Annual Report 2013

Annual Report 2013
2013
Registered Ofﬁce
Investiční společnost České spořitelny, a. s.
Evropská 2690/17
160 00 Praha 6, Dejvice
Czech republic
Abbreviation Used
AMA (Advanced Measurement Approach) – calculation method
of capital requirements towards credit risk
AIR – Accrued interest income
Consumer Discretionary – Sector of non-essential services
ČNB – Czech National Bank
ČS – Česká spořitelna, a. s.
EMEA region – Central and Eastern Europe, Near and Middle East
and Africa
Emerging markets – Markets of developing countries
FF – Fund of Funds
High Yield bonds – Bonds bearing a credit risk with a higher
coupon
Financials – sector of ﬁnancial services
GDP – Gross domestic product
IRB (Internal Rating Based Approach) – calculation method of capital requirements towards credit risk
ISČS – Investiční společnost České spořitelny, a. s.
Large Caps – Companies with a big market capitalization
OPF – Open-Ended Mutual Fund (OEMF)
ROAA (Return On Average Assets) – proﬁtability of average assets
ROAE (Return On Average Equity) – proﬁtability of average equity
Small Caps – Companies with a lower market capitalization
STA (Standardized Approach) – calculation method of capital
requirements towards credit risk
Utilities – Sector of publicly useful services
VaR (Value at Risk) – Value of the market risk
At the end of the year 2013, Investiční společnost České spořitelny, a.s. has managed the following 31 open-ended mutual funds. The mutual
funds consists of 17 standard funds according to the Act on Collective Investment. Another 14 funds are special funds, including one Fund
for qualiﬁed investors described below the table.
When managing assets of the open-ended mutual funds, the investment company meets the legal requirements of European Union.
List of mutual funds managed as of December 31, 2013:
ISIN
Type of Fund
Type of Fund according
AKAT ČR
Abbreviated name of the Mutual Fund
CZ0008472271
CZ0008472263
CZ0008472297
CZ0008472230
CZ0008472412
X
CZ0008472289
CZ0008472248
CZ0008472404
CZ0008472321
CZ0008472339
CZ0008472347
CZ0008472305
CZ0008473261
CZ0008473147
CZ0008473279
CZ0008472255
CZ0008472735
CZ0008472750
CZ0008473188
CZ0008472974
CZ0008472800
CZ0008472792
CZ0008472818
CZ0008473451
CZ0008473469
CZ0008473477
CZ0008473865
CZ0008473030
CZ0008473659
standard
standard
standard
standard
standard
standard
standard
standard
standard
standard
standard
standard
standard
standard
special fund of funds
special fund of funds
standard
standard
standard
special fond securities
special fund of funds
special fund of funds
special fund of funds
special fund of funds
special fund of funds
special fund of funds
special fund of funds
special fond securities
special fund of funds
special fond securities
very short term bond fund
bond
bond
bond
bond
bond
equity
equity fund of funds
equity
mixed fund of funds
mixed fund of funds
mixed fund of funds
mixed fund of funds
mixed
mixed
mixed
mixed
life cycle fund
life cycle fund
money market
mixed
mixed
mixed
mixed
mixed
mixed
mixed
mixed
equity
bond
SPOROINVEST
SPOROBOND
TRENDBOND
ČS korporátní dluhopisový
HIGH YIELD dluhopisový OPF
BONDINVEST 5 tis. Kč
SPOROTREND
GLOBAL STOCKS FF
TOP STOCKS
KONZERVATIVNÍ MIX FF
VYVÁŽENÝ MIX FF
DYNAMICKÝ MIX FF
AKCIOVÝ MIX FF
Smíšený fond
OSOBNÍ PORTFOLIO 4
PLUS - OPF
FOND ŘÍZENÝCH VÝNOSŮ
ČS FOND ŽIVOTNÍHO CYKLU 2020 FF
ČS FOND ŽIVOTNÍHO CYKLU 2030 FF
LIKVIDITNÍ FOND
Privátní portfolio AR 0
Privátní portfolio AR 25
Privátní portfolio AR 50
Privátní portfolio AR 75
Privátní portfolio AR AKCIE
Privátní portfolio AR REALITY
Privátní portfolio AR ALTERNATIVNÍ INVESTICE
CERTIFIKÁTOVÝ FOND
Institucionální akciový FF
DLUHOPISOVÝ FOND
Besides publicly offered funds, ISČS manages special fund of qualiﬁed investors – Fond 2005.
In addition to mutual funds, ISČS manages also the assets of Česká spořitelna clients, this is based on contract on providing outsourcing
services for the area of clients´s asset management. ISČS manages assets worth CZK 107.3 billion in discretionary portfolios for private
and institutionals clients at the end of 2013.
Selected ISČS Financial Indicators
2013
Total Assets (CZK ´000)
Registered Capital (Equity)
(CZK ´000)
Net Asset Value (CZK ´000)
Before Tax Proﬁt (CZK ´000)
Net Proﬁt (CZK ´000)
Number of Employees
2012
2011
2010
2009
2008
2007
2006
2005
2004
266,715 198,183 214,791 265,204 243,064 280,061 381,333 357,908 325,497 654,074
70,000 70,000 70,000 70,000 70,000 70,000 70,000 70,000 70,000 70,000
162,934 137,080 126,309 115,682 175,603 196,318 296,098 289,216 261,969 597,185
57,553 42,288 41,130 41,819 114,976 38,170 166,438 157,727 121,117 115,107
46,364 33,874 34,172 30,637 90,590 26,318 126,132 119,335 91,432 85,414
22
23
24
25
22
22
21
15
24
31
Total Assets (CZK ´000)
Registered Capital (Equity)
(CZK ´000)
Net Asset Value (CZK ´000)
Before Tax Proﬁt (CZK ´000)
Net Proﬁt (CZK ´000)
Number of Employees
2003
2002
2001
2000
1999
1998
1997
1996
1995
591,477
503,364
662,393
684,284
685,489
543,325
482,940
442,090
428,325
70,000
512,874
146,183
104,309
32
70,000
409,661
260,727
231,221
58
70,000
582,637
186,783
183,800
67
70,000
624,851
55,934
41,769
77
70,000
593,337
190,677
129,493
102
70,000
473,891
84,124
40,692
107
70,000
442,649
85,693
40,753
137
70,000
411,701
82,434
41,926
162
70,000
365,823
129,339
75,913
160
Development of Asset Value (CZK ´000)
662,393
654,074
684,284
685,489
591,477
543,325
503,364
381,333
266,715
198,183
2013
2012
265,204
243,064
2010
2009
357,908
482,940
442,090
428,325
1996
1995
325,497
280,061
214,791
2011
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
Development of Net Proﬁt (CZK ´000)
231,221
183,800
126,132
91,432
90,590
46,364
2013
129,493
119,335
104,309
85,414
75,913
41,769
33,874
34,172
30,637
2012
2011
2010
40,692
40,753
41,926
1998
1997
1996
26,318
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1995
Information on Investiční společnost
České spořitelny, a. s.
According to provisions of section 210 and section 213 of the edict no. 123/2007 Coll.
1. Data on Capital (CZK thousand)
a) summary information on conditions and main characteristics of capital
and its components
b) summary value of the primary capital (Tier 1), amount of particular
positive parts and negative items
see Statement of Changes in Equity
for the year ended 31 December 2013
Primary capital (Tier 1)
c) summary value of the supplemental capital (Tier 2)
d) summary value of capital for market risk coverage (Tier 3)
Paid-in share capital incorporated in the
trade register
Required reserve funds
Retained proﬁt
Intangible assets other than goodwill
Supplemental capital (Tier 2)
Capital for market risk coverage (Tier 3)
70,000
14,000
32,358
0
0
0
e) total value of allowable items from the primary and supplemental
capitals, further independent presentation of the allowable item by reason Allowable items from primary and
of lack of expected credit risks coverage
supplemental capitals (Tier 1 and Tier 2)
(1,138)
Exceeding of others than important
adjustments over the subordinated debt B
Lack of coverage of expected credit
risks at IRB
f) summary value of capital taking in account the allowable items in respect of
the primary and supplemental capitals and of assigned limits of capital items Capital
116,358
(1,138)
0
115,220
2. Data on Capital Requirements (CZK thousand)
a) towards credit risk subdivided into requirements according to the
standardized access and according to the IRB access
Total capital requirements towards credit
risk
Total capital requirements towards credit
risk, STA access
Total capital requirements towards credit
risk, IRB access
b) towards settlement risk
c) towards position, currency and commodity risks
d) towards operational risk
e) towards business portfolio design risk
f) towards other business portfolio instruments
g) other and transitory requirements arising from transition on the IRB or
AMA access, if these accesses were used
Notice: An investment ﬁrm which provides a limited range of investment services or an investment ﬁrm with a limited dealing
on its own account that assesses the capital requirements on the basis of overhead costs instead of the capital requirements
for the operational risk, or instead of capital requirements for the credit, market and operational risks, indicates (assigns) the
amount of these capital requirements.
12,845
12,845
0
0
54
0
0
0
0
Capital requirements on the basis of
overhead costs
26,855
3. Comparative Indicators
1. capital adequacy indicator
2. indebtedness I (total debt less clients’ property / assets less clients’ property)
3. indebtedness II (total debt less clients’ property / shareholders´ capital)
4. return on average assets (ROAA, assets less clients’ property)
5. return on average equity (ROAE)
6. return on sales (proﬁt after taxes/revenues on investment services )
7. general expenses per employee
34.32 %
38.91 %
63.70 %
17.38 %
40.24 %
9.15 %
4,582
Investiční společnost České spořitelny, a. s., 2013 Annual Report
Contents
Key Figures, managed funds
Content
1
Introduction by the Chairman of the Board
2
Report of the Board of Directors on Business Activities of ISČS and the Balance of its Assets
3
Board of Directors and Supervisory Board of the Company
5
Portfolio managers ISČS
6
Report of Performance of the ISČS Open-ended Mutual Funds
8
Supervisory Board Report
69
Report on Relations
70
Information about the synthetic risk and reward indicator
73
Financial Section, Non-consolidated Financial Results
Investiční společnost České spořitelny, a. s.
Investiční společnost České spořitelny, a. s., SPOROINVEST – otevřený podílový fond
Investiční společnost České spořitelny, a. s., SPOROBOND – otevřený podílový fond
Investiční společnost České spořitelny, a. s., TRENDBOND – otevřený dluhopisový podílový fond
Investiční společnost České spořitelny, a. s., ČS korporátní dluhopisový – otevřený podílový fond
Investiční společnost České spořitelny, a. s., High Yield dluhopisový – otevřený podílový fond
Investiční společnost České spořitelny, a. s., BONDINVEST – otevřený podílový fond
Investiční společnost České spořitelny, a. s., SPOROTREND – otevřený podílový fond
Investiční společnost České spořitelny, a. s., GLOBAL STOCKS FF – otevřený podílový fond
Investiční společnost České spořitelny, a. s., TOP STOCKS – otevřený podílový fond
Investiční společnost České spořitelny, a. s., KONZERVATIVNÍ MIX FF – otevřený podílový fond
Investiční společnost České spořitelny, a. s., VYVÁŽENÝ MIX FF – otevřený podílový fond
Investiční společnost České spořitelny, a. s., DYNAMICKÝ MIX FF – otevřený podílový fond
Investiční společnost České spořitelny, a. s., AKCIOVÝ MIX FF – otevřený podílový fond
Investiční společnost České spořitelny, a. s., Smíšený fond – otevřený podílový fond
Investiční společnost České spořitelny, a. s., OSOBNÍ PORTFOLIO 4 – otevřený podílový fond
Investiční společnost České spořitelny, a. s., PLUS – otevřený podílový fond
Investiční společnost České spořitelny, a. s., FOND ŘÍZENÝCH VÝNOSŮ – otevřený podílový fond
Investiční společnost České spořitelny, a. s., ČS fond životního cyklu 2020 FF – otevřený podílový fond
Investiční společnost České spořitelny, a. s., ČS fond životního cyklu 2030 FF – otevřený podílový fond
Investiční společnost České spořitelny, a. s., LIKVIDITNÍ FOND – otevřený podílový fond
Investiční společnost České spořitelny, a. s., Privátní portfolio AR 0 – otevřený podílový fond
Investiční společnost České spořitelny, a. s., Privátní portfolio AR 25 – otevřený podílový fond
Investiční společnost České spořitelny, a. s., Privátní portfolio AR 50 – otevřený podílový fond
Investiční společnost České spořitelny, a. s., Privátní portfolio AR 75 – otevřený podílový fond
Investiční společnost České spořitelny, a. s., Privátní portfolio AR AKCIE – otevřený podílový fond
Investiční společnost České spořitelny, a. s., Privátní portfolio AR REALITY – otevřený podílový fond
Investiční společnost České spořitelny, a. s., Privátní portfolio AR ALTERNATIVNÍ INVESTICE –
otevřený podílový fond
Investiční společnost České spořitelny, a. s., Institucionální akciový FF – otevřený podílový fond
Investiční společnost České spořitelny, a. s., Dluhopisový fond – otevřený podílový fond
Investiční společnost České spořitelny, a. s., CERTIFIKÁTOVÝ FOND – otevřený podílový fond
74
77
94
113
132
149
167
184
201
219
235
251
268
285
302
319
336
353
370
386
402
418
433
449
465
481
497
513
529
546
562
578
1
Investiční společnost České spořitelny, a. s., 2013 Annual Report
Introduction by the Chairman of the Board
Ing. Martin Řezáč, CFA
Chairman of the Board of Directors
of the risk spectrum, the performance achieved by the Top Stocks
equity fund is “sparkling”, having grown by almost 34% year on
year! Reﬂection of the very good absolute but also relative performance can then be found precisely in the growing volume of assets
in our unit trusts (more than CZK 55 billion at the end of 2013),
which is accompanied by interest in regular investing. The share
of regular investors in overall sales of retail funds last year was
approximately 25%.
With a view to the low-interest environment, it is now very complicated to offer attractive appreciation to very conservative investors whose funds have in the past been concentrated in money
market funds. It is precisely conservative mixed funds which we
recommend to these investors, where the return on the small share
component (typically around 10%) more than compensates for the
potentially higher volatility of the investment. Proof of the success
of this thinking can be found not only in last year’s performance,
but in particular in the growth in volume of the assets of the Konzervativní mix unit trust by approximately CZK 4 billion.
Dear friends,
The year 2013 went down in history as a successful year for investors for many reasons: holders of units in our company’s mixed
and in particular equity funds registered very attractive appreciation of their assets, the volume of assets managed grew pleasingly
thanks to positive net sales and auspicious market development
and our company coped extremely successfully with personnel
changes and pressure on decreasing costs. We thus beat last year’s
ﬁnancial and commercial result and in addition to this, our contribution to the overall result of the Ceska sporitelna group exceeded
the expectations or rather the original plans. We also adapted ahead
of schedule to the new legal environment regulating our ﬁeld of
business.
The long-term high quality of work of the investment team was
again conﬁrmed by excess performance (so-called alpha) in the
vast majority of our unit trusts and mandates which we manage.
In relation to this, I must not forget the two ﬂagships of our product range: the performance of the conservative mixed unit trust
Konzervativní mix achieved 2.86% last year; on the opposite end
We are aware of the fact that past successes represent a clear-cut
commitment for the future. Although it is difﬁcult to realistically
expect a repetition of similarly exceptional performance of the developed share markets seen last year, we are convinced that investors in our mixed funds (among others) will be delighted with the
appreciation achieved in 2014. Besides, our leading position on the
domestic market with open-ended mutual funds does not allow us
to do anything else.
In conclusion, I would like to thank all of my colleagues from the
Ceska sporitelna ﬁnancial group for their cooperation to date and
assure our unit holders that the whole team at Investicni spolecnosti Ceske sporitelny will again be doing their utmost to ensure
the success of your investments. I wish you all the best of luck in
terms of your investments.
Ing. Martin Řezáč, CFA
Chairman of the Board of Directors
2
Investiční společnost České spořitelny, a. s., 2013 Annual Report
Report of the Board of Directors
on the Business Activities of ISČS and the Balance of Its Assets
In 2013 the economic indicators of Investiční společnost České
spořitelny, a. s. (“ISČS”, the “Company”) reached very satisfactory values that exceeded both the previous year results and also
careful expectations created in the ﬁrst half of the year by sudden events with a negative impact on company’s p/l. Nevertheless, the net proﬁt and also total contribution to the ﬁnancial group
exceeded budgeted ﬁgures thanks to positive net sales and higher
fee income, outstanding performance of portfolios resulting in
above-expected performance fees and also thanks to strict costmanagement throughout the whole period.
Investiční společnost České spořitelny reported a net proﬁt of CZK
46.4 mil in 2013. The net proﬁt will be traditionally distributed
based on a decision of the sole shareholder exercising the powers
of the general meeting in accordance with Section 190 article 2 of
Act. No. 90/2012 Coll. on business corporations.
The company’s ﬁnancial and liquidity situation was good throughout the whole period under assessment. The company did not acquire any assets in the form of ﬁnancial leasing in 2013 and does
not have overdue trade receivables.
The company’s registered capital is divided between 700 certiﬁcated shares to name that are not publicly tradable and have a nominal
value of CZK 100 th., i.e. a total of CZK 70,000 th. Since December 16th, 2009, the sole shareholder of ISČS has been Erste Asset
Management GmbH., (“EAM”), owning 100% of registered capital and associated voting rights. The general reserves have reached
the statutorily-required 20% of registered capital.
Neither ISČS nor EAM owns the assets of the open-ended mutual
funds (OEMF); they belong to unit holders in the unit trusts. The
company’s accounts are strictly separated from the accounts of the
open-ended mutual funds.
ISČS is active solely on the market of the Czech Republic and its
revenues are realised in the Czech Republic.
Trading and Assets under Management
In 2013, the gross sales of ISCS funds reached CZK 17.233 bn,
while gross redemptions reached CZK 15.389 bn. Thus the total
net sales reached CZK 1.844 bn, when outﬂows from money market funds were more than compensated inﬂows into mixed and
to some extent also into equity funds. The market share of ISCS
remained more or less unchanged (approx. 26%), as the overall
market grew by almost the same ﬁgure.
The assets under management within retail oriented ISČS funds
grew as a result of net positive sales and thanks to very good absolute performance. ISČS managed fund assets with a total market
value of CZK 55 bn at the end of 2013.
ISČS’ Market Position and Business Policy
The position of ISCS in the Czech market remained stable. Even
despite growing gross sales, the company continues to suffer from
redemptions from money market funds, mainly from Sporoinvest
as a result of low-yield environment. The share of Sporoinvest on
the retail products managed by ISCS declined from 32% at the beginning of the year down to 24% at the end of 2013. Similar to the
previous year, we did our best to improve the structure of clients
asset-allocation mix especially in a long-term horizon, i.e. more
diversiﬁed investment solutions with higher share of risky assets.
Signiﬁcant part of Sporoinvest outﬂows have been switched to
other funds, primarily mixed funds (Konzervativni Mix above all).
This positive shift in product mix naturally also resulted in better
average margin.
A signiﬁcant change of the legal and regulatory environment
materialized in 2013 (the new Investment companies and investment funds act effective since August 2013), additional changes
are valid from 1st January 2014. The changes have been recorded
both within commercial and civil code. Henceforth, ISČS internal
rulebooks and workﬂows base responds to these changes in ongoing fashion. Furthermore, the company had to amend contracts for
Board members in line with net legal set-up and we expect changes
in code of rules of the company in 2014, too. ISČS’ capital adequacy remains to be at a sufﬁcient level.
Česká spořitelna is ISČS’ main distribution partner. The provision of collective investment services is linked to high quality
clients’ money asset management and to a range of funds that is
constantly being perfected. In addition, clients are provided with
quality advisory services through Česká spořitelna branches. Such
information can also be obtained from the Client Centre of Česká
spořitelna, a. s. phone no. 800 207 207 and on ISČS and ČS websites.
Changes in Company Bodies
The board of directors has been changed during 2013. Mgr. Martin Burda decided to leave positions of CEO and Chairman of
the Board in late March. His successor became Ing. Martin Řezáč,
CFA in both positions since April. Ing. Štěpán Mikolášek, CFA,
was named into Board by a decision of the sole shareholder and,
subsequently, he was also elected as the Deputy chairman. Mr. Arjen Janmaat continues to act as a member of the Board.
Term of RNDr. Petr Bobysud in the supervisory board expired in
September. He was replaced by Mr. Christian Schön, who also
became the Deputy Chairman. Remaining members of the Supervisory Board continued to act in their positions: Mag. Heinz
Bednar (chairman), Mag. Günther Mandl, Ing. Jiří Škorvaga, CSc.,
Ing. Daniel Heler and Ing. Pavel Kráčmar (members).
3
Investiční společnost České spořitelny, a. s., 2013 Annual Report
Membership of Professional Organisations
ISČS is one of the founding members of the former Union of Investment Companies of the Czech Republic, which, after being
transformed in January 2006, became the Fund and Asset Management Association of the Czech Republic, merged with the
Capital Market Association and since 2008 has been active under
the AKAT banner. The merger of these professional associations
expanded the activities that the association covers. In addition to
support and development of the collective investment market in
sales of unit trusts, AKAT pushes for standards of honest business
and accepted practices on the capital market and also covers asset
management activities. Mr. Martin Rezac is member of the Executive Board of AKAT.
Prague, February 7, 2014
Board of Directors
Investiční společnost České spořitelny, a. s.
4
Investiční společnost České spořitelny, a. s., 2013 Annual Report
Board of Directors and Supervisory Board
of Investiční společnost České spořitelny, a. s.
Board of Directors
Supervisory Board
Ing. Martin Řezáč, CFA (1974)
Mag. Heinz Bednar (1962)
Chairman of the Board of Directors
Chairman of the Supervisory Board
– Broker License issued by MF ČR (1997),
– Graduated from the University of Economics Prague, Faculty
of International Relations (1998),
– CFA Institute (Charlottesville, Virginia, USA), active CFA
charterholder (2002)
– Professional experience 13 years
– Member of Board of Directors since September 1st,
2012 and Chairman of the Board of Directors
since April 2nd, 2013.
Ing. Štěpán Mikolášek, CFA (1977)
Vice Chairman of the Board of Directors
– Graduation of Vysoká škola ekonomická of Prague,
focus: Finance (2000)
– Chartered Financial Analyst Course,
– CFA Institute, Charlottesville, USA (2004)
– Financial Analyst Seminar, Chicago, USA (2007)
– Professional experience 14 years
– Member and Vice Chairman of the Board of Directors since
April 2nd, 2013
Adrianus Janmaat, M. A. (1964)
Member of the Board of Directors
– Graduated from the Free University of Amsterdam,
Study of Contemporary History (1988)
– Diplomatic Academy of Vienna, Vienna School
of International Studies, International Economics
and Finance (1995)
– Professional experience 19 years
– Member since December 13th, 2011
– Graduated from the Vienna University of Economics and
Business, Faculty of Social and Economic Sciences (1989)
– Professional experience 24 years
– Member since July 7th, 2011 and Chairman of the Supervisory
Board since July 7th, 2011
Christian Schön (1970)
Vice Chairman of the Supervisory Board
–
–
–
–
Graduated from the commercial academy – Waidhofen (1989)
Insead Business School Fontainebleau/Singapore (2004)
Professional experience 24 years
Member and Vice Chairman of the Supervisory Board
since October 1st, 2013
Ing. Daniel Heler (1960)
Member
– Graduated from the University of Economics Prague,
Faculty of Foreign Trade
– Short-term Attachment with J. P. Morgan, Goldman Sachs,
S. Montagu, UBS, N. M. Rothschild, Shearson and Bayerische
Hypobank, number of courses in global banking, banking proﬁtability, retail banking strategy, treasury and risk management
– Professional experience 22 years
– Member since October 1st, 2013
Günther Mandl (1959)
Member
–
–
–
–
Graduated from the Realgymnasium in Vienna (1978)
Bank qualiﬁcations of 1st and 2nd levels (1981, 1984)
Professional experience 31 years
Member since October 1st, 2013
Ing. Jiří Škorvaga, CSc. (1963)
Member
–
–
–
–
Graduated from the Institute of Chemical Technology Prague
Postgraduate study in the Czechoslovak Academy of Sciences
Professional experience 21 years
Member since October 1, 2013
Ing. Pavel Kráčmar (1966)
Member
– Graduated from ČVUT, Faculty of Nuclear Sciences and
Physical Engineering, Prague (1990)
– Number of courses at World Bank, EBRD, National Bank
of Belgium, J. P. Morgan, UBS, Erste Group Bank
– Professional experience 23 years
– Member since October 1st, 2013
5
Investiční společnost České spořitelny, a. s., 2013 Annual Report
Portfolio managers ISČS
Štěpán Mikolášek, Ing., CFA (1977)
04/2013 Deputy Chairman of the Board,
05/2013 Director of Clients Assets Management Division
– Graduate of Economic University Prague, Faculty of Finance
(2000)
– Chartered Financial Analyst Course, CFA Institute,
Charlottesville, USA (2004)
– Financial Analyst Seminar, Chicago, USA (2007)
– Professional experience in collective investment sector
14 years (thereof: Portfolio manager professional experience)
(fund, function performed from-to):
OPF BONDINVEST (2001–2002)
TRENDBOND (2001 - 04/2013)
VYVÁŽENÝ MIX FF (2000–12/2012)
Výnosový OPF – as of 7. 2. 2007
AKCIOVÝ MIX FF (2003–01/2007)
HIGH GRADE dluhopisový FF – as of 23. 10. 2007
ČS balancovaný OPF (08/2006 – 11/2009)
HIGH YIELD dluhopisový FF – as of 4. 11. 2008
High Yield dluhopisový OPF (08/2006–11/2008)
Dluhopisový fond (01/2012–04/2013)
SPOROBOND (12/2012–04/2013)
BONDINVEST (12/2012–04/2013)
OSOBNÍ PORTFOLIO 4 (12/2012–04/2013)
OPF PLUS (12/2012–04/2013)
CERTIFIKÁTOVÝ FOND (01/2013 - 04/2013)
Tomáš Ondřej, Mgr., CFA (1973)
Director of the Equity Funds Section and portfolio manager
– Graduate of Palacký University Olomouc, Faculty of Natural
Science, branch mathematics-geography; specialization
mathematical analysis (1996)
– Broker licence, Ministry of Finance (1997)
– Chartered Financial Analyst Course, CFA Institute, Charlottesville, USA (2004)
– Professional experience in collective investment sector 16
years (thereof: Portfolio manager professional experience)
(fund, function performed from-to):
OPF EUROTREND (2000–2005)
DYNAMICKÝ MIX FF (2002 – until now),
GLOBAL STOCKS FF (2003 – until now)
AKCIOVÝ MIX FF (02/2007 – until now)
ČS Fond životního cyklu 2020 FF (09/2007 – until now)
ČS Fond životního cyklu 2025 FF (09/2007 – 11/2009)
ČS Fond životního cyklu 2030 FF (09/2007 – until now)
ČS Fond životního cyklu 2040 FF (09/2007 – 11/2009)
Institucionální akciový fond FF (11/2008 – until now)
FOND CÍLENÉHO VÝNOSU – as of 1. 2. 2010
OSOBNÍ PORTFOLIO 4 (06/2009 – 12/2012)
OPF PLUS (03/2010 – 12/2012)
KONZERVATIVNÍ MIX FF (12/2012 – until now)
VYVÁŽENÝ MIX FF (12/2012 – until now)
Smíšený fond (12/2012 – until now)
Ján Hájek, Ing., CFA (1969)
05/2013 Director of the Fund Management Division
Portfolio manager
– Graduate of Economic University Prague, Faculty
of Finance (2000)
– Valuation models and M&A, Focal Financial Consulting,
Inc., San Francisco, USA (1995)
– Portfolio Investment Management, Focal Financial Consulting, Inc., San Francisco, USA (1996)
– Modern Portfolio Management, ČFA, Brno (2000)
– In-house practice –ING IM US & Latin America Funds,
Atlanta, USA (2001)
– ING IM Portfolio Management Conference, The Hague,
The Netherlands (2001)
– Chartered Financial Analyst Course, CFA Institute,
Charlottesville, USA (2002)
– In-house practice – KBC Securities, Brussels, Belgium (2003)
– CFA Analyst Seminar, Evanston, USA (2006)
– Professional experience in collective investment sector 10
years (thereof: Portfolio manager professional experience)
(fund, function performed from-to):
OPF ING český akciový fond (07/1999–07/2001)
BBL Dynamic Czech Republic Fund (07/1999–07/2001)
TOP STOCKS (08/2006 – until now)
Privátní portfolio AR AKCIE (11/2010 – until now)
Privátní portfolio AR 25 (12/2012 – until now)
Privátní portfolio AR 50 (12/2012 – until now)
Privátní portfolio AR 75 (12/2012 – until now)
Privátní portfolio AR 0 (12/2012 – until now)
OPF SPOROTREND (07/2013 – 08/2013)
Pavlína Hříbalová, Ing. (1985)
Portfolio manager
– Graduate of Economic University in Prague, Faculty of
Business Administration and Management (2011)
– Derivatives and Financial Statement Analysis, University of
Agder, Kristiansand, Norway (2009)
– Yield Curve – Construction, Modeling and Application, ČFA
and Moneco, Prague (2010)
– Professional experience in collective investment sector
6 years (thereof: Portfolio manager professional experience)
(fund, function performed from-to):
TRENDBOND (05/2013 – until now)
BONDINVEST (05/2013 – until now)
6
Investiční společnost České spořitelny, a. s., 2013 Annual Report
OSOBNÍ PORTFOLIO 4 (05/2013 – until now)
OPF PLUS (05/2013 – until now)
Dluhopisový fond (05/2013 – until now)
CERTIFIKÁTOVÝ FOND (05/2013 – until now)
Radim Kramule, Ing. (1981)
Portfolio manager
– Graduate of Economic University in Prague, Faculty of
International Trade (2006)
– M. A. in Economics of International Trade and European
Integration (09/2004 - 04/2005)
– Equity Analyst in ČS/Erste (2007 – 2011)
– Institutional Equity sales and trading (2011-2013)
– Professional experience in collective investment sector
0.5 years (thereof: Portfolio manager professional experience)
(fund, function performed from-to):
OPF SPOROTREND (09/2013 – until now)
Jiří Lengál*, Ing., Mgr., CFA (1971)
Portfolio manager
– Graduate of Charles University, Faculty of Natural Science,
Biochemical branch (1995)
– Graduate of Economic University Prague, Faculty of Finance
(1998)
– Equity Markets and Analysis, Advanced Fixed Income
Analysis, Derivatives, Moneco, Brno (1999–2002)
– Chartered Financial Analyst Course, CFA Institute, Charlottesville, USA (2005)
– Professional experience in collective investment sector
14 years (thereof: Portfolio manager professional experience)
(fund, function performed from-to):
OPF SPOROTREND (2002 – 06/2013)
Smíšený fond (02/2010 – 12/2012)
Martin Šmíd, Ing. (1973)
Portfolio manager
– Graduate of Western Bohemian University, Cheb, Department of Finance and Banking (baccalaureate education)
(1995)
– Graduate of Masaryk University, Brno, Faculty of
Economics and Administration, Department of National
Economy (graduate education) (1998)
– Fundamental Analysis and Rating, ČFA and Moneco,
Brno (1999)
– Credit Risk and Credit Derivatives, ČFA and Moneco,
Brno (1999)
– Derivatives, Citibank, Prague (2000)
– Advanced Fixed Income Analysis, Czech Finance Academy
ČFA and Moneco, Brno (2001)
– Structured Products, ČFA and Moneco, Brno (2001)
– Professional experience in collective investment sector 16
years (thereof: Portfolio manager professional experience
fund) (function performed from-to):
OPF MERKUR (2000–2002)
SPOROINVEST (2000 – until now)
ČS korporátní dluhopisový (2004 – until now)
OPATRNÝ MIX FF (07/2006 – 11/2009)
LIKVIDITNÍ FOND (09/2009 – until now)
Privátní portfolio AR ALTERNATIVNÍ INVESTICE
(11/2010 – until now)
Privátní portfolio AR REALITY (11/2010 – until now)
OPF FOND ŘÍZENÝCH VÝNOSŮ (12/2012 – until now)
HIGH YIELD dluhopisový OPF (12/2012 – until now)
SPOROBOND (05/2013 – until now)
* Jiří Lengál terminated his employment in ISČS as of June 30, 2013.
7
Investiční společnost České spořitelny, a. s., 2013 Annual Report
Report of Performance
of the ISČS Open-ended Mutual Funds in 2013
Open-ended Mutual Funds:
Investiční společnost České spořitelny, a. s., SPOROINVEST – otevřený podílový fond
Investiční společnost České spořitelny, a. s., SPOROBOND – otevřený podílový fond
Investiční společnost České spořitelny, a. s., TRENDBOND – otevřený dluhopisový podílový fond
Investiční společnost České spořitelny, a. s., ČS korporátní dluhopisový – otevřený podílový fond
Investiční společnost České spořitelny, a. s., High Yield dluhopisový – otevřený podílový fond
Investiční společnost České spořitelny, a. s., BONDINVEST – otevřený podílový fond
Investiční společnost České spořitelny, a. s., SPOROTREND – otevřený podílový fond
Investiční společnost České spořitelny, a. s., GLOBAL STOCKS FF – otevřený podílový fond
Investiční společnost České spořitelny, a. s., TOP STOCKS – otevřený podílový fond
Investiční společnost České spořitelny, a. s., KONZERVATIVNÍ MIX FF – otevřený podílový fond
Investiční společnost České spořitelny, a. s., VYVÁŽENÝ MIX FF – otevřený podílový fond
Investiční společnost České spořitelny, a. s., DYNAMICKÝ MIX FF – otevřený podílový fond
Investiční společnost České spořitelny, a. s., AKCIOVÝ MIX FF – otevřený podílový fond
Investiční společnost České spořitelny, a. s., Smíšený fond – otevřený podílový fond
Investiční společnost České spořitelny, a. s., OSOBNÍ PORTFOLIO 4 – otevřený podílový fond
Investiční společnost České spořitelny, a. s., PLUS – otevřený podílový fond
Investiční společnost České spořitelny, a. s., FOND ŘÍZENÝCH VÝNOSŮ – otevřený podílový fond
Investiční společnost České spořitelny, a. s., ČS fond životního cyklu 2020 FF – otevřený podílový fond
Investiční společnost České spořitelny, a. s., ČS fond životního cyklu 2030 FF – otevřený podílový fond
Investiční společnost České spořitelny, a. s., LIKVIDITNÍ FOND – otevřený podílový fond
Investiční společnost České spořitelny, a. s., Privátní portfolio AR 0 – otevřený podílový fond
Investiční společnost České spořitelny, a. s., Privátní portfolio AR 25 – otevřený podílový fond
Investiční společnost České spořitelny, a. s., Privátní portfolio AR 50 – otevřený podílový fond
Investiční společnost České spořitelny, a. s., Privátní portfolio AR 75 – otevřený podílový fond
Investiční společnost České spořitelny, a. s., Privátní portfolio AR AKCIE – otevřený podílový fond
Investiční společnost České spořitelny, a. s., Privátní portfolio AR REALITY – otevřený podílový fond
Investiční společnost České spořitelny, a. s., Privátní portfolio AR ALTERNATIVNÍ INVESTICE –
otevřený podílový fond
Investiční společnost České spořitelny, a. s., Institucionální akciový FF – otevřený podílový fond
Investiční společnost České spořitelny, a. s., Dluhopisový fond – otevřený podílový fond
Investiční společnost České spořitelny, a. s., CERTIFIKÁTOVÝ FOND – otevřený podílový fond
9
11
13
15
17
19
21
23
25
27
29
31
33
35
37
39
41
43
45
47
49
51
53
55
57
59
61
63
65
67
• All mentioned open-end mutual funds are accounting entities without legal personality constituted by the Investiční společnost České
spořitelny, a. s., according to the Act No. 248/92 Coll. and the Act No. 189/2004 Coll. They fully satisfy conditions of the European Union law.
• The depository bank of the funds is, on the basis of an agreement, Česká spořitelna, a. s.
• The auditor of ISČS and all the funds managed by it is Ernst & Young Audit, s. r. o.
8
Investiční společnost České spořitelny, a. s., SPOROINVEST – otevřený podílový fond, 2013 Annual Report
SPOROINVEST
Characteristics
The short term bond fund. The biggest CZK denominated fund in
the Czech Republic. Recommended investment horizon is one year
and longer. The risk weight of the fund is 2 on a scale 1-7 of the
Synthetic risk and reward indicator.
Investment strategy
The fund’s portfolio contains primarily ﬁxed or variable coupon
bonds mostly with the intention of holding them until their maturity. Investments are made also in the treasury bills, bank deposits
and eventually in derivative embedded bonds. The average duration of the mutual fund’s portfolio is maximum 18 months. Preferred are debenture securities from issuers with credit rating of at
least the investment grade.
Commentary of the fund manager
Traditional stability prevailed on the CZK money market in the
ﬁrst three quarters of the year. There was greater volatility only
on the more liquid market - FRA (Forward Rate Agreement). The
high level of free liquidity on the market pushed the yields of conservative money market instruments and short government bonds
to new lows. A change on the market only occurred in November,
when the CNB Banking Council decided to employ interventions
to signiﬁcantly weaken the Czech crown. By this decision, the
central bank ﬂooded the market, which had already been overﬂowing with free liquidity, and additional approximately CZK
200 billion. This massive inﬂow of free liquidity was naturally
immediately reﬂected in inter-bank deposit market rates, which
dropped sharply.
Most of the ﬁrst half of the year on the corporate bond market was
marked by a tightening of credit premiums which was supported
primarily by high investor demand for higher yields in an environment of low interest rates and excellent corporate sector fundamentals. Growth in credit markets was also supported by favourable
macroeconomic data from the US and German economies. A brief
correction on the market occurred in May and June, when public unrest in Turkey and an announcement of the US central bank
(Fed) of a gradual reduction of the government bond redemption
programme caused a correction on the ﬁnancial markets. Whereas
swap rates and government bond yields grew relatively signiﬁcantly, the expansion of credit premiums on investment-level corporate bonds was not striking. Regionally, bonds of countries and
companies from the Central and East-European region lost more
during the correction. Another turn came at the end of June, and
credit premiums started to tighten slowly. All previous losses were
erased in the course of two months and credit premiums gradually
stabilised. The market staggered lightly in November, when credit
premiums expanded slightly. But premiums started to tighten again
at the end of the year.
The average modiﬁed duration of the Sporoinvest portfolio was
low throughout 2013. In the ﬁrst half of the year, investment-level
corporate bonds were increased in the fund, to the detriment of
deposits and government bonds. This extended the average time to
maturity of the portfolio. The level of diversiﬁcation of the fund’s
portfolio was also up. In the second half of the year, the position in
bank and ﬁnancial institution bonds was enhanced, and the position in the bonds of non-ﬁnancial companies was reduced.
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
9
Investiční společnost České spořitelny, a. s., SPOROINVEST – otevřený podílový fond, 2013 Annual Report
Number of unit certiﬁcates issued and redeemed in 2013
Unit certiﬁcates issued
no.
1,483,288,673
CZK 000
2,777,154
Unit certiﬁcates redeemed
no.
3,106,329,023
CZK 000
5,814,883
Balance (+/−)
no.
(1,623,040,350)
CZK 000
(3,037,729)
Development of the funds main economic indicators
As of 31. 12.
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Net asset Net asset value
value per
(CZK 000)
unit (CZK)
1.0475
1.2018
1.3560
1.4765
1.5392
1.6005
1.6514
1.6864
1.7302
1.7571
1.7861
1.8106
1.7568
1.8194
1.8437
1.8423
1.8696
1.8749
Development of the value of mutual fund´s unit
certiﬁcates of OPF SPOROINVEST in 2013 (CZK)
Proﬁt / Loss
after tax
(CZK 000)
640,155
1,647,359
4,300,250
16,815,290
16,500,129
16,854,709
27,180,475
29,065,175
41,077,774
45,808,501
44,693,383
47,578,847
29,996,955
27,356,545
26,844,303
20,730,995
16,057,319
13,060,210
Performance
(%) p.a.
11,464
170,751
303,624
875,952
825,804
815,365
609,021
447,819
804,358
682,568
744,200
624,765
(1,036,010)
867,117
360,924
(2,133)
270,296
40,620
14.73
12.83
8.89
4.25
3.98
3.18
2.12
2.60
1.55
1.68
1.35
(2.97)
3.56
1.34
(0.07)
1.48
0.28
Portfolio structure by type of assets in 2013
1.8760
Floating rate bonds
72,48
1.8740
0,00
Treasury Notes
1.82
Mutual Funds
1.8720
19.56
1.8700
1.8680
6.14
Cash
Fixed income bonds
2.1.
12.1.
24.1.
5.2.
15.2.
27.2.
11.3.
21.3.
3.4.
15.4.
25.4.
10.5.
22.5.
3.6.
13.6.
25.6.
8.7.
18.7.
30.7.
9.8.
21.8.
2.9.
12.9.
24.9.
4.10.
16.10.
29.10.
8.11.
20.11.
2.12.
12.12.
27.12.
1.8660
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
10
Investiční společnost České spořitelny, a. s., SPOROBOND – otevřený podílový fond, 2013 Annual Report
SPOROBOND
Characteristics
The biggest open-ended mutual bond fund in the Czech Republic,
designed for mid-term up to long-term investment with a recommended investment horizon of three years and longer. Its yields
proceed from good-quality, primarily domestic bonds. The risk
weight of the fund is 3 on a scale 1-7 of the Synthetic risk and
reward indicator.
Investment strategy
The mutual fund invests primarily into government ﬁxed-coupon
bonds denominated in CZK, eventually also into government
bonds from other countries with a mature bond market. The currency risk is in most cases hedged. Other investments go into corporate bonds, treasury bills, bank deposits, acquired are also bonds
with embedded derivative or bonds connected with a right to their
exchange for shares or priority right for subscription of shares.
Proportional share of stock however must not exceed 10% of the
fund’s asset value. The aim of the investment policy is to provide
the unit holders a growth of their unit certiﬁcates under the condition that the total risk proﬁle of the mutual fund minimizes the
possibility of a loss in the two years horizon.
Commentary of the fund manager
In the ﬁrst half, the Czech bond market copied the developments
of German government bonds. Bond yields were down until mid
May and then they grew relatively signiﬁcantly until the end of
June (prices went down). At the beginning of the year, investors
were pessimistic as to the possible return of the European economy to growth, which was conﬁrmed by the incoming weak data
from European economies. This pressed government bond yields
to new all-time lows. On the other hand, the US economy reported positive data, and in the end, the German economy joined in
May, where data indicated possible stabilisation. Also the Spanish and Portuguese economies, for example, showed ﬁrst signs of
improvement. On the basis of that, a turn occurred on the markets
in mid May and government bond yields started to grow again.
Czech bonds copied this development. The drop in their prices was
magniﬁed by unrest in Turkey and the related sale of government
bonds of developing economies. The US central bank (Fed) fuelled
the increase in yield far more strongly, as in mid June, it clariﬁed
its steps in terms of a gradual reduction of monetary stimuli in the
economy. From mid May to the beginning of July, the yield of
ten-year Czech government bonds ﬂew up by approximately 1%.
But a part of the previous correction was erased relatively quickly,
the market consolidated and was relatively stable through to the
end of September. The gradual arrival of positive macro-economic
data from European economies in the last quarter pushed yields to
lower levels, primarily at the shorter end and in the middle of the
yield curve. The longer end of the yield curve was rather stable.
The steepness of the yield curve thus started to increase. The drop
in shorter yield was magniﬁed in November by a reduction of the
repo rate in the European Monetary Union to 0.25%, and the decision of the CNB Banking Council to resort to intervention signiﬁcantly weakened the Czech crown.
Most of the ﬁrst half of the year on the corporate bond market
was marked by a tightening of credit premiums which was supported primarily by high investor demand for higher yields in an
environment of low interest rates and excellent corporate sector
fundamentals. A short-term correction occurred on the market in
May and June, when public unrest in Turkey and an announcement of the US Fed contributed to a slight expansion of credit premiums on investment-level corporate bonds. Another turn came
at the end of June, and credit premiums started to tighten slowly.
All previous losses were erased in the course of two months and
credit premiums gradually stabilised. The market staggered lightly
in November, when credit premiums expanded slightly. Nevertheless, premiums started to tighten again at the end of the year.
Throughout the year, the fund actively managed the duration position on the CZK and EUR yield curve, thereby signiﬁcantly eliminating the pronounced growth of no-risk rates at the mid point of
the year. Also investments in credit markets reﬂected positively
in the performance of the fund. Partial changes took place in the
part of the portfolio comprised of investments in credit markets.
The share of direct investments was expanded to the detriment of
fund investments, with an enhancement primarily in the position in
subordinated bank and ﬁnancial institution bonds.
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
11
Investiční společnost České spořitelny, a. s., SPOROBOND – otevřený podílový fond, 2013 Annual Report
Number of unit certiﬁcates issued and redeemed in 2013
Unit certiﬁcates issued
no.
1,897,304,154
CZK 000
3,976,084
Unit certiﬁcates redeemed
no.
1,367,992,750
Balance (+/−)
CZK 000
2,868,566
no.
529,311,404
CZK 000
1,107,518
Development of the funds main economic indicators
As of 31. 12.
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Net asset Net asset value
value per
(CZK 000)
unit (CZK)
1.1436
1.2540
1.2999
1.3920
1.4865
1.5155
1.6105
1.6708
1.6993
1.6784
1.6507
1.7674
1.8408
1.8919
2.0947
2.1038
Development of the value of mutual fund´s unit
certiﬁcates of OPF SPOROBOND in 2013 (CZK)
Proﬁt / Loss
after tax
(CZK 000)
1,049,485
2,337,973
2,066,500
2,734,958
8,449,694
13,182,477
11,177,841
14,011,416
12,830,908
10,082,466
5,869,153
5,074,421
7,534,238
7,932,211
11,297,139
12,459,719
Performance
(%) p.a.
14,217
148,078
139,621
114,541
253,799
339,031
338,075
438,910
206,039
(148,308)
(107,352)
314,716
231,675
196,813
952,533
55,061
9.65
3.66
7.09
6.78
1.95
6.27
3.76
1.75
(1.24)
(1.65)
7.07
4.15
2.78
10.72
0.43
Portfolio structure by type of assets in 2013
Government bonds
2.1300
58.60
2.1200
17.66
Corporate bonds
2.1100
2.1000
16.77
Mutual Funds
2.0900
2.0800
2.0700
6.97
Cash
2.1.
12.1.
24.1.
5.2.
15.2.
27.2.
11.3.
21.3.
3.4.
15.4.
25.4.
10.5.
22.5.
3.6.
13.6.
25.6.
8.7.
18.7.
30.7.
9.8.
21.8.
2.9.
12.9.
24.9.
4.10.
16.10.
29.10.
8.11.
20.11.
2.12.
12.12.
27.12.
2.0600
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
12
Investiční společnost České spořitelny, a. s., TRENDBOND – otevřený dluhopisový podílový fond, 2013 Annual Report
TRENDBOND
Characteristics
The open-ended mutual bond fund, designed rather for long-term
investment with a recommended investment horizon of at least
three years. The risk weight of the fund is 4 on a scale 1-7 of the
Synthetic risk and reward indicator.
Investment strategy
The fund invests mainly in government bonds of the Central and
East European countries, which were denominated in local and
strong currencies. It could be invested also in treasury bills, bank
deposits, eventually in derivative embedded bonds. Up to 10% of
the Fund‘s value can be invested in securities of the collective investment funds. The fund purchases preferably debenture securities from issuers with the long-term credit rating from the Standard
& Poor’s or from Moody’s of at least on the investment grade. The
mutual fund is managed in such a way that it should proﬁt from
eventual decline of interest yields and, at the same time, it would
maximize its yields from the exchange rates movements.
German market and to the only slightly improving ﬁgures from its
economy. The FED (the US central bank) had a far greater impact
on yield growth when it announced a gradual discontinuation of
bond redemption.
Nervousness as to the gradual discontinuation of stimuli for the
economy was most apparent on the Turkish market; together with
problems in Syria, political problems, and high inﬂation, it increasingly discouraged conﬁdence of foreign investors. Due to that, the
Turkish lira was one of the most seriously weakening currencies
on developing markets in 2013 (25.5% against the USD). Bonds
weakened by 4.2%.
Other markets in the region were also inﬂuenced by this volatility
in bond markets, but fortunately not as signiﬁcantly as in Turkey.
Thanks to that, the Polish market strengthened by 1.4%, but the
zloty weakened by 1.8% against the euro. Hungarian bonds added
an impressive 9.8%, but the forint weakened by 5.8% with respect
to the euro.
Commentary of the fund manager
Bond markets throughout the region carried on the optimistic wave
of last year approximately until May. Bond yields reached their
new all-time lows. Central banks in Poland, Hungary, and Turkey
continued to reduce their base rates until the mid point of the year,
primarily due to weaker data from their domestic economies and
low inﬂation. Only the Hungarian central bank carried on in its
relaxed monetary policy through to the end of the year.
After a year of threats, the CNB resorted to FX interventions in
November, thereby sharply weakening the crown by 5% of its value, to around CZK 27 per euro. After that, bond yields started to
drop, primarily at the short end. At the end of the year, bond yields
were pulled up by good data from the US and the FED’s stimuli
reduction. Overall, Czech bonds added 0.12%, primarily thanks to
the drop of yields at the short end.
The situation turned in mid May and bond yields started to grow
(price drop) on all markets. In the region, this was launched by protests in Turkey against the present Erdogan government. Foreign
investors then started to close their proﬁts, thereby weakening the
Turkish lira and sending bond yields upwards. This nervousness
spilled over to other markets in the region - Hungary and Poland.
The Czech bond market also responded to developments on the
In the end, the fund’s performance ended up in slightly negative
ﬁgures. The fund’s performance sharply increased in November
thanks to CNB’s intervention. Thanks to the under-weighted position position on the Turkish market and the overweighted position
on the Polish market, the fund’s performance got above its comparative index (benchmark) at the end of the year.
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
13
Investiční společnost České spořitelny, a. s., TRENDBOND – otevřený dluhopisový podílový fond, 2013 Annual Report
Number of unit certiﬁcates issued and redeemed in 2013
Unit certiﬁcates issued
no.
462,297,845
CZK 000
619,617
Unit certiﬁcates redeemed
no.
362,202,556
Balance (+/−)
CZK 000
486,744
no.
100,095,289
CZK 000
132,873
Development of the funds main economic indicators
As of 31. 12.
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Net asset Net asset value
value per
(CZK 000)
unit (CZK)
1.0237
1.0943
1.0381
1.1544
1.1868
1.1915
1.2017
1.1689
1.2220
1.2301
1.1682
1.3477
1.3449
Development of the value of mutual fund´s unit
certiﬁcates of OPF TRENDBOND in 2013 (CZK)
Proﬁt / Loss
after tax
(CZK 000)
395,802
774,609
1,746,815
1,235,169
1,668,217
1,562,106
1,651,711
1,112,466
956,274
865,740
710,099
700,608
833,781
Performance
(%) p.a.
3,205
35,219
47,805
16,093
36,823
337
13,269
(48,306)
35,505
6,512
(42,007)
97,797
300
6.90
(5.14)
11.20
2.80
0.42
0.84
(2.73)
4.54
0.66
(5.03)
15.37
(0.21)
Portfolio structure by type of assets in 2013
1.3950
1.3700
83.61
1.3450
Government bonds
1.3200
1.2950
16.39
Cash
2.1.
12.1.
24.1.
5.2.
15.2.
27.2.
11.3.
21.3.
3.4.
15.4.
25.4.
10.5.
22.5.
3.6.
13.6.
25.6.
8.7.
18.7.
30.7.
9.8.
21.8.
2.9.
12.9.
24.9.
4.10.
16.10.
29.10.
8.11.
20.11.
2.12.
12.12.
27.12.
1.2700
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
14
Investiční společnost České spořitelny, a. s., ČS korporátní dluhopisový – otevřený podílový fond, 2013 Annual Report
ČS korporátní dluhopisový
Characteristics
The open-ended mutual bond fund, designed for mid-term investment with a recommended investment horizon of at least three
years. The risk weight of the fund is 4 on a scale 1-7 of the Synthetic risk and reward indicator.
Investment strategy
The fund invests mainly in bonds of the corporate, municipal, bank
and government issuers from emerging markets of Europe, Near
and Middle East and African countries. Investments are directed
into bonds of above mentioned issuers that are traded on public
market of the Organisation for Economic Co-operation and Development (OECD) countries.
The currency risk is hedged by means of standard hedging operations. The fund’s portfolio consists mainly of bonds with ﬁxed
and variable coupon, denominated in EUR and USD. Investments
go also into treasury bills, bank deposits, in some case even into
bonds with embedded derivative.
The fund purchases preferably debenture securities from issuers
with the long-term credit rating from the Standard & Poor’s at least
on the grade B- or from Moody’s at least on the grade B3. The
duration of the mutual fund’s portfolio shall not exceed 10 years.
Commentary of the fund manager
Most of the ﬁrst half of the year on the corporate bond market of
the East-European region was marked by a light tightening of credit premiums which was supported primarily by strong investor demand for higher yields in an environment of low interest rates and
excellent corporate sector fundamentals. A brief correction on the
market occurred in May and June, when public unrest in Turkey
and an announcement of the US central bank (Fed) of a gradual
reduction of the government bond redemption programme caused
a correction on the ﬁnancial markets. This caused a signiﬁcant
growth in swap rates as well as an expansion of the credit premiums of the bonds of Turkish and Russian companies. But the situation stabilised quickly, with a turn at the end of June, when credit
premiums started to tighten slowly and gradually erased about
a half of the previous correction. Then credit premiums stabilised
for some time and another signiﬁcant tightening only occurred
in December. The fourth quarter of last year was relatively rich
in important events in the East-European corporate bond market.
Another postponement of problems with the US budget and debt
ceiling had an impact on the market. The announcement of the
US Fed concerning a gradual cutback of the bond redemption programme starting in January 2014 was no less important and served
as a positive impulse. On the other hand, Ukraine got dangerously
close to bankruptcy. The country had been facing public ﬁnance
deﬁcit problem for some time and the option of ﬁnancing from
ﬁnancial market had closed for it entirely. At the end of the year,
these problems were accompanied by a sharp drop in currency
reserves to the very bottom. In mid December, the market situation stabilised after an announcement that aid from Russia would
be accepted in the form of a loan and a discount from the price
of imported natural gas. This averted the immediate threat of the
country’s potential bankruptcy, which was immediately positively
reﬂected in the markets.
Exposure to Russian companies prevailed in the fund for the entire
year. Next in line were Turkish and Kazakh corporate bonds. But the
share of Kazakh corporate bonds in the portfolio lessened due to the
worsening development of the country’s banking sector. Ukrainian
corporate bonds were not represented in the fund at all until May,
and subsequently, their share was very low until the end of the year.
The average modiﬁed duration of the portfolio was low for most of
the year thanks to hedging instruments.
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
15
Investiční společnost České spořitelny, a. s., ČS korporátní dluhopisový – otevřený podílový fond, 2013 Annual Report
Number of unit certiﬁcates issued and redeemed in 2013
Unit certiﬁcates issued
no.
743,790,640
CZK 000
1,031,105
Unit certiﬁcates redeemed
no.
282,392,546
Balance (+/−)
CZK 000
391,572
no.
461,398,094
CZK 000
639,533
Development of the funds main economic indicators
As of 31. 12.
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Net asset Net asset value
value per
(CZK 000)
unit (CZK)
1.0216
1.0750
1.0953
1.0857
0.8570
1.1867
1.2825
1.2265
1.3774
1.3941
Development of the value of mutual fund´s unit
certiﬁcates of OPF ČS korporátní dluhopisový
in 2013 (CZK)
Proﬁt / Loss
after tax
(CZK 000)
874,829
496,588
919,244
818,477
522,113
390,745
401,263
527,220
914,937
1,569,252
Performance
(%) p.a.
66,520
23,241
14,793
(7,738)
(151,352)
121,289
28,114
(26,439)
71,980
14,782
5.20
1.92
(0.88)
(21.06)
38.47
8.07
(4.37)
12.30
1.21
Portfolio structure by type of assets in 2013
1.4050
94.98
1.3900
Corporate bonds
1.3750
1.3600
5.02
Cash
1.3450
2.1.
12.1.
24.1.
5.2.
15.2.
27.2.
11.3.
21.3.
3.4.
15.4.
25.4.
10.5.
22.5.
3.6.
13.6.
25.6.
8.7.
18.7.
30.7.
9.8.
21.8.
2.9.
12.9.
24.9.
4.10.
16.10.
29.10.
8.11.
20.11.
2.12.
12.12.
27.12.
1.3300
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
16
Investiční společnost České spořitelny, a. s., High Yield dluhopisový – otevřený podílový fond, 2013 Annual Report
High Yield dluhopisový
Characteristics
The open-ended mutual bond fund, designed for more experienced
investors who can lay aside their invested capital for at least three
years. The risk weight of the fund is 5 on a scale 1-7 of the Synthetic risk and reward indicator.
Investment strategy
Aim of the strategy is to provide the unit holders with a longterm
positive absolute performance of their crown investment into unit
certiﬁcates, mainly by investments in bonds of corporate and bank
issuers who have the long-term credit rating from the Standard &
Poor’s or from Moody’s at least on the speculative grade. The issuers are mostly from Western and Eastern Europe.
The fund’s portfolio consists mainly of ﬁxed and variable rate
bonds issued in EUR or USD. The currency risk is hedged by
means of standard hedging operations. Moreover, derivative embedded bonds, treasury bills and bank deposits may be purchased
in the fund’s portfolio.
Commentary of the fund manager
Most of the ﬁrst half of the year on the corporate bond market was
marked by a tightening of credit premiums which was supported
primarily by strong investor demand for higher yields in an environment of low interest rates and excellent corporate sector fundamentals. Growth in credit markets was also supported by favourable macroeconomic data from the US and German economies.
A small correction on the market occurred in May and June, when
public unrest in Turkey and an announcement of the US central
bank (Fed) of a gradual reduction of the government bond redemption programme caused a correction on the ﬁnancial markets. This
caused a signiﬁcant growth in swap rates as well as an expansion of
the credit premiums of corporate bonds. The market of high-interest corporate bonds (from developed economies), however, noted
a far lesser expansion of credit spreads than the market of corporate bonds from emerging economies. The movement of the norisk yield curve (swap rates) had a far more adverse impact. The
situation stabilised again at the end of June and credit premiums
slowly started to tighten again. The second half of the year on the
market of high interest corporate bonds was marked by a tightening
of credit premiums. In this period, credit premiums of high interest
European corporate bonds tightened by approximately 130 basic
points (1.3%), with the overall yield being 6.9%. The high appreciation was supported by improving macroeconomic data, strong
fundamentals of individual companies, a historically very low level
of corporate bankruptcies (defaults) and the resolution (postponement) of problems with the budget and debt ceiling in the US.
In the ﬁrst half of the year, several changes occurred in the portfolio
which aimed at bringing the fund’s composition closer to its original focus on the European region. The positions in Greek, Portuguese, Spanish, and Italian corporate bonds were also strengthened
to allow the fund to proﬁt from stabilisation in that region. Also
the level of diversiﬁcation of the entire portfolio was increased.
Throughout the year, the fund actively managed the duration position on the EUR and USD yield curve, thereby eliminating to some
extent the pronounced growth of no-risk rates at the mid point of
the year.
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
17
Investiční společnost České spořitelny, a. s., High Yield dluhopisový – otevřený podílový fond, 2013 Annual Report
Number of unit certiﬁcates issued and redeemed in 2013
Unit certiﬁcates issued
no.
604,816,450
CZK 000
739,708
Unit certiﬁcates redeemed
no.
191,231,975
Balance (+/−)
CZK 000
233,630
no.
413,584,475
CZK 000
506,078
Development of the funds main economic indicators
As of 31. 12.
2006
2007
2008
2009
2010
2011
2012
2013
Net asset Net asset value
value per
(CZK 000)
unit (CZK)
1.0186
0.9683
0.6378
1.0587
1.1587
0.9816
1.2072
1.2534
Development of the value of mutual fund´s unit
certiﬁcates of OPF High Yield dluhopisový in 2013
(CZK)
Proﬁt / Loss
after tax
(CZK 000)
25,928
47,327
34,933
92,341
173,792
460,176
545,578
1,084,877
Performance
(%) p.a.
395
(2 916)
(17,757)
30,398
10,559
(66,362)
90,280
33,221
(4.96)
(34.13)
65.99
9.45
(15.28)
22.98
3.83
Portfolio structure by type of assets in 2013
1.2550
1.2400
90.72
1.2250
Corporate bonds
1.2100
1.1950
9.28
Cash
2.1.
12.1.
24.1.
5.2.
15.2.
27.2.
11.3.
21.3.
3.4.
15.4.
25.4.
10.5.
22.5.
3.6.
13.6.
25.6.
8.7.
18.7.
30.7.
9.8.
21.8.
2.9.
12.9.
24.9.
4.10.
16.10.
29.10.
8.11.
20.11.
2.12.
12.12.
27.12.
1.1800
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
18
Investiční společnost České spořitelny, a. s., BONDINVEST – otevřený podílový fond, 2013 Annual Report
BONDINVEST
Characteristics
An open-ended mutual bond fund was designed for mid-term investment of 2–3 years. The risk weight of the fund is 3 on a scale
1-7 of the Synthetic risk and reward indicator.
Unit certiﬁcates of this open-ended mutual fund are in the form
of a bearer security in documentary form. They were issued at the
nominal value of CZK 5,000 and CZK 50,000.
The entire proﬁt generated by the fund was used as a source for
payment of the proﬁt share, which were paid out to unit holders
once a year. With effect from April 1, 2008, the statute of the fund
has been changed according to the decision of the Czech National
Bank; this change was connected among others with the change of
the fund’s type from the income to growth type and with termination of paying-off of the proﬁt share.
Investment strategy
This fund is not offered by Česká spořitelna any more. Operation
of the type purchase, i.e. unit certiﬁcates redemption from the client will still be executed.
Commentary of the fund manager
In 2013, the Czech bond market more-or-less followed developments in developed markets. Until mid May, the Czech bond market carried on in the buoyant developments that started the year
before. After that, the trend reversed and bond yields started to
gradually climb up (bond prices were going down).
Until May, weak data kept coming in from European economies,
pressing government bond yields to new all-time lows. Later, the
German economy started to show a better outlook of its economic
developments, indicating a potential stabilisation thanks to which
a turn in bond markets came and government bond yields started
to grow (drop in prices). Czech bonds followed this development.
The US central bank (FED) fuelled the increase in yield far more
strongly, as it clariﬁed its steps in terms of a gradual reduction of
monetary stimuli in the economy. This resulted in an increase in
yields on the entire EUR and CZK yield curve. But the increase
in yields (drop in prices) was too steep, which is why yields could
not avoid a minor correction in July. Subsequently, during the rest
of the summer vacation, the macro-ﬁgures published in Europe
started to push bond yields up again. This growth was halted in
September, when the US central bank surprisingly failed to reduce
the volume of bonds purchased, creating pressure on revenue drop.
This was fuelled by protracted debates about the US budget. After
a year of threats, the Czech National Bank resorted to FX interventions in November, primarily due to low inﬂation. This resulted
in a sudden weakening of the crown against the euro by 5%, to
a level around CZK 27 per euro. This step was manifest primarily
by a drop in revenue on the short end. Thanks to that, bond prices
grew rapidly in December, driven primarily by better data from the
US and reduced monetary stimuli of the US central bank.
Corporate bond funds are represented in the fund to a lesser degree. Increased volatility was seen in credit markets only at the
end of the ﬁrst half, when credit premiums on investment-level
corporate bonds as well as high interest-rate bonds tightened. At
that time, the situation turned and credit premiums kept tightening
until the end of the year.
The Management Board of Investiční společnost České spořitelny
intends to wind the Bondinvest mutual fund down with liquidation
in 2014. The investment company is authorised to decide about
the winding down of the Bondinvest mutual fund with liquidation
pursuant to Section 375 (a) of Act No. 240/2013 Coll., on investment companies and investment funds. Within 6 months of the
winding down of the unit trust, the investment company has to
liquidate its assets and pay its debts. Following the completion of
liquidation, it will ﬁle a request with the Czech National Bank to
delete Bondinvest from the list of mutual funds, and pay unit-holders their share in the liquidation remainder within three months
(Section 376 of Act No. 240/2013 Coll., in investment companies
and investment funds).
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
19
Investiční společnost České spořitelny, a. s., BONDINVEST – otevřený podílový fond, 2013 Annual Report
Number of unit certiﬁcates issued and redeemed in 2013
Unit certiﬁcates issued
no.
0
CZK 000
0
Unit certiﬁcates redeemed
no.
1,785
Balance (+/−)
CZK 000
10,917
no.
(1,785)
CZK 000
(10,917)
Development of the funds main economic indicators
As of 31. 12.
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Net asset Net asset value
value per
(CZK 000)
unit (CZK)
5,368
5,605
5,696
5,750
5,246
5,415
5,421
5,316
5,417
5,482
5,337
5,174
4,967
5,194
5,358
5,533
6,134
6,106
Development of the value of mutual fund´s unit
certiﬁcates of OPF BONDINVEST in 2013 (CZK)
Proﬁt / Loss
after tax
(CZK 000)
238,234
184,027
178,487
195,947
257,785
286,069
386,078
426,991
438,643
446,403
434,734
363,837
174,088
144,035
96,180
74,300
71,710
60,492
Performance
(%) p.a.
22,047
24,830
20,841
23,976
11,999
17,360
16,438
14,395
11,917
16,340
4,820
(8,143)
(7,706)
6,073
3,935
2,895
7,455
(301)
13.41
15.74
10.75
4.78
7.87
6.22
2.18
5.41
3.78
1.15
(1.99)
(4.00)
4.57
3.17
3.28
10.84
(0.45)
Portfolio structure by type of assets in 2013
6,250
72.21
6,200
Government bonds
6,150
6,100
23.45
6,050
6,000
4.34
Mutual Funds
Cash
2.1.
12.1.
24.1.
5.2.
15.2.
27.2.
11.3.
21.3.
3.4.
15.4.
25.4.
10.5.
22.5.
3.6.
13.6.
25.6.
8.7.
18.7.
30.7.
9.8.
21.8.
2.9.
12.9.
24.9.
4.10.
16.10.
29.10.
8.11.
20.11.
2.12.
12.12.
27.12.
5,950
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
20
Investiční společnost České spořitelny, a. s., SPOROTREND – otevřený podílový fond, 2013 Annual Report
SPOROTREND
Characteristics
An open-ended mutual equity fund is designed for dynamic investors who believe in positive development on stock markets of the
EU member states, as well as other Eastern Europe states. It is
designated for long-term investment with a horizon of 5 to 7 years.
The risk weight of the fund is 7 on a scale 1-7 of the Synthetic risk
and reward indicator.
Investment strategy
The fund manager invests mainly into the publicly traded liquid
stock of trustful Czech and foreign issuers from the EU member
states, candidate countries as well as another East European states.
The fund invests also on the Russian and Turkish equity markets.
The sector and regional allocation of the fund’, as well as the selection of individual stocks, is managed with the aim of surpassing
of the index investments returns. The equity risk is constrained by
a broad diversiﬁcation of the portfolio; nevertheless a high value
volatility of unit certiﬁcates may occur. Moreover, also other invetment instruments permitted for the collective investment of
a standard fund by the Act on Collective Investment are bought
into the mutual fund’s portfolio.
Commentary of the fund manager
In 2013, individual stock markets performed very diversely. On the
one hand, US stocks (the main index of the US market, S&P500,
was up by 29.6%) performed very well, on the other, there was
a drop in emerging markets (the MSCI Emerging Markets index
was down by 7.1% in a CZK expression). Aside from the different rate of growth in proﬁtability, also a change in sentiments in
different regions had an impact in terms of proﬁtability growth.
Whereas in the US, relative valuation grew from signiﬁcantly pessimistic levels back to levels that correspond to the long-term average, relative stock valuation on developing markets remained still
relatively low. Central and Eastern Europe trailed these developments; with the exception of Hungarian stock which strengthened
by 7.2%, in a CZK expression, no other local market managed
to post positive proﬁtability. Turkish stock performed the worst
(-23.8%), followed by Czech (-4.8%), Russian (-1.3%), and Polish
stock (-0.5%), all in a CZK expression. The best sectors were sectors of cyclical and non-cyclical goods and services (+11.8% and
+9%, respectively), whereas the worst sectors were the electrical
engineering (-31.8%) and materials (-29.9%) sector.
The fund’s performance in 2013 was negative, as it did not manage
to erase the losses after sales on stock markets at the mid point of
the year. Furthermore, the end of the year brought increased stock
volatility in Turkey and Poland. Turkish sales were related to the
worsening development of the economy (weakening exchange rate,
high current account deﬁcit), but primarily to political struggles
between the governing elites and the Gullenists. In Poland, stock
market performance reﬂected the planned changes in the set-up of
local pension funds and their “nationalisation”. The fear of a drain
of money from the system did not materialise, but the problem was
only postponed. Even then, it had an adverse impact on the performance of the Polish market. The relatively good performance
of the Hungarian market can be attributed to the low year-on-year
comparative basis and the good performance of the pharmaceutical sector (redemption of Egis stock with a premium, high interest
in Richter stock). The performance of the Czech market depended partially on the election struggle during which certain parties
planned to introduce special sectoral taxes (primarily in the ﬁnancial and telecommunications sectors). There were also ambiguities
with respect to the potential expansion of ČEZ’s Temelín nuclear
power plant. Overall, the CEE region again showed that it is still
a developing market and it experienced higher volatility compared
to developed markets. Politics and non-standard political decisions
still play a non-negligible role, with an impact on local capital markets. The second factor that may explain the region’s worse performance in comparison with developed markets is the great weight of
companies from the material and energy sectors. Commodity prices
stagnated at best, and increasing costs of companies (pressure on
wages) had an adverse impact on the proﬁtability of the companies
concerned.
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
21
Investiční společnost České spořitelny, a. s., SPOROTREND – otevřený podílový fond, 2013 Annual Report
Number of unit certiﬁcates issued and redeemed in 2013
Unit certiﬁcates issued
no.
410,039,657
CZK 000
458,220
Unit certiﬁcates redeemed
no.
696,374,520
CZK 000
778,918
Balance (+/−)
no.
(286,334,863)
CZK 000
(320,698)
Development of the funds main economic indicators
As of 31. 12.
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Net asset Net asset value
value per
(CZK 000)
unit (CZK)
0.8177
0.9052
0.8810
0.6918
0.6998
0.8776
1.2452
1.7585
1.8858
2.1200
0.6897
1.7681
1.8051
1.1002
1.1761
1.1177
Development of the value of mutual fund´s unit
certiﬁcates of OPF SPOROTREND in 2013 (CZK)
Proﬁt / Loss
after tax
(CZK 000)
60,109
169,186
829,873
675,596
564,658
969,641
1,906,051
4,190,543
6,037,961
6,779,405
2,168,390
5,472,732
5,383,946
3,400,234
3,621,643
3,122,006
Performance
(%) p.a.
(7,518)
9,710
(2 723)
(124,705)
(61,340)
29,859
160,412
961,264
339,256
705,186
(4,561,648)
3,390,881
141,848
(2,032,531)
209,197
(178,937)
10.7
(2.67)
(21.48)
1.16
25.41
41.89
41.20
7.33
12.44
(67.47)
156.36
2.09
(39.05)
6.90
(4.97)
Portfolio structure by type of assets in 2013
1.2500
1.2000
1.1500
97.06
Equities
1.1000
1.0500
2.71
0.23
1.0000
Cash
Other
2.1.
12.1.
24.1.
5.2.
15.2.
27.2.
11.3.
21.3.
3.4.
15.4.
25.4.
10.5.
22.5.
3.6.
13.6.
25.6.
8.7.
18.7.
30.7.
9.8.
21.8.
2.9.
12.9.
24.9.
4.10.
16.10.
29.10.
8.11.
20.11.
2.12.
12.12.
27.12.
0.9500
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
22
Investiční společnost České spořitelny, a. s., GLOBAL STOCKS FF – otevřený podílový fond, 2013 Annual Report
GLOBAL STOCKS FF
Characteristics
The fund is an open-ended mutual fund of funds designed for investment of at least ﬁve years. Its portfolio shows a broad diversiﬁcation of investments focused on global markets. The risk weight
of the fund is 6 on a scale 1-7 of the Synthetic risk and reward
indicator.
Investment strategy
An aim of the fund is to provide to unit holders a long-run valuation of unit certiﬁcates primarily by investing into globally spreaded portfolio of securities of equity funds of collective investment
and in shares. Further, also other investment instruments permitted
for the collective investment of a standard fund by the Act on Collective Investment can be bought into the mutual fund’s portfolio.
Commentary of the fund manager
2013 was one of the most successful years in the history of stock
markets, as all three of the most important regions (USA, Europe,
and Japan) ended the year with an appreciation in excess of 25%
as expressed in USD. For the US S&P500 index, it was the best
year in the last sixteen years, with an appreciation of 29.6 % (!).
It closed the year with a new all-time high of 1848.4 points, high
above the original estimates of investment strategists. Whereas the
developed markets index reached an all-year performance of 24%,
emerging markets again did not do very well and closed the year
with a loss of -5%. The main feature of 2013 on stock markets was
growth in valuation which signiﬁcantly exceeded the growth of
corporate proﬁts. Thanks to that, stock prices went up signiﬁcantly.
The extremely relaxed monetary policy of the largest central banks
continued to be the main driver of growth in the P/E indicator. In
December, the US central bank, somewhat surprisingly, resorted
to a ﬁrst reduction in direct bond purchases, reducing its direct
monthly interventions from USD 85 bn to USD 75 bn. Unlike in
June, the market took the news favourably, rather as evidence of an
improvement in the macroeconomic environment. Optimism was
also supported by increasing estimates of another acceleration in
corporate proﬁtability.
In the autumn, we reinvested the fund’s portfolio in line with the new
investment strategy, into global funds instead of the current mix of
regional funds. Funds are chosen for the model portfolio on the basis
of a mix of quantitative and qualitative criteria and their weight in
the portfolio (which must not exceed 20%) is determined by broad
global diversiﬁcation, a clearly deﬁned investment style (e.g., small
cap growth, absolute return, focus investing, etc.), and the return/risk
ratio. The monetary non-hedging strategy remains unchanged.
Over the course of the year, the fund’s unit certiﬁcates added
28,0% and the fund closed the successful 2013 6.2% above its
benchmark.
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
23
Investiční společnost České spořitelny, a. s., GLOBAL STOCKS FF – otevřený podílový fond, 2013 Annual Report
Number of unit certiﬁcates issued and redeemed in 2013
Unit certiﬁcates issued
no.
130,011,785
CZK 000
64,617
Unit certiﬁcates redeemed
no.
170,761,669
Balance (+/−)
CZK 000
84,350
no.
(40,749,884)
CZK 000
(19,733)
Development of the funds main economic indicators
As of 31. 12.
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Net asset Net asset value
value per
(CZK 000)
unit (CZK)
0.8490
0.6401
0.3996
0.4367
0.4413
0.5291
0.5279
0.4981
0.2994
0.3815
0.4214
0.3861
0.4275
0.5473
Development of the value of mutual fund´s unit
certiﬁcates of OPF GLOBAL STOCKS FF in 2013
(CZK)
Proﬁt / Loss
after tax
(CZK 000)
135,936
120,471
75,486
143,263
197,592
847,554
1,038,682
788,573
382,907
463,623
454,409
360,024
342,071
415,586
Performance
(%) p.a.
(1,234)
(31,119)
(42,241)
(12,943)
6,876
72,074
(2 979)
(45,268)
(288,472)
101,587
44,267
(37,304)
37,302
93,249
(24.61)
(37.57)
9.28
1.05
19.85
(0.04)
(5.75)
(39.89)
27.42
10.46
(8.35)
10.69
28.05
Portfolio structure by type of assets in 2013
0.5500
0.5250
97.60
0.5000
Equities
0.4750
0.4500
2.40
Cash
2.1.
12.1.
24.1.
5.2.
15.2.
27.2.
11.3.
21.3.
3.4.
15.4.
25.4.
10.5.
22.5.
3.6.
13.6.
25.6.
8.7.
18.7.
30.7.
9.8.
21.8.
2.9.
12.9.
24.9.
4.10.
16.10.
29.10.
8.11.
20.11.
2.12.
12.12.
27.12.
0.4250
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
24
Investiční společnost České spořitelny, a. s., TOP STOCKS – otevřený podílový fond, 2013 Annual Report
TOP STOCKS
Characteristics
The open-ended mutual equity fund, designed for experienced investors who can afford to lay aside their invested capital for at least
ﬁve years. The selection of the particular stock titles is managed
with the aim of achieving regular positive annual valuation in CZK
terms. At the same time, the potential of a long-term evaluation of
the unit holders´ investments shall be saved. The risk weight of the
fund is 7 on a scale 1-7 of the Synthetic risk and reward indicator.
Investment strategy
The fund manager invests permanently on the stock market. The
aim is to provide unit holders with a long-term evaluation of unit
certiﬁcates through investment in a concentrated portfolio of
shares traded in stock markets, denominated in relevant currencies.
Particular shares for the long-term evaluation are purchased in the
fund via active selection (“stock picking”), whereas the proportion in the portfolio of shares and investment instruments bearing
shares risk may achieve from 66% to 100%. With regard to the
emphasis on higher concentration of the portfolio and on a longer
investment horizon of particular investments, the achieved assets
turnover is rather low. The fund holds the currency risk resulting
from investments in local currencies; this risk is actively managed
by means of available hedging instruments.
Commentary of the fund manager
In spite of the initial scepticism of retail investors and investment
strategists, developed stock markets showed very decent appreciation last year. The US stock market, measured by the S&P500
index, was up by 29.6% in 2013. The 5.7% growth in company
proﬁtability was slightly below the 6.1% proﬁtability growth
achieved in 2012. Last year’s signiﬁcantly above-average performance was, to a large degree, due to the growth in relative valuation which was still pessimistic at the beginning of 2013, in line
with the then-prevailing fears of a continued Eurozone crisis. Also
the European stock market, measured by the Europe Stoxx 600
index, grew by an above-average 17.4% last year.
In 2013, the ISČS Top Stocks fund’s unit certiﬁcate appreciated
by 33.9%. The fund ranked 5th out of 17 funds in a table of performance of internally deﬁned competitive funds. The fund’s aboveaverage performance increased the most due to the appreciation
of the shares of ISIS Pharmaceuticals, Alnylam Pharmaceuticals,
Pandora, and NPS Pharmaceuticals, which grew by more than
100% last year. On the other hand, last year’s performance was
most reduced by unsuccessful investments in Amarin and ION
Geophysical.
The volume of the fund’s assets grew from the initial CZK 1.957
bn to CZK 2.586 bn at the end of 2013, primarily thanks to the
above-average market appreciation of the fund, as there was only
a slight increase in new investments during the course of the year,
amounting to CZK 26 million.
Last year, nine major changes took place in the composition
of the portfolio. The stock of Quicksilver, Avis Budget Group,
Auxilium Pharmaceuticals, Teva Pharmaceuticals, Abercrombie
& Fitch, Alnylam Pharmaceuticals, ISIS Pharmaceuticals, Amarin, and ION Geophysical were sold out. Newly, stock of Coach,
JWNordstrom, Vertex Pharmaceuticals, Celgene, Reckitt Benckiser, Ralph Lauren, and McDonald‘s was purchased. The stock of
NPS Pharmaceuticals and Sarepta Therapeutics, which had previously been included in the “Lieutenant Dan’s Portfolio” investment idea, was promoted to constitute a separate investment idea.
The stock of Prolor Biotech, Achillion Pharmaceuticals, Amicus
Therapeutics a Rigel Pharmaceuticals was sold from the “Lieutenant Dan’s Portfolio” investment idea. Newly, the stock of Enanta
Pharmaceuticals and Sunesis Pharmaceuticals was purchased for
the “Lieutenant Dan’s Portfolio” investment idea.
Thanks to those changes, the share of the consumer sector increased by approximately 5 percentage points over the course of
last year, to 37.5% as at the end of 2013. In terms of sectoral
representation, the healthcare sector follows, with 32.2%, and the
technological sector with 25% (the share of both these sectors in
the portfolio was reduced slightly = by approximately 1 percentage point). On the other hand, the commodity sector dropped the
most due to portfolio changes, from 7.0% to 3.5% at the end of
2013. As at the last day of 2013, the portfolio of the ISČS Top
Stocks fund comprised 25 investment ideas.
Aside from the biotechnological industry which accounts for
the greatest part of the portfolio in terms of industry distribution and which is currently reaping the fruit of previous technological advances in genetic research. Other sectors I consider
interesting include certain consumer sector segments, such as
restaurants, clothing, and luxury goods. Last year, these industries noted a slow-down in their growth, due to a shift of
a portion of consumption back to automobile and real estate
purchases, which experienced only slight growth at the beginning of the economic cycle. I think that once the postponed
consumption from previous years is saturated with respect to
these two goods, consumption in the segments of non-essential
consumer goods will grow again.
The performance of a one-time investment since the establishment of the fund as at 31 December 2013 was at 7.84%. This
yield roughly corresponds to the sum of the growth in proﬁtability
of the companies historically included in the fund’s portfolio and
of the dividends collected, net of the cost of the management of
the fund. The relative valuation level currently approximates the
25
Investiční společnost České spořitelny, a. s., TOP STOCKS – otevřený podílový fond, 2013 Annual Report
level at which the fund was traded shortly after its establishment,
and although I do think that the present relative valuation level
still slightly undervalues the growth potential of the companies of
which the portfolio is currently comprised, we can likely expect
that in the future, the long-term yield of the fund will continue
to be a function of proﬁtability growth, the dividends collected,
and the costs related to the management of the fund. Naturally,
my goal is to successfully build on this long-term above-average
performance of the fund in upcoming years.
Number of unit certiﬁcates issued and redeemed in 2013
Unit certiﬁcates issued
no.
743,293,309
CZK 000
1,166,903
Unit certiﬁcates redeemed
no.
763,484,397
Balance (+/−)
CZK 000
1,140,767
no.
(20,191,088)
CZK 000
26,136
Development of the funds main economic indicators
As of 31. 12.
2006
2007
2008
2009
2010
2011
2012
2013
Net asset Net asset value
value per
(CZK 000)
unit (CZK)
1.0085
1.1396
0.4929
0.9127
1.2711
1.1328
1.2998
1.7408
Development of the value of mutual fund´s unit
certiﬁcates of OPF TOP STOCKS in 2013 (CZK)
Proﬁt / Loss
after tax
(CZK 000)
167,852
892,094
417,088
572,463
1,275,367
1,454,796
1,957,168
2,586,123
Performance
(%) p.a.
2,186
5,702
(531,559)
284,624
292,490
(181,272)
226,028
602,821
13.04
(56.75)
85.17
39.27
(10.88)
14.74
33.93
Portfolio structure by type of assets in 2013
1.7750
1.6750
96.3
1.5750
Equities
1.4750
2.90
1.3750
0.97
Cash
Others
2.1.
12.1.
24.1.
5.2.
15.2.
27.2.
11.3.
21.3.
3.4.
15.4.
25.4.
10.5.
22.5.
3.6.
13.6.
25.6.
8.7.
18.7.
30.7.
9.8.
21.8.
2.9.
12.9.
24.9.
4.10.
16.10.
29.10.
8.11.
20.11.
2.12.
12.12.
27.12.
1.2750
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
26
Investiční společnost České spořitelny, a. s., KONZERVATIVNÍ MIX FF – otevřený podílový fond, 2013 Annual Report
KONZERVATIVNÍ MIX FF
Characteristics
The open-ended proﬁle fund of funds with a recommended investment horizon of three years. The fund is suitable for investment
aims of continual formation of capital with complex investments
spreading in its portfolio and in a conservative relation among the
money, bond and stock markets. The risk weight of the fund is 3 on
a scale 1-7 of the Synthetic risk and reward indicator.
continued to be the main driver of growth in the value of the P/E
indicator. In December, the US central bank, somewhat surprisingly, resorted to a ﬁrst reduction in direct bond purchases, reducing its direct monthly interventions from USD 85 bn to USD 75
bn. Unlike in June, the market took the news favourably, rather as
evidence of an improvement in the macroeconomic environment.
Optimism was also supported by increasing estimates of another
acceleration in corporate proﬁtability.
Investment strategy
The aim of the mutual fund is to achieve in a long-run horizon
a performance higher than a benchmark. Means collected in the
mutual fund are invested primarily in securities of money market
funds that supplement securities of bond funds and, in a smaller
extent, equity funds. Further, also shares, bonds and money market
instruments permitted by the law for the collective investment of
a standard fund may be purchased into the mutual fund’s portfolio. The portion of the stock part of the mutual fund’s assets shall
be actively managed; the neutral weight of this part of the mutual
fund’s assets shall be 10%.
Commentary of the fund manager
2013 was one of the most successful years in the history of stock
markets, as all three of the most important regions (USA, Europe,
and Japan) ended the year with an appreciation in excess of 25%
as expressed in USD. For the US S&P 500 index, it was the best
year in the last 16 years, with an appreciation of 29.6% (!). It
closed the year with a new all-time high of 1848.4 points, high
above the original estimates of investment strategists. Whereas the
developed markets index reached an all-year performance of 24%,
emerging markets again did not do very well and closed the year
with a loss of -5%. The main feature of 2013 on stock markets was
growth in valuation which signiﬁcantly exceeded the growth of
corporate proﬁts. Thanks to that, stock prices went up signiﬁcantly.
The extremely relaxed monetary policy of the largest central banks
Overall, the stock market did well on the background of increasing yields of government bonds of economically strong countries
- for example, the yield of US 10-year bonds grew from 1.76% to
3.03%. The expected drop in Czech bonds did not happen, which
is why the fund’s mixed portfolio proﬁted fully from growth in
the prices of stocks, in which we were signiﬁcantly overweighted
throughout 2013 (the share of equities in the fund’s assets was
around 13%). The segment of high-yield bonds again added an
additional positive yield of 6%; here, the shift in the government
bond curve was more than offset by the tightening of the credit
spread. The segment of European high-yield bonds that were represented in the portfolio throughout the year, achieved a total yield
of 8.3%. The spread on the European periphery tightened; but no
such bonds (Italy, Spain), were represented in the portfolio. For the
commodity market, 2013 was again negative, with a -9.6% drop
in the general DJUBS index, and for example gold lost 28% of its
value.
Over the course of the year, the fund’s unit certiﬁcates added 2.9%
and the fund closed the successful 2013 1.1% above its benchmark. The fund noted the highest increase in its assets since its
foundation, from CZK 1.169 bn at the end of 2012 to CZK 5.207
bn at the end of 2013.
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
27
Investiční společnost České spořitelny, a. s., KONZERVATIVNÍ MIX FF – otevřený podílový fond, 2013 Annual Report
Number of unit certiﬁcates issued and redeemed in 2013
Unit certiﬁcates issued
no.
4,007,346,065
CZK 000
4,350,403
Unit certiﬁcates redeemed
no.
367,671,093
CZK 000
399,323
Balance (+/−)
no.
3,639,674,972
CZK 000
3,951,080
Development of the funds main economic indicators
As of 31. 12.
2005
2006
2007
2008
2009
2010
2011
2012
2013
Net asset Net asset value
value per
(CZK 000)
unit (CZK)
1.0098
1.0238
1.0263
0.8759
0.9846
1.0199
1.0022
1.0695
1.1001
Development of the value of mutual fund´s unit
certiﬁcates of OPF KONZERVATIVNÍ MIX FF
in 2013 (CZK)
Proﬁt / Loss
after tax
(CZK 000)
521,766
1,529,383
3,112,624
1,983,128
1,592,332
1,484,404
1,272,471
1,169,409
5,206,923
2,426
21,498
(4,476)
(411,946)
176,940
53,891
(25,476)
76,642
86,433
1.37
0.22
(14.65)
12.41
3.59
(1.74)
6.72
2.86
Portfolio structure by type of assets in 2013
51.80
1.1025
Performance
(%) p.a.
1.0950
Money market, Deposits
11.90
Equities
1.0875
12.20
Government bonds
1.0800
1.0725
24.10
2.1.
12.1.
24.1.
5.2.
15.2.
27.2.
11.3.
21.3.
3.4.
15.4.
25.4.
10.5.
22.5.
3.6.
13.6.
25.6.
8.7.
18.7.
30.7.
9.8.
21.8.
2.9.
12.9.
24.9.
4.10.
16.10.
29.10.
8.11.
20.11.
2.12.
12.12.
27.12.
1.0650
Other bonds
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
28
Investiční společnost České spořitelny, a. s., VYVÁŽENÝ MIX FF – otevřený podílový fond, 2013 Annual Report
VYVÁŽENÝ MIX FF
Characteristics
The open-ended proﬁle fund of funds, designed for more experienced investors who can lay aside their invested capital for at least
four years. The fund is suitable for investment aims of gradual
capital creation with observance of rules of a steady distribution of
investments (diversiﬁcation) in its portfolio. The risk weight of the
fund is 4 on a scale 1-7 of the Synthetic risk and reward indicator.
Investment strategy
Means collected in the mutual fund are invested primarily in securities of funds of collective investment. The balanced portfolio
consists in its basic neutral situation of 70% bond portion and an
important, in neutral position 30% stock portion. The stock portion
includes the most important global stock markets. Further, also
shares, bonds and money market instruments permitted by the law
for the collective investment of a standard fund can be purchased
into the mutual fund’s portfolio.
Commentary of the fund manager
2013 was one of the most successful years in the history of stock
markets, as all three of the most important regions (USA, Europe,
and Japan) ended the year with an appreciation in excess of 25%
as expressed in USD. For the index, it was the best years in the last
16 year, with an appreciation of 29.6% (!). It closed the year with
a new all-time high of 1848.4 points, high above the original estimates of investment strategists. Whereas the developed markets
index reached an all-year performance of 24%, emerging markets
again did not do very well and closed the year with a loss of -5%.
The main feature of 2013 on stock markets was growth in valuation which signiﬁcantly exceeded the growth of corporate proﬁts.
Thanks to that, stock prices went up signiﬁcantly. The extremely
relaxed monetary policy of the largest central banks continued to
be the main driver of growth in the value of the P/E indicator. In
December, the US central bank, somewhat surprisingly, resorted
to a ﬁrst reduction in direct bond purchases, reducing its direct
monthly interventions from USD 85 bn to USD 75 bn. Unlike in
June, the market took the news favourably, rather as evidence of an
improvement in the macroeconomic environment. Optimism was
also supported by increasing estimates of another acceleration in
corporate proﬁtability.
Overall, the stock market did well on the background of increasing
government bonds of economically strong countries - for example,
the yield of US 10-year bonds grew from 1.76% to 3.03%. The
expected drop in Czech bonds did not happen, which is why the
fund’s mixed portfolio proﬁted fully from growth in the prices of
stocks, in which we were signiﬁcantly overweighted throughout
2013 (the share of stock in the fund’s assets was around 33%). The
segment of high-yield bonds again added an additional positive
yield of 6%; here, the shift in the government bond curve was more
than offset by the tightening of the credit spread. The segment of
European high-yield bonds that were represented in the portfolio
throughout the year, achieved a total yield of 8.3%. The spread on
the European periphery tightened; but no such bonds (Italy, Spain),
were represented in the portfolio. For the commodity market, 2013
was again negative, with a -9.6% drop in the general DJUBS index, and for example gold lost 28% of its value.
Over the course of the year, the fund’s unit certiﬁcates added 6.9%
and the fund closed the successful 2013, 1.7% above its benchmark.
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
29
Investiční společnost České spořitelny, a. s., VYVÁŽENÝ MIX FF – otevřený podílový fond, 2013 Annual Report
Number of unit certiﬁcates issued and redeemed in 2013
Unit certiﬁcates issued
no.
326,798,395
CZK 000
432,784
Unit certiﬁcates redeemed
no.
215,727,785
CZK 000
283,879
Balance (+/−)
no.
111,070,610
CZK 000
148,905
Development of the funds main economic indicators
As of 31. 12.
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Net asset Net asset value
value per
(CZK 000)
unit (CZK)
1.1518
1.0990
1.0143
1.0753
1.1459
1.2462
1.2643
1.2777
0.9962
1.1492
1.2018
1.1466
1.2731
1.3614
Development of the value of mutual fund´s unit
certiﬁcates of OPF VYVÁŽENÝ MIX in 2013 (CZK)
Proﬁt / Loss
after tax
(CZK 000)
1,603,375
982,370
571,296
394,142
401,093
870,971
1,964,598
3,251,424
2,351,667
2,342,155
2,191,894
1,735,864
1,581,432
1,842,425
(120,142)
(205,266)
(82,874)
(18,038)
2,311
39,984
26,731
10,013
(729,812)
304,553
98,480
(93,299)
175,756
112,088
(4.58)
(7.71)
6.01
6.57
5.96
1.49
1.04
(22.03)
15.36
4.58
(4.59)
11.03
6.94
Portfolio structure by type of assets in 2013
30.10
1.3850
Performance
(%) p.a.
Government bonds
1.3600
26.00
Other bonds
1.3350
1.3100
12.40
1.2850
Cash
31.50
2.1.
12.1.
24.1.
5.2.
15.2.
27.2.
11.3.
21.3.
3.4.
15.4.
25.4.
10.5.
22.5.
3.6.
13.6.
25.6.
8.7.
18.7.
30.7.
9.8.
21.8.
2.9.
12.9.
24.9.
4.10.
16.10.
29.10.
8.11.
20.11.
2.12.
12.12.
27.12.
1.2600
Equities
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
30
Investiční společnost České spořitelny, a. s., DYNAMICKÝ MIX FF – otevřený podílový fond, 2013 Annual Report
DYNAMICKÝ MIX FF
Characteristics
The open-ended proﬁle fund of funds, designed for experienced
investors; the recommended period of investment is at least ﬁve
years. The basis of the balanced portfolio in the neutral position
consists of the same portion of securities of equity funds and securities of bond funds of collective investment The risk weight of the
fund is 6 on a scale 1-7 of the Synthetic risk and reward indicator.
Investment strategy
The fund manager purchases into the fund’s portfolio mainly securities of money market funds, further also of bond and equity funds
of collective investment. Also shares, bonds and other investment
instruments permitted by the law for the collective investment of
a standard fund may be purchased into the mutual fund’s portfolio.
The portion of the stock part of the mutual fund’s portfolio is actively managed; the neutral weight of this part of the mutual fund’s
assets shall be 50%. The fund bears the currency risk connected
with investments in local currencies. This risk is in case of the
stock portion actively managed by means of accessible hedging
instruments.
Commentary of the fund manager
2013 was one of the most successful years in the history of equity
markets, as all three of the most important regions (USA, Europe,
and Japan) ended the year with an appreciation in excess of 25%
as expressed in USD. For the US S&P 500 index, it was the best
year in the last 16 years, with an appreciation of 29.6% (!). It
closed the year with a new all-time high of 1848.4 points, high
above the original estimates of investment strategists. Whereas the
developed markets index reached an all-year performance of 24%,
emerging markets again did not do very well and closed the year
with a loss of -5%. The main feature of 2013 on equity markets
was growth in valuation which signiﬁcantly exceeded the growth
of corporate proﬁts. Thanks to that, equity prices went up signiﬁcantly. The extremely relaxed monetary policy of the largest central banks continued to be the main driver of growth in the value
of the P/E indicator. In December, the US central bank, somewhat
surprisingly, resorted to a ﬁrst reduction in direct bond purchases, reducing its direct monthly interventions from USD 85 bn to
USD 75 bn. Unlike in June, the market took the news favourably,
rather as evidence of an improvement in the macroeconomic environment. Optimism was also supported by increasing estimates of
another acceleration in corporate proﬁtability.
Overall, the equity market did well on the background of increasing
yields from government bonds of economically strong countries for example, the yield of US 10-year bonds grew from 1.76% to
3.03%. The expected drop in Czech bonds did not happen, which
is why the fund’s mixed portfolio proﬁted fully from growth in
the prices of stocks, in which we were signiﬁcantly overweighted
throughout 2013 (the share of equities in the fund’s assets was
around 55%). But the segment of high-yield bonds again added
an additional positive yield of 6%; here, the shift in the government bond curve was more than set off by the tightening of the
credit spread. The segment of European high-yield bonds that were
represented in the portfolio throughout the year, achieved a total
yield of 8.3%. The spread on the European periphery tightened;
but no such bonds (Italy, Spain), were represented in the portfolio.
For the commodity market, 2013 was again negative, with a -9.6%
drop in the general DJUBS index, and for example gold lost 28%
of its value.
Over the course of the year, the fund’s unit certiﬁcates added
11.4% and the fund closed the successful 2013 2.9% above its
benchmark.
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
31
Investiční společnost České spořitelny, a. s., DYNAMICKÝ MIX FF – otevřený podílový fond, 2013 Annual Report
Number of unit certiﬁcates issued and redeemed in 2013
Unit certiﬁcates issued
no.
55,251,770
CZK 000
68,563
Unit certiﬁcates redeemed
no.
72,709,246
Balance (+/−)
CZK 000
90,398
no.
(17,457,476)
CZK 000
(21,835)
Development of the funds main economic indicators
As of 31. 12.
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Net asset Net asset value
value per
(CZK 000)
unit (CZK)
1.0659
1.1075
0.9566
1.0456
1.1221
1.2480
1.2600
1.2921
0.8579
1.0513
1.1151
1.0403
1.1676
1.3009
Development of the value of mutual fund´s unit
certiﬁcates of OPF DYNAMICKÝ MIX FF in 2013
(CZK)
Proﬁt / Loss
after tax
(CZK 000)
1,525,851
220,503
159,666
186,519
290,831
477,683
777,741
1,142,524
695,277
785,760
751,254
596,480
586,530
630,755
Performance
(%) p.a.
(11,105)
(29,789)
(14,961)
(5,662)
4,446
35,097
6,273
15,376
(377,549)
143,735
43,253
(47,232)
69,143
66,060
3.90
(13.63)
9.30
7.32
8.78
0.95
2.53
(33.60)
22.54
6.07
(6.71)
12.24
11.42
Portfolio structure by type of assets in 2013
1.3100
22.80
Government bonds
1.2850
1.2600
1.2350
18.10
Other bonds
1.2100
4.10
1.1850
Cash
55.00
Equities
2.1.
12.1.
24.1.
5.2.
15.2.
27.2.
11.3.
21.3.
3.4.
15.4.
25.4.
10.5.
22.5.
3.6.
13.6.
25.6.
8.7.
18.7.
30.7.
9.8.
21.8.
2.9.
12.9.
24.9.
4.10.
16.10.
29.10.
8.11.
20.11.
2.12.
12.12.
27.12.
1.1600
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
32
Investiční společnost České spořitelny, a. s., AKCIOVÝ MIX FF – otevřený podílový fond, 2013 Annual Report
AKCIOVÝ MIX FF
Characteristics
The fund is designed for experienced investors with capital market
who can afford to lay aside their invested capital for at least ﬁve
years. The risk weight of the fund is 6 on a scale 1-7 of the Synthetic risk and reward indicator.
Investment strategy
The fund manager now invests the money means in securities of
money market funds and securities of bond and equity funds of
collective investment. Further, also shares, bonds and other investment instruments permitted by the law for the collective investment
of a standard fund may be purchased into the mutual fund’s portfolio. The portion of the stock part of the mutual fund’s portfolio as
well as the regional and sector structure are actively manager. The
neutral weight of the stock part of the mutual fund’s assets shall be
75%. The fund bears the currency risk connected with investments
in local currencies. This risk is in case of the stock portion actively
managed by means of accessible hedging instruments.
Commentary of the fund manager
2013 was one of the most successful years in the history of stock
markets, as all three of the most important regions (USA, Europe,
and Japan) ended the year with an appreciation in excess of 25%
as expressed in USD. For the US S&P 500 index, it was the best
year in the last 16 years, with an appreciation of 29.6% (!). It
closed the year with a new all-time high of 1848.4 points, high
above the original estimates of investment strategists. Whereas the
developed markets index reached an all-year performance of 24%,
emerging markets again did not do very well and closed the year
with a loss of -5%. The main feature of 2013 on stock markets was
growth in valuation which signiﬁcantly exceeded the growth of
corporate proﬁts. Thanks to that, stock prices went up signiﬁcantly.
The extremely relaxed monetary policy of the largest central banks
continued to be the main driver of growth in the P/E indicator. In
December, the US central bank, somewhat surprisingly, resorted
to a ﬁrst reduction in direct bond purchases, reducing its direct
monthly interventions from USD 85 bn to USD 75 bn. Unlike in
June, the market took the news favourably, rather as evidence of an
improvement in the macroeconomic environment. Optimism was
also supported by increasing estimates of another acceleration in
corporate proﬁtability.
Overall, the stock market did well on the background of increasing
yields from government bonds of economically strong countries for example, the yield of US 10-year bonds grew from 1.76% to
3.03%. The expected drop in Czech bonds did not happen, which
is why the fund’s mixed portfolio proﬁted fully from growth in
the prices of stocks, in which we were signiﬁcantly overweighted
throughout 2013 (the share of stock in the fund’s assets was around
80%). The segment of high-yield bonds added an additional positive yield of 6%; here, the shift in the government bond curve was
more than offset by the tightening of the credit spread. The segment of European high-yield bonds that were represented in the
portfolio throughout the year achieved a total yield of 8.3%. The
spread on the European periphery tightened; but no such bonds (Italy, Spain), were represented in the portfolio. For the commodity
market, 2013 was again negative, with a -9.6% drop in the general
DJUBS index, and for example gold lost 28% of its value over the
course of last year.
Over the course of the year, the fund’s unit certiﬁcates added
17.0% and the fund closed the successful 2013 3.4% above its
benchmark.
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
33
Investiční společnost České spořitelny, a. s., AKCIOVÝ MIX FF – otevřený podílový fond, 2013 Annual Report
Number of unit certiﬁcates issued and redeemed in 2013
Unit certiﬁcates issued
no.
39,730,088
CZK 000
58,634
Unit certiﬁcates redeemed
no.
60,873,223
CZK 000
89,895
Balance (+/−)
no.
(21,143,135)
CZK 000
(31,261)
Development of the funds main economic indicators
As of 31. 12.
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Net asset Net asset value
value per
(CZK 000)
unit (CZK)
1.0837
1.1571
1.2293
1.2973
1.3232
1.4647
1.5535
1.5891
1.6390
0.9691
1.2646
1.3406
1.1903
1.3469
1.5761
Development of the value of mutual fund´s unit
certiﬁcates of OPF AKCIOVÝ MIX FF in 2013 (CZK)
Proﬁt / Loss
after tax
(CZK 000)
6,249,111
4,533,427
1,069,727
777,462
1,043,138
1,001,035
1,122,498
1,106,759
1,258,875
633,747
777,721
757,935
611,224
625,890
699,068
Performance
(%) p.a.
5,191
16,208
162,010
24,197
65,620
50,642
62,436
22,654
32,098
(474,702)
182,421
43,293
(79,812)
78,338
104,439
6.77
6.24
5.53
2.00
10.69
6.08
2.41
3.13
(40.87)
30.49
6.01
(11.21)
13.16
17.02
Portfolio structure by type of assets in 2013
1.5900
1.5400
8.00
Government bonds
1.4900
9.40
1.4400
3.80
Other bonds
Cash
1.3900
78.80
2.1.
14.1.
24.1.
5.2.
15.2.
27.2.
11.3.
21.3.
3.4.
15.4.
25.4.
10.6.
22.6.
3.6.
13.6.
25.6.
8.7.
18.7.
30.7.
9.8.
21.8.
2.9.
12.9.
24.9.
4.10.
18.10.
29.10.
8.11.
20.11.
2.12.
12.12.
27.12.
1.3400
Equities
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
34
Investiční společnost České spořitelny, a. s., Smíšený fond – otevřený podílový fond, 2013 Annual Report
Smíšený fond
Characteristics
The fund is distinguished by higher turnover of equity portfolio
and it is intended for those, who prefer active portfolio management and who wish to proﬁt from relatively short-term investment
occasions. Investor should be able to accept also a longer period
of negative performance of the unit certiﬁcate value; therefore the
fund is suitable for experienced investors who can afford to invest
the capital at least for 5 years. Minimal investment into the fund is
1,000,000 CZK. The risk weight of the fund is 5 on a scale 1-7 of
the Synthetic risk and reward indicator.
Investment strategy
The fund’s target is to bring a higher yield than Czech government
bonds and global equities using active changes of the weight of
the equity part of portfolio, currency structure and modiﬁed duration of the bond part of portfolio. In minority, the instruments with
the corporate bonds exposure can be added into the portfolio. The
fund is managed with an emphasis on the total absolute return. The
neutral weight of government bonds shall be 70% of the fund assets. This part of the portfolio is actively managed with respect to
the interest risk on the CZK and EUR yield curve. The mutual fund
bears a currency risk arising from investments in the local currencies; this risk is actively managed.
Commentary of the fund manager
2013 was one of the most successful years in the history of stock
markets, as all three of the most important regions (USA, Europe,
and Japan) ended the year with an appreciation in excess of 25%
as expressed in USD. For the US S&P 500 index, it was the best
year in the last 16 years, with an appreciation of 29.6% (!). It
closed the year with a new all-time high of 1848.4 points, high
above the original estimates of investment strategists. Whereas the
developed markets index reached an all-year performance of 24%,
emerging markets again did not do very well and closed the year
with a loss of -5%. The main feature of 2013 on stock markets was
growth in valuation which signiﬁcantly exceeded the growth of
corporate proﬁts. Thanks to that, stock prices went up signiﬁcantly.
The extremely relaxed monetary policy of the largest central banks
continued to be the main driver of growth in the value of the P/E
indicator. In December, the US central bank, somewhat surprisingly, resorted to a ﬁrst reduction in direct bond purchases, reducing its direct monthly interventions from USD 85 bn to USD 75
bn. Unlike in June, the market took the news favourably, rather as
evidence of an improvement in the macroeconomic environment.
Optimism was also supported by increasing estimates of another
acceleration in corporate proﬁtability.
Overall, the stock market did well on the background of increasing
government bonds of economically strong countries - for example,
the yield of US 10-year bonds grew from 1.76% to 3.03%. The
expected drop in Czech bonds did not happen, which is why the
fund’s mixed portfolio proﬁted fully from growth in the prices of
stocks, in which we were signiﬁcantly overweighted throughout
2013 (the share of stock in the fund’s assets was between 35%
and 42%).
Over the course of the year, the fund’s unit certiﬁcates added
9.0% and the fund closed the successful 2013, 1.19% above its
benchmark.
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
35
Investiční společnost České spořitelny, a. s., Smíšený fond – otevřený podílový fond, 2013 Annual Report
Number of unit certiﬁcates issued and redeemed in 2013
Unit certiﬁcates issued
no.
357,760
CZK 000
295,235
Unit certiﬁcates redeemed
no.
300,686
Balance (+/−)
CZK 000
250,757
no.
57,074
CZK 000
44,478
Development of the funds main economic indicators
As of 31. 12.
Net asset Net asset value
value per
(CZK 000)
unit (CZK)
2010
2011
2012
2013
1,046.0369
769.6892
795.3785
841.5033
Development of the value of mutual fund´s unit
certiﬁcates of OPF Smíšený fond in 2013 (CZK)
Proﬁt / Loss
after tax
(CZK 000)
1,819,636
2,074,114
2,143,345
2,315,692
Performance
(%) p.a.
119,237
(432,519)
69,202
197,071
(26.42)
3.34
9.03
Portfolio structure by type of assets in 2013
850
37.80
835
Equities
820
805
11.80
Others
790
50.40
2.1.
14.1.
24.1.
5.2.
15.2.
27.2.
11.3.
21.3.
3.4.
15.4.
25.4.
10.6.
22.6.
3.6.
13.6.
25.6.
8.7.
18.7.
30.7.
9.8.
21.8.
2.9.
12.9.
24.9.
4.10.
18.10.
29.10.
8.11.
20.11.
2.12.
12.12.
27.12.
775
Bonds and Money market
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
36
Investiční společnost České spořitelny, a. s., OSOBNÍ PORTFOLIO 4 – otevřený podílový fond, 2013 Annual Report
OSOBNÍ PORTFOLIO 4
Characteristics
Growth fund of funds with a prevalence of securities of bond and
equity funds of collective investment, designed for medium-term
investments. Recommended time of investment is at least four
years. Suitable for investors, whose reference currency is CZK and
who are interested not only in mediated investments in a stable,
broadly differentiated and liquid portion of the portfolio, but also
in a long-term successive capital creation. The risk weight of the
fund is 3 on a scale 1-7 of the Synthetic risk and reward indicator.
Investment strategy
The long-term aim of the fund is to achieve an average yearly appreciation that surpasses the level achieved by Czech government
bonds. At the same time, the effort is focused on results, when
the maximum loss during one year would be with a high probability limited on 3%. The priority aim however is to achieve a 100%
hedging of the invested capital during every four years, starting
always at June 1. Fund uses ﬁnancial derivatives for the currency
hedging.
Commentary of the fund manager
The fund was invested primarily in conservative instruments
throughout the year. Most of the portfolio was made up primarily
by Czech government bonds and money market instruments. In
2013, the Czech bond market more-or-less followed developments
in developed markets. Until mid May, the Czech bond market carried on in the buoyant developments that started the year before.
After that, the trend reversed and bond yields started to gradually
climb up (bond prices were going down).
Incoming weak data from European economies pressed government bond yields to new all-time lows. In May, the German econ-
omy started to show a better outlook in terms of its economic
development. Thanks to that, a turn in bond markets came and
government bond yields started to grow (a drop in prices). Czech
bonds followed this development. But the US central bank (FED)
fuelled the increase in yield far more strongly, as it clariﬁed its
steps in terms of a gradual reduction of monetary stimuli in the
economy. But the increase in yields (drop in prices) was too
steep, which is why yields could not avoid a minor correction in
July. Subsequently, during the rest of the summer vacation, the
macro-ﬁgures published in Europe started to push bond yields up
again. This growth was halted in September, when the US central
bank surprisingly failed to reduce the volume of bonds purchased,
creating pressure on revenue drop. This was fuelled by protracted
debates about the US budget. After a year of threats, the Czech
National Bank resorted to FX interventions in November, primarily due to low inﬂation. This resulted in a sudden weakening of
the crown against the euro by 5%, to a level around CZK 27. This
step was manifest primarily by a drop in revenue on the short
end. Bond prices grew rapidly in December, driven primarily by
better data from the US and reduced monetary stimuli of the US
central bank.
In spite of the increase in yields, primarily on the longer end, their
levels are still very low. That kept us from going for riskier assets.
In terms of riskier assets, the fund’s portfolio only features corporate bonds, high-yield bonds, and a real estate fund.
Increased volatility was seen in credit markets only at the end of
the ﬁrst half, when credit premiums on investment-level corporate bonds as well as high interest-rate bonds tightened. At that
moment, the situation turned and credit premiums kept tightening
until the end of the year.
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
37
Investiční společnost České spořitelny, a. s., OSOBNÍ PORTFOLIO 4 – otevřený podílový fond, 2013 Annual Report
Number of unit certiﬁcates issued and redeemed in 2013
Unit certiﬁcates issued
no.
393,591,261
CZK 000
438,890
Unit certiﬁcates redeemed
no.
482,552,419
Balance (+/−)
CZK 000
538,287
no.
(88,961,158)
CZK 000
(99,397)
Development of the funds main economic indicators
As of 31. 12.
2009
2010
2011
2012
2013
Net asset Net asset value
value per
(CZK 000)
unit (CZK)
1.0555
1.0791
1.0693
1.1145
1.1184
Development of the value of mutual fund´s unit
certiﬁcates of OPF OSOBNÍ PORTFOLIO 4 in 2013
(CZK)
Proﬁt / Loss
after tax
(CZK 000)
51,813
678,166
2,058,632
1,959,245
1,866,535
Performance
(%) p.a.
1,812
7,640
(21,985)
81,939
6,688
2.24
(0.91)
4.23
0.35
Portfolio structure by type of assets in 2013
1.1220
11.14
Corporate bonds
3.71
Other bonds
1.1190
1.1160
26.03
Money market, Deposits
1.1130
1.1100
50.17
1.1070
2.45
6.50
Cash
2.1.
14.1.
24.1.
5.2.
15.2.
27.2.
11.3.
21.3.
3.4.
15.4.
25.4.
10.6.
22.6.
3.6.
13.6.
25.6.
8.7.
18.7.
30.7.
9.8.
21.8.
2.9.
12.9.
24.9.
4.10.
18.10.
29.10.
8.11.
20.11.
2.12.
12.12.
27.12.
Alternative investments
Government bonds
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
38
Investiční společnost České spořitelny, a. s., PLUS – otevřený podílový fond, 2013 Annual Report
PLUS
Characteristics
The investment is suitable for CZK investors, who are interested in
stable, widely diversiﬁed and liquid part of portfolio composed of
bond. Nevertheless if the prognosis of the equity, commodity and
real estate market is positive, these investors consider proﬁtable
to invest signiﬁcant part of assets into the investment instrument
bearing the risk of such markets. The recommended investment
horizon is at least 6 year. The risk weight of the fund is 4 on a scale
1-7 of the Synthetic risk and reward indicator.
Investment strategy
The investment policy aims to provide unit certiﬁcates holders
a long-term appreciation of unit certiﬁcate and to bring an average
annual performance higher than the performance of Czech govenrnment bonds. The fund invests primarily into the bond funds of
collective investment and equity funds of collective investments.
The fund makes an effort to limit with high probability the maximal possible loss during one year on 5%. The fund aims to protect
100% of invested capital (without a formal guarantee) during every 6 years horizon, beginning always on December 31. Currency,
credit and interest risk is actively managed by means of available
hedging instruments
Commentary of the fund manager
The fund was invested primarily in conservative instruments
throughout the year. Most of the portfolio was made up primarily
by Czech government bonds and money market instruments. In
2013, the Czech bond market more-or-less followed developments
in advanced markets. Until mid May, the Czech bond market carried on in the buoyant developments that started the year before.
After that, the trend reversed and bond yields started to gradually
climb up (bond prices were going down).
ic development. Thanks to that, a turn in bond markets came and
government bond yields started to grow (a drop in prices). Czech
bonds followed this development. But the US central bank (FED)
fuelled the increase in yield far more strongly, as it clariﬁed its
steps in terms of a gradual reduction of monetary stimuli in the
economy. But the increase in yields (drop in prices) was too steep,
which is why yields could not avoid a minor correction in July.
Subsequently, during the rest of the summer vacation, the macro-ﬁgures published in Europe started to push bond yields up
again. This growth was halted in September, when the US central
bank surprisingly failed to reduce the volume of bonds purchased,
creating pressure on revenue drop. This was fuelled by protracted
debates about the US budget. After a year of threats, the Czech National Bank resorted to FX interventions in November, primarily
due to low inﬂation. This resulted in a sudden weakening of the
crown against the euro by 5%, to a level around CZK 27. This step
was manifest primarily by a drop in revenue on the short end. In
December, however, bond prices grew rapidly, driven primarily by
better data from the US and reduced monetary stimuli of the US
central bank.
In spite of the increase in yield, primarily on the longer end, their
levels are still very low. That kept us from going for riskier assets.
In terms of higher-risk assets, the fund’s portfolio only features
corporate bonds, high-yield bonds, and a real estate fund.
Increased volatility was seen in credit markets only at the end of
the ﬁrst half, when credit premiums on investment-level corporate bonds as well as high interest-rate bonds tightened. But at that
moment, the situation turned and credit premiums kept tightening
until the end of the year.
Incoming weak data from European economies pressed government bond yields to new all-time lows. In May, the German
economy started to show a better outlook in terms of its econom-
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
39
Investiční společnost České spořitelny, a. s., PLUS – otevřený podílový fond, 2013 Annual Report
Number of unit certiﬁcates issued and redeemed in 2013
Unit certiﬁcates issued
no.
67,004,239
CZK 000
68,173
Unit certiﬁcates redeemed
no.
58,592,202
Balance (+/−)
CZK 000
59,611
no.
8,412,037
CZK 000
8,562
Development of the funds main economic indicators
As of 31. 12.
2010
2011
2012
2013
Net asset Net asset value
value per
(CZK 000)
unit (CZK)
1.0169
0.9873
1.0190
1.0181
Development of the value of mutual fund´s unit
certiﬁcates of OPF PLUS in 2013 (CZK)
Proﬁt / Loss
after tax
(CZK 000)
70,653
140,338
194,425
202,831
Performance
(%) p.a.
684
(3,167)
5,324
(157)
(2.91)
3.21
(0.09)
Portfolio structure by type of assets in 2013
Government bonds
1.0225
52.67
12.47
1.0200
Corporate bonds
2.60
Other bonds
1.0175
20.13
Money market, Deposits
1.0150
1.0125
10.00
Cash
2.13
2.1.
14.1.
24.1.
5.2.
15.2.
27.2.
11.3.
21.3.
3.4.
15.4.
25.4.
10.6.
22.6.
3.6.
13.6.
25.6.
8.7.
18.7.
30.7.
9.8.
21.8.
2.9.
12.9.
24.9.
4.10.
18.10.
29.10.
8.11.
20.11.
2.12.
12.12.
27.12.
1.0100
Alternative investments
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
40
Investiční společnost České spořitelny, a. s., FOND ŘÍZENÝCH VÝNOSŮ – otevřený podílový fond, 2013 Annual Report
FOND ŘÍZENÝCH VÝNOSŮ
Characteristics
It is a balanced open-ended mutual fund with a prevalence bonds
and money market instruments, which additionally invests into
stock. The recommended investment horizon is from two to three
years. The fund is suitable even for less experienced investors interested in participation in a possible growth of European stock
markets. The risk weight of the fund is 3 on a scale 1-7 of the
Synthetic risk and reward indicator.
