CERTIFICAMOS QUE EN EL INTERIOR SE ENCUENTRA UNA

North American Income Fund plc
Deutsche Americas Bond Portfolio
Suplemento a la Circular de Oferta
1 de Diciembre de 2008
LA OFERTA PÚBLICA DE LAS CUOTAS DE PARTICIPACION (ACCIONES) DEL FONDO HA SIDO AUTORIZADA
POR LA COMISION NACIONAL DE VALORES. ESTA AUTORIZACIÓN NO IMPLICA QUE LA COMISION
RECOMIENDA LA INVERSIÓN EN EL FONDO NI REPRESENTA OPINIÓN FAVORABLE O DESFAVORABLE SOBRE
LA PERSPECTIVA DEL FONDO. LA COMISION NACIONAL DE VALORES NO SERA RESPONSABLE POR LA
VERACIDAD DE LA INFORMACION PRESENTADA EN ESTE PROSPECTO O DE LAS DECLARACIONES
CONTENIDAS EN LAS SOLICITUDES DE REGISTRO.
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North American Income Fund plc
(Una sociedad de inv ersión abierta tipo paragua con capital variable)
Una compañía de responsabilidad limitada
constituida como una compañía de inv ersión con capital
variable de conf ormidad con las leyes de Irlanda
Con número registrado 186436
SUPLEMENTO a la CIRCULAR DE OFERTA
Diciembre 1, 2008
Este Suplemento forma parte y debe leerse en el contexto de la Circular de Oferta de North
American Income Fund plc de fecha 1° de enero del 2005 , el Suplemento a la Circular de Oferta
de fecha 12 de febrero de 2006 y el Suplemento a la Circular de la Oferta de fecha 24 de Julio de
2007 (conjuntamente con la Circular de Oferta).
Los Directores de North American Income Fund plc cuyos nombres aparecen en las páginas 11 y 12
aceptan responsabilidad por la información contenida en esta Circular de Oferta y en este Suplemento a
la Circular de Oferta. Al mejor saber y entendimiento de los Directores (quienes se han esmerado que
esto sea así) la información contenida en este documento está de acuerdo con los hechos y no omite
nada que pudiera afectar la importancia de dicha información. Los Directores aceptan responsabilidad
de acuerdo con ello.
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INDICE DE CONTENIDO
Sección
1. Particularidades
Página
4
A. Forma de Emisión
4
B. Mercados
5
C. Inversiones Permitidas
5
D. Capital Autorizado
6
E. Puesto de Bolsa
6
F. Sub Gestor de Inversiones
7
G. Tratamiento Fiscal
7
H. Cargos y Costos
7
I.
8
Auditores Externos
J. Asesores Legales del Fondo
9
K. Conflicto de Intereses
9
L. Reformas a la Circular de Oferta
9
M. Modificaciones
9
2. Notas Aclaratorias
10
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MODIFICACIONES A LA CIRCULAR DE OFERTA
1º de Diciembre de 2008
1. Particularidades. Para los efectos de la negociación de las acciones del Fondo en y desde la
República de Panamá, se adiciona el presente Anexo para que forme parte integral de la Circular de
Oferta fechada al 1 de enero de 2005, como ha sido modificada:
A. FORMA DE EMISIÓN.
El Fondo no emitirá en forma física las acciones, estos son a la orden, sin vencimiento, y
llevados mediante anotaciones electrónicas y contables en The Governor and Company of the Bank of
Ireland (el “Custodio”). Para los efectos de las negociaciones de las acciones que se hagan en Panamá o
en otros países del área centroamericana, la Central Latinoamericana de Valores de Panamá (en
adelante “LatinClear”) ha abierto una cuenta de custodia con el Custodio del Fondo. Todas las acciones
del Fondo, se compensarán y liquidarán bajo las reglas y procedimientos tanto de la Bolsa de Valores de
Panamá, como de LatinClear.
Dado que LatinClear posee una cuenta de custodia con el Custodio, al momento en que se
efectúe una operación, el Administrador del Fondo instruirá al Custodio a asignar las acciones que
correspondan a la cuenta de LatinClear. Una vez el Custodio (i) i) consigne las acciones del Fondo y ii)
remita la confirmación de dicha consignación a Latin Clear, éste último procederá a realizar la anotación
en cuenta de custodia que Mundial Asset Management mantiene en LatinClear, para que este a su vez
proceda a realizar las operaciones respectivas en la Bolsa local.
LatinClear ha suscrito un “CONTRATO DE PRESTACIÓN DE SERVICIOS MUTUOS
INTERNACIONALES DE CUSTODIA, ADMINISTRACION, TRANSFERENCIA, COMPENSACIÓN Y
LIQUIDACIÓN DE VALORES” tanto como con la central de valores de Costa Rica, Banco Internacional
de Costa Rica y CEDEVAL en la República del Salvador. Con fundamento en dichos acuerdos, los
inversionistas de tales jurisdicciones podrán adquirir acciones del Fondo a través del sistema de
LatinClear, quien emitirá constancia de la transacción realizada.
Las anotaciones en cuenta se realizarán a través de un registro electrónico, de manera clara y
precisa, que permita la inequívoca identificación de los derechos dimanantes de dicho registro. La
constitución y extinción de derechos patrimoniales sobre las cuotas de participación tendrá lugar
mediante la anotación que al respecto realice la central de valores.
La persona que aparezca anotada en el registro como tenedor registrado se presumirá titular
legítimo, y, en consecuencia, estará facultado para exigir los derechos que le correspondan. En vista de
que LatinClear únicamente puede actuar por cuenta de los participantes, quienes a su vez actúan por
cuenta de otros intermediarios o tenedores indirectos, la habilidad de una persona propietaria de
derechos bursátiles con respecto a las acciones del Fondo para dar en prenda sus derechos a personas
o entidades que no sean participantes, o que de otra forma actúen en relación con dichos derechos,
podría ser afectada por la ausencia de instrumentos físicos que representen dichos intereses.
LatinClear le ha informado al Fondo, su Custodio y Administrador de Inversiones que es una
sociedad anónima panameña que posee licencia de Central de Custodia, Liquidación y Compensación
de Valores emitida por la Comisión Nacional de Valores de la República de Panamá. LatinClear fue
creada a fin de mantener valores en custodia a favor de sus participantes y facilitar la compensación y
liquidación de transacciones en valores en Panamá a través de anotaciones en cuenta, y así eliminar la
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necesidad de movimiento de certificados físicos.
De conformidad a lo establecido en el Artículo 151 del Decreto Ley No. 1 del 8 de julio de 1999 y
sus reformas, LatinClear podrá establecer Acuerdos, Convenios o Alianzas de Custodia Transfronteriza
con otras instituciones que operen en el extranjero, que cumplan con los estándares y sigan las mejores
prácticas internacionales en materia de Centrales de Valores, a fin de aumentar la eficiencia en la
negociación de valores, así como para facilitar la integración y la negociación de valores del mercado de
valores panameño con otros sistemas internacionales de custodia, compensación y liquidación de
valores.
En estos casos, LatinClear, previamente autorizado por su Junta Directiva, podrá convenir con
dichos entes, todos los Acuerdos, Convenios o Alianzas, que sean necesarios para los efectos antes
mencionados.
Para los fines pertinentes, LatinClear podrá aperturar cuentas de custodia a estas instituciones, a
fin de acreditar y debitar activos financieros en virtud del (los) Acuerdo(s), Convenio(s) o Alianza(s)
suscrito entre las partes.
B. MERCADOS
Las acciones o cuotas de participación del Fondo serán colocadas tanto en la República de
Panamá, como en Costa Rica, El Salvador, y demás jurisdicciones siempre y cuando el Fondo haya
concluido con el proceso de registro y obtención para la venta pública de las acciones del Fondo en cada
una de dichas jurisdicciones.
El Fondo tiene el derecho, como consta en sus documentos de incorporación, de emitir distintas
clases de acciones en una cartera para diferentes inversionistas.
C. Inversiones Permitidas
El Fondo podrá invertir en instrumentos de mercado monetario que no sean aquellos negociados
en mercados no regulados (véase suplemento a la circular de oferta fechado al 24 de julio de 2007.
Para los efectos del Acuerdo 5-2004, se hace la siguiente declaración:
El Fondo podría realizar inversiones en valores no cotizados, lo que supone
asumir riesgos adicionales en relación con las inversiones en valores cotizados por la
inexistencia de un mercado organizado que asegure la liquidez y su valoración
conforme a las reglas de mercado en la cartera del Fondo.
El Fondo sólo invertirá en instrumentos derivados siempre y cuando el nivel de inversión en
estos no supere el valor neto de las acciones. Hasta la fecha, el Fondo no ha invertido en instrumentos
derivados.
Para los efectos del Acuerdo 5-2004, se hace la siguiente declaración:
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El Fondo podría operar con instrumentos financieros derivados
negociados en mercados organizados de derivados con la finalidad de cobertura de los
riesgos asociados a sus inversiones de contado. El uso de instrumentos financieros
derivados, incluso como cobertura de otras inversiones, también conlleva riesgos,
como la posibilidad de que haya una correlación imperfecta entre el movimiento del
valor de los contratos de derivados y los elementos objeto de cobertura, lo que puede
dar lugar a que ésta no tenga todo el éxito previsto.
El Fondo atenderá los artículos 27 “Normas Generales sobre las Inversiones” y 28 “Inversiones
en Valores no Admitidos en negociación en una Bolsa u otro Mercado Organizado” del Acuerdo 5-2004
adoptado por la Comisión Nacional de Valores de Panamá.
D. Capital Autorizado del Fondo
El Fondo cuenta con un capital autorizado de 40,000 euros.
E. Puesto de Bolsa Autorizado
El Fondo (NORTH AMERICAN INCOME FUND PLC) y el Banco Centroamericano de Integración
Económica han suscrito con la sociedad MUNDIAL VALORES EN ADMINISTRACIÓN, S.A. (en adelante
“Mundial”) un Contrato de Sub Agente (Sub Agency Agreement) a través del cual Mundial se
compromete a representar el Fondo en la República de Panamá e interponer sus mejores esfuerzos para
la promoción y venta de las acciones del Fondo.
El Fondo se reserva el derecho de contratar sub agentes adicionales, así como Mundial se
reserva el derecho de representar y/o promover en y desde Panamá la compra y venta de acciones o
cuotas de participación de otros fondos, sociedades o vehículos de inversión en adición al Fondo.
El Contrato de Sub Agencia no implica relación laboral ni de subordinación entre Mundial y el
Fondo, como tampoco asociación de otro tipo mas que la explícitamente contemplada en el Contrato.
Por los servicios de Sub Agente, Mundial tendrá derecho a una comisión anual equivalente al
cero punto setenta y cinco por ciento (0.75%) sobre los activos introducidos al Fondo y mantenidos,
inicialmente, por un período de 90 días, pagadera de forma prorrateada por el subsiguiente período de
90 días. Esta comisión será cargada al Fondo y deberá pagarse con una periodicidad de 90 días.
Adicionalmente, Mundial se reserva el derecho de cobrar a su favor comisiones de entrada (“front end
fees”) a futuros inversionistas del Fondo. De ser el caso, dichas comisiones no serán sufragadas por el
Fondo.
Mundial Valores, S.A. es una sociedad anónima organizada y existente de acuerdo a las leyes
de la República de Panamá desde el 5 de diciembre de 2003 y posee Licencia de Casa de Valores
según Resolución No. CNV-88-2004 de 11 del mes del mayo de 2004 expedida por la Comisión
Nacional de Valores de Panamá. Mundial Valores, S.A posee un puesto en la Bolsa de Valores de
Panamá, S.A. y es Participante de Latinclear.
El señor Gabriel Fábrega W. ([email protected]) es el Ejecutivo Principal de Mundial
Valores, S.A., y persona de contacto para todos los temas referentes al Fondo.
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F. Sub Gestor de Inversiones
El Fondo y DWS Finanz Service GMBH ha acordado con Mundial Valores, S.A. para que éste
sea su sub gestor de inversiones designado en la República de Panamá. Mundial Valores S.A. sólo
ejercerá tales funciones cuando así sea expresamente requerido por el gestor de inversiones principal y
el Fondo. De darse tal solicitud, el Fondo y DWS Finanz Service GMBH negociarán la comisión de
administración pagadera a Mundial Valores, S.A., la cual no superará bajo ninguna circunstancia las
comisiones pagaderas al gestor de inversiones principal.
G. Tratamiento Fiscal
La presente sección es un resumen de las disposiciones legales aplicables en la actualidad en la
República de Panamá, y se incluyen con carácter meramente informativo. Esta sección no debe ser
considerada como una opinión formal en materia tributaria, y cualesquiera dudas deben ser consultadas
con su asesor tributario.
Ni el Administrador de Inversiones, ni el Sub Agente del Fondo otorgan garantía alguna sobre el
tratamiento que el Ministerio de Economía y Finanzas de Panamá dará a la inversión en las cuotas de
participación o acciones del Fondo aquí ofrecidas.
1) Intereses.
Según lo dispuesto en el artículo 270 del Decreto Ley 1 de 8 de julio de 1999, estarán exentos del
impuesto sobre la renta los intereses que se paguen a los tenedores de valores registrados en la
Comisión, que sean colocados en oferta pública a través de una Bolsa de Valores u otro mercado
organizado.
Si las cuotas de participación o acciones no fueran colocadas en la forma descrita los intereses u
otros beneficios que se paguen a sus tenedores causarán un impuesto sobre la renta del cinco por ciento
(5%), que deberá ser retenido por el emisor de dichas cuotas.
2) Ganancias de Capital
El artículo 269 del Decreto Ley 1 de 8 de julio de 1999 establece que para los efectos del impuesto
sobre la renta, impuesto complementario y del impuesto de dividendos, no se considerarán gravables las
ganancias, ni deducibles las pérdidas, proveniente de la colocación de valores registrados en la
Comisión Nacional de Valores y enajenados a través de una bolsa de valores u otro mercado
organizado.
H. Cargos y Gastos
En la sección de la circular de oferta fechada al 1 de enero de 2005, bajo el sub título Cargos y
Gastos, el North America Income Fund PLC (en adelante el “Fondo”) deberá pagar de los activos del
Fondo:
1. El Gestor de Inversiones está facultado a recibir 0.825% del promedio diario del valor
neto de los activos del Portafolio, pagadero mensualmente en forma adelantada.
2. El Custodio y Administrador de Inversiones recibirán una comisión que oscila entre
0.02% a 0.35% , con un pago mínimo mensual de forma adelantada de $1,500.00
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3. Adicionalmente, el Custodio podrá recibir cargos transaccionales a las tasas comerciales
aplicables (Véase Página 15 de la Circular de Oferta)
4. El Administrador podrá recibir a una tasa anual de 0.10%% del valor neto de los activos
por los primeros $100 millones de activos netos y 0.07% del valor neto de los activos en
exceso con una comisión mínima mensual de $5,000.00 de forma adelantada.
5. El Administrador podrá recibir cargos y comisiones por las aperturas de cuenta de
accionistas, mantenimiento y transacciones así como comisión por preparación de los
estados financieros a tasas comerciales aplicables.
6. El Fondo pagará al Agente de Colocación comisión de colocación con relación al
Portafolio de hasta 0.50% del valor promedio de las acciones del Portafolio mantenidas
por el año por cualquier inversionista introducido al Fondo por el Agente de Colocación,
la cual deberá pagarse dentro de los 30 días siguientes al cierre del año fiscal.
7. El Gestor de Inversiones estará facultado a recibir Comisión de Desempeño de los
activos del Fondo en un monto equivalente a 20.00% de cualquier monto sobre el
desempeño del Portafolio sobre el Hurdle Rate (12 meses US Dólar LIBOR más 2.00%)
de acuerdo a los parámetros establecidos en la Circular de la Oferta.
La Circular de la Oferta fechada al 1 de enero de 2005 regula los pagos de estas
comisiones que serán hechas por el Fondo y no el Gestor de Inversiones. Las
comisiones al Custodio y Administrador de Inversiones promedian en 0.138% mensual
desde el 2005 hasta la fecha.
I.
Auditores Externos
KPMG, contadores públicos debidamente autorizados por el Instituto de Contadores Públicos de
Irlanda (en adelante “ICAI”) actúa en capacidad de auditor independiente del Fondo durante el proceso
de proveer auditoria independiente del Fondo. El número de registro de KPMG ante ICAI es #10919
(www.icai.ie)
Regularmente KPMG asesora en temas financieros a la Junta Directiva del Fondo en sus
asambleas anuales y semestrales. KPMG informa a la Junta Directiva del Fondo cualquier cambio a los
principios contables de Irlanda y cómo tales afectan al Fondo, y asesora al Fondo en cuanto decisiones
financieras que sean necesarias tomar.
El socio a cargo de la revisión de auditoria del Fondo es Colm Clifford. A continuación sus datos
de contacto:
Colm Clifford
Socio
KPMG
5 George’s Dock
Internacional Financial Services Centre
Dublín 1, Republica de Irlanda
www.kpmg.ie
[email protected]
Tel: 353-1-410-1400
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Fax: 353-1-412-1376
J. Asesores Legales del Fondo
La firma forense SUCRE, ARIAS & REYES han actuado como los asesores legales del NORTH
AMERICA INCOME FUND PLC durante el proceso de registro para la oferta pública de las acciones o
cuotas de participación del Fondo en y desde la República de Panamá.
SUCRE, ARIAS & REYES es una firma de abogados con más de cuarenta (40) años de
experiencia en el mercado nacional e internacional. Actualmente, sus oficinas están localizadas en Calle
50 y Calle Juan Ramón Poll, Edificio Grupo Private Asset Management, Piso 3, Bella Vista, Ciudad de
Panamá, República de Panamá.
