TIDMHYF
RNS Number : 4182M
Himalayan Fund N.V.
07 May 2015
Extract of the
Annual Report 2014
The complete version may be found on
http://www.himalayanfund.nl/annual-reports/
Chairman's Letter 2014
Dear Shareholders,
This year, you will see major changes in my letter to
shareholders and the Directors' Report on your Fund. During 2014
(and on into the current year) the Directors have had to spend a
great deal of time preparingthe Fund to comply with the
requirements of AIFMD (the Alternative Investment Funds Directive
of the European Union). By all measures except one, your Fund
should not be subje ct to theDirective and certainly we should be
exempt due to our investment strategy and size. Unfortunately, in a
final turn of th e screw, we were covered by the fact thatthe
Fund's shares trade on public stock exchanges, so the effort and
cost of compliance were in evitable. Fortunately, the costs we had
to incur coincided with a period of excellent performance by the
Fund.
Adapting to the requirements of AIFMD, therefore, from now on,
my letter to shareholders in the Annual Report will address ma
tters of explanation, commentary and opinion. The Directors' report
will comprise quantitative and qualitative reporting on the Fund,
Portfolio Management, Risk Management and Administration (including
regulatory compliance).
These costs have added to the OCR in 2014; however even
including a relatively high OCR the Fund has produced excellent
retur ns for shareholders.
In 2014 Indian Markets distinguished themselves from those in
the other BRIC countries and emerging markets generally . Our
benchmark, the CNX DEFTY Index (CNX Nifty 50 Index in US Dollar
terms) added 28.4%, including a 2.2% depreciation of the Rupee
against the US Dollar. The Net Asset Value per share of your Fund
rose by $15.37 from $35.64 to $51.01 in 2014, an increase o f
43.1%. It iswith the greatestof pleasure therefore, that I can
report outperformance of the Fund by 14.7 percentage points
relative to our benchmark.
The global economic context in 2014 was characterised by a
benign inflationary environment thanks to generally soft commodity
prices and, especially, a steadily declining price for crude oil.
This allowed for continuedlow interest -rate policies in major
developed markets as well as sustained exceptionalmonetary action
in the form of quantitative easing. In theUS, the Fed slowed down a
nd eventually halted its bond-buying but by that time, Japan had
joined the party with a hefty QE programme and even the European
Central Bank announcedits intention.
In India, we had what footballers call "a game of two halves".
The first half was setting the framework for the long -awaited
general election in May as foreign investors piled into the market
in anticipation of any kind of change which might replace a
moribund government. In the event, the voters in the world's
largest democracy dumped the incumbent government and delivered the
first overall majority in the Lower House, the Lokh Saba for
twenty-five years. Narendra Modi was given a clear mandate for his
BJP Party to govern with a firm hand to generate improved economic
performance driven by necessary reforms. Sustained foreign
portfolio inflows supportedthe markets throughout this period and
the DEFTY added nearly 25% in the first half-year, in spite of
faltering economic growth.
The new government's first statement of intent was its Union
Budget statement in July, which was slightly disappointing, cont
aining more economic and reform platitudes than decisive policy and
reform action. Meanwhile, the governor of the Reserve Bank of In
dia wascompleting his first year in office having managed inflation
with a firm hand, while boosting India's external position a nd
overseeing the balance sheets of the nation's banks in the face of
difficult credit problems. Helped by high base effects rel ative to
previous periods, the inflationnumbers started to drop sharply
towards year end, so that the governor felt able to deliver the
first step in monetary easing by the end of the year. This allowed
the markets to rally into year-end and provided the scope for our
strategy of decisive sectoral positioningand concentrated holdings
in our favoured stocks to deliver a return for the year which was
jus t fifty per centhigher than the benchmark.
During the year, we held sustained overweight positions in the
Healthcare and Consumer Goods Sectors. We also held a heavy weight
in the Financial Sector but restricted our holdings to private
sector institutions, so we appearedto be underweight o verall. In
terms of sectoral contribution to returns, however, these three
were the big ones. We had no exposure to Telecoms or Metals a nd
Mining and year end we had exited construction and sharply reduced
our Energy Sector weight.
In terms of stocks, the biggest contributor was Torrent
Pharmaceuticals which added 132.9%; its sector fellow and Nifty
compo nent Lupin Ltd. added 55.6%. In Financials, Kotak Mahindra
Bank added 70.2%, ICICI Bank 61.3% and HDFC Bank 39.3%; our long
-term non-bank financial, Magma Fincorp, added 49.2%. Consumer
stock Pidilite Industries was another star performer, adding 85.5%
and auto ancillary manufacturer Balkrishna Industries added 67.4%.
Only four stocks out of the twenty seven we held at some time
during the year had negative returns.
