Final Results

Aberdeen Frontier MarketsInvestment Company Limited

A UK-listed closed-end fund, offering diversified access to up-and-coming frontier markets

LEGAL ENTITY IDENTIFIER ('LEI'): 213800X9N731I4IPK361

ANNOUNCEMENT OF RESULTS FOR THE YEAR ENDED 30 June 2019

Financial Highlights

For the year ended 30 June 2019

1 Total return, NAV to NAV, gross income reinvested.

2 Share price total return is on a mid-to-mid basis.

3 These are Alternative Performance Measures ('APMs').

Alternative Performance Measures ('APMs')

The disclosures as indicated in footnote 3 above are considered to represent the Company's APMs. In addition to the above APMs, other performance measures have been used by the Company to assess its performance. Definitions of these APMs together with how these measures have been calculated can be found further below.

Dividend (in US dollars)

Financial Calendar

Chairman's Statement

On behalf of your Board, I present to you the Annual Report for Aberdeen Frontier Markets Investment Company Limited ('AFMC' or the 'Company') for the year ended 30 June 2019.

Performance

During the year under review the Company's net asset value ("NAV") per Ordinary share and share price total returns were -14.0% and -14.4%, respectively. This compared to a gain of 5.2% for the MSCI Frontier Markets Index (the 'Index' or the 'Reference Benchmark'), all figures in US Dollar total return terms. The portfolio's exposure to Pakistan, which is not included in the Index, accounted for a significant part of the Company's underperformance, as the local market fell 36.7% in dollar terms with government policy taking months to define and the negotiations with the International Monetary Fund taking almost a year to conclude.

The year ended 30 June 2019 was particularly disappointing as our country weightings in the second half detracted from performance and added to initial market declines in the first half of the year. The underweight position to stocks in Kuwait and Bahrain where the Investment Manager continued to struggle to find fair valued investment opportunities, a feature noted in the Half-Yearly Report, continued to hold back relative performance over the balance of the year. In addition, deteriorating relations over trade and tariffs between the US and China continued to form a difficult backdrop for all markets. The anticipated rise in frontier markets, offering a defensive asset class if global equities lost their appeal given their lack of correlation, was only witnessed briefly in May which proved insufficient to reverse the overall trend.

Tender Offer, Discount and Share Buybacks

Further to the tender offer announced on 20 September 2018, the Company bought back and cancelled 12,689,991 Ordinary shares on 19 October 2018 resulting in issued Ordinary share capital of 71,910,117 Ordinary shares with voting rights and an additional 1,302,450 Ordinary shares held in treasury, which was unchanged at 30 June 2019. No further shares have been bought back by the Company between 1 July 2019 and the latest practicable date prior to the publication of this Report.

The discount to NAV at which the Company's Ordinary shares traded widened slightly from 9.0% to 9.7% over the year. The Board keeps the Ordinary share price discount to NAV under constant review and the Company may purchase its own shares through the market for cash where the Directors believe that such purchases will enhance Shareholder value and are likely to assist in narrowing the discount to NAV at which the Ordinary shares may trade.

Discount Control Policy

At an Extraordinary General Meeting held on 17 October 2018, shareholders approved a new discount control policy whereby shareholders will be given the opportunity to fully exit their investment in the Company for cash at the then prevailing NAV less applicable direct costs, including any realisation costs of underlying investments, in the event that the Share Price Total Return (in sterling terms) for the two year period from 1 July 2018 to 30 June 2020 fails to exceed the portfolio's Reference Benchmark, being the MSCI Frontier Markets Index (in sterling terms).

30 June 2019 marked the half-way point of the Company's two year measurement period at which point the Company's Ordinary share price total return was -10.6% against a gain of 11.5% for the Reference Benchmark (in sterling terms). Although it is clear that the Company will require to substantially outperform the Index in the year to 30 June 2020 in order to avoid further corporate activity, the Manager believes that the underlying portfolio fundamentals support the case for the Company's continuing investment strategy. The Manager's approach is bottom up, conviction based and Benchmark agnostic, resulting in geographic allocations significantly different to those of the MSCI Frontier Markets Index, a key driver of the performance differential. While the Board continues to monitor very closely the total return for the Company's Ordinary share price, and the Index (both in sterling terms), shareholder interests remain at the forefront of their decision making. Accordingly, the Board will continue to gather feedback from shareholders during the remainder of this performance measurement period with a view to acting in the best interests of all shareholders.

