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1、ANNUALFINANCIALREPORTFOR THE YEAR ENDED 30thJUNE 2016EMERGING MARKETS FUND LIMITED19257 Genesis Annual Report 2016_Part 1:Layout 129/09/201617:02Page COV1GENESISEMERGINGMARKETSFUNDLIMITED1PageINTRODUCTION.2HIGHLIGHTS.3DIRECTORS.5MANAGEMENTREPORTCHAIRMANSSTATEMENT.7DIRECTORS REPORT.11MANAGERSREVIEW.2
2、4TWENTYLARGESTHOLDINGS.27COUNTRYEXPOSURE OF THEPORTFOLIO.30SECTOREXPOSURE OF THEPORTFOLIO.31THEPORTFOLIO.32INDEPENDENTAUDITORS REPORT.39STATEMENT OFFINANCIALPOSITION.41STATEMENT OFCOMPREHENSIVEINCOME.42STATEMENT OFCHANGESINEQUITY.43STATEMENT OFCASHFLOWS.44NOTES TO THEFINANCIALSTATEMENTS.45PERFORMANC
3、ERECORD.69ADMINISTRATION.71NOTICE OFMEETING.72NOTE:All reference to US dollars or$throughout this report are to the United States currency.19257 Genesis Annual Report 2016_Part 1:Layout 129/09/201617:02Page 1OBJECTIVEThe investment objective is to achieve capital growth over the medium to long term,
4、primarily through investment in equity securities quoted on Emerging Markets.STRUCTUREGenesis Emerging Markets Fund Limited(the Fund or GEMF)is a Guernsey basedAuthorised Closed-Ended Investment Scheme with the ability to issue additional shares.The Funds shares are listed on the premium segment of
5、the Official List of the UKListing Authority,traded on the London Stock Exchange and are included in the FTSE250.The number of Participating Preference Shares outstanding is 134,963,060 as at30thJune 2016(30thJune 2015:134,963,060).MANAGERGenesis Asset Managers,LLP(Manager or Genesis).INVESTMENT APP
6、ROACHThe investment approach is to identify companies which are able to take advantage ofgrowth opportunities in emerging markets and invest in them when they are trading atan attractive discount to the Managers assessment oftheir intrinsic value.NEW SHARESShares may be issued twice monthly subject
7、to the following conditions:i)the Fund is invested as to at least 75%in emerging market securities;ii)the Fund will only issue new shares if it is unable,on behalf of the new subscriber,to acquire shares in the secondary market at a price equivalent to or below the priceat which new shares would be
8、issued;andiii)the issued share capital of the Fund is not increased by more than 10%in any twelvemonth period.2INTRODUCTION19257 Genesis Annual Report 2016_Part 1:Layout 129/09/201617:02Page 230thJune30thJune20162015%changePublished net asset value*838.7m771.4m8.7Published net asset value*$1,121.3m$
9、1,213.3m(7.6)Published net asset value per Participating Preference Share*6.215.728.7Published net asset value per Participating Preference Share*$8.31$8.99(7.6)Share price5.405.047.1Discount13.1%11.8%Ongoing charges ratio1.41%1.41%Countries represented in portfolio4041Number of holdings142162Year t
10、oYear to30thJune 201630thJune 2015LowHighLowHighShare price4.015.404.985.83Net asset value4.676.215.416.42Discount15.1%7.3%14.0%3.0%Annualised1 Year3 Year5 YearSince Inception%ReturnsFund Share Price7.12.90.411.0Fund NAV(net of fees)8.73.51.611.6MSCI EM(TR)3.93.00.29.5MSCI World(TR)15.112.211.27.6$R
11、eturnsFund Share Price(8.9)(1.3)(3.2)10.4Fund NAV(net of fees)(7.6)(0.8)(2.0)11.0MSCI EM(TR)(11.7)(1.2)(3.4)8.9MSCI World(TR)(2.2)7.57.27.0Past performance is no guarantee of future performance.*Figures are based on the last traded price for investments.3HIGHLIGHTS19257 Genesis Annual Report 2016_Pa
12、rt 1:Layout 129/09/201617:02Page 34HIGHLIGHTSCONTINUEDF Fu un nd d N N.A A.V V.MMS SC CI IE EMM(T TR R)S Se ec co on nd da ar ry y m ma ar rk ke et t p pr ri ic ce e6 60 0.0 08080.0 010100 0.0 0120120.0 01 14 40 0.0 03 30 0.0 06 6.1 11 13 30 0.0 06 6.1 12 22 29 9.0 06 6.1 13 32 28 8.0 06 6.1 14 43 3
13、0 0.0 06 6.1 15 53 30 0.0 06 6.1 16 6V Va al lu ue e(r re eb ba as se ed d t to o 1 10 00 0 o on n 3 30 0t th hJ Ju un ne e 2 20 01 11)1)108.5108.5102.2102.2100.8100.8(2 2.0 0)%)%0 0.0 0%2 2.0 0%4 4.0 0%6 6.0 0%8 8.0 0%1 10 0.0 0%1 12 2.0 0%1 14 4.0 0%3 30 0.0 06 6.1 11 13 30 0.0 06 6.1 12 22 29 9.0
14、 06 6.1 13 32 28 8.0 06 6.1 14 43 30 0.0 06 6.1 15 53 30 0.0 06 6.1 16 61 13.1%3.1%Average 8.1%Average 8.1%Performance in last 5 Years*Discount to NAV last 5 Years*Based on month-end Net Asset Values19257 Genesis Annual Report 2016_Part 1:Layout 129/09/201617:02Page 4HLNE PLOIX(Chairman)Hlne Ploix(F
15、rench)is Chairman of Paris-based private equity firm Pechel Industries.She has had an extensive careerin finance and investment in the public and private sectors,both in France(primarily at the French state-owned Caissedes Dpts et Consignations)and internationally(notably as an Executive Director at
16、 the IMF,World Bank and as aMember of the Investments Committee of the UN Joint Staff Pension Fund).She is currently a Non-Executive Directorof Lafarge and Sofina(Brussels),Non-Executive Chairman of Sogama Crdit Associatif and was previously at a numberof other companies,including The Boots Company
17、PLC,BNP Paribas and Publicis.Mrs Ploix was educated at theInstitut dEtudes Politiques,the University of California at Berkeley and INSEAD.SUJIT BANERJISujit Banerji(Indian)is an independent advisor on corporate strategy to a number of companies in the finance,andfinance-related technology sectors gl
18、obally.In 2009 he completed a 33 year career at Citigroup where he had been aManaging Director since 1996,latterly serving as Head of Strategy and Institutional M&A for Europe,the MiddleEast and Africa(MENA).His career at Citi covered a number of regional roles including strategy and corporatefinanc
19、e,and relationships with multinational clients across the MENA region.He has also served as the country andregion head for Citi in India,and as the head of the corporate business in Thailand.An Indian national,over thecourse of his career he has been based in India,Bangladesh and Thailand as well as
20、 in Europe,and is currently basedin Singapore.He was educated at the University of Poona(Pune)and the University of Bombay(Mumbai).RUSSELL EDEY*Russell Edey(British)spent the majority of his career at NM Rothschild&Sons,where he held a number of positionsover his 35 years at the bank,including Head
21、of Corporate Finance and subsequently Non-Executive Deputy Chairman.He currently serves as Chairman of Avocet Mining plc,and is a Non-Executive Director of BlackrockWorld MiningTrust plc.He previously spent 12 years as Chairman of AngloGold Ashanti in South Africa,and in recent years hehas also serv
22、ed as a Non-Executive Director of Old Mutual plc,Associated British Ports plc,FKI plc,and Paris OrleansSA.He qualified as a Chartered Accountant and began his career in finance at Anglo American in South Africa.Heis based in the UK.MICHAEL HAMSONMichael Hamson was born in Scotland but is now an Aust
23、ralian citizen and based in Melbourne.He was a Directorof Newmont Mining Inc.for eleven years until 2012,and is Chairman of Hamson Consultants Pty Ltd andTechnology Venture Partners,as well as a number of other companies.Michael was the former Deputy Chairman ofNormandy Mining Limited and was a foun
24、ding partner,Chief Executive and Joint Chairman of McIntosh GriffinHamson&Co(now Merrill Lynch Australia),a leading stockbroker in Australia.SAFFET KARPATSaffet Karpat(Swiss/Turkish)is based in Istanbul and is a member of the executive committee of Turkish food companySta and a board member of Eczac
25、ba,a Turkish conglomerate.Previously he was General Manager for Procter&Gambles business inTurkey and the Caucasian and Central Asian Republics.He started his career at Procter and Gamblein 1983 and after fulfilling Finance Director positions based in Egypt and Saudi Arabia,he then served as Finance
26、Director for Central and Eastern Europe,the Middle East and Africa.He was educated at the University of Istanbuland Lausanne University.Member of Audit and Risk Committee*Chairman of Audit and Risk Committee5DIRECTORS19257 Genesis Annual Report 2016_Part 1:Layout 129/09/201617:02Page 5DR.JOHN LLEWEL
27、LYNDr.John Llewellyn(British)is the founder of Llewellyn Consulting,a London-based consultancy specialising inmacroeconomics and environmental economics.From 1995 to 2008 he was Global Chief Economist and then SeniorEconomic Policy Advisor at Lehman Brothers.Previously he spent seventeen years at th
28、e OECD in Paris,in chargeof international economic forecasting and policy analysis and,latterly,as Head of the Secretary-Generals Private Office(Chief of Staff).Prior to that,Dr.Llewellyn spent ten years in academia(University of Cambridge).COEN TEULINGS(retired 29thOctober 2015)Coen Teulings(Dutch)
29、is based in Belgium and is Chairman of Merifin Capital,an independent European privategroup investing worldwide in diversified industries.He was formerly with leading merchant bank Kleinwort Benson inLondon and prior to this with Heineken Breweries in Amsterdam.He is or has been a Director of Charte
30、rhouse Group,Inc.(New York),Viscardi AG(Munich),TMW Immobilien AG(Munich),The International Yehudi MenuhinFoundation(Brussels)and The American European Community Association(Brussels).He serves or has served onthe Advisory Board of TCR Capital(Paris),Activa Capital(Paris),von Braun&Scheiber(Munich),
31、Arsenal Capital(New York)and Red Abbey(Baltimore).6DIRECTORSCONTINUED19257 Genesis Annual Report 2016_Part 1:Layout 129/09/201617:02Page 6I have pleasure in presenting to shareholders the twenty-seventh Annual Report of the Genesis Emerging Markets FundLimited,for the twelve-month period ending 30th
32、June 2016.This is my first Annual Report to shareholders of the Fundsince taking over as Chairman;accordingly I would like to thank my predecessor Coen Teulings for his chairmanship andvery significant contribution to the development of the Fund in recent years.PerformanceInvestors in emerging marke
33、ts have faced a somewhat difficult environment in recent years,and the last twelve months providedlittle respite.The fall-out from the significant commodity price declines last year continued to affect many developingeconomies and their companies in the latter part of 2015,while increasing concerns
34、about the Chinese economy held emergingmarkets back in the first half of 2016,even though some areas performed reasonably well.The overall effect was that the MSCI EM(TR)Index(the Index)fell 11.7%in US dollar terms over the year.However,for UK investors the dramatic weakening of sterling against the
35、 US dollar during the weeks around the EU referendummeant that in sterling terms the Index in fact gained 3.9%.Against this performance environment,the Funds net asset value per share(NAV)increased from 5.72 to 6.21,representing a return of 8.7%.The Funds share price rose by only 7.1%,however,as inv
36、estors generally continued to exhibitsome nervousness about potential returns from emerging markets.Having noted in the Half-Year Report six months ago that the Funds performance in 2015 was disappointing,and thatduring discussions with the Manager the Board had reviewed the results in some depth,it
37、 is pleasing to report that thereturns to shareholders over the full financial year have been ahead of the Index.That said,while the Manager has been ableto add relative value for shareholders over the longer-term too(and its record in this regard generally compares well withpeers),the disappointing
38、 absolute returns generated in recent years reflect the challenges facing emerging markets as a whole.The Funds Portfolio and the ManagerThe Managers fundamental investment approach is to invest in companies it feels are of sufficiently high quality to generateattractive returns over at least a five
39、-year horizon,but which the market appears to be pricing too cheaply.The considerationof quality within this approach incorporates not just an assessment of management capability and business position,butimportantly also each companys management of the environmental,social and governance issues impa
