UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY
Investment Company Act file number: |
811-08076 |
|
|
Exact name of registrant as specified in charter: |
Aberdeen Emerging Markets Smaller Company Opportunities Fund, Inc. |
|
|
Address of principal executive offices: |
1735 Market Street, 32nd Floor |
|
Philadelphia, PA 19103 |
|
|
Name and address of agent for service: |
Ms. Andrea Melia |
|
Aberdeen Asset Management Inc. |
|
c/o 1735 Market Street, 32nd Floor |
|
Philadelphia, PA 19103 |
|
|
Registrants telephone number, including area code: |
800-522-5465 |
|
|
Date of fiscal year end: |
October 31 |
|
|
Date of reporting period: |
July 31, 2017 |
Item 1. Schedule of Investments
The schedule of investments for the three-month period ended July 31, 2017 is filed herewith.
Shares |
|
Description |
|
Industry and Percentage |
|
Value |
| |
LONG-TERM EQUITY SECURITIES IN EMERGING MARKET COUNTRIES96.2% |
|
|
| |||||
COMMON STOCKS95.1% |
|
|
|
|
| |||
BRAZIL10.3% |
|
|
|
|
| |||
198,961 |
|
Arezzo Industria e Comercio SA |
|
Textiles, Apparel & Luxury Goods 1.6% |
|
$ |
2,360,722 |
|
293,155 |
|
Iguatemi Empresa de Shopping Centers SA |
|
Real Estate Management & Development 2.3% |
|
3,450,154 |
| |
112,272 |
|
Localiza Rent a Car SA |
|
Road & Rail 1.3% |
|
1,868,590 |
| |
481,595 |
|
Odontoprev SA |
|
Health Care Providers & Services 1.3% |
|
2,009,252 |
| |
193,845 |
|
TOTVS SA |
|
Software 1.3% |
|
1,864,880 |
| |
165,537 |
|
Valid Solucoes e Servicos de Seguranca em Meios de Pagamento e Identificacao SA |
|
Commercial Services & Supplies 0.6% |
|
895,541 |
| |
249,692 |
|
Wilson Sons Ltd., BDR |
|
Transportation Infrastructure 1.9% |
|
2,819,329 |
| |
|
|
|
|
|
|
15,268,468 |
| |
CHILE3.2% |
|
|
|
|
| |||
1,791,700 |
|
Parque Arauco SA |
|
Real Estate Management & Development 3.2% |
|
4,709,834 |
| |
|
|
|
|
|
| |||
CHINA3.9% |
|
|
|
|
| |||
1,085,092 |
|
Shenzhen Airport Co. Ltd., A Shares (Stock Connect) (a) |
|
Transportation Infrastructure 1.0% |
|
1,446,488 |
| |
1,172,000 |
|
Tong Ren Tang Technologies Co. Ltd., H Shares (b) |
|
Pharmaceuticals 1.1% |
|
1,698,758 |
| |
1,969,400 |
|
Yanlord Land Group Ltd. (b) |
|
Real Estate Management & Development 1.8% |
|
2,630,005 |
| |
|
|
|
|
|
|
5,775,251 |
| |
EGYPT1.0% |
|
|
|
|
| |||
133,914 |
|
Edita Food Industries SAE, GDR |
|
Food Products 0.5% |
|
703,049 |
| |
2,247,692 |
|
Juhayna Food Industries (c) |
|
Food Products 0.5% |
|
845,629 |
| |
|
|
|
|
|
|
1,548,678 |
| |
HONG KONG2.6% |
|
|
|
|
| |||
17,839,000 |
|
Pacific Basin Shipping Ltd. (b)(c) |
|
Marine 2.6% |
|
3,897,817 |
| |
|
|
|
|
|
|
|
| |
INDIA15.4% |
|
|
|
|
| |||
235,000 |
|
Castrol (India) Ltd. (b) |
|
Chemicals 1.0% |
|
1,468,166 |
| |
180,000 |
|
Container Corp. of India Ltd. (b) |
|
Road & Rail 2.2% |
|
3,206,765 |
| |
358,744 |
|
Godrej Consumer Products Ltd. (b) |
|
Personal Products 3.9% |
|
5,798,702 |
| |
450,000 |
|
Kansai Nerolac Paints Ltd. (b) |
|
Chemicals 2.1% |
|
3,184,142 |
| |
204,185 |
|
Mphasis Ltd. (b) |
|
Information Technology Services 1.3% |
|
1,916,095 |
| |
82,500 |
|
Piramal Enterprises Ltd. (b) |
|
Pharmaceuticals 2.5% |
|
3,798,138 |
| |
341,000 |
|
Ramco Cements Ltd. (The) (b) |
|
Construction Materials 2.4% |
|
3,615,645 |
| |
|
|
|
|
|
|
22,987,653 |
| |
INDONESIA9.3% |
|
|
|
|
| |||
45,278,000 |
|
Ace Hardware Indonesia Tbk PT |
|
Specialty Retail 2.5% |
|
3,772,034 |
| |
9,086,300 |
|
AKR Corporindo Tbk PT |
|
Trading Companies & Distributors 3.2% |
|
4,705,454 |
| |
22,277,147 |
|
Bank Permata Tbk PT (b)(c) |
|
Banks 0.8% |
|
1,178,932 |
| |
2,170,000 |
|
Delfi Ltd. |
|
Food Products 2.1% |
|
3,202,597 |
| |
17,142,800 |
|
Holcim Indonesia Tbk PT (b)(c) |
|
Construction Materials 0.7% |
|
1,004,028 |
| |
|
|
|
|
|
|
13,863,045 |
| |
See Notes to Portfolio of Investments.
