1、EMERGING MARKETS FUND LIMITED2017Annual Financial Reportfor the year ended 30th June 2017|1Genesis Emerging Markets Fund L Contents Strategic Report Governance Report Portfolio Report Financial StatementsNOTE:All reference to US dollars or$throughout this report are to the United States currency.Tab
2、le of ContentsIntroduction.2Strategic ReportHighlights and Performance.4Chairmans Statement.6Strategy,Business Model and Principal Risks.10Governance ReportBoard of Directors.16Directors Report.18Directors Remuneration Report.23Audit and Risk Committees Report.25Nomination Committees Report.28Statem
3、ent of Directors Responsibilities.29Portfolio ReportManagers Review.32Country and Sector Exposure of the Portfolio.35Twenty Largest Holdings.36The Portfolio.39Financial StatementsIndependent Auditors Report.48Statement of Financial Position.52Statement of Comprehensive Income.53Statement of Changes
4、in Equity.54Statement of Cash Flows.55Notes to the Financial Statements.56Administration.76Notice of MGenesis Emerging Markets Fund Limited2|Contents Strategic Report Governance Report Portfolio Report Financial StatementsIntroductionObjectiveThe objective of the Genesis Emerging Markets Fund(the Fu
5、nd or GEMF)is to achieve long-term capital growth,primarily through investment in equity markets of developing countries.StructureGEMF is a Guernsey based Authorised Closed-Ended Investment Scheme with the ability to issue additional shares.The Funds shares are listed on the premium segment of the O
6、fficial List of the UK Listing Authority,traded on the London Stock Exchange and are included in the FTSE 250.The number of Participating Preference Shares outstanding is 134,963,060 as at 30th June 2017(30th June 2016:134,963,060).ManagerGenesis Asset Managers,LLP(the Manager or Genesis).Investment
7、 ApproachThe investment approach is to identify companies which are able to take advantage of growth opportunities in emerging markets and invest in them when they are trading at an attractive discount to the Managers assessment of their intrinsic value.New SharesShares may be issued twice monthly s
8、ubject 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 price at which new shares w
9、ould be issued;andiii)the issued share capital of the Fund is not increased by more than 10%in any twelve-month period.|3Genesis Emerging Markets Fund L Contents Strategic Report Governance Report Portfolio Report Financial StatementsStrategic RGenesis Emerging Markets Fund Limited4|Contents Strateg
10、ic Report Governance Report Portfolio Report Financial StatementsHighlights and Performance 30th June 201730th June 2016%changePublished net asset value1,011.6m838.7m20.6Published net asset value$1,314.2m$1,121.3m17.2Published net asset value per Participating Preference Share 7.50 6.21 20.6Publishe
11、d net asset value per Participating Preference Share$9.74$8.3117.2Share price 6.53 5.40 20.8Discount12.9%13.1%Ongoing charges ratio*1.43%1.44%Countries represented in portfolio3640Number of holdings125142*Expected to drop to 1.13%next year due to the reduction in management fees(refer to page 7 in t
12、he Chairmans Statement).Year to 30th June 2017Year to 30th June 2016LowHighLowHighShare price 5.45 6.72 4.01 5.40 Net asset value 6.31 7.69 4.67 6.21 Discount9.6%14.3%7.3%15.1%Annualised Returns in GBP to 30th June 201720.86.36.77.611.320.69.07.97.911.927.811.28.36.810.10.0 5.0 10.0 15.0 20.0 25.0 3
13、0.0 1 Year3 Years5 Years10 YearsSince Inceptionof Fund(6th July 1989)%ChangeGEMF Share PriceGEMF NAV(net of annual fees)MSCI EM(TR)Since Incep?on of Fund(6th July 1989)MSCI Emerging Markets(Total Return)Index Past performance is no guarantee of future performance.|5Genesis Emerging Markets Fund L Co
14、ntents Strategic Report Governance Report Portfolio Report Financial StatementsPerformance last 5 Years*Value(rebased to 100 on 29th June 2012)80.090.0100.0110.0120.0130.0140.0150.029.06.1228.06.1330.06.1430.06.1530.06.1630.06.17Fund N.A.V.MSCI EM(TR)146.0138.1149.3Market PriceDiscount to NAV last 5
15、 Years*(16.0)%(14.0)%(12.0)%(10.0)%(8.0)%(6.0)%(4.0)%(2.0)%0.0%2.0%29.06.1228.06.1330.06.1430.06.1530.06.1630.06.17Average(9.0)%(12.9)%*Based on month-end Net Asset VGenesis Emerging Markets Fund Limited6|Contents Strategic Report Governance Report Portfolio Report Financial StatementsChairmans Stat
16、ementI have pleasure in presenting to shareholders the twenty-eighth Annual Report of the Genesis Emerging Markets Fund Limited,for the twelve-month period ending 30th June 2017.PerformanceThe last twelve months have been a rewarding period for emerging markets investors.Improving investor sentiment
17、 on the outlook for the Chinese economy and a global wave of enthusiasm for internet and technology stocks combined to drive the MSCI EM(TR)Index up by 25.3%in US dollar terms.For UK investors,the index return was higher still,at 27.8%,as sterling weakened slightly against the US dollar over the per
18、iod.Against this performance backdrop,the Funds net asset value per share(NAV)increased from 621.4p to 749.6p,representing a return of 20.6%for shareholders.The Funds share price rose by 20.8%.Shareholders will be aware that the Funds portfolio contains stocks which the Manager considers to be high-
19、quality,and feels are priced attractively.Consequently,during times when emerging stockmarkets appreciate very rapidly,and are driven by a narrow sector of the market,the Funds performance is likely to lag that of the index in the short term.The relative underperformance we have seen over the past y
20、ear has partly been a consequence of the Funds underweight to Chinese internet stocks in particular;a position that reflects the stretched nature of the current valuations of companies such as Tencent and Alibaba rather than the Managers assessment of their corporate quality.That said,we are very co
21、nscious that,over the medium term,the Funds relative performance has not been at the level that shareholders have come to expect.As a Board we are encouraged by the Managers response to this challenging period,in terms of enhancing its investment process through the use of more precise definitions o
22、f corporate quality when assessing companies,and increased formalisation and consistency of the investment theses across the portfolio in order to address the reasons behind the disappointing results.Nonetheless,shareholders should be assured that my colleagues and I continue to review the Funds per
23、formance very carefully at our meetings and frequent discussions with the Manager.The Funds Portfolio and the ManagerThe Manager follows an investment approach which relies on fundamental analysis to identify companies it feels are able to generate attractive returns to investors over a five-year ho
24、rizon,or longer,but which the market appears to be pricing too cheaply.This approach relies strongly on assessing the quality of individual companies,which importantly incorporates not just management capability and business strength,but also how they take into account the environmental,social and g
25、overnance factors to which they are exposed.The resulting portfolio currently consists of a diversified group of 125 companies from 36 countries(including several businesses at the smaller end of the opportunity set).The typically low turnover(24%over the last twelve months and 21%per annum on avera
26、ge over the last five years)and the correspondingly high average holding period of more than six years both reflect the Managers fundamental,long-term approach.My colleagues and I have confidence that the investment approach and the portfolio characterised above is appropriate for the Fund.I have no
27、ted our ongoing discussion with the Manager about medium-term performance but fundamentally given the experience of the Managers team in emerging markets and the long history of its business,as well as its response to recent challenges the Board considers that shareholders interests remain well-serv
28、ed by the ongoing appointment of Genesis and this is reviewed every year.|7Genesis Emerging Markets Fund L Contents Strategic Report Governance Report Portfolio Report Financial StatementsThe Managers Review on page 32 of this Annual Report provides a description of portfolio activity over the year,
29、and explains in more detail some of the factors behind the Funds performance.Management FeeAfter discussions between the Board and the Manager,the management fee payable to Genesis Asset Managers,LLP was reduced at the start of the financial year,1st July 2017,to 0.95%of NAV per annum.(The figure wa
30、s previously 1.25%per annum.)We believe that this change makes the Funds management fee competitive in the peer group of similar closed-end funds;naturally the Board continues to monitor this position.DiscountThe Funds share price moved from 540.0p to 652.5p over the year,a rise of 20.8%.The discoun
31、t to NAV therefore narrowed marginally from 13.1%at the beginning of the period to 12.9%at the end.For most of this time,however,the discount was generally tighter:the average level over the twelve months was 12.2%as it fluctuated in a range roughly between 10.6%and 13.6%.These statistics,and the po
32、tential options for appropriate active management of the discount,are considered carefully by the Board.The Funds ability to buy back shares remains in place,but this year(as in previous years)the Board felt that no action in this regard was warranted.It is notable that while the Funds discount at p
33、resent is wider than most of its history,it remains closely in line with the comparable group of peer funds.Dividend Shareholders will be aware that the Funds stated objective is to achieve capital growth,and that reflecting this aim has not paid shareholders a dividend for many years.The topic of p
34、otential dividend payments has,however,been(among others)a point of discussion in my meetings with shareholders over the past several months,and it is clear that there is increased interest in the Fund distributing income on an ongoing basis.The Directors have accordingly considered this matter,and
35、have concluded that it would be appropriate to pay out,as a dividend,the available income received by the Fund from its underlying investments,and that this approach will be reviewed on an annual basis.At the same time,the Board has also reviewed the Funds allocation of expenses and has concluded th
36、at starting from the beginning of the current financial year on 1st July 2017 80%of the annual management fee(and certain other costs)should be allocated to the capital account,rather than to the revenue account.This reallocation is a reflection of the Boards long-term assessment of the balance of r
37、eturns between capital and revenue(and will have the effect of increasing revenue earnings while reducing capital returns by a corresponding amount).For shareholders,this will result in a higher level of income available for distribution as a dividend.We wish to recommend to shareholders that the Fu
38、nd distributes a dividend of 14.0 US cents per share in respect of the 2016-17 financial year,subject to approval at the Annual General Meeting(AGM)in November.(While declared in US dollars,the dividend will be paid in sterling;we should note to shareholders that the distribution amount will not be
39、hedged between the time of this announcement and the payment date.)The Board believes that this level of dividend represents an appropriate balance between the various differing interests,and opinions,held across the shareholder base and maintains the fundamental focus on capital growth that remains
40、 the Funds Genesis Emerging Markets Fund Limited8|Contents Strategic Report Governance Report Portfolio Report Financial StatementsThe Board of DirectorsWe announced in July the appointment of Katherine Tsang as a Non-Executive Director.I am very confident that Katherines considerable experience in
41、the banking and investment management sectors will be a valuable source of knowledge and insight for the Board in their discussions,particularly on China,and East Asia more generally.This appointment brings the number of Directors to six.Shareholders will have the opportunity to approve Katherines a
42、ppointment at the AGM,at which the remaining five Directors will stand for re-election,in accordance with the requirements of the AIC Code of Corporate Governance and the UK Corporate Governance Code.Following the Boards internal evaluation process,I wholeheartedly recommend all Directors for re-ele
43、ction;I hope that shareholders will continue to feel confident in our ability to protect their interests,and thus support us with their vote.AGM,Shareholder Meeting,and Shareholder CommunicationAt the end of this Annual Report is the notice convening the AGM to be held on 6th November 2017 in Guerns
