TIDMHYF
RNS Number : 4656F
Himalayan Fund N.V.
26 April 2011
Chairman's Letter
Dear Shareholders,
After the dramatic market action of 2008 and 2009, the past year seemed distinctly
benign on the surface, as the net asset
value per share of your Fund increased by $8.3, from $48.89 to $57.19 during the
year, an increase of 17%. In the same
period, the S&P CNX Nifty Index increased by 17.9% but, taking account of Rupee
appreciation, this translates into a
22.8% gain in U.S. dollar terms. Thus your Fund under-performed its comparative
benchmark by 5.8% for the year.
We regret this relative underperformance, which was substantially due to unexpected
action in a couple of stocks which
occurred while a planned strategic adjustment was under way in August and September.
As a consequence, the Fund was
left with an unusually high level of liquidity during a strongly rising market. This
event apart, the year was characterised
by sharp swings in risk appetite as global investors reacted to economic uncertainty
in the US and the EU and globally
rising commodity prices. With financial markets moving largely in step, the Indian
markets distinguished themselves by
drawing in a record volume of liquidity, as foreign investors bought up
a net $28bn of Indian shares.
Global market sentiment in 2010 was dominated by concerns about the pace of economic
recovery in developed
economies and a debt crisis in the Eurozone. As the year progressed, the strength of
corporate earnings growth in many
markets encouraged equity investors to believe that economic recovery would follow
the markets, so returns for the year
reflected that. The US, UK and Germany saw equity markets advance by double figures
but China fell by 16% as signs of
overheating emerged. While developing markets, especially in Asia, showed robust
growth, signs of overheating
emerged. Inflation and rapid absorption of excess capacity brought the requisite
response in monetary policies, which
brought markets off recent highs by year-end. Nonetheless, many global equity markets
closed the year at or near record
highs, despite major macroeconomic crises rumbling on and a broad absence of
confidence in the major drivers of global
economic growth.
India's GDP growth for the fiscal year ending March 2011(FY11) looks like reaching
8.5% as industrial and agricultural
production make strong contributions. Industry was sustained by order flow from
infrastructure projects and a
surprisingly strong export performance. An excellent monsoon drove crop-sowing to
record levels, especially in wheat,
rice and cotton. Over-abundant rain extended beyond the normal season and this caused
a reaction in horticultural
supplies as shortages of onions and tomatoes caused a sharp up-tick in food
inflation. Global wheat prices were also
driven sharply upwards by poor weather in major production areas,
adding to inflationary concerns.
The Reserve Bank of India (RBI) addressed the inflationary conditions with modest
reserve adjustments and six
successive increases in policy rates. This brought the policy stance from easy back
to neutral but it may have been at the
cost of stunting the embryonic recovery of private investment. For this reason, the
RBI is looking for any excuse to stay its
hand now, to avoid restraining growth as the government tries to spread the benefits
across the population. There is
increasing evidence that short-cycle horticultural production is recovering and
bumper Kharif harvests and Rabi sowing
will finally start to drive down the core inflation rate, allowing the RBI to ease
back. Given some fiscal consolidation in the
Union Budget to go with a stable monetary outlook, private sector investment may
finally start to accelerate in line with a
revival of public sector infrastructure orders. Against that background, GDP growth
for FY12 should again be in the 8%
range, with corporate earnings
growing by 18-20%.
Since hitting a peak in early November 2010, Indian equity markets have seen a decent
correction by the time of writing.
The market valuation multiple has dropped from 19-20 times earnings to be in line
with its long-term average of 14.5
times. This should provide an attractive entry point for investors interested in
healthy returns over a three to four year
time-frame.
The recent correction has substantially been driven by a change in global sentiment
from one driven by swings in risk
aversion to one driven by opportunity at the level of individual stocks. Sentiment
for investing in India will be driven by
the inflation outlook, the Union Budget and the manner in which the government
addresses recent corruption scandals.
