Annual Financial Report

RNS Number : 5408R

Aberdeen Standard Asia Focus PLC

30 October 2019

 

ABERDEEN STANDARD ASIA FOCUS PLC

(formerly Aberdeen Asian Smaller Companies Investment Trust PLC)

Legal Entity Identifier (LEI):  5493000FBZP1J92OQY70

 

ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 31 JULY 2019

STRATEGIC REPORT - COMPANY SUMMARY AND FINANCIAL HIGHLIGHTS

Financial Highlights

Net asset value total return (diluted){AB}			MSCI AC Asia Pacific ex Japan Index total return{C}			MSCI AC Asia Pacific ex Japan Small Cap Index total return{C}
2019: +7.1%			2019: +5.7%			2019: -0.5%
2018: +4.6%			2018: +6.1%			2018: +6.6%
Share price total return{A}			Discount to net asset value{AB}			Ordinary dividend per share{D}
2019: +11.4%			2019: 11.6%			2019: 19.00p
2018: +0.4%			2018: 14.8%			2018: 17.00p
{A}      Alternative Performance Measure (see pages 13 and 73 of the printed Annual Report).
{B}      Presented on an undiluted basis as the Convertible Unsecured Loan Stock ("CULS") is "out of the money"
{C}      Currency adjusted, capital gains basis.
{D}            Dividends are subject to shareholder approval at the Annual General Meeting.

STRATEGIC REPORT - CHAIRMAN'S STATEMENT

Results

It was a volatile year for equities globally and Asia was no different. In this difficult environment, your Manager delivered pleasing performance with the Company's net asset value ("NAV") rising 7.1% in sterling terms. In comparison, the MSCI Asia Pacific ex-Japan Small Cap Index lost 0.5%. Meanwhile, the discount to NAV per share narrowed from 14.8% to 11.6% during the reporting period.

I am encouraged to see that the restructuring that your Company undertook last year has continued to prove rewarding, both in terms of performance and in the narrowing of the discount to NAV. The latter suggests that shareholders have embraced the change. Likewise, the decision to focus the portfolio on your Manager's highest conviction ideas and the continued commitment to a long-term, bottom-up investment strategy supported performance. This reaffirms my belief that the Company is well-positioned to deliver good relative returns, particularly in more challenging market conditions. The changes made to the portfolio and your Manager's focus on picking robust businesses to invest in should help maintain the Company's track record of delivering superior value to shareholders over the long term. Over the past three and five-years periods, the  Company's NAV rose 29.4% and 46.1%, respectively, equivalent to an annualised return of 8.9% and 7.9%.  Over the much longer term, Shareholders might be interested to know that if they had invested £1,000 into the Company at its launch, in 1995, this would have been worth approximately £16,840 (assuming all dividends were re-invested) at the end of July 2019.

As a reminder, your Manager embarked on a process to streamline the portfolio and trim the number of holdings to improve focus on the best ideas. To this end, your Manager exited several holdings, where the growth outlook was less appealing or valuations untenable. The proceeds were reinvested in existing holdings with better prospects or in new upstart companies, predominantly in the technology and industrial sectors, where disruptive new approaches are challenging traditional incumbents. Importantly, this has not come at the expense of your Manager's core principle of investing, at a reasonable valuation, in high-quality companies that can achieve scale and efficiency within their niche markets, while maintaining a strong balance sheet.

Overview

Asian small-cap equities fell during the year under review. It was a volatile period, with markets whipsawed by the recurring themes of monetary policy and trade. Towards the end of 2018, worsening US-China trade tensions and expectations of rising rates in the US sparked a broad sell-off. But optimism returned in early 2019. Faced with a weakening global economy, major central banks changed tack and loosened policy considerably. The Fed eventually delivered its first rate cut since 2008, while European policymakers signalled more stimulus. Several Asian economies also lowered rates while China pledged further economic support. As a result, expectations of 'lower rates for longer' returned. In politics, major elections in Australia, India, Indonesia and Thailand all saw incumbents prevail. The outcomes in India and Indonesia, in particular, bode well for structural reforms and your Manager is positive on the outlook for both markets. Across the region, Southeast Asia led gains given the greater vulnerability of North Asia - namely China, Korea & Taiwan - to slowing global trade.

Against this backdrop, your Company's focus on smaller companies proved beneficial. The underlying portfolio is positioned to capitalise on opportunities arising from growing consumer demand across the region. In addition, these companies' domestic focus insulates them, to some degree, from external shocks. In fact, the portfolio proved more resilient during the period than its large-cap counterparts despite ongoing trade tensions and currency fluctuations across the region. This is largely a result of the businesses we invest in possessing robust balance sheets, healthy cash flows and sustainable profit margins.

Dividend

As advised in previous years and subject to market conditions, it is your Company's aim to maintain or increase the Ordinary dividend so that shareholders can rely on a consistent stream of income. In 1998, when the Asian Crisis gripped much of Asia, the Company paid an Ordinary dividend of 0.11p and since that date it has maintained or increased the final dividend every year to the present level of 14.0p (together with the proposed special dividend 5.0p).

In the current year, we have seen continued strength in both the ordinary income and the income that we receive as special dividends.  In view of this, the Board is recommending a final dividend of 14.0p per share (2018 13.0p) and a special dividend of 5.0p per share (2018 4.0p) an increase of 11.8%. The payments will allow for a small surplus to be transferred to the brought forward revenue reserves which can be used in future years in the event of any temporary shortfalls in revenue. If approved by shareholders at the Annual General Meeting of the Company on 4 December 2019, both dividends will be paid on 11 December 2019 to shareholders on the register on 15 November 2019.

Gearing and Share Capital Management

The Company's year-end net gearing was 9.9%. The majority of the gearing is provided by the new CULS 2025 together with bank loans. The Company has a three year multicurrency revolving loan facility and a term loan facility, in an aggregate amount of US$25 million, with The Royal Bank of Scotland International Limited, London Branch. Under the term loan facility US$12.5 million has been drawn down and fixed for three years to June 2020 at an all-in rate of 2.506%. Under the revolving loan facility a further US$12.5 million is available for draw down.  At the year end US$25.0 million had been drawn down under the facilities and at the time of writing this level has been trimmed slightly to US$22.5m.

During the year the Company purchased for treasury 1,302,650 Ordinary shares at a discount to the prevailing NAV (exclusive of income). Subsequent to the period end a further 385,000 Ordinary shares have been purchased into treasury. Share buy backs can reduce the volatility of any discount as well as modestly enhancing the NAV for shareholders.

Annual General Meeting

The Annual General Meeting is scheduled to be held on 4 December 2019 at 11.30 a.m. In addition to the usual ordinary business, as special business the Board is seeking to renew the authority to issue new shares and sell treasury shares for cash at a premium without pre-emption rules applying and to renew the authority to buy back shares and either hold them in treasury for future resale (at a premium to the prevailing NAV per share) or cancel them.

The Board is happy to take general questions on the Annual Report and financial statements at the meeting but would advise that questions of a technical nature should be addressed in writing to the Company Secretary, in advance.  We look forward to seeing as many shareholders as possible and very much hope that any, who wish, will stay for lunch afterwards.

Directorate

As part of the previously advised process of succession planning the Board welcomed Charlotte Black and Deborah Guthrie as independent non-executive Directors of the Company with effect from the Annual General Meeting held on 16 January 2019.  Chris Maude retired from the Board on 31 March 2019 and I would like to reiterate our thanks to him for his very considerable input. Furthermore, Haruko Fukuda has indicated that she intends to retire as a Director on 31 March 2020.  Haruko joined the Board in 2003 and I would like to take this opportunity to thank her sincerely on behalf of the Board for her very significant contribution to the Company over that time.

Outlook

The outlook for Asian smaller companies is promising over the medium-term, even as markets are challenged by a slowdown in global growth. The trade dispute is intensifying and is no longer the purview of just China and the US; with rising tensions between Japan and Korea likely to erode consumer and corporate confidence in the region further. Unsurprisingly, we are seeing increasing action by governments and central banks to support growth through targeted stimulus and interest rate cuts. This should increase investor confidence in Asia, where central banks still have the capacity to loosen policy rates. In addition, most countries are already on a fiscal consolidation path and have healthy foreign-exchange reserves.

More broadly, the case for investing in Asian smaller companies remains compelling, with the portfolio's valuations towards the lower end of their historic range. The region has one of the highest growth rates globally and a wealth of financially responsible corporates. While exports remain a key driver, resilient domestic demand should support regional economies amid global trade tensions. The rise in consumer spending power, alongside a relatively young population, is supportive of this theme. Finally, despite all the noise, Asia's relevance as a technology hub continues to strengthen by the day, with the region likely to transform the dynamics of many industries for decades to come.

Nigel Cayzer

Chairman

29 October 2019

STRATEGIC REPORT - OVERVIEW OF STRATEGY

Business Model

The business of the Company is that of an investment company which seeks to qualify as an investment trust for UK capital gains tax purposes.

Investment Objective

The Company aims to maximise total return to shareholders over the long term from a portfolio made up predominantly of smaller quoted companies (with a market capitalisation of up to approximately US$1.5 billion at the time of investment which was raised to this level on 23 May 2018 from the previous ceiling of US$1bn) in the economies of Asia and Australasia, excluding Japan by following the investment policy described below. When it is in shareholders' interests to do so, the Company reserves the right to participate in the rights issue of an investee company notwithstanding that the market capitalisation of that investee may exceed the stated ceiling. The Directors do not envisage any change in this activity in the foreseeable future.

Investment Policy

The Company's assets may be invested in a diversified portfolio of securities (including equity shares, preference shares, convertible securities, warrants and other equity-related securities) predominantly in quoted smaller companies spread across a range of industries and economies in the investment region including Australia, Bangladesh, Cambodia, China, Hong Kong, India, Indonesia, Korea, Laos, Malaysia, Myanmar, New Zealand, Pakistan, The Philippines, Singapore, Sri Lanka, Taiwan, Thailand and Vietnam, together with such other economies in Asia as the Directors may from time to time determine, (collectively, the ''Investment Region''). Investments may also be made through collective investment schemes, in unquoted equities (up to 10% of the net assets of the Company, calculated at the time of investment) and in companies traded on stock markets outside the Investment Region provided that over 75% of their consolidated revenue, operating income or pre-tax profit is earned from trading in the Investment Region or they hold more than 75% of their consolidated net assets in the Investment Region. 

Risk Diversification

The Company does not invest more than 15% of its gross assets at the time of investment either in other listed investment companies (including listed investment trusts), or in the shares of any one company. The Manager is authorised to invest up to 15% of the Company's gross assets in any single stock.

Gearing

The Board is responsible for determining the gearing strategy for the Company. Gearing is used selectively to leverage the Company's portfolio in order to enhance returns where and to the extent this is considered appropriate to do so. Gearing is subject to a maximum gearing level of up to 25% of adjusted NAV at the time of draw down.

Delivering the Investment Policy

The Directors are responsible for determining the investment policy and the investment objective of the Company. Day to day management of the Company's assets has been delegated, via the AIFM, to the Investment Manager, ASI Asia. ASI Asia invests in a diversified range of companies throughout the Investment Region in accordance with the investment policy. ASI Asia follows a bottom-up investment process based on a disciplined evaluation of companies through direct visits by its fund managers. Stock selection is the major source of added value. No stock is bought without the fund managers having first met management. ASI Asia estimates a company's worth in two stages, quality then price. Quality is defined by reference to management, business focus, the balance sheet and corporate governance. Price is calculated by reference to key financial ratios, the market, the peer group and business prospects. Top-down investment factors are secondary in the ASI Asia's portfolio construction, with diversification rather than formal controls guiding stock and sector weights. Except for the maximum market capitalisation limit, little regard is paid to market capitalisation.

A detailed description of the investment process and risk controls employed by ASI Asia is disclosed on page 77 of the printed Annual Report.  A comprehensive analysis of the Company's portfolio is disclosed on pages 19 to 22 of the printed Annual Report including a description of the ten largest investments, the portfolio investments by value, sector/geographical analysis and currency/market performance. At the year end the Company's portfolio consisted of 66 holdings.

Comparative Indices

The Company does not have a benchmark. ASI Asia utilises two general regional indices, the MSCI AC Asia Pacific ex Japan Index (currency adjusted) and the MSCI AC Asia Pacific ex Japan Small Cap Index (currency adjusted), as well as peer group comparisons for Board reporting. It is likely that performance will diverge, possibly quite dramatically in either direction, from these or any other indices. ASI Asia seeks to minimise risk by using in depth research and does not see divergence from an index as risk.

Key Performance Indicators (KPIs)

The Board uses a number of financial performance measures to assess the Company's success in achieving its objective and to determine the progress of the Company in pursuing its investment policy.  The main KPIs identified by the Board in relation to the Company, which are considered at each Board meeting, are as follows:

KPI	Description
NAV Return (per share)	The Board considers the Company's NAV total return figures to be the best indicator of performance over time and is therefore the main indicator of performance used by the Board. The figures for this year and for the past 1, 3, 5,10 years and since inception are set out on page 13 of the printed Annual Report.
Performance against comparative indices	The Board also measures performance against a combination of two regional indices - the MSCI AC Asia Pacific ex Japan Index (currency adjusted) and the MSCI AC Asia Pacific ex Japan Small Cap Index (currency adjusted). Graphs showing performance are shown on pages 14 and 15 of the printed Annual Report.  At its regular Board meetings the Board also monitors share price performance relative to competitor investment trusts over a range of time periods, taking into consideration the differing investment policies and objectives employed by those companies.
Share price (on a total return basis)	The Board also monitors the price at which the Company's shares trade relative to the MSCI Asia Pacific ex Japan Index (sterling adjusted) on a total return basis over time. A graph showing the total NAV return and the share price performance against the comparative index is shown on page 14 of the printed Annual Report.
Discount/Premium to NAV	The discount/premium relative to the NAV per share represented by the share price is closely monitored by the Board. The objective is to avoid large fluctuations in the discount relative to similar investment companies investing in the region by the use of share buy backs subject to market conditions.  A graph showing the share price premium/(discount) relative to the NAV is also shown on page 14 of the printed Annual Report.
Dividend	The Board's aim is to maintain or increase the Ordinary dividend so that shareholders can rely on a consistent stream of income. Dividends paid over the past 10 years are set out on page 13 of the printed Annual Report.

Principal Risks and Uncertainties

There are a number of risks which, if realised, could have a material adverse effect on the Company and its financial condition, performance and prospects. The Board has carried out a robust assessment of these risks, 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 AIFM, both of which are 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 annual Audit Committee and a summary of the principal risks are set out below. In addition to these risks, the outcome and potential impact of the UK Government's Brexit discussions with the European Union are still unclear at the time of writing. Therefore economic risks remain, relating to the potential for significant resultant currency volatility and/or uncertainty relating to the Company's ability to reclaim withholding taxes paid in overseas jurisdictions.

