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

 

 

 

Registrant’s telephone number, including area code:

 

800-522-5465

 

 

 

Date of fiscal year end:

 

October 31

 

 

 

Date of reporting period:

 

January 31, 2018

 



 

Item 1. Schedule of Investments

 

The schedule of investments for the three-month period ended January 31, 2018 is filed herewith.

 



 

Portfolio of Investments (unaudited)

 

As of January 31, 2018

 

Shares

 

Description

 

Industry and Percentage
of Net Assets

 

Value
(US$)

 

LONG-TERM EQUITY SECURITIES IN EMERGING MARKET COUNTRIES—90.0%

 

 

 

COMMON STOCKS—88.8%

 

 

 

ARGENTINA—0.8%

 

 

 

49,044

 

BBVA Banco Frances SA, ADR

 

Banks— 0.8%

 

$

1,240,323

 

BRAZIL—11.3%

 

 

 

 

 

136,961

 

Arezzo Industria e Comercio SA

 

Textiles, Apparel & Luxury Goods— 1.6%

 

2,569,416

 

287,585

 

BK Brasil Operacao e Assessoria a Restaurantes SA (a)

 

Hotels, Restaurants & Leisure— 1.0%

 

1,532,703

 

254,155

 

Iguatemi Empresa de Shopping Centers SA (b)

 

Real Estate Management & Development— 2.1%

 

3,435,038

 

261,816

 

Localiza Rent a Car SA (b)

 

Road & Rail— 1.3%

 

2,116,816

 

481,595

 

Odontoprev SA

 

Health Care Providers & Services— 1.6%

 

2,513,787

 

193,845

 

TOTVS SA

 

Software— 1.2%

 

1,977,389

 

165,537

 

Valid Solucoes e Servicos de Seguranca em Meios de Pagamento e Identificacao SA

 

Commercial Services & Supplies— 0.7%

 

1,059,936

 

239,471

 

Wilson Sons Ltd., BDR

 

Transportation Infrastructure— 1.8%

 

2,953,927

 

 

 

 

 

 

 

18,159,012

 

CHILE—3.5%

 

 

 

 

 

1,712,700

 

Parque Arauco SA

 

Real Estate Management & Development— 3.5%

 

5,639,582

 

CHINA—7.4%

 

 

 

 

 

700,991

 

China CYTS Tours Holding Co. Ltd., A Shares (Stock Connect) (c)

 

Hotels, Restaurants & Leisure— 1.6%

 

2,607,323

 

1,185,092

 

Shenzhen Airport Co. Ltd., A Shares (Stock Connect) (c)

 

Transportation Infrastructure— 1.1%

 

1,693,473

 

1,107,000

 

Tong Ren Tang Technologies Co. Ltd., H Shares (b)

 

Pharmaceuticals— 1.1%

 

1,768,747

 

2,855,100

 

Yanlord Land Group Ltd. (b)

 

Real Estate Management & Development— 2.5%

 

4,026,510

 

700,000

 

Zhongsheng Group Holdings Ltd. (b)

 

Specialty Retail— 1.1%

 

1,754,326

 

 

 

 

 

 

 

11,850,379

 

EGYPT—1.3%

 

 

 

 

 

133,914

 

Edita Food Industries SAE, GDR

 

Food Products— 0.4%

 

656,178

 

2,247,692

 

Juhayna Food Industries (b)

 

Food Products— 0.9%

 

1,384,906

 

 

 

 

 

 

 

2,041,084

 

INDIA—15.8%

 

 

 

 

 

470,000

 

Castrol (India) Ltd.

 

Chemicals— 0.9%

 

1,357,451

 

147,000

 

Container Corp. of India Ltd. (b)

 

Road & Rail— 2.0%

 

3,210,936

 

297,744

 

Godrej Consumer Products Ltd.

 

Personal Products— 3.1%

 

4,915,295

 

450,000

 

Kansai Nerolac Paints Ltd. (b)

 

Chemicals— 2.2%

 

3,608,501

 

110,000

 

Max Financial Services Ltd. (a)

 

Insurance— 0.6%

 

924,395

 

204,185

 

Mphasis Ltd. (b)

 

Information Technology Services— 1.8%

 

2,888,379

 

82,500

 

Piramal Enterprises Ltd.

