2011 Report - Fortress Mutual Fund Ltd

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Fortress Mutual Fund LimitedNotes to Consolidated Financial StatementsSeptember 30, 2011(expressed in Barbados dollars)2 Summary of significant accounting policies…continueda) Basis of preparation…continuedStandards, amendments and interpretations that are issued but not yet effective which may be relevantfor the Fund’s operations…continuedIFRS 9, ‘Financial instruments’, addresses the classification, measurement and recognition offinancial assets and financial liabilities. IFRS 9 was issued in November 2009 and October 2010. Itreplaces the parts of IAS 39 that relate to the classification and measurement of financial instruments.IFRS 9 requires financial assets to be classified into two measurement categories: those measured asat fair value and those measured at amortised cost. The determination is made at initial recognition.The classification depends on the entity’s business model for managing its financial instruments andthe contractual cash flow characteristics of the instrument. For financial liabilities, the standardretains most of the IAS 39 requirements. The main change is that, in cases where the fair value optionis taken for financial liabilities, the part of a fair value change due to an entity’s own credit risk isrecorded in other comprehensive income rather than the income statement, unless this creates anaccounting mismatch. The Fund is yet to assess IFRS 9’s full impact and intends to adopt IFRS 9 nolater than the accounting period beginning on or after 1 January 2013.IFRS 13, ‘Fair value measurement’, issued in May 2011. The standard explains how to measure fairvalue for financial reporting and introduces significantly enhanced disclosure about fair values. Itdoes not address or change the requirements on when fair values should be used. IFRS 13 has beenissued to provide a single source of guidance for all fair value measurements and to clarify thedefinition of fair value. The standard is not applicable until 1 January 2013, but is available for earlyadoption. The adoption is not expected to have a significant impact on the financial statements.IFRS 11, Joint Arrangements - IFRS 11 is a more realistic reflection of joint arrangements byfocusing on the rights and obligations of the arrangement rather than its legal form. There are twotypes of joint arrangement: joint operations and joint ventures. Joint operations arise where a jointoperator has rights to the assets and obligations relating to the arrangement and hence accounts for itsinterest in assets, liabilities, revenue and expenses. Joint ventures arise where the joint operator hasrights to net assets of the arrangements and hence equity account for its interest. Proportionalconsolidation of joint ventures is no longer allowed. The Fund is yet to assess IFRS 11's full impactand intends to adopt IFRS 11 no later than the accounting period beginning on or after 1 January2013.IFRS 12, ‘Disclosures of interests in other entities’ includes the disclosure requirements for all formsof interests in other entities, including joint arrangements, associates, special purpose vehicles andother off balance sheet vehicles. The Fund is yet to assess IFRS 12’s full impact and intends to adoptIFRS 12 no later than the accounting period beginning on or after 1 January 2013.(2)
Fortress Mutual Fund LimitedNotes to Consolidated Financial StatementsSeptember 30, 2011(expressed in Barbados dollars)2 Summary of significant accounting policies…continuedb) Foreign currency translationFunctional and presentation currencyItems included in the financial statement of the Fund and its subsidiary company are measured using thecurrency of the primary economic environment in which it operates (“the functional currency”). Theconsolidated financial statements are presented in Barbados dollars which is the Fund’s functional andpresentation currency.Transactions and balancesForeign currency transactions are translated into the functional currency using the exchange rate prevailingat the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of suchtransactions and from the translation at year end exchange rates of monetary assets and liabilitiesdenominated in foreign currencies are recognised in the statement of comprehensive income.Translation differences on non-monetary financial assets and liabilities such as securities held at fair valuethrough profit or loss are recognised in the statement of comprehensive income as part of the fair valuegain and loss.c) InvestmentsThe Fund classifies its financial assets into two categories:Financial assets at fair value through profit or lossLoans and receivablesManagement determines the appropriate classification of these assets at initial recognition.Financial assets at fair value through profit or lossi) ClassificationThe majority of the Fund’s investments have been classified as financial assets at fair value throughprofit or loss in accordance with International Accounting Standards 39 (IAS 39), FinancialInstruments: Recognition and Measurement.Financial assets in the category at fair value through profit or loss have been so designated bymanagement at inception since the assets form part of the managed portfolio whose performance isevaluated on a fair value basis in accordance with a documented investment strategy.(3)
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Page 3 and 4: FORTRESS MUTUAL FUND LIMITEDCaribbe
Page 5 and 6: Directors & AdministratorsDIRECTORS
Page 7: Portfolio PositioningThe Fund is po
Page 10 and 11: Directors’ ReportThe Fund’s net
Page 12 and 13: Directors’ Report Cont.Caribbean
Page 14 and 15: Directors’ Report Cont.The OAM fu
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2011 Report - Fortress Mutual Fund Ltd

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