44、ey,along with the schedule of resolutions for consideration.As ever,we request that all shareholders take up the opportunity to vote on these.The Board wishes to ensure that shareholders have access to a range of up-to-date information about the Fund.As well as releasing announcements to the London
45、Stock Exchange and issuing the Annual and Half-Yearly Reports,we encourage all shareholders to refer to the information on investment performance and portfolio activity contained in the Funds monthly factsheets.These and other Fund literature can be found on the Funds website .Shareholders will also
46、 find at the end of this Annual Report an invitation to the Funds annual Shareholder Information Meeting which this year will take place on 7th November 2017 at the Investment Advisers office in London.We hope that as many shareholders as possible will take this opportunity to hear directly from rep
47、resentatives of the Manager.In general,the Manager will usually be best placed to address queries from shareholders.Clearly,however,it is important for shareholders to be able to communicate directly with the Board when necessary.I have continued to speak regularly with major shareholders over the y
48、ear,but invite any shareholders to contact me or Russell Edey(as Senior Independent Director),or indeed any of the Board,with comments and feedback:we can be reached via either the Manager or the Administrator at the addresses on page 76 of this Report.OutlookMy report to shareholders a year ago not
49、ed the variety of challenges facing emerging markets companies,which included increased competition,declining penetration opportunities,a lack of business-friendly reforms,along with in many cases high valuations.While the past years 20%+absolute returns are welcome,they have of course meant that va
50、luations have become even more elevated,while none of the other issues have receded.At the same time,a more positive view about the health of the Chinese economy may well turn out to be less warranted than many investors seem to believe,and some countries(arguably Brazil,Turkey,South Africa)have see
51、n political governance quality move backwards rather than forwards.|9Genesis Emerging Markets Fund L Contents Strategic Report Governance Report Portfolio Report Financial StatementsThere are thus plenty of reasons to be wary of the short-term environment.We believe very strongly,however,that invest
52、ors should keep in mind the longer-term attractions underpinning emerging markets.The income levels of populations in developing countries populations are gradually moving towards those in developed markets;progress in governance while not linear continues to take place at both country and company l
53、evel;emerging stock markets still exhibit significant inefficiencies for investors who can identify them.A carefully selected portfolio of the right companies,capitalising on these three fundamental characteristics,still offers investors the potential for attractive long-term returns from emerging m
54、arkets.Hlne PloixChairman28th September Genesis Emerging Markets Fund Limited10|Contents Strategic Report Governance Report Portfolio Report Financial StatementsStrategy,Business Model and Principal RisksFund ObjectiveThe objective of the Fund is to achieve long-term capital growth,primarily through
55、 investment in equity markets of developing countries.StrategyThe core element of our strategy is to appoint and retain a high-quality manager whose investment philosophy best matches the Funds objective,and carefully monitor the Funds performance.Genesis,the Funds Manager,believes that it can best
56、deliver excellent long-term performance by working as a team to make investments in quality businesses at attractive prices as explained below.Business Model and Investment ProcessThe Fund has no employees or premises and the Board is comprised of non-executive Directors.The day-to-day operations an
57、d functions of the Fund have been delegated to third-party service providers who are subject to the oversight of the Board.During the year under review Genesis provided investment and risk management services,JP Morgan Chase Bank was the Custodian and JP Morgan Administration Services(Guernsey)Limit
58、ed was the Administrator and Company Secretary.The Board regularly reviews the performance and risks of its primary service providers and checks that they have appropriate frameworks in place for the oversight of their internal controls,monitoring and reporting.In line with the stated investment phi
59、losophy,the Manager employs a bottom-up investment approach with all members of its investment team taking responsibility for analysis on individual companies.The investment process is founded on proprietary internal research,with the Managers structure designed to allow a cohesive team of investors
60、 to generate fundamental research insights and,subject to rigorous challenge,express those insights in portfolios.The Funds portfolio is diversified across countries and industries and comprises approximately 130 holdings(currently representing some 36 different countries),to give a range of 10-15 p
61、er team member.The Manager believes that when its team concentrates on a smaller number of ideas,the research can be deeper and insights more valuable.Over the last three years,the Manager has increased this depth of focus and concentration,actively reducing the number of holdings in the Funds portf
62、olio from 160 three years ago to 125 at the end of the 2016-17 financial year.Portfolios comprise holdings in predominantly high-quality,sustainable businesses,both large and small.As part of their analysis the Managers team determines quality ratings for each company,which primarily measure a busin
63、ess ability to generate sustainable excess returns on capital and US$intrinsic value stability.Many factors are incorporated into this analysis:as well as company-specific elements,the team considers the political and macroeconomic framework in which the company operates.Environmental,Social and Gov
64、ernance(ESG)considerations are included in the analysis of sustainability,and the team takes ESG factors into account when determining the quality rating of a business.The Manager recognises that governance issues in particular are relevant to all companies and has laid out the key principles that i
65、t expects companies to follow from a corporate governance perspective.|11Genesis Emerging Markets Fund L Contents Strategic Report Governance Report Portfolio Report Financial StatementsGiven that the average holding period of investments in client portfolios has consistently been more than five yea
66、rs(and is currently in excess of six)and that this characteristic is expected to persist,the Manager is comfortable buying into relatively illiquid situations and building positions gradually.In the Managers experience the trading liquidity of a stock improves as its underlying merits are gradually
67、appreciated by a wider domestic and international investor base.Turnover is correspondingly low;typically of the order of 20-25%per annum.There is no specific company market capitalisation range in which the Manager invests,and it is prepared to take positions in smaller-capitalisation stocks where
68、compelling investment cases are found,in the belief that these can be a source of particularly attractive long-term investment opportunities.The Fund invests in a large number of emerging markets,many of which are not represented in the standard indices.The Manager aims to retain as much flexibility
69、 as possible with respect to portfolio constraints.Because the Manager aims to invest in companies that can compound shareholders capital,but also aims to invest at a discount to intrinsic value,the portfolio tends to have both growth and value characteristics.The portfolios investments are primaril
70、y listed equity securities.However,the Fund will also hold positions in Genesis affiliated investment companies,Participatory notes and Investee Funds,where appropriate.Details of the Funds portfolio are shown on pages 39 to 45.The Fund does not engage in any active management of foreign currency ri
71、sk and the portfolio is currently unleveraged(refer to notes 14(b)and 14(e)respectively).The Fund entered into a securities lending programme with JP Morgan Chase Bank N.A.in April 2016(refer to note 2(n).Principal Risks and Risk ManagementThe main risks to the value of its assets arising from the F
72、unds investment in financial instruments are unanticipated adverse changes in market prices and foreign currency exchange rates and an absence of liquidity.The Board reviews and agrees with the Manager policies for managing each of these risks and they are summarised on the following page.These poli
73、cies have remained unchanged since the beginning of the period to which these financial statements relate.Volatility of emerging markets and market riskThe economies,currencies and the financial markets of a number of developing countries in which the Fund invests may be extremely volatile.To manage
74、 the risks posed by adverse price fluctuations the Funds investments are geographically diversified,and will continue to be so.The Fund will not invest more than 25%of its assets(at the time the investment is made)in any one country.Further,the exposure to any one company or group(other than an inve
75、stment company,unit trust or mutual fund)is unlikely to exceed 5%of the Funds net assets at the time the investment is made.The Articles of Incorporation place a limit of 10%for securities issued by one company but the Directors use 5%for monitoring purposes.Foreign currency exposureThe Funds assets
76、 will be invested in securities of companies in various countries and income will be received by the Fund in a variety of currencies.However,the Fund will compute its net asset value and distributions in US dollars.The value of the assets of the Fund as measured in US dollars may be affected favoura
77、bly or unfavourably by fluctuations in currency rates and exchange control regulations.Further,the Fund may incur costs in connection with conversions between various currencies.The Fund has opted not to engage in any active management of foreign currency risk,and therefore all its open foreign exch
78、ange positions are typically Genesis Emerging Markets Fund Limited12|Contents Strategic Report Governance Report Portfolio Report Financial StatementsLack of liquidityTrading volumes on the stock exchanges of developing countries can be substantially less than in the leading stockmarkets of the deve
79、loped world and trading may even be temporarily suspended during certain periods.Liquidity can also be negatively impacted by temporary capital controls in certain markets.A lower level of liquidity can exaggerate the fluctuations in the value of investments described previously.The restrictions on
80、concentration and the diversification requirements detailed above also serve normally to protect the overall value of the Fund from the risks created by the lower level of liquidity in the markets in which the Fund operates.Custody riskThe Fund is also exposed to operational risks such as custody ri
81、sk.Custody risk is the risk of loss of securities held in custody occasioned by the insolvency or negligence of the Custodian.Although an appropriate legal framework is in place that eliminates the risk of loss of value of the securities held by the Custodian,in the event of its failure,the ability
82、of the Fund to transfer the securities might be temporarily impaired.The day-to-day management of these risks is carried out by the Manager under policies approved by the Board.Other MattersViability StatementIn accordance with provision C.2.2.of the 2016 UK Corporate Governance Code,the Board has a
83、ssessed the prospects of the Fund over the next three years.The Board considers that this period of time is appropriate to assess the viability of the Fund given the inherent uncertainty in the global emerging markets and the Funds investment cycle.As part of its assessment,the Board has considered
84、the Funds business model including its investment objective and investment policy as well as the principal risks and uncertainties that may affect the Fund.The Board has noted that:The Funds investment objective is to achieve capital growth over the long term and the Board regards the Fund as a long
85、-term investment.The average holding period for companies in the Funds portfolio is currently over six years,with turnover at around 24%over the last twelve months.These attributes reflect the Managers long-term fundamental approach.The Funds portfolio consists of a diversified group of companies fr