With food supplies now assured and a high base effect dropping out of the picture in
March, the rate of wholesale price
inflation (WPI) should start to move back down into the RBI's target range in the
June quarter. This should ease pressure
on the RBI, as will recent evidence of slower absorption of excess capacity. The
Finance Minister appears determined to
sustain the reduction in the central fiscal deficit below 5%, while boosting spending
on agricultural efficiency and
infrastructure in the
Union Budget.
So, attention then turns to addressing the recent scandals concerning the
Commonwealth Games, the procuring of
mortgage advances and the allocation of 2G wireless spectrum licenses. These have
given foreign investors the feeling
that it is the "same old India" and with growth returning to the USA economy in
particular and the major European ones
as well, this has led to an outflow of capital. All these affairs are now the subject
of criminal investigations and the Prime
Minister has finally agreed to a parliamentary enquiry into the 2G matter. This
decision was just in time to break the
logjam caused by the opposition in the Lokh Saba to allow a constructive Budget
Session of parliament to proceed. This
may encourage movement on previously blocked reform measures, a welcome boost to
investor confidence and
optimism. None of these scandals have any relevance to the economic prospects for
India and so we are confident that the
Stock Markets will recover their poise and continue to grow in line
with the expected earnings growth.
Your Board and I remain confident in the prospects for the Indian economy and for
attractive returns from investing in
Indian markets in the medium to long term. We thank our shareholders for their
continued loyalty to Himalayan Fund
N.V. and we once again assure them of our commitment to
their interest.
Ian McEvatt
March 18, 2011
Directors' Report
The Fund
The Transaction price of the Fund's shares on the first Execution Day of the year
(January 4, 2010) was $49.13 and on the
last Execution Day (December 31, 2010) it was $56.69, a rise of 15.4%. The net asset
value per share at the close of
business on December 31(st) 2010 was $57.19, compared with $48.89 a year earlier,
representing an increase in value of 17%
in the year. The difference between the two figures is explained by the fact that the
opening day for accounting purposes was
not an Execution Day for the Fund's shares in 2010; the closing day was an Execution
Day but the Transaction Price is set at
0659 Amsterdam time. The Fund's performance benchmark, the S&P CNX Nifty Index rose
by 22.8% in US Dollar terms
for the period January 1, 2010 to December 31, 2010. Thus, the Fund under-performed
its performance benchmark by a
margin of 5.8% for
the year.
At the start of 2010, 410,804 Ordinary Shares of the Fund were held by third parties.
At the end of the year, this number had
fallen to 392,187, a decline of 4.5%. Despite consistent performance and a strong
Indian market, 2010 was a very difficult
year for promoting investment in the Fund. Global investor risk appetite was volatile
in the face of uncertainty about the
strength of global economic recovery and was regularly punctured by the Eurozone
credit crisis. Even though sales to new
investors were subdued all year, net repurchases were also quite low. The Directors
would like to thank our shareholders for
their continuing support of the Fund and are confident that they will
be rewarded with excellent returns.
The Portfolio
Foreign portfolio flows provided a consistent underpinning for the Indian equity
markets in 2010, with FII's investing a net
$28billions in Indian shares. Investor sentiment was sustained by confident
expectations that emerging markets would
outperform developed markets on the back of strong GDP growth and accelerating
earnings. In the event, India
outperformed the other BRIC markets with a 22.8% gain in US Dollar terms. The economy
enjoyed a number of favourable
tailwinds including a "normal" monsoon, meaning rainfall equal to the long-term
average, as well as exceptional income
from the sale of 3G wireless spectrum licenses. The auction of wireless spectrum
contributed an estimated 1% of GDP in
non-tax revenue to the government. In addition, buoyancy in direct tax revenues has
also helped to bring down the fiscal
deficit, which is now forecast to undershoot its budget
target of 5.5% of GDP.
The favourable monsoon brought record sowings of major crops and record reservoir
levels, so that the agriculture sector is
estimated to have contributed growth of 5.4% to overall GDP in 2010, compared to a
typical average of around 2%. This
growth has brought a considerable boost to rural consumption, which has become a
stable component of aggregate demand.
