Annual Financial Report

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 returnA			Earnings per Ordinary share (revenue)
+0.3%			4.84p
2021	+20.9%		2021	2.66p
Net asset value total returnA			Dividends per Ordinary share
+6.8%			3.50p
2021	+17.4%		2021	3.50p
Benchmark total return			Discount to net asset value per Ordinary shareAB
+11.5%			17.3%
2021	+17.5%		2021B	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 six months ending 28 February 2023	April 2023
Financial year end	31 August 2023
Expected announcement of results for year ending 31 August 2023	November 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 shareAB	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 coverAB	1.38 times	0.76 times
Revenue reservesB (£'000)	2,248	1,482
Operating costs
Ongoing charges ratioAC	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 [e-mail].

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 [e-mail].
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 Return	The Board considers the Company's NAV total return figures versus the 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 both macro and portfolio specific factors. The financial and economic risks associated with the Company include foreign exchange risk, market risk, liquidity risk and credit risk. Other macro risks include geo-political developments, pandemic and climate change, for example.  Inappropriate investment decisions may result in the Company's underperformance against the benchmark index and peer group as well as a widening of the Company's discount.	The Board sets, and monitors, its investment restrictions and guidelines, and receives regular reports which include performance reporting on the implementation of the investment policy, the investment process and application of the guidelines. The Board relies on the Investment Manager's skills and judgment to manage risk and make investment decisions based on research and analysis of stocks and sectors. The Board regularly monitors the investment performance of the portfolio and reviews holdings, purchases and 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, including lack of demand for Ordinary Shares, can affect the movement of the Company's share price and in some cases have the potential to increase the discount in the market value of the Company compared with the NAV.	The price of the Company's shares and its discount to NAV are not wholly within the Board's control, as both are subject to market volatility. The Board keeps the level of discount at which the Company's Ordinary shares trade 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 proposition for the Company and the failure to adapt to changes in investor demand may lead to the Company becoming unattractive to investors.	The Board considers the Company's strategy regularly and its attractiveness to shareholders. The Board regularly reviews the income generated by the 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 third parties for the provision of all systems and services (in particular, those of the Manager). Those third parties are responsible for operating in compliance with relevant laws and regulations. There is a risk that any control failures, cyber crime or deficiencies in these systems and services could result in a loss or damage to the Company.	The Board receives reports from the Manager on internal controls and risk management at each Board meeting and receives assurances from its significant service providers with regard to their compliance monitoring and control and risk management systems. The Board considers the increasing complexity of the risk environment (including the potential of increasingly sophisticated cyber 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 increasing the level of gearing, could result in the Company becoming over-geared and therefore unable to take advantage of potential opportunities. Being geared in negative markets may lead to a loss of value. There is also a risk of a borrowing facility not being renewed.	The Board sets a gearing limit to ensure that covenant restrictions in the Company's loan facility are not breached and the Board receives regular updates on the actual gearing levels the Company has reached from the Investment Manager together with the assets and liabilities of the Company and 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 launchA
	% return	% return	% return	% return
Ordinary share priceB	+0.28%	-8.40%	-10.46%	+0.20%
Net asset valueB	+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 and production, refining, energy generation, trading and distribution of oil products.		A leading privately-owned Brazilian bank with a well-recognised brand, robust loan portfolio and experienced management team.
Wal-Mart De Mexico		Vale
The largest food and general retailer in Mexico with an established presence across a number of smaller Central American markets.		Vale is a leading producer of iron ore and pellets. Vale also produces nickel, 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, sizeable pension business and proven track record in conservative lending.		Leading mobile and fibre provider in Brazil with growing exposure into digital services.
Arezzo Industria e Comercio		Raia Drogasil
Arezzo is Brazil's largest women's footwear retailer and has been expanding into apparel more recently.		Raia Drogasil is the largest operator of pharmaceutical stores in Brazil, 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 sold in Mexico but also in the US and some countries in South America including Peru and Argentina.		Leading enterprise resource planning software business in Brazil with strong growth prospects given its focus on the underpenetrated SME segment .

Investment Portfolio - Equities

As at 31 August 2022
			Valuation	Total	Valuation
			2022	assets	2021
Company	Sector	Country	£'000	%A	£'000
PetrobrasB	Energy	Brazil	2,050	4.9	1,027
Banco BradescoC	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 BrasilB	Telecommunications	Brazil	1,135	2.7	-
Arezzo Industria e Comercio B	Consumer Discretionary	Brazil	1,078	2.6	405
Raia DrogasilB	Consumer Staples	Brazil	1,018	2.5	815
Arca Continental	Consumer Staples	Mexico	930	2.2	503
TOTVSB	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 InvestimentosB	Health Care	Brazil	656	1.6	-
Sendas DistributionB	Consumer Discretionary	Brazil	633	1.5	-
RumoB	Industrials	Brazil	558	1.4	991
Top twenty equity investments			20,441	49.2
Klabin B	Materials	Brazil	498	1.2	-
B3 Brasil Bolsa BalcoB	Financials	Brazil	414	1.0	1,390
Geopark	Energy	Colombia	391	1.0	544
Falabella B	Consumer Discretionary	Chile	385	0.9	673
BradesparB	Materials	Brazil	371	0.9	1,419
Regional SAB de CV	Financials	Mexico	362	0.9	278
RaizenB	Energy	Brazil	356	0.9	524
Localiza Rent A Car B	Industrials	Brazil	347	0.8	270
Credicorp	Financials	Peru	342	0.7	-
3R PetroleumB	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% 01/01/25B	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% 01/01/23B	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% 01/01/31B	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% 01/01/29B	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% 01/01/27B	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 assetsC			236	0.6
Total assetsA			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 [e-mail].

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 loss	10	-	(178)	(178)	-	(290)	(290)
Unrealised (losses)/gains on financial assets held at fair value through profit or loss	10	-	(497)	(497)	-	4,334	4,334
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)	I nvestments 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	2,4 63	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 lossA	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	movementsA	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	movementsA	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 reinvestmentA	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 reinvestmentA	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.

 

END

 

 

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