Abrdn Asiafocus Regulatory News (AAS)

ABERDEEN STANDARD ASIA FOCUS PLC

Legal Entity Identifier (LEI): 5493000FBZP1J92OQY70

ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 31 JULY 2020

STRATEGIC REPORT - COMPANY SUMMARY AND FINANCIAL HIGHLIGHTS

Financial Highlights

STRATEGIC REPORT - CHAIRMAN'S STATEMENT

Results

The last twelve months has, to say the least, been fraught and eventful. Equity markets worldwide faced a raft of macroeconomic and geopolitical challenges, with a global public health crisis thrown in for good measure. In this tumultuous environment, your Company's net asset value (NAV) fell by 13.6% in sterling terms and its share price by a similar 13.2%. In comparison, the MSCI Asia Pacific ex-Japan Small Cap Index declined by 2.5%. The decline in NAV was compounded by the gearing of the portfolio during the period, with the level of borrowings accentuating the fall, much the same as it has amplified the rebound from the lows of March.

Sentiment and liquidity, rather than fundamentals, have been the key drivers of equity markets, as investors vacillated between fears of an economic crisis caused by the pandemic and optimism resulting from unrivalled monetary and fiscal support worldwide. As a consequence, investors' interests have been focused on the upper end of the equity universe by market capitalisation. Small companies have, therefore, generally suffered from neglect. For your Company, its policy of investing in companies valued at US$1.5 billion or below, places it towards the even more overlooked lower end of the small-cap universe, where the negative impact was amplified. These smaller holdings suffered as defensive investors turned more risk averse amid the volatility.

Although both frustrating and disappointing from a performance perspective for the period under review, there is hope looking further ahead. Many of the companies your Manager is investing in today are better valued, with convincing long-term prospects underpinned by strong balance sheets. I believe, as your Manager does, that these holdings are poised for a recovery when the pandemic ends. On top of that, increased volatility in stock markets has given rise to new investment opportunities and your Manager has been active in adding new ideas to the portfolio, positioning it so that it is primed for a turnaround and sustainable long-term growth. Encouragingly, many of these new holdings have been the best-performing stocks in the portfolio over the past year.

Overview

While the Covid-19 pandemic and its fallout dominated the market narrative over the latter half of the period, it is easy to forget that small-cap equities started the period on the back foot. The push and pull of US-China trade tensions over the previous year had hampered the asset class, as many of these Asian smaller companies are plugged into the global supply chain that relies heavily on international trade. The signing of an initial trade deal between the two economic behemoths brought brief respite at the start of 2020. But this was short lived as the rapid spread of Covid-19 sent markets into a tailspin. After initial lockdowns proved effective, share prices rose again, underpinned largely by the massive monetary and fiscal largesse of central banks and governments worldwide.

In the wake of the pandemic, markets have behaved rather atypically - China, usually more volatile, proved resilient, thanks to its effective but draconian handling of the pandemic that allowed an earlier re-opening of its economy compared to the rest of the region. Not only that, but China benefited from its large domestic consumer base that was spurred on by Beijing's ample stimulus. This meant that the portfolio's lower exposure to China was a disadvantage. In contrast, markets that were supposed to be more stable, such as Australia, Hong Kong, and Singapore, suffered large corrections. With international trade and travel interrupted, many of these open economies stumbled. Similarly, our larger-than-benchmark exposure to Thailand , heavily dependent on exports and tourism, also hurt.

Given these tectonic shifts, your Manager has been re-evaluating the portfolio's composition. Among the changes made were the divestment of a number of underlying holdings and reductions in positions in India, Indonesia and Thailand. Traditionally, India is a major component of the portfolio because it offers a dynamic range of small, quality companies that benefit from its large domestic market, and ranks well in corporate governance terms. However, India has not been able to get the virus under control as effectively as China, delaying a resumption in business activity with clear economic and social costs. While Covid-19 has brought unprecedented challenges to certain countries and sectors, your Manager's disciplined, bottom-up stock-picking approach, concentrating on business resilience, is a source of comfort, with none of your Company's underlying holdings under existential threat as a result of the crisis. We have seen how the pandemic has accelerated the adoption of technology by both businesses and individuals as they adapt to the lockdowns. This has resulted in a surge in demand for data, stemming from video conferencing, online shopping, working from home and e-entertainment needs. Your Manager has been shrewd in nurturing a number of growth-oriented companies, particularly in the information technology and e-commerce sectors, such as AEM Holdings, MoMo.com and Park Systems. The addition of technology firm Affle India and biotech company Syngene International over the period also bore fruit, showing that the strategy to include these new-economy growth stocks to complement the Trust's long-held traditional businesses was prudent. While valuations generally tend to be dearer for such growth stocks, your Manager is optimistic about their prospects and expects further market upheaval to present opportunities to pick up bargains when valuations become attractive.

On the flipside, more traditional businesses held within the Company in the financials and consumer discretionary space have naturally suffered, while the Trust's relatively lighter exposure to North Asian markets like China and Korea proved to be a disadvantage, given those countries' better handling of the pandemic and greater flexibility to boost spending to support their citizens. During the period, your Manager sold a number of holdings with either a dimmer growth outlook or where valuations appeared full, albeit only one was as a direct response to Covid-19. Specifics of the Trust's performance will be dealt with in detail in the Manager's report.

Your Manager focuses on market-leading companies, with healthy balance sheets, led by prudent management who generate sustainable earnings. This has resulted in a portfolio more balanced in its exposures. To some degree, the domestic focus of these small companies insulated them from external shocks, such as the impact felt by the oil and gas sector in the face of an unstable pricing environment, caused by the sudden plunge in demand and exacerbated by a resurgence of geopolitical tension. Hong Kong is worth mentioning, since your Company has significant exposure there, albeit a large part of the underlying business activities of these investments is with China. The former British colony faces heavy pressure from the US spilling over from America's ongoing trade tiff with the mainland. Insult was added to injury when the US revoked Hong Kong's special trade status in response to Beijing's new national security law that curtailed the territory's autonomy. More recently, goods made in Hong Kong have to be re-labeled "Made in China", subjecting them to further trade rules that are likely to hobble companies operating there. Your Manager continues to keep a close watch on these developments.

