Home' Trinidad and Tobago Guardian : October 27th 2013 Contents October 27, 2013 www.guardian.co.tt Sunday Guardian
The Paria Fund
30 June 2013
Notes to the Financial Statements (continued)
(Expressed in United States dollars)
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 receives a maximum fee of 2.50% per annum based on the average
net asset value of the Fund. For the year ended June 30, 2013 the Investment Manager accepted a fee
return of 1.24% (2012: 1.51%) on the average net asset value of the Fund. The management fee for
the year ended June 30, 2013 totaled US$2,059,188 (2012: US$2,448,974) of which US$259,930 was
payable at year end (2012: US$128,891).
Trustee, distribution and administration fees
The Trustee, Distributor and Administrator of the Fund receive a maximum fee of 0.25% per annum
based on the average net asset value of the Fund for each service. The fees charged and payable for year
ended June 30, 2013 are outlined in Notes 9 and 6 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 (to)/from related parties
Units held in the Fund
Distributions received during the year
9. Administrative Expenses
Other operating expenses
10. Distributions to Unitholders
Average rate of return without reinvestment option
Annualised effective yield with the reinvestment option
Distributions are declared as outlined in Note 1. Distributions of US$1,874,529 were declared to
unitholders for the year ended June 30, 2013 (2012: US$1,945,263).
11. Financial Risks
11.1 Financial risk factors
The Fund's activities expose it to a variety of financial risks: market risk (including price risk,
currency risk, and interest rate risk), credit risk and liquidity risk.
The Fund is also exposed to operational risks such as custody risk. Custody risk is the risk of loss of
securities held in custody occasioned by the insolvency or negligence of the custodian. Although
an appropriate legal framework is in place that eliminates the risk of loss of value of the securities
held by the custodian, in the event of its failure, the ability of the Fund to transfer the securities
might be temporarily impaired.
The Fund's overall risk management programme seeks to maximise the returns derived for the
level of risk to which the Fund is exposed and seeks to minimise potential adverse effects on the
Fund's financial performance.
All securities investments present a risk of loss of capital. The maximum loss of capital on equity
and debt securities is limited to the fair value of those positions.
4. Available For Sale Financial Assets
Cost Fair values
Cost Fair values
Government debt securities
Corporate debt securities
Government agency securities
138,615,190 142,190,557 123,246,641 128,332,415
Movement during the year:
Balance brought forward
Net fair value (loss)/gains recognised during the year
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
Total net assets
Less: fair value reserve
(Undistributed surplus)/retained deficit
Net assets attributable to unitholders
Number of units outstanding
Net value per unit based on net assets attributable to unitholders
Total net assets represents the unitholders equity in the Fund which would be due to the unitholders
in the event of the liquidation of the Fund. Net assets attributable to unitholders represents the value
of assets available to unitholders for daily redemptions in the normal course of business based on the
The fair value reserve and retained deficit represents the undistributed accumulated appreciation on
available for sale financial assets and accumulated operating losses of the Fund respectively and do
not form part of the amount available to unitholders for redemptions in the normal course of business.
The Trustee considers the fair value reserve to be distributable only when realised 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.
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