40、cting its operations.The Funds portfolio consists of a diversified group of 142 companies(including several smaller businesses),representinga large number of emerging market countries.The Managers long-term fundamental approach is reflected in the high averageholding period of(currently)over seven y
41、ears,with turnover correspondingly low at around 21%over the last twelve months.The Board continues to believe that the investment approach and the resulting portfolio described above is appropriate forthe Fund,and noting that the Manager has added value for shareholders over the life of the Fund by
42、 following such anapproach that shareholders interests remain well-served by the ongoing appointment of Genesis.CHAIRMANSSTATEMENT719257 Genesis Annual Report 2016_Part 1:Layout 129/09/201617:02Page 7The Managers Review on page 24 of this Annual Report provides a description of portfolio activity ov
43、er the year,andexplains some of the reasons behind the performance relative to the Index.The management fee payable to Genesis Asset Managers,LLP remains at 1.25%of NAV per annum.DiscountAs noted above,the share price rose by 7.1%over the year,from 5.04 to 5.40,with the discount to NAV corresponding
44、lywidening from 11.8%at the beginning of the period to 13.1%at the end.During the twelve-month period the discountranged between 7.3%and 15.1%,with an average level of 11.7%.These figures are monitored closely by the Board and we actively consider appropriate ways in which the discount can bemanaged
45、.The Board retains the ability to buy back shares if it believes this is warranted to help manage the discount,butin terms of the financial year under review we would observe that the Funds discount has been in line with both the peergroup and its own history and therefore that no explicit action wa
46、s necessary.The UKs EU ReferendumAs a Guernsey investment company listed in the UK,the Fund may be affected in due course by the result of the UKsJune referendum on membership of the EU.Shareholders will be aware that there is currently considerable uncertainty aboutthe timing of the UKs potential d
47、eparture.Naturally the Board and the Manager will monitor events closely to assess anypotential impact on the Fund over time,and will take appropriate action to ensure the Fund is in compliance with all relevantregulation and remains as accessible and attractive as possible to shareholders within an
48、d outside the UK.The Board of DirectorsAs well as my own appointment as Chairman,there have been a number of other changes within the Board that I wouldlike to highlight to shareholders.In accordance with the AIC Code,during April the Board underwent an independent triennialevaluation of its perform
49、ance,carried out by Stephenson&Co.As we announced earlier this year,Russell Edey has assumedthe role of Senior Independent Director.Saffet Karpat has stepped down as Chair of the Audit and Risk Committee butremains a member.Russell Edey has succeeded Saffet as Chair,while I have also been appointed
50、as a member of thisCommittee.Michael Hamson has decided not to stand for re-election at the Funds upcoming Annual General Meeting in November:on behalf of the whole Board I would like to express our great thanks to him for his considerable contribution over tenyears as a Director of the Fund,and wis
51、h him well.It is the Boards intention to appoint a new Director following MrHamsons departure;the Funds Nomination Committee is currently engaged in assessing potential candidates.The remaining five Directors are standing for re-election at the Annual General Meeting,in accordance with the requireme
52、ntsof the AIC Code of Corporate Governance and the UK Corporate Governance Code.Following the Boards internal evaluationprocess,I confidently recommend all Directors for re-election;naturally I hope that shareholders will feel similarly confidentin our ability to protect their interests and hence ab
53、le to vote in favour of our re-election.CHAIRMANSSTATEMENTCONTINUED819257 Genesis Annual Report 2016_Part 1:Layout 129/09/201617:02Page 8DividendShareholders will appreciate that the Funds stated objective is to achieve capital growth,with no specific focus on income,and historically the Board has t
54、herefore felt it counter-intuitive for the Fund to pay a dividend.In recent years,however,ithas become clear that notwithstanding the investment objective,and with no desire to change the way in which the Fundsportfolio is managed some of the Funds shareholders have raised the possibility of a divid
55、end being introduced.Withthis in mind,the Board has been considering the Funds position on dividends,taking into account a range of factors.TheBoard is currently of the view that it would not be appropriate to propose a dividend to shareholders principally becausein the past few years the Funds leve
56、l of net income has not been sufficiently consistent to support a meaningful payment.The matter will,however,continue to be reviewed by the Board on an ongoing basis,with the intention of paying a dividend(or indeed buying back shares)in future years if an appropriate opportunity arises.AGM,Sharehol
57、der Meeting,and Shareholder CommunicationThe notice convening the Annual General Meeting to be held on 8thNovember 2016 in Guernsey will be found at the endof this Annual Report,along with the schedule of resolutions to be considered,which include an update of the FundsArticles of Incorporation.As a
58、lways we strongly urge all shareholders to vote on the resolutions.We aim to ensure that all shareholders have access to up-to-date information about the Fund.As well as the distributionof Annual and Half-Year Reports and the release of announcements to the London Stock Exchange,we would encouragesh
59、areholders to refer to the monthly factsheets containing the latest information on recent activity and investment performance.These can be found on the Funds website along with other relevant Fund literature.Shareholders are also very welcome to attend the Funds annual Shareholder Information Meetin
60、g which this year will takeplace on 10thNovember 2016 at the Investment Advisers office in London.An invitation to this event will be found at theend of this Report and we hope that as many shareholders as possible will take this opportunity to hear directly fromrepresentatives of the Manager.Additi
61、onally,we recognise that it is important that while in practice the Manager will usually be best placed to addressshareholder queries shareholders are able to communicate directly with the Board where necessary.To that end I haveendeavoured to speak with many of the larger shareholders of the Fund s
62、ince my appointment as Chairman(and naturallywill continue to do so)but additional feedback is always helpful to us.Shareholders are welcome to contact me or RussellEdey(as Senior Independent Director),or indeed any of the Board with their comments.We can be reached via either theManager or the Admi
63、nistrator at the addresses on page 71 of the Report.9CHAIRMANSSTATEMENTCONTINUED19257 Genesis Annual Report 2016_Part 1:Layout 129/09/201617:02Page 9OutlookCompanies in emerging markets continue to face challenges:past editions of this Annual Report have articulated concernssuch as the drying up of
64、new areas of business opportunity,the increased competition from developed market firms andthe corresponding effect on profitability,the negative impact of potentially higher US interest rates,and crucially thelack of reforms in many countries that would help companies develop and grow more efficien
65、tly.None of these issues havedisappeared,and uncertainty over growth and reform in China in particular also weighs heavily on sentiment,but despiteall this,valuations for many companies in emerging markets remain elevated.The Managers Review on page 24 articulatessome of these themes further.Against
66、 that backdrop,however,the necessary reform process has started in markets like Mexico,India and Indonesia,andothers will follow in due course even in Brazil,a country in the midst of a full-blown political crisis,we can anticipatethat in time the eventual outcome is likely to be a better operating
67、environment for companies.Ultimately,the high-qualitybusinesses held in the Funds portfolio are those with the capability to take advantage of the challenging landscape,increasingtheir reach at the expense of their peers.Good stock selection,and an awareness of potential changes in corporate operati
68、ngconditions,remain the necessary skills to navigate through this environment,enabling the generation of strong emerging marketreturns for shareholders over the long term.Hlne PloixChairmanSeptember 201610CHAIRMANSSTATEMENTCONTINUED19257 Genesis Annual Report 2016_Part 1:Layout 129/09/201617:02Page
69、1011DIRECTORSREPORTThe Directors are pleased to present their twenty-seventh Annual Financial Report of the Fund,covering the year ended30thJune 2016.STRATEGY AND BUSINESS MODELFund ObjectiveThe investment objective of the Fund is to achieve capital growth over the medium to long term,primarily thro
70、ughinvestment in equity securities quoted on Emerging Markets.StrategyThe core element of our strategy is to appoint and retain a high-quality manager whose investment philosophy best matchesthe Funds objective,and carefully monitor the Funds performance.Genesis,the Funds Manager,believes that it ca
71、n best deliver excellent performance by making long-term investments in qualitybusinesses at a discount to rigorously-assessed intrinsic value.By focussing on companies that can compound shareholderscapital,and ignoring the composition of the benchmarks,the Manager believes it can generate higher lo
72、ng-term relative returnswhile taking less risk.Business Model and Investment ProcessThe Fund has no employees or premises and the Board is comprised of non-executive Directors.The day-to-day operationsand functions of the Fund have been delegated to third-party service providers who are subject to t
73、he oversight of the Board.During the year under review Genesis provided investment and risk management services,JP Morgan Chase Bank was theCustodian and JP Morgan Administration Services(Guernsey)Limited was the Administrator and Company Secretary.TheBoard regularly reviews the performance and risk
74、s of its primary service providers and that they have appropriate frameworksin place for the oversight of their internal controls,monitoring and reporting.In line with the stated investment philosophy,the Manager employs a bottom-up investment approach with all members ofits investment team taking r
75、esponsibility for analysis on individual companies.The investment process is founded onproprietary internal research,with the Managers structure designed to allow a cohesive team of investors to generatefundamental research insights and,subject to rigorous challenge,express those insights in portfol
76、ios.The Funds portfoliois diversified across countries and industries and typically comprises approximately 130 holdings,to give a range of 10-15 perteam member.The Manager believes that when its team concentrates on a smaller number of ideas,the research can be deeperand insights more valuable.Port
77、folios comprise holdings in predominantly high-quality,sustainable businesses.As part of their analysis the Managersteam determines quality ratings for each company,which primarily measure a businesss ability to generate sustainable excessreturns on capital.High-quality companies should have a low p
78、robability of negative revisions to the Managers assessmentof their intrinsic value in US$terms.Environmental,Social and Governance(ESG)considerations are included in the analysisof sustainability,and the team takes ESG factors into account when determining the quality rating of a business.The Manag
79、errecognises that governance issues in particular are relevant to all companies and has laid out the key principles that it expectscompanies to follow from a corporate governance perspective.19257 Genesis Annual Report 2016_Part 1:Layout 129/09/201617:02Page 1112DIRECTORSREPORTCONTINUEDSTRATEGY AND