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 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 14.5p per share (2019 14.0p) representing an increase of 3.6% and a special dividend of 4.5p per share (2019 5.0p). 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 1 December 2020, both dividends will be paid on 9 December 2020 to shareholders on the register on 13 November 2020.

The Board is conscious that the majority of the Company's investee companies had already earned and paid their 2020 distributions by the time that the Covid-19 pandemic took hold in early 2020 and therefore the Board intends to monitor carefully receipts for the remainder of the current year and stands ready to use the significant brought forward revenue reserves if required to smooth out any short term impact of the pandemic on earnings.

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 two year multicurrency revolving loan facility with The Royal Bank of Scotland International Limited, London Branch (the "Loan Facility"). Under the Loan Facility £11.2 million was drawn down at the year end. The level of gearing is managed actively and at the time of writing drawings amounted to £11.2 million representing net gearing of 10.1%.

The Board believes that it is in the long-term interest of the Ordinary shareholders to take advantage of the current low interest rates prevailing in today's market to extend, and secure, the Company's debt profile beyond the CULS redemption date. Accordingly, on 20 October 2020 the Board announced that it has agreed terms (through the acceptance of a conditional offer that is subject to diligence and agreement of legal documentation) to extend and secure the Company's long-term borrowings through the issuance of a £30 million 15 year Senior Unsecured Loan Note (the "Loan Note") at an annualised interest rate of 3.05%. The Loan Note will be unsecured, unlisted and denominated in sterling. The Loan Note shall rank pari passu with the Company's other unsecured and unsubordinated financial indebtedness. The Company intends to use the proceeds of the Loan Note to repay, and cancel in full, the Company's Loan Facility. The remainder will be available for the Company's Manager to invest on behalf of the Company. The new Loan Note will provide the Manager with greater flexibility and additional cash resources to take advantage of investment opportunities that are expected to arise over the coming period.

Under the terms of the Loan Note up to an additional £35 million will also be available for drawdown by the Company for a five-year period. The Board's current intention would be to only draw this down to repay any of the Company's existing Convertible Unsecured Loan Stock, either at their redemption in 2025, or before. This will be kept under review. The minimum drawdown would be in tranches of £10m and the exact terms of such borrowing would be agreed at the time of drawdown. The Company will pay no fees on this facility, other than minimal legal fees.

During the year the Company purchased for treasury 1,484,256 Ordinary shares at a discount to the prevailing NAV (exclusive of income). Subsequent to the period end a further 487,500 Ordinary shares have been purchased into treasury. Share buy backs can provide liquidity to the market and reduce the volatility of any discount as well as modestly enhancing the NAV for shareholders.

Annual General Meeting

The Board has been considering how best to deal with the potential impact of the Covid-19 pandemic on arrangements for the Company's AGM. The Company is required by law to hold an AGM and the Board had been working on the basis that the Company's AGM would be held in its usual format on 1 December 2020 as previously scheduled. Given the possibility that some measure of restriction on public gatherings and maintaining social distancing may remain in place in December, the Board has resolved to amend the format of the AGM for this year. Therefore, whilst the formal business of the AGM will be considered, the meeting will be functional only, and will follow the minimum legal requirements for an AGM. There will be no physical presentation from the investment managers and no refreshments will be offered, I am sorry to say. If the guidance on public gatherings remains in place in December, shareholders are strongly discouraged from attending the meeting and indeed entry may be refused if the law and/or Government guidance so requires. In such circumstances, arrangements will be made by the Company to ensure that the minimum number of shareholders required to form a quorum will attend the meeting in order that the meeting may proceed and the business concluded. The Board considers these revised arrangements to be in the best interests of shareholders in the current circumstances.

A presentation from the Investment Manager, along with the AGM results, will be made available to shareholders on the Company's website shortly after the AGM.

In light of the pandemic and the revised format of this year's meeting, shareholders are encouraged to raise any questions in advance of the AGM with the Company Secretary at Asia.Focus@aberdeen-asset.com. Questions must be received by 5.00pm on 27 November 2020. Any questions received will be replied to by either the Manager or Board via the Company Secretary.

Given the evolving government guidance on Covid-19, the Company will continue to keep arrangements for the AGM under review and it is possible the arrangements will need to change. We will keep shareholders updated of any changes through the Company's website (asia-focus.co.uk) and announcements to the London Stock Exchange. We trust that shareholders will be understanding of this approach.

The Board strongly encourages all shareholders to exercise their votes in respect of the meeting in advance by completing the enclosed form of proxy, or letter of direction for those who hold shares through the Aberdeen Standard Investments savings plans. This should ensure that your votes are registered in the event that physical attendance at the AGM is not possible or restricted. Further details on how to attend and vote at Company Meetings for holders of shares via other share plans and platforms can be found on the AIC's website at: theaic.co.uk/aic/shareholder-voting-consumer-platforms.

In addition to the usual ordinary business being proposed at the AGM, as special business the Board is seeking to renew the authority to issue new shares and sell treasury shares for cash at a premium without pre-emption rules applying and to renew the authority to buy back shares and either hold them in treasury for future resale (at a premium to the prevailing NAV per share) or cancel them.

Directorate

As part of the previously advised process of succession planning Haruko Fukuda retired from the Board on 31 March 2020 and I would like to reiterate our thanks to her for her very significant contribution to the Company since 2003. On 3 June 2020 Krishna Shanmuganathan joined the Board as an independent non executive Director. He founded Scylax Partners in 2016 and prior to that was managing partner at Hakluyt & Company (Asia), a risk advisory company, having established and led the Asia Pacific offices of the firm, based in Singapore. Before that Krish held research and analyst roles at Fidelity International and Cambridge Associates after a successful and varied career in the Foreign & Commonwealth Office. He holds a number of other non-executive appointments including being on the advisory board of Serendipity Capital, chairman of the trustees of St Jude India ChildCare Centres UK and a trustee of Solefield School Educational Trust.

