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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Himalayan Fd | LSE:HYF | London | Ordinary Share | NL0000464154 | ORD EUR0.01 |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 35.50 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMHYF
RNS Number : 4961K
Himalayan Fund N.V.
22 August 2012
Half Yearly Report 2012
(partial, please refer to www.himalayanfund.nl for the complete version)
Directors' Report The Fund The Net Asset Value (NAV) per share of your Fund was US$35.03 on June 30(th) 2012, 3.6% higher than the closing NAV on December 31(st) , 2011. Over the same period, the Fund's performance benchmark, the S&P CNX Nifty index in US$ terms, rose by 8.7%. Thus, your Fund underperformed its benchmark by 5.1%. For comparison purposes, the Transaction Price for the Fund's shares was US$34.49 on January 6(th) , the first Execution Day of 2012 and on June 29(th) , the last Execution Day of the period under review, the Transaction Price was US$34.01, a decline of 1.4%. Over the comparable period, the benchmark index gained 4.7%. The Market In the first half of 2012, the MSCI World Index grew by 4.2%, a return comparable to the same period in 2011. The components of the return, however, tell the tale of the markets in the first half of this year. The US market gained 8.3% as optimism that the self-sustaining characteristics of the private sector would overcome a policy standoff typical of an election year. Companies, especially those with significant overseas operations or sales, have built up large cash reserves ready to finance growth in a sustained recovery. Eurozone markets, on the other hand, retreated by 2.2%, as growth slowed widely and company earnings retreated. Policy paralysis in the face of the worsening Euro crisis added to volatility and negative sentiment. Emerging markets overall grew by 3.6%, with Asia contributing 3%. Against this external picture, Indian markets were generally strong in the first half but for foreign investors returns were cut by a sharp devaluation of the Rupee. A rising current account deficit and a lack of policy action on the fiscal deficit undermined confidence in the currency. The major contributors to the Indian trade deficit were high energy prices and high imports of gold. As the year progressed, the softening global economy has undermined demand forecasts for energy, so the prices have retreated but the effect for India has been muted by devaluation. The government increased duty on gold imports and the volume dried up in April. Further, as the external economy continues to weaken, merchandise exports are declining but imports have also been falling, so the currency may have bottomed. All of this has happened without any sign of a balance of payments crisis as happened in 1991 and this is worth a comment. Slow reform of Foreign Direct Investment (FDI) regulations and a controversial tax issue have undermined investor sentiment. FDI inflows have slowed dramatically, making the job of the Reserve Bank in managing the foreign reserves and the balance of payments more difficult. Portfolio inflows have been sustained and stand at nearly $10billion so far but the shortfall in FDI is unwelcome given the current account situation. The RBI has made two key moves in response. First it eased conditions for large corporates to replace expensive domestic borrowings with lower rate foreign commercial borrowings and a substantial volume of transactions resulted. Companies were willing to bet that cheaper external credit repatriated at a depreciated exchange rate could be repaid at a better rate at maturity. Second, it improved access to high- yielding domestic rupee deposits by non-resident Indians (NRIs) and sharply boosted inflows. The consequence of these two moves has been to cushion the reduction in foreign reserves due to the current account deficit and forestall the risk of a currency crisis. Indian GDP growth has slowed from the 8-9% range down to the 5-7% range and although some of this has been due to external factors domestic policy paralysis is also responsible. A fractious coalition government, facing an election in two years and rising demands for transparency in the administration has frozen decision-making to a frustrating degree. The RBI stands ready to provide monetary stimulation but will not risk the inflationary impact in the absence of some fiscal