ﬂowing with free liquidity, and additional approximately CZK
200 billion. This massive inﬂow of free liquidity was naturally
immediately reﬂected in inter-bank deposit market rates, which
dropped sharply.
Commentary of the fund manager
Most of the ﬁrst half of the year on the corporate bond market was
marked by a tightening of credit premiums which was supported
primarily by high investor demand for higher yields in an environment of low interest rates and excellent corporate sector fundamentals. Growth in credit markets was also supported by favourable
macroeconomic data from the US and German economies. A brief
correction on the market occurred in May and June, when public
unrest in Turkey and an announcement of the US central bank
(Fed) of a gradual reduction of the government bond redemption
programme caused a correction on the ﬁnancial markets. Whereas
swap rates and government bond yields grew relatively signiﬁcantly, the expansion of credit premiums on investment-level corporate
bonds was not striking. Another turn came at the end of June, and
credit premiums started to tighten slowly. All previous losses were
erased in the course of two months and credit premiums gradually
stabilised. The market staggered lightly in November, when credit
premiums expanded slightly. But premiums started to tighten again
at the end of the year.
Traditional stability prevailed on the CZK money market in the
ﬁrst three quarters of the year. There was greater volatility only
on the more liquid market - FRA (Forward Rate Agreement). The
high level of free liquidity on the market pushed the yields of conservative money market instruments and short government bonds
to new lows. A change on the market only occurred in November,
when the CNB Banking Council decided to employ interventions
to signiﬁcantly weaken the Czech crown. By this decision, the
central bank ﬂooded the market, which had already been over-
The low interest rate environment did not allow the fund to invest
into equities. During the ﬁrst half of the year, the composition of
the portfolio of Fond řízených výnosů changed, with an increase in
the share of investment-level corporate bonds to the detriment of
government bonds. This also extended the average maturity of the
portfolio. The level of diversiﬁcation of the fund’s portfolio was up
signiﬁcantly. The average modiﬁed portfolio duration was kept at
very low levels using hedging instruments.
Investment strategy
The fund manager invests in domestic short duration bonds, in
money market instruments and in European shares with an expected high dividend yield, low volatility and low evaluation compared
to their book value. A weight of shares and instruments bearing
a risk of shares shall not exceed 25% of the mutual fund’s assets
value. In the case of a decline in value of shares in the fund’s portfolio during the calendar year, their weight shall be gradually lowered so that the bond portion of the portfolio would make possible
to achieve a positive appreciation of the fund in the given year. The
criterion of the fund is to achieve a positive performance in every
calendar year.
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
41
Investiční společnost České spořitelny, a. s., FOND ŘÍZENÝCH VÝNOSŮ – otevřený podílový fond, 2013 Annual Report
Number of unit certiﬁcates issued and redeemed in 2013
Unit certiﬁcates issued
no.
10,900,998
CZK 000
15,410
Unit certiﬁcates redeemed
no.
30,994,052
Balance (+/−)
CZK 000
43,823
no.
(20,093,054)
CZK 000
(28,413)
Development of the funds main economic indicators
As of 31. 12.
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Net asset Net asset value
value per
(CZK 000)
unit (CZK)
1.0751
1.1532
1.1964
1.2474
1.2547
1.2757
1.3156
1.3310
1.3284
1.2903
1.3858
1.3992
1.3841
1.4151
1.4138
Development of the value of mutual fund´s unit
certiﬁcates of OPF Fond řízených výnosů in 2013
(CZK)
Proﬁt / Loss
after tax
(CZK 000)
7,734,753
5,127,905
1,057,377
923,048
871,467
826,385
775,029
745,213
681,260
593,728
594,991
573,338
531,306
501,816
472,954
Performance
(%) p.a.
244,962
(565,325)
59,101
13,080
4,865
18,031
24,346
8,884
(1,272)
(18,271)
41,685
5,641
(5,864)
11,410
(449)
7.26
3.75
4.26
0.59
1.67
3.11
1.19
(0.20)
(2.87)
7.40
0.97
(1.08)
2.24
(0.09)
Portfolio structure by type of assets in 2013
Floating rate bonds
1.4225
54.19
1.4190
1.4155
1.4120
9.97
Mutual Funds
1.4085
20.93
1.4050
14.86
Cash
0.05
2.1.
14.1.
24.1.
5.2.
15.2.
27.2.
11.3.
21.3.
3.4.
15.4.
25.4.
10.5.
22.5.
3.6.
13.6.
25.6.
8.7.
18.7.
30.7.
9.8.
21.8.
2.9.
12.9.
24.9.
4.10.
16.10.
29.10.
8.11.
20.11.
2.12.
12.12.
27.12.
Equities
Fixed income bonds
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
42
Investiční společnost České spořitelny, a. s., ČS fond životního cyklu 2020 FF – otevřený podílový fond, 2013 Annual Report
ČS fond životního cyklu 2020 FF
Characteristics
It is an open-ended mutual fund of funds with an optimized Investment strategy adjusted to long-term investment horizon. This fund
is designed for investors who plan to retire in the year 2020 or
around this year. The risk weight of the fund is 4 on a scale 1-7 of
the Synthetic risk and reward indicator.
Investment strategy
The fund invests namely in securities of equity funds, bond funds,
money market funds and in funds with performance linked to the
development of commodities price according to a beforehand stipulated scheme of assets allocation, prepared for fund’s unit holders
who plan to retire around the year 2020. The stock portion shall be
primarily invested by means of index funds unit certiﬁcates. The
fund’s construction allows from the very beginning for higher representation of assets classes with a higher yield potential (shares,
commodities) and successive decrease of their exposition in such
way that the fund in fact will be transformed in a money market
fund at the end of the investment horizon. In the last two years
before the target date will be the volatility of the share values near
0 degree.
Commentary of the fund manager
2013 was one of the most successful years in the history of equity markets, as all three of the most important regions (USA, Europe, and Japan) ended the year with an appreciation in excess of
25% as expressed in USD. For the US S&P 500 index, it was the
best year in the last 16 years, with an appreciation of 29.6% (!).
It closed the year with a new all-time high of 1848.4 points, high
above the original estimates of investment strategists. Whereas
the developed markets index reached an all-year performance of
24%, emerging markets again did not do very well and closed
the year with a loss of -5%. The main feature of 2013 on equity
markets was growth in valuation which signiﬁcantly exceeded
the growth of corporate proﬁts. Thanks to that, stock prices went
up signiﬁcantly. The extremely relaxed monetary policy of the
largest central banks continued to be the main driver of growth
in the value of the P/E indicator. In December, the US central
bank, somewhat surprisingly, resorted to a ﬁrst reduction in direct bond purchases, reducing its direct monthly interventions
from USD 85 bn to USD 75 bn. Unlike in June, the market took
the news favourably, rather as evidence of an improvement in
the macroeconomic environment. Optimism was also supported by increasing estimates of another acceleration in corporate
proﬁtability.
Overall, the equity market did well on the background of increasing government bonds of economically strong countries - for example, the yield of US 10-year bonds grew from 1.76% to 3.03%.
The expected drop in Czech bonds did not happen, which is why
the fund’s mixed portfolio proﬁted fully from growth in the prices
of stocks, in which we were signiﬁcantly overweighted throughout
2013 (the share of equities in the fund’s assets was around 38%).
The segment of high-yield bonds again added an additional positive yield of 6%; here, the shift in the government bond curve was
more than offset by the tightening of the credit spread. The segment of European high-yield bonds that were represented in the
portfolio throughout the year, achieved a total yield of 8.3%. The
spread on the European periphery tightened; but no such bonds
(Italy, Spain), were represented in the portfolio. For the commodity market, 2013 was again negative, with a -9.6% drop in
the general DJUBS index, and for example gold lost 28% of its
value. The share of commodities in the portfolio throughout the
year amounted to 4.5%.
Over the course of the year, the fund’s unit certiﬁcates added 6.7%
and the fund closed the successful 2013 1.3% above its benchmark.
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
43
Investiční společnost České spořitelny, a. s., ČS fond životního cyklu 2020 FF – otevřený podílový fond, 2013 Annual Report
Number of unit certiﬁcates issued and redeemed in 2013
Unit certiﬁcates issued
no.
116,803,168
CZK 000
114,242
Unit certiﬁcates redeemed
no.
93,826,491
Balance (+/−)
CZK 000
91,731
no.
22,976,677
CZK 000
22,511
Development of the funds main economic indicators
As of 31. 12.
2007
2008
2009
2010
2011
2012
2013
Net asset Net asset value
value per
(CZK 000)
unit (CZK)
0.9966
0.6992
0.8646
0.9002
0.8855
0.9429
1.0060
Development of the value of mutual fund´s unit
certiﬁcates of OPF ČS fond životního cyklu 2020 FF
in 2013 (CZK)
Proﬁt / Loss
after tax
(CZK 000)
14,636
197,072
388,133
458,764
454,951
500,637
557,247
Performance
(%) p.a.
(55)
(44,317)
63,763
18,423
(24,148)
46,168
34,097
(29.84)
23.66
4.12
(4.97)
10.22
6.69
Portfolio structure by type of assets in 2013
Bonds and Money market
1.0100
58.50
0.9950
0.9800
37.10
Equities
0.9650
0.9500
4.40
Commodities
2.1.
14.1.
24.1.
5.2.
15.2.
27.2.
11.3.
21.3.
3.4.
15.4.
25.4.
10.5.
22.5.
3.6.
13.6.
25.6.
8.7.
18.7.
30.7.
9.8.
21.8.
2.9.
12.9.
24.9.
4.10.
16.10.
29.10.
8.11.
20.11.
2.12.
12.12.
27.12.
0.9350
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
44
Investiční společnost České spořitelny, a. s., ČS fond životního cyklu 2030 FF – otevřený podílový fond, 2013 Annual Report
ČS fond životního cyklu 2030 FF
Characteristics
The fund is an open-ended mutual fund of funds with an optimized
Investment strategy adjusted to a long-term investment horizon.
This fund is designed for investors who plan to retire in the year
2030 or around this year. The risk weight of the fund is 6 on a scale
1-7 of the Synthetic risk and reward indicator.
Investment strategy
The fund invests namely in securities of equity funds, bond funds,
money market funds and in funds with performance linked to the
development of commodities price according to a beforehand stipulated scheme of assets allocation, prepared for fund’s unit holders
who plan to retire around the year 2030. The stock portion will be
primarily invested by means of index funds unit certiﬁcates. The
fund’s construction allows from the very beginning for higher representation of assets classes with a higher yield potential (shares,
commodities) and successive decrease of their exposition in such
way that the fund in fact will be transformed in a money market
fund at the end of the investment horizon. In the last two years
before the target date will be the volatility of the share values near
0 degree.
Commentary of the fund manager
2013 was one of the most successful years in the history of stock
markets, as all three of the most important regions (USA, Europe,
and Japan) ended the year with an appreciation in excess of 25%
as expressed in USD. For the US S&P 500 index, it was the best
year in the last 16 years, with an appreciation of 29.6% (!). It
closed the year with a new all-time high of 1848.4 points, high
above the original estimates of investment strategists. Whereas the
developed markets index reached an all-year performance of 24%,
emerging markets again did not do very well and closed the year
with a loss of -5%. The main feature of 2013 on stock markets was
growth in valuation which signiﬁcantly exceeded the growth of
corporate proﬁts. Thanks to that, stock prices went up signiﬁcantly.
The extremely relaxed monetary policy of the largest central banks
continued to be the main driver of growth in the value of the P/E
indicator. In December, the US central bank, somewhat surprisingly, resorted to a ﬁrst reduction in direct bond purchases, reducing its direct monthly interventions from USD 85 bn to USD 75
bn. Unlike in June, the market took the news favourably, rather as
evidence of an improvement in the macroeconomic environment.
Optimism was also supported by increasing estimates of another
acceleration in corporate proﬁtability.
Overall, the stock market did well on the background of increasing
government bonds of economically strong countries - for example,
the yield of US 10-year bonds grew from 1.76% to 3.03%. The
expected drop in Czech bonds did not happen, which is why the
fund’s mixed portfolio proﬁted fully from growth in the prices of
stocks, in which we were signiﬁcantly overweighted throughout
2013 (the share of stock in the fund’s assets was around 70%). The
segment of high-yield bonds again added an additional positive
yield of 6%; here, the shift in the government bond curve was more
than offset by the tightening of the credit spread. The segment of
European high-yield bonds that were represented in the portfolio
throughout the year, achieved a total yield of 8.3%. The spread on
the European periphery tightened; but no such bonds (Italy, Spain),
were represented in the portfolio. For the commodity market, 2013
was again negative, with a -9.6% drop in the general DJUBS index, and for example gold lost 28% of its value. The share of commodities in the portfolio throughout the year amounted to 4.5%.
Over the course of the year, the fund’s unit certiﬁcates added 13.1%
and the fund closed the successful 2013 2% above its benchmark.
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
45
Investiční společnost České spořitelny, a. s., ČS fond životního cyklu 2030 FF – otevřený podílový fond, 2013 Annual Report
Number of unit certiﬁcates issued and redeemed in 2013
Unit certiﬁcates issued
no.
64,826,756
CZK 000
53,319
Unit certiﬁcates redeemed
no.
39,069,894
Balance (+/−)
CZK 000
32,155
no.
25,756,862
CZK 000
21,164
Development of the funds main economic indicators
As of 31. 12.
2007
2008
2009
2010
2011
2012
2013
Net asset Net asset value
value per
(CZK 000)
unit (CZK)
0.9943
0.5733
0.7212
0.7577
0.6905
0.7643
0.8648
Development of the value of mutual fund´s unit
certiﬁcates of OPF ČS fond životního cyklu 2030 FF
in 2013 (CZK)
Proﬁt / Loss
after tax
(CZK 000)
13,361
40,166
78,567
74,786
85,163
106,819
143,115
Performance
(%) p.a.
(101)
(21,114)
12,452
3,812
(7,679)
9,652
15,131
(42.34)
25.80
5.06
(8.87)
10.69
13.15
Portfolio structure by type of assets in 2013
Equities
0.8800
67.70
0.8600
0.8400
4.40
0.8200
Commodities
0.8000
27.90
0.7800
Bonds and Money market
2.1.
14.1.
24.1.
5.2.
15.2.
27.2.
11.3.
21.3.
3.4.
15.4.
25.4.
10.5.
22.5.
3.6.
13.6.
25.6.
8.7.
18.7.
30.7.
9.8.
21.8.
2.9.
12.9.
24.9.
4.10.
16.10.
29.10.
8.11.
20.11.
2.12.
12.12.
27.12.
0.7600
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
46
Investiční společnost České spořitelny, a. s., LIKVIDITNÍ FOND – otevřený podílový fond, 2013 Annual Report
LIKVIDITNÍ FOND
Characteristics
Commentary of the fund manager
This fund is categorized as a money market fund. The recommended investment horizon is 6 months. The fund is designed for
investors who endeavour to achieve a higher appreciation of their
investments than the ordinary bank time deposits interests in the
lower investment ranges. The risk weight of the fund is 1 on a scale
1-7 of the Synthetic risk and reward indicator.
Traditional stability prevailed on the CZK money market in the
ﬁrst three quarters of the year. There was greater volatility only
on the more liquid market - FRA (Forward Rate Agreement). The
high level of free liquidity on the market pushed the yields of conservative money market instruments and short government bonds
to new lows. The yield of six-month to one-year treasury bills in
that period held between 0.11% and 0.16%. A change on the market only occurred in November, when the CNB Banking Council
decided to employ interventions to signiﬁcantly weaken the Czech
crown. By this decision, the central bank ﬂooded the market,
which had already been overﬂowing with free liquidity, and additional approximately CZK 200 billion. This massive inﬂow of free
liquidity was naturally immediately reﬂected in inter-bank deposit
market rates. The three-month Pribor rate dropped by 0.06% and
the one-year rate by as much as 0.10%. Also rates on the FRA
market dropped by approximately 0.15% to 0.20%. Treasury bill
yields reached their all-time lows, when the subsequent auction of
nine-month bills ended with a yield of 0.07%.
Investment strategy
The fund’s portfolio contains predominantly Czech treasury bills,
Czech ﬁxed interest government bonds with a maturity under one
year and Czech variable interest government bonds. The time deposits in banks are also used. The securities are hold until their
maturity. The weighted average maturity of fund assets do not exceed 6 months. The weighted average life of fund assets do not
exceed 12 months. The aim of the Investment strategy is to provide
the most conservative investors with such a money market fund,
which will assure the appreciation of invested means with the
highest level of safety and reliability; all that under condition of retaining of the invested capital value (without a formal guarantee).
The average modiﬁed duration of the portfolio of the Likviditní
fond throughout the year held at low levels, as did average maturity. For most of the year, the portfolio was dominated by short-term
and medium-term deposits. The share of treasury bills grew in the
last quarter.
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
47
Investiční společnost České spořitelny, a. s., LIKVIDITNÍ FOND – otevřený podílový fond, 2013 Annual Report
Number of unit certiﬁcates issued and redeemed in 2013
Unit certiﬁcates issued
no.
784,062,223
CZK 000
802,389
Unit certiﬁcates redeemed
no.
1,328,731,611
CZK 000
1,359,879
Balance (+/−)
no.
(544,669,388)
CZK 000
(557,490)
Development of the funds main economic indicators
As of 31. 12.
2009
2010
2011
2012
2013
Net asset Net asset value
value per
(CZK 000)
unit (CZK)
1.0040
1.0125
1.0194
1.0236
1.0229
Development of the value of mutual fund´s unit
certiﬁcates of OPF Likviditní fond in 2013 (CZK)
Proﬁt / Loss
after tax
(CZK 000)
452,437
633,302
882,842
1,408,968
850,763
Performance
(%) p.a.
915
5,216
4,771
4,793
(716)
0.85
0.68
0.41
(0.07)
Portfolio structure by type of assets in 2013
1.0240
Cash
49.50
1.0237
2.40
9.40
Fixed income bonds
Floating rate bonds
1.0234
1.0231
38.70
Treasury Notes
2.1.
14.1.
24.1.
5.2.
15.2.
27.2.
11.3.
21.3.
3.4.
15.4.
25.4.
10.5.
22.5.
3.6.
13.6.
25.6.
8.7.
18.7.
30.7.
9.8.
21.8.
2.9.
12.9.
24.9.
4.10.
16.10.
29.10.
8.11.
20.11.
2.12.
12.12.
27.12.
1.0228
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
48
Investiční společnost České spořitelny, a. s., Privátní portfolio AR 0 – otevřený podílový fond, 2013 Annual Report
Privátní portfolio AR 0
Characteristics
Commentary of the fund manager
This is a special fund of funds. The recommended time of investing is at least two years. The minimum initial purchase amount of
unit certiﬁcates is CZK 1 million; but ISČS may issue unit certiﬁcates even for a lower amount. The risk weight of the fund is 3 on
a scale 1-7 of the Synthetic risk and reward indicator.
In the ﬁrst months of 2013, longer government bonds carried on
in their good performance that has lasted for several years already.
The shortest, roughly two-year bonds, however, had no room for
appreciation. The gross yield of 0.15% p.a. at the beginning of 2013
closed the year at precisely the same, essentially minimum level.
Investment strategy
In the second half of the year, room for the appreciation was closed
even in the case of long bonds. For most of the year, appreciation
therefore had to be achieved with the assistance of high-risk bonds,
and essentially only on the high-yield bond market. In order to retain only a certain level of overall risk, AR 0 can use aggressive
bonds only to a limited degree. These investments deﬁnitely cannot
reverse the overall development and ensure high appreciation. An
appreciation of 0.4% for the entire year in the net is due to the use of
high-yield bonds and also of the segment of alternative investments
which, with its appreciation of 3-5%, helped offset the low performance of exhausted Czech government bonds. Appreciation can be
rated favourably in comparison with other regular very conservative investments. Many of them closed the year with no appreciation
whatsoever.
The aim of the fund’s strategy is to provide the unit holders with
a long-term appreciation of their unit certiﬁcates primarily through
investments in securities of the bond funds of collective investment. The aim is achieved also by an occasional allocation of the
dynamic part of the portfolio (bonds versus investment instruments
bearing the real estate risk and the so-called alternative investments). The characteristic of this fund is the higher turnover of the
dynamic part of its portfolio, controlled by the active management.
The fund is namely subject to currency risk resulting from investments in local currencies. The currency, credit and interest risks
are actively managed by means of accessible hedging instruments.
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
49
Investiční společnost České spořitelny, a. s., Privátní portfolio AR 0 – otevřený podílový fond, 2013 Annual Report
Number of unit certiﬁcates issued and redeemed in 2013
Unit certiﬁcates issued
no.
142,619,126
CZK 000
162,028
Unit certiﬁcates redeemed
no.
260,142,994
CZK 000
295,717
Balance (+/−)
no.
(117,523,868)
CZK 000
(133,689)
Development of the funds main economic indicators
As of 31. 12.
2008
2009
2010
2011
2012
2013
Net asset Net asset value
value per
(CZK 000)
unit (CZK)
0.9909
1.0588
1.0906
1.0837
1.1359
1.1402
Development of the value of mutual fund´s unit
certiﬁcates of OPF Privátní portfolio AR 0 in 2013
(CZK)
Proﬁt / Loss
after tax
(CZK 000)
130,131
261,789
614,543
540,306
575,572
443,768
Performance
(%) p.a.
(1,557)
8,646
12,529
(3,410)
25,379
1,886
6.85
3.61
(0.63)
4.82
0.38
Portfolio structure by type of assets in 2013
Bonds and Money market
1.1500
79.60
1.1450
1.1400
5.50
1.1350
1.1300
14.90
Cash
Other
1.1250
2.1.
14.1.
24.1.
5.2.
15.2.
27.2.
11.3.
21.3.
3.4.
15.4.
25.4.
10.5.
22.5.
3.6.
13.6.
25.6.
8.7.
18.7.
30.7.
9.8.
21.8.
2.9.
12.9.
24.9.
4.10.
16.10.
29.10.
8.11.
20.11.
2.12.
12.12.
27.12.
1.1200
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
50
Investiční společnost České spořitelny, a. s., Privátní portfolio AR 25 – otevřený podílový fond, 2013 Annual Report
Privátní portfolio AR 25
Characteristics
It is a special open-ended mutual fund of funds. The characteristic
of this fund is the higher turnover of the dynamic part of its portfolio. The fund is designed for favourers of the active management.
The investor should be able to accept even the shorter periods of
a negative development of the unit certiﬁcate’s price. The recommended investment horizon is at least 4 years. The minimum initial
investment in unit certiﬁcates is CZK 100. The risk weight of the
fund is 3 on a scale 1-7 of the Synthetic risk and reward indicator.
Investment strategy
The fund invests namely in securities of bond and equity funds of
collective investment. The currency, credit and interest risks are
actively managed by means of attainable hedging instruments. The
aim is achieved primarily by the active allocation of the dynamic
portfolio’s part (bonds versus investment instruments bearing equity risk, or real estate and the so-called alternative investments).
The neutral weight of particular portions should in the long-run approach these values: bond markets 55%, stock markets 25%, real
estate markets 10% and alternative investments 10%.
Commentary of the fund manager
Czech government bonds continued to perform well in the ﬁrst
half of the year and as in previous years, the second half of the
year was peaceful on the markets. The yield of the ten-year bond,
for example, did drop to 1.5% p.a. in May, but it went back up in
the second half of the year, stabilising at around 2.3%. This level
remained stable, with slight ﬂuctuations, until the end of the year
and deﬁnitely better corresponded to developments abroad, where
revenues also increased to higher levels. Czech government bonds
no longer served as the driver of performance.
We made abundant use of higher-risk bonds, primarily of the high
yield segment, throughout the year. Around autumn, we started to
increase the share of those bonds, which contrasted sharply with
our approach to bonds of developing economies. There, we were
loosing conﬁdence and only kept reducing our exposure throughout the second half of the year.
We kept a relatively high investment quota in equity markets
(around 90%), primarily in the second half of the year. Only at the
end of the year we brieﬂy kept a zero equity position. Our stock investments were directed primarily into stock on major markets and
we were gradually leaving our positions on developing markets.
The dynamism of the alternative part of the portfolio supported
the performance achieved and it also increased its correlation to
the equity market. We naturally see the increased correlation as
a problem. The diversiﬁcation effect is thereby being lost.
The fund appreciated its assets by 4%, including fees. This result
is best evident in comparison with investments into government
bonds, which were at 0%.
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
51
Investiční společnost České spořitelny, a. s., Privátní portfolio AR 25 – otevřený podílový fond, 2013 Annual Report
Number of unit certiﬁcates issued and redeemed in 2013
Unit certiﬁcates issued
no.
558,323,350
CZK 000
611,037
Unit certiﬁcates redeemed
no.
270,313,533
Balance (+/−)
CZK 000
295,797
no.
288,009,817
CZK 000
315,240
Development of the funds main economic indicators
As of 31. 12.
2007
2008
2009
2010
2011
2012
2013
Net asset Net asset value
value per
(CZK 000)
unit (CZK)
0.9924
0.9147
1.0002
1.0362
1.0072
1.0713
1.1140
Development of the value of mutual fund´s unit
certiﬁcates of OPF Privátní portfolio AR 25 in 2013
(CZK)
Proﬁt / Loss
after tax
(CZK 000)
552,261
895,767
939,571
1,197,913
1,259,823
1,243,695
1,614,137
Performance
(%) p.a.
823
(73,457)
74,317
39,879
(40,285)
75,693
55,204
(7.77)
9.35
3.29
(2.80)
6.36
3.99
Portfolio structure by type of assets in 2013
Bonds and Money market
1.1150
54.00
20.10
1.1050
Equities
1.0950
7.00
Cash
1.0850
1.0750
18.90
Other
2.1.
14.1.
24.1.
5.2.
15.2.
27.2.
11.3.
21.3.
3.4.
15.4.
25.4.
10.5.
22.5.
3.6.
13.6.
25.6.
8.7.
18.7.
30.7.
9.8.
21.8.
2.9.
12.9.
24.9.
4.10.
16.10.
29.10.
8.11.
20.11.
2.12.
12.12.
27.12.
1.0650
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
52
Investiční společnost České spořitelny, a. s., Privátní portfolio AR 50 – otevřený podílový fond, 2013 Annual Report
Privátní portfolio AR 50
Characteristics
It is a special open-ended mutual fund of funds (OPF). The characteristic of this fund is the higher turnover of the dynamic part
of its portfolio. The fund is designed for favourers of the active
management. The investor should be able to accept even the shorter periods of a negative development of the unit certiﬁcate’s price.
The recommended investment horizon is at least 5 years. The minimum initial investment in unit certiﬁcates is CZK 100. The risk
weight of the fund is 4 on a scale 1-7 of the Synthetic risk and
reward indicator.
Investment strategy
The fund invests namely in securities of bond and equity funds of
collective investment. The currency, credit and interest risks are
actively managed by means of attainable hedging instruments. The
aim is achieved primarily by the active allocation of the dynamic
portfolio’s part (bonds versus investment instruments bearing equity risk, or real estate and the so-called alternative investments).
The neutral weight of particular portions should in the long-run approach these values: bond markets 30%, stock markets 50%, real
estate markets 10% and alternative investments 10%.
Commentary of the fund manager
Czech government bonds continued to perform well in the ﬁrst half
of the year and as in previous years, the second half of the year
was peaceful on the markets. The yields of the ten-year bond, for
example, did drop to 1.5% p.a. in May, but they went back up in
the second half of the year, stabilising at around 2.3%. This level
remained stable, with slight ﬂuctuations, until the end of the year
and deﬁnitely better corresponded to developments abroad, where
revenues also increased to higher levels. Czech government bonds
no longer served as the driver of performance.
We used the segment of aggressive bonds more extensively in the
ﬁrst half of the year. These bonds of emerging countries and socalled high-yield bonds constituted approximately 38% of the portfolio at the beginning of the year, and signiﬁcantly supplemented
the lesser utilisation of the equity quota. But we reduced the share in
the ﬁrst half of the year, primarily in the case of bonds of emerging
countries. This turn away from risky bonds in the portfolio continued for the rest of the year.
With small exceptions, we held a high share of equities throughout nearly the entire year. We reduced this position signiﬁcantly,
to nearly a zero percentage of equities at the end of the year when
the market responded nervously to the notice of US FED about the
planned reduction in supporting programmes. Throughout the year,
we signiﬁcantly preferred investments on developed markets.
The dynamics of the alternative part of the portfolio supported the
performance achieved and it also increased its correlation to the
stock market. We naturally see the increased correlation as a problem. The diversiﬁcation effect is being lost.
The fund appreciated its assets by more than 8%, including fees.
This result best stands out in comparison with investment into the
high yield bond segment itself, whose performance was several percentage points lower.
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
53
Investiční společnost České spořitelny, a. s., Privátní portfolio AR 50 – otevřený podílový fond, 2013 Annual Report
Number of unit certiﬁcates issued and redeemed in 2013
Unit certiﬁcates issued
no.
10,768,486
CZK 000
10,812
Unit certiﬁcates redeemed
no.
172,790,689
Balance (+/−)
CZK 000
171,343
no.
(162,022,203)
CZK 000
(160,531)
Development of the funds main economic indicators
As of 31. 12.
2007
2008
2009
2010
2011
2012
2013
Net asset Net asset value
value per
(CZK 000)
unit (CZK)
0.9863
0.8431
0.9399
0.9708
0.9046
0.9547
1.0336
Development of the value of mutual fund´s unit
certiﬁcates of OPF Privátní portfolio AR 50 in 2013
(CZK)
Proﬁt / Loss
after tax
(CZK 000)
433,837
632,492
666,839
748,218
577,976
462,605
333,375
Performance
(%) p.a.
781
(105,326)
63,042
24,089
(44,009)
30,074
31,302
(14.47)
11.48
1.21
(6.82)
5.54
8.26
Portfolio structure by type of assets in 2013
Equities
1.0500
46.10
4.80
Cash
1.0300
1.0100
21.10
Other
0.9900
0.9700
28.00
Bonds and Money market
2.1.
14.1.
24.1.
5.2.
15.2.
27.2.
11.3.
21.3.
3.4.
15.4.
25.4.
10.5.
22.5.
3.6.
13.6.
25.6.
8.7.
18.7.
30.7.
9.8.
21.8.
2.9.
12.9.
24.9.
4.10.
16.10.
29.10.
8.11.
20.11.
2.12.
12.12.
27.12.
0.9500
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
54
Investiční společnost České spořitelny, a. s., Privátní portfolio AR 75 – otevřený podílový fond, 2013 Annual Report
Privátní portfolio AR 75
Characteristics
Commentary of the fund manager
It is a special open-ended mutual fund of funds. The characteristic
of this fund is the higher turnover of the dynamic part of its portfolio. The fund is designed for favourers of the active management.
The investor should be able to accept even the longer period of
a negative development of the unit certiﬁcate’s price. The recommended investment horizon is at least 7 years. The minimum initial
investment in unit certiﬁcates is CZK 100. The risk weight of the
fund is 5 on a scale 1-7 of the Synthetic risk and reward indicator.
Unlike in the past, we decided to make signiﬁcant use of higherrisk bond segments in our global asset allocation, such as so-called
high-yield bonds and bonds of emerging countries. At the beginning of the year, they amounted to 40% of our portfolio; we always
combined that share with investments into stock. At the beginning
of the year, the share of equities was only 25% (i.e., one third of
the quota), and it had climbed to 90% of the quota by the end of
the quarter. From this point of view, second quarter only meant
a gradual retreat from risk, which peaked in the last days of June
when we brieﬂy sold out equities down to 0%. In the second half of
the year, we increasingly preferred equities to other investments,
and in the last months, the utilisation of the equity quota amounted
to 90%. We increasingly relatively preferred equities of developed
markets, especially in the US and in Japan.
Investment strategy
The fund invests namely in securities of bond and equity funds of
collective investment. The currency, credit and interest risks are
actively managed by means of attainable hedging instruments. The
aim is achieved primarily by the active allocation of the dynamic
portfolio’s part (bonds versus investment instruments bearing equity risk, or real estate and the so-called alternative investments).
The neutral weight of particular portions should in the long-run approach these values: stock markets 75%, real estate markets 10%
and alternative investments 15%.
An alternative part of the portfolio improved its dynamism, having
increased its correlation to the equity market.
The fund’s annual performance was slightly over 8.4% for the entire year.
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
55
Investiční společnost České spořitelny, a. s., Privátní portfolio AR 75 – otevřený podílový fond, 2013 Annual Report
Number of unit certiﬁcates issued and redeemed in 2013
Unit certiﬁcates issued
no.
2,891,694
CZK 000
2,580
Unit certiﬁcates redeemed
no.
35,195,401
Balance (+/−)
CZK 000
30,703
no.
(32,303,707)
CZK 000
(28,123)
Development of the funds main economic indicators
As of 31. 12.
2007
2008
2009
2010
2011
2012
2013
Net asset Net asset value
value per
(CZK 000)
unit (CZK)
0.9784
0.8149
0.9034
0.9142
0.8163
0.8404
0.9108
Development of the value of mutual fund´s unit
certiﬁcates of OPF Privátní portfolio AR 75 in 2013
(CZK)
Proﬁt / Loss
after tax
(CZK 000)
113,343
123,346
157,683
149,297
105,102
82,328
59,807
Performance
(%) p.a.
251
(28,555)
13,156
1,495
(13,935)
2,852
5,603
(16.62)
10.86
1.01
(10.70)
2.94
8.39
Portfolio structure by type of assets in 2013
Equities
0.9150
66.30
0.9000
2.10
Cash
22.20
Other
0.8850
0.8700
0.8550
9.40
Bonds and Money market
2.1.
12.1.
24.1.
5.2.
15.2.
27.2.
11.3.
21.3.
3.4.
15.4.
25.4.
10.5.
22.5.
3.6.
13.6.
25.6.
8.7.
18.7.
30.7.
9.8.
21.8.
2.9.
12.9.
24.9.
4.10.
16.10.
29.10.
8.11.
20.11.
2.12.
12.12.
27.12.
0.8400
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
56
Investiční společnost České spořitelny, a. s., Privátní portfolio AR AKCIE – otevřený podílový fond, 2013 Annual Report
Privátní portfolio AR AKCIE
Characteristics
Commentary of the fund manager
A special fund of funds. The fund is suitable for CZK investors,
who are interested on returns from investments on equity markets
and at the same time they wish to proﬁt from relatively short-term
investment occasions. Characteristic higher turn-over of the dynamic part of portfolio is available for those, who prefer an active management. Investor should be able to accept also longer
period of negative performance as well as higher volatility of the
unit certiﬁcate value. Recommended investment horizon is 5 years
and longer. The risk weight of the fund is 6 on a scale 1-7 of the
Synthetic risk and reward indicator.
We kept a very high level of investment into equities for nearly
the entire ﬁrst half of 2013, when stock markets continued to grow
with low volatility. On average, our equity exposure was over 87%.
Thanks to the favourable market developments and an appropriate
regional asset allocation, the fund reported annual appreciation in
excess of 20% in May. A price correction at the end of the sixmonth period meant a worsening in performance to 15% year on
year, which is still decent. At the very end of the six-month period,
we temporarily resorted to a more conservative portfolio, holding
equity market exposure of only 39%. This reduction in risk assets
was due to our fear of market response to the discontinuation of
support programmes in the US in the near future, announced by the
US central bank. The conservative set-up of the fund’s portfolio,
however, lasted only for a few days. We returned to an investment
level of 90% very soon and held it, with minor changes, for the rest
of the year. The trend development in equity markets, especially
on major developed markets, did not force us to make any major
changes. In terms of portfolio composition, we increasingly preferred a portfolio focused solely on these major markets.
Investment strategy
The fund invests primarily in equity funds of collective investments and other investment instruments bearing the equity risk.
The portion of the equity part in the portfolio is actively managed,
as well as its sector and regional structure. In the neutral weight,
the equity instruments portion should be 100% of the portfolio.
Currency, credit and interest risk is actively is actively managed.
The fund has no benchmark; its target is a positive performance on
deﬁned investment horizon.
At the end of the year, annual appreciation of nearly 20% was
achieved, which exceeded other equity investments in most cases.
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
57
Investiční společnost České spořitelny, a. s., Privátní portfolio AR AKCIE – otevřený podílový fond, 2013 Annual Report
Number of unit certiﬁcates issued and redeemed in 2013
Unit certiﬁcates issued
no.
340,211,527
CZK 000
360,301
Unit certiﬁcates redeemed
no.
102,293,230
Balance (+/−)
CZK 000
108,697
no.
237,918,297
CZK 000
251,604
Development of the funds main economic indicators
As of 31. 12.
2010
2011
2012
2013
Net asset Net asset value
value per
(CZK 000)
unit (CZK)
1.0306
0.8973
0.9459
1.1330
Development of the value of mutual fund´s unit
certiﬁcates of OPF Privátní portfolio AR AKCIE
in 2013 (CZK)
Proﬁt / Loss
after tax
(CZK 000)
73,348
238,587
260,160
581,187
Performance
(%) p.a.
2,388
(32,305)
13,613
69,422
(12.92)
5.40
19.78
Portfolio structure by type of assets in 2013
Foreign Mutual Funds
1.1350
62.70
1.0950
20.70
Other
16.60
Domestic Mutual Funds
1.0550
1.0150
0.9750
2.1.
12.1.
24.1.
5.2.
15.2.
27.2.
11.3.
21.3.
3.4.
15.4.
25.4.
10.5.
22.5.
3.6.
13.6.
25.6.
8.7.
18.7.
30.7.
9.8.
21.8.
2.9.
12.9.
24.9.
4.10.
16.10.
29.10.
8.11.
20.11.
2.12.
12.12.
27.12.
0.9350
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
58
Investiční společnost České spořitelny, a. s., Privátní portfolio AR REALITY – otevřený podílový fond, 2013 Annual Report
Privátní portfolio AR REALITY
Characteristics
Commentary of the fund manager
A special fund of funds. It is focused on products with real estate
theme. The fund’s target is to bring to its shareholders the absolute
return no matter the actual economical cycle. The portion of the
real estate part in the portfolio is actively managed, as well as its
sector and regional structure. Currency, credit and interest risk is
actively managed. The risk weight of the fund is 5 on a scale 1-7
of the Synthetic risk and reward indicator.
This mutual fund, focused on global real estate markets, reached
fairly good performance in 2013 in spite of the fact that prices on
the real estate market dropped at the mid point of the year due to
a correction on the equity markets. The fund practically erased its
six-month performance. Compared to the benchmark, however, it
still did very well, as the benchmark had gone through a far greater
correction. In the second half of the year, the nervousness disappeared from the markets and they returned to price growth in the
real estate. This fact is documented by the sustained growth in real
estate in the US in 2013, measured by the S&P/Case-Shiller Composite Index.
Investment strategy
The fund invests primarily in the real estate funds of collective investment and other investment instruments bearing the real estate
markets risk. The portion of the real estate part in the portfolio is
actively managed, as well as its sector and regional structure. In
the neutral weight, the real-estate instruments portion should be
100% of the portfolio. Currency, credit and interest risk is actively
managed. The fund has no benchmark; its target is a positive performance on deﬁned investment horizon.
Due to this and to other factors, the fund ended 2013 with a performance of 3.4%, more than 4% above the comparative benchmark.
The fund maintained a high level of investment practically for the
entire year.
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
59
Investiční společnost České spořitelny, a. s., Privátní portfolio AR REALITY – otevřený podílový fond, 2013 Annual Report
Number of unit certiﬁcates issued and redeemed in 2013
Unit certiﬁcates issued
no.
135,732,771
CZK 000
149,178
Unit certiﬁcates redeemed
no.
25,557,836
Balance (+/−)
CZK 000
28,103
no.
110,174,935
CZK 000
121,075
Development of the funds main economic indicators
As of 31. 12.
2010
2011
2012
2013
Net asset Net asset value
value per
(CZK 000)
unit (CZK)
1.0088
0.9680
1.0791
1.1160
Development of the value of mutual fund´s unit
certiﬁcates of OPF Privátní portfolio AR REALITY
in 2013 (CZK)
Proﬁt / Loss
after tax
(CZK 000)
44,644
119,378
110,033
236,750
Performance
(%) p.a.
656
(5,058)
11,863
5,643
(4.04)
11.48
3.42
Portfolio structure by type of assets in 2013
Foreign Mutual Funds
1.1500
25.29
22.76
1.1300
Deposits
1.1100
1.0900
17.32
Equities
1.0700
34.63
Domestic Mutual Funds
2.1.
12.1.
24.1.
5.2.
15.2.
27.2.
11.3.
21.3.
3.4.
15.4.
25.4.
10.5.
22.5.
3.6.
13.6.
25.6.
8.7.
18.7.
30.7.
9.8.
21.8.
2.9.
12.9.
24.9.
4.10.
16.10.
29.10.
8.11.
20.11.
2.12.
12.12.
27.12.
1.0500
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
60
Investiční společnost České spořitelny, a. s., Privátní portfolio AR ALTERNATIVNÍ INVESTICE – otevřený podílový fond, 2013 Annual Report
Privátní portfolio AR ALTERNATIVNÍ
INVESTICE
Characteristics
Commentary of the fund manager
A special fund of funds. The aim of the fund is to achieve longterm positive absolute performance.The fund is suitable for CZK
investors, who are interested on returns from hedge funds of collective investment, commodity funds of collective investment and
other alternative investment instruments. Recommended investment horizon is 5 years and longer. The risk weight of the fund is 5
on a scale 1-7 of the Synthetic risk and reward indicator.
For most of the ﬁrst half of 2013, the development of alternative
investments carried on in a positive spirit similar to that of the second half of 2012. This lasted until mid May, when the increasing
weakness of this segment and the increasing correlation between
investments focused on risk investments. The drop of equity markets was apparent in this segment, too. Fortunately, the excessive
reaction of the markets to Fed’s announcement soon faded away
and the market returned to a stable growth trend with increasingly
decreasing volatility. Strategies focused on the equity markets did
the best throughout the entire period, without any great surprises.
Investment strategy
The aim of the Investment strategy of the fund is to provide investors the long-term positive absolute performance of their CZK investment via investing in unit certiﬁcates of mutual funds, investing primarily into alternative investment instruments. The portion
of this part in the portfolio is actively managed, as well as its sector
and regional structure. Currency, credit and interest risk is actively
managed by means of available hedging instruments. The fund has
no benchmark; its target is a positive performance on deﬁned investment horizon.
The fund achieved net appreciation of 4.8%.
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
61
Investiční společnost České spořitelny, a. s., Privátní portfolio AR ALTERNATIVNÍ INVESTICE – otevřený podílový fond, 2013 Annual Report
Number of unit certiﬁcates issued and redeemed in 2013
Unit certiﬁcates issued
no.
276,914,068
CZK 000
283,064
Unit certiﬁcates redeemed
no.
68,507,430
Balance (+/−)
CZK 000
70,116
no.
208,406,638
CZK 000
212,948
Development of the funds main economic indicators
As of 31. 12.
2010
2011
2012
2013
Net asset Net asset value
value per
(CZK 000)
unit (CZK)
1.0198
0.9795
0.9950
1.0428
Development of the value of mutual fund´s unit
certiﬁcates of OPF Privátní portfolio
AR ALTERNATIVNÍ INVESTICE in 2013 (CZK)
Proﬁt / Loss
after tax
(CZK 000)
55,907
252,772
229,201
457,550
Performance
(%) p.a.
971
(12,530)
3,670
15,401
(3.95)
1.58
4.80
Portfolio structure by type of assets in 2013
Foreign Mutual Funds
1.0450
87.32
1.0350
1.0250
12.68
Deposits
1.0150
1.0050
2.1.
12.1.
24.1.
5.2.
15.2.
27.2.
11.3.
21.3.
3.4.
15.4.
25.4.
10.5.
22.5.
3.6.
13.6.
25.6.
8.7.
18.7.
30.7.
9.8.
21.8.
2.9.
12.9.
24.9.
4.10.
16.10.
29.10.
8.11.
20.11.
2.12.
12.12.
27.12.
0.9950
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
62
Investiční společnost České spořitelny, a. s., Institucionální akciový FF – otevřený podílový fond, 2013 Annual Report
Institucionální akciový FF
Characteristics
Commentary of the fund manager
It is a special fund of funds. The fund is designed for investors
with CZK as a refference currency CZK, who are looking for an
easy way of taking part in the development of international stock
markets by means of broadly diversiﬁed and liquid equity portion
of the portfolio, which consists primarily of the securities of equity funds. Recommended time of investment is at least ﬁve years.
The minimum initial investment in unit certiﬁcates is CZK 100
thousand. The risk weight of the fund is 7 on a scale 1-7 of the
Synthetic risk and reward indicator.
2013 was one of the most successful years in the history of stock
markets, as all three of the most important regions (USA, Europe,
and Japan) ended the year with an appreciation in excess of 25% as
expressed in USD. For the US S&P 500 index, it was the best year
in the last 16 years, with an appreciation of 29.6% (!). It closed
the year with a new all-time high of 1848.4 points, high above the
original estimates of investment strategists. Whereas the developed
markets index reached an all-year performance of 24%, emerging
markets again did not do very well and closed the year with a loss
of -5%. The Central and East European region, which constitutes
40% of the fund’s benchmark, did even worse, with a USD performance of -7.2%. The drop in Turkish equities due to a corruption
scandal accounted for most of the drop in the region in December.
The main feature of 2013 on stock markets was growth in valuation which signiﬁcantly exceeded the growth of corporate proﬁts.
Thanks to that, stock prices went up signiﬁcantly. The extremely
relaxed monetary policy of the largest central banks continued to
be the main driver of growth in the value of the P/E indicator. In
December, the US central bank, somewhat surprisingly, resorted
to a ﬁrst reduction in direct bond purchases, reducing its direct
monthly interventions from USD 85 bn to USD 75 bn. Unlike in
June, the market took the news favourably, rather as evidence of an
improvement in the macroeconomic environment. Optimism was
also supported by increasing estimates of another acceleration in
corporate proﬁtability.
Investment strategy
The prevailing part of the fund´s portfolio is created by securities
of equity funds of collective investment, shares and investment instruments bearing equity risk. The dimension of the equity part
as well as the sector and regional structure are actively managed.
The currency, credit and interest risks are also actively managed
by means of attainable hedging instruments. The fund can invest in
the supplementary liquid assets such as deposits and time deposits.
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
63
Investiční společnost České spořitelny, a. s., Institucionální akciový FF – otevřený podílový fond, 2013 Annual Report
Number of unit certiﬁcates issued and redeemed in 2013
Unit certiﬁcates issued
no.
297,724,432
CZK 000
367,732
Unit certiﬁcates redeemed
no.
370,681,526
Balance (+/−)
CZK 000
454,384
no.
(72,957,094)
CZK 000
(86,652)
Development of the funds main economic indicators
As of 31. 12.
2008
2009
2010
2011
2012
2013
Net asset Net asset value
value per
(CZK 000)
unit (CZK)
0.8696
1.2564
1.3583
1.0666
1.2097
1.3019
Development of the value of mutual fund´s unit
certiﬁcates of OPF Institucionální akciový FF in 2013
(CZK)
Proﬁt / Loss
after tax
(CZK 000)
56,317
129,818
237,762
159,242
482,547
424,350
Performance
(%) p.a.
(7,800)
38,532
15,718
(48,970)
18,893
28,455
44.48
8.12
(21.48)
13.42
7.62
Portfolio structure by type of assets in 2013
Equities
1.3250
99.50
1.2850
1.2450
0.50
Cash
1.2050
1.1650
2.1.
12.1.
24.1.
5.2.
15.2.
27.2.
11.3.
21.3.
3.4.
15.4.
25.4.
10.5.
22.5.
3.6.
13.6.
25.6.
8.7.
18.7.
30.7.
9.8.
21.8.
2.9.
12.9.
24.9.
4.10.
16.10.
29.10.
8.11.
20.11.
2.12.
12.12.
27.12.
1.1250
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
64
Investiční společnost České spořitelny, a. s., Dluhopisový fond – otevřený podílový fond, 2013 Annual Report
Dluhopisový fond
Characteristics
The open-ended mutual bond fund is designed for the more conservative sector of investors to provide them with a medium to
long-term appreciation of units mainly investing in bonds with low
credit risk. The recommended minimum investment period is three
years or more. The risk weight of the fund is 3 on a scale 1-7 of the
synthetic risk and reward indicator.
Investment strategy
The fund manager invests mainly into ﬁxed-rate bonds portfolio,
to a lesser extention ﬂoating rate bonds and treasury bills. These
are bonds represent exposure primarily to the Czech government,
reputable banks, occasionally to corporations with investment
grade rating. In order to reduce interest rate risk, bonds are usually
held until maturity. The manager also invests in banking deposits.
The fund does not invest in equities.
Fund invests in government bonds, bonds of banks and other issuers who have the long-term credit rating from the Standard
& Poor´s or Fitch Ratings at least on the investment grade. Time to
maturity may be up to 15 years.
Incoming weak data from European economies pressed government bond yields to new all-time lows. In May, the German
economy started to show a better outlook in terms of its economic
development. Thanks to that, a turn in bond markets came and government bond yields started to grow (a drop in prices). Czech bonds
followed this development. The US central bank (FED) fuelled the
increase in yield far more strongly, as it clariﬁed its steps in terms
of a gradual reduction of monetary stimuli in the economy. But
the increase in yields (drop in prices) was too steep, which is why
yields could not avoid a minor correction in July. Subsequently,
during the rest of the summer vacation, the macro-ﬁgures published in Europe started to push bond yields up again. This growth
was halted in September, when the US central bank surprisingly
failed to reduce the volume of bonds purchased, creating pressure
on revenue drop. This was fuelled by protracted debates about the
US budget. After a year of threats, the Czech National Bank resorted to FX interventions in November, primarily due to low inﬂation.
This resulted in a sudden weakening of the crown against the euro
by 5%, to a level around CZK 27. This step was manifest primarily
by a drop in revenue on the short end. In December, however, bond
prices grew rapidly, driven primarily by better data from the US
and reduced monetary stimuli of the US central bank.
Commentary of the fund manager
In 2013, the Czech bond market more-or-less followed developments in developed markets. Until mid May, the Czech bond market carried on in the buoyant developments that started the year
before. After that, the trend reversed and bond yields started to
gradually climb up (bond prices were going down).
The fund is invested into Czech government bonds with a shorter
maturity period and it is also holding a smaller position in banking
sector corporate bonds.
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
65
Investiční společnost České spořitelny, a. s., Dluhopisový fond – otevřený podílový fond, 2013 Annual Report
Number of unit certiﬁcates issued and redeemed in 2013
Unit certiﬁcates issued
no.
185,144,756
CZK 000
193,000
Unit certiﬁcates redeemed
no.
50,128,601
Balance (+/−)
CZK 000
52,192
no.
135,016,155
CZK 000
140,808
Development of the funds main economic indicators
As of 31. 12.
2012
2013
Net asset Net asset value
value per
(CZK 000)
unit (CZK)
1.0428
1.0446
Development of the value of mutual fund´s unit
certiﬁcates of OPF Dluhopisový fond in 2013 (CZK)
Proﬁt / Loss
after tax
(CZK 000)
Performance
(%) p.a.
10,115
632
4.28
0.17
248,815
390,259
Portfolio structure by type of assets in 2013
Government bonds
1.0475
88.23
1.0450
3.87
1.0425
7.90
Corporate bonds
Money market, Deposits
1.0400
1.0375
2.1.
12.1.
24.1.
5.2.
15.2.
27.2.
11.3.
21.3.
3.4.
15.4.
25.4.
10.5.
22.5.
3.6.
13.6.
25.6.
8.7.
18.7.
30.7.
9.8.
21.8.
2.9.
12.9.
24.9.
4.10.
16.10.
29.10.
8.11.
20.11.
2.12.
12.12.
27.12.
1.0350
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
66
Investiční společnost České spořitelny, a. s., CERTIFIKÁTOVÝ FOND – otevřený podílový fond, 2013 Annual Report
CERTIFIKÁTOVÝ FOND
Characteristics
A special securities fund for investors who have some experience
with capital markets. The fund strives to increase the value of unit
certiﬁcates over the long term by actively managing the risk components of its portfolio, with an emphasis on the current and expected volatility of individual investment instruments. The recommended investment horizont is at least 4 years or more. The risk
weighting of the fund is 4 on a scale of 1 to 7 (synthetic indicator).
Investment strategy
For the Fund’s portfolio, the Fund manager purchases structured
bonds, investment certiﬁcates, short- and medium-term bonds and
investment instruments from alternative asset classes. The Fund
can also use equity instrument derivatives (equity indices). Regionally, the Fund’s investments cover primarily developed capital
markets in the US, Europe, and Japan, and to a lesser extent also
developed capital markets. The objective is reached primarily by
active management of the risk components of the portfolio. When
deciding about the composition of the unit trust’s portfolio and the
selection of individual investments, attention is paid to the current
volatility level of individual investment instruments and to the expected volatility level of the prices of derivatives.
Commentary of the fund manager
All of 2013 carried on in the spirit of a growth trend on developed
stock markets. That meant that for many stock indices, this was
one of the most successful years in recent history. For example, the
US stock index S&P 500 grew by nearly 30% in 2013, the most
since 1997. The growth of equity markets was due primarily to
good ﬁgures coming in from the US, European, and Chinese economies. Also corporate data from the US played their role, as their
proﬁtability grew faster in comparison with the ﬁrst half.
That is why the possibilities of increasing positions in the fund
were only very limited. Events increasing volatility on ﬁnancial
markets were extremely isolated. At the end of February, it was
uncertainty as to the elections in Italy and then in April a sharp drop
of the Japanese stock market. The situation started to change at the
end of May, and primarily in June. The US central bank changed
the outlines of the gradual reduction of monetary stimuli of the
economy, accompanied by problems on the Chinese inter-bank
market. Some investors started to fear a potential outbreak of a ﬁnancial crisis in the Chinese banking sector. The sharp growth in
volatility (accompanied by a drop in ﬁnancial markets) allowed us
to make use of investment opportunities. We realised them primarily through bonus certiﬁcates for the US S&P 500 index.
In August, markets corrected their growth to some degree in response to increasing tension in Syria. This was accompanied by
another sharp increase in volatility that allowed us to take advantage of investment opportunities, including through a bonus
certiﬁcate for the US S&P 500 index. An investment opportunity
occurred in September as volatility increased in connection with
the unexpected decision of the US central bank to postpone the
gradual discontinuation of economic stimuli. We took advantage
of that opportunity through a bonus certiﬁcate for the European
Euro Stoxx50 index.
In the meantime, we placed some of our disposable cash into
Czech government bonds maturing in 3 years, and in 4 years with
a variable coupon, and also into German government bonds with
a maturity of 1.5 years. We are attempting to thereby avoid the
adverse impact of the potential growth in interest rates.
At the end of 2013, 8% of the fund’s portfolio had been invested
into investment certiﬁcates and 57% into Czech and German government bonds.
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
67
Investiční společnost České spořitelny, a. s., CERTIFIKÁTOVÝ FOND – otevřený podílový fond, 2013 Annual Report
Number of unit certiﬁcates issued and redeemed in 2012
Unit certiﬁcates issued
no.
161,719,430
CZK 000
161,609
Unit certiﬁcates redeemed
no.
29,244,814
Balance (+/−)
CZK 000
29,205
no.
132,474,616
CZK 000
132,404
Development of the funds main economic indicators
As of 31. 12.
2013
Net asset Net asset value
value per
(CZK 000)
unit (CZK)
1.0072
Development of the value of mutual fund´s unit
certiﬁcates of OPF CERTIFIKÁTOVÝ FOND in 2013
(CZK)
Proﬁt / Loss
after tax
(CZK 000)
133,433
Performance
(%) p.a.
1,030
Portfolio structure by type of assets in 2013
1.0120
Government bonds
57.12
10.64
1.0080
Money market, Deposits
1.0040
24.00
1.0000
Cash
0.9960
0.9920
8.24
Certiﬁcates
15.1.
25.1.
6.2.
18.2.
28.2.
12.3.
22.3.
4.4.
16.4.
26.4.
13.5.
23.5.
4.6.
14.6.
26.6.
9.7.
19.7.
31.7.
12.8.
22.8.
3.9.
13.9.
25.9.
7.10.
17.10.
30.10.
11.11.
21.11.
3.12.
13.12.
30.12.
0.9880
Full names of open-end mutual funds are stated in statutes or prospectuses of the funds. Conformable with rules valid for the collective investment the manager of funds refers to the fact,
that the present performance does not guarantee the performance in future. Investment in unit certiﬁcates implies a risk of a volatility of the current value of investment and yields of it and
that the return on initially invested amount cannot be guaranteed.
68
Investiční společnost České spořitelny, a. s., 2013 Annual Report
Supervisory Board Report
of Investiční společnost České spořitelny, a. s.
with its registered seat Praha 6, Dejvice, Evropská 2690/17, PSČ 160 00, IČ 44796188,
ﬁled with the Commercial Register kept by the Municipal Court in Prague, Section B, entry 1154.
Statement of the Supervisory Board of Investiční společnost České spořitelny, a. s.
on the Company’s Final Accounts as of December 31, 2013,
and on the Proposals for the Distribution of Proﬁt
The Supervisory Board reviewed on February 11, 2014 the ﬁnal
accounts of the company as of December 31, 2013, primarily the
amount and structure of its assets and liabilities, the creation of
proﬁt/loss in 2013, as well as the proposal for the distribution of
proﬁt. On the basis of the accounting statements presented, ﬁnal
accounts, and an audit carried out by Ernst & Young Audit s. r. o.,
the Board concluded that the data is in line with the conditions
for keeping of accounts, and that the ﬁnal accounts reﬂect the
ﬁnancial situation and results of operations of the company. The
Supervisory Board recommends that the sole shareholder at the
General Meeting approves the ﬁnancial statements for the year
2013 and the Supervisory Board takes into account the proposal
for the proﬁt distribution.
Vienna, February 11, 2014
Mag. Heinz Bednar
Chairman of the Supervisory Board of
Investiční společnost České spořitelny, a. s.
69
Investiční společnost České spořitelny, a. s., 2013 Annual Report
Report on Relations
among Related Entities pursuant to Section 82 of Act No. 90/2012 Coll., on
Business Corporations for the accounting period starting 1 January 2013 and
ending 31 December 2013
Investiční společnost České spořitelny, a. s. with its registered seat
in Prague 6, Dejvice, Evropská 2690/17, post code 160 00, ID No.
44796188, registered in the Commercial Register maintained by
the Municipal Court in Prague, section B, entry 1154 (hereinafter
referred to as the “Author”), was a member of a business grouping
in 2013 in which the following relations existed between the Author and controlling entities and between the Author and entities
controlled by the same controlling entities (hereinafter referred to
as “related entities”)
This report on relations among the entities listed below has been
drawn up in line with the provisions of Section 82 of Act No.
90/2012 Coll., on business corporations, as amended, for the accounting period starting 1 January 2013 and ending 31 December
2013 (hereinafter referred to as the “accounting period”). The following agreements were concluded by and between the Author and
the persons listed below, and the following legal acts and other
factual measures were accepted or affected between them.
REICO investiční společnost České spořitelny, a. s., with its
registered seat at Antala Staška 2027/79, 140 00 Prague 4, Czech
Republic, ID No. 27567117 (“REICO”)
Relationship to the company: other related entities
s Autoleasing, a. s., with its registered seat at
Budějovická 1518/13B, post code 140 00 Prague 4,
Czech Republic, ID No. 27089444
Relationship to the company: other related entities
Brokerjet České spořitelny, a. s., with its registered seat at
Evropská 2690/17, post code 160 00 Prague 6, Czech Republic,
ID No. 27089444
Relationship to the company: other related entities
Procurement Services GmbH, with its registered seat at Brehmstrasse 12, Vienna, Austria (“sProserv GmbH”)
Relationship to the company: other related entities
A. Controlling Entities
Erste Asset Management GmbH, with its registered seat at
Habsburgergasse 2, 1010 Vienna, Austria (“EAM“)
Relationship to the company: directly controlling entity
Erste Bank Beteiligungen GmbH, with its registered seat at
Graben 21, Vienna, Austria (“EB Beteiligungen“)
Relationship to the company: indirectly controlling entity – an
entity controlling EAM
Erste Group Bank AG, with its registered seat at Graben 21,
A-1010 Vienna, Austria (“Erste Group Bank”)
Relationship to the company: ultimate parent company, indirectly
controlling entity – an entity controlling EB Beteiligungen
B. Other Related Entities
Procurement Services CZ, s. r. o., with its registered seat at
Budějovická 1912/64b, Prague 4, ID No. 27631621 (“sProserv CZ”)
Relationship to the company: other related entities
ERSTE – SPARINVEST KAG, Habsburgergasse 2, A-1010
Vienna, Austria
Relationship to the company: other related entities
C. Transactions with Related Parties
Investiční společnost identiﬁed relations with the related entities
listed in sections A and B, which it aggregated in the categories
stated below.
Transactions with related entities on the asset
side of the balance of Investiční společnost
Receivables from banks
Česká spořitelna, a. s., with its registered seat at Olbrachtova
1929/62, post code 140 00, Prague 4, Czech Republic, ID No.
45244782 (“Ceska sporitelna”)
Relationship to the company: other related entities
Investiční společnost has funds in current accounts, amounting to
a total of CZK 131.27 mil. This money is deposited with Ceska
sporitelna pursuant to agreements on a current account. Investiční
společnost did not sustain any harm from these transactions in the
accounting period concerned.
Česká spořitelna – penzijní společnost, a. s., with its registered seat at Poláčkova 1976/2, 140 21 Prague 4, Czech Republic,
ID No. 61672033 (“ČS-penzijní společnost”)
Relationship to the company: other related entities
Securities valued at real value against cost or
revenue accounts
Investiční společnost holds no unit certiﬁcates in related entities.
70
Investiční společnost České spořitelny, a. s., 2013 Annual Report
Other assets
The item ‘other assets’ includes receivables from Investiční
společnost’s business relations with related entities, including contingencies amounting to a total of CZK 17.5 mil. These include,
above all, receivables from Ceska sporitelna. Investiční společnost
did not sustain any harm from these transactions in the accounting
period concerned.
Transactions with related entities on the liability
side of the balance of Investiční společnost
market or business conditions, fee and commission costs, which
included, in particular, transactional fees and loyalty bonus fees
in an aggregate volume of CZK 344 mil. Investiční společnost
did not sustain any harm from these transactions in the accounting
period concerned
General administrative costs
In the accounting period concerned, Investiční společnost expended, subject to regular market or business conditions, CZK 11.8 mil.
in other administrative costs paid to related entities, in particular
for outsourcing, risk management, rent, leasing, and servicing services. Investiční společnost did not sustain any harm from these
transactions in the accounting period concerned
Other Liabilities
The item ‘other liabilities’ includes other payables from Investiční
společnost’s business relations with related entities, including contingencies amounting to a total of CZK 59.8 mil. These include,
above all, payables to Ceska sporitelna. Investiční společnost did
not sustain any harm from these transactions in the accounting period concerned.
Transactions with related entities having an
impact on the proﬁt and loss statement of
Investiční společnost
Revenues from fees and commissions
In its transactions with related entities in the accounting period
concerned, Investiční společnost received, subject to regular market or business conditions, fee and commission revenue that included, in particular, fees and commissions for asset management
and fund management, in an aggregate volume of CZK 48.3 mil.
Investiční společnost did not sustain any harm from these transactions in the accounting period concerned
Fee and commission costs
In its transactions with related entities in the accounting period
concerned, Investiční společnost expended, subject to regular
Contract name
Contractual Party
Agreement on the provision of
outsourcing services in the sphere of
ﬁnancial accounting, controlling, asset
management, procurement support,
human resources, marketing, internal
audit, corporate cooperation, and IS/
IT security
Česká spořitelna, a. s.
Other operating costs
In its transactions with related entities in the accounting period
concerned, Investiční společnost expended, subject to regular market or business conditions, other operating costs, which included,
in particular, the cost of its logo, in an aggregate volume of CZK
1 mil. Investiční společnost did not sustain any harm from these
transactions in the accounting period concerned
D. Contractual Relations
In previous accounting periods, Investiční společnost entered into
agreements with the related entities speciﬁed in sections A and B,
whose ﬁnancial amount in the accounting period concerned is included in section C. In the accounting period, Investiční společnost
entered into new agreements with the related entities speciﬁed in
sections A and B, whose ﬁnancial amount in the accounting period
concerned is included in section C. The list below shows major
agreements with related entities concluded in the accounting period concerned. Minor contractual relations on the basis of which
Investiční společnost received or provided performance in its relations with related entities, and whose ﬁnancial amount in the
accounting period concerned is also included in section C, from
which Investiční společnost did not sustain any harm, are not listed
in this report.
Subject matter of the contract
Detriment
incurred
Outsourcing services in the sphere of
ﬁnancial accounting, controlling, asset
management, procurement support,
human resources, marketing, internal
audit, corporate cooperation, and IS/IT
security
None
Erste Group Bank AG
Agreement on the provision
ERSTE-SPARINVEST KAG
of outsourcing services for the
management of the assets of the
funds ESPA Fiducia, ESPA Český fond
ﬁremních dluhopisů, and ESPA Český
fond státních dluhopisů
Outsourcing services in the sphere of
fund asset management
None
Agreement non the provision of IT
services
Outsourcing services in the sphere of IT
None
Česká spořitelna, a. s.
71
Investiční společnost České spořitelny, a. s., 2013 Annual Report
E. Other Legal Actions
In the accounting period concerned, the Author did not accept or
affect any other legal acts in the interest or at the suggestion of
related entities.
F. Other Factual Provisions
The investment company cooperates on group projects within the
Erste Group Bank group. No harm was incurred by the Author due
to its cooperation in these group projects.
G. Conclusion
With a view to the legal relations between the Author and the related entities that have been reviewed, it is evident that the Author
did not sustain any harm due to any agreements, other legal acts,
and other measures concluded, made, or adopted by the Author in
the 2013 accounting period, in the interest or at the suggestion of
individual related entities.
This report was discussed and approved by the Management Board
of Investiční společnost České spořitelny, a. s. on 10 February
2014.
Ing. Martin Řezáč
Chairman of the Management Board
Ing. Štěpán Mikolášek
Vice Chairman of the Management Board
72
Investiční společnost České spořitelny, a. s., 2013 Annual Report
Information about the synthetic risk and
reward indicator, which is providing the risk
proﬁle of the mutual fund
The risk proﬁle of the mutual fund is characterized mainly by the synthetic risk and reward indicator1. The risk and reward indicator provides
the relation between the chance of investment growth and the risk of the value decline. The way of presentation of the synthetic risk and
reward indicator is directly speciﬁed in EU regulation2.
Mutual Fund Short Name
Synthetic Risk and Reward Indicator
 Potencially lower risk
Potencially higher risk 
 Potencially lower income
LIKVIDITNÍ FOND
SPOROINVEST
BONDINVEST
SPOROBOND
TRENDBOND
ČS korporátní dluhopisový
High Yield dluhopisový
KONZERVATIVNÍ MIX FF
VYVÁŽENÝ MIX FF
DYNAMICKÝ MIX FF
AKCIOVÝ MIX FF
Smíšený fond
Institucionální akciový FF
SPOROTREND
TOP STOCKS
GLOBAL STOCKS FF
ČS fond životního cyklu 2020 FF
ČS fond životního cyklu 2030 FF
FOND ŘÍZENÝCH VÝNOSŮ
OSOBNÍ PORTFOLIO 4
PLUS
Privátní portfolio AR 0
Privátní portfolio AR 25
Privátní portfolio AR 50
Privátní portfolio AR 75
Privátní portfolio AR AKCIE
Privátní portfolio AR REALITY
Privátní portfolio AR ALTER. INVESTICE
Dluhopisový fond
CERTIFIKÁTOVÝ FOND
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
Potencially higher income 
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
7
7
7
7
7
7
7
7
7
7
7
7
7
7
7
7
7
7
7
7
7
7
7
7
7
7
7
7
7
7
The SRRI (a numerical scale of 1 to 7) is based on the volatility of the fund’s unit certiﬁcate value in the past. Therefore assigning to the
appropriate category of the SRRI is not an indicator of the future development. The assigning to the appropriate category of the SRRI can
be revised from time to time. Neither the assigning of the fund into the lowest category of the SRRI means the investment without a risk.
ISCS computes the SRRI of the fund on an ongoing basis according to the uniﬁed European methodology3.
1
Section 7, par. 2 of the CNB Decree No. 193/2011 Coll., on the minimum requisites of the statute and on the conditions for the use of the name Short-Term Money Market Fund and
Money Market Fund
2
COMMISSION REGULATION 583/2010 of 1 July 2010 implementing Directive 2009/65/EC (UCITS IV) of the European Parliament and of the Council as regards key investor information.
The Czech Government regulation 189/2011 on providing the key information of the special fund of collective investment.
3
CESR’s guidelines on the methodology of the synthetic risk and reward indicator in the Key Investor Information Document
73
Investiční společnost České spořitelny, a. s., 2013 Annual Report
Financial Section
Non-Consolidated Financial Results
Investiční společnost České spořitelny, a. s.
Investiční společnost České spořitelny, a. s., SPOROINVEST – otevřený podílový fond
Investiční společnost České spořitelny, a. s., SPOROBOND – otevřený podílový fond
Investiční společnost České spořitelny, a. s., TRENDBOND – otevřený dluhopisový podílový fond
Investiční společnost České spořitelny, a. s., ČS korporátní dluhopisový – otevřený podílový fond
Investiční společnost České spořitelny, a. s., High Yield dluhopisový – otevřený podílový fond
Investiční společnost České spořitelny, a. s., BONDINVEST – otevřený podílový fond
Investiční společnost České spořitelny, a. s., SPOROTREND – otevřený podílový fond
Investiční společnost České spořitelny, a. s., GLOBAL STOCKS FF – otevřený podílový fond
Investiční společnost České spořitelny, a. s., TOP STOCKS – otevřený podílový fond
Investiční společnost České spořitelny, a. s., KONZERVATIVNÍ MIX FF – otevřený podílový fond
Investiční společnost České spořitelny, a. s., VYVÁŽENÝ MIX FF – otevřený podílový fond
Investiční společnost České spořitelny, a. s., DYNAMICKÝ MIX FF – otevřený podílový fond
Investiční společnost České spořitelny, a. s., AKCIOVÝ MIX FF – otevřený podílový fond
Investiční společnost České spořitelny, a. s., Smíšený fond – otevřený podílový fond
Investiční společnost České spořitelny, a. s., OSOBNÍ PORTFOLIO 4 – otevřený podílový fond
Investiční společnost České spořitelny, a. s., PLUS – otevřený podílový fond
Investiční společnost České spořitelny, a. s., FOND ŘÍZENÝCH VÝNOSŮ – otevřený podílový fond
Investiční společnost České spořitelny, a. s., ČS fond životního cyklu 2020 FF – otevřený podílový fond
Investiční společnost České spořitelny, a. s., ČS fond životního cyklu 2030 FF – otevřený podílový fond
Investiční společnost České spořitelny, a. s., LIKVIDITNÍ FOND – otevřený podílový fond
Investiční společnost České spořitelny, a. s., Privátní portfolio AR 0 – otevřený podílový fond
Investiční společnost České spořitelny, a. s., Privátní portfolio AR 25 – otevřený podílový fond
Investiční společnost České spořitelny, a. s., Privátní portfolio AR 50 – otevřený podílový fond
Investiční společnost České spořitelny, a. s., Privátní portfolio AR 75 – otevřený podílový fond
Investiční společnost České spořitelny, a. s., Privátní portfolio AR AKCIE – otevřený podílový fond
Investiční společnost České spořitelny, a. s., Privátní portfolio AR REALITY – otevřený podílový fond
Investiční společnost České spořitelny, a. s., Privátní portfolio AR ALTERNATIVNÍ INVESTICE –
otevřený podílový fond
Investiční společnost České spořitelny, a. s., Institucionální akciový FF – otevřený podílový fond
Investiční společnost České spořitelny, a. s., Dluhopisový fond – otevřený podílový fond
Investiční společnost České spořitelny, a. s., CERTIFIKÁTOVÝ FOND – otevřený podílový fond
77
94
113
132
149
167
184
201
219
235
251
268
285
302
319
336
353
370
386
402
418
433
449
465
481
497
513
529
546
562
578
74
Independent Auditor’s Report
To the Shareholder of Investiční společnost České spořitelny, a. s.:
I. We have audited the ﬁnancial statements of Investiční společnost České spořitelny, a. s. (“the Company”) as at 31 December 2013 presented in the annual report of the Company on pages 77–93 and our audit report dated 4 February 2014 stated the following:
“We have audited the accompanying ﬁnancial statements of Investiční společnost České spořitelny, a. s. which comprise the balance sheet
as at 31 December 2013, and the income statement, statement of changes in equity for the year then ended, and a summary of signiﬁcant
accounting policies and other explanatory information. For details of Investiční společnost České spořitelny, a. s. see Note 1 to the ﬁnancial
statements.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these ﬁnancial statements in accordance with accounting principles
generally accepted in the Czech Republic, and for such internal control as management determines is necessary to enable the preparation of
ﬁnancial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these ﬁnancial statements based on our audit. We conducted our audit in accordance with the
Act on Auditors and International Standards on Auditing as amended by implementation guidance of the Chamber of Auditors of the Czech
Republic. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
whether the ﬁnancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the ﬁnancial statements. The procedures selected depend on the auditor’s judgment, including an assessment of the risks of material misstatement of the ﬁnancial statements,
whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation
and fair presentation of the ﬁnancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the ﬁnancial statements.
We believe that the audit evidence we have obtained is sufﬁcient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the ﬁnancial statements present fairly, in all material respects, the ﬁnancial position of Investiční společnost České
spořitelny, a. s. as at 31 December 2013, and its ﬁnancial performance for the year then ended in accordance with accounting principles
generally accepted in the Czech Republic.”
II. We have also audited the consistency of the annual report with the ﬁnancial statements described above. The management of Investiční
společnost České spořitelny, a. s. is responsible for the accuracy of the annual report. Our responsibility is to express, based on our audit, an
opinion on the consistency of the annual report with the ﬁnancial statements.
We conducted our audit in accordance with International Standards on Auditing and the related implementation guidance issued by the
Chamber of Auditors of the Czech Republic. Those standards require that we plan and perform the audit to obtain reasonable assurance as
to whether the information presented in the annual report that describes the facts reﬂected in the ﬁnancial statements is consistent, in all
material respects, with the ﬁnancial statements. We have checked that the accounting information presented in the annual report on pages
1–73 is consistent with that contained in the audited ﬁnancial statements as at 31 December 2013. Our work as auditors was conﬁned to
checking the annual report with the aforementioned scope and did not include a review of any information other than that drawn from the
audited accounting records of the Company. We believe that our audit provides a reasonable basis for our opinion.
Based on our audit, the accounting information presented in the annual report is consistent, in all material respects, with the ﬁnancial statements described above.
A member ﬁrm of Ernst & Young Global Limited,
Ernst & Young Audit, s. r. o. with its registred ofﬁce at Na Florenci 2116/15, 110 00 Prague 1 – Nové Město,
has been incorporated in the Commercial Register administered by the Municipal Court in Prague,
Section C, entry No. 88504, under Identiﬁcation No. 26704153.
75
III. In addition, we have reviewed the accuracy of the information contained in the report on related parties of Investiční společnost
České spořitelny, a. s. for the year ended 31 December 2013 presented in the annual report of the Company on pages 70–72. As described
in the report on related parties, the Company prepared this report in accordance with Act on Commercial Corporations, effective from
1 January 2014.
The management of Investiční společnost České spořitelny, a. s. is responsible for the preparation and accuracy of the report on related parties. Our responsibility is to issue a report based on our review.
We conducted our review in accordance with the applicable International Standard on Review Engagements and the related Czech standard
No. 56 issued by the Chamber of Auditors of the Czech Republic. Those standards require that we plan and perform the review to obtain
moderate assurance as to whether the report on related parties is free from material misstatement. The review is limited primarily to enquiries of company personnel, to analytical procedures applied to ﬁnancial data and to examining, on a test basis, the accuracy of information,
and thus provides less assurance than an audit. We have not performed an audit and, accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the report on related parties of Investiční společnost
České spořitelny, a. s. for the year ended 31 December 2013 is materially misstated.
30 May 2014
Prague, Czech Republic
Ernst & Young Audit, s.r.o.
License No. 401
Represented by partner
Roman Hauptﬂeisch
Auditor, Licence no. 2009
A member ﬁrm of Ernst & Young Global Limited,
Ernst & Young Audit, s. r. o. with its registred ofﬁce at Na Florenci 2116/15, 110 00 Prague 1 – Nové Město,
has been incorporated in the Commercial Register administered by the Municipal Court in Prague,
Section C, entry No. 88504, under Identiﬁcation No. 26704153.
76
Independent Auditor’s Report
To the Shareholder of Investiční společnost České spořitelny, a. s.:
We have audited the accompanying ﬁnancial statements of Investiční společnost České spořitelny, a. s. which comprise the balance sheet
as at 31 December 2013, and the income statement, statement of changes in equity for the year then ended, and a summary of signiﬁcant
accounting policies and other explanatory information. For details of Investiční společnost České spořitelny, a. s. see Note 1 to the ﬁnancial
statements.
Managemenťs Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these ﬁnancial statements in accordance with accounting principles
generally accepted in the Czech Republic, and for such internal control as management determines is necessary to enable the preparation of
ﬁnancial statements that are free from materiál misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these ﬁnancial statements based on our audit. We conducted our audit in accordance with the
Act on Auditors and International Standards on Auditing as amended by implementation guidance of the Chamber of Auditors of the Czech
Republic. Those standards require that we comply with ethical requirements and pian and perform the audit to obtain reasonable assurance
whether the ﬁnancial statements are free from materiál misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the ﬁnancial statements. The procedures selected depend on the auditor’s judgment, including an assessment of the risks of materiál misstatement of the ﬁnancial statements,
whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation
and fair presentation of the ﬁnancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the ﬁnancial statements.
We believe that the audit evidence we have obtained is sufﬁcient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the ﬁnancial statements present fairly, in all materiál respects, the ﬁnancial position of Investiční společnost České
spořitelny, a. s. as at 31 December 2013, and its ﬁnancial performance for the year then ended in accordance with accounting principles
generally accepted in the Czech Republic.
4 February 2014
Prague, Czech Republic
Ernst & Young Audit, s.r.o.
License No. 401
Represented by partner
Roman Hauptﬂeisch
Auditor, Licence no. 2009
A member ﬁrm of Ernst & Young Global Limited,
Ernst & Young Audit, s. r. o. with its registred ofﬁce at Na Florenci 2116/15, 110 00 Prague 1 – Nové Město,
has been incorporated in the Commercial Register administered by the Municipal Court in Prague,
Section C, entry No. 88504, under Identiﬁcation No. 26704153.
77
Investiční společnost České spořitelny, a. s., 2013 Annual Report
Balance Sheet
at 31 December 2013
(in thousands CZK)
Line
Current year
Prior year
Gross
Adjustments
Net
Net
005
006
014
019
022
024
025
027
028
029
031
131,265
131,265
70,330
3,288
12,849
63,084
764
4
5,649
56,667
898
0
0
0
(3,288)
(11,711)
0
0
0
0
0
0
131,265
131,265
70,330
0
1,138
63,084
764
4
5,649
56,667
898,
69,500
69,500
68,985
0
543
58,431
1,121
3,709
2,291
51,310
724
032
281,714
(14,999)
266,715
198,183
Line
Current year
Prior year
042
043
045
047
048
049
056
057
060
061
063
070
071
072
103,781
30,345
6,725
503
1,719
64,489
70,000
70,000
14,212
14,000
212
32,358
46,364
266,715
61,103
754
2,405
593
13,478
43,873
70,000
70,000
14,222
14,000
222
18,984
33,874
198,183
Assets
3 Amounts due from banks
a) Repayable on demand
6 Shares, participation certiﬁcates and other interests
9 Intangible ﬁxed assets
10 Tangible ﬁxed assets
11 Other assets
a) Trade receivables
c) State – tax receivables
d) Deferred tax asset
e) Other
13 Prepayments and accrued income
Total assets
(in thousands CZK)
Liabilities
4 Other liabilities
a) Trade payables
c) State – tax liabilities
e) Social security payables
f) Payables to employees
g) Other payables
8 Share capital
a) Registered share capital paid up
10 Reserve funds and other funds from proﬁt
a) Mandatory reserve funds and risk funds
c) Other funds from proﬁt
14 Retained earnings
15 Proﬁt or loss for the period
Total liabilities
78
Investiční společnost České spořitelny, a. s., 2013 Annual Report
Proﬁt and Loss Account
for the year ended 31 December 2013
(in thousands CZK)
1 Interest income and similar income
3 Income from shares and unit certiﬁcates
c) Other income from shares and unit certiﬁcates
4 Commission and fee income
a) Management fee
c) Other ﬁnance income
5 Commission and fee expenses
a) Brokerage fees for the sale of participation certiﬁcates
c) Fees associated with the management of assets of funds
e) Other ﬁnance expenses
6 Net proﬁt or loss from ﬁnancial operations
7 Other operating income
8
9
11
19
23
24
a) Revenues from the sale of ﬁxed assets and material
b) Other
Other operating expenses
a) Net book value of intangible and tangible ﬁxed assets and materials sold
b) Other
Administrative expenses
a) Personnel expenses
aa) Wages and salaries
ab) Social security and health insurance
ac) Other personnel expenses
b) Other administrative expenses
Depreciation, creation and use of reserves and provisions
a) Depreciation of tangible ﬁxed assets
Proﬁt or loss for the period from ordinary operations before taxation
Income tax
a) Current income tax
b) Deferred income tax
Proﬁt and loss for the period after tax
Line
Current
Period
Previous
Period
05
08
09
10
12
13
14
16
18
19
20
32
30
30
506,590
506,410
180
347,639
330,624
12,228
4,787
1,187
45
274
0
0
482,301
482,121
180
334,990
312,482
11,532
10,976
4,357
0
21
22
23
24
25
26
27
28
29
30
31
33
34
43
47
48
49
50
1
44
1,731
0
1,731
100,802
65 387
50,324
14,140
923
35,415
159
159
57,553
11,189
14,547
(3,358)
46,364
0
0
2,234
0
2,234
107,153
64,514
56,053
7,531
930
42,639
267
267
42,288
8,414
6,280
2,134
33,874
79
Investiční společnost České spořitelny, a. s., 2013 Annual Report
Statement of Changes in Equity
for the year ended 31 December 2013
Proﬁt /
loss for
the current
period
Total
7,918
34,172
126,309
11,066
(22,606)
(11,066)
(500)
33,874
(22,606)
0
0
(497)
33,874
18,984
18,984
33,874
33,874
137,080
137,080
13,374
(20,000)
(13,374)
(500)
46,364
(20,000)
0
0
(510)
46,364
32,358
46,364
162,934
(in thousands CZK)
Share
capital
Reserve
funds
Other funds
from proﬁt
Retained
earnings
Balance at 1 Jan 2012
70,000
14,000
219
Dividends
Transfer to retained earnings
Allocation to funds
Use of funds
Net proﬁt/loss for the period
Balance at 31 Dec 2012
Balance at 1 Jan 2013
500
(497)
70,000
70,000
14,000
14,000
Dividends
Transfer to retained earnings
Allocation to funds
Use of funds
Net proﬁt/loss for the period
Balance at 31 Dec 2013
222
222
500
(510)
70,000
14,000
212
80
Investiční společnost České spořitelny, a. s., 2013 Annual Report
Notes to the Financial Statements
for the year ended 31 December 2013
1. Organisation and Description
of Business
Members of Statutory Bodies
as at 31 December 2013:
Formation and Description of the Business
Board of Directors
Investiční společnost České spořitelny, a. s. (hereinafter “ISČS” or
the “Company”) was incorporated by an entry in the Commercial
Register kept in the Regional Court in Prague, Section B, Insert
1154, on 27 December 1991.
Ing. Martin Řezáč, Chairman
Ing. Štěpán Mikolášek, Vice-chairman
Adrianus Janmaat, Member
Supervisory Board
As part of the transformation of the Financial Group of Česká
spořitelna (hereinafter the “ČS”), the Company’s name was
changed from Spořitelní investiční společnost, a. s. to Investiční
společnost České spořitelny, a. s. based on a resolution of the Municipal Court in Prague. This change was entered into the Commercial Register on 15 August 2001.
Mag. Heinz Bednar, Chairman
Christian Schön, Vice-chairman
Günther Mandl, Member
Ing. Daniel Heler, Member
Ing. Jiří Škorvaga, CSc., Member
Ing. Pavel Kráčmar, Member
Česká spořitelna, a. s., acts as a depository of ISČS.
Mr. Martin Rezac became the Chairman of the Board of Directors
as of 2 April 2013, after Mr. Martin Burda resigned from this function as of 31 March 2013.
Shareholders of the Company
As at 31 December 2013, the ISČS’s sole shareholder is Erste Asset
Management GmbH (with its registered ofﬁce at Habsburgergasse
2, 1010 Vienna, Austria), holding 100 percent of the share capital.
Mr. Christian Schön became the new member of the Supervisory
Board as of 31 October 2013, and subsequently was elected vicechairman of the Supervisory Board from 29 January 2014. Mr. Petr
Bobysud terminated a membership in the Supervisory as of 6 September 2013.
The Company’s Registered Ofﬁce Address
Investiční společnost České spořitelny, a. s.
Evropská 2690/17, 160 00 Prague 6, Dejvice
Czech Republic
Organisational Structure
CEO
Finance & Operations
Portfolio Management
Fund Management
Ofﬁce Management
Private Clients
Equity Funds
Reporting
Institutional Clients
Bond Funds
Compliance
Product
Management
Risk Management
The organisational structure of ISČS is deﬁned in the Organisational Rules which set out duties, authorities and accountability of individual
departments of ISČS. No changes in the organisational structure of the Company occurred in 2013.
81
Investiční společnost České spořitelny, a. s., 2013 Annual Report
– Management of customer assets following the contracts with
a customer, if the assets include an investment instrument.
As at 31 December 2013, ISČS managed the following open-ended mutual funds:
ISČS, a. s. – FOND ŘÍZENÝCH VÝNOSŮ – otevřený podílový fond
ISČS, a. s. – AKCIOVÝ MIX FF – otevřený podílový fond
ISČS, a. s. – DYNAMICKÝ MIX FF – otevřený podílový fond
ISČS, a. s. – VYVÁŽENÝ MIX FF – otevřený podílový fond
ISČS, a. s. – SPOROINVEST – otevřený podílový fond
ISČS, a. s. – SPOROBOND – otevřený podílový fond
ISČS, a. s. – SPOROTREND – otevřený podílový fond
ISČS, a. s. – BONDINVEST – otevřený podílový fond
ISČS, a. s. – GLOBAL STOCKS FF – otevřený podílový fond
ISČS, a. s. – TRENDBOND – otevřený dluhopisový podílový fond
ISČS, a. s. – ČS korporátní dluhopisový – otevřený podílový fond
ISČS, a. s. – KONZERVATIVNÍ MIX FF – otevřený podílový fond
ISČS, a. s. – High Yield dluhopisový – otevřený podílový fond
ISČS, a. s. – TOP STOCKS – otevřený podílový fond
ISČS, a. s. – Fond 2005 – otevřený podílový fond
ISČS, a. s. – ČS fond životního cyklu 2020 FF – otevřený podílový fond
ISČS, a. s. – ČS fond životního cyklu 2030 FF – otevřený podílový fond
ISČS, a. s. – Privátní portfolio AR 25 – otevřený podílový fond
ISČS, a. s. – Privátní portfolio AR 50 – otevřený podílový fond
ISČS, a. s. – Privátní portfolio AR 75 – otevřený podílový fond
ISČS, a. s. – Privátní portfolio AR 0 – otevřený podílový fond
ISČS, a. s. – Institucionální akciový FF – otevřený podílový fond
ISČS, a. s. – LIKVIDITNÍ FOND – otevřený podílový fond
ISČS, a. s. – OSOBNÍ PORTFOLIO 4 – otevřený podílový fond
ISČS, a. s. – Privátní portfolio AR ALTERNATIVNÍ INVESTICE –
otevřený podílový fond
ISČS, a. s. – Privátní portfolio AR REALITY – otevřený podílový fond
ISČS, a. s. – Privátní portfolio AR AKCIE – otevřený podílový fond
ISČS, a. s. – Smíšený fond – otevřený podílový fond
ISČS, a. s. – PLUS – otevřený podílový fond
ISČS, a. s. – Dluhopisový fond – otevřený podílový fond
ISČS, a. s. – CERTIFIKÁTOVÝ FOND – otevřený podílový fond
The ﬁnancial statements are based on the accrual principle, that is,
transactions and other events are recognised in the accounting period in which they occur, regardless of when the related monetary
ﬂow arises. The ﬁnancial statements are presented in compliance
with the prudence concept and the going concern assumption.
17 December 2012 the Czech National bank granted to the investment company permission for creation of the new special
securities fund, Investiční společnost České spořitelny, a. s.,
CERTIFIKÁTOVÝ FOND – otevřený podílový fond (resolution
2012/12370/570). The resolution became effective on 17 December 2012. First participation certiﬁcates were issued on 15 January
2013.
The presentation of the ﬁnancial statements requires that ISČS
make estimates which have an impact on the reported amounts of
assets and liabilities and contingent assets and liabilities as at the
date of the ﬁnancial statements as well as expenses and income in
the relevant accounting period. These estimates are based on information available as at the date of the ﬁnancial statements and may
differ from the actual results.
Principal Business
The ﬁnancial statements contain the balance sheet, proﬁt and loss
account, statement of changes in equity, and notes to the ﬁnancial
statements.
The principal business activities of the Company are as follows:
– Collective investment involving the formation and management of mutual funds;
– Management of investment funds on the basis of a management contract;
– Management of assets in the mutual fund or other investment
company or the assets of the investment fund which did not
enter into the management contract;
– Activities relating to collective investments such as services
for other investment companies or an investment fund which
did not enter into the management contract;
ISČS operates solely on the Czech market, and all revenues are
generated in the Czech Republic. The authorisation for the activities of an investment company was granted by the Czech National
Bank on 26 April 2006, ref. no. 41/N/134/2005/5. The resolution
took legal effect on 18 May 2006. This authorisation replaces
a permission granted by the Czech Finance Ministry and approved
by the Securities Commission through its resolution dated 26 April
1999, ref no. 111/2648/R/1999; this resolution took legal effect on
4 May 1999. The original resolution of the Czech Ministry of Finance dated 19 April 1993, ref. no. 101/21 693/93, took effect on
10 May 1993.
2. Basis of Preparation
The ﬁnancial statements have been prepared on the basis of underlying accounting records maintained in accordance with Accounting Act 563/1991 Coll., and applicable regulations and decrees
in compliance with and in the scope deﬁned in Czech Finance
Ministry Regulation No. 501/2002, as amended. This sets out the
overall framework for the presentation of the ﬁnancial statements,
and guidelines for the structure and minimum requirements for the
content of the ﬁnancial statements of banks and certain ﬁnancial
institutions, and Czech Accounting Standards for Financial Institutions.
All amounts are stated in Czech Crowns (CZK). Thousands of
CZK are the measurement unit, unless stated otherwise.
The ﬁnancial statements, including notes, are unconsolidated.
Explanation Added for Translation into English
These ﬁnancial statements are presented on the basis of accounting
principles and standards generally accepted in the Czech Republic.
82
Investiční společnost České spořitelny, a. s., 2013 Annual Report
Certain accounting practices applied by the Company that conform with generally accepted accounting principles and standards
in the Czech Republic may not conform with generally accepted
accounting principles in other countries.
3. Accounting Policies
3.1 Transaction Recognition Date
ISČS recognises the sales or purchases of securities using settlement date accounting. Transactions with securities outstanding at
the end of the month are accounted for in the off-balance sheet accounts from their trade date to their settlement date and are thereafter revaluated at fair value through the balance sheet.
The transaction recognition date can also be the date when money
in circulation is paid or received, the date when foreign currency
is purchased or sold, the date when a payment is made, the date
when ownership right is acquired or terminated, when a receivable
or payable arises, changes or ceases to exist, when assets move
within an accounting entity, and the date when other matters to be
included in the accounting records occur, or when the documents
supporting these other matters are available, or when other matters
are a consequence of internal conditions of the accounting entity
and/or special regulations.
3.2 Valuation of Assets and Liabilities
3.2.1 Tangible and Intangible Assets
Tangible ﬁxed assets include identiﬁable assets with physical substance which have an estimated useful life greater than one year
and an acquisition cost greater than CZK 40 thousand.
Intangible ﬁxed assets include identiﬁable assets with physical
substance which have an estimated useful life greater than one year
and an acquisition cost greater than CZK 60 thousand.
Tangible and intangible ﬁxed assets are stated at an acquisition
cost less accumulated depreciation and accumulated amortisation,
respectively, expressing the degree of the assets’ wear and tear.
Land and works of art, irrespective of their valuation, and assets
under construction are not depreciated.
line basis over their estimated useful lives and according to the
depreciation/amortisation plan.
Depreciation/amortisation periods of the individual asset categories:
Assets
Software
Movable assets and sets of movable assets
Depreciation/
amortisation
period
4-8 years
4-12 years
3.2.2 Securities
Upon acquisition, in accordance with ISČS’s strategy, all securities
are included in the portfolio of securities measured at fair value
through proﬁt or loss.
Securities are measured at cost upon acquisition. The cost includes
direct transaction costs related to the acquisition of securities.
ISČS re-measures securities at fair value as at the last day of each
month and as at the date the sale is realised.
Capital gains or losses are recorded in the proﬁt and loss account
through the ‘Proﬁt or loss from ﬁnancial operations’.
The fair value of securities is determined with reference to the
market value applicable as at the date of the fair value measurement, if the securities can be sold for that price.
3.2.3 Provisions
Provisions are made against assets and other assets which are not
re-measured at fair value or are not valued under the equity method
in cases where temporary asset impairment is identiﬁed.
Provisions are subject to year-end review procedures when their
level and appropriateness are assessed.
As at 31 December 2013 and 2012, ISČS did not make any provisions.
3.2.4 Equity
The provisions are recorded against assets whenever temporary asset impairment is identiﬁed. If the impairment is permanent, the
assets are written off.
The basic capital of the Company is stated at the amount recorded
in the Commercial Register maintained in the Municipal Court.
Any increase or decrease in the basic capital made pursuant to
the decision of the General Meeting which was not entered in the
Commercial Register as at the ﬁnancial statements date is recorded
through changes in basic capital. Contributions in excess of basic
capital are recorded as share premium. Other capital funds consist
of monetary and non-monetary contributions in excess of basic
capital, tangible assets donations, etc.
Tangible and intangible ﬁxed assets are depreciated/amortised for
accounting purposes in the month following the month the assets
are put into use. The assets are depreciated/amortised on a straight
In accordance with the Commercial Code, the Company creates
a legal reserve fund from proﬁt or from amounts contributed by
partners above their contributions.
Tangible assets with an acquisition price below CZK 40 thousand
and intangible assets with a price below CZK 60 thousand are
charged to expenses in the period in which they were acquired.
83
Investiční společnost České spořitelny, a. s., 2013 Annual Report
In the ﬁrst year in which proﬁt is generated, a joint-stock company should allocate 20% of proﬁt after tax (however, not more
than 10% of basic capital) to the legal reserve fund. In subsequent
years, the legal reserve fund is allocated 5% of proﬁt after tax until
the fund reaches 20% of basic capital. These funds can only be
used to offset losses.
In accordance with its Articles of Association, the Company creates social fund.
3.2.5 Reserves
Reserves are liabilities of uncertain timing or amount. A reserve
is recognised when the Company has a present obligation (legal
or constructive) as a result of a past event, it is probable (i.e. more
likely than not) that an outﬂow of resources embodying economic
beneﬁts will be required to settle the obligation and a reasonably
reliable estimate can be made of the amount of the obligation. Reserves are used exclusively for the purposes they were created for.
Reserve balances are reviewed annually, and the reserves are reversed or carried forward based on the review results.
3.2.6 Income Tax
The income tax base is calculated from the current year’s proﬁt
or loss by adding all tax non-deductible expenses and subtracting
non-taxable income and items adjusting the tax base. The current
income tax liability is calculated at the end the tax period in compliance with Income Taxes Act No. 586/1992 Coll., as amended.
The tax rate for 2013 is 19 percent (2012: 19 percent).
The deferred tax liability (asset) is determined from all temporary
differences between the reported carrying amount of assets and liabilities and their value for tax purposes. Deferred tax is calculated
using the balance sheet liability method. The balance sheet liability
method focuses on all temporary differences between the tax base
of an asset or liability and its carrying amount in the balance sheet.
The amount of a deferred tax asset or liability is calculated as equal
to the resulting difference multiplied by the income tax rate set
out in Income Taxes Act No. 586/1992 Coll. that is expected to
apply in the period when the tax liability is settled or the tax asset
realised.
are translated at the Czech National Bank’s exchange rate prevailing as at that date.
3.2.8 Use of Estimates
The preparation of ﬁnancial statements requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities at the date of the ﬁnancial statements and
the reported amounts of revenues and expenses during the reporting period. The Company management prepared these estimates
and predictions based on all available relevant information. These
estimates and assumptions are based on information available as
at the date of the ﬁnancial statements and may differ from actual
results.
3.3 Income and Expenses Recognition Policies
3.3.1 Interest Income
Interest income from current and term accounts placed with banks
is, based on a bank statement, posted to income against the appropriate balance sheet account. At the balance sheet date, the prorated amount of interest from term deposits is recognised using the
accrual principle, i.e. in the period to which it relates irrespective
of the time of its receipt. Accrued interest income related to the
assets is accounted for together with these assets on the face of the
balance sheet.
3.3.2 Interest Expenses
Interest expenses from loans are, based on a bank statement, posted to expenses against the appropriate balance sheet account. At
the balance sheet date, the pro-rated amount of interest from loans
is recognised using the accrual principle, i.e. in the period to which
it relates irrespective of the time of its payment. Accrued interest
expenses related to the liabilities are accounted for together with
these liabilities on the face of the balance sheet.
3.3.3 Fees and Commissions
Fees and commissions are accrued and posted to the income statement, except for the commission paid upon the acquisition of securities where the commission is part of the cost of the security.
3.3.4 Subsequent Events
Deferred tax liabilities are always recognised while deferred tax
assets are recognised only up to the amount of probable future taxable income against which the deferred tax asset can be offset. If
the deferred tax asset is not likely to be realised, it is appropriately
written down.
The impact of events that occurred between the balance sheet date
and the date of the ﬁnancial statements preparation is recognized in
the ﬁnancial statements provided these events provide additional
evidence about conditions that existed at the date of the balance
sheet.
3.2.7 Foreign Currency Translations
If material events reﬂecting the facts occurring after the balance
sheet date happened between the balance sheet date and the date
of the ﬁnancial statements preparation the consequences of these
events are disclosed in the notes to the ﬁnancial statements but not
recognized in the ﬁnancial statements.
ISČS translates foreign currencies using the foreign exchange
rate promulgated by the Czech National Bank as at the relevant
date. Exchange rate gains and losses are recorded as income or expenses, as appropriate, which are reported in the income statement
through the ‘Net proﬁt or loss from ﬁnancial operations’. At the
date of the ﬁnancial statements, the relevant assets and liabilities
84
Investiční společnost České spořitelny, a. s., 2013 Annual Report
4. Used Financial Instruments
4.1 Risk Management
ISČS monitors the market risks associated with its portfolio on an
ongoing basis. ISČS follows its policies of management of own
assets. The purpose of investment is always either achieving additional gains on excess liquidity or support of investment products of ISČS. The portfolio primarily comprises participation certiﬁcates of open-ended mutual funds managed by ISČS for which
a sound risk monitoring, measuring and assessment framework
was established together with an appropriate set of tools, which
provides for both the mediated management of the risk attached to
ISČS’s securities portfolio via the funds’ risk management and the
monitoring of an overall risk via Value at Risk (VAR). ISČS also
regularly assesses volume of equity compared to the undertaken
risks and it monitors its adequacy.
In managing the risk exposure of funds, ISČS employs a wide
range of tools for measuring, managing and, mainly, eliminating
the risk exposure of the particular portfolios with signiﬁcant attention being paid to market risks, operational risks, concentration
risks and counterparty risk (credit risks).
Risk management also includes managing the funds’ performance
that is, measuring the performance of funds, comparing it against
the competition as well as the benchmark in particular cases where
applicable for the fund.
In addition to statutory restrictions, the funds are subject to a set
of internal limits which have a direct impact on the allocation of
investment products on the particular markets by their risk proﬁles,
the maximum FX exposure, the modiﬁed duration zone within
which the individual funds fall, rating structure of portfolios, etc.
The relevant limits are applied to the individual funds to correspond with the funds’ nature.
The VaR of all funds is assessed on daily basis, broken down to FX
VaR, Interest Rate VaR and Equity VaR and to the global VaR of
the fund’s assets. The above values serve as a basis for the identiﬁcation of critical risk areas/segments. This identiﬁcation has an
impact on the re-investment process. Limits are also set for VaR of
the individual funds, either as compared to the risk of the benchmark (relative limit) or as a maximum value of the VaR (absolute
limit).
To assess the impact of extremely unfavourable market conditions,
a maximum loss resulting from stress situations is estimated for
each fund. These situations particularly include critical developments in interest rates, equity markets and foreign exchange rates.
Stress testing is performed based on stress scenarios taking into
account the risk characteristics of individual funds. Major attention
is paid to those risk factors that the Company is most vulnerable to.
Adherence to the above-mentioned limits is reviewed on an ongoing basis together with the effectiveness of the setting of the limits.
The limits are adjusted as needed.
5. Additional Information on the Financial Statements
5.1 Amounts due from banks
Amounts due from banks
31 Dec 2013 31 Dec 2012
Repayable on demand
131,625
69,500
Total
131,625
69,500
All amounts due from banks are repayable on demand. The contractual interest rate repricing dates for all receivables from banks are less
than three months.
5.2 Securities
All securities are maintained in the portfolio of securities at fair value through proﬁt or loss.
Shares and Participation Certiﬁcates
At 31 Dec 2013
ERSTE koš ﬁremních dluhopisů 2016
Privátní portfolio AR AKCIE OPF
PLUS otevřený podílový fond
Smíšený OPF
Fond 2005
Shares in total
Number of
participation
certiﬁcates
Nominal
value in
CZK
Rate in CZK
Total fair
value
227,264
1,590,674
39,767,374
1,272
1,457,938
100
1
1
1,000
1
112.86
1.1288
1.0183
840.7928
0.9060
25,649
1,796
40,495
1,069
1,321
70,330
85
Investiční společnost České spořitelny, a. s., 2013 Annual Report
At 31 Dec 2012
ERSTE koš ﬁremních dluhopisů 2016
Smíšený fond
PLUS otevřený podílový fond
Privátní portfolio AR AKCIE
Fond 2005
Number of
participation
certiﬁcates
Nominal
value in
CZK
Rate in CZK
Total fair
value
227,264
1,235
39,767,374
1,590,674
1,457,938
100
1,000
1
1
1
109.47
792.4847
1.019
0.9467
0.7538
24,878
979
40,523
1,506
1,099
Total participation certiﬁcates
68,985
A change in real value of participation certiﬁcates for year 2013 amounted to CZK 1,316 thousand (2012: CZK 2,410 thousand) has been
stated at entry Net proﬁt or loss from Financial Operations.
5.3 Intangible and Tangible Assets
5.3.1 Intangible Fixed Assets
Cost
Software
Total
Balance at 1 Jan 2012
Additions
Disposals
Balance at 31 Dec 2012
Additions
Disposals
3,288
–
–
3,288
–
–
3,288
–
–
3,288
–
–
Balance at 31 Dec 2013
3,288
3,288
Software
Total
Balance at 1 Jan 2012
Amortisation
Accumulated amortisation of disposals
Balance at 31 Dec 2012
Amortisation
Accumulated amortisation of disposals
3,288
–
–
3,288
–
–
3,288
–
–
3,288
–
–
Balance at 31 Dec 2013
3,288
3,288
Accumulated Amortisation
Net book value at 31 Dec 2012
−
−
Net book value at 31 Dec 2013
−
−
Low value Works of art
tangible
assets
Total
5.3.2 Tangible Fixed Assets
Cost
Movable
assets and
sets of
movable
assets
Balance at 1 Jan 2012
13,456
729
370
14,555
Additions
Disposals
–
(1,034)
–
(729)
–
–
(1,763)
Balance at 31 Dec 2012
12,422
–
370
12,792
755
(698)
–
–
–
–
755
(698)
12,479
–
370
12,849
Additions
Disposals
Balance at 31 Dec 2013
86
Investiční společnost České spořitelny, a. s., 2013 Annual Report
Accumulated Depreciation
Movable
assets and
sets of
movable
assets
Balance at 1 Jan 2012
Depreciation incl. NBV of disposed assets
Accumulated depreciation of disposals
Balance at 31 Dec 2012
Depreciation incl. NBV of disposed assets
Accumulated depreciation of disposals
Balance at 31 Dec 2013
Low value Works of art
tangible
assets
Total
12,944
729
–
13,673
267
(962)
–
(729)
–
–
267
(1,691)
12,249
–
–
12,249
159
(697)
–
–
–
–
159
(697)
11,711
–
–
11,711
Low value Works of art
tangible
assets
Total
Movable
assets and
sets of
movable
assets
Net book value at 31 Dec 2012
173
–
370
543
Net book value at 31 Dec 2013
768
–
370
1,138
5.3.3 Tangible Assets Held under Finance Lease Agreements
During 2013 and 2012 ISČS did not acquire any assets under ﬁnance lease agreements.
5.4 Other Assets
5.4.1 Trade Receivables
Trade receivables
31 Dec 2013 31 Dec 2012
Receivables from related parties
Other trade receivables
690
74
690
431
Total
764
1,121
ISČS carries no trade receivables past their due dates.
5.4.2 Receivables from Related Parties
Receivables from related parties
31 Dec 2013 31 Dec 2012
Česká spořitelna, a. s
690
690
Total
690
690
The receivable from Česká spořitelna, a. s. totalling CZK 690 thousand comprises advances for lease-related services.
5.5 Tax Receivables
For detailed information on tax receivables and the deferred tax asset refer to Notes 5.23 and 5.25.
5.6 Other Assets – Other
Other
31 Dec 2013 31 Dec 2012
Estimated receivables
of which: estimated receivables from related parties
56,667
56,667
51,308
51,308
Total
56,667
51,308
87
Investiční společnost České spořitelny, a. s., 2013 Annual Report
5.6.1 Estimated Receivables
Estimated receivables from related parties
31 Dec 2013 31 Dec 2012
ISČS, a. s. – OPF BONDINVEST
ISČS, a. s. – OPF SPOROINVEST
ISČS, a. s. – OPF SPOROBOND
ISČS, a. s. – OPF KONZERVATIVNÍ MIX FF
ISČS, a. s. – OPF SPOROTREND
ISČS, a. s. – OPF FOND ŘÍZENÝCH VÝNOSŮ
ISČS, a. s. – OPF AKCIOVÝ MIX FF
ISČS, a. s. – OPF VYVÁŽENÝ MIX FF
ISČS, a. s. – TRENDBOND otevřený dluhopisový podílový fond
ISČS, a. s. – OPF ČS korporátní dluhopisový
ISČS, a. s. – OPF DYNAMICKÝ MIX FF
ISČS, a. s. – OPF GLOBAL STOCKS FF
ISČS, a. s. – OPF TOP STOCKS
ISČS, a. s. – OPF High Yield dluhopisový
ISČS, a. s. – OPF ČS fond životního cyklu 2020 FF
ISČS, a. s. – OPF ČS fond životního cyklu 2030 FF
ISČS, a. s. – OPF Privátní portfolio AR 25
ISČS, a. s. – OPF Privátní portfolio AR 50
ISČS, a. s. – OPF Privátní portfolio AR 75
ISČS, a. s. – OPF Privátní portfolio AR 0
ISČS, a. s. – OPF Fond 2005
ISČS, a. s. – OPF Institucionální akciový FF
ISČS, a. s. – OPF LIKVIDITNÍ FOND
ISČS, a. s. – OPF OSOBNÍ PORTFOLIO 4 (dříve Fond cíleného výnosu)
ISČS, a. s. – OPF PLUS
ISČS, a. s. – OPF Privátní portfolio AR AKCIE
ISČS, a. s. – OPF Privátní portfolio AR ALTERNATIVNÍ INVESTICE
ISČS, a. s. – OPF Privátní portfolio AR REALITY
ISČS, a. s. – OPF Smíšený fond
ISČS, a. s. – OPF Dluhopisový fond
ISČS, a. s. – OPF CERTIFIKÁTOVÝ FOND
Česká spořitelna, a. s. – institucionální investoři
Česká spořitelna, a. s. – privátní investoři
ERSTE – Sparinvest KAG – ESPA Fiducia
ERSTE – Sparinvest KAG – ESPA Český fond ﬁremních dluhopisů
ERSTE – Sparinvest KAG – ESPA Český fond státních dluhopisů
45
4,900
9,135
1,538
5,209
499
876
1,166
1,043
1,963
723
621
5,365
1,084
492
166
994
282
65
152
461
549
142
647
67
244
228
108
226
99
68
10,600
5,765
130
642
373
54
8,037
8,365
330
6,022
540
785
1,019
875
1,143
656
475
3,989
546
447
130
774
387
99
199
378
590
235
737
71
116
115
55
209
62
–
8,546
5,322
–
–
–
Total
56,667
51,308
Estimated receivables consist of income arising from management fees and fees for management of Česká spořitelna, a. s. customers’ assets
for December.
5.7 Deferred Expenses and Accrued Income
Deferred expenses and accrued income
31 Dec 2013 31 Dec 2012
Deferred expenses
898
724
Total
898
724
Deferred expenses principally comprise costs of the use of Bloomberg terminals.
5.8 Other Liabilities
88
Investiční společnost České spořitelny, a. s., 2013 Annual Report
5.8.1 Trade Payables
Trade payables
31 Dec 2013 31 Dec 2012
Payables to related parties
out of which to Česká spořitelna, a. s.
Other trade payables
30,017
30,017
327
78
78
676
Total
30,344
754
The payables to related parties as at 31 December 2013 comprised mainly of payables to Česká spořitelna, a. s. arising from the participation
certiﬁcates distribution fee for November. As at 31 December 2012, the distribution fee for November was settled.
5.9 Tax Payables and the Deferred Tax Liability
For detailed information on tax payables and the deferred tax liability refer to Notes 5.24 and 5.25.
5.10 Other Payables
Other payables
31 Dec 2013 31 Dec 2012
Estimated payables
64,489
43,873
Total
64,489
43,873
Estimated payables principally comprise estimated balances raised for fees for the distribution of participation certiﬁcates and loyalty bonuses for December 2013 amounting to CZK 28,969 thousand (2012: CZK 27,629 thousand). Additionally, the estimated payables include
the annual bonuses of the Company’s employees, including contributions to social security and health insurance to be paid next year, in the
amount of CZK 29,846 thousand (2011: CZK 12,277 thousand) and unbilled supplies provided shortly before the year-end.
5.11 Reserves
The Company does not have any reserves created neither at the end of the year 2013, nor 2012.
5.12 Share Capital
The share capital of ISČS consists of 700 registered certiﬁcate shares, not publicly marketable, with a nominal value of CZK 100 thousand,
i.e. a total of CZK 70,000 thousand.
5.13 Distribution of Proﬁt
The balance of ISČS’s legal reserve fund is equal to 20 percent of the share capital as required by law.
Pursuant to the decision of the sole shareholder of 15 March 2013, ISČS paid a dividend of CZK 20,000 thousand to Erste Asset Management GmbH as the sole shareholder from the proﬁt for the year ended 31 December 2012. A portion of the proﬁt generated in 2012 in the
amount of CZK 500 thousand was used as an allocation to the social fund.
The proﬁt for the year ended 31 December 2013 of CZK 46,364 thousand will be allocated on the basis of a decision of the sole shareholder
acting in the capacity of the general meeting under Section 190 of the Commercial Code.
5.14 Interest Income and Similar Income
Interest income and similar income
2013
2012
Income from receivables from banks
32
274
Total
32
274
In addition to interest income, dividends out of share certiﬁcates in the amount of CZK 30 thousand were paid to ISČS in 2013 (2012: CZK
0 thousand).
89
Investiční společnost České spořitelny, a. s., 2013 Annual Report
5.15 Commission and Fee Income
The commission and fee income principally consists of management fees paid by individual funds and fees for management of Česká
spořitelna, a. s. customers’ assets, as follows.
Income – management fees relating to open–ended mutual funds
2013
2012
ISČS, a. s. – OPF SPOROINVEST
ISČS, a. s. – OPF SPOROBOND
ISČS, a. s. – OPF SPOROTREND
ISČS, a. s. – OPF BONDINVEST
ISČS, a. s. – OPF FOND ŘÍZENÝCH VÝNOSŮ
ISČS, a. s. – OPF AKCIOVÝ MIX FF
ISČS, a. s. – OPF DYNAMICKÝ MIX FF
ISČS, a. s. – OPF VYVÁŽENÝ MIX FF
ISČS, a. s. – OPF GLOBAL STOCKS FF
ISČS, a. s. – TRENDBOND otevřený dluhopisový podílový fond
ISČS, a. s. – OPF ČS korporátní dluhopisový
ISČS, a. s. – OPF KONZERVATIVNÍ MIX FF
ISČS, a. s. – OPF TOP STOCKS
ISČS, a. s. – OPF High Yield dluhopisový
ISČS, a. s. – OPF PF 2
ISČS, a. s. – OPF ČS fond životního cyklu 2020 FF
ISČS, a. s. – OPF ČS fond životního cyklu 2030 FF
ISČS, a. s. – OPF Privátní portfolio AR 25 OPF
ISČS, a. s. – OPF Privátní portfolio AR 50 OPF
ISČS, a. s. – OPF Privátní portfolio AR 75 OPF
ISČS, a. s. – OPF Privátní portfolio AR 0 OPF
ISČS, a. s. – OPF Fond 2005
ISČS, a. s. – OPF Institucionální akciový FF
ISČS, a. s. – OPF PF 1
ISČS, a. s. – OPF LIKVIDITNÍ FOND
ISČS, a. s. – OPF OSOBNÍ PORTFOLIO 4
ISČS, a. s. – OPF PLUS
ISČS, a. s. – OPF Privátní portfolio AR AKCIE
ISČS, a. s. – OPF Privátní portfolio AR ALTERNATIVNÍ INVESTICE
ISČS, a. s. – OPF Privátní portfolio AR REALITY
ISČS, a. s. – OPF Smíšený fond
ISČS, a. s. – OPF Dluhopisový fond
ISČS, a. s. – OPF CERTIFIKÁTOVÝ FOND
Česká spořitelna, a. s. – institucionální investoři
Česká spořitelna, a. s. – privátní investoři
ERSTE – Sparinvest KAG – ESPA Fiducia
ERSTE – Sparinvest KAG – ESPA Český fond ﬁremních dluhopisů
ERSTE – Sparinvest KAG – ESPA Český fond státních dluhopisů
75,769
108,069
63,855
598
6,171
10,158
8,386
13,003
6,491
12,557
20,996
11,469
53,045
10,390
–
5,599
1,787
10,558
3,935
917
2,208
5,112
6,135
–
1,865
8,749
857
2,157
2,106
1,006
2,616
848
686
29,592
14,093
551
2,554
1,522
106,019
86,048
72,167
651
6,602
9,457
7,962
14,545
6,025
10,284
9,848
5,038
44,099
5,203
6,023
5,124
1,422
9,352
5,385
1,211
2,277
4,425
4,262
13
2,388
10,830
922
1,168
1,363
577
2,543
709
–
24,866
13,313
–
–
–
Total
506,410
482,121
5.16 Commission and Fee Expenses
Fee expenses are predominantly composed of the fee paid for the distribution of participation certiﬁcates, evidence of separate records
related to the participation certiﬁcates, and other selected activities related to the management of assets of the mutual funds of ISČS. The
fees expenses are CZK 342,852 thousand in 2013 (2012: CZK 324,014 thousand). These fees are being paid to Česká spořitelna, a. s., and
represent 74.84 percent in 2012 (2012: 72.99 percent) of the management fee income.
90
Investiční společnost České spořitelny, a. s., 2013 Annual Report
5.17 Net Proﬁt or Loss from Financial Operations
Net proﬁt or loss from ﬁnancial operations
2013
2012
From transactions with securities
From foreign exchange differences
1,316
(129)
4,515
(158)
Total
1,187
4,357
The net proﬁt generated from and the net loss incurred in transactions with securities in 2013 and 2012, respectively comprised of realised
and not realised gains/losses on the sale of participation certiﬁcates and the year-on-year increase/decrease in the foreign currency exchange
rates of the participation certiﬁcates in the portfolio.
5.18 Other Operating Income and Expenses
Other operating expenses primarily include contributions to the Securities Traders Guarantee Fund and the Capital Market Association, and
logo usage costs.
5.19 Administrative Expenses
Administrative expenses
Personnel expenses
Other administrative expenses
of which: audit fees
legal, tax and other consulting
Total
2013
2012
65,387
35,415
172
1,561
64,514
42,639
329
2,242
100,802
107,153
Other administrative expenses principally include the costs of outsourcing, advertising, lease of data networks, and software maintenance.
