1、ANNUALFINANCIALREPORTFOR THE YEAR ENDED 30thJUNE 2015EMERGING MARKETS FUND LIMITEDGENESISEMERGINGMARKETSFUNDLIMITED1PageINTRODUCTION.2HIGHLIGHTS.3DIRECTORS.5MANAGEMENTREPORTCHAIRMANSSTATEMENT.7DIRECTORS REPORT.10MANAGERSREVIEW.22TWENTYLARGESTHOLDINGS.25COUNTRYEXPOSURE OF THEPORTFOLIO.28SECTOREXPOSUR
2、E OF THEPORTFOLIO.29THEPORTFOLIO.30INDEPENDENTAUDITORS REPORT.37STATEMENT OFFINANCIALPOSITION.39STATEMENT OFCOMPREHENSIVEINCOME.40STATEMENT OFCHANGESINEQUITY.41STATEMENT OFCASHFLOWS.42NOTES TO THEFINANCIALSTATEMENTS.43ALTERNATIVEINVESTMENTFUNDMANAGERSDIRECTIVEDISCLOSURE.65PERFORMANCERECORD.66ADMINIS
3、TRATION.68NOTICE OFMEETING.69NOTE:All reference to US dollars or$throughout this report are to the United States currency.OBJECTIVEThe investment objective of the Fund is to achieve capital growth over the medium tolong term,primarily through investment in equity securities quoted on Emerging Market
4、s.STRUCTUREGenesis Emerging Markets Fund Limited(the Fund or GEMF)is a Guernsey basedAuthorised Closed-Ended Investment Scheme with the ability to issue additional shares.The Funds shares are listed on the premium segment of the Official List of the UKListing Authority,traded on the London Stock Exc
5、hange and are included in the FTSE250.The number of Participating Preference Shares outstanding is 134,963,060 as at30thJune 2015(30thJune 2014:134,963,060).MANAGERGenesis Asset Managers,LLP(the Manager or Genesis).INVESTMENT APPROACHThe investment approach is to identify companies which are able to
6、 take advantage ofgrowth opportunities in emerging markets and invest in them when they are trading atan attractive discount to the Managers assessment oftheir intrinsic value.NEW SHARESShares may be issued twice monthly subject to the following conditions:i)the Fund is invested as to at least 75%in
7、 emerging market securities;ii)the Fund will only issue new shares if it is unable,on behalf of the new subscriber,to acquire shares in the secondary market at a price equivalent to or below the priceat which new shares would be issued;andiii)the issued share capital of the Fund is not increased by
8、more than 10%in any twelvemonth period.2INTRODUCTION30thJune30thJune20152014%changePublished net asset value*771.4m780.1m(1.1)Published net asset value per Participating Preference Share*5.725.78(1.1)Published net asset value per Participating Preference Share*US$8.99US$9.88(9.0)Share price5.045.43(
9、7.2)Discount11.8%6.1%Ongoing charges ratio1.41%1.67%Countries represented in portfolio4141Stocks in portfolio162166Year toYear to30thJune 201530thJune 2014LowHighLowHighShare price4.985.834.775.57Net asset value5.416.425.195.90Discount/(premium)14.0%3.0%10.3%0.1%ReturnsAnnualised1 Year3 Year5 YearSi
10、nce Inception%Fund share price(7.2)2.22.011.2Fund NAV(net of fees)(1.1)3.63.311.7MSCI EM(TR)3.54.03.09.7MSCI World(TR)10.914.812.67.3Past performance is no guarantee of future performance.*Figures are based on the last traded price for investments.3HIGHLIGHTS4HIGHLIGHTSCONTINUEDFFu un nd d N N.A A.V
11、 V.MMS SC CI IE EMM(T TR R)S Se ec co on nd da ar ry y m ma ar rk ke et t p pr ri ic ce e6 60 0.0 08080.0 010100 0.0 0120120.0 01 14 40 0.0 03 30 0.0 06 6.1 10 03 30 0.0 06 6.1 11 12 29 9.0 06 6.1 12 22 28 8.0 06 6.1 13 33 30 0.0 06 6.1 14 43 30 0.0 06 6.1 15 5V Va al lu ue e(r re eb ba as se ed d t
12、 to o 1 10 00 0 o on n 3 30 0t th hJ Ju un ne e 2 20 01 10 0)1 11 17 7.8 81 11 16 6.0 01 11 10 0.5 5(2 2.0 0)%)%0 0.0 0%2 2.0 0%4 4.0 0%6 6.0 0%8 8.0 0%1 10 0.0 0%1 12 2.0 0%1 14 4.0 0%3 30 0.0 06 6.1 10 03 30 0.0 06 6.1 11 12 29 9.0 06 6.1 12 22 28 8.0 06 6.1 13 33 30 0.0 06 6.1 14 43 30 0.0 06 6.1
13、 15 5A Av ve er ra ag ge e7 7.0%0%1 11 1.8 8%Performance last 5 Years*Discount to NAV last 5 Years*Based on month-end Net Asset ValuesCOEN TEULINGS(Chairman)Coen Teulings(Dutch)is based in Belgium and is Chairman of Merifin Capital,an independent European privategroup investing worldwide in diversif
14、ied industries.He was formerly with leading merchant bank Kleinwort Benson inLondon and prior to this with Heineken Breweries in Amsterdam.He is or has been a Director of Charterhouse Group,Inc.(New York),Viscardi AG(Munich),TMW Immobilien AG(Munich),The International Yehudi MenuhinFoundation(Brusse
15、ls)and The American European Community Association(Brussels).He serves or has served onthe Advisory Board of TCR Capital(Paris),Activa Capital(Paris),von Braun&Scheiber(Munich),Arsenal Capital(New York)and Red Abbey(Baltimore).SUJIT BANERJISujit Banerji(Indian)is an independent advisor on corporate
16、strategy to a number of companies in the finance,andfinance-related technology sectors globally.In 2009 he completed a 33 year career at Citigroup where he had been aManaging Director since 1996,latterly serving as Head of Strategy and Institutional M&A for Europe,the MiddleEast and Africa(MENA).His
17、 career at Citi covered a number of regional roles including strategy and corporatefinance,and relationships with multinational clients across the MENA region.He has also served as the country andregion head for Citi in India,and as the head of the corporate business in Thailand.An Indian national,o
18、ver thecourse of his career he has been based in India,Bangladesh and Thailand as well as in Europe,and is currently basedin Singapore.He was educated at the University of Poona(Pune)and the University of Bombay(Mumbai).MICHAEL HAMSONMichael Hamson was born in Scotland but is now an Australian citiz
19、en and based in Melbourne.He was a Directorof Newmont Mining Inc.for eleven years until 2012,and is Chairman of Hamson Consultants Pty Ltd andTechnology Venture Partners,as well as a number of other companies.Michael was the former Deputy Chairman ofNormandy Mining Limited and was the founding partn
20、er,Chief Executive and Joint Chairman of McIntosh GriffinHamson&Co(now Merrill Lynch Australia),a leading stockbroker in Australia.SAFFET KARPAT*Saffet Karpat(Swiss/Turkish)is based in Istanbul and is a member of the executive committee of Turkish food companySta and a board member of Eczacba,a Turk
21、ish conglomerate.Previously he was General Manager for Procter&Gambles business inTurkey and the Caucasian and Central Asian Republics.He started his career at Procter and Gamblein 1983 and after fulfilling Finance Director positions based in Egypt and Saudi Arabia,he then served as FinanceDirector
22、for Central and Eastern Europe,the Middle East and Africa.He was educated at the University of Istanbuland Lausanne University.DR.JOHN LLEWELLYNDr.John Llewellyn(British)is the founder of Llewellyn Consulting,a London-based consultancy specialising inmacroeconomics and environmental economics.From 1
23、995 to 2008 he was Global Chief Economist and then SeniorEconomic Policy Advisor at Lehman Brothers.Previously he spent seventeen years at the OECD in Paris,in chargeof international economic forecasting and policy analysis and,latterly,as Head of the Secretary-Generals Private Office(Chief of Staff
24、).Prior to that,Dr.Llewellyn spent ten years in academia(University of Cambridge).Member of Audit Committee*Chairman of Audit Committee5DIRECTORSHLNE PLOIXHlne Ploix(French)is Chairman of Paris-based private equity firm Pechel Industries.She has had an extensive careerin finance and investment in th
25、e public and private sectors,both in France(primarily at the French state-owned Caissedes Dpts et Consignations)and internationally(notably as an Executive Director at the IMF,World Bank and as aMember of the Investments Committee of the UN Joint Staff Pension Fund).She is currently a Non-Executive
26、Directorof Lafarge and Sofina(Brussels),Non-Executive Chairman of Sogama Crdit Associatif and was previously at a numberof other companies,including The Boots Company PLC,BNP Paribas and Publicis.Mrs Ploix was educated at theInstitut dEtudes Politiques,the University of California at Berkeley and IN
27、SEAD.RUSSELL EDEY(appointed 1stJanuary 2015)Russell Edey(British)spent the majority of his career at NM Rothschild&Sons,where he held a number of positionsover his 35 years at the bank,including Head of Corporate Finance and subsequently Non-Executive Deputy Chairman.He currently serves as Chairman
28、of Avocet Mining plc,and is a Non-Executive Director of BlackrockWorld MiningTrust plc.He previously spent 12 years as Chairman of AngloGold Ashanti in South Africa,and in recent years hehas also served as a Non-Executive Director of Old Mutual plc,Associated British Ports plc,FKI plc,and Paris Orle
29、ansSA.He qualified as a Chartered Accountant and began his career in finance at Anglo American in South Africa.Heis based in the UK.Member of Audit Committee*Chairman of Audit Committee6DIRECTORSCONTINUEDI have pleasure in presenting to shareholders the twenty-sixth Annual Report of the Genesis Emer
30、ging Markets Fund Limited,for the year ended 30thJune 2015.PerformanceEmerging markets have been a source of nervousness for investors over the last twelve months.Local political issues(including political scandal in Brazil and geopolitical tension in Russia)have combined with global economic issues
31、(suchas Chinas declining growth,substantial falls in commodity prices and potential interest rate rises in the developed world)to reduce the appetite for emerging markets that many investors perceive as volatile.The impact of this on the MSCI EM(TR)Index was a fall of 4.8%in US dollar terms over the
32、 year(with this declinealmost entirely concentrated into the second half of the 2014 calendar year).From a UK investor perspective,however,thisresult translated to a gain of 3.5%in sterling terms as the dollar strengthened considerably against most other currenciesover the period.Against this index
33、performance environment,the Funds net asset value per share(NAV)declined slightly,from 5.78 to5.72,representing a return of-1.1%for shareholders.The share price amid the negative sentiment around emergingmarkets in general fell by 7.2%,with the discount correspondingly widening from 6.1%.to 11.8%.Na
34、turally the Board reviews the portfolio with the Manager as part of their regular Board Meetings to understand the reasonsbehind the Funds investment performance.But while the focus of this Report and Accounts is specifically performance overthe last twelve months,shareholders should be aware that t
35、he objective of the Fund is to generate consistent returns over alonger-term horizon than just a single year.Results over these longer time-periods are therefore also a fundamental elementof our discussions with the Manager.The Funds Portfolio and the ManagerA key part of the Boards role is to engag
36、e regularly with the Manager in order to assess its ongoing ability to generatereturns for shareholders through the Funds investments in emerging markets.The Managers fundamental approach is toinvest in companies it feels are sufficiently high quality to generate attractive returns over at least a f
37、ive-year horizon,butwhich the market appears to be pricing too cheaply.This investment approach has consistently added value for shareholdersover the life of the Fund,and while we are of course extremely aware that the Funds relative performance over the pastthree to five years is weaker than it has
38、 been for some time,the Board continues to believe that the investment approachremains appropriate and has confidence in the Managers ability to generate stable long term performance through the cyclicalswings that characterise markets,particularly those in the developing world.The Funds portfolio c
39、onsists of a diversified group of companies from a large number of emerging market countries,andincludes a significant number of smaller companies(although shareholders will note that within this structure a highproportion of the portfolio is concentrated in a number of larger businesses in which th
40、e Manager holds particularly strongconviction).The average holding period for companies in the Funds portfolio is currently over seven years,with turnoverat around 22%over the last twelve months.These attributes reflect the Managers long-term fundamental approach.CHAIRMANSSTATEMENT7Covering what has
41、 been a difficult environment for emerging market investors,the Managers Review which follows theDirectors Report elaborates on the portfolio activity,and explains the reasons for the disappointing performance relative tothe MSCI EM(TR)index during the year.As noted previously in the Half Year Repor
42、t,the management fee payable to the Manager was reduced to 1.25%(from1.50%)per annum,with effect from 1stJanuary 2015.The Board of DirectorsIn the Funds Half Year Report six months ago I noted the appointment of Russell Edey as a Director at the beginning ofthe year.His long career in banking includ
