REG - abrdn Latin American - Annual Financial Report
11/11/2022 07:17
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20221111:nRSK0508Ga&default-theme=true
RNS Number : 0508G abrdn Latin American Income Fund Ld 11 November 2022
ABRDN LATIN AMERICAN INCOME FUND LIMITED
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 31 AUGUST 2022
Legal Entity Identifier (LEI): 549300DN623WEGE2MY04
Performance Highlights
Ordinary share price total return(A) Earnings per Ordinary share (revenue)
+0.3% 4.84p
2021 +20.9% 2021 2.66p
Net asset value total return(A) Dividends per Ordinary share
+6.8% 3.50p
2021 +17.4% 2021 3.50p
Benchmark total return Discount to net asset value per Ordinary share(AB)
+11.5% 17.3%
2021 +17.5% 2021(B) 11.4%
(A) Considered to be an Alternative Performance Measure. Further details can
be found below.
(B) At 31 August.
Source: abrdn, Morningstar, Russell Mellon, Lipper & JPMorgan
Financial Calendar, Dividends and Highlights
Annual General Meeting (Jersey) 14 December 2022
Payment dates of interim dividends 27 January 2023
26 May 2023
28 July 2023
27 October 2023
Half year end 28 February 2023
Expected announcement of results for April 2023
six months ending 28 February 2023
Financial year end 31 August 2023
Expected announcement of results for year November 2023
ending 31 August 2023
Dividends
Rate xd date Record date Payment date
1st interim 2022 0.875p 6 January 2022 7 January 2022 28 January 2022
2nd interim 2022 0.875p 5 May 2022 6 May 2022 26 May 2022
3rd interim 2022 0.875p 7 July 2022 8 July 2022 29 July 2022
4th interim 2022 0.875p 6 October 2022 7 October 2022 28 October 2022
Total dividends 2022 3.500p
Rate xd date Record date Payment date
1st interim 2021 0.875p 7 January 2021 8 January 2021 29 January 2021
2nd interim 2021 0.875p 13 May 2021 14 May 2021 28 May 2021
3rd interim 2021 0.875p 8 July 2021 9 July 2021 30 July 2021
4th interim 2021 0.875p 7 October 2021 8 October 2021 29 October 2021
Total dividends 2021 3.500p
31 August 2022 31 August 2021 % change
Total assets (see definition on page 110 of the 2022 Annual Report) (£'000) 41,572 41,419 0.4
Total equity shareholders' funds (net assets) (£'000) 36,072 35,919 0.4
Market capitalisation (£'000) 29,842 31,841 -6.3
Ordinary share price (mid market) 52.25p 55.75p -6.3
Net asset value per Ordinary share 63.16p 62.89p 0.4
Discount to net asset value per Ordinary share(AB) 17.27% 11.35%
Net gearing (see definition on page 109 of the 2022 Annual Report)(AB) 14.98% 14.37%
Dividends and earnings
Total return per Ordinary share 3.77p 9.74p
Earnings per Ordinary share (revenue) 4.84p 2.66p 82.0
Dividends per Ordinary share 3.50p 3.50p
Dividend cover(AB) 1.38 times 0.76 times
Revenue reserves(B) (£'000) 2,248 1,482
Operating costs
Ongoing charges ratio(AC) 2.00% 2.00%
(A) Considered to be an Alternative Performance Measure. Further details can
be found below.
(B) Excludes payment of fourth interim dividend of 0.875p (2021 - 0.875p) per
Ordinary share equating to £500,000 (2021- £500,000) as this was made after
the year end.
(C) Details of a cap on the ongoing charges ratio can be found in notes 6 and
17 to the financial statements on pages 82 and 98 respectively.
Chairman's Statement
Overview
The last twelve months have been volatile for investors. Not only have Latin
American economies had to deal with the more inflationary post-Covid
environment, as fuel and energy prices rose, but they have also had to contend
with the pressure of an uncertain political landscape.
For the Company this has led to contrasting fortunes for its two asset classes
over the period. Equities underperformed, predominantly due to a shift in
market focus from growth to value stocks. At the same time, the fixed income
sleeve was more successful, as the bond investments targeted by your Manager
benefited from the rising yield curve. With inflationary pressures leading to
higher yields, but the same environment punishing long-term quality growth
stocks, overall the Company's net asset value ("NAV") rose 6.8% in total
return terms over the year ended 31 August 2022, compared with an increase of
11.5% for the benchmark. The share price was broadly flat over the period,
ending the year at 52.25p.
Despite this recent volatility in markets, your Manager is confident in the
region's long-term growth potential and has also taken steps to ensure the
Company is sufficiently defensive in the current macro environment. You can
find out more detail on this later in this statement and in the Investment
Manager's Review on pages 11 to 14 of the 2022 Annual Report, along with a
more detailed explanation of performance.
Looking over the full year to 31 August 2022, there were three main themes at
play:
1) monetary policy and interest rate increases;
2) domestic politics and a very busy election calendar; and
3) global events, most notably the shockwaves felt worldwide from Russia's
invasion of Ukraine.
Focusing on monetary policy first, central banks in Latin America moved
swiftly to tackle the spiralling post-pandemic inflation we have witnessed.
The Banco Central do Brasil, which has recently gained full independence, was
first to act and has now taken the base rate from a low of 2% to 13.75%. Chile
has raised rates to 11.25%, while Colombia increased them to 11%. Others are
still likely to climb higher. In August, the Bank of Mexico raised the base
rate to 8.5%, its highest in 16 years.
Looking at the region as a whole, it is clear central banks have been well
ahead of the rate-rising cycles of other emerging and developed markets with
India's rising to 5.4% and the US Federal Reserve increasing rates six times
in 2022 (up to 4% in November), whilst the European Union only started with a
rise to 1.25% in September, with a further increase to 2% on 27 October 2022.
In terms of the impact of these central bank policies on markets, the rate
rises were particularly painful for the Company's equity holdings and have
penalised some of the more expensive growth-style stocks favoured by your
Manager. On the plus side, the rate rises were fairly positive for fixed
income - in Brazil, for example, the large rises benefited domestic bond
returns in the medium term.
Political risk has been another important factor, with several high-profile
elections over the year. Colombia elected its first-ever left-wing president
Gustavo Petro, who stood on a platform of land reform, universal healthcare
and promises to continue his country's commitment to the peace process; and
Chile, meanwhile, voted in the relatively inexperienced 36-year-old Gabriel
Boric (another left-winger) as president. After our year end, Chile went to
the polls again, for a constitutional referendum which was roundly rejected by
voters, seeing it as too radical (the current constitution dates back to the
days of General Pinochet).
In Peru, asset classes saw significant improvement over the year. The country
had already witnessed a massive sell-off in equities and bonds in 2021,
following the election of left-winger Pedro Castillo, prior to the start of
this reporting period. For investors, political risk now appears to have
somewhat diminished. One area to note though in Peru, is its approval of early
withdrawals from pension funds, to support the country's recovery from the
pandemic and the impact of surging global prices. While these actions can help
in stabilising the economy, they also fuel higher inflation and withdrawal of
pension savings in previous years from Peru and Chile resulted in sovereign
downgrades.
Naturally, elections in Latin America's largest economy, Brazil, have been a
global talking point, as the incumbent Jair Bolsonaro, seeking a second term
in office, ran against former president Lula. Even though the election fell
outside the year covered by this report, the atmosphere of uncertainty posed
by Brazil's vote - including doubts cast by Bolsonaro of the legitimacy of the
election process - have been a headwind for Brazil's asset classes. In the run
up to the election, we also saw some fiscal loosening. This was a concern for
investors because it runs the risk of losing the fiscal anchor (a ceiling on
spending, deficit, or debt) that has played an important role in improving
Brazil's balances. Brazil is running a primary fiscal surplus for the first
time in a long while.
Finally, wider global events have of course had a major impact on the region's
fortunes. Extreme weather events and, most notably, war in Ukraine have
resulted in higher commodity prices and put pressure on the global supply
chain. Economies in Latin America are highly sensitive to commodity prices.
Brazil is a large exporter of soybean and iron ore, while Chile and Peru are
notable exporters of copper. Oil is a key concern, with Peru and Chile large
importers and countries such as Mexico being large exporters. While some
businesses have seen a positive impact from higher energy prices, in the long
run, higher food and fuel prices add to the inflationary environment that has
led central banks to start raising policy rates.
At the portfolio level, there were mixed fortunes over the period. In terms of
equities, interest rate rises and the higher cost of capital have penalised
some of the quality growth stocks favoured by your Manager. The Company's
fixed income performance, on the other hand, has been much better, with the
decision not to take exposure to Chile, one of the worst performers, and a
substantial overweight to Uruguay which has fared well. In terms of
positioning over the period, with the changing macro picture, your Manager has
focussed on ensuring the portfolio is resilient to the global environment and
adopted a slightly more defensive stance. From an equities perspective, this
meant exiting some smaller growth stocks and those exposed to reducing
consumer demand in the face of inflationary pressures and either reinvesting
in companies where the Manager has higher conviction, or moving into areas
like telecoms which your Manager believes will be more resilient. Meanwhile,
anticipating a moderation in inflation as central banks in the region near the
end of the hiking cycle, your Manager is moving towards fixed income assets
with a longer duration.
For more on portfolio activity and wider performance, read the Investment
Manager review on pages 11 to 14 of the 2022 Annual Report.
Results and Dividends
The earnings per share for the year ended 31 August 2022 were 4.84p (2021:
2.66p), reflecting an 82% increase over 2021 with a recovery in dividend
pay-outs post-pandemic and importantly strengthened foreign exchange rates
versus sterling. The Company was able to return to paying a fully covered
dividend this year and has continued to pay four interim dividends of 0.875p
per share (2021: 0.875p) in respect of the financial year, maintaining the
total level of dividends for the year at 3.5p per share (2021: 3.5p). As
stated in previous reports, the Board is aware of the importance of income to
the Company's shareholders, particularly during times of prolonged market
stress, and has maintained the dividend throughout with that in mind, using
the revenue reserve built previously in order to maintain the level of
dividend in difficult times. Following the payment of dividends during the
financial year, the Company has carried forward a healthy £2.25 million in
its revenue reserve (2021: £1.48m), representing 0.9 times the current level
of dividend after accounting for the payment of the fourth interim dividend.
The Board is pleased that the Manager continues to support the Company to
ensure that its ongoing charges ratio ("OCR") does not exceed 2.0% when
calculated annually as at 31 August. To the extent that the OCR exceeds 2.0%,
the Manager continues to rebate part of its fees in order to reduce the ratio
down to 2.0%. Subsequent to the year end, a sum of £132,000 (2021: £127,000)
had been repaid by the Manager to the Company in order to maintain the OCR at
2.0%.
Portfolio
During the year, the allocation between equities and bonds has remained
relatively stable. At the financial year end, the portfolio comprised 61.9% in
equities and 38.1% in bonds (2021: 64.5% equities, 35.5% bonds). The Board and
Manager will continue to keep this portfolio split under review to seek to
exploit market opportunities.
Share Capital
There has been no change to the Company's share capital structure during the
financial year. The Company has not bought back any shares, or issued any
shares, in light of the volatile markets witnessed. However, the Company will
make selective use of buybacks, subject to prevailing market conditions and
having regard to the size of the Company, where it would be in the best
interests of shareholders to do so. At the time of writing, the Company's
Ordinary share price discount to NAV is 11.2%.
Gearing
The Company has a £6 million two year unsecured revolving multi-currency loan
facility with The Bank of Nova Scotia, London Branch, which expires on 14
August 2023. At the year-end £5,500,000 was drawn down (2021 - £5,500,000).
The Board continues to monitor the level of gearing under recommendation from
the Manager and in light of market conditions.
Board Changes
As announced in the Company's Half-Yearly Report, the Directors were delighted
to welcome Michael Gray to the Board on 18 February 2022, following the
retirement of Richard Prosser. Michael brings a wealth of experience as a
non-executive director of closed-end funds and a knowledge of investment
management that complements the balance of skills and experience on the Board
as a whole.
Annual General Meeting
This year's Annual General Meeting ("AGM") will be held on Wednesday, 14
December 2022 at 10:00 a.m. at the offices of abrdn Capital International
Limited, 1st Floor, Sir Walter Raleigh House, 48-50 Esplanade, St Helier,
Jersey JE2 3QB. I hope that shareholders will be able to attend the AGM,
following a two year hiatus owing to the global pandemic, and I look forward
to meeting shareholders on the day.
As usual, the Board encourages all shareholders to exercise their votes in
respect of the meeting in advance to ensure that votes are registered and
counted at the meeting.
The Board welcomes questions from our shareholders and I would ask that
shareholders submit questions to the Board prior to the AGM, and in any event
before Friday, 9 December 2022. The Board or the Investment Manager will
respond to all questions received. You may submit questions to the Board by
email to latin.american@abrdn.com.
Outlook
My predecessor as Chairman, Richard Prosser, commented last year that the
outlook for Latin America was brighter, although the Board remained mindful of
remaining risks. This remains true. And while some of these risks have
diminished - economies have continued to reopen post pandemic - others have
also emerged.
For now, GDP forecasts for the region, which were downgraded in the second
quarter, appear to be improving. Brazil's economic ministry has raised
expectations for its 2022 growth figure to 2.7%. Central banks have been quick
to react to rising inflation and have made adjustments to weather the
environment of rising prices. In Brazil, inflation has already been falling
since July (as measured by the IPCA benchmark inflation index). If, as is
hoped, the period of interest rate hikes is coming to an end, it could be
expected that inflation rates elsewhere in the region reach their peak as
early as next year.
Furthermore, with the most recent run of elections now out of the way, I
believe we are now moving from what has been an extremely volatile period over
the last 18 months to potentially a calmer environment, one that should give
investors greater visibility - and make for more stable market conditions.
Looking to the longer term, Latin America continues to be an appealing
investment destination. The region is full of great promise and is home to
assets that are attractively valued compared with other emerging markets and
developed economies. Your Board remains convinced by your Manager's focus on
the wealth of opportunities that are backed by major structural drivers, such
as the emerging power of middle-class consumers, increased digitalisation and
the growth of green technologies.
The Manager's recent focus has been to tilt the portfolio to a more defensive
positioning but the commitment to quality remains undiminished. The portfolio
still retains its diverse pool of income-supporting bonds, combined with
quality stocks trading at attractive valuations. With improving results at an
individual company level, we expect to benefit from exposure to
underpenetrated sectors such as financial services, domestic consumption,
healthcare, infrastructure, renewables and digitalisation trends. Your Manager
remains focussed on companies that are well-run, with solid financials, clear
competitive advantages and that are committed to good environmental, social
and governance ("ESG") practices. The focus on quality is essential to
delivering sustainable long-term returns for all shareholders.
Howard Myles
Chairman
10 November 2022
Investment Manager's Review
Performance Commentary
Latin American markets rallied over the review period, which was marked by
intensifying price pressures as the region, and the world, began its
post-pandemic recovery. Amid economies reopening and consumers worldwide
unleashing their pent-up demand for goods, services and travel, rising
inflation became a key driver of market events. Steepening inflation, evident
since 2021, was exacerbated in February 2022 by Russia's invasion of Ukraine.
The ensuing sanctions on Russia's export of oil and commodities led to the
prices of these resources skyrocketing. By March, a month into the invasion,
oil prices had soared to their highest levels since 2008. This turned out to
be a boon for resource rich countries in Latin America, in particular Brazil
and Chile, which boasted double-digit equity returns for the period. At the
end of the Company's financial year, Latin American stocks had outperformed
all other equity markets outside of the Middle East oil-rich region, thanks to
the stellar performances of the region's energy and commodity companies.
Having said that, while Latin America's miners and energy producers benefited,
spiralling fuel prices hit the everyday consumer hard, driving food and travel
costs too high, too quickly. The reaction from central banks, was to limit
liquidity in the market by raising interest rates. "Interest rate hiking"
almost became a catchphrase globally for the second half of the Company's
financial year, but we must acknowledge that Latin American central banks were
ahead of their peers in this respect, having begun their monetary policy
tightening towards the end of 2021. This meant that while most equity markets
in recent months were rocked by the US Federal Reserve's (the "Fed")
aggressive rate increases (4% at the time of writing), Latin American stocks
were far more resilient, having already priced in monetary tightening since
late 2021 and even earlier for Brazilian equities. At the time of writing,
interest rates in Brazil, Chile, Colombia and Mexico stand at 13.75%, 11.25%,
11% and 9.25% respectively, compared to other emerging markets like India
(5.9%), Indonesia (4.75%) or Poland (6.75%), for example. In the case of
Brazil, whose central bank was earliest to act, the strategy has visibly borne
fruit. Despite the continued interest rate hikes the Brazilian government bond
market outperformed major emerging markets.
On the downside, however, the evolving domestic political landscape has been
somewhat of a drawback for investors. Major political events in Chile,
Colombia, Peru and Argentina led to investors taking a more cautious approach
towards these regional markets. There has been a palpable change in the
political tide, as dominant right-wing parties were voted out in favour of
leftist, socially-oriented leadership in Chile and Colombia. This led to
capital flight, putting pressure on the currencies and the bond markets.
Meanwhile, Brazil's presidential elections have been intense and have left
investors uncertain. While the polls seemed to favour former,
leftist-president Luis Inacio Lula da Silva over the incumbent right-winger,
President Jair Bolsonaro, the latter had a surprisingly strong result after
the first round of voting on 2 October 2022. Lula won 48% of the votes against
Bolsonaro's 43% but fell short of the clear majority of over 50% of valid
votes required to prevent a run-off. He eventually secured his lead on 30
October, with 50.9% of the votes against Bolsonaro's 49.1% and the transition
process for the new president-elect has begun. Overall, despite these bouts of
uncertainty and sporadic market weaknesses, Latin American stocks generally
had a robust year and emerged top of their asset class.