Ongoing Charges Ratio

The Board is very mindful of the overall size of the Company, the costs incurred in managing such an investment company and the impact that any share buybacks could have. I was pleased to report at this time last year that agreement had been secured with the Manager to seek to limit the Company's ongoing charges ratio ("OCR") to no more than 2% calculated annually as at 30 June.

This arrangement is still in place to the extent that the Manager will rebate an amount of its fee to the Company with the objective of bringing the OCR down to 2% in relation to any annual period. However, this remains capped such that a rebate should not represent more than one third of the annual management fee payable for the relevant year in question.

Dividend

A final dividend for the year ended 30 June 2018 of 1 cent (0.761615p pence) was paid to Ordinary shareholders on 19 December 2018.

In relation to the year ended 30 June 2019, an interim dividend of 1 cent (0.76746953 pence) per share was paid to Ordinary shareholders on 28 June 2019 with a record date of 7 June 2019 and an ex-dividend date of 6 June 2019.

The Board is recommending to shareholders the payment of a final dividend for the year end of 1 cent per Ordinary share. If approved by shareholders at the Annual General Meeting to be held on 10 December 2019, this dividend will be paid on 18 December 2019 to those shareholders who are on the register on 15 November 2019. The ex-dividend date will be 14 November 2019. The final dividend will be paid in sterling and the sterling dividend rate will be announced in due course.

The Board considers that a sustainable dividend forms an important part of shareholders' overall return and intends to continue to pay semi-annual dividends in line with previous guidance.

Aberdeen Standard Investments Savings Plans

Aberdeen Standard Investments has a long history in managing closed-ended funds and provides a wealth of experience and a wide infrastructure towards their management and promotion. Investors may access low cost investment in the Company through Aberdeen Standard Investment's Share Plan, Investment Trust ISA and Investment Plan for Children which provide full voting and other rights of share ownership.

Further details may be found via our website at: aberdeenfrontiermarkets.co.uk. 

Future Prospects

In periods of market volatility, it is helpful for investors to be able to look through short term relative performance to the extensive due diligence undertaken by the Manager at the stock level, driven by their focus on intrinsic value rather than a pursuit of either fads or Index-based returns. The Manager considers that the dislocated valuations and mispricing across the region, including in Kuwait in particular, are deserving of rebuttal. With macro imbalances in Pakistan now being addressed and valuations at multi-year lows, a market recovery seems ever likely which could quickly reverse performance.

The Board notes the Investment Manager's optimism around the near term outlook for frontier markets. Further rate cuts by central banks, expected to follow the lead taken by the now more dovish US Federal Reserve in late July 2019, should cause international investors to again consider the opportunities available through investment in frontier market equities.

The Board recognises that there exists a level of material uncertainty as to whether the performance of the Company will exceed the performance of the portfolio's Reference Benchmark. In such circumstances the Company's discount control policy will result in an exit opportunity being presented to shareholders. This in turn could introduce an element of uncertainty over the continuation of the Company. As described above, the Board will continue to monitor this situation closely.

At the portfolio level, our Investment Manager remains committed to its quality emphasis and continues to consider stocks and countries which are both included in and sometimes outside of the Index, albeit continue to display characteristics of frontier market countries. Direct engagement with investee companies through regular country visits forms a strong element of the investment team's fundamental analysis. The strategy continues to invest across a diversified range of quality companies with sustainable growth characteristics, agnostic of the geographic concentrations of the Reference Benchmark.

I continue to value the input of my colleagues on the Board and thank them for their diligence and professionalism, the Investment Manager for its continued efforts and importantly our shareholders for their continued support and belief in the long term future prospects for frontier markets and our relative portfolio positioning.

John Whittle

Chairman

25 September 2019

Investment Manager's Report

Market environment

The twelve months to 30 June 2019 was another challenging period for frontier market equities. While the MSCI Frontier Markets Index achieved a gain of 5.2% during the period, this gain was largely attributable to surging Gulf markets, namely those of Kuwait and Bahrain, which rose 34.2% and 36.6% respectively. Without their contribution, the Index would have registered a decline of 4.1% (Source, Aberdeen Standard Investments, Morningstar & Lipper).