Aberdeen Emerging Markets Smaller Company Fund, Inc.
JORDAN0.9% |
|
|
|
|
| |||
75,317 |
|
Hikma Pharmaceuticals PLC (b) |
|
Pharmaceuticals 0.9% |
|
$ |
1,402,000 |
|
|
|
|
|
|
|
|
| |
KENYA1.2% |
|
|
|
|
| |||
701,800 |
|
East African Breweries Ltd. |
|
Beverages 1.2% |
|
1,788,584 |
| |
|
|
|
|
|
|
|
| |
MALAYSIA5.2% |
|
|
|
|
| |||
4,537,900 |
|
Aeon Co. (M) Bhd |
|
Multiline Retail 1.6% |
|
2,321,149 |
| |
241,500 |
|
Heineken Malaysia Bhd |
|
Beverages 0.7% |
|
1,014,170 |
| |
790,200 |
|
Oriental Holdings Bhd (b) |
|
Automobiles 0.8% |
|
1,215,927 |
| |
2,037,688 |
|
SP Setia Bhd Group |
|
Real Estate Management & Development 1.1% |
|
1,575,324 |
| |
240,000 |
|
United Plantations Bhd |
|
Food Products 1.0% |
|
1,549,924 |
| |
|
|
|
|
|
|
7,676,494 |
| |
MEXICO3.4% |
|
|
|
|
| |||
98,676 |
|
Grupo Aeroportuario del Centro Norte SAB de CV, ADR |
|
Transportation Infrastructure 3.4% |
|
4,992,019 |
| |
|
|
|
|
|
|
|
| |
NETHERLANDS2.1% |
|
|
|
|
| |||
52,000 |
|
ASM International NV (b) |
|
Semiconductors & Semiconductor Equipment 2.1% |
|
3,129,243 |
| |
|
|
|
|
|
|
|
| |
NIGERIA1.2% |
|
|
|
|
| |||
1,333,263 |
|
Guaranty Trust Bank PLC |
|
Banks 0.1% |
|
141,995 |
| |
2,125,000 |
|
Guinness Nigeria PLC |
|
Beverages 0.2% |
|
383,086 |
| |
19,437,011 |
|
Zenith Bank PLC |
|
Banks 0.9% |
|
1,304,601 |
| |
|
|
|
|
|
|
1,829,682 |
| |
PERU0.4% |
|
|
|
|
| |||
195,354 |
|
Grana y Montero SA, ADR (c) |
|
Construction & Engineering 0.4% |
|
623,179 |
| |
|
|
|
|
|
|
|
| |
PHILIPPINES4.2% |
|
|
|
|
| |||
915,080 |
|
Jollibee Foods Corp. (b) |
|
Hotels, Restaurants & Leisure 2.7% |
|
4,077,538 |
| |
1,650,000 |
|
Pilipinas Shell Petroleum Corp. |
|
Oil, Gas & Consumable Fuels 1.5% |
|
2,164,685 |
| |
|
|
|
|
|
|
6,242,223 |
| |
POLAND2.0% |
|
|
|
|
| |||
99,589 |
|
Dino Polska SA (b)(c)(d) |
|
Food & Staples Retailing 1.0% |
|
1,475,765 |
| |
144,115 |
|
Eurocash SA |
|
Food & Staples Retailing 1.0% |
|
1,424,016 |
| |
|
|
|
|
|
|
2,899,781 |
| |
REPUBLIC OF SOUTH KOREA2.7% |
|
|
|
|
| |||
73,171 |
|
BNK Financial Group, Inc. (b) |
|
Banks 0.5% |
|
739,360 |
| |
3,800 |
|
Medy-Tox, Inc. (b) |
|
Biotechnology 1.3% |
|
2,006,928 |
| |
6,000 |
|
Shinsegae, Inc. (b) |
|
Multiline Retail 0.9% |
|
1,275,100 |
| |
|
|
|
|
|
|
4,021,388 |
| |
ROMANIA2.1% |
|
|
|
|
| |||
851,000 |
|
BRD-Groupe Societe Generale SA (b) |
|
Banks 2.1% |
|
3,110,234 |
| |
|
|
|
|
|
|
|
| |
RUSSIA0.9% |
|
|
|
|
| |||
133,150 |
|
Beluga Group PJSC (c) |
|
Beverages 0.9% |
|
1,347,311 |
| |
|
|
|
|
|
|
|
| |
SOUTH AFRICA6.0% |
|
|
|
|
| |||
893,654 |
|
African Oxygen Ltd. |
|
Chemicals 0.9% |
|
1,275,510 |
| |
128,384 |
|
City Lodge Hotels Ltd. |
|
Hotels, Restaurants & Leisure 0.9% |
|
1,373,586 |
| |
See Notes to Portfolio of Investments.
