(Managed by Riyad Capital) Interim Condensed ... AWS
JAPAN STOCK FUND Open-ended Fund (Managed by Riyad Capital) Interim Condensed Financial Statements (Un-audited) For the six month period ended 30 June 2013 together with the Review Report to the Unitholders
JAPAN STOCK FUND Open-ended Fund (Managed by Riyad Capital) INTERIM CONDENSED BALANCE SHEET (Un-audited) As at 30 June 2013 (Amounts in JPY) Notes
2013
2012
2,208,981,386 2,208,981,386
1,459,617,491 1,459,617,491
178,438 178,438
121,659 121,659
2,208,802,948
1,459,495,832
2,175,545.30
2,028,873.05
1,015.29
719.36
ASSETS Held for trading investments Total Assets
7
LIABILITIES Accrued expenses Total Liabilities Net assets attributable to unitholders Units in issue (numbers)
8
Net assets attributable to each unit
The accompanying notes 1 to 13 form an integral part of these interim condensed financial statements.
1
JAPAN STOCK FUND Open-ended Fund (Managed by Riyad Capital) INTERIM CONDENSED STATEMENT OF INCOME (Un-audited) For the six month period ended 30 June 2013 (Amounts in JPY) Note
2013
2012
385,904,012
50,155,399
(7,428,413) (178,438) (7,606,851) 378,297,161
(2,266,382) (119,719) (2,386,101) 47,769,298
INCOME Net gain from held for trading investments
9
EXPENSES Management fees Other expenses Net income for the period
The accompanying notes 1 to 13 form an integral part of these interim condensed financial statements.
2
JAPAN STOCK FUND Open-ended Fund (Managed by Riyad Capital) INTERIM CONDENSED STATEMENT OF CASH FLOWS (Un-audited) For the six month period ended 30 June 2013 (Amounts in JPY) 2013
2012
378,297,161
47,769,298
(385,598,321) (7,301,160)
(50,311,595) (2,542,297)
Changes in operating assets and liabilities: Held for trading investments Accrued expenses Net cash (used in) / generated from operating activities
(132,683,703) (66,767) (140,051,630)
31,728,314 (132,785) 29,053,232
CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of units Payments against redemption of units Net cash generated from / (used in) financing activities
143,102,279 (3,050,649) 140,051,630
18,137,171 (47,190,403) (29,053,232)
---
---
CASH FLOWS FROM OPERATING ACTIVITIES Net income for the period Adjustments to reconcile net income to net cash (used in) / generated from operating activities: Unrealized gain on held for trading investments
Net increase / (decrease) in cash and cash equivalent Cash and cash equivalent at beginning / end of period
The accompanying notes 1 to 13 form an integral part of these interim condensed financial statements.
3
JAPAN STOCK FUND OPEN-ENDED FUND (Managed by Riyad Capital) INTERIM CONDENSED STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO UNITHOLDERS (Un-audited) For the six month period ended 30 June 2013 (Amounts in JPY)
Net assets attributable to unitholders at beginning of the period Net income for the period Changes from unit transactions: Issuance of units Redemption of units Net change from unit transactions Net assets attributable to unitholders at end of the period
2013
2012
1,690,454,157
1,440,779,766
378,297,161
47,769,298
143,102,279 (3,050,649) 140,051,630 2,208,802,948
18,137,171 (47,190,403) (29,053,232) 1,459,495,832
The accompanying notes 1 to 13 form an integral part of these interim condensed financial statements.
4
JAPAN STOCK FUND OPEN-ENDED FUND (Managed by Riyad Capital) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (Un-audited) For the six month period ended 30 June 2013 1.