Our investment strategy remains unchanged: to generate long-term
value-added by selecting stocks with high governance standards
above all as well as earnings prospects which will generate
excellent returns over a two to three year period. We are wiling to
be absent from an index sector if we cannot see the possibility of
contributing to our overall objective. Equally, we are happy to
hold concentratedpositions at both sector and stock levels and we
believe this approach has contributed heavily to recent
outperformance.
The outlook for strong returns from investment in Indian
equities remains optimistic in our opinion. The government, though
widely perceived as disappointing in terms for its reform
commitments, has been fairly astute in how it manages the politics.
Despit e its powerful position in the Lower House, it remains weak
in the Upper House for the moment, so it cannot assume legislative
succ ess on controversial Bills. Thus it has been managing its
legislative programme carefullyto avoid defeat,until continued
success a t state
level allows it to accumulate seats in the Upper House over
time. The RBI is now firmly embarked on monetaryeasing which sho
uld support equities for some time to come, while still maintaining
a hawkish stance on inflation. It has built the external rese rves
to record levels to protect India from external shocks, such as
sharp changes in monetarypolicy in the US, for instance. In
passing, i t has also
agreed a new long-term operating framework with the government,
based on inflation-targeting.
I close again with thanks to our long-standing shareholders in
our Silver Jubilee year. We alsothank our friends and associates at
Indasia Fund Advisors in Mumbai, once again, for their excellent
contribution to the performance of the Fund. We continue to seek
ways of generating new inflows for the Fund and are hopeful of some
success this year as sentiment on emerging markets in general and
India in particular, improves.
Ian McEvatt
4 May 2015
Directors' Report 2014
The Fund
In the Financial Year 2014, which ran from January 1st to
December 31st, the Net Asset Value (NAV) per share of the Fund rose
from
$35.64 to $51.01,a difference of 43.1%.The first Execution Day
on NYSE Euronext Amsterdam in 2014 was January 3rd, when the
Transaction Price for the Fund's Ordinary Shares was $35.66; the
last Execution Day was December 29th, when the transaction P rice
was$49.44. The difference of $13.78 represented a rise of 38.6%.
Between the same two dates, the CNX Nifty Index in US Dollar terms
rose by 30.2%. Thus the Transaction Price outperformed the Fund's
performance benchmark by 8.4% in the holding period i n
question.
At the start of 2014, there were 304,103 Ordinary Shares of the
Fund in the hands of shareholders. By the end of theyear, th e
number had fallen to 235,416, a drop of 22.6%. The majority of the
redemptions occurred in the first quarter at a time when foreign
investors generally were investing heavily in India in anticipation
of a change of government in the general election in May. Most of t
he market's advance came in the first half-year, though the Fund's
performance accelerated further ahead of the benchmark in the
second half.
The Portfolio
The Fund started the year with twenty-two holdings in the
portfolio; the top ten holdings represented 68.1% of the portfolio
and 62.8% of the total value was invested in stocks which were
components of the Nifty Index. The largest sectoral concentrations
were Financials, with 24.4% of the portfolio, Consumer Goods, with
23%, Healthcare with 12.7% and IT with 12.4%. The Fund had no
exposure to Metals and Mining, Industrials or Telecom stocks.
Portfolio turnover during the year was 21%: we held a total of
27 stocks for some period during the year and ended with 21 ho
ldings. At year-end, our sectoral distributionwas dominated by the
same sectors, though the weightings reflected the degree of
relative outperformance. Financials made up 25.1%, Consumer Goods
22.5%, Healthcare 18.6% and IT 13.8%. Meanwhile, exposure to the
Auto Sector (mostly ancillary manufacturers) had grown into double
figures,at 11%. The Fund had exited the Construction Sect or during
the year and cut the Energy Sector from 9.3% to just 2%; the Fund
initiateda new position in Industrials, at 2%.
By year-end, exposure to the Fund's top ten holdings had
increased to 74.1%, though exposure to Nifty component stocks
had
dropped sharply, to 51.4% of the portfolio. Three of thefive
largest holdings were non-Nifty stocks, which underlinesthe
contribution of stock-picking to performance.
Risk Management
The key risk management guidelines concern concentration in the
portfolio and dispersion of risk. The Fund observe a 10% limi t on
the value of any stock purchase; if the value of a holding exceeds
this limit due to appreciation, the holding is reviewed regula rly
by the Investment Committee and trimmed where appropriate. The
aggregate value of the top four holdings is also monitored against
a guideline, of 40%. During the year, both limits have been
exceeded from time to time due to appreciation; this was also the
case at the balance sheet date. The positions concerned were
monitored regularly by the Investment Committee and action was
taken when it
was considered necessary.
This year, for the first time, this report includes a
quantitative analysis of portfolio risk. The analysis will provide
a si mple interpretation
of the data and results. The data cover sixty valuation periods
which ended on an NAV calculationdate during 2014.