43、ed particular experience with the mining industry,and this specialist knowledgehas further widened the Boards range of business expertise.Mr Edey has also been appointed as a member of the AuditCommittee,with effect from the Committees Meeting in June 2015,when I retired from the Audit Committee.Mr
44、Edey will formally stand for election at this years Annual General Meeting(AGM),along with five other members ofthe Board who in accordance with the requirements of the AIC Code of Corporate Governance and the UK CorporateGovernance Code are required to retire and stand for re-election each year.I w
45、ish to inform shareholders,however,that I will not be standing for re-election in October.It has been a great honour,and a pleasure,to have been so closely associated with the Fund and its shareholders for many years,including the last tenas the Funds Chairman,and I would like to express my thanks t
46、o shareholders for their generous support over that time.Naturally I have the utmost confidence in my six fellow Directors and their ability to continue to meet shareholdersexpectations and protect their interests appropriately.I trust therefore that shareholders will feel able to vote in favour oft
47、he re-election of all Directors at this years AGM,allowing them to continue to serve as members of the Board of theFund.The Directors will next meet formally in early October,at which point my successor as Chairman will be selectedand formally approved by the Board,and the decision announced to shar
48、eholders.AGM and Shareholder MeetingThe notice convening the AGM to be held on 29thOctober 2015 in Guernsey can be found at the end of this AnnualFinancial Report,along with the schedule of resolutions to be considered.As always we strongly encourage all shareholdersto vote on the resolutions,reflec
49、ting their support for the Fund.Accompanying this Report is an invitation to the Funds Information Meeting,which will take place on 29thOctober at theInvestment Advisers office in London.This will provide an opportunity for shareholders to hear directly from representativesof the Manager,and we hope
50、 that as many as possible will be able to do so.CHAIRMANSSTATEMENTCONTINUED8OutlookThe outlook for equity investments in emerging markets remains uncertain.It has been apparent for some while(and hasbeen noted in these pages)that the companies that in aggregate make up the Funds(potential)holdings c
51、ontinue to facea number of challenges and the prospect of lower profitability as competition increases and more obvious business penetrationopportunities gradually decline.Chinas growth and its impact on the rest of the world remains a headline concern.It is also true that historically USinterest ra
52、te“normalisation”tends to be associated with crises in emerging markets and,sadly,not enough countries haveimplemented the necessary reforms over the mostly benign environment of the last decade that may have mitigated theheightened risks.The Managers Review on page 22 touches on some of these theme
53、s and also makes the point that despite disappointingperformance in recent years,the fact that much of it was due to the weakness of emerging market currencies against theUS dollar means that many companies are still not necessarily cheap in their own local context.All that said,we continue to share
54、 the Managers confidence in the high quality of the companies invested in by the Fund,and their potential to generate returns for shareholders over the next several years.There are some exciting developments inparts of the opportunity set(thinking in particular of businesses in the Chinese A-share m
55、arket that appear to be attractivelong term investments notwithstanding the volatility which has been a characteristic of this market in recent months and in which the Fund has taken some meaningful positions over the last two years).And as we have noted on previousoccasions,the challenging global e
56、nvironment provides an excellent opportunity for good businesses to outperform their peersand gain market share.Stock selection remains a key skill in such an environment,and the Board believes that the Managers approach and processwill continue to generate the long-term returns that our shareholder
57、s have come to expect.Coen TeulingsChairmanSeptember 20159CHAIRMANSSTATEMENTCONTINUED10DIRECTORSREPORTThe Directors are pleased to present their twenty sixth Annual Financial Report of the Fund,covering the year ended30thJune 2015.STRATEGY AND BUSINESS MODELFund ObjectiveThe investment objective of
58、the Fund is to achieve capital growth over the medium to long term,primarily throughinvestment in equity securities quoted on Emerging Markets.StrategyThe core element of our strategy is to appoint and retain a high quality manager whose investment philosophy best matchesthe Funds objective and care
59、fully monitor the Funds performance.Genesis,the Funds Manager,believe that superior long-term investment returns in emerging market equities are deliveredby identifying underpriced companies through independent research and disciplined analysis,and by using a bottom-upinvestment approach to create a
60、 diversified portfolio.They believe it is necessary to be patient to achieve these returns,andtherefore invest with at least a five-year time horizon.Business Model and Investment ProcessThe Fund has no employees or premises and the Board is comprised of non-executive Directors.The day-to-day operat
61、ionsand 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 theCustodian and JP Morgan Administration Services(Guernsey)
62、Limited was the Administrator and Company Secretary.The Board regularly reviews the performance and risks of its primary service providers and that they have appropriateframeworks in place for the oversight of their internal controls,monitoring and reporting.The Managers investment process aims to i
63、dentify those companies best able to take advantage of emerging market growthopportunities and which are found to be trading at an attractive discount to their assessed intrinsic value.This leads theportfolio to have a growth component(containing companies with entrepreneurial management,attractive
64、volume growthprospects and high returns on incremental capital investment),as well as a value component(where the companies haveestablished market positions,healthy balance sheets and strong cashflows).As an investor in emerging markets,the Managerlooks to take advantage of:Structural Changes:the na
65、tural course of economic development creates a dynamic investment environment,but one inwhich the opportunities are unlikely to be captured by those investors focused on the short term,as changes will unfoldover years rather than months;Change at the Corporate Level:structural changes are unlikely t
66、o be universally beneficial to companies,but can leadto a more competitive operating environment which challenges management and widens the disparities between individualcompanies,thus providing further opportunities for investors;and11DIRECTORSREPORTCONTINUEDSTRATEGY AND BUSINESS MODEL(continued)St
67、ockmarket Inefficiencies:for various reasons,including less publicly available analysis,emerging markets tend to beless efficient at pricing shares than developed markets.Detailed analysis enables the Manager to identify those stockswhich are selling at the greatest discount to their assessed intrin
68、sic value.The portfolio is diversified and will typically have approximately 140-170 individual positions,across a large number ofemerging market countries(many of which are not represented in the standard indices).These holdings include a substantialnumber of smaller companies in emerging markets,w
69、hich in general the Manager feels can be a source of particularly attractivelong-term investment opportunities.In terms of internal weighting constraints the Manager specifies a 5%limit in anyindividual stock and a 25%limit in any country,at the time of purchase.In line with the Funds long-term inve
70、stment horizon,portfolio turnover is low;typically of the order of 20-25%per annum.The weighted average holding period of positions within the portfolio is currently over seven years.The portfolios investments are primarily listed equity securities.However,the Fund also holds positions in Genesis af
71、filiatedinvestment companies,Participatory notes and Investee Funds,where appropriate.Details of the Funds portfolio are shownon pages 30 to 36.The Fund does not engage in any active management of foreign currency risk and the portfolio is unleveraged(refer to notes13(b)and 13(d)respectively).FINANC
72、IAL PERFORMANCEResultsThe total loss for the year for the Fund amounted to$120,705,000 compared to a total gain of$188,714,000 in theprevious year.Refer to the Managers Review on pages 22 to 24 for an explanation of the Funds performance.The Directorsdo not recommend the payment of a dividend in res
73、pect of the year ended 30thJune 2015(2014:nil).Capital ValuesAt 30thJune 2015,the value of Equity Shareholders Funds was$1,213,314,000(2014:$1,334,019,000)a reduction of$120,705,000.The Net Asset Value per Participating Preference Share was$8.99(2014:$9.88).Key Performance IndicatorsThe Highlights s
74、ection on pages 3 and 4 show the Funds Key Performance Indicators including its performance and discountto its NAV over the last five years.PRINCIPAL RISKS AND RISK MANAGEMENTThe main risks to the value of its assets arising from the Funds investment in financial instruments are unanticipated advers
75、echanges in market prices and foreign currency exchange rates and an absence of liquidity.The Board reviews and agrees withthe Manager policies for managing each of these risks and they are summarised on the following page.These policies haveremained unchanged since the beginning of the period to wh
76、ich these financial statements relate.12DIRECTORSREPORTCONTINUEDPRINCIPAL RISKS AND RISK MANAGEMENT(continued)Volatility of emerging markets and market riskThe economies,currencies and the financial markets of a number of developing countries in which the Fund invests maybe extremely volatile.To man
77、age the risks posed by adverse price fluctuations the Funds investments are geographicallydiversified,and will continue to be so.The Fund will not invest more than 25%of its assets(at the time the investment ismade)in any one country.Further,the exposure to any one company or group(other than an inv
78、estment company,unittrust or mutual fund)is unlikely to exceed 5%of the Funds net assets at the time the investment is made.The Articles ofIncorporation place a limit of 10%for securities issued by one company but the Directors use 5%for monitoring purposes.Foreign currency exposureThe Funds assets
79、will be invested in securities of companies in various countries and income will be received by the Fundin a variety of currencies.However,the Fund will compute its net asset value and make any distributions in US dollars.Thevalue of the assets of the Fund as measured in US dollars may be affected f
80、avourably or unfavourably by fluctuations incurrency rates and exchange control regulations.Further,the Fund may incur costs in connection with conversions betweenvarious currencies.Lack of liquidityTrading volumes on the stock exchanges of developing countries can be substantially less than in the
81、leading stockmarketsof the developed world and trading may even be temporarily suspended during certain periods.This lower level of liquidityexaggerates the fluctuations in the value of investments described previously.The restrictions on concentration and thediversification requirements detailed ab
82、ove also serve normally to protect the overall value of the Fund from the risks createdby 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 risk.Custody risk is the risk of loss of securities held incustod
83、y occasioned by the insolvency or negligence of the Custodian.Although an appropriate legal framework is in placethat eliminates the risk of loss of value of the securities held by the Custodian,in the event of its failure,the ability of theFund to transfer the securities might be temporarily impair
84、ed.The day-to-day management of these risks is carried out bythe Manager under policies approved by the Board.CORPORATE GOVERNANCEThe Board is accountable to shareholders for the governance of the Funds affairs.The Directors use this Report to detailthe Funds corporate governance statement.The Fund
85、is a member of the Association of Investment Companies(AIC)and the Board has considered the principlesand recommendations of the 2012 AIC Code of Corporate Governance(AIC Code)by reference to the AIC CorporateGovernance Guide for Investment Companies(AIC Guide).The AIC Code addresses all the princip