THE FUND AND ITS ACTIVITIES The Japan Stock Fund (the “Fund”) is an Equity Fund Portfolio managed through an agreement between Riyad Capital (the “Fund Manager”) and the Fund investors (the “Unitholders”). The Fund invests in a diversified portfolio of Japanese equities that operates in different sectors of the Japanese economy. The fund is actively managed to take advantage of the changes in the investment channels that distinguish the Japanese market. The fund manager objective is to achieve capital growth. In dealing with the Unitholders, the Fund Manager considers the Fund as an independent accounting unit. Accordingly, the Fund Manager prepares separate financial statements for the Fund. Furthermore, Unitholders are considered to be shareholders and owners of the assets of the Fund and any income distribution is made in proportion of their respective ownership share to the total number of units. The management of the Fund is the responsibility of the Fund Manager. However, in accordance with the Fund’s Agreement, the Fund Manager can delegate or assign its duties to one or more of the financial institutions in the Kingdom of Saudi Arabia and overseas. SAMA’s approval for the establishment of the Fund was granted in its letter number 87/MA/25 dated Muharram 3, 1412 H (corresponding to 14 July 1991). The Fund commenced its operations on 19 May 1992. The interim results of the Fund may not be an indicator of its annual results.
2.
REGULATING AUTHORITY The Fund is governed by the Investment Fund Regulations (the “Regulations”) issued by Capital Market Authority (CMA) on 3 Dhul Hijja 1427H (corresponding to 24 December 2006) detailing requirements for all funds within the Kingdom of Saudi Arabia.
3.
SUBSCRIPTION / REDEMPTION The Fund is open for subscriptions / redemptions of units on Monday and Wednesday. The net assets value of the Fund is determined on Monday and Wednesday. The net assets value of the Fund for the purpose of purchase or sale of units shall be determined by dividing the net value of assets (fair value of fund assets minus fund liabilities) by the total number of outstanding fund units on the relevant valuation day.
4.
BASIS OF PRESENTATION
4.1
Statement of compliance These interim condensed financial statements have been prepared in accordance with the requirements of accounting standard on interim financial reporting issued by the Saudi Organization of Certified Public Accountants. These interim financial statements have been presented in condensed form and do not include all the information presented in the annual financial statements of the Fund; therefore, these interim condensed financial statements should be read in conjunction with the annual financial statements of the Fund for the year ended 31 December 2012. These interim condensed financial statements were approved by the Fund’s Board of Directors on 30 July 2013.
5
JAPAN STOCK FUND OPEN-ENDED FUND (Managed by Riyad Capital) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (Un-audited) For the six month period ended 30 June 2013 4.
BASIS OF PRESENTATION (Continued)
4.2
Basis of measurement These interim condensed financial statements have been prepared under the historical cost convention, except for the measurement of investments held for trading at fair value, using accrual basis of accounting and the going concern concept.
4.3
Functional and presentation currency These interim condensed financial statements are presented in Japanese Yen (JPY) which is the functional currency of the Fund. All financial information presented has been rounded to the nearest JPY.
4.4
Use of estimates and judgments In the ordinary course of business, the preparation of interim condensed financial statements requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expense. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in future periods affected.
5.
SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies used in the preparation of these interim condensed financial statements are consistent with those used and disclosed in the annual financial statements of the Fund for the year ended 31 December 2012.
6.
MANAGEMENT FEE, ADMINISTRATION AND OTHER CHARGES On each Valuation Day the Fund Manager charges the Fund management fee at the rate of 1.5 percent per annum of the Fund's net asset value. The Fund Manager also recovers from the Fund any other expenses incurred on behalf of the Fund such as audit and legal fees, board compensation and other similar charges. These charges are not expected to exceed in total 0.2 percent per annum of the Fund’s net asset value. In addition, on each Valuation Day the Fund Manager charges the Fund, custodian and administration fees at the rate of 0.1 percent per annum and 0.3 percent per annum respectively of the Fund’s net asset value.
6
JAPAN STOCK FUND OPEN-ENDED FUND (Managed by Riyad Capital) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (Un-audited) For the six month period ended 30 June 2013 (Amounts in JPY) 7.
HELD FOR TRADING INVESTMENTS To date the Fund has invested exclusively in the Japan Stock Fund (Foreign Fund) managed by Fidelity International (Foreign Fund Manager). The geographical breakdown of investments is as follows: % 2012 Country 2013 Japan Other
96.20 3.80 100
97.6 2.4 100
The held for trading investments is summarized as follows: Units in Fidelity Japanese Stock Fund Number of units Price per unit
16,088,720.95 137.30 2,208,981,386
15,005,834.18 97.27 1,459,617,491
7.1
The cost of the above held for trading investments portfolio amounted to JPY 1,823 million (2012: JPY 1,409 million).