Against this backdrop, the Company's portfolio underperformed its benchmark
over the year, with the net asset value increase of 6.8% lagging the composite
benchmark's 11.5% rise. This relatively weaker overall performance was
primarily due to the weaker performance of the equity sleeve of the portfolio,
which returned 3.34% versus the index's 10.79% gain. This underperformance was
attributable to the equity market shift away from growth stocks, that had
proved relatively robust during the pandemic, towards value. The tighter
monetary climate drove investors to rebalance their portfolios, preferring to
invest instead in utilities and commodity stocks instead of growth-oriented
stocks, such as technology and ecommerce. Unfortunately, this market rotation
undermined the Company's strategic longer-term focus on quality growth stocks.
In contrast, our fixed income exposure in the portfolio did better. Our large
overweight exposure to Uruguay had a major positive contribution to relative
performance, as did the lack of any exposure to Chile which, together with
Colombia, significantly underperformed other regional markets. Uruguay's good
performance was attributable to a strong soybean harvest, which is a key
export for the country. Additionally, rising food prices helped the Uruguayan
peso outperform its neighbours over the period due to its position as a major
exporter of beef. Meanwhile, Chile, one of the world's top copper producers,
struggled over the year due to lower copper prices. A severely weakened
Chilean peso alongside a stronger US dollar also negatively affected the
country's performance, despite a US$25 billion intervention by its central
bank that had aimed to quell exchange-rate volatility. Colombia also had a
difficult year, as the country's July inflation number was 10.2% year on year,
which was its highest reading in over a decade. The Colombian peso was also
weighed down by the interest-rate hikes from the Fed and the strong US dollar,
along with a growing import bill and profit remittances from commodity
companies operating in the country but actually based outside.
Looking more closely at the performance of your Company's underlying stock
holdings, the exposure to companies linked to dynamic growth themes which we
had considered in our process, such as ecommerce, digitalisation and
renewables were punished by the steepening of yield curves across the globe.
As such, the portfolio's exposure to XP Investimentos, which is the largest
brokerage firm in Brazil, detracted, as did its exposures to renewable energy
producer Raizen, and software services provider Totvs. Additionally, Sequoia,
which largely benefited from the increased demand in ecommerce-related
logistics, massively corrected on the back of concerns over slowing global
growth and its impact on this ecommerce demand. Sequoia's share price was also
hurt as its margins were shrinking due to higher-than-expected operational
costs, in particular, from the cost of diesel. Over the year, we exited XP and
Sequoia, but we have kept your Company's exposure to Raizen and Totvs, which
are well thought of stocks, that we think will benefit returns in the longer
term.
In terms of the portfolio's performance by sector, the lower exposure to the
energy sector detracted the most. While your Company's exposure to Brazilian
state-owned petroleum producer Petrobras added to overall returns as prices
soared, the underweight exposure compared to the benchmark once again hurt
relative returns. Petrobras rallied amid the surge in crude oil prices, and
investors were doubly enthusiastic when the company announced record
dividends. Investors were also optimistic about the talk of possible
privatisation of the company following a new business plan that stressed
capital discipline and a commitment to dividends. Although we gradually
increased our exposure to this stock over the second half of the year, our
underweight exposure negatively impacted the portfolio's relative performance.
More positively, the exposure to Geopark, which is not in the benchmark,
helped. The Colombian oil and gas explorer did well over the period and lifted
performance. The company also cheered investors by increasing its quarterly
dividends for the third time in a year.
Elsewhere, the exposure to materials stocks was mixed. Brazilian miner Vale
was the top contributor, as the company's shares recovered from the weakness
in iron ore prices seen at the start of the year and rose in tandem with other
commodity producers in the region. Our lack of exposure to Mexican building
materials company Cemex was also a positive with the company lagging the
benchmark over the period. Having said that, not holding Chilean miner and
fertiliser producer SQM proved costly, as investors remained bullish on the
prospects for lithium prices due to rising demand levels. Ultimately, as
bottom-up stock pickers, our investment decisions are driven by company
fundamentals rather than short-term market trends, and with that in mind, we
will continue with our due diligence and keep a close eye on the company's
progress.
What did help were our decisions on holdings in the consumer sector. Your
Company benefited from not holding cosmetics group Natura & Co. and from
the underweight to Magazine Luiza as we exited the stock during the year. The
exposure to footwear retailer Arezzo also proved beneficial.
Portfolio Activity
The key portfolio changes on the equity side centred around the holdings in
Brazil, and our attempt to reposition the portfolio against the downside risks
of shrinking domestic consumer demand due to the inflationary pressures
mentioned above. To this end, we sold several consumer discretionary holdings,
such as fast food franchise BK Brasil, clothing department store Lojas Renner,
retail chain Magazine Luiza and ecommerce retailer Mobly. We also exited
Chilean shopping malls' operator Parque Arauco on the back of the more
challenging outlook for discretionary spending. Instead, we took advantage of
attractive valuations to take a position in Assai, a leading cash and carry
Brazilian retailer that we think is well-positioned to capture consumers'
changing habits.
Additionally, we also sought to reduce exposure to growth stocks that were
punished by the market rotation brought about by steeper borrowing prices. We
therefore exited growth names such as education software firm Arco and online
services platform GetNinjas in favour of better opportunities elsewhere, as
well as selling Sequoia and XP, as mentioned earlier.
While there has been a traditional focus on high-quality growth stocks as we
sought to tap into the demographics of the region with its large and growing
middle class base, we have simultaneously kept a watchful eye on high-quality
value stocks. For example, Telefonica Brasil, which we introduced during the
year, is the leading telecommunications company in Brazil. We had been
cautious about the sector due to its capital intensity and a stringent
regulatory environment, but we continued to do our due diligence and decided
to introduce the holding as we believe that the Brazilian telecommunications
will benefit from an improving competitive and regulatory environment. Earlier
in the year, we had introduced three other value stocks, including junior
exploration and production company 3R Petroleum, Peru's leading banking
franchise Credicorp, and vertically integrated pulp and paper producer Klabin.
We funded these new acquisitions through the sale of our sub-scale positions
in renewable energy holdings, Omega and Weg.
Meanwhile, on the fixed income side, in the first half of the year, we had
taken a more defensive approach in the face of rising inflation, reducing our
duration exposure in Brazil, Mexico, Peru and Uruguay. Towards the end of the
Company's financial year, we cautiously started adding back longer-duration
bonds to the portfolio as the monetary policy tightening cycles matured and we
observed what we considered to be the peak of the inflationary pressures.
ESG Engagement
During the year we continued our engagement with companies on various ESG
matters, with a focus as always on collaboratively improving long-term quality
for investors.
For example, in line with promoting good governance, we continued our efforts
with Assai to help strengthen the group's corporate governance credentials.
Elsewhere, we communicated with the Board of Vale with feedback regarding its
board refreshment program, in view of the 2023 board election. We also met
with the management of Raizen and Klabin's board members to discuss various
governance topics, and we collaborated with the Brazilian stock-exchange, B3,
to discuss issues around diversity at the board level. We are in the process
of formulating suggestions to contribute to the public hearing on ESG
enhancements, and diversity and integration requirements for listed companies.
In the area of sustainability, we engaged with Arezzo in order to get a
detailed view on some aspects of the company's operations, as well as to
suggest some improvements in disclosure and practices, particularly regarding
raw material sourcing, carbon footprint and chemical safety. Lastly, we
engaged with 3R's new chairman to discuss board functioning, strategy and risk
management, including the company's offshore operations.
Outlook
With the region's clamorous election season gradually drawing to a close, we
expect foreign capital to return to Latin America as investors start to regain
confidence in the respective new administrations. Brazil remains a country to
watch, at least until the end of the year, with the transition of the
president-elect ongoing.
As a result, we are cautiously optimistic about the near-term outlook for your
Company's equity and bond investments in Latin America. Amid changing
governments and political alliances, we have observed that fiscal policies in
the region have been disciplined, and we believe this will continue. On that
front, if inflation continues to stabilise, and we are seeing signs of that
now, we expect that by early next year, Latin American central banks should
gradually begin loosening interest rates. This will be a challenge for the
region, as it will be for central banks around the world - to manage the fine
line between keeping inflation in check whilst, at the same time, not holding
back economic growth.
We also expect the demand for energy and commodities to remain strong,
especially if the Russia-Ukraine conflict remains unresolved. However, we are
cognisant of the headwinds, such as slowing demand from China, which has
already weighed on GDP growth forecasts for the region, as well as supply
chain bottlenecks due to geopolitical uncertainties.
At the individual stock level, while we have begun investing in holdings that
we had traditionally avoided due to the stringent regulatory environment or
due to the cyclical nature of these businesses, we have done this now after
rigorous due diligence, and with confidence that these new additions to the
portfolio will serve to enhance the value of your Company. We will also
continue to position the Company's portfolio around the dynamic structural
growth themes in the region, which we feel will allow it to deliver
sustainable returns for shareholders in the longer term. With this is mind, we
remain committed to seeking out fundamentally strong, quality companies that
can stand the test of time and periods of upheaval, and will ultimately
benefit shareholders for several years to come.
Brunella Isper and Viktor Szabó
Aberdeen Asset Managers Limited
10 November 2022
Overview of Strategy
Investment Objective and Business Model
The Company aims to provide private and institutional investors with exposure
to the above average long-term capital growth prospects of Latin America
combined with an attractive yield.
The business of the Company is that of an investment company and the Directors
do not envisage any change in this activity in the foreseeable future.
Investment Policy and Approach
The Company invests in:
- companies listed on stock exchanges in the Latin American
region;
- Latin American securities (such as American Depository Receipts
and Global Depositary Receipts) listed on international stock exchanges;
- companies listed on international exchanges that derive
significant revenues or profits from the Latin American region; and
- debt issued by governments and companies in the Latin American
region.
The Company has a diversified portfolio consisting primarily of equities,
equity-related and fixed income investments, with at least 25% of its gross
assets invested in equity and equity-related investments and at least 25% of
its gross assets invested in fixed income investments. The Company's
investment policy is flexible, enabling it to invest in all types of
securities, including (but not limited to) equities, preference shares, debt,
convertible securities, warrants, depositary receipts and other equity-related
securities.
Whilst the Board has provided the Investment Manager with broad investment
guidelines in order to ensure a spread of risk, the Company's portfolio is not
managed by reference to any benchmark and, therefore, the composition of its
portfolio is not restricted by minimum or maximum country, market
capitalisation or sector weightings. The Manager follows a bottom-up
investment process based on its conviction in individual stocks. Top-down
factors are secondary in portfolio construction, with diversification rather
than formal controls guiding geographical and sector weights.
The Company may invest, where appropriate, in open-ended collective investment
schemes and closed-ended funds that invest in the Latin American region.
Derivative investments may be used for efficient portfolio management and
hedging and may also be used in order to achieve the investment objective and
to enhance portfolio performance. The Company may purchase and sell derivative
investments such as exchange-listed and over-the-counter put and call options
on currencies, securities, fixed income, currency and interest rate indices
and other financial instruments, purchase and sell financial futures contracts
and options thereon and enter into various interest rate and currency
transactions such as swaps, caps, floors or collars or credit transactions and
credit derivative instruments. The Company may also purchase derivative
instruments that combine features of these instruments. The Manager employs a
risk management process to oversee and manage the Company's exposure to
derivatives. The Manager may use one or more separate counterparties to
undertake derivative transactions on behalf of the Company, and may be
required to pledge collateral in order to secure the Company's obligations
under such contracts. The Manager will assess on a continuing basis the
creditworthiness of counterparties as part of its risk management process.
The Company may underwrite or sub-underwrite any issue or offer for sale of
investments.
The Board considers that returns to Ordinary Shareholders can be enhanced by
the judicious use of borrowing. The Board is responsible for the level of
gearing in the Company and reviews the position on a regular basis. Pursuant
to the level of gearing set by the Board, the Company may borrow up to an
amount equal to 20% of its net assets calculated at the time of drawing. The
Company will not have any fixed, long-term borrowings.
The Company may also use derivative instruments for gearing purposes, in which
case the investment restrictions will be calculated on the basis that the
Company has acquired the securities to which the derivatives are providing
exposure.
The Company will normally be fully invested. However, during periods in which
economic conditions or other factors warrant, the Company may reduce its
exposure to securities and increase its position in cash and money market
instruments.
The Company invests and manages its assets, including its exposure to
derivatives, with the objective of spreading risk in line with the Company's
investment policy.
The Company may only make material changes to its investment policy with the
approval of Ordinary Shareholders (in the form of an ordinary resolution).
Investment Restrictions
The minimum and maximum percentage limits set out under "Investment Policy and
Approach" and "Investment Restrictions" will only be applied at the time of
the relevant acquisition, trade or borrowing. No more than 15% of the
Company's gross assets will be invested in any one company.
The Company will not invest more than 10%, in aggregate, of the value of its
gross assets in other investment companies admitted to the Official List of
the Financial Conduct Authority, provided that this restriction does not apply
to investments in any such investment companies which themselves have stated
investment policies to invest no more than 15% of their gross assets in other
listed investment companies admitted to the Official List of the Financial
Conduct Authority.
The Company may invest up to 25% of its gross assets in non-investment grade
government debt issues (being debt issues rated BB+/Ba1 or lower).
The Company's aggregate gross exposure to derivative instruments will not
exceed 50% of its gross assets.
The Company will not acquire securities that are unlisted or unquoted at the
time of investment (with the exception of securities which are about to be
listed or traded on a stock exchange). However, the Company may continue to
hold securities that cease to be listed or quoted if the Investment Manager
considers this to be appropriate.
No underwriting or sub-underwriting commitment will be entered into if the
aggregate of such investments would exceed 10% of the Company's net assets and
no such individual investment would exceed 5% of the Company's net assets.
The Board has adopted a policy that the value of the Company's borrowings or
derivatives (but excluding collateral held in respect of any such derivatives)
will not exceed 30% of the Company's net assets.
Duration
The Company does not have a fixed life or continuation vote.
Benchmark
The Company measures its performance against a composite benchmark index
weighted as to 60% MSCI EM Latin America 10/40 Index and 40% JP Morgan GBI-EM
Global Diversified (Latin America Carve Out) (both in sterling terms) (the
"Benchmark"). The Company does not seek to replicate the Benchmark index in
constructing its portfolio and the portfolio is not managed by reference to
any index. It is likely, therefore, that there will be periods when the
Company's performance will be uncorrelated to any index or benchmark.
Promoting the Company's Success
In accordance with corporate governance best practice, the Board is required
to describe to the Company's shareholders how the Directors have discharged
their duties and responsibilities over the course of the financial year
following the guidelines set out in the UK under section 172 (1) of the
Companies Act 2006 (the "s172 Statement"). This Statement, from "Promoting the
Success of the Company" to "Long Term Investment" on page 18 of the 2022
Annual Report, 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 provide private and institutional investors
with exposure to the above average long-term capital growth prospects of Latin
America combined with an attractive yield. The Company's Investment Objective
is disclosed on page 15 of the 2022 Annual 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 enhancing
shareholder value over the longer term.
Shareholder Engagement
The following table describes some of the ways we engage with our shareholders
AGM The AGM ordinarily provides an opportunity for the Directors to engage with
shareholders, answer their questions and meet them informally. The next AGM
will take place on 14 December 2022 in Jersey. The Board encourages
shareholders to attend or to lodge their vote by proxy on all the resolutions
put forward and to email any questions in advance to
Latin.American@abrdn.com.
Annual Report We publish a full annual report each year that contains a strategic report,
governance section, financial statements and additional information. The
report is available online and in paper format.
Company Announcements We issue announcements for all substantive news relating to the Company. You
can find these announcements on the website.
Results Announcements We release a full set of financial results at the half year and full year
stage. Updated net asset value figures are announced on a daily basis.
Monthly Factsheets The Manager publishes monthly factsheets on the Company's website including
commentary on portfolio and market performance.
Website Our website contains a range of information on the Company and includes a full
monthly portfolio listing of our investments as well as podcasts by the
Investment Manager. Details of financial results, the investment process and
Investment Manager together with Company announcements and contact details can
be found here: latamincome.co.uk
Investor Relations The Company subscribes to the Manager's Investor Relations programme (further
details are on page 105 of the 2022 Annual Report).
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 custodian, registrar,
broker and auditor.
Principal Decisions
Pursuant to the Board's aim of promoting the long term success of the Company,
the following principal decisions have been taken during the year:
Continuing Appointment of the Manager It is the Board's duty to shareholders
to ensure that the Investment Manager delivers on the investment objective.
The Investment Manager has continued to manage the investment portfolio
throughout the year under the supervision of the Board. The Investment
Manager's Review on pages 11 to 14 of the 2022 Annual Report details the key
investment decisions taken during the year. The Board continues to support
the Company's mandate and has reviewed and challenged the decisions made by
the Manager during the year. The Management Engagement Committee, on behalf of
the Board, has undertaken its annual review of the Manager's performance, and
the terms of the Management Agreement, and believes that its continued
appointment is in the best interests of shareholders.
Board Appointment The Board continued to progress its succession plans during
the year, resulting in the appointment of Michael Gray as an independent
Non-Executive Director with effect from 28 February 2022. Further details are
provided in the Chairman's Statement. The Board believes that the appointment
of Michael Gray benefits shareholders by ensuring an orderly refreshment of
the Board, which serves to provide continuity and maintain the Board's
independent oversight of the Manager.