86、om a large number of emerging market countries.The majority of these are traded on major international stock exchanges.In the opinion of the Manager,the portfolio is sufficiently liquid to meet all ongoing and future liabilities arising from the Funds day-to-day business.No significant increases to
87、ongoing charges or operational expenses are anticipated.The Board has therefore concluded that there is a reasonable expectation that the Fund will be able to continue in operation and meet its liabilities as they fall due over the next three years.|13Genesis Emerging Markets Fund L Contents Strateg
88、ic Report Governance Report Portfolio Report Financial StatementsEnvironmental,Social and Governance FactorsGenesis meaningfully integrates ESG factors into the investment process as part of its ongoing qualitative judgement of a companys sustainable competitive advantage.Genesis recognises that ESG
89、 factors can expose potential investment opportunities and risks,reflect the quality of management and impact a companys financial performance.ESG factors are assessed in the context of materiality and particular attention is paid to the quality of company management and the alignment of interests w
90、ith minority investors.Signed on behalf of the BoardHlne Ploix28th September Genesis Emerging Markets Fund Limited14|Contents Strategic Report Governance Report Portfolio Report Financial Statements|15Genesis Emerging Markets Fund L Contents Strategic Report Governance Report Portfolio Report Financ
91、ial StatementsGovernance RGenesis Emerging Markets Fund Limited16|Contents Strategic Report Governance Report Portfolio Report Financial StatementsBoard of DirectorsHlne Ploix Appointed 2nd November 2012Chairman,Member of the Audit and Risk Committee,Chairman of the Nomination Committee Hlne Ploix(F
92、rench)is a Partner and former chairman of Paris-based private equity firm Pechel Industries.She has had an extensive career in finance and investment in the public and private sectors,both in France(primarily at the French state-owned Caisse des Dpts et Consignations)and internationally(notably as a
93、n Executive Director at the IMF,World Bank and as a Member of the Investments Committee of the UN Joint Staff Pension Fund).She is currently a Non-Executive Director of Sofina(Brussels)and Ferring(Switzerland),Non-Executive Chairman of Sogama Crdit Associatif and was previously at a number of other
94、companies,including The Boots Company PLC,BNP Paribas and Publicis.Mrs Ploix was educated at the Institut dEtudes Politiques,the University of California at Berkeley and INSEAD.Meeting Attendance Board:3/3,Audit and Risk Committee:3/3,Nomination Committee:3/3Sujit Banerji Appointed 31st October 2013
95、Director Sujit Banerji(Indian)is an independent advisor on corporate strategy to a number of companies in the finance,and finance-related technology sectors globally.In 2009 he completed a 33 year career at Citigroup where he had been a Managing Director since 1996,latterly serving as Head of Strate
96、gy and Institutional M&A for Europe,the Middle East and Africa(MENA).His career at Citi covered a number of regional roles including strategy and corporate finance,and relationships with multinational clients across the MENA region.He has also served as the country and region head for Citi in India,
97、and as the head of the corporate business in Thailand.Over the course of his career he has been based in India,Bangladesh and Thailand as well as in Europe,and is currently based in Singapore.He was educated at the University of Poona(Pune)and the University of Bombay(Mumbai).Meeting Attendance Boar
98、d:3/3,Audit and Risk Committee:n/a,Nomination Committee:3/3Russell Edey Appointed 1st January 2015Director,Chairman of the Audit and Risk Committee,Senior Independent DirectorRussell Edey(British)spent the majority of his career at NM Rothschild&Sons,where he held a number of positions over his 35 y
99、ears at the bank,including Head 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 Blackrock World Mining Trust plc.He previously spent 12 years as Chairman of AngloGold Ashanti in South Africa,a
100、nd in recent years he has also served as a Non-Executive Director of Old Mutual plc,Associated British Ports plc,FKI plc,and Paris Orleans SA.He qualified as a Chartered Accountant and began his career in finance at Anglo American in South Africa.He is based in the UK.Meeting Attendance Board:3/3,Au
101、dit and Risk Committee:3/3,Nomination Committee:3/3|17Genesis Emerging Markets Fund L Contents Strategic Report Governance Report Portfolio Report Financial StatementsSaffet Karpat Appointed 1st October 2011Director,Member of the Audit and Risk CommitteeSaffet Karpat(Swiss/Turkish)is a consultant on
102、 strategy to management teams of organisations based in Turkey.He is a Board member of Eczacba group,a Turkish conglomerate with businesses in construction materials,consumer goods,mining and medical services.Previously he worked for Procter&Gamble(P&G)for 30 years in various financial and senior ma
103、nagement roles across a number of emerging markets;prior to retiring from P&G in 2013 he was Vice President and General Manager of the Central and Eastern Europe and Middle East and Africa Division,responsible for Turkey,Central Asia,Israel and the Caucasian region.From 2013 to 2016 he was a member
104、of the Board and the Executive Committee of Sta Dairy Company,and he has been an investor in agriculture in the Aegean region of Turkey since 2011.He studied Business Administration at Istanbul University and received an MBA from Lausanne University.Meeting Attendance Board:3/3,Audit and Risk Commit
105、tee:3/3,Nomination Committee:3/3Dr John Llewellyn Appointed 30th October 2009DirectorDr.John Llewellyn(British)is the founder of Llewellyn Consulting,a London-based consultancy specialising in macroeconomics and environmental economics.From 1995 to 2008 he was Global Chief Economist and then Senior
106、Economic Policy Advisor at Lehman Brothers.Previously he spent seventeen years at the OECD in Paris,in charge of 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
107、(University of Cambridge).Meeting Attendance Board:3/3,Audit and Risk Committee:n/a,Nomination Committee:3/3Michael Hamson Appointed 19th January 2005,resigned 8th November 2016Director,Member of the Audit and Risk CommitteeMichael Hamson was born in Scotland but is now an Australian citizen and bas
108、ed in Melbourne.He was a Director of Newmont Mining Inc.for eleven years until 2012,and is Chairman of Hamson Consultants Pty Ltd and Technology Venture Partners,as well as a number of other companies.Michael was the former Deputy Chairman of Normandy Mining Limited and was a founding partner,Chief
109、Executive and Joint Chairman of McIntosh Griffin Hamson&Co(now Merrill Lynch Australia),a leading stockbroker in Australia.Meeting Attendance Board:1/1,Audit and Risk Committee:0/1,Nomination Committee:1/1 Genesis Emerging Markets Fund Limited18|Contents Strategic Report Governance Report Portfolio
110、Report Financial StatementsDirectors ReportThe Directors are pleased to present their twenty-eighth Annual Financial Report of the Fund,covering the year ended 30th June 2017.Financial PerformanceResultsThe total profit for the year for the Fund amounted to$192,866,000 compared to a total loss of$91
111、,996,000 in the previous year.Refer to the Managers Review on pages 32 to 34 for an explanation of the Funds performance.The Directors propose a dividend of 14.0 US cents per Participating Preference Share in respect of the year ended 30th June 2017(2016:nil).If approved by shareholders at the AGM o
112、n 6th November 2017,the dividend will be payable on 1st December 2017 to shareholders on the register at close of business on 10th November 2017.Capital ValuesAt 30th June 2017,the value of Equity Shareholders Funds was$1,314,184,000(2016:$1,121,318,000)a gain of$192,866,000.The Net Asset Value per
113、Participating Preference Share was$9.74(2016:$8.31).Key Performance IndicatorsThe Highlights and Performance section on pages 4 and 5 show the Funds Key Performance Indicators including its performance and discount to its NAV over the last five years.Corporate GovernanceThe Board is accountable to s
114、hareholders for the governance of the Funds affairs.The Directors use this Report to detail the Funds corporate governance statement.The Fund is a member of the Association of Investment Companies(AIC)and the Board has considered the principles and recommendations of the 2016 AIC Code of Corporate G
115、overnance(AIC Code)by reference to the AIC Corporate Governance Guide for Investment Companies(AIC Guide).The AIC Code addresses all the principles set out in the UK Corporate Governance Code,as well as setting out additional principles and recommendations on issues that are of specific relevance to
116、 the Fund.The Board considers that reporting against the principles and recommendations of the AIC Code,and by reference to the AIC Guide(which incorporates the UK Corporate Governance Code),will provide better information to shareholders.As a Guernsey incorporated company listed on the London Stock
117、 Exchange within the FTSE 250,the Fund is required to comply with Listing Rule 9.8.7(for overseas incorporated companies).This requires the Fund to state how it has applied the main principles set out in the 2016 UK Corporate Governance Code and whether it has complied with these provisions througho
118、ut the accounting period.The Fund is an Authorised Closed-Ended Investment Scheme regulated by the Guernsey Financial Services Commission(GFSC).The GFSC requires compliance with the principles set out in the Finance Sector Code of Corporate Governance(Guernsey Code),or alternative codes accepted by
119、the GFSC,in the context of the nature,scale and complexity of the business.Statement of complianceThe Directors believe that during the year under review,they have complied with the provisions of the AIC Code and therefore,insofar as they apply to the Funds business,with the provisions of the 2016 U
120、K Corporate Governance Code and Guernsey Code except as noted below.|19Genesis Emerging Markets Fund L Contents Strategic Report Governance Report Portfolio Report Financial Statements The role of Chief Executive Since all Directors are non-executive and day-to-day management responsibilities are su
121、b-contracted to the Manager,the Fund 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 2016 UK Corporate Governance Code in respect of Executive Directors remuneration and does not have a Re
122、muneration Committee.Internal audit functionAs the Fund delegates to third parties its day-to-day operations and has no employees,the Board has determined that there is no requirement for an internal audit function.The Directors annually review whether a function equivalent to internal audit is need
123、ed and will continue to monitor the Funds systems of internal controls in order to provide assurance that they operate as intended.In particular,the Directors review the processes and controls managed by relevant specialist staff at the Manager.ShareholdersShareholder relationsThe Board recognises t
124、he need for good communications with its shareholders.The primary medium through which the Fund communicates with shareholders is the Annual and Half Year Financial Report and the monthly Fact Sheet,which are available via the Funds website,www.genesisemf.co.uk.The Chairman of the Fund(and other Dir
125、ectors,periodically)is available for meetings with the Funds major shareholders at their request,and all Members of the Board are available for shareholders questions and significant matters arising.On behalf of the Board and often with members of the Board in attendance the Manager holds periodic m
126、eetings with the Funds major shareholders to discuss aspects of the Funds positioning,performance and outlook.In addition,all shareholders are invited to attend the Funds annual Information Meeting.The Board monitors the trading in the Funds shares and shareholder profile on a regular basis and main
127、tains regular contact with the Funds brokers to ascertain the views of the market.Sentiment is also ascertained by careful monitoring of the discount/premium that the shares trade on versus their NAV and the comparison with the Funds peer group.Significant shareholdingsThe Fund has a diversified sha
128、reholder population.The Directors are however aware of the following shareholdings which represented beneficial interests of 3%or more of the issued share capital of the Fund.ShareholderParticipating Preference Shares Held30th June 2017%Participating Preference Shares Held31st August 2017%Strathclyd