The mean return for the portfolio over the sixty periods was
0.6% per period, the comparablefigure for the benchmark was 0.4 %,
reflecting mean outperformance of twenty basis points per period.
The standarddeviation of returns was 2.3 for the portfolio and 2.5
for the benchmark, showing less dispersion of returns around the
mean for the portfoliothan for the benchmark.
The highest loss in any period was 3.7% for the portfolio and
4.6% for the benchmark and during the year, the portfolio had 4 3
out of sixty periods of positive return by comparison with 35 for
the benchmark.
Relative to the benchmark, the portfolio had a Tracking Error of
1.2 and an Information Ratio of 4.7 for the year. These two ratios
demonstrate that the risk and portfolio management decisions taken
during the year provided consistent added value in portfol io
returns relative to the benchmark.
Beyond the portfolio, the Investment Committee also monitors the
performance of market counterparties, notable stock brokers and
custodians. The performance of brokers is reviewed on a regular
basis, taking account of execution, price, researchand sales
support. Transactions are allocated equally between brokers, though
volumes can vary depending on specialist skills demonstrated, such
as execution in particular market segments or sectors. There have
been no execution problems during the year, though one broker from
our panel has exited the business, another curtailed its client
list sharply and a third dropped contact due to staff turnove r.
The broker listis reviewed periodically and counterparties may be
added or deleted from time to time. Payment of commission rebates
is not a normal practice in Indian markets and the Fund does not
maintain soft-dollar arrangements, nor has it any intention of
doing so.
The Fund continues to receive excellent service from our local
market custodian and had no operational problems or failures i n
reporting during the year.
Administration
The legal structure of the Fund did not change in 2014. The
Board is still in direct control of theinvestment management thr
ough the Investment Committee, which is convened by the Chairman,
who also acts as record-keeper. Caceis Bank Luxembourg Amsterdam
Branch (formerly Caceis Netherlands NV) continues as the
Administrator of the Fund and calculates the Net Asset Value on a
we ekly basis. CitibankMumbai is the Custodian of the Fund. During
the year under review and so faras your Board is aware, the Fund
has effectively operated in conformity with the Administrative
Organization and Internal Control procedures.
In 2014, your Board held four formal Board Meetings and
conducted one Annual General Meeting. Apart from the four routine
Board
Meetings, the Fund's license to operateas a Foreign
Institutional Investor in India was renewed.
In preparation for each quarterly Board meeting, the Fund's
Reporting Entity (Inviqta) prepared a checklist of compliance with
corporate governance policy for the Oversight Entity (Mr. Dwight
Makins) and the Board, which was discussed during each Board
meeting.There have been no breaches of the corporate governance
policy during the year 2014.
The Fund is a long only equity fund and as such does not use
leverage or derivatives in its portfolio. Thus the portfolio is
exposed fully
to the market price movements in its holdings of Indian stocks.
There were no significant holdings of debt instruments in the
portfolio, so there is no exposure to credit risk. The Fund does
not engage in securities' lending and has confirmed with its
custodian that its stocks have not been used for securities'
lending. As a matter of policy, the Fund does not hedge currency
exposure in the portfolio . In 2014, theRupee depreciated by
2.2%against the US dollar and this affected the portfoliovaluation.
The Rupee exchange rate stayed within a fairly narrow band during
the year as the RBI worked to boostIndia's external; reserve
position and commodity prices helped to restrain thecurrent account
deficit. There were no instances during the year when market
liquidity suffered disruptive events which m ight have prevented
orderly execution of orders.
The Investment Committee continuedto receive research support
from Indasia Fund Advisers Pte. of Mumbai and from the Chairma
n
of the Fund. The Board is satisfied that it has the substance
and procedures to carry out these responsibilities in a suitable
manner and that the Fund's portfolio reflects the long-term
investment objective. In terms of riskanalysis, the Board monitors
the Synthetic Risk and Reward Indicator (SRRI) prescribed in
Article 8 and Annex I of the KII implementingRegulation on a
monthlybasis. Accordingto the SRRI calculationover a five-year
timespan, your Fund is in category 6 for risk evaluation purposes
and this is reflected in the KID statement on the Fund's website.
This high risk rating is typical for an emerging markets fund and
reflects the risk of high er levels of return fluctuationthan in
developed economies. There are additional risks involved in
emerging markets investing which may n ot be reflected in the SRRI
calculation,including exchange rate risk, market risk arising from
global liquidity flows, operational risk from weaknesses in local
systems and process failure and focused strategy risk where
concentrated investment strategy may lose the benefits of
diversification.
The Board also reviews the conduct of the administration of the
Fund by the Administrator at regular management meetings. The
Directors believe that the Administrator is capable of exercising
the appropriate level of control over the operations of the Fund
and has done so during the year under review.