Dividend The Board has maintained the level of the Company's dividend,
supplemented at times by revenue reserves, despite the lingering impact of the
Covid-19 pandemic and the difficult economic backdrop. The Board regularly
reviews revenue forecasts, together with the Manager, and places great
emphasis on exercising prudence, particularly in these uncertain times, to
ensure that the robustness of the Company's balance sheet is maintained, and
continues to keep its distribution policy under review.
ESG The Board is responsible for overseeing the work of the Manager and this
is not limited solely to the investment performance of the portfolio
companies. The Board also has regard for environmental (including climate
change), social and governance matters that subsist within the portfolio
companies. The Board has met with the Manager to gain an improved
understanding of its approach to ESG engagement with investee companies,
including review of their reporting, and how it meets its reporting
requirements on ESG; the Board is supportive of the Manager's pro-active
approach and the Manager will continue to evolve the quality and content of
its reporting to the Board. The Manager produces a half yearly report which
looks at ESG characteristics of the equity holdings within the portfolio,
including carbon emissions. Discussions have taken place on how to improve
communication in this area to shareholders and the wider public, given its
increasing importance, particularly with respect to climate change. More
information on the Manager's approach to ESG can be found on pages 36 to 41 of
the 2022 Annual Report.
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, seeking 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 determine the progress of the
Company in pursuing its investment policy. The main KPIs identified by the
Board in relation to the Company which are considered at each Board meeting
are as follows:
KPI Description
Net Asset Value ("NAV") Total Return Performance versus Benchmark Index Total The Board considers the Company's NAV total return figures versus the
Return Benchmark to be the best indicator of performance over time and is therefore
the main indicator of performance used by the Board. The figures for this
year, three years, five years and since launch are set out on page 24 of the
2022 Annual Report.
Share Price Discount/Premium to NAV per Ordinary Share The discount/premium relative to the NAV per share represented by the share
price is closely monitored by the Board. The objective is to minimise
fluctuations in the discount relative to similar investment companies
investing in the region by the use of share buy backs subject to market
conditions. A graph showing the share price discount/premium relative to the
NAV is shown on page 25 of the 2022 Annual Report.
Ordinary Share Price Total Return Performance The Board also monitors the price at which the Company's shares trade relative
to the Benchmark on a total return basis over time. A graph showing the total
NAV return and the share price performance against the comparative index is
shown on page 25 of the 2022 Annual Report.
Dividends per Ordinary Share The Board's aim is to provide shareholders with an attractive yield. Dividends
paid in 2021 and 2022 are set out on page 5 of the 2022 Annual Report.
Further commentary on the Company's performance is contained in the Chairman's
Statement and Investment Manager's Review and further explanation of the terms
is provided in the Glossary on pages 108 to 110 of the 2022 Annual Report.
Principal Risks and Uncertainties
There are a number of risks which, if realised, could have a material adverse
effect on the Company and its financial condition, performance and prospects.
The Board has carried out a robust assessment of the risks and uncertainties
facing the Company at the current time together with a description of the
mitigating actions taken by the Board. This process is supported by use of a
risk matrix and heat map which describes the principal risks set out in the
table on pages 20 to 21 of the 2022 Annual Report. The Board also has a
process for identifying newly emerging risks, including geopolitical
developments.
The principal risks associated with an investment in the Company's shares are
published monthly on the Company's factsheet and they can be found in the
Pre-Investment Disclosure Document published by the Manager, both of which are
on the Company's website.
The principal uncertainty for the Company during the financial year was the
continuing impact of the global pandemic and geopolitical developments
following Russia's invasion of Ukraine in February 2022. These events have
caused significant economic disruption and contributed to global stock market
volatility; their longer-term effects on the Latin American region are as yet
unknown and the likelihood of a global recession in 2023 has increased. The
Manager has sought assurances from, and reported to the Audit Committee on,
the Company's key service providers, as well as its own operations, business
continuity and contingency arrangements. Other than these global developments,
the Audit Committee does not consider the principal risks and uncertainties of
the Company to have changed materially during the year ended 31 August 2022.
The Board also regularly considers the increasing risk of ESG-related matters,
particularly regarding the impact of climate change on financial performance
of companies and the monitoring of developments in ESG reporting requirements,
including how the Manager seeks to address them.
Description Mitigating Action
Investment Management - Investment risk arises from the Company's exposure to The Board sets, and monitors, its investment restrictions and guidelines, and
both macro and portfolio specific factors. The financial and economic risks receives regular reports which include performance reporting on the
associated with the Company include foreign exchange risk, market risk, implementation of the investment policy, the investment process and
liquidity risk and credit risk. Other macro risks include geo-political application of the guidelines. The Board relies on the Investment Manager's
developments, pandemic and climate change, for example. Inappropriate skills and judgment to manage risk and make investment decisions based on
investment decisions may result in the Company's underperformance against the research and analysis of stocks and sectors. The Board regularly monitors the
benchmark index and peer group as well as a widening of the Company's investment performance of the portfolio and reviews holdings, purchases and
discount. sales on a monthly basis, as well as with the Manager at Board meetings. The
Board also reviews performance data and attribution analysis and other
relevant factors (such as ESG engagement) and, were any underperformance seen
as likely to be sustained, would be able to take remedial action.
The Board considers the increasing complexity of the macro environment
(including recent geo-political developments) to increase the likelihood of
this risk.
Share Price and Discount -The principal risks described in this table, The price of the Company's shares and its discount to NAV are not wholly
including lack of demand for Ordinary Shares, can affect the movement of the within the Board's control, as both are subject to market volatility. The
Company's share price and in some cases have the potential to increase the Board keeps the level of discount at which the Company's Ordinary shares trade
discount in the market value of the Company compared with the NAV. under review. The Board has limited influence through its ability to
authorise the buyback of existing shares, when deemed to be in the best
interest of shareholders. The share price, NAV and discount are monitored
daily by the Manager and are regularly reviewed by the Board.
Investment Strategy and Objectives - the setting of an unattractive strategic The Board considers the Company's strategy regularly and its attractiveness to
proposition for the Company and the failure to adapt to changes in investor shareholders. The Board regularly reviews the income generated by the
demand may lead to the Company becoming unattractive to investors. underlying portfolio and has the ability to supplement the dividend with
revenue reserves previously generated by the Company. The Board is updated at
each Board meeting on the make up of, and any movements in, the Shareholder
register as well as the recent and planned promotional and investor relations
activity.
Operational - the Company does not have its own employees so is dependent on The Board receives reports from the Manager on internal controls and risk
third parties for the provision of all systems and services (in particular, management at each Board meeting and receives assurances from its significant
those of the Manager). Those third parties are responsible for operating in service providers with regard to their compliance monitoring and control and
compliance with relevant laws and regulations. There is a risk that any risk management systems. The Board considers the increasing complexity of the
control failures, cyber crime or deficiencies in these systems and services risk environment (including the potential of increasingly sophisticated cyber
could result in a loss or damage to the Company. crime events) to increase the likelihood of this risk. Further details of the
internal controls which are in place are set out in the Directors' Report on
page 51 of the 2022 Annual Report.
Gearing - the ability of the Company to meet its financial obligations, or The Board sets a gearing limit to ensure that covenant restrictions in the
increasing the level of gearing, could result in the Company becoming Company's loan facility are not breached and the Board receives regular
over-geared and therefore unable to take advantage of potential opportunities. updates on the actual gearing levels the Company has reached from the
Being geared in negative markets may lead to a loss of value. There is also a Investment Manager together with the assets and liabilities of the Company and
risk of a borrowing facility not being renewed. reviews these at each Board meeting. The Board considers renewal of borrowing
sufficiently in advance of the renewal date to explore various lending
options. The Board considers the likelihood of this risk to increase as the
Company's loan reaches maturity as well as with rising inflation rates.
An explanation of other risks relating to the Company's investment activities,
specifically market risk including interest rate risk, foreign currency risk
and other price risk, liquidity risk, credit risk and a note of how these
risks are managed, is contained in note 15 to the financial statements on
pages 88 to 97 of the 2022 Annual Report.
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 an appropriate 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 carried out a robust assessment of the principal risks detailed in the
Strategic Report focussing upon the following factors:
- 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 liquidity of the Company's portfolio; and,
- The flexibility of the Company's multi-currency loan facility
which matures in August 2023 including the financial covenants of the loans.
The Directors will aim to agree a new facility upon the expiry of the current
one in 2023 and in the event that satisfactory renewal terms are not available
at that time the facility will be repaid from portfolio sales.
Accordingly, taking into account the Company's current position, the fact that
abrdn has agreed to reduce the fees payable to the Manager to the extent
necessary to ensure that the Ongoing Charges Ratio does not exceed 2.0%, the
fact that the Company's investments are mostly liquid and the potential impact
of its principal risks and uncertainties, the Board has 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 the ongoing Covid-19 pandemic, significant economic or stock market
volatility, significant discount to NAV, 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.
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
abrdn on behalf of a number of investment companies under its management. The
Company's financial contribution to the programme is matched by abrdn.
abrdn's promotional team 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 abrdn 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
August 2022, there were two male and two female Directors on the Board.
Environmental, Social and Human Rights Issues
The Company has no employees as it is managed by abrdn Capital International
Limited ("aCIL") and ordinarily all activities are contracted out to third
party service providers. There are therefore no disclosures to be made in
respect of employees. The Company's socially responsible investment policy is
outlined on page 15 of the 2022 Annual Report. The Board has appointed Hazel
Adam as the director responsible for ESG matters and she helps promote close
monitoring and further development in this area for the Company.
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.
Through the Manager and its engagement with investee companies, the Company
has oversight over supply chains within the portfolio. The Board encourages
the Manager to engage with investee companies on all ESG matters, which could
include modern slavery and human rights issues in investment portfolio
companies. More information can be found on the Investment Manager's approach
to ESG engagement on pages 36 to 41 of the 2022 Annual Report.
The Company's Manager has confirmed that it complies with the Modern Slavery
Act 2015.
Global Greenhouse Gas Emissions and Streamlined Energy and Carbon Reporting
("SECR")
All of the Company's activities are outsourced to third parties. The Company
therefore 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. For the same reason as set out above, the Company considers
itself to be a low energy user under the SECR and therefore is not required to
disclose energy and carbon information.
Future
Many of the non-performance related trends likely to affect the Company in the
future are common across all closed-ended investment companies, such as the
attractiveness of investment companies as investment vehicles and the impact
of regulatory changes. These factors need to be viewed alongside the outlook
for the Company, both generally and specifically, in relation to the
portfolio. The Board's views on the general outlook for the Company can be
found in the Chairman's Statement on page 10, whilst the Investment Manager's
views on the outlook for the portfolio are included on pages 13 to 14 of the
2022 Annual Report.
For and on behalf of the Board
Howard Myles,
Chairman
10 November 2022
Results
Performance (total return)
1 year 3 year 5 year Since launch(A)
% return % return % return % return
Ordinary share price(B) +0.28% -8.40% -10.46% +0.20%
Net asset value(B) +6.82% -9.11% -9.63% +15.03%
Benchmark +11.50% +1.04% +5.67% +30.95%
(A) Launch date 16 August 2010.
(B) Considered to be an Alternative Performance Measure. Further details can
be found below.
Total return represents the capital return plus dividends reinvested.
Ten Year Financial Record
Year to 31 August 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Total revenue (£'000) 3,914 3,600 3,170 3,544 3,772 3,095 3,230 1,896 2,101 3,372
Per Ordinary share (p)
Net revenue return 4.43 4.11 3.85 4.60 4.77 3.78 4.27 2.21 2.66 4.84
Total return/(loss) (6.06) 8.65 (33.22) 24.04 18.00 (16.84) 15.20 (22.26) 9.74 3.77
Net dividends payable 4.25 4.25 4.25 3.50 3.50 3.50 3.50 3.50 3.50 3.50
Net asset value per Ordinary share (p)
Basic & diluted 88.04 92.60 55.17 75.54 90.40 70.34 82.34 56.65 62.89 63.16
Equity shareholders' funds (£'000) 58,610 60,729 35,872 48,463 56,170 42,325 47,755 32,355 35,919 36,072
Ten Largest Investments
As at 31 August 2022
Petrobras Banco Bradesco
Brazilian state owned oil & gas company primarily engaged in exploration A leading privately-owned Brazilian
and production, refining, energy generation, trading and distribution of oil
bank with a well-recognised brand, robust loan portfolio and experienced
products. management team.
Wal-Mart De Mexico Vale
The largest food and general retailer in Mexico with an established presence Vale is a leading producer of iron ore and pellets. Vale also produces nickel,
across a number of smaller Central American markets. copper and coal. It operates large logistics systems, including railroads and
maritime terminals which are integrated with its' mining operations.
Grupo Financiero Banorte Telefonica Brasil
Mexico's leading privately-owned bank with a well-recognised nationwide brand, Leading mobile and fibre provider in Brazil with growing exposure into
sizeable pension business and proven track record in conservative lending.
digital services.
Arezzo Industria e Comercio Raia Drogasil
Arezzo is Brazil's largest women's footwear retailer and has been expanding Raia Drogasil is the largest operator of pharmaceutical stores in Brazil,
into apparel more recently. offering over the counter medicines, skin care, personal care, and cosmetics
products across a large network of physical stores and online.
Arca Continental TOTVS
Latin America's second largest Coke bottler with the majority of its volumes Leading enterprise resource planning software business in Brazil with strong
sold in Mexico but also in the US and some countries in South America growth prospects given its focus on the underpenetrated SME segment .
including Peru and Argentina.
Investment Portfolio - Equities
As at 31 August 2022
Valuation Total Valuation
2022 assets 2021
Company Sector Country £'000 %(A) £'000
Petrobras(B) Energy Brazil 2,050 4.9 1,027
Banco Bradesco(C) Financials Brazil 1,855 4.5 1,451
Wal-Mart De Mexico Consumer Staples Mexico 1,513 3.6 1,403
Vale (C) Materials Brazil 1,403 3.4 1,385
Grupo Financiero Banorte Financials Mexico 1,363 3.3 1,214
Telefonica Brasil(B) Telecommunications Brazil 1,135 2.7 -
Arezzo Industria e Comercio (B) Consumer Discretionary Brazil 1,078 2.6 405
Raia Drogasil(B) Consumer Staples Brazil 1,018 2.5 815
Arca Continental Consumer Staples Mexico 930 2.2 503
TOTVS(B) Information Technology Brazil 904 2.2 914
Top ten equity investments 13,249 31.9
Itausa Investimentos Itau (B) Financials Brazil 879 2.1 686
Grupo Mexico SAB de CV Materials Mexico 804 1.9 1,025
Grupo Aeroportuario Centro Norte Industrials Mexico 757 1.8 662
Corporacion Inmobilaria Vesta SAB de CV Real Estate Mexico 753 1.8 502
Banco Santander-Chile ADR Financials Chile 733 1.8 258
Multiplan Empreendimentos NPB (B) Real Estate Brazil 727 1.7 399
Fomento Economico Mexicano ADR Consumer Discretionary Mexico 692 1.7 1,283
Hapvida Participacoes e Investimentos(B) Health Care Brazil 656 1.6 -
Sendas Consumer Discretionary Brazil 633 1.5 -
Distribution(B)
Rumo(B) Industrials Brazil 558 1.4 991
Top twenty equity investments 20,441 49.2
Klabin (B) Materials Brazil 498 1.2 -
B3 Brasil Bolsa Balco(B) Financials Brazil 414 1.0 1,390
Geopark Energy Colombia 391 1.0 544
Falabella (B) Consumer Discretionary Chile 385 0.9 673
Bradespar(B) Materials Brazil 371 0.9 1,419
Regional SAB de CV Financials Mexico 362 0.9 278
Raizen(B) Energy Brazil 356 0.9 524
Localiza Rent A Car (B) Industrials Brazil 347 0.8 270
Credicorp Financials Peru 342 0.7 -
3R Petroleum(B) Energy Brazil 305 0.7 -
Top thirty equity investments 24,212 58.2
Wilson, Sons (B) Industrials Brazil 269 0.7 272
Globant Information Technology Argentina 268 0.6 908
Mercado Libre Consumer Discretionary Brazil 230 0.6 762
Itau Unibanco Holdings (B) Financials Brazil 207 0.5 230
Fossal Materials Peru 1 - -
Total equity investments 25,187 60.6
(A) See definition on page 110 of the 2022 Annual Report.
(B) Held in Subsidiary.
(C) Holding includes investment in ADR (held by the Company) and equity (held
by the Subsidiary).
Portfolio investments reflect consolidated investee holdings of the Company
and its Subsidiary. Values for 2022 and 2021 may not be directly comparable
due to purchases and sales made during the year.
