AAMIL Mauritius Fund Interim Management & Financial Report At 31 March 2016 (Unaudited)
TABLE OF CONTENTS PAGES MANAGEMENT AND ADMINISTRATION 1 MANAGER'S REPORT 2-4 STATEMENT OF FINANCIAL POSITION 5 STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 6 STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO UNIT HOLDERS 7 STATEMENT OF CASH FLOWS 8 NOTES TO THE FINANCIAL STATEMENTS 9-25
1 MANAGEMENT AND ADMINISTRATION MANAGER TRUSTEE CUSTODIAN ADMINISTRATOR & REGISTRAR AUDITOR AAMIL Asset Management Ltd Suites 340-355, Barkly Wharf Le Caudan Waterfront Port Louis Tel: +230 210 1000 Fax: + 230 210 2000 Website: www.aamil.com AAMIL TRUSTEES Ltd Suites 340-345 Barkly Wharf Le Caudan Waterfront Port Louis Tel: +230 210 1000 Fax: + 230 210 2000 The Mauritius Commercial Bank Ltd Raymond Lamusse Building P.O Box 52 Sir William Newton Street Port Louis Tel: +230 202 5448 Fax: +230 208 0550 AAMIL Asset Management Ltd Suites 340-355, Barkly Wharf Le Caudan Waterfront Port Louis Tel: +230 210 1000 Fax: + 230 210 2000 HLB Appavoo & Associates Appavoo Business Centre 29bis, Mere Barthelemy St, Port Louis Tel : +230 203 3900 Fax : +230 211 3152
MANAGER'S REPORT Portfolio Performance 2 The main highlights for the first quarter 2016 on the Mauritian Economy were: 1. Statistics Mauritius has maintained its forecasted figures of 3.9 % for economic growth for the year 2016. 2. Tourist arrivals for the first quarter 2016 has increased by 12.5% to 327,836 when compared to the same quarter last year. The opening up of air corridors is showing positive results which is expected to continue with more collaboration with other airlines. 3. For the first quarter of 2016, indices of the SEM closed in the red zone, with the Semdex and the Sem-10 declining by 0.8% to 1,797.16 points and 0.5% to 344.49 points respectively Series2 Series1 The Assets under Management (AUM) of the Fund stood at MUR 18,371,618 as at 31 March 2016 with 1,738,181.85 units in issue. The portfolio allocation was made up of 6.21% cash and 93.79% equity and the latest NAV as at that date was MUR 10.44 per unit. in Mln Rs Evolution of the Fortune of the Fund and of the NAV per share in Rs 20 11 19 10.9 19 10.8 19 19 10.7 19 10.6 18 10.5 18 10.4 18 10.3 18 18 10.2 17 10.1 Asset allocation and portfolio composition Asset Allocation is the appointment of the Fund's portfolio according to our investment's Committee strategy, risk tolerance and investment horizon set in order to minimize risks and maximize returns. Our asset allocation is reviewed periodically and adjusted to reflect changes in market conditions. The asset allocation of the AAMIL Mauritius Fund as at 31 March 2016 was: Assets Actual Asset Allocation Asset Allocation Mix as per prospectus Allocation as at Portfolio 31 March 2016 Valuation MUR Min (%) Max (%) Current (%) Listed Equities 13,547,526.44 73.74 10 90 DEM Market 3,683,925.00 20.05 0 20 Local Corporate debt - Listed 0.00 0.00 0 25 Fixed Income Securities 0.00 0.00 0 50 Cash at bank 1,140,166.80 6.21 10 70 Short Term Deposits 0.00 0.00 10 70 Bank of Mauritius Securities 0.00 0.00 0 50 Exchange Traded Funds 0.00 0.00 0 5 Total 18,371,618.24 100.00
3 MANAGER'S REPORT (CONT'D) The total net assets as at 31 March 2016 stood at Rs 18.15 million. The graphs below show how the assets of the Fund are invested. Asset Allocation Business Sector DEM Market 20% Cash 6% Leisure & Hotels 10.03% Investments 7.23% Textile 1.93% Cash 6.21% Property Development 10.67% Local (Listed equities) 74% Sugar 10.39% Commerce 6.63% Banks, Insurance & Other Finance 46.91% Top 10 Holdings Ciel Limited 3.68% IBL 3.96% ENL Land 7.23% Medine S.E 4.23% Cash 8.12% MCB Group Limited 25.09% Attitude Property 10.73% Medine S.E 3.75% SBM 21.46% Lux Island Resorts 4.32% Financial Highlights Ratios and Supplement Data As at 31 March 2016 2016 3 months ended 2015 3 months ended Net assets (Rs ' 000) 18,145 63,697 Number of Units outstanding 1,738,182 5,434,336 Management Expense Ratio (MER) 0.92% 0.97% Portfolio turnover rate 0.64% 0.72%