129、e Pension Fund 29,991,155 22.229,991,15522.2Lazard Asset Management LLC Group 16,588,581 12.316,337,05212.1City of London Investment Management 12,292,003 9.113,421,2579.9Wells Capital Management 9,395,765 7.09,740,5087.2Banque Degroof Petercam SA 9,102,709 6.78,168,5596.1Banque Degroof Luxembourg S
130、A 7,762,929 5.86,935,3415.1Rathbones 4,469,735 3.34,511,5673.3Derbyshire County Council 4,300,000 3.24,300,Genesis Emerging Markets Fund Limited20|Contents Strategic Report Governance Report Portfolio Report Financial StatementsWebsite:The Annual Financial Report is published on the website,which is
131、 maintained by Genesis Investment Management,LLP(Investment Adviser).The maintenance and integrity of the website is,so far as relates to the Fund,the responsibility of the Investment Adviser.The work carried out by the auditors does not involve consideration of these matters and,accordingly,the aud
132、itors accept no responsibility for any changes that may have occurred to the Annual Financial Report since they were initially presented on the website.Legislation in Guernsey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.Regul
133、atory DisclosuresThe Alternative Investment Fund Managers Directive(AIFMD)The Manager is a limited liability partnership organised under the law of Delaware,USA and qualifies as a non-EU alternative investment fund manager(non-EU AIFM).Article 22 of AIFMD requires certain qualitative and quantitativ
134、e disclosures on remuneration to assist the understanding of the risk profile of the Fund.Details of the Remuneration Policy of the Manager and amounts attributable to the Fund are available on the www.giml.co.uk website.UK Listing Authority Listing Rules(LR)compliance with rule 9.8.4None of the dis
135、closures required under LR 9.8.4 are applicable to the Fund.The BoardThe Board,chaired by Hlne Ploix,consists of non-executive Directors,all of whom are considered to be independent of the Manager.The biographies of the Directors are shown on pages 16 and 17.The Board has consisted of no more than s
136、ix Directors during the year and the Directors feel that given the fact that they do not have executive roles,it is not necessary to establish a separate Remuneration Committee.There is also no separate Management Engagement Committee as the Board,as a whole,regularly meet with the Manager,the Admin
137、istrator and the Company Secretary to discuss their performance.Russell Edey held the role of Senior Independent Director during the year.The Audit and Risk Committee and the Nomination Committee both have separate reports on pages 25 and 28 respectively.The Board regularly reviews both the performa
138、nce of,and the contractual arrangements with the Manager,and is satisfied that the continuing appointment of the Manager is in the best interests of shareholders.The management agreement sets out matters over which the Manager has authority and includes management of the Funds assets and the provisi
139、on of administrative duties.The agreement further permits the Manager to delegate its administrative duties,subject to the Boards prior consent.All other matters are reserved for the approval of the Board.Under this agreement,for the 2017 financial year,the Manager was entitled to receive a manageme
140、nt fee from the Fund,payable monthly,equal to 1.25%per annum,calculated and accrued on the Net Asset Value of the Fund as at each Valuation Day.Following discussion with the Manager,it was agreed that the management fee would be reduced at the start of the new financial year,1st July 2017,to 0.95%of
141、 NAV per annum.The Managers appointment is under a rolling contract which may be terminated by three months written notice given by the Fund,and twelve months written notice given by the Manager.As noted on page 26,the Audit and Risk Committee reviews the performance of,and the contractual arrangeme
142、nts with the Administrator and the Custodian.The Board is satisfied that the continuing appointment of the Administrator and the Custodian is in the best interests of shareholders.|21Genesis Emerging Markets Fund L Contents Strategic Report Governance Report Portfolio Report Financial StatementsThe
143、Board meets at least three times during the year and between these meetings there is regular contact with the Manager who provides the Board with appropriate and timely information.Attendance at those meetings is given below each Directors biography on pages 16 and 17.Note that attendance at a Board
144、 or Committee meeting by proxy does not count as formal attendance(although it does count towards a quorum).Directors Insurance and IndemnificationDirectors and Officers liability insurance cover is held by the Fund to cover Directors against certain liabilities that may arise in the course of their
145、 duties.Other MattersVoting 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 proposed by investee companies.The Manager aims to vote in the best interests of the Fund,and to
146、 vote on all shares in all markets.Proxy Voting Guidelines are maintained to outline the overall approach to voting and ensure that it is conducted in an appropriate manner.In evaluating specific voting issues,the Managers team members may engage directly with company management and directors and ma
147、y also contact interest groups,other shareholders and research providers.Where appropriate,and particularly where a vote against management is warranted,the Manager will contact the company to explain the decision-making process and promote best practice.In a case where securities are on loan ahead
148、of a General Meeting or corporate action it is the Managers policy to request that such securities be recalled to enable the shares to be voted.The Manager has contracted with Institutional Shareholder Services,Inc.(ISS),an independent third-party provider of proxy voting and corporate governance se
149、rvices.ISS provides proxy research and recommendations,executes votes as instructed by the Manager,and keeps various records necessary for tracking proxy voting materials and proxy voting actions taken.ISS recommendations are one form of external research which is factored into the Managers investme
150、nt decision-making process.Each voting issue is analysed independently,however,and the Managers votes are not necessarily in line either with company management or the ISS recommendations.Further details on voting policy are disclosed on the Managers website www.giml.co.uk,where a proxy voting repor
151、t for the Fund over the last five years is also available.Borrowing FacilitiesThe Articles of Incorporation permit the Fund to borrow up to 10%of the value of its Net Assets.No borrowing facility was used in either 2017 or 2016.Company SecretaryJP Morgan Administration Services(Guernsey)Limited has
152、been in office for the whole year under Genesis Emerging Markets Fund Limited22|Contents Strategic Report Governance Report Portfolio Report Financial StatementsAuthority to Purchase Own SharesUnder Resolution 9 of the Annual General Meeting held on 8th November 2016,the shareholders authorised the
153、Company to purchase its own shares.This authority is limited to the maximum number of 20,200,000 Participating Preference Shares of no par value(equivalent to approximately 14.9%of the issued share capital of the Company).This authority expires at this years Annual General Meeting of the Company.The
154、 maximum price that may be paid for a Participating Preference Share will be the amount that is equal to 5%above the average of the middle market prices shown in quotations for a Participating Preference Share in the London Stock Exchange Daily Official List for the five business days immediately pr
155、eceding 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 6th November 2017.In the event that the Company should purchase shares for cancellation,the Directors would only do so af
156、ter consideration of the effect on earnings per share and the longer-term benefits for shareholders.Going ConcernThe Directors believe that the Fund has adequate resources to continue in operational existence for twelve months from the approval date of the Annual Financial Report.This is based on va
157、rious factors including the Funds forecast expenditure,its ability to meet its current liabilities,the highly liquid nature of its assets,its market price volatility and its closed-ended legal structure.For these reasons,the Directors continue to adopt the going concern basis in preparing the Financ
158、ial Statements.Signed on behalf of the BoardHlne Ploix28th September 2017|23Genesis Emerging Markets Fund L Contents Strategic Report Governance Report Portfolio Report Financial StatementsDirectors Remuneration ReportThe Directors of the Fund are non-executive and by way of remuneration are entitle
159、d 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 AGM on 8th November 2016 and can only be amended by shareholder approval at a general meeting.The level of Directors Fees is independentl
160、y assessed and was last reviewed in 2016 concurrently with the independent evaluation of the Boards performance.The Directors fees are fixed and not linked to performance.The fees are shown in the table below and are deemed to accrue on a daily basis:PositionAnnual FeeDirector30,000Chairmanadditiona
161、l 10,000 Chairman or Member of the Audit and Risk Committeeadditional 5,000 Senior Independent Directoradditional 2,500 The Directors are also entitled to be paid all travelling,hotel and other expenses properly incurred by them in attending and returning from meetings of the Directors or any commit
162、tee of the Directors or General Meetings of the Fund or in connection with the business of the Fund.Directors Service ContractsNo Director has a contract of service with the Company.Accordingly,the Directors are not entitled to any compensation in the event of termination of their appointment or los
163、s of office,other than the payment of any outstanding fees.The Board does not consider it appropriate that Directors should be appointed for a specific term.Any new Director appointed would be subject to election by shareholders at the next AGM following their appointment.Directors Emoluments for th
164、e YearThe fees paid to each Director for the years ended 30th June 2017 and 2016 are shown in the table below with any year-on-year differences being explained:Director30th June 201730th June 2016Helene Ploix(1)45,00038,634Sujit Banerji30,00030,000Russell Edey(2)37,50035,970Saffet Karpat35,00035,000
165、John Llewellyn30,00030,000Michael Hamson(3)12,56235,000Coen Teulings(4)13,224(1)Assumed the roles of Chairman on 30th October 2015 and member of the Audit and Risk Committee on 10th February 2016(2)Assumed the role of Senior Independent Director on 10th February 2016(3)Retired as Director and Member
166、 of the Audit and Risk Committee on 8th November 2016(4)Retired as Chairman on 29th October Genesis Emerging Markets Fund Limited24|Contents Strategic Report Governance Report Portfolio Report Financial StatementsDirectors InterestsThe following Directors had a beneficial interest(including family i
167、nterests)in the share capital of the Fund.The table shows the number of Participating Preference Shares held by each Director as at 30th June 2016 and 2017:Director30th June 201730th June 2016Helene Ploix15,00015,000Sujit Banerji10,00010,000Michael Hamsonn/a8,700Saffet Karpat20,00020,000An ordinary
168、resolution to approve this Remuneration Report will be put to shareholders at the forthcoming AGM.Signed on behalf of the BoardHlne Ploix28th September 2017|25Genesis Emerging Markets Fund L Contents Strategic Report Governance Report Portfolio Report Financial StatementsAudit and Risk Committees Re
169、portThe Audit and Risk Committee is chaired by Russell Edey and has formally delegated duties and responsibilities with written terms of reference,which are available on the Funds website.The Board has established an Audit and Risk Committee whose responsibilities are,inter alia:To monitor the integ
170、rity of the financial statements of the Fund,including its annual and half-yearly reports and any other 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 effectiv
171、eness of the internal financial control and risk management systems on which 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 princip
172、al risks facing the company;To provide advice to the Board on whether they consider the Annual Financial Report,taken as a whole,is fair,balanced and understandable;To make recommendations to the Board in relation to the appointment,re-appointment and removal of external auditors;To monitor the inde
173、pendence and objectivity of external auditors;and To 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,audit timetable and other risk