204,900 |
|
Clicks Group Ltd. (b) |
|
Food & Staples Retailing 1.6% |
|
$ |
2,323,204 |
|
181,276 |
|
JSE Ltd. |
|
Capital Markets 1.2% |
|
1,815,683 |
| |
164,735 |
|
SPAR Group Ltd. (The) (b) |
|
Food & Staples Retailing 1.4% |
|
2,064,802 |
| |
|
|
|
|
|
|
8,852,785 |
| |
SRI LANKA2.0% |
|
|
|
|
| |||
2,689,150 |
|
John Keells Holdings PLC |
|
Industrial Conglomerates 2.0% |
|
3,043,792 |
| |
|
|
|
|
|
|
|
| |
TAIWAN1.8% |
|
|
|
|
| |||
209,070 |
|
Poya International Co. Ltd. |
|
Multiline Retail 1.8% |
|
2,665,694 |
| |
|
|
|
|
|
|
|
| |
THAILAND5.6% |
|
|
|
|
| |||
2,600,100 |
|
BEC World PCL, Foreign Shares (b) |
|
Media 1.0% |
|
1,445,520 |
| |
190,000 |
|
Bumrungrad Hospital PCL, Foreign Shares (b) |
|
Health Care Providers & Services 0.7% |
|
998,903 |
| |
800,000 |
|
Central Pattana PCL, Foreign Shares (b) |
|
Real Estate Management & Development 1.1% |
|
1,670,981 |
| |
1,679,000 |
|
Hana Microelectronics PCL, Foreign Shares (b) |
|
Electronic Equipment Instruments & Components 1.3% |
|
2,027,172 |
| |
238,399 |
|
Siam City Cement PCL, Foreign Shares (b) |
|
Construction Materials 1.5% |
|
2,228,116 |
| |
|
|
|
|
|
|
8,370,692 |
| |
TURKEY7.7% |
|
|
|
|
| |||
1,723,011 |
|
Aksigorta AS (b)(c) |
|
Insurance 1.1% |
|
1,557,765 |
| |
240,745 |
|
AvivaSA Emeklilik ve Hayat AS |
|
Insurance 0.9% |
|
1,364,702 |
| |
703,784 |
|
Cimsa Cimento Sanayi VE Ticaret AS (b) |
|
Construction Materials 2.0% |
|
3,012,044 |
| |
319,391 |
|
Coca-Cola Icecek AS (b) |
|
Beverages 2.6% |
|
3,859,657 |
| |
106,978 |
|
Logo Yazilim Sanayi Ve Ticaret AS (c) |
|
Software 1.1% |
|
1,670,320 |
| |
|
|
|
|
|
|
11,464,488 |
| |
|
|
|
|
|
|
141,510,335 |
| |
PRIVATE EQUITY 1.0% |
|
|
|
|
| |||
GLOBAL0.7%* |
|
|
|
|
| |||
7,248,829 |
(e) |
Emerging Markets Ventures I, L.P. (b)(c)(f)(g)(h)(i) |
|
Private Equity 0.1% |
|
123,520 |
| |
2,400,000 |
(e) |
Telesoft Partners II QP, L.P. (b)(c)(f)(g)(j) |
|
Private Equity 0.6% |
|
922,272 |
| |
|
|
|
|
|
|
1,045,792 |
| |
ISRAEL0.3% |
|
|
|
|
| |||
1,674,587 |
(e) |
BPA Israel Ventures, LLC (b)(c)(f)(g)(h)(i) |
|
Private Equity 0.1% |
|
158,500 |
| |
72,640 |
|
Exent Technologies Ltd. Preferred A1 Shares (b)(c)(f)(g)(j)(k) |
|
Private Equity % |
|
|
| |
62,304 |
|
Exent Technologies Ltd. Preferred C Shares (b)(c)(f)(g)(j)(k) |
|
Private Equity % |
|
|
| |
15,716 |
|
Exent Technologies Ltd. Warrants A1 (b)(c)(f)(g)(j)(k) |
|
Private Equity % |
|
|
| |
46,856 |
|
Flash Networks Ltd. Ordinary Shares (b)(c)(f)(g)(j)(k) |
|
Private Equity % |
|
|
| |
12 |
|
Flash Networks Ltd. Series C Preferred (b)(c)(f)(g)(j)(k) |
|
Private Equity % |
|
|
| |
23,264 |
|
Flash Networks Ltd. Series C-1 Preferred (b)(c)(f)(g)(j)(k) |
|
Private Equity % |
|
|
| |
13,526 |
|
Flash Networks Ltd. Series D Preferred (b)(c)(f)(g)(j)(k) |
|
Private Equity % |
|
|
| |
9,952 |
|
Flash Networks Ltd. Series E Preferred (b)(c)(f)(g)(j)(k) |
|
Private Equity % |
|
|
| |
22 |
|
Flash Networks Ltd. Warrants C (b)(c)(f)(g)(j)(k) |
|
Private Equity % |
|
|
|
See Notes to Portfolio of Investments.