Description	Mitigating Action
Investment strategy and objectives - the setting of an unattractive strategic proposition to the market and the failure to adapt to changes in investor demand may lead to the Company becoming unattractive to investors, a decreased demand for shares and a widening discount.	The Board keeps the level of discount at which the Company's shares trade as well as the investment objective and policy under review and in particular holds an annual strategy meeting where the Board reviews updates from the Investment Manager, investor relations reports and the Broker on the market. In particular, the Board is updated at each Board meeting on the make up of and any movements in the shareholder register.
Investment portfolio and investment management:  investing outside of the investment restrictions and guidelines set by the Board could result in poor performance and inability to meet the Company's objectives, as well as a weakening discount.	The Board sets, and monitors, its investment restrictions and guidelines, and receives regular board reports which include performance reporting on the implementation of the investment policy, the investment process and application of the guidelines. The Investment Manager is in attendance at all Board meetings. The Board also monitors the Company's share price relative to the NAV.
Financial obligations: the requirement for the Company to meet its financial obligations, or increasing the level of gearing, could result in the Company becoming over-geared or unable to take advantage of potential opportunities and result in a loss of value to the Company's shares. It could also result in the Company being unable to meet the interest repayments due on the CULS.	The Board sets a gearing limit and receives regular updates on the actual gearing levels the Company has reached from the Investment Manager together with the assets and liabilities of the Company and reviews these at each Board meeting. In addition, Aberdeen Standard Fund Managers Limited, as alternative investment fund manager, has set an overall leverage limit of 2x on a commitment basis (2.5x on a gross notional basis) and includes updates in its reports to the Board.
Financial and regulatory: the financial risks associated with the portfolio could result in losses to the Company. In addition, failure to comply with relevant regulation (including the Companies Act, the Financial Services and Markets Act, the Alternative Investment Fund Managers Directive, Accounting Standards and the listing rules, disclosure and prospectus rules) may have an impact on the Company.	The financial risks associated with the Company include market risk, liquidity risk and credit risk, all of which are mitigated by the Investment Manager. Further details of the steps taken to mitigate the financial risks associated with the portfolio are set out in note 18 to the financial statements. The Board relies upon the Standard Life Aberdeen Group to ensure the Company's compliance with applicable regulations and from time to time employs external advisers to advise on specific concerns.
Operational: the Company is dependent on third parties for the provision of all systems and services (in particular, those of Aberdeen Standard Investments) and any control failures and gaps in these systems and services could result in a loss or damage to the Company.	The Board receives reports from the Manager on internal controls and risk management at each board meeting. It receives assurances from all its significant service providers, as well as back to back assurances where activities are themselves sub-delegated to other third party providers with which the Company has no direct contractual relationship. Further details of the internal controls which are in place are set out in the Directors' Report on pages 33 and 34 of the printed Annual Report.
Investing in unlisted securities: the Company has the ability to invest in unlisted securities, although no such investments have been made to date.  Unquoted investments are long-term in nature and they may take a considerable period to be realised. Unquoted investments are less readily realisable than quoted securities. Such investments may therefore carry a higher degree of risk than quoted securities. In valuing investments the Company may rely to a significant extent on the accuracy of financial and other information provided to the Manager as well as the performance of listed peer multiples which may impact unquoted valuations negatively.	The Board recognises that investing in unlisted securities carries a higher risk/reward profile. Accordingly it seeks to mitigate this risk by limiting investment into such securities to 10% of the Company's net assets (calculated at the time of investment).
Market and F/X: insufficient oversight or controls over financial risks, including market risk, foreign currency risk, liquidity risk and credit risk could result in a loss to the Company	The Manager's risk department reviews investment risk and a review of credit worthiness of counterparties is undertaken by its Counterparty Credit Risk team.  The Company does not hedge foreign currency exposure but it may, from time to time, partially mitigate it by borrowing in foreign currencies.

Promoting the Company

The Board recognises the importance of promoting the Company to prospective investors both for improving liquidity and enhancing the value and rating of the Company's shares.  The Board believes an effective way to achieve this is through subscription to and participation in the promotional programme run by the Manager on behalf of a number of investment trusts under its management. The Company's financial contribution to the programme is matched by the Manager.  The Manager reports quarterly to the Board giving analysis of the promotional activities as well as updates on the shareholder register and any changes in the make up of that register.

The purpose of the programme is both to communicate effectively with existing shareholders and to gain new shareholders with the aim of improving liquidity and enhancing the value and rating of the Company's shares. Communicating the long-term attractions of your Company is key and therefore the Company also supports the Manager's investor relations programme which involves regional roadshows, promotional and public relations campaigns. 

Board Diversity

The Board recognises the importance of having a range of skilled, experienced individuals with the right knowledge represented on the Board in order to allow the Board to fulfil its obligations. The Board also recognises the benefits and is supportive of the principle of diversity in its recruitment of new Board members.  The Board will not display any bias for age, gender, race, sexual orientation, religion, ethnic or national origins, or disability in considering the appointment of its Directors.  However, the Board will continue to ensure that all appointments are made on the basis of merit against the specification prepared for each appointment and, therefore, the Company does not consider it appropriate to set diversity targets.  At 31 July 2019, there were four male Directors and three female Directors on the Board.

Environmental, Social and Governance (ESG)

ESG Investment

Whilst the management of the Company's investments is not undertaken with any specific instructions to exclude certain asset types or classes, the Manager embeds ESG into research of each asset class as part of the investment process.

The primary goal is to generate the best long-term outcomes for the Company in order to fulfil the fiduciary responsibilities to the Company. The Manager sees ESG factors as being financially material and impacting corporate performance. ESG factors put the 'long-term' in long-term investing. The Manager focuses on understanding the ESG risks and opportunities of investments alongside other financial metrics to make better investment decisions. The Manager aims for better risk-adjusted returns by actively undertaking informed and constructive engagement and asset management to generate better performance from the investments. This helps to enhance the value of shareholders' assets.  Furthermore the Manager engages, manages and votes for either insight or influence. Comprehensive assessment of ESG factors, combined with constructive company engagement, should lead to better shareholder outcomes.

Environmental, Social and Human Rights Issues

The Company has no employees as the Board has delegated day to day management and administrative functions to Aberdeen Standard Fund Managers Limited. There are therefore no disclosures to be made in respect of employees. The Company's socially responsible investment policy is outlined above.

Due to the nature of the Company's business, being a company that does not offer goods and services to customers, the Board considers that it is not within the scope of the Modern Slavery Act 2015 because it has no turnover. The Company is therefore not required to make a slavery and human trafficking statement. In any event, the Board considers the Company's supply chains, dealing predominantly with professional advisers and service providers in the financial services industry, to be low risk in relation to this matter.

The Company has no greenhouse gas emissions to report from the operations of its business, nor does it have responsibility for any other emissions producing sources under the Companies Act 2006 (Strategic Report and Directors' Reports) Regulations 2013.

Viability Statement

The Company does not have a formal fixed period strategic plan but the Board formally considers risks and strategy at least annually. The Board considers the Company, with no fixed life, to be a long term investment vehicle, but for the purposes of this viability statement has decided that a period of three years is an appropriate period over which to report. The Board considers that this period reflects a balance between looking out over a long term horizon and the inherent uncertainties of looking out further than three years.

In assessing the viability of the Company over the review period the Directors have conducted a robust review of the principal risks focussing upon the following factors:

-   The principal risks detailed in the Strategic Report;

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

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

-   The level of income generated by the Company;

-   The level of gearing and requirement to re-finance or repay existing facilities in 2020;

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

-   The flexibility of the Company's bank facilities.

Accordingly, taking into account the Company's current position, the fact that the Company's investments are mostly liquid and the potential impact of its principal risks and uncertainties, the Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due for a period of three years from the date of this Report. In making this assessment, the Board has considered that matters such as significant economic or stock market volatility, a substantial reduction in the liquidity of the portfolio or changes in investor sentiment could have an impact on its assessment of the Company's prospects and viability in the future.

Future

The Board's view on the general outlook for the Company can be found in my Chairman's Statement on page 5 of the printed Annual Report whilst the Investment Manager's views on the outlook for the portfolio are included on pages 16 and 17 of the printed Annual Report.

Nigel Cayzer

Chairman

29 October 2019

STRATEGIC REPORT - INVESTMENT MANAGER'S REVIEW

Overview

The year under review has felt like a long and trying period for global financial markets, with a dizzying dose of political shocks. Against this challenging backdrop, we are pleased with the portfolio's performance. Your Company's NAV rose by 7.1% in the 12 months to July, compared to a marginal decline of 0.5% in the MSCI Asia Pacific ex Japan Small Cap index. This has further enhanced the Trust's outperformance over longer periods.

The positive result reaffirms our conviction in our investment process and in the importance of staying true to our bottom-up approach to stock-picking. Our preferred investment style of quality and value returned to favour during the year, as investors sought refuge in better-quality stocks amid heightening market volatility.  But just as patience and discipline is crucial during bouts of underperformance, the pick-up in relative performance is no cause for complacency. Our goal, as always, is to deliver satisfactory and sustainable returns over the long run. Hence, we are not standing still, but are constantly seeking to improve our investment and idea generation processes to enable us to identify new opportunities and thrive in a fast-changing landscape. As referenced in the Chairman's Statement, one important tweak to our approach has been the decision to build a more streamlined portfolio. This bore fruit as several of the Company's highest-conviction positions were major drivers of performance.

Portfolio Review and Activity

It was a tumultuous year for Asian equities. Notably, the push and pull of global monetary policy and trade relations held sway over all stock markets. Volatile currencies and oil prices further dampened the overall mood. The ongoing trade conflict compounded persistent worries about China's economic health. This dragged on mainland stocks, along with those in Hong Kong and Korea. India was also weak due to stress in the financial sector, though a market rally after Prime Minister Narendra Modi's re-election win limited losses.

The portfolio's heavier bias towards Southeast Asia was rewarding as several longstanding holdings in these markets made meaningful contributions. In Thailand, shares of financial-services companies, Aeon Thana Sinsap and Tisco Financial, both rose by over 60%. Aeon Thana's results continued to impress, while Tisco expanded after it bought the local retail-banking operations of Standard Chartered and continued to report low provision charges for bad debts. Another standout performer was Philippine port operator Asian Terminals, which gained on higher cargo volumes handled through its ports.

Encouragingly, these top-performing names represent some of the Trust's largest positions. This underscores our belief in the importance of constructing a concentrated portfolio comprised of high-conviction investments. In this regard, we are required to constantly evaluate existing and prospective holdings to gauge whether their investment case still holds up. We do this through rigorous first-hand research, along with extensive engagement with the companies' management.

As such, our efforts to refresh the portfolio continued apace over the financial year. In line with the commitment to sharpen focus and improve shareholder value, we sold some 20 names. Among the notable exits were Indonesian cement company Solusi Bangun (formerly Holcim Indonesia) and its Malaysian peer, Tasek. Both companies became targets of takeovers. We accepted the offer from Solusi Bangun's parent and sold Tasek after its share price bounced. We divested stakes in holdings that we felt faced a tougher outlook for growth or earnings. Examples of these include Sri Lankan lender Commercial Bank of Ceylon and Thai Coca-Cola bottler Haad Thip. Elsewhere, we disposed of lower-conviction stocks, such as Concepcion Industrial in the Philippines, Malaysian plantation group United Malacca, Singapore's Riverstone Holdings and Indian gas distributor Gujarat Gas.

Even as we narrowed the number of holdings, we kept an eye out for new opportunities. What we typically look for are businesses with robust financials, clear competitive advantages and appealing growth prospects. One of the new names was Korea's Park Systems. It is the leading developer of atomic force microscopes, a nascent technology that could have broad industrial application in sectors such as chip-making and biotechnology. The company's financials are sound, despite significant upfront sales and distribution costs, which in our view provides a solid base for earnings to grow when orders start to roll in.

Another initiation was Indian property developer Prestige Estates. We have historically avoided the Indian real estate sector, but our views have since evolved. Recent regulatory reforms are likely to encourage industry consolidation and we expect this to benefit firms such as Prestige, given its healthy balance sheet and asset base. The Bangalore-based company has a good reputation and solid execution capabilities. While the bulk of its projects are in residential, it has also built up a decent property investment portfolio.

In our search for potential stock ideas, we cast a wide net that encompasses non-traditional markets and companies. One such market is Vietnam, where structural trends of increasing urbanisation and income levels are becoming central in driving growth. We have spent a lot of time over the years gaining comfort with Vietnam, and recognise its growing importance in global supply chains as well as the positive direction of the government to open up capital markets. As a result, we finally dipped our toes and introduced two Vietnamese names that met our quality and value criteria. The first was FPT Corporation, a globally-competitive software outsourcing group with a growing list of multinational clients. It also owns a mobile telecoms unit, an education business and stakes in other businesses such as electronics' retailing. Management is highly professional, the stock's valuation compelling and the growth prospects for all the group's distinct businesses pretty promising. The other addition was Nam Long, a reputable developer in Ho Chi Minh City focused on the affordable housing segment. It has a decent land bank and a robust pipeline of projects. Its partnerships with well-known Japanese developers and the backing of Singapore's Keppel Group are also reassuring from a governance perspective.

Outlook

How will stocks in Asia move over the rest of the year? In our view, the environment remains difficult, and markets will likely be afflicted by bouts of volatility in the near term. An end to the US-China trade spat seems as elusive as ever, while slowing growth continues to cast doubt over the outlook for commodities and some regional economies. Political risks remain high, as evidenced by the ongoing protests in Hong Kong.  How central banks and governments respond to these developments will also drive equity markets. But while some may rush for the exits, we are confident that the Trust remains well-positioned under any environment, given the quality of the underlying portfolio's holdings. Their strong balance sheets and domestic orientation give them the wherewithal to face the present uncertainty. Most management teams we back have also been here before and their experience is invaluable in helping them to position their businesses to prosper when the cycle turns.

It is also worth remembering that market swings present excellent buying opportunities. Many smaller businesses today are nimble and innovative, operating in interesting niche areas and filling gaps left by their larger peers. Their prospects are underpinned by ongoing structural shifts, including a burgeoning consumer class and increasing adoption of disruptive technologies. With an ever-growing pool of quality companies, picking the best ones remains crucial. By sticking to our tried-and-trusted principles, we remain optimistic that we can continue to find these hidden gems that will become long-term winners in their respective industries for years to come.

Hugh Young

Aberdeen Standard Investments (Asia) Limited

Investment Manager

29 October 2019

STRATEGIC REPORT - RESULTS

FINANCIAL HIGHLIGHTS

	31 July 2019	31 July 2018	% change
Total assets (see definition on page 86 of the printed Annual Report)	£496,916,000	£486,044,000	+2.2
Total equity shareholders' funds (net assets)	£441,010,000	£433,706,000	+1.7
Net asset value per share (basic)	1,300.56p	1,231.83p	+5.6
Share price (mid market)	1,150.00p	1,050.00p	+9.5
Market capitalisation	£389,958,000	£369,687,000	+5.5
Discount to net asset value (basic){A}	11.6%	14.8%
MSCI AC Asia Pacific ex Japan Index (currency adjusted, capital gains basis)	793.25	774.03	+2.5
MSCI AC Asia Pacific ex Japan Small Cap Index (currency adjusted, capital gains basis)	1,479.09	1,530.15	-3.3
Net gearing{A}	9.9%	9.5%
Dividends and earnings
Total return per share (basic){B}	78.18p	36.78p
Revenue return per share (basic)	21.64p	19.27p	+12.3
Dividends per share{C}	19.00p	17.00p	+11.8
Dividend cover{A}	1.14	1.13	+0.5
Revenue reserves{D}	£15,550,000	£13,962,000	+11.4
Operating costs
Ongoing charges ratio{A}	1.16%	1.22%
{A}      Considered to be an Alternative Performance Measure. See pages 73 and 74 of the printed Annual Report.
{B}      Measures the total earnings for the year divided by the weighted average number of Ordinary shares in issue (see note 9).
{C}      The figures for dividends per share reflect the dividends for the year in which they were earned.
{D}      Prior to payment of final and special dividends.