Indeed, outside of the Gulf and Vietnam, most other frontier markets displayed continued weak momentum, which we believe is primarily due to ongoing negative foreign fund flows and declining investor activity, specifically falling average daily traded volume ('ADTV'). Figures from EPFR Global show that 2018 witnessed circa US$1,600 million of net outflows from frontier market mutual funds, while the five months to the end of May 2019 has shown a further US$900m in net outflows. Many smaller frontier markets have seen declines in ADTVs of 50% or more since 2014 in US dollar terms, meanwhile smaller emerging markets, such as Egypt and Pakistan, which fall within our definition of investable markets for the Company, have suffered worse, with declines of 70% plus. In terms of valuations, the Index trades on a forward price-to-earnings ratio of just 9.6x if one excludes Kuwait and Vietnam from the calculation, 10% below its five-year average.

A variety of global concerns continue to weigh on investor appetite for more risky asset classes, not least the poor state of US-China relations in trade and other strategic areas. But appetite for frontier markets has remained elusive even as the Federal Reserve (the Fed) has shifted to a more accommodative monetary policy stance this year, which is somewhat surprising. The softening of the monetary policy outlook might have been expected to weigh on the US dollar and provide frontier economies with the flexibility to reduce local rates, not to mention trigger an uptick in foreign investor interest, but this has not played out to any meaningful extent.

Some sceptics point to late-cycle risks to momentum in respect of the world's largest economies, above all that of the US, as cause for ambivalence towards riskier assets. Others contend that this more accommodative monetary stance has underwritten a further late-cycle advance of US equities, which remains the preferred equity exposure for most global portfolios. Whilst recognising such unknowns exist, the fact that most frontier markets are being given such a wide berth seemingly regardless of events in developed economies exemplifies just how out-of-favour this asset class has been.

We repeat the point made previously that the low correlation of frontier markets with global equities, as well as relatively weak trade linkages with the developed world, should imbue the asset class with certain defensive qualities should global equity markets actually lose their footing, especially given the very low valuations that most of our markets now stand at. The month of May was a case in point as global equity markets briefly tumbled on growth concerns, whilst most frontier markets performed somewhat better. Early August has again seen such volatility amid global concerns over China's attempt to counter further US tariff hikes with a weakening of its currency.

Turning to some specific markets, Vietnam remains a high-conviction exposure for the portfolio (with a weighting of 22.6% at the end of the year) given excellent corporate earnings delivery within the backdrop of a robust economy, which has been underpinned by rapid investment-led industrialisation. Offshoring from China seems to be a secular prospect given the continuing US-China trade tensions as well as Chinese wage inflation, but there is also a risk that the US turns its attention towards Vietnam's own large trade surplus, which is the US's fifth-largest trade deficit relationship. The portfolio's two largest investments in Vietnam, Mobile World Corp (5.7% of net assets) and FPT Corp (5.8%) have continued to show strong operational numbers. Mobile World Corp delivered 16% growth in revenue in the first half of the current year, driven by robust sales figures from its DMX home appliances retail format, while net profit rose 38% on scale benefits and improved profitability at its supermarkets division. As at the end of June the stock was trading on 10.2x forward earnings with a PEG ratio of 0.5x. FPT also delivered stellar operational results with first half 2019 net profit expansion of 29%, primarily driven by its software outsourcing division expanding into international markets.

Elsewhere, the Nigerian economy continues to struggle within a framework of government policy continuity that is largely absent of reforms that will meaningfully address structural constraints to growth. Tight monetary policy and a focus on maintaining the naira peg to the dollar has provided an aura of stability, but at the cost of growth, with real GDP expected to advance no more than 2.0% this year, which is a lower rate than the expansion of the population. Still, despite the uninspiring economic backdrop, our holdings have delivered reasonable earnings progression. Our two core holdings, Zenith Bank and Guaranty Bank, achieved 7% and 10% earnings growth in the first quarter, respectively, despite muted corporate loan activity. Zenith Bank, with a capital adequacy ratio of 22% and a dividend yield of 14%, is a solid value play with a strong recurring yield; meanwhile Guaranty Bank maintains an exceptional return-on-equity of over 30%, albeit with a slightly lower dividend yield of 8%.

In Pakistan, which remains within our defined investment universe albeit not in the benchmark, the Pakistan Tehreek-e-Insaf (PTI) government led by Imran Khan took several months to define key policies after its election, and almost a year to reach an agreement with the International Monetary Fund (IMF). The government was cajoled by the IMF to concede on several important areas of economic policy, including allowing a major adjustment of the currency, maintaining a suitably positive real interest rate and devising a strategy to reign in the country's fiscal deficit. These remedies were never avoidable, but the quantum of adjustment ballooned with the extended delay in implementation. Facing the prospect of a 12-24 month engineered slowdown, the local equity market retreated to decade lows. By the end of June the Karachi All Share Index traded on 6.4x the current year's earnings, despite depressed corporate profits. With a now inexpensive currency and credible reform effort in place, we believe the worst is behind the market.