Investment Portfolio - Bonds
As at 31 August 2022
Valuation Total Valuation
2022 assets 2021
Issue Sector Country £'000 %(A) £'000
Brazil (Fed Rep of) 10% 01/01/25(B) Government Bonds Brazil 2,482 6.0 2,240
Colombia (Rep of) 9.85% 28/06/27 Government Bonds Colombia 1,472 3.5 2,187
Uruguay (Rep of) 4.375% 15/12/28 Government Bonds Uruguay 1,278 3.1 1,624
Mex Bonos Desarr Fix Rt 10% 20/11/36 Government Bonds Mexico 1,141 2.7 1,113
Mex Bonos Desarr Fix Rt 10% 18/11/38 Government Bonds Mexico 1,113 2.7 1,082
Brazil (Fed Rep of) 10% 01/01/23(B) Government Bonds Brazil 953 2.3 695
Uruguay (Rep of) 4.25% 05/04/27 Government Bonds Uruguay 947 2.3 754
Secretaria Tesouro 10% 01/01/31(B) Government Bonds Brazil 879 2.1 616
Petroleos Mexicanos 7.47% 12/11/26 Government Bonds Mexico 866 2.1 744
Titulos de Tesoreria 7% 26/03/31 Government Bonds Colombia 605 1.4 -
Top ten bond investments 11,736 28.2
Peru (Rep of) 6.85% 12/02/42 Government Bonds Peru 579 1.4 301
Mex Bonos Desarr Fix Rt 10% 05/12/24 Government Bonds Mexico 495 1.2 581
Brazil (Fed Rep of) 10% 01/01/29(B) Government Bonds Brazil 439 1.1 408
Peru (Rep of) 6.15% 12/08/32 Government Bonds Peru 388 0.9 -
Colombia (Rep of) 7% 30/06/32 Government Bonds Colombia 385 0.9 513
Brazil (Fed Rep of) 10% 01/01/27(B) Government Bonds Brazil 381 0.9 694
Mex Bonos Desarr Fix Rt 7.75% 29/05/31 Government Bonds Mexico 374 0.9 363
Uruguay (Rep of) 8.25% 21/05/31 Government Bonds Uruguay 299 0.7 -
Mexico (United Mexican States) 7.75% 13/11/42 Government Bonds Mexico 203 0.5 -
Peru (Rep of) 6.95% 12/08/31 Government Bonds Peru 145 0.4 306
Top twenty bond investments 15,424 37.1
Peru (Rep of) 6.95% 12/08/31 Government Bonds Peru 65 0.1 238
Total value of bond investments 15,489 37.2
Total value of equity investments 25,187 60.6
Total value of portfolio investments 40,676 97.8
Other net assets held in subsidiary 660 1.6
Total investments 41,336 99.4
Net current assets(C) 236 0.6
Total assets(A) 41,572 100.0
(A) See definition on page 110 of the 2022 Annual Report.
(B) Held in Subsidiary.
(C) Excluding bank loans of £5,500,000.
Portfolio investments reflect consolidated investee holdings of the Company
and its Subsidiary. Values for 2022 and 2021 may not be directly comparable
due to purchases and sales made during the year.
Directors' Report
The Directors present their Report and the audited financial statements for
the year ended 31 August 2022.
Status
The Company is registered with limited liability in Jersey as a closed-ended
investment company under the Companies (Jersey) Law 1991 with registered
number 106012. In addition, the Company is constituted and regulated as a
collective investment fund under the Collective Investments Funds (Jersey) Law
1988. The Company has no employees and makes no political or charitable
donations. The Company has a wholly owned subsidiary, abrdn Latin American
Income Fund LLC, registered in Delaware. The subsidiary is used to hold
certain investments as part of the efficient management of the group.
The Company intends to continue to manage its affairs so as to be a qualifying
investment for inclusion in the stocks and shares component of an Individual
Savings Account and it is the Directors' intention that the Company should
continue to be a qualifying investment.
Results and Dividends
Details of the Company's results and dividends are shown above. The Company's
dividend policy is to pay interim dividends on a quarterly basis and for the
year to 31 August 2022 dividends have been paid in January, May, August and
October 2022.
Management Arrangements
The Company has an agreement (the "Management Agreement") with aCIL for the
provision of management, company secretarial and promotional services, details
of which are shown in notes 5, 6 and 17 to the financial statements.
Under the Management Agreement, the Manager is entitled to both a management
fee and a company secretarial and administration fee. The Manager has agreed
to ensure that the Company's ongoing charges ratio ("OCR") will not exceed
2.0% when calculated annually as at 31 August. Until further notice, to the
extent that the OCR ever exceeds 2.0% the Manager will rebate part of its fees
in order to bring that ratio down to 2.0%. In relation to the year ended 31
August 2022 an OCR rebate of £132,000 (2021: £127,000) was payable by the
Manager in order to ensure that the OCR did not exceed 2.0%.
The Directors review the terms of the Management Agreement on a regular basis
and have confirmed that, due to the investment skills, experience and
commitment of the Management team, in their opinion the continuing appointment
of aCIL on the terms agreed, is in the interests of Shareholders as a whole.
Share Capital
As at 31 August 2022 there were 57,113,324 Ordinary shares in issue and
6,107,500 Ordinary shares held in treasury. There were no changes to the
Company's shares in issue during the year.
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.
Risk Management
Details of the principal risks and uncertainties and KPIs are disclosed on
pages 19 to 21 of the 2022 Annual Report. Details of the financial risk
management policies and objectives relative to the use of financial
instruments by the Company are set out in note 15 to the financial statements.
Directors
Hazel Adam, Michael Gray, Heather MacCallum, Howard Myles and Richard Prosser
were the only Directors in office during the financial year. As part of an
agreed succession plan, Richard Prosser retired as a director of the Company
in February 2022 and Michael Gray was appointed on 18 February 2022.
The Directors' beneficial holdings are disclosed in the Directors'
Remuneration Report. No Director has a service contract with the Company. The
Directors' interests in contractual arrangements with the Company are as shown
in note 6 to the financial statements. All of the Directors are retiring and
seeking re-election at the AGM on 14 December 2022, with the exception of
Michael Gray who will be seeking election by shareholders for the first time.
Corporate Governance
The Company is committed to high standards of corporate governance. The Board
is accountable to the Company's Shareholders for good governance.
The Company is a member of the Association of Investment Companies ("AIC").
The Board has considered the principles and provisions of the AIC Code of
Corporate Governance as published in February 2019 ("AIC Code"). The AIC Code
addresses the principles and provisions set out in the UK Corporate Governance
Code ("UK Code"), as well as setting out provisions on issues which 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 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, and the relevant provisions of the UK
Code, except as set out below:
- The UK Corporate Governance Code includes provisions relating
to:
- interaction with the workforce (provisions 2, 5 and 6);
- the role and responsibility of the chief executive (provisions 9
and 14);
- appointment of a senior independent director (provision 12);
- previous experience of the chairman of a remuneration committee
(provision 32); and
- executive directors' remuneration (provisions 33 and 36 to 40).
The Board considers that these provisions are not relevant to the position of
the Company, being an externally-managed investment company, with four
Directors. In particular, all of the Company's day-to-day management and
administrative functions are outsourced to third parties. As a result, the
Company has no executive directors, employees or internal operations. The
Company has therefore not reported further in respect of these provisions. The
full text of the Company's Corporate Governance Statement can be found on the
Company's website, latamincome.co.uk.
The Directors attended scheduled Board and Committee meetings during the year
ended 31 August 2022 as follows (with their eligibility to attend the relevant
meeting in brackets):
Board Audit Committee MEC Nomination Committee
Richard Prosser(1) 2 (2) 1 (1) 1 (1) 1 (1)
Hazel Adam 5 (5) 2 (2) 1 (1) 1 (1)
Michael Gray(1) 3 (3) 2 (2) 1 (1) 1 (1)
Howard Myles 5 (5) 2 (2) 1 (1) 1 (1)
Heather MacCallum 5 (5) 2 (2) 1 (1) 1 (1)
(1)Richard Prosser retired and Michael Gray was appointed on 18 February 2022.
In addition to scheduled meetings, additional meetings of the Board and its
Committees were held on an ad hoc basis throughout the year to deal with
business outside of normal reporting cycles.
Policy on Tenure
In normal circumstances, it is the Board's expectation that Directors will not
serve beyond the AGM following the ninth anniversary of their appointment.
However, the Board takes the view that independence of individual Directors is
not necessarily compromised by length of tenure on the Board and that
continuity and experience can add significantly to the Board's strength. The
Board believes that recommendation for re-election should be on an individual
basis following a rigorous review which assesses the contribution made by the
Director concerned, but also considering the need for managed succession and
diversity.
It is also the Board's policy that the Chair of the Board will not serve as a
Director beyond the AGM following the ninth anniversary of their appointment
to the Board. However, this may be extended in exceptional circumstances or to
facilitate effective succession planning and the development of a diverse
Board. In such a situation the reasons for the extension will be fully
explained to shareholders.
The Board has a schedule of matters reserved to it for decision and the
requirement for Board approval on these matters is communicated directly to
the senior staff at abrdn. Such matters include strategy, gearing, treasury
and dividend policy. Full and timely information is provided to the Board to
enable the Directors to function effectively and to discharge their
responsibilities. The Board also reviews the financial statements, performance
and revenue budgets.
There is an agreed procedure for Directors to take independent professional
advice if necessary and at the Company's expense. This is in addition to the
access which every Director has to the advice and services of the Company
Secretary, which is responsible to the Board for ensuring that Board
procedures are followed and that applicable rules and regulations are complied
with.
Board Committees
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 remuneration of the
Directors has been set in order to attract individuals of a calibre
appropriate to the future development of the Company. The Company's policy on
Directors' remuneration, together with details of the remuneration of each
Director, is detailed in the Directors' Remuneration Report on pages 59 to 61
of the 2022 Annual Report.
Audit Committee
The Report of the Audit Committee is on pages 56 to 58 of the 2022 Annual
Report.
Management Engagement Committee
The Board has appointed a Management Engagement Committee which comprises the
entire Board. The Company Chairman is also Chairman of the committee. It has
defined terms of reference which are reviewed on an annual basis. Copies of
the terms of reference are published on the Company's website:
latamincome.co.uk.
The function of this committee is to review performance of the Company's
service providers and to ensure that the Manager and the Investment Manager
comply with the terms of the Management Agreement and that the provisions of
the agreement follow industry practice, and remain competitive and in the best
interest of Shareholders as a whole. The committee remains satisfied that
the continuing appointment of the Investment Manager and Manager on the terms
agreed is in the interests of Shareholders as a whole. The key factors
considered in reaching this decision were the investment skills, experience
and commitment and performance record of abrdn. The Management Agreement may
be terminated by either party by giving not less than twelve months' notice in
writing. The committee has also considered the performance of the Company's
other service providers and remains satisfied that they support the Company
effectively on reasonable commercial terms.
Nomination Committee
The Board has established a Nomination Committee, comprising all of the
Directors, with Howard Myles as Chairman. Appointments to the Board of
Directors are considered by the Nomination Committee. The committee has
defined terms of reference which are reviewed on an annual basis. Copies of
the terms of reference are published on the Company's website:
latamincome.co.uk.
The committee reviews the effectiveness of the Board, succession planning,
Board appointments, inductions and training, and determines the Directors'
remuneration policy and level of remuneration.
During the year, the committee also undertook an annual appraisal of the
performance of the Chairman, the individual Directors, the Board as a whole
and the Board's committees. The process involved the completion of
questionnaires by each Director. The results of the process were discussed by
the Nomination Committee following its completion. The outcome of the
appraisal process was considered to be satisfactory with all Directors having
contributed effectively at the meetings that they had attended during the
year. The Chairman's and Directors' other commitments were also reviewed and
it was concluded that each Director is capable of devoting sufficient time to
the Company.
The Company is not required to do an external evaluation of the effectiveness
of the Board as it is not a constituent of the FTSE 350. No external
evaluation was conducted during the year as the Board concluded that it would
not add value at this time. This approach will be kept under review.
At the AGM on 14 December 2022, Hazel Adam, Heather MacCallum and Howard Myles
will offer themselves for re-election as Directors of the Company. Michael
Gray will offer himself for election by shareholders for the first time.
The Board has considered the contribution of each Director, as set out on
pages 46 and 47 of the 2022 Annual Report, and considers that there is a
balance of skills and experience within the Board to lead the Company and that
all Directors contribute effectively. The Chairman's performance appraisal
is led by the Chair of the Audit Committee.
Accordingly, the Board has reviewed, and unanimously supports, the proposed
re-election of Hazel Adams, Heather MacCallum and Howard Myles and the
election of Michael Gray.
The Board's policy on diversity is disclosed in the Strategic Report on page
22 of the 2022 Annual Report.
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.
Going Concern
In accordance with the FRC's guidance the Board has undertaken a rigorous
review of the Company's ability to continue as a going concern. The
Company's assets including those of its wholly owned subsidiary, abrdn Latin
American Income Fund LLC, consist of a diverse portfolio of listed equities,
equity-related investments and fixed income investments exposed to the Latin
American market which in most circumstances are realisable within a very short
timescale.
The Company has considerable financial resources and, as a consequence, the
Board believes that the Company is well placed to manage its business risks
successfully despite uncertainties in the economic outlook.
The Board is mindful of the principal risks and uncertainties disclosed on
pages 20 to 21 of the 2022 Annual Report, including gearing, the ongoing
impact of Covid-19 as well as geopolitical developments and their impact on
the economic outlook for the Latin American region. It has reviewed forecasts
detailing revenue and liabilities and believes that the Company has adequate
financial resources to continue its operational existence for the foreseeable
future and at least twelve months from the date of this Annual Report.
Accordingly, the Board continues to adopt the going concern basis in preparing
the financial statements of the Company as at the date of the approval of this
Report.
Internal Controls and Risk Management
The design, implementation and maintenance of controls and procedures to
safeguard the assets of the Company and to manage its affairs properly extends
to operational and compliance controls and risk management. The Board has
prepared its own risk register which identifies potential risks both major and
minor relating to: strategy; investment management; Shareholders; marketing;
gearing; regulatory and financial obligations; third party service providers
and the Board. The Board considers the potential cause and possible impact
of these risks as well as reviewing the controls in place to mitigate these
potential risks. A risk is rated by having a likelihood and an impact rating
and the residual risk is plotted on a "heat map" and is reviewed regularly.
The Board is ultimately responsible for the Company's system of internal
control and for reviewing its effectiveness. The Board confirms that there is
an ongoing process for identifying, evaluating and managing the principal
risks faced by the Company. This process has been in place for the period
under review and up to the date of approval of this Annual Report and
financial statements, and is regularly reviewed by the Board and accords with
the FRC's guidance on internal controls. 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 principal
risks affecting the Company and policies by which these risks are managed. The
principal risks and uncertainties faced by the Company are detailed in the
Strategic Report.
The key components designed to provide effective internal control are outlined
below:
- the Manager prepares monthly forecasts and management accounts
which allow the Board to assess the Company's activities and review its
performance;
- the Board and the 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 as
appropriate;
- as a matter of course the Manager's compliance department
continually reviews its operations;
- written agreements are in place which specifically define the
roles and responsibilities of the Manager and other third-party service
providers and the Audit Committee reviews, where relevant, periodic ISAE3402
Reports, a global assurance standard for reporting on internal controls for
service organisations; the Board is made aware by the Manager of relevant
exceptions in ISAE3402 reporting from key third party service providers as
part of the Manager's third party service provider oversight regime;
- at its November 2022 meeting, the Audit Committee members
carried out an annual assessment of internal controls for the year ended 31
August 2022 by considering documentation from abrdn, including the internal
audit and compliance functions and taking account of events since 31 August
2022. The results of the assessment were then reported to the Directors at
the Board meeting which followed; and,
- the Board has considered the need for an internal audit function
but, because of the compliance and internal control systems in place at the
Manager, has decided to place reliance on the Manager's systems and internal
audit procedures.
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 misstatement and loss.
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 themselves or their
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 their 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 each Director is
issued with a letter of appointment when appointed to the Board. The
Directors' interests in contractual arrangements with the Company are as shown
in note 6 to the financial statements. No Director 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.
In the UK 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.
Substantial Interests
The Company has been advised that the following Shareholders owned 3% or more
of the issued Ordinary share capital of the Company at 31 August 2022:
Shareholder Number Of shares held % held
City of London Investment Management Company 11,371,659 19.9
abrdn Retail Plans 7,959,233 13.9
Hargreaves Lansdown 5,825,379 10.2
1607 Capital Partners 5,779,779 10.1
Philip J Milton 4,664,858 8.2
Interactive Investor 4,076,698 7.1
AJ Bell 2,467,390 4.3
On 30 September 2022, 1607 Capital Partners notified the Company that it had
sold shares in the Company and now holds 9.4% of the issued Ordinary share
capital. On 28 September 2022 and 13 October 2022, City of London Investment
Management Company notified the Company that it had bought Ordinary shares in
the Company resulting in a holding of 20.8% and then 21.85% respectively.
There have been no other significant changes notified to the Company in
respect of the above holdings between 31 August 2022 and 10 November 2022.
Alternative Investment Fund Managers Directive ("AIFMD")
On 14 July 2014, the Jersey Financial Services Commission granted the Company
a certificate of exemption from the application of the Alternative Investment
Funds (Jersey) Regulations 2012 to any marketing it may carry out within any
EU member state. aCIL, as the Company's non-EEA alternative investment fund
manager, also notified the FCA in accordance with the requirements of the UK
National Private Placement Regime for inclusion of the Company on the UK
register as a non-EEA alternative investment fund being marketed in the UK.
In addition, in accordance with Article 23 of the AIFMD and Rule 3.2.2 of the
FCA FUND Sourcebook, aCIL is required to make available certain disclosures
for potential investors in the Company and these are available on the
Company's website: latamincome.co.uk.
Annual General Meeting
The AGM will be held at 10:00am on Wednesday, 14 December 2022 at the
Company's registered office, Sir Walter Raleigh House, 48 - 50 Esplanade, St
Helier, Jersey JE2 3QB. Resolutions including the following business will be
proposed:
Dividend Policy
As a result of the timing of the payment of the Company's quarterly dividends,
the Company's Shareholders are unable to approve a final dividend each year.
In line with good corporate governance, the Board therefore proposes to put
the Company's dividend policy to Shareholders for approval at the AGM and on
an annual basis thereafter.