PERFORMANCE (TOTAL RETURN)

	1 year	3 year	5 year	10 year	Since
	% return	% return	% return	% return	inception
Share price{A}	+11.4	+29.9	+31.2	+346.2	+1684.7
Net asset value per Ordinary share - diluted{AB}	+7.1	+29.4	+46.1	+322.3	+1743.2
MSCI AC Asia Pacific ex Japan Index (currency adjusted)	+5.7	+41.0	+63.8	+164.0	+405.1
MSCI AC Asia Pacific ex Japan Small Cap Index (currency adjusted)	-0.5	+21.3	+43.3	+122.3	n/a
{A} Considered to be an Alternative Performance Measure (see page 73 of the printed Annual Report for more information).
{B} 1 year return calculated on an undiluted basis as CULS is "out of the money". All other returns are calculated on a diluted basis.
Source: Standard Life Aberdeen plc, Morningstar, Lipper & MSC

DIVIDENDS

	Rate	xd date	Record date	Payment date
Proposed final 2019	14.00p	14 November 2019	15 November 2019	11 December 2019
Proposed special 2019	5.00p	14 November 2019	15 November 2019	11 December 2019
	______
	19.00p
	______
Final 2018	13.00p	20 December 2018	21 December 2018	22 January 2019
Special 2018	4.00p	20 December 2018	21 December 2018	22 January 2019
	______
	17.00p
	______

Ten Year Financial Record

Year to 31 July	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019
Total revenue (£'000)	6,103	8,380	9,168	11,512	11,427	14,746	10,992	13,896	14,673	14,632
Per share (p)
Net revenue return	12.85	15.42	13.18	13.84	11.43	18.21	9.22	19.31	19.27	21.64
Total return	236.82	137.91	68.56	275.43	(31.46)	(50.13)	165.38	172.29	36.78	78.18
Net ordinary dividends paid/proposed	8.20	9.50	9.50	10.00	10.00	10.50	10.50	12.00	13.00	14.00
Net special dividends paid/proposed	1.90	2.80	3.00	3.00	3.00	4.50	-	4.00	4.00	5.00
	____	____	____	____	____	____	____	_____	_____	____
Net asset value per share (p)
Basic	619.37	686.39	746.55	1013.82	968.89	906.16	1068.92	1235.45	1231.83	1300.56
Diluted	562.57	n/a	n/a	992.81	952.52	896.31	1042.99	1,192.49	n/a	n/a
	____	____	____	____	____	____	____	_____	_____	____
Shareholders' funds (£'000)	192,851	239,965	260,994	382,932	369,118	343,967	383,735	430,105	433,706	441,010
	____	____	____	____	____	____	____	_____	_____	____

INVESTMENT PORTFOLIO

As at 31 July 2019

Investment Portfolio - Ten Largest Investments

			Valuation	Total	Valuation
			2019	assets	2018
Company	Industry	Country	£'000	%	£'000
Bank OCBC NISP
Indonesian subsidiary of Singapore-based OCBC Bank.	Banks	Indonesia	19,243	3.9	13,335
John Keells Holdings
A blue-chip conglomerate with major segments in hotels, consumer, transportation and financial services.	Industrial Conglomerates	Sri Lanka	15,825	3.2	5,641
Asian Terminals
One of the Philippines' main port operators. It manages and operates Port of Manila South Harbour Container Terminal, Port of Batangas, Port of General Santos and the Inland Clearance Depot yard in Calamba, Laguna.	Transportation Infrastructure	Philippines	14,970	3.0	9,772
Millennium & Copthorne Hotels New Zealand{A}
Owns and operates a chain of hotels across New Zealand and also active in property development there. It is majority owned by London-listed Millennium & Copthorne Hotels.	Hotels, Restaurants & Leisure	New Zealand	14,077	2.8	14,860
Oriental Holdings
The Malaysia-based conglomerate operates in Malaysia, Indonesia and Singapore, with diverse interests spanning plantations, automobiles, property and healthcare.	Automobiles	Malaysia	13,184	2.7	4,265
Cebu Holdings
A Filipino  real-estate company with a decent land bank in Cebu.	Real Estate Management & Development	Philippines	13,179	2.7	10,664
AEON Credit Service (M)
A subsidiary of Aeon Credit Japan that provides shariah-compliant consumer financial services in Malaysia.	Consumer Finance	Malaysia	12,998	2.6	13,985
Hana Microelectronics (Foreign)
Thai company with diversified product lines in IC packaging and microelectronics, proven management ability to manage through cycles, debt-free balance sheet and strong cash flow.	Electronic Equipment, Instruments & Components	Thailand	12,697	2.6	15,616
Convenience Retail Asia
A retailer that operates convenience stores and bakeries in Hong Kong.	Food & Staples Retailing	Hong Kong	12,653	2.5	6,744
Tisco Financial Group (Foreign)
A diversified financial-services provider in Thailand that specialises in auto hire-purchase lending. It is also a prominent securities broker and asset manager.	Banks	Thailand	12,252	2.5	10,333
Top ten investments			141,078	28.5
{A}        Holding includes investment in both common and preference lines.

Investment Portfolio - Other Investments

			Valuation	Total	Valuation
			2019	assets	2018
Company	Industry	Country	£'000	%	£'000
AEON Thana Sinsap Thailand (Foreign)	Consumer Finance	Thailand	11,684	2.4	13,271
M.P. Evans Group	Food Products	United Kingdom	11,576	2.3	12,742
Ultrajaya Milk Industry & Trading	Food Products	Indonesia	11,519	2.3	7,011
Bukit Sembawang Estates	Real Estate Management & Development	Singapore	11,436	2.3	12,209
Sanofi India	Pharmaceuticals	India	11,344	2.3	10,426
First Sponsor Group	Real Estate Management & Development	China	11,092	2.2	11,752
Mega Lifesciences (Foreign)	Pharmaceuticals	Thailand	11,027	2.2	5,113
Eastern Water Resources Development and Management (Foreign)	Water Utilities	Thailand	10,608	2.1	7,514
Thai Stanley Electric (Foreign)	Auto Components	Thailand	10,305	2.1	11,250
City Union Bank	Banks	India	9,978	2.0	9,730
Top twenty investments			251,647	50.7
Aegis Logistics	Oil, Gas & Consumable Fuels	India	9,916	2.0	5,299
Shangri-La Hotels Malaysia	Hotels, Restaurants & Leisure	Malaysia	9,893	2.0	10,481
Kansai Nerolac Paints	Chemicals	India	9,891	2.0	10,354
Godrej Agrovet	Food Products	India	9,364	1.9	-
AEM Holdings	Semiconductors & Semiconductor Equipment	Singapore	9,237	1.9	2,282
Dah Sing Financial Holdings	Banks	Hong Kong	9,143	1.8	12,003
Douzone Bizon Co	Software	South Korea	9,058	1.8	-
Precision Tsugami China Corporation	Machinery	China	8,465	1.7	-
Yoma Strategic Holdings	Real Estate Management & Development	Myanmar	8,140	1.6	7,851
United International Enterprises	Food Products	Denmark	8,083	1.6	9,104
Top thirty investments			342,837	69.0
Lemon Tree Hotels	Hotels, Restaurants & Leisure	India	7,957	1.6	8,077
Sporton International	Professional Services	Taiwan	7,504	1.5	3,562
Momo.Com	Internet & Direct Marketing Retail	Taiwan	7,156	1.4	-
United Plantations	Food Products	Malaysia	6,923	1.4	6,849
SBS Transit	Road & Rail	Singapore	6,687	1.3	3,697
AKR Corporindo	Trading Companies & Distributors	Indonesia	6,570	1.3	-
AEON Credit Service (Asia)	Consumer Finance	Hong Kong	6,561	1.3	5,991
AEON Co (M)	Multiline Retail	Malaysia	6,444	1.3	8,142
Pacific Basin Shipping	Marine	Hong Kong	6,409	1.3	8,685
Straits Trading Company	Metals & Mining	Singapore	6,195	1.3	5,125
Top forty investments			411,243	82.7
Public Financial Holdings	Banks	Hong Kong	5,885	1.2	5,585
ARB Corporation	Auto Components	Australia	5,699	1.1	8,323
FPT Corporation	Electronic Equipment, Instruments & Components	Vietnam	5,344	1.1	-
Nam Long Invst Corporation	Real Estate Management & Development	Vietnam	5,272	1.1	-
Ramco Cements	Construction Materials	India	4,930	1.0	12,564
Sunonwealth Electric Machinery Industry	Machinery	Taiwan	4,781	1.0	4,195
Park Systems Corporation	Electronic Equipment, Instruments & Components	South Korea	4,644	0.9	-
Citadel Group	IT Services	Australia	4,238	0.9	-
Cyient	Software	India	3,669	0.7	-
Giordano International	Specialty Retail	Hong Kong	3,352	0.7	5,171
Top fifty investments			459,057	92.4
Kingmaker Footwear Holdings	Textiles, Apparel & Luxury Goods	Hong Kong	3,228	0.6	6,413
NZX	Capital Markets	New Zealand	2,922	0.6	2,405
Prestige Estates Projects	Real Estate Management & Development	India	2,535	0.5	-
Asia Satellite Telecommunications Holdings	Diversified Telecommunication Services	Hong Kong	2,449	0.5	1,138
Thaire Life Assurance (Foreign)	Insurance	Thailand	2,416	0.5	4,333
DFCC Bank	Banks	Sri Lanka	2,359	0.5	1,883
Manulife Holdings	Insurance	Malaysia	2,327	0.5	2,205
AEON Stores Hong Kong	Multiline Retail	Hong Kong	1,951	0.4	3,165
Goodyear Thailand (Foreign)	Auto Components	Thailand	1,950	0.4	1,954
ORIX Leasing Pakistan	Consumer Finance	Pakistan	980	0.2	1,871
Top sixty investments			482,174	97.1
YHN Property	Real Estate Management & Development	Malaysia	679	0.1	2,618
CDL Investments New Zealand	Real Estate Management & Development	New Zealand	621	0.1	745
G3 Exploration	Oil, Gas & Consumable Fuels	China	462	0.1	493
Wintermar Offshore Marine	Energy Equipment & Services	Indonesia	430	0.1	674
Aitken Spence & Co	Industrial Conglomerates	Sri Lanka	176	0.0	794
Mustika Ratu	Personal Products	Indonesia	167	0.0	181
Total investments			484,709	97.5
Net current assets (before deducting prior charges){B}			12,207	2.5
Total assets{B}			496,916	100.0
{B} See definition on page 86 of the printed Annual Report.
All investments are in equities unless otherwise stated.

DIRECTORS' REPORT EXTRACTS

The Directors present their Report and the audited financial statements for the year ended 31 July 2019.

On 9 November 2018 Aberdeen Asian Smaller Companies Investment Trust PLC changed its name to Aberdeen Standard Asia Focus PLC by way of a Directors' resolution passed in accordance with the Articles of Association of the Company.

Results and Dividends

Details of the Company's results and proposed dividends are shown on pages 12 and 13 of the printed Annual Report.

Investment Trust Status

The Company (registered in England & Wales No. 03106339) has been accepted by HM Revenue & Customs as an investment trust subject to the Company continuing to meet the relevant eligibility conditions of Section 1158 of the Corporation Tax Act 2010 and the ongoing requirements of Part 2 Chapter 3 Statutory Instrument 2011/2999 for all financial years commencing on or after 1 August 2012.  The Directors are of the opinion that the Company has conducted its affairs for the year ended 31 July 2019 so as to enable it to comply with the ongoing requirements for investment trust status.

Individual Savings Accounts

The Company has conducted its affairs so as to satisfy the requirements as a qualifying security for Individual Savings Accounts. The Directors intend that the Company will continue to conduct its affairs in this manner.

Capital Structure, Buybacks and Issuance

The Company's capital structure is summarised in note 14 to the financial statements.  At 31 July 2019, there were 33,909,349 fully paid Ordinary shares of 25p each (2018 -35,208,272 Ordinary shares) in issue with a further 7,809,662 Ordinary shares of 25p held in treasury (2018 - 6,507,012 treasury shares). During the year 1,302,650 Ordinary shares were purchased in the market for treasury (2018 - 2,137,138).  Subsequent to the period a further 385,000 Ordinary shares have been purchased in the market for treasury.  During the period and up to the date of this report no new Ordinary shares were issued for cash at a premium to the prevailing NAV per share and no shares were sold from treasury.

On 14 December 2018, 34,482 units of Convertible Unsecured Loan Stock 2025 were converted into 2,348 new Ordinary shares.  On 14 June 2019 20,286 units of Convertible Unsecured Loan Stock 2025 were converted into 1,379 new Ordinary shares.  In accordance with the terms of the CULS Issue, the conversion price of the CULS for both conversions was determined at 1465.0 pence nominal of CULS for one Ordinary share.

Voting Rights

Ordinary shareholders are entitled to vote on all resolutions which are proposed at general meetings of the Company. The Ordinary shares carry a right to receive dividends. On a winding up, after meeting the liabilities of the Company, the surplus assets will be paid to Ordinary shareholders in proportion to their shareholdings.

CULS holders have the right to attend but not vote at general meetings of the Company. A separate resolution of CULS holders would be required to be passed before any modification or compromise of the rights attaching to the CULS can be made.

Borrowings

The Company has a three year multicurrency revolving loan facility and a term loan facility in an aggregate amount of US$25 million with The Royal Bank of Scotland International Limited, London Branch. Under the term loan facility US$12.5 million has been drawn down and fixed for three years to June 2020 at an all-in rate of 2.506%. Under the revolving loan facility a further $12.5 million has been drawn down and at the year end US$25.0 million had been drawn down under the facilities.

Management Agreement

The Company has appointed Aberdeen Standard Fund Managers Limited ("ASFML"), a wholly owned subsidiary of Standard Life Aberdeen plc, as its alternative investment fund manager. ASFML has been appointed to provide investment management, risk management, administration and company secretarial services and promotional activities to the Company. The Company's portfolio is managed by Aberdeen Standard Investments (Asia) Limited ("ASI Asia") which changed its name from Aberdeen Asset Management Asia Limited on 3 September 2018, by way of a group delegation agreement in place between ASFML and ASI Asia. In addition, ASFML has sub-delegated administrative and secretarial services to Aberdeen Asset Management PLC and promotional activities to Aberdeen Asset Managers Limited ("AAML"). 

Old Management Fee to 31 October 2018

Up to 31 October 2018 an investment management fee was payable monthly in arrears based on an annual amount of 1.0% calculated on the average net asset value of the Company over a 24 month period, valued monthly. The fee was calculated by reference to the value of the Company's net assets (gross assets less liabilities excluding the amount of any loan facilities or overdraft facilities drawn down). Details of the management fees and fees payable for promotional activities are shown in notes 4 and 5 to the financial statements.

New Management Fee from 1 November 2018

With effect from 1 November 2018, a new fee arrangement has been agreed with the Manager. The new fee continues to be payable monthly in arrears but at the rate of 0.08% of the Market Cap (as defined below) per calendar month, exclusive of Value Added Tax where applicable. "Market Cap" for the above is defined as the market capitalisation of the Company, based on the closing Ordinary share price quoted on the London Stock Exchange multiplied by the Ordinary shares in issue (less the number of any Ordinary shares held in Treasury), as determined on the last business day of the applicable calendar month to which the remuneration relates.

The management agreement may be terminated by either the Company or the Manager on the expiry of twelve months' written notice. On termination, the Manager would be entitled to receive fees which would otherwise have been due to that date. 

The introduction of the new management fee constituted a smaller related party transaction for the purpose of LR 11.1.10R of the Financial Conduct Authority's Listing Rules.

The Management Engagement Committee reviews the terms of the management agreement on a regular basis and have confirmed that, due to the long-term relative performance, investment skills, experience and commitment of the investment management team, in their opinion the continuing appointment of ASFML and ASI Asia is in the interests of shareholders as a whole.

Political and Charitable Donations

The Company does not make political donations (2018 - nil) and has not made any charitable donations during the year (2018 - nil).

Risk Management

Details of the financial risk management policies and objectives relative to the use of financial instruments by the Company are set out in note 18 to the financial statements.

The Board

The current Directors, N K Cayzer, Randal Dunluce (Viscount Dunluce), M J Gilbert (alternate H Young), P Yea, C Black, D Guthrie and H Fukuda, together with C S Maude who retired on 31 March 2019, were the only Directors who served during the year. Mr Cayzer and Ms Fukuda have both served on the Board for more than nine years and, in accordance with corporate governance best practice, will retire at the Annual General Meeting ("AGM") on 4 December 2019 and, being eligible, offer themselves for re-election.  Mr Gilbert has served on the Board for more than nine years and is also deemed not to be independent as he is a representative of the Manager, and therefore, in accordance with corporate governance best practice, Mr Gilbert will also retire at the AGM on 4 December 2019 and, being eligible, offers himself for re-election. In accordance with the Articles of Association Viscount Dunluce will retire from the Board by rotation and, being eligible, seek re-election at the AGM on 4 December 2019.  Ms Black and Ms Guthrie who were both appointed to the Board on 16 January 2019 will retire from the Board and, being eligible, seek election at the AGM on 4 December 2019.  Ms Fukuda has indicated that she intends to retire as a Director of the Company with effect from 31 March 2020.

The Board considers that there is a balance of skills and experience within the Board relevant to the leadership and direction of the Company and that all the Directors contribute effectively.

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

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, as required by the Listing Rules of the UK Listing Authority, has applied the principles identified in the UK Corporate Governance Code (published in April 2016). The UK Corporate Governance Code is available on the Financial Reporting Council's website: frc.org.uk.

The Board has considered the principles and recommendations of the AIC Code of Corporate Governance (AIC Code) by reference to the AIC Corporate Governance Guide for Investment Companies (AIC Guide). The AIC Code, as explained by the AIC Guide, addresses all the principles set out in the UK Corporate Governance Code, as well as setting out additional principles and recommendations on issues which are of specific relevance to the Company. Both the AIC Code and the AIC Guide are available on the AIC's website: theaic.co.uk.

The Company has complied throughout the accounting period with the relevant provisions contained within the AIC Code and the relevant provisions of the UK Corporate Governance Code except as set out below.

The UK Corporate Governance Code includes provisions relating to:

-   the role of the chief executive (A.1.2);

-   executive directors' remuneration (D.2.1 and D.2.2);

-   senior independent director (A.1.2); and

-   and the need for an internal audit function (C.3.6).

For the reasons set out in the AIC Code, and as explained in the UK Corporate Governance Code, 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. The full text of the Company's Corporate Governance Statement can be found on the Company's website: asia-focus.co.uk.