 

Pharmaceuticals— 2.2%

 

3,547,550

 

341,000

 

Ramco Cements Ltd. (The)

 

Construction Materials— 2.5%

 

4,085,325

 

90,000

 

Syngene International Ltd. (d)

 

Life Sciences Tools & Services— 0.5%

 

849,007

 

 

 

 

 

 

 

25,386,839

 

 

See Notes to Portfolio of Investments.

 

Aberdeen Emerging Markets Smaller Company Fund, Inc.

 



 

INDONESIA—8.0%

 

 

 

 

 

45,278,000

 

Ace Hardware Indonesia Tbk PT

 

Specialty Retail— 2.8%

 

$

4,565,508

 

7,286,300

 

AKR Corporindo Tbk PT

 

Trading Companies & Distributors— 2.1%

 

3,387,774

 

22,277,147

 

Bank Permata Tbk PT (a)

 

Banks— 0.7%

 

1,098,175

 

2,170,000

 

Delfi Ltd.

 

Food Products— 1.7%

 

2,712,914

 

17,142,800

 

Holcim Indonesia Tbk PT (a)

 

Construction Materials— 0.7%

 

1,152,371

 

 

 

 

 

 

 

12,916,742

 

JORDAN—0.6%

 

 

 

 

 

75,317

 

Hikma Pharmaceuticals PLC (b)

 

Pharmaceuticals— 0.6%

 

1,035,762

 

KENYA—1.1%

 

 

 

 

 

701,800

 

East African Breweries Ltd.

 

Beverages— 1.1%

 

1,732,161

 

MALAYSIA—2.6%

 

 

 

 

 

4,537,900

 

Aeon Co. (M) Bhd (b)

 

Multiline Retail— 1.2%

 

1,901,901

 

287,000

 

Oriental Holdings Bhd

 

Automobiles— 0.3%

 

478,610

 

2,339,273

 

SP Setia Bhd Group

 

Real Estate Management & Development— 1.1%

 

1,866,497

 

 

 

 

 

 

 

4,247,008

 

MEXICO—2.8%

 

 

 

 

 

110,676

 

Grupo Aeroportuario del Centro Norte SAB de CV, ADR

 

Transportation Infrastructure— 2.8%

 

4,529,969

 

NIGERIA—2.0%

 

 

 

 

 

4,370,209

 

Guaranty Trust Bank PLC

 

Banks— 0.4%

 

595,002

 

3,090,909

 

Guinness Nigeria PLC

 

Beverages— 0.6%

 

1,015,890

 

19,437,011

 

Zenith Bank PLC

 

Banks— 1.0%

 

1,669,106

 

 

 

 

 

 

 

3,279,998

 

PAKISTAN—0.3%

 

 

 

 

 

637,437

 

Maple Leaf Cement Factory Ltd.

 

Construction Materials— 0.3%

 

472,389

 

PERU—0.6%

 

 

 

 

 

303,354

 

Grana y Montero SAA, ADR (a)

 

Construction & Engineering— 0.6%

 

885,794

 

PHILIPPINES—3.5%

 

 

 

 

 

615,080

 

Jollibee Foods Corp. (b)

 

Hotels, Restaurants & Leisure— 2.1%

 

3,411,377

 

1,800,000

 

Pilipinas Shell Petroleum Corp.

 

Oil, Gas & Consumable Fuels— 1.4%

 

2,191,228

 

 

 

 

 

 

 

5,602,605

 

POLAND—2.0%

 

 

 

 

 

99,589

 

Dino Polska SA (a)(b)(d)

 

Food & Staples Retailing— 1.5%

 

2,487,767

 

96,115

 

Eurocash SA (b)

 

Food & Staples Retailing— 0.5%

 

774,624

 

 

 

 

 

 

 

3,262,391

 

REPUBLIC OF SOUTH KOREA—3.7%

 

 

 

 

 

11,000

 

Hanssem Co. Ltd. (b)

 

Household Durables— 1.1%

 

1,755,968

 

19,000

 

Korea Kolmar Co. Ltd.