8.
UNIT TRANSACTIONS Transactions in units for the period are summarized as follows: (In numbers)
9.
Units at the beginning of the period
2,044,688.80
2,071,422.90
Units issued Units redeemed Net change in units Units at the end of the period
134,176.66 (3,320.16) 130,856.50 2,175,545.30
22,363.21 (64,913.06) (42,549.85) 2,028,873.05
NET GAIN FROM HELD FOR TRADING INVESTMENTS Realised gain / (loss) on sale of held for trading investments Unrealised gain on revaluation of held for trading investments
7
305,691 385,598,321 385,904,012
(156,196) 50,311,595 50,155,399
JAPAN STOCK FUND OPEN-ENDED FUND (Managed by Riyad Capital) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (Un-audited) For the six month period ended 30 June 2013 (Amounts in JPY) 10.
TRANSACTIONS WITH RELATED PARTIES Related parties of the Fund comprise of Riyad Capital (being the Fund Manager), Riyad Bank (being the shareholder of Riyad Capital) and their affiliated entities. The significant related party transactions entered into by the Fund during the period and the balances resulting from such transactions are as follows: Related party
Riyad capital
Nature of transactions
Management fees
Amount of transaction during the period
Closing balance Receivable / (Payable)
2013
2012
2013
2012
(7,428,413)
(2,266,382)
--
(61,799)
(178,438)
(119,719)
(178,438)
(59,860)
Expenses incurred on behalf of the Fund
Certain units of the Fund are subscribed by following funds managed and administered by the Fund Manager. The details of which are as follows: 2012
2013 Name of Fund Al Shamekh Fund Al Shuja'a Fund Al Mokdam Fund Al Hadi Fund
11.
No. of units
Market Value
150,516.17 60,709.06 28,145.38 5,250.88 244,621.49
152,816,057 61,636,694 28,575,441 5,331,113 248,359,305
No. of units 148,549.51 53,632.75 27,992.10 1,928.43 232,102.79
Market Value 106,860,209 38,580,716 20,136,325 1,386,926 166,964,176
FINANCIAL INSTRUMENTS AND RISK MANAGEMENT POLICIES Credit risk Credit risk is the risk that one party to a financial instrument may fail to discharge an obligation and cause the other party to incur a financial loss. The Fund is exposed to credit risk for its investment portfolio. Since the Fund has to date invested exclusively in the Foreign Fund, it relies on the risk management policies of the Foreign Fund Manager to manage its credit risk.
8
JAPAN STOCK FUND OPEN-ENDED FUND (Managed by Riyad Capital) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (Un-audited) For the six month period ended 30 June 2013 11.
FINANCIAL INSTRUMENTS AND RISK MANAGEMENT POLICIES (Continued) Equity price risk Equity price risk is the risk that the value of financial instruments may fluctuate because of changes in market prices. The Fund is exposed to equity price risk arising from its investment in Foreign Fund as the underlying investments comprise of equity shares. The Fund Manager relies on the risk management policies of the Foreign Fund Manager to manage its equity price risk. Liquidity risk Liquidity risk is the risk that the Fund may encounter difficulty in arranging funds to meet commitments associated with its financial liabilities. The Fund’s terms and conditions provide for the subscriptions and redemptions of units throughout the week and it is, therefore, exposed to the liquidity risk of meeting unit-holder redemptions. The fund’s securities are considered to be readily realizable as investments are made in actively managed portfolio of the Foreign Fund and the units can easily be redeemed at any time. The fund manager monitors the liquidity requirements on a regular basis with a view to ensuring that sufficient funds are available to meet any commitments as they arise.
12.
FAIR VALUES OF FINANCIAL INSTRUMENTS Fair value is the amount for which an asset could be exchanged, or a liability settled between knowledgeable willing parties in an arm’s length transaction. Financial instruments comprise of financial asset and financial liability. The Fund’s financial asset consists of held for trading investments and financial liability consists of accrued expenses. Fair value is determined by reference to NAV computed by the Foreign Fund. The fair value of other financial instruments is not materially different from their carrying values.