86、les set out in the UKCorporate Governance Code,as well as setting out additional principles and recommendations on issues that are of specificrelevance to the Fund.13DIRECTORSREPORTCONTINUEDCORPORATE GOVERNANCE(continued)As a Guernsey incorporated company listed on the London Stock Exchange within t
87、he FTSE 250,the Fund is required tocomply with Listing Rule 9.8.7(for overseas incorporated companies).This requires the Fund to state how it has appliedthe main principles set out in the 2012 UK Corporate Governance Code and whether it has complied with these provisionsthroughout the accounting per
88、iod.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 the GFSC,in the conte
89、xt of the nature,scale and complexity of thebusiness.The Board considers that by adhering to the principles and recommendations of the AIC Code,the Fund complies withthe 2012 UK Corporate Governance Code and the Guernsey Code.Statement of complianceThe Directors believe that during the year under re
90、view,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 2012 UK Corporate Governance Code and GuernseyCode except as noted below.The role of Chief ExecutiveSince all Directors are non-executive and day-to-day ma
91、nagement responsibilities are sub-contracted to the Manager,theFund does not have a Chief Executive.Executive Directors remunerationAs the Board has no Executive Directors,it is not required to comply with the principles of the 2012 UK CorporateGovernance Code in respect of Executive Directors remun
92、eration and does not have a Remuneration Committee.Internal audit functionAs the Fund delegates to third parties its day-to-day operations and has no employees,the Board has determined thatthere is no requirement for an internal audit function.The Directors annually review whether a function equival
93、ent tointernal audit is needed and will continue to monitor the Funds systems of internal controls in order to provide assurancethat they operate as intended.14DIRECTORSREPORTCONTINUEDTHE BOARDThe Board,chaired by Coen Teulings,consists of non-executive Directors,all of whom are considered to be ind
94、ependentof the Manager.The biographies of the Directors are shown on pages 5 and 6.Coen Teulings and Michael Hamson haveserved on the Board for more than nine years and continue to perform their duties independently.The Board has consistedof no more than seven Directors during the year and the Board
95、 feels that given its size and the fact that the Directors donot have executive roles,it is not necessary to appoint a Senior Independent Director or to establish separate Remunerationor Management Engagement Committees.The Audit Committee is chaired by Saffet Karpat and has formally delegated dutie
96、sand responsibilities with written terms of reference,which are available on request from the Manager.All seven Directorsform the Nomination Committee,chaired by Coen Teulings.The Board regularly reviews both the performance of,and the contractual arrangements with the Manager,and is satisfiedthat t
97、he continuing appointment of the Manager is in the best interests of shareholders.The management agreement setsout matters over which the Manager has authority and includes management of the Funds assets and the provision ofadministrative duties,including accounting,secretarial and administrative se
98、rvices.The agreement further permits the Managerto delegate its administrative duties,subject to the Boards prior consent.All other matters are reserved for the approval ofthe Board.Under this agreement,the Manager is entitled to receive a management fee from the Fund,payable monthly,equalto 1.25%pe
99、r annum,calculated and accrued on the Net Asset Value of the Fund as at each Valuation Day.The Managersappointment is under a rolling contract which may be terminated by three months written notice given by the Fund,andtwelve months written notice given by the Manager.As noted on page 18,the Audit C
100、ommittee reviews the performance of,and the contractual arrangements with theAdministrator and the Custodian.The Board is satisfied that the continuing appointment of the Administrator and theCustodian is in the best interests of shareholders.The Board meets at least three times during the year and
101、between these meetings there is regular contact with the Managerwho provides the Board with appropriate and timely information.Attendance at those meetings is given in the table below.Board MeetingsAudit CommitteeDirectorAttendedMeetings AttendedCoen Teulings32Sujit Banerji3n/aRussell Edey(appointed
102、 1stJanuary 2015)21Michael Hamson33Saffet Karpat33Dr.John Llewellyn3n/aHlne Ploix3n/a15DIRECTORSREPORTCONTINUEDTHE BOARD(continued)Board appointments and re-electionAll members of the Board consider new Board appointments.The Chairman,Manager or other appropriate persons providenew appointees to the
103、 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 skills and experience appropriate to therequirements of the Fund and that a new Director has enough time available to properly fu
104、lfil their duties.The Directorsalso have access,where necessary in the furtherance of their duties,to independent professional advice at the Funds expense.Directors are initially appointed until the following Annual General Meeting when,under the Funds Articles of Incorporation,it is required that t
105、hey be elected by shareholders.Rusell Edey was appointed as a Director from 1stJanuary 2015 and replaced Coen Teulings on the Audit Committee from10thJune 2015.All of the Directors are retiring in accordance with the AIC Code and,with the exception of Coen Teulings,will offerthemselves for re-electi
106、on.As each Director has maintained their effectiveness and commitment to the Fund,the Boardendorses them and commends their re-election to the shareholders.The Board evaluates its performance on an annual basis,and considers that the blend of skills,experience,age,gender andlength of service is appr
107、opriate for the requirements of the Fund.In accordance with the AIC Code,an independent evaluationof the Boards performance is carried out and the next tri-annual review will be in 2016.The Board is aware of therequirements of the 2012 UK Corporate Governance Code and regularly reviews its successio
108、n plan.As noted in theChairmans Statement,the Funds new Chairman will be appointed,and the decision approved and announced,in earlyOctober.Directors remunerationThe Directors are entitled to receive fees for their services which shall not exceed$400,000,exclusive of relevant expenses,in aggregate pe
109、r annum.This was approved by Shareholders at the AGM on 2ndNovember 2012 and can only be amendedby Shareholder approval at a general meeting.The level of Directors Fees is independently assessed and was last reviewed in 2013.Each Director receives 30,000 perannum,with a further 5,000 per annum for A
110、udit Committee Directors and a further 10,000 per annum for theChairman.Such remuneration is deemed to accrue on a daily basis.The Directors are also entitled to be paid all travelling,hotel and other expenses properly incurred by them in attendingand returning from meetings of the Directors or any
111、committee of the Directors or General Meetings of the Fund or inconnection with the business of the Fund.16DIRECTORSREPORTCONTINUEDTHE BOARD(continued)Directors interestsThe Directors listed on pages 5 and 6 served throughout the year under review(except Russell Edey who was appointedon 1stJanuary 2
112、015).The following(who were Directors during the financial year)had a beneficial interest in the sharecapital of the Fund at 30thJune 2015:Beneficial interestin ParticipatingPreference Shares atDirectors30thJune 2015Coen Teulings40,000Sujit Banerji10,000Michael Hamson(including family interests)8,70
113、0Saffet Karpat20,000Hlne Ploix7,690Directors insurance and indemnificationDirectors and Officers liability insurance cover is held by the Fund to cover Directors against certain liabilities that mayarise in the course of their duties.AUDIT COMMITTEEThe Board has established an Audit Committee whose
114、responsibilities are,inter alia:To review the draft Annual and Half Year Financial Reports;To review the Funds accounting policies and any significant financial reporting judgements;To monitor and review the internal financial control and risk management systems on which the Fund is reliant;To provi
115、de advice to the Board on whether they consider the Annual Financial Report,taken as a whole,is fair,balancedand understandable;To make recommendations to the Board in relation to the appointment of external auditors;To monitor the independence and objectivity of external auditors;andTo review the a
116、udit fees,terms of engagement and provision of non-audit services by the external auditor.The Audit Committee usually meets twice a year to review the Annual and Half Year Financial Reports,audit timetable andother risk management and governance matters.It may meet more often if deemed necessary,or
117、if required by the Funds auditors.17DIRECTORSREPORTCONTINUEDAUDIT COMMITTEE(continued)Significant accounting mattersDuring the review of the Funds financial statements for the year ended 30thJune 2015,the Audit Committee consideredthe following matters to be significant issues,both of which were sat
118、isfactorily addressed:Issue consideredHow the issue was addressedValuation of the investment portfolio98.4%of the investment portfolio was valued using quoted prices or priceswhich were observable.The Administrators weekly valuation of these securitieswas checked by the Manager to independent price
119、sources.The Managersmonthly Valuation Committee monitors the fair value of all securities and theManager regularly provides information to the Directors on any stale,unquotedand illiquid securities contained within the investment portfolio.1.5%of theremaining investment portfolio was invested in oth
120、er funds(Investee Funds)valued at their net asset value.Other valuation techniques were applied to only0.1%($550,000)of the investment portfolio.Loss of assets and custody riskAll securities are held by an independent Custodian and the Manager reconciles theCustodians investment portfolio records on
121、 a weekly basis.The Manager monitorsthe Custodians service levels throughout the year with a formal performance reviewconducted annually.The latest annual review was in June 2015.Auditor independence and assessmentThe Funds external Independent Auditors,PricewaterhouseCoopers CI LLP(PwC),have acted
122、in this role for more than tenyears and although no tender for the audit of the Fund has taken place since their appointment,rotation of the Audit Partnerhas regularly taken place,most recently in 2013.The Audit Committee monitors the European and U.K.legislation regardingmandatory audit firm rotati
123、on and tendering to ensure compliance.There are no plans to undertake an external tender at thisstage,although an external tender is likely to be conducted in 2017 prior to the completion of the existing Audit Partnerspermitted service term.As part of its review of the continuing appointment of the
124、Auditors,the Audit Committee considered the independenceof the Auditor along with the effectiveness of the audit.The Auditors were asked to attest that PwC and the audit teammembers were independent of the Fund.PwC also confirmed that they had not been engaged in the provision of any non-audit servi
125、ces to the Fund during the year.Audit effectiveness was assessed by means of the Auditors direct engagementwith the Board at Audit Committee meetings and also by reference to feedback from the Manager.The Audit Committeereviewed the Auditors risk assessment and audit approach at the planning stage a
126、nd were briefed on the fulfilment of thatplan at the completion stage.The Board concluded,on the recommendation of the Audit Committee,that the auditorscontinue to be independent of the Fund.PwC have indicated their willingness to continue in office.Resolutions re-appointing them and authorising the
127、 Directors to agree their remuneration will be proposed at the Annual General Meeting.The fees paid to PwC in respect of audit services for the year ended 30thJune 2015 were$81,000(2014:$100,000).PwCprovided no non-audit services during the year(2014:None).18DIRECTORSREPORTCONTINUEDINTERNAL CONTROLS
128、The Board is responsible for the Funds system of internal 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 particul
