ANNUAL REPORT AND FINANCIAL STATEMENTSzenithassetmanagement.com.ng/docs/insight/14515604281450268003... · ANNUAL REPORT AND FINANCIAL STATEMENTS ... Mr. Kayode Akinkugbe ... Manager

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FOR THE YEAR ENDED 31 MARCH 2015

ANNUAL REPORT AND FINANCIAL STATEMENTS

FBN MONEY MARKET FUND

FBN Money Market Fund | Annual Report 2015 2

FBN Capital Asset Management - RC 978831A Subsidiary of FBN Capital, An FBN Holdings Company.

INDEX

Corporate Information ..............................................................................................................................................................................................3

Trustee’s report .........................................................................................................................................................................................................4

Fund Manager’s report .............................................................................................................................................................................................6

Certification of accounts by the Directors of the Fund Manager..............................................................................................................10

Report of the Independent auditors ....................................................................................................................................................................11

Statement of comprehensive income ................................................................................................................................................................. 13

Statement of financial position ............................................................................................................................................................................14

Statement of changes in equity ........................................................................................................................................................................... 15

Statement of cashflows .........................................................................................................................................................................................16

Notes to the financial statements ...................................................................................................................................................................... 17

Value added statement ..........................................................................................................................................................................................30



CORPORATE INFORMATION

FUND MANAGER FBN Capital Asset Management Limited18, Keffi StreetOff Awolowo RoadIkoyi S.W. LagosTel: 234 (1) 2798300, 234 (1) 2707180 – 9 DIRECTORS OF THE FUND MANAGER

Directors of the Fund Manager who served during the period under review were: Mr. Kayode Akinkugbe Mr. Michael Oyebola Mrs. Funke Ladimeji REGISTRARS

First Registrars Limited Plot 2, Abebe Village Road Iganmu, Lagos, Nigeria CUSTODIAN

Citibank Nigeria Limited 27 Kofo Abayomi Street Victoria Island, Lagos, Nigeria Tel: 234 (1) 2798400, 234 (1) 4638400 TRUSTEE

Investment One Financial Services Limited 37, Karimu Kotun Street Victoria Island, Lagos, Nigeria Tel: 234 (1) 4488888

BANKER

Citibank Nigeria LimitedCharles S. Sankey House27 Kofo Abayomi StreetVictoria Island, Lagos Nigeria AUDITORS

PricewaterhouseCoopers (Chartered Accountants)252E Muri Okunola Street,Victoria Island, Lagos, Nigeria

First Bank of Nigeria Ltd.Samuel Asabia House 35 Marina, Lagos, Nigeria.



The Trustee presents its report on the FBN Money Market Fund (the “Fund”), for the financial year ended March 31, 2015.

CONSTITUTION OF THE FUND

The Fund, an open-ended Unit Trust Scheme, is constituted under a Trust Deed dated 14th June 2012 (“the Trust Deed”) and is registered with the Securities and Exchange Commission (“the Commission”) as a Collective Investment Scheme. INVESTMENT OBJECTIVE OF THE FUND The main objective of the Fund is to provide Unit-Holders with competitive income, liquidity and security of asset through investment in a select portfolio of quality money market securities and short-term government securities with tenors of less than one (1) year.

OPERATING RESULTS

Highlights of the Fund’s operating results for the year ended 31 March, 2015 are as follows:

DIRECTORS

The Directors of the Fund Manager who served on the board of the Fund Manager during the period under review are:

Mr. Kayode Akinkugbe Mr. Michael Oyebola; and Mrs. Funke Ladimeji

DIRECTORS’ INTEREST IN THE UNITS OF THE FUND

The Directors of the Fund Manager who held beneficial interests in the units of the Fund as at 31st March 2015 are:

TRUSTEE’S REPORT

RESPONSIBILITIES OF THE FUND MANAGER:

The Investments and Securities Act, 2007 requires the Fund Manager to keep proper books of account and prepare annual financial statements which gives a true and fair view of the state of affairs of the Fund during the period covered by the financial statements. In preparing these financial statements, the Fund manager: - Selected suitable accounting policies and applied them consistently;- Made judgments and estimates that have been reasonable and prudent;

2015’000

2014’000

Gross returns on investments 3,166,377 845,416

Distribution to unitholders (2,870,288) (739,500)

Fund's running costs (271,120) (105,916)

Name of Director Units Held

Kayode Akinkugbe 93,027

Michael Oyebola 119,151

Funke Ladimeji 1,225



- Ensured that the applicable accounting standards were followed, and in the case of any material departures, that it was fully disclosed and explained within the financial statements;

- Prepared the financial statements on a going concern basis; since it was appropriate to assume that the Fund shall continue to exist.

The Fund manager is responsible for keeping proper accounting records, which disclose with reasonable accuracy, the financial position of the Fund, and ensure that the financial statements comply with the applicable regulations.

The Fund manager is also responsible for maintaining adequate financial resources to meet its commitments and to manage the risks to which the Fund is exposed.

RESPONSIBILITIES OF THE TRUSTEES

The responsibilities of the Trustee as provided by Securities and Exchange Commission Rules and Regulations made pursuant to the Investments and Securities Act, 2007 are as stated below: - Monitoring the activities of the fund manager and the custodian on behalf of and in the interest of the unit holders; - Ensuring that the custodian takes into custody all of the scheme’s assets and holds it in trust for the unit holders in accordance with

the Trust Deed and the Custodian Agreement;- Monitoring the register of unitholders;- Ascertaining the Fund Manager’s compliance with the applicable regulations;- Ascertaining that the monthly and other periodic returns/reports relating to the fund are sent by the Fund Manager to the Commission;- Taking all steps and executing all documents which are necessary to secure acquisitions or disposals properly made by the Fund

Manager in accordance with the Trust Deed and Custodian Agreement; - Exercising any right of voting conferred on it as the registered holder of any investment and/ or forward to the Fund Manager within a

reasonable time all notices of meetings, reports, circulars, proxy solicitations and any other document of a like nature for necessary action;- Ensuring that fees and expenses of the fund are within the prescribed limits; and - Acting at all times in the interest and for the benefit of unit holders of the Fund INCOME DISTRIBUTION

During the financial year ended 31st March 2015, the Fund Manager made distributions from the net income of the Fund on a quarterly basis to the Unit Holders in line with the provisions of the Trust Deed.

COMPLIANCE

The Fund Manager during the financial year ended 31st March 2015, complied with the Trust Deed, the rules and regulations of the Commission and applicable laws.

CHARITABLE DONATIONS The Fund did not make any charitable donations during the financial year.

AUDITORS

The Auditors, Messrs Pricewaterhousecoopers have indicated their willingness to continue in office in accordance with Section 357(2) of the Companies and Allied Matter Act.