Egypt, in the third year of its IMF-supported programme, saw real GDP growth accelerate to 5.7%, a solid number that is expected to be maintained in the medium term given falling inflation, lower interest rates, recovering tourism, returning consumer confidence and what is expected to be a recovery in capital investment. Our holdings in Egypt have made solid progress over the past twelve months, delivering high double digit earnings growth, and this pace should be maintained in 2019.

Indeed, most of our markets outside Argentina and Pakistan are enjoying stable or accelerating economic activity at this juncture, which is in contrast to a peaking economic cycle in the developed world. The outlook for developed economies appears more fragile than it has been for some time in many ways, but given our region's relatively weak linkages with the global economy, idiosyncratic drivers such as the timing of various IMF supported programmes and moderating interest rate expectations, we see reasons to remain bullish about the prospects for a frontier market recovery over the coming quarters.

Performance

While the portfolio's NAV held broadly flat during the second half of the year, , the first half of the year witnessed a 14.6% decline, the reasons for which were outlined in the first Half Yearly Report, resulting in an overall decline in NAV for the year under review of 14.0% in US Dollar terms. This compares to a benchmark return of 5.2%.

As discussed above, Gulf markets were a key driver of the benchmark's return over the year, without which the Index would have been negative.

The primary driver of the portfolio's poor relative performance was its off-benchmark exposure to Pakistan, whose market retreated 36.7% in US dollar terms, largely due to the devaluation of the rupee. However, since the portfolio's holdings were primarily in less liquid small and mid-cap stocks in domestic-orientated companies, the drawdown was more costly still. The portfolio today owns a basket of six extremely undervalued yet very much established Pakistani corporates and we have every faith that these companies will witness a strong recovery in due course, once liquidity conditions normalise. In the meantime, all continue to pay dividends, ranging between 2.5% and 11.5%.

Aberdeen Frontier Markets Investment Company cumulative performance in USD for periods ended 30 June 2019

NotesTotal return; NAV to NAV, gross income reinvested, USD.Share price total return is on a mid-to-mid basis.Dividends are reinvested as at the ex-dividend date.NAV returns based on NAVs with debt valued at fair value.Source: Aberdeen Standard Investments, Morningstar & Lipper

Portfolio positioning

As at the end of June 2019 the portfolio had 50 investments, providing exposure to more than 20 frontier market economies. As a comparator, the MSCI Frontier Markets Index captures large and mid-cap representation across 28 countries with 95 constituents.

During the year under review the Company's exposure to Frontier Asia was broadly stable at 42.9%. A reduction in exposure to Sri Lanka was offset by an increase to Vietnam.

The Company initiated four new investments during the second half of the year: Arabian Centres Co, a Saudi Arabian shopping mall developer and operator; NLB Group, a banking group with operations across the former Yugoslavia; Grana y Montero, an infrastructure company operating in the Andean region; as well as Adecoagro, an Argentinian-headquartered agricultural company.

To fund these purchases, the portfolio exited BAT Bangladesh, East African Breweries in Kenya, as well as Globant and Pampa Energia in Argentina; the portfolio also reduced exposure to BBVA Frances in Argentina, and John Keells in Sri Lanka.

Market outlook

While news flow continues to be mixed and liquidity conditions an ongoing challenge, we see reason to be optimistic about the near future. Firstly, from an economic as well as political point of view, many of our core markets continue to progress various structural reforms, several under the direct auspices of the IMF, which is very encouraging. This provides an element of policy clarity to the cyclical recovery that is underway across a number of our markets. Pakistan is the latest to join this group, which bodes well for the future of that economy. Secondly, while foreign investor participation in most of our markets has fallen to extremely low levels, such a lack of engagement we believe will revert in due course and in the meantime valuations are at highly attractive levels in absolute terms, underpinned by a still reasonable corporate earnings outlook.

As discussed above, uncertainty with regard to the outlook of developed economies, matched by increasing dovish tones from central banks, could provide a more conducive environment for frontier markets as investors seek uncorrelated and absolute return opportunities. In time we expect the frontier region to be rediscovered as global investors recognise the attractiveness of the asset class's idiosyncratic drivers, cyclical positioning and attractively valued markets.