5.20 Employees and Managers
The average number of employees and managers along with personnel expenses were as follows:
Number of
employees
Payroll
costs
Bonuses to
members
of statutory
bodies
Social
security
and health
insurance
Social
expenses
Employees
Managers including Board members
19
3
35,914
14,230
–
180
10,361
3,779
386
537
Total
22
50,144
180
14,140
923
2012
Number of
employees
Payroll
costs
Bonuses to
members
of statutory
bodies
Social
security
and health
insurance
Social
expenses
Employees
Managers including Board members
18
5
34,337
21,536
−
180
5,334
2,197
348
582
Total
23
55,873
180
7,531
930
2013
All ISČS employees have the right to undergo preventive medical checks covered by ISČS. All interested employees are eligible for inclusion in the retirement beneﬁt scheme and the Flexi life insurance.
Members of the Company’s Board of Directors are entitled to use company cars for both business and private purposes.
5.21 Bonuses and Loans to Members of Statutory and Supervisory Bodies
During 2013, the members of the statutory bodies received bonuses of CZK 180 thousand (2012: CZK 180 thousand).
91
Investiční společnost České spořitelny, a. s., 2013 Annual Report
5.22 Income Tax
The corporate income tax charge for the 2013 tax period was calculated at CZK 14,390 thousand (2012: CZK 6,692 thousand).
Balance at
Balance at
31 Dec 2013 31 Dec 2012
Proﬁt before tax
Tax non–deductible expenses
Non–taxable income
Tax base
Tax deductible donations
57,553
42,288
30,462
(12,278)
13,919
(20,984)
75,737
35,223
–
–
Adjusted tax base
75,737
35,223
Tax liability at 19 % (2011: 19 %)
Adjustment of current tax for prior periods
14,390
157
6,692
(412)
Total tax payable
14,547
6,280
5.23 Tax Receivable from the State
As at 31 December 2013, the tax receivable predominantly comprises income tax prepayments of CZK 4 thousand (2012: CZK 3,709
thousand).
5.24 Tax Payable to the State
As at 31 December 2013, the tax payable of CZK 6,725 thousand predominantly includes tax withheld from wages of employees, VAT and
road tax. As at 31 December 2012, the tax payable of CZK 2,405 thousand predominantly includes income tax, tax withheld from wages of
employees, VAT and road tax.
5.25 Deferred Tax Asset/Liability
Balance at
Balance at
31 Dec 2013 31 Dec 2012
Deferred tax assets
Outstanding social security and health insurance related to bonuses and compensated vacation
Difference between the accounting and tax values of ﬁxed assets
29,846
43
12,121
43
Total
29,899
12,164
Tax rate
Total deferred tax assets
Deferred tax liabilities
Difference between the accounting and tax values of ﬁxed assets
Tax rate
Total deferred tax liabilities
Net deferred tax asset
19%
19%
5,679
2,312
160
19%
113
19%
30
5,649
21
2,291
6. Related parties
Related parties are Erste Asset Management GmbH as the sole shareholder of ISČS, ERSTE – Sparinvest KAG, the members of the Financial Group of Česká spořitelna, a. s., and the open-ended mutual funds managed by ISČS and by ERSTE – Sparinvest KAG. For information
on receivables and estimated receivables from and payables to the related parties refer to Notes 5.4., 5.6.1. and 5.8.
As at 31 December 2013, ISČS managed thirty open-ended mutual funds; the total value of managed assets as of that date was CZK
54,979,580 thousand (2012: CZK 50,249,490 thousand; thirty funds).
92
Investiční společnost České spořitelny, a. s., 2013 Annual Report
7. Off-balance sheet assets and liabilities
The off-balance sheet accounts include the managed assets of open-ended mutual funds with an aggregate value of CZK 54,979,580 thousand as at 31 December 2013 (2012: CZK 50,249,490 thousand).
The Company has no assets or liabilities that were not disclosed in the balance sheet or off-balance sheet records.
8. Signiﬁcant subsequent events
No signiﬁcant events occurred after the date of the ﬁnancial statements, which would have a material impact on the Company’s ﬁnancial
statements.
93
Independent Auditor’s Report
to the Participation certiﬁcate holders of Investiční společnost České spořitelny, a. s.,
SPOROINVEST – otevřený podílový fond
We have audited the accompanying ﬁnancial statements of Investiční společnost České spořitelny, a. s., SPOROINVEST – otevřený podílový fond, which comprise the balance sheet as at 31 December 2013, and the income statement and statement of changes in equity for the
year then ended, and a summary of signiﬁcant accounting policies and other explanatory information. For details of Investiční společnost
České spořitelny, a. s., SPOROINVEST – otevřený podílový fond, see Note 1 to the ﬁnancial statements.
Management’s Responsibility for the Financial Statements
Management of Investiční společnost České spořitelny, a. s., is responsible for the preparation and fair presentation of these ﬁnancial statements in accordance with accounting principles generally accepted in the Czech Republic, and for such internal control as management determines is necessary to enable the preparation of ﬁnancial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these ﬁnancial statements based on our audit. We conducted our audit in accordance with the
Act on Auditors and International Standards on Auditing as amended by implementation guidance of the Chamber of Auditors of the Czech
Republic. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
whether the ﬁnancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the ﬁnancial statements. The procedures selected depend on the auditor’s judgment, including an assessment of the risks of material misstatement of the ﬁnancial statements,
whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation
and fair presentation of the ﬁnancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the ﬁnancial statements.
We believe that the audit evidence we have obtained is sufﬁcient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the ﬁnancial statements present fairly, in all material respects, the ﬁnancial position of Investiční společnost České
spořitelny, a. s., SPOROINVEST – otevřený podílový fond, as at 31 December 2013, and its ﬁnancial performance for the year then ended
in accordance with accounting principles generally accepted in the Czech Republic.
31 March 2014
Prague, Czech Republic
Ernst & Young Audit, s.r.o.
License No. 401
Represented by partner
Roman Hauptﬂeisch
Auditor, Licence no. 2009
A member ﬁrm of Ernst & Young Global Limited,
Ernst & Young Audit, s. r. o. with its registred ofﬁce at Na Florenci 2116/15, 110 00 Prague 1 – Nové Město,
has been incorporated in the Commercial Register administered by the Municipal Court in Prague,
Section C, entry No. 88504, under Identiﬁcation No. 26704153.
94
Investiční společnost České spořitelny, a. s., SPOROINVEST – otevřený podílový fond, 2013 Annual Report
Balance Sheet
at 31 December 2013
(in thousands CZK)
Line
Current
Previous
01
02
03
06
10
11
12
13
15
16
18
19
21
2,530,653
1,119,329
1,250,654
160,670
10,443,253
3,571,296
6,871,957
241,572
29,209
24,414
4,731
64
0
4,712,313
1,996,006
2,702,479
13,828
11,447,793
6,270,923
5,176,870
125,345
46,467
46,119
0
348
27
22
13,244,687
16,331,945
29
30
32
33
34
39
40
41
46
47
178,872
165,564
0
13,308
5,605
(1,493,070)
7,375,888
6,965,421
171,351
40,620
264,928
231,825
14,218
18,885
9,698
(78,381)
7,105,592
8,588,461
171,351
270,296
TOTAL LIABILITIES
48
13,244,687
16,331,945
of which: Equity
49
13 060 210
16 057 319
3 Receivables from banks and credit unions
of which: a/ on demand: aa/ current accounts
ab/ term deposits
ae/ collaterals
5 Debt securities
of which: a/ issued by the government
b/ issued by other entities
6 Shares, unit certiﬁcates and other participation interests
11 Other assets
a/ derivatives
c/ receivables from taxes
d/ other assets
13 Prepayments and accrued income
Total Assets
4 Other liabilities
a/ derivatives
c/ liabilities from taxes
d/ other liabilities
5 Deferred income and accrued expenses
9 Share premium
10 Reserve funds and other funds from proﬁt
12 Capital funds
14 Retained earnings or accumulated losses from previous periods
15 Proﬁt or loss for the accounting period
95
Investiční společnost České spořitelny, a. s., SPOROINVEST – otevřený podílový fond, 2013 Annual Report
Off Balance Sheet Accounts
at 31 December 2013
(in thousands CZK)
4 Amounts due from ﬁxed term transactions
a/ with interest instruments
b/ with currency instruments
d/ with credit instruments
7 Assets provided into custody, administration and safekeeping
of which: securities
12 Amounts owed from ﬁxed term transactions
a/ with interest instruments
b/ with currency instruments
d/ with credit instruments
Line
Current
Previous
52
53
54
56
60
61
64
65
66
68
16,338,022
6,433,047
9,782,800
122,175
10,684,825
10,684,825
16,479,172
6,504,890
9,849,755
124,527
15,676,229
7,534,350
8,017,013
124,866
11,573,138
11,573,138
15,861,935
7,737,069
8,002,691
122,175
96
Investiční společnost České spořitelny, a. s., SPOROINVEST – otevřený podílový fond, 2013 Annual Report
Proﬁt and Loss Account
for the year ended 31 December 2013
(in thousands CZK)
1 Interest income and similar income
of which: a/ interest income from bonds
d/ interest income from collaterals
2 Interest expenses and similar expenses
b/ interest from received margins
3 Income from shares and unit certiﬁcates
5 Commission and fee expenses
a/ fees and commissions from securities trading
b/ management fee
c/ custody fee
d/ other ﬁnancial expenses
6 Proﬁt or loss on ﬁnancial operations
a/ proﬁt or loss on transactions with securities
b/ proﬁt or loss on foreign exchange transactions
c/ proﬁt or loss on ﬁxed term transactions and options
7 Other operating income
8 Other operating expense
9 Administrative expenses
of which: b/ other administrative expenses: ba/ audit
19 Ordinary proﬁt or loss for the accounting period before tax
23 Income tax
24 Proﬁt or loss for the accounting period after tax
Line
Current
Previous
01
02
05
06
08
09
10
11
12
13
14
15
16
17
18
19
20
21
22
26
30
31
365,769
360,157
89
4
4
1,293
98,525
10
75,775
12,396
10,344
(224,972)
554,538
24,178
(803,688)
0
1
666
666
42,894
2,274
40,620
381,439
349,093
2
1,977
0
1,010
136,431
6
106,010
19,435
10,980
41,205
(33,900)
(3,245)
78,350
1
1
787
787
284,459
14,163
270,296
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Investiční společnost České spořitelny, a. s., SPOROINVEST – otevřený podílový fond, 2013 Annual Report
Statement of Changes in Equity
for the year ended 31 December 2013
(in thousands CZK)
Line
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16
17
18
19
20
Current
Previous
(78,381)
1,293,865
(2,708,554)
0
(1,493,070)
2,203,341
1,042,976
(3,324,698)
0
(78,381)
7,105,592
270,296
0
7,375,888
7,107,724
0
(2,132)
7,105,592
8,588,461
1,483,289
(3,106,329)
0
0
6,965,421
11,250,712
1,211,874
(3,874,125)
0
0
8,588,461
0
0
0
0
0
0
1 Share premium
opening balance
issued unit certiﬁcates
repurchase of unit certiﬁcates
other changes
closing balance
2 Retained earnings
opening balance
transfers to funds
other changes
closing balance
3 Capital funds
opening balance
issued unit certiﬁcates
repurchase of unit certiﬁcates
transfers to funds
other changes
closing balance
4 Gains or losses from revaluation
opening balance
foreign exchange rate differences and gains or losses from revaluation not
included in proﬁt (loss)
closing balance
5 Retained earnings or accumulated losses from previous periods
opening balance
other changes
closing balance
6 Proﬁt (loss) for the current period after taxes
opening balance
proﬁt (loss)
transfers to funds, dividends
closing balance
21
22
23
24
25
26
27
28
29
30
31
171,351
0
171,351
171,351
0
171,351
270,296
40,620
(270,296)
40,620
(2,133)
270,296
2,133
270,296
7 Total
32
13,060,210
16,057,319
98
Investiční společnost České spořitelny, a. s., SPOROINVEST – otevřený podílový fond, 2013 Annual Report
Notes to the Financial Statements
for the year ended 31 December 2013
1. Organisation and Description
of Business
With the Czech National Bank resolution becoming effective on
12 August 2009, the merging fund ceased to exist on 12 November
2009 (the merger date).
Formation and Description of the Business
Investiční společnost České spořitelny, a. s., SPOROINVEST –
otevřený podílový fond (hereinafter the “Fund” or “IS ČS, a. s. –
SPOROINVEST OPF”) is an accounting unit without legal entity status, formed by Investiční společnost České spořitelny, a. s.
(hereinafter the “Company”) as an open-ended mutual fund under
the Investment Companies and Funds Act No. 248/1992 Coll.,
based upon the Resolution of the Ministry of Finance of the Czech
Republic dated 17 May 1996. The Fund commenced its activities
on 1 July 1996.
On 23 July 2003, following the Company’s request, the Securities Commission resolved to merge the Fund with the open-ended
mutual fund Investiční společnost České spořitelny, a. s., Merkur –
otevřený podílový fond, under Section 35f (3) of Act No. 248/1992
Coll. Under Section 35f (10) of Act No. 248/1992 Coll., the merger
is effective three months after the date when the Commission resolution takes legal effect. With the Commission resolution becoming effective on 11 August 2003, the merger date was 12 November 2003.
Pursuant to a concluded contract, Česká spořitelna, a. s. acts as the
depository of the Fund.
The Fund is managed by the Company. In compliance with the
Collective Investment Act No. 189/2004 Coll. (hereinafter the
“Act”), the Company is responsible for the management of the assets of the Fund, which involves the administration and handling
of the assets.
The Fund is a standard fund in compliance with the Act and meets
the requirements of EU legislation.
According to the classiﬁcation binding for the members of the
Capital Market Association (hereinafter the “AKAT CR”) and Asset Management of the Czech Republic as at the date of the approval of this Statute, the Fund can be deﬁned as a money market
fund.
On 12 August 2009, following the Company’s request, the Czech
National Bank resolved to merge the Fund with the open-ended mutual fund Investiční společnost České spořitelny, a. s. –
OPATRNÝ MIX FF – otevřený podílový fond, under Section 101
(2) of the Act. The Fund is a continuing fund and the Statute of the
continuing Fund remains unchanged.
Registered Ofﬁce
Investiční společnost České spořitelny, a. s.
SPOROINVEST – otevřený podílový fond
Prague 6, Evropská 2690/17
Principal Business
The Company collects funds from individuals and legal entities for
the Fund by issuing participation certiﬁcates with the purpose of
their collective investment on local and foreign ﬁnancial markets.
No restrictions are placed on the number of participation certiﬁcates for issue and the period for which the Fund is established.
The Company reserves the right to temporary halt the issuing of
participation certiﬁcates for no longer than three months in compliance with the Act.
The participation certiﬁcates of the Fund are available both in the
Czech Republic and in other EU member countries.
Investment Policy of the Fund
The objective of the investment policy is to provide participation
certiﬁcates holders with a long-term appreciation of participation
certiﬁcates on condition that the overall risk proﬁle of the Fund
minimises the likelihood of losses within six months. The aim is
achieved by investing in a widely diversiﬁed portfolio of securities
with ﬁxed or variable interest income and active management of
interest rate risk. The average modiﬁed duration of the portfolio is
limited to the period of one year. The Fund invests also in securities denominated in foreign currencies.
The portfolio of the Fund predominantly includes bonds with
a variable coupon, denominated in CZK, that are mostly purchased
with the intent to hold them to their maturity. The Fund also invests in bonds with a ﬁxed coupon, treasury bills, bank deposits
and bonds with an embedded derivative.
Finances collected in the Fund can also be invested in securities
of collective investment funds if such collective investment funds
distribute the risk connected to investments and meet other obligations as set by the Act.
The Company can use ﬁnancial derivatives to effectively manage
the Fund’s assets. Efﬁcient asset management represents transactions for the purpose of decreasing risk, decreasing costs or achieving sufﬁcient income for the Fund provided that the risk is demonstrably low. The exposure from these transactions must be fully
covered by the Fund’s assets so that liabilities arising from these
99
Investiční společnost České spořitelny, a. s., SPOROINVEST – otevřený podílový fond, 2013 Annual Report
transactions are fulﬁlled. The Fund uses ﬁnancial derivatives to
hedge against currency and interest rate exposures.
The limits of the Fund are adhered to on the basis of the Act, or
they are regulated in the Fund’s Statute in compliance with the Act.
Change in the Fund’s Statute
The mutual fund statute was put into accordance with the amendment to Act 189/2004 Coll., on collective investment (as ensuing
from the changes made by Act 188/2011 Coll.), and Decree No.
193/2011 Coll., on the minimum requisites of the statute and on
the conditions for the use of the name Short-Term Money Market
Fund and Money Market Fund at the end of 2011. For this reason
no changes to the statute were made in 2012.
On 5 June 2012 only updated information was as to the list of
funds managed by the Company (Article II Paragraph 8 of the statute), information on the managing parties of the asset management
company (Appendix 1 to the statute), information added on the
performance of the mutual fund for 2011 (Appendix 2 to the statute), information updated on the total cost indicators for 2011, and
the date on which the statute being signed was updated.
On the date the statute was updated (5 June 2012) the key information for investors was also updated.
As at 1 February 2013, information on Fund`s 2012 performance
was published within the document Key investors information.
(According to the article 23, section 3 of Council Regulation (EC)
no. 583/2010, the performance must be updated within the Key investors information up to 35 days after the previous calendar year
end.)
The updated text of the Funds statute was approved by the Investment company`s board of directors as at 10 April 2013. The
changes in the statute text related to an update of the list of managed funds, update of the information on the length of professional
experience of Investment company management, addition of information on Fund’s performance and the Fund`s benchmark`s
performance, an update of information on total expense ratio for
2012 and update of the date of the signature. These updates were
not subject to preliminary approval from Czech national bank (according to the section 84 (a), subsection 5 of 189/2004 Coll., On
collective investment schemes). The shareholders could access the
updated text of the Statute and Key investors information as of
10 April 2013 on http://www.iscs.cz/, at the distributor’s branches
(Ceska sporitelna, a. s.) and at the Investment company seat.
Management Policy
The proﬁt/(loss) is based on the difference between income and
expenses related to the management of the Fund’s assets.
a loss from the Company’s management of assets, the loss is covered from the reinvestment fund which was created from earnings
brought forward. If the reinvestment fund is not sufﬁcient, the loss
must be covered by a reduction in the Fund’s capital fund.
The Fund’s assets must not be used for the provision of loans, borrowings or gifts, to secure a third party’s obligation or to settle
a payable which is not related to the Fund’s management. This
provision does not affect Sections 26 and 27 of the Collective Investment Act.
When managing the Fund’s assets, contracts for the sale of securities and money market instruments, securities issued by other collective investment funds and ﬁnancial derivatives which are not
owned by the Fund at the moment of concluding the respective
contracts, may not be entered into.
The Company can accept loans and borrowings for the maximum
of six months when managing the Fund’s assets, to cover temporary needs related to the management of the Fund’s assets or
purchases of participation certiﬁcates. The volume of the received
loans and borrowings must not exceed 10 percent of the value of
the Fund’s assets.
Legislative change
Act No 240/2013 Coll., On Management Companies and Investment Funds became effective as of 19 August 2013. Rules stated
by this act must be implemented by investment companies and investment funds by 22 July 2014. In 2013, the Fund`s management
was subject to the rules of the Act No. 189/2004 Coll., On collective investment schemes. The new rules will be applied as of 2014.
2. Basis of Preparation
The ﬁnancial statements have been prepared on the basis of underlying accounting records maintained in accordance with Accounting Act No. 563/1991 Coll., and applicable regulations, decrees and internal standards in compliance with and in the scope
deﬁned in Czech Finance Ministry Regulation No. 501/2002 of
6 November 2002, as subsequently amended, which sets out the
overall framework for the presentation of the ﬁnancial statements,
and guidelines for the structure and minimum requirements for the
content of the ﬁnancial statements of banks and certain ﬁnancial
institutions, and Czech Accounting Standards for Financial Institutions, which establish the accounting principles and policies.
The basis of preparation and the accounting policies have been
consistently applied during both 2013 and 2012.
The Fund is obliged to comply with the regulatory requirements
of the Act.
The generated proﬁt has been fully retained by the Fund, in the reinvestment fund, as a source for further investments, and increases
the participation certiﬁcate value. In the event that the Fund incurs
100
Investiční společnost České spořitelny, a. s., SPOROINVEST – otevřený podílový fond, 2013 Annual Report
The ﬁnancial statements are presented in compliance with general
accounting principles, speciﬁcally the accrual principle, the prudence concept and the going concern assumption.
The ﬁnancial statements contain the balance sheet, proﬁt and loss
account, statement of changes in equity, and notes to the ﬁnancial
statements.
arises, changes or ceases to exist, when assets move within an accounting entity, and the date when other matters to be included
in the accounting records occur, or when the documents supporting these other matters are available, or when other matters are
a consequence of internal conditions of the accounting entity and/
or special regulations.
Securities
The presentation of the ﬁnancial statements requires that the
Company makes estimates which have an impact on the reported
amounts of assets and liabilities as at the date of the ﬁnancial statements as well as expenses and income in the relevant accounting
period. These estimates are based on information available as at
the date of the ﬁnancial statements and may differ from the actual
results.
As a result of continued market volatility since the start of the
global ﬁnancial crisis, the Fund may be exposed to increased risk,
speciﬁcally due to the uncertainty regarding possible asset impairments and future developments on the market. The ﬁnancial
statements have been prepared based on the current best estimates
using all relevant and available information as at the date of the
ﬁnancial statements.
These ﬁnancial statements are unconsolidated.
All amounts are stated in thousands of Czech crowns (CZK), unless indicated otherwise.
Explanation Added for Translation into English
These ﬁnancial statements are presented on the basis of accounting
principles and standards generally accepted in the Czech Republic.
Certain accounting practices applied by the Company that conform with generally accepted accounting principles and standards
in the Czech Republic may not conform with generally accepted
accounting principles in other countries.
3. Accounting Policies
In accordance with the Fund’s strategy, all securities are classiﬁed
as ‘securities at fair value through proﬁt or loss. During the accounting period, securities are re-measured at fair value on a daily
basis pursuant to the Finance Ministry Regulation No. 194/2011
Coll., on more detailed regulation of certain rules in collective investment (the “Decree”), as amended.
The securities of the Fund are accounted for as securities at fair
value through proﬁt or loss. The fair value of the securities is determined in accordance with the International Financial Reporting
Standards with an exception, that an average price between the
most favourable binding offer and demand (MID price) is used
for bonds.
Pursuant to the Regulation, securities are valued at the price quoted
on a public market which is adjusted, as appropriate, to reﬂect the
rules set out in the Regulation. If the market value is unavailable,
the Fund uses a value determined by the Company using valuation models based on discounted future cash ﬂows according to
the yield curve calculated using the Reuters and Kondor+ systems.
Securities are measured at cost upon initial recognition using the
weighted average method. The acquisition cost includes direct
transaction costs related to the acquisition of securities.
Realised capital gains or losses are recorded in the proﬁt and loss
account within ‘Proﬁt or loss from ﬁnancial operations’.
Accrued interest relating to assets is included within the total balance of these assets.
Receivables and Payables
Transaction Recognition Date
Purchases and sales of securities are recognised using trade date
accounting provided that the period between the trade date and the
fulﬁlment of the commitment arising from the contract does not
exceed a period typical for the relevant type of transaction.
The transaction recognition date for derivative contracts is:
a) the date upon which the related contract was entered into;
b) the date when fulﬁlment was delivered based on the relevant
contract.
The transaction recognition date can also be the date when money
in circulation is paid or received, the date when foreign currency is
purchased or sold, the date when a payment is made, the date when
ownership is acquired or terminated, when a receivable or payable
The Fund records receivables arising from its transactions with
securities and other operating receivables at their nominal value,
while receivables from positive fair values of derivatives are recorded at the fair value of the derivatives at the balance sheet date.
Pursuant to the prudence principle, provisions are created based on
the aging of receivables.
The Fund records payables arising from its transactions with securities and operating payables at their nominal value, while payables from negative fair values of derivatives are recorded at the fair
value of the derivatives at the balance sheet date.
Financial Derivatives and Hedging Transactions
In the normal course of business, the Fund enters into hedging
contracts with ﬁnancial derivatives to hedge against interest rate
101
Investiční společnost České spořitelny, a. s., SPOROINVEST – otevřený podílový fond, 2013 Annual Report
and foreign currency exposures associated with its transactions on
ﬁnancial markets. The method of fair value hedges is applied to
hedging derivatives.
The Fund designates certain derivatives as hedges provided that
the following criteria are met:
– the Fund has developed a risk management strategy;
– at the inception of the hedge, the hedging relationship is formally documented, the documentation identiﬁes the hedged
item and the hedging instrument, and it deﬁnes the risk that
is being hedged and the approach to establishing whether the
hedge is effective; and
– the hedge is effective, that is, changes in the fair value or cash
ﬂows of the hedged item are almost fully offset by changes in
the fair value or cash ﬂows of the hedging instrument and the
results are within a range of 80 percent to 125 percent.
Foreign Currency Translations
Foreign currencies are translated using the exchange rate promulgated by the Czech National Bank as at the relevant date. As at the
balance sheet date, assets and liabilities denominated in foreign
currencies are translated on the same basis.
Foreign exchange rate gains and losses from the daily translation
of assets and liabilities in foreign currencies are posted to expense
or income accounts.
Capital Funds
The selling price of participation certiﬁcates is calculated as a proportion of the Fund’s net assets and the relevant number of participation certiﬁcates. Participation certiﬁcates are sold to investors
using the selling price determined on a daily basis.
Share Premium
Nominal values of derivative ﬁnancial instruments are recognised
in the off-balance sheet accounts. Changes in the fair value of derivatives that are designated and qualify as hedges (see above) are
recorded as income or expense. Changes in the fair value of the
hedging derivatives attributable to the risk hedged are recognised
in the same income or expense accounts as differences from revaluation of a hedged instrument.
All ﬁnancial derivatives are recorded as assets when the fair value
is positive and as liabilities when the fair value is negative. Fair
values are derived from valuation models.
Derivatives that are not designated as hedging derivatives are
treated as trading derivatives. These derivatives are measured at
fair value on a daily basis and gains and losses on revaluation are
posted to derivative expense and income accounts.
Certain derivatives are embedded in compound ﬁnancial instruments, which comprise the host instrument and the derivative. Pursuant to the applicable regulations, the Fund recognises changes in
assets and liabilities arising from the movements in rates or prices
of securities or changes in exchange rates through expense and income accounts. Given that the assets of the Fund are valued at fair
value and changes of fair values are reported within expenses and
income from derivatives, embedded derivatives are not accounted
for separately.
Income Tax
Under effective tax regulations, the income tax rate applicable to
mutual funds is 5 percent.
Deferred Tax
Deferred tax is provided using the liability method on all temporary differences between the carrying amount of assets and liabilities reported in the balance sheet and their value for tax purposes.
Deferred tax assets are recognised only up to the amount of probable future taxable income against which the deferred tax asset can
be offset.
Share premium is the difference between the nominal value of all
participation certiﬁcates and their carrying amounts as at the date
of their issue or purchase.
Interest Income and Expense and Dividend
Income
Interest income and expense are recognised using the accrual principle. Interest income and expense also include gains or losses
from hedging interest rate derivatives.
Dividend income is recognised as at the date when the right to
receive the payment is established (ex-dividend date). Dividend income from domestic securities is presented after withholding tax.
Dividend income from foreign securities is presented gross with
the applicable taxes presented within taxes on foreign dividends
(see note 5.18).
Subsequent Events
The impact of events that occurred between the balance sheet date
and the date of the ﬁnancial statements preparation is recognized in
the ﬁnancial statements provided these events provide additional
evidence about conditions that existed at the date of the balance
sheet.
If material events reﬂecting the facts occurring after the balance
sheet date happened between the balance sheet date and the date
of the ﬁnancial statements preparation the consequences of these
events are disclosed in the notes to the ﬁnancial statements but not
recognized in the ﬁnancial statements.
4. Risk Management
Credit Risk
In accordance with the Statute and the investment strategy, the
Company establishes rules and policies for selecting investment
instruments such that the overall credit risk proﬁle of allocated investments is consistent with the characteristics of the Fund. New
102
Investiční společnost České spořitelny, a. s., SPOROINVEST – otevřený podílový fond, 2013 Annual Report
types of instruments are approved on a case by case basis by the
risk management function together with the speciﬁcation of limits
for positions pertaining to these instruments. Speciﬁc emphasis is
placed on an appropriate rating structure and a relatively detailed
diversiﬁcation of portfolios (especially in relation to interest bearing securities).
Market Risk
The Fund uses a wide range of tools to eliminate risk exposures
attached to its portfolios. Signiﬁcant attention is paid to market
risks. Apart from statutory restrictions, the Fund is subject to a set
of internal limits having a direct impact on the FX exposure, interest rate exposure (the modiﬁed duration range of the Fund), equity
allocation on individual markets according to their volatility, portfolio rating structure (see above), and other characteristics of the
Fund. The relevant limits are appropriately applied to correspond
with the type of the Fund.
Whenever the Fund purchases new types of instruments, these instruments are ﬁrst analysed to assess the potential credit risk, as
well as the market risk that the instruments might bring to or help
eliminate from the portfolio. Subsequently, their appropriateness
and, if appropriate, the acceptable proportion of these instruments
in the portfolio is evaluated.
The level of the Fund’s market risk exposure is measured using
the Value at Risk (“VaR”). With effect from 1 August 2006, the
VaR for the Company’s Funds is calculated by the Central Risk
Management Department of Česká spořitelna using the historical
simulation method in the K + KvaR system.
Set out below are relative monthly values of the VaR in percentage
terms for individual types of risks:
Global VaR
Currency VaR
Interest rate VaR
Equity VaR
Global VaR
Currency VaR
Interest rate VaR
Equity VaR
31 Dec 2013
Average
VaR
0.22%
0.01%
0.22%
0.02%
0.14%
0.05%
0.13%
0.01%
31 Dec 2012
Average
VaR
0.07%
0.07%
0.02%
0.01%
0.06%
0.03%
0.05%
0.01%
The average VaR is calculated as an average of daily VaR values
in years 2013 and 2012 respectively.
The Fund monitors Value at Risk globally and also broken down to
Foreign Currency VaR, Interest Rate VaR and Equity VaR. Based
on the above values, the Fund identiﬁes critical risk segments. This
identiﬁcation inﬂuences the reinvestment process. The limits set
the maximum acceptable VaR for the Fund.
The Equity VaR also reﬂects the risk related to the holding of mutual funds’ participation certiﬁcates (including funds of money
market and bond funds).
Adherence to all the above limits and their effectiveness is monitored and assessed on an ongoing basis. The limits are reviewed,
if necessary.
The portfolio’s risk of unfavourable development of foreign exchange rates, interest rates, and other market factors is hedged, to
an appropriate extent, by ﬁnancial derivatives. Financial derivatives are traded on the OTC market as this market enables the trading of contracts whose parameters and nature appropriately satisfy
the requirements of a hedge. Portfolios primarily include currency
swaps, currency forwards and interest rate swaps.
Liquidity Risk
Another monitored risk is the liquidity risk. Liquidity risk is a risk
that the Fund will not have enough available resources to meet its
obligations arising from ﬁnancial contracts. Liquidity is monitored
and managed based on expected cash ﬂows, with appropriate adjustments made to the structure of securities and term placements
portfolios.
Pursuant to the Act, the Company is obliged to repurchase a participation certiﬁcate without undue delay but not later than 15 business days from the date when the repurchase right is claimed. Given that the Fund holds securities traded on foreign stock exchanges
which can be realised within a few days, the Fund’s inability to
meet its obligations due to lack of liquidity is unlikely.
Pursuant to Section 12 of the Collective Investment Act, the Company can suspend issues and purchases of the Fund’s participation
certiﬁcates for a maximum of three months, if necessary due to the
protection of rights or the participation certiﬁcate holders’ interests
protected by law. Issuing and purchasing participation certiﬁcates
can be suspended particularly at the end or beginning of the calendar year, in the event of natural disasters, upon very strong ﬂuctuations on ﬁnancial markets and upon high requirements for the
sales or purchases of participation certiﬁcates provided they could
endanger the Fund’s assets.
The quantitative information about the residual maturity of assets
and liabilities is given in Note 5.20.
103
Investiční společnost České spořitelny, a. s., SPOROINVEST – otevřený podílový fond, 2013 Annual Report
5. Additional Information on the Financial Statements
5.1 Receivables from Banks
Receivables from banks
31 Dec 2013 31 Dec 2012
Current accounts
Term deposits
Margin constitution
1,119,329
1,250,654
160,670
1,996,006
2,702,479
13,828
Total
2,530,653
4,712,313
Balances on current accounts are repayable on demand.
5.2 Securities
Individual types of securities by issuer, number of securities, their market value and interest rate are disclosed in the Portfolio attached to
the annual report. All securities held by the Fund are publicly listed on the Prague Stock Exchange or foreign stock exchanges. Participation
certiﬁcates which are not listed on stock exchanges are purchased and administered by the Company.
Shares, participation certiﬁcates and other holdings
31 Dec 2013 31 Dec 2012
Acquisition cost
Market revaluation
221,962
19,610
119,080
6,265
Total
241,572
125,345
Debt securities
Acquisition cost
Market revaluation
Accrued interest income
Total
31 Dec 2013 31 Dec 2012
9,828,963
420,985
193,305
11,266,926
(5,650)
186,517
10,443,253
11,447,793
Of the aggregate volume of debt securities, debt securities maturing within one year accounted for 18.63 percent in 2013 (2012: 44.09
percent).
Of the aggregate volume of debt securities, debt securities maturing within more than one year with a variable coupon accounted for 58.90
percent in 2013 (2012: 7.78 percent).
Debt securities maturing within more than one year with a ﬁxed coupon accounted for 22.47 percent in 2013 (2012: 48.13 percent).
5.3 Other Assets
Other assets
31 Dec 2013 31 Dec 2012
State budget settlement
Positive fair values of ﬁnancial derivatives
Other receivables
Other
4,731
24,414
64
–
–
46,119
309
39
Total
29,209
46,467
State budget settlement comprises a receivable arising from the annual settlement of prepayments for income tax against the actual tax liability.
The caption ‘Other’ represents mainly an estimated receivable for the return of a portion of the management fee for purchased participation
certiﬁcates of Erste’s fund.
5.4 Prepayments and Accrued Income
Prepayments and accrued income
31 Dec 2013 31 Dec 2012
Prepayments – audit fees
–
27
Total
–
27
104
Investiční společnost České spořitelny, a. s., SPOROINVEST – otevřený podílový fond, 2013 Annual Report
5.5 Equity
The Fund has no share capital. The nominal value of one participation certiﬁcate is CZK 1. The total nominal value of all participation
certiﬁcates is posted to ‘Capital funds’.
Share premium arising from the difference between the nominal and selling values of the participation certiﬁcates is recorded separately.
The Fund accounts for share premium upon the sale of participation certiﬁcates as well as upon their repurchase. The selling price of the
participation certiﬁcate is determined as the share of the Fund’s net assets and the number of issued participation certiﬁcates.
The value of a participation certiﬁcate as at the last trading date in 2013 totalled CZK 1.8749 (2012: CZK 1.8696). This is the most recent
announced value of the participation certiﬁcate for the year, for which purchases and repurchases of the participation certiﬁcates of the Fund
were undertaken.
In line with the Fund’s Statue, the proﬁt for 2013 of CZK 40,620 thousand will be transferred to the reinvestment fund within ‘Other funds
from proﬁt’.
In line with the Fund’s Statute, the proﬁt for 2012 of CZK 270,296 thousand was transferred to the reinvestment fund within ‘Other funds
from proﬁt’.
5.6 Changes in the Capital Fund
Number of
Nominal Contribution Total capital
upon
funds
participation
value of
merger
certiﬁcates participation
certiﬁcates
Balance at 31 Dec 2011
11,250,962,879
11,250,963
(251)
11,250,712
Participation certiﬁcates sold
Participation certiﬁcates purchased
1,211,874,174
(3,874,124,734)
1,211,874
(3,874,125)
–
–
1,211,874
(3,874,125)
Balance at 31 Dec 2012
8,588,712,319
8,588,712
(251)
8,588,461
Participation certiﬁcates sold
Participation certiﬁcates purchased
1,483,288,673
(3,106,329,023)
1,483,289
(3,106,329)
–
–
1,483,289
(3,106,329)
Balance at 31 Dec 2013
6,965,671,969
6,965,672
(251)
6,965,421
5.7 Other Liabilities
Other liabilities
31 Dec 2013 31 Dec 2012
Negative fair values of ﬁnancial derivatives
State budget settlement
Payables from participation certiﬁcate holders’ placements
Other liabilities
165,564
–
5,423
7,885
231,825
14,218
1,955
16,930
Total
178,872
264,928
5.8 Accrued Expenses and Deferred Income
Accrued expenses consist of the unbilled custody fee of CZK 653 thousand related to December (2012: CZK 1,472 thousand), the unbilled
management fee of CZK 4,898 thousand related to December (2012: CZK 8,029 thousand), and the unbilled fee for the local sub-register
administration of CZK 0 thousand (2012: CZK 129 thousand).
5.9 Financial Derivatives Designated as Hedging Derivatives
Nominal value of the derivatives
31 Dec 2013
31 Dec 2012
Assets
Liabilities
Assets
Currency swaps
3,805,071
3,874,522
3,980,777
Liabilities
3,945,510
Total
3,805,071
3,874,522
3,980,777
3,945,510
105
Investiční společnost České spořitelny, a. s., SPOROINVEST – otevřený podílový fond, 2013 Annual Report
Open positions of derivatives posted to an off-balance sheet are converted to fair value daily as of 1 January 2011 (up to 31 August 2013
futures were converted monthly; as of 1 September 2013 they are converted on daily basis) and recorded in absolute values.
Fair value of the derivatives
31 Dec 2013
31 Dec 2012
Positive
Negative
Positive
Currency swaps
3,746
73,196
35,267
Negative
–
Total
3,746
73,196
35,267
–
All currency derivatives are due within one year.
5.10 Financial Derivatives Designated as Trading Derivatives
Nominal value of the derivatives
31 Dec 2013
Currency swaps
Interest rate swaps
Credit swaps
Total
31 Dec 2012
Assets
Liabilities
Assets
Liabilities
5,977,729
6,433,047
122,175
5,975,233
6,504,890
124,527
4,036,236
7,534,350
124,866
4,057,181
7,737,069
122,175
12,532,951
12,604,650
11,695,452
11,916,425
Open positions of derivatives posted to an off-balance sheet are converted to fair value daily as of 1 January 2011 (up to 31 August 2013
futures were converted monthly; as of 1 September 2013 they are converted on daily basis) and recorded in absolute values.
Fair value of the derivatives
31 Dec 2013
31 Dec 2012
Positive
Negative
Positive
Negative
Currency swaps
Interest rate swaps
Credit swaps
17,946
2,722
–
15,451
74,565
2,352
8,161
–
2,691
29,106
202,719
–
Total
20,668
92,368
10,852
231,825
All currency derivatives are due within one year. All interest rate and credit derivatives are due within ﬁve years.
5.11 Residual Maturity of Interest Rate Derivatives
2013
Interest rate instruments at 31 Dec 2013
Nominal
value
Fair value
Assets
Liabilities
Positive
Negative
Payable within 1 year
Payable from 1 – 5 years
1,502,550
4,930,497
1,540,683
4,964,207
–
2,722
38,133
36,432
Total
6,433,047
6,504,890
2,722
74,565
2012
Interest rate instruments at 31 Dec 2012
Nominal
value
Fair value
Assets
Liabilities
Positive
Negative
Payable within 1 year
Payable from 1 – 5 years
3,518,650
4,015,700
3,616,852
4,120,217
−
−
98,202
104,517
Total
7,534,350
7,737,069
−
202,719
106
Investiční společnost České spořitelny, a. s., SPOROINVEST – otevřený podílový fond, 2013 Annual Report
5.12 Interest Income and Expense
Income
2013
2012
Interest on deposits
Interest on debt securities
Interest on deposited margins
Interest on hedging derivatives
5,523
360,157
89
–
28,110
349,093
–
4,236
Total
365,769
381,439
2013
2012
Interest on hedging derivatives
Interest on received margins
–
4
1,977
–
Total
4
1,977
2013
2012
Expense
5.13 Income from Shares and Interests
Income
Foreign dividends
1,293
1,010
Total
1,293
1,010
2013
2012
Management fees
Custody fees
Commissions and fees from securities trading
Amounts paid to the Securities Centre
Local sub–register
Administration of securities
Fees paid to the central depository
Fees for administration of short–term bonds
Fee for calculation of NAV
Other fees and commissions
75,775
12,396
10
–
1,192
7,418
19
57
700
958
106,010
19,435
6
–
1,522
6,963
37
249
866
1,343
Total
98,525
136,431
5.14 Fees and Commissions
In compliance with the Statute of the Fund, the management fee paid to the Company by the Fund amounts to 0.45 percent of the average
annual net asset value.
Pursuant to the custody service contract entered into with Česká spořitelna, a. s., the Fund pays a fee equal to 0.06 percent of its average
annual net asset value.
If participation certiﬁcates of another mutual fund managed by the Company are purchased and added to the Fund’s assets, the Fund’s aggregate net asset value reduced by the current value of investments in participation certiﬁcates of the other mutual fund managed by the
Company is used as the basis for the calculation of the ﬁxed part of the management fee.
5.15 Proﬁt or Loss from Financial Operations
2013
2012
Proﬁt or loss from securities at fair value through proﬁt or loss
Proﬁt or loss from FX differences
Proﬁt or loss from ﬁxed term transactions
554,538
24,178
(803,688)
(33,900)
(3,245)
78,350
Total
(224,972)
41,205
Proﬁt or loss from securities at fair value through proﬁt or loss primarily comprises the proﬁt or loss from the realised sales of securities,
from payable securities and from the daily valuation of securities at fair value.
107
Investiční společnost České spořitelny, a. s., SPOROINVEST – otevřený podílový fond, 2013 Annual Report
Proﬁt or loss from derivatives includes proﬁt or loss on the settlement of ﬁxed term transactions with currency instruments and also the
revaluation of open derivatives at fair value.
Proﬁt or loss from FX differences represents the value of realised FX proﬁt or loss from foreign currency accounts and from the settlement
of foreign currency receivables and payables and also gains or losses arising from the revaluation of assets, with the exception of securities,
and liabilities in foreign currency at fair value.
5.16 Administrative Expenses
2013
2012
Audit
666
787
Total
666
787
2013
2012
5.17 Other Operating Income and Expense
Income
–
1
Expense
1
1
2013
2012
5.18 Income Tax
The principal income tax components are as follows:
Tax payable
2,274
14,163
Total income tax
2,274
14,163
2013
2012
42,894
7
(1,293)
41,608
–
41,608
2,080
1,292
194
284,459
6
(1,010)
283,455
(3,215)
280,240
14,012
1,010
151
2,274
14,163
Current income tax – analysis:
Proﬁt (Loss) before tax
Items to add
Deductible items
Tax base
Tax loss utilisation
Tax base adjusted
Tax (5%) on tax base
Foreign dividends
Tax on foreign dividends
Total tax
Deferred tax
As at 31 December 2013, no temporary differences existed between the tax bases of assets and liabilities and their carrying amounts for
ﬁnancial reporting purposes.
As at 31 December 2012, no temporary differences existed between the tax bases of assets and liabilities and their carrying amounts for
ﬁnancial reporting purposes.
108
Investiční společnost České spořitelny, a. s., SPOROINVEST – otevřený podílový fond, 2013 Annual Report
5.19 Related Party Transactions
Related parties include Česká spořitelna, a. s. and Investiční společnost České spořitelny, a. s.
2013
2012
Unbilled custody fee
Unbilled management fee
Unbilled fee for administration of local sub-register
Unbilled fee for calculation of NAV
Other payables to related parties
653
4,898
–
53
857
1,472
8,029
129
66
1,004
Total payables to related parties
6,461
10,700
The costs charged to the Fund by Česká spořitelna, a. s. amounted to CZK 22,751 thousand in 2013 (2012: CZK 30,420 thousand), of which
the greatest portion was represented by the custody fee of CZK 12,396 thousand (2012: CZK 19,435 thousand). The costs charged by the
Company amounted to CZK 75,775 thousand (2012: CZK 106,010 thousand), which is the annual management fee.
5.20 Liquidity
The following tables show the residual maturity of assets and liabilities broken down by major classes of assets.
Given that all securities are traded on public markets, sales can easily be undertaken within three months.
2013
Assets
Less than
3 months
3 month –
1 year
1 – 5 years Over 5 years
Not
speciﬁed
Total
Receivables from banks
Debt securities
Participation certiﬁcates
Other assets
Prepayments
2,530,653
407,537
–
21,756
–
–
1,538,396
–
4,731
–
–
8,497,320
–
2,722
–
–
–
–
–
–
–
–
241,572
–
–
2,530,653
10,443,253
241,572
29,209
–
Total assets
2,959,946
1,543,127
8,500,042
–
241,572
13,244,687
Other liabilities
Net assets
Available capital
(107,472)
2,852,474
(13,060,210)
(88)
1,543,039
–
(76,917)
8,423,125
–
–
–
–
(184,477)
241,572
13,060,210
– (13,060,210)
Difference
(10,207,736)
1,543,039
8,423,125
–
241,572
–
Assets
Less than
3 months
3 month –
1 year
1 – 5 years Over 5 years
Not
speciﬁed
Total
Receivables from banks
Debt securities
Participation certiﬁcates
Other assets
Prepayments
4,698,485
1,363,217
−
43,776
−
−
3,684,336
−
−
27
−
6,400,240
−
2,691
−
−
−
−
−
−
13,828
−
125,345
−
−
4,712,313
11,447,793
125,345
46,467
27
Total assets
6,105,478
3,684,363
6,402,931
−
139,173
16,331,945
Other liabilities
Net assets
Available capital
(57,745)
6,047,733
(16,057,319)
(14,163)
3,670,200
−
(202,718)
6,200,213
−
−
−
−
−
(274,626)
139,173
16,057,319
− (16,057,319)
Difference
(10,009,586)
3,670,200
6,200,213
−
139,173
Liabilities
2012
Liabilities
−
109
Investiční společnost České spořitelny, a. s., SPOROINVEST – otevřený podílový fond, 2013 Annual Report
Liquidity risk, to which the Fund is exposed, is low as all assets are immediately convertible into cash before the expected purchases of
participation certiﬁcates from participation certiﬁcate holders can be undertaken.
5.21 Off-balance Sheet Assets and Liabilities
The Fund’s off-balance sheet accounts include receivables and payables from ﬁxed term transactions and assets provided into custody and
safekeeping. The item ‘Assets provided into custody, administration and safekeeping’ shows foreign and domestic securities administered
by Česká spořitelna, a. s. (this item does not include participation certiﬁcates of open-ended mutual funds of the Company, which the Fund
maintains in its portfolio).
5.22 Contingent Assets and Liabilities
The Fund has no assets or liabilities that were not disclosed in the balance sheet or off-balance sheet accounts.
5.23 Subsequent Events
No signiﬁcant events occurred after the date of the ﬁnancial statements, which would have a material impact on the Fund’s ﬁnancial statements.
110
Investiční společnost České spořitelny, a. s., SPOROINVEST – otevřený podílový fond, 2013 Annual Report
Portfolio at 31 December 2013
The detail of the portfolio is not part of the fund’s ﬁnal accounts. Figures are stated in CZK.
ISIN
Name of the security
XS0742380412 SBERBANK 4.95 02/07/17
XS0849677348 STANDARD CHARTER. 1.75 10/29/17
XS0339454851 RABOBANK 4.75 01/15/18
XS0242491230 POLAND GOV.BOND 3.625 02/01/16
AT000B119839
ERSTE BANK VAR 09/20/16
AT000B007091 ERSTE BANK VAR 05/18/15
XS0616431689 ERSTE BANK 4.25 04/12/16
XS0594515966 MORGAN STANLEY 4.5 02/23/16
XS0461758830 MORGAN STANLEY 4.5 10/29/14
XS0625359384 GOLDMAN SACHS GROUP 4.5 05/09/16
XS0184927761 GOLDMAN SACHS 4.75 01/28/14
XS0433130456 BANK OF AMERICA 7 06/15/16
XS0353643744 HSBC HOLDINGS PLC 6.25 03/19/18
XS0605521185
HSBC HOLDINGS PLC 3.875 03/16/16
XS0246862485 JPM CHASE AND CO VAR 03/31/18
XS0335880463 JPM CHASE AND CO 5.25 01/14/15
XS0542607683 SOCIETE GENERALE 3.125 09/21/17
XS0629960302 ING BANK NV
XS0860033769 ING BANK NV VAR 11/30/14
XS0342289575 BARCLAYS BANK 6 01/23/18
USM0300LAA46 AKBANK 5.125 07/22/15
XS0343877451 CREDIT AGRICOLE 5.971 02/01/18
XS0877209188 BNP PARIBAS VAR 18
XS0997797054 ROYAL BK SCOTLAND 1.5 11/28/16
XS0708813653 GAZPROM GAZ CAP. 4.95 05/23/16
XS0782708456 VOLKSWAGEN 1.875 05/15/2017
XS0408223138 VOLKSWAGEN 6.875 01/15/2014
XS0294547285 COMPAG. DE ST GOB 4.75 04/11/17
DE000A0T5X07 DEUTSCHE TELECOM FI 6 01/20/17
XS0829209195 IBERDROLA INTL BV 4.5 09/21/17
XS0148579153 E.ON INTL FIN 6.375 05/29/17
XS0491998133 VTB CAPITAL SA 6.465 03/04/15
XS0493543986 AUST- NZ BK GRP 3.75 03/10/17
XS0630375912 KBC IFIMA 4.375 10/26/15
XS0219645222 KBC IFIMA 3.87 05/18/16
XS0585904443 TELEFONICA EMIS 4.75 02/07/17
XS0491042353 GE CAP EURO FUND 4.25 03/01/17
XS0806482948 TURKYIE HALK 4.875 07/19/17
XS0342783692 ELEC DE FRANCE 5 02/05/18
XS0307791698 BAT INTL FIN 5.375 06/29/17
XS0435070288 LLOYDS TSB BANK 6.375 06/17/16
XS0480903466 CREDIT SUISSE 3.875 01/25/17
XS0545031642 PKO FINANCE AB 3.733 10/21/15
XS0478931354 BMW FINANCE NV 3.875 01/18/17
XS0893205186 VNESHECONOMBANK 3.035 02/21/18
FR0011564541
BPCE VAR 03/10/15
US172967FW62 CITIGROUP INC 4.45 01/10/17
XS0499245180 RUSSIAN RAILWAYS 5.739 04/03/17
XS0495973470 GLENCORE FIN. EURO 5.25 03/22/17
Foreign corporate bonds
Amount Market Price
5,700
2,800
5,100
17,500
100
2,000
78
4,700
60
1,700
5,000
96
46
9,000
64
80
114
3,400
1,620
2,000
4,400
45
30
4,200
3,700
5,800
2,000
4,700
4,200
19
6,000
5,700
5,000
3,000
11,000
30
8,700
3,000
60
4,000
3,800
4,700
3,000
5,700
4,800
60
4,800
5,500
94
21,131.61
27,613.41
30,945.00
29,187.06
1,000,000.00
100,000.00
2,938,204.80
29,301.14
1,413,895.88
29,445.40
27,496.85
1,562,059.44
1,594,311.24
29,201.32
1,354,664.73
1,435,616.48
1,461,258.85
29,229.57
50,035.00
30,954.32
20,462.37
1,571,905.01
1,001,000.00
27,560.75
21,199.44
28,098.56
27,468.88
30,450.80
31,321.54
3,021,809.91
32,112.21
20,975.04
29,615.16
29,116.85
10,226.65
2,998,622.08
29,912.17
19,679.94
1,569,704.16
31,288.63
30,926.90
29,680.29
28,627.86
29,756.95
27,494.11
2,740,854.50
21,567.09
21,564.30
1,521,470.44
Market Price
Total
Accrued
Interest
120,450,152.72
77,317,547.30
157,819,493.63
510,773,484.38
100,000,000.00
200,000,000.00
229,179,974.40
137,715,377.98
84,833,752.50
50,057,179.58
137,484,267.50
149,957,706.00
73,338,316.93
262,811,855.25
86,698,542.80
114,849,318.00
166,583,508.90
99,380,521.00
81,056,700.00
61,908,646.50
90,034,434.95
70,735,725.56
30,030,000.00
115,755,165.75
78,437,943.84
162,971,636.40
54,937,760.00
143,118,761.18
131,550,484.80
57,414,388.34
192,673,240.50
119,557,727.77
148,075,802.50
87,350,544.75
112,493,150.00
89,958,662.25
260,235,907.28
59,039,821.68
94,182,249.38
125,154,536.00
117,522,213.35
139,497,385.91
85,883,581.50
169,614,602.18
131,971,732.80
164,451,270.00
103,522,009.92
118,603,651.32
143,018,221.13
2,229,644.92
231,947.88
6,370,677.23
15,872,453.55
218,166.67
372,666.67
6,550,780.58
4,942,247.98
639,040.07
1,356,523.15
6,013,776.54
5,023,959.45
3,099,870.29
7,545,303.13
0.00
5,538,347.26
1,351,761.34
2,187,744.85
49,680.00
3,083,621.92
1,968,898.13
3,361,457.27
60,858.33
156,209.79
374,479.68
1,879,363.87
3,615,967.47
4,428,423.70
6,532,409.59
635,997.02
6,207,817.81
2,362,223.51
4,170,102.74
650,874.14
2,635,841.10
3,501,195.72
8,473,479.71
1,301,191.94
3,708,010.27
4,991,725.68
3,585,781.18
4,652,670.03
597,435.97
5,758,771.00
3,426,084.28
52,601.15
2,018,445.24
1,517,531.73
5,265,374.59
6,300,008,956.41 160,569,436.12
111
Investiční společnost České spořitelny, a. s., SPOROINVEST – otevřený podílový fond, 2013 Annual Report
ISIN
Name of the security
SK4120008301
SK4120008202
SK4120008400
SK4120006503
SLOVAKIA GOVT 4.625 01/19/17
SLOVAKIA GOVERNMENT VAR 11/16/16
SLOVAKIA GOVT VAR 09/02/15
SLOVAKIA GOVT VAR 01/21/15
Amount Market Price
10,000,000
13,000,000
16,900
10,000,000
30.42
27.18
10,280.00
27.36
Foreign government bonds
XS0840265739
CEZ VAR 06/30/14
15,000
Local corporate bonds after 1 January 1998
XS0499380128
XS0458720330
XS0583192108
XS0940439994
XS0997635585
XS0194957527
XS0427020309
CZ0001002737
CZ0001002869
CESKA EXP. BANKA VAR 04/15/15
CESKA EXP. BANKA 4.015 10/22/14
CESKA EXP. BANKA VAR 01/24/16
CESKA EXP. BANKA VAR 06/06/16
CESKA EXP. BANKA VAR 11/28/17
GOVERNMENT B. 4.625 06/23/14 EUR
GOVERNMENT BOND 4.5 11/05/14 CZE
GOVERNMENT BOND 3.4 09/01/15
GOVERNMENT BOND 2.75 03/31/14
200
570
15,000
4,500
10,000
8,000
21,500
30,500
20,000
1,373,821.09
203,204.28
19,496.12
27,298.85
27,080.27
27,991.33
28,392.55
10,542.50
10,068.00
71,660
3,371.08
Local government bonds after 1 January 1998
AT0000676846
ESPA CASH CORPORATE-PLUS-T
Foreign participation certiﬁcates
Total
Market Price
Total
Accrued
Interest
304,239,237.50
353,287,753.00
173,732,000.00
273,621,967.50
12,023,796.23
142,610.00
1,171,733.33
408,533.47
1,104,880,958.00
13,746,673.03
411,101,435.63
277,403.88
411,101,435.63
277,403.88
274,764,218.75
115,826,438.97
292,441,800.00
122,844,802.50
270,802,677.50
223,930,610.00
610,439,911.00
321,546,250.00
201,360,000.00
568,992.57
859,981.15
134,349.16
58,620.94
155,865.42
5,309,930.82
4,070,921.92
3,427,861.11
4,125,000.00
2,433,956,708.72
18,711,523.09
241,571,664.46
0.00
241,571,664.46
0.00
10,491,519,723.22 193,305,036.12
112
Independent Auditor’s Report
to the Participation certiﬁcate holders of Investiční společnost České spořitelny, a. s.,
SPOROBOND – otevřený podílový fond
We have audited the accompanying ﬁnancial statements of Investiční společnost České spořitelny, a. s., SPOROBOND – otevřený podílový
fond, which comprise the balance sheet as at 31 December 2013, and the income statement and statement of changes in equity for the year
then ended, and a summary of signiﬁcant accounting policies and other explanatory information. For details of Investiční společnost České
spořitelny, a. s., SPOROBOND – otevřený podílový fond, see Note 1 to the ﬁnancial statements.
Management’s Responsibility for the Financial Statements
Management of Investiční společnost České spořitelny, a. s., is responsible for the preparation and fair presentation of these ﬁnancial statements in accordance with accounting principles generally accepted in the Czech Republic, and for such internal control as management determines is necessary to enable the preparation of ﬁnancial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these ﬁnancial statements based on our audit. We conducted our audit in accordance with the
Act on Auditors and International Standards on Auditing as amended by implementation guidance of the Chamber of Auditors of the Czech
Republic. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
whether the ﬁnancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the ﬁnancial statements. The procedures selected depend on the auditor’s judgment, including an assessment of the risks of material misstatement of the ﬁnancial statements,
whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation
and fair presentation of the ﬁnancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the ﬁnancial statements.
We believe that the audit evidence we have obtained is sufﬁcient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the ﬁnancial statements present fairly, in all material respects, the ﬁnancial position of Investiční společnost České
spořitelny, a. s., SPOROBOND – otevřený podílový fond, as at 31 December 2013, and its ﬁnancial performance for the year then ended in
accordance with accounting principles generally accepted in the Czech Republic.
31 March 2014
Prague, Czech Republic
Ernst & Young Audit, s.r.o.
License No. 401
Represented by partner
Roman Hauptﬂeisch
Auditor, Licence no. 2009
A member ﬁrm of Ernst & Young Global Limited,
Ernst & Young Audit, s. r. o. with its registred ofﬁce at Na Florenci 2116/15, 110 00 Prague 1 – Nové Město,
has been incorporated in the Commercial Register administered by the Municipal Court in Prague,
Section C, entry No. 88504, under Identiﬁcation No. 26704153.
113
Investiční společnost České spořitelny, a. s., SPOROBOND – otevřený podílový fond, 2013 Annual Report
Balance Sheet
at 31 December 2013
(in thousands CZK)
Line
Current
Previous
01
02
03
05
06
10
11
12
13
15
16
18
19
21
1,133,534
932,126
0
0
201,408
9,369,432
6,864,598
2,504,834
2,111,512
46,531
16,380
26,974
3,177
0
1,211,373
996,675
200,115
1
14,582
8,202,067
6,999,422
1,202,645
1,960,377
40,977
17,449
0
23,528
18
22
12,661,009
11,414,812
29
30
32
33
34
39
40
41
46
47
190,960
175,846
0
15,114
10,330
2,759,760
3,580,697
5,780,647
283,554
55,061
108,160
51,445
45,075
11,640
9,513
2,181,553
2,628,164
5,251,335
283,554
952,533
Total Liabilities
48
12,661,009
11,414,812
of which: Equity
49
12,459,719
11,297,139
3 Receivables from banks and credit unions
of which: a/ on demand: aa/ current accounts
ab/ term deposits
ad/ margin accounts
ae/ collaterals
5 Debt securities
of which: a/ issued by the government
b/ issued by other entities
6 Shares, unit certiﬁcates and other participation interests
11 Other assets
a/ derivatives
c/ receivables from taxes
d/ other assets
13 Prepayments and accrued income
Total Assets
4 Other liabilities
a/ derivatives
c/ liabilities from taxes
d/ other liabilities
5 Deferred income and accrued expenses
9 Share premium
10 Reserve funds and other funds from proﬁt
12 Capital funds
14 Retained earnings or accumulated losses from previous periods
15 Proﬁt or loss for the accounting period
114
Investiční společnost České spořitelny, a. s., SPOROBOND – otevřený podílový fond, 2013 Annual Report
Off Balance Sheet Accounts
at 31 December 2013
(in thousands CZK)
4 Amounts due from ﬁxed term transactions
a/ with interest instruments
b/ with currency instruments
d/ with credit instruments
7 Assets provided into custody, administration and safekeeping
of which: securities
12 Amounts owed from ﬁxed term transactions
a/ with interest instruments
b/ with currency instruments
d/ with credit instruments
Line
Current
Previous
52
53
54
56
60
61
64
65
66
68
5,716,192
296,633
5,395,124
24,435
11,198,805
11,198,805
5,875,658
298,650
5,552,103
24,905
4,041,485
237,133
3,779,379
24,973
10,033,219
10,033,219
4,075,481
262,285
3,788,761
24,435
115
Investiční společnost České spořitelny, a. s., SPOROBOND – otevřený podílový fond, 2013 Annual Report
Proﬁt and Loss Account
for the year ended 31 December 2013
(in thousands CZK)
1 Interest income and similar income
of which: a/ interest income from bonds
d/ interest income from collaterals
2 Interest expenses and similar expenses
3 Income from shares and unit certiﬁcates
5 Commission and fee expenses
a/ fees and commissions from securities trading
b/ management fee
c/ custody fee
d/ other ﬁnancial expenses
6 Proﬁt or loss on ﬁnancial operations
a/ proﬁt or loss on transactions with securities
b/ proﬁt or loss on foreign exchange transactions
c/ proﬁt or loss on ﬁxed term transactions and options
9 Administrative expenses
of which: b/ other administrative expenses: ba/ audit
19 Ordinary proﬁt or loss for the accounting period before tax
23 Income tax
24 Proﬁt or loss for the accounting period after tax
Line
Current
Previous
1
2
5
6
9
10
11
12
13
14
15
16
17
18
21
22
26
30
31
302,518
300,990
61
(9 998)
2,401
136,498
13
108,056
13,477
14,952
(119 652)
249,679
18,462
(387 793)
554
554
58,213
3,152
55,061
285,595
279,870
2
23,627
0
109,381
36
86,059
10,607
12,679
850,382
801,595
(4 407)
53,194
303
303
1,002,666
50,133
952,533
116
Investiční společnost České spořitelny, a. s., SPOROBOND – otevřený podílový fond, 2013 Annual Report
Statement of Changes in Equity
for the year ended 31 December 2013
(in thousands CZK)
Line
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Current
Previous
2,181,553
2,078,780
(1,500,573)
0
2,759,760
969,081
2,023,447
(810,975)
0
2,181,553
2,628,164
952,533
0
3,580,697
2,431,350
196,814
0
2,628,164
5,251,335
1,897,304
(1,367,992)
0
0
5,780,647
4,051,413
2,014,387
(814,465)
0
0
5,251,335
0
0
0
0
0
0
1 Share premium
opening balance
issued unit certiﬁcates
repurchase of unit certiﬁcates
other changes
closing balance
2 Retained earnings
opening balance
transfers to funds
other changes
closing balance
3 Capital funds
opening balance
issued unit certiﬁcates
repurchase of unit certiﬁcates
transfers to funds
other changes
closing balance
4 Gains or losses from revaluation
opening balance
foreign exchange rate differences and gains or losses from revaluation not
included in proﬁt (loss)
closing balance
5 Retained earnings or accumulated losses from previous periods
opening balance
other changes
closing balance
6 Proﬁt (loss) for the current period after taxes
opening balance
proﬁt (loss)
transfers to funds, dividends
closing balance
21
22
23
24
25
26
27
28
29
30
31
283,554
0
283,554
283,554
0
283,554
952,533
55,061
(952,533)
55,061
196,813
952,533
(196,813)
952,533
7 Total
32
12,459,719
11,297,139
117
Investiční společnost České spořitelny, a. s., SPOROBOND – otevřený podílový fond, 2013 Annual Report
Notes to the Financial Statements
for the year ended 31 December 2013
1. Organisation and Description of
Business
Formation and Description of the Business
Investiční společnost České spořitelny, a. s., SPOROBOND –
otevřený podílový fond (hereinafter the “Fund” or “IS ČS, a. s.
– SPOROBOND OPF”) is an accounting unit without legal entity status, formed by Investiční společnost České spořitelny, a. s.
(hereinafter the “Company”) as an open-ended mutual fund under the Investment Companies and Funds Act No. 248/1992 Coll.,
based upon the Resolution of the Ministry of Finance of the Czech
Republic dated 13 November 1997. The Fund commenced its activities on 31 March 1998.
Pursuant to a concluded contract, Česká spořitelna, a. s. acts as the
depository of the Fund.
Based on the Company’s request dated 16 July 1999, the Securities
Commission resolved, on 21 September 1999, to merge two openended mutual funds, namely Investiční společnost ČS, a. s. – Rentinvest and Investiční společnost ČS, a. s. – SPOROBOND, under
Section 35f (3) of Act No. 248/1992 Coll. The Statute of Investiční
společnost ČS, a. s. – SPOROBOND remains unchanged and follows the wording approved by the Securities Commission. The
merger was performed as at 28 December 1999.
The Fund is managed by the Company. In compliance with the
Collective Investment Act No. 189/2004 Coll. (hereinafter the
“Act”), the Company is responsible for the management of the assets of the Fund, which involves the administration and handling
of the assets.
No restrictions are placed on the number of participation certiﬁcates for issue and the period for which the Fund is established.
The Company reserves the right to temporary halt the issuing of
participation certiﬁcates for no longer than three months in compliance with the Act.
The participation certiﬁcates of the Fund are available both in the
Czech Republic and in other EU member countries.
Investment Policy of the Fund
The objective of the investment policy is to provide participation
certiﬁcate holders with a long-term appreciation of participation
certiﬁcates on condition that the overall risk proﬁle of the Fund
minimises the likelihood of losses within two years. The aim is
achieved by investing in a widely diversiﬁed portfolio of securities
with ﬁxed or variable interest income and active management of
interest rate risk, as well as investing in securities denominated in
foreign currencies.
The portfolio of the Fund predominantly includes state bonds with
ﬁxed coupons denominated in CZK, or state bonds of other countries with developed bond markets. The foreign currency risk is
usually hedged. The Fund also invests in corporate bonds, treasury
bills, bank deposits or bonds with embedded derivatives.
The portfolio of the Fund may also be expanded by purchasing
bonds exchangeable for shares or with the option to subscribe for
shares.
The Fund uses ﬁnancial derivatives to hedge against currency and
interest rate exposures.
The Fund is a standard fund in compliance with the Act and meets
the requirements of EU legislation.
The limits of the Fund are adhered to on the basis of the Act, or
they are regulated in the Fund’s Statute in compliance with the Act.
According to the classiﬁcation binding for the members of the
Capital Market Association (hereinafter the “AKAT CR”) as at the
date of the approval of this Statute, the Fund can be deﬁned as
a bond fund.
The Company can use ﬁnancial derivatives to effectively manage
the Fund’s assets. Efﬁcient asset management represents transactions for the purpose of decreasing risk, decreasing costs or achieving sufﬁcient income for the Fund provided that the risk is demonstrably low. The exposure from these transactions must be fully
covered by the Fund’s assets so that liabilities arising from these
transactions are fulﬁlled.
Registered Ofﬁce
Investiční společnost České spořitelny, a. s.
SPOROBOND – otevřený podílový fond
Prague 6, Evropská 2690/17
Management Policy
Principal Business
The proﬁt/(loss) is based on the difference between income and
expenses related to the management of the Fund’s assets.
The Company collects funds from individuals and legal entities for
the Fund by issuing participation certiﬁcates with the purpose of
their collective investment on local and foreign ﬁnancial markets.
The generated proﬁt has been fully retained by the Fund, in the reinvestment fund, as a source for further investments, and increases
118
Investiční společnost České spořitelny, a. s., SPOROBOND – otevřený podílový fond, 2013 Annual Report
the participation certiﬁcate value. In the event that the Fund incurs
a loss from the Company’s management of assets, the loss is covered from the reinvestment fund which was created from earnings
brought forward. If the reinvestment fund is not sufﬁcient, the loss
must be covered by a reduction in the Fund’s capital fund.
The Fund’s assets must not be used for the provision of loans, borrowings or gifts, to secure a third party’s obligation or to settle
a payable which is not related to the Fund’s management. This
provision does not affect Sections 26 and 27 of the Collective Investment Act.
When managing the Fund’s assets, contracts for the sale of securities and money market instruments, securities issued by other collective investment funds and ﬁnancial derivatives which are not
owned by the Fund at the moment of concluding the respective
contracts, may not be entered into.
The Company can accept loans and borrowings for the maximum
of six months when managing the Fund’s assets, to cover temporary needs related to the management of the Fund’s assets or
purchases of participation certiﬁcates. The volume of the received
loans and borrowings is not allowed to exceed 10 percent of the
value of the Fund’s assets.
Change in the Statute
Czech National Bank Resolution No. 2012/4694/570, dated 18
May 2012, which came into force on 5 June 2012: The changes to
the Funds statute related mainly to the duty of the asset investment
company to ensure that its statute is in accordance with the amendment to Act 189/2004 Coll., on collective investments (as ensuing
from the changes made by Act 188/2011 Coll.) and Decree No.
193/2011 Coll., on the minimum requisites of the statute and on
the conditions for the use of the name Short-Term Money Market
Fund and Money Market Fund. Investment objectives, the method
of investing and the risk proﬁle of the Fund have not been changed
in the amendments referred to above.
Along with the change made to the statute, information was updated as to the list of funds managed by the Company (Article II
Paragraph 8 of the statute), in particular information on the managing parties of the asset management company (Appendix 1 to
the statute), information added on the performance of the Fund for
2011 (Appendix 2 to the statute), information updated on the total
cost indicators for 2011, and the date on which the statute being
signed was updated.
On the date the changes to the statute came into force the simple
statute of the Fund was replaced by a newly processed document
providing required key information for investors. Such key information for investors was processed in accordance with Commission (EU) Regulation No. 583/2012.
As at 1 February 2013, information on Fund`s 2012 performance
was published within the document Key investors information.
(According to the article 23, section 3 of Council Regulation (EC)
no. 583/2010, the performance must be updated within the Key investors information up to 35 days after the previous calendar year
end.)
The updated text of the Funds statute was approved by the Investment company`s board of directors as at 10 April 2013. The
changes in the statute text related to an update of the list of managed funds, update of the information on the length of professional
experience of Investment company management, addition of information on Fund’s performance and the Fund`s benchmark`s
performance, an update of information on total expense ratio for
2012 and update of the date of the signature. These updates were
not subject to preliminary approval from Czech national bank (according to the section 84 (a), subsection 5 of 189/2004 Coll. Act
on collective investment.
The shareholders could access the updated text of the Statute and
Key investors information as of 10 April 2013 on http://www.iscs.
cz/, at the distributor’s branches (Ceska sporitelna, a. s.) and at the
Investment company seat.
Legislative change
Act No 240/2013 Coll., Act on Management Companies and Investment Funds became effective as of 19 August 2013. Rules
stated by this act must be implemented by management companies
and investment funds by 22 July 2014. In 2013, the Fund`s management was subject to the rules of the Act No. 189/2004 Coll.,
On collective investment schemes. The new rules will be applied
as of 2014.
2. Basis of Preparation
The ﬁnancial statements have been prepared on the basis of underlying accounting records maintained in accordance with Accounting Act No. 563/1991 Coll., and applicable regulations, decrees and internal standards in compliance with and in the scope
deﬁned in Czech Finance Ministry Regulation No. 501/2002 of
6 November 2002, as subsequently amended, which sets out the
overall framework for the presentation of the ﬁnancial statements,
and guidelines for the structure and minimum requirements for the
content of the ﬁnancial statements of banks and certain ﬁnancial
institutions, and Czech Accounting Standards for Financial Institutions, which establish the accounting principles and policies.
The basis of preparation and accounting policies has been consistently applied during both 2013 and 2012.
The Fund is obliged to comply with the regulatory requirements
of the Act.
The ﬁnancial statements are based on the accrual principle, that is,
transactions and other events are recognised in the accounting period in which they occur, regardless of when the related monetary
ﬂow arises. The ﬁnancial statements are presented in compliance
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Investiční společnost České spořitelny, a. s., SPOROBOND – otevřený podílový fond, 2013 Annual Report
with general accounting principles, speciﬁcally the accrual principle, the prudence concept and the going concern assumption.
The ﬁnancial statements contain the balance sheet, proﬁt and loss
account, statement of changes in equity and notes to the ﬁnancial
statements.
counting entity, and the date when other matters to be included
in the accounting records occur, or when the documents supporting these other matters are available, or when other matters are
a consequence of internal conditions of the accounting entity and/
or special regulations.
Securities
The presentation of the ﬁnancial statements requires that the
Company makes estimates which have an impact on the reported
amounts of assets and liabilities as at the date of the ﬁnancial statements as well as expenses and income in the relevant accounting
period. These estimates are based on information available as at
the date of the ﬁnancial statements and may differ from the actual
results.
As a result of continued market volatility since the start of the
global ﬁnancial crisis, the Fund may be exposed to increased risk,
speciﬁcally due to the uncertainty regarding possible asset impairments and future developments on the market. The ﬁnancial
statements have been prepared based on the current best estimates
using all relevant and available information as at the date of the
ﬁnancial statements.
These ﬁnancial statements are unconsolidated.
All amounts are stated in thousands of Czech crowns (CZK), unless indicated otherwise.
Explanation Added for Translation into English
These ﬁnancial statements are presented on the basis of accounting
principles and standards generally accepted in the Czech Republic.
Certain accounting practices applied by the Company that conform with generally accepted accounting principles and standards
in the Czech Republic may not conform with generally accepted
accounting principles in other countries.
3. Accounting Policies
In accordance with the Fund’s strategy, all securities are classiﬁed
as securities at fair value through proﬁt or loss. During the accounting period, securities are re-measured at fair value on a daily
basis pursuant to the Finance Ministry Regulation No. 194/2011
Coll., on more detailed regulation of certain rules in collective investment (the “Decree”), as amended.
The securities of the Fund are accounted for as securities at fair
value through proﬁt or loss. The fair value of the securities is determined in accordance with the International Financial Reporting
Standards with an exception, that an average price between the
most favourable binding offer and demand (MID price) is used
for bonds.
Pursuant to the Regulation, securities are valued at the price quoted
on a public market which is adjusted, as appropriate, to reﬂect the
rules set out in the Regulation. If the market value is unavailable,
the Fund uses a value determined by the Company using valuation models based on discounted future cash ﬂows according to
the yield curve calculated using the Reuters and Kondor+ systems.
Securities are measured at cost upon initial recognition using the
weighted average method. The acquisition cost includes direct
transaction costs related to the acquisition of securities.
Realised capital gains or losses are recorded in the proﬁt and loss
account within ‘Proﬁt or loss from ﬁnancial operations’.
Accrued interest relating to assets is included within the total balance of these assets.
Receivables and Payables
Transaction Recognition Date
Purchases and sales of securities are recognised using trade date
accounting provided that the period between the trade date and the
fulﬁlment of the commitment arising from the contract does not
exceed a period typical for the relevant type of transaction.
The transaction recognition date for derivative contracts is:
a) the date upon which the related contract was entered into;
b) the date when fulﬁlment was delivered based on the relevant
contract.
The transaction recognition date can also be the date when money
in circulation is paid or received, the date when foreign currency is
purchased or sold, the date when a payment is made, the date when
ownership is acquired or terminated, when a receivable or payable
arises, changes or ceases to exist, when assets move within an ac-
The Fund records receivables arising from its transactions with
securities and other operating receivables at their nominal value,
while receivables from positive fair values of derivatives are recorded at the fair value of the derivatives at the balance sheet date.
Pursuant to the prudence principle, provisions are created based on
the aging of receivables.
The Fund records payables arising from its transactions with securities and operating payables at their nominal value, while payables from negative fair values of derivatives are recorded at the fair
value of the derivatives at the balance sheet date.
Financial Derivatives and Hedging Transactions
In the normal course of business, the Fund enters into hedging
contracts with ﬁnancial derivatives to hedge against interest rate
and foreign currency exposures associated with its transactions on
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ﬁnancial markets. The method of fair value hedges is applied to
hedging derivatives.
The Fund designates certain derivatives as hedges provided that
the following criteria are met:
– the Fund has developed a risk management strategy;
– at the inception of the hedge, the hedging relationship is formally documented, the documentation identiﬁes the hedged
item and the hedging instrument, and it deﬁnes the risk that
is being hedged and the approach to establishing whether the
hedge is effective; and
– the hedge is effective, that is, changes in the fair value or cash
ﬂows of the hedged item are almost fully offset by changes in
the fair value or cash ﬂows of the hedging instrument and the
results are within a range of 80 percent to 125 percent.
Nominal values of derivative ﬁnancial instruments are recognised
in the off-balance sheet accounts. Changes in the fair value of derivatives that are designated and qualify as hedges (see above) are
recorded as income or expense. Changes in the fair value of the
hedging derivatives attributable to the risk hedged are recognised
in the same income or expense accounts as differences from revaluation of a hedged instrument.
All ﬁnancial derivatives are recorded as assets when the fair value
is positive and as liabilities when the fair value is negative. Fair
values are derived from valuation models.
Derivatives that are not designated as hedging derivatives are
treated as trading derivatives. These derivatives are measured at
fair value on a daily basis and gains and losses on revaluation are
posted to derivative expense and income accounts.
Certain derivatives are embedded in compound ﬁnancial instruments, which comprise the host instrument and the derivative. Pursuant to the applicable regulations, the Fund recognises changes in
assets and liabilities arising from the movements in rates or prices
of securities or changes in exchange rates through expense and income accounts. Given that the assets of the Fund are valued at fair
value and changes of fair values are reported within expenses and
income from derivatives, embedded derivatives are not accounted
for separately.
Income Tax
Under effective tax regulations, the income tax rate applicable to
mutual funds is 5 percent.
Deferred Tax
Deferred tax is provided using the liability method on all temporary differences between the carrying amount of assets and liabilities reported in the balance sheet and their value for tax purposes.
Deferred tax assets are recognised only up to the amount of probable future taxable income against which the deferred tax asset can
be offset.
Foreign Currency Translations
Foreign currencies are translated using the exchange rate promulgated by the Czech National Bank as at the relevant date. As at the
balance sheet date, assets and liabilities denominated in foreign
currencies are translated on the same basis.
Foreign exchange rate gains and losses from the daily translation
of assets and liabilities in foreign currencies are posted to expense
or income accounts.
Capital Funds
The selling price of participation certiﬁcates is calculated as a proportion of the Fund’s net assets and the relevant number of participation certiﬁcates. Participation certiﬁcates are sold to investors
using the selling price determined on a daily basis.
Share Premium
Share premium is the difference between the nominal value of all
participation certiﬁcates and their carrying amounts as at the date
of their issue or purchase.
Interest Income and Expense and Dividend
Income
Interest income and expense are recognised using the accrual
principle.
Dividend income is recognised as at the date when the right to
receive the payment is established (ex-dividend date). Dividend income from domestic securities is presented after withholding tax.
Dividend income from foreign securities is presented gross with
the applicable taxes presented within taxes on foreign dividends
(see note 5.17).
Subsequent Events
The impact of events that occurred between the balance sheet date
and the date of the ﬁnancial statements preparation is recognized in
the ﬁnancial statements provided these events provide additional
evidence about conditions that existed at the date of the balance
sheet.
If material events reﬂecting the facts occurring after the balance
sheet date happened between the balance sheet date and the date
of the ﬁnancial statements preparation the consequences of these
events are disclosed in the notes to the ﬁnancial statements but not
recognized in the ﬁnancial statements.
4. Risk Management
Credit Risk
In accordance with the Statute and the investment strategy, the
Company establishes rules and policies for selecting investment
instruments such that the overall credit risk proﬁle of allocated investments is consistent with the characteristics of the Fund. New
types of instruments are approved on a case by case basis by the
121
Investiční společnost České spořitelny, a. s., SPOROBOND – otevřený podílový fond, 2013 Annual Report
risk management function together with the speciﬁcation of limits
for positions pertaining to these instruments. Speciﬁc emphasis is
placed on an appropriate rating structure and a relatively detailed
diversiﬁcation of portfolios (especially in relation to interest bearing securities).
The Fund monitors Value at Risk globally and also broken down to
Foreign Currency VaR, Interest Rate VaR and Equity VaR. Based
on the above values, the Fund identiﬁes critical risk segments. This
identiﬁcation inﬂuences the reinvestment process. The limits set
the maximum acceptable VaR for the Fund.
Market Risk
The Equity VaR also reﬂects the risk related to the holding of
Funds’ participation certiﬁcates (including funds of money market
and bond funds).
The Fund uses a wide range of tools to eliminate risk exposures
attached to its portfolios. Signiﬁcant attention is paid to market
risks. Apart from statutory restrictions, the Fund is subject to a set
of internal limits having a direct impact on the FX exposure, interest rate exposure (the modiﬁed duration range of the Fund), equity
allocation on individual markets according to their volatility, portfolio rating structure (see above), and other characteristics of the
Fund. The relevant limits are appropriately applied to correspond
with the type of the Fund.
Whenever the Fund purchases new types of instruments, these instruments are ﬁrst analysed to assess the potential credit risk, as
well as the market risk that the instruments might bring to or help
eliminate from the portfolio. Subsequently, their appropriateness
and, if appropriate, the acceptable proportion of these instruments
in the portfolio is evaluated.
The level of the Fund’s market risk exposure is measured using
the Value at Risk (“VaR”). With effect from 1 August 2006, the
VaR for the Company’s Funds is calculated by the Central Risk
Management Department of Česká spořitelna using the historical
simulation method in the K + KvaR system.
Set out below are relative monthly values of the VaR in percentage
terms for individual types of risks:
Global VaR
Foreign currency VaR
Interest rate VaR
Equity VaR
Global VaR
Foreign currency VaR
Interest rate VaR
Equity VaR
31 Dec 2013
Average
VaR
1.63%
0.02%
1.64%
0.19%
1.46%
0.10%
1.38%
0.30%
31 Dec 2012
Average
VaR
0.92%
0.18%
0.79%
0.29%
1.39%
0.13%
1.38%
0.28%
The average VaR is calculated as an average of daily VaR values in
years 2013 and 2012 respectively.
Adherence to all the above limits and their effectiveness is monitored and assessed on an ongoing basis. The limits are reviewed,
if necessary.
The portfolio’s risk of unfavourable development of foreign exchange rates, interest rates, and other market factors is hedged, to
an appropriate extent, by ﬁnancial derivatives. Financial derivatives are traded on the OTC market as this market enables the trading of contracts whose parameters and nature appropriately satisfy
the requirements of a hedge. Portfolios primarily include currency
swaps, currency forwards and interest rate swaps.
Liquidity Risk
Another monitored risk is the liquidity risk. Liquidity risk is a risk
that the Fund will not have enough available resources to meet its
obligations arising from ﬁnancial contracts. Liquidity is monitored
and managed based on expected cash ﬂows, with appropriate adjustments made to the structure of securities and term placements
portfolios.
Pursuant to the Act, the Company is obliged to repurchase a participation certiﬁcate without undue delay but not later than 15 business days from the date when the repurchase right is claimed. Given that the Fund holds securities traded on foreign stock exchanges
which can be realised within a few days, the Fund’s inability to
meet its obligations due to lack of liquidity is unlikely.
Pursuant to Section 12 of the Collective Investment Act, the Company can suspend issues and purchases of the Fund’s participation
certiﬁcates for a maximum of three months, if necessary due to the
protection of rights or the participation certiﬁcate holders’ interests
protected by law. Issuing and purchasing participation certiﬁcates
can be suspended particularly at the end or beginning of the calendar year, in the event of natural disasters, upon very strong ﬂuctuations on ﬁnancial markets and upon high requirements for the
sales or purchases of participation certiﬁcates provided they could
endanger the Fund’s assets.
The quantitative information about the residual maturity of assets
and liabilities is given in Note 5.19.
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5. Additional Information on the Financial Statements
5.1 Receivables from Banks
Receivables from banks
31 Dec 2013 31 Dec 2012
Current accounts
Term deposits
Margin accounts
Margin constitution
Total
932,126
–
–
201,408
996,675
200,115
1
14,582
1,133,534
1,211,373
Balances on current accounts are repayable on demand.
5.2 Securities
Individual types of securities by issuer, number of securities, their market value and interest rate are disclosed in the Portfolio attached to
the annual report. All securities held by the Fund are publicly listed on the Prague Stock Exchange or foreign stock exchanges. Participation
certiﬁcates which are not listed on stock exchanges are purchased and administered by the Company.
Shares, participation certiﬁcates and other holdings
31 Dec 2013 31 Dec 2012
Acquisition cost
Market revaluation
1,960,860
150,652
1,844,271
116,106
Total
2,111,512
1,960,377
Debt securities
31 Dec 2013 31 Dec 2012
Acquisition cost
Market revaluation
Accrued interest income
9,182,794
32,875
153,763
7,585,256
486,832
129,979
Total
9,369,432
8,202,067
Of the aggregate volume of debt securities, debt securities maturing within one year accounted for 0 percent in 2013 (2012: 5.75 percent).
Of the aggregate volume of debt securities, debt securities maturing within more than one year with a variable coupon accounted for 15.8
percent in 2013 (2012: 15.51 percent).
Debt securities maturing within more than one year with a ﬁxed coupon accounted for 84.2 percent in 2013 (2012: 78.74 percent).
5.3 Other Assets
Other assets
31 Dec 2013 31 Dec 2012
Receivables from security trading
Provisions against receivables
Positive fair values of ﬁnancial derivatives
Settlement with state budget
Other receivables
Other
7,270
(7,270)
16,380
26,974
2,433
744
7,270
(7,270)
17,449
–
23,073
455
Total
46,531
40,977
Settlement with state budget as at 31 December 2013 represents overpayment on income tax advances.
‘Other receivables’ relate mainly to receivables from domestic coupons due in January of the following year.
The caption ‘Other’ represents mainly an estimated receivable for the return of a portion of the management fee for purchased participation
certiﬁcates of Erste’s fund.
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5.4 Prepayments and Accrued Income
Prepayments and accrued income
31 Dec 2013 31 Dec 2012
Prepayments – audit fees
–
18
Total
–
18
5.5 Equity
The Fund has no share capital. The nominal value of one participation certiﬁcate is CZK 1. The total nominal value of all participation
certiﬁcates is posted to ‘Capital funds’.
Share premium arising from the difference between the nominal and selling values of the participation certiﬁcates is recorded separately.
The Fund accounts for share premium upon the sale of participation certiﬁcates as well as upon their repurchase. The selling price of the
participation certiﬁcate is determined as the share of the Fund’s net assets and the number of issued participation certiﬁcates.
The value of a participation certiﬁcate as at the last trading date in 2013 totalled CZK 2.1038 (2012: CZK 2.0947). This is the most recent
announced value of the participation certiﬁcate for the year, for which purchases and repurchases of the participation certiﬁcates of the Fund
were undertaken.
In line with the Fund’s Statute, the proﬁt for 2013 of CZK 55,061 thousand will be transferred to the reinvestment fund within ‘Other funds
from proﬁt’.
In line with the Fund’s Statute, the proﬁt for 2012 of CZK 952,533 thousand was transferred to the reinvestment fund within ‘Other funds
from proﬁt’.
5.6 Changes in the Capital Fund
Number of
Nominal Contribution
upon
participation
value of
merger
certiﬁcates participation
certiﬁcates
Balance at 31 Dec 2011
Use of fund Total capital
to cover
funds
losses
4,193,374,303
4,193,374
6,347
(148,308)
4,051,413
2,014,386,889
(814,464,858)
2,014,387
(814,465)
-
-
2,014,387
(814,465)
Balance at 31 Dec 2012
5,393,296,334
5,393,296
6,347
(148,308)
5,251,335
Participation certiﬁcates sold
Participation certiﬁcates purchased
1,897,304,154
(1,367,992,750)
1,897,304
(1,367,992)
-
-
1,897,304
(1,367,992)
Balance at 31 Dec 2013
5,922,607,738
5,922,608
6,347
(148,308)
5,780,647
Participation certiﬁcates sold
Participation certiﬁcates purchased
5.7 Other Liabilities
Other liabilities
31 Dec 2013 31 Dec 2012
Negative fair values of ﬁnancial derivatives
Payables from participation certiﬁcate holders’ placements
State budget settlement
Other liabilities
175,846
12,582
–
2,532
51,445
7,953
45,075
3,687
Total
190,960
108,160
5.8 Accrued Expenses and Deferred Income
Accrued expenses consist of the unbilled custody fee of CZK 1,142 thousand for December 2013 (2012: CZK 1,036 thousand) and the
management fee of CZK 9,133 thousand for December 2013 (2012: CZK 8,376 thousand), the unbilled fee for the local sub-register administration of CZK 0 thousand for December 2013 (2012: CZK 51 thousand), the fee of CZK 4 thousand for December 2013 paid to the central
depository (2012: CZK 4 thousand) and the fee for calculation of net assets value and of participation certiﬁcate rate of CZK 51 thousand
related to December 2013 (2012: CZK 46 thousand).
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Investiční společnost České spořitelny, a. s., SPOROBOND – otevřený podílový fond, 2013 Annual Report
5.9 Financial Derivatives Designated as Hedging Derivatives
Nominal value of the derivatives
31 Dec 2013
31 Dec 2012
Assets
Liabilities
Assets
Liabilities
Currency swaps
Interest rate swaps
409,000
–
423,046
–
3,727,744
200,000
3,731,772
223,627
Total
409,000
423,046
3,927,744
3,955,399
Open positions of derivatives posted to an off-balance sheet are converted to fair value daily as of 1 January 2011 (up to 31 August 2013
futures were converted monthly; as of 1 September 2013 they are converted on daily basis) and recorded in absolute values.
Fair value of the derivatives
31 Dec 2013
31 Dec 2012
Positive
Negative
Positive
Negative
Currency swaps
Interest rate swaps
–
–
14,046
–
16,725
–
20,753
23,627
Total
–
14,046
16,725
44,380
All ﬁnancial derivatives designated as hedging derivatives are due within one year.
5.10 Financial Derivatives Designated as Trading Derivatives
Nominal value of the derivatives
31 Dec 2013
31 Dec 2012
Assets
Liabilities
Assets
Liabilities
Interest rate swaps
Cross currency swap
Credit swaps
296,633
4,986,124
24,435
298,650
5,129,057
24,905
37,133
51,635
24,973
38,658
56,989
24,435
Total
5,307,192
5,452,612
113,741
120,082
Open positions of derivatives posted to an off-balance sheet are converted to fair value daily as of 1 January 2011 (up to 31 August 2013
futures were converted monthly; as of 1 September 2013 they are converted on daily basis) and recorded in absolute values.
Fair value of the derivatives
31 Dec 2013
31 Dec 2012
Positive
Negative
Positive
Negative
Interest rate swaps
Cross currency swap
Credit swaps
–
16,380
–
2,017
159,313
470
–
186
538
1,525
5,540
–
Total
16,380
161,800
724
7,065
All credit and currency derivatives are due within one year.
5.11 Residual maturity of credit derivatives
2013
Credit derivatives 31 Dec 2013
Nominal value
Fair value
Assets
Liabilities
Positive
Negative
Maturity within 1 – 5 years
Maturity above 5 years
296,633
–
298,650
–
–
–
2,017
–
Total
296,633
298,650
–
2,017
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2012
Credit derivatives 31 Dec 2012
Nominal value
Fair value
Assets
Liabilities
Positive
Negative
Maturity within 1 – 5 years
Maturity above 5 years
37,133
200,000
38,658
223,627
−
−
1,525
23,627
Total
237,133
262,285
−
25,152
2013
2012
Interest on deposits at banks
Interest on debt securities
Interest on margin constitution
Interest on hedging derivatives
415
300,990
61
1,052
4,178
279,870
2
1,545
Total
302,518
285,595
2013
2012
5.12 Interest Income
Income
Expense
Interest on hedging derivatives
(9,998)
23,627
Total
(9,998)
23,627
2013
2012
5.13 Income from Shares and Interests
Income from shares and interests – foreign dividends
2,401
–
Total
2,401
–
2013
2012
Management fees
Custody fees
Commissions and fees from securities trading
Administration of securities
Expenses of administration of the local sub-register – Česká spořitelna
Fees paid to the central depository
Other fees and commissions
108,056
13,477
13
7,311
851
51
6,739
86,059
10,607
36
5,627
607
51
6,394
Total
136,498
109,381
5.14 Fees and Commissions
In compliance with the Statute of the Fund, the management fee paid to the Company by the Fund amounts to 0.90 percent of the average
annual net asset value.
Pursuant to the custody service contract entered into with Česká spořitelna, a. s., the Fund pays a fee equal to 0.11 percent of its average
annual net asset value.
If participation certiﬁcates of another mutual fund managed by the Company are purchased and added to the Fund’s assets, the Fund’s aggregate net asset value reduced by the current value of investments in participation certiﬁcates of the other mutual fund managed by the
Company is used as the basis for the calculation of the ﬁxed part of the management fee.
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Investiční společnost České spořitelny, a. s., SPOROBOND – otevřený podílový fond, 2013 Annual Report
5.15 Proﬁt or Loss from Financial Operations
2013
2012
Proﬁt or loss from securities at fair value through proﬁt or loss
Proﬁt or loss from FX differences
Proﬁt or loss from ﬁxed term transactions
249,679
18,462
(387,793)
801,595
(4,407)
53,194
Total
(119,652)
850,382
Proﬁt or loss from securities at fair value through proﬁt or loss primarily comprises the proﬁt or loss from the realised sales of securities,
from payable securities and from the daily valuation of securities at fair value.
Proﬁt or loss from derivatives includes proﬁt or loss on the settlement of ﬁxed term transactions with currency instruments and also the
revaluation of open derivatives at fair value.
Proﬁt or loss from FX differences represents the value of realised FX proﬁt or loss from foreign currency accounts and from the settlement
of foreign currency receivables and payables and also gains or losses arising from the revaluation of assets, with the exception of securities,
and liabilities in foreign currency at fair value.
5.16 Administrative Expenses
2013
2012
Audit
554
303
Total
554
303
2013
2012
5.17 Income Tax
The principal income tax components are as follows:
Tax payable – current year
3,152
50,133
Total income tax
3,152
50,133
2013
2012
58,213
18
(2,402)
55,829
–
55,829
2,792
2,401
360
1,002,666
–
–
1,002,666
–
1,002,666
50,133
–
–
3,152
50,133
Current income tax – analysis:
Proﬁt (Loss) before tax
Items to add
Deductible items
Tax base
Tax loss utilisation
Tax base adjusted
Tax (5%) on tax base
Foreign dividends
Tax on foreign dividends
Total tax
Deferred tax
As at 31 December 2013, the Fund determined a deferred tax asset of CZK 364 thousand arising from provisions against receivables. The
deferred tax asset was not recorded on the basis that its recovery was uncertain.
As at 31 December 2012, the Fund determined a deferred tax asset of CZK 364 thousand arising from provisions against receivables. The
deferred tax asset was not recorded on the basis that its recovery was uncertain.
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Investiční společnost České spořitelny, a. s., SPOROBOND – otevřený podílový fond, 2013 Annual Report
5.18 Related Party Transactions
Related parties include Česká spořitelna, a. s. and Investiční společnost České spořitelny, a. s.
31 Dec 2013 31 Dec 2012
Unbilled management fee – Investiční společnost
Unbilled custody fee – Česká spořitelna
Unbilled fee for administration of the local sub–register – Česká spořitelna
Unbilled fees paid to the central depository
Unbilled fee for calculation of NAV and of participation certiﬁcate rate
Other payables to related parties
Total payables to related parties
9,133
1,142
–
51
4
2,534
8,376
1,036
51
46
4
3,689
12,864
13,202
The costs charged to the Fund by Česká spořitelna, a. s. amounted to CZK 28,442 thousand in 2013 (2012: CZK 23,323 thousand), of which
the greatest portion was represented by the custody fee of CZK 13,477 thousand (2012: CZK 10,607 thousand).
The costs charged by the Company amounted to CZK 108,056 thousand in 2013 (2012: CZK 86,059 thousand), which is the annual management fee.
5.19 Liquidity
The following tables show the residual maturity of assets and liabilities broken down by major classes of assets.
Given that all securities are traded on public markets, sales can easily be undertaken within three months.
2013
Assets
Less than
3 months
3 month –
1 year
1 – 5 years Over 5 years
Not
speciﬁed
Total
Receivables from banks
Debt securities
Shares and participation certiﬁcates
Prepayments
Derivatives
Settlement with state budget
Other assets
Total assets
1,133,534
–
–
–
16,380
–
3,177
1,153,091
–
–
–
–
–
26,974
–
26,974
–
3,214,482
–
–
–
–
–
3,214,482
–
6,154,950
–
–
–
–
–
6,154,950
–
–
2,111,512
–
–
–
–
2,111,512
1,133,534
9,369,432
2,111,512
–
16,380
26,974
3,177
12,661,009
Other liabilities
Net assets
Available capital
(176,321)
976,770
(12,459,718)
–
26,974
–
(10,923)
3,203,559
–
(14,046)
6,140,904
–
–
(201,290)
2,111,512
12,459,719
– (12,459,719)
Difference
(11,482,949)
26,974
3,203,559
6,140,904
2,111,512
Liabilities
–
128
Investiční společnost České spořitelny, a. s., SPOROBOND – otevřený podílový fond, 2013 Annual Report
2012
Assets
Less than
3 months
3 month –
1 year
Receivables from banks
Debt securities
Shares and participation certiﬁcates
Prepayments
Derivatives
Other assets
1,211,373
208,573
−
−
14,770
23,528
−
263,369
−
18
−
−
−
1,946,812
−
−
538
−
1,458,244
263,387
Other liabilities
Net assets
Available capital
(26,691)
1,431,553
(11,297,139)
Difference
(9,865,586)
Total assets
1 – 5 years Over 5 years
Not
speciﬁed
Total
−
5,783,313
−
−
2,141
−
−
−
1,960,377
−
−
−
1,211,373
8,202,067
1,960,377
18
17,449
23,528
1,947,350
5,785,454
1,960,377
11,414,812
(45,075)
218,312
−
(1,525)
1,945,825
−
(44,382)
5,741,072
−
−
1,960,377
−
(117,673)
11,297,139
(11,297,139)
218,312
1,945,825
5,741,072
1,960,377
−
Liabilities
Liquidity risk, to which the Fund is exposed, is low as all assets are convertible into cash before the repurchases of participation certiﬁcates
from participation certiﬁcate holders are expected.
5.20 Off-balance Sheet Assets and Liabilities
The Fund’s off-balance sheet accounts include receivables and payables from ﬁxed term transactions and assets provided into custody and
safekeeping. The item ‘Assets provided into custody, administration and safekeeping’ shows foreign and domestic securities administered
by Česká spořitelna, a. s. (this item does not include participation certiﬁcates of open-ended mutual funds of the Company, which the Fund
maintains in its portfolio).
5.21 Contingent Assets and Liabilities
The Fund has no assets or liabilities that were not disclosed in the balance sheet or off-balance sheet accounts.
5.22 Subsequent Events
No signiﬁcant events occurred after the date of the ﬁnancial statements, which would have a material impact on the Fund’s ﬁnancial statements.
129
Investiční společnost České spořitelny, a. s., SPOROBOND – otevřený podílový fond, 2013 Annual Report
Portfolio at 31 December 2013
The detail of the portfolio is not part of the fund’s ﬁnal accounts. Figures are stated in CZK.
ISIN
Name of the security
XS0429484891
XS0860033843
FR0011594720
XS0412842857
XS0545031642
XS0254356057
XS0761852556
XS0219645222
XS0829209195
XS0641963839
XS0997797054
XS0877209188
XS0880210702
XS0343877451
XS0323411016
XS0246862485
XS0353643744
XS0249443879
XS0625359384
XS0594515966
XS0616431689
AT000B007109
XS0836299320
AT000B119839
XS0989152490
RABOBANK 5.875 05/20/19
ING BANK NV VAR 11/30/17
BPCE 1.8 10/18/18
RWE FINANCE BV 6.5 08/10/21
PKO FINANCE AB 3.733 10/21/15
GE CAPITAL EURO VAR 05/17/21
TELEFONICA EMIS 3.934 03/30/2017
KBC IFIMA 3.87 05/18/16
IBERDROLA INTL BV 4.5 09/21/17
CESKE DRAHY 4.5 06/24/16
ROYAL BK SCOTLAND 1.5 11/28/16
BNP PARIBAS VAR 18
CREDIT AGRICOLE VAR 18 02/01/18
CREDIT AGRICOLE 5.971 02/01/18
STANDARD CHARTER. 5.875 09/26/17
JPM CHASE AND CO VAR 03/31/18
HSBC HOLDINGS PLC 6.25 03/19/18
BANK OF AMERICA CORP VAR 3/28/18
GOLDMAN SACHS GROUP 4.5 05/09/16
MORGAN STANLEY 4.5 02/23/16
ERSTE BANK 4.25 04/12/16
ERSTE BANK 2.5 05/18/15
ERSTE GROUP BANK 6.375 03/28/23
ERSTE BANK VAR 09/20/16
EUROPEAN INVT BANK VAR 12/07/23
Amount
Market Price
Market Price
Total
Accrued
Interest
4,000
1,620
40
3,000
3,000
1,000
10
7,500
19
1,500
3,000
45
50
45
40
60
60
88
2,000
2,000
40
800
1,000
100
175
31,624.32
50,350.00
2,507,750.00
34,629.96
28,627.86
26,019.74
5,256,000.00
10,226.65
3,021,809.91
29,497.78
27,560.75
1,001,000.00
1,000,000.00
1,571,905.01
1,548,724.03
1,354,664.73
1,594,311.24
1,323,256.25
29,445.40
29,301.14
2,938,204.80
101,610.00
21,078.29
1,000,000.00
1,975,694.84
126,497,264.00
81,567,000.00
100,310,000.00
103,889,876.63
85,883,581.50
26,019,743.00
52,560,000.00
76,699,875.00
57,414,388.34
44,246,672.25
82,682,261.25
45,045,000.00
50,000,000.00
70,735,725.56
61,948,961.25
81,279,883.88
95,658,674.25
116,446,550.00
58,890,799.50
58,602,288.50
117,528,192.00
81,288,000.00
21,078,289.82
100,000,000.00
345,746,597.00
3,955,210.96
87,120.00
364,931.51
2,065,891.44
597,435.97
14,478.88
1,487,375.34
1,797,164.38
635,997.02
963,631.85
111,578.42
91,287.50
120,000.00
3,361,457.27
847,545.21
0.00
4,043,309.08
3,801.11
1,595,909.59
2,103,084.25
3,359,374.66
1,233,333.33
324,106.42
218,166.67
136,888.89
2,142,019,623.73
29,519,079.75
10,500
22,962
2,000,000,000
2,000,000
2,000
8,000,000
3,170,000
20,633.46
10,280.00
0.27
30.95
31,703.85
28.75
27.36
216,651,329.79
236,049,360.00
532,867,750.00
61,905,081.25
63,407,697.00
230,013,475.00
86,738,163.70
990,037.34
1,592,032.00
7,821,760.27
509,879.59
868,458.33
933,201.37
129,505.11
1,427,632,856.74
12,844,874.01
60
500
4,000
60,000,000
10
1,100,400.00
31,511.60
31,888.14
1.01
5,815,500.00
66,024,000.00
15,755,799.63
127,552,578.00
60,600,000.00
58,155,000.00
1,622,083.33
474,349.19
1,097,000.00
490,000.00
1,524,931.51
328,087,377.63
5,208,364.03
Foreign corporate bonds
XS0782720402
SK4120008400
DE0001102309
SK4120007543
XS0840062979
SK4120008871
SK4120006503
SLOVAKIA GOVT 4.375 05/21/22 USD
SLOVAKIA GOVT VAR 09/02/15
BUNDESREPUBLIC 1.5 02/15/2023
SLOVAKIA GOVT 4.35 10/14/25
ERSTE GROUP BANK 7.125 10/10/22
SLOVAKIA GOVT 3.375 11/15/24
SLOVAKIA GOVT VAR 01/21/15
Foreign government bonds
CZ0001500110
XS0502286908
XS0458257796
CZ0002002538
XS0622499787
PRAHA 4.25 05/11/21
CEZ 4.875 04/16/25 EUR
CEZ 5 10/19/21 EUR
HYPOTECNI BANKA 1.75 07/12/15
CEZ 4.6 05/03/23
Local corporate bonds after 1 January 1998
130
Investiční společnost České spořitelny, a. s., SPOROBOND – otevřený podílový fond, 2013 Annual Report
ISIN
Name of the security
CZ0001002547
XS0368800073
XS0750894577
XS0792803131
CZ0001003123
XS0973829483
CZ0001002851
XS0541140793
XS0680917647
CZ0001003859
CZ0001000749
CZ0001000822
CZ0001001317
CZ0001001796
CZ0001001903
CZ0001001945
CZ0001002471
GOVERNMENT BOND 5.7 05/25/24
GOVERNMENT BOND 5 06/11/18
GOVERNMENT B. 3.875 05/24/22 EUR
CESKA EXP. BANKA VAR 06/14/18
GOVERNMENT BOND VAR 04/18/23
CESKA EXP. BANKA VAR 09/25/20
GOVERNMENT BOND 3.85 09/29/21
GOVERNMENT B. 3.625 04/14/21 EUR
CESKA EXP. BANKA VAR 09/22/18
GOVERNMENT BOND 2.5 08/25/28
GOVERNMENT BOND 6.95 01/26/16
GOVERNMENT BOND 4.6 08/18/18
GOVERNMENT BOND 3.75 09/12/20
GOVERNMENT BOND 4.2 12/04/36
GOVERNMENT BOND 4 04/11/17
GOVERNMENT BOND 4.7 09/12/22
GOVERNMENT BOND 5 04/11/19
Amount
Market Price
Market Price
Total
Accrued
Interest
93,600
18,000
4,300
500
5,000
40
81,200
3,000
1,000
15,000
3,500
26,500
11,000
5,500
17,050
11,000
92,400
12,890.50
32,036.51
30,603.28
100,000.00
10,430.00
2,646,869.03
11,230.00
30,156.12
100,000.00
9,296.50
11,380.50
11,629.50
11,193.10
11,318.00
11,090.00
11,892.60
11,905.00
1,206,550,800.00
576,657,247.50
131,594,117.98
50,000,000.00
52,150,000.00
105,874,761.00
911,876,000.00
90,468,355.88
100,000,000.00
139,447,500.00
39,831,750.00
308,181,750.00
123,124,100.00
62,249,000.00
189,084,500.00
130,818,600.00
1,100,022,000.00
31,863,000.00
13,727,527.40
2,766,853.78
26,250.00
503,291.67
208,975.45
7,902,338.89
2,132,669.43
363,000.00
1,302,083.33
–175 680.56
4,469,666.67
1,237,500.00
166,833.33
4,906,611.11
1,551,000.00
33,238,333.33
40,716,612
24,670,000
147,156,071
1.25
1.04
1.40
34,066
73
22,800
77,487
134,700
64,510
80
4,128.83
4,823,758.57
4,393.76
3,749.27
4,688.03
3,371.08
1,211,770.61
Local government bonds after 1 January 1998
CZ0008472412
CZ0008473659
CZ0008472230
ISCS HIGH YIELD DLUHOPISOVY
ISCS DLUHOPISOVY FOND
ISCS CS KORP. DLUHOPIS. OPF
5,317,930,482.36 106,190,253.83
Local participation certiﬁcates - ISČS
AT0000A05HS1
LU0131211178
AT0000637491
AT0000805684
AT0000658968
AT0000676846
LU0099626896
ESPA BOND BRIK–CORP. (VT)
PARVEST EURO CORP BOND–INST
ESPA BOND USA HIGH YIELD (T) EUR
ESPA BOND EUROPE HIGH YIELD T
ESPA BOND EURO–CORPORATE (VT)
ESPA CASH CORPORATE–PLUS–T
PARVEST FLEXBOND EUR–CORP–I
Foreign participation certiﬁcates
Total
51,042,344.80
25,770,282.00
205,326,865.87
0.00
0.00
0.00
282,139,492.67
0.00
140,652,850.53
352,134,375.43
100,177,710.90
290,519,820.09
631,477,573.65
217,468,435.31
96,941,648.66
0.00
0.00
0.00
0.00
0.00
0.00
0.00
1,829,372,414.57
0.00
11,327,182,247.70 153,762,571.62
131
Independent Auditor’s Report
to the Participation certiﬁcate holders of Investiční společnost České spořitelny, a. s.,
TRENDBOND – otevřený podílový fond
We have audited the accompanying ﬁnancial statements of Investiční společnost České spořitelny, a. s., TRENDBOND – otevřený dluhopisový podílový fond, which comprise the balance sheet as at 31 December 2013, and the income statement and statement of changes in
equity for the year then ended, and a summary of signiﬁcant accounting policies and other explanatory information. For details of Investiční
společnost České spořitelny, a. s., TRENDBOND – otevřený dluhopisový podílový fond, see Note 1 to the ﬁnancial statements.
Management’s Responsibility for the Financial Statements
Management of Investiční společnost České spořitelny, a. s., is responsible for the preparation and fair presentation of these ﬁnancial statements in accordance with accounting principles generally accepted in the Czech Republic, and for such internal control as management determines is necessary to enable the preparation of ﬁnancial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these ﬁnancial statements based on our audit. We conducted our audit in accordance with the
Act on Auditors and International Standards on Auditing as amended by implementation guidance of the Chamber of Auditors of the Czech
Republic. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
whether the ﬁnancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the ﬁnancial statements. The procedures selected depend on the auditor’s judgment, including an assessment of the risks of material misstatement of the ﬁnancial statements,
whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation
and fair presentation of the ﬁnancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the ﬁnancial statements.
We believe that the audit evidence we have obtained is sufﬁcient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the ﬁnancial statements present fairly, in all material respects, the ﬁnancial position of Investiční společnost České
spořitelny, a. s., TRENDBOND – otevřený dluhopisový podílový fond, as at 31 December 2013, and its ﬁnancial performance for the year
then ended in accordance with accounting principles generally accepted in the Czech Republic.
31 March 2014
Prague, Czech Republic
Ernst & Young Audit, s.r.o.
License No. 401
Represented by partner
Roman Hauptﬂeisch
Auditor, Licence no. 2009
A member ﬁrm of Ernst & Young Global Limited,
Ernst & Young Audit, s. r. o. with its registred ofﬁce at Na Florenci 2116/15, 110 00 Prague 1 – Nové Město,
has been incorporated in the Commercial Register administered by the Municipal Court in Prague,
Section C, entry No. 88504, under Identiﬁcation No. 26704153.
132
Investiční společnost České spořitelny, a. s., TRENDBOND – otevřený podílový fond, 2013 Annual Report
Balance Sheet
at 31 December 2013
(in thousands CZK)
Line
Current
Previous
1
2
10
11
15
16
18
21
141,267
141,267
697,128
697,128
1,538
264
1,274
0
102,140
102,140
602,720
602,720
147
147
0
11
22
839,933
705,018
29
30
32
33
34
39
40
41
46
47
5,029
4,516
0
513
1,123
8,430
202,251
619,969
2,831
300
3,459
491
2,579
389
951
(24 348)
104,454
519,874
2,831
97,797
Total Liabilities
48
839,933
705,018
of which: Equity
49
833,781
700,608
3 Receivables from banks and credit unions
of which: a/ on demand: aa/ current accounts
5 Debt securities
of which: a/ issued by the government
11 Other assets
a/ derivatives
c/ receivables from taxes
13 Prepayments and accrued income
Total Assets
4 Other liabilities
a/ derivatives
c/ liabilities from taxes
d/ other liabilities
5 Deferred income and accrued expenses
9 Share premium
10 Reserve funds and other funds from proﬁt
12 Capital funds
14 Retained earnings or accumulated losses from previous periods
15 Proﬁt or loss for the accounting period
133
Investiční společnost České spořitelny, a. s., TRENDBOND – otevřený podílový fond, 2013 Annual Report
Off Balance Sheet Accounts
at 31 December 2013
(in thousands CZK)
4 Amounts due from ﬁxed term transactions
b/ with currency instruments
7 Assets provided into custody, administration and safekeeping
of which: securities
12 Amounts owed from ﬁxed term transactions
b/ with currency instruments
Line
Current
Previous
52
54
60
61
64
66
126,943
126,943
697,128
697,128
131,195
131,195
89,117
89,117
602,720
602,720
89,461
89,461
134
Investiční společnost České spořitelny, a. s., TRENDBOND – otevřený podílový fond, 2013 Annual Report
Proﬁt and Loss Account
for the year ended 31 December 2013
(in thousands CZK)
1 Interest income and similar income
of which: a/ interest income from bonds
5 Commission and fee expenses
a/ fees and commissions from securities trading
b/ management fee
c/ custody fee
d/ other ﬁnancial expenses
6 Proﬁt or loss on ﬁnancial operations
a/ proﬁt or loss on transactions with securities
b/ proﬁt or loss on foreign exchange transactions
c/ proﬁt or loss on ﬁxed term transactions and options
9 Administrative expenses
of which: b/ other administrative expenses: ba/ audit
19 Ordinary proﬁt or loss for the accounting period before tax
23 Income tax
24 Proﬁt or loss for the accounting period after tax
Line
Current
Previous
1
2
10
11
12
13
14
15
16
17
18
21
22
26
30
31
39,618
39,121
14,616
55
12,556
921
1,084
(24,493)
(19,744)
166
(4,915)
193
193
316
16
300
37,323
34,960
12,000
6
10,285
754
955
75,291
66,382
2,275
6,634
238
238
100,376
2,579
97,797
135
Investiční společnost České spořitelny, a. s., TRENDBOND – otevřený podílový fond, 2013 Annual Report
Statement of Changes in Equity
for the year ended 31 December 2013
(in thousands CZK)
1 Share premium
opening balance
issued unit certiﬁcates
repurchase of unit certiﬁcates
other changes
closing balance
2 Retained earnings
opening balance
transfers to funds
other changes
closing balance
3 Capital funds
opening balance
issued unit certiﬁcates
repurchase of unit certiﬁcates
transfers to funds
other changes
closing balance
4 Gains or losses from revaluation
opening balance
foreign exchange rate differences and gains or losses from revaluation not
included in proﬁt (loss)
closing balance
5 Retained earnings or accumulated losses from previous periods
opening balance
other changes
closing balance
6 Proﬁt (loss) for the current period after taxes
opening balance
proﬁt (loss)
transfers to funds, dividends
closing balance
7 Total
Line
Current
Previous
(24,348)
157,319
(124,541)
0
8,430
(5,033)
19,182
(38,497)
0
(24,348)
104,454
97,797
0
202,251
146,461
0
(42,007)
104,454
519,874
462,298
(362,203)
0
0
619,969
607,847
62,705
(150,678)
0
0
519,874
0
0
0
0
0
0
2,831
0
2,831
2,831
0
2,831
97,797
300
(97,797)
300
(42,007)
97,797
42,007
97,797
833,781
700,608
136
Investiční společnost České spořitelny, a. s., TRENDBOND – otevřený podílový fond, 2013 Annual Report
Notes to the Financial Statements
for the year ended 31 December 2013
1. Organisation and Description of
Business
Formation and Description of the Business
Investiční společnost České spořitelny a.s., TRENDBOND –
otevřený dluhopisový podílový fond (hereinafter the “Fund” or
“ISČS, a. s. – TRENDBOND OPF dluhopisový”) is an accounting
unit without legal entity status, formed by Investiční společnost
České spořitelny, a. s. (hereinafter the “Company”) as an openended mutual fund under the Investment Companies and Funds
Act No. 248/1992 Coll., based upon the Resolution of the Securities Commission dated 11 October 2001. The Fund commenced its
activities on 29 October 2001.
Pursuant to a concluded contract, Česká spořitelna, a. s. acts as the
depository of the Fund.
The Fund is managed by the Company. In compliance with the
Collective Investment Act No. 189/2004 Coll. (hereinafter the
“Act”), the Company is responsible for the management of the assets of the Fund, which involves the administration and handling
of the assets.
The Fund is a standard fund in compliance with the Act and meets
the requirements of EU legislation.
According to the classiﬁcation binding for the members of the
Capital Market Association (hereinafter the “AKAT CR”) as at the
date of the approval of this Statute, the Fund can be deﬁned as
a bond fund.
Registered Ofﬁce
Investiční společnost České spořitelny, a. s.
TRENDBOND – otevřený dluhopisový podílový fond
Prague 6, Evropská 2690/17
Principal Business
The Company collects funds from individuals and legal entities for
the Fund by issuing participation certiﬁcates with the purpose of
their collective investment on local and foreign ﬁnancial markets.
No restrictions are placed on the number of participation certiﬁcates for issue and the period for which the Fund is established.
The Company reserves the right to temporary halt the issuing of
participation certiﬁcates for no longer than three months in compliance with the Act.
The participation certiﬁcates of the Fund are available both in the
Czech Republic and in other EU member countries.
The Fund is a standard collective investment fund that meets the
requirements of EU legislation. This also entails that the Fund is
subject to supervision which is equivalent to the supervision pursuant to the EU legislation, the level of protection of the participation
certiﬁcate holders’ assets is equivalent to the protection provided
to participation certiﬁcate holders of other collective investment
funds that fulﬁl the requirements of Council Directive No. 85/611/
EEC as of 20 December 1985, on the coordination of legal and
administrative regulations regarding collective investment entities
transferable into securities, as amended by Council Directive No.
