:			-			-
UK dividends	(229)	-	(229)	-	-	-
Non-taxable overseas dividends	(3,315)	-	(3,315)	-	-	-
Currency gains/losses	-	609	609	-	-	-
Realised/unrealised gains/losses on investments	-	5,516	5,516	-	-	-
Expenses not deductible for tax purposes	10	-	10	-	-	-
Excess management expenses	(71)	507	436	-	-	-
Tax effect of expensed double taxation relief	(28)	-	(28)	-	-	-
Irrecoverable overseas withholding tax	1,695	49	1,744	2,024	-	2,024
Indian capital gains tax	-	34	34	-	45	45
Movement of deferred tax liability on Indian CGT	-	(492)	(492)	-	922	922
Total current tax charge for the year (note a)	1,695	(408)	1,287	2,024	967	2,991

c) Factors that may affect future tax charges

At the period end, after offset against income taxable on receipt, there is a potential deferred tax asset of £573,000 (2021 - £nil) in relation to surplus management expenses. It is unlikely that the fund will generate sufficient taxable profits in the future to utilise these amounts and therefore no deferred tax asset has been recognised.

9. Dividends on Ordinary shares

	Year ended 31 December 2022	Year ended 31 December 2021
Amounts recognised as distributions to equity holders in the year:
Fourth interim dividend 2021 - 2.75p per Ordinary share (2020 - 2.55p)	4,712	4,484
First interim dividend 2022 - 2.30p per Ordinary share (2021 - 2.25p)	3,924	3,954
Second interim dividend 2022 - 2.30p per Ordinary share (2021 - 2.25p)	3,915	3,951
Third interim dividend 2022 - 2.30p per Ordinary share (2021 - 2.25p)	3,908	3,936
	16,459	16,325

Following the change of tax residency, the Company is required to comply with the UK investment trust retention test to satisfy s.1158 of the Corporation Tax Act 2010. The total dividends payable in respect of the financial year which form the basis of s.1158 of the Corporation Tax Act 2010 are set out below.

The table below sets out the total dividends declared in respect of the financial year. The comparative data is also presented albeit there was no requirement to satisfy this test in the previous year when the Company was Jersey tax resident. The revenue available for distribution by way of dividend for the year is £17,429,000 (2021 - £15,663,000).

	2022 £'000	2021 £'000
First interim dividend 2022 - 2.30p per Ordinary share (2021 - 2.25p)	3,924	3,954
Second interim dividend 2022 - 2.30p per Ordinary share (2021 - 2.25p)	3,915	3,951
Third interim dividend 2022 - 2.30p per Ordinary share (2021 - 2.25p)	3,908	3,936
Fourth interim dividend 2022 - 3.10p per Ordinary share (2021 - 2.75p)	5,263	4,712
	17,010	16,553

The fourth interim dividend for 2022, amounting to £5,263,000 (2021 - fourth interim dividend of £4,712,000), is not recognised as a liability in these financial statements as it was announced and paid after 31 December 2022.

10. Earnings per share

Ordinary shares. The earnings per Ordinary share is based on the loss after taxation of £17,066,000 (2021 - profit of £45,311,000) and on 170,411,839 (2021 - 175,057,061) Ordinary shares, being the weighted average number of Ordinary shares in issue during the year excluding Ordinary shares held in treasury, which do not carry the rights to vote or to dividends.

The earnings per Ordinary share detailed above can be further analysed between revenue and capital as follows:

	Year ended 31 December 2022			Year ended 31 December 2021
	Revenue	Capital	Total	Revenue	Capital	Total
Net profit/(loss) (£'000)	17,429	(34,495)	(17,066)	15,663	29,648	45,311
Weighted average number of Ordinary shares in issue^A	170,411,839			175,057,061
Return per Ordinary share (pence)	10.23	(20.24)	(10.01)	8.95	16.93	25.88

^A Calculated excluding Ordinary shares held in treasury.

11. Investments held at fair value through profit or loss

	Year ended 31 December 2022	Year ended 31 December 2021
Opening book cost	346,679	313,692
Opening investment holding gains	150,691	149,131
Opening fair value	497,370	462,823


Analysis of transactions made during the year
Purchases at cost	55,611	99,517
Sales proceeds received	(75,625)	(98,324)
(Losses)/gains on investments^A	(29,033)	33,354
Closing fair value	448,323	497,370

	£'000	£'000
Closing book cost	346,553	346,679
Closing investment gains	101,770	150,691
Closing fair value	448,323	497,370

^A Includes losses realised on the exercise of traded options of £nil (2021 - £nil) which are reflected in the capital column of the Statement of Comprehensive Income in accordance with accounting policy 2(n). Premiums received from traded options totalled £47,000 (2021 - £33,000) per note 4.