The portfolio as a whole is expected to deliver 12.3% earnings growth in local currency terms in 2019 according to consensus estimates, with a blended return-on-equity of 25.7% and a dividend yield of 4.1%, which is supportive of the Company's own dividend policy.

As ever, the portfolio retains its clear quality bias, which is reflected in the portfolio's statistics: a high blended return-on-equity, low corporate leverage and double digit corporate earnings growth. In all, we believe these fundamentals provide cause to be optimistic about the coming year.

The management style of the portfolio is benchmark aware but importantly not benchmark driven. In this respect we look across a wide array of countries with frontier market characteristics, including outside of the Index, seeking out what we believe to be quality companies to invest in. This diversified portfolio of companies is managed with a mind to delivering strong performance over the medium to longer term at a low level of volatility. That said, there will be divergences away from the benchmark, as well as in relative performance. We remain committed to our investment approach, which entails rigorous interaction and engagement with companies with regular on the ground visits. This allows us to identify those with solid long-term prospects and progressive management teams that should negotiate economic cycles and safeguard shareholder interests.

Aberdeen Standard Fund Managers Limited

25 September 2019

* ASA International Group UK listed

Top 20 Investments

Statement of Directors' Responsibilities

Statement of Comprehensive Income

The total column of this statement represents the Company's Statement of Comprehensive Income, prepared under IFRS as adopted by the European Union. The revenue and capital columns, including the revenue and capital earnings per share data, are supplementary information prepared under guidance published by the Association of Investment Companies.

The Company does not have any income or expenses that are not included in the loss for the year and therefore the 'Net loss after taxation' is also, the total comprehensive income for the year.

All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued during the year.

The notes form an integral part of these financial results.

Statement of Financial Position

Approved and authorised for issue by the Board of Directors on 25 September 2019 and signed on their behalf by:

John WhittleDirector

David WarrDirector

The notes form an integral part of these financial results.

Statement of Changes in Equity

The notes form an integral part of these financial results.

Statement of Cash Flow

The notes form an integral part of these financial results.

Notes to the Financial Statements

1 Accounting policiesBasis of preparationThe financial statements of the Company have been prepared in accordance with International Financial Reporting Standards ('IFRS'), approved by the International Accounting Standards Board and as adopted by the European Union.

The financial statements give a true and fair view of the state of affairs of the Company as at the end of the year and of the profit or loss for the year and are in accordance with The Companies (Guernsey) Law, 2008.

Under IFRS, the Statement of Recommended Practice ('SORP') issued by the Association of Investment Companies has no formal status, but the Company has taken the guidance of the SORP into account to the extent that it is deemed appropriate and compatible with IFRS and the Company's circumstances.

The particular accounting policies adopted are described below:

(a) Accounting conventionThe financial statements are prepared under the historical cost convention, except for the measurement of investments at fair value.

(b) InvestmentsAs the Company's business is investing in financial assets with a view to profiting from their total return in the form of increases in fair value, financial assets are held at fair value through profit or loss on initial recognition in accordance with IFRS 9. These investments are recognised on the trade date of their acquisition. At this time, fair value is the cost of investment.

After initial recognition such investments are valued at fair value which is determined by reference to:

(i) primarily market bid price for investments quoted on recognised stock exchanges (market mid or last trade price will be used where deemed to more appropriately reflect fair value);

(ii) NAV per individual investee funds' administrators for unquoted open-ended funds; and

(iii) by using other valuation techniques to establish fair value for any other unquoted investments.

Investments are derecognised on the trade date of their disposal. Gains or losses are recognised in the capital column of the Statement of Comprehensive Income.

Transaction costs incurred on the acquisition and disposal of investments are charged to capital and included in the 'Losses on investments' on the Statement of Comprehensive Income.

(c) Income from investmentsDividend income from Ordinary Shares is accounted for on the basis of ex-dividend dates. Income from fixed interest shares and securities is accounted for on an accruals basis using the effective interest method. Special dividends are assessed on their individual merits and are credited to the capital column of the Statement of Comprehensive Income if the substance of the payment is a return of capital; with this exception all other investment income is taken to the revenue column of the Statement of Comprehensive Income. Bank interest receivable is accounted for on a time apportionment basis.

(d) Capital reservesProfits and losses on disposals of investments and gains and losses on revaluation of investments held are allocated to the capital reserve via the capital column of the Statement of Comprehensive Income. Dividends may be distributed from Capital reserves.

