2011 Report - Fortress Mutual Fund Ltd

Fortress Mutual Fund LimitedNotes to Consolidated Financial StatementsSeptember 30, 2011(expressed in Barbados dollars)4 Financial risk management…continuedCredit risk…continuedAll transactions in listed securities are settled/paid for upon delivery using approved brokers. The risk ofdefault is considered minimal since delivery of securities sold is only made once the broker has deliveredpayment. On a purchase, payment is made once the securities have been received by the broker. The trade willfail if either party fails to meet their obligation. The Fund’s exposure to credit risk related to due to brokers isset out below in the following table:Due from brokers2011$2010$Neither past due or impaired 3,386,919 6,089,5303,386,919 6,089,530The Fund’s exposure to individual counterparty credit risk on its cash and cash equivalents exceeding 2.5% oftotal the Fund’s net assets is set out below:2011$2010$Cash and cash equivalentsFirstCaribbean International Bank (unquoted) 36,547,822 19,289,233Liquidity riskLiquidity risk is the risk that the Fund may not be able to generate sufficient cash resources to settle itsobligations in full as they fall due or can only do so on terms that are materially disadvantageous.The Fund is exposed to weekly cash redemptions of Class “A” Redeemable Mutual Fund Shares (note 2 l). Ittherefore invests the majority of its assets in investments that are traded in an active market and can be readilydisposed of. The table below analyses the Fund’s financial liabilities into relevant maturity groupings based onthe remaining period at the statement of financial position date to the contractual maturity date.(12)