129、ar needs and the risks to which it is exposed.Accordingly,the internal control systems are designed to manage rather than eliminate the risk of failure to achieve businessobjectives and by their nature can only provide reasonable and not absolute assurance against misstatement and loss.The services
130、provided to the Fund by the Administrator,such as administration services,accounting services and companysecretarial duties reflect the system of financial and operating controls operating at the Administrator.The relevant controlregime for other services,such as the Manager,Investment Adviser,Custo
131、dian and Registrar,reflect the internal controlsoperated by these respective service providers.The Administrator provides semi-annual and annual financial statements based on the requirements of the Fund.The financialstatements are based on data from the Administrators accounting system including th
132、e trial balance,net asset valuation,purchase and sales report and other investment schedules.All statements are reconciled and reviewed by the Administratorusing pre-defined checklists and reviewed by the Manager prior to distribution.In order for the Directors to review their effectiveness for the
133、Funds business,an annual review of all out-sourced functionshas taken place.Their performance was monitored against obligations specified in the relevant contracts and was found tobe in order.Service providers report annually on the design and effectiveness of internal controls operating over the fu
134、nctions provided.Reports are reviewed by the Audit Committee and any material findings are considered by the Board of Directors as a whole.The Audit Committee has carried out its annual assessment of the internal controls of the Funds service providers for theyear ended 30thJune 2015 and considered
135、the internal control procedures to be adequate based on the findings of theirrespective ISAE 3402 or SSAE 16 reports.SHAREHOLDERSShareholder relationsThe Board recognises the need for good communications with its shareholders.The primary medium through which theFund communicates with shareholders is
136、 the Annual and Half Year Financial Report and the monthly Fact Sheet,whichare available via the Investment Advisers website,www.giml.co.uk.The Chairman of the Fund(and other Directors,periodically)is available for meetings with the Funds major shareholders at their request,and all Members of the Bo
137、ard areavailable for shareholders questions and significant matters arising.On behalf of the Board,the Manager holds periodicmeetings with the Funds major shareholders to discuss aspects of the Funds positioning,performance and outlook.Inaddition,all shareholders are invited to attend the Funds annu
138、al Information Meeting.The Board monitors the trading inthe Funds shares and shareholder profile on a regular basis and maintains regular contact with the Funds brokers to ascertainthe views of the market.Sentiment is also ascertained by careful monitoring of the discount/premium that the shares tra
139、deon versus their NAV and the comparison with the Funds peer group.SHAREHOLDERS(continued)Significant shareholdingsThe Fund has a diversified shareholder population,however the Directors are aware of the following shareholdings whichrepresented beneficial interests of 3%or more of the issued share c
140、apital of the Fund.NameParticipating30thJuneParticipating28thAugustPreference2015Preference2015Shares HeldPercentageShares HeldPercentageStrathclyde Pension Fund29,991,15522%29,991,15522%Banque Degroof Luxembourg SA13,753,23610%13,757,85310%Lazard Asset Management LLC Group12,154,6669%12,154,6669%Ba
141、nque Degroof SCS11,470,6939%11,041,3008%Wells Capital Management8,023,3356%8,208,2356%BAE Pension Fund Investment Management5,230,0004%5,230,0004%Website:www.giml.co.ukThe Annual Financial Report is published on the website,www.giml.co.uk,which is maintained by Genesis InvestmentManagement LLP(Inves
142、tment Adviser).The maintenance and integrity of the website is,so far as relates to the Fund,theresponsibility of the Investment Adviser.The work carried out by the auditors does not involve consideration of these mattersand,accordingly,the auditors accept no responsibility for any changes that may
143、have occurred to the Annual Financial Reportsince they were initially presented on the website.Legislation in Guernsey governing the preparation and dissemination of financial statements may differ from legislation inother jurisdictions.REGULATORY DISCLOSURESThe Alternative Investment Fund Managers
144、Directive(AIFMD)The Manager is a limited liability partnership organised under the law of Delaware,USA and qualifies as a non-EU alternativeinvestment fund manager(non-EU AIFM).Article 22 of AIFMD“Transparency Requirements:Annual Report”requirescertain disclosures to be made with regard to the remun
145、eration of the Funds Manager,as referred to on page 65,althoughnumerical disclosure is not currently required at this time.UK Listing Authority Listing Rules(LR)compliance with rule 9.8.4None of the disclosures required under LR 9.8.4 are applicable to the Fund.19DIRECTORSREPORTCONTINUEDOTHER MATTER
146、SGoing ConcernThe Directors believe that the Fund has adequate resources to continue in operational existence for the foreseeable future.This is based on various factors including the Funds forecast expenditure,its ability to meet its current liabilities,the highlyliquid nature of its assets,its mar
147、ket price volatility and its closed-ended legal structure.For these reasons,the Directorscontinue to adopt the going concern basis in preparing the Financial Statements.Voting PolicyThe Directors have given the Manager discretion to exercise the Funds voting rights and the Manager,so far as is pract
148、icable,will exercise them in respect of resolutions proposed by investee companies.A summary of the Managers voting policy isdisclosed on the website,www.giml.co.uk and a summary of the Funds voting record is available on request.Borrowing FacilitiesThe Articles of Incorporation permit the Fund to b
149、orrow up to 10%of the value of its Net Assets.No borrowing facilitywas used in either 2015 or 2014.Company SecretaryJP Morgan Administration Services(Guernsey)Limited has been in office for the whole year under review.Authority to Purchase Own SharesUnder Resolution 10 of the Annual General Meeting
150、held on 31stOctober 2014,the shareholders authorised the Companyto purchase its own shares.This authority is limited to the maximum number of 20,200,000 Participating Preference Sharesof no par value(equivalent to approximately 14.9%of the issued share capital of the Company).This authority expires
151、atthis years Annual General Meeting of the Company.The maximum price that may be paid for a Participating PreferenceShare will be the amount that is equal to 5%above the average of the middle market prices shown in quotations for aParticipating Preference Share in the London Stock Exchange Daily Off
152、icial List for the five business days immediatelypreceding 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 29thOctober2015.In the event that the Company should purchase shares f
153、or cancellation,the Directors would only do so afterconsideration of the effect on earnings per share and the longer term benefits for shareholders.STATEMENT OF DIRECTORS RESPONSIBILITIESThe Directors are responsible for preparing the financial statements for each financial year so that they give a
154、true and fairview,in accordance with applicable Guernsey Law and International Financial Reporting Standards as adopted by the EuropeanUnion,of the state of affairs of the Fund and of the profit or loss of the Fund for that year.20DIRECTORSREPORTCONTINUEDSTATEMENT OF DIRECTORS RESPONSIBILITIES(conti
155、nued)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 unless it is ina
156、ppropriate to presume that the Fundwill continue in business;andstate whether applicable accounting standards have been followed subject to any material departures disclosed andexplained in the financial statements.The Directors confirm that they have complied with the above requirements in preparin
157、g the financial statements.TheDirectors are responsible for ensuring that the Fund keeps proper accounting records which disclose with reasonable accuracyat any time the financial position of the Fund and enable them to ensure that the financial statements comply with TheCompanies(Guernsey)Law,2008.
158、They are also responsible for ensuring the safeguarding of the assets of the Fund andhence for taking reasonable steps for the prevention and detection of fraud and other irregularities.Having taken all available information into consideration,the Board has concluded that the Annual Financial Report
159、 forthe year ended 30thJune 2015,taken as a whole,is fair,balanced and understandable and provides the information necessaryfor shareholders to assess the Funds performance,business model and strategy.Auditors and disclosure of information to auditorsIn the case of each of the persons who are Direct
160、ors 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;andthey have taken all steps that ought to have been taken as a Director in order to make themselves aware of any relevanta
161、udit 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 accounting standards,give a true
162、and fair view ofthe assets,liabilities,financial position and profit or loss of the Fund;andthis Annual Financial Report includes a fair review of the development and performance of the business and the positionof the Fund,together with a description of the principal risks and uncertainties that exi
163、st.Signed on behalf of the BoardCoen TeulingsSaffet Karpat25thSeptember 201521DIRECTORSREPORTCONTINUED22The Funds financial year encompassed an intensifying financial crisis in Greece,the gradual revelation of the enormous scaleof the Petrobras scandal in Brazil,dramatic volatility in the Chinese st
164、ock market(which of course subsequently continuedthroughout the summer),and weak corporate results in a number of emerging markets.But despite this the MSCI EM(TR)Index ended the period in positive territory,returning 3.5%in sterling terms,thanks to a stabilisation of commodity pricesearly in 2015,a
165、nd a corresponding uptick in confidence about the global economy.The Funds NAV,however,underperformedthe MSCI EM(TR)Index over the period,with a 1.1%loss.We should note,however,that over the two months since theend of the financial year,renewed negative sentiment on global economic growth(particular
166、ly with respect to China)saw theMSCI EM(TR)Index fall 13%in sterling terms between 30thJune and 28thAugust(with the Funds NAV falling slightlyless than this).China and India,at around 15%each,are the largest markets represented in the portfolio.In India,stock prices have stabilisedsomewhat over the
167、last few months following a three-year bull market.Against this generally exuberant backdrop,however,local company managers seem less enthused about near-term economic prospects,with corporate capex likely to remainsubdued for some time.Certainly,the recording of an official year-on-year GDP growth
168、figure for Q1 2015 of 7.5%didnot correlate with recent weak corporate performance,and was met with some confusion and scepticism.China,with an index weight that had risen to around 25%by the end of the period,continued to dominate investordiscussion.Significant concerns remain about an overall debt-
169、to-GDP level of 250%,the extent to which corporateborrowing makes up a particularly large proportion of that figure,and the pace at which debt has reached this level.GDPgrowth continues to slow,but there are counter-arguments to suggest that the high level of debt is mitigated by the assetsthe Chine
170、se state has available on the other side of the balance sheet,their control over both the banking system and thecorporates doing the borrowing,and their potential ability given the low levels of inflation to print as much renminbias is necessary.Hence it may be premature to write off Chinas economy,
171、although the ham-fisted way in which the Chineseauthorities have interfered with the stockmarket and the currency over the summer has damaged their recently-improvedreputation for sound management,and in our view makes a hard landing more likely than previously.But a degree of optimismand entreprene
172、urial blossoming remains,driven by lower costs of capital,and while the Fund is not invested in Chinesehyper-growth small companies due to the eye-watering speculative valuations that are still in place despite recent market falls,even in the less exciting,more cash-generative businesses in which we