consolidation, in particular a reduction in the subsidy burden on energy and fertilizer prices and the cost of food welfare programmes. In addition, civil servant fears of being engulfed by anti-corruption action is obstructing approvals of development projects and slowing down public sector and private sector investment activity. Thus the Indian consumer has been the predominant growth driver this year, with rural demand making an exceptional contribution after two years of strong growth in the agricultural sector. Former Finance Minister Mukherjee has been elected President of India. He has been replaced by P. Chidambaram, a former incumbent identified with periods of strong growth in the economy and notable reforms. This changeover has ignited expectations of policy and reform action to improve investor sentiment and mobilize development projects to stimulate a return to higher growth rates. Prime Minister Singh has warned ministers that they must act decisively, to avoid a credit rating cut which would make their job more difficult. He has asked an expert panel to make recommendations on anti tax avoidance regulations by early September. In the midst of all this movement, action is also expected on key reforms such as FDI restrictions in sectors like multi-brand retail and aviation. A weak monsoon this year may affect consumer demand, so boosting investment demand through a revival of government action is essential to accelerating GDP growth. Our portfolio performance was weak in the first half, characterised by some exceptional stock price movements. Indraprashtha Gas, a city gas distributer in the New Delhi area was hit by a dramatic tariff order which saw its share price cut by half. The order has since been quashed in the High Court but the stock was under a cloud for the remainder of the period. Bharti Airtel is another stock which has spent much of the period under a regulatory cloud. A Supreme Court decision to cancel 122 licenses for 2G spectrum because of a scandal surrounding their issue seemed to clear the horizon but even the market leader's stock underperformed significantly. Infosys and Jain Irrigation suffered from weak performance and a lack of earnings visibility. These four stocks were the major contributors to the underperformance in the first half. On the positive side, our re-entry into the Auto sector saw ancillary companies Exide, Castrol, Bosch and Balkrishna make excellent contributions. In other sectors, Larsen & Toubro, HDFC Bank, Corporation Bank and Titan Industries also made strong contributions. The Indian markets still trade at attractive levels of valuation in an historic context. The domestic policy environment may see some improvement this quarter, which would undoubtedly stimulate the market. On the external front, there is no evidence that the Eurozone is in any hurry to solve its existential crisis but mid-summer data from the US is looking encouraging. Meanwhile, China seems to be moving towards domestic stimulus. Administration The Fund's Annual Meeting of Shareholders was held on June 7(th) in Amsterdam; the Annual Report for 2011 was adopted by unanimous vote and the Directors were discharged from their responsibilities for the year. The Fund's website provides access to all regulatory and statutory information on the Fund, the address is: www.himalayanfund.nl Also, a fund blog is now available at: http://himalayanfund.blogspot.com/ This provides regular comment which may be of interest to shareholders including a link to the Weekly Market Commentary. Please note that the blog's content is opinion only and does not necessarily represent Fund policy or strategy. Conclusion The Directors would like to thank our loyal shareholders for their continuing commitment to the Fund in these most difficult market conditions. We are taking action to generate new sources of distribution, to keep costs as low as possible and to adapt the portfolio to evolving market conditions. Amsterdam, August 20, 2012 Board of Directors Ian McEvatt, Chairman Dwight Makins Robert Meijer Karin van der Ploeg Financial statements Himalayan Fund N.V. Semi Annual Report 2012 Balance sheet (before profit appropriation) 30-06-2012 31-12-2011 USD Notes USD Investments Securities 15.181.715 4 15.188.036 Short term receivables Receivable on security transactions - 5,1 337.678 Receivables from subscription - - Dividend receivable 74.531 5,2 - Other