The Company received £75,625,000 (2021 - £98,324,000) from investments sold in the year. The book cost of these investments when they were purchased was £55,736,000 (2021 - £66,530,000). 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.

	Year ended 31 December 2022	Year ended 31 December 2021
Listed on recognised stock exchanges:
Equities - overseas	444,727	493,609
Bonds - overseas	3,596	3,761
Total	448,323	497,370

Transaction costs. During the year expenses were incurred in acquiring or disposing of investments held at fair value through profit or loss. These have been expensed through capital and are included within gains on financial investments held at fair value through profit or loss in the Statement of Comprehensive Income. The total costs were as follows:

	Year ended 31 December 2022	Year ended 31 December 2021
Purchases	50	108
Sales	88	181
	138	289

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.

12. Debtors: amounts falling due within one year

	Year ended 31 December 2022	Year ended 31 December 2021
Prepayments and accrued income	1,175	1,438

None of the above assets are past their due date or impaired.

13. Creditors: amounts falling due within one year

(a) Bank loans. At the year end, the Company had the following unsecured bank loans:

	2022			2021
	Interest rate %	Local currency principal amount	Carrying amount £'000	Interest rate %	Local currency principal amount	Carrying amount £'000
Unsecured bank loans repayable within one year:
Hong Kong Dollar	6.311	73,500,000	7,829	1.374	73,500,000	6,960
United States Dollar	5.175	8,850,000	7,357	1.435	19,000,000	14,028
Sterling	4.190	15,800,000	15,800	1.310	15,800,000	15,800
Total	30,986			36,788

Unsecured bank loans repayable between one and five years:
Sterling	1.530	10,000,000	9,981	1.530	10,000,000	9,965
Total	9,981			9,965

At the date of signing this report, loans of HKD 73,500,000, US$8,850,000 and £15,800,000 were drawn down at variable interest rates of 4.20917%, 5.68456% and 4.7015% respectively under a £40 million multi currency revolving loan facility agreement with Bank of Nova Scotia, London Branch (the "Bank"). The Company also has a three year loan of £10,000,000 with the Bank at a fixed interest rate of 1.53%. Both facilities mature on 2 March 2024. Financial covenants contained within the relevant loan agreements provide, inter alia, that the Company's NAV shall at no time be less than £185 million and that adjusted NAV coverage shall at no time be less than 4.0 to 1.0. At 31 December 2022 adjusted NAV coverage was 10.1 to 1.0 based on borrowings of £40,967,000 and net assets were £413,447,000. The Company has complied with all financial covenants throughout the year.

During December 2022, the Company highlighted to the Bank that it had notified the Jersey Financial Services Commission (Jersey regulator) of remediation work to be undertaken in relation to maintaining up to date records of shareholders' identity documents as required under the Jersey laws and regulations. The remediation work related to less than 1% of long standing shareholders. The Bank considered this event as a technical loan covenant breach. Subsequent to the year end, the Bank has provided the Company with a waiver of its relevant covenant in this regard and it is therefore no longer considered to be in breach.

b) Other payables

	2022 £'000	2021 £'000
Investment management fees	786	2,685
Other amounts due	502	232
	1,288	2,917

Amounts falling due in more than one year:

	2022 £'000	2021 £'000
c) Deferred tax liability on Indian capital gains	1,124	1,616

14. Analysis of changes in financing during the year

	2022 £'000	2021 £'000
Opening balance at 1 January	46,753	35,734
Net (decrease)/increase in loan drawdown	(8,948)	10,851
Amortisation of loan arrangement expenses	16	14
Foreign exchange movements	3,146	154
Closing balance at 31 December	40,967	46,753

15. Stated capital

	Ordinary shares (number)	Treasury shares (number)	Total shares (number)	£'000
Authorised Ordinary shares of no par value	Unlimited	Unlimited	Unlimited	Unlimited
Issued and fully paid Ordinary shares of no par value
At 31 December 2021	171,558,896	23,374,493	194,933,389	194,933
Shares purchased for treasury	(1,726,495)	1,726,495	-	-
At 31 December 2022	169,832,401	25,100,988	194,933,389	194,933

During the year 1,726,495 (2021 - 4,265,587) Ordinary shares were bought back by the Company for holding in treasury at a total cost of £3,818,000 (2021 - £9,672,000). At the year end 25,100,988 (2021 - 23,374,493) Ordinary shares were held in treasury, which represents 12.88% (2021 - 11.99%) of the Company's total issued share capital at 31 December 2022.