(e) Revenue reservesThe balance of all items allocated to the revenue column of the Statement of Comprehensive Income in each year is transferred to the Company's Revenue reserves. Dividends may be distributed from Revenue reserves.

(f) Investment management feesTwo thirds of the basic investment management fee is allocated to the capital column of the Statement of Comprehensive Income. Fees allocated to the capital column are taken to the Capital reserve.

(g) Foreign currencyThe Company's shares were issued in US dollars and the majority of the Company's investments are priced in US dollars and this is considered to be the functional currency of the Company. Therefore, it is the Company's policy to present the accounts in US dollars. The Company's shares are traded in sterling on the Alternative Investment Market ('AIM').

Assets and liabilities held in currencies other than US dollars are translated into US dollars at the official market rates of exchange prevailing at the reporting date. Currency gains and losses arising on retranslating investments are allocated to the capital column of the Statement of Comprehensive Income. All other currency gains and losses are allocated to the capital or revenue columns of the Statement of Comprehensive Income depending on the nature of the transaction.

(h) Finance costsFinance costs include interest payable and direct loan costs. In line with the Company's policy for investment management fees, two thirds of finance costs are allocated to the capital column of the Statement of Comprehensive Income. Fees allocated to the capital column are taken to the capital reserve. Loan arrangement costs are amortised over the term of the loan on an effective interest rate basis.

(i) Financial liabilitiesThe Company's financial liabilities include borrowings and other payables. Financial liabilities are recognised when the Company becomes a party to the contractual provisions of the financial instrument, and are measured initially at fair value adjusted for transaction costs. A financial liability is derecognised when it is extinguished, discharged, cancelled or expires. Financial liabilities are measured subsequently at amortised cost using the effective interest method. At the year end and at the date of this report, the Company did not have any borrowings.

(j) Cash and cash equivalentsCash and cash equivalents in the financial statements comprise cash held at the bank or by the custodian.

(k) Operating segmentsIFRS 8, 'Operating segments' requires a 'management approach', under which segment information is presented on the same basis as that used for internal reporting purposes. The Board, as a whole, has been determined as constituting the chief operating decision maker of the Company. The Board has considered the requirements of the standard and is of the view that the Company is engaged in a single segment of business, which is to generate long-term capital growth for its shareholders by investing in a diversified portfolio of funds and other investment products which derive their value from Frontier Markets.

The Board of Directors is responsible for ensuring that the Company's investment objective is followed. The day-to-day implementation of this has been delegated to the Investment Manager but the Board retains responsibility for the overall direction of the Company. The Board reviews the investment decisions of the Investment Manager at regular Board meetings. The Investment Manager has been given full authority to make investment decisions on behalf of the Company in accordance with the investment objective.

(l) Unconsolidated structured entities

Changes in fair value of investments, including structured entities, are included in the Statement of Comprehensive Income.

(m) New standards, interpretations and amendments

The Company has adopted IFRS 9 Financial Instruments, which became effective on 1 January 2018. IFRS 9 replaces IAS 39, 'Financial Instruments: Recognition and measurement'. It includes revised guidance on the classification and measurement of financial instruments; a new expected credit loss model for calculating impairment of financial assets and new general hedge accounting requirements. It also carries forward the guidance from IAS 39 regarding recognition and derecognition of financial instruments. Adoption of this standard did not have a material impact on the classification of financial assets and liabilities of the Company, because the financial instruments, measured at fair value through profit or loss ("FVTPL") under IAS 39, are managed on a fair value basis in accordance with a documented investment strategy. Accordingly, these financial instruments have been mandatorily measured at FVTPL under IFRS 9. There has been no restatement in the comparative figures for the period ended 30 June 2018 as a result of adopting IFRS 9.

There are no other new standards, interpretations or amendments, which have been endorsed by the EU and became effective during the year that have had a material impact on the Company.

(n) Critical accounting estimates and judgements in applying accounting policies

The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are continually evaluated and based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual results could differ from such estimates. These financial statements have been prepared on a going concern basis, which the Directors of the Company believe to be appropriate.

The most critical judgements and estimates that management have made in the process of applying the Company's accounting policies and that have the most significant effect on the amounts recognised in the financial statements are the functional currency of the Company (see note 1(g)) and the fair value estimation of financial assets held at fair value through profit or loss (see notes 1(b) and 15).

(o) Going concern

The Directors have adopted the going concern basis of accounting in preparing these financial statements. The Directors formally considered the Company's going concern status at the time of the publication of these financial statements and a summary of their assessment is provided below.