52 |
|
Flash Networks Ltd. Warrants Ordinary (b)(c)(f)(g)(j)(k) |
|
Private Equity % |
|
$ |
|
|
2,750,000 |
(e) |
Giza GE Venture Fund III, L.P. (b)(c)(f)(g)(i) |
|
Private Equity % |
|
55,220 |
| |
761,184 |
(e) |
Neurone Ventures II, L.P. (b)(c)(f)(g)(j) |
|
Private Equity 0.2% |
|
243,221 |
| |
32,574 |
|
Vidyo, Inc. Trust A (Preferred) (b)(c)(f)(g)(j)(l) |
|
Private Equity % |
|
|
| |
15,531 |
|
Vidyo, Inc. Trust B (Preferred) (b)(c)(f)(g)(j)(l) |
|
Private Equity % |
|
|
| |
13,219 |
|
Vidyo, Inc. Trust B1 (Preferred) (b)(c)(f)(g)(j)(l) |
|
Private Equity % |
|
|
| |
6,864 |
|
Vidyo, Inc. Trust C (Preferred) (b)(c)(f)(g)(j)(l) |
|
Private Equity % |
|
|
| |
4,150 |
|
Vidyo, Inc. Trust C1 (Preferred) (b)(c)(f)(g)(j)(l) |
|
Private Equity % |
|
|
| |
1,802 |
|
Vidyo, Inc. Trust Common (b)(c)(f)(g)(j)(l) |
|
Private Equity % |
|
|
| |
2,713 |
|
Vidyo, Inc. Trust D (Preferred) (b)(c)(f)(g)(j)(l) |
|
Private Equity % |
|
|
| |
|
|
|
|
|
|
456,941 |
| |
|
|
|
|
|
|
1,502,733 |
| |
PREFERRED STOCK0.1% |
|
|
|
|
| |||
MALAYSIA0.1% |
|
|
|
|
| |||
767,512 |
|
SP Setia Bhd Group, Preferred Shares (c)(m) |
|
Real Estate Management & Development 0.1% |
|
206,152 |
| |
|
|
|
|
|
|
206,152 |
| |
RIGHT0.0% |
|
|
|
|
| |||
NIGERIA0.0% |
|
|
|
|
| |||
965,909 |
|
Guinness Nigeria PLC (c) |
|
Beverages % |
|
21,338 |
| |
|
|
|
|
|
|
21,338 |
| |
|
Total Long-Term Equity Securities in Emerging Market Countries96.2% (cost $145,858,627) |
|
143,240,558 |
| ||||
|
|
|
|
|
|
|
| |
LONG-TERM EQUITY SECURITIES IN DEVELOPED MARKET COUNTRIES2.0% |
|
|
| |||||
COMMON STOCK2.0% |
|
|
|
|
| |||
UNITED STATES2.0% |
|
|
|
|
| |||
35,162 |
|
EPAM Systems, Inc. (c) |
|
Information Technology Services 2.0% |
|
3,021,471 |
| |
|
|
|
|
|
|
3,021,471 |
| |
PRIVATE EQUITY 0.0% |
|
|
|
|
| |||
UNITED STATES0.0% |
|
|
|
|
| |||
1,952,000 |
(e) |
Technology Crossover Ventures IV, L.P. (b)(c)(f)(g)(h)(i) |
|
Private Equity % |
|
2,264 |
| |
|
|
|
|
|
|
2,264 |
| |
|
|
Total Long-Term Equity Securities in Developed Market Countries2.0% (cost $1,710,877) |
|
3,023,735 |
| |||
SHORT-TERM INVESTMENT2.0% |
|
|
|
|
| |||
UNITED STATES2.0% |
|
|
|
|
| |||
2,960,178 |
|
State Street Institutional U.S. Government Money Market Fund(n) |
|
|
|
2,960,178 |
| |
|
|
Total Short-Term Investment2.0% (cost $2,960,178) |
|
2,960,178 |
| |||
|
|
Total Investments100.2% (cost $150,529,682) (o) |
|
149,224,471 |
| |||
|
|
Liabilities in Excess of Other Assets(0.2)% |
|
(365,472 |
) | |||
|
|
Net Assets100.0% |
|
|
|
$ |
148,858,999 |
|
(a) |
China A Shares. These shares are issued in local currency, traded in the local stock markets and are held through either a Qualified Foreign Institutional Investor (QFII) license or the Shanghai or Shenzhen Hong-Kong Stock Connect program. |
See Notes to Portfolio of Investments.