During the course of the year, stable growth in industrial production and
accelerating manufactured exports provided
economic momentum. Infrastructure investment was an important source of demand,
though as the year progressed,
bureaucratic and land acquisition delays slowed order flow for the
Capital Goods sector in particular.
Portfolio strategy continued to focus on infrastructure development, particularly in
the Energy sector but we also increased
exposure to Consumer Goods. Financial sector exposure was trimmed as the RBI
progressively moved monetary policy to a
"neutral" stance, executing six policy rate increases. This may have delayed an
acceleration of the private sector investment
cycle but assured the RBI's record for inflation management, though it remains to be
seen if they avoided stunting GDP
growth. The favourable monsoon followed a really poor one in 2009, so there has been
a hangover of food inflation, with a
base level in the high teens, so harvesting this year's crops is a key element in
driving overall WPI inflation down towards
the RBI target of 7%.
Excellent returns came for stocks in FMCG, Telecom, IT, and agriculture-related
businesses. Broad industrials under-
performed, as did materials stocks, the Energy sector overall and Utilities; the Real
Estate sector recorded a substantial loss,
vindicating our decision to avoid it. Our biggest contributors to performance were
Jain Irrigation, Housing Development and
Indraprashtha Gas. Other big contributions came from Nestle India, Infosys and HDFC
Bank. Under-performing stocks
included Reliance Industries, Jindal Steel & Power, Tata Power and Bharat Heavy
Electrical. During the year we sold
Emami and Marico when they generated unexpectedly high returns in a short time-frame.
We sold Reliance
Communications, NTPC, Mercator Lines and a number of small-cap holdings in order to
capture better return prospects. We
sold Cairn India on the announcement of the Vedanta acquisition because we did not
like the structure of the deal. Finally,
we sold Aban Offhsore when it lost a rig in the Gulf of
Mexico early in the year.
The performance of the portfolio was unsatisfactory and your Board has reviewed the
outcome with the Investment Advisor.
A major contribution to underperformance came in August and September while we were
adjusting sector exposures by
trimming some concentrated positions to introduce new stocks. At this time, the Cairn
India deal was announced and the
Investment Committee of the Fund decided to exit the stock in the market. At the same
time, a Consumer Goods stock hit a
price level which triggered a sell recommendation and between the two, the Fund found
itself with too much liquidity in a
strong market. The portfolio underperformed by nearly 6% in September
as a consequence.
For 2011, we have trimmed some of our concentrated holdings in Energy and Capital
Goods; we are focussing on stocks
which will benefit from the resurgent agricultural sector and burgeoning rural
consumer demand. We have increased
exposure to the IT sector which will see revenue gains in major markets as the
Financial Sector in particular increases back-
office and IT
budgets.
Risk Management and
Administration
In 2010, your Board undertook the following
administrative and regulatory actions:
1. Adopted a new logo
at the Board meeting
in March;
2. Appointed Deloitte Belastingadviseurs B.V. as
advisors on Dutch tax matters;
3. Amended Articles
of Association on
Priority Shares;
4. Filed a new
Prospectus, effective
June 7th;
5. Appointed Arden Partners plc as brokers to
the Fund at The London Stock Exchange.
In preparation for each quarterly Board meeting, the Fund's Reporting Entity
(Inviqta) prepared a checklist of compliance
with corporate governance policy for the Oversight Entity (Mr. Dwight Makins). The
Oversight Entity made a report to each
Board, drawing attention to the checklist details. There have been no breaches of the
corporate governance policy during the
year 2010.
The Fund is a long only equity fund and as such does not use leverage or derivatives
in its portfolio. Thus the portfolio is
exposed fully to the price movements in its holdings of Indian stocks. There were no
significant holdings of debt instruments
in the portfolio, so there is no exposure to credit risk. The Fund does not engage in
securities' lending and periodically asks
its custodian to confirm that its stocks have not been used for securities' lending.
As a matter of policy, the Fund does not
hedge currency exposure in the portfolio. In 2010, the Rupee appreciated by 5.8%
against the US dollar and this contributed
to the rise in portfolio value. This appreciation was substantially due to record
foreign portfolio inflows as well as external
corporate borrowings by Indian businesses. The volume of market activity by domestic
institutions continued to increase
during 2010 and added substantial appetite for a heavy calendar of public offerings
in the market. There were no instances
during the year when market liquidity suffered disruptive events which might have
prevented orderly execution of orders.