Finally, following his recent appointment as Chairman of Mondi plc, and after six years on the Board, Philip Yea has decided to retire from the Company's Board at the AGM on 1 December 2020. I would like to take this opportunity to thank him very much, on behalf of both the Board and shareholders, for his significant contribution as a Director since his appointment in 2014 and latterly for his expert guidance as Audit Committee Chairman. With effect from the conclusion of the December 2020 Annual General Meeting Debby Guthrie will become Chair of the Audit Committee and Martin Gilbert has agreed to become a member of the Audit Committee.

Audit Tender

In line with best practice, during the year the Audit Committee conducted a tender for independent audit services. Following a detailed interview process the Board has accepted the Audit Committee's recommendation to appoint PricewaterhouseCoopers LLP ("PwC") as auditor to the Company. A shareholder resolution to approve the appointment and authorise the Directors to agree the new auditor's remuneration will be put to shareholders at the forthcoming AGM. The Board would like to place on record its thanks to EY for the audit services that it has provided to the Company since its launch in 1995.

Outlook

While we believe strongly in the longer-term potential of Asian smaller companies, we are cautious about the overall recovery for regional stocks in the short term, especially in light of a resurgence of Covid-19 infections. Countries, such as Thailand and India, have been harder hit. While Thailand has contained the spread of the virus, its tourism and export-led economy faces a longer road to recovery. In comparison, fresh infections in India continue to accelerate, which risk further eroding both its economy, as well as confidence in the stock market. For the asset class as a whole, pandemic-related issues, such as rising joblessness, are likely to hinder a pick-up in consumer spending while heightening the potential for more bankruptcies. These risks will weigh on corporate earnings, which in turn, will dampen shareholder returns. Having said that, dividend yields in Asia appear more resilient than other regions. The Company's holdings also benefit from further insulation, as a result of their balance-sheet strength, as well as their market leadership.

While markets are buoyed by the ample support provided by governments and central banks to boost growth through targeted schemes and interest rate cuts, this has driven certain asset prices higher, albeit at an unequal pace. For equity markets in particular, the beneficiaries have been the larger companies and internet plays. However, it would be prudent to remember the eventual burden these measures place on their respective economies and that market trends can be ephemeral. With this in mind, your Manager continues to favour high-quality smaller companies that are hitched to Asia's dynamic growth themes. Over the longer term, these remain undimmed despite the pandemic. Such structural trends include greater demand for healthcare, technological advancements, and shifting consumption patterns, especially online shopping. Asia continues to have one of the highest growth rates globally and a wealth of financially responsible corporates. Your Manager will therefore continue to use its on-the-ground advantage to stay focused on holding companies with healthy fundamentals that should uphold the Trust's sturdy track record of delivering sustainable returns in the longer term.

Nigel Cayzer,Chairman28 October 2020

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 envisage no 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 94 of the published Annual Report and financial statements for the year ended 31 July 2020. A comprehensive analysis of the Company's portfolio is disclosed below 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 63 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.

Promoting the Company's Success

In accordance with corporate governance best practice, the Board is now required to describe to the Company's shareholders how the Directors have discharged their duties and responsibilities over the course of the financial year following the guidelines set out under section 172 (1) of the Companies Act 2006 (the "s172 Statement"). This Statement, from 'Promoting the Success of the Company' to "Long Term Investment" below, provides an explanation of how the Directors have promoted the success of the Company for the benefit of its members as a whole, taking into account the likely long term consequences of decisions, the need to foster relationships with all stakeholders and the impact of the Company's operations on the environment.

The purpose of the Company is to act as a vehicle to provide, over time, financial returns to its shareholders. The Company's Investment Objective is disclosed in the Strategic Report. The activities of the Company are overseen by the Board of Directors of the Company.

The Board's philosophy is that the Company should operate in a transparent culture where all parties are treated with respect and provided with the opportunity to offer practical challenge and participate in positive debate which is focused on the aim of achieving the expectations of shareholders and other stakeholders alike. The Board reviews the culture and manner in which the Manager operates at its regular meetings and receives regular reporting and feedback from the other key service providers.

Investment trusts, such as the Company, are long-term investment vehicles, with a recommended holding period of five or more years. Typically, investment trusts are externally managed, have no employees, and are overseen by an independent non-executive board of directors. Your Company's Board of Directors sets the investment mandate, monitors the performance of all service providers (including the Manager) and is responsible for reviewing strategy on a regular basis. All this is done with the aim of preserving and, indeed, enhancing shareholder value over the longer term.

Stakeholders

The Company's main stakeholders have been identified as its shareholders, the Manager (and Investment Manager), service providers, investee companies and debt providers. More broadly, the environment and community at large are also stakeholders in the Company.

Shareholders

The following table describes some of the ways we engage with our shareholders:

The Manager

The key service provider for the Company is the Alternative Investment Fund Manager and the performance of the Manager is reviewed in detail at each Board meeting. The Manager's investment process is outlined on page 94 of the published Annual Report and financial statements for the year ended 31 July 2020 and further information about the Manager is given on page 93 of the published Annual Report and financial statements for the year ended 31 July 2020. Shareholders are key stakeholders in the Company - they are looking to the Manager to achieve the investment objective over time and to deliver a regular growing income together with some capital growth. The Board is available to meet at least annually with shareholders at the Annual General Meeting and this includes informal meetings with them over lunch following the formal business of the AGM. This is seen as a very useful opportunity to understand the needs and views of the shareholders. In between AGMs, the Directors and Manager also conduct programmes of investor meetings with larger institutional, private wealth and other shareholders to ensure that the Company is meeting their needs. Such regular meetings may take the form of joint presentations with the Investment Manager or meetings directly with a Director where any matters of concern may be raised directly.