(b) |
Fair Values are determined pursuant to procedures approved by the Funds Board of Directors. Unless otherwise noted, securities are valued by applying valuation factors to the exchange traded price. See Note (a) of the accompanying Notes to Portfolio of Investments. |
(c) |
Non-income producing security. |
(d) |
Denotes a security issued under Regulation S or Rule 144A. |
(e) |
Represents contributed capital. |
(f) |
Restricted security, not readily marketable. See Note (b) of the accompanying Notes to Portfolio of Investments. |
(g) |
Illiquid security. |
(h) |
As of July 31, 2017, the aggregate amount of open commitments for the Fund is $1,524,584. |
(i) |
In liquidation. |
(j) |
Active investments. |
(k) |
Exent Technologies Ltd. and Flash Networks Ltd. were securities received from the dissolution of Concord Fund I Liquidating Main Trust. See Note (b) of the accompanying Notes to Portfolio of Investments. |
(l) |
Vidyo, Inc. Trust was a spinoff from SVE Star Ventures IX. See Note (b) of the accompanying Notes to Portfolio of Investments. |
(m) |
Redeemable Convertible Preferred security. |
(n) |
Registered investment company advised by State Street Global Advisors. |
(o) |
See accompanying Notes to Portfolio of Investments for tax unrealized appreciation/(depreciation) of securities. |
* |
Global is the percentage attributable to the Funds holdings in a private equity fund which invests globally and is not categorized under a particular country. |
|
|
ADR |
American Depositary Receipt |
BDR |
Brazilian Depositary Receipt |
GDR |
Global Depositary Receipt |
See Notes to Portfolio of Investments.
Notes to Portfolio of Investments (unaudited)
July 31, 2017
Summary of Significant Accounting Policies
a. Security Valuation:
The Fund values its securities at current market value or fair value, consistent with regulatory requirements. Fair value is defined in the Funds Valuation and Liquidity Procedures as the price that could be received to sell an asset or paid to transfer a liability in an orderly transaction between willing market participants without a compulsion to transact at the measurement date.
Equity securities that are traded on an exchange are valued at the last quoted sale price on the principal exchange on which the security is traded at the Valuation Time subject to application, when appropriate, of the valuation factors described in the paragraph below. The Valuation Time is as of the close of regular trading on the New York Stock Exchange (usually 4:00 p.m. Eastern Time). In the absence of a sale price, the security is valued at the mean of the bid/ask price quoted at the close on the principal exchange on which the security is traded. Securities traded on NASDAQ are valued at the NASDAQ official closing price. Closed-end funds and exchange-traded funds (ETFs) are valued at the market price of the security at the Valuation Time. A security using any of these pricing methodologies is determined to be a Level 1 investment.
Foreign equity securities that are traded on foreign exchanges that close prior to the Valuation Time are valued by applying valuation factors to the last sale price or the mean price as noted above. Valuation factors are provided by an independent pricing service provider approved by the Funds Board of Directors (the Board). These valuation factors are used when pricing the Funds portfolio holdings to estimate market movements between the time foreign markets close and the time the Fund values such foreign securities. These valuation factors are based on inputs such as depositary receipts, indices, futures, sector indices/ETFs, exchange rates, and local exchange opening and closing prices of each security. When prices with the application of valuation factors are utilized, the value assigned to the foreign securities may not be the same as quoted or published prices of the securities on their primary markets. A security that applies a valuation factor is determined to be a Level 2 investment because the exchange-traded price has been adjusted. Valuation factors are not utilized if the independent pricing service provider is unable to provide a valuation factor or if the valuation factor falls below a predetermined threshold; in such case, the security is determined to be a Level 1 investment.
Short-term investments are comprised of cash and cash equivalents invested in short-term investment funds which are redeemable daily. The Fund sweeps available cash into the State Street Institutional U.S. Government Money Market Fund, which has elected to qualify as a government money market fund pursuant to Rule 2a-7 under the Investment Company Act of 1940, as amended, and has an objective, which is not guaranteed, to maintain a $1.00 per share net asset value. Generally, these investment types are categorized as Level 1 investments.
In the event that a securitys market quotations are not readily available or are deemed unreliable (for reasons other than because the foreign exchange on which it trades closes before the Valuation Time), the security is valued at fair value as determined by the Funds Pricing Committee, taking into account the relevant factors and surrounding circumstances using valuation policies and procedures approved by the Board. A security that has been fair valued by the Funds Pricing Committee may be classified as Level 2 or Level 3 depending on the nature of the inputs.