By order of the Trustee

INVESTMENT ONE FINANCIAL SERVICES LIMITED



FUND MANAGER’S REPORT We are pleased to present the Report and Accounts for the FBN Money Market Fund (the “Fund”) for the year ended 31 March 2015.

FUND DESCRIPTION AND OBJECTIVE

The FBN Money Market Fund is a Securities and Exchange Commission (SEC) authorized open-ended Mutual Fund. The Fund was launched on 21 June, 2012 and began investment activities on 24 September, 2012. The primary objective of the Fund is to maximize current income in line with prevailing Nigerian money market rates whilst aiming to preserve capital and to maintain a high degree of liquidity by investing in a broadly diversified portfolio of short-term, high quality money market securities. The Fund is required to maintain a stable NAV of N100.00 as well as a weighted average maturity of 91 days when investing in instruments. DISCRETE ANNUAL PERFORMANCE

^ The Fund manager is required to maintain a stable price per unit of N100.00 *Annualized yield is stated net of fees and expenses

INVESTOR PROFILE

The Fund’s risk profile is classified as “low”. It is suitable for investors: • Seeking an alternative to cash deposits for their medium term or temporary cash investments• require minimal income• seeking a diversification to an existing equity portfolio.

OVERVIEW OF THE OPERATING ENVIRONMENT

2014 has been a humbling year for many financial market participants. In the first three quarters of the year, the consensus trades – short rates, long European and Japanese equities versus the US, sharp USD appreciation – fell by the way side one by one. Over the past couple of months, the world has started to make sense again, with two popular themes – the Japan “macro” trade and the USD rally – finally playing out. But even here, the reasons are surprising. Oil has dropped off a cliff, growth has disappointed outside the US, and deflationary fears have resurfaced. Global central banks have reacted by, once again, turning more accommodative. Despite ECB President Mario Draghi’s statements that he is prepared to do “whatever it takes”, it is the Bank of Japan which has surprised investors with a new round of aggressive easing. The US Federal Reserve’s (Fed) Asset Purchase Programme came to a close in October, 2014. On the domestic side, we have witnessed direct spill-overs into our economy from the negative shocks mentioned above. These spill-overs include exchange rate pressures, decline in government revenue, capital reversals, dwindling accretion to foreign reserves and envisaged election crisis. MONEY MARKET DEVELOPMENTS

In the first quarter of 2014 money market rates remained relatively stable. Q1 developments were influenced by the liquidity conditions in the system. Monetary Policy remained, largely, restrictive in the first quarter of 2014. The Monetary Policy Rate (MPR) was maintained at 12.0 per cent, while the Cash Reserve Ratio (CRR) on both public and private sector deposits were increased from 50.0 and 12.0 per cent to 75.0 and 15.0 per cent, respectively. The Liquidity Ratio (L/R) and Net Open Position were also retained at their preceding levels. The increase in CRR on public and private sector deposits led to a slight increase in the inter-bank rate in the first quarter of 2014. The Monetary Policy Committee meeting held in the second quarter of 2014, left the Monetary Policy Rate (MPR) and Cash Reserve Ratio (CRR) on both public and private sector deposits unchanged at 12.0, 75.0 and 15.0 per cent, respectively. The Liquidity Ratio

FBN Money Market Fund 31-Mar-14 30-Jun-14 30-Sep-14 31-Dec-14 31-Mar-15

Price per unit ( ) ^ 100.00 100.00 100.00 100.00 100.00

Annualised yield (%)* 11.86 11.00 10.83 11.87 13.53



(L/R) and Net Open Position were also retained at their preceding quarter’s levels. Patronage at the Bank’s deposit facility window was consistently high, while request for the Standing Lending Facility (SLF) was minimal. Provisional data indicated that the value of money market assets outstanding at the end of the second quarter of 2014 stood at N7,144.49 billion, showing an increase of 3.4 per cent, compared with the increase of 1.1 per cent at the end of the preceding quarter. The development was attributed largely, to the 5.8 per cent increase in FGN Bonds outstanding

The periodic injection of funds from Statutory Revenue Allocation (SRA), Value Added Tax (VAT), Non-oil Revenue and Subsidy Reinvestment & Empowerment Program (Sure-P), as well as payments of Joint Venture Cash (JVC) call to oil partners, net inflows through Cash Reserve Requirements (CRR) and repayment of matured federal government securities were the source of liquidity flows during the third quarter of 2014. Open Market Operations (OMO) was deployed to moderate the level of liquidity in the system. Patronage of the Federal Government securities was quite remarkable during the quarter. Money market rates reflected liquiditys condition in the system. Inter-bank call and Open Buy Back (OBB) rates were low and stable for most of the period except for slight changes in the movement of rates triggered by liquidity shortages in the period when NNPC withdrawals impacted the system. Financial market indicators became volatile during the fourth quarter of 2014, partly attributed to the policy measures introduced during the quarter. These measures included; the restriction on the sale of foreign exchange at the official window to certain transactions which were subsequently required to be funded at the inter-bank foreign exchange market, the daily maximum limit of N7.5 billion placed on the standing deposit facility (SDF) and the increase in the Cash Reserve Requirements (CRR) on private sector funds, which resulted in shortage of liquidity and triggered a spike in the pricing of inter-bank transactions. Open Market Operations (OMO) was deployed to manage the level of liquidity in the system. Patronage of the Federal Government securities was low during the quarter. Money market rates reflected the liquidity condition in the system, following the implementation of the upward review in CRR on private sector funds from 15.0 per cent to 20.0 per cent.

MARKET OUTLOOK FOR 2015

First quarter of 2015 was characterised with more local speculative buyers who preferred to take short positions so as to take advantage of any further spike in yield due to anxiety regarding the 2015 general elections, also we experienced a rise in interest rates as yields inched up by an average of 300bps as a result of sell-off by foreign investors. In the quarter, the Monetary Policy Committee (MPC) met twice in January and March 2015, leaving all the monetary policy tools unchanged with particular reference to the Monetary Policy Rate (MPR) which was held constant at 13.00%. The decision to leave all parameters unchanged was influenced by the committee’s view that the decisions made at the last MPC for 2014 (November 17-18 2014) are still adequate to ensure stability in the economic and financial system. However, towards the end of the quarter rates moderated due to excess liquidity from Federation Account Allocation Committee (“FAAC”) inflow as well as Treasury and Open Market Operation (“OMO”) Bill maturities. Hence, the 91, 182 and 364 day Treasury Bills which opened the quarter at 11.249% p.a. 14.480% p.a. and 15.990% closed at 10.69% p.a., 14.50% p.a. and 14.85% p.a. respectively.

Headline inflation remains at the targeted level of single digit set by Central Bank and Nigeria Bureau of Statistics, the CPI closed at 8.5% year on year in March 2015 from 8.4% recorded in February 2015, the 0.9% month on month increase in March 2015 (up from 0.7% month on month in February 2015 and 0.81% month on month in January 2015) was the highest print in over two years. We suspect the risks to inflation are still skewed to the upside as the full pass-through from a weakened NGN materializes.