Emerging markets investment was not a popular choice in 2014 and
attempts at raising new money for the Fund were not successful.
Nonetheless, we were asked in several occasions during the year to
clarify the Fund's stance on paying marketing rebates or t rail
fees. The Fund's Ordinary Shares are not and never have been
"rebate shares" and the Fund has no agreements in place to pay
rebates to intermediaries.
The Directors continue to manage expenditure tightly though
further significant cost reduction is difficult. The TER increase d
in 2014, largely due to the reduction in the value of total assets,
the denominatorin the calculationbut also due to exceptional cos ts
arising from adapting to the requirements of AIFMD We continue to
work to generatenew inflows to the Fund and believe that renewed
prospe cts for attractive returns from investing in India will help
with the effort. Any success in doing so will lead to a steady
reduc tion in theTER.
The Outlook
The Directors would like to thank our shareholders for their
continuing support of the Fund. The Indian market has started 20 15
in optimistic form, anticipation of sustained monetary easing by
theRBI. US monetary policy remains a concern for its potentialto
cause dramatic shifts in global liquidity. The RBI has taken
deliberate action to strengthen India's current account balance and
bo ost external reserves to protect the economy against US rate
increases which the market perceives as inevitable.Fund policy is
to invest in companies from a broad market universe selected for
high governance standards and a strong probability of generating
growth i n earnings from participating in the growth of the Indian
economy. The Directors believe that Fund's portfolio is
wellposition ed to benefit from sustained momentum in Indian
markets and that the government's economic policies and reform
commitment will accelerate growth, slowly but surely.
Amsterdam, 4 May 2015
Board of Directors
Ian McEvatt, Chairman
Dwight Makins
Robert Meijer
Karin van der Ploeg
Financial statements Himalayan Fund N.V. Annual Report 2014
Balance sheet
(before profit appropriation)
31-12-2014 31-12-2013
USD USD
Notes
Investments
Securities 11.907.241 4.1 10.741.908
Other assets
Cash at banks 200.116 5 331.368
Receivables
Receivable on security transactions - 6.1 -
Due to subscriptions 4.944 6.2 -
Other receivables - 6.3 -
4.944 -
Current liabilities (due within
one year) - 7.1 -
Payable on security transactions
Due to redemptions 13.349 7.2 158.614
Other liabilities, accruals and
deferred income 75.295 7.3 62.078
Total current liabilities 88.644 220.692
Total of receivables and other assets
less current liabilities 116.416 110.676
Total assets less current liabilities 12.023.657 10.852.584
---------------------- ----------------------
Shareholders' equity
Issued capital 18.488 8.1 18.419
Share premium 19.947.953 8.2 22.748.568
General reserve -11.914.402 8.3 -10.865.740
Undistributed result current year 3.971.618 8.4 -1.048.663
Total shareholders'equity 12.023.657 10.852.584
---------------------- ----------------------
Net Asset Value per share 51,01 35,64
Profit &Loss account
01-01-2014 01-01-2013
31-12-2014 31-12-2013
USD USD
Notes
Income from investments
Dividends 146.244 9.1 162.790
Interest income 4 9.2 -
Other income 71.492 9.3 7.098
217.740 169.888
Capital gains/losses
Unrealised gains on investments 3.485.272 4 960.395
Unrealised losses on investments -787.449 4 -1.699.927
Realised price gains on investments 2.223.946 4 1.100.006
Realised price losses on investments -103.730 4 -387.022
Realised currency gains on investments 9.647 4 12.597
Realised currency losses on investments -521.817 4 -720.336
Other exchange differences -18.101 -31.052
4.287.768 -765.339
Expenses
Investment research fees 176.087 10.1 164.877
Other expenses 357.803 10.2 288.335
533.890 453.212
Total investment result 3.971.618 -1.048.663
---------------------- ----------------------
Total investment result per ordinary
share 16,87 -3,45
Statement of Cash Flows
01-01-2014 01-01-2013
31-12-2014 31-12-2013
USD USD
notes
Cash flow from investing activities
Income from investments 217.740 9 169.888
Expenses -533.890 10 -453.212
Result of operations -316.150 -283.324
Purchases of investments -1.127.892 4 -1.402.672
Sales of investments 4.268.428 4 3.967.386
3.140.536 2.564.714
Change in short term receivables -4.944 6 10.038
Change in current liabilities -132.047 7 159.989
-136.991 170.027
Cash flow from investing activities 2.687.395 2.451.417
Cash flow from financing activities
Received on shares issued 86.268 8 139.355
Paid on shares purchased -2.886.814 8 -2.374.634
Cash flow from financing activities -2.800.546 -2.235.279
Other exchange differences -18.101 -31.052
Change in cash and cash equivalents -131.252 185.086
Cash and cash equivalents as at
1 January 331.368 146.282
---------------------- ----------------------
Cash and cash equivalents as at
31 December 200.116 331.368
---------------------- ----------------------
Notes
1 General
Himalayan Fund N.V. ('the Fund') is an open-end investment
company (in Dutch: beleggingsmaatschappij met veranderlijk
kapitaal) incorporated under Dutch law and has its statutory seat
in Amsterdam. The Fund is listed both on NYSE Euronext Amsterdam
and on The London Stock Exchange.