174、 management and governance matters.It may meet more often if deemed necessary,or if required by the Funds auditors.Significant accounting mattersDuring the review of the Funds financial statements for the year ended 30th June 2017,the Audit and Risk Committee considered the following matters to be s
175、ignificant issues,both of which were satisfactorily addressed:Issue consideredHow the issue was addressedValuation of the investment portfolio98.8%of the investment portfolio was valued using quoted prices or prices that were observable.The Administrators weekly valuation of these securities was che
176、cked by the Manager to independent price sources.1.2%of the investment portfolio was invested in other funds(Investee Funds)which were valued using the most recently available valuation statements from their respective administrator,updated to include subsequent cashflows.The Managers monthly Valuat
177、ion Committee monitors the fair value of all securities and ensures the appropriateness and accuracy of the methodologies used and their effective implementation.The Manager regularly provides information to the Directors on any stale,unquoted and illiquid securities contained within the investment
178、portfolio for their review and Genesis Emerging Markets Fund Limited26|Contents Strategic Report Governance Report Portfolio Report Financial StatementsIssue consideredHow the issue was addressedLoss of assets and custody riskAll securities are held by an independent Custodian and the Manager reconc
179、iles the Custodians investment portfolio records on a weekly basis.The Manager monitors the Custodians service levels throughout the year with a formal performance review conducted annually.The latest annual review was in June 2017.Auditor independence and assessmentThe Funds external Independent Au
180、ditors,PricewaterhouseCoopers CI LLP(PwC),have acted in this role for more than ten years and although no tender for the audit of the Fund has taken place since their appointment,rotation of the Audit Partner has regularly taken place,most recently in 2013.The Audit and Risk Committee monitors the E
181、uropean and U.K.legislation regarding mandatory audit firm rotation and tendering to ensure compliance.An external tender was conducted during 2017 prior to the completion of the existing Audit Partners permitted service term.Following a robust evaluation of the responses to and presentations involv
182、ed in the audit tender process,KPMG Channel Islands Limited has been engaged by the Board to act as the Funds auditor from the 2018 financial year.Resolutions appointing them and authorising the Directors to agree their remuneration will be proposed at the Annual General Meeting.PwC have undertaken
183、the audit of the Funds accounts for the financial year.As part of its review of the continuing appointment of the Auditors,the Audit and Risk Committee considered the independence of the Auditor along with the effectiveness of the audit.The Auditors were asked to attest that PwC and the audit team m
184、embers were independent of the Fund.PwC also confirmed that they had not been engaged in the provision of any non-audit services to the Fund during the year.Audit effectiveness was assessed by means of the Auditors direct engagement with the Board at Audit and Risk Committee meetings and also by ref
185、erence to feedback from the Manager.The Audit and Risk Committee reviewed the Auditors risk assessment and audit approach at the planning stage and were briefed on the fulfilment of that plan at the completion stage.The Board concluded,on the recommendation of the Audit and Risk Committee,that the A
186、uditors continue to be independent of the Fund.The fees paid to PwC in respect of audit services for the year ended 30th June 2017 were$61,000(2016:$52,000).PwC did not provide any non-audit services during the year(2016:None).Internal ControlsThe Board is responsible for the Funds system of interna
187、l control and for reviewing its effectiveness.As there is delegation of daily operational 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.Accordingl
188、y,the internal control systems are designed to manage rather than eliminate the risk of failure to achieve business objectives and by their nature can only provide reasonable and not absolute assurance against misstatement and loss.The services provided to the Fund by the Administrator,such as admin
189、istration services,accounting services and company secretarial duties reflect the system of financial and operating controls operating at the Administrator.The control regime for other services,such as the Manager,Investment Adviser,Custodian and Registrar,reflect the internal controls operated by t
190、hese respective service providers.The Administrator provides semi-annual and annual financial statements based on the requirements of the Fund.The financial statements are based on data from the Administrators accounting system including the trial balance,net asset valuation,purchase and sales repor
191、t and other investment schedules.All statements are reconciled and reviewed by the Administrator using pre-defined checklists and reviewed by the Manager prior to distribution.|27Genesis Emerging Markets Fund L Contents Strategic Report Governance Report Portfolio Report Financial StatementsIn order
192、 for the Directors to review their effectiveness for the Funds business,an annual review of all out-sourced functions has taken place.Their performance was monitored against obligations specified in the relevant contracts and was found to be in order.Service providers report annually on the design a
193、nd 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 Directors as a whole.The Audit and Risk Committee has carried out its annual assessment of the internal controls o
194、f the Funds service providers for the year ended 30th June 2017 and considered the internal control procedures to be adequate based on the findings of their respective ISAE 3402 or SSAE 16 reports.Russell EdeyChairman of the Audit and Risk Committee28th September Genesis Emerging Markets Fund Limite
195、d28|Contents Strategic Report Governance Report Portfolio Report Financial StatementsNomination Committees ReportAll Directors form the Nomination Committee,chaired by Hlne Ploix.The Nomination Committee terms of reference are available on the Funds website.Board appointments and re-electionAll memb
196、ers of the Board consider new Board appointments.The Chairman,Manager or other appropriate persons provide new appointees to the Board with a preliminary briefing on the workings of the Fund.When appointing a new Director,the Board takes care to ensure that the new Director enhances the balance of s
197、kills and experience appropriate to the requirements of the Fund and that a new Director has enough time available to properly fulfil their duties.The Directors also have access,where necessary in the furtherance of their duties,to independent professional advice at the Funds expense.During the curr
198、ent financial year,TM Partenaires was engaged to act in the search for a new director.Directors are initially appointed until the following Annual General Meeting when,under the Funds Articles of Incorporation,it is required that they be elected by shareholders.Katherine Tsang was appointed as a Dir
199、ector from 19th July 2017,and will be subject to election by shareholders at the Annual General Meeting.The Board is now composed of six members,diversified by nationality and gender.Katherine TsangKatherine Tsang(Canadian)spent 22 years with Standard Chartered Bank,latterly in the role of Chairpers
200、on of Greater China,before retiring in 2014.Following her retirement,Katherine founded Max Giant Capital,an asset management group focusing on direct investments in the financial industry in Asia,particularly in China.Katherine is currently an independent Non-Executive Director of the Board of Gap I
201、nc.,and of the Board of China CITIC Bank International Limited.She also serves as a member of the Advisory Council for China of the City of London,and is an honorary Board member of Shanghai Jiao Tong University.She has previously served as an independent Non-Executive Director of Baoshan Iron&Steel
202、 Co.Limited,a member of the World Economic Forums Global Agenda Council on China,and a member of Sothebys Advisory Board.Evaluation of the BoardAll the Directors are retiring in accordance with the AIC Code and will offer themselves for re-election.As each Director has maintained their effectiveness
203、 and commitment to the Fund,the Board endorses 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 and length of service is appropriate.In accordance with the AIC Code,an independe
204、nt evaluation of the Boards performance takes place every three years,the last being carried out in April 2016 by Stephenson&Co.The findings of the review were considered by the Directors and actions,where appropriate,have been taken.The Board is aware of the requirements of the 2016 UK Corporate Go
205、vernance Code and regularly reviews its succession plan.Hlne PloixChairman of the Nomination Committee28th September 2017|29Genesis Emerging Markets Fund L Contents Strategic Report Governance Report Portfolio Report Financial StatementsStatement of Directors ResponsibilitiesThe Directors are respon
206、sible for preparing the financial statements for each financial year so that they give a true and fair view,in accordance with applicable Guernsey Law and International Financial Reporting Standards as adopted by the European Union,of the state of affairs of the Fund and of the profit or loss of the
207、 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 that are reasonable and prudent;ensure the financial statements are prepared on a going concern basis u
208、nless it is inappropriate to presume that the Fund will continue in business;and state whether applicable accounting standards have been followed subject to any material departures disclosed and explained in the financial statements.The Directors confirm that they have complied with the above requir
209、ements in preparing the financial statements.The Directors are responsible for ensuring that the Fund keeps proper accounting records which disclose with reasonable accuracy at any time the financial position of the Fund and enable them to ensure that the financial statements comply with The Compani
210、es(Guernsey)Law,2008.They are also responsible for ensuring the safeguarding of the assets of the Fund and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.Having taken all available information into consideration,the Board has concluded that the A
211、nnual Financial Report for the year ended 30th June 2017,taken as a whole,is fair,balanced and understandable and provides the information necessary for shareholders to assess the Funds performance,business model and strategy.Auditors and disclosure of information to auditorsIn the case of each of t
212、he 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;and they have taken all steps that ought to have been taken as a Director in order to make themsel
213、ves aware of any relevant audit 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 their knowledge that:the financial statements are prepared in accordance with applicable accoun
214、ting standards,give a true and fair view of the assets,liabilities,financial position and profit or loss of the Fund;and this Annual Financial Report includes a fair review of the development and performance of the business and the position of the Fund,together with a description of the principal ri
215、sks and uncertainties that exist.Signed on behalf of the BoardHlne PloixRussell Edey 28th September Genesis Emerging Markets Fund Limited30|Contents Strategic Report Governance Report Portfolio Report Financial Statements|31Genesis Emerging Markets Fund L Contents Strategic Report Governance Report
216、Portfolio Report Financial StatementsPortfolio RGenesis Emerging Markets Fund Limited32|Contents Strategic Report Governance Report Portfolio Report Financial StatementsManagers ReviewInvestment EnvironmentAfter a prolonged period of weak returns in emerging markets,it is pleasing to report a steady
217、 period of strong absolute performance.Many of the drivers noted in the Funds Half-Year Report six months ago continued to be significant,such as the acceleration of credit growth in China and fewer than expected interest rate rises in the US.The environment has also been characterised by strong ret
218、urns in the IT sector,particularly technology hardware and internet.This sector outperformed the wider market significantly(up 52%),with large Index positions Tencent and Alibaba rising by 62%and 82%respectively.In this environment,developing stockmarkets,as measured by the MSCI EM(TR)Index,rose 27.