Los Licenciados Nadiuska López de Abood ([email protected]) y Ernesto Eduardo Arias
([email protected]) son los asesores legales de contacto en temas relacionados al registro de las acciones
o cuotas de participación del Fondo en la República de Panamá.
K. Conflicto de Intereses
No existe ningún conflicto de intereses entre el Fondo y sus representantes en la República de
Panamá.
L. Reformas a la Circular Informativa
Los cambios que se deban realizar a la circular referente a las políticas de inversión, reglas sobre
suscripción y redención de acciones, así como cambios en los límites máximos de las comisiones
aplicables deberán contar con la aprobación de la Asamblea de Inversionistas, la cual deberá convocarse
para tal fin. Todo cambio se efectuará en cumplimiento al Acuerdo 5-2004.
De igual forma la posible sustitución de la sociedad administradora y del custodio deberá ser
aprobada en dicha instancia.
M. NOTIFICACIONES
En la República de Panamá a:
GABRIEL FABREGA
MUNDIAL VALORES EN ADMINISTRACIÓN
Tel +507 225-2525
Fax +507 225-2390 / 225-2534
Dirección Postal 0816-03354
[email protected]
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2.
Notas aclaratorias
Para los efectos de la legislación de la República de Panamá, debe entenderse que la figura que en
la circular se denomina es “Gerente de Inversiones” o “Gestor de Inversiones”, es lo que en Panamá se
denomina “Administrador de Inversiones”, siendo aquella persona que tiene la facultad de administrar,
manejar, invertir y disponer de los valores y bienes en nombre del Fondo. Para los efectos del NORTH
AMERICAN INCOME FUND PLC es la sociedad DWS FINANZ-SERVICE GMBH
Recae en la sociedad BANK OF IRELAND SECURITIES SERVICES LIMITED el calcular el valor de
los activos netos de las acciones del Fondo, y demás funciones administrativas.
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North American Income Fund plc
Deutsche Americas Bond Fund
INVESTOR FORMS
Table of Contents
Page
SHARE TRANSACTION FORMS
Application for Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-10
Top-Up. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Redemption of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ANTI-MONEY LAUNDERING (AML) REQUIREMENTS
Identifying the Client Type . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-15
AML Requirements by Client Type of Client . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16-28
FAST TRACK – Minimum Initial Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Corporate Investor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29-30
Pension Investor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31-32
Trust Investor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33-34
COUNTRY MEMBERS OF THE FINANCIAL ACTION TASK
FORCE (FATF) ON MONEY LAUNDERING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
MONEY LAUNDERING ASSURANCE LETTER FOR SUB-AGENTS . . . . . . . . . . . . . 38
For more information please contact the Fund’s Consultant
Patrick Paradiso
Tel.: +001-917-643-6181
Skype: +001-718-395-1781
Fax: +001-718-885-1037
E-mail: [email protected]
For more information on the Fund please refer to our web site: www.nai-fund.com
North American Income Fund plc - 1
SHARE TRANSACTION FORMS
Application for Shares
Top-Up
Redemption of Shares
North American Income Fund plc - 2
APPLICATION FOR SHARES
To:
Bank of Ireland Securities Services Ltd.
New Century House
International Financial Services Center
Mayor Street Lower
Dublin 1, Ireland
McGrath
(353-1-673-7557)
oror
Anne
Moore
(353-1-673-7240)
CONTACTS: Ian
Patrice
Jackson
(353-1-673-7310)
Anne
Moore
(353-1-673-7240)
FAX: (353) (1) 607-1978
Email: [email protected]
[email protected]
Shares in North American Income Fund plc (the "Company") are available only to investors who are Qualifying
Investors and who are not "U.S. Persons" as defined in this application and in the Offering Circular which
accompanies this application.
Amount of Investment ($): ________________________________
(Not less than $5,000, if greater after placement fee)
Name of Portfolio:
Deutsche Americas Bond Fund
INVESTOR INFORMATION
Investor*_________________________________________________________________________
Co-Investor______________________________________________________________________
Residential Address _______________________________________________________________
________________________________________________________________________________
Mailing Address (if different) _________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Citizenship_______________________________________________________________________
Country of Residence_______________________________________________________________________
Telephone No.____________________________________________________________________
*If the Investor or Co-Investor is neither a natural person nor Financial Intermediary, then appropriate documentation
must be provided and attached to this Application for Shares clearly indicating that signatory (ies) below is/are duly
authorized to enter into this investment on behalf of the Investor or Co-Investor.
The Investor must make arrangements with a Placement Agent or Financial Intermediary for payment of Shares
purchased, redemptions, receipt of Portfolio reports, voting of Shares and other matters relevant to ownership of Shares.
The Company will only recognize instructions from the Placement Agent or Financial Intermediary.
North American Income Fund plc - 3
Bank: Chase Manhattan Bank, New York
ABA: 021000021
Swift: CHASUS33
Account Number: 400 235 749
Account Name: The Governor & Company of the Bank of Ireland
Fund: North American Income Fund plc for the account of Deutsche Americas Bond Fund
Reference: Deutsche Americas Bond Fund
FINANCIAL INTERMEDIARIES
I/We appoint the following financial intermediary as my/our agent, to purchase, hold and redeem Shares of the
Portfolio. I am currently a client or customer of the following financial intermediary.
Name of Financial Intermediary_______________________________________________________
Company Address: ________________________________________________________________________
Mailing Address: ________________________________________________________________________
CERTIFICATION AND AGREEMENT BY OR ON BEHALF OF
INVESTOR(S) REGARDING ELIGIBILITY TO INVEST IN THE COMPANY
I certify the following, which I understand and agree is necessary for me to be eligible to purchase Shares of the
Company and to satisfy requirements of United States laws:
1) I understand that the Company is not governed or protected by United States laws, or similar laws of any states in
the United States, concerning investment companies or the sale of securities, and that the investor may not rely on
the investor protections provided by these laws.
2) A current offering circular for the Company designated above was made available to me and reviewed by me
outside the United States. My investment decision to purchase Company Shares was made, and this application to
purchase Company Shares or my authorization to the Financial Intermediary to apply to purchase Shares on my
behalf, was signed or given while I was not physically present in the United States. I was not solicited or
recommended the purchase of Company Shares while I was physically present in the United States.
3) I am a Qualifying Investor as defined in the Offering Circular and I certify that I am aware of the risks involved in
the proposed investment and of the fact that inherent in such investment is the potential to lose all of the sum
invested.
4) I am not a "U.S. Person" as that term is defined below or as described in the Company offering circular. I am not
purchasing Shares of the Company for the account of, or with funds provided by, a U.S. Person, and I will not sell,
transfer or otherwise dispose of any Shares of the Company to a U.S. Person or to any other person within the
United States. I am purchasing Shares of the Company for investment and not with the intent of resale or
distribution.
5) I have such knowledge and experience in business and financial matters as to be capable of evaluating the merits
and risks of investing in the Company, and am able to bear the economic risk of this investment.
6) I understand that investments in the Company are not deposits with or obligations of, or guaranteed or endorsed by,
Deutsche Bank AG or any other bank and that Shares of the Company are not insured by the U.S. Federal Deposit
Insurance Corporation, the U.S. Federal Reserve Board, any U.S. governmental agency or The Central American
Bank for Economic Integration.
7) I am not purchasing and will not purchase Shares with monies that are or will be derived from illegal activities.
8) I am not purchasing and will not purchase Shares as part of any activity that is intended or conducted to hide or
disguise monies or assets derived from illegal activities.
9) I am not purchasing and will not purchase Shares as part of any activity designed to evade the currency transaction
reporting requirements of the United States or any governmental agency of the United States.
North American Income Fund plc - 4
I agree to immediately notify the Company in the event I become a U.S. Person at some time in the future. I
understand that a "U.S. Person" means generally any of the following:
•
•
a citizen or resident of the United States for U.S. federal income tax purposes;
a corporation, partnership or other legal entity organized under the laws of the United States or any of its
states;
•
any estate or trust other than an estate or trust the income of which from sources outside the United States
(which is not effectively connected with the conduct of trade or business within the United States) is not
included in gross income for the purpose of computing United States federal income tax; or
•
any corporation, partnership or other entity, or trust or estate which is directly or indirectly controlled by one or
more of the above categories of U.S. Person and, in the case of a corporation or partnership, which is formed
principally for the purpose of investing in securities not registered under the U.S. federal securities laws.
The United States means the United States of America (including the fifty States and the District of Columbia), its
territories, possessions and all other areas subject to its jurisdiction.
By signing the declaration below I hereby agree to indemnify and hold harmless each of the Company, the Investment
Manager and the Administrator (each an "Indemnified Party") from any claims, demands, proceedings, liabilities,
damages, losses, costs and expenses directly or indirectly suffered or incurred by such Indemnified Party arising as a
result of the declaration made herein being untrue or as a result of my failure to notify the Company, the Investment
Manager or the Administrator of a change in my status which would render the declaration contained herein untrue
subsequent to the date of this declaration.
On the basis of the foregoing, we hereby agree to subscribe for the Shares of the Company as delineated above and
hereby agree to be bound by the terms of the current Offering Circular, the Memorandum and Articles of Association of
the Company and the agreements relative thereto, all of which we have received or have been given the opportunity to
review. We hereby state that we have also been given the opportunity to review the current Audited Financial Statement
and Interim Statement of the Company. We understand that we can obtain updates to the aforementioned Company
information from the Administrator at any time.
SIGNATURE (Complete 1 or 2, as appropriate)
1.
By the Investor(s)
____________________________________
(Signature of Investor)
____________________________
(Co-Investor, if any)
Date: ________________________________________________________________________________
2.
By the Financial Intermediary of the Investor(s):
The undersigned, as authorized agent of the investor(s), after making sufficient inquiry of the investor(s), hereby
makes the certifications set forth above and executes this application on behalf of the investor(s).
________________________________________________________________________________
Name of Financial Intermediary
By: ____________________________________________________________________________
Name/Title
For completion by Introducing Broker (where applicable):
Broker Name:
Agent Number:
_______
North American Income Fund plc - 5
Declaration of residence outside the Republic of Ireland
Applicants resident outside the Republic of Ireland are required by the Irish Revenue Commissioners to make
the following declaration which is in a format authorised by them, in order to receive payment without
deduction of tax. It is important to note that this declaration, if it is then still correct, shall apply in respect of
any subsequent acquisitions of Shares. Applicants who are resident or ordinarily resident in the Republic of
Ireland but are not Irish Persons will need to make a separate declaration to that effect and should contact the
Administrator for the appropriate declaration form which will be deemed to form part of the application form.
Terms used in this declaration are defined in the Offering Circular.
Declaration on own behalf
I/we* declare that I am/we are* applying for the Shares on my own/our own behalf/on behalf of a company*
and that I am/we are/the company is* entitled to the Shares in respect of which this declaration is made and
that
• I am/we are/the company is* not currently resident or ordinarily resident in the Republic of Ireland,
And
• should I/we/the company* become resident in the Republic of Ireland I/we* will so inform you, in writing,
accordingly. (* Delete as appropriate)
Declaration as Intermediary
I/we* declare that I am/we are* applying for shares/units on behalf of persons:
•
who will be beneficially entitled to the shares/units; and
•
who, to the best of my/our* knowledge and belief, are neither resident nor ordinarily resident in
Ireland.
I/we* also declare that:
•
unless I/we* specifically notify you to the contrary at the time of application, all application for
shares/units made by me/us* from the date of this application will be made on behalf of such persons;
and
•
I/we* will inform you in writing if I/we* become aware that any person, on whose behalf I/we* holds
shares/units, becomes resident in Ireland.
*Delete as appropriate
North American Income Fund plc - 6
Name and address of applicant: _________________________________________________
___________________________________________________________________________
___________________________________________________________________________
Signature of applicant or authorised signatory :____________________________(Declarant)
Capacity of authorised signatory (if applicable):________________ Date: ________________
Joint applicants:
Names ______________________
Signatures_________________________
______________________
_________________________
Notes:
1.
Non-resident declarations are subject to inspection by the Irish Revenue Commissioners and it is a
criminal offence to make a false declaration.
2.
To be valid, the application form (incorporating the declaration required by the Irish Revenue
Commissioners) must be signed by the applicant. Where there is more than one applicant, each
person must sign. If the applicant is a company, it must be signed by the company secretary or
another authorised officer.
If the application form (incorporating the declaration required by the Irish Revenue Commissioners)
3.
is signed under power of attorney, a copy of the power of attorney must be furnished in support of the
signature.
North American Income Fund plc - 7
For the purposes of this Application Form, the following definitions will apply:
Irish Resident
•
•
•
in the case of an individual, means an individual who is resident in Ireland for tax purposes.
in the case of a trust, means a trust that is resident in Ireland for tax purposes.
in the case of a company, means a company that is resident in Ireland for tax purposes.
An individual will be regarded as being resident in Ireland for a twelve month tax year1 if s/he:
1.
2
spends 183 days or more in Ireland in that twelve month tax year; or
2.
3
has a combined presence of 280 days in Ireland, taking into account the number of days spent in Ireland in that
twelve month tax year together with the number of days spent in Ireland in the preceding twelve month tax year.
4
Presence in a twelve month tax year by an individual of not more than 30 days in Ireland will not be reckoned for the
purpose of applying the two year test. Presence in Ireland for a day means the personal presence of an individual at the
end of the day (midnight).
A trust will generally be Irish resident where all of the trustees are resident in Ireland.
A company which has its central management and control in Ireland is resident in Ireland irrespective of where it is
incorporated. A company which does not have its central management and control in Ireland but which is incorporated
in Ireland is resident in Ireland except where: •
the company or a related company carries on a trade in Ireland, and either the company is ultimately controlled by
persons resident in EU Member States or, in countries with which Ireland has a double taxation treaty, or the
company or a related company are quoted companies on a recognised Stock Exchange in the EU or in a taxation
treaty country
or
•
the company is regarded as not resident in Ireland under a double taxation treaty between Ireland and another
country.
It should be noted that the determination of a company’s residence for tax purposes can be complex in certain cases and
potential investors are referred to the specific provisions which are contained in Section 23A of the TCA.
1
2
3
4
The Irish tax year has been changed to a calendar year basis with effect from 1 January 2002. A consequence
of this change is that a short tax year applies from 6 April, 2001 to 31 December, 2001.
135 days for the tax year 6 April, 2001 to 31 December, 2001.
244 days in respect of the combined tax years, commencing on 6 April, 2000 and 6 April, 2001, and those
commencing on 6 April, 2001 and 1 January, 2002.
22 days for the tax year 6 April, 2001 to 31 December, 2001.
Ordinarily Resident in Ireland
Ordinarily Resident in Ireland, in the case of an individual, means an individual who is ordinarily resident in Ireland for
tax purposes and in the case of a unit trust, means a trust that is ordinarily resident in Ireland for tax purposes.
The term "ordinary resident" as distinct from "resident", relates to a person’s normal pattern of life and denotes
residence in a place with some degree of continuity.
An individual who has been resident in Ireland for three consecutive tax years becomes ordinarily resident with effect
from the commencement of the fourth tax year. For example, an individual who is resident in Ireland for the tax years:
North American Income Fund plc - 8
•
•
•
6 April 2000 to 5 April 2001;
6 April 2001 to 31 December 2001, and;
1 January 2002 to 31 December 2002
will become ordinarily resident with effect from 1 January 2003.
An individual who has been ordinarily resident in Ireland ceases to be ordinarily resident at the end of the third
consecutive year in which s/he is not resident. Thus, an individual who is resident and ordinarily resident in Ireland in
the tax year 1 January, 2002 to 31 December 2002 and departs from Ireland in that tax year will remain ordinarily
resident up to the end of the tax year 1 January 2005 to 31 December 2005.
The concept of a trust’s ordinary residence is somewhat obscure and is linked to its tax residence.
Intermediary
This means a person who: (a) carries on a business which consists of, or includes, the receipt of payments from an investment undertaking on
behalf of other persons, or
(b) holds units in an investment undertaking on behalf of other persons.
EU Savings Directive
Please tick Investor type:
1.Natural Person
2. Corporate
3. Nominee
4. Collective Investment Scheme
5. Charity
6. Trustee - Corporate (this to include individual trustees of all
approved pension schemes and bona fide charities only)
7. Pension Fund
8. Trustee – Individual
(all Trustee’s which are not as per 6. above)
9. Partnership (except for limited liability partnerships)
10. Limited Liability Partnership
11. Investment Club
Please state Tax Residency:
1.
Information required only from investors resident in the EU
If the Investor type is Natural Person and Tax Residency is an EU state (except Ireland) or a Dependent or Associated
Territory (defined as Jersey, Guernsey or and Isle of Man) please provide Identification Number:
In the absence of identification number please provide:
Date of birth:
Place of birth (country, and town):
If the Investor is a Trust with Individual Trustees (except for individual trustees approved pension schemes and bona
fide charities), Partnership (except for limited liability partnerships) or Investment Club and Tax Residency is an EU
state (except Ireland) or a Dependent or Associated Territory (defined as Jersey, Guernsey and the Isle of Man) please
provide name and address:
Name: _________________________________________________________________________
Address:
North American Income Fund plc - 9
The information relating to your investor type, tax residency and identification number (“the Information relating to the
Regulations”) is required by the Administrator / Custodian / Fund / Manager / Investment Manager for the purposes
complying with the provisions of the European Communities (Implementation of Council Directive 2003/48/EC of June
2003 on Taxation of Savings Income in the form of Interest Payments) Regulations 2003 (the “Regulations”). The
Administrator / Custodian / Fund / Manager / Investment Manager will disclose the Information relating to the
Regulations to the relevant tax authorities where required to do so pursuant to the Regulations. The Information relating
to the Regulations will only be used by the Administrator / Custodian / Fund / Manager / Investment Manager for the
purpose of complying with its obligations under the Regulations.