This annual report is preparedin accordance with Part 9 of Book
2 of the Dutch Civil Code and the Act on the Financial Supervision
(AFS) ("Wet op het financieel toezicht"). Since December 1991 the
Fund is licensed to undertake investment activities according to
the Act on the Financial Supervision.
2. Principles of valuation
2.1 Investments
The investments are valued based on the following
principles:
- listed securities are valued at the most recent stockmarket
price as at the end of the accounting period which can be
considered fair value;
- non or low marketable securities are, according to the
judgementof the Investment Advisor, valued at the best effort
estimated price, taking into account the standards which the
Investment Advisor thinks fit for the valuation of such
investments.
Expenses related to the purchase of investments are included in
the cost of investments.
Sales charges, if any, are deducted from gross proceeds and will
be expressed in the capital gains/losses.
2.2 Foreign currency translation
Assets and liabilitiesin foreign currencies are translated into
US dollars at the rate of exchange as at the balance sheet date.
All exchange differences are taken to the profit and loss account.
Income and expenses in foreign currenciesare translated at the
exchange rate as per transaction date.
Rates of exchange as at 31 December 2014, equivalent of 1 US
dollar:
Euro 0,82641 Srilanka Rupee 131,20003
Indian Rupee 63,12247 Bangladesh Taka 77,92500
2.3 Other assets and liabilities
Other assets and liabilitiesare stated at nominal value. If
required, provisions have been taken for irrecoverable
receivables.
2.4 Income recognitionprinciples
The result is determined by deducting expenses from the proceeds
of dividend, interest and other income in the period under review.
The realized revaluations of investments are determined by
deducting the purchase price from the sale proceeds.
The unrealized revaluations of investments are determined by
deducting the purchase price or the balance sheet value at the
start of the period under review from the balance sheet value at
the end of the period under review.
Brokerage fees payable on the acquisition of investments, if
any, are considered to be part of the investments costs, and as a
result, are not taken to the profit and loss account.
2.5 Cash flow statement
The Cash Flow statement has been preparedaccording to the
indirect method.
3. Risk Management
Investing in emergingand developing markets carries risks that
are greater than those associated with investment in securities in
developed markets. In particular, prospective investors should
consider the following:
3.1 Currency Fluctuations
The Fund invests primarily in securities denominated in local
currencieswhereas the Ordinary Shares are quoted in US dollars. The
US dollar price at which the Ordinary Shares are valued is
therefore subject to fluctuations in the US dollar/ local currency
exchange rate.
3.2 Counterparty Risk
The Fund deals principally in listed stocks traded on the BSE
and the NSE in India.
All transactions are book-entry and settlement is fully
automated. In the event of non-delivery by either side, the
transaction fails. In this case recovery can be achieved by
delivery against payment or the transaction abandoned.
3.3 Concentration Risk
The investment restrictions for the Fund in section IX
INVESTMENT POLICIES of the Prospectus, limit the possibility for
concentration of risk by stock and sector. Investors should note
that the portfolio will be concentrated in the Indian
sub-continent.
3.4 Market Volatility
Securities exchanges in emerging markets are smaller and subject
to greater volatility than those in developed markets.
The Indian market has in the past experienced significant
volatility and there is no assurance that such volatility will not
occur in the future.
3.5 Market Liquidity
A substantial proportion of market capitalization and trading
value in emerging markets can be represented by a relatively small
number of issuers. Also, there is a lower level of regulation and
monitoring of the activities of investors, brokers and other market
participants than in most developed markets. Disclosure
requirements may be less stringent and there may
be less public information available about corporate activity.
As a result, liquidity may be impaired at times of high volatility.
The Indian markets have withstood high volatility in the recent
past and recovered momentum because of excellent corporate results.
This has shown that the liquidity in the shares of the top
companies is strong, as further emphasized by demand for those
shares through Depository Receipts in overseas markets.
Furthermore, standards of governance and transparency are improving
dramatically under the impetus of the regulatory bodies. Other
contiguous markets are not necessarily the same and the Fund only
invests in them with the utmost care.