Other Service Providers

The other key stakeholder group is that of the Company's third party service providers. The Board is responsible for selecting the most appropriate outsourced service providers and monitoring the relationships with these suppliers regularly in order to ensure a constructive working relationship. Our service providers look to the Company to provide them with a clear understanding of the Company's needs in order that those requirements can be delivered efficiently and fairly. The Board, via the Management Engagement Committee, ensures that the arrangements with service providers are reviewed at least annually in detail. The aim is to ensure that contractual arrangements remain in line with best practice, services being offered meet the requirements and needs of the Company and performance is in line with the expectations of the Board, Manager, Investment Manager and other relevant stakeholders. Reviews include those of the Company's depositary and custodian, share registrar, broker and auditor.

Principal Decisions

Pursuant to the Board's aim of promoting the long term success of the Company, the following principal decisions have been taken during the year:

Portfolio 

The Investment Manager's Review details the key investment decisions taken during the year and subsequently. The Investment Manager has continued to monitor the investment portfolio throughout the year under the supervision of the Board. A list of the key portfolio changes can be found in the Investment Manager's Report.

Gearing 

The Company utilises gearing in the form of bank debt with the aim of enhancing shareholder returns over the longer term. On 5 June 2020, the Company entered into a new two year multicurrency revolving loan facility of £20 million with The Royal Bank of Scotland International Limited ("RBSI"), which replaced the Company's $25m loan facility with RBSI, which matured on 5 June 2020. £18.2 million was drawn down under the new loan facility and has been used to repay the maturing loan.

The Board has maintained its pro-active approach to gearing and subsequent to the year end has taken advantage of the current low interest rates prevailing in today's market to extend, and secure, the Company's debt profile beyond the CULS redemption date. Accordingly, on 20 October 2020 the Board announced that it has agreed terms (through the acceptance of a conditional offer that is subject to diligence and agreement of legal documentation) to extend and secure the Company's long-term borrowings through the issuance of a £30 million 15 year Senior Unsecured Loan Note (the "Loan Note") which will replace the facility provided by RBSI.

Share Buybacks 

During the year, the Board has continued to buy back Ordinary shares opportunistically in order to manage the discount by providing liquidity to the market.

Audit 

In accordance with best practice the Audit Committee conducted an audit tender to select a new independent auditor. Having established the needs of the Company, a number of audit firms were considered and a shortlist of firms was invited to tender. Following a detailed review and interview process, PricewaterhouseCoopers LLP has been selected and the new independent auditor's appointment is being proposed for approval by shareholders at the Annual General Meeting in December 2020.

Long Term Investment

The Investment Manager's investment process seeks to outperform over the longer term. The Board has in place the necessary procedures and processes to continue to promote the long term success of the Company. The Board will continue to monitor, evaluate and seek to improve these processes as the Company continues to grow over time, to ensure that the investment proposition is delivered to shareholders and other stakeholders in line with their expectations.

Key Performance Indicators (KPIs)

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

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 undertaken a robust review of the principal risks and uncertainties facing the Company including those that would threaten its business model, future performance, solvency or liquidity. Those principal risks are disclosed in the table below together with a description of the mitigating actions taken by the Board. The principal risks associated with an investment in the Company's Shares are published monthly on the Company's factsheet or they can be found in the pre-investment disclosure document published by the Manager, both of which are available on the Company's website.

The Board also has a process to consider emerging risks and if any of these are deemed to be significant these risks are categorised, rated and added to the risk matrix. Although the uncertainty surrounding the timing of Brexit has now abated, economic risk for the Company remains, in particular currency volatility may adversely affect the translation rates of future earnings from the portfolio following the expiry of the transitional arrangements in January 2021.

The Board notes that there are a number of contingent risks stemming from the Covid-19 pandemic that may impact the operation of the Company. These include investment risks surrounding the companies in the portfolio such as employee absence, reduced demand, reduced turnover and supply chain breakdowns. The Investment Manager will continue to review carefully the composition of the Company's portfolio and to be pro-active in taking investment decisions where necessary. Operationally, Covid-19 is also affecting the suppliers of services to the Company including the Manager, Investment Manager and other key third parties. To date these services have continued to be supplied seamlessly and the Board will continue to monitor arrangements in the form of regular updates from the Manager and Investment Manager. In all other respects, the Company's principal risks and uncertainties have not changed materially since the date of this Annual Report and are not expected to change materially for the current financial year.

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 2020, there were five male Directors and two female Directors on the Board.

Environmental, Social and Governance ("ESG") Engagement

Whilst the management of the Company's investments is not undertaken with any specific instructions to exclude certain asset types or classes, the Investment Manager embeds ESG into the research of each asset class as part of the investment process. ESG investment is about active engagement, with the goal of improving the performance of assets held around the world.

The Investment Manager aims to make the best possible investments for the Company, by understanding the whole picture of the investments - before, during and after an investment is made. That includes understanding the environmental, social and governance risks and opportunities they present - and how these could affect longer-term performance. Environmental, social and governance considerations underpin all investment activities. With 1,000+ investment professionals, the Investment Manager is able to take account of ESG factors in its company research, stock selection and portfolio construction - supported by more than 50 ESG specialists around the world.

Active Engagement

Through engagement and exercising voting rights, the Investment Manager, on behalf of the Company, actively works with companies to improve corporate standards, transparency and accountability. By making ESG central to its investment capabilities, the Investment Manager looks to deliver improved financial performance in the longer term as well as actively contributing to a fairer, more sustainable world.

The primary goal is to generate the best long-term outcomes for the Company in order to fulfil fiduciary responsibilities to the Company. The Investment Manager sees ESG factors as being financially material and impacting corporate performance. ESG factors put the 'long-term' in long-term investing. The Investment Manager focuses on understanding the ESG risks and opportunities of investments alongside other financial metrics to make better investment decisions. The Investment 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 clients' assets. Comprehensive assessment of ESG factors, combined with constructive company engagement, should lead to better long term performance for clients.

ESG 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, focusing upon the following factors:

· · The principal risks detailed in the Strategic Report;

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

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

· · The level of income generated by the Company;

· · The level of gearing and requirement to re-finance or repay existing facilities in 2022;

· · The liquidity of the Company's portfolio including the results of stress test analysis performed by the Manager under a wide number of market scenarios; 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 whilst the Investment Manager's views on the outlook for the portfolio are included in the Manager's Report.