Confirmation of details:
Signed by:
Date
North American Income Fund plc - 10
North American Income Fund PLC
Bank of Ireland Administration Services Limited
New Century House, Mayor Street Lower
International Financial Services Centre
Dublin 1
PLEASE FORWARD
PLEASE
FORWARDVIA
VIAFACSIMILE
FACSIMILETO
TO
ATTN: Patrice
JacksonororAnne
AnneMoore
Moore
ATTN:
Ian McGrath
Tel: +353
+353 11 673
+353
1 607
1978
Tel:
6737557
7557 Fax:
Fax:
+353
1 607
1978
North American Income Fund
Top- Up Form
Account Name:
Account Number (As Per Contract Note)
Registered Address:
Mailing Address (if different to Registration Address )
This Top Up form should be received by 21.00 GMT on dealing day minus 1, otherwise the deal will be
held over to the next dealing day.
Dealing Date:
Settlement Date:
Please invest on our behalf the following units or cash equivalent in the USD Liquidity fund as follows:
Fund Name
North American Income Fund
A
1177
B
Amount
Units
Payment Currency
Bank Account Details for Subscriptions Payments
Name of Bank
Chase Manhattan Bank , New York
Swift code
CHASUS33
Account Number 400235749
Account Name
The Governor & Company of the Bank of Ireland
Reference
Shareholder Name and Fund Name
I/We agree to be bound by the terms of the original application form.
_____________________________
Authorised Signatory
_____________________________
Authorised Signatory
For Bank of Ireland Office Use Only:
Investor No
Fund No:
DD:
S.D:
Input:
Fund No:
DD:
S.D:
Reviewed:
Contract:
Flows:
Fds Posit:
Sig Checked:
Orig.Rec:
North American Income Fund plc - 11
North American Income Fund PLC
Bank of Ireland Administration Services Limited
New Century House, Mayor Street Lower
International Financial Services Centre
Dublin 1, Ireland
PLEASE FORWARD
PLEASE
FORWARDVIA
VIAFACSIMILE
FACSIMILETO
TO
JacksonororAnne
AnneMoore
Moore
ATTN: Patrice
Ian McGrath
Tel: +353
+353 11 673
+353
1 607
1978
Tel:
6737557
7557 Fax:
Fax:
+353
1 607
1978
North American Income Fund
Redemption Request Form
Account Name:
Account Number (As Per Contract Note):
Registered Address:
Mailing Address (if different to Registration Address )
This
RequestForm
Formshould
shouldbebereceived
receivedbyby21.00
21.00GMT
GMT
dealing
minus
1, otherwise
This Redemption
Redemption Request
onon
dealing
dayday
minus
3, otherwise
the deal will
will be
be held
held over
over to
tothe
thenext
nextdealing
dealingday.
day.
Dealing Date:
Settlement Date:
Please redeem on our behalf the following units or cash equivalent in the USD Liquidity fund as follows:
Fund Name
North American Income Fund
A
1177
B
Amount
Units
Payment Currency
USD
Bank Account Details for Payment of Redemption Proceeds
Name of Bank
Swift code
Account Number
Account Name
Reference
I/We agree to be bound by the terms of the original application form.
_____________________________
Authorised Signatory
_____________________________
Authorised Signatory
For Bank of Ireland Office Use Only:
Investor No
Fund No:
DD:
S.D:
Input:
Fund No:
DD:
S.D:
Reviewed:
Contract:
Flows:
Fds Posit:
Sig Checked:
Orig.Rec:
North American Income Fund plc - 12
ANTI-MONEY LAUNDERING (AML) REQUIREMENTS
Identifying the Client Type
AML Requirements by Client Type of Client
FAST TRACK – Minimum Initial Requirements
Corporate Investor
Pension Investor
Trust Investor
North American Income Fund plc - 13
CLIENT TYPE
Due to anti-money laundering requirements operating within their respective jurisdictions, the Company or
its delegates may require further identification of the applicant(s) before the application can be processed.
Failure to provide the required documentation will delay the processing of your application or may result in
it being rejected. Where certification is noted, this must be carried out by a Notary Public, Solicitor or
Embassy and a copy of their appointment included with the documentation. All forms and
supporting documents need to be submitted in English.
Please categorise yourself under one of the headings Type A to Type F and provide the information
as outlined in the relevant category. Note that this application may not be processed if this section is
not complete and relevant documentation provided.
Designated Body in a FATF-member jurisdiction
[
] Type A
A Designated Body is defined as an individual or other entity, which is regulated in respect of banking or
investment services in a country, which is a member of the European Union or the Financial Action Task
Force ("FATF"). We require copies of correspondence confirming your registration with an appropriate
regulatory body.
If you are a Designated Bodies please fully complete and return the attached Appendix AML-A as
part of your completed application form.
Individual domiciled in a FATF-member jurisdiction
[
] Type B
An Individual is a private investor who is executing this Subscription Agreement for his own behalf and
not, in any way, as representative of any other party.
Individuals domiciled in a FATF-member jurisdiction should fully complete and return the attached
Appendix AML-B1, along with the additional documentation that this appendix requests, as part of their
completed application form.
Individual domiciled in a Non-FATF-member jurisdiction
[
] Type B2
Individuals domiciled in a non-FATF-member jurisdiction should fully complete and return the attached
Appendix AML-B2, along with the additional documentation that this appendix requests, as part of their
completed application form.
Corporate
[
] Type C
Corporations from a FATF member jurisdiction should complete and return Appendix AML-C1 as part of
their completed application form.
Corporations from a non-FATF member jurisdiction should complete and return Appendix AML-C2 as part
of their completed application form.
North American Income Fund plc - 14
(Continued from page 1)
Trusts
[
] Type D
Trusts where the Trustee is Designated Body in a FATF-member jurisdiction should complete and return
Appendix AML-D1 as part of their completed application form.
Trusts where the Trustee is not a Designated Body in a FATF-member jurisdiction should complete and
return Appendix AML-D2 as part of their completed application form.
Limited Partnership (LP), Limited Liability Corporations (LLC), Clubs and Societies [
] Type E
FATF based LP/LLC and Clubs/Societies should complete and return Appendix AML-E1 as part of their
completed application form.
Non-FATF based LP/LLC should complete and return Appendix AML-E2 as part of their completed
application form.
Pension Funds, Charities and Local Authorities
[
] Type F
Pension Funds and Charities with regulators in FATF member countries should complete and return
Appendix AML-F1 as part of their completed application form.
Pension Funds and Charities with regulators in non-FATF member countries should complete and return
Appendix AML-F2 as part of their completed application form.
Government Bodies and Local Authorities should complete and return Appendix AML-F3 as part of their
completed application form.
Government Bodies and Local Authorities in non-FATF member countries should complete and return
Appendix AML-F4 as part of their completed application form.
North American Income Fund plc - 15
CLIENT TYPE – ANTI-MONEY LAUNDERING REQUIREMENTS
Appendix AML-A
Designated Body in FATF Jurisdiction
I/We confirm that the investor is a Designated Body in a FATF Jurisdiction
I/We hereby declare that they are licensed by the following regulatory authority, under the laws of the country stated and are
thereby subject to regulations and/or guidelines which, to the best of my/our knowledge and understanding, are in accordance
with the Financial Action Task Force Recommendations on the avoidance of money laundering.
Registered Name and Address of Designated Body
1.
Details of Regulator
(a) Name and address of the Regulator
(b) Regulation/reference number (if applicable)
Or
2.
Proof of regulatory status received
Regulators Website where available
We confirm having sighted, where applicable, original documentation for the purposes of completing this questionnaire.
Furthermore, copies of this documentation are attached to this completed questionnaire
Authorised Signature:
Print Name & Position:
Date:
North American Income Fund plc - 16
AML Checklist -B1
Individual from a FATF Jurisdiction
An Individual is a private investor who is executing this Subscription Agreement for his own behalf and not, in any way, as
representative of any other party.
Name:
Residential address:
Occupation:
Date of birth:
If joint holders the second applicant details of the second investor should be completed below. Please note for the purpose of
anti money laundering each party of a joint application will be treated as separate individuals.
Name:
Residential address:
Occupation:
Date of birth:
The following documentation has been provided for each applicant: either: ( i ) , ( ii ) and ( iii) OR ( iv )
#
Documentation
i)
A certified copy of an official identification document, e.g. passport, driving licence or national identity card
of good quality. This identification must include a photograph and the investor’s signature.
ii)
Evidence of proof of address, e.g. a recent utility bill should be provided and certified as above.
iii)
An original or certified copy of a recent bank statement from a bank within a FATF jurisdiction. The
statement should relate to the settlement account details for the investor, the name and address on the
statement should match the registered address of the investor.
OR
iv)
Received
A letter of introduction from a Designated Body within FATF that is regulated for AML purposes. This letter
should confirm the registered name and address of the investor and that the Designated Body is satisfied as to
the identity of the client and will provide copies of such evidence if requested to do so. Where the document is
not in English, a certified English translation must be provided
We confirm having sighted, where applicable, original documentation for the purposes of completing this questionnaire.
Furthermore, copies of this documentation are attached to this completed questionnaire
Authorised Signature:
Print Name & Position:
Date:
North American Income Fund plc - 17
AML Checklist -B2
Individual from a Non-FATF Jurisdiction
An Individual is a private investor who is executing this Subscription Agreement for his own behalf and not, in any way, as
representative of any other party.
Name:
Residential address:
Occupation:
Date of birth:
If joint holders, the details of the second investor should be completed below: Please note: for the purpose of anti money
laundering each party of a joint application will be treated as separate individuals.
Name:
Residential address:
Occupation:
Date of birth:
The following documentation has been provided for each applicant:
#
Documentation
Received
i)
A certified copy of an official identification document, e.g. passport, driving licence or national identity card
of good quality. This identification must include a photograph and the investor’s signature.
ii)
Evidence of proof of address, e.g. a recent utility bill should be provided and certified as above.
iii)
A recent original or certified bank statement from a reputable Financial Institution. A reputable Financial
Institution can be defined as a well-known multi-national Institution with a head office located within a FATF
member jurisdiction. The statement should relate to the settlement account details for the investor; the name
and address on the statement should match the registered address of the investor.
We confirm having sighted, where applicable, original documentation for the purposes of completing this questionnaire
Furthermore, copies of this documentation are attached to this completed questionnaire
Authorised Signature:
Print Name & Position:
Date:
North American Income Fund plc - 18
AML Checklist -C1
Corporate Investor from FATF Jurisdiction
Subscribers Corporate Name:
Subscribers address:
Country of Incorporation:
Incorporation/Registration number (if applicable):
A. Listed Corporations
B.
The following documentation has been provided:
Received
i)a
We confirm that the corporation is listed on a recognized Stock Exchange within a FATF member
country and regulated accordingly.
i)b.
We confirm having obtained proof of listing on the said stock exchange.
OR
ii)a
ii)b.
We confirm that that the corporation is a 100% subsidiary of a corporation listed on a recognized
Stock Exchange within a FATF member country and that the listed corporation has confirmed this in
writing.
We confirm having obtained proof of listing on the said stock exchange of the listed parent
corporation as per i) above and hold details on file.
C. Non Listed Corporations
The following documentation has been provided:
Received
i)
Certified copy of the Certificate of Incorporation (or Equivalent)
ii)
Certified copy of Memorandum & Articles of Association (or Equivalent) or latest published report of
accounts
iii)
A full list of all Directors, including date of birth, occupation, residential and business address
iv)
Verification of identity of at least two individual Directors - please refer to AML Checklist-B1 for
the documentation required
v)
Authorised signatory list of those entitled to instruct on this investment
vi)
As an alternative to items: (i), (ii) & (iv) please provide a Letter of Introduction from a Financial
Institution within FATF that is regulated for AML purposes. This letter should be on official headed
paper and confirm the registered name and address of the Corporation and that the Financial
Institution is satisfied as to the identity of the Corporation and will provide full details of Directors
names, identities & addresses if required.
We confirm having sighted, where applicable, original documentation for the purposes of completing this questionnaire.
Furthermore, copies of this documentation are attached to this completed questionnaire
Authorised Signature:
Print Name & Position:
Date:
North American Income Fund plc - 19
Appendix AML-C2
Corporate Investor from Non- FATF Jurisdiction
Subscribers Corporate Name:
Subscribers address:
Country of Incorporation:
Incorporation/Registration number (if applicable):
The following documentation has been provided:
Received
i)
Certified copy of the Certificate of Incorporation
ii)
Certified copy of Memorandum & Articles of Association (or Equivalent) or latest published report of
accounts
iii)
A full list of all Directors, including date of birth, occupation, residential and business address
iv)
Verification of identity of all Directors with signing authority over the account - please refer to AML
Checklist-B2 for the documentation required
v)
Authorised signatory list of those entitled to instruct on this investment
vi)
As an alternative to items: (i), (ii) & (iv) please provide a Letter of Introduction from a Financial
Institution within FATF that is regulated for AML purposes. This letter should be on official headed
paper and confirm the registered name and address of the Corporation and that the Financial
Institution is satisfied as to the identity of the Corporation and will provide full details of Directors
names, identities & addresses if required.
We confirm having sighted, where applicable, original documentation for the purposes of completing this questionnaire.
Furthermore, copies of this documentation are attached to this completed questionnaire
Authorised Signature:
Print Name & Position:
Date:
North American Income Fund plc - 20
Appendix AML-D1
Trusts in FATF Jurisdiction
For Trusts where the Trustee is Designated Body in a FATF Jurisdiction
Name of Trust
Registered Name and Address of Trustee
I/We hereby declare that the trustees are licensed by the following regulatory authority, under the laws of the country stated,
and are thereby subject to regulations and/or guidelines which, to the best of my/our knowledge and understanding, are in
accordance with the Financial Action Task Force Recommendations on the avoidance of money laundering.
1.
Details of Regulator
(c) Name and address of the Regulator
(d) Regulation/reference number (if applicable)
Or
2. Proof of regulatory status received and attached
Regulators Website where available
We confirm having sighted, where applicable, original documentation for the purposes of completing this questionnaire.
Furthermore, copies of this documentation are attached to this completed questionnaire
Authorised Signature:
Print Name & Position:
Date:
North American Income Fund plc - 21
Appendix AML-D2
Trusts in Non-FATF Jurisdiction
Trusts, where the Trustee is not a Designated Body, in a FATF jurisdiction.
Name of Trust
Address of Trust
The following documentation has been provided for each applicant:
#
Documentation
Received
i)
A list of trustees, governors and board members; and their occupations, addresses and date of birth.
ii)
A certified copy of the Trust Deed.
iii)
A list of persons authorised to instruct on this investment (including signature specimens).
iv)
A certified list of the actual beneficiaries of the Trust (this is also known as the wish list), or written
confirmation from Trustees that there are no anonymous principals.
v)
Additional information may be requested to identify the beneficiaries of the Trust and board members in
accordance with Appendix AML-B2.
iv)
As an alternative to items: (ii) & (iv) please provide a letter of introduction from a Designated Body within
FATF that is regulated for AML purposes. This letter should confirm the registered name and address of the
investor and that the Designated Body is satisfied as to the identity of the client and will provide copies of
such evidence if requested to do so. Where the document is not in English, a certified English translation must
be provided
We confirm having sighted, where applicable, original documentation for the purposes of completing this questionnaire.
Furthermore, copies of this documentation are attached to this completed questionnaire
Authorised Signature:
Print Name & Position:
Date:
North American Income Fund plc - 22
Appendix AML-E1
Limited Partnerships (LP), Limited Liability Corporations (LLC), Clubs and Societies in FATF Jurisdiction
Limited Partnerships / Limited Liability Corporations / Clubs / Societies from a FATF member jurisdiction.
Name of LP/LLC/Club/Society
Registered Address
The following documentation has been provided for each applicant:
#
Documentation
i)
Certified copy of the Partnership / LLC Agreement or Club/Society Charter
ii)
A list of persons authorised to instruct on this investment (including signature specimens).
iii)
Verification of identity of the General Partner / Managing Member in relation to LP/LLC or Chairman,
Treasurer and Secretary in relation to Club/Society. Please refer to Appendix AML-B1 for the documentation
required.
OR
iv)
Received
As an alternative: The administrator may accept a "Bank Introductory Letter" from a FATF based Bank at
which the LP / LLC/ Club/Society main banking accounts are held.
This letter must be in English, on the Bank's Official Letter-headed paper and should confirm their
relationship with the LP / LLC/Club/Society entity and those they are fully satisfied that they have completed
all the appropriate anti-money laundering / client identification checks on the entity and will provide copies of
such evidence if requested to do so.
We confirm having sighted, where applicable, original documentation for the purposes of completing this questionnaire.
Furthermore, copies of this documentation are attached to this completed questionnaire
Authorised Signature:
Print Name & Position:
Date:
North American Income Fund plc - 23
Appendix AML-E2
Limited Partnerships (LP), Limited Liability Corporations (LLC) in Non- FATF Jurisdiction
Name of LP/LLC
Registered Address
The following documentation has been provided for each applicant:
#
Documentation
Received
i)
Certified copy of the Partnership / LLC Agreement or Club/Society Charter
ii)
A list of persons authorised to instruct on this investment (including signature specimens).
iii)
Verification of identity of all underlying investors. Please refer to Appendix AML-B2 for the documentation
required.
We confirm having sighted, where applicable, original documentation for the purposes of completing this questionnaire.