80、BUSINESS MODEL(continued)Given that the average holding period of investments in client portfolios has consistently been more than five years(and iscurrently in excess of seven)and that this characteristic is expected to persist,the Manager is comfortable buying into relativelyilliquid situations an
81、d building positions gradually.In the Managers experience the trading liquidity of a stock improves asits underlying merits are gradually appreciated by a wider domestic and international investor base.Turnover is correspondinglylow;typically of the order of 20-25%per annum.There is no specific comp
82、any market capitalisation range in which the Manager invests,and it is prepared to take positionsin smaller-capitalisation stocks where compelling investment cases are found,in the belief that these can be a source ofparticularly attractive long-term investment opportunities.The Fund invests in a la
83、rge number of emerging markets,manyof which are not represented in the standard indices.The Manager aims to retain as much flexibility as possible with respectto portfolio constraints,so formal limits are applied only on maximum exposure(at time of purchase)to individualcountries of 25%and individua
84、l stocks of 5%.Because the Manager aims to invest in companies that can compound shareholderscapital,but also aims to invest at a discountto intrinsic value,the portfolio tends to have both growth and value characteristics.The portfolios investments are primarily listed equity securities.However,the
85、 Fund also holds positions in Genesis affiliatedinvestment companies,Participatory notes and Investee Funds,where appropriate.Details of the Funds portfolio are shownon pages 32 to 38.The Fund does not engage in any active management of foreign currency risk and the portfolio is unleveraged(refer to
86、 notes13(b)and 13(d)respectively).The Fund entered into a securities lending programme with JP Morgan Chase Bank N.A.in April 2016(refer to note 2(n).FINANCIAL PERFORMANCEResultsThe total loss for the year for the Fund amounted to$91,996,000 compared to a total loss of$120,705,000 in the previousyea
87、r.Refer to the Managers Review on pages 24 to 26 for an explanation of the Funds performance.The Directors do notrecommend the payment of a dividend in respect of the year ended 30thJune 2016(2015:nil).Capital ValuesAt 30thJune 2016,the value of Equity Shareholders Funds was$1,121,318,000(2015:$1,21
88、3,314,000)a reduction of$91,996,000.The Net Asset Value per Participating Preference Share was$8.31(2015:$8.99).Key Performance IndicatorsThe Highlights section on pages 3 and 4 show the Funds Key Performance Indicators including its performance and discountto its NAV over the last five years.19257
89、Genesis Annual Report 2016_Part 1:Layout 129/09/201617:02Page 1213DIRECTORSREPORTCONTINUEDPRINCIPAL RISKS AND RISK MANAGEMENTThe main risks to the value of its assets arising from the Funds investment in financial instruments are unanticipated adversechanges in market prices and foreign currency exc
90、hange rates and an absence of liquidity.The Board reviews and agrees withthe Manager policies for managing each of these risks and they are summarised on the following page.These policies haveremained unchanged since the beginning of the period to which these financial statements relate.Volatility o
91、f emerging markets and market riskThe economies,currencies and the financial markets of a number of developing countries in which the Fund invests maybe extremely volatile.To manage the risks posed by adverse price fluctuations the Funds investments are geographicallydiversified,and will continue to
92、 be so.The Fund will not invest more than 25%of its assets(at the time the investment ismade)in any one country.Further,the exposure to any one company or group(other than an investment company,unittrust or mutual fund)is unlikely to exceed 5%of the Funds net assets at the time the investment is mad
93、e.The Articles ofIncorporation place a limit of 10%for securities issued by one company but the Directors use 5%for monitoring purposes.Foreign currency exposureThe Funds assets will be invested in securities of companies in various countries and income will be received by the Fundin a variety of cu
94、rrencies.However,the Fund will compute its net asset value and distributions in US dollars.The value ofthe assets of the Fund as measured in US dollars may be affected favourably or unfavourably by fluctuations in currencyrates and exchange control regulations.Further,the Fund may incur costs in con
95、nection with conversions between variouscurrencies.The Fund has opted not to engage in any active management of foreign currency risk,and therefore all its openforeign exchange positions are typically unhedged.Lack of liquidityTrading volumes on the stock exchanges of developing countries can be sub
96、stantially less than in the leading stockmarketsof the developed world and trading may even be temporarily suspended during certain periods.Liquidity can also be negativelyimpacted by temporary capital controls in certain markets.A lower level of liquidity can exaggerate the fluctuations in thevalue
97、 of investments described previously.The restrictions on concentration and the diversification requirements detailed abovealso serve normally to protect the overall value of the Fund from the risks created by the lower level of liquidity in themarkets in which the Fund operates.Custody riskThe Fund
98、is also exposed to operational risks such as custody risk.Custody risk is the risk of loss of securities held incustody occasioned by the insolvency or negligence of the Custodian.Although an appropriate legal framework is in placethat eliminates the risk of loss of value of the securities held by t
99、he Custodian,in the event of its failure,the ability of theFund to transfer the securities might be temporarily impaired.The day-to-day management of these risks is carried out bythe Manager under policies approved by the Board.19257 Genesis Annual Report 2016_Part 1:Layout 129/09/201617:02Page 1314
100、DIRECTORSREPORTCONTINUEDCORPORATE GOVERNANCEThe Board is accountable to shareholders for the governance of the Funds affairs.The Directors use this Report to detailthe Funds corporate governance statement.The Fund is a member of the Association of Investment Companies(AIC)and the Board has considere
101、d the principlesand recommendations of the 2015 AIC Code of Corporate Governance(AIC Code)by reference to the AIC CorporateGovernance Guide for Investment Companies(AIC Guide).The AIC Code addresses all the principles set out in the 2014UK Corporate Governance Code,as well as setting out additional
102、principles and recommendations on issues that are ofspecific relevance to the Fund.As a Guernsey incorporated company listed on the London Stock Exchange within the FTSE 250,the Fund is required tocomply with Listing Rule 9.8.7(for overseas incorporated companies).This requires the Fund to state how
103、 it has appliedthe main principles set out in the 2014 UK Corporate Governance Code and whether it has complied with these provisionsthroughout the accounting period.The Fund is an Authorised Closed-Ended Investment Scheme regulated by the Guernsey Financial Services Commission(GFSC).The GFSC requir
104、es compliance with the principles set out in the Finance Sector Code of Corporate Governance(Guernsey Code),or alternative codes accepted by the GFSC,in the context of the nature,scale and complexity of thebusiness.Statement of complianceThe Directors believe that during the year under review,they h
105、ave complied with the provisions of the AIC Code and therefore,insofar as they apply to the Funds business,with the provisions of the 2014 UK Corporate Governance Code and GuernseyCode except as noted below.The role of Chief ExecutiveSince all Directors are non-executive and day-to-day management re
106、sponsibilities are sub-contracted to the Manager,theFund does not have a Chief Executive.Executive Directors remunerationAs the Board has no Executive Directors,it is not required to comply with the principles of the 2014 UK CorporateGovernance Code in respect of Executive Directors remuneration and
107、 does not have a Remuneration Committee.Internal audit functionAs the Fund delegates to third parties its day-to-day operations and has no employees,the Board has determined thatthere is no requirement for an internal audit function.The Directors annually review whether a function equivalent tointer
108、nal audit is needed and will continue to monitor the Funds internal control framework in order to provide assurancethat they operate as intended.19257 Genesis Annual Report 2016_Part 1:Layout 129/09/201617:02Page 1415DIRECTORSREPORTCONTINUEDTHE BOARDThe Board,chaired by Hlne Ploix,consists of non-ex
109、ecutive Directors,all of whom are considered to be independent ofthe Manager.The biographies of the Directors are shown on pages 5 and 6.Michael Hamson has served on the Board formore than nine years and continued to perform his duties independently.The Board has consisted of no more than sevenDirec
110、tors during the year and the Board feels that given its size and the fact that the Directors do not have executive roles,it is not necessary to establish separate Remuneration or Management Engagement Committees.Russell Edey assumed therole of Senior Independent Director during the year.The Audit an
111、d Risk Committee is chaired by Russell Edey and hasformally delegated duties and responsibilities with written terms of reference,which are available on request from the Manager.All Directors form the Nomination Committee,chaired by Hlne Ploix.The Board regularly reviews both the performance of,and
112、the contractual arrangements with,the Manager,and is satisfiedthat the continuing appointment of the Manager is in the best interests of shareholders.The management agreement setsout matters over which the Manager has authority and includes management of the Funds assets and the provision ofadminist
113、rative duties,including accounting,secretarial and administrative services.The agreement further permits the Managerto delegate its administrative duties,subject to the Boards prior consent.All other matters are reserved for the approval ofthe Board.Under this agreement,the Manager is entitled to re
114、ceive a management fee from the Fund,payable monthly,equalto 1.25%per annum,calculated and accrued on the Net Asset Value of the Fund as at each Valuation Day.The Managersappointment is under a rolling contract which may be terminated by three months written notice given by the Fund,andtwelve months
115、 written notice given by the Manager.As noted on page 19,the Audit and Risk Committee reviews the performance of,and the contractual arrangements with,the Administrator and the Custodian.The Board is satisfied that the continuing appointment of the Administrator and theCustodian is in the best inter
116、ests of shareholders.The Board meets at least three times during the year and between these meetings there is regular contact with the Managerwhich provides the Board with appropriate and timely information.Attendance at those meetings is given in the table below.BoardAudit and RiskNominationMeeting
117、sCommitteeCommitteeDirectorAttendedMeetings AttendedMeetings AttendedHlne Ploix(joined the Audit andRisk Committee on 9thFebruary 2016)312Sujit Banerji3n/a2Russell Edey332Michael Hamson322Saffet Karpat332Dr.John Llewellyn3n/a2Coen Teulings(retired 29thOctober 2015)1n/a019257 Genesis Annual Report 20
118、16_Part 1:Layout 129/09/201617:02Page 1516DIRECTORSREPORTCONTINUEDTHE BOARD(continued)Board appointments and re-electionAll members of the Board consider new Board appointments.The Chairman,Manager or other appropriate persons providenew appointees to the Board with a detailed induction on the Fund.