3.6 Fund Liquidity
The Fund's rules allow weekly purchases and sales of Ordinary
Shares but in order to allow orderly management of the portfolio in
the interest of continuing shareholders, the value of purchases may
be limited to 5% of the net asset value of the Fund on any one
Execution Day.
3.7 PoliticalEconomy
The Fund's portfolio may be adversely affected by changes in
exchange rates and controls, interest rates, government
policies, inflation, taxation, social and religious
instabilityand regional geo-political developments.
3.8 Legal and Regulatory Compliance
The Fund is responsible for ensuring that no action taken by it
or by any contracted service provider might cause a breach of any
legal or regulatory requirement. The Fund and all of its service
providers maintain adequate control procedures to guard against any
such occurrenceand these procedures are subject to regular review.
Should such a breach occur inadvertently, control procedures should
detect it and institute corrective action without delay.
3.9 Financial Crisis
Almost uniquely amongst financial markets, the Indian financial
sector was insulated against any consequences of the recent
financial crisis by the tight control exercised by theRBI. Bank
balance sheets were free of toxic assets and capital ratios
were maintained. Ratios of non-performing assets remained within
historic norms.
3.10 Credit risk
The principal credit risk is counterparty default (i.e., failure
by thecounterparty to perform as specified in the contract) due to
financial impairment or for other reasons. Credit risk is generally
higher when a nonexchange-traded or foreign
exchange-traded financial instrument is involved. Credit risk is
reduced by dealing with reputable counterparties. The Fund manages
credit risk by monitoring its aggregate exposure to
counterparties.
Notes to the Balance sheet 31-12-2014 31-12-2013
4. Investments USD USD
4.1 Statement of changes in securities
Position as at 1 January 10.741.908 14.040.909
Purchases 1.127.892 1.402.672
Sales -4.268.428 -3.967.386
Unrealised gains on investments 3.485.272 960.395
Unrealised losses on investments -787.449 -1.699.927
Realised price gains on investments 2.223.946 1.100.006
Realised price losses on investments -103.730 -387.022
Realised currency gains on investments 9.647 12.597
Realised currency losses on investments -521.817 -720.336
Position as at 31 December 11.907.241 10.741.908
------------------ ---------------------
Historical cost 6.369.968 7.902.458
The portfolio comprises of shares, mainly
listed.
The total unlisted shares held directly
by the Fund amounted to USD 114,616 (2013:
USD 133,674).
The portfolio breakdown as at 31 December
2014 is specified on page 22 of this report.
4.2 Transaction costs
The transaction costs for the purchase of investments are
capitalized within the historical cost price and for sales the
transaction costs are discounted from the sales price. Transaction
costs in 2014 are USD 18,811 (2013: USD 17,926).
5. Cash at banks
This includes immediately due demand depositsat banks.
6. Receivables
6.1 Receivable on security transactions
These include transactions still unsettled as at the balance
sheet date.
6.2 Other receivables
These include other transactions still unsettled as at the
balance sheet date.
7. Current liabilities (due within one year)
7.1 Payable on security transactions
These include transactions still unsettled as at the balance
sheet date.
7.2 Due to redemptions
These include the debts in respect of the redemptions of shares
Himalayan still unsettled as at the balance sheet date.
7.3 Other liabilities, accruals and deferred
income
Payable investment research fee 21.985 16.810
Payable administration fee 5.042 5.741
Payable auditors fee 22.409 20.669
Other expenses payable 25.859 18.858
75.295 62.078
------------------- ----------------------
8. Shareholders' equity
The authorised share capital of the Fund is EUR 60,000 (2013:
EUR 60,000) and consistsof:
- Ordinary shares of EUR 0.01 each
5.000.100
- Priority shares of EUR 0.20 each
49.995 31-12-2014 31-12-2013
8.1 Issued capital number USD USD
Ordinary shares:
Position as at 1 January 304.103 4.189 4.829
Sold 1.785 18 38
Purchased -70.472 -705 -661
Revaluation 756 -17
--------------------
Position as at 31 December 235.416 4.258 4.189
-------------------- -------------------- -----------------------
Priority shares:
Position as at 1 January 49.995 14.230 14.230
Sold - - -
Revaluation - -
--------------------
Position as at 31 December 49.995 14.230 14.230
-------------------- -------------------- -----------------------
Total issued capital 18.488 18.419
-------------------- -----------------------
As at 31 December 2014 the issued
and subscribed share capital amounts
to: (Ordinary shares, par value EUR EUR
EUR 0.01 (2013: EUR 0.01) 4.450.005 44.500 44.500
(Priority shares, par value EUR
0.20 (2013: EUR 0.20) 49.995 9.999 9.999
54.499 54.499
-------------------- -----------------------
The Fund became open-ended on 7 April 2000. As at 31 December
2014 a total of 4,214,589 Ordinary Shares have been purchased,
meaning that 235,416 Ordinary Shares are still outstandingas at 31
December 2014. Ordinary Shares purchased by theFund are directly
charged against capital and share premium.