We expect yields of government securities to trend south owing to the excess liquidity that will be released to the market from OMO maturities (N1tr), FGN Bond maturities (N500mn) and FAAC disbursement (250mn) in the early part of the second quarter of 2015. However, there should be an upward reversal in yields for the later part of 2015 as we do not expect to see same level of liquidity received in April. We envisage yields will hold at early teens 13.0%-15.0% for 2015.

FUND OUTLOOK AND STRATEGY

The outlook on interest rates in 2015 remains mixed. Money market rates are likely to remain at moderate levels in 2015. The Apex bank will continue with its tightening measure to curtail liquidity levels and ensures Naira stability. In spite of the mixed outlook on interest rates, the Fund’s strategy is to continue to seek the highest value in available short-term instruments while maintaining the Funds objectives, over the period the asset allocation may therefore tilt towards the highest yielding instruments.



FUND PERFORMANCE

The Money Market Fund closed the financial year ended 31 March 2015 with a total NAV of N23.45bn versus N20.90bn on 31 March 2014. The Fund grew by 12.20% over the 12 months period; the growth can be attributed to the appeal of the Fund among investors and the performance of the Fund. During the period under review the Fund returned an average of 11.34% as against 10.56% recorded in the preceding year, while absolute yield of the Fund for the period ending 31 March 2015 closed at 13.53% compared to 11.86% reported in 31 March 2014. The positive performance of the Fund was due to the Fund manager’s ability to take advantage of periods of high yields on money market instruments. The Fund underwent another rating exercise and retained its rating of Aa(f).

Date Price per unit ^ Annualised yield *

30-Nov-12 100.00 10.52%

31-Dec-12 100.00 10.59%

31-Jan-13 100.00 9.77%

28-Feb-13 100.00 8.44%

31-Mar-13 100.00 9.21%

30-Apr-13 100.00 9.32%

31-May-13 100.00 9.69%

30-Jun-13 100.00 10.30%

31-Jul-13 100.00 10.63%

31-Aug-13 100.00 11.08%

30-Sep-13 100.00 10.61%

31-Oct-13 100.00 11.54%

30-Nov-13 100.00 11.69%

31-Dec-13 100.00 11.78%

31-Jan-14 100.00 11.27%

28-Feb-14 100.00 11.54%

31-Mar-14 100.00 11.86%

30-Apr-14 100.00 11.77%

31-May-14 100.00 11.19%

30-Jun-14 100.00 11.00%

31-Jul-14 100.00 10.64%

31-Aug-14 100.00 10.59%

30-Sep-14 100.00 10.83%

31-Oct-14 100.00 10.49%

30-Nov-14 100.00 10.59%

31-Dec-14 100.00 11.87%

31-Jan-15 100.00 12.37%

28-Feb-15 100.00 12.50%

31-Mar-15 100.00 13.53%

^ Price is stated net of fees and expenses. The Fund manager is required to maintain a stable price per unit of N100.00 *Annualized yield is stated net of fees and expenses



STATEMENT OF FUND MANAGER’S RESPONSIBILITIES

This statement, which should be read in conjunction with the Auditor’s report, is made with a view to setting out for Unit holders, the responsibilities of the Fund Manager with respect to the financial statements.

The Fund Manager is responsible for the preparation of the financial statements, which give a true and fair view of the state of affairs of the Fund and the results of its operations for the year.

The responsibilities include ensuring that:

i. the appropriate internal controls are established both to safeguard the assets of the Fund and to prevent and detect fraud and other irregularities;

ii. the Fund keeps accounting records which disclose the reasonable accuracy of the financial position of the Fund and which ensure that the financial statements comply with the requirements of the Investments and Securities Act and relevant Securities and Exchange Commission circulars;

iii. the Fund has used appropriate accounting policies, consistently applied and supported by reasonable and prudent judgments and estimates, and that all applicable accounting standards have been followed and;

iv. the financial statements are prepared on a going concern basis unless it is presumed that the Fund will not continue in business

Chairman, FBN Capital Asset Management Limited MD/CEO, FBN Capital Asset Management Limited



CERTIFICATION OF ACCOUNTS BY DIRECTORS OF THE FUND MANAGER

We hereby certify the accounts and that neither the Fund Manager nor any other person acting on its behalf has:

i. transferred units to another person for sale, resale or subsequent transfer to the Fund Manager for sale or resale; or

ii. acquired or disposed of investments for account of the Trust otherwise than through a recognised Stock Exchange or Over The Counter market except where such investments consist of money market instruments or cash deposits; or

iii. disposed of units to another person for a price lower than the current bid price; or

iv. acquired units for a price higher than the current offered price.

Kayode Akinkugbe Michael Oyebola



REPORT OF THE INDEPENDENT AUDITOR

REPORT ON THE FINANCIAL STATEMENTS

We have audited the accompanying financial statements of FBN Money Market Fund (the “Fund”). These financial statements comprise the statement of financial position as at 31 March 2015 and the statements of comprehensive income, changes in equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes.

FUND MANAGER’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

The Fund Manager is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards and with the requirements of the Companies and Allied Matters Act and for such internal control, as the Fund Manager determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether dne to fraud or error.

AUDITOR’S RESPONSIBILITY

Our responsibility is to express an independent opinion on the financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform our audit to obtain reasonable assurance that the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

OPINION

In our opinion the accompanying financial statements give a true and fair view of the state of the Fund’s financial affairs at 31 March 2015 and of its financial performance and its cash flows for the year then ended in accordance with International Financial Repmting Standards and the requirements of the Companies and Allied Matters Act, the Financial Reporting Council of Nigeria Act and the Investment and Securities Act.