119、When appointing a new Director,the Board takes careto ensure that the new Director enhances the balance of skills and experience appropriate to the requirements of the Fundand that a new Director has enough time available to properly fulfil their duties.The Directors also have access,where necessary
120、in the furtherance of their duties,to independent professional advice at the Funds expense.Directors are initially appointeduntil the following Annual General Meeting when,under the Funds Articles of Incorporation,it is required that they beelected by shareholders.Hlne Ploix was appointed as non-exe
121、cutive Chairman on 30thOctober 2015,replacing Coen Teulings.She also acts aschairman of the Nomination Committee,which is comprised of all members of the Board.On 9thFebruary 2016,Russell Edey replaced Saffet Karpat as chairman of the Audit and Risk Committee,the membersof which are Russell Edey,Saf
122、fet Karpat,Michael Hamson and Hlne Ploix.Russell Edey was also named as SeniorIndependent Director.All the Directors are retiring in accordance with the AIC Code and,with the exception of Michael Hamson,will offerthemselves for re-election.As each Director has maintained their effectiveness and comm
123、itment to the Fund,the Boardendorses them and commends their re-election to the shareholders.The Board evaluates its performance on an annual basis,and considers that the blend of skills,experience,age,gender andlength of service is appropriate for the requirements of the Fund.In accordance with the
124、 AIC Code,an independent evaluationof the Boards performance was carried out in April 2016 by Stephenson&Co.The findings of the review were consideredby the Directors and actions,where appropriate,have been taken.The Board is aware of the requirements of the 2014 UKCorporate Governance Code and regu
125、larly reviews its succession plan.Directors remunerationThe Directors are entitled to receive fees for their services which shall not exceed$400,000,exclusive of relevant expenses,in aggregate per annum.This was approved by Shareholders at the Annual General Meeting on 2ndNovember 2012 andcan only b
126、e amended by Shareholder approval at a General Meeting.The level of Directors Fees is independently assessed and was reviewed this year concurrently with the independent evaluationof the Boards performance.Each Director receives 30,000 per annum,with a further 5,000 per annum for Audit andRisk Commi
127、ttee Directors,an additional 2,500 per annum for the Senior Independent Director and a further 10,000per annum for the Chairman.Such remuneration is deemed to accrue on a daily basis.As there are no executive Directorsof the Fund,no separate Remuneration Report is necessary.The Directors are also en
128、titled to be paid all travelling,hotel and other expenses properly incurred by them in attendingand returning from meetings of the Directors or any committee of the Directors or General Meetings of the Fund or inconnection with the business of the Fund.19257 Genesis Annual Report 2016_Part 1:Layout
129、129/09/201617:02Page 1617DIRECTORSREPORTCONTINUEDTHE BOARD(continued)Directors interestsThe Directors listed on pages 5 and 6 served throughout the year under review(except Coen Teulings who retired on29thOctober 2015).The following(who were Directors at the period end)had a beneficial interest in t
130、he share capital ofthe Fund at 30thJune 2016:Beneficial interestin ParticipatingPreference Shares atDirectors30thJune 2016Hlne Ploix15,000Sujit Banerji10,000Michael Hamson(including family interests)8,700Saffet Karpat20,000Directors insurance and indemnificationDirectors and Officers liability insur
131、ance cover is held by the Fund to cover Directors against certain liabilities that mayarise in the course of their duties.AUDIT AND RISK COMMITTEEThe Board has established an Audit and Risk Committee whose responsibilities are,inter alia:To monitor the integrity of the financial statements of the Fu
132、nd,including its annual and half-yearly reports and anyother formal announcement relating to its financial performance;To review the Funds accounting policies and any significant financial reporting judgements;To monitor and review the adequacy and effectiveness of the internal financial control and
133、 risk management systems onwhich the Fund is reliant;To review and approve statements to be included in the Annual Financial Report concerning controls and risk management;To report to the Board that they have carried out a robust assessment of the principal risks facing the company;To provide advic
134、e to the Board on whether they consider the Annual Financial Report,taken as a whole,is fair,balancedand understandable;To make recommendations to the Board in relation to the appointment,re-appointment and removal of external auditors;To monitor the independence and objectivity of external auditors
135、;andTo review the audit fees,terms of engagement and provision of non-audit services by the external auditor.The Audit and Risk Committee usually meets three times a year to review the Annual and Half Year Financial Reports,audittimetable and other risk management and governance matters.It may meet
136、more often if deemed necessary,or if required by theFunds auditors.Significant accounting mattersDuring the review of the Funds financial statements for the year ended 30thJune 2016,the Audit and Risk Committeeconsidered the following matters to be significant issues,both of which were satisfactoril
137、y addressed:19257 Genesis Annual Report 2016_Part 1:Layout 129/09/201617:02Page 1718DIRECTORSREPORTCONTINUEDAUDIT AND RISK COMMITTEE(continued)Issue consideredHow the issue was addressedValuation of the investment portfolio97.7%of the investment portfolio was valued using quoted prices or prices tha
138、twere observable.The Administrators weekly valuation of these securities waschecked by the Manager to independent price sources.1.5%of the investmentportfolio was invested in other funds(Investee Funds)which were valued usingthe most recently available valuation statements from their respective admi
139、nistrator,updated to include subsequent cashflows.The remaining 0.8%of the investmentportfolio related to two listed equity investments(refer page 59 for more details).The Managers monthly Valuation Committee monitors the fair value of allsecurities and ensures the appropriateness and accuracy of th
140、e methodologiesused and their effective implementation.The Manager also regularly providesinformation to the Directors on any stale,unquoted and illiquid securitiescontained within the investment portfolio for their review and comment.Loss of assets and custody riskAll securities are held by an inde
141、pendent Custodian and the Manager reconciles theCustodians investment portfolio records on a weekly basis.The Manager monitorsthe Custodians service levels throughout the year with a formal performance reviewconducted annually.The latest annual review was in June 2016.Auditor independence and assess
142、mentThe Funds external Independent Auditors,PricewaterhouseCoopers CI LLP(PwC),have acted in this role for more than tenyears and although no tender for the audit of the Fund has taken place since their appointment,rotation of the Audit Partnerhas regularly taken place,most recently in 2013.The Audi
143、t and Risk Committee monitors the European and U.K.legislationregarding mandatory audit firm rotation and tendering to ensure compliance.An external tender will be conducted during 2017(prior to the completion of the existing Audit Partners permitted service term)for the 2018 financial year.As part
144、of its review of the continuing appointment of the Auditors,the Audit and Risk Committee considered theindependence of the Auditor along with the effectiveness of the audit.The Auditors were asked to attest that PwC and theaudit team members were independent of the Fund.PwC also confirmed that they
145、had not been engaged in the provisionof any non-audit services to the Fund during the year.Audit effectiveness was assessed by means of the Auditors directengagement with the Board at Audit and Risk Committee meetings and also by reference to feedback from the Manager.The Audit and Risk Committee re
146、viewed the Auditors risk assessment and audit approach at the planning stage and werebriefed on the fulfilment of that plan at the completion stage.The Board concluded,on the recommendation of the Auditand Risk Committee,that the Auditors continue to be independent of the Fund.PwC have indicated the
147、ir willingness tocontinue in office.Resolutions re-appointing them and authorising the Directors to agree their remuneration will be proposedat the Annual General Meeting.The fees paid to PwC in respect of audit services for the year ended 30thJune 2016 were$52,000(2015:$81,000).PwCdid not provide a
148、ny non-audit services during the year(2015:None).19257 Genesis Annual Report 2016_Part 1:Layout 129/09/201617:02Page 1819DIRECTORSREPORTCONTINUEDINTERNAL CONTROLSThe Board is responsible for the Funds system of internal control and for reviewing its effectiveness.As there is delegation of daily oper
149、ational activity,described below,there is no requirement for a direct internal audit function.The internal control systems are designed to meet the Funds particular needs and the risks to which it is exposed.Accordingly,the internal control systems are designed to manage rather than eliminate the ri
150、sk of failure to achieve businessobjectives and by their nature can only provide reasonable and not absolute assurance against misstatement and loss.The services provided to the Fund by the Administrator,such as administration services,accounting services and companysecretarial duties reflect the sy
151、stem of financial and operating controls operating at the Administrator.The control regimefor other services,such as the Manager,Investment Adviser,Custodian and Registrar,reflect the internal controls operatedby these respective service providers.The Administrator provides semi-annual and annual fi
152、nancial statements based on the requirements of the Fund.The financialstatements are based on data from the Administrators accounting system including the trial balance,net asset valuation,purchase and sales report and other investment schedules.All statements are reconciled and reviewed by the Admi
153、nistratorusing pre-defined checklists and reviewed by the Manager prior to distribution.In order for the Directors to review their effectiveness for the Funds business,an annual review of all out-sourced functionshas taken place.Their performance was monitored against obligations specified in the re
154、levant contracts and was found tobe in order.Service providers report annually on the design and effectiveness of internal controls operating over the functions provided.Reports are reviewed by the Audit and Risk Committee and any material findings are considered by the Board of Directorsas a whole.
155、The Audit and Risk Committee has carried out its annual assessment of the internal controls of the Funds service providersfor the year ended 30thJune 2016 and considered the internal control procedures to be adequate based on the findings oftheir respective ISAE 3402 or SSAE 16 reports.SHAREHOLDERSS
156、hareholder relationsThe Board recognises the need for good communications with its shareholders.The primary media through which the Fundcommunicates with shareholders are the Annual and Half Year Financial Report and the monthly Fact Sheet,which areavailable via the Funds website,.The Chairman of th
157、e Fund(and other Directors,periodically)is availablefor meetings with the Funds major shareholders at their request,and all Members of the Board are available for shareholdersquestions and significant matters arising.On behalf of the Board,the Manager holds periodic meetings with the Fundsmajor shar
158、eholders to discuss aspects of the Funds positioning,performance and outlook.In addition,all shareholders are invited to attend the Annual General Meeting and the Funds annual Information Meetingwhich follows shortly after the AGM.The Board monitors the trading in the Funds shares and shareholder pr
159、ofile on aregular basis and maintains regular contact with the Funds brokers to ascertain the views of the market.Sentiment is alsoascertained by careful monitoring of the discount that the shares trade at versus their NAV and by comparison with theFunds peer group.19257 Genesis Annual Report 2016_P
160、art 1:Layout 129/09/201617:02Page 19SHAREHOLDERS(continued)Significant shareholdingsThe Fund has a diversified shareholder population,however the Directors are aware of the following shareholdings whichrepresented beneficial interests of 3%or more of the issued share capital of the Fund.ShareholderP
161、articipating30thJuneParticipating31stAugustPreference2016Preference2016Shares HeldPercentageShares HeldPercentageStrathclyde Pension Fund29,991,15522%29,985,65922%Lazard Asset Management LLC Group12,154,6669%12,184,0339%Banque Degroof SCS10,408,7098%10,110,4397%Wells Capital Management10,152,4418%10
162、,698,6788%Banque Degroof Luxembourg SA9,026,0357%8,738,9016%City of London Investment Management7,258,7165%8,188,5886%Derbyshire County Council4,600,0003%4,600,0003%BAE Pension Fund Investment Management4,120,7253%4,120,7253%Website:The Annual Financial Report is published on the website,which is ma
163、intained by Genesis InvestmentManagement,LLP(Investment Adviser).The maintenance and integrity of the website is,so far as relates to the Fund,theresponsibility of the Investment Adviser.The work carried out by the auditors does not involve consideration of these mattersand,accordingly,the auditors
164、accept no responsibility for any changes that may have occurred to the Annual Financial Reportsince they were initially presented on the website.Legislation in Guernsey governing the preparation and dissemination of financial statements may differ from legislation inother jurisdictions.REGULATORY DI