During the year ended 31 July 2019, the Board had five scheduled meetings. In addition, the Audit Committee met twice and the Management Engagement Committee met once. Between meetings the Board maintains regular contact with the Manager. Directors have attended the following scheduled Board meetings and Committee meetings during the year ended 31 July 2019 (with their eligibility to attend the relevant meeting in brackets):

Director	Board	Audit Com.	Nomination Com.	Management Engagement Com.
N CayzerA	5 (5)	n/a	1 (1)	n/a
C Black E	3 (3)	1 (1)	n/a	n/a
Viscount Dunluce	4 (5)	2 (2)	1 (1)	1 (1)
H FukudaA	5 (5)	2 (2)	1 (1)	1 (1)
M GilbertABC	5 (5)	n/a	n/a	n/a
D Guthrie E	3 (3)	1 (1)	n/a	n/a
P Yea	3 (3)	2 (2)	1 (1)	1 (1)
C MaudeD	3 (3)	2 (2)	1 (1)	1 (1)

^A Mr Cayzer, Mr Gilbert and Ms Fukuda are not members of the Audit Committee.

^B Including attendance by Mr Young as Alternate Director to Mr Gilbert.

^C Mr Gilbert is not a member of the Nomination Committee

^D Mr Maude retired from the Board on 31 March 2019

^E Ms Guthrie and Ms Black were both appointed to the Board on 16 January 2019

Policy on Tenure

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

The Board has noted that shareholder proxies representing 27.5% of the issued capital voted against the annual re-election of Mr Gilbert at the AGM held on 16 January 2019. The Board continues to support the democratic process which saw substantial support from the shareholders with proxies representing 72.5% having voted in favour of Mr Gilbert's re-election to the Board.  Furthermore, on the day of the meeting the 50 or so shareholders in attendance at the AGM voted unanimously in favour of Mr Gilbert's re-election, on a show of hands.  The Board notes that management representation on Boards is seen by some shareholders as a negative due to concerns over conflicts of interest and perceived 'overboarding'.  However, the Board has confirmed that it has a rigorous procedure in place to ensure that only independent Directors are permitted to be present when any matters relating to the Manager are discussed and this process is enforced strictly. The Board notes that some shareholders may perceive that Mr Gilbert, as chairman of Aberdeen Standard Investments, does not have time to dedicate to the Company.  The attendance table contained within the Annual Report shows that this is not the case with Mr Gilbert, or his Alternate Mr Young, having attended all of the five scheduled Board meetings in the year to 31 July 2019.  Mr Gilbert has recently announced that he will not seek re-election to the board of Standard Life Aberdeen plc at its Annual General Meeting, scheduled for 12 May 2020, and that he will retire from Standard Life Aberdeen plc on 30 September 2020. The Board notes that some shareholders may regard longevity on the Board as a negative. The Board is compliant with the Association of Investment Companies' ("AIC") Corporate Governance Code relating to time served on boards.  The Board has a mix of longer serving and more recently appointed Directors and the experience of the longer serving Directors has served the Company well through the investment cycles of the last 20+ years and is valued by the Board as a whole. The Board takes comfort from the fact that it is able to command the support of Mr Gilbert and his continuing desire to remain on this Board is seen as a very real benefit to the Company.

Board Committees

Audit Committee

The Audit Committee Report is on pages 40 to 42 of of the printed Annual Report.

Nomination Committee

All appointments to the Board of Directors are considered by the Nomination Committee which comprises all of the Directors except Mr Gilbert and his Alternate Mr Young and is chaired by Mr Cayzer. The Board's overriding priority in appointing new Directors to the Board is to identify the candidate with the best range of skills and experience to complement existing Directors. The Board also recognises the benefits of diversity and its policy on diversity is referred to in the Strategic Report on page 10 of the printed Annual Report.

As reported last year, the Nomination Committee initiated a search to find a new independent non executive Director, using the services of Fletcher Jones, an independent search consultant which has, from time to time, supplied recruitment services to the Company with the last engagement having been concluded in 2013.  The Directors drew up a specification for the appointment and interviewed a shortlist of suitable candidates.  Following review the Board appointed Ms Deborah Guthrie and Ms Charlotte Black as independent non executive Directors of the Company both with effect from the conclusion of the Annual General Meeting held on 16 January 2019. 

Management Engagement Committee

The Management Engagement Committee comprises all of the Directors except Mr Gilbert and his Alternate Mr Young and is chaired by Mr Yea. The Committee reviews the performance of the Investment Manager and its compliance with the terms of the management and secretarial agreement. The terms and conditions of the Investment Manager's appointment, including an evaluation of fees, are reviewed by the Committee on an annual basis. The Committee believes that the continuing appointment of the Manager on the terms agreed is in the interests of shareholders as a whole.

Remuneration Committee

Under the UK Listing Authority rules, where an investment trust has only non-executive directors, the Code principles relating to directors' remuneration do not apply. Accordingly, matters relating to remuneration are dealt with by the full Board, which acts as the Remuneration Committee, and is chaired by Mr Cayzer.

The Company's remuneration policy is to set remuneration at a level to attract individuals of a calibre appropriate to the Company's future development. Further information on remuneration is disclosed in the Directors' Remuneration Report on pages 36 to 38 of the printed Annual Report.

Terms of Reference

The terms of reference of all the Board Committees may be found on the Company's website asia-focus.co.uk and copies are available from the Company Secretary upon request. The terms of reference are reviewed and re-assessed by the Board for their adequacy on an annual basis.

Going Concern

In accordance with the Financial Reporting Council's guidance the Directors have undertaken a rigorous review of the Company's ability to continue as a going concern. The Board has set limits for borrowing and regularly reviews the level of any gearing, cash flow projections and compliance with banking covenants.

The Company has a $25 million loan facility with RBSI which is due to mature in 2020. The Directors will review options to replace that facility closer to the time.  At this stage, it is too early to confirm whether the facility will be renewed. If acceptable terms are available from the existing lender, or an alternative, the Company would expect to continue to access a similarly sized facility.  However, should the Board decide not to replace the facility, any maturing debt would be repaid from the proceeds of sales of investments from the portfolio.

The Directors are mindful of the principal risks and uncertainties disclosed on pages 8 and 9 of the printed Annual Report and the Viability Statement on pages 10 and 11 of the printed Annual Report and have reviewed forecasts detailing revenue and liabilities and they 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 believe that it is appropriate to continue to adopt the going concern basis in preparing the Financial Statements.

Management of Conflicts of Interest

The Board has a procedure in place to deal with a situation where a Director has a conflict of interest. As part of this process, the Directors prepare a list of other positions held and all other conflict situations that may need to be authorised either in relation to the Director concerned or his connected persons. The Board considers each Director's situation and decides whether to approve any conflict, taking into consideration what is in the best interests of the Company and whether the Director's ability to act in accordance with his or her wider duties is affected. Each Director is required to notify the Company Secretary of any potential, or actual, conflict situations that will need authorising by the Board. Authorisations given by the Board are reviewed at each Board meeting.

No Director has a service contract with the Company although Directors are issued with letters of appointment upon appointment. The Directors' interests in contractual arrangements with the Company are as shown in note 17 to the financial statements. No other Directors had any interest in contracts with the Company during the period or subsequently.

The Board has adopted appropriate procedures designed to prevent bribery.  The Company receives periodic reports from its service providers on the anti-bribery policies of these third parties. It also receives regular compliance reports from the Manager.

The Criminal Finances Act 2017 introduced a new corporate criminal offence of "failing to take reasonable steps to prevent the facilitation of tax evasion".  The Board has confirmed that it is the Company's policy to conduct all of its business in an honest and ethical manner.  The Board takes a zero-tolerance approach to facilitation of tax evasion, whether under UK law or under the law of any foreign country.

Accountability and Audit

The respective responsibilities of the Directors and the auditor in connection with the financial statements are set out on pages 39 and 48 of the printed Annual Report respectively.

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,

-     each Director has taken all the steps that they could reasonably be expected to have taken as a Director in order to make themselves aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

Additionally there have been no important events since the year end that impact this Annual Report.

The Directors have reviewed the level of non-audit services provided by the independent auditor during the year, together with the independent auditor's procedures in connection with the provision of such services, and remain satisfied that the auditor's objectivity and independence is being safeguarded.

Independent Auditor

The auditor, Ernst & Young LLP, has indicated its willingness to remain in office. The Directors will place a resolution before the Annual General Meeting to re-appoint Ernst & Young LLP as auditor for the ensuing year, and to authorise the Directors to determine its remuneration.

Internal Control

The Board is ultimately responsible for the Company's system of internal control and for reviewing its effectiveness and confirms that there is an ongoing process for identifying, evaluating and managing the significant risks faced by the Company. This process has been in place for the year under review and up to the date of approval of this Annual Report and Financial Statements. It is regularly reviewed by the Board and accords with the FRC Guidance.

The Board has reviewed the effectiveness of the system of internal control. In particular, it has reviewed and updated the process for identifying and evaluating the significant risks affecting the Company and policies by which these risks are managed.

The Directors have delegated the investment management of the Company's assets to the Standard Life Aberdeen Group within overall guidelines, and this embraces implementation of the system of internal control, including financial, operational and compliance controls and risk management. Internal control systems are monitored and supported by the Standard Life Aberdeen Group's internal audit function which undertakes periodic examination of business processes, including compliance with the terms of the management agreement, and ensures that recommendations to improve controls are implemented.

Risks are identified and documented through a risk management framework by each function within the Standard Life Aberdeen Group's activities. Risk includes financial, regulatory, market, operational and reputational risk. This helps the internal audit risk assessment model identify those functions for review. Any weaknesses identified are reported to the Board, and timetables are agreed for implementing improvements to systems. The implementation of any remedial action required is monitored and feedback provided to the Board.

The significant risks faced by the Company have been identified as being financial; operational; and compliance-related.

The key components of the process designed by the Directors to provide effective internal control are outlined below:

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

-         the Board and Manager have agreed clearly defined investment criteria, specified levels of authority and exposure limits. Reports on these issues, including performance statistics and investment valuations, are regularly submitted to the Board and there are meetings with the Manager and Investment Manager as appropriate;

-         as a matter of course the Manager's compliance department continually reviews Aberdeen Standard Investments' operations and reports to the Board on a six monthly basis;

-         written agreements are in place which specifically define the roles and responsibilities of the Manager and other third party service providers and, where relevant, ISAE3402 Reports, a global assurance standard for reporting on internal controls for service organisations, or their equivalents are reviewed;

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

-         at its September 2019 meeting, the Audit Committee carried out an annual assessment of internal controls for the year ended 31 July 2019 by considering documentation from the Manager, Investment Manager and the Depositary, including the internal audit and compliance functions and taking account of events since 31 July 2019. The results of the assessment, that internal controls are satisfactory, were then reported to the Board at the next Board meeting.

Internal control systems are designed to meet the Company's particular needs and the risks to which it is exposed. Accordingly, the internal control systems are designed to manage rather than eliminate the risk of failure to achieve business objectives and by their nature can only provide reasonable and not absolute assurance against mis-statement and loss.

Substantial Interests

The Board has been advised that the following shareholders owned 3% or more of the issued Ordinary share capital of the Company at 31 July 2019:

Shareholder	No. of Ordinary shares held	% held
City of London Investment Management Company	4,209,595	12.4
Aberdeen Standard Investments Savings Scheme (non-beneficial)	2,903,284	8.6
Wells Capital Management	2,440,585	7.2
Funds managed by Aberdeen Standard Investments	2,318,032	6.8
Hargreaves Lansdown	2,124,654	6.3
Alliance Trust Savings	1,545,337	4.6
Investec Wealth & Management	1,408,203	4.2
Charles Stanley	1,397,054	4.2

On 23 October 2019 City of London Investment Management Company notified the Company that it had increased its interest in the Company to 4,693,582 Ordinary shares representing 14.0% of the issued capital.  There have been no other significant changes notified in respect of the above holdings between 31 July 2019 and 29 October 2019.

The UK Stewardship Code and Proxy Voting

Responsibility for actively monitoring the activities of portfolio companies has been delegated by the Board to the AIFM which has sub-delegated that authority to the Investment Manager.  The full text of the Company's response to the Stewardship Code may be found on the Company's website.

Relations with Shareholders

The Directors place a great deal of importance on communication with shareholders. The Annual Report is widely distributed to other parties who have an interest in the Company's performance. Shareholders and investors may obtain up to date information on the Company through the Manager's freephone information service and the Company's website asia-focus.co.uk.  The Company responds to letters from shareholders on a wide range of issues.

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

The Notice of the Annual General Meeting, included within the Annual Report and Accounts, is sent out at least 20 working days in advance of the meeting. All shareholders have the opportunity to put questions to the Board or the Manager, either formally at the Company's Annual General Meeting or at the subsequent buffet luncheon for shareholders. The Company Secretary is available to answer general shareholder queries at any time throughout the year.

Special Business at the Annual General Meeting

Directors' Authority to Allot Relevant Securities

Approval is sought in Resolution 12, an ordinary resolution, to renew the Directors' existing general power to allot securities but will also, provide a further authority (subject to certain limits), to allot shares under a fully pre-emptive rights issue. The effect of Resolution 12 is to authorise the Directors to allot up to a maximum of 22,349,566 shares in total (representing approximately 2/3 of the existing issued capital of the Company, of which a maximum of 11,174,783 shares (approximately 1/3 of the existing issued share capital) may only be applied to fully pre-emptive rights issues. This authority is renewable annually and will expire at the conclusion of the next Annual General Meeting in 2020. The Board has no present intention to utilise this authority.

Disapplication of Pre-emption Rights

Resolution 13 is a special resolution that seeks to renew the Directors' existing authority until the conclusion of the next Annual General Meeting to make limited allotments of shares for cash of up to 10% of the issued share capital other than according to the statutory pre-emption rights which require all shares issued for cash to be offered first to all existing shareholders.  This authority includes the ability to sell shares that have been held in treasury (if any), having previously been bought back by the Company. The Board has established guidelines for treasury shares and will only consider buying in shares for treasury at a discount to their prevailing NAV and selling them from treasury at or above the then prevailing NAV.

New shares issued in accordance with Resolution 13 and subject to the authority to be conferred by Resolution 12 will always be issued at a premium to the NAV per Ordinary share at the time of issue. The Board will issue new Ordinary shares or sell Ordinary shares from treasury for cash when it is appropriate to do so, in accordance with its current policy. It is therefore possible that the issued share capital of the Company may change between the date of this document and the Annual General Meeting and therefore the authority sought will be in respect of 10% of the issued share capital as at the date of the Annual General Meeting rather than the date of this document.

Purchase of the Company's Shares

Resolution 14 is a special resolution proposing to renew the Directors' authority to make market purchases of the Company's shares in accordance with the provisions contained in the Companies Act 2006 and the Listing Rules of the Financial Conduct Authority. The minimum price to be paid per Ordinary share by the Company will not be less than 25p per share (being the nominal value) and the maximum price should not be more than the higher of (i) 5% above the average of the middle market quotations for the shares for the preceding five business days; and (ii) the higher of the last independent trade and the current highest independent bid on the trading venue where the purchase is carried out.

The Directors do not intend to use this authority to purchase the Company's Ordinary shares unless to do so would result in an increase in NAV per share and would be in the interests of shareholders generally. The authority sought will be in respect of 14.99% of the issued share capital as at the date of the Annual General Meeting rather than the date of this document. 

The authority being sought in Resolution 14 will expire at the conclusion of the Annual General Meeting in 2020 unless it is renewed before that date. Any Ordinary shares purchased in this way will either be cancelled and the number of Ordinary shares will be reduced accordingly or under the authority granted in Resolution 14 above, may be held in treasury.

If Resolutions 12 to 14 are passed then an announcement will be made on the date of the Annual General Meeting which will detail the exact number of Ordinary shares to which each of these authorities relate.

These powers will give the Directors additional flexibility going forward and the Board considers that it will be in the interests of the Company that such powers be available. Such powers will only be implemented when, in the view of the Directors, to do so will be to the benefit of shareholders as a whole.

Notice of Meetings

Resolution 15 is a special resolution seeking to authorise the Directors to call general meetings of the Company (other than Annual General Meetings) on 14 days' notice. This approval will be effective until the Company's next Annual General Meeting in 2020.  In order to utilise this shorter notice period, the Company is required to ensure that shareholders are able to vote electronically at the general meeting called on such short notice. The Directors confirm that, in the event that a general meeting is called, they will give as much notice as practicable and will only utilise the authority granted by Resolution 15 in limited and time sensitive circumstances.