173、 invest there are many compelling developments.One-year relative performance to the end of the financial year has been disappointing,impacted by two main elements.First,holdings from the materials and energy sectors were prominent as their balance sheets felt the strain of lower commodityprices and
174、weak market sentiment.Three such holdings were the African oil exploration company Tullow Oil(down 60%),the diversified global mining company Anglo American(down 32%)and First Quantum Minerals(down 33%),all of whichhad a significant negative impact on relative performance.Second,the underweight in t
175、he strong Chinese market also heldthe portfolio back.Historically the Funds portfolio has tended to underperform when dominant markets such as China have risen very rapidly over a short period,but(as in 2008-9 following the excess of 2006-7)we would expect to seethat relative performance recover as
176、the market returns to a more rational viewpoint as indeed has been the case to somedegree during July and August.On the positive side,a number of Indian companies,notably Kotak Mahindra Bank(up61%),Lupin(up 60%)and Axis Bank(up 50%),were high on the list of contributors,while the portfolios overweig
177、ht inthis market was also beneficial.Stock selection gains in South Korea and being underweight in the weak Brazilian marketwere further positive drivers.MANAGERSREVIEW23Relative Performance Attribution in GBP 12 Months to June 2015GEMF vs.MSCI EM(TR)IndexTop 10 Stock Contributors%Top 10 Stock Detra
178、ctors%Kotak Mahindra Bank(India)0.75Tullow Oil(United Kingdom)(2.01)Lupin(India)0.73Anglo American(South Africa)(1.73)Axis Bank(India)0.59First Quantum Minerals(Zambia)(0.98)China Merchants Bank(China)0.58Tencent(China)(0.73)Petrobras(Brazil)0.58China Construction Bank(China)(0.53)Pidilite Industrie
179、s(India)0.55Bank of China(China)(0.52)Cognizant Technology Solutions(India)0.52Naspers(South Africa)(0.46)Vale(Brazil)0.50Po de Acar(Brazil)(0.44)Sun Pharmaceutical(India)0.49Sberbank(Russia)(0.43)Gree Electric Appliances(China)0.47ICBC(China)(0.42)Stocks in italics are omissions at end of periodSec
180、tor%Top 5 Country Contributors%Top 5 Country Detractors%Consumer Discretionary0.78India3.66China(2.53)Health Care0.59South Korea1.36South Africa(2.19)IT0.32Brazil0.62Zambia(0.98)Utilities0.20Greece0.46Nigeria(0.55)Telecoms0.12Malaysia0.41Taiwan(0.44)Consumer Staples(0.32)Energy(0.58)Industrials(0.63
181、)Materials(1.01)Financials(2.46)Source:FactSetIndia and China dominated the Funds trading activity over the period.Many holdings in the former performed strongly,allowing us to take profits,while the extreme market volatility in the latter provided opportunities to both buy and sellpositions.In Indi
182、a there were significant reductions to Kotak Mahindra Bank,Sun Pharmaceutical,Axis Bank and Lupin,while Shriram Transport and Maruti Suzuki exited the portfolio.New purchases in China included ICBC,one of ChinasBig Four state-owned commercial banks,premium baijiu producer Kweichow Moutai and car win
183、dscreen manufacturer FuyaoGlass.Other notable additions were made to the portfolios food and beverage stocks,including WH Group and instantnoodle manufacturer Tingyi.On the sell side there were reductions to Belle,China Mengniu Dairy and China MerchantsBank,while Beijing Yanjing Brewery was sold fro
184、m the portfolio.MANAGERSREVIEWCONTINUEDAway from these markets,new positions included messaging service provider Naver(South Korea),Aspen Pharmacare(South Africa),Hypermarcas(Brazil)and Caribbean telecom service provider Cable&Wireless,and there were additions tothree banks,Itau Unibanco(Brazil),Cre
185、dicorp(Peru)and Garanti Bank(Turkey).Further highlights on the sell sideincluded taking sizeable profits in TSMC(Taiwan)although it remains the largest individual holding in the Fund andreducing the position in America Movil(Mexico)whilst Indocement(Indonesia)was sold from the portfolio.As we have n
186、oted in previous reports,we feel an adjustment is underway as many emerging markets companies adapt to amore challenging economic environment incorporating slower growth,higher interest rates,lower commodity prices,increasedcompetition,and a gradual decline in penetration opportunities and ultimatel
187、y therefore,for most businesses,lowerprofitability.Yet,valuations remain challenging in many sectors,and in aggregate emerging markets are no cheaper than theywere three years ago as US dollar strength has masked the fact that in local terms companies stock prices have stillperformed relatively well
188、.Given the uncertainty,this kind of environment should reward a focus on stock selection.While the extreme market volatilitywe have seen in recent months has resulted in weak relative performance in the short run,we remain confident that theFunds holdings are companies of high quality which are like
189、ly to generate strong relative and absolute returns for shareholdersover the medium and long term.Genesis Asset Managers,LLPSeptember 2015MANAGERSREVIEWCONTINUED2425Genesis Indian Investment Company(India)6.54%Investment CompanyAn open-ended Mauritian company whose objective is to achieve capital gr
190、owth over the medium to long term throughinvestment in equities listed on the Indian stock market.It held positions in 6 stocks as at 30thJune 2015.Taiwan Semiconductor Manufacturing(Taiwan)4.15%Information TechnologyTaiwan Semiconductor Manufacturing is the worlds largest dedicated semiconductor fo
191、undry,manufacturing integratedcircuits for computer,communications,and consumer electronics applications.Samsung Electronics(South Korea)4.00%Information TechnologySamsung Electronics is a global leader in the IT hardware industry,producing handsets,semiconductors(mostlymemory),LCD panels and a wide
192、 range of consumer electronics and digital appliances.SABMiller(South Africa)3.83%Consumer StaplesSABMiller is one of the worlds largest brewers,having brewing interests and distribution agreements across sixcontinents with a bias towards fast-growing developing markets.Genesis Smaller Companies SIC
193、AV(Luxembourg)3.74%Investment CompanyAn open-ended Luxembourg SICAV whose objective is to achieve capital growth over the medium to long term throughinvestment in smaller emerging market companies.It held positions in 28 listed stocks as at 30thJune 2015.Anglo American(South Africa)3.40%MaterialsAng
194、lo American is one of the worlds largest diversified mining and natural resource groups and is a global leader inthe production of diamonds,copper,coal,platinum group metals and iron ore.Samsung Fire&Marine Insurance(South Korea)2.78%FinancialsSamsung Fire&Marine Insurance is a leading South Korean
195、company,with automobile insurance prominent amongstits products.TWENTYLARGESTHOLDINGSas at 30thJune 201526Novatek(Russia)1.88%EnergyNovatek is Russias second largest producer of natural gas,operating principally in western Siberia.Cognizant Technology Solutions(India)1.84%InformationTechnologyCogniz
196、ant is a leading provider of information technology,consulting and business process outsourcing services.Thecompany employs over 100,000 people in India and is listed on NASDAQ.Industrial&Commercial Bank of China(China)1.82%FinancialsIndustrial and Commercial Bank of China Ltd provides a broad range
197、 of personal and corporate commercial bankingservices all over China.The banks businesses include deposit,loan,credit card,fund underwriting and trust,and foreigncurrency settlement and trading.Anhui Conch Cement(China)1.81%IndustrialsAnhui Conch Cement is the largest and most efficient cement produ
198、cer in China.It has a national presence and is anindustry consolidator.Itau Unibanco Holding(Brazil)1.66%FinancialsItau Unibanco Holding attracts deposits and offer retail,commercial,corporate,and private banking services.The Bankoffers consumer loans,financial management,insurance,pension plans,tre
199、asury services,mortgage loans,lease financing,securities brokerage,and foreign exchange services.Shinhan Financial Group(South Korea)1.63%FinancialsShinhan Financial Group is a holding company that offers a full range of financial services to retail and corporatecustomers in South Korea through its
200、subsidiaries,which include one of the largest banks in the country.First Quantum Minerals(Zambia)1.58%MaterialsFirst Quantum Minerals explores for,mines,and produces copper,nickel and gold.TWENTYLARGESTHOLDINGSCONTINUED27Kotak Mahindra Bank(India)1.52%FinancialsKotak Mahindra Bank is one of the lead
201、ing integrated financial services groups in India,with interests in retail banking,asset management,life insurance and investment banking.Thai Beverage(Thailand)1.43%Consumer StaplesThai Beverage isThailands largest beverage company,providing a wide range of branded beers,spirits and non-alcoholicbe
202、verages.Bidvest Group(South Africa)1.42%IndustrialsBidvest,based in South Africa,is a trading and distribution services business,with the largest food service businessoutside of North Amercia.Tata Consultancy Services(India)1.40%Information TechnologyTata Consultancy Services,a division of Tata Sons
203、 Limited,is a global IT services organisation that provides acomprehensive range of IT services to its clients in diverse industries.The company,caters to finance and banking,insurance,telecommunication,transportation,retail,manufacturing,pharmaceutical and utility industries.Central Pattana(Thailan
204、d)1.39%FinancialsCentral Pattana isThailands largest developer and operator of shopping malls,accounting for a quarter of Bankgoksretail market.Tullow Oil(United Kingdom)1.32%EnergyTullow Oil is a UK-listed independent oil exploration and production company with a major focus on Africa,whereit is a
205、dominant player.TWENTYLARGESTHOLDINGSCONTINUED28COUNTRYEXPOSURE OF THEPORTFOLIO*JuneJuneJuneCountry201520142013%China16.4210.8912.98India14.6313.0311.29South Africa10.5911.3510.89South Korea9.439.048.36Brazil5.786.225.58Russia5.736.997.50Taiwan5.356.987.20Thailand5.155.365.54Mexico3.854.545.48Turkey
206、3.123.033.11United Kingdom2.582.792.69Nigeria1.862.252.23Zambia1.582.922.32Peru1.030.450.20Saudi Arabia1.031.040.75Egypt1.021.171.00Malaysia0.991.081.01Philippines0.950.610.53Indonesia0.722.062.09Kenya0.650.160.08Mauritius0.600.530.73Romania0.600.580.66Argentina0.580.620.59Colombia0.510.750.88Hungar
207、y0.510.221.04Vietnam0.410.290.32Chile0.330.650.72Austria0.320.420.43Ghana0.320.220.26Poland0.320.290.32Senegal0.300.290.27Greece0.240.620.69Tunisia0.21Zimbabwe0.170.200.35Estonia0.150.160.21Ukraine0.130.160.18Lebanon0.130.100.11Morocco0.09Mongolia0.080.040.13Tanzania0.080.050.09Sri Lanka0.050.040.04
208、Mozambique0.020.03Croatia0.010.02Jordan0.11Czech Republic0.04Botswana0.01Net current assets1.411.780.94Total100.00100.0100.0*Treating Genesis Smaller Companies SICAV and Genesis Indian InvestmentCompany Limited on a look-through basis.29SECTOREXPOSURE OF THEPORTFOLIO*IndustryJuneJuneJune201520142013
209、%Financials30.5229.0326.99Consumer Staples19.1816.2115.67Information Technology16.2816.2116.51Materials12.4914.8313.41Health Care4.774.623.93Energy4.716.107.17Industrials3.423.914.62Consumer Discretionary3.093.103.13Telecommunications2.182.504.54Investment Companies1.551.471.75Utilities0.400.241.34N
210、et current assets1.411.780.94Total100.00100.00100.00*Treating Genesis Smaller Companies SICAV and Genesis Indian Investment Company Limited on a look-through basis.30FairProportionValueof Fund$000(%)ARGENTINA(2014 0.39%)Ternium ADR3,6270.30AUSTRIA(2014 0.42%)Vienna Insurance Group3,8490.32BRAZIL(201
211、4 5.95%)Banco Santander Brasil ADR7,6460.63BTG Pactual(Preferred)6,8190.56CCR2,6090.22Gerdau1320.01Gerdau ADR8760.07Gerdau(Preferred)3800.03Grupo Po de Acar ADR1,3150.11Grupo Po de Acar(Preferred)6,5900.54Hypermarcas3,2490.27Ita Unibanco Holding ADR7,4490.61Ita Unibanco Holding(Preferred)4,7000.39It
212、asa Investimentos Ita(Preferred)8,0280.66Linx2,1560.18OdontoPrev1,2620.10Rumo Logistica2,2310.18TOTVS1,2880.11Tractebel Energia4,9050.41Ultrapar Participaes ADR8020.07Ultrapar Participaes(Preferred)5,2450.4367,6825.58CHILE(2014 0.35%)Embotelladora Andina A ADR1770.01Embotelladora Andina A(Preferred)
213、1,4040.12Embotelladora Andina B ADR390.00Embotelladora Andina B(Preferred)2,4210.204,0410.33THEPORTFOLIOas at 30thJune 201531FairProportionValueof Fund$000(%)CHINA(2014 10.83%)AAC Technologies Holdings6,4240.53AIA Group8,4780.70Alibaba Group ADR3,1910.26Anhui Conch Cement A9,1550.75Anhui Conch Cemen
214、t H12,8541.06ASM Pacific Technology9,7550.80Belle International Holdings2,7250.22China Foods1,9370.16China Mengniu Dairy10,0360.83China Merchants Bank11,3920.94China Mobile7,8250.65China Overseas Land&Investment12,2521.01China Resources Enterprise7,2480.60Fuyao Glass3,1540.26Gree Electrical A9,9140.