8.2 Share premium USD USD
Position as at 1 January 22.748.568 24.983.207
Received on shares sold 86.250 139.317
Paid on shares purchased -2.886.109 -2.373.973
Revaluation of outstanding capital -756 17
Position as at 31 December 19.947.953 22.748.568
------------------ --------------------
31-12-2014 31-12-2013
USD USD
8.3 General reserve
Position as at 1 January -10.865.740 -12.813.588
Transferred to undistributed result -1.048.662 1.947.848
Position as at 31 December -11.914.402 -10.865.740
------------------- ----------------------
8.4 Undistributed result
Position as at 1 January -1.048.662 1.947.848
Transferred from general reserve 1.048.662 -1.947.848
Total investment result 3.971.618 -1.048.663
Position as at 31 December 3.971.618 -1.048.663
------------------- ----------------------
Three years Himalayan Fund N.V.
31-12-2014 31-12-2013 31-12-2012
Net Asset Value (USD x 1,000)
Net Asset Value according to balance
sheet 12.024 10.853 14.137
Less: value priority shares 14 14 14
12.010 10.839 14.123
--------------------- ------------------- ----------------------
Number of Ordinary Shares
outstanding 235.416 304.103 366.411
Per Ordinary Share (USD)
Net Asset Value share 51,01 35,64 38,54
Notes to the Profit & Loss account
9. Income from investments
9.1 Dividends
This refers to net cash dividends including withholding tax.
Stock dividends are considered to be cost free shares. Therefore,
stock dividends are not presented as income.
9.2 Interest income
Most of this amount was received on outstandingcash
balances.
9.3 Other income
From 6 March 2009 this refers to the charges of 0.35% received
on shares issued and repurchased.
These costs are to cover transaction costs in relation with the
purchase and sale of Ordinary Shares and are booked as an income
for the Fund.
01-01-2014 01-01-2013
10. Expenses 31-12-2014 31-12-2013
USD USD
10.1 Investment research fees
Research Fee 161.900 128.532
Custody Fee and Charges 14.187 36.345
------------------ ---------------------
176.087 164.877
------------------ ---------------------
Expenses directly related to the management of investments, like
custody fees and transfer charges as well as other paying
agent fees, are deducted from the result.
10.2 Other expenses
Administration Fees and Charges 70.079 68.826
Company Secretarial and Domiciliation Fees 40.158 40.296
Bank Expenses 2.032 5.396
Regulatory Fees and Charges 23.886 22.555
Legal Expenses - 1.325
Listing Expenses 19.250 18.000
Audit Fees 29.894 18.359
Fiscal Compliance Fees - -
Fiscal Advisory Fees 11.960 14.432
Advertising and Promotion 20.595 22.555
Corporate Finance Fees 30.000 7.500
Listing Agent Fees 48.655 -
Directors Fees 59.416 66.564
Board Expenses 20.390 20.207
Depreciation and Amortization - -
Miscellaneous 4.457 4.396
VAT Reclaims previous years -22.969 -22.076
------------------ ---------------------
357.803 288.335
------------------ ---------------------
Audit fees include the audit of the financial statements by
theexternal auditor Mazars amounting to USD 15,250 (2013: USD
16,100).
Ongoing Charges Ratio
The Ongoing Charges Ratio (cost ratio) is calculated as follows:
the total expenses of the Fund divided by theaverage NAV*. The
Ongoing Charges Ratio of the Fund for the reporting period is equal
to: 4.72 % (2013: 3.88 %).
Turnover ratio
The turnover ratio is calculated as follows: the total sum of
purchases plus sales minus subscriptions minus redemptions divided
by theaverage NAV *.
The turnover ratio of the Fund for the reporting period is equal
to: 21.41 % (2013: 23.33 %).
* - The average Net Asset Value of the Company for reporting
period is calculated as the sum of every available Net Asset
Value in the current year divided by thenumber of
observations.
Comparison of real cost with
cost according to Prospectus**
According to Actual
Prospectus costs
USD USD
Investment Research fee (1) 144.000 161.900
Administration fee (2) 70.079 70.079
Secretarial and Domiciliation
fees (3) 40.158 40.158
Costs for the Board (4)
**- As per the Prospectus of
7 June 2010. 100.000 79.806
1) Ian McEvatt receives an annual fee of USD 114,000 for
investment research and IndAsia Fund Advisors Pvt Ltd receives
anannual fee of USD 42,000. According to the Prospectus the
research investment fees amount USD 144,000. However, actual costs
in 2014 amount USD 161,900. The difference is caused by increased
research fees of Indasia Fund Advisors Pvt.Ltd.