165、SCLOSURESRemunerationThe Manager is a limited liability partnership organised under the laws of Delaware,USA.In order to assist in theunderstanding of the risk profile of the Fund,the Manager makes certain qualitative and quantitative disclosures onremuneration.Details of the Remuneration Policy of
166、the Manager and the amounts attributable to the Fund are availablefrom the Legal Notice section of the Investment Advisers website,www.giml.co.uk.UK Listing Authority Listing Rules(LR)compliance with rule 9.8.4None of the disclosures required under LR 9.8.4 are applicable to the Fund.OTHER MATTERSGo
167、ing ConcernThe Directors believe that the Fund has adequate resources to continue in operational existence for twelve months from theapproval date of the Annual Financial Report.This is based on various factors including the Funds forecast expenditure,itsability to meet its current liabilities,the h
168、ighly liquid nature of its assets,its market price volatility and its closed-ended legalstructure.For these reasons,the Directors continue to adopt the going concern basis in preparing the Financial Statements.20DIRECTORSREPORTCONTINUED19257 Genesis Annual Report 2016_Part 1:Layout 129/09/201617:02P
169、age 2021DIRECTORSREPORTCONTINUEDOTHER MATTERS(continued)Viability StatementIn accordance with provision C.2.2.of the 2014 UK Corporate Governance Code,the Board has assessed the prospects of theFund over the next three years.The Board considers that this period of time is appropriate to assess the v
170、iability of the Fundgiven the inherent uncertainty in the global emerging markets and the Funds investment cycle.As part of its assessment,theBoard has considered the Funds business model including its investment objective and investment policy as well as the principalrisks and uncertainties that ma
171、y affect the Fund.The Board has noted that:The Funds investment objective is to achieve capital growth over the medium to long term and the Board regards the Fundas a long term investment.The average holding period for companies in the Funds portfolio is currently over seven years,with turnover at a
172、round 21%over the last twelve months.These attributes reflect the Managers long term fundamentalapproach.The Funds portfolio consists of a diversified group of companies from a large number of emerging market countries.Themajority of these are traded on major international stock exchanges.In the opi
173、nion of the Manager,the portfolio is sufficientlyliquid to meet all ongoing and future liabilities arising from the Funds day-to-day business.No significant increase to ongoing charges or operational expenses is anticipated.The Board has therefore concluded that there is a reasonable expectation tha
174、t the Fund will be able to continue in operationand meet its liabilities as they fall due over the next three years.Voting PolicyThe Directors have given the Manager discretion to exercise the Funds voting rights and the Manager,so far as is practicable,will exercise them in respect of resolutions p
175、roposed by investee companies.The Manager aims to vote in the best interests of the Fund,and to vote on all shares in all markets.ProxyVoting Guidelinesare maintained to outline the overall approach to voting and ensure that it is conducted in an appropriate manner.In evaluatingspecific voting issue
176、s,the Managers team members may engage directly with company management and directors and may alsocontact interest groups,other shareholders and research providers.Where appropriate,and particularly where a vote againstmanagement is warranted,the Manager will contact the company to explain the decis
177、ion-making process and promote bestpractice.In a case where securities are on loan ahead of a General Meeting or corporate action it is the Managers policy torequest that such securities be recalled to enable the shares to be voted.The Manager has contracted with Institutional Shareholder Services,I
178、nc.(ISS),an independent third-party provider of proxyvoting and corporate governance services.ISS provides proxy research and recommendations,executes votes as instructed by theManager,and keeps various records necessary for tracking proxy voting materials and proxy voting actions taken.ISSrecommend
179、ations are one form of external research which is factored into the Managers investment decision-making process.Each voting issue is analysed independently,however,and the Managers votes are not necessarily in line either with companymanagement or the ISS recommendations.19257 Genesis Annual Report
180、2016_Part 1:Layout 129/09/201617:02Page 21OTHER MATTERS(continued)Further details on voting policy are disclosed on the Managers website www.giml.co.uk,where a proxy voting report for theFund over the last five years is also available.Environmental,Social and Governance FactorsGenesis meaningfully i
181、ntegrates ESG factors into the investment process as part of its ongoing qualitative judgement of acompanys sustainable competitive advantage.Genesis recognises that ESG factors can expose potential investment opportunitiesand risks,reflect the quality of management and impact a companys financial p
182、erformance.ESG factors are assessed in thecontext of materiality and particular attention is paid to the quality of company management and the alignment of interestswith minority investors.Borrowing FacilitiesThe Articles of Incorporation permit the Fund to borrow up to 10%of the value of its Net As
183、sets.No borrowing facilitywas used in either 2016 or 2015.Company SecretaryJP Morgan Administration Services(Guernsey)Limited has been in office for the whole year under review.Authority to Purchase Own SharesUnder Resolution 10 of the Annual General Meeting held on 29thOctober 2015,the shareholders
184、 authorised the Companyto purchase its own shares.This authority is limited to the maximum number of 20,200,000 Participating Preference Sharesof no par value(equivalent to approximately 14.9%of the issued share capital of the Company).This authority expires atthis years Annual General Meeting of th
185、e Company.The maximum price that may be paid for a Participating PreferenceShare will be the amount that is equal to 5%above the average of the middle market prices shown in quotations for aParticipating Preference Share in the London Stock Exchange Daily Official List for the five business days imm
186、ediatelypreceding the day on which that Participating Preference Share is purchased.Renewal of the Companys power to purchase its own shares will be sought at the Annual General Meeting on 8thNovember2016.In the event that the Company should purchase shares for cancellation,the Directors would only
187、do so afterconsideration of the effect on earnings per share and the longer term benefits for shareholders.Articles of IncorporationUnder Resolution 10,the Company purposes to adopt revised Articles of Incorporation.The proposed amendments relateto the removal of the restriction on holding Directors
188、 meetings in the UK and permission to circulate papers to shareholderselectronically.Other changes include the update to the aggregate Directors fees,as approved at the 2ndNovember 2012AGM,as well as the correction of a few typographical errors.A copy of the current Articles of Incorporation and the
189、proposed new Articles of Incorporation will be available for inspection during normal business hours at the Companysregistered office.The proposed changes to the Articles of Incorporation are also detailed on the Funds .22DIRECTORSREPORTCONTINUED19257 Genesis Annual Report 2016_Part 1:Layout 129/09/
190、201617:02Page 2223DIRECTORSREPORTCONTINUEDSTATEMENT OF DIRECTORS RESPONSIBILITIESThe Directors are responsible for preparing the financial statements for each financial year so that they give a true and fairview,in accordance with applicable Guernsey Law and International Financial Reporting Standar
191、ds as adopted by the EuropeanUnion,of the state of affairs of the Fund and of the profit or loss of the Fund for that year.In the preparation of these financial statements,the Directors are required to:select suitable accounting policies and then apply them consistently;make judgments and estimates
192、that are reasonable and prudent;ensure the financial statements are prepared on a going concern basis unless it is inappropriate to presume that the Fundwill continue in business;andstate whether applicable accounting standards have been followed subject to any material departures disclosed andexpla
193、ined in the financial statements.The Directors confirm that they have complied with the above requirements in preparing the financial statements.TheDirectors are responsible for ensuring that the Fund keeps proper accounting records which disclose with reasonable accuracyat any time the financial po
194、sition of the Fund and enable them to ensure that the financial statements comply with TheCompanies(Guernsey)Law,2008.They are also responsible for ensuring the safeguarding of the assets of the Fund andhence for taking reasonable steps for the prevention and detection of fraud and other irregularit
195、ies.Having taken all available information into consideration,the Board has concluded that the Annual Financial Report forthe year ended 30thJune 2016,taken as a whole,is fair,balanced and understandable and provides the information necessaryfor shareholders to assess the Funds performance,business
196、model and strategy.Auditors and disclosure of information to auditorsIn the case of each of the persons who are Directors at the time when the Report is approved,the following applies:so far as the Director is aware,there is no relevant audit information of which the Funds auditors are unaware;andth
197、ey have taken all steps that ought to have been taken as a Director in order to make themselves aware of any relevantaudit information and to establish that the Funds auditors are aware of that information.Compliance with disclosure and transparency directiveThe Directors confirm to the best of thei
198、r knowledge that:the financial statements are prepared in accordance with applicable accounting standards,give a true and fair view ofthe assets,liabilities,financial position and profit or loss of the Fund;andthis Annual Financial Report includes a fair review of the development and performance of
199、the business and the positionof the Fund,together with a description of the principal risks and uncertainties that exist.Signed on behalf of the BoardHlne PloixRussell Edey27thSeptember 201619257 Genesis Annual Report 2016_Part 1:Layout 129/09/201617:02Page 2324Investment EnvironmentThere was a star
200、k contrast between emerging market returns during the first and second half of the Funds financial year.Economic growth,corporate earnings,commodity prices and currencies were all generally weaker than most investors expectedin the latter part of 2015.However political and macroeconomic events such
201、as a delay to interest rate hikes in the US,the impeachment of Brazilian President Dilma Rousseff and China increasing fixed asset investment through leverage haveprompted a dramatic reversal of fortunes in 2016,through to the Funds year-end in June,and into the summer.In this volatileenvironment de
202、veloping stockmarkets,as measured by the MSCI Emerging Markets Index,rose 3.9%in sterling terms overthe financial year.The Funds net asset value performed better than the Index,gaining 8.7%.As we have noted in previous Reviews,emerging market companies have been through a significant boom period dri
203、ven byplentiful liquidity and ultra-low interest rates.Easy access to credit has led to an increase in consumption,and penetrationlevels of consumer products in many markets are higher than they used to be.The tailwinds leading up to the financial crisisin 2008 and stimulus measures afterwards have,
204、several years on,resulted in imbalances in many emerging markets.In orderto generate more sustainable growth going forward these countries need to go through a period of adjustment.We believe that the most significant risk facing emerging markets today is the potential economic instability in China,
205、whichis experiencing a structural slowdown with high financial leverage.The Chinese government is trying to achieve three thingsat the same time:engineer a soft landing,rebalance the economy from fixed asset investment to consumption,and reducefinancial leverage.We remain sceptical that all three ca
206、n be achieved at once.Credit is still running ahead of nominal GDPgrowth,rebalancing has been limited and crucially the economy has not reached a new equilibrium.This,combined witha lack of genuine economic reforms,means that the risk of a hard landing is increasing.That said,we are trying to mainta
207、inas constructive a view of China as possible from a more positive viewpoint it can be argued that since the governmentcontrols both assets and liabilities they have enough tools to control the situation.PerformanceThe Chinese market was one of the worst-performing over the year,and so its impact on
208、 the portfolio was the mostsignificant driver of relative performance from a country perspective.The Funds underweight position versus the benchmarkadded substantial value in the period,while avoiding state-owned financials including China Life Insurance(down 40%)andBank of China(down 23%),and ownin
209、g a variety of strongly performing holdings,including premium baijiu producer KweichowMoutai(up 39%)and e-commerce company Alibaba(up 14%),also helped.Further performance gains were made inThailandfor stock-specific reasons Thai Beverage(up 45%)experienced a turnaround in its beer business due to a
210、new managementteam and Central Pattana(up 44%)benefitted from a variety of government infrastructure investments.On the negative sidevalue was lost in Indonesia by being underweight in what was a strong market,and in Brazil where our holdings failed to keeppace with the recovery of the local market.