For each Ordinary share issued £1 is allocated to stated capital, with the balance taken to the capital reserve.

The Ordinary shares give shareholders the entitlement to all of the capital growth in the Company's assets and to all the income from the Company that is resolved to be distributed.

Since the year end a further 499,669 Ordinary shares have been bought back for holding in treasury at a cost of £1,108,000.

Voting and other rights. In accordance with the Articles of Association of the Company, on a show of hands, every member (or duly appointed proxy) present at a general meeting of the Company has one vote; and, on a poll, every member present in person or by proxy shall have one vote for each Ordinary share held, excluding shares held in treasury.

The Ordinary shares carry the right to receive all dividends declared by the Company or the Directors, excluding shares held in treasury.

On a winding-up, provided the Company has satisfied all of its liabilities, holders of Ordinary shares are entitled to all of the surplus assets of the Company, excluding shares held in treasury.

16. Capital reserve

	2022 £'000	2021 £'000
At 1 January	242,727	222,751
Net currency losses^A	(3,204)	(266)
Movement in unrealised fair value	(48,921)	1,560
Profit on realisation of investments	19,888	31,794
Costs charged to capital	(2,258)	(3,440)
Buyback of Ordinary shares for treasury	(3,818)	(9,672)
At 31 December	204,414	242,727

^A Losses arising during the year have principally arisen from a revaluation of the foreign currency bank loans offset by a revaluation of foreign currency cash held.

17. Net asset value per share

Ordinary shares. The net asset value per Ordinary share and the net asset values attributable to Ordinary shareholders at the year end calculated in accordance with the Articles of Association were as follows:

	Net asset value Net per share	asset values attributable	Net asset value Net per share	asset values attributable
	2022	2022	2021	2021
	p	£'000	p	£'000
Ordinary shares	243.44	413,447	262.76	420,790

The net asset value per Ordinary share is based on 169,832,401 (2021 - 171,558,896) Ordinary shares, being the number of Ordinary shares in issue at the year end excluding Ordinary shares held in treasury.

18. Financial instruments

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, other than derivatives, comprise securities and other investments, cash balances, bank 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 Company also has the ability to enter into derivative transactions, in the form of traded options, for the purpose of enhancing income returns and portfolio management. During the year, the Company entered into certain derivative contracts. As disclosed in note 4, the premium received in respect of options written in the year was £47,000 (2021 - £33,000). Positions closed during the year realised a loss of £nil (2021 - £nil). A realised loss would result if the underlying price on exercise is higher than the exercise price for call options and lower than the exercise price for put options. The largest position in derivative contracts held during the year at any given time was £47,000 (2021 - £20,000). The Company had no open positions in derivative contracts at 31 December 2022.

The Board has delegated the risk management function to aCIL under the terms of its management agreement with aCIL (further details of which are included under note 5). 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, with the exception of short-term borrowings.

Risk management framework. The directors of aCIL collectively assume responsibility for the Manager's obligations under the AIFMD including reviewing investment performance and monitoring the Company's risk profile during the year.

aCIL is a fully integrated member of the abrdn plc Group (the "Group"), which provides a variety of services and support to aCIL in the conduct of its business activities, including in the oversight of the risk management framework for the Company. aCIL has delegated the day to day administration of the investment policy to abrdn Asia Limited, 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). aCIL has delegated responsibility for monitoring and oversight of the Investment Manager and other members of the Group which carry out services and support to aCIL.

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 Head of Risk, who reports to the Chief Executive Officer 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 Internal Audit Department is independent of the Risk Division and reports directly to the Group Chief Executive Officer 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 Group's corporate governance structure is supported by several committees to assist the board of directors of abrdn plc, 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 on the committees' terms of reference.

Risk management. The main risks arising from the Company's financial instruments are (i) market risk (comprising interest rate risk, currency risk and equity price risk), (ii) liquidity risk, (iii) credit risk and (iv) gearing risk.

The Board regularly reviews and agrees policies for managing each of these risks. The Manager's policies for managing each of these risks are summarised below and have been applied throughout the year. The numerical disclosures exclude short-term receivables and payables with the exception of the credit risk of short-term debtors.

(i) Market risk. The fair value or future cash flows of 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 equity price risk.

Interest rate risk. Interest rate risk is the risk that interest rate movements may affect:

- the fair value of the investments in fixed interest rate securities;

- the level of income receivable on cash deposits;

- the interest payable on the Company's variable rate borrowings.