The Company's dividend policy is that interim dividends on the Ordinary Shares
are payable quarterly in relation to periods ending November, February, May
and August. It is intended that, over the long term, the Company will pay
quarterly dividends consistent with the expected annual underlying portfolio
yield. Resolution 3 will seek shareholder approval for the dividend policy.
Appointment of Independent Auditor
The Directors will put a resolution before the AGM to re-appoint
PricewaterhouseCoopers CI LLP ("PwC") as independent auditor for the ensuing
year, and to authorise the Directors to determine their remuneration.
Authority to Purchase the Company's Shares
In the past the Company has quoted that the aim of its discount management
policy has been to try to maintain the price at which the Ordinary shares
trade relative to the Company's NAV at a discount of no more that 5%. The
Company's discount to NAV was -17.3% at 31 August 2022. As set out in the
Chairman's Statement on page 9 of the 2022 Annual Report, in light of ongoing
market volatility, the size of the company, the adverse effect on market
liquidity if the number of shares in issue reduced and the lack of meaningful
impact on the discount, the Board decided not to buy back any shares during
the financial year. No shares have been bought back since the financial year
end.
Purchases of Ordinary shares will only be made through the market for cash at
prices below the prevailing exclusive of income NAV per Ordinary share (as
last calculated), subject to prevailing market conditions and having regard to
the size of the Company, where the Directors believe it is in the best
interest of shareholders to do so.
Resolution 10, a special resolution, will be proposed to renew the Directors'
authority to make market purchases of the Ordinary shares in accordance with
the provisions of the FCA's Listing Rules. The Company will seek authority to
purchase up to a maximum of 8,561,287 Ordinary shares (representing 14.99% of
the current issued Ordinary share capital excluding treasury shares as at the
date of publication of this Annual Report). The authority being sought shall
expire at the conclusion of the AGM in 2023 unless such authority is renewed
prior to that time. Any Ordinary shares purchased in this way will either be
cancelled and the number of Ordinary shares will be reduced accordingly, or
the Ordinary shares will be held in treasury, in accordance with the authority
previously conferred by Shareholders.
The Companies (Jersey) Law 1991 allows companies to either cancel shares or
hold them in treasury following a buy-back. These powers give Directors
additional flexibility and the Board considers that it is in the interest of
the Company that such powers be available, including the power to hold
treasury shares. Any future sales of Ordinary shares from treasury will only
be undertaken at a premium to the prevailing NAV per Ordinary share for the
benefit of all Shareholders. The Directors monitor the level of shares held in
treasury and whilst there are no upper limits on the number of shares that can
be held in treasury consideration will be given to cancelling treasury shares
if the number becomes excessively high compared to the issued share capital.
Directors' Authority to Allot Relevant Securities
There are no provisions under Jersey law which confer rights of pre-emption
upon the issue or sale of any class of shares in the Company. However, as
the Ordinary shares are traded on the main market of the London Stock Exchange
and have a premium listing, the Company is required to offer pre-emption
rights to its Shareholders and the Articles of Association reflect this.
Ordinary shares will only be issued at a premium to the prevailing NAV per
Ordinary share and, therefore, any issue will not be dilutive to existing
Ordinary Shareholders.
Unless previously disapplied by special resolution, in accordance with the
FCA's Listing Rules, the Company is required to first offer any new shares or
securities (or rights to subscribe for, or to convert or exchange into,
shares) proposed to be issued for cash to Shareholders in proportion to their
holdings in the Company. In order to provide for such share issues, your
Board is therefore also proposing that an annual disapplication of the
pre-emption rights is given to the Directors so that they may issue shares as
and when appropriate. Accordingly, resolution 11, a special resolution,
proposes a disapplication of the pre-emption rights in respect of 10% of the
shares in issue, set to expire on the earlier of eighteen months from the date
of the resolution or at the conclusion of the AGM to be held in 2023.
Recommendation
Your Board considers all resolutions to be in the best interests of the
Company and its members as a whole. Accordingly, your Board recommends that
Ordinary Shareholders should vote in favour of all resolutions to be proposed
at the AGM.
Directors' & Officers Liability Insurance
Directors' & Officers' liability insurance cover has been maintained
throughout the period at the expense of the Company.
Relations with Shareholders
The Directors place a great deal of importance on communication with
Shareholders and welcome feedback from all Shareholders. The Chairman meets
periodically with the largest Shareholders to discuss the Company. The
Annual Report and financial statements are widely distributed to other parties
who have an interest in the Company's performance. Shareholders and
investors may obtain up to date information on the Company through the
Manager's freephone information service and the Company's website:
latamincome.co.uk.
The Board's policy is to communicate directly with Shareholders and their
representative bodies without the involvement of the management group (either
the Company Secretary or the Manager) in situations where direct communication
is required.
The Notice of the AGM, included within the Annual Report and financial
statements, is ordinarily sent out at least 20 working days in advance of the
meeting. All Shareholders have the opportunity to put questions to the Board
or Manager, either formally at the Company's AGM or informally following the
meeting. The Company Secretary is available to answer general Shareholder
queries at any time throughout the year. The Directors are keen to encourage
dialogue with Shareholders and the Chairman welcomes direct contact from
Shareholders. You may submit questions to the Board by email to
latin.american@abrdn.com.
Responsible Investment
The Board is aware of its duty to act in the best interests of the Company.
The Board acknowledges that there are risks associated with investment in
companies which fail to conduct business in a socially responsible manner. The
Manager considers social, environmental and ethical factors which may affect
the performance or value of the Company's investments. The Directors, through
the Company's Manager, encourage companies in which investments are made to
adhere to best practice in the area of Corporate Governance. They believe that
this can best be achieved by entering into a dialogue with company management
to encourage them, where necessary, to improve their policies in this area.
The Company's ultimate objective, however, is to deliver superior investment
returns for its shareholders. Accordingly, whilst the Manager will seek to
favour investment in companies which pursue best practice in ESG matters, this
is always considered in the context of return on the investment portfolio.
UK Stewardship Code and Proxy Voting as an Institutional Shareholder
Responsibility for actively monitoring the activities of portfolio companies
has been delegated by the Board to the Manager which has sub-delegated that
authority to the Investment Manager.
The full text of the Company's response to the Stewardship Code may be found
on the Company's website: latamincome.co.uk.
ESG Policy
As an investment company, the Company has no direct social, environmental or
community responsibilities. However, the Board acknowledges that there are
risks associated with investment in companies which fail to conduct business
in a socially responsible manner and the Board, therefore, challenges the
Investment Manager as to whether decisions take appropriate account of the
social, environment and ethical factors, which may affect the performance or
value of the Company's investments, including climate change. More details on
the Investment Manager's approach to ESG engagement can be found on pages 36
to 41 of the 2022 Annual Report.
For and on behalf of the Board
abrdn Capital International Limited,
Secretary
10 November 2022
1st Floor, Sir Walter Raleigh House
48 - 50 Esplanade,
St Helier
Jersey JE2 3QB
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Annual Report and the
financial statements in accordance with applicable law and regulations.
The Companies (Jersey) Law 1991 requires the Directors to prepare financial
statements for each financial period in accordance with any generally accepted
accounting principles. The financial statements of the Company are required
by law to 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 should:
- select suitable accounting policies and then apply them
consistently;
- make judgments and estimates that are reasonable;
- specify which generally accepted accounting principles have been
adopted in their preparation;
- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will continue in
business; and
- assess whether the Annual Report and financial statements, taken
as a whole, is 'fair, balanced and understandable'.
The Directors are responsible for keeping accounting records which are
sufficient to show and explain its transactions and are such as to disclose
with reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the financial statements prepared by the Company
comply with the requirements of the Companies (Jersey) Law 1991. They are
also responsible for safeguarding the assets of the Company and hence for
taking reasonable steps for the prevention and detection of fraud and other
irregularities.
Under applicable law and regulations, the Directors are also responsible for
ensuring that the Company complies with the provisions of the Listing Rules
and the Disclosure, Guidance & Transparency Rules of the Financial Conduct
Authority which, with regard to corporate governance, require disclosure of
how the Board has applied the principles, and complied with the provisions, of
the UK Corporate Governance Code as applicable to the Company.
Declaration
The Directors listed on pages 46 and 47 of the 2022 Annual Report, being the
persons responsible, hereby confirm to the best of their knowledge:
- that the financial statements have been prepared in accordance
with International Financial Reporting Standards ("IFRS"), as issued by the
International Accounting Standards Board, 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 position and
performance, business model and strategy; and
- the Strategic Report, including the Chairman's Statement and the
Investment Manager's Review, 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 and on behalf of the Board
Howard Myles,
Chairman
10 November 2022
1st Floor, Sir Walter Raleigh House
48 - 50 Esplanade,
St Helier
Jersey JE2 3QB
The Manager is responsible for the maintenance and integrity of the corporate
and financial information included on the Company's website. Legislation in
Jersey governing the preparation and dissemination of financial statements may
differ from legislation in other jurisdictions.
Statement of Comprehensive Income
Year ended 31 August 2022 Year ended 31 August 2021
Revenue Capital Total Revenue Capital Total
Notes £'000 £'000 £'000 £'000 £'000 £'000
Income
Income 4 3,372 - 3,372 2,101 - 2,101
Realised losses on financial assets held at fair value through profit or 10 - (178) (178) - (290) (290)
loss
Unrealised (losses)/gains on financial assets held at fair value through 10 - (497) (497) - 4,334 4,334
profit or loss
Realised currency losses - (78) (78) - (67) (67)
Unrealised currency gains/(losses) - 153 153 - (6) (6)
Realised gains on forward foreign currency contracts - 131 131 - 482 482
Unrealised gains/(losses) on forward foreign currency contracts - 47 47 - (7) (7)
3,372 (422) 2,950 2,101 4,446 6,547
Expenses
Investment management fee 5 (135) (202) (337) (154) (232) (386)
Other operating expenses 6 (368) - (368) (340) - (340)
Profit/(loss) before finance costs and taxation 2,869 (624) 2,245 1,607 4,214 5,821
Finance costs (43) (65) (108) (34) (51) (85)
Profit/(loss) before taxation 2,826 (689) 2,137 1,573 4,163 5,736
Taxation 7 (60) 76 16 (53) (119) (172)
Profit/(loss) for the year 2,766 (613) 2,153 1,520 4,044 5,564
Earnings per Ordinary share (pence) 9 4.84 (1.07) 3.77 2.66 7.08 9.74
The profit/(loss) for the year is also the comprehensive income for the
year.
The total column of this statement represents the Statement of Comprehensive
Income, prepared in accordance with IFRS. The revenue and capital columns are
supplementary to this and are prepared under guidance published by the
Association of Investment Companies.
All items in the above statement derive from continuing operations.
The accompanying notes are an integral part of these financial statements.
Statement of Financial Position
As at As at
31 August 2022 31 August 2021
Notes £'000 £'000
Non-current assets
Investments held at fair value through profit or loss 10 41,336 41,240
Current assets
Cash 117 333
Forward foreign currency contracts 123 33
Other receivables 243 178
483 544
Current liabilities
Bank loan 11 (5,500) (5,500)
Forward foreign currency contracts (76) (40)
Other payables (128) (206)
(5,704) (5,746)
Net current liabilities (5,221) (5,202)
Non-current liabilities
Deferred tax liability 7 (43) (119)
Net assets 36,072 35,919
Equity capital and reserves
Equity capital 12 65,936 65,936
Capital reserve 13 (32,112) (31,499)
Revenue reserve 2,248 1,482
Equity Shareholders' funds 36,072 35,919
Net asset value per Ordinary share (pence) 14 63.16 62.89
The financial statements were approved by the Board of Directors and
authorised for issue on 10 November 2022 and were signed on its behalf by:
Howard Myles
Chairman
The accompanying notes are an integral part of the financial statements.
Statement of Changes in Equity
Year ended 31 August 2022
Stated Capital Revenue
capital reserve reserve Total
Notes £'000 £'000 £'000 £'000
Balance at 1 September 2021 65,936 (31,499) 1,482 35,919
(Loss)/profit for the year - (613) 2,766 2,153
Dividends paid 8 - - (2,000) (2,000)
Balance at 31 August 2022 65,936 (32,112) 2,248 36,072
Year ended 31 August 2021
Stated Capital Revenue
capital reserve reserve Total
Notes £'000 £'000 £'000 £'000
Balance at 1 September 2020 65,936 (35,543) 1,962 32,355
Profit for the year - 4,044 1,520 5,564
Dividends paid 8 - - (2,000) (2,000)
Balance at 31 August 2021 65,936 (31,499) 1,482 35,919
The accompanying notes are an integral part of the financial statements.
Statement of Cash Flows
Year ended Year ended
31 August 2022 31 August 2021
£'000 £'000
Net cash inflow from operating activities
Dividend income 607 529
Fixed interest income 720 696
Income from Subsidiary 1,545 785
Interest income 2 -
Investment management fee paid (403) (406)
Other paid expenses (447) (233)
Cash generated from operations 2,024 1,371
Interest paid (103) (86)
Withholding taxes paid (58) (53)
Net cash inflow from operating activities 1,863 1,232
Cash flows from investing activities
Purchases of investments (6,467) (6,549)
Proceeds from sales of investments 8,118 9,403
Payments to Subsidiary (1,975) (2,463)
Net cash (outflow)/inflow from investing activities (324) 391
Cash flows from financing activities
Equity dividends paid (2,000) (2,000)
Net cash outflow from financing activities (2,000) (2,000)
Net decrease in cash (461) (377)
Reconciliation of net cash flow to movements in cash
Net decrease in cash as above (461) (377)
Foreign exchange 245 404
Cash at start of year 333 306
Cash and cash equivalents at end of year 117 333
The accompanying notes are an integral part of the financial statements.
Notes to the Financial Statements
For the year ended 31 August 2022
1. Principal activity
The Company is a closed-end investment company incorporated in Jersey, and its
shares are traded on the London Stock Exchange and are listed in the premium
segment of the Financial Conduct Authority's Official List. The Company's
principal activity is investing in Latin American securities.
The principal activity of its Delaware incorporated wholly owned subsidiary,
abrdn Latin American Income Fund LLC, is similar in all relevant respects to
that of its parent.
2. Accounting policies
(a) Basis of preparation. The accounting policies which follow set out those
policies which apply in preparing the financial statements for the year ended
31 August 2022.
The financial statements of the Company have been prepared in accordance with
International Financial Reporting Standards (IFRS) as issued by International
Accounting Standards Board (IASB). The financial statements have been prepared
on a historical-cost basis, except for financial assets and financial
liabilities held at fair value through profit or loss.
In accordance with the FRC's guidance the Board has undertaken a rigorous
review of the Company's ability to continue as a going concern. The Company's
assets including those of its wholly owned subsidiary, abrdn Latin American
Income Fund LLC, consist of a diverse portfolio of listed equities,
equity-related investments and fixed income investments exposed to the Latin
American market which in most circumstances are realisable within a very short
timescale.
The Company has considerable financial resources and, as a consequence, the
Board believes that the Company is well placed to manage its business risks
successfully despite uncertainties in the economic outlook.
The Board is mindful of the principal risks and uncertainties disclosed on
pages 19 to 21 of the 2022 Annual Report, including the ongoing impact of
Covid-19 as well as geopolitical developments and their impact on the economic
outlook for the Latin American region. It has reviewed forecasts detailing
revenue and liabilities and believes that the Company has adequate financial
resources to continue its operational existence for the foreseeable future and
at least twelve months from the date of this Annual Report. Accordingly, the
Board continues to adopt the going concern basis in preparing the financial
statements of the Company as at the date of the approval of this Report.
The Company's financial statements are presented in sterling, which is also
the functional currency as it is the currency in which shares are issued and
expenses are generally paid. All values are rounded to the nearest thousand
pounds (£'000) except when otherwise indicated.
Where presentational guidance set out in the Statement of Recommended Practice
("SORP"): 'Financial Statements of Investment Trust Companies and Venture
Capital Trusts' issued by the Association of Investment Companies ("AIC"), is
consistent with the requirements of IFRS, the Directors have sought to prepare
the financial statements on a basis compliant with the recommendations of the
SORP issued in April 2021.
Significant accounting judgements, estimates and assumptions. The preparation
of financial statements in conformity with IFRS requires the use of certain
significant accounting judgements, estimates and assumptions which requires
management to exercise its judgement in the process of applying the accounting
policies. Management have identified two such judgements in preparing the
financial statements.
Accounting judgement - Application of IFRS 10: Assessment of investment
entity. One of the key areas for consideration has been the application of
IFRS 10 'Consolidated Financial Statements' including the Amendments,
'Investment entities (Amendments to IFRS 10, IFRS 12 and IAS 27) (Investment
Entity Amendments)'. The standard requires entities that meet the definition
of an investment entity to fair value certain subsidiaries through profit or
loss in accordance with IFRS 9 'Financial Instruments', rather than
consolidate their results. However, entities which are not themselves
investment entities and provide investment related services to the Company
will continue to be consolidated.
An investment entity meets the definition of an investment entity if it
satisfies the following three criteria:
(i) an entity obtains funds from one or more investors for the purpose of
providing those investors with investment services; the Company provides
investment services and has several investors who pool funds to gain access to
these services and investment opportunities which they might not be able to as
individuals.
(ii) an entity commits to its investors that its business purpose is the
investment in its subsidiary solely for capital appreciation, investment
income, or both; the Company's investment objective is to provide Ordinary
Shareholders with a total return, with an above average yield, primarily
through investing in Latin American securities.
(iii) an entity measures and evaluates the performance of substantially all of
its investments on a fair value basis; the Company has elected to measure and
evaluate the performance of all of its investments on a fair value basis. The
fair value basis is used to present the Company's performance in its
communication with the market and the primary measurement attribute to
evaluate performance of all of its investments and to make investment
decisions.