211、Value was added in a variety of sectors,particularly financials,consumer and IT,where one of the Funds largest holdings,TSMC,rose 35%.These gains were partially offset by losses in the materials sector,where Anglo Americans price falls in2015 were responsible for a loss of 20%over the last twelve mo
212、nths,despite its share price almost trebling so far in 2016.Looking at individual stocks,the major contributor was SABMiller,which rose by 31%after accepting a bid by rival brewerAB InBev to acquire the company.Further performance attribution data are given in the following tables.MANAGERSREVIEW1925
213、7 Genesis Annual Report 2016_Part 1:Layout 129/09/201617:02Page 2425Relative Performance Attribution in GBP 12 Months to June 2016GEMF vs.MSCI EM(TR)IndexTop 10 Stock Contributors%Top 10 Stock Detractors%SABMiller(South Africa)1.53Anglo American(South Africa)(1.10)Pidilite Industries(India)0.61Tence
214、nt(China)(0.80)Thai Beverage(Thailand)0.58First Quantum Minerals(Zambia)(0.64)Central Pattana(Thailand)0.55Tingyi(China)(0.62)Sberbank(Russia)0.50Anhui Conch Cement(China)(0.42)TSMC(Taiwan)0.48Tullow Oil(United Kingdom)(0.35)Bidvest(South Africa)0.44Gree Electric Appliances(China)(0.27)Big C(Thailan
215、d)0.41Mediatek(Taiwan)(0.26)China Life Insurance(China)0.36Guaranty Trust Bank(Nigeria)(0.25)Bank of China(China)0.35Naspers(South Africa)(0.21)Stocks in italics are omissions at end of periodSector%Top 5 Country Contributors%Top 5 Country Detractors%Financials3.95China3.09Zambia(0.64)Consumer Stapl
216、es1.56Thailand1.75Indonesia(0.58)IT1.41South Africa1.25Brazil(0.55)Industrials0.97India1.22Nigeria(0.50)Telecoms0.13Russia0.99Philippines(0.33)Utilities0.06Consumer Discretionary(0.01)Energy(0.10)Health Care(0.21)Materials(1.39)Source:FactSet treating Genesis affiliated investment companies on a loo
217、k-through basisPortfolio activityThe announcement last year of AB InBevs SABMiller acquisition prompted us to start exiting the position(which at thetime was the largest in the portfolio),with the vast majority sold before the UKs referendum on EU membership in orderto alleviate currency risk.Given
218、the size of the holding(5.8%at its peak),the concentration of the top 20 holdings hasdeclined from 43.4%at the start to the period to 41.5%at the end.The position was recycled into a variety of new andexisting holdings across a number of markets.Aside from South Africa(where SABMiller is based),Chin
219、a dominated theFunds trading activity,where market volatility allowed us to improve the quality of the Funds holdings,offering greaterprotection against a deteriorating macroeconomic environment.There were significant increases to pan-Asian insurer AIA,internet giant Alibaba and food and beverage pr
220、oducer Tingyi,while China Merchants Bank,AAC and Mindray exited theportfolio.New purchases in China included home appliance manufacturer Midea,and Jiangsu Hengrui,a genericspharmaceutical company specialising in oncology drugs.MANAGERSREVIEWCONTINUED19257 Genesis Annual Report 2016_Part 1:Layout 129
221、/09/201617:02Page 25In other markets,noteworthy new positions included food retailer Magnit(Russia),global brewer Heineken the majorityof whose revenues now come from emerging markets branded snack company Universal Robina(Philippines)and privatehospital operator Bangkok Dusit(Thailand).Notable sale
222、s activity included taking profits in Cognizant(India),reducingexposure to Brazilian banks Ita and Santander Brasil,and selling some of the Anglo American holding as its share pricerallied,whilst Ambuja Cements(India)and Big C(Thailand)exited the portfolio.At the end of the period the number of posi
223、tions in the Fund was 142,a net reduction of 20 over the year.This followeda decision by the Manager to focus on fewer holdings,allowing deeper analysis on each.The majority of these sales occurredin the second half of the financial year and most came from the tail of the Fund i.e.those with a weigh
224、t of less than25 basis points.OutlookStructurally,investors in emerging market equities have been facing substantial headwinds,such as lower commodity prices,the impact of Chinas lower growth,greater competition and weaker currencies.Amidst this lower-growth environment theprofitability of emerging
225、market companies has declined over the past few years.Despite this,valuations have largely heldup,particularly for higher quality companies which offer greater protection when the investment landscape is more challenging.However,of the difficult headwinds mentioned above,significant adjustments have
226、 already taken place in three of the four commodity prices,competition and currencies meaning that further downside in these areas is limited.As we have noted,Chinas orderly transition to a more sustainable growth strategy is,we believe,the key risk facing emerging markets investors.Should a soft la
227、nding play out in China,we could see the beginning of a new,more positive cycle in emerging markets.In the medium to long term we firmly believe that emerging markets are an attractive place to invest:the Funds high-qualitycompanies should be able to differentiate themselves from their competition a
228、nd do well,and key growth drivers such asrising consumption,financial penetration and infrastructure development are still in place.Genesis Asset Managers,LLPSeptember 2016MANAGERSREVIEWCONTINUED2619257 Genesis Annual Report 2016_Part 1:Layout 129/09/201617:02Page 2627Taiwan Semiconductor Manufactur
229、ing(Taiwan)5.18%InformationTechnologyTaiwan Semiconductor Manufacturing is the worlds largest dedicated semiconductor foundry manufacturing integratedcircuits for computer,communications,and consumer electronics applications.Samsung Electronics(South Korea)4.25%InformationTechnologySamsung Electroni
230、cs is a global leader in the IT hardware industry,producing handsets,semiconductors(mostlymemory),LCD panels and a wide range of consumer electronics and digital appliances.Genesis Smaller Companies SICAV(Luxembourg)2.83%Investment CompanyAn open-ended Luxembourg SICAV whose objective is to achieve
231、capital growth over the medium to long term throughinvestment in smaller emerging market companies.It held positions in 18 listed stocks as at 30thJune 2016.Samsung Fire&Marine Insurance(South Korea)2.67%FinancialsSamsung Fire&Marine Insurance is a multinational insurance company based in South Kore
232、a,with automobileinsurance prominent amongst its products.AIA Group(China)2.38%Life InsuranceAIA Group offers insurance and financial services.The company writes life insurance for individuals and businesses,accident and health insurance,retirement planning,and wealth management services.Axis Bank(I
233、ndia)2.16%FinancialsAxis Bank operates more than 3,000 domestic branches and is the third largest private sector bank with 2%marketshare.Novatek(Russia)2.04%EnergyNovatek is Russias second largest producer of natural gas,operating principally in western Siberia.TWENTYLARGESTHOLDINGSas at 30thJune 20
234、1619257 Genesis Annual Report 2016_Part 1:Layout 129/09/201617:02Page 2728Kotak Mahindra Bank(India)1.98%FinancialsKotak Mahindra Bank is one of the leading integrated financial services groups in India,with interests in retail banking,asset management,life insurance and investment banking.Sun Pharm
235、aceutical Industries(India)1.85%Health CareSun Pharmaceutical Industries is a specialty pharmaceutical company active in various high growth segments of theindustry.Central Pattana(Thailand)1.84%FinancialsCentral Pattana isThailands largest developer and operator of shopping malls,accounting for a q
236、uarter of Bankgoksretail market.Tata Consultancy Services(India)1.78%InformationTechnologyTata Consultancy Services,a subsidiary of theTata Group,is a global IT services organisation that provides acomprehensive range of IT services to its clients across a range of industries.Thai Beverage(Thailand)
237、1.74%Consumer StaplesThai Beverage isThailands largest beverage company,providing a wide range of branded beers,spirits and non-alcoholicbeverages.Pidilite Industries(India)1.64%MaterialsPidilite Industries is a market leader in consumer adhesives and sealants and also has a strong presence in const
238、ructionchemicals and art materials.Sberbank(Russia)1.63%FinancialsSberbank is the largest bank in Russia,accounting for almost 30%of aggregate banking assets.TWENTYLARGESTHOLDINGSCONTINUED19257 Genesis Annual Report 2016_Part 1:Layout 129/09/201617:02Page 2829Shinhan Financial Group(South Korea)1.56
239、%FinancialsShinhan Financial Group is a holding company that offers a full range of financial services to retail and corporatecustomers in South Korea through its subsidiaries,which include one of the largest banks in the country.Universal Robina(Philippines)1.52%Consumer StaplesUniversal Robina is
240、the dominant producer of branded snacks in the Philippines,with a growing presence in otherpackaged food categories.Infosys(India)1.52%InformationTechnologyInfosys provides IT consulting and software services,including e-business,program management and supply chainsolutions.The companys services inc
241、lude application development,product codevelopment,and system implementationand system engineering.Grupo Financiero Banorte(Mexico)1.47%FinancialsGrupo Financiero Banorte is a company offering banking services,premium banking,wholesale banking,leasing andfactoring,warehousing,insurance,pensions and
242、retirement savings.Anhui Conch Cement(China)1.39%MaterialsAnhui Conch Cement is the largest and most efficient cement producer in China.It has a national presence and is anindustry consolidator.Lupin(India)1.39%Health CareLupin is a pharmaceutical company which is a key player in developing therapie
243、s for cardiovascular disease,diabetesand asthma.TWENTYLARGESTHOLDINGSCONTINUED19257 Genesis Annual Report 2016_Part 1:Layout 129/09/201617:02Page 2930COUNTRYEXPOSURE OF THEPORTFOLIO*JuneJuneJuneCountry201620152014%China16.3016.4210.89India14.7514.6313.03South Korea9.859.439.04Russia6.865.736.99Thail
244、and6.575.155.36Taiwan6.205.356.98South Africa5.7210.5911.35Brazil4.325.786.22Mexico4.113.854.54Turkey2.953.123.03United Kingdom2.702.582.79Philippines2.150.950.61Nigeria1.311.862.25Peru1.221.030.45Switzerland1.18Poland1.140.320.29Vietnam1.080.410.29Netherlands0.98Zambia0.921.582.92Kenya0.910.650.16A
245、rgentina0.660.580.62Saudi Arabia0.621.031.04Romania0.620.600.58Mauritius0.570.600.53Colombia0.450.510.75Indonesia0.440.722.06Chile0.440.330.65Egypt0.421.021.17Hungary0.410.510.22Malaysia0.400.991.08Senegal0.320.300.29Jordan0.30Morocco0.250.09Ghana0.230.320.22Greece0.220.240.62Tunisia0.200.21Lebanon0
246、.140.130.10Zimbabwe0.070.170.20Ukraine0.040.130.16Sri Lanka0.040.050.04Austria0.320.42Estonia0.150.16Mongolia0.080.04Tanzania0.080.05Mozambique0.02Croatia0.01Net current assets1.941.411.78Total100.00100.00100.00*Treating Genesis Smaller Companies SICAV on a look-through basis.19257 Genesis Annual Re
247、port 2016_Part 1:Layout 129/09/201617:02Page 3031SECTOREXPOSURE OF THEPORTFOLIO*IndustryJuneJuneJune201620152014%Financials29.4730.5229.03Consumer Staples21.7619.1816.21Information Technology17.7216.2816.21Materials7.3312.4914.83Health Care6.674.774.62Consumer Discretionary3.923.093.10Energy3.904.71
248、6.10Telecommunications3.612.182.50Industrials1.723.423.91Investment Companies1.481.551.47Utilities0.480.400.24Net current assets1.941.411.78Total100.00100.00100.00*Treating Genesis Smaller Companies SICAV on a look-through basis.19257 Genesis Annual Report 2016_Part 1:Layout 129/09/201617:02Page 313
249、2FairProportionValueof Fund$000(%)ARGENTINA(2015 0.30%)Ternium ADR3,9940.36BRAZIL(2015 5.58%)Banco Santander Brasil ADR3,9390.35BTG Pactual(Preferred)2,6170.23Grupo Po de Acar ADR1,4680.13Grupo Po de Acar(Preferred)4,0720.36Ita Unibanco Holding ADR5,0950.45Ita Unibanco Holding(Preferred)2,5160.22Ita
250、sa Investimentos Ita(Preferred)4,1360.37Linx2,2210.20OdontoPrev4,1110.37Rumo Logistica3,7770.34TOTVS1,5880.14Tractebel Energia5,3300.48Ultrapar Participaes ADR8390.08Ultrapar Participaes(Preferred)4,8740.4346,5834.15CHILE(2015 0.33%)Embotelladora Andina A ADR2240.02Embotelladora Andina A(Preferred)2
251、,1020.19Embotelladora Andina B ADR420.00Embotelladora Andina B(Preferred)2,5490.234,9170.44CHINA(2015 16.42%)AIA Group26,7002.38Alibaba Group ADR9,3020.83Anhui Conch Cement A6,7560.60Anhui Conch Cement H8,8980.79ASM Pacific Technology4,4760.40China Foods1,0470.09China Mengniu Dairy9,3740.84China Mob