Management of the risk

Financial assets. Although the majority of the Company's financial assets comprise equity shares which neither pay interest nor have a stated maturity date, at the year end the Company had two (2021 - two) holdings in fixed rate overseas corporate bonds, with G3 Exploration valued at £nil (2021 - £nil) and ICICI Bank at £3,596,000 (2021 - £3,761,000). Bond prices are determined by market perception as to the appropriate level of yields given the economic background. Key determinants include economic growth prospects, inflation, the Government's fiscal position, short-term interest rates and international market comparisons. The Investment Manager takes all these factors into account when making any investment decisions as well as considering the financial standing of the potential investee entity. G3 Exploration appointed joint liquidators during December 2019. Using an adjusted net asset value model the Board of Directors decided to write down the value of G3 Exploration to £nil due to concerns over liquidity, credit worthiness, exit opportunities and the timing of any potential receipts. There has been no change in carrying value during the year under review or as at the date of this Report.

Returns from bonds are fixed at the time of purchase, as the fixed coupon payments are known, as are the final redemption proceeds. This means that if a bond is held until its redemption date, the total return achieved is unaltered from its purchase date. However, over the life of a bond the market price at any given time will depend on the market environment at that time. Therefore, a bond sold before its redemption date is likely to have a different price to its purchase level and a profit or loss may be incurred.

Financial liabilities. The Company primarily finances its operations through use of equity, retained profits and bank borrowings. Details of the terms and conditions of the bank borrowings are disclosed in note 13. Interest is due on the Bank of Nova Scotia, London fixed term loan quarterly with the next interest payment being due on 2 March 2023. Interest is due on the Bank of Nova Scotia, London multi currency revolving loan facility on the maturity date, with the next interest payment being due on 21 February 2023 for HKD loan and 20 January 2023 for GBP and USD loans.

The Board actively monitors its bank borrowings. A decision on whether to roll over its existing borrowings will be made prior to their maturity dates, taking into account the Company's ability to draw down fixed, long-term borrowings. The Company does not employ any hedging against floating rate borrowings.

The interest rate profile of the Company (excluding short term debtors and creditors but including short term borrowings as stated previously) was as follows:

At 31 December 2022	Weighted average period for which rate is fixed Years	Weighted average interest rate %	Floating rate £'000	Fixed rate £'000
Assets
Indian Overseas Corporate Bond	1.60	9.15	-	3,596
Cash at bank - Sterling	-	-	7,277	-

Cash at bank - Australia Dollar	-	-	(203)	-
Cash at bank - Hong Kong Dollar	-	-	1	-
Cash at bank - Indian Rupee	-	-	(33)	-
Cash at bank - Taiwan Dollar	-	-	41	-
Cash at bank - Thailand Baht	-	-	245	-
			7,328	3,596
At 31 December 2022	Weighted average period for which rate is fixed Years	Weighted average interest rate %	Floating rate £'000	Fixed rate £'000
Liabilities
Bank loan - Hong Kong Dollar	0.14	6.31	-	(7,829)
Bank loan - US Dollar	0.05	5.18	-	(7,357)
Bank loan - Sterling	0.05	4.19	-	(15,800)
Bank loan - Sterling	1.17	1.53	-	(9,981)
			-	(40,967

At 31 December 2021	Weighted average period for which rate is fixed Years	Weighted average interest rate %	Floating rate £'000	Fixed rate £'000
Assets
Indian Overseas Corporate Bond	2.60	9.15	-	3,761
Cash at bank - Sterling	-	-	3,227	-
Cash at bank - Taiwan Dollar	-	-	41	-
			3,268	3,761

At 31 December 2021	Weighted average period for which rate is fixed Years	Weighted average interest rate %	Floating rate £'000	Fixed rate £'000
Liabilities
Bank loan - Hong Kong Dollar	0.07	1.37	-	(6,960)
Bank loan - US Dollar	0.07	1.43	-	(14,028)
Bank loan - Sterling	0.07	1.31	-	(15,800)
Bank loan - Sterling	2.17	1.53	-	(10,000)
			-	(46,788)

The weighted average interest rate is based on the current yield of each asset, weighted by its market value. The weighted average interest rate on bank loans is based on the interest rate payable, weighted by the total value of the loans.

The floating rate assets consist of cash deposits on call earning interest at prevailing market rates. All financial liabilities are measured at amortised cost using the effective interest rate method.

Interest rate sensitivity. The sensitivity analysis demonstrates the sensitivity of the Company's profit for the year to a reasonably possible change in interest rates, with all other variables held constant.

The sensitivity of the profit/(loss) for the year is the effect of the assumed change in interest rates on:

- the net interest income for one year, based on the floating rate financial assets held at the Balance Sheet date; and

- changes in fair value of investments for the year, based on revaluing fixed rate financial assets at the Balance Sheet date.