Furthermore, copies of this documentation are attached to this completed questionnaire
Authorised Signature:
Print Name & Position:
Date:
North American Income Fund plc - 24
Appendix AML-F1
Pension Funds and Charities within a FATF Jurisdiction
Registered Name of Pension Fund/Charity
Registered Address of Pension Fund/Charity
1.
Details of Regulator
(a) Name and address of the Regulator or Tax Authority
(b) Regulation/reference number (if applicable)
Regulators Website where available
The following documentation has been provided for each applicant:
#
Documentation
Received
i)
A certified copy of the original approval from the Regulator / Tax Authority
ii)
A list of persons authorised to instruct on this investment (including signature specimens).
iii)
OR
iv)
A list of trustees, governors and board members including their occupations, addresses and date of birth;
As an alternative: The administrator may accept a "Bank Introductory Letter" from a FATF based Bank at
which the LP / LLC/ Club/Society main banking accounts are held.
This letter must be in English, on the Bank's Official Letter-headed paper and should confirm their
relationship with the LP / LLC/Club/Society entity and those they are fully satisfied that they have completed
all the appropriate anti-money laundering / client identification checks on the entity and will provide copies of
such evidence if requested to do so.
We confirm having sighted, where applicable, original documentation for the purposes of completing this questionnaire.
Furthermore, copies of this documentation are attached to this completed questionnaire
Authorised Signature:
Print Name & Position:
Date:
North American Income Fund plc - 25
Appendix AML-F2
Pension Funds and Charities – Non FATF Jurisdiction
Registered Name of Pension Fund/Charity
Registered Address of Pension Fund/Charity
1.
Details of Regulator
(a) Name and address of the Regulator or Tax Authority
(b) Regulation/reference number (if applicable)
Regulators Website where available
The following documentation has been provided for each applicant:
#
Documentation
Received
i)
A certified copy of the original approval document / letter from the Regulator / Tax Authority listing trustees /
Governor and Board Members
ii)
A list of persons authorised to instruct on this investment (including signature specimens).
iii)
A list of Trustees / Governors / Board Members, their occupation, address and date of birth should be supplied
iv)
Verification of identity of at least two of the above. Please refer to Appendix AML-B2 for the documentation
required.
We confirm having sighted, where applicable, original documentation for the purposes of completing this questionnaire.
Furthermore, copies of this documentation are attached to this completed questionnaire
Authorised Signature:
Print Name & Position:
Date:
North American Income Fund plc - 26
Appendix AML-F3
Government Bodies and Local Authorities
Local Authorities from a FATF member jurisdiction should complete and return Appendix AML-F3 as part of their
completed application form
Name of Local Authority
Registered Address of Local Authority
The following documentation has been provided for each applicant:
#
Documentation
Received
i)
A full list of persons authorised to instruct on this investment (including signature specimens).
ii)
Their occupations, addresses and date of birth.
iii)
Verification of identity of at least two of the above. Please refer to Appendix AML-B2 for the documentation
required.
We confirm having sighted, where applicable, original documentation for the purposes of completing this questionnaire.
Furthermore, copies of this documentation are attached to this completed questionnaire
Authorised Signature:
Print Name & Position:
Date:
North American Income Fund plc - 27
Appendix AML-F4
Government Bodies and Local Authorities – Non FATF
Name of Local Authority
Registered Address of Local Authority
The following documentation has been provided for each applicant:
#
Documentation
Received
i)
Declaration from Government Ministry or other relevant documentation confirming they are a legal
government entity duly signed and sealed in original or relevant documentation, necessary to establish the
identity and bona fides of the investor.
ii)
Declaration from Government Ministry that this entity follows the requirements and has the right to invest in
this product
iii)
A list of Members / Governors / Officials, their occupations, addresses and dates of birth
iv)
Verification of identity of at least two of the above. Please refer to Appendix AML –B2 for the documentation
required.
iii)
A full list of persons authorised to instruct on this investment (including signature specimens).
We confirm having sighted, where applicable, original documentation for the purposes of completing this questionnaire.
Furthermore, copies of this documentation are attached to this completed questionnaire
Authorised Signature:
Print Name & Position:
Date:
North American Income Fund plc - 28
FAST TRACK
Minimum Initial Requirements - Corporate Investor from Non-FATF Jurisdiction.
Yes
No
Fax of application form completed and executed in full.
Completed Appendix AML-C2
Copy of Certificate of Incorporation or equivalent
Copy of Memorandum and Articles of Association or equivalent.
Where there are more than 20 pages Copies of the first two and
last two pages of each document.
Full list of all directors
A completed Appendix AML-B2 for at least two directors of the
investing party authorised to instruct on this investment.
Fax copies of all items listed on Appendix AML-B2
Copy of signatory list if parties other than those signing the
application form.
CABEI AML Intro Letter – Sub Agent
CABEI AML Intro Letter – Placement Agent
Director Approval of Investor
Note: These requirements are only for the temporary purpose of having sufficient documentation to open
and transact the initial subscription of a new investor. Within 30 days of the dealing date, the complete
documentation must be received in full with all applicable certifications and translations as per the
following. Should this not be in place, NO further transactions of any type will be permitted over the
account until such time as all documentation is in order. This must be accepted in full by the Directors of
the fund and Bank of Ireland Securities Services Limited.
FOR CORPORATE DOCUMENTATION ONLY
It should be noted that the Company Registrar can provide the certification and translation of the corporate
documentation but not for individual information. In addition, a summary sheet, as per attached, with a full
and certified copy of the document attached will be acceptable in place of a full translation for the
corporate documents.
Corporate documents are Certificate of Incorporation, Memorandum and Articles of Association or
Published report of accounts.
North American Income Fund plc - 29
Confirmation of Translation Details
I/we
hereby confirm the following details are contained within the attached
corporate/trust documents which have been certified by ourselves as true copies of the
original documents.
Full legal name of the company/trust:
Jurisdiction of incorporation/constitution:
Incorporation/constitution date of company/trust:
Full legal address of company/trust:
Body issuing corporate/trust documentation
Full legal names of all current directors/trustees
are: (please attach an appendix if there is insufficient
space)
I/we hereby confirm as per the
incorporation/constitutional documents the above
noted company is eligible to subscribe and deal in
shares of North American Income Fund plc
I/we hereby affix our government seal and confirm that the above information is correct
and contained in the corporate/trust documentation noted above.
Yours truly,
Signed and sealed this
Name & Title:
day of
, 20
by
Name & Title:
North American Income Fund plc - 30
FAST TRACK
Minimum Initial Requirements – Pension Investor from Non-FATF Jurisdiction.
Yes
No
Fax of application form completed and executed in full.
Completed Appendix AML-F2
Copy of a list of trustees, governors and board members, their
occupations, addresses and dates of birth.
Verification of identity of at least two of the above
A copy of the original approval document / letter from the
Regulator / Tax Authority listing trustees / Governor and Board
Members
Full list persons authorised to instruct on this investment.
CABEI AML Intro Letter – Sub Agent
CABEI AML Intro Letter – Placement Agent
Director Approval of Investor
Note: These requirements are only for the temporary purpose of having sufficient documentation to open
and transact the initial subscription of a new investor. Within 30 days of the dealing date, the complete
documentation must be received in full with all applicable certifications and translations as per the
following page. Should this not be in place, NO further transactions of any type will be permitted over the
account until such time as all documentation is in order. This must be accepted in full by both the Directors
of the fund and Bank of Ireland Securities Services Limited.
FOR CORPORATE DOCUMENTATION ONLY
It should be noted that the Company Registrar may provide the certification and translation of the corporate
documentation but not for individual information. In addition, a summary sheet, as per attached, with a full
and certified copy of the document attached will be acceptable in place of a full translation for the
corporate documents.
Corporate documents are: Original approval and appointment of Trustees, Governors and Board Members.
North American Income Fund plc - 31
Confirmation of Translation Details
I/we
hereby confirm the following details are contained within the attached
corporate/trust documents which have been certified by ourselves as true copies of the
original documents.
Full legal name of the company/trust:
Jurisdiction of incorporation/constitution:
Incorporation/constitution date of company/trust:
Full legal address of company/trust:
Body issuing corporate/trust documentation
Full legal names of all current directors/trustees
are: (please attach an appendix if there is insufficient
space)
I/we hereby confirm as per the
incorporation/constitutional documents the above
noted company is eligible to subscribe and deal in
shares of North American Income Fund plc
I/we hereby affix our government seal and confirm that the above information is correct
and contained in the corporate/trust documentation noted above.
Yours truly,
Signed and sealed this
Name & Title:
day of
, 20
by
Name & Title:
North American Income Fund plc - 32
FAST TRACK
Minimum Initial Requirements - Corporate Investor from Non-FATF Jurisdiction.
Yes
No
Fax of application form completed and executed in full.
Completed Appendix AML-C2
Copy of Certificate of Incorporation or equivalent
Copy of Memorandum and Articles of Association or equivalent.
Where there are more than 20 pages Copies of the first two and
last two pages of each document.
Full list of all directors
A completed Appendix AML-B2 for at least two directors of the
investing party authorised to instruct on this investment.
Fax copies of all items listed on Appendix AML-B2
Copy of signatory list if parties other than those signing the
application form.
CABEI AML Intro Letter – Sub Agent
CABEI AML Intro Letter – Placement Agent
Director Approval of Investor
Note: These requirements are only for the temporary purpose of having sufficient documentation to open
and transact the initial subscription of a new investor. Within 30 days of the dealing date, the complete
documentation must be received in full with all applicable certifications and translations as per the
following. Should this not be in place, NO further transactions of any type will be permitted over the
account until such time as all documentation is in order. This must be accepted in full by the Directors of
the fund and Bank of Ireland Securities Services Limited.
FOR CORPORATE DOCUMENTATION ONLY
It should be noted that the Company Registrar can provide the certification and translation of the corporate
documentation but not for individual information. In addition, a summary sheet, as per attached, with a full
and certified copy of the document attached will be acceptable in place of a full translation for the
corporate documents.
Corporate documents are Certificate of Incorporation, Memorandum and Articles of Association or
Published report of accounts.
North American Income Fund plc - 33
Confirmation of Translation Details
I/we
hereby confirm the following details are contained within the attached
corporate/trust documents which have been certified by ourselves as true copies of the
original documents.
Full legal name of the company/trust:
Jurisdiction of incorporation/constitution:
Incorporation/constitution date of company/trust:
Full legal address of company/trust:
Body issuing corporate/trust documentation
Full legal names of all current directors/trustees
are: (please attach an appendix if there is insufficient
space)
I/we hereby confirm as per the
incorporation/constitutional documents the above
noted company is eligible to subscribe and deal in
shares of North American Income Fund plc
I/we hereby affix our government seal and confirm that the above information is correct
and contained in the corporate/trust documentation noted above.
Yours truly,
Signed and sealed this
Name & Title:
day of
, 20
by
Name & Title:
North American Income Fund plc - 34
COUNTRY MEMBERS OF THE FINANCIAL ACTION
TASK FORCE (FATF) ON MONEY LAUNDERING
North American Income Fund plc - 35
Members of Financial Action Task Force (FATF) on Money Laundering
Argentina
Australia
Austria
Belgium
Brazil
Canada
Denmark
European Commission
Finland
France
Germany
Greece
Gulf Co-operation Council
Hong Kong, China
Iceland
Ireland
Italy
Japan
Luxembourg
Mexico
Kingdom of the Netherlands
New Zealand
Norway
Portugal
Russian Federation
Singapore
South Africa
Spain
Sweden
Switzerland
Turkey
United Kingdom
United States
Central American Bank for Economic Integration
North American Income Fund plc - 36
MONEY LAUNDERING ASSURANCE LETTER
FOR SUB-AGENTS
North American Income Fund plc - 37
Date:
Central American Bank for Economic Integration
Apardado Postal 772
Tegucigalpa, Honduras
To Central American Bank for Economic Integration “the Company”
Re:
Verification of Customer Identity
Compliance with Applicable Laws and Regulations
Re __________________________________ (“the Investor”)
Dear Sirs,
We write to confirm the following in connection with the Investor which we are introducing
to the Company: _____________________________________________
1.
The Investor is known to us and we will retain sufficient information on file to verify the
identity of the Investor for Anti Money Laundering verification purposes as per FATF and
CFATF guidelines.
2.
The full residential address of the Investor will be as stated on the initial application
form accompanying this letter
Any correspondence copied by us to you will contain authorized signatures of the
Investor.
We have provided you with copies of all documents and information as per the agreed
checklist
3.
4.
We hereby undertake to notify you, Bank of Ireland Securities Services, and the appropriate
regulatory authorities (including Ireland’s International Financial Services Regulatory
Authority) of any concerns that we may have in connection with the Investor in the context of
relevant money laundering legislation/regulations forthwith in the event any suspicious
circumstances relating to the Investor comes to our attention.
In addition, we confirm that in carrying out our functions as Placement Agent to the
Company we will observe and comply with the provisions of the Criminal Justice Act 1994
and the Criminal Justice, Miscellaneous Provisions Act, 1997, FATF the Articles of
Association of the Company, the Prospectus relating to the Company (as amended from time
to time) and any other such document relating to the Company and any applicable laws,
regulations, rules and practices of any relevant jurisdiction from time to time.
Signed: __________________________
Print Name: __________________________
Authorized Party
__________________________
(Specify capacity in which you are signing, e.g. partner, director, authorized signatory)
Name of Sub-Agent: __________________________
Business Address: __________________________
__________________________
__________________________
North American Income Fund plc - 38
North American Income Fund plc - 39
North American Income Fund plc - 40
North American Income Fund plc - Deutsche Americas Bond Fund
ANNUAL REPORT &
AUDITED FINANCIAL STATEMENTS
For the year ended 31 December 2008
North American Income Fund plc - Deutsche Americas Bond Fund
Contents
Annual Report and Audited
Financial Statements 2008
Page
Organisation
1
Background to the Company
2
Investment Manager's Report
4
Directors' Report
7
Custodian's Report
10
Independent Auditor's Report
11
Profit & Loss Account
13
Balance Sheet
14
Statement of Changes in Net Assets Attributable
to Holders of Redeemable Participating Shares
15
Notes to the Financial Statements
16
Schedule of Investments
33
Schedule of Portfolio Changes (Unaudited)
35
North American Income Fund plc - Deutsche Americas Bond Fund
Annual Report and Audited
Financial Statements 2008
Organisation
Registered Office of the Company
25/28 North Wall Quay
Dublin 1
Ireland
Directors of the Company
Walter Dostmann (German) (Chairman)
Investment Manager
DWS Finanz-Service GmbH
Mainzer Landstrasse 178-190
60327 Frankfurt am Main
Germany
Directors from Central American Bank for Economic
Integration:
Alejandro Rodriguez (Costa Rican)
Nick Rischbieth Glöe (Honduran)
Directors from Deutsche Asset Management Americas:
Paul Schubert (American)
Directors from DWS Finanz-Service GmbH:
Markus Kohlenbach (German)
Administrator, Registrar
and Transfer Agent
Bank of Ireland Securities Services Limited
New Century House
Mayor Street Lower
International Financial Services Centre
Dublin 1
Ireland
Other Directors:
Per Åke Rydberg (Swedish) (Irish Resident)
Michael Greene (Irish)
Jaime Chavez (Honduran)
Secretary
Goodbody Secretarial Limited
North Wall Quay
International Financial Services Centre
Dublin 1
Ireland
Custodian
The Governor and Company of the Bank of Ireland
Head Office:
Lower Baggot Street
Dublin 2
Ireland
Consultant
PCS Global Advisory Services LLC
614 King Avenue
City Island
New York
NY 10464-1111
USA
Place of Business:
New Century House
Mayor Street Lower
International Financial Services Centre
Dublin 1
Ireland
Independent Auditors
KPMG
1 Harbourmaster Place
International Financial Services Centre
Dublin 1
Ireland
Legal Advisor
Sponsoring Broker
A&L Goodbody
North Wall Quay
International Financial Services Centre
Dublin 1
Ireland
Registered No: 186436
1
North American Income Fund plc - Deutsche Americas Bond Fund
Annual Report and Audited
Financial Statements 2008
Background to the Company
Description
North American Income Fund plc ("the Company"), incorporated on 26 March 1992 in Dublin, Ireland with
registered number 186436, is a designated, limited liability, open-ended investment Company with variable capital. It
is an umbrella Company entitled to issue several classes of Shares to be invested in several portfolios. The Company
has issued Shares in the Deutsche Americas Bond Fund (the 'Fund'), which is the only current fund. The Company is
administered by Bank of Ireland Securities Services Limited. The Investment Manager, DWS Finanz-Service GmbH,
is an indirect subsidiary of Deutsche Bank AG.
The Company is domiciled in Ireland. It is authorised in Ireland as an investment company and is a designated
investment company pursuant to Section 256 of the Companies Act, 1990, of Ireland and is supervised by the
Financial Regulator.
Investment Objective and Policy
The Company's investment objective is to generate a high level of current income along with positive real rates of
return. The Company seeks to achieve this objective by investing in a portfolio of fixed income securities
denominated in various currencies, utilising a disciplined investment approach that emphasises preservation of capital
through risk control. Investment will generally be limited to fixed income and related securities issued by sovereign
issuers, their agent and instrumentalities, corporate issuers, supranational issuers, quasi-governmental issuers and any
other issuers deemed fit for investment by the Board of Directors, or a committee thereof, of the countries comprising
the geographical region known as the Americas, composed of North America, Central America, South America and
the Caribbean. These countries include, but are not limited to: the United States, Canada, Mexico, Argentina, Brazil,
Chile, Colombia, Venezuela, Ecuador, Peru, Bolivia, Uruguay, Paraguay and Panama. The Company may also invest
in loan participation.