4 MANAGER'S REPORT (CONT'D) Top 5 Holdings 1) SMCB GROUP MCB, the oldest bank in Mauritius, was founded in 1838. It is widely regarded as the local reference and leader in the Banking sector. The Bank has a noteworthy presence in the Indian Ocean region. As at 31 March 2016, its market capitalization was Rs 49.01 billion representing 24.11% of the SEMDEX. Its dividend yield stood at 3.89 % and its price earnings ratio was 8.56. In 2016, the performance of the stock was -1.20%. 2) TSBMH SBM Holdings Ltd is the second largest company listed on the Stock Exchange of Mauritius. Building on its strong financials, the Group is expanding its revenue base and reinforcing internal capabilities.as at 31 March 2016, its market capitalization was Rs 20.65 billion representing 10.16% of the SEMDEX. Its dividend yield stood at 5.88 % and its price earnings ratio was 10.91. In 2016 the performance of the stock was -4.23%. 3) MATTITUDE PROPERTY AHL was previously known as Attitude Resorts Ltd. Since inception in 2008, AHL s goal has been to position itself as a midmarket player within the tourism sector. AHL started with two hotels: Coin de Mire Attitude and Blumarine Attitude which, combined, have 210 rooms. Through continuous expansion and innovation, Attitude has become a leading brand as well as a reference for the mid-market segment. As at 31 March 2016, its market capitalization was Rs 1.57 billion representing 3.49 % of the DEMEX. In 2016, the performance of the stock was -3.92%. 4) ENL LAND Listed on the Stock Exchange of Mauritius in 1989, ENL Land manages some 16,000 acres of land situated in the southern and central parts of Mauritius. ENL Land (previously The Savannah Sugar Estates Limited) amalgamated Mon Désert Alma Limited in 2009. Through its two subsidiaries, ENL Agri Limited and ENL Property Limited, ENL Land spearheads the groups initiatives in the agribusiness and property segments. As at 31 March 2016, its market capitalization was Rs 13.36 billion representing 6.57% of the SEMDEX. Its dividend yield stood at 2.92% and its price earnings ratio was 20.43. In 2016 the performance of the stock was - 1.85%. 5) LUX ISLAND RESORTS LTD Founded in 1987, LUX* Island Resorts (previously known as Naïade Resorts), is a collection of premium hotels in the Indian Ocean, with several hotel properties in Mauritius, the Maldives and Reunion Island. An affiliate member of GML, which is a major economic player in the Indian Ocean, and one of the leading Mauritian companies, LUX* is thoroughly and commendably performing its duties towards society and the environment. As at 31 March 2016, its market capitalization was Rs 7.97 billion representing 3.92 % of the SEMDEX. Its dividend yield stood at 1.72 % and its price earnings ratio was 19.81. In 2016 the performance of the stock was -2.10 %.
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME - QUARTER ENDED 31 MARCH 2016 Notes 2016 2015 Rs'000 Rs'000 INCOME Interest revenue 9 400 Dividend revenue 145 210 Financial assets at fair value through profit or loss - Net loss in fair value (232) (1,480) - Net realised gain on disposals 659 TOTAL INCOME (78) (211) EXPENSE Transaction costs - 206 Management fees 8 46 146 Administration fees 9 21 66 Custodian fees 10 9 29 Audit fees 43 43 Advisors fees 30 15 Other operating expenses 11 20 19 Entry and exit fees 12 4 82 TOTAL OPERATING EXPENSES 173 606 6 OPERATING LOSS (250) (817) Taxation 6 (6) LOSS FOR THE QUARTER (250) (823) Other comprehensive income - - TOTAL COMPREHENSIVE INCOME FOR THE QUARTER (250) (823) The notes on pages 10 to 25 form an integral part of these financial statements.