88/220/EEC, Directive 95/26/ES of the European Parliament and
Council, Directive 2001/107/EC of the European Parliament and
Council and Directive 2001/108/EC of the European Parliament
and Council. The Company prepares mid-year and annual reports
on the administration of mutual fund assets, which provide a true
view of the assets and liabilities, revenues and transactions in the
reporting period.
Investment Policy of the Fund
The objective of the investment policy is to provide participation
certiﬁcate holders with a long-term appreciation of participation
certiﬁcates primarily through investments in bonds of European
Union candidate or new member states. The Fund is managed
such that it beneﬁts from the decrease, if any, of interest income
while maximising the income from changes in exchange rates. Due
to a signiﬁcant proportion of foreign currencies in the portfolio,
which may be up to 70 percent, the value of the participation certiﬁcates may have a high short-term ﬂuctuation rate.
The Fund’s portfolio predominantly includes state bonds of Central and Eastern Europe countries. The Fund also invests in treasury bills, bank deposits or bonds with embedded derivatives. The
portfolio of the Fund may also be expanded by purchasing bonds
exchangeable for shares or with the option to subscribe for shares.
The Fund is a standard fund pursuant to the Collective Investment
Act. The Company fulﬁls the requirements of the EU legislation
when managing the Fund’s assets.
According to the classiﬁcation binding for the members of AKAT
as at the date of the approval of this Statute, the Fund can be deﬁned as a bond fund.
Up to 10 percent of the ﬁnances collected in the Fund can be invested in securities of the collective investment funds if such collective
investment fund invests in identical classes of assets as a standard
fund in compliance with the Act, spreads the risk connected to investments, repurchases securities which it issued or ensures that
the exchange rate or price of these securities on the regulated market does not signiﬁcantly differ from their current amount provided
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that it has been authorised by a supervision body of the state where
it has its registered ofﬁce and falls subject to supervision which
the Czech National Bank considers equivalent to the supervision
within the European Union member states and provided that the
cooperation between the Czech National Bank and this supervision
body is ensured and the protection of owners of securities issued
by this collective investment fund is equivalent to the protection
provided to owners of securities issued by a collective investment
fund fulﬁlling the requirements of the EC legislation; this collective investment fund must principally comply with provisions on
borrowing, lending and sales of assets for a short time (Sections
33 to 35 of the Collective Investment Act), separating its assets in
accounting pursuant to Section 16 (1) of the Collective Investment
Act, prepare and publish mid-year and annual reports, which provide a true view of assets and liabilities, revenues and transactions
in the reporting period, and its Statute can allow investments up to
the maximum of 10 percent of the value of its assets into securities
issued by another collective investment fund.
This 10 percent investment limit provision tightens investment
limits for investing into securities of collective investment funds
set out in Section 30 (1) and (2) of the Collective Investment Act.
The Fund can also purchase bonds can be exchanged for shares or
which carry the priority right for the subscription of shares into the
portfolio of the Fund. In the event of claiming the rights arising
from these bonds for the acquisition of shares, the shares must not
exceed 10 percent of the value of the Fund’s assets.
The Company can use ﬁnancial derivatives to effectively manage
the Fund’s assets. Efﬁcient asset management represents transactions for the purpose of decreasing risk, decreasing costs or achieving sufﬁcient income for the Fund provided that the risk is demonstrably low. The exposure from these transactions must be fully
covered by the Fund’s assets so that liabilities arising from these
transactions are fulﬁlled.
The limits of the Fund are adhered to on the basis of the Act, or
they are regulated in the Fund’s Statute in compliance with the Act.
Management Policy
The proﬁt/(loss) is based on the difference between income and
expenses related to the management of the Fund’s assets.
The generated proﬁt has been fully retained by the Fund, in the reinvestment fund, as a source for further investments, and increases
the participation certiﬁcate value. In the event that the Fund incurs
a loss from the Company’s management of assets, the loss is covered from the reinvestment fund which was created from earnings
brought forward. If the reinvestment fund is not sufﬁcient, the loss
must be covered by a reduction in the Fund’s capital fund.
The Fund’s assets must not be used for the provision of loans, borrowings or gifts, to secure a third party’s obligation or to settle
a payable which is not related to the Fund’s management. This
provision does not affect Sections 26 and 27 of the Collective Investment Act.
The Company can accept loans and borrowings for the maximum
of six months when managing the Fund’s assets, to cover temporary needs related to the management of the Fund’s assets or
purchases of participation certiﬁcates. The volume of the received
loans and borrowings is not allowed to exceed 10 percent of the
value of the Fund’s assets.
Change in the Fund’s Statute
Czech National Bank Resolution No. 2012/4695/570, dated 18
May 2012, which came into force on 5 June 2012: The changes
to the Funds statute related mainly to the duty of the asset investment company to ensure that its statute is in accordance with the
amendment to Act 189/2004 Coll., Act on collective investments
(as ensuing from the changes made by Act 188/2011 Coll.) and Decree No. 193/2011 Coll., on the minimum requisites of the statute
and on the conditions for the use of the name Short-Term Money
Market Fund and Money Market Fund. In light of the change made
to the methodology of classifying mutual funds of the Capital Market Association, the deﬁnition of a bond fund in the introductory
Deﬁnition of Terms of the Funds statute has been modiﬁed, as well
as the wording of certain related provisions. Investment objectives,
the method of investing and the risk proﬁle of the Fund have not
been changed in the amendments referred to above.
Along with the change made to the statute, information was updated as to the list of funds managed by the Company (Article II
Paragraph 8 of the statute), in particular information on the managing parties of the asset management company (Appendix 1 to
the statute), information added on the performance of the Fund for
2011 (Appendix 2 to the statute), information updated on the total
cost indicators for 2011, and the date on which the statute being
signed was updated.
On the date the changes to the statute came into force the simple
statute of the Fund was replaced by a newly processed document
providing required key information for investors. Such key information for investors was processed in accordance with Commission (EU) Regulation No. 583/2012.
As at 1 February 2013, information on Fund`s 2012 performance
was published within the document Key investors information. (According to the article 23, section 3 of Council Regulation (EC) no.
583/2010, the performance must be updated within the Key investors information up to 35 days after the previous calendar year end.)
The updated text of the Funds statute was approved by the Investment company`s board of directors as at 10 April 2013. The
changes in the statute text related to an update of the list of managed funds, update of the information on the length of professional
experience of Investment company management, addition of information on Fund’s performance and the Fund`s benchmark`s
performance, an update of information on total expense ratio for
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Investiční společnost České spořitelny, a. s., TRENDBOND – otevřený podílový fond, 2013 Annual Report
2012 and update of the date of the signature. These updates were
not subject to preliminary approval from Czech national bank (according to the section 84 (a), subsection 5 of 189/2004 Coll., Act
on collective investment schemes). The shareholders could access
the updated text of the Statute and Key investors information as of
10 April 2013 on http://www.iscs.cz/, at the distributor’s branches
(Ceska sporitelna, a. s.) and at the Investment company seat.
speciﬁcally due to the uncertainty regarding possible asset impairments and future developments on the market. The ﬁnancial
statements have been prepared based on the current best estimates
using all relevant and available information as at the date of the
ﬁnancial statements.
Legislative change
All amounts are stated in thousands of Czech crowns (CZK), unless indicated otherwise.
Act No 240/2013 Coll., Act on Management Companies and Investment Funds became effective as of 19 August 2013. Rules
stated by this act must be implemented by management companies
and investment funds by 22 July 2014. In 2013, the Fund`s management was subject to the rules of the Act No. 189/2004 Coll., Act
on collective investment schemes. The new rules will be applied
as of 2014.
2. Basis of Preparation
The ﬁnancial statements have been prepared on the basis of underlying accounting records maintained in accordance with Accounting Act No. 563/1991 Coll., and applicable regulations, decrees and internal standards in compliance with and in the scope
deﬁned in Czech Finance Ministry Regulation No. 501/2002 of
6 November 2002, as subsequently amended, which sets out the
overall framework for the presentation of the ﬁnancial statements,
and guidelines for the structure and minimum requirements for the
content of the ﬁnancial statements of banks and certain ﬁnancial
institutions, and Czech Accounting Standards for Financial Institutions, which establish the accounting principles and policies.
The basis of preparation and the accounting policies have been
consistently applied during both 2013 and 2012.
The Fund is obliged to comply with the regulatory requirements
of the Act.
The ﬁnancial statements are presented in compliance with general
accounting principles, speciﬁcally the accrual principle, the prudence concept and the going concern assumption.
The ﬁnancial statements contain the balance sheet, proﬁt and loss
account, statement of changes in equity, and notes to the ﬁnancial
statements.
These ﬁnancial statements are unconsolidated.
Explanation Added for Translation into English
These ﬁnancial statements are presented on the basis of accounting
principles and standards generally accepted in the Czech Republic.
Certain accounting practices applied by the Company that conform with generally accepted accounting principles and standards
in the Czech Republic may not conform with generally accepted
accounting principles in other countries.
3. Accounting Policies
Transaction Recognition Date
Purchases and sales of securities are recognised using trade date
accounting provided that the period between the trade date and the
fulﬁlment of the commitment arising from the contract does not
exceed a period typical for the relevant type of transaction.
The transaction recognition date for derivative contracts is:
a) the date upon which the related contract was entered into;
b) the date when fulﬁlment was delivered based on the relevant
contract.
The transaction recognition date can also be the date when money
in circulation is paid or received, the date when foreign currency is
purchased or sold, the date when a payment is made, the date when
ownership is acquired or terminated, when a receivable or payable
arises, changes or ceases to exist, when assets move within an accounting entity, and the date when other matters to be included
in the accounting records occur, or when the documents supporting these other matters are available, or when other matters are
a consequence of internal conditions of the accounting entity and/
or special regulations.
Securities
The presentation of the ﬁnancial statements requires that the
Company make estimates which have an impact on the reported
amounts of assets and liabilities as at the date of the ﬁnancial statements as well as expenses and income in the relevant accounting
period. These estimates are based on information available as at
the date of the ﬁnancial statements and may differ from the actual
results.
As a result of continued market volatility since the start of the
global ﬁnancial crisis, the Fund may be exposed to increased risk,
In accordance with the Fund’s strategy, all securities are classiﬁed
as ‘securities at fair value through proﬁt or loss. During the accounting period, securities are re-measured at fair value on a daily
basis pursuant to the Finance Ministry Regulation No. 194/2011
Coll., on more detailed regulation of certain rules in collective investment (the “Decree”), as amended.
The securities of the Fund are accounted for as securities at fair
value through proﬁt or loss. The fair value of the securities is determined in accordance with the International Financial Reporting
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Investiční společnost České spořitelny, a. s., TRENDBOND – otevřený podílový fond, 2013 Annual Report
Standards with an exception, that an average price between the
most favourable binding offer and demand (MID price) is used
for bonds.
Pursuant to the Regulation, securities are valued at the price quoted
on a public market which is adjusted, as appropriate, to reﬂect the
rules set out in the Regulation. If the market value is unavailable,
the Fund uses a value determined by the Company using valuation models based on discounted future cash ﬂows according to
the yield curve calculated using the Reuters and Kondor+ systems.
Securities are measured at cost upon initial recognition using the
weighted average method. The acquisition cost includes direct
transaction costs related to the acquisition of securities.
Realised capital gains or losses are recorded in the proﬁt and loss
account within ‘Proﬁt or loss from ﬁnancial operations’.
Accrued interest relating to assets is included within the total balance of these assets.
Receivables and Payables
The Fund records receivables arising from its transactions with
securities and other operating receivables at their nominal value,
while receivables from positive fair values of derivatives are recorded at the fair value of the derivatives at the balance sheet date.
Pursuant to the prudence principle, provisions are created based on
the aging of receivables.
The Fund records payables arising from its transactions with securities and operating payables at their nominal value, while payables from negative fair values of derivatives are recorded at the fair
value of the derivatives at the balance sheet date.
Financial Derivatives and Hedging Transactions
In the normal course of business, the Fund enters into hedging
contracts with ﬁnancial derivatives to hedge against interest rate
and foreign currency exposures associated with its transactions on
ﬁnancial markets. The method of fair value hedges is applied to
hedging derivatives.
The Fund designates certain derivatives as hedges provided that
the following criteria are met:
– the Fund has developed a risk management strategy;
– at the inception of the hedge, the hedging relationship is formally documented, the documentation identiﬁes the hedged
item and the hedging instrument, and it deﬁnes the risk that
is being hedged and the approach to establishing whether the
hedge is effective; and
– the hedge is effective, that is, changes in the fair value or cash
ﬂows of the hedged item are almost fully offset by changes in
the fair value or cash ﬂows of the hedging instrument and the
results are within a range of 80 percent to 125 percent.
Nominal values of derivative ﬁnancial instruments are recognised
in the off-balance sheet accounts. Changes in the fair value of derivatives that are designated and qualify as hedges (see above) are
recorded as income or expense. Changes in the fair value of the
hedging derivatives attributable to the risk hedged are recognised
in the same income or expense accounts as differences from revaluation of a hedged instrument.
All ﬁnancial derivatives are recorded as assets when the fair value
is positive and as liabilities when the fair value is negative. Fair
values are derived from valuation models.
Derivatives that are not designated as hedging derivatives are
treated as trading derivatives. These derivatives are measured at
fair value on a daily basis and gains and losses on revaluation are
posted to derivative expense and income accounts.
Certain derivatives are embedded in compound ﬁnancial instruments, which comprise the host instrument and the derivative. Pursuant to the applicable regulations, the Fund recognises changes in
assets and liabilities arising from the movements in rates or prices
of securities or changes in exchange rates through expense and income accounts. Given that the assets of the Fund are valued at fair
value and changes of fair values are reported within expenses and
income from derivatives, embedded derivatives are not accounted
for separately.
Income Tax
Under effective tax regulations, the income tax rate applicable to
mutual funds is 5 percent.
Deferred Tax
Deferred tax is provided using the liability method on all temporary differences between the carrying amount of assets and liabilities reported in the balance sheet and their value for tax purposes.
Deferred tax assets are recognised only up to the amount of probable future taxable income against which the deferred tax asset can
be offset.
Foreign Currency Translations
Foreign currencies are translated using the exchange rate promulgated by the Czech National Bank as at the relevant date. As at the
balance sheet date, assets and liabilities denominated in foreign
currencies are translated on the same basis.
Foreign exchange rate gains and losses from the daily translation
of assets and liabilities in foreign currencies are posted to expense
or income accounts.
Capital Funds
The selling price of participation certiﬁcates is calculated as a proportion of the Fund’s net assets and the relevant number of participation certiﬁcates. Participation certiﬁcates are sold to investors
using the selling price determined on a daily basis.
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Share Premium
Share premium is the difference between the nominal value of all
participation certiﬁcates and their carrying amounts as at the date
of their issue or purchase.
The level of the Fund’s market risk exposure is measured using
the Value at Risk (“VaR”). With effect from 1 August 2006, the
VaR for the Company’s Funds is calculated by the Central Risk
Management Department of Česká spořitelna using the historical
simulation method in the K + KvaR system.
Interest Income and Expense
Interest income and expense are recognised using the accrual principle.
Set out below are relative monthly values of the VaR in percentage
terms for individual types of risks:
Subsequent Events
The impact of events that occurred between the balance sheet date
and the date of the ﬁnancial statements preparation is recognized in
the ﬁnancial statements provided these events provide additional
evidence about conditions that existed at the date of the balance
sheet.
If material events reﬂecting the facts occurring after the balance
sheet date happened between the balance sheet date and the date
of the ﬁnancial statements preparation the consequences of these
events are disclosed in the notes to the ﬁnancial statements but not
recognized in the ﬁnancial statements.
Global VaR
Foreign currency VaR
Interest rate VaR
Equity VaR
Global VaR
Foreign currency VaR
Interest rate VaR
Equity VaR
31 Dec 2013
Average
VaR
4.41%
3.19%
2.05%
0.00%
3.85%
3.23%
1.57%
0.00%
31 Dec 2012
Average
VaR
4.66%
3.41%
2.88%
0.00%
4.75%
3.84%
2.34%
0.00%
4. Risk Management
Credit Risk
In accordance with the Statute and the investment strategy, the
Company establishes rules and policies for selecting investment
instruments such that the overall credit risk proﬁle of allocated investments is consistent with the characteristics of the Fund. New
types of instruments are approved on a case by case basis by the
risk management function together with the speciﬁcation of limits
for positions pertaining to these instruments. Speciﬁc emphasis is
placed on an appropriate rating structure and a relatively detailed
diversiﬁcation of portfolios (especially in relation to interest bearing securities).
Market Risk
The Fund uses a wide range of tools to eliminate risk exposures
attached to its portfolios. Signiﬁcant attention is paid to market
risks. Apart from statutory restrictions, the Fund is subject to a set
of internal limits having a direct impact on the FX exposure, interest rate exposure (the modiﬁed duration range of the Fund), equity
allocation on individual markets according to their volatility, portfolio rating structure (see above), and other characteristics of the
Fund. The relevant limits are appropriately applied to correspond
with the type of the Fund.
Whenever the Fund purchases new types of instruments, these instruments are ﬁrst analysed to assess the potential credit risk, as
well as the market risk that the instruments might bring to or help
eliminate from the portfolio. Subsequently, their appropriateness
and, if appropriate, the acceptable proportion of these instruments
in the portfolio is evaluated.
The average VaR is calculated as average of daily VaR values in
years 2013 and 2012 respectively.
The Fund monitors Value at Risk globally and also broken down to
Foreign Currency VaR, Interest Rate VaR and Equity VaR. Based
on the above values, the Fund identiﬁes critical risk segments. This
identiﬁcation inﬂuences the reinvestment process. The limits set
the maximum acceptable VaR for the Fund.
The Equity VaR also reﬂects the risk related to the holding of mutual funds’ participation certiﬁcates (including funds of money
market and bond funds).
Adherence to all the above limits and their effectiveness is monitored and assessed on an ongoing basis. The limits are reviewed,
if necessary.
The portfolio’s risk of unfavourable development of foreign exchange rates, interest rates, and other market factors is hedged, to
an appropriate extent, by ﬁnancial derivatives. Financial derivatives are traded on the OTC market as this market enables the trading of contracts whose parameters and nature appropriately satisfy
the requirements of a hedge. Portfolios primarily include currency
swaps, currency forwards and interest rate swaps.
Liquidity Risk
Another monitored risk is the liquidity risk. Liquidity risk is a risk
that the Fund will not have enough available resources to meet its
obligations arising from ﬁnancial contracts. Liquidity is monitored
and managed based on expected cash ﬂows, with appropriate ad-
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Investiční společnost České spořitelny, a. s., TRENDBOND – otevřený podílový fond, 2013 Annual Report
justments made to the structure of securities and term placements
portfolios.
Pursuant to the Act, the Company is obliged to repurchase a participation certiﬁcate without undue delay but not later than 15 business days from the date when the repurchase right is claimed. Given that the Fund holds securities traded on foreign stock exchanges
which can be realised within a few days, the Fund’s inability to
meet its obligations due to lack of liquidity is unlikely.
Pursuant to Section 12 of the Collective Investment Act, the Company can suspend issues and purchases of the Fund’s participation
certiﬁcates for a maximum of three months, if necessary due to the
protection of rights or the participation certiﬁcate holders’ interests
protected by law. Issuing and purchasing participation certiﬁcates
can be suspended particularly at the end or beginning of the calendar year, in the event of natural disasters, upon very strong ﬂuctuations on ﬁnancial markets and upon high requirements for the
sales or purchases of participation certiﬁcates provided they could
endanger the Fund’s assets.
The quantitative information about the residual maturity of assets
and liabilities is given in Note 5.18.
5. Additional Information on the Financial Statements
5.1 Receivables from Banks
Receivables from banks
31 Dec 2013 31 Dec 2012
Current accounts
141,267
102,140
Total
141,267
102,140
Balances on current accounts are repayable on demand.
5.2 Securities
Individual types of securities by issuer, number of securities, their market value and interest rate are disclosed in the Portfolio attached to
the annual report. All securities held by the Fund are publicly listed on the Prague Stock Exchange or foreign stock exchanges. Participation
certiﬁcates which are not listed on stock exchanges are purchased and administered by the Company.
Debt securities
31 Dec 2013 31 Dec 2012
Acquisition cost
Market revaluation
Accrued interest income
688,340
(4,985)
13,773
540,276
51,783
10,661
Total
697,128
602,720
Of the aggregate volume of debt securities, debt securities maturing within one year accounted for 2.25 percent in 2013 (2012: 26.81 percent).
Debt securities maturing within more than one year with a ﬁxed coupon accounted for 97.75 percent in 2013 (2012: 73.19 percent).
5.3 Other Assets
Other assets
31 Dec 2013 31 Dec 2012
Financial derivatives – positive fair value
State budget settlement
264
1,274
147
–
Total
1,538
147
5.4 Prepayments and Accrued Income
Prepayments and accrued income
31 Dec 2013 31 Dec 2012
Prepayments – audit fees
–
11
Total
–
11
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Investiční společnost České spořitelny, a. s., TRENDBOND – otevřený podílový fond, 2013 Annual Report
5.5 Equity
The Fund has no share capital. The nominal value of one participation certiﬁcate is CZK 1. The total nominal value of all participation
certiﬁcates is posted to ‘Capital funds’.
Share premium arising from the difference between the nominal and selling values of the participation certiﬁcates is recorded separately.
The Fund accounts for share premium upon the sale of participation certiﬁcates as well as upon their repurchase.
The selling price of the participation certiﬁcate is determined as the share of the Fund’s net assets and the number of issued participation certiﬁcates.
The value of a participation certiﬁcate as at the last trading date in 2013 totalled CZK 1.3449 (2012: CZK 1.3477). This is the most recent
announced value of the participation certiﬁcate for the year, for which purchases and repurchases of the participation certiﬁcates of the Fund
were undertaken.
In line with the Fund’s Statute, the proﬁt for 2013 in the amount of CZK 300 thousand will be transferred to the reinvestment fund within
‘Other funds from proﬁt’.
In line with the Fund’s Statute, the proﬁt for 2012 in the amount of CZK 97,797 thousand was transferred to the reinvestment fund within
‘Other funds from proﬁt’.
5.6 Changes in the Capital Fund
Number of
Nominal
participation
value of
certiﬁcates participation
certiﬁcates
Balance at 31 Dec 2011
Participation certiﬁcates sold
Participation certiﬁcates purchased
Balance at 31 Dec 2012
Participation certiﬁcates sold
Participation certiﬁcates purchased
Balance at 31 Dec 2013
Other Total capital
changes
funds
607,846,971
607,846
1
607,847
62,704,905
(150,677,680)
62,705
(150,678)
–
–
62,705
(150,678)
519,874,196
519,873
1
519,874
462,297,845
(362,202,556)
462,298
(362,203)
–
–
462,298
(362,203)
619,969,485
619,968
1
619,969
5.7 Other Liabilities
Other liabilities
31 Dec 2013 31 Dec 2012
Negative fair values of ﬁnancial derivatives
Payables from participation certiﬁcate holders’ placements
Other liabilities
4,516
67
446
491
102
2,866
Total
5,029
3,459
5.8 Accrued Expenses and Deferred Income
Accrued expenses particularly consist of the unbilled custody fee of CZK 76 thousand related to December 2013 (2012: CZK 64 thousand),
the unbilled management fee of CZK 1,042 thousand related to December 2013 (2012: CZK 876 thousand), the unbilled fee for the local
sub-register administration of CZK 0 thousand related to December 2013 (2012: CZK 8 thousand), and unbilled fee for calculation of NAV
and participation certiﬁcate rate of CZK 3 thousand (2012: CZK 3 thousand).
5.9 Financial Derivatives Designated as Hedging Derivatives
Nominal value of the derivatives
31 Dec 2013
31 Dec 2012
Assets
Liabilities
Assets
Currency swaps
14,169
15,084
14,235
Liabilities
14,330
Total
14,169
15,084
14,235
14,330
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Investiční společnost České spořitelny, a. s., TRENDBOND – otevřený podílový fond, 2013 Annual Report
Open positions of derivatives posted to an off-balance sheet are converted to fair value daily as of 1 January 2011 (up to 31 August 2013
futures were converted monthly; as of 1 September 2013 they are converted on daily basis) and recorded in absolute values.
Fair value of the derivatives
31 Dec 2013
31 Dec 2012
Positive
Negative
Positive
Currency swaps
–
915
–
Negative
95
Total
–
915
–
95
Currency derivatives designated as hedging derivatives are due within one year.
5.10 Financial Derivatives Designated as Trading Derivatives
Nominal value of the derivatives
31 Dec 2013
Currency swaps
Currency forwards
Total
31 Dec 2012
Assets
Liabilities
Assets
Liabilities
60,348
54,426
63,774
52,337
62,267
12,615
62,472
12,659
114,774
116,111
74,882
75,131
Open positions of derivatives posted to an off-balance sheet are converted to fair value daily as of 1 January 2011 (up to 31 August 2013
futures were converted monthly; as of 1 September 2013 they are converted on daily basis) and recorded in absolute values.
Fair value of the derivatives
31 Dec 2013
31 Dec 2012
Positive
Negative
Positive
Negative
Currency swaps
Currency forwards
264
–
3,426
175
147
–
352
44
Total
264
3,601
147
396
2013
2012
Interest on deposits at banks
Interest on debt securities
497
39,121
2,363
34,960
Total
39,618
37,323
2013
2012
Management fees
Custody fees
Commissions and fees from securities trading
Fees paid to central depository
Expenses of administration of the local sub-register – Česká spořitelna
Administration of securities
Other fees and commissions
12,556
921
55
5
90
786
203
10,285
754
6
4
91
663
197
Total
14,616
12,000
Currency derivatives designated as trading derivatives are due within one year.
5.11 Interest Income and Expense
5.12 Fees and Commissions
In compliance with the Statute of the Fund, the management fee paid to the Company by the Fund amounts to 1.50 percent of the average
annual net asset value.
Pursuant to the custody service contract, the Fund pays a custody fee equal to 0.11 percent of its average annual net asset value.
144
Investiční společnost České spořitelny, a. s., TRENDBOND – otevřený podílový fond, 2013 Annual Report
5.13 Proﬁt or Loss from Financial Operations
2013
2012
Proﬁt or loss from securities at fair value
through proﬁt or loss
Proﬁt or loss from ﬁxed term transactions
Proﬁt or loss from FX differences
(19,744)
(4,915)
166
66,382
6,634
2,275
Total
(24,493)
75,291
Proﬁt or loss from securities at fair value through proﬁt or loss primarily comprises the proﬁt or loss from the realised sales of securities,
from payable securities and from the daily valuation of securities at fair value.
Proﬁt or loss from derivatives includes proﬁt or loss on the settlement of ﬁxed term transactions with ﬁnancial instruments and also the
revaluation of open derivatives at fair value.
Proﬁt or loss from FX differences represents the value of realised FX proﬁt or loss from foreign currency accounts and from the settlement
of foreign currency receivables and payables and also gains or losses arising from the revaluation of assets, with the exception of securities,
and liabilities in foreign currency at fair value.
5.14 Administrative Expenses
2013
2012
Audit
193
238
Total
193
238
2013
2012
5.15 Income Tax
The principal income tax components are as follows:
Tax payable – current year
16
2,579
Total income tax
16
2,579
2013
2012
316
–
–
316
–
315
16
–
–
100,376
–
–
100,376
(48,799)
51,577
2,579
–
–
16
2,579
Current income tax – analysis:
Proﬁt (Loss) before tax
Items to be added
Deductible items
Tax base
Loss deduction
Tax base after deduction
Tax (5%) on tax base
Foreign dividends
Tax on foreign dividends
Total tax
5.16 Deferred Tax Asset due to Tax Losses
As at 31 December 2013, no temporary differences exist between the tax bases of assets and liabilities and their carrying amounts for ﬁnancial reporting purposes.
As at 31 December 2012, no temporary differences exist between the tax bases of assets and liabilities and their carrying amounts for ﬁnancial reporting purposes.
145
Investiční společnost České spořitelny, a. s., TRENDBOND – otevřený podílový fond, 2013 Annual Report
5.17 Related Party Transactions
Related parties include Česká spořitelna, a. s. and Investiční společnost České spořitelny, a. s.
2013
2012
Unbilled management fee – Investiční společnost
Unbilled custody fee – Česká spořitelna
Unbilled fee for administration of the local sub–register
Unbilled fee for calculation of NAV and participation certiﬁcate rate
Other payables to related parties
1,042
76
–
3
118
876
64
8
3
161
Total payables to related parties
1,239
1,112
The costs charged to the Fund by Česká spořitelna, a. s. amounted to CZK 2,060 thousand in 2013 (2012: CZK 1,715 thousand), of which
the greatest portion is represented by the custody fee of CZK 921 thousand (2012: CZK 754 thousand). The costs charged by the Company
amounted to CZK 12,556 thousand (2012: CZK 10,285 thousand), which is the annual management fee.
5.18 Liquidity
The following tables show the residual maturity of assets and liabilities broken down by major classes. Given that all securities are traded
on public markets, sales can easily be undertaken within three months.
2013
Assets
Less than
3 months
3 month –
1 year
1 – 5 years Over 5 years
Not
speciﬁed
Total
Receivables from banks
Debt securities
Other assets
Prepayments and accrued income
141,267
8,734
264
–
–
6,933
1,274
–
–
432,958
–
–
–
248,503
–
–
–
–
–
141,267
697,128
1,538
–
Total assets
150,265
8,207
432,958
248,503
–
839,933
Other liabilities
Net assets
Available capital
(6,131)
144,134
(833,781)
(21)
8,186
–
–
432,958
–
–
248,503
–
–
–
–
(6,152)
833,781
(833,781)
Difference
(689,647)
8,186
432,958
248,503
–
–
Less than
3 months
3 month –
1 year
1 – 5 years Over 5 years
Not
speciﬁed
Total
Receivables from banks
Debt securities
Other assets
Prepayments and accrued income
102,140
−
147
−
−
161,589
−
11
−
256,399
−
−
−
184,732
−
−
−
−
−
−
102,140
602,720
147
11
Total assets
102,287
161,600
256,399
184,732
−
705,018
Other liabilities
Net assets
Available capital
(1,831)
100,456
(700,608)
(2,579)
159,021
−
−
256,399
−
−
184,732
−
−
−
−
(4,410)
700,608
(700,608)
Difference
(600,152)
159,021
256,399
184,732
−
−
Liabilities
2012
Assets
Liabilities
146
Investiční společnost České spořitelny, a. s., TRENDBOND – otevřený podílový fond, 2013 Annual Report
5.19 Off-balance Sheet Assets and Liabilities
The Fund’s off-balance sheet accounts include receivables and payables from ﬁxed term transactions and assets provided into custody and
safekeeping. The item ‘Assets provided into custody, administration and safekeeping’ shows foreign and domestic securities administered
by Česká spořitelna, a. s.
5.20 Contingent Assets and Liabilities
The Fund has no assets or liabilities that were not disclosed in the balance sheet or off-balance sheet accounts.
5.21 Subsequent Events
No signiﬁcant events occurred after the date of the ﬁnancial statements, which would have a material impact on the Fund’s ﬁnancial statements.
147
Investiční společnost České spořitelny, a. s., TRENDBOND – otevřený podílový fond, 2013 Annual Report
Portfolio at 31 December 2013
The detail of the portfolio is not part of the fund’s ﬁnal accounts. Figures are stated in CZK.
ISIN
Name of the security
PL0000105441
TRT170615T16
TRT080317T18
TRT150120T16
TRT120122T17
TRT140218T10
HU0000402193
PL0000107264
PL0000106126
PL0000106340
PL0000107314
XS0212694920
PL0000105433
PL0000104543
HU0000402631
HU0000402318
HU0000402375
POLAND GOVERN.BOND 5.5 10/25/19
TURKEY GOVT BOND 10 06/17/15
TURKEY 9 03/08/17
TURKEY 10.5 01/15/20
TURKEY REP 9.5 01/12/22
TURKEY 6.3 02/14/18
HUNGARY GOVERNMENT 5.5 02/12/14C
POLAND GOVERN BOND 4 10/25/23
POLAND GOVERN.BOND 5.25 10/25/20
POLAND GOV.BOND 5 04/25/16
POLAND GOVERN.BOND 3.75 04/25/18
TURKEY REP 5.5 02/16/17
POLAND GOVERN.BOND 5.75 04/25/14
POLAND GOVERN.BOND 5.25 10/25/17
HUNGARY GOVERNMENT 5.5 12/20/18
HUNGARY GOVERNMENT 5.5 02/12/16C
HUNGARY GOVERNMENT 6.75 02/24/17
Amount
Market Price
Market Price
Total
Accrued
Interest
10,000
31,000
60,000
6,000
4,000
20,000
9,000
2,000
4,000
9,000
7,000
500
1,000
9,000
30,000
10,000
25,900
7,161.12
928.43
902.48
949.83
892.70
813.88
925.61
6,429.18
7,089.48
6,884.78
6,657.97
29,560.86
6,672.99
7,029.55
956.66
957.65
992.02
71,611,185.75
28,781,252.50
54,148,563.00
5,699,005.20
3,570,819.35
16,277,625.00
8,330,455.95
12,858,352.05
28,357,904.10
61,963,047.23
46,605,789.83
14,780,429.50
6,672,991.80
63,265,984.20
28,699,779.02
9,576,516.33
25,693,402.47
666,631.64
102,406.16
1,527,317.31
245,091.88
151,749.31
419,189.67
403,103.86
96,964.60
254,532.08
2,035,171.23
1,187,183.22
657,072.95
260,049.66
572,697.18
45,902.10
447,893.18
1,370,632.79
486,893,103.28
10,443,588.82
3,500
2,000
2,000
3,000
3,500
1,000
2,000
11,629.50
11,193.10
11,090.00
11,892.60
12,890.50
10,477.50
9,960.00
40,703,250.00
22,386,200.00
22,180,000.00
35,677,800.00
45,116,750.00
10,477,500.00
19,920,000.00
590,333.33
225,000.00
575,555.56
423,000.00
1,191,458.33
273,388.89
50,833.33
196,461,500.00
683,354,603.28
3,329,569.44
13,773,158.26
Foreign government bonds
CZ0001000822
CZ0001001317
CZ0001001903
CZ0001001945
CZ0001002547
CZ0001001143
CZ0001003834
GOVERNMENT BOND 4.6 08/18/18
GOVERNMENT BOND 3.75 09/12/20
GOVERNMENT BOND 4 04/11/17
GOVERNMENT BOND 4.7 09/12/22
GOVERNMENT BOND 5.7 05/25/24
GOVERNMENT BOND 3.8 04/11/15
GOVERNMENT BOND 1.5 10/29/19
Local government bonds after 1 January 1998
Total
148
Independent Auditor’s Report
to the Participation certiﬁcate holders of Investiční společnost České spořitelny, a. s.,
ČS korporátní dluhopisový – otevřený podílový fond
We have audited the accompanying ﬁnancial statements of Investiční společnost České spořitelny, a. s., ČS korporátní dluhopisový –
otevřený podílový fond, which comprise the balance sheet as at 31 December 2013, and the income statement and statement of changes in
equity for the year then ended, and a summary of signiﬁcant accounting policies and other explanatory information. For details of Investiční
společnost České spořitelny, a. s., ČS korporátní dluhopisový – otevřený podílový fond, see Note 1 to the ﬁnancial statements.
Management’s Responsibility for the Financial Statements
Management of Investiční společnost České spořitelny, a. s., is responsible for the preparation and fair presentation of these ﬁnancial statements in accordance with accounting principles generally accepted in the Czech Republic, and for such internal control as management determines is necessary to enable the preparation of ﬁnancial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these ﬁnancial statements based on our audit. We conducted our audit in accordance with the
Act on Auditors and International Standards on Auditing as amended by implementation guidance of the Chamber of Auditors of the Czech
Republic. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
whether the ﬁnancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the ﬁnancial statements. The procedures selected depend on the auditor’s judgment, including an assessment of the risks of material misstatement of the ﬁnancial statements,
whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation
and fair presentation of the ﬁnancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the ﬁnancial statements.
We believe that the audit evidence we have obtained is sufﬁcient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the ﬁnancial statements present fairly, in all material respects, the ﬁnancial position of Investiční společnost České
spořitelny, a. s., ČS korporátní dluhopisový – otevřený podílový fond, as at 31 December 2013, and its ﬁnancial performance for the year
then ended in accordance with accounting principles generally accepted in the Czech Republic.
31 March 2014
Prague, Czech Republic
Ernst & Young Audit, s.r.o.
License No. 401
Represented by partner
Roman Hauptﬂeisch
Auditor, Licence no. 2009
A member ﬁrm of Ernst & Young Global Limited,
Ernst & Young Audit, s. r. o. with its registred ofﬁce at Na Florenci 2116/15, 110 00 Prague 1 – Nové Město,
has been incorporated in the Commercial Register administered by the Municipal Court in Prague,
Section C, entry No. 88504, under Identiﬁcation No. 26704153.
149
Investiční společnost České spořitelny, a. s., ČS korporátní dluhopisový – otevřený podílový fond, 2013 Annual Report
Balance Sheet
at 31 December 2013
(in thousands CZK)
Line
Current
Previous
01
02
06
10
11
12
15
16
18
21
145,267
130,841
14,426
1,474,864
29,258
1,445,606
7,618
7,452
166
0
88,132
88,132
0
833,642
27,456
806,186
12,832
12,832
0
11
22
1,627,749
934,617
29
30
32
33
34
39
40
41
46
47
56,385
55,384
0
1,001
2,112
336,512
194,945
1,071,118
(48,105)
14,782
18,442
16,019
1,887
536
1,238
158,377
122,965
609,720
(48,105)
71,980
Total Liabilities
48
1,627,749
934,617
of which: Equity
49
1,569,252
914,937
3 Receivables from banks and credit unions
of which: a/ on demand: aa/ current accounts
ae/ collaterals
5 Debt securities
of which: a/ issued by the government
b/ issued by other entities
11 Other assets
a/ derivatives
c/ receivables from taxes
13 Prepayments and accrued income
Total Assets
4 Other liabilities
a/ derivatives
c/ liabilities from taxes
d/ other liabilities
5 Deferred income and accrued expenses
9 Share premium
10 Reserve funds and other funds from proﬁt
12 Capital funds
14 Retained earnings or accumulated losses from previous periods
15 Proﬁt or loss for the accounting period
150
Investiční společnost České spořitelny, a. s., ČS korporátní dluhopisový – otevřený podílový fond, 2013 Annual Report
Off Balance Sheet Accounts
at 31 December 2013
(in thousands CZK)
4 Amounts due from ﬁxed term transactions
a/ with interest instruments
b/ with currency instruments
7 Assets provided into custody, administration and safekeeping
of which: securities
12 Amounts owed from ﬁxed term transactions
a/ with interest instruments
b/ with currency instruments
Line
Current
Previous
52
53
54
60
61
64
65
66
2,227,477
764,385
1,463,092
1,474,864
1,474,864
2,275,409
770,015
1,505,394
1,327,619
435,956
891,663
833,642
833,642
1,330,806
451,607
879,199
151
Investiční společnost České spořitelny, a. s., ČS korporátní dluhopisový – otevřený podílový fond, 2013 Annual Report
Proﬁt and Loss Account
for the year ended 31 December 2013
(in thousands CZK)
1 Interest income and similar income
of which: a/ interest income from bonds
d/ interest income from collaterals
5 Commission and fee expenses
a/ fees and commissions from securities trading
b/ management fee
c/ custody fee
d/ other ﬁnancial expenses
6 Proﬁt or loss on ﬁnancial operations
a/ proﬁt or loss on transactions with securities
b/ proﬁt or loss on foreign exchange transactions
c/ proﬁt or loss on ﬁxed term transactions and options
9 Administrative expenses
of which: b/ other administrative expenses: ba/ audit
19 Ordinary proﬁt or loss for the accounting period before tax
23 Income tax
24 Proﬁt or loss for the accounting period after tax
Line
Current
Previous
1
2
5
10
11
12
13
14
15
16
17
18
21
22
26
30
31
81,016
80,973
5
23,818
(27)
20,994
1,540
1,311
(41,429)
10,240
1,374
(53,043)
209
209
15,560
778
14,782
38,219
37,986
0
11,350
(10)
9,848
722
790
47,235
31,182
3,343
12,710
237
237
73,867
1,887
71,980
152
Investiční společnost České spořitelny, a. s., ČS korporátní dluhopisový – otevřený podílový fond, 2013 Annual Report
Statement of Changes in Equity
for the year ended 31 December 2013
(in thousands CZK)
1 Share premium
opening balance
issued unit certiﬁcates
repurchase of unit certiﬁcates
other changes
closing balance
2 Retained earnings
opening balance
transfers to funds
other changes
closing balance
3 Capital funds
opening balance
issued unit certiﬁcates
repurchase of unit certiﬁcates
transfers to funds
other changes
closing balance
4 Gains or losses from revaluation
opening balance
foreign exchange rate differences and gains or losses from revaluation not
included in proﬁt (loss)
closing balance
5 Retained earnings or accumulated losses from previous periods
opening balance
other changes
closing balance
6 Proﬁt (loss) for the current period after taxes
opening balance
proﬁt (loss)
transfers to funds, dividends
closing balance
7 Total
Line
Current
Previous
158,377
287,315
(109,180)
0
336,512
76,997
123,748
(42,368)
0
158,377
122,965
71,980
0
194,945
149,403
0
(26,438)
122,965
609,720
743,791
(282,393)
0
0
1,071,118
375,364
369,997
(135,641)
0
0
609,720
0
0
0
0
0
0
(48,105)
0
(48,105)
(48,105)
0
(48,105)
71,980
14,782
(71,980)
14,782
(26,439)
71,980
26,439
71,980
1,569,252
914,937
153
Investiční společnost České spořitelny, a. s., ČS korporátní dluhopisový – otevřený podílový fond, 2013 Annual Report
Notes to the Financial Statements
for the year ended 31 December 2013
1. Organisation and Description of
Business
Formation and Description of the Business
Investiční společnost České spořitelny, a. s., ČS korporátní dluhopisový – otevřený podílový fond (hereinafter the “Fund” or
“ISČS, a. s. ČS korporátní dluhopisový – OPF”) is an accounting
unit without legal entity status, formed by Investiční společnost
České spořitelny, a. s. (hereinafter the “Company”) in compliance
with the Investment Companies and Funds Act No. 248/1992 Coll.
Based on the Company’s request dated 22 December 2003, the
Securities Commission approved the formation of a fund entitled
Investiční společnost České spořitelny, a. s. – ČS korporátní dluhopisový otevřený podílový fond. The Fund commenced its activities
on 1 April 2004.
The following change in the Fund’s name was approved by the
Czech National Bank’s decision No. 2009/2907/570 dated 27 April
2009, which came into legal effect on 15 May 2009: Investiční
společnost České spořitelny, a. s., ČS korporátní dluhopisový –
otevřený podílový fond.
Pursuant to a concluded contract, Česká spořitelna, a. s. acts as the
depository of the Fund.
The Fund is managed by the Company. In compliance with the
Collective Investment Act No. 189/2004 Coll. (hereinafter the
“Act”), the Company is responsible for the management of the assets of the Fund, which involves the administration and handling
of the assets.
The Fund is a standard fund in compliance with the Act and meets
the requirements of EU legislation.
According to the classiﬁcation binding for the members of the
Capital Market Association (hereinafter the “AKAT CR”) as at the
date of the approval of this Statute, the Fund can be deﬁned as
a bond fund.
Registered Ofﬁce
Investiční společnost České spořitelny, a. s.
ČS korporátní dluhopisový – otevřený podílový fond
Prague 6, Evropská 2690/17
No restrictions are placed on the number of participation certiﬁcates for issue and the period for which the Fund is established.
Pursuant to Section 12 of the Act, the Company can suspend issues
and purchases of the Fund’s participation certiﬁcates for a maximum of three months in compliance with the Act.
The Company is obliged to repurchase a participation certiﬁcate
without undue delay but not later than 15 business days from the
date when the repurchase right is claimed if the purchase of a participation certiﬁcate is not suspended.
The participation certiﬁcates of the Fund are available both in the
Czech Republic and in other EU member countries.
Investment Policy of the Fund
The objective of the Fund’s investment policy is to appreciate participation certiﬁcates of the participation certiﬁcate holders in the
long-term by investing in bonds of corporate, municipality, bank
and state issuers from developing countries in Europe, the Middle East and Africa. The aim is achieved by investing in a widely
diversiﬁed portfolio of securities with interest income and active
management of interest rate risk. The Fund invests in the bonds of
the issuers referred to above, traded on the public markets of the
member states of the Organisation for Economic Cooperation and
Development. Foreign currency risk is hedged by standard hedging transactions.
The portfolio of the Fund predominantly includes bonds with ﬁxed
and variable coupon, denominated in EUR and USD, the issuers
of which are companies and state institutions from EMEA region
countries (Eastern and Central Europe, Middle East and Africa).
The Fund also invests in treasury bills, bank deposits, or bonds
with embedded derivatives.
The portfolio of the Fund may also be expanded by purchasing
bonds exchangeable for shares or with the option to subscribe for
shares.
The Fund may invest in securities of collective investment funds,
if such a collective investment fund invests in the same types of assets, distributes the risk connected to investments and meets other
obligations as set by the Act.
The limits of the Fund are adhered to on the basis of the Act, or
they are regulated in the Fund’s Statute in compliance with the Act.
Principal Business
The Company collects funds from individuals and legal entities by
issuing participation certiﬁcates with the purpose of their collective investment on local and foreign ﬁnancial markets.
The Fund uses ﬁnancial derivatives to hedge against currency and
interest rate exposures.
154
Investiční společnost České spořitelny, a. s., ČS korporátní dluhopisový – otevřený podílový fond, 2013 Annual Report
The Company can use ﬁnancial derivatives to effectively manage
the Fund’s assets. Efﬁcient asset management represents transactions for the purpose of decreasing risk, decreasing costs or achieving sufﬁcient income for the Fund provided that the risk is demonstrably low. The exposure from these transactions must be fully
covered by the Fund’s assets so that liabilities arising from these
transactions are fulﬁlled.
Management Policy
The proﬁt/(loss) is based on the difference between income and
expenses related to the management of the Fund’s assets.
The generated proﬁt has been fully retained by the Fund, in the reinvestment fund, as a source for further investments, and increases
the participation certiﬁcate value. In the event that the Fund incurs
a loss from the Company’s management of assets, the loss is covered from the reinvestment fund which was created from earnings
brought forward. If the reinvestment fund is not sufﬁcient, the loss
must be covered by a reduction in the Fund’s capital fund.
The Fund’s assets must not be used for the provision of loans, borrowings or gifts, to secure a third party’s obligation or to settle
a payable which is not related to the Fund’s management. This
provision does not affect Sections 26 and 27 of the Collective Investment Act.
When managing the Fund’s assets, contracts for the sale of securities and money market instruments, securities issued by other collective investment funds and ﬁnancial derivatives which are not
owned by the Fund at the moment of concluding the respective
contracts, may not be entered into.
The Company can accept loans and borrowings for the maximum
of six months when managing the Fund’s assets, to cover temporary needs related to the management of the Fund’s assets or
purchases of participation certiﬁcates. The volume of the received
loans and borrowings is not allowed to exceed 10 percent of the
value of the Fund’s assets.
Change in the Statute
Czech National Bank Resolution No. 2012/4692/570, dated 18
May 2012, which came into force on 5 June 2012: The changes to
the Funds statute related mainly to the duty of the asset investment
company to ensure that its statute is in accordance with the amendment to Act 189/2004 Coll., on collective investments (as ensuing
from the changes made by Act 188/2011 Coll.) and Decree No.
193/2011 Coll., on the minimum requisites of the statute and on
the conditions for the use of the name Short-Term Money Market
Fund and Money Market Fund. Investment objectives, the method
of investing and the risk proﬁle of the Fund have not been changed
in the amendments referred to above.
Along with the change made to the statute, information was updated as to the list of funds managed by the Company (Article II
Paragraph 8 of the statute), in particular information on the manag-
ing parties of the asset management company (Appendix 1 to the
statute), information added on the performance of the mutual fund
for 2011 (Appendix 2 to the statute), information updated on the
total cost indicators for 2011, and the date on which the statute being signed was updated.
On the date the changes to the statute came into force the simple
statute of the Fund was replaced by a newly processed document
providing required key information for investors. Such key information for investors was processed in accordance with Commission (EU) Regulation No. 583/2012.
As at 1 February 2013, information on Fund`s 2012 performance
was published within the document Key investors information.
(According to the article 23, section 3 of Council Regulation (EC)
no. 583/2010, the performance must be updated within the Key investors information up to 35 days after the previous calendar year
end.)
The updated text of the Funds statute was approved by the Investment company`s board of directors as at 10 April 2013. The
changes in the statute text related to an update of the list of managed funds, update of the information on the length of professional
experience of Investment company management, addition of information on Fund’s performance and the Fund`s benchmark`s
performance, an update of information on total expense ratio for
2012 and update of the date of the signature. These updates were
not subject to preliminary approval from Czech national bank (according to the section 84 (a), subsection 5 of 189/2004 Coll. Act on
collective investment. The shareholders could access the updated
text of the Statute and Key investors information as of 10 April
2013 on http://www.iscs.cz/, at the distributor’s branches (Ceska
sporitelna, a. s.) and at the Investment company seat.
Legislative change
Act No 240/2013 Coll., Act on Management Companies and Investment Funds became effective as of 19 August 2013. Rules
stated by this act must be implemented by management companies
and investment funds by 22 July 2014. In 2013, the Fund`s management was subject to the rules of the Act No. 189/2004 Coll.,
On collective investment schemes. The new rules will be applied
as of 2014.
2. Basis of Preparation
The ﬁnancial statements have been prepared on the basis of underlying accounting records maintained in accordance with Accounting Act No. 563/1991 Coll., and applicable regulations, decrees and internal standards in compliance with and in the scope
deﬁned in Czech Finance Ministry Regulation No. 501/2002 of
6 November 2002, as subsequently amended, which sets out the
overall framework for the presentation of the ﬁnancial statements,
and guidelines for the structure and minimum requirements for the
content of the ﬁnancial statements of banks and certain ﬁnancial
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Investiční společnost České spořitelny, a. s., ČS korporátní dluhopisový – otevřený podílový fond, 2013 Annual Report
institutions, and Czech Accounting Standards for Financial Institutions, which establish the accounting principles and policies.
The basis of preparation and the accounting policies have been
consistently applied during both 2013 and 2012.
The Fund is obliged to comply with the regulatory requirements
of the Act.
The ﬁnancial statements are based on the accrual principle, that is,
transactions and other events are recognised in the accounting period in which they occur, regardless of when the related monetary
ﬂow arises. The ﬁnancial statements are presented in compliance
with general accounting principles, speciﬁcally the accrual principle, the prudence concept and the going concern assumption.
The ﬁnancial statements contain the balance sheet, proﬁt and loss
account, statement of changes in equity, and notes to the ﬁnancial
statements.
The presentation of the ﬁnancial statements requires that the
Company makes estimates which have an impact on the reported
amounts of assets and liabilities as at the date of the ﬁnancial statements as well as expenses and income in the relevant accounting
period. These estimates are based on information available as at
the date of the ﬁnancial statements and may differ from the actual
results.
As a result of continued market volatility since the start of the
global ﬁnancial crisis, the Fund may be exposed to increased risk,
speciﬁcally due to the uncertainty regarding possible asset impairments and future developments on the market. The ﬁnancial
statements have been prepared based on the current best estimates
using all relevant and available information as at the date of the
ﬁnancial statements.
The transaction recognition date for derivative contracts is:
a) the date upon which the related contract was entered into;
b) the date when fulﬁlment was delivered based on the relevant
contract.
The transaction recognition date can also be the date when money
in circulation is paid or received, the date when foreign currency is
purchased or sold, the date when a payment is made, the date when
ownership is acquired or terminated, when a receivable or payable
arises, changes or ceases to exist, when assets move within an accounting entity, and the date when other matters to be included
in the accounting records occur, or when the documents supporting these other matters are available, or when other matters are
a consequence of internal conditions of the accounting entity and/
or special regulations.
Securities
In accordance with the Fund’s strategy, all securities are classiﬁed
as securities at fair value through proﬁt or loss. During the accounting period, securities are re-measured at fair value on a daily
basis pursuant to the Finance Ministry Regulation No. 194/2011
Coll., on more detailed regulation of certain rules in collective investment (the “Decree”), as amended.
The securities of the Fund are accounted for as securities at fair
value through proﬁt or loss. The fair value of the securities is determined in accordance with the International Financial Reporting
Standards with an exception, that an average price between the
most favourable binding offer and demand (MID price) is used for.
Pursuant to the Regulation, securities are valued at the price quoted
on a public market which is adjusted, as appropriate, to reﬂect the
rules set out in the Regulation. If the market value is unavailable,
the Fund uses a value determined by the Company using valuation models based on discounted future cash ﬂows according to
the yield curve calculated using the Reuters and Kondor+ systems.
These ﬁnancial statements are unconsolidated.
All amounts are stated in thousands of Czech crowns (CZK), unless indicated otherwise.
Explanation Added for Translation into English
These ﬁnancial statements are presented on the basis of accounting
principles and standards generally accepted in the Czech Republic.
Certain accounting practices applied by the Company that conform with generally accepted accounting principles and standards
in the Czech Republic may not conform with generally accepted
accounting principles in other countries.
3. Accounting Policies
Purchases and sales of securities are recognised using trade date
accounting provided that the period between the trade date and the
fulﬁlment of the commitment arising from the contract does not
exceed a period typical for the relevant type of transaction.
Securities are measured at cost upon initial recognition. The acquisition cost includes direct transaction costs related to the acquisition of securities.
Realised capital gains or losses are recorded in the proﬁt and loss
account within ‘Proﬁt or loss from ﬁnancial operations’.
Accrued interest relating to assets is included within the total balance of these assets.
Receivables and Payables
The Fund records receivables arising from its transactions with
securities and other operating receivables at their nominal value,
while receivables from positive fair values of derivatives are recorded at the fair value of the derivatives at the balance sheet date.
Pursuant to the prudence principle, provisions are created based on
the aging of receivables.
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The Fund records payables arising from its transactions with securities and operating payables at their nominal value, while payables from negative fair values of derivatives are recorded at the fair
value of the derivatives at the balance sheet date.
Financial Derivatives and Hedging Transactions
In the normal course of business, the Fund enters into hedging
contracts with ﬁnancial derivatives to hedge against interest rate
and foreign currency exposures associated with its transactions on
ﬁnancial markets. The method of fair value hedges is applied to
hedging derivatives.
The Fund designates certain derivatives as hedges provided that
the following criteria are met:
– the Fund has developed a risk management strategy;
– at the inception of the hedge, the hedging relationship is formally documented, the documentation identiﬁes the hedged
item and the hedging instrument, and it deﬁnes the risk that
is being hedged and the approach to establishing whether the
hedge is effective; and
– the hedge is effective, that is, changes in the fair value or cash
ﬂows of the hedged item are almost fully offset by changes in
the fair value or cash ﬂows of the hedging instrument and the
results are within a range of 80 percent to 125 percent.
Deferred Tax
Deferred tax is provided using the liability method on all temporary differences between the carrying amount of assets and liabilities reported in the balance sheet and their value for tax purposes.
Deferred tax assets are recognised only up to the amount of probable future taxable income against which the deferred tax asset can
be offset.
Foreign Currency Translation
Foreign currencies are translated using the exchange rate promulgated by the Czech National Bank as at the relevant date. As at the
balance sheet date, assets and liabilities denominated in foreign
currencies are translated on the same basis.
Foreign exchange rate gains and losses from the daily translation
of assets and liabilities in foreign currencies are posted to expense
or income accounts.
Capital Funds
The selling price of participation certiﬁcates is calculated as a proportion of the Fund’s net assets and the relevant number of participation certiﬁcates. Participation certiﬁcates are sold to investors
using the selling price determined on a daily basis.
Share Premium
Nominal values of derivative ﬁnancial instruments are recognised
in the off-balance sheet accounts. Changes in the fair value of derivatives that are designated and qualify as hedges (see above) are
recorded as income or expense. Changes in the fair value of the
hedging derivatives attributable to the risk hedged are recognised
in the same income or expense accounts as differences from revaluation of a hedged instrument.
Share premium is the difference between the nominal value of all
participation certiﬁcates and their carrying amounts as at the date
of their issue or purchase.
All ﬁnancial derivatives are recorded as assets when the fair value
is positive and as liabilities when the fair value is negative. Fair
values are derived from valuation models.
Subsequent Events
Derivatives that are not designated as hedging derivatives are
treated as trading derivatives. These derivatives are measured at
fair value on a daily basis and gains and losses on revaluation are
posted to derivative expense and income accounts.
Certain derivatives are embedded in compound ﬁnancial instruments, which comprise the host instrument and the derivative. Pursuant to the applicable regulations, the Fund recognises changes in
assets and liabilities arising from the movements in rates or prices
of securities or changes in exchange rates through expense and income accounts. Given that the assets of the Fund are valued at fair
value and changes of fair values are reported within expenses and
income from derivatives, embedded derivatives are not accounted
for separately.
Income Tax
Under effective tax regulations, the income tax rate applicable to
mutual funds is 5 percent.
Interest Income and Expense
Interest income and expense are recognised using the accrual principle.
The impact of events that occurred between the balance sheet date
and the date of the ﬁnancial statements preparation is recognized in
the ﬁnancial statements provided these events provide additional
evidence about conditions that existed at the date of the balance
sheet.
If material events reﬂecting the facts occurring after the balance
sheet date happened between the balance sheet date and the date
of the ﬁnancial statements preparation the consequences of these
events are disclosed in the notes to the ﬁnancial statements but not
recognized in the ﬁnancial statements.
4. Risk Management
Credit Risk
In accordance with the Statute and the investment strategy, the
Company establishes rules and policies for selecting investment
instruments such that the overall credit risk proﬁle of allocated investments is consistent with the characteristics of the Fund. New
types of instruments are approved on a case by case basis by the
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Investiční společnost České spořitelny, a. s., ČS korporátní dluhopisový – otevřený podílový fond, 2013 Annual Report
risk management function together with the speciﬁcation of limits
for positions pertaining to these instruments. Speciﬁc emphasis is
placed on an appropriate rating structure and a relatively detailed
diversiﬁcation of portfolios (especially in relation to interest bearing securities).
The Fund monitors Value at Risk globally and also broken down to
Foreign Currency VaR, Interest Rate VaR and Equity VaR. Based
on the above values, the Fund identiﬁes critical risk segments. This
identiﬁcation inﬂuences the reinvestment process. The limits set
the maximum acceptable VaR for the Fund.
Market Risk
The Equity VaR also reﬂects the risk related to the holding of mutual funds’ participation certiﬁcates (including funds of money
market and bond funds).
The Fund uses a wide range of tools to eliminate risk exposures
attached to its portfolios. Signiﬁcant attention is paid to market
risks. Apart from statutory restrictions, the Fund is subject to a set
of internal limits having a direct impact on the FX exposure, interest rate exposure (the modiﬁed duration range of the Fund), equity
allocation on individual markets according to their volatility, portfolio rating structure (see above), and other characteristics of the
Fund. The relevant limits are appropriately applied to correspond
with the type of the Fund.
Whenever the Fund purchases new types of instruments, these instruments are ﬁrst analysed to assess the potential credit risk, as
well as the market risk that the instruments might bring to or help
eliminate from the portfolio. Subsequently, their appropriateness
and, if appropriate, the acceptable proportion of these instruments
in the portfolio is evaluated.
The level of the Fund’s market risk exposure is measured using
the Value at Risk (“VaR”). With effect from 1 August 2006, the
VaR for the Company’s Funds is calculated by the Central Risk
Management Department of Česká spořitelna using the historical
simulation method in the K + KvaR system.
Set out below are relative monthly values of the VaR in percentage
terms for individual types of risks:
Global VaR
Foreign currency VaR
Interest rate VaR
Global VaR
Foreign currency VaR
Interest rate VaR
31 Dec 2013
Average
VaR
1.36%
0.10%
1.34%
1.21%
0.22%
1.22%
31 Dec 2012
Average
VaR
0.98%
0.15%
1.01%
1.25%
0.25%
1.26%
The average VaR is calculated as average of daily VaR values in
years 2013 and 2012 respectively.
Adherence to all the above limits and their effectiveness is monitored and assessed on an ongoing basis. The limits are reviewed,
if necessary.
The portfolio’s risk of unfavourable development of foreign exchange rates, interest rates, and other market factors is hedged, to
an appropriate extent, by ﬁnancial derivatives. Financial derivatives are traded on the OTC market as this market enables the trading of contracts whose parameters and nature appropriately satisfy
the requirements of a hedge. Portfolios primarily include currency
and interest rate swaps.
Liquidity Risk
Another monitored risk is the liquidity risk. Liquidity risk is a risk
that the Fund will not have enough available resources to meet its
obligations arising from ﬁnancial contracts. Liquidity is monitored
and managed based on expected cash ﬂows, with appropriate adjustments made to the structure of securities and term placements
portfolios.
Pursuant to the Act, the Company is obliged to repurchase a participation certiﬁcate without undue delay but not later than 15 business days from the date when the repurchase right is claimed. Given that the Fund holds securities traded on foreign stock exchanges
which can be realised within a few days, the Fund’s inability to
meet its obligations due to lack of liquidity is unlikely.
Pursuant to Section 12 of the Collective Investment Act, the Company can suspend issues and purchases of the Fund’s participation
certiﬁcates for a maximum of three months, if necessary due to the
protection of rights or the participation certiﬁcate holders’ interests
protected by law. Issuing and purchasing participation certiﬁcates
can be suspended particularly at the end or beginning of the calendar year, in the event of natural disasters, upon very strong ﬂuctuations on ﬁnancial markets and upon high requirements for the
sales or purchases of participation certiﬁcates provided they could
endanger the Fund’s assets.
The quantitative information about the residual maturity of assets
and liabilities is given in Note 5.17.
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Investiční společnost České spořitelny, a. s., ČS korporátní dluhopisový – otevřený podílový fond, 2013 Annual Report
5. Additional Information on the Financial Statements
5.1 Receivables from Banks
Receivables from banks
31 Dec 2013 31 Dec 2012
Current accounts
145,267
88,132
Total
145,267
88,132
Balances on current accounts are repayable on demand.
5.2 Securities
Individual types of securities by issuer, number of securities, their market value and interest rate are disclosed in the Portfolio attached to
the annual report. All securities held by the Fund are publicly listed on the Prague Stock Exchange or foreign stock exchanges. Participation
certiﬁcates which are not listed on stock exchanges are purchased and administered by the Company.
Debt securities
31 Dec 2013 31 Dec 2012
Acquisition cost
Market revaluation
Accrued interest income
1,436,615
14,962
23,287
786,469
34,872
12,301
Total
1,474,864
833,642
Of the aggregate volume of debt securities, debt securities maturing within one year accounted for 2.79 percent in 2013 (2012: 3.85 percent).
Of the aggregate volume of debt securities, debt securities maturing within more than one year with a variable coupon accounted for 3.03
percent in 2013 (2012: 3.29 percent).
Debt securities maturing within more than one year with a ﬁxed coupon accounted for 94.18 percent in 2013 (2012: 92.86 percent).
5.3 Other Assets
Other assets
31 Dec 2013 31 Dec 2012
Financial derivatives – positive fair value
Receivables – matured bonds + coupons
7,452
166
12,832
–
Total
7,618
12,832
5.4 Prepayments and Accrued Income
Prepayments and accrued income
31 Dec 2013 31 Dec 2012
Prepayments – audit fees
–
11
Total
–
11
5.5 Equity
The Fund has no share capital. The nominal value of one participation certiﬁcate is CZK 1. The total nominal value of all participation
certiﬁcates is posted to ‘Capital funds’.
Share premium arising from the difference between the nominal and selling values of the participation certiﬁcates is recorded separately.
The Fund accounts for share premium upon the sale of participation certiﬁcates as well as upon their repurchase. The selling price of the
participation certiﬁcate is determined as the share of the Fund’s net assets and the number of issued participation certiﬁcates.
The value of a participation certiﬁcate as at the last trading date in 2013 totalled CZK 1.3941 (2011: CZK 1.3774). This is the most recent
announced value of the participation certiﬁcate for the year, for which purchases and repurchases of the participation certiﬁcates of the Fund
were undertaken. This value is at least different from the carrying value of participation certiﬁcate as at 31 December 2013 due to the additional booking of some items during the ﬁnancial statement.
In line with the Fund’s Statute, the proﬁt for 2013 amounting to CZK 14,782 thousand will be transferred to the reinvestment fund within
‘Other funds from proﬁt’
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Investiční společnost České spořitelny, a. s., ČS korporátní dluhopisový – otevřený podílový fond, 2013 Annual Report
In line with the Fund’s Statute, the proﬁt for 2012 amounting to CZK 71,980 thousand was transferred to the reinvestment fund within
‘Other funds from proﬁt’
5.6 Changes in the Capital Fund
Number of
Nominal
participation
value of
certiﬁcates participation
certiﬁcates
Balance at 31 Dec 2011
Participation certiﬁcates sold
Participation certiﬁcates purchased
Balance at 31 Dec 2012
Participation certiﬁcates sold
Participation certiﬁcates purchased
Balance at 31 Dec 2013
Use of fund Total capital
to cover
funds
losses
429,899,725
429,900
(54,536)
375,364
369,996,697
(135,640,575)
369,997
(135,641)
–
–
369,997
(135,641)
664,255,847
664,256
(54,536)
609,720
743,790,640
(282,392,546)
743,791
(282,393)
–
–
743,791
(282,393)
1,125,653,941
1,125,654
(54,536)
1,071,118
5.7 Other Liabilities
Other liabilities
31 Dec 2013 31 Dec 2012
Negative fair values of ﬁnancial derivatives
Payables from participation certiﬁcate holders’ placements
State budget settlement
Other liabilities
55,384
774
–
227
16,019
221
1,887
315
Total
56,385
18,442
5.8 Accrued Expenses and Deferred Income
Accrued expenses consist of the unbilled custody fee of CZK 144 thousand related to December 2013 (2012: CZK 83 thousand), the unbilled management fee of CZK 1,962 thousand related to December 2013 (2012: CZK 1,144 thousand), the unbilled fee for the local subregister administration of CZK 9 thousand related to December 2013 (2012: CZK 7 thousand) and the unbilled fee for calculation of net
assets value and participation certiﬁcate rate of CZK 6 thousand (2012: CZK 4 thousand).
5.9 Financial Derivatives Designated as Hedging Derivatives
Nominal value of the derivatives
31 Dec 2013
31 Dec 2012
Assets
Liabilities
Assets
Currency swaps
917,750
946,790
781,274
Liabilities
769,696
Total
917,750
946,790
781,274
769,696
Open positions of derivatives posted to an off-balance sheet are converted to fair value daily as of 1 January 2011 (up to 31 August 2013
futures were converted monthly; as of 1 September 2013 they are converted on daily basis) and recorded in absolute values.
Fair value of the derivatives
31 Dec 2013
31 Dec 2012
Positive
Negative
Positive
Currency swaps
2,117
31,157
11,946
Negative
368
Total
2,117
31,157
11,946
368
Currency derivatives are due within one year.
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Investiční společnost České spořitelny, a. s., ČS korporátní dluhopisový – otevřený podílový fond, 2013 Annual Report
5.10 Financial Derivatives Designated as Trading Derivatives
Nominal value of the derivatives
31 Dec 2013
Currency swaps
Interest rate swaps
Total
31 Dec 2012
Assets
Liabilities
Assets
545,342
764,385
558,604
770,015
110,389
435,956
Liabilities
109,503
451,607
1,309,727
1,328,619
546,345
561,110
Open positions of derivatives posted to an off-balance sheet are converted to fair value daily as of 1 January 2011 (up to 31 August 2013
futures were converted monthly; as of 1 September 2013 they are converted on daily basis) and recorded in absolute values.
Fair value of the derivatives
31 Dec 2013
31 Dec 2012
Positive
Negative
Positive
Negative
Currency swaps
Interest rate swaps
1,525
3,810
14,787
9,440
886
–
–
15,651
Total
5,335
24,227
886
15,651
Interest rate derivatives are due within four years. Currency derivatives are due within one year.
5.11 Interest Income
31 Dec 2013 31 Dec 2012
Interest on deposits
Interest on debt securities
43
80,973
233
37,986
Total
81,016
38,219
5.12 Fees and Commissions
31 Dec 2013 31 Dec 2012
Management fees
Custody fees
Commissions and fees from securities trading
Administration of securities
Expenses of administration of the local sub-register – Česká spořitelna
Fee for calculation of NAV and participation certiﬁcate rate
Other fees and commissions
20,994
1,540
(27)
791
106
69
345
9,848
722
(10)
–
78
32
680
Total
23,818
11,350
In compliance with the Statute of the Fund, the management fee paid to the Company by the Fund amounts to 1.50 percent of the average
annual net assets value.
Pursuant to the custody service contract entered into with Česká spořitelna, a. s., the Fund pays a fee equal to 0.11 percent of its average
annual net asset value.
If participation certiﬁcates of another mutual fund managed by the Company are purchased and added to the Fund’s assets, the Fund’s aggregate net assets value reduced by the current value of investments in participation certiﬁcates of the other mutual fund managed by the
Company is used as the basis for the calculation of the ﬁxed part of the management fee.
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Investiční společnost České spořitelny, a. s., ČS korporátní dluhopisový – otevřený podílový fond, 2013 Annual Report
5.13 Proﬁt or Loss from Financial Operations
31 Dec 2013 31 Dec 2012
Proﬁt or loss from securities at fair value through proﬁt or loss
Proﬁt or loss from FX differences
Proﬁt or loss from derivatives
10,240
1,374
(53,043)
31,182
3,343
12,710
Total
(41,429)
47,235
Proﬁt or loss from securities at fair value through proﬁt or loss primarily comprises the proﬁt or loss from the realised sales of securities,
from payable securities and from the daily valuation of securities at fair value.
Proﬁt or loss from derivatives includes proﬁt or loss on the settlement of ﬁxed term transactions with ﬁnancial instruments and also the
revaluation of open derivatives at fair value.
Proﬁt or loss from FX differences represents the value of realised FX proﬁt or loss from foreign currency accounts and from the settlement
of foreign currency receivables and payables and also gains or losses arising from the revaluation of assets, with the exception of securities,
and liabilities in foreign currency at fair value.
5.14 Administrative Expenses
31 Dec 2013 31 Dec 2012
Audit
209
237
Total
209
237
2013
2012
5.15 Income Tax
The principal income tax components are as follows:
Tax payable – current year
778
1,887
Total income tax
778
1,887
2013
2012
15,560
–
–
15,560
–
15,560
778
–
–
73,867
–
–
73,867
(36,126)
37,741
1,887
–
–
778
1,887
Current income tax – analysis:
Proﬁt (Loss) before tax
Items to add
Deductible items
Tax base
Reduction for loss
Tax base after reduction
Tax (5%) on tax base
Foreign dividends
Tax on foreign dividends
Total tax
Deferred Tax
As at 31 December 2013, no temporary differences existed between the tax bases of assets and liabilities and their carrying amounts for
ﬁnancial reporting purposes.
As at 31 December 2012, no temporary differences existed between the tax bases of assets and liabilities and their carrying amounts for
ﬁnancial reporting purposes.
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Investiční společnost České spořitelny, a. s., ČS korporátní dluhopisový – otevřený podílový fond, 2013 Annual Report
5.16 Related Party Transactions
Related parties include Česká spořitelna, a. s. and Investiční společnost České spořitelny, a. s.
31 Dec 2013 31 Dec 2012
Unbilled management fee – Investiční společnost
Unbilled custody fee for December – Česká spořitelna
Unbilled fee for administration of the local sub-register – Česká spořitelna
Unbilled fee for calculation of NAV and participation certiﬁcate rate
Other payables to related parties
1,962
144
9
6
204
1,144
83
7
4
316
Total payables to related parties
2,325
1,554
The costs charged to the Fund by Česká spořitelna, a. s. amounted to CZK 2,823 thousand in 2013 (2012: CZK 1,502 thousand), of which
the greatest portion was represented by the custody fee of CZK 1,540 thousand (2012: CZK 722 thousand).
The costs charged by the Company amounted to CZK 20,994 thousand (2012: CZK 9,848 thousand), which is the annual management fee.
5.17 Liquidity
The following tables show the residual maturity of assets and liabilities broken down by major classes of assets.
Given that all securities are traded on public markets, sales can easily be undertaken within three months.
2013
Assets
Less than
3 months
3 month –
1 year
1 – 5 years Over 5 years
Not
speciﬁed
Total
Receivables from banks
Debt securities
Prepayments
Other assets
145,267
41,108
–
3,642
–
–
–
166
–
1,034,843
–
1,873
–
398,913
–
1,937
–
–
–
–
145,267
1,474,864
–
7,618
Total assets
190,017
166
1,036,716
400,850
–
1,627,749
Other liabilities
Net assets
Available capital
(49,033)
140,984
(1,569,252)
(24)
142
–
(9,440)
1,027,276
–
–
400,850
–
–
–
–
(58,497)
1,569,252
(1,569,252)
Difference
(1,428,268)
142
1,027,276
400,850
–
–
Less than
3 months
3 month –
1 year
1 – 5 years Over 5 years
Not
speciﬁed
Total
88,132
−
−
12,832
−
32,088
11
−
−
548,148
−
−
−
253,406
−
−
−
−
−
−
88,132
833,642
11
12,832
100,964
32,099
548,148
253,406
−
934,617
Other liabilities
Net assets
Available capital
(2,142)
98,822
(914,937)
(4,762)
27,337
−
(10,111)
538,037
−
(2,665)
250,741
−
−
−
−
(19,680)
914,937
(914,937)
Difference
(816,115)
27,337
538,037
250,741
−
−
Liabilities
2012
Assets
Receivables from banks
Debt securities
Prepayments
Other assets
Total assets
Liabilities
Liquidity risk, to which the Fund is exposed, is low as all assets are immediately convertible into cash before the expected purchases of
participation certiﬁcates from holders can be undertaken.
163
Investiční společnost České spořitelny, a. s., ČS korporátní dluhopisový – otevřený podílový fond, 2013 Annual Report
5.18 Off-balance Sheet Assets and Liabilities
The Fund’s off-balance sheet accounts include receivables and payables from ﬁxed term transactions and assets provided into custody and
safekeeping. The item ‘Assets provided into custody, administration and safekeeping’ shows foreign and domestic securities administered
by Česká spořitelna, a. s. (this item does not include participation certiﬁcates of open-ended mutual funds of the Company, which the Fund
maintains in its portfolio).
5.19 Contingent Assets and Liabilities
The Fund has no assets or liabilities that were not disclosed in the balance sheet or off-balance sheet accounts.
5.20 Subsequent Events
No signiﬁcant events occurred after the date of the ﬁnancial statements, which would have a material impact on the Fund’s ﬁnancial statements.
164
Investiční společnost České spořitelny, a. s., ČS korporátní dluhopisový – otevřený podílový fond, 2013 Annual Report
Portfolio at 31 December 2013
The detail of the portfolio is not part of the fund’s ﬁnal accounts. Figures are stated in CZK.
ISIN
Name of the security
XS0503453275
XS0879105558
XS0783242877
XS0231264275
XS0268320800
XS0524202610
USM0300LAA46
USM8933FAB33
XS0772024120
XS1001668950
XS0861980372
XS0275728557
XS0775984213
XS0555493203
XS0776111188
XS0471612076
XS0491998133
XS0772509484
XS0424860947
XS0846652666
XS0606382413
XS0298931287
XS0236336045
XS0494933806
XS0620695204
XS0544362972
XS0359381331
XS0234987153
XS0282585859
XS0261906738
XS0585211591
XS0776121062
XS0551315384
XS0588436799
XS0806482948
XS0772835285
XS0366630902
XS0373641009
USL6366MAB92
XS0800346362
XS0268694808
XS0554659671
XS0552679879
XS0361041808
XS0643183220
XS0632887997
XS0513723873
XS0746259323
XS0524610812
XS0381439305
XS0802648955
XS0499245180
USM4R36CAA80
XS0799357354
XS0742380412
MOL HUNG. OIL GAS 5.875 04/20/17
CREDIT BANK MOSCOW 7.7 02/01/18
SISTEMA JSFC 6.95 05/17/19
MOL HUNG. OIL GAS 3.875 10/05/15
OTP BANK PLC 5.27 09/19/16
YAPI 5.1875 10/13/15
AKBANK 5.125 07/22/15
ISBANK 5.1 02/01/16
TURKYIE VAKIFLAR 5.75 04/24/17
RAIFFEISEN BANK 5.163 06/18/24
ROSNEFT OIL CO 3.149 03/06/17
RS FINANCE 9.75 12/01/16
PROMSVYAZ 8.5 04/25/17
ALROSA FINANCE 7.75 11/03/20
AGROKOR D.D. 9.875 05/01/19
AGROKOR 10 12/07/16
VTB CAPITAL SA 6.465 03/04/15
VTB CAPITAL SA 6 04/12/17
GAZPROM (GAZ CAP) 9.25 04/23/19
HCFB LLC 9.375 04/24/20
HCFB LLC 7 03/18/14
HALYK SAVINGS BK 7.25 05/03/17
BANK OF MOSCOW 7.5 11/25/15
ALFA MTN ISSUANCE 8 03/18/15
ALFA BANK 7.75 04/28/21
ALFA BANK 7.875 09/25/17
EVRAZ 9.5 04/24/18
EVRAZ GROUP SA 8.25 11/10/15
CENTERCREDIT INTL 8.625 01/30/14
TNK-BP FINANCE 7.5 07/18/16
TMK CAPITAL 7.75 01/27/18
NOMOS CAPITAL 10 04/26/19
SEVERSTAL OAO 6.7 10/25/17
NOVATEK OAO 5.326 02/02/16
TURKYIE HALK 4.875 07/19/17
RASPADSKAYA 7.75 04/27/17
RUSS AGRIC BK 7.75 05/29/18
KAZMUNAIGAZ FIN 9.125 07/02/18
MHP SA 10.25 04/29/15
GEORGIAN RAILWAY 7.75 07/11/22
ERSTE CAPITAL FIN VAR PERPETUAL
LUKOIL INTL FIN 6.125 11/09/20
SCF CAPITAL LTD 5.375 10/27/17
VIMPELCOM 9.125 04/30/18
VIMPELCOM 7.5043 03/01/22
RUSS AGRIC 6 06/03/21
MTS INTL FUNDING 8.625 06/22/20
PGNIG FINANCE 4 02/14/17
VNESHECONOMBANK 6.902 07/09/20
AK TRANSNEFT OAO 8.7 08/07/18
RUSSIAN STAND BANK 9.25 07/11/17
RUSSIAN RAILWAYS 5.739 04/03/17
FINANSBANK AS 5.5 05/11/16
SBERBANK 5.18 06/28/19
SBERBANK 4.95 02/07/17
Foreign corporate bonds
Amount Market Price
600
1,600
1,400
1,000
1,300
1,500
1,500
1,600
2,000
6
800
1,400
1,000
500
900
400
600
1,000
1,600
900
1,300
1,400
1,700
900
200
600
1,200
900
700
900
2,000
1,700
1,300
1,800
2,000
900
1,300
800
1,300
1,700
600
1,500
2,000
1,200
300
600
1,800
500
1,400
1,500
800
1,800
2,200
1,000
300
29,161.55
20,006.20
21,196.66
28,032.46
28,107.06
20,423.38
20,462.37
20,474.31
20,448.05
2,745,077.95
20,179.48
19,460.91
21,402.56
22,126.50
30,997.93
29,043.62
20,975.04
21,183.53
24,510.60
19,934.38
20,092.94
21,568.48
21,034.32
21,248.58
21,340.69
22,179.62
21,839.93
21,202.43
19,962.44
22,383.14
20,853.89
20,941.42
21,476.77
21,147.02
19,679.94
20,493.41
22,505.09
24,156.49
20,591.09
20,817.08
25,368.13
21,569.07
20,084.19
23,260.46
20,854.08
20,426.36
23,530.03
29,230.66
21,988.44
24,326.10
20,644.60
21,564.30
19,961.44
20,907.80
21,131.61
Market Price Total
Accrued
Interest
17,496,930.60
32,009,923.46
29,675,322.77
28,032,463.75
36,539,177.68
30,635,069.01
30,693,557.37
32,758,892.77
40,896,095.80
16,470,467.70
16,143,583.12
27,245,270.67
21,402,562.02
11,063,252.34
27,898,136.10
11,617,449.40
12,585,023.98
21,183,529.08
39,216,962.62
17,940,946.34
26,120,822.00
30,195,869.17
35,758,350.94
19,123,724.21
4,268,138.34
13,307,773.00
26,207,917.93
19,082,185.54
13,973,704.75
20,144,823.55
41,707,771.00
35,600,412.47
27,919,796.63
38,064,642.46
39,359,881.12
18,444,065.60
29,256,613.75
19,325,190.75
26,768,411.49
35,389,038.72
15,220,875.00
32,353,612.20
40,168,373.28
27,912,555.22
6,256,225.33
12,255,818.06
42,354,047.48
14,615,331.00
30,783,816.45
36,489,157.03
16,515,680.50
38,815,740.43
43,915,169.45
20,907,798.24
6,339,481.72
675,387.59
1,014,417.16
231,206.96
253,305.57
530,206.40
331,100.40
671,215.27
671,886.69
419,431.83
30,258.72
158,703.72
169,638.68
305,317.64
122,057.98
399,462.27
70,086.11
248,655.11
258,622.00
547,969.18
307,735.31
512,933.63
319,713.16
196,197.11
405,837.60
53,105.93
248,053.31
415,784.60
205,156.88
500,458.44
604,280.25
1,310,517.25
601,240.89
312,860.78
778,772.51
867,461.29
242,831.14
172,594.27
718,062.88
449,176.13
1,230,430.08
224,345.22
258,932.84
374,255.88
363,065.50
149,290.54
53,713.80
60,055.01
480,876.71
913,100.78
1,031,255.23
691,095.46
496,646.75
327,643.13
5,725.05
117,349.73
1,406,427,431.39
23,109,484.35
165
Investiční společnost České spořitelny, a. s., ČS korporátní dluhopisový – otevřený podílový fond, 2013 Annual Report
ISIN
Name of the security
XS0764313614
CEZ 4.25 04/03/22
Amount Market Price
800
19,882.06
Local corporate bonds after 1 January 1998
XS0583192108
CESKA EXP. BANKA VAR 01/24/16
Local government bonds after 1 January 1998
Total
1,500
19,496.12
Market Price Total
Accrued
Interest
15,905,650.88
163,462.37
15,905,650.88
163,462.37
29,244,180.00
13,434.92
29,244,180.00
1,451,577,262.27
13,434.92
23,286,381.64
166
Independent Auditor’s Report
to the Participation certiﬁcate holders of Investiční společnost České spořitelny, a. s.,
High Yield dluhopisový – otevřený podílový fond
We have audited the accompanying ﬁnancial statements of Investiční společnost České spořitelny, a. s., High Yield dluhopisový – otevřený
podílový fond, which comprise the balance sheet as at 31 December 2013, and the income statement and statement of changes in equity for
the year then ended, and a summary of signiﬁcant accounting policies and other explanatory information. For details of Investiční společnost
České spořitelny, a. s., High Yield dluhopisový – otevřený podílový fond, see Note 1 to the ﬁnancial statements.
Management’s Responsibility for the Financial Statements
Management of Investiční společnost České spořitelny, a. s., is responsible for the preparation and fair presentation of these ﬁnancial statements in accordance with accounting principles generally accepted in the Czech Republic, and for such internal control as management determines is necessary to enable the preparation of ﬁnancial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these ﬁnancial statements based on our audit. We conducted our audit in accordance with the
Act on Auditors and International Standards on Auditing as amended by implementation guidance of the Chamber of Auditors of the Czech
Republic. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
whether the ﬁnancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the ﬁnancial statements. The procedures selected depend on the auditor’s judgment, including an assessment of the risks of material misstatement of the ﬁnancial statements,
whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation
and fair presentation of the ﬁnancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the ﬁnancial statements.
We believe that the audit evidence we have obtained is sufﬁcient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the ﬁnancial statements present fairly, in all material respects, the ﬁnancial position of Investiční společnost České
spořitelny, a. s., High Yield dluhopisový – otevřený podílový fond, as at 31 December 2013, and its ﬁnancial performance for the year then
ended in accordance with accounting principles generally accepted in the Czech Republic.
31 March 2014
Prague, Czech Republic
Ernst & Young Audit, s.r.o.
License No. 401
Represented by partner
Roman Hauptﬂeisch
Auditor, Licence no. 2009
A member ﬁrm of Ernst & Young Global Limited,
Ernst & Young Audit, s. r. o. with its registred ofﬁce at Na Florenci 2116/15, 110 00 Prague 1 – Nové Město,
has been incorporated in the Commercial Register administered by the Municipal Court in Prague,
Section C, entry No. 88504, under Identiﬁcation No. 26704153.
167
Investiční společnost České spořitelny, a. s., High Yield dluhopisový – otevřený podílový fond, 2013 Annual Report
Balance Sheet
at 31 December 2013
(in thousands CZK)
Line
Current
Previous
01
02
06
10
12
15
16
19
21
135,517
112,212
23,305
959,088
959,088
1,909
1,909
0
0
69,839
69,839
0
473,034
473,034
5,699
5,272
427
11
22
1,096,514
548,583
29
30
32
33
34
39
40
41
47
10,448
8,710
1,004
734
1,189
141,521
90,280
819,855
33,221
2,401
500
1,187
714
604
49,028
0
406,270
90,280
Total Liabilities
48
1,096,514
548,583
of which: Equity
49
1,084,877
545,578
3 Receivables from banks and credit unions
of which: a/ on demand: aa/ current accounts
ae/ collaterals
5 Debt securities
b/ issued by other entities
11 Other assets
a/ derivatives
d/ other assets
13 Prepayments and accrued income
Total Assets
4 Other liabilities
a/ derivatives
c/ liabilities from taxes
d/ other liabilities
5 Deferred income and accrued expenses
9 Share premium
10 Reserve funds and other funds from proﬁt
12 Capital funds
15 Proﬁt or loss for the accounting period
168
Investiční společnost České spořitelny, a. s., High Yield dluhopisový – otevřený podílový fond, 2013 Annual Report
Off Balance Sheet Accounts
at 31 December 2013
(in thousands CZK)
4 Amounts due from ﬁxed term transactions
a/ with interest instruments
b/ with currency instruments
7 Assets provided into custody, administration and safekeeping
of which: securities
12 Amounts owed from ﬁxed term transactions
a/ with interest instruments
b/ with currency instruments
Line
Current
Previous
52
53
54
60
61
64
65
66
1,068,167
104,185
963,982
959,273
959,088
1,074,968
104,762
970,206
546,906
0
546,906
473,034
473,034
542,134
0
542,134
169
Investiční společnost České spořitelny, a. s., High Yield dluhopisový – otevřený podílový fond, 2013 Annual Report
Proﬁt and Loss Account
for the year ended 31 December 2013
(in thousands CZK)
1 Interest income and similar income
of which: a/ interest income from bonds
d/ interest income from collaterals
5 Commission and fee expenses
a/ fees and commissions from securities trading
b/ management fee
c/ custody fee
d/ other ﬁnancial expenses
6 Proﬁt or loss on ﬁnancial operations
a/ proﬁt or loss on transactions with securities
b/ proﬁt or loss on foreign exchange transactions
c/ proﬁt or loss on ﬁxed term transactions and options
9 Administrative expenses
of which: b/ other administrative expenses: ba/ audit
12 Release of provisions and bad debt allowances to receivables and guarantees,
income from receivables written off
19 Ordinary proﬁt or loss for the accounting period before tax
23 Income tax
24 Proﬁt or loss for the accounting period after tax
Line
Current
Previous
1
2
5
10
11
12
13
14
15
16
17
18
21
22
54,269
54,221
2
12,354
6
10,391
953
1,004
(6,753)
54,265
1,821
(62,839)
192
192
0
40,301
40,174
0
6,433
(10)
5,202
477
764
57,807
46,582
(1,870)
13,095
235
235
99
34,970
1,749
33,221
91,539
1,259
90,280
24
26
30
31
170
Investiční společnost České spořitelny, a. s., High Yield dluhopisový – otevřený podílový fond, 2013 Annual Report
Statement of Changes in Equity
for the year ended 31 December 2013
(in thousands CZK)
Line
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Current
Previous
49,028
134,892
(42,399)
0
141,521
36,898
29,455
(17,325)
0
49,028
0
90,280
0
90,280
40,956
0
(40,956)
0
406,270
604,816
(191,231)
0
0
819,855
448,684
236,906
(253,914)
(25,406)
0
406,270
0
0
0
0
0
0
1 Share premium
opening balance
issued unit certiﬁcates
repurchase of unit certiﬁcates
other changes
closing balance
2 Retained earnings
opening balance
transfers to funds
other changes
closing balance
3 Capital funds
opening balance
issued unit certiﬁcates
repurchase of unit certiﬁcates
transfers to funds
other changes
closing balance
4 Gains or losses from revaluation
opening balance
foreign exchange rate differences and gains or losses from revaluation not
included in proﬁt (loss)
closing balance
5 Retained earnings or accumulated losses from previous periods
opening balance
other changes
closing balance
6 Proﬁt (loss) for the current period after taxes
opening balance
proﬁt (loss)
transfers to funds, dividends
closing balance
21
22
23
24
25
26
27
28
29
30
31
0
0
0
0
0
0
90,280
33,221
(90,280)
33,221
(66,362)
90,280
66,362
90,280
7 Total
32
1,084,877
545,578
171
Investiční společnost České spořitelny, a. s., High Yield dluhopisový – otevřený podílový fond, 2013 Annual Report
Notes to the Financial Statements
for the year ended 31 December 2013
1. Organisation and Description of
Business
The participation certiﬁcates of the Fund are available both in the
Czech Republic and in other EU member countries.
Formation and Description of the Business
Investment Policy of the Fund
Investiční společnost České spořitelny, a. s., High Yield dluhopisový – otevřený podílový fond (hereinafter the “Fund” or
“ISČS, a. s. – High Yield dluhopisový OPF”) is an accounting unit
without legal entity status, formed by Investiční společnost České
spořitelny, a. s. (hereinafter the “Company”) in compliance with
the Collective Investment Act No. 189/2004 Coll. (hereinafter the
“Act”).
The objective of the investment policy is to provide participation
certiﬁcate holders with long-term absolute performance of their
crown investments in participation certiﬁcates, principally through
investments in bonds of corporate and bank issuers, who received
Standard & Poor’s or Moody’s rating of long-term indebtedness at
least on the speculative level, i.e. principally issuers from Western
and Eastern Europe.
Following Investiční společnost České spořitelny, a. s.’s request of
14 March 2006, the Securities Commission approved the formation of a fund entitled Investiční společnost České spořitelny, a. s.
– High Yield dluhopisový FF – otevřený podílový fond. The decision came into effect on 4 July 2006. The Fund commenced its activities on 28 August 2006. The name of the Fund changed to High
Yield dluhopisový – otevřený podílový fond on 4 November 2008.
The credit risk is reduced through broad diversiﬁcation of the Fund
portfolio, where usually up to 3 percent of the Fund’s assets are
invested in the bonds of one issuer, with exceptions allowed for
basically three issuers, where up to 5 percent of the Fund assets can
be invested into bonds.
Pursuant to a concluded contract, Česká spořitelna, a. s. acts as the
depository of the Fund.
The Fund is managed by the Company. In compliance with the
Act, the Company is responsible for the management of the assets
of the Fund, which involves the administration and handling of
the assets.
The Fund is a standard fund in compliance with the Act and meets
the requirements of EU legislation.
According to the classiﬁcation binding for the members of the
Capital Market Association (hereinafter the “AKAT CR”) as at the
date of the approval of this Statute, the Fund can be deﬁned as
a bond fund.
Registered Ofﬁce
Investiční společnost České spořitelny, a. s.
High Yield dluhopisový – otevřený podílový fond
Prague 6, Evropská 2690/17
Principal Business
The Company collects funds from individuals and legal entities for
the Fund by issuing participation certiﬁcates with the purpose of
their collective investment on local and foreign ﬁnancial markets.
No restrictions are placed on the number of participation certiﬁcates for issue and the period for which the Fund is established.
The Company reserves the right to temporary halt the issuing of
participation certiﬁcates for no longer than three months in compliance with the Act.
The portfolio of the Fund predominantly includes bonds denominated in EUR or USD. Foreign currency risk is hedged by standard
hedging transactions. The above-described objectives do not represent limits for the restriction and distribution of the investmentrelated risks.
The portfolio of the Fund predominantly includes bonds with ﬁxed
and variable coupon, denominated in EUR and USD, the issuers of
which are companies and state institutions from Western and Eastern European countries. The Fund also invests in treasury bills,
bank deposits, or bonds with embedded derivatives.
Finances collected in the Fund can also be invested in securities
of collective investment funds if such collective investment funds
invest in identical classes of assets as a standard fund in compliance with the Act.
The portfolio of the Fund may also be expanded by purchasing
bonds exchangeable for shares or with the option to subscribe for
shares. In the event of claiming the rights arising from these bonds
for the acquisition of shares, the shares must not exceed 10 percent
of the value of the Fund’s assets.
The limits of the Fund are adhered to on the basis of the Act, or
they are regulated in the Fund’s Statute in compliance with the Act.
The Fund uses ﬁnancial derivatives to hedge against currency exposures.
Change in the Fund’s Statute
Czech National Bank Resolution No. 2012/4693/570, dated 18
May 2012, which came into force on 5 June 2012: The changes to
172
Investiční společnost České spořitelny, a. s., High Yield dluhopisový – otevřený podílový fond, 2013 Annual Report
the Funds statute related mainly to the duty of the asset investment
company to ensure that its statute is in accordance with the amendment to Act 189/2004 Coll., on collective investments (as ensuing
from the changes made by Act 188/2011 Coll.) and Decree No.
193/2011 Coll., on the minimum requisites of the statute and on
the conditions for the use of the name Short-Term Money Market
Fund and Money Market Fund. In light of the change made to the
methodology of classifying mutual funds of the Capital Market
Association, the deﬁnition of a bond fund in the introductory Deﬁnition of Terms of the Funds statute has been modiﬁed, as well as
the wording of certain related provisions.
Investment objectives, the method of investing and the risk proﬁle
of the Fund have not been changed in the amendments referred to
above.
Along with the change made to the statute, information was updated as to the list of funds managed by the Company (Article II
Paragraph 8 of the statute), in particular information on the managing parties of the asset management company (Appendix 1 to
the statute), information added on the performance of the Fund for
2011 (Appendix 2 to the statute), information updated on the total
cost indicators for 2011, and the date on which the statute being
signed was updated.
On the date the changes to the statute came into force the simple
statute of the Fund was replaced by a newly processed document
providing required key information for investors. Such key information for investors was processed in accordance with Commission (EU) Regulation No. 583/2012.
As at 1 February 2013, information on Fund`s 2012 performance
was published within the document Key investors information.
(According to the article 23, section 3 of Council Regulation (EC)
no. 583/2010, the performance must be updated within the Key investors information up to 35 days after the previous calendar year
end.)
The updated text of the Funds statute was approved by the Investment company`s board of directors as at 10 April 2013. The
changes in the statute text related to an update of the list of managed funds, update of the information on the length of professional
experience of Investment company management, addition of information on Fund’s performance and the Fund`s benchmark`s
performance, an update of information on total expense ratio for
2012 and update of the date of the signature. These updates were
not subject to preliminary approval from Czech national bank (according to the section 84 (a), subsection 5 of 189/2004 Coll., Act
on collective investment schemes). The shareholders could access
the updated text of the Statute and Key investors information as of
10 April 2013 on http://www.iscs.cz/, at the distributor’s branches
(Ceska sporitelna, a. s.) and at the Investment company seat.
Legislative change
Act No 240/2013 Coll., On Management Companies and Investment Funds became effective as of 19 August 2013. Rules stated
by this act must be implemented by management companies and
investment funds by 22 July 2014. In 2013, the Fund`s management was subject to the rules of the Act No. 189/2004 Coll., Act
on collective investment schemes. The new rules will be applied
as of 2014.
2. Basis of Preparation
The ﬁnancial statements have been prepared on the basis of underlying accounting records maintained in accordance with Accounting Act No. 563/1991 Coll., and applicable regulations, decrees and internal standards in compliance with and in the scope
deﬁned in Czech Finance Ministry Regulation No. 501/2002 of
6 November 2002, as subsequently amended, which sets out the
overall framework for the presentation of the ﬁnancial statements,
and guidelines for the structure and minimum requirements for the
content of the ﬁnancial statements of banks and certain ﬁnancial
institutions, and Czech Accounting Standards for Financial Institutions, which establish the accounting principles and policies.
The basis of preparation and the accounting policies have been
constantly applied during both 2013 and 2012.
The Fund is obliged to comply with the regulatory requirements
of the Act.
The ﬁnancial statements are presented in compliance with general
accounting principles, speciﬁcally the accrual principle, the prudence concept and the going concern assumption.
The ﬁnancial statements contain the balance sheet, proﬁt and loss
account, statement of changes in equity and notes to the ﬁnancial
statements.
The presentation of the ﬁnancial statements requires that the
Company makes estimates which have an impact on the reported
amounts of assets and liabilities as at the date of the ﬁnancial statements as well as expenses and income in the relevant accounting
period. These estimates are based on information available as at
the date of the ﬁnancial statements and may differ from the actual
results.
As a result of continued market volatility since the start of the
global ﬁnancial crisis, the Fund may be exposed to increased risk,
speciﬁcally due to the uncertainty regarding possible asset impairments and future developments on the market. The ﬁnancial
statements have been prepared based on the current best estimates
using all relevant and available information as at the date of the
ﬁnancial statements.
These ﬁnancial statements are unconsolidated.
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All amounts are stated in thousands of Czech crowns (CZK), unless indicated otherwise.
tion models based on discounted future cash ﬂows according to
the yield curve calculated using the Reuters and Kondor+ systems.
Explanation Added for Translation into English
Securities are measured at cost upon initial recognition using the
weighted average method. The acquisition cost includes direct
transaction costs related to the acquisition of securities.
These ﬁnancial statements are presented on the basis of accounting
principles and standards generally accepted in the Czech Republic.
Certain accounting practices applied by the Company that conform with generally accepted accounting principles and standards
in the Czech Republic may not conform with generally accepted
accounting principles in other countries.
3. Accounting Policies
Realised capital gains or losses are recorded in the proﬁt and loss
account within ‘Proﬁt or loss from ﬁnancial operations’.
Accrued interest relating to assets is included within the total balance of these assets.
Receivables and Payables
Transaction Recognition Date
Purchases and sales of securities are recognised using trade date
accounting provided that the period between the trade date and the
fulﬁlment of the commitment arising from the contract does not
exceed a period typical for the relevant type of transaction.
The transaction recognition date for derivative contracts is:
a) the date upon which the related contract was entered into;
b) the date when fulﬁlment was delivered based on the relevant
contract.
The transaction recognition date can also be the date when money
in circulation is paid or received, the date when foreign currency is
purchased or sold, the date when a payment is made, the date when
ownership is acquired or terminated, when a receivable or payable
arises, changes or ceases to exist, when assets move within an accounting entity, and the date when other matters to be included
in the accounting records occur, or when the documents supporting these other matters are available, or when other matters are
a consequence of internal conditions of the accounting entity and/
or special regulations.
Securities
In accordance with the Fund’s strategy, all securities are classiﬁed
as securities at fair value through proﬁt or loss. During the accounting period, securities are re-measured at fair value on a daily
basis pursuant to the Finance Ministry Regulation No. 194/2011
Coll., on more detailed regulation of certain rules in collective investment (the “Decree”), as amended.
The securities of the Fund are accounted for as securities at fair
value through proﬁt or loss. The fair value of the securities is determined in accordance with the International Financial Reporting
Standards with an exception, that an average price between the
most favourable binding offer and demand (MID price) is used
for bonds.
Pursuant to the Regulation, securities are valued at the price quoted
on a public market which is adjusted, as appropriate, to reﬂect the
rules set out in the Regulation. If the market value is unavailable,
the Fund uses a value determined by the Company using valua-
The Fund records receivables arising from its transactions with
securities and other operating receivables at their nominal value,
while receivables from positive fair values of derivatives are recorded at the fair value of the derivatives at the balance sheet date.
Pursuant to the prudence principle, provisions are created based on
the aging of receivables.
The Fund records payables arising from its transactions with securities and operating payables at their nominal value, while payables from negative fair values of derivatives are recorded at the fair
value of the derivatives at the balance sheet date.
Financial Derivatives and Hedging Transactions
In the normal course of business, the Fund enters into hedging contracts with ﬁnancial derivatives to hedge against foreign currency
exposures associated with its transactions on ﬁnancial markets.
The method of fair value hedges is applied to hedging derivatives.
The Fund designates certain derivatives as hedges provided that
the following criteria are met:
– the Fund has developed a risk management strategy;
– at the inception of the hedge, the hedging relationship is formally documented, the documentation identiﬁes the hedged
item and the hedging instrument, and it deﬁnes the risk that
is being hedged and the approach to establishing whether the
hedge is effective; and
– the hedge is effective, that is, changes in the fair value or cash
ﬂows of the hedged item are almost fully offset by changes in
the fair value or cash ﬂows of the hedging instrument and the
results are within a range of 80 percent to 125 percent.
Nominal values of derivative ﬁnancial instruments are recognised
in the off-balance sheet accounts. Changes in the fair value of derivatives that are designated and qualify as hedges (see above) are
recorded as income or expense. Changes in the fair value of the
hedging derivatives attributable to the risk hedged are recognised
in the same income or expense accounts as differences from revaluation of a hedged instrument.
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All ﬁnancial derivatives are recorded as assets when the fair value
is positive and as liabilities when the fair value is negative. Fair
values are derived from valuation models.
Derivatives that are not designated as hedging derivatives are
treated as trading derivatives. These derivatives are measured at
fair value on a daily basis and gains and losses on revaluation are
posted to expense and income accounts.
Certain derivatives are embedded in compound ﬁnancial instruments, which comprise the host instrument and the derivative. Pursuant to the applicable regulations, the Fund recognises changes in
assets and liabilities arising from the movements in rates or prices
of securities or changes in exchange rates through expense and income accounts. Given that the assets of the Fund are valued at fair
value and changes of fair values are reported within expenses and
income from derivatives, embedded derivatives are not accounted
for separately.
Dividend income is recognised as at the date when the right to
receive the payment is established (ex-dividend date). Dividend income from domestic securities is presented after withholding tax.
Dividend income from foreign securities is presented gross with
the applicable taxes presented within taxes on foreign dividends
(see note 5.15).
Subsequent Events
The impact of events that occurred between the balance sheet date
and the date of the ﬁnancial statements preparation is recognized in
the ﬁnancial statements provided these events provide additional
evidence about conditions that existed at the date of the balance
sheet.
If material events reﬂecting the facts occurring after the balance
sheet date happened between the balance sheet date and the date
of the ﬁnancial statements preparation the consequences of these
events are disclosed in the notes to the ﬁnancial statements but not
recognized in the ﬁnancial statements.
Income Tax
Under effective tax regulations, the income tax rate applicable to
mutual funds is 5 percent.
4. Risk Management
Deferred Tax
Credit Risk
Deferred tax is provided using the liability method on all temporary differences between the carrying amount of assets and liabilities reported in the balance sheet and their value for tax purposes.
Deferred tax assets are recognised only up to the amount of probable future taxable income against which the deferred tax asset can
be offset.
In accordance with the Statute and the investment strategy, the
Company establishes rules and policies for selecting investment
instruments such that the overall credit risk proﬁle of allocated investments is consistent with the characteristics of the Fund. New
types of instruments are approved on a case by case basis by the
risk management function together with the speciﬁcation of limits
for positions pertaining to these instruments. Speciﬁc emphasis is
placed on an appropriate rating structure and a relatively detailed
diversiﬁcation of portfolios (especially in relation to interest bearing securities).
Foreign Currency Translations
Foreign currencies are translated using the exchange rate promulgated by the Czech National Bank as at the relevant date. As at the
balance sheet date, assets and liabilities denominated in foreign
currencies are translated on the same basis.
Foreign exchange rate gains and losses from the daily translation
of assets and liabilities in foreign currencies are posted to expense
or income accounts.
Equity of the Fund
The selling price of participation certiﬁcates is calculated as a proportion of the Fund’s equity and the relevant number of participation certiﬁcates. Participation certiﬁcates are sold to investors
using the selling price determined on a daily basis.
Share Premium
Share premium is the difference between the nominal value of all
participation certiﬁcates and their carrying amounts as at the date
of their issue or purchase.
Market Risk
The Fund uses a wide range of tools to eliminate risk exposures
attached to its portfolios. Signiﬁcant attention is paid to market
risks. Apart from statutory restrictions, the Fund is subject to a set
of internal limits having a direct impact on the FX exposure, interest rate exposure (the modiﬁed duration range of the Fund), equity
allocation on individual markets according to their volatility, portfolio rating structure (see above), and other characteristics of the
Fund. The relevant limits are appropriately applied to correspond
with the type of the Fund.
Whenever the Fund purchases new types of instruments, these instruments are ﬁrst analysed to assess the potential credit risk, as
well as the market risk that the instruments might bring to or help
eliminate from the portfolio. Subsequently, their appropriateness
and, if appropriate, the acceptable proportion of these instruments
in the portfolio is evaluated.
Interest Income and Expense and Dividend Income
Interest income and expense are recognised using the accrual principle.
The level of the Fund’s market risk exposure is measured using
the Value at Risk (“VaR”). With effect from 1 August 2006, the
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Investiční společnost České spořitelny, a. s., High Yield dluhopisový – otevřený podílový fond, 2013 Annual Report
VaR for the Company’s Funds is calculated by the Central Risk
Management Department of Česká spořitelna using the historical
simulation method in the K + KvaR system.
Set out below are relative monthly values of the VaR in percentage
terms for individual types of risks:
31 Dec 2013
Average
VaR
2.64%
0.04%
2.63%
0.00%
2.30%
0.11%
2.24%
0.00%
31 Dec 2012
Average
VaR
1.32%
0.10%
1.31%
0.00%
2.08%
0.27%
2.04%
0.00%
Global VaR
Foreign currency VaR
Interest rate VaR
Equity VaR
Global VaR
Foreign currency VaR
Interest rate VaR
Equity VaR
The average VaR is calculated as an average of daily VaR values in
years 2013 and 2012 respectively.
The Fund monitors Value at Risk globally and also broken down to
Foreign Currency VaR, Interest Rate VaR and Equity VaR. Based
on the above values, the Fund identiﬁes critical risk segments. This
identiﬁcation inﬂuences the reinvestment process. The limits set
the maximum acceptable VaR for the Fund.
The Equity VaR also reﬂects the risk related to the holding of mutual funds’ participation certiﬁcates (including funds of money
market and bond funds).
Adherence to all the above limits and their effectiveness is monitored and assessed on an ongoing basis. The limits are reviewed,
if necessary.
The portfolio’s risk of unfavourable development of foreign exchange rates, interest rates, and other market factors is hedged, to
an appropriate extent, by ﬁnancial derivatives. Financial derivatives are traded on the OTC market as this market enables the trading of contracts whose parameters and nature appropriately satisfy
the requirements of a hedge. Portfolios primarily include currency
swaps, currency forwards and interest rate swaps.
Liquidity Risk
Another monitored risk is the liquidity risk. Liquidity risk is a risk
that the Fund will not have enough available resources to meet its
obligations arising from ﬁnancial contracts. Liquidity is monitored
and managed based on expected cash ﬂows, with appropriate adjustments made to the structure of securities and term placements
portfolios.
Pursuant to the Act, the Company is obliged to repurchase a participation certiﬁcate without undue delay but not later than 15 business days from the date when the repurchase right is claimed. Given that the Fund holds securities traded on foreign stock exchanges
which can be realised within a few days, the Fund’s inability to
meet its obligations due to lack of liquidity is unlikely.
Pursuant to Section 12 of the Collective Investment Act, the Company can suspend issues and purchases of the Fund’s participation
certiﬁcates for a maximum of three months, if necessary due to the
protection of rights or the participation certiﬁcate holders’ interests
protected by law. Issuing and purchasing participation certiﬁcates
can be suspended particularly at the end or beginning of the calendar year, in the event of natural disasters, upon very strong ﬂuctuations on ﬁnancial markets and upon high requirements for the
sales or purchases of participation certiﬁcates provided they could
endanger the Fund’s assets.
The quantitative information about the residual maturity of assets
and liabilities is given in Note 5.17.
5. Additional Information on the Financial Statements
5.1 Receivables from Banks
Receivables from banks
31 Dec 2013 31 Dec 2012
Current accounts
135,517
69,839
Total
135,517
69,839
Balances on current accounts are repayable on demand.
5.2 Securities
Individual types of securities by issuer, number of securities, their market value and interest rate are disclosed in the Portfolio attached to
the annual report. All securities held by the Fund are publicly listed on the Prague Stock Exchange or foreign stock exchanges. Participation
certiﬁcates which are not listed on stock exchanges are purchased and administered by the Company.
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Debt securities
31 Dec 2013 31 Dec 2012
Acquisition cost
Market revaluation
Accrued interest income
877,919
60,543
20,626
434,501
28,010
10,523
Total
959,088
473,034
Of the aggregate volume of debt securities, debt securities maturing within one year accounted for 1.484 percent in 2013 (2012: 0 percent).
Of the aggregate volume of debt securities, debt securities maturing within more than one year with a variable coupon accounted for 0
percent in 2013 (2012: 0 percent).
Of the aggregate volume of debt securities, debt securities maturing within more than one year with a ﬁxed coupon accounted for 98.516
percent in 2013 (2012: 100 percent).
5.3 Other Assets
Other assets
31 Dec 2013 31 Dec 2012
Positive fair values of ﬁnancial derivatives
State budget settlement
Other receivables
Other
Provisions against receivables
1,909
–
–
–
–
5,272
–
427
–
–
Total
1,909
5,699
5.4 Prepayments and Accrued Income
Prepayments and accrued income
31 Dec 2013 31 Dec 2012
Prepayments – audit fees
–
11
Total
–
11
5.5 Equity
The Fund has no share capital. The nominal value of one participation certiﬁcate is CZK 1. The total nominal value of all participation
certiﬁcates is posted to ‘Capital funds’.
Share premium arising from the difference between the nominal and selling values of the participation certiﬁcates is recorded separately.
The Fund accounts for share premium upon the sale of participation certiﬁcates as well as upon their repurchase. The selling price of the
participation certiﬁcate is determined as the share of the Fund’s net assets and the number of issued participation certiﬁcates.
The value of a participation certiﬁcate as at the last trading date in 2013 totaled CZK 1.2534 (2012: CZK 1.2072). This is the most recent
announced value of the participation certiﬁcate for the year, for which purchases and repurchases of the participation certiﬁcates of the Fund
were undertaken.
The proﬁt for 2013 in the amount of CZK 33,221 thousand will be transferred to the reinvestment fund within ‘Other funds from proﬁt’.
The proﬁt for 2012 in the amount of CZK 90,280 thousand was transferred to the reinvestment fund within ‘Other funds from proﬁt’.
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Investiční společnost České spořitelny, a. s., High Yield dluhopisový – otevřený podílový fond, 2013 Annual Report
5.6 Changes in the Capital Fund
Number of
Nominal
participation
value of
certiﬁcates participation
certiﬁcates
Balance at 31 Dec 2011
Participation certiﬁcates sold
Participation certiﬁcates purchased
Use of capital fund to cover losses
Balance at 31 Dec 2012
Participation certiﬁcates sold
Participation certiﬁcates purchased
Use of capital fund to cover losses
Balance at 31 Dec 2013
Use of Total capital
funds
capital fund
to cover
losses
468,962,326
468,962
(20,278)
448,684
236,906,359
(253,914,092)
–
236,906
(253,914)
–
–
–
(25,406)
236,906
(253,914)
(25,406)
451,954,593
451,954
(45,684)
406,270
604,816,450
(191,231,975)
–
604,816
(191,231)
–
–
–
–
604,816
(191,231)
–
865,539,068
865,539
(45,684)
819,855
5.7 Other Liabilities
Other liabilities
31 Dec 2013 31 Dec 2012
Negative fair values of ﬁnancial derivatives
State budget settlement
Payables to participation certiﬁcate holder
Other liabilities
Total
8,710
1,004
513
221
500
1,187
559
155
10,448
2,401
5.8 Accrued Expenses and Deferred Income
Accrued expenses consist of the unbilled custody fee of CZK 100 thousand related to December (2012: CZK 50 thousand), the unbilled
management fee of CZK 1,085 thousand related to December (2012: CZK 546 thousand) and unbilled fee for local sub-register management
of CZK 0 thousand related to December (2012: CZK 6 thousand) and the unbilled fee for the NAV and participation certiﬁcate rate calculation of CZK 4 thousand (2012: CZK 2 thousand).
5.9 Financial Derivatives Designated as Hedging Derivatives
Nominal value of the derivatives
Currency instruments
31 Dec 2013
31 Dec 2012
Assets
Liabilities
Assets
Currency swaps
403,768
408,633
212,682
Liabilities
208,475
Total currency instruments
403,768
408,633
212,682
208,475
Open positions of derivatives posted to an off-balance sheet are converted to fair value daily as of 1 January 2011 (up to 31 August 2013
futures were converted monthly; as of 1 September 2013 they are converted on daily basis) and recorded in absolute values.
Fair value of the derivatives
Currency instruments
31 Dec 2013
31 Dec 2012
Positive
Negative
Positive
Currency swaps
–
4,865
4,207
Negative
–
Total currency instruments
–
4,865
4,207
–
All currency derivatives are due within one year.
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5.10 Financial Derivatives Designated as Trading Derivatives
Nominal Value
Currency instruments
31 Dec 2013
31 Dec 2012
Assets
Liabilities
Assets
Liabilities
Currency swaps
Interest swaps
560,214
104,185
561,573
104,762
334,224
–
333,659
–
Total
664,399
666,335
334,224
333,659
Open positions of derivatives posted to an off-balance sheet are converted to fair value daily as of 1 January 2011 (up to 31 August 2013
futures were converted monthly; as of 1 September 2013 they are converted on daily basis) and recorded in absolute values.
Fair value
Currency instruments
31 Dec 2013
31 Dec 2012
Positive
Negative
Positive
Negative
Currency swaps
Interest swaps
1,909
–
3,268
577
1,065
–
500
–
Total
1,909
3,845
1,065
500
2013
2012
Interest on deposits at banks
Interest on debt securities
Interest on compound margins
46
54,221
2
127
40,174
–
Total
54,269
40,301
2013
2012
Management fees
Custody fees
Commissions and fees from securities trading
Expenses of administration of the local sub-register – Česká spořitelna
Administration of securities
Other fees and commissions
10,391
953
6
79
464
461
5,202
477
(10)
73
238
453
Total
12,354
6,433
All currency derivatives are due within one year.
5.11 Interest Income
5.12 Fees and Commissions
In compliance with the Statute of the Fund, the management fee paid to the Company by the Fund amounts to 1.20 percent of the average
annual net asset value.
Pursuant to the custody service contract entered into with Česká spořitelna, a. s., the Fund pays a fee equal to 0.11 percent of its average
annual net asset value.
5.13 Proﬁt or Loss from Financial Operations
Proﬁt or loss from securities at fair value through proﬁt or loss
Proﬁt or loss from ﬁxed term transactions
Proﬁt or loss from FX differences
Total
2013
2012
54,265
(62,839)
1,821
46,582
13,095
(1,870)
(6,753)
57,807
Proﬁt or loss from securities at fair value through proﬁt or loss primarily comprises the proﬁt or loss from the realised sales of securities,
from payable securities and from the daily valuation of securities at fair value.
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Proﬁt or loss from derivatives includes proﬁt or loss on the settlement of ﬁxed term transactions with currency instruments and also the
revaluation of open derivatives at fair value.
Proﬁt or loss from FX differences represents the value of realised FX proﬁt or loss from foreign currency accounts and from the settlement
of foreign currency receivables and payables and also gains or losses arising from the revaluation of assets, with the exception of securities,
and liabilities in foreign currency at fair value.
5.14 Administrative Expenses
2013
2012
Audit
192
235
Total
192
235
2013
2012
5.15 Income Tax
The principal income tax components are as follows:
Tax payable – current year
1,749
1,259
Total income tax
1,749
1,259
Current income tax – analysis:
31 Dec 2013 31 Dec 2012
Proﬁt (Loss) before tax
Items to add
Deductible items
Tax base
Loss deduction
Tax base after deduction
Tax (5%) on tax base after deduction
Total tax
34,970
5
–
34,975
–
34,975
1,749
91,539
–
(99)
91,440
(66,259)
25,181
1,259
1,749
1,259
Deferred tax
As at 31 December 2013 no temporary differences existed between the tax bases of assets and liabilities and their carrying amounts for
ﬁnancial reporting purposes.
As at 31 December 2012 no temporary differences existed between the tax bases of assets and liabilities and their carrying amounts for
ﬁnancial reporting purposes.
5.16 Related Party Transactions
Related parties include Česká spořitelna, a. s. and Investiční společnost České spořitelny, a. s.