REPORT ON OTHER LEGAL REQUIREMENTS

The Companies and Allied Matters Act requires that in carrying out our audit we consider and report to you on the following matters. We confirm that:

i) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

ii) the Fund has kept proper books of account, so far as appears from our examination of those books;

iii) the Fund’s balance sheet and profit and loss account are in agreement with the books of account;

For: PricewaterhouseCoopers Chartered Accountants Lagos, Nigeria

Engagement partner: Patrick Obianwa FRC/2013/ICAN/00000000880

19 JUNE 2015



STATEMENT OF COMPREHENSIVE INCOME

Income Statement Note12 months ended 31 March 2015

18 months ended 31 March 2014

Interest income 5 3,131,269 841,772

Net gains on investment securities 6 35,108 3,644

Total income 3,166,377 845,416

Expenses

Management fee 8 191,830 49,358

Trustees' fees 8 7,694 3,318

Custodian fees 8 25,646 5,638

Registrars' fees 8 1,085 642

Performance incentive fees 8 36,600 4,984

Ratings fee 8 1,575 1,575

Other administrative expenses 9 6,690 40,401

Total expenses 271,120 105,916

Operating profit 2,895,257 739,500

Withholding taxes (24,969) -

Profit after tax 2,870,288 739,500

Other comprehensive income:

Items that may be subsequently reclassified to profit or loss:

Fair value gain/(loss) on available for sale financial assets 11 17,422 (16,230)

Other comprehensive income for the period 17,422 (16,230)

Total comprehensive income attributable to unitholders 2,887,710 723,270

The notes to the accounts form an integral part of these financial statements



STATEMENT OF FINANCIAL POSITIONNote 31 March 2015 31 March 2014

'000 ‘000

ASSETS

Cash and cash equivalents 10 2,477,647 1,152,601

Financial assets: available for sale 11 21,677,384 20,103,691

TOTAL ASSETS 24,155,031 21,256,292

LIABILITIES

Accruals and other liabilities 12 704,129 354,948

TOTAL LIABILITY 704,129 354,948

NET ASSETS ATTRIBUTABLE TO UNITHOLDERS 23,450,902 20,901,344

REPRESENTED BY:

Share capital 23,449,710 20,917,574

Fair value reserve 1,192 (16,230)

Net assets attributable to unitholders 13 23,450,902 20,901,344

Mr Kayode Akinkugbe(Chairman of the Fund Manager)FRC/ 2013/ IODN/ 00000003063 Mr Michael Oyebola(Managing Director of the Fund Manager)FRC/ 2013/ IODN/ 00000002179

Mr Fasiu Adenekan (Ag. Chief Financial Officer of the Fund manager)FRC/2013/ICAN/00000002443

Approved by the Board of Directors of the Fund Manager on 15 June 2015

The notes to the accounts form an integral part of these financial statements



STATEMENT OF CHANGES IN EQUITY

Share capital Fair value reserve Retained earnings Total

'000 '000 '000 '000

Balance at 1 April 2014 20,917,574 (16,230) - 20,901,344

Profit for the year - - 2,870,288 2,870,288

Comprehensive income or (loss) - 17,422 17,422

Distributions to unitholders (Note 7) - - (2,870,288) (2,870,288)

Subscriptions during the period 49,587,282 - - 49,587,282

Redemptions during the period (47,055,146) - - (47,055,146)

As at 31 March 2015 23,449,710 1,192 - 23,450,902

Share capital Fair value reserve Retained earnings Total

'000 '000 '000 '000

Balance at 24 September 2012 (18 months) - - - -

Profit for the year - - 739,500 739,500

Comprehensive income or (loss) - (16,230) - (16,230)

Distributions to unitholders (Note 7) - - (739,500) (739,500)

Subscriptions during the period 28,066,880 - - 28,066,880

Redemptions during the period (7,149,306) - - (7,149,306)

As at 31 March 2014 20,917,574 (16,230) - 20,901,344



STATEMENT OF CASHFLOWS

Note 31 March 2015 31 March 2014

'000 ‘000

Cash flows from operating activities

Reconciliation of profit before income tax to cash generated from operations

Profit before income tax 2,895,257 739,500

Adjustment for non-cash items:

Interest income 5 (3,131,269) (841,772)

Cash used in operations (236,012) (102,272)

Increase in other liabilities 349,181 354,948

WHT paid (24,969) -

Interest received 5 3,131,269 841,772

Purchase of investments (58,050,377) (20,119,920)

Disposal of Investment 56,494,105 -

Long term placement (212,650) -

Net cash generated from operating activities 1,450,548 (19,025,473)

Cash flows from financing activities

Capital contribution 13 49,587,282 28,066,880

Redemptions by unitholders 13 (47,055,146) (7,149,306)

Distributions paid to unitholders 7 (2,870,288) (739,500)

Net cash (used in)/generated from financing activities (338,152) 20,178,074

Net increase in cash and cash equivalents 1,112,396 1,152,601

Cash and cash equivalents at start of year 1,152,601 -

Cash and cash equivalents at end of year 10 2,264,997 1,152,601



NOTES TO THE FINANCIAL STATEMENTS

1 General information FBN Money Market Fund (herein known as ‘the Fund’) was launched by FBN Capital Asset management Limited and registered with the Securities and Exchange Commission (“SEC”) on 21 June 2012, with operations commencing on 24 September 2012. FBN Money Market Fund is managed by FBN Capital Asset Management Limited. 2 Summary of significant accounting policies The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

2.1 Basis of preparationThe financial statements for the year ended 31 March 2015 have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the IASB. Additional information required by national regulations is included where appropriate.

The financial statements have been prepared in accordance with the going concern principle under the historical cost convention, as modified by the valuation of available for sale financial assets. The financial statements are presented in Nigerian currency (Naira) and rounded to the nearest thousand.

The financial statements were authorized for issue by the directors on 15 June 2015.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires the Fund manager to exercise its judgement in the process of applying the Fund’s accounting policies. Changes in assumptions may have a significant impact on the financial statements in the period the assumptions changed. The Fund manager believes that the underlying assumptions are appropriate and that the Fund’s financial statements therefore present the financial position and results fairly. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in Note 4.

(a) Standards and amendments to existing standards effective 1 April 2014Amendment to IAS 32, ‘Financial instruments: Presentation’ on offsetting financial assets and financial liabilities. This amendment clarifies that the right of set-off must not be contingent on a future event. It must also be legally enforceable for all counterparties in the normal course of business, as well as in the event of default, insolvency or bankruptcy. The amendment also considers settlement mechanisms. The amendment did not have a significant effect on the Fund’s financial statements.

Amendments to IAS 36, ‘Impairment of assets’, on the recoverable amount disclosures for non-financial assets. This amendment removed certain disclosures of the recoverable amount of CGUs which had been included in IAS 36 by the issue of IFRS 13. The amendment did not have a significant effect on the Fund’s financial statements.

Amendment to IAS 39, ‘Financial instruments: Recognition and measurement’ on the novation of derivatives and the continuation of hedge accounting. This amendment considers legislative changes to ‘over-the-counter’ derivatives and the establishment of central counterparties. Under IAS 39 novation of derivatives to central counterparties would result in discontinuance of hedge accounting. The amendment provides relief from discontinuing hedge accounting when novation of a hedging instrument meets specified criteria. The amendment did not have a significant effect on the Fund’s financial statements.

IFRIC 21, ‘Levies’, sets out the accounting for an obligation to pay a levy if that liability is within the scope of IAS 37 ‘Provisions’. The interpretation addresses what the obligating event is that gives rise to pay a levy and when a liability should be recognised. The Fund is not currently subjected to significant levies so the impact on the Fund is not material.

There are no standards, interpretations or amendments to existing standards that are effective for the first time for the financial year beginning 1 April 2014 that would be expected to have a material impact on the Fund.