7 STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO UNIT HOLDERS - QUARTER ENDED 31 MARCH 2016 Unit Retained Total Notes capital earnings equity Rs'000 Rs'000 Rs'000 Balance at 1 January 2014 56,773 14,365 71,138 Units issued 8 0 8 Units redeemed (4,388) 0 (4,388) Total comprehensive income for the quarter - Profit for the quarter 0 492 492 Balance at 31 March 2014 52,392 14857 67,249 Balance at 1 January 2014 56,773 14,365 71,138 Units issued 20 0 20 Subscription money for new units 3,120 0 3,120 Units redeemed (13,955) 0 (13,955) Total comprehensive income for the year - Profit for the year 0 (41) (41) Balance at 31 December 2014 45,958 14,324 60,282 Balance at 1 January 2015 45,958 14,324 60,282 Units issued 7 13,385 0 13,385 Units redeemed 7 (50,473) 0 (50,473) Total comprehensive income for the quarter - Loss for the year 0 (4,388) (4388) Balance at 31 December 2015 8,870 9,936 18,806 Balance at 1 January 2016 8,870 9,936 18,806 Units issued 7 0 0 0 Units redeemed 7 (411) 0 (411) Total comprehensive income for the quarter - Loss for the quarter 0 (250) (250) Balance at 31 March 2016 8,459 9,686 18,145 A reconciliation of the number of units outstanding at the beginning and at the end of each reporting period is provided below. Issued, fully paid and outstanding units At January 1, 2014 6,006,040 Issue of units 1,665 Repurchase of units (1,185,637) At 31 December 2014 4,822,068 Issue of units 1,397,802 Repurchase of units (4,442,594) At 31 December 2015 1,777,276 Issue of units 0 Repurchase of units (39,096) At 31 March 2016 1,738,180 The notes on pages 10 to 25 form an integral part of these financial statements.
8 STATEMENT OF CASH FLOWS - QUARTER ENDED 31 MARCH 2016 2016 2015 Rs'000 Rs'000 Cash Flows from operating activities Proceeds from sale of financial investments designated at fair value through profit or loss 0 23,121 Payments for purchase of financial investments designated at fair value through profit or loss 0 (7,593) Short term deposits 0 (13,000) Transaction costs paid 0 (180) Interest received 9 337 Dividend received 145 267 Management fees paid (47) (147) Custodian and administration fees paid (31) (170) Advisors' fees paid (15) (55) Audit fees 0 0 Entry and exit fees (89) (75) Tax Refund 36 0 Net cash used in operating activities 7 2,505 Cash Flows from investing activities Refund of fixed deposit at maturity date 0 0 Net cash generated from investing activities 0 0 Cash Flows from financing activities Proceeds from issue of redeemable units 0 6,185 Payments on redemption of redeemable units (410) (4,938) Net cash used in financing activities (410) 1,247 Net (decrease)/increase in cash (403) 3,752 Cash at 1 January, 1,544 20,030 Cash at 31 March, 1,141 23,782 The notes on pages 10 to 25 form an integral part of these financial statements.
AAMIL MAURITIUS FUND 9 NOTES TO THE FINANCIAL STATEMENTS - QUARTER ENDED 31 MARCH 2016 1. General information AAMIL Mauritius Fund (the Fund ) is established by a Trust Deed dated on 26 November 2009, entered between AAMIL Asset Management Ltd ( The Manager ) and AAMIL Trustees Ltd ( The Trustee ). The Fund is an openended fund, domiciled in Mauritius and governed by the laws of the Republic of Mauritius. The address of its registered office is Suites 340-355, Barkly Wharf, Le Caudan Waterfront, Port Louis. The investment objective of the Fund is to provide investors both income and capital growth on a medium/long term basis, through a professionally managed portfolio consisting mainly in a mix of asset of the Domestic market. The Fund s units are redeemable at the holder s option. 2. Significant accounting policies The principal accounting policies adopted in the preparation of these financial statements are set out below. Where necessary, comparative figures have been amended to conform with change in presentation in the current year. These policies have been consistently applied since the beginning of the Fund, unless otherwise stated. 2.1 Basis of preparation The financial statements of AAMIL Mauritius Fund have been prepared in accordance with International Financial Reporting Standards (IFRS). The financial statements have been prepared under the historical cost convention, except that financial assets at fair value through profit or loss are stated at fair value. The financial statements are presented in Mauritian Rupees (Rs) and all values are rounded to the nearest thousand rupees (Rs 000) except where otherwise indicated. Standards, Amendments to published Standards and Interpretations effective in the reporting period IFRS 13, Fair value measurement, aims to improve consistency and reduce complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across IFRSs. The requirements do not extend the use of fair value accounting but provide guidance on how it should be applied where its use is already required or permitted by other standards within IFRSs.