31 Dec 2013 31 Dec 2012
Unbilled custody fee – Česká spořitelna
Unbilled management fee – Investiční společnost
Unbilled fee for administration of the local sub-register – Česká spořitelna
Other payables to related parties
100
1,085
–
226
50
546
6
156
Total payables to related parties
1,411
758
The costs charged to the Fund by Česká spořitelna, a. s. amounted to CZK 1,962 thousand in 2013 (2012: CZK 1,231 thousand), of which
the greatest portion is represented by the custody fee of CZK 953 thousand (2012: CZK 477 thousand). The costs charged by the Company
amounted to CZK 10,391 thousand (2012: CZK 5,202 thousand), which is the annual management fee.
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5.17 Liquidity
The following tables show the residual maturity of assets and liabilities broken down by major classes of assets.
Given that all securities are traded on public markets, sales can easily be undertaken within three months
2013
Assets
Less than
3 months
3 month –
1 year
135,517
14,233
1,909
–
–
151,659
–
–
–
–
–
–
–
559,499
–
–
–
559,499
Other liabilities
Net assets
Available capital
(10,633)
141,026
(1,084,87)
(1,004)
(1,004)
–
Difference
(943,851)
(1,004)
Less than
3 months
3 month –
1 year
Receivables from banks
Debt securities
Other assets
Prepayments
69,839
−
5,699
11
−
−
−
−
−
217,783
−
−
Total assets
75,549
−
Other liabilities
Net assets
Available capital
(1,818)
73,731
(545,578)
Difference
(471,847)
Receivables from banks
Debt securities
Derivatives
Other assets
Prepayments
Total assets
1 – 5 years Over 5 years
Not
speciﬁed
Total
–
385,356
–
–
–
385,356
–
–
–
–
–
–
135,517
959,088
1,909
–
–
1,096,514
–
559,499
–
–
385,356
–
–
–
–
(11,637)
1,084,877
1,084,877
559 499
385 356
–
–
1 – 5 years Over 5 years
Not
speciﬁed
Total
−
255,251
−
−
−
−
−
−
69,839
473,034
5,699
11
217,783
255,251
−
548,583
(1,187)
(1,187)
−
−
217,783
−
−
255,251
−
−
−
−
(3,005)
545,578
(545,578)
(1,187)
217,783
255,251
−
−
Liabilities
2012
Assets
Liabilities
Liquidity risk, to which the Fund is exposed, is low as all assets are immediately convertible into cash before the expected purchases of
participation certiﬁcates from participation certiﬁcate holders can be undertaken.
5.18 Off-balance Sheet Assets and Liabilities
The Fund’s off-balance sheet accounts include receivables and payables from ﬁxed term transactions and assets provided into custody and
safekeeping. The item ‘Assets provided into custody, administration and safekeeping’ shows foreign participation certiﬁcates administered
by Česká spořitelna, a. s. (this item does not include participation certiﬁcates of open-ended mutual funds of the Company, which the Fund
maintains in its portfolio).
5.19 Contingent Assets and Liabilities
The Fund has no assets or liabilities that were not disclosed in the balance sheet or off-balance sheet accounts.
5.20 Subsequent Events
No signiﬁcant events occurred after the date of the ﬁnancial statements, which would have a material impact on the Fund’s ﬁnancial statements.
181
Investiční společnost České spořitelny, a. s., High Yield dluhopisový – otevřený podílový fond, 2013 Annual Report
Portfolio at 31 December 2013
The detail of the portfolio is not part of the fund’s ﬁnal accounts. Figures are stated in CZK.
ISIN
Name of the security
XS0503453275
XS0496716282
XS0775984213
XS0903872355
XS0798333802
FR0011321447
XS0885718782
XS0562783034
XS0555493203
XS0776111188
XS0471612076
XS0846652666
XS0861828407
XS0544362972
XS0359381331
XS0585211591
XS0551315384
XS0587805457
XS0972570351
US92769VAD10
XS0438150160
XS0954674668
XS0242945367
US03938LAU89
XS0505541044
XS0546767863
XS0568044555
USL19698AA49
XS0584389448
XS0307399062
DE000A0G4X39
XS0361041808
XS0643183220
XS0513723873
XS0480219640
XS0764640149
XS0495219874
XS0626064017
XS0480857415
XS0731129747
XS0801261156
XS0479955402
XS0604641034
XS0468466056
XS0478803355
XS0253989635
XS0548102531
XS0831842645
XS0586885500
XS0627215378
XS0616393145
XS0170485204
XS0754795739
MOL HUNG. OIL GAS 5.875 04/20/17
ITALCEMENTI FIN 6.625 03/19/20
PROMSVYAZ 8.5 04/25/17
KONINKLIJKE KPN 6.125 PERPETUAL
BANQUE PSA FINANC 4.875 09/25/15
RENAULT B 4.625 09/18/17
OTE PLC 7.875 02/07/18
LAFARGE 5.375 11/29/18
ALROSA FINANCE 7.75 11/03/20
AGROKOR D.D. 9.875 05/01/19
AGROKOR 10 12/07/16
HCFB LLC 9.375 04/24/20
FINMEC FINANCE SA 4.375 12/05/17
ALFA BANK 7.875 09/25/17
EVRAZ 9.5 04/24/18
TMK CAPITAL 7.75 01/27/18
SEVERSTAL OAO 6.7 10/25/17
PORTUGAL TEL FIN 5.625 02/08/16
TELEFONICA EU 6.5 PERPETUAL
VIRGIN MEDIA FIN 4.875 02/15/22
WIND ACQUISITION 11.75 07/15/17
TVN FIN CORP 7.375 12/15/20
INEOS GRP HOLDING 7.875 02/15/16
ARCELOR MITTAL 5.5 03/01/21
ZIGGO 8 05/15/18
YASAR HOLDINGS 9.625 10/07/15
CONVATEC HEALTH 10.875 12/15/18
CONVATEC HEALTH 10.5 12/15/18
ONO FINANCE II 11.125 07/15/19
BEVERAGE PACKAGING 9.5 06/15/17
WIENERBERGER 6.5 PERPETUAL
VIMPELCOM 9.125 04/30/18
VIMPELCOM 7.5043 03/01/22
MTS INTL FUNDING 8.625 06/22/20
ARDAGH GLASS 8.75 02/01/20
FIAT 7 03/23/17
STENA AB 7.875 03/15/20
CYFROWY POLSAT 7.125 05/20/18
KERLING PLC 10.625 02/01/17
EILEME 2 AB 11.75 01/31/20
SHCAEFFLER FBV 6.75 07/01/17
UPCB FINANCE LTD 7.625 01/15/20
CNH FIAT IND FIN 6.25 03/09/18
UNITYMEDIA KABEL 9.625 12/01/19
HEIDELBERGCEM LUX 7.5 04/03/20
WENDEL SA 4.875 05/26/16
SUNRISE COMM 8.5 12/31/18
EDP FINANCE BV 5.75 09/21/17
CROWN NEWCO 3 PLC 7 02/15/18
JAGUAR LAND ROVER 8.125 05/15/18
BOPRAN FINANCE 9.875 04/30/18
DAILY MAIL & GT 5.75 12/07/18
MONTE PASCHI SIENA 4.5 03/07/14
Amount
Market Price
Market Price
Total
Accrued
Interest
600
200
350
400
800
700
400
900
600
500
300
300
600
700
900
400
400
700
6
800
1,100
400
600
1,600
300
550
400
250
700
300
500
600
700
400
650
1,200
250
300
300
450
900
1,100
700
1,000
1,100
14
500
900
500
700
200
200
200
29,161.55
30,089.61
21,402.56
28,930.63
28,715.35
29,452.26
31,315.92
31,560.69
22,126.50
30,997.93
29,043.62
19,934.38
28,329.20
22,179.62
21,839.93
20,853.89
21,476.77
29,352.98
2,938,136.24
17,606.19
29,197.48
29,568.95
18,648.52
21,062.77
29,159.63
19,767.47
31,031.39
21,783.93
30,323.27
28,350.59
26,979.34
23,260.46
20,854.08
23,530.03
29,207.63
30,027.08
31,206.36
29,359.15
29,213.93
33,239.37
29,664.80
29,733.50
31,161.38
30,482.89
33,448.35
1,467,443.19
29,926.71
30,197.67
34,781.99
35,790.71
36,251.14
35,749.57
27,467.51
17,496,930.60
6,017,922.60
7,490,896.71
11,572,253.00
22,972,277.00
20,616,579.20
12,526,368.75
28,404,621.00
13,275,902.81
15,498,964.50
8,713,087.05
5,980,315.45
16,997,521.35
15,525,735.16
19,655,938.45
8,341,554.20
8,590,706.66
20,547,084.25
17,628,817.43
14,084,952.00
32,117,225.53
11,827,579.75
11,189,113.27
33,700,436.00
8,747,889.38
10,872,110.79
12,412,555.00
5,445,982.50
21,226,291.80
8,505,178.13
13,489,671.88
13,956,277.61
14,597,859.11
9,412,010.55
18,984,956.25
36,032,500.80
7,801,589.75
8,807,744.44
8,764,179.83
14,957,718.41
26,698,319.78
32,706,849.31
21,812,967.40
30,482,887.50
36,793,188.03
20,544,204.63
14,963,354.25
27,177,900.75
17,390,995.18
25,053,498.75
7,250,227.48
7,149,914.75
5,493,501.75
675,387.59
285,727.17
106,861.17
198,812.47
284,243.22
252,986.23
345,555.00
143,361.37
146,469.58
221,923.48
52,564.58
102,578.44
51,280.99
289,395.53
311,838.45
262,103.45
96,264.86
964,477.14
304,755.62
290,949.75
1,624,645.57
33,709.90
327,354.64
636,608.00
82,275.00
242,806.96
49,707.81
21,759.06
978,872.53
32,567.19
793,634.42
181,532.75
348,344.60
13,345.56
645,582.60
1,786,156.44
157,479.49
65,134.38
361,810.03
604,207.03
208,258.59
1,054,291.28
976,311.22
212,638.98
546,785.94
561,526.88
0.00
392,722.24
431,956.88
233,976.64
108,332.04
24,886.13
202,193.63
182
Investiční společnost České spořitelny, a. s., High Yield dluhopisový – otevřený podílový fond, 2013 Annual Report
ISIN
Name of the security
XS0555929263
XS0521356567
XS0467785613
XS0759200321
XS0928189777
XS0908821639
PTBESWOM0013
TELENET FIN. LUX 6.375 11/15/20
EC FINANCE PLC 9.75 08/01/17
SMURFIT 7.75 11/15/19
FRESENIUS FIN. BV 4.25 04/15/19
INEOS GRP HOLDING 6.5 08/15/18
REXEL SA 5.125 06/15/20
BANCO ESPIRITO 5.875 11/09/15
Foreign corporate bonds
Total
Amount
Market Price
Market Price
Total
Accrued
Interest
400
400
200
200
500
300
4
29,660.14
29,974.43
29,978.95
30,087.69
28,184.12
28,970.95
2,876,676.81
11,864,055.00
11,989,771.20
5,995,790.63
6,017,538.65
14,092,062.00
8,691,284.18
11,506,707.25
87,417.19
442,685.21
53,135.94
48,565.10
559,546.18
17,569.14
88,285.96
938,462,317.42
938,462,317.42
20,626,155.22
20,626,155.22
183
Independent Auditor’s Report
to the Participation certiﬁcate holders of Investiční společnost České spořitelny, a. s.,
BONDINVEST – otevřený podílový fond
We have audited the accompanying ﬁnancial statements of Investiční společnost České spořitelny, a. s., BONDINVEST – otevřený podílový
fond, which comprise the balance sheet as at 31 December 2013, and the income statement and statement of changes in equity for the year
then ended, and a summary of signiﬁcant accounting policies and other explanatory information. For details of Investiční společnost České
spořitelny, a. s., BONDINVEST – otevřený podílový fond, see Note 1 to the ﬁnancial statements.
Management’s Responsibility for the Financial Statements
Management of Investiční společnost České spořitelny, a. s., is responsible for the preparation and fair presentation of these ﬁnancial statements in accordance with accounting principles generally accepted in the Czech Republic, and for such internal control as management determines is necessary to enable the preparation of ﬁnancial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these ﬁnancial statements based on our audit. We conducted our audit in accordance with the
Act on Auditors and International Standards on Auditing as amended by implementation guidance of the Chamber of Auditors of the Czech
Republic. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
whether the ﬁnancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the ﬁnancial statements. The procedures selected depend on the auditor’s judgment, including an assessment of the risks of material misstatement of the ﬁnancial statements,
whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation
and fair presentation of the ﬁnancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the ﬁnancial statements.
We believe that the audit evidence we have obtained is sufﬁcient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the ﬁnancial statements present fairly, in all material respects, the ﬁnancial position of Investiční společnost České
spořitelny, a. s., BONDINVEST – otevřený podílový fond as at 31 December 2013, and its ﬁnancial performance for the year then ended in
accordance with accounting principles generally accepted in the Czech Republic.
Emphasis of Matter
We draw attention to the matter described in Note 2 to the ﬁnancial statements of Investiční společnost České spořitelny, a. s., BONDINVEST – otevřený podílový fond which indicates that the management of Investiční společnost České spořitelny, a. s. intends to terminate
Investiční společnost České spořitelny, a. s., BONDINVEST – otevřený podílový fond with liquidation in 2014. Consequent to this fact, the
ﬁnancial statements of Investiční společnost České spořitelny, a. s., BONDINVEST – otevřený podílový fond have not been prepared on
a going concern basis. Our audit opinion is not qualiﬁed with respect to this matter.
31 March 2014
Prague, Czech Republic
Ernst & Young Audit, s.r.o.
License No. 401
Represented by partner
Roman Hauptﬂeisch
Auditor, Licence no. 2009
A member ﬁrm of Ernst & Young Global Limited,
Ernst & Young Audit, s. r. o. with its registred ofﬁce at Na Florenci 2116/15, 110 00 Prague 1 – Nové Město,
has been incorporated in the Commercial Register administered by the Municipal Court in Prague,
Section C, entry No. 88504, under Identiﬁcation No. 26704153.
184
Investiční společnost České spořitelny, a. s., BONDINVEST – otevřený podílový fond, 2013 Annual Report
Balance Sheet
at 31 December 2013
(in thousands CZK)
Current
Previous
5,008
5,008
43,681
43,681
0
14,183
658
0
94
564
0
8,022
8,022
57,181
52,993
4,188
8,374
586
25
0
561
10
63,530
74,173
2,987
819
0
2,168
51
(5,409)
20,358
33,686
12,158
(301)
2,402
0
187
2,215
61
(3,417)
12,903
42,611
12,158
7,455
Total Liabilities
63,530
74,173
of which: Equity
60,492
71,710
3 Receivables from banks and credit unions
of which: a/ on demand: aa/ current accounts
5 Debt securities
of which: a/ issued by the government
b/ issued by other entities
6 Shares, unit certiﬁcates and other participation interests
11 Other assets
a/ derivatives
c/ receivables from taxes
d/ other assets
13 Prepayments and accrued income
Total Assets
4 Other liabilities
a/ derivatives
c/ liabilities from taxes
d/ other liabilities
5 Deferred income and accrued expenses
9 Share premium
10 Reserve funds and other funds from proﬁt
12 Capital funds
14 Retained earnings or accumulated losses from previous periods
15 Proﬁt or loss for the accounting period
Line
185
Investiční společnost České spořitelny, a. s., BONDINVEST – otevřený podílový fond, 2013 Annual Report
Off Balance Sheet Accounts
at 31 December 2013
(in thousands CZK)
4 Amounts due from ﬁxed term transactions
b/ with currency instruments
7 Assets provided into custody, administration and safekeeping
of which: securities
12 Amounts owed from ﬁxed term transactions
b/ with currency instruments
Line
Current
Previous
52
54
60
61
64
66
13,167
13,167
57,864
57,864
13,986
13,986
8,473
8,473
65,555
65,555
8,448
8,448
186
Investiční společnost České spořitelny, a. s., BONDINVEST – otevřený podílový fond, 2013 Annual Report
Proﬁt and Loss Account
for the year ended 31 December 2013
(in thousands CZK)
1 Interest income and similar income
of which: a/ interest income from bonds
5 Commission and fee expenses
a/ fees and commissions from securities trading
b/ management fee
c/ custody fee
d/ other ﬁnancial expenses
6 Proﬁt or loss on ﬁnancial operations
a/ proﬁt or loss on transactions with securities
b/ proﬁt or loss on foreign exchange transactions
c/ proﬁt or loss on ﬁxed term transactions and options
9 Administrative expenses
of which: b/ other administrative expenses: ba/ audit
19 Ordinary proﬁt or loss for the accounting period before tax
23 Income tax
24 Proﬁt or loss for the accounting period after tax
Line
Current
Previous
1
2
10
11
12
13
14
15
16
17
18
21
22
26
30
31
2,185
2,177
731
3
599
73
56
(1,587)
(659)
102
(1,030)
168
168
(301)
0
(301)
2,684
2,652
798
5
652
80
61
5,989
5,534
34
421
233
233
7,642
187
7,455
187
Investiční společnost České spořitelny, a. s., BONDINVEST – otevřený podílový fond, 2013 Annual Report
Statement of Changes in Equity
for the year ended 31 December 2013
(in thousands CZK)
Line
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Current
Previous
(3,417)
0
(1,992)
0
(5,409)
(2,052)
0
(1,365)
0
(3,417)
12,903
7,455
0
20,358
10,008
2,895
0
12,903
42,611
0
(8,925)
0
0
33,686
51,291
0
(8,680)
0
0
42,611
0
0
0
0
0
0
1 Share premium
opening balance
issued unit certiﬁcates
repurchase of unit certiﬁcates
other changes
closing balance
2 Retained earnings
opening balance
transfers to funds
other changes
closing balance
3 Capital funds
opening balance
issued unit certiﬁcates
repurchase of unit certiﬁcates
transfers to funds
other changes
closing balance
4 Gains or losses from revaluation
opening balance
foreign exchange rate differences and gains or losses from revaluation not
included in proﬁt (loss)
closing balance
5 Retained earnings or accumulated losses from previous periods
opening balance
other changes
closing balance
6 Proﬁt (loss) for the current period after taxes
opening balance
proﬁt (loss)
transfers to funds, dividends
closing balance
21
22
23
24
25
26
27
28
29
30
31
12,158
0
12,158
12,158
0
12,158
7,455
(301)
(7,455)
(301)
2,895
7,455
(2,895)
7,455
7 Total
32
60,492
71,710
188
Investiční společnost České spořitelny, a. s., BONDINVEST – otevřený podílový fond, 2013 Annual Report
Notes to the Financial Statements
for the year ended 31 December 2013
1. Organisation and Description of
Business
Formation and Description of the Business
Investiční společnost České spořitelny, a. s., BONDINVEST –
otevřený podílový fond (hereinafter the “Fund” or “ISČS, a. s. –
BONDINVEST OPF”) is an accounting unit without legal entity
status, formed by Investiční společnost České spořitelny, a. s.
(hereinafter the “Company”) as an open-ended mutual fund under
the Investment Companies and Funds Act No. 248/1992 Coll., as
amended, based upon the Resolution of the Ministry of Finance
of the Czech Republic dated 27 October 1994. The decision came
into effect on 14 December 1994.
Pursuant to a concluded contract, Česká spořitelna, a. s. acts as the
depository of the Fund.
The Fund is managed by the Company. In compliance with the
Collective Investment Act No. 189/2004 Coll. (hereinafter the
“Act”), the Company is responsible for the management of the assets of the Fund, which involves the administration and handling
of the assets.
The Fund is a standard fund in compliance with the Act and meets
the requirements of EU legislation.
According to the classiﬁcation binding for the members of the
Capital Market Association (hereinafter the “AKAT CR”) as at the
date of the approval of this Statute, the Fund can be deﬁned as
a bond fund.
Registered Ofﬁce
Investiční společnost České spořitelny, a. s.
BONDINVEST – otevřený podílový fond
Prague 6, Evropská 2690/17
Principal Business
The Company collects funds from individuals and legal entities by
issuing participation certiﬁcates with the purpose of their collective investment on local and foreign ﬁnancial markets. No restrictions are placed on the number of participation certiﬁcates for issue
and the period for which the Fund is established. The Company reserves the right to temporary halt the issuing of participation certificates for no longer than three months in compliance with the Act.
The participation certiﬁcates of the Fund are available both in the
Czech Republic and in other EU member countries.
The Fund is a standard collective investment fund that meets the
requirements of EC legislation. This also entails that the Fund is
subject to supervision which is equivalent to the supervision pursuant to the EU legislation, the level of protection of the participation
certiﬁcate holders’ assets is equivalent to the protection provided
to participation certiﬁcate holders of other collective investment
funds that fulﬁl the requirements of Council Directive No. 85/611/
EEC as of 20 December 1985, on the coordination of legal and
administrative regulations regarding collective investment entities
transferable into securities, as amended by Council Directive No.
88/220/EEC, Directive 95/26/ES of the European Parliament and
Council, Directive 2001/107/EC of the European Parliament and
Council and Directive 2001/108/ EC of the European Parliament
and Council. The Company prepares mid-year and annual reports
on the administration of the Fund assets, which provide a true view
of the assets and liabilities, revenues and transactions in the reporting period.
Investment Policy of the Fund
The objective of the Fund’s investment policy is to provide participation certiﬁcate holders with a long-term appreciation of their
investments on condition that the overall risk proﬁle of the Fund
minimises the likelihood of losses within two years. The aim is
achieved by investing in a widely diversiﬁed portfolio of securities
with ﬁxed or variable interest income and active management of
interest rate risk.
The Fund is a standard fund pursuant to the Collective Investment
Act. The Company fulﬁls the requirements of the EU legislation
when managing the Fund’s assets.
The ﬁnances collected in the Fund can be invested in securities of
the collective investment funds if such collective investment fund
invests in identical classes of assets as a standard fund in compliance with the Act, spreads the risk connected to investments,
repurchases securities which it issued or ensures that the exchange
rate or price of these securities on the regulated market does not
signiﬁcantly differ from their current amount provided that it has
been authorised by a supervision body of the state where it has its
registered ofﬁce and falls subject to supervision which the Czech
National Bank considers equivalent to the supervision within the
European Union member states and provided that the cooperation
between the Czech National Bank and this supervision body is ensured and the protection of owners of securities issued by this collective investment fund is equivalent to the protection provided to
owners of securities issued by a collective investment fund fulﬁlling the requirements of the EC legislation; this collective investment fund must principally comply with provisions on borrowing,
lending and sales of assets for a short time (Sections 33 to 35 of
the Collective Investment Act), separating its assets in account189
Investiční společnost České spořitelny, a. s., BONDINVEST – otevřený podílový fond, 2013 Annual Report
ing pursuant to Section 16 (1) of the Collective Investment Act,
prepare and publish mid-year and annual reports, which provide
a true view of assets and liabilities, revenues and transactions in
the reporting period, and its Statute can allow investments up to
the maximum of 10 percent of the value of its assets into securities
issued by another collective investment fund.
The Fund also invests in securities denominated in foreign currencies.
The Fund can also purchase bonds which can be exchanged for
shares or which carry the priority right for the subscription of
shares into the portfolio of the Fund. In the event of claiming the
rights arising from these bonds for the acquisition of shares, the
shares must not exceed 10 percent of the value of the Fund’s assets.
The portfolio of the Fund predominantly includes state bonds with
ﬁxed coupons denominated in CZK, or state bonds of other countries with developed bond markets. The foreign currency risk is
usually hedged. The Fund also invests in corporate bonds, treasury
bills, bank deposits or bonds with embedded derivatives.
The Company can use ﬁnancial derivatives to effectively manage
the Fund’s assets. Efﬁcient asset management represents transactions for the purpose of decreasing risk, decreasing costs or achieving sufﬁcient income for the Fund provided that the risk is demonstrably low. The exposure from these transactions must be fully
covered by the Fund’s assets so that liabilities arising from these
transactions are fulﬁlled.
The limits of the Fund are adhered to on the basis of the Act, or
they are regulated in the Fund’s Statute in compliance with the Act.
Change in the Fund’s Statute
Czech National Bank Resolution No. 2012/4691/570, dated 18
May 2012, which came into force on 5 June 2012: The changes
to the Funds statute related mainly to the duty
of the asset investment company to ensure that its statute is in accordance
with the amendment to Act 189/2004 Coll., on collective investments (as ensuing
from the changes made by Act 188/2011
Coll.) and Decree No. 193/2011 Coll.,
on the minimum
requisites of the statute and on the conditions for the use of the
name Short-Term Money Market Fund and Money Market Fund.
Investment objectives, the method of investing and the risk proﬁle
of the Fund have not been changed in the amendments referred to
above.
Along with the change made to the statute, information was updated as to the list
of funds managed by the Company (Article II Paragraph 8 of the statute), in particular information on the
managing parties of the asset management company (Appendix 1
to the statute), information added on the performance of the Fund
for 2011 (Appendix 2 to the statute), information updated on the
total cost indicators for 2011, and the date on which the statute being signed was updated.
On the date the changes to the statute came into force the simple statute of the Fund was replaced by a newly processed document providing required key information
for investors.
Such key information for investors was processed in accordance
with Commission (EU) Regulation No. 583/2012. As at 1 February 2013, information on Fund`s 2012 performance was published
within the document Key investors information. (According to the
article 23, section 3 of Council Regulation (EC) no. 583/2010, the
performance must be updated within the Key investors information up to 35 days from the previous calendar year end.)
The updated text of the Funds statute was approved by the Investment company`s board of directors as at 10 April 2013. The changes in the statute text related to an update of the list of managed
funds, an update of the information on the length of professional
experience of Investment company management, an additional of
information on Fund’s performance and the Fund’s benchmark
performance, an update of information on total expense ratio for
2012 and an update of the date of the signature. These updates
were not subject to preliminary approval from Czech national bank
(according to the section 84 (a), subsection 5 of Act no. 189/2004
Coll., Act on Collective Investment. The shareholders could access
the updated text of the Statute and Key investors information as of
10 April 2013 on http://www.iscs.cz/, at the distributor’s branches
(Ceska sporitelna, a. s.) and at the Investment company seat.
Board of Directors announced a strategic plan to liquidate the mutual fund Bondinvest in 2014 on its meeting on 18 October 2013.
The strategic plan was published on 25 October 2013, within
a period of at least six months in advance (Article XI Paragraph
3 of the Statute) in press, on the Internet at http://www.iscs.cz/ ,
at distributor`s branches (Česká spořitelna, a. s.) and at seat of the
Investment company. In the published notice the Investment company advised the shareholders of the mutual fund Bondinvest to
submit an order to sale of their participation certiﬁcates of Bondinvest Fund within six-month period. The reason for the recommendation to sell participation certiﬁcates of Bondinvest Fund was the
impossibility to submit orders to sale of participation certiﬁcates
after date of liquidation of the Fund. Remaining shareholders of
the Fund Bondinvest will have to wait until the payment of the
share on the liquidation proceeds.
Management Policy
The proﬁt/(loss) is based on the difference between income and
expenses related to the management of the Fund’s assets.
Since 2008 the generated proﬁt has been fully retained by the
Fund, in the reinvestment fund, as a source for further investments,
and increases the participation certiﬁcate value. In the event that
the Fund incurs a loss from the Company’s management of assets, the loss is covered from the reinvestment fund which was
created from earnings brought forward. If the reinvestment fund is
not sufﬁcient, the loss must be covered by a reduction in the Fund’s
capital fund.
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Investiční společnost České spořitelny, a. s., BONDINVEST – otevřený podílový fond, 2013 Annual Report
The Fund’s assets must not be used for the provision of loans, borrowings or gifts, to secure a third party’s obligation or to settle
a payable which is not related to the Fund’s management. This
provision does not affect Sections 26 and 27 of the Collective Investment Act.
When managing the Fund’s assets, contracts for the sale of securities and money market instruments, securities issued by other collective investment funds and ﬁnancial derivatives which are not
owned by the Fund at the moment of concluding the respective
contracts, may not be entered into.
The Company can accept loans and borrowings for the maximum
of six months when managing the Fund’s assets, to cover temporary needs related to the management of the Fund’s assets or
purchases of participation certiﬁcates. The volume of the received
loans and borrowings is not allowed to exceed 10 percent of the
value of the Fund’s assets.
Legislative change
Act No 240/2013 Coll., Act on Management Companies and Investment Funds became effective as of 19 August 2013. Rules
stated by this act must be implemented by investment companies
and investment funds by 22 July 2014. In 2013, the Fund`s management was subject to the rules of the Act No. 189/2004 Coll.,
On collective investment schemes. The new rules will be applied
as of 2014.
2. Basis of Preparation
The ﬁnancial statements have been prepared on the basis of underlying accounting records maintained in accordance with Accounting Act No. 563/1991 Coll., and applicable regulations, decrees and internal standards in compliance with and in the scope
deﬁned in Czech Finance Ministry Regulation No. 501/2002 of
6 November 2002, as subsequently amended, which sets out the
overall framework for the presentation of the ﬁnancial statements,
and guidelines for the structure and minimum requirements for the
content of the ﬁnancial statements of banks and certain ﬁnancial
institutions, and Czech Accounting Standards for Financial Institutions, which establish the accounting principles and policies.
The basis of preparation and the accounting policies have been
consistently applied during both 2013 and 2012.
The Fund is obliged to comply with the regulatory requirements
of the Act.
The ﬁnancial statements are presented in compliance with general
accounting principles, speciﬁcally the accrual principle and the
prudence concept.
Coll., Act on Management Companies and Investment Funds.
The Investment company converts Fund’s assets into cash and
repays its Fund’s debts within six months after liquidation date.
The Investment company submits application for cancellation of
the Fund from a mutual funds list after completion of liquidation
and within three months pays shareholders their shares on the liquidation proceeds (section 376 of Act No. 240/2013 Coll., Act on
Management Companies and Investment Funds).
The ﬁnancial statements of the Fund were not prepared on a going concern basis for this reason. Applied accounting policies and
methods of valuation of assets and liabilities of the Fund did not
require changes in valuation or classiﬁcation of assets and liabilities of the Fund as at 31 December 2013.
The ﬁnancial statements contain the balance sheet, proﬁt and loss
account, statement of changes in equity, and notes to the ﬁnancial
statements.
The presentation of the ﬁnancial statements requires that the
Company make estimates which have an impact on the reported
amounts of assets and liabilities as at the date of the ﬁnancial statements as well as expenses and income in the relevant accounting
period. These estimates are based on information available as at
the date of the ﬁnancial statements and may differ from the actual
results.
As a result of continued market volatility since the start of the
global ﬁnancial crisis, the Fund may be exposed to increased risk,
speciﬁcally due to the uncertainty regarding possible asset impairments and future developments on the market. The ﬁnancial
statements have been prepared based on the current best estimates
using all relevant and available information as at the date of the
ﬁnancial statements.
These ﬁnancial statements are unconsolidated.
All amounts are stated in thousands of Czech crowns (CZK), unless indicated otherwise.
Explanation Added for Translation into English
These ﬁnancial statements are presented on the basis of accounting
principles and standards generally accepted in the Czech Republic.
Certain accounting practices applied by the Company that conform with generally accepted accounting principles and standards
in the Czech Republic may not conform with generally accepted
accounting principles in other countries.
3. Accounting Policies
Transaction Recognition Date
Board of Directors has an intention to liquidate the Fund in 2014.
The Investment company is authorised to make decision of liquidation of mutual fund under section 375 (a) Act No. 240/2013
Purchases and sales of securities are recognised using trade date
accounting provided that the period between the trade date and the
191
Investiční společnost České spořitelny, a. s., BONDINVEST – otevřený podílový fond, 2013 Annual Report
fulﬁlment of the commitment arising from the contract does not
exceed a period typical for the relevant type of transaction.
The transaction recognition date for derivative contracts is:
a) the date upon which the related contract was entered into;
b) the date when fulﬁlment was delivered based on the relevant
contract.
The transaction recognition date can also be the date when money
in circulation is paid or received, the date when foreign currency is
purchased or sold, the date when a payment is made, the date when
ownership is acquired or terminated, when a receivable or payable
arises, changes or ceases to exist, when assets move within an accounting entity, and the date when other matters to be included
in the accounting records occur, or when the documents supporting these other matters are available, or when other matters are
a consequence of internal conditions of the accounting entity and/
or special regulations.
Securities
In accordance with the Fund’s strategy, all securities are classiﬁed
as securities at fair value through proﬁt or loss. During the accounting period, securities are re-measured at fair value on a daily
basis pursuant to the Finance Ministry Regulation No. 194/2011
Coll., on more detailed regulation of certain rules in collective investment (the “Decree”), as amended.
The securities of the Fund are accounted for as securities at fair
value through proﬁt or loss. The fair value of the securities is determined in accordance with the International Financial Reporting
Standards with an exception, that an average price between the
most favourable binding offer and demand (MID price) is used
for bonds.
Pursuant to the Regulation, securities are valued at the price quoted
on a public market which is adjusted, as appropriate, to reﬂect the
rules set out in the Regulation. If the market value is unavailable,
the Fund uses a value determined by the Company using valuation models based on discounted future cash ﬂows according to
the yield curve calculated using the Reuters and Kondor+ systems.
Securities are measured at cost upon initial recognition using the
weighted average method. The acquisition cost includes direct
transaction costs related to the acquisition of securities.
Realised capital gains or losses are recorded in the proﬁt and loss
account within ‘Proﬁt or loss from ﬁnancial operations’.
Accrued interest relating to assets is included within the total balance of these assets.
Receivables and Payables
The Fund records receivables arising from its transactions with
securities and other operating receivables at their nominal value,
while receivables from positive fair values of derivatives are re-
corded at the fair value of the derivatives at the balance sheet date.
Pursuant to the prudence principle, provisions are created based on
the aging of receivables.
The Fund records payables arising from its transactions with securities and operating payables at their nominal value, while payables from negative fair values of derivatives are recorded at the fair
value of the derivatives at the balance sheet date.
Financial Derivatives and Hedging Transactions
In the normal course of business, the Fund enters into hedging
contracts with ﬁnancial derivatives to hedge against interest rate
and foreign currency exposures associated with its transactions on
ﬁnancial markets. The method of fair value hedges is applied to
hedging derivatives.
The Fund designates certain derivatives as hedges provided that
the following criteria are met:
– the Fund has developed a risk management strategy;
– at the inception of the hedge, the hedging relationship is formally documented, the documentation identiﬁes the hedged
item and the hedging instrument, and it deﬁnes the risk that
is being hedged and the approach to establishing whether the
hedge is effective; and
– the hedge is effective, that is, changes in the fair value or cash
ﬂows of the hedged item are almost fully offset by changes in
the fair value or cash ﬂows of the hedging instrument and the
results are within a range of 80 percent to 125 percent.
Nominal values of derivative ﬁnancial instruments are recognised
in the off-balance sheet accounts. Changes in the fair value of derivatives that are designated and qualify as hedges (see above) are
recorded as income or expense. Changes in the fair value of the
hedging derivatives attributable to the risk hedged are recognised
in the same income or expense accounts as differences from revaluation of a hedged instrument.
All ﬁnancial derivatives are recorded as assets when the fair value
is positive and as liabilities when the fair value is negative. Fair
values are derived from valuation models.
Derivatives that are not designated as hedging derivatives are
treated as trading derivatives. These derivatives are measured at
fair value on a daily basis and gains and losses on revaluation are
posted to expense and income accounts.
Certain derivatives are embedded in compound ﬁnancial instruments, which comprise the host instrument and the derivative. Pursuant to the applicable regulations, the Fund recognises changes in
assets and liabilities arising from the movements in rates or prices
of securities or changes in exchange rates through expense and income accounts. Given that the assets of the Fund are valued at fair
value and changes of fair values are reported within expenses and
income from derivatives, embedded derivatives are not accounted
for separately.
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Income Tax
Under effective tax regulations, the income tax rate applicable to
mutual funds is 5 percent.
Deferred Tax
Deferred tax is provided using the liability method on all temporary differences between the carrying amount of assets and liabilities reported in the balance sheet and their value for tax purposes.
Deferred tax assets are recognised only up to the amount of probable future taxable income against which the deferred tax asset can
be offset.
Foreign Currency Translations
Foreign currencies are translated using the exchange rate promulgated by the Czech National Bank as at the relevant date. As at the
balance sheet date, assets and liabilities denominated in foreign
currencies are translated on the same basis.
Foreign exchange rate gains and losses from the daily translation
of assets and liabilities in foreign currencies are posted to expense
or income accounts.
Capital Funds
The selling price of participation certiﬁcates is calculated as a proportion of the Fund’s net asset value and the relevant number of
participation certiﬁcates. Participation certiﬁcates are sold to investors using the selling price determined on a daily basis.
events are disclosed in the notes to the ﬁnancial statements but not
recognized in the ﬁnancial statements.
4. Risk Management
Credit Risk
In accordance with the Statute and the investment strategy, the
Company establishes rules and policies for selecting investment
instruments such that the overall credit risk proﬁle of allocated investments is consistent with the characteristics of the Fund. New
types of instruments are approved on a case by case basis by the
risk management function together with the speciﬁcation of limits
for positions pertaining to these instruments. Speciﬁc emphasis is
placed on an appropriate rating structure and a relatively detailed
diversiﬁcation of portfolios (especially in relation to interest bearing securities).
Market Risk
The Fund uses a wide range of tools to eliminate risk exposures
attached to its portfolios. Signiﬁcant attention is paid to market
risks. Apart from statutory restrictions, the Fund is subject to a set
of internal limits having a direct impact on the FX exposure, interest rate exposure (the modiﬁed duration range of the Fund), equity
allocation on individual markets according to their volatility, portfolio rating structure (see above), and other characteristics of the
Fund. The relevant limits are appropriately applied to correspond
with the type of the Fund.
Share Premium
Share premium is the difference between the nominal value of all
participation certiﬁcates and their carrying amounts as at the date
of their issue or purchase.
Interest Income and Expense and Dividend
Income
Interest income and expense are recognised using the accrual principle.
Dividend income is recognised as at the date when the right to
receive the payment is established (ex-dividend date). Dividend income from domestic securities is presented after withholding tax.
Dividend income from foreign securities is presented gross with
the applicable taxes presented within taxes on foreign dividends
(see note 5.14).
Whenever the Fund purchases new types of instruments, these instruments are ﬁrst analysed to assess the potential credit risk, as
well as the market risk that the instruments might bring to or help
eliminate from the portfolio. Subsequently, their appropriateness
and, if appropriate, the acceptable proportion of these instruments
in the portfolio is evaluated.
The level of the Fund’s market risk exposure is measured using
the Value at Risk (“VaR”). With effect from 1 August 2006, the
VaR for the Company’s Funds is calculated by the Central Risk
Management Department of Česká spořitelna using the historical
simulation method in the K + KvaR system.
Set out below are relative monthly values of the VaR in percentage
terms for individual types of risks:
Subsequent Events
The impact of events that occurred between the balance sheet date
and the date of the ﬁnancial statements preparation is recognized in
the ﬁnancial statements provided these events provide additional
evidence about conditions that existed at the date of the balance
sheet.
Global VaR
Foreign currency VaR
Interest rate VaR
Equity VaR
31 Dec 2013
Average
VaR
1.58%
0.10%
1.54%
0.31%
1.68%
0.08%
1.62%
0.33%
If material events reﬂecting the facts occurring after the balance
sheet date happened between the balance sheet date and the date
of the ﬁnancial statements preparation the consequences of these
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Investiční společnost České spořitelny, a. s., BONDINVEST – otevřený podílový fond, 2013 Annual Report
31 Dec 2012
Average
VaR
1.17%
0.07%
1.17%
0.27%
1.54%
0.05%
1.59%
0.24%
Global VaR
Foreign currency VaR
Interest rate VaR
Equity VaR
The average VaR is calculated as average of daily VaR values in
years 2013 and 2012 respectively.
The Fund monitors Value at Risk globally and also broken down to
Foreign Currency VaR, Interest Rate VaR and Equity VaR. Based
on the above values, the Fund identiﬁes critical risk segments. This
identiﬁcation inﬂuences the reinvestment process. The limits set
the maximum acceptable VaR for the Fund.
The Equity VaR also reﬂects the risk related to the holding of mutual funds’ participation certiﬁcates (including funds of money
market and bond funds).
Adherence to all the above limits and their effectiveness is monitored and assessed on an ongoing basis. The limits are reviewed,
if necessary.
The portfolio’s risk of unfavourable development of foreign exchange rates, interest rates, and other market factors is hedged, to
an appropriate extent, by ﬁnancial derivatives. Financial derivatives are traded on the OTC market as this market enables the trading of contracts whose parameters and nature appropriately satisfy
the requirements of a hedge. Portfolios primarily include currency
swaps, currency forwards and interest rate swaps.
Liquidity Risk
Another monitored risk is the liquidity risk. Liquidity risk is a risk
that the Fund will not have enough available resources to meet its
obligations arising from ﬁnancial contracts. Liquidity is monitored
and managed based on expected cash ﬂows, with appropriate adjustments made to the structure of securities and term placements
portfolios.
Pursuant to the Act, the Company is obliged to repurchase a participation certiﬁcate without undue delay but not later than 15 business days from the date when the repurchase right is claimed. Given that the Fund holds securities traded on foreign stock exchanges
which can be realised within a few days, the Fund’s inability to
meet its obligations due to lack of liquidity is unlikely.
The Company is obliged to repurchase a participation certiﬁcate
without undue delay but not later than 15 business days from the
date when the repurchase right is claimed, if the purchase of a participation certiﬁcate is not suspended.
Pursuant to Section 12 of the Collective Investment Act, the Company can suspend issues and purchases of the Fund’s participation
certiﬁcates for a maximum of three months, if necessary due to the
protection of rights or the participation certiﬁcate holders’ interests
protected by law. Issuing and purchasing participation certiﬁcates
can be suspended particularly at the end or beginning of the calendar year, in the event of natural disasters, upon very strong ﬂuctuations on ﬁnancial markets and upon high requirements for the
sales or purchases of participation certiﬁcates provided they could
endanger the Fund’s assets.
The quantitative information about the residual maturity of assets
and liabilities is given in Note 5.16.
5. Additional Information on the Financial Statements
5.1 Receivables from Banks
Receivables from banks
31 Dec 2013 31 Dec 2012
Current accounts
5,008
8,022
Total
5,008
8,022
Balances on current accounts are repayable on demand.
5.2 Securities
Individual types of securities by issuer, number of securities, their market value and interest rate are disclosed in the Portfolio attached to
the annual report. All securities held by the Fund are publicly listed on the Prague Stock Exchange or foreign stock exchanges. Participation
certiﬁcates which are not listed on stock exchanges are purchased and administered by the Company.
Shares, participation certiﬁcates and other holdings
31 Dec 2013 31 Dec 2012
Acquisition cost
Market revaluation
13,001
1,182
7,728
646
Total
14,183
8,374
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Investiční společnost České spořitelny, a. s., BONDINVEST – otevřený podílový fond, 2013 Annual Report
Debt securities
31 Dec 2013 31 Dec 2012
Acquisition cost
Market revaluation
Accrued interest income
44,362
(1,293)
612
52,096
4,051
1,034
Total
43,681
57,181
Debt securities maturing within one year accounted for 0 percent (2012: 7.32 percent).
Debt securities maturing within more than one year with a ﬁxed coupon accounted for 100 percent (2012: 92.68 percent).
5.3 Other Assets
Other assets
31 Dec 2013 31 Dec 2012
Financial derivatives – positive fair value
Other receivables
Other assets
–
564
94
25
561
–
Total
658
586
‘Other receivables’ mainly include receivables from coupons of CZK 556 thousand (2012: CZK 556 thousand).
5.4 Equity
The Fund has no share capital. The nominal value of participation certiﬁcates is CZK 5,000 and CZK 50,000. The total nominal value of all
participation certiﬁcates is posted to ‘capital funds’.
Share premium arising from the difference between the nominal and selling values of the participation certiﬁcates is recorded separately.
The Fund accounts for share premium upon the sale of participation certiﬁcates as well as upon their repurchase.
The selling price of the participation certiﬁcate is determined as the share of the Fund’s net asset value and the number of issued participation
certiﬁcates whereby, for the calculation purposes, one participation certiﬁcate with the nominal value of CZK 50,000 is treated as ten pieces.
The value of a participation certiﬁcate as at the last trading date in 2013 totalled CZK 6,105.95 (2012: CZK 6,133.50) with respect to
a participation certiﬁcate with a nominal value of CZK 5,000. This is the most recent announced value of the participation certiﬁcate for the
year, for which purchases and repurchases of the participation certiﬁcates of the Fund were undertaken. This value minimally differs from
the accounting value of the participation certiﬁcate at the balance sheet date due to additional recognition of some items within the ﬁnancial
statements.
In line with the Fund’s Statute, the loss for 2013 in the amount of CZK 301 thousand will be covered by reduction the reinvestment fund
within ‘Other funds from proﬁt’.
In line with the Fund’s Statute, the proﬁt for 2012 in the amount of CZK 7,455 thousand was transferred to the reinvestment fund within
‘Other funds from proﬁt’.
5.5 Changes in the Capital Fund
Number of
Nominal
participation
value of
certiﬁcates participation
certiﬁcates
Use of the Total capital
capital fund
funds
Balance at 31 Dec 2011
13,428
67,140
(15,849)
Participation certiﬁcates purchased
(1,736)
(8,680)
-
(8,680)
Balance at 31 Dec 2012
11,692
58,460
(15,849)
42,611
Participation certiﬁcates purchased
(1,785)
(8,925)
-
(8,925)
9,907
49,535
(15,849)
33,686
Balance at 31 Dec 2013
51,291
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5.6 Other Liabilities
Other liabilities
31 Dec 2013 31 Dec 2012
Negative fair values of ﬁnancial derivatives
State budget settlement
Payables to participation certiﬁcate holders
Other liabilities
819
–
2,148
20
–
187
2,210
5
Total
2,987
2,402
5.7 Prepayments and Accrued Income
Prepayments and accrued income
31 Dec 2013 31 Dec 2012
Prepayments – audit fees
–
10
Total
–
10
5.8 Accrued Expenses and Deferred Income
Accrued expenses consist of the unbilled custody fee of CZK 6 thousand related to December (2012: CZK 7 thousand) and the unbilled
management fee of CZK 45 thousand related to December (2012: CZK 54 thousand).
5.9 Financial Derivatives Designated as Hedging Derivatives
Nominal value of the derivatives
31 Dec 2013
31 Dec 2012
Assets
Liabilities
Assets
Currency swaps
13,167
13,986
8,473
Liabilities
8,448
Total
13,167
13,986
8,473
8,448
Open positions of derivatives posted to an off-balance sheet are converted to fair value daily as of 1 January 2011 (up to 31 August 2013
futures were converted monthly; as of 1 September 2013 they are converted on daily basis) and recorded in absolute values.
Fair value of the derivatives
31 Dec 2013
31 Dec 2012
Positive
Negative
Positive
Currency swaps
–
819
25
Negative
–
Total
–
819
25
–
2013
2012
Interest on deposits at banks
Interest on debt securities
8
2,177
32
2,652
Total
2,185
2,684
Currency derivatives designated as hedging derivatives are due within one year.
5.10 Interest Income
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5.11 Fees and Commissions
2013
2012
Management fees
Custody fees
Commissions and fees from securities trading
Administration of securities
Fees – central depository
Fees for administration of short-term bonds
Other fees and commissions
599
73
3
31
1
7
17
652
80
5
36
2
6
17
Total
731
798
In compliance with the Statute of the Fund, the management fee paid to the Company by the Fund amounts to 0.90 percent of the average
annual net asset value.
Pursuant to the custody service contract, the Fund pays a fee equal to 0.11 percent of its average annual net asset value to the depositary.
If participation certiﬁcates of another mutual fund managed by the Company are purchased and added to the Fund’s assets, the Fund’s aggregate net asset value reduced by the current value of investments in participation certiﬁcates of the other mutual fund managed by the
Company is used as the basis for the calculation of the ﬁxed part of the management fee.
5.12 Proﬁt or Loss from Financial Operations
2013
2012
Proﬁt or loss from securities at fair value through proﬁt or loss
Proﬁt or loss from derivatives
Proﬁt or loss from FX differences
(659)
(1,030)
102
5,534
421
34
Total
(1,587)
5,989
Proﬁt or loss from securities at fair value through proﬁt or loss primarily comprises the proﬁt or loss from the realised sales of securities,
from payable securities and from the daily valuation of securities at fair value.
Proﬁt or loss from derivatives includes proﬁt or loss on the settlement of ﬁxed term transactions with ﬁnancial instruments and also the
revaluation of open derivatives at fair value.
Proﬁt or loss from FX differences represents the value of realised FX proﬁt or loss from foreign currency accounts and from the settlement
of foreign currency receivables and payables and also gains or losses arising from the revaluation of assets, with the exception of securities,
and liabilities in foreign currency at fair value.
5.13 Administrative Expenses
2013
2012
Audit
168
233
Total
168
233
2013
2012
5.14 Income Tax
The principal income tax components are as follows:
Tax payable – current year
–
187
Total income tax
–
187
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Investiční společnost České spořitelny, a. s., BONDINVEST – otevřený podílový fond, 2013 Annual Report
Current income tax – analysis:
Proﬁt (Loss) before tax
Items to add
Deductible items
Tax base
Tax loss utilisation
Adjusted tax base
Tax (5%) on tax base
Foreign dividends
Tax on foreign dividends
Total tax
2013
2012
(301)
–
–
(301)
–
–
–
–
–
7,642
–
–
7,642
(3,902)
3,740
187
–
–
–
187
Deferred tax
As at 31 December 2013, the Fund determined a deferred tax asset of CZK 15 thousand arising from a tax loss. The deferred tax asset was
not recorded on the basis that its recovery was uncertain.
As at 31 December 2012, no temporary differences existed between the tax bases of assets and liabilities and their carrying amounts for
ﬁnancial reporting purposes.
5.15 Related Party Transactions
Related parties include Česká spořitelna, a. s. and Investiční společnost České spořitelny, a. s.
31 Dec 2013 31 Dec 2012
Unbilled management fee – Investiční společnost
Unbilled custody fee – Česká spořitelna
Other payables to related parties
45
6
3
54
7
6
Total payables to related parties
54
67
The costs charged to the Fund by Česká spořitelna, a. s. amounted to CZK 132 thousand in 2013 (2012: CZK 146 thousand), of which the
greatest portion is represented by an annual custody fee of CZK 73 thousand (2012: CZK 80 thousand). The costs charged by the Company
amounted to CZK 599 thousand (2012: CZK 652 thousand), which is the annual management fee.
5.16 Liquidity
The following tables show the residual maturity of assets and liabilities broken down by major classes of assets.
Given that all securities are traded on public markets, sales can easily be undertaken within three months.
2013
Assets
Less than
3 months
3 month –
1 year
1 – 5 years Over 5 years
Not
speciﬁed
Total
Receivables from banks
Debt securities
Participation certiﬁcates
Other assets
Prepayments and accrued income
5,008
–
–
658
–
–
–
–
–
–
–
23,138
–
–
–
–
20,543
–
–
–
–
–
14,183
–
–
5,008
43,681
14,183
658
–
Total assets
5,666
–
23,138
20,543
14,183
63,530
Other liabilities
Net assets
Available capital
(3,021)
2,645
(60,492)
(17)
(17)
–
–
23,138
–
–
20,543
–
–
14,183
–
(3,038)
60,492
(60,492)
Difference
(57,847)
(17)
23,138
20,543
14,183
–
Liabilities
198
Investiční společnost České spořitelny, a. s., BONDINVEST – otevřený podílový fond, 2013 Annual Report
2012
Assets
Less than
3 months
3 month –
1 year
8,022
4,188
−
586
−
−
−
−
−
10
−
11,914
−
−
−
12,796
10
Other liabilities
Net assets
Available capital
(2,276)
10,520
(71,710)
Difference
(61,190)
Receivables from banks
Debt securities
Participation certiﬁcates
Other assets
Prepayments and accrued income
Total assets
1 – 5 years Over 5 years
Not
speciﬁed
Total
−
41,079
−
−
−
−
−
8,374
−
−
8,022
57,181
8,374
586
10
11,914
41,079
8,374
74,173
(187)
(177)
−
−
11,914
−
−
41,079
−
−
8,374
−
(2,463)
71,710
(71,710)
(177)
11,914
41,079
8,374
−
Liabilities
Liquidity risk, to which the Fund is exposed, is low as all assets are immediately convertible into cash before the expected purchases of
participation certiﬁcates from participation certiﬁcate holders can be undertaken.
5.17 Off-balance Sheet Assets and Liabilities
The Fund’s off-balance sheet accounts include receivables and payables from ﬁxed term transactions and assets provided into custody and
safekeeping. The item ‘Assets provided into custody, administration and safekeeping’ shows foreign and domestic securities administered
by Česká spořitelna, a. s. (this item does not include participation certiﬁcates of open-ended mutual funds of the Company, which the Fund
maintains in its portfolio).
5.18 Contingent Assets and Liabilities
The Fund has no assets or liabilities that were not disclosed in the balance sheet or off-balance sheet accounts.
5.19 Subsequent Events
No signiﬁcant events occurred after the date of the ﬁnancial statements, which would have a material impact on the Fund’s ﬁnancial statements.
199
Investiční společnost České spořitelny, a. s., BONDINVEST – otevřený podílový fond, 2013 Annual Report
Portfolio at 31 December 2013
The detail of the portfolio is not part of the fund’s ﬁnal accounts. Figures are stated in CZK.
ISIN
Name of the security
CZ0001002547
CZ0001002471
CZ0001001945
CZ0001001903
CZ0001001317
CZ0001000749
CZ0001000822
GOVERNMENT BOND 5.7 05/25/24
GOVERNMENT BOND 5 04/11/19
GOVERNMENT BOND 4.7 09/12/22
GOVERNMENT BOND 4 04/11/17
GOVERNMENT BOND 3.75 09/12/20
GOVERNMENT BOND 6.95 01/26/16
GOVERNMENT BOND 4.6 08/18/18
Amount
Market Price
Market Price
Total
Accrued
Interest
100
800
500
200
300
800
1,000
12,890.50
11,905.00
11,892.60
11,090.00
11,193.10
11,380.50
11,629.50
1,289,050.00
9,524,000.00
5,946,300.00
2,218,000.00
3,357,930.00
9,104,400.00
11,629,500.00
34,041.67
287,777.78
70,500.00
57,555.56
33,750.00
-40 155.56
168,666.67
43,069,180.00
612,136.12
630
366
2,250
3,371.08
4,128.83
4,688.03
2,123,781.03
1,511,153.15
10,548,066.38
0.00
0.00
0.00
14,183,000.56
57,252,180.56
0.00
612,136.12
Local government bonds after 1 January 1998
AT0000676846
AT0000A05HS1
AT0000658968
ESPA CASH CORPORATE-PLUS-T
ESPA BOND BRIK-CORP. (VT)
ESPA BOND EURO-CORPORATE (VT)
Foreign participation certiﬁcates
Total
200
Independent Auditor’s Report
to the Participation certiﬁcate holders of Investiční společnost České spořitelny, a. s.,
SPOROTREND – otevřený podílový fond
We have audited the accompanying ﬁnancial statements of Investiční společnost České spořitelny, a. s., SPOROTREND – otevřený podílový fond, which comprise the balance sheet as at 31 December 2013, and the income statement and statement of changes in equity for the
year then ended, and a summary of signiﬁcant accounting policies and other explanatory information. For details of Investiční společnost
České spořitelny, a. s., SPOROTREND – otevřený podílový fond, see Note 1 to the ﬁnancial statements.
Management’s Responsibility for the Financial Statements
Management of Investiční společnost České spořitelny, a. s., is responsible for the preparation and fair presentation of these ﬁnancial statements in accordance with accounting principles generally accepted in the Czech Republic, and for such internal control as management determines is necessary to enable the preparation of ﬁnancial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these ﬁnancial statements based on our audit. We conducted our audit in accordance with the
Act on Auditors and International Standards on Auditing as amended by implementation guidance of the Chamber of Auditors of the Czech
Republic. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
whether the ﬁnancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the ﬁnancial statements. The procedures selected depend on the auditor’s judgment, including an assessment of the risks of material misstatement of the ﬁnancial statements,
whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation
and fair presentation of the ﬁnancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the ﬁnancial statements.
We believe that the audit evidence we have obtained is sufﬁcient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the ﬁnancial statements present fairly, in all material respects, the ﬁnancial position of Investiční společnost České
spořitelny, a. s., SPOROTREND – otevřený podílový fond, as at 31 December 2013, and its ﬁnancial performance for the year then ended
in accordance with accounting principles generally accepted in the Czech Republic.
31 March 2014
Prague, Czech Republic
Ernst & Young Audit, s.r.o.
License No. 401
Represented by partner
Roman Hauptﬂeisch
Auditor, Licence no. 2009
A member ﬁrm of Ernst & Young Global Limited,
Ernst & Young Audit, s. r. o. with its registred ofﬁce at Na Florenci 2116/15, 110 00 Prague 1 – Nové Město,
has been incorporated in the Commercial Register administered by the Municipal Court in Prague,
Section C, entry No. 88504, under Identiﬁcation No. 26704153.
201
Investiční společnost České spořitelny, a. s., SPOROTREND – otevřený podílový fond, 2013 Annual Report
Balance Sheet
at 31 December 2013
(in thousands CZK)
Line
Current
Previous
1
2
13
15
16
19
21
85,429
85,429
3,058,951
3,508
529
2,979
0
48,130
48,130
3,573,089
17,750
13,119
4,631
14
22
3,147,888
3,638,983
29
31
32
33
34
39
40
41
46
47
20,377
4,014
11,063
5,300
5,505
950,035
1,709,395
244,513
397,000
(178,937)
10,930
0
9,382
1,548
6,410
984,401
1,500,198
530,847
397,000
209,197
Total Liabilities
48
3,147,888
3,638,983
of which: Equity
49
3,122,006
3,621,643
3 Receivables from banks and credit unions
of which: a/ on demand: aa/ current accounts
6 Shares, unit certiﬁcates and other participation interests
11 Other assets
a/ derivatives
d/ other assets
13 Prepayments and accrued income
Total Assets
4 Other liabilities
b/ liabilities from securities trading'
c/ liabilities from taxes
d/ other liabilities
5 Deferred income and accrued expenses
9 Share premium
10 Reserve funds and other funds from proﬁt
12 Capital funds
14 Retained earnings or accumulated losses from previous periods
15 Proﬁt or loss for the accounting period
202
Investiční společnost České spořitelny, a. s., SPOROTREND – otevřený podílový fond, 2013 Annual Report
Off Balance Sheet Accounts
at 31 December 2013
(in thousands CZK)
4 Amounts due from ﬁxed term transactions
b/ with currency instruments
7 Assets provided into custody, administration and safekeeping
of which: securities
12 Amounts owed from ﬁxed term transactions
b/ with currency instruments
Line
Current
Previous
52
54
60
61
64
66
221,069
221,069
3,058,951
3,058,951
220,540
220,540
781,043
781,043
3,573,089
3,573,089
767,924
767,924
203
Investiční společnost České spořitelny, a. s., SPOROTREND – otevřený podílový fond, 2013 Annual Report
Proﬁt and Loss Account
for the year ended 31 December 2013
(in thousands CZK)
1 Interest income and similar income
b/ interest income from repo transactions
d/ interest income from collaterals
2 Interest expenses and similar expenses
3 Income from shares and unit certiﬁcates
5 Commission and fee expenses
a/ fees and commissions from securities trading
b/ management fee
c/ custody fee
d/ other ﬁnancial expenses
6 Proﬁt or loss on ﬁnancial operations
a/ proﬁt or loss on transactions with securities
b/ proﬁt or loss on foreign exchange transactions
c/ proﬁt or loss on ﬁxed term transactions and options
9 Administrative expenses
of which: b/ other administrative expenses: ba/ audit
12 Release of provisions and bad debt allowances to receivables and guarantees,
income from receivables written off
Depreciation, creation and utilizing of provisions and bad debt allowances to
13 receivables and guarantees
19 Ordinary proﬁt or loss for the accounting period before tax
23 Income tax
24 Proﬁt or loss for the accounting period after tax
Line
Current
Previous
1
3
5
6
9
10
11
12
13
14
15
16
17
18
21
22
797
2
1
0
105,560
77,045
3,243
63,835
3,511
6,456
(189,220)
(174,694)
(730)
(13,796)
269
269
1,397
0
0
5
96,824
88,348
3,469
72,181
3,970
8,728
216,554
229,996
(2,554)
(10,888)
264
264
24
1,971
732
25
26
30
31
6,057
(164,263)
14,674
(178,937)
3,170
223,720
14,523
209,197
204
Investiční společnost České spořitelny, a. s., SPOROTREND – otevřený podílový fond, 2013 Annual Report
Statement of Changes in Equity
for the year ended 31 December 2013
(in thousands CZK)
Line
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16
17
18
19
20
Current
Previous
984,401
48,179
(82,545)
0
950,035
960,846
139,724
(116,397)
228
984,401
1,500,198
209,197
0
1,709,395
3,532,729
0
(2 032,531)
1,500,198
530,847
410,040
(696,374)
0
0
244,513
542,190
821,892
(833,235)
0
0
530,847
0
0
0
0
0
0
1 Share premium
opening balance
issued unit certiﬁcates
repurchase of unit certiﬁcates
other changes
closing balance
2 Retained earnings
opening balance
transfers to funds
other changes
closing balance
3 Capital funds
opening balance
issued unit certiﬁcates
repurchase of unit certiﬁcates
transfers to funds
other changes
closing balance
4 Gains or losses from revaluation
opening balance
foreign exchange rate differences and gains or losses from revaluation not
included in proﬁt (loss)
closing balance
5 Retained earnings or accumulated losses from previous periods
opening balance
other changes
closing balance
6 Proﬁt (loss) for the current period after taxes
opening balance
proﬁt (loss)
transfers to funds, dividends
closing balance
21
22
23
24
25
26
27
28
29
30
31
397,000
0
397,000
397,000
0
397,000
209,197
(178,937)
(209,197)
(178,937)
(2 032,531)
209,197
2,032,531
209,197
7 Total
32
3,122,006
3,621,643
205
Investiční společnost České spořitelny, a. s., SPOROTREND – otevřený podílový fond, 2013 Annual Report
Notes to the Financial Statements
for the year ended 31 December 2013
1. Organisation and Description of
Business
The Company reserves the right to temporary halt the issuing of
participation certiﬁcates for no longer than three months in compliance with the Act.
Formation and Description of the Business
Investiční společnost České spořitelny a.s., SPOROTREND –
otevřený podílový fond (hereinafter the “Fund” or “ISČS, a. s. –
Sporotrend OPF”) is an accounting unit without legal entity status,
formed by Investiční společnost České spořitelny, a. s. (hereinafter the “Company”) as an open-ended mutual fund under Investment Companies and Funds Act No. 248/1992 Coll., based upon
the Resolution of the Ministry of Finance of the Czech Republic
dated 13 November 1997. The Fund commenced its activities on
31 March 1998.
Based on the Company’s request dated 16 July 1999, the Securities
Commission resolved, on 21 September 1999, to merge two openended mutual funds, namely Investiční společnost Čechoinvest
and Investiční společnost Moravoinvest, with the open-ended mutual fund Investiční společnost SPOROTREND, under Section 35f
(3) of Act No. 248/1992 Coll. The merger was performed as at 28
December 1999.
The participation certiﬁcates of the Fund are available both in the
Czech Republic and in other EU member countries.
Investment Policy of the Fund
The objective of the investment policy is to provide participation
certiﬁcate holders with a long-term appreciation of participation
certiﬁcates primarily through investments in shares of companies
in European Union candidate or new member states. The Company
operates on capital markets with the aim of appreciating the assets in the Fund by making gains from differences between selling
prices and acquisition prices and dividend income from securities
held by the Fund.
The Fund may invest in securities of collective investment index
funds, if such a collective investment fund invests in the same
types of assets, distributes the risk connected to investments and
meets other obligations set by the Act.
Pursuant to a concluded contract, Česká spořitelna, a. s. acts as the
depository of the Fund.
The Company can use ﬁnancial derivatives to effectively manage
the Fund’s assets.
The Fund is managed by the Company. In compliance with the
Collective Investment Act No. 189/2004 Coll. (hereinafter the
“Act”), the Company is responsible for the management of the assets of the Fund, which involves the administration and handling
of the assets.
The portfolio of the mutual fund could also be expanded by purchasing other investment instruments approved for collective investments of standard funds under the Act.
The Fund is a standard fund in compliance with the Act and meets
the requirements of EU legislation.
According to the classiﬁcation binding for the members of the
Capital Market Association (hereinafter the “AKAT CR”) as at the
date of the approval of this Statute, the Fund can be deﬁned as an
equity fund.
The limits of the Fund are adhered to on the basis of the Act, or
they are regulated in the Fund’s Statute in compliance with the Act.
The Company can use ﬁnancial derivatives to effectively manage
the Fund’s assets. Efﬁcient asset management represents transactions for the purpose of decreasing risk, decreasing costs or achieving sufﬁcient income for the Fund provided that the risk is demonstrably low. The exposure from these transactions must be fully
covered by the Fund’s assets so that liabilities arising from these
transactions are fulﬁlled.
Registered Ofﬁce
Investiční společnost České spořitelny, a. s.
SPOROTREND – otevřený podílový fond
Prague 6, Evropská 2690/17
Management Policy
Principal Business
The generated proﬁt has been fully retained by the Fund, in the reinvestment fund, as a source for further investments, and increases
the participation certiﬁcate value. In the event that the Fund incurs
a loss from the Company’s management of assets, the loss is covered from the reinvestment fund which was created from earnings
The Company collects funds from individuals and legal entities for
the Fund by issuing participation certiﬁcates with the purpose of
their collective investment on local and foreign ﬁnancial markets.
No restrictions are placed on the number of participation certiﬁcates for issue and the period for which the Fund is established.
The proﬁt/(loss) is based on the difference between income and
expenses related to the management of the Fund’s assets.
206
Investiční společnost České spořitelny, a. s., SPOROTREND – otevřený podílový fond, 2013 Annual Report
brought forward. If the reinvestment fund is not sufﬁcient, the loss
must be covered by a reduction in the Fund’s capital fund.
The Fund’s assets must not be used for the provision of loans, borrowings or gifts, to secure a third party’s obligation or to settle
a payable which is not related to the Fund’s management. This
provision does not affect Sections 26 and 27 of the Collective Investment Act.
When managing the Fund’s assets, contracts for the sale of securities and money market instruments, securities issued by other collective investment funds and ﬁnancial derivatives which are not
owned by the Fund at the moment of concluding the respective
contracts, may not be entered into.
The Company can accept loans and borrowings for the maximum
of six months when managing the Fund’s assets, to cover temporary needs related to the management of the Fund’s assets or
purchases of participation certiﬁcates. The volume of the received
loans and borrowings is not allowed to exceed 10 percent of the
value of the Fund’s assets.
Change in the Statute
As at 1 February 2013, information on Fund`s 2012 performance
was published within the document Key investors information.
(According to the article 23, section 3 of Council Regulation (EC)
no. 583/2010, the performance must be updated within the Key investors information up to 35 days after the previous calendar year
end.)
The updated text of the Funds statute was approved by the Investment company`s board of directors as at 10 April 2013. The
changes in the statute text related to an update of the list of managed funds, update of the information on the length of professional
experience of Investment company management, addition of information on Fund’s performance and the Fund`s benchmark`s
performance, an update of information on total expense ratio for
2012 and update of the date of the signature. These updates were
not subject to preliminary approval from Czech national bank (according to the section 84 (a), subsection 5 of 189/2004 Coll., Act
on collective investment schemes). The shareholders could access
the updated text of the Statute and Key investors information as of
10 April 2013 on http://www.iscs.cz/, at the distributor’s branches
(Ceska sporitelna, a. s.) and at the Investment company seat.
2. Basis of Preparation
The ﬁnancial statements have been prepared on the basis of underlying accounting records maintained in accordance with Accounting Act No. 563/1991 Coll., and applicable regulations, decrees and internal standards in compliance with and in the scope
deﬁned in Czech Finance Ministry Regulation No. 501/2002 of
6 November 2002, as subsequently amended, which sets out the
overall framework for the presentation of the ﬁnancial statements,
and guidelines for the structure and minimum requirements for the
content of the ﬁnancial statements of banks and certain ﬁnancial
institutions, and Czech Accounting Standards for Financial Institutions, which establish the accounting principles and policies.
The basis of preparation and the accounting policies have been
consistently applied during both 2013 and 2012.
The Fund is obliged to comply with the regulatory requirements
of the Act.
The ﬁnancial statements are based on the accrual principle, that is,
transactions and other events are recognised in the accounting period in which they occur, regardless of when the related monetary
ﬂow arises. The ﬁnancial statements are presented in compliance
with general accounting principles, speciﬁcally the accrual principle, the prudence concept and the going concern assumption.
The ﬁnancial statements contain the balance sheet, proﬁt and loss
account, statement of changes in equity, and notes to the ﬁnancial
statements.
The presentation of the ﬁnancial statements requires that the
Company makes estimates which have an impact on the reported
amounts of assets and liabilities as at the date of the ﬁnancial statements as well as expenses and income in the relevant accounting
period. These estimates are based on information available as at
the date of the ﬁnancial statements and may differ from the actual
results.
As a result of continued market volatility since the start of the
global ﬁnancial crisis, the Fund may be exposed to increased risk,
speciﬁcally due to the uncertainty regarding possible asset impairments and future developments on the market. The ﬁnancial
statements have been prepared based on the current best estimates
using all relevant and available information as at the date of the
ﬁnancial statements.
Legislative change
Act No 240/2013 Coll., Act on Management Companies and Investment Funds became effective as of 19 August 2013. Rules
stated by this act must be implemented by management companies
and investment funds by 22 July 2014. In 2013, the Fund`s management was subject to the rules of the Act No. 189/2004 Coll., Act
on collective investment schemes. The new rules will be applied
as of 2014.
These ﬁnancial statements are unconsolidated.
All amounts are stated in thousands of Czech crowns (CZK), unless indicated otherwise.
Explanation Added for Translation into English
These ﬁnancial statements are presented on the basis of accounting
principles and standards generally accepted in the Czech Republic.
Certain accounting practices applied by the Company that con207
Investiční společnost České spořitelny, a. s., SPOROTREND – otevřený podílový fond, 2013 Annual Report
form with generally accepted accounting principles and standards
in the Czech Republic may not conform with generally accepted
accounting principles in other countries.
3. Accounting Policies
Realised capital gains or losses are recorded in the proﬁt and loss
account within ‘Proﬁt or loss from ﬁnancial operations’.
Accrued interest relating to assets is included within the total balance of these assets.
Receivables and Payables
Transaction Recognition Date
Purchases and sales of securities are recognised using trade date
accounting provided that the period between the trade date and the
fulﬁlment of the commitment arising from the contract does not
exceed a period typical for the relevant type of transaction.
The transaction recognition date for derivative contracts is:
a) the date upon which the related contract was entered into;
b) the date when fulﬁlment was delivered based on the relevant
contract.
The transaction recognition date can also be the date when money
in circulation is paid or received, the date when foreign currency is
purchased or sold, the date when a payment is made, the date when
ownership is acquired or terminated, when a receivable or payable
arises, changes or ceases to exist, when assets move within an accounting entity, and the date when other matters to be included
in the accounting records occur, or when the documents supporting these other matters are available, or when other matters are
a consequence of internal conditions of the accounting entity and/
or special regulations.
Securities
In accordance with the Fund’s strategy, all securities are classiﬁed
as securities at fair value through proﬁt or loss. During the accounting period, securities are re-measured at fair value on a daily
basis pursuant to the Finance Ministry Regulation No. 194/2011
Coll., on more detailed regulation of certain rules in collective investment (the “Decree”), as amended.
The securities of the Fund are accounted for as securities at fair
value through proﬁt or loss. The fair value of the securities is determined in accordance with the International Financial Reporting
Standards with an exception, that an average price between the
most favourable binding offer and demand (MID price) is used
for bonds.
Pursuant to the Regulation, securities are valued at the price quoted
on a public market which is adjusted, as appropriate, to reﬂect the
rules set out in the Regulation. If the market value is unavailable,
the Fund uses a value determined by the Company using valuation models based on discounted future cash ﬂows according to
the yield curve calculated using the Reuters and Kondor+ systems.
Securities are measured at cost upon initial recognition using the
weighted average method. The acquisition cost includes direct
transaction costs related to the acquisition of securities.
The Fund records receivables arising from its transactions with
securities and other operating receivables at their nominal value,
while receivables from positive fair values of derivatives are recorded at the fair value of the derivatives at the balance sheet date.
Pursuant to the prudence principle, provisions are created based on
the aging of receivables.
The Fund records payables arising from its transactions with securities and operating payables at their nominal value, while payables from negative fair values of derivatives are recorded at the fair
value of the derivatives at the balance sheet date.
Financial Derivatives and Hedging Transactions
In the normal course of business, the Fund enters into hedging
contracts with ﬁnancial derivatives to hedge against interest rate
and foreign currency exposures associated with its transactions on
ﬁnancial markets. The method of fair value hedges is applied to
hedging derivatives.
The Fund designates certain derivatives as hedges provided that
the following criteria are met:
– the Fund has developed a risk management strategy;
– at the inception of the hedge, the hedging relationship is formally documented, the documentation identiﬁes the hedged
item and the hedging instrument, and it deﬁnes the risk that
is being hedged and the approach to establishing whether the
hedge is effective; and
– the hedge is effective, that is, changes in the fair value or cash
ﬂows of the hedged item are almost fully offset by changes in
the fair value or cash ﬂows of the hedging instrument and the
results are within a range of 80 percent to 125 percent.
Nominal values of derivative ﬁnancial instruments are recognised
in the off-balance sheet accounts. Changes in the fair value of derivatives that are designated and qualify as hedges (see above) are
recorded as income or expense. Changes in the fair value of the
hedging derivatives attributable to the risk hedged are recognised
in the same income or expense accounts as differences from revaluation of a hedged instrument.
All ﬁnancial derivatives are recorded as assets when the fair value
is positive and as liabilities when the fair value is negative. Fair
values are derived from valuation models.
Derivatives that are not designated as hedging derivatives are
treated as trading derivatives. These derivatives are measured at
fair value on a daily basis and gains and losses on revaluation are
posted to derivative expense and income accounts.
208
Investiční společnost České spořitelny, a. s., SPOROTREND – otevřený podílový fond, 2013 Annual Report
Certain derivatives are embedded in compound ﬁnancial instruments, which comprise the host instrument and the derivative. Pursuant to the applicable regulations, the Fund recognises changes in
assets and liabilities arising from the movements in rates or prices
of securities or changes in exchange rates through expense and income accounts. Given that the assets of the Fund are valued at fair
value and changes of fair values are reported within expenses and
income from derivatives, embedded derivatives are not accounted
for separately.
Share Premium
Repo Transactions
Dividend income is recognised as at the date when the right to
receive the payment is established (ex-dividend date). Dividend income from domestic securities is presented after withholding tax.
Dividend income from foreign securities is presented gross with
the applicable taxes presented within taxes on foreign dividends
(see note 5.17.).
Within its business, the Fund enters into repo transactions with ﬁnancial assets, representing a pair of transactions (a sell and a buy)
where both transactions (a spot sale and a forward repurchase) are
agreed at the same time, irrespective of whether one or two underlying agreements exist.
The sold securities continue to be held in the Fund’s portfolio (an
economic aspect) and valued. On a custodian asset account, a decrease in securities (a legal aspect) is recorded upon the settlement of sale and an increase is recorded upon the date of buy back
settlement. Daily interest income is recognised using the accrual
principle.
Income Tax
Under effective tax regulations, the income tax rate applicable to
mutual funds is 5 percent.
Deferred Tax
Deferred tax is provided using the liability method on all temporary differences between the carrying amount of assets and liabilities reported in the balance sheet and their value for tax purposes.
Deferred tax assets are recognised only up to the amount of probable future taxable income against which the deferred tax asset can
be offset.
Foreign Currency Translations
Foreign currencies are translated using the exchange rate promulgated by the Czech National Bank as at the relevant date. As at the
balance sheet date, assets and liabilities denominated in foreign
currencies are translated on the same basis.
Foreign exchange rate gains and losses from the daily translation
of assets and liabilities in foreign currencies are posted to expense
or income accounts.
Share premium is the difference between the nominal value of all
participation certiﬁcates and their carrying amounts as at the date
of their issue or purchase.
Interest Income and Expense and Dividend
Income
Interest income and expense are recognised using the accrual principle.
Subsequent Events
The impact of events that occurred between the balance sheet date
and the date of the ﬁnancial statements preparation is recognized in
the ﬁnancial statements provided these events provide additional
evidence about conditions that existed at the date of the balance
sheet.
If material events reﬂecting the facts occurring after the balance
sheet date happened between the balance sheet date and the date
of the ﬁnancial statements preparation the consequences of these
events are disclosed in the notes to the ﬁnancial statements but not
recognized in the ﬁnancial statements.
4. Risk Management
Credit Risk
In accordance with the Statute and the investment strategy, the
Company establishes rules and policies for selecting investment
instruments such that the overall credit risk proﬁle of allocated investments is consistent with the characteristics of the Fund. New
types of instruments are approved on a case by case basis by the
risk management function together with the speciﬁcation of limits
for positions pertaining to these instruments. Speciﬁc emphasis is
placed on an appropriate rating structure and a relatively detailed
diversiﬁcation of portfolios (especially in relation to interest bearing securities).
Market Risk
Capital Funds
The selling price of participation certiﬁcates is calculated as a proportion of the Fund’s net assets and the relevant number of participation certiﬁcates. Participation certiﬁcates are sold to investors
using the selling price determined on a daily basis.
The Fund uses a wide range of tools to eliminate risk exposures
attached to its portfolios. Signiﬁcant attention is paid to market
risks. Apart from statutory restrictions, the Fund is subject to a set
of internal limits having a direct impact on the FX exposure, interest rate exposure (the modiﬁed duration range of the Fund), equity
allocation on individual markets according to their volatility, portfolio rating structure (see above), and other characteristics of the
Fund. The relevant limits are appropriately applied to correspond
with the type of the Fund.
209
Investiční společnost České spořitelny, a. s., SPOROTREND – otevřený podílový fond, 2013 Annual Report
Whenever the Fund purchases new types of instruments, these instruments are ﬁrst analysed to assess the potential credit risk, as
well as the market risk that the instruments might bring to or help
eliminate from the portfolio. Subsequently, their appropriateness
and, if appropriate, the acceptable proportion of these instruments
in the portfolio is evaluated.
The level of the Fund’s market risk exposure is measured using
the Value at Risk (“VaR”). With effect from 1 August 2006, the
VaR for the Company’s Funds is calculated by the Central Risk
Management Department of Česká spořitelna using the historical
simulation method in the K + KvaR system.
Adherence to all the above limits and their effectiveness is monitored and assessed on an ongoing basis. The limits are reviewed,
if necessary.
The portfolio’s risk of unfavourable development of foreign exchange rates, interest rates, and other market factors is hedged, to
an appropriate extent, by ﬁnancial derivatives. Financial derivatives are traded on the OTC market as this market enables the trading of contracts whose parameters and nature appropriately satisfy
the requirements of a hedge. Portfolios primarily include currency
swaps, currency forwards and interest rate swaps.
Liquidity Risk
Set out below are relative monthly values of the VaR in percentage
terms for individual types of risks:
31 Dec 2013
Average
VaR
11.76%
4.72%
0.00%
11.91%
18.77%
4.57%
0.00%
18.54%
31 Dec 2012
Average
VaR
22.89%
4.25%
0.01%
22.32%
24.52%
3.40%
0.01%
23.93%
Global VaR
Foreign currency VaR
Interest rate VaR
Equity VaR
Global VaR
Foreign currency VaR
Interest rate VaR
Equity VaR
The average VaR is calculated as an average of daily VaR values in
years 2013 and 2012 respectively.
The Fund monitors Value at Risk globally and also broken down to
Foreign Currency VaR, Interest Rate VaR and Equity VaR. Based
on the above values, the Fund identiﬁes critical risk segments. This
identiﬁcation inﬂuences the reinvestment process. The limits set
the maximum acceptable VaR for the Fund.
The Equity VaR also reﬂects the risk related to the holding of mutual funds’ participation certiﬁcates (including funds of money
market and bond funds).
Another monitored risk is the liquidity risk. Liquidity risk is a risk
that the Fund will not have enough available resources to meet its
obligations arising from ﬁnancial contracts. Liquidity is monitored
and managed based on expected cash ﬂows, with appropriate adjustments made to the structure of securities and term placements
portfolios.
Pursuant to the Act, the Company is obliged to repurchase a participation certiﬁcate without undue delay but not later than 15 business days from the date when the repurchase right is claimed. Given that the Fund holds securities traded on foreign stock exchanges
which can be realised within a few days, the Fund’s inability to
meet its obligations due to lack of liquidity is unlikely.
Pursuant to Section 12 of the Collective Investment Act, the Company can suspend issues and purchases of the Fund’s participation
certiﬁcates for a maximum of three months, if necessary due to the
protection of rights or the participation certiﬁcate holders’ interests
protected by law. Issuing and purchasing participation certiﬁcates
can be suspended particularly at the end or beginning of the calendar year, in the event of natural disasters, upon very strong ﬂuctuations on ﬁnancial markets and upon high requirements for the
sales or purchases of participation certiﬁcates provided they could
endanger the Fund’s assets.
The quantitative information about the residual maturity of assets
and liabilities is given in Note 5.19.
5. Additional Information on the Financial Statements
5.1 Receivables from Banks
Receivables from banks
31 Dec 2013 31 Dec 2012
Current accounts
85,429
48,130
Total
85,429
48,130
Balances on current accounts are repayable on demand.
210
Investiční společnost České spořitelny, a. s., SPOROTREND – otevřený podílový fond, 2013 Annual Report
5.2 Securities
Individual types of securities by issuer, number of securities, their market value and interest rate are disclosed in the Portfolio attached to
the annual report. All securities held by the Fund are publicly listed on the Prague Stock Exchange or foreign stock exchanges. Participation
certiﬁcates which are not listed on stock exchanges are purchased and administered by the Company.
Shares, participation certiﬁcates and other holdings
31 Dec 2013 31 Dec 2012
Acquisition cost
Market revaluation
3,098,568
(39,617)
3,357,716
215,373
Total
3,058,951
3,573,089
5.3 Other Assets
Other assets
Receivables from security trading
Other receivables
Provisions against receivables
Positive fair values of ﬁnancial derivatives
Total
31 Dec 2013 31 Dec 2012
4,762
10,793
(12,576)
529
4,762
10,452
(10,583)
13,119
3,508
17,750
Other receivables include mainly receivables of CZK 10,793 thousand arising from foreign and domestic dividends (2012: CZK 10,452
thousand).
As at 31 December 2013, provisions were created against receivables from securities trading in the amount of CZK 4,762 thousand (2012:
CZK 4,762 thousand) and against other receivables in the amount of CZK 7,814 thousand (2012: CZK 5,821 thousand).
5.4 Prepayments and Accrued Income
Prepayments and accrued income
31 Dec 2013 31 Dec 2012
Prepayments – audit fees
–
14
Total
–
14
5.5 Equity
The Fund has no share capital. The nominal value of one participation certiﬁcate is CZK 1. The total nominal value of all participation
certiﬁcates is posted to ‘Capital funds’.
Share premium arising from the difference between the nominal and selling values of the participation certiﬁcates is recorded separately.
The Fund accounts for share premium upon the sale of participation certiﬁcates as well as upon their repurchase.
The selling price of the participation certiﬁcate is determined as the share of the Fund’s net assets and the number of issued participation
certiﬁcates.
The value of a participation certiﬁcate as at the last trading date in 2013 totalled CZK 1.1177 (2012: CZK 1.1761). This is the most recent
announced value of the participation certiﬁcate for the year, for which purchases and repurchases of the participation certiﬁcates of the Fund
were undertaken. This value differs insigniﬁcantly from the carrying value of a participation certiﬁcate as at 31 December 2013 because of
the addition of some items during the ﬁnancial statements preparation.
In line with the Fund’s Statute, the loss for 2013 in the amount of CZK 178,937 thousand will be covered by the reinvestment fund which
is part of ‘Other funds from proﬁt’.
In line with the Fund’s Statue, the proﬁt for 2012 in the amount of CZK 209,179 thousand was transferred to the reinvestment fund within
‘Other funds from proﬁt’.
211
Investiční společnost České spořitelny, a. s., SPOROTREND – otevřený podílový fond, 2013 Annual Report
5.6 Changes in the Capital Fund
Number of
Nominal Contribution
upon
participation
value of
merger
certiﬁcates participation
certiﬁcates
Balance at 31 Dec 2011
Participation certiﬁcates sold
Participation certiﬁcates purchased
Balance at 31 Dec 2012
Participation certiﬁcates sold
Participation certiﬁcates purchased
Balance at 31 Dec 2013
Use of fund Total capital
to cover
funds
losses
3,090,850,798
3,090,851
3,556
(2,552,217)
542,190
821,891,703
(833,234,917)
821,892
(833,235)
–
–
–
–
821,892
(833,235)
3,079,507,584
3,079,508
3,556
(2,552,217)
530,847
410,039,657
(696,374,520)
410,040
(696,374)
–
–
–
–
410,040
(696,374)
2,793,172,721
2,793,174
3,556
(2,552,217)
244,513
5.7 Other Liabilities
Other liabilities
31 Dec 2013 31 Dec 2012
Payables from participation certiﬁcate holders’ placements
Payable to the state budget
Negative fair values of ﬁnancial derivatives
Liabilities from securities sales
Other liabilities
4,464
11,063
–
4,014
836
665
9,382
–
–
883
Total
20,377
10,930
5.8 Accrued Expenses and Deferred Income
Accrued expenses consist of the unbilled custody fee of CZK 286 thousand for December 2013 (2012: CZK 332 thousand) and the management fee of CZK 5,203 thousand for December 2013 (2012: CZK 6,036 thousand), the unbilled fee for the local sub-register administration
of CZK 0 thousand for December 2013 (2012: CZK 24 thousand) and the unbilled fee of CZK 3 thousand for December 2013 paid to the
central depository (2012: CZK 3 thousand) and the unbilled fee for calculation of NAV and of participation certiﬁcate rate of CZK 13 thousand related to December 2013 (2012: CZK 15 thousand).
5.9 Financial Derivatives Designated as Trading Derivatives
Nominal value of the derivatives
31 Dec 2013
31 Dec 2012
Assets
Liabilities
Assets
Currency swaps
221,069
220,540
781,043
Liabilities
767,924
Total
221,069
220,540
781,043
767,924
Open positions of derivatives posted to an off-balance sheet are converted to fair value daily as of 1 January 2011 (up to 31 August 2013
futures were converted monthly; as of 1 September 2013 they are converted on daily basis) and recorded in absolute values.
Fair value of the derivatives
31 Dec 2013
31 Dec 2012
Positive
Negative
Positive
Currency swaps
529
–
13,119
Negative
–
Total
529
–
13,119
–
Currency derivatives are due within one year.
212
Investiční společnost České spořitelny, a. s., SPOROTREND – otevřený podílový fond, 2013 Annual Report
5.10 Income from Shares and Interests
2013
2012
Foreign dividends
Foreign dividends – previous period
105,393
167
95,124
1,700
Total received dividends
105,560
96,824
2013
2012
Interest on deposits at banks
Interest on compound margins
796
1
1,397
–
Total
797
1,397
2013
2012
Management fees
Custody fees
Commissions and fees from securities trading
Administration of securities
Expenses of administration of the local sub-register – Česká spořitelna
Central depository
Fee for calculation of NAV and of participation certiﬁcate rate
Other fees and commissions
63,835
3,511
3,243
3,895
300
39
156
2,066
72,181
3,970
3,469
6,427
283
38
177
1,803
Total
77,045
88,348
5.11 Interest Income
5.12 Fees and Commissions
In compliance with the Statute of the Fund, the management fee paid to the Company by the Fund amounts to 2.00 percent of the average
annual net asset value.
Pursuant to the custody service contract entered into with Česká spořitelna, a. s., the Fund pays a fee equal to 0.11 percent of its average
annual net asset value.
If participation certiﬁcates of another mutual fund managed by the Company are purchased and added to the Fund’s assets, the Fund’s aggregate net asset value reduced by the current value of investments in participation certiﬁcates of the other mutual fund managed by the
Company is used as the basis for the calculation of the ﬁxed part of the management fee.
5.13 Proﬁt or Loss from Financial Operations
2013
2012
Proﬁt or loss from securities at fair value through proﬁt or loss
Proﬁt or loss from ﬁxed term transactions
Proﬁt or loss from FX differences
(174,694)
(13,796)
(730,269)
229,996
(10,888)
(2,554)
Total
(189,220)
216,554
Proﬁt or loss from securities at fair value through proﬁt or loss primarily comprises the proﬁt or loss from the realised sales of securities,
from payable securities and from the daily valuation of securities at fair value.
Proﬁt or loss from derivatives includes proﬁt or loss on the settlement of ﬁxed term transactions with currency instruments and also the
revaluation of open derivatives at fair value.
Proﬁt or loss from FX differences represents the value of realised FX proﬁt or loss from foreign currency accounts and from the settlement
of foreign currency receivables and payables and also gains or losses arising from the revaluation of assets, with the exception of securities,
and liabilities in foreign currency at fair value.
213
Investiční společnost České spořitelny, a. s., SPOROTREND – otevřený podílový fond, 2013 Annual Report
5.14 Administrative Expenses
2013
2012
Audit
269
264
Total
269
264
2013
2012
5.15 Release of Provisions against Receivables
Decrease in provision against foreign dividends
1,971
732
Total
1,971
732
Creation of provisions against foreign dividends
2013
2012
Provisions against foreign dividends
Written-off receivables against foreign dividends
3,374
2,683
2,438
732
Total
6,057
3,170
2013
2012
Tax payable – current year
Additionally recorded tax
14,649
25
14,268
255
Total income tax
14,674
14,523
2013
2012
(164,264)
8,236
(107,531)
(263,559)
–
–
–
97,657
14,649
25
223,720
4,744
(97,555)
130,909
(130,909)
–
–
95,124
14,268
255
14,674
14,523
5.16 Creation of Provisions against Receivables and Written-off Receivables
5.17 Income Tax
The principal income tax components are as follows:
Current income tax – analysis:
Proﬁt (Loss) before tax
Items to add
Deductible items
Tax base
Tax loss utilisation
Adjusted tax base
Tax (5%) on tax base
Foreign dividends
Tax on foreign dividends
Additionally recorded tax
Total tax
Deferred tax
As at 31 December 2013, the Fund determined a deferred tax asset of CZK 119,094 thousand arising from a tax loss and provisions against
receivables. The deferred tax asset was not recorded on the basis that its recovery was uncertain.
As at 31 December 2012, the Fund determined a deferred tax asset of CZK 172,017 thousand arising from a tax loss and provisions against
receivables. The deferred tax asset was not recorded on the basis that its recovery was uncertain.
214
Investiční společnost České spořitelny, a. s., SPOROTREND – otevřený podílový fond, 2013 Annual Report
5.18 Related Party Transactions
Related parties include Česká spořitelna, a. s. and Investiční společnost České spořitelny, a. s.
31 Dec 2013 31 Dec 2012
Unbilled management fee – Investiční společnost
Unbilled custody fee – Česká spořitelna, a. s.
Unbilled fee for administration of the local sub-register – Česká spořitelna
Unbilled fee – the central depository – Česká spořitelna
Unbilled fee for calculation of NAV and of participation certiﬁcate rate
Other payables to related parties
Total payables to related parties
5,203
286
–
3
13
4,820
6,036
332
24
3
15
882
10,325
7,292
The costs charged to the Fund by Česká spořitelna, a. s. amounted to CZK 13,162 thousand in 2013 (2012: CZK 15,911 thousand), of which
the greatest portion was represented by custody fee of CZK 3,511 thousand (2012: CZK 3,970 thousand), and the fee paid to ČS, a. s. for
administration of securities accounts of CZK 3,895 thousand (2012: CZK 6,425 thousand).
The costs charged by the Company amounted to CZK 63,835 thousand (2012: CZK 72,181 thousand), which is the annual management fee.
5.19 Liquidity
The following tables show the residual maturity of assets and liabilities broken down by major classes of assets and liabilities.
2013
Assets
Less than 3
months
3 month – 1
year
1 – 5 years Over 5 years
Not
speciﬁed
Total
Receivables from banks
Shares and participation certiﬁcates
Other assets
Prepayments
85,429
–
–
–
–
–
529
–
–
–
–
–
–
–
–
–
–
3,058,951
2,979
–
85,429
3,058,951
3,508
–
Total assets
85,429
529
–
–
3,061,930
3,147,888
Other liabilities
Net assets
Available capital
(14,788)
70,641
(3,122,006)
(11,094)
(10,565)
–
–
–
–
–
–
–
–
3,061,930
–
(25,882)
3,122,006
(3,122,006)
Difference
(3,051,365)
(10,565)
–
–
3,061,930
–
Less than
3 months
3 month –
1 year
1 – 5 years Over 5 years
Not
speciﬁed
Total
Receivables from banks
Shares and participation certiﬁcates
Other assets
Prepayments
48,130
−
13,119
14
−
−
−
−
−
−
−
−
−
−
−
−
−
3,573,089
4,631
−
48,130
3,573,089
17,750
14
Total assets
61,263
−
−
−
3,577,720
3,638,983
Other liabilities
Net assets
Available capital
(7,958)
53,305
(3,621,643)
(9,382)
(9,382)
−
−
−
−
−
−
−
−
3,577,720
−
(17,340)
3,621,643
(3,621,643)
Difference
(3,568,338)
(9,382)
−
−
3,577,720
−
Liabilities
2012
Assets
Liabilities
Liquidity risk, to which the Fund is exposed, is low as all assets are immediately convertible into cash before the expected purchases of
participation certiﬁcates from participation certiﬁcate holders can be undertaken.
215
Investiční společnost České spořitelny, a. s., SPOROTREND – otevřený podílový fond, 2013 Annual Report
5.20 Off-balance Sheet Assets and Liabilities
The Fund’s off-balance sheet accounts include receivables and payables from ﬁxed term transactions and assets provided into custody and
safekeeping. Assets provided into custody, administration and safekeeping include domestic and foreign securities administrated by Česká
spořitelna, a. s.
5.21 Contingent Assets and Liabilities
The Fund has no assets or liabilities that were not disclosed in the balance sheet or off-balance sheet accounts.
5.22 Subsequent Events
No signiﬁcant events occurred after the date of the ﬁnancial statements, which would have a material impact on the Fund’s ﬁnancial statements.
216
Investiční společnost České spořitelny, a. s., SPOROTREND – otevřený podílový fond, 2013 Annual Report
Portfolio at 31 December 2013
The detail of the portfolio is not part of the fund’s ﬁnal accounts. Figures are stated in CZK.
ISIN
Name of the security
CZ0005112300
CZ0008002854
CZ0008019106
CEZ
INVESTICNI A POSTOVNI BANKA
KOMERCNI BANKA
Amount
Market Price Market Price Accrued Interest
Total
153,359.000
55,000.000
6,000.000
520.90
0.00
4,421.00
28,000.000
414,412.000
285,000.000
33,546.000
27,000.000
35,000.000
30,000.000
95,597,200.000
250,000.000
325,000.000
495,000.000
31,862.000
15,000.000
330.000
350.000
35,000.000
101,923.000
30,000.000
23,579.000
555,542.000
110,000.000
275,000.000
71,000.000
300,000.000
430,000.000
230,000.000
60,000.000
218,768.000
250,000.000
395,000.000
530,000.000
200,000.000
330,001.441
895,000.000
125,000.000
80,000.000
975,000.000
250,000.000
1,185,000.000
800,000.000
12,000.000
120,000.000
131,390.000
392,393.000
150,000.000
3,200,000.000
270,000.000
108,000.000
365,163.000
155,000.000
2,964.42
80.84
55.84
1,018.84
479.98
140.98
215.64
0.03
59.58
19.48
81.75
49.74
830.66
59,427.00
52,394.17
314.90
196.12
276.43
130.74
94.95
209.76
105.19
1,336.19
64.71
378.47
406.07
779.15
699.00
24.76
80.14
34.50
81.62
62.14
43.13
35.43
148.40
64.55
151.49
170.09
34.01
2,559.32
22.49
34.80
21.19
250.27
61.18
260.29
430.31
105.27
1,242.38
Local shares
PLPZU0000011
RU0009177331
TREENKA00011
AT0000818802
TRECOLA00011
TREULKR00015
TRAAEFES91A9
RU000A0JP5V6
US46630Q2021
TREEGYO00017
CA0662863038
US40425X2099
PLLWBGD00016
PLLPP0000011
RU0009091573
PLEURCH00011
AT0000969985
US12642X1063
PLCFRPT00013
GB00BF5SDZ96
ROSNGNACNOR3
PLENERG00022
HU0000068952
PLTLKPL00017
HU0000061726
HU0000123096
PLKGHM000017
AT0000652011
TRAAKGRT91O5
TRASAHOL91Q5
TRAYKBNK91N6
TRAKCHOL91Q8
TRAAKBNK91N6
TRAISCTR91N2
TREVKFB00019
TREMGTI00012
TRAGARAN91N1
US67812M2070
US3682872078
PLPGNIG00014
PLBZ00000044
HU0000096409
PLNETIA00014
RU0007252813
US80585Y3080
RU0009029540
PLPKO0000016
US6074091090
TRATCELL91M1
US6778621044
POWSECHNY ZAKLAD UBEZPIECZEN SA
MOSTOTREST CLS
ENKA ANSAAT VE SANAYI AS
DO CO RESTAURANTS AND CATERING
COCA-COLA ICECEK AS
ULKER BISKUVI SANAYI AS
ANADOLU EFES BIRACILIK VE
VTB BANK OJSC
VTB BANK OJSC (GDR) REG S
EMLAK KONUT GAYRIMENKUL YATIRIM
BANKERS PETROLEUM LTD
HYDRAULIC MACHINES AND SYS (GDR)
LUBELSKI WEGIEL BOGDANKA SA
LPP SA
AK TRANSNEFT OAO-PREF
EUROCASH SA
AT&S AUSTRIA TECHN SYS
CTC MEDIA INC
CYFROWY POLSAT SA
STOCK SPIRITS GROUP PLC
SOCIETATEA NATIONALA DE GAZE
ENERGA SA
MOL MAGYAR OLAJ – ES GAZIPARI RT
TELEKOMUNIKACJA POLSKA SA
OTP BANK
GEDEON RICHTER RT.
KGHM POLSKA MIEDZ S.A.
ERSTE GROUP BANK CZK
AKSIGORTA
HACI OMER SABANCI HOLDING
YAPI VE KREDI BANKASI SA
KOC HOLDING AS
AKBANK
ISBANK
TURKIYE VAKIFLAR BANKASI
MIGROS TURK TAS
GARANTIBANK
OAO ROSNEFT OIL (GDR)
GAZPROM (OAO SPON ADR REG S)
POLSKE GORNICTWO NAFTOWE I
BANK ZACHODNI WBK S.A.
FOTEX HOLDING SE CO LTD
NETIA S.A.
ALROSA AO
SBERBANK (SPONSORED ADR)
SBERBANK
PKO BANK POLSKI SA
MOBILE TELESYSTEMS-USD (ADR)
TURKCELL ILETISIM HIMZET
LUKOIL (ADR)
AÚV tržní
celkem
79,884,703.10
0.00
26,526,000.00
0.00
0.00
0.00
106,410,703.10
0.00
83,003,671.80
33,500,381.80
15,913,117.50
34,177,964.71
12,959,493.75
4,934,300.00
6,469,312.50
2,873,082.23
14,895,632.50
6,330,187.50
40,466,047.05
1,584,656.57
12,459,861.00
19,610,910.00
18,337,960.26
11,021,397.45
19,988,748.90
8,292,813.90
3,082,704.31
52,748,712.90
23,073,121.50
28,926,092.25
94,869,294.75
19,412,820.00
162,742,530.00
93,396,488.70
46,749,240.00
152,918,832.00
6,191,062.50
31,653,720.00
18,286,590.00
16,324,000.00
20,507,114.55
38,600,231.25
4,428,812.50
11,872,000.00
62,940,150.00
37,873,202.50
201,561,034.50
27,204,360.00
30,711,873.60
2,698,620.00
4,572,084.26
8,314,964.63
37,539,978.00
195,775,078.40
70,278,370.20
46,473,179.76
38,441,165.46
192,568,946.50
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
217
Investiční společnost České spořitelny, a. s., SPOROTREND – otevřený podílový fond, 2013 Annual Report
ISIN
Name of the security
TRAARCLK91H5
RU0009029524
US8688612048
US46626D1081
US6708312052
US48122U2042
TRAPETKM91E0
TRATOASO91H3
RU0009034490
US55953Q2021
BMG200452024
TRATHYAO91M5
US6698881090
TRETHAL00019
TREBIMM00018
RU000A0JPV70
US92718P2039
KYG876361091
PLJSW0000015
AT0000908504
TRETTLK00013
TRACLEBI91M5
US7785291078
US55302T2042
RU000A0JPNN9
PLPGER000010
RU000A0JNUD0
AT0000821103
US50218G2066
GB00B1XH2C03
ROSNPPACNOR9
ROTGNTACNOR8
NL0009604859
ARCELIK A.S.
110,000.000
SURGUTNEFTEGAZ PREFS
1,450,000.000
SURGUTNEFTEGAZ (ADR)
325,000.000
JSC MMC NORILSK NICKEL (ADR)
105,057.000
TATNEFT – SPONSORED ADR
18,000.000
AFK SISTEMA-REG S SPONS (GDR)
90,000.000
PETKIM PETROKIMYA HOLDING AS
545,000.000
TOFAS TURK OTOMOBIL FABRIKA
200,000.000
LENENERGO
1,465,000.000
MAGNIT OJSC-SPON REGS (GDR)
58,000.000
CENTRAL EUROPEAN MEDIA ENT-A CZK
140,000.000
TURK HAVA YOLLARI AO
402,500.000
NOVATEK OAO-SPONS REG S (GDR)
20,000.000
TURKIE HALK BANKASI
529,000.000
BIM BIRLESIK MAGAZALAR AS
65,000.000
MECHEL PFD
330,000.000
VIMETCO NV (GDR)
200,000.000
TETHYS PETROLEUM LTD
1,849,300.000
JASTRZEBSKA SPOLKA WEGLOWA SA
18,500.000
VIENNA INSURANCE GROUP
130,558.000
TURK TELEKOMUNIKASYON AS
110,000.000
CELEBI HAVA SERVISI
71,096.000
ROSTELECOM
35,000.000
MHP SA REG S (GDR)
80,000.000
FEDERAL GRID CO UNIFIED ENERGY
50,000,000.000
POLSKA GRUPA ENERGETYCNA
180,000.000
TGK 1
2,750,000,000.000
UNIQA VERSICHERUNGEN AG
30,000.000
LSR GROUP OJSC (GDR)
473,450.000
FERREXPO PLC
150,000.000
OMV PETROM SA
3,612,000.000
TRANSGAZ SA MEDIAS
7,319.000
FORTUNA ENTERTAINMENT GROUP NV
104,210.000
Foreign shares
Total
Amount
Market Price Market Price Accrued Interest
Total
112.69
15.67
171.88
330.64
760.35
639.00
25.32
124.29
1.41
1,316.98
72.40
59.73
2,723.49
112.69
402.54
21.32
1.93
8.42
350.82
990.00
55.28
107.13
410.02
339.19
0.05
107.50
0.00
254.48
83.28
62.86
2.88
1,136.51
118.70
AÚV tržní
celkem
12,396,037.50
22,719,741.44
55,862,352.00
34,735,865.78
13,686,276.24
57,509,575.20
13,799,808.75
24,857,000.00
2,066,639.17
76,385,002.40
10,136,000.00
24,041,727.50
54,469,772.00
59,613,671.25
26,164,775.00
7,036,786.94
385,943.60
15,567,684.80
6,490,121.72
129,252,420.00
6,080,690.00
7,616,247.87
14,350,536.90
27,135,416.00
2,730,534.40
19,349,431.20
10,955,436.80
7,634,297.25
39,427,156.66
9,429,001.50
10,410,589.48
8,318,107.54
12,369,727.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
2,952,540,288.33
3,058,950,991.43
0.00
0.00
218
Independent Auditor’s Report
to the Participation certiﬁcate holders of Investiční společnost České spořitelny, a. s.,
GLOBAL STOCKS FF – otevřený podílový fond
We have audited the accompanying ﬁnancial statements of Investiční společnost České spořitelny, a. s., GLOBAL STOCKS FF – otevřený
podílový fond, which comprise the balance sheet as at 31 December 2013, and the income statement and statement of changes in equity for
the year then ended, and a summary of signiﬁcant accounting policies and other explanatory information. For details of Investiční společnost
České spořitelny, a. s., GLOBAL STOCKS FF – otevřený podílový fond, see Note 1 to the ﬁnancial statements.
Management’s Responsibility for the Financial Statements
Management of Investiční společnost České spořitelny, a. s., is responsible for the preparation and fair presentation of these ﬁnancial statements in accordance with accounting principles generally accepted in the Czech Republic, and for such internal control as management determines is necessary to enable the preparation of ﬁnancial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these ﬁnancial statements based on our audit. We conducted our audit in accordance with the
Act on Auditors and International Standards on Auditing as amended by implementation guidance of the Chamber of Auditors of the Czech
Republic. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
whether the ﬁnancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the ﬁnancial statements. The procedures selected depend on the auditor’s judgment, including an assessment of the risks of material misstatement of the ﬁnancial statements,
whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation
and fair presentation of the ﬁnancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the ﬁnancial statements.
We believe that the audit evidence we have obtained is sufﬁcient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the ﬁnancial statements present fairly, in all material respects, the ﬁnancial position of Investiční společnost České
spořitelny, a. s., GLOBAL STOCKS FF – otevřený podílový fond, as at 31 December 2013, and its ﬁnancial performance for the year then
ended in accordance with accounting principles generally accepted in the Czech Republic.
31 March 2014
Prague, Czech Republic
Ernst & Young Audit, s.r.o.
License No. 401
Represented by partner
Roman Hauptﬂeisch
Auditor, Licence no. 2009
A member ﬁrm of Ernst & Young Global Limited,
Ernst & Young Audit, s. r. o. with its registred ofﬁce at Na Florenci 2116/15, 110 00 Prague 1 – Nové Město,
has been incorporated in the Commercial Register administered by the Municipal Court in Prague,
Section C, entry No. 88504, under Identiﬁcation No. 26704153.
219
Investiční společnost České spořitelny, a. s., GLOBAL STOCKS FF – otevřený podílový fond, 2013 Annual Report
Balance Sheet
at 31 December 2013
(in thousands CZK)
Line
Current
Previous
1
2
5
13
15
16
19
21
22,883
19,955
2,928
394,971
36
25
11
0
44,200
36,388
7,812
297,945
879
860
19
11
22
417,890
343,035
29
32
33
34
39
40
41
46
47
1,641
251
1,390
663
(228,544)
145,851
414,000
(8,970)
93,249
451
294
157
513
(249,560)
108,549
454,750
(8,970)
37,302
Total Liabilities
48
417,890
343,035
of which: Equity
49
415,586
342,071
3 Receivables from banks and credit unions
of which: a/ on demand: aa/ current accounts
ad/ margin accounts
6 Shares, unit certiﬁcates and other participation interests
11 Other assets
a/ derivatives
d/ other assets
13 Prepayments and accrued income
Total Assets
4 Other liabilities
c/ liabilities from taxes
d/ other liabilities
5 Deferred income and accrued expenses
9 Share premium
10 Reserve funds and other funds from proﬁt
12 Capital funds
14 Retained earnings or accumulated losses from previous periods
15 Proﬁt or loss for the accounting period
220
Investiční společnost České spořitelny, a. s., GLOBAL STOCKS FF – otevřený podílový fond, 2013 Annual Report
Off Balance Sheet Accounts
at 31 December 2013
(in thousands CZK)
4 Amounts due from ﬁxed term transactions
c/ with equity instruments
7 Assets provided into custody, administration and safekeeping
of which: securities
12 Amounts owed from ﬁxed term transactions
c/ with equity instruments
Line
Current
Previous
52
55
60
61
64
67
10,734
10,734
394,971
394,971
10,709
10,709
40,399
40,399
272,601
272,601
40,592
40,592
221
Investiční společnost České spořitelny, a. s., GLOBAL STOCKS FF – otevřený podílový fond, 2013 Annual Report
Proﬁt and Loss Account
for the year ended 31 December 2013
(in thousands CZK)
1 Interest income and similar income
3 Income from shares and unit certiﬁcates
5 Commission and fee expenses
a/ fees and commissions from securities trading
b/ management fee
c/ custody fee
d/ other ﬁnancial expenses
6 Proﬁt or loss on ﬁnancial operations
a/ proﬁt or loss on transactions with securities
b/ proﬁt or loss on foreign exchange transactions
c/ proﬁt or loss on ﬁxed term transactions and options
9 Administrative expenses
of which: b/ other administrative expenses: ba/ audit
12 Release of provisions and bad debt allowances to receivables and guarantees,
income from receivables written off
Depreciation, creation and utilizing of provisions and bad debt allowances to
13 receivables and guarantees
19 Ordinary proﬁt or loss for the accounting period before tax
23 Income tax
24 Proﬁt or loss for the accounting period after tax
Line
Current
Previous
1
9
10
11
12
13
14
15
16
17
18
21
22
33
1,766
7,732
50
6,493
419
770
99,626
87,397
1,876
10,353
178
178
92
2,084
7,206
18
6,026
392
770
42,903
32,925
(526)
10,504
235
235
24
27
0
25
26
30
31
28
93,514
265
93,249
24
37,614
312
37,302
222
Investiční společnost České spořitelny, a. s., GLOBAL STOCKS FF – otevřený podílový fond, 2013 Annual Report
Statement of Changes in Equity
for the year ended 31 December 2013
(in thousands CZK)
Line
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Current
Previous
(249,560)
(65,396)
86,412
0
(228,544)
(326,642)
(202,570)
279,652
0
(249,560)
108,549
37,302
0
145,851
145,853
0
(37,304)
108,549
454,750
130,012
(170,762)
0
0
414,000
587,087
343,302
(475,639)
0
0
454,750
0
0
0
0
0
0
1 Share premium
opening balance
issued unit certiﬁcates
repurchase of unit certiﬁcates
other changes
closing balance
2 Retained earnings
opening balance
transfers to funds
other changes
closing balance
3 Capital funds
opening balance
issued unit certiﬁcates
repurchase of unit certiﬁcates
transfers to funds
other changes
closing balance
4 Gains or losses from revaluation
opening balance
foreign exchange rate differences and gains or losses from revaluation not
included in proﬁt (loss)
closing balance
5 Retained earnings or accumulated losses from previous periods
opening balance
other changes
closing balance
6 Proﬁt (loss) for the current period after taxes
opening balance
proﬁt (loss)
transfers to funds, dividends
closing balance
21
22
23
24
25
26
27
28
29
30
31
(8,970)
0
(8,970)
(8,970)
0
(8,970)
37,302
93,249
(37,302)
93,249
(37,304)
37,302
37,304
37,302
7 Total
32
415,586
342,071
223
Investiční společnost České spořitelny, a. s., GLOBAL STOCKS FF – otevřený podílový fond, 2013 Annual Report
Notes to the Financial Statements
for the year ended 31 December 2012
1. Organisation and Description of Business
Formation and Description of the Business
Investiční společnost České spořitelny, a. s., GLOBAL STOCKS
FF – otevřený podílový fond z fondů (until 1 May 2005 Investiční
společnost České spořitelny, a. s. – GLOBALTREND FF OPF),
hereinafter the “Fund”, is an accounting unit without legal entity status, formed by Investiční společnost České spořitelny, a. s.
(hereinafter the “Company”) as an open-ended mutual fund under
the Act No. 248/1992 Coll., based upon the Resolution of the Securities Commission dated 19 July 2000. The Fund commenced its
activities on 1 September 2000.
Pursuant to a concluded contract, Česká spořitelna, a. s. acts as the
depository of the Fund.
The Fund is managed by the Company. In compliance with the
Collective Investment Act No. 189/2004 Coll. (hereinafter the
“Act”), the Company is responsible for the management of the assets of the Fund, which involves the administration and handling
of the assets.
The Fund is a standard fund in compliance with the Act and meets
the requirements of EU legislation.
According to the classiﬁcation binding for the members of the
Capital Market Association (hereinafter the “AKAT CR”) as at the
date of the approval of this Statute, the Fund can be deﬁned as
a fund of funds.
Registered Ofﬁce
Investiční společnost České spořitelny, a. s.
GLOBAL STOCKS FF – otevřený podílový fond
Prague 6, Evropská 2690/17
Principal Business
The Company collects funds from individuals and legal entities for
the Fund by issuing participation certiﬁcates with the purpose of
their collective investment on local and foreign ﬁnancial markets.
No restrictions are placed on the number of participation certiﬁcates for issue and the period for which the Fund is established.
The Company reserves the right to temporary halt the issuing of
participation certiﬁcates for no longer than three months in compliance with the Act.
The participation certiﬁcates of the Fund are available both in the
Czech Republic and in other EU member countries.
Investment Policy of the Fund
The objective of the investment policy is to provide participation
certiﬁcate holders with a long-term appreciation of participation
certiﬁcates primarily through investments in a globally distributed
portfolio of securities of collective investment equity funds and
shares. The Company operates on capital markets with the aim of
appreciating the assets in the Fund by making gains from differences between selling prices and acquisition prices and dividend
and interest income from securities held by the Fund.
Finances collected in the Fund are invested predominantly in securities of collective investment funds if such collective investment
funds distribute the risk connected to investments and meet other
obligations set by the Act.
The limits of the Fund are adhered to on the basis of the Act, or
they are regulated in the Fund’s Statute in compliance with the Act.
The Fund uses ﬁnancial derivatives to hedge against currency exposures.
The Company can use ﬁnancial derivatives to effectively manage
the Fund’s assets. Efﬁcient asset management represents transactions for the purpose of decreasing risk, decreasing costs or achieving sufﬁcient income for the Fund provided that the risk is demonstrably low. The exposure from these transactions must be fully
covered by the Fund’s assets so that liabilities arising from these
transactions are fulﬁlled.
Management Policy
The proﬁt/(loss) is based on the difference between income and
expenses related to the management of the Fund’s assets.
The generated proﬁt has been fully retained by the Fund, in the reinvestment fund, as a source for further investments, and increases
the participation certiﬁcate value. In the event that the Fund incurs
a loss from the Company’s management of assets, the loss is covered from the reinvestment fund which was created from earnings
brought forward. If the reinvestment fund is not sufﬁcient, the loss
must be covered by a reduction in the Fund’s capital fund.
The Fund’s assets must not be used for the provision of loans, borrowings or gifts, to secure a third party’s obligation or to settle
a payable which is not related to the Fund’s management. This
provision does not affect Sections 26 and 27 of the Collective Investment Act.
When managing the Fund’s assets, contracts for the sale of securities and money market instruments, securities issued by other collective investment funds and ﬁnancial derivatives which are not
224
Investiční společnost České spořitelny, a. s., GLOBAL STOCKS FF – otevřený podílový fond, 2013 Annual Report
owned by the Fund at the moment of concluding the respective
contracts, may not be entered into.
institutions, and Czech Accounting Standards for Financial Institutions, which establish the accounting principles and policies.
The Company can accept loans and borrowings for the maximum
of six months when managing the Fund’s assets, to cover temporary needs related to the management of the Fund’s assets or
purchases of participation certiﬁcates. The volume of the received
loans and borrowings must not exceed 10 percent of the value of
the Fund’s assets.
The basis of preparation and the accounting policies have been
consistently applied during both 2013 and 2012.
Change in the Fund’s Statute
As at 1 February 2013, information on Fund`s 2012 performance
was published within the document Key investors information.
(According to the article 23, section 3 of Council Regulation (EC)
no. 583/2010, the performance must be updated within the Key investors information up to 35 days after the previous calendar year
end.)
The updated text of the Funds statute was approved by the Investment company`s board of directors as at 10 April 2013. The
changes in the statute text related to an update of the list of managed funds, update of the information on the length of professional
experience of Investment company management, addition of information on Fund’s performance and the Fund`s benchmark`s
performance, an update of information on total expense ratio for
2012 and update of the date of the signature. These updates were
not subject to preliminary approval from Czech national bank (according to the section 84 (a), subsection 5 of 189/2004 Coll., On
collective investment schemes). The shareholders could access the
updated text of the Statute and Key investors information as of
10 April 2013 on http://www.iscs.cz/, at the distributor’s branches
(Ceska sporitelna, a. s.) and at the Investment company seat.
Legislative change
Act No 240/2013 Coll., On Management Companies and Investment Funds became effective as of 19 August 2013. Rules stated
by this act must be implemented by management companies and
investment funds by 22 July 2014. In 2013, the Fund`s management was subject to the rules of the Act No. 189/2004 Coll., On
collective investment schemes. The new rules will be applied as
of 2014.
2. Basis of Preparation
The ﬁnancial statements have been prepared on the basis of underlying accounting records maintained in accordance with Accounting Act No. 563/1991 Coll., and applicable regulations, decrees and internal standards in compliance with and in the scope
deﬁned in Czech Finance Ministry Regulation No. 501/2002 of
6 November 2002, as subsequently amended, which sets out the
overall framework for the presentation of the ﬁnancial statements,
and guidelines for the structure and minimum requirements for the
content of the ﬁnancial statements of banks and certain ﬁnancial
The Fund is obliged to comply with the regulatory requirements
of the Act.
The ﬁnancial statements are presented in compliance with general
accounting principles, speciﬁcally the accrual principle, the prudence concept and the going concern assumption.