Your Board has reviewed the operations of the Investment Advisor during the year and
are satisfied that it has the substance
and procedures to carry out its responsibilities in a suitable manner. In terms of
risk analysis, the portfolio shows a mean
monthly return of 2.13% with a standard deviation of 10.81 and Sharpe ratio of 2.11
over the period since the appointment
of the Investment Advisor. The S&P CNX Nifty Index generated a mean return of 2.09%
with a standard deviation of 10.55
and a Sharpe ratio of 2.07. The Fund had 35 periods of positive returns against 32
for the index and both had a maximum
drawdown of 30.7%. The summary conclusion from this analysis is that the investment
management of the Fund adds value
relative to the comparative index and that the Investment Advisor has provided a
standard of service which satisfies the
Board.
The Board also reviews the conduct of the administration of the Fund by the
Administrator at Board meetings. As a
consequence of these reviews, the Directors have reason to believe that they are in
control of the operations of the Fund.
The Fund executes market trades through a panel of stockbrokers which is selected
according to standards of service in trade
execution, settlement, research capability and sales support. The broker list is
reviewed periodically and counterparties may
be added or deleted from time to time. No new brokers were added to the panel during
the year, though one broker is no
longer used due to a disruption in relationship resulting form reorganisation.
Payment of commission rebates is not a normal
practice in Indian markets and the Fund does not maintain soft-dollar arrangements,
nor has it any intention of doing so.
The Directors continue to manage expenditure tightly though further significant cost
reduction is difficult. The TER is at an
unsatisfactory level and the solution lies in introducing new investors. At the time
of writing, there are negotiations under
way which, it is hoped, will bring access to new investors for the Fund. Given a
reasonable volume of inflows, the TER can
be expected to fall
quite rapidly.
The Outlook
The prospects for sustained economic growth in India are excellent and the government
is committed to a stable economic
policy framework. Inflation seems to be on a downward trajectory now, allowing the
RBI to focus on growth. The
government is making progress on addressing the major corruption scandals which have
attracted headlines overseas and the
market valuation stands at an attractive level. Against this background, the
Directors believe the outlook for superior returns
from investing in Himalayan Fund
is excellent.
Amsterdam, March 18,
2011
Board of Directors
Ian McEvatt, Chairman
Dwight Makins
Robert Meijer
Karin van der Ploeg
Financial statements
Himalayan Fund N.V.
Annual Report 2010
Balance sheet
(before profit
appropriation)
31-12-2010 31-12-2009
USD Notes USD
Investments
Securities 21.851.061 4 20.125.806
Other assets
Cash at banks 775.892 5 128.995
Current liabilities (due within
one year)
Due to redemptions 22.006 6,1 -
Other liabilities, accruals and
deferred income 160.086 6,2 154.656
Total current
liabilities 182.092 154.656
Total of receivables and other
assets
less current
liabilities 593.800 -25.661
Total assets less current
liabilities 22.444.861 20.100.145
----------- ------------
Shareholders' equity
Issued capital 19.490 7,1 20.124
Share premium 24.656.811 7,2 25.639.923
General reserve -5.559.902 7,3 -16.323.605
Undistributed result
current year 3.328.462 7,4 10.763.703
Total
shareholders'equity 22.444.861 20.100.145
----------- ------------
Net Asset Value per
share 57,19 48,89
Profit & Loss account
01-01-2010 01-01-2009
31-12-2010 31-12-2009
USD Notes USD
Income from
investments
Dividends 293.858 8,1 183.470
Interest income 65 8,2 326
Other income 8.354 8,3 16.891
302.277 200.687
Capital gains/losses