(b) New standards, amendments and interpretations effective after 1 April 2014 and have not been early adopted A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 1 April 2014, and have not been applied in preparing these financial statements. None of these are expected to have a significant effect on the financial statements of the Fund except the following set out below:

IFRS 9 Financial Instruments: Classification and Measurement (effective 1 January 2018): The standard contains two primary measurement categories of financial assets: amortised cost and fair value. A financial asset would be measured at amortised cost if it is held within a business model whose objective is to hold assets in order to collect contractual cash flows, and the asset’s contractual terms give rise on specific dates to cash flows that are solely payments of principal and interest on the principal outstanding. All other financial assets would be measured at fair value. The standard eliminates the existing IAS 39 categories of held to maturity, available-for-sale and loans and receivables. For an investment in equity instrument which is not held for trading, the standard permits an irrevocable election, on initial recognition, on an individual share-by-share basis, to present all fair value changes from the investment in other comprehensive income. No amount recognized in other comprehensive income would ever be reclassified to profit or loss at a later date.

The Fund manager is yet to assess the full impact of this standard in the Fund’s classification and measurement of its financial instruments.

2.2 Foreign currency translation(a) Functional and presentation currencyThe Fund’s investors are mainly from Nigeria, with the subscriptions and redemptions of the redeemable shares denominated in Naira. The performance of the Fund is measured and reported to the investors in Naira. The Board of Directors considers the Nigerian Naira as the currency that most faithfully represents the economic effects of the underlying transactions, events and conditions. The financial statements are presented in Naira, which is the Fund’s functional and presentation currency.

Items included in the financial statements of the Fund are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The financial statements are presented in Naira (N), which is the Fund’s functional currency.

(b) Transactions and balancesForeign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign currency assets and liabilities are translated into the functional currency using the exchange rate prevailing at the statement of financial position date.

Foreign exchange gains and losses arising from translation are included in the statement of comprehensive income.

2.3 Financial assets(a) ClassificationThe Fund allocates financial assets to the following IAS 39 categories: (i) loans and receivables and (ii) available-for-sale financial assets. Management determines the classification of its financial instruments at initial recognition.

(i) loans and receivablesLoans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period. These are classified as non-current assets.

(ii) Available for sale financial assetsAvailable-for-sale investments are financial assets that are intended to be held for an indefinite period of time, which may be sold in response to needs for liquidity or changes in interest rates, exchange rates or that are not classified as loans and receivables, held-to-maturity investments or financial assets at fair value through profit or loss.



The Fund’s policy requires the Investment Manager to evaluate the information about these financial assets and liabilities on a fair value basis together with other related financial information.

(b) Recognition, derecognition and measurementThe Fund uses settlement date accounting for regular purchases and sales of financial assets. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognised at fair value, and transaction costs are expensed in the income statement.

Financial assets are derecognised when the contractual rights to receive the cash flows from these assets have ceased to exist or the assets have been transferred and substantially all the risks and rewards of ownership of the assets are also transferred (that is, if substantially all the risks and rewards have not been transferred, the entity tests control to ensure that continuing involvement on the basis of any retained powers of control does not prevent derecognition).

Subsequent to initial recognition, available for sale financial assets are measured at fair value. Gains and losses arising from changes in the fair value are recognised in the statement of comprehensive income, except for impairment losses and foreign exchange gains and losses, until the financial asset is derecognised. If an available-for-sale financial asset is determined to be impaired, the cumulative gain or loss previously recognised in the statement of comprehensive income is recognised in the income statement. Interest is calculated using the effective interest method, and foreign currency gains and losses on monetary assets classified as available for sale are recognised in the income statement.

(c) Fair value estimationFair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of financial assets and liabilities traded in active markets (such as publicly traded derivatives and trading securities) are based on quoted market prices at the close of trading on the reporting date. The Fund adopted IFRS 13, ‘Fair value measurement ‘, from 1 January 2013; it changed its fair valuation input to utilise the last traded market price for both financial assets and financial liabilities where the last traded price falls within the bid-ask spread. In circumstances where the last traded price is not within the bid-ask spread, the Fund manager will determine the point within the bid-ask spread that is most representative of fair value.

The fair value of financial assets and liabilities that are not traded in an active market (for example, over-the counter derivatives) is determined using valuation techniques. The Fund uses a variety of methods and makes assumptions that are based on market conditions existing at each reporting date. Valuation techniques used include the use of comparable recent arm’s length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis, option pricing models and other valuation techniques commonly used by market participants making the maxium use of market inputs and relying as little as possible on entity-specific inputs.

(d) Transfers between levels of the fair value hierarchy Transfers between levels of the fair value hierarchy are deemed to have occurred at the beginning of the reporting period.

2.4 Cash and cash equivalentsCash and cash equivalents includes cash in hand, deposits held at call with banks and other short-term placements with banks and other financial institution, treasury bills in an active market with original maturities of three months or less.

2.5 Accrued expensesAccrued expenses represents payables to third parties related to the Fund, such as auditors, trustees, rating agencies, custodian and Fund manager fees. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.

2.6 RevenueInterest incomeInterest income is recognised on a time-proportionate basis using the effective interest method. It includes interest income from cash and cash equivalents and on available for sale financial assets.



2.7 Unitholders’ interest(a) Unitholders’ equityThe Fund’s units in issue are financial instruments issued by the Fund and, or on liquidation of the Fund the unitholders are entitled to the residual net assets. They rank pari passu in all material respects and have identical terms and conditions. The units provide the investors with the right to require redemption for cash at a value proportionate to the investor’s share in the Fund’s net assets at each daily redemption date and also in the event of the Fund’s liquidation.

A puttable financial instrument that includes a contractual obligation for the Fund to repurchase or redeem that instruments for cash or another financial assets is classified as equity if it meets all of the following conditions: • it entitles the holder to a pro rata share of the Fund’s net assets in the event of the Fund’s liquidation;• it is in the class of instruments that is subordinate to all other classes of assets of instruments; • all financial instruments in the class of instruments that is subordinate to all other classes of instruments have identical features;• apart from the contractual obligation for the Fund to repurchase or redeem the instrument for cash or another financial assets, the instruments does not include any other features that would require classification as a liability; and

• the total expected cash flows attributable to the instruments over its life are based substantially on the profit or loss, the change in the recognised net assets or the change in the fair value of the recognised and unrecognised net assets of the Fund over the life of the instrument.

The Fund’s unit meet these conditions and are classified as equity.

Incremental costs directly attributable to the issue or redemption of units are recognised directly in equity as a deduction from the proceeds or part of the acquisition cost.

(b) Distribution to UnitholdersDaily returns on the fund are evenly distributed to the unit holders based on their holdings as on the day, while actual payments are done at quarter ends.