The ﬁnancial statements contain the balance sheet, proﬁt and loss
account, statement of changes in equity, and notes to the ﬁnancial
statements.
The presentation of the ﬁnancial statements requires that the
Company makes estimates which have an impact on the reported
amounts of assets and liabilities as at the date of the ﬁnancial statements as well as expenses and income in the relevant accounting
period. These estimates are based on information available as at
the date of the ﬁnancial statements and may differ from the actual
results.
As a result of continued market volatility since the start of the
global ﬁnancial crisis, the Fund may be exposed to increased risk,
speciﬁcally due to the uncertainty regarding possible asset impairments and future developments on the market. The ﬁnancial
statements have been prepared based on the current best estimates
using all relevant and available information as at the date of the
ﬁnancial statements.
These ﬁnancial statements are unconsolidated.
All amounts are stated in thousands of Czech crowns (CZK), unless indicated otherwise.
Explanation Added for Translation into English
These ﬁnancial statements are presented on the basis of accounting
principles and standards generally accepted in the Czech Republic.
Certain accounting practices applied by the Company that conform with generally accepted accounting principles and standards
in the Czech Republic may not conform with generally accepted
accounting principles in other countries.
3. Accounting Policies
Transaction Recognition Date
Purchases and sales of securities are recognised using trade date
accounting provided that the period between the trade date and the
fulﬁlment of the commitment arising from the contract does not
exceed a period typical for the relevant type of transaction.
225
Investiční společnost České spořitelny, a. s., GLOBAL STOCKS FF – otevřený podílový fond, 2013 Annual Report
The transaction recognition date for derivative contracts is:
a) the date upon which the related contract was entered into;
b) the date when performance was delivered based on the relevant
contract.
The Fund records payables arising from its transactions with securities and operating payables at their nominal value, while payables from negative fair values of derivatives are recorded at the fair
value of the derivatives at the balance sheet date.
The transaction recognition date can also be the date when money
in circulation is paid or received, the date when foreign currency is
purchased or sold, the date when a payment is made, the date when
ownership is acquired or terminated, when a receivable or payable
arises, changes or ceases to exist, when assets move within an accounting entity, and the date when other matters to be included
in the accounting records occur, or when the documents supporting these other matters are available, or when other matters are
a consequence of internal conditions of the accounting entity and/
or special regulations.
Financial Derivatives and Hedging Transactions
Securities
In accordance with the Fund’s strategy, all securities are classiﬁed
as securities at fair value through proﬁt or loss. During the accounting period, securities are re-measured at fair value on a daily
basis pursuant to the Finance Ministry Regulation No. 194/2011
Coll., on more detailed regulation of certain rules in collective investment (the “Decree”), as amended.
The securities of the Fund are accounted for as securities at fair
value through proﬁt or loss. The fair value of the securities is determined in accordance with the International Financial Reporting
Standards with an exception, that an average price between the
most favourable binding offer and demand (MID price) is used
for bonds.
Pursuant to the Regulation, securities are valued at the price quoted
on a public market which is adjusted, as appropriate, to reﬂect the
rules set out in the Regulation. If the market value is unavailable,
the Fund uses a value determined by the Company using valuation models based on discounted future cash ﬂows according to
the yield curve calculated using the Reuters and Kondor+ systems.
Securities are measured at cost upon initial recognition using the
weighted average method. The acquisition cost includes direct
transaction costs related to the acquisition of securities.
Realised capital gains or losses are recorded in the proﬁt and loss
account within ‘Proﬁt or loss from ﬁnancial operations’.
Accrued interest relating to assets is included within the total balance of these assets.
Receivables and Payables
The Fund records receivables arising from its transactions with
securities and other operating receivables at their nominal value,
while receivables from positive fair values of derivatives are recorded at the fair value of the derivatives at the balance sheet date.
Pursuant to the prudence principle, provisions are created based on
the aging of receivables.
In the normal course of business, the Fund enters into hedging
contracts with ﬁnancial derivatives to hedge against interest rate
and foreign currency exposures associated with its transactions on
ﬁnancial markets. The method of fair value hedges is applied to
hedging derivatives.
The Fund designates certain derivatives as hedges provided that
the following criteria are met:
– the Fund has developed a risk management strategy;
– at the inception of the hedge, the hedging relationship is formally documented, the documentation identiﬁes the hedged
item and the hedging instrument, and it deﬁnes the risk that
is being hedged and the approach to establishing whether the
hedge is effective; and
– the hedge is effective, that is, changes in the fair value or cash
ﬂows of the hedged item are almost fully offset by changes in
the fair value or cash ﬂows of the hedging instrument and the
results are within a range of 80 percent to 125 percent.
Nominal values of derivative ﬁnancial instruments are recognised
in the off-balance sheet accounts. Changes in the fair value of derivatives that are designated and qualify as hedges (see above) are
recorded as income or expense. Changes in the fair value of the
hedging derivatives attributable to the risk hedged are recognised
in the same income or expense accounts as differences from revaluation of a hedged instrument.
All ﬁnancial derivatives are recorded as assets when the fair value
is positive and as liabilities when the fair value is negative. Fair
values are derived from the valuation models.
Derivatives that are not designated as hedging derivatives are
treated as trading derivatives. These derivatives are measured at
fair value on a daily basis and gains and losses on revaluation are
posted to derivative expense and income accounts.
Certain derivatives are embedded in compound ﬁnancial instruments, which comprise the host instrument and the derivative. Pursuant to the applicable regulations, the Fund recognises changes in
assets and liabilities arising from the movements in rates or prices
of securities or changes in exchange rates through expense and income accounts. Given that the assets of the Fund are valued at fair
value and changes of fair values are reported within expenses and
income from derivatives, embedded derivatives are not accounted
for separately.
Income Tax
Under effective tax regulations, the income tax rate applicable to
mutual funds is 5 percent.
226
Investiční společnost České spořitelny, a. s., GLOBAL STOCKS FF – otevřený podílový fond, 2013 Annual Report
Deferred Tax
Deferred tax is provided using the liability method on all temporary differences between the carrying amount of assets and liabilities reported in the balance sheet and their value for tax purposes.
Deferred tax assets are recognised only up to the amount of probable future taxable income against which the deferred tax asset can
be offset.
Foreign Currency Translations
Foreign currencies are translated using the exchange rate promulgated by the Czech National Bank as at the relevant date. As at the
balance sheet date, assets and liabilities denominated in foreign
currencies are translated on the same basis.
Foreign exchange rate gains and losses from the daily translation
of assets and liabilities in foreign currencies are posted to expenses
or income accounts.
Equity
The selling price of participation certiﬁcates is calculated as a proportion of the Fund’s net assets and the relevant number of participation certiﬁcates. Participation certiﬁcates are sold to investors
using the selling price determined on a daily basis.
4. Risk Management
Credit Risk
In accordance with the Statute and the investment strategy, the
Company establishes rules and policies for selecting investment
instruments such that the overall credit risk proﬁle of allocated investments is consistent with the characteristics of the Fund. New
types of instruments are approved on a case by case basis by the
risk management function together with the speciﬁcation of limits
for positions pertaining to these instruments. Speciﬁc emphasis is
placed on an appropriate rating structure and a relatively detailed
diversiﬁcation of portfolios (especially in relation to interest bearing securities).
Market Risk
The Fund uses a wide range of tools to eliminate risk exposures
attached to its portfolios. Signiﬁcant attention is paid to market
risks. Apart from statutory restrictions, the Fund is subject to a set
of internal limits having a direct impact on the FX exposure, interest rate exposure (the modiﬁed duration range of the Fund), equity
allocation on individual markets according to their volatility, portfolio rating structure (see above), and other characteristics of the
Fund. The relevant limits are appropriately applied to correspond
with the type of the Fund.
Share Premium
Share premium is the difference between the nominal value of all
participation certiﬁcates and their carrying amounts as at the date
of their issue or purchase.
Interest Income and Expense and Dividend
Income
Interest income and expense are recognised using the accrual principle.
Dividend income is recognised as at the date when the right to
receive the payment is established (ex-dividend date). Dividend income from domestic securities is presented after withholding tax.
Dividend income from foreign securities is presented gross with
the applicable taxes presented within Tax on foreign dividends (see
note 5.15.).
Whenever the Fund purchases new types of instruments, these instruments are ﬁrst analysed to assess the potential credit risk, as
well as the market risk that the instruments might bring to or help
eliminate from the portfolio. Subsequently, their appropriateness
and, if appropriate, the acceptable proportion of these instruments
in the portfolio is evaluated.
The level of the Fund’s market risk exposure is measured using
the Value at Risk (“VaR”). With effect from 1 August 2006, the
VaR for the Company’s Funds is calculated by the Central Risk
Management Department of Česká spořitelna using the historical
simulation method in the K + KvaR system.
Set out below are relative monthly values of the VaR in percentage
terms for individual types of risks:
Subsequent Events
The impact of events that occurred between the balance sheet date
and the date of the ﬁnancial statements preparation is recognized in
the ﬁnancial statements provided these events provide additional
evidence about conditions that existed at the date of the balance
sheet.
If material events reﬂecting the facts occurring after the balance
sheet date happened between the balance sheet date and the date
of the ﬁnancial statements preparation the consequences of these
events are disclosed in the notes to the ﬁnancial statements but not
recognized in the ﬁnancial statements.
Global VaR
Foreign currency VaR
Equity VaR
Global VaR
Foreign currency VaR
Equity VaR
31 Dec 2013
Average
VaR
5.48%
5.52%
1.37%
8.90%
6.33%
7.61%
31 Dec 2012
Average
VaR
10.79%
7.18%
9.89%
10.88%
7.15%
9.31%
227
Investiční společnost České spořitelny, a. s., GLOBAL STOCKS FF – otevřený podílový fond, 2013 Annual Report
The average VaR is calculated as an average of daily VaR values in
years 2013 and 2012 respectively.
The Fund monitors Value at Risk globally and also broken down to
Foreign Currency VaR, Interest Rate VaR and Equity VaR. Based
on the above values, the Fund identiﬁes critical risk segments. This
identiﬁcation inﬂuences the reinvestment process. The limits set
the maximum acceptable VaR for the Fund.
The Equity VaR also reﬂects the risk related to the holding of mutual funds’ participation certiﬁcates (including funds of money
market and bond funds).
Adherence to all the above limits and their effectiveness is monitored and assessed on an ongoing basis. The limits are reviewed,
if necessary.
The portfolio’s risk of unfavourable development of foreign exchange rates, interest rates, and other market factors is hedged, to
an appropriate extent, by ﬁnancial derivatives. Financial derivatives
are traded on the OTC market as this market enables the trading of
contracts whose parameters and nature appropriately satisfy the requirements of a hedge. Portfolios primarily include currency swaps.
Liquidity Risk
obligations arising from ﬁnancial contracts. Liquidity is monitored
and managed based on expected cash ﬂows, with appropriate adjustments made to the structure of securities and term placements
portfolios.
Pursuant to the Act, the Company is obliged to repurchase a participation certiﬁcate without undue delay but not later than 15 business days from the date when the repurchase right is claimed. Given that the Fund holds securities traded on foreign stock exchanges
which can be realised within a few days, the Fund’s inability to
meet its obligations due to lack of liquidity is unlikely.
Pursuant to Section 12 of the Collective Investment Act, the Company can suspend issues and purchases of the Fund’s participation
certiﬁcates for a maximum of three months, if necessary due to the
protection of rights or the participation certiﬁcate holders’ interests
protected by law. Issuing and purchasing participation certiﬁcates
can be suspended particularly at the end or beginning of the calendar year, in the event of natural disasters, upon very strong ﬂuctuations on ﬁnancial markets and upon high requirements for the
sales or purchases of participation certiﬁcates provided they could
endanger the Fund’s assets.
The quantitative information about the residual maturity of assets
and liabilities is given in Note 5.17.
Another monitored risk is the liquidity risk. Liquidity risk is a risk
that the Fund will not have enough available resources to meet its
5. Additional Information on the Financial Statements
5.1 Receivables from Banks
Receivables from banks
31 Dec 2013 31 Dec 2012
Current accounts
Margin accounts
19,955
2,928
36,388
7,812
Total
22,883
44,200
Balances on current accounts are repayable on demand.
5.2 Securities
Individual types of securities by issuer, number of securities and their market value are disclosed in the Portfolio attached to the annual
report. All securities held by the Fund are publicly listed on foreign stock exchanges. Participation certiﬁcates which are not listed on stock
exchanges are purchased and administered by the Company.
Shares, participation certiﬁcates and other holdings
31 Dec 2013 31 Dec 2012
Acquisition cost
Market revaluation
380,946
14,025
272,017
25,928
Total
394,971
297,945
228
Investiční společnost České spořitelny, a. s., GLOBAL STOCKS FF – otevřený podílový fond, 2013 Annual Report
5.3 Other Assets
Other assets
31 Dec 2013 31 Dec 2012
Financial derivatives – positive fair value
Other receivables
Other
Provisions against receivables
25
5
11
(5)
860
30
19
(30)
Total
36
879
Other receivables represent receivables arising from foreign dividends.
The caption ‘Other’ represents estimated receivables for dividends and an estimated receivable for the return of a portion of the management
fee for purchased participation certiﬁcates of Erste’s fund.
5.4 Prepayments and Accrued Income
Prepayments and accrued income
31 Dec 2013 31 Dec 2012
Prepayments – audit fees
–
11
Total
–
11
5.5 Equity
The Fund has no share capital. The nominal value of one participation certiﬁcate is CZK 1. The total nominal value of all participation
certiﬁcates is posted to ‘Capital funds’.
Share premium arising from the difference between the nominal and selling values of the participation certiﬁcates is recorded separately.
The Fund accounts for share premium upon the sale of participation certiﬁcates as well as upon their repurchase.
The selling price of the participation certiﬁcate is determined as the share of the Fund’s net assets and the number of issued participation
certiﬁcates.
The value of a participation certiﬁcate as at the last trading date in 2013 totalled CZK 0.5473 (2012: CZK 0.4275). This is the most recent
announced value of the participation certiﬁcate for the year, for which purchases and repurchases of the participation certiﬁcates of the Fund
were undertaken.
The proﬁt for 2013 in the amount of CZK 93,249 thousand will be transferred to the reinvestment fund within ‘Other funds from proﬁt’.
In line with the Fund’s Statue, the proﬁt for 2012 in the amount of CZK 37,302 was transferred to the reinvestment fund.
5.6 Changes in the Capital Fund
Number of
Nominal
participation
value of
certiﬁcates participation
certiﬁcates
Balance at 31 Dec 2011
Participation certiﬁcates sold
Participation certiﬁcates purchased
Balance at 31 Dec 2012
Participation certiﬁcates sold
Participation certiﬁcates purchased
Balance at 31 Dec 2013
Use of fund Contribution Total capital
to cover
upon
funds
losses
merger
932,375,879
932,376
(345,306)
17
587,087
343,302,106
(475,639,189)
343,302
(475,639)
–
–
–
–
343,302
(475,639)
800,038,796
800,039
(345,306)
17
454,750
130,011,785
(170,761,669)
130,012
(170,762)
–
–
–
–
130,012
(170,762)
(759,288,912)
(759,289)
(345,306)
17
414,000
229
Investiční společnost České spořitelny, a. s., GLOBAL STOCKS FF – otevřený podílový fond, 2013 Annual Report
5.7 Other Liabilities
Other liabilities
31 Dec 2013 31 Dec 2012
Payables from participation certiﬁcate holders’ placements
Payable to the state budget
Negative fair values of ﬁnancial derivatives
Other liabilities
Total
894
251
–
496
94
294
–
63
1,641
451
5.8 Accrued Expenses and Deferred Income
Accrued expenses particularly consist of the unbilled custody fee of CZK 38 thousand related to December 2013 (2012: CZK 31 thousand),
the unbilled management fee of CZK 623 thousand related to December 2013 (2012: CZK 475 thousand), and the unbilled fee for the local
sub-register administration of CZK 0 thousand related to December 2013 (2012: CZK 6 thousand) and the unbilled fee for calculation of net
assets value and participation certiﬁcate rate of CZK 2 thousand (2012: CZK 1 thousand)..
5.9 Financial Derivatives Designated as Trading Derivatives
Nominal value of the derivatives
31 Dec 2013
31 Dec 2012
Assets
Liabilities
Assets
Liabilities
Currency swaps
Currency forwards
Stock futures
–
–
10,734
–
–
10,709
–
–
40,399
–
–
40,592
Total
10,734
10,709
40,399
40,592
Open positions of derivatives posted to an off-balance sheet are converted to fair value daily as of 1 January 2011 (up to 31 August 2013
futures were converted monthly; as of 1 September 2013 they are converted on daily basis) and recorded in absolute values.
Fair value of the derivatives
31 Dec 2013
31 Dec 2012
Positive
Negative
Positive
Negative
Currency swaps
Currency forwards
Equity indices futures
–
–
25
–
–
–
–
–
860
–
–
–
Total
25
–
860
–
2013
2012
Foreign dividends
Foreign dividends – previous period
1,705
61
2,006
78
Total
1,766
2,084
2013
2012
Currency derivatives are due within one year. Equity derivatives are due within one year.
5.10 Income from Shares and Interests
5.11 Interest Income
Interest on deposits at banks
33
92
Total
33
92
230
Investiční společnost České spořitelny, a. s., GLOBAL STOCKS FF – otevřený podílový fond, 2013 Annual Report
5.12 Fees and Commissions
2013
2012
Management fees
Custody fees
Commissions and fees from securities trading
Administration of securities
Expenses of administration of local sub-register – Česká spořitelna
Other fees and commissions
6,493
419
50
476
65
229
6,026
392
18
439
66
265
Total
7,732
7,206
In compliance with the Statute of the Fund, the management fee paid to the Company by the Fund amounts to 1.80 percent of the average
annual net asset value.
Pursuant to the custody service contract entered into with Česká spořitelna, a. s., the Fund pays a fee equal to 0.11 percent of its average
annual net asset value.
If participation certiﬁcates of another mutual fund managed by the Company are purchased and added to the Fund’s assets, the Fund’s aggregate net asset value reduced by the current value of investments in participation certiﬁcates of the other mutual fund managed by the
Company is used as the basis for the calculation of the ﬁxed part of the management fee.
5.13 Proﬁt or Loss from Financial Operations
2013
2012
Proﬁt or loss from securities at fair value through proﬁt or loss
Proﬁt or loss from ﬁxed term transactions
Proﬁt or loss from FX differences
87,397
1,876
10,353
32,925
10,504
(526)
Total
99,626
42,903
Proﬁt or loss from securities at fair value through proﬁt or loss primarily comprises the proﬁt or loss from the realised sales of securities,
from payable securities and from the daily valuation of securities at fair value.
Proﬁt or loss from derivatives includes proﬁt or loss on the settlement of ﬁxed term transactions with currency instruments and also the
revaluation of open derivatives at fair value.
Proﬁt or loss from FX differences represents the value of realised FX proﬁt or loss from foreign currency accounts and from the settlement
of foreign currency receivables and payables and also gains or losses arising from the revaluation of assets, with the exception of securities,
and liabilities in foreign currency at fair value.
5.14 Administrative Expenses
2013
2012
Audit
178
235
Total
178
235
2013
2012
5.15 Income Tax
The principal income tax components are as follows:
Tax payable – current year
265
312
Total income tax
265
312
231
Investiční společnost České spořitelny, a. s., GLOBAL STOCKS FF – otevřený podílový fond, 2013 Annual Report
Current income tax – analysis:
Proﬁt (Loss) before tax
Items to add
Deductible items
Tax base
Tax loss utilisation
Tax base after changes
Tax (5%) on tax base
Foreign dividends
Tax on foreign dividends
Additional taxation
Total tax
2013
2012
95,514
33
(1,792)
91,755
(91,755)
–
–
1,705
256
9
37,614
33
(2,084)
35,563
(35,563)
–
–
2,006
301
11
265
312
Deferred tax
As at 31 December 2013, the Fund determined a deferred tax asset of CZK 1,970 thousand arising from a tax loss and provisions against
receivables. The deferred tax asset was not recorded on the basis that its recovery was uncertain.
As at 31 December 2012, the Fund determined a deferred tax asset of CZK 10,612 thousand arising from a tax loss and provisions against
receivables. The deferred tax asset was not recorded on the basis that its recovery was uncertain.
5.16 Related Party Transactions
Related parties include Česká spořitelna, a. s., Investiční společnost České spořitelny, a. s. and Erste Group Bank AG.
31 Dec 2013 31 Dec 2012
Unbilled custody fee – Česká spořitelna
Unbilled management fee – Investiční společnost
Unbilled fee for administration of the local sub-register – Česká spořitelna
Other payables to related parties
Total payables to related parties
38
623
–
464
31
475
6
64
1,125
576
The costs charged to the Fund by Česká spořitelna, a. s. amounted to CZK 1,238 thousand in 2013 (2012: CZK 1,162 thousand), of which
the greatest portion was represented by the fee for administration of securities accounts of CZK 476 thousand (2012: CZK 438 thousand),
and the custody fee of CZK 419 thousand (2012: CZK 392 thousand). The costs charged by the Company amounted to CZK 6,026 thousand
in 2013 (2012: CZK 6,026 thousand), which is the annual management fee.
5.17 Liquidity
The following tables show the residual maturity of assets and liabilities broken down by major classes of assets.
Given that all securities are traded on public markets, sales can easily be undertaken within three months.
232
Investiční společnost České spořitelny, a. s., GLOBAL STOCKS FF – otevřený podílový fond, 2013 Annual Report
2013
Assets
Less than
3 months
3 month –
1 year
1 – 5 years
Over
5 years
Not
speciﬁed
Total
Receivables from banks
Shares and participation certiﬁcates
Prepayments
Other assets
22,883
–
–
36
–
–
–
–
–
–
–
–
–
–
–
–
–
394,971
–
–
22,883
394,971
–
36
Total assets
22,919
–
–
–
394,971
417,890
Other liabilities
Net assets
Available capital
(2,034)
20,885
(415,586)
(270)
(270)
–
–
–
–
–
–
–
–
(394,971)
–
(2,304)
415,586
(415,586)
Difference
(394,701)
(270)
–
–
394,971
–
Less than
3 months
3 month –
1 year
1 – 5 years
Over
5 years
Not
speciﬁed
Total
Receivables from banks
Shares and participation certiﬁcates
Prepayments
Other assets
44,200
−
11
878
−
−
−
−
−
−
−
−
−
−
−
−
−
297,945
−
1
44,200
297,945
11
879
Total assets
45,089
−
−
−
297,946
343,035
Other liabilities
Net assets
Available capital
(670)
44,419
(342,071)
(294)
(294)
−
−
−
−
−
−
−
−
297,946
−
(964)
342,071
(342,071)
Difference
(297,652)
(294)
−
−
297,946
−
Liabilities
2012
Assets
Liabilities
Liquidity risk, to which the Fund is exposed, is low as all assets are immediately convertible into cash before the expected purchases of
participation certiﬁcates from participation certiﬁcate holders can be undertaken.
5.18 Off-balance Sheet Assets and Liabilities
The Fund’s off-balance sheet accounts include receivables and payables from ﬁxed term transactions and assets provided into custody and
safekeeping. The item ‘Assets provided into custody, administration and safekeeping’ shows foreign and domestic securities administered
by Česká spořitelna, a. s. (this item does not include participation certiﬁcates of open-ended mutual funds of the Company, which the Fund
maintains in its portfolio).
5.19 Contingent Assets and Liabilities
The Fund has no assets or liabilities that were not disclosed in the balance sheet or off-balance sheet accounts.
5.20 Subsequent Events
No signiﬁcant events occurred after the date of the ﬁnancial statements, which would have a material impact on the Fund’s ﬁnancial statements.
233
Investiční společnost České spořitelny, a. s., GLOBAL STOCKS FF – otevřený podílový fond, 2013 Annual Report
Portfolio at 31 December 2013
The detail of the portfolio is not part of the fund’s ﬁnal accounts. Figures are stated in CZK.
ISIN
Name of the security
FI0009000681
NOKIA
Amount
Market Price
36.00
159.61
Foreign shares
ESMAR14
DJ50MAR14
S & P 500 E-MINI CMEMAR14
DJ EURO STOXX 50 FUTURESMAR14
4.00 1,831,242.700
4.00
852,369.00
Futures
LU0238689110
IE0008366928
LU0219454633
DE000A0KFRV6
LU0366775897
IE00B3DBRP41
LU0203975437
LU0386856941
LU0328436547
BGF-GBL DYNAMIC EQTY-USD A2
AXA ROSENBERG GLB SM CAP-A
MFS MER-GLOBAL EQUITY – I1USD
FIRST PRIVATE AKTIEN GLBL-C
FRANK-GLOB SMID GR-I ACCUSD
JO HAMBRO CAP GLOB SEL-EUR A
ROBECO BP GLBL PREM EQT-DEUR
PICTET-GLOB MEGATREND SEL-IUSD
GS GLOBAL SMALL CAP CORE EQ-I
Foreign participation certiﬁcates
Total
0.18
71,200.00
7,600.00
19,400.00
159,000.00
1,260,000.00
12,600.00
9,500.00
145,000.00
318.500
742.245
4,120.047
1,869.837
346.951
48.762
4,731.910
4,227.873
400.954
Market Price
Total
Accrued
Interest
5,746.09
0.00
5,746.09
0.00
7,324,970.80
3,409,476.00
0.00
0.00
10,734,446.80
0.00
57.33
52,847,853.97
31,312,360.24
36,274,828.10
55,165,266.24
61,439,679.00
59,622,059.70
40,164,792.36
58,138,257.50
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
394,965,154.44
394,970,900.53
0.00
0.00
234
Independent Auditor’s Report
to the Participation certiﬁcate holders of Investiční společnost České spořitelny, a. s.,
TOP STOCKS – otevřený podílový fond
We have audited the accompanying ﬁnancial statements of Investiční společnost České spořitelny, a. s., TOP STOCKS – otevřený podílový
fond, which comprise the balance sheet as at 31 December 2013, and the income statement and statement of changes in equity for the year
then ended, and a summary of signiﬁcant accounting policies and other explanatory information. For details of Investiční společnost České
spořitelny, a. s., TOP STOCKS – otevřený podílový fond, see Note 1 to the ﬁnancial statements.
Management’s Responsibility for the Financial Statements
Management of Investiční společnost České spořitelny, a. s., is responsible for the preparation and fair presentation of these ﬁnancial statements in accordance with accounting principles generally accepted in the Czech Republic, and for such internal control as management determines is necessary to enable the preparation of ﬁnancial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these ﬁnancial statements based on our audit. We conducted our audit in accordance with the
Act on Auditors and International Standards on Auditing as amended by implementation guidance of the Chamber of Auditors of the Czech
Republic. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
whether the ﬁnancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the ﬁnancial statements. The procedures selected depend on the auditor’s judgment, including an assessment of the risks of material misstatement of the ﬁnancial statements,
whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation
and fair presentation of the ﬁnancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the ﬁnancial statements.
We believe that the audit evidence we have obtained is sufﬁcient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the ﬁnancial statements present fairly, in all material respects, the ﬁnancial position of Investiční společnost České
spořitelny, a. s., TOP STOCKS – otevřený podílový fond, as at 31 December 2013, and its ﬁnancial performance for the year then ended in
accordance with accounting principles generally accepted in the Czech Republic.
31 March 2014
Prague, Czech Republic
Ernst & Young Audit, s.r.o.
License No. 401
Represented by partner
Roman Hauptﬂeisch
Auditor, Licence no. 2009
A member ﬁrm of Ernst & Young Global Limited,
Ernst & Young Audit, s. r. o. with its registred ofﬁce at Na Florenci 2116/15, 110 00 Prague 1 – Nové Město,
has been incorporated in the Commercial Register administered by the Municipal Court in Prague,
Section C, entry No. 88504, under Identiﬁcation No. 26704153.
235
Investiční společnost České spořitelny, a. s., TOP STOCKS – otevřený podílový fond, 2013 Annual Report
Balance Sheet
at 31 December 2013
(in thousands CZK)
Line
Current
Previous
1
2
5
13
15
16
19
21
76,352
74,362
1,990
2,537,113
22,701
21,000
1,701
0
12,507
12,507
0
1,929,709
23,496
22,466
1,030
12
22
2,636,166
1,965,724
29
30
32
33
34
39
40
41
47
44,408
613
31,120
12,675
5,635
399,545
621,869
961,888
602,821
4,279
1,721
1,147
1,411
4,277
353,220
395,841
982,079
226,028
TOTAL LIABILITIES
48
2,636,166
1,965,724
of which: Equity
49
2,586,123
1,957,168
3 Receivables from banks and credit unions
of which: a/ on demand: aa/ current accounts
ad/ margin accounts
6 Shares, unit certiﬁcates and other participation interests
11 Other assets
a/ derivatives
d/ other assets
13 Prepayments and accrued income
TOTAL ASSETS
4 Other liabilities
a/ derivatives
c/ liabilities from taxes
d/ other liabilities
5 Deferred income and accrued expenses
9 Share premium
10 Reserve funds and other funds from proﬁt
12 Capital funds
15 Proﬁt or loss for the accounting period
236
Investiční společnost České spořitelny, a. s., TOP STOCKS – otevřený podílový fond, 2013 Annual Report
Off Balance Sheet Accounts
at 31 December 2013
(in thousands CZK)
4 Amounts due from ﬁxed term transactions
b/ with currency instruments
7 Assets provided into custody, administration and safekeeping
of which: securities
12 Amounts owed from ﬁxed term transactions
b/ with currency instruments
Line
Current
Previous
52
54
60
61
64
66
2,508,711
2,508,711
2,537,113
2,537,113
2,488,324
2,488,324
1,948,468
1,948,468
1,929,709
1,929,709
1,927,723
1,927,723
237
Investiční společnost České spořitelny, a. s., TOP STOCKS – otevřený podílový fond, 2013 Annual Report
Proﬁt and Loss Account
for the year ended 31 December 2013
(in thousands CZK)
1 Interest income and similar income
d/ interest income from collaterals
2 Interest expenses and similar expenses
b/ interest from received margins
3 Income from shares and unit certiﬁcates
5 Commission and fee expenses
a/ fees and commissions from securities trading
b/ management fee
c/ custody fee
d/ other ﬁnancial expenses
6 Proﬁt or loss on ﬁnancial operations
a/ proﬁt or loss on transactions with securities
b/ proﬁt or loss on foreign exchange transactions
c/ proﬁt or loss on ﬁxed term transactions and options
9 Administrative expenses
of which: b/ other administrative expenses: ba/ audit
12 Release of provisions and bad debt allowances to receivables and guarantees,
income from receivables written off
Depreciation, creation and utilizing of provisions and bad debt allowances to
13 receivables and guarantees
19 Ordinary proﬁt or loss for the accounting period before tax
23 Income tax
24 Proﬁt or loss for the accounting period after tax
Line
Current
Previous
1
5
6
8
9
10
11
12
13
14
15
16
17
18
21
22
14
3
1
1
22,884
60,456
2,581
52,980
2,331
2,564
675,024
784,910
(7,345)
(102,541)
226
226
102
0
0
0
19,922
49,003
735
44,188
1,944
2,136
259,175
197,695
878
60,602
247
247
24
74
294
25
26
30
31
341
636,972
34,151
602,821
374
229,869
3,841
226,028
238
Investiční společnost České spořitelny, a. s., TOP STOCKS – otevřený podílový fond, 2013 Annual Report
Statement of Changes in Equity
for the year ended 31 December 2013
(in thousands CZK)
Line
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Current
Previous
353,220
423,609
(377,284)
0
399,545
298,244
200,587
(145,611)
0
353,220
395,841
226,028
0
621,869
577,114
0
(181,273)
395,841
982,079
743,293
(763,484)
0
0
961,888
760,710
732,729
(511,360)
0
0
982,079
0
0
0
0
0
0
1 Share premium
opening balance
issued unit certiﬁcates
repurchase of unit certiﬁcates
other changes
closing balance
2 Retained earnings
opening balance
transfers to funds
other changes
closing balance
3 Capital funds
opening balance
issued unit certiﬁcates
repurchase of unit certiﬁcates
transfers to funds
other changes
closing balance
4 Gains or losses from revaluation
opening balance
foreign exchange rate differences and gains or losses from revaluation not
included in proﬁt (loss)
closing balance
5 Retained earnings or accumulated losses from previous periods
opening balance
other changes
closing balance
6 Proﬁt (loss) for the current period after taxes
opening balance
proﬁt (loss)
transfers to funds, dividends
closing balance
21
22
23
24
25
26
27
28
29
30
31
0
0
0
0
0
0
226,028
602,821
(226,028)
602,821
(181,272)
226,028
181,272
226,028
7 Total
32
2,586,123
1,957,168
239
Investiční společnost České spořitelny, a. s., TOP STOCKS – otevřený podílový fond, 2013 Annual Report
Notes to the Financial Statements
for the year ended 31 December 2013
1. Organisation and Description
of Business
The participation certiﬁcates of the Fund are available both in the
Czech Republic and in other EU member countries.
Formation and Description of the Business
Investment Policy of the Fund
Investiční společnost České spořitelny, a. s., TOP STOCKS –
otevřený podílový fond (hereinafter the “Fund” or “ISČS, a. s. –
TOP STOCKS OPF”) is an accounting entity without legal entity
status, formed by Investiční společnost České spořitelny, a. s.
(hereinafter the “Company”) in compliance with the Collective Investment Act No. 189/2004 Coll. (hereinafter the “Act”).
The objective of the investment policy is to provide participation
certiﬁcate holders with a long-term appreciation of participation
certiﬁcates through investments in a concentrated portfolio of
shares traded on equity markets that meet conditions stated in the
Act, denominated in the respective currencies.
The objective is met by stock picking.
Following Investiční společnost České spořitelny, a. s.’s request of
14 March 2006, the Securities Commission (with effect from 1
April 2006 the Czech National Bank) approved the formation of
a fund entitled Investiční společnost České spořitelny, a. s. – TOP
STOCKS – otevřený podílový fond. The decision came into effect
on 4 July 2006. The Fund commenced its activities on 28 August
2006.
Pursuant to a concluded contract, Česká spořitelna, a. s. acts as the
depository of the Fund.
The Fund is managed by the Company. In compliance with the Act
No. 189/2004 Coll., the Company is responsible for the management of the assets of the Fund, which involves the administration
and handling of the assets.
The Fund is a standard fund in compliance with the Act and meets
the requirements of EU legislation.
According to the classiﬁcation binding for the members of the
Capital Market Association (hereinafter the “AKAT CR”) as at the
date of the approval of this Statute, the Fund can be deﬁned as an
equity fund.
Registered Ofﬁce
Investiční společnost České spořitelny, a. s.
TOP STOCKS – otevřený podílový fond
Prague 6, Evropská 2690/17
Principal Business
The Company collects funds from individuals and legal entities for
the Fund by issuing participation certiﬁcates with the purpose of
their collective investment on local and foreign ﬁnancial markets.
No restrictions are placed on the number of participation certiﬁcates for issue and the period for which the Fund is established.
The Company reserves the right to temporary halt the issuing of
participation certiﬁcates for no longer than three months in compliance with the Act.
The Fund carries currency exposure arising from investments in
local currencies.
The Fund’s portfolio primarily consists of shares. Higher concentration of the portfolio is due to the fact that the Fund’s portfolio is
usually represented by approximately 25 different investment ideas.
One investment idea usually means investment in one picked share.
In addition to the shares, available funds are invested in treasury
bills and bank deposits. The Fund’s portfolio can be expanded by
purchasing other investment instruments allowed by the Act for
collective investment of a standard fund.
The limits of the Fund are adhered to on the basis of the Act, or
they are regulated in the Fund’s Statute in compliance with the Act.
The Fund uses ﬁnancial derivatives to hedge against currency exposures.
The Company can use ﬁnancial derivatives to effectively manage
the Fund’s assets. Efﬁcient asset management represents transactions for the purpose of decreasing risk, decreasing costs or achieving sufﬁcient income for the Fund provided that the risk is demonstrably low. The exposure from these transactions must be fully
covered by the Fund’s assets so that liabilities arising from these
transactions are fulﬁlled.
The Company can accept loans and borrowings for the maximum
of six months when managing the Fund’s assets, to cover temporary needs related to the management of the Fund’s assets or
purchases of participation certiﬁcates. The volume of the received
loans and borrowings must not exceed 10 percent of the value of
the Fund’s assets.
Change in the Fund’s Statute
Czech National Bank Resolution No. 2012/4588/570, dated 18
May 2012, which came into force on 5 June 2012: The changes to
the Funds statute related mainly to the duty of the asset investment
240
Investiční společnost České spořitelny, a. s., TOP STOCKS – otevřený podílový fond, 2013 Annual Report
company to ensure that its statute is in accordance with the amendment to Act 189/2004 Coll., on collective investments (as ensuing
from the changes made by Act 188/2011 Coll.) and Decree No.
193/2011 Coll., on the minimum requisites of the statute and on
the conditions for the use of the name Short-Term Money Market
Fund and Money Market Fund. In light of the change made to the
methodology of classifying mutual funds of the Capital Market
Association, the deﬁnition of a bond fund in the introductory Deﬁnition of Terms of the Funds statute has been modiﬁed, as well as
the wording of certain related provisions.
Investment objectives, the method of investing and the risk proﬁle
of the Fund have not been changed in the amendments referred to
above.
Along with the change made to the statute, information was updated as to the list of funds managed by the Company (Article II
Paragraph 8 of the statute), in particular information on the managing parties of the asset management company (Appendix 1 to the
statute), information added on the performance of the mutual fund
for 2011 (Appendix 2 to the statute), information updated on the
total cost indicators for 2011, and the date on which the statute being signed was updated.
On the date the changes to the statute came into force the simple
statute of the Fund was replaced by a newly processed document
providing required key information for investors. Such key information for investors was processed in accordance with Commission (EU) Regulation No. 583/2012.
As at 1 February 2013, information on Fund`s 2012 performance
was published within the document Key investors information.
(According to the article 23, section 3 of Council Regulation (EC)
no. 583/2010, the performance must be updated within the Key investors information up to 35 days after the previous calendar year
end.)
The updated text of the Funds statute was approved by the Investment company`s board of directors as at 10 April 2013. The
changes in the statute text related to an update of the list of managed funds, update of the information on the length of professional
experience of Investment company management, addition of information on Fund’s performance and the Fund`s benchmark`s
performance, an update of information on total expense ratio for
2012 and update of the date of the signature. These updates were
not subject to preliminary approval from Czech national bank (according to the section 84 (a), subsection 5 of 189/2004 Coll., On
collective investment schemes). The shareholders could access the
updated text of the Statute and Key investors information as of
10 April 2013 on http://www.iscs.cz/, at the distributor’s branches
(Ceska sporitelna, a. s.) and at the Investment company seat.
Legislative change
Act No 240/2013 Coll., On Management Companies and Investment Funds became effective as of 19 August 2013. Rules stated
by this act must be implemented by investment companies and investment funds by 22 July 2014. In 2013, the Fund`s management
was subject to the rules of the Act No. 189/2004 Coll., On collective investment schemes. The new rules will be applied as of 2014.
2. Basis of Preparation
The ﬁnancial statements have been prepared on the basis of underlying accounting records maintained in accordance with Accounting Act No. 563/1991 Coll., and applicable regulations, decrees and internal standards in compliance with and in the scope
deﬁned in Czech Finance Ministry Regulation No. 501/2002 of
6 November 2002, as subsequently amended, which sets out the
overall framework for the presentation of the ﬁnancial statements,
and guidelines for the structure and minimum requirements for the
content of the ﬁnancial statements of banks and certain ﬁnancial
institutions, and Czech Accounting Standards for Financial Institutions, which establish the accounting principles and policies.
The basis of preparation and the accounting policies have been
consistently applied during both 2013 and 2012.
The Fund is obliged to comply with the regulatory requirements
of the Act.
The ﬁnancial statements are based on the accrual principle, that is,
transactions and other events are recognised in the accounting period in which they occur, regardless of when the related monetary
ﬂow arises.
The ﬁnancial statements are presented in compliance with general
accounting principles, speciﬁcally the accrual principle, the prudence concept and the going concern assumption.
The ﬁnancial statements contain the balance sheet, proﬁt and loss
account, statement of changes in equity, and notes to the ﬁnancial
statements.
The presentation of the ﬁnancial statements requires that the
Company makes estimates which have an impact on the reported
amounts of assets and liabilities as at the date of the ﬁnancial statements as well as expenses and income in the relevant accounting
period. These estimates are based on information available as at
the date of the ﬁnancial statements and may differ from the actual
results.
As a result of continued market volatility since the start of the
global ﬁnancial crisis, the Fund may be exposed to increased risk,
speciﬁcally due to the uncertainty regarding possible asset impairments and future developments on the market. The ﬁnancial
statements have been prepared based on the current best estimates
using all relevant and available information as at the date of the
ﬁnancial statements.
241
Investiční společnost České spořitelny, a. s., TOP STOCKS – otevřený podílový fond, 2013 Annual Report
These ﬁnancial statements are unconsolidated.
All amounts are stated in thousands of Czech crowns (CZK), unless indicated otherwise.
Explanation Added for Translation into English
These ﬁnancial statements are presented on the basis of accounting
principles and standards generally accepted in the Czech Republic.
Certain accounting practices applied by the Company that conform with generally accepted accounting principles and standards
in the Czech Republic may not conform with generally accepted
accounting principles in other countries.
3. Accounting Policies
rules set out in the Regulation. If the market value is unavailable,
the Fund uses a value determined by the Company using valuation models based on discounted future cash ﬂows according to
the yield curve calculated using the Reuters and Kondor+ systems.
Securities are measured at cost upon initial recognition using the
weighted average method. The acquisition cost includes direct
transaction costs related to the acquisition of securities.
Realised capital gains or losses are recorded in the proﬁt and loss
account within ‘Proﬁt or loss from ﬁnancial operations’.
Accrued interest relating to assets is included within the total balance of these assets.
Receivables and Payables
Transaction Recognition Date
Purchases and sales of securities are recognised using trade date
accounting provided that the period between the trade date and the
fulﬁlment of the commitment arising from the contract does not
exceed a period typical for the relevant type of transaction.
The transaction recognition date for derivative contracts is:
a) the date upon which the related contract was entered into;
b) the date when fulﬁlment was delivered based on the relevant
contract.
The transaction recognition date can also be the date when money
in circulation is paid or received, the date when foreign currency is
purchased or sold, the date when a payment is made, the date when
ownership is acquired or terminated, when a receivable or payable
arises, changes or ceases to exist, when assets move within an accounting entity, and the date when other matters to be included
in the accounting records occur, or when the documents supporting these other matters are available, or when other matters are
a consequence of internal conditions of the accounting entity and/
or special regulations.
Securities
In accordance with the Fund’s strategy, all securities are classiﬁed
as securities at fair value through proﬁt or loss. During the accounting period, securities are re-measured at fair value on a daily
basis pursuant to the Finance Ministry Regulation No. 194/2011
Coll., on more detailed regulation of certain rules in collective investment (the “Decree”), as amended.
The securities of the Fund are accounted for as securities at fair
value through proﬁt or loss. The fair value of the securities is determined in accordance with the International Financial Reporting
Standards with an exception, that an average price between the
most favourable binding offer and demand (MID price) is used
for bonds.
Pursuant to the Regulation, securities are valued at the price quoted
on a public market which is adjusted, as appropriate, to reﬂect the
The Fund records receivables arising from its transactions with
securities and other operating receivables at their nominal value,
while receivables from positive fair values of derivatives are recorded at the fair value of the derivatives at the balance sheet date.
Pursuant to the prudence principle, provisions are created based on
aging of receivables.
The Fund records payables arising from its transactions with securities and operating payables at their nominal value, while payables from negative fair values of derivatives are recorded at the fair
value of the derivatives at the balance sheet date.
Financial Derivatives and Hedging Transactions
In the normal course of business, the Fund enters into hedging contracts with ﬁnancial derivatives to hedge against foreign currency
exposures associated with its transactions on ﬁnancial markets.
The method of fair value hedges is applied to hedging derivatives.
The Fund designates certain derivatives as hedges provided that
the following criteria are met:
– the Fund has developed a risk management strategy;
– at the inception of the hedge, the hedging relationship is formally documented, the documentation identiﬁes the hedged
item and the hedging instrument, and it deﬁnes the risk that
is being hedged and the approach to establishing whether the
hedge is effective; and
– the hedge is effective, that is, changes in the fair value or cash
ﬂows of the hedged item are almost fully offset by changes in
the fair value or cash ﬂows of the hedging instrument and the
results are within a range of 80 percent to 125 percent.
Nominal values of derivative ﬁnancial instruments are recognised
in the off-balance sheet accounts. Changes in the fair value of derivatives that are designated and qualify as hedges (see above) are
recorded as income or expense. Changes in the fair value of the
hedging derivatives attributable to the risk hedged are recognised
in the same income or expense accounts as differences from revaluation of a hedged instrument.
242
Investiční společnost České spořitelny, a. s., TOP STOCKS – otevřený podílový fond, 2013 Annual Report
All ﬁnancial derivatives are recorded as assets when the fair value
is positive and as liabilities when the fair value is negative. Fair
values are derived from valuation models.
Interest Income and Expense and Dividend
Income
Derivatives that are not designated as hedging derivatives are
treated as trading derivatives. These derivatives are measured at
fair value on a daily basis and gains and losses on revaluation are
posted to expense and income accounts.
Dividend income is recognised as at the date when the right to
receive the payment is established (ex-dividend date). Dividend income from domestic securities is presented after withholding tax.
Dividend income from foreign securities is presented gross with
the applicable taxes presented within taxes on foreign dividends
(see note 5.16).
Certain derivatives are embedded in compound ﬁnancial instruments, which comprise the host instrument and the derivative. Pursuant to the applicable regulations, the Fund recognises changes in
assets and liabilities arising from the movements in rates or prices
of securities or changes in exchange rates through expense and income accounts. Given that the assets of the Fund are valued at fair
value and changes of fair values are reported within expenses and
income from derivatives, embedded derivatives are not accounted
for separately.
Income Tax
Under effective tax regulations, the income tax rate applicable to
mutual funds is 5 percent.
Interest income and expense are recognised using the accrual principle.
Subsequent Events
The impact of events that occurred between the balance sheet date
and the date of the ﬁnancial statements preparation is recognized in
the ﬁnancial statements provided these events provide additional
evidence about conditions that existed at the date of the balance
sheet.
If material events reﬂecting the facts occurring after the balance
sheet date happened between the balance sheet date and the date
of the ﬁnancial statements preparation the consequences of these
events are disclosed in the notes to the ﬁnancial statements but not
recognized in the ﬁnancial statements.
Deferred Tax
Deferred tax is provided using the liability method on all temporary differences between the carrying amount of assets and liabilities reported in the balance sheet and their value for tax purposes.
Deferred tax assets are recognised only up to the amount of probable future taxable income against which the deferred tax asset can
be offset.
Foreign Currency Translations
Foreign currencies are translated using the exchange rate promulgated by the Czech National Bank as at the relevant date. As at the
balance sheet date, assets and liabilities denominated in foreign
currencies are translated on the same basis.
Foreign exchange rate gains and losses from the daily translation
of assets and liabilities in foreign currencies are posted to expense
or income accounts.
Capital Funds
The selling price of participation certiﬁcates is calculated as a proportion of the Fund’s net assets and the relevant number of participation certiﬁcates. Participation certiﬁcates are sold to qualiﬁed
investors using the selling price determined on a daily basis.
Share Premium
Share premium is the difference between the nominal value of all
participation certiﬁcates and their carrying amounts as at the date
of their issue or purchase.
4. Risk Management
Credit Risk
In accordance with the Statute and the investment strategy, the
Company establishes rules and policies for selecting investment
instruments such that the overall credit risk proﬁle of allocated investments is consistent with the characteristics of the Fund. New
types of instruments are approved on a case by case basis by the
risk management function together with the speciﬁcation of limits
for positions pertaining to these instruments. Speciﬁc emphasis is
placed on an appropriate rating structure and a relatively detailed
diversiﬁcation of portfolios (especially in relation to bearing securities).
Market Risk
The Fund uses a wide range of tools to eliminate risk exposures
attached to its portfolios. Signiﬁcant attention is paid to market
risks. Apart from statutory restrictions, the Fund is subject to a set
of internal limits having a direct impact on the FX exposure, interest rate exposure (the modiﬁed duration range of the Fund), equity
allocation on individual markets according to their volatility, portfolio rating structure (see above), and other characteristics of the
Fund. The relevant limits are appropriately applied to correspond
with the type of the Fund.
Whenever the Fund purchases new types of instruments, these instruments are ﬁrst analysed to assess the potential credit risk, as
well as the market risk that the instruments might bring to or help
eliminate from the portfolio. Subsequently, their appropriateness
243
Investiční společnost České spořitelny, a. s., TOP STOCKS – otevřený podílový fond, 2013 Annual Report
and, if appropriate, the acceptable proportion of these instruments
in the portfolio is evaluated.
The level of the Fund’s market risk exposure is measured using
the Value at Risk (“VaR”). With effect from 1 August 2006, the
VaR for the Company’s Funds is calculated by the Central Risk
Management Department of Česká spořitelna using the historical
simulation method in the K + KvaR system.
Set out below are relative monthly values of the VaR in percentage
terms for individual types of risks:
31 Dec 2013
Average
VaR
10.49%
0.14%
0.02%
10.51%
15.11%
0.66%
0.02%
15.23%
31 Dec 2012
Average
VaR
17.75%
0.27%
0.02%
18.17%
18.87%
0.58%
0.03%
19.03%
Global VaR
Foreign currency VaR
Interest rate VaR
Equity VaR
Global VaR
Foreign currency VaR
Interest rate VaR
Equity VaR
The average VaR is calculated as average of daily VaR values in
years 2013 and 2012 respectively.
The Fund monitors Value at Risk globally and also broken down to
Foreign Currency VaR, Interest Rate VaR and Equity VaR. Based
on the above values, the Fund identiﬁes critical risk segments. This
identiﬁcation inﬂuences the reinvestment process. The limits set
the maximum acceptable VaR for the Fund.
The Equity VaR also reﬂects the risk related to the holding of mutual funds’ participation certiﬁcates (including funds of money
market and bond funds).
Adherence to all the above limits and their effectiveness is monitored and assessed on an ongoing basis. The limits are reviewed,
if necessary.
The portfolio’s risk of unfavourable development of foreign exchange rates, interest rates, and other market factors is hedged, to
an appropriate extent, by ﬁnancial Derivatives. Financial derivatives are traded on the OTC market as this market enables the trading of contracts whose parameters and nature appropriately satisfy
the requirements of a hedge. Portfolios primarily include currency
swaps, currency forwards and interest rate swaps.
Liquidity Risk
Another monitored risk is the liquidity risk. Liquidity risk is a risk
that the Fund will not have enough available resources to meet its
obligations arising from ﬁnancial contracts. Liquidity is monitored
and managed based on expected cash ﬂows, with appropriate adjustments made to the structure of securities and term placements
portfolios.
Pursuant to the Act, the Company is obliged to repurchase a participation certiﬁcate without undue delay but not later than 15 business days from the date when the repurchase right is claimed. Given that the Fund holds securities traded on foreign stock exchanges
which can be realised within a few days, the Fund’s inability to
meet its obligations due to lack of liquidity is unlikely.
Pursuant to Section 12 of the Collective Investment Act, the Company can suspend issues and purchases of the Fund’s participation
certiﬁcates for a maximum of three months, if necessary due to the
protection of rights or the participation certiﬁcate holders’ interests
protected by law. Issuing and purchasing participation certiﬁcates
can be suspended particularly at the end or beginning of the calendar year, in the event of natural disasters, upon very strong ﬂuctuations on ﬁnancial markets and upon high requirements for the
sales or purchases of participation certiﬁcates provided they could
endanger the Fund’s assets.
The quantitative information about the residual maturity of assets
and liabilities is given in Note 5.18.
5. Additional Information on the Financial Statements
5.1 Receivables from Banks
Receivables from banks
31 Dec 2013 31 Dec 2012
Current accounts
Margin accounts
74,362
1,990
12,507
–
Total
76,352
12,507
Balances on current accounts are repayable on demand.
244
Investiční společnost České spořitelny, a. s., TOP STOCKS – otevřený podílový fond, 2013 Annual Report
5.2 Securities
Individual types of securities by issuer, number of securities, their market value and interest rate are disclosed in the Portfolio attached to
the annual report. All securities held by the Fund are publicly listed on the Prague Stock Exchange or foreign stock exchanges. Participation
certiﬁcates which are not listed on stock exchanges are purchased and administered by the Company.
Shares, participation certiﬁcates and other holdings
31 Dec 2013 31 Dec 2012
Acquisition cost
Market revaluation
2,006,561
530,552
1,746,292
183,417
Total
2,537,113
1,929,709
5.3 Other Assets
Other assets
31 Dec 2013 31 Dec 2012
Positive fair values of ﬁnancial derivatives
State budget settlement
Other receivables
Allowances
Other
21,000
–
1,748
(833)
768
22,466
–
1,598
(568)
–
Total
22,701
23,496
As at 31 December 2013, other receivables include predominantly receivables of CZK 1,748 thousand arising from foreign dividends
(a receivable denominated in foreign currency) (2012: CZK 1,598 thousand). As at 31 December 2013, allowances include allowances for
receivables arising from foreign dividends in the amount of CZK 833 thousand (2012: CZK 568 thousand). The caption ‘Other’ relates to
estimated receivables arising from foreign dividends in the amount of CZK 786 thousand (2012: CZK 0 thousand).
5.4 Prepayments and Accrued Income
Prepayments and accrued income
31 Dec 2013 31 Dec 2012
Prepayments – audit fees
–
12
Total
–
12
5.5 Equity
The Fund has no share capital. The nominal value of one participation certiﬁcate is CZK 1. The total nominal value of all participation
certiﬁcates is posted to ‘Capital funds’.
Share premium arising from the difference between the nominal and selling values of the participation certiﬁcates is recorded separately.
The Fund accounts for share premium upon the sale of participation certiﬁcates as well as upon their repurchase. The selling price of the
participation certiﬁcate is determined as the share of the Fund’s net assets and the number of issued participation certiﬁcates.
The value of a participation certiﬁcate as at the last trading date in 2013 totalled CZK 1.7408 (2012: CZK 1.2998). This is the most recent
announced value of the participation certiﬁcate for the year, for which purchases and repurchases of the participation certiﬁcates of the Fund
were undertaken.
The proﬁt for 2013 in the amount of CZK 602,821 thousand will be transferred to the reinvestment fund within ‘Other funds from proﬁt’.
In line with the Fund’s Statute, the proﬁt for 2012 in the amount of CZK 226,028 thousand was transferred to the reinvestment fund within
‘Other funds from proﬁt’.
245
Investiční společnost České spořitelny, a. s., TOP STOCKS – otevřený podílový fond, 2013 Annual Report
5.6 Changes in the Capital Fund
Number of
Nominal
participation
value of
certiﬁcates participation
certiﬁcates
Balance at 31 Dec 2011
Participation certiﬁcates sold
Participation certiﬁcates purchased
Balance at 31 Dec 2012
Participation certiﬁcates sold
Participation certiﬁcates purchased
Balance at 31 Dec 2013
Use of fund Total capital
to cover
funds
losses
1,284,381,516
1,284,382
(523,672)
760,710
732,729,004
(511,359,687)
732,729
(511,360)
–
–
732,729
(511,360)
1,505,750,833
1,505,751
(523,672)
982,079
743,293,309
(763,484,397)
743,293
(763,484)
–
–
743,293
(763,484)
1,485,559,745
1,485,560
(523,672)
961,888
5.7 Other Liabilities
Other liabilities
31 Dec 2013 31 Dec 2012
Negative fair values of ﬁnancial derivatives
Payables from participation certiﬁcate holders’ placements
State budget settlement
Other liabilities
613
10,797
31,120
1,878
1,721
651
1,147
760
Total
44,408
4,279
5.8 Accrued Expenses and Deferred Income
Accrued expenses consist of the unbilled custody fee of CZK 237 thousand related to December 2013 (2012: CZK 179 thousand), the unbilled management fee of CZK 5,388 thousand related to December 2013 (2012: CZK 4,078 thousand), and the unbilled fee for the local
sub-register administration of CZK 0 thousand related to December 2013 (2012: CZK 12 thousand) and the unbilled fee for calculation of
NAV of CZK 10 thousand related to December 2013 (2012: CZK 8 thousand).
5.9 Financial Derivatives Designated as Hedging Derivatives
Nominal value of the derivatives
31 Dec 2013
31 Dec 2012
Assets
Liabilities
Assets
Currency swaps
1,061,456
1,055,973
894,229
Liabilities
876,345
Total currency instruments
1,061,456
1,055,973
894,229
876,345
Open positions of derivatives posted to an off-balance sheet are converted to fair value daily as of 1 January 2011 (up to 31 August 2013
futures were converted monthly; as of 1 September 2013 they are converted on daily basis) and recorded in absolute values.
Fair value of the derivatives
31 Dec 2013
31 Dec 2012
Positive
Negative
Positive
Currency swaps
5,482
–
17,884
Negative
–
Total currency instruments
5,482
–
17,884
–
Currency derivatives are due within one year.
246
Investiční společnost České spořitelny, a. s., TOP STOCKS – otevřený podílový fond, 2013 Annual Report
5.10 Financial Derivatives Designated as Trading Derivatives
Nominal value of the derivatives
31 Dec 2013
31 Dec 2012
Assets
Liabilities
Assets
Currency swaps
1,447,255
1,432,351
1,054,239
Liabilities
1,051,378
Total currency instruments
1,447,255
1,432,351
1,054,239
1,051,378
Open positions of derivatives posted to an off-balance sheet are converted to fair value daily as of 1 January 2011 (up to 31 August 2013
futures were converted monthly; as of 1 September 2013 they are converted on daily basis) and recorded in absolute values.
Fair value of the derivatives
31 Dec 2013
31 Dec 2012
Positive
Negative
Positive
Currency swaps
15,518
613
4,582
Negative
1,721
Total currency instruments
15,518
613
4,582
1,721
2013
2012
Currency derivatives are due within one year.
5.11 Income from Shares and Interests
Foreign dividends
22,884
19,922
Total received dividends
22,884
19,922
2013
2012
5.12 Interest Income and Expense
Interest on deposits at banks
14
102
Total
14
102
2013
2012
Management fees
Custody fees
Commissions and fees from securities trading
Expenses of administration of the local sub-register
Administration of securities
Other fees and commissions
52,980
2,331
2,581
180
1,566
818
44,188
1,944
735
144
1,144
848
Total
60,456
49,003
5.13 Fees and Commissions
In compliance with the Statute of the Fund, the management fee paid to the Company by the Fund amounts to 2.50 percent of the average
annual net asset value.
Pursuant to the custody service contract entered into with Česká spořitelna, a. s., the Fund pays a fee equal to 0.11 percent of its average
annual net asset value.
5.14 Proﬁt or Loss from Financial Operations
Proﬁt or loss from securities at fair value through proﬁt or loss
Proﬁt or loss from ﬁxed term transactions
Proﬁt or loss from FX differences
Total
2013
2012
784,910
(102,541)
(7,345)
197,695
60,602
878
675,024
259,175
247
Investiční společnost České spořitelny, a. s., TOP STOCKS – otevřený podílový fond, 2013 Annual Report
Proﬁt or loss from securities at fair value through proﬁt or loss primarily comprises the loss from the realised sales of securities, from payable securities and from the daily valuation of securities at fair value.
Proﬁt or loss from derivatives includes proﬁt or loss on the settlement of ﬁxed term transactions with currency instruments and also the
revaluation of open derivatives at fair value.
Proﬁt or loss from FX differences represents the value of realised FX proﬁt or loss from foreign currency accounts and from the settlement
of foreign currency receivables and payables and also gains or losses arising from the revaluation of assets, with the exception of securities,
and liabilities in foreign currency at fair value.
5.15 Administrative Expenses
2013
2012
Audit
226
247
Total
226
247
2013
2012
5.16 Income Tax
The principal income tax components are as follows:
Tax payable – current year
34,151
3,841
Total income tax
34,151
3,841
2013
2012
636,972
364
(22,957)
614,379
–
614,379
30,719
22,883
3,432
229,869
401
(20,215)
210,055
(192,995)
17,060
853
19,922
2,988
34,151
3,841
Current income tax – analysis:
Proﬁt (Loss) before tax
Items to add
Deductible items
Tax base
Tax loss utilisation
Adjusted tax base / loss
Tax (5%) on tax base
Foreign dividends
Tax on foreign dividends
Total tax
Deferred tax
As at 31 December 2013, the Fund determined a deferred tax asset of CZK 42 thousand arising from provisions against receivables. The
deferred tax asset was not recorded on the basis that its recovery was uncertain.
As at 31 December 2012, the Fund determined a deferred tax asset of CZK 28 thousand arising from provisions against receivables. The
deferred tax asset was not recorded on the basis that its recovery was uncertain.
5.17 Related Party Transactions
Related parties include Česká spořitelna, a. s. and Investiční společnost České spořitelny, a. s.
31 Dec 2013 31 Dec 2012
Unbilled custody fee – Česká spořitelna
Unbilled management fee – Investiční společnost
Unbilled fee for administration of the local sub-register
Unbilled fee for calculation of NAV
Other payables to related parties
237
5,388
–
10
1,876
179
4,078
12
8
759
Total payables to related parties
7,511
5,036
248
Investiční společnost České spořitelny, a. s., TOP STOCKS – otevřený podílový fond, 2013 Annual Report
The costs charged to the Fund by Česká spořitelna, a. s. amounted to CZK 7,476 thousand in 2013 (2012: CZK 4,815 thousand), of which
the greatest portion was represented by commission for CS – foreign in the amount of CZK 2,581 thousand (2012: CZK 735 thousand).
The costs charged by the Company amounted to CZK 52,980 thousand (2012: CZK 44,188 thousand), which is the annual management fee.
5.18 Liquidity
The following tables show the residual maturity of assets and liabilities broken down by major classes of assets.
Given that all securities are traded on public markets, sales can easily be undertaken within three months.
2013
Assets
Less than
3 months
3 month –
1 year
1 – 5 years Over 5 years
Not
speciﬁed
Total
Receivables from banks
Shares
Other assets
Prepayments
76,352
–
21,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2,537,113
1,701
–
76,352
2,537,113
22,701
–
Total assets
97,352
–
–
–
2,538,814
2,636,166
Other liabilities
Net assets
Available capital
(18,923)
78,429
(2,586,123)
(31,120)
(31,120)
–
–
–
–
–
–
–
–
2,538,814
–
(50,043)
2,586,123
(2,586,123)
Difference
(2,507,694)
(31,120)
–
–
2,538,814
–
Less than
3 months
3 month –
1 year
1 – 5 years
Over
5 years
Not
speciﬁed
Total
Receivables from banks
Shares
Other assets
Prepayments
12,507
−
22,466
−
−
−
−
12
−
−
−
−
−
−
−
−
−
1,929,709
1,030
−
12,507
1,929,709
23,496
12
Total assets
34,973
12
−
−
1,930,739
1,965,724
Other liabilities
Net assets
Available capital
(7,409)
27,564
(1,957,168)
(1,147)
(1,135)
−
−
−
−
−
−
−
−
1,930,739
−
(8,556)
1,957,168
(1,957,168)
Difference
(1,929,604)
(1,135)
−
−
1,930,739
−
Liabilities
2012
Assets
Liabilities
Liquidity risk, to which the Fund is exposed, is low as all assets are immediately convertible into cash before the expected purchases of
participation certiﬁcates from participation certiﬁcate holders can be undertaken.
5.19 Off-balance Sheet Assets and Liabilities
The Fund’s off-balance sheet accounts include receivables and payables from ﬁxed term transactions and assets provided into custody and
safekeeping. Assets provided into custody, administration and safekeeping include domestic and foreign securities administrated by Česká
spořitelna, a. s.
5.20 Contingent Assets and Liabilities
The Fund has no assets or liabilities that were not disclosed in the balance sheet or off-balance sheet accounts.
5.21 Subsequent Events
No signiﬁcant events occurred after the date of the ﬁnancial statements, which would have a material impact on the Fund’s ﬁnancial statements.
249
Investiční společnost České spořitelny, a. s., TOP STOCKS – otevřený podílový fond, 2013 Annual Report
Portfolio at 31 December 2013
The detail of the portfolio is not part of the fund’s ﬁnal accounts. Figures are stated in CZK.
ISIN
Name of the security
Amount
US80004C1018
US5801351017
US6556641008
US9285511005
US8552441094
US2616081038
US2499081048
US09061G1013
AT0000920863
US0378331005
US7475251036
US82706C1080
US6821891057
US5017971046
US8826811098
US1634281059
CH0023405456
US60877T1007
US68230A1060
DK0060252690
US62936P1030
US8858072064
US15117B1035
US75915K1016
US8036071004
US1897541041
US1510201049
US92532F1003
US7512121010
GB00B24CGK77
US29251M1062
US8673286014
US82481R1068
SANDISK CORP
MCDONALDS CORP
NORDSTROM INC
VIVUS INC
STARBUCKS CORP
DRESSER-RAND GROUP INC
DEPOMED INC
BIOMARIN PHARMACEUTICAL INC
AUSTRIAMICROSYSTEMS AG-BR
APPLE COMPUTER INC.
QUALCOMM INC
SILICON MOTION TECHNOL-(ADR)
ON SEMICONDUCTOR CORPORATION
L BRANDS INC
TEXAS ROADHOUSE INC CLASS A
CHELSEA THERAPEUTICS INTL LTD
DUFRY GROUP REG
MOMENTA PHARMACEUTICALS INC
ONCOGENEX PHARMACEUTICAL IVC
PANDORA A/S
NPS PHARMACEUTICALS INC
THRESHOLD PHARMACEUTICALS
CELLDEX THERAPEUTICS INC
REGULUS THERAPEUTICS INC
SAREPTA THERAPEUTICS INC
COACH INC
CELGENE CORP
VERTEX PHARM
RALPH LAUREN CORP
RECKITT BENCKISER GROUP PLC
ENANTA PHARMACEUTICALS INC
SUNESIS PHARMACEUTICALS INC
SHIRE PLC – (ADR)
70,000
52,000
80,000
450,000
61,000
76,000
72,000
70,000
54,000
10,000
67,000
400,000
570,000
79,000
145,000
150,000
31,000
34,000
30,000
100,000
275,000
90,000
14,000
75,000
250,000
85,000
31,000
64,000
24,000
65,000
19,000
70,000
35,000
Foreign shares
Total
Market Market Price Total
Price
1,403.32
1,930.31
1,229.45
180.64
1,559.49
1,186.28
210.48
1,399.54
2,413.15
11,160.93
1,477.13
281.50
163.93
1,230.44
553.05
88.23
3,499.07
351.73
165.92
1,081.04
603.98
92.90
481.63
147.02
405.24
1,116.65
3,361.45
1,478.12
3,512.68
1,577.42
542.71
94.30
2,810.82
Accrued
Interest
98,232,593.20
100,376,370.64
98,355,936.00
81,286,884.00
95,128,930.26
90,157,220.72
15,154,453.44
97,968,003.00
130,310,208.00
111,609,318.80
98,967,676.50
112,600,040.00
93,438,139.20
97,205,068.10
80,192,714.00
13,234,483.50
108,471,182.40
11,958,681.28
4,977,478.80
108,103,800.00
166,095,006.00
8,361,448.20
6,742,872.36
11,026,249.50
101,310,195.00
94,915,268.70
104,204,931.15
94,599,948.80
84,304,405.92
102,532,574.95
10,311,458.08
6,600,829.20
98,378,814.10
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
2,537,113,183.80
2,537,113,183.80
0.00
0.00
250
Independent Auditor’s Report
to the Participation certiﬁcate holders of Investiční společnost České spořitelny, a. s.,
KONZERVATIVNÍ MIX FF – otevřený podílový fond
We have audited the accompanying ﬁnancial statements of Investiční společnost České spořitelny, a. s., KONZERVATIVNÍ MIX FF –
otevřený podílový fond, which comprise the balance sheet as at 31 December 2013, and the income statement and statement of changes in
equity for the year then ended, and a summary of signiﬁcant accounting policies and other explanatory information. For details of Investiční
společnost České spořitelny, a. s., KONZERVATIVNÍ MIX FF – otevřený podílový fond, see Note 1 to the ﬁnancial statements.
Management’s Responsibility for the Financial Statements
Management of Investiční společnost České spořitelny, a. s., is responsible for the preparation and fair presentation of these ﬁnancial statements in accordance with accounting principles generally accepted in the Czech Republic, and for such internal control as management determines is necessary to enable the preparation of ﬁnancial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these ﬁnancial statements based on our audit. We conducted our audit in accordance with the
Act on Auditors and International Standards on Auditing as amended by implementation guidance of the Chamber of Auditors of the Czech
Republic. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
whether the ﬁnancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the ﬁnancial statements. The procedures selected depend on the auditor’s judgment, including an assessment of the risks of material misstatement of the ﬁnancial statements,
whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation
and fair presentation of the ﬁnancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the ﬁnancial statements.
We believe that the audit evidence we have obtained is sufﬁcient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the ﬁnancial statements present fairly, in all material respects, the ﬁnancial position of Investiční společnost České
spořitelny, a. s., KONZERVATIVNÍ MIX FF – otevřený podílový fond, as at 31 December 2013, and its ﬁnancial performance for the year
then ended in accordance with accounting principles generally accepted in the Czech Republic.
31 March 2014
Prague, Czech Republic
Ernst & Young Audit, s.r.o.
License No. 401
Represented by partner
Roman Hauptﬂeisch
Auditor, Licence no. 2009
A member ﬁrm of Ernst & Young Global Limited,
Ernst & Young Audit, s. r. o. with its registred ofﬁce at Na Florenci 2116/15, 110 00 Prague 1 – Nové Město,
has been incorporated in the Commercial Register administered by the Municipal Court in Prague,
Section C, entry No. 88504, under Identiﬁcation No. 26704153.
251
Investiční společnost České spořitelny, a. s., KONZERVATIVNÍ MIX FF – otevřený podílový fond, 2013 Annual Report
Balance Sheet
at 31 December 2013
(in thousands CZK)
Line
Current
Previous
1
2
3
5
6
10
11
12
13
15
16
19
21
1,496,894
594,889
850,379
15,448
36,178
83,719
83,719
0
3,656,779
12,016
9,543
2,473
0
131,148
122,199
0
8,949
0
133,813
123,385
10,428
901,659
4,714
3,520
1,194
11
22
5,249,408
1,171,345
29
30
32
33
34
39
40
41
47
40,660
33,217
377
7,066
1,825
497,931
281,997
4,340,562
86,433
1,530
76
57
1,397
406
186,525
205,355
700,887
76,642
Total Liabilities
48
5,249,408
1,171,345
of which: Equity
49
5 206 923
1 169 409
3 Receivables from banks and credit unions
of which: a/ on demand: aa/ current accounts
ab/ term deposits
ad/ margin accounts
ae/ collaterals
5 Debt securities
of which: a/ issued by the government
b/ issued by other entities
6 Shares, unit certiﬁcates and other participation interests
11 Other assets
a/ derivatives
d/ other assets
13 Prepayments and accrued income
Total Assets
4 Other liabilities
a/ derivatives
c/ liabilities from taxes
d/ other liabilities
5 Deferred income and accrued expenses
9 Share premium
10 Reserve funds and other funds from proﬁt
12 Capital funds
15 Proﬁt or loss for the accounting period
252
Investiční společnost České spořitelny, a. s., KONZERVATIVNÍ MIX FF – otevřený podílový fond, 2013 Annual Report
Off Balance Sheet Accounts
at 31 December 2013
(in thousands CZK)
4 Amounts due from ﬁxed term transactions
b/ with currency instruments
c/ with equity instruments
7 Assets provided into custody, administration and safekeeping
of which: securities
12 Amounts owed from ﬁxed term transactions
b/ with currency instruments
c/ with equity instruments
Line
Current
Previous
52
54
55
60
61
64
66
67
1,651,217
1,562,424
88,793
2,237,404
2,237,404
1,674,891
1,586,171
88,720
290,631
242,684
47,947
660,474
660,474
288,357
240,075
48,282
253
Investiční společnost České spořitelny, a. s., KONZERVATIVNÍ MIX FF – otevřený podílový fond, 2013 Annual Report
Proﬁt and Loss Account
for the year ended 31 December 2013
(in thousands CZK)
1 Interest income and similar income
of which: a/ interest income from bonds
d/ interest income from collaterals
3 Income from shares and unit certiﬁcates
5 Commission and fee expenses
a/ fees and commissions from securities trading
b/ management fee
c/ custody fee
d/ other ﬁnancial expenses
6 Proﬁt or loss on ﬁnancial operations
a/ proﬁt or loss on transactions with securities
b/ proﬁt or loss on foreign exchange transactions
c/ proﬁt or loss on ﬁxed term transactions and options
9 Administrative expenses
of which: b/ other administrative expenses: ba/ audit
12 Release of provisions and bad debt allowances to receivables and guarantees,
income from receivables written off
Depreciation, creation and utilizing of provisions and bad debt allowances to
13 receivables and guarantees
19 Ordinary proﬁt or loss for the accounting period before tax
23 Income tax
24 Proﬁt or loss for the accounting period after tax
Line
Current
Previous
01
02
05
09
10
11
12
13
14
15
16
17
18
21
22
4,003
3,037
8
2,509
16,308
70
11,473
1,865
2,900
96,860
145,704
5,410
(54,254)
251
251
4,286
3,877
0
379
7,280
36
5,039
844
1,361
79,560
66,854
(2,907)
15,613
241
241
24
9
3
25
26
30
31
13
86,809
376
86,433
8
76,699
57
76,642
254
Investiční společnost České spořitelny, a. s., KONZERVATIVNÍ MIX FF – otevřený podílový fond, 2013 Annual Report
Statement of Changes in Equity
for the year ended 31 December 2013
(in thousands CZK)
Line
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Current
Previous
186,525
343,057
(31,651)
0
497,931
189,873
11,833
(15,181)
0
186,525
205,355
76,642
0
281,997
230,831
0
(25,476)
205,355
700,887
4,007,346
(367,671)
0
0
4,340,562
877,243
241,666
(418,022)
0
0
700,887
0
0
0
0
0
0
1 Share premium
opening balance
issued unit certiﬁcates
repurchase of unit certiﬁcates
other changes
closing balance
2 Retained earnings
opening balance
transfers to funds
other changes
closing balance
3 Capital funds
opening balance
issued unit certiﬁcates
repurchase of unit certiﬁcates
transfers to funds
other changes
closing balance
4 Gains or losses from revaluation
opening balance
foreign exchange rate differences and gains or losses from revaluation not
included in proﬁt (loss)
closing balance
5 Retained earnings or accumulated losses from previous periods
opening balance
other changes
closing balance
6 Proﬁt (loss) for the current period after taxes
opening balance
proﬁt (loss)
transfers to funds, dividends
closing balance
21
22
23
24
25
26
27
28
29
30
31
0
0
0
0
0
0
76,642
86,433
(76,642)
86,433
(25,476)
76,642
25,476
76,642
7 Total
32
5,206,923
1,169,409
255
Investiční společnost České spořitelny, a. s., KONZERVATIVNÍ MIX FF – otevřený podílový fond, 2013 Annual Report
Notes to the Financial Statements
for the year ended 31 December 2013
1. Organisation and Description of
Business
The participation certiﬁcates of the Fund are available both in the
Czech Republic and in other EU member countries.
Formation and Description of the Business
Investment Policy of the Fund
Investiční společnost České spořitelny, a. s., KONZERVATIVNÍ
MIX FF – otevřený podílový fond (hereinafter the “Fund” or
“ISČS, a. s. – KONZERVATIVNÍ OPF”) is an accounting unit
without legal entity status, formed by Investiční společnost České
spořitelny, a. s. (hereinafter the “Company”) in compliance with
the Collective Investment Act No. 189/2004 Coll. (hereinafter the
“Act”).
The Fund invests in securities of money market funds and collective investment bond and equity funds. The equity component’s
share in the Fund’s portfolio and its regional and sector composition are actively managed. The neutral weight of the equity component’s share in the Fund’s assets amounts to 10 percent.
Following Investiční společnost České spořitelny, a. s.’s request of
28 January 2005, the Securities Commission approved the formation of a fund entitled Investiční společnost České spořitelny, a. s. –
KONZERVATIVNÍ MIX FF – otevřený podílový fond. The decision came into effect on 2 May 2005. The Fund commenced its
activities on 1 June 2005.
Pursuant to a concluded contract, Česká spořitelna, a. s. acts as the
depository of the Fund.
The Fund is managed by the Company. In compliance with the
Act, the Company is responsible for the management of the assets
of the Fund, which involves the administration and handling of
the assets.
The Fund’s portfolio can be expanded by purchasing shares, bonds
and other investment instruments allowed by the Act for collective
investment of a standard fund.
Finances collected in the Fund are invested predominantly in securities of collective investment funds if such collective investment
funds distribute the risk connected to investments and meet other
obligations as set by the Act.
The Fund does not acquire any assets that could not, due to their
nature, be provided into the custody, administration, safekeeping
or other management of the depository or a custodian authorised
by the depository.
The limits of the Fund are adhered to on the basis of the Act, or
they are regulated in the Fund’s Statute in compliance with the Act.
The Fund is a standard fund in compliance with the Act and meets
the requirements of EU legislation.
The Fund uses ﬁnancial derivatives to hedge against currency and
interest rate exposures.
According to the classiﬁcation binding for the members of the
Capital Market Association (hereinafter the “AKAT CR”) as at the
date of the approval of this Statute, the Fund can be deﬁned as the
fund of the funds.
The proﬁt/(loss) is based on the difference between the income and
expenses related to the management of the Fund’s assets.
Registered Ofﬁce
Investiční společnost České spořitelny, a. s.
KONZERVATIVNÍ MIX FF – otevřený podílový fond
Prague 6, Dejvice, Evropská 2690/17
Principal Business
The Company collects funds from individuals and legal entities for
the Fund by issuing participation certiﬁcates with the purpose of
their collective investment on local and foreign ﬁnancial markets.
No restrictions are placed on the number of participation certiﬁcates for issue and the period for which the Fund is established.
The Company reserves the right to temporary halt the issuing of
participation certiﬁcates for no longer than three months in compliance with the Act.
The generated proﬁt is retained in the reinvestment fund as
a source for further investments and to cover the Fund’s losses. If
the proﬁt is not sufﬁcient, the loss must be covered by a reduction
in the capital fund.
Change in the Statute
Czech National Bank Resolution No. 2012/4576/570, dated 18
May 2012, which came into force on 5 June 2012: The changes to
the Funds statute related mainly to the duty of the asset investment
company to ensure that its statute is in accordance with the amendment to Act 189/2004 Coll., on collective investments (as ensuing
from the changes made by Act 188/2011 Coll.) and Decree No.
193/2011 Coll., on the minimum requisites of the statute and on
the conditions for the use of the name Short-Term Money Market
Fund and Money Market Fund. Investment objectives, the method
of investing and the risk proﬁle of the Fund have not been changed
in the amendments referred to above.
256
Investiční společnost České spořitelny, a. s., KONZERVATIVNÍ MIX FF – otevřený podílový fond, 2013 Annual Report
Along with the change made to the statute, information was updated as to the list of funds managed by the Company (Article II
Paragraph 8 of the statute), in particular information on the managing parties of the asset management company (Appendix 1 to
the statute), information added on the performance of the Fund for
2011 (Appendix 2 to the statute), information updated on the total
cost indicators for 2011, and the date on which the statute being
signed was updated.
On the date the changes to the statute came into force the simple
statute of the Fund was replaced by a newly processed document
providing required key information for investors. Such key information for investors was processed in accordance with Commission (EU) Regulation No. 583/2012.
As at 1 February 2013, information on Fund`s 2012 performance
was published within the document Key investors information.
(According to the article 23, section 3 of Council Regulation (EC)
no. 583/2010, the performance must be updated within the Key investors information up to 35 days after the previous calendar year
end.)
The updated text of the Funds statute was approved by the Investment company`s board of directors as at 10 April 2013. The
changes in the statute text related to an update of the list of managed funds, update of the information on the length of professional
experience of Investment company management, addition of information on Fund’s performance and the Fund`s benchmark`s
performance, an update of information on total expense ratio for
2012 and update of the date of the signature. These updates were
not subject to preliminary approval from Czech national bank (according to the section 84 (a), subsection 5 of 189/2004 Coll., Act
on collective investment schemes). The shareholders could access
the updated text of the Statute and Key investors information as of
10 April 2013 on http://www.iscs.cz/, at the distributor’s branches
(Ceska sporitelna, a. s.) and at the Investment company seat.
Legislative change
Act No 240/2013 Coll., Act on Management Companies and Investment Funds became effective as of 19 August 2013. Rules
stated by this act must be implemented by investment companies
and investment funds by 22 July 2014. In 2013, the Fund`s management was subject to the rules of the Act No. 189/2004 Coll., Act
on collective investment schemes. The new rules will be applied
as of 2014.
2. Basis of Preparation
The ﬁnancial statements have been prepared on the basis of underlying accounting records maintained in accordance with Accounting Act No. 563/1991 Coll., and applicable regulations, decrees and internal standards in compliance with and in the scope
deﬁned in Czech Finance Ministry Regulation No. 501/2002 of
6 November 2002, as subsequently amended, which sets out the
overall framework for the presentation of the ﬁnancial statements,
and guidelines for the structure and minimum requirements for the
content of the ﬁnancial statements of banks and certain ﬁnancial
institutions, and Czech Accounting Standards for Financial Institutions, which establish the accounting principles and policies.
The basis of preparation and the accounting policies have been
consistently applied during both 2013 and 2012.
The Fund is obliged to comply with the regulatory requirements
of the Act.
The ﬁnancial statements are presented in compliance with general
accounting principles, speciﬁcally the accrual principle, the prudence concept and the going concern assumption.
The ﬁnancial statements contain the balance sheet, proﬁt and loss
account, statement of changes in equity, and notes to the ﬁnancial
statements.
The presentation of the ﬁnancial statements requires that the
Company makes estimates which have an impact on the reported
amounts of assets and liabilities as at the date of the ﬁnancial statements as well as expenses and income in the relevant accounting
period. These estimates are based on information available as at
the date of the ﬁnancial statements and may differ from the actual
results.
As a result of continued market volatility since the start of the
global ﬁnancial crisis, the Fund may be exposed to increased risk,
speciﬁcally due to the uncertainty regarding possible asset impairments and future developments on the market. The ﬁnancial
statements have been prepared based on the current best estimates
using all relevant and available information as at the date of the
ﬁnancial statements.
These ﬁnancial statements are unconsolidated.
All amounts are stated in thousands of Czech crowns (CZK), unless indicated otherwise.
Explanation Added for Translation into English
These ﬁnancial statements are presented on the basis of accounting
principles and standards generally accepted in the Czech Republic.
Certain accounting practices applied by the Company that conform with generally accepted accounting principles and standards
in the Czech Republic may not conform with generally accepted
accounting principles in other countries.
3. Accounting Policies
Transaction Recognition Date
Purchases and sales of securities are recognised using trade date
accounting provided that the period between the trade date and the
257
Investiční společnost České spořitelny, a. s., KONZERVATIVNÍ MIX FF – otevřený podílový fond, 2013 Annual Report
fulﬁlment of the commitment arising from the contract does not
exceed a period typical for the relevant type of transaction.
The transaction recognition date for derivative contracts is:
a) the date upon which the related contract was entered into;
b) the date when fulﬁlment was delivered based on the relevant
contract.
The transaction recognition date can also be the date when money
in circulation is paid or received, the date when foreign currency is
purchased or sold, the date when a payment is made, the date when
ownership is acquired or terminated, when a receivable or payable
arises, changes or ceases to exist, when assets move within an accounting entity, and the date when other matters to be included
in the accounting records occur, or when the documents supporting these other matters are available, or when other matters are
a consequence of internal conditions of the accounting entity and/
or special regulations.
Securities
In accordance with the Fund’s strategy, all securities are classiﬁed
as securities at fair value through proﬁt or loss. During the accounting period, securities are re-measured at fair value on a daily
basis pursuant to the Finance Ministry Regulation No. 194/2011
Coll., on more detailed regulation of certain rules in collective investment (the “Decree”), as amended.
The securities of the Fund are accounted for as securities at fair
value through proﬁt or loss. The fair value of the securities is determined in accordance with the International Financial Reporting
Standards with an exception, that an average price between the
most favourable binding offer and demand (MID price) is used
for bonds.
Pursuant to the Regulation, securities are valued at the price quoted
on a public market which is adjusted, as appropriate, to reﬂect the
rules set out in the Regulation. If the market value is unavailable,
the Fund uses a value determined by the Company using valuation models based on discounted future cash ﬂows according to
the yield curve calculated using the Reuters and Kondor+ systems.
Securities are measured at cost upon initial recognition using the
weighted average method. The acquisition cost includes direct
transaction costs related to the acquisition of securities.
Realised capital gains or losses are recorded in the proﬁt and loss
account within ‘Proﬁt or loss from ﬁnancial operations’.
Accrued interest relating to assets is included within the total balance of these assets.
Receivables and Payables
The Fund records receivables arising from its transactions with
securities and other operating receivables at their nominal value,
while receivables from positive fair values of derivatives are re-
corded at the fair value of the derivatives at the balance sheet date.
Pursuant to the prudence principle, provisions are created based on
the aging of receivables.
The Fund records payables arising from its transactions with securities and operating payables at their nominal value, while payables from negative fair values of derivatives are recorded at the fair
value of the derivatives at the balance sheet date.
Financial Derivatives and Hedging Transactions
In the normal course of business, the Fund enters into hedging
contracts with ﬁnancial derivatives to hedge against interest rate
and foreign currency exposures associated with its transactions on
ﬁnancial markets. The method of fair value hedges is applied to
hedging derivatives.
The Fund designates certain derivatives as hedges provided that
the following criteria are met:
– the Fund has developed a risk management strategy;
– at the inception of the hedge, the hedging relationship is formally documented,
the documentation identiﬁes the hedged item and the hedging instrument, and it deﬁnes the risk
that is being hedged and the approach to establishing whether
the hedge is effective; and
– the hedge is effective, that is, changes in the fair value or cash
ﬂows of the hedged item are almost fully offset by changes in
the fair value or cash ﬂows of the hedging instrument and the
results are within a range of 80 percent to 125 percent.
Nominal values of derivative ﬁnancial instruments are recognised
in the off-balance sheet accounts. Changes in the fair value of derivatives that are designated and qualify as hedges (see above) are
recorded as income or expense. Changes in the fair value of the
hedging derivatives attributable to the risk hedged are recognised
in the same income or expense accounts as differences from revaluation of a hedged instrument.
All ﬁnancial derivatives are recorded as assets when the fair value
is positive and as liabilities when the fair value is negative. Fair
values are derived from valuation models.
Derivatives that are not designated as hedging derivatives are
treated as trading derivatives. These derivatives are measured at
fair value on a daily basis and gains and losses on revaluation are
posted to expense and income accounts.
Certain derivatives are embedded in compound ﬁnancial instruments, which comprise the host instrument and the derivative. Pursuant to the applicable regulations, the Fund recognises changes in
assets and liabilities arising from the movements in rates or prices
of securities or changes in exchange rates through expense and income accounts. Given that the assets of the Fund are valued at fair
value and changes of fair values are reported within expenses and
income from derivatives, embedded derivatives are not accounted
for separately.
258
Investiční společnost České spořitelny, a. s., KONZERVATIVNÍ MIX FF – otevřený podílový fond, 2013 Annual Report
Income Tax
4. Risk Management
Under effective tax regulations, the income tax rate applicable to
mutual funds is 5 percent.
Credit Risk
Deferred Tax
Deferred tax is provided using the liability method on all temporary differences between the carrying amount of assets and liabilities reported in the balance sheet and their value for tax purposes.
Deferred tax assets are recognised only up to the amount of probable future taxable income against which the deferred tax asset can
be offset.
Foreign Currency Translations
Foreign currencies are translated using the exchange rate promulgated by the Czech National Bank as at the relevant date. As at the
balance sheet date, assets and liabilities denominated in foreign
currencies are translated on the same basis.
Foreign exchange rate gains and losses from the daily translation
of assets and liabilities in foreign currencies are posted to expense
or income accounts.
Capital Funds
The selling price of participation certiﬁcates is calculated as a proportion of the Fund’s net assets and the relevant number of participation certiﬁcates. Participation certiﬁcates are sold to investors
using the selling price determined on a daily basis.
Share Premium
Share premium is the difference between the nominal value of all
participation certiﬁcates and their carrying amounts as at the date
of their issue or purchase.
Interest Income and Expense and Dividend Income
Interest income and expense are recognised using the accrual principle.
Dividend income is recognised as at the date when the right to
receive the payment is established (ex-dividend date). Dividend income from domestic securities is presented after withholding tax.
Dividend income from foreign securities is presented gross with
the applicable taxes presented within taxes on foreign dividends
(see note 5.16).
Subsequent Events
The impact of events that occurred between the balance sheet date
and the date of the ﬁnancial statements preparation is recognized in
the ﬁnancial statements provided these events provide additional evidence about conditions that existed at the date of the balance sheet.
If material events reﬂecting the facts occurring after the balance
sheet date happened between the balance sheet date and the date
of the ﬁnancial statements preparation the consequences of these
events are disclosed in the notes to the ﬁnancial statements but not
recognized in the ﬁnancial statements.
In accordance with the Statute and the investment strategy, the
Company establishes rules and policies for selecting investment
instruments such that the overall credit risk proﬁle of allocated investments is consistent with the characteristics of the Fund. New
types of instruments are approved on a case by case basis by the
risk management function together with the speciﬁcation of limits
for positions pertaining to these instruments. Speciﬁc emphasis is
placed on an appropriate rating structure and a relatively detailed
diversiﬁcation of portfolios (especially in relation to interest bearing securities).
Market Risk
The Fund uses a wide range of tools to eliminate risk exposures
attached to its portfolios. Signiﬁcant attention is paid to market
risks. Apart from statutory restrictions, the Fund is subject to a set
of internal limits having a direct impact on the FX exposure, interest rate exposure (the modiﬁed duration range of the Fund), equity
allocation on individual markets according to their volatility, portfolio rating structure (see above), and other characteristics of the
Fund. The relevant limits are appropriately applied to correspond
with the type of the Fund.
Whenever the Fund purchases new types of instruments, these instruments are ﬁrst analysed to assess the potential credit risk, as
well as the market risk that the instruments might bring to or help
eliminate from the portfolio. Subsequently, their appropriateness
and, if appropriate, the acceptable proportion of these instruments
in the portfolio is evaluated.
The level of the Fund’s market risk exposure is measured using
the Value at Risk (“VaR”). With effect from 1 August 2006, the
VaR for the Company’s Funds is calculated by the Central Risk
Management Department of Česká spořitelna using the historical
simulation method in the K + KvaR system.
Set out below are relative monthly values of the VaR in percentage
terms for individual types of risks:
Global VaR
Currency VaR
Interest rate VaR
Equity VaR
Global VaR
Currency VaR
Interest rate VaR
Equity VaR
31 Dec 2013
Average
VaR
0.95%
0.14%
0.01%
0.98%
1.38%
0.18%
0.04%
1.38%
31 Dec 2012
Average
VaR
1.46%
0.26%
0.03%
1.61%
1.42%
0.27%
0.06%
1.47%
259
Investiční společnost České spořitelny, a. s., KONZERVATIVNÍ MIX FF – otevřený podílový fond, 2013 Annual Report
The average VaR is calculated as an average of daily VaR values in
years 2013 and 2012 respectively.
The Fund monitors Value at Risk globally and also broken down to
Foreign Currency VaR, Interest Rate VaR and Equity VaR. Based
on the above values, the Fund identiﬁes critical risk segments. This
identiﬁcation inﬂuences the reinvestment process. The limits set
the maximum acceptable VaR for the Fund.
The Equity VaR also reﬂects the risk related to the holding of mutual funds’ participation certiﬁcates (including funds of money
market and bond funds).
Adherence to all the above limits and their effectiveness is monitored and assessed on an ongoing basis. The limits are reviewed,
if necessary.
The portfolio’s risk of unfavourable development of foreign exchange rates, interest rates, and other market factors is hedged, to
an appropriate extent, by ﬁnancial derivatives. Financial derivatives are traded on the OTC market as this market enables the trading of contracts whose parameters and nature appropriately satisfy
the requirements of a hedge. Portfolios primarily include currency
swaps, currency forwards and interest rate swaps.
obligations arising from ﬁnancial contracts. Liquidity is monitored
and managed based on expected cash ﬂows, with appropriate adjustments made to the structure of securities and term placements
portfolios.
Pursuant to the Act, the Company is obliged to repurchase a participation certiﬁcate without undue delay but not later than 15 business days from the date when the repurchase right is claimed. Given that the Fund holds securities traded on foreign stock exchanges
which can be realised within a few days, the Fund’s inability to
meet its obligations due to lack of liquidity is unlikely.
Pursuant to Section 12 of the Collective Investment Act, the Company can suspend issues and purchases of the Fund’s participation
certiﬁcates for a maximum of three months, if necessary due to the
protection of rights or the participation certiﬁcate holders’ interests
protected by law. Issuing and purchasing participation certiﬁcates
can be suspended particularly at the end or beginning of the calendar year, in the event of natural disasters, upon very strong ﬂuctuations on ﬁnancial markets and upon high requirements for the
sales or purchases of participation certiﬁcates provided they could
endanger the Fund’s assets.
The quantitative information about the residual maturity of assets
and liabilities is given in Note 5.18.
Liquidity Risk
Another monitored risk is the liquidity risk. Liquidity risk is a risk
that the Fund will not have enough available resources to meet its
5. Additional Information on the Financial Statements
5.1 Receivables from Banks
Receivables from banks
Current accounts
Term deposits
Margin accounts (compound margins incl.)
Total
31 Dec 2013 31 Dec 2012
594,889
850,379
51,626
122,199
–
8,949
1,496,894
131,148
Balances on current accounts are repayable on demand.
5.2 Securities
Individual types of securities by issuer, number of securities, their market value and interest rate are disclosed in the Portfolio attached to
the annual report. All securities held by the Fund are publicly listed on the Prague Stock Exchange or foreign stock exchanges. Participation
certiﬁcates which are not listed on stock exchanges are purchased and administered by the Company.
Shares, participation certiﬁcates and other holdings
31 Dec 2013 31 Dec 2012
Acquisition cost
Market revaluation
3,521,254
135,525
853,609
48,050
Total
3,656,779
901,659
260
Investiční společnost České spořitelny, a. s., KONZERVATIVNÍ MIX FF – otevřený podílový fond, 2013 Annual Report
Debt securities
31 Dec 2013 31 Dec 2012
Acquisition cost
Market revaluation
Accrued interest income
84,870
(1,442)
291
129,877
3,000
936
Total
83,719
133,813
Of the aggregate volume of debt securities, debt securities maturing within one year accounted for 0 percent in 2013 (2012: 7.79 percent).
Of the aggregate volume of debt securities, debt securities maturing within more than one year with a variable coupon accounted for 61.82
percent in 2013 (2012: 39.13 percent).
Debt securities maturing within more than one year with a ﬁxed coupon accounted for 38.18 percent in 2013 (2012: 53.08 percent).
5.3 Other Assets
Other assets
Financial derivatives – positive fair value
Other receivables
Other
Total
31 Dec 2013 31 Dec 2012
9,543
367
2,106
3,520
549
645
12,016
4,714
The caption ‘Other’ represents mainly an estimated receivable for the return of a portion of the management fee for purchased participation
certiﬁcates of Erste Bank der oesterreichischen Sparkassen AG Group’s fund.
5.4 Prepayments and Accrued Income
Prepayments and accrued income
31 Dec 2013 31 Dec 2012
Prepayments – audit fees
–
11
Total
–
11
5.5 Equity
The Fund has no share capital. The nominal value of one participation certiﬁcate is CZK 1. The total nominal value of all participation
certiﬁcates is posted to ‘Capital funds’.
Share premium arising from the difference between the nominal and selling values of the participation certiﬁcates is recorded separately.
The Fund accounts for share premium upon the sale of participation certiﬁcates as well as upon their repurchase. The selling price of the
participation certiﬁcate is determined as the share of the Fund’s net assets and the number of issued participation certiﬁcates.
The value of a participation certiﬁcate as at the last trading date in 2013 totalled CZK 1.1001 (2012: CZK 1.0695). This is the most recent
announced value of the participation certiﬁcate for the year, for which purchases and repurchases of the participation certiﬁcates of the Fund
were undertaken. This value minimally differs from the accounting value of the participation certiﬁcate at the balance sheet date due to additional recognition of some items within the ﬁnancial statements.
The proﬁt for 2013 in the amount of CZK 86,433 thousand will be transferred to the reinvestment fund within ‘Other funds from proﬁt’.
The proﬁt for 2012 in the amount of CZK 76,642 thousand was transferred to the reinvestment fund within ‘Other funds from proﬁt’.
261
Investiční společnost České spořitelny, a. s., KONZERVATIVNÍ MIX FF – otevřený podílový fond, 2013 Annual Report
5.6 Changes in the Capital Fund
Number of
Nominal
participation
value of
certiﬁcates participation
certiﬁcates
Balance at 31 Dec 2011
Participation certiﬁcates sold
Participation certiﬁcates purchased
Balance at 31 Dec 2012
Participation certiﬁcates sold
Participation certiﬁcates purchased
Balance at 31 Dec 2013
Use of the Total capital
funds
capital fund
to cover
losses
1,269,740,035
1,269,741
241,666,821
(418,022,466)
241,666
(418,022)
(392,498)
877,243
1,093,348,390
1,093,385
(392,498)
700,887
4,007,346,065
(367,671,093)
4,007,346
(367,671)
–
–
4,007,346
(367,671)
4,733,059,362
4,733,060
(392,498)
4,340,562
241,666
(418,022)
5.7 Other Liabilities
Other liabilities
31 Dec 2013 31 Dec 2012
Negative fair values of ﬁnancial derivatives
Payables from participation certiﬁcate holders’ placements
Payable to the state budget
Other liabilities
33,217
4,037
377
3,029
76
971
57
426
Total
40,660
1,530
5.8 Accrued Expenses and Deferred Income
Accrued expenses particularly consist of the unbilled custody fee of CZK 260 thousand related to December (2012: CZK 58 thousand), the
unbilled management fee of CZK 1,543 thousand related to December (2012: CZK 331 thousand), and the unbilled fee for the local subregister administration of CZK 0 thousand related to December 2013 (2012: CZK 11 thousand) and the unbilled fee for NAV and participation certiﬁcate rate calculation of CZK 21 thousand related to December 2013 (2012: CZK 5 thousand).
5.9 Financial Derivatives Designated as Hedging Derivatives
Nominal value of the derivatives
31 Dec 2013
31 Dec 2012
Assets
Liabilities
Assets
Currency swaps
–
–
155,697
Liabilities
155,039
Total currency instruments
–
–
155,697
155,039
Open positions of derivatives posted to an off-balance sheet are converted to fair value daily as of 1 January 2011 (up to 31 August 2013
futures were converted monthly; as of 1 September 2013 they are converted on daily basis) and recorded in absolute values.
Fair value of the derivatives
31 Dec 2013
31 Dec 2012
Positive
Negative
Positive
Currency swaps
–
–
658
Negative
–
Total currency instruments
–
–
658
–
All currency derivatives are due within one year.
262
Investiční společnost České spořitelny, a. s., KONZERVATIVNÍ MIX FF – otevřený podílový fond, 2013 Annual Report
5.10 Financial Derivatives Designated as Trading Derivatives
Nominal value of the derivatives
31 Dec 2013
31 Dec 2012
Assets
Liabilities
Assets
Liabilities
Currency swaps
Equity indices futures
1,562,424
88,793
1,586,171
88,720
86,987
47,947
85,036
48,282
Total
1,651,217
1,674,891
134,934
133,318
Open positions of derivatives posted to an off-balance sheet are converted to fair value daily as of 1 January 2011 (up to 31 August 2013
futures were converted monthly; as of 1 September 2013 they are converted on daily basis) and recorded in absolute values.
Fair value of the derivatives
31 Dec 2013
31 Dec 2012
Positive
Negative
Positive
Negative
Currency swaps
Equity indices futures
9,470
73
33,217
–
2,001
861
50
26
Total
9,543
33,217
2,862
76
2013
2012
All currency derivatives are due within one year.
5.11 Income from Shares and Interests
Foreign dividends
2,509
379
Total received dividends
2,509
379
2013
2012
Interest on deposits at banks
Interest on debt securities
966
3,037
409
3,877
Total
4,003
4,286
2013
2012
Management fees
Custody fees
Commissions and fees from securities trading
Expenses of administration of the local sub-register
Administration of securities
Other fees and commissions
11,473
1,865
70
124
1,212
1,564
5,039
844
36
131
491
739
Total
16,308
7,280
5.12 Interest Income
5.13 Fees and Commissions
In compliance with the Statute of the Fund, the management fee paid to the Company by the Fund amounts to 0.50 percent of the average
annual net asset value since 1 May 2012 (up to 30 April 2012, the fee was 0.90 percent).
Pursuant to the custody service contract entered into with Česká spořitelna, a. s., the Fund pays a fee equal to 0.06 percent of its average
annual net asset value since 1 May 2012 (up to 30 April 2012, the fee was 0.11 percent).
If participation certiﬁcates of another mutual fund managed by the Company are purchased and added to the Fund’s assets, the Fund’s aggregate net asset value reduced by the current value of investments in participation certiﬁcates of the other mutual fund managed by the
Company is used as the basis for the calculation of the ﬁxed part of the management fee.
263
Investiční společnost České spořitelny, a. s., KONZERVATIVNÍ MIX FF – otevřený podílový fond, 2013 Annual Report
5.14 Proﬁt or Loss from Financial Operations
Proﬁt or loss from securities at fair value through proﬁt or loss
Proﬁt or loss from ﬁxed term transactions
Proﬁt or loss from FX differences
Total
2013
2012
145,704
(54,254)
5,410
66,854
15,613
(2,907)
96,860
79,560
Proﬁt or loss from securities at fair value through proﬁt or loss primarily comprises the proﬁt or loss from the realised sales of securities,
from payable securities and from the daily valuation of securities at fair value.
Proﬁt or loss from derivatives includes proﬁt or loss on the settlement of ﬁxed term transactions with ﬁnancial instruments and also the
revaluation of open derivatives at fair value.
Proﬁt or loss from FX differences represents the value of realised FX proﬁt or loss from foreign currency accounts and from the settlement
of foreign currency receivables and payables and also gains or losses arising from the revaluation of assets, with the exception of securities,
and liabilities in foreign currency at fair value.
5.15 Administrative Expenses
2013
2012
Audit
251
241
Total
251
241
2013
2012
5.16 Income Tax
The principal income tax components are as follows:
Tax payable – current year
376
57
Total income tax
376
57
Current income tax – analysis:
31 Dec 2013 31 Dec 2012
Proﬁt (Loss) before tax
Items to add
Deductible items
Tax base
Tax loss utilisation
Tax base after deduction
Tax (5%) on tax base
Foreign dividends
Tax on foreign dividends
Total tax
86,809
23
(2,518)
84,314
(84,314)
–
–
2,509
376
76,699
6
(383)
76,322
(76,322)
–
–
379
57
376
57
Deferred tax
As at 31 December 2013, the Fund determined a deferred tax asset of CZK 1,402 thousand arising from a tax loss. The deferred tax asset
was not recorded on the basis that its recovery was uncertain.
As at 31 December 2012, the Fund determined a deferred tax asset of CZK 8,330 thousand arising from a tax loss. The deferred tax asset
was not recorded on the basis that its recovery was uncertain.
264
Investiční společnost České spořitelny, a. s., KONZERVATIVNÍ MIX FF – otevřený podílový fond, 2013 Annual Report
5.17 Related Party Transactions
Related parties include Česká spořitelna, a. s. and Investiční společnost České spořitelny, a. s.
2013
2012
Unbilled custody fee – Česká spořitelna
Unbilled management fee – Investiční společnost
Unbilled fee for administration of the local sub-register
Unbilled fee for calculation of NAV
Other payables to related parties
260
1,543
–
21
2,998
58
331
11
5
427
Total payables to related parties
4,822
832
The costs charged to the Fund by Česká spořitelna, a. s. amounted to CZK 4,836 thousand in 2013 (2012: CZK 2,241 thousand), of which the
greatest portion was represented by the custody fee of CZK 1,865 thousand (2012: CZK 844 thousand). The costs charged by the Company
amounted to CZK 11,473 thousand (2012: CZK 5,039 thousand), which is the annual management fee.
5.18 Liquidity
The following tables show the residual maturity of assets and liabilities broken down by major classes of assets.
Given that all securities are traded on public markets, sales can easily be undertaken within three months.
2013
Assets
Less than
3 months
3 month –
1 year
1 – 5 years Over 5 years
Not
speciﬁed
Total
Receivables from banks
Debt securities
Shares and participation certiﬁcates
Other assets
Prepayments
1,496,894
–
–
12,016
–
–
–
–
–
–
–
83,719
–
–
–
–
–
–
–
–
–
–
3,656,779
–
–
1,496,894
83,719
3,656,779
12,016
–
Total assets
1,508,910
–
83,719
–
3,656,779
5,249,408
Other liabilities
Net assets
Available capital
(42,078)
1,466,832
(5,206,923)
(407)
(407)
–
–
83,719
–
–
–
–
–
3,656,779
–
(42,485)
5,206,923
(5,206,923)
Difference
(3,740,091)
(407)
83,719
–
3,656,779
–
Less than
3 months
3 month –
1 year
1 – 5 years
Over
5 years
Not
speciﬁed
Total
Receivables from banks
Debt securities
Shares and participation certiﬁcates
Other assets
Prepayments
131,148
−
−
4,711
−
−
10,428
−
−
11
−
123,385
−
−
−
−
−
−
−
−
−
−
901,659
3
−
131,148
133,813
901,659
4,714
11
Total assets
135,859
10,439
123,385
−
901,662
171,345
Other liabilities
Net assets
Available capital
(1,879)
133,980
(1,169,409)
(57)
10,382
−
−
123,385
−
−
−
−
−
901,662
−
(1,936)
1,169,409
(1,169,409)
Difference
(1,035,429)
10,382
123,385
−
901,662
−
Liabilities
2012
Assets
Liabilities
Liquidity risk, to which the Fund is exposed, is low as all assets are immediately convertible into cash before the expected purchases of
participation certiﬁcates from participation certiﬁcate holders can be undertaken.
265
Investiční společnost České spořitelny, a. s., KONZERVATIVNÍ MIX FF – otevřený podílový fond, 2013 Annual Report
5.19 Off-balance Sheet Assets and Liabilities
The Fund’s off-balance sheet accounts include receivables and payables from ﬁxed term transactions and assets provided into custody and
safekeeping. The item ‘Assets provided into custody, administration and safekeeping’ shows foreign and domestic securities administered
by Česká spořitelna, a. s. (this item does not include participation certiﬁcates of open-ended mutual funds of the Company, which the Fund
maintains in its portfolio).
5.20 Contingent Assets and Liabilities
The Fund has no assets or liabilities that were not disclosed in the balance sheet or off-balance sheet accounts.
5.21 Subsequent Events
No signiﬁcant events occurred after the date of the ﬁnancial statements, which would have a material impact on the Fund’s ﬁnancial statements.
266
Investiční společnost České spořitelny, a. s., KONZERVATIVNÍ MIX FF – otevřený podílový fond, 2013 Annual Report
Portfolio at 31 December 2013
The detail of the portfolio is not part of the fund’s ﬁnal accounts. Figures are stated in CZK.
ISIN
Name of the security
CZ0001003438
CZ0001002737
GOVERNMENT BOND VAR 07/23/17
GOVERNMENT BOND 3.4 09/01/15
Amount Market Price
S & P 500 E-MINI CMEMAR14
FTSE 100 IDX FUTMAR14
DJ EURO STOXX 50 FUTURESMAR14
ISCS CS KORP. DLUHOPIS. OPF
ISCS SPOROINVEST
ISCS TOP STOCKS
ISCS LIKVIDITNI FOND
ISCS DLUHOPISOVY FOND
ISCS SPOROTREND
PICTET – USA INDEX – I USD
ESPA CESKY FOND FIR. DLUH. (VT)
ESPA CORPORATE BASKET 2016
ESPA CASH CORPORATE-PLUS-T
XT EUROPA
ESPA STOCK RUSSIA-T
ESPA BOND EURO-CORPORATE (VT)
ESPA STOCK ISTANBUL (T) EUR
XT USA
ESPA FIDUCIA (VT) CZK
ESPA BOND EUROPE HIGH YIELD T
ESPA BOND USA HIGH YIELD (T) EUR
ESPA CESKY FOND ST. DLUHOPISU VT
BLACKROCK STR EU ABSOLUTE RETURN
MLIS-MARSHALL WAC TP U F-EUR BA
PARVEST FLEXBOND EUR-CORP-I
AXA ROSENBERG US EN INDX E-A
ISHARES DJ EURO STOXX 50
INVESCO KOREAN EQUITY-C
JPMORGAN F-TAIWAN FD-A USD
JPMORGAN F-CHINA FUND-C USD
DWS CONCEPT KALDEMORGEN-FC
VANGUARD-JAPAN STK IND-USD INV
AMUNDI-INDEX EQ EUROPE-IEC
LBBW ROHSTOFFE 2 LS-I
ABERDEEN GL-JAPANESE EQTY-I2
ALLIANCEBERNSTEIN SEL ABS ALPHA
Foreign participation certiﬁcates
Total
(46,000.00)
337,166.67
83,427,500.00
291,166.67
10
8
62
1,831,242.70
2,204,214.23
852,369.00
18,312,427.00
17,633,713.80
52,846,878.00
0.00
0.00
0.00
88,793,018.80
0.00
141,261,625
513,124,609
32,867,730
210,637,995
63,558,993
4,464,684
1.40
1.88
1.74
1.02
1.04
1.12
197,102,345.36
962,108,641.88
57,032,085.10
215,461,605.09
66,393,724.09
4,995,534.93
0.00
0.00
0.00
0.00
0.00
0.00
1,503,093,936.45
0.00
11,000
889,658
244,500
108,113
1,420
36,000
63,900
1,250
4,550
520,247
40,800
12,200
2,918,054
26,000
6,000
40
113,000
410
18,000
20,000
19,500
6,000
12,400
1,670
3,500
1,050
12,000
3,161.55
118.48
116.66
3,371.08
36,332.91
181.28
4,688.03
7,633.75
36,217.03
129.04
3,749.27
4,393.76
144.57
3,410.57
3,256.17
1,211,770.61
443.44
857.44
526.00
306.17
612.54
3,279.76
3,442.68
38,077.14
3,115.75
14,777.08
490.08
34,777,099.28
105,406,679.84
28,523,370.00
364,457,680.15
51,592,738.24
6,526,053.00
299,565,085.05
9,542,185.94
164,787,472.85
67,132,672.88
152,970,287.40
53,603,862.85
421,863,066.78
88,674,898.00
19,537,021.50
48,470,824.33
50,108,410.38
351,551.48
9,467,952.48
6,123,373.20
11,944,457.07
19,678,534.50
42,689,239.10
63,588,830.90
10,905,139.88
15,515,930.10
5,881,017.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
2,153,685,434.18
3,740,206,870.63
0.00
291,166.67
Local participation certiﬁcates - ISČS
LU0188798671
AT0000659024
AT0000A0MRW3
AT0000676846
AT0000697065
AT0000A05SA6
AT0000658968
AT0000704341
AT0000697081
AT0000674692
AT0000805684
AT0000637491
AT0000633771
LU0411704413
LU0333226826
LU0099626896
IE0033609615
IE0008471009
IE0003713199
LU0117843481
LU0129472758
LU0599947271
IE0007292083
LU0389811539
DE000A0X97E0
LU0231474593
LU0736560011
51,800,000.00
31,627,500.00
10,360.00
10,542.50
Futures
CZ0008472230
CZ0008472271
CZ0008472404
CZ0008473188
CZ0008473659
CZ0008472289
Accrued
Interest
5,000
3,000
Local government bonds after 1 January 1998
ESMAR14
FTSEMAR14
DJ50MAR14
Market Price
Total
267
Independent Auditor’s Report
to the Participation certiﬁcate holders of Investiční společnost České spořitelny, a. s.,
VYVÁŽENÝ MIX FF – otevřený podílový fond
We have audited the accompanying ﬁnancial statements of Investiční společnost České spořitelny, a. s., VYVÁŽENÝ MIX FF – otevřený
podílový fond, which comprise the balance sheet as at 31 December 2013, and the income statement and statement of changes in equity for
the year then ended, and a summary of signiﬁcant accounting policies and other explanatory information. For details of Investiční společnost
České spořitelny, a. s., VYVÁŽENÝ MIX FF – otevřený podílový fond, see Note 1 to the ﬁnancial statements.
Management’s Responsibility for the Financial Statements
Management of Investiční společnost České spořitelny, a. s., is responsible for the preparation and fair presentation of these ﬁnancial statements in accordance with accounting principles generally accepted in the Czech Republic, and for such internal control as management determines is necessary to enable the preparation of ﬁnancial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these ﬁnancial statements based on our audit. We conducted our audit in accordance with the
Act on Auditors and International Standards on Auditing as amended by implementation guidance of the Chamber of Auditors of the Czech
Republic. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
whether the ﬁnancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the ﬁnancial statements. The procedures selected depend on the auditor’s judgment, including an assessment of the risks of material misstatement of the ﬁnancial statements,
whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation
and fair presentation of the ﬁnancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the ﬁnancial statements.
We believe that the audit evidence we have obtained is sufﬁcient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the ﬁnancial statements present fairly, in all material respects, the ﬁnancial position of Investiční společnost České
spořitelny, a. s., VYVÁŽENÝ MIX FF – otevřený podílový fond, as at 31 December 2013, and its ﬁnancial performance for the year then
ended in accordance with accounting principles generally accepted in the Czech Republic.
31 March 2014
Prague, Czech Republic
Ernst & Young Audit, s.r.o.
License No. 401
Represented by partner
Roman Hauptﬂeisch
Auditor, Licence no. 2009
A member ﬁrm of Ernst & Young Global Limited,
Ernst & Young Audit, s. r. o. with its registred ofﬁce at Na Florenci 2116/15, 110 00 Prague 1 – Nové Město,
has been incorporated in the Commercial Register administered by the Municipal Court in Prague,
Section C, entry No. 88504, under Identiﬁcation No. 26704153.
268
Investiční společnost České spořitelny, a. s., VYVÁŽENÝ MIX FF – otevřený podílový fond, 2013 Annual Report
Balance Sheet
at 31 December 2013
(in thousands CZK)
Line
Current
Previous
1
2
5
6
10
11
12
13
15
16
19
21
173,577
139,524
12,791
21,262
19,974
19,974
0
1,661,578
7,386
6,421
965
0
150,585
131,268
19,317
0
280,833
227,372
53,461
1,142,473
9,766
9,028
738
12
22
1,862,515
1,583,669
29
30
32
33
34
39
40
41
46
47
18,745
17,415
117
1,213
1,345
310,604
485,490
928,000
6,243
112,088
1,054
543
68
443
1,183
272,770
309,734
816,929
6,243
175,756
Total Liabilities
48
1,862,515
1,583,669
of which: Equity
49
1,842,425
1,581,432
3 Receivables from banks and credit unions
of which: a/ on demand: aa/ current accounts
ad/ margin accounts
ae/ collaterals
5 Debt securities
of which: a/ issued by the government
b/ issued by other entities
6 Shares, unit certiﬁcates and other participation interests
11 Other assets
a/ derivatives
d/ other assets
13 Prepayments and accrued income
Total Assets
4 Other liabilities
a/ derivatives
c/ liabilities from taxes
d/ other liabilities
5 Deferred income and accrued expenses
9 Share premium
10 Reserve funds and other funds from proﬁt
12 Capital funds
14 Retained earnings or accumulated losses from previous periods
15 Proﬁt or loss for the accounting period
269
Investiční společnost České spořitelny, a. s., VYVÁŽENÝ MIX FF – otevřený podílový fond, 2013 Annual Report
Off Balance Sheet Accounts
at 31 December 2013
(in thousands CZK)
4 Amounts due from ﬁxed term transactions
b/ with currency instruments
c/ with equity instruments
6 Receivables written off
7 Assets provided into custody, administration and safekeeping
of which: securities
12 Amounts owed from ﬁxed term transactions
b/ with currency instruments
c/ with equity instruments
Line
Current
Previous
52
54
55
58
60
61
64
66
67
902,133
850,771
51,362
6,271
1,240,649
1,240,649
913,127
861,804
51,323
564,953
523,689
41,264
6,225
1,062,330
1,062,330
556,883
515,458
41,425
270
Investiční společnost České spořitelny, a. s., VYVÁŽENÝ MIX FF – otevřený podílový fond, 2013 Annual Report
Proﬁt and Loss Account
for the year ended 31 December 2013
(in thousands CZK)
1 Interest income and similar income
of which: a/ interest income from bonds
d/ interest income from collaterals
3 Income from shares and unit certiﬁcates
5 Commission and fee expenses
a/ fees and commissions from securities trading
b/ management fee
c/ custody fee
d/ other ﬁnancial expenses
6 Proﬁt or loss on ﬁnancial operations
a/ proﬁt or loss on transactions with securities
b/ proﬁt or loss on foreign exchange transactions
c/ proﬁt or loss on ﬁxed term transactions and options
9 Administrative expenses
of which: b/ other administrative expenses: ba/ audit
12 Release of provisions and bad debt allowances to receivables and guarantees,
income from receivables written off
Depreciation, creation and utilizing of provisions and bad debt allowances to
13 receivables and guarantees
19 Ordinary proﬁt or loss for the accounting period before tax
23 Income tax
24 Proﬁt or loss for the accounting period after tax
Line
Current
Previous
1
2
5
9
10
11
12
13
14
15
16
17
18
21
22
8,024
7,155
5
780
16,812
49
13,007
1,857
1,899
120,442
144,157
4,283
(27,998)
221
221
10,727
9,128
0
446
18,337
40
14,543
1,823
1,931
183,366
152,169
(515)
31,712
246
246
24
142
8
25
26
30
31
150
112,205
117
112,088
141
175,823
67
175,756
271
Investiční společnost České spořitelny, a. s., VYVÁŽENÝ MIX FF – otevřený podílový fond, 2013 Annual Report
Statement of Changes in Equity
for the year ended 31 December 2013
(in thousands CZK)
1 Share premium
opening balance
issued unit certiﬁcates
repurchase of unit certiﬁcates
other changes
closing balance
2 Retained earnings
opening balance
transfers to funds
other changes
closing balance
3 Capital funds
opening balance
issued unit certiﬁcates
repurchase of unit certiﬁcates
transfers to funds
other changes
closing balance
4 Gains or losses from revaluation
opening balance
foreign exchange rate differences and gains or losses from revaluation not
included in proﬁt (loss)
closing balance
5 Retained earnings or accumulated losses from previous periods
opening balance
other changes
closing balance
6 Proﬁt (loss) for the current period after taxes
opening balance
proﬁt (loss)
transfers to funds, dividends
closing balance
7 Total
Line
Current
Previous
272,770
105,986
(68,152)
0
310,604
331,152
23,845
(82,227)
0
272,770
309,734
175,756
0
485,490
403,033
0
(93,299)
309,734
816,929
326,799
(215,728)
0
0
928,000
1,088,735
109,717
(381,523)
0
0
816,929
0
0
0
0
0
0
6,243
0
6,243
6,243
0
6,243
175,756
112,088
(175,756)
112,088
(93,299)
175,756
93,299
175,756
1,842,425
1,581,432
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Investiční společnost České spořitelny, a. s., VYVÁŽENÝ MIX FF – otevřený podílový fond, 2013 Annual Report
Notes to the Financial Statements
for the year ended 31 December 2013
1. Organisation and Description of
Business
Formation and Description of the Business
Investiční společnost České spořitelny, a. s., VYVÁŽENÝ MIX
FF – otevřený podílový fond, hereinafter the “Fund” (from
26 March 2002 to 1 May 2005 Investiční společnost České
spořitelny, a. s., Sporomix 3 – otevřený podílový fond and to
25 March 2002 Investiční společnost České spořitelny, a. s. –
2. otevřený podílový fond) was established upon the transformation of 2. spořitelní privatizační investiční fond, a. s. based on
Resolution of the Securities Commission ref. No. 211/981/R/2000
dated 25 February 2000.