252、ile9,7670.87China Overseas Land&Investment12,3321.10China Resources Beer4,8960.44Fuyao Glass2,9830.27Gree Electrical A5,5660.50Industrial&Commercial Bank of China15,3751.37Jiangsu Hengrui Medicine A5,4990.49Jiangsu Yanghe Brewery A11,8411.06THEPORTFOLIOas at 30thJune 201619257 Genesis Annual Report
253、2016_Part 1:Layout 129/09/201617:02Page 3233FairProportionValueof Fund$000(%)CHINA(continued)Kweichow Moutai A13,3621.19Longfor Properties4,2350.38Midea A4,4890.40Qinhuangdao Port9260.08Tingyi9,2340.82Tsingtao Brewery3,8760.35West China Cement9510.08WH Group10,8540.97182,73916.30COLOMBIA(2015 0.52%)
254、Bancolombia3,1090.28Bancolombia ADR1,5310.13Bancolombia(Preferred)4120.045,0520.45EGYPT(2015 0.83%)Arabian Food Industries3460.03Edita Food Industries2,8370.253,1830.28GHANA(2015 0.29%)Kosmos Energy2,2640.20GREECE(2015 0.25%)OPAP2,4190.22HUNGARY(2015 0.50%)OTP Bank4,6490.41INDIA(2015 14.63%)Axis Ban
255、k24,1692.16Cognizant Technology Solutions14,3611.28Dabur India3,9620.35HDFC Bank4,0010.36Hero Motocorp4,9560.44Infosys11,0930.99Infosys ADR5,9840.53Kotak Mahindra Bank22,1721.98Lupin15,5911.39Pidilite Industries18,4111.64Sun Pharmaceutical Industries20,7901.85Tata Consultancy Services19,9071.78165,3
256、9714.75THEPORTFOLIOCONTINUED19257 Genesis Annual Report 2016_Part 1:Layout 129/09/201617:02Page 33THEPORTFOLIOCONTINUED34FairProportionValueof Fund$000(%)INDONESIA(2015 0.51%)Semen Indonesia Persero3,2080.29JORDAN(2015 0.00%)Hikma Pharmaceuticals3,4080.30KENYA(2015 0.39%)Equity Bank4,4710.40Safarico
257、m2,2660.206,7370.60LUXEMBOURG(2015 3.74%)Genesis Smaller Companies SICAV*31,7872.83MALAYSIA(2015 0.99%)7-Eleven Malaysia Holdings1,0770.10Westports Holdings3,3350.304,4120.40MAURITIUS(2015 0.60%)ECP Africa Fund II*6,3630.57MEXICO(2015 3.63%)Amrica Mvil5,4880.49Amrica Mvil ADR4,9030.44Corp Moctezuma1
258、,6360.14First Cash Financial Services5,0910.45Gentera5260.05Grupo Financiero Banorte16,4781.47Grupo Financiero Inbursa3,7200.33Megacable Holdings5,8350.52Telesites1,4340.13Torex Gold Resources1,0260.0946,1374.11MOROCCO(2015 0.09%)Attijariwafa Bank2,7670.25NETHERLANDS(2015 0.00%)Heineken6,7100.60Hein
259、eken Holding4,3050.3811,0150.9819257 Genesis Annual Report 2016_Part 1:Layout 129/09/201617:02Page 3435THEPORTFOLIOCONTINUEDFairProportionValueof Fund$000(%)NIGERIA(2015 1.86%)First City Monument Bank4060.04Guaranty Trust Bank4,3480.39Guaranty Trust Bank GDR2,8070.25Nestle Nigeria2,0910.19Nigerian B
260、reweries4,5430.40United Bank for Africa5140.0414,7091.31PERU(2015 0.94%)Credicorp13,7201.22PHILIPPINES(2015 0.25%)Bank of Philippine Islands2,7510.25International Container Terminal Services1000.01Universal Robina17,0831.5219,9341.78POLAND(2015 0.32%)Alior Bank3,8270.34Jeronimo Martins8,9160.8012,74
261、31.14ROMANIA(2015 0.60%)NCH Balkan Fund*6,9340.62RUSSIA(2015 5.65%)Alrosa9,9970.89FESCO1950.02Global Ports Investments GDR Reg S7240.07Lenta GDR1,5740.14Magnit15,3491.37Moscow Exchange2,9340.26Novatek GDR Reg S22,8922.04Novolipetsk Steel GDR Reg S2,7790.25QIWI ADR6630.06Sberbank18,3121.63X5 Retail G
262、roup GDR Reg S1,5000.1376,9196.8619257 Genesis Annual Report 2016_Part 1:Layout 129/09/201617:02Page 35THEPORTFOLIOCONTINUED36FairProportionValueof Fund$000(%)SAUDI ARABIA(2015 1.02%)Almarai Deutsche Bank Participatory notematuring 13thSeptember 20161,4440.13Almarai HSBC Bank Participatory notematur
263、ing 31stJuly 20174,0250.36Saudi British Bank HSBC Bank Participatorynote maturing 22ndJanuary 20181,4520.136,9210.62SOUTH AFRICA(2015 10.44%)Anglo American9,6640.86Anglo American(London Listing)4,0010.36Aspen Pharmacare14,7521.32Bid Corp13,4931.20Bidvest Group6,4470.58Capevin Holdings4240.04Discover
264、y2,9970.27Distell Group1,9750.18Pick n Pay Holdings3810.03Pick n Pay Stores4,4130.39Platinum Group Metals1620.01Standard Bank4,8700.4363,5795.67SOUTH KOREA(2015 9.21%)E-Mart2,8100.25Naver Corp7,0330.63Samsung Electronics(Ordinary)29,8272.66Samsung Electronics(Preferred)17,8251.59Samsung Fire&Marine
265、Insurance(Ordinary)29,6132.64Samsung Fire&Marine Insurance(Preferred)3920.03Samsung SDI3,0320.27Shinhan Financial Group17,4731.56108,0059.63SWITZERLAND(2015 0.00%)Richemont13,2151.18TAIWAN(2015 5.35%)MediaTek11,4811.02Taiwan Semiconductor Manufacturing58,0405.1869,5216.2019257 Genesis Annual Report
266、2016_Part 1:Layout 129/09/201617:02Page 3637THEPORTFOLIOCONTINUEDFairProportionValueof Fund$000(%)THAILAND(2015 5.14%)Bangkok Dusit Medical Services(Foreign)10,6950.95Central Pattana(Foreign)20,5961.84CPAll(Foreign)11,1701.00Kasikornbank(Foreign)7,3250.65Robinson Department Store(Foreign)4,3500.39Th
267、ai Beverage19,5261.7473,6626.57TUNISIA(2015 0.21%)Societe de Fabrication des Boissons de Tunisie2,2290.20TURKEY(2015 2.91%)Anadolu Efes Biracilik7,1900.64Coca-Cola Icecek1,2460.11Turkiye Garanti Bankasi15,0021.34Ulker Biskuvi Sanayi4,2320.38Yapi ve Kredi Bankasi3,7630.3331,4332.80UNITED KINGDOM(2015
268、 2.58%)Coca-Cola Hellenic Bottling10,5740.94Liberty Global A4280.04Liberty Global C1,0820.10Liberty Global LiLAC A4,1670.37Liberty Global LiLAC C3,4900.31Tullow Oil10,5240.9430,2652.70VIETNAM(2015 0.31%)Mekong Enterprise Fund II*3,2500.29Vietnam Dairy Products4,4070.397,6570.68ZAMBIA(2015 1.58%)Firs
269、t Quantum Minerals10,2750.92ZIMBABWE(2015 0.17%)Delta Corp8150.07TOTAL INVESTMENTS1,099,56798.06Net current assets21,7511.94TOTAL NET ASSETS1,121,318100.0019257 Genesis Annual Report 2016_Part 1:Layout 129/09/201617:02Page 3738THEPORTFOLIOCONTINUED*Unquoted securities,not traded on an official Stock
270、 Exchange or other RegulatedMarket.Treating Genesis Smaller Companies SICAV on a non-look-through basis.Investee Funds.The Funds investments in non-affiliated investment companies.ADRAmerican Depositary Receipt.A negotiable certificate issued by a U.S.bankrepresenting a specific number of shares of
271、a foreign stock traded on a U.S.stockexchange.ADSAmerican Depository Share.The share issued under an American DepositoryReceipt agreement which is actually traded.GDRGlobal Depositary Receipt.A negotiable certificate held in the bank of onecountry representing a specific number of shares of a stock
272、traded on an exchangeof another country.NVDRNon-Voting Depositary Receipt.Reg SSecurity restricted from sale in the US under Regulation S of the Securities Act1933.These securities may be resold to investors outside of the US.19257 Genesis Annual Report 2016_Part 1:Layout 129/09/201617:02Page 3839Re
273、port on the Financial StatementsWe have audited the accompanying financial statements of Genesis Emerging Markets Fund Limited(“the Fund”)which comprise the Statement of Financial Position as of 30thJune 2016 and the Statement of Comprehensive Income,the Statement of Changes in Equity and the Statem
274、ent of Cash Flows for the year then ended and a summary ofsignificant accounting policies and other explanatory information.Directors Responsibility for the Financial StatementsThe Directors are responsible for the preparation of financial statements that give a true and fair view in accordancewith
275、International Financial Reporting Standards as adopted by the European Union and with the requirements ofGuernsey law.The Directors are also responsible for such internal control as they determine is necessary to enable thepreparation of financial statements that are free from material misstatement,
276、whether due to fraud or error.Auditors ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit.We conducted our auditin accordance with International Standards on Auditing.Those Standards require that we comply with ethicalrequirements and plan and
277、perform the audit to obtain reasonable assurance whether the financial statements are freefrom material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financialstatements.The procedures selected depend on the auditors judgement,
278、including the assessment of the risks of materialmisstatement of the financial statements,whether due to fraud or error.In making those risk assessments,the auditorconsiders internal control relevant to the entitys preparation and fair presentation of the financial statements in orderto design audit
279、 procedures that are appropriate in the circumstances,but not for the purpose of expressing an opinionon the effectiveness of the entitys internal control.An audit also includes evaluating the appropriateness of accountingpolicies used and the reasonableness of accounting estimates made by the direc
280、tors,as well as evaluating the overallpresentation of the financial statements.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.OpinionIn our opinion,the financial statements give a true and fair view of the financial position
281、 of the Fund as of 30thJune2016,and of its financial performance and its cash flows for the year then ended in accordance with InternationalFinancial Reporting Standards as adopted by the European Union and have been properly prepared in accordance withthe requirements of The Companies(Guernsey)Law,
282、2008.Report on other Legal and Regulatory RequirementsWe read the other information contained in the Annual Report and consider the implications for our report if webecome aware of any apparent misstatements or material inconsistencies with the financial statements.The otherinformation is as listed
283、on the contents page.In our opinion the information given in the directors report is consistent with the financial statements.INDEPENDENTAUDITORSREPORTTO THEMEMBERS OFGENESISEMERGINGMARKETSFUNDLIMITED19257 Genesis Annual Report 2016_Part 2:Layout 129/09/201617:04Page 39This report,including the opin
284、ion,has been prepared for and only for the Funds members as a body in accordancewith Section 262 of The Companies(Guernsey)Law,2008 and for no other purpose.We do not,in giving this opinion,accept or assume responsibility for any other purpose or to any other person to whom this report is shown or i
285、ntowhose hands it may come save where expressly agreed by our prior consent in writing.Matters on which we are required to report by exceptionWe have nothing to report in respect of the following matters which we are required to review under the Listing Rules:the directors statement,set out on page
286、20,in relation to going concern.As noted in the directors statement,thedirectors have concluded that it is appropriate to adopt the going concern basis in preparing the financial statements.The going concern basis presumes that the Fund has adequate resources to remain in operation,and that the dire
287、ctorsintend it to do so,for at least one year from the date the financial statements were signed.As part of our auditwe have concluded that the directors use of the going concern basis is appropriate.However,because not all futureevents or conditions can be predicted,these statements are not a guara
288、ntee as to the Funds ability to continue asa going concern;the directors statement that they have carried out a robust assessment of the principal risks facing the Fund andthe directors statement in relation to the longer-term viability of the Fund.Our review was substantially less inscope than an a
289、udit and only consisted of making inquiries and considering the directors process supporting theirstatements;checking that the statements are in alignment with the relevant provisions of the UK CorporateGovernance Code;and considering whether the statements are consistent with the knowledge acquired
290、 by us in thecourse of performing our audit;andthe part of the corporate governance statement relating to the Funds compliance with the ten further provisionsof the UK Corporate Governance Code specified for our review.Evelyn BradyFor and on behalf of PricewaterhouseCoopers CI LLPChartered Accountan
291、ts and Recognised AuditorGuernsey,Channel Islands27thSeptember 2016INDEPENDENTAUDITORSREPORTTO THEMEMBERS OFGENESISEMERGINGMARKETSFUNDLIMITEDCONTINUED4019257 Genesis Annual Report 2016_Part 2:Layout 129/09/201617:04Page 4041STATEMENT OFFINANCIALPOSITIONAS AT 30THJUNE 201620162015Note$000$000ASSETSCu
292、rrent assets2(b),10Financial assets at fair value through profit or loss1,099,5671,196,2642(g)Amounts due from brokers4,2612312(d)Dividends receivable4,0014,170Other receivables and prepayments2042082(f)Cash and cash equivalents20,24523,729TOTAL ASSETS1,128,2781,224,602LIABILITIESCurrent Liabilities
293、2(j)Capital gains tax payable1412172(g)Amounts due to brokers4,9418,9927Payables and accrued expenses1,8782,079TOTAL LIABILITIES6,96011,288TOTAL NET ASSETS1,121,3181,213,314EQUITY4Share premium134,349134,3496Capital reserve946,9721,045,055Revenue account39,99733,910TOTAL EQUITY1,121,3181,213,314NET