219、8%in sterling terms over the financial year.The Funds net asset value failed to match the index,gaining 20.6%.In an environment such as this where performance is driven by a narrow segment of the opportunity set,our philosophy of investing in quality businesses at attractive prices is unlikely to ou
220、tperform.The Fund has in the past experienced similar periods of relative underperformance,such as the technology boom of the late 1990s and in the period leading up to the global financial crisis where valuations in markets such as China were extreme.Our focus is,as ever,to invest over the long ter
221、m in a diversified portfolio with a quality bias,identifying companies which can compound value.We believe this philosophy is well suited to capitalise on the structural changes taking place in emerging economies such as institutional quality improvement,increasing penetration of goods and services,
222、and pricing inefficiencies and add value relative to the Index over the long term.PerformanceSignificant value was lost in the IT sector,predominantly by being underweight in Chinese internet companies.Tencent and Alibaba were large detractors despite the portfolio being invested in both(Tencent thr
223、ough a position in Naspers).We believe these businesses are great franchises with scale,network effects and capable management teams.However,there remains a wide range of outcomes and we believe current valuations,particularly that of Tencent,are skewed toward the upside.Conversely,the portfolio ben
224、efitted from its positions in technology hardware giants TSMC(up 45%,Taiwan)and Samsung Electronics(up 73%,South Korea).Elsewhere,value was lost in the health care sector,particularly through positions in Indian generic drugs manufacturers Sun Pharmaceutical(down 22%)and Lupin(down 26%).Again,these
225、companies have strong franchises with talented management teams.However,despite adding value to the Fund over the long term,recent challenges such as enhanced FDA regulatory scrutiny and a slowdown in the new drug pipeline has affected earnings and our estimates of intrinsic value.These businesses a
226、re proactively addressing the regulatory issues and continue to implement a strategy of building out a longer-term pipeline of products.Some companies disappointed for more stock specific reasons,most notably the LatAm/Caribbean telecom operator,LiLAC,and Universal Robina,the dominant producer of br
227、anded snacks in the Philippines.On the positive side,value was added in the consumer discretionary sector,where Chinese white goods company Midea and luxury brand owner Richemont both absent from the benchmark rose 88%and 50%respectively.From a country perspective,the largest detractor was India chi
228、efly due to the positions in the pharmaceutical companies noted above.Further value was lost in Thailand,where Bangkok Dusit retreated by 13%and Thai Beverage rose by only 3%,and in Turkey through a combination of stock performance and the overweight position,while the underweight position in Taiwan
229、 also hurt the portfolio.These losses were partially offset by gains in South Africa and Mexico through stock selection,and the underweight position in Malaysia.|33Genesis Emerging Markets Fund L Contents Strategic Report Governance Report Portfolio Report Financial StatementsRelative Performance At
230、tribution in GBP 12 Months to June 2017GEMF vs.MSCI EM(TR)IndexTop 10 Stock Contributors%Midea(China)0.64Kweichow Moutai(China)0.45First Quantum Minerals(Zambia)0.35Anhui Conch Cement(China)0.30Richemont(Switzerland)0.29China Mobile(China)0.25Anglo American(South Africa)0.21Ambev(Brazil)0.20Rumo(Bra
231、zil)0.20Amorepacific(South Korea)0.19Top 10 Stock Detractors%Tencent(China)/Naspers (South Africa)(1.22)LiLAC(United Kingdom)(1.01)Sun Pharmaceutical(India)(0.93)Universal Robina(Philippines)(0.76)Lupin(India)(0.74)Tullow Oil(United Kingdom)(0.67)Alibaba Group(China)(0.51)Hikma Pharmaceuticals(Jorda
232、n)(0.46)Bangkok Dusit Medical Services(Thailand)(0.45)Hon Hai Precision Industry(Taiwan)(0.45)Stocks in italics are omissions at end of periodSector%Consumer Discretionary1.32Materials0.67Industrials0.65Utilities0.54Consumer Staples0.23Telecoms0.03Real Estate(0.25)Energy(0.50)Financials(0.98)Health
233、Care(2.82)Information Technology(3.34)Top 5 Country Contributors%South Africa0.49Malaysia0.48Zambia0.35Mexico0.35Brazil0.24Top 5 Country Detractors%India(2.89)Thailand(0.78)Taiwan(0.50)Turkey(0.47)Philippines(0.46)Source:FactSetPortfolio ActivityConsumer,IT and the materials sectors dominated tradin
234、g activity over the Funds financial year.Valuations in the consumer sector became more attractive on a relative basis.As a result,we topped up many existing holdings and initiated new positions,including Naspers(South Africa),e-commerce company JD.com(China)and convenience store operator Lojas Ameri
235、canas(Brazil).Conversely,we took the opportunity to reduce two of the largest positions in the portfolio,both from the technology hardware industry TSMC and Samsung Electronics due to strong share price performance.Finally,we maintained our valuation discipline for companies which we view as lower q
236、uality,such as those from the materials sector,and reduced miners First Quantum(Zambia)and Anglo American(South Africa)as their share prices continued to rebound.In other sectors,noteworthy new positions included leading private hospital operator Mediclinic(South Africa)and high-quality,private sect
237、or bank HDFC(India)Genesis Emerging Markets Fund Limited34|Contents Strategic Report Governance Report Portfolio Report Financial StatementsOutlookAs we have noted in previous Managers Reviews,the key risk in our view remains China.Policymakers are trying to do three things:rebalance the economy fro
238、m investment to consumption,reduce financial leverage and achieve a soft landing.It has become apparent that they cannot achieve all three at once and in the near term they have allowed credit to continue to build,favouring short-term growth over long-term economic reform.However,we are encouraged t
239、hat emerging market economic growth has begun to stabilise after many years of decline.In addition,many of the excesses of the cycle following the global financial crisis,such as elevated corporate profitability,high commodity prices and overvalued currencies,have now reverted to a more sustainable
240、level.Although valuations are not attractive across the board,we are still finding interesting opportunities in a variety of markets.Genesis Asset Managers,LLPSeptember 2017|35Genesis Emerging Markets Fund L Contents Strategic Report Governance Report Portfolio Report Financial Statements16.8%12.8%1
241、1.0%8.7%6.4%5.0%4.6%4.5%3.5%3.1%2.1%1.4%12.8%ChinaIndiaSouth KoreaSouth AfricaRussiaBrazilThailandTaiwanMexicoTurkeyVietnamIndonesiaOutside the Benchmark(11.1)%4.0%(4.6)%2.2%3.3%(1.7)%2.4%(8.0)%(0.2)%2.0%2.1%(1.0)%12.8%Relative to BenchmarkRelative to BenchmarkBased on GEMF and MSCI EM(TR)*Treating
242、Genesis Smaller Companies SICAV on a look-through basis29.8%19.8%9.3%7.7%6.9%6.4%4.5%3.9%3.5%2.7%1.2%1.0%0.3%2.8%ConsumerBanksTechnology HardwareIT Software,Services&InternetHealth CareFinancials ex BanksMaterialsTelecomsEnergyReal EstateInvestment CompaniesIndustrialsUtilitiesCash12.5%2.4%(5.2)%(4.
243、3)%4.5%0.2%(2.6)%(1.5)%(3.1)%0.0%1.2%(4.7)%(2.3)%2.8%Country and Sector Exposure of the Portfolio*as at 30th June Genesis Emerging Markets Fund Limited36|Contents Strategic Report Governance Report Portfolio Report Financial StatementsTwenty Largest Holdingsas at 30th June 2017Samsung Electronics(So
244、uth Korea)4.85%Information TechnologySamsung Electronics is a global leader in the IT hardware industry,producing handsets,semiconductors(mostly memory),LCD panels and a wide range of consumer electronics and digital appliances.Taiwan Semiconductor Manufacturing(Taiwan)3.77%Information TechnologyTai
245、wan Semiconductor Manufacturing is the worlds largest dedicated semiconductor foundry manufacturing integrated circuits for computer,communications,and consumer electronics applications.Naspers(South Africa)2.60%Consumer DiscretionaryNaspers is a South African internet and entertainment group,with t
246、he majority of its value derived from the companys investment in Tencent,the leading Chinese internet service provider.AIA Group(China)2.56%FinancialsAIA Group offers insurance and financial services.The company writes life insurance for individuals and businesses,accident and health insurance,retir
247、ement planning,and wealth management services.Samsung Fire&Marine Insurance(South Korea)2.47%FinancialsSamsung Fire&Marine Insurance is a multinational insurance company based in South Korea,with automobile insurance prominent amongst its products.Heineken(Netherlands)2.28%Consumer StaplesHeineken i
248、s a leading international brewer with emerging markets accounting for approximately 70%of earnings.It has significant market positions in Central&Eastern Europe,Mexico,Africa and Asia.Alibaba Group(China)2.12%Information TechnologyAlibaba is the worlds largest e-commerce company by gross merchandise
249、 volume,also operating a financial services business(including the largest online payments mechanism in China),and a cloud computing business.Genesis Smaller Companies SICAV(Luxembourg)2.07%Investment CompanyAn open-ended Luxembourg SICAV whose objective is to achieve capital growth over the medium
250、to long term through investment in smaller emerging market companies.It held positions in nine listed stocks as at 30th June 2017.|37Genesis Emerging Markets Fund L Contents Strategic Report Governance Report Portfolio Report Financial StatementsKotak Mahindra Bank(India)1.96%FinancialsKotak Mahindr
251、a Bank is one of the leading integrated financial services groups in India,with interests in retail banking,asset management,life insurance and investment banking.Shinhan Financial Group(South Korea)1.75%FinancialsShinhan Financial Group is a holding company that offers a full range of financial ser
252、vices to retail and corporate customers in South Korea through its subsidiaries,which include one of the largest banks in the country.Novatek(Russia)1.70%EnergyNovatek is Russias second largest producer of natural gas,operating principally in western Siberia.Infosys(India)1.63%Information Technology
253、Infosys provides IT consulting and software services,including e-business,program management and supply chain solutions.The companys services include application development,product codevelopment,and system implementation and system engineering.Jiangsu Yanghe Brewery(China)1.61%Consumer StaplesJiang
254、su Yanghe Brewery is a Chinese spirits producer,focusing primarily on the mid-end range of the clear liquor known as baijiu.Axis Bank(India)1.58%FinancialsAxis Bank operates more than 3,000 domestic branches and is the third largest private sector bank with 2%market share.Kweichow Moutai(China)1.56%
255、Consumer StaplesKweichow Moutai is one of the worlds most valuable liquor companies;it distils the premium high-end baijiu product and with a 300 year history is a very strong brand in China.Sberbank(Russia)1.55%FinancialsSberbank is the largest bank in Russia,accounting for almost 30%of aggregate b