 

Personal Products— 1.0%

 

1,592,452

 

4,600

 

Medy-Tox, Inc. (b)

 

Biotechnology— 1.6%

 

2,623,560

 

 

 

 

 

 

 

5,971,980

 

ROMANIA—1.6%

 

 

 

 

 

723,000

 

BRD-Groupe Societe Generale SA

 

Banks— 1.6%

 

2,606,762

 

 

See Notes to Portfolio of Investments.

 



 

RUSSIA—0.9%

 

 

 

 

 

133,150

 

Beluga Group PJSC (a)

 

Beverages— 0.9%

 

$

1,504,102

 

SOUTH AFRICA—4.8%

 

 

 

 

 

685,654

 

African Oxygen Ltd.

 

Chemicals— 1.0%

 

1,594,578

 

131,900

 

Clicks Group Ltd.

 

Food & Staples Retailing— 1.2%

 

1,902,299

 

181,276

 

JSE Ltd.

 

Capital Markets— 1.8%

 

2,873,790

 

79,735

 

SPAR Group Ltd. (The)

 

Food & Staples Retailing— 0.8%

 

1,379,819

 

 

 

 

 

 

 

7,750,486

 

SRI LANKA—1.8%

 

 

 

 

 

2,689,150

 

John Keells Holdings PLC

 

Industrial Conglomerates— 1.8%

 

2,881,700

 

TAIWAN—2.2%

 

 

 

 

 

147,000

 

Chroma ATE, Inc.

 

Electronic Equipment Instruments & Components— 0.5%

 

837,248

 

209,070

 

Poya International Co. Ltd. (b)

 

Multiline Retail— 1.7%

 

2,688,114

 

 

 

 

 

 

 

3,525,362

 

THAILAND—4.6%

 

 

 

 

 

2,600,100

 

BEC World PCL, Foreign Shares (b)

 

Media— 0.6%

 

971,302

 

800,000

 

Central Pattana PCL, Foreign Shares (b)

 

Real Estate Management & Development— 1.3%

 

2,120,051

 

1,679,000

 

Hana Microelectronics PCL, Foreign Shares (b)

 

Electronic Equipment Instruments & Components— 1.4%

 

2,277,812

 

238,399

 

Siam City Cement PCL, Foreign Shares (b)

 

Construction Materials— 1.3%

 

2,047,751

 

 

 

 

 

 

 

7,416,916

 

TURKEY—5.6%

 

 

 

 

 

43,879

 

Aksigorta AS (a)(b)

 

Insurance—      %

 

46,411

 

240,745

 

AvivaSA Emeklilik ve Hayat AS

 

Insurance— 0.7%

 

1,140,728

 

703,784

 

Cimsa Cimento Sanayi VE Ticaret AS

 

Construction Materials— 1.6%

 

2,619,097

 

359,391

 

Coca-Cola Icecek AS (b)

 

Beverages— 2.2%

 

3,437,845

 

114,491

 

Logo Yazilim Sanayi Ve Ticaret AS (a)

 

Software— 1.1%

 

1,760,064

 

 

 

 

 

 

 

9,004,145

 

 

 

 

 

 

 

142,943,491

 

PRIVATE EQUITY—0.9%

 

 

 

 

 

GLOBAL—0.6%*

 

 

 

 

 

7,248,829

(e)

Emerging Markets Ventures I, L.P. (a)(b)(f)(g)(h)(i)

 

Private Equity— 0.1%

 

123,375

 

2,400,000

(e)

Telesoft Partners II QP, L.P. (a)(b)(f)(g)(j)

 

Private Equity— 0.5%

 

880,320

 

 

 

 

 

 

 

1,003,695

 

ISRAEL—0.3%

 

 

 

 

 

1,674,587

(e)

BPA Israel Ventures, LLC (a)(b)(f)(g)(h)(i)

 

Private Equity— 0.1%

 

153,509

 