Principal Business
The Company collects funds from individuals and legal entities for
the Fund by issuing participation certiﬁcates with the purpose of
their collective investment on local and foreign ﬁnancial markets.
No restrictions are placed on the number of participation certiﬁcates for issue and the period for which the Fund is established.
The Company reserves the right to temporary halt the issuing of
participation certiﬁcates for no longer than three months in compliance with the Act.
The participation certiﬁcates of the Fund are available both in the
Czech Republic and in other EU member countries.
Investment Policy of the Fund
Pursuant to a concluded contract, Česká spořitelna, a. s. acts as the
depository of the Fund.
The Fund is managed by Investiční společnost České spořitelny, a. s.
(hereinafter the “Company”). In compliance with the Collective
Investment Act No. 189/2004 Coll. (hereinafter the “Act”), the
Company is responsible for the management of the assets of the
Fund, which involves the administration and handling of the assets.
The Fund is a standard fund in compliance with the Act and meets
the requirements of EU legislation.
According to the classiﬁcation binding for the members of the
Capital Market Association (hereinafter the “AKAT CR”) as at the
date of the approval of this Statute, the Fund can be deﬁned as the
fund of the funds.
On 7 August 2009, following the Company’s request, the Czech
National Bank resolved to merge the Fund with the open-ended
mutual fund Investiční společnost České spořitelny, a. s., ČS Balancovaný – otevřený podílový fond, under Section 101 (2) of the
Act. The Fund is a receiving fund and the Statute of the receiving
Fund remains unchanged.
With the Czech National Bank resolution becoming effective on
7 August 2009, the merging fund ceased to exist on 9 November
2009 (the merger date).
Registered Ofﬁce
Investiční společnost České spořitelny, a. s.
VYVÁŽENÝ MIX FF – otevřený podílový fond
Prague 6, Evropská 2690/17
The objective of the investment policy is to provide participation
certiﬁcate holder with a long-term appreciation of participation
certiﬁcates primarily through investments in securities of money
market funds and collective investment bond and equity funds.
Credit and interest rate risks are actively managed.
The equity component’s share in the Fund’s portfolio is actively
managed. The neutral weight of the equity component’s share in
the Fund’s assets amounts to 30 percent.
Finances collected in the Fund are invested predominantly in securities of collective investment funds if such collective investment
funds distribute the risk connected to investments and meet other
obligations as set by the Act.
The Fund’s portfolio can be expanded by purchasing shares, bonds
and other investment instruments allowed by the Act for collective
investment of a standard fund.
The limits of the Fund are adhered to on the basis of the Act, or
they are regulated in the Fund’s Statute in compliance with the Act.
The Fund uses ﬁnancial derivatives to hedge against currency and
interest rate exposures.
The Company can use ﬁnancial derivatives to effectively manage
the Fund’s assets. Efﬁcient asset management represents transactions for the purpose of decreasing risk, decreasing costs or achieving sufﬁcient income for the Fund provided that the risk is demonstrably low. The exposure from these transactions must be fully
covered by the Fund’s assets so that liabilities arising from these
transactions are fulﬁlled.
The Company can accept loans and borrowings for the maximum
of six months when managing the Fund’s assets, to cover temporary needs related to the management of the Fund’s assets or
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Investiční společnost České spořitelny, a. s., VYVÁŽENÝ MIX FF – otevřený podílový fond, 2013 Annual Report
purchases of participation certiﬁcates. The volume of the received
loans and borrowings must not exceed 10 percent of the value of
the Fund’s assets.
Change in the Fund’s Statute
Czech National Bank Resolution No. 2012/4589/570, dated 18
May 2012, which came into force on 5 June 2012: The changes to
the Funds statute related mainly to the duty of the asset investment
company to ensure that its statute is in accordance with the amendment to Act 189/2004 Coll., on collective investments (as ensuing
from the changes made by Act 188/2011 Coll.) and Decree No.
193/2011 Coll., on the minimum requisites of the statute and on
the conditions for the use of the name Short-Term Money Market
Fund and Money Market Fund. Investment objectives, the method
of investing and the risk proﬁle of the Fund have not been changed
in the amendments referred to above.
Along with the change made to the statute, information was updated as to the list
of funds managed by the Company (Article II Paragraph 8 of the statute), in particular information on the
managing parties of the asset management company (Appendix 1
to the statute), information added on the performance of the mutual
fund for 2011 (Appendix 2 to the statute), information updated on
the total cost indicators for 2011, and the date on which the statute
being signed was updated.
On the date the changes to the statute came into force the simple
statute of the Fund was replaced by a newly processed document
providing required key information
for investors. Such key
information for investors was processed in accordance
with
Commission (EU) Regulation No. 583/2012.
As at 1 February 2013, information on Fund`s 2012 performance
was published within the document Key investors information.
(According to the article 23, section 3 of Council Regulation (EC)
no. 583/2010, the performance must be updated within the Key investors information up to 35 days after the previous calendar year
end.)
The updated text of the Funds statute was approved by the Investment company`s board of directors as at 10 April 2013. The
changes in the statute text related to an update of the list of managed funds, update of the information on the length of professional
experience of Investment company management, addition of information on Fund’s performance and the Fund`s benchmark`s
performance, an update of information on total expense ratio for
2012 and update of the date of the signature. These updates were
not subject to preliminary approval from Czech national bank (according to the section 84 (a), subsection 5 of 189/2004 Coll. Act on
collective investment. The shareholders could access the updated
text of the Statute and Key investors information as of 10 April
2013 on http://www.iscs.cz/, at the distributor’s branches (Ceska
sporitelna, a. s.) and at the Investment company seat.
Legislative change
Act No 240/2013 Coll., Act on Management Companies and Investment Funds became effective as of 19 August 2013. Rules
stated by this act must be implemented by management companies
and investment funds by 22 July 2014. In 2013, the Fund`s management was subject to the rules of the Act No. 189/2004 Coll.,
On collective investment schemes. The new rules will be applied
as of 2014.
2. Basis of Preparation
The ﬁnancial statements have been prepared on the basis of underlying accounting records maintained in accordance with Accounting Act No. 563/1991 Coll., and applicable regulations, decrees and internal standards in compliance with and in the scope
deﬁned in Czech Finance Ministry Regulation No. 501/2002 of
6 November 2002, as subsequently amended, which sets out the
overall framework for the presentation of the ﬁnancial statements,
and guidelines for the structure and minimum requirements for the
content of the ﬁnancial statements of banks and certain ﬁnancial
institutions, and Czech Accounting Standards for Financial Institutions, which establish the accounting principles and policies.
The basis of preparation and the accounting policies have been
consistently applied during both 2013 and 2012.
The Fund is obliged to comply with the regulatory requirements
of the Act.
The ﬁnancial statements are presented in compliance with general
accounting principles, speciﬁcally the accrual principle, the prudence concept and the going concern assumption.
The ﬁnancial statements contain the balance sheet, proﬁt and loss
account, statement of changes in equity, and notes to the ﬁnancial
statements.
The presentation of the ﬁnancial statements requires that the
Company make estimates which have an impact on the reported
amounts of assets and liabilities as at the date of the ﬁnancial statements as well as expenses and income in the relevant accounting
period. These estimates are based on information available as at
the date of the ﬁnancial statements and may differ from the actual
results.
As a result of continued market volatility since the start of the
global ﬁnancial crisis, the Fund may be exposed to increased risk,
speciﬁcally due to the uncertainty regarding possible asset impairments and future developments on the market. The ﬁnancial
statements have been prepared based on the current best estimates
using all relevant and available information as at the date of the
ﬁnancial statements.
These ﬁnancial statements are unconsolidated.
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All amounts are stated in thousands of Czech crowns (CZK), unless indicated otherwise.
Explanation Added for Translation into English
These ﬁnancial statements are presented on the basis of accounting
principles and standards generally accepted in the Czech Republic.
Certain accounting practices applied by the Company that conform with generally accepted accounting principles and standards
in the Czech Republic may not conform with generally accepted
accounting principles in other countries.
3. Accounting Policies
Transaction Recognition Date
Purchases and sales of securities are recognised using trade date
accounting provided that the period between the trade date and the
fulﬁlment of the commitment arising from the contract does not
exceed a period typical for the relevant type of transaction.
The transaction recognition date for derivative contracts is:
a) The date upon which the related contract was entered into;
b) The date when the fulﬁlment was delivered based on the relevant contract.
The transaction recognition date can also be the date when money
in circulation is paid or received, the date when foreign currency is
purchased or sold, the date when a payment is made, the date when
ownership is acquired or terminated, when a receivable or payable
arises, changes or ceases to exist, when assets move within an accounting entity, and the date when other matters to be included
in the accounting records occur, or when the documents supporting these other matters are available, or when other matters are
a consequence of internal conditions of the accounting entity and/
or special regulations.
Securities and investment certiﬁcates
In accordance with the Fund’s strategy, all securities are classiﬁed
as ‘securities at fair value through proﬁt or loss. During the accounting period, securities are re-measured at fair value on a daily
basis pursuant to the Finance Ministry Regulation No. 194/2011
Coll., on more detailed regulation of certain rules in collective investment (the “Decree”), as amended.
The securities of the Fund are accounted for as securities at fair
value through proﬁt or loss. The fair value of the securities is determined in accordance with the International Financial Reporting
Standards with an exception, that an average price between the
most favourable binding offer and demand (MID price) is used
for bonds.
The securities of the Fund are accounted for as securities at fair
value through proﬁt or loss. Pursuant to the Regulation, securities
are valued at the price quoted on a public market which is adjusted,
as appropriate, to reﬂect the rules set out in the Regulation. If the
market value is unavailable, the Fund uses a value determined by
the Company using valuation models based on discounted future
cash ﬂows according to the yield curve calculated using the Reuters and Kondor+ systems.
Securities (including certiﬁcates) are measured at cost upon initial
recognition using the weighted average method. The acquisition
cost includes direct transaction costs related to the acquisition of
securities.
Realised capital gains or losses are recorded in the proﬁt and loss
account within ‘Proﬁt or loss from ﬁnancial operations’.
Accrued interest relating to assets is included within the total balance of these assets.
Receivables and Payables
The Fund records receivables arising from its transactions with
securities and other operating receivables at their nominal value,
while receivables from positive fair values of derivatives are recorded at the fair value of the derivatives at the balance sheet date.
Pursuant to the prudence principle, provisions are created based on
the aging of receivables.
The Fund records payables arising from its transactions with securities and operating payables at their nominal value, while payables from negative fair values of derivatives are recorded at the fair
value of the derivatives at the balance sheet date.
Financial Derivatives and Hedging Transactions
In the normal course of business, the Fund enters into hedging
contracts with ﬁnancial derivatives to hedge against interest rate
and foreign currency exposures associated with its transactions on
ﬁnancial markets. The method of fair value hedges is applied to
hedging derivatives.
The Fund designates certain derivatives as hedges provided that
the following criteria are met:
– the Fund has developed a risk management strategy;
– at the inception of the hedge, the hedging relationship is formally documented, the documentation identiﬁes the hedged
item and the hedging instrument, and it deﬁnes the risk that
is being hedged and the approach to establishing whether the
hedge is effective; and
– the hedge is effective, that is, changes in the fair value or cash
ﬂows of the hedged item are almost fully offset by changes in
the fair value or cash ﬂows of the hedging instrument and the
results are within a range of 80 percent to 125 percent.
Nominal values of derivative ﬁnancial instruments are recognised
in the off-balance sheet accounts. Changes in the fair value of derivatives that are designated and qualify as hedges (see above) are
recorded as income or expense. Changes in the fair value of the
hedging derivatives attributable to the risk hedged are recognised
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Investiční společnost České spořitelny, a. s., VYVÁŽENÝ MIX FF – otevřený podílový fond, 2013 Annual Report
in the same income or expense accounts as differences from revaluation of a hedged instrument.
All ﬁnancial derivatives are recorded as assets when the fair value
is positive and as liabilities when the fair value is negative. Fair
values are derived from valuation models.
Derivatives that are not designated as hedging derivatives are
treated as trading derivatives. These derivatives are measured at
fair value on a daily basis and gains and losses on revaluation are
posted to derivative expense and income accounts.
Certain derivatives are embedded in compound ﬁnancial instruments, which comprise the host instrument and the derivative. Pursuant to the applicable regulations, the Fund recognises changes in
assets and liabilities arising from the movements in rates or prices
of securities or changes in exchange rates through expense and income accounts. Given that the assets of the Fund are valued at fair
value and changes of fair values are reported within expenses and
income from derivatives, embedded derivatives are not accounted
for separately.
Income Tax
Under effective tax regulations, the income tax rate applicable to
mutual funds is 5 percent.
Deferred Tax
Deferred tax is provided using the liability method on all temporary differences between the carrying amount of assets and liabilities reported in the balance sheet and their value for tax purposes.
Deferred tax assets are recognised only up to the amount of probable future taxable income against which the deferred tax asset can
be offset.
Foreign Currency Translations
Foreign currencies are translated using the exchange rate promulgated by the Czech National Bank as at the relevant date. As at the
balance sheet date, assets and liabilities denominated in foreign
currencies are translated on the same basis.
Foreign exchange rate gains and losses from the daily translation
of assets and liabilities in foreign currencies are posted to expense
or income accounts.
Capital Funds
The selling price of participation certiﬁcates is calculated as a proportion of the Fund’s net assets and the relevant number of participation certiﬁcates. Participation certiﬁcates are sold to qualiﬁed
investors using the selling price determined on a daily basis.
Share Premium
Share premium is the difference between the nominal value of all
participation certiﬁcates and their carrying amounts as at the date
of their issue or purchase.
Interest Income and Expense and Dividend
Income
Interest income and expense are recognised using the accrual principle.
Dividend income is recognised as at the date when the right to
receive the payment is established (ex-dividend date). Dividend income from domestic securities is presented after withholding tax.
Dividend income from foreign securities is presented gross with
the applicable taxes presented within taxes on foreign dividends
(see note 5.16).
Subsequent Events
The impact of events that occurred between the balance sheet date
and the date of the ﬁnancial statements preparation is recognized in
the ﬁnancial statements provided these events provide additional
evidence about conditions that existed at the date of the balance
sheet.
If material events reﬂecting the facts occurring after the balance
sheet date happened between the balance sheet date and the date
of the ﬁnancial statements preparation the consequences of these
events are disclosed in the notes to the ﬁnancial statements but not
recognized in the ﬁnancial statements.
4. Risk Management
Credit Risk
In accordance with the Statute and the investment strategy, the
Company establishes rules and policies for selecting investment
instruments such that the overall credit risk proﬁle of allocated investments is consistent with the characteristics of the Fund. New
types of instruments are approved on a case by case basis by the
risk management function together with the speciﬁcation of limits
for positions pertaining to these instruments. Speciﬁc emphasis is
placed on an appropriate rating structure and a relatively detailed
diversiﬁcation of portfolios (especially in relation to interest bearing securities).
Market Risk
The Fund uses a wide range of tools to eliminate risk exposures
attached to its portfolios. Signiﬁcant attention is paid to market
risks. Apart from statutory restrictions, the Fund is subject to a set
of internal limits having a direct impact on the FX exposure, interest rate exposure (the modiﬁed duration range of the Fund), equity
allocation on individual markets according to their volatility, portfolio rating structure (see above), and other characteristics of the
Fund. The relevant limits are appropriately applied to correspond
with the type of the Fund.
Whenever the Fund purchases new types of instruments, these instruments are ﬁrst analysed to assess the potential credit risk, as
well as the market risk that the instruments might bring to or help
276
Investiční společnost České spořitelny, a. s., VYVÁŽENÝ MIX FF – otevřený podílový fond, 2013 Annual Report
eliminate from the portfolio. Subsequently, their appropriateness
and, if appropriate, the acceptable proportion of these instruments
in the portfolio is evaluated.
Adherence to all the above limits and their effectiveness is monitored and assessed on an ongoing basis. The limits are reviewed,
if necessary.
The level of the Fund’s market risk exposure is measured using
the Value at Risk (“VaR”). With effect from 1 August 2006, the
VaR for the Company’s Funds is calculated by the Central Risk
Management Department of Česká spořitelna using the historical
simulation method in the K + KvaR system.
The portfolio’s risk of unfavourable development of foreign exchange rates, interest rates, and other market factors is hedged, to
an appropriate extent, by ﬁnancial derivatives. Financial derivatives are traded on the OTC market as this market enables the trading of contracts whose parameters and nature appropriately satisfy
the requirements of a hedge. Portfolios primarily include currency
swaps, currency forwards and interest rate swaps.
Set out below are relative monthly values of the VaR in percentage
terms for individual types of risks:
Liquidity Risk
31 Dec 2013
Average
VaR
2.91%
0.27%
0.02%
2.75%
3.11%
0.37%
0.25%
3.15%
31 Dec 2012
Average
VaR
3.37%
0.27%
0.22%
3.33%
3.30%
0.36%
0.31%
3.22%
Global VaR
Foreign currency VaR
Interest rate VaR
Equity VaR
Global VaR
Foreign currency VaR
Interest rate VaR
Equity VaR
The average VaR is calculated as average of daily VaR values in
years 2013 and 2012 respectively.
The Fund monitors Value at Risk globally and also broken down to
Foreign Currency VaR, Interest Rate VaR and Equity VaR. Based
on the above values, the Fund identiﬁes critical risk segments. This
identiﬁcation inﬂuences the reinvestment process. The limits set
the maximum acceptable VaR for the Fund.
The Equity VaR also reﬂects the risk related to the holding of mutual funds’ participation certiﬁcates (including funds of money
market and bond funds).
Another monitored risk is the liquidity risk. Liquidity risk is a risk
that the Fund will not have enough available resources to meet its
obligations arising from ﬁnancial contracts. Liquidity is monitored
and managed based on expected cash ﬂows, with appropriate adjustments made to the structure of securities and term placements
portfolios.
Pursuant to the Act, the Company is obliged to repurchase a participation certiﬁcate without undue delay but not later than 15 business days from the date when the repurchase right is claimed. Given that the Fund holds securities traded on foreign stock exchanges
which can be realised within a few days, the Fund’s inability to
meet its obligations due to lack of liquidity is unlikely.
Pursuant to Section 12 of the Collective Investment Act, the Company can suspend issues and purchases of the Fund’s participation
certiﬁcates for a maximum of three months, if necessary due to the
protection of rights or the participation certiﬁcate holder’ interests
protected by law. Issuing and purchasing participation certiﬁcates
can be suspended particularly at the end or beginning of the calendar year, in the event of natural disasters, upon very strong ﬂuctuations on ﬁnancial markets and upon high requirements for the
sales or purchases of participation certiﬁcates provided they could
endanger the Fund’s assets.
The quantitative information about the residual maturity of assets
and liabilities is given in Note 5.20.
5. Additional Information on the Financial Statements
5.1 Receivables From Banks
Receivables from banks
31 Dec 2013 31 Dec 2012
Current accounts
Margin accounts
Deposited margins
139,524
12,791
21,262
131,268
19,317
–
Total
173,577
150,585
Balances on current accounts are repayable on demand.
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Investiční společnost České spořitelny, a. s., VYVÁŽENÝ MIX FF – otevřený podílový fond, 2013 Annual Report
5.2 Securities
Individual types of securities by issuer, number of securities, their market value and interest rate are disclosed in the Portfolio attached to
the annual report. All securities held by the Fund are publicly listed on the Prague Stock Exchange or foreign stock exchanges. Participation
certiﬁcates which are not listed on stock exchanges are purchased and administered by the Company.
Debt securities
31 Dec 2013 31 Dec 2012
Acquisition cost
Market revaluation
Accrued interest income
18,829
862
283
254,108
24,048
2,677
Total
19,974
280,833
Shares, participation certiﬁcates and other holdings
31 Dec 2013 31 Dec 2012
Acquisition cost
Market revaluation
1,532,576
129,002
1,042,470
100,003
Total
1,661,578
1,142,473
Of the aggregate volume of debt securities, debt securities maturing within one year accounted for 0 percent in 2013 (2012: 20.16 percent).
Of the aggregate volume of debt securities, debt securities maturing within more than one year with a variable coupon accounted for 0
percent in 2013 (2012: 0 percent).
Debt securities maturing within more than one year with a ﬁxed coupon accounted for 100 percent in 2013 (2012: 79.84 percent).
5.3 Other Assets
Individual investment certiﬁcates by issuer, number of investment certiﬁcates and their market value are disclosed in the Portfolio attached
to the annual report.
Other assets
Positive fair values of ﬁnancial derivatives
Other receivables
Other
Provisions against receivables
Total
31 Dec 2013 31 Dec 2012
6,421
1,198
965
(1,198)
9,028
1,362
699
(1,323)
7,386
9,766
‘Other receivables’ relate mainly to receivables arising from dividends.
The caption ‘Other’ represents an estimated receivable for the return of a portion of the management fee for purchased participation certiﬁcates of Ertste’s fund in the amount of CZK 965 thousand (2012: CZK 699 thousand).
5.4 Prepayments and Accrued Income
Prepayments and accrued income
Prepayments – audit fees
Total
31 Dec 2013 31 Dec 2012
–
–
12
12
5.5 Equity
The Fund has no share capital. The nominal value of one participation certiﬁcate is CZK 1. The total nominal value of all participation
certiﬁcates is posted to ‘Capital funds’.
Share premium arising from the difference between the nominal and selling values of the participation certiﬁcates is recorded separately.
The Fund accounts for share premium upon the sale of participation certiﬁcates as well as upon their repurchase. The selling price of the
participation certiﬁcate is determined as the share of the Fund’s net assets and the number of issued participation certiﬁcates.
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Investiční společnost České spořitelny, a. s., VYVÁŽENÝ MIX FF – otevřený podílový fond, 2013 Annual Report
The value of a participation certiﬁcate as at the last trading date in 2013 totalled CZK 1.3614 (2012: CZK 1.2731). This is the most recent
announced value of the participation certiﬁcate for the year, for which purchases and repurchases of the participation certiﬁcates of the Fund
were undertaken. As at 31 December 2013 this value minimally differed from the accounting value of the participation certiﬁcate at the
balance sheet date due to additional recognition of some items within the ﬁnancial statements.
The proﬁt for 2013 in the amount of CZK 112,088 thousand will be transferred to the reinvestment fund within ‘Other funds from proﬁt’.
The proﬁt for 2012 in the amount of CZK 175,756 thousand was transferred to the reinvestment fund within ‘Other funds from proﬁt’.
5.6 Changes in the Capital Fund
Contribution
Number of
Nominal
participation
value of upon the Fund
certiﬁcates participation transformation
certiﬁcates
Balance at 31 Dec 2011
Participation certiﬁcates sold
Participation certiﬁcates purchased
Balance at 31 Dec 2012
Participation certiﬁcates sold
Participation certiﬁcates purchased
Balance at 31 Dec 2013
Use of fund Total capital
to cover
funds
losses
1,514,027,100
1,514,028
651,800
(1,077,093)
1,088,735
109,717,293
(381,523,030)
109,717
(381,523)
–
–
–
–
109,717
(381,523)
1,242,221,363
1,242,222
651,800
(1,077,093)
816,929
326,798,395
(215,727,785)
326,799
(215,728)
–
–
–
–
326,799
(215,728)
1,353,291,973
1,353,293
651,800
(1,077,093)
928,000
5.7 Other Liabilities
Other liabilities
31 Dec 2013 31 Dec 2012
Negative fair values of ﬁnancial derivatives
State budget settlement
Payables to participation certiﬁcate holder
Other liabilities
17,415
117
552
661
543
68
189
254
Total
18,745
1,054
5.8 Accrued Expenses and Deferred Income
Accrued expenses consist of the unbilled custody fee of CZK 169 thousand related to December 2013 (2012: CZK 145 thousand), the unbilled management fee of CZK 1,168 thousand related to December 2013 (2012: CZK 1,017 thousand) and the unbilled fee for calculation
of net assets value and participation certiﬁcate rate of CZK 8 thousand (2012: CZK 7 thousand).
5.9 Financial Derivatives Designated as Hedging Derivatives
Nominal value of the derivatives
31 Dec 2013
31 Dec 2012
Assets
Liabilities
Assets
Currency swaps
110,033
116,829
49,007
Liabilities
48,892
Total
110,033
116,829
49,007
48,892
Open positions of derivatives posted to an off-balance sheet are converted to fair value daily as of 1 January 2011 (up to 31 August 2013
futures were converted monthly; as of 1 September 2013 they are converted on daily basis) and recorded in absolute values.
Fair value of the derivatives
31 Dec 2013
31 Dec 2012
Positive
Negative
Positive
Currency swaps
–
6,796
115
Negative
–
Total
–
6,796
115
–
Currency derivatives are due within one year.
279
Investiční společnost České spořitelny, a. s., VYVÁŽENÝ MIX FF – otevřený podílový fond, 2013 Annual Report
5.10 Financial Derivatives Designated as Trading Derivatives
Nominal value of the derivatives
31 Dec 2013
31 Dec 2012
Assets
Liabilities
Assets
Liabilities
Currency swaps
Currency forwards
Equity indices futures
712,903
27,835
51,362
717,345
27,630
51,323
474,682
–
41,264
466,566
–
41,425
Total
792,100
796,298
515,946
507,991
Open positions of derivatives posted to an off-balance sheet are converted to fair value daily as of 1 January 2011 (up to 31 August 2013
futures were converted monthly; as of 1 September 2013 they are converted on daily basis) and recorded in absolute values.
Fair value of the derivatives
31 Dec 2013
31 Dec 2012
Positive
Negative
Positive
Negative
Currency swaps
Currency forwards
Equity indices futures
6,177
205
39
10,619
–
–
8,569
–
344
453
–
90
Total
6,421
10,619
8,913
543
2013
2012
Interest on deposits
Interest on debt securities
Interest from deposited margins
864
7,155
5
1,599
9,128
–
Total
8,024
10,727
2013
2012
Currency derivatives are due within one year. Equity derivatives are due within one year.
5.11 Interest Income
5.12 Income from Shares and Interests
Foreign dividends
780
446
Total
780
446
2013
2012
Management fees
Custody fees
Commissions and fees from securities trading
Fees – central depository
Expanses of administration of the local sub-register – ČS
Administration of securities
Other fees and commissions
13,007
1,857
49
4
153
1,111
631
14,543
1,823
40
5
164
1,094
668
Total
16,812
18,337
5.13 Fees and Commissions
In compliance with the Statute of the Fund, the management fee paid to the Company by the Fund amounts to 1.00 percent of the average
annual net asset value.
Pursuant to the custody service contract entered into with Česká spořitelna, a. s., the Fund pays a fee equal to 0.11 percent of its average
annual net asset value.
280
Investiční společnost České spořitelny, a. s., VYVÁŽENÝ MIX FF – otevřený podílový fond, 2013 Annual Report
If participation certiﬁcates of another mutual fund managed by the Company are purchased and added to the Fund’s assets, the Fund’s aggregate net asset value reduced by the current value of investments in participation certiﬁcates of the other mutual fund managed by the
Company is used as the basis for the calculation of the ﬁxed part of the management fee.
5.14 Proﬁt or Loss from Financial Operations
2013
2012
Proﬁt or loss from securities at fair value through proﬁt or loss
Proﬁt or loss from ﬁxed term transactions
Proﬁt or loss from FX differences
144,157
(27,998)
4,283
152,169
31,712
(515)
Total
120,442
183,366
Proﬁt or loss from securities at fair value through proﬁt or loss primarily comprises the proﬁt or loss from the realised sales of securities,
from payable securities and from the daily valuation of securities at fair value.
Proﬁt or loss from derivatives includes proﬁt or loss on the settlement of ﬁxed term transactions with ﬁnancial instruments and also the
revaluation of open derivatives at fair value.
Proﬁt or loss from FX differences represents the value of realised FX proﬁt or loss from foreign currency accounts and from the settlement
of foreign currency receivables and payables and also gains or losses arising from the revaluation of assets, with the exception of securities,
and liabilities in foreign currency at fair value.
5.15 Administrative Expenses
2013
2012
Audit
221
246
Total
221
246
2013
2012
5.16 Income Tax
The principal income tax components are as follows:
Tax payable – current year
117
67
Total income tax
117
67
Current income tax – analysis:
31 Dec 2013 31 Dec 2012
Proﬁt (Loss) before tax
Items to add
Deductible items
Tax base
Tax loss utilisation
Adjusted tax base
Tax (5%) on tax base
Foreign dividends
Tax on foreign dividends
Additional tax payments
Total tax
112,205
153
(921)
111,437
(111,437)
–
–
779
117
–
175,823
142
(454)
175,511
(175,511)
–
–
446
67
–
117
67
As at 31 December 2013, the Fund determined a deferred tax asset of CZK 5,092 thousand arising from a tax loss and provisions against
receivables. The deferred tax asset was not recorded on the basis that its recovery was uncertain.
As at 31 December 2012, the Fund determined a deferred tax asset of CZK 18,073 thousand arising from a tax loss and provisions against
receivables. The deferred tax asset was not recorded on the basis that its recovery was uncertain.
281
Investiční společnost České spořitelny, a. s., VYVÁŽENÝ MIX FF – otevřený podílový fond, 2013 Annual Report
5.17 Release of Provisions against Receivables
Decrease in provision – partial collection
2013
2012
142
8
2013
2012
150
141
5.18 Write-off and Creation of Provisions against Receivables
Write-off and creation of provisions against receivables
5.19 Related Party Transactions
Related parties include Česká spořitelna, a. s. and Investiční společnost České spořitelny, a. s.
31 Dec 2013 31 Dec 2012
Unbilled custody fee – Česká spořitelna
Unbilled management fee – Investiční společnost
Unbilled fee for administration of the local sub-register
Other payables to related parties
169
1,168
–
668
145
1,017
14
261
Total payables to related parties
2,005
1,437
The costs charged to the Fund by Česká spořitelna, a. s. amounted to CZK 3,804 thousand in 2013 (2012: CZK 3,794 thousand), of which
the greatest portion was represented by the custody fee of CZK 1,857 thousand (2012: CZK 1,823 thousand). The costs charged by the
Company amounted to CZK 13,007 thousand (2012: CZK 14,543 thousand).
5.20 Liquidity
The following tables show the residual maturity of assets and liabilities broken down by major classes of assets.
Given that all securities are traded on public markets, sales can be easily be undertaken within three months.
2013
Assets
Less than
3 months
3 month –
1 year
1 – 5 years Over 5 years
Not
speciﬁed
Total
Receivables from banks
Debt securities
Shares and participation certiﬁcates
Derivatives
Other assets
Prepayments
173,577
–
–
6,421
965
–
–
–
–
–
–
–
–
19,974
–
–
–
–
–
–
–
–
–
–
–
–
1,661,578
–
–
–
173,577
19,974
1,661,578
6,421
965
–
Total assets
180,963
–
19,974
–
1,661,578
1,862,515
Other liabilities
Net assets
Available capital
(19,973)
160,990
(1,842,425)
(117)
(117)
–
–
19,974
–
–
–
–
–
1,661,578
–
(20,090)
1,842,425
(1,842,425)
Difference
(1,681,435)
(117)
19,974
–
1,661,578
–
Liabilities
282
Investiční společnost České spořitelny, a. s., VYVÁŽENÝ MIX FF – otevřený podílový fond, 2013 Annual Report
2012
Assets
Less than
3 months
3 month –
1 year
1 – 5 years
Over
5 years
Not
speciﬁed
Total
Receivables from banks
Debt securities
Shares and participation certiﬁcates
Derivatives
Other assets
Prepayments
150,585
−
−
9,028
729
12
−
56,624
−
−
−
−
−
19,090
−
−
−
−
−
205,119
−
−
−
−
−
−
1,142,473
−
9
−
150,585
280,833
1,142,473
9,028
738
12
Total assets
160,354
56,624
19,090
205,119
1,142,482
1,583,669
Other liabilities
Net assets
Available capital
(2,169)
158,185
(1,581,432)
(68)
56,556
−
−
19,090
−
−
205,119
−
−
1,142,482
−
(2,237)
1,581,432
(1,581,432)
Difference
(1,423,247)
56,556
19,090
205,119
1,142,482
−
Liabilities
5.21 Off-balance Sheet Assets and Liabilities
The Fund’s off-balance sheet accounts include receivables and payables from ﬁxed term transactions and assets provided into custody and
safekeeping. The item ‘Assets provided into custody, administration and safekeeping’ shows foreign and domestic securities administered
by Česká spořitelna, a. s. (this item does not include participation certiﬁcates of open-ended mutual funds of the Company, which the Fund
maintains in its portfolio).
5.22 Contingent Assets and Liabilities
The Fund has no assets or liabilities that were not disclosed in the balance sheet or off-balance sheet accounts
5.23 Subsequent Events
No signiﬁcant events occurred after the date of the ﬁnancial statements, which would have a material impact on the Fund’s ﬁnancial statements.
283
Investiční společnost České spořitelny, a. s., VYVÁŽENÝ MIX FF – otevřený podílový fond, 2013 Annual Report
Portfolio at 31 December 2013
The detail of the portfolio is not part of the fund’s ﬁnal accounts. Figures are stated in CZK.
ISIN
Name of the security
IT0004600364
US9284973040
TELECOM ITALIA MEDIA SPA
VITESSE SEMICONDUCTOR CORP NEW
Amount
Market Price
Market Price
Total
Accrued
Interest
21.000
7.000
3.47
58.09
72.85
406.63
0.00
0.00
479.48
0.00
2,200.000
14,000,000.000
7,029.55
0.30
15,465,018.36
4,226,137.65
139,992.65
142,403.37
19,691,156.01
282,396.02
5.000
6.000
34.000
1,831,242.70
2,204,214.23
852,369.00
9,156,213.50
13,225,285.35
28,980,546.00
0.00
0.00
0.00
51,362,044.85
0.00
34,263,577.000
56,508,142.000
100,630,823.000
49,977,905.000
19,538,882.000
48,514,266.000
1.74
1.88
1.35
1.04
1.02
1.40
59,454,158.81
105,952,766.25
135,610,097.07
52,206,919.56
19,986,322.40
67,691,955.35
0.00
0.00
0.00
0.00
0.00
0.00
440,902,219.44
0.00
18,700.000
221,000.000
13,400.000
2,367,944.630
3,058.000
18,500.000
760.000
630.000
48,700.000
22,000.000
20,219.000
256,256.000
42,000.000
4,300.000
2,600.000
2,870.000
110,000.000
612.54
386.59
3,442.68
144.57
4,393.76
3,749.27
36,217.03
7,633.75
4,688.03
181.28
3,371.08
118.48
3,161.55
4,989.42
7,144.13
38,077.14
66.14
11,454,428.06
85,435,544.94
46,131,919.68
342,333,755.16
13,436,115.79
69,361,527.38
27,524,940.52
4,809,261.71
228,307,036.65
3,988,143.50
68,159,886.74
30,361,210.88
132,785,288.16
21,454,485.36
18,574,749.28
109,281,404.00
7,275,194.30
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
1,220,674,892.11
1,681,268,747.04
0.00
282,396.02
Foreign shares
PL0000104543
DE0001135317
POLAND GOVERN.BOND 5.25 10/25/17
BUNDESREPUBLIC 3.75 01/04/17
Foreign government bonds
ESMAR14
FTSEMAR14
DJ50MAR14
S & P 500 E-MINI CMEMAR14
FTSE 100 IDX FUTMAR14
DJ EURO STOXX 50 FUTURESMAR14
Futures
CZ0008472404
CZ0008472271
CZ0008472297
CZ0008473659
CZ0008473188
CZ0008472230
ISCS TOP STOCKS
ISCS SPOROINVEST
ISCS TRENDBOND
ISCS DLUHOPISOVY FOND
ISCS LIKVIDITNI FOND
ISCS CS KORP. DLUHOPIS. OPF
Local participation certiﬁcates - ISČS
LU0129472758
IE0002639775
IE0007292083
AT0000633771
AT0000637491
AT0000805684
AT0000697081
AT0000704341
AT0000658968
AT0000A05SA6
AT0000676846
AT0000659024
LU0188798671
LU0188497985
LU0148538712
LU0389811539
GB0002771169
JPMORGAN F-CHINA FUND-C USD
VANGUARD-US 500 STK IDX- USD INS
VANGUARD-JAPAN STK IND-USD INV
ESPA CESKY FOND ST. DLUHOPISU VT
ESPA BOND USA HIGH YIELD (T) EUR
ESPA BOND EUROPE HIGH YIELD T
XT USA
ESPA STOCK ISTANBUL (T) EUR
ESPA BOND EURO-CORPORATE (VT)
ESPA STOCK RUSSIA-T
ESPA CASH CORPORATE-PLUS-T
ESPA CESKY FOND FIR. DLUH. (VT)
PICTET – USA INDEX – I USD
PICTET EMERG MKTS INDEX I USD
PICTET – PAC (XJPN)-P USD
AMUNDI-INDEX EQ EUROPE-IEC
THREADNEEDLE EUR SEL FUND
Foreign participation certiﬁcates
Total
284
Independent Auditor’s Report
to the Participation certiﬁcate holders of Investiční společnost České spořitelny, a. s.,
DYNAMICKÝ MIX FF – otevřený podílový fond
We have audited the accompanying ﬁnancial statements of Investiční společnost České spořitelny, a. s., DYNAMICKÝ MIX FF – otevřený
podílový fond, which comprise the balance sheet as at 31 December 2013, and the income statement and statement of changes in equity for
the year then ended, and a summary of signiﬁcant accounting policies and other explanatory information. For details of Investiční společnost
České spořitelny, a. s., DYNAMICKÝ MIX FF – otevřený podílový fond, see Note 1 to the ﬁnancial statements.
Management’s Responsibility for the Financial Statements
Management of Investiční společnost České spořitelny, a. s., is responsible for the preparation and fair presentation of these ﬁnancial statements in accordance with accounting principles generally accepted in the Czech Republic, and for such internal control as management determines is necessary to enable the preparation of ﬁnancial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these ﬁnancial statements based on our audit. We conducted our audit in accordance with the
Act on Auditors and International Standards on Auditing as amended by implementation guidance of the Chamber of Auditors of the Czech
Republic. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
whether the ﬁnancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the ﬁnancial statements. The procedures selected depend on the auditor’s judgment, including an assessment of the risks of material misstatement of the ﬁnancial statements,
whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation
and fair presentation of the ﬁnancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the ﬁnancial statements.
We believe that the audit evidence we have obtained is sufﬁcient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the ﬁnancial statements present fairly, in all material respects, the ﬁnancial position of Investiční společnost České
spořitelny, a. s., DYNAMICKÝ MIX FF – otevřený podílový fond, as at 31 December 2013, and its ﬁnancial performance for the year then
ended in accordance with accounting principles generally accepted in the Czech Republic.
31 March 2014
Prague, Czech Republic
Ernst & Young Audit, s.r.o.
License No. 401
Represented by partner
Roman Hauptﬂeisch
Auditor, Licence no. 2009
A member ﬁrm of Ernst & Young Global Limited,
Ernst & Young Audit, s. r. o. with its registred ofﬁce at Na Florenci 2116/15, 110 00 Prague 1 – Nové Město,
has been incorporated in the Commercial Register administered by the Municipal Court in Prague,
Section C, entry No. 88504, under Identiﬁcation No. 26704153.
285
Investiční společnost České spořitelny, a. s., DYNAMICKÝ MIX FF – otevřený podílový fond, 2013 Annual Report
Balance Sheet
at 31 December 2013
(in thousands CZK)
Line
Current
Previous
01
02
05
06
10
11
13
15
16
19
21
44,677
28,846
9,804
6,027
0
0
587,818
4,218
3,952
266
0
49,105
37,639
11,466
0
74,161
74,161
458,039
6,282
6,082
200
11
22
636,713
587,598
29
30
32
33
34
39
40
41
46
47
5,174
4,665
47
462
784
36,204
208,899
309,222
10,370
66,060
350
216
8
126
718
40,582
139,756
326,679
10,370
69,143
Total Liabilities
48
636,713
587,598
of which: Equity
49
630,755
586,530
3 Receivables from banks and credit unions
of which: a/ on demand: aa/ current accounts
ad/ margin accounts
ae/ collaterals
5 Debt securities
of which: a/ issued by the government
6 Shares, unit certiﬁcates and other participation interests
11 Other assets
a/ derivatives
d/ other assets
13 Prepayments and accrued income
Total Assets
4 Other liabilities
a/ derivatives
c/ liabilities from taxes
d/ other liabilities
5 Deferred income and accrued expenses
9 Share premium
10 Reserve funds and other funds from proﬁt
12 Capital funds
14 Retained earnings or accumulated losses from previous periods
15 Proﬁt or loss for the accounting period
286
Investiční společnost České spořitelny, a. s., DYNAMICKÝ MIX FF – otevřený podílový fond, 2013 Annual Report
Off Balance Sheet Accounts
at 31 December 2013
(in thousands CZK)
4 Amounts due from ﬁxed term transactions
b/ with currency instruments
c/ with equity instruments
7 Assets provided into custody, administration and safekeeping
of which: securities
12 Amounts owed from ﬁxed term transactions
b/ with currency instruments
c/ with equity instruments
Line
Current
Previous
52
54
55
60
61
64
66
67
385,734
361,821
23,913
467,623
467,623
386,447
362,550
23,897
291,657
260,742
30,915
407,412
407,412
286,190
255,144
31,046
287
Investiční společnost České spořitelny, a. s., DYNAMICKÝ MIX FF – otevřený podílový fond, 2013 Annual Report
Proﬁt and Loss Account
for the year ended 31 December 2013
(in thousands CZK)
1 Interest income and similar income
of which: a/ interest income from bonds
d/ interest income from collaterals
3 Income from shares and unit certiﬁcates
5 Commission and fee expenses
a/ fees and commissions from securities trading
b/ management fee
c/ custody fee
d/ other ﬁnancial expenses
6 Proﬁt or loss on ﬁnancial operations
a/ proﬁt or loss on transactions with securities
b/ proﬁt or loss on foreign exchange transactions
c/ proﬁt or loss on ﬁxed term transactions and options
9 Administrative expenses
of which: b/ other administrative expenses: ba/ audit
12 Release of provisions and bad debt allowances to receivables and guarantees,
income from receivables written off
Depreciation, creation and utilizing of provisions and bad debt allowances to
13 receivables and guarantees
19 Ordinary proﬁt or loss for the accounting period before tax
23 Income tax
24 Proﬁt or loss for the accounting period after tax
Line
Current
Previous
1
2
5
9
10
11
12
13
14
15
16
17
18
21
22
1,400
1,302
2
312
10,014
48
8,389
675
902
74,637
82,747
1,753
(9,863)
185
185
3,494
3,288
0
54
9,541
23
7,960
655
903
75,439
59,999
(1,693)
17,133
237
237
24
63
5
25
26
30
31
106
66,107
47
66,060
63
69,151
8
69,143
288
Investiční společnost České spořitelny, a. s., DYNAMICKÝ MIX FF – otevřený podílový fond, 2013 Annual Report
Statement of Changes in Equity
for the year ended 31 December 2013
(in thousands CZK)
Line
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Current
Previous
40,582
13,312
(17,690)
0
36,204
48,587
5,081
(13,086)
0
40,582
139,756
69,143
0
208,899
186,988
0
(47,232)
139,756
326,679
55,252
(72,709)
0
0
309,222
397,767
49,040
(120,128)
0
0
326,679
0
0
0
0
0
0
1 Share premium
opening balance
issued unit certiﬁcates
repurchase of unit certiﬁcates
other changes
closing balance
2 Retained earnings
opening balance
transfers to funds
other changes
closing balance
3 Capital funds
opening balance
issued unit certiﬁcates
repurchase of unit certiﬁcates
transfers to funds
other changes
closing balance
4 Gains or losses from revaluation
opening balance
foreign exchange rate differences and gains or losses from revaluation not
included in proﬁt (loss)
closing balance
5 Retained earnings or accumulated losses from previous periods
opening balance
other changes
closing balance
6 Proﬁt (loss) for the current period after taxes
opening balance
proﬁt (loss)
transfers to funds, dividends
closing balance
21
22
23
24
25
26
27
28
29
30
31
10,370
0
10,370
10,370
0
10,370
69,143
66,060
(69,143)
66,060
(47,232)
69,143
47,232
69,143
7 Total
32
630,755
586,530
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Investiční společnost České spořitelny, a. s., DYNAMICKÝ MIX FF – otevřený podílový fond, 2013 Annual Report
Notes to the Financial Statements
for the year ended 31 December 2013
1. Organisation and Description of
Business
Formation and Description of the Business
Investiční společnost České spořitelny, a. s., DYNAMICKÝ MIX
FF – otevřený podílový fond, hereinafter the “Fund” (from 25
March 2002 to 2 May 2005 Investiční společnost České spořitelny,
a. s., Sporomix 5 – otevřený podílový fond and to 25 March 2002
Investiční společnost České spořitelny, a. s. – Všeobecný otevřený
podílový fond) was established upon the transformation of
Spořitelní privatizační – Všeobecný investiční fond, a. s. based on
Resolution of the Securities Commission ref. no. 211/5701/R/2000
dated 26 June 2000.
Pursuant to a concluded contract, Česká spořitelna, a. s. acts as the
depository of the Fund.
The Fund is managed by Investiční společnost České spořitelny, a. s.
(hereinafter the “Company”). In compliance with the Collective
Investment Act No. 189/2004 Coll. (hereinafter the “Act”), the
Company is responsible for the management of the assets of the
Fund, which involves the administration and handling of the assets.
The Fund is a standard fund in compliance with the Act and meets
the requirements of EU legislation.
According to the classiﬁcation binding for the members of the
Capital Market Association (the “AKAT CR”) as at the date of the
approval of this Statute, the Fund can be deﬁned as a fund of funds.
Investment Policy of the Fund
The objective of the investment policy is to provide participation
certiﬁcate holders with a long-term appreciation of participation
certiﬁcates primarily through investments in securities of money
market funds, collective investment bond and equity funds. Credit
and interest rate risks are actively managed.
The equity component’s share in the Fund’s portfolio is actively
managed. The neutral weight of the equity component’s share in
the Fund’s assets amounts to 50 percent.
Finances collected in the Fund are invested predominantly in securities of collective investment funds if such collective investment
funds distribute the risk connected to investments and meet other
obligations set by the Act.
The limits of the Fund are adhered to on the basis of the Act, or
they are regulated in the Fund’s Statute in compliance with the Act.
The Company can use ﬁnancial derivatives to effectively manage
the Fund’s assets. Efﬁcient asset management represents transactions for the purpose of decreasing risk, decreasing costs or achieving sufﬁcient income for the Fund provided that the risk is demonstrably low. The exposure from these transactions must be fully
covered by the Fund’s assets so that liabilities arising from these
transactions are fulﬁlled.
Management Policy
The proﬁt/(loss) is based on the difference between income and
expenses related to the management of the Fund’s assets.
Registered Ofﬁce
Investiční společnost České spořitelny, a. s.
DYNAMICKÝ MIX FF – otevřený podílový fond
Prague 6, Evropská 2690/17
Principal Business
The Company collects funds from individuals and legal entities for
the Fund by issuing participation certiﬁcates with the purpose of
their collective investment on local and foreign ﬁnancial markets.
No restrictions are placed on the number of participation certiﬁcates for issue and the period for which the Fund is established.
The Company reserves the right to temporary halt the issuing of
participation certiﬁcates for no longer than three months in compliance with the Act.
The participation certiﬁcates of the Fund are available both in the
Czech Republic and in other EU member countries.
The generated proﬁt has been fully retained by the Fund, in the reinvestment fund, as a source for further investments, and increases
the participation certiﬁcate value. In the event that the Fund incurs
a loss from the Company’s management of assets, the loss is covered from the reinvestment fund which was created from earnings
brought forward. If the reinvestment fund is not sufﬁcient, the loss
must be covered by a reduction in the Fund’s capital fund.
The Fund’s assets must not be used for the provision of loans, borrowings or gifts, to secure a third party’s obligation or to settle
a payable which is not related to the Fund’s management. This
provision does not affect Sections 26 and 27 of the Collective Investment Act.
When managing the Fund’s assets, contracts for the sale of securities and money market instruments, securities issued by other collective investment funds and ﬁnancial derivatives which are not
owned by the Fund at the moment of concluding the respective
contracts, may not be entered into.
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The Company can accept loans and borrowings for the maximum
of six months when managing the Fund’s assets, to cover temporary needs related to the management of the Fund’s assets or
purchases of participation certiﬁcates. The volume of the received
loans and borrowings is not allowed to exceed 10 percent of the
value of the Fund’s assets.
Change in the Fund’s Statute
Czech National Bank Resolution No. 2012/4572/570, dated 18
May 2012, which came into force on 5 June 2012: The changes to
the Funds statute related mainly to the duty of the asset investment
company to ensure that its statute is in accordance with the amendment to Act 189/2004 Coll., on collective investments (as ensuing
from the changes made by Act 188/2011 Coll.) and Decree No.
193/2011 Coll., on the minimum requisites of the statute and on
the conditions for the use of the name Short-Term Money Market
Fund and Money Market Fund. Investment objectives, the method
of investing and the risk proﬁle of the Fund have not been changed
in the amendments referred to above.
Along with the change made to the statute, information was updated as to the list of funds managed by the Company (Article II
Paragraph 8 of the statute), in particular information on the managing parties of the asset management company (Appendix 1 to the
statute), information added on the performance of the mutual fund
for 2011 (Appendix 2 to the statute), information updated on the
total cost indicators for 2011, and the date on which the statute being signed was updated.
On the date the changes to the statute came into force the simple
statute of the Fund was replaced by a newly processed document
providing required key information for investors. Such key information for investors was processed in accordance with Commission (EU) Regulation No. 583/2012.
As at 1 February 2013, information on Fund`s 2012 performance
was published within the document Key investors information.
(According to the article 23, section 3 of Council Regulation (EC)
no. 583/2010, the performance must be updated within the Key investors information up to 35 days after the previous calendar year
end.)
The updated text of the Funds statute was approved by the Investment company`s board of directors as at 10 April 2013. The
changes in the statute text related to an update of the list of managed funds, update of the information on the length of professional
experience of Investment company management, addition of information on Fund’s performance and the Fund`s benchmark`s
performance, an update of information on total expense ratio for
2012 and update of the date of the signature. These updates were
not subject to preliminary approval from Czech national bank (according to the section 84 (a), subsection 5 of 189/2004 Coll., On
collective investment schemes). The shareholders could access the
updated text of the Statute and Key investors information as of
10 April 2013 on http://www.iscs.cz/, at the distributor’s branches
(Ceska sporitelna, a. s.) and at the Investment company seat.
Legislative change
Act No 240/2013 Coll., On Management Companies and Investment Funds became effective as of 19 August 2013. Rules stated
by this act must be implemented by management companies and
investment funds by 22 July 2014. In 2013, the Fund`s management was subject to the rules of the Act No. 189/2004 Coll., On
collective investment schemes. The new rules will be applied as
of 2014.
2. Basis of Preparation
The ﬁnancial statements have been prepared on the basis of underlying accounting records maintained in accordance with Accounting Act No. 563/1991 Coll., and applicable regulations, decrees and internal standards in compliance with and in the scope
deﬁned in Czech Finance Ministry Regulation No. 501/2002 of
6 November 2002, as subsequently amended, which sets out the
overall framework for the presentation of the ﬁnancial statements,
and guidelines for the structure and minimum requirements for the
content of the ﬁnancial statements of banks and certain ﬁnancial
institutions, and Czech Accounting Standards for Financial Institutions, which establish the accounting principles and policies.
The basis of preparation and the accounting policies have been
consistently applied during both 2013 and 2012.
The Fund is obliged to comply with the regulatory requirements
of the Act.
The ﬁnancial statements are presented in compliance with general
accounting principles, speciﬁcally the accrual principle, the prudence concept and the going concern assumption.
The ﬁnancial statements contain the balance sheet, proﬁt and loss
account, statement of changes in equity, and notes to the ﬁnancial
statements.
The presentation of the ﬁnancial statements requires that the
Company makes estimates which have an impact on the reported
amounts of assets and liabilities as at the date of the ﬁnancial statements as well as expenses and income in the relevant accounting
period. These estimates are based on information available as at
the date of the ﬁnancial statements and may differ from the actual
results.
As a result of continued market volatility since the start of the
global ﬁnancial crisis, the Fund may be exposed to increased risk,
speciﬁcally due to the uncertainty regarding possible asset impairments and future developments on the market. The ﬁnancial
statements have been prepared based on the current best estimates
291
Investiční společnost České spořitelny, a. s., DYNAMICKÝ MIX FF – otevřený podílový fond, 2013 Annual Report
using all relevant and available information as at the date of the
ﬁnancial statements.
These ﬁnancial statements are unconsolidated.
All amounts are stated in thousands of Czech crowns (CZK), unless indicated otherwise.
Explanation Added for Translation into English
These ﬁnancial statements are presented on the basis of accounting
principles and standards generally accepted in the Czech Republic.
Certain accounting practices applied by the Company that conform with generally accepted accounting principles and standards
in the Czech Republic may not conform with generally accepted
accounting principles in other countries.
3. Accounting Policies
Pursuant to the Regulation, securities are valued at the price quoted
on a public market which is adjusted, as appropriate, to reﬂect the
rules set out in the Regulation. If the market value is unavailable,
the Fund uses a value determined by the Company using valuation models based on discounted future cash ﬂows according to
the yield curve calculated using the Reuters and Kondor+ systems.
Securities are measured at cost upon initial recognition using the
weighted average method. The acquisition cost includes direct
transaction costs related to the acquisition of securities.
Realised capital gains or losses are recorded in the proﬁt and loss
account within ‘Proﬁt or loss from ﬁnancial operations’.
Accrued interest relating to assets is included within the total balance of these assets.
Receivables and Payables
Purchases and sales of securities are recognised using trade date
accounting provided that the period between the trade date and the
fulﬁlment of the commitment arising from the contract does not
exceed a period typical for the relevant type of transaction.
The Fund records receivables arising from its transactions with
securities and other operating receivables at their nominal value,
while receivables from positive fair values of derivatives are recorded at the fair value of the derivatives at the balance sheet date.
Pursuant to the prudence principle, provisions are created based on
the aging of receivables.
The transaction recognition date for derivative contracts is:
a) the date upon which the related contract was entered into;
b) the date when fulﬁlment was delivered based on the relevant
contract.
The Fund records payables arising from its transactions with securities and operating payables at their nominal value, while payables from negative fair values of derivatives are recorded at the fair
value of the derivatives at the balance sheet date.
The transaction recognition date can also be the date when money
in circulation is paid or received, the date when foreign currency is
purchased or sold, the date when a payment is made, the date when
ownership is acquired or terminated, when a receivable or payable
arises, changes or ceases to exist, when assets move within an accounting entity, and the date when other matters to be included
in the accounting records occur, or when the documents supporting these other matters are available, or when other matters are
a consequence of internal conditions of the accounting entity and/
or special regulations.
Financial Derivatives and Hedging Transactions
Transaction Recognition Date
Securities
In accordance with the Fund’s strategy, all securities are classiﬁed
as securities at fair value through proﬁt or loss. During the accounting period, securities are re-measured at fair value on a daily
basis pursuant to the Finance Ministry Regulation No. 194/2011
Coll., on more detailed regulation of certain rules in collective investment (the “Decree”), as amended.
The securities of the Fund are accounted for as securities at fair
value through proﬁt or loss. The fair value of the securities is determined in accordance with the International Financial Reporting
Standards with an exception, that an average price between the
most favourable binding offer and demand (MID price) is used
for bonds.
In the normal course of business, the Fund enters into hedging
contracts with ﬁnancial derivatives to hedge against interest rate
and foreign currency exposures associated with its transactions on
ﬁnancial markets. The method of fair value hedges is applied to
hedging derivatives.
The Fund designates certain derivatives as hedges provided that
the following criteria are met:
– the Fund has developed a risk management strategy;
– at the inception of the hedge, the hedging relationship is formally documented, the documentation identiﬁes the hedged
item and the hedging instrument, and it deﬁnes the risk that
is being hedged and the approach to establishing whether the
hedge is effective; and
– the hedge is effective, that is, changes in the fair value or cash
ﬂows of the hedged item are almost fully offset by changes in
the fair value or cash ﬂows of the hedging instrument and the
results are within a range of 80 percent to 125 percent.
Nominal values of derivative ﬁnancial instruments are recognised
in the off-balance sheet accounts. Changes in the fair value of derivatives that are designated and qualify as hedges (see above) are
recorded as income or expense. Changes in the fair value of the
hedging derivatives attributable to the risk hedged are recognised
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Investiční společnost České spořitelny, a. s., DYNAMICKÝ MIX FF – otevřený podílový fond, 2013 Annual Report
in the same income or expense accounts as differences from revaluation of a hedged instrument.
All ﬁnancial derivatives are recorded as assets when the fair value
is positive and as liabilities when the fair value is negative. Fair
values are derived from valuation models.
Derivatives that are not designated as hedging derivatives are
treated as trading derivatives. These derivatives are measured at
fair value on a daily basis and gains and losses on revaluation are
posted to expense and income accounts.
Certain derivatives are embedded in compound ﬁnancial instruments, which comprise the host instrument and the derivative. Pursuant to the applicable regulations, the Fund recognises changes in
assets and liabilities arising from the movements in rates or prices
of securities or changes in exchange rates through expense and income accounts. Given that the assets of the Fund are valued at fair
value and changes of fair values are reported within expenses and
income from derivatives, embedded derivatives are not accounted
for separately.
Income Tax
Under effective tax regulations, the income tax rate applicable to
mutual funds is 5 percent.
Deferred Tax
Deferred tax is provided using the liability method on all temporary differences between the carrying amount of assets and liabilities reported in the balance sheet and their value for tax purposes.
Deferred tax assets are recognised only up to the amount of probable future taxable income against which the deferred tax asset can
be offset.
Foreign Currency Translations
Foreign currencies are translated using the exchange rate promulgated by the Czech National Bank as at the relevant date. As at the
balance sheet date, assets and liabilities denominated in foreign
currencies are translated on the same basis.
Foreign exchange rate gains and losses from the daily translation
of assets and liabilities in foreign currencies are posted to expense
or income accounts.
Equity of the Fund
The selling price of participation certiﬁcates is calculated as a proportion of the Fund’s net assets and the relevant number of participation certiﬁcates. Participation certiﬁcates are sold to investors
using the selling price determined on a daily basis.
Interest Income and Expense and Dividend
Income
Interest income and expense are recognised using the accrual principle.
Dividend income is recognised as at the date when the right to
receive the payment is established (ex-dividend date). Dividend income from domestic securities is presented after withholding tax.
Dividend income from foreign securities is presented gross with
the applicable taxes presented within taxes on foreign dividends
(see note 5.16).
Subsequent Events
The impact of events that occurred between the balance sheet date
and the date of the ﬁnancial statements preparation is recognized in
the ﬁnancial statements provided these events provide additional
evidence about conditions that existed at the date of the balance
sheet.
If material events reﬂecting the facts occurring after the balance
sheet date happened between the balance sheet date and the date
of the ﬁnancial statements preparation the consequences of these
events are disclosed in the notes to the ﬁnancial statements but not
recognized in the ﬁnancial statements.
4. Risk Management
Credit Risk
In accordance with the Statute and the investment strategy, the
Company establishes rules and policies for selecting investment
instruments such that the overall credit risk proﬁle of allocated investments is consistent with the characteristics of the Fund. New
types of instruments are approved on a case by case basis by the
risk management function together with the speciﬁcation of limits
for positions pertaining to these instruments. Speciﬁc emphasis is
placed on an appropriate rating structure and a relatively detailed
diversiﬁcation of portfolios (especially in relation to interest bearing securities).
Market Risk
The Fund uses a wide range of tools to eliminate risk exposures
attached to its portfolios. Signiﬁcant attention is paid to market
risks. Apart from statutory restrictions, the Fund is subject to a set
of internal limits having a direct impact on the FX exposure, interest rate exposure (the modiﬁed duration range of the Fund), equity
allocation on individual markets according to their volatility, portfolio rating structure (see above), and other characteristics of the
Fund. The relevant limits are appropriately applied to correspond
with the type of the Fund.
Share Premium
Share premium is the difference between the nominal value of all
participation certiﬁcates and their carrying amounts as at the date
of their issue or purchase.
Whenever the Fund purchases new types of instruments, these instruments are ﬁrst analysed to assess the potential credit risk, as
well as the market risk that the instruments might bring to or help
eliminate from the portfolio. Subsequently, their appropriateness
293
Investiční společnost České spořitelny, a. s., DYNAMICKÝ MIX FF – otevřený podílový fond, 2013 Annual Report
and, if appropriate, the acceptable proportion of these instruments
in the portfolio is evaluated.
The level of the Fund’s market risk exposure is measured using
the Value at Risk (“VaR”). With effect from 1 August 2006, the
VaR for the Company’s Funds is calculated by the Central Risk
Management Department of Česká spořitelna using the historical
simulation method in the K + KvaR system.
Set out below are relative monthly values of the VaR in percentage
terms for individual types of risks:
31 Dec 2013
Average
VaR
4.55%
0.40%
0.01%
4.42%
4.90%
0.40%
0.19%
5.11%
31 Dec 2012
Average
VaR
4.98%
0.31%
0.30%
5.18%
4.85%
0.46%
0.47%
4.88%
Global VaR
Foreign currency VaR
Interest rate VaR
Equity VaR
Global VaR
Foreign currency VaR
Interest rate VaR
Equity VaR
The average VaR is calculated as average of daily VaR values in
years 2013 and 2012 respectively.
The Fund monitors Value at Risk globally and also broken down to
Foreign Currency VaR, Interest Rate VaR and Equity VaR. Based
on the above values, the Fund identiﬁes critical risk segments. This
identiﬁcation inﬂuences the reinvestment process. The limits set
the maximum acceptable VaR for the Fund.
The Equity VaR also reﬂects the risk related to the holding of mutual funds’ participation certiﬁcates (including funds of money
market and bond funds).
Adherence to all the above limits and their effectiveness is monitored and assessed on an ongoing basis. The limits are reviewed,
if necessary.
The portfolio’s risk of unfavourable development of foreign exchange rates, interest rates, and other market factors is hedged, to
an appropriate extent, by ﬁnancial derivatives. Financial derivatives are traded on the OTC market as this market enables the trading of contracts whose parameters and nature appropriately satisfy
the requirements of a hedge. Portfolios primarily include currency
swaps, currency forwards and interest rate swaps.
Liquidity Risk
Another monitored risk is the liquidity risk. Liquidity risk is a risk
that the Fund will not have enough available resources to meet its obligations arising from ﬁnancial contracts. Liquidity is monitored and
managed based on expected cash ﬂows, with appropriate adjustments
made to the structure of securities and term placements portfolios.
Pursuant to the Act, the Company is obliged to repurchase a participation certiﬁcate without undue delay but not later than 15 business days from the date when the repurchase right is claimed. Given that the Fund holds securities traded on foreign stock exchanges
which can be realised within a few days, the Fund’s inability to
meet its obligations due to lack of liquidity is unlikely.
Pursuant to Section 12 of the Collective Investment Act, the Company can suspend issues and purchases of the Fund’s participation
certiﬁcates for a maximum of three months, if necessary due to the
protection of rights or the participation certiﬁcate holders’ interests
protected by law. Issuing and purchasing participation certiﬁcates
can be suspended particularly at the end or beginning of the calendar year, in the event of natural disasters, upon very strong ﬂuctuations on ﬁnancial markets and upon high requirements for the
sales or purchases of participation certiﬁcates provided they could
endanger the Fund’s assets.
The quantitative information about the residual maturity of assets
and liabilities is given in Note 5.18.
5. Additional Information on the Financial Statements
5.1 Receivables from Banks
Receivables from banks
31 Dec 2013 31 Dec 2012
Current accounts
Margin accounts
Compound margins
28,846
9,804
6,027
37,639
11,466
–
Total
44,677
49,105
Balances on current accounts are repayable on demand.
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Investiční společnost České spořitelny, a. s., DYNAMICKÝ MIX FF – otevřený podílový fond, 2013 Annual Report
5.2 Securities
Individual types of securities by issuer, number of securities, their market value and interest rate are disclosed in the Portfolio attached to
the annual report. All securities held by the Fund are publicly listed on the Prague Stock Exchange or foreign stock exchanges. Participation
certiﬁcates which are not listed on stock exchanges are purchased and administered by the Company.
Shares, participation certiﬁcates and other holdings
31 Dec 2013 31 Dec 2012
Acquisition cost
Market revaluation
513,326
74,492
416,963
41,076
Total
587,818
458,039
Debt securities
31 Dec 2013 31 Dec 2012
Acquisition cost
Market revaluation
Accrued interest income
–
–
–
64,391
9,011
759
Total
–
74,161
Of the aggregate volume of debt securities, debt securities maturing within one year accounted for 0 percent in 2013 (2012: 0 percent).
Debt securities maturing within more than one year with a ﬁxed coupon accounted for 0 percent in 2013 (2012: 100 percent).
5.3 Other Assets
Other assets
31 Dec 2013 31 Dec 2012
Positive fair values of ﬁnancial derivatives
Other receivables
Other
Provisions against receivables
3,952
–
332
(66)
6,082
122
157
(79)
Total
4,218
6,282
The caption ‘Other receivables’ represents receivables arising from foreign dividends. The caption ‘Other’ represents estimated receivable
arising from dividends and an estimated receivable for the return of a portion of the management fee for purchased participation certiﬁcates
of Erste’s fund.
5.4 Prepayments and Accrued Income
Prepayments and accrued income
31 Dec 2013 31 Dec 2012
Prepayments – audit fees
–
11
Total
–
11
5.5 Equity
The Fund has no share capital. The nominal value of one participation certiﬁcate is CZK 1. The total nominal value of all participation
certiﬁcates is posted to ‘Capital funds’.
Share premium arising from the difference between the nominal and selling values of the participation certiﬁcates is recorded separately.
The Fund accounts for share premium upon the sale of participation certiﬁcates as well as upon their repurchase. The selling price of the
participation certiﬁcate is determined as the share of the Fund’s net assets and the number of issued participation certiﬁcates.
The value of a participation certiﬁcate as at the last trading date in 2013 totalled CZK 1.3009 (2012: CZK 1.1676). This is the most recent
announced value of the participation certiﬁcate for the year, for which purchases and repurchases of the participation certiﬁcates of the Fund
were undertaken.
In line with the Fund’s Statute, the proﬁt for 2013 of CZK 66,060 thousand will be transferred to the reinvestment fund within ‘Other funds
from proﬁt’.
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Investiční společnost České spořitelny, a. s., DYNAMICKÝ MIX FF – otevřený podílový fond, 2013 Annual Report
In line with the Fund’s Statute, the proﬁt for 2012 of CZK 69,143 thousand was transferred to the reinvestment fund within ‘Other funds
from proﬁt’.
5.6 Changes in the Capital Fund
Use of fund to Total capital
funds
cover losses,
Contributions
upon Fund’s
transformation or
from statute–barred
dividends
Number of
participation
certiﬁcates
Nominal
value of
participation
certiﬁcates
573,417,198
573,418
(175,651)
397,767
49,040,032
(120,127,802)
49,040
(120,128)
–
–
49,040
(120,128)
Balance at 31 Dec 2012
502,329,428
502,330
(175,651)
326,679
Participation certiﬁcates sold
Participation certiﬁcates purchased
55,251,770
(72,709,246)
55,252
(72,709)
–
–
55,252
(72,709)
Balance at 31 Dec 2013
484,871,952
484,873
(175,651)
309,222
Balance at 31 Dec 2011
Participation certiﬁcates sold
Participation certiﬁcates purchased
5.7 Other Liabilities
Other liabilities
31 Dec 2013 31 Dec 2012
Negative fair values of ﬁnancial derivatives
Payables from participation certiﬁcate holders’ placements
Payable to the state budget
Other liabilities
4,665
30
47
432
216
19
8
107
Total
5,174
350
5.8 Accrued Expenses and Deferred Income
Accrued expenses consist of the unbilled custody fee of CZK 58 thousand related to December 2013 (2012: CZK 54 thousand), the unbilled
management fee of CZK 723 thousand related to December 2013 (2012: CZK 654 thousand), and the unbilled fee for the local sub-register
administration of CZK 0 thousand related to December 2013 (2012: CZK 7 thousand) and the unbilled fee for calculation of net assets value
of CZK 3 thousand related to December 2013 (2012: CZK 3 thousand).
5.9 Financial Derivatives Designated as Hedging Derivatives
Nominal value of the derivatives
31 Dec 2013
31 Dec 2012
Assets
Liabilities
Assets
Currency swaps
13,426
14,261
3,031
Liabilities
3,024
Total
13,426
14,261
3,031
3,024
Open positions of derivatives posted to an off-balance sheet are converted to fair value daily as of 1 January 2011 (up to 31 August 2013
futures were converted monthly; as of 1 September 2013 they are converted on daily basis) and recorded in absolute values.
Fair value of the derivatives
31 Dec 2013
31 Dec 2012
Positive
Negative
Positive
Currency swaps
–
835
7
Negative
–
Total
–
835
7
–
Currency derivatives are due within one year.
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5.10 Financial Derivatives Designated as Trading Derivatives
Nominal value of the derivatives
31 Dec 2013
31 Dec 2012
Assets
Liabilities
Assets
Liabilities
Currency swaps
Currency forwards
Equity indices futures
334,478
13,917
23,913
334,474
13,815
23,897
257,711
–
30,915
252,120
–
31,046
Total
372,308
372,186
288,626
283,166
Open positions of derivatives posted to an off-balance sheet are converted to fair value daily as of 1 January 2011 (up to 31 August 2013
futures were converted monthly; as of 1 September 2013 they are converted on daily basis) and recorded in absolute values.
Fair value of the derivatives
31 Dec 2013
31 Dec 2012
Positive
Negative
Positive
Negative
Currency swaps
Currency forwards
Equity indices futures
3,833
103
16
3,830
–
–
5,731
–
344
139
–
77
Total
3,952
3,830
6,075
216
2013
2012
Currency derivatives are due within one year.
5.11 Income from Shares and Interests
Foreign dividends
312
54
Total received dividends
312
54
2013
2012
Interest on compound margins
Interest on deposits at banks
Interest on debt securities
2
96
1,302
–
206
3,288
Total
1,400
3,494
2013
2012
8,389
675
48
1
82
542
102
–
175
7,960
655
23
2
82
492
141
–
186
10,014
9,541
5.12 Interest Income and Interest Expense
5.13 Fees and Commissions
Management fees
Custody fees
Commissions and fees from securities trading
Fees paid to the central depository
Local sub–register
Administration of securities
Broker’s commission for futures trading
Commission for management of short-term bonds
Other fees and commissions
Total
In compliance with the Statute of the Fund, the management fee paid to the Company by the Fund amounts to 1.70 percent of the average
annual net asset value.
Pursuant to the custody service contract entered into with Česká spořitelna, a. s., the Fund pays a fee equal to 0.11 percent of its average
annual net asset value.
297
Investiční společnost České spořitelny, a. s., DYNAMICKÝ MIX FF – otevřený podílový fond, 2013 Annual Report
If participation certiﬁcates of another mutual fund managed by the Company are purchased and added to the Fund’s assets, the Fund’s aggregate net asset value reduced by the current value of investments in participation certiﬁcates of the other mutual fund managed by the
Company is used as the basis for the calculation of the ﬁxed part of the management fee.
5.14 Proﬁt or Loss from Financial Operations
2013
2012
Proﬁt or loss from securities at fair value through proﬁt or loss
Proﬁt or loss from ﬁxed term transactions
Proﬁt or loss from FX differences
82,747
(9,863)
1,753
59,999
17,133
(1,693)
Total
74,637
75,439
Proﬁt or loss from securities at fair value through proﬁt or loss primarily comprises the proﬁt or loss from the realised sales of securities,
from payable securities and from the daily valuation of securities at fair value.
Proﬁt or loss from derivatives includes proﬁt or loss on the settlement of ﬁxed term transactions with currency and interest rate instruments
and also the revaluation of open derivatives at fair value.
Proﬁt or loss from FX differences represents the value of realised FX proﬁt or loss from foreign currency accounts and from the settlement
of foreign currency receivables and payables and also gains or losses arising from the revaluation of assets, with the exception of securities,
and liabilities in foreign currency at fair value.
5.15 Administrative Expenses
2013
2012
Audit
185
237
Total
185
237
2013
2012
Tax payable – current year
Tax payable – previous year
47
–
8
–
Total income tax
47
8
2013
2012
66,107
107
(376)
65,838
(65,838)
–
–
312
47
–
69,151
63
(59)
69,155
(69,155)
–
–
54
8
–
47
8
5.16 Income Tax
The principal income tax components are as follows:
Current income tax – analysis:
Proﬁt (Loss) before tax
Items to add
Deductible items
Tax base
Tax loss utilisation
Adjusted tax base / loss
Tax (5%) on tax base
Foreign dividends
Tax on foreign dividends
Additionally recorded tax
Total tax
Deferred tax
As at 31 December 2013, the Fund determined a deferred tax asset of CZK 2,556 thousand arising from a tax loss and allowances. The
deferred tax asset was not recorded on the basis that its recovery was uncertain.
298
Investiční společnost České spořitelny, a. s., DYNAMICKÝ MIX FF – otevřený podílový fond, 2013 Annual Report
As at 31 December 2012, the Fund determined a deferred tax asset of CZK 9,768 thousand arising from a tax loss and allowances. The
deferred tax asset was not recorded on the basis that its recovery was uncertain.
5.17 Related Party Transactions
Related parties include Česká spořitelna, a. s. and Investiční společnost České spořitelny, a. s.
31 Dec 2013 31 Dec 2012
Other payables to related parties – Česká spořitelna
Unbilled custody fee – Česká spořitelna
Unbilled management fee for December
Unbilled fee for administration of local sub-register
Unbilled fee for calculation of NAV
148
58
723
–
3
71
54
654
7
3
Total payables to related parties
932
789
The costs charged to the Fund by Česká spořitelna, a. s. amounted to CZK 1,626 thousand in 2013 (2012: CZK 1,578 thousand), of which
the greatest portion was represented by the custody fee of CZK 675 thousand (2012: CZK 655 thousand). The costs charged by the Company
amounted to CZK 8,389 thousand (2012: CZK 7,960 thousand), representing the annual management fee.
5.18 Liquidity
The following tables show the residual maturity of assets and liabilities broken down by major classes of assets.
Given that all securities are traded on public markets, sales can easily be undertaken within three months.
2013
Assets
Less than
3 months
3 month –
1 year
1 – 5 years Over 5 years
Not
speciﬁed
Total
Receivables from banks
Debt securities
Shares and participation certiﬁcates
Other assets
Prepayments
44,677
–
–
4,218
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
587,818
–
–
44,677
–
587,818
4,218
–
Total assets
48,895
–
–
–
587,818
636,713
Other liabilities
Net assets
Available capital
5,891
43,004
(630,755)
(67)
(67)
–
–
–
–
–
–
–
–
587,818
–
(5,958)
630,755
(630,755)
Difference
(587,751)
(67)
–
–
587,818
–
Less than
3 months
3 month –
1 year
1 – 5 years
Over
5 years
Not
speciﬁed
Total
Receivables from banks
Debt securities
Shares and participation certiﬁcates
Other assets
Prepayments
49,105
−
−
6,240
−
−
−
−
−
11
−
−
−
−
−
−
74,161
−
−
−
−
−
458,039
42
−
49,105
74,161
458,039
6,282
11
Total assets
55,345
11
−
74,161
458,081
587,598
Other liabilities
Net assets
Available capital
(1,060)
54,285
(586,530)
(8)
3
−
−
−
−
−
74,161
−
−
458,081
−
(1,068)
586,530
(586,530)
Difference
(532,245)
3
−
74,161
458,081
−
Liabilities
2012
Assets
Liabilities
299
Investiční společnost České spořitelny, a. s., DYNAMICKÝ MIX FF – otevřený podílový fond, 2013 Annual Report
Liquidity risk, to which the Fund is exposed, is low as all assets are immediately convertible into cash before the expected purchases of
participation certiﬁcates from participation certiﬁcate holders can be undertaken.
5.19 Off-balance Sheet Assets and Liabilities
The Fund’s off-balance sheet accounts include receivables and payables from ﬁxed term transactions and assets provided into custody and
safekeeping. The item ‘Assets provided into custody, administration and safekeeping’ shows foreign and domestic securities administered
by Česká spořitelna, a. s. (this item does not include participation certiﬁcates of open-ended mutual funds of the Company, which the Fund
maintains in its portfolio).
5.20 Contingent Assets and Liabilities
The Fund has no assets or liabilities that were not disclosed in the balance sheet or off-balance sheet accounts.
5.21 Subsequent Events
No signiﬁcant events occurred after the date of the ﬁnancial statements, which would have a material impact on the Fund’s ﬁnancial statements.
300
Investiční společnost České spořitelny, a. s., DYNAMICKÝ MIX FF – otevřený podílový fond, 2013 Annual Report
Portfolio at 31 December 2013
The detail of the portfolio is not part of the fund’s ﬁnal accounts. Figures are stated in CZK.
ISIN
Name of the security
US9284973040
VITESSE SEMICONDUCTOR CORP NEW
Amount
Market Price
6
58.09
Foreign shares
DJ50MAR14
FTSEMAR14
ESMAR14
DJ EURO STOXX 50 FUTURESMAR14
FTSE 100 IDX FUTMAR14
S & P 500 E-MINI CMEMAR14
16
3
2
852,369.00
2,204,214.23
1,831,242.70
7,200,000
17,099,466
3,634,375
36,971,983
18,543,702
1.04
1.40
1.88
1.35
1.74
6,800
1,200
597,630
10,900
153,000
6,250
1,720
260
240
12,700
24,000
4,100
18,000
2,550
500
175,000
1,300
3,749.27
4,393.76
144.57
612.54
386.59
3,442.68
38,077.14
36,217.03
7,633.75
4,688.03
181.28
2,015.17
3,161.55
4,989.42
47,459.79
66.14
7,144.13
Futures
CZ0008473659
CZ0008472230
CZ0008472271
CZ0008472297
CZ0008472404
ISCS DLUHOPISOVY FOND
ISCS CS KORP. DLUHOPIS. OPF
ISCS SPOROINVEST
ISCS TRENDBOND
ISCS TOP STOCKS
Local participation certiﬁcates - ISČS
AT0000805684
AT0000637491
AT0000633771
LU0129472758
IE0002639775
IE0007292083
LU0389811539
AT0000697081
AT0000704341
AT0000658968
AT0000A05SA6
AT0000633292
LU0188798671
LU0188497985
LU0389812008
GB0002771169
LU0148538712
ESPA BOND EUROPE HIGH YIELD T
ESPA BOND USA HIGH YIELD (T) EUR
ESPA CESKY FOND ST. DLUHOPISU VT
JPMORGAN F-CHINA FUND-C USD
VANGUARD-US 500 STK IDX- USD INS
VANGUARD-JAPAN STK IND-USD INV
AMUNDI-INDEX EQ EUROPE-IEC
XT USA
ESPA STOCK ISTANBUL (T) EUR
ESPA BOND EURO-CORPORATE (VT)
ESPA STOCK RUSSIA-T
ESPA STOCK JAPAN (VT) CZK
PICTET – USA INDEX – I USD
PICTET EMERG MKTS INDEX I USD
AMUNDI-INDX EQY NTH AM-IEC
THREADNEEDLE EUR SEL FUND
PICTET – PAC (XJPN)-P USD
Foreign participation certiﬁcates
Total
Market Price
Total
Accrued
Interest
348.54
0.00
348.54
0.00
13,637,904.00
6,612,642.68
3,662,485.40
0.00
0.00
0.00
23,913,032.08
0.00
7,521,120.00
23,858,884.91
6,814,453.13
49,823,444.29
32,177,031.71
0.00
0.00
0.00
0.00
0.00
120,194,934.04
0.00
25,495,047.90
5,272,511.10
86,399,369.10
6,676,645.23
59,147,684.96
21,516,753.58
65,492,688.11
9,416,427.02
1,832,099.70
59,537,974.65
4,350,702.00
8,262,197.00
56,907,980.64
12,723,008.76
23,729,892.63
11,574,172.75
9,287,374.64
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
467,622,529.77
587,817,812.35
0.00
0.00
301
Independent Auditor’s Report
to the Participation certiﬁcate holders of Investiční společnost České spořitelny, a. s.,
AKCIOVÝ MIX FF – otevřený podílový fond
We have audited the accompanying ﬁnancial statements of Investiční společnost České spořitelny, a. s., AKCIOVÝ MIX FF – otevřený
podílový fond, which comprise the balance sheet as at 31 December 2013, and the income statement and statement of changes in equity for
the year then ended, and a summary of signiﬁcant accounting policies and other explanatory information. For details of Investiční společnost
České spořitelny, a. s., AKCIOVÝ MIX FF – otevřený podílový fond, see Note 1 to the ﬁnancial statements.
Management’s Responsibility for the Financial Statements
Management of Investiční společnost České spořitelny, a. s., is responsible for the preparation and fair presentation of these ﬁnancial statements in accordance with accounting principles generally accepted in the Czech Republic, and for such internal control as management determines is necessary to enable the preparation of ﬁnancial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these ﬁnancial statements based on our audit. We conducted our audit in accordance with the
Act on Auditors and International Standards on Auditing as amended by implementation guidance of the Chamber of Auditors of the Czech
Republic. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
whether the ﬁnancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the ﬁnancial statements. The procedures selected depend on the auditor’s judgment, including an assessment of the risks of material misstatement of the ﬁnancial statements,
whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation
and fair presentation of the ﬁnancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the ﬁnancial statements.
We believe that the audit evidence we have obtained is sufﬁcient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the ﬁnancial statements present fairly, in all material respects, the ﬁnancial position of Investiční společnost České
spořitelny, a. s., AKCIOVÝ MIX FF – otevřený podílový fond, as at 31 December 2013, and its ﬁnancial performance for the year then
ended in accordance with accounting principles generally accepted in the Czech Republic.
31 March 2014
Prague, Czech Republic
Ernst & Young Audit, s.r.o.
License No. 401
Represented by partner
Roman Hauptﬂeisch
Auditor, Licence no. 2009
A member ﬁrm of Ernst & Young Global Limited,
Ernst & Young Audit, s. r. o. with its registred ofﬁce at Na Florenci 2116/15, 110 00 Prague 1 – Nové Město,
has been incorporated in the Commercial Register administered by the Municipal Court in Prague,
Section C, entry No. 88504, under Identiﬁcation No. 26704153.
302
Investiční společnost České spořitelny, a. s., AKCIOVÝ MIX FF – otevřený podílový fond, 2013 Annual Report
Balance Sheet
at 31 December 2013
(in thousands CZK)
Line
Current
Previous
1
2
5
10
11
13
15
16
19
21
93,380
75,441
17,939
0
0
610,050
5,658
5,486
172
0
71,009
45,424
25,585
29,347
29,347
518,006
9,168
9,009
159
11
22
709,088
627,541
29
30
32
33
34
39
40
41
46
47
9,077
7,805
101
1,171
943
(911,021)
224,239
1,269,413
11,998
104,439
800
356
76
368
851
(900,903)
145,901
1,290,556
11,998
78,338
Total Liabilities
48
709,088
627,541
of which: Equity
49
699,068
625,890
3 Receivables from banks and credit unions
of which: a/ on demand: aa/ current accounts
ad/ margin accounts
5 Debt securities
of which: a/ issued by the government
6 Shares, unit certiﬁcates and other participation interests
11 Other assets
a/ derivatives
d/ other assets
13 Prepayments and accrued income
Total Assets
4 Other liabilities
a/ derivatives
c/ liabilities from taxes
d/ other liabilities
5 Deferred income and accrued expenses
9 Share premium
10 Reserve funds and other funds from proﬁt
12 Capital funds
14 Retained earnings or accumulated losses from previous periods
15 Proﬁt or loss for the accounting period
303
Investiční společnost České spořitelny, a. s., AKCIOVÝ MIX FF – otevřený podílový fond, 2013 Annual Report
Off Balance Sheet Accounts
at 31 December 2013
(in thousands CZK)
4 Amounts due from ﬁxed term transactions
b/ with currency instruments
c/ with equity instruments
6 Receivables written off
7 Assets provided into custody, administration and safekeeping
of which: securities
12 Amounts owed from ﬁxed term transactions
b/ with currency instruments
c/ with equity instruments
Line
Current
Previous
52
54
55
58
60
61
64
66
67
541,780
480,176
61,604
810
529,077
529,077
544,099
482,582
61,517
474,487
379,124
95,363
805
474,527
474,527
467,917
371,942
95,975
304
Investiční společnost České spořitelny, a. s., AKCIOVÝ MIX FF – otevřený podílový fond, 2013 Annual Report
Proﬁt and Loss Account
for the year ended 31 December 2013
(in thousands CZK)
1 Interest income and similar income
of which: a/ interest income from bonds
3 Income from shares and unit certiﬁcates
5 Commission and fee expenses
a/ fees and commissions from securities trading
b/ management fee
c/ custody fee
d/ other ﬁnancial expenses
6 Proﬁt or loss on ﬁnancial operations
a/ proﬁt or loss on transactions with securities
b/ proﬁt or loss on foreign exchange transactions
c/ proﬁt or loss on ﬁxed term transactions and options
9 Administrative expenses
of which: b/ other administrative expenses: ba/ audit
12 Release of provisions and bad debt allowances to receivables and guarantees,
income from receivables written off
Depreciation, creation and utilizing of provisions and bad debt allowances to
13 receivables and guarantees
19 Ordinary proﬁt or loss for the accounting period before tax
23 Income tax
24 Proﬁt or loss for the accounting period after tax
Line
Current
Previous
1
2
9
10
11
12
13
14
15
16
17
18
21
22
730
488
678
12,170
41
10,159
739
1,231
115,504
115,491
1,140
(1,127)
187
187
1,580
963
342
11,362
33
9,455
692
1,182
88,163
57,449
(2,744)
33,458
237
237
24
78
46
25
26
30
31
92
104,541
102
104,439
143
78,389
51
78,338
305
Investiční společnost České spořitelny, a. s., AKCIOVÝ MIX FF – otevřený podílový fond, 2013 Annual Report
Statement of Changes in Equity
for the year ended 31 December 2013
(in thousands CZK)
Line
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Current
Previous
(900,903)
18,904
(29,022)
0
(911,021)
(886,121)
36,681
(51,463)
0
(900,903)
145,901
78,338
0
224,239
225,714
0
(79,813)
145,901
1,290,556
39,730
(60,873)
0
0
1,269,413
1,339,445
135,681
(184,570)
0
0
1,290,556
0
0
0
0
0
0
1 Share premium
opening balance
issued unit certiﬁcates
repurchase of unit certiﬁcates
other changes
closing balance
2 Retained earnings
opening balance
transfers to funds
other changes
closing balance
3 Capital funds
opening balance
issued unit certiﬁcates
repurchase of unit certiﬁcates
transfers to funds
other changes
closing balance
4 Gains or losses from revaluation
opening balance
foreign exchange rate differences and gains or losses from revaluation not
included in proﬁt (loss)
closing balance
5 Retained earnings or accumulated losses from previous periods
opening balance
other changes
closing balance
6 Proﬁt (loss) for the current period after taxes
opening balance
proﬁt (loss)
transfers to funds, dividends
closing balance
21
22
23
24
25
26
27
28
29
30
31
11,998
0
11,998
11,998
0
11,998
78,338
104,439
(78,338)
104,439
(79,812)
78,338
79,812
78,338
7 Total
32
699,068
625,890
306
Investiční společnost České spořitelny, a. s., AKCIOVÝ MIX FF – otevřený podílový fond, 2013 Annual Report
Notes to the Financial Statements
for the year ended 31 December 2013
1. Organisation and Description of
Business
Formation and Description of the Business
Investiční společnost České spořitelny, a. s., AKCIOVÝ MIX FF –
otevřený podílový fond was established upon the transformation of
Spořitelní privatizační – Výnosový investiční fond a. s. to an openended mutual fund under Resolution of Securities Commission
ref. no. 211/14557/R/1999 dated 22 September 1999. Investiční
společnost České spořitelny, a. s. – Výnosový otevřený podílový
fond was formed as at 1 December 1999. The name of the fund
changed to Investiční společnost České spořitelny, a. s. – AKCIOVÝ MIX FF – otevřený podílový fond (hereinafter the “Fund” or
“ISČS, a. s. – Akciový MIX FF”) on 7 February 2007.
Pursuant to a concluded contract, Česká spořitelna, a. s. acts as the
depository of the Fund.
The Fund is managed by Investiční společnost České spořitelny, a. s.
(hereinafter the “Company”). In compliance with the Collective
Investment Act No. 189/2004 Coll. (hereinafter the “Act”), the
Company is responsible for the management of the assets of the
Fund, which involves the administration and handling of the assets.
Investment Policy of the Fund
The objective of the investment policy is to provide participation
certiﬁcate holders with a long-term appreciation of participation
certiﬁcates primarily through investments in securities of money
market funds and collective investment bond and equity funds.
Credit and interest rate risks are actively managed.
The equity component’s share in the Fund’s portfolio and its regional and sector composition are actively managed. The neutral weight of the equity component’s share in the Fund’s assets
amounts to 75 percent. The Fund carries currency exposure arising
from investments in local currencies. With the equity component,
the exposure is actively managed using available hedging instruments.
Finances collected in the Fund are primarily invested in securities
of collective investment funds if such collective investment funds
invest in identical classes of assets as a standard fund under the
Collective Investment Act, spreads the risk connected to investments and repurchases securities issued by the Fund, or ensures
that the exchange rate or prices of these securities on the regulated
market do not signiﬁcantly differ from actual values.
The Fund is a standard fund in compliance with the Act and meets
the requirements of EU legislation.
The portfolio of the Fund may also be expanded by purchasing
shares, bonds and other investment instruments approved for collective investments of a standard fund under the Collective Investment Act.
According to the classiﬁcation binding for the members of the
Capital Market Association (the “AKAT CR”) as at the date of the
approval of this Statute, the Fund can be deﬁned as a fund of funds.
Debt securities are primarily state, corporate, municipality and
other bonds, whose issuers received Standard & Poor’s or Moody’s
rating of long-term indebtedness at least on the investment level.
Registered Ofﬁce
The limits of the Fund are adhered to on the basis of the Act, or
they are regulated in the Fund’s Statute in compliance with the Act.
Investiční společnost České spořitelny, a. s.
AKCIOVÝ MIX FF – otevřený podílový fond
Prague 6, Dejvice, Evropská 2690/17
The Fund uses ﬁnancial derivatives to hedge against currency and
interest rate exposures.
Principal Business
The Company collects funds from individuals and legal entities for
the Fund by issuing participation certiﬁcates with the purpose of
their collective investment on local and foreign ﬁnancial markets.
No restrictions are placed on the number of participation certiﬁcates for issue and the period for which the Fund is established.
The Company reserves the right to temporary halt the issuing of
participation certiﬁcates for no longer than three months in compliance with the Act.
The proﬁt/(loss) is based on the difference between the income and
expenses related to the management of the Fund’s assets.
The generated proﬁt is retained in the reinvestment fund as
a source for further investments and to cover the Fund’s losses. If
the proﬁt is not sufﬁcient, the loss must be covered by a reduction
in the capital fund.
Change in the Fund’s Statute
The participation certiﬁcates of the Fund are available both in the
Czech Republic and in other EU member countries.
Czech National Bank Resolution No. 2012/4569/570, dated 18
May 2012, which came into force on 5 June 2012: The changes to
the Funds statute related mainly to the duty of the asset investment
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Investiční společnost České spořitelny, a. s., AKCIOVÝ MIX FF – otevřený podílový fond, 2013 Annual Report
company to ensure that its statute is in accordance with the amendment to Act 189/2004 Coll., on collective investments (as ensuing
from the changes made by Act 188/2011 Coll.) and Decree No.
193/2011 Coll., on the minimum requisites of the statute and on
the conditions for the use of the name Short-Term Money Market
Fund and Money Market Fund. Investment objectives, the method
of investing and the risk proﬁle of the Fund have not been changed
in the amendments referred to above.
Along with the change made to the statute, information was updated as to the list of funds managed by the Company (Article II
Paragraph 8 of the statute), in particular information on the managing parties of the asset management company (Appendix 1 to the
statute), information added on the performance of the mutual fund
for 2011 (Appendix 2 to the statute), information updated on the
total cost indicators for 2011, and the date on which the statute being signed was updated.
On the date the changes to the statute came into force the simple
statute of the Fund was replaced by a newly processed document
providing required key information for investors. Such key information for investors was processed in accordance with Commission (EU) Regulation No. 583/2012.
As at 1 February 2013, information on Fund`s 2012 performance
was published within the document Key investors information.
(According to the article 23, section 3 of Council Regulation (EC)
no. 583/2010, the performance must be updated within the Key investors information up to 35 days after the previous calendar year
end.)
The updated text of the Funds statute was approved by the Investment company`s board of directors as at 10 April 2013. The
changes in the statute text related to an update of the list of managed funds, update of the information on the length of professional
experience of Investment company management, addition of information on Fund’s performance and the Fund`s benchmark`s
performance, an update of information on total expense ratio for
2012 and update of the date of the signature. These updates were
not subject to preliminary approval from Czech national bank (according to the section 84 (a), subsection 5 of 189/2004 Coll. Act on
collective investment. The shareholders could access the updated
text of the Statute and Key investors information as of 10 April
2013 on http://www.iscs.cz/, at the distributor’s branches (Ceska
sporitelna, a. s.) and at the Investment company seat.
Legislative change
Act No 240/2013 Coll., Act on Management Companies and Investment Funds became effective as of 19 August 2013. Rules
stated by this act must be implemented by management companies
and investment funds by 22 July 2014. In 2013, the Fund`s management was subject to the rules of the Act No. 189/2004 Coll.,
On collective investment schemes. The new rules will be applied
as of 2014.
2. Basis of Preparation
The ﬁnancial statements have been prepared on the basis of underlying accounting records maintained in accordance with Accounting Act No. 563/1991 Coll., and applicable regulations, decrees and internal standards in compliance with and in the scope
deﬁned in Czech Finance Ministry Regulation No. 501/2002 of
6 November 2002, as subsequently amended, which sets out the
overall framework for the presentation of the ﬁnancial statements,
and guidelines for the structure and minimum requirements for the
content of the ﬁnancial statements of banks and certain ﬁnancial
institutions, and Czech Accounting Standards for Financial Institutions, which establish the accounting principles and policies.
The basis of preparation and the accounting policies have been applied during both 2013 and 2012.
The Fund is obliged to comply with the regulatory requirements
of the Act.
The ﬁnancial statements are presented in compliance with general
accounting principles, speciﬁcally the accrual principle, the prudence concept and the going concern assumption.
The ﬁnancial statements contain the balance sheet, proﬁt and loss
account, statement of changes in equity, and notes to the ﬁnancial
statements.
The presentation of the ﬁnancial statements requires that the
Company makes estimates which have an impact on the reported
amounts of assets and liabilities as at the date of the ﬁnancial statements as well as expenses and income in the relevant accounting
period. These estimates are based on information available as at
the date of the ﬁnancial statements and may differ from the actual
results.
As a result of continued market volatility since the start of the
global ﬁnancial crisis, the Fund may be exposed to increased risk,
speciﬁcally due to the uncertainty regarding possible asset impairments and future developments on the market. The ﬁnancial
statements have been prepared based on the current best estimates
using all relevant and available information as at the date of the
ﬁnancial statements.
These ﬁnancial statements are unconsolidated.
All amounts are stated in thousands of Czech crowns (CZK), unless indicated otherwise.
Explanation Added for Translation into English
These ﬁnancial statements are presented on the basis of accounting
principles and standards generally accepted in the Czech Republic.
Certain accounting practices applied by the Company that conform with generally accepted accounting principles and standards
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in the Czech Republic may not conform with generally accepted
accounting principles in other countries.
Realised capital gains or losses are recorded in the proﬁt and loss
account within ‘Proﬁt or loss from ﬁnancial operations’.
3. Accounting Policies
Accrued interest relating to assets is included within the total balance of these assets.
Transaction Recognition Date
Receivables and Payables
Purchases and sales of securities are recognised using trade date
accounting provided that the period between the trade date and the
fulﬁlment of the commitment arising from the contract does not
exceed a period typical for the relevant type of transaction.
The Fund records receivables arising from its transactions with
securities and other operating receivables at their nominal value,
while receivables from positive fair values of derivatives are recorded at the fair value of the derivatives at the balance sheet date.
Pursuant to the prudence principle, provisions are created based on
the aging of receivables.
The transaction recognition date for derivative contracts is:
a) the date upon which the related contract was entered into;
b) the date when fulﬁlment was delivered based on the relevant
contract.
The transaction recognition date can also be the date when money
in circulation is paid or received, the date when foreign currency is
purchased or sold, the date when a payment is made, the date when
ownership is acquired or terminated, when a receivable or payable
arises, changes or ceases to exist, when assets move within an accounting entity, and the date when other matters to be included
in the accounting records occur, or when the documents supporting these other matters are available, or when other matters are
a consequence of internal conditions of the accounting entity and/
or special regulations.
Securities
In accordance with the Fund’s strategy, all securities are classiﬁed
as securities at fair value through proﬁt or loss. During the accounting period, securities are re-measured at fair value on a daily
basis pursuant to the Finance Ministry Regulation No. 194/2011
Coll., on more detailed regulation of certain rules in collective investment (the “Decree”), as amended.
The securities of the Fund are accounted for as securities at fair
value through proﬁt or loss. The fair value of the securities is determined in accordance with the International Financial Reporting
Standards with an exception, that an average price between the
most favourable binding offer and demand (MID price) is used
for bonds.
Pursuant to the Regulation, securities are valued at the price quoted
on a public market which is adjusted, as appropriate, to reﬂect the
rules set out in the Regulation. If the market value is unavailable,
the Fund uses a value determined by the Company using valuation models based on discounted future cash ﬂows according to
the yield curve calculated using the Reuters and Kondor+ systems.
Securities are measured at cost upon initial recognition using the
weighted average method. The acquisition cost includes direct
transaction costs related to the acquisition of securities.
The Fund records payables arising from its transactions with securities and operating payables at their nominal value, while payables from negative fair values of derivatives are recorded at the fair
value of the derivatives at the balance sheet date.
Financial Derivatives and Hedging Transactions
In the normal course of business, the Fund enters into hedging contracts with ﬁnancial derivatives to hedge against foreign currency
exposures associated with its transactions on ﬁnancial markets.
The Fund designates certain derivatives as hedges provided that
the following criteria are met:
– the Fund has developed a risk management strategy;
– at the inception of the hedge, the hedging relationship is formally documented, the documentation identiﬁes the hedged
item and the hedging instrument, and it deﬁnes the risk that
is being hedged and the approach to establishing whether the
hedge is effective; and
– the hedge is effective, that is, changes in the fair value or cash
ﬂows of the hedged item are almost fully offset by changes in
the fair value or cash ﬂows of the hedging instrument and the
results are within a range of 80 percent to 125 percent.
Nominal values of derivative ﬁnancial instruments are recognised
in the off-balance sheet accounts. Changes in the fair value of derivatives that are designated and qualify as hedges (see above) are
recorded as income or expense. Changes in the fair value of the
hedging derivatives attributable to the risk hedged are recognised
in the same income or expense accounts as differences from revaluation of a hedged instrument.
All ﬁnancial derivatives are recorded as assets when the fair value
is positive and as liabilities when the fair value is negative. Fair
values are derived from on the valuation models.
Derivatives that are not designated as hedging derivatives are
treated as trading derivatives. These derivatives are measured at
fair value on a daily basis and gains and losses on revaluation are
posted to expense and income accounts.
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Certain derivatives are embedded in compound ﬁnancial instruments, which comprise the host instrument and the derivative. Pursuant to the applicable regulations, the Fund recognises changes in
assets and liabilities arising from the movements in rates or prices
of securities or changes in exchange rates through expense and income accounts. Given that the assets of the Fund are valued at fair
value and changes of fair values are reported within expenses and
income from derivatives, embedded derivatives are not accounted
for separately.
Income Tax
Under effective tax regulations, the income tax rate applicable to
mutual funds is 5 percent.
Deferred Tax
Deferred tax is provided using the liability method on all temporary differences between the carrying amount of assets and liabilities reported in the balance sheet and their value for tax purposes.
Deferred tax assets are recognised only up to the amount of probable future taxable income against which the deferred tax asset can
be offset.
Foreign Currency Translations
Foreign currencies are translated using the exchange rate promulgated by the Czech National Bank as at the relevant date. As at the
balance sheet date, assets and liabilities denominated in foreign
currencies are translated on the same basis.
Foreign exchange rate gains and losses from the daily translation
of assets and liabilities in foreign currencies are posted to expense
or income accounts.
Capital Funds
The selling price of participation certiﬁcates is calculated as a proportion of the Fund’s net assets and the relevant number of participation certiﬁcates. Participation certiﬁcates are sold to investors
using the selling price determined on a daily basis.
Subsequent Events
The impact of events that occurred between the balance sheet date
and the date of the ﬁnancial statements preparation is recognized in
the ﬁnancial statements provided these events provide additional
evidence about conditions that existed at the date of the balance
sheet.
If material events reﬂecting the facts occurring after the balance
sheet date happened between the balance sheet date and the date
of the ﬁnancial statements preparation the consequences of these
events are disclosed in the notes to the ﬁnancial statements but not
recognized in the ﬁnancial statements.
4. Risk Management
Credit Risk
In accordance with the Statute and the investment strategy, the
Company establishes rules and policies for selecting investment
instruments such that the overall credit risk proﬁle of allocated investments is consistent with the characteristics of the Fund. New
types of instruments are approved on a case by case basis by the
risk management function together with the speciﬁcation of limits
for positions pertaining to these instruments. Speciﬁc emphasis is
placed on an appropriate rating structure and a relatively detailed
diversiﬁcation of portfolios (especially in relation to interest bearing securities).
Market Risk
The Fund uses a wide range of tools to eliminate risk exposures
attached to its portfolios. Signiﬁcant attention is paid to market
risks. Apart from statutory restrictions, the Fund is subject to a set
of internal limits having a direct impact on the FX exposure, interest rate exposure (the modiﬁed duration range of the Fund), equity
allocation on individual markets according to their volatility, portfolio rating structure (see above), and other characteristics of the
Fund. The relevant limits are appropriately applied to correspond
with the type of the Fund.
Share Premium
Share premium is the difference between the nominal value of all
participation certiﬁcates and their carrying amounts as at the date
of their issue or purchase.
Interest Income and Expense and Dividend
Income
Interest income and expense are recognised using the accrual principle.
Dividend income is recognised as at the date when the right to
receive the payment is established (ex-dividend date). Dividend income from domestic securities is presented after withholding tax.
Dividend income from foreign securities is presented gross with
the applicable taxes presented within taxes on foreign dividends
(see note 5.16).
Whenever the Fund purchases new types of instruments, these instruments are ﬁrst analysed to assess the potential credit risk, as
well as the market risk that the instruments might bring to or help
eliminate from the portfolio. Subsequently, their appropriateness
and, if appropriate, the acceptable proportion of these instruments
in the portfolio is evaluated.
The level of the Fund’s market risk exposure is measured using
the Value at Risk (“VaR”). With effect from 1 August 2006, the
VaR for the Company’s Funds is calculated by the Central Risk
Management Department of Česká spořitelna using the historical
simulation method in the K + KvaR system.
Set out below are relative monthly values of the VaR in percentage
terms for individual types of risks:
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31 Dec 2013
Average
VaR
6.86%
0.68%
0.01%
6.88%
6.78%
0.78%
0.07%
7.01%
Global VaR
Foreign currency VaR
Interest rate VaR
Equity VaR
31 Dec 2012
Average
VaR
7.11%
0.93%
0.11%
7.30%
6.68%
0.58%
0.14%
6.69%
Global VaR
Foreign currency VaR
Interest rate VaR
Equity VaR
The average VaR is calculated as average of daily VaR values in
years 2013 and 2012 respectively.
The Fund monitors Value at Risk globally and also broken down to
Foreign Currency VaR, Interest Rate VaR and Equity VaR. Based
on the above values, the Fund identiﬁes critical risk segments. This
identiﬁcation inﬂuences the reinvestment process. The limits set
the maximum acceptable VaR for the Fund.
The Equity VaR also reﬂects the risk related to the holding of mutual funds’ participation certiﬁcates (including funds of money
market and bond funds).
Adherence to all the above limits and their effectiveness is monitored and assessed on an ongoing basis. The limits are reviewed,
if necessary.
The portfolio’s risk of unfavourable development of foreign exchange rates, interest rates, and other market factors is hedged, to
an appropriate extent, by ﬁnancial derivatives. Financial deriva-
tives are traded on the OTC market as this market enables the trading of contracts whose parameters and nature appropriately satisfy
the requirements of a hedge. Portfolios primarily include currency
swaps, currency forwards and interest rate swaps.
Liquidity Risk
Another monitored risk is the liquidity risk. Liquidity risk is a risk
that the Fund will not have enough available resources to meet its
obligations arising from ﬁnancial contracts. Liquidity is monitored
and managed based on expected cash ﬂows, with appropriate adjustments made to the structure of securities and term placements
portfolios.
Pursuant to the Act, the Company is obliged to repurchase a participation certiﬁcate without undue delay but not later than 15 business days from the date when the repurchase right is claimed. Given that the Fund holds securities traded on foreign stock exchanges
which can be realised within a few days, the Fund’s inability to
meet its obligations due to lack of liquidity is unlikely.
Pursuant to Section 12 of the Collective Investment Act, the Company can suspend issues and purchases of the Fund’s participation
certiﬁcates for a maximum of three months, if necessary due to the
protection of rights or the participation certiﬁcate holders’ interests
protected by law. Issuing and purchasing participation certiﬁcates
can be suspended particularly at the end or beginning of the calendar year, in the event of natural disasters, upon very strong ﬂuctuations on ﬁnancial markets and upon high requirements for the
sales or purchases of participation certiﬁcates provided they could
endanger the Fund’s assets.
The quantitative information about the residual maturity of assets
and liabilities is given in Note 5.18.
5. Additional Information on the Financial Statements
5.1 Receivables from Banks
Receivables from banks
31 Dec 2013 31 Dec 2012
Current accounts
Margin accounts
75,441
17,939
45,424
25,585
Total
93,380
71,009
Balances on current accounts are repayable on demand.
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5.2 Securities
Individual types of securities by issuer, number of securities, their market value and interest rate are disclosed in the Portfolio attached to
the annual report. All securities held by the Fund are publicly listed on the Prague Stock Exchange or foreign stock exchanges. Participation
certiﬁcates which are not listed on stock exchanges are purchased and administered by the Company.
Shares, participation certiﬁcates and other holdings
31 Dec 2013 31 Dec 2012
Acquisition cost
Market revaluation
504,388
105,662
475,867
42,139
Total
610,050
518,006
Debt securities
31 Dec 2013 31 Dec 2012
Acquisition cost
Market revaluation
Accrued interest income
–
–
25,631
3,472
244
Total
–
29,347
Of the aggregate volume of debt securities, debt securities maturing within more than one year with a variable coupon accounted for 0
percent in 2013 (2012: 0 percent).
Debt securities maturing within more than one year with a ﬁxed coupon accounted for 0 percent in 2013 (2012: 100 percent).
5.3 Other Assets
Other assets
Positive fair values of ﬁnancial derivatives
Other receivables
Other
Provisions against receivables
Total
31 Dec 2013 31 Dec 2012
5,486
1,141
170
(1,139)
9,009
1,208
145
(1,194)
5,658
9,168
Other receivables’ principally relate to receivables from dividends. Receivables arising from dividends unpaid within two years from the
recognition of a claim are provisioned in full.
The caption ‘Other’ represents estimated receivables arising from dividends and an estimated receivable for the return of a portion of the
management fee for purchased participation certiﬁcates of Erste Bank der oesterreichischen Sparkassen AG Group’s fund.
5.4 Prepayments and Accrued Income
Prepayments and accrued income
31 Dec 2013 31 Dec 2012
Prepayments – audit fees
–
11
Total
–
11
5.5 Equity
The Fund has no share capital. The nominal value of one participation certiﬁcate is CZK 1. The total nominal value of all participation
certiﬁcates is posted to ‘Capital funds’.
Share premium arising from the difference between the nominal and selling values of the participation certiﬁcates is recorded separately.
The Fund accounts for share premium upon the sale of participation certiﬁcates as well as upon their repurchase. The selling price of the
participation certiﬁcate is determined as the share of the Fund’s net assets and the number of issued participation certiﬁcates.
The value of a participation certiﬁcate as at the last trading date in 2013 totalled CZK 1.5761 (2012: CZK 1.3469). This is the most recent
announced value of the participation certiﬁcate for the year, for which purchases and repurchases of the participation certiﬁcates of the Fund
were undertaken.
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The proﬁt for 2013 of CZK 104,439 thousand will be transferred to the reinvestment fund within ‘Other funds from proﬁt’.
The proﬁt for 2012 of CZK 78,338 thousand was transferred to the reinvestment fund within ‘Other funds from proﬁt’.
5.6 Changes in the Capital Fund
Number of
Nominal Additions to Total capital
funds
participation
value of capital fund
certiﬁcates participation
certiﬁcates
Balance at 31 Dec 2011
513,576,326
513,576
825,869
1,339,445
135,680,721
(184,570,256)
135,681
(184,570)
–
–
135,681
(184,570)
Balance at 31 Dec 2012
464,686,791
464,687
825,869
1,290,556
Participation certiﬁcates sold
Participation certiﬁcates purchased
39,730,088
(60,873,223)
39,730
(60,873)
–
–
39,730
(60,873)
Balance at 31 Dec 2013
443,543,656
443,544
825,869
1,269,413
Participation certiﬁcates sold
Participation certiﬁcates purchased
Additions to the capital fund relate to contributions that arose upon the transformation of the Fund (refer to ‘Formation and Description of
the Business’).
5.7 Other Liabilities
Other liabilities
31 Dec 2013 31 Dec 2012
Payables from participation certiﬁcate holders’ placements
Negative fair values of ﬁnancial derivatives
Payable to the state budget
Other liabilities
891
7,805
101
280
248
356
76
120
Total
9,077
800
5.8 Accrued Expenses and Deferred Income
Accrued expenses consist of the unbilled custody fee of CZK 64 thousand related to December 2013 (2012: CZK 57 thousand), the unbilled
management fee of CZK 876 thousand related to December 2013 (2012: CZK 784 thousand), and the unbilled fee for the local sub-register
administration of CZK 0 thousand related to December 2013 (2012: CZK 7 thousand) and the unbilled fee for calculation of net assets value
of CZK 3 thousand related to December 2013 (2012: CZK 3 thousand).
5.9 Financial Derivatives Designated as Hedging Derivatives
Nominal value of the derivatives
31 Dec 2013
31 Dec 2012
Assets
Liabilities
Assets
Currency swaps
–
–
4,539
Liabilities
4,532
Total
–
–
4,539
4,532
Open positions of derivatives posted to an off-balance sheet are converted to fair value daily as of 1 January 2011 (up to 31 August 2013
futures were converted monthly; as of 1 September 2013 they are converted on daily basis) and recorded in absolute values.
Fair value of the derivatives
31 Dec 2013
31 Dec 2012
Positive
Negative
Positive
Currency swaps
–
–
7
Negative
–
Total
–
–
7
–
Currency derivatives are due within one year.
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5.10 Financial Derivatives Designated as Trading Derivatives
Nominal value of the derivatives
31 Dec 2013
31 Dec 2012
Assets
Liabilities
Assets
Liabilities
Currency swaps
Equity indices futures
480,176
61,604
482,582
61,517
374,585
95,363
367,410
95,975
Total
541,780
544,099
469,948
463,385
Open positions of derivatives posted to an off-balance sheet are converted to fair value daily as of 1 January 2011 (up to 31 August 2013
futures were converted monthly; as of 1 September 2013 they are converted on daily basis) and recorded in absolute values.
Fair value of the derivatives
31 Dec 2013
31 Dec 2012
Positive
Negative
Positive
Negative
Currency swaps
Equity indices futures
5,399
87
7,805
–
7,454
1,548
279
77
Total
5,486
7,805
9,002
356
2013
2012
Currency and equity derivatives are due within one year.
5.11 Income from Shares and Interests
Foreign dividends
678
342
Total received dividends
678
342
2013
2012
Interest on deposits at banks
Interest on debt securities
242
488
617
963
Total
730
1,580
2013
2012
Management fees
Custody fees
Commissions and fees from securities trading
Expenses of administration of the local sub-register
Administration of securities
Fees paid to the central depository
Other fees and commissions
10,159
739
41
85
728
1
417
9,455
692
33
83
637
1
461
Total
12,170
11,362
5.12 Interest Income
5.13 Fees and Commissions
In compliance with the Statute of the Fund, the management fee paid by the Fund amounted to 1.70 percent of the average annual net asset
value.
Pursuant to the custody service contract entered into with Česká spořitelna, a. s., the Fund pays a fee equal to 0.11 percent of its average
annual net asset value.
If participation certiﬁcates of another mutual fund managed by the Company are purchased and added to the Fund’s assets, the Fund’s aggregate net asset value reduced by the current value of investments in participation certiﬁcates of the other mutual fund managed by the
Company is used as the basis for the calculation of the ﬁxed part of the management fee.
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5.14 Proﬁt or Loss from Financial Operations
2013
2012
Proﬁt or loss from securities at fair value through proﬁt or loss
Proﬁt or loss from ﬁxed term transactions and options
Proﬁt or loss from FX differences
115,491
(1,127)
1,140
57,449
33,458
(2,744)
Total
115,504
88,163
Proﬁt or loss from securities at fair value through proﬁt or loss primarily comprises the proﬁt or loss from the realised sales of securities,
from payable securities and from the daily valuation of securities at fair value.
Proﬁt or loss from derivatives includes proﬁt or loss on the settlement of ﬁxed term transactions with ﬁnancial instruments and also the
revaluation of open derivatives at fair value.
Proﬁt or loss from FX differences represents the value of realised FX proﬁt or loss from foreign currency accounts and from the settlement
of foreign currency receivables and payables and also gains or losses arising from the revaluation of assets, with the exception of securities,
and liabilities in foreign currency at fair value.
5.15 Administrative Expenses
2013
2012
Audit
187
237
Total
187
237
2013
2012
5.16 Income Tax
The principal income tax components are as follows:
Tax payable – current year
102
51
Total income tax
102
51
2013
2012
104,541
95
(757)
103,879
(103,879)
–
–
678
102
–
78,390
144
(389)
78,145
(78,145)
–
–
342
51
–
102
51
Current income tax – analysis:
Proﬁt (Loss) before tax
Items to add
Deductible items
Tax base
Tax loss utilisation
Adjusted tax base
Tax (5%) on tax base
Foreign dividends
Tax on foreign dividends
Additional tax payments
Total tax
Deferred tax
As at 31 December 2013, the Fund determined a deferred tax asset of CZK 4,296 thousand arising from a tax loss and provisions against
receivables. The deferred tax asset was not recorded on the basis that its recovery was uncertain.