256、anking assets.Trkiye Garanti Bankasi(Turkey)1.51%FinancialsTrkiye Garanti Bankas is Turkeys second largest private bank,providing a wide range of financial services to its 14 million Genesis Emerging Markets Fund Limited38|Contents Strategic Report Governance Report Portfolio Report Financial Statem
257、entsBid Corp(South Africa)1.49%Consumer StaplesBid Corp is a market-leading foodservice business listed in South Africa but operating in many underpenetrated and fragmented markets.Central Pattana(Thailand)1.49%FinancialsCentral Pattana is Thailands largest developer and operator of shopping malls,a
258、ccounting for a quarter of Bankgoks retail market.Sun Pharmaceutical Industries(India)1.48%Health CareSun Pharmaceutical Industries is a specialty pharmaceutical company active in various high growth segments of the industry.|39Genesis Emerging Markets Fund L Contents Strategic Report Governance Rep
259、ort Portfolio Report Financial StatementsThe Portfolioas at 30th June 2017SectorFair Value($000)Proportion of Fund(%)Argentina(2016 0.36%)Banco Macro ADRFinancials 370 0.03 Ternium ADRMaterials 4,307 0.33 4,677 0.36 Brazil(2016 4.15%)BTG Pactual(Preferred)Financials 3,251 0.25 CVC Brasil Operadora E
260、 Agencia De ViagensConsumer Discretionary 2,106 0.16 Grupo Po de Acar ADRConsumer Staples 1,972 0.15 Grupo Po de Acar(Preferred)Consumer Staples 5,491 0.42 Ita Unibanco Holding ADRFinancials 4,757 0.36 Itasa Investimentos Ita(Preferred)Financials 13,698 1.04 LinxInformation Technology 3,222 0.25 Loj
261、as AmericanasConsumer Discretionary 1,688 0.13 Lojas Americanas(Preferred)Consumer Discretionary 2,030 0.15 OdontoPrevHealth Care 4,827 0.37 Rumo LogisticaIndustrials 4,866 0.37 TOTVSInformation Technology 2,302 0.18 Engie BrasilInformation Technology 4,389 0.33 Ultrapar Participaes ADREnergy 3,044
262、0.23 Ultrapar Participaes(Preferred)Energy 5,653 0.43 63,296 4.82 Chile(2016 0.44%)Embotelladora Andina A ADRConsumer Staples 265 0.02 Embotelladora Andina A(Preferred)Consumer Staples 2,196 0.17 Embotelladora Andina B(Preferred)Consumer Staples 3,026 0.23 5,487 0.42 China(2016 16.30%)AIA GroupFinan
263、cials 33,691 2.56 Alibaba Group ADRInformation Technology 27,861 2.12 Anhui Conch Cement AMaterials 10,349 0.79 Anhui Conch Cement HMaterials 2,117 0.16 China Mengniu DairyConsumer Staples 11,953 0.91 China MobileTelecommunications 15,593 1.19 China Overseas Land&InvestmentReal Estate 15,575 1.18 Ge
264、nesis Emerging Markets Fund Limited40|Contents Strategic Report Governance Report Portfolio Report Financial StatementsSectorFair Value($000)Proportion of Fund(%)China(continued)China Resources BeerConsumer Staples 4,920 0.37 Fuyao GlassConsumer Discretionary 4,156 0.32 JD.com ADRConsumer Discretion
265、ary 5,223 0.40 Jiangsu Hengrui Medicine AHealth Care 4,932 0.37 Jiangsu Yanghe Brewery AConsumer Staples 21,115 1.61 Kweichow Moutai AConsumer Staples 20,497 1.56 Midea AConsumer Discretionary 12,693 0.97 TingyiConsumer Staples 12,861 0.98 West China CementMaterials 1,042 0.08 WH GroupConsumer Stapl
266、es 16,439 1.25 221,017 16.82 Colombia(2016 0.45%)BancolombiaFinancials 3,953 0.30 Bancolombia ADRFinancials 1,965 0.15 Bancolombia(Preferred)Financials 522 0.04 PriceSmartConsumer Staples 2,304 0.17 8,744 0.66 Egypt(2016 0.28%)ADES International HoldingEnergy 1,840 0.14 Arabian Food Industries GDRCo
267、nsumer Staples 208 0.02 Commercial International BankFinancials 672 0.05 Commercial International Bank GDRFinancials 133 0.01 Edita Food IndustriesConsumer Staples 1,988 0.15 Edita Food Industries GDR Reg SConsumer Staples 444 0.03 5,285 0.40 Ghana(2016 0.20%)Kosmos EnergyEnergy 3,492 0.27 3,492 0.2
268、7 Greece(2016 0.22%)OPAPConsumer Discretionary 5,088 0.39 5,088 0.39 Hungary(2016 0.41%)OTP BankFinancials 9,236 0.70 9,236 0.70|41Genesis Emerging Markets Fund L Contents Strategic Report Governance Report Portfolio Report Financial StatementsSectorFair Value($000)Proportion of Fund(%)India(2016 14
269、.75%)Axis BankFinancials 20,781 1.58 Cognizant Technology SolutionsInformation Technology 12,935 0.98 Dabur IndiaConsumer Staples 4,423 0.34 Godrej Consumer ProductsConsumer Staples 73 0.01 HDFC BankFinancials 16,134 1.23 Hero MotocorpConsumer Discretionary 4,822 0.37 InfosysInformation Technology 1
270、1,190 0.85 Infosys ADRInformation Technology 10,227 0.78 Kotak Mahindra BankFinancials 25,813 1.96 LupinHealth Care 12,730 0.97 Pidilite IndustriesMaterials 13,720 1.04 Sun Pharmaceutical IndustriesHealth Care 19,473 1.48 Tata Consultancy ServicesInformation Technology 16,348 1.24 168,669 12.83 Indo
271、nesia(2016 0.29%)Bank Central AsiaFinancials 16,851 1.28 Semen Indonesia PerseroMaterials 820 0.06 17,671 1.34 Jordan(2016 0.30%)Hikma PharmaceuticalsHealth Care 9,135 0.69 9,135 0.69 Kenya(2016 0.60%)Equity BankFinancials 5,603 0.43 5,603 0.43 Luxembourg(2016 2.83%)Genesis Smaller Companies SICAV*I
272、nvestment Companies 27,207 2.07 27,207 2.07 Malaysia(2016 0.40%)7 Eleven Malaysia HoldingsConsumer Staples 1,018 0.08 Westports HoldingsIndustrials 2,186 0.16 3,204 0.24 Mauritius(2016 0.57%)ECP Africa Fund II*Investment Companies 5,567 0.42 5,567 0.42 Genesis Emerging Markets Fund Limited42|Content
273、s Strategic Report Governance Report Portfolio Report Financial StatementsSectorFair Value($000)Proportion of Fund(%)Mexico(2016 4.11%)Amrica MvilTelecommunications 8,199 0.62 Amrica Mvil ADRTelecommunications 7,171 0.55 FirstCashFinancials 5,247 0.40 Grupo Financiero BanorteFinancials 13,715 1.04 G
274、rupo Financiero InbursaFinancials 3,792 0.29 Megacable HoldingsConsumer Discretionary 6,342 0.48 TelesitesTelecommunications 1,721 0.13 46,187 3.51 Morocco(2016 0.25%)Attijariwafa BankFinancials 5,265 0.40 5,265 0.40 Netherlands(2016 0.98%)HeinekenConsumer Staples 14,449 1.10 Heineken HoldingConsume
275、r Staples 15,517 1.18 29,966 2.28 Nigeria(2016 1.31%)Dangote CementMaterials 126 0.01 First City Monument BankFinancials 245 0.02 Guaranty Trust BankFinancials 5,974 0.45 Guaranty Trust Bank GDRFinancials 3,775 0.29 Nestle NigeriaConsumer Staples 1,873 0.14 Nigerian BreweriesConsumer Staples 4,090 0
276、.31 16,083 1.22 Peru(2016 1.22%)CredicorpFinancials 17,813 1.36 17,813 1.36 Philippines(2016 1.78%)Bank of Philippine IslandsFinancials 3,016 0.23 Universal RobinaConsumer Staples 13,624 1.04 16,640 1.27 Poland(2016 1.14%)Jeronimo MartinsConsumer Staples 13,917 1.06 13,917 1.06|43Genesis Emerging Ma
277、rkets Fund L Contents Strategic Report Governance Report Portfolio Report Financial StatementsSectorFair Value($000)Proportion of Fund(%)Romania(2016 0.62%)Banca TransilvaniaFinancials 3,520 0.27 NCH Balkan Fund*Investment Companies 7,349 0.56 10,869 0.83 Russia(2016 6.86%)AlrosaMaterials 13,813 1.0
278、5 Global Ports Investments GDR Reg SIndustrials 937 0.07 Lenta GDR Reg SConsumer Staples 4,934 0.38 MagnitConsumer Staples 19,037 1.45 Moscow ExchangeFinancials 2,932 0.22 Novatek GDR Reg SEnergy 22,288 1.70 SberbankFinancials 20,440 1.55 84,381 6.42 South Africa(2016 5.67%)Anglo AmericanMaterials 7
279、,314 0.56 Anglo American(London Listing)Materials 2,685 0.20 Aspen PharmacareHealth Care 18,429 1.40 Bid CorpConsumer Staples 19,619 1.49 Bidvest GroupIndustrials 5,479 0.42 Capevin HoldingsConsumer Staples 532 0.04 DiscoveryFinancials 3,218 0.25 Distell GroupConsumer Staples 3,071 0.23 Mediclinic I
280、nternationalHealth Care 8,527 0.65 NaspersConsumer Discretionary 34,121 2.60 Pick n Pay StoresConsumer Staples 5,387 0.41 Platinum Group MetalsMaterials 41 Standard BankFinancials 6,135 0.47 114,558 8.72 South Korea(2016 9.63%)E-MartConsumer Staples 5,322 0.40 GS RetailConsumer Staples 149 0.01 Kiwo
281、om SecuritiesFinancials 217 0.02 Naver CorpInformation Technology 15,588 1.19 Samsung Electronics(Ordinary)Information Technology 36,338 2.76 Samsung Electronics(Preferred)Information Technology 27,425 2.09 Samsung Fire&Marine Insurance(Ordinary)Financials 30,962 2.36 Genesis Emerging Markets Fund L
282、imited44|Contents Strategic Report Governance Report Portfolio Report Financial StatementsSectorFair Value($000)Proportion of Fund(%)South Korea(continued)Samsung Fire&Marine Insurance(Preferred)Financials 1,390 0.11 Shinhan Financial GroupFinancials 23,070 1.75 140,461 10.69 Switzerland(2016 1.18%)
283、RichemontConsumer Discretionary 9,997 0.76 9,997 0.76 Taiwan(2016 6.20%)MediaTekInformation Technology 9,376 0.71 Taiwan Semiconductor Manufacturing Information Technology 49,459 3.77 58,835 4.48 Thailand(2016 6.57%)Bangkok Dusit Medical Services(Foreign)Health Care 13,055 0.99 Central Pattana(Forei
284、gn)Real Estate 19,509 1.49 CP All(Foreign)Consumer Staples 12,753 0.97 Robinson Department Store(Foreign)Consumer Discretionary 2,441 0.19 Thai BeverageConsumer Staples 12,404 0.94 60,162 4.58 Tunisia(2016 0.20%)Socit de Fabrication des Boissons de TunisieConsumer Staples 2,233 0.17 2,233 0.17 Turke
285、y(2016 2.80%)Anadolu Efes BiracilikConsumer Staples 6,639 0.50 Coca-Cola ?ecekConsumer Staples 2,612 0.20 Trkiye Garanti BankasiFinancials 19,785 1.51 lker Biskvi SanayiConsumer Staples 3,964 0.30 Yapi ve Kredi BankasiFinancials 6,327 0.48 39,327 2.99|45Genesis Emerging Markets Fund L Contents Strat
286、egic Report Governance Report Portfolio Report Financial StatementsSectorFair Value($000)Proportion of Fund(%)United Kingdom(2016 2.70%)Liberty Global LiLAC ATelecommunications 8,015 0.61 Liberty Global LiLAC CTelecommunications 8,068 0.61 Tullow OilEnergy 9,523 0.73 25,606 1.95 Vietnam(2016 0.68%)M
287、ekong Enterprise Fund II*Investment Companies 2,644 0.20 Mobile World InvestmentConsumer Discretionary 2,975 0.22 Vietnam Dairy ProductsConsumer Staples 15,473 1.18 21,092 1.60 Zambia(2016 0.92%)First Quantum MineralsMaterials 2,989 0.23 2,989 0.23 Total Investments 1,279,759 97.38 Net Current Asset
288、s 34,425 2.62 TOTAL NET ASSETS 1,314,184 100.00*Unquoted securities,not traded on an official Stock Exchange or other Regulated Market.Treating Genesis Smaller Companies SICAV on a non-look-through basis.Investee Funds.The Funds investments in non-affiliated investment companies.ADR American Deposit
289、ary Receipt.A negotiable certificate issued by a U.S.bank representing a specific number of shares of a foreign stock traded on a U.S.stock exchange.ADS American Depository Share.The share issued under an American Depository Receipt agreement which is actually traded.GDR Global Depositary Receipt.A
290、negotiable certificate held in the bank of one country representing a specific number of shares of a stock traded on an exchange of another country.NVDR Non-Voting Depositary Receipt.Reg S Security restricted from sale in the US under Regulation S of the Securities Act 1933.These securities may be r
291、esold to investors outside of the USGenesis Emerging Markets Fund Limited46|Contents Strategic Report Governance Report Portfolio Report Financial Statements|47Genesis Emerging Markets Fund L Contents Strategic Report Governance Report Portfolio Report Financial StatementsFinancial SGenesis Emerging
292、 Markets Fund Limited48|Contents Strategic Report Governance Report Portfolio Report Financial StatementsIndependent Auditors Report to the members of Genesis Emerging Markets Fund LimitedReport on the audit of the financial statementsOur opinionIn our opinion,the financial statements give a true an