Nigel Cayzer,

Chairman

28 October 2020

STRATEGIC REPORT - INVESTMENT MANAGER'S REVIEW

Overview

It was a tumultuous twelve months for financial markets, which ended the period lower. At first, stock prices retreated in the face of a slew of challenges, particularly rising trade friction between the world's two largest economies, the US and China, and the consequent threat to global economic growth. In the latter six months, markets continued to whipsaw between recession fears stemming from the Covid-19 pandemic, and hopes that the impact would be blunted by the unprecedented fiscal and monetary measures unleashed by governments and central banks.

Amid this fast-changing backdrop, your Company's net asset value (NAV) fell by 13.6% in the 12 months to July, compared to a decline of 2.5% in the MSCI Asia Pacific ex Japan Small Cap index.

While the portfolio's performance is disappointing, we would like to note that our focus has never been on what is in the benchmark, but rather on listed companies with a market value of US$1.5 billion at most, which is at the lower end of the Asia small cap index, thereby excluding a broad swathe of companies in China, given the size of that market. Although this smaller and less liquid segment of the market has not been the most popular with investors in recent years, the indiscriminate selloff during the pandemic saw the share prices of many good-quality companies drop to attractive levels. These firms are not as well-researched or followed by market participants, which provides opportunities for us to capitalise on. Our disciplined research process has allowed us to identify which of these companies to include in the portfolio.

Under these trying times, we have been evolving our strategy to ensure that your Company is well-positioned in a substantially changed world as a result of the far-reaching impact of Covid-19. For example, a key shift has been to add more growth-oriented businesses with intact earnings drivers. This decision has borne fruit, with the new, carefully-selected investments consistently among the Trust's top performers. This has helped your portfolio gain a more 'balanced' stance, through a combination of long-held companies in traditional, defensive industries, alongside those with bright prospects in 'new economy' sectors, including information technology. In the meantime, we have been vigilant in monitoring a number of promising names, with the intent of adding them to your portfolio when valuations turn compelling.

Portfolio Review and Activity

In the period under review, the portfolio's significant exposure to so-called 'old economy' sectors, such as industrials, consumer discretionary and financials, proved costly due to the impact of the widespread lockdowns on traditional businesses.

Hospitality holdings, such as Lemon Tree Hotels and Millennium & Copthorne Hotels (M&C), were among the casualties as the travel sector across the globe was decimated. Although India-based Lemon Tree Hotels' finances were improved by a capital injection from a major shareholder, the uncertainty of when local and international travel will return prompted an exit. As for M&C, its healthy cash pile and its hotels' prime locations should allow the New Zealand-listed group to weather the storm and emerge in a better position than peers.

Mounting levels of bad debt from businesses hit by Covid-19 meant that the earnings of lenders, such as Thailand's Aeon Thana Sinsap and Malaysia's Aeon Credit Service, were also inevitably affected. Nevertheless, we believe Aeon Thana's results should improve in the next few quarters as provisions set aside for non-performing loans recede amid the domestic economic recovery and as valuations have reached historical lows. Meanwhile, we think Aeon Credit's conservative approach to lending should help keep credit costs under control. We are fairly sanguine about its long-term growth prospects because private consumption, its key target market, remains relatively intact.

While many companies have found the going tough during the pandemic, others have emerged as winners. Notably, the technology sector has been a key beneficiary of the Covid-19 pandemic. As social distancing forced people to remain indoors, more of them began to rely on digital services including online payment systems, e-commerce and work-from-home solutions. From this perspective, the introduction of technology-related holdings to your Company's portfolio since 2018 has proven prescient.

Among these are Singapore-listed AEM Holdings, South Korea's Park Systems and Thailand's Hana Microelectronics. Their shares were buoyed by the momentum created by the surge in demand for equipment, such as laptops and smartphones. AEM's stock, particularly, has appreciated robustly since it was initiated. The company's exposure to global growth trends including 5G networks, fintech and artificial intelligence learning will help diversify its business, while its investments into talent and technology have given it a leg up over competitors. In Taiwan, leading online retailer MoMo.com Inc's share price rose by a similar magnitude as it benefited from homebound consumers turning to the internet to buy their daily necessities. With the advantages of limited competition and low rates of e-commerce penetration in the island, MoMo.com remains one of the Trust's core holdings. Elsewhere, Affle India, which we initiated during the year, was also able to tap on this shift to online shopping through its mobile-marketing platforms.

In the healthcare sector, the portfolio's holdings in Sanofi India and Syngene rallied, on optimism that the industry would benefit from greater awareness and increased spending on healthcare by governments and businesses as a result of Covid-19. We introduced the latter in 2020.

As part of the disciplined investment approach, we have been reassessing the investment theses of your Company's underlying holdings on an ongoing basis. We do this through diligent first-hand research and frequent engagement with the companies' management.

During the period, we divested some 10 holdings. Apart from Lemon Tree mentioned above, other notable exits include Hong Kong retailer Giordano. Despite its prudence in managing its balance sheet and returning cash to shareholders, the outlook for its business and for retailers with physical stores more broadly, remains challenging.

Elsewhere, we took advantage of share-price strength to divest Ramco Cements amid concerns about the stability of cement prices in South India due to intensifying competition and low utilisation rates. Others were sold because of waning confidence in their business outlook. They included Australia's Citadel Group and ARB Corporation, India's City Union Bank, Singapore's Straits Trading, Sri Lanka's Aitken Spence and Indonesia's Wintermar Offshore Marine. We also exited Asia Satellite Telecom after accepting a takeover offer at a reasonable price. The proceeds from these divestments were used to introduce businesses with solid balance sheets, robust competitive advantages and attractive growth prospects.

Aside from Affle India mentioned above, we continue to seek out small-cap names that occupy interesting technology niches. These are well-positioned to grow as various structural trends in the sector pick up pace. One such addition was South Korea's Koh Young Technology. As a leader in the highly-specialised market of 3D inspection for circuit boards, it is set to benefit from the increased complexity of chip-making, driven by structural trends such as 5G networks, vehicle electrification and artificial intelligence.