Accounting judgement - Fair value of the Subsidiary. The Directors conclude
that the net asset value of the wholly owned Subsidiary is considered to be
its fair value for financial reporting purposes based on the Subsidiary's
portfolio of investments being liquid and there being no significant
restrictions on the transfer of funds to the parent company.
New and amended standards and interpretations. The Company applied, for the
first time, certain standards and amendments, which are effective for annual
periods beginning on or after 1 January 2021. The nature and impact is
described below:
- IFRS 4, 7, 9 and 16 Amendments Interest Rate Benchmark Reform (Phase 2)
At the date of authorisation of these financial statements, the following
Standards and Interpretations were assessed to be relevant and are effective
for annual periods beginning on or after 1 January 2022:
- IAS 41, IFRS 1, 9, and 16 Amendments (Annual Improvements 2018-2020)
- IFRS 3 Amendments (Conceptual Framework)
- IFRS 4 Amendments (Deferral of effective date of IFRS 9)
At the date of authorisation of these financial statements, the following
Standards and Interpretations were assessed to be relevant and are effective
for annual periods beginning on or after 1 January 2023:
- IAS 1 Amendments (Disclosure of Accounting Policies)
- IAS 8 Amendments (Definition of Accounting Estimates)
- IAS 12 Amendments (Deferred Tax related to Assets and Liabilities arising
from a Single Transaction)
At the date of authorisation of these financial statements, the following
Standards and Interpretations were assessed to be relevant and are effective
for annual periods beginning on or after 1 January 2024:
- IAS 1 Amendments (Classification of Liabilities as Current or Non-Current)
The Company intends to adopt the Standards and Interpretations in the
reporting period when they become effective and the Board does not anticipate
that the adoption of these Standards and Interpretations in future periods
will materially impact the Company's financial results in the period of
initial application although there may be revised presentations to the
Financial Statements and additional disclosures.
(b) Income. Dividend income from equity investments is recognised on the
ex-dividend date. Dividend income from equity investments where no ex-dividend
date is quoted are recognised when the Company's right to receive payment is
established. Where the Company has elected to receive dividends in the form of
additional shares rather than in cash, the amount of the cash dividend
foregone is recognised as income. Special dividends are recognised as capital
or revenue according to their circumstances.
The Company owns 100% of the share capital of its Subsidiary and has the
ability to control the Subsidiary's operations. There are no significant
restrictions on the transfer of funds to or from the Subsidiary and
accordingly income is recognised by the Company in the same period as received
by the Subsidiary.
The fixed returns on debt instruments are recognised using the time
apportioned accruals basis.
(c) Expenses and interest payable. All expenses, with the exception of interest,
which is recognised using the effective interest method, are recognised on an
accruals basis. Expenses are charged to the revenue column of the Statement of
Comprehensive Income except as follows:
- costs incidental to the issue of new shares as defined in the Prospectus are
charged to capital;
- expenses resulting from the acquisition or disposal of an investment are
charged to the capital column of the Statement of Comprehensive Income; and
- expenses are charged to the capital column of the Statement of Comprehensive
Income where a connection with the maintenance or enhancement of the value of
the investments can be demonstrated. The Company charges 60% of investment
management fees and finance costs to capital, in accordance with the Board's
estimate of expected long-term return in the form of capital gains and income
respectively from the investment portfolio of the Company.
(d) Taxation. Profits arising in the Company for the year ended 31 August 2022
will be subject to Jersey income tax at the rate of 0% (2021 - 0%).
Investment income and capital gains are subject to withholding tax deducted at
the source of the income. The Company presents the withholding tax separately
from the gross investment income in the Statement of Comprehensive Income
under taxation.
Deferred tax is recognised in respect of all temporary differences at the
Statement of Financial Position date, where transactions or events that result
in an obligation to pay more tax in the future or right to pay less tax in the
future have occurred at the Statement of Financial Position date. This is
subject to deferred tax assets only being recognised if it is considered more
likely than not that there will be suitable profits from which the future
reversal of the temporary differences can be deducted. Deferred tax assets and
liabilities are measured at the rates applicable to the legal jurisdictions in
which they arise, using enacted tax rates that are expected to apply at the
date the deferred tax position is unwound.
(e) Investments held at fair value through profit or loss. The Company has adopted
the classification and measurement provisions of IFRS 9 'Financial
Instruments'.
The Company classifies its investments based on their contractual cash flow
characteristics and the Company's business model for managing the assets. The
business model, which is the determining feature for debt instruments, is such
that the portfolio of investments is managed, and performance is evaluated, on
a fair value through profit or loss ("FVTPL") basis. The Manager is also
compensated based on the fair value of the Company's assets. Equity
instruments are classified as FVTPL because cash flows resulting from such
instruments do not represent payments of principal and interest on the
principal outstanding, and therefore they fail the contractual cash flows
test. Consequently, all investments are measured at FVTPL.
Changes in the value of investments held at fair value through profit or loss
and gains and losses on disposal are recognised in the Statement of
Comprehensive Income as "Gains/(losses) on investments held at fair value
through profit or loss". Also included within this caption are transaction
costs in relation to the purchase or sale of investments, including the
difference between the purchase price of an investment and its bid price at
the date of purchase.
Fair value measurement. Fair value is the price that would be received to sell
an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The fair value is derived from
unadjusted quoted bid prices in active markets, with the exception of
inflation-linked bonds whose quoted bid prices are adjusted for indexation
arising from the movement of the consumer prices index for the relevant
country of issue of the bond. The fair value of forward currency contracts is
calculated by reference to current forward exchange rates for contracts with
similar maturity profiles. An active market is a market in which transactions
for the asset or liability take place with sufficient frequency and volume to
provide pricing information on an ongoing basis.
(f) Cash and cash equivalents. Cash comprises cash at banks and short-term
deposits.
(g) Other receivables. Other receivables are held to collect contractual cash
flows and give rise to cash flows representing solely payments of principal
and interest. As such they are measured at amortised cost. Other receivables
do not carry any interest and they have been assessed for any expected credit
losses over their lifetime due to their short-term nature.
(h) Other payables. Other payables are non interest bearing and are stated at
amortised cost.
(i) Nature and purpose of reserves
Capital reserve. This reserve reflects any gains or losses on investments
realised in the period along with any movement in the fair value of
investments held that have been recognised in the Statement of Comprehensive
Income. These include gains and losses from foreign currency exchange
differences.
Additionally, expenses, including finance costs, are charged to this reserve
in accordance with note 2(c) above.
When the Company purchases its Ordinary shares to be held in treasury and for
cancellation, the amount of the consideration paid, which includes directly
attributable costs, is net of any tax effect, and is recognised as a deduction
from the capital reserve. Should these shares be sold subsequently, the amount
received is recognised as an increase in equity, and the resulting surplus or
deficit on the transaction is transferred to or from the capital reserve.
Revenue reserve. This reserve reflects all income and costs which are
recognised in the revenue column of the Statement of Comprehensive Income less
dividends which have been paid.
(j) Foreign currency. Monetary assets and liabilities denominated in foreign
currencies are converted into sterling at the rate of exchange ruling at the
reporting date. The financial statements are presented in sterling, which is
the Company's functional and presentation currency. The Company's performance
is evaluated and its liquidity is managed in sterling. Therefore sterling is
considered as the currency that most faithfully represents the economic
effects of the underlying transactions, events and conditions. Transactions
during the year involving foreign currencies are converted at the rate of
exchange ruling at the transaction date. Gains or losses arising from a change
in exchange rates subsequent to the date of a transaction are included as a
currency gain or loss in revenue or capital in the Statement of Comprehensive
Income, depending on whether the gain or loss is of a revenue or capital
nature.
(k) Bank loans. The Company has adopted the classification and measurement
provisions of IFRS 9 'Financial Instruments'. Borrowings are measured at
amortised cost using the effective interest rate method. No impact on the
classification or measurement of borrowings has arisen due to the adoption of
IFRS 9.
Borrowings are stated at the amount of the net proceeds immediately after draw
down plus cumulative finance costs less cumulative payments. The finance cost
of borrowings is allocated over the term of the debt at a constant rate on the
carrying amount and charged 40% to revenue and 60% to capital to reflect the
Company's investment policy and prospective revenue and capital growth.
(l) Derivative financial instruments. The Company may use forward foreign exchange
contracts to manage currency risk arising from investment activity.
Derivatives are measured at fair value calculated by reference to forward
exchange rates for contracts with similar maturity profiles.
Changes in the fair value of derivatives are recognised in the Statement of
Comprehensive Income as revenue or capital depending on their nature.
(m) Dividends payable. Interim dividends payable are recognised in the financial
statements in the period in which they are paid.
3. Segmental reporting
The Company is engaged in a single segment of business. For management
purposes, the Company is organised into one main operating segment, which
invests in equity securities, debt instruments and related derivatives. All of
the Company's activities are viewed on a portfolio wide basis and are
interrelated, with each activity dependent on the others. Accordingly, all
significant operating decisions are based on the Company as one segment.
The following table analyses the Company's income, including income derived
from the Subsidiary's investments, by geographical location. The basis for
attributing the income is the place of incorporation of the instrument's
investment, however, where the Company invests in American Depositary Receipts
("ADRs") designated securities the underlying geographic location is
considered to be the basis.
2022 2021
£'000 £'000
Brazil 1,976 1,045
Chile 69 62
Columbia 177 180
Mexico 756 498
Peru 80 131
Uruguay 312 185
United Kingdom 2 -
3,372 2,101
The Company's income (including that generated by its Subsidiary's
investments) comprises 59% (2021 - 45%) from equities and 41% (2021 - 55%)
from fixed income securities.
4. Income
2022 2021
£'000 £'000
Income from investments
Dividend income 637 532
Fixed interest income 902 762
Income from Subsidiary 1,831 807
3,370 2,101
Other income
Deposit interest 2 -
3,372 2,101
The Company owns 100% of the share capital of its Subsidiary and has the
ability to control the Subsidiary's operations. There are no significant
restrictions on the transfer of funds to or from the Subsidiary and
accordingly income is recognised by the Company in the same period as received
by the Subsidiary. During the year net revenue of £1,831,000 (2021 -
£807,000) was generated by the Subsidiary.
5. Investment management fee
The Company had an agreement with aCIL for the provision of management
services during the year. Portfolio management services have been delegated by
aCIL to AAML during the year.
The management fee is based on an annual rate of 1% of the NAV of the Company,
valued monthly. The agreement is terminable on one year's notice. The balance
due to aCIL at the year end was £35,000 (2021 - £46,000). Investment
management fees are charged 40% to revenue and 60% to capital.
6. Other operating expenses
2022 2021
£'000 £'000
Directors' fees 103 101
Promotional activities 24 24
Secretarial and administration fee - -
Auditor's remuneration:
- fees payable for the audit of the annual accounts 37 36
Legal and advisory fees 35 14
Custodian and overseas agents' charges 37 47
Broker fees 30 30
Stock exchange fees 24 23
Registrar's fees 30 23
Printing 20 20
Other 28 22
368 340
The Company has an agreement with abrdn Fund Managers Limited ("AFML") for the
provision of promotional activities. The total fees incurred under the
agreement during the year were £24,000 (2021 - £24,000), of which £10,000
(2021 - £4,000) was due to AFML at the year end.
The Company's management agreement with aCIL provides for the provision of
company secretarial and administration services. This agreement has been
sub-delegated to abrdn Fund Managers Limited. aCIL is entitled to an annual
fee of £132,000 (2021 - £127,000) which increases annually in line with any
increase in the UK Retail Price Index. A balance of £nil (2021 - £nil) was
due to aCIL at the year end.
The Manager has agreed to ensure that the Company's ongoing charges ratio
("OCR") will not exceed 2.0% when calculated annually as at 31 August. As the
OCR exceeded 2.0% for the year ended 31 August 2022, the Manager has agreed to
rebate £132,000 (2021 - £127,000) of the secretarial and administration fee
and £55,000 (2021 - £24,000) of the management fee in order to bring the OCR
down to 2.0%.
No fees were paid to the auditor for services other than in respect of the
audit of the Company's annual accounts.
7. Taxation
2022 2021
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Analysis of charge for the year
Overseas tax suffered 60 - 60 53 - 53
Total current tax charge for the year 60 - 60 53 - 53
Deferred tax liability on Mexican capital gains - (76) (76) - 119 119
Total tax charge for the year 60 (76) (16) 53 119 172
The Company has provided for a deferred tax liability on Mexican capital gains
at 31 August 2022 of £43,000 (2021 - £119,000), the reduction in the
liability resulting in an overall tax credit balance of £16,000.
Factors affecting the tax charge for the year. The tax charged for the year
can be reconciled to the profit/(loss) per the Statement of Comprehensive
Income as follows:
2022 2021
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Profit/(loss) before taxation 2,826 (689) 2,137 1,573 4,163 5,736
Tax on profit/(loss) at the standard rate of nil% (2021 - nil%) - - - - - -
Effects of: - -
Losses on investments held at fair value through profit or loss not taxable - - - - - -
Currency gains not taxable - - - - - -
Movement in excess expenses - - - - - -
Expenses not deductible for tax purposes - - - - - -
Movement in deferred tax liability on Mexican capital gains - (76) (76) - 119 119
Irrecoverable overseas withholding tax 60 - 60 53 - 53
Non-taxable dividend income - - - - - -
Total tax charge 60 (76) (16) 53 119 172
The effective rate of tax of the Company is 0% (2021 - 0%) and the amounts in
the table are reconciling items between tax at the effective rate and the
taxation charge in the Statement of Comprehensive Income.
8. Dividends on equity shares
2022 2021
£'000 £'000
Distributions to equity holders in the year:
Fourth interim dividend for 2021 - 0.875p (2020 - 0.875p) per Ordinary share 500 500
First interim dividend for 2022 - 0.875p (2021 - 0.875p) per Ordinary share 500 500
Second interim dividend for 2022 - 0.875p (2021 - 0.875p) per Ordinary share 500 500
Third interim dividend for 2022 - 0.875p (2021 - 0.875p) per Ordinary share 500 500
2,000 2,000
The fourth interim dividend for the year of 0.875p per Ordinary share has not
been included as a liability in these financial statements as it was announced
and paid after 31 August 2022.
9. Earnings per Ordinary share
Earnings or loss per Ordinary share is based on the profit for the year of
£2,153,000 (2021 profit - £5,564,000) and on 57,113,324 (2021 - 57,113,324)
Ordinary shares, being the weighted average number of Ordinary shares in issue
during the year.
The earnings per Ordinary share detailed above can be further analysed between
revenue return and capital return as follows:
2022 2021
Revenue Capital Total Revenue Capital Total
Profit/(loss) (£'000) 2,766 (613) 2,153 1,520 4,044 5,564
Weighted average number of Ordinary shares in issue ('000) 57,113 57,113
Return per Ordinary share (pence) 4.84 (1.07) 3.77 2.66 7.08 9.74
10. Investments held at fair value
(a) Year ended Year ended
31 August 2022 31 August 2021
Quoted bonds Investment Quoted bonds Investment
& Equities in Subsidiary Total & Equities in Subsidiary Total
Fair value through profit or loss £'000 £'000 £'000 £'000 £'000 £'000
Opening book cost 22,285 14,904 37,189 25,366 13,226 38,592
Opening investment holdings (losses)/gains (150) 4,201 4,051 (4,092) 3,004 (1,088)
Opening fair value 22,135 19,105 41,240 21,274 16,230 37,504
Movements in the year:
Purchases 6,600 - 6,600 6,611 - 6,611
Sales proceeds (8,090) - (8,090) (9,404) - (9,404)
Payments to/(receipts from) Subsidiary by Company - 1,975 1,975 - 2,463 2,463
Realised losses on financial assets held at fair value through profit or loss (178) - (178) (290) - (290)
(Decrease)/increase in investment holdings fair value gains/(losses) 79 (576) (497) 3,944 390 4,334
Net income generated in Subsidiary - 1,831 1,831 - 807 807
Cash transfer to/(from) Subsidiary to Parent (Income from Subsidiary) - (1,545) (1,545) - (785) (785)
Closing fair value 20,546 20,790 41,336 22,135 19,105 41,240
£'000 £'000 £'000 £'000 £'000 £'000
Closing book cost 20,617 15,334 35,951 22,285 14,904 37,189
Closing investment holdings (losses)/gains (71) 3,625 3,554 (150) 3,394 3,244
Net income generated in Subsidiary - 1,831 1,831 - 807 807
Closing fair value 20,546 20,790 41,336 22,135 19,105 41,240
The Company received £8,090,000 (31 August 2021 - £9,404,000) from
investments sold in the period. The book cost of these investments when they
were purchased was £8,268,000 (31 August 2021 - £9,694,000). These
investments have been revalued over time and until they were sold any
unrealised gains/losses were included in the fair value of the investments.
(b) Investment in Subsidiary. The Company holds 100% of the share capital of its
Subsidiary. The Company meets the definition of an investment entity,
therefore it does not consolidate its Subsidiary but recognises it as an
investment at fair value through profit or loss. The fair value of the
Subsidiary is based on its net assets which comprises investments held at fair
value, cash, income receivable and other receivables/payables. The Company
receives income from its Subsidiary and there are no significant restrictions
on the transfer of funds to or from the Subsidiary. During the year the
Company paid a net transfer to the Subsidiary of £1,975,000 (2021 -
£2,463,000).
(c) Transaction costs. During the year, expenses were incurred in acquiring or
disposing of investments classified as fair value through profit or loss. The
total costs were as follows:
Year ended Year ended
31 August 2022 31 August 2021
£'000 £'000
Purchases 11 10
Sales 10 12
21 22
The above transaction costs are calculated in line with the AIC SORP. The
transaction costs in the Company's Key Information Document are calculated on
a different basis and in line with the PRIIPs regulations.