10 2. Significant accounting policies (cont'd) 2.1 Basis of preparation (cont'd) Standards, Amendments to published Standards and Interpretations effective in the reporting period but not relevant to the Fund Amendment to IAS 1, Financial statement presentation IFRS 10, Consolidated financial statements IAS 27, Separate Financial Statements IFRS 11, Joint arrangements IAS 28, Investments in Associates and Joint Ventures IFRS 12, Disclosures of interests in other entities IAS 19, Employee benefits IFRIC 20, Stripping costs in the production phase of a surface mine Amendment to IFRS 7, Financial instruments: Disclosures Amendment to IFRS 1 (Government Loans) Annual Improvements to IFRSs 2009-2011 Cycle IFRS 1 (Amendment), First time adoption of IFRS IAS 1 (Amendment), Presentation of financial statements IAS 16 (Amendment), Property, plant and equipment IAS 32 (Amendment), Financial instruments: Presentation IAS 34 (Amendment), Interim financial reporting Standards, Amendments to published Standards and Interpretations issued but not yet effective Certain standards, amendments to published standards and interpretations have been issued that are mandatory for accounting periods beginning on or after 1 January 2014 or later periods, but which thefund has not early adopted. At the reporting date of these financial statements, the following were in issue but not yet effective: IFRS 9 Financial Instruments IAS 32 Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32) Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27) IFRIC 21: Levies Recoverable Amount Disclosures for Non- financial Assets (Amendments to IAS 36) Novation of Derivatives and Continuation of Hedge Accounting (Amendments to IAS 39) IFRS 9 Financial instruments (Hedge Accounting and amendments to IFRS 9, IFRS 7 and IAS 39) Defined Benefit Plans: Employee Contributions (Amendments to IAS 19) Annual Improvements to IFRSs 2010-2012 cycle Annual Improvements to IFRSs 2011-2013 cycle Where relevant, the Fund is still evaluating the effect of these Standards, amendments to published Standards and Interpretations issued but not yet effective, on the presentation of its financial statements.
11 2. Significant accounting policies (cont'd) 2.2 Significant accounting judgments and estimates The preparation of the Fund s financial statements requires the management to make judgments, estimates and assumptions that affect the amounts recognized in the financial statements. The Fund makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. (A) Fair value of financial instruments When the fair value of financial assets and liabilities recorded in the Statement of financial position cannot be derived from active markets, they are determined using a variety of valuation techniques that include the use of mathematic models, require a degree of judgment and variables factors. Changes in assumptions about these factors could affect the reported fair value of financial instruments. (B) Functional currency The Fund considers the Mauritian rupees as the currency that most faithfully represents the economic effect of the underlying transactions, events and conditions. The Mauritian rupee is the currency in which the Fund measures its performance and reports its results, as well as the currency in which it receives subscriptions from its Unitholders. 2.3 Summary of significant accounting policies The principal accounting policies applied in the preparation of these financial statements are set out below. (A) Financial instruments Classification The Fund classifies its financial assets into the categories in accordance with IFRS 9. The classification depends on the purpose for which the investments were acquired. Management determines the classification of its investment at initial recognition. The Fund classified its Fund Instruments as financial assets at fair value through profit or loss. Recognition Purchases and sales of financial assets are recognized on trade-date, the date on which the Fund commits to purchase or sell the asset.
12 2. Significant accounting policies (cont'd) 2.3 Summary of significant accounting policies (cont'd) (A) Financial instruments (cont'd) De-recognition Financial assets are derecognized when the rights to receive cash flows from the investments have expired or have been transferred and the Fund has transferred substantially all risks and rewards or ownership. Financial liabilities are derecognized when the obligation under the liability is discharged, cancelled or expires. Initial measurement Financial assets and liabilities at fair value through profit or loss are recorded in the Statement of financial position at fair value. All transaction costs for such instruments are recognized directly in profit or loss. Subsequent measurement Financial assets at fair value through profit or loss are subsequently carried at their fair values. Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are measured at cost. Subsequent changes in the fair value of those financial instruments are recorded in Net gain on financial assets at fair value through profit or loss. Interest earned and dividend revenue are recorded separately in Interest revenue and Dividend revenue. (B) Determination of fair value The fair value for financial instruments traded in active markets at the reporting date is based on their quoted prices. The fair values of quoted investments are based on current bid prices. (C) Impairment of financial assets The Fund assesses at the end of each reporting period whether there is objective evidence that a financial asset or a group of financial assets is impaired. An impairment loss is recognised for the amount by which the carrying amount of the asset exceeds its recoverable amount. The recoverable amount is the higher of an asset s fair value less costs to sell and value in use.