Unrealised price gains/losses on
investments 3.488.913 4 8.441.183
Unrealised currency gains/losses
on investments 740.121 4 812.733
Realised price gains/losses on
investments -134.222 4 2.356.285
Realised currency gains/losses
on investments -328.082 4 -292.432
Other exchange
differences -7.175 -10.234
3.759.555 11.307.535
Expenses
Investment advisory
fees 340.993 9,1 273.180
Other expenses 392.377 9,2 471.339
733.370 744.519
----------- ------------
Total investment
result 3.328.462 10.763.703
----------- ------------
Total investment result per
ordinary share 8,49 26,20
Statement of Cash Flows
01-01-2010 01-01-2009
31-12-2010 31-12-2009
USD notes USD
Cash flow from investing
activities
Income from
investments 302.277 8 200.687
Expenses -733.370 9 -744.519
----------- ------------
Result of operations -431.093 -543.832
Purchases of
investments -2.665.932 4 -3.260.102
Sales of investments 4.707.407 4 7.313.713
2.041.475 4.053.611
Change in short term
receivables - 27.791
Change in current
liabilities 27.436 6 32.291
----------- ------------
27.436 60.082
----------- ------------
Cash flow from investing
activities 1.637.818 3.569.861
Cash flow from financing
activities
Received on shares
issued 706.828 7 1.010.742
Paid on shares
purchased -1.690.574 7 -4.596.278
----------- ------------
Cash flow from financing
activities -983.746 -3.585.536
Other exchange
differences -7.175 -10.234
----------- ------------
Change in cash and cash
equivalents 646.897 -25.909
Cash and cash equivalents as at
1 January 128.995 154.904
----------- ------------
Cash and cash equivalents as at
31 December 775.892 128.995
----------- ------------
Notes
1 General
Himalayan Fund N.V. ('the Fund') is an open-end investment company (in Dutch:
beleggingsmaatschappij met veranderlijk
kapitaal) incorporated under Dutch law and has its statutory seat in Amsterdam. The
Fund is listed both on NYSE Euronext
Amsterdam and on The London
Stock Exchange.
This annual report is 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 stockmarket price as at the end of
the accounting period which can be
considered fair
value;
- non or low marketable securities are, according to the 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 31 December 2010, equivalent of 1
US dollar:
---------------------------------------------------------- ------------ ------------
Srilanka
Euro 0,74541 Rupee 110,94503
Indian Rupee 44,71499 Bangladesh Taka 70,47500
---------------------- --------- ---------- ------------------------- ------------
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
31-12-2010 31-12-2009
4. Investments USD USD
4.1 Statement of changes in
securities
Position as at 1
January 20.125.806 12.861.648
Purchases 2.665.932 3.260.102
Sales -4.707.407 -7.313.713
Unrealised price gains/losses on
investments 3.488.913 8.441.183
Unrealised currency gains/losses
on investments 740.121 812.733
Realised price gains/losses on
investments -134.222 2.356.285
Realised currency gains/losses
on investments -328.082 -292.432
Position as at 31
December 21.851.061 20.125.806
------------ ------------
Historical cost 9.112.208 11.615.987
The portfolio comprises of
shares, mainly listed.
The total unlisted shares held directly by the Fund amounted to USD 156,463 (31
December 2009 : USD 144,251).
The portfolio breakdown as at 31 December 2010 is specified on pages 21
to 22 of this report.
4.2 Transaction costs
The transaction costs for the purchase of investments are capitalized within the
historical cost price and for sales the
transaction costs are discounted from the sales price. Transaction costs in 2010 are
: USD 33,426 (2009 : USD 31,061).
5. Cash at banks
This includes immediately due demand
deposits at banks.
6. Current liabilities (due
within one year)
6.1 Due to
redemptions
These include the debts in respect of the redemptions of shares Himalayan still
unsettled as at the balance sheet date.