11. Creditors: amounts falling due within one year
Bank loan. On 13 August 2021 the Company entered a £6 million two year
unsecured revolving multi-currency loan facility with The Bank of Nova Scotia,
London Branch, expiring on 14 August 2023. This replaced the existing £6m
loan facility agreement with Scotiabank Europe plc. At the year end
£5,500,000 was drawn down (2021 - £5,500,000) under the facility, fixed to 8
September 2022 at an all-in rate of 2.561%.
At the date this Report was approved, £5,500,000 was drawn down under this
facility and fixed to 7 December 2022 at an all-in rate of 3.5559%.
Under the terms of the loan facility the Company's borrowings must not exceed
25% of adjusted NAV. Adjusted NAV is defined as total net assets less, inter
alia, the aggregate of all excluded assets, excluded assets being, without
double counting, the value of any unquoted assets, all investments issued by a
single issuer in excess of 15% of total NAV, all Brazilian and Mexican bonds
in excess of 30%, any MSCI Industry category in excess of 25%, and cash along
with any shortfall in cash, equities and investment Grade bonds below 70%. All
covenants have been complied with throughout the year and up to the date of
this Annual Report.
The Directors are of the opinion that there is no significant difference
between the carrying value and fair value of the bank loan due to its short
term nature.
12. Equity capital
2022 2021
Number £'000 Number £'000
Issued and fully paid - Ordinary shares
Balance brought and carried forward 57,113,324 65,936 57,113,324 65,936
2022 2021
Number £'000 Number £'000
Issued and fully paid - Treasury shares
Balance brought and carried forward 6,107,500 - 6,107,500 -
Stated capital 63,220,824 65,936 63,220,824 65,936
For each Ordinary share issued £1 is allocated to stated capital, with the
balance taken to the capital reserve. The number of Ordinary shares authorised
for issue is unlimited. The Ordinary shares in issue have no par value.
During the year there were no share buybacks or issues (2021 - same).
Shares held in treasury consisting of 6,107,500 (2021 - 6,107,500) Ordinary
shares represent 9.66% (2021 - 9.66%) of the Company's total issued share
capital at 31 August 2022.
The Ordinary shares are entitled to all of the capital growth in the Company's
assets and to all the income from the Company that is resolved to be
distributed.
13. Capital reserve
2022 2021
£'000 £'000
At beginning of year (31,499) (35,543)
Net currency gains/(losses) 75 (73)
Forward foreign currency contracts gains 178 475
Movement in investment holdings fair value (losses)/gains (497) 4,334
Loss on sales of investments (178) (290)
Capitalised expenses (191) (402)
At end of year (32,112) (31,499)
14 Net asset value per Ordinary share
Net asset value per Ordinary share is based on a net asset value of
£36,072,000 (2021 - £35,919,000) and on 57,113,324 (2021 - 57,113,324)
Ordinary shares, being the number of Ordinary shares issued and outstanding at
the year end excluding shares held in treasury.
15. Risk management policies and procedures
The Company, and through its Subsidiary, invests in equities and sovereign
bonds for the long term so as to achieve its objective as stated on page 15 of
the 2022 Annual Report. In pursuing its investment objective, the Company is
exposed to a variety of financial risks that could result in a reduction in
the Company's net assets and a reduction in the revenue available for
distribution by way of dividends. The Company entered into forward foreign
currency contracts for the purpose of hedging short term foreign currency cash
flows consistent with its investment policy. As at 31 August 2022 there were
10 open positions in derivatives transactions (2021 - 19) details of which can
be found on page 92 of the 2022 Annual Report. The Company has not entered
into forward foreign currency contracts for the purpose of hedging fair values
as at each reporting date.
The Directors conclude that it is appropriate to present the financial risk
disclosures of the Company and its wholly owned Subsidiary in combination as
this accurately reflects how the Company uses its Subsidiary to carry out its
investment activities, including those relating to portfolio allocation and
risk management.
These financial risks of the Company and its Subsidiary are market risk
(comprising market price risk, currency risk and interest rate risk),
liquidity risk and credit risk, and the Directors' approach to the management
of these risks, are set out below. The Board of Directors is responsible for
the Company's risk management. The overall risk management programme focuses
on the unpredictability of financial markets and seeks to minimise potential
adverse effects on the Company's financial performance.
The Board determines the objectives, policies and processes for managing the
risks that are set out below, under the relevant risk category and relies upon
AFML's system of internal controls. The policies for the management of each
risk are unchanged from the previous accounting period.
(a) Market risk. The fair value of a financial instrument held by the Company and
its Subsidiary may fluctuate due to changes in market prices. Market risk
comprises - market price risk (see note 15(b)), currency risk (see note 15(c))
and interest rate risk (see note 15(d)). The Investment Manager assesses the
exposure to market risk when making each investment decision, and monitors the
overall level of market risk on the whole of the investment portfolio on an
ongoing basis.
(b) Market price risk. Market price risks (i.e. changes in market prices other
than those arising from interest rate risk or currency risk) may affect the
value of the quoted investments.
Management of the risk. The Board monitors the risks inherent in the
investment portfolio by ensuring full and timely access to relevant
information from the Investment Manager. The Board meets regularly and at each
meeting reviews investment performance. The Board and Manager monitor the
Investment Manager's compliance with the Company's objectives, and is directly
responsible for oversight of the investment strategy and asset allocation.
Concentration of exposure to market price risk. A geographical analysis of the
Company's and Subsidiary's combined investment portfolio is shown on pages 29
to 34 of the 2022 Annual Report. This shows the amounts invested in Argentina,
Brazil, Chile, Colombia, Mexico, Peru and Uruguay. Accordingly, there is a
concentration of exposure to those countries, though it is recognised that an
investment's country of domicile or of listing does not necessarily equate to
its exposure to the economic conditions in that country.
Market price sensitivity. The following table illustrates the sensitivity of
the return after taxation for the year and equity to an increase or decrease
of 20% (2021 - 20%) in the fair value of the Company's and its Subsidiary's
investments. This level of change is considered to be reasonably possible
based on observation of past and current market conditions. The sensitivity
analysis is based on the Company's and its Subsidiary's investments at each
balance sheet date and the investment management fees for the year ended 31
August 2022, with all other variables held constant.
2022 2022 2021 2021
Increase Decrease Increase Decrease
in fair in fair in fair in fair
value value value value
£'000 £'000 £'000 £'000
Statement of Comprehensive Income - return after tax
Revenue return (33) 33 (33) 33
Capital return 8,110 (8,110) 8,197 (8,197)
Impact on total return after tax for the year and net assets 8,077 (8,077) 8,164 (8,164)
(c) Currency risk. Most of the Company's assets (including indirectly through its
investment in its Subsidiary), liabilities and income are denominated in
currencies other than sterling (the Company's functional currency, and the
currency in which it reports its results). As a result, movements in exchange
rates may affect the sterling value of those items.
Management of the risk. The Investment Manager manages the Company's exposure
to foreign currencies and reports to the Board on a regular basis.
The Investment Manager also manages the risk to the Company and its Subsidiary
of the foreign currency exposure by considering the effect on the Company's
NAV and income of a movement in the exchange rates to which the Company's and
Subsidiary's assets, liabilities, income and expenses are exposed.
Income denominated in foreign currencies is converted into sterling on
receipt. The Company and its Subsidiary do not use financial instruments to
mitigate currency exposure in the period between the time that income is
accrued in the financial statements and its receipt.
Foreign currency exposure. The table below shows, by currency, the split of
the Company and Subsidiary's non-sterling monetary assets and investments that
are denominated in currencies other than sterling. The exposure is shown on an
aggregated basis and excludes forward currency contracts which are used for
the purpose of ensuring the Company's foreign currency exposure is
appropriately hedged.
ARS BRL CLP COP MXN PEN UYU USD
2022 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Debtors (due from brokers, dividends and other receivables) - 402 - 84 169 24 35 31
Cash - 221 - - - - - 6
Creditors (due to brokers, accruals and other creditors) - (3) - - (65) (18) - (53)
Total foreign currency exposure on net monetary items - 620 - 84 104 6 35 (16)
Investments at fair value through profit or loss 498 19,745 776 2,463 9,919 1.518 2,524 3,234
Total net foreign currency exposure 498 20,365 776 2,547 10,023 1,524 2,559 3,218
ARS BRL CLP COP MXN PEN UYU USD
2021 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Debtors (due from brokers, dividends and other receivables) - 96 - 39 87 13 25 15
Cash - 29 2 - 17 13 - 13
Creditors (due to brokers, accruals and other creditors) - (2) - (22) (6) - - (10)
Total foreign currency exposure on net monetary items - 123 2 17 98 26 25 18
Investments at fair value through profit or loss 1,670 20,568 2,018 2,699 9,227 890 2,407 1,634
Total net foreign currency exposure 1,670 20,691 2,020 2,716 9,325 916 2,432 1,652
Foreign currency sensitivity. The sensitivity of the total return after tax
for the year and the net assets in regard to the movements in the Company's
and its Subsidiary's foreign currency financial assets and financial
liabilities and the exchange rates for the £/Argentine Peso (ARS),
£/Brazilian Real (BRL), £/Chilean Peso (CLP), £/Colombian Peso (COP),
£/Mexican Peso (MXN), £/Peruvian Nuevo Sol (PEN), £/Uruguayan Peso (UYU)
and £/US Dollar (USD) are set out below. This sensitivity excludes forward
currency contracts entered into for hedging short term cash flows.
It assumes the following changes in exchange rates:
£/Argentine Peso (ARS) +/-124% (2021 +/-172%) (maximum downside risk 100%)
£/Brazilian Real( BRL) +/-20% (2021 +/-32%)
£/Chilean Peso (CLP) +/-19% (2021 +/-21%)
£/Columbian Peso (COP) +/-23% (2021 +/-30%)
£/Mexican Peso (MXN) +/-4% (2021 +/-11%)
£/Peruvian Nuevo Sol (PEN) +/-8% (2021 +/-31%)
£/Uruguayan Peso (UYU) +/-6% (2021 +/-40%)
£/US Dollar (USD) +/-4% (2021 +/-6%)
These percentages have been determined based on the average market volatility
in exchange rates in the previous 3 years and using the Company's and its
Subsidiary's foreign currency financial assets and financial liabilities held
at each balance sheet date.
For 2022, if sterling had strengthened against the currencies shown, this
would have had the following effect, with a weakening of sterling having an
equal and opposite effect with the exception of the Argentine Peso which is
capped at 100% on the downside amounting to £nil for revenue returns and
£617,000 for capital returns but on the upside revenue returns would increase
by £nil and capital returns by £617,000:
ARS BRL CLP COP MXN PEN UYU USD
2022 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Statement of Comprehensive Income - return after tax
Revenue return - 125 - 14 (4) - 2 (1)
Capital return (617) (4,072) (147) (586) (401) (122) (153) (129)
Impact on total return after tax for the year and net assets (617) (3,947) (147) (572) (405) (122) (151) (130)
For 2021, if sterling had strengthened against the currencies shown, this
would have had the following effect, with a weakening of sterling having an
equal and opposite effect with the exception of the Argentine Peso which is
capped at 100% on the downside amounting to £nil for revenue returns and
£1,670,000 for capital returns but on the upside revenue returns would
increase by £nil and capital returns by £2,873,000:
ARS BRL CLP COP MXN PEN UYU USD
2021 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Statement of Comprehensive Income - return after tax
Revenue return - (40) - (12) (10) (5) (10) (1)
Capital return (1,670) (6,621) (424) (815) (1,026) (284) (973) (99)
Impact on total return after tax for the year and net assets (1,670) (6,661) (424) (827) (1,036) (289) (983) (100)
Foreign exchange contracts. The Company has entered into derivative
transactions, in the form of forward exchange contracts, to ensure that
exposure to foreign denominated cash flows is appropriately hedged. The
following forward contracts were outstanding at the Statement of Financial
Position date:
Local currency Unrealised gain/(loss)
Buy Sell Settlement Amount Contracted 31 August 2022
Date of contract Currency Currency date '000 rate £'000
7 July 2022 GBP USD 18 October 2022 53 1.1647 (1)
7 July 2022 GBP USD 18 October 2022 999 1.1647 (33)
7 July 2022 MXN GBP 18 October 2022 1,164 23.6381 76
25 July 2022 GBP USD 18 October 2022 542 1.1647 (21)
10 August 2022 BRL USD 22 November 2022 162 0.1623 (3)
10 August 2022 PEN GBP 22 November 2022 252 0.2213 20
10 August 2022 USD COP 22 November 2022 810 1.1654 24
10 August 2022 USD PEN 22 November 2022 858 1.1654 (18)
18 August 2022 USD GBP 18 October 2022 66 1.1647 2
23 August 2022 MXN GBP 18 October 2022 126 23.6381 1
Local currency Unrealised gain/(loss)
Buy Sell Settlement Amount Contracted 31 August 2021
Date of contract Currency Currency date '000 rate £'000
1 June 2021 GBP USD 1 September 2021 146 1.3764 (4)
1 June 2021 USD BRL 1 September 2021 148 1.3763 (2)
8 July 2021 GBP USD 13 October 2021 1,088 1.3764 (2)
8 July 2021 GBP USD 13 October 2021 53 1.3764 0
8 July 2021 MXN GBP 13 October 2021 1,622 27.7401 12
12 July 2021 GBP USD 13 October 2021 149 1.3764 (1)
27 July 2021 GBP MXN 13 October 2021 148 27.7401 (1)
28 July 2021 USD GBP 13 October 2021 68 1.3764 1
30 July 2021 GBP MXN 13 October 2021 267 27.7401 (3)
30 July 2021 GBP USD 13 October 2021 70 1.3764 (1)
12 August 2021 USD GBP 13 October 2021 228 1.3764 2
16 August 2021 BRL USD 24 November 2021 540 0.1401 14
17 August 2021 USD COP 24 November 2021 808 1.3765 (22)
17 August 2021 USD PEN 24 November 2021 740 1.3765 1
23 August 2021 USD GBP 13 October 2021 86 1.3764 (1)
26 August 2021 BRL USD 1 September 2021 152 0.1419 3
26 August 2021 GBP USD 13 October 2021 151 1.3764 0
26 August 2021 USD GBP 1 September 2021 151 1.3763 0
26 August 2021 USD BRL 24 November 2021 149 1.3765 (3)
The fair value of forward exchange contracts is based on forward exchange
rates at the Balance Sheet date.
A sensitivity analysis of foreign currency contracts is not presented as the
Directors consider that these are not significant given the short duration of
the contracts and expected volatility of the respective foreign exchange rates
over the term of the contracts.
(d) Interest rate risk. Interest rate risk is the risk that arises from
fluctuating interest rates. Interest rate movements may affect:
- the fair value of the investments in fixed interest rate securities;
- the level of income receivable on cash deposits;
- interest payable on the Company's variable interest rate borrowings.
The interest rate risk applicable to a bond is dependent on the sensitivity of
its price to interest rate changes in the market. The sensitivity depends on
the bond's time to maturity, and the coupon rate of the bond.
Management of the risk. The possible effects on fair value and cash flows that
could arise as a result of changes in interest rates are taken into account
when making investment decisions.
Financial assets. The Company and its Subsidiary hold fixed rate government
bonds with prices determined by market perception as to the appropriate level
of yields given the economic background. Key determinants of market quoted
prices include economic growth prospects, inflation, the relevant government's
fiscal position, short-term interest rates and international market
comparisons. The Investment Manager considers all these factors when making
investment decisions. Each quarter the Board reviews the decisions made by the
Investment Manager and receives reports on each market in which the Company
and its Subsidiary invest together with economic updates.
Returns from bonds are fixed at the time of purchase, as the fixed coupon
payments are known, as are the final redemption proceeds. This means that if a
bond is held until its redemption date, the total return achieved is unaltered
from its purchase date. However, over the life of a bond the market price at
any given time will depend on the market environment at that time. Therefore,
a bond sold before its redemption date is likely to have a different price to
its purchase price and a profit or loss may result.
Financial liabilities. The Company primarily finances its operations through
use of equity and bank borrowings.
The Company has a revolving multi-currency facility, details of which are
disclosed in note 11 on page 86 of the 2022 Annual Report.
The Board actively monitors its bank borrowings. A decision on whether to roll
over its existing borrowings will be made prior to their maturity dates,
taking into account the Company's policy of not having any fixed, long-term
borrowings.
Interest rate exposure. The exposure at 31 August of financial assets and
financial liabilities to interest rate risk is shown by reference to floating
interest rates - when the interest rate is due to be re-set.
2022 2021
Within Within
one year Total one year Total
£'000 £'000 £'000 £'000
Exposure to floating interest rates
Cash 117 117 333 333
Borrowings under loan facility (5,500) (5,500) (5,500) (5,500)
Total net exposure to interest rates (5,383) (5,383) (5,167) (5,167)
The Company does not have any fixed interest rate exposure to cash or bank
borrowings at 31 August 2022 (2021 - nil). Interest receivable and finance
costs are at the following rates:
- interest received on cash balances, or paid on bank overdrafts, is at a
margin below SONIA or its foreign currency equivalent (2021 - same).
- interest paid on borrowings under the loan facility was at a margin above
LIBOR to 13 August 2022 and at a margin above SONIA from 13 August 2022 to the
Company's year end. The weighted average interest rate of these at 31 August
2022 was 2.561% (2021- 1.49053%).