The Directors have a reasonable expectation that the Company has adequate operational resources to continue in existence for at least twelve months from the date of approval of the Annual Report. In reaching this conclusion, the Directors have considered the liquidity of the Company's portfolio of investments as well as its cash position, income, expenses and other outflows. The Company has substantial operating expenses cover.

In light of the discount control policy approved by shareholders on 17 October 2018 and disclosed in the Chairman's Statement, the Board recognises that, although the Company has substantial resources to cover the Company's expenses and other costs likely to be faced by the Company for at least 12 months from the date of approval of this Annual Report, there exists a level of material uncertainty as to whether the performance of the Company will exceed the performance of the portfolio's Reference Benchmark.

Based on the above assessment, the Directors are satisfied that it is appropriate to adopt the going concern basis of accounting in preparing these financial statements.

2 Investments at fair value through profit or loss

Fair value estimation 

The Company complies with IFRS 13. The Company's investments are valued at fair value.

IFRS 13 requires the Company to classify its investments in a fair value hierarchy that reflects the significance of the inputs used in making the measurements. IFRS 13 establishes a fair value hierarchy that prioritises the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of fair value hierarchy under IFRS 13 are as follows:

·; Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1).

·; Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2).

·; Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3).

The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is determined on the basis of the lowest level input that is significant to the fair value measurement in its entirety. For this purpose, the significance of an input is assessed against the fair value measurement in its entirety. If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs, that measurement is a level 3 measurement. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgement, considering factors specific to the asset or liability.

The determination of what constitutes 'observable' requires significant judgement by the Company. The Company considers observable data to be that market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market.

The classification of the Company's investments at fair value through profit or loss as at 30 June 2019 is detailed in the table below:

Investments whose values are based on quoted market prices in active markets, and therefore classified within Level 1, include active listed equities. The Company does not adjust the quoted price for these instruments.

Investments that trade in markets that are not considered to be active but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs are classified within Level 2. These include monthly priced funds.

Investments classified within Level 3 have significant unobservable inputs as they trade infrequently. As at the year end, there were no level 3 classified investments. Sustainable Capital Africa Consumer Fund ('SCACF') was redeemed during the year. There remained a residual value being due to the Company equivalent to the value of SCACF's underlying holding in Delta Corporation Limited. As at 30 June 2019 the residual value due to the Company stood at $275,000.

Reconciliation of the Level 3 classification investments during the year to 30 June 2019 is shown below:

* These adjustments form part of the '(Losses)/gains on Investments' figure in the Statement of Comprehensive Income.

The valuation policies used by the Company are explained in the Accounting Policies Note 1(b).

3 Income

4 Investment management fees and other expenses

* The Manager has agreed to reduce the management fee to the extent necessary in an attempt to ensure that the Company's Ongoing Charge Ratio ('OCR'), as calculated in accordance with the guidance issued by the Association of Investment Companies does not exceed 2.00%, but such rebate to be capped at a level of one third of the Manager's annual fee. There can, therefore, be no guarantee that the overall OCR of the Company will, even given any rebate by the Manager, be limited to 2.00%.

The Company's ongoing charges for the year ended 30 June 2019 calculated in accordance with the AIC methodology was capped at 2.00% (2018: 2.01%). The ongoing charges figure does not include finance costs.

Further details on the management agreement are provided in the Directors' Report contained within the Annual Report. The Company has agreed to pay a fee to Aberdeen Asset Managers Limited for the provision of promotional activities at an annual rate of £22,000 with effect from July 2018 (prior to that, the fee was at an annual rate of £26,600).

5 Finance costs

6 Directors' fees

The fees paid or accrued were $116,000 (2018: $122,000). There were no other emoluments. Full details of the fees of each

Director are given in the Directors' Remuneration Report contained within the Annual Report.

7 Taxation

The Company is resident for tax purposes in Guernsey.

The Company is exempt from Guernsey income tax under the Income Tax (Exempt Bodies) (Guernsey) Ordinances 1989 and 1992 and was charged an annual exemption fee of £1,200 (2018: £1,200) during the year.

During the year, the Company suffered foreign withholding tax on income from investments totalling in aggregate $189,000 (2018: $233,000).

8 Losses per Ordinary Share

Losses per Ordinary Share is based on the net loss of $9,642,000 (2018: loss of $8,039,000) attributable to the weighted average of 75,734,498 (2018: 85,316,533) Ordinary Shares of no par value in issue during the year to 30 June 2019.

