2011 Report - Fortress Mutual Fund Ltd

Fortress Mutual Fund LimitedNotes to Consolidated Financial StatementsSeptember 30, 2011(expressed in Barbados dollars)4 Financial risk management …continuedMarket risk …continuedThe risk management policies employed by the Fund to manage these risks are discussed below.The objective of the Fund is to achieve long-term capital appreciation through investment in domestic, regionaland international markets.i) Price riskThe Fund is exposed to market price risk arising primarily from the changes in equity prices. To managethis risk the Fund holds a diversified portfolio of investments in accordance with its investment policy. Asummary of the overall statement of financial position market exposures at September 30, 2011 isdisclosed in note 5.At September 30, 2011 as disclosed in note 5, 25% (2010- 25%) of financial assets at fair value throughprofit or loss, comprise of investments in other funds that have been fair valued in accordance with thepolicies set out in note 2c. Since the shares of the other funds are not publicly traded, redemption can onlybe made by the Fund on the redemption dates and subject to the required notice periods specified in theoffering documents of each of the other funds. The rights of the Fund to request redemption of itsinvestments in other funds may vary in frequency from weekly to monthly redemptions. As a result, thecarrying values of the other funds may not be indicative of the prevailing values ultimately realised onredemption. In addition, the Fund may be materially affected by the actions of other investors who haveinvested in other funds in which the Fund has invested.SensitivityThe effects of a change in equity prices of the Fund’s financial assets at fair value through profit or loss areset out below.Financial assets at fair value through profit or loss:CarryingValue2011$Effectivechange atSeptember2011Impact onincome$Listed on Caribbean stock exchange and markets 136,814,882 8% 10,945,191Listed on US stock exchanges and markets 44,283,820 10% 4,428,382Listed on other exchanges and markets 8,815,234 10% 881,523Unlisted securities 72,164,077 10% 7,216,408262,078,013 23,471,504(8)