Meanwhile, we added to the portfolio's Thai exposure by participating in the public offering of bio-waste energy producer Absolute Clean Energy. The company has a good track record in operating 13 power plants, with another 20 in the pipeline. Furthermore, government measures to promote renewable energy support its ambitious growth plans, and we were impressed by management's focus and technical know-how.

Finally, we initiated some 'old economy' names which seemed to offer good quality. These include India's Ujjivan Financial Services (UFS), the parent of Ujjivan Small Finance Bank (UFSB). UFS is a cheaper proxy for USFB, and is one of the more promising small-cap firms in India's financial sector. Despite its short history as a small-finance bank, it has done well in managing its micro-financing loan book. With a good digital strategy and capable management, the lender is on track to achieve a more balanced portfolio mix that serves both the lower-income and mass-market segments. Growth of its deposit franchises will also provide a more sustainable funding source.

We also took advantage of share-price weakness to initiate Singapore's Raffles Medical, a leading hospital and clinic provider, which has attractive long-term prospects, fuelled by expansion into China.

Outlook

The short-term outlook for Asia is cloudy, with the resurgence of Covid-19 infections threatening to derail the nascent recovery. As investors grapple with the still-unfolding pandemic, we expect more volatility in the months ahead. Adding to the uncertainty is the flaring tension between Washington and Beijing in the lead-up to the US presidential elections this November. Nevertheless, we are encouraged by improving economic data from several Asian economies, and we expect to see healthier numbers as more countries re-open for business. Additionally, accommodative fiscal and monetary policies across the globe should continue to support stock prices.

While Asia is home to many good quality small companies, market research remains scant. We have an experienced and well-resourced team of managers stationed across key markets in the region, providing us front-row seats to the rapidly-changing investment landscape that is being shaped by long-term structural changes. These include rising consumerism, increased demand for financial and healthcare services and the expansion of new technologies, catering to nearly two- thirds of the world's population. Furthermore, Asian countries' relatively effective containment of the virus mean that these companies with a mainly domestic focus should be among the first to recover. We remain committed to our bottom-up investing approach, with an emphasis on seeking out good quality companies at attractive valuations, while actively engaging with their management to ensure robust corporate governance and high standards of sustainability. This should continue to stand your Company in good stead in the long run.

Hugh Young,Aberdeen Standard Investments (Asia) LimitedInvestment Manager28 October 2020

STRATEGIC REPORT - RESULTS

FINANCIAL HIGHLIGHTS

PERFORMANCE (TOTAL RETURN)

DIVIDENDS

Ten Year Financial Record

INVESTMENT PORTFOLIO

As at 31 July 2020

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 2020.

Results and Dividends

Details of the Company's results and proposed dividends are shown above.

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 2020 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 2020, there were 32,442,209 fully paid Ordinary shares of 25p each (2019 - 33,909,349 Ordinary shares) in issue with a further 9,293,918 Ordinary shares of 25p held in treasury (2019 - 7,809,662 treasury shares). During the year 1,484,256 Ordinary shares were purchased in the market for treasury (2019 - 1,302,650). Subsequent to the period a further 487,500 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 13 December 2019, 238,951 units of Convertible Unsecured Loan Stock 2025 were converted into 16,302 new Ordinary shares. On 12 June 2020 12,050 units of Convertible Unsecured Loan Stock 2025 were converted into 814 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

On 5 June 2020, the Company entered into a new two year multicurrency revolving loan facility of £20 million with The Royal Bank of Scotland International Limited (the "Loan Facility"), which replaced the Company's $25m loan facility with RBSI, which matured on 5 June 2020. £18.2 million was drawn down under the new loan facility and has been used to repay the maturing loan. At 31 July 2020 £11.2 million had been drawn down under the Loan Facility.

On 20 October 2020 the Board announced that it had agreed terms (through the acceptance of a conditional offer that is subject to diligence and agreement of legal documentation) to extend and secure the Company's long-term borrowings through the issuance of a £30 million 15 year Senior Unsecured Loan Note (the "Loan Note") at an annualised interest rate of 3.05%. The Loan Note will be unsecured, unlisted and denominated in sterling. The Loan Note shall rank pari passu with the Company's other unsecured and unsubordinated financial indebtedness. The Company intends to use the proceeds of the Loan Note to repay, and cancel in full, the Company's Loan Facility. The remainder will be available for the Company's Manager to invest on behalf of the Company.

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") 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").

Management Fee

With effect from 1 November 2018, the management fee has been payable monthly in arrears 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 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 (2019 - nil) and has not made any charitable donations during the year (2019 - nil).

Risk Management

Details of the financial risk management policies and objectives relative to the use of financial instruments by the Company are set out in note 19 to the financial statements.

The Board

The current Directors, N K Cayzer, Randal Dunluce (Viscount Dunluce), M J Gilbert (alternate H Young), P Yea, C Black and D Guthrie, together with H Fukuda who retired on 31 March 2020 and K Shanmuganathan who was appointed on 3 June 2020 were the only Directors who served during the year. Pursuant to Principle 23 of the AIC's Code of Corporate Governance which recommends that all directors should be subject to annual re-election by shareholders, all the members of the Board, with the exception of Mr Yea and Mr Shanmuganathan, will retire at the AGM scheduled for 1 December 2020 (the "2020 AGM") and will offer themselves for re-election. Details of each Directors' contribution to the long term success of the Company are provided below. In accordance with the Articles of Association, Mr Shanmuganathan, having been appointed to the Board on 3 June 2020, will retire from the Board at the 2020 AGM and, being eligible, seek election. Mr Yea has indicated that he intends to retire as a Director of the Company with effect from the close of business of the 2020 AGM.

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

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

The Role of the Chairman

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

The Company has not appointed a senior independent director. Accordingly the Audit Committee Chairman in combination with the other independent Directors fulfil the duties of the senior independent director, acting as a sounding board for the Chairman and acting as an intermediary for other directors as applicable. The Audit Committee Chairman is also available to shareholders to discuss any concerns they may have.