Supplementary information is provided as follows:

Revenue reserve per Ordinary Share for the year is based on the net revenue reserve profit of $984,000 (2018: revenue reserve profit of $1,016,000) attributable to the weighted average of 75,734,498 (2018: 85,316,533) Ordinary Shares of no par value in issue during the year to 30 June 2019.

Capital reserve per Ordinary Share for the year is based on the net capital reserve loss of $10,620,000 (2018: capital reserve loss of $9,055,000) attributable to the weighted average of 75,734,498 (2018: 85,316,533) Ordinary Shares of no par value in issue during the year to 30 June 2019.

9 Loans and overdraft facility payable

During the year, the Company had a $600,000 temporary overdraft facility with Northern Trust (Guernsey) Limited ('NT') from 24 May 2019 to 14 June 2019 (2018: $5,000,000 temporary overdraft facility with NT from 17 March 2017 to 6 July 2017).

10 Share capital

Movement in Ordinary Shares of no par value

Voting rights

At General Meetings of the Company, every member present in person or proxy shall have one vote for every Ordinary Share of which they are the registered holder.

Tender offer

On 17 October 2018, the Company received valid tenders for 12,689,991 Ordinary Shares.

Following the implementation of the Tender Offer, the Company has 73,212,617 Ordinary Shares in issue (including 1,302,500 Shares of which will be held in treasury and for which the exercise of voting rights will be suspended). The total number of Ordinary Shares with voting rights in the Company is 71,910,117 and this figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company.

The total value of validly tendered Ordinary Shares in the period was $8,745,000. The distribution to shareholders who had validly tendered shares took place during the week commencing 29 October 2018.

Other purchases of own shares

There were no other Ordinary Shares re-purchased during the year ended 30 June 2019 (2018: 852,500 Ordinary Shares re-purchased during the year at an aggregate cost to the Company of $679,000, all of which are held in treasury).

11 Net Assets Value ('NAV') per Ordinary Share

Net assets per Ordinary Share of $0.6760 (2018: $0.8090) is based on net assets of $48,6154,000 (2018: $68,440,000) divided by 71,910,117 (2018: 84,600,108) Ordinary Shares in issue (excluding shares held in treasury) as at the year end date.

12 Related party transactions

Details of the management contract can be found in the Directors' Report on contained in the Annual Report. Fees payable to the Investment Manager are detailed in note 4. Other payables include accruals of basic management fees of $40,421 (2018: $57,033).

Aberdeen Asset Management PLC shareholding in the Company as at year end stood at 13,750,000 (2018: 13,750,000) Ordinary Shares.

The Directors' shareholdings in the Company as at year end are disclosed in the Corporate Governance Statement contained within the Annual Report.

13 Dividends paid

The Board is recommending to shareholders the payment of a final dividend for the year end of 1 cent per Ordinary Share. If approved by shareholders at the Annual General Meeting on 10 December 2019, this dividend will be paid on 18 December 2019 to those shareholders on the register on 15 November 2019. The ex-dividend date will be 14 November 2019. The final dividend will be paid in sterling and the sterling dividend rate will be announced in due course.

14 Subsequent eventsThere are no subsequent events related to the Company since the year ended 30 June 2019 and up to the date of this report.

15 Financial information

The financial information in this announcement is derived from the audited financial statements for the year ended 30 June 2019.

The Annual Report for the year ended 30 June 2019 was approved by the Board of Directors on 25 September 2019. It will be made available on the Company's website aberdeenfrontiermarkets.co.uk and will be posted to Shareholders. It will also be available from the registered office of the Company.

16 Annual General Meeting

The Annual General Meeting of Aberdeen Frontier Markets Investment Company Limited will be held at 11 New Street, St Peter Port, Guernsey at 11:00 a.m. on 10 December 2019.

Alternative Performance Measures ('APMs')

www.aberdeenfrontiermarkets.co.uk

Registered office

11 New Street

St Peter Port

Guernsey

GY1 2PF

Enquiries:

Aberdeen Standard Fund Managers Limited (Alternative Investment Fund Manager to Aberdeen Frontier Markets Investment Company Limited)

William Hemmings / Gary Jones

Tel: +44 (0)20 7463 6000

Grant Thornton UK LLP (Nominated Adviser)

Philip Secrett

Tel: +44 (0)20 7383 5100

Numis Securities Limited (Nominated Broker)

David Benda

Tel: +44 (0) 20 7260 1275

25 September 2019

END