215、82Industrial&Commercial Bank of China22,0931.82Jiangsu Yanghe Brewery A5,7400.47Kweichow Moutai A10,0000.82Li Ning1,9360.16Longfor Properties6,7240.55Mindray Medical ADR3,7730.31Qinhuangdao Port1,4370.12Tingyi12,9291.07Tsingtao Brewery5,7900.48West China Cement1,3340.11WH Group9,4320.78Wumart Stores
216、1,7110.14199,23916.42COLOMBIA(2014 0.75%)Bancolombia3,9030.32Bancolombia ADR1,8860.16Bancolombia(Preferred)5050.046,2940.52EGYPT(2014 0.96%)OCI8,6760.72Orascom Construction1,3630.1110,0390.83THEPORTFOLIOCONTINUEDTHEPORTFOLIOCONTINUED32FairProportionValueof Fund$000(%)GHANA(2014 0.16%)Kosmos Energy3,
217、5020.29GREECE(2014 0.62%)OPAP3,0470.25HUNGARY(2014 0.22%)OTP Bank6,1290.50INDIA(2014 13.03%)Ambuja Cements4,7420.39Axis Bank11,8830.98Cognizant Technology Solutions22,2981.84Dabur India6180.05Genesis Indian Investment Company*79,3606.54Hero Motocorp6,4480.53Infosys6,5510.54Infosys ADR5,3140.44Kotak
218、Mahindra Bank18,4521.52Lupin4,9410.40Tata Consultancy Services16,9601.40177,56714.63INDONESIA(2014 1.71%)Bank Tabungan Peniunan5730.05Ramayana Lestari Sentosa9890.08Semen Indonesia Persero4,6050.386,1670.51KENYA(2014 0.00%)Equity Group Holdings4,0510.33Safaricom6810.064,7320.39LUXEMBOURG(2014 4.45%)
219、Genesis Smaller Companies SICAV*45,3783.74MALAYSIA(2014 1.08%)7 Eleven Malaysia Holdings1,3530.11CIMB Group Holdings7,3840.61Lafarge Malayan Cement1,3190.11Westports Holdings1,9660.1612,0220.9933THEPORTFOLIOCONTINUEDFairProportionValueof Fund$000(%)MAURITIUS(2014 0.53%)ECP Africa Fund II*7,2540.60ME
220、XICO(2014 3.96%)Amrica Mvil ADR Series L8,5220.70Corp Moctezuma3,4220.28First Cash Financial Services4,0660.34Genomma Lab Internacional B5300.04Gentera1400.01Grupo Financiero Banorte14,6651.21Grupo Financiero Inbursa5,0260.42Megacable Holdings6,1110.50Torex Gold Resources1,5030.1343,9853.63MONGOLIA(
221、2014 0.04%)Mongolian Mining1,0050.08MOROCCO(2014 0.00%)Attijariwafa Bank1,0870.09NIGERIA(2014 2.25%)First City Monument Bank1,0820.09Guaranty Trust Bank7,1780.59Guaranty Trust Bank GDR4,4150.36Nestle Nigeria1,8850.16Nigerian Breweries7,0190.58United Bank for Africa9800.0822,5591.86PERU(2014 0.25%)Cr
222、edicorp11,4190.94PHILIPPINES(2014 0.00%)Bank of Philippine Islands2,7880.23International Container Terminal Services2410.023,0290.25POLAND(2014 0.29%)Alior Bank3,8740.32ROMANIA(2014 0.58%)NCH Balkan Fund*7,2350.60THEPORTFOLIOCONTINUED34FairProportionValueof Fund$000(%)RUSSIA(2014 6.87%)Alrosa10,4210
223、.86Eurasia Drilling GDR Reg S3,8510.32FESCO5490.04Global Ports Investments GDR Reg S1,2770.10LSR Group2310.02LSR Group GDR1,4200.12Moscow Exchange1,9890.16Novatek GDR Reg S22,8471.88Novolipetsk Steel GDR Reg S3,1470.26OKey Group GDR Reg S1370.01QIWI ADR1,4190.12Raspadskaya8250.07Sberbank11,4210.94X5
224、 Retail Group GDR Reg S9,0770.7568,6115.65SAUDI ARABIA(2014 1.04%)Almarai Deutsche Bank Participatory notematuring 13thSeptember 20161,7790.15Almarai HSBC Bank Participatory notematuring 31stJuly 20177,9300.65Saudi British Bank HSBC Bank Participatory notematuring 22ndJanuary 20182,7270.2212,4361.02
225、SOUTH AFRICA(2014 11.19%)Anglo American26,5872.19Anglo American(London Listing)14,7131.21Aspen Pharmacare1,8320.15Bidvest Group17,2851.42Capevin Holdings3060.03Capitec Bank3,8050.31Discovery3,3650.28Distell Group1300.01Pick n Pay Holdings3470.03Pick n Pay Stores4,2740.35Platinum Group Metals1900.02S
226、ABMiller36,9543.05SABMiller(London Listing)9,4960.78Standard Bank7,3640.61126,64810.4435THEPORTFOLIOCONTINUEDFairProportionValueof Fund$000(%)SOUTH KOREA(2014 8.92%)E-Mart3,8740.32Naver Corp5,8650.48Samsung Electronics(Ordinary)29,3012.41Samsung Electronics(Preferred)19,3061.59Samsung Fire&Marine In
227、surance33,7062.78Shinhan Financial Group19,7291.63111,7819.21TAIWAN(2014 6.98%)MediaTek14,5641.20Taiwan Semiconductor Manufacturing50,3504.1564,9145.35THAILAND(2014 5.36%)Big C Supercenter(Foreign)5,3980.44Big C Supercenter NVDR2,9980.25Central Pattana(Foreign)16,9171.39Kasikorn Bank(Foreign)1,3440.
228、11Kasikorn Bank NVDR9,0450.74Robinsons Department Store(Foreign)3,0180.25Siam Commercial Bank(Foreign)1,2740.11Thai Beverage17,3551.43TMB Bank(Foreign)5,0660.4262,4155.14TUNISIA(2014 0.00%)Societe de Fabrication des Boissons de Tunisie2,5690.21TURKEY(2014 2.76%)Akfen Holdings1,5760.13Anadolu Efes Bi
229、racilik9,3340.77Turkiye Garanti Bankasi15,0901.25Ulker Biskuvi Sanayi3,6390.30Yapi ve Kredi Bankasi5,6250.4635,2642.91UKRAINE(2014 0.07%)Ukraine Opportunity5500.0536THEPORTFOLIOCONTINUEDFairProportionValueof Fund$000(%)UNITED KINGDOM(2014 2.79%)Cable&Wireless2,3050.19Coca-Cola Hellenic Bottling13,00
230、01.07Tullow Oil16,0401.3231,3452.58VIETNAM(2014 0.29%)Mekong Enterprise Fund II*3,7210.31ZAMBIA(2014 2.92%)First Quantum Minerals19,1551.58ZIMBABWE(2014 0.20%)Delta Corp2,0930.17TOTAL INVESTMENTS1,196,26498.59Net current assets17,0501.41TOTAL NET ASSETS1,213,314100.00*Unquoted securities,not traded
231、on an official Stock Exchange or other RegulatedMarket.Treating Genesis Smaller Companies SICAV and Genesis Indian InvestmentCompany on a non-look-through basis.Investee Funds.The Funds investments in non-affiliated investment companies.ADRAmerican Depositary Receipt.A negotiable certificate issued
232、by a U.S.bankrepresenting a specific number of shares of a foreign stock traded on a U.S.stockexchange.ADSAmerican Depository Share.The share issued under an American DepositoryReceipt agreement which is actually traded.GDRGlobal Depositary Receipt.A negotiable certificate held in the bank of onecou
233、ntry representing a specific number of shares of a stock traded on an exchangeof another country.NVDRNon-Voting Depositary Receipt.Reg SSecurity restricted from sale in the US under Regulation S of the Securities Act1933.These securities may be resold to investors outside of the US.37Report on the F
234、inancial StatementsWe have audited the accompanying financial statements of Genesis Emerging Markets Fund Limited(the Fund)whichcomprise the Statement of Financial Position as of 30thJune 2015 and the Statement of Comprehensive Income,theStatement of Changes in Equity,the Statement of Cash Flows for
235、 the year then ended and a summary of significantaccounting policies and other explanatory information.Directors Responsibility for the Financial StatementsThe Directors are responsible for the preparation of the financial statements that give a true and fair view in accordancewith International Fin
236、ancial Reporting Standards as adopted by the European Union and with the requirements ofGuernsey law.The Directors are also responsible for such internal control as they determine is necessary to enable thepreparation of financial statements that are free from material misstatement,whether due to fr
237、aud or error.Auditors ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit.We conducted our auditin accordance with International Standards on Auditing.Those standards require that we comply with ethicalrequirements and plan and perform the audit
238、 to obtain reasonable assurance whether the financial statements are freefrom material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financialstatements.The procedures selected depend on the auditors judgement,including the ass
239、essment of the risks of materialmisstatement of the financial statements,whether due to fraud or error.In making those risk assessments,the auditorconsiders internal control relevant to the entitys preparation and fair presentation of the financial statements in orderto design audit procedures that
240、are appropriate in the circumstances,but not for the purpose of expressing an opinionon the effectiveness of the entitys internal control.An audit also includes evaluating the appropriateness of accountingpolicies used and the reasonableness of accounting estimates made by the directors,as well as e
241、valuating the overallpresentation of the financial statements.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.OpinionIn our opinion,the financial statements give a true and fair view of the financial position of the Fund as o
242、f 30thJune2015,and of its financial performance and of its cash flows for the year then ended in accordance with InternationalFinancial Reporting Standards as adopted by the European Union and have been properly prepared in accordance withthe requirements of The Companies(Guernsey)Law,2008.Report on
243、 other Legal and Regulatory RequirementsWe read the other information contained in the Annual Report and consider the implications for our report if webecome aware of any apparent misstatements or material inconsistencies with the financial statements.The otherinformation comprises only the introduc
244、tion,the highlights pages,the directors pages,the Chairmans statement,theDirectors report,the Managers review,the twenty largest holdings,the country exposure of the portfolio,the sectorexposure of the portfolio,the portfolio,the performance record,the administration page,the alternative investmentf
245、und managers directive disclosure and the notice of meeting.In our opinion the information given in the Directors report is consistent with the financial statements.INDEPENDENTAUDITORSREPORTTO THEMEMBERS OFGENESISEMERGINGMARKETSFUNDLIMITEDThis report,including the opinion,has been prepared for and o
246、nly for the Funds members as a body in accordancewith Section 262 of The Companies(Guernsey)Law,2008 and for no other purpose.We do not,in giving this opinion,accept or assume responsibility for any other purpose or to any other person to whom this report is shown or intowhose hands it may come save
247、 where expressly agreed by our prior consent in writing.Matters on which we are required to report by exceptionWe have nothing to report in respect of the following matters which we are required to review under the Listing Rules:the Directors statement set out on page 20 in relation to going concern
248、;andthe part of the Corporate Governance Statement relating to the Funds compliance with the ten provisions of theUK Corporate Governance Code specified for our review.Evelyn BradyFor and on behalf of PricewaterhouseCoopers CI LLPChartered Accountants and Recognised AuditorGuernsey,Channel Islands28
249、thSeptember 2015INDEPENDENTAUDITORSREPORTTO THEMEMBERS OFGENESISEMERGINGMARKETSFUNDLIMITEDCONTINUED3839STATEMENT OFFINANCIALPOSITIONAS AT 30THJUNE 201520152014Note$000$000ASSETSCurrent assets2(b),10Financial assets at fair value through profit or loss1,196,2641,310,2192(g)Amounts due from brokers231
250、7,6372(d)Dividends receivable4,1701,426Other receivables and prepayments2081672(f)Cash and cash equivalents23,72917,416TOTAL ASSETS1,224,6021,336,865LIABILITIESCurrent Liabilities2(j)Capital gains tax payable2172672(g)Amounts due to brokers8,9922657Payables and accrued expenses2,0792,314TOTAL LIABIL
251、ITIES11,2882,846TOTAL NET ASSETS1,213,3141,334,019EQUITY4Share premium134,349134,3496Capital reserve1,045,0551,169,925Revenue account33,91029,745TOTAL EQUITY1,213,3141,334,019NET ASSET VALUE PER PARTICIPATINGPREFERENCE SHARE*$8.99$9.88*Calculated on an average number of134,963,060 Participating Pref
252、erence Shares outstanding(2014:134,963,060).Signed on behalf of the Board ofGenesis Emerging Markets Fund LimitedCoen TeulingsSaffet Karpat25thSeptember 2015The notes on pages 43 to 64 form part of these financial statements40STATEMENT OFCOMPREHENSIVEINCOMEFOR THE YEAR ENDED 30THJUNE 201520152014Not
253、e$000$000INCOME2(b),10Net change in financial assets at fair value through profit or loss(126,208)187,6222(c)Net exchange gains1,3381352(d)Dividend income28,42625,201Miscellaneous income37(96,441)212,965EXPENSES9(a)Management fees(17,442)(18,440)9(c)Custodian fees(924)(1,008)11Transaction costs(1,83
254、6)(1,455)9(d)Directors fees and expenses(570)(523)9(b)Administration fees(289)(298)Audit fees(81)(100)Other expenses(206)(151)TOTAL OPERATING EXPENSES(21,348)(21,975)OPERATING(LOSS)/PROFIT(117,789)190,9902(j),8Capital gains tax50(20)2(j),8Withholding taxes(2,966)(2,256)(2,916)(2,276)(LOSS)/PROFIT AF