receivables - 5,3 120.000 74.531 457.678 Other assets Cash at banks 67.032 6 719.982 Current liabilities (due within one year) Payable on security transactions - 7,1 345.474 Due to redemptions - 7,2 5.212 Other liabilities, accruals and deferred income 155.010 7,3 118.950 Total current liabilities 155.010 469.636 Total of receivables and other assets less current liabilities -13.447 708.024 Total assets less current liabilities 15.168.268 15.896.060 Shareholders' equity Issued capital 19.718 8.1 20.322 Share premium 27.383.794 8.2 28.689.326 General reserve -12.813.588 8.3 -2.231.440 Undistributed result current year 578.344 8.4 -10.582.148 Total shareholders'equity 15.168.268 15.896.060 Net Asset Value per share 35,03 33,83 Profit & Loss account 01-01-2012 01-01-2011 30-06-2012 30-06-2011 USD Notes USD Income from investments Dividends 159.460 9.1 44.165 Interest income - 9.2 0 Other income 4.392 9.3 8.648 163.852 52.813 Capital gains/losses Unrealised price gains/losses on investments 1.020.133 4 -3.951.737 Unrealised currency gains/losses on investments -444.841 4 29.147 Realised price gains/losses on investments 300.566 4 1.901.961 Realised currency gains/losses on investments -165.215 4 -40.505 Other exchange differences -20.366 -19.702 690.277 -2.080.836 Expenses Investment advisory fees 129.767 10.1 144.192 Other expenses 161.598 10.2 228.821 291.365 373.013 Tax 15.580 - Total investment result 578.344 -2.401.036 Total investment result per ordinary share 1,34 -6,93 Statement of Cash Flows 01-01-2012 01-01-2011 30-06-2012 30-06-2011 USD notes USD Cash flow from investing activities Income from investments 163.852 9 52.813 Expenses -291.365 10 -373.013 Tax 15.580 - Result of operations -111.933 -320.200 Purchases of investments -499.580 4 -1.307.347 Sales of investments 1.216.544 4 3.488.237 716.964 2.180.890 Change in short term receivables 383.147 6 -18.903 Change in current liabilities -314.626 7 9.258 68.521 -9.645 Cash flow from investing activities 673.552 1.851.045 Cash flow from financing activities Received on shares issued 86.355 8 67.633 Paid on shares purchased -1.392.491 8 -2.439.899 Cash flow from financing activities -1.306.136 -2.372.266 Other exchange differences -20.366 -19.702 Change in cash and cash equivalents -652.950 -540.923 Cash and cash equivalents as at 1 January 719.982 775.892 Cash and cash equivalents as at 30 June 67.032 234.969 Notes 1 General Himalayan Fund N.V. ('the Fund') is an open-end investment company (in Dutch: beleggingsmaatschappij met veranderlijk kapitaal) incorporated under Dutch law and has its statutory seat in Amsterdam. The Fund is listed both on NYSE Euronext Amsterdam and on The London Stock Exchange. This half yearly report is prepared in accordance with Part 9 Book 2 of the Dutch Civil Code and the Act on the Financial Supervision (AFS) ("Wet op het financieel toezicht"). Since December 1991 the Fund is licensed to undertake investment activities according to the Act on the Financial Supervision. 2. Principles of valuation 2.1 Investments The investments are valued based on the following principles: - listed securities are valued at the most recent stock market price as at the end of the accounting period which can be considered fair value; - non or low marketable securities are, according to the judgement of the Investment Advisor, valued at the best effort estimated price, taking into account the standards which the Investment Advisor thinks fit for the valuation of such investments. Expenses related to the purchase of investments are included in the cost of investments. Sales charges, if any, are deducted from gross proceeds and will be expressed in the capital gains/losses. 2.2 Foreign currency translation Assets and liabilities in foreign currencies are translated into US dollars at the rate of exchange as at the balance sheet date. All exchange differences are taken to the profit and loss account. Income and expenses in foreign currencies are translated at the exchange rate as per transaction date. Rates of exchange as at 30 June 2012, equivalent of 1 US dollar: Euro 0,78799 Srilanka Rupee 133,90001 Indian Rupee 55,83499 Bangladesh Taka 81,81498 2.3 Other assets and liabilities Other assets and liabilities are stated at nominal value. If required, provisions have been taken for irrecoverable receivables. 