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The Paria Fund
30 June 2013
1. Description of the Fund
The following brief description of The Paria Fund (the "Fund") is provided for general information
purposes only. Reference should be made to the Trust Deed and Prospectus of the Fund for more
The Paria Fund is an open-ended mutual fund denominated in United States ("US") dollars and is
registered and regulated under the provisions of the Securities Industry Act, 1995 in Trinidad and Tobago.
An open-ended fund is one in which the number of units which may be issued in the fund is unlimited.
The Fund was established by the original trustee, First Citizens Bank Limited, under a Trust Deed dated
July 26th 2004, in order to provide investors with high current income through investment in a diversified
portfolio of high quality debt instruments. In July 2007, First Citizens Trustee Services Limited (the
"Trustee") was appointed Trustee to replace the original trustee who retired.
Subscriptions into the Fund are made by investors at a price per unit (the "subscription price") based
on the net asset value per unit of US$10 each. Units may be subscribed at an initial minimum value of
US$100 and in multiples of US$25 each thereafter.
The net profits of the Fund are calculated and accrued to the investor daily and distributed monthly.
Investors have the option to either receive a cash distribution, or to reinvest income distributions into
units at the prevailing subscription price as at the date of distribution.
Units are redeemed without charge at a price per unit (bid price) based on the net asset value per unit at
the date of receipt of the request for redemption. The Trustee seeks to maintain as far as is reasonably
possible a bid price of US$10 per unit. Units may be redeemed in cash up to a limit of US$50,000 or one
percent of the net asset value of the Fund, whichever is lower, during any sixty day period for any one
2. Summary of Significant Accounting Policies
The principal accounting policies applied in the preparation of these financial statements are set out
below. These policies have been consistently applied to all the years presented, unless otherwise stated.
2.1 Basis of preparation
The Fund's financial statements have been prepared in accordance with International Financial
Reporting Standards ("IFRS") and are presented in United States (US) dollars. The financial
statements have been prepared under the historical cost convention, as modified by the
revaluation of financial assets and financial liabilities.
(a) Use of estimates
The preparation of these financial statements in conformity with International Financial
Reporting Standards requires the use of estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of income and expenses during the
reporting period. Although these estimates are based on the Trustee's best knowledge of
current events and actions, actual results may differ from those estimates. The areas involving
a higher degree of judgment or complexity or areas where assumptions and estimates are
significant to the financial statements are disclosed in Note 3.
(b) New and amended standards adopted by the Fund
None of the new standards, interpretations and amendments, effective for the first time from
July 1, 2012, have had a material effect on the financial statements.
(c) New standards, amendments and interpretations issued but not effective for the financial year
beginning July 1, 2012 and not early adopted
The following new standards, interpretations and amendments, which have not been applied
in these financial statements, will or may have an effect on the Fund's future financial
IAS 32 'Financial Instruments: Presentation'(Amendments) clarify some of the requirements
for offsetting financial assets and financial liabilities in the statement of financial position.
In connection therewith, IFRS 7, 'Financial instruments: Disclosures' amendments were also
issued. These new IFRS 7 disclosures are intended to facilitate comparison between IFRS and
US GAAP preparers. The converged offsetting disclosures in IFRS 7 are to be retrospectively
applied, with an effective date of annual periods beginning on or after January 1, 2013.
Notes to the Financial Statements
(Expressed in United States dollars)
The IAS 32 changes are retrospectively applied, with an effective date of annual periods
beginning on or after January 1, 2014. Master netting agreements where the legal right of
offset is only enforceable on the occurrence of some future event, such as default of the
counterparty, continue not to meet the offsetting requirements. The disclosures focus on
quantitative information about recognised financial instruments that are offset in the statement
of financial position, as well as those recognised financial instruments that are subject to master
netting or similar arrangements irrespective of whether they are offset. The new amendments
are not expected to have any significant impact on the Fund's financial position or performance.
IFRS 9, 'Financial instruments' -- This new standard introduces new requirements for the
classification, measurement and recognition of financial assets and financial liabilities and
replaces parts of IAS 39. The standard is effective for annual periods beginning on after January
1, 2015 with early adoption permitted. IFRS 9 is required to be applied retrospectively. IFRS 9
uses business model and contractual cash flow characteristics to determine whether a financial
asset is measured at amortised cost or fair value, replacing the four category classification in
IAS 39. The determination is made at initial recognition. The approach is also based on how
an entity manages its financial instruments (its business model) and the contractual cash flow
characteristics of the financial assets. For financial liabilities, the standard retains most of the
IAS 39 requirements. The main change is that, in cases where the fair value option is taken
for financial liabilities, the part of a fair value change due to an entity's own credit risk is
recorded in other comprehensive income rather than the income statement, unless this creates
an accounting mismatch. The Fund is yet to assess IFRS 9's full impact and intends to adopt IFRS
9 no later than the accounting period beginning on or after January 1, 2015.
IFRS 13 'Fair Value Measurements' is effective prospectively for annual periods beginning
on or after January 1, 2013. Earlier application is permitted. IFRS 13 defines fair value, sets
out in a single IFRS a framework for measuring fair value and requires disclosures about fair
value measurements. The standard applies, except in some specified cases (e.g. share--based
payments) when other IFRSs require or permit fair value measurements. It does not introduce
any new requirements to measure an asset or a liability at fair value, change what is measured
at fair value in IFRSs or address how to present changes in fair value. Although IFRS 13 describes
some of the fair value measurements and disclosure requirements in a different way from
how they were expressed previously, there are a few changes to the requirements it replaces
(principally the requirement to use an exit price). Instead, IFRS 13 is intended to clarify the
measurement objective, harmonize the disclosure requirements and improve consistency in
Other standards, amendments and interpretations to existing standards in issue but not yet
effective are not considered to be relevant to the Fund and have not been disclosed.
(d) Standards and amendments to published standards early adopted by the Fund
The Fund did not early adopt any new, revised or amended standards.
2.2 Foreign currency
(a) Functional and presentational currency
The accounting records as well as the financial statements of the Fund are maintained in the
United States (US) dollars. US dollars is the functional and reporting currency of the Fund and
subscriptions and redemptions are performed in US dollars. The Trustees considers the US
dollar to be the currency that most faithfully represents the economic effects of the underlying
transactions, events and conditions.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange
rates prevailing at the dates of the transactions. Foreign currency assets and liabilities are
translated into the functional currency using the exchange rate prevailing at the statement of
financial position date.
Foreign exchange gains and losses arising from translation of financial assets and liabilities are
included in the statement of comprehensive income.
2.3 Available for sale financial assets
Available for sale financial assets are those which are intended to be held for an indefinite period
of time, which may be sold in response to needs for liquidity or changes in interest rates, exchange
rates or equity prices.
All purchases and sales of available for sale financial assets are recognised on the trade date
which is the date on which the Fund commits to purchase or sell the financial asset. Available
for sale financial assets are derecognised when the rights to receive cash flows from the
financial assets have expired or the Fund has transferred substantially all risks and rewards of
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