72,640

 

Exent Technologies Ltd. Preferred A1 Shares (a)(b)(f)(g)(j)(k)

 

Private Equity—      %

 

 

62,304

 

Exent Technologies Ltd. Preferred C Shares (a)(b)(f)(g)(j)(k)

 

Private Equity—      %

 

 

15,716

 

Exent Technologies Ltd. Warrants A1 (a)(b)(f)(g)(j)(k)

 

Private Equity—      %

 

 

46,856

 

Flash Networks Ltd. Ordinary Shares (a)(b)(f)(g)(j)(k)

 

Private Equity—      %

 

 

12

 

Flash Networks Ltd. Series C Preferred (a)(b)(f)(g)(j)(k)

 

Private Equity—      %

 

 

 

See Notes to Portfolio of Investments.

 



 

$

23,264

 

Flash Networks Ltd. Series C-1 Preferred (a)(b)(f)(g)(j)(k)

 

Private Equity—      %

 

$

 

13,526

 

Flash Networks Ltd. Series D Preferred (a)(b)(f)(g)(j)(k)

 

Private Equity—      %

 

 

9,952

 

Flash Networks Ltd. Series E Preferred (a)(b)(f)(g)(j)(k)

 

Private Equity—      %

 

 

22

 

Flash Networks Ltd. Warrants C (a)(b)(f)(g)(j)(k)

 

Private Equity—      %

 

 

52

 

Flash Networks Ltd. Warrants Ordinary (a)(b)(f)(g)(j)(k)

 

Private Equity—      %

 

 

2,750,000

(e)

Giza GE Venture Fund III, L.P. (a)(b)(f)(g)(i)

 

Private Equity—      %

 

44,193

 

761,184

(e)

Neurone Ventures II, L.P. (a)(b)(f)(g)(j)

 

Private Equity— 0.2%

 

229,969

 

16,287

 

Vidyo, Inc. Trust A (Preferred) (a)(b)(f)(g)(j)(l)

 

Private Equity—      %

 

 

7,766

 

Vidyo, Inc. Trust B (Preferred) (a)(b)(f)(g)(j)(l)

 

Private Equity—      %

 

 

6,610

 

Vidyo, Inc. Trust B1 (Preferred) (a)(b)(f)(g)(j)(l)

 

Private Equity—      %

 

 

3,432

 

Vidyo, Inc. Trust C (Preferred) (a)(b)(f)(g)(j)(l)

 

Private Equity—      %

 

 

2,075

 

Vidyo, Inc. Trust C1 (Preferred) (a)(b)(f)(g)(j)(l)

 

Private Equity—      %

 

 

41,436

 

Vidyo, Inc. Trust Common (a)(b)(f)(g)(j)(l)

 

Private Equity—      %

 

 

1,357

 

Vidyo, Inc. Trust D (Preferred) (a)(b)(f)(g)(j)(l)

 

Private Equity—      %

 

 

 

 

 

 

 

 

427,671

 

 

 

 

 

 

 

1,431,366

 

PREFERRED STOCKS—0.3%

 

 

 

 

 

MALAYSIA—0.3%

 

 

 

 

 

825,626

 

SP Setia Bhd Group, Preferred Shares (a)(m)

 

Real Estate Management & Development— 0.1%

 

184,284

 

986,800

 

SP Setia Bhd Group, Preferred Shares (a)(m)

 

Real Estate Management & Development— 0.2%

 

278,489

 

 

 

 

 

 

 

462,773

 

RIGHT—0.0%

 

 

 

 

 

INDIA—0.0%

 

 

 

 

 

3,586

 

Piramal Enterprises Ltd. (a)

 

Pharmaceuticals—      %

 

20,015

 

 

 

 

 

 

 

20,015

 

 

 

Total Long-Term Equity Securities in Emerging Market Countries—90.0% (cost $138,751,933)

 

144,857,645

 

LONG-TERM EQUITY SECURITIES IN DEVELOPED MARKET COUNTRIES—6.9%

 

 

 

COMMON STOCKS—6.9%

 

 

 

HONG KONG—3.0%

 