Corporate Governance

The Company is committed to high standards of corporate governance. The Board is accountable to the Company's shareholders for good governance and this statement describes how the Company has applied the principles identified in the UK Corporate Governance Code as published in July 2018 (the "UK Code"), which is available on the Financial Reporting Council's (the "FRC") website: frc.org.uk.

The Board has also considered the principles and provisions of the AIC Code of Corporate Governance as published in February 2019 (the "AIC Code"). The AIC Code addresses the principles and provisions set out in the UK Code, as well as setting out additional provisions on issues that are of specific relevance to the Company. The AIC Code is available on the AIC's website: theaic.co.uk.

The Board considers that reporting against the principles and provisions of the AIC Code, which has been endorsed by the FRC provides more relevant information to shareholders.

The Board confirms that, during the year, the Company complied with the principles and provisions of the AIC Code and the relevant provisions of the UK Code, except as set out below.

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

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

3. previous experience of the chairman of a remuneration committee (provision 32);

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

5. senior independent director (provision 12); and

6. tenure of the Chairman (provision 19).

For the reasons set out in the AIC Code, and as explained in the UK Corporate Governance Code, the Board considers that provisions 1 to 4 above are not relevant to the position of the Company, being an externally-managed investment company. In particular, all of the Company's day-to-day management and administrative functions are outsourced to third parties. As a result, the Company has no executive directors, employees or internal operations. The Company has therefore not reported further in respect of provisions 1 to 4 above. The tenure of the Chairman is discussed further under 'Policy on Tenure', below. The full text of the Company's Corporate Governance Statement can be found on the Company's website: asia-focus.co.uk.

During the year ended 31 July 2020, 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 2020 (with their eligibility to attend the relevant meeting in brackets):

A Mr Cayzer and Mr Gilbert were not members of the Audit Committee during the year

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

C Mr Gilbert is not a member of the Nomination or Management Engagement Committees

D Ms Fukuda retired from the Board on 31 March 2020

E Mr Shanmuganathan was appointed to the Board on 3 June 2020

Policy on Tenure - Chairman

The Company's policy, which is kept under very regular review, is in line with the Listing Rules, the Chairman must remain independent of the Manager. The independent Directors, excluding the Chairman, have reviewed the Company's policy on the tenure of the Chairman in the light of the recent changes to the UK Corporate Governance Code. The review focused on the independence of the Chairman from the Manager and concluded that, notwithstanding the tenure of the Chairman he remains completely independent of the Manager. In forming this conclusion the independent Directors were able to draw upon the Chairman's demonstrable track record which includes:

· Overseeing the refreshment of the Board;

· Overseeing the introduction of a revised investment policy in 2018;

· Encouraging the Manager to proactively expand its focus on the smaller company investment universe;

· Successfully negotiating a significant reduction in the level of management fee.

The independent Directors note that the Chairman has overseen the affairs of the Company through a number of significant and tumultuous Asian investment cycles and this experience and in-depth knowledge of the Company is extremely beneficial to the Directors, shareholders and all stakeholders alike.

Policy on Tenure - Directors

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

The Board has noted that shareholder proxies representing 31% of the issued capital voted against the annual re-election of Mr Gilbert at the AGM held on 4 December 2019. The Board further notes the substantial support received from the shareholders with proxies representing 69% having voted in favour of Mr Gilbert's re-election and unanimous support from the shareholders in attendance at the AGM. Mr Gilbert is a non-independent Director and the Board 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. Mr Gilbert, or his Alternate Mr Young, have attended all of the five scheduled Board meetings in the year to 31 July 2020 and there are no issues relating to either Mr Gilbert or his Alternate not having sufficient time to dedicate to the Company. Furthermore, Mr Gilbert retired from Standard Life Aberdeen plc on 30 September 2020. The Board has a healthy 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 24 years and is valued by the Board as a whole.

Board Committees

Audit Committee

The Audit Committee Report is on pages 55 to 57 of the published Annual Report and financial statements for the year ended 31 July 2020.

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.

During the year Mr Yea intimated his intention to retire from the Board at the conclusion of the 2020 AGM and the Nomination Committee initiated a search to find a new independent non executive Director. Historically the Company has used the services of an independent search consultant. However, in light of difficulties arising from the ongoing pandemic, on this occasion, the Directors drew up a specification for the appointment and established a shortlist of suitable candidates themselves. Following an interview process the Board appointed Mr Krishna Shanmuganathan as an independent non executive Director of the Company with effect from 3 June 2020.

The Board undertakes an annual evaluation of the Board, Directors, the Chairman and the Audit Committee which is conducted by questionnaires. The 2020 evaluation highlighted certain areas of further focus such as continuing professional development which will be addressed with input where necessary from the Company's advisors. Overall, the Committee has concluded that the Board has an excellent balance of experience, knowledge of investment markets, legal regulation and financial accounting and continues to work in a collegiate and effective manner.

The Nomination Committee has reviewed the contributions of each Director ahead of their proposed election and re-elections at the 2020 AGM. Notwithstanding that Mr Cayzer has served on the Board for more than nine years, the Committee is of the view that Mr Cayzer remains very independent of the Manager. He has continued to Chair meetings in an orderly, open and independent manner allowing sufficient time for key areas of focus whilst allowing all significant matters to be fully debated. Mr Gilbert has also served on the Board for more than nine years and is also deemed not to be independent as he is a former representative of the Manager. The Committee has reviewed the contribution from Mr Gilbert and concluded that he brings significant strategic and investment expertise to the Board. Ms Black has brought significant financial promotion and marketing expertise to the Board; Ms Guthrie has brought significant investment insight, investment trust expertise and attention to detail to the Board during the year; Viscount Dunluce has brought detailed wealth management investment experience and insight to the Board. Although Mr Yea has indicated his intention to retire from the Board at he 2020 AGM, the Committee notes his considerable technical financial expertise and contribution to the Company during the year through his chairmanship of the Audit Committee and Management Engagement Committee throughout the year. Mr Shanmuganathan has already brought significant regional strategic insight to the Board. For the foregoing reasons, the independent members of the Nomination Committee have no hesitation in recommending the election/re-election of each Director who will be submitting themselves for election/re-election at the 2020 AGM.