2.4 Income recognition principles The result is determined by deducting expenses from the proceeds of dividend, interest and other income in the period under review. The realized revaluations of investments are determined by deducting the purchase price from the sale proceeds. The unrealized revaluations of investments are determined by deducting the purchase price or the balance sheet value at the start of the period under review from the balance sheet value at the end of the period under review. Brokerage fees payable on the acquisition of investments, if any, are considered to be part of the investments costs, and as a result, are not taken to the profit and loss account. 2.5 Cash flow statement The Cash Flow statement has been prepared according to the indirect method. 3. Risk Management Investing in emerging and developing markets carries risks that are greater than those associated with investment in securities in developed markets. In particular, prospective investors should consider the following: 3.1 Currency Fluctuations The Fund invests primarily in securities denominated in local currencies whereas the Ordinary Shares are quoted in US dollars. The US dollar price at which the Ordinary Shares are valued is therefore subject to fluctuations in the US dollar/ local currency exchange rate. 3.2 Counterparty Risk The Fund deals principally in listed stocks traded on the BSE and the NSE in India. All transactions are book-entry and settlement is fully automated. In the event of non-delivery by either side, the transaction fails. In this case recovery can be achieved by delivery against payment or the transaction abandoned. 3.3 Concentration Risk The investment restrictions for the Fund in section IX INVESTMENT POLICIES of the Prospectus, limit the possibility for concentration of risk by stock and sector. Investors should note that the portfolio will be concentrated in the Indian sub-continent. 3.4 Market Volatility Securities exchanges in emerging markets are smaller and subject to greater volatility than those in developed markets. The Indian market has in the past experienced significant volatility and there is no assurance that such volatility will not occur in the future. 3.5 Market Liquidity A substantial proportion of market capitalization and trading value in emerging markets can be represented by a relatively small number of issuers. Also, there is a lower level of regulation and monitoring of the activities of investors, brokers and other market participants than in most developed markets. Disclosure requirements may be less stringent and there may be less public information available about corporate activity. As a result, liquidity may be impaired at times of high volatility. The Indian markets have withstood high volatility in the recent past and recovered momentum because of excellent corporate results. This has shown that the liquidity in the shares of the top companies is strong, as further emphasized by demand for those shares through Depository Receipts in overseas markets. Furthermore, standards of governance and transparency are improving dramatically under the impetus of the regulatory bodies. Other contiguous markets are not necessarily the same and the Fund only invests in them with the utmost care. 3.6 Fund Liquidity The Fund's rules allow weekly purchases and sales of Ordinary Shares but in order to allow orderly management of the portfolio in the interest of continuing shareholders, the value of purchases may be limited to 5% of the net asset value of the Fund on any one Execution Day. 3.7 Political Economy The Fund's portfolio may be adversely affected by changes in exchange rates and controls, interest rates, government policies, inflation, taxation, social and religious instability and regional geo-political developments. 3.8 Legal and Regulatory Compliance The Fund is responsible for ensuring that no action taken by it or by any contracted service provider might cause a breach of any legal or regulatory requirement. The Fund and all of its service providers maintain adequate control procedures to guard against any such occurrence and these procedures are subject to regular review. Should such a breach occur inadvertently, control procedures should detect it and institute corrective action without delay. 3.9 Financial Crisis Almost uniquely amongst financial markets, the Indian financial sector was insulated against any consequences of the recent financial crisis by the tight control exercised by the RBI. Bank balance sheets were free of toxic assets and capital ratios were maintained. Ratios of non-performing assets remained within historic norms. 