 

 

21,031,000

 

Pacific Basin Shipping Ltd. (a)(b)

 

Marine— 3.0%

 

4,871,915

 

NETHERLANDS—2.6%

 

 

 

 

 

59,000

 

ASM International NV (b)

 

Semiconductors & Semiconductor Equipment— 2.6%

 

4,245,941

 

UNITED STATES—1.3%

 

 

 

 

 

17,162

 

EPAM Systems, Inc. (a)

 

Information Technology Services— 1.3%

 

2,016,192

 

 

 

 

 

 

 

11,134,048

 

PRIVATE EQUITY—0.0%

 

 

 

 

 

UNITED STATES—0.0%

 

 

 

 

 

1,952,000

(e)

Technology Crossover Ventures IV, L.P. (a)(b)(f)(g)(h)(i)

 

Private Equity—      %

 

2,792

 

 

 

 

 

 

 

2,792

   

 

 

Total Long-Term Equity Securities in Developed Market Countries—6.9% (cost $7,152,723)

 

11,136,840

 

 

See Notes to Portfolio of Investments.

 



 

SHORT-TERM INVESTMENT—3.6%

 

 

 

 

 

UNITED STATES—3.6%

 

 

 

 

 

$

5,809,872

 

State Street Institutional U.S. Government Money Market Fund, Institutional Class, 1.28%(n)

 

 

 

$

5,809,872

 

 

 

 

 

 

 

5,809,872

 

 

 

Total Short-Term Investment—3.6% (cost $5,809,872)

 

5,809,872

 

 

 

Total Investments—100.5% (cost $151,714,528)

 

161,804,357

 

 

 

Liabilities in Excess of Other Assets—(0.5)%

 

 

 

(862,585

)

 

 

Net Assets—100.0%

 

 

 

$

160,941,772

 

 


(a)

Non-income producing security.

(b)

Fair Values are determined pursuant to procedures approved by the Fund’s 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)

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.

(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 January 31, 2018, the aggregate amount of open commitments for the Fund is $1,524,584.

(i)

In liquidation.

(j)

Active private equity 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. The rate shown is the current yield as of January 31, 2018.

*

“Global” is the percentage attributable to the Fund’s 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

PLC

Public Limited Company

 

See Notes to Portfolio of Investments.

 



 

Notes to Portfolio of Investments (unaudited)

 

January 31, 2018

 

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 Fund’s 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 Fund’s Board of Directors (the “Board”). These valuation factors are used when pricing the Fund’s 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 security’s 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 Fund’s 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 Fund’s 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 January 31, 2018. 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 Fund’s 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 Fund’s 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 limited to, the attributes of the interest held, including the rights and obligations, and any restrictions or illiquidity of such

 



 

Notes to Portfolio of Investments (unaudited) (continued)

 

January 31, 2018

 

interests, and the fair value of these private equity investments. No such adjustments were made to the net asset values provided by the underlying funds.

 

In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, 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, the highest level, 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 the lowest level, 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 entity’s 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 instrument’s level within the fair value hierarchy is based upon the lowest level of any input that is significant to the fair value measurement.

 

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 Fund’s own assumptions in determining the fair value of investments).

 

The following is a summary of the inputs used as of January 31, 2018 in valuing the Fund’s 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 breakdown of the security types:

 

Investments, at Value

 

Level 1-Quoted Prices
($)

 

Level 2-Other Significant
Observable Inputs ($)

 

Level 3-Significant
Unobservable
Inputs ($)

 

Total ($)

 

Investments in Securities

 

 

 

 

 

 

 

 

 

Common Stocks

 

100,602,195

 

53,475,344

 

 

154,077,539

 

Preferred Stocks

 

462,773

 

 

 

462,773

 

Right

 

20,015

 

 

 

20,015

 

Short-Term Investment

 

5,809,872

 

 

 

5,809,872

 

Total

 

106,894,855

 

53,475,344

 

 

160,370,199

 

Private Equity(a)

 

 

 

 

1,434,158

 

Total Investments

 

 

 

 

 

 

 

161,804,357

 

 


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.