The Directors have considered the potential impact of a 100 basis point movement in interest rates and concluded that it would not be material in the current year (2021 - not material). This consideration is based on the Company's exposure to interest rates on its floating rate cash balances, fixed interest securities and bank loans.

Foreign currency risk. A significant proportion of the Company's investment portfolio is invested in overseas securities and the Balance Sheet can be significantly affected by movements in foreign exchange rates. It is not the Company's policy to hedge this risk on a continuing basis. A significant proportion of the Company's borrowings, as detailed in note 13, is in foreign currency as at 31 December 2022.

Management of the risk. The revenue account is subject to currency fluctuation arising on overseas income. The Company does not hedge this currency risk on a continuing basis but the Company may, from time to time, match specific overseas investment with foreign currency borrowings.

The fair values of the Company's monetary items that have foreign currency exposure at 31 December are shown below. Where the Company's equity investments (which are non-monetary items) are priced in a foreign currency, they have been included within the equity price risk sensitivity analysis so as to show the overall level of exposure.

	Equity	Net monetary assets/	Total currency	Equity	Net monetary assets/	Total currency
	investments	(liabilities)	exposure	investments	(liabilities)	exposure
	£'000	£'000	£'000	£'000	£'000	£'000
Australian Dollar	86,685	(203)	86,482	87,514	-	87,514
Chinese Renminbi	16,478	-	16,478	21,378	-	21,378
Hong Kong Dollar	50,622	(7,828)	42,794	48,169	(6,960)	41,209
Indian Rupee	21,100	3,563	24,663	30,409	3,761	34,170
Indonesian Rupiah	6,236	-	6,236	5,031	-	5,031
Japanese Yen	8,652	-	8,652	8,493	-	8,493
Korean Won	32,785	-	32,785	44,846	-	44,846
Malaysian Ringgit	-	-	-	474	-	474
New Zealand Dollar	4,871	-	4,871	6,093	-	6,093
Singapore Dollar	96,438	-	96,438	82,191	-	82,191
Taiwanese Dollar	74,450	41	74,491	98,933	41	98,974
Thailand Baht	32,372	245	32,617	31,875	-	31,875
US Dollar	2,590	(7,357)	(4,767)	4,851	(14,028)	(9,177)
Total	433,279	(11,539)	421,740	470,257	(17,186)	453,071

Foreign currency sensitivity. The following table details the impact on the Company's net assets to a 10% decrease (in the context of a 10% increase the figures below should all be read as negative) in sterling against the foreign currencies in which the Company has exposure. The sensitivity analysis includes foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates.

	2022 £'000	2022 £'000
Australian Dollar	8,648	8,751
Chinese Renminbi	1,648	2,138
Hong Kong Dollar	4,279	4,121
Indian Rupee	2,466	3,417
Indonesian Rupiah	624	503
Japanese Yen	865	849
Korean Won	3,279	4,485
Malaysian Ringgit	-	47
New Zealand Dollar	487	609
Singapore Dollar	9,644	8,219
Taiwanese Dollar	7,449	9,897
Thailand Baht	3,262	3,188
US Dollar	(477)	(918)
Total	42,174	45,306

Equity price risk. Equity price risk (i.e. changes in market prices other than those arising from interest rate or currency risk) may affect the value of the Company's quoted equity investments.

Management of the 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. The allocation of assets to international markets and the stock selection process both 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 recognised stock exchanges.

Concentration of exposure to equity price risks. The majority of the investments' value is in the Asia Pacific region. It should be recognised that an investment's country of domicile or of listing does not necessarily equate to its exposure to the economic conditions in that country.

Equity price risk sensitivity. The following table illustrates the sensitivity of the profit after taxation for the year and the equity to an increase or decrease of 10% (2021 - 10%) in the fair values of the Company's equities. This level of change is considered to be reasonably possible based on observation of current market conditions. The sensitivity analysis is based on the Company's equities at each Balance Sheet date, with all other variables held constant.

	2022		2021


	Increase in	Decrease in	Increase in	Decrease in
	fair value	fair value	fair value	fair value
	£'000	£'000	£'000	£'000
Statement of Comprehensive Income - profit after taxation
Revenue return - increase /(decrease)	-	-	-	-
Capital return - increase /(decrease)	44,473	(44,473)	-	-
Total profit after taxation - increase /(decrease)	44,473	(44,473)	49,361	(49,361)
Equity
	44,473	(44,473)	49,361	(49,361)

(ii) Liquidity risk. This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities, which stood at £43,379,000 (2021 - £51,286,000).