6.2 Other liabilities, accruals
and deferred income
Payable investment
advisory fee 84.811 75.990
Payable
administration fee 5.757 5.978
Payable auditors fee 36.499 34.147
Other expenses
payable 33.019 38.541
------------ ------------
160.086 154.656
------------ ------------
7. Shareholders'
equity
The authorised share capital of the Fund is EUR 60,000 (31 December 2009: 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
31-12-2010 31-12-2009
7.1 Issued capital number USD USD
Ordinary shares:
Position as at 1
January 410.804 5.894 6.978
Sold 14.048 140 274
Purchased -32.665 -327 -1.186
Revaluation -447 -172
----------- ------------ ------------
Position as at 31
December 392.187 5.260 5.894
----------- ------------ ------------
Priority shares:
Position as at 1
January 49.995 14.230 695
Sold - - 14.230
Revaluation - -695
----------- ------------ ------------
Position as at 31
December 49.995 14.230 14.230
----------- ------------ ------------
Total issued capital 19.490 20.124
------------ ------------
As at 31 December 2010 the issued and subscribed share
capital amounts to: EUR EUR
Ordinary shares, par value EUR 0.01 (31
December 2009: EUR 0.01) 4.450.005 44.500 44.500
Priority shares, par value EUR 0.20 (31
December 2009: EUR 0.20) 49.995 9.999 9.999
54.499 54.499
------------ ------------
The Fund became open-ended on 7 April 2000. As at 31 December 2010 a total of
4,057,818 Ordinary Shares have
been purchased, meaning that 392,187 Ordinary Shares are still outstanding as at 31
December 2010. Ordinary Shares
purchased by the Fund are directly charged against
capital and share premium.
7.2 Share premium USD USD
Position as at 1
January 25.639.923 29.237.910
Received on shares
sold 706.688 996.238
Paid on shares
purchased -1.690.247 -4.595.092
Revaluation of
outstanding capital 447 867
Position as at 31
December 24.656.811 25.639.923
------------ ------------
31-12-2010 31-12-2009
USD USD
7.3 General reserve
Position as at 1
January -16.323.605 7.744.537
Transferred from undistributed
result 10.763.703 -24.068.142
Position as at 31
December -5.559.902 -16.323.605
------------ ------------
7.4 Undistributed
result
Position as at 1
January 10.763.703 -24.068.142
Transferred to/from general
reserve -10.763.703 24.068.142
Total investment
result 3.328.462 10.763.703
Position as at 31
December 3.328.462 10.763.703
------------ ------------
Three years Himalayan Fund N.V.
31-12-2010 31-12-2009 31-12-2008
Net Asset Value (USD
x 1,000)
Net Asset Value according to
balance
sheet 22.445 20.100 12.922
Less: value priority
shares 14 14 1
----------- ------------ ------------
22.431 20.086 12.921
----------- ------------ ------------
Number of Ordinary
Shares
outstanding 392.187 410.804 502.049
Per Ordinary Share
Net Asset Value
share (USD) 57,19 48,89 25,74
Notes to the Profit & Loss account
8. Income from
investments
8.1 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.
8.2 Interest income
Most of this amount was received on
outstanding cash balances.
8.3 Other income
From March 6, 2009 this refers to the charges of 0.35% received on
shares issued and repurchased.
From December 2007 up to March 6, 2009, the premium and
discount is 0%.
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.
01-01-2010 01-01-2009
9. Expenses 31-12-2010 31-12-2009
USD USD
9.1 Investment
advisory fees
Advisory fee 325.727 261.157
Custody Fee and
Charges 15.266 12.023
340.993 273.180
------------ ------------
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.
9.2 Other expenses
Administration Fees
and Charges 70.885 116.115
Company Secretarial and
Domiciliation Fees 39.360 41.063
Bank Expenses 10.183 17.261
Regulatory Fees and
Charges 19.366 9.911
Legal Expenses 7.359 14.708
Listing Expenses 55.248 20.562
Audit Fees 34.168 48.699
Fiscal Advisory Fees 19.660 7.663
Advertising and
Promotion 22.473 57.011
Directors Fees 62.415 62.415
Board Expenses 47.983 50.931
Depreciation and
Amortization - 25.000
Miscellaneous 3.277 -
392.377 471.339
------------ ------------
Audit fees include the audit of the financial statements by the external auditor
Deloitte amounting to USD 31,563 (2009:
USD 34,120)
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:
3.42 % (2009: 4.52 %).
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:
23.23 % (2009: 17.61 %).