13.
LAST VALUATION DAY The last valuation day of the period was 26 June 2013 (2012: 27 June 2012).
9
JAPAN STOCK FUND Open-ended Fund (Managed by Riyad Capital) INTERIM CONDENSED BALANCE SHEET (Un-audited) As at 30 June 2013 (Amounts in JPY) Notes
2013
2012
2,208,981,386 2,208,981,386
1,459,617,491 1,459,617,491
178,438 178,438
121,659 121,659
2,208,802,948
1,459,495,832
2,175,545.30
2,028,873.05
1,015.29
719.36
ASSETS Held for trading investments Total Assets
7
LIABILITIES Accrued expenses Total Liabilities Net assets attributable to unitholders Units in issue (numbers)
8
Net assets attributable to each unit
The accompanying notes 1 to 13 form an integral part of these interim condensed financial statements.
1
JAPAN STOCK FUND Open-ended Fund (Managed by Riyad Capital) INTERIM CONDENSED STATEMENT OF INCOME (Un-audited) For the six month period ended 30 June 2013 (Amounts in JPY) Note
2013
2012
385,904,012
50,155,399
(7,428,413) (178,438) (7,606,851) 378,297,161
(2,266,382) (119,719) (2,386,101) 47,769,298
INCOME Net gain from held for trading investments
9
EXPENSES Management fees Other expenses Net income for the period
The accompanying notes 1 to 13 form an integral part of these interim condensed financial statements.
2
JAPAN STOCK FUND Open-ended Fund (Managed by Riyad Capital) INTERIM CONDENSED STATEMENT OF CASH FLOWS (Un-audited) For the six month period ended 30 June 2013 (Amounts in JPY) 2013
2012
378,297,161
47,769,298
(385,598,321) (7,301,160)
(50,311,595) (2,542,297)
Changes in operating assets and liabilities: Held for trading investments Accrued expenses Net cash (used in) / generated from operating activities
(132,683,703) (66,767) (140,051,630)
31,728,314 (132,785) 29,053,232
CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of units Payments against redemption of units Net cash generated from / (used in) financing activities
143,102,279 (3,050,649) 140,051,630
18,137,171 (47,190,403) (29,053,232)
---
---
CASH FLOWS FROM OPERATING ACTIVITIES Net income for the period Adjustments to reconcile net income to net cash (used in) / generated from operating activities: Unrealized gain on held for trading investments
Net increase / (decrease) in cash and cash equivalent Cash and cash equivalent at beginning / end of period
The accompanying notes 1 to 13 form an integral part of these interim condensed financial statements.
3
JAPAN STOCK FUND OPEN-ENDED FUND (Managed by Riyad Capital) INTERIM CONDENSED STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO UNITHOLDERS (Un-audited) For the six month period ended 30 June 2013 (Amounts in JPY)
Net assets attributable to unitholders at beginning of the period Net income for the period Changes from unit transactions: Issuance of units Redemption of units Net change from unit transactions Net assets attributable to unitholders at end of the period
2013
2012
1,690,454,157
1,440,779,766
378,297,161
47,769,298
143,102,279 (3,050,649) 140,051,630 2,208,802,948
18,137,171 (47,190,403) (29,053,232) 1,459,495,832
The accompanying notes 1 to 13 form an integral part of these interim condensed financial statements.
4
JAPAN STOCK FUND OPEN-ENDED FUND (Managed by Riyad Capital) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (Un-audited) For the six month period ended 30 June 2013 1.
THE FUND AND ITS ACTIVITIES The Japan Stock Fund (the “Fund”) is an Equity Fund Portfolio managed through an agreement between Riyad Capital (the “Fund Manager”) and the Fund investors (the “Unitholders”). The Fund invests in a diversified portfolio of Japanese equities that operates in different sectors of the Japanese economy. The fund is actively managed to take advantage of the changes in the investment channels that distinguish the Japanese market. The fund manager objective is to achieve capital growth. In dealing with the Unitholders, the Fund Manager considers the Fund as an independent accounting unit. Accordingly, the Fund Manager prepares separate financial statements for the Fund. Furthermore, Unitholders are considered to be shareholders and owners of the assets of the Fund and any income distribution is made in proportion of their respective ownership share to the total number of units. The management of the Fund is the responsibility of the Fund Manager. However, in accordance with the Fund’s Agreement, the Fund Manager can delegate or assign its duties to one or more of the financial institutions in the Kingdom of Saudi Arabia and overseas. SAMA’s approval for the establishment of the Fund was granted in its letter number 87/MA/25 dated Muharram 3, 1412 H (corresponding to 14 July 1991). The Fund commenced its operations on 19 May 1992. The interim results of the Fund may not be an indicator of its annual results.