13 2. Significant accounting policies (cont'd) 2.3 Summary of significant accounting policies (cont'd) (D) Functional and presentation currency The Fund s functional and presentation is the Mauritian Rupees (Rs), which is the currency of the primary economic environment in which it operates. The Fund s performance is evaluated and its liquidity is managed in Mauritian Rupees. The Fund does not trade in foreign currency. (E) Due to and due from brokers Amounts due to brokers are payables for securities purchased (in a regular way transaction) that have been contracted for but not yet settled or delivered on the reporting date. Amounts due from brokers are receivables for securities sold (in a regular way transaction) that have been contracted for but not yet settled or delivered on the reporting date. (F) Trade Payables Trade payables are stated at fair value and subsequently measured at amortised cost using the effective interest method. (G) Trade Receivables Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the Fund will not be able to collect all amounts due according to the original terms of receivables. The amount of the provision is the difference between the asset s carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. The amount of provision is recognised in the statement of profit or loss and other comprehensive income. (H) Accrued expenses Accrued expenses are recognised initially at fair value and subsequently stated at amortised cost using the effective interest method (I) Cash and cash equivalents There is no cash equivalent as the Fund only deals in Mauritian Rupees. Cash in the Statement of financial position comprise cash on hand, deposits held at call with banks, other short term highly liquid investments with original maturities of 3 months or less.
14 2. Significant accounting policies (cont'd) 2.3 Summary of significant accounting policies (cont'd) (J) Units Units of the Fund are redeemable at any time at the unitholder s option and meet the definition of puttable instruments classified as equity instrument under the revised IAS 32. An unlimited number of units may be issued. Units are issued and redeemed based on the Fund s net asset value per Unit at the time of issue or redemption. The Fund s net asset per Unit is calculated by dividing the net assets attributable to unitholders with the total number of outstanding units. If the redeemable units cease to have all the features or meet all the conditions of IAS 32, the Fund will reclassify them as financial liabilities. (K) Dividend distribution Dividend distributions are at the discretion of the Fund. A dividend distribution to the Fund s unitholders is accounted for as a deduction from distributable reserve. A proposed dividend is recognised as a liability in the period in which it is approved. (L) Interest revenue Interest revenue earned are recognised on an accrual basis using the effective interest method. (M) Dividend revenue Dividend revenue is recognised when the Fund s right to receive the payment is established. Dividend revenues on listed securities are recorded on the ex-dividend date. (N) Transaction costs Transaction costs are costs incurred to acquire financial assets or liabilities at fair value through profit or loss. They include fees and commissions paid to agents, advisers, brokers and dealers. Transaction costs, when incurred, are immediately recognised in the statement of profit or loss and other comprehensive income. (O) Provisions Provisions are recognised when the Fund has a present obligation legal or constructive obligation as a result of past events, and it is probable that an outflow of resources that can be reliably estimated will be required to settle the obligation.
15 2. Significant accounting policies (cont'd) 2.3 Summary of significant accounting policies (cont'd) (P) Net gain or loss on financial assets at fair value through profit or loss This item includes changes in the fair value of financial assets designated upon initial recognition and excludes interest and dividend income. Unrealised gains and losses comprise changes in the fair value of financial instruments for the period and are recognised in Net gain in fair value in the statement of profit or loss and other comprehensive income. Realised gains and losses as at fair value through profit or loss are calculated using the average cost method. They represent the difference between an instrument s initial carrying amount and disposal amount. Realised gains are recognised in Net gain on disposals of assets in the statement of profit or loss and other comprehensive income. 3. Financial risk management 3.1 Financial risk factors The Fund s activities may expose it to a variety of financial risks: - Credit risk, - Market risk, - Liquidity risk A description of the significant risk factors is given below. (A) Credit risk Credit risk is the risk that the counterparty to a financial instrument will cause a financial loss for the Fund by failing to discharge an obligation. The Fund may mainly expose to credit risk from cash and Short-term Deposit. The Fund s cash is held by The Mauritius Commercial Bank Ltd. Credit risk relating to unsettled transactions in listed securities is considered to be minimal as the Fund only use approved brokers. By the way, all transactions in listed securities are settled or paid for only upon delivery.