294、ASSET VALUE PER PARTICIPATINGPREFERENCE SHARE*$8.31$8.99*Calculated on an average number of134,963,060 Participating Preference Shares outstanding(2015:134,963,060).Signed on behalf of the Board ofGenesis Emerging Markets Fund LimitedHlne PloixRussell Edey27thSeptember 2016The notes on pages 45 to 6
295、8 form part of these financial statements19257 Genesis Annual Report 2016_Part 2:Layout 129/09/201617:04Page 4142STATEMENT OFCOMPREHENSIVEINCOMEFOR THE YEAR ENDED 30THJUNE 201620162015Note$000$000INCOME2(b),10Net change in financial assets at fair valuethrough profit or loss(98,311)(126,208)2(c)Net
296、exchange gains2281,3382(d)Dividend income25,08628,426Miscellaneous income103(72,987)(96,441)EXPENSES9(a)Management fees(13,124)(17,442)9(c)Custodian fees(910)(924)11Transaction costs(1,269)(1,836)9(e)Directors fees and expenses(463)(570)9(b)Administration fees(259)(289)Legal and professional fees(84
297、)(22)Audit fees(52)(81)Other expenses(223)184TOTAL OPERATING EXPENSES(16,384)(21,348)OPERATING LOSS(89,371)(117,789)FINANCE COSTSBank charges(1)TOTAL FINANCE COSTS(1)2(j),8Capital gains tax(29)502(j)8Withholding taxes(2,595)(2,966)(2,624)(2,916)LOSS AFTER TAX FOR THE YEARATTRIBUTABLE TO PARTICIPATIN
298、GPREFERENCE SHARES(91,996)(120,705)TOTAL COMPREHENSIVE LOSS(91,996)(120,705)5LOSS PER PARTICIPATINGPREFERENCE SHARE*$(0.68)$(0.89)*Calculated on an average number of134,963,060 Participating Preference Shares outstanding(2015:134,963,060).The notes on pages 45 to 68 form part of these financial stat
299、ements19257 Genesis Annual Report 2016_Part 2:Layout 129/09/201617:04Page 4243STATEMENT OFCHANGES INEQUITYFOR THE YEAR ENDED 30THJUNE 20162016ShareCapitalRevenuePremiumReserveAccountTotal$000$000$000$000Balance at the beginning of the year134,3491,045,05533,9101,213,314Total Comprehensive Loss(91,99
300、6)(91,996)Transfer from Capital Reserves*(98,083)98,083Balance at the end of the year134,349946,97239,9971,121,3182015ShareCapitalRevenuePremiumReserveAccountTotal$000$000$000$000Balance at the beginning of the year134,3491,169,92529,7451,334,019Total Comprehensive Loss(120,705)(120,705)Transfer fro
301、m Capital Reserves*(124,870)124,870Balance at the end of the year134,3491,045,05533,9101,213,314*Calculated by summing the Net change in financial assets at fair value through profit or loss and Net exchangegains in the Statement of Comprehensive Income.The notes on pages 45 to 68 form part of these
302、 financial statements19257 Genesis Annual Report 2016_Part 2:Layout 129/09/201617:04Page 4344STATEMENT OFCASHFLOWSFOR THE YEAR ENDED 30THJUNE 201620162015$000$000OPERATING ACTIVITIESDividends received25,26525,685Taxation paid(2,700)(2,966)Purchase of investments(309,415)(268,571)Proceeds from sale o
303、f investments299,720272,451Interest received(1)Operating expenses paid(16,581)(21,624)NET CASH(OUTFLOW)/INFLOW FROMOPERATING ACTIVITIES(3,712)4,975Effect of exchange gains on cash and cash equivalents2281,338NET(DECREASE)/INCREASE IN CASH ANDCASH EQUIVALENTS(3,484)6,313Net cash and cash equivalents
304、at thebeginning of the year23,72917,416NET CASH AND CASH EQUIVALENTS ATTHE END OF THE YEAR20,24523,729Comprising:Cash and cash equivalents20,24523,729The notes on pages 45 to 68 form part of these financial statements19257 Genesis Annual Report 2016_Part 2:Layout 129/09/201617:04Page 4445Genesis Eme
305、rging Markets Fund Limited(the Fund)was incorporated in Guernsey on7thJune 1989 and commenced activities on 19thSeptember 1989.The Fund is an AuthorisedClosed-Ended Investment Scheme as defined by the Authorised Closed-Ended InvestmentSchemes Rules(2008)(and,as such,is subject to ongoing supervision
306、 by the GuernseyFinancial Services Commission).The Fund is listed on the London Stock Exchange and isa constituent of the FTSE 250 Index.The Funds registered office is 1stFloor,Les Echelons Court,Les Echelons,South Esplanade,St.Peter Port,Guernsey,GY1 6JB,Channel Islands.(a)Basis of PreparationThe p
307、rincipal accounting policies applied in the preparation of these financial statements ona going concern basis are set out below.These policies have been consistently applied to allyears presented,unless otherwise stated.The financial statements have been prepared in accordance with International Fin
308、ancialReporting Standards as adopted by the European Union(IFRS)and interpretations by theInternational Financial Reporting Interpretations Committee of the International AccountingStandards Board.The financial statements have been prepared under the historical cost convention,as modifiedby the reva
309、luation of financial assets and financial liabilities at fair value through profit orloss.The preparation of financial statements in conformity with IFRS may require managementto make critical accounting judgements,estimates and assumptions that affect the applicationof policies and the reported amo
310、unts of assets and liabilities,income and expense.Theestimates and associated assumptions about the future which are made by managementrelating to unlisted securities,are made using models generally recognised as standard withinthe industry and inputs are based on the historical experience and vario
311、us other factors thatare believed to be reasonable under the circumstances,the results of which form the basisof making the judgements about the carrying value of assets and liabilities that are not readilyapparent from other sources.Actual results may differ from these estimates.Valuations use obse
312、rvable data to the extent practicable.Changes in any assumptions couldaffect the reported fair value of the financial instruments.The determination of whatconstitutes observable requires significant judgement by the Board.The Board considersobservable data to be market data that is readily available
313、,regularly distributed or updated,reliable and verifiable,not proprietary,and provided by independent sources that are activelyinvolved in the relevant market.2.SUMMARY OFSIGNIFICANTACCOUNTINGPOLICIES1.GENERALNOTES TO THEFINANCIALSTATEMENTSFOR THE YEAR ENDED 30THJUNE 201619257 Genesis Annual Report
314、2016_Part 2:Layout 129/09/201617:04Page 4546NOTES TO THEFINANCIALSTATEMENTSCONTINUED(a)Basis of Preparation(continued)New standards,amendments and interpretations effective from 1stJuly 2015No new standards were effective or adopted by the Fund during the year having an impacton the financial statem
315、ents.New standards,amendments and interpretations issued but not yet effectiveThe following standards and interpretations have been issued and are expected to be relevantto the Fund in future periods,with effective dates on or after 1stJuly 2016:Amendments to IAS 27,Separate financial statements(eff
316、ective 1stJanuary 2016).Amendments to IFRS 10,IFRS 12 and IAS 28,Investment Entities:Applying theConsolidation Exception(effective 1stJanuary 2016).Amendments to IAS 1,Disclosure Initiative(effective 1stJanuary 2016).Annual improvements 2014(effective 1stJanuary 2016).Amendments to IAS 27,Equity Met
317、hod in Separate Financial Statements(effective1stJanuary 2017).IFRS 9,Financial Instruments(effective 1stJanuary 2018)The Directors are currently reviewing these standards with a view to implementation on theireffective date,however they do not believe their adoption will have a significant impact o
318、nthe financial statements.Early adoption of standardsThe Fund did not early adopt any new or amended standards/interpretations for the yearended 30thJune 2016.(b)Financial InstrumentsClassificationThe Fund has designated all of its investments as at fair value through profit or loss.Thiscategory com
319、prises financial instruments designated at fair value through profit or loss uponinitial recognition and includes financial assets that are not held for trading purposes andwhich may be sold.These investments are managed and their performance is evaluated on afair value basis in accordance with the
320、Funds documented investment strategy.The investmentsof the Fund are principally in listed equities.Loans and receivables are non-derivative financial assets with fixed or determinable paymentsthat are not quoted in an active market.The Fund includes in this category cash and cashequivalents,due from
321、 brokers and other short term receivables.2.SUMMARY OFSIGNIFICANTACCOUNTINGPOLICIES(CONTINUED)19257 Genesis Annual Report 2016_Part 2:Layout 129/09/201617:04Page 46(b)Financial Instruments(continued)Other financial liabilities include all financial liabilities,other than those classified as heldfor
322、trading.The Fund includes in this category bank overdraft,due to brokers and other shortterm liabilities.Recognition/derecognitionThe Fund recognises a financial asset or a financial liability when,and only when,it becomesa party to the contractual provisions of the instrument.Regular-way purchases
323、and sales of investments are recognised on their trade date,the dateon which the Fund commits to purchase or sell the investment.Investments are derecognisedwhen the rights to cash flows from the investments have expired or the Fund has transferredsubstantially all risks and rewards of ownership.The
324、 Fund derecognises a financial liability when the obligation under the liability isdischarged,cancelled or expires.MeasurementFinancial assets and financial liabilities at fair value through profit or loss are measured initiallyat fair value being the transaction price.Transaction costs incurred to
325、acquire financial assetsat fair value through profit or loss are expensed in the Statement of Comprehensive Income.Transaction costs include fees and commissions paid to agents,advisers,brokers and dealers.Subsequent to initial recognition,all financial assets and financial liabilities at fair value
326、 throughprofit or loss are measured at fair value.Gains and losses arising from changes in the fair valueof the financial assets or financial liabilities at fair value through profit or loss category arepresented in the Statement of Comprehensive Income in the year in which the arise.Loans and recei
327、vables and financial liabilities are measured initially at their fair value plusany directly attributable incremental costs of acquisition or issue.Fair value measurementFair value is the amount by which an asset could be exchanged,or a liability settled,betweenknowledgeable willing parties in an ar
328、ms length transaction.Securities listed on active markets are valued based on their last traded price for valuationand financial statement purposes.Positions held in the affiliated investment company,GenesisSmaller Companies SICAV(open-ended and listed but not traded),are valued at their fairvalue a
329、t the reporting end date.2.SUMMARY OFSIGNIFICANTACCOUNTINGPOLICIES(CONTINUED)47NOTES TO THEFINANCIALSTATEMENTSCONTINUED19257 Genesis Annual Report 2016_Part 2:Layout 129/09/201617:04Page 47(b)Financial Instruments(continued)In the normal course of business,the Fund utilises Participatory notes(P Not
330、es)to gainaccess to markets that otherwise would not be allowable as a foreign investor.P Notes areissued by banks or broker-dealers and allow the Fund to gain exposure to local shares inforeign markets.They are valued based on the last price of the underlying equity at thevaluation date.The Funds i
331、nvestment in other Funds(Investee Funds)are subject to the terms andconditions of the respective Investee Funds offering documentation.The investments inInvestee Funds are primarily valued based on the latest available redemption price for suchunits in each Investee Fund,as determined by the Investe
332、e Funds administrators.The Fundreviews the details of the reported information obtained for the Investee Funds and considersthe liquidity of the Investee Fund or its underlying investments,the value date of the netasset value provided,any restrictions on redemptions and the basis of the Investee Fun
333、dsaccounting.If necessary,the Fund makes adjustments to the net asset value of the InvesteeFunds to obtain the best estimate of fair value.Private placements are not registered for public sale and,excluding Genesis affiliatedinvestment companies,are carried at an estimated fair value at the end of the year,asdetermined in good faith by theValuation Committee of the Manager,in consultation withthe
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