The Fund's investment and borrowing restrictions are detailed in a Supplement to the Offering Circular issued on 24
July 2007. Although the Fund is not a UCITS (Undertakings for the Collective Investment of Transferable Securities)
fund, the Directors have resolved to apply the restrictions on investment and borrowing which apply to UCITS funds
to the Fund as a consequence of European Union directives.
Investment Management
DWS Finanz-Service GmbH serves as Investment Manager pursuant to an investment management agreement dated
31 December 2004.
Net Asset Value
The Net Asset Value of the Fund is calculated daily for every day that is a business day in Dublin and New York. The
Net Asset Value of the Fund is calculated by dividing the value of the Fund's Net Assets (the value of its assets less
its liabilities) by the total number of Class A Shares outstanding. All securities held by the Fund, for which market
quotations are readily available, are valued at the closing price on the primary exchange quoted for the securities, but
if last current bid price is available, the bid price is used. Debt securities are valued by independent pricing services
approved by the Trustees of the Fund.
2
North American Income Fund plc - Deutsche Americas Bond Fund
Annual Report and Audited
Financial Statements 2008
Background to the Company (Continued)
Net Asset Value (Continued)
If the pricing services are unable to provide valuations, the securities are valued at the most recent bid quotation or
evaluated price as applicable, obtained from a broker-dealer. Such service may use various pricing techniques, which
take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics
and other data, as well as broker quotes. All other securities and assets, for which market quotations are not readily
available, are taken at fair value as determined in good faith by the Investment Manager, with the approval of the
Custodian, although the actual calculation may be done by other competent and responsible persons. Any assets or
liabilities initially expressed in currencies other than US Dollars, are translated into US Dollars at the closing rate of
exchange quoted by a recognised pricing service. The Fund's Net Asset Value per Share is published five times per
week in the Financial Times.
Issue and Repurchase of Shares
The procedures for the issue and repurchase of shares are described in detail in the revised Offering Circular dated 1
January 2005, and subsequent supplements to the Offering Circular. The Fund's Dealing Day is every day that is a
business day in Dublin and New York.
Issue of Shares
Allotments of Shares are normally made with effect from a Dealing Day against applications received in Dublin by
the Administrator by 9:00pm Dublin time on the preceding Dealing Day. Requests for the purchase of Shares may be
made by facsimile, email or in writing to the Administrator.
Repurchase of Shares
Requests for the repurchase of Shares must be received by the Administrator by 9:00pm Dublin time on the preceding
Dealing Day and will then normally be dealt with on the following Dealing Day. Requests for the repurchase of
Shares may be made by facsimile, by email or in writing to the Administrator.
Published Information
Shareholders will receive audited annual and unaudited semi-annual Reports of the Company on request. Notices of
general meetings will be sent to Shareholders at least twenty-one days prior to meetings. The Net Asset Value per
Share and dividend announcements, if any, are published in the Financial Times. The subscription and redemption
prices may be obtained from the registered office of the Company.
A statement of changes in the composition of the portfolio during the year will be made available to Shareholders on
receipt of a written request.
Past performance is not necessarily a guide to future performance. Income from the investment may fluctuate in value
in money terms. Changes in rates of exchange between currencies may cause the value of the shares to diminish or
increase.
Enquiries to:
Bank of Ireland Securities Services Limited
New Century House
Mayor Street Lower
International Financial Services Centre
Dublin 1
Ireland
Tel: 353 1 6700300
Fax: 353 1 8290144
The above details are in summary form only and must be read in conjunction with the detailed information contained
in the revised Offering Circular dated 1 January 2005, and subsequent supplements to the Offering Circular.
3
North American Income Fund plc - Deutsche Americas Bond Fund
Annual Report and Audited
Financial Statements 2008
Investment Manager’s Report
The net asset value of the Deutsche Americas Bond Fund contracted 10.12% for the twelve months ended 31
December 2008. At the end of the annual period, the Fund had net assets of US$ 61.74 million and a net asset value
of US$ 46.83 per share.
Investment Environment
Debt markets in Latin America had a solid development in the first three months of 2008. However, performance
started to weaken in the second quarter, suffering from deteriorating investor sentiment after Bear Stearns’ collapse
and worries about the inflation outlook. In September, financial markets took another hit after the bankruptcy of
Lehman Brothers. Worries about the global growth outlook dominated the markets and added to the negative investor
sentiment.
Latin American sovereign debt was unable to avoid the global financial crisis. Starting in September 2008, deleveraging within its investor base put significant pressure on riskier assets. Many investors from core markets (US,
Western Europe) cut positions in all risky asset classes, which also weighed on USD bonds of Latin America. Not
only erratic and fundamentally weak countries like Argentina, Ecuador and Venezuela also got hit. Higher-rated
countries like Brazil, Peru and Mexico could not escape either.
Rate cuts due to financial market turmoil and recession fears in the United States led to an under-performance of
Canadian bonds against US Treasuries in 2008. While the Bank of Canada lowered its benchmark rate as well, the
US Federal Reserve followed a more aggressive monetary-easing stance, cutting interest rates by 275 basis points
(bps) from 3.00% to 0.25% by year-end.
Over the course of 2008, the deepening global financial turmoil increasingly clouded the economic picture in Latin
America. Strong linkages of a number of countries with the global economy made the region vulnerable to contagion.
Growth started to slow markedly on the back of the US economy stuck in recession. The United States absorbs a
large portion of the region’s exports and accounts for most of its foreign direct investment, tourism and remittance
flows. On the positive side, inflation concerns no longer dominated headlines in the second half of 2008, as
international energy and food prices fell sharply. Looking into individual countries, it becomes apparent that some are
better prepared to weather a severe global slowdown than others.
● Mexico’s close connection to the recession-plagued US economy resulted in a severe growth slump. In the first
place, deceleration in the US manufacturing sector became a heavy drag on auto-related exports. Secondly, weak
flows of workers remittances weighed on private consumption. In addition, the country faced continuously sliding
oil production. Pemex extracted 31% less crude last year from Cantarell, Mexico’s biggest oil field. Overall oil
output dropped 9% year-on-year in 2008.
● Colombia started to show signs of a severe economic slowdown in the second half of 2008. The country’s strong
linkage to both the US economy and Venezuela was the main driver behind deterioration of activity, primarily via
faltering exports. However, foreign direct investment inflows (USD 9 billion), primarily going to the mining and
oil sector, helped to finance Colombia’s growing current account deficit (USD 5 billion).
● The Brazilian economy was heating-up when the global crisis hit. Tighter credit conditions and the sharp
deterioration in business sentiment led to a quick adjustment in activity with industrial production as well as retail
sales already down sharply in the fourth quarter of 2008.
● Despite still respectable economic expansion, falling commodity prices and lower demand also started to weigh
on Peru in late 2008. Exports and private investment experienced the most significant decline in growth rates.
● In 2008, Venezuela’s years of oil bonanza reached an end. Lower oil prices began to negatively affect GDP
growth, fiscal accounts and external balances.
4
North American Income Fund plc - Deutsche Americas Bond Fund
Annual Report and Audited
Financial Statements 2008
Investment Manager’s Report (Continued)
Investment Environment (Continued)
Ecuador and Argentina stood out most negatively in 2008, with problems more home-made than driven externally.
● In short, Ecuador was marked by constantly-changing finance ministers, deteriorating domestic and external
accounts, a green light given for a new (socialist) Constitution and finally, a debt default. President Correa’s harsh
rhetoric on “illegitimate” external debt turned into concrete action, as the government stopped coupon payments
of the Global 2012 bond. Although financial resources were available, it was more of a political willingness not to
service its debt anymore.
● Argentina faced the double whammy of the sharp global economic slowdown feeding into the domestic economy,
and the international financial markets remaining shut since it defaulted on its bonds in 2001. The economic
climate kept deteriorating, as the government was not successful in convincing investors of their ability to
stabilize macroeconomic performance. In late December, authorities managed to stabilize the currency after a
period of significant peso depreciation. Peso deposits have lately started to grow again, partly reflecting tighter
capital controls reducing the corporate sectors’ ability to hoard US dollars.
Investment Strategy
After bond markets in Central and South America had severely suffered from global financial market turmoil,
deteriorating investor sentiment and worries about the global growth outlook since summer 2008, last December
brought some relief for fund performance. Investors took positions in bigger Latin American countries like Brazil,
Mexico, Colombia and Peru, but also looked at attractive opportunities in Central America and the Caribbean.
Throughout the year, fund management has generally had a cautious stance in its investment strategy. With global
turmoil intensifying in September 2008, local market positions in Mexico were reduced significantly, and duration
was shortened. Tactical positions in local debt of “high beta” countries like Colombia had been closed long before
currency and bonds started to experience massive pressure. Spread duration was reduced, especially in Mexico,
Colombia, Brazil and Peru. Holdings in Argentina were set to zero due to the country’s severe economic and political
problems. Investments in Venezuela and Ecuador were sold before the meltdown started in September, as these
countries are among the ones most severely hit by global slowdown and lower oil price. In Ecuador, the high
probability of a debt default (which finally occurred in December 2008) was an additional driver behind the fund
management’s decision.
Over the whole year 2008, the Fund held significant positions in external debt of Brazil, Peru, Colombia and Mexico,
mostly sovereign bonds, but also some exposure to corporate issuers. In addition, tactical positions were taken in
higher yielding local currency-denominated bonds.
The Fund also invested a reasonable portion of its assets in the external bonds of El Salvador, Costa Rica, Panama
and Guatemala. Positions in short-dated bonds of the Dominican Republic were held as a diversification investment.
Bonds from Nicaragua were taken as an investment into further improvements of the country, especially as their
specific feature of steady amortization makes this an attractive, shorter dated investment.
Corporate exposure was low and primarily focused on names that are less correlated to global financial markets. In
December 2008, increasing concerns about the economic slowdown have made market participants start to price in
aggressive rate cuts in Mexico. Hence, we built up Mexican local market positions.
[1]
As of 31 December 2008, the Fund had an average modified duration of 5.16 . The Fund’s average maturity stood
at 8.2 years. The Fund held a total of 23 securities, and the average rating of these securities was BBB-, as rated by
Standard & Poor’s. At the end of the annual period, approximately 49% of the Fund’s total assets were invested in
securities of Brazil, Colombia, Mexico and Peru. 17.6% of the portfolio’s assets were invested in securities of Central
American issuers, namely Costa Rica, El Salvador, Guatemala and Nicaragua. 7.4% was invested in Caribbean
countries, namely Dominican Republic and Trinidad & Tobago. At the end of December, the Fund also held 2.59%
of net assets in cash.
5
North American Income Fund plc - Deutsche Americas Bond Fund
Annual Report and Audited
Financial Statements 2008
Investment Manager’s Report (Continued)
Investment Outlook
The return outlook for the fund currently depends on three factors: global growth, international financial market
developments and country-specific events.
Governments in developed countries have delivered strong support for ailing financial systems in order to avoid
repetition of a negative event like the Lehman collapse in September 2008. Market focus has shifted towards crisis
impact on global economic growth. Across the board, economic indicators come out on the negative side, pointing to
a severe economic downturn. Consequently, both the US and the European Union are expected to unveil additional
large fiscal stimulus packages in 2009. A number of emerging market economies also started to switch to massive
counter-cyclical policies, ranging from interest rate cuts to significant fiscal measures. Still, even in the best-case
scenario, economic activity is likely to remain weak through much of 2009.
The shaky global outlook will likely continue to weigh on Latin American countries, as growth and capital flows are
likely to suffer from a slump especially in US economic activity. In the region, Peru, Chile and Panama seem to be
best-prepared to weather a severe global slowdown. Solid economic performance and prudent fiscal policies in the
past equip the governments with flexibility to stimulate the economy. Panama has its own individual growth story,
which is to a large degree related to the Canal expansion project. Colombia and Mexico face tougher conditions due
to their relatively stronger dependence on the US. With energy and food prices down sharply, inflation concerns will
be less of a topic in 2009. Net-commodity-importers have experienced significant relief, as many of them allowed full
pass-through of higher international commodity prices into domestic prices.
On the back of the financial crisis spilling over into the real economy, the fund management will continue to follow a
cautious investment approach, especially in the near term. In general, fund management is convinced that a number of
Latin American issuers like e.g. Peru, Panama, Chile, Brazil and some Central American countries offer attractive
value, and will actively allocate between different regional names. On the back high political and economic risks, the
fund management is not expected to touch paper of Argentina and Venezuela.
We remain convinced that active management of a diversified Latin American debt portfolio in both external debt
and local currency bonds offers attractive total return opportunities.
On behalf of the Investment Manager
DWS Finanz-Service GmbH
Dr. Nicolas Schlotthauer, CEFA
Portfolio Manager
[1]
Modified duration is the percentage price change of a security or portfolio for a given change in yield. The higher the modified duration of a
security or portfolio, the higher its sensitivity to yield changes.
6
North American Income Fund plc - Deutsche Americas Bond Fund
Annual Report and Audited
Financial Statements 2008
Directors' Report
The Directors present herewith the Annual Report and audited Financial Statements for the year ended 31 December
2008.
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Directors' Report and Financial Statements in accordance with
applicable law and regulations.
Company law requires Directors to prepare Financial Statements for each financial year. Under that law Directors
have elected to prepare the Company Financial Statements in accordance with Generally Accepted Accounting
Practice in Ireland, comprising applicable law and the accounting standards issued by the Accounting Standards
Board and published by the Institute of Chartered Accountants in Ireland.
The Company's Financial Statements are required by law to give a true and fair view of the state of affairs of the
Company and of its profit or loss for that period.
In preparing each of the Financial Statements, Directors are required to:
● select suitable accounting policies and then apply them consistently;
● make judgments and estimates that are reasonable and prudent; and
● prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the
Company will continue in business.
The Directors are responsible for keeping proper books of account that disclose with reasonable accuracy at any time
the financial position of the Company and enable them to ensure that its Financial Statements comply with the
Companies Acts, 1963 to 2006. They are also responsible for taking such steps as are reasonably open to them to
safeguard the assets of the Company and to prevent and detect fraud and other irregularities.
The Directors are also responsible for preparing a Directors' Report that complies with the requirements of the
Companies Acts, 1963 to 2006.
Principal Activities
The Company has been approved by the Irish Financial Regulator as an investment company pursuant to Part XIII of
the Companies Act, 1990.
The Company's investment objective is to generate a high level of current income along with positive real rates of
return.
The Investment Manager's Report contains a review of the factors which contributed to the performance for the year.
The Directors do not anticipate any changes in the structure or investment objective.
7
North American Income Fund plc - Deutsche Americas Bond Fund
Annual Report and Audited
Financial Statements 2008
Directors' Report (Continued)
Risk Management objectives and policies
The main risks arising from the Company's financial instruments are market, currency, interest rate, price, liquidity
and counterparty credit risks as given in the notes to these accounts.
Events since the year end
There have been no significant events affecting the Company since the year end.
Dividends
The Directors do not recommend the payment of a dividend.
Substantial Shareholdings
DB US Financial Markets Holding Corporation had an interest of 67.12% (2007: 67.08%) in the Shares of the
Company at the year end.
Directors and Secretary
The Directors who held office during the year under review were:
Alejandro Rodriguez (Costa Rican)
Jaime Chavez (Honduran)
Markus Kohlenbach (German)
Michael Greene (Irish)
Nick Rischbieth Glöe (Honduran)
Paul Schubert (American)
Per Åke Rydberg (Swedish) (Irish Resident)
Walter Dostmann (German) (Chairman)
Directors’ Interests in Shares and Contracts
Walter Dostmann holds one subscriber share. None of the other Directors listed above who held office at the year end
had any interests in the Shares of the Company at that date or at any time during the financial year.
Transactions Involving Directors
There are no contracts or arrangements of any significance in relation to the business of the Company in which the
Directors or Company Secretary had any interest as defined in the Companies Act, 1990, at any time during the
financial year.
8
North American Income Fund plc - Deutsche Americas Bond Fund
Annual Report and Audited
Financial Statements 2008
Directors' Report (Continued)
Accounting Records
The Directors believe that they have complied with the requirements of Section 202 of the Companies Act, 1990,
with regard to the books of account by employing accounting personnel with appropriate expertise and by providing
adequate resources to the financial function. The Books of Account of the Company are maintained at:
Bank of Ireland Securities Services Limited
New Century House
Mayor Street Lower
International Financial Services Centre
Dublin 1
Ireland
Auditors
In accordance with Section 160(2) of the Companies Act, 1963, KPMG, Chartered Accountants and Registered
Auditors will continue in office.
On Behalf of the Board of Directors
Walter Dostmann
Per Åke Rydberg
27 March 2009
9
North American Income Fund plc - Deutsche Americas Bond Fund
Annual Report and Audited
Financial Statements 2008
Report of the Custodian to the Shareholders
We have enquired into the conduct of the North American Income Fund plc - Deutsche Americas Bond Fund (the
"Company") for the year ended 31 December 2008, in our capacity as Custodian to the Company.
This report including the opinion has been prepared for and solely for the shareholders in the Company as a body, in
accordance with the Financial Regulator’s Non - UCITS Notice 7, and for no other purpose. We do not, in giving this
opinion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown.
Responsibilities of the Custodian
Our duties and responsibilities are outlined in the Financial Regulator’s Non - UCITS Notice 7. One of those duties is
to enquire into the conduct of the Company in each annual accounting period and report thereon to the shareholders.
Our report shall state whether, in our opinion, the Company has been managed in that period in accordance with the
provisions of the Company’s Memorandum and Articles of Association and the Non - UCITS Notices. It is the
overall responsibility of the Company to comply with these provisions. If the Company has not so complied, we as
Custodian must state why this is the case and outline the steps which we have taken to rectify the situation.