(c) Fund Manager and Management feesFBN Capital Asset Management Limited is the promoter and Manager of the Fund. The Money Market Fund accrues for and pays to the Fund manager, a mangement fee charged at 0.75% of the Fund’s Net Assets Value (NAV). This is accrued daily based on the daily NAVs of the Fund and throughout the financial year.

(d) ExpensesAll fees and expenses applicable to the administration and operation of the fund, including accounting, auditing and communication costs, custodian fees, legal and filing fees, applicable taxes and bank charges are payable by the fund. 2.8 TaxationThe Fund currently incurs withholding taxes on investment income. Such income are recorded gross of witholding taxes in the statement of comprehensive income. Withholding taxes are shown as a separate item in the statement of comprehensive income.

3 Financial risk management The Fund’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The Fund is also exposed to operational risks such as custody risk. Custody risk is the risk of loss of securities held in custody occasioned by the insolvency or negligence of the custodian. Although an appropriate legal framework is in place that eliminates the risk of loss of value of the securities held by the custodian, in the event of its failure, the ability of the Fund to transfer securities might be temporarily impaired.

The Fund’s overall risk management programme seeks to maximise the returns derived for the level of risk to which the Fund is exposed and seeks to minimise potential adverse effects on the Fund’s financial performance. Risk management is carried out by the Fund manager’s risk department under policies approved by its board of directors. The risk department identifies and evaluates financial risks in close co-operation with all operating units. The board of directors of the Fund Manager provides written principles for overall risk management, as well as written policies covering specific areas such as interest rate risk, credit risk, use of non-derivative financial instruments, and investment of excess liquidity.



At 31 March 2015 Cash and cash equivalent Available for sale Total

‘000

A+ to A- FGN Bonds 2,477,647 21,677,384 24,155,032


‘000

A+ to A- FGN Bonds 1,152,601 20,103,691 21,256,292

The table below provides a reconciliation of line items in the Fund’s statement of financial position to the categories of financial instruments.

31 March 2015 Note Amortised costAvailable for

sale

Total carryingamount

Fair Value

In thousands of Naira

Cash and cash equivalents 10 2,477,647 - 2,477,647 2,477,647

Financial assets - available-for-sale debt securities

11 - 21,677,384 21,677,384 21,677,384

2,477,647 21,677,384 24,155,031 24,155,031

Accruals and other liabilities 12 704,129 - 704,129 704,129

704,129 - 704,129 704,129

31 March 2014 Note Amortised costAvailable for

sale

Total carryingamount

Fair Value

In thousands of Naira

Cash and cash equivalents 10 1,152,601 - 1,152,601 1,152,601

Financial assets - available-for-sale debt securities

11 20,103,691 20,103,691 20,103,691

1,152,601 20,103,691 21,256,292 21,256,292

Accruals and other liabilities 12 354,948 - 354,948 354,948

354,948 - 354,948 354,948

3.1 Credit RiskCredit risk is defined as the likelihood that a customer or counterparty is unable to meet the contracted financial obligation or commitment that it has entered into with the Fund, resulting in a financial loss to the Fund. It arises principally from debt securities held and cash and cash equivalents.

(i) Management of credit riskThe Fund’s policy over credit risk is to minimise its exposure to counterparties with perceived higher risk of default by dealing only with counterparties meeting the Fund’s credit standards which is assesed sometimes through the credit history of the counterparty.

Credit risk is monitored on a periodic basis by the Fund manager in accordance with policies and procedures in place. Where the credit risk is not in accordance with the investment policy or guidelines of the Fund, the Fund manager is obliged to rebalance the portfolio in compliance with the stated investment parameter.

The tables below presents an analysis of financial assets by Agusto and Co.’s rating designation as at 31 March.



A: Good quality debt issue with low credit risk; strong capacity to pay interest and principal on local currency debt in a timely manner.

A “+” (plus) or “-” (minus) sign may be assigned to ratings to reflect comparative position within the rating category. Therefore, a rating with + (plus) attached to it is a notch higher than a rating without the + (plus) sign and two notches higher than a rating with the - (minus) sign.

ii Maximum exposure to credit risk The Fund’s maximum credit risk exposure at the reporting date is represented by the respective carrying amounts of the relevant financial assets in the statement of financial position.

iii Credit qualityThe Fund’s credit quality is as enumerated below


‘000

Neither past due nor impaired 2,477,647 21,677,384 24,155,031


‘000

Neither past due nor impaired 1,152,601 20,103,691 21,256,292

(a) Financial assets neither past due nor impaired Financial instruments in this category include cash and cash equivalents as well as debt securities whose contractual interest or principal repayment are not past due.

(b) ImpairedThese are receivables that the Fund manager has determined they are irrecoverable and has therefore made appropriate provision to cover for the receivable amount.

3.2 Liquidity riskLiquidity risk is the risk that the Fund will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset.

(i) Management of liquidity risk The trust deed and the Fund manager’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stress conditions, including estimated redemptions of units, without incurring unacceptable losses or risking damage to the Fund’s reputation. The Fund is exposed to liquidity risk because of the need to meet unitholders’s redemption of units at any date. The Fund has no long term borrowing as at 31 March 2015 ( 2014: nil). Surplus cash held by the Fund over and above balance required for working capital management are invested in interest bearing current accounts and short term deposits, choosing instruments with appropriate maturities. At the reporting date, the Fund held liquid cash assets of N2.43 billion (2014: 1.15 billion) which is expected to readily generate cash inflows for managing liquidity risk.

The Fund’s overall liquidity risk is monitored on a periodic basis by the Fund manager.

(ii)Residual contractual maturities of financial assets and liabilitiesThe table below analyses the Fund’s non-derivative financial assets and liabilities into relevant maturity groupings based on the remaining period at the reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.



31 March 2015 ( ’000)Carrying amount

Less than 3 months

3 to 6 months

6 months to 1 year

Over 1 year

Financial liabilities 704,129 704,129 - - -

Financial assets (expected maturity)

Cash & cash equivalents 2,477,647 2,276,971 212,650 - -

Available for sale 21,677,384 3,779,655 12,655,697 6,073,100 -

24,155,031 6,056,626 12,868,347 6,073,100 -

Liquidity gap (assets less liabilities) 23,450,902 5,352,497 12,868,347 6,073,100


Less than 3 months

3 to 6 months

6 months to 1 year

Over 1 year

Assets

Available for sale investment securities

21,677,384 3,779,655 12,655,697 6,073,100 22,508,452


Less than 3 months

3 to 6 months

6 months to 1 year

Over 1 year

Financial liabilities 354,948 354,948 - - -

Financial assets (expected maturity)

Cash & cash equivalents 1,152,601 1,280,669 - - -

Available for sale 20,103,691 4,765,339 10,989,765 5,896,296 -

21,256,292 6,046,008 10,989,765 5,896,296 -

Liquidity gap (assets less liabilities) 20,901,344 5,691,060 - - -

3.3 Market riskMarket risk is the risk that changes in market prices, such as interest rates, equity prices, foreign exchange rates and credit spreads (not relating to changes in the obligor’s/issuer’s credit standing) will affect the Fund’s income or the fair value of its holding of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. (i) Management of market riskThe Fund’s strategy for the management of market risk is driven by the Fund’s investment objective. The Fund’s investment objectives, policies and processes are aimed at instituting a model that objectively identifies, measures and manages market risks in the Fund. The Fund’s market position are monitored on a periodic basis by the Fund manager.