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. Ms Guthrie has agreed to become Chairman of the Management Committee following Mr Yea's retirement on 1 December 2020. 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.

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 Company's assets consist of equity shares in companies listed on recognised stock exchanges and are considered by the Board to be realisable within a relatively short timescale under normal market conditions. The Board has set overall limits for borrowing and reviews regularly the Company's level of gearing, cash flow projections and compliance with banking covenants. The Board has also reviewed stress testing and liquidity analysis covering the impact of significant historical market events such as the 1997 Asian Crisis and 2008 Global Financial Crisis on the liquidity of the portfolio to ensure that even in significant negative markets the Company would still be able to raise sufficient capital to repay its liabilities.

The Company's loan facilities were renegotiated in June 2020 and on 20 October 2020 the Board announced that it had agreed terms (through the acceptance of a conditional offer that is subject to diligence and agreement of legal documentation) to extend and secure the Company's long-term borrowings through the issuance of a £30 million 15 year Senior Unsecured Loan Note (the "Loan Note") at an annualised interest rate of 3.05%. The Loan Note will be unsecured, unlisted and denominated in sterling. The Loan Note will rank pari passu with the Company's other unsecured and unsubordinated financial indebtedness. The Company intends to use the proceeds of the Loan Note to repay, and cancel in full, the Company's loan facilities.

The Directors are mindful of the Principal Risks and Uncertainties disclosed in the Strategic Report and they believe that the Company has adequate financial resources to continue its operational existence for a period of not less than 12 months from the date of approval of this Annual Report. They have arrived at this conclusion having confirmed that the Company's diversified portfolio of realisable securities is sufficiently liquid and could be used to meet short-term funding requirements were they to arise, including in current market conditions caused by the Covid-19 pandemic. The Directors have also reviewed the revenue and ongoing expenses forecasts for the coming year. Accordingly, the Directors believe that it is appropriate to continue to adopt the going concern basis in preparing the financial statements.

Management of Conflicts of Interest

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

No Director has a service contract with the Company although Directors are issued with letters of appointment upon appointment. The Directors' interests in contractual arrangements with the Company are as shown in note 18 to the financial statements. No other Directors had any interest in contracts with the Company during the period or subsequently.

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

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 54 and 65 respectively of the published Annual Report and financial statements for the year ended 31 July 2020.

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

Ernst & Young LLP and its associated audit firms ("EY") has been auditor to the Company since its launch in 1995 and will not be able to audit the Company from 2023. Therefore, in accordance with regulatory requirements the Board has conducted a tender for audit services during the year, culminating in a decision to recommend to shareholders the appointment of PricewaterhouseCoopers LLP ("PwC") as independent auditor to the Company with effect from the AGM on 1 December 2020. PwC has expressed its willingness to become the Company's auditor and a Resolution to appoint PwC as the Company's auditor will be put to the forthcoming Annual General Meeting, along with a separate Resolution to authorise the Directors to fix the auditor's 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 2020 meeting, the Audit Committee carried out an annual assessment of internal controls for the year ended 31 July 2020 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 2020. 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 2020:

On 22 October 2020 City of London Investment Management Company notified the Company that it had increased its interest in the Company to 5,764,041 Ordinary shares representing 18.0% of the issued capital. There have been no other significant changes notified in respect of the above holdings between 31 July 2020 and 28 October 2020.

The UK Stewardship Code and Proxy Voting

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

The Manager is a tier 1 signatory of the UK Stewardship Code which aims to enhance the quality of engagement by investors with investee companies in order to improve their socially responsible performance.

Relations with Shareholders

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

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 13, 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 13 is to authorise the Directors to allot up to a maximum of 21,303,139 shares in total (representing approximately 2/3 of the existing issued capital of the Company, of which a maximum of 10,651,569 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 2021. The Board has no present intention to utilise this authority.

Disapplication of Pre-emption Rights

Resolution 14 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 14 and subject to the authority to be conferred by Resolution 13 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 15 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 15 will expire at the conclusion of the Annual General Meeting in 2021 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. During the year the Company has bought back 1.48m Ordinary shares for Treasury.

If Resolutions 13 to 15 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 16 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 2021. 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 16 in limited and time sensitive circumstances.

Recommendation

Your Board considers Resolutions 13 to 16 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 13 to 16 to be proposed at the AGM, as they intend to do in respect of their own beneficial shareholdings amounting to 265,350 Ordinary shares.

By order of the BoardAberdeen Asset Management PLC -SecretariesBow Bells House, 1 Bread StreetLondon EC4M 9HH28 October 2020

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 on 1 December 2020;

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

3. Annual Statement.

The law requires the Company's 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 60 of the published Annual Report and financial statements for the year ended 31 July 2020.

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 2020 (rebased to 100 at 31 July 2010). 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 4 December 2019, shareholders approved the Directors' Remuneration Report in respect of the year ended 31 July 2019 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 Mr Shanmuganathan was appointed to the Board on 3 June 2020

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

D Ms Fukuda retired from the Board on 31 March 2020

Sums Paid to Third Parties

None of the fees disclosed above were payable to third parties in respect of making available the services Directors. 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 2020. 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 18 to the financial statements. The Directors (including connected persons) at 31 July 2020, and 31 July 2019, 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 Mr Shanmuganathan was appointed to the Board on 3 June 2020

The above interests are unchanged at 28 October 2020, 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 2020:

· 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,Chairman28 October 2020

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 38 to 41 of the published Annual Report and financial statements for the year ended 31 July 2020, 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 PLCNigel Cayzer,Chairman28 October 2020

STATEMENT OF COMPREHENSIVE INCOME

STATEMENT OF FINANCIAL POSITION

STATEMENT OF CHANGES IN EQUITY

STATEMENT OF CASHFLOWS