Home' Trinidad and Tobago Guardian : October 27th 2014 Contents B14
The Paria Fund
30 June, 2014
Distribution income to Trinidad and Tobago residents are not subject to taxation. Tax on distribution
income is withheld on distributions paid to non-resident unit holders at the rates applicable to the
country in which the unit holders reside.
Under the provisions of the Corporation Tax Act of Trinidad and Tobago, the Fund is exempt from
taxation on its profits; therefore, no provisions have been made in these financial statements for
The Fund is subject to foreign withholding tax on certain interest, dividends and capital gains
Provisions are recognized when the Fund has a present legal or constructive obligation as a result of past
events, it is more likely than not that an outflow of resources will be required to settle the obligation and
the amount has been reliably estimated.
Provisions are measured at the present value of the expenditures expected to be required to settle the
obligation using a pre-tax rate that reflects current market assessments of the time value of money and the
risks specific to the obligation.
2.14 Distributions to unit holders
Distributions to unit holders are recognized in the statement of changes in equity when they are
appropriately authorized as described in Note 1.
3. Critical Accounting Estimates and Judgments
3.1 Critical accounting estimates
Management makes estimates and judgments concerning the future. The resulting accounting estimates
will, by definition, seldom equal the related actual results. The estimates and judgments that have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the
next financial year are outlined below.
Fair value of available for sale financial assets not quoted in an active market
The fair value of such assets not quoted in an active market may be determined by the Fund using reputable
pricing sources (such as pricing agencies) or indicative prices from bond/debt market makers. Broker quotes
as obtained from the pricing sources may be indicative and not executable or binding. The Fund would
exercise judgment and estimates on the quantity and quality of pricing sources used. Where no market data
is available, the Fund may price positions using its own models, which are usually based on valuation
methods and techniques generally recognized as standard within the industry. The inputs into these models
are primarily earning multiples and discounted cash flows. The models used to determine fair values are
validated and periodically reviewed by experienced personnel at First Citizens Asset Management Limited
(the "Investment Manager"). The models used for debt securities are based on net present value of
estimated future cash flows, adjusted as appropriate for liquidity, credit and market risk factors.
Models use observable data, to the extent practicable. However, areas such as credit risk (both own and
counterparty), volatilities and correlations require management to make estimates. Changes in assumptions
about these factors could affect the reported fair value of financial instruments.
The determination of what constitutes 'observable' requires significant judgment by the Fund. The Fund
considers observable data to be market data that is readily available, regularly distributed or updated,
reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the
4. Available For Sale Financial Assets
Cost Fair values
Government debt securities
Corporate debt securities
Government agency securities
153,330,669 160,221,013 138,615,190 142,190,557
Movement during the year:
Balance brought forward
Net realised (loss)/gain
Net change in unrealised gains/(losses)
Balance carried forward
5. Cash and Cash Equivalents
Bank current account
Short term deposits
6. Accrued Expenses and Other Payables
Management fees payable
Trustee fees payable
Distributor fees payable
Operating expenses accrued
7. Net Assets
Less: fair value reserve
Net assets attributable to unit holders
Number of units outstanding
Net value per unit based on net assets attributable to unit holders
Total equity represents the unit holders equity in the Fund which would be realized by the unit holders in the event
of the liquidation of the Fund. Net assets attributable to unit holders represents the value of assets available to unit
holders for daily redemptions in the normal course of business based on the Trustee's discretion.
The fair value reserve and undistributed surplus represents the undistributed accumulated appreciation on
available for sale financial assets and accumulated operating gains of the Fund respectively and do not form part
of the amount available to unit holders for redemptions in the normal course of business. The Trustee considers
the fair value reserve to be distributable only when realized and based on the discretional powers granted to it in
the Fund's Trust Deed, does not consider the fair value reserve to be available for immediate distribution.
8. Related Party Transactions
Parties are considered to be related if one party has the ability to control the other party or exercise significant
influence over the other party in making financial or operational decisions.
The Investment Manager of the Fund is entitled to a maximum investment manager fee of 2.50% per annum
based on the average net asset value of the Fund. For the year ended June 30, 2014 the Investment Manager
accepted a fee return of 1.40% (2013: 1.24%) on the average net asset value of the Fund. The management fee
for the year ended June 30, 2014 totaled US$2,678,173 (2013: US$2,059,188) of which US$267,411 (2013:
US$259,930) was payable at the year end and included in accrued expenses and other payables.
Trustee, Distribution and Administration Fees
The Trustee, Distributor and Administrator of the Fund is entitled to maximum fees of 0.25% per annum based on
the average net asset value of the Fund for each service. The fees payable and charged for year ended June 30,
2014 are outlined in Notes 6 and 9 respectively.
Certain related parties acts as the bankers and partial investment custodian for the Fund with a business
relationship similar to that of non-related parties. The balance outstanding at the year-end along with other related
party transactions are detailed below.
Available for sale financial assets
Cash and cash equivalents
Due from/(to) related parties
Value of units held in the Fund
Distributions received during the year
The balance due from/(to) related parties is interest free and does not have a stated repayment date.
9. Administrative Expenses
Other operating expenses
(Expressed in United States dollars)
2. Summary of significant accounting policies (continued)
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