16 3. Financial risk management (cont'd) 3.1 Financial risk factors (cont'd) (A) Credit risk (cont'd) The following table analyses the Fund s maximum exposure to credit risk: 2016 2015 Rs'000 Rs'000 Cash at bank 1,141 23,782 Fixed deposit - 13,000 Due from brokers - - Dividends receivable - - Interest receivable 3 128 Other receivables 38 19 Total credit risk exposure 1,182 36,929 (B) Market risk Market risk is the risk that the fair value or future cash flows of financial instruments will fluctuate due to changes in market variables such as interest rates, foreign exchange rates and equity prices. The maximum risk resulting from financial instruments equals their fair value. Interest rate risk Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows or the fair values of financial instruments. The Fund only holds non-interest bearing assets. The Fund holds cash and Short-term Deposit that expose the Fund to cash flow interest rate risk. At the reporting date, cash flow maturity from the Short-term Deposit is equal to seven days. Currency risk Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. The Fund does not invest in securities or other investments in foreign currencies and thus is not exposed to currency risk. Price risk Equity price risk is the risk of unfavourable changes in the fair values of equities. The equity price risk exposure arises from the Fund s investments in equity securities.
17 3. Financial risk management (cont'd) 3.1 Financial risk factors (cont'd) (i) Sensitivity analysis The following table analyses the Fund s exposure to price risk for a 5% increase/decrease in the fair value. 2016 2015 Rs'000 Rs'000 Increase in fair value 18,093 30,563 Decrease in fair value 16,369 27,653 The impact by a 5% increase/decrease of the fair value on the income and net assets will be of Rs. 861,550 (2015: Rs.1,455,000). Market price risk is managed through diversification of its investment portfolio, more specifically in variable industrial sector where the management believes the Fund can maximize the returns derived for the level of risk to which the Fund is exposed. 2016 2015 % % Banks, Insurance & Other Finance 46.9 9.2 Commerce 6.63 4.6 Investment 7.23 10.4 Textile 1.93 1.4 Sugar 10.39 15.4 Leisure & Hotels 10.03 3.2 Property Development 10.67 0 93.8 44.2 (C) Liquidity risk Liquidity risk is the risk that the Fund will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. Exposure arises because of the possibility that the Fund could be required to pay its liabilities or redeem its units earlier than expected. The Fund is exposed to cash redemptions of its redeemable units, as redemptions are at any time at the unit holder s option. Prudent liquidity risk management implies for the Fund to maintain sufficient cash and marketable securities in active market. The listed securities of the Fund are easily realisable as they are on the Stock Exchange of Mauritius. It is the Fund s policy that the Investment Manager monitors the Fund s liquidity position on a daily basis and that the Investment Committee reviews it on a quarterly basis.
18 3. Financial risk management (cont'd) 3.1 Financial risk factors (cont'd) (C) Liquidity risk (cont'd) Financial liabilities The maturity grouping is based on the remaining period from the end of the reporting period to the contractual maturity date. Balances due within 6 months equal their carrying amounts. Financial assets Analysis of equity at fair value through profit or loss into maturity grouping is based on the expected date on which these assets will be realised. 3.2 Fair value estimation The fair value of financial instruments traded in active markets is based on quoted market prices at the end of the reported period. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm s length basis. The quoted market price used for financial assets held by the Fund is the current bid price, included in Level 1. The Fund adopted the amendment to IFRS 7, effective 1 January 2009, requires the Fund to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The Fund only held financial assets that are traded in active market. 3.3 Capital risk management The capital of the Fund is represented by the net assets attributable to Unitholders. The amount of net asset attributable to Unitholders can change significantly on a daily basis as the Fund is subject to daily subscriptions and redemptions at the discretion of Unitholders. The Fund s objective when managing capital is to safeguard the Fund s ability to continue as a going concern in order to provide returns for Unitholders and benefits for other stakeholders and to maintain a strong capital base to support the development of the investment activities of the Fund. In order to maintain or adjust the capital structure, the Fund s policy is to perform the following: - Monitor the level of daily subscriptions and redemptions relative to the assets it expects to be able to redeem within 7 days and adjust the amount of distributions the Fund pays to Unitholders. - Redeem and issue new Units in accordance with the constitutional documents of the Fund, which require certain minimum subscriptions. The Trustee and Investment Manager monitor capital on the basis of the value of net assets attributable to Unitholders.