Recommendation

Your Board considers Resolutions 12 to 15 to be in the best interests of the Company and its members as a whole and most likely to promote the success of the Company for the benefit of its members as a whole.  Accordingly, your Board unanimously recommends that shareholders should vote in favour of Resolutions 12 to 15 to be proposed at the AGM, as they intend to do in respect of their own beneficial shareholdings amounting to 155,682 Ordinary shares. 

By order of the Board

Aberdeen Asset Management PLC - Secretaries

Bow Bells House, 1 Bread Street

London EC4M 9HH

29 October 2019

DIRECTORS' REMUNERATION REPORT

The Board has prepared this report in accordance with the regulations governing the disclosure and approval of Directors' remuneration.  This Directors' Remuneration Report comprises three parts:

1.     Remuneration Policy which is subject to a binding shareholder vote every three years (or sooner if varied during this interval) - most recently voted on at the AGM on 1 December 2017 and which will next be voted upon at the AGM to be held in 2020;

2.     Implementation Report which provides information on how the Remuneration Policy has been applied during the year and which is subject to an advisory vote on the level of remuneration paid during the year; and

3.     Annual Statement.

The law requires the Company's Auditor to audit certain of the disclosures provided. Where disclosures have been audited, they are indicated as such. The auditor's opinion is included in the report on page 44 of the printed Annual Report.

Remuneration Policy

The Directors' Remuneration Policy takes into consideration the principles of UK Corporate Governance and there have been no changes to the policy during the period of this Report nor are there any proposals for the foreseeable future.

As the Company has no employees and the Board is comprised wholly of non-executive Directors and, given the size and nature of the Company, the Board has not established a separate Remuneration Committee.  Directors' remuneration is determined by the Board as a whole.

The Directors are non-executive and the Company's Articles of Association limit the annual aggregate fees payable to the Board of Directors to £225,000 per annum. This cap may be increased by shareholder resolution from time to time and was last increased at the Annual General Meeting held in December 2013.

	31 July 2019 £	31 July 2018 £
Chairman	35,000	35,000
Chairman of Audit Committee	30,000	30,000
Director	27,000	27,000

Subject to this overall limit, the Board's policy is that the remuneration of non-executive Directors should reflect the nature of their duties, responsibilities and the value of their time spent and be fair and comparable to that of other investment trusts that are similar in size, have a similar capital structure and have a similar investment objective.

Appointment

-       The Company only intends to appoint non-executive Directors.

-       All the Directors are non-executive appointed under the terms of Letters of Appointment.

-       Directors must retire and be subject to re-election at the first AGM after their appointment, and at least every three years thereafter.

-       New appointments to the Board will be placed on the fee applicable to all Directors at the time of appointment (currently £27,000 per annum).

-       No incentive or introductory fees will be paid to encourage a Directorship.

-       The Directors are not eligible for bonuses, pension benefits, share options, long term incentive schemes or other benefits.

-       Directors are entitled to re-imbursement of out-of-pocket expenses incurred in connection with the performance of their duties, including travel expenses.

-       The Company indemnifies its Directors for all costs, charges, losses, expenses and liabilities which may be incurred in the discharge of duties, as a Director of the Company.

Performance, Service Contracts, Compensation and Loss of Office

-     The Directors' remuneration is not subject to any performance-related fee.

-     No Director has a service contract.

-     With the exception of Mr Gilbert (and his Alternate Mr Young) and Mr Yea, no Director has an interest in any contracts with the Company during the period or subsequently.

-     The terms of appointment provide that a Director may be removed upon three months' notice.

-     Compensation will not be due upon leaving office. 

-     No Director is entitled to any other monetary payment or to any assets of the Company.

Directors' and Officers' liability insurance cover is maintained by the Company on behalf of the Directors. Under the Articles, the Company indemnifies each of the Directors out of the assets of the Company against any liability incurred by them as a Director in defending proceedings or in connection with any application to the Court in which relief is granted and separate deeds of indemnity exist in this regard between the Company and each Director.

Implementation Report

Directors' Fees

During the year the Board carried out its annual review of the level of fees payable to Directors including a review of comparable peer group directors' fees.  Following the review it was concluded that the fees should be maintained at the current levels of £35,000, £30,000 and £27,000 for the Chairman, Audit Committee Chairman and other Directors, respectively.  The Directors' fees were increased to the present level with effect from 1 October 2017.  There are no further fees to disclose as the Company has no employees, chief executive or executive directors.

Company Performance

The following chart illustrates the total shareholder return (including reinvested dividends) for a holding in the Company's shares as compared to the MSCI AC Asia Pacific ex Japan Index (in Sterling terms) for the ten year period to 31 July 2019 (rebased to 100 at 31 July 2009). Given the absence of any meaningful index with which to compare performance, this index is deemed to be the most appropriate one against which to measure the Company's performance.

Statement of Voting at General Meeting

At the Company's last Annual General Meeting, held on 16 January 2019, shareholders approved the Directors' Remuneration Report in respect of the year ended 31 July 2018 and the following proxy votes were received on the resolutions:

Resolution	For A	Against	Withheld
(2) Receive and Adopt Directors' Remuneration Report	15.9m (99.8%)	38,557 (0.2%)	29,164
(3) To approve the Directors' Remuneration Policy B	14.46m (99.8%)	34,192 (0.2%)	40,641

^A Including discretionary votes

^B Approved at the AGM held on 1 December 2017

Spend on Pay

As the Company has no employees, the Board does not consider it appropriate to present a table comparing remuneration paid to Directors with distributions to shareholders.  Fees are pro-rated where a change takes place during a financial year.

The total fees paid to Directors are shown below.

Audited Information

Fees Payable

The Directors who served in the year received the following fees which exclude employers' NI and any VAT payable:

Director	2019 £	2018 £
N K Cayzer (Chairman and highest paid Director)	35,000	34,167
Viscount Dunluce	27,000	26,333
H Fukuda	27,000	26,333
M J Gilbert A	-	17,333
P Yea C	28,000	26,333
C S Maude	20,000	29,333
C Black B	14,661	n/a
D Guthrie B	14,661	n/a
Total	166,322	159,832

^A Mr Gilbert has waived his fees with effect from 1 April 2018

^B Ms Guthrie and Ms Black were appointed to the Board on 16 January 2019

^C Mr Yea was appointed Audit Committee Chairman on 31 March 2019 following the retirement of Mr Maude

Sums Paid to Third Parties

None of the fees disclosed above were payable to third parties in respect of making available the services of one of the Directors (2018 - £17,000 of fees were assigned to Standard Life Aberdeen plc in respect of Mr Gilbert's remuneration). Mr Gilbert has waived his non executive Director's fees with effect from 1 April 2018, which would have amounted to £27,000 for the year ended 31 July 2019.  Mr Gilbert's services to the Company are non executive and he has no part in the day to day management of the Company.  The amounts paid by the Company to the Directors were for services as non-executive Directors.

Directors' Interests in the Company

The Directors are not required to have a shareholding in the Company. The Directors' interests in contractual arrangements with the Company are as shown in note 17 to the financial statements.  The Directors (including connected persons) at 31 July 2019, and 31 July 2018, had no interest in the share capital of the Company other than those interests, all of which are beneficial interests, shown in the following table.

	31 July 2019 A		31 July 2018
	Ordinary shares	CULS	Ordinary shares	CULS
N K Cayzer	-	-	-	-
Viscount Dunluce	800	-	848	-
H Fukuda	3,621	-	3,566	-
M J Gilbert	106,250	-	106,250	-
C S Maude	37,300	-	37,300	-
P Yea	2,063	-	2,063	-
H Young (alternate)	149,535	-	149,535	-
C Black B	958	-	n/a	-
D Guthrie B	4,690	-	n/a	-

^A or date of retirement, if earlier

^B Ms Guthrie and Ms Black were appointed to the Board on 16 January 2019

The above interests are unchanged at 29 October 2019, being the nearest practicable date prior to the signing of this Report.

Annual Statement

On behalf of the Board and in accordance with Part 2 of Schedule 8 of the Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013, I confirm that the above Report on Remuneration Policy and Remuneration Implementation summarises, as applicable, for the year ended 31 July 2019:

-   the major decisions on Directors' remuneration;

-   any substantial changes relating to Directors' remuneration made during the year; and

-   the context in which the changes occurred and in which decisions have been taken.

Nigel Cayzer

Chairman

29 October 2019

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 the Directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law).

Under Company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

In preparing these financial statements, the Directors are required to:

-     select suitable accounting policies and then apply them consistently;

-     make judgments and estimates that are reasonable and prudent; and

-     state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements.

The Directors are responsible for keeping proper accounting records that are sufficient to show and explain the Company's transactions and which disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that its financial statements comply with the Companies Act 2006. They are also responsible for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible for preparing a Directors' Report including Strategic Report, Business Review, Directors' Remuneration Report and Statement of Corporate

Governance that comply with that law and those regulations.

The financial statements are published on asia-focus.co.uk which is a website maintained by the Company's Manager. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

The Directors listed on pages 25 to 28 of the printed Annual Report, being the persons responsible, hereby confirm to the best of their knowledge that:

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

-       that in the opinion of the Directors, the Annual Report and financial statements taken as a whole, is fair, balanced and understandable and it provides the information necessary to assess the Company's performance, business model and strategy. In reaching this conclusion the Board has assumed that the reader of the Annual Report and financial statements would have a reasonable level of general investment knowledge, and in particular, of investment trusts; and

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

For Aberdeen Standard Asia Focus PLC

Nigel Cayzer

Chairman

29 October 2019

STATEMENT OF COMPREHENSIVE INCOME

		Year ended 31 July 2019			Year ended 31 July 2018
		Revenue	Capital	Total	Revenue	Capital	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000
Gains on investments	10	-	21,109	21,109	-	6,932	6,932
Income	3	14,632	-	14,632	14,673	-	14,673
Exchange losses		-	(1,371)	(1,371)	-	(278)	(278)
Investment management fees	4	(3,710)	-	(3,710)	(4,155)	-	(4,155)
Administrative expenses	5	(1,092)	-	(1,092)	(1,092)	-	(1,092)
		_______	_______	_______	_______	_______	_______
Net return before finance costs and taxation		9,830	19,738	29,568	9,426	6,654	16,080
Finance costs	6	(1,600)	-	(1,600)	(1,861)	-	(1,861)
		_______	_______	_______	_______	_______	_______
Net return before tax		8,230	19,738	27,968	7,565	6,654	14,219
Tax expense	7	(763)	(231)	(994)	(882)	(578)	(1,460)
		_______	_______	_______	_______	_______	_______
Net return after taxation		7,467	19,507	26,974	6,683	6,076	12,759
		_______	_______	_______	_______	_______	_______
Return per share (pence):
Basic	9	21.64	56.54	78.18	19.27	17.51	36.78
		_______	_______	_______	_______	_______	_______
Diluted	9	21.35	52.69	74.04	n/a	16.33	n/a
		_______	_______	_______	_______	_______	_______
For the year ended 31 July 2018 the conversion option for potential Ordinary shares within the Convertible Unsecured Loan Stock was non-dilutive to the revenue return per Ordinary share but dilutive to the capital return per Ordinary share.
The total column of this statement represents the profit and loss account of the Company. There is no other comprehensive income and therefore the net return after taxation is also the total comprehensive income for the year.
All revenue and capital items in the above statement derive from continuing operations.
The accompanying notes are an integral part of the financial statements.

STATEMENT OF FINANCIAL POSITION

		As at	As at
		31 July 2019	31 July 2018
	Notes	£'000	£'000
Non-current assets
Investments at fair value through profit or loss	10	484,709	476,097
		_______	_______
Current assets
Debtors and prepayments	11	3,617	3,037
Cash and short term deposits		10,239	9,398
		_______	_______
		13,856	12,435
		_______	_______
Creditors: amounts falling due within one year
Bank loans		(20,407)	(7,623)
Other creditors		(1,649)	(2,488)
		_______	_______
	12	(22,056)	(10,111)
		_______	_______
Net current (liabilities)/assets		(8,200)	2,324
		_______	_______
Total assets less current liabilities		476,509	478,421
Non-current liabilities
Bank loans	12	-	(9,506)
2.25% Convertible Unsecured Loan Stock 2025	13	(35,499)	(35,209)
		_______	_______
		(35,499)	(44,715)
		_______	_______
Net assets		441,010	433,706
		_______	_______
Capital and reserves
Called-up share capital	14	10,430	10,429
Capital redemption reserve		2,062	2,062
Share premium account		60,130	60,076
Equity component of 2.25% Convertible Unsecured Loan Stock 2025	13	1,057	1,054
Capital reserve	15	351,781	346,123
Revenue reserve		15,550	13,962
		_______	_______
Equity shareholders' funds		441,010	433,706
		_______	_______
Net asset value per share (pence):
Basic	16	1,300.56	1,231.83
		_______	_______
Diluted	16	n/a	n/a
		_______	_______

STATEMENT OF CHANGES IN EQUITY

For the year ended 31 July 2019
				Capital	Share	Equity
			Share	redemption	premium	Component	Capital	Revenue
			capital	reserve	account	CULS 2025	reserve	reserve	Total
	Note		£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 1 August 2018			10,429	2,062	60,076	1,054	346,123	13,962	433,706
Conversion of 2.25% CULS 2025	13		1	-	54	-	-	-	55
Expense update for issue of 2025 CULS			-	-	-	3	(60)		(57)
Purchase of own shares to treasury	14		-	-	-	-	(13,789)	-	(13,789)
Return after taxation			-	-	-	-	19,507	7,467	26,974
Dividends paid	8		-	-	-	-	-	(5,879)	(5,879)
			_____	_____	_____	_____	_____	_____	_____
Balance at 31 July 2019			10,430	2,062	60,130	1,057	351,781	15,550	441,010
			_____	_____	_____	_____	_____	_____	_____
For the year ended 31 July 2018
			Capital	Share	Equity	Equity
		Share	redemption	premium	Component	Component	Capital	Revenue
		capital	reserve	account	CULS 2019	CULS 2025	reserve	reserve	Total
	Note	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 1 August 2017		9,796	2,062	39,695	1,361	-	365,765	11,426	430,105
Conversion of 3.5% CULS 2019	13	81	-	2,607	-	-	-	-	2,688
Maturity of 3.5% CULS 2019	13	552	-	17,774	(1,361)	-	-	1,361	18,326
Conversion of 3.5% CULS 2019 to 2.25% CULS 2025		-	-	-	-	436	(3,425)		(2,989)
Issue of 2.25% CULS 2025		-	-	-	-	618	-	-	618
Purchase of own shares to treasury	14	-	-	-	-	-	(22,293)	-	(22,293)
Return after taxation		-	-	-	-	-	6,076	6,683	12,759
Dividends paid	8	-	-	-	-	-	-	(5,508)	(5,508)
		_____	_____	_____	_____	_____	_____	_____	_____
Balance at 31 July 2018		10,429	2,062	60,076	-	1,054	346,123	13,962	433,706
		_____	_____	_____	_____	_____	_____	_____	_____

STATEMENT OF CASHFLOWS

		Year ended	Year ended
		31 July 2019	31 July 2018
	Notes	£'000	£'000
Cash flows from operating activities
Return before finance costs and tax		29,568	16,080
Adjustments for:
Dividend income	3	(14,585)	(14,662)
Interest income	3	(47)	(11)
Dividends received		14,354	14,252
Interest received		47	9
Interest paid		(1,386)	(1,477)
Gains on investments	10	(21,109)	(6,932)
Foreign exchange movements		1,371	278
Decrease in prepayments		2	-
Decrease in other debtors		48	36
(Decrease)/increase in other creditors		(7)	360
Stock dividends included in investment income		(308)	(139)
Overseas withholding tax suffered	7	(843)	(882)
		_______	_______
Net cash inflow from operating activities		7,105	6,912
Cash flows from investing activities
Purchase of investments		(122,485)	(45,008)
Sales of investments		135,186	42,520
Capital gains tax on sales		(711)	(32)
		_______	_______
Net cash inflow/(outflow) from investing activities		11,990	(2,520)
Cash flows from financing activities
Purchase of own shares to treasury		(14,253)	(21,900)
Drawdown of loan	12	1,966	7,521
Loan arrangement fees		(6)	(28)
Issue of 2.25% Convertible Unsecured Loan Stock 2025{A}		-	21,039
2.25% Convertible Unsecured Loan Stock 2025 issue expenses		(22)	-
Equity dividends paid	8	(5,879)	(5,508)
		_______	_______
Net cash (outflow)/inflow from financing activities		(18,194)	1,124
		_______	_______
(Decrease)/increase in cash and cash equivalents		901	5,516
		_______	_______
Analysis of changes in cash and cash equivalents
Opening balance		9,398	4,009
(Decrease)/increase in cash and cash equivalents		901	5,516
Foreign exchange movements		(60)	(127)
		_______	_______
Closing balance		10,239	9,398
		_______	_______
{A} 2018 amount restated from £21,004,000.

NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 July 2019
1.	Principal activity
	The Company is a closed-end investment company, registered in England & Wales No 03106339, with its Ordinary shares being listed on the London Stock Exchange.

2.	Accounting policies
	(a)	Basis of preparation and going concern
		The financial statements have been prepared in accordance with Financial Reporting Standard 102 and with the AIC's Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' issued in November 2014 and updated in February 2018 with consequential amendments. The financial statements are prepared in Sterling which is the functional currency of the Company and rounded to the nearest £'000. They have also been prepared on a going concern basis and on the assumption that approval as an investment trust will continue to be granted.
		The Directors have, at the time of approving the financial statements, a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the financial statements. Further detail is included in the Directors' Report (unaudited) on page 32 of the printed Annual Report.
		Significant accounting judgements, estimates and assumptions
		The preparation of financial statements requires the use of certain significant accounting judgements, estimates and assumptions which requires management to exercise its judgement in the process of applying the accounting policies and are continually evaluated. Special dividends are assessed and credited to capital or revenue according to their circumstances and are considered to require significant judgement. The Directors do not consider there to be any significant estimates within the financial statements.
	(b)	Valuation of investments
		The Company has chosen to apply the recognition and measurement provisions of IAS 39 Financial Instruments: Recognition and Measurement (as adopted for use in the EU) and investments have been designated upon initial recognition at fair value through profit or loss. Investments are recognised and de-recognised at trade date where a purchase or sale is under a contract whose terms require delivery within the time frame established by the market concerned, and are initially measured at fair value. Subsequent to initial recognition, investments are measured at fair value. For listed investments, this is deemed to be bid market prices. Gains and losses arising from changes in fair value and disposals are included as a capital item in the Statement of Comprehensive Income and are ultimately recognised in the capital reserve.
	(c)	Borrowings
		Bank loans are initially recognised at cost, being the fair value of the consideration received, net of any issue expenses. Subsequently, they are measured at amortised cost using the effective interest method.  Finance charges are accounted for on an accruals basis using the effective interest rate method and are charged 100% to revenue.
	(d)	Income
		Dividends, including taxes deducted at source, are included in revenue by reference to the date on which the investment is quoted ex-dividend. Special dividends are reviewed on a case-by-case basis and may be credited to capital, if circumstances dictate. Dividends receivable on equity shares where no ex-dividend date is quoted are brought into account when the Company's right to receive payment is established. Fixed returns on non-equity shares are recognised on a time apportioned basis so as to reflect the effective yield on shares. Other returns on non-equity shares are recognised when the right to return is established. Where the Company has elected to receive its dividends in the form of additional shares rather than cash, the amount of the cash dividend is recognised as income. Any excess in the value of the shares received over the amount of the cash dividend is recognised in capital reserves. Interest receivable on bank balances is dealt with on an accruals basis.
	(e)	Expenses
		All expenses are accounted for on an accruals basis. Expenses, including management fees and finance costs, are charged 100% through the revenue column of the Statement of Comprehensive Income with the exception of transaction costs incurred on the purchase and disposal of investments which are charged to the capital column of the Statement of Comprehensive Income and are separately identified and disclosed in note 10 within gains on investments.
	(f)	Taxation
		The tax expense represents the sum of tax currently payable and deferred tax. Any tax payable is based on the taxable profit for the year. Taxable profit differs from net profit as reported in the Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company's liability for current tax is calculated using tax rates that were applicable at the Statement of Financial Position date.
		Deferred taxation is recognised in respect of all timing differences that have originated but not reversed at the Statement of Financial Position date, where transactions or events that result in an obligation to pay more tax in the future or right to pay less tax in the future have occurred at the Statement of Financial Position date. This is subject to deferred tax assets only being recognised if it is considered more likely than not that there will be suitable profits from which the future reversal of the underlying timing differences can be deducted. Timing differences are differences arising between the Company's taxable profits and its results as stated in the financial statements which are capable of reversal in one or more subsequent periods. Deferred tax is measured on a non-discounted basis at the tax rates that are expected to apply in the periods in which timing differences are expected to reverse, based on tax rates and laws enacted or substantively enacted at the Statement of Financial Position date.
		Due to the Company's status as an investment trust company and the intention to continue meeting the conditions required to obtain approval in the foreseeable future, the Company has not provided deferred tax on any capital gains and losses arising on the revaluation or disposal of investments.
		The tax effect of different items of income/gain and expenditure/loss is allocated between capital and revenue within the Statement of Comprehensive Income on the same basis as the particular item to which it relates using the Company's effective rate of tax for the year, based on the marginal basis.
	(g)	Foreign currency
		Assets and liabilities in foreign currencies are translated at the rates of exchange ruling on the Statement of Financial Position date. Transactions involving foreign currencies are converted at the rate ruling on the date of the transaction. Gains and losses on dividends receivable are recognised in the Statement of Comprehensive Income and are reflected in the revenue reserve. Gains and losses on the realisation of investments in foreign currencies and unrealised gains and losses on investments in foreign currencies are recognised in the Statement of Comprehensive Income and are then transferred to the capital reserve.
	(h)	Convertible Unsecured Loan Stock
		Convertible Unsecured Loan Stock ("CULS") issued by the Company is regarded as a compound instrument, comprising of a liability component and an equity component. At the date of issue, the fair value of the liability component of the 2.25% CULS 2025 was estimated by assuming that an equivalent non-convertible obligation of the Company would have an effective interest rate of 3.063% (3.5% CULS 2019 - 3.113%). The fair value of the equity component, representing the option to convert liability into equity, is derived from the difference between the issue proceeds of the CULS and the fair value assigned to the liability. The liability component is subsequently measured at amortised cost using the effective interest rate and the equity component remains unchanged.
		Direct expenses associated with the CULS issue are allocated to the liability and equity components in proportion to the split of the proceeds of the issue. Expenses allocated to the liability component are amortised over the life of the instrument using the effective interest rate.
		The interest expense on the CULS is calculated according to the effective interest rate method.
		On conversion of CULS, equity is issued and the liability component is derecognised. The original equity component recognised at inception remains in equity. No gain or loss is recognised on conversion.
		When CULS is repurchased early for cancellation, the fair value of the liability at the redemption date is compared to its carrying amount, giving rise to a gain or loss on redemption that is recognised through profit or loss. The amount of consideration allocated to equity is recognised in equity with no gain or loss being recognised.
	(i)	Nature and purpose of reserves
		Capital redemption reserve
		The capital redemption reserve arose when Ordinary shares were redeemed and cancelled, at which point an amount equal to the par value of the Ordinary share capital was transferred from the share capital account to the capital redemption reserve.
		Special reserve
		The special reserve was created by a transfer from the share premium account and is used to fund the value of purchases in the market of the Company's own shares to be held in treasury.
		Capital reserve
		This reserve reflects any gains or losses on investments realised in the period along with any movement in the fair value of investments held that have been recognised in the Statement of Comprehensive Income. These include gains and losses from foreign currency exchange differences arising on monetary assets and liabilities except for dividend income receivable. Additionally, the cost of share buybacks to be held in treasury is also deducted from this 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 represents the amount of the Company's reserves distributable by way of dividend.
	(j)	Treasury shares
		When the Company purchases the Company's equity share capital as treasury shares, the amount of the consideration paid, which includes directly attributable costs and is recognised as a deduction from equity. When these shares are sold or reissued subsequently, the amount received is recognised as an increase in equity, and the resulting surplus or deficit on the transaction is transferred to or from the capital reserve.
	(k)	Dividends payable
		Final dividends are recognised in the financial statements in the period in which Shareholders approve them.
	(l)	Segmental reporting
		The Directors are of the opinion that the Company is engaged in a single segment of business activity, being investment business. Consequently, no business segmental analysis is provided however an analysis of the geographic exposure of the Company's investments is provided on page 22 of the printed Annual Report.

		2019	2018
3.	Income	£'000	£'000
	Income from investments
	Overseas dividends	13,659	14,073
	UK dividend income	300	300
	REIT income	65	141
	Stock dividends	308	139
	Fixed interest income	253	9
		_______	_______
		14,585	14,662
		_______	_______
	Other income
	Deposit interest	44	11
	Other income	3	-
		_______	_______
		47	11
		_______	_______
	Total income	14,632	14,673
		_______	_______

		2019	2018
4.	Investment management fees	£'000	£'000
	Investment management fees	3,710	4,155
		_______	_______
	The Company has an agreement with ASFML for the provision of management services, under which investment management services have been delegated to ASI Asia.
	During the year, from 1 August 2018 until 31 October 2018 the management fee was payable monthly in arrears and was based on an annual amount of 1.0% (2018 - 1.0%), calculated on the average net asset value of the Company over a 24 month period, valued monthly. The management fee was calculated by reference to the value of the Company's net assets (gross assets less liabilities excluding the amount of any loan facilities or overdraft facilities drawn down). With effect from 1 November 2018, a new fee arrangement has been agreed with the Manager. The new fee will continue to be payable monthly in arrears but at the rate of 0.08% of the Company's market capitalisation (as defined below) per calendar month, exclusive of VAT where applicable. Market capitalisation is defined as the Company's closing Ordinary share price quoted on the London Stock Exchange multiplied by the number of Ordinary shares in issue (excluding those held in Treasury), as determined on the last business day of the calendar month to which the remuneration relates. The balance due to the Manager at the year end was £613,000 (2018 - £725,000) which represents two months' fees (2018 - same).
	The management agreement may be terminated by either the Company or the Manager on the expiry of twelve months' written notice. On termination, the Manager would be entitled to receive fees which would otherwise have been due to that date.

			2019	2018
5.	Administrative expenses		£'000	£'000
	Administration fees		95	92
	Directors' fees		166	160
	Promotional activities		219	240
	Auditor's remuneration:
	- fees payable to the auditor for the audit of the annual accounts		28	27
	- fees payable to the auditor and its associates for other services{A}
		- interim review	7	7
		- iXBRL tagging services	-	2
	Custodian charges		251	199
	Registrar fees{B}		47	48
	Other expenses		279	317
			_______	_______
			1,092	1,092
			_______	_______
	{A}      For 2018, in addition to the fees treated as administrative expenses, Ernst & Young LLP were also paid £15,000 (including VAT) for services provided relating to advice given on the refinancing of the Convertible Unsecured Loan Stock ("CULS") during the year. These fees were capitalised and treated as issue expenses.
	{B}      For 2018, in addition to the fees treated as administrative expenses, Equiniti Limited were also paid £52,000 (excluding VAT) (2017 - £nil) for services provided relating to the refinancing of the Convertible Unsecured Loan Stock ("CULS") during the year. These fees were capitalised and treated as issue expenses.
	The Company has an agreement with ASFML for the provision of administration services. The administration fee is payable quarterly in advance and is adjusted annually to reflect the movement in the Retail Prices Index. The balance due to ASFML at the year end was £24,000 (2018 - £23,000). The agreement is terminable on six months' notice.
	Under the management agreement, the Company has also appointed ASFML to provide promotional activities to the Company by way of its participation in the Aberdeen Standard Investment Trust Share Plan and ISA. ASFML has delegated this role to the Standard Life Aberdeen Group. The total fee paid and payable under the agreement in relation to promotional activities was £219,000 (2018 - £240,000). There was a £82,000 (2018 - £18,000) balance due to the Standard Life Aberdeen Group at the year end.
	No pension contributions were made in respect of any of the Directors.

		2019	2018
6.	Finance costs	£'000	£'000
	Loans repayable in less than 1 year	516	445
	Interest on 3.5% CULS 2019	-	907
	Notional interest on 3.5% CULS 2019	-	183
	Amortisation of 3.5% CULS 2019 issue expenses	-	137
	Interest on 2.25% CULS 2025	839	144
	Notional interest on 2.25% CULS 2025	154	26
	Amortisation of 2.25% CULS 2025 issue expenses	91	19
		_______	_______
		1,600	1,861
		_______	_______

			2019			2018
			Revenue	Capital	Total	Revenue	Capital	Total
7.	Tax expense		£'000	£'000	£'000	£'000	£'000	£'000
	(a)	Analysis of charge for the year
		Indian capital gains tax charge on sales	-	711	711	-	32	32
		Overseas taxation	763	-	763	882	-	882
		Total current tax charge for the year	763	711	1,474	882	32	914
		Deferred tax liability on Indian capital gains	-	(480)	(480)	-	546	546
			_______	______	_____	_______	______	_____
		Total tax charge for the year	763	231	994	882	578	1,460
			_______	______	_____	_______	______	_____
		On 1 April 2018, the Indian Government withdrew an exemption from capital gains tax on investments held for twelve months or longer. Accordingly, the Company has recognised a deferred tax liability of £231,000 (2018 - £546,000) on capital gains which may arise if Indian investments are sold.
		At 31 July 2019 the Company had surplus management expenses and loan relationship deficits with a tax value of £8,836,000 (2018 - £7,814,000) in respect of which a deferred tax asset has not been recognised. This is due to the Company having sufficient excess management expenses available to cover the potential liability and the Company is not expected to generate taxable income in the future in excess of deductible expenses.
	(b)	Factors affecting the tax charge for the year
		The tax assessed for the year is  lower than the current standard rate of corporation tax in the UK for a large company of 19% (2018 - 19%). The differences are explained below:
			2019			2018
			Revenue	Capital	Total	Revenue	Capital	Total
			£'000	£'000	£'000	£'000	£'000	£'000
		Return before taxation	8,230	19,738	27,968	7,565	6,654	14,219
		Return multiplied by the standard tax rate of corporation tax of 19%	1,563	3,750	5,313	1,437	1,264	2,701
		Effects of:
		Gains on investments not taxable	-	(4,011)	(4,011)	-	(1,317)	(1,317)
		Exchange losses	-	261	261	-	53	53
		Overseas tax	763	-	763	882	-	882
		Indian capital gains tax charge on sales	-	711	711	-	32	32
		Movement in deferred tax liability on Indian capital gains	-	(480)	(480)	-	546	546
		UK dividend income	(57)	-	(57)	(57)	-	(57)
		Non-taxable dividend income	(2,654)	-	(2,654)	(2,700)	-	(2,700)
		Expenses not deductible for tax purposes	7	-	7	3	-	3
		Tax effect of expensed double taxation relief	-	-	-	(2)	-	(2)
		Movement in unutilised management expenses	893	-	893	969	-	969
		Movement in unutilised loan relationship deficits	248	-	248	350	-	350
			_______	______	_____	_______	______	_____
		Total tax charge for the year	763	231	994	882	578	1,460
			_______	______	_____	_______	______	_____

		2019	2018
8.	Dividends	£'000	£'000
	Proposed final dividend for 2018 - 13.0p (2017 - 12.0p)	4,496	4,131
	Proposed special dividend for 2018 - 4.0p (2017 - 4.0p)	1,383	1,377
		_______	_______
		5,879	5,508
		_______	_______
	Proposed final and special dividends are subject to approval by shareholders at the Annual General Meeting and are not included as a liability in the financial statements.
	We set out below the total dividends paid and proposed in respect of the financial year, which is the basis on which the requirements of Sections 1158 - 1159 of the Corporation Tax Act 2010 are considered. The revenue available for distribution by way of dividend for the current year is £7,467,000 (2018 - £6,683,000).
		2019	2018
		£'000	£'000
	Proposed final dividend for 2019 - 14.0p (2018 - 13.0p)	4,693	4,509
	Proposed special dividend for 2019 - 5.0p (2018 - 4.0p)	1,676	1,387
		_______	_______
		6,370	5,896
		_______	_______
	The amount reflected above for the cost of the proposed final and special dividend for 2019 is based on 33,524,349 Ordinary shares, being the number of Ordinary shares in issue excluding shares held in treasury at the date of this Report.