255、TER TAX FOR THE YEARATTRIBUTABLE TO PARTICIPATINGPREFERENCE SHARES(120,705)188,714Other Comprehensive IncomeTOTAL COMPREHENSIVE(LOSS)/INCOME(120,705)188,7145(LOSS)/EARNINGS PER PARTICIPATINGPREFERENCE SHARE*$(0.89)$1.40*Calculated on an average number of134,963,060 Participating Preference Shares ou
256、tstanding(2014:134,963,060).The notes on pages 43 to 64 form part of these financial statements41STATEMENT OFCHANGES INEQUITYFOR THE YEAR ENDED 30THJUNE 20152015ShareCapitalRevenuePremiumReserveAccountTotal$000$000$000$000Balance at the beginning of the year134,3491,169,92529,7451,334,019Total Compr
257、ehensive Income(120,705)(120,705)Transfer from Capital Reserves(124,870)124,870Balance at the end of the year134,3491,045,05533,9101,213,3142014ShareCapitalRevenuePremiumReserveAccountTotal$000$000$000$000Balance at the beginning of the year134,349982,16828,7881,145,305Total Comprehensive Income188,
258、714188,714Transfer to Capital Reserves187,757(187,757)Balance at the end of the year134,3491,169,92529,7451,334,019The notes on pages 43 to 64 form part of these financial statements42STATEMENT OFCASHFLOWSFOR THE YEAR ENDED 30THJUNE 201520152014$000$000OPERATING ACTIVITIESDividends received25,68525,
259、627Taxation paid(2,966)(2,256)Purchase of investments(268,571)(227,103)Proceeds from sale of investments272,451233,365Operating expenses paid(21,624)(21,741)NET CASH INFLOW FROMOPERATING ACTIVITIES4,9757,892Effect of exchange gains on cash and cash equivalents1,338135NET INCREASE IN CASH ANDCASH EQU
260、IVALENTS6,3138,027Net cash and cash equivalents at thebeginning of the year17,4169,389NET CASH AND CASH EQUIVALENTS ATTHE END OF THE YEAR23,72917,416Comprising:Cash and cash equivalents23,72917,416The notes on pages 43 to 64 form part of these financial statements43Genesis Emerging Markets Fund Limi
261、ted(the Fund)was incorporated in Guernsey on7thJune 1989 and commenced activities on 19thSeptember 1989.The Fund is an AuthorisedClosed-Ended Investment Scheme as defined by the Authorised Closed-Ended InvestmentSchemes Rules(2008)(and,as such,is subject to ongoing supervision by the GuernseyFinanci
262、al Services Commission).The Fund is listed on the London Stock Exchange and isa constituent of the FTSE 250 Index.The Funds registered office is 1st Floor,Les Echelons Court,Les Echelons,South Esplanade,St.Peter Port,Guernsey,GY1 6JB,Channel Islands.(a)Basis of PreparationThe principal accounting po
263、licies applied in the preparation of these financial statements ona going concern basis are set out below.These policies have been consistently applied to allyears presented,unless otherwise stated.The financial statements have been prepared in accordance with International FinancialReporting Standa
264、rds as adopted by the European Union(IFRS)and interpretations by theInternational Financial Reporting Interpretations Committee of the International AccountingStandards Board.The financial statements have been prepared under the historical cost convention,as modifiedby the revaluation of financial a
265、ssets and financial liabilities at fair value through profit orloss.The preparation of financial statements in conformity with IFRS may require managementto make critical accounting judgements,estimates and assumptions that affect the applicationof policies and the reported amounts of assets and lia
266、bilities,income and expense.Theestimates and associated assumptions about the future which are made by managementrelating to unlisted securities,are made using models generally recognised as standard withinthe industry and inputs are based on the historical experience and various other factors thata
267、re believed to be reasonable under the circumstances,the results of which form the basisof making the judgements about the carrying value of assets and liabilities that are not readilyapparent from other sources.Actual results may differ from these estimates.Valuations use observable data to the ext
268、ent practicable.Changes in any assumptions couldaffect the reported fair value of the financial instruments.The determination of whatconstitutes observable requires significant judgement by the Fund.The Fund considersobservable data to be market data that is readily available,regularly distributed o
269、r updated,reliable and verifiable,not proprietary,and provided by independent sources that are activelyinvolved in the relevant market.2.SUMMARY OFSIGNIFICANTACCOUNTINGPOLICIES1.GENERALNOTES TO THEFINANCIALSTATEMENTSFOR THE YEAR ENDED 30THJUNE 201544NOTES TO THEFINANCIALSTATEMENTSCONTINUED(a)Basis o
270、f Preparation(continued)New standards,amendments and interpretations effective from 1stJuly 2014The following new standards and amendments to existing standards are relevant to the Fundsoperations and are mandatory for accounting periods ending on 30thJune 2015:Amendments to IFRS 10,IFRS 12 and IAS
271、27,Investment Entities(effective 1stJanuary2015).Amendments to IAS 32,Financial instruments:assets and liabilities offsetting(effective1stJanuary 2015).Amendments to IAS 36,Recoverable Amount Disclosures for Non-Financial Assets(effective1stJanuary 2015).New standards,amendments and interpretations
272、issued but not yet effectiveThe following standards and interpretations have been issued and are expected to be relevantto the Fund in future periods,with effective dates on or after 1stJuly 2015:Amendments to IAS 27,Separate financial statements(effective 1stJanuary 2016).Amendments to IFRS 10,IFRS
273、 12 and IAS 28,Investment Entities:Applying theConsolidation Exception(effective 1stJanuary 2016).Amendments to IAS 1,Disclosure Initiative(effective 1stJanuary 2016).Amendments to IFRS 9,Financial Instruments(effective 1stJanuary 2016).Annual improvements 2014(effective 1stJanuary 2016).The Directo
274、rs are currently reviewing these standards with a view to implementation on theireffective date,however they do not believe their adoption will have a significant impact onthe financial statements.Early adoption of standardsThe Fund did not early adopt any new or amended standards/interpretations fo
275、r the yearended 30thJune 2015.(b)Financial InstrumentsClassificationThe Fund has designated all of its investments as at fair value through profit or loss.Thiscategory comprises financial instruments designated at fair value through profit or loss uponinitial recognition and includes financial asset
276、s that are not held for trading purposes andwhich may be sold.These investments are managed and their performance is evaluated on afair value basis in accordance with the Funds documented investment strategy.The investmentsof the Fund are principally in listed equities.2.SUMMARY OFSIGNIFICANTACCOUNT
277、INGPOLICIES(CONTINUED)(b)Financial Instruments(continued)Loans and receivables are non-derivative financial assets with fixed or determinable paymentsthat are not quoted in an active market.The Fund includes within financial instruments,cashand cash equivalents,due from brokers and other short term
278、receivables.Other financial liabilities include all financial liabilities,other than those classified as heldfor trading.The Fund includes in this category bank overdraft,due to brokers and other shortterm liabilities.Recognition/derecognitionThe Fund recognises a financial asset or a financial liab
279、ility when,and only when,it becomesa party to its contractual terms.Regular-way purchases and sales of investments are recognised on their trade date,the dateon which the Fund commits to purchase or sell the investment.Investments are derecognisedwhen the rights to cash flows from the investments ha
280、ve expired or the Fund has transferredsubstantially all risks and rewards of ownership.The Fund derecognises a financial liability when the obligation under the liability isdischarged,cancelled or expires.MeasurementFinancial assets and financial liabilities at fair value through profit or loss are
281、measured initiallyat fair value being the transaction price.Transaction costs incurred to acquire financial assetsat fair value through profit or loss are expensed in the Statement of Comprehensive Income.Transaction costs include fees and commissions paid to agents,advisers,brokers and dealers.Subs
282、equent to initial recognition,all financial assets and financial liabilities at fair valuethrough profit or loss are measured at fair value.Gains and losses arising from changes inthe fair value of the financial assets or financial liabilities at fair value through profit or losscategory are present
283、ed in the Statement of Comprehensive Income in the year in which thearise.Loans and receivables and financial liabilities are measured initially at their fair value plusany directly attributable incremental costs of acquisition or issue.Fair value measurementFair value is the amount by which an asse
284、t could be exchanged,or a liability settled,betweenknowledgeable willing parties in an arms length transaction.2.SUMMARY OFSIGNIFICANTACCOUNTINGPOLICIES(CONTINUED)45NOTES TO THEFINANCIALSTATEMENTSCONTINUED(b)Financial Instruments(continued)Securities listed on active markets are valued based on thei
285、r last traded price for valuationand financial statement purposes.Positions held in affiliated investment companies,GenesisSmaller Companies SICAV(open-ended and listed but not traded)and Genesis IndianInvestment Company(closed-ended and non-listed),are valued at their fair value at thereporting end
286、 date.In the normal course of business,the Fund utilises Participatory notes(P Notes)to gainaccess to markets that otherwise would not be allowable to a foreign investor.P Notes areissued by banks or broker-dealers and allow the Fund to gain exposure to local shares inforeign markets.They are valued
287、 based on the last price of the underlying equity at thevaluation date.The Funds investment in other Funds(Investee Funds)are subject to the terms andconditions of the respective Investee Funds offering documentation.The investments inInvestee Funds are primarily valued based on the latest available
288、 redemption price for suchunits in each Investee Fund,as determined by the Investee Funds administrators.The Fundreviews the details of the reported information obtained for the Investee Funds and considersthe liquidity of the Investee Fund or its underlying investments,the value date of the netasse
289、t value provided,any restrictions on redemptions and the basis of the Investee Fundsaccounting.If necessary,the Fund makes adjustments to the net asset value of the InvesteeFunds to obtain the best estimate of fair value.Private placements are not registered for public sale and,excluding the two Gen
290、esis affiliatedinvestment companies,are carried at an estimated fair value at the end of the year,asdetermined in good faith by theValuation Committee of the Manager,in consultation withthe Board of Directors of the Fund.Factors considered in determining fair value will includea review of the most r
291、ecent statement of financial position and operating results of the privateplacement and such other factors as may be relevant.Private placements are classified eitherin Level 2 or 3 of the fair value hierarchy,depending on whether they are valued based onobservable or unobservable inputs.For other i
292、nvestments held,where market prices are not readily available(or if available marketquotations are not reliable),securities are valued at their fair value as determined in goodfaith by the Valuation Committee of the Manager,using procedures approved by the Boardof Directors.In such circumstances the
293、 value of the security will be determined afterconsidering factors such as cost,type of investment,subsequent trades by the Fund or otherinvestors and other factors as may be relevant.2.SUMMARY OFSIGNIFICANTACCOUNTINGPOLICIES(CONTINUED)46NOTES TO THEFINANCIALSTATEMENTSCONTINUED(b)Financial Instrumen
294、ts(continued)The Fund may make adjustments to the value of a security if it has been materially affectedby events occurring before the Funds NAV calculation but after the close of the primarymarkets on which the security is traded.The Fund may also make adjustment to the valueof its investments if r