Management of the risk. Liquidity risk is not considered to be significant as the Company's assets comprise mainly cash and readily realisable securities, which can be sold to meet funding commitments if necessary and these amounted to £7,328,000 and £448,323,000 (2021 - £3,268,000 and £497,370,000) at the year end respectively. Short-term flexibility is achieved through the use of loan facilities.

Maturity profile. The following table sets out the undiscounted gross cash flows, by maturity, of the Company's significant financial liabilities and cash at the Balance Sheet date:

At 31 December 2022	Within 1 year £'000	Between 1-5 years £'000	Total £'000
Fixed rate
Bank loans	30,986	10,000	40,986
Interest on bank loans	281	26	307
	31,267	10,026	41,293
Floating rate
Cash	7,328	-	7,328

	Within 1 year	Between 1-5 years	Total
At 31 December 2021	£'000	£'000	£'000
Fixed rate	36,788	10,000	46,788
Bank loans	237	191	428
Interest on bank loans	37,025	10,191	47,216
	35,827	-
Floating rate
Cash	3,268	-	3,268

Details of the Company's borrowing arrangements are disclosed in note 13.

(iii) Credit risk. This is failure of the counterparty to a transaction to discharge its obligations under that transaction that could result in the Company suffering a loss. The Company is exposed to credit risk on debt instruments. These classes of financial assets are not subject to IFRS 9's impairment requirements as they are measured at FVTPL. The carrying value of these assets, under IFRS 9 represents the Company's maximum exposure to credit risk on financial instruments not subject to the IFRS 9 impairment requirements on the respective reporting dates (see table below "Credit Risk Exposure").

The Company's only financial assets subject to the expected credit loss model within IFRS 9 are only short-term other receivables. At 31 December 2022, the total of short-term other receivables was £1,175,000 (2021 - £1,438,000). Given the balance is not material an assessment of credit risk is not performed. No other assets are considered impaired and no other amounts have been written off during the year.

All other receivables are expected to be received within twelve months or less. An amount is considered to be in default if it has not been received on the due date.

As only other receivables are impacted by the IFRS 9 model, the Company has adopted the simplified approach. The loss allowance is therefore based on lifetime ECLs.

Management of the risk. Where the investment manager makes an investment in a bond, corporate or otherwise, where available, the credit rating of the issuer is taken into account so as to minimise the risk to the Company of default. The Company has the following holdings:

- a Chinese overseas corporate bond issued by G3 Exploration with a book cost of £4,611,000. G3 Exploration appointed joint liquidators during December 2019. Therefore the Board of Directors decided to write down the value of G3 Exploration to £nil due to the uncertainty over the repayment of the debt. No interest for G3 Exploration has been accrued in 2020, 2021 or 2022.

- an Indian overseas corporate bond issued by ICICI Bank with a fair value of £3,596,000 (2021 - £3,761,000).

Each of the above bonds are non-rated. The investment manager undertakes an ongoing review of their suitability for inclusion within the portfolio.

Investment transactions are carried out with a large number of brokers, whose credit rating is taken into account so as to minimise the risk to the Company of default.

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 daily basis. In addition, both stock and cash reconciliations to the Custodian's records are performed on a daily basis to ensure discrepancies are investigated 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. 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.

Cash is held only with reputable banks with high quality external credit ratings.

None of the Company's financial assets are secured by collateral or other credit enhancements.

Credit risk exposure. In summary, compared to the amounts included in the Balance Sheet, the maximum exposure to credit risk at 31 December was as follows:

	2022		2021
	Balance Sheet £'000	Maximum exposure £'000	Balance Sheet £'000	Maximum exposure £'000
	Balance Sheet £'000	Maximum exposure £'000	Balance Sheet £'000	Maximum exposure £'000
Non-current assets
Investments held at fair value through profit or loss	448,323	3,596	497,370	3,761
Current assets
Cash at bank	7,328	7,328	3,268	3,268
Other receivables	1,175	1,175	1,438	1,438
	456,826	12,099	502,076	8,467

(iv) Gearing risk. The Company's policy is to increase its exposure to equity markets through the judicious use of borrowings. When borrowings are invested in such markets, the effect is to magnify the impact on shareholders' funds of changes, both positive and negative, in the value of the portfolio. As noted in note 2(l) financial liabilities are classified under IFRS 9. The Company has not designated any financial liabilities at FVPL. Therefore, this requirement has not had an impact on the Company. The loans are carried at amortised cost, using the effective interest rate method in the financial statements.

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. Borrowings comprise fixed rate, revolving, and uncommitted facilities. The fixed rate facilities are used to finance opportunities at low rates and, the revolving and uncommitted facilities to provide flexibility in the short- term.