(ii) Cash flow and fair value interest rate risk Interest rate risk arises from the effects of fluctuations in the prevailing levels of markets interest rates on the fair value of financial assets and liabilities and future cash flow. The Fund holds fixed interest securities that expose the Fund to fair value interest rate risk. The Fund is not exposed to cash flow interest rate risk as it does not hold investments with floating interest rates.

The table below summarizes the Fund’s interest rate gap position; analysed by the earlier contractual re-pricing or maturity date is as follows:

The analysis below shows the impact on the Fund’s profit before tax if interest rates on financial instruments had increased or decreased by 100 basis points, with all other variables held constant.



The analysis below shows the impact on the Fund’s profit before tax if interest rates on financial instruments had increased or decreased by 100 basis points, with all other variables held constant.

(iii) Foreign Exchange risk Foreign Exchange risk is the exposure of the Fund’s financial condition to adverse movements in exchange rates. Where the Fund invests in financial instruments that are denominated in currencies other than its functional currency, it is exposed to foreign exchange risk. In this scenerio the exchange rate of its currency relative to other foreign currencies may change in a manner that has an adverse effect on the fair value or future cash flows of that portion of the Fund’s financial assets and liabilities denominated in currencies other than the Naira.

Currently, the Fund does not have transactions in any other currency except the Fund’s functional currency (Naira). Hence it is not exposed to foreign exchange risk.

(iv) Price riskThe Fund is not exposed to equity securities price risk. This is the risk that the fair value of the equity securities will fluctuate as a result of changes in market prices (other than arising from interest rate risk or currency risk), whether caused by factors specific to an individual investment, it’s issuer or factors affecting all instruments traded in the market.

3.4 Capital risk managementThe units issued by the Fund provide an investor with the right to require redemption for cash at a value proportionate to the investor’s share in the Fund’s net assets at the redemption date and are classified as equity. The Fund’s objectives in managing the units are to ensure a stable base to maximise returns to all investors, and to manage liquidity arising from redemptions.

3.5 Classifications and fair values of financial assets and liabilities: (i) Financial asset and liability classification The Fund’s accounting policies guide scope for assets and liabilities to be designated on inception in to different accounting categories in certain circumstances.

(i) In designating financial assets at availabe for sale, the Fund has determined that it has met the criteria for this designation set out in note 2.3(a)(ii)

(ii) The unitholders interest is classified as equity, as the Fund has determined that it has met the criteria for this designation set out in note 2.7.

(ii) Valuation of financial instrumentsThe Fund’s accounting policy on fair value measurement is discussed in note 2.3.

The Fund measures fair value using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements:

Effect of 100 basis points movement on profit before tax (N’000) plus 1% minus 1%

225,085 (225,085)

Effect of 100 basis points movement on profit before tax (N’000) plus 1% minus 1%

201,037 (201,037)


Less than 3 months

3 to 6 months

6 months to 1 year

Over 1 year

Assets

Available for sale investment securities

20,103,691 20,103,691 - - 20,103,691



(i) Level 1 : Quoted market price (unadjusted) in an active market for an identical instrument.

(ii) Level 2 : Valuation techniques based on observable inputs, either directly - i.e.as prices or indirectly - i.e. derived from prices. This category includes instruments valued using : quoted market prices in active markets for similar instruments ; quoted prices for identical or similar instruments in markets that are considered less than active; or other valuation techniques where all significant inputs are directly or indirectly observable from market data. (iii) Level 3 : Valuation techniques using significant unobservable inputs. This category includes all instruments for which the valuation technique includes inputs not based on observable data and the unobservable inputs have a significant effect on the instrument’s valuation. This category includes instruments that are valued based on quoted prices for similar instruments where significant unobservable adjustments or assumptions are required to reflect differences between the instruments.

The table below analyses financial instruments measured at fair value at the end of the reporting period by the level in the fair value hierarchy into which the fair value measurement is categorised.

31 March 2015 Level 1

Assets

Available-for-sale financial assets

- FGN Bonds 2,259,066

- Treasury bills 19,418,318

Total assets 21,677,384

31 March 2014 Level 1

Assets

Available-for-sale financial assets

- FGN Bonds 489,051

- Treasury bills 19,614,640

Total assets 20,103,691

(a) Financial instruments not measured at fair value

Carrying value ’000

Fair value ’000

Carrying value ’000

Fair value ’000

At 31 March 2015 At 31 March 2014

Financial assets

Cash and cash equivalents 2,477,647 2,477,647 1,152,601 1,152,601

Financial liabilities

Accrued expenses 704,129 704,129 354,948 354,948

The following table presents the fair value hierarchy of financial instruments not measured at fair value

At 31 March 2015 ( ’000) Level 1 Level 2

Cash and cash equivalents 2,477,647 -

Accrued expenses and other liabilities - 704,129



At 31 March 2014 ( ’000) Level 1 Level 2

Cash and cash equivalents 1,152,601 -

Accrued expenses and other liabilities - 354,948

4 Critical accounting estimates and assumptions These disclosures supplement the commentary on financial risk management (see note 3).

Valuation methodologyManagement makes estimates and assumptions concerning the future. The resulting estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities are outlined below.

Fair value of securities not quoted in an active market The valuation methodologies used utilize inputs from the financial statements of the companies (such as profit after tax, revenue, EBITDA, and book value), thus reflecting possible impairments that may have arisen from the crystallized operational risk on any of it’s investments. The valuation methods used include a degree of subjectivity as they require management to estimate a number of parameters, including interest rate yields, credit spreads, liquidity risk premiums, equity prices, option volatilities and currency rates.

5 Interest income

6 Net gains on investment securities

7 Distribution to unitholders

’000 31 March 2015 31 March 2014

Interest on placements 799,075 136,073

Interest on treasury bills 2,163,753 700,056

Interest on bonds 168,441 5,643

3,131,269 841,772

’000 31 March 2015 31 March 2014

Gains on redemptions - 19

Gains on desposal of treasury bills 35,108 3,625

35,108 3,644

’000 31 March 2015 31 March 2014

Distribution to unitholders from the net income of the Fund is made on a quarterly basis in line with the provisions of the Fund’s trust deed and subject to the applicable laws, rules and regulations of the Securities and Exchange Commission.

2,870,288 739,500



8. Fund expenses

’000 31 March 2015 31 March 2014

Management fee 191,830 49,358

Trustees' fees 7,694 3,318

Custodian fees 25,646 5,638

Registrars' fees 1,085 642

Performance incentive fee 36,600 4,984

Ratings fee 1,575 1,575

264,430 65,515

(a) Management fee & performance incentive fee In line with the provisions of the Fund’s trust deed, the Fund Manager earns management fees of 0.75% per annum of the Fund’s Net Asset Value (NAV) which is accrued for on a daily basis and payable quarterly in arrears. Total management fees for the year amounted to N191.8 million (2014: N49.3 million).

In addition, the Fund Manager is entitled to a performance incentive fee which shall not exceed 10% of the total returns in the excess of 10% of the Fund’s NAV per annum subject to the consent of the Trustee and the Securities and Exchange Commission (SEC). Performance fee for the year amounted to N36.60 million (2014: 4.98 million).

(b) Trustee fee In line with the provisions of the Fund’s trust deed, the trustee earns an annual fee of 0.025% per annum of the Fund’s Net Asset Value (NAV) which is accrued for on a daily basis and payable quarterly in arrears by the Fund manager. Total trustees’ fees for the year amounted to N7.6 million (2014: N3.3 million).

(c) Custodian fee The Fund manager pays the custodian an annual fee of 0.1% of the Fund’s assets under custody calculated monthly and realised quarterly during the tenure of the Custody Agreement of the Fund. Total custody fee for the year amounted to N25.65 million (2014: N5.64 million).

9 Other administrative expenses

’000 31 March 2015 31 March 2014

Offer expenses - 32,282

Auditor's remuneration 3,000 3,000

Bank charges and other finance costs 2,381 1,508

Advertising and publicity 383 -

Other expenses 926 3,611

6,690 40,401



11 Financial assets: available for sale

11.1 Available for saleAvailable for sale financial assets comprise:

11.1a The fair value of available for sale treasury bills investments was derived as follows:

11.1b The fair value of available for FGN bonds as at 31 March 2015 is as follows:

11.2 Movement in fair value:

’000 31 March 2015 31 March 2014

Amortized cost 19,419,332 19,629,515

Fair value loss (1,014) (14,875)

19,418,318 19,614,640

’000 31 March 2015 31 March 2014

Amortized cost 2,256,860 490,406

Fair value gain/(loss) 2,206 (1,355)

2,259,066 489,051

’000 31 March 2015 31 March 2014

Opening (16,230) -

Recognised in other comprehensive income (OCI) 17,422 (16,230)

Closing 1,192 (16,230)

10 Cash and cash equivalents

’000 31 March 2015 31 March 2014

Cash in bank 50,809 1,229

Short term placements and commercial papers 2,214,188 1,151,372

Cash and Cash equivalent for cashflow purposes 2,264,997 -

Long -term placemnts 212,650 -

2,477,647 1,152,601

’000 31 March 2015 31 March 2014

Available for sale 11.1 21,677,384 20,103,691

21,677,384 20,103,691

’000 31 March 2015 31 March 2014

Treasury bills 11.1a 19,418,318 19,614,640

Government bonds 11.1b 2,259,066 489,051

21,677,384 20,103,691



12 Accruals and other liabilities

’000 31 March 2015 31 March 2014

Accounts payable 52,540 410

Accrued expenses 81,057 40,768

Distributions payable 570,532 313,770

704,129 354,948

13 Net assets attributable to unitholders The analysis of movements in the number of units and net assets attributable to unitholders during the year were as follows: (a) Number of units fully paid and issued:234,498,752 units of 100 each (2014: 209,175,731 units of 100 each)

Number of units31 March 2015

’00031 March 2014

’000

Balance as at 24 September 2012 209,176 -

Subscriptions during the period 495,873 280,669

Redemptions by unitholders during the period (470,550) (71,493)

Balance as at period end 234,499 209,176

Net assets value per unit (Naira)31 March 2015

’00031 March 2014

’000

Balance as at 24 September 2012 -

Profit for the period -

Other comprehensive income 17,422 (16,230)

17,422 (16,230)

Contributions and redemption by unitholders ’000

Balance as at beginning of period 20,901,344 -

Subscriptions during the period 49,587,282 28,066,880

Redemptions during the period (47,055,146) (7,149,306)

Balance as at 31 March 2014 23,450,902 20,901,344

Net assets value per unit (Naira) 100 100



14 Related partiesThe Fund is under the management of FBN Capital Asset Management Limited, which is a member of FBN Capital Limited and is thus related to other subsidiaries of the FBN Capital group through common shareholdings or common directorships. Balances due to related parties as at year end are as follows:

14.1 Due to related companies This represents the balance due to related parties as at the end of the period: Entity Nature of balance 31 March 2015 31 March 2014

FBN Capital Asset Management Limited Fees payable 44,412 25,396

15 Contingent liabilitiesThe Fund had no contingent liability as at the reporting date (31 March 2014: Nil). 16 Capital commitments The Fund had no capital commitments as at 31 March 2015 (31 March 2014: Nil).

17 Post balance sheet eventsThere were no post balance sheet events which could have had material effect on the state of affairs of the Fund as at 31 March 2015 (31 March 2014: Nil) and on the profit for the year ended on that date which have not been adequately provided for or recognised.



31 March 2015’000

%31 March 2014

’000%

Gross earnings 3,166,377 845,416

Bought in materials and services (296,089) (105,916)

Value added 2,870,288 100% 739,500 100%

Distribution

Unitholders

Distributed to unitholders 2,870,288 100% 739,500 100%

2,870,288 100% 739,500 100%

VALUE ADDED STATEMENT



FUND MANAGER: FBN CAPITAL ASSET MANAGEMENT

HEAD OFFICE 18 Keffi Street, Off Awolowo Road, S.W. Ikoyi, Lagos, Nigeria Tel +234 810 082 0082, +234 705 445 5555 +234 708 065 3100

ABUJA OFFICEFirst Bank Building, 2nd floor, Ahmadu Commassie House, Plot 777, Muhammadu Buhari Way, CBD, Abuja Tel +234 9 291 6757, +234 703 323 0762

PORT HARCOURT OFFICE3rd Floor, 22/24 Aba Road, Port Harcourt, Rivers StateTel +234 8 4802746, +234 703 323 0533 +234 703 322 9163

Email [email protected] Web www.fbncam.comA subsidiary of FBN Capital, An FBN Holdings Company

Documents

ANNUAL REPORT AND FINANCIAL STATEMENTSzenithassetmanagement.com.ng/docs/insight/14515604281450268003... · ANNUAL REPORT AND FINANCIAL STATEMENTS ... Mr. Kayode Akinkugbe ... Manager