		2019			2018
9.	Return per Ordinary share	Revenue	Capital	Total	Revenue	Capital	Total
	Basic
	Return after taxation (£'000)	7,467	19,507	26,974	6,683	6,076	12,759
	Weighted average number of shares in issue{A}			34,498,372			34,690,302
	Return per Ordinary share (p)	21.64	56.54	78.18	19.27	17.51	36.78
		______	_____	_______	______	_____	_______
			2019			2018
	Diluted	Revenue	Capital	Total	Revenue	Capital	Total
	Return after taxation (£'000)	7,905	19,507	27,412	7,963	6,076	14,039
	Weighted average number of shares in issue{AB}			37,022,314			37,215,899
	Return per Ordinary share (p)	21.35	52.69	74.04	n/a	16.33	n/a
		______	_____	_______	______	_____	_______
	{A}    Calculated excluding shares held in treasury.
	{B}    The calculation of the diluted total, revenue and capital returns per Ordinary share is carried out in accordance with IAS 33, "Earnings per Share". For the purpose of calculating total, revenue and capital returns per Ordinary share, the number of Ordinary shares used is the weighted average number used in the basic calculation plus the number of Ordinary shares deemed to be issued for no consideration on exercise of all 2.25% Convertible Unsecured Loan Stock 2025 ("CULS"). The calculations indicate that the exercise of CULS would result in an increase in the weighted average number of Ordinary shares of 2,523,942 (2018 - 2,525,597) to 37,022,314 (2018 - 37,215,899) Ordinary shares.
	For the year ended 31 July 2018 the assumed conversion for potential Ordinary shares was non-dilutive to the revenue return per Ordinary share but dilutive to the capital return per Ordinary share. Where dilution occurs, the net returns are adjusted for interest charges and issue expenses relating to the CULS (2019 - £438,000; 2018 - £1,280,000). Total earnings for the period are tested for dilution. Once dilution has been determined individual revenue and capital earnings are adjusted.

		2019			2018
		Listed	Listed		Listed		Listed
		in UK	overseas	Total	in UK		overseas	Total
10.	Investments	£'000	£'000	£'000	£'000		£'000	£'000
	Fair value through profit or loss:
	Opening book cost	7,067	258,622	265,689	9,404		236,782	246,186
	Opening fair value gains on investments held	6,168	204,240	210,408	5,008		217,420	222,428
		______	_______	_______	______		_______	_______
	Opening fair value	13,235	462,862	476,097	14,412		454,202	468,614
	Movements in year:
	Purchases at cost	-	122,930	122,930	-		45,142	45,142
	Sales - proceeds	-	(135,540)	(135,540)	(2,865)		(41,726)	(44,591)
	Sales - gains on sales	-	61,607	61,607	528		18,424	18,952
	Effective yield adjustment	-	113	113	-		-	-
	Movement in fair value gains on investments held	(1,198)	(39,300)	(40,498)	1,160		(13,180)	(12,020)
		______	_______	_______	______		_______	_______
	Closing fair value	12,037	472,672	484,709	13,235		462,862	476,097
		______	_______	_______	______		_______	_______
		2019			2018
		Listed	Listed		Listed		Listed
		in UK	overseas	Total	in UK		overseas	Total
		£'000	£'000	£'000	£'000		£'000	£'000
	Closing book cost	7,067	307,732	314,799	7,067		258,622	265,689
	Closing fair value gains on investments held	4,970	164,940	169,910	6,168		204,240	210,408
		______	_______	_______	_______		_______	_______
		12,037	472,672	484,709	13,235		462,862	476,097
		______	_______	_______	______		_______	_______
	Gains/(losses) on investments
	Gains on sales	-	61,607	61,607	528		18,424	18,952
	Movement in fair value gains on investments held	(1,198)	(39,300)	(40,498)	1,160		(13,180)	(12,020)
		______	_______	_______	______		_______	_______
		(1,198)	22,307	21,109	1,688		5,244	6,932
		______	_______	_______	______		_______	_______
	Transaction costs
	During the year expenses were incurred in acquiring or disposing of investments classified as fair value through profit or loss. These have been expensed through capital and are included within gains on investments in the Statement of Comprehensive Income. The total costs were as follows:
						2019		2018
						£'000		£'000
	Purchases					259		100
	Sales					332		94
						_______		_______
						591		194
						_______		_______

		2019	2018
11.	Debtors: amounts falling due within one year	£'000	£'000
	Amounts due from brokers	2,438	2,085
	Other debtors	184	12
	Prepayments and accrued income	995	940
		_______	_______
		3,617	3,037
		_______	_______
	None of the above amounts are past their due date or impaired (2018 - same).

12.	Creditors		2019	2018
	(a)	Amounts falling due within one year	£'000	£'000
		Bank loans	20,417	7,623
		Loan arrangement fees	(10)	-
		Amounts due to brokers	371	233
		Amount due for the purchase of own shares to treasury	86	551
		Deferred tax liability on Indian capital gains	57	546
		Other creditors	1,135	1,158
			_______	_______
			22,056	10,111
			_______	_______
		On 30 August 2018 the Company's US$25,000,000 revolving facility agreement with The Royal Bank of Scotland PLC was novated to The Royal Bank of Scotland International Limited, London Branch. The loan incurred an arrangement fee of US$50,000 at the time of the original drawdown, which is being amortised over the life of the loan. As at 31 July 2019, US$12,500,000 (Sterling equivalent - £10,209,000) had been drawn down at an all-in rate of 3.1% which matured on 23 August 2019 (31 July 2018 - US$10,000,000 (Sterling equivalent - £7,623,000) drawn down at an all-in rate of £2.9% which matured on 23 August 2018).
		In addition, at 31 July 2019 US$12,500,000 (Sterling equivalent - £10,198,000) (31 July 2018 - $12,500,000 with a Sterling equivalent of £9,506,000) was drawn down from the term loan facility at a fixed interest rate of 2.506% until 8 June 2020. The terms of the loan facilities contain covenants that the minimum net assets of the Company are £300,000,000, the percentage of borrowings against net assets is less than 20%, and the portfolio contains a minimum of forty five eligible investments (investments made in accordance with the Company's investment policy). All covenants have been complied with during the year.
		All financial liabilities are measured at amortised cost.
			2019	2018
	(b)	Amounts falling due after more than one year	£'000	£'000
		Long-term bank loan	-	9,506
		Loan arrangement fees	-	(12)
			_______	_______
			-	9,494
			_______	_______

			2019			2018
			Number of	Liability	Equity	Number of	Liability	Equity
			units	component	component	units	component	component
13.	Non-current liabilities		£'000	£'000	£'000	£'000	£'000	£'000
	(a)	3.5% Convertible Unsecured Loan Stock 2019
		Balance at beginning of year	-	-	-	32,990	32,441	1,361
		Conversion of 3.5% CULS 2019	-	-	-	(2,688)	(2,688)	-
		Maturity of 3.5% CULS 2019	-	-	-	(30,302)	(30,073)	(1,361)
		Notional interest on CULS transferred to revenue reserve	-	-	-	-	183	-
		Amortisation and issue expenses	-	-	-	-	137	-
			______	______	______	______	______	______
		Balance at end of year	-	-	-	-	-	-
			______	______	______	______	______	______
			2019			2018
			Number of	Liability	Equity	Number of	Liability	Equity
			units	component	component	units	component	component
			£'000	£'000	£'000	£'000	£'000	£'000
	(b)	2.25% Convertible Unsecured Loan Stock 2025
		Balance at beginning of year	37,000	35,209	1,054	-	-	-
		Conversion of 3.5% CULS 2019 to 2.25% CULS 2025	(55)	(55)	-	15,236	14,800	436
		Issue of 2.25% CULS 2025	-	-	-	21,764	21,123	641
		Issue expenses	-	100	3	-	(759)	(23)
		Notional interest on CULS transferred to revenue reserve	-	153	-	-	26	-
		Amortisation and issue expenses	-	92	-	-	19	-
			______	______	______	______	______	______
		Balance at end of year	36,945	35,499	1,057	37,000	35,209	1,054
			______	______	______	______	______	______
		The 2.25% Convertible Unsecured Loan Stock 2025 ("2025 CULS") can be converted at the election of holders into Ordinary shares during the months of May and November each year throughout their life, commencing 30 November 2018 to 31 May 2025 at a rate of 1 Ordinary share for every 1465.0p nominal of CULS. Interest is payable on the 2025 CULS on 31 May and 30 November each year, commencing on 30 November 2018. 100% of the interest will be charged to revenue in line with the Board's expected long-term split of returns from the investment portfolio of the Company.
		The 2025 CULS has been constituted as an unsecured subordinated obligation of the Company by the Trust Deed between the Company and the Trustee, the Law Debenture Trust Corporation p.l.c., dated 23 May 2018. The Trust Deed details the 2025 CULS holders' rights and the Company's obligations to the CULS holders and the Trustee oversees the operation of the Trust Deed. In the event of a winding-up of the Company the rights and claims of the Trustee and 2025 CULS holders would be subordinate to the claims of all creditors in respect of the Company's secured and unsecured borrowings, under the terms of the Trust Deed.
		In 2018 the Company received elections from 2025 CULS holders to convert 54,768 nominal amount of CULS into 3,727 Ordinary shares.
		The fair value of the 2025 CULS at 31 July 2019 was £37,684,000 (2018 - £37,000,000).

			2019	2018
14.	Called up share capital		£'000	£'000
	Allotted, called-up and fully paid
	Ordinary shares of 25p		8,477	8,802
	Treasury shares		1,953	1,627
			______	______
			10,430	10,429
			______	______
		Ordinary	Treasury	Total
		shares	shares	shares
		Number	Number	Number
	At 31 July 2018	35,208,272	6,507,012	41,715,284
	Conversion of CULS	3,727	-	3,727
	Buyback of own shares	(1,302,650)	1,302,650	-
		_________	________	_________
	At 31 July 2019	33,909,349	7,809,662	41,719,011
		_________	________	_________
	During the year 1,302,650 Ordinary shares of 25p were purchased by the Company (2018 - 2,137,138 Ordinary shares purchased) at a total cost of £13,789,000 (2018 - total cost of £22,293,000), all of which were held in treasury (2018 - same). At the year end 7,809,662 (2018 - 6,507,012) shares were held in treasury, which represents 23.03% (2018 - 15.60%) of the Company's total issued share capital at 31 July 2019. During the year there were a further 3,727 Ordinary shares issued as a result of CULS conversions (2018 - 2,531,685).
	Since the year end a further 385,000 Ordinary shares of 25p have been purchased by the Company at a total cost of £4,203,000, all of which are held in treasury.

		2019	2018
15.	Reserves	£'000	£'000
	Capital reserve
	At 31 July 2018	346,123	365,765
	Movement in investment holdings fair value	(40,498)	(12,020)
	Gains on realisation of investments at fair value	61,607	18,952
	Purchase of own shares to treasury	(13,789)	(22,293)
	Issue of 2.25% CULS 2025	-	(3,425)
	Expense update for issue of 2025 CULS	(60)	-
	Indian capital gains tax charge	(231)	(578)
	Foreign exchange movement	(1,371)	(278)
		______	______
	At 31 July 2019	351,781	346,123
		______	______
	The capital reserve includes investment holding gains amounting to £169,910,000 (2018 - £210,408,000) as disclosed in note 10. The above split in capital reserve is shown in accordance with provisions of the Statement of Recommended Practice 'Financial Statements Of Investment Trust Companies and Venture Capital Trusts'.

16.	Net asset value per Ordinary share		2019	2018
	Basic
	Net assets attributable		£441,010,000	£433,706,000
	Number of Ordinary shares in issue{A}		33,909,349	35,208,272
	Net asset value per Ordinary share		1,300.56p	1,231.83p
			2019	2018
	Diluted
	Net assets attributable		£476,509,000	£468,915,000
	Number of Ordinary shares in issue {A}		36,431,208	37,733,869
	Net asset value per Ordinary share{B}		n/a	n/a
	{A}            Calculated excluding shares held in treasury
	{B}      The diluted net asset value per Ordinary share has been calculated on the assumption that £36,945,232 (2018 -£37,000,000) 2.25% Convertible Unsecured Loan Stock 2025 ("CULS")  is converted at 1465.0p per share, giving a total of 36,431,208 (2018 - 37,733,869) Ordinary shares. Where dilution occurs, the net assets are adjusted for items relating to the CULS.
	Net asset value per share - debt converted
	In accordance with the Company's understanding of the current methodology adopted by the AIC, convertible financial instruments are deemed to be 'in the money' if the cum income net asset value ("NAV") exceeds the conversion price of 1,465.0p per share. In such circumstances a net asset value is produced and disclosed assuming the convertible debt is fully converted. At 31 July 2019 the cum income NAV was 1,300.56p (2018 - 1,231.83p) and thus the CULS were 'not in the money' (2018 - same).

17.	Related party transactions and transactions with the Manager
	Fees payable during the year to the Directors and their interests in shares of the Company are considered to be related party transactions and are disclosed within the Directors' Remuneration Report on pages 36 to 38 of the printed Annual Report. The balance of fees due to Directors at the year end was £nil (2018 - £nil).
	Mr Gilbert is a director of Standard Life Aberdeen plc. Both Mr Gilbert and his alternate, Mr Young are directors of its subsidiary ASI Asia which has been delegated, under an agreement with ASFML, to provide management services to the Company, the terms of which are outlined in notes 4 and 5 along with details of transactions during the year and balances outstanding at the year end. Neither Mr Gilbert nor Mr Young are directors of ASFML.
	Mr Yea is chairman of Equiniti Group Plc which acts as Registrar and Receiving Agent to the Company. Mr Yea is excluded from participation in all discussions relating to the appointment of Equiniti. Details of the transactions during the year with Equiniti are outlined in note 5 on page 58 of the printed Annual Report. Balances outstanding at the year end amounted to £5,000 (2018 - £5,000).