The Company's capital management objectives are:

- to ensure that the Company will be able to continue as a going concern; and

- to maximise the income and capital return to its equity shareholders through an appropriate balance of equity capital and debt. The policy is that debt should not exceed 25% of net assets.

The Company's capital at 31 December comprises:

	2022 £'000	2021 £'000
Debt
Borrowings under the multi-currency loan facility	30,986	36,788
Borrowing under the three year Sterling loan facility	9,981	9,965
	40,967	46,753

	2022 £'000	2021 £'000
Equity
Equity share capital	194,933	194,933
Retained earnings and other reserves	218,514	255,857
	413,447	450,790
Debt as a % of net assets^A	9.91	10.37

^A The calculation above differs from the AIC recommended methodology, where debt levels are shown net of cash and cash equivalents held.

The Board, with the assistance of the Investment Manager monitors and reviews the broad structure of the Company's capital on an ongoing basis. This review includes:

- the planned level of gearing, which takes account of the Investment Manager's views on the market;

- the need to buy back equity shares for cancellation or for holding in treasury, which takes account of the difference between the net asset value per Ordinary share and the Ordinary share price (i.e. the level of share price discount);

- the need for new issues of equity shares; and

- 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.

20. Related party transactions and transactions with the Manager

Fees payable during the period to the Directors are disclosed in note 6.

Mr Young, who is a Director of the Company, is employed by the Company's Investment Manager, abrdn Asia Limited, which is a wholly-owned subsidiary of abrdn plc. The Manager, abrdn Capital International Limited ("aCIL") is also a subsidiary of abrdn plc. Management, promotional activities and secretarial and administration services are provided by aCIL with details of transactions during the year and balances outstanding at the year end disclosed in notes 5 and 6.

Mr Clarke, who was a Director and Chairman of the Company until 31 December 2021, was, prior to his retirement, also Chairman of Thomas Dessain which was paid £11,000 during the year ended 31 December 2021 for services provided in relation to the recruitment search for Mr Kirkby.

21. Controlling party

In the opinion of the Directors on the basis of shareholdings advised to them, the Company has no immediate or ultimate controlling party.

22. Fair value hierarchy

IFRS 13 'Fair Value Measurement' requires an entity to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making measurements. The fair value hierarchy has the following levels:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2: inputs other than quoted prices included within Level 1 that are observable for the assets or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The financial assets and liabilities measured at fair value in the Balance Sheet are grouped into the fair value hierarchy as follows:

		Level 1	Level 2	Level 3	Total
At 31 December 2022	Note	£'000	£'000	£'000	£'000
Financial assets at fair value through profit or loss
Quoted equities	a)	444,727	-	-	444,727
Quoted bonds	b)	-	3,596	-	3,596
Net fair value		444,727	3,596	-	448,323

		Level 1	Level 2	Level 3	Total
At 31 December 2021	Note	£'000	£'000	£'000	£'000
Financial assets at fair value through profit or loss
Quoted equities	a)	493,609	-	-	493,609
Quoted bonds	b)	-	3,761	-	3,761
Net fair value		493,609	3,761	-	497,370

(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 bonds. The fair value of the Company's investments in quoted bonds has been determined by reference to their quoted bid prices at the reporting date. Investments in quoted bonds are not considered to trade in active markets and accordingly the Company's holding in quoted bonds as at 31 December 2022 has been classified as Level 2.

In October 2019 the Board of Directors took the decision to write down the value of G3 Exploration by 50% in light of interest payment default and concerns over ongoing trading. At this point the G3 Exploration bond was reclassified as Level 3. G3 Exploration appointed joint liquidators during December 2019. Using an adjusted net asset value model the Board of Directors decided to write down the value of G3 Exploration to £nil due to concerns over liquidity, credit worthiness, exit opportunities and the timing of any potential receipts. There has been no change in carrying value during the year under review or as at the date of this Report.

Fair value of financial assets. The Directors are of the opinion that the fair value of other financial assets is equal to the carrying amounts in the Balance Sheet.

Fair values of financial liabilities. The fair value of borrowings as at the 31 December 2022 has been estimated at £40,919,000 (carrying value per Balance Sheet - £40,967,000) which was calculated using a discounted cash flow valuation technique. At 31 December 2021 the fair value was £46,878,000 (carrying value per Balance Sheet - £46,753,000). Under the fair value hierarchy in accordance with IFRS 13, these borrowings can be classified as Level 2 due to the use of a discount rate as an observable input in the calculation of fair value.