* - 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 2009, 31 March 2010, 30 June 2010, 30 September 2010 and 31 December
2010 in the proportion
0.5 : 1 : 1 : 1 : 0.5, divided by the
weighted number of observations.
Comparison of real cost with cost according
to Prospectus*
According
to Actual
Prospectus costs
USD USD
Management fee (1) 325.727 325.727
Administration fee EUR
(2) 50.000,00 66.309 70.885
Secretarial and Domiciliation EUR
fees (3) 29.750,00 39.454 39.360
Costs for the Board
(4) 100.000 110.398
*- As per new 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) Until August 1, 2009 the Fund has paid to Fastnet NL a monthly administration fee
(excluding VAT) equal to 1/12 of 0.2%
of the average Net Asset Value with a minimal fee of EUR 100,000 per year. As from
August 1, 2009 a lower fee has been
renegotiated. Fastnet NL is now paid a fixed fee of EUR 50,000 per year
for administration services.
3) Until August 1, 2009 the Fund also has been paying to Fastnet NL a fixed monthly
domicile fee (exclusive VAT) equal to
EUR 25,000 per year. As from August 1, 2009 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 2010 the remuneration of the Directors was USD 62,415 (inclusive VAT) in total so
far. Directors fees per person are as
follows: Ian McEvatt*: USD 10,000 (2009: USD 10,000); Joe Tabbers (resigned as per 11
June 2009): (2009: USD 5,950);
Dwight Makins USD18,500 (2009: USD 18,500); Robert Meijer USD: 22,015 (2009: USD
22,015). Karin van der Ploeg*
(appointed as per 11 June 2009): USD 11,900 (2009: USD 5,950). Board expenses
(exclusive remuneration of the Directors)
amount to USD 47,983
in 2010.
* 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, March 18,
2011
Board of Directors
Ian McEvatt, Chairman
Dwight Makins
Robert Meijer
Karin van der Ploeg
HIMALAYAN FUND N.V.
NOTICE OF THE ANNUAL GENERAL MEETING OF SHAREHOLDERS
Notice is hereby given that the Annual General Meeting of
Shareholders of Himalayan Fund N.V (the "Fund"). will be held on
Wednesday 8 June 2011 at 13h00 at the offices of Fastnet
Netherlands N.V., De Ruyterkade 6-i, 1013 AA Amsterdam.
The annual report of Himalayan Fund N.V. 2010 is now
available.Copies of the annual report 2010 and the agenda are
published on the website of the Fund: http://www.himalayanfund.nl
and may be obtained free of charge at the registered office of the
Fund:
Himalayan Fund N.V.
Legmeerdijk 182
1187 NJ Amstelveen
The Netherlands
T/F 020-6411161
himalayan@inviqta.nl
The Board of Directors
May 26, 2011
(i) Shareholders (and other persons/entities entitled to attend
the Annual General Meeting) who are in de possession of shares of
the Fund on Wednesday 11 May 2011(the "Registration Date") and have
notified their attention to attend the Annual General Meeting will
have access to the meeting;
(ii) A shareholder shall only be entitled to attend and vote at
the Annual General Meeting whether in person or by proxy if such
shareholder has deposited documentary proof of his shareholding at
the Registration Date at the registered office of the Fund (see
above) at the latest at Friday 3 June 2011 before 4 p.m. in respect
of which the shareholder shall be issued a receipt. A receipt must
be presented to gain entry to the meeting;
(iii) Any shareholder shall be entitled to attend and vote in
person or by proxy at the above meeting;
(iv) A shareholder may appoint one or more proxies to attend
and, on a poll, vote instead of that shareholder. A proxy need not
be a shareholder of the Fund;
(v) All instruments of proxy must be deposited at the registered
office of the Fund at the latest at Friday 3 June 2011 before 4.00
p.m. The lodging of a form of proxy does not prevent a shareholder
from attending and voting if he wishes;
(vi) Persons who wish to attend the Annual General Meeting may
be requested to furnish proof of their identity by means of a valid
identity document.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR DKADDNBKDFQB
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