The Fund may also invest in private equity private placement securities, which represented 1.0% of the net assets of the Fund as of July 31, 2017. The private equity private placement securities in which the Fund is invested are deemed to be restricted securities. In the absence of readily ascertainable market values, these securities are valued at fair value as determined in good faith by, or under the direction of the Board, pursuant to valuation policies and procedures established by the Board. The Funds estimate of fair value assumes a willing buyer and a willing seller neither of whom are acting under the compulsion to buy or sell. Although these securities may be resold in privately negotiated transactions, the prices realized on such sales could differ from the prices originally paid by the Fund or the current carrying values, and the difference could be material. These securities are stated at fair value as determined by the Funds Pricing Committee by utilizing the net asset valuations provided by the underlying funds as a practical expedient. In determining the fair value of these investments, management uses the market approach which includes as the primary input the capital balance reported; however, adjustments to the reported capital balance may be made based on various factors, including, but not
Notes to Portfolio of Investments (unaudited) (continued)
July 31, 2017
limited to, the attributes of the interest held, including the rights and obligations, and any restrictions or illiquidity of such interests, and the fair value of these private equity investments.
In accordance with the authoritative guidance on fair value measurements and disclosures under accounting principles generally accepted in the United States of America, the Fund discloses the fair value of its investments using a three-level hierarchy that classifies the inputs to valuation techniques used to measure the fair value. The hierarchy assigns Level 1 measurements to valuations based upon unadjusted quoted prices in active markets for identical assets, Level 2 measurements to valuations based upon other significant observable inputs, including adjusted quoted prices in active markets for similar assets, and Level 3 measurements to valuations based upon unobservable inputs that are significant to the valuation. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability, which are based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entitys own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. A financial instruments level within the fair value hierarchy is based upon the lowest level of any input that is significant to the fair value measurement. The three-level hierarchy of inputs is summarized below:
Level 1 quoted prices in active markets for identical investments;
Level 2 other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, and credit risk); or
Level 3 significant unobservable inputs (including the Funds own assumptions in determining the fair value of investments).
The following is a summary of the inputs used as of July 31, 2017 in valuing the Funds investments and other financial instruments at fair value. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Please refer to the Portfolio of Investments for a detailed breakout of the security types:
Investments, at Value |
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total |
| ||||
Long-Term Investments |
|
|
|
|
|
|
|
|
| ||||
Banks |
|
$ |
1,446,596 |
|
$ |
5,028,526 |
|
$ |
|
|
$ |
6,475,122 |
|
Beverages |
|
4,533,151 |
|
3,859,657 |
|
|
|
8,392,808 |
| ||||
Capital Markets |
|
1,815,683 |
|
|
|
|
|
1,815,683 |
| ||||
Chemicals |
|
1,275,510 |
|
4,652,308 |
|
|
|
5,927,818 |
| ||||
Commercial Services & Supplies |
|
895,541 |
|
|
|
|
|
895,541 |
| ||||
Construction & Engineering |
|
623,179 |
|
|
|
|
|
623,179 |
| ||||
Food & Staples Retailing |
|
1,424,016 |
|
5,863,771 |
|
|
|
7,287,787 |
| ||||
Food Products |
|
6,301,199 |
|
|
|
|
|
6,301,199 |
| ||||
Health Care Providers & Services |
|
2,009,252 |
|
998,903 |
|
|
|
3,008,155 |
| ||||
Hotels, Restaurants & Leisure |
|
1,373,586 |
|
4,077,538 |
|
|
|
5,451,124 |
| ||||
Industrial Conglomerates |
|
3,043,792 |
|
|
|
|
|
3,043,792 |
| ||||
Information Technology Services |
|
3,021,471 |
|
1,916,095 |
|
|
|
4,937,566 |
| ||||
Insurance |
|
1,364,702 |
|
1,557,765 |
|
|
|
2,922,467 |
| ||||
Multiline Retail |
|
4,986,843 |
|
1,275,100 |
|
|
|
6,261,943 |
| ||||
Oil, Gas & Consumable Fuels |
|
2,164,685 |
|
|
|
|
|
2,164,685 |
| ||||
Real Estate Management & Development |
|
9,941,464 |
|
4,300,986 |
|
|
|
14,242,450 |
| ||||
Road & Rail |
|
1,868,590 |
|
3,206,765 |
|
|
|
5,075,355 |
| ||||
Software |
|
3,535,200 |
|
|
|
|
|
3,535,200 |
| ||||
Specialty Retail |
|
3,772,034 |
|
|
|
|
|
3,772,034 |
| ||||
Textiles, Apparel & Luxury Goods |
|
2,360,722 |
|
|
|
|
|
2,360,722 |
| ||||
Trading Companies & Distributors |
|
4,705,454 |
|
|
|
|
|
4,705,454 |
| ||||
Transportation Infrastructure |
|
9,257,836 |
|
|
|
|
|
9,257,836 |
| ||||
Other |
|
|
|
36,280,038 |
|
|
|
36,280,038 |
| ||||
Rights |
|
21,338 |
|
|
|
|
|
21,338 |
| ||||
Short-Term Investment |
|
2,960,178 |
|
|
|
|
|
2,960,178 |
| ||||
Total |
|
$ |
74,702,022 |
|
$ |
73,017,452 |
|
$ |
|
|
$ |
147,719,474 |
|
Private Equity (a) |
|
|
|
|
|
|
|
1,504,997 |
| ||||
Total Investments |
|
|
|
|
|
|
|
$ |
149,224,471 |
|
Amounts listed as - are $0 or round to $0.