19 3. Financial risk management (cont'd) 3.1 Financial risk factors (cont'd) (C) Liquidity risk (cont'd) The following table summarises the maturity profile of the Fund s redeemable units and financial liabilities and also the Fund s financial assets. Less than 1 1 to 3 3 to 6 6 to 12 Up to 12 month months months months months Total Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Financial assets Cash at bank 1,141 - - - - 1,141 Cash in transit - - - - - - Fixed deposit - - - - - - Dividends receivable - - - - - - Interest receivable - 3 - - - 3 Financial Assets at Fair Value through Profit or Loss - - - - 17,231 17,231 Total Financial assets 1,141 3 - - 17,231 18,375 Financial liabilities Management fees payable - 16 - - - 16 Custodian fees payable - 3 - - - 3 Administration fees payable - 7 - - - 7 Other payables and accrued expenses - 19 - - 217 236 Total Financial liabilities - 45 - - 217 262 Redeemable Units 18,145 - - - - 18,145 Liquidity gap (17,004) (42) - - 17,014 (32)
20 4. Financial assets at fair value through profit or loss LOCAL MARKET 2016 2015 OFFICIAL DEM Total Total Rs'000 Rs'000 Rs'000 Rs'000 At 1 January, 13,076 4,388 17,464 25,682 Additions - - - 2,147 Impairment - - - - Disposals - - - (3,155) Increase/(Decrease) in fair value 472 (704) (232) (839) At 31 March 13,548 3,684 17,232 23,835 The fair value of listed and DEM quoted assets at fair value through Profit or Loss is based on the Stock Exchange at the close of business at 31 March 2016. LOCAL LISTED EQUITIES 2016 2016 2015 2015 % Rs'000 % Rs'000 Banks, Insurance and Other Finance 46.92 8,619 9.23 5,897 MCB Group Limited 25.65 4,712 5.89 3,763 State Bank of Mauritius Ltd 21.27 3,907 3.34 2,134 Commerce 6.63 1,218 4.60 2,935 Ireland Blyth Ltd 4.64 852 2.70 1,725 Innodis Ltd 1.99 366 1.90 1,210 Investments 3.62 665 1.47 935 Ciel Limited 3.62 665 1.47 935 Sugar 6.55 1,203 3.04 1,938 ENL Land Ltd 6.55 1,203 3.04 1,938 Leisure & Hotels 10.03 1,842 3.18 2,033 Sun Resorts Limited 2.09 384 1.82 1,163 Lux Island Resorts Ltd 4.38 804 1.36 870 New Mauritius Hotels Limited 3.56 654 - - Total Local Listed equities 73.75 13,547 21.52 13,738
21 4. Financial Assets at Fair Value through Profit or Loss (cont'd) DEVELOPMENT AND ENTERPRISE MARKET (DEM) 2016 2016 2015 2015 % Rs'000 % Rs'000 Sugar 3.84 705 2.39 1,525 The Medine Sugar Estate Co. Ltd 3.84 705 2.39 1,525 Textile 1.93 355 1 864 Ciel Textile Ltd 1.93 355 1.35 864 Investments 3.61 664 1.62 1,040 Phoenix Investment Company Ltd 1.59 293 0.59 380 United Investment 2.02 371 1.03 660 Property Development 10.67 1,960 2.51 1,696 Attitude Property Ltd 10.67 1,960 2.51 1,696.00 Total DEM equities 20.05 3,684 3.74 2,389 Total financial assets designated at fair value Rs'000 Rs'000 through profit or loss 17,231 16,127 5. Other payables and accrued expenses 2016 2015 Rs'000 Rs'000 Auditors' fees 217 154 Entry and exit fees 4 44 Advisors fees 15 20 236 218 The carrying amount approximates their fair value. 6. Taxation The tax on the Fund's profit before tax differs from the theoretical amount that would arise using the basic rate of the Fund as follows: 2016 2015 Rs'000 Rs'000 Profit before taxation (250) (817) Tax calculated at 15% (2015:15%) (38) (123) Expenses not deductible for tax purposes 53 259 Add loss on revaluation of fixed assets - Income not subject to tax (22) (130) Tax charge for the quarter (7) 6