295、eliable market quotations are unavailable due to infrequent trading orif trading in a particular security was halted during the day and did not resume prior to theFunds NAV calculation.Amortised cost measurementLoans and receivables are carried at amortised cost using the effective interest method l
296、essany allowance for impairment.Gains and losses are recognised in profit or loss when the loansand receivables are derecognised or impaired,as well as through the amortisation process.Financial liabilities,other than those classified at fair value through profit or loss,are measuredat amortised cos
297、t using the effective interest method.Gains and losses are recognised in profitor loss when the liabilities are derecognised,as well as through the amortisation of theseliabilities.(c)Foreign Currency TranslationFunctional and Presentation CurrencyThe books and records of the Fund are maintained in
298、the currency of the primary economicenvironment in which it operates(its functional currency).The Directors have consideredthe primary economic environment of the Fund and considered the currency in which theoriginal capital was raised,past distributions have been made and ultimately the currency in
299、which capital would be returned on a break up basis.The Directors have also considered thecurrency to which underlying investments are exposed.On balance,the Directors believe that US dollars best represent the functional currency ofthe Fund.The financial statements,results and financial position of
300、 the Fund are alsoexpressed in US dollars which is the presentation currency of the Fund.Transactions and BalancesTransactions in currencies other than US dollars are recorded at the rates of exchangeprevailing on the date of the transaction.At the end of each reporting period monetary itemsand non-
301、monetary assets and liabilities that are fair valued and are denominated in foreigncurrencies are retranslated at rates prevailing at the end of the reporting period.Gains andlosses arising on translation are included in the Statement of Comprehensive Income for theyear.Foreign exchange gains and lo
302、sses relating to cash and cash equivalents are presented inthe Statement of Comprehensive Income within Net exchange gains or losses.Foreignexchange gains and losses relating to financial assets at fair value through profit or loss arepresented in the Statement of Comprehensive Income within Net cha
303、nge in financial assetsat fair value through profit or loss.2.SUMMARY OFSIGNIFICANTACCOUNTINGPOLICIES(CONTINUED)47NOTES TO THEFINANCIALSTATEMENTSCONTINUED(d)Recognition of Dividend and Interest IncomeDividends arising on the Funds investments are accounted for on an ex-dividend basis,grossof applica
304、ble withholding taxes.Deposit interest and interest on short-term paper is accruedon a day-to-day basis using the effective interest method.Dividends and interest income arerecognised in the Statement of Comprehensive Income.(e)Dividend DistributionDividend distributions are at the discretion of the
305、 Fund.A proposed dividend is recognisedas a liability in the period in which it is approved at the annual general meeting of theshareholders and is recognised in the Statement of Changes in Equity.(f)Cash and Cash EquivalentsCash comprises current deposits with banks.Cash equivalents are short-term
306、highly liquidinvestments that are readily convertible within three months to known amounts of cash,aresubject to an insignificant risk of changes in value,and are held for the purpose of meetingshort-term cash commitments rather than for investment or other purposes.Bank overdrafts are accounted for
307、 as short term liabilities on the Statement of FinancialPosition and the interest expense is recorded using the effective interest rate method.Bankoverdrafts are classified as other financial liabilities.(g)Due To and Due From BrokersAmounts due to brokers are payables for securities purchased that
308、have been contracted forbut not yet delivered on the statement of financial position date.Amounts due from brokersinclude receivables for securities sold that have been contracted for but not yet delivered onthe Statement of Financial Position date.These amounts are recognised initially at fair valu
309、e and subsequently measured at amortisedcost using the effective interest method,less provision for impairment for amounts due frombrokers.A provision for impairment of amounts due from brokers is established when thereis objective evidence that the Fund will not be able to collect all amounts due f
310、rom the relevantbroker.Significant financial difficulties of the broker,probability that the broker will enterbankruptcy or financial reorganisation,and default in payments are considered indicators thatthe amount due from brokers is impaired.(h)Segment ReportingOperating Segments are reported in a
311、manner consistent with the internal reporting used bythe chief operating decision maker(CODM).The CODM,who is responsible for allocationof resources and assisting performance of the operating segments,has been identified as theManager,as the Manager is responsible for investment decisions.2.SUMMARY
312、OFSIGNIFICANTACCOUNTINGPOLICIES(CONTINUED)48NOTES TO THEFINANCIALSTATEMENTSCONTINUED(i)ExpensesAll expenses are accounted for on an accruals basis and are charged to the Statement ofComprehensive Income.(j)TaxationThe Fund currently incurs withholding taxes imposed by certain countries on investment
313、income and capital gains taxes upon realisation of its investments.Such income or gains arerecorded gross of withholding taxes and capital gains taxes in the Statement of ComprehensiveIncome.Withholding taxes and capital gains taxes are shown as separate items in the Statementof Comprehensive Income
314、.In accordance with IAS 12,Income taxes,the Fund is required to recognise a tax liabilitywhen it is probable that the tax laws of foreign countries require a tax liability to be assessedon the Funds capital gains sourced from such foreign country,assuming the relevant taxingauthorities have full kno
315、wledge of all the facts and circumstances.The tax liability is thenmeasured at the amount expected to be paid to the relevant taxation authorities,using thetax laws and rates that have been enacted or substantively enacted by the end of the reportingperiod.There is sometimes uncertainty about the wa
316、y enacted tax law is applied to offshoreinvestment funds.This creates uncertainty about whether or not a tax liability will ultimatelybe paid by the Fund.Therefore,when measuring any uncertain tax liabilities,managementconsiders all of the relevant facts and circumstances available at the time that
317、could influencethe likelihood of payment,including any formal or informal practices of the relevant taxauthorities.(k)Share CapitalParticipating Preference Shares have no fixed redemption date and do not automaticallyparticipate in the net income of the Fund or accrue dividends and are classified as
318、 equity.Incremental costs directly attributable to the issue of new shares are shown in equity as adeduction from the proceeds net of tax.(l)Purchase of Own SharesThe cost of purchases of the Funds own shares is shown as a reduction in ShareholdersFunds.The Funds net asset value and return per Parti
319、cipating Preference Share are calculatedusing the number of shares outstanding after adjusting for purchases.As stated in note 2(b)Fair value measurement,the preparation of financial statements,inconformity with IFRS,requires the use of certain critical accounting estimates.It alsorequires the Board
320、 of Directors to exercise its judgment in the process of applying the Fundsaccounting policies.For example,the Fund may,from time to time,hold financial instrumentsthat are not quoted in active markets,such as minority holdings in investment and privateequity companies.Fair values of such instrument
321、s are determined using different valuationtechniques validated and periodically reviewed by the Board of Directors.3.CRITICALACCOUNTINGESTIMATES ANDASSUMPTIONS2.SUMMARY OFSIGNIFICANTACCOUNTINGPOLICIES(CONTINUED)49NOTES TO THEFINANCIALSTATEMENTSCONTINUED(a)Authorised1,000 Founder shares of no par val
322、ue335,000,000 Unclassified shares of no par value(b)IssuedNumber ofShareShareSharesCapitalPremium$000$000As at 30thJune 2015134,964,060134,349As at 1stJuly 2014134,964,060134,349Consists of:Founder shares of no par value1,000Participating Preference Shares ofno par value adjusted for purchaseof own
323、shares(note 2(l)134,963,060As at 30thJune 2015134,964,060Share PremiumShare Premium is the amount by which the value of shares subscribed for exceeded theirnominal value at the date of issue.Founder SharesAll of the Founder Shares were issued on 6thJune 1989 to the Manager or its nominees.The Founde
324、r Shares were issued at$1 each par value.The Founder Shares are not redeemable.At the Extraordinary General Meeting of the Fund on 30thOctober 2009 and in accordancewith The Companies(Guernsey)Law,2008 it was approved that each Founder Share beredesignated as no par value shares.The Founder Shares c
325、onfer no rights upon holders other than at general meetings,on a poll,every holder is entitled to one vote in respect of each Founder Share held.4.SHARE CAPITALAND SHAREPREMIUM50NOTES TO THEFINANCIALSTATEMENTSCONTINUEDParticipating Preference SharesAt the Extraordinary General Meeting of the Fund on
326、 30thOctober 2009 it was approvedthat each Participating Preference Share be divided into ten Participating Preference Shares.Under the The Companies(Guernsey)Law,2008(as amended)the nominal values of theshares were also converted into sterling and redesignated as no par value shares.The holders of
327、Participating Preference Shares rank ahead of holders of any other class ofshare in issue in a winding up.They have the right to receive any surplus assets available fordistribution.The Participating Preference Shares grant the right to dividends declared,andat general meetings,on a poll,grant the r
328、ight to one vote in respect of each ParticipatingPreference Share held.Participating Preference Shares are classed as equity as they have aresidual interest in the assets of the Fund.All of the above classes of shares are considered as Equity under the definitions set out inIAS 32,Financial instrume
329、nts:presentation,because the shares are not redeemable and thereis no obligation to pay cash or another financial asset to the holder.Basic(loss)/earnings per share is calculated by dividing the(loss)/profit for the year by theweighted average number of Participating Preference Shares in issue durin
330、g the year.20152014$000$000(Loss)/profit after tax for the year attributable toPartcipating Preference Shares(120,705)188,714Weighted average number of Participating PreferenceShares outstanding134,963,060134,963,060Basic(loss)/earnings per Participating PreferenceShares basic and diluted($0.89)$1.4
331、0The Fund has not issued any shares or other instruments that will dilute basic earnings.All gains and losses derived from the sale,realisation or transfer of investments,and any othersums which in the opinion of the Directors are of a capital nature are applied to the capitalreserve.5.EARNINGSPER S
332、HARE4.SHARE CAPITALAND SHAREPREMIUM(CONTINUED)51NOTES TO THEFINANCIALSTATEMENTSCONTINUEDThe capital reserve as at 30thJune 2015 consists of the following accumulated amounts:20152014$000$000Realised gains on investments sold908,775857,594Unrealised appreciation on revaluation of investments144,07832
333、1,467Exchange losses(7,771)(9,109)Transfer to share premium(27)(27)1,045,0551,169,92520152014$000$000Management fees1,3471,662Custodian fees224150Directors fees372331Audit fees4882Other accrued expenses88892,0792,314The Fund is exempt from taxation in Guernsey under the provisions of the Income Tax(Exempt Bodies)(Guernsey)Ordinance,1989.As such,the Fund is only liable to pay a fixedannual fee,curr
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