2) CACEIS Bank Luxembourg Amsterdam Branch is paid a fixed fee
of EUR 50,000 per year for administration services.
3) Inviqta has been appointed to provide domicile and company
secretarial services to the Fund for a fixed fee of
EUR 25,000 (exclusive VAT) per year.
4) The Prospectus states that the remuneration of the Directors
is subject to a limit of USD 100,000 in aggregateper year. In2014
the remuneration of the Directors was USD 62,985 (inclusive VAT) in
total so far. Directors fees per person are as follows: Ian
McEvatt: USD 10,000 (2013: USD 10,000); Dwight Makins: USD 18,500
(2013: USD 18,500); Robert Meijer: USD 22,385 (2013: USD 22,420);
Karin van der Ploeg***: USD 12,100 (2013: USD 12,100). Board
expenses (exclusive remuneration of the Directors) amount to USD
20,390 in 2014.
*** Karin van der Ploeg is a partner of Inviqta. It has been
agreed that members of the Board who are also directors/partners of
the service providers of the Fund receive a fixed annual management
fee of USD 10,000.
Employees
The Fund has no employees.
Amsterdam, 4 May 2015
Board of Directors
Ian McEvatt, Chairman
Dwight Makins
Robert Meijer
Karin van der Ploeg
Portfolio breakdown
As per 31 December 2014
India percentage
of total
Net Asset
Market Value Value
USD %
Auto Ancilliary 1.316.641 11,0
13.000 Bajaj Auto 500.960
84.000 Balkrishna 815.681
Construction 381.551 3,2
9.000 Ultra Tech Cement 381.551
Consumer goods 2.702.541 22,5
28.000 Agro Tech Foods 265.018
40.000 ITC 233.641
3.500 Nestle India 354.026
180.000 Pidilite 1.548.561
10.000 VST Industries 301.295
Energy 243.348 2,0
45.000 ONGC 243.348
Financials 3.013.702 25,1
50.000 HDFC Bank 753.773
100.000 ICICI Bank 559.389
60.000 Kotak Mahindra 1.201.379
Bank
194.675 Magma Fincorp 319.511
South Indian
400.000 Bank 179.651
Healthcare 2.235.678 18,6
45.000 Lupin 1.017.985
68.000 Torrent Pharmaceuticals 1.217.693 2,0
Industrials 236.069
25.000 Supreme Industries 1.663.096 13,8
48.000 Cyent 393.064
16.000 Infosys 499.993
19.000 TCS 770.039
Total Equity 11.792.627 98,1
Cash and cash equivalents 231.030 1,9
Canbank mutual fund 114.614
Net 116.416 1,0
NAV: 12.023.657
HIMALAYAN FUND N.V.
NOTICE OF THE ANNUAL GENERAL MEETING OF SHAREHOLDERS
Notice is hereby given that the Annual General Meeting of
Shareholders ("AGM") of Himalayan Fund N.V. (the "Fund") will be
held on Thursday 18 June 2015 at 12h30 at Herengracht 124-128, 1015
BT Amsterdam.
The annual report 2014 will be available no later than 11 May
2015. Copies of the annual report 2014 and the agenda of the AGM
are published on the website of the Fund: www.himalayanfund.nl and
may be obtained free of charge at the registered office of the
Fund:
Himalayan Fund N.V.
Legmeerdijk 182
1187 NJ Amstelveen
The Netherlands
T/F 020-6411161
karin@himalayanfund.nl
The Board of Directors
May 4, 2015
(i) Shareholders (and other persons/entities entitled to attend
the AGM) registered in the administration of the intermediaries as
defined in the Securities Giro Act (Wet giraal effectenverkeer)
("Intermediaries" or "Intermediary") on Thursday 21 May 2015 (the
"Registration Date") who have notified their intention to attend
the AGM will have access to the meeting;
(ii) A shareholder shall only be entitled to attend and vote at
the AGM whether in person or by proxy if such shareholder has
deposited documentary proof of his shareholding obtained from their
Intermediary, at the Registration Date at the registered office of
the Fund (see above) at the latest at Friday 12 June 2015 before
16h00 in respect of which the shareholder shall be issued a
receipt. A receipt must be presented to gain entry to the
meeting;
(iii) Any shareholder shall be entitled to attend and vote in
person or by proxy at the above meeting;
(iv) A shareholder may appoint one or more proxies to attend
and, on a poll, vote instead of that shareholder. A proxy need not
be a shareholder of the Fund;
(v) All instruments of proxy must be deposited at the registered
office of the Fund at the latest at Friday 12 June 2015 before
16h00. The lodging of a form of proxy does not prevent a
shareholder from attending and voting if he wishes;
(vi) Persons who wish to attend the AGM may be requested to
furnish proof of their identity by means of a valid identity
document.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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