Interest rate sensitivity. A sensitivity analysis demonstrates the sensitivity
of the Company's results for the year to a reasonably possible change in
interest rates, with all other variables held constant.
The sensitivity of the profit/(loss) for the year is the effect of the assumed
change in interest rates on:
- the net interest income for the year, based on the floating rate financial
assets held at the Statement of Financial Position date; and
- changes in fair value of investments for the year, based on revaluing fixed
rate financial assets and liabilities at the Statement of Financial Position
date.
If interest rates had been 50 basis points higher or lower and all other
variables were held constant, the Company's net interest for the year ended 31
August 2022 would decrease/increase by £27,000 (2021 - £26,000). This is
attributable to the Company's exposure to interest rates on its floating rate
cash balances and bank loan.
If interest rates had been 200 basis points (2021 - 50 basis points) higher
and all other variables were held constant, a change in fair value of the
Company's fixed income financial assets at the year ended 31 August 2022 of
£15,489,000 (2021 - £14,489,000) would result in a decrease of £570,000
(2021 - £380,000). If interest rates had been 200 basis points (2021 - 50
basis points) lower and all other variables were held constant, a change in
fair value of the Company's fixed rate financial assets at the year ended 31
August 2022 would result in an increase of £570,000 (2021 - £396,000).
(e) Liquidity risk. This is the risk that the Company will encounter difficulty in
meeting obligations associated with financial liabilities.
Management of the risk. All of the Company's and its Subsidiary's portfolios
are investments in quoted bonds and equities that are actively traded. The
Company's level of borrowings is subject to regular review.
The Company's investment policy allows the Investment Manager to determine the
maximum amount of the Company's resources that should be invested in any one
company.
Liquidity risk exposure. The remaining contractual maturities of the financial
liabilities at 31 August 2022, based on the earliest date on which payment can
be required are as follows (borrowings under the loan facility are subject to
a resetting of the interest rate upon maturity):
Due
Due between Due
within 3 months after
3 months and 1 year 1 year Total
31 August 2022 £'000 £'000 £'000 £'000
Creditors: amounts falling due within one year
Borrowings under the loan facility (including interest) (5,510) - - (5,510)
Amounts due on forward foreign currency contracts (76) - - (76)
Amounts due to brokers and accruals (118) - - (118)
(5,704) - - (5,704)
Due
Due between Due
within 3 months after
3 months and 1 year 1 year Total
31 August 2021 £'000 £'000 £'000 £'000
Creditors: amounts falling due within one year
Borrowings under the loan facility (including interest) (5,504) - - (5,504)
Amounts due on forward foreign currency contracts (40) - - (40)
Amounts due to brokers and accruals (202) - - (202)
(5,746) - - (5,746)
(f) Credit risk. The failure of the counterparty to a transaction to discharge its
obligations under that transaction could result in the Company or its
Subsidiary suffering a loss. The Company is exposed to credit risk on debt
instruments. These classes of financial assets are not subject to IFRS 9's
impairment requirements as they are measured at FVTPL. The carrying value of
these assets, under IFRS 9 represents the Company's maximum exposure to credit
risk on financial instruments not subject to the IFRS 9 impairment
requirements on the respective reporting dates (see table below "Credit Risk
Exposure").
The Company's only financial assets subject to the expected credit loss model
within IFRS 9 are cash and short-term other receivables. At 31 August 2022 the
total of cash and short-term other receivables was £360,000 (2021 -
£511,000).
As cash and short-term other receivables are impacted by the IFRS 9 model, the
Company has adopted an approach similar to the simplified approach.
Management of the risk. Where the investment manager makes an investment in a
bond, corporate or otherwise, where available, the credit rating of the issuer
is taken into account so as to minimise the risk to the Company of default.
Investment transactions are carried out with a number of brokers, whose
credit-standing is reviewed regularly by AFML, and limits are set on the
amount that may be due from any one broker; the risk of counterparty exposure
due to failed trades causing a loss to the Company or its Subsidiary is
mitigated by the review of failed trade reports on a daily basis. In addition,
the administrator carries out both cash and stock reconciliations to the
custodians' records on a daily basis to ensure discrepancies are detected on a
timely basis.
Cash is held only with reputable banks with high quality external credit
ratings. None of the Company's or its Subsidiary's financial assets have been
pledged as collateral.
Credit risk exposure. In summary, compared to the amounts included in the
Balance Sheet, the maximum exposure to credit risk at 31 August was as
follows:
2022 2021
Balance Maximum Balance Maximum
Sheet exposure Sheet exposure
£'000 £'000 £'000 £'000
Non-current assets
Bonds at fair value through profit or loss(A) 15,489 15,489 14,489 14,489
Current assets
Cash 117 117 333 333
Other receivables 243 243 178 178
Forward foreign currency contracts 123 123 33 33
15,972 15,972 15,033 15,033
(A) Includes quoted bonds held by the Company and its Subsidiary on an
aggregated basis. For more detail on these bonds refer to page 31 of the 2022
Annual Report.
None of the Company's and Subsidiary's financial assets are secured by
collateral or other credit enhancements and none are past their due date or
impaired.
Credit ratings. The table below provides a credit rating profile using
Standard and Poor's credit ratings for the bond portfolio at 31 August 2022
and 31 August 2021:
2022 2021
£'000 £'000
A- - 544
BBB+ 866 3,883
BBB 7,027 2,378
BB+ 2,462 2,187
BB- 5,134 4,037
Non-rated - 1,460
15,489 14,489
At 31 August 2021 the Standard and Poor's credit ratings agency did not
provide a rating for a Brazilian bond, a Colombian bond, a Peruvian bond and
an Uruguayan bond held by the Company and were accordingly categorised as
non-rated in the table above. It was however noted that Fitch's credit rating
agency did provide a BB- rating for the Brazilian bond valued at £616,000, a
BB+ rating for the Colombian bond valued at £513,000 and a BBB- rating for
the Uruguayan bond valued at £30,000. Moody's credit ratings agency provided
a Baa1 rating for the Peruvian bond valued at £301,000.
At 31 August 2022 the Company held cash of £117,000 (2021 - £333,000) with
BNP Paribas SA, which has a credit rating of A-1 (2021 - A-1) with Standard
and Poor's. No ECL adjustments have been made since the risk is considered
negligible.
16. Capital management policies and procedures
The Company's capital management objectives are:
- to ensure that it will be able to continue as a going concern; and
- to maximise the income and capital return to its Equity Shareholders through
equity capital and debt.
The Company's capital at 31 August 2022 comprises its equity capital and
reserves that are shown in the Balance Sheet at a total of £36,072,000 (2021
- £35,919,000). As at 31 August 2022 gross debt as a percentage of net assets
stood at 15.3% (2021 - 15.3%).
The Board, with the assistance of abrdn, monitors and reviews the broad
structure of the Company's capital on an ongoing basis. This review includes:
- the planned level of gearing, which takes account of abrdn's views on the
market;
- the need to buy back Ordinary shares for cancellation or treasury, which
takes account of the difference between the net asset value per share and the
share price (i.e. the level of share price discount);
- the need for new issues of Ordinary shares, including issues from treasury;
and
- the extent to which distributions from reserves may be made.
The Company's objectives, policies and processes for managing capital are
unchanged from the preceding accounting period.
17. Related party transactions
Directors' interests. Fees payable during the year to the Directors are
disclosed within the Directors' Remuneration Report on page 61 and in note 6
on page 82 of the 2022 Annual Report.
Transactions with the Manager. Under the terms of the management agreement
with the Company, aCIL is entitled to receive both a management fee and a
company secretarial and administration fee. Details of the management fee
arrangements are presented in note 5 on page 81 of the 2022 Annual Report. The
company secretarial and administration fee is based on an annual amount of
£132,000 (2021 - £127,000), increasing annually in line with any increases
in the UK Retail Prices Index, payable quarterly in arrears. During the year
no fee (2021 - £nil) was payable after the deduction of a rebate £132,000
(2021 - £127,000) to bring the OCR down to 2.0%, with £nil (2021 - £nil)
outstanding at the period end.
The Manager has agreed to ensure that the Company's OCR will not exceed 2.0%
when calculated annually as at 31 August. Until further notice, to the extent
that the OCR ever exceeds 2.0% the Manager will rebate part of its fees in
order to bring that ratio down to 2.0%.
Subsidiary. The Company owns 100% of the share capital of the Subsidiary.
Details of the movements in the investment are presented in note 10 on page 85
of the 2022 Annual Report.
18. Controlling party
The Company has no immediate or ultimate controlling party.
19. Fair value hierarchy
IFRS 13 requires an entity to classify fair value measurements using a fair
value hierarchy that reflects the significance of the inputs used in making
the measurements.
The Company has classified fair value measurements using a fair value
hierarchy that reflects the significance of the inputs used in making the
measurements. The fair value hierarchy has the following levels:
Level 1: quoted prices (unadjusted) in active markets for identical assets or
liabilities;
Level 2: inputs other than quoted prices included within Level 1 that are observable
for the assets or liability, either directly (i.e. as prices) or indirectly
(i.e. derived from prices); and
Level 3: inputs for the asset or liability that are not based on observable market data
(unobservable inputs).
Financial assets and financial liabilities are either carried in the balance
sheet at their fair value (investments and forward currency contracts) or the
balance sheet amount is a reasonable approximation of fair value (due from
brokers, dividends and interest receivable, due to brokers, accruals, cash at
bank and amounts due under the loan facility).
The financial assets and liabilities measured at fair value in the Balance
Sheet grouped into the fair value hierarchy at 31 August 2022 are as follows:
Level 1 Level 2 Total
Note £'000 £'000 £'000
Financial assets/(liabilities) at fair value through profit or loss
Quoted equities a) 10,191 - 10,191
Quoted bonds b) - 10,355 10,355
Investment in Subsidiary c) - 20,790 20,790
10,191 31,145 41,336
Forward foreign currency contracts gains d) - 123 123
Forward foreign currency contracts (losses) d) - (76) (76)
Net fair value 10,191 31,192 41,383
Level 1 Level 2 Total
As at 31 August 2021 Note £'000 £'000 £'000
Financial assets/(liabilities) at fair value through profit or loss
Quoted equities a) 12,301 - 12,301
Quoted bonds b) - 9,835 9,835
Investment in Subsidiary c) - 19,104 19,104
12,301 28,939 41,240
Forward foreign currency contracts gains d) - 33 33
Forward foreign currency contracts (losses) d) - (40) (40)
Net fair value 12,301 28,932 41,233
There were no assets for which significant unobservable inputs (Level 3) were
used in determining fair value during the years ended 31 August 2022 and 31
August 2021. For the years ended 31 August 2022 and 31 August 2021 there
were no transfers between any levels.
a) Quoted equities. The fair value of the Company's investments in quoted
equities has been determined by reference to their quoted bid prices at the
reporting date. Quoted equities included in Fair Value Level 1 are actively
traded on recognised stock exchanges.
b) Quoted bonds. The fair value of Level 2 quoted bonds has been determined by
reference to their quoted bid prices within markets not considered to be
active. Index linked bonds are adjusted for indexation arising from the
movement of the consumer prices index within the country of their
incorporation.
c) Investment in Subsidiary. The Company's investment in its Subsidiary is
categorised in Fair Value Level 2 as its fair value has been calculated with
reference to its unadjusted net asset value. The net asset value is primarily
driven by the value of underlying investments, which are all valued using
unadjusted quoted prices, and other net assets held at amortised cost,
including cash. There are no significant inputs used for the valuation that
are not observable to the Directors.
d) Forward foreign currency contracts. The fair value of forward currency
contracts is calculated by reference to current forward exchange rates for
contracts with similar maturity profiles.
20. Analysis of changes in financial liabilities during the year
The following tables show the movements of financial liabilities in the
Statement of Financial Position during the years ended 31 August 2022 and 31
August 2021 :
At Other At
1 September 2021 Cash flows movements(A) 31 August 2022
£000 £000 £000 £000
Financing activities
Bank loan (5,500) - - (5,500)
Total (5,500) - - (5,500)
At Other At
1 September 2020 Cash flows movements(A) 31 August 2021
£000 £000 £000 £000
Financing activities
Bank loan (5,500) - - (5,500)
Total (5,500) - - (5,500)
(A) The other movements column represents the cost of repurchasing own shares
as disclosed in the Statement of Changes in Equity.
21. Subsequent events
With the exception of the dividend paid on 28 October 2022, there have been no
events subsequent to the year end, which the Directors consider would have a
material impact on the financial statements.
The Annual General Meeting will be held at 10.00 a.m. on 14 December 2022 at
1(st) Floor, Sir Walter Raleigh House, 48 - 50 Esplanade, St Helier, Jersey
JE2 3QB.
Please note that past performance is not necessarily a guide to the future and
that the value of investments and the income from them may fall as well as
rise and may be affected by exchange rate movements. Investors may not get
back the amount they originally invested.
The Annual Financial Report Announcement is not the Company's statutory
accounts. The above results for the year ended 31 August 2022 are an abridged
version of the Company's full financial statements, which have been approved
and audited with an unqualified report. The Annual Report and Accounts will be
delivered to the Jersey Financial Services Commission in due course.
The audited Annual Report and Accounts will be posted in November 2022. Copies
may be obtained during normal business hours from the Company's Registered
Office, abrdn Capital International Limited, 1(st) Floor, Sir Walter Raleigh
House, 48 - 50 Esplanade, St Helier, Jersey JE2 3QB or from the Company's
website, latamincome.co.uk*.
* Neither the content of the Company's website nor the content of any website
accessible from hyperlinks on the Company's website (or any other website) is
(or is deemed to be) incorporated into, or forms (or is deemed to form) part
of this announcement.
By Order of the Board
abrdn Capital International Limited
Secretary
10 November 2022
Alternative Performance Measures
Alternative performance measures are numerical measures of the Company's
current, historical or future performance, financial position or cash flows,
other than financial measures defined or specified in the applicable financial
framework. The Company's applicable financial framework includes IFRS and the
AIC SORP. The Directors assess the Company's performance against a range of
criteria which are viewed as particularly relevant for closed-end investment
companies.
Discount to net asset value per Ordinary share
The discount is the amount by which the share price is lower than the net
asset value per Ordinary share, expressed as a percentage of the net asset
value per Ordinary share.
31 August 2022 31 August 2021
NAV per Ordinary share (p) a 63.16 62.89
Share price (p) b 52.25 55.75
Discount (a-b)/a 17.3% 11.4%
Dividend cover
Revenue return per Ordinary share divided by dividends per Ordinary share,
expressed as a ratio.
31 August 2022 31 August 2021
Revenue return per Ordinary share (p) a 4.84 2.66
Dividends declared (p) b 3.50 3.50
Dividend cover a/b 1.38 0.76
Net gearing
Net gearing measures the total borrowings less cash and cash equivalents
divided by shareholders' funds, expressed as a percentage. Under AIC reporting
guidance cash and cash equivalents includes net amounts due to and from
brokers at the year end as well as cash at bank and in hand.
31 August 2022 31 August 2021
Borrowings (£'000) a 5,500 5,500
Cash (£'000) b 117 333
Amounts due to brokers (£'000) c 22 6
Amounts due from brokers (£'000) d - 10
Shareholders' funds (£'000) e 36,072 35,919
Net gearing (a-b+c-d)/e 15.0% 14.4%
Ongoing charges
The ongoing charges ratio has been calculated in accordance with guidance
issued by the AIC as the total of investment management fees and
administrative expenses and expressed as a percentage of the average published
daily net asset values with debt at fair value published throughout the year.
2022 2021
Investment management fees (£'000) 337 386
Administrative expenses (£'000) 368 340
Less: non-recurring charges (£'000) (33) (6)
Ongoing charges (£'000) 672 720
Average net assets (£'000) 33,593 35,952
Ongoing charges ratio 2.00% 2.00%
The ongoing charges ratio provided in the Company's Key Information Document
is calculated in line with the PRIIPs regulations which amongst other things,
includes the cost of borrowings and transaction costs.
Total return
NAV and share price total returns show how the NAV and share price has
performed over a period of time in percentage terms, taking into account both
capital returns and dividends paid to shareholders. Share price and NAV total
returns are monitored against open-ended and closed-ended competitors, and the
Benchmark Index, respectively.
Share
Year ended 31 August 2022 NAV Price
Opening at 1 September 2021 a 62.89p 55.75p
Closing at 31 August 2022 b 63.16p 52.25p
Price movements c=(b/a)-1 0.4% -6.3%
Dividend reinvestment(A) d 6.4% 6.6%
Total return c+d +6.8% +0.3%
Share
Year ended 30 August 2021 NAV Price
Opening at 1 September 2020 a 56.65p 49.15p
Closing at 31 August 2021 b 62.89p 55.75p
Price movements c=(b/a)-1 +11.0% +13.4%
Dividend reinvestment(A) d 6.4% 7.5%
Total return c+d +17.4% +20.9%
(A) NAV total return involves investing the net dividend in the NAV of the
Company with debt at fair value on the date on which that dividend goes
ex-dividend. Share price total return involves reinvesting the net dividend in
the share price of the Company on the date on which that dividend goes
ex-dividend.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR FLFIDLSLILIFRecent news on abrdn Latin American Income Fund
See all newsREG - Stock Exch Notice abrdn Latin American - Cancellation - abrdn Latin American Income Fd Ltd
AnnouncementREG - FTSE Russell abrdn Latin American - Abrdn Latin American Income Fund
AnnouncementREG - abrdn Latin American - Result of EGM
AnnouncementREG - Official List abrdn Latin American - Suspension-abrdn Latin American Income Fund
AnnouncementREG - abrdn Inv. Trusts - Net Asset Value(s)
Announcement