(a) Private Equity investments are measured at the net asset valuations, as a practical expedient for fair value, and are not required to be classified in the fair value hierarchy as per Accounting Standards Update 2015-07. The fair value amounts presented are intended to permit reconciliation to the total investment amount presented in the Portfolio of Investments.
Notes to Portfolio of Investments (unaudited) (continued)
July 31, 2017
For movements between the levels within the fair value hierarchy, the Fund has adopted a policy of recognizing transfers at the end of each period. The utilization of valuation factors may result in transfers between Level 1 and Level 2. For the period ended July 31, 2017, securities issued by Clicks Group Ltd., Oriental Holdings Bhd, Piramal Enterprises Ltd. and SPAR Group Ltd. (The) transferred from Level 1 to Level 2 at the values of $2,323,204, $1,215,927, $3,798,138 and $2,064,802, respectively, because there was a valuation factor applied at July 31, 2017. Securities issued by Ace Hardware Indonesia Tbk PT, Aeon Co. (M) Bhd, African Oxygen Ltd., AKR Corporindo Tbk PT, Eurocash SA, Heineken Malaysia Bhd, JSE Ltd. and Poya International Co. Ltd. transferred from Level 2 to Level 1 at the values of $3,772,034, $2,321,149, $1,275,510, $4,705,454, $1,424,016, $1,014,170, $1,815,683 and $2,665,694, respectively, because there was not a valuation factor applied at July 31, 2017.
For the period ended July 31, 2017, there were no significant changes to the fair valuation methodologies.
b. Private Equity Investments:
Certain of the Funds investments, listed in the chart below, are restricted as to resale and are valued at fair value as determined in good faith by, or under the direction of, the Board under procedures established by the Board in the absence of readily ascertainable market values.
Security (1) |
|
Acquisition Date(s) |
|
Total |
|
Cost |
|
Fair Value |
|
Percent |
|
Cumulative |
| ||||
BPA Israel Ventures, LLC (3) |
|
10/05/00 12/09/05 |
|
$ |
2,300,000 |
|
$ |
904,952 |
|
$ |
158,500 |
|
0.11 |
|
$ |
352,823 |
|
Emerging Markets Ventures I, L.P. (3) |
|
01/22/98 01/10/06 |
|
8,100,000 |
|
2,474,673 |
|
123,520 |
|
0.08 |
|
7,567,734 |
| ||||
Exent Technologies Ltd. Preferred A1 Shares (4) |
|
11/29/15 |
|
|
|
118,799 |
|
|
|
|
|
|
| ||||
Exent Technologies Ltd. Preferred C Shares (4) |
|
11/29/15 |
|
|
|
|
|
|
|
|
|
|
| ||||
Exent Technologies Ltd. Warrants A1 (4) |
|
11/29/15 |
|
|
|
|
|
|
|
|
|
|
| ||||
Flash Networks Ltd. Ordinary Shares (4) |
|
11/29/15 |
|
|
|
109,226 |
|
|
|
|
|
|
| ||||
Flash Networks Ltd. Series C Preferred (4) |
|
11/29/15 |
|
|
|
|
|
|
|
|
|
|
| ||||
Flash Networks Ltd. Series C-1 Preferred (4) |
|
11/29/15 |
|
|
|
|
|
|
|
|
|
|
| ||||
Flash Networks Ltd. Series D Preferred (4) |
|
11/29/15 |
|
|
|
|
|
|
|
|
|
|
| ||||
Flash Networks Ltd. Series E Preferred (4) |
|
11/29/15 |
|
|
|
|
|
|
|
|
|
|
| ||||
Flash Networks Ltd. Warrants C (4) |
|
11/29/15 |
|
|
|
|
|
|
|
|
|
|
| ||||
Flash Networks Ltd. Warrants Ordinary (4) |
|
11/29/15 |
|
|
|
|
|
|
|
|
|
|
| ||||
Giza GE Venture Fund III, L.P. |
|
01/31/00 11/23/06 |
|
2,750,000 |
|
1,674,005 |
|
55,220 |
|
0.04 |
|
928,289 |
| ||||
Neurone Ventures II, L.P. |
|
11/24/00 12/21/10 |
|
750,000 |
|
121,786 |
|
243,221 |
|
0.16 |
|
533,564 |
| ||||
Technology Crossover Ventures IV, L.P. (3) |
|
03/08/00 - 09/27/10 |
|
2,000,000 |
|
359,691 |
|
2,264 |
|
|
|
3,045,426 |
| ||||
Telesoft Partners II QP, L.P. |
|
07/14/00 - 03/01/10 |
|
2,400,000 |
|
1,112,731 |
|
922,272 |
|
0.62 |
|
1,282,411 |
| ||||
Vidyo, Inc. Trust A (Preferred) (5) |
|
10/24/12 |
|
|
|
29,796 |
|
|
|
|
|
|
| ||||
Vidyo, Inc. Trust B (Preferred) (5) |
|
10/24/12 |
|
|
|
14,207 |
|
|
|
|
|
|
| ||||
Vidyo, Inc. Trust B1 (Preferred) (5) |
|
10/24/12 |
|
|
|
12,092 |
|
|
|
|
|
|
| ||||
Vidyo, Inc. Trust C (Preferred) (5) |
|
10/24/12 |
|
|
|
6,279 |
|
|
|
|
|
|
| ||||
Vidyo, Inc. Trust C1 (Preferred) (5) |
|
10/24/12 |
|
|
|
3,796 |
|
|
|
|
|
|
| ||||
Vidyo, Inc. Trust Common (5) |
|
10/24/12 |
|
|
|
1,648 |
|
|
|
|
|
|
| ||||
Vidyo, Inc. Trust D (Preferred) (5) |
|
10/24/12 |
|
|
|
2,482 |
|
|
|
|
|
|
| ||||
Total |
|
|
|
$ |
18,300,000 |
|
$ |
6,946,163 |
|
$ |
1,504,997 |
|
1.01 |
|
$ |
13,710,247 |
|
Amounts listed as are $0 or round to $0.