 

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. During the period ended January 31, 2018, the securities issued by Bank Permata Tbk PT, Cimsa Cimento Sanayi VE Ticaret

 



 

Notes to Portfolio of Investments (unaudited) (continued)

 

January 31, 2018

 

AS, Clicks Group Ltd., Godrej Consumer Products Ltd., Holcim Indonesia Tbk PT, Oriental Holdings Bhd, Ramco Cements Ltd. (The) and Shenzhen Airport Co. Ltd., A Shares (Stock Connect) transferred from Level 2 to Level 1 at the values of $1,098,175, $2,619,097, $1,902,299, $4,915,295, $1,152,371, $478,610, $4,085,325 and $1,693,473, respectively, because the securities were valued without the application of a valuation factor at January 31, 2018. During the period ended January 31, 2018, the securities issued by Eurocash SA, Hanssem Co. Ltd., Iguatemi Empresa de Shopping Centers SA and Localiza Rent a Car SA transferred from Level 1 to Level 2 at the values of $774,624, $1,755,968, $3,435,038 and $2,116,816 because a valuation factor was applied at January 31, 2018.

 

For the period ended October 31, 2017, there were no significant changes to the fair valuation methodologies.

 

b. Private Equity Investments:

 

Certain of the Fund’s 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
Commitments

 

Cost

 

Fair Value
At 1/31/18

 

Percent
of
Net
Assets

 

Cumulative
Distributions
Received (2)

 

BPA Israel Ventures, LLC (3)

 

10/05/00 – 12/09/05

 

$

2,300,000

 

$

904,952

 

$

153,509

 

0.09

 

$

352,823

 

Emerging Markets Ventures I, L.P. (3)

 

01/22/98 – 01/10/06

 

8,100,000

 

2,474,673

 

123,375

 

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

 

1,662,963

 

44,193

 

0.03

 

928,289

 

Neurone Ventures II, L.P.

 

11/24/00 – 12/21/10

 

750,000

 

121,786

 

229,969

 

0.14

 

533,564

 

Technology Crossover Ventures IV, L.P. (3)

 

03/08/00 - 09/27/10

 

2,000,000

 

359,690

 

2,792

 

 

3,045,426

 

Telesoft Partners II QP, L.P.

 

07/14/00 - 03/01/10

 

2,400,000

 

1,112,731

 

880,320

 

0.55

 

1,282,411

 

Vidyo, Inc. Trust A (Preferred) (5)

 

11/22/13

 

 

14,898

 

 

 

 

Vidyo, Inc. Trust B (Preferred) (5)

 

11/22/13

 

 

7,103

 

 

 

 

Vidyo, Inc. Trust B1 (Preferred) (5)

 

11/22/13

 

 

6,046

 

 

 

 

Vidyo, Inc. Trust C (Preferred) (5)

 

11/22/13

 

 

3,140

 

 

 

 

Vidyo, Inc. Trust C1 (Preferred) (5)

 

11/22/13

 

 

1,898

 

 

 

 

Vidyo, Inc. Trust Common (5)

 

11/22/13

 

 

35,974

 

 

 

 

Vidyo, Inc. Trust D (Preferred) (5)

 

11/22/13

 

 

1,241

 

 

 

 

Total

 

 

 

$

18,300,000

 

$

6,935,120

 

$

1,434,158

 

0.89

 

$

13,710,247

 

 



 

Notes to Portfolio of Investments (unaudited) (concluded)

 

January 31, 2018

 


Amounts listed as “—” are $0 or round to $0.

 

(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 Fund’s 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 Fund’s 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 company’s 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.

 



 

Item 2.         Controls and Procedures

 

(a)         The Registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the Registrant’s 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 registrant’s 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 registrant’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s 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: March 29, 2018

 

 

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: March 29, 2018

 

 

By:

/s/ Andrea Melia

 

 

Andrea Melia,

 

 

Principal Financial Officer of

 

 

Aberdeen Emerging Markets Smaller Company Opportunities Fund, Inc.

 

 

 

 

 

Date: March 29, 2018