18.	Financial instruments
	Risk management
	The Company's investment activities expose it to various types of financial risk associated with the financial instruments and markets in which it invests. The Company's financial instruments comprise equities and other investments, cash balances, loans and debtors and creditors that arise directly from its operations; for example, in respect of sales and purchases awaiting settlement, and debtors for accrued income.
	The Board has delegated the risk management function to ASFML under the terms of its management agreement with ASFML (further details of which are included under note 4 and in the Directors' Report) however, it remains responsible for the risk and control framework and operation of third parties. The Board regularly reviews and agrees policies for managing each of the key financial risks identified with the Manager. The types of risk and the Manager's approach to the management of each type of risk, are summarised below. Such approach has been applied throughout the year and has not changed since the previous accounting period. The numerical disclosures exclude short-term debtors and creditors.
	Risk management framework
	The directors of ASFML collectively assume responsibility for ASFML's obligations under the AIFMD including reviewing investment performance and monitoring the Company's risk profile during the year.
	ASFML is a fully integrated member of the Standard Life Aberdeen Group, which provides a variety of services and support to ASFML in the conduct of its business activities, including in the oversight of the risk management framework for the Company. The AIFM has delegated the day to day administration of the investment policy to Aberdeen Standard Investments (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). The AIFM has retained responsibility for monitoring and oversight of investment performance, product risk and regulatory and operational risk for the Company.
	The Group's Internal Audit Department is independent of the Risk Division and reports directly to the Group CEO and to the Audit Committee of the Group's Board of Directors. The Internal Audit Department is responsible for providing an independent assessment of the Group's control environment.
	The Manager conducts its risk oversight function through the operation of the Group's risk management processes and systems which are embedded within the Group's operations. The Group's Risk Division supports management in the identification and mitigation of risks and provides independent monitoring of the business. The Division includes Compliance, Business Risk, Market Risk, Risk Management and Legal. The team is headed up by the Group's Head of Risk, who reports to the CEO of the Group. The Risk Division achieves its objective through embedding the Risk Management Framework throughout the organisation using the Group's operational risk management system ("SHIELD").
	The Group's corporate governance structure is supported by several committees to assist the board of directors, its subsidiaries and the Company to fulfil their roles and responsibilities. The Group's Risk Division is represented on all committees, with the exception of those committees that deal with investment recommendations. The specific goals and guidelines on the functioning of those committees are described in the committees' terms of reference.
	Risk management
	The main risks the Company faces from these financial instruments are (i) market risk (comprising interest rate, foreign currency and other price risk), (ii) liquidity risk and (iii) credit risk.
	Market risk
	The fair value of or future cash flows from a financial instrument held by the Company may fluctuate because of changes in market prices. This market risk comprises three elements - interest rate risk, currency risk and other price risk.
	Interest rate risk
	Interest rate movements may affect:
	- the level of income receivable on cash deposits;
	- valuation of debt securities in the portfolio.
	Management of the risk
	The possible effects on fair value and cash flows that could arise as a result of changes in interest rates are taken into account when making investment and borrowing decisions. When drawn down, interest rates are fixed on borrowings.
	Interest rate risk profile
	The interest rate risk profile of the Company's financial assets and liabilities, excluding equity holdings which are all non-interest bearing, at the reporting date was as follows:
			Weighted average				Weighted
			period for which				average			Fixed		Floating
			rate is fixed				interest rate			rate		rate
	At 31 July 2019		Years				%			£'000		£'000
	Assets
	Sterling		-				0.47			-		4,119
	Indian Rupee		-				-			-		5,749
	Pakistan Rupee		-				-			-		16
	Thailand Baht		-				-			-		4
	Vietnam Dong		-				-			-		170
	Taiwan Dollar		-				-			-		180
	New Zealand Dollar		-				-			-		1
			______				______			______		______
			-				-			-		10,239
			______				______			______		______
	Liabilities
	Short-term loan		0.86				2.5			10,198		-
	Short-term loan		0.06				3.1			10,209		-
	2.25% Convertible Unsecured Loan Stock 2025		5.77				3.1			35,499		-
			______				______			______		______
			-				-			55,906		-
			______				______			______		______
			Weighted average				Weighted
			period for which				average			Fixed		Floating
			rate is fixed				interest rate			rate		rate
	At 31 July 2018		Years				%			£'000		£'000
	Assets
	Sterling		-				0.22			-		9,329
	Indian Rupee		-				-			-		46
	Pakistan Rupee		-				-			-		19
	Thailand Baht		-				-			-		4
			______				______			______		______
			-				-			-		9,398
	Liabilities		______				______			______		______
	Short-term loan		1.95				2.5			9,506		-
	Short-term loan		0.06				2.9			7,623		-
	2.25% Convertible Unsecured Loan Stock 2025		6.83				2.3			35,209		-
			______				______			______		______
			-				-			52,338		-
			______				______			______		______
	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 interest payable, weighted by the value of the loan. Details of the Company's loan are shown in note 12 to the financial statements.
	The floating rate assets consist of cash deposits on call earning interest at prevailing market rates.
	The Company's equity portfolio and short term debtors and creditors (excluding bank loans) have been excluded from the above tables.
	Interest rate sensitivity
	Movements in interest rates would not significantly affect net assets attributable to the Company's shareholders and total return.
	Foreign currency risk
	Most of the Company's investment portfolio is invested in overseas securities and the Statement of Financial Position, therefore, can be significantly affected by movements in foreign exchange rates.
	Management of the risk
	It is not the Company's policy to hedge this risk on a continuing basis but the Company may, from time to time, match specific overseas investment with foreign currency borrowings.
	The revenue account is subject to currency fluctuations arising on dividends receivable in foreign currencies and, indirectly, due to the impact of foreign exchange rates upon the profits of investee companies. It is not the Company's policy to hedge this currency risk but the Board keeps under review the currency returns in both capital and income.
	Foreign currency risk exposure by currency of denomination:
		31 July 2019							31 July 2018
			Net monetary			Total					Net monetary	Total
		Overseas	assets/			currency			Overseas		assets/	currency
		investments	(liabilities)			exposure			Investments		(liabilities)	exposure
		£'000	£'000			£'000			£'000		£'000	£'000
	Australian Dollar	9,938	-			9,938			8,323		-	8,323
	Danish Krona	8,083	-			8,083			9,104		-	9,104
	Hong Kong Dollar	60,095	-			60,095			65,327		-	65,327
	Indian Rupee	69,584	5,749			75,333			67,173		46	67,219
	Indonesian Rupiah	37,929	-			37,929			37,495		-	37,495
	Korean Won	13,702	-			13,702			5,443		-	5,443
	Malaysian Ringgit	52,448	-			52,448			66,986		-	66,986
	Taiwan Dollar	19,442	180			19,622			11,770		-	11,770
	New Zealand Dollar	17,619	-			17,619			17,265		-	17,265
	Pakistan Rupee	980	16			996			3,940		19	3,959
	Philippine Peso	28,150	-			28,150			28,644		-	28,644
	Singapore Dollar	52,787	-			52,787			54,798		-	54,798
	Sri Lankan Rupee	18,360	-			18,360			14,376		-	14,376
	Thailand Baht	72,939	4			72,943			72,711		4	72,715
	United States Dollar	-	(20,407)			(20,407)			-		(17,129)	(17,129)
	Vietnamese Dong	10,616	170			10,786			-		-	-
		______	______			______			______		______	______
		472,672	(14,288)			458,384			463,355		(17,060)	446,295
	Sterling	12,037	(31,379)			(19,342)			12,742		(25,880)	(13,138)
		______	______			______			______		______	______
	Total	484,709	(45,667)			439,042			476,097		(42,940)	433,157
		______	______			______			______		______	______
	Foreign currency sensitivity
	The Company's foreign currency financial instruments are in the form of equity investments, fixed interest investments and bank loans. The sensitivity of the former has been included within other price risk sensitivity analysis so as to show the overall level of exposure. The sensitivity of the fixed interest investments and bank loans has been included within interest rate sensitivity above. Based upon exchange rates at the Statement of Financial Position date, a 10% increase in Sterling would result in a decrease in the value of the United States Dollar bank loan of £1,515,000 (2018 - £1,187,000) and a 10% decrease in Sterling would result in an increase in the value of the United States Dollar bank loan of £1,852,000 (2018 - £1,451,000). Due consideration is paid to foreign currency risk throughout the investment process.
	Other price risk
	Other price risks (ie changes in market prices other than those arising from interest rate or currency risk) may affect the value of the quoted investments.
	Investment in Far East equities or those of companies that derive significant revenue or profit from the Far East involves a greater degree of risk than that usually associated with investment in the securities in major securities markets. The securities that the Company owns may be considered speculative because of this higher degree of risk. It is the Board's policy to hold an appropriate spread of investments in the portfolio in order to reduce the risk arising from factors specific to a particular country or sector. Both the allocation of assets and the stock selection process, as detailed on page 77 of the printed Annual Report, act to reduce market risk. The Manager actively monitors market prices throughout the year and reports to the Board, which meets regularly in order to review investment strategy. The investments held by the Company are listed on various stock exchanges worldwide.
	Other price risk sensitivity
	If market prices at the reporting date had been 10% (2018 - 10%) higher or lower while all other variables remained constant, the return attributable to Ordinary shareholders for the year ended 31 July 2019 would have increased/(decreased) by £48,471,000 (2018 - increased/(decreased) by £47,610,000) and equity reserves would have increased/(decreased) by the same amount.
	Liquidity risk
	This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities.
	Management of the risk
	The Board imposes borrowing limits to ensure gearing levels are appropriate to market conditions and reviews these on a regular basis. Gearing comprises both bank loans and convertible unsecured loan stock. The Board has imposed a maximum gearing level, measured on the most stringent basis of calculation after netting off cash equivalents, of 25%. Details of borrowings at the 31 July 2019 are shown in notes 12 and 13 of the printed Annual Report.
	Liquidity risk is not considered to be significant as the Company's assets comprise mainly readily realisable securities, which can be sold to meet funding commitments if necessary. Short-term flexibility is achieved through the use of a loan facility, details of which can be found in note 12. Under the terms of the loan facility, the Manager provides the lender with loan covenant reports on a monthly basis, to provide the lender with assurance that the terms of the facility are not being breached. The Manager will also review the credit rating of a lender on a regular basis. Details of the Board's policy on gearing are shown in the investment policy section on page 3 of the printed Annual Report.
	Liquidity risk exposure
	At 31 July 2019 the Company had borrowings in the form of the £36,945,000 (2018 - £37,000,000) nominal of 2.25% Convertible Unsecured Loan Stock 2025.
	At 31 July 2019 the Company's term bank loan, amounting to £10,198,000 (2018 - £9,506,000; repayment date 8 June 2020), was due for repayment on 8 June 2020. In addition, the Company's rolling bank loan, amounting to £10,209,000 (2018 - £7,623,000), was due for repayment on 23 August 2019. The maximum exposure during the year was £20,407,000 (2018 - £17,152,000) and the minimum exposure during the year was £17,233,000 (2018 - £9,283,000).
	The maturity profile of the Company's existing borrowings is set out below.
											Due
									Due		between
					Expected				within		3 months	Due after
					cashflows				3 months		and 1 year	1 year
					£'000				£'000		£'000	£'000
	2.25% Convertible Unsecured Loan Stock 2025				41,179				-		831	40,348
	Short-term loan				10,238				10,238		-	-
	Short-term loan				12,759				65		12,694	-
					______				______		______	______
					64,176				10,303		13,525	40,348
					______				______		______	______
	Credit risk
	This is the risk of failure of the counterparty to a transaction to discharge its obligations under that transaction that could result in the Company suffering a loss.
	Management of the risk
	Investment transactions are carried out with a large number of brokers, whose credit-standing is reviewed periodically by the Investment Manager, and limits are set on the amount that may be due from any one broker. Settlement of investment transactions are also done on a delivery versus payment basis;
	-       the risk of counterparty exposure due to failed trades causing a loss to the Company is mitigated by the review of failed trade reports on a monthly basis. In addition, the third party administrator carries out a stock reconciliation to Custodian records on a monthly basis to ensure discrepancies are picked up on a timely basis. The Manager's compliance department carries out periodic reviews of the Custodian's operations and reports its finding to the Manager's risk management committee. This review will also include checks on the maintenance and security of investments held; and
	-       cash is held only with reputable banks with high quality external credit ratings.
	It is the Manager's policy to trade only with A- and above (Long Term rated) and A-1/P-1 (Short Term rated) counterparties.
	None of the Company's financial assets is secured by collateral or other credit enhancements.
	Credit risk exposure
	In summary, compared to the amounts in the Statement of Financial Position, the maximum exposure to credit risk at 31 July was as follows:
				2019							2018
				Statement							Statement
				of Financial				Maximum			of Financial	Maximum
				Position				exposure			Position	exposure
	Current assets			£'000				£'000			£'000	£'000
	Debtors			3,617				3,617			3,037	3,037
	Cash and short term deposits			10,239				10,239			9,398	9,398
				______				______			______	______
				13,856				13,856			12,435	12,435
				______				______			______	______
	None of the Company's financial assets is past due or impaired.
	Fair values of financial assets and financial liabilities
	Investments held at fair value through profit or loss are valued at their quoted bid prices which equate to their fair values. The Directors are of the opinion that the other financial assets and liabilities, excluding CULS which are held at amortised cost, are stated at fair value in the Statement of Financial Position and considered that this approximates to the carrying amount.

19.	Fair value hierarchy
	FRS 102 requires an entity to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements.
	Level 1: unadjusted quoted prices in an active market for identical assets or liabilities that the entity can access at the measurement date.
	Level 2: inputs other than quoted prices included within Level 1 that are observable (ie developed using market data) for the asset or liability, either directly or indirectly.
	Level 3: inputs are unobservable (ie for which market data is unavailable) for the asset or liability.
	The financial assets measured at fair value in the Statement of Financial Position are grouped into the fair value hierarchy at 31 July 2019 as follows:
			Level 1	Level 2	Level 3	Total
	As at 31 July 2019	Note	£'000	£'000	£'000	£'000
	Financial assets and liabilities at fair value through profit or loss
	Quoted equities	a)	484,709	-	-	484,709
			______	______	______	______
	Net fair value		484,709	-	-	484,709
			______	______	______	______
			Level 1	Level 2	Level 3	Total
	As at 31 July 2018	Note	£'000	£'000	£'000	£'000
	Financial assets and liabilities at fair value through profit or loss
	Quoted equities	a)	476,097	-	-	476,097
			______	______	______	______
	Net fair value		476,097	-	-	476,097
			______	______	______	______
	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.
	The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the return to shareholders through the optimisation of the debt (comprising bank borrowings and CULS) and equity balance.
	The Company's capital comprises the following:
					2019	2018
					£'000	£'000
	Equity
	Equity share capital				10,430	10,429
	Reserves				430,580	423,277
	Liabilities
	Bank loans				20,407	17,129
	CULS				35,499	35,209
					______	______
					496,916	486,044
					______	______
	The Board's policy is to utilise gearing when the Manager believes it appropriate to do so, up to a maximum of 25% geared at the time of drawdown. Gearing for this purpose is defined as the excess amount above shareholders' funds of total assets (including net current assets/liabilities) less cash/cash equivalents, expressed as a percentage of the shareholders' funds. If the amount so calculated is negative, this is shown as a 'net cash' position.
					2019	2018
					£'000	£'000
	Investments at fair value through profit or loss				484,709	476,097
	Current assets excluding cash and cash equivalents				1,550	1,185
	Current liabilities excluding bank loans				(1,649)	(2,488)
					______	______
					484,610	474,794
					______	______
	Net assets				441,010	433,706
					______	______
	Gearing (%)				9.9	9.5
					______	______
	The Board monitors and reviews the broad structure of the Company's capital on an ongoing basis. The review includes:
	- the planned level of gearing which takes account of the Manager's views on the market;
	- the level of equity shares in issue;
	- the extent to which revenue in excess of that which is required to be distributed should be retained.
	The Company's objectives, policies and processes for managing capital are unchanged from the preceding accounting period.
	The Company does not have any externally imposed capital requirements.

ALTERNATIVE PERFORMANCE MEASURES
Total return
	Dividend		Share
2019	rate	NAV	price
31 July 2018	N/A	1,231.90p	1,050.00p
20 December 2018	17.00p	1,159.30p	1,000.00p
31 July 2019	N/A	1,300.56p	1,150.00p
		______	______
Total return		+7.1%	+11.4%
		______	______
	Dividend		Share
2018	rate	NAV	price
31 July 2017	N/A	1,192.49p	1,062.00p
2 November 2017	16.00p	1,273.76p	1,065.00p
31 July 2018	N/A	1,231.90p	1,050.00p
		______	______
Total return		+4.6%	+0.4%
		______	______
Discount to net asset value per Ordinary share
The difference between the share price of 1,150.00p (31 July 2018 - 1,050.00p) and the net asset value per Ordinary share of 1,300.56p (31 July 2018 - 1,231.83p) expressed as a percentage of the net asset value per Ordinary share.
Dividend cover
Revenue return per share of 21.64p (2018 - 19.27p) divided by dividends declared for the year per share of 19.00p (2018 - 17.00p) expressed as a ratio.
Net gearing
Net gearing measures the total borrowings of £55,906,000 (31 July 2018 - £52,338,000) less cash and cash equivalents of £12,306,00 (31 July 2018 - £11,250,000) divided by shareholders' funds of £441,010,000 (31 July 2018 - £433,706,000), expressed as a percentage. Under AIC reporting guidance cash and cash equivalents includes amounts due and to brokers at the year end as well as cash and cash equivalents. These balances can be found in notes 11 and 12 on page 62 of the printed Annual Report.
Ongoing charges
Ongoing charges is considered to be an alternative performance measure. The ongoing charges ratio has been calculated in accordance with guidance issued by the AIC as the total of investment management fees and administrative expenses and expressed as a percentage of the average net asset values with debt at fair value throughout the year.
			2019
Investment management fees (£'000)			3,711
Administrative expenses (£'000)			1,091
Less: non-recurring charges (£'000)			(3)
			______
Ongoing charges (£'000)			4,799
			______
Average net assets (£'000)			412,437
			______
Ongoing charges ratio			1.16%
			______
The ongoing charges ratio provided in the Company's Key Information Document is calculated in line with the PRIIPs regulations.

The Annual General Meeting will be held at 11.30 a.m. on 4 December 2019 at Bow Bells House, 1 Bread Street, London EC4M 9HH.

Please note that past performance is not necessarily a guide to the future and that the value of investments and the income from them may fall as well as rise and may be affected by exchange rate movements. Investors may not get back the amount they originally invested.

The Annual Financial Report Announcement is not the Company's statutory accounts. The above results for the year ended 31 July 2019 are an abridged version of the Company's full financial statements, which have been approved and audited with an unqualified report. The 2018 and 2019 statutory accounts received unqualified reports from the Company's auditors and did not include any reference to matters to which the auditors drew attention by way of emphasis without qualifying the reports, and did not contain a statement under s.498(2) or 498(3) of the Companies Act 2006.  The financial information for 2018 is derived from the statutory accounts for 2018 which have been delivered to the Registrar of Companies. The 2019 financial statements will be filed with the Registrar of Companies in due course.

The audited Annual Report and financial statements will be posted to shareholders in November. Copies may be obtained during normal business hours from the Company's Registered Office, Bow Bells House, 1 Bread Street, London EC4M 9HH or from the Company's website, asia-focus.co.uk*

* Neither the content of the Company's website nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is (or is deemed to be) incorporated into, or forms (or is deemed to form) part of this announcement.

By Order of the Board

Aberdeen Asset Management PLC

Secretary

29 October 2019

 

END

 

 

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