2.
REGULATING AUTHORITY The Fund is governed by the Investment Fund Regulations (the “Regulations”) issued by Capital Market Authority (CMA) on 3 Dhul Hijja 1427H (corresponding to 24 December 2006) detailing requirements for all funds within the Kingdom of Saudi Arabia.
3.
SUBSCRIPTION / REDEMPTION The Fund is open for subscriptions / redemptions of units on Monday and Wednesday. The net assets value of the Fund is determined on Monday and Wednesday. The net assets value of the Fund for the purpose of purchase or sale of units shall be determined by dividing the net value of assets (fair value of fund assets minus fund liabilities) by the total number of outstanding fund units on the relevant valuation day.
4.
BASIS OF PRESENTATION
4.1
Statement of compliance These interim condensed financial statements have been prepared in accordance with the requirements of accounting standard on interim financial reporting issued by the Saudi Organization of Certified Public Accountants. These interim financial statements have been presented in condensed form and do not include all the information presented in the annual financial statements of the Fund; therefore, these interim condensed financial statements should be read in conjunction with the annual financial statements of the Fund for the year ended 31 December 2012. These interim condensed financial statements were approved by the Fund’s Board of Directors on 30 July 2013.
5
JAPAN STOCK FUND OPEN-ENDED FUND (Managed by Riyad Capital) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (Un-audited) For the six month period ended 30 June 2013 4.
BASIS OF PRESENTATION (Continued)
4.2
Basis of measurement These interim condensed financial statements have been prepared under the historical cost convention, except for the measurement of investments held for trading at fair value, using accrual basis of accounting and the going concern concept.
4.3
Functional and presentation currency These interim condensed financial statements are presented in Japanese Yen (JPY) which is the functional currency of the Fund. All financial information presented has been rounded to the nearest JPY.
4.4
Use of estimates and judgments In the ordinary course of business, the preparation of interim condensed financial statements requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expense. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in future periods affected.
5.
SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies used in the preparation of these interim condensed financial statements are consistent with those used and disclosed in the annual financial statements of the Fund for the year ended 31 December 2012.
6.
MANAGEMENT FEE, ADMINISTRATION AND OTHER CHARGES On each Valuation Day the Fund Manager charges the Fund management fee at the rate of 1.5 percent per annum of the Fund's net asset value. The Fund Manager also recovers from the Fund any other expenses incurred on behalf of the Fund such as audit and legal fees, board compensation and other similar charges. These charges are not expected to exceed in total 0.2 percent per annum of the Fund’s net asset value. In addition, on each Valuation Day the Fund Manager charges the Fund, custodian and administration fees at the rate of 0.1 percent per annum and 0.3 percent per annum respectively of the Fund’s net asset value.
6
JAPAN STOCK FUND OPEN-ENDED FUND (Managed by Riyad Capital) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (Un-audited) For the six month period ended 30 June 2013 (Amounts in JPY) 7.
HELD FOR TRADING INVESTMENTS To date the Fund has invested exclusively in the Japan Stock Fund (Foreign Fund) managed by Fidelity International (Foreign Fund Manager). The geographical breakdown of investments is as follows: % 2012 Country 2013 Japan Other
96.20 3.80 100
97.6 2.4 100
The held for trading investments is summarized as follows: Units in Fidelity Japanese Stock Fund Number of units Price per unit
16,088,720.95 137.30 2,208,981,386
15,005,834.18 97.27 1,459,617,491
7.1
The cost of the above held for trading investments portfolio amounted to JPY 1,823 million (2012: JPY 1,409 million).
8.