3.10 Credit risk The principal credit risk is counterparty default (i.e., failure by the counterparty to perform as specified in the contract) due to financial impairment or for other reasons. Credit risk is generally higher when a nonexchange-traded or foreign exchange-traded financial instrument is involved. Credit risk is reduced by dealing with reputable counterparties. The Fund manages credit risk by monitoring its aggregate exposure to counterparties. Notes to the Balance sheet 30-06-2012 31-12-2011 4. Investments USD USD 4.1 Statement of changes in securities Position as at 1 January 15.188.036 21.851.061 Purchases 499.580 8.528.034 Sales -1.216.544 -5.332.752 Unrealised price gains/losses on investments 1.020.133 -10.207.805 Unrealised currency gains/losses on investments -444.841 -2.212.764 Realised price gains/losses on investments 300.566 2.679.637 Realised currency gains/losses on investments -165.215 -117.375 Position as at 30 June 15.181.715 15.188.036 Historical cost 14.288.139 14.869.752 The portfolio comprises of shares, mainly listed. The total unlisted shares held directly by the Fund amounted to USD 154,484 (31 December 2011 : USD 163,074). The portfolio breakdown as at 30 June 2012 is specified on pages 19 to 20 of this report. 4.2 Transaction costs The transaction costs for the purchase of investments are capitalized within the historical cost price and for sales the transaction costs are discounted from the sales price. Transaction costs in 2012 are : USD 6,004 (2011: USD 19,770). 5. Receivables 5.1 Receivable on security transactions These include transactions still unsettled as at the balance sheet date. 5.2 Dividend receivable These include dividend accruals which become payable after balance sheet date. 5.3 Other receivables These include other transactions still unsettled as at the balance sheet date. 6. Cash at banks This includes immediately due demand deposits at banks. 7. Current liabilities (due within one year) 7.1 Payable on security transactions These include transactions still unsettled as at the balance sheet date. 7.2 Due to redemptions These include the debts in respect of the redemptions of shares Himalayan still unsettled as at the balance sheet date. 7.3 Other liabilities, accruals and deferred income Payable investment advisory fee 56.526 60.050 Payable administration fee 5.845 6.174 Payable auditors fee 27.151 19.166 Other expenses payable 65.488 33.560 155.010 118.950 8. Shareholders' equity The authorised share capital of the Fund is EUR 60,000 (31 December 2011: EUR 60,000) and consists of: - Ordinary shares of EUR 0.01 each 5.000.100 - Priority shares of EUR 0.20 each 49.995 30-06-2012 31-12-2011 8.1 Issued capital number USD USD Ordinary shares: Position as at 1 January 469.432 6.092 5.260 Sold 2.060 21 1.468 Purchased -38.882 -389 -696 Revaluation -236 60 Position as at 30 June 432.610 5.488 6.092 Priority shares: Position as at 1 January 49.995 14.230 14.230 Sold - - 0 Revaluation - 0 Position as at 30 June 49.995 14.230 14.230 Total issued capital 19.718 20.322 As at 30 June 2012 the issued and subscribed share capital amounts to: EUR EUR Ordinary shares, par value EUR 0.01 (31 December 2010: EUR 0.01) 4.450.005 44.500 44.500 Priority shares, par value EUR 0.20 (31 December 2010: EUR 0.20) 49.995 9.999 9.999 54.499 54.499 The Fund became open-ended on 7 April 2000. As at 30 June 2012 a total of 4,017,395 Ordinary Shares have been purchased, meaning that 432,610 Ordinary Shares are still outstanding as at 30 June 2012. Ordinary Shares purchased by the Fund are directly charged against capital and share premium. 8.2 Share premium USD USD Position as at 1 January 28.689.326 24.656.811 Received on shares sold 86.334 7.455.309 Paid on shares purchased -1.392.102 -3.422.734 Revaluation of outstanding capital 236 -60 Position as at 30 June 27.383.794 28.689.326 30-06-2012 31-12-2011 USD USD 8.3 General reserve Position as at 1 January -2.231.440 -5.559.902 Transferred from undistributed result -10.582.148 3.328.462 Position as at 30 June -12.813.588 -2.231.440 8.4 Undistributed result Position as at 1 January -10.582.148 3.328.462 Transferred to/from general reserve 10.582.148 -3.328.462 Total investment result 578.344 -10.582.148 Position as at 30 June 578.344 -10.582.148 Three years Himalayan Fund N.V. 30-06-2012 31-12-2011 31-12-2010 Net Asset Value (USD x 1,000) Net Asset Value according to balance sheet 15.168 15.896 22.445 Less: value priority shares 14 14 14 15.154 15.882 22.431 Number of Ordinary Shares outstanding 432.610 469.432 392.187 Per Ordinary Share Net Asset Value share (USD) 35,03 33,83 57,19 Notes to the Profit & Loss account 9. Income from investments 9.1 Dividends This refers to net cash dividends including withholding tax. Stock dividends are considered to be cost free shares. Therefore stockdividends are not presented as income. 