Notes to Portfolio of Investments (unaudited) (concluded)
July 31, 2017
(1) Exent Technologies Ltd., Flash Networks Ltd., Neurone Ventures II, L.P., Telesoft Partners II QP, L.P. and Vidyo, Inc. Trust are still considered active investments by the Funds Adviser. BPA Israel Ventures, LLC, Giza GE Venture Fund III, L.P., Emerging Markets Ventures I, L.P. and Technology Crossover Ventures IV, L.P. are in liquidation.
(2) Cumulative Distributions include distributions received from income, realized gains or return of capital. Distributions from return of capital will reduce the cost basis of the security.
(3) BPA Israel Ventures LLC has open commitments of $625,413. Emerging Markets Ventures I, L.P. has open commitments of $851,171. Technology Crossover Ventures IV, LP has open commitments of $48,000.
(4) Exent Technologies Ltd. and Flash Networks Ltd. were securities received from the dissolution of Concord Fund I Liquidating Main Trust.
(5) Vidyo Inc., Trust was a spinoff from SVE Star Ventures IX. SVE Star Ventures IX reached the end of its term in 2012 and, accordingly, its entire portfolio was sold in a secondary transaction which closed on December 24, 2012. During the secondary transaction, the Funds pro rata holdings in Vidyo (and its affiliate Delta Vidyo) were excluded from the transaction, placed in trust and considered as a distribution-in-kind.
The Fund may incur certain costs in connection with the disposition of the above securities.
c. Rights Issues and Warrants:
Rights issues give the right, normally to existing shareholders, to buy a proportional number of additional securities at a given price (generally at a discount) within a fixed period (generally a short-term period) and are offered at the companys discretion. Warrants are securities that give the holder the right to buy common stock at a specified price for a specified period of time. Rights issues and warrants are speculative and have no value if they are not exercised before the expiration date. Rights issues and warrants are valued at the last sale price on the exchange on which they are traded.
d. Federal Income Taxes:
The U.S. federal income tax basis of the Funds investments and the net unrealized depreciation as of July 31, 2017 were as follows:
Cost |
|
Appreciation |
|
Depreciation |
|
Net |
| ||||
$ |
150,529,682 |
|
$ |
32,812,345 |
|
$ |
(34,117,556 |
) |
$ |
(1,305,211 |
) |
Item 2. Controls and Procedures
(a) The Registrants principal executive and principal financial officers, or persons performing similar functions, have concluded that the Registrants disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the Investment Company Act of 1940 (17 CFR 270.30a3(b)) and Rule 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934 (17 CFR 240.13a-15(b) or 240.15d-15(b)).
(b) There was no change in the registrants internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940 (17 CFR 270.30a-3(d))) that occurred during the registrants last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting.
Item 3. Exhibits
(a) Certification of Principal Executive Officer and Principal Financial Officer of the Registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is attached hereto as Exhibit 99.302CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Aberdeen Emerging Markets Smaller Company Opportunities Fund, Inc.
By: |
/s/ Christian Pittard |
|
|
Christian Pittard, |
|
|
Principal Executive Officer of |
|
|
Aberdeen Emerging Markets Smaller Company Opportunities Fund, Inc. | |
|
|
|
|
Date: September 28, 2017 |
|
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By: |
/s/ Christian Pittard |
|
|
Christian Pittard, |
|
|
Principal Executive Officer of |
|
|
Aberdeen Emerging Markets Smaller Company Opportunities Fund, Inc. | |
|
|
|
|
Date: September 28, 2017 |
|
By: |
/s/ Andrea Melia |
|
|
Andrea Melia, |
|
|
Principal Financial Officer of |
|
|
Aberdeen Emerging Markets Smaller Company Opportunities Fund, Inc. | |
|
|
|
|
Date: September 28, 2017 |
|