Basis of Custodian Opinion
The Custodian conducts such reviews as it, in its reasonable opinion, considers necessary in order to comply with its
duties as outlined in Non - UCITS Notice 7 and to ensure that, in all material respects, the Company has been
managed (i) in accordance with the limitations imposed on its investment and borrowing powers by the provisions of
its constitutional documentation and the appropriate regulations, and, (ii) otherwise in accordance with the
Company’s constitutional documentation and the appropriate regulations.
Opinion
In our opinion, the Company has been managed during the year, in all material respects:
(i) in accordance with the limitations imposed on the investment and borrowing powers of the Company by the
Memorandum and Articles of Association and by the Financial Regulator under the powers granted to it by the
Companies Act, 1990, Part XIII, and the Investment Funds Act, 2005; and,
(ii) otherwise in accordance with the provisions of the Memorandum and Articles of Association, the Companies Act,
1990, Part XIII.
The Governor and Company of the Bank of Ireland
27 March 2009
10
North American Income Fund plc - Deutsche Americas Bond Fund
Annual Report and Audited
Financial Statements 2008
Independent Auditors' Report to the Members of North American Income Fund plc - Deutsche Americas
Bond Fund (the "Company")
We have audited the Company’s Financial Statements for the year ended 31 December 2008 which comprise the
Balance Sheet, the Profit and Loss Account, the Statement of Changes in Net Assets Attributable to Holders of
Redeemable Participating Shares, the Schedule of Investments and the related notes. These Financial Statements have
been prepared under the accounting policies set out therein.
This report is made solely to the Company's members, as a body, in accordance with Section 193 of the Companies
Act, 1990. Our audit work has been undertaken so that we might state to the Company's members those matters we
are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by the law,
we do not accept or assume responsibility to anybody other than the Company and the Company's members as a
body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of Directors and Auditors
The Directors’ responsibilities for preparing the Annual Report and the Financial Statements in accordance with
applicable Irish law and the accounting standards issued by the Accounting Standards Board and published by the
Institute of Chartered Accountants in Ireland (Generally Accepted Accounting Practice in Ireland) are set out in the
Statement of Directors’ Responsibilities on page 7.
Our responsibility is to audit the Financial Statements in accordance with relevant legal and regulatory requirements
and International Standards on Auditing (UK and Ireland).
We report to you our opinion as to whether the Financial Statements give a true and fair view in accordance with
Generally Accepted Accounting Practice in Ireland, and are properly prepared in accordance with Irish statute
comprising the Companies Acts, 1963 to 2006. We state whether we have obtained all the information and
explanations we consider necessary for the purposes of our audit, and whether the Financial Statements are in
agreement with the books of account. We also report to you our opinion as to:
● whether the Company has kept proper books of account; and,
● whether the Directors’ report is consistent with the Financial Statements.
We also report to you if, in our opinion, any information specified by law regarding Directors’ remuneration and
Directors’ transactions is not disclosed and where practicable, include such information in our report.
We read the other information contained in the Annual Report, and consider whether it is consistent with the audited
Financial Statements. The other information comprises only the Directors' Report, the Custodian's Report, and the
Investment Manager's Report. We consider the implications for our report if we become aware of any apparent
misstatements or material inconsistencies with the Financial Statements. Our responsibilities do not extend to any
other information.
11
North American Income Fund plc - Deutsche Americas Bond Fund
Annual Report and Audited
Financial Statements 2008
Independent Auditors' Report to the Members of North American Income Fund plc - Deutsche Americas
Bond Fund (the "Company") (Continued)
Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the
Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and
disclosures in the Financial Statements. It also includes an assessment of the significant estimates and judgments
made by the Directors in the preparation of the Financial Statements, and of whether the accounting policies are
appropriate to the Company's circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered
necessary in order to provide us with sufficient evidence to give reasonable assurance that the Financial Statements
are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we
also evaluated the overall adequacy of the presentation of information in the Financial Statements.
Opinion
In our opinion, the Financial Statements:
● give a true and fair view in accordance with Generally Accepted Accounting Practice in Ireland, of the state of the
Company's affairs at 31 December 2008 and of its results for the year then ended; and,
● have been properly prepared in accordance with the requirements of the Companies Acts, 1963 to 2006.
We have obtained all the information and explanations we consider necessary for the purposes of our audit. In our
opinion, proper books of account have been kept by the Company. The Company’s Financial Statements are in
agreement with the books of account.
In our opinion, the information given in the Directors' report is consistent with the Financial Statements.
KPMG
Chartered Accountants and Registered Auditors
1 Harbourmaster Place
IFSC
Dublin 1
27 March 2009
12
North American Income Fund plc - Deutsche Americas Bond Fund
Annual Report and Audited
Financial Statements 2008
Profit and Loss Account
For the year ended 31 December 2008
Notes
Year ended
31 December 2008
US$
Year ended
31 December 2007
US$
Income
Operating income
Net (losses)/gains on financial assets and liabilities
at fair value through profit or loss
3
4
Total investment (loss)/income
Operating expenses
5
Net (expense)/income
92,265
163,821
(5,842,693)
3,637,864
(5,750,428)
3,801,685
(1,194,357)
(1,052,774)
(6,944,785)
2,748,911
Finance costs
Interest expense
(557)
(Loss)/profit for the year before tax
(6,945,342)
Non-reclaimable withholding tax
-
(215)
2,748,696
(306)
(Loss)/profit for the year after tax
(6,945,342)
2,748,390
(Decrease)/increase in Net Assets Attributable to Holders
of Redeemable Participating Shares
(6,945,342)
2,748,390
There are no recognised gains or losses arising in the year other than the (decrease)/increase in Net Assets
Attributable to Holders of Redeemable Participating Shares of the Company. In arriving at the results of the
financial year, all amounts above relate to continuing operations.
The accompanying notes form an integral part of the Financial Statements.
On Behalf of the Board of Directors
Walter Dostmann
Per Åke Rydberg
27 March 2009
13
North American Income Fund plc - Deutsche Americas Bond Fund
Annual Report and Audited
Financial Statements 2008
Balance Sheet
As at 31 December 2008
As at
Notes 31 December 2008
US$
As at
31 December 2007
US$
Assets
Cash and Bank Balances
6
1,617,646
2,184,812
Debtors
7
13,766
29,041
60,417,070
66,762,483
62,048,482
68,976,336
Debt instruments designated at fair value through profit or loss
1(b)
Total Assets
Liabilities
Bank Overdraft
8
(16,561)
(15)
Creditors (amounts falling due within one year)
9
(289,440)
(248,077)
(306,001)
(248,092)
Total Liabilities
Net Assets Attributable to Holders of Redeemable
Participating Shares
61,742,481
The accompanying notes form an integral part of the Financial Statements.
On Behalf of the Board of Directors
Walter Dostmann
Per Åke Rydberg
27 March 2009
14
68,728,244
North American Income Fund plc - Deutsche Americas Bond Fund
Annual Report and Audited
Financial Statements 2008
Statement of Changes in Net Assets Attributable to Holders of
Redeemable Participating Shares
For the year ended 31 December 2008
Year ended
31 December 2008
US$
Year ended
31 December 2007
US$
Net Assets Attributable to Holders of Redeemable
Participating Shares at beginning of year
68,728,244
58,786,778
(Decrease)/increase in Net Assets resulting from operations
(6,945,342)
2,748,390
Amounts received on issue of Redeemable Participating Shares
-
7,201,076
Amounts paid on redemption of Redeemable Participating Shares
(40,421)
(Decrease)/increase in Net Assets resulting
from Share transactions
(40,421)
7,193,076
Net (decrease)/increase in shareholders' funds
(6,985,763)
9,941,466
Net Assets Attributable to Holders of Redeemable
Participating Shares at end of year
61,742,481
68,728,244
The accompanying notes form an integral part of the Financial Statements.
15
(8,000)
North American Income Fund plc - Deutsche Americas Bond Fund
Annual Report and Audited
Financial Statements 2008
Notes to the Financial Statements
For the year ended 31 December 2008
1.
Significant Accounting Policies
a) Basis of preparation
These Financial Statements have been prepared in accordance with Generally Accepted Accounting Principles in
Ireland and the Companies Acts, 1963 to 2006. Accounting standards generally accepted in Ireland in preparing
Financial Statements giving a true and fair view are those published by the Institute of Chartered Accountants in
Ireland and issued by the Accounting Standards Board ("ASB").
The Financial Statements have been prepared under the historical cost convention as modified by the revaluation of
financial assets and financial liabilities held at fair value through the profit or loss.
The preparation of Financial Statements requires management to make judgements, estimates and assumptions that
affect the application of policies and the reported amounts of assets/(liabilities) and income/(expenses). The
estimates and associated assumptions are based on historical experience and various other factors that are believed to
be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying
values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these
estimates. The accounting policies have been applied consistently by the Company and are consistent with those in
the previous year.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of
the revision and future periods, if the revision affects both current and future periods.
The information required by Financial Reporting Standard (FRS) No. 3 "Reporting Financial Performance", to be
included in a statement of total recognised Gains and Losses, and a Reconciliation of Movements in Shareholders
Funds is, in the opinion of the Directors, contained in the Profit and Loss Account and Statement of Changes in Net
Assets Attributable to Holders of Redeemable Participating Shares on pages 13 and 15.
All references to Net Assets, throughout this document, refer to Net Assets Attributable to Holders of Redeemable
Participating Shares unless otherwise stated.
The Financial Statements are prepared in US Dollars and rounded to the nearest US Dollar.
b) Investments
(i)
Classification and Recognition
The category of financial assets and financial liabilities at fair value through profit or loss comprises:
- Financial instruments held for trading. These include futures and liabilities from short sales of financial
instruments included as financial derivative instruments on the Balance Sheet. All derivatives in a net
receivable position (positive fair value), as well as options purchased, are reported as financial assets held for
trading. All derivatives in a net payable position (negative fair value), as well as options written, are reported
as financial liabilities held for trading.
- Financial instruments designated at fair value through profit or loss upon initial recognition. These include
financial assets that are not held for trading purposes and which may be sold.
The Company has designated all its investments as financial instruments held for trading.
16
North American Income Fund plc - Deutsche Americas Bond Fund
Annual Report and Audited
Financial Statements 2008
Notes to the Financial Statements (Continued)
For the year ended 31 December 2008
1.
Significant Accounting Policies (Continued)
b) Investments (Continued)
(i)
Classification and Recognition (Continued)
The Company recognises financial assets and financial liabilities on the date it becomes a party to the
contractual provisions of the instrument, and all significant rights and access to the benefits from the assets,
and the exposure to the risks inherent in those benefits, are transferred to the Company. The Company
derecognises financial assets and financial liabilities when all such benefits and risks are transferred from the
Company.
A regular way purchase of financial assets is recognised using trade date accounting. From this date, any gains
and losses, arising from changes in fair value of the financial assets or financial liabilities, are recorded.
(ii)
Measurement
Financial instruments are measured initially at fair value. Transaction costs on financial assets and financial
liabilities at fair value through profit or loss are expensed immediately, while on other financial instruments
they are amortised.
Subsequent to initial recognition, all instruments classified at fair value through profit or loss are measured at
fair value with changes in their fair value recognised in the Profit and Loss Account.
Financial assets and liabilities, other than those at fair value through profit or loss, are measured at amortised
cost using the effective interest rate.
Financial liabilities, arising from the Redeemable Shares issued by the Company, are carried at the redemption
amount representing the Investors' right to a residual interest in the Company's Assets.
(iii)
Fair value measurement principles
The fair value of financial instruments is based on their quoted dirty market prices at the Balance Sheet date
without any deduction for estimated future selling costs. Financial assets are priced at current bid prices, while
financial liabilities are priced at current asking prices.
If a quoted market price is not available on a recognised stock exchange or from a broker / dealer for nonexchange-traded financial instruments, the fair value of the instrument is estimated using valuation techniques,
including use of recent arm's length market transactions, reference to the current fair value of another
instrument that is substantially the same, discounted cash flow techniques, option pricing models or any other
valuation technique that provides a reliable estimate of prices obtained in actual market transactions.
Fair values for unquoted equity investments are estimated, if possible, using applicable price/ earnings ratios
for similar listed companies adjusted to reflect the specific circumstances of the issuer.
The fair value of derivatives, that are not exchange traded, is estimated at the amount that the Company would
receive or pay to terminate the contract at the Balance Sheet date, taking into account current market
conditions (volatility, appropriate yield curve) and the current creditworthiness of the counterparties. Realised
gains and losses on investment disposals are calculated using the average cost method.
17
North American Income Fund plc - Deutsche Americas Bond Fund
Annual Report and Audited
Financial Statements 2008
Notes to the Financial Statements (Continued)
For the year ended 31 December 2008
1.
Significant Accounting Policies (Continued)
b) Investments (Continued)
(iii)
Fair value measurement principles (Continued)
Guatemala Electrical Trust Note (Citco Trustees Cayman 8.5% 21/12/2014)
The Guatemala Electrical Trust Notes (Citco Trustees Cayman Ltd 8.5% 21/12/2014) trade at a reasonable
spread above the Republic of Guatemala, given current liquidity conditions for Emerging Markets corporate
debt and the bond’s relatively small issue size. This yield is regularly monitored and set by the Fund’s pricing
committee. The price for Guatemala Electrical Trust Notes is derived using a yield-to-price calculation based
on a 155 basis point spread above the Republic of Guatemala 2013 bond. Pricing and yield information for the
Guatemala Electrical Trust Notes is updated on each valuation date of the Fund. This stock is priced daily by
the Administrator's Central Pricing Unit (CPU). CPU will obtain a daily price for the security via IDC feed
and conduct a yield to maturity calculation. Using this yield and 155 basis point spread the price of the
Guatemalan Electrical Trust note is calculated. On a quarterly basis, the Investment Manager assists the
Administrator in obtaining an independent broker quote.
Republic of Nicaragua for the Payment of Indemnification (BPI) (Nicaragua Government International
Bond 5% 01/02/2011)
Using Bloomberg platform, the bonds are valued at a spread 700 basis points over LIBOR. The spread again
should incorporate both the average country risk of Latin American sovereign issuers and the lower rating and
much lower liquidity of Nicaraguan BPI’s. The Administrator's Central Pricing Unit (CPU) calculates the
bond’s price on a daily basis using the 6 month US$ Dollar Libor rate and the EMBI Global Diversification
Index to determine the average stripped spread of Latin American sovereign issuers. Spreads of 300 bps to
compensate for lower rating and 400bps to compensate for lower liquidity are used. These spreads can be
changed by the Fund's pricing committee if there is a change in the respective risk premiums. A monthly
broker price is also obtained from ABN Amro and is used to back up the daily calculation on a monthly basis.
CABEI Floating Rate Note linked to ICE Costa Rica (Central American Bank for Economic
Integration FRN 25/04/2015)
The floating rate note issued by the Central American Bank for Economic Integration (CABEI) is linked to the
Costa Rican telecommunications and electrical entity Instituto Costarricense de Electricidad (ICE), maturing
25/04/2015. The note has an amortising structure, which matches the cash flows generated out of the
underlying loan. Amortisation starts in April 2009. Portfolio management believes that the sovereign notes of
the Republic of Costa Rica, due 2012, offer the most appropriate benchmark for the CABEI note. The semiannual amortisation schedule reduces average life to 3.7 years. The price for the notes will be derived using a
yield-to-price calculation based on a 50 basis points spread over the Costa Rica 2012 sovereign bond.
The Investment Manager compares price moves in the CABEI note with those occurring in the Costa Rica
2012 bond for the same period. In addition, the Investment Manager follows the pricing of two USD bonds
issued by ICE on global markets. The Administrator receives a weekly broker price from CABEI for this
security. The broker provides Bloomberg back up illustrating the price calculation details including the price
of Costa Rica 2012 and the yield to maturity with a spread of 0.5%.
18
North American Income Fund plc - Deutsche Americas Bond Fund
Annual Report and Audited
Financial Statements 2008
Notes to the Financial Statements (Continued)
For the year ended 31 December 2008
1.
Significant Accounting Policies (Continued)
b) Investments (Continued)
(iii)
Fair value measurement principles (Continued)
CABEI Floating Rate Note (Central American Bank for Economic Integration FRN 01/06/2010)
The floating rate note issued by the Central American Bank for Economic Integration (CABEI) is expected to
trade at a spread of 50 basis points over the 3-month US dollar London inter-bank offer rate (LIBOR). The
note does have an amortising structure, with the first out of six quarterly amortisations coming in March 2009.
The Investment Manager retrieves the 3-month LIBOR quote from Bloomberg. Given the floating feature, the
interest rate is reset on a quarterly basis, reflecting the 3-month US dollar LIBOR quote at that time plus the
margin. The Administrator calculates the price of this security on a daily basis. The Administrator's CPU
calculates the price using yield and the 3 month USD LIBOR rate plus 50 basis points.
(iv)
Offsetting Financial Instruments
Financial assets and liabilities are offset and the net amount reported in the Balance Sheet where there is a
legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or
realise the assets and settle the liability simultaneously.
(v)
Specific Instruments
Cash comprises current deposits with banks. The measurement of deposits are amortised cost. Cash
equivalents are short-term highly liquid investments that are readily convertible to known amounts of cash, are
subject to an insignificant risk of changes in value, and are held for the purpose of meeting short-term cash
commitments rather than for investment or other purposes.
c) Cash Flow Statement
The Company has availed of the exemption available to open-ended investment funds under FRS 1 not to prepare a
Cash Flow Statement.
d) Income
Bank interest income is accounted for on an effective yield basis. Coupon interest is included in realised and
unrealised gains/losses on investments in the profit and loss account on an accruals basis.
e) Fees and charges
In accordance with the Prospectus, management fees, administration fees, custody fees and other operating expenses
are charged to the Profit and Loss Account on an accruals basis.
f) Derivative Instruments
Changes in the value of the derivatives are recognised as gains and losses by marking to market on a daily basis to
reflect the value of the derivative at the end of each day's trading. They are valued at the settlement price established
each day on which they are traded, and the Company's investment therein, representing unrealised gain or loss on the
contracts, is included in the Profit and Loss Account.