9.2 Interest income Most of this amount was received on outstanding cash balances. 9.3 Other income From March 6, 2009 this refers to the charges of 0.35% received on shares issued and repurchased. These costs are to cover transaction costs in relation with the purchase and sale of Ordinary Shares and are booked as an income for the Fund. 01-01-2012 01-01-2011 10. Expenses 30-06-2012 30-06-2011 USD USD 10.1 Investment advisory fees Advisory fee 124.767 134.498 Custody Fee and Charges 5.000 9.694 129.767 144.192 Expenses directly related to the management of investments, like custody fees and transfer charges as well as other paying agent fees, are deducted from the result. These expenses are included in other investment management fees with the exception of the transfer charges. Transfer charges are accounted for in the investment revaluation reserve. 10.2 Other expenses Administration Fees and Charges 33.180 36.705 Company Secretarial and Domiciliation Fees 19.275 20.933 Bank Expenses 5.282 6.211 Regulatory Fees and Charges 12.511 13.729 Legal Expenses 3.239 5.149 Listing Expenses - 38.329 Audit Fees 23.167 19.780 Fiscal Advisory Fees 9.393 1.762 Advertising and Promotion 13.438 17.162 Directors Fees 31.208 31.208 Board Expenses 9.782 29.891 Depreciation and Amortization - - Miscellaneous 1.124 7.963 161.599 228.822 Expense ratio The expense ratio (cost ratio) is calculated as follows: the total expenses of the Fund divided by the average NAV*. The expense ratio of the Fund for the reporting period is equal to: 3.44 % (2011: 3.87 %). Turnover ratio The turnover ratio is calculated as follows: the total sum of purchases plus sales minus subscriptions minus redemptions divided by the average NAV *. The turnover ratio of the Fund for the reporting period is equal to: 2.8 % (2011: 23.73 %). * - The average Net Asset Value of the Company for reporting period is calculated as the sum of the Net Asset Value as per 31 December 2011, 31 March 2012 and 30 June 2012 in the proportion 0.5 : 1 : 0.5, divided by the weighted number of observations. Comparison of real cost with cost according to Prospectus* According to Actual costs Prospectus USD USD Management fee (1) 124.767 124.767 Administration fee (2) 33.180 33.180 Secretarial and Domiciliation fees (3) 19.275 19.275 Costs for the Board (4) 100.000 40.989 *- As per the Prospectus of 7 June 2010. 1) The Investment Advisor receives an annual fee of 1.5 per cent (calculated on a daily basis) of the Net Asset Value of the Fund. 2) CACEIS NL is paid a fixed fee of EUR 50,000 per year for administration services. 3) Inviqta has been appointed to provide domicile and company secretarial services to the Fund for a fixed fee of EUR 25,000 (exclusive VAT) per year. 4) The Prospectus states that the remuneration of the Directors is subject to a limit of USD 100,000 in aggregate per year. In 2012 the remuneration of the Directors was USD 31,208 (inclusive VAT) in total so far. Directors fees per person are as follows: Ian McEvatt*: USD 5,000 (2011: USD 10,000); Dwight Makins: USD 9,250 (2011: USD 18,500); Robert Meijer: USD 11,008 (2011: USD 22,015); Karin van der Ploeg*: USD 5,950 (2011: USD 11,900). Board expenses (exclusive remuneration of the Directors) amount to USD 9,782 in 2012. * Ian McEvatt is also a director of the Investment Advisor of the Fund and Karin van der Ploeg is a partner of Inviqta. It has been agreed that members of the Board who are also directors/partners of the service providers of the Fund receive a fixed annual management fee of US$ 10,000. Employees The Fund has no employees. Amsterdam, August 22, 2012 Board of Directors Ian McEvatt, Chairman Dwight Makins Robert Meijer Karin van der Ploeg
This information is provided by RNS
The company news service from the London Stock Exchange
END
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