23. Subsequent events

There have been no subsequent events to report on from the date of the year end until the date this Report was approved.

ALTERNATIVE PEROFRMANE MEASURES

Alternative performance measures 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 IFRS 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 discount is the amount by which the share price is lower than the net asset value per share, expressed as a percentage of the net asset value.

	2022	2021
NAV per Ordinary share (p) a	243.44	262.76
Share price (p) b	215.00	231.00
Discount (b-a)/a	-11.7%	-12.1%

Dividend cover

Dividend cover measures the revenue return per share divided by total dividends per share, expressed as a ratio.

	2022	2021
Revenue return per share a	10.23p	8.95p
Dividends per share b	10.00p	9.50p
Dividend cover a/b	1.02	0.94

Dividend yield

The annual dividend per Ordinary share divided by the share price, expressed as a percentage.

	2022	2021
Annual dividend per Ordinary share (p) a	10.00p	9.50p
Share price (p) b	215.00p	231.00p
Dividend yield (b-a)/a	4.7%	4.1%

Net gearing

Net gearing measures the total borrowings less cash and cash equivalents dividend by shareholders' funds, expressed as a percentage. Under AIC reporting guidance cash and cash equivalents includes amounts due to and from brokers at the year end as well as cash and cash equivalents.

		2022	2021
Borrowings (£'000)	a	40,967	46,753
Cash (£'000)	b	7,328	3,268
Amounts due to brokers (£'000)	c	-	-
Amounts due from brokers (£'000)	d	-	-
Shareholders' funds (£'000)	e	413,447	450,790
Net gearing	(a-b+c-d)/e	8.1%	9.6%

Ongoing charges

The ongoing charges ratio has been calculated in accordance with guidance issued by the AIC, to include the look-through costs of holding certain investment funds as well as the total of investment management fees and administrative expenses and expressed as a percentage of the average daily net asset values with debt at fair value published throughout the year.

	2022	2021
Investment management fees (£'000)	3,270	3,527
Administrative expenses (£'000)	939	862
Less: non-recurring charges^A (£'000)	(42)	(76)
Ongoing charges (£'000)	4,167	4,313
Average net assets (£'000)	421,170	446,994
Ongoing charges ratio (excluding look-through costs)	0.99%	0.96%
Look-through costs^B	0.02%	0.05%
Ongoing charges ratio (including look-through costs)	1.01%	1.01%

^A Professional services comprising advisory and legal fees considered unlikely to recur.

^B Calculated in accordance with AIC guidance issued in October 2020 to include the Company's share of costs of holdings in investment companies on a look- through basis.

The ongoing charges percentage provided in the Company's Key Information Document is calculated in line with the PRIIPs regulations which among other things, includes the cost of borrowings and transaction costs.

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. Share price and NAV total returns are monitored against open-ended and closed-ended competitors, and the Reference Index, respectively.

Year ended 31 December 2022		NAV	Share Price
Opening at 1 January 2022	a	262.76p	231.00p
Closing at 31 December 2022	b	243.44p	215.00p
Price movements	c=(b/a)-1	-7.4%	-6.9%
Dividend reinvestment^A	d	3.8%	4.2%
Total return	c+d	-3.6%	-2.7%

Year ended 31 December 2021		NAV	Share Price
Opening at 1 January 2021	a	245.40p	228.50p
Closing at 31 December 2021	b	262.76p	231.00p
Price movements	c=(b/a)-1	7.1%	1.1%
Dividend reinvestmentA	d	3.9%	4.1%
Total return	c+d	+11.0%	+5.2%

^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.

Additional Notes:

The Annual Financial Report Announcement is not the Company's statutory financial statements. The above results for the year ended 31 December 2022 are an abridged version of the Company's full financial statements, which have been approved and audited with an unqualified report. The 2021 and 2022 statutory financial statements received unqualified reports from the Company's Auditor and did not include any reference to matters to which the Auditor drew attention by way of emphasis without qualifying the reports. The financial information for 2021 is derived from the statutory financial statements for 2021 which have been lodged with the JFSC. The 2022 financial statements will be filed with the JFSC in due course.

The Annual Report will be posted to Shareholders in April and further copies may be obtained from the registered office, 1^st Floor, Sir Walter Raleigh House, 48 - 50 Esplanade, St Helier, Jersey JE2 3QB and on the Company's website* asian-income.co.uk.

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.

* 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.

abrdn Capital International Limited

Company Secretary

4 April 2023

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END

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STATEMENT OF COMPREHENSIVE INCOME

abrdn Capital International Limited

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Annual Financial Report

STATEMENT OF COMPREHENSIVE INCOME

abrdn Capital International Limited

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