UNIT TRANSACTIONS Transactions in units for the period are summarized as follows: (In numbers)
9.
Units at the beginning of the period
2,044,688.80
2,071,422.90
Units issued Units redeemed Net change in units Units at the end of the period
134,176.66 (3,320.16) 130,856.50 2,175,545.30
22,363.21 (64,913.06) (42,549.85) 2,028,873.05
NET GAIN FROM HELD FOR TRADING INVESTMENTS Realised gain / (loss) on sale of held for trading investments Unrealised gain on revaluation of held for trading investments
7
305,691 385,598,321 385,904,012
(156,196) 50,311,595 50,155,399
JAPAN STOCK FUND OPEN-ENDED FUND (Managed by Riyad Capital) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (Un-audited) For the six month period ended 30 June 2013 (Amounts in JPY) 10.
TRANSACTIONS WITH RELATED PARTIES Related parties of the Fund comprise of Riyad Capital (being the Fund Manager), Riyad Bank (being the shareholder of Riyad Capital) and their affiliated entities. The significant related party transactions entered into by the Fund during the period and the balances resulting from such transactions are as follows: Related party
Riyad capital
Nature of transactions
Management fees
Amount of transaction during the period
Closing balance Receivable / (Payable)
2013
2012
2013
2012
(7,428,413)
(2,266,382)
--
(61,799)
(178,438)
(119,719)
(178,438)
(59,860)
Expenses incurred on behalf of the Fund
Certain units of the Fund are subscribed by following funds managed and administered by the Fund Manager. The details of which are as follows: 2012
2013 Name of Fund Al Shamekh Fund Al Shuja'a Fund Al Mokdam Fund Al Hadi Fund
11.
No. of units
Market Value
150,516.17 60,709.06 28,145.38 5,250.88 244,621.49
152,816,057 61,636,694 28,575,441 5,331,113 248,359,305
No. of units 148,549.51 53,632.75 27,992.10 1,928.43 232,102.79
Market Value 106,860,209 38,580,716 20,136,325 1,386,926 166,964,176
FINANCIAL INSTRUMENTS AND RISK MANAGEMENT POLICIES Credit risk Credit risk is the risk that one party to a financial instrument may fail to discharge an obligation and cause the other party to incur a financial loss. The Fund is exposed to credit risk for its investment portfolio. Since the Fund has to date invested exclusively in the Foreign Fund, it relies on the risk management policies of the Foreign Fund Manager to manage its credit risk.
8
JAPAN STOCK FUND OPEN-ENDED FUND (Managed by Riyad Capital) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (Un-audited) For the six month period ended 30 June 2013 11.
FINANCIAL INSTRUMENTS AND RISK MANAGEMENT POLICIES (Continued) Equity price risk Equity price risk is the risk that the value of financial instruments may fluctuate because of changes in market prices. The Fund is exposed to equity price risk arising from its investment in Foreign Fund as the underlying investments comprise of equity shares. The Fund Manager relies on the risk management policies of the Foreign Fund Manager to manage its equity price risk. Liquidity risk Liquidity risk is the risk that the Fund may encounter difficulty in arranging funds to meet commitments associated with its financial liabilities. The Fund’s terms and conditions provide for the subscriptions and redemptions of units throughout the week and it is, therefore, exposed to the liquidity risk of meeting unit-holder redemptions. The fund’s securities are considered to be readily realizable as investments are made in actively managed portfolio of the Foreign Fund and the units can easily be redeemed at any time. The fund manager monitors the liquidity requirements on a regular basis with a view to ensuring that sufficient funds are available to meet any commitments as they arise.
12.
FAIR VALUES OF FINANCIAL INSTRUMENTS Fair value is the amount for which an asset could be exchanged, or a liability settled between knowledgeable willing parties in an arm’s length transaction. Financial instruments comprise of financial asset and financial liability. The Fund’s financial asset consists of held for trading investments and financial liability consists of accrued expenses. Fair value is determined by reference to NAV computed by the Foreign Fund. The fair value of other financial instruments is not materially different from their carrying values.
13.
LAST VALUATION DAY The last valuation day of the period was 26 June 2013 (2012: 27 June 2012).
9
