Abrdn Asiafocus Regulatory News (AAS)

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

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:

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.

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

PERFORMANCE (TOTAL RETURN)

DIVIDENDS

Ten Year Financial Record

INVESTMENT PORTFOLIO

As at 31 July 2019

Investment Portfolio - Ten Largest Investments

Investment Portfolio - Other Investments

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):

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:

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.

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:

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:

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.

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

STATEMENT OF FINANCIAL POSITION

STATEMENT OF CHANGES IN EQUITY

STATEMENT OF CASHFLOWS