As at 31 December 2012, the Fund determined a deferred tax asset of CZK 14,492 thousand arising from a tax loss and provisions against
receivables. The deferred tax asset was not recorded on the basis that its recovery was uncertain.
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5.17 Related Party Transactions
Related parties include Česká spořitelna, a. s. and Investiční společnost České spořitelny, a. s.
31 Dec 2013 31 Dec 2012
Unbilled custody fee – Česká spořitelna
Unbilled management fee – Investiční společnost
Unbilled fee for administration of the local sub-register
Unbilled fee for calculation of NAV
Other payables to related parties
Total payables to related parties
64
876
–
3
258
57
784
7
3
119
1,201
970
The costs charged to the Fund by Česká spořitelna, a. s. amounted to CZK 1,977 thousand in 2013 (2012: CZK 1,908 thousand), of which
the greatest portion was represented by the custody fee of CZK 739 thousand (2012: CZK 692 thousand). The costs charged by the Company
amounted to CZK 10,159 thousand (2012: CZK 9,455 thousand), which is the annual management fee.
5.18 Liquidity
The following tables show the residual maturity of assets and liabilities broken down by major classes of assets.
Given that all securities are traded on public markets, sales can easily be undertaken within three months.
2013
Assets
Less than
3 months
3 month –
1 year
1 – 5 years Over 5 years
Not
speciﬁed
Total
Receivables from banks
Debt securities
Shares and participation certiﬁcates
Other assets
Prepayments
93,380
–
–
5,656
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
610,050
2
–
93,380
–
610,050
5,658
–
Total assets
99,036
–
–
–
610,052
709,088
Other liabilities
Net assets
Available capital
(9,919)
89,117
(699,068)
(101)
(101)
–
–
–
–
–
–
–
–
610,052
–
(10,020)
699,068
(699,068)
Difference
(609,951)
(101)
–
–
610,052
–
Less than
3 months
3 month –
1 year
1 – 5 years
Over
5 years
Not
speciﬁed
Total
Receivables from banks
Debt securities
Shares and participation certiﬁcates
Other assets
Prepayments
71,009
−
−
9,154
11
−
−
−
−
−
−
−
−
−
−
−
29,347
−
−
−
−
−
518,006
14
−
71,009
29,347
518,006
9,168
11
Total assets
80,174
−
−
29,347
518,020
627,541
Other liabilities
Net assets
Available capital
(1,575)
78,599
(625,890)
(76)
(76)
−
−
−
−
−
29,347
−
−
518,020
−
(1,651)
625,890
(625,890)
Difference
(547,291)
(76)
−
29,347
518,020
−
Liabilities
2012
Assets
Liabilities
Liquidity risk, to which the Fund is exposed, is low as all assets are immediately convertible into cash before the expected purchases of
participation certiﬁcates from participation certiﬁcate holders can be undertaken.
316
Investiční společnost České spořitelny, a. s., AKCIOVÝ MIX FF – otevřený podílový fond, 2013 Annual Report
5.19 Off-balance Sheet Assets and Liabilities
The Fund’s off-balance sheet accounts include receivables and payables from ﬁxed term transactions and assets provided into custody and
safekeeping. The item ‘Assets provided into custody, administration and safekeeping’ shows foreign and domestic securities administered
by Česká spořitelna, a. s. (this item does not include participation certiﬁcates of open-ended mutual funds of the Company, which the Fund
maintains in its portfolio).
5.20 Contingent Assets and Liabilities
The Fund has no assets or liabilities that were not disclosed in the balance sheet or off-balance sheet accounts.
5.21 Subsequent Events
No signiﬁcant events occurred after the date of the ﬁnancial statements, which would have a material impact on the Fund’s ﬁnancial statements.
317
Investiční společnost České spořitelny, a. s., AKCIOVÝ MIX FF – otevřený podílový fond, 2013 Annual Report
Portfolio at 31 December 2013
The detail of the portfolio is not part of the fund’s ﬁnal accounts. Figures are stated in CZK.
ISIN
Name of the security
FR0010313833
CS0005046655
ARKEMA
MICHALOVSKE ELEKTROTECH. ZAVODY
Amount
Market Price
Market Price
Total
Accrued
Interest
140
27,450
2,325.37
0.00
325,551.21
0.00
0.00
0.00
325,551.21
0.00
8
1
4
34
1,831,242.70
9,156,710.85
2,204,214.23
852,369.00
14,649,941.60
9,156,710.85
8,816,856.90
28,980,546.00
0.00
0.00
0.00
0.00
61,604,055.35
0.00
14,389,225
28,472,179
11,000,000
1.40
1.74
1.04
20,077,285.64
49,404,925.00
11,490,600.00
0.00
0.00
0.00
80,972,810.64
0.00
52,820
9,600
258,144
16,000
38,000
7,700
17,400
316,000
7,500
1,500
1,400
500
380
430
2,000
44,000
200
25,000
3,900
2,400
220,000
410,000
129.04
3,749.27
144.57
384.15
253.45
526.00
612.54
386.59
3,442.68
4,924.08
38,077.14
14,777.08
36,217.03
7,633.75
4,688.03
181.28
36,332.91
3,161.55
4,989.42
7,144.13
80.22
66.14
6,815,892.80
35,993,008.80
37,319,878.08
6,146,450.24
9,631,083.28
4,050,179.67
10,658,130.92
122,161,231.68
25,820,104.30
7,386,121.13
53,308,001.95
7,388,538.14
13,762,470.26
3,282,511.96
9,376,059.00
7,976,287.00
7,266,582.85
79,038,862.00
19,458,719.28
17,145,922.42
17,648,523.75
27,116,633.30
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
528,751,192.81
610,049,554.66
0.00
0.00
Foreign shares
ESMAR14
SPX500MAR14
FTSEMAR14
DJ50MAR14
S & P 500 E-MINI CMEMAR14
S&P 500 FUTUREMAR14
FTSE 100 IDX FUTMAR14
DJ EURO STOXX 50 FUTURESMAR14
Futures
CZ0008472230
CZ0008472404
CZ0008473659
ISCS CS KORP. DLUHOPIS. OPF
ISCS TOP STOCKS
ISCS DLUHOPISOVY FOND
Local participation certiﬁcates - ISČS
AT0000674692
AT0000805684
AT0000633771
LU0061324488
LU0011889929
IE0003713199
LU0129472758
IE0002639775
IE0007292083
LU0161332480
LU0389811539
LU0231474593
AT0000697081
AT0000704341
AT0000658968
AT0000A05SA6
AT0000697065
LU0188798671
LU0188497985
LU0148538712
GB0031189888
GB0002771169
ESPA FIDUCIA (VT) CZK
ESPA BOND EUROPE HIGH YIELD T
ESPA CESKY FOND ST. DLUHOPISU VT
FIDELITY FNDS-KOREA FUND A
HENDERSON HOR.-JAPAN.EQUITY FUND
INVESCO KOREAN EQUITY-C
JPMORGAN F-CHINA FUND-C USD
VANGUARD-US 500 STK IDX- USD INS
VANGUARD-JAPAN STK IND-USD INV
FIDELITZ FUNDS JPN ADVANT JPY
AMUNDI-INDEX EQ EUROPE-IEC
ABERDEEN GL-JAPANESE EQTY-I2
XT USA
ESPA STOCK ISTANBUL (T) EUR
ESPA BOND EURO-CORPORATE (VT)
ESPA STOCK RUSSIA-T
XT EUROPA
PICTET – USA INDEX – I USD
PICTET EMERG MKTS INDEX I USD
PICTET – PAC (XJPN)-P USD
NEWTON UK OP-RETAIL-INC
THREADNEEDLE EUR SEL FUND
Foreign participation certiﬁcates
Total
318
Independent Auditor’s Report
to the Participation certiﬁcate holders of Investiční společnost České spořitelny, a. s.,
Smíšený fond – otevřený podílový fond
We have audited the accompanying ﬁnancial statements of Investiční společnost České spořitelny, a. s., Smíšený fond – otevřený podílový
fond, which comprise the balance sheet as at 31 December 2013, and the income statement and statement of changes in equity for the year
then ended, and a summary of signiﬁcant accounting policies and other explanatory information. For details of Investiční společnost České
spořitelny, a. s., Smíšený fond – otevřený podílový fond, see Note 1 to the ﬁnancial statements.
Management’s Responsibility for the Financial Statements
Management of Investiční společnost České spořitelny, a. s., is responsible for the preparation and fair presentation of these ﬁnancial statements in accordance with accounting principles generally accepted in the Czech Republic, and for such internal control as management determines is necessary to enable the preparation of ﬁnancial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these ﬁnancial statements based on our audit. We conducted our audit in accordance with the
Act on Auditors and International Standards on Auditing as amended by implementation guidance of the Chamber of Auditors of the Czech
Republic. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
whether the ﬁnancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the ﬁnancial statements. The procedures selected depend on the auditor’s judgment, including an assessment of the risks of material misstatement of the ﬁnancial statements,
whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation
and fair presentation of the ﬁnancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the ﬁnancial statements.
We believe that the audit evidence we have obtained is sufﬁcient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the ﬁnancial statements present fairly, in all material respects, the ﬁnancial position of Investiční společnost České
spořitelny, a. s., Smíšený fond – otevřený podílový fond, as at 31 December 2013, and its ﬁnancial performance for the year then ended in
accordance with accounting principles generally accepted in the Czech Republic.
31 March 2014
Prague, Czech Republic
Ernst & Young Audit, s.r.o.
License No. 401
Represented by partner
Roman Hauptﬂeisch
Auditor, Licence no. 2009
A member ﬁrm of Ernst & Young Global Limited,
Ernst & Young Audit, s. r. o. with its registred ofﬁce at Na Florenci 2116/15, 110 00 Prague 1 – Nové Město,
has been incorporated in the Commercial Register administered by the Municipal Court in Prague,
Section C, entry No. 88504, under Identiﬁcation No. 26704153.
319
Investiční společnost České spořitelny, a. s., Smíšený fond – otevřený podílový fond, 2013 Annual Report
Balance Sheet
at 31 December 2013
(in thousands CZK)
Line
Current
Previous
1
2
5
10
11
13
15
16
19
21
287,639
287,639
0
1,165,216
1,165,216
876,993
8,493
7,507
986
0
68,088
68,060
28
1,187,364
1,187,364
876,529
14,665
12,380
2,285
12
22
2,338,341
2,146,658
29
30
32
33
34
39
41
47
22,296
21,317
758
221
353
(256,871)
2,375,492
197,071
2,970
1,338
1,516
116
343
(244,275)
2,318,418
69,202
Total Liabilities
48
2,338,341
2,146,658
of which: Equity
49
2,315,692
2,143,345
3 Receivables from banks and credit unions
of which: a/ on demand: aa/ current accounts
ad/ margin accounts
5 Debt securities
of which: a/ issued by the government
6 Shares, unit certiﬁcates and other participation interests
11 Other assets
a/ derivatives
d/ other assets
13 Prepayments and accrued income
Total Assets
4 Other liabilities
a/ derivatives
c/ liabilities from taxes
d/ other liabilities
5 Deferred income and accrued expenses
9 Share premium
12 Capital funds
15 Proﬁt or loss for the accounting period
320
Investiční společnost České spořitelny, a. s., Smíšený fond – otevřený podílový fond, 2013 Annual Report
Off Balance Sheet Accounts
at 31 December 2013
(in thousands CZK)
4 Amounts due from ﬁxed term transactions
b/ with currency instruments
7 Assets provided into custody, administration and safekeeping
of which: securities
12 Amounts owed from ﬁxed term transactions
b/ with currency instruments
Line
Current
Previous
52
54
60
61
64
66
844,379
844,379
1,991,886
1,991,886
858,189
858,189
1,018,068
1,018,068
2,017,409
2,017,409
1,007,026
1,007,026
321
Investiční společnost České spořitelny, a. s., Smíšený fond – otevřený podílový fond, 2013 Annual Report
Proﬁt and Loss Account
for the year ended 31 December 2013
(in thousands CZK)
1 Interest income and similar income
of which: a/ interest income from bonds
d/ interest income from collaterals
2 Interest expenses and similar expenses
b/ interest from received margins
3 Income from shares and unit certiﬁcates
5 Commission and fee expenses
a/ fees and commissions from securities trading
b/ management fee
c/ custody fee
d/ other ﬁnancial expenses
6 Proﬁt or loss on ﬁnancial operations
a/ proﬁt or loss on transactions with securities
b/ proﬁt or loss on foreign exchange transactions
c/ proﬁt or loss on ﬁxed term transactions and options
9 Administrative expenses
of which: b/ other administrative expenses: ba/ audit
12 Release of provisions and bad debt allowances to receivables and guarantees,
income from receivables written off
Depreciation, creation and utilizing of provisions and bad debt allowances to
13 receivables and guarantees
19 Ordinary proﬁt or loss for the accounting period before tax
23 Income tax
24 Proﬁt or loss for the accounting period after tax
Line
Current
Previous
1
2
5
6
8
9
10
11
12
13
14
15
16
17
18
21
22
40,699
40,524
1
1
1
17,998
6,693
1,170
2,616
1,336
1,571
148,745
198,550
(1,159)
(48,646)
239
239
31,464
30,189
0
0
0
23,173
7,182
1,784
2,543
1,285
1,570
25,910
13,934
2,056
9,920
126
126
24
206
0
25
26
30
31
944
199,771
2,700
197,071
627
72,612
3,410
69,202
322
Investiční společnost České spořitelny, a. s., Smíšený fond – otevřený podílový fond, 2013 Annual Report
Statement of Changes in Equity
for the year ended 31 December 2013
(in thousands CZK)
Line
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Current
Previous
(244,275)
(62,525)
49,929
0
(256,871)
(244,269)
(6)
0
0
(244,275)
0
0
0
0
0
0
0
0
2,318,418
357,760
(300,686)
0
0
2,375,492
2,694,743
35
0
(376,360)
0
2,318,418
0
0
0
0
0
0
1 Share premium
opening balance
issued unit certiﬁcates
repurchase of unit certiﬁcates
other changes
closing balance
2 Retained earnings
opening balance
transfers to funds
other changes
closing balance
3 Capital funds
opening balance
issued unit certiﬁcates
repurchase of unit certiﬁcates
transfers to funds
other changes
closing balance
4 Gains or losses from revaluation
opening balance
foreign exchange rate differences and gains or losses from revaluation not
included in proﬁt (loss)
closing balance
5 Retained earnings or accumulated losses from previous periods
opening balance
other changes
closing balance
6 Proﬁt (loss) for the current period after taxes
opening balance
proﬁt (loss)
transfers to funds, dividends
closing balance
21
22
23
24
25
26
27
28
29
30
31
0
0
0
56,159
(56,159)
0
69,202
197,071
(69,202)
197,071
(432,519)
69,202
432,519
69,202
7 Total
32
2,315,692
2,143,345
323
Investiční společnost České spořitelny, a. s., Smíšený fond – otevřený podílový fond, 2013 Annual Report
Notes to the Financial Statements
for the year ended 31 December 2013
1. Organisation and Description of
Business
Formation and Description of the Business
Investiční společnost České spořitelny, a. s., Smíšený fond –
otevřený podílový fond (the “Fund” or “ISČS, a. s. – Smíšený fond
OPF”) is an accounting entity without legal entity status, formed
by Investiční společnost České spořitelny, a. s. (the “Company”)
in compliance with the Collective Investment Act No. 189/2004
Coll. (the “Act”).
Following Investiční společnost České spořitelny, a. s.’s request,
the Czech National Bank approved the formation of a fund entitled Investiční společnost České spořitelny, a. s., Smíšený fond –
otevřený podílový fond. The decision came into legal effect on 20
January 2010. The Fund commenced its activities on 8 February
2010.
Pursuant to a concluded contract, Česká spořitelna, a. s. acts as the
depository of the Fund.
The Company collects funds from individuals and legal entities for
the Fund by issuing participation certiﬁcates with the purpose of
their collective investment on local and foreign ﬁnancial markets.
No restrictions are placed on the number of participation certiﬁcates for issue and the period for which the Fund is established.
The Company reserves the right to temporary halt the issuing of
participation certiﬁcates for no longer than three months in compliance with the Act.
The Company is obliged to repurchase a participation certiﬁcate
without undue delay but not later than 15 business days from the
date when the repurchase right is claimed through Česká spořitelna
if the purchase of a participation certiﬁcate is not suspended.
The nominal value of each participation certiﬁcate is the same, i.e.
CZK 1,000.
The participation certiﬁcates of the Fund are available both in the
Czech Republic and in other EU member countries.
Investment Policy of the Fund
The Fund is managed by the Company. In compliance with the
Act, the Company is responsible for the management of the assets
of the Fund, which involves the administration and handling of
the assets.
The Fund is a standard fund in compliance with the Act and meets
the requirements of EU legislation.
According to the classiﬁcation binding for the members of the
Capital Market Association (hereinafter the “AKAT CR”) as at the
date of the approval of this Statute, the Fund can be deﬁned as
a mixed fund.
Registered Ofﬁce
Investiční společnost České spořitelny, a. s.
Smíšený fond – otevřený podílový fond
Prague 6, Evropská 2690/17
Principal Business
The Fund is comprised of assets which are owned by the participation certiﬁcate holders based on their individual share of participation certiﬁcates. The Company is entrusted with the management
of the Fund and the Fund constitutes an independent set of assets,
separated from the management of the Company’s assets and from
the assets of other funds managed by the Company. The Fund is
not a legal entity. The Company manages the Fund under its name
and on the account of the participation certiﬁcate holders.
The objective of the investment policy is long-term over-performing the income from Czech state bonds and foreign shares through
active changes in the weight of the shares of the portfolio, currency composition of the portfolio and modiﬁed duration of a bond
portion of the portfolio. To a minor extent, the instruments with
exposure on corporate bonds can also be included in the Fund’s
portfolio. The Fund is managed with an emphasis on the generated
income. The objective is achieved principally through an active allocation of assets (especially bonds vs shares), while a maximum
portion of shares and investment instruments carrying the equity
risk may not exceed 90 percent of the Fund’s assets. The equity
component’s share in the Fund’s portfolio and its regional and sector composition are actively managed. The neutral weight of the
state bond component of the portfolio amounts to 60 percent of
the Fund’s assets. The bond component of the portfolio is actively
managed in reference to interest rate risk on the Czech and Euro
income curves. The Fund carries currency exposure arising from
investments in local currencies. The currency exposure is actively
managed using available hedging instruments. Due to an emphasis
on using investment opportunities, the Fund achieves a high asset
turnover. These objectives do not constitute limits for mitigation
and spread of the risk associated with investing activities.
The Fund may invest in securities of collective investment funds,
if such a collective investment fund invests in the same types of assets, distributes the risk connected to investments and meets other
obligations as set by the Act.
324
Investiční společnost České spořitelny, a. s., Smíšený fond – otevřený podílový fond, 2013 Annual Report
The Company can use ﬁnancial derivatives to effectively manage
the Fund’s assets.
The Fund’s portfolio can be expanded by purchasing other investment instruments allowed by the Act for collective investment of
a standard fund.
The limits of the Fund are adhered to on the basis of the Act, or
they are regulated in the Fund’s Statute in compliance with the Act.
The Company can use ﬁnancial derivatives to effectively manage
the Fund’s assets. Efﬁcient asset management represents transactions for the purpose of decreasing risk, decreasing costs or achieving sufﬁcient income for the Fund provided that the risk is demonstrably low. The exposure from these transactions must be fully
covered by the Fund’s assets so that liabilities arising from these
transactions are fulﬁlled.
Management Policy
The proﬁt/(loss) is based on the difference between income and
expenses related to the management of the Fund’s assets.
The generated proﬁt is used as source for payment of proﬁt distribution. In the event that the Fund incurs a loss from the Company’s
management of assets, the loss is covered from the reinvestment
fund which was created from earnings brought forward. If the reinvestment fund is not sufﬁcient, the loss is covered by a reduction
in the Fund’s capital fund.
The Fund’s assets must not be used for the provision of loans, borrowings or gifts, to secure a third party’s obligation or to settle
a payable which is not related to the Fund’s management. This
provision does not affect Sections 26 and 27 of the Act.
When managing the Fund’s assets, contracts for the sale of investment securities and money market instruments, securities issued
by other collective investment funds and ﬁnancial derivatives
which are not owned by the Fund at the moment of concluding the
respective contracts, must not be entered into.
The Company can accept loans and borrowings for the maximum
of six months when managing the Fund’s assets, to cover temporary needs related to the management of the Fund’s assets or
purchases of participation certiﬁcates. The volume of the received
loans and borrowings must not exceed 10 percent of the value of
the Fund’s assets.
Payment of Proﬁt Distribution
The proﬁt distribution is paid from the Fund’s total accounting
proﬁt after tax. If a proﬁt amount to be distributed exceeds an
amount corresponding to 4.5 percent of the Fund’s equity as at
31 December of the accounting period preceding the accounting
period for which the proﬁt is to be paid, a proﬁt amount to be distributed will be reduced to a level equal to the 4.5 percent of the
Fund’s equity mentioned above.
The proﬁt distribution is paid once a year. The decisive date for
the payment of proﬁt distribution is the last day of February in
the year following the year for which proﬁt distribution are paid.
The date of the initiation of payment of proﬁt distribution for the
past ﬁnancial year is 31 March of the following year provided that
the auditor approved the Fund’s annual ﬁnancial statements. In the
event that this day is not a business day, the payment initiation date
is moved to the closest following business day.
Each participation certiﬁcate holder has the right to choose the
method of settlement with regard to the proﬁt distribution to be
paid, i.e. either payment to a bank account selected by the participation certiﬁcate holder or transforming the share into other
mutual fund participation certiﬁcates. The proﬁt distribution is not
paid out in cash. The participation certiﬁcate holder’s decision is
indicated in the instruction for the payment of proﬁt distribution.
The bank account number or the participation certiﬁcate holder’s
decision on the method of the payment of proﬁt distribution can
be changed through a new instruction for the payment of proﬁt
distribution issued prior to the decisive date for the payment of
proﬁt distribution.
If the transformation of the proﬁt distribution into other participation certiﬁcates of the Fund has been agreed (a reinvestment of
proﬁt distribution) in the instruction, it is deemed that the reinvested ﬁnances were credited to a current bank account of the Fund
at the date of initiation of proﬁt distribution payment.
Pursuant to the Commercial Code, the right to the payment of proﬁt
distribution is subject to the statute of limitations after a four-year
time limit has elapsed from the maturity date. After the four-year
time limit elapses, unpaid proﬁt distribution will be used for the
payment of the current ﬁnancial year proﬁt distribution.
Change in the Fund’s Statute
Czech National Bank Resolution No. 2012/4586/570, dated 18
May 2012, which came into force on 5 June 2012: The changes to
the Funds statute related mainly to the duty of the asset investment
company to ensure that its statute is in accordance with the amendment to Act 189/2004 Coll., on collective investments (as ensuing
from the changes made by Act 188/2011 Coll.) and Decree No.
193/2011 Coll., on the minimum requisites of the statute and on
the conditions for the use of the name Short-Term Money Market
Fund and Money Market Fund. Investment objectives, the method
of investing and the risk proﬁle of the Fund have not been changed
in the amendments referred to above.
Along with the change made to the statute, information was updated as to the list of funds managed by the Company (Article II
Paragraph 8 of the statute), in particular information on the managing parties of the asset management company (Appendix 1 to the
statute), information added on the performance of the mutual fund
for 2011 (Appendix 2 to the statute), information updated on the
total cost indicators for 2011, and the date on which the statute being signed was updated.
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On the date the changes to the statute came into force the simple
statute of the Fund was replaced by a newly processed document
providing required key information for investors. Such key information for investors was processed in accordance with Commission (EU) Regulation No. 583/2012.
Czech National Bank Resolution No. 2012/8826/570, dated
14 September 2012, which came into force on 2 October 2012:
Changes to the statute involve supplementation of the exemption
under Section 29 Paragraph 1 of Act 189/2004 Coll., on collective
investment in Article III Paragraph 10 of the statute. This change
allows for investment of up to 50 % of the assets in the mutual fund
in investment securities and money market instruments that the
Czech Republic issued or for which it accepted a guarantee.
In light of this fact, Article IV of the statute describing the credit
risk was amended. The information given in Article III Paragraph
1 of the statute on the size of a neutral position of a portfolio element comprising state bonds was changed, namely from the current 60 % to 70 % of the assets of the mutual fund, and the information on the synthetic indicator of the risk proﬁle in Article IV
Paragraph 2 of the statute was updated.
As at 1 February 2013, information on Fund`s 2012 performance
was published within the document Key investors information.
(According to the article 23, section 3 of Council Regulation (EC)
no. 583/2010, the performance must be updated within the Key investors information up to 35 days after the previous calendar year
end.)
The updated text of the Funds statute was approved by the Investment company`s board of directors as at 10 April 2013. The
changes in the statute text related to an update of the list of managed funds, update of the information on the length of professional
experience of Investment company management, addition of information on Fund’s performance and the Fund`s benchmark`s
performance, an update of information on total expense ratio for
2012 and update of the date of the signature. These updates were
not subject to preliminary approval from Czech national bank (according to the section 84 (a), subsection 5 of 189/2004 Coll., On
collective investment schemes). The shareholders could access the
updated text of the Statute and Key investors information as of
10 April 2013 on http://www.iscs.cz/, at the distributor’s branches
(Ceska sporitelna, a. s.) and at the Investment company seat.
Legislative change
Act No 240/2013 Coll., On Management Companies and Investment Funds became effective as of 19 August 2013. Rules stated
by this act must be implemented by management companies and
investment funds by 22 July 2014. In 2013, the Fund`s management was subject to the rules of the Act No. 189/2004 Coll., On
collective investment schemes. The new rules will be applied as
of 2014.
2. Basis of Preparation
The ﬁnancial statements have been prepared on the basis of underlying accounting records maintained in accordance with Accounting Act No. 563/1991 Coll., and applicable regulations, decrees and internal standards in compliance with and in the scope
deﬁned in Czech Finance Ministry Regulation No. 501/2002 of
6 November 2002, as subsequently amended, which sets out the
overall framework for the presentation of the ﬁnancial statements,
and guidelines for the structure and minimum requirements for the
content of the ﬁnancial statements of banks and certain ﬁnancial
institutions, and Czech Accounting Standards for Financial Institutions, which establish the accounting principles and policies.
The basis of preparation and the accounting policies have been
consistently applied during 2013 and 2012.
The Fund is obliged to comply with the regulatory requirements
of the Act.
The ﬁnancial statements are based on the accrual principle, that is,
transactions and other events are recognised in the accounting period in which they occur, regardless of when the related monetary
ﬂow arises. The ﬁnancial statements are presented in compliance
with general accounting principles, speciﬁcally the accrual principle, the prudence concept and the going concern assumption.
The ﬁnancial statements contain the balance sheet, proﬁt and loss
account, statement of changes in equity, and notes to the ﬁnancial
statements.
The presentation of the ﬁnancial statements requires that the
Company makes estimates which have an impact on the reported
amounts of assets and liabilities as at the date of the ﬁnancial statements as well as expenses and income in the relevant accounting
period. These estimates are based on information available as at
the date of the ﬁnancial statements and may differ from the actual
results.
As a result of continued market volatility since the start of the
global ﬁnancial crisis, the Fund may be exposed to increased risk,
speciﬁcally due to the uncertainty regarding possible asset impairments and future developments on the market. The ﬁnancial
statements have been prepared based on the current best estimates
using all relevant and available information as at the date of the
ﬁnancial statements.
These ﬁnancial statements are unconsolidated.
All amounts are stated in thousands of Czech crowns (CZK), unless indicated otherwise.
Explanation Added for Translation into English
These ﬁnancial statements are presented on the basis of accounting
principles and standards generally accepted in the Czech Republic.
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Certain accounting practices applied by the Company that conform with generally accepted accounting principles and standards
in the Czech Republic may not conform with generally accepted
accounting principles in other countries.
Realised capital gains or losses are recorded in the proﬁt and loss
account within ‘Proﬁt or loss from ﬁnancial operations’.
3. Accounting Policies
Receivables and Payables
Accrued interest relating to assets is included within the total balance of these assets.
Purchases and sales of securities are recognised using trade date
accounting provided that the period between the trade date and the
fulﬁlment of the commitment arising from the contract does not
exceed a period typical for the relevant type of transaction.
The Fund records receivables arising from its transactions with
securities and other operating receivables at their nominal value,
while receivables from positive fair values of derivatives are recorded at the fair value of the derivatives at the balance sheet date.
Pursuant to the prudence principle, provisions are created based on
the aging of receivables.
The transaction recognition date for derivative contracts is:
a) the date upon which the related contract was entered into;
b) the date when the fulﬁlment was delivered based on the relevant
contract.
The Fund records payables arising from its transactions with securities and operating payables at their nominal value, while payables from negative fair values of derivatives are recorded at the fair
value of the derivatives at the balance sheet date.
The transaction recognition date can also be the date when money
in circulation is paid or received, the date when foreign currency is
purchased or sold, the date when a payment is made, the date when
ownership is acquired or terminated, when a receivable or payable
arises, changes or ceases to exist, when assets move within an accounting entity, and the date when other matters to be included
in the accounting records occur, or when the documents supporting these other matters are available, or when other matters are
a consequence of internal conditions of the accounting entity and/
or special regulations.
Financial Derivatives and Hedging Transactions
Transaction Recognition Date
Securities
In accordance with the Fund’s strategy, all securities are classiﬁed
as securities at fair value through proﬁt or loss. During the accounting period, securities are re-measured at fair value on a daily
basis pursuant to the Finance Ministry Regulation No. 194/2011
Coll., on more detailed regulation of certain rules in collective investment (the “Decree”), as amended.
The securities of the Fund are accounted for as securities at fair
value through proﬁt or loss. The fair value of the securities is determined in accordance with the International Financial Reporting
Standards with an exception, that an average price between the
most favourable binding offer and demand (MID price) is used
for bonds.
Pursuant to the Regulation, securities are valued at the price quoted
on a public market which is adjusted, as appropriate, to reﬂect the
rules set out in the Regulation. If the market value is unavailable,
the Fund uses a value determined by the Company using valuation models based on discounted future cash ﬂows according to
the yield curve calculated using the Reuters and Kondor+ systems.
Securities are measured at cost upon initial recognition using the
weighted average method. The acquisition cost includes direct
transaction costs related to the acquisition of securities.
In the normal course of business, the Fund enters into hedging
contracts with ﬁnancial derivatives to hedge against interest rate
and foreign currency exposures associated with its transactions on
ﬁnancial markets. The method of fair value hedges is applied to
hedging derivatives.
The Fund designates certain derivatives as hedges provided that
the following criteria are met:
– the Fund has developed a risk management strategy;
– at the inception of the hedge, the hedging relationship is formally documented, the documentation identiﬁes the hedged
item and the hedging instrument, and it deﬁnes the risk that
is being hedged and the approach to establishing whether the
hedge is effective; and
– the hedge is effective, that is, changes in the fair value or cash
ﬂows of the hedged item are almost fully offset by changes in
the fair value or cash ﬂows of the hedging instrument and the
results are within a range of 80 percent to 125 percent.
Nominal values of derivative ﬁnancial instruments are recognised
in the off-balance sheet accounts. Changes in the fair value of derivatives that are designated and qualify as hedges (see above) are
recorded as income or expense. Changes in the fair value of the
hedging derivatives attributable to the risk hedged are recognised
in the same income or expense accounts as differences from revaluation of a hedged instrument.
All ﬁnancial derivatives are recorded as assets when the fair value
is positive and as liabilities when the fair value is negative. Fair
values are derived from valuation models.
Derivatives that are not designated as hedging derivatives are
treated as trading derivatives. These derivatives are measured at
fair value on a daily basis and gains and losses on revaluation are
posted to derivative expense and income accounts.
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Certain derivatives are embedded in compound ﬁnancial instruments, which comprise the host instrument and the derivative. Pursuant to the applicable regulations, the Fund recognises changes in
assets and liabilities arising from the movements in rates or prices
of securities or changes in exchange rates through expense and income accounts. Given that the assets of the Fund are valued at fair
value and changes of fair values are reported within expenses and
income from derivatives, embedded derivatives are not accounted
for separately.
Income Tax
Under effective tax regulations, the income tax rate applicable to
mutual funds is 5 percent.
Deferred Tax
Deferred tax is provided using the liability method on all temporary differences between the carrying amount of assets and liabilities reported in the balance sheet and their value for tax purposes.
Deferred tax assets are recognised only up to the amount of probable future taxable income against which the deferred tax asset can
be offset.
Foreign Currency Translations
Foreign currencies are translated using the exchange rate promulgated by the Czech National Bank as at the relevant date. As at the
balance sheet date, assets and liabilities denominated in foreign
currencies are translated on the same basis.
Foreign exchange rate gains and losses from the daily translation
of assets and liabilities in foreign currencies are posted to expense
or income accounts.
Capital Funds
The selling price of participation certiﬁcates is calculated as a proportion of the Fund’s net assets and the relevant number of participation certiﬁcates. Participation certiﬁcates are sold to investors
using the selling price determined on a daily basis.
Subsequent Events
The impact of events that occurred between the balance sheet date
and the date of the ﬁnancial statements preparation is recognized in
the ﬁnancial statements provided these events provide additional
evidence about conditions that existed at the date of the balance
sheet.
If material events reﬂecting the facts occurring after the balance
sheet date happened between the balance sheet date and the date
of the ﬁnancial statements preparation the consequences of these
events are disclosed in the notes to the ﬁnancial statements but not
recognized in the ﬁnancial statements.
4. Risk Management
Credit Risk
In accordance with the Statute and the investment strategy, the
Company establishes rules and policies for selecting investment
instruments such that the overall credit risk proﬁle of allocated investments is consistent with the characteristics of the Fund. New
types of instruments are approved on a case by case basis by the
risk management function together with the speciﬁcation of limits
for positions pertaining to these instruments. Speciﬁc emphasis is
placed on an appropriate rating structure and a relatively detailed
diversiﬁcation of portfolios (especially in relation to interest bearing securities).
Market Risk
The Fund uses a wide range of tools to eliminate risk exposures
attached to its portfolios. Signiﬁcant attention is paid to market
risks. Apart from statutory restrictions, the Fund is subject to a set
of internal limits having a direct impact on the FX exposure, interest rate exposure (the modiﬁed duration range of the Fund), equity
allocation on individual markets according to their volatility, portfolio rating structure (see above), and other characteristics of the
Fund. The relevant limits are appropriately applied to correspond
with the type of the Fund.
Share Premium
Share premium is the difference between the nominal value of all
participation certiﬁcates and their carrying amounts as at the date
of their issue or purchase.
Interest Income and Expense and Dividend
Income
Interest income and expense are recognised using the accrual principle.
Dividend income is recognised as at the date when the right to
receive the payment is established (ex-dividend date). Dividend income from domestic securities is presented after withholding tax.
Dividend income from foreign securities is presented gross with
the applicable taxes presented within Tax on foreign dividends (see
note 5.14.).
Whenever the Fund purchases new types of instruments, these instruments are ﬁrst analysed to assess the potential credit risk, as
well as the market risk that the instruments might bring to or help
eliminate from the portfolio. Subsequently, their appropriateness
and, if appropriate, the acceptable proportion of these instruments
in the portfolio is evaluated.
The level of the Fund’s market risk exposure is measured using the
Value at Risk (“VaR”).
The VaR for the Company’s Funds is calculated by the Central
Risk Management Department of Česká spořitelna using the historical simulation method in the K + KvaR system.
Set out below are relative monthly values of the VaR in percentage
terms for individual types of risks:
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31 Dec 2013
Average
VaR
3.24%
0.33%
0.98%
3.25%
3.75%
0.39%
0.85%
4.04%
Global VaR
Foreign currency VaR
Interest rate VaR
Equity VaR
31 Dec 2012
Average
VaR
4.22%
0.37%
0.39%
4.51%
6.27%
0.96%
0.52%
6.15%
Global VaR
Foreign currency VaR
Interest rate VaR
Equity VaR
The average VaR is calculated as an average of daily VaR values in
years 2013 and 2012 respectively.
The Fund monitors Value at Risk globally and also broken down to
Foreign Currency VaR, Interest Rate VaR and Equity VaR. Based
on the above values, the Fund identiﬁes critical risk segments. This
identiﬁcation inﬂuences the reinvestment process. The limits set
the maximum acceptable VaR for the Fund.
The Equity VaR also reﬂects the risk related to the holding of mutual funds’ participation certiﬁcates (including funds of money
market and bond funds).
Adherence to all the above limits and their effectiveness is monitored and assessed on an ongoing basis. The limits are reviewed,
if necessary.
The portfolio’s risk of unfavourable development of foreign exchange rates, interest rates, and other market factors is hedged, to
an appropriate extent, by ﬁnancial derivates. Financial derivatives
are traded on the OTC market as this market enables the trading
of contracts whose parameters and nature appropriately satisfy the
requirements of a hedge. Portfolios primarily include currency
swaps, currency forwards and interest rate swaps.
Liquidity Risk
Another monitored risk is the liquidity risk. Liquidity risk is a risk
that the Fund will not have enough available resources to meet its
obligations arising from ﬁnancial contracts. Liquidity is monitored
and managed based on expected cash ﬂows, with appropriate adjustments made to the structure of securities and term placements
portfolios.
Pursuant to the Act, the Company is obliged to repurchase a participation certiﬁcate without undue delay but not later than 15 business days from the date when the repurchase right is claimed. Given that the Fund holds securities traded on foreign stock exchanges
which can be realised within a few days, the Fund’s inability to
meet its obligations due to lack of liquidity is unlikely.
Pursuant to Section 12 of the Collective Investment Act, the Company can suspend issues and purchases of the Fund’s participation
certiﬁcates for a maximum of three months, if necessary due to the
protection of rights or the participation certiﬁcate holder’ interests
protected by law. Issuing and purchasing participation certiﬁcates
can be suspended particularly at the end or beginning of the calendar year, in the event of natural disasters, upon very strong ﬂuctuations on ﬁnancial markets and upon high requirements for the
sales or purchases of participation certiﬁcates provided they could
endanger the Fund’s assets.
The quantitative information about the residual maturity of assets
and liabilities is given in Note 5.16.
5. Additional Information on the Financial Statements
5.1 Receivables from Banks
Receivables from banks
31 Dec 2013 31 Dec 2012
Current accounts
Margin accounts
287,639
–
68,060
28
Total
287,639
68,088
Balances on current accounts are repayable on demand.
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Investiční společnost České spořitelny, a. s., Smíšený fond – otevřený podílový fond, 2013 Annual Report
5.2 Securities
Individual types of securities by issuer, number of securities, their market value and interest rate are disclosed in the Portfolio attached to
the annual report. All securities held by the Fund are publicly listed on the Prague Stock Exchange or foreign stock exchanges. Participation
certiﬁcates which are not listed on stock exchanges are purchased and administered by the Company.
Shares, participation certiﬁcates and other holdings
31 Dec 2013 31 Dec 2012
Acquisition cost
Market revaluation
741,331
135,662
852,688
23,841
Total
876,993
876,529
Debt securities
31 Dec 2013 31 Dec 2012
Acquisition cost
Market revaluation
Accrued interest income
1,159,856
(16,564)
21,924
1,152,218
14,463
20,683
Total
1,165,216
1,187,364
Of the aggregate volume of debt securities, debt securities maturing within one year accounted for 0 percent in 2013 (2012: 20.80 percent).
Of the aggregate volume of debt securities, debt securities maturing within more than one year with a variable coupon accounted for 13.64
percent in 2013 (2012: 18.66 percent).
Debt securities maturing within more than one year with a ﬁxed coupon accounted for 86.36 percent in 2013 (2012: 60.54 percent).
5.3 Other Assets
Other assets
31 Dec 2013 31 Dec 2012
Other receivables
Positive fair values of ﬁnancial derivatives
Other
165
7,507
821
958
12,380
1,327
Total
8,493
14,665
The caption ‘Other’ relates mainly to estimated receivables arising from foreign dividends.
5.4 Equity
The Fund has no share capital. The nominal value of one participation certiﬁcate is CZK 1,000. The total nominal value of all participation
certiﬁcates is posted to ‘Capital funds’.
Share premium arising from the difference between the nominal and selling values of the participation certiﬁcates is recorded separately.
The Fund accounts for share premium upon the sale of participation certiﬁcates as well as upon their repurchase.
The selling price of the participation certiﬁcate is determined as the share of the Fund’s net assets and the number of issued participation
certiﬁcates.
The value of a participation certiﬁcate as at the last trading date in 2013 was CZK 841.5033 (2012: CZK 795.3785). This is the most recent
announced value of the participation certiﬁcate for the year, for which purchases and repurchases of the participation certiﬁcates of the Fund
were undertaken. This value differs insigniﬁcantly from the carrying value of a participation certiﬁcate as at 31 December 2013 because of
the addition of some items during the ﬁnancial statements preparation.
In line with the Fund’s Statute, the part of the proﬁt for 2013 of CZK 100,620 thousand will be transferred to the reinvestment fund within
‘Other funds from proﬁt’, the part of the proﬁt of CZK 96,451 thousand will be used to pay out the withholding tax of CZK 13,341 thousand
and net allocation of the proﬁt to the participation certiﬁcates holders of CZK 83,110 thousand.
In line with the Fund’s Statue, the proﬁt for 2012 of CZK 69,202 CZK was used to pay out the withholding tax of CZK 3,965 thousand and
net allocation of the proﬁt to the participation certiﬁcates holders of CZK 65,237 thousand in the form of the new participation certiﬁcates
issued on 2 April 2013.
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Investiční společnost České spořitelny, a. s., Smíšený fond – otevřený podílový fond, 2013 Annual Report
5.5 Changes in the Capital Fund
Number of
Nominal
participation
value of
certiﬁcates participation
certiﬁcates
Balance at 31 Dec 2011
Participation certiﬁcates sold
Participation certiﬁcates purchased
Balance at 31 Dec 2012
Participation certiﬁcates sold
Capital Fund utilization
Balance at 31 Dec 2013
Other Total capital
changes
funds
2,694,743
2,694,743
–
2,694,743
35
–
35
–
–
(376,360)
35
(376,360)
2,694,778
2,694,778
(376,360)
2,318,418
357,760
(300,686)
357,760
(300,686)
–
–
357,760
(300,686)
2,751,852
2,751,852
(376,360)
2,375,492
5.6 Other Liabilities
Other liabilities
31 Dec 2013 31 Dec 2012
Payable to the state budget
Negative fair values of ﬁnancial derivatives
Other liabilities
758
21,317
221
1,516
1,338
116
Total
22,296
2,970
5.7 Accrued Expenses and Deferred Income
Accrued expenses consist of the unbilled custody fee of CZK 116 thousand related to December 2013 (2012: CZK 108 thousand), the
unbilled management fee of CZK 227 thousand related to December 2013 (2012: CZK 210 thousand), the unbilled fee for calculation of
NAV and of participation certiﬁcate rate of CZK 9 thousand related to December 2013 (2012: CZK 9 thousand), the unbilled fee for Central
register of CZK 3 thousand related to December 2013 (2012: CZK 2 thousand) and the unbilled fee for the local sub-register administration
of CZK 0 thousand related to December 2013 (2012: CZK 16 thousand).
5.8 Financial Derivatives Designated as Trading Derivatives
Nominal value of the derivatives
Currency instruments
31 Dec 2013
31 Dec 2012
Assets
Liabilities
Assets
Currency swaps
844,379
858,189
1,018,068
Liabilities
1,007,026
Total currency instruments
844,379
858,189
1,018,068
1,007,026
Open positions of derivatives posted to an off-balance sheet are converted to fair value daily as of 1 January 2011 (up to 31 August 2013
futures were converted monthly; as of 1 September 2013 they are converted on daily basis) and recorded in absolute values.
Fair value of the derivatives
Currency instruments
31 Dec 2013
31 Dec 2012
Positive
Negative
Positive
Currency swaps
7,507
21,317
12,380
Negative
1,338
Total currency instruments
7,507
21,317
12,380
1,338
2013
2012
Foreign dividends
Foreign dividends – previous period
Domestic dividends
16,979
1,019
–
22,556
178
439
Total
17,998
23,173
Currency derivatives are due within one year.
5.9 Income from Shares and Interests
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5.10 Interest Income
2013
2012
Interest on deposits at banks
Interest on debt securities
175
40,524
1,275
30,189
Total
40,699
31,464
2013
2012
Management fees
Custody fees
Commissions and fees from securities trading
Calculation of NAV and of participation certiﬁcate rate
Other fees and commissions
2,616
1,336
1,170
109
1,462
2,543
1,285
1,784
105
1,465
Total
6,693
7,182
5.11 Fees and Commissions
In compliance with the Statute of the Fund, the management fee paid to the Company by the Fund amounts to 0.12 percent of the average
annual net asset value.
Pursuant to the custody service contract entered into with Česká spořitelna, a. s., the Fund pays a fee equal to 0.06 percent of its average
annual net asset value.
If participation certiﬁcates of another mutual fund managed by the Company are purchased and added to the Fund’s assets, the Fund’s aggregate net asset value reduced by the current value of investments in participation certiﬁcates of the other mutual fund managed by the
Company is used as the basis for the calculation of the ﬁxed part of the management fee.
5.12 Proﬁt or Loss from Financial Operations
2013
2012
Proﬁt or loss from securities at fair value through proﬁt or loss
Proﬁt or loss from ﬁxed term transactions
Proﬁt or loss from FX differences
198,550
(48,646)
(1,159)
13,934
9,920
2,056
Total
148,745
25,910
Proﬁt or loss from securities at fair value through proﬁt or loss primarily comprises the proﬁt or loss from the realised sales of securities,
from payable securities and from the daily valuation of securities at fair value.
Proﬁt or loss from derivatives includes proﬁt or loss on the settlement of ﬁxed term transactions with currency instruments and also the
revaluation of open derivatives at fair value.
Proﬁt or loss from FX differences represents the value of realised FX proﬁt or loss from foreign currency accounts and from the settlement
of foreign currency receivables and payables and also gains or losses arising from the revaluation of assets, with the exception of securities,
and liabilities in foreign currency at fair value.
5.13 Administrative Expenses
2013
2012
Audit
239
126
Total
239
126
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Investiční společnost České spořitelny, a. s., Smíšený fond – otevřený podílový fond, 2013 Annual Report
5.14 Income Tax
The principal income tax components are as follows:
2013
2012
Tax payable – current year
Additionally recorded tax
2,672
28
3,383
27
Total income tax
2,700
3,410
2013
2012
199,771
995
(18,205)
182,561
(182,561)
–
–
17,813
2,672
28
72,612
765
(23,173)
50,204
(50,204)
–
–
22,556
3,383
27
2,700
3,410
Current income tax – analysis:
Proﬁt (Loss) before tax
Items to add
Deductible items
Tax base
Tax loss utilisation
Tax base adjusted
Tax (5%) on tax base
Foreign dividends
Tax on foreign dividends
Additionally recorded tax
Total income tax
Deferred tax
As at 31 December 2013, the Fund determined a deferred tax asset of CZK 11,728 thousand arising from a tax loss and provisions against
receivables. The deferred tax asset was not recorded on the basis that its recovery was uncertain.
As at 31 December 2012, the Fund determined a deferred tax asset of CZK 20,826 thousand arising from provisions against receivables. The
deferred tax asset was not recorded on the basis that its recovery was uncertain.
5.15 Related Party Transactions
Related parties include Česká spořitelna, a. s. and Investiční společnost České spořitelny, a. s.
31 Dec 2013 31 Dec 2012
Unbilled management fee – Investiční společnost
Unbilled custody fee – Česká spořitelna, a. s.
Unbilled fee for administration of the Central depository – Česká spořitelna
Unbilled fee for administration of the local sub-register
Unbilled fee for calculation of NAV and of participation certiﬁcate rate
Other payables to related parties
227
116
3
16
9
193
210
107
2
16
9
116
Total payables to related parties
564
460
The costs charged to the Fund by Česká spořitelna, a. s. amounted to CZK 4,078 thousand in 2013 (2012: CZK 4,639 thousand), of which the
greatest portion is represented by the commissions for administration of securities accounts and central depository of CZK 1,214 thousand
(2012: CZK 1,155 thousand) and the custody fee of CZK 1,336 thousand (2012: CZK 1,285 thousand).
The costs charged by Investiční společnost České spořitelny, a. s., amounted to CZK 2,616 thousand and represent an annual management
fee (2012: CZK 2,543 thousand).
333
Investiční společnost České spořitelny, a. s., Smíšený fond – otevřený podílový fond, 2013 Annual Report
5.16 Liquidity
The following tables show the residual maturity of assets and liabilities broken down by major classes.
2013
Assets
Not
speciﬁed
Total
–
–
510,720
–
–
510,720
–
876,993
–
165
–
877,158
287,639
876,993
1,165,216
8,493
–
2,338,341
–
654,496
–
–
510,720
–
–
877,158
–
(22,649)
2,315,692
(2,315,692)
(786)
654,496
510,720
877,158
–
Less than
3 months
3 months –
1 year
1 – 5 years
Over
5 years
Not
speciﬁed
Total
Receivables from banks
Shares and participation certiﬁcates
Debt securities
Other assets
Prepayments and accrued income
68,088
−
−
13,706
−
−
−
247,008
−
12
−
−
367,336
−
−
−
−
573,020
−
−
−
876,529
−
959
−
68,088
876,529
1,187,364
14,665
12
Total assets
81,794
247,020
367,336
573,020
877,488
2,146,658
Other liabilities
Net assets
Available capital
(1,797)
79,997
(2,143,345)
(1,516)
245,504
−
−
367,336
−
−
573,020
−
−
877,488
−
(3,313)
2,143,345
(2,143,345)
Difference
(2,063,348)
245,504
367,336
573,020
877,488
−
Receivables from banks
Shares and participation certiﬁcates
Debt securities
Other assets
Prepayments and accrued income
Total assets
Less than
3 months
3 months –
1 year
1 – 5 years Over 5 years
287,639
–
–
8,328
–
295,967
–
–
–
–
–
–
–
–
654,496
–
–
654,496
(21,863)
274,104
(2,315,692)
(786)
(786)
–
(2,041,588)
Liabilities
Other liabilities
Net assets
Available capital
Difference
2012
Assets
Liabilities
Liquidity risk, to which the Fund is exposed, is low as all assets are convertible into cash before the repurchases of participation certiﬁcates
from participation certiﬁcate holders are expected.
5.17 Off-balance Sheet Assets and Liabilities
The Fund’s off-balance sheet accounts include receivables and payables from ﬁxed term transactions and assets provided into custody and
safekeeping. The item ‘Assets provided into custody, administration and safekeeping’ shows foreign and domestic securities administered
by Česká spořitelna, a. s. (this item does not include participation certiﬁcates of open-ended mutual funds of the Company, which the Fund
maintains in its portfolio).
5.18 Contingent Assets and Liabilities
The Fund has no assets or liabilities that were not disclosed in the balance sheet or off-balance sheet accounts.
5.19 Subsequent Events
No signiﬁcant events occurred after the date of the ﬁnancial statements, which would have a material impact on the Fund’s ﬁnancial statements.
334
Investiční společnost České spořitelny, a. s., Smíšený fond – otevřený podílový fond, 2013 Annual Report
Portfolio at 31 December 2013
The detail of the portfolio is not part of the fund’s ﬁnal accounts. Figures are stated in CZK.
ISIN
Name of the security
SK4120008400
SK4120008954
SK4120008871
SLOVAKIA GOVT VAR 09/02/15
SLOVAKIA GOVT 3.875 02/08/33
SLOVAKIA GOVT 3.375 11/15/24
Amount Market Price
10,500
1,000,000
500,000
10,280.00
28.98
28.75
10,000
4,000
28,000
15,000
3,000
20,000
5,000
3,000
11,230.00
9,960.00
11,090.00
11,629.50
12,890.50
11,905.00
10,045.50
9,296.50
29,001,396
1.74
Foreign government bonds
CZ0001002851
CZ0001003834
CZ0001001903
CZ0001000822
CZ0001002547
CZ0001002471
CZ0001002331
CZ0001003859
GOVERNMENT BOND 3.85 09/29/21
GOVERNMENT BOND 1.5 10/29/19
GOVERNMENT BOND 4 04/11/17
GOVERNMENT BOND 4.6 08/18/18
GOVERNMENT BOND 5.7 05/25/24
GOVERNMENT BOND 5 04/11/19
GOVERNMENT BOND VAR 10/27/16
GOVERNMENT BOND 2.5 08/25/28
Local government bonds after 1 January 1998
CZ0008472404
ISCS TOP STOCKS
Local participation certiﬁcates - ISČS
US46429B7055
US4642861037
US4642866739
US4642873339
US46429B6719
US78355W1062
DE0005933931
IE0005042456
DE000A0D8Q07
US4642867729
US4642872000
US4642866655
US4642875987
US78462F1030
US4642868487
ISHARES MSCI RUSSIA
ISHARES MSCI AUSTRALIA INDEX
ISHARES MSCI SINGAPORE INDEX
ISHARES S&P GLBL FINL SECTOR
ISHARES MSCI CHINA ETF
RYDEX SP EQUAL WEIGHT ETF
ISHARES DAX DE
ISHARES PLC – IFTSE 100
ISHARES EURO STOXX DE
ISHARES MSCI SOUTH KOREA IND
ISHARES SP 500 INDEX FUND (USD)
ISHARES MSCI PACIFIC EX JPN
ISHARES RUSSELL 1000 VALUE
SPDR TRUST 1
ISHARE MSCI JAPAN INDEX FUND
Foreign participation certiﬁcates
Total
16,000
24,000
30,000
16,000
19,000
55,000
8,000
418,000
123,000
6,000
34,400
19,000
50,500
39,900
314,000
435.68
484.82
262.00
1,117.84
959.29
1,417.45
2,351.69
219.52
862.52
1,286.54
3,693.32
929.65
1,873.42
3,674.22
241.49
Market Price
Total
Accrued
Interest
107,940,000.00
28,984,796.88
14,375,842.19
728,000.00
949,167.98
58,325.09
151,300,639.07
1,735,493.07
112,300,000.00
39,840,000.00
310,520,000.00
174,442,500.00
38,671,500.00
238,100,000.00
50,227,500.00
27,889,500.00
973,194.44
101,666.67
8,057,777.78
2,530,000.00
1,021,250.00
7,194,444.44
50,555.56
260,416.67
991,991,000.00
20,189,305.56
50,323,222.34
0.00
50,323,222.34
0.00
6,970,857.60
11,635,602.72
7,860,119.40
17,885,501.76
18,226,484.92
77,959,612.50
18,813,550.00
91,757,842.66
106,089,498.75
7,719,269.88
127,050,245.84
17,663,285.78
94,607,607.99
146,601,492.11
75,828,885.52
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
826,669,857.43
2,020,284,718.84
0.00
21,924,798.63
335
Independent Auditor’s Report
to the Participation certiﬁcate holders of Investiční společnost České spořitelny, a. s.,
OSOBNÍ PORTFOLIO 4 – otevřený podílový fond
We have audited the accompanying ﬁnancial statements of Investiční společnost České spořitelny, a. s., OSOBNÍ PORTFOLIO 4 – otevřený
podílový fond, which comprise the balance sheet as at 31 December 2013, and the income statement and statement of changes in equity for
the year then ended, and a summary of signiﬁcant accounting policies and other explanatory information. For details of Investiční společnost
České spořitelny, a. s., OSOBNÍ PORTFOLIO 4 – otevřený podílový fond, see Note 1 to the ﬁnancial statements.
Management’s Responsibility for the Financial Statements
Management of Investiční společnost České spořitelny, a. s., is responsible for the preparation and fair presentation of these ﬁnancial statements in accordance with accounting principles generally accepted in the Czech Republic, and for such internal control as management determines is necessary to enable the preparation of ﬁnancial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these ﬁnancial statements based on our audit. We conducted our audit in accordance with the
Act on Auditors and International Standards on Auditing as amended by implementation guidance of the Chamber of Auditors of the Czech
Republic. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
whether the ﬁnancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the ﬁnancial statements. The procedures selected depend on the auditor’s judgment, including an assessment of the risks of material misstatement of the ﬁnancial statements,
whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation
and fair presentation of the ﬁnancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the ﬁnancial statements.
We believe that the audit evidence we have obtained is sufﬁcient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the ﬁnancial statements present fairly, in all material respects, the ﬁnancial position of Investiční společnost České
spořitelny, a. s., OSOBNÍ PORTFOLIO 4 – otevřený podílový fond, as at 31 December 2013, and its ﬁnancial performance for the year then
ended in accordance with accounting principles generally accepted in the Czech Republic.
31 March 2014
Prague, Czech Republic
Ernst & Young Audit, s.r.o.
License No. 401
Represented by partner
Roman Hauptﬂeisch
Auditor, Licence no. 2009
A member ﬁrm of Ernst & Young Global Limited,
Ernst & Young Audit, s. r. o. with its registred ofﬁce at Na Florenci 2116/15, 110 00 Prague 1 – Nové Město,
has been incorporated in the Commercial Register administered by the Municipal Court in Prague,
Section C, entry No. 88504, under Identiﬁcation No. 26704153.
336
Investiční společnost České spořitelny, a. s., OSOBNÍ PORTFOLIO 4 – otevřený podílový fond, 2013 Annual Report
Balance Sheet
at 31 December 2013
(in thousands CZK)
Line
Current
Previous
1
2
5
10
11
12
13
15
16
18
19
21
129,223
113,071
16,152
720,872
554,701
166,171
1,023,662
2,342
374
1,113
855
30
175,868
164,982
10,886
724,978
570,947
154,031
1,065,215
2,038
1,013
0
1,025
42
22
1,876,129
1,968,141
29
30
32
33
34
39
40
41
47
8,844
7,553
0
1,291
750
121,498
81,939
1,656,410
6,688
8,035
2,634
3,193
2,208
861
131,935
0
1,745,371
81,939
Total Liabilities
48
1,876,129
1,968,141
of which: Equity
49
1,866,535
1,959,245
3 Receivables from banks and credit unions
of which: a/ on demand: aa/ current accounts
ad/ margin accounts
5 Debt securities
of which: a/ issued by the government
b/ issued by other entities
6 Shares, unit certiﬁcates and other participation interests
11 Other assets
a/ derivatives
c/ receivables from taxes
d/ other assets
13 Prepayments and accrued income
Total Assets
4 Other liabilities
a/ derivatives
c/ liabilities from taxes
d/ other liabilities
5 Deferred income and accrued expenses
9 Share premium
10 Reserve funds and other funds from proﬁt
12 Capital funds
15 Proﬁt or loss for the accounting period
337
Investiční společnost České spořitelny, a. s., OSOBNÍ PORTFOLIO 4 – otevřený podílový fond, 2013 Annual Report
Off Balance Sheet Accounts
at 31 December 2013
(in thousands CZK)
4 Amounts due from ﬁxed term transactions
a/ with interest instruments
b/ with currency instruments
c/ with equity instruments
7 Assets provided into custody, administration and safekeeping
of which: securities
12 Amounts owed from ﬁxed term transactions
a/ with interest instruments
b/ with currency instruments
c/ with equity instruments
Line
Current
Previous
52
53
54
55
60
61
64
65
66
67
255,317
22,280
233,037
0
1,128,077
1,128,077
262,496
22,966
239,530
0
234,909
22,280
185,569
27,060
1,262,883
1,262,883
237,438
23,195
186,963
27,280
338
Investiční společnost České spořitelny, a. s., OSOBNÍ PORTFOLIO 4 – otevřený podílový fond, 2013 Annual Report
Proﬁt and Loss Account
for the year ended 31 December 2013
(in thousands CZK)
1 Interest income and similar income
of which: a/ interest income from bonds
3 Income from shares and unit certiﬁcates
5 Commission and fee expenses
a/ fees and commissions from securities trading
b/ management fee
c/ custody fee
d/ other ﬁnancial expenses
6 Proﬁt or loss on ﬁnancial operations
a/ proﬁt or loss on transactions with securities
b/ proﬁt or loss on foreign exchange transactions
c/ proﬁt or loss on ﬁxed term transactions and options
9 Administrative expenses
of which: b/ other administrative expenses: ba/ audit
19 Ordinary proﬁt or loss for the accounting period before tax
23 Income tax
24 Proﬁt or loss for the accounting period after tax
Line
Current
Previous
1
2
9
10
11
12
13
14
15
16
17
18
21
22
26
30
31
18,233
18,167
602
11,436
14
8,749
1,179
1,494
(62)
12,222
3,471
(15,755)
233
233
7,104
416
6,688
19,490
18,638
904
14,101
35
10,831
1,450
1,785
79,068
75,757
223
3,088
230
230
85,131
3,192
81,939
339
Investiční společnost České spořitelny, a. s., OSOBNÍ PORTFOLIO 4 – otevřený podílový fond, 2013 Annual Report
Statement of Changes in Equity
for the year ended 31 December 2013
(in thousands CZK)
Line
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16
17
18
19
20
Current
Previous
131,935
45,299
(55,736)
0
121,498
146,024
35,337
(49,426)
0
131,935
0
81,939
0
81,939
9,452
0
(9,452)
0
1,745,371
393,591
(482,552)
0
0
1,656,410
1,925,141
381,821
(549,057)
(12,534)
0
1,745,371
0
0
0
0
0
0
1 Share premium
opening balance
issued unit certiﬁcates
repurchase of unit certiﬁcates
other changes
closing balance
2 Retained earnings
opening balance
transfers to funds
other changes
closing balance
3 Capital funds
opening balance
issued unit certiﬁcates
repurchase of unit certiﬁcates
transfers to funds
other changes
closing balance
4 Gains or losses from revaluation
opening balance
foreign exchange rate differences and gains or losses from revaluation not
included in proﬁt (loss)
closing balance
5 Retained earnings or accumulated losses from previous periods
opening balance
other changes
closing balance
6 Proﬁt (loss) for the current period after taxes
opening balance
proﬁt (loss)
transfers to funds, dividends
closing balance
21
22
23
24
25
26
27
28
29
30
31
0
0
0
0
0
0
81,939
6,688
(81,939)
6,688
(21,985)
81,939
21,985
81,939
7 Total
32
1,866,535
1,959,245
340
Investiční společnost České spořitelny, a. s., OSOBNÍ PORTFOLIO 4 – otevřený podílový fond, 2013 Annual Report
Notes to the Financial Statements
for the year ended 31 December 2013
1. Organisation and Description of
Business
The participation certiﬁcates of the Fund are available both in the
Czech Republic and in other EU member countries.
Formation and Description of the Business
Investment Policy of the Fund
Investiční společnost České spořitelny, a. s., Fond cíleného
výnosu – otevřený podílový fond (hereinafter the “Fund”) is an
accounting unit without legal entity status, formed by Investiční
společnost České spořitelny, a. s. (hereinafter the “Company”) in
compliance with the Collective Investment Act No. 189/2004 Coll.
(hereinafter the “Act”).
The objective of the investment policy is to provide participation
certiﬁcate holders with a long-term appreciation of participation
certiﬁcates primarily through investments in securities of collective investment bond and equity funds. Speciﬁcally, a long-term
aim is to achieve an average annual appreciation which would exceed the level reached by the Czech government bonds. In this
respect, a maximum acceptable loss incurred over one-year period
should be most likely limited to 3 percent. However, the Fund primarily seeks to install a 100 percent protection of invested funds
for every four-year period, always beginning from 1 June.
Investiční společnost České spořitelny, a. s., Fond cíleného výnosu – otevřený podílový fond was formed based upon the Resolution of the Czech National Bank, which came into legal effect on
15 May 2009. The Fund commenced its activities on 1 June 2009.
As from 1 February 2010, the name of the Fund has been changed
to Investiční společnost České spořitelny, a. s., OSOBNÍ PORTFOLIO 4 – otevřený podílový fond.
Pursuant to a concluded contract, Česká spořitelna, a. s. acts as the
depository of the Fund.
The Fund is managed by the Company. In compliance with the
Act, the Company is responsible for the management of the assets
of the Fund, which involves the administration and handling of
the assets.
The Fund is a special fund of funds which collects funds from the
public.
According to the classiﬁcation binding for the members of the
Capital Market Association (hereinafter the “AKAT CR”) as at the
date of the approval of this Statute, the Fund can be deﬁned as the
fund of the funds.
Registered Ofﬁce
Investiční společnost České spořitelny, a. s.
Osobní portfolio 4 – otevřený podílový fond
Prague 6, Dejvice, Evropská 2690/17
Principal Business
The Company collects funds from individuals and legal entities by
issuing participation certiﬁcates with the purpose of their collective investment on local and foreign ﬁnancial markets. No restrictions are placed on the number of participation certiﬁcates for issue
and the period for which the Fund is established. The Company reserves the right to temporary halt the issuing of participation certificates for no longer than three months in compliance with the Act.
Finances collected in the Fund are invested predominantly in securities of collective investment funds.
The following types of assets can be purchased and added to the
Fund’s assets: bank deposits, domestic and foreign debt securities,
domestic and foreign shares, securities of the collective investment
funds, money market instruments, securities with right to acquire
securities and ﬁnancial derivative instruments.
The limits of the Fund are adhered to on the basis of the Act, or
they are regulated in the Fund’s Statute in compliance with the Act.
The Fund uses ﬁnancial derivatives to hedge against currency exposures.
The Company can use ﬁnancial derivatives to effectively manage
the Fund’s assets. Efﬁcient asset management represents transactions for the purpose of decreasing risk, decreasing costs or achieving sufﬁcient income for the Fund provided that the risk is demonstrably low. The exposure from these transactions must be fully
covered by the Fund’s assets so that liabilities arising from these
transactions are fulﬁlled.
The Company can accept loans and borrowings for the maximum
of six months when managing the Fund’s assets, to cover temporary needs related to the management of the Fund’s assets or
purchases of participation certiﬁcates. The volume of the received
loans and borrowings must not exceed 10 percent of the value of
the Fund’s assets.
Change in the Fund’s Statute
Czech National Bank Resolution No. 2012/4577/570, dated 18
May 2012, which came into force on 5 June 2012: The changes to
the Funds statute related mainly to the duty of the asset investment
company to ensure that its statute is in accordance with the amend341
Investiční společnost České spořitelny, a. s., OSOBNÍ PORTFOLIO 4 – otevřený podílový fond, 2013 Annual Report
ment to Act 189/2004 Coll., on collective investments (as ensuing
from the changes made by Act 188/2011 Coll.) and Decree No.
193/2011 Coll., on the minimum requisites of the statute and on
the conditions for the use of the name Short-Term Money Market
Fund and Money Market Fund. ESPA Czech government bond
fund was replaced by ISCS Bond fund in statute for one particular
title of purchased participation certiﬁcates with the limit of 35 percent (see article III Paragraph 10 of the statute). Investment objectives, the method of investing and the risk proﬁle of the Fund have
not been changed in the amendments referred to above.
Along with the change made to the statute, information was updated as to the list of funds managed by the Company (Article II
Paragraph 8 of the statute), in particular information on the managing parties of the asset management company (Appendix 1 to the
statute), information added on the performance of the mutual fund
for 2011 (Appendix 2 to the statute), information updated on the
total cost indicators for 2011, and the date on which the statute being signed was updated.
On the date the changes to the statute came into force the simple
statute of the Fund was replaced by a newly processed document
providing required key information for investors. Such key information for investors was processed in accordance with Government Regulation No. 189/2011 Coll.
As at 1 February 2013, information on Fund`s 2012 performance
was published within the document Key investors information.
(According to the article 23, section 3 of Council Regulation (EC)
no. 583/2010, the performance must be updated within the Key investors information up to 35 days after the previous calendar year
end.)
The updated text of the Funds statute was approved by the Investment company`s board of directors as at 10 April 2013. The
changes in the statute text related to an update of the list of managed funds, update of the information on the length of professional
experience of Investment company management, addition of information on Fund’s performance and the Fund`s benchmark`s
performance, an update of information on total expense ratio for
2012 and update of the date of the signature. These updates were
not subject to preliminary approval from Czech national bank (according to the section 84 (a), subsection 5 of 189/2004 Coll., On
collective investment schemes). The shareholders could access the
updated text of the Statute and Key investors information as of
10 April 2013 on http://www.iscs.cz/, at the distributor’s branches
(Ceska sporitelna, a. s.) and at the Investment company seat.
Legislative change
Act No 240/2013 Coll., On Management Companies and Investment Funds became effective as of 19 August 2013. Rules stated
by this act must be implemented by investment companies and investment funds by 22 July 2014. In 2013, the Fund`s management
was subject to the rules of the Act No. 189/2004 Coll., On collective investment schemes. The new rules will be applied as of 2014.
2. Basis of Preparation
The ﬁnancial statements have been prepared on the basis of underlying accounting records maintained in accordance with Accounting Act No. 563/1991 Coll., and applicable regulations, decrees and internal standards in compliance with and in the scope
deﬁned in Czech Finance Ministry Regulation No. 501/2002 of
6 November 2002, as subsequently amended, which sets out the
overall framework for the presentation of the ﬁnancial statements,
and guidelines for the structure and minimum requirements for the
content of the ﬁnancial statements of banks and certain ﬁnancial
institutions, and Czech Accounting Standards for Financial Institutions, which establish the accounting principles and policies.
The Fund is obliged to comply with the regulatory requirements
of the Act.
The ﬁnancial statements are presented in compliance with general
accounting principles, speciﬁcally the accrual principle, the prudence concept and the going concern assumption.
The ﬁnancial statements contain the balance sheet, proﬁt and loss
account, statement of changes in equity, and notes to the ﬁnancial
statements.
The presentation of the ﬁnancial statements requires that the
Company makes estimates which have an impact on the reported
amounts of assets and liabilities as at the date of the ﬁnancial statements as well as expenses and income in the relevant accounting
period. These estimates are based on information available as at
the date of the ﬁnancial statements and may differ from the actual
results.
As a result of continued market volatility since the start of the
global ﬁnancial crisis, the Fund may be exposed to increased risk,
speciﬁcally due to the uncertainty regarding possible asset impairments and future developments on the market. The ﬁnancial
statements have been prepared based on the current best estimates
using all relevant and available information as at the date of the
ﬁnancial statements.
These ﬁnancial statements are unconsolidated.
All amounts are stated in thousands of Czech crowns (CZK), unless indicated otherwise.
Explanation Added for Translation into English
These ﬁnancial statements are presented on the basis of accounting
principles and standards generally accepted in the Czech Republic.
Certain accounting practices applied by the Company that conform with generally accepted accounting principles and standards
in the Czech Republic may not conform with generally accepted
accounting principles in other countries.
342
Investiční společnost České spořitelny, a. s., OSOBNÍ PORTFOLIO 4 – otevřený podílový fond, 2013 Annual Report
3. Accounting Policies
Receivables and Payables
Purchases and sales of securities are recognised using trade date
accounting provided that the period between the trade date and the
fulﬁlment of the commitment arising from the contract does not
exceed a period typical for the relevant type of transaction.
The Fund records receivables arising from its transactions with
securities, receivables from positive fair values of derivatives and
other operating receivables. The Fund records payables arising
from its transactions with securities and payables from negative
fair values of derivatives. Pursuant to the prudence principle, provisions are created based on the aging of receivables.
The transaction recognition date for derivative contracts is:
a) the date upon which the related contract was entered into;
b) the date when fulﬁlment was delivered based on the relevant
contract.
The Fund records payables arising from its transactions with securities and operating payables at their nominal value, while payables from negative fair values of derivatives are recorded at the fair
value of the derivatives at the balance sheet date.
The transaction recognition date can also be the date when money
in circulation is paid or received, the date when foreign currency is
purchased or sold, the date when a payment is made, the date when
ownership is acquired or terminated, when a receivable or payable
arises, changes or ceases to exist, when assets move within an accounting entity, and the date when other matters to be included
in the accounting records occur, or when the documents supporting these other matters are available, or when other matters are
a consequence of internal conditions of the accounting entity and/
or special regulations.
Financial Derivatives and Hedging Transactions
Transaction Recognition Date
Securities
In accordance with the Fund’s strategy, all securities are classiﬁed
as ‘securities at fair value through proﬁt or loss. During the accounting period, securities are re-measured at fair value on a daily
basis pursuant to the Finance Ministry Regulation No. 194/2011
Coll., on more detailed regulation of certain rules in collective investment (the “Decree”), as amended.
The securities of the Fund are accounted for as securities at fair
value through proﬁt or loss. The fair value of the securities is determined in accordance with the International Financial Reporting
Standards with an exception, that an average price between the
most favourable binding offer and demand (MID price) is used
for bonds.
Pursuant to the Regulation, securities are valued at the price quoted
on a public market which is adjusted, as appropriate, to reﬂect the
rules set out in the Regulation. If the market value is unavailable,
the Fund uses a value determined by the Company using valuation models based on discounted future cash ﬂows according to
the yield curve calculated using the Reuters and Kondor+ systems.
Securities are measured at cost upon initial recognition using the
weighted average method. The acquisition cost includes direct
transaction costs related to the acquisition of securities.
Realised capital gains or losses are recorded in the proﬁt and loss
account within ‘Proﬁt or loss from ﬁnancial operations’.
Accrued interest relating to assets is included within the total balance of these assets.
In the normal course of business, the Fund enters into hedging contracts with ﬁnancial derivatives to hedge against foreign currency
exposures associated with its transactions on ﬁnancial markets.
The method of fair value hedges is applied to hedging derivatives.
The Fund designates certain derivatives as hedges provided that
the following criteria are met:
– the Fund has developed a risk management strategy;
– at the inception of the hedge, the hedging relationship is formally documented, the documentation identiﬁes the hedged
item and the hedging instrument, and it deﬁnes the risk that
is being hedged and the approach to establishing whether the
hedge is effective; and
– the hedge is effective, that is, changes in the fair value or cash
ﬂows of the hedged item are almost fully offset by changes in
the fair value or cash ﬂows of the hedging instrument and the
results are within a range of 80 percent to 125 percent.
Nominal values of derivative ﬁnancial instruments are recognised
in the off-balance sheet accounts. Changes in the fair value of derivatives that are designated and qualify as hedges (see above) are
recorded as income or expense. Changes in the fair value of the
hedging derivatives attributable to the risk hedged are recognised
in the same income or expense accounts as differences from revaluation of a hedged instrument.
All ﬁnancial derivatives are recorded as assets when the fair value
is positive and as liabilities when the fair value is negative. Fair
values are derived from valuation models.
Derivatives that are not designated as hedging derivatives are
treated as trading derivatives. These derivatives are measured at
fair value on a daily basis through expense and income accounts.
Certain derivatives are embedded in compound ﬁnancial instruments, which comprise the host instrument and the derivative. Pursuant to the applicable regulations, the Fund recognises changes in
assets and liabilities arising from the movements in rates or prices
of securities or changes in exchange rates through expense and
income accounts. Given that the assets of the Fund are valued at
fair value, embedded derivatives are not accounted for separately.
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Investiční společnost České spořitelny, a. s., OSOBNÍ PORTFOLIO 4 – otevřený podílový fond, 2013 Annual Report
Income Tax
Under effective tax regulations, the income tax rate applicable to
mutual funds is 5 percent.
Deferred Tax
Deferred tax is provided using the liability method on all temporary differences between the carrying amount of assets and liabilities reported in the balance sheet and their value for tax purposes.
Deferred tax assets are recognised only up to the amount of probable future taxable income against which the deferred tax asset can
be offset.
Foreign Currency Translations
Foreign currencies are translated using the exchange rate promulgated by the Czech National Bank as at the relevant date. As at the
balance sheet date, assets and liabilities denominated in foreign
currencies are translated on the same basis.
Foreign exchange rate gains and losses from the daily translation
of assets and liabilities in foreign currencies are posted to expense
or income accounts.
Capital Funds
The selling price of participation certiﬁcates is calculated as a proportion of the Fund’s net assets and the relevant number of participation certiﬁcates. Participation certiﬁcates are sold to qualiﬁed
investors using the selling price determined on a daily basis.
events are disclosed in the notes to the ﬁnancial statements but not
recognized in the ﬁnancial statements.
4. Risk Management
Credit Risk
In accordance with the Statute and the investment strategy, the
Company establishes rules and policies for selecting investment
instruments such that the overall credit risk proﬁle of allocated investments is consistent with the characteristics of the Fund. New
types of instruments are approved on a case by case basis by the
risk management function together with the speciﬁcation of limits
for positions pertaining to these instruments. Speciﬁc emphasis is
placed on an appropriate rating structure and a relatively detailed
diversiﬁcation of portfolios (especially in relation to interest bearing securities).
Market Risk
The Fund uses a wide range of tools to eliminate risk exposures
attached to its portfolios. Signiﬁcant attention is paid to market
risks. Apart from statutory restrictions, the Fund is subject to a set
of internal limits having a direct impact on the FX exposure, interest rate exposure (the modiﬁed duration range of the Fund), equity
allocation on individual markets according to their volatility, portfolio rating structure (see above), and other characteristics of the
Fund. The relevant limits are appropriately applied to correspond
with the type of the Fund.
Share Premium
Share premium is the difference between the nominal value of all
participation certiﬁcates and their market value.
Interest Income and Expense and Dividend
Income
Interest income and expense are recognised using the accrual principle.
Dividend income is recognised as at the date when the right to
receive the payment is established (ex-dividend date). Dividend income from domestic securities is presented after withholding tax.
Dividend income from foreign securities is presented gross with
the applicable taxes presented within taxes on foreign dividends
(see note 5.16).
Whenever the Fund purchases new types of instruments, these instruments are ﬁrst analysed to assess the potential credit risk, as
well as the market risk that the instruments might bring to or help
eliminate from the portfolio. Subsequently, their appropriateness
and, if appropriate, the acceptable proportion of these instruments
in the portfolio is evaluated.
The level of the Fund’s market risk exposure is measured using
the Value at Risk (“VaR”). With effect from 1 August 2006, the
VaR for the Company’s Funds is calculated by the Central Risk
Management Department of Česká spořitelna using the historical
simulation method in the K + KvaR system.
Set out below are relative monthly values of the VaR in percentage
terms for individual types of risks:
Subsequent Events
The impact of events that occurred between the balance sheet date
and the date of the ﬁnancial statements preparation is recognized in
the ﬁnancial statements provided these events provide additional
evidence about conditions that existed at the date of the balance
sheet.
Global VaR
Currency VaR
Interest rate VaR
Equity VaR
31 Dec 2013
Average
VaR
0.71%
0.13%
0.07%
0.68%
0.66%
0.13%
0.09%
0.66%
If material events reﬂecting the facts occurring after the balance
sheet date happened between the balance sheet date and the date
of the ﬁnancial statements preparation the consequences of these
344
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31 Dec 2012
Average
VaR
0.49%
0.45%
0.12%
0.14%
0.57%
0.10%
0.14%
0.53%
Global VaR
Currency VaR
Interest rate VaR
Equity VaR
The average VaR is calculated as average of daily VaR values in
years 2013 and 2012 respectively.
The Fund monitors Value at Risk globally and also broken down to
Foreign Currency VaR, Interest Rate VaR and Equity VaR. Based
on the above values, the Fund identiﬁes critical risk segments. This
identiﬁcation inﬂuences the reinvestment process. The limits set
the maximum acceptable VaR for the Fund.
The Equity VaR also reﬂects the risk related to the holding of mutual funds’ participation certiﬁcates (including funds of money
market and bond funds).
Adherence to all the above limits and their effectiveness is monitored and assessed on an ongoing basis. The limits are reviewed,
if necessary.
The portfolio’s risk of unfavourable development of foreign exchange rates, interest rates, and other market factors is hedged, to
an appropriate extent, by ﬁnancial derivatives. Financial derivatives are traded on the OTC market as this market enables the trading of contracts whose parameters and nature appropriately satisfy
the requirements of a hedge. Portfolios primarily include currency
swaps, currency forwards and interest rate swaps.
Liquidity Risk
Another monitored risk is the liquidity risk. Liquidity risk is a risk
that the Fund will not have enough available resources to meet its
obligations arising from ﬁnancial contracts. Liquidity is monitored
and managed based on expected cash ﬂows, with appropriate adjustments made to the structure of securities and term placements
portfolios.
Pursuant to the Act, the Company is obliged to repurchase a participation certiﬁcate without undue delay but not later than 15 business days from the date when the repurchase right is claimed. Given that the Fund holds securities traded on foreign stock exchanges
which can be realised within a few days, the Fund’s inability to
meet its obligations due to lack of liquidity is unlikely.
Pursuant to Section 12 of the Collective Investment Act, the Company can suspend issues and purchases of the Fund’s participation
certiﬁcates for a maximum of three months, if necessary due to the
protection of rights or the participation certiﬁcate holders’ interests
protected by law. Issuing and purchasing participation certiﬁcates
can be suspended particularly at the end or beginning of the calendar year, in the event of natural disasters, upon very strong ﬂuctuations on ﬁnancial markets and upon high requirements for the
sales or purchases of participation certiﬁcates provided they could
endanger the Fund’s assets.
The quantitative information about the residual maturity of assets
and liabilities is given in Note 5.18.
5. Additional Information on the Financial Statements
5.1 Receivables from Banks
Receivables from banks
31 Dec 2013 31 Dec 2012
Current accounts
Term deposits
Margin accounts
113,071
–
16,152
164,982
–
10,886
Total
129,223
175,868
Balances on current accounts are repayable on demand.
5.2 Securities
Individual types of securities by issuer, number of securities, their market value and interest rate are disclosed in the Portfolio attached to
the annual report. All securities held by the Fund are publicly listed on the Prague Stock Exchange or foreign stock exchanges. Participation
certiﬁcates which are not listed on stock exchanges are purchased and administered by the Company.
Debt securities
31 Dec 2013 31 Dec 2012
Acquisition cost
Market revaluation
Accrued interest income
713,562
(778)
8,088
700,123
16,898
7,957
Total
720,872
724,978
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Investiční společnost České spořitelny, a. s., OSOBNÍ PORTFOLIO 4 – otevřený podílový fond, 2013 Annual Report
Shares, participation certiﬁcates and other holdings
31 Dec 2013 31 Dec 2012
Acquisition cost
Market revaluation
1,013,330
10,332
1,017,320
47,895
Total
1,023,662
1,065,215
Of the aggregate volume of debt securities, debt securities maturing within one year accounted for 0 percent in 2013 (2012: 9.90 percent).
Of the aggregate volume of debt securities, debt securities maturing within more than one year with a variable coupon accounted for 33.441
percent in 2013 (2012: 33.32 percent).
Of the aggregate volume of debt securities, debt securities maturing within more than one year with a ﬁxed coupon accounted for 66.559
percent in 2013 (2012: 56.78 percent).
5.3 Other Assets
Other assets
31 Dec 2013 31 Dec 2012
Positive fair values of ﬁnancial derivatives
State budget settlement
Other
374
1,113
855
1,013
–
1,025
Total
2,342
2,038
The caption ‘Other’ represents an estimated receivable for the return of a portion of the management fee for purchased participation certiﬁcates of Erste’s fund CZK 794 thousand.
5.4 Prepayments and Accrued Income
Prepayments and accrued income
31 Dec 2013 31 Dec 2012
Prepayments – audit fees
30
42
Total
30
42
5.5 Equity
The Fund has no share capital. The nominal value of one participation certiﬁcate is CZK 1. The total nominal value of all participation
certiﬁcates is posted to ‘Capital funds’.
Share premium arising from the difference between the nominal and selling values of the participation certiﬁcates is recorded separately.
The Fund accounts for share premium upon the sale of participation certiﬁcates as well as upon their repurchase.
The selling price of the participation certiﬁcate is determined as the share of the Fund’s net assets and the number of issued participation
certiﬁcates.
The value of a participation certiﬁcate as at the last trading date in 2013 totalled CZK 1.1184 (2012: CZK 1.1145). This is the most recent
announced value of the participation certiﬁcate for the year, for which purchases and repurchases of the participation certiﬁcates of the Fund
were undertaken. This value minimally differs from the accounting value of the participation certiﬁcate at the balance sheet date due to additional recognition of some items within the ﬁnancial statements.
The proﬁt for 2013 in the amount of CZK 6,688 thousand will be transferred to the reinvestment fund within ‘Other funds from proﬁt’.
The proﬁt for 2012 in the amount of CZK 81,939 thousand was transferred to the reinvestment fund within ‘Other funds from proﬁt’.
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5.6 Changes in the Capital Fund
Number of
Nominal
participation
value of
certiﬁcates participation
certiﬁcates
Balance at 31 Dec 2011
Participation certiﬁcates sold
Participation certiﬁcates purchased
Balance at 31 Dec 2012
Participation certiﬁcates sold
Participation certiﬁcates purchased
Fund used to loss coverage
Balance at 31 Dec 2013
Use of fund Total capital
to cover
funds
losses
1,925,140,980
1,925,141
–
1,925,141
381,820,667
(549,057,006)
381,821
(549,057)
–
–
381,821
(549,057)
1,757,904,641
1,757,905
(12,534)
1,745,371
393,591,261
(482,552,419)
–
393,591
(482,552)
–
–
–
–
393,591
(482,552)
–
1,668,943,483
1,668,944
(12,534)
1,656,410
5.7 Other Liabilities
Other liabilities
31 Dec 2013 31 Dec 2012
Negative fair values of ﬁnancial derivatives
Payable to the state budget
Payables from participation certiﬁcate holders’ placements
Other liabilities
7,553
–
905
386
2,634
3,193
1,665
543
Total
8,844
8,035
5.8 Accrued Expenses and Deferred Income
Accrued expenses consist of the unbilled custody fee of CZK 93 thousand for December 2013 (2012: CZK 98 thousand), the unbilled management fee of CZK 648 thousand for December 2013 (2012: CZK 738 thousand), the unbilled fee for the local sub-register administration
of CZK 0 thousand for December 2013 (2012: CZK 16 thousand), the unbilled fee for calculation of NAV and participation certiﬁcate rate
of CZK 8 thousand (2012: CZK 8 thousand) and the unbilled fee for the Central custodian of CZK 1 thousand (2012: CZK 1 thousand).
5.9 Financial Derivatives Designated as Hedging Derivatives
Nominal value of the derivative
31 Dec 2013
31 Dec 2012
Assets
Liabilities
Assets
Currency swaps
102,832
109,699
185,569
Liabilities
186,963
Total
102,832
109,699
185,569
186,963
Open positions of derivatives posted to an off-balance sheet are converted to fair value daily as of 1 January 2011 (up to 31 August 2013
futures were converted monthly; as of 1 September 2013 they are converted on daily basis) and recorded in absolute values.
Fair value of the derivatives
31 Dec 2013
31 Dec 2012
Positive
Negative
Positive
Currency swaps
–
6,867
325
Negative
1,719
Total
–
6,867
325
1,719
Currency derivatives are due within one year.
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5.10 Financial Derivatives Designated as Trading Derivatives
Nominal value of the derivatives
31 Dec 2013
31 Dec 2012
Assets
Liabilities
Assets
Liabilities
Equity indices futures
Interest rate swaps
130,205
22,280
129,831
22,966
27,060
22,280
27,280
23,195
Total
152,485
152,797
44,339
50,475
Open positions of derivatives posted to an off-balance sheet are converted to fair value daily as of 1 January 2011 (up to 31 August 2013
futures were converted monthly; as of 1 September 2013 they are converted on daily basis) and recorded in absolute values.
Fair value of the derivatives
31 Dec 2013
31 Dec 2012
Positive
Negative
Positive
Negative
Equity indices futures
Interest rate swaps
374
–
–
686
688
–
–
915
Total
374
686
688
915
2013
2012
Interest on deposits at banks
Interest on debt securities
66
18,167
852
18,638
Total
18,233
19,490
2013
2012
Interest rate swap is due within 4 years.
5.11 Interest Income
5.12 Income from Shares and Interests
Foreign dividends
602
904
Total
602
904
2013
2012
8,749
1,179
14
181
695
618
10,831
1,450
35
187
778
820
11,436
14,101
5.13 Fees and Commissions
Management fees
Custody fees
Commissions and fees from securities trading
Expenses of administration of the local sub-register
Expenses – administration of securities
Other fees and commissions
Total
In compliance with the Statute of the Fund, the management fee paid to the Company by the Fund amounts to 0.60 percent of the average
annual net asset value.
Pursuant to the custody service contract entered into with Česká spořitelna, a. s., the Fund pays a fee equal to 0.06 percent of its average
annual net asset value.
If participation certiﬁcates of another mutual fund managed by the Company are purchased and added to the Fund’s assets, the Fund’s aggregate net asset value reduced by the current value of investments in participation certiﬁcates of the other mutual fund managed by the
Company is used as the basis for the calculation of the ﬁxed part of the management fee.
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Investiční společnost České spořitelny, a. s., OSOBNÍ PORTFOLIO 4 – otevřený podílový fond, 2013 Annual Report
5.14 Proﬁt or Loss from Financial Operations
Proﬁt or loss from securities at fair value through proﬁt or loss
Proﬁt or loss from ﬁxed term transactions
Proﬁt or loss from FX differences
Total
2013
2012
12,222
(15,755)
3,471
75,757
3,088
223
(62)
79,068
Proﬁt or loss from securities at fair value through proﬁt or loss primarily comprises the proﬁt from the realised sales of securities, from payable securities and from the daily valuation of securities at fair value.
Proﬁt or loss from derivatives includes proﬁt on the settlement of ﬁxed term transactions with currency instruments and also the revaluation
of open derivatives at fair value.
Proﬁt or loss from FX differences represents the value of realised FX proﬁt or loss from foreign currency accounts and from the settlement
of foreign currency receivables and payables and also gains or losses arising from the revaluation of assets, with the exception of securities,
and liabilities in foreign currency at fair value.
5.15 Administrative Expenses
2013
2012
Audit
233
230
Total
233
230
2013
2012
5.16 Income Tax
The principal income tax components are as follows:
Tax payable – current year
416
3,192
Total income tax
416
3,192
Current income tax – analysis:
31 Dec 2013 31 Dec 2012
Proﬁt (Loss) before tax
Items to add
Deductible items
Tax base
Loss deduction
Tax base after deduction
Tax (5%) on tax base
Foreign dividends
Tax on foreign dividends
Total tax
7,103
6
(602)
6,507
–
6,507
326
602
90
85,131
4
(904)
84,231
(23,104)
61,127
3,056
904
136
416
3,192
Deferred tax
As at 31 December 2013, no temporary differences existed between the tax bases of assets and liabilities and their carrying amounts for
ﬁnancial reporting purposes.
As at 31 December 2012, no temporary differences existed between the tax bases of assets and liabilities and their carrying amounts for
ﬁnancial reporting purposes.
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Investiční společnost České spořitelny, a. s., OSOBNÍ PORTFOLIO 4 – otevřený podílový fond, 2013 Annual Report
5.17 Related Party Transactions
Related parties include Česká spořitelna, a. s., Investiční společnost České spořitelny, a. s., and Reico ISCS, a. s.
2013
2012
Accrued income-loyalty bonus for holding of participation certiﬁcates of ČS nemovitostní fond
30
30
Total receivables from related party
30
30
Total income from a loyalty bonus for holding of PL OPF Reico was CZK 359 thousand in 2013.
Pursuant to a contract entered into between and by ISČS, a. s. and Reico ISČS, a. s., the Fund receives a bonus for holding of the participation
certiﬁcates of ČS nemovitostní fond which is equal to one twelfth of 0.8 percent of investment value as at the last day of a calendar month.
Unbilled custody fee – Česká spořitelna
Unbilled management fee – Investiční společnost
Unbilled fee for administration of the local sub-register
Other payables to related parties
Total payables to related parties
2013
2012
93
648
–
394
98
738
16
552
1,135
1,404
The costs charged to the Fund by Česká spořitelna, a. s. amounted to CZK 2,688 thousand in 2013 (2012: CZK 3,270 thousand), of which
the greatest portion was represented by the custody fee of CZK 1,179 thousand (2012: CZK 1,450 thousand). The costs charged by the
Company amounted to CZK 8,749 thousand in 2013 (2012: CZK 10,831 thousand), which is the annual management fee.
5.18 Liquidity
The following tables show the residual maturity of assets and liabilities broken down by major classes. Given that all securities are traded
on public markets, sales can easily be undertaken within three months.
2013
Assets
Receivables from banks
Debt securities
Shares
Derivatives
Other assets
Prepayments
Total assets
Liabilities
Other liabilities
Net assets
Available capital
Difference
Less than
3 months
3 month –
1 year
1 – 5 years Over 5 years
Not
speciﬁed
Total
129,223
–
–
374
1,968
30
131,595
–
–
–
–
–
–
–
–
720,872
–
–
–
–
720,872
–
–
–
–
–
–
–
–
–
1,023,662
–
–
–
1,023,662
129,223
720,872
1,023,662
374
1,968
30
1,876,129
(9,594)
122,001
(1,866,535)
–
–
–
–
720,872
–
–
–
–
–
1,023,662
–
(9,594)
1,866,535
(1,866,535)
(1,744,534)
–
720,872
–
1,023,662
–
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2012
Assets
Less than
3 months
3 month –
1 year
1 – 5 years
Over
5 years
Not
speciﬁed
Total
Receivables from banks
Debt securities
Shares
Other assets
Prepayments
175,868
−
−
2,038
42
−
71,788
−
−
−
−
653,190
−
−
−
−
−
−
−
−
−
−
1,065,215
−
−
175,868
724,978
1,065,215
2,038
42
Total assets
177,948
71,788
653,190
−
1,065,215
1,968,141
Other liabilities
Net assets
Available capital
(3,069)
174,879
(1,959,245)
(4,912)
66,876
−
(915)
652,275
−
−
−
−
−
1,065,215
−
(8,896)
1,959,245
(1,959,245)
Difference
(1,784,366)
66,876
652,275
−
1,065,215
−
Liabilities
Liquidity risk, to which the Fund is exposed, is low as all assets are immediately convertible into cash before the expected purchases of
participation certiﬁcates from participation certiﬁcate holders can be undertaken.
5.19 Off-balance Sheet Assets and Liabilities
The Fund’s off-balance sheet accounts include receivables and payables from ﬁxed term transactions and assets provided into custody
and safekeeping. The item ‘Assets provided into custody, administration and safekeeping’ shows foreign securities administered by Česká
spořitelna, a. s., (this item does not include participation certiﬁcates of open-ended mutual funds of the Company, which the Fund maintains
in its portfolio).
5.20 Contingent Assets and Liabilities
The Fund has no assets or liabilities that were not disclosed in the balance sheet or off-balance sheet accounts.
5.21 Subsequent Events
No signiﬁcant events occurred after the date of the ﬁnancial statements, which would have a material impact on the Fund’s ﬁnancial statements.
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Investiční společnost České spořitelny, a. s., OSOBNÍ PORTFOLIO 4 – otevřený podílový fond, 2013 Annual Report
Portfolio at 31 December 2013
The detail of the portfolio is not part of the fund’s ﬁnal accounts. Figures are stated in CZK.
ISIN
Name of the security
XS0616431689
XS0860033843
XS0641963839
ERSTE BANK 4.25 04/12/16
ING BANK NV VAR 11/30/17
CESKE DRAHY 4.5 06/24/16
Amount
Market Price
Market Price
Total
Accrued
Interest
34
720
900
2,938,204.80
50,350.00
29,497.78
99,898,963.20
36,252,000.00
26,548,003.35
2,855,468.46
38,720.00
578,179.11
162,698,966.55
3,472,367.57
4,600
840
28,200
19,500
10,477.50
10,360.00
10,542.50
10,045.50
48,196,500.00
8,702,400.00
297,298,500.00
195,887,250.00
1,257,588.89
-7 728.00
3,169,366.67
197,166.67
550,084,650.00
4,616,394.23
162,508,936
44,377,521
176,461,286
81,919,220
1.88
1.03
1.02
1.04
304,704,255.00
45,677,782.37
180,502,249.45
85,572,817.21
0.00
0.00
0.00
0.00
616,457,104.03
0.00
6,371
1,289,726
2,583
5,147
850,791
10,124
2,160
4,393.76
144.57
4,492.49
3,749.27
129.04
4,128.83
4,753.85
27,992,640.18
186,455,687.82
11,604,099.73
19,297,501.70
109,786,070.64
41,800,312.89
10,268,314.92
0.00
0.00
0.00
0.00
0.00
0.00
0.00
407,204,627.88
1,736,445,348.46
0.00
8,088,761.80
Foreign corporate bonds
CZ0001001143
CZ0001003438
CZ0001002737
CZ0001002331
GOVERNMENT BOND 3.8 04/11/15
GOVERNMENT BOND VAR 07/23/17
GOVERNMENT BOND 3.4 09/01/15
GOVERNMENT BOND VAR 10/27/16
Local government bonds after 1 January 1998
CZ0008472271
CZ0008472545
CZ0008473188
CZ0008473659
ISCS SPOROINVEST
CS NEMOVITOSTNI FOND REICO
ISCS LIKVIDITNI FOND
ISCS DLUHOPISOVY FOND
Local participation certiﬁcates - ISČS
AT0000637491
AT0000633771
AT0000673280
AT0000805684
AT0000674692
AT0000A05HS1
AT0000673306
ESPA BOND USA HIGH YIELD (T) EUR
ESPA CESKY FOND ST. DLUHOPISU VT
ESPA BOND EUROPE-HIGH YLD (V)
ESPA BOND EUROPE HIGH YIELD T
ESPA FIDUCIA (VT) CZK
ESPA BOND BRIK-CORP. (VT)
ESPA BOND EMERGING MKTS (VT) EUR
Foreign participation certiﬁcates
Total
352
Independent Auditor’s Report
to the Participation certiﬁcate holders of Investiční společnost České spořitelny, a. s.,
PLUS – otevřený podílový fond
We have audited the accompanying ﬁnancial statements of Investiční společnost České spořitelny, a. s., PLUS – otevřený podílový fond,
which comprise the balance sheet as at 31 December 2013, and the income statement and statement of changes in equity for the year then
ended, and a summary of signiﬁcant accounting policies and other explanatory information. For details of Investiční společnost České
spořitelny, a. s., PLUS – otevřený podílový fond, see Note 1 to the ﬁnancial statements.
Management’s Responsibility for the Financial Statements
Management of Investiční společnost České spořitelny, a. s., is responsible for the preparation and fair presentation of these ﬁnancial statements in accordance with accounting principles generally accepted in the Czech Republic, and for such internal control as management determines is necessary to enable the preparation of ﬁnancial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these ﬁnancial statements based on our audit. We conducted our audit in accordance with the
Act on Auditors and International Standards on Auditing as amended by implementation guidance of the Chamber of Auditors of the Czech
Republic. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
whether the ﬁnancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the ﬁnancial statements. The procedures selected depend on the auditor’s judgment, including an assessment of the risks of material misstatement of the ﬁnancial statements,
whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation
and fair presentation of the ﬁnancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the ﬁnancial statements.
We believe that the audit evidence we have obtained is sufﬁcient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the ﬁnancial statements present fairly, in all material respects, the ﬁnancial position of Investiční společnost České
spořitelny, a. s., PLUS – otevřený podílový fond, as at 31 December 2013, and its ﬁnancial performance for the year then ended in accordance with accounting principles generally accepted in the Czech Republic.
31 March 2014
Prague, Czech Republic
Ernst & Young Audit, s.r.o.
License No. 401
Represented by partner
Roman Hauptﬂeisch
Auditor, Licence no. 2009
A member ﬁrm of Ernst & Young Global Limited,
Ernst & Young Audit, s. r. o. with its registred ofﬁce at Na Florenci 2116/15, 110 00 Prague 1 – Nové Město,
has been incorporated in the Commercial Register administered by the Municipal Court in Prague,
Section C, entry No. 88504, under Identiﬁcation No. 26704153.
353
Investiční společnost České spořitelny, a. s., PLUS – otevřený podílový fond, 2013 Annual Report
Balance Sheet
at 31 December 2013
(in thousands CZK)
Line
Current
Previous
1
2
5
10
11
12
13
15
16
18
19
21
20,953
19,445
1,508
71,359
47,638
23,721
111,260
151
59
30
62
3
25,142
23,760
1,382
60,832
48,256
12,576
109,054
124
23
0
101
13
22
203,726
195,165
29
30
32
33
34
39
40
41
47
817
505
0
312
78
930
5,324
196,734
(157)
654
211
118
325
86
779
0
188,322
5,324
Total Liabilities
48
203,726
195,165
of which: Equity
49
202,831
194,425
3 Receivables from banks and credit unions
of which: a/ on demand: aa/ current accounts
ad/ margin accounts
5 Debt securities
of which: a/ issued by the government
b/ issued by other entities
6 Shares, unit certiﬁcates and other participation interests
11 Other assets
a/ derivatives
c/ receivables from taxes
d/ other assets
13 Prepayments and accrued income
Total Assets
4 Other liabilities
a/ derivatives
c/ liabilities from taxes
d/ other liabilities
5 Deferred income and accrued expenses
9 Share premium
10 Reserve funds and other funds from proﬁt
12 Capital funds
15 Proﬁt or loss for the accounting period
354
Investiční společnost České spořitelny, a. s., PLUS – otevřený podílový fond, 2013 Annual Report
Off Balance Sheet Accounts
at 31 December 2013
(in thousands CZK)
4 Amounts due from ﬁxed term transactions
a/ with interest instruments
b/ with currency instruments
7 Assets provided into custody, administration and safekeeping
of which: securities
12 Amounts owed from ﬁxed term transactions
a/ with interest instruments
b/ with currency instruments
Line
Current
Previous
52
53
54
60
61
64
65
66
29,592
2,476
27,116
90,506
90,506
30,038
2,552
27,486
17,996
2,476
15,520
93,005
93,005
18,184
2,577
15,607
355
Investiční společnost České spořitelny, a. s., PLUS – otevřený podílový fond, 2013 Annual Report
Proﬁt and Loss Account
for the year ended 31 December 2013
(in thousands CZK)
1 Interest income and similar income
of which: a/ interest income from bonds
3 Income from shares and unit certiﬁcates
5 Commission and fee expenses
a/ fees and commissions from securities trading
b/ management fee
c/ custody fee
d/ other ﬁnancial expenses
6 Proﬁt or loss on ﬁnancial operations
a/ proﬁt or loss on transactions with securities
b/ proﬁt or loss on foreign exchange transactions
c/ proﬁt or loss on ﬁxed term transactions and options
9 Administrative expenses
of which: b/ other administrative expenses: ba/ audit
19 Ordinary proﬁt or loss for the accounting period before tax
23 Income tax
24 Proﬁt or loss for the accounting period after tax
Line
Current
Previous
1
2
9
10
11
12
13
14
15
16
17
18
21
22
26
30
31
1,565
1,556
83
1,340
1
857
120
362
(281)
1,612
198
(2,091)
172
172
(145)
12
(157)
1,317
1,214
87
1,528
30
922
123
453
5,683
5,565
167
(49)
117
117
5,442
118
5,324
356
Investiční společnost České spořitelny, a. s., PLUS – otevřený podílový fond, 2013 Annual Report
Statement of Changes in Equity
for the year ended 31 December 2013
(in thousands CZK)
Line
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16
17
18
19
20
Current
Previous
779
1,170
(1,019)
0
930
680
276
(177)
0
779
0
5,324
0
5,324
684
0
(684
0
188,322
67,004
(58,592)
0
0
196,734
142,141
99,489
(50,826)
(2 482
0
188,322
0
0
0
0
0
0
1 Share premium
opening balance
issued unit certiﬁcates
repurchase of unit certiﬁcates
other changes
closing balance
2 Retained earnings
opening balance
transfers to funds
other changes
closing balance
3 Capital funds
opening balance
issued unit certiﬁcates
repurchase of unit certiﬁcates
transfers to funds
other changes
closing balance
4 Gains or losses from revaluation
opening balance
foreign exchange rate differences and gains or losses from revaluation not
included in proﬁt (loss)
closing balance
5 Retained earnings or accumulated losses from previous periods
opening balance
other changes
closing balance
6 Proﬁt (loss) for the current period after taxes
opening balance
proﬁt (loss)
transfers to funds, dividends
closing balance
21
22
23
24
25
26
27
28
29
30
31
0
0
0
0
0
0
5,324
(157)
(5,324)
(157)
(3,167)
5,324
3,167
5,324
7 Total
32
202,831
194,425
357
Investiční společnost České spořitelny, a. s., PLUS – otevřený podílový fond, 2013 Annual Report
Notes to the Financial Statements
for the year ended 31 December 2013
1. Organisation and Description
of Business
Following Investiční společnost České spořitelny, a. s.’s request,
the Czech National Bank approved the formation of a fund entitled
Investiční společnost České spořitelny, a. s., Plus – otevřený podílový fond. The decision came into legal effect on 16 February 2010.
The Fund commenced its activities on 1 March 2010.
certiﬁcates and to achieve an average annual appreciation which
would exceed the level reached by the Czech government bonds,
primarily through investments in collective investment bond and
equity funds. In this respect, a maximum acceptable loss incurred
over one-year period should be most likely limited to 5 percent.
The Fund primarily seeks to install a 100 percent protection of
invested funds (with no formal guarantee) for every six-year period, always beginning from 31 December. Currency, credit, interest rate and equity risks are actively managed using available
hedging instruments. The objective is achieved principally through
a continuous effort to maintain an optimal balance between the
stable and the dynamic components of the portfolio (bonds versus
investment instruments carrying the risk of equity or real estate
or alternative investments), resulting in the optimizing of future
income and expected risks.
Pursuant to a concluded contract, Česká spořitelna, a. s. acts as the
depository of the Fund.
The limits of the Fund are adhered to on the basis of the Act, or
they are regulated in the Fund’s Statute in compliance with the Act.
The Fund is managed by the Company. In compliance with the
Act, the Company is responsible for the management of the assets
of the Fund, which involves the administration and handling of
the assets.
Finances collected in the Fund are invested predominantly in securities of collective investment funds if such collective investment
funds distribute the risk connected to investments and meet other
obligations as set by the Act.
According to the classiﬁcation binding for the members of the
Capital Market Association (hereinafter the “AKAT CR”) as at the
date of the approval of this Statute, the Fund can be deﬁned as
a special fund of funds.
The portfolio of the Fund can also be expanded by purchasing
other investment instruments allowed by the Act for collective investment of a standard fund.
Formation and Description of the Business
Investiční společnost České spořitelny, a. s., PLUS – otevřený
podílový fond (the “Fund” or “ISČS, a. s. – PLUS OPF”) is an
accounting entity without legal entity status, formed by Investiční
společnost České spořitelny, a. s. (the “Company”) in compliance
with the Collective Investment Act No. 189/2004 Coll. (the “Act”).
Registered Ofﬁce
Investiční společnost České spořitelny, a. s.
PLUS – otevřený podílový fond
Prague 6, Evropská 2690/17
Principal Business
The participation certiﬁcates of the Fund are available in the Czech
Republic or in other EU member countries.
The Company collects funds from individuals and legal entities for
the Fund by issuing participation certiﬁcates with the purpose of
their collective investment on local and foreign ﬁnancial markets.
No restrictions are placed on the number of participation certiﬁcates for issue and the period for which the Fund is established.
The Company reserves the right to temporary halt the issuing of
participation certiﬁcates for no longer than three months in compliance with the Act.
The Company can use ﬁnancial derivatives to decrease risk, decrease costs or achieve sufﬁcient income for the Fund provided
that the risk is demonstrably low.
Management Policy
The proﬁt/(loss) is based on the difference between income and
expenses related to the management of the Fund’s assets.
The generated proﬁt has been fully retained by the Fund, in the reinvestment fund, as a source for further investments, and increases
the participation certiﬁcate value. In the event that the Fund incurs
a loss from the Company’s management of assets, the loss is covered from the reinvestment fund which was created from earnings
brought forward. If the reinvestment fund is not sufﬁcient, the loss
is covered by a reduction in the Fund’s capital fund.
The Fund’s assets must not be used for the provision of loans, borrowings or gifts, to secure a third party’s obligation or to settle
a payable which is not related to the Fund’s management.
Investment Policy of the Fund
The objective of the investment policy is to provide participation
certiﬁcate holders with a long-term appreciation of participation
When managing the Fund’s assets, contracts for the sale of investment securities and money market instruments, securities issued
358
Investiční společnost České spořitelny, a. s., PLUS – otevřený podílový fond, 2013 Annual Report
by other collective investment funds and ﬁnancial derivatives
which are not owned by the Fund at the moment of concluding the
respective contracts, must not be entered into.
The Company can accept loans and borrowings for the maximum
of six months when managing the Fund’s assets, to cover temporary needs related to the management of the Fund’s assets or
purchases of participation certiﬁcates. The volume of the received
loans and borrowings must not exceed 10 percent of the value of
the Fund’s assets.
Change in the Fund’s Statute
Czech National Bank Resolution No. 2012/4578/570, dated 18
May 2012, which came into force on 5 June 2012: The changes
to the Funds statute related mainly to the duty of the asset investment company to ensure that its statute is in accordance with the
amendment to Act 189/2004 Coll., on collective investments (as
ensuing from the changes made by Act 188/2011 Coll.) and Decree No. 193/2011 Coll., on the minimum requisites of the statute
and on the conditions for the use of the name Short-Term Money
Market Fund and Money Market Fund. ESPA Czech government
bond fund was replaced by ISCS Bond fund in statute for one particular title of purchased participation certiﬁcates with the limit of
35 percent (see article III Paragraph 10 of the statute). Investment
objectives, the method of investing and the risk proﬁle of the Fund
have not been changed in the amendments referred to above.
Along with the change made to the statute, information was updated as to the list of funds managed by the Company (Article II
Paragraph 8 of the statute), in particular information on the managing parties of the asset management company (Appendix 1 to
the statute), information added on the performance of the Fund for
2011 (Appendix 2 to the statute), information updated on the total
cost indicators for 2011, and the date on which the statute being
signed was updated.
On the date the changes to the statute came into force the simple
statute of the Fund was replaced by a newly processed document
providing required key information for investors. Such key information for investors was processed in accordance with Government Regulation No. 189/2011 Coll.
As at 1 February 2013, information on Fund`s 2012 performance
was published within the document Key investors information.
(According to Paragraph 20 Article 3 of the Government Regulation No. 189/2011 the performance must be updated within the
Key investors information up to 35 days after the previous calendar year end.)
The updated text of the Funds statute was approved by the Investment company`s board of directors as at 10 April 2013. The
changes in the statute text related to an update of the list of managed funds, update of the information on the length of professional
experience of Investment company management, addition of information on Fund’s performance and the Fund`s benchmark`s
performance, an update of information on total expense ratio for
2012 and update of the date of the signature. These updates were
not subject to preliminary approval from Czech national bank (according to the section 84 (a), subsection 5 of 189/2004 Coll., On
collective investment schemes). The shareholders could access the
updated text of the Statute and Key investors information as of
10 April 2013 on http://www.iscs.cz/, at the distributor’s branches
(Ceska sporitelna, a. s.) and at the Investment company seat.
Legislative change
Act No 240/2013 Coll., On Management Companies and Investment Funds became effective as of 19 August 2013. Rules stated
by this act must be implemented by management companies and
investment funds by 22 July 2014. In 2013, the Fund`s management was subject to the rules of the Act No. 189/2004 Coll., On
collective investment schemes. The new rules will be applied as
of 2014.
2. Basis of Preparation
The ﬁnancial statements have been prepared on the basis of underlying accounting records maintained in accordance with Accounting Act No. 563/1991 Coll., and applicable regulations, decrees and internal standards in compliance with and in the scope
deﬁned in Czech Finance Ministry Regulation No. 501/2002 of
6 November 2002, as subsequently amended, which sets out the
overall framework for the presentation of the ﬁnancial statements,
and guidelines for the structure and minimum requirements for the
content of the ﬁnancial statements of banks and certain ﬁnancial
institutions, and Czech Accounting Standards for Financial Institutions, which establish the accounting principles and policies.
The Fund is obliged to comply with the regulatory requirements
of the Act.
The ﬁnancial statements are presented in compliance with general
accounting principles, speciﬁcally the accrual principle, the prudence concept and the going concern assumption.
The ﬁnancial statements contain the balance sheet, proﬁt and loss
account, statement of changes in equity, and notes to the ﬁnancial
statements.
The presentation of the ﬁnancial statements requires that the
Company makes estimates which have an impact on the reported
amounts of assets and liabilities as at the date of the ﬁnancial statements as well as expenses and income in the relevant accounting
period. These estimates are based on information available as at
the date of the ﬁnancial statements and may differ from the actual
results.
As a result of continued market volatility since the start of the
global ﬁnancial crisis, the Fund may be exposed to increased risk,
speciﬁcally due to the uncertainty regarding possible asset im359
Investiční společnost České spořitelny, a. s., PLUS – otevřený podílový fond, 2013 Annual Report
pairments and future developments on the market. The ﬁnancial
statements have been prepared based on the current best estimates
using all relevant and available information as at the date of the
ﬁnancial statements.
These ﬁnancial statements are unconsolidated.
All amounts are stated in thousands of Czech crowns (CZK), unless indicated otherwise.
most favourable binding offer and demand (MID price) is used
for bonds.
Pursuant to the Regulation, securities are valued at the price quoted on a public market which is adjusted, as appropriate, to reﬂect
the rules set out in the Regulation. If the market value is unavailable, the Fund uses a value determined by the Company using
valuation models based on discounted future cash ﬂows according to the yield curve calculated using the Reuters and Kondor+
systems.
Explanation Added for Translation into English
These ﬁnancial statements are presented on the basis of accounting
principles and standards generally accepted in the Czech Republic.
Certain accounting practices applied by the Company that conform with generally accepted accounting principles and standards
in the Czech Republic may not conform with generally accepted
accounting principles in other countries.
Securities are measured at cost upon initial recognition using the
weighted average method. The acquisition cost includes direct
transaction costs related to the acquisition of securities.
Realised capital gains or losses are recorded in the proﬁt and loss
account within ‘Proﬁt or loss from ﬁnancial operations’.
3. Accounting Policies
Accrued interest relating to assets is included within the total balance of these assets.
Transaction Recognition Date
Receivables and Payables
Purchases and sales of securities are recognised using trade date
accounting provided that the period between the trade date and the
fulﬁlment of the commitment arising from the contract does not
exceed a period typical for the relevant type of transaction.
The Fund records receivables arising from its transactions with
securities and other operating receivables at their nominal value,
while receivables from positive fair values of derivatives are recorded at the fair value of the derivatives at the balance sheet date.
Pursuant to the prudence principle, provisions are created based on
the aging of receivables.
The transaction recognition date for derivative contracts is:
a) the date upon which the related contract was entered into;
b) the date when the fulﬁlment was delivered based on the relevant
contract.
The transaction recognition date can also be the date when money
in circulation is paid or received, the date when foreign currency is
purchased or sold, the date when a payment is made, the date when
ownership is acquired or terminated, when a receivable or payable
arises, changes or ceases to exist, when assets move within an accounting entity, and the date when other matters to be included
in the accounting records occur, or when the documents supporting these other matters are available, or when other matters are
a consequence of internal conditions of the accounting entity and/
or special regulations.
Securities
In accordance with the Fund’s strategy, all securities are classiﬁed
as securities at fair value through proﬁt or loss. During the accounting period, securities are re-measured at fair value on a daily
basis pursuant to the Finance Ministry Regulation No. 194/2011
Coll., on more detailed regulation of certain rules in collective investment (the “Decree”), as amended.
The securities of the Fund are accounted for as securities at fair
value through proﬁt or loss. The fair value of the securities is determined in accordance with the International Financial Reporting
Standards with an exception, that an average price between the
The Fund records payables arising from its transactions with securities and operating payables at their nominal value, while payables from negative fair values of derivatives are recorded at the fair
value of the derivatives at the balance sheet date.
Financial Derivatives and Hedging Transactions
In the normal course of business, the Fund enters into hedging
contracts with ﬁnancial derivatives to hedge against interest rate
and foreign currency exposures associated with its transactions on
ﬁnancial markets. The method of fair value hedges is applied to
hedging derivatives.
The Fund designates certain derivatives as hedges provided that
the following criteria are met:
– the Fund has developed a risk management strategy;
– at the inception of the hedge, the hedging relationship is formally documented, the documentation identiﬁes the hedged
item and the hedging instrument, and it deﬁnes the risk that
is being hedged and the approach to establishing whether the
hedge is effective; and
– the hedge is effective, that is, changes in the fair value or cash
ﬂows of the hedged item are almost fully offset by changes in
the fair value or cash ﬂows of the hedging instrument and the
results are within a range of 80 percent to 125 percent.
360
Investiční společnost České spořitelny, a. s., PLUS – otevřený podílový fond, 2013 Annual Report
Nominal values of derivative ﬁnancial instruments are recognised
in the off-balance sheet accounts. Changes in the fair value of derivatives that are designated and qualify as hedges (see above) are
recorded as income or expense. Changes in the fair value of the
hedging derivatives attributable to the risk hedged are recognised
in the same income or expense accounts as differences from revaluation of a hedged instrument.
All ﬁnancial derivatives are recorded as assets when the fair value
is positive and as liabilities when the fair value is negative. Fair
values are derived from valuation models.
Derivatives that are not designated as hedging derivatives are
treated as trading derivatives. These derivatives are measured at
fair value on a daily basis and gains and losses on revaluation are
posted to derivative expense and income accounts.
Certain derivatives are embedded in compound ﬁnancial instruments, which comprise the host instrument and the derivative. Pursuant to the applicable regulations, the Fund recognises changes in
assets and liabilities arising from the movements i

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