293、d fair view of the financial position of Genesis Emerging Markets Fund Limited(the“Company”)as at 30 June 2017,and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union and have been pro
294、perly prepared in accordance with the requirements of The Companies(Guernsey)Law,2008.What we have auditedThe Companys financial statements comprise:the Statement of Financial Position as at 30 June 2017;the Statement of Comprehensive Income for the year then ended;the Statement of Changes in Equity
295、 for the year then ended;the Statement of Cash Flows for the year then ended;and the Notes to the Financial Statements,which include a summary of significant accounting policies.Basis for opinionWe conducted our audit in accordance with International Standards on Auditing(“ISAs”).Our responsibilitie
296、s under those standards are further described in the Auditors responsibilities for the audit of the financial statements section of our report.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.IndependenceWe are independent of the Co
297、mpany in accordance with the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants(“IESBA Code”)and SEC Independence Rules that are relevant to our audit of the financial statements.We have fulfilled our other ethical responsibilities in accordance with the
298、 IESBA Code and SEC Independence Rules.Our audit approachOverviewMateriality Overall Company materiality was$13.1 million which represents 1%of net assets.Audit scope The Company is incorporated and based in Guernsey.We conducted our audit of the financial statements from information provided by JP
299、Morgan Administration Services(Guernsey)Limited(the Administrator)to whom the board of directors has delegated the provision of certain functions.We also had significant interaction with Genesis Investment Management,LLP(the“Investment Advisor”)in completing aspects of our audit work.We conducted al
300、l of our audit work in Guernsey.We tailored the scope of our audit taking into account the types of investments within the Company,the accounting processes and controls,and the industry in which the Company operates.Key audit matters Valuation and existence of investments Completeness and accuracy o
301、f revenue from dividend income|49Genesis Emerging Markets Fund L Contents Strategic Report Governance Report Portfolio Report Financial StatementsAudit scopeAs part of designing our audit,we determined materiality and assessed the risks of material misstatement in the financial statements.In particu
302、lar,we considered where the directors made subjective judgements;for example,in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain.As in all of our audits,we also addressed the risk of management override of intern
303、al controls,including among other matters,consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the financial statements as a whole
304、,taking into account the structure of the Company,the accounting processes and controls,and the industry in which the Company operates.Materiality The scope of our audit was influenced by our application of materiality.An audit is designed to obtain reasonable assurance whether the financial stateme
305、nts are free from material misstatement.Misstatements may arise due to fraud or error.They are considered material if individually or in aggregate,they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.Based on our professional j
306、udgement,we determined certain quantitative thresholds for materiality,including the overall Company materiality for the financial statements as a whole as set out in the table below.These,together with qualitative considerations,helped us to determine the scope of our audit and the nature,timing an
307、d extent of our audit procedures and to evaluate the effect of misstatements,both individually and in aggregate on the financial statements as a whole.Overall Company materiality$13.1 millionHow we determined it1%of net assetsRationale for the materiality benchmarkWe believe that net assets is the m
308、ost appropriate benchmark because this is the key metric of interest to members.We agreed with the Audit Committee that we would report to them misstatements identified during our audit above$0.7 million,as well as misstatements below that amount that,in our view,warranted reporting for qualitative
309、reasons.Key audit mattersKey audit matters are those matters that,in our professional judgment,were of most significance in our audit of the financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as a whole,and in forming our o
310、pinion thereon,and we do not provide a separate opinion on these matters.Key audit matterHow our audit addressed the Key audit matterValuation and existence of investmentsInvestments at the year-end of$1.28 billion are measured at fair value and are a portfolio of primarily quoted securities from em
311、erging markets(see Note 10).Investments make up the majority of the Statement of Financial Position and there is a risk that an incorrect valuation could have a significant impact on the overall net assets of the Company or that the Company does not have ownership of them.We agreed 100%of the prices
312、 of quoted investments in equity securities at year-end to independent pricing sources.As the investments in Investee Funds were unquoted,we agreed 100%of the values of investments in Investee Funds at year-end to confirmations of value received directly from the Investee Funds administrators.We als
313、o received the most recent set of audited financial statements of the Investee Funds and(1)reviewed the audit opinion for any modifications or qualifications and(2)agreed any differences in value from the reported capital account balance of Investee Funds to the audited financial statements.As the m
314、ajority of Investee Funds audited financial statements are not prepared as at 30 June 2017 this enables us to assess the reasonableness of the unaudited capital accounts.We tested the existence of 100%of the investment portfolio by agreeing the holdings for investments to an independent confirmation
315、 from the custodian.No misstatements or differences were identified by our testing which required reporting to those charged with Genesis Emerging Markets Fund Limited50|Contents Strategic Report Governance Report Portfolio Report Financial StatementsCompleteness and accuracy of revenue from dividen
316、d income Dividend income for the year was$30 million(see Statement of Comprehensive Income).The investment portfolio is in emerging markets and the risk exists that not all dividend information is captured or recognised in the correct period.We understood and assessed the design and implementation o
317、f key controls surrounding income recognition.We tested dividend income by agreeing the dividend rates for a sample of investments in the dividend income ledger to independent third party sources.To test for completeness of dividend income,we confirmed that the appropriate dividends had been receive
318、d in the year by reference to independent data of dividends declared for a sample of investment holdings in the portfolio.We also reviewed the year-end bank reconciliations and the aged-debtors listing.No misstatements or differences were identified by our testing which required reporting to those c
319、harged with governance.Other informationThe directors are responsible for the other information as listed on the Table of Contents page of the Annual Report(but does not include the financial statements and our auditors report thereon).Other than as specified in our report,our opinion on the financi
320、al statements does not cover the other information and we do not express any form of assurance conclusion thereon.In connection with our audit of the financial statements,our responsibility is to read the other information identified above and,in doing so,consider whether the other information is ma
321、terially inconsistent with the financial statements or our knowledge obtained in the audit,or otherwise appears to be materially misstated.If,based on the work we have performed,we conclude that there is a material misstatement of this other information,we are required to report that fact.We have no
322、thing to report in this regard.Responsibilities of directors for the financial statementsThe directors are responsible for the preparation of financial statements that give a true and fair view in accordance with International Financial Reporting Standards as adopted by the European Union,the requir
323、ements of Guernsey law and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement,whether due to fraud or error.In preparing the financial statements,the directors are responsible for assessing the
324、Companys ability to continue as a going concern,disclosing,as applicable,matters relating to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations,or have no realistic alternative but to do so.Auditors respons
325、ibilities for the audit of the financial statementsOur objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,whether due to fraud or error,and to issue an auditors report that includes our opinion.Reasonable assurance is a
326、 high level of assurance,but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if,individually or in aggregate,they could reasonably be expected to influ
327、ence the economic decisions of users taken on the basis of these financial statements.As part of an audit in accordance with ISAs,we exercise professional judgment and maintain professional scepticism throughout the audit.We also:Identify and assess the risks of material misstatement of the financia
328、l statements,whether due to fraud or error,design and perform audit procedures responsive to those risks,and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.The risk of not detecting a material misstatement resulting from fraud is higher than for one resul
329、ting from error,as fraud may involve collusion,forgery,intentional omissions,misrepresentations,or the override of internal control.Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances,but not for the purpose
330、of expressing an opinion on the effectiveness of the Companys internal control.Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.Conclude on the appropriateness of the directors use of the going conce
331、rn basis of accounting and,based on the audit evidence obtained,whether a material uncertainty exists related to events or conditions that may|51Genesis Emerging Markets Fund L Contents Strategic Report Governance Report Portfolio Report Financial Statementscast significant doubt on the Companys abi
332、lity to continue as a going concern.If we conclude that a material uncertainty exists,we are required to draw attention in our auditors report to the related disclosures in the financial statements or,if such disclosures are inadequate,to modify our opinion.Our conclusions are based on the audit evi
333、dence obtained up to the date of our auditors report.However,future events or conditions may cause the Company to cease to continue as a going concern.Evaluate the overall presentation,structure and content of the financial statements,including the disclosures,and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.We commu
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