19
North American Income Fund plc - Deutsche Americas Bond Fund
Annual Report and Audited
Financial Statements 2008
Notes to the Financial Statements (Continued)
For the year ended 31 December 2008
1.
Significant Accounting Policies (Continued)
g) Redeemable Participating Shares
Redeemable Participating Shares are redeemable at the Shareholder’s option and are classified as financial liabilities.
Any distributions on these participating shares are recognized in the Profit and Loss Account as finance costs.
h) Gains and Losses on Investments
Realised gains or losses on disposal of investments during the period and unrealised gains and losses on valuation of
investments held at the period end are dealt with in the Profit and Loss Account.
i) Foreign Exchange
The functional currency of the Company is US Dollars. The Directors have determined that this reflects the
Company's primary economic environment, as the majority of the Company's Net Assets Attributable to Holders of
Redeemable Participating Shares are in US Dollars.
Foreign exchange gains and losses on financial assets and financial liabilities at fair value through profit and loss are
recognised together with other changes in the fair value. Net currency gains/(losses) as set out in Note 4, are net
foreign exchange gains and losses on monetary financial assets and liabilities other than those classified at fair value
through profit or loss.
Assets and liabilities denominated in foreign currencies, other than the functional currency of the Company, have
been translated at the rate of exchange prevailing at 31 December. Transactions in foreign currencies are translated
into US Dollars at the exchange rate prevailing at the date of the transaction. Gains and losses on foreign exchange
transactions are recognised in the Profit & Loss Account in determining the result for the year.
The following exchange rates were used to convert investments, assets and liabilities to the functional currency of the
Company:
As at
As at
31 December 2008
31 December 2007
US$1=
US$1=
Brazilian Real (BRL)
2.3320
1.7800
Canadian Dollar (CAD)
0.9869
Colombian Peso (COP)
2,248.5808
Costa Rican Colon (CRC)
555.4664
498.1153
Euro (EUR)
0.7194
0.6840
Mexican Peso (MXN)
13.8485
10.9143
Peru Nuevos Soles (PEN)
3.1395
Pound Sterling (GBP)
0.5024
2.
Financial Risk Management
Strategy in using Financial Instruments
In pursuing its investment objective, the Company is exposed to a variety of financial risks: market risk (including
market price risk, interest rate risk and currency risk), credit risk and liquidity risk that could result in a reduction in
the Company's net assets. The Company's overall risk management policy focuses on the unpredictability of financial
markets and seeks to minimise potential adverse effects on the Fund's financial performance.
The nature and extent of the financial instruments outstanding at the balance sheet date and the risk management
policies employed by the Company are discussed below.
20
North American Income Fund plc - Deutsche Americas Bond Fund
Annual Report and Audited
Financial Statements 2008
Notes to the Financial Statements (Continued)
For the year ended 31 December 2008
2.
Financial Risk Management (Continued)
Market price risk
Market price risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of
changes in market prices.
The Fund's investment objective is to generate a high real level of current income along with positive real rates of
return. The Fund seeks to achieve this objective by investing in a portfolio of fixed income securities denominated in
various currencies, utilising a disciplined approach that emphasises preservation of capital through risk control.
The Fund's debt securities are susceptible to market price risk arising from uncertainties about future prices of the
instruments. The Investment Manager moderates this risk through a careful selection of securities within specified
limits. The Fund's Pricing Committee is advised by the Administrator of any individual securities that have a price
movement greater than 3% from one business day to the next. After consultation with the Fund's Pricing Committee,
the price movements may be agreed upon or amended if the Committee can provide sufficient back up (currently two
recognised price sources) that the security should be priced at a different level.
The maximum risk resulting from financial instruments is determined by the fair value of the financial instruments.
The Board of the Company manage the market price risks inherent in the investment portfolio by ensuring full and
timely access to relevant information from the Investment Manager. The Board is informed of any unusual price
variation on a timely basis. The Board meets twice yearly and at each meeting reviews investment performance and
overall market positions. They monitor the Investment Manager’s compliance with the Company’s objectives and are
directly responsible for investment strategy and asset allocation.
Details of the nature of the Company's investment portfolio at the balance sheet date are disclosed in the Schedule of
Investments on pages 33 and 34.
At 31 December 2008, the Company’s market risk is affected by three main components: changes in actual market
prices, interest rates and foreign currency movements. Interest rate and foreign currency movements are covered in
the seperate sections below.
Value-at-Risk (VaR)
Value-at-risk (VaR) is currently used to derive a quantitative measurement for a fund's market risk under normal
market conditions. VaR is calculated every day. The Investment Manager uses Risk Manager as the engine for
calculating VaR. Suitable stress tests are also carried out on a daily basis and back-testing, for reviewing the
predictive quality of the VaR model, are also performed.
The Investment Manager receives a daily results report from Risk Manager. This report shows the VaR of the fund
and its reference fund, including, where appropriate, sensitivity data and the results of stress tests. The Investment
Manager uses these reports every day to check that statutory and contractual market-risk limits (i.e. the VaR of the
Fund may not be more than twice (200%) as high as the VaR of the derivative-free comparable reference/benchmark
Fund) have been observed. Their findings are to be properly taken into account in investment decisions.
21
North American Income Fund plc - Deutsche Americas Bond Fund
Annual Report and Audited
Financial Statements 2008
Notes to the Financial Statements (Continued)
For the year ended 31 December 2008
2.
Financial Risk Management (Continued)
Value-at-Risk (VaR) (Continued)
The statistical VaR process is used to derive a quantitative measurement for a fund's market risk under normal market
conditions. The result of the VaR calculation indicates the potential future losses for a fund (based on the market
value) that will not be exceeded under normal market conditions, for a specified holding period and confidence level
(e.g. 99%). The VaR method is a consistent, standard measurement that can be applied to all trading transactions and
products. This enables the calculated market risk to be compared with both a specific time period and the actual
return.
The Investment Manager's policy is to use historical calculation for monitoring regulatory requirements whilst key
VaR figures are calculated using the Monte Carlo (MC) simulation. Historical simulation is used because it is more
transparent. Historical simulation applies the changes in market data over the previous twelve months to the current
market environment. MC simulation is a model that calculates the profit or loss made by a fund in a large number of
different market scenarios (generally 10,000 scenarios).
The following quantitative specifications apply to the VaR model:
- 99% confidence level
- 10 day holding period
- minimum of one year historical time series
The main market risks addressed include: interest rate risk, credit spreads risk, equity price risk, exchange rate risk,
vega risk, and their associated correlations.
Assumptions and Limitations of VaR
The standard VaR calculation is currently based on the historical market events of the last 252 trading dates. Market
events not contained within this time window are not taken into account to assess potential future losses. A
prerequisite to calculating VaR properly is the availability of sufficient data. VaR works well for instruments whose
input variables, i.e. risk factors, are market observables or can at least be easily derived from the market. VaR relies
on the availability of quality time series of the risk factors.
Correlations among several risk factors are hard to observe and, thus, they are estimated. Another important issue is
changing correlation - for example, securities or asset classes which have been previously uncorrelated, might
suddenly become highly correlated.
The Investment Manager calculates daily the VaR with two methods simultaneously, i.e., historical simulation and
Monte Carlo simulation. However, the Monte Carlo VaR calculation is based on the assumption that returns of risk
factors are normally distributed with a constant variance over time. This is a simplification of reality and “fat tails”
and greater market events are underestimated.
The VaR calculation is subject to statistical sampling error. The actual losses experienced by any individual fund
may be greater than the VaR. In a highly volatile market the VaR may underestimate the risk in the Fund.
VaR Analysis
At 31 December 2008, utilising the Investment Manager’s proprietary risk model, under normal market conditions
the ten day value-at-risk (VaR) for the Deutsche Americas Bond Fund is approximately 6.78% / US$3,085,188 (31
December 2007: 3.46% / US$1,504,131) at the 99% confidence level. That is, under normal market conditions and
assuming no changes to shareholder capital, there is estimated to be a greater than 99% probability that the value of
this Fund would not decrease by more than 6.78% / US$3,085,188 (31 December 2007: 3.46% / US$1,504,131) over
ten days.
22
North American Income Fund plc - Deutsche Americas Bond Fund
Annual Report and Audited
Financial Statements 2008
Notes to the Financial Statements (Continued)
For the year ended 31 December 2008
2.
Financial Risk Management (Continued)
Interest rate risk
The Fund's interest bearing financial assets and liabilities exposes it to risks associated with the effects of fluctuations in the prevailing levels of market interest rates on their financial position and cash flows.
Interest rate risk is managed, in part, by the security selection process of the Investment Manager which includes predictions of future events and their impact on interest rates, diversification and duration. In accordance with Company policy, the
Investment Manager monitors the Fund's overall interest sensitivity on a daily basis, and the Board of Directors review it on a twice yearly basis. There were no material changes to the Company’s policies and processes for managing interest rate risk
and the methods used to measure risk since the prior year end.
The tables below summarise the Fund's exposure to interest rate risks. It includes the Fund's assets and trading liabilities at fair values, categorised by the earlier of contractual re-pricing or maturity dates.
As at 31 December 2008
Less than
1 month
US$
Assets
Debt instruments designated at fair value through Profit and Loss
Debtors
Cash Deposits
Total assets
1,617,646
1,617,646
Liabilities
Bank Overdraft
Accrued expenses
Redeemable participating shares
Total liabilities
(16,561)
(16,561)
Total interest sensitivity gap
1,601,085
As at 31 December 2007
Less than
1 month
US$
Assets
Debt instruments designated at fair value through Profit and Loss
Debtors
Cash Deposits
Total assets
2,184,812
2,184,812
Liabilities
Bank Overdraft
Accrued expenses
Redeemable participating shares
Total liabilities
(15)
(15)
Total interest sensitivity gap
2,184,797
23
1 month
- 1 year
US$
1 - 5 years
US$
> 5 years
US$
Non-interest
bearing
US$
-
20,385,585
20,385,585
40,031,485
40,031,485
13,766
13,766
-
-
-
(289,440)
(61,742,481)
(62,031,921)
-
20,385,585
40,031,485
(62,018,155)
1 month
- 1 year
US$
1 - 5 years
US$
> 5 years
US$
Non-interest
bearing
US$
-
10,421,175
10,421,175
56,341,308
56,341,308
29,041
29,041
-
-
-
(248,077)
(68,728,244)
(68,976,321)
-
10,421,175
56,341,308
(68,947,280)
Total
US$
60,417,070
13,766
1,617,646
62,048,482
(16,561)
(289,440)
(61,742,481)
(62,048,482)
-
Total
US$
66,762,483
29,041
2,184,812
68,976,336
(15)
(248,077)
(68,728,244)
(68,976,336)
-
North American Income Fund plc - Deutsche Americas Bond Fund
Annual Report and Audited
Financial Statements 2008
Notes to the Financial Statements (Continued)
For the year ended 31 December 2008
2.
Financial Risk Management (Continued)
Currency risk
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. Certain of the Fund's assets and liabilities are denominated in currencies other than US Dollars, the
functional currency. It is, therefore, exposed to currency risk as the value of the securities denominated in other currencies will fluctuate due to changes in exchange rates. Income denominated in foreign currencies is converted to US Dollars on receipt.
In accordance with Company policy, the Investment Manager monitors the Portfolio's currency position on a daily basis. The Directors of the Company rely on the Investment Manager to keep them informed of any material event. There were no
material changes to the Company’s policies and processes for managing currency risk and the methods used to measure risk since the prior year end.
The tables below documents the Fund's exposure to currency risks, measured in US$ equivalents:
As at 31 December 2008
BRL
1,199,733
1,199,733
Financial Assets - stated in US Dollars
Financial Assets at fair value through Profit and Loss
Debtors
Cash Deposits
Total assets
CRC
1,399,922
1,399,922
Financial Liabilities - stated in US Dollars
Bank Overdraft
Accrued expenses
Redeemable participating shares
Total liabilities
MXN
3,863,660
438,997
4,302,657
Total
US$
6,463,315
438,997
6,902,312
EUR
(16,561)
(16,561)
Total
US$
(16,561)
(16,561)
MXN
6,021,944
293,465
6,315,409
Total
US$
9,683,072
293,465
9,976,537
EUR
(15)
(15)
Total
US$
(15)
(15)
As at 31 December 2007
Financial Assets - stated in US Dollars
Financial Assets at fair value through Profit and Loss
Debtors
Cash Deposits
Total assets
BRL
1,708,825
1,708,825
Financial Liabilities - stated in US Dollars
Bank Overdraft
Accrued expenses
Redeemable participating shares
Total liabilities
24
CRC
1,952,303
1,952,303
North American Income Fund plc - Deutsche Americas Bond Fund
Annual Report and Audited
Financial Statements 2008
Notes to the Financial Statements (Continued)
For the year ended 31 December 2008
2.
Financial Risk Management (Continued)
Credit risk
The Company takes on exposure to credit risk, which is the risk that a counterparty or an issuer will be unable to
pay amounts in full when due.
The carrying amounts of financial assets as disclosed in the balance sheet best represent the maximum credit risk
exposure at the balance sheet date. This relates also to financial assets carried at amortised cost, as they have a
short-term to maturity.
As at 31 December 2008, the Fund's financial assets exposed to credit risk amounted to the following:
As at
31 December 2008
US$
Investments in debt instruments
60,417,070
As at
31 December 2007
US$
66,762,483
Amounts in the above table are based on the carrying value of the instruments.
The Fund's financial assets exposed to credit risk were concentrated in the following sectors:
As at
31 December 2008
%
BRL Denominated: Government Fixed
CRC Denominated: Supranationals
MXN Denominated: Government Fixed
US$ Denominated: Corporate Fixed
US$ Denominated: Government Fixed
US$ Denominated: Supranationals
1.99
2.32
6.39
14.56
53.70
21.04
100.00
As at
31 December 2007
%
2.56
2.92
9.02
13.97
68.45
3.08
100.00
Other than outlined above, there were no significant concentrations of credit risk to counterparties at 31
December 2008 or 31 December 2007.
25
North American Income Fund plc - Deutsche Americas Bond Fund
Annual Report and Audited
Financial Statements 2008
Notes to the Financial Statements (Continued)
For the year ended 31 December 2008
2.
Financial Risk Management (Continued)
Credit risk (Continued)
Credit risk arising on debt instruments is mitigated by investing primarily in financial assets which have an
investment grade as rated by well-known rating agencies. For unrated assets, the Investment Manager assigns a
rating using an approach that is consistent with rating agencies. At 31 December, the Fund was invested in debt
securities with the following credit quality:
Portfolio by Standard & Poor's rating category
Rating
AAA
A+
B
BB+
BB
BBBB+
BBB+
BBBNot rated
Total
As at
31 December 2008
%
As at
31 December 2007
%
2.32
6.39
3.44
3.79
15.52
21.49
21.62
25.43
100.00
2.93
9.18
2.01
4.47
15.93
2.58
18.90
7.11
4.80
32.09
100.00
In accordance with the Company's policy, the Investment Manager monitors the Fund's credit position on a daily
basis, and the Board of Directors review it on a twice yearly basis. There were no material changes to the
Company’s policies and processes for managing credit risk and the methods used to measure risk since the prior
year end.
All transactions in securities are settled/ paid for upon delivery using approved brokers. The risk of default is
considered minimal, as delivery of securities sold is only made once the broker has received payment. Payment is
made on a purchase once the securities have been received by the broker. The trade will fail if either party fails to
meet its obligation.
The Custodian, Bank of Ireland, is rated A for long term debt with Standard & Poor's.
26
North American Income Fund plc - Deutsche Americas Bond Fund
Annual Report and Audited
Financial Statements 2008
Notes to the Financial Statements (Continued)
For the year ended 31 December 2008
2.
Financial Risk Management (Continued)
Liquidity risk
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial
liabilities.
The Fund had a cash position of 2.59% to net assets on 31 December 2008 (31 December 2007: 3.18%).
The Fund is exposed to daily cash redemptions of redeemable shares. The Fund generally retains a certain portion
of its assets in cash, which is available to satisfy redemptions. The Fund invests the majority of its assets in
investments that are traded in an active market and can be readily disposed of.
In accordance with the Company policy, the Investment Manager monitors the Fund's liquidity position on a daily
basis, and the Board of Directors reviews it on a twice yearly basis. The Board is informed of any unusual
liquidity issues on a timely basis. There were no material changes to the Company’s policies and processes for
managing liquidity risk and the methods used to measure risk since the prior year end.
The tables below analyse the Fund's financial liabilities into relevant maturity groupings based on the remaining
period at the balance sheet date to the contractual maturity date. The amounts in the table are the contractual
undiscounted cash flows. Balances due within twelve months equal their carrying balances as the impact of
discounting is not significant. All amounts are stated in US Dollars.
As at 31 December 2008
Accrued expenses
Bank overdraft
Redeemable participating shares
Total financial liabilities
As at 31 December 2007
Accrued expenses
Bank overdraft
Redeemable participating shares
Total financial liabilities
Less than
1 month
US$
16,561
61,742,481
61,759,042
Less than
1 month
US$
15
68,728,244
68,728,259
More than
1 month
US$
289,440
289,440
More than
1 month
US$
248,077
248,077
Redeemable Participating Shares are redeemed on demand at the holder’s option.