22 7. Units 2016 2015 Units Rs'000 Units Rs'000 Movements in units during the quarter : Number of Units at 1 January 1,777,278 18,805 4,822,068 60,282 Units created - - 786,332 6,185 Units redeemed (39,096) (411) (174,064) (2,000) Total comprehensive income - (250) - (823) Number of Units at 31 March 1,738,182 18,144 5,434,336 63,644 Net asset value per Unit 10.44 11.71 2016 2015 Rs. Rs. Issue price 10.54 11.81 Repurchase price 10.34 11.61 The units are issued and redeemed at the Unit holder s option at prices based on the value of the Fund s net assets at the time of issue or redemption 8. Management fees Manager s fees payable to the Fund s Investment Manager, AAMIL Asset Management Ltd, is based on 1% of the average Net Asset Value of the Fund during the month. The fees are calculated on a weekly basis and are payable monthly in arrears. 9. Administration fees Registrar fees The registrar company, AAMIL Asset Management Ltd, is entitled to a registrar fee calculated on the average Net Asset Value of the Fund during the month, payable monthly in arrears. The annual fee is fixed at 0.25%. AAMIL Asset Management Ltd has a Delegation Agreement with AAMIL (Mauritius) Ltd. The main scope of the Delegation Agreement includes the delegation of its current administrative, registrar duties and Net Asset Value calculation. Trustee fees The Trustee of the Fund, AAMIL Trustees Ltd, is entitled to receive a trustee fee from the Fund, calculated on the average Net Asset Value during the month. The fee is fixed at 0.20% and payable monthly in arrears.
23 10. Custodian fees The custodian is entitled to receive a custodian fee from the Fund calculated on the average Net Asset Value of the Fund during the month, payable monthly in arrears. The annual fee is 0.20% to be paid to The Mauritius Commercial Bank Ltd. 11. Other operating expenses 2016 2015 Rs'000 Rs'000 FSC fees 19 18 Taxation fees - - Bank charges 1 1 Others - - 20 19 12. Entry fee and Exit fee In respect of the issue of units, an entry fee shall be paid by the unitholder to the Fund, represented by a percentage of the net asset value of the Fund. The percentage is determined from time to time by the Manager without exceeding 2%. The entry fee is set at 1% after the initial period. In respect of the repurchase of units, an exit fee shall be paid by the unitholder to the Fund, represented by a percentage of the net asset value of the Fund. The percentage is determined from time to time by the Manager without exceeding 2%. The exit fee is set at 1%.
24 13. Fair value of financial instruments The following table shows financial instruments recognised at fair value and analysed between the three-level of hierarchy (quoted prices in active markets - Level 1, other than quoted prices included in Level 1 - Level 2, and those that are not based on observable market data - Level 3 ) in accordance with IFRS7. At the reporting date, the Fund only holds financial instruments that are classified as Level 1. Financial Assets at Fair Value through Level 1 Level 2 Level 3 Total Profit or Loss Rs'000 Rs'000 Rs'000 Rs'000 Designated at Fair Value through Profit or Loss 2016 17,231 - - 17,231 2015 29,108 - - 29,108 14. Categories of financial assets and financial liabilities IFRS 7 requires the disclosure of the carrying amounts of each of the categories defined in IAS 39. The following table analyses the carrying amounts of the financial assets and liabilities by category: Financial assets 2016 2015 Rs'000 Rs'000 Financial assets at fair value through profit or loss Designated at fair value through profit or loss 17,231 29,108 Loans and receivables (see note 1) 41 147 Balance due from brokers - - Fixed deposit - 13,000 Cash in transit - - Cash and cash equivalents 1,141 23,782 18,413 66,037 Financial liabilities Financial liabilities measured at amortised cost (see note 2) 268 2,387 Note 1: Loans and receivables include: due from brokers, dividend and interest receivable, other receivables. Note 2: Financial liabilities measured at amortised cost include: due to brokers, fees payables, other payables and accrued expenses.
25 15. Related parties 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 making financial or operational decisions. 2016 2015 Rs'000 Rs'000 Manager's fees to : AAMIL Asset Management Ltd 46 146 Trustee's fees to : AAMIL Trustees Ltd 9 29 Registrar's fees to : AAMIL Asset Management Ltd 12 37 67 212