Significant Economic Policy Announcements in India

Introduction

In accordance with its obligations pursuant to Directive 2014/91/EU of the European Parliament and of the Council (“the UCITS V Directive”), Hamon Ireland Limited (the “Company”) is required to have remuneration policies and practices for those categories of staff, including senior management, risk takers, control functions, and any employees receiving total remuneration that takes them into the same remuneration bracket as senior management and risk takers whose professional activities have a material impact on the risk profiles of the Company (“identified staff”), that are consistent with and promote sound and effective risk management and do not encourage risk-taking which is inconsistent with the risk profiles, rules or instruments of incorporation of the Company. Hamon Ireland Limited is a UCITS Management Company with no employees, other than the Board of Directors. Therefore, the Directors are the only identified staff of the Company. This remuneration policy addresses the remuneration requirements of the UCITS V Directive as they apply to the Company only. The requirements of the UCITS V Directive which apply to the Investment Manager, Hamon Asset Management Limited (the “Investment Manager”) are not addressed in this policy, pending the release of ESMA Level 2 Guidance on the UCITS V Directive (the “Guidance”). This policy will be updated, as appropriate, once the Guidance becomes available.

Non-Executive Directors

The Non-Executive members of the Board of Directors receive a fixed fee only and do not receive performance-based remuneration therefore avoiding a potential conflict of interest. The basic fee of a Non-Executive Board member is set at a level that is on par with the rest of the market and reflects the qualifications and contribution required in view of the Company’s complexity, the extent of the responsibilities and the number of board meetings. No pension contributions are payable on Non-Executive Board members’ fees. The Company’s accounts are audited by PwC who will ensure that the necessary disclosures are made in relation to remuneration in the annual audited accounts.

Annual Review

This remuneration policy (together with compliance herewith) will be subject to annual review. These reviews will ensure that:

the overall remuneration system operates as intended;

the remuneration pay-outs are appropriate;

the risk profile, objectives and goals of the Company are adequately reflected; and

the policy reflects available guidelines and regulatory requirements.

The Board will take appropriate measures to address any deficiencies.

Circumstances where action is required

Following a review of adherence to the Company’s remuneration policies and procedures, action may be required if remuneration levels do not adhere to the principles set out therein or is at a level which is unacceptable or gives rise to conflicts of interest. The action to be taken may include possible revision of the level of remuneration payable to the individual(s) concerned. The responsibility for determining action to be taken and for taking action on behalf of the Company lies with the Board.

The week has been eventful, with major policy initiatives announced by the Indian Government headed by Prime Minister Dr. Manmohan Singh to promote growth and bring the Indian economy back to above 8% growth level. The NSE Nifty rallied by 4.1% over the week, while the currency strengthened by 1.6%. Some of the major announcements were:-

Diesel Fuel and cooking gas prices were raised. This helps reduce the subsidy burden of the government and reduces fiscal deficit. This is a major political reform, as it eases pressure on both interest rates and the currency.
Opening up the retail sector for foreign participation. This allows global retailers to set up front end retail stores in India. This measure is expected to increase supply chain efficiencies and help modernize the retail trade.
Increasing foreign ownership limit in airlines to 49%. This allows foreign airlines to set up base in India and will encourage modernization and consolidation.
Increasing foreign ownership in cable and satellite businesses to 74%. This will encourage global media players to come into India and speed up digitization.
Withholding tax reduction: Withholding tax on interest income received by foreigners has been reduced from 20% to 5% for Indian companies raising debt finance. This will encourage long term financing of infrastructure projects.

During the last few quarters, the Indian economy has experienced a slowdown due to the global economic crisis and tight monetary policy by the RBI. The government has finally shown political will and unfurled a host of reforms that will help the economy re-accelerate. This coupled with the recent reserve ratio cut by the Central Bank has the power to step up growth significantly. We expect the new found political determination to continue to dominate government policies and this will have positive implications for the ruling party in the 2014 elections. We expect Indian equities to strengthen from here and the next 18 months to have far reaching positive implications for the Indian economy. This week has been really positive, with Indian infrastructure and financials as the main beneficiaries. Our portfolio is significantly overweight India.

Disclaimer: The information provided within this document is for use by professional investors and should not be relied upon by retail investors. The document has been prepared by Hamon Investment Group for information purposes only and is correct to the best of Hamon’s knowledge. This document does not constitute a prospectus, an offer or an invitation to invest or a recommendation in relation to any investments. Portfolio holdings and investment ideas are subject to change at any time without notice. The information provided is for illustrative purposes only and should not be construed as a recommendation to purchase or sell any security. The value of overseas investments will be influenced by the rate of exchange. Certain sub-funds, if empowered by their investment objective and policy, may invest in emerging markets. It should be noted that these markets have additional risks associated with local custody and registration practices which may be less developed than the more mature markets. Investors should consider the investment objective, risks, charges and expenses of the fund carefully before investing. Please obtain a prospectus that contains this and other information about the fund, and read it carefully before investing. Except where specifically noted, performance is stated gross of management fees. The impact of management fees can be material. Generally, investment management fees are charged based upon the size of the portfolio. Some portfolios also include fees based on investment performance. Past performance is not necessarily a guide to future performance. Investments are subject to risk and there is no guaranty that these investment objectives will be achieved. The value of unit trusts, shares and income from them can fall as well as rise and investors may not get back the full amount originally invested. The Fund may invest in Emerging markets and derivative instrument and this involve higher risk and volatility. This document may not be used for the purpose of an offer or solicitation in any jurisdiction or in any circumstances in which such offer or solicitation is unlawful or not authorised. This document should not be copied, published or circulated without the permission of Hamon Investment Group. This document is issued by Hamon Investment Group and has not been reviewed by the Securities and Futures Commission in Hong Kong or other regula

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Hamon Investment Group

HAMON IRELAND LIMITED
REMUNERATION POLICY

Introduction

Non-Executive Directors

Annual Review

Circumstances where action is required