27
Total
US$
289,440
16,561
61,742,481
62,048,482
Total
US$
248,077
15
68,728,244
68,976,336
North American Income Fund plc - Deutsche Americas Bond Fund
Annual Report and Audited
Financial Statements 2008
Notes to the Financial Statements (Continued)
For the year ended 31 December 2008
3.
Operating Income
Year ended
31 December 2008
US$
Deposit interest
Sundry income
4.
71,818
20,447
92,265
Net (Losses)/Gains on Financial Assets and
Liabilities at Fair Value Through Profit or Loss
Year ended
31 December 2008
US$
Realised gains on investments
Realised losses on sale of futures contracts
Net currency (losses)/gains
Net change in unrealised depreciation
on investments
5.
Operating Expenses
Administration fees
Auditors' fees
Custodial fees
Directors' expenses
Directors' fees
Directors' liability insurance
Investment Management fees
Legal - administrative & general legal support
Legal - fund organisation & related business
Legal - other expenses
Marketing expenses
Other expenses
Printing/publishing fees
Professional fees
156,617
7,204
163,821
Year ended
31 December 2007
US$
1,491,036
(71,250)
(154,380)
3,811,709
301,754
(7,108,099)
(5,842,693)
(475,599)
3,637,864
Year ended
31 December 2008
US$
Year ended
31 December 2007
US$
84,995
45,124
22,395
42,722
117,332
23,062
553,619
24,857
74,901
24,342
50,446
10,236
25,067
95,259
1,194,357
28
Year ended
31 December 2007
US$
90,903
27,458
25,271
60,759
91,288
27,276
547,490
14,921
11,067
1,420
27,715
20,584
106,622
1,052,774
North American Income Fund plc - Deutsche Americas Bond Fund
Annual Report and Audited
Financial Statements 2008
Notes to the Financial Statements (Continued)
For the year ended 31 December 2008
6.
Cash and Bank Balances
As at
31 December 2008
US$
Governor and Company of the Bank of Ireland
7.
1,617,646
Debtors
As at
31 December 2008
US$
Deposit interest
Prepaid insurance
VAT rebate receivable
8.
572
13,194
13,766
Bank Overdraft
As at
31 December 2008
US$
Governor and Company of the Bank of Ireland
9.
16,561
Creditors (amounts falling due within one year)
As at
31 December 2008
US$
Administration fees
Auditors' fees
Custodial fees
Directors' expenses
Directors' fees
Investment Management fees
Legal - administrative & general legal support
Legal - fund organisation & related business
Legal - other expenses
Marketing expenses
Other expenses
Professional fees
Printing/publishing fees
7,124
26,994
1,527
37,152
84,462
41,137
22,871
9,509
6,886
17,049
9,242
5,391
20,096
289,440
29
As at
31 December 2007
US$
2,184,812
As at
31 December 2007
US$
785
18,423
9,833
29,041
As at
31 December 2007
US$
15
As at
31 December 2007
US$
8,162
28,836
1,749
27,539
79,781
48,051
21,664
10,550
4,704
5,791
7,774
3,476
248,077
North American Income Fund plc - Deutsche Americas Bond Fund
Annual Report and Audited
Financial Statements 2008
Notes to the Financial Statements (Continued)
For the year ended 31 December 2008
10.
Share Capital
Subscriber Shares - Equity
The Company has equity share capital of EUR38,092 divided into 30,000 Subscriber Shares of EUR1.27 each.
The Subscriber Shares do not form part of the Net Asset Value of the Company.
They are thus disclosed in the Financial Statements by way of this note only. In the opinion of the Directors, this
disclosure reflects the nature of the Company's investment business. The Holders of Subscriber Shares are
entitled to one vote only in respect of all their Subscriber Shares.
Redeemable Participating Shares - Liabilities
The Company has 99,992,000 shares of no par value initially designated as unclassified shares.
The Participating Shares are classified as liabilities, in accordance with Financial Reporting Standard 25 (FRS
25), as they are redeemable at the request of the Holders. The Shares are available as fully paid Redeemable
Participating Shares of the Company. They carry voting rights. The Shares issued by the Company are freely
transferable and entitled to participate equally in the profits and dividends of the Company and in its Net Assets
upon liquidation. The Shares carry no preferential or pre-emptive rights and are entitled to one vote each at all
meetings of the relevant class of Shareholders. All Shares rank pari-passu.
In accordance with the objectives listed in the Directors' Report and in the risk management policies in Note 2,
the Company strives to invest the subscriptions of redeemable participating shares in appropriate investments,
while maintaining sufficient liquidity to meet shareholder redemptions. The Company also invests in short-term
commercial paper and debt and disposes of listed securities, when necessary, to meet liquidity needs.
The Company does not have any externally imposed capital requirements.
Shares in Issue
Number of Class A Shares
Issued and Fully Paid
Balance at beginning of year
Issued during year
Redeemed during year
Total number of Class A Shares
in issue at end of year
11.
Net Asset Value
Net Asset Value
Net Asset Value per A Share
Year ended
31 December 2008
Year ended
31 December 2007
Year ended
31 December 2006
1,319,143
(768)
1,175,610
143,693
(160)
1,329,646
(154,036)
1,318,375
1,319,143
1,175,610
As at
31 December 2008
US$
As at
31 December 2007
US$
As at
31 December 2006
US$
61,742,481
68,728,244
58,786,778
46.83
52.10
50.01
30
North American Income Fund plc - Deutsche Americas Bond Fund
Annual Report and Audited
Financial Statements 2008
Notes to the Financial Statements (Continued)
For the year ended 31 December 2008
12.
Fees
The Investment Manager is entitled to receive an Investment Management fee from the Company, payable
monthly in arrears of 0.825% per annum, of the average daily Net Asset Value of the Portfolio.
The Investment Manager is entitled to receive a Performance Fee of 20% of the Net Asset Value's percentage outperformance of the Hurdle Rate during the relevant year. The 'Hurdle Rate' is a 12 month Libor plus 200 basis
points per annum return of the Net Asset Value at the beginning of the relevant year, adjusted for subscriptions
and redemptions on a time apportioned basis.
The Custodian is entitled to a fee which is accrued daily and paid monthly in arrears at an annual rate ranging
from 0.02% to 0.35% of Net Asset Value for the assets held. This is driven by the underlying sub custodian
transaction costs and holding charges and subject to a minimum monthly fee of US$1,500. The Administrator is
entitled to a fee which is accrued daily and paid monthly in arrears at an annual rate of 0.115% of Net Assets for
the first US$100 million of net assets and 0.07% of the Net Asset Value in excess thereof, subject to a minimum
monthly fee of US$5,000 as applicable.
13.
Efficient Portfolio Management
The Investment Manager may utilise derivatives and other techniques and instruments (including, but not limited
to, options, swaps, futures and forwards) whether the intention of providing protection against risks of gaining
exposure to certain markets, sectors or securities, or otherwise of increasing the return on the Assets of the
Portfolio. Such derivatives and other techniques and instruments will only be used for efficient portfolio
management purposes in accordance with the conditions and limits laid down by the Financial Regulator. The
Investment Manager may also, when facilities become available in the relevant markets, lend the Portfolio
securities and/or purchase securities subject to repurchase agreements.
14.
Related Party Transactions
Financial Reporting Standard 8 "Related Party Transactions" (FRS 8) requires the disclosure of information
relating to material transactions with parties who are deemed to be related to the reporting entity.
Investment Manager
Related parties include the Investment Manager. Amounts earned by the Investment Manager are disclosed in
Note 5.
Directors' fee
The total Directors' fee is disclosed in Note 5.
Shareholding of related parties
DB US Financial Markets Holding Corporation had an interest of 67.12% (31 December 2007: 67.08%) in the
Shares of the Company at 31 December 2008. Walter Dostmann (Company Chairman) holds one subscriber
share.
31
North American Income Fund plc - Deutsche Americas Bond Fund
Annual Report and Audited
Financial Statements 2008
Notes to the Financial Statements (Continued)
For the year ended 31 December 2008
15.
Taxation
The Company will not be liable for tax in respect of its income and gains, other than on the occurrence of a
chargeable event. A chargeable event includes any distribution or any redemption or transfer of Shares.
A chargeable event does not include:
i) Any transactions in relation to Redeemable Participating Shares held in a recognised clearing system as
designated by order of the Revenue Commissioners of Ireland; or
ii) An exchange of Redeemable Participating Shares representing one Sub-fund for another Sub-fund of the
Company; or
iii) An exchange of Redeemable Participating Shares arising on a qualifying amalgamation or reconstruction of
the Company with another fund.
A chargeable event will not occur in respect of Redeemable Participating Shareholders who are neither resident
nor ordinarily resident in Ireland and who have provided the Company with a relevant declaration to that effect.
There were no chargeable events during the year.
In the absence of an appropriate declaration, the Company will be liable for Irish tax on the occurrence of a
chargeable event and the Company reserves its right to withhold such taxes from payments to relevant
shareholders.
Capital gains, dividends and interest received may be subject to withholding taxes imposed by the country of
origin and such taxes may not be recoverable by the Company or its Shareholders. A chargeable event includes
any distribution payment to shareholders or any encashment, redemption or transfer of shares or an ending of a
Relevant Period.
16.
Soft Commission Arrangements
There are no soft commission arrangements affecting the Company during the year.
17.
Material Changes During the Year
There were no material changes affecting the Company during the year.
18.
Comparative Figures
The comparative figures are for the twelve months to 31 December 2007.
19.
Post Balance Sheet Events
There have been no events subsequent to the year end, which, in the opinion of the Directors of the Company,
may have had an impact on the Financial Statements for the year ended 31 December 2008.
20.
Approval of Financial Statements
The Financial Statements were approved by the board on 27 March 2009.
32
North American Income Fund plc - Deutsche Americas Bond Fund
Annual Report and Audited
Financial Statements 2008
Schedule of Investments
As at 31 December 2008
Holdings Financial assets at fair value through profit or loss
Fair Value
% of
USD Net Assets
Bonds - Principal Amount (a)
BRL - denominated
BRL2,500,000
Government Bonds (2007 - 2.49%)
Brazilian Government International Bond 12.5% 05/01/2016
1,199,733
1.94
Total BRL - denominated
1,199,733
1.94
Supranationals (2007 - 2.84%)
Inter-American Development Bank 7.4% 11/10/2012
1,399,922
2.27
Total Costa Rican Colon - denominated
1,399,922
2.27
Government Bonds (2007 - 8.76%)
Mexican Bonos 9% 20/12/2012
Mexican Bonos 9.5% 18/12/2014
1,469,226
2,394,434
2.38
3.88
Total Mexican Peso - denominated
3,863,660
6.26
Costa Rican Colon - denominated
CRC940,000,000
Mexican Peso - denominated
MXN19,400,000
MXN30,700,000
US Dollar - denominated
2,000,000
2,500,000
1,900,000
2,460,383
2,500,000
Corporate Bonds (2007 - 13.57%)
Banco Cruzeiro do Sul SA/Brazil 9.375% 26/09/2011
Citco Trustees Cayman Ltd 8.5% 21/12/2014**
Pemex Project Funding Master Trust FRN 03/12/2012
Peru Enhanced Pass-Through Finance Ltd FRN 31/05/2018
Petroleum Co of Trinidad & Tobago Ltd 6% 08/05/2022
1,489,479
2,292,625
1,572,291
1,353,210
2,086,333
2.41
3.71
2.55
2.19
3.38
4,000,000
2,500,000
2,470,156
3,000,000
2,500,000
8,000,000
1,000,000
1,265,442
3,700,000
Government Bonds (2007 - 66.49%)
Brazilian Government International Bond 6% 17/01/2017
Colombia Government International Bond 7.375% 27/01/2017
Dominican Republic International Bond 9.5% 27/09/2011
El Salvador Government International Bond 7.65% 15/06/2035
El Salvador Government International Bond 8.25% 10/04/2032
Mexico Government International Bond 5.625% 15/01/2017
Mexico Government International Bond 6.375% 16/01/2013
Nicaragua Government International Bond 5% 01/02/2011**
Panama Government International Bond 7.125% 29/01/2026
4,237,041
2,681,215
2,078,893
1,915,200
1,671,406
8,239,060
1,084,768
1,159,678
3,619,372
6.86
4.34
3.37
3.10
2.71
13.35
1.76
1.88
5.86
33
North American Income Fund plc - Deutsche Americas Bond Fund
Annual Report and Audited
Financial Statements 2008
Schedule of Investments (Continued)
As at 31 December 2008
Holdings Financial assets at fair value through profit or loss
Fair Value
% of
USD Net Assets
Bonds (Continued)
US Dollar - denominated (Continued)
780,000
4,800,000
Government Bonds (Continued)
Panama Government International Bond 7.25% 15/03/2015
Peruvian Government International Bond 7.35% 21/07/2025
815,933
4,943,107
1.32
8.01
2,000,000
8,000,000
2,500,000
Supranationals (2007 - 2.99%)
Central American Bank for Economic Integration 4.875% 15/01/2012
Central American Bank for Economic Integration FRN 01/06/2010**
Central American Bank for Economic Integration FRN 25/04/2015**
2,112,942
8,018,385
2,582,817
3.42
12.99
4.18
Total US Dollar - denominated
53,953,755
87.39
Total Bonds
60,417,070
97.86
Total Value of Investments
(Cost: USD 64,986,857)
60,417,070
97.86
1,601,085
2.59
Cash*
Other Net Liabilities
(275,674)
Net Assets Attributable to Holders of Redeemable
Participating Shares at bid prices
61,742,481
(0.45)
100.00
*All cash holdings are held with The Governor and Company of the Bank of Ireland.
**See Fair Value Note 1(b)(iii) relating to valuation of these investments.
Analysis of Total Net Assets
% of
Fund
Transferable securities dealt in another regulated market (includes bonds).
Other Net Assets.
97.86
2.14
100.00
(a) in US Dollars, unless noted.
34
North American Income Fund plc - Deutsche Americas Bond Fund
Annual Report and Audited
Financial Statements 2008
Schedule of Portfolio Changes (Unaudited)
For the year ended 31 December 2008 - US Dollars (unless noted)
Largest Purchases
8,000,000
MXN55,400,000
MXN57,700,000
3,800,000
3,700,000
MXN35,000,000
3,500,000
2,500,000
3,000,000
2,500,000
3,500,000
BRL4,000,000
2,000,000
3,000,000
2,000,000
3,000,000
1,900,000
2,000,000
1,500,000
2,500,000
Cost
USD
Central American Bank for Economic Integration FRN 01/06/2010
Mexican Bonos 9% 20/12/2012
Mexican Bonos 9.5% 18/12/2014
Peruvian Government International Bond 7.35% 21/07/2025
Panama Government International Bond 7.125% 29/01/2026
Mexican Bonos 10% 05/12/2024
Venezuela Government International Bond 5.75% 26/02/2016
El Salvador Government International Bond 8.25% 10/04/2032
Brazilian Government International Bond 6% 17/01/2017
Central American Bank for Economic Integration FRN 25/04/2015
Petroleos de Venezuela SA 5.25% 12/04/2017
Brazilian Government International Bond 12.5% 05/01/2016
Venezuela Government International Bond 10.75% 19/09/2013
Venezuela Government International Bond 6% 09/12/2020
Mexico Government International Bond 5.625% 15/01/2017
El Salvador Government International Bond 7.65% 15/06/2035
Pemex Project Funding Master Trust FRN 03/12/2012
Argentina Bonos 7% 12/09/2013
Uruguay Government International Bond 9.25% 17/05/2017
Peru Enhanced Pass-Through Finance Ltd FRN 31/05/2018
Largest Sales
6,900,000
MXN60,000,000
MXN61,000,000
MXN36,000,000
3,150,000
3,500,000
2,300,000
2,700,000
2,500,000
2,000,000
2,500,000
2,950,000
3,500,000
2,000,000
2,000,000
2,000,000
2,000,000
2,500,000
3,000,000
BRL3,000,000
8,000,000
5,446,723
5,284,639
4,239,500
3,981,550
3,885,820
2,957,000
2,807,500
2,745,000
2,620,755
2,405,200
2,369,511
2,164,200
2,077,500
2,072,000
1,875,000
1,862,000
1,802,000
1,788,000
1,743,750
Proceeds
USD
Mexico Government International Bond 5.625% 15/01/2017
Mexican Bonos 10% 05/12/2024
Mexican Bonos 9.5% 18/12/2014
Mexican Bonos 9% 20/12/2012
Brazilian Government International Bond 7.125% 20/01/2037
Venezuela Government International Bond 5.75% 26/02/2016
Uruguay Government International Bond 9.25% 17/05/2017
Peruvian Government International Bond 6.55% 14/03/2037
Panama Government International Bond 7.25% 15/03/2015
Peruvian Government International Bond 9.875% 06/02/2015
Uruguay Government International Bond 8% 18/11/2022
Argentina Bonos 7% 12/09/2013
Petroleos de Venezuela SA 5.25% 12/04/2017
Mexico Government International Bond 6.75% 27/09/2034
Costa Rica Government International Bond 6.548% 20/03/2014
Petrobras International Finance Co 6.125% 06/10/2016
Venezuela Government International Bond 10.75% 19/09/2013
Argentina Bonos 7% 17/04/2017
Venezuela Government International Bond 6% 09/12/2020
Brazilian Government International Bond 10.25% 10/01/2028
35
6,520,500
5,709,802
5,385,378
3,598,364
3,203,295
2,835,000
2,815,375
2,785,000
2,770,000
2,528,000
2,425,000
2,370,750
2,315,250
2,204,000
2,083,000
2,043